<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
- --------------------------------------------------------------------------------
(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] No fee required.
[_] 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 25, 1997
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 25, 1997
--------------
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 25,
1997 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 10, 1997
are entitled to notice of and to vote at the meeting or any adjournments or
postponements thereof.
By Order of the Board of Directors,
Santa Ana, California /s/ DAVID R. SONKSEN
January 17, 1997 -----------------------------------
David R. Sonksen
Secretary
<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 25, 1997, 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 17, 1997.
1
<PAGE>
ANNUAL REPORT
--------------
The Annual Report to Stockholders for the fiscal year ended September
29, 1996, 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 10, 1997 ("Record Date") the Company had
issued and outstanding 8,320,837 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 8,320,837 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 2, 1996, 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 1,941,520(1)(2) 21.0%
Oregon Equity Fund
c/o Froley, Revy Investment Co., Inc.
10900 Wilshire Boulevard, Suite 1050
Los Angeles, CA 90024-6594 1,119,152(1)(3) 12.3%
Philip Frey, Jr.
P. O. Box 26890
Santa Ana, CA 92799-6890 959,187(4) 11.6%
Jiri Sandera 70,299(5) *
Joseph M. Scheer 9,000(6) *
Martin H. Jurick 6,000(7) *
Brad Davidson 18,250(8) *
Robert B. Phinizy 7,000(9) *
David R. Sonksen 43,664(10) *
Harold R. McKeighan 43,125(11) *
Andy T. S. Yuen 44,475(12) *
All executive officers and directors
as a group (9) 1,201,000 14.3%
</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 961,771 shares issuable upon conversion of convertible debentures,
333,070 shares issuable upon conversion of a subordinated convertible note
and 2,000 shares owned by Norman J. Wechsler's son.
(3) Includes 611,131 shares issuable upon conversion of convertible debentures
and 508,021 shares issuable upon conversion of a subordinated convertible
note.
(4) Includes 152,975 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 2,063 shares under options exercisable within 60 days.
(6) Includes 6,000 shares under options exercisable within 60 days.
(7) Includes 6,000 shares under options exercisable within 60 days.
(8) Includes 7,000 shares under options exercisable within 60 days.
(9) Includes 7,000 shares under options exercisable within 60 days.
(10) Includes 9,225 shares under options exercisable within 60 days.
(11) Includes 18,725 shares under options exercisable within 60 days and 100
shares held in an IRA account.
(12) Includes 33,725 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) and
Principal Occupation Director
Name during Last Five Years Age Since
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Philip Frey, Jr. Chairman of the Board 69 1972
since February 26, 1987;
President and Chief
Executive Officer since 1971
Jiri ("George") Sandera Vice President--Engineering 73 1978
since 1974
Brad Davidson President of Securities 41 1984
Pricing and Research, Inc.
from 1986 to 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
Robert B. Phinizy Private investor and 70 1992
consultant; Chairman,
Chief Executive Officer
and President of Genesco
Technology Corp., from
1972 to 1986; Captain,
United States Navy -
retired; and currently
Director of Biosonics Corp.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Position With Company (in
Addition to Director) and
Principal Occupation Director
Name during Last Five Years Age Since
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Joseph M. Scheer Private investor and 70 1994
consultant; Director of
Rawson-Koenig Inc., Houston,
Texas since 1991; Member
Advisory Board Soligen Inc.,
Northridge, California since
1994; Director of Laserform,
Inc., Auburn Hills, Michigan
from 1989-1994.
Martin H. Jurick Senior Vice President of 59 1995
Corporate Planning and
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 during Officer
Name Last Five Years Age Since
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
David R. Sonksen Vice President--Finance, 51 1986
Chief Financial Officer,
Treasurer 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 54 1985
Manager of Microsemi
Corporation--Scottsdale
since 1985
Edwin S. Davis Vice President and General 72 1992
Manager of Microsemi
Corporation Watertown since
1992; formerly President of
North American Electronics,
from 1987 to 1991; and
formerly Operations Manager
of Unitrode Corporation's
Semiconductor Products
Division, from 1982 to 1987
Andy T.S. Yuen Vice President 44 1989
International Operations
since 1989; Director
International Operations,
from 1983 to 1989
James M. Thomas Vice President Human 59 1989
Resources since 1989;
Director Human Resources
from 1981 to 1989
</TABLE>
7
<PAGE>
INFORMATION REGARDING THE BOARD OF
----------------------------------
DIRECTORS AND ITS COMMITTEES
----------------------------
During the 1996 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 held a total of two (2) meetings in
fiscal year 1996 to review the fiscal year 1995 financial statements and audit
and to review the plans for the fiscal year 1996 audit.
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 1996.
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 1996 of the Board of Directors and of all relevant committees.
During fiscal year 1996, 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 $800 for each such
meeting.
8
<PAGE>
EXECUTIVE COMPENSATION
----------------------
The following table sets forth, for the fiscal year ended September 29,
1996, compensation received by Messrs. Frey, Sandera, Sonksen, McKeighan and
Yuen. The notes to these tables provide additional specific information
regarding compensation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------- --------------------------------------
Restricted Long-Term
Stock Incentive Plan All Other
Name and Fiscal Salary Bonus Other Award(s) Options Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)401(k)
- ------------------ ------ -------- -------- ------ ------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(2)
Philip Frey, Jr.
President, Chairman of 1996 310,000 194,434 (1) - 9,800 - 3,781
the Board, Director and 1995 285,969 206,864 (1) - 11,600 - 2,429
Chief Executive Officer 1994 255,468 102,358 (1) - 13,000 - 1,977
Jiri ("George") Sandera
Vice President, 1996 142,251 54,544 (1) - 3,600 - 3,329
Engineering, and 1995 135,808 39,936 (1) - 3,700 - 2,706
Director 1994 129,094 28,780 (1) - 4,650 - 1,910
David R. Sonksen
Vice President-Finance, 1996 169,770 79,860 (1) - 6,100 - 5,041
Treasurer, Secretary 1995 158,000 83,426 (1) - 6,300 - 4,149
and Chief Financial 1994 143,121 43,007 (1) - 7,500 - 2,944
Officer
Harold R. McKeighan
Vice President-Microsemi 1996 156,415 62,748 (1) - 6,100 - 2,823
Scottsdale 1995 143,834 84,335 (1) - 6,300 - 2,854
1994 134,524 37,099 (1) - 7,500 - 1,767
Andy T.S. Yuen 1996 128,627 60,506 (1) - 6,100 - 3,499
Vice President-International 1995 116,938 61,743 (1) - 6,300 - 2,771
1994 106,309 15,555 (1) - 7,500 - 1.940
</TABLE>
(1) The Company has concluded that the aggregate amount of perquisites and other
personal benefits paid in such period did not exceed the lesser of 10% of
such officer's total annual salary and bonus for each of 1996, 1995 and
1994, respectively, or $50,000. Such perquisites have not been included in
the table.
(2) Represents amounts contributed in 1996, 1995 and 1994 under the Company's
401(k) plan under which the Company matches, up to the annual federally
mandated maximum amounts, an employee's contributions of up to 3% of such
employee's annual salary.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------
Potential Realizable
% of Total Value at Assumed
Options Annual Rates of Stock
Granted to Price Appreciation
Options Employees Exercise Grant Date For Option Term(1)
Granted in Fiscal Price Expiration Present -----------------------
Name (#) Year ($/Share) Date Value ($) 5%($) 10%($)
- ---------------------- ------- ---------- --------- ---------- ---------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Philip Frey, Jr. 9,800 6.9% $9.875 12/13/2005 $96,775 $60,861 $154,234
Jiri G. Sandera 3,600 2.5% $9.875 12/13/2005 $35,550 $22,357 $ 56,658
David R. Sonksen 6,100 4.3% $9.875 12/13/2005 $60,238 $37,883 $ 96,003
Harold R. McKeighan 6,100 4.3% $9.875 12/13/2005 $60,238 $37,883 $ 96,003
Edwin S. Davis 6,100 4.3% $9.875 12/13/2005 $60,238 $37,883 $ 96,003
</TABLE>
(1) The Potential Realizable Value is calculated based on the fair market value
of the Common Stock on the date of grant, which is equal to the exercise
price of options granted in fiscal 1996, assuming that the stock appreciates
in value from the date of grant until the end of the option term at the
specified annual rates (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
projection 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. 5,000 29,625 207,150 25,250 1,675,497 77,615
Jiri G. Sandera 2,588 15,331 - 8,700 - 25,584
David R. Sonksen - - 5,825 14,575 30,623 42,558
Harold R. McKeighan 7,500 54,750 15,325 14,575 100,843 42,558
Edwin S. Davis - - 10,325 14,575 64,030 42,558
</TABLE>
10
<PAGE>
RETIREMENT BENEFITS
-------------------
In fiscal year 1993, the Company adopted a Supplemental Employee
Retirement Plan ("SERP"), in which the only participants are eight (8) long-
standing employees, including Messrs. Frey and Sandera. The SERP 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 and the other executive officer named above. The
amounts that would be due annually, after retirement at age 66 (normal
retirement age), to Messrs. Frey and Sandera, respectively, would be estimated
at $93,000 and $43,000.
EMPLOYMENT AGREEMENTS
---------------------
None of the executive officers has a written agreement covering
employment, termination or change in control other than SERP as described above.
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 September 29, 1996 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 Section 16(a) reports.
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
---------------------------------
AND INSIDER PARTICIPATION
-------------------------
No member of the Compensation Committee during the 1996 fiscal year
was 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 YEAR 1996 OF MICROSEMI CORPORATION
The compensation programs for executive management and certain other key
employees are reviewed each year by the Compensation Committee. The committee
considers the program's impact on each operating unit as well as the effect on
corporate growth, profit, market position and goals set for that year, as well
as for changes in corporate market focus and strategic goals for the next fiscal
year. The committee reviews with the management of the company the business
plans for the new fiscal year and compares them to the prior year. This review
defines the relative potential contribution for each operating unit and together
with discussions between corporate management and the managers of each unit,
establishes goals for revenue and profits for participating profit center
managers. The Compensation Committee then establishes the rewards to be
received by each key executive relative to their contributions to net earnings
from both their direct operating responsibility and the overall profits of the
corporation. The committee also decides which operating units will be included
in this measured program. Certain special profit centers are removed from the
measured plan where the strategic goal assignments are not properly measured
quantitatively. These smaller or special profit centers are placed into a
second award pool from which bonus payments are allocated based on the
achievement of the more subjective goals set by the corporate management. The
Compensation Committee reviews these yearly with the corporate management and
monitors the allocation process.
In addition, the operating unit key executives are responsible for meeting other
strategic goals mutually agreed to between that key executive and the CEO. The
goals typically are strategic opportunities and challenges available to the
company in a changing market with competitive environments. In every reward
review, the key executive is evaluated on: corporate earnings, divisional
earnings, and subjective analysis on the goals achieved or progress achieved.
EXECUTIVE COMPENSATION PHILOSOPHY
The primary thrust of the compensation programs in the company continue to
follow the belief that compensation must reflect the value created for the
stockholders - both immediate and long term and 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 makes to the
corporate earnings and growth.
. The program utilizes short term achievement awards & long term incentives,
normally stock options granted each year. The stock option grants are
reviewed by the Compensation Committee, which manages the program. Grants
can be in either or both qualified and non-qualified stock options. The
executives with the potential to impact the future growth and profitability
of the company are granted new options each year. Options typically have a
5 year vesting schedule and provide for executives' incentives to increase
the value of the company over the long term.
12
<PAGE>
. Salary reviews for the top executives are conducted each year. This year
the committee conducted a formal study by an outside consultant to guide
the company in setting salary levels. The Company has followed the
consultant's study results which yielded industry comparatives, for overall
increase in pay and benefits. Only minor adjustments were required.
THE EXECUTIVE COMPENSATION COMPONENTS ARE:
. BASE SALARY: Salaries are set at levels approximating the fiftieth
-----------
percentile for similar marketplace orientations. This year the CEO and the
Compensation Committee reviewed each of the 14 highest paid executives and
set the following year's pay for these executives. Factors considered,
although subjectively and informally applied, are actual achievement, level
of market opportunity, management skill in achieving goals and
contributions to the overall corporate success. In fiscal 1996, the
increases for key executives based on these factors ranged from 4% to 15%
of base salary.
. THE CASH BONUS PROGRAM: The Plan, as in prior years, 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 executive's annual salary. The bonus award components are based on
overall corporate profit performance, direct profit results controlled by
the executive and on subjective goals. For fiscal 1996, the goals that
were set for the company's executive officers were considered generally to
have been achieved, and executive bonuses were established that ranged from
15% to 63% of base salary, with 80% of base salary being the maximum
possible bonus.
. STOCK OPTIONS: Based on the current stock option plan as approved by the
-------------
stockholders, 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 continues to believe that the
stockholders' value is being significantly enhanced by this stock option
program. Executives who are deemed to have the potential to impact 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 1996 COMPENSATION:
Mr. Frey's compensation for fiscal year 1996 consisted of a base salary, bonus,
stock options and amounts under certain employee benefit plans. Mr. Frey's base
salary is deemed to be competitive with companies of a similar size based on the
just completed outside consultant survey. 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. In fiscal year 1996, Mr. Frey's
salary increased 10% over fiscal year 1995 levels. The cash bonus was
established at an amount that is approximately 63% of his salary compared with
70% in fiscal year 1995. The salary increase was attributable to corporate
performance improvements, including earnings increases in fiscal 1996, as well
as various subjective factors considered by the committee.
13
<PAGE>
The compensation committee has reviewed the performance of the company and its
executives for 1996 and believes that the executive and company's superior
performances in fiscal 1996 speak well for the reward system administered by the
committee.
THE COMPENSATION COMMITTEE
Brad Davidson Marty Jurick Robert Phinizy
14
<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) NASDAQ Stock Market and 2)
NASDAQ Stock - Electronic & Electrical Equipment & Components, excluding
Computer Equipment. This comparison assumes in each case that $100 was invested
on September 27, 1991 and all dividends were reinvested. The Company's fiscal
year ends on or about September 30 each year.
<TABLE>
<CAPTION>
09/27/91 09/25/92 10/01/93 09/30/94 09/29/95 09/27/96
<S> <C> <C> <C> <C> <C> <C>
MICROSEMI 100.0 142.9 357.1 257.1 672.3 560.7
NASDAQ STOCK MARKET 100.0 114.4 147.4 148.7 205.4 244.5
NASDAQ ELECTRONIC COMPONENTS STOCKS 100.0 134.8 269.7 258.0 514.4 619.1
</TABLE>
15
<PAGE>
STOCKHOLDER PROPOSALS
---------------------
Stockholder proposals intended to be considered at the 1998 Annual Meeting
of Stockholders must be received by the Company no later than September 24,
1997. 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 September 29, 1996, 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,
/s/ DAVID R. SONKSEN
Santa Ana, California ----------------------------------
January 17, 1997 David R. Sonksen, Secretary
16
<PAGE>
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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.
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PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF MICROSEMI CORPORATION
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 25, 1997
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 25, 1997, 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 17, 1997. 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.
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