<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or 240.14a-12
Siliconix incorporated
- --------------------------------------------------------------------------------
(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:
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(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:
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(4) Date Filed:
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<PAGE>
[Siliconix Letterhead]
April 25, 1997
Dear Shareholder:
We are pleased to invite you to attend the 1997 Annual Meeting of
Shareholders of Siliconix incorporated, which will be held in the main
auditorium at the Company's corporate headquarters, 2201 Laurelwood Road,
Santa Clara, California, on Friday, June 6, 1997, at 4:00 p.m. California
time.
The Annual Report for the year 1996 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. You may revoke any proxy you give at any time
before it is exercised at the meeting.
Sincerely yours,
/s/ RICHARD J. KULLE
Richard J. Kulle
President and Chief Executive Officer
<PAGE>
[Siliconix Letterhead]
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
JUNE 6, 1997
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
corporate headquarters, 2201 Laurelwood Road, Santa Clara, California, on
Friday, June 6, 1997 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, 1997.
3. 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 18, 1997 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, 1997
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 6, 1997
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 6, 1997, 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 May 1, 1997. 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 18, 1997, 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 6,
1997, 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.
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.
1
<PAGE>
<TABLE>
<CAPTION>
Nominee Age Business Experience During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hanspeter Eberhardt 60 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 52 Chairman of the Discrete Components Division of the Semiconductor Division of
TEMIC TELEFUNKEN microelectronic GmbH and Acting Director of the Infrared
Data Communications Product Unit of the TEMIC Semiconductors Discrete
Components Division (since 1996); and President and Chief Executive Officer of
Siliconix incorporated (since 1990); Vice President, Operations of the Semiconductor
Division of TEMIC TELEFUNKEN microelectronic GmbH (1993-1996); director of
Siliconix since 1990.
Frank Maier 59 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.
Michael Muehlbayer 42 Executive Vice President and Chief Financial Officer of TEMIC TELEFUNKEN
microelectronic GmbH (since 1997); Vice President Finance and Controlling of
MTU Motoren- und Turbinen-Union Friedrichshafen GmbH (1994-1997);
Vice President, Office of Chief Financial Officer of Daimler-Benz AG
(1991-1994); proposed for election at the 1997 Annual Meeting
Robert L. Wehrli 75 Business and technical consultant (since 1980); director of PECO Controls
and Etec Systems, Inc.; director of Siliconix since 1981.
Peter Westrick 62 Retired; President and Chief Executive Officer of AEG Corporation (1992-1996);
President and Chief Executive Officer of AEG France S.A. (1979-1992); director of
Siliconix since 1993.
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</TABLE>
DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors met four times in person in 1996 and took action
by unanimous written consent on one occasion in that year. 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 1996. 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 1996. 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.
2
<PAGE>
SECURITY OWNERSHIP
The following table shows the amount of Common Stock of the Company
beneficially owned, as of April 18, 1997, 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>
Name and Address of Beneficial Owner Amount Beneficially Owned Percent of Class
- ------------------------------------------------------------------------------------
<S> <C> <C>
AEG Capital Corporation 8,010,000 80.4%
375 Park Avenue, Suite 3001
New York, NY 10152
- ------------------------------------------------------------------------------------
</TABLE>
The following table shows the number and percentage of shares of Common
Stock beneficially owned, as of April 18, 1997, 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>
Name of Beneficial Owner Amount Beneficially Owned Percent of Class
- ------------------------------------------------------------------------------------
<S> <C> <C>
Hanspeter Eberhardt 0 0
Richard J. Kulle 32,333 *
Frank Maier 1,479 *
Michael Muehlbayer 0 0
Robert L. Wehrli 3,068 *
Peter Westrick 1,900 *
King Owyang 3,583 *
Juergen Biehn 2,000 *
G. Thomas Simmons 1,000 *
All directors and executive officers 45,363 *
as a group (nine persons)
- ------------------------------------------------------------------------------------
</TABLE>
*LESS THAN 1%.
3
<PAGE>
COMPENSATION OF OFFICERS AND DIRECTORS
The following table shows, as to the Chief Executive Officer and each of
the three other most highly compensated executive officers whose salary plus
bonus for 1996 exceeded $100,000, information concerning compensation paid
for services to the Company in all capacities during the fiscal year ended
December 31, 1996, 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>
Annual Compensation Long Term
Name and Principal Position Year Salary Bonus Other Annual Compensation All Other
Compensation LTIP Payouts Compensation(1)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Kulle 1996 $400,456 $226,005 $195,198(2) $160,125 $18,884
President and Chief 1995 $392,491(3) $198,907 $329,622(4) $180,125 $23,820
Executive Officer 1994 $395,380 $153,557 (5) $ 0 $14,830
King Owyang 1996 $324,011 $173,895 $171,172(6) $ 76,200 $18,884
Executive Vice President 1995 $283,067 $200,619 $172,206(7) $ 80,500 $22,818
1994 $270,576 $ 92,618 (5) $ 0 $13,478
Juergen Biehn 1996 $253,677 $169,739 $162,272(8) $ 66,210 $ 2,700
Chief Financial Officer 1995 $228,760 $176,514 $192,049(9) $ 73,550 $ 1,728
1994 $231,900 $ 72,083 (5) $ 0 $ 0
G. Thomas Simmons 1996 $271,487 $146,526 $122,203(10) $ 50,625 $19,856
Vice President, Marketing 1995 $243,881 $143,869 (5) $ 0 $22,547
1994(11) $ 58,803 $ 15,578 (5) $ 0 $ 2,826
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)The Company does not have any stock option or stock purchase plans. All
Other Compensation includes Company contributions to the individuals'
respective Tax Deferred Savings Plan and Profit Sharing Plan accounts, and
payment by the Company of group term life insurance premiums on their behalf.
In 1996 these amounts were--Kulle: TDSP, $4,500; PSP, $12,656; insurance,
$1,728; Owyang: TDSP, $4,500; PSP, $12,656; insurance, $1,728; Biehn:
insurance, $2,700; and Simmons: TDSP, $4,500; PSP, $12,656; insurance, $2,700.
(2)This amount includes $60,629 paid for reimbursement of income taxes for
1996.
(3)This amount includes $39,232 of compensation for accrued but unused
vacation time.
(4)This amount includes $90,000 of forgiven real estate loans and $199,958
paid for reimbursement of income taxes for 1995 and prior years.
(5)Other Annual Compensation includes amounts paid for car allowances,
reimbursement of certain medical expenses and income taxes, and other
personal benefits. 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.
(6)This amount includes $50,364 paid for reimbursement of income taxes for
1996 and $80,000 of forgiven real estate loans.
(7)This amount includes $62,000 of forgiven real estate loans and $95,663
paid for reimbursement of income taxes for 1995 and prior years.
(8)This amount includes $60,000 for a forgiven real estate loan.
(9)This amount includes $69,572 paid for reimbursement of income taxes for
1995 and prior years.
(10)This amount includes $60,000 for a forgiven real estate loan.
(11)Mr. Simmons joined the Company in October 1994.
The following table shows, as to the Chief Executive Officer and each of
the three other executive officers named in the Summary Compensation Table
above, information concerning awards granted under the Company's long-term
incentive plan (the Key Professional Performance Unit Plan) in the fiscal
year ended December 31, 1996.
<TABLE>
<CAPTION>
Performace or Estimated Future Payouts under Non-Stock Price-Based Plans
Name Number of Other Period Until Threshold Target Maximum
Performance Units Maturation or Payout
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Richard J. Kulle 1,365 1996-1998 $68,250 $136,500 $204,750
King Owyang 600 1996-1998 $30,000 $ 60,000 $ 90,000
Juergen Biehn 440 1996-1998 $22,000 $ 44,000 $ 66,000
G. Thomas Simmons 508 1996-1998 $25,400 $ 50,800 $ 76,200
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Participation in the Key Professional Performance Unit Plan is limited
to 39 key employees who may be expected to have a substantial opportunity to
influence the 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 the extent to which specified corporate objectives are
achieved over a three-year period, beginning in the year in which the award
of performance units is made. The corporate objectives consist of the
attainment of goals relating to one or more of the following performance
measures: (1) bookings, (2) revenues, (3) earnings before taxes, (4) return
on net assets, (5) return on equity, (6) shareholder return and (7) net
revenue per employee. The Compensation Committee will determine the target
level of performance that must be achieved with respect to each performance
goal in order for that performance goal to be considered attained.
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 the normal retirement age of 65 are
determined by the "Pension Group" to which he has been assigned and his years
of service. Based on Mr. Kulle's current Pension Group, he would be entitled
to an annual pension of approximately $25,200 at age 65.
Mr. Biehn also has a Pension Contract that was granted by AEG AG,
another affiliate of the Company. The successor in interest of AEG AG is EHG.
Mr. Biehn's benefits at retirement under this Pension Contract are not
presently determinable; however, as his current employer, the Company
contributed $6,845 to Mr. Biehn's EHG pension account for 1996.
DIRECTORS' COMPENSATION
During 1996, 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.
REPORT OF COMPENSATION COMMITTEE
The Board of Directors has delegated responsibility for determining
executive pay to a Compensation Committee. During 1996, 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.
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 Key Professional Performance Unit Plan
- Administer the Company's Qualified Retirement 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 1996.
5
<PAGE>
EXECUTIVE COMPENSATION GENERALLY
Executives of the Company are compensated by base salary and annual cash
incentives (under the Key Professional Incentive Bonus Plan, the Key
Professional Performance Unit 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 amount paid to any participant in
the Key Professional Incentive Bonus Plan is a measure of two performance
components, (i) achievement of corporate objectives, which consist of several
components and will be identical for all participants in the plan, and (ii)
achievement of personal goals, which will be unique for each individual
participant. 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
amount paid to any participant in the Key Professional Performance Unit Plan
depends on the achievement of corporate objectives over a three-year period.
These objectives consist of several components. 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 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. It is the Company's policy to pay its personnel at no less
than the 75th percentile of compensation of comparable personnel in the
Silicon Valley. The Company also on occasion provides its executives with
real estate loans that may be forgiven in increments over a specified number
of years, provided that the executive remains employed by the Company during
that period. See "Certain Transactions."
1996 COMPENSATION OF THE PRESIDENT AND CEO
Mr. Kulle's base salary for 1996 was determined largely in accordance
with the principles described above. In 1995, the Company achieved a 27%
sales increase, to $250.3 million, and a 128% increase in net income, to
$24.2 million. These results greatly exceeded the 1995 plan. The Compensation
Committee considered other factors as well in determining Mr. Kulle's base
salary for 1996; for example, in 1996, Mr. Kulle had responsibility not only
for Siliconix, but also assumed responsibility for the Discrete Components
Division of the semiconductor division of "TEMIC," the microelectronics
enterprise within the Daimler-Benz Group, and is also acting Director of the
Infrared Data Communications Product Unit of the TEMIC Semiconductors
Discrete Components Division. Siliconix charges back to the other members of
TEMIC Semiconductors costs and expenses that Mr. Kulle and other Siliconix
employees incur on behalf of such other members.
Another consideration was that the Board of Directors adopted a very
aggressive revenue and profit plan for 1995, 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.
Mr. Kulle's bonuses under the Key Professional Incentive Bonus Plan and
the Key Professional Performance Unit Plan reflected 100% achievement of his
personal goals for 1996. The Company did not achieve all of its corporate
objectives under the Plans in 1996. The bonuses under the Plans were
determined in accordance with the formulas mandated thereby.
Submitted by the Compensation Committee: Richard J. Kulle, Frank Maier,
Robert L. Wehrli
6
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
stockholder returns, assuming reinvestment of dividends, for the Company, the
S&P 500-Registered Trademark- Index and the S&P-Registered Trademark-
Technology Sector Index. The total shareholder return assumes $100 invested
on December 31, 1991 in Siliconix Common Stock, the S&P 500 Index and the S&P
Technology Sector Index. 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.
[GRAPH]
1991 1992 1993 1994 1995 1996
- ------------------------------------------------------------------------------
Siliconix $100 $231 $208 $381 $1,138 $723
S&P 500 $100 $108 $118 $120 $ 165 $203
S&P Technology Sector Index $100 $104 $128 $149 $ 215 $302
- ------------------------------------------------------------------------------
CERTAIN TRANSACTIONS
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%. 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 Daimler-Benz Capital,
Inc. ("DBCI"), an affiliated corporation, bears interest at a floating rate
equal to DBCI's cost of securing commercial paper, 5.81% at December 31,
1996, and is due in 1999.
7
<PAGE>
In 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 was forgiven in each of 1995-1996, $60,000 was
forgiven in 1997, $40,000 will be forgiven in each of 1998-2003 and $20,000
will be forgiven in 2004, provided Mr. Kulle remains employed by Siliconix
during that period. Later in 1994, the Company loaned Mr. Kulle an additional
$250,000, payable in 1999. Of this amount, $50,000 was forgiven in 1995 and
$100,000 was forgiven in 1997. In 1995, the Company loaned Mr. Kulle $400,000
for personal expenses. Of this amount, $300,000 remains outstanding. 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 5% and 6% per annum. Interest on these loans was forgiven in 1996.
In 1988, the Company loaned $150,000 to King Owyang, Executive Vice
President, 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 and in 1996, the Company
loaned an additional $200,000 to Dr. Owyang. Of this amount, $40,000 was
forgiven in 1995, $80,000 was forgiven in 1996 and 1997, and $50,000 will be
forgiven in each of 1998-2002, provided Dr. Owyang remains employed by
Siliconix during that period. 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 5% and 6% per annum. Interest on
these loans was forgiven in 1996. In 1995, the Company loaned Dr. Owyang
$80,000 for personal expenses. This amount has been repaid.
In 1993, the Company loaned Juergen Biehn, Vice President and Chief
Financial Officer, $300,000 to assist Mr. Biehn in the purchase of a new
home. Of this amount, $30,000 was forgiven in 1994-1995, $60,000 was forgiven
in 1996 and $30,000 will be forgiven in each of 1997-2002, provided Mr. Biehn
remains employed by Siliconix during that period. The principal amount
outstanding from time to time bears interest at a floating rate that
approximates the Company's cost of money, currently between 5% and 6% per
annum. Interest on this loan was forgiven in 1996.
In 1994, the Company loaned $50,000 to G. Thomas Simmons, Vice
President, Marketing, in connection with Mr. Simmons's relocation and
employment by the Company. Of this amount, $16,667 was forgiven in 1995 and
$16,666 in 1996; the remaining $16,667 will be forgiven in 1997, provided Mr.
Simmons remains employed by Siliconix during that period. In 1995, the
Company loaned an additional $150,000 Mr. Simmons, to assist Mr. Simmons in
the purchase of a new home. Of this amount, $60,000 was forgiven in 1996,
$30,000 has been forgiven in 1997 and $30,000 will be forgiven later in 1997
and in 1998, provided Mr. Simmons remains employed by Siliconix during that
period. The principal amount outstanding on these loans from time to time
bears interest at a floating rate that approximates the Company's cost of
money, currently between 5% and 6% per annum. Interest on these loans was
forgiven in 1996.
PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The independent certified public accountants for the Company for the
fiscal year ended December 31, 1996 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, 1997. 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 to 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.
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SHAREHOLDER PROPOSALS
Shareholder proposals must be received by the Company at its principal
offices not later than December 26, 1997 in order for them to be considered
for inclusion in the Company's Proxy Statement with respect to the 1998
Annual Meeting. No such proposals were received with respect to the 1997
Annual Meeting.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT OF 1934
Directors and executive officers are required to comply with section 16
of the Securities Exchange Act of 1934, which requires generally that such
persons file reports on Form 4 with the Securities and Exchange Commission on
or before the tenth day of the month following any month in which they engage
in any transaction in the Company's Common Stock. All directors and executive
officers timely filed all required Form 4s with respect to transactions that
occurred in the fiscal year ended December 31, 1996.
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, 1996, 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 18,
1997, 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 and the
ratification of the Company's accountants for the current year. 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, 1997
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SILICONIX INCORPORATED
----------------------
ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1997
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 6, 1997, at 4:00 p.m., or at any
adjournment or adjournments thereof, for the following purposes, described in
the Proxy Statement dated April 25, 1997, accompanying the notice of said
meeting:
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
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<PAGE>
/ X / PLEASE MARK
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS.
FOR all nominees / /
WITHHOLD AUTHORITY to vote for all nominees / /
FOR all nominees except: ______________ / /
H. Eberhardt, R. Kulle, F. Maier, M. Muehlbayer, R. Wehrli, P. Westrick
2. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2. RECEIPT IS ACKNOWLEDGED OF THE NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS AND PROXY STATEMENT DATED APRIL 25, 1997 AND THE ANNUAL REPORT
FOR THE YEAR 1996.
I plan to attend the meeting / /
I do not plan to attend the meeting / /
Signature(s)_________________________________________ Dated __________, 1997
Please sign exactly as name appears above. 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.
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