Micrel, Obrem continue to spar over director nominees, proxy voting services reports

By Lisa Kerner

Charlotte, N.C., May 13 - Micrel, Inc. said proxy advisory service RiskMetrics recommended the company's shareholders vote against proposals made by Obrem Capital Management, LLC at Micrel's special meeting on May 20.

According to Micrel, independent proxy voting services Glass Lewis & Co. and Egan-Jones also recommended shareholders vote against Obrem's proposals.

Obrem's proposals include replacing Micrel's board of directors and rescinding the company's shareholder rights plan, a Micrel news release said.

Micrel's release cited RiskMetrics' opinion that the company has performed "largely in line with its peers" and that now is not the time to sell Micrel.

However, Micrel said it disagrees with RiskMetrics' suggestion that the company's board expand to include one of Obrem's nominees.

"Of the two Obrem nominees who RiskMetrics suggests, one's semiconductor experience is limited to sales and the other has zero operational experience," Micrel said in the release.

"We believe our current board is vastly more qualified than Obrem's nominees and possesses the right blend of deep strategic, senior executive, operational and public company board expertise inside and outside of the semiconductor industry," Micrel added.

Micrel believes that Obrem's only agenda is to sell Micrel during extremely challenging market conditions.

Obrem, in response to Micrel, encouraged shareholders to discount Micrel's "misleading allegations" about the investor's intentions and once again asked them to hold the board accountable "for a decade of broken promises and underperformance" by electing Obrem's director nominees.

"RiskMetrics has recognized the need for change at Micrel, and has recommended that shareholders hold Micrel management accountable by not voting management's card and expanding the board to six members," Obrem said in a statement released on Tuesday.

The RiskMetrics report, according to Obrem, said that the "inclusion of outside directors with relevant industry and financial market expertise would help provide greater management oversight."

Regarding its nominees' experience, Obrem cited Keith Kolerus' operational background at National Semiconductor and Eric Gomberg's prior financial market experience as managing director and senior semiconductor analyst at Thomas Weisel Partners.

Gomberg is currently a senior investment analyst at Obrem, and Kolerus is former chairman of the board of ACI Electronics, according to a prior Obrem news release.

According to Obrem, Glass Lewis' report indicated shareholders should vote to recommend Micrel's board rescind its poison pill, which Glass Lewis said is "contrary to the interest of shareholders."

In addition, Obrem maintains that Glass Lewis "specifically recommended that shareholders remove David Conrath from Micrel's current board and elect in his place one of Obrem's nominees."

On May 12, Micrel sent a letter to its shareholders urging them to reject Obrem's proposals and director nominees, citing the May 6 Glass Lewis report.

In addition to Kolerus and Gomberg, Obrem's director nominees are:

• Bill Bradford, a co-founder and general partner of Saguaro Ventures;

• Keith R. Gollust, a founding partner of Gollust, Tierney, and Oliver, a private investment firm;

• Ben Goren, a principal at GCG Capital; and

• Andrew Rechtschaffen, founder and managing member of Obrem Capital Management.

Micrel develops and manufactures high-performance analog power integrated circuits (ICs), mixed-signal ICs and digital ICs. The company is based in San Jose, Calif.

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