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Legion Partners Issues Presentation Highlighting the Immediate Need for New Independent and Qualified Directors at OneSpan

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Legion Partners Asset Management beneficially owns approximately 6.9% of OneSpan Inc. (OSPN) and has nominated four independent directors for election to the Board at the upcoming 2021 Annual Meeting. Their presentation highlights OneSpan's persistent underperformance, trading at a 70% discount to peers, with total shareholder returns lagging significantly. Legion criticizes the Board's lack of relevant skills and a credible plan to improve the company's valuation, asserting that leadership changes are essential to enhance corporate governance and strategy.

Positive
  • Legion Partners nominated four highly qualified independent directors for OneSpan's Board.
  • Nominees possess extensive experience in tech and finance, aiming to enhance OneSpan's governance.
Negative
  • OneSpan's stock is trading at a 70% valuation discount compared to peers.
  • The Board lacks the necessary skill sets for strategic oversight needed for transitioning to a cloud-first model.
  • Total shareholder returns have consistently underperformed over 1, 3, 5, 10, and 15 year periods.

Legion Partners Asset Management, LLC, which, together with its affiliates (collectively, “Legion Partners” or “Legion”), beneficially owns 2,790,121 shares of common stock of OneSpan Inc. (“OneSpan” or the “Company”) (Nasdaq: OSPN), representing approximately 6.9% of the outstanding stock, today issued a presentation highlighting the need for new independent directors on OneSpan’s Board of Directors (the “Board”). Legion Partners has nominated four highly-qualified independent directors for election to the Company’s Board at the Company’s 2021 Annual Meeting of Stockholders (the “Annual Meeting”): Sarika Garg, Sagar Gupta, Michael J. McConnell and Rinki Sethi.

The full presentation is available at: https://protectonespan.com/wp-content/uploads/2021/05/Legion-Partners-OSPN-Proxy-Fight-Presentation-vFF-5.16.21.pdf

Key points from the presentation include:

  • OneSpan’s stock has been a serial underperformer: The Company currently trades at ~70% valuation discount to peers and its total shareholder returns (“TSR”) has severely underperformed across 1, 3, 5, 10, and 15 year periods.[1] The Company’s Board lacks directors with relevant skillsets needed to remedy this issue including improving strategic oversight and corporate governance.
  • The Board’s reactive maneuvers have failed to improve total shareholder return: OneSpan is transitioning from Hardware to a cloud-first, recurring revenue Software company, but the Board’s skill sets do not appear to have appropriately evolved with this strategy. Despite our significant efforts to collaborate on refreshment to address this issue, the Board has defensively added new directors with questionable qualifications and fit, as well as prior connections to existing directors, and have only made these moves in the face of public pressure.
  • The Board has no credible plan to fix OneSpan’s valuation: In the presentation, Legion offers several plans to address multiple issues weighing on OneSpan’s valuation, including plans to improve OneSpan’s financial disclosures, investor communications, capital allocation, strategic oversight, governance, and executive compensation. Legion’s nominees would seek to take a holistic approach to reversing decades of underperformance overseen by the Board.
  • The Board’s leadership and culture need to change: Legion contends that the Company’s TSR has not improved because the real power in the boardroom has not changed as longer tenured and underqualified directors continue to hold key leadership positions – and are highly reluctant to meaningfully engage with stockholders, including Legion.

Legion’s nominees represent a world-class group of technologists, operators, executives and investors who have overseen, led and invested in numerous successful modern public software and hardware companies.

For more information about Legion’s case for change at OneSpan, please visit https://protectonespan.com/.

VOTE FOR LEGION’S FOUR NOMINEES ON THE WHITE PROXY CARD TODAY

About Legion Partners

Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, CA. Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world’s largest institutional and HNW investors.


  1. As of 2/24/21 (the “Unaffected Date”) (one day following Q4 2020 earnings on 2/23/21 after market close, and one day prior to Legion’s public nomination on 2/25/21 before market open)

FAQ

What are Legion Partners' concerns about OneSpan Inc. (OSPN)?

Legion Partners highlighted OneSpan's persistent underperformance, lack of relevant Board skills, and inadequate strategic oversight.

Who has Legion Partners nominated for OneSpan's Board?

Legion Partners has nominated Sarika Garg, Sagar Gupta, Michael J. McConnell, and Rinki Sethi for election at the 2021 Annual Meeting.

How has OneSpan's stock performed compared to its peers?

OneSpan's stock is trading at approximately a 70% discount to its peers, indicating significant underperformance.

What is Legion's proposal to improve OneSpan's valuation?

Legion proposes enhancing financial disclosures, investor communications, capital allocation, and overall governance to rectify OneSpan's valuation issues.

What is the significance of the upcoming 2021 Annual Meeting for OneSpan?

The Annual Meeting will be pivotal as Legion Partners seeks to elect new independent directors to improve governance and shareholder returns.

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