Saturday, August 15, 2009

California Micro Devices - Proxy Materials

Escalation of Proxy fight: "Dissident stockholder Dialectic Capital Management is seeking your support for its own slate of three nominees. Dialectic, however, has presented no plan to build stockholder value and seems confused, at best, about what strategy it thinks the company should pursue. As Dialectic accumulated CMD stock, Dialectic made repeated demands that we rejected time and time again – distribute significant cash to stockholders via repurchase or dividend. When Dialectic first became more active as a dissident in December, 2008, it called for CMD to “return $33 million or $1.42 a share in a dividend to all stockholders and immediately engage an investment bank and begin a sale process of the Company.” We believe these demands, which we again rejected, reflect a “quick buck” approach and indicate Dialectic’s ignorance of both the underlying value of CMD and the need for CMD to retain substantial cash reserves to demonstrate its staying power to its customers.........Since it has no plan to offer, Dialectic can only ask that you trust the experience and qualifications of its nominees. We think you should know some very pertinent facts about their qualifications and experience that Dialectic failed to mention when seeking your trust. When Dialectic told you that nominee Kenneth Potashner “has over 20 years of experience as a successful technology company executive,” and cited his experience at SONICblue Incorporated, it deliberately did not mention that Mr. Potashner was terminated as Chairman, President and CEO of SONICblue just seven and a half months before the company filed for bankruptcy . While Mr. Potashner was CEO, the company was embroiled in legal battles with one or more competitors, consultants, and suppliers, and with 28 film and broadcasting companies......Another Dialectic nominee, J. Michael Gullard, has served on several public company boards and in many instances shareholder value has declined during his tenure. He served on the boards of two companies, DynTek Inc. and Proxim Wireless Corp., when those companies became delisted from their respective exchanges . During Mr. Gullard’s tenure as a director at Planar Systems and Proxim Wireless Corp., each company lost over 80% of its value, as of July 31, 2009. Additionally, after adjusting for intervening cumulative 1:10,000 reverse stock splits, the share price of DynTek Inc., of which Mr. Gullard has been Chairman of the Board since October, 2005, has fallen from $3,000 on the OTCBB to $7.95 on the Pink Sheets since June 27, 2005, when he first joined the DynTek Inc. Board."