Zarlink won't name independent chair for contentious leadership vote

By Julie A. Miller

Washington, July 18 - Zarlink Semiconductor Inc. has rejected the request of a shareholders' group for an independent chairman to oversee voting at its July 23 annual meeting, the dissidents said in a statement.

"The Concerned Shareholders believe it is not possible for Henry Simon, chairman of the current Board, to objectively oversee a vote which will determine whether he continues in his present position," the statement said, noting that the chairman will rule on the validity of proxies voted at the meeting. The group has previously contended that company officials threatened to disenfranchise shareholders who vote with them.

"Henry Simon's conflict of interest is clear and the rejection of our reasonable request is yet another example of entrenchment by this board and their protection of CEO Kirk Mandy," said Scott Leckie, a leader of the dissident group.

"Zarlink has acknowledged the impossible position of the chairman by engaging separate legal counsel for him, but this is certainly not enough to ensure that all shareholder votes will be treated fairly."

The shareholder group, with a 5.9% interest in Zarlink, is led by Leckie, Daniel Owen and David Banks, who the group intends to name interim CEO. Leckie's group asked shareholders to use its blue proxy to vote for Banks, Owen, Neil Carragher, Kalai Kalaichelvan and Luke Smith, as well as for management nominees Adam Chowaniec, Hubert Lacroix and Spencer Lanthier.

The group cites what it describes as Zarlink's chronic underperformance over the past several years, poor financial results and loss of share value.

Zarlink responded Friday by posting information on its web site critical of the opposition leaders and defending the company's performance and future plans. The statements do not mention the request for an independent chairman for the meeting.

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

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