- Additional Proxy Soliciting Materials - Non-Management (definitive) (DFAN14A)
March 06 2009 - 4:31PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No. )
Filed by
the Registrant
¨
Filed by
a Party other than the Registrant
x
Check the
appropriate box:
o
Preliminary
Proxy Statement
¨
Confidential,
for Use of the Commission Only (as permitted by Rule14a-6(e)(2))
¨
Definitive
Proxy Statement
¨
Definitive
Additional Materials
x
Soliciting
Material Under Rule 14a-12
CALIFORNIA
MICRO DEVICES
CORPORATION
|
(Name
of Registrant as Specified in Its Charter)
|
|
DIALECTIC
CAPITAL MANAGEMENT, LLC
DIALECTIC
CAPITAL PARTNERS, LP
DIALECTIC
OFFSHORE, LTD.
DIALECTIC
ANTITHESIS PARTNERS, LP
DIALECTIC
ANTITHESIS OFFSHORE, LTD.
JOHN
FICHTHORN
LUKE
FICHTHORN
BRYANT
RILEY
J.
MICHAEL GULLARD
KENNETH
POTASHNER
|
(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
|
Payment
of Filing Fee (Check the appropriate box):
x
No
fee required.
¨
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title
of each class of securities to which transaction applies:
(2) Aggregate
number of securities to which transaction applies:
|
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was
determined):
|
(4) Proposed
maximum aggregate value of transaction:
(5) Total
fee paid:
¨
Fee
paid previously with preliminary materials:
¨
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount
previously paid:
(2) Form,
Schedule or Registration Statement No.:
(3) Filing
Party:
(4) Date
Filed:
Dialectic Capital Partners, LP
(“Dialectic”), together with the other participants named herein, is filing
materials contained in this Schedule 14A with the Securities and Exchange
Commission (the “SEC”) in connection with the solicitation of proxies for the
election of four nominees as directors at the 2009 annual meeting of
stockholders of California Micro Devices Corporation (the “Annual
Meeting”). Dialectic has not yet filed a proxy statement with the SEC
with regard to the Annual Meeting.
Item 1: On March 6, 2009,
Dialectic issued the following press release:
FOR IMMEDIATE RELEASE
DIALECTIC
CAPITAL PARTNERS, LP DISCLOSES NOMINATION OF FOUR HIGHLY QUALIFIED DIRECTOR
CANDIDATES FOR ELECTION TO THE CALIFORNIA MICRO DEVICES CORPORATION BOARD OF
DIRECTORS AT THE 2009 ANNUAL MEETING
NEW YORK, N.Y., March 6,
2009 –
Dialectic Capital Partners, LP (“Dialectic”), an affiliate of
Dialectic Capital Management, LLC (“Dialectic Capital”), announced today that it
has nominated four highly qualified director nominees for election to the Board
of Directors (the “Board”) of California Micro Devices Corporation (the
“Company” or “CMD”) (Nasdaq: CAMD) to replace four directors whose terms are up
for election at the Company’s 2009 Annual Meeting of Stockholders (the “Annual
Meeting”). Dialectic Capital, which, together with the nominees,
beneficially owns an aggregate of 2,006,000 shares, or approximately 8.5% of the
outstanding shares of common stock of the Company, delivered written notice,
dated March 4, 2009, of its nomination to the Corporate Secretary of the Company
in accordance with the Company’s bylaws.
After
Dialectic’s repeated attempts to engage in a constructive dialogue were ignored
by the incumbent Board, Dialectic has come to the conclusion that the nomination
of an alternative slate of directors is the only viable option left to maximize
stockholder value, which Dialectic believes has suffered significant
deterioration at the hands of the current Board. Consistent with
views previously communicated by Dialectic representatives in various public
forums, Dialectic believes that the Board lacks in accountability to its
stockholders and that management’s incentives are not aligned with stockholders’
interests. Furthermore, Dialectic believes that the Company’s
operational and capital allocation strategies are misguided, and that the
Company cannot afford to consummate another risky acquisition while supporting a
business that has never consistently earned an acceptable return on
capital.
Dialectic’s
nominees, consistent with their fiduciary duties, are committed to enhancing
long-term stockholder value while returning excess capital to stockholders after
thoroughly reviewing CMD’s strategic alternatives, including the potential sale
of the protection and silicon businesses. Importantly, Dialectic’s
nominees recognize the challenges of the current M&A market and will not
settle for depressed valuations for the sake of realizing an immediate liquidity
event. Instead, Dialectic’s nominees are prepared to work cohesively
with management until such time that a transaction is determined to be in the
best interests of all stockholders.
John
Fichthorn, Dialectic’s managing member, stated, “We have assembled a highly
qualified slate of directors that will return a sense of accountability to the
boardroom as well as provide a fresh perspective on the Company’s
operations. Each director will bring proven financial and operational
expertise necessary to realign CMD’s cost structure, review capital allocation
opportunities, oversee management’s execution and objectively review all
strategic alternatives.” Fichthorn continued, “Dialectic has been a
5% holder since September 2007. Having watched CMD’s enterprise value
fall below zero without the Board taking decisive action to improve shareholder
value, we believe that an immediate change in leadership is
warranted.”
Historical
shortcomings that Dialectic believes are directly attributable to the incumbent
Board include:
·
|
Misaligned
incentives
: The aggregate stock ownership of the Board amounts to
77,000 shares, or 0.33% of CMD’s shares outstanding, and marks-to-market
at a mere $143,000. As a group, the insiders’ economic exposure
to CMD’s equity is concentrated in nearly 1,800,000 underwater stock
options, which Dialectic believes encourages the pursuit of
high-risk/high-reward strategies while exposing management to almost no
downside. Dialectic further believes that this asymmetry
explains, to a large degree, why insiders have not purchased any
meaningful amount of stock in the Company in years and why management is
so focused on consummating a deal.
|
·
|
Entrenched
Board
: Dialectic believes that the Board has taken a
series of steps to entrench itself by, for example, depriving stockholders
of their ability to call special meetings and implementing a poison
pill.
|
·
|
Systematic
capital misallocation
: Dialectic believes that the
incumbent Board has a questionable track record of allocating capital for
the benefit of stockholders. For instance, the acquisition of
Arques proved disastrous as measured by the operating losses of that
business, the goodwill write-offs taken by the Company and the speed with
which management opted to divest that business. Additionally,
the Board’s reluctance to undertake a meaningful share repurchase program
in spite of CMD’s dismal valuation suggests a lack of appreciation for
simple value creation mechanisms.
|
·
|
Financial
underperformance
: By most measures, CMD has lagged its
peers in terms of revenue growth and profitability. Excluding a
brief period of profitability in 2004-2006, which Dialectic believes was
primarily related to technology introduced prior to 2001, the return on
stockholder capital has been
unacceptable.
|
Stockholders
can refer to Dialectic’s previous SEC filings for additional
information.
The
Company currently has a total of six directors. Dialectic is seeking
to replace four incumbent directors whose terms of office expire at the Annual
Meeting.
Dialectic’s
four independent director nominees will bring substantial business leadership
and corporate governance expertise to the Company’s Board. The
nominees are:
·
|
John
Fichthorn. Mr. Fichthorn is a co-founder of Dialectic Capital,
an investment management firm, and has been a portfolio manager there
since 2003. From 2000 to 2003, he was employed by Maverick
Capital, most recently as Managing Director of the technology
group. From 1999 to 2000, he was an analyst at Alliance Capital
working as a dedicated short-seller across multiple hedge fund products
and as a member of the technology team. From 1997 to 1999, he
was analyst at Quilcap Corporation, a short biased hedge fund where he
covered all sectors, with a focus on technology. From 1995 to
1997, Mr. Fichthorn worked at Ganek & Orwicz Partners where his
responsibilities included small cap research, international closed-end
fund arbitrage and operations. After graduating from college,
he briefly worked at Aviation Week and Space Technology. Mr.
Fichthorn holds a B.A. in Astronomy from the University of North Carolina
at Chapel Hill.
|
·
|
Bryant
Riley. Mr. Riley is the Managing Member and founder of Riley
Investment Management LLC and founder and Chairman of B. Riley & Co.,
LLC, a Southern California-based brokerage and investment banking firm
providing research and trading ideas primarily to institutional investors
since 1997. Riley Investment Management LLC is an investment
adviser, which provides investment management services, and is the general
partner of Riley Investment Partners Master Fund, L.P. Mr.
Riley also serves on the Board of Directors of the following public
companies: Aldila, Inc., Alliance Semiconductor Corporation, DDi Corp.,
lcc International, Silicon Storage Technology, Inc. and Trans World
Entertainment Corporation. Mr. Riley holds a B.S. in Finance
from Lehigh University.
|
·
|
J.
Michael Gullard. Mr. Gullard is a General Partner at
Cornerstone Management, Inc., a professional turn-around and restructuring
firm. He joined the firm in 1984. Mr. Gullard has 35 years of
financial, general management and venture capital experience in the
technology industry. He was the Chief Executive Officer and the
Chief Financial Officer at Telecommunications Technology, Inc. from 1979
to 1984. Previously, Mr. Gullard held a variety of senior
financial and operational management positions at Intel Corporation from
1972 to 1979. Mr. Gullard also serves on the Board of Directors
of the following public companies: Alliance Semiconductor Corporation, JDA
Software Group Inc., Planar Systems Inc. and Proxim Wireless
Corporation. Mr. Gullard is also the Non-Executive Chairman of
the Board at DynTek, Inc. Mr. Gullard holds a B.A. degree in
Economics from Stanford University and an M.B.A from the Stanford
University’s Graduate School of
Business.
|
·
|
Kenneth
Potashner. Mr. Potashner has served as Chairman of the Board of
Newport Corporation, a leading global supplier of advanced-technology
products and systems, since September 2007 and as member of its Board of
Directors since 1998. Since May 2003, Mr. Potashner has been an
independent investor. From 1996 to May 2003, he was Chairman of
the Board of Directors of Maxwell Technologies, Inc., a manufacturer of
ultracapacitors, microelectronics, power systems and high voltage
capacitors. He also served as President and Chief Executive
Officer of Maxwell Technologies from 1996 to October 1998. From
November 1998 to August 2002, Mr. Potashner was President, Chief Executive
Officer and Chairman of SONICblue Incorporated (formerly S3 Incorporated),
a supplier of digital media appliances and services. Mr. Potashner was
Executive Vice President and General Manager of Disk Drive Operations for
Conner Peripherals, a manufacturer of storage systems, from 1994 to
1996. From 1991 to 1994, he was Vice President of Worldwide
Product Engineering for Quantum Corporation, a manufacturer of disk
drives. From 1981 to 1991, he held various engineering
management positions with Digital Equipment Corporation, a manufacturer of
computers and peripherals, culminating with the position of Vice President
of Worldwide Product Engineering in 1991. Mr. Potashner also
serves on the Board of Directors of Applied Solar,
Inc. Mr. Potashner holds a B.S.E.E. from Lafayette
College and an M.S.E.E. from Southern Methodist
University.
|
CERTAIN
INFORMATION CONCERNING PARTICIPANTS
Dialectic
Capital Partners, LP (“Dialectic”), together with the other participants named
below, intends to make a preliminary filing with the Securities and Exchange
Commission (“SEC”) of a proxy statement and an accompanying GOLD proxy card to
be used to solicit votes for the election of its slate of nominees at the 2009
Annual Meeting of Stockholders of California Micro Devices Corporation (the
“Company”).
DIALECTIC
STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PRELIMINARY PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PRELIMINARY
PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.
The
participants in the proxy solicitation are Dialectic, Dialectic Capital
Management, LLC (“DCM”), Dialectic Offshore, Ltd. (“DOF”), Dialectic Antithesis
Partners, LP (“DAP”), Dialectic Antithesis Offshore, Ltd. (“DAO”), John
Fichthorn, Luke Fichthorn, Bryant Riley, J. Michael Gullard and Kenneth
Potashner (the “Group”). As of March 6, 2009, (i) DCM beneficially
owned 2,006,000 shares of common stock of the Company (the “Shares”),
constituting approximately 8.5% of the Shares outstanding, (ii) Dialectic
beneficially owned 317,715 Shares, constituting approximately 1.3% of the Shares
outstanding, (iii) DOF beneficially owned 186,221 Shares, constituting
approximately 0.8% of the Shares outstanding, (iv) DAP beneficially owned
575,619 Shares, constituting approximately 2.4% of the Shares outstanding, (v)
DAO beneficially owned 926,445 Shares, constituting approximately 3.9% of the
Shares outstanding, (vi) John Fichthorn beneficially owned 2,006,000 Shares,
constituting approximately 8.5% of the Shares outstanding, (vii) Luke Fichthorn
beneficially owned 2,006,000 Shares, constituting approximately 8.5% of the
Shares outstanding, (viii) Bryant Riley beneficially owned 14,198 Shares,
constituting approximately 0.1% of the Shares outstanding, and (ix) J. Michael
Gullard and Kenneth Potashner did not directly own any Shares. DCM is
the investment manager of Dialectic, DOF, DAP and DAO and has shared power to
vote or direct the vote and shared power to dispose or direct the disposition of
the Shares held by such entities. John Fichthorn and Luke Fichthorn
act as the managing members of DCM and, as a result, each of John Fichthorn and
Luke Fichthorn may be deemed to control such entity and to have a beneficial
interest in the Shares beneficially owned by DCM. However, each
member of the Group, as members of a “group” for the purposes of Rule
13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to
beneficially own the Shares owned in the aggregate by the other members of the
Group. Each member of the Group disclaims beneficial ownership of the
Shares he/it does not directly own.
Contact
:
Salomon
Kamalodine
B. Riley
& Co., LLC
(310)
966-1444
California Micro Devices Corp. (MM) (NASDAQ:CAMD)
Historical Stock Chart
From Jun 2024 to Jul 2024
California Micro Devices Corp. (MM) (NASDAQ:CAMD)
Historical Stock Chart
From Jul 2023 to Jul 2024