<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
MICROSEMI CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
MICROSEMI CORPORATION
---------------
NOTICE OF ANNUAL MEETING ON FEBRUARY 27, 1996
AND PROXY STATEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . 1
ANNUAL REPORT . . . . . . . . . . . . . . . . . . . . . . 2
OUTSTANDING VOTING SECURITIES . . . . . . . . . . . . . . 2
VOTING PROCEDURES . . . . . . . . . . . . . . . . . . . . 2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT . . . . . . . . . . . . . . . . . . . 3
ELECTION OF DIRECTORS (Proposal 1). . . . . . . . . . . . 5
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . 5
EXECUTIVE OFFICERS. . . . . . . . . . . . . . . . . . . . 7
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES . . . . . . . . . . . . . . . . . 8
EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . 11
SECTION 16(A) REPORTS . . . . . . . . . . . . . . . . . . 11
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION. . . . . . . . . . . . . . 12
COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . 12
PERFORMANCE GRAPH . . . . . . . . . . . . . . . . . . . . 15
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . 16
INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . 16
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE>
MICROSEMI CORPORATION
P.O. Box 26890
Santa Ana, California 92799-6890
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 27, 1996
-------------------
TO THE STOCKHOLDERS OF MICROSEMI CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MICROSEMI
CORPORATION (the "Company") will be held at the offices of the Company, 2830
South Fairview Street, Santa Ana, California 92704, on Tuesday, February 27,
1996 at 10:00 a.m., Pacific Standard Time, for the following purposes:
1. To elect six (6) directors, each for the term of one (1) year or until
his successor shall have been duly elected and qualified (Proposal 1);
and
2. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Only stockholders of record at the close of business on January 12, 1996
are entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
By Order of the Board of Directors,
/s/ DAVID R. SONKSEN
David R. Sonksen
Secretary
Santa Ana, California
January 24, 1996
<PAGE>
IT IS IMPORTANT THAT ALL STOCKHOLDERS BE REPRESENTED AT THE ANNUAL MEETING.
STOCKHOLDERS, WHETHER THEY EXPECT TO ATTEND THE MEETING IN PERSON OR NOT, ARE
REQUESTED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY. PROXIES ARE
REVOCABLE AT ANY TIME PRIOR TO BEING VOTED AT THE ANNUAL MEETING, AND
STOCKHOLDERS OF RECORD WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES
AND VOTE IN PERSON IF THEY SO DESIRE.
Additional copies of proxy materials should be requested in writing addressed
to:
Microsemi Corporation, P.O. Box 26890, Santa Ana, California 92799-6890,
Attention: David R. Sonksen, Secretary.
<PAGE>
MICROSEMI CORPORATION
P. O. Box 26890
Santa Ana, California 92799-6890
-------------------
PROXY STATEMENT
GENERAL INFORMATION
THE ACCOMPANYING PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND
MANAGEMENT OF MICROSEMI CORPORATION (THE "COMPANY") TO BE USED AT THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD ON TUESDAY, FEBRUARY 27, 1996, AT 10:00 A.M.,
PACIFIC STANDARD TIME, AT THE OFFICES OF THE COMPANY, 2830 SOUTH FAIRVIEW
STREET, SANTA ANA, CALIFORNIA 92704, AND AT ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF (THE "MEETING"). SHARES REPRESENTED BY A VALID PROXY IN THE ENCLOSED
FORM ("PROXY") WILL BE VOTED AS SPECIFIED IF EXECUTED AND RECEIVED IN TIME FOR
THE MEETING. IF A CHOICE IS NOT SPECIFIED IN THE PROXY, THE PROXY WILL BE VOTED
FOR THE ELECTION OF ALL OF THE DIRECTOR NOMINEES LISTED BELOW.
A stockholder who executes and returns the accompanying Proxy may revoke it
at any time prior to its being voted by signing another Proxy bearing a later
date, or by signing a written notice of revocation and, in either case,
delivering the proxy or notice to the Secretary of the Company by mail prior to
the Meeting or in person at the Meeting. Execution of the Proxy also will not in
any way affect a stockholder's privilege to attend the Meeting and to vote in
person, provided that the stock is held of record in the stockholder's name.
The costs of Proxy solicitation will be paid by the Company. It is
contemplated that Proxies will be solicited principally through the use of the
mails. The Company will reimburse banks, brokerage houses, and other custodians,
nominees or fiduciaries for their reasonable expenses in forwarding proxy
material to the beneficial owners of the shares held by them. Proxies may be
solicited by directors, officers or other regular employees of the Company in
person or by telephone or facsimile as part of their regular duties and without
special payment therefor except reimbursement of incidental costs.
This Notice of Annual Meeting, Proxy Statement and Proxy are first being
mailed to stockholders on or about January 24, 1996.
1
<PAGE>
ANNUAL REPORT
-------------
The Annual Report to Stockholders for the fiscal year ended October 1,
1995, including audited financial statements, accompanies this Proxy Statement.
Such report is not to be regarded as proxy soliciting material and is not
incorporated into this Proxy Statement. THE ANNUAL REPORT TO STOCKHOLDERS AND
THE FORM 10-K INCLUDING, ANNUAL FINANCIAL STATEMENTS, CAN BE OBTAINED BY ANY
STOCKHOLDER ENTITLED TO VOTE AT THE MEETING UPON WRITTEN REQUEST. SEND REQUESTS
TO MICROSEMI CORPORATION, P.O. BOX 26890, SANTA ANA, CALIFORNIA 92799-6890,
ATTENTION: DAVID R. SONKSEN, SECRETARY.
OUTSTANDING VOTING SECURITIES
-----------------------------
The Company's Common Stock, $.20 par value per share ("Common Stock"),
constitutes the only class of outstanding securities of the Company entitled to
notice of and to vote at the Meeting, including any adjournments or
postponements thereof. On January 12, 1996 ("Record Date") the Company had
issued and outstanding 7,797,149 shares of Common Stock (exclusive of shares
held in the treasury). Only holders of record of the Common Stock at the close
of business on the Record Date will be entitled to vote at the Meeting,
including any adjournments or postponements thereof. Each such holder of record
is entitled, for all purposes, to one vote for each share so held on each matter
submitted to a vote of stockholders.
VOTING PROCEDURES
-----------------
A quorum sufficient for the conduct of business at the Meeting will consist
of a majority of the 7,797,149 outstanding shares of Common Stock at the close
of business on the Record Date.
Proxies marked as abstentions and proxies for shares held in street name
designated by brokers as not voted will be treated as shares present for
purposes of determining the presence of a quorum at the Meeting.
Proposal 1, the election of directors, will be determined by a plurality
vote, i.e., the stockholders elect those individuals up to the number of
individuals to be elected receiving a number of votes greater than the number of
votes for any other nominees who are not elected and receive votes.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
The following table sets forth as of December 1, 1995, information
concerning ownership of the Company's Common Stock by each director or executive
officer, all officers and directors as a group, and each person known by the
Company to own beneficially more than 5% of its outstanding Common Stock.
<TABLE>
<CAPTION>
Name of Beneficial Owner
(and Address of Each 5%
Beneficial Owner) or Amount and Nature of Percentage
Number of Persons in Group Beneficial Ownership of Class
- ------------------------------------ -------------------- -----------
<S> <C> <C>
Wechsler & Company, Inc.
105 South Bedford Road
Mount Kisco, NY 10549 1,711,992(1)(2) 19.4%
Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard, Suite 1050
Los Angeles, CA 90024-6594 1,281,429(1)(3) 13.8%
Philip Frey, Jr.
P.O. Box 26890
Santa Ana, CA 92799-6890 981,197(4) 12.0%
Jiri Sandera 74,373(5) *
Joseph M. Scheer 8,000(6) *
Martin H. Jurick 5,000(7) *
Brad Davidson 12,250(8) *
Robert B. Phinizy 6,000(9) *
David R. Sonksen 38,689(10) *
Harold R. McKeighan 39,150(11) *
Edwin S. Davis 11,250(12) *
All officers and directors
as a group 1,175,909 14.2%
</TABLE>
- --------------
*Indicates less than 1%
(1) Based upon information in a Schedule 13D filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
3
<PAGE>
(2) Includes 695,720 shares issuable upon conversion of convertible debentures,
320,000 shares issuable upon conversion of a subordinated convertible note
and 2,000 shares owned by Norman J. Wechsler's son.
(3) Includes 838,000 shares issuable upon conversion of convertible debentures
and 443,429 shares issuable upon conversion of a subordinated convertible
note.
(4) Includes 209,250 shares under an option exercisable within 60 days, 104,133
shares issuable upon conversion of convertible debentures and 80,000 shares
issuable upon conversion of a subordinated convertible note.
(5) Includes 1,662 shares under options exercisable within 60 days.
(6) Includes 5,000 shares under options exercisable within 60 days.
(7) Includes 5,000 shares under options exercisable within 60 days.
(8) Includes 12,250 shares under options exercisable within 60 days.
(9) Includes 6,000 shares under options exercisable within 60 days.
(10) Includes 4,250 shares under options exercisable within 60 days.
(11) Includes 21,250 shares under options exercisable within 60 days and 100
shares held in an IRA account.
(12) Includes 6,250 shares under options exercisable within 60 days.
4
<PAGE>
ELECTION OF DIRECTORS
---------------------
(Proposal 1)
The Bylaws of the Company allow for a Board of Directors consisting of not
less than three (3) and up to thirteen (13) members as fixed by the Board from
time to time, and the Board has fixed the number of directors at six (6).
Accordingly, six (6) directors shall be elected at the Meeting, and the six (6)
nominees named below, are proposed by Management. The nominees proposed for
election as directors will serve for a term of one year or until their
successors are elected and qualified. All nominees have consented to be named
and have indicated their intent to serve if elected. While Management has no
reason to believe that any nominee will be unable to or will not serve as a
director, should any nominee become unable to serve or will not, for good cause,
so serve, the persons named in the enclosed Proxy will have authority to vote
for any substitute nominee designated by the Board of Directors.
The six (6) candidates in the election of directors receiving the highest
number of affirmative votes will be elected. Votes against a candidate or votes
withheld, including abstentions and broker non-votes, have no legal effect on
the election; however all such votes count as a part of the quorum. The names
and certain information concerning the persons to be nominated as directors by
the Board of Directors at the Meeting are set forth below. Your Board of
Directors recommends that you vote for the election of each of the nominees
named below.
DIRECTORS
---------
<TABLE>
<CAPTION>
Position With Company (in Addition to Director) Director
Name and Principal Occupation during Last Five Years Age Since
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Philip Frey, Jr. Chairman of the Board since February 26, 1987;
President and Chief Executive Officer since 1971 68 1972
Jiri ("George") Vice President Engineering since 1974 72 1978
Sandera
Brad Davidson President of Pre-Owned Partnerships from 1986 to 40 1984
the present; formerly President of Portico Securities
Corporation, a registered securities dealer; formerly
Vice President of Prudential-Bache Securities; and
formerly an account executive for Merrill Lynch
Pierce Fenner & Smith
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Position With Company (in Addition to Director) Director
Name and Principal Occupation during Last Five Years Age Since
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert B. Phinizy Private investor and consultant; Chairman, Chief 69 1992
Executive Officer and President of Genesco
Technology Corp., from 1972 to 1986; Captain,
United States Navy - retired; and currently Director
of Biosonics Corp.
Joseph M. Scheer Private investor and consultant; Director and 69 1994
consultant to Rawson Koenig Co. Inc., Houston,
Texas since 1991; Director of Laserform, Inc.,
Auburn Hills, Michigan since 1989; formerly
Group Vice President of Plessey Inc. and Director
of Alloys Unlimited Inc.; Founder-President of
Veritron West, Inc.
Martin H. Jurick Senior Vice President of Corporate Planning and 58 1995
Director of Silicon Systems, Inc. since 1978;
Director of Level One Communications since 1991
</TABLE>
6
<PAGE>
EXECUTIVE OFFICERS
Officers are elected on an annual basis by the Board of Directors and serve
at the discretion of the Board. Information is provided under the heading
"Directors" above for Messrs. Philip Frey, Jr. and Jiri (George) Sandera.
<TABLE>
<CAPTION>
Position with Company and Principal Occupation Director
Name during Last Five Years Age Since
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David R. Sonksen Vice President Finance, Treasurer (Chief 50 1986
Financial Officer) and Secretary since 1986;
formerly Vice President Controller of Western
Digital Corp., a manufacturer of computer
products, from 1982 to 1986; formerly U.S.
Operations Controller of Smith International Inc.,
from 1980 to 1982
Harold R. McKeighan Vice President and General Manager of 53 1985
Microsemi Corporation Scottsdale since 1985
Edwin S. Davis Vice President and General Manager of 71 1992
Microsemi Corporation Watertown since 1992;
formerly President of North American Electronics,
from 1987 to 1991; and formerly Operations
Manager of Unitrode's Semiconductor Products
Division, from 1982 to 1987
Andy T.S. Yuen Vice President International Operations since 43 1989
1989; Director International Operations, from
1983 to 1989
James M. Thomas Vice President Human Resources since 1989; 58 1989
Director Human Resources from 1981 to 1989
</TABLE>
7
<PAGE>
INFORMATION REGARDING THE BOARD OF
---------------------------------
DIRECTORS AND ITS COMMITTEES
----------------------------
During the 1995 fiscal year, the Board of Directors held a total of four
(4) regularly scheduled or special meetings.
The Audit Committee, consisting of directors Brad Davidson, Robert B.
Phinizy and Joseph M. Scheer, reviews matters relating to the Company's internal
and external audits. The Audit Committee's two (2) meetings in fiscal year 1995
were held on December 13, 1994 and August 22, 1995 to review the fiscal year
1994 financial statements and audit and to review the plans for the fiscal year
1995 audit, respectively.
The Compensation Committee, consisting of directors Brad Davidson, Martin
H. Jurick and Robert B. Phinizy, considers and approves the grant of stock
options to and compensation for the Company's key employees. The Compensation
Committee held three (3) meetings in fiscal year 1995: December 13, 1994,
February 28, 1995 and August 22, 1995.
No standing committee of the Company has a function similar to the function
of a "Nominating Committee."
No director, during the period while serving as a Director or on any
committees, attended fewer than 75% of the aggregated number of meetings held in
fiscal year 1995 of the Board of Directors and of all relevant committees.
During fiscal year 1995, directors who were not also officers of the
Company each were paid a quarterly retainer fee of $2,500, plus fees of $1,000
for each Board of Directors meeting attended and $400 for each committee meeting
attended, except that the chairman of each committee was paid $800 for each such
meeting.
8
<PAGE>
EXECUTIVE COMPENSATION
----------------------
The following table sets forth, for the fiscal year ended October 1, 1995,
compensation received by Messrs. Frey, Sandera, Sonksen, McKeighan and Davis.
The notes to these tables provide additional specific information regarding
compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------ -----------------------------------
Long-Term
Restricted Incentive
Stock Plan All Other
Name and Fiscal Salary Bonus Other Award(s) Options Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------------ ------ ------- ------- ----- ---------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Philip Frey, Jr.
President, Chairman of 1995 285,969 206,864 4,800 - 11,600 - 45,728(1)
the Board, Director and 1994 255,468 102,358 4,800 - 13,000 - 44,457
Chief Executive Officer 1993 221,075 100,000 4,800 - - - 42,500
Jiri ("George") Sandera
Vice President, 1995 135,808 39,936 3,000 - 3,700 - 8,910(1)
Engineering, and 1994 129,094 28,780 3,000 - 4,650 - 1,910
Director 1993 121,119 23,000 3,000 - - - 1,204
David R. Sonksen
Vice President-Finance; 1995 158,000 83,426 3,600 - 6,300 - 9,066(1)
Treasurer, Secretary 1994 143,121 43,007 3,600 - 7,500 - 4,374
and Chief Financial 1993 123,250 50,000 3,600 - - - 3,210
Officer
Harold R. McKeighan
Vice President-Microsemi 1995 143,834 84,335 3,600 - 6,300 - 4,744(1)
Scottsdale 1994 134,524 37,099 3,600 - 7,500 - -
1993 120,388 45,000 3,600 - - - -
Edwin S. Davis 1995 140,909 56,567 4,800 - 4,800 - 1,890(1)
Vice President-Microsemi 1994 118,250 36,636 4,800 - 7,500 - -
Watertown 1993 104,500 10,000 - - - - -
</TABLE>
- ---------
(1) Includes $43,299, $6,204, $1,555, $1,890 and $1,890 for Supplemental Life
Insurance premium payments for Messrs. Frey, Sandera, Sonksen, McKeighan and
Davis, respectively. Also includes 401(k) Plan matching contributions of
$2,429; $2,706, $4,149 and $2,854 for Messrs. Frey, Sandera, Sonksen and
McKeighan, respectively.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------------------- Potential Realizable
% of Total Value at Assumed
Options Annual Rates of Stock
Granted to Price Appreciation
Options Employees Exercise Grant Date For Option Term(1)
Granted in Fiscal Price Expiration Present ----------------------
Name (#) Year ($/Share) Date Value ($) 5%($) 10%($)
- ---- ------- ---------- --------- ---------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip Frey, Jr. 11,600 8.5% $4.625 2/28/2005 $53,650 $33,740 $85,504
Jiri G. Sandera 3,700 2.8% $4.625 2/28/2005 $17,113 $10,762 $27,272
David R. Sonksen 6,300 4.8% $4.625 2/28/2005 $29,138 $18,324 $46,438
Harold R. McKeighan 6,300 4.8% $4.625 2/28/2005 $29,138 $18,324 $46,438
Edwin S. Davis 6,300 4.8% $4.625 2/28/2005 $29,138 $18,324 $46,438
</TABLE>
- ----------
(1) The Potential Realizable Value is calculated based on the fair market value
on the date of grant, which is equal to the exercise price of options
granted in fiscal 1995, assuming that the stock appreciates in value from
the date of grant until the end of the option term at the annual rate
specified (5% and 10%). Potential Realizable Value is net of the option
exercise price. The assumed rates of appreciation are specified in rules of
the SEC, and do not represent the Company's estimate or projections of
future stock price. Actual gains, if any, resulting from stock option
exercises and Common Stock holdings are dependent on the future performance
of the Common Stock, overall stock market conditions, as well as the option
holders' continued employment through the exercise/vesting period. There
can be no assurance that the amounts reflected in this table will be
achieved.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Shares Number of Unexercised Value of Unexercised
Acquired Value Options at Fiscal In-the-Money Options
on Exercise Realized Year End (#) at Fiscal Year End ($)
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Philip Frey, Jr. - - 183,375 44,225 1,832,896 391,310
Jiri G. Sandera 20,162 206,754 - 7,688 - 55,402
David R. Sonksen 61,500 610,375 1,875 12,425 12,686 88,425
Harold R. McKeighan 10,000 102,625 19,375 12,925 165,768 92,108
Edwin S. Davis - - 4,375 14,425 36,475 106,832
</TABLE>
10
<PAGE>
RETIREMENT BENEFITS
-------------------
In fiscal year 1993, the Company adopted a Supplemental Employee Retirement
Plan ("SERP"), in which the only participants are (8) long standing employees,
including Messrs. Frey and Sandera. The SERP plan was approved by the Board of
Directors on December 14, 1993. The SERP agreements provide annual payments for
10 years following the participant's retirement (age 66 or later). The annual
payments range from 20% to 30% (30% for the two named executives) of the
participant's final or designated year's salary. It is not possible to state in
advance the exact amount of future commitments under the SERP to the Chief
Executive Officer.
EMPLOYMENT AGREEMENTS
---------------------
None of the executive officers has a written agreement covering employment,
termination or change in control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
No person who acted as a director or executive officer of the Company and
no security holder known to the Company to own of record or beneficially more
than five percent of any class of the Company's voting securities, or any
members of their respective immediate families, is known to have any material
interest, direct or indirect, in any transaction or proposed transaction during
the fiscal year ended October 1, 1995 in which the amount involved exceeds
$60,000 and to which the Company or any subsidiary was or during the next fiscal
year is to be a party.
SECTION 16(a) REPORTS
---------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own beneficially more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC") and the Nasdaq Stock Market ("NASDAQ"). Executive
officers, directors and greater than ten-percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
concurrently when they file them with the SEC and NASDAQ.
Based solely on its review of the copies of Section 16(a) forms furnished
to the Company and any written representations that no Form 5 reports were
required, none of the Company's officers, directors or (to the Company's
knowledge) greater than ten-percent beneficial owners failed to file in a timely
manner all Section 16(a) reports, with the exception of a Form 5 filing by Jiri
Sandera, which has since been remedied.
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
---------------------------------
AND INSIDER PARTICIPATION
-------------------------
No member of the Compensation Committee was during the 1995 fiscal year an
officer or employee of the Company or any of its subsidiaries; or was formerly
an officer of the Company or any of its subsidiaries.
COMPENSATION COMMITTEE REPORT FOR FISCAL 1995 YEAR OF MICROSEMI
CORPORATION
The compensation programs of the Company are carefully designed each fiscal
year to tie rewards received by each key executive to their contributions of net
earnings from both their direct operating responsibility and the total profits
of the overall corporation. In addition the executive is responsible for meeting
other strategic goals mutually agreed to between that key executive and the CEO.
The goals typically are crafted from the strategic opportunities and challenges
available to the company in global markets and competitive environments. For
purposes of giving clear understanding to each executive, the fiscal year bonus
plans for his division executives and himself are expressed in 3 distinct areas:
Corporate Earnings; Divisional Earnings; and Subjective analysis. These business
unit plans may range from such items as aggressive market/product developments
which might actually create a loss for a particular segment of the Company all
the way to a goal of significant growth in revenue/profits from existing or
mature markets. These programs are formalized and consistently administered
throughout the Company.
EXECUTIVE COMPENSATION PHILOSOPHY
The primary thrust of all compensation programs in the Company follow the
belief that compensation must reflect the value created for the stockholders -
both immediate and long term.
Consequently, the compensation programs reflect the following specific
thesis:
. Rewards are tailored to fit the unique opportunities available to each
business unit as well as the contributions each business unit is to make
to the Corporate earnings and growth in broader markets -- including
international business opportunities. A significant percentage of the
compensation program for each business unit is strongly influenced by the
total Corporate earnings as well as the goals achieved to support the
strategic needs of the corporation. A communicated and determinable
schedule of award levels are issued to each key executive, showing the
impact of over or under achievement relative to the agreed to goals for
the fiscal year. These awards, other than the subjective analysis
portion, are understandable and calculatable by any plan executive, if he
knows the year's results of the division and the overall corporate
profits.
The current structure of the Cash Bonus Plan was adopted and first applied to
fiscal year 1994. The Compensation Committee, for Fiscal 1995, revised the bonus
determination methods for the smaller and more service motivated business units,
utilizing a much more subjective analysis which gave more weight to the support
roles needed in international sales efforts. The services range from selling
other business units' products in special market segments, to off-shore product
assembly and business opportunity development for all divisions.
12
<PAGE>
. The Plan utilizes both short term achievement awards & Long Term incentives --
The Compensation plan was enhanced by stockholder approved revisions to the
1987 stock option plan at the Annual Meeting held in February 1994. The
revision provided for additional shares of the Company stock to be provided
for grants to key contributors each fiscal year. The additional option shares
available are utilized, as appropriate, for each key executive, with the CEO
recommending grants. The grants recommended are reviewed for appropriateness
by the Compensation Committee, which manages the program. Grants typically
either are qualified or nonqualified stock options. The executives with
significant impact for the future growth and profitability of the company are
granted new options each year. These options typically have a 5 year vesting
schedule and provide for executives incentives to increase the worth of the
company over the long term.
. The administration of the Cash Bonus Program is by the Compensation Committee.
The Committee meets with the CEO after the end of each fiscal year to review
the plan goals for the year versus the actual achieved results. This meeting
results in "Plan Award Decisions" and stock option grants for each key
participant with the exception of the CEO. In executive sessions, the
Committee reviews the Audited Corporate Plan Results with reference to the
contributions by the CEO. The Committee reviews the Corporate Plan and Results
for the year then decides an appropriate CEO Stock Option Award and an
objectively decided CEO Cash Bonus Award for that Fiscal year. In addition,
the Committee reviews the salary and benefits for the CEO for the new Fiscal
Year, and submits their recommendation in the form of a motion to be acted on
by the entire Board of Directors. Salary reviews for the top executives are
initially suggested by the CEO, using Industry comparatives for a company
overall increase in pay and benefits, then specifically deciding the merits of
each of the individual executive performance and level of opportunity,
arriving at the salary and benefit level which appropriately rewards him for
his demonstrated skills.
THE EXECUTIVE COMPENSATION COMPONENTS ARE:
. BASE SALARY: Salaries are set at levels somewhat below competitive pay in
-----------
similar marketplace orientations. Each year the CEO and the Compensation
Committee review each of the 20 highest paid executives to set the
following year's pay for these executives. Factors considered in these
reviews, although subjectively and informally applied, are actual
achievement, level of market opportunity, management skill in achieving his
goals and contributions to the overall Corporate success. In fiscal year
1995, the increases for key executives based on these factors ranged from
4% to 10% of base salary.
. THE CASH BONUS PROGRAM: The Plan provides cash awards to executives and has
----------------------
been the means of achieving superior corporate results with slightly lower
over-all executive compensation as compared to similar business units.
These programs are formalized and consistently administered throughout the
company. The bonus award can range from 0% to 80% of an executive's annual
salary. The bonus award components are based on 20% to 80% for overall
corporate profit performance, 50% to 80% for direct profit results
controlled by the executive and 20% to 40% on subjective goals. For fiscal
1995, the goals that were set for the company's executive officers were
considered generally to have been exceeded, and executive bonuses were
established that ranged from 15% to 70% of base salary, with 80% of base
salary being the maximum possible bonus.
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<PAGE>
. STOCK OPTIONS: Based on an outside consultants 1994 recommendation, up to
-------------
an additional 2% of the current outstanding shares of common stock are
available annually for award to new and existing executives. Under this
program key executives are allocated portions of the total annual award
based upon the executive's responsibility level and other subjective
measures. The company believes that the stockholders value and the
executives rewards are uniquely coupled in this stock option program.
Executives who are deemed to have significant impact on the future growth
and profitability of the company are granted new options each year, without
regard to the number of options or shares that may already have been issued
to such executives.
MR. FREY'S FISCAL YEAR 1995 COMPENSATION:
The total compensation package provided to Mr. Frey in Fiscal Year 1995
consisted of a base salary, annual bonus, stock options and amounts under
certain employee benefit plans. Mr. Frey's base salary is designed to be
competitive with companies of a similar size based on informal comparisons. His
annual bonus can range from 0% to 80% of his annual salary based upon two
factors, 80% of this amount is based upon the overall financial performance of
the Company and 20% upon his individual performance as an executive officer. The
long-term portion of Mr. Frey's compensation is based primarily on stock
options. The value of the stock option award is designed to be consistent with
competitive practices of similar sized companies based on informal comparisons.
Compensation specialists have been retained by the Compensation Committee to
provide recommendations regarding competitive practices of similar sized
companies. These recommendations have been taken into consideration by the
Compensation Committee in determining Mr. Frey's long-term compensation and is
believed consistent with competitive practices. In fiscal year 1995, Mr. Frey's
salary increased 10% over fiscal year 1994 levels. The cash bonus was
established at an amount that is approximately 70% of his salary compared with
40% in fiscal year 1994. The salary increase was attributable to Corporate
Performance improvements, including Earnings increases in Fiscal 1995 as well as
various subjective factors considered by the Committee.
The Compensation Committee believes the success and value of the company has
been directly and positively influenced by the effective use of the compensation
plan as outlined herein.
THE COMPENSATION COMMITTEE
Brad Davidson
Marty Jurick
Robert Phinizy
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<PAGE>
PERFORMANCE GRAPH
The following graph compares the five-year cumulative total return on the
Company's Common Stock to the total returns of 1) the CRSP Total Return Index
for the NASDAQ stock market, 2) a Company-selected peer group of six companies
(International Rectifier Corp., Semtech Corp., Symmetricom Inc., Optek
Technology Inc., Siliconix Inc. and Unitrode) and 3) NASDAQ Stock - Electronic &
Electrical Equip. & Components, Exc. Computer Equip. This comparison assumes in
each case that $100 was invested on September 28, 1990 and all dividends were
reinvested. The Company's fiscal year ends on or about September 30 each year.
(The Company has elected this year to change from its comparison to the peer
group of six companies to the broader group of NASDAQ Industry Group -
Electronic Components because it is believed that this is a more representative
comparison for the Company's performance.)
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
AMONG MICROSEMI CORPORATION, NASDAQ AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period MICROSEMI NASDAQ
(Fiscal Year Covered) CORP. NASDAQ Peer Group Stock
- ------------------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Measurement Pt-09/28/1990 $100.00 $100.00 $100.00 $100.00
FYE 09/27/1991 $127.30 $156.60 $211.20 $147.30
FYE 09/25/1992 $181.80 $174.50 $173.70 $183.90
FYE 10/01/1993 $454.50 $230.90 $266.20 $346.50
FYE 09/30/1994 $327.30 $232.90 $362.90 $335.30
FYE 09/29/1995 $855.70 $320.70 $742.50 $622.90
</TABLE>
15
<PAGE>
STOCKHOLDER PROPOSALS
---------------------
Stockholder proposals intended to be considered at the 1997 Annual Meeting
of Stockholders must be received by the Company no later than September 26,
1996. Such proposals may be included in next year's Proxy Statement if they
comply with certain rules and regulations promulgated by the SEC.
INDEPENDENT ACCOUNTANTS
-----------------------
Price Waterhouse, independent accountants for the Company for the fiscal
year ended October 1, 1995, has been selected by the Board of Directors to serve
in the same capacity for the current fiscal year.
A representative of Price Waterhouse is expected to be present at the
Meeting with the opportunity to make a statement if he or she so desires and to
be available to respond to appropriate questions.
OTHER MATTERS
-------------
The Board of Directors is not aware of any matter which will be presented
for action at the Meeting other than the matters set forth herein; but should
any other matter requiring a vote of the stockholders arise, it is intended that
the enclosed Proxy include discretionary authority to vote on such other matters
in accordance with the interests of the Company, in the best judgment of the
person or persons voting the Proxies. In addition, the enclosed Proxy is
intended to include discretionary authority to postpone or adjourn the meeting,
to vote for any person's election to a position for which a bona fide nominee is
named herein if such nominee named herein is unable to serve or for good cause
will not serve, approval of minutes of the prior meeting without ratifying the
actions taken at such meeting and any matters incident to the conduct of the
Meeting.
All stockholders are urged to complete, sign, date and promptly return the
enclosed Proxy.
By Order of the Board of Directors,
David R. Sonksen, Secretary
Santa Ana, California
January 24, 1996
16
<PAGE>
Please mark, sign, date and return this proxy card promptly.
1. ELECTION OF DIRECTORS
FOR all nominees listed below (except as marked to the contrary below) [_]
WITHHOLD AUTHORITY to vote for all nominees listed below [_]
(INSTRUCTION: to withhold authority to vote for any individual nominee,
strike a line through that nominee's name in the list below.)
Philip Frey, Jr.
Joseph M. Scheer
Robert B. Phinizy
Jiri G. Sandera
Brad Davidson
Martin H. Jurick
2. In their discretion, upon such other matters as may properly come before the
meeting, this proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder.
IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR EACH OF THE
PROPOSALS.
DATED: ____ -------------------------------------------------------------------
SIGNATURE OF STOCKHOLDER
DATED: ____ -------------------------------------------------------------------
SIGNATURE OF STOCKHOLDER
IMPORTANT: Please date this proxy and sign exactly as your name or names
appear(s) on your stock certificate. If stock is held jointly, signature
should include both names. Executors, administrators, trustees, guardians and
others signing in a representative capacity please give their titles. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF MICROSEMI CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 27, 1996
The undersigned shareholder of MICROSEMI CORPORATION hereby appoints Philip
Frey, Jr. and Jiri G. Sandera, or either of them, the attorneys and proxies,
with full power of substitution, to vote for the undersigned all shares of any
class of shares of capital stock of MICROSEMI CORPORATION, which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders to be held on February 27, 1996, at 10:00 A.M.,
(California time), and at any adjournments or postponements thereof, upon the
matters described in the accompanying Proxy Statement and upon any other
business that may properly come before the meeting or any adjournment thereof.
The undersigned acknowledges receipt of this proxy and a copy of the Notice of
Annual Meeting and Proxy Statement dated January 24, 1996. Said proxies are
directed to vote or to refrain from voting pursuant to the Proxy Statement as
checked on the left side hereon upon the following matters, and otherwise in
their discretion.
<PAGE>
NO POSTAGE
NECESSARY
IF MAILED
IN THE
UNITED STATES
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BUSINESS REPLY MAIL -------
FIRST CLASS -------
PERMIT NO. 4775 -------
SANTA ANA, CA -------
POSTAGE WILL BE PAID BY ADDRESSEE -------
MICROSEMI CORPORATION -------
P.O. Box 26890 -------
Santa Ana, CA 92799-6890 -------
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