Proxy battle sees CMD hit back

SAN JOSE: California Micro Devices Inc. (CMD) is currently going through a peculiar period with a bitter proxy battle raging. It all started when investment company Dialectic Capital Management had sent letters to the stockholders of CMD, blasting the chip maker for its ''poor corporate governance”.

Interestingly, Dialectic has also said it is the second largest stockholder in CMD and owns 2,025,011 shares. This according to the investment firm is close to 8.8 percent of that company's outstanding common stock.

Calling upon the chip making company to elect three of its own directors, Dialectic had been a major issue for CMD. Not to be bogged down, the chip maker has decided to fight back and as the first step it has urged shareholders to re-elect all the nominees of its board.



The call came via a letter sent by Wade Meyercord, chairman of CMD, to shareholders. Meyercord said in the letter that the “board believes that the continued execution of CMD's clear action plan is in the best interests of the company and its stockholders and provides the greatest opportunity to create long-term stockholder value.''

Besides blasting Dialectic's allegations, CMD has also clarified that the investment firm is misleading shareholders. As per the letter, Meyercord said: ''We believe that Dialectic is insinuating that it would like to put the company up for sale, a belief bolstered by Dialectic's continued silence on its strategy for CMD.

While the board is open to all paths to increased stockholder value, we firmly believe that now is not the right time to pursue a sale process.''