OTTAWA, July 17 /CNW/ - The Concerned Shareholders of Zarlink
Semiconductor Inc. today reminded their fellow shareholders that the deadline
for voting their BLUE proxy for change at the Company is less than 24 hours
away - and that the current Board and CEO Kirk Mandy have failed to
demonstrate why they should continue to be entrusted with the direction of
The BLUE proxy gives shareholders the opportunity to vote to replace the
current Mandy Board with the Concerned Shareholder Nominees who bring a new
strategy, a new commitment to the creation of shareholder value at Zarlink,
and a proven record of value generation at other companies.
BLUE proxies provided by the Concerned Shareholders must be submitted by
5:00 p.m. Ottawa time on Friday, July 18 in order to be voted at the Company's
annual meeting scheduled for July 23, 2008.
The Concerned Shareholders are Scott Leckie, individually and through
funds he manages, as well as David Banks and Daniel Owen. Collectively they
own or control more than 5.9% of Zarlink's common shares. This aligns them
much more closely with the interests of other shareholders than the current
Board which holds less than 1% of the Company's common shares. The Concerned
Shareholders benefit from a new Zarlink Board only if all other shareholders
"The greatest risk for Zarlink shareholders is to leave the Company in
the hands of the Mandy Board which has destroyed 95% of the shareholder value
in six years," said Scott Leckie. "There is simply no reason to believe the
Mandy Board can turn this Company around."
The Concerned Shareholders note today's news release and paid advertising
by the Mandy Board and point out:
- The Mandy Board claims the Company is "extremely active" in trying to
"ensure the Company is positioned for success." But a Board and CEO
are not judged by "activity"; they are judged by results, which the
Mandy Board have failed to deliver. A decade of "positioning" has not
- The Mandy Board claims Zarlink "delivers higher-value solutions that
solve key problems for our customers" yet these customers are simply
not buying the solutions. Revenues have fallen for the past seven
years - excluding revenues from the Legerity acquisition which have
also declined and actually eroded the Company's financial strength
and shareholder value: Zarlink's market capitalization today is less
than the cost of that acquisition a year ago.
- The Mandy Board claims Zarlink is "establishing clear leadership in
target growth markets" and that it has market-leading customers in
each sector. But it does not claim to have market-leading products in
any sector, despite spending far more on R&D than its peers. It
cannot make that claim because none of its products are among the top
10 in its market segments. Leadership is what you do, not who you
- The Mandy Board claims Zarlink is demonstrating "significantly
improved financial performance". This is demonstrably false, as the
Company's results show.
Not one of the proxy advisory firms relied on by the Mandy Board is a
shareholder of Zarlink. None of them have seen their investment evaporate
through mismanagement and lethargy. With no stake in the Company, it is easy
for them to recommend waiting even longer for the Mandy Board to deliver
results. Shareholders must decide for themselves whether a decade of unfilled
promises makes the Mandy Board credible.
"The proxy advisory firms have a demonstrated resistance to change. In
this case, their reports are rife with fundamental errors about both the
record of the Mandy Board and the experience and plans of the Concerned
Shareholder Nominees," said Mr. Leckie. "For example, the RiskMetrics report
refers to a 100-day wait before the new Board would take action. In fact, just
the opposite is true. We have an Action Plan for the first 100 days after the
election of a new Board, to be implemented by an experienced interim CEO who
is ready to lead the Company immediately. Such a basic mistake, along with its
willingness to accept unproven Mandy Board claims at face value, casts serious
doubts on the credibility of the RiskMetrics report."
Mr. Leckie noted that the Concerned Shareholders are generating
significant support for change despite the misinformation from the Mandy Board
and a belief among some investors that the Mandy Board has done irreparable
damage to the Company.
"It is not too late. Although there has been significant damage to
shareholder value under Kirk Mandy and his Board, Zarlink still has the
potential to regain what it has lost, if its skilled employees are given the
right leadership," he said. "The Board we have nominated has proven it has
Voting for Change
The Concerned Shareholders remind their fellow Zarlink shareholders:
- Your vote is very important to the future of your investment in
Zarlink. If, after reading the Concerned Shareholder Proxy Circular,
you agree that the Concerned Shareholder Nominees will better serve
your interests as a shareholder of Zarlink, please vote using the
BLUE form of proxy distributed with the Concerned Shareholder Proxy
- You may vote the BLUE proxy for change even if you have previously
deposited a management proxy or other proxy. A timely delivered and
later-dated BLUE proxy automatically revokes any earlier one.
There is only a short time in which to make the needed change at Zarlink.
- In order to be deposited with Zarlink's registrar and transfer agent
in time to be used at the meeting, your BLUE proxy should reach
Kingsdale Shareholder Services Inc. before 5:00 p.m. (Eastern Time)
on Friday, July 18, 2008.
- Please fax only your BLUE proxy to 416-867-2271 or toll free:
1-866-545-5580. Hand delivered proxies should be returned to
Kingsdale at the Exchange Tower, 130 King Street West, Suite 2950,
P.O. Box 361, Toronto, Ontario, M5X 1E2.
- Non-registered shareholders are advised to refer to the information
under "General Proxy Information - Non-Registered Shareholders" in
the Concerned Shareholder Proxy Circular.
It's time for a change.
For new leadership. For a new direction.
For renewed shareholder value.
For further information:
For further information: Scott Leckie, (416) 363-3399