Fried, Frank, Harris, Shriver & Jacobson LLP
Direct Line: 212.859.8763
Fax: 212.859.4000
Philip.Richter@friedfrank.com
June 30, 2016
VIA EDGAR
Nicholas P. Panos
Senior Special Counsel
Jennifer Lopez
Attorney-Advisor
United States Securities and Exchange Commission
Office of Mergers and Acquisitions
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Re: Ultratech, Inc. (“Ultratech”)
Responses to Comments on Definitive Additional Materials filed on June 27, 2016
File No. 000-22248
Dear Mr. Panos and Ms. Lopez,
On behalf of Neuberger Berman LLC (“NB LLC”), a Delaware limited liability company, as well as Neuberger Berman Group LLC (“NB Group”), a Delaware limited liability company, Neuberger Berman Fixed Income Holdings LLC (“NB FI Holdings”), a Delaware limited liability company, Neuberger Berman Investment Advisers LLC (“NBIA”), a Delaware limited liability company, Beatriz V. Infante, Ronald Black, Benjamin Nahum, James F. McAree and Amit Solomon, Ph.D. (Mr. Solomon, and together with NB LLC, NB Group, NB FI Holdings, NBIA, Ms. Infante, Dr. Black, Mr. Nahum and Mr. McAree, the “Participants”), set forth below are responses to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the Staff's letter dated June 28, 2016 (the “Comment Letter”) relating to the Definitive Additional Materials filed by the Participants on June 27, 2016 (the “June 27 Materials”). The headings and numbered paragraphs of this letter correspond to the headings and paragraph numbers contained in the Comment Letter, and to facilitate your review, we have reproduced the text of the Staff’s comments in boldfaced print below. References in this letter to page numbers and section headings refer, unless stated otherwise, to page numbers and section headings in the June 27 Materials.
| 1. | As we believe the participants are aware, Note (b) to Rule 14a-9 provides examples of certain statements which may be viewed as misleading depending upon the facts and circumstances. The following assertions regarding the issuer’s management, including the board of directors, appear to fall within the scope of the rule: |
| · | “Ultratech may have the longest-serving underperforming CEO and Board of Directors in all of America.” (page 5) |
| · | Stating that the board has an “indefensible track record.” (page 6) |
Fried, Frank, Harris, Shriver & Jacobson LLP
These examples are not intended to serve as an exhaustive list of instances in which certain statements may have been inconsistent with Rule 14a-9. Please provide us with factualsupport for the cited statements. In addition, please confirm the participants will disclose the factual basis for similar such statements in the future, or advise.
Response: We acknowledge that Note (b) to Rule 14a-9 provides examples of statements which if made,“without factual foundation” may be viewed as misleading depending upon particular facts and circumstances. However, we respectfully submit that the Participants have included in both the June 27 Materials and in other Definitive Additional Materials they have filed meaningful factual support for the statements cited above regarding the underperformance by the CEO and Board of Ultratech, their long tenure and their poor track record, including the following:
| · | Ultratech’s stock was down 23% over the 20 year period ended December 31, 2015.See p. 4 of the June 27 Materials and Slide 7 of the Presentation entitled “The Need for Change at Ultratech, Inc; from a long-term investor’s perspective” filed by the Participants on June 22, 2016 (the “June 22 Materials”). In that connection, we also note that the information from FactSet reflected inExhibit A shows that the CEO of Ultratech is the only CEO of a US public company with a market cap over $400 million who has presided over a company for 20 years while the stock is down more than 20%; |
| · | Overthe 20 year period ended December 31, 2015, the S&P 500 Index, the Russell 2000 Index, the Nasdaq Composite Index and the S&P 1500 Semiconductor Equipment Index increased by 383%, 368%, 376% and 208%, respectively.See Slide 7 of the June 22 Materials; |
| · | Ultratech’stotal return over the 1, 3, 5 and 10 years beforeNB Group and its affiliates filed a Schedule 13D on August 10, 2015 was meaningfully below the total return generated over those periods by the Nasdaq Composite Index and the S&P 1500 Semiconductor Equipment Index. See Slide 10 of the June 22 Materials; and |
| · | Ultratech’s CEO has been in office since 1993 (over23 years) and its Board members have held office for an average of15 +years.See Slide 7 of the June 22 Materials and p. 4 of the June 27 Materials. |
Nonetheless, on behalf of the Participants, we confirm that the Participants will in the future clearly disclose the factual basis for statements they make of the type referenced in Note (b) to Rule 14a-9.
| 2. | Each statement or assertion of opinion or belief made in your filing must be characterized as such and be supported by a reasonable basis that is self-evident disclosed in the materials, or provided to the staff on a supplemental basis. Please revise to the extent necessary, and provide supplemental support where appropriate for any non-conforming statement, including the following: |
| · | “...our proposed independent nominees have created more than $1 billion in value for stockholders...,” (page 4) |
| · | Response: Please seeExhibit B attached hereto, which shows the shareholder value created by the two nominees at the companies at which they served as Chief Executives and for which there is public data. The Staff will observe from the data that, in the aggregate, the nominees have created almost $1.3 billion of value for equity holders of those companies. |
Fried, Frank, Harris, Shriver & Jacobson LLP
| · | “...losing anything less than 35% of stockholders’ money over ten years would qualify as outperformance,” (page 5) |
| · | Response: On p. 4 of the press release filed by Ultratech on June 20 and Slide 11 of Ultratech’s presentation filed on June 22, Ultratech contends that it has outperformed a select group of “peers,” in part, by virtue of the fact that its total shareholder return (“TSR”) exceeded thenegative 35% median TSR realized by the cited peers over the ten year period between December 31, 2005 and December 31, 2015. The statement referenced above reflects the Participants’’ observation that, using the “peers” selected by Ultratech leads to the (absurd) conclusion that a loss by Ultratech of anything less than 35% over 10 years would be considered “outperformance,” a conclusion the Participants obviously do not agree with. |
| · | “...for every one dollar of net income the Company has earned in the last 15 years, the Company’s CEO, CFO and directors have put two dollars in their own pockets as compensation.” (page 5) |
| · | Response: Please seeExhibit C attached hereto for the requested supporting information. The attached data from FactSet show that the Company’s cumulative net income over that period from 2001 through 2015 was $22,827,000. Using conservative assumptions – excluding (i) all equity compensation paid to the Company’s CEO and CFO prior to 2007 and (ii) all compensation paid to directors during 2001 through 2005 – the attached compensation data derived from the Company’s proxy statements indicate that, over the same 15 year period, the Company’s CEO, CFO and directors received cumulative compensation of $57,856,115, approximately 2.5 times the Company’s cumulative net income. |
Please contact me by phone at (212) 859-8763 or by email at Philip.Richter@friedfrank.com if you have any comments or questions about this letter.
| Very truly yours, | ||
| /s/ Philip Richter | ||
| Philip Richter | ||
CC:
Maxine Gerson
Managing Director and General Counsel
Neuberger Berman LLC
EXHIBIT A
FactSet Universal Screen
| Company Symbol | Company Name | Market ($ MM) | Compound 20 Years | CEO | CEO Start Date |
| UTEK | Ultratech, Inc. | 525.7 | -23.0 | Arthur W. Zafiropoulo | 1993 |
| SBCF | Seacoast Banking Corporation of Florida | 514.6 | -33.1 | Dennis S. Hudson, III, MBA | 1998 |
| AGII | Argo Group International Holdings, Ltd. | 1,671.0 | -62.8 | Mark E. Watson, III | 2000 |
| NCS | NCI Building Systems, Inc. | 774.9 | -79.9 | Norman C. Chambers, MBA | 2003 |
| HL | Hecla Mining Company | 714.6 | -71.7 | Phillips S. Baker, Jr. | 2003 |
| THC | Tenet Healthcare Corporation | 2,984.4 | -44.9 | Trevor Fetter, MBA | 2003 |
| SGY | Stone Energy Corporation | 2,371.8 | -72.1 | David H. Welch, PhD | 2004 |
| HLS | HealthSouth Corporation | 3,137.4 | -49.6 | Jay F. Grinney, MBA | 2004 |
| FCH | FelCor Lodging Trust Incorporated | 1,035.2 | -41.8 | Richard Allen Smith, CPA | 2006 |
| WNC | Wabash National Corporation | 768.1 | -41.3 | Richard J. Giromini | 2007 |
| MBI | MBIA Inc. | 981.9 | -68.4 | Joseph W. Brown, Jr. | 2008 |
| CLDX | Celldex Therapeutics, Inc. | 1,547.4 | -58.2 | Anthony S. Marucci, MBA | 2008 |
| MOD | Modine Manufacturing Company | 521.9 | -42.6 | Thomas Andrew Burke | 2008 |
| FBP | First Bancorp | 699.0 | -92.3 | Aurelio Alemán-Bermúdez | 2009 |
| CKEC | Carmike Cinemas, Inc. | 564.3 | -73.2 | S. David Passman, III, CPA | 2009 |
| XRX | Xerox Corporation | 10,766.4 | -37.8 | Ursula M. Burns | 2009 |
| KAI | Kadant Inc. | 437.5 | -43.5 | Jonathan W. Painter | 2010 |
| TGTX | TG Therapeutics, Inc. | 644.9 | -100.0 | Michael Sean Weiss | 2011 |
| DYN | Dynegy Inc. | 1,566.5 | -99.3 | Robert C. Flexon, CPA | 2011 |
| BZH | Beazer Homes USA, Inc. | 435.4 | -65.4 | Allan P. Merrill | 2011 |
| ATI | Allegheny Technologies Incorporated | 1,228.2 | -43.2 | Richard J. Harshman, CPA | 2011 |
| CACB | Cascade Bancorp | 441.9 | -53.1 | Terry E. Zink | 2012 |
| RAD | Rite Aid Corporation | 8,340.1 | -50.5 | John T. Standley | 2012 |
| ELY | Callaway Golf Company | 883.3 | -45.2 | Oliver G. Brewer, III, MBA | 2012 |
| AVP | Avon Products, Inc. | 1,763.8 | -31.4 | Sherilyn S. McCoy, MBA | 2012 |
| MU | Micron Technology, Inc. | 17,237.0 | -28.4 | D. Mark Durcan | 2012 |
| C | Citigroup Inc. | 152,832.2 | -26.0 | Mike L. Corbat | 2012 |
| MGLN | Magellan Health, Inc. | 1,522.5 | -99.2 | Barry M. Smith | 2013 |
| HRTX | Heron Therapeutics Inc | 964.0 | -93.9 | Barry D. Quart, PharmD | 2013 |
| X | United States Steel Corporation | 1,167.3 | -63.2 | Mario Longhi Filho | 2013 |
| ODP | Office Depot, Inc. | 3,074.0 | -56.9 | Roland C. Smith | 2013 |
| NEM | Newmont Mining Corporation | 9,528.4 | -51.1 | Gary J. Goldberg, MBA | 2013 |
| CHK | Chesapeake Energy Corporation | 2,985.1 | -48.9 | Robert Douglas Lawler, MBA | 2013 |
| CBB | Cincinnati Bell Inc. | 755.6 | -46.5 | Theodore H. Torbeck, MBA | 2013 |
| SWC | Stillwater Mining Company | 1,037.4 | -33.2 | Michael James McMullen | 2013 |
| AIG | American International Group, Inc. | 73,987.0 | -81.3 | Peter D. Hancock | 2014 |
| CPF | Central Pacific Financial Corp. | 690.6 | -79.2 | Agnes Catherine Ngo | 2014 |
| MTG | MGIC Investment Corporation | 2,999.2 | -65.2 | Patrick Sinks, MBA | 2014 |
| AMD | Advanced Micro Devices, Inc. | 2,312.6 | -65.2 | Lisa T. Su, PhD | 2014 |
| WPP | Wausau Paper Corp. | 568.5 | -30.1 | Michael C. Burandt | 2014 |
| MEG | Media General, Inc. | 2,076.9 | -27.8 | Vincent L. Sadusky, MBA | 2014 |
| LJPC | La Jolla Pharmaceutical Company | 492.6 | -100.0 | George Francis Tidmarsh, MD, PhD | 2015 |
| YRCW | YRC Worldwide Inc. | 455.8 | -100.0 | James L. Welch | 2015 |
| MATN | Mateon Therapeutics, Inc. | #N/A | -100.0 | William D. Schwieterman, MD | 2015 |
| AXLL | Axiall Corporation | 1,087.0 | -97.4 | Timothy Mann, Jr. | 2015 |
| UIS | Unisys Corporation | 551.9 | -79.9 | Peter A. Altabef, PhD | 2015 |
| JCP | J. C. Penney Company, Inc. | 2,222.3 | -77.5 | Marvin R. Ellison, MBA | 2015 |
| MERC | Mercer International Inc. | 583.7 | -48.3 | David M. Gandossi | 2015 |
| RIG | Transocean Ltd. | 4,506.8 | -33.0 | Jeremy D. Thigpen | 2015 |
| IVC | Invacare Corporation | 566.3 | -28.2 | Matthew E. Monaghan, MBA | 2015 |
| SVU | SUPERVALU INC. | 1,306.5 | -29.6 | Mark Gross | 2016 |
EXHIBIT B
| Companies at Which Nominees Served as Chief Executive Officers For Which there is Public Returns Information | |||||||||
Company Name | Nominee | Security | Shares | Service (or Issuance) | Service End | Gain/Loss | Notes | ||
Date | Price* | Date | Price* | ||||||
| Aspect Communications | Beatriz Infante | ||||||||
| Common Stock at 10/1998 | 51,156,055 | Oct-98 | $15.13 | Oct-03 | $13.54 | $(81,338,127) | |||
| Preferred Stock | 22,222,222 | Nov-02 | $2.25 | Oct-03 | $13.54 | $250,888,889 | |||
| Options Outstanding YE 1998 | 10,528,842 | NA | NA | NA | NA | $- | Avg price underwater at time of employment. Remain underwater | ||
| Options Granted in 1999 | 5,310,584 | Avg Price | $11.41 | Oct-03 | $13.54 | $11,311,544 | |||
| Options Granded in 2000 | 7,085,476 | Avg Price | NA | NA | NA | $- | No intrinsic value at time of employment end | ||
| Options Granted in 2001 | 7,101,150 | Avg Price | $4.90 | Oct-03 | $13.54 | $61,353,936 | |||
| Options Granted in 2002 | 6,329,232 | Avg Price | $3.69 | Oct-03 | $13.54 | $62,342,935 | |||
| Options Granted in 2003 | 1,894,545 | Avg Price | $3.85 | Oct-03 | $13.54 | $18,358,141 | Assumes that three-quarters of option grants were made before departure | ||
| Rambus, Inc. | Ronald Black | ||||||||
| Common Stock | 110,696,401 | Jun-12 | $5.74 | Current | $11.77 | $667,499,298 | |||
| Convertible | 120,000 | Aug-13 | $1,000 | Current | $1,126 | $15,150,000 | |||
| Options Out YE 2011 | 14,587,596 | NA | NA | NA | NA | $- | Avg price underwater at time of employment. Remain underwater | ||
| Options Granted in 2012 | 7,789,220 | Avg Price | $5.81 | Current | $11.77 | $46,423,751 | |||
| Options Granted in 2013 | 2,084,276 | Avg Price | $6.09 | Current | $11.77 | $11,838,688 | |||
| Options Granted in 2014 | 2,370,313 | Avg Price | $9.63 | Current | $11.77 | $5,072,470 | |||
| Options Granted in 2015 | 362,335 | Avg Price | $11.27 | Current | $11.77 | $181,168 | |||
| UPEK | Ronald Black | ||||||||
| Private Investors | $32,000,000 | $110,500,000 | $78,500,000 | Includes value received by UPEK holders at time of Authentec sale to Apple | |||||
| WaveCom | Ronald Black | ||||||||
| Common Stock | 18,200,000 | Aug-04 | $3.68 | Jun-09 | $11.85 | $148,675,800 | Euro to USD conversion at spot prices | ||
| Total | $1,296,258,492 | ||||||||
EXHIBIT C Comparison of Compensation to Net Income* | |||||||||||||||||
Dec '15 | Dec '14 | Dec '13 | Dec '12 | Dec '11 | Dec '10 | Dec '09 | Dec '08 | Dec '07 | Dec '06 | Dec '05 | Dec '04 | Dec '03 | Dec '02 | Dec '01 | |||
| CEO Compensation | |||||||||||||||||
| Cash and Bonus | $571,978 | $567,784 | $576,236 | $482,723 | $206,416 | $212,200 | |||||||||||
| Total Pay | $1,191,824 | $3,017,462 | $3,308,903 | $5,581,373 | $5,340,242 | $3,619,210 | $1,899,387 | $2,034,118 | $567,732 | ||||||||
| CFO Compensation | |||||||||||||||||
| Cash and Bonus | $320,385 | $271,410 | $264,985 | $259,860 | $200,366 | $127,957 | |||||||||||
| Total Pay | $578,921 | $1,793,514 | $1,691,721 | $3,229,742 | $3,126,613 | $2,597,894 | $940,563 | $816,142 | $349,935 | ||||||||
| Board Compensation | $1,080,340 | $1,449,050 | $2,018,900 | $2,188,696 | $1,622,925 | $844,158 | $868,451 | $755,077 | $687,740 | $593,182 | |||||||
| Total Compensation | |||||||||||||||||
| Annual | $2,851,085 | $6,260,026 | $7,019,524 | $10,999,811 | $10,089,780 | $7,061,262 | $3,708,401 | $3,605,337 | $1,605,407 | $1,485,545 | $839,194 | $841,221 | $742,583 | $406,782 | $340,157 | ||
| Cumulative | $57,856,115 | $55,005,030 | $48,745,004 | $41,725,480 | $30,725,669 | $20,635,889 | $13,574,627 | $9,866,226 | $6,260,889 | $4,655,482 | $3,169,937 | $2,330,743 | $1,489,522 | $746,939 | $340,157 | ||
| Net Income | |||||||||||||||||
| Annual | (15,128,000) | (19,111,000) | (13,769,000) | $47,187,000 | $39,230,000 | $16,781,000 | $2,129,000 | $11,777,000 | (1,044,000) | (8,968,000) | (1,221,000) | $624,000 | $7,566,000 | (25,382,000) | (17,844,000) | ||
| Cumulative Net Income | $22,827,000 | $37,955,000 | $57,066,000 | $70,835,000 | $23,648,000 | $(15,582,000) | $(32,363,000) | $(34,492,000) | $(46,269,000) | $(45,225,000) | $(36,257,000) | $(35,036,000) | $(35,660,000) | $(43,226,000) | $(17,844,000) | ||
| Ratio | 2.5x | ||||||||||||||||
| * | Compensation numbers only include Board pay from 2006 to 2015 because of changes in disclosure. Executive compensation numbers do not include any value for equity grants prior to 2007 because of changes in disclosure. | ||||||||||||||||
| Source for Net Income data is FactSet. Compensation numbers from latest proxy statement to provide compensation for each year. | |||||||||||||||||
