REDWOOD CITY, Calif.–(BUSINESS WIRE<\/a>)– \nIn conjunction with the definitive proxy filing, Box is mailing a letter to the company\u2019s stockholders.\n<\/p>\n \nHighlights from the letter include:\n<\/p>\n Box\u2019s director nominees \u2013 Dana Evan, Peter Leav and Aaron Levie \u2013 are vastly superior to Starboard\u2019s candidates and best positioned to advance Box\u2019s strategy<\/b>: We are confident that the skillsets of the company\u2019s nominees outmatch Starboard\u2019s slate in every critical area. Combined, Box\u2019s nominees bring nearly seven decades of SaaS and enterprise software experience and have led multiple company sale transactions totaling tens of billions of dollars2<\/sup>, maximizing stockholder value. Collectively, the Box Board has significant public company experience serving as directors and C-suite executives of multi-billion dollar publicly traded SaaS and enterprise software companies.\n<\/li>\n<\/ul>\n \nBox\u2019s definitive proxy materials and other materials regarding the Board of Directors\u2019 recommendation for the 2021 Annual Meeting can be found at VoteBlueforBox.com<\/a>.\n<\/p>\n \nThe full text of the letter being mailed to stockholders follows:\n<\/p>\n Preserve the Long-Term Value of Your Investment:<\/b><\/p>\n Vote \u201cFOR ALL\u201d Three of Box\u2019s Highly Qualified Director Nominees – Dana Evan, Peter Leav and Aaron Levie – On the BLUE Proxy Card Today <\/b><\/p>\n \nJuly 19, 2021\n<\/p>\n \nDear Fellow Stockholder,\n<\/p>\n \nYour Board of Directors is singularly focused on enhancing the value of your investment in Box, and we have been unified and unwavering in our commitment to acting in the best interests of all stockholders.\n<\/p>\n \nAt the upcoming Annual Meeting you will have an important choice to make regarding the future of your investment in Box. There are five important reasons why we believe the choice is clear and you should vote \u201cFOR ALL\u201d three of Box\u2019s director nominees \u2013 Dana Evan, Peter Leav and Aaron Levie \u2013 on the BLUE<\/span><\/b> proxy card:\n<\/p>\n \n\u00a0\n<\/p>\n \nOver the last year, we have engaged with our stockholders extensively. Your Board listened to stockholder feedback and took a series of proactive actions, including making significant changes to the composition of the Board and its leadership positions. Your Board is effectively overseeing substantial improvement in growth and margin profitability and the successful execution of Box\u2019s strategy to accelerate profitable growth and enhance the value of your shares. Our strategy is working, and Box is in the strongest financial position in its history.\n<\/p>\n \nOur March 2020 agreement with Starboard Value resulted in the appointment of three new directors to the Board, and the Box Board and management team have continued extensive good faith engagement with Starboard since that time. Nonetheless, Starboard is now attempting to elect its own slate of nominees in place of Box\u2019s three vastly superior director candidates \u2013 Dana Evan<\/b>, former Chief Financial Officer of VeriSign and 2019 \u2018Director of the Year\u2019 of the National Association of Corporate Directors (NACD), Peter Leav<\/b>, CEO of McAfee and former CEO of BMC and Polycom, and Aaron Levie<\/b>, Box\u2019s Co-Founder and CEO. Notably, the experience of Box\u2019s nominees includes an impressive track record of multi-billion-dollar value creation at SaaS-based companies, both as operators and as board members.<\/p>\n \nIn stark contrast, Starboard\u2019s nominees do not possess the industry, public company or operational experience necessary to serve as effectively on the Box Board. By seeking to unseat three members of the Board, including Box\u2019s CEO, Starboard is attempting to implement change that we believe is not only unnecessary, but also destructive to stockholder value.<\/b><\/p>\n The answer is clear \u2013 a vote for Box\u2019s director nominees is in the best interest of all stockholders: <\/b>Is Box better off continuing its current positive momentum with a re-election of its three highly qualified directors \u2013 including its CEO \u2013 all of whom have impressive track records at SaaS-based companies? Or, despite the strong top- and bottom-line financial progress and the level of Board responsiveness since last year\u2019s settlement, is replacing Box\u2019s three highly qualified directors with three Starboard directors and changing course really in the best interests of all Box stockholders? We believe the answer is clear: re-electing Box\u2019s nominees and having a Board focus on short- and long-term value will best position the company to successfully deliver Box\u2019s vision. The addition of directors representing Starboard\u2019s short-term, pre-set agenda would jeopardize the momentum underway and put future stockholder value at risk.\n<\/p>\n Box Has Taken Proactive Actions to Deliver Long-Term Value Creation, and Is Delivering Strong Results<\/b><\/p>\n \nToday, Box is in the strongest financial position in its history, while continuing to push the envelope and pioneer the content management industry as it serves more than 100,000 customers around the world.\n<\/p>\n \nOur strategy is working, and your Board and management team are best positioned to build on the company\u2019s momentum and continue to create value for all stockholders. In fact, since January 15, 2021, the last trading day prior to when the Board began its strategic review, Box\u2019s share price has increased over 30%, outperforming Box\u2019s SaaS Peer Set3<\/sup> by over 36%.\n<\/p>\n \nBox is executing a clearly defined plan to accelerate revenue growth while driving further margin improvement. With a more efficient and productive go-to-market strategy, a differentiated product portfolio and strong customer momentum, Box is on track to deliver the vision of the Content Cloud and primed to capture one of the largest markets in software \u2013 content management, collaboration, storage and data security, which represents a total addressable market of over $55 billion annually. We are:\n<\/p>\n \nFurthermore, as companies accelerate their move to the cloud, implement hybrid work strategies and seek to securely enable digital transformation, Box is extremely well positioned at the center of these megatrends. We are delivering the broadest and most innovative cloud content management platform on the market, strengthening our partner ecosystem and enhancing integrations with Google Workspace, Microsoft Teams, Okta, Salesforce, Slack, and Zoom, among others, and expanding our product portfolio through:\n<\/p>\n \nBox delivered strong revenue growth and profitability in fiscal year 2021 and that momentum has not only continued but accelerated into the first quarter of fiscal 2022, the results of which we reported on May 27, 2021 4<\/sup>.\n<\/p>\n \nFor Fiscal 2021, we achieved:\n<\/p>\n \nFor First Quarter Fiscal 2022, we achieved:\n<\/p>\n \nIn addition, with our first quarter fiscal 2022 earnings report, we also raised revenue and operating margin guidance for the full year fiscal 2022 to the following4<\/sup>:\n<\/p>\n \nThe Board and management team are also confident in our ability to achieve our fiscal 2024 financial targets of 12% to 16% revenue growth and operating margins between 23% to 27%.\n<\/p>\n Your Board is Highly Qualified, Engaged and Diverse: Seven New Independent Directors Added Since 2018, Including Three Appointed in Starboard Settlement <\/b><\/p>\n \nThe Box Board is meaningfully refreshed, resulting in a dynamic boardroom with new and varied perspectives. Your Board consists of ten directors \u2013 seven of whom joined since 2018 as independent directors. In addition, John Park, Head of Americas Technology Private Equity at KKR, was appointed in conjunction with the KKR-led investment in May.\n<\/p>\n \nCollectively, your directors have significant public company experience that is highly relevant to overseeing the execution of Box\u2019s strategy, serving as directors and C-suite executives of multi-billion dollar publicly traded SaaS and enterprise software companies. We have also made substantial corporate governance enhancements, including separating the Chair and CEO roles by naming Bethany Mayer as the independent Chair of the Board and Chair of the Compensation Committee. Jack Lazar was also appointed as Chair of the Audit Committee.\n<\/p>\n Box Board of Directors Skills & Experience<\/b><\/p>\n<\/td>\n Number of Box Directors<\/b><\/p>\n<\/td>\n<\/tr>\n \nSaaS and Enterprise Software, as Executive or Director\n<\/p>\n<\/td>\n \n10\/10\n<\/p>\n<\/td>\n<\/tr>\n \nPublic Multi-Billion Dollar Company C-Suite Executive\n<\/p>\n<\/td>\n \n9\/10\n<\/p>\n<\/td>\n<\/tr>\n \nPublic Multi-Billion Dollar Technology Company Director\n<\/p>\n<\/td>\n \n10\/10\n<\/p>\n<\/td>\n<\/tr>\n \nLeading Value-Maximizing Company Sale Transactions\n<\/p>\n<\/td>\n \n8\/10\n<\/p>\n<\/td>\n<\/tr>\n \nFinance and Investment (at Technology or Financial Services Companies)\n<\/p>\n<\/td>\n \n4\/10\n<\/p>\n<\/td>\n<\/tr>\n \nGlobal Go-to-Market Strategy and Business Operations\n<\/p>\n<\/td>\n \n10\/10\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nFurthermore, members of the Board have demonstrated a clear willingness to pursue a sale of a company when it generates the greatest value for stockholders. In fact, Box Board members have been directors or executives at no fewer than 30 companies that have been sold, including 14 public companies. And this does not even include the track record of John Park as Head of Americas Technology Private Equity at KKR.\n<\/p>\n Box\u2019s Nominees Are Best Positioned to Advance Box\u2019s Strategy and Vastly Superior to Starboard\u2019s Slate<\/b><\/p>\n \nThe company\u2019s directors up for re-election at the Annual Meeting \u2013 Dana Evan, Peter Leav, and Aaron Levie <\/b>\u2013 have played essential roles in designing and overseeing the execution of Box\u2019s strategy, and have the expertise needed to continue to drive the company forward. We are confident that their skillsets are vastly superior to those of Starboard\u2019s nominees for the Box Board. Combined they bring nearly seven decades of SaaS and enterprise software experience, either as operators or board members, and have led multiple company sale transactions totaling tens of billions of dollars5<\/sup>, maximizing stockholder value. More specifically:\n<\/p>\n Your Board Is Operating with the Best Interests of All Stockholders in Mind, and the KKR-Led Investment Demonstrates that Commitment <\/b><\/p>\n \nThe Strategy Committee of our Board \u2013 which included all three directors appointed to the Board pursuant to the March 2020 settlement agreement with Starboard \u2013 led a multi-month comprehensive review of strategic options to drive stockholder value, which included evaluating a potential sale of the entire company as well as not entering into any transaction.\n<\/p>\n \nAfter the conclusion of the strategic review, the Strategy Committee unanimously recommended, and the full Board unanimously agreed, to approve the KKR-led investment and subsequent \u201cDutch auction\u201d self-tender. We believe that this decision, coupled with continuing to execute the company\u2019s strategic plan, is the path that maximizes value for all stockholders. Specifically:\n<\/p>\n It is important to note that the KKR-led investment and subsequent self-tender provided stockholders with the ability to sell their stock at a materially higher premium than a sale of the company that had been demanded by Starboard when the stock was trading at $17 to $18 per share. <\/b><\/p>\n \nFurthermore, the Board has previously stated it anticipates deploying the unused portion of the $500 million intended for the tender offer to repurchase shares. As a consequence, the KKR-led investment, and subsequent self-tender transaction, with the Board\u2019s authorization to repurchase shares is expected to be non-dilutive to stockholders.\n<\/p>\n Box Has a Long History of Constructive Engagement with Starboard and Has Been Responsive to Starboard\u2019s Suggestions<\/b><\/p>\n \nOver the past two years, the Board has consistently engaged in good faith with Starboard (including at least 45 calls or meetings with Starboard during this time period), has been responsive to Starboard\u2019s suggestions and demands, and has itself taken proactive actions to enhance the company\u2019s governance and oversee improved operating performance. As part of the March 2020 settlement with Starboard, we replaced three long-standing directors with three new directors \u2013 Ms. Mayer, Mr. Lazar and Mr. Bass. Pursuant to the settlement, we also formed an Operating Committee, which included two of these new directors and which has overseen an increased focus on growth and operating margin improvement. The Board later formed a Strategy Committee to complete a comprehensive review of strategic options, which Starboard had also demanded.\n<\/p>\n \nThe Board has taken action to enhance the company\u2019s corporate governance, including separating the Chair and CEO roles with Mr. Levie stepping down as Chair, naming Ms. Mayer as Chair of the Board and Chair of the Compensation Committee, and naming Mr. Lazar as Chair of the Audit Committee. As a result, the directors appointed pursuant to the Starboard settlement hold a majority of the leadership positions on the Board and have extensive representation on its committees, including:\n<\/p>\n \nImportantly, the work of the Operating Committee and management, and these governance enhancements more generally, led to substantial progress across all facets of the business \u2013 strategic, operational and financial. These efforts were reflected in Box\u2019s first and second fiscal quarter results announced in May 2020 and August 2020, respectively. In emails in the wake of these results, Starboard stated to the company that Box was \u201con a good path\u201d<\/b> and that Starboard was \u201cthrilled to see the company breaking out.\u201d<\/b> Starboard further noted, \u201cappreciate you guys working with us and accepting the counsel. Not everyone behaves that way and it is greatly appreciated.\u201d <\/b><\/p>\n \nHowever, just three months later following two quarters of Starboard praising Box\u2019s improved financial performance, on December 1, 2020 when Box announced revenue guidance slightly below expectations, Starboard<\/b>reversed course and stated that the Box Board should either explore a sale of the company, or fire the company\u2019s CEO \u2013 otherwise Starboard would launch a proxy contest<\/b>. While guiding higher on profitability, the company noted that it expected revenue to be in the range of $196 million to $197 million, 1% below analysts\u2019 consensus estimates, as we were being \u201cprudent in our growth expectations given the macroeconomic challenges that our customers are facing.\u201d While the company\u2019s stock price initially declined on December 2, 2020 to a closing price of $16.91 from a closing price of $18.54 the day prior, the stock price quickly returned to levels in line with prices from prior to the earnings report, closing at $18.85 on December 16, 2020.\n<\/p>\n \nSince December, Starboard has taken the position that Box sell itself or fire the company\u2019s CEO. When the stock was trading at $17 to $18 per share, Starboard indicated that sale in the low twenties per share would be acceptable to Starboard. <\/b>Subsequently, in mid-March when the stock was trading in the $21 to $22 per share range, Starboard indicated that a low-premium deal would be acceptable and should be pursued. Indeed, in late March and early April 2021, Starboard sold hundreds of thousands of shares at prices ranging from $21.85 to $24.63. Since the time Starboard told the company to explore a sale in early December, Box\u2019s stock has appreciated in value by 35%.<\/p>\n \nNotwithstanding the short-term focus reflected by Starboard\u2019s abrupt about-face, the Board and company did not dismiss Starboard\u2019s demands. Led by the Strategy Committee, whose members include Mr. Bass, Ms. Evan, Ms. Mayer and Mr. Lazar, Box spent the next several months conducting a comprehensive review of strategic options, including on a sale of the Company, to determine the best path for stockholder value creation.\n<\/p>\n \nMore recently, the Board has had multiple conversations with Starboard in a continuing effort to find a mutually agreeable path forward:\n<\/p>\n \nYour Board has been open-minded and responsive to stockholder input, including that of Starboard. Do not be misled by Starboard\u2019s recasting of its interactions with the company.\n<\/p>\n \nWith visionary leadership, a substantially refreshed Board, and financial results that validate our strategic direction, Box is firing on all cylinders. The current Box Board \u2013 including Dana Evan, Peter Leav and Aaron Levie, the three directors up for re-election this year \u2013 is uniquely equipped to guide the company\u2019s strategy, with the expertise necessary to successfully deliver Box\u2019s vision and drive enhanced stockholder value. We urge you to use the enclosed BLUE proxy card to vote today \u201cFOR ALL\u201d three of Box\u2019s director nominees: Dana Evan, Peter Leav and Aaron Levie. <\/b><\/p>\n \nStarboard\u2019s proposed changes to the Board would risk this significant progress and jeopardize the long-term potential of your investment. Please do not vote using any White proxy card you may receive from Starboard\u2014even as a \u201cprotest vote.\u201d Any vote on the White proxy card will revoke your prior vote on a BLUE proxy card, and only your latest-dated proxy counts. <\/b><\/p>\n \nThe Box Board has been unified and unwavering in its commitment to act in the best interests of all stockholders. We look forward to continuing our engagement with you as we work to deliver enhanced stockholder value in the years ahead.\n<\/p>\n \nThank you for your support,\n<\/p>\n \nBox Board of Directors\n<\/p>\n
\nBox, Inc. (NYSE: BOX) today announced that it has filed definitive proxy materials with the Securities and Exchange Commission (\u201cSEC\u201d) in connection with its upcoming Annual Meeting of Stockholders scheduled to be held on September 9, 2021. Stockholders of record as of July 12, 2021, will be entitled to vote at the meeting.\n<\/p>\n\n
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