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Battle Erupts Over Atmel Control Amid Stock Probe

Atmel's president and three others were also fired over alleged misuse of corporate travel funds.
SAN JOSE, Calif. — A battle over the control of troubled Atmel Corp. has erupted amid a stock-option probe, the alleged misuse of travel funds, a proxy fight, a lawsuit and other bizarre events.

As reported, Atmel Monday (August 7) disclosed that it has fired George Perlegos, its president and chief executive, and three others over alleged misuse of corporate travel funds. Atmel, based here, named Steven Laub, currently a director, as the company's president and CEO, effective immediately.

Prior to this announcement, there were a chain of bizarre events over the weekend, including moves to gain control of Atmel. This follows a stock-option probe at Atmel and a various cost-cutting actions, including a move to sell a fab.

On Saturday (August 5), in his capacity as chairman of Atmel, George Perlegos said that he called a special meeting of Atmel's stockholders. The purpose of the meeting is to vote on the removal of the following directors: Pierre Fougere, T. Peter Thomas, Chaiho Kim, David Sugishita, and Laub.

The meeting, according to George Perlegos, will take place on October 5 or such other date as Atmel's board may fix.

Then, on Sunday (August 6), the five named directors purported to elect David Sugishita as chairman of Atmel's board and alleged to have cancelled the stockholders meeting called by George Perlegos.

"George Perlegos' decision to call the special meeting of stockholders followed an action taken on Saturday morning, August 5, 2006, by directors Fougere, Thomas, Kim, Sugishita, and Laub, who purported to terminate the employment of George Perlegos as Atmel's president and chief executive officer and the employment of Gust Perlegos as Atmel's executive vice president," according to a release issued by George Perlegos.

"Both George Perlegos and Gust Perlegos, who remain directors of Atmel, maintain that the purported terminations are unlawful and improper, and that the grounds cited for the purported terminations are baseless."

As a result, George Perlegos filed an injunctive action in a Delaware Chancery Court, challenging the cancellation of the meeting and directing that the meeting go forward.

Then, in what was billed as a proxy statement, George Perlegos issued the following letter to Mark A. Bertelsen, secretary, and the board:

Dear Mr. Bertelsen and Directors:

Pursuant to Section 2.3 of the Bylaws (the "Bylaws") of Atmel Corporation, a Delaware corporation ("Atmel"), in my capacity as Chairman of the Board of Directors of Atmel, I hereby call a special meeting of the stockholders of Atmel to be held on October 5, 2006 at the Company's principal executive office or at such other place as the Board of Directors may fix, for the purpose of voting on the removal from office without cause of the following directors: Pierre Fougere, T. Peter Thomas, Chaiho Kim, David Sugishita and Steven Laub.

Pursuant to Section 5.9 of the Bylaws, the Secretary "shall give, or cause to be given, notice of all meetings of the stockholders ... required to be given by law or these Bylaws." Accordingly, the Secretary is hereby directed to give prompt written notice of the calling of the Special Meeting to all stockholders of record as of the date next preceding the date notice is given or on a record date to be fixed by the Board of Directors at the special meeting of the directors to be held on August 6, 2006.

I ask Mr. Bertelsen to confirm to me immediately that he will comply with the requirements of the Atmel Bylaws and give, or cause to be given, notice of the Special Meeting. In addition, please provide me with a copy of the notice of the Special Meeting. Finally, please copy my attorney, Paul Alexander of Heller Erhman LLP, on all future correspondence.

Sincerely,

George Perlegos
Chairman of the Board of Directors
Atmel Corporation

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