-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O3q0IdeCdr3+LoggTtfEJafCKYFtAg8hU7fJGE2n0xw98pp8t68gRUQvMN4Hbb0u jw56/gbseS/MNsRrEGi3TQ== 0001193125-10-058602.txt : 20100316 0001193125-10-058602.hdr.sgml : 20100316 20100316172224 ACCESSION NUMBER: 0001193125-10-058602 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20100316 DATE AS OF CHANGE: 20100316 GROUP MEMBERS: DEBORAH YEON-MAY YEH GROUP MEMBERS: GOLDEN EAGLE CAPITAL L.P. GROUP MEMBERS: YEH FAMILY TRUST U/T/D DATED AUGUST 14, 1995 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: YEH BING CENTRAL INDEX KEY: 0001008067 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: C/O SILICON STORAGE TECHNOLOGY, INC. STREET 2: 1171 SONORA CT. CITY: SUNNYVALE STATE: CA ZIP: 94086 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SILICON STORAGE TECHNOLOGY INC CENTRAL INDEX KEY: 0000855906 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770225590 STATE OF INCORPORATION: CA FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-49635 FILM NUMBER: 10686528 BUSINESS ADDRESS: STREET 1: 1171 SONORA COURT CITY: SUNNYVALE STATE: CA ZIP: 94086 BUSINESS PHONE: 4087359110 MAIL ADDRESS: STREET 1: 1171 SONORA COURT CITY: SUNNYVALE STATE: CA ZIP: 94086 SC 13D/A 1 dsc13da.htm AMENDMENT NO. 2 TO SCHEDULE 13D Amendment No. 2 to Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)*

Silicon Storage Technology, Inc.

 

(Name of Issuer)

Common Stock, no par value

 

(Title of Class of Securities)

827057 10 0

 

(CUSIP Number)

Richard Vernon Smith, Esq.

Orrick, Herrington & Sutcliffe LLP

The Orrick Building

405 Howard Street

San Francisco, California 94105-2669

 

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

March 15, 2010

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 827057 10 0

  Page 2 of 8 Pages

 

  1.   

Names of Reporting Persons:

Bing Yeh

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions):

(a)  x

(b)  ¨

  3.  

SEC Use Only:

  4.  

Source of Funds (See Instructions):

PF, OO

  5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):    ¨
  6.  

Citizenship or Place of Organization:

United States

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

     7.    

Sole Voting Power:

268,125

     8.   

Shared Voting Power:

10,618,000

     9.   

Sole Dispositive Power:

268,125

   10.   

Shared Dispositive Power:

10,618,000

11.

 

Aggregate Amount Beneficially Owned by Each Reporting Person:

10,886,125*

12.

  Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):    ¨

13.

 

Percent of Class Represented by Amount in Row (11):

9.4%**

14.

 

Type of Reporting Person (See Instructions):

IN

 

* By virtue of his status as a trustee of the Yeh Family Trust U/T/D dated August 14, 1995 (the “Trust”) and a general partner of Golden Eagle Capital L.P. (the “Partnership”), Mr. Yeh may be deemed to have beneficial ownership of the 3,038,163 shares and 7,579,837 shares held by the Trust and Partnership, respectively. Mr. Yeh disclaims beneficial ownership of the shares held by the Partnership except to the extent of his pecuniary interest therein.
** Percentage of shares reported is based upon 115,577,234 shares of Common Stock outstanding, consisting of 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010), plus 178,125 shares of Common Stock that are subject to options held by Mr. Yeh that are exercisable within 60 days of March 15, 2010.


CUSIP No. 827057 10 0

  Page 3 of 8 Pages

 

  1.   

Names of Reporting Persons:

Deborah Yeon-May Yeh

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions):

(a)  x

(b)  ¨

  3.  

SEC Use Only:

  4.  

Source of Funds (See Instructions):

PF, OO

  5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):    ¨
  6.  

Citizenship or Place of Organization:

United States

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

     7.    

Sole Voting Power:

0

     8.   

Shared Voting Power:

10,618,000

     9.   

Sole Dispositive Power:

0

   10.   

Shared Dispositive Power:

10,618,000

11.

 

Aggregate Amount Beneficially Owned by Each Reporting Person:

10,618,000*

12.

  Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):    ¨

13.

 

Percent of Class Represented by Amount in Row (11):

9.2%**

14.

 

Type of Reporting Person (See Instructions):

IN

 

* By virtue of her status as a trustee of the Yeh Family Trust U/T/D dated August 14, 1995 (the “Trust”) and a general partner of Golden Eagle Capital L.P. (the “Partnership”), Mrs. Yeh may be deemed to have beneficial ownership of the 3,038,163 shares and 7,579,837 shares held by the Trust and Partnership, respectively. Mrs. Yeh disclaims beneficial ownership of the shares held by the Partnership except to the extent of her pecuniary interest therein.
** Percentage of shares reported is based upon 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010).


CUSIP No. 827057 10 0

  Page 4 of 8 Pages

 

  1.   

Names of Reporting Persons:

Golden Eagle Capital L.P.

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions):

(a)  x

(b)  ¨

  3.  

SEC Use Only:

  4.  

Source of Funds (See Instructions):

PF, OO

  5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):    ¨
  6.  

Citizenship or Place of Organization:

California

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

     7.    

Sole Voting Power:

0

     8.   

Shared Voting Power:

7,579,837

     9.   

Sole Dispositive Power:

0

   10.   

Shared Dispositive Power:

7,579,837

11.

 

Aggregate Amount Beneficially Owned by Each Reporting Person:

7,579,837*

12.

  Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):    ¨

13.

 

Percent of Class Represented by Amount in Row (11):

6.6%**

14.

 

Type of Reporting Person (See Instructions):

PN

 

* By virtue of their status as general partners of Golden Eagle Capital L.P. (the “Partnership”), each of Mr. Yeh and Mrs. Yeh may be deemed to have beneficial ownership of the 7,579,837 shares held by the Partnership.
** Percentage of shares reported is based upon 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010).


CUSIP No. 827057 10 0

  Page 5 of 8 Pages

 

  1.   

Names of Reporting Persons:

Yeh Family Trust U/T/D dated August 14, 1995

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions):

(a)  x

(b)  ¨

  3.  

SEC Use Only:

  4.  

Source of Funds (See Instructions):

PF, OO

  5.   Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):    ¨
  6.  

Citizenship or Place of Organization:

California

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

     7.    

Sole Voting Power:

0

     8.   

Shared Voting Power:

3,038,163

     9.   

Sole Dispositive Power:

0

   10.   

Shared Dispositive Power:

3,038,163

11.

 

Aggregate Amount Beneficially Owned by Each Reporting Person:

3,038,163*

12.

  Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions):    ¨

13.

 

Percent of Class Represented by Amount in Row (11):

2.6%**

14.

 

Type of Reporting Person (See Instructions):

OO

 

* By virtue of their status as trustees of the Yeh Family Trust U/T/D dated August 14, 1995 (the “Trust”), each of Mr. Yeh and Mrs. Yeh may be deemed to have beneficial ownership of the 3,038,163 shares held by the Trust.
** Percentage of shares reported is based upon 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010).


  Page 6 of 8 Pages

 

Item 1. Security and Issuer.

This Amendment No. 2 to Schedule 13D (this “Amendment No. 2”) by (i) Bing Yeh, (ii) Deborah Yeon-May Yeh, (iii) Golden Eagle Capital L.P. (the Partnership) and (iv) Yeh Family Trust U/T/D dated August 14, 1995 (the Trust, and collectively, the “Reporting Persons”) amends and supplements the statement on Schedule 13D originally filed on January 12, 2010, as amended by that certain Amendment No. 1 to Schedule 13D filed on February 8, 2010 (the “Original Schedule 13D” and as amended and supplemented by this Amendment No. 2, the “Schedule 13D”), relating to the common stock, no par value (“Common Stock”), of Silicon Storage Technology, Inc., a California corporation (the “Issuer”). The principal executive offices of the Issuer are located at 1020 Kifer Road, Sunnyvale, California 94086.

 

Item 4. Purpose of Transaction.

Item 4 of the Schedule 13D is hereby amended to delete the paragraph added to Item 4 pursuant to Amendment No. 1 to Schedule 13D and to replace such paragraph with the following:

On February 2, 2010, the Issuer entered into an Agreement and Plan of Merger (the “Subsequent Merger Agreement”), with Microchip Technology Incorporated, a Delaware corporation (“New Parent”), and Sun Acquisition Corporation, a California corporation and a wholly owned subsidiary of New Parent (“New Merger Sub”), pursuant which, and upon the terms and subject to the conditions thereof, New Merger Sub will be merged with and into the Issuer and each outstanding share of Common Stock (other than shares as to which dissenters’ rights have been properly exercised) will be converted into the right to receive $2.85, without interest (the “New Merger”). Also on February 2, 2010 and prior to entering into the Subsequent Merger Agreement, the Issuer terminated the Merger Agreement. Pursuant to their terms, the Contribution Agreement and the Voting Agreement terminated automatically upon termination of the Merger Agreement.

On February 22, 2010, the Issuer entered into an Amendment No. 1 to the Subsequent Merger Agreement, pursuant to which the aggregate consideration payable by New Parent to the Issuer’s shareholders in connection with the New Merger was increased from $2.85 per share to $3.00 per share, without interest.

On March 8, 2010, the Issuer entered into an Amendment No. 2 to the Subsequent Merger Agreement, pursuant to which the aggregate consideration payable by New Parent to the Issuer’s shareholders in connection with the New Merger was increased from $3.00 per share to $3.05 per share, without interest.

At the request of the Issuer, the Reporting Persons entered into a Voting Agreement, dated as of March 15, 2010 with the Issuer (the “Subsequent Voting Agreement”), pursuant to which each of the Reporting Persons agreed: (i) to vote, and to grant to Edward Yang an irrevocable proxy to vote, all of the shares of Common Stock beneficially owned by such Reporting Person, (a) in favor of the New Merger and the Subsequent Merger Agreement, (b) in favor of any other matter necessary to the consummation of the transactions contemplated in the Subsequent Merger Agreement, and (c) notwithstanding the voting requirements described in (a) and (b) above, if the Issuer has received a proposal to enter into an alternate agreement (an “Alternate Acquisition Agreement”), which causes the Issuer to elect to terminate the Subsequent Merger Agreement or a future Alternate Acquisition Agreement because such proposal constitutes a superior proposal under the Subsequent Merger Agreement or a future Alternate Acquisition Agreement and the Issuer’s board of directors’ (or the Strategic Committee’s) recommendation in favor such Alternate Acquisition Agreement remains effective, then, at the request of the Issuer’s board of directors or Strategic Committee, in favor of such Alternate Acquisition Agreement including actions required in furtherance thereof; (ii) not to sell, assign, transfer, lien, pledge dispose of or otherwise encumber any of the shares subject to the Subsequent Voting Agreement; (iii) not to deposit any shares subject to the Subsequent Voting Agreement into a voting trust or grant any proxy or power of attorney with respect to such shares that is inconsistent with the Subsequent Voting Agreement, and (iv) not enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer or other disposition of any shares subject to the Subsequent Voting Agreement. The Subsequent Voting Agreement provides that Issuer shall indemnify the Reporting Persons for costs, expenses, judgments, fines, losses, settlements payments, claims, penalties, damages and other liabilities incurred by such Reporting Persons in connection with the transactions contemplated thereby, or resulting from such Reporting Persons entering into or performing the Subsequent Voting Agreement. The Subsequent Voting Agreement will terminate upon the earliest of (a) the closing of the transactions contemplated in the Subsequent Merger Agreement (or any Alternate Acquisition Agreement), (b) May 31, 2010 and (c) any actual or attempted sale, assignment, transfer, pledge, lien, disposition, or encumbrance of the Subsequent Voting Agreement or proxy provided for therein by the Issuer.

The foregoing descriptions of the Subsequent Merger Agreement, the Amendment No. 1 to the Subsequent Merger Agreement, the Amendment No. 2 to the Subsequent Merger Agreement and the Subsequent Voting Agreement are qualified in their entirety by reference to the Subsequent Merger Agreement, the Amendment No. 1 to the Subsequent Merger Agreement, the Amendment No. 2 to the Subsequent Merger Agreement and the Subsequent Voting Agreement, which are filed as Exhibits 99.7 through 99.10 hereto, and are incorporated herein by reference.


  Page 7 of 8 Pages

 

Item 5. Interest in Securities of the Issuer.

Clauses (a)-(b) of Item 5 of the Schedule 13D are hereby amended and restated in their entirety as follows:

(a)-(b) Each of Mr. Yeh and Mrs. Yeh has shared power to direct the vote or disposition of 10,618,000 shares of Common Stock, of which 3,038,163 shares are held by the Trust and 7,579,837 shares are held by the Partnership. Mr. Yeh has sole power to direct the vote or disposition of 90,000 shares of Common Stock held by him in an IRA account and 178,125 shares of Common Stock that are subject to options held by him that are exercisable within 60 days of March 15, 2010. Accordingly, the respective percentages of shares of Common Stock beneficially owned by Mr. Yeh and Mrs. Yeh, respectively, are approximately 9.4%1 and approximately 9.2%2 of the class.

The Trust and the Partnership have no power to direct the vote or disposition of any of the shares, but as members of a group with Mr. Yeh and Mrs. Yeh, each is deemed to beneficially own and share voting and dispositive power over the shares of the Common Stock beneficially owned by Mr. Yeh and Mrs. Yeh.

Except as expressly set forth in this Schedule, each Reporting Person disclaims beneficial ownership of the shares of Common Stock beneficially owned by any other Reporting Person.

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Item 6 of the Schedule 13D is hereby amended to include the following:

The information set forth in Item 4 of this Amendment No. 2 is incorporated herein by reference.

 

Item 7. Material to be Filed as Exhibits.

Item 7 of the Schedule 13D is hereby amended to include the following exhibits:

 

Exhibit

Title

 

99.7

Agreement and Plan of Merger, dated as of February 2, 2010, by and among Silicon Storage Technology, Inc., Microchip Technology Incorporated, and Sun Acquisition Corporation (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Silicon Storage Technology, Inc. on February 3, 2010 (File No. 000-26944)).

 

99.8

Amendment No. 1 to Agreement and Plan of Merger, dated as of February 22, 2010, (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed by Silicon Storage Technology, Inc. on February 23, 2010 (File No. 000-26944)).

 

99.9

Amendment No. 2 to Agreement and Plan of Merger, dated as of March 8, 2010, (incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K filed by Silicon Storage Technology, Inc. on March 8, 2010 (File No. 000-26944)).

 

99.10

Voting Agreement, dated March 15, 2010, by and among Silicon Storage Technology, Inc., Bing Yeh, Deborah Yeon-May Yeh, Golden Eagle Capital L.P. and the Yeh Family Trust U/T/D dated August 14, 1995.

 

1

Percentage of shares reported is based upon 115,577,234 shares of Common Stock outstanding, consisting of 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010), plus 178,125 shares of Common Stock that are subject to options held by Mr. Yeh that are exercisable within 60 days of March 15, 2010.

2

Based upon 115,399,109 shares of Common Stock issued and outstanding as of March 15, 2010 (as reported by the Issuer to the Reporting Persons on March 16, 2010).


  Page 8 of 8 Pages

 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

March 16, 2010
Date
/s/ Bing Yeh
Bing Yeh
/s/ Deborah Yeon-May Yeh
Deborah Yeon-May Yeh

 

GOLDEN EAGLE CAPITAL, L.P.
By:    /s/ Bing Yeh
  Bing Yeh, General Partner
By:    /s/ Deborah Yeon-May Yeh
  Deborah Yeon-May Yeh, General Partner

 

YEH FAMILY TRUST U/T/D DATED AUGUST 14, 1995
By:   

Bing Yeh and Deborah Yeon-May Yeh,

as Co-Trustees of the Yeh Family Trust

U/T/D dated August 14, 1995

By:    /s/ Bing Yeh
  Bing Yeh, Trustee
By:    /s/ Deborah Yeon-May Yeh
  Deborah Yeon-May Yeh, Trustee
EX-99.10 2 dex9910.htm VOTING AGREEMENT Voting Agreement

Exhibit 99.10

VOTING AGREEMENT

VOTING AGREEMENT, dated as of March 15, 2010 (this “Agreement”), among Silicon Storage Technology, Inc., a California corporation (the “Company”), and Bing Yeh, Deborah Yeon-May Yeh, Golden Eagle Capital L.P. and Yeh Family Trust U/T/D dated August 14, 1995 (individually, each, a “Shareholder” and, collectively, the “Shareholders”).

WHEREAS, as of the date hereof, and except as noted on Exhibit A hereto and other than (i) pursuant to this Agreement and (ii) to the extent, if any, otherwise set forth in the term sheet signed December 28, 2009 by Bing Yeh with Cerberus Capital Management, L.P. (the “Term Sheet”), each Shareholder, severally and not jointly, represents and warrants to the Company that he, she or it owns of record and beneficially and has good, valid and marketable title to, free and clear of any Lien, proxy, voting restriction, limitation on disposition, adverse claim of ownership or use or encumbrance of any kind, and has the sole power to vote and full right, power and authority to sell, transfer and deliver, the number of shares of common stock, no par value per share, of the Company (“Company Common Stock”) as set forth opposite such Shareholder’s name on Exhibit A hereto (all such shares of Company Common Stock and any shares of Company Common Stock of which ownership of record or the power to vote is hereafter acquired by the Shareholder prior to the termination of this Agreement being referred to herein as the “Shares”); and

WHEREAS, the Company is currently a party to that certain Agreement and Plan of Merger, dated February 2, 2010, as amended, by and among the Company, Microchip Technology Incorporated, a Delaware corporation (“Parent”) and Sun Acquisition Corporation, a Delaware corporation (“Merger Sub”) (the “Merger Agreement”; terms used but not defined in this Agreement shall have the meanings ascribed to them in the Merger Agreement), which provides, upon the terms and subject to the conditions thereof, for the merger of Merger Sub with and into the Company (the “Merger”);

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Shareholder hereby agrees as follows:

1. Agreement to Vote Shares; Grant of Proxy. In compliance with the provisions of Section 706(a) of the CCC, each Shareholder, by this Agreement, with respect to such Shareholder’s Shares, severally and not jointly, hereby agrees to vote, at any meeting of the shareholders of the Company, and in any action by written consent of the shareholders of the Company, all of such Shareholder’s Shares (a) in favor of the approval of the principal terms of the Merger and the adoption of the Merger Agreement, and (b) in favor of any other matter necessary to the consummation of the transactions contemplated by the Merger Agreement and considered and voted upon by the shareholders of the Company and (c) notwithstanding the foregoing provisions of this Section 1, so long as (i) the Company has received a proposal to enter into an alternate agreement (an “Alternate Acquisition Agreement”), which causes the Company to elect to terminate the Merger Agreement, or a future Alternate Acquisition Agreement, because such proposal constitutes a Superior Proposal pursuant to the Merger Agreement or any future Alternate Acquisition Agreement, in order to enter into an Alternate Acquisition Agreement implementing any such Superior Proposal (each such event, a “Superior Proposal Event”) and (ii) the Company Board’s (or the Strategic Committee’s) recommendation in favor of the adoption of any such Alternate Acquisition Agreement remains in effect and has not been adversely modified or withdrawn, then if the Company Board or the Strategic Committee request in writing, at any meeting of the holders of Common Stock for the purpose of voting on the principal terms of the transactions contemplated by, and adoption of, any such Alternate Acquisition Agreement, however called, and at every adjournment or postponement thereof, in favor of the approval of the principal terms


of the transactions contemplated by, and adoption of, any Alternate Acquisition Agreement, including any action required in furtherance thereof. Each Shareholder, severally and not jointly, further agrees to grant a proxy to Edward Yang (and agrees to execute such documents or certificates evidencing such proxy as the foregoing may reasonably request) to vote such Shareholder’s Shares in accordance with the foregoing. AS PERMITTED PURSUANT TO SECTION 705(e)(5) OF THE CCC, THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN INTEREST. Notwithstanding another provision of this Agreement, the Company may not sell, assign, transfer (including by operation of law), lien, pledge, dispose or otherwise encumber this Agreement or the proxy granted hereby and any actual or attempted sale, assignment, transfer, pledge, lien, pledge, disposition or encumbrance of this Agreement or such proxy by the Company shall be void, shall not vest any rights in any person or entity and shall result in the immediate termination of this Agreement and such proxy.

2. Transfer of Shares. Each Shareholder agrees, severally and not jointly, that he, she or it shall not, directly or indirectly, (a) sell, assign, transfer (including by operation of law), lien, pledge, dispose of or otherwise encumber any of the Shares or otherwise agree to do any of the foregoing, (b) deposit any Shares into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement, or (c) enter into any contract, option or other arrangement or undertaking with respect to the direct or indirect acquisition or sale, assignment, transfer (including by operation of law) or other disposition of any Shares.

3. Termination. The obligations of each Shareholder under this Agreement shall terminate upon the earliest of (i) the closing of the transaction contemplated by the Merger Agreement (or any Alternate Acquisition Agreement), (ii) May 31, 2010 and (iii) any actual or attempted sale, assignment, transfer, pledge, lien, pledge, disposition or encumbrance of this Agreement or proxy referred to in Section 1. Nothing in this Section 3 shall relieve any party of liability for any breach of this Agreement.

4. Term Sheet. Notwithstanding any other provision of this Agreement, no Shareholder shall be required to take, or refrain from taking, any action that would result in Bing Yeh being in breach of, or incurring any liability under, the Term Sheet.

5. Third Party Beneficiaries. Except with respect to Parent, Merger Sub, and any subsequent purchaser pursuant to any Alternate Acquisition Agreement, who are expressly third party beneficiaries of this Agreement, this Agreement is not intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.

6. Indemnification.

(a) The Company shall indemnify, defend and hold harmless each Shareholder and, if applicable, such Shareholder’s partners and trustees (the “Indemnified Parties”), against any payments made or payable by any Indemnified Party in respect of (i) costs and expenses (including reasonable attorneys’ fees) incurred, (ii) judgments, fines, losses, amounts paid in settlement, claims, penalties and damages incurred or suffered and (iii) liabilities incurred by any Indemnified Party arising by reason of such Shareholder entering into and performing this Agreement, whether civil, criminal, administrative or investigative (including the advancement of reasonable attorney’s fees and disbursements, which shall be paid, reimbursed or advanced by the Company on a monthly basis prior to the final disposition thereof without the requirement of any bond or other security).

(b) After receipt by an Indemnified Party of notice of its involvement in any new action, suit, proceeding, arbitration or investigation arising after the date hereof, the Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against the Company pursuant to

 

2-


Section 6(a), promptly notify the Company of such involvement. Failure by an Indemnified Party to so notify the Company shall relieve the Company from the obligation to indemnify the Indemnified Party pursuant to this Section 6 only to the extent that the Company suffers actual prejudice as a result of such failure. The Company shall be entitled to assume the defense of any such action, suit, proceeding, arbitration or investigation as well as any action, suit, proceeding, arbitration or investigation existing prior to the date hereof and subject to indemnification pursuant to Section 6(a), with counsel reasonably satisfactory to the Indemnified Party. Without limiting the Company’s obligation to indemnify, defend and hold harmless the Indemnified Party pursuant to Section 6(a), upon assumption by the Company of the defense of any such action, suit, proceeding, arbitration or investigation, the Indemnified Party shall have the right to participate in such action, suit, proceeding, arbitration or investigation and to retain its own counsel at the Company’s expense; provided, however, that the Company shall not, in connection with any one such action, suit, proceeding, arbitration or investigation or separate but substantially similar actions, suits, proceedings, arbitrations or investigations arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties, except to the extent that local counsel, in addition to its regular counsel, is required in order to effectively defend against such action, suit, proceeding, arbitration or investigation. The Company shall not consent to the terms of any compromise or settlement of any action, suit, proceeding, arbitration or investigation defended by the Company in accordance with the foregoing without the prior written consent of the Indemnified Party, unless such compromise or settlement (i) includes an unconditional release of the Indemnified Party from all liability arising out of such action, suit, proceeding, arbitration or investigation and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party.

(c) With respect to Bing Yeh only in his capacity as an officer and director of the Company, nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights to insurance claims under any policy that is or has been in existence with respect to the Company or any of its directors, agents or shareholders, it being understood and agreed that the indemnification provided for in this Section 6 is not prior to or in substitution for any such claims under such policies.

(d) If the Company or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any one Person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Company shall assume the obligations set forth in this Section 5. In the event the Company enters into an Alternate Acquisition Agreement, it shall take all actions necessary to ensure that such Alternate Acquisition Agreement contains a provision regarding the acquiror’s and the surviving corporation’s continuation of director and officer indemnification rights that is substantively equivalent to Section 6.7 of the Merger Agreement.

(e) The rights of Bing Yeh, in his capacity as an officer and director of the Company, under this Section 6 shall be in addition to any rights he may have under the charter or bylaws of the Company or any of its subsidiaries, under California law or any other applicable Laws or under any agreement of Bing Yeh, in his capacity as an officer and director of the Company, with the Company or any of its subsidiaries. These rights shall survive the termination of this Agreement and consummation of any acquisition of the Company and are intended to benefit, and shall be enforceable by, Bing Yeh.

7. Miscellaneous. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Company, whether or not the transactions contemplated hereby are consummated; all notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be

 

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deemed to have been duly given upon receipt) by delivery in person, by telecopy or e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the Company, c/o James Boyd, Chief Financial Officer at 1020 Kifer Road, Sunnyvale, CA 94086 (Facsimile No: (408) 735-9036/email: jboyd@sst.com), and to any Shareholder, c/o Bing Yeh at P.O. Box 4848, Mountain View, California 94040; if any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party; this Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof; this Agreement shall not be assigned (whether pursuant to a merger, by operation of law or otherwise); this Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement; the parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy at law or in equity; this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed in that State; this Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement; from time to time, at the request of the Company, in the case of any Shareholder, or at the request of any Shareholder, in the case of the Company, and without further consideration, each party shall execute and deliver or cause to be executed and delivered such additional documents and instruments and take all such further action as may be reasonably necessary or desirable to consummate the transactions contemplated by this Agreement; each of the parties hereto hereby waives to the fullest extent permitted by applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the transactions contemplated hereby. Notwithstanding any of the provisions of this Agreement, the parties acknowledge that Bing Yeh is a director of the Company and agree that he will act in his capacity as a director of the Company solely in accordance with his duties to the Company and its shareholders.

[Remainder of Page Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

SILICON STORAGE TECHNOLOGY, INC.
/s/ James B. Boyd

Name: James Boyd

Title: Chief Financial Officer

/s/ Bing Yeh
Bing Yeh
/s/ Deborah Yeon-May Yeh
Deborah Yeon-May Yeh

 

GOLDEN EAGLE CAPITAL, L.P.
By:   /s/ Bing Yeh
  Bing Yeh, General Partner
By:   /s/ Deborah Yeon-May Yeh
  Deborah Yeon-May Yeh, General Partner
YEH FAMILY TRUST U/T/D DATED AUGUST 14, 1995

By:

 

Bing Yeh and Deborah Yeon-May Yeh,

as Co-Trustees of the Yeh Family Trust

U/T/D dated August 14, 1995

By:   /s/ Bing Yeh
  Bing Yeh, Trustee
By:   /s/ Deborah Yeon-May Yeh
  Deborah Yeon-May Yeh, Trustee


EXHIBIT A

SHARES

 

Name of Shareholder

   Number of Shares of Company
Common Stock Owned
Beneficially and of Record
 

Bing Yeh

   10,894,876 1 

Deborah Yeon-May Yeh

   10,618,000   

Yeh Family Trust U/T/D dated August 14, 1995

   3,038,163   

Golden Eagle Capital L.P.

   7,579,837   

 

1

Includes options to purchase 186,276 shares of Company Common Stock upon the exercise of stock options exercisable within 60 days of February 2, 2010. These underlying shares are not “owned of record”.

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