Atmel urges shareholders to vote down Perlegos' corporate shake-up campaign

By Colleen Taylor, Contributing Editor -- 4/23/2007

In the latest round of sparring between Atmel Corp. http://www.atmel.com and the company's former CEO George Perlegos, Atmel has mailed to its stockholders a letter detailing what it says are "false and misleading claims" made by Perlegos and his nominees to replace Atmel's board of directors in an effort to dissuade them from voting in favor of his restructuring campaign.

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."

Last week, Perlegos officially filed a proposal with the Securities and Exchange Commission (SEC) aimed at replacing five of the company's board members and "drive shareholder value" at Atmel by 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.

In a letter dated April 23, Atmel campaigns heartily against Perlegos' moves for a major corporate shake-up, urging its shareholders not to be "misled" by George Perlegos and his nominees.

"George Perlegos has hired eight individuals, at the rate of $50,000 per candidate for the special meeting alone, to serve as his hand-picked nominees as part of his continuing campaign to replace the independent directors who terminated him for cause because he misappropriated (shareholders') money," the company said in the letter signed by David Sugishita, Atmel's current chairman.

According to Atmel, Perlegos and his nominees have "grossly mischaracterized" the company's independent investigation of Perlegos' alleged misuse of corporate funds and a Delaware court's ruling on Perlegos' claims of "unlawful and improper" dismissal from the company. Atmel maintains that the Delaware court ruled in favor of the company, and that Perlegos was indeed properly terminated.

The vote on Perlegos' proposals is expected to take place at the company's shareholder meeting on May 18.

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