Atmel mails proxy materials for special meeting, urges stockholders to vote against Perlegos proposal

By Lisa Kerner

Charlotte, N.C., April 11 - Atmel Corp. began mailing definitive proxy materials on Wednesday to Atmel stockholders for the company's special meeting on May 18 called by former chairman and chief executive officer George Perlegos. Stockholders of record as of April 5 are entitled to vote at the special meeting.

Perlegos, along with his brother Gust Perlegos, was terminated for cause in August 2006 by a special independent committee of Atmel's board of directors after an eight-month investigation into the misuse of corporate travel funds, including $235,000 worth of company airline tickets used for personal travel by senior management and their family members.

The purpose of the May 18 meeting is to vote on the removal of the five directors who terminated Perlegos, to replace them with Perlegos' own slate of nominees and to return Perlegos as the company's CEO, according to a company news release.

On March 23, Atmel filed a lawsuit against George Perlegos and Gust Perlegos claiming the pair are using false and misleading proxy materials in their proxy campaign to replace Atmel's CEO and its independent directors at the May 18 meeting.

In addition to the definitive proxy materials, Atmel mailed a letter to its stockholders urging them to vote against the Perlegos proposal.

The letter, signed by current president and chief executive officer Steven Laub, also outlines Perlegos' attempts to be reinstated through the court system. According to the letter, Perlegos' 20-year legacy at Atmel led to total losses of more than $1.2 billion in the last five years. Under Perlegos, Atmel failed to file a 10-Q report due to a stock option investigation and the company failed to fully execute an authorized share repurchase.

"We believe electing the Perlegos slate would send the wrong message to our employees, customers, suppliers and other constituents and signal a return to George Perlegos' legacy of ethical failures and financial losses," the letter stated.

The board and Atmel's new management team said they have taken actions, including a 16% workforce reduction, to save between $70 million and $80 million this year alone, and some $80 million to $95 million annual savings are expected beginning in 2008.

Atmel, based in San Jose, Calif., designs and manufactures microcontrollers, advanced logic, mixed-signal, nonvolatile memory and radio frequency components.

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