NEW YORK--(BUSINESS WIRE)--Dialectic Capital Partners, LP (“Dialectic”), an affiliate of Dialectic Capital Management, LLC (“Dialectic Capital”), announced today that it has nominated four highly qualified director nominees for election to the Board of Directors (the “Board”) of California Micro Devices Corporation (the “Company” or “CMD”) (Nasdaq:CAMD) to replace four directors whose terms are up for election at the Company’s 2009 Annual Meeting of Stockholders (the “Annual Meeting”). Dialectic Capital, which, together with the nominees, beneficially owns an aggregate of 2,006,000 shares, or approximately 8.5% of the outstanding shares of common stock of the Company, delivered written notice, dated March 4, 2009, of its nomination to the Corporate Secretary of the Company in accordance with the Company’s bylaws.
After Dialectic’s repeated attempts to engage in a constructive dialogue were ignored by the incumbent Board, Dialectic has come to the conclusion that the nomination of an alternative slate of directors is the only viable option left to maximize stockholder value, which Dialectic believes has suffered significant deterioration at the hands of the current Board. Consistent with views previously communicated by Dialectic representatives in various public forums, Dialectic believes that the Board lacks in accountability to its stockholders and that management’s incentives are not aligned with stockholders’ interests. Furthermore, Dialectic believes that the Company’s operational and capital allocation strategies are misguided, and that the Company cannot afford to consummate another risky acquisition while supporting a business that has never consistently earned an acceptable return on capital.
Dialectic’s nominees, consistent with their fiduciary duties, are committed to enhancing long-term stockholder value while returning excess capital to stockholders after thoroughly reviewing CMD’s strategic alternatives, including the potential sale of the protection and silicon businesses. Importantly, Dialectic’s nominees recognize the challenges of the current M&A market and will not settle for depressed valuations for the sake of realizing an immediate liquidity event. Instead, Dialectic’s nominees are prepared to work cohesively with management until such time that a transaction is determined to be in the best interests of all stockholders.
John Fichthorn, Dialectic’s managing member, stated, “We have assembled a highly qualified slate of directors that will return a sense of accountability to the boardroom as well as provide a fresh perspective on the Company’s operations. Each director will bring proven financial and operational expertise necessary to realign CMD’s cost structure, review capital allocation opportunities, oversee management’s execution and objectively review all strategic alternatives.” Fichthorn continued, “Dialectic has been a 5% holder since September 2007. Having watched CMD’s enterprise value fall below zero without the Board taking decisive action to improve shareholder value, we believe that an immediate change in leadership is warranted.”
Historical shortcomings that Dialectic believes are directly attributable to the incumbent Board include:
Stockholders can refer to Dialectic’s previous SEC filings for additional information.
The Company currently has a total of six directors. Dialectic is seeking to replace four incumbent directors whose terms of office expire at the Annual Meeting.
Dialectic’s four independent director nominees will bring substantial business leadership and corporate governance expertise to the Company’s Board. The nominees are:
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Dialectic Capital Partners, LP (“Dialectic”), together with the other participants named below, intends to make a preliminary filing with the Securities and Exchange Commission (“SEC”) of a proxy statement and an accompanying GOLD proxy card to be used to solicit votes for the election of its slate of nominees at the 2009 Annual Meeting of Stockholders of California Micro Devices Corporation (the “Company”).
DIALECTIC STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PRELIMINARY PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PRELIMINARY PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.
The participants in the proxy solicitation are Dialectic, Dialectic Capital Management, LLC (“DCM”), Dialectic Offshore, Ltd. (“DOF”), Dialectic Antithesis Partners, LP (“DAP”), Dialectic Antithesis Offshore, Ltd. (“DAO”), John Fichthorn, Luke Fichthorn, Bryant Riley, J. Michael Gullard and Kenneth Potashner (the “Group”). As of March 6, 2009, (i) DCM beneficially owned 2,006,000 shares of common stock of the Company (the “Shares”), constituting approximately 8.5% of the Shares outstanding, (ii) Dialectic beneficially owned 317,715 Shares, constituting approximately 1.3% of the Shares outstanding, (iii) DOF beneficially owned 186,221 Shares, constituting approximately 0.8% of the Shares outstanding, (iv) DAP beneficially owned 575,619 Shares, constituting approximately 2.4% of the Shares outstanding, (v) DAO beneficially owned 926,445 Shares, constituting approximately 3.9% of the Shares outstanding, (vi) John Fichthorn beneficially owned 2,006,000 Shares, constituting approximately 8.5% of the Shares outstanding, (vii) Luke Fichthorn beneficially owned 2,006,000 Shares, constituting approximately 8.5% of the Shares outstanding, (viii) Bryant Riley beneficially owned 14,198 Shares, constituting approximately 0.1% of the Shares outstanding, and (ix) J. Michael Gullard and Kenneth Potashner did not directly own any Shares. DCM is the investment manager of Dialectic, DOF, DAP and DAO and has shared power to vote or direct the vote and shared power to dispose or direct the disposition of the Shares held by such entities. John Fichthorn and Luke Fichthorn act as the managing members of DCM and, as a result, each of John Fichthorn and Luke Fichthorn may be deemed to control such entity and to have a beneficial interest in the Shares beneficially owned by DCM. However, each member of the Group, as members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, may be deemed to beneficially own the Shares owned in the aggregate by the other members of the Group. Each member of the Group disclaims beneficial ownership of the Shares he/it does not directly own.