<PAGE>
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. ________)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ]Preliminary Proxy Statement
[X]Definitive Proxy Statement
[ ]Definitive Additional Materials
[ ]Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SILICONIX INCORPORATED
(Name of registrant as Specified in its Charter)
SILICONIX INCORPORATED
(Name of Person[s] Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X]$125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ]$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1)Title of each class of securities to which transaction applies:
______________________________________________________________________
(2)Aggregate number of securities to which transaction applies:
______________________________________________________________________
(3)Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
______________________________________________________________________
(4)Proposed maximum aggregate value of transaction:
______________________________________________________________________
Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ]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>
Siliconix
A Member of the TEMIC Group
2201 Laurelwood Road
Santa Clara, California 95054
April 25, 1995
Dear Shareholder:
The 1995 Annual Meeting of Shareholders of Siliconix incorporated will be held
in the main auditorium at the Company's executive offices, 2201 Laurelwood Road,
Santa Clara, California, on Friday, June 2, 1995 at 4:00 p.m. California time.
The Annual Report for the year 1994 is enclosed. At the shareholders' meeting,
we will discuss in more detail the subjects covered in the Annual Report as well
as other matters of interest to shareholders.
The enclosed Proxy Statement explains the items of business to come formally
before the meeting. As a shareholder, it is in your best interest to express
your views regarding these matters by signing and returning your proxy. This
will ensure the voting of your shares if you do not attend the meeting.
Whether or not you plan to attend the meeting, please sign the proxy card and
return it promptly in the enclosed envelope. It requires no stamp if mailed in
the United States.
Sincerely yours,
RICHARD J. KULLE
President and Chief
Executive Officer
<PAGE>
SILICONIX INCORPORATED
2201 Laurelwood Road
Santa Clara, California 95054
Notice of Annual Meeting of Shareholders
June 2, 1995
TO THE SHAREHOLDERS OF SILICONIX INCORPORATED:
Notice is hereby given that the Annual Meeting of Shareholders of Siliconix
incorporated will be held in the main auditorium at the Company's executive
offices, 2201 Laurelwood Road, Santa Clara, California, on Friday, June 2, 1995
at 4:00 p.m. California time, for the following purposes:
1.To elect directors for the ensuing year.
2.To ratify the appointment of KPMG Peat Marwick LLP as the Company's auditors
for the fiscal year ending December 31, 1995.
3.To consider and act upon a shareholder proposal concerning the establishment
of a senior management stock option plan, as described in the Proxy Statement,
if such proposal is properly brought before the meeting.
4.To transact such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors intends to nominate as directors those individuals listed
in the attached Proxy Statement under the heading "Nominees." April 14, 1995
has been fixed as the record date for the determination of shareholders entitled
to vote at the Annual Meeting and to receive notice thereof.
BY ORDER OF THE BOARD OF DIRECTORS
DAVID M. ACHTERKIRCHEN
Secretary
Santa Clara, California
April 25, 1995
Please date, sign and return the enclosed proxy in the enclosed envelope. If
you plan to attend in person, please indicate this by checking the space
provided on the proxy.
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS OF
SILICONIX INCORPORATED
June 2, 1995
SOLICITATION AND VOTING RIGHTS
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of your proxy for use at the Annual Meeting of Shareholders
on Friday, June 2, 1995 at 4:00 p.m., and at all adjournments thereof, for the
purposes set forth in the attached Notice of Annual Meeting of Shareholders.
This Proxy Statement is first being distributed to shareholders on approximately
April 25, 1995. The Company will pay all expenses incurred in connection with
this solicitation, including postage, printing, handling and the actual expenses
incurred by brokerage houses, custodians, nominees and fiduciaries in forwarding
proxy material to beneficial owners.
The Company, a corporation existing and organized under the laws of the State of
Delaware, has one class of equity securities issued and outstanding, consisting
of 9,959,680 shares of common stock, $0.01 par value (the "Common Stock"). All
of the shares of Common Stock are voting shares, but only those shareholders of
record as of the record date, April 14, 1995, will be entitled to notice of and
to vote at the meeting and at any and all postponements or adjournments of the
meeting. The presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the meeting will
constitute a quorum for the purpose of transacting business at the meeting.
Each shareholder is entitled to one vote for each share of Common Stock held by
such shareholder of record on each matter which may come before the meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. In matters
other than the election of directors, abstentions are counted as votes against
in tabulations of the votes cast on proposals to the shareholders, votes
withheld have no legal effect and broker non-votes are not counted for purposes
of determining whether a proposal has been approved.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is exercised. Proxies may be revoked by giving
written notice to the Secretary of the Company and the issuance of a subsequent
proxy will revoke any prior proxy even though written notice of revocation is
not given.
The "Company" and "Siliconix incorporated" refer to Siliconix incorporated, a
Delaware corporation, or the predecessor California corporation of the same
name.
PROPOSAL 1--ELECTION OF DIRECTORS
At the Annual Meeting of Shareholders to be held on Friday, June 2, 1995, the
Company will present a slate of six nominees for election to the Board of
Directors. Except as hereinafter stated, management will vote the shares
represented by the enclosed proxy for the six nominees to the Board of Directors
named below, unless indication to the contrary is marked thereon. In the event
of the death, disqualification, or refusal or inability of any of such nominees
to serve, it is the intention of the persons named in the enclosed proxy to vote
for the election of such other person or persons as the persons named in the
enclosed proxy determine in their discretion. The Board of Directors has no
reason to believe that such nominees will be unable or will decline to serve if
elected.
<PAGE>
Nominees
The following sets forth the name, age and principal occupation of each nominee,
his position with the Company and business experience during the past five
years, and the year each was first elected a director of the Company.
Nominee Age Business Experience During Past Five Years
- ------- --- ------------------------------------------
Hanspeter Eberhardt 58 Senior Vice President of the Semiconductor Division of
TEMIC TELEFUNKEN microelectronic GmbH (since 1993);
Division Director of TEMIC TELEFUNKEN microelectronic
GmbH (1992-1993); Director of the Semiconductor
Division (Microelectronics) of TELEFUNKEN electronic
GmbH (1989-1992); director of Siliconix since 1991.
Richard J. Kulle 50 President and Chief Executive Officer of Siliconix
incorporated (since 1990) and Vice President,
Operations of the Semiconductor Division of TEMIC
TELEFUNKEN microelectronic GmbH (since 1993); director
of Siliconix since 1990.
Frank Maier 57 Member of the Board of Management of AEG
Aktiengesellschaft (since 1989) and President and Chief
Executive Officer of TEMIC TELEFUNKEN microelectronic
GmbH (since 1992); President and Chief Executive
Officer of TELEFUNKEN electronic GmbH (1984-1992);
director of Siliconix since 1988.
Gustav Muhlschlegel 54 Executive Vice President, Finance and Controlling, of
TEMIC TELEFUNKEN microelectronic GmbH (since 1992);
Vice President, Mergers and Acquisitions, of Daimler-
Benz AG (1990-1992).
Robert L. Wehrli 73 Business and technical consultant (since 1980);
director of PECO Controls and Chronometry, Ltd.;
director of Siliconix since 1981.
Peter Westrick 61 President and Chief Executive Officer of AEG
Corporation (since 1992); President and Chief Executive
Officer of AEG France S.A. (1979-1992); director of
Siliconix since 1993.
Directors' Meetings and Committees
The Board of Directors met four times in person in 1994. Each director attended
at least 75% of the meetings of the Board of Directors and of the committees, if
any, of which he was a member.
The Audit Committee of the Board of Directors, consisting of Messrs. Kulle,
Maier and Wehrli, met once in 1994. The principal functions of that committee
were to select a firm of independent certified public accountants to perform an
audit of the Company's financial statements; to review, in consultation with the
independent auditors, the scope and results of and the compensation for such
audit, together with any non-audit services performed by them; to review the
Company's accounting policies and any changes thereof; and to consult with the
independent auditors and Company management, separately as appropriate, with
regard to the adequacy of the Company's internal controls.
The Compensation Committee of the Board of Directors, consisting of Messrs.
Kulle, Maier and Wehrli, met four times in person in 1994 and held one
additional meeting by telephone. Its principal functions were to make
recommendations to the Board of Directors as to remuneration arrangements,
including bonuses, for officers and other employees. See also "Report of
Compensation Committee" below.
The Board of Directors has no standing Nominating Committee.
The Board of Directors recommends a vote FOR all of the Nominees.
<PAGE>
SECURITY OWNERSHIP
The following table shows the amount of Common Stock of the Company beneficially
owned, as of April 14, 1995, by the only person who to the knowledge of the
Company is the beneficial owner of more than 5% of the outstanding Common Stock
of the Company. Such person has sole investment and voting power with respect
to the shares shown.
<TABLE>
<CAPTION>
Amount
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
------------------- ------------- --------
<S> <C> <C>
AEG Capital Corporation 8,010,000 80.4%
Mt. Airy Corners III
180 Mt. Airy Rd.
Basking Ridge, NJ 07920
</TABLE>
The following table shows the number and percentage of shares of Common Stock
beneficially owned, as of April 14, 1995, by (i) each current director and
nominee for director, (ii) each executive officer named in the compensation
table below under "Compensation of Officers and Directors" and (iii) all
directors and executive officers as a group. Each person has sole investment
and voting power with respect to the shares shown.
<TABLE>
<CAPTION>
Amount
Name of Bene- Beneficially Percent
ficial Owner Owned of Class
------------- ------------ --------
<S> <C> <C>
Hanspeter Eberhardt 0 0
Richard J. Kulle 22,333 *
Frank Maier 1,479 *
Gustav Muhlschlegel 0 *
Peter W. Weber 16,814 *
Robert L. Wehrli 4,068 *
Peter Westrick 0 0
King Owyang 2,083 *
Jurgen Biehn 0 0
G. Thomas Simmons 0 0
All directors and executive 46,777 *
officers as a group (nine persons)
<FN>
*Less than 1%.
</TABLE>
<PAGE>
COMPENSATION OF OFFICERS AND DIRECTORS
The following table shows, as to the Chief Executive Officer and each of the
four other most highly compensated executive officers whose salary plus bonus
exceeded $100,000, information concerning compensation paid for services to the
Company in all capacities during the fiscal year ended December 31, 1994, as
well as the total compensation paid to each such individual for the Company's
previous two fiscal years (if such person was the Chief Executive Officer or an
executive officer, as the case may be, during any part of such fiscal year).
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Principal Position
- --------------------------- Other All Other
Annual Compensation
Year Salary Bonus Compensation (1)
---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Richard J. Kulle 1994 $395,308 $153,575 (2) $ 26,229
President and Chief 1993 $324,837 $277,295 (2) $ 21,818
Executive Officer 1992 $284,913 $123,086 (2) $ 11,352
King Owyang 1994 $270,576 $ 92,618 (2) $ 18,713
Executive Vice President 1993 $260,034 $113,000 (2) $ 16,365
1992 $210,377 $122,116 (2) $ 9,381
Jurgen Biehn 1994 $231,900 $ 72,083 (2) $ 0
Vice President and 1993 $187,914 $148,981 (2) $ 0
Chief Financial Officer 1992 $175,011 $147,466 (2) $ 0
G. Thomas Simmons 1994(3) $ 58,803 $ 15,578 (2) $ 2,836
Vice President,
Marketing
Robert C. Frostholm 1994(4) $104,081 $ 72,000 (2) $ 0
Vice President, 1993 $195,433 $ 77,787 $ 51,153(5) $ 12,188
Marketing 1992(4) $ 79,901 $ 26,704 $ 41,945(6) $ 2,256
_____________________
<FN>
(1)The Company does not have any stock option or stock purchase plans. No
compensation was paid in 1992-1994 pursuant to Long Term Incentive Plans as that
term is defined in the regulations. All Other Compensation includes Company
contributions to the individuals' respective Tax Deferred Savings Plan and
Profit Sharing Plan accounts. In 1994 these amounts were--Kulle: TDSP, $8,814;
PSP, $17,415; Owyang: TDSP, $7,463; PSP, $11,250; and Simmons: TDSP, $1,558;
PSP, $1,279.
(2)Other Annual Compensation includes amounts paid for car allowances and
reimbursement of certain medical expenses and income taxes. In these cases, the
amounts totaled less than the lesser of (i) 10% of each officer's salary plus
bonus for the year or (ii) $50,000.
(3)Mr. Simmons joined the Company in October 1994.
(4)Mr. Frostholm joined the Company in July 1992 and left the Company in March
1994.
(5)Includes $47,062 in moving and relocation expenses.
(6)Includes $40,756 in moving and relocation expenses.
</TABLE>
Pension Contracts
In January 1995, Temic Telefunken microelectronic GmbH, an affiliate of the
Company, granted a Pension Contract to Mr. Kulle. Under the terms thereof, Mr.
Kulle's benefits at normal retirement age are determined by the "Pension Group"
to which he has been assigned and his years of service. Based on Mr.
<PAGE>
Kulle's current Pension Group, he would be entitled to an annual pension of
approximately $30,500 at age 65.
Mr. Biehn also has a Pension Contract, granted by AEG AG, another affiliate of
the Company. Mr. Biehn's benefits at retirement under this Pension Contract are
not presently determinable; however, AEG AG contributed $8,591 to Mr. Biehn's
pension account for 1994.
Directors' Compensation
During 1994, the Chairman of the Board received a $3,500 quarterly retainer plus
$1,500 for each directors' meeting attended, and each other non-employee
director received a $2,250 quarterly retainer plus $1,000 for each directors'
meeting attended. The Company reimburses directors who are not employees of the
Company or any affiliated corporation the expenses incurred by them in attending
Board and committee meetings.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee of the Company's Board of Directors
are Messrs. Kulle, Maier and Wehrli. Mr. Kulle is the President and Chief
Executive Officer of the Company. Messrs. Maier and Wehrli are non-employee
directors.
COMPENSATION AND INCENTIVE PLANS OF THE COMPANY
A brief description follows of the compensation and incentive plans of the
Company for which compensation was paid for 1994 in which some or all of the
employees, including the officers, of the Company have been eligible to
participate. No director who is not an employee of the Company is eligible to
participate in any of the following plans.
Key Professional Incentive Bonus Plan
In order to provide additional incentive to the Company's key executives, as
well to remain competitive with other companies in Silicon Valley that have
lucrative stock option plans that are unavailable to Siliconix employees, the
Board of Directors felt it was important to establish an incentive bonus plan.
Accordingly, the Board of Directors established the Key Professional Incentive
Bonus Plan in 1991. Participation in the plan is limited to key officers,
managers and senior individual contributors who may be expected to have a
substantial opportunity to influence the annual performance of the Company. The
plan provides for cash bonuses to be paid to the participants. The amount paid
to any participant in the plan is a measure of two performance components, (i)
achievement of corporate objectives, which will be identical for all
participants in the plan, and (ii) achievement of personal goals, which will be
unique for each individual participant. There are three components of the
corporate objectives, namely, bookings, revenues and pre-tax profits. Each has
equal weight; to the extent a goal is exceeded, that component's contribution to
the corporate objectives is correspondingly increased. If a target objective is
not met, its influence on the awards to be made is eliminated and the bonus pool
is correspondingly reduced. The awards are made from a pool consisting of a
maximum of 7-1/2% of United States-based total payroll. An additional
discretionary bonus pool in an amount equal to 1% of United States-based payroll
is available for employees who have made outstanding achievements that have
contributed to the Company's success. Awards are paid early in the year
following the year in which they were earned; provided, however, that certain
highly paid employees may elect to defer up to 100% of their bonus award,
provided that the election is made prior to the beginning of the fiscal year in
respect of which the bonus is earned. The deferral election may not be changed
once made and will provide that the bonus will be paid in one lump sum at the
end of the deferral period chosen. Amounts paid by the Company pursuant to this
plan to each of the five most highly
<PAGE>
compensated executive officers in respect of 1992, 1993 and 1994 are included in
the "Bonus" column of the Summary Compensation Table on page 5.
Qualified Profit Sharing Plan
The Company has a noncontributory Qualified Profit Sharing Plan for its U.S.
employees. The plan provides for annual contributions by the Company of 10% of
consolidated income before taxes (as defined), limited to 15% of compensation
paid to each eligible employee. Vesting in the plan occurs ratably over a
five-year period. Upon employee termination, nonvested contributions are
forfeited and reduce the Company's current and/or future contributions to the
plan. Amounts to be contributed to this plan by the Company on behalf of each
of the five most highly compensated executive officers in respect of 1994 have
been included in the "All Other Compensation" column of the Summary Compensation
Table on page 5.
Qualified Tax-Deferred Savings Plan
Effective January 1, 1983, the Company established a Qualified Tax-Deferred
Savings Plan which allows the Company's eligible U.S. employees to contribute to
the plan by electing to reduce the cash compensation to be paid to them by up to
12%. The plan provides for the Company, beginning in January 1984, to make
matching contributions equal to 100% of the first 2% and 50% of the next 2%
reduction in the compensation of participants who are employed by the Company on
the last day of the year. Participants may receive distributions under the plan
only when they reach age 65 or when their employment terminates, whichever comes
first, but employees who leave the Company prior to age 65 may elect to defer
their distribution until they reach age 65, and employees who are still employed
by the Company at age 65 do not receive their distribution until employment
terminates. Assets of the plan are held in five trust funds: a balanced
investment fund that invests primarily in corporate stocks, bonds and money
market instruments; a fixed income investment fund that invests primarily in
fixed income securities and money market instruments or deposit fund contracts
issued by an insurance company; a treasury fund that invests solely in short-
term United States Treasury securities; an equity fund that invests in common
stocks; and a "small cap" equity fund. Participants may direct the investment
of their accounts to their choice of funds in 10% increments. All employees are
eligible immediately to participate in this plan. Amounts to be contributed to
this plan by the Company on behalf of each of the five most highly compensated
executive officers in respect of 1994 have been included in the "All Other
Compensation" column of the Summary Compensation Table on page 5.
Qualified Pension Plan
The Company has a defined-benefit Qualified Pension Plan covering all U.S.
employees who at January 1, 1983, had attained the age of 25 and had completed
at least three years of service with the Company. Participants will receive a
monthly annuity payment upon retirement at age 55 or later, the annual amount of
which is equal to 0.85% of their basic compensation for the fiscal year 1982
times the number of years of service to the Company completed after the
attainment of age 25 and after completion of three years of service, but prior
to January 1, 1983 (with the years from January 1, 1977 through December 31,
1982 being counted as 1/2 year each). No executive officer will receive any
benefits under this plan.
REPORT OF COMPENSATION COMMITTEE
The Board of Directors has delegated responsibility for determining executive
pay to a Compensation Committee. During 1994, this committee consisted of three
Board members, Messrs. Kulle, Maier and Wehrli. Mr. Kulle was the only employee
director of this Committee, and he was excused from any discussion involving his
own compensation or benefits.
<PAGE>
The responsibilities of the Compensation Committee are:
- - Establish salary levels for all executives of the Company
- - Administer the Company's Key Professional Incentive Bonus Plan
- - Administer the Company's Qualified Profit Sharing Plan
- - Establish general wage increase targets for each fiscal year
- - Recommend and/or approve all special bonuses or awards
The Compensation Committee met concurrently with each meeting of the full Board
in 1994, and, in addition, held one meeting by telephone during the year.
Executive Compensation Generally
Executives of the Company are compensated by base salary and annual cash
incentives (under the Key Professional Incentive Bonus Plan and otherwise), as
well as other benefits generally offered to executives by large corporations,
such as car allowances and reimbursement of certain expenses. The Compensation
Committee evaluates both Company and individual executive performance against
the Company's plan for the year and surveys like industry practices at each
facility location. Performance against plan is the easiest measure to use since
the Company prepares a three-year plan each year. The general Company
performance, as well as individual performance, is used to establish relative
contribution for each executive.
The more difficult task in determining executive compensation is determining
levels relative to like industry practices within the community. The Company
contracts with a local compensation consulting firm each year in order to
determine low, average, and high compensation levels for each executive
position. These relative numbers include such factors as company location,
company size, individual responsibilities and other executive benefits. The
consulting firm's reports include salaries, bonuses and total compensation for
each measured period. These reports are then used by the Compensation Committee
to determine appropriate salary changes and bonuses for the current year. The
reports are used also to inform the full Board of Directors of relative
compensation levels. Executive salaries are typically adjusted effective
January 1 of each year.
Cash compensation is the primary tool that the Company can use to attract and
hold outstanding executives. Siliconix no longer has stock option or purchase
plans of any kind, and since the Northern California community, in which most of
the Company's senior personnel are located, is very accustomed to generous stock
option plans, the Board of Directors as well as the Compensation Committee is
aware that the Company must maintain salaries and bonuses at the upper end of
community levels if Siliconix is to maintain its capable staff.
1994 Compensation of the President and CEO
Mr. Kulle's base salary for 1994 was determined largely in accordance with the
principles described above. In 1993, the Company achieved a nine percent sales
increase, to $170.3 million, and a dramatic 57% increase in net income, to $7.2
million. These results fully met the 1993 plan. The Compensation Committee
considered other factors as well in determining Mr. Kulle's base salary for
1994; for example, in 1994 Mr. Kulle had responsibility not only for Siliconix,
but also for the worldwide semiconductor operations of "TEMIC," the
microelectronics enterprise within the Daimler-Benz Group.
While it may appear that Mr. Kulle is performing services for other members of
TEMIC without compensation, there are countervailing considerations. For
example, the sales force that handles Siliconix products is under the direction
of TEMIC. In addition, Siliconix receives assistance from employees of other
members of TEMIC in the coordination of its marketing, research and development
and design tools activities. Accordingly, Siliconix is well compensated for Mr.
Kulle's work on behalf of other members of TEMIC.
Another consideration was that the Board of Directors adopted a very aggressive
revenue and profit plan for 1994, and Mr. Kulle supported that plan completely.
Based on the foregoing, therefore, the Committee felt it was appropriate to
compensate Mr. Kulle at the upper end of base salary levels for Presidents and
CEOs generally, based upon the report of the Company's compensation consultants.
<PAGE>
Mr. Kulle's bonus under the Key Professional Incentive Bonus Plan reflected both
100% achievement of his personal goals for 1994, as well as the Company's
meeting its 1994 plan for bookings, revenues and net profit on a weighted
average basis. The bonus was determined in accordance with the formula mandated
by the plan.
Submitted by the Compensation Committee:
Richard J. Kulle
Frank Maier
Robert L. Wehrli
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total stockholder
returns for the Company, the NASDAQ Market Index and a peer group of 39
manufacturers of semiconductors and related devices. Historic stock price
performance is not necessarily indicative of future stock price performance, and
any comparison or statement made in this analysis should not be considered a
recommendation or comment relative to the purchase or sale of the Company's
stock.
COMPARISION OF FIVE-YEAR CUMULATIVE TOTAL RETURNS*
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Siliconix** 100 14 18 42 38 70
NASDAQ Stock Market 100 85 136 159 181 177
S&P High-Tech Composite 100 102 116 121 149 174
<FN>
*Assumes $100.00 invested on December 31, 1989. Assumes dividends reinvested.
**The figures for Siliconix incorporated for 1990-94 give effect to the 0.148-
for-1 reverse split that occurred in December 1990 pursant to the Company's Plan
of Reorganization.
</TABLE>
CERTAIN TRANSACTIONS
In 1994 the Company entered into a technology development contract with Daimler-
Benz AG, an affiliate of AEG Capital Corporation, which owns 80.4% of the
Company's outstanding Common Stock. The contract covered a one-year period and
provided that for payments totaling approximately $300,000, the Company will
perform research and development work in certain areas of semiconductor
technology. The contract provided further that Daimler-Benz shall have a
royalty-free license to use the results of the development work.
In 1991, the Company retired all bank borrowings and certain other indebtedness
and repurchased $6,972,000 in principal amount of its Guaranteed Floating Rate
Subordinated Notes. The funds used for these purposes were obtained from AEG
Aktiengesellschaft, an affiliated corporation, through loans of $15,000,000 at
7.875% and $18,500,000 at LIBOR plus 0.25%, all due in 1993. In 1992, $1.07
million of interest was added to the outstanding principal amount. The current
principal amount of $34.57 million is owed to AEG Capital Corporation and bears
interest at a floating rate equal to AEG Capital Corporation's cost of securing
commercial paper. The Company has obtained a written representation from AEG
Capital Corporation that this indebtedness is of long-term nature.
In 1988, the Company loaned $150,000 to King Owyang, an executive officer of the
Company, without interest, in connection with Dr. Owyang's relocation and
employment by the Company. Of this amount, $100,000 was repaid, $28,000 was
forgiven in 1994 and $22,000 was forgiven in 1995. In 1993 and 1994, the
Company loaned an additional $250,000 to Dr. Owyang. Of this amount, $40,000
will be forgiven in
<PAGE>
each of 1995-1999 and $50,000 in 2000, provided Dr. Owyang remains employed by
Siliconix during that period.
In February 1992, the Company entered into an employment agreement with Peter
Weber, then its Executive Vice President. The agreement called for Mr. Weber to
receive a salary of $210,000 per year through April 5, 1992 and a salary of
$60,000 per year for the remainder of 1992 and thereafter. The agreement
further provided that effective April 6, 1992, Mr. Weber would assume indirect
responsibility for the Company's Strategic Marketing and Planning and direction
as it applies within the Daimler-Benz Microelectronics Group, now known as
"TEMIC." The agreement also provided for pro-rata participation by Mr. Weber in
the Company's Key Professional Incentive Bonus Plan in 1992. The agreement was
scheduled to terminate on April 5, 1993; if, however, neither party notifies the
other of its intent not to renew the agreement at least six months prior to its
regularly scheduled expiration, the agreement is self-renewing on a yearly
basis. The agreement was terminated effective April 1995.
In January 1994, the Company loaned Richard Kulle, President and Chief Executive
Officer, $400,000 to assist Mr. Kulle in the purchase of a new home. Of the
principal amount, $40,000 will be forgiven in each of 1995-2004, provided Mr.
Kulle remains employed by Siliconix during that period. In September 1994, the
Company loaned Mr. Kulle an additional $250,000, payable in 1999. The principal
amount outstanding from time to time on these loans bears interest at a floating
rate that approximates the Company's cost of money, currently between 4% and 5%
per annum.
In December 1993, the Company loaned Jurgen Biehn, Vice President and Chief
Financial Officer, $300,000 to assist Mr. Biehn in the purchase of a new home.
Of the principal amount, $30,000 will be forgiven in each of 1995-1999, provided
Mr. Biehn remains employed by Siliconix during that period, leaving $150,000
which is due and payable in five years. The principal amount outstanding from
time to time bears interest at a floating rate that approximates the Company's
cost of money, currently between 4% and 5% per annum.
PROPOSAL 2--RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The independent certified public accountants for the Company for the fiscal year
ended December 31, 1994 were KPMG Peat Marwick LLP. The Company's Board of
Directors has also appointed KPMG Peat Marwick LLP as the Company's independent
certified public accountants for the fiscal year ending December 31, 1995.
Representatives of KPMG Peat Marwick LLP will be present at the Annual Meeting
and will have the opportunity to make a statement if they desire to do so or
respond to appropriate questions from shareholders.
Shareholder ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent public accountants is not required by the Company's Bylaws
or otherwise. However, the Board is submitting the selection of KPMG Peat
Marwick LLP to the shareholders for ratification as a matter of good corporate
practice. If the shareholders fail to ratify the selection, the Audit Committee
and the full Board will consider whether to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board in their discretion may
direct the appointment of a different independent public accounting firm at any
time during the year if they determine that such a change would be in the best
interests of the Company and its shareholders.
The Board of Directors recommends a vote FOR Proposal 2.
<PAGE>
PROPOSAL 3--SENIOR MANAGEMENT STOCK OPTION PLAN
Quando, Ltd. ("Proponent"), 177 West Proctor Street, Carson City, Nevada 89702,
notified the Company on December 12, 1994 that it is the owner of 1,000 shares
of the Company's Common Stock as of that date, and that it intends to offer the
following proposal for consideration and approval at the Annual Meeting of
Shareholders.
Proposal and Proponent's Discussion of Proposal
Proposal: The Company should reward its senior management based on performance
(bonuses) through implementation of a standard plan involving the issuance of
options to purchase the Company's stock at a price at least ten percent (10%) in
excess of the market price of the Company's stock at the time of issuance.
Discussion: This proposal relates to the fact that the officers and directors
collectively own relatively little of the Company's stock. This raises
questions regarding the Company's confidence in its own management and
commitment to increasing shareholder values. We believe that the implementation
of the bonus plan proposed above is a standard practice throughout industry for
rewarding senior management for their performance and for increasing shareholder
values.
Statement of the Board of Directors Against the Proposal
Executive compensation is a matter within the scope of the ordinary business
operations of the Company. Under state corporate law, the business and affairs
of the Company are to be managed by, or under the direction of, its Board of
Directors. As authorized under the Company's charter documents, the Board of
Directors of the Company has delegated responsibility for determining executive
compensation to a Compensation Committee consisting of three Board members.
In determining an appropriate compensation package for senior management, the
Board established the Key Professional Incentive Bonus Plan. Participation in
the Bonus Plan is limited to key officers, managers and senior employees who may
be expected to have a substantial opportunity to influence the annual
performance of the Company. The Bonus Plan provides that the cash amount paid
to any participant is a measure of two performance components: (i) achievement
of corporate objectives, which are identical for all participants in the Bonus
Plan, and (ii) achievement of personal goals, which are unique for each
individual participant.
The Company's compensation package is designed to be competitive with other
comparable companies in order to attract and retain the best qualified
employees. The Company believes that issuing options at an exercise price
arbitrarily set at least ten (10%) percent in excess of the market price of the
Company's stock at the time of issuance as proposed in the shareholder proposal
would not appropriately reward an individual's performance and would not likely
be comparable to the compensation packages offered to executives at other
companies within the industry or community. As a result, the Company believes
that adoption of the shareholder proposal would not be the most effective way of
attracting and retaining the best qualified executives.
Your Board takes all of its responsibilities seriously and exercises its duties
with scrupulous care, including those with respect to compensating its
executives.
For the reasons stated above, the Board of Directors recommends a vote AGAINST
this shareholder proposal.
The affirmative vote of a majority of the votes cast at the meeting by the
holders of shares entitled to vote thereon is required to approve this proposal.
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company at its principal offices
not later than December 26, 1995 in order for them to be considered for
inclusion in the Company's Proxy Statement with respect to the 1996 Annual
Meeting.
ANNUAL REPORT (FORM 10-K)
Upon receipt of a written request from any shareholder, the Company will provide
such shareholder, without charge, a copy of the Company's Annual Report to the
Securities and Exchange Commission on Form 10-K for the fiscal year ended
December 31, 1994, including the financial statements and the schedule thereto.
Shareholders desiring a copy of Form 10-K should send their written request to
the Secretary, Siliconix incorporated, 2201 Laurelwood Road, Santa Clara,
California 95054. If a shareholder making such a request is not a record owner
of the Company's Common Stock, the request of such shareholder must contain a
good-faith representation that, as of April 14, 1995, such shareholder was a
beneficial owner of Common Stock.
MISCELLANEOUS
The only business which the Board of Directors intends to present to the meeting
is the election of a Board of Directors for the ensuing year, the ratification
of the Company's accountants for the current year and the shareholder proposal
concerning the establishment of a senior management stock option plan, provided
that such proposal is properly brought before the meeting. The Board of
Directors is not aware at the time of solicitation of the enclosed proxy of any
other matter which may be presented for action at the meeting. In the event
that any other matter should come before the meeting for action, management will
vote the enclosed proxy in such manner as the named proxies determine in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
DAVID M. ACHTERKIRCHEN
Secretary
April 25, 1995
<PAGE>
SILICONIX INCORPORATED
------------------------
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints and constitutes Richard J. Kulle and Frank
Maier, or either of them, as proxies, each with full power of substitution, to
represent and to vote, as designated below, all shares of the Common Stock of
Siliconix incorporated held by the undersigned at the Annual Meeting of
Shareholders to be held on Friday, June 2, 1995, at 4:00 p.m., or at any
adjournment or adjournments thereof, for the following purposes, described in
the Proxy Statement dated April 25, 1995, accompanying the notice of said
meeting:
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C>
/ / FOR all nominees: H. Eberhardt, R. Kulle, F. Maier, G. Muhlschlegel, R. Wehrli, P. Westrick
/ / FOR all nominees except:
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/ / WITHHOLD AUTHORITY to vote for all nominees
</TABLE>
2. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP
/ / FOR / / AGAINST / / ABSTAIN
3. SHAREHOLDER PROPOSAL TO ESTABLISH A SENIOR MANAGEMENT STOCK OPTION PLAN
/ / FOR / / AGAINST / / ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2 AND AGAINST PROPOSAL 3. RECEIPT IS ACKNOWLEDGED
OF THE NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT DATED APRIL
25, 1995 AND THE ANNUAL REPORT FOR THE YEAR 1994.
I plan to attend the meeting / / I do not plan to attend the meeting / /
<TABLE>
<S> <C>
Dated: -------------------------, 1995
---------------------------------------
(Signature)
---------------------------------------
(Signature, if held jointly)
Please sign exactly as name appears
below. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by
President or other authorized officer.
If a partnership, please sign in
partnership name by authorized person.
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
