<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Maxim Integrated Products, Inc.
- --------------------------------------------------------------------------------
(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)(1) 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:
<PAGE> 2
LOGO
Dear Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Maxim to be
held at 11:00 a.m. on Thursday, November 18, 1999 at the Company's Event Center,
located at 433 N. Mathilda Avenue, Sunnyvale, California.
At this meeting you will be asked to vote on several matters recommended
unanimously by the Board of Directors. As I have done over the past few years, I
want to emphasize the importance of Proposal 2 -- our stock option
proposal -- to our past and future success.
I am proud to report that our efforts to economize paid off this year, not
only in our persistent expense reduction programs that contributed directly to
profitability even in tough times, but also in our constant attention to
minimizing dilution to you from our employee stock option grants. As a result,
this year, we are asking your approval for a smaller than normal increase in the
number of shares available for option grants. This year's request is for your
approval of a number of shares that represents only approximately 4.5 % of the
shares outstanding at the end of FY99.
In 1999, despite the adverse market conditions that affected us and the
entire semiconductor industry through the first half of the year, we continued
to give the highest priority to increasing our team of talented employees. We
were remarkably successful in recruiting key senior management and a good number
of engineers of exceptional quality, many recruited from companies that
participate in our markets.
What is striking to me about this success is that we were able to
accomplish these results with fewer option grants as a percentage of the
available pool than in the past several years. The adverse market conditions may
actually have helped us in this regard. Our commitment to new product
introductions and therefore to recruiting additional engineers was unwavering
even when other companies may have been retrenching. In addition, I think that
our company increasingly is perceived as having a culture that focuses on
excellence in every area. Ours is the kind of environment that attracts the best
and the brightest and is recognized by engineers as the place to be. However, I
know that we are in an intensely competitive labor market, competing with such
companies as Rockwell, Harris, Broadcom, Lucent, Hewlett-Packard, and others,
some of which have even created start-ups with major commitments to stock
options as the critical tool for recruiting and retention of key people, with
similar programs to Maxim's. Our reputation as a company whose stock has enjoyed
large increases in value over time and that offers options to acquire that stock
is absolutely essential to our recruiting and retaining the people we need to
achieve our goal of becoming one of the great American corporations of all time.
Fortunately for our stockholders and for our recruiting efforts, our
performance in tough economic circumstances was sufficient for us to produce
significant year-to-year increases in net revenues, earnings, and earnings per
share. Our stock appreciation was even more outstanding. Maxim stockholders who
held our stock from the end of fiscal 1998 to the end of fiscal 1999 saw an
increase in value of over 100%. An investment in Maxim stock at our IPO in 1988
has earned over 48% per year through the end of FY99. An investment five years
ago would have produced an even higher annual return, over 57% through the end
of FY99. Over those same periods, our stock market capitalization grew from
approximately $77 million at our IPO in 1988 to over $9.7 billion at the end of
fiscal 1999.
This performance provides our stockholders with financial results produced
by few other companies. It also provides the carrot we must have, in addition to
our corporate culture and working environment, to bring in and retain critical
employees.
To further minimize dilution, in fiscal 1999 we continued our practice of
repurchasing our common stock in the market from time to time using roughly the
proceeds we receive or anticipate receiving from stock option exercises, plus
the tax benefits to Maxim from deductions on account of option exercises and
sales. In 1999, we repurchased approximately 2.9 million shares for
approximately $113.9 million, using much of the
<PAGE> 3
$51.1 million of option exercise proceeds and the $114.3 million of tax benefits
realized. Our repurchase program continues, and we expect to continue to
reinvest in Maxim during FY00, making up the shortfall from last year.
We are very pleased with the results of our efforts in FY99. In part as a
result of the success we enjoyed in our recruiting efforts, we were able to
introduce to the market 284 new precision analog and mixed-signal products
during the fiscal 1999 product introduction year. Since we believe that new
product introduction is a critical factor for our future growth, we are pleased
with our engineering recruiting successes and our level of innovation in FY99.
We intend to continue relying on our option programs to support future
recruiting and retention of the key employees who will carry us through our next
decade as a public company. Retention, motivation, and commitment to Maxim by
key employees have been and will continue to be the most important factors in
determining our past and future growth.
Our Board of Directors and I urge you to vote to ratify our option
programs. Maxim's employees and I once again thank you for supporting this
strategy over the past 15 years and the wonderful partnership between
stockholders and employees that we have enjoyed.
Yours Sincerely,
/s/ JOHN F. GIFFORD
John F. Gifford
President, Chief Executive Officer
and Chairman of the Board
<PAGE> 4
MAXIM INTEGRATED PRODUCTS, INC.
120 SAN GABRIEL DRIVE
SUNNYVALE, CALIFORNIA 94086
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 18, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Maxim
Integrated Products, Inc., a Delaware corporation (the "Company"), will be held
at the Company's Event Center located at 433 N. Mathilda Avenue, Sunnyvale,
California 94086 on Thursday, November 18, 1999 at 11:00 a.m., Pacific Standard
Time, to consider and vote upon the following proposals:
1. To elect four (4) directors of the Company to serve for the ensuing year
and until their successors are elected and qualified.
2. To ratify and approve amendments to increase the number of shares
available for issuance under the Company's 1996 Stock Incentive Plan, as
amended, and 1987 Employee Stock Participation Plan, as amended.
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of the
Company's capital stock.
4. To ratify the retention of Ernst & Young LLP as the Company's
independent auditors for fiscal year ending June 24, 2000.
5. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part of
this Notice.
The Board of Directors has fixed the close of business on September 24,
1999 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
By Order of the Board of Directors
/s/ JOHN F. GIFFORD
John F. Gifford
President, Chief Executive Officer
and Chairman of the Board
Sunnyvale, California
October 8, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE
IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE TO ENSURE YOUR REPRESENTATION AND THE
PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND IN YOUR PROXY CARD AND
THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR SHARES IN PERSON, YOU MAY
STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE PROCEDURES SET FORTH
IN THE PROXY STATEMENT.
<PAGE> 5
MAXIM INTEGRATED PRODUCTS, INC.
120 SAN GABRIEL DRIVE
SUNNYVALE, CALIFORNIA 94086
------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 18, 1999
This Proxy Statement is furnished to stockholders in connection with the
solicitation of proxies by the Board of Directors of Maxim Integrated Products,
Inc., a Delaware corporation ("Maxim" or the "Company"), for use at its Annual
Meeting of Stockholders to be held at 11:00 a.m., Pacific Standard Time, on
November 18, 1999 at the Company's Event Center located at 433 N. Mathilda
Avenue, Sunnyvale, California 94086 and at any adjournment or postponement of
that meeting. The approximate mailing date for this Proxy Statement and the
enclosed proxy is October 8, 1999. The proxy holders will vote all proxies in
accordance with the instructions contained in the proxy, and if no choice is
specified the proxy holders will vote in favor of the proposals set forth in the
Notice of Meeting. Proxies will confer upon the proxy holders discretionary
authority to vote upon matters which the Board does not know as of the date
hereof are to be presented at the Annual Meeting and upon matters incident to
the conduct of the meeting.
The Board of Directors has fixed the close of business on September 24,
1999 as the record date (the "Record Date") for the determination of
stockholders entitled to vote at the Annual Meeting. At that time, there were
outstanding 137,450,029 shares of Common Stock. The presence of a majority of,
or 68,725,015 of these shares of the Common Stock, either in person or by proxy,
will constitute a quorum for the transaction of business at the Annual Meeting.
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to or at the meeting. A proxy may be revoked by
a written instrument delivered to the Secretary of the Company stating that the
proxy is revoked, by a subsequent proxy signed by the person who signed the
earlier proxy, or by attendance at the meeting and voting in person.
Holders of Common Stock are entitled to one vote for each share held. In
the election of directors, however, each stockholder has cumulative voting
rights and is entitled to as many votes as equal the number of shares held by
such stockholder multiplied by the number of directors to be elected (four). If
cumulative voting is requested at the meeting, stockholders' votes may be cast
for a single candidate or distributed among any or all of the candidates. In the
event of cumulative voting, proxy holders may distribute votes among the
nominees in such manner, as they deem advisable. Discretionary authority to
cumulate votes is solicited by the Board.
An automated system administered by the Company's transfer agent will
tabulate votes cast by proxy at the meeting, and the inspector of elections
appointed for the meeting will tabulate votes cast in person at the meeting. The
ratification and approval of the amendments to increase the number of shares
available for issuance under the Company's 1996 Stock Incentive Plan, as
amended, and 1987 Employee Stock Participation Plan, as amended, and the
ratification of the independent auditors for the Company for the current year
will require the affirmative vote of a majority of the shares of the Company's
Common Stock present or represented and entitled to vote at the meeting. The
amendment of the Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock will require the affirmative vote of a
majority of the shares of the Company's outstanding Common Stock. Because
abstentions are treated as shares present or represented and entitled to vote
for the purposes of determining whether a matter has been approved by the
stockholders, abstentions have the same effect as negative votes. Broker
non-votes and shares as to which proxy authority has been withheld with respect
to any matter are not deemed to be entitled to vote for purposes of determining
whether stockholder approval of that matter has been obtained and effectively
count as votes against Proposal No. 3, the Amendment to the Restated Certificate
of Incorporation, as amended. However, with respect to Proposals No. 2 and 4
requiring the affirmative vote of a majority of the shares present and entitled
to vote, broker non-votes have no effect.
1
<PAGE> 6
The Company will bear the cost of soliciting proxies. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Original solicitation of proxies by mail may be supplemented
by telephone, telegram, facsimile or personal solicitation by directors,
officers or other regular employees of the Company or, at the Company's request,
a private proxy solicitation firm. No additional compensation will be paid to
directors, officers or other regular employees for such services, but any
private proxy solicitation firm will be paid their customary fee by the Company,
estimated to be $5,000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of June 26, 1999 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers, directors and nominees as a
group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
-----------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF TOTAL
---------------- ---------------- ----------------
<S> <C> <C>
Janus Capital Group(2)...................................... 16,189,100 11.9%
Putnam Investments, Inc.(3)................................. 14,020,990 10.3%
T. Rowe Price Associates, Inc.(4)........................... 10,196,232 7.5%
Oak Associates, Ltd.(5)..................................... 6,993,000 5.2%
John F. Gifford(6).......................................... 1,375,254 1.0%
Ziya G. Boyacigiller(7)..................................... 600,900 *
Tunc Doluca(8).............................................. 539,158 *
Pirooz Parvarandeh(9)....................................... 320,540 *
James R. Bergman(10)........................................ 142,500 *
A.R. Frank Wazzan(11)....................................... 84,400 *
B. Kipling Hagopian(12)..................................... 53,220 *
Frederick G. Beck(13)....................................... 48,000 *
All executive officers and directors as a group (15
persons)(14).............................................. 4,852,307 3.6%
</TABLE>
- ---------------
* Less than one percent
(1) This table is based upon information supplied by officers, directors,
nominees for director, principal stockholders and the Company's transfer
agent, and contained in Schedules 13G filed with the Securities and
Exchange Commission (the "SEC"). Unless otherwise indicated, the address of
each person or entity listed is Maxim Integrated Products, Inc., 120 San
Gabriel Drive, Sunnyvale, California 94086. Unless otherwise indicated in
the footnotes to this table and subject to community property laws where
applicable, each of the stockholders named in this table has sole voting
and investment power with respect to the shares indicated as beneficially
owned. Applicable percentages are based on 135,835,376 shares outstanding
on June 26, 1999, adjusted as required by rules promulgated by the SEC.
(2) These securities are owned by various individual and institutional
investors for which Janus Capital Group serves as investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of
1934, Janus Capital Group is deemed to be a beneficial owner of such
securities; however Janus Capital Group expressly disclaims that it is, in
fact, the beneficial owner of such securities. Janus Capital Group holds
shared dispositive power and shared voting power over all of the shares
shown. The address of Janus Capital Group is 100 Fillmore Street, Suite
300, Denver, CO 80206. The table is based upon information supplied in a
Schedule 13G/A filed February 12, 1999.
(3) Certain Putnam Investments, Inc. investment managers (together with their
parent corporation, Putnam Investments, Inc. and its parent corporation,
Marsh & McLennan Companies, Inc.) are
2
<PAGE> 7
considered beneficial owners of these shares which were acquired for
certain of their advisory clients. Putnam Investments, Inc. holds shared
dispositive power over all shares shown and shared voting power over
944,360 shares. The address of Putnam Investments, Inc. is One Post Office
Square, Boston, MA 02109. The address of Marsh & McLennan Companies, Inc.
is 1166 Avenue of the Americas, New York, NY 10036. The table is based upon
information supplied in a Schedule 13G/A filed August 10, 1999.
(4) These securities are owned by various individual and institutional
investors for which T. Rowe Price Associates, Inc. serves as investment
adviser with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, T. Rowe Price Associates, Inc. is deemed to be a
beneficial owner of such securities; however T. Rowe Price Associates, Inc.
expressly disclaims that it is, in fact, the beneficial owner of such
securities. T. Rowe Price Associates, Inc. holds dispositive power over all
the shares shown, and sole voting power over 1,445,500 shares. The address
of T. Rowe Price Associates, Inc. is 100 East Pratt Street, Baltimore, MD
21202. The table is based upon information supplied in a Schedule 13G/A
dated February 10, 1999.
(5) Oak Associates, Ltd. holds sole dispositive power and sole voting power
over all shares shown. The address of Oak Associates, Ltd. is 3875 Embassy
Parkway, Suite 250, Akron, OH 44333. The table is based upon information
supplied in a Schedule 13G filed February 16, 1999.
(6) Includes 624,356 shares subject to options exercisable within 60 days of
June 26, 1999. Does not include shares held in trust for the benefit of Mr.
Gifford's children.
(7) Includes 400,900 shares subject to options exercisable within 60 days of
June 26, 1999.
(8) Includes 344,004 shares subject to options exercisable within 60 days of
June 26, 1999.
(9) Includes 320,000 shares subject to options exercisable within 60 days of
June 26, 1999.
(10) Includes 22,500 shares subject to options exercisable within 60 days of
June 26, 1999.
(11) Includes 7,500 shares subject to options exercisable within 60 days of June
26, 1999.
(12) Includes 35,000 shares subject to options exercisable within 60 days of
June 26, 1999.
(13) Represents shares subject to options exercisable within 60 days of June 26,
1999.
(14) Includes 3,094,042 shares subject to options exercisable within 60 days of
June 26, 1999. Does not include shares held in trust for the benefit of Mr.
Gifford's children.
There is no family relationship between any of the directors, or between
any of such directors and any of the Company's executive officers.
PROPOSAL 1
ELECTION OF DIRECTORS
Action is to be taken at the Annual Meeting with respect to the election of
directors to fill the four board positions presently authorized. Each director
to be elected will hold office until his successor is elected and qualified, or
until his earlier death, resignation or removal. Stock represented by the
accompanying proxy will be voted for the election of the four nominees
recommended by the Board of Directors, who are named in the following table,
subject to discretionary power to cumulate votes, unless the proxy is marked in
such a manner as to withhold authority so to vote. All of the nominees were
elected directors by a vote of the stockholders at the last Annual Meeting of
Stockholders which was held on November 19, 1998. The candidates receiving the
highest number of votes, up to the number of directors to be elected, will be
elected. If any nominee for any reason is unable to serve or for good cause will
not serve, the proxy may be voted for such substitute nominee as the persons
appointed in the proxy may in their discretion determine. Stock represented by
the accompanying proxy cannot be voted for a greater number of persons than the
number of nominees (four).
3
<PAGE> 8
The following is information regarding the nominees, including information
furnished by them as to their principal occupations for the preceding five-year
period, certain directorships, and their ages as of October 8, 1999.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
---- --- --------------
<S> <C> <C>
James R. Bergman............................................ 57 1988
John F. Gifford............................................. 58 1983
B. Kipling Hagopian......................................... 57 1997
A.R. Frank Wazzan........................................... 64 1990
</TABLE>
Mr. Bergman has been a general partner of DSV Associates since 1974 and a
founder of DSV Partners, DSV Partners III and DSV Partners IV. These firms
provide venture capital and management assistance to emerging companies,
primarily in high technology. Since August 1996, Mr. Bergman has been a partner
of Brantley Venture Management, L.P., the General Partner of Brantley Venture
Partners, III, a private venture capital partnership. Since October 1996, Mr.
Bergman has served as Vice President of Brantley Capital Corporation, a
publicly-held business development company traded on the Nasdaq SmallCap Market.
Mr. Gifford, a founder of the Company, has served as Maxim's President and
Chief Executive Officer since its incorporation in April 1983.
Mr. Hagopian was a founder of Brentwood Associates, a venture capital
investment company, and has been a general partner of all of the funds started
by Brentwood from inception in 1972 until 1989. He has been a Special Limited
Partner of each of the three Brentwood funds started since then. Mr. Hagopian is
also Chairman and President of Segue Productions, a feature film production
company, and a partner of Apple Oaks Partners LLC, a private investment company
which manages his own capital and the capital of one other individual.
Dr. Wazzan is Dean of the School of Engineering and Applied Science,
University of California, Los Angeles, a position he has held since 1987. He has
been employed by UCLA since 1962.
FURTHER INFORMATION CONCERNING THE BOARD
During the fiscal year ended June 26, 1999, the Board of Directors held six
meetings. The Company has a standing Audit Committee, which met once during the
fiscal year, a standing Compensation Committee, which met seven times during the
fiscal year and a standing Interim Option Committee consisting of the Chief
Executive Officer as the sole member. The Board does not have a nominating
committee or a committee performing the functions of a nominating committee.
During the fiscal year ended June 26, 1999, all members of the Board attended at
least 75% of the meetings of the Board and of the committees on which each
served.
The Audit Committee is comprised of Messrs. Bergman and Hagopian and Dr.
Wazzan. Among the committee's functions are recommending engagement of the
Company's independent auditors and meeting with such auditors to consider the
scope and results of the annual audit, and to receive and consider the auditors'
comments on internal controls, accounting staff and similar matters.
The Compensation Committee is comprised of Messrs. Bergman and Hagopian and
Dr. Wazzan. The Compensation Committee determines salaries and incentive
compensation for the president and other executive officers, awards stock
options to employees, consultants and other eligible grantees under the
Company's stock option plans and performs such other functions regarding
compensation as the Board may delegate.
The Interim Option Committee is comprised of the Chief Executive Officer.
This Committee is authorized between meetings of the Board of Directors or
Compensation Committee to make stock option grants and otherwise administer the
Company's 1996 Stock Incentive Plan with the same authority as that of the
Compensation Committee except with regard to option grants to officers or
directors.
4
<PAGE> 9
Nonemployee directors of the Company receive a $4,000 annual retainer and
fees of $1,000 per meeting attended.
Directors participate in the 1996 Stock Incentive Plan (the "1996 Plan")
which authorizes the granting of non-qualified stock options with respect to an
aggregate of 28,000,000 shares of the Company's Common Stock (subject to
adjustments provided therein). Each director receives an annual non-qualified
stock option grant covering 10,000 shares that vest in quarterly installments
during the year following the year in which all prior option grants become fully
vested.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation for the Company's Chief Executive Officer at June 26, 1999
and the four most highly compensated executive officers other than the CEO who
were serving as executive officers at June 26, 1999 for all services rendered in
all capacities to the Company and its subsidiaries during the fiscal years ended
June 26, 1999, June 27, 1998 and June 30, 1997 is set forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
NAME AND ----------------------- UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
------------------ ---- --------- ---------- ------------
<S> <C> <C> <C> <C>
John F. Gifford................................ 1999 $264,023 $ * 520,000
President, Chief Executive Officer 1998 264,023 1,722,609 700,000
and Chairman of the Board 1997 264,023 1,288,756 800,000
Frederick G. Beck.............................. 1999 170,000 * 39,000
Vice President 1998 170,000 306,962 90,000
1997 170,000 265,881 70,000
Ziya G. Boyacigiller........................... 1999 170,000 * 52,000
Vice President 1998 170,000 426,299 120,000
1997 167,000 349,150 80,000
Tunc Doluca.................................... 1999 170,000 * 65,000
Vice President 1998 170,000 339,485 150,000
1997 170,000 409,145 140,000
Pirooz Parvarandeh............................. 1999 170,000 * 52,000
Vice President 1998 170,000 326,289 120,000
1997 150,000 81,250 64,000
</TABLE>
- ---------------
* Pursuant to the Company's Bonus Plan, approved by the Company's stockholders
in 1997, $5,806,389 is available for executive officer performance bonuses
relating to fiscal 1999. Under the provisions of the Bonus Plan the
Compensation Committee is not obliged to award the entire bonus pool and no
officer may be paid more than 50% of the pool, or $2,903,194. The annual
salary reviews for the Company's officers have not yet occurred and
performance bonuses have not yet been determined.
5
<PAGE> 10
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The Board of Directors and the committees to which it delegates authority
currently have authority to grant stock options to employees and others under
the 1996 Plan. The following three tables set forth certain information
regarding stock options granted to, exercised by and owned by the executive
officers named in the foregoing Summary Compensation Table during fiscal 1999.
OPTION GRANTS IN FISCAL YEAR 1999
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT
------------------------------------------------------ ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE(2) 5%($) 10%($)
---- ----------- ------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
John F. Gifford............... 520,000(3) 7.63% $49.1875 05/25/09 16,085,552 40,763,948
Frederick G. Beck............. 39,000(4) 0.57% 49.1875 05/25/09 1,206,416 3,057,296
Ziya G. Boyacigiller.......... 52,000(4) 0.76% 49.1875 05/25/09 1,608,555 4,076,395
Tunc Doluca................... 65,000(4) 0.95% 49.1875 05/25/09 2,010,694 5,095,493
Pirooz Parvarandeh............ 52,000(4) 0.76% 49.1875 05/25/09 1,608,555 4,076,395
</TABLE>
- ---------------
(1) The dollar amounts under these columns are the result of calculations at the
5% and 10% annual rates of stock price appreciation prescribed by the SEC
and are not intended to forecast possible future appreciation, if any, of
the Company's stock price. No gain to the optionees is possible without an
increase in the price of the Company's stock, which will benefit all
stockholders.
(2) The options were granted for a term of ten years, but are subject to earlier
termination under certain circumstances relating to termination of
employment or a change of control of the Company. Options may be repriced
under certain limited circumstances.
(3) The options were granted on May 26, 1999 and will become exercisable on a
quarterly basis during the year ending July 1, 2003 or 2004.
(4) The options were granted on May 26, 1999 and will become exercisable on a
quarterly basis during the year ending July 1, 2004.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1999
AND JUNE 26, 1999 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED JUNE 26, 1999(#) JUNE 26, 1999($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John F. Gifford............ 200,000 $9,472,187 174,356 2,150,000 $ 4,446,078 $29,531,250
Frederick G. Beck.......... 120,000 4,362,253 24,000 303,000 1,360,500 11,662,063
Ziya G. Boyacigiller....... 23,100 1,335,964 376,900 356,000 22,190,036 13,880,750
Tunc Doluca................ 65,000 3,282,384 314,004 385,000 18,162,471 14,017,813
Pirooz Parvarandeh......... 55,000 2,425,719 300,000 352,000 17,374,188 13,491,938
</TABLE>
- ---------------
(1) Based on a price per share of $62.625, which was the price of a share of
Common Stock on the Nasdaq National Market at the close of business on June
26, 1999.
6
<PAGE> 11
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Messrs.
Beck, Boyacigiller, Doluca, and Parvarandeh. The agreements do not grant the
executive officers any right to be retained by the Company, and the Company may
terminate employment of each executive officer either with or without cause. In
the event of termination of employment by the Company with or without cause, all
compensation and benefits, except benefits provided by law (e.g., COBRA health
insurance continuation benefits) immediately cease to accrue. However, in the
event of termination of employment by the Company without cause, severance
payments are to be made in accordance with the Company's normal policy or as
mutually agreed between the Company and the executive officer.
If the executive officer terminates his full-time employment with the
Company and his written notice of termination provides that he is willing to act
as a consultant to the Company, the Company will make health insurance coverage
available to the executive officer and his family. The terms of the consultancy,
unless otherwise agreed, will provide for part-time consulting (up to one day
per month) and annual compensation equal to at least 5% of the executive
officer's base salary at the time of termination. Health insurance coverage
means coverage under any group health plan the Company maintains for its
employees.
During the ten-year period following the notice of termination, the
executive officer pays the same amount for health coverage as a similarly
situated full-time employee is required to pay for coverage under the Company's
group health plan. After the ten-year period, the executive officer pays the
Company's cost of the coverage. In the event of the executive officer's death
while receiving health insurance coverage, the executive officer's spouse is
eligible for health insurance coverage until her death so long as she pays for
the coverage in an amount equal to the cost for an employee with identical
coverage. In the event the executive officer becomes disabled while receiving
health insurance coverage, he is deemed to be a consultant to the Company during
the disability.
In addition to the executive officers identified above, most other officers
of the Company are parties to employment agreements with provisions
substantially similar to those described above.
Mr. Gifford entered into an employment agreement with the Company in 1987,
which was amended and restated in February 1994. The agreement provides that Mr.
Gifford propose annually the amount of his bonus to the Board of Directors,
which shall reflect the Company's achievements and profitability for the
preceding year, and shall be reflective of the accomplishments of the management
group as a whole. The Board of Directors, in its discretion, shall approve or
modify such proposed bonus; provided that any bonus awarded shall not be less
than the bonus paid to any officer. The employment agreement provides vesting
for 100% of the unvested portion of his stock options either upon Mr. Gifford's
death or upon his disability, which results in his termination of employment,
while employed by the Company. The employment agreement also provides that in
the event Mr. Gifford becomes disabled while employed by the Company, as long as
Mr. Gifford remains disabled, the Company will provide for continuation of his
base salary (offset by any earnings) for life through insurance or direct
payment, or both. In addition, if Mr. Gifford's employment with the Company is
terminated due to disability, the Company will provide to Mr. Gifford the
post-employment health insurance coverage on the same terms as the other
officers described above. In addition, in the event Mr. Gifford's employment is
terminated without cause as defined in the agreement, the Company will retain
Mr. Gifford as a consultant and Mr. Gifford agrees to remain available to the
Company as a consultant for a period of either (i) one (1) year in the event
that his employment is terminated with justification as defined in the agreement
or (ii) two (2) years if his employment is terminated without justification as
defined in the agreement. During the period that Mr. Gifford serves as a
consultant to the Company, he shall not be required to devote more than two (2)
days a week to such consulting activities. During the period of Mr. Gifford's
retention as a consultant, he shall be entitled to full pay, which is defined as
his average annual total compensation (salary plus bonus) received during the
previous two years, normal employee benefits, and his stock options and shares
of restricted stock shall continue to vest. In addition, if Mr. Gifford's
employment is terminated without cause or justification, the vesting of his
stock options and shares of restricted stock shall be immediately accelerated so
that the options and stock that would otherwise have vested over the two (2)
year period commencing two (2) years after the date of termination shall become
immediately exercisable. Thus, if his
7
<PAGE> 12
termination is without cause or justification, Mr. Gifford will vest a total of
four (4) years of options and restricted stock, two (2) years tied to continuing
consulting retention and two (2) years by acceleration of vesting that would
otherwise have occurred if he had remained employed for the third and fourth
years after the date of his termination. The employment agreement also provides
that upon a "change of control" of the Company, as such term is defined in his
employment agreement, 50% of his unvested stock and options shall become fully
vested on the date of the sale or merger. The remainder of the stock and options
shall become fully vested within one year of the sale or merger provided that
Mr. Gifford is willing (whether or not he is actually requested to do so) to
remain as CEO for the remaining vesting period of his options up to a maximum of
one year. The employment agreement provides Mr. Gifford fringe benefits
substantially equal to other officers. If Mr. Gifford terminates his full-time
employment with the Company and his written notice of termination provides that
he is willing to act as a consultant to the Company, the Company will provide to
Mr. Gifford the post employment health insurance coverage on the substantially
same terms as the other officers described above.
In addition, the Company and Mr. Gifford have entered into a deferred
compensation plan, pursuant to which Mr. Gifford defers receipt of a portion of
his cash compensation. Deferred payments bear interest at the rate equal to the
interest rate (as adjusted from time to time) that employees of the Company are
required to pay the Company under the Company's employee loan program (6% in
fiscal year 1999). Interest is credited at least quarterly. Deferred payments,
including interest, are payable beginning (i) upon his termination as an
employee or consultant to the Company, in approximately equal quarterly
installments over a five year period with interest at the Bank of America prime
rate from time to time, (ii) upon his death, payable to his designated
beneficiary, in a lump sum payment as soon as administratively possible or (iii)
in the event of an unforeseeable emergency. As of June 26, 1999, Mr. Gifford's
deferred account balance, including interest thereon, totaled $5,438,834.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION((1))
The Compensation Committee of the Board of Directors reviews and approves
cash and equity compensation for the Company's chief executive officer and other
executive officers. Cash compensation is comprised of a salary and bonus, and
equity compensation has been comprised of stock options.
The level of compensation is related to both corporate and individual
performance. Corporate performance is judged based upon results in the current
year, but more importantly on the Company's performance over the longer term.
Individual performance is measured based upon particular responsibilities of
each function, performance to specified goals and general management skills.
Salary. The Compensation Committee meets at least annually to review and
approve each executive officer's salary for the ensuing year. The base salary
component of compensation is intended to reward an executive officer for normal
levels of performance, as opposed to the bonus component which is intended to
compensate for performance exceeding expected levels. When reviewing base
salaries, the Compensation Committee considers the following factors: individual
performance, corporate performance (such as that described below under CEO
Compensation), levels of responsibility and prior experience. The Compensation
Committee also reviews published information regarding the compensation of
executive officers at companies comparable to Maxim to determine that the
Company's compensation is both competitive and reasonable, but does not attempt
to set compensation within any particular range or level by comparison with the
compensation reviewed.
Bonus. In 1997 the Company adopted, and its stockholders approved, a Bonus
Plan for the Company's executive officers. Under the Bonus Plan, a bonus pool
will be created up to a maximum of 3% of the
- ---------------
(1) This Section is not "soliciting material," is not deemed filed with the SEC
and is not to be incorporated by reference in any filing of the Company under
the Securities Act of 1933, as amended (the "Securities Act") or the Securities
and Exchange Act of 1934, as amended (the "Exchange Act") whether made before or
after the date hereof and irrespective of any general incorporation language in
any such filing.
8
<PAGE> 13
Company's pre-tax earnings, with the specific amount of the pool determined by
equal weighting of two performance criteria: (a) the rate of growth in the
Company's earnings per share and (b) the increase in the market price of its
stock. The bonus pool will be based on the Company's actual achievement related
to these objective performance criteria versus a target growth of 30% per year.
From this pool, each executive officer will receive a bonus in respect of each
fiscal year, in an amount to be determined by the Compensation Committee based
on the same objective performance criteria. The maximum bonus that may be paid
in any fiscal year to any executive officer, including the Chief Executive
Officer, is one-half of the pool. After the end of each fiscal year, the
Compensation Committee is to determine and certify the Company's performance as
compared to the criteria set for that fiscal year, and to determine the amount
of each executive officer's bonus for such year. The Compensation Committee
reserves the right to pay any executive officer less than the maximum bonus
determined under the objective performance criteria based upon the Compensation
Committee's determination of that executive officer's individual performance
during the year. The actual cash bonus for each individual executive officer,
aside from the CEO (discussed below), is determined by first setting a maximum
bonus for each officer position based upon perfect performance of that position
and the total bonus pool available, and then considering the individual
performance of the executive officer involved. Executive officer bonuses for
fiscal 1999 have not yet been determined.
Stock Options. Given the Company's limited resources and commitment to the
bottom line, the Company believes it cannot rely solely on cash compensation to
compete for and to provide incentives to its employees. Stock options are,
therefore, used by the Company to provide long-term incentives to executive
officers. The Company has attempted for a number of years to provide for each
executive officer, and for most other employees who participate in the Company's
stock option program, a number of shares subject to option that will vest over a
continuous period of usually four to five years into the future. To accomplish
this the Company has added one to two years of unvested options every one to
three years. The number of options per officer is determined by an assessment
principally of the significance of the function performed by the officer and
also of the officer's individual past, current and expected future contribution
to the success of the Company.
CEO Compensation. Mr. Gifford is a participant in the Bonus Plan and is
subject to the maximum bonus limitation described above. Consistent with the
Bonus Plan and Mr. Gifford's Employment Agreement, his annual bonus "shall
reflect the Company's achievements and profitability for the preceding year, and
shall be reflective of the accomplishments of the management group as a whole."
Mr. Gifford's bonus for fiscal 1999 has not yet been determined.
Section 162(m). Section 162(m) of the Internal Revenue Code (the "Code")
limits the Company to a deduction for federal income tax purposes of no more
than $1 million of compensation paid to the chief executive officer and the four
other most highly paid executive officers in a taxable year. Compensation above
$1 million may be deducted if it is "performance-based compensation" within the
meaning of the Code.
The Board has determined that stock options shall be treated as
"performance-based compensation." The Company's stockholders previously approved
the option plans, which would generally allow any compensation recognized by an
executive officer named in the Summary Compensation Table as a result of the
grant of such a stock option to be deductible by the Company. In addition, the
stockholders have approved the Bonus Plan, and the Company believes that awards
paid under the Bonus Plan are exempt from the $1 million deduction limitation of
Section 162(m).
COMPENSATION COMMITTEE
James R. Bergman
B. Kipling Hagopian
A.R. Frank Wazzan
9
<PAGE> 14
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. 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 they file.
To the best of the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations that
no other reports were required, during the fiscal year ended June 26, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with, except that one
transaction was reported late on a Form 4 by The Gifford Foundation and one
transaction was reported late on a Form 4 by Dr. Wazzan.
CERTAIN TRANSACTIONS
The Company employs in various positions Tracy Jones, Cameron Jones and
Kevin Lynch, the daughter, son-in-law and son-in-law, respectively, of the
Company's Chief Executive Officer. In fiscal 1999, Mrs. Jones received a total
of $51,113 of cash compensation and $908,328 in realized gains from the exercise
of stock options. Mr. Jones received $57,139 of cash compensation and $981,493
in realized gains from the exercise of stock options in fiscal 1999. Mr. Lynch
received a total of $104,452 of cash compensation and $481,593 in realized gains
from the exercise of stock options during fiscal 1999. Also, during the fiscal
year, Mrs. Jones, Mr. Jones and Mr. Lynch were granted options to purchase
8,100, 2,500 and 5,000 shares, respectively, of the Company's Common Stock at
exercise prices between $23.9375 and $49.1875 per share. The Company believes
that the terms of each such individual's employment, including their cash
compensation and option grants, are commensurate with other employees in
comparable positions. The exercise price of each option granted to these
individuals was at 100% of the fair market value of the Company's Common Stock
on the date of grant.
In August 1996, the Company made a loan to Mr. Rigg, the Company's Vice
President of Administration and General Counsel, in the aggregate of $150,000.
The loan was evidenced by a promissory note (the "Note"). The Note incurred
interest at a rate of four percent per year and was repayable on August 23,
1999. The Note was secured by a pledge agreement between the Company and Mr.
Rigg. On June 16, 1999, Mr. Rigg repaid the Note in full including accrued
interest.
In April 1998, the Company made a loan to Mr. Jasper, the Company's Vice
President and Chief Financial Officer, in the aggregate of $100,000. The loan is
evidenced by a promissory note (the "Note"). The Note incurs interest at a rate
of six percent per year and is repayable on April 17, 2001. The Note is secured
by a pledge agreement between the Company and Mr. Jasper. The amount outstanding
on the Note including accrued interest as of June 26, 1999 is $107,151.
10
<PAGE> 15
PERFORMANCE GRAPH
The following chart shows the value of an investment of $100 on June 30,
1994 in cash of (i) the Company's Common Stock, (ii) the Nasdaq Stock Market
(U.S.) Index and (iii) the Nasdaq Electronic Components Index. All values assume
reinvestment of the full amount of all dividends and are calculated as of June
30 of each year.
COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL RETURN*
AMONG MAXIM INTEGRATED PRODUCTS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ ELECTRONIC COMPONENTS INDEX
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
MAXIM INTEGRATED PRODUCTS, NASDAQ ELECTRONIC NASDAQ STOCK MARKET
INC. COMPONENTS (U.S.)
-------------------------- ----------------- -------------------
<S> <C> <C> <C>
Jun-94 100 100 100
Jun-95 196 206 133
Jun-96 210 218 171
Jun-97 438 358 208
Jun-98 478 362 271
Jun-99 1023 594 374
</TABLE>
* $100 Invested on June 30, 1994 in Stock or Index --
Including Reinvestment of Dividends.
Year Ending June 30.
11
<PAGE> 16
PROPOSAL 2
RATIFICATION AND APPROVAL OF AMENDMENTS
TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE
UNDER THE COMPANY'S 1996 STOCK INCENTIVE PLAN, AS AMENDED,
AND 1987 EMPLOYEE STOCK PARTICIPATION PLAN, AS AMENDED
The Company's stockholders are being asked to act upon a proposal to ratify
and approve the action of the Board of Directors amending the 1996 Stock
Incentive Plan (the "1996 Plan") and the 1987 Employee Stock Participation Plan
(the "ESP Plan") to increase the pool of shares of Common Stock issuable under
the 1996 Plan and the ESP Plan (the "Employee Stock Plans") by 6,000,000 shares
(the "Increase").
Ratification of the Increase requires the approval of a majority of the
shares represented in person or by proxy and voting at the Annual Meeting.
A general description of the principal terms of the Employee Stock Plans,
the Increase approved by the Board of Directors and the purpose of such Increase
are set forth below. Unless otherwise marked, all properly signed and returned
proxies will be voted FOR Proposal No. 2. The Board of Directors recommends a
vote FOR this proposal.
The Company has determined that substantial equity participation for
employees is critically important to creating an organization in which employees
will remain for very long periods of time and the Employee Stock Plans are
designed to contribute toward this goal.
Since the 1996 Plan was adopted in August 1996, the number of shares that
have been available for issuance (after adjustments to give effect to the 2 for
1 stock split in December 1997) is as follows: on adoption, 7,000,000 shares
increased to 14,500,000 shares in 1997 and shares increased to 22,000,000 shares
in 1998. The current proposal is to increase the pool for the Employee Stock
Plans to a total of 28,000,000 shares.
Prior to adoption of the 1996 Plan the ESP Plan shared in the common pool
of shares available for the stock option plans that were superseded by the 1996
Plan. The total pool for all those plans, including the ESP Plan, was 91,120,000
shares at the time of adoption of the superseding 1996 Plan.
As of June 26, 1999, 41,615,446 stock options remain outstanding from all
of the Company's stock option plans, of which 16,604,914 options were vested and
exercisable while the remaining 25,010,532 options vest over the next ten years
as follows:
<TABLE>
<CAPTION>
YEAR ENDING JUNE 30, NUMBER OF OPTIONS TO VEST
-------------------- -------------------------
<S> <C>
2000.............................................. 6,406,595
2001.............................................. 5,272,281
2002.............................................. 4,839,443
2003.............................................. 3,963,952
2004.............................................. 3,263,373
2005.............................................. 1,007,851
2006.............................................. 112,669
2007.............................................. 68,265
2008.............................................. 50,971
2009.............................................. 25,131
</TABLE>
The principal uses for the Increase are to provide for option grants under
the 1996 Plan for recruiting employees by offering a means by which their
creativity and dedicated efforts will allow them to participate in increased
stockholder value; and for grants to existing employees generally for periods
vesting beyond 2002, by adding option grants at the end of an employee's current
vesting period. In addition, the pool will be available for the ESP Plan to
offer incentive to eligible employees to contribute to increases in stock
values. The Board of Directors believes that the attraction, retention and
motivation of highly qualified personnel are essential to the Company's
continued growth and success and that incentive plans such as the 1996 Plan and
ESP Plan are necessary for the Company to remain competitive in its compensation
practices.
12
<PAGE> 17
As of June 26, 1999, there were a total of 41,615,446 shares subject to
outstanding options under the option plans of which 19,965,106 were subject to
options outstanding under the 1996 Plan, and a maximum of 380,489 shares subject
to outstanding rights under the ESP Plan.
As of June 26, 1999, options outstanding under the option plans had
exercise prices ranging from $0.89 to $62.50 and expiration dates ranging from
August 14, 1999 to May 25, 2009. Options outstanding under the 1996 Plan had
exercise prices ranging from $0.89 to $62.50 and expiration dates ranging from
December 23, 2001 to May 25, 2009.
As of June 26, 1999, rights outstanding under the ESP Plan had an exercise
price of $37.35 (or 85% of the fair market value of the Company's Common Stock
on the exercise date, if less), and an expiration date of December 31, 1999.
Amended Plan Benefits. As of the date of this Proxy Statement, no executive
officer, employee or director and no associates of any executive officer or
director has been granted any options subject to shareholder approval of the
proposed amendment. In addition, no executive officer or employee of the Company
has been granted any rights to purchase stock pursuant to the ESP Plan subject
to shareholder approval of the proposed amendment. The benefits to be received
pursuant to the 1996 Plan and ESP Plan amendment by the Company's directors,
executive officers and employees are not determinable at this time.
THE MATERIAL FEATURES OF THE 1996 PLAN ARE AS FOLLOWS:
Purpose. The purpose of the 1996 Plan is to increase stockholder value,
which is accomplished largely as a result of the Company's successful, on-going
stock option programs in which 1,470 salaried employees (approximately 90% of
all salaried employees) currently participate. The Company believes that Maxim's
long-term commitment to employee ownership of Maxim stock has significantly
contributed both to successful recruiting and to limiting turnover among
employees. The Company also strongly believes that the employee ownership of
Maxim is largely responsible for Maxim's consistent and impressive growth.
The 1996 Plan originally authorized the granting of incentive stock options
and non-qualified stock options with respect to an aggregate of 7,000,000 shares
of the Company's Common Stock and has been amended by the Board of Directors to
authorize the granting of options with respect to an additional 21,000,000
shares. The 1996 Plan replaced the Company's 1987 Supplemental Stock Option Plan
which expired on June 1, 1997, and the Company's Incentive Stock Option Plan and
Supplemental Nonemployee Stock Option Plan which will both expire on August 12,
2002. Any shares or options returned to the option plans will increase the
number of shares available for options under the 1996 Plan. At June 26, 1999,
the 3,736,126 shares available for grant under the 1996 Plan equaled
approximately 2.7% of the Company's outstanding shares. The closing price of the
Company's Common Stock on the Nasdaq National Market on September 24, 1999 was
$67.3125.
The Common Stock covered by the 1996 Plan may be either authorized but
unissued shares or treasury shares. If there is a lapse, expiration, termination
or cancellation of any option granted under the 1996 Plan without the issuance
of shares or payment of cash thereunder, or if shares are issued under any
option under the 1996 Plan and thereafter are reacquired at their original
purchase price by the Company pursuant to rights reserved upon the issuance
thereof, or pursuant to the payment of the purchase price of shares under
options by delivery of other Common Stock of the Company, the shares subject to
or reserved for such option, or so reacquired, may again be used for new options
under the 1996 Plan. However, the Common Stock issued under the 1996 Plan that
is not reacquired by the Company pursuant to rights reserved upon the issuance
thereof or pursuant to payment of the purchase price of shares under options by
delivery of other Common Stock of the Company may not exceed the total number of
shares reserved for issuance under the 1996 Plan.
The following summary of certain provisions of the 1996 Plan is qualified
in its entirety by reference to the 1996 Plan, a copy of which has been filed
electronically with the SEC as an appendix to this Proxy Statement.
Administration. The 1996 Plan provides that grants of options and other
determinations under the 1996 Plan shall be made by (i) the Board of Directors
or (ii) a Committee designated by the Board (the
13
<PAGE> 18
"Administrator") which, in case of grants of options to employees who are
officers or directors of the Company, is constituted in a manner to permit the
grants and related transactions under the 1996 Plan to be exempt from Section
16(b) of the Exchange Act in accordance with Rule 16b-3 of the Securities
Exchange Commission and which, in the case of grants to "covered employees," is
intended to constitute "performance-based compensation" is made up solely of two
or more "outside directors" as such terms are defined under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code").
Performance Based Compensation. Section 162(m) of the Code limits to $1
million annually the deduction a public corporation may claim for compensation
paid to any of its top five executive officers, except in limited circumstances.
One such exception is for "performance based compensation," which is defined as
compensation paid solely on account of the attainment of one or more performance
goals, but only (1) if the goals are determined by a compensation committee of
the Board of Directors comprised of two or more outside directors, (2) the
performance goals are disclosed to stockholders and approved by a majority vote
before the remuneration is paid, and (3) before the remuneration is paid, the
compensation committee certifies that the performance goals and any other
material terms were in fact satisfied.
Internal Revenue Service regulations provide that compensation attributable
to a stock option will be deemed to satisfy the requirement that performance
goals be pre-established if the grant of the option is made by the compensation
committee; the plan under which the option is granted states the maximum number
of shares with respect to which options or rights may be granted during a
specified period to any employee; and, under the terms of the option, the amount
of compensation the employee could receive is based solely on an increase in the
value of the stock after the date of the grant.
The 1996 Plan includes features intended to permit the Administrator to
grant options to employees that will qualify as performance-based compensation.
The 1996 Plan limits the number of shares with respect to which incentive stock
options and non-qualified stock options may be granted in any one fiscal year of
the Company to any one participant to 6,000,000 shares.
Eligibility. Selected employees, directors, consultants, advisors,
independent contractors, vendors, customers and others having a past, current or
prospective business relationship with the Company and any parent or
subsidiaries will be eligible to receive options under the 1996 Plan. Options
may be granted to eligible persons residing in foreign jurisdictions under
additional terms and conditions to accommodate local laws and to provide such
eligible persons favorable treatment under local laws, provided that no such
terms are inconsistent with the 1996 Plan.
Duration. The 1996 Plan will continue in effect until terminated by the
Board of Directors, except that no option may be granted more that ten years
after the date of adoption of the 1996 Plan by the Board of Directors.
Adjustments. The 1996 Plan provides for adjustment in the number of shares
reserved and in the shares covered by each outstanding option in the event of a
stock dividend or stock split and may provide in the Administrator's discretion
for vesting of options and removal of restrictions on options in the event of
certain corporate transactions, including a change of ownership or control of
the Company. Generally, a change in control will occur for purposes of the 1996
Plan in the event of the acquisition by any person of beneficial ownership of
50% or more of the Company's voting stock, other than an acquisition directly
from the Company or as part of a business combination approved by the Board of
Directors.
Options. The 1996 Plan provides that the purchase price of any incentive
stock option shall be at least 100% of the fair market value of the Common Stock
at the time the option is granted. The 1996 Plan further provides that the
purchase price of any non-qualified stock option shall be not less than 85% of
fair market value at the time the option is granted unless otherwise determined
by the Administrator, provided that the exercise price may be less than 100% of
fair market value only if the Administrator determines in writing in good faith
that (i) such grants are made infrequently, (ii) there is a good business reason
for the grant that outweighs the normal presumption of per share exercise price
of not less than one hundred percent of the fair market value per share on the
date of grant, and (iii) the aggregate number of shares subject to such option
does not exceed 5% of the total number of shares identified in the 1996 Plan as
amended from time to time.
14
<PAGE> 19
The 1996 Plan provides that the aggregate fair market value (determined as of
the time the option is granted) of the Common Stock with respect to which
incentive stock options may become exercisable for the first time by any
individual during any calendar year may not exceed $100,000. The Administrator
may provide for the payment of the purchase price in cash, by delivery of other
Common Stock of the Company having a market value equal to the purchase price of
such shares, or by any other method, such as delivery of promissory notes. A
participant may pay the purchase price by delivery of an exercise notice
accompanied by a copy of irrevocable instructions to a broker to deliver
promptly to the Company sale or loan proceeds to pay the purchase price.
The Administrator may permit or require a participant to pay all or a
portion of the federal, state and local taxes, including FICA and Medicare
withholding tax, arising in connection with the exercise of a non-qualified
stock option by having the Company withhold shares or by delivering shares
received in connection with the option or previously acquired, having a fair
market value approximating the amount to be withheld.
The period of any option will be ten years from the date it is granted,
except that the period for options granted to non-employee directors shall be
five years. Options are exercisable for a period of 90 days after termination or
retirement, 547 days after termination due to death, or 365 days after
termination due to disability.
Amendments and Discontinuance. The Plan is subject to amendment or
termination by the Board of Directors without stockholder approval as deemed in
the best interests of the Company. However, no such amendment shall, without the
consent of the holder, reduce the amount of any option or adversely change the
terms and conditions thereof.
The terms and conditions applicable to any options granted and outstanding
may at any time be amended, modified, or canceled by mutual agreement between
the Administrator and the participant so long as any amendment or modification
does not increase the number of shares of Common Stock issuable under the 1996
Plan. In addition, options granted under the 1996 Plan may only be repriced by
the Board or the Compensation Committee under the following limited conditions:
(i) the number of options subject to repricing in any 12 month period may not
exceed 5% of the aggregate pool of shares reserved for issuance under the 1996
Plan, and (ii) repricing should occur only infrequently and must not be solely
due to poor operating performance by the Company.
Federal Income Tax Consequences. In fiscal 1999, exercises of employee
stock options resulted in over $114.3 million of cash savings as a result of tax
deductions for the Company and in $51.1 million of cash to the Company from
stock option exercises, for total cash generated of over $165.4 million, a
significant contribution to the strength of the Company's balance sheet and,
given the Company's use of such funds to repurchase its Common Stock in the open
market, a material reduction to any dilutive effect of such programs.
Under existing law and regulations, the grant of non-qualified stock
options will not result in income taxable to the employee or provide a deduction
to the Company. However, the exercise of a non-qualified stock option results in
taxable income to the holder, and the Company is entitled to a corresponding
deduction. At the time of the exercise of a non-qualified stock option, the
amount so taxable and so deductible will be the difference between the fair
market value of the shares purchased and the exercise price.
No income is recognized by an optionee when an incentive stock option is
granted or exercised. If the holder holds the shares received on exercise of an
incentive stock option for at least two years from the date of grant and one
year from date of receipt of the optioned stock, any gain realized by the holder
on the disposition of the stock will be accorded long-term capital gain
treatment, and no deduction will be allowed to the Company. If the holding
period requirements are not satisfied, the employee will recognize ordinary
income at the time of disposition equal to the lessor of (i) the gain realized
on the disposition, or (ii) the difference between the option price and the fair
market value of the shares on the date of exercise. Any additional gain on the
disposition not reflected above will be long-term or short-term capital gain,
depending upon the length of time the shares are held. The Company will be
entitled to an income tax deduction equal to the amount of ordinary income
recognized by the employee.
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<PAGE> 20
The foregoing discussion is not a complete description of the federal
income tax aspects of options under the 1996 Plan. In addition, administrative
and judicial interpretations of the application of the federal income tax laws
are subject to change. Furthermore, no information is given with respect to
state or local taxes that may be applicable to any options. Participants in the
1996 Plan who are residents of or are employed in a country other than the
United States may be subject to taxation in accordance with the tax laws of that
particular country in addition to or in lieu of United States federal income
taxes.
THE MATERIAL FEATURES OF THE ESP PLAN ARE AS FOLLOWS:
Under the ESP Plan, any person who is customarily employed at least 20
hours per week and five months per calendar year by the Company on the first day
of each Purchase Period (as defined in "Terms of Rights Under the Plans, ESP"
below) is eligible to participate, provided such employee has been in the
continuous employ of the Company for a specified period preceding the first day
of the purchase period as determined by the Board. The number of eligible
employees was approximately 2,500 as of June 26, 1999. Employees of an affiliate
of the Company designated by the Board of Directors are eligible to participate
in the ESP Plan provided they meet the same employment requirements. Directors
and officers of the Company or an affiliate who are highly compensated (as
defined in the Code) are not eligible to be granted rights under the ESP Plan.
Notwithstanding the foregoing, no employee shall be eligible for the grant of
any rights under the ESP Plan if, immediately after such grant, that employee
would own stock possessing 5% or more of the total combined voting power or
value of all classes of stock of the Company or of any affiliate (including any
stock which such employee may purchase under all outstanding rights and
options), nor can any employee be granted rights under the ESP Plan which would
permit that employee to buy more than $11,500 worth of stock (determined at the
fair market value of the shares at the time such rights are granted) under all
Employee Stock Participation Plans of the Company and its affiliates as defined
in Section 423 of the Code in any calendar year.
The following summary of certain provisions of the ESP Plan is qualified in
its entirety by reference to the ESP Plan, a copy of which has been filed
electronically with the SEC as an appendix to this Proxy Statement.
The Board has the power from time to time to grant or provide for the grant
of rights to purchase stock of the Company under the ESP Plan to eligible
employees (an "Offering") on a date or dates (the "Offering Date(s)") selected
by the Board. Each Offering will be in such form and will contain such terms and
conditions as the Board deems appropriate, except that each Offering must
include the substance of the required provisions of the ESP Plan, which are
described below. The provisions of separate Offerings need not be identical.
Each Offering can be no longer than 27 months (the "Purchase Period"). Offerings
are expected to be of approximately 12 months' duration.
Participation. An eligible employee becomes a participant in an Offering by
delivering an agreement to the Company, within the time specified in each
Offering, authorizing payroll deductions of up to 20% of his compensation (as
defined in the ESP Plan) during the Purchase Period. All payroll deductions made
for a participant are credited to his account under the ESP Plan and are
deposited with the general funds of the Company. If specifically allowed
pursuant to the terms of the Offering, a participant may make direct payments
into his or her account to the extent such participant has not had the maximum
amount withheld during the Purchase Period. The purchase price of the shares is
accumulated by payroll deductions (or direct payments) over the Purchase Period.
At any time during the Purchase Period a participant may terminate his payroll
deductions, but a participant may increase, reduce or begin such payroll
deductions after the beginning of any Purchase Period only as provided for in
the Offering.
Number of Shares in an Offering. In connection with each Offering, the
Board will specify a maximum number of shares any employee may be granted the
right to purchase and the maximum aggregate number of shares which may be
purchased pursuant to such Offering by all participants. If the aggregate number
of shares purchased upon exercise of rights granted in the Offering would exceed
the maximum aggregate number, the Board will make a pro rata allocation of the
shares available in as nearly a uniform manner as practicable and as it shall
deem to be equitable. Unless the employee's right to purchase shares will be
exercised automatically on a date or dates specified in each Offering (an
"Exercise Date") at the applicable
16
<PAGE> 21
price. It is expected that Exercise Dates will occur on the last day of each
calendar quarter of each calendar year within a Purchase Period.
Purchase of Stock. On each Exercise Date, the balance in each participant's
account will be applied to the purchase of whole shares of stock of the Company.
No fractional shares shall be issued upon the exercise of rights granted under
the ESP Plan. The amount remaining in each participant's account after the
purchase of shares which is less than the amount required to purchase one share
of stock on the final Exercise Date of an Offering shall be held in each such
participant's account for the purchase of shares under the next Offering under
the ESP Plan, unless such participant withdraws from such next Offering or is no
longer eligible to be granted rights under the ESP Plan, in which case such
amount is distributed to such participant after the Exercise Date, without
interest. The amount, if any, of accumulated payroll deductions remaining in any
participant's account after the purchase of shares which is equal to the amount
required to purchase whole shares of stock on the final Exercise Date of an
Offering is distributed in full to the participant after such Exercise Date,
without interest.
Purchase Price. The purchase price per share of stock acquired pursuant to
the ESP Plan will not be less than the lesser of: (i) an amount equal to 85% of
the fair market value of a share of Common Stock on the Offering Date; or (ii)
an amount equal to 85% of the fair market value of a share of Common Stock on
the Exercise Date.
Withdrawal. While each participant in the ESP Plan is required to sign an
agreement authorizing payroll deductions, the participant may withdraw from a
given Offering by terminating his payroll deductions and by delivering to the
Company a notice of withdrawal from the Offering. Such withdrawal may be elected
at any time prior to the end of the applicable Purchase Period. Upon any
withdrawal from an Offering by the employee, the Company will distribute to the
employee his accumulated payroll deductions (reduced for prior purchases)
without interest, and such employee's interest in the Offering will be
automatically terminated. The employee is not entitled to participate again in
that Offering. An employee's withdrawal from an Offering will not have any
effect upon that employee's eligibility to participate in subsequent Offerings
under the ESP Plan, but such employee is required to submit a new participation
agreement.
Termination of Employment. Rights granted pursuant to any Offering under
the ESP Plan shall terminate immediately upon cessation of an employee's
employment for any reason, and the Company shall distribute to such employee all
of his or her accumulated payroll deductions (reduced for prior purchases),
without interest.
Nontransferability. Rights granted under the ESP Plan are not transferable
and can only be exercised by the person to whom such rights are granted.
Federal Income Tax Consequences. The following summarizes only the federal
income tax consequences of participation under the Purchase Plan. State and
local tax consequences may differ.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Section 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
at the time of grant of the option or purchase of shares. Upon disposition of
the shares, the participant will generally be subject to tax and the amount of
the tax will depend upon the participant's holding period. If the shares have
been held by the participant for more than two years after the date of option
grant, the lesser of (i) 15% of the fair market value of the shares on the date
the option was granted or (ii) the difference between the fair market value of
the shares on the date of the disposition of the shares and the purchase price
will be treated as ordinary income, and any further gain will be treated as
long-term capital gain. If the shares are disposed of before the expiration of
these holding periods, the excess of the fair market value of the shares on the
exercise date over the purchase price will be treated as ordinary income, and
any further gain or loss on such disposition will be long-term or short-term
capital gain or loss, depending on the holding period. The Company is not
entitled to a deduction for amounts taxed as ordinary income or capital gain to
a participant except to the extent of ordinary income reported by participants
upon disposition of shares within two years from date of grant or within one tax
year of the date of purchase.
17
<PAGE> 22
ADJUSTMENT PROVISIONS UNDER THE EMPLOYEE STOCK PLANS
If any change is made in the stock subject to the Employee Stock Plans or
subject to any rights granted under the Employee Stock Plans (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Board shall make appropriate adjustments in the classes and maximum number of
shares subject to the Employee Stock Plans, the maximum number of shares which
may be granted to an employee during a calendar year, and the classes, number of
shares and price per share of stock subject to outstanding options or rights.
In the event of: (1) a dissolution or liquidation of the Company; (2) a
merger or consolidation in which the Company is not the surviving corporation;
(3) a reverse merger in which the Company is the surviving corporation but the
shares of the Company's Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise; or (4) any other capital reorganization
in which more than fifty percent (50%) of the shares of the Company entitled to
vote are exchanged, then, pursuant to the Employee Stock Plans, at the sole
discretion of the Board of Directors, (1) any surviving corporation shall assume
any rights outstanding under such Plans or shall substitute similar rights for
those outstanding under such Plans, or (2) such rights will continue in full
force and effect, or (3) with respect to the option plans, the time during which
options may be exercised will be accelerated and terminated if not exercised
prior to such event, and with respect to the ESP Plan, the rights will be
exercised immediately prior to such event.
PROPOSAL 3
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
TO AUTHORIZE 240 MILLION ADDITIONAL SHARES OF COMMON STOCK
The Board of Directors believes the current capital structure does not
provide sufficient flexibility for the potential future needs of the Company.
Therefore, the Board has unanimously approved an amendment to the Company's
Restated Certificate of Incorporation to increase the number of authorized
shares of the Company's Common Stock from 240,000,000 to 480,000,000. The Board
of Directors recommends such amendment to the Company's stockholders for
adoption. If the amendment is adopted, it will become effective upon filing of a
Certificate of Amendment of the Company's Restated Certificate of Incorporation
with the Secretary of State of the State of Delaware. At June 26, 1999,
135,835,376 shares were issued and outstanding, 41,615,446 shares were subject
to outstanding options, 3,736,126 shares were available for future issuance
pursuant to all of the Company's stock option plans and 1,200,000 shares were
issuable upon exercise of a warrant granted to Tektronix Inc. in connection with
the acquisition of the Tektronix integrated circuit operations, leaving a
balance of 57,613,052 authorized shares.
PURPOSE AND EFFECT OF THE AMENDMENT
The principal purpose of the proposed Amendment is to authorize additional
shares of Common Stock which will be available in the event that the Board of
Directors determines that it is necessary or appropriate, among other things, to
effect future stock dividends or stock splits, to raise additional capital
through the sale of securities, to acquire another company or its business or
assets through the issuance of securities.
If the proposed Amendment is adopted, the aggregate number of authorized
shares of Common Stock will be increased from 240,000,000 shares to 480,000,000
shares. If the Proposal were adopted, based on the balance of authorized shares
as of June 26, 1999, 297,613,052 shares would be available for future issuance
by the Board of Directors without any stockholder approval, except in accordance
with the requirements of the Nasdaq Stock Market or the Delaware General
Corporation Law. If the Proposal is not approved, the number of authorized
shares will remain the same and management will have limited flexibility to do
the things described above. Although the Board has no immediate plans,
understandings, agreements or commitments to issue any of the additional shares
of Common Stock the Board in 1997, authorized a two-for-one stock split in
18
<PAGE> 23
the form of a stock dividend and, depending on market and other business
conditions, may in the future give consideration to another stock dividend or
split.
There will be no change in the voting rights, liquidation rights,
preemptive rights or any other stockholder rights as a result of the proposed
Amendment. The additional shares might be issued at such times and under such
circumstances as to have a dilutive effect on earnings per share and on the
equity ownership of the present holders of Common Stock.
POTENTIAL ANTI-TAKEOVER EFFECT
The proposed Amendment could, under certain circumstances, have an
anti-takeover effect, although this is not the intent of the proposal. The
increased number of authorized shares of Common Stock could discourage, or be
used to impede, an attempt to acquire or otherwise change control of the
Company. The private placement of shares of Common Stock into "friendly" hands,
for example, could dilute the voting strength of a party seeking control of the
Company. Furthermore, many companies have issued warrants or other rights to
acquire additional shares of Common Stock to the holders of its Common Stock to
discourage or defeat unsolicited share accumulation programs and acquisition
proposals, which programs or proposals may be viewed by the Board of Directors
as not in the best interest of the Company and its stockholders. Although the
Company has no present intent to use the additional authorized shares of Common
Stock for such purposes, if this Proposal is adopted, more capital stock of the
Company would be available for such purposes than is currently available.
Adoption of the amendment to the Company's Restated Certificate of
Incorporation to authorize additional shares of Common Stock requires the
approval of a majority of the shares outstanding. Unless otherwise marked, all
properly signed and returned proxies will be voted FOR Proposal No. 3. The Board
of Directors recommends a vote FOR this proposal.
PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP as the Company's
independent auditors for the year ending June 24, 2000, and has further directed
that management submit the selection of independent auditors for ratification by
the stockholders at the Annual Meeting. Representatives of Ernst & Young LLP are
expected to be present at the Annual Meeting, will have an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions.
Stockholder ratification of the selection of Ernst & Young LLP as the
Company's independent auditors is not required by the Company's By-laws or
otherwise. However, the Board is submitting the selection of Ernst & Young LLP
to the stockholders for ratification as a matter of good corporate practice. In
the event the stockholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board in its discretion may direct the appointment of different
independent auditors at any time during the year if the Board feels that such a
change would be in the best interests of the Company and its stockholders.
In order to be adopted, this proposal requires the affirmative vote of a
majority of the shares represented in person or by proxy and voting at the
Annual Meeting. The Board of Directors recommends a vote FOR this proposal.
OTHER MATTERS
The Board of Directors does not know of other matters which may come before
the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise to act, in accordance with their judgment on such matters.
19
<PAGE> 24
STOCKHOLDER PROPOSALS -- 2000 ANNUAL MEETING
Pursuant to Rule 14a-8 of the Exchange Act a stockholder proposal must be
received by the Company no later than June 9, 1999 to be considered for
presentation at the 2000 Annual Meeting.
If a stockholder intends to present a proposal at the 2000 Annual Meeting
which is submitted outside the requirements of Rule 14a-8 under the Exchange
Act, and does not notify the Company of such proposal on or before August 23,
2000, then management proxies will be permitted to use their discretionary
voting authority to vote on the proposal if the proposal is raised at the 2000
Annual Meeting of Stockholders.
/s/ JOHN F. GIFFORD
John F. Gifford
President, Chief Executive Officer and
Chairman of the Board
October 8, 1999
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THIS MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND THE
MEETING MAY VOTE THEIR SHARES PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR
PROXIES.
20
<PAGE> 25
SKU-3280-PS-99
<PAGE> 26
DETACH HERE
PROXY
MAXIM INTEGRATED PRODUCTS, INC.
120 San Gabriel Drive
Sunnyvale, CA 94088
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON NOVEMBER 18, 1999.
The undersigned hereby appoints John F. Gifford and Carl W. Jasper, and each of
them, as proxies of the undersigned, with full power of substitution, to vote
all of the shares of stock of Maxim Integrated Products, Inc. which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of
Maxim Integrated Products, Inc. to be held on November 18, 1999 at 11:00 a.m.,
Pacific Standard Time, and at any adjournment or postponement thereof, with all
powers that the undersigned would possess if personally present, upon and in
respect of the following materials and in accordance with the following
instructions, with discretionary authority as described in the proxy statement
as to any and all other matters that may properly come before the meeting or
any adjournment or postponement thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR AND FOR
PROPOSALS 2, 3 AND 4.
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, WILL BE
VOTED FOR THE NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2, 3 AND 4.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SEE REVERSE
SIDE SIDE
<PAGE> 27
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
ALL MATTERS ARE PROPOSED BY MAXIM INTEGRATED PRODUCTS, INC. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES AND FOR PROPOSALS 2, 3 AND 4.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER,
IF NO SUCH DIRECTIONS ARE INDICATED, THE PROXIES WILL HAVE AUTHORITY TO VOTE FOR
THE ELECTION OF ALL DIRECTIONS, AND FOR ITEMS 2, 3 AND 4.
1. Election of Directors
NOMINEES: James R. Bergman, John F. Gifford,
B. Kipling Hagoplan, A.R. Frank Wazzan
FOR WITHHELD
[ ] [ ]
[ ]
----------------------------------------------
For, except vote withheld from the above nominee(s):
2. To ratify and approve amendments to increase the number of shares
available for issuance under the Company's 1996 Stock Incentive Plan,
as amended and 1987 Employee Stock Participation Plan, as amended.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of the
Company's capital stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To ratify and approve the retention of Ernst & Young LLP as the
Company's independent auditors for fiscal 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED REPLY ENVELOPE.
Please mark your choices in blue or black ink.
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. 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.
<TABLE>
<S> <C>. <C> <C>
Signature: Date: Signature: Date:
------------------------ -------- ------------------------ --------
</TABLE>
<PAGE> 28
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Call Toll-Free on a Touch-Tone Phone
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Follow these four easy steps.
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2. Call the toll-free number
1-877-PRX-VOTE (1-877-779-8683). For shareholders residing outside the
United States call collect on a touch tone phone
1-201-638-8073.
3. Enter your 14-digit Voter Control Number located on your Proxy Card
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4. Follow the recorded instructions.
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2. Go to the Website
http\www.eproxyvote.com/mxlm
3. Enter your 14-digit Voter Control Number located on your Proxy Card above
your name.
4. Follow the instructions provided.
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