PRELIMINARY
COPY SUBJECT TO
COMPLETION
DIALECTIC
CAPITAL MANAGEMENT, LLC
___________,
2009
Dear
Fellow Stockholder:
Dialectic Capital
Management, LLC (“DCM”) and the other participants in this solicitation
(collectively, the “Dialectic Group” or “we”) are the beneficial owners of an
aggregate of 2,025,011 shares of common stock of California Micro Devices
Corporation (“CMD” or the “Company”), representing approximately 8.8% of the
outstanding shares of common stock of the Company. For the reasons
set forth in the attached Proxy Statement, the Dialectic Group believes that the
Board of Directors of the Company is not acting in the best interests of its
stockholders. The Dialectic Group is therefore seeking your support
at the annual meeting of stockholders scheduled to be held on Thursday,
September 17, 2009 at 2:00 p.m., at the McCarthy Conference Center, 690 North
McCarthy Boulevard, Milpitas, California, including any adjournments or
postponements thereof and any meeting which may be called in lieu thereof (the
“Annual Meeting”), for the following:
|
1.
|
To
elect the Dialectic Group’s slate of three (3) director nominees to the
Company’s Board of Directors in opposition to the Company’s incumbent
directors;
|
|
2.
|
To
ratify the selection of Grant Thornton LLP as the Company’s independent
registered public accountants for the fiscal year ending March 31, 2010;
and
|
|
3.
|
To
amend the 1995 Employee Stock Purchase Plan to increase the total number
of shares reserved for issuance thereunder by 200,000 shares from
1,940,000 shares to 2,140,000
shares.
|
We are
not seeking control of the Board of Directors. Through the attached
Proxy Statement, we are soliciting proxies to elect not only our three (3)
director nominees, but also the candidates who have been nominated by CMD other
than __________, __________ and ___________. This gives stockholders
the ability to vote for the total number of directors (seven (7)) up for
election at the Annual Meeting. The names, backgrounds and
qualifications of CMD’s nominees, and other information about them, can be found
in the Company’s proxy statement. There is no assurance that any of
CMD’s nominees will serve as directors if our nominees are elected.
The
Dialectic Group urges you to carefully consider the information contained in the
attached Proxy Statement and then support its efforts by signing, dating and
returning the enclosed
GOLD
proxy card
today.
If you
have already voted a proxy card furnished by the Company’s management, you have
every right to change your vote by signing, dating and returning a later dated
proxy.
If you
have any questions or require any assistance with your vote, please contact
Okapi Partners, the firm which is assisting us in this solicitation, at its
address and toll-free number listed on the following page.
Thank you
for your support,
John
Fichthorn
Dialectic
Capital Management, LLC
|
If
you have any questions, require assistance in voting your
GOLD
proxy
card,
or
need additional copies of the Dialectic Group’s proxy
materials,
please
call Okapi Partners at the phone numbers listed below.
Okapi
Partners
780
Third Avenue, 30
th
Floor
New
York, NY 10017
Stockholders
Call Toll-Free at: (877) 285-5990
Banks
and Brokers Call Collect at: (212) 297-0720
info@okapipartners.com
|
|
2009
ANNUAL MEETING OF STOCKHOLDERS
OF
CALIFORNIA
MICRO DEVICES CORPORATION
_________________________
PROXY
STATEMENT
OF
DIALECTIC
CAPITAL MANAGEMENT, LLC
_________________________
PLEASE
SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
Dialectic Capital
Management, LLC, a Delaware limited liability company (“DCM”), Dialectic Capital
Partners, LP, a Delaware limited partnership (“DCP”), Dialectic Offshore, Ltd.,
a Cayman Islands exempted company (“DOF”), Dialectic Antithesis Partners, LP, a
Delaware limited partnership (“DAP”), Dialectic Antithesis Offshore, Ltd., a
Cayman Islands exempted company (“DAO” and, together with DCM, DCP, DOF and DAP,
“Dialectic”), John Fichthorn, Luke Fichthorn, J. Michael Gullard (“Mr.
Gullard”), Kenneth Potashner (“Mr. Potashner”) and Bryant Riley (“Mr. Riley”)
(collectively, the “Dialectic Group”) are significant stockholders of California
Micro Devices Corporation, a Delaware corporation (“CMD” or the
“Company”). The members of the Dialectic Group are participants in
this solicitation. The Dialectic Group believes that the Board of
Directors of the Company (the “Board”) is not acting in the best interests of
its stockholders. The Dialectic Group is therefore seeking your
support at the annual meeting of stockholders scheduled to be held on Thursday,
September 17, 2009 at 2:00 p.m., at the McCarthy Conference Center, 690 North
McCarthy Boulevard, Milpitas, California, including any adjournments or
postponements thereof and any meeting which may be called in lieu thereof (the
“Annual Meeting”), for the following:
|
1.
|
To
elect the Dialectic Group’s director nominees, John Fichthorn, J. Michael
Gullard and Kenneth Potashner (the “Dialectic Nominees”), to serve as
directors until the 2010 annual meeting of stockholders and until their
respective successors shall have been elected and qualified, in opposition
to the Company’s incumbent directors whose terms expire at the Annual
Meeting;
|
|
2.
|
To
ratify the selection of Grant Thornton LLP as the Company’s independent
registered public accountants for the fiscal year ending March 31,
2010;
|
|
3.
|
To
amend the 1995 Employee Stock Purchase Plan to increase the total number
of shares reserved for issuance thereunder by 200,000 shares from
1,940,000 shares to 2,140,000
shares.
|
This
Proxy Statement is soliciting proxies to elect not only the three (3) Dialectic
Nominees, but also the candidates who have been nominated by the Company other
than _________, __________ and __________. This gives stockholders
who wish to vote for the Dialectic Nominees the ability to vote for seven (7)
nominees in total.
As of the
date of this Proxy Statement, the members of the Dialectic Group were the
beneficial owners of an aggregate of 2,025,011 shares of common stock of the
Company, par value $0.001 per share (the “Shares”), which currently represent
approximately 8.8% of the issued and outstanding Shares, all of which are
entitled to be voted at the Annual Meeting.
CMD
has set the record date for determining stockholders entitled to notice of and
to vote at the Annual Meeting as July 20, 2009 (the “Record
Date”). The mailing address of the principal executive offices of CMD
is 490 N. McCarthy Boulevard, #100, Milpitas, California
95035. Stockholders of record at the close of business on the Record
Date will be entitled to vote at the Annual Meeting. According to
CMD, as of the Record Date, there were 22,917,914 Shares outstanding and
entitled to vote at the Annual Meeting. The participants in this
solicitation intend to vote all of their Shares (i) FOR the election of the
Dialectic Nominees and the candidates who have been nominated by the Company
other than ___________, __________ and ___________, (ii) FOR the ratification of
Grant Thornton LLP as the Company’s independent registered public accountants
for the fiscal year ending March 31, 2010 and (iii) FOR the amendment of the
1995 Employee Stock Purchase Plan to increase the total number of Shares
reserved for issuance thereunder by 200,000 Shares.
This
proxy statement (this “Proxy Statement”) and the enclosed
GOLD
proxy card are first
being furnished to stockholders on or about _____, 2009.
THIS
SOLICITATION IS BEING MADE BY THE DIALECTIC GROUP AND NOT ON BEHALF OF THE BOARD
OF DIRECTORS OR MANAGEMENT OF THE COMPANY. THE DIALECTIC GROUP IS NOT
AWARE OF ANY OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL
MEETING. SHOULD OTHER MATTERS, WHICH THE DIALECTIC GROUP IS NOT AWARE
OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE ANNUAL
MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED
GOLD
PROXY CARD WILL VOTE ON
SUCH MATTERS IN THEIR DISCRETION.
THE
DIALECTIC GROUP URGES YOU TO SIGN, DATE AND RETURN THE
GOLD
PROXY CARD IN FAVOR OF
THE ELECTION OF THE DIALECTIC NOMINEES.
IF YOU
HAVE ALREADY SENT A PROXY CARD FURNISHED BY CMD MANAGEMENT TO THE COMPANY, YOU
MAY REVOKE THAT PROXY AND VOTE FOR THE ELECTION OF THE DIALECTIC NOMINEES AND
THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY OTHER THAN __________,
__________ AND ______________ BY SIGNING, DATING AND RETURNING THE ENCLOSED
GOLD
PROXY
CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT
COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL
MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR
THE ANNUAL MEETING TO THE DIALECTIC GROUP, C/O OKAPI PARTNERS, THE FIRM WHICH IS
ASSISTING IN THIS SOLICITATION, OR TO THE SECRETARY OF CMD, OR BY VOTING IN
PERSON AT THE ANNUAL MEETING.
IMPORTANT
NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS
FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
SEPTEMBER 17,
2009
The
proxy materials are available at
http://www.myproxyonline.com/okapimaterials.
IMPORTANT
Your vote
is important, no matter how few Shares you own. The Dialectic Group
urges you to sign, date and return the enclosed
GOLD
proxy card today to vote
FOR the election of the Dialectic Nominees.
|
·
|
If
your Shares are registered in your own name, please sign and date the
enclosed
GOLD
proxy card and return
it to the Dialectic Group, c/o Okapi Partners, in the enclosed envelope
today.
|
|
·
|
If
your Shares are held in a brokerage account or bank, you are considered
the beneficial owner of the Shares, and these proxy materials, together
with a
GOLD
voting form, are being
forwarded to you by your broker or bank. As a beneficial owner,
you must instruct your broker, trustee or other representative how to
vote. Your broker cannot vote your Shares on your behalf
without your instructions.
|
|
·
|
Depending
upon your broker or custodian, you may be able to vote either by toll-free
telephone or by the Internet. Please refer to the enclosed
voting form for instructions on how to vote electronically. You
may also vote by signing, dating and returning the enclosed voting
form.
|
Since
only your latest dated proxy card will count, we urge you not to return any
proxy card you receive from the Company. Even if you return the
Company’s proxy card marked “withhold” as a protest against the incumbent
directors, it will revoke any proxy card you may have previously sent to the
Dialectic Group. Remember, you can vote for our three (3) nominees
only on our
GOLD
proxy
card. So please make certain that the latest dated proxy card you
return is the
GOLD
proxy
card.
If you
have any questions regarding your proxy,
or need
assistance in voting your Shares, please call:
Okapi
Partners
780
Third Avenue, 30th Floor
New
York, NY 10017
Stockholders Call Toll-Free at:
(
877
)
285-5990
Banks
and Brokers Call Collect at: (212) 297-0720
info@okapipartners.com
BACKGROUND
OF THE SOLICITATION
The
following is a chronology of events leading up to this proxy
solicitation:
|
·
|
Dialectic
commenced accumulating Shares in 2006. By December 22, 2008,
Dialectic had acquired an aggregate of 2,006,000
Shares.
|
|
·
|
From
time to time, representatives of Dialectic engaged in conversations with
representatives of the Company’s management regarding the Company’s
business, financial condition and prospects. Dialectic also has
participated in the Company’s earnings conference calls since the
Company’s fiscal 2008 third quarter call held on January 22,
2008. Representatives of Dialectic frequently asked questions
on these calls.
|
|
·
|
On
December 31, 2008, DCM sent a letter to the Board expressing its concern
over the Company’s strategic direction and financial results, the
composition and tenure of the Board and the compensation awarded to
members of management and the Board. In its letter, DCM
recommended that the Company return $33 million, or $1.42 a share, in a
dividend to all stockholders and engage an investment bank and begin a
sale process of the Company to a larger acquirer with a more diverse
product line.
|
|
·
|
On
January 5, 2009, Wade F. Meyercord, the Chairman of the Board of the
Company, responded to DCM’s December 31, 2008 letter, stating that the
Board favored retaining CMD’s cash, rather than returning cash to
stockholders, and did not believe it was advisable to explore a sale of
the Company at that time.
|
|
·
|
In
January 2009, at the Needham & Company Growth Conference,
representatives of Dialectic were scheduled to meet with representatives
of the Company. The night before the scheduled meeting, the
meeting was cancelled without explanation to Dialectic, and was
rescheduled only after representatives of Dialectic contacted
Needham.
|
|
·
|
In
early February 2009, a representative of DCM’s advisor, B. Riley &
Co., LLC (“B. Riley”), exchanged e-mails with Mr. Meyercord in an attempt
to arrange a meeting with representatives of the Company to address
Dialectic’s concerns regarding the Company. Mr. Meyercord
referred B. Riley’s representative to Robert V. Dickinson, the Chief
Executive Officer of the Company, who Mr. Meyercord stated was the focal
point to address stockholder concerns.
|
|
·
|
On
February 3, 2009, DCM sent a letter to the Board in which DCM expressed
serious doubts as to the Company’s ability to successfully pursue an
acquisition strategy in view of the Company’s acquisition of Arques
Technology, among other things. The letter also questioned the
Board’s decision to eliminate stockholders’ right to call special meetings
and the ability of the Board and management to properly allocate
capital.
|
|
·
|
On
February 6, 2009, Mr. Meyercord sent a letter to DCM acknowledging receipt
of DCM’s February 3, 2009 letter and advising DCM that the Board had
considered its contents. The letter also stated that the
Company had been contacted by representatives of B. Riley to arrange a
meeting, but that the Company did not intend to meet with
them.
|
|
·
|
On
February 9, 2009, management of the Company participated in a video
conference attended by representatives of Kaufman Bros. and
Dialectic. Representatives of Kaufman Bros. asked questions
focused primarily on the Company’s industry and customers. When
a representative of Dialectic attempted to ask Company-specific questions,
he was informed that his questions would not be
accepted.
|
|
·
|
On
February 25, 2009, representatives of the Company were in New York to hold
a series of meetings with investors. Dialectic was not invited
to participate in any of these
meetings.
|
|
·
|
On
March 4, 2009, as updated on March 11, 2009, in accordance with the
Company’s bylaws, DCP delivered to the Company its notice of intention to
nominate candidates for election to the Board at the Annual
Meeting.
|
|
·
|
On
March 6, 2009, DCP issued a press release announcing its nomination of
highly qualified director nominees for election to the
Board.
|
|
·
|
On
May 14, 2009, counsel for the Company contacted counsel for the Dialectic
Group and requested to arrange for the interview of the Dialectic Group’s
nominees by the Company’s Nominating and Corporate Governance Committee
(the “Nominating Committee”). On May 18, 2009, counsel for the
Dialectic Group informed the Company’s counsel that the Dialectic Group
was willing to make its nominees available to be interviewed provided that
the parties were able to reach agreement on the composition of the Board
assuming that the Dialectic Group’s nominees demonstrated their evident
qualifications to the Nominating Committee. The Company’s
counsel responded on the same date that the Company cannot accept this
condition and that the Nominating Committee will be unable to interview
the Dialectic Group’s nominees.
|
|
·
|
On May 19, 2009,
a representative of Dialectic met with Mr. Dickinson and Kevin J. Berry,
Chief Financial Officer of the Company, in an effort to establish an
amicable dialogue between the parties and to understand the Company’s
revenue targets. The Dialectic and management representatives
discussed the decline in the Company’s revenues and earnings, but the
management representatives would not provide a timeline for achieving the
Company’s revenue and margin goals
that
had been disclosed in its SEC
filings.
|
|
·
|
In
June 2009, representatives of the Dialectic Group reached out to Mr.
Dickinson and members of the Board in an effort to avoid an election
contest. Phone calls made by a representative of B. Riley to
members of the Board went unreturned. Mr. Meyercord, in an
e-mail to B. Riley, reiterated that Mr. Dickinson was the “single focal
point” for stockholder concerns.
|
|
·
|
On
June 15, 2009, John Fichthorn, a managing member of DCM, initiated a
telephone conversation with Mr. Dickinson in which they discussed the
composition of the Board and the parameters of a potential settlement to
avoid an election contest. Representatives of the Dialectic
Group followed up on this conversation with representatives of the Company
in an effort to facilitate a prompt, negotiated
resolution. However, representatives of the Company informed
representatives of the Dialectic Group that Mr. Dickinson was travelling
overseas and would not be able to continue discussions with Mr. Fichthorn
until his return on June 26, 2009.
|
|
·
|
Mr.
Fichthorn
requested further discussion with Mr. Dickinson prior to his return from
overseas. Accordingly, Messrs. Fichthorn and Dickinson spoke
again on June 22, 2009, but, on the advice of counsel, Mr. Dickinson
remained noncommittal as to the Company’s intentions regarding the
election of directors at the Annual
Meeting.
|
|
·
|
On
June 26, 2009, after Mr. Dickinson returned from overseas, Messrs.
Fichthorn and Dickinson had a telephone conversation in which Mr.
Dickinson informed Mr. Fichthorn that the Company had selected a new
candidate for the Board. Mr. Dickinson stated that the Company
would provide representatives of the Dialectic Group the opportunity to
meet with this proposed nominee if DCM executed a confidentiality
agreement. Mr. Fichthorn expressed his willingness to meet with
this individual in order to determine his qualifications to serve on the
Board, but also emphasized the importance and benefits of having either a
Dialectic Nominee, in particular Mr. Fichthorn, or a representative of
another 5% or greater stockholder, serve on the
Board.
|
|
·
|
On
June 30, 2009,
DCM and the Company
executed a non-disclosure agreement as a prerequisite to the Dialectic
Group’s discussions with the proposed
nominee.
|
|
·
|
On
July 1, 2009, Mr. Dickinson introduced Mr. Fichthorn, via e-mail, to Jon
Castor, the proposed nominee chosen by the Board. Mr. Fichthorn
promptly contacted Mr. Castor to arrange an interview, and again
emphasized to Mr. Dickinson his position regarding having a Dialectic
Nominee, or a representative of another 5% or greater stockholder, serve
on the Board. Mr. Dickinson replied that he would discuss Mr.
Fichthorn’s views with the Board, but that his own personal view was
contrary to Mr.
Fichthorn’s.
|
|
·
|
On
July 2, 2009, representatives of the Dialectic Group interviewed Mr.
Castor.
|
|
·
|
Effective
July 7, 2009, the Board appointed Mr. Castor as a new
director.
|
|
·
|
Between
July 2, 2009 and July 3, 2009, Messrs. Fichthorn and Dickinson exchanged
e-mails to arrange a time to discuss Mr. Fichthorn’s call with Mr. Castor
and the composition of the Board. Mr. Fichthorn asked Mr.
Dickinson if he was prepared to address Mr. Fichthorn’s position regarding
stockholder representation on the Board. Mr. Dickinson replied
that he did not have an answer for Mr. Fichthorn on that subject, but
instead wanted to speak with Mr. Fichthorn regarding his views on Mr.
Castor and explore potential alternatives with him. Mr.
Fichthorn, who had only been afforded the opportunity to speak with Mr.
Dickinson on this matter, then requested to speak with an independent
Board member. Mr. Dickinson referred Mr. Fichthorn to Mr.
Meyercord.
|
|
·
|
Between
July 6, 2009 and July 7, 2009, Messrs. Fichthorn and Meyercord spoke by
telephone and exchanged e-mails. During the course of this
correspondence:
|
|
§
|
Mr.
Meyercord indicated that the Board was not willing to include one of the
Dialectic Nominees on the Board, although, when asked by Mr. Fichthorn,
Mr. Meyercord could not articulate any downside to including a stockholder
representative on the Board. Mr. Meyercord requested that the
Dialectic Group forego an election contest at the Annual Meeting and
evaluate the Board’s performance over the next year with the addition of
Mr. Castor.
|
|
§
|
Mr.
Meyercord indicated that the Board, while not opposed to adding an eighth
director, viewed seven directors as an appropriate size, the Board
did not believe that the representation of stockholder interests was
sufficient in and of itself for service on the Board, the Board
viewed Mr. Castor’s qualifications as superior to those of the
Dialectic Nominees, and the Board would consider another individual
recommended by the Dialectic Group, but that time was running
short.
|
|
·
|
On
July 7, 2009, Messrs. Fichthorn and Dickinson spoke by
telephone. Mr. Fichthorn outlined to Mr. Dickinson the
following proposal, which was sent by e-mail from the Dialectic Group’s
counsel to the Company’s
counsel:
|
|
§
|
The
Board would redeem
CMD’s stockholder
rights plan, as called for by one of CMD’s principal
stockholders.
|
|
§
|
The
Board would amend CMD’s bylaws to permit special meetings of stockholders
to be called by stockholders holding 5% or more of the outstanding
Shares.
|
|
§
|
The
Board would expand to eight directors to include a stockholder
representative on the Board other than Mr. Fichthorn, either Mr. Gullard
or Mr. Potashner.
|
|
§
|
Mr.
Fichthorn would be given the opportunity to present at two or more Board
meetings per calendar year.
|
|
§
|
The
Dialectic Group would agree not to call a special meeting to remove and
replace directors prior to the Company’s 2010 annual meeting, but would be
able to nominate candidates for election as directors at the 2010 annual
meeting.
|
During
this phone call, Mr. Dickinson informed Mr. Fichthorn that the Company was
working on a proposal to address the Dialectic Group’s concerns regarding
stockholder representation.
|
·
|
On
July 9, 2009, counsel for the Company informed counsel for the Dialectic
Group by e-mail that the Company had been having discussions with a
significant stockholder, other than the Dialectic Group, about including a
representative of that stockholder on the Board, although unspecified
issues had been encountered that rendered this potential appointment
uncertain. Counsel for the Company inquired as to whether the
Dialectic Group would consider a nominee of another stockholder that held
fewer than 5% of the Shares. In light of this e-mail, the
Dialectic Group determined it was advisable to file its proxy
statement.
|
REASONS
FOR THE SOLICITATION
Dialectic
has made repeated attempts to engage in a constructive dialogue and negotiate in
good faith with the incumbent Board to avoid an election
contest. However, the Board has, in our opinion, not been prepared to
address our serious concerns. Accordingly, we believe that the
nomination of the Dialectic Nominees is the best option to maximize stockholder
value, which has suffered significant deterioration under the current
Board.
We
believe that the Board lacks in accountability to stockholders and that the
Board’s and management’s incentives are not properly aligned with stockholders’
interests. Furthermore, we believe that the Company’s operational and capital
allocation strategies are misguided, and that the Company cannot afford to
consummate an ill-advised acquisition while supporting a business that, in our
view, has consistently failed to earn an adequate return on
capital.
The
Dialectic Nominees, consistent with their fiduciary duties, are committed to
enhancing long-term stockholder value and to attempting to work cohesively with
the rest of the Board to ensure that stockholder interests are properly
represented.
We are concerned with the
Company’s poor operating and stock price performance under the direction of the
current Board
|
·
|
We believe
that the realities of CMD’s financial performance are drastically
different from what management has communicated to
stockholders.
In particular, while management has
emphasized a string of 16 quarters in which the Company achieved positive
operating cash flow prior to the macroeconomic shock of September 2008, a
closer inspection of the Company’s performance paints a different
picture. CMD’s highest annual return on capital has been a mere
0.3% since the Motorola business began to decline in
2006. Additionally, the importance of interest income to the
Company’s cash flow should not be underestimated—during fiscal 2007 and
2008, interest income amounted to approximately 45% of CMD’s cash flow
from operations.
|
|
·
|
CMD has
experienced a steady decline in revenues and
profitability.
The Company has experienced losses in
eight out of its last 12 most recent fiscal quarters. From
fiscal 2006 through fiscal 2009, revenues have declined each year, from
$70 million in fiscal 2006 to $49 million in fiscal 2009, and the Company
recorded a net loss of $15 million in fiscal 2009, as compared to net
income of $10 million in fiscal 2006. Consider also the
percentage of net sales represented by the Company’s gross margin,
research and development expenses and SG&A expenses in fiscal 2009, as
compared to the Company’s targets for these performance
metrics:
|
|
Fiscal 2009 (% of net
sales)
|
|
Target (% of net sales)
|
Gross
margin
|
30%
|
|
38%-40%
|
R&D
expenses
|
21%
|
|
9%-10%
|
SG&A
expenses
|
30%
|
|
15%-16%
|
We
question the ability of management, under the direction of the current Board, to
achieve these goals. The Company is concentrated in terms of product
types, markets and customers and its margins have been steadily decreasing since
the Motorola business began to decline. We believe that CMD faces an
entirely different set of competitive dynamics today and that without more
rigorous Board oversight, these targets are unlikely to be
attained.
|
·
|
In
conjunction with the Company’s poor financial performance, CMD’s stock
performance has been dismal.
While the Company has cited
the weak global economy as a factor in its poor performance, we believe
the current recession cannot come close to explaining the wide discrepancy
in performance between the Company’s stock and the major indices used by
the Company as a benchmark. Consider the following performance
graph included in the Company’s Annual Report on Form 10-K for fiscal
2009.
|
* $100
invested on March 31, 2004 in stock or index including re-investment of
dividends.
Fiscal
year ended March 31.
|
|
|
3/04
|
|
|
|
3/05
|
|
|
|
3/06
|
|
|
|
3/07
|
|
|
|
3/08
|
|
|
|
3/09
|
|
California
Micro Devices Corporation
|
|
$
|
100.00
|
|
|
$
|
37.71
|
|
|
$
|
59.07
|
|
|
$
|
34.95
|
|
|
$
|
21.96
|
|
|
$
|
18.15
|
|
NASDAQ
Composite
|
|
|
100.00
|
|
|
|
100.25
|
|
|
|
117.33
|
|
|
|
121.43
|
|
|
|
114.29
|
|
|
|
76.65
|
|
S&P
500
|
|
$
|
100.00
|
|
|
$
|
104.83
|
|
|
$
|
114.97
|
|
|
$
|
126.16
|
|
|
$
|
117.45
|
|
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$
|
70.85
|
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The
stock price performance included in this graph is not necessarily indicative of
future stock price performance.
As a
result of the Company’s poor operating performance, among other factors, the
Company’s enterprise value was under $10 million as of March 31,
2009. Effectively, investors are attributing little value to the
operating businesses of the Company. We believe this indicates an
extreme lack of confidence in the current Board’s and management’s ability to
generate acceptable returns, a concern that, as evidenced by the performance
graph, stockholders have had to endure for years.
We are concerned that the
Company will continue to misallocate stockholder capital
We are
extremely concerned about the Company’s search for acquisition targets in
executing its growth strategy. We believe that management needs to
devote its full attention to improving operational performance and that the
quest for acquisitions will only serve to distract management’s
focus. We also have serious doubts as to management’s and the Board’s
ability to identify the right target, determine a reasonable price and oversee
the successful integration of the acquired business, especially in light of the
Company’s limited and poor acquisition history. At just $8.4 million,
the Arques Technology transaction, completed in fiscal 2007, is the only
acquisition consummated by the Company during Robert Dickinson’s eight years as
CEO. Less than two years later, the Company wrote off all $5.3
million in goodwill recorded for that acquisition. Given this
outcome, we are highly skeptical of the ability of management, under the
direction of the current Board, to create stockholder value through pursuit of
an acquisition strategy.
We believe Board and
management interests are misaligned with those of
stockholders
The
aggregate direct stock ownership of the Board and senior management amounts to
88,200 Shares, or 0.38% of CMD’s outstanding Shares. In addition, the Board has
not adopted any stock ownership guidelines for the Company’s executive officers
or directors. As a group, management’s and the Board’s economic
exposure to CMD’s equity is concentrated in nearly 2,900,000 underwater stock
options, which we believe encourages the pursuit of high-risk/high-reward
strategies. Additionally, despite continued deteriorating results,
the Board issued options to purchase 325,000 Shares to the Company’s top five
executives during each of fiscal 2008 and fiscal 2009, and determined to make
those same grants again in fiscal 2010. It is our view that option
grants are to be earned and not a right.
We believe that the Board
has demonstrated poor corporate governance practices
Specifically,
in June 2001, two months after Mr. Dickinson was named CEO, the Board amended
the Company’s bylaws to extend the advance notice deadline for stockholder
nominations to 120 calendar days from 30 calendar days. Then, in
September 2001, the Board implemented a poison pill without seeking stockholder
approval. Furthermore, in December 2007, the Board deprived
stockholders of their ability to call special meetings, reserving this right
solely for the Board. We believe these actions serve to entrench the
current Board and need to be reconsidered. We also believe that
having Mr. Dickinson serve as the “single focal point” for stockholder concerns
is inconsistent with the Board’s process for stockholder communications set
forth in the Company’s proxy statement, and isolates stockholder concerns from
the independent directors.
In our view, the Board has
had ample opportunity to address the Company’s key strategic and operational
issues
Consider
that, excluding the one recent addition to the Board:
|
·
|
there
has not been a change in the composition of the Board since
2003;
|
|
·
|
the
average tenure of the Board members is 9.5 years;
and
|
|
·
|
five
of the six current directors are either retired or
consultants.
|
We do not
believe the Board has been proactive in addressing the Company’s declining
operating and financial performance and overseeing management. Under
the incumbent Board:
|
·
|
Annual
revenues have declined 17.3% from $59.6 million in fiscal 2004 to $49.3
million in fiscal 2009.
|
|
·
|
CMD
has gone from generating net income of $3.8 million in fiscal 2004 to
reporting a net loss of $15.2 million in fiscal
2009.
|
|
·
|
The
Company’s stock price has declined over 71% from $9.13 on December 31,
2003 to $2.63 on July 21, 2009.
|
Although
the Company recently appointed Jon Castor to the Board, we believe his
appointment was made in reaction to the nomination of the Dialectic Nominees and
does little to address the fundamental issues we have raised.
We believe it is clearly time for a
change.
We believe that the
Dialectic Nominees have the experience necessary to oversee
operational and strategic
initiatives with a goal of maximizing stockholder value
Dialectic
is a long-term stockholder of CMD, having held stock in the Company since
September 2007.
The
Dialectic Group collectively owns 2,025,011 Shares, or approximately 8.8% of the
outstanding Shares of the Company. Accordingly, we are highly
incentivized to maximize the value of your Shares. Our interests are
aligned with the interests of all stockholders.
If
elected to the Board, the Dialectic Nominees will endeavor to use their
extensive financial and operational experience to implement strategic and
operational changes at the Company, including realigning CMD’s cost structure,
reviewing capital allocation opportunities and overseeing management’s
execution. The Dialectic Nominees are not committed to paying a large
special cash dividend or pursuing a sale of the Company; however, they will,
consistent with their fiduciary duties, explore any viable alternatives to
maximize stockholder value.
The
Dialectic Nominees, if elected, will represent a minority of the
Board. If elected, the Dialectic Nominees will, subject to their
fiduciary duties as directors, work with the other members of the Board to take
those steps that they deem are necessary to maximize stockholder
value. Although the Dialectic Nominees will not be able to adopt any
measures without the support of at least some members of the current Board, we
believe that the election of the Dialectic Nominees will send a strong message
to the Board regarding the meaningful change desired by CMD
stockholders. There can be no assurance that the goals of the
Dialectic Group will be achieved if the Dialectic Nominees are
elected.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
The
Dialectic Group is seeking your support at the Annual Meeting to elect the
Dialectic Nominees. The Board is currently composed of seven (7)
directors. The Dialectic Group believes that seven (7) directors are
up for election at the Annual Meeting to serve one-year terms expiring at the
2010 annual meeting of stockholders and until their successors have been
selected and qualified. For the reasons stated above, we are seeking
your support at the Annual Meeting to elect the Dialectic Nominees in opposition
to three (3) of the Company’s seven (7) director nominees. Your vote
to elect the Dialectic Nominees will have the legal effect of replacing three
(3) incumbent directors of the Company with the Dialectic
Nominees. If elected, the Dialectic Nominees will represent a
minority of the members of the Board.
THE
DIALECTIC NOMINEES
The
Dialectic Group has nominated three (3) highly qualified nominees, each of whom,
if elected, will exercise his independent judgment in accordance with his
fiduciary duties as a director in all matters that come before the
Board. The Dialectic Nominees are independent of the Company in
accordance with the SEC and Nasdaq Stock Market rules on board
independence. If elected, and subject to their fiduciary duties as
directors, the Dialectic Nominees would work with the other members of the Board
to take those steps that they deem are necessary or advisable to maximize value
for all stockholders.
Set forth
below are the name, age, citizenship, business address, present principal
occupation and employment and material occupations, positions, offices or
employments for the past five years of each of the Dialectic
Nominees. This information has been furnished to the Dialectic Group
by the Dialectic Nominees. The Dialectic Nominees have been nominated
by DCP in accordance with the Company’s advance notice bylaw
provision.
John Fichthorn (Age 36)
is a
co-founder of DCM, 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. Mr.
Fichthorn holds a B.A. in Astronomy from the University of North Carolina at
Chapel Hill. The principal business address of Mr. Fichthorn is 875
Third Avenue, 15th Floor, New York, New York 10022. Mr.
Fichthorn is a U.S. citizen.
J. Michael Gullard (Age 64)
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. The principal business address of Mr. Gullard is
P.O. Box 1203, Menlo Park, California 94026-1203. Mr.
Gullard is a U.S. citizen.
Kenneth Potashner (Age 51)
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. The principal business address of Mr. Potashner is 6603
Calle Ponte Bella Rancho Santa Fe, California 92091. Mr. Potashner is
a U.S. citizen.
Each
of the Dialectic Nominees has consented to serve as a director of the Company if
elected and to being named in this Proxy Statement. The Dialectic
Nominees will not receive any compensation from any member of the Dialectic
Group for their services as directors of the Company. Other than as
stated herein, there are no arrangements or understandings between members of
the Dialectic Group and any of the Dialectic Nominees or any other person or
persons pursuant to which the nomination of the Dialectic Nominees described
herein is to be made, other than the consent by each of the Dialectic Nominees
to be named in this Proxy Statement and to serve as a director of CMD if elected
as such at the Annual Meeting. None of the Dialectic Nominees is a
party adverse to CMD or any of its subsidiaries or has a material interest
adverse to CMD or any of its subsidiaries in any material pending legal
proceedings.
The
Dialectic Group does not expect that the Dialectic Nominees will be unable to
stand for election, but, in the event that such persons are unable to serve or,
for good cause, will not serve, the Shares represented by the enclosed
GOLD
proxy card will be voted
for substitute nominees, to the extent this is not prohibited under the
Company’s Amended and Restated Bylaws or applicable law. In addition,
DCP reserves the right to nominate substitute persons if CMD makes or announces
any changes to its Amended and Restated Bylaws or takes or announces any other
action that has, or if consummated would have, the effect of disqualifying the
Dialectic Nominees. In any such case, Shares represented by the
enclosed
GOLD
proxy card
will be voted for such substitute nominees, to the extent this is not prohibited
under the Company’s Amended and Restated Bylaws or applicable
law. DCP reserves the right to nominate additional persons if CMD
increases the size of the Board above its existing size. Additional
nominations made pursuant to the preceding sentence are without prejudice to the
position of DCP that any attempt to increase the size of the current Board or to
classify the Board constitutes an unlawful manipulation of the Company’s
corporate machinery.
YOU
ARE URGED TO VOTE FOR THE ELECTION OF THE DIALECTIC NOMINEES ON THE ENCLOSED
GOLD PROXY CARD.
PROPOSAL
NO. 2
COMPANY
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTANTS
As
discussed in further detail in the Company’s proxy statement, the Audit
Committee of the Board has appointed Grant Thornton LLP as independent
accountants to audit the financial statements of the Company for the current
fiscal year. The Board has submitted this proposal to stockholders
for ratification as a corporate governance practice.
We do not
object to the ratification of the appointment of Grant Thornton LLP as the
Company’s independent accountants to audit the financial statements of the
Company for the fiscal year ending March 31, 2010.
PROPOSAL
NO. 3
COMPANY
PROPOSAL TO AMEND THE 1995 EMPLOYEE STOCK PURCHASE PLAN
As
discussed in further detail in the Company’s proxy statement, the Compensation
Committee of the Board recommended, and the Board approved, an amendment to the
1995 Employee Stock Purchase Plan of the Company (as amended, the “Purchase
Plan”), subject to approval of the Company’s stockholders at the Annual Meeting,
to increase the number of Shares reserved under the Purchase Plan by
200,000. The Company is submitting the amendment to the Purchase Plan
to stockholders for their consideration at the Annual Meeting.
THE
DIALECTIC GROUP RECOMMENDS A VOTE “FOR” THE PROPOSAL TO AMEND THE 1995 EMPLOYEE
STOCK PURCHASE PLAN.
VOTING
AND PROXY PROCEDURES
Only
stockholders of record on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. Each Share is entitled to one
vote. Stockholders who sell Shares before the Record Date (or acquire
them without voting rights after the Record Date) may not vote such
Shares. Stockholders of record on the Record Date will retain their
voting rights in connection with the Annual Meeting even if they sell such
Shares after the Record Date. Based on publicly available
information, the Dialectic Group believes that the only outstanding class of
securities of CMD entitled to vote at the Annual Meeting is the
Shares.
Shares
represented by properly executed
GOLD
proxy cards will be voted
at the Annual Meeting as marked and, in the absence of specific instructions,
will be voted FOR the election of the Dialectic Nominees to the Board, FOR the
election of the candidates who have been nominated by the Company other than
___________, __________ and ________, FOR the ratification of the appointment of
Grant Thornton LLP as the Company’s independent registered public accountants
for the fiscal year ending March 31, 2010, FOR the amendment of the Purchase
Plan and in the discretion of the persons named as proxies on all other matters
as may properly come before the Annual Meeting.
According
to the Company’s proxy statement for the Annual Meeting, the Board intends to
nominate seven (7) candidates for election as directors at the Annual
Meeting. This Proxy Statement is soliciting proxies to elect not only
the Dialectic Nominees, but also the candidates who have been nominated by the
Company other than ___________, __________ and ________. This gives
stockholders who wish to vote for the Dialectic Nominees and such other persons
the ability to do so. Under applicable proxy rules, we are required
either to solicit proxies only for the Dialectic Nominees, which could result in
limiting the ability of stockholders to fully exercise their voting rights with
respect to the Company’s nominees, or to solicit for the Dialectic Nominees and
for fewer than all of the Company’s nominees, which enables a stockholder who
desires to vote for the Dialectic Nominees to also vote for those of the
Company’s nominees for whom we are soliciting proxies. The names,
backgrounds and qualifications of the Company’s nominees, and other information
about them, can be found in the Company’s proxy statement. There is
no assurance that any of the Company’s nominees will serve as directors if the
Dialectic Nominees are elected.
QUORUM
In order
to conduct any business at the Annual Meeting, a quorum must be present in
person or represented by valid proxies. The presence in person or by
proxy of the holders of a majority of the outstanding Shares entitled to vote at
the Annual Meeting is necessary to constitute a quorum. Abstentions
and broker non-votes will be counted in determining whether a quorum is present
at the Annual Meeting, but are not deemed to be present or represented for
purposes of determining whether stockholder approval of a proposal has been
obtained.
VOTES
REQUIRED FOR APPROVAL
Vote required for the election of
directors
. The seven nominees who receive the most votes will
be elected as directors; votes cast against the director or withheld have no
legal effect. Any Shares not voted (whether by abstention, broker
non-votes or otherwise) will have no impact on the election of directors, except
to the extent that withholding the authority to vote for an individual results
in another individual receiving a larger number of votes.
Vote required for the ratification
of the appointment of Grant Thornton LLP.
According to the
Company’s proxy statement, to be approved, the ratification of the selection of
Grant Thornton LLP as the Company’s independent registered public accountants
must receive “For” votes from the majority of Shares represented in person or by
proxy and voting on the proposal. According to the Company’s proxy
statement, abstentions and broker non-votes are not counted as votes for or
against this proposal or in the calculation of the total votes
cast.
Vote required for amendment of the
1995 Plan
. According to the Company’s proxy statement, to be
approved, the amendment of the 1995 Plan must receive “For” votes from the
majority of Shares represented in person or by proxy and voting on the
proposal. According to the Company’s proxy statement, abstentions and
broker non-votes are not counted as votes for or against this proposal or in the
calculation of the total votes cast.
DISCRETIONARY
VOTING
Many
brokers are subject to rules which prohibit them from voting on certain
proposals unless they receive specific instruction from the beneficial owner to
vote on such matters. Such rules currently prohibit the brokers to vote with
respect to proposals related to contested director elections and equity
compensation, such as Proposals 1 and 3, absent such instruction, but such rules
currently do not prohibit the brokers to vote on Proposal 2 related to
ratification of accountants in the absence of such instructions if and as they
choose. Accordingly, your Shares will not be voted in the election for directors
or on Proposal 3 if you hold your Shares in street name and do not instruct your
broker how to vote.
REVOCATION
OF PROXIES
Stockholders
of CMD may revoke their proxies at any time prior to exercise by attending the
Annual Meeting and voting in person (although attendance at the Annual Meeting
will not in and of itself constitute revocation of a proxy) or by delivering a
written notice of revocation. The delivery of a subsequently dated
proxy which is properly completed will constitute a revocation of any earlier
proxy. The revocation may be delivered either to the Dialectic Group
in care of Okapi Partners at the address set forth on the back cover of this
Proxy Statement or to CMD at 490 N. McCarthy Boulevard, #100, Milpitas,
California 95035, or any other address provided by CMD. Although a
revocation is effective if delivered to CMD, the Dialectic Group requests that
either the original or photostatic copies of all revocations be mailed to the
Dialectic Group in care of Okapi Partners at the address set forth on the back
cover of this Proxy Statement so that the Dialectic Group will be aware of all
revocations and can more accurately determine if and when proxies have been
received from the holders of record on the Record Date and the number of
outstanding Shares represented thereby. Additionally, Okapi Partners
may use this information to contact stockholders who have revoked their proxies
in order to solicit later dated proxies for the election of the Dialectic
Nominees.
IF
YOU WISH TO VOTE FOR THE ELECTION OF THE DIALECTIC NOMINEES TO THE BOARD,
FOR THE RATIFICATION OF
THE APPOINTMENT OF
GRANT THORNTON LLP OR FOR THE AMENDMENT OF THE
PURCHASE PLAN, PLEASE SIGN, DATE AND RETURN PROMPTLY THE ENCLOSED GOLD PROXY
CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION
OF PROXIES
The
solicitation of proxies pursuant to this Proxy Statement is being made by the
Dialectic Group. Proxies may be solicited by mail, facsimile,
telephone, telegraph, Internet, in person and by advertisements.
Dialectic
has entered into an agreement with Okapi Partners for solicitation and advisory
services in connection with this solicitation, for which Okapi Partners will
receive a fee not to exceed $50,000, together with reimbursement for its
reasonable out-of-pocket expenses, and will be indemnified against certain
liabilities and expenses, including certain liabilities under the federal
securities laws. Okapi Partners will solicit proxies from
individuals, brokers, banks, bank nominees and other institutional
holders. Dialectic has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all solicitation materials to
the beneficial owners of the Shares they hold of record. Dialectic
will reimburse these record holders for their reasonable out-of-pocket expenses
in so doing. It is anticipated that Okapi Partners will employ
approximately 10-15 persons to solicit the Company’s stockholders for the Annual
Meeting.
The
entire expense of soliciting proxies is being borne by DCP pursuant to the terms
of the Joint Filing and Solicitation Agreement (as described
below). Costs of this solicitation of proxies are currently estimated
to be approximately $_______. DCP estimates that through the date
hereof, its expenses in connection with this solicitation are approximately
$_____.
DCP intends
to seek reimbursement from CMD of all expenses it incurs in connection with the
solicitation of proxies for the election of the Dialectic Nominees to the Board
at the Annual Meeting. DCP does not intend to submit the question of
such reimbursement to a vote of security holders of the Company.
ADDITIONAL
PARTICIPANT INFORMATION
The
Dialectic Nominees and the other members of the Dialectic Group are participants
in this solicitation. The principal business of DCM is providing
investment advice. DCM is the investment manager of each of DCP, DOF,
DAP and DAO. The principal business of each of DCP, DOF, DAP and DAO
is investing in securities. John Fichthorn and Luke Fichthorn are
each managing members of DCM, and their principal business is investment
management. 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.
The
address of the principal office of each of DCM, DCP, DAP, John Fichthorn and
Luke Fichthorn is 875 Third Avenue, 15th Floor, New York, New York
10022.
The
address of the principal office of each of DOF and DAO is c/o Goldman Sachs
Administration Services, Hardwicke House, 2
nd
Floor,
Hatch Street, Dublin 2, Ireland.
Mr.
Riley’s principal business address is c/o B. Riley & Co., LLC, 11100 Santa
Monica Boulevard, Suite 800, Los Angeles, California 90025.
As of the
date hereof, DCP beneficially owns 317,715 Shares, DOF beneficially owns 186,221
Shares, DAP beneficially owns 575,619 Shares and DAO beneficially owns 926,445
Shares. As of the date hereof, DCM (as the investment manager of each
of DCP, DOF, DAP and DAO) and John Fichthorn and Luke Fichthorn (as the managing
members of DCM) are deemed to be the beneficial owners of the (i) 317,715 Shares
owned by DCP, (ii) 186,221 Shares owned by DOF, (iii) 575,619 Shares owned by
DAP and (iv) 926,445 Shares owned by DAO. As of the date hereof,
Messrs. Gullard, Potashner and Riley do not directly own any
Shares.
Each
member of the Dialectic Group, as a member of a “group” with the other Dialectic
Group members for the purposes of Rule 13d-5(b)(1) under the Securities Exchange
Act of 1934, as amended, accordingly beneficially owns the Shares beneficially
owned in the aggregate by the other members of the Dialectic
Group. Each member of the Dialectic Group disclaims beneficial
ownership of such Shares, except to the extent of his or its pecuniary interest
therein.
For
information regarding purchases and sales of securities of CMD during the past
two years by the members of the Dialectic Group, including the Dialectic
Nominees and Messrs. Gullard and Riley, and their affiliates and associates, see
Schedule
I
.
On March
5, 2009, the members of the Dialectic Group entered into a Joint Filing and
Solicitation Agreement in which, among other things, (a) the Dialectic Group
agreed to the joint filing on behalf of each of them of statements on Schedule
13D with respect to the securities of the Company, (b) the Dialectic Group
agreed to solicit proxies or written consents for the election of the Dialectic
Nominees, or any other person(s) nominated by DCP, to the Board at the Annual
Meeting (the “Solicitation”), and (c) DCP agreed to bear all expenses incurred
in connection with the Dialectic Group’s activities, subject to certain
limitations. DCP has agreed to indemnify each of Messrs. Gullard,
Potashner and Riley against claims arising from the Solicitation and any related
transactions.
DCP has
paid B. Riley & Co., LLC a fee of $75,000, and will pay an additional
$100,000 success fee if a Dialectic Nominee is elected to serve on the
Board. B. Riley & Co., LLC will also be entitled to a $100,000
fee based upon the return on DCP’s investment in the Company, to be agreed upon
by the parties. Mr. Riley is the Chairman and sole indirect equity
owner of B. Riley & Co., LLC.
Except as
set forth in this Proxy Statement (including the Schedules hereto), (i) during
the past 10 years, no participant in this solicitation has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); (ii)
no participant in this solicitation directly or indirectly beneficially owns any
securities of CMD; (iii) no participant in this solicitation owns any securities
of CMD which are owned of record but not beneficially; (iv) no participant in
this solicitation has purchased or sold any securities of CMD during the past
two years; (v) no part of the purchase price or market value of the securities
of CMD owned by any participant in this solicitation is represented by funds
borrowed or otherwise obtained for the purpose of acquiring or holding such
securities; (vi) no participant in this solicitation is, or within the past year
was, a party to any contract, arrangements or understandings with any person
with respect to any securities of CMD, including, but not limited to, joint
ventures, loan or option arrangements, puts or calls, guarantees against loss or
guarantees of profit, division of losses or profits, or the giving or
withholding of proxies; (vii) no associate of any participant in this
solicitation owns beneficially, directly or indirectly, any securities of CMD;
(viii) no participant in this solicitation owns beneficially, directly or
indirectly, any securities of any parent or subsidiary of CMD; (ix) no
participant in this solicitation or any of his/its associates was a party to any
transaction, or series of similar transactions, since the beginning of CMD’s
last fiscal year, or is a party to any currently proposed transaction, or series
of similar transactions, to which CMD or any of its subsidiaries was or is to be
a party, in which the amount involved exceeds $120,000; (x) no participant in
this solicitation or any of his/its associates has any arrangement or
understanding with any person with respect to any future employment by CMD or
its affiliates, or with respect to any future transactions to which CMD or any
of its affiliates will or may be a party; and (xi) no person, including the
participants in this solicitation, who is a party to an arrangement or
understanding pursuant to which the Dialectic Nominees are proposed to be
elected has a substantial interest, direct or indirect, by security holdings or
otherwise in any matter to be acted on at the Annual Meeting.
OTHER
MATTERS AND ADDITIONAL INFORMATION
Other
than as discussed above, the Dialectic Group is unaware of any other matters to
be considered at the Annual Meeting. However, should other matters,
which the Dialectic Group is not aware of a reasonable time before this
solicitation, be brought before the Annual Meeting, the persons named as proxies
on the enclosed
GOLD
proxy card will vote on such matters in their discretion.
STOCKHOLDER
PROPOSALS
Any
stockholder who intends to present a proposal at the Company’s annual meeting in
the year 2010 must deliver the proposal to the Corporate Secretary at
CMD:
|
v
|
Not
later than March 31, 2010, if the proposal is submitted for inclusion in
the Company’s proxy materials for that meeting pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended;
or
|
|
v
|
Not
less than 120 calendar days before the one-year anniversary of the date
that the Company’s proxy statement was released to stockholders in
connection with the Annual Meeting if a stockholder wishes to submit a
proposal that is not to be included in the Company’s proxy materials for
that meeting or nominate a
director.
|
The
information set forth above regarding the procedures for submitting stockholder
proposals for consideration at CMD’s 2010 annual meeting of stockholders is
based on information contained in the Company’s proxy statement. The
incorporation of this information in this Proxy Statement should not be
construed as an admission by the Dialectic Group that such procedures are legal,
valid or binding.
INCORPORATION
BY REFERENCE
THE
DIALECTIC GROUP HAS OMITTED FROM THIS PROXY STATEMENT CERTAIN DISCLOSURE
REQUIRED BY APPLICABLE LAW THAT IS EXPECTED TO BE INCLUDED IN CMD’S PROXY
STATEMENT RELATING TO THE ANNUAL MEETING. THIS DISCLOSURE IS EXPECTED
TO INCLUDE, AMONG OTHER THINGS, CURRENT BIOGRAPHICAL INFORMATION ON CMD’S
CURRENT DIRECTORS, INFORMATION CONCERNING EXECUTIVE COMPENSATION, AND OTHER
IMPORTANT INFORMATION. THE DIALECTIC GROUP WAS NOT INVOLVED IN THE
PREPARATION OF CMD’S PROXY STATEMENT. SEE SCHEDULE II FOR INFORMATION
REGARDING PERSONS WHO BENEFICIALLY OWN MORE THAN 5% OF THE SHARES AND THE
OWNERSHIP OF THE SHARES BY THE DIRECTORS AND MANAGEMENT OF CMD.
The
information concerning CMD contained in this Proxy Statement and the Schedules
attached hereto has been taken from, or is based upon, publicly available
information.
THE
DIALECTIC GROUP
July
[ ], 2009
SCHEDULE
I
TRANSACTIONS
IN SECURITIES OF CALIFORNIA MICRO DEVICES
CORPORATION DURING THE PAST TWO
YEARS
Except
as otherwise specified, all purchases and sales were made in the open
market.
Dialectic Capital Partners,
LP
Date
|
Transaction Code
|
Number of Shares of
Common Stock
Purchased or Sold
|
Price Per
Share($)
|
03/22/2007
|
BY
|
12,655
|
|
4.8108
|
04/02/2007
|
SL
|
5,190
|
|
4.6911
|
04/20/2007
|
SL
|
84
|
|
4.9000
|
04/26/2007
|
SL
|
12,587
|
|
4.8000
|
05/01/2007
|
BY
|
1,257
|
|
4.8316
|
05/03/2007
|
SL
|
3,105
|
|
4.9000
|
05/03/2007
|
SL
|
4,196
|
|
4.9000
|
05/04/2007
|
SL
|
10,741
|
|
4.9118
|
05/07/2007
|
SL
|
923
|
|
4.9264
|
05/07/2007
|
SL
|
11,411
|
|
4.9526
|
07/02/2007
|
BY
|
11,106
|
|
4.0257
|
07/05/2007
|
BY
|
998
|
|
4.1300
|
07/11/2007
|
BY
|
21,775
|
|
4.1639
|
07/12/2007
|
BY
|
2,966
|
|
4.2438
|
07/13/2007
|
BY
|
6,542
|
|
4.2300
|
07/13/2007
|
BY
|
2,796
|
|
4.2500
|
07/18/2007
|
BY
|
16,140
|
|
4.1500
|
07/19/2007
|
BY
|
255
|
|
4.3967
|
07/20/2007
|
BY
|
5,918
|
|
4.3600
|
08/01/2007
|
BY
|
1,697
|
|
4.3500
|
08/03/2007
|
BY
|
2,771
|
|
4.1216
|
08/08/2007
|
BY
|
10,145
|
|
3.8205
|
08/09/2007
|
BY
|
5,073
|
|
3.7610
|
08/13/2007
|
BY
|
19,067
|
|
3.8505
|
08/14/2007
|
BY
|
2,143
|
|
3.8416
|
08/15/2007
|
BY
|
6,487
|
|
3.8472
|
08/16/2007
|
BY
|
9,318
|
|
3.8149
|
08/17/2007
|
BY
|
4,087
|
|
3.7953
|
08/17/2007
|
BY
|
4,058
|
|
3.7600
|
08/24/2007
|
BY
|
8,116
|
|
3.6947
|
08/30/2007
|
BY
|
11,623
|
|
3.6500
|
08/30/2007
|
BY
|
4,058
|
|
3.8559
|
08/30/2007
|
BY
|
4,058
|
|
3.8018
|
08/30/2007
|
BY
|
4,058
|
|
3.6510
|
08/30/2007
|
BY
|
1,015
|
|
3.7900
|
09/19/2007
|
SL
|
6,323
|
|
4.2009
|
09/28/2007
|
BY
|
3,588
|
|
4.3601
|
09/28/2007
|
BY
|
3,588
|
|
4.3601
|
09/28/2007
|
BY
|
323
|
|
4.3633
|
10/04/2007
|
SL
|
5,148
|
|
4.7992
|
10/04/2007
|
SL
|
5,148
|
|
4.7992
|
10/05/2007
|
SL
|
2,491
|
|
4.8423
|
10/08/2007
|
SL
|
123
|
|
4.8034
|
10/10/2007
|
SL
|
438
|
|
4.7500
|
10/11/2007
|
SL
|
2,116
|
|
4.7500
|
10/12/2007
|
SL
|
144
|
|
4.7000
|
10/18/2007
|
SL
|
3,171
|
|
4.6386
|
10/25/2007
|
BY
|
3,622
|
|
4.5906
|
10/25/2007
|
SL
|
5,148
|
|
4.8010
|
10/26/2007
|
BY
|
1,811
|
|
4.5460
|
10/31/2007
|
BY
|
688
|
|
4.4263
|
10/31/2007
|
SL
|
308
|
|
4.4487
|
11/01/2007
|
BY
|
2,061
|
|
4.1991
|
11/01/2007
|
BY
|
2,061
|
|
4.1991
|
11/02/2007
|
BY
|
4,273
|
|
4.2000
|
11/02/2007
|
BY
|
4,273
|
|
4.2000
|
11/20/2007
|
BY
|
3,638
|
|
3.4695
|
11/28/2007
|
BY
|
14,645
|
|
3.4697
|
11/28/2007
|
BY
|
14,645
|
|
3.4697
|
11/29/2007
|
BY
|
2,486
|
|
3.5569
|
12/10/2007
|
SL
|
10
|
|
4.2400
|
12/11/2007
|
SL
|
1,461
|
|
4.2436
|
12/11/2007
|
SL
|
1,461
|
|
4.2436
|
12/19/2007
|
SL
|
20,404
|
|
4.0500
|
12/27/2007
|
SL
|
6,158
|
|
4.4300
|
12/28/2007
|
BY
|
3,125
|
|
4.5900
|
01/02/2008
|
SL
|
788
|
|
4.6019
|
01/02/2008
|
SL
|
3,032
|
|
4.6000
|
01/02/2008
|
SL
|
3,032
|
|
4.6000
|
01/04/2008
|
BY
|
2,853
|
|
4.1900
|
01/14/2008
|
SL
|
16,443
|
|
4.2000
|
02/06/2008
|
BY
|
8,777
|
|
3.3000
|
03/18/2008
|
BY
|
923
|
|
2.9099
|
03/24/2008
|
BY
|
21,364
|
|
2.9964
|
03/24/2008
|
BY
|
21,364
|
|
2.9926
|
04/02/2008
|
BY
|
5,420
|
|
3.0079
|
04/09/2008
|
BY
|
5,420
|
|
3.0000
|
04/18/2008
|
BY
|
3,612
|
|
2.9103
|
04/18/2008
|
BY
|
3,612
|
|
2.9103
|
04/29/2008
|
BY
|
11,043
|
|
3.0200
|
04/30/2008
|
BY
|
2,710
|
|
3.0400
|
04/30/2008
|
BY
|
1,084
|
|
3.0400
|
04/30/2008
|
BY
|
43
|
|
3.0500
|
05/02/2008
|
BY
|
8,830
|
|
3.0077
|
05/02/2008
|
BY
|
5,684
|
|
3.0069
|
05/05/2008
|
BY
|
5,500
|
|
3.0467
|
05/05/2008
|
BY
|
2,750
|
|
3.0944
|
05/05/2008
|
BY
|
2,750
|
|
3.0910
|
05/05/2008
|
BY
|
2,750
|
|
3.0892
|
05/06/2008
|
BY
|
3,410
|
|
3.0685
|
05/07/2008
|
BY
|
1,100
|
|
3.0739
|
05/14/2008
|
BY
|
3,278
|
|
3.1279
|
05/15/2008
|
SL
|
1,539
|
|
3.4312
|
05/15/2008
|
SL
|
1,539
|
|
3.4312
|
05/16/2008
|
SL
|
1,395
|
|
3.4297
|
05/16/2008
|
SL
|
1,395
|
|
3.4297
|
05/19/2008
|
SL
|
8,205
|
|
3.4153
|
05/29/2008
|
SL
|
867
|
|
3.4021
|
05/30/2008
|
BY
|
1,100
|
|
3.5380
|
05/30/2008
|
SL
|
36
|
|
3.4633
|
07/08/2008
|
BY
|
857
|
|
3.0919
|
07/21/2008
|
BY
|
1,160
|
|
3.0900
|
08/22/2008
|
SL
|
5,991
|
|
3.2057
|
10/08/2008
|
BY
|
6,764
|
|
2.2500
|
10/10/2008
|
BY
|
7,743
|
|
2.3118
|
11/03/2008
|
SL
|
34,031
|
|
2.3700
|
12/10/2008
|
BY
|
8,817
|
|
1.6500
|
12/16/2008
|
BY
|
17,660
|
|
1.7104
|
12/17/2008
|
BY
|
2,948
|
|
1.5956
|
12/17/2008
|
BY
|
2,948
|
|
1.5956
|
12/19/2008
|
BY
|
275
|
|
1.5000
|
12/22/2008
|
BY
|
458
|
|
1.6737
|
06/22/2009
|
BY
|
229
|
|
2.4500
|
06/23/2009
|
BY
|
687
|
|
2.4184
|
Dialectic Offshore,
Ltd.
Date
|
Transaction Code
|
Number of Shares of
Common Stock
Purchased or Sold
|
Price Per
Share($)
|
03/22/2007
|
BY
|
2,345
|
|
4.8108
|
04/20/2007
|
SL
|
16
|
|
4.9000
|
04/26/2007
|
SL
|
2,413
|
|
4.8000
|
05/03/2007
|
SL
|
595
|
|
4.9000
|
05/03/2007
|
SL
|
804
|
|
4.9000
|
05/04/2007
|
SL
|
2,059
|
|
4.9118
|
05/07/2007
|
SL
|
177
|
|
4.9264
|
05/07/2007
|
SL
|
2,187
|
|
4.9526
|
06/01/2007
|
BY
|
1,293
|
|
4.8712
|
07/11/2007
|
BY
|
3,925
|
|
4.1639
|
07/12/2007
|
BY
|
534
|
|
4.2438
|
07/13/2007
|
BY
|
1,180
|
|
4.2300
|
07/13/2007
|
BY
|
504
|
|
4.2500
|
07/18/2007
|
BY
|
2,910
|
|
4.1500
|
07/19/2007
|
BY
|
45
|
|
4.3967
|
07/20/2007
|
BY
|
1,067
|
|
4.3600
|
08/01/2007
|
BY
|
304
|
|
4.3500
|
08/03/2007
|
BY
|
495
|
|
4.1216
|
08/08/2007
|
BY
|
1,805
|
|
3.8205
|
08/09/2007
|
BY
|
903
|
|
3.7610
|
08/13/2007
|
BY
|
3,431
|
|
3.8505
|
08/14/2007
|
BY
|
384
|
|
3.8416
|
08/15/2007
|
BY
|
1,168
|
|
3.8472
|
08/16/2007
|
BY
|
1,677
|
|
3.8149
|
08/17/2007
|
BY
|
736
|
|
3.7953
|
08/17/2007
|
BY
|
722
|
|
3.7600
|
08/24/2007
|
BY
|
1,444
|
|
3.6947
|
08/30/2007
|
BY
|
58,271
|
|
3.6500
|
08/30/2007
|
BY
|
722
|
|
3.8559
|
08/30/2007
|
BY
|
722
|
|
3.8018
|
08/30/2007
|
BY
|
722
|
|
3.6510
|
08/30/2007
|
BY
|
181
|
|
3.7900
|
09/19/2007
|
SL
|
2,478
|
|
4.2009
|
09/28/2007
|
BY
|
1,414
|
|
4.3601
|
09/28/2007
|
BY
|
1,414
|
|
4.3601
|
09/28/2007
|
BY
|
127
|
|
4.3633
|
10/04/2007
|
SL
|
2,017
|
|
4.7992
|
10/04/2007
|
SL
|
2,017
|
|
4.7992
|
10/05/2007
|
SL
|
976
|
|
4.8423
|
10/08/2007
|
SL
|
48
|
|
4.8034
|
10/10/2007
|
SL
|
172
|
|
4.7500
|
10/11/2007
|
SL
|
829
|
|
4.7500
|
10/12/2007
|
SL
|
56
|
|
4.7000
|
10/18/2007
|
SL
|
1,243
|
|
4.6386
|
10/25/2007
|
BY
|
1,412
|
|
4.5906
|
10/25/2007
|
SL
|
2,017
|
|
4.8010
|
10/26/2007
|
BY
|
706
|
|
4.5460
|
10/31/2007
|
BY
|
268
|
|
4.4263
|
10/31/2007
|
SL
|
121
|
|
4.4487
|
11/20/2007
|
BY
|
1,390
|
|
3.4695
|
11/28/2007
|
BY
|
5,596
|
|
3.4697
|
11/28/2007
|
BY
|
5,596
|
|
3.4697
|
11/29/2007
|
BY
|
950
|
|
3.5569
|
12/10/2007
|
SL
|
4
|
|
4.2400
|
12/11/2007
|
SL
|
559
|
|
4.2436
|
12/11/2007
|
SL
|
559
|
|
4.2436
|
12/19/2007
|
SL
|
7,797
|
|
4.0500
|
12/27/2007
|
SL
|
2,353
|
|
4.4300
|
12/28/2007
|
BY
|
1,194
|
|
4.5900
|
01/02/2008
|
SL
|
301
|
|
4.6019
|
01/02/2008
|
SL
|
1,159
|
|
4.6000
|
01/02/2008
|
SL
|
1,159
|
|
4.6000
|
01/02/2008
|
SL
|
6,392
|
|
4.6600
|
01/04/2008
|
BY
|
1,033
|
|
4.1900
|
01/14/2008
|
SL
|
5,860
|
|
4.2000
|
02/06/2008
|
BY
|
3,162
|
|
3.3000
|
03/18/2008
|
BY
|
333
|
|
2.9099
|
03/24/2008
|
BY
|
7,711
|
|
2.9964
|
03/24/2008
|
BY
|
7,711
|
|
2.9926
|
04/02/2008
|
BY
|
1,940
|
|
3.0079
|
04/09/2008
|
BY
|
1,940
|
|
3.0000
|
04/18/2008
|
BY
|
1,293
|
|
2.9103
|
04/18/2008
|
BY
|
1,293
|
|
2.9103
|
04/29/2008
|
BY
|
3,957
|
|
3.0200
|
04/30/2008
|
BY
|
970
|
|
3.0400
|
04/30/2008
|
BY
|
388
|
|
3.0400
|
04/30/2008
|
BY
|
16
|
|
3.0500
|
05/02/2008
|
BY
|
3,153
|
|
3.0077
|
05/02/2008
|
BY
|
2,027
|
|
3.0069
|
05/05/2008
|
BY
|
1,965
|
|
3.0467
|
05/05/2008
|
BY
|
983
|
|
3.0944
|
05/05/2008
|
BY
|
983
|
|
3.0910
|
05/05/2008
|
BY
|
983
|
|
3.0892
|
05/06/2008
|
BY
|
1,218
|
|
3.0685
|
05/07/2008
|
BY
|
393
|
|
3.0739
|
05/14/2008
|
BY
|
1,171
|
|
3.1279
|
05/15/2008
|
SL
|
549
|
|
3.4312
|
05/15/2008
|
SL
|
549
|
|
3.4312
|
05/16/2008
|
SL
|
498
|
|
3.4297
|
05/16/2008
|
SL
|
498
|
|
3.4297
|
05/19/2008
|
SL
|
2,930
|
|
3.4153
|
05/29/2008
|
SL
|
310
|
|
3.4021
|
05/30/2008
|
BY
|
393
|
|
3.5380
|
05/30/2008
|
SL
|
13
|
|
3.4633
|
07/08/2008
|
BY
|
302
|
|
3.0919
|
07/10/2008
|
BY
|
8,783
|
|
3.0616
|
07/11/2008
|
BY
|
10,300
|
|
3.0813
|
07/21/2008
|
BY
|
485
|
|
3.0900
|
08/22/2008
|
SL
|
2,505
|
|
3.2057
|
10/08/2008
|
BY
|
2,829
|
|
2.2500
|
10/10/2008
|
BY
|
3,238
|
|
2.3118
|
11/03/2008
|
BY
|
34,031
|
|
2.3700
|
12/10/2008
|
BY
|
5,169
|
|
1.6500
|
12/16/2008
|
BY
|
10,352
|
|
1.7104
|
12/17/2008
|
BY
|
1,728
|
|
1.5956
|
12/17/2008
|
BY
|
1,728
|
|
1.5956
|
12/19/2008
|
BY
|
161
|
|
1.5000
|
12/22/2008
|
BY
|
290
|
|
1.6737
|
06/22/2009
|
BY
|
140
|
|
2.4500
|
06/23/2009
|
BY
|
419
|
|
2.4184
|
Dialectic Antithesis
Partners, LP
Date
|
Transaction Code
|
Number of Shares of
Common Stock
Purchased or Sold
|
Price Per
Share($)
|
03/01/2007
|
BY
|
8,808
|
|
5.0699
|
04/03/2007
|
BY
|
17,862
|
|
4.7662
|
04/19/2007
|
SL
|
85
|
|
4.9000
|
04/26/2007
|
SL
|
12,767
|
|
4.8000
|
05/03/2007
|
SL
|
3,234
|
|
4.9011
|
05/03/2007
|
SL
|
4,256
|
|
4.9000
|
05/04/2007
|
SL
|
12,681
|
|
4.9115
|
05/07/2007
|
SL
|
936
|
|
4.9273
|
05/07/2007
|
SL
|
11,574
|
|
4.9526
|
07/11/2007
|
BY
|
12,143
|
|
4.1639
|
07/12/2007
|
BY
|
1,654
|
|
4.2438
|
07/13/2007
|
BY
|
33,453
|
|
4.2388
|
07/13/2007
|
BY
|
10,716
|
|
4.2300
|
07/18/2007
|
BY
|
26,438
|
|
4.1500
|
07/20/2007
|
BY
|
9,694
|
|
4.3600
|
07/30/2007
|
BY
|
16,538
|
|
4.4000
|
07/31/2007
|
BY
|
6,451
|
|
4.4471
|
08/01/2007
|
BY
|
32,617
|
|
4.4031
|
08/01/2007
|
BY
|
3,089
|
|
4.3500
|
08/03/2007
|
BY
|
5,042
|
|
4.1216
|
08/08/2007
|
BY
|
18,600
|
|
3.8205
|
08/09/2007
|
BY
|
9,300
|
|
3.7610
|
08/13/2007
|
BY
|
10,164
|
|
3.8500
|
08/14/2007
|
BY
|
610
|
|
3.8416
|
08/15/2007
|
BY
|
2,634
|
|
3.8482
|
08/16/2007
|
BY
|
5,349
|
|
3.8149
|
08/17/2007
|
BY
|
7,440
|
|
3.7600
|
08/17/2007
|
BY
|
696
|
|
3.7949
|
08/24/2007
|
BY
|
14,880
|
|
3.6947
|
08/30/2007
|
BY
|
26,312
|
|
3.6500
|
08/30/2007
|
BY
|
7,440
|
|
3.8559
|
08/30/2007
|
BY
|
7,440
|
|
3.8018
|
08/30/2007
|
BY
|
7,440
|
|
3.6510
|
08/30/2007
|
BY
|
1,860
|
|
3.7900
|
09/19/2007
|
SL
|
8,880
|
|
4.2009
|
09/28/2007
|
BY
|
6,224
|
|
4.3601
|
09/28/2007
|
BY
|
6,224
|
|
4.3601
|
09/28/2007
|
BY
|
560
|
|
4.3633
|
10/01/2007
|
BY
|
9,814
|
|
4.4384
|
10/03/2007
|
BY
|
8,160
|
|
4.6377
|
10/04/2007
|
SL
|
2,457
|
|
4.7992
|
10/04/2007
|
SL
|
7,607
|
|
4.7992
|
10/05/2007
|
SL
|
3,682
|
|
4.8423
|
10/08/2007
|
SL
|
181
|
|
4.8034
|
10/10/2007
|
SL
|
648
|
|
4.7500
|
10/11/2007
|
SL
|
3,127
|
|
4.7500
|
10/12/2007
|
SL
|
213
|
|
4.7000
|
10/18/2007
|
SL
|
4,686
|
|
4.6386
|
10/25/2007
|
BY
|
6,470
|
|
4.5906
|
10/25/2007
|
SL
|
7,713
|
|
4.8010
|
10/26/2007
|
BY
|
3,235
|
|
4.5460
|
10/31/2007
|
BY
|
1,229
|
|
4.4263
|
10/31/2007
|
SL
|
463
|
|
4.4487
|
11/01/2007
|
BY
|
10,144
|
|
4.1991
|
11/01/2007
|
BY
|
10,144
|
|
4.1991
|
11/02/2007
|
BY
|
21,037
|
|
4.2000
|
11/02/2007
|
BY
|
21,037
|
|
4.2000
|
11/06/2007
|
BY
|
6,883
|
|
3.8754
|
11/20/2007
|
BY
|
6,702
|
|
3.4695
|
11/28/2007
|
BY
|
26,980
|
|
3.4697
|
11/28/2007
|
BY
|
26,980
|
|
3.4697
|
11/29/2007
|
BY
|
4,579
|
|
3.5569
|
12/03/2007
|
BY
|
8,252
|
|
3.7742
|
12/05/2007
|
SL
|
15,326
|
|
4.0065
|
12/06/2007
|
SL
|
1,402
|
|
4.0394
|
12/06/2007
|
SL
|
12,061
|
|
4.0189
|
12/10/2007
|
SL
|
25
|
|
4.2400
|
12/11/2007
|
SL
|
3,653
|
|
4.2436
|
12/11/2007
|
SL
|
3,653
|
|
4.2436
|
12/17/2007
|
BY
|
6,436
|
|
3.8783
|
12/19/2007
|
SL
|
32,199
|
|
4.0500
|
12/27/2007
|
SL
|
9,718
|
|
4.4300
|
12/28/2007
|
BY
|
4,217
|
|
4.5900
|
01/02/2008
|
BY
|
6,392
|
|
4.6600
|
01/02/2008
|
SL
|
1,242
|
|
4.6019
|
01/02/2008
|
SL
|
4,776
|
|
4.6000
|
01/02/2008
|
SL
|
4,776
|
|
4.6000
|
01/04/2008
|
BY
|
7,100
|
|
4.1900
|
01/14/2008
|
SL
|
26,491
|
|
4.2000
|
01/24/2008
|
BY
|
26,785
|
|
3.3000
|
01/24/2008
|
BY
|
14,557
|
|
3.3000
|
01/24/2008
|
BY
|
12,849
|
|
3.4717
|
01/25/2008
|
BY
|
1,591
|
|
3.2900
|
02/06/2008
|
BY
|
25,801
|
|
3.3000
|
03/03/2008
|
BY
|
23,500
|
|
3.2000
|
03/18/2008
|
BY
|
3,051
|
|
2.9099
|
04/01/2008
|
SL
|
28,700
|
|
2.9400
|
04/02/2008
|
BY
|
18,255
|
|
3.0079
|
04/09/2008
|
BY
|
18,260
|
|
3.0000
|
04/18/2008
|
BY
|
12,170
|
|
2.9103
|
04/18/2008
|
BY
|
12,100
|
|
2.9103
|
04/30/2008
|
BY
|
9,130
|
|
3.0400
|
04/30/2008
|
BY
|
3,652
|
|
3.0400
|
04/30/2008
|
BY
|
146
|
|
3.0500
|
05/02/2008
|
BY
|
19,020
|
|
3.0069
|
05/02/2008
|
BY
|
8,415
|
|
3.0077
|
05/05/2008
|
BY
|
18,415
|
|
3.0467
|
05/05/2008
|
BY
|
9,208
|
|
3.0944
|
05/05/2008
|
BY
|
9,208
|
|
3.0910
|
05/05/2008
|
BY
|
9,208
|
|
3.0892
|
05/06/2008
|
BY
|
11,417
|
|
3.0685
|
05/07/2008
|
BY
|
3,683
|
|
3.0739
|
05/14/2008
|
BY
|
10,975
|
|
3.1279
|
05/15/2008
|
SL
|
4,637
|
|
3.4312
|
05/15/2008
|
SL
|
4,637
|
|
3.4312
|
05/16/2008
|
SL
|
4,205
|
|
3.4297
|
05/16/2008
|
SL
|
4,205
|
|
3.4297
|
05/19/2008
|
SL
|
24,727
|
|
3.4153
|
05/29/2008
|
SL
|
2,613
|
|
3.4021
|
05/30/2008
|
BY
|
3,683
|
|
3.5380
|
05/30/2008
|
SL
|
108
|
|
3.4633
|
06/02/2008
|
BY
|
8,885
|
|
3.6419
|
06/03/2008
|
BY
|
7,702
|
|
3.5226
|
06/03/2008
|
BY
|
253
|
|
3.6200
|
06/27/2008
|
BY
|
4,717
|
|
2.9707
|
07/01/2008
|
BY
|
63,617
|
|
3.1100
|
07/01/2008
|
SL
|
63,617
|
|
3.1100
|
07/08/2008
|
BY
|
3,379
|
|
3.0919
|
07/21/2008
|
BY
|
5,129
|
|
3.0900
|
08/01/2008
|
BY
|
16,978
|
|
3.1500
|
08/22/2008
|
SL
|
10,448
|
|
3.2057
|
09/02/2008
|
SL
|
14,943
|
|
3.2400
|
10/08/2008
|
BY
|
11,690
|
|
2.2500
|
10/10/2008
|
BY
|
13,381
|
|
2.3118
|
12/10/2008
|
BY
|
8,167
|
|
1.6500
|
12/16/2008
|
BY
|
16,358
|
|
1.7104
|
12/17/2008
|
BY
|
2,731
|
|
1.5956
|
12/17/2008
|
BY
|
2,731
|
|
1.5956
|
12/19/2008
|
BY
|
254
|
|
1.5000
|
12/22/2008
|
BY
|
2,462
|
|
1.6737
|
06/22/2009
|
BY
|
845
|
|
2.4500
|
06/23/2009
|
BY
|
2,535
|
|
2.4184
|
06/23/2009
|
BY
|
3,454
|
|
2.3667
|
Dialectic Antithesis
Offshore, Ltd.
Date
|
Transaction Code
|
Number of Shares of
Common Stock
Purchased or Sold
|
Price Per
Share($)
|
04/19/2007
|
SL
|
15
|
|
4.9000
|
04/26/2007
|
SL
|
2,233
|
|
4.8000
|
05/01/2007
|
BY
|
1,943
|
|
4.8316
|
05/03/2007
|
SL
|
566
|
|
4.9011
|
05/03/2007
|
SL
|
744
|
|
4.9000
|
05/04/2007
|
SL
|
2,219
|
|
4.9115
|
05/07/2007
|
SL
|
164
|
|
4.9273
|
05/07/2007
|
SL
|
2,024
|
|
4.9526
|
07/02/2007
|
BY
|
23,800
|
|
4.1000
|
07/02/2007
|
BY
|
1,395
|
|
4.0657
|
07/05/2007
|
BY
|
1,000
|
|
4.1000
|
07/06/2007
|
BY
|
24,000
|
|
4.1452
|
07/09/2007
|
BY
|
25,000
|
|
4.0982
|
07/10/2007
|
BY
|
6,200
|
|
4.0987
|
07/11/2007
|
BY
|
13,557
|
|
4.1639
|
07/11/2007
|
BY
|
1,100
|
|
4.2109
|
07/11/2007
|
BY
|
809
|
|
4.0910
|
07/12/2007
|
BY
|
1,846
|
|
4.2438
|
07/13/2007
|
BY
|
37,347
|
|
4.2388
|
07/13/2007
|
BY
|
11,962
|
|
4.2300
|
07/18/2007
|
BY
|
29,512
|
|
4.1500
|
07/20/2007
|
BY
|
10,821
|
|
4.3600
|
07/30/2007
|
BY
|
18,462
|
|
4.4000
|
07/31/2007
|
BY
|
7,202
|
|
4.4471
|
08/01/2007
|
BY
|
22,125
|
|
4.4217
|
08/01/2007
|
BY
|
3,268
|
|
4.3500
|
08/03/2007
|
BY
|
5,334
|
|
4.1216
|
08/08/2007
|
BY
|
19,450
|
|
3.8205
|
08/09/2007
|
BY
|
9,724
|
|
3.7610
|
08/13/2007
|
BY
|
10,736
|
|
3.8500
|
08/14/2007
|
BY
|
644
|
|
3.8416
|
08/15/2007
|
BY
|
2,782
|
|
3.8482
|
08/16/2007
|
BY
|
5,649
|
|
3.8149
|
08/17/2007
|
BY
|
7,780
|
|
3.7600
|
08/17/2007
|
BY
|
736
|
|
3.7949
|
08/24/2007
|
BY
|
15,560
|
|
3.6947
|
08/28/2007
|
BY
|
52,400
|
|
3.6475
|
08/29/2007
|
BY
|
22,600
|
|
3.6238
|
08/30/2007
|
BY
|
84,794
|
|
3.6500
|
08/30/2007
|
BY
|
7,780
|
|
3.8559
|
08/30/2007
|
BY
|
7,780
|
|
3.8018
|
08/30/2007
|
BY
|
7,780
|
|
3.6510
|
08/30/2007
|
BY
|
1,944
|
|
3.7900
|
09/19/2007
|
SL
|
12,519
|
|
4.2009
|
09/28/2007
|
BY
|
8,774
|
|
4.3601
|
09/28/2007
|
BY
|
8,774
|
|
4.3601
|
09/28/2007
|
BY
|
790
|
|
4.3633
|
10/04/2007
|
SL
|
10,228
|
|
4.7992
|
10/04/2007
|
SL
|
15,378
|
|
4.7992
|
10/05/2007
|
SL
|
4,951
|
|
4.8423
|
10/08/2007
|
SL
|
243
|
|
4.8034
|
10/10/2007
|
SL
|
871
|
|
4.7500
|
10/11/2007
|
SL
|
4,204
|
|
4.7500
|
10/12/2007
|
SL
|
287
|
|
4.7000
|
10/18/2007
|
SL
|
6,300
|
|
4.6386
|
10/25/2007
|
BY
|
8,496
|
|
4.5906
|
10/25/2007
|
SL
|
10,122
|
|
4.8010
|
10/26/2007
|
BY
|
4,248
|
|
4.5460
|
10/31/2007
|
BY
|
1,615
|
|
4.4263
|
10/31/2007
|
SL
|
608
|
|
4.4487
|
11/01/2007
|
BY
|
2,955
|
|
4.1991
|
11/01/2007
|
BY
|
2,955
|
|
4.1991
|
11/02/2007
|
BY
|
6,127
|
|
4.2000
|
11/02/2007
|
BY
|
6,127
|
|
4.2000
|
11/06/2007
|
BY
|
8,493
|
|
3.8754
|
11/20/2007
|
BY
|
8,270
|
|
3.4695
|
11/28/2007
|
BY
|
33,291
|
|
3.4697
|
11/28/2007
|
BY
|
33,291
|
|
3.4697
|
11/29/2007
|
BY
|
5,650
|
|
3.5569
|
12/05/2007
|
SL
|
18,730
|
|
4.0065
|
12/06/2007
|
SL
|
1,698
|
|
4.0394
|
12/06/2007
|
SL
|
14,739
|
|
4.0189
|
12/10/2007
|
SL
|
31
|
|
4.2400
|
12/11/2007
|
SL
|
4,427
|
|
4.2436
|
12/11/2007
|
SL
|
4,427
|
|
4.2436
|
12/17/2007
|
BY
|
7,796
|
|
3.8783
|
12/19/2007
|
SL
|
39,000
|
|
4.0500
|
12/27/2007
|
SL
|
11,771
|
|
4.4300
|
12/28/2007
|
BY
|
5,107
|
|
4.5900
|
01/02/2008
|
SL
|
1,504
|
|
4.6019
|
01/02/2008
|
SL
|
4,120
|
|
4.6019
|
01/02/2008
|
SL
|
5,785
|
|
4.6000
|
01/02/2008
|
SL
|
5,785
|
|
4.6000
|
01/02/2008
|
SL
|
15,848
|
|
4.6000
|
01/02/2008
|
SL
|
15,848
|
|
4.6000
|
01/04/2008
|
BY
|
7,625
|
|
4.1900
|
01/14/2008
|
SL
|
30,206
|
|
4.2000
|
01/24/2008
|
BY
|
15,637
|
|
3.3000
|
01/24/2008
|
BY
|
13,804
|
|
3.4717
|
01/24/2008
|
BY
|
3,409
|
|
3.3000
|
01/25/2008
|
BY
|
1,709
|
|
3.2900
|
02/01/2008
|
BY
|
20,492
|
|
3.6008
|
02/05/2008
|
BY
|
50,000
|
|
3.5000
|
02/06/2008
|
BY
|
33,789
|
|
3.3000
|
02/06/2008
|
BY
|
28,471
|
|
3.3000
|
03/03/2008
|
SL
|
23,500
|
|
3.2000
|
03/18/2008
|
BY
|
3,649
|
|
2.9099
|
04/01/2008
|
BY
|
28,700
|
|
2.9400
|
04/02/2008
|
BY
|
24,385
|
|
3.0079
|
04/09/2008
|
BY
|
24,380
|
|
3.0000
|
04/18/2008
|
BY
|
16,250
|
|
2.9103
|
04/18/2008
|
BY
|
16,230
|
|
2.9103
|
04/30/2008
|
BY
|
12,190
|
|
3.0400
|
04/30/2008
|
BY
|
4,876
|
|
3.0400
|
04/30/2008
|
BY
|
195
|
|
3.0500
|
05/02/2008
|
BY
|
24,908
|
|
3.0069
|
05/02/2008
|
BY
|
11,241
|
|
3.0077
|
05/05/2008
|
BY
|
24,120
|
|
3.0467
|
05/05/2008
|
BY
|
12,059
|
|
3.0944
|
05/05/2008
|
BY
|
12,059
|
|
3.0910
|
05/05/2008
|
BY
|
12,059
|
|
3.0892
|
05/06/2008
|
BY
|
14,955
|
|
3.0685
|
05/07/2008
|
BY
|
4,824
|
|
3.0739
|
05/14/2008
|
BY
|
14,376
|
|
3.1279
|
05/15/2008
|
SL
|
6,175
|
|
3.4312
|
05/15/2008
|
SL
|
6,175
|
|
3.4312
|
05/16/2008
|
SL
|
5,602
|
|
3.4297
|
05/16/2008
|
SL
|
5,602
|
|
3.4297
|
05/19/2008
|
SL
|
32,935
|
|
3.4153
|
05/29/2008
|
SL
|
3,479
|
|
3.4021
|
05/30/2008
|
BY
|
4,824
|
|
3.5380
|
05/30/2008
|
SL
|
143
|
|
3.4633
|
06/02/2008
|
BY
|
12,223
|
|
3.6419
|
06/03/2008
|
BY
|
10,598
|
|
3.5226
|
06/03/2008
|
BY
|
347
|
|
3.6200
|
06/27/2008
|
BY
|
6,283
|
|
2.9707
|
07/01/2008
|
BY
|
63,617
|
|
3.1100
|
07/01/2008
|
SL
|
63,617
|
|
3.1100
|
07/08/2008
|
BY
|
5,462
|
|
3.0919
|
07/21/2008
|
BY
|
8,301
|
|
3.0900
|
08/01/2008
|
SL
|
16,978
|
|
3.1500
|
08/22/2008
|
SL
|
16,056
|
|
3.2057
|
09/02/2008
|
BY
|
14,943
|
|
3.2400
|
10/08/2008
|
BY
|
18,817
|
|
2.2500
|
10/10/2008
|
BY
|
21,538
|
|
2.3118
|
12/10/2008
|
BY
|
13,147
|
|
1.6500
|
12/16/2008
|
BY
|
26,330
|
|
1.7104
|
12/17/2008
|
BY
|
4,393
|
|
1.5956
|
12/17/2008
|
BY
|
4,393
|
|
1.5956
|
12/19/2008
|
BY
|
410
|
|
1.5000
|
12/22/2008
|
BY
|
3,890
|
|
1.6737
|
06/22/2009
|
BY
|
1,286
|
|
2.4500
|
06/23/2009
|
BY
|
3,859
|
|
2.4184
|
06/23/2009
|
BY
|
5,557
|
|
2.3667
|
B. Riley & Co.,
LLC
Date
|
Transaction Code
|
Number of Shares of
Common Stock
Purchased or Sold
|
Price Per
Share($)
|
07/02/2008
|
BY
|
140
|
|
3.1000
|
07/02/2008
|
BY
|
112
|
|
3.0800
|
07/02/2008
|
BY
|
117
|
|
3.1200
|
07/02/2008
|
BY
|
120
|
|
3.0700
|
07/02/2008
|
BY
|
184
|
|
3.1300
|
07/02/2008
|
BY
|
170
|
|
3.1100
|
07/02/2008
|
BY
|
174
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1400
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1200
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1300
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1100
|
07/02/2008
|
BY
|
100
|
|
3.1200
|
07/02/2008
|
BY
|
100
|
|
3.1200
|
07/02/2008
|
BY
|
100
|
|
3.1200
|
07/02/2008
|
BY
|
100
|
|
3.1200
|
07/02/2008
|
BY
|
100
|
|
3.0700
|
07/02/2008
|
BY
|
100
|
|
3.0700
|
07/02/2008
|
BY
|
100
|
|
3.0700
|
07/02/2008
|
BY
|
100
|
|
3.0700
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.1000
|
07/02/2008
|
BY
|
100
|
|
3.1000
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0800
|
07/02/2008
|
BY
|
100
|
|
3.0600
|
07/02/2008
|
BY
|
95
|
|
3.1300
|
07/02/2008
|
BY
|
66
|
|
3.1300
|
07/02/2008
|
BY
|
58
|
|
3.1400
|
07/02/2008
|
BY
|
42
|
|
3.1400
|
07/02/2008
|
BY
|
17
|
|
3.1400
|
07/02/2008
|
BY
|
92
|
|
3.0600
|
07/02/2008
|
BY
|
300
|
|
3.1000
|
07/02/2008
|
BY
|
283
|
|
3.1100
|
07/02/2008
|
BY
|
205
|
|
3.1300
|
07/02/2008
|
BY
|
228
|
|
3.1200
|
07/02/2008
|
BY
|
242
|
|
3.1100
|
07/02/2008
|
BY
|
254
|
|
3.1100
|
07/02/2008
|
BY
|
200
|
|
3.0800
|
07/02/2008
|
BY
|
200
|
|
3.1000
|
07/02/2008
|
BY
|
200
|
|
3.1000
|
07/02/2008
|
BY
|
7099
|
|
3.1070
|
07/10/2008
|
BY
|
7099
|
|
3.0300
|
10/02/2008
|
BY
|
7099
|
|
2.8529
|
12/16/2008
|
BY
|
55750
|
|
1.6999
|
12/16/2008
|
BY
|
50
|
|
1.7000
|
12/16/2008
|
SL
|
55750
|
|
1.7000
|
12/17/2008
|
BY
|
38
|
|
1.6000
|
12/18/2008
|
BY
|
462
|
|
1.4800
|
12/18/2008
|
BY
|
100
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
400
|
|
1.5500
|
12/18/2008
|
BY
|
500
|
|
1.5500
|
12/19/2008
|
SL
|
62
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5500
|
12/19/2008
|
SL
|
300
|
|
1.5500
|
12/19/2008
|
SL
|
300
|
|
1.5500
|
12/19/2008
|
SL
|
800
|
|
1.5500
|
12/19/2008
|
SL
|
1300
|
|
1.5500
|
12/19/2008
|
SL
|
100
|
|
1.5600
|
12/19/2008
|
SL
|
100
|
|
1.5600
|
12/19/2008
|
SL
|
100
|
|
1.5600
|
12/19/2008
|
SL
|
100
|
|
1.5600
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/19/2008
|
SL
|
100
|
|
1.5700
|
12/29/2008
|
SL
|
88
|
|
1.7300
|
02/02/2009
|
BY
|
100
|
|
2.1500
|
02/02/2009
|
SL
|
200
|
|
2.1500
|
02/03/2009
|
BY
|
100
|
|
2.1200
|
DIALECTIC CAPITAL
MANAGEMENT, LLC
None
JOHN
FICHTHORN
None
LUKE
FICHTHORN
None
J. MICHAEL
GULLARD
None
KENNETH
POTASHNER
None
BRYANT
RILEY
None
SCHEDULE
II
The
following table is reprinted from CMD’s proxy statement filed with
the
Securities
and Exchange Commission on July 23, 2009.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth certain information with respect to the beneficial
ownership of the Company’s Common Stock as of July 20, 2009, by (i) each person
(or group of affiliated persons) who is known by the Company to own beneficially
5% or more of the Company’s Common Stock; (ii) each of the Company’s directors;
(iii) the Named Executive Officers (as defined under “Executive Compensation” in
the Company’s proxy statement); and (iv) all directors and executive officers as
a group. Except as otherwise noted and subject to community property laws, the
persons or entities in this table have sole voting and investment power with
respect to all the shares of Common Stock beneficially owned by them. Also
except as otherwise noted, the address of each such person or entity is 490
North McCarthy Boulevard, #100, Milpitas, California 95035. Beneficial ownership
is determined in accordance with the rules and regulations of the Securities and
Exchange Commission. In computing the number of shares beneficially owned by
each person and the percentage ownership of that person, shares of Common Stock
subject to options held by that person that are currently exercisable or
exercisable within 60 days of July 20, 2009, are deemed outstanding. These
shares, however, are not deemed outstanding for the purpose of computing the
percentage ownership of any other person. The number of Company shares
outstanding as of July 20, 2009, was 22,917,914.
Beneficial
Owner(1)
|
|
Shares
Beneficially
Owned
|
|
|
|
|
GAMCO
Investors(2)
One
Corporate Center
RYE,
New York, NY 10580-1434
|
|
|
2,184,950
|
|
|
|
9.53
|
%
|
Dialectic
Capital Management, LLC(3)
153
East 53rd Street, 29th Floor
New
York, NY 10022
|
|
|
2,006,000
|
|
|
|
8.75
|
%
|
Dimensional
Fund Advisors(4)
1299
Ocean Avenue
Santa
Monica, CA 90401
|
|
|
1,727,965
|
|
|
|
7.54
|
%
|
T.
Rowe Price Associates, Inc.(5)
P.O.
Box 17630
Baltimore,
MD 21297-1630
|
|
|
1,669,900
|
|
|
|
7.29
|
%
|
RiverSource
Investments LLC(6)
50210
Ameriprise Financial Center
Minneapolis,
MN 55474
|
|
|
1,155,300
|
|
|
|
5.04
|
%
|
Robert
V. Dickinson(7)
|
|
|
929,812
|
|
|
|
3.90
|
%
|
Kevin
J. Berry(8)
|
|
|
179,750
|
|
|
|
*
|
|
Kyle
D. Baker(9)
|
|
|
338,775
|
|
|
|
1.46
|
%
|
Daniel
Hauck(10)
|
|
|
56,250
|
|
|
|
*
|
|
Juergen
Lutz(11)
|
|
|
225,000
|
|
|
|
*
|
|
Manuel
Mere(12)
|
|
|
238,402
|
|
|
|
1.03
|
%
|
Wade
F. Meyercord(13)
|
|
|
113,950
|
|
|
|
*
|
|
Jon
S. Castor
|
|
|
0
|
|
|
|
*
|
|
Dr. Edward C.
Ross(14)
|
|
|
61,000
|
|
|
|
*
|
|
Dr. David W.
Sear(15)
|
|
|
59,500
|
|
|
|
*
|
|
Dr. John L.
Sprague(16)
|
|
|
90,500
|
|
|
|
*
|
|
David
L. Wittrock(17)
|
|
|
53,500
|
|
|
|
*
|
|
Directors
and Executive Officers as a group (12 persons)(18)
|
|
|
2,346,439
|
|
|
|
9.29
|
%
|
__________
* Less
than 1%.
(1)
|
Except
as noted below, based solely upon information furnished by such
individuals or contained in filings made by such beneficial owners with
the Securities and Exchange
Commission.
|
(2)
|
Information
based on a Form 13D filed with the SEC on March 25, 2009, as amended on
June 2, 2009, by Mario Gabelli (“Gabelli”), Gabelli Funds, LLC (“G
Funds”), Teton Advisors, Inc. (“Teton”), and GAMCO Asset Management Inc.
(“Gamco”) and on a Form 13F-HR filed with the SEC by Gamco et al. on May
15, 2009 for its holdings as of March 31, 2009. Gamco has the sole
dispositive power over 1,199,300 of these shares and sole voting power
over 1,074,300 of these shares. G Funds has sole dispositive and voting
power over 660,000 of these shares, and Teton has sole dispositive and
voting power over 325,650 of these shares. Gabelli is deemed to have
beneficial ownership over the shares beneficially owned by Gamco, Teton
and G Funds.
|
(3)
|
Information
based on a Form 13D/A filed with the SEC by Dialectic Capital Management,
LLC (“Dialectic”), John and Luke Fichthorn (the “Fichthorns”), and other
persons on March 6, 2009, as updated by a Form 13-HR/A filed by Dialectic
on May 20, 2009, for its holdings as of March 31, 2009. In the Form 13D/A
it was indicated that Dialectic and the Fichthorns had shared voting and
dispositive power over all 2,006,000 of the shares beneficially owned by
Dialectic while in the Form 13F-HR/A it was indicated that Dialectic has
sole voting and dispositive power over 1,079,555 of these shares and an
associated investment manager, Dialectic Antithesis Offshore, Ltd., has
shared voting power over 926,445 of these shares. The Fichthorns disclaim
beneficial ownership in these shares except to the extent of their
pecuniary interest in
Dialectic.
|
(4)
|
Information
based on a Form 13G filed with the SEC on February 9, 2009, by Dimensional
Fund Advisors LP (“Dimensional”), a registered investment advisor, which
serves as an institutional investment advisor or manager to various
investment funds as updated by a Form 13F-HR filed with the SEC on May 8,
2009, by Dimensional for its holdings as of March 31, 2009. The filings
indicated that Dimensional had dispositive authority over 1,727,965 shares
along with Dimensional Fund Advisors Ltd., also a registered investment
advisor, and that Dimensional had sole voting authority over 1,697,365
shares. Dimensional disclaims beneficial ownership of these
shares.
|
(5)
|
Information
based on a Schedule 13G/A filed with the SEC by T. Rowe Price Associates,
Inc. (“T. Rowe Price Associates”) and T. Rowe Price Small-Cap Value Fund,
Inc. (“T. Rowe Price Fund”) on February 12, 2009, as updated by Schedule
13F-HR filed with the SEC by T. Rowe Price Associates on May 14, 2009, for
its holdings as of March 31, 2009. T. Rowe Price Associates, which serves
as investment adviser, has the power to direct investments and/or sole
power to vote the shares owned by T. Rowe Price Fund, as well as shares
owned by certain other individual and institutional investors. T. Rowe
Price Fund has sole voting power over 1,600,000 of these shares and T.
Rowe Price Associates has sole voting power of 69,900 of these shares and
sole dispositive power over all 1,669,900 of these shares. For purposes of
the reporting requirements of the Securities Exchange Act of 1934, T. Rowe
Price Associates may be deemed to be the beneficial owner of these
1,669,900 shares, including the shares owned by T. Rowe Price Fund, of
which T. Rowe Price Associates expressly disclaims beneficial ownership.
T. Rowe Price Associates is a wholly owned subsidiary of T. Rowe Price
Group, Inc., which is a publicly traded financial services holding
company.
|
(6)
|
Information
based on a Schedule 13F-HR filed with the SEC on May 12, 2009 for its
holdings as of March 31, 2009, by Ameriprise Financial, Inc., with
RiverSource Investments LLC as an included fund manager on the filing. The
filing stated that there was sole dispositive authority over all 1,155,300
of these shares and voting power over none of these
shares.
|
(7)
|
Consists
of 22,000 shares held by The Dickinson Family 1984 Trust, for which Mr.
and Mrs. Dickinson are trustees, and 907,812 shares subject to options
exercisable within 60 days of July 20,
2009.
|
(8)
|
Includes
173,750 shares subject to options exercisable within 60 days of July 20,
2009.
|
(9)
|
Includes
336,775 shares subject to options exercisable within 60 days of July 20,
2009.
|
(10)
|
Includes
56,250 shares subject to options exercisable within 60 days of July 20,
2009.
|
(11)
|
Includes
225,000 shares subject to options exercisable within 60 days of July 20,
2009.
|
(12)
|
Includes
235,150 shares subject to options exercisable within 60 days of July 20,
2009.
|
(13)
|
Includes
82,500 shares subject to options exercisable within 60 days of July 20,
2009.
|
(14)
|
Includes
57,500 shares subject to options exercisable within 60 days of July 20,
2009.
|
(15)
|
Includes
57,500 shares subject to options exercisable within 60 days of July 20,
2009.
|
(16)
|
Includes
82,500 shares subject to options exercisable within 60 days of July 20,
2009.
|
(17)
|
Includes
43,500 shares subject to options exercisable within 60 days of July 20,
2009.
|
(18)
|
Includes
2,258,237 shares subject to options exercisable within 60 days of July 20,
2009.
|
IMPORTANT
Tell your
Board what you think! Your vote is important. No matter how many
Shares you own, please give the Dialectic Group your proxy FOR the election of
the Dialectic Nominees by taking three steps:
|
●
|
SIGNING
the enclosed
GOLD
proxy card,
|
|
|
|
|
●
|
DATING
the enclosed
GOLD
proxy card, and
|
|
|
|
|
●
|
MAILING
the enclosed
GOLD
proxy card TODAY in the envelope provided (no postage is required if
mailed in the United States).
|
If any of
your Shares are held in the name of a brokerage firm, bank, bank nominee or
other institution, only it can vote such Shares and only upon receipt of your
specific instructions. Accordingly, please contact the person
responsible for your account and instruct that person to execute the
GOLD
proxy card representing
your Shares. The Dialectic Group urges you to confirm in writing your
instructions to the Dialectic Group in care of Okapi Partners at the address
provided below so that the Dialectic Group will be aware of all instructions
given and can attempt to ensure that such instructions are
followed.
If you
have any questions or require any additional information concerning this Proxy
Statement, please contact Okapi Partners at the address set forth
below.
Okapi
Partners
780
Third Avenue, 30th Floor
New
York, NY 10017
Stockholders Call Toll-Free at:
(
877
)
285-5990
Banks
and Brokers Call Collect at: (212) 297-0720
info@okapipartners.com
GOLD
PROXY CARD
PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED
JULY 24, 2009
CALIFORNIA
MICRO DEVICES CORPORATION
2009
ANNUAL MEETING OF STOCKHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF THE DIALECTIC GROUP
THE
BOARD OF DIRECTORS OF CALIFORNIA MICRO DEVICES CORPORATION
IS
NOT SOLICITING THIS PROXY
P R O X Y
The
undersigned appoints John Fichthorn and Luke Fichthorn, and each of them,
attorneys and agents with full power of substitution to vote all shares of
common stock of California Micro Devices Corporation (“CMD” or the “Company”)
which the undersigned would be entitled to vote if personally present at the
2009 Annual Meeting of Stockholders of the Company scheduled to be held on
Thursday, September 17, 2009
at
2:00 p.m., at the McCarthy
Conference Center, 690 North McCarthy Boulevard, Milpitas,
California
,
including any adjournments or postponements thereof
and any meeting which may be called in lieu thereof (the “Annual
Meeting”).
The
undersigned hereby revokes any other proxy or proxies heretofore given to vote
or act with respect to the shares of common stock of the Company held by the
undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this Proxy will be voted as
directed on the reverse and in the discretion of the herein named attorneys and
proxies or their substitutes with respect to any other matters as may properly
come before the Annual Meeting that are unknown to the Dialectic Group a
reasonable time before this solicitation.
IF
NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED “FOR” PROPOSALS 1, 2 AND 3.
This
Proxy will be valid until the sooner of one year from the date indicated on the
reverse side and the completion of the Annual Meeting.
IMPORTANT: PLEASE
SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
[X]
Please mark vote as in this
example
THE
DIALECTIC GROUP STRONGLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” THE NOMINEES
LISTED BELOW IN PROPOSAL NO. 1
Proposal No.
1 – The Dialectic Group’s Proposal to elect John Fichthorn, J. Michael Gullard
and Kenneth Potashner as Directors of the Company.
|
FOR
ALL
NOMINEES
|
WITHHOLD
AUTHORITY
TO
VOTE
FOR ALL
NOMINEES
|
FOR
ALL
NOMINEES
EXCEPT
|
|
|
|
|
Nominees:
John Fichthorn
J.
Michael Gullard
Kenneth
Potashner
|
[ ]
|
[ ]
|
[ ]
|
THE
DIALECTIC GROUP INTENDS TO USE THIS PROXY TO VOTE (I) “FOR” MESSRS. FICHTHORN,
GULLARD AND POTASHNER AND (II) “FOR” THE CANDIDATES WHO HAVE BEEN NOMINATED BY
THE COMPANY TO SERVE AS DIRECTORS OTHER THAN _______, __________ AND _________,
FOR WHOM THE DIALECTIC GROUP IS NOT SEEKING AUTHORITY TO VOTE FOR AND WILL NOT
EXERCISE ANY SUCH AUTHORITY. THE NAMES, BACKGROUNDS AND
QUALIFICATIONS OF THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY, AND
OTHER INFORMATION ABOUT THEM, CAN BE FOUND IN THE COMPANY’S PROXY
STATEMENT.
THERE IS
NO ASSURANCE THAT ANY OF THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY
WILL SERVE AS DIRECTORS IF THE DIALECTIC GROUP’S NOMINEES ARE
ELECTED.
NOTE: IF
YOU DO NOT WISH FOR YOUR SHARES TO BE VOTED “FOR” A PARTICULAR DIALECTIC
NOMINEE, MARK THE “FOR ALL NOMINEES EXCEPT” BOX AND WRITE THE NAME OF THE
NOMINEE YOU DO NOT SUPPORT ON THE LINE BELOW. YOUR SHARES WILL BE
VOTED FOR THE REMAINING DIALECTIC NOMINEE. YOU MAY ALSO WITHHOLD
AUTHORITY TO VOTE FOR ONE OR MORE ADDITIONAL CANDIDATES WHO HAVE BEEN NOMINATED
BY THE COMPANY BY WRITING THE NAME OF THE NOMINEE(S) BELOW.
_______________________________________________________________
THE
DIALECTIC GROUP DOES NOT OBJECT TO PROPOSAL NO. 2
Proposal
No. 2 – The Company’s proposal to ratify the selection of Grant
Thornton LLP as the Company’s independent registered public accountants for the
fiscal year ending March 31, 2010.
|
o
FOR
|
|
o
AGAINST
|
|
o
ABSTAIN
|
THE
DIALECTIC GROUP RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” PROPOSAL NO.
3
Proposal
No. 3 – The Company’s proposal to amend the 1995 Employee Stock Purchase Plan to
increase the total number of shares reserved for issuance thereunder by 200,000
shares from 1,940,000 shares to 2,140,000 shares.
|
o
FOR
|
|
o
AGAINST
|
|
o
ABSTAIN
|
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature,
if held jointly)
____________________________________
(Title)
WHEN
SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH
SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS
PROXY.