Silicon Storage agrees to have Riley as board nominee

By Jennifer Chiou

New York, May 23 - Riley Investment Partners Master Fund, LP entered into an agreement with Silicon Storage Technology, Inc., under which Silicon is obligated to include Bryant Riley in its board's slate of nominees for election as a director at its 2008 annual meeting, according to a letter included in a schedule 13D filing with the Securities and Exchange Commission.

Bryant Riley has a 5.6% stake in the company.

In addition, Silicon Storage must also use its reasonable best efforts to cause Riley's election at the meeting.

According to the filing, if and when elected, Riley will be appointed to the compensation committee and nominating corporate governance committee of the board.

Under the agreement, the committee will use its reasonable best efforts to appoint one additional member to the board as promptly as practicable, who will be unanimously approved by the committee.

In addition, Riley Investment agreed to withdraw its nomination letter for the 2008 annual meeting.

On April 10, Riley nominated Bryant Riley, Eric Singer, Melvin Keating and Bob D'Agostino for election to the board of directors of Silicon Storage at the company's 2008 annual meeting.

Riley Investment Partners previously said that the goal of its nominees is to maximize the potential of Silicon Storage's assets "while generating consistent superior financial returns for shareholders and fostering a positive environment for employees."

In January, Riley Investment Partners said it looked forward to reviewing the company's delinquent financial reports that were to be filed by Jan. 15.

The investor hinted in September 2007 that it may nominate directors to Silicon Storage's board if the company did not share its sense of urgency regarding the company's undervalued shares.

At that time, the reporting persons owned about 5 million shares, or 4.9%, of the company's outstanding stock, a prior SEC filing said.

Silicon Storage, based in Sunnyvale, Calif., provides flash memory semiconductor devices for the digital consumer, networking, wireless communications and internet computing markets.

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