The SST
Full Value Committee (the “Committee”), together with the other participants
named herein, intends to make a preliminary filing with the Securities and
Exchange Commission of a proxy statement and accompanying proxy card to be used
to solicit votes against approval of the Agreement and Plan of Merger, dated as
of November 13, 2009, among Technology Resources Holdings, Inc., Technology
Resources Merger Sub, Inc. and Silicon Storage Technology, Inc., a California
corporation (the “Company”), at a special meeting of shareholders of the
Company.
On
January 4, 2010, the Committee issued the following press release:
SST
FULL VALUE COMMITTEE URGES THE BOARD OF SILICON STORAGE
TECHNOLOGY
TO IMMEDIATELY RECONSIDER ITS DECISION TO BE
ACQUIRED
BY MEMBERS OF ITS OWN MANAGEMENT TEAM AND
TECHNOLOGY
RESOURCES HOLDINGS.
SST
FULL VALUE COMMITTEE STATES IT WILL VOTE AGAINST THE PRESENT MERGER
New
York, NY, January 4, 2010– The SST Full
Value Committee (the “Committee”) announced today that it has sent a letter to
the Board of Directors (the “Board”) of Silicon Storage Technology, Inc.
(Nasdaq: SSTI) (the “Company” or “SSTI”) urging the Board to immediately
reconsider its decision to move forward with the acquisition of the Company by
members of SSTI’s own management team in concert with Technology Resources
Holdings. The Committee intends to solicit against the proposed
merger and take such other action as it deems necessary to protect the interests
of all shareholders if the Board determines to move forward with the merger and
does not withdraw its proxy materials to solicit shareholder
approval. The members of the Committee are significant shareholders
of the Company and collectively own 12,548,094 shares of SSTI or approximately
13.1% of the shares outstanding as of October 31, 2009.
The full
text of the letter follows:
BY FACSIMILE AND
MAIL
The Board
of Directors
Silicon
Storage Technology, Inc.
1020
Kifer Road
Sunnyvale,
California 94086
Dear
Members of the Board:
Riley
Investment Management, LLC, Bryant R. Riley, Dialectic Capital Partners LP,
Dialectic Offshore, Ltd., Dialectic Antithesis Partners, LP, Dialectic
Antithesis Offshore, Ltd., Dialectic Capital Management, LLC, John Fichthorn,
Luke Fichthorn, and Lloyd I. Miller, III are significant shareholders of Silicon
Storage Technology, Inc. (the “Company”). We have formed The SST Full
Value Committee (the “Committee”) in opposition to the Board of Directors’ (the
“Board”) decision to enter into a going-private transaction and merger agreement
with Technology Resources Holdings, Inc. and Technology Resources Merger Sub,
Inc. (the “Merger Agreement”).
To make
our position perfectly clear, the Committee is deeply concerned with the Board’s
decision to be acquired by Technology Resources Holdings, Inc. and members of
the Company’s management team, including the Company’s Chairman and Chief
Executive Officer and Chief Operating Officer. The Committee believes
the proposed merger consideration is at a significant discount to tangible book
value at a time when the semiconductor industry is emerging from a multi-year
recession. In the Committee’s opinion, the proposed price to be paid
per share is inadequate for shareholders and there are more favorable strategic
opportunities available to enhance shareholder value than this ill-conceived
transaction that appears to only benefit management. Among other
things, the Committee believes that significantly better value can be realized
if the Company focuses on maximizing its lucrative licensing stream while
simultaneously minimizing the losses in its products business.
The
Committee urges the Board to immediately reconsider its decision to move forward
with the Merger Agreement. If the Board determines to move forward
with the Merger Agreement and does not withdraw its proxy materials to solicit
shareholder approval, the Committee intends to solicit against the proposed
merger and take such other action as it deems necessary to protect the interests
of all shareholders.
The
Committee also believes the Company would benefit from the immediate addition of
new independent directors who will represent the interests of shareholders, the
true owners of the Company, and fully explore all ways to maximize value for all
shareholders. We would welcome the opportunity to meet with the Special
Committee to discuss our concerns and how the Company intends to address
them.
Respectfully
submitted,
The SST
Full Value Committee
CERTAIN
INFORMATION CONCERNING PARTICIPANTS
The SST
Full Value Committee (the “Committee”), together with the other participants
named herein, intends to make a preliminary filing with the Securities and
Exchange Commission (“SEC”) of a proxy statement and accompanying proxy card to
be used to solicit votes against approval of the Agreement and Plan of Merger,
dated as of November 13, 2009, among Technology Resources Holdings, Inc.,
Technology Resources Merger Sub, Inc. and Silicon Storage Technology, Inc., a
California corporation (the “Company”), at a special meeting of shareholders of
the Company.
THE
COMMITTEE ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE 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 THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES
SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The
participants in this proxy solicitation are the Committee, Riley Investment
Management LLC (“RIM”), Bryant R. Riley, Dialectic Capital Partners
LP (“DCP”), Dialectic Offshore, Ltd. (“DOF”), Dialectic Antithesis Partners, LP
(“DAP”), Dialectic Antithesis Offshore, Ltd. (“DAO”), Dialectic Capital
Management, LLC (“DCM”), John Fichthorn, Luke Fichthorn and Lloyd I. Miller,
III.
As of the
close of business on December 31, 2009, RIM beneficially owned 2,715,489 shares
of Common Stock held in certain managed accounts of its investment advisory
clients. Mr. Riley (as the manager and owner of all of the
outstanding membership interests of RIM) is deemed to be the beneficial owner of
the 2,715,489 shares of Common Stock beneficially owned by RIM.
As of the
close of business on December 31, 2009, DCP beneficially owned 662,718 shares of
Common Stock, DOF beneficially owned 457,923 shares of Common Stock, DAP
beneficially owned 1,793,792 shares of Common Stock and DAO beneficially owned
2,526,303 shares of Common Stock. 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)
662,718 shares of Common Stock owned by DCP, (ii) 457,923 shares of Common Stock
owned by DOF, (iii) 1,793,792 shares of Common Stock owned by DAP and (iv)
2,526,303 shares of Common Stock owned by DAO.
As of the
close of business on December 31, 2009, Mr. Miller directly owned 1,485,269
shares of Common Stock. Mr. Miller (as the (i) investment advisor to
the trustee of Trust A-4; (ii) manager of Milfam LLC, the general partner of
Milfam II L.P. (“Milfam II”); (iii) custodian to the Alex UGMA created pursuant
to the Florida Uniform Gift to Minors Act; (iv) grantor, trustee and/or
co-trustee for the generation skipping trusts: (a) Catherine Miller GST, (b)
Kimberly Miller GST, (c) Lloyd I. Miller GST and (d) Lloyd Crider GST; and (v)
grantor and co-trustee for a trust in favor of Alexandra Miller and Lloyd I.
Miller, IV (“KSMTR”)) is deemed to be the beneficial owner of the (i) 2,265,224
shares of Common Stock owned by Trust A-4, (ii) 2,001,050 shares of Common Stock
owned by Milfam II, (iii) 12,436 shares of Common Stock owned by the Alex UGMA,
(iv) 219,667 shares of Common Stock owned by Catherine Miller GST, (v) 100,000
shares of Common Stock owned by Kimberly Miller GST, (vi) 175,000 shares of
Common Stock owned by Lloyd I. Miller GST, (vii) 262,565 shares of Common Stock
owned by Lloyd Crider GST and (viii) 135,882 shares of Common Stock owned by
KSMTR.
The
Committee excludes for all purposes related to the Committee and its
activities, the (i) 2,265,224 shares of Common Stock held by Trust A-4 and
reported by Lloyd I. Miller III on Schedule 13D and (ii) 409,876 shares of
Common Stock held by RIM’s investment advisory clients over which RIM has shared
voting and dispositive power and reported by RIM and Mr. Riley on Schedule 13D.
With respect to the shares held by Trust A-4, Mr. Miller agrees to take
commercially reasonable efforts, consistent with his duties and responsibilities
as an investment advisor and otherwise consistent with applicable law, to
recommend to the trustee that the trustee vote the shares held by Trust
A-4 in accordance with the recommendations of the Committee.
As
members of a “group” for the purposes of Rule 13d-5(b)(1) of the Securities
Exchange Act of 1934, as amended, each of the participants in this proxy
solicitation is deemed to beneficially own the shares of Common Stock of the
Company beneficially owned in the aggregate by the other
participants. Each of the participants in this proxy solicitation
disclaims beneficial ownership of such shares of Common Stock except to the
extent of his or its pecuniary interest therein.