8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report: January 19, 2010

(Date of earliest event reported)

California Micro Devices Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-15449	94-2672609
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

490 N. McCarthy Blvd., No. 100, Milpitas, CA 95035-5112

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 263-3214

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On January 20, 2010, California Micro Devices Corporation (the “Company” or “California Micro Devices”) issued a press release announcing that on January 19, 2010 it entered into a memorandum of understanding with plaintiffs’ counsel and the other named defendants to settle the following purported class action lawsuits (the “Lawsuits”) that were filed following the announcement of the pending offer (the “Offer”) made by ON Semiconductor Corporation (“ON Semiconductor”) and its indirect, wholly-owned subsidiary Pac-10 Acquisition Corporation (“Purchaser”), to acquire the Company’s outstanding common stock at $4.70 per share to be followed by a back-end merger: Robert Varrenti v. Robert Dickinson, et al., filed on December 17, 2009 in the Superior Court of California, Santa Clara County; Annamarie Medeiros et al. v. California Micro Devices Corporation, et al., filed on December 21, 2009 in the Court of Chancery in the State of Delaware; and Sanjay Israni, et al. v. California Micro Devices, et al., filed on January 4, 2010 in the Court of Chancery in the State of Delaware. The Lawsuits are described in greater detail in the Solicitation/Recommendation Statement on Schedule 14D-9 initially filed by the Company with the Securities and Exchange Commission (the “SEC”) on December 28, 2009, and amended on January 6, 2010 and January 13, 2010 (as amended, the “Schedule 14D-9”).

Copies of the memorandum of understanding and press release are attached hereto as Exhibit 10.1 and Exhibit 99.1, respectively, and are incorporated herein by reference.

Under the terms of the Agreement and Plan of Merger governing the Offer, the settlement is subject to the approval of ON Semiconductor, which may not be unreasonably withheld or delayed. ON Semiconductor has given its approval to the settlement described by the memorandum of understanding.

Under the terms of the memorandum of understanding, the Company, the other named defendants (including the Company’s directors) and the plaintiffs have agreed to settle the Lawsuits, subject to court approval. As part of the settlement, the defendants deny all allegations of wrongdoing and deny that the previous disclosures were inadequate but the Company agreed to make available certain additional information to its stockholders in an amendment to the Schedule 14D-9 that the Company is concurrently filing with the SEC. This additional information is also set forth below in Item 8.01 of this Form 8-K. The memorandum of understanding further contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to members of the proposed settlement class. If finally approved by the court, the settlement will resolve all of the claims that were or could have been brought on behalf of the proposed settlement class in the action being settled, including all claims relating to the Offer, the merger, the Merger Agreement, the adequacy of the merger consideration, the negotiations preceding the Merger Agreement, the adequacy and completeness of the disclosures made in connection with the Offer and the merger and any actions of the individual defendants in connection with the Offer, the merger or the Merger Agreement, including any alleged breaches of the fiduciary duties of any of the defendants, or the aiding and abetting thereof. If the court does approve of the settlement after a notice period, then all public stockholders who did not elect to opt out of such settlement will be bound thereby. In addition, in connection with the settlement and as provided in the memorandum of understanding, and subject to approval by the court, the Company or its insurer will pay to plaintiffs’ counsel for their fees and expenses an amount not to exceed $495,000. This payment will not affect the amount of consideration to be paid to stockholders of the Company in connection with the Offer and the subsequent merger. Furthermore, any payment is also conditioned on the Offer being consummated so the Company’s stockholders will not indirectly bear such payment.

The Company and the other defendants maintain that the lawsuits are completely without merit. Nevertheless, in order to avoid costly litigation and eliminate the risk of any delay to the closing of the Offer and subsequent merger, and because the only effect of the settlement on the stockholders is to provide additional disclosure, the defendants have agreed to the settlement contemplated in the memorandum of understanding.

Item 8.01. Other Events.

The disclosure under Item 1.01 of this Form 8-K is incorporated herein by reference. Following is the additional information the Company is making available to its stockholders in an amendment to the Schedule 14D-9 that the Company is concurrently filing with the SEC.

1. The following sets forth additional disclosure to be included under the subheading entitled “Background of the Offer” in Item 4(b) of the Schedule 14-D9 (“Background and Reasons for the Recommendation”):

The management of the Company primarily involved in the discussions and negotiations with third parties described in this section were Mr. Robert V. Dickinson, the Company’s President and Chief Executive Officer; Mr. Kevin J. Berry, the Company’s Chief Financial Officer; and Mr. Kyle Baker, the Company’s Vice President of Marketing. With third parties who expressed significant interest in exploring discussions with the Company and entered into mutual confidential disclosure agreements with the Company, the Company also involved, as needed, its other executive staff members, including Ms. Zareen Mohta, the Company’s Manager of Human Resources; Mr. Manuel Mere, the Company’s Vice President, Operations and Information Systems; Mr. Juergen Lutz, the Company’s Vice President, Engineering; and Mr. Daniel Hauck, the Company’s Vice President, Sales.

As previously disclosed, the Company evaluated approximately 15 potential acquisitions and investments between late 2008 and August 2009, with the Company’s management ultimately determining, after consultation in some instances with the California Micro Devices Board, that none of them were in the best interests of the Company or its stockholders to pursue. The reasons the Company’s management determined that the potential acquisitions and investments were not in the best interests of the Company or its stockholders were that most of these companies were still early stage and therefore would require substantial investment to become cash flow positive and had substantial technical risk or market risk.

As previously disclosed, on March 12, 2009, the California Micro Devices Board determined that, in light of the depressed stock market and other factors, it was not in the best interests of the Company’s stockholders to actively pursue negotiations at that time regarding a sale of the Company. The other factors considered by the California Micro Devices Board on March 12, 2009 included its views that:

• the stock market was not functioning efficiently for small-cap, thinly traded stocks such as the Company;

• the Company’s stock price had been trading for the last five months at or below $2.00 per share, which were historically low levels that effectively meant the Company had zero enterprise value;

• as a result the Company was undervalued in the market and a buyer would most likely base a price on premium to market rather than what the California Micro Devices Board believed was the Company’s true value;

• the Company’s business had contracted during the economic slowdown and revenue was just beginning to recover and was expected to improve, which meant that a sale of the Company at that time would have been at or near the bottom of the Company’s historic revenue and expected future revenue; and

• the Company had encouraging customer prospects for revenue recovery and cost saving plans that were expected to enable it to return to positive cash flow and achieve non-GAAP profitability, both of which were expected to increase the Company’s value as they became known.

As previously disclosed, on June 3, 2009, the California Micro Devices Board instructed the Company’s management to further evaluate potential strategic alternatives and to defer hiring an investment banker for purposes of running an auction process while continuing to pursue informal discussions with Company A and ON Semiconductor. The California Micro Devices Board instructed the Company’s management to defer hiring an investment banker at that time primarily because, for the reasons described in the bullet points above, the Company would be in a better position to evaluate a potential sale as well as the appropriateness of an auction process run by an investment bank after additional and expected improved quarterly financial results were available.

As previously disclosed, beginning February 2009 and over the next few months, the Company’s management held meetings and participated in conversations with representatives of Company A. The type of transaction that the Company discussed with Company A was a stock-for-stock merger where the Company would be the surviving corporation and the Company’s current shareholders would own a minority position. No indication of interest was submitted to the Company by Company A.

As previously disclosed, on June 30, 2009, Company A informed the Company’s management that it would not continue discussions regarding a potential strategic transaction with the Company. The reasons discussions ceased with Company A were concerns expressed by Company A to the Company about possible adverse tax consequences and the future profitability of the Company’s protection business. In addition, the Company’s management expressed concerns to Company A that, if such a transaction was completed with Company A, Company A’s recent stock price appreciation would mean that the Company’s shareholders would not receive an appropriate level of ownership in Company A.

As previously disclosed, on July 6, 2009, the California Micro Devices Board held a meeting to discuss ON Semiconductor’s revised expression of interest, the status of other open discussions and the other strategies available to the Company. At this meeting, the California Micro Devices Board was apprised of the status of discussions with Company A, which had ceased since the last California Micro Devices Board update, and the strategies discussed including remaining a stand-alone company, acquiring another company or business, or pursuing a quasi-merger of equals.

As previously disclosed, on July 6, 2009, the California Micro Devices Board advised the Company’s management to respond to ON Semiconductor that the Company would be willing to enter into active negotiations at a purchase price of $5.50 per share without a market check that a more formal process would entail. As of July 6, 2009, the Company was beginning to experience some modest recovery in revenue and improvement in cash flows. However, the California Micro Devices Board continued to believe that the Company was undervalued and that additional financial results were necessary to demonstrate the Company’s prospects for growth and improved valuation. Nevertheless, the California Micro Devices Board believed that a purchase price of $5.50 per share represented a price that would well exceed the Company’s expected stock market valuation and therefore would justify active negotiations with a single party without the need to wait for future financial results or to conduct a formal auction process. The California Micro Devices Board also considered information provided by third parties, including Needham & Company (which had informally provided financial analysis to the Company). Following discussion of the factors described above, the California Micro Devices Board concluded that $4.60 was too low whereas $5.50 would warrant pursuing discussions for the reasons stated.

As previously disclosed, between June 2009 and September 2009, the Company’s management identified and contacted seven additional companies about whether they would be interested in pursuing a strategic transaction with the Company. The seven companies were identified by both the Company’s management and members of the California Micro Devices Board based on their extensive industry knowledge. The Company’s management and members of the California Micro Devices Board believed and determined that these companies would most likely be interested in acquiring the Company because they would see value in the Company’s technology and customer relationships and would derive greater profitability from the Company’s business than the Company could on a standalone basis through consolidation and because of their greater scale. The Company’s management and the California Micro Devices Board determined, based on industry knowledge, that other candidates were significantly less likely due to the absence or materially lesser magnitude of these synergies. The Company had already spoken to four companies, beside ON Semiconductor, one of whom was Company A. The Company’s management and the California Micro Devices Board concluded that only buyers who could realize synergies similar to those described above would be willing to pay a substantial premium above the Company’s current stock price, and therefore determined and believed that it would not be productive or otherwise worthwhile to contact purely “financial” or “non-strategic” buyers such as private equity funds.

As previously disclosed, on May 22, 2009, representatives of one of the Company’s largest stockholders, at the request of the stockholder, made a presentation to the California Micro Devices Board in which it recommended that the California Micro Devices Board attempt to maximize long-term stockholder value by exploring a sale of the Company to a strategic acquirer, indicating its belief that, based on an internal analysis, the Company could be sold at a price range of $4.00 to $5.00 per share. The stockholder who made this presentation was RiverSource Investments, LLC, through its investment advisor Seligman Investment.

As previously disclosed, on November 27, 2009, the California Micro Devices Board held a meeting and evaluated and discussed the non-binding proposals from Company C and ON Semiconductor, the alternatives of retaining an investment banker to perform an auction process, entering into exclusive negotiations with ON Semiconductor and remaining as a stand-alone company by executing a strategy of growth either organically or through acquisition. At this meeting, the California Micro Devices Board discussed and evaluated the likelihood that the Company could grow itself, by obtaining more revenue from existing customers or more customers and by developing new products internally or that it could grow by acquiring technologies or products developed by other companies or by acquiring other companies rapidly enough to be viable on a long term basis.

2. The following sets forth additional disclosure to be included under the subheading entitled “Opinion of California Micro Devices’ Financial Advisor” in Item 4(b) of the Schedule 14-D9 (“Background and Reasons for the Recommendation”):

The California Micro Devices Board considered seven financial advisors in its selection process. Needham & Company was retained by the California Micro Devices Board to act as its financial advisor based on Needham & Company’s experience as a financial advisor in mergers and acquisitions as well as Needham & Company’s familiarity with the Company and the semiconductor industry generally. The cash fee paid to Needham & Company in connection with its rendering of its fairness opinion was $250,000.

Needham & Company’s presentation to the California Micro Devices Board did not include a discounted cash flow analysis because Needham & Company did not have reliable projections for a sufficiently long time period to perform a discounted cash flow analysis that would be useful in valuing California Micro Devices.

As previously disclosed with respect to the selected company analysis performed by Needham & Company, Needham & Company evaluated the ratios of enterprise value as a multiple of projected calendar year 2010 EBITDA of the Company relative to the range of comparable ratios for the selected companies. In evaluating these ratios, Needham & Company was aware that the Company’s management projected sequential quarterly growth in EBITDA during calendar year 2010, as set forth in the section “Projected Financial Information” beginning on page 32 of the Schedule 14D-9 (which information is included below as well). In addition, the multiples derived by Needham & Company in the selected companies analysis were based on observed prices in the trading markets and did not include a control premium.

With respect to the selected company analysis performed by Needham & Company, the following table sets forth information concerning the following additional multiples for the selected companies and the Company at the Offer Price:

• enterprise value as a multiple of latest twelve months EBITDA;

• enterprise value as a multiple of projected calendar year 2009 EBITDA;

• enterprise value as a multiple of projected calendar year 2010 EBITDA;

• price per share to the latest twelve month earnings per share;

• price per share to the estimated calendar year 2009 earnings per share; and

• price per share to book value.

	Low	High	Mean	Median	California Micro Devices @ $4.70 Offer Price
Enterprise value as a multiple of latest twelve months EBITDA	7.1x	23.8x	13.7x	12.0x	NM
Enterprise value as a multiple of projected calendar year 2009 EBITDA	8.0x	12.5x	10.9x	11.6x	NM
Enterprise value as a multiple of projected calendar year 2010 EBITDA	5.4x	15.9x	8.9x	7.4x	15.4x
Price per share to the latest twelve month earnings per share	16.9x	73.6x	45.2x	45.2x	NM
Price per share to the estimated calendar year 2009 earnings per share	19.0x	66.4x	48.7x	60.6x	NM
Price per share to book value	1.1x	3.9x	2.0x	1.7x	2.4x

With respect to the selected transactions analysis performed by Needham & Company, the following table sets forth information concerning the transaction and enterprise value for each of the transactions analyzed:

Transaction	Announced Transaction Value ($ in millions)		Enterprise Value ($ in millions)
ON Semiconductor/PulseCore(1)	$	17.0	$	17.0
ON Semiconductor/Catalyst(2)	$	115.0	$	85.4
Diodes/Zetex(3)	$	176.0	$	151.1
ON Semiconductor/AMIS Holdings(4)	$	915.0	$	1,074.4
ON Semiconductor/Analog Devices(1)	$	185.0	$	185.0
Exar/Sipex(5)	$	174.5	$	212.4
Cirrus Logic/Apex(1)	$	42.0	$	42.0
ON Semiconductor/California Micro Devices Corporation	$	111.5	$	67.3

(1) Enterprise value deemed equal to transaction value since no balance sheet information was available.

(2) All-stock consideration, transaction value based on the closing stock price of ON Semiconductor on July 16, 2008.

(3) Balance sheet financial information based on Euro/Dollar exchange rate of 1.57425 on April 4, 2008.

(4) All-stock consideration, transaction value based on the closing stock price of ON Semiconductor on December 12, 2007.

(5) All-stock consideration, transaction value based on the closing stock price of Exar on May 7, 2007.

With respect to the premiums paid analysis performed by Needham & Company, the following table sets forth information concerning the transaction value and premiums paid for each transaction:

				Announced Transaction Value ($ in millions)		Premium Paid (1)
Announcement Date	Completion Date	Target	Acquiror		Price Per Share ($)	1 Day (Last Close)		7 Day		30 Day		60 Day		90 Day
12/07/09	Pending	ZiLOG, Inc.	IXYS Corp.	62.4	3.59	21	%	19	%	30	%	37	%	41	%
10/05/09	11/27/09	OpenTV Corp.	Kudelski SA	144.9	1.55	17	%	11	%	21	%	5	%	23	%
04/27/09	06/29/09	Tundra Semiconductor Corp.	Integrated Device Technology, Inc.	99.9	5.17	14	%	15	%	45	%	138	%	78	%
05/11/09	06/23/09	Catapult Communications Corp.	Ixia	104.5	9.25	9	%	24	%	35	%	47	%	31	%
12/23/08	03/12/09	Scopus Video Networks Ltd.	Harmonic, Inc.	78.3	5.62	46	%	54	%	52	%	27	%	22	%
09/04/08	10/31/08	Captaris, Inc.	Open Text Corp.	127.1	4.80	28	%	27	%	42	%	22	%	16	%
09/15/08	10/30/08	Napster, Inc.	Best Buy Co., Inc.	125.0	2.65	95	%	102	%	69	%	143	%	77	%
06/17/08	10/07/08	Motive, Inc.	Alcatel-Lucent SA	67.8	2.23	53	%	24	%	49	%	54	%	44	%
06/06/08	09/04/08	Tumbleweed Communications Corp.	Sopra Groupe SA	138.2	2.70	53	%	46	%	99	%	88	%	131	%
05/01/08	06/18/08	NetManage, Inc.	Micro Focus International PLC	69.7	7.20	73	%	74	%	71	%	51	%	38	%
03/10/08	05/23/08	WJ Communications, Inc.	TriQuint Semiconductor, Inc.	68.7	1.00	18	%	18	%	67	%	33	%	35	%
12/27/07	03/06/08	Document Sciences Corp.	EMC Corp.	59.3	14.75	79	%	76	%	72	%	44	%	60	%
05/03/07	08/20/07	EasyLink Services Corp.	Internet Commerce Corp.	63.8	5.80	12	%	14	%	14	%	16	%	19	%
04/23/07	07/20/07	Terayon Communications Systems, Inc.	Motorola, Inc.	139.7	1.80	4	%	9	%	18	%	-20	%	-4	%
05/14/07	07/12/07	Stratos International, Inc.	Emerson Electric Co.	118.0	8.00	3	%	-1	%	7	%	11	%	8	%
01/08/07	05/25/07	Therma-Wave, Inc.	KLA Instruments Corp.	75.0	1.65	32	%	38	%	10	%	22	%	22	%
		California Micro Devices(2)	ON Semiconductor	111.5	4.70	54	%	57	%	62	%	53	%	48	%

(1) Premiums paid based on calendar days.

(2) Implied transaction premium based on closing prices as of 12/11/2009.

For purposes of the selected company, selected transactions and premiums paid analyses performed by Needham & Company, there was no identical company, transaction or business that was identical to either California Micro Devices or the Transaction. Accordingly, the evaluation of the results of these analyses was not entirely a matter of mathematical comparison, but rather involved complex considerations and judgments concerning differences in the financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the selected companies or selected transactions or the Company or Transaction to which they were being compared.

        3. The following sets forth additional disclosure to be included under the subheading entitled “Projected Financial Information” in Item 8 of the Schedule 14-D9 (“Additional Information”):

        The Company’s senior management does not as a matter of course make public projections as to future performance or earnings beyond the current fiscal quarter and is especially wary of making projections for extended periods due to the significant unpredictability of the underlying assumptions and estimates. However, the Company provided certain financial forecasts prepared by senior management to ON Semiconductor, Purchaser, and the California Micro Devices Board in connection with their consideration of the Offer and the Merger and to Needham & Company in connection with its analysis described under “Opinion of California Micro Devices’ Financial Advisor.” We are including below additional projections, which were provided to ON Semiconductor, Purchaser, the California Micro Devices Board and in certain cases to Needham & Company, to provide our stockholders access to this information. The inclusion of this information should not be regarded as an indication that ON Semiconductor, Purchaser, the California Micro Devices Board, Needham & Company or any other recipient of this information considered, or now considers, it to be a reliable prediction of future results or to be material as to the decision by stockholders to accept the Offer and tender their Shares.

The projections reflect numerous estimates and assumptions with respect to industry performance, general business, economic, regulatory, market and financial conditions, including the continuation of the general economic recovery throughout most of the world during 2010, as well as matters specific to the Company’s business, including the success of the products of the Company’s customers in which the Company’s devices are incorporated, its access to sufficient wafer, assembly and test capacity, and its ability to achieve projected product costs and maintain spending at projected levels. Many of these matters are beyond the Company’s control and the continuing turmoil in general economic conditions and the uncertain level of future consumer spending, particularly in the United States and Chinese markets for mobile phones and the world-wide market for digital consumer electronic products such as set top boxes and digital TVs, create significant uncertainty around the projections. As a result, there can be no assurance that the projected results will be realized or that actual results will not be significantly higher or lower than projected.

Since the projections cover multiple fiscal quarters, and since the Company does not typically receive long-term commitments or long-term forecasts from its customers, such information by its nature becomes less reliable with each successive quarter. The financial projections were prepared solely for internal use, and for the use of ON Semiconductor, the California Micro Devices Board and their respective advisors in connection with the potential transaction and not with a view toward public disclosure or toward complying with generally accepted accounting principles, the published guidelines of the SEC regarding projections or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The projections included herein were prepared by the Company’s management. Neither the Company’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the prospective financial information. Furthermore, the financial projections do not take into account any circumstances or events occurring after the date they were prepared.

The Company has made publicly available its actual results of operations for the quarter ended September 30, 2009, and its updated revenue and profit estimates for the quarter ended December 31, 2009. You should review the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 and the Company’s Current Reports on Form 8-K dated October 29, 2009 and January 11, 2010, to obtain this information. See “Additional Information.” Readers of this solicitation/recommendation statement are strongly cautioned not to place undue reliance on the projections set forth below. No one has made or makes any representation to any stockholder regarding the information included in these projections.

The inclusion of projections herein should not be regarded as an indication that such projections will be an accurate prediction of future events, and they should not be relied on as such. Except as required by applicable securities laws, the Company undertakes no obligation to update, or otherwise revise the material projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error.

Projected Net Operating Loss: On December 7, 2009, the Company’s management provided ON Semiconductor financial information that estimated a projected net operating loss carryforward of approximately $59 million as of March 31, 2010.

Projected Depreciation: On December 7, 2009, the Company’s management provided ON Semiconductor and Needham & Company the following projected financial information regarding estimated depreciation, which information assumed that no fixed asset purchases would occur during the periods indicated:

(Estimated)	Calendar Year 2010
	For three months ended March 31, 2010		For three months ended June 30, 2010		For three months ended September 30, 2010		For three months ended December 31, 2010		For twelve months ended December 31, 2010
	($ in millions)
Depreciation	$	0.2	$	0.2	$	0.2	$	0.2	$	0.8

Projected Capital Expenditures and Change in Working Capital: The Company’s management provided ON Semiconductor and Needham & Company the following projected financial information regarding estimated capital expenditures and changes in working capital:

(Estimated)	Calendar Year 2009					Calendar Year 2010
	For three months ended December 31, 2009		For twelve months ended December 31, 2009			For three months ended March 31, 2010			For three months ended June 30, 2010		For three months ended September 30, 2010		For three months ended December 31, 2010		For twelve months ended December 31, 2010
	($ in millions)
Capital expenditures	$	0.05	$	0.17		$	0.27		$	0.05	$	0.10	$	0.10	$	0.52
Change in working capital	$	0.3	$	(3.4	)	$	(0.1	)	$	0.3	$	1.0	$	1.0	$	2.2

*    *    *

Important Additional Information About the Transaction

This Report is neither an offer to purchase nor a solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of California Micro Devices common stock are being made pursuant to an offer to purchase and related materials that Pac-10 Acquisition Corporation, an indirect, wholly-owned subsidiary of ON Semiconductor, has filed with the SEC and mailed to California Micro Devices’ stockholders. Pac-10 Acquisition Corporation has filed a tender offer statement on Schedule TO with the SEC with respect to the offer, and California Micro Devices has filed a solicitation/recommendation statement on Schedule 14D-9 with respect to the Offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials are available at no charge from the SEC through its website at www.sec.gov.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 10.1 – Memorandum of Understanding dated January 19, 2010.

Exhibit 99.1 – Press release dated January 20, 2010.

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized on the 20^th day of January, 2010.

CALIFORNIA MICRO DEVICES CORPORATION
(Registrant)
By:	/s/    ROBERT V. DICKINSON
	Robert V. Dickinson
	President and Chief Executive Officer

Exhibit Index

Exhibit	Description
10.1	Exhibit 10.1 – Memorandum of Understanding dated January 19, 2010.
99.1	Exhibit 99.1 – Press release dated January 20, 2010.

EX-10.1

EXHIBIT 10.1

MEMORANDUM OF UNDERSTANDING

WHEREAS, on December 14, 2009, California Micro Devices Corporation (“CAMD” or the “Company”) and ON Semiconductor Corporation (“ONNN”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which CAMD would be acquired by ONNN in a cash transaction by means of an all-cash tender offer (the “Tender Offer”) and second-step merger valued at approximately $108 million (together, the “Proposed Transaction”). Under the terms of the Merger Agreement, ONNN has commenced the Tender Offer to purchase all of the outstanding shares of CAMD’s common stock for $4.70 per share in cash. The closing of the Tender Offer is subject to customary conditions, including the tender of a number of shares that constitutes at least a majority of CAMD’s outstanding shares of common stock on a fully diluted basis. The Tender Offer commenced during the week of December 28, 2009, and will run for and expire after 20 business days assuming at least a majority of CAMD’s shares (determined on a fully diluted basis) are tendered to ONNN and the other closing conditions have been satisfied or waived. The Tender Offer is scheduled to expire on January 26, 2010. The Merger Agreement also provides that the parties effect, subject to the satisfaction or waiver of customary conditions, a merger following the completion of the Tender Offer, which will result in all shares of CAMD common stock being converted into the right to receive the same $4.70 per share in cash paid in the Tender Offer, and in CAMD becoming an indirect, wholly-owned subsidiary of ONNN. By virtue of the “top-up option” granted by CAMD to ONNN in the Merger Agreement, no stockholder meeting will be needed unless fewer than approximately 80% of CAMD outstanding shares are tendered in the Tender Offer;

WHEREAS, on or about December 17, 2009, plaintiff Robert Varrenti filed a lawsuit brought in the Superior Court for the State of California, in and for Santa Clara County, California, entitled Varrenti v. Dickinson, et al. (Case No. 1-09-CV-159649) (the “California Action”), which seeks, among other things, injunctive and equitable relief against CAMD, its directors (the “Individual Defendants” and, together with CAMD, the “CAMD Defendants”), ONNN and Pac-10 Acquisition Corporation (“Pac-10”), with respect to the Proposed Transaction;

WHEREAS, on or about December 21, 2009, plaintiff Annamarie Medeiros filed a lawsuit in the Court of Chancery of the State of Delaware (the “Delaware Court”), entitled Medeiros v. CAMD Corporation, et al. (Docket No. 5159-VCP) (the “Medeiros Action”), which seeks, among other things, injunctive and equitable relief against CAMD, the Individual Defendants, ONNN and Pac-10 with respect to the Proposed Transaction;

WHEREAS, Pac-10 commenced the Tender Offer on December 28, 2009. On the same day, Pac-10 and CAMD, respectively, filed a Schedule TO and Schedule 14D-9, setting forth, among other things, the terms of the Tender Offer;

WHEREAS, on December 30, 2009, the plaintiff in the California Action amended the Varrenti complaint to attack the disclosures in the Schedule TO and the Schedule 14D-9;

WHEREAS, on January 4, 2010, a third action, Israni v. California Micro Devices Corporation et al., (Docket No. 5181-VCS) was filed in the Delaware Court (the “Israni Action, and collectively with the Medeiros Action the “Delaware Action”). The Israni Action challenged, among other things, the Proposed Transaction as a breach of the Individual Defendants’ fiduciary duties, in addition to the disclosures asserted in the Schedule 14D-9 and the Schedule TO;

WHEREAS, on January 7, 2010, plaintiff Medeiros amended her complaint to add claims challenging the disclosures asserted in the Schedule 14D-9 and the Schedule TO;

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WHEREAS, on the Delaware Court consolidated the Mederios Action and Israni Action into the Delaware Action (the Delaware Action and California Action collectively will be referred to as the “Actions,” and the plaintiffs in the Actions will be referred to as “Plaintiffs”);

WHEREAS, the Plaintiffs challenge the Proposed Transaction, including the disclosures in the Schedule 14D-9 and certain terms of the Merger Agreement, alleging, among other things, that the Individual Defendants breached fiduciary duties to the stockholders of CAMD by, among other things, failing to adequately disclose certain material information in the Schedule 14D-9 concerning the Merger, and that CAMD, ONNN and Pac-10 aided and abetted such breaches;

WHEREAS, counsel for the Plaintiffs have reviewed the Schedule 14D-9;

WHEREAS, the operative complaints in the Delaware Action and the California Action (the “Complaints”) make specific allegations about the adequacy of disclosures in the Schedule 14D-9, and counsel for the Plaintiffs have made requests to counsel for the Defendants concerning additional disclosures to add to the Schedule 14D-9 before the Tender Offer’s scheduled expiration date on January 26, 2010;

WHEREAS, counsel for the Plaintiffs and counsel for the Defendants have engaged in extensive arm’s-length negotiations concerning a possible settlement of the Actions;

WHEREAS, counsel for the Defendants have provided Plaintiffs with documents concerning the CAMD Board’s approval of the Proposed Transaction, including the production of minutes of meetings of the CAMD Board concerning the Proposed Transaction, documents provided to the CAMD Board regarding the Proposed Transaction, and written presentations made to the CAMD Board by CAMD’s financial advisor, Needham & Co. (“Needham”), that relate to the Proposed Transaction; and Defendants have provided Plaintiffs with appropriate depositions concerning the Board’s approval of the Proposed Transaction;

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WHEREAS, counsel for plaintiffs in the Actions have retained a financial consultant to assist in the prosecution of the Actions, as well as to review the documents and information produced by Defendants, and to provide financial advice with respect thereto;

WHEREAS, supplemental information relating to the Proposed Transaction substantially in the form set forth in Exhibit A hereto will be filed as an amendment to the Schedule 14D-9 (the “Supplemental Disclosure”) with the United States Securities and Exchange Commission (the “SEC”) prior to and sufficiently in advance of the scheduled expiration of the Tender Offer such that it forms the basis for a settlement of the Actions;

WHEREAS, subject to the additional discovery as to be agreed to herein, counsel for all Plaintiffs have concluded that the terms contained in this Memorandum of Understanding (“MOU”) are fair and adequate to CAMD, its stockholders, and members of the Class (as defined below), and the parties believe that it is reasonable to pursue the settlement of the Actions based upon the procedures and terms outlined herein and the benefits and protections offered hereby, and the parties wish to document their agreement in this MOU;

WHEREAS, all Defendants have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation of law of any kind or engaged in any of the wrongful acts alleged in the Actions, and expressly maintain that they have diligently and scrupulously complied with their fiduciary and other legal duties, including without limitation providing sufficient, correct, and proper disclosure to CAMD stockholders in connection with the Tender Offer, and are entering into this MOU solely to eliminate the burden and expense of further litigation;

WHEREAS, Plaintiffs’ entry into this Memorandum is not an admission as to the lack of any merit of any of the claims asserted in the Actions;

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WHEREAS, all parties recognize the time and expense that would be incurred by further litigation of the_. Actions and the uncertainties inherent in such litigation;

NOW, THEREFORE, as of this 19th day of January, 2010, counsel for the parties have reached an agreement, expressed in this MOU, providing for the settlement of the Actions (that agreement is herein referred to as the “Settlement Agreement” and the acts, terms and conditions contemplated thereby are referred to as the “Settlement”) between and among the Plaintiffs and the Defendants, on the terms and subject to the conditions set forth below:

1. Supplemental Disclosure. Counsel for the Plaintiffs (alternatively referred to herein as “Plaintiffs’ Counsel”) and counsel for the CAMD Defendants have conferred on certain disclosures supplemental to those contained in the Schedule 14D-9, and, as requested by the Plaintiffs and as agreed upon by the CAMD Defendants and the Plaintiffs, CAMD will file electronically with the SEC the Supplemental Disclosure substantially in the form set forth in Exhibit A hereto.

2. Benefits A Result of the Settlement. Defendants agree that the pendency of the Actions and the efforts of Plaintiffs and their counsel were the sole cause of the inclusion and dissemination of the Supplemental Disclosure. The Plaintiffs acknowledge that their counsel has reviewed the aforementioned subject matters to be contained in the Supplemental Disclosure and deem them an adequate basis for settling the Actions, subject to additional discovery as to be agreed to by the parties.

3. Confirmatory Discovery. Defendants have provided to Plaintiffs’ counsel reasonable confirmatory discovery as agreed by the parties, including additional depositions, to confirm the fairness and reasonableness of the Settlement.

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4. Stipulation of Settlement; Cooperation. The parties to the Actions and their respective counsel agree to cooperate fully and to use their best efforts to effectuate the Settlement, and the parties shall negotiate and execute an appropriate Stipulation of Settlement (the “Stipulation”), to be filed in the California Action, which shall: (i) upon Final Approval of the Settlement (as defined herein) resolve and provide for the dismissal with prejudice and without costs to any party, except as set forth in paragraphs 6 and 7 herein, of all claims asserted or that could have been asserted in the California Action (which the parties agree includes, without limitation, any and all claims that were or could have been asserted in the Delaware Action) and all other claims (as described hereinafter), if any, arising out of or relating, in whole or in part, to the Proposed Transaction; (ii) provide for a stay of all proceedings in the Delaware Action pending Final Approval of the Settlement, at which time the Stipulation shall provide for the filing in Delaware of a joint stipulation of dismissal with prejudice and without costs to any party, except as set forth in paragraphs 6 and 7 herein, of all claims asserted or that could have been asserted in the Delaware Action and all other claims (as described hereinafter), if any, arising out of or relating, in whole or in part, to the Proposed Transaction or any act or omission in connection with the Proposed Transaction; and (iii) provide for the preparation and filing of such other documentation as may be necessary to obtain approval of the Stipulation upon and consistent with the terms set forth in this MOU. As used herein, “Final Approval” of the Settlement means that the Court in the California Action has entered a final order and judgment approving the Settlement, certifying the class alleged in the California Action, dismissing the California Action with prejudice and with each party to bear its own costs (except for the costs set forth in paragraphs 6 and 7), and providing for such release language as is contained herein, and that such final_. order and judgment is finally affirmed on appeal or is no longer subject to appeal and the time for any petition for reargument, appeal or review, by

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certiorari or otherwise, has expired; provided, however, and notwithstanding any provision to the contrary in this MOU, Final Approval shall not include (and the Settlement is expressly not conditioned on) the approval of attorneys’ fees, costs and expenses of Plaintiffs’ counsel as provided in paragraph 6 and any appeal related thereto.

5. Certain Terms of the Stipulation. The Stipulation will also expressly provide, inter alia:

(a) for certification by the Court in the California Action, for settlement purposes only, pursuant to California Code of Civil Procedure 382, of a non-opt-out settlement class consisting of all record and beneficial holders of the common stock of the Company at any time during the period beginning on and including December 14, 2009 (the date that the Proposed Transaction was publicly announced) through and including the effective date of consummation of the Proposed Transaction, including any and all of their respective legal representatives, heirs, successors, successors in interest, predecessors, predecessors in interest, trustees, executors, administrators, transferees and assigns, and any person or entity acting for or on behalf of, or claiming under, any such foregoing holders, immediate and remote, except for the Defendants and their “affiliates” and “associates” (as those terms are defined in Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934) (the “Class”);

(b) that upon the Court in the California Action’s entry of a final order and judgment approving the Settlement, certifying the class alleged in the California Action, and dismissing the California Action with prejudice, the parties to the Delaware Action will promptly file a joint stipulation of dismissal of the Delaware Action with prejudice and without costs;

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(c) that the Company shall cause a dissemination by mail of notice of the Settlement to members of the Class, or as required by the Court in the California Action, and shall pay all costs and expenses incurred in providing such notice to members of the Class, and that said notice will provide that members of the Class shall have an opportunity to object to the Settlement;

(d) that all the Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to all claims asserted in the Actions, including that they have committed any violations of law, that they have acted improperly in any way, that they have any liability or owe any damages of any kind to the Plaintiffs and the Class, but are entering into this MOU and will execute the Stipulation solely because they consider it desirable that the Actions be settled and dismissed with prejudice in order to (i) eliminate the burden, inconvenience, expense, risk and distraction of further litigation, (ii) finally put to rest and terminate all the claims which were or could have been asserted against the Defendants in the Actions, and (iii) thereby permit the Proposed Transaction to proceed without risk of injunctive or other relief;

(e) for the release and full and complete discharge, dismissal with prejudice, settlement and release of all claims, rights, demands, suits, matters, issues, actions or causes of action, liabilities, damages, losses, obligations and judgments of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, that have been, could have been, or in the future might be asserted in the Actions (including without limitation the Delaware Action and the California Action) or in any court, tribunal or proceeding (including, but not limited to, any claims arising under federal, state, or foreign law related to the alleged breach of any duty, negligence, violations of the federal securities laws or

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otherwise) by the Plaintiffs, or by or on behalf of any member of the Class, whether in an individual, class, direct, derivative, representative, legal, equitable, or any other type of capacity against all the Defendants (or any one of them) or any of their respective families, affiliates, parents, or subsidiaries and each and all of their respective past, present or future officers, directors, stockholders, members, employees, agents, attorneys, advisors, insurers, accountants, trustees, financial or investment advisors, commercial bankers, persons who provided fairness opinions, investment bankers, associates, representatives, general partners, limited partners, partnerships, heirs, executors, personal representatives, estates, administrators, predecessors, successors and assigns (herein collectively “Defendants’ Affiliates”), whether under state, federal, or foreign law, including but not limited to the federal securities laws (except for the rights conferred by this Settlement), and whether directly, derivatively, representatively or arising in any other capacity, in connection with, or that arise out of, any of the allegations, facts, practices, events, transactions, acts, claims that were or could have been brought in the Actions, or that arise now or hereafter out of, or that relate in any way to, the acts, facts or the events alleged in the Actions, including without limitation the Supplemental Disclosure, the Schedule 14D-9, the Proposed Transaction and the other transactions contemplated by the Merger Agreement, the negotiation and consideration of the Merger Agreement and the transactions contemplated by the Merger Agreement, including, without limitation, the Merger, and any disclosures relating thereto, and any acts, allegations, facts, matters, events, transactions, occurrences, statements, conduct, representations, misrepresentations or omissions relating to or arising out of the subject matter referred to in the Actions, and the fiduciary and disclosure obligations of any of the Defendants or Defendants’ Affiliates with respect to any of the foregoing (whether or not such claim could have been asserted in the Actions) (collectively the “Released Claims”); provided, however, that the Released Claims shall not include any claims to enforce the Settlement or any claims for appraisal brought pursuant to 8 Del. C. § 262;

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(f) that the release contemplated by this MOU and by the Stipulation shall extend to claims that the releasing parties do not know or suspect to exist at the time of the release, which, if known, might have affected the releasing parties’ decision to enter into the release; that the releasing parties shall be deemed to relinquish, to the extent applicable, and to the full extent permitted by law, the provisions, right and benefits of Section 1542 of the California Civil Code, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR;

and that the releasing parties shall be deemed to waive any and all provisions, rights and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code Section 1542. The parties to this MOU acknowledge that the foregoing waiver was separately bargained for and is a material term of this MOU;

(g) for the entry of a final and binding judgment dismissing with prejudice (whether voluntary or involuntary) the Actions upon the Final Approval of the Settlement;

(h) that the Defendants and Defendants’ Affiliates release all claims against Plaintiffs, members of the Class, and their counsel arising out of or relating to the institution, prosecution, and resolution of the Actions;

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(h) that all the Defendants shall have the right to withdraw from the Settlement in the event that (i) any court enjoins or otherwise precludes the Proposed Transaction, including the Merger or any of the transactions contemplated by the Merger Agreement, (ii) any claim related to the subject matter of the Actions, the Merger Agreement, the transactions contemplated by the Merger Agreement, including the Merger, or the Released Claims is commenced or prosecuted against any of the Defendants in any court prior to Final Approval of the Settlement, and (following a motion by the Defendants) any such claim is not dismissed with prejudice or stayed in contemplation of dismissal with prejudice, or (iii) the Proposed Transaction, including any amendment thereto, is not otherwise successfully completed. In the event that any such claim is commenced or prosecuted against any of the Defendants, the parties shall cooperate and use best efforts to secure the dismissal with prejudice (or a stay in contemplation of dismissal with prejudice, following Final Approval of the Settlement) thereof;

(i) that, subject to an order of the Court in the California Action, pending final determination of whether the Settlement and Stipulation should be approved, the Plaintiffs and all members of the Class, or any of them, are barred and enjoined from commencing, prosecuting, instigating, or in any way participating in the commencement or prosecution of any action asserting any claims against any of the Defendants or Defendants’ Affiliates.

6. Attorneys’ Fees. Levi & Korsinsky LLP, as counsel for the plaintiff and the Class in the California Action (“California Counsel”), shall apply to the Court in the California Action for an award to Plaintiffs’ Counsel of attorneys’ fees, costs and expenses in the California Action (the “Attorneys’ Fee Application”) in an amount not to exceed $495,000 to be paid by the Company or any successor thereto subject to the approval of the Court in the California Action and subject to the Proposed Transaction being consummated. Counsel for the Defendants acknowledge that Plaintiffs’ Counsel have a claim for an Attorneys’ Fee Application based

11

on the substantial benefits the settlement has and will provide to CAMD shareholders and Defendants have agreed to the Attorneys’ Fee Application. CAMD (or any successor thereto) and its insurers shall pay any award of attorneys’ fees, costs and expenses (the “Attorneys’ Fee Award”), as directed by the Court in the California Action, if and solely to the extent that such Attorneys’ Fee Award does not exceed $495,000. All parties agree that, notwithstanding anything in this MOU to the contrary, or any order of the Court in the California Action making or approving an Attorneys’ Fee Award, in no event shall CAMD or its successors be obliged to pay to Plaintiffs, the Class or Plaintiffs’ counsel any amount in excess of $495,000 for attorneys’ fees, costs and expenses in connection with the Actions (other than those expenses incurred in disseminating the notice of Settlement by mail in accordance with paragraph 5(c), which notice CAMD shall prepare and mail at its expense), and in no event shall any Defendant other than CAMD or its successors be obliged to pay any part of the Attorneys’ Fee Award or any of Plaintiffs’ attorneys’ fees, costs and expenses.

7. Payment of Awarded Fees. Subject to the approval of the Court in the California Action, Plaintiffs’ Counsel in the Actions shall allocate any Attorneys’ Fee Award among themselves, subject to the unanimous agreement of all Plaintiffs’ Counsel. The Stipulation will provide that the Court-approved payment of attorneys’ fees and expenses will be made five (5) calendar days after entry of the last order of dismissal, with prejudice, in any of the Actions. Any such payment shall be made subject to Plaintiffs’ Counsel’s respective obligations to make refunds or repayment to CAMD (or any successor entity) if any specified condition to the Settlement is not satisfied or, as a result of any appeal and/or further proceedings on remand, or successful collateral attack, any dismissal order is reversed or the fee or costs award is reduced or reversed. Payment by or on behalf of CAMD (or any successor

12

entity or insurer) of the attorneys’ fees and expenses to Plaintiffs’ Counsel will discharge in full any obligation of CAMD or its successors to pay any and all attorney’s fees or expenses for any and all attorneys representing Plaintiffs or the Class. Defendants and Plaintiffs’ Counsel hereby expressly acknowledge that the provisions herein relating to the attorneys’ fees and expenses that CAMD (or any successor entity) will pay or cause to be paid was negotiated by Defendants and Plaintiffs’ counsel only after the parties had agreed to all of the substantive terms of the settlement contained herein.

8. Notice to the Court. The parties will promptly advise the Court in the Delaware Action of the pending Settlement and request that further proceedings in the Delaware Action be deferred during the pendency of the Settlement approval. The parties will also promptly advise the Court in the California Action of the Settlement and present the Settlement for hearing and approval as soon as practicable.

9. Court Approval Required. This MOU and any Stipulation of Settlement shall be null and void and of no force and effect if Final Approval of the Settlement does not occur for any reason. In such event, the parties shall return to their respective litigation positions in each of the Actions as of the time immediately prior to the date of the execution of this MOU, as though it were never executed or agreed to, and this MOU shall not be deemed to prejudice in any way the positions of the parties with respect to the Actions, or to constitute an admission of fact by any party, shall not entitle any party to recover any costs or expenses incurred in connection with the implementation of this MOU or the Settlement, and neither the existence of this MOU nor its contents shall be admissible in evidence or be referred to for any purposes in the Actions or in any litigation or judicial proceeding, other than to enforce the terms hereof.

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10. Stay Pending Approval. The parties agree to stay any further proceedings in the Actions, or any similar proceedings in any court, pending submission of the Settlement to the Court in the California Action for approval and, if necessary, request and stipulate that the respective Courts enter Orders Staying the Actions. The parties’ respective times to respond to any filed pleadings is extended indefinitely. The Plaintiffs will stay, and will not initiate, any other proceedings other than those incident to the Settlement. The parties also agree to use their best efforts to prevent, stay or seek dismissal of or oppose entry of any interim or final relief in favor of any member of the Class in any other litigation against any of the parties to this MOU, or which challenges the Settlement, the Merger Agreement, any of the transactions contemplated by the Merger Agreement, including, without limitation, the Proposed Transaction or the Merger, or otherwise involves a Released Claim.

11. Return of Documents. Counsel for the Plaintiffs agree that within ten (10) days of receipt of a written request by any producing party following Final Approval of the Settlement, they will return to the producing party all discovery material obtained from, including all documents produced by and/or deposition testimony given by, any of the Defendants or Defendants’ Affiliates in the Actions (herein “Discovery Material”), or certify in writing that such Discovery Material has been destroyed. Provided, however, that plaintiffs’ counsel shall be entitled to retain all filings, court papers, and attorney work product, subject to the requirement that Plaintiffs’ counsel shall not disclose any information contained or referenced in such materials to any person except pursuant to court order or agreement with Defendants. The parties agree to submit to the Court in the California Action any dispute concerning the return or destruction of Discovery Material.

12. Execution in Counterparts. This MOU may be executed in multiple counterparts by the signatories hereto, including by email in PDF format or by telecopier, and as so executed shall constitute one agreement.

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13. Governing Law. This MOU and the Settlement contemplated by it, and all disputes arising out of or relating to it, shall be governed by, and construed in accordance with, the substantive laws of Delaware and procedural laws of California.

14. Written Modifications. This MOU constitutes the entire agreement among the parties with respect to the subject matter hereof, supersedes all written or oral communications, agreements or understanding that may have existed prior to the execution of this MOU, and may be modified or amended only by a writing signed by the parties hereto.

15. Successors, Assigns and Third Party Beneficiaries. This MOU shall be binding upon and inure to the benefit of the parties (including members of the Class) and their respective agents, executors, heirs, successors and assigns; provided, that no party shall assign or delegate its rights or responsibilities under this MOU without the prior written consent of the other parties hereto. The Defendants’ Affiliates are intended third party beneficiaries under this MOU entitled to enforce this MOU in accordance with its terms.

16. Severability. Should any part of this MOU be rendered or declared invalid by a court of competent jurisdiction, such invalidation of such part or portion of this MOU should not invalidate the remaining portions thereof, and they shall remain in full force and effect.

17. Representation of Named Plaintiffs. Plaintiffs represent and warrant that they have been stockholders in CAMD throughout the period covered by the Actions (including without limitation the Delaware Action and the California Action) and the Settlement and have not assigned, encumbered, or in any manner transferred in whole or in part the claims in the Actions.

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18. Consent under Merger Agreement Pursuant to Section 6.9 of the Merger Agreement, ONNN hereby consents to the settlement contemplated hereby.

19. Authority. This MOU is being executed by counsel for the parties, each of whom represents and warrants that he or she has been granted full and complete authority from his or her client or clients to enter into this MOU, which has full force and effect as a binding obligation of such clients.

WHEREFORE, the parties hereto have executed this MOU as of this 19th day of January, 2010.

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LEVI & KORSINSKY, LLP
By:	/s/    David E. Bower
	David E. Bower (SBN 119546)
600 Corporate Pointe, Suite 1170
Culver City, CA 90230-7600 Tel: (310) 839-0442 -and- Eduard Korsinsky (pro hac vice to be filed) Juan E. Monteverde (admitted pro hac vice to be filed) 30 Broad Street, 15th Floor New York, NY 10004 Tel: (212) 363-7500
Attorneys for Plaintiff
ROBERT VARRENTI
SAXENA WHITE P.A.
By:	/s/    Lester R. Hooker
	Lester R. Hooker (SBN 241590)
Maya Saxena
Joseph E. White III
Christopher S. Jones
Lester R. Hooker
2424 North Federal Highway, Suite 257
Boca Raton, FL 33431
Tel: (561) 394-3399
Fax: (561) 394-3382
Attorneys for Plaintiff
SANJAY ISRANI

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RIGRODSKY & LONG, P.A.
By:	/s/ Brian D. Long
	Brian D. Long
Seth D. Rigrodsky
Brian D. Long
919 N. Market Street, Suite 980
Wilmington, DE 19801
(302) 295-5310
STULL STULL & BRODY
Jules Brody
Aaron Brody
6 East 45th Street
New York, NY 10017
(212) 687-7230
WEISS & LURIE
Joseph H. Weiss
551 Fifth Avenue
New York, NY 10176
(212) 682-3025
Attorneys for Plaintiff
ANNAMARIE MEDEIROS
PILLSBURY WINTHROP SHAW PITTMAN LLP
By:	/s/ David Furbush
	David Furbush (SBN 83447)
2475 Hanover Street
Palo Alto, CA 94304-1114
Tel: (650) 233-4623

Attorneys for Defendants

ROBERT DICKINSON, EDWARD ROSS, DAVID

WITTROCK, JON CASTOR, JOHN FICHTHORN, J.

MICHAEL GULLARD, KENNETH POTASHNER,

CALIFORNIA MICRO DEVICES CORPORATION

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DLA PIPER
By:	/s/    David Priebe
	David Priebe (SBN 148679)
2000 University Ave
East Palo Alto, CA 94303 Tel: (650) 833-2000

Attorneys for Defendants

ON SEMICONDUCTOR CORPORATION, and PAC-10

ACQUISITION CORPORATION

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EX-99.1

Exhibit 99.1

NEWS RELEASE

For More Information Contact:

Kevin Berry, Chief Financial Officer

(408) 934-3144

kevinb@cmd.com

California Micro Devices Settles Shareholder Class Action Lawsuits

MILPITAS, CA – January 20, 2010 — California Micro Devices Corporation (NASDAQ: CAMD) today announced that it and the other named defendants in the three purported class action lawsuits that were filed in connection with the proposed acquisition of California Micro Devices by ON Semiconductor Corporation (NASDAQ: ONNN) have entered into a memorandum of understanding with counsel for the plaintiffs.

Under the terms of the memorandum of understanding, the parties have agreed to settle the lawsuits, subject to court approval. As part of the settlement, the defendants deny all allegations of wrongdoing and deny that the disclosures made by the Company in the Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 that was previously mailed by California Micro Devices were inadequate. Under the terms of the memorandum of understanding, the Company agreed to make available certain additional information to its stockholders in an amendment to the Schedule 14D-9.

The memorandum of understanding further contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to members of the proposed settlement class. If finally approved by the court, the settlement will resolve all of the claims that were or could have been brought on behalf of the proposed settlement class in the action being settled, including all claims relating to the tender offer, the merger, the merger agreement, the adequacy of the merger consideration, the negotiations preceding the merger agreement, the adequacy and completeness of the disclosures made in connection with the offer and the merger and any actions of the individual defendants in connection with the offer, the merger or the merger agreement, including any alleged breaches of the fiduciary duties of any of the defendants, or the aiding and abetting thereof. If the court does approve of the settlement after a notice period, then all public stockholders who did not elect to opt out of such settlement will be bound thereby.

In addition, in connection with the settlement and as provided in the memorandum of understanding, and subject to approval by the court, the Company or its insurer will pay to plaintiffs’ counsel for their fees and expenses an amount not to exceed $495,000. This payment will not affect the amount of consideration to be paid to stockholders of the Company in connection with the offer and the subsequent merger. Furthermore, any payment is also conditioned on the offer being consummated so the Company’s stockholders will not indirectly bear such payment.

The additional information to supplement California Micro Devices’ Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 will also be set forth in a Current Report on Form 8-K that California Micro Devices will file with the Securities and Exchange Commission. The additional information should be read in conjunction with the Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9, as supplemented to date.

About California Micro Devices Corporation

California Micro Devices Corporation is a leading supplier of protection devices for the mobile handset, high brightness LED (HBLED), digital consumer electronics and personal computer markets. Detailed corporate and product information may be accessed at www.cmd.com.

All statements contained in this press release that are not historical facts are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. They are not guarantees of future performance or events. Rather, they are based on current expectations, estimates, beliefs, assumptions, and goals and objectives and are subject to uncertainties that are difficult to predict. As a result, our actual results may differ materially from the statements made. Often such statements can be identified by their use of words such as will, intends, expects, plans, believes, anticipates, and estimates. Forward-looking statements made in this release include statements regarding court approval of the terms of the settlement of the lawsuits. These forward-looking statements are based upon our assumptions about and assessment of the future, which may or may not prove true, and involve a number of risks and uncertainties including, but not limited to risks relating to the court’s refusal to approve the terms of the settlement as well as the risk factors detailed in the company’s Form 8K, 10K, and 10Q filings with the Securities and Exchange Commission. These forward-looking statements speak only as to the date of this release, and, except as required by law, we undertake no obligation to publicly release updates or revisions to these statements whether as a result of new information, future events, or otherwise.

Important Additional Information About the Transaction

This press release is neither an offer to purchase nor a solicitation of an offer to sell any securities. The solicitation and the offer to buy shares of California Micro Devices common stock are being made pursuant to an offer to purchase and related materials that Pac-10 Acquisition Corporation, an indirect, wholly-owned subsidiary of ON Semiconductor, has filed with the SEC and mailed to California Micro Devices’ stockholders. Pac-10 Acquisition Corporation has filed a tender offer statement on Schedule TO with the SEC with respect to the offer, and California Micro Devices has filed a solicitation/recommendation statement on Schedule 14D-9 with respect to the Offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other offer documents) and the solicitation/recommendation statement contain important information that should be read carefully and considered before any decision is made with respect to the tender offer. These materials are available at no charge from the SEC through its website at www.sec.gov.

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California Micro Devices Corporation • 490 N. McCarthy Blvd. #100, Milpitas, CA 95035-5112

www.cmd.com • Tel: 408.263.3214 • Fax: 408.263.7846