PLX Technology Begins Mailing of Definitive Proxy Materials, Letter to Stockholders

PLX Technology, Inc.(NASDAQ: PLXT), the global leader in PCI Express(R) (PCIe(R)) siliconand software connectivity solutions enabling emerging data centerarchitectures, today announced that it has commenced the mailing ofdefinitive proxy materials to PLX Technology stockholders inconnection with the Company's 2013 Annual Meeting of Stockholders onDecember 18, 2013.The PLX Board of Directors unanimously recommend that stockholdersprotect the value of their investment in PLX Technology by voting onthe WHITE proxy card "FOR ALL" the following very experienced andhighly qualified director nominees: D. James Guzy, John H. Hart,David Raun, Thomas Riordan, Michael J. Salameh, Ralph Schmitt, RobertH. Smith and Patrick Verderico.Included in the proxy materials is a letter to all stockholders. Thefull text of the letter from D. James Guzy, Independent Chairman ofthe PLX Technology Board of Directors, and David Raun, President,Chief Executive Officer and Director, is below:VOTE "FOR" ALL OF THE PLX TECHNOLOGY NOMINEES TO THE BOARD ON THEWHITE PROXY CARD TODAYNovember 13, 2013Dear Stockholder:We are writing to you today regarding PLX Technology's upcomingAnnual Meeting of Stockholders, which will be held on December 18,2013. At this meeting, you will be asked to make an importantdecision regarding the composition of the Board of Directors and, byextension, the future of PLX Technology. As you may be aware, PotomacCapital Partners II, L.P. ("Potomac Capital"), which has been a PLXTechnology stockholder for roughly one year, is seeking to replacethree members of your Board of Directors with three of their ownnominees. We question whether their nominees, if elected, would placePotomac Capital's interests ahead of the interests of all PLXTechnology stockholders.We are always open to listening to the views of our stockholders andengaging in a meaningful, constructive dialogue. Over the lastseveral months, we have met with Potomac Capital numerous times todiscuss their suggestions as described in the proxy. Despite our bestefforts, including our offer to replace two of our existing Boardmembers with two of their nominees, Potomac Capital has beenunwilling to agree to a reasonable settlement and now insists onrunning a costly proxy contest at the expense of all PLX Technologystockholders.Potomac Capital has consistently expressed its desire to have theCompany sold immediately. Recent history shows that we are not at allopposed to a sale of the Company -- in April 2012, your Boardapproved a definitive agreement for the combination of PLX Technologywith Integrated Device Technology, Inc. ("IDTI"). Unfortunately forall of us, this transaction was ultimately blocked by the FederalTrade Commission. Contrary to statements by Potomac Capital, yourBoard and management team have been and remain committed to exploringways to maximize value for all PLX Technology stockholders, includingthrough a sale of the Company.Mindful of the need to continue to enhance stockholder value, theBoard and management team has executed multiple steps over the lastyear to produce the most profitable first nine months of any year inthe Company's history. We believe it is in stockholders' bestinterest to maintain the current Board that is familiar with theCompany's markets, products, employees, customers and strategy so wecan continue to execute without disruption. This is a critical pointin the execution of the Company's strategy and potential instabilityat any level would be counterproductive.This is not the time to make changes at the board level or to thestrategic direction of the Company -- we are executing well, and weare confident we will achieve our milestones in a reasonabletimeframe. To introduce a contingent on the Board whose primary focusappears to be to sell the Company, demonstrating a lack ofunderstanding of the strategy being effectively implemented togenerate shareholder value, would be, in our belief, a mistake.We believe your existing Board is better experienced and equipped tomaximize stockholder value than any of the Potomac Capital nominees.Therefore, to protect the value of your investment in PLX Technology,your Board unanimously recommends that stockholders vote on theenclosed WHITE proxy card "FOR" all of your Board's director nominees-- D. James Guzy, John H. Hart, David Raun, Thomas Riordan, MichaelJ. Salameh, Ralph Schmitt, Robert H. Smith and Patrick Verderico --at the 2013 Annual Meeting of Stockholders. We urge you to discardany materials and gold cards you receive from Potomac Capital.Your vote is very important. We encourage you to make your voiceheard by voting online, by telephone, or by signing and dating theenclosed WHITE proxy card and returning it in the postage-paidenvelope provided.YOUR BOARD IS EXECUTING ON A STRATEGIC PLAN THAT IS DELIVERING VALUEFOR ALL STOCKHOLDERSPLX Technology has distinguished itself as a market leader, with a 70percent share and growing. The management team and Board of PLXTechnology anticipated and drove the market for PCI Express ("PCIe")switches over a period of many years through careful consideration ofindustry trends, long term planning and investment, and superiorexecution. We were first to market with innovative products in thePCIe switching market, and we have continually outperformed numerouscompetitors to emerge as the clear leader.In the face of recent challenges, including the economic recessionand the temporary disruption of the terminated combination with IDTI,your Board and management team have delivered three consecutiveprofitable quarters in 2013 and the highest year-to-date profits inthe Company's 27-year history. This has been achieved by focusing andexpanding the Company's market position in PCIe, and by significantlyreducing operating expenses, while increasing stockholder equity byalmost 20 percent in the process. Combined with record profits, PLXTechnology has paid down debt and increased our cash levels toprovide additional balance sheet strength. During this period, wehave continued to invest in our market-leading switch products whilealso expanding our addressable market with new innovative solutionsto serve PCIe Solid State Drives (SSD) and network fabrics (PLX'sExpressFabric) within the cloud and data center to provide additionalorganic growth for years to come.We believe the combination of a record design win pipe to fuel growthcombined with further leveraging of the PCIe-focused operating modelcan produce increased profitability over the coming years. While weare confident in the outlook for PCIe, its growth may not always belinear. Four years ago the design activity pipeline, which createsfuture growth as programs go into production, with the previous PCIeGen2 technology, resulted in PCIe revenues more than doubling from2009 to 2012. Today, our overall design activity pipeline is greaterthan three times the size it was in 2009, but now with Gen3 drivingthe activity. Therefore, we believe this puts PLX Technology in anexcellent position to see similar or better results over the nextthree years as our design pipeline goes to production serving thisgrowing market.Your Board and management team are focused on execution andoptimization, as well as market-leading product design. PLXTechnology is gaining greater market share, expanding our businessand achieving growth through a robust pipeline and portfolio:-- Year to date, PCIe has experienced record revenues as well as design wins and PCIe now comprises more than 70 percent of the Company's revenue. Innovative products, an improving competitive landscape and our blue-chip customer base continue to drive our market share up. PCIe Gen3 customer design wins in 2012 and 2013 include every one of the top enterprise server, storage and networking companies around the world, including Cisco, Dell, EMC, NetApp, HP, IBM, Huawei, Fujitsu, Juniper, Intel and Brocade.-- The Company expects to close the year with 18 PCIe Gen3 switch products in production. Only one other supplier is known to have three devices, thus positioning us more attractively to a broader customer base with diverse requirements. PLX is not aware of losing a single significant design over the past six months.-- The Company's objective is to quadruple the size of the addressable market by 2017 by focused product innovation and leveraging internal skills rather than expansion by acquisition. The team is doing this by driving higher attach rates in current market segments and taking advantage of emerging growth opportunities like PCIe solid state disks (SSD). The ExpressFabric program opens up an entirely new, large addressable market as a fabric outside the box with silicon and system level products. This solution offers the lowest power and cost at a very high performance level. All of these products serve the growing demand for equipment within the cloud and data center to handle the ever-increasing traffic and storage needs of the connected world.Through the continued execution of our operational and strategicinitiatives, the Company is delivering solid and improvingperformance.YOUR BOARD'S DIRECTOR NOMINEES ARE INDEPENDENT AND HAVE THE RIGHTEXPERTISE TO MAXIMIZE VALUE FOR ALL PLX TECHNOLOGY STOCKHOLDERSYour directors are proven business leaders who possess deep knowledgeof PLX Technology and its end markets. Importantly, your Board hasproven itself to be flexible, adaptable and experienced at capturinggrowth through new technology waves. Your Board has the experience,qualifications and independence necessary to provide effectiveoversight and direction to the Company. It has a proven track recordat PLX Technology, including oversight of PCIe's growth into a marketleading position at a compounded annual growth rate greater than 25percent from 2006 to 2012, outperforming every competitor that hasentered the space, including IDT, NEC, Pericom, Tundra, TexasInstruments, and others.In short, your Board has demonstrated that it has the skillsnecessary to guide PLX Technology to identify and create new majormarket opportunities, continue to be nimble and position the Companyfor continued success as the environment in which we operate evolves.We strongly believe the leadership and continuity of your Board iscritical to the success of PLX Technology's ongoing delivery ofprofitable growth and stockholder value.YOUR BOARD HAS BEEN REASONABLE AND OPEN TO A RESOLUTION WITH POTOMACCAPITALYour Board values the input of Potomac Capital, as we do that of allof our stockholders, and has made repeated attempts to avoid a costlyand disruptive proxy contest at the upcoming Annual Meeting. YourBoard engaged with Potomac Capital on numerous occasions with a goalof reaching a constructive resolution in the best interest of allstockholders, but to no avail.In a sign of further good faith, your Board offered to add three newnominees to the Board, including two nominees of Potomac Capital anda third nominee to be mutually agreed upon. In addition, your Boardoffered to have two existing members not stand for re-election at the2013 Annual Meeting, which would have resulted in a nine memberBoard. Putting it into context, Potomac Capital was offered directcontrol of more than 20 percent of the Board, far exceeding itsownership of approximately 10 percent of the Company's outstandingshares. In exchange, your Board requested that Potomac Capital agreeto customary standstill restrictions. Potomac Capital rejected yourBoard's reasonable settlement offer and, to date, continues to beunwilling to work constructively with your Board to reach a mutuallyagreeable resolution.Despite your Board's best efforts to resolve this matter, we believethat Potomac Capital remains solely interested in pursuing a proxycontest to promote its own interest with apparent disregard of otherstockholders. In its most recent response to our settlement proposal,Potomac Capital was unreasonable in insisting on significantstandstill carve-outs that would allow it to, among other things,interfere with value-maximizing transactions approved by your Board,conditions that could inhibit the Company from maximizing value forstockholders. Additionally, Potomac Capital insisted that it nowwants three current members of your Board not to stand forre-election, with Potomac Capital determining who those threedirectors would be - a provision that would enable Potomac Capital toforce off the three Board members who it believes are most likely toimpede its self-serving plans. Potomac Capital also requested broadobserver rights to participate in your Board's meetings prior to the2013 Annual Meeting but did not indicate it was revising its previousopposition to executing a non-disclosure agreement with us - anabsurd and unworkable scenario that would impede our ability toengage openly and have productive Board meetings.Your Board believes Potomac Capital's actions demonstrate that it isonly interested in its self-serving agenda at any cost to the Companyand irrespective of the cost to all other PLX Technologystockholders.PROTECT YOUR INVESTMENT - VOTE THE WHITE PROXY CARD TODAYWe urge stockholders to support the election of your Board's eighthighly qualified director nominees. Your Board unanimously recommendsthat stockholders vote "FOR" the Company's eight experienced andhighly qualified director nominees: D. James Guzy, John H. Hart,David Raun, Thomas Riordan, Michael J. Salameh, Ralph Schmitt, RobertH. Smith and Patrick Verderico.Whether or not you plan to attend the Annual Meeting and no matterhow many or how few shares of PLX Technology you own, we urge you toprotect your investment in the Company by voting the WHITE proxy cardtoday. You can vote today by telephone, by Internet, or by signingand dating the enclosed WHITE proxy card and returning it in thepostage-paid envelope provided. Please do not return or otherwisevote any proxy card sent to you by Potomac Capital.On behalf of your Board of Directors, we thank you for your continuedsupport. Sincerely,/D. James Guzy/ D. James Guzy Independent Chairman of the Boardof Directors/David Raun/ David Raun President, Chief Executive Officer andDirector