All management directors re-elected in Zarlink proxy vote

By Jennifer Chiou

New York, July 24 - Zarlink Semiconductor Inc. said that all eight of its directors were re-elected following the results of its proxy vote from its shareholders' meeting.

"We will see growing profitability throughout this year as we continue to work to improve shareholder value for the near- and long-term," Henry Simon, Zilog's chairman of the board of directors, said in a news release.

The following Zarlink directors were re-elected: Simon, Kirk K. Mandy, Hubert T. Lacroix, J. Spencer Lanthier, Jules Meunier, Dennis A. Roberson, Oleg Khaykin and Adam Chowaniec.

On July 15, the company said that advisory firms Glass, Lewis & Co. and Proxy Governance, Inc. recommended that shareholders vote for the company's slate of directors.

Zarlink previously said that Proxy Governance recommended shareholders reject the five individuals nominated by the Concerned Shareholders of Zarlink group.

Members of the Concerned Shareholders include Scott Leckie, who manages funds owning the second-largest holding in the company, as well as David Banks and Daniel Owen. Together, they own or control more than 5.9% of Zarlink's shares, it was previously reported.

As already noted, the group said if its candidates were elected, the new board would move immediately to replace Zarlink president and chief executive officer Mandy.

Proxy Governance previously questioned the group's plan to halt Zarlink's actions, noting that the group's plans are "far less compelling" than its frustration with the company.

Glass Lewis noted that while the Concerned Shareholders planned to replace Mandy, they failed to identify a permanent candidate for the position.

In addition, Zarlink already said the Glass Lewis report found the group's plan for the company is not significantly different that Zarlink's own stated strategic plan.

On July 18, Zarlink rejected the request of the shareholders' group for an independent chairman to oversee voting at the annual meeting.

According to the dissident group in a previous release, RiskMetrics Group/ISS recommended that shareholders do not vote for three of the management nominees, all members of the compensation committee: Chowaniec, Meunier and Roberson.

The Concerned Shareholders said shareholder value has been damaged by the $390,000 in bonuses paid to management and Mandy, as well as the $137 million acquisition of Legerity Holdings Inc. in 2007.

Leckie's group previously asked Zarlink shareholders to use the blue proxy to vote for Banks, Owen, Neil Carragher, Kalai Kalaichelvan and Luke Smith, as well as for management nominees Chowaniec, Lacroix and Lanthier.

Located in Ottawa, Zarlink designs, manufactures and distributes semiconductors in Europe, Asia Pacific, the United States and Canada.

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