With respect to your letter in reply to Sister Doris suggestion about nominating qualified

women and minorities to the board of directors, I have made an analysis, which I am going
to elucidate as below.
On April 23, 1996, a letter was addressed to Cypress Company from Sister Doris of The
Sisters of St. Francis of Philadelphia, stating that a company is best represented by a Board
of qualified Directors reflecting the equality of the sexes, races, and ethnic groups. The
letter then went on to present the policies of their congregation, which is a beneficial owner
of number of Cypress shares, regarding the withholding of authority to vote for the
nominees of a Board of Directors that do not include women and minorities. This statement
by Sister Doris was not in tune with the intention of the whole letter which was to encourage
the Board to seek qualified women and members of the minorities to be nominated into the
Board of Directors.
My analysis of your response to Sister Doriss letter can be categorized into four different
parts. The first part refers to the elements of the letter that express personal views and not
necessarily reflect the views of the Cypress Company as a whole. This occurs in the first
statement, where it mentions the letter sent by Sister Doris to be criticizing and does provoke
agitation on the part of the reader. Moreover, value judgements about a womans view and
the fundamentally wrong nature of boardroom diversification is unwarranted since there is
no veracity to the claim that the advice of qualified women and minorities on running a
business will be necessarily unsuccessful. Likewise, statements about the requirements of
Sister Doriss congregation being immoral and tending to cause harm to people through
jeopardizing the investment of investors and retirees hold no ground and could have been
avoided altogether. This is because there is no truth in the claim that meeting such
requirements will cause grievance to the investors and as such, the correlation of causing
harm to profit maximization might not reflect the general view of Cypress and its board.
Furthermore, denoting the requirements as an arbitrary social agenda and assuming that
Sister Dorleys congregation is a special interest group with no business expertise is based
on perception of the Convent and doesnt necessarily resonate with the views of Cypress.
The second part reflects to the components of the letter that provides too much information.
Firstly, the competitive nature of the semiconductor business having been defined, there was
no need of mentioning that there have been more corporate casualties than survivors.
Likewise, while detailing the essential criteria for the board membership of Cypress,
mentioning that one needed direct experience in the management of a company indulged in
buying from another company was also being too informative, for it was mentioned
beforehand that direct expertise in the semiconductor business in terms of education and

management experience was required. Furthermore, bringing up ones fellow classmates

sons college fund owning Cypress stock and the absurdity of the senators proclaimed
notion of responsible corporation was not required to further ones point.
The third part of my analysis outlines the lack of brevity in the response to Sister Doriss
letter. Throughout the letter, there has been instances of the argument to the requirements
being prolix in conveying them (the arguments) to the listener. The effects of the
requirements causing harm to people through jeopardizing the monetary investments of
people and the shrinking of the economy has been described in a protracted manner.
Likewise, the elucidation of your priorities regarding standards of right and wrong was too
lengthy. It could have been stated concisely. Moreover, statements like a final point with
which you undoubtedly disagree, what worries me, I infer that and what package that
talent comes are unnecessary and can be cut down for there is no reason for them to be
mentioned explicitly.
The fourth part of my analysis reflects on the pertinence of the arguments to the operating
principles espouse by Sister Doris on behalf of the congregation. A major portion of the letter
talks about the proposal for political institutionalization of the notion of responsible
corporations. It also talks about the societal and political pressures affecting the business
and elucidates the remunerations given to the CEOs as compared to the least paid
employed to further the case. The letter also presents a synopsis of what the congregation,
as a rightful shareholder voted against and the issues that other investors have. All of the
reasons advocated in the letter are irrelevant to the problem statement at hand, which is the
inclusion of qualified women and minorities in the Board of Directors of Cypress. Instead,
because of the arguments being impertinent, the issue at hand is skirted and the focus of the
letter shifts to the morality of voting and the absurdity of the Senate proposal.
The response letter in the initial stages does attempt to provide a rebuttal to the argument
espoused by Sister Doris, but then loses steam. Instead, it expresses ones personal stance,
and at times launches into personal attacks on the morality and philosophical correctness of
the recipient. This discourages co-operation between the sender and the receiver and the
letter, which is intended to make the other side understand of ones point of view regarding
the concerns raised, serves no purpose altogether.

Doris Gormley, OSF

Director, Corporate Social Responsibility
The Sisters of St. Francis of Philadelphia
Our Ladies of Angels Convent Glen Riddle
Aston, PA 19014

Dear Sister Gormley,

Thank you for your letter conveying the concern over the composition of the current board of
directors with respect to the proportionate representation of women and other minorities. It is
heartening to know that our shareholders are interested in our enrichment of the board of
directors, and consequently, our social obligations. Besides, it also gives us an opportunity to
shed light on our position regarding such issues.

With regards to your suggestion about the seeking of qualified women and members of the
racial minorities to the board of directors, we too would like to embrace the same as it adds
diversification in terms of the opinion put across the table. However, Cypress is certain to
encounter glaring issues in implementing this suggestion, which I have elucidated as below.
The semiconductor business is highly competitive, with the Japanese, the Taiwanese, and
the Koreans in the race for market share. Hence, the part of the board of directors, in
ensuring the growth of Cypress is very critical. Consequently, the essential criteria for a
person seeking nomination to the board of directors is stringent, in terms of his/her
qualification, experience and exposure. Coincidentally, the quest for such nominees, on the
basis of the aforesaid criteria has resulted in a male, who has made headway in one or more
corporations to reach its pinnacle. However, there is a negligible number of women and
members of other minorities that seem to possess such qualities.

Moreover, the consideration of reservations based upon gender, race or ethnicity is

unfavorable to the interest of our stakeholders and in the long run will be detrimental to our
company. It will also be unfair to qualified people, if they lose out on the membership to the
board of directors basing on such reservations. Additionally, it might also lead to the
institutionalization of insult, which is worrisome for the image of the company.

Rest be assured, your suggestion will be heeded to, after giving due consideration to all the
factors that might picture in the well-being of the company. In the meantime, I would request
you to keep your faith in us. We look forward to your support.

Sincerely,
T.J. Rodgers
President CEO
TJR/cxs