Ousted Atmel CEO Perlegos files SEC proxy in campaign to revamp company's board

By Colleen Taylor, Contributing Editor -- Electronic News, 4/16/2007

The very public battle between Atmel Corp. and its ousted former CEO George Perlegos continues to heat up this week, as the May 18 date of the company's next shareholder meeting draws nearer.

Perlegos announced Monday the filing of the definitive proxy statement with the Securities and Exchange Commission (SEC) in connection with his planned campaign to replace five of Atmel's current board directors with nominees of his choosing. Perlegos, a founder of Atmel, led the company as president, CEO and chairman from its inception in 1984 until August 2006. He beneficially owns approximately 5.3 percent of Atmel's outstanding shares.

Perlegos has been at odds with Atmel since his August departure, when he was fired along with his brother and two other execs, over the alleged misuse of corporate travel funds. At that time, Perlegos filed suit against five of the board's directors and claiming in a statement that his termination was "unlawful and improper." In February, Delaware's Court of Chancery ruled in favor of Atmel in affirming that Perlegos and his brother were indeed properly terminated.

The definitive proxy statement he filed today outlines a plan to "drive shareholder value" at Atmel, including divesting non-core assets to make Atmel a pure-play microcontroller company, hiring a new president and CEO, and initiating a $500 million to $1 billion share repurchase program.

For its part, Atmel has publicly discouraged its shareholders from voting in favor of Perlegos' proposals.

"The fundamental question facing Atmel's stockholders is who has the commitment to and track record of taking the appropriate steps to drive enhanced stockholder returns," the company said in a statement released Monday. "We believe the answer is clear: Atmel's board and new management team have a record of acting in the best interests of Atmel's stockholders, and we will continue to take decisive and aggressive actions to unlock the value of the company."

"It's clear to us that Perlegos is pursuing a retaliatory proxy campaign to remove the five directors who fired him for cause, install his hand-picked CEO and reinstate himself as 'interim CEO,'" Atmel added in the statement.

Last week, Perlegos filed an answer and counterclaim to a lawsuit Atmel filed against him in late March in the U.S. District Court in the northern district of California alleging the violation of federal securities laws. In his counterclaim, Perlegos alleges that Atmel management overstated the benefits of the restructuring plan it announced in December which includes the closure of two fabs and about 1,300 job cuts.