<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>
[ ] 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 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
MAXIM LOGO
Dear Maxim Stockholder:
You are invited to attend the Annual Meeting of Stockholders of Maxim to be
held at 11:00 a.m. on Thursday, November 16, 2000 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 several
years, I want to emphasize the importance of Proposal 2 -- our stock option
proposal -- to our past and future success.
Maxim's lifeblood has been and, I believe, will continue to be the flow of
new products to our customers. Inventing and producing the right new products at
the right time is very challenging. It requires unique skills, intellect,
dedication, and hard work. It also is the key to achieving our current goal of
increasing our annual revenues to $3.5 billion by fiscal 2005.
To carry out this essential task we must hire, motivate, and retain an
ever-increasing number of the best engineers and those who support those
engineers and turn their inventiveness into revenue and profit. Our engineering
team consists of design, applications, test, process, and packaging engineers
and the senior engineers who manage them. Collectively they create our
manufacturing processes, and they conceive, design, lay out, test, and package
the innovative new products that our customers need and want.
Why this focus on expanding our product base is so important may not be
intuitive or obvious. After all, even the greatest companies in the digital
integrated circuit business do not need to produce hundreds of novel new
products each year. But we do. Our net revenues in fiscal 2000 of $865 million
came from approximately 1,800 products or roughly $500 thousand per product. So
in our business, even if we can increase our revenue per product, we still will
probably need to double our current group of products to grow to our target $3.5
billion level. Because the development of analog circuits is so challenging and
engineering intensive, we cannot count on achieving our product introduction
goals only by increasing productivity. We really have no alternative. We must
continue to recruit more engineers in many disciplines.
In fiscal 2000 we had considerable success in introducing new products and
in recruiting. We introduced 383 new products in the 2000 product introduction
year, more than 1 new product for each day in the year and up 35% from fiscal
1999. Many of these products were developed using industry-leading analog
manufacturing processes created by our world-class technologists.
In addition to bringing these new products to the market, those same people
were competing fiercely with other companies in our industry to recruit new
engineers in the toughest, tightest job market in memory. Thanks to their
efforts and Maxim's attractiveness as a company where excellent professionals
can achieve their potential, we were successful in recruiting throughout the
company in fiscal 2000, including top engineers.
For the foreseeable future we will need to continue to invest time and
human resources in recruiting and retaining engineers and the other key
personnel that support our engineering-driven enterprise. A major part of that
investment has been, and must continue to be, the granting of stock options.
We attribute a major part of our success in recruiting to the availability
and attractiveness of our option program. We also attribute much of our long and
shorter term success as a company to the fact that our stock option program has
aligned the interests of Maxim employees with those of Maxim stockholders. We
are strong believers in the principle that our employee optionees have the right
motivations: excel at their professions, grow the company's sales and profits,
and increase the value of our company. Optionees only make gains if our
stockholders make gains.
Maxim reported record fiscal 2000 revenues and net profits. Maxim's stock
price rose from $31.31 at the end of fiscal 1999 to $69.56 at the end of fiscal
2000. For the second consecutive year our stock price increased
<PAGE> 3
Maxim reported record fiscal 2000 revenues and net profits. Maxim's stock price
rose from $31.31 at the end of fiscal 1999 to $69.56 at the end of fiscal 2000.
For the second consecutive year our stock price increased by over 100%. With our
stock above even the 2000 fiscal year-end level as I write this letter, our
compound annual rate of return to our stockholders since our IPO in 1988 has
risen to more than 50%.
Few companies have performed for their stockholders as Maxim has over the
past 16 years. To sustain and exceed this level of performance, we must attract
and retain critical employees.
Our Board of Directors and I strongly encourage you to vote to ratify our
option programs.
Maxim's employees and I deeply appreciate your past support of the mutually
beneficial partnership between Maxim stockholders and employees.
Yours sincerely,
LOGO
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 16, 2000
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 16, 2000 at 11:00 a.m., Pacific Standard
Time, to consider and vote upon the following proposals:
1. To elect five (5) 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 30, 2001.
5. To transact such other business as may properly come before the Annual
Meeting and 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 25,
2000 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 10, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO
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 16, 2000
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 16, 2000 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 10, 2000. 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 each 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 25,
2000 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 285,245,278 shares of Common Stock. The presence of a majority, or
142,622,640, 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 (five). 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.
<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 $11,000.
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 24, 2000 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 director
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)........................ 32,360,205 11.44%
Putnam Investments, Inc.(3)................... 28,417,834 10.05%
T. Rowe Price Associates, Inc.(4)............. 16,848,800 5.96%
TCW Group, Inc.(5)............................ 14,507,693 5.13%
John F. Gifford(6)............................ 2,151,108 *
Richard C. Hood(7)............................ 1,326,770 *
Tunc Doluca(8)................................ 988,306 *
Ziya G. Boyacigiller(9)....................... 821,800 *
James R. Bergman(10).......................... 170,000 *
A.R. Frank Wazzan(11)......................... 168,800 *
B. Kipling Hagopian(12)....................... 98,640 *
Frederick G. Beck(13)......................... 40,000 *
Eric Karros(14)............................... 2,000 *
All executive officers and directors as a
group (15 persons)(15)...................... 8,210,394 2.85%
</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 282,795,178 shares outstanding
on June 24, 2000, 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
sole dispositive power and sole 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 15, 2000.
2
<PAGE> 7
(3) Certain Putnam Investments, Inc. investment managers (together with their
parent corporation, Putnam Investments, Inc. and its parent corporation,
Marsh & McLennan Companies, Inc.) are 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 February 17, 2000.
(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 sole dispositive power
over all the shares shown, and sole voting power over 2,609,200 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 7, 2000.
(5) TCW Group, Inc. holds sole dispositive power and sole voting power over all
shares shown. The address of TCW Group, Inc. is 865 South Figueroa Street,
Los Angeles, CA 90017. The table is based upon information supplied in a
Schedule 13G filed February 14, 2000.
(6) Includes 635,924 shares subject to options exercisable within 60 days of
June 24, 2000. Does not include shares held in trust for the benefit of Mr.
Gifford's children.
(7) Includes 630,000 shares subject to options exercisable within 60 days of
June 24, 2000.
(8) Includes 575,695 shares subject to options exercisable within 60 days of
June 24, 2000.
(9) Includes 421,800 shares subject to options exercisable within 60 days of
June 24, 2000.
(10) Includes 30,000 shares subject to options exercisable within 60 days of
June 24, 2000.
(11) Includes 20,000 shares subject to options exercisable within 60 days of
June 24, 2000.
(12) Includes 62,500 shares subject to options exercisable within 60 days of
June 24, 2000.
(13) Represents shares subject to options exercisable within 60 days of June 24,
2000.
(14) Represents shares subject to options exercisable within 60 days of June 24,
2000.
(15) Includes 5,162,537 shares subject to options exercisable within 60 days of
June 24, 2000. 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 five 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 five 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 except
Mr. Karros were elected directors by a vote of the stockholders at the last
Annual Meeting of Stockholders which was held on November 18, 1999. Mr. Karros
was appointed a director by the Board of Directors on January 31, 2000. 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 (five).
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 10, 2000.
<TABLE>
<CAPTION>
NAME AGE DIRECTOR SINCE
---- --- --------------
<S> <C> <C>
James R. Bergman........................................... 58 1988
John F. Gifford............................................ 59 1983
B. Kipling Hagopian........................................ 58 1997
A.R. Frank Wazzan.......................................... 65 1990
Eric P. Karros............................................. 32 2000
</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 five Brentwood funds started since then. Mr. Hagopian is
also Chairman and President of Segue Productions, a feature film production
company, and a Managing Director of Apple Oaks Partners LLC, a private
investment company which manages his own capital and the capital of one other
individual.
Mr. Karros has been a professional baseball player with the Los Angeles
Dodgers since 1988. He is a graduate of the University of California, Los
Angeles, with a degree in Economics.
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 24, 2000, the Board of Directors held
five meetings. The Company has a standing Audit Committee, which met once during
the fiscal year, a standing Compensation Committee, which met four 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 24, 2000, 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. In June 2000 the Board of Directors of Maxim adopted a new charter for
the Audit Committee that is intended to comply with the recently adopted
requirements of The Nasdaq National Market and the Securities and Exchange
Commission. The new charter specifies the scope of the Audit Committee's
responsibilities and the means by which it carries out those responsibilities,
the Audit Committee's responsibilities in overseeing the independence of the
outside auditor, the outside auditor's ultimate accountability to the Board of
Directors and the Audit Committee as representatives of the stockholders of the
Company, and the authority and responsibility of the Audit Committee with
respect to the selection, evaluation and, where appropriate, replacement of the
outside auditor.
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, service providers and other eligible grantees under the
4
<PAGE> 9
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.
Nonemployee directors of the Company receive a $4,000 annual retainer and
fees of $1,000 per meeting attended.
Directors participate in the 1996 Stock Incentive Plan (the "1996 Plan")
which authorizes the granting of non-qualified stock options with respect to an
aggregate of 68,000,000 shares of the Company's Common Stock (subject to
adjustments provided therein). Each director receives an initial non-qualified
stock option grant upon his election to the Board that vests over a period of
years. In subsequent years, he receives grants whose vesting commences when
prior grants have become fully vested. In fiscal 2000, the directors who were
originally elected prior to 2000 received grants that brought them into parity
with each other (Mr. Bergman receiving a grant of 20,000 shares vesting in
fiscal 2003 and 2004 and Mr. Hagopian and Dr. Wazzan each receiving grants of
32,000 shares vesting over fiscal years 2002 through 2004). Mr. Karros received
an initial grant of 32,000 shares vesting over fiscal years 2000 though 2004.
5
<PAGE> 10
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation for the Company's Chief Executive Officer at June 24, 2000
and the four most highly compensated executive officers other than the Chief
Executive Officer who were serving as executive officers at June 24, 2000 for
all services rendered in all capacities to the Company and its subsidiaries
during the fiscal years ended June 24, 2000, June 26, 1999 and June 27, 1998 is
set forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
----------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- ---------- ------------
<S> <C> <C> <C> <C>
John F. Gifford................................ 2000 $300,000 $ * 600,000
President, Chief Executive Officer 1999 264,023 1,899,955 1,040,000
and Chairman of the Board 1998 264,023 1,722,609 1,400,000
Frederick G. Beck.............................. 2000 200,000 * 60,000
Vice President 1999 170,000 404,963 78,000
1998 170,000 306,962 180,000
Ziya G. Boyacigiller........................... 2000 200,000 * 60,000
Vice President 1999 170,000 395,157 104,000
1998 170,000 426,299 240,000
Tunc Doluca.................................... 2000 200,000 * 70,000
Vice President 1999 170,000 454,927 130,000
1998 170,000 339,485 300,000
Richard C. Hood................................ 2000 200,000 * 70,000
Vice President 1999 170,000 430,407 104,000
1998 170,000 292,540 238,000
</TABLE>
---------------
* Pursuant to the Company's Bonus Plan, approved by the Company's stockholders
in 1997, $12,755,430 is available for executive officer performance bonuses
relating to fiscal 2000. 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 $6,377,715. The annual
salary reviews for the Company's officers have not yet occurred and
performance bonuses have not yet been determined.
6
<PAGE> 11
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The Board of Directors and the committees to which it delegates authority
currently have authority to grant stock options to employees and others under
the 1996 Plan. The following tables set forth certain information regarding
stock options granted to, exercised by and owned by the executive officers named
in the foregoing Summary Compensation Table during fiscal 2000.
OPTION GRANTS IN FISCAL YEAR 2000
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#)(3) FISCAL YEAR ($/SH) DATE(2) 5%($) 10%($)
---- ------------- ------------- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John F. Gifford........... 600,000 5.13% $57.8125 03/15/10 21,814,782 55,282,942
Frederick G. Beck......... 60,000 0.51% 57.8125 03/15/10 2,181,478 5,528,294
Ziya G. Boyacigiller...... 60,000 0.51% 57.8125 03/15/10 2,181,478 5,528,294
Tunc Doluca............... 70,000 0.60% 57.8125 03/15/10 2,545,058 6,608,984
Richard C. Hood........... 70,000 0.60% 57.8125 03/15/10 2,545,058 6,608,984
</TABLE>
---------------
(1) The dollar amounts under these columns are the result of calculations at the
assumed 5% and 10% annual rates of stock price appreciation prescribed by
the SEC and are not intended to forecast possible future appreciation, if
any, of the Company's stock price. No gain to the optionees is possible
without an increase in the price of the Company's stock, which will benefit
all stockholders.
(2) The options were granted for a term of ten years, but are subject to earlier
termination under certain circumstances relating to termination of
employment or a change of control of the Company.
(3) The options were granted on March 15, 2000 and will become exercisable on a
quarterly basis during the year ending July 1, 2005.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2000
AND JUNE 24, 2000 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT OPTIONS AT
ACQUIRED JUNE 24, 2000(#) JUNE 24, 2000($)(1)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John F. Gifford........ 1,412,788 $59,212,395 435,924 4,040,000 $27,068,157 $191,611,250
Frederick G. Beck...... 216,000 10,047,939 -- 498,000 -- 25,003,813
Ziya G. Boyacigiller... 540,000 26,183,126 381,000 604,000 25,271,456 30,953,000
Tunc Doluca............ 272,313 12,108,322 535,695 660,000 35,255,536 32,895,625
Richard C. Hood........ 180,400 7,377,282 598,000 508,000 39,345,843 24,567,437
</TABLE>
---------------
(1) Based on a price per share of $69.5625, which was the price of a share of
Common Stock on the Nasdaq National Market at the close of business on June
24, 2000.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Messrs.
Beck, Boyacigiller, Doluca, and Hood. 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.
7
<PAGE> 12
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
continue to provide certain services to the Company, the Company will make
health insurance coverage available to the executive officer and his family. The
terms of such services, unless otherwise agreed, will provide for part-time
services (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 have met his services obligations 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
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 and Mr. Gifford agrees to remain available to the Company 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 continues to serve the Company, he shall not
be required to devote more than two (2) days a week to such activities. During
the period of Mr. Gifford's retention as a service provider, 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
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
service 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
8
<PAGE> 13
Chief Executive Officer 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 continue to provide certain services to the
Company, the Company will provide to Mr. Gifford 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 2000). Interest is credited at least quarterly. Deferred payments,
including interest, are payable beginning (i) upon his termination as an
employee or service provider 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 24, 2000, Mr. Gifford's
deferred account balance, including interest thereon, totaled $7,995,370.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
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
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.
The Compensation Committee of the Board of Directors reviews and approves
cash and equity compensation for the Company's chief executive officer and other
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 officer's salary for the ensuing year. The base salary component of
compensation is intended to reward an 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 Chief Executive
Officer Compensation), levels of responsibility and prior experience. The
Compensation Committee also reviews published information regarding the
compensation of 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 officers. Under the Bonus Plan, a bonus pool will be
created up to a maximum of 3% of the 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 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 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
9
<PAGE> 14
set for that fiscal year, and to determine the amount of each officer's bonus
for such year. The Compensation Committee reserves the right to pay any officer
less than the maximum bonus determined under the objective performance criteria
based upon the Compensation Committee's determination of that officer's
individual performance during the year and on all other relevant factors,
including other compensation received during the year such as stock option
grants. The actual cash bonus for each individual officer, aside from the Chief
Executive Officer (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 officer involved. Officer bonuses for fiscal 2000 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 officers. The
Company has attempted for a number of years to provide for each 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.
Chief Executive Officer Compensation. Salary -- Mr. Gifford's salary for
fiscal 2000 was determined based on the same criteria as the other officers. Mr.
Gifford received $300,000 in salary in fiscal 2000. Bonus -- 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 2000 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
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 24, 2000, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten
10
<PAGE> 15
percent beneficial owners were complied with, except that two transactions were
reported late on a Form 4 by John F. Gifford, and one transaction was reported
late on Form 4 by each of Vijay Ullal, Charles Rigg and A.R. Wazzan.
CERTAIN TRANSACTIONS
In April 1998, the Company made a loan to Carl W. 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 24, 2000 was
$113,118.
The Company employs in various positions Tracy Jones and Kevin Lynch, the
daughter and son-in-law, respectively, of the Company's Chief Executive Officer.
In fiscal 2000, Mrs. Jones received $55,776 of cash compensation and exercised
stock options held for nearly 10 years totalling 13,000 shares at an exercise
price of $0.625 per share. In fiscal 2000, Mr. Lynch received $122,205 of cash
compensation and exercised stock options held for an average of 5 years
totalling 38,000 shares at exercise prices of $2.42 and $3.92 per share. Also,
during the fiscal year Mr. Lynch was granted options to purchase 21,000 shares
of the Company's Common Stock at exercise prices between $31.54 and $58.00 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.
11
<PAGE> 16
PERFORMANCE GRAPH(1)
The following chart shows the value of an investment of $100 on June 30,
1995 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 the
end of each fiscal 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-95 100.00 100.00 100.00
Jun-96 107.11 105.72 128.39
Jun-97 223.04 173.69 156.15
Jun-98 243.63 175.34 202.72
Jun-99 491.18 283.47 280.62
Jun-00 1091.18 767.63 422.96
</TABLE>
* $100 Invested on June 30, 1995 in Stock or Index -- Including Reinvestment of
Dividends. Year Ending June 24.
---------------
(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 or the Exchange Act whether made before or after
the date hereof and irrespective of any general incorporation language in
any such filing.
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 12,000,000 shares
(the "Increase").
12
<PAGE> 17
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 and 1999) is as follows: on adoption, 14,000,000
shares increased to 29,000,000 shares in 1997, to 44,000,000 shares in 1998 and
to 56,000,000 shares in 1999. The current proposal is to increase the pool for
the Employee Stock Plans by 12,000,000 shares to a total of 68,000,000 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
182,240,000 shares at the time of adoption of the superseding 1996 Plan.
As of June 24, 2000, 76,009,474 stock options remain outstanding from all
of the Company's stock option plans, of which 29,132,769 options were vested and
exercisable while the remaining 46,876,705 options vest over the next ten years
as follows:
<TABLE>
<CAPTION>
YEAR ENDING NUMBER OF OPTIONS
JUNE 30, TO VEST
---------------------------- -----------------
<S> <C>
2001..................... 11,302,832
2002..................... 10,617,245
2003..................... 9,248,081
2004..................... 8,418,317
2005..................... 5,074,821
2006..................... 1,310,824
2007..................... 715,737
2008..................... 168,398
2009..................... 15,650
2010..................... 4,800
</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 2003, 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.
As of June 24, 2000, there were a total of 76,009,474 shares subject to
outstanding options under the option plans of which 48,057,782 were subject to
options outstanding under the 1996 Plan, and a maximum of 872,703 shares subject
to outstanding rights under the ESP Plan.
As of June 24, 2000, options outstanding under the option plans had
exercise prices ranging from $0.45 to $73.69 and expiration dates ranging from
August 9, 2000 to May 31, 2010. Options outstanding under the 1996 Plan had
exercise prices ranging from $0.45 to $73.69 and expiration dates ranging from
December 23, 2001 to May 31, 2010.
13
<PAGE> 18
As of June 24, 2000, rights outstanding under the ESP Plan had an exercise
price of $41.70 (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, 2000.
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 1,927 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 14,000,000
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
54,000,000 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 24, 2000, the 9,814,244 shares available for grant under the 1996 Plan
equaled approximately 3% of the Company's outstanding shares. The closing price
of the Company's Common Stock on the Nasdaq National Market on September 25,
2000 was $ .
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 "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").
14
<PAGE> 19
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 12,000,000 shares.
Eligibility. Selected employees, directors, service providers, 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. 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
15
<PAGE> 20
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 maximum term of any option will be ten years from the date it is
granted, except that the maximum term for options granted to non-employee
directors shall be five years. Options are generally 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 2000, exercises of employee
stock options resulted in approximately $135.7 million of cash savings as a
result of tax deductions for the Company and in $79.3 million of cash to the
Company from stock option exercises, for total cash generated of approximately
$215 million, a significant contribution to the strength of the Company's
balance sheet and, given the Company's use of 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 lesser 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.
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.
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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 2,737 as of June 24, 2000. 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 that 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 previously been
filed with the SEC.
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 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
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<PAGE> 22
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 ESP Plan. State and local tax
consequences may differ.
The ESP 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.
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.
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<PAGE> 23
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 480 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 480,000,000 to 960,000,000. 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 24, 2000,
282,795,178 shares were issued and outstanding, 76,009,474 shares were subject
to outstanding options, 9,814,244 shares were available for future issuance
pursuant to all of the Company's stock option plans, leaving a balance of
111,381,104 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, or 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 480,000,000 shares to 960,000,000
shares. If the proposal were adopted, based on the balance of authorized shares
as of June 24, 2000, 591,381,104 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 authorized a two-for-one stock split in the form of a
stock dividend in both 1997 and 1999 and, depending on market and other business
conditions, may in the future consider 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
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<PAGE> 24
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 30, 2001, 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.
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<PAGE> 25
STOCKHOLDER PROPOSALS -- 2001 ANNUAL MEETING
Pursuant to Rule 14a-8 of the Exchange Act a stockholder proposal must be
received by the Company no later than June 12, 2001 to be considered for
presentation at the 2001 Annual Meeting.
If a stockholder intends to present a proposal at the 2001 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 26,
2001, then management proxies will be permitted to use their discretionary
voting authority to vote on the proposal if the proposal is raised at the 2001
Annual Meeting of Stockholders.
/s/ JOHN F. GIFFORD
John F. Gifford
President, Chief Executive Officer and
Chairman of the Board
October 10, 2000
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.
21
<PAGE> 26
[FORM OF FRONT OF PROXY CARD]
PROXY
MAXIM INTEGRATED PRODUCTS, INC.
120 San Gabriel Drive
Sunnyvale, CA 94086
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING ON NOVEMBER 16, 2000.
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 16, 2000
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
<PAGE> 27
[FORM OF BACK OF PROXY CARD]
Please mark your choice like this | in blue or black ink.
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 DIRECTORS, AND FOR ITEMS 2, 3
AND 4.
-----------------------------------------------------------
ALL MATTERS ARE PROPOSED BY MAXIM INTEGRATED PRODUCTS, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES
AND FOR PROPOSALS 2 AND 3.
-----------------------------------------------------------
1. Election of Directors
Nominees: JAMES R. BERGMAN, JOHN F. GIFFORD
B. KIPLING HAGOPIAN, A.R. FRANK WAZZAN, ERIC P. KARROS
[ ] FOR [ ] WITHHELD
FOR, except vote withheld from the following 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 [ ] WITHHELD [ ] 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 [ ] WITHHELD [ ] ABSTAIN
4. To ratify and approve the retention of Ernst & Young LLP as the
Company's independent auditors for fiscal 2001.
[ ] FOR [ ] WITHHELD [ ] ABSTAIN
MARK HERE FOR [ ]
ADDRESS CHANGE
AND NOTE AT RIGHT
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.
Signature __________________________________ Date ________________________
Signature __________________________________ Date ________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.
<PAGE> 28
VOTE BY TELEPHONE
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps.
1. Read the accompanying Proxy Statement/Prospectus and Proxy Card.
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 above
your name.
4. Follow the recorded instructions.
YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime!
VOTE BY INTERNET
It's fast, convenient, and your vote is immediately confirmed and posted.
Follow these four easy steps.
1. Read the accompanying Proxy Statement/Prospectus and Proxy Card
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.
YOUR VOTE IS IMPORTANT!
Go to http://www.eproxyvote.com/mxlm anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
