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:
[ ] 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
Micrel, 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction.
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
MICREL, INCORPORATED
1849 Fortune Drive
San Jose, California 95131
Notice of Annual Meeting of Shareholders
To Be Held May 22, 1997
To the Shareholders of Micrel, Incorporated:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of Micrel, Incorporated, a California corporation (the "Company"),
will be held at the Company's offices located at 1931 Fortune Drive, San Jose,
California 95131 on May 22, 1997 at 10:00 a.m., local time, for the following
purposes:
1. ELECTION OF DIRECTORS. To elect five directors of the Company to
serve until the 1998 Annual Meeting or until their successors are duly
elected and qualified;
2. SELECTION OF INDEPENDENT AUDITORS. To ratify the appointment of
Deloitte & Touche LLP as the Company's independent auditors for the
fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached hereto and made a part hereof. The Annual Meeting
will be open to shareholders of record, proxy holders, and others by invitation
only. Beneficial owners of shares held by a broker or nominee must present
proof of such ownership to attend the meeting.
The Board of Directors has fixed the close of business on April 3,
1997 as the record date for determining the shareholders entitled to notice of
and to vote at the 1997 Annual Meeting of Shareholders and any adjournment or
postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS
IN PERSON, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED 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.
By Order of the Board of Directors,
Raymond D. Zinn
President, Chief Executive Officer and
Chairman of the Board of Directors
San Jose, California
April 17, 1997
<PAGE>
MICREL, INCORPORATED
1849 Fortune Drive
San Jose, California 95131
---------------
PROXY STATEMENT
---------------
Annual Meeting of Shareholders
May 22, 1997
The enclosed proxy is solicited on behalf of the Board of Directors of
Micrel, Incorporated, a California corporation (the "Company"), for use at the
Annual Meeting of Shareholders (the "Annual Meeting") to be held at 10:00 a.m.,
local time, at the Company's offices at 1931 Fortune Drive, San Jose, California
95131, on May 22, 1997, and at any adjournment or postponement thereof. Only
holders of the Company's Common Stock of record on April 3, 1997 will be
entitled to vote. Holders of Common Stock are entitled to one vote for each
share held. With respect to the election of directors, a shareholder may
cumulate his or her votes, meaning that such shareholder can multiply the number
of shares owned by the number of board positions to be filled and allocate such
votes for all or as many director-nominees as he or she may designate provided
that such shareholder has given notice at the Annual Meeting of his or her
intention to cumulate votes prior to the voting and then cumulative voting will
apply only to those candidates whose names have been placed in nomination prior
to the voting. If any one shareholder has given such notice, all shareholders
may cumulate their votes for candidates in nomination. At the close of business
on the record date, there were approximately 9,385,793 shares of the Company's
Common Stock outstanding.
The presence in person or by proxy of a majority of the shares entitled to
vote is necessary to constitute a quorum at the Annual Meeting. Abstentions and
broker non-votes will be counted for purposes of determining the presence or
absence of a quorum but are not counted for any purpose in determining whether a
matter is approved. "Broker non-votes" are shares held by brokers or nominees
which are present in person or represented by proxy for quorum purposes, but
which are not voted on a particular matter.
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it prior to its exercise. A proxy may be revoked by filing
an instrument revoking it, or a duly executed proxy bearing a later date, with
the Secretary of the Company prior to the meeting, or by attending the Annual
Meeting and electing to vote in person.
The shares represented by a duly executed and unrevoked proxy in the form
accompanying this Proxy Statement will be voted in accordance with the
instructions contained therein, and in the absence of instructions, such shares
will be voted FOR the nominees for director named herein, and FOR the
ratification of auditors and according to the discretion of the proxy holders on
any other matters that may properly come before the Annual Meeting.
This Proxy Statement and the accompanying proxy were first sent by mail to
shareholders on or about April 17, 1997. The costs of this solicitation are
being borne by the Company. 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. Proxies may also be
solicited personally or by telephone, facsimile or telegram by certain of the
Company's directors, officers and regular employees, without additional
compensation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As set by the Board of Directors pursuant to the Bylaws of the Company, the
authorized number of directors to be elected is five. Directors will hold
office from the time of their election until the next Annual Meeting or until
their successors are duly elected and qualified. The nominees receiving the
highest number of affirmative votes will be
1
<PAGE>
elected as directors. Only votes cast for a nominee will be counted in
determining whether that nominee has been elected as director. Shareholders may
withhold authority to vote for the entire slate as nominated or, by writing the
name of an individual nominee in the space provided on the proxy card, withhold
the authority to vote for any individual nominee. Votes withheld from any
director are counted for purposes of determining the presence or absence of a
quorum, but have no other legal effect under California law.
The following five persons have been nominated by the Board of Directors
for election to the Board: Raymond D. Zinn, Warren H. Muller, Larry L. Hansen,
George Kelly and Dale L. Peterson. All of the nominees are incumbent directors.
If any of the nominees should decline or be unable to act as a director, the
shares may be voted for such substitute nominees as the persons appointed by
proxy may in their discretion determine.
The experience and background of each of the nominees are set forth below.
Raymond D. Zinn, age 59, is a co-founder of the Company and has been its
President, Chief Executive Officer and Chairman of its Board of Directors since
the Company's inception in 1978. Prior to co-founding the Company, Mr. Zinn
held various management and manufacturing executive positions in the
semiconductor industry at Electromask TRE, Electronic Arrays, Inc., Teledyne,
Inc., Fairchild Semiconductor Corporation and Nortek, Inc. He holds a B.S. in
Industrial Management from Brigham Young University and a M.S. in Business
Administration from San Jose State University.
Warren H. Muller, age 58, is a co-founder of the Company and has served as
a member of the Company's Board of Directors and as its Vice President of Test
Operations since the Company's inception in 1978. He was previously employed in
various positions in semiconductor processing and testing at Electronic Arrays,
Inc. and General Instruments Corporation. Mr. Muller holds a B.S.E.E. from
Clarkson College.
Larry L. Hansen, age 68, joined the Company's Board of Directors in June
1994. From October 1988 to January 1991, Mr. Hansen served as Executive Vice
President of Tylan General, Inc. From February 1964 to September 1988, Mr.
Hansen was employed by Varian Associates, where he last served as Executive Vice
President. From 1975 to 1979, Mr. Hansen served as Chairman of the U.S.
Department of Commerce Technical Advisory Committee on Semiconductor
Manufacturing Equipment. Mr. Hansen serves on the Board of Directors of Signal
Technology Corp., Electro Scientific Industries, Inc. and Tylan General, Inc.
George Kelly, age 62, joined the Company's Board of Directors in June 1994.
He is a retired audit partner of Deloitte & Touche LLP, where he worked for
thirty years until his retirement in June 1989. He is also an adjunct lecturer
at Santa Clara University and serves on the Board of Directors of Ion Systems,
Inc., a private company.
Dale L. Peterson, age 61, joined the Company's Board of Directors in June
1994. He is currently Chief Executive Officer and Chairman of the Board of
Directors of Signal Technology Corp., where he has been employed since 1989.
Mr. Peterson served as President of Signal Technology Corp. until 1993.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NAMED NOMINEE
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of
February 28, 1997, by (i) each shareholder known to the Company to own
beneficially more than 5% of the Company's Common Stock, (ii) each of the
Company's directors and nominees, (iii) the Chief Executive Officer and each of
the four other most highly compensated executive officers of the Company
(collectively, the "Named Executive Officers") and (iv) all executive officers
and directors of the Company as a group.
<TABLE>
5% SHAREHOLDERS, DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
Number of Shares
5% Shareholders, Directors, Nominees and Named Beneficially Owned(1)
Executive Officers ---------------------
Number Percent(2)
--------- -----------
<S> <C> <C>
Wasatch Advisors, Inc.
68 South Main Street, Suite 400
Salt Lake City, Utah 84101(3)........................ 854,006 9.1%
The Capital Group of Companies, Inc., Capital
Research and Management Company, and SMALLCAP
World Fund, Inc.
333 South Hope Street
Los Angeles, CA 90071(4)............................. 598,000 6.4%
Raymond D. Zinn......................................... 1,575,500 16.8%
Warren H. Muller........................................ 1,502,600 16.0%
Lawrence R. Sample(5)................................... 199,989 2.1%
John D. Husher.......................................... 150,047 1.6%
Robert J. Barker(6)..................................... 40,000 *
Larry L. Hansen(7)...................................... 3,750 *
George Kelly(7)......................................... 3,750 *
Dale L. Peterson(7)..................................... 4,750 *
All executive officers and directors as a group
(9 persons)(8).......................................... 3,480,386 36.3%
- --------------------
* Less than 1%
</TABLE>
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of Common Stock subject to options held by that person that are
currently exercisable or exercisable within 60 days of February 28, 1997
are deemed outstanding. Such shares, however, are not deemed outstanding
for the purposes of computing the percentage ownership of each other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the tables have
sole voting and investment power with respect to the shares set forth
opposite such person's name.
(2) Percentage beneficially owned is based on 9,385,793 shares outstanding as
of February 28, 1997.
(3) Based on a Schedule 13G dated February 14, 1997, Wasatch Advisors, Inc. has
sole voting and dispositive power with respect to 854,006 shares of the
Company's Common Stock as of December 31, 1996.
(4) Based on a Schedule 13G dated February 12, 1997, Capital Group Companies,
Inc., Capital Research and Management Company, and SMALLCAP World Fund,
Inc. have sole dispositive power with respect to 598,000 shares of the
Company's Common Stock as of December 31, 1996.
(5) Includes 162,900 shares subject to stock options exercisable within 60 days
of February 28, 1997. Also includes 1,500 shares held by Mr. Sample as
custodian for his minor son under the California Uniform Transfers to
Minors Act.
(6) Includes 40,000 shares subject to stock options exercisable within 60 days
of February 28, 1997.
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<PAGE>
(7) Includes 3,750 shares subject to stock options exercisable within 60 days
of February 28, 1997.
(8) Includes 214,150 shares subject to stock options exercisable within 60 days
of February 28, 1997.
Relationships Among Directors or Executive Officers
There are no family relationships among any of the directors or executive
officers of the Company.
Committees and Meetings of the Board of Directors
The Board of Directors held four regularly scheduled or special meetings
during the fiscal year ended December 31, 1996 (the "Fiscal Year"). Each
current member of the Board of Directors nominated for election attended at
least 75% of the aggregate of the total number of meetings of the Board of
Directors and of the Committees on which he served during the Fiscal Year. The
Company has standing Audit and Compensation Committees of the Board of
Directors. The Board of Directors does not have a nominating committee or
committee performing the functions of a nominating committee.
Audit Committee. The Audit Committee, consisting of Messrs. Peterson and
Kelly, reviews with the Company's independent auditors and management the scope
and results of the annual audit, the scope of other services provided by the
Company's independent auditors, proposed changes in the Company's financial and
accounting standards and principles, and the Company's policies and procedures
with respect to its internal accounting, auditing and financial controls and
makes recommendations to the Board of Directors on the engagement of the
independent auditors, as well as other matters which may come before it or as
directed by the Board of Directors. The Audit Committee met five times during
the Fiscal Year.
Compensation Committee. The Compensation Committee consists of Messrs.
Kelly and Hansen. Mr. Zinn served on the Compensation Committee until his
resignation from such committee in May 1996. The Compensation Committee makes
recommendations to the Board of Directors regarding all forms of compensation to
executive officers and all bonus and stock compensation to employees,
administers the Company's stock option plans and performs such other duties as
may from time to time be determined by the Board of Directors. The Compensation
Committee met four times during the Fiscal Year.
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee was formed in July 1994 to review and
approve the compensation and benefits for the Company's key executive officers,
administer the Company's stock option plans and make recommendations to the
Board of Directors regarding such matters. The Compensation Committee is
currently composed of Messrs. Hansen and Kelly, neither of whom is an officer of
the Company. Mr. Zinn, the Company's President, Chief Executive Officer and
Chairman of the Board of Directors, was appointed by the Board of Directors to
the Compensation Committee on November 9, 1995 and served on the Compensation
Committee until his resignation from such committee in May 1996. While serving
on the Compensation Committee, Mr. Zinn was excluded from any discussions
regarding the final determination of his own compensation.
Employment Agreements
None of the Named Executive Officers has an employment agreement with the
Company.
Compensation of Directors
Non-employee directors of the Company received $500 in compensation for
each Board of Directors meeting attended and $500 for each Committee meeting not
held in conjunction with a Board meeting.
The Company's 1994 Stock Option Plan (the "1994 Option Plan") provides for
annual automatic grants of nonqualified stock options to continuing non-employee
directors. On the date of each annual shareholders' meeting,
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<PAGE>
each individual who is at the time continuing to serve as a non-employee
director will automatically be granted an option to purchase 5,000 shares of the
Company's Common Stock. All options automatically granted to non-employee
directors will have an exercise price equal to 100% of the fair market value on
the date of grant and become exercisable at a rate of 25% per year commencing on
the first anniversary of the date of grant, such that the option is fully
exercisable four years from the grant date. On May 16, 1996, Messrs. Kelly,
Hansen and Peterson received an automatic stock option grant under the Company's
1994 Option Plan for 5,000 shares each of the Company's Common Stock at an
exercise price of $17.75 per share.
Compensation Committee Report on Executive Compensation
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following report and
the Performance Graph shall not be incorporated by reference into any such
filings, nor shall they be deemed to be soliciting material or deemed filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended.
Compensation Philosophy. The Committee believes that the primary goal of
the Company's compensation program should be related to creating shareholder
value. The Committee seeks to offer the Company's executive officers
competitive compensation opportunities based upon their personal performance,
the financial performance of the Company and their contribution to that
performance. The executive compensation program is designed to attract and
retain executive talent that contributes to the Company's long-term success, to
reward the achievement of the Company's short-term and long-term strategic
goals, to link executive officer compensation and shareholder interests through
equity-based plans, and to recognize and reward individual contributions to
Company performance.
The compensation of the Company's executive officers consists of three
principal components: salary, bonus and long-term incentive compensation.
Salary. Salaries for the Company's executive officers are determined
primarily on the basis of the executive officer's responsibility, general salary
practices of peer companies and the officer's individual qualifications and
experience. The base salaries are reviewed annually and may be adjusted by the
Committee in accordance with certain criteria which include (i) individual
performance, (ii) the functions performed by the executive officer, (iii) the
scope of the executive officer's on-going duties, (iv) general changes in the
compensation peer group in which the Company competes for executive talent and
(v) the Company's financial performance, generally. The weight given such
factors by the Committee may vary from individual to individual.
Bonus. In order to increase incentives for outstanding performance, a
portion of each executive officer's compensation is paid in the form of
contingent cash bonuses which are paid annually. The bonus amounts for
executive officers are dependent in part on the Company's net income
performance, as well as individualized criteria such as achievement of specified
goals for the department or divisions for which the executive officer has
responsibility and satisfactory completion of special projects supervised by the
executive officer.
Long-Term Incentive Awards. Stock options serve to further align the
interests of management and the Company's shareholders by providing executive
officers with an opportunity to benefit from the stock price appreciation that
can be expected to accompany improved financial performance. Options also
enhance the Company's ability to attract and retain executives. The number of
option shares granted and other option terms, such as vesting, are determined by
the Committee, based on recommendations of management in light of, among other
factors, each executive officer's level of responsibility, prior performance and
other compensation. However, the Company does not provide any quantitative
method for weighing these factors, and a decision to grant an award is primarily
based upon an evaluation of the past as well as the future anticipated
performance and responsibilities of the individual in question.
Chief Executive Officer Compensation. The compensation of the Chief
Executive Officer is reviewed annually on the same basis as discussed above for
all executive officers. Raymond D. Zinn's base salary for fiscal 1996 was
$215,792. Mr. Zinn's base salary for 1996 was established, in part, by
comparing the base salaries of chief
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<PAGE>
executive officers at other companies of similar size and geographic location
using published compensation sources. Mr. Zinn's compensation is also based on
his position and responsibilities, his past and expected contribution to the
Company's future success and on the financial performance of the Company.
During 1996, the Company granted Mr. Zinn options covering 35,000 shares of
Common Stock under the 1994 Plan. The options become vested and are exercisable
in increments of 20% over a five-year period.
Policy Regarding Deductibility of Compensation. The Company is required to
disclose its policy regarding qualifying executive compensation for
deductibility under Section 162(m) of the Internal Revenue Code which provides
that, for purposes of the regular income tax and the alternative minimum tax,
the otherwise allowable deduction for compensation paid or accrued with respect
to the executive officers of a publicly-held corporation, which is not
performance-based compensation is limited to no more than $1 million per year
per officer. It is not expected that the compensation to be paid to the
Company's executive officers for fiscal 1997 will exceed the $1 million limit
per officer. Under Treasury regulations, any compensation realized by an
executive officer with respect to stock options granted under the Company's 1989
Stock Option Plan prior to the first shareholders' meeting in 1998 is expected
to qualify as performance-based compensation not subject to the $1 million
limitation. Option grants under the 1994 Stock Option Plan are intended to
qualify as performance-based compensation not subject to the $1 million
limitation.
COMPENSATION COMMITTEE
Larry L. Hansen, Chairman
George Kelly
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the annual compensation earned during the
years ended December 31, 1996, 1995 and 1994 by the Company's Chief Executive
Officer and each of the Named Executive Officers:
<TABLE>
Summary Compensation Table
Annual Long-Term
Compensation Compensation
----------------------- ------------
Securities All Other
Bonus Underlying Compensation
Name and Principal Position Year Salary($) ($)(1) Options(#) ($)(2)
- ---------------------------- ---- --------- ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Raymond D. Zinn,
President, Chief Executive 1996 $215,792 $100,000 35,000 $39,310(3)
Officer and Chairman of the 1995 222,257 30,000 -- 1,390
Board....................... 1994 193,600 50,000 -- 822
1996 168,580 23,000 15,000 7,665
Warren H. Muller, 1995 164,188 5,000 -- 1,390
Vice President and Secretary 1994 160,380 -- -- 822
John D. Husher, 1996 145,932 18,000 10,000 8,342
Vice President, Wafer 1995 138,299 5,000 -- 1,763
Fabrication Division........ 1994 137,555 6,800 -- 744
1996 144,117 17,000 10,000 957
Lawrence R. Sample, 1995 136,359 4,000 -- 654
Vice President, Design...... 1994 131,762 3,000 -- 702
Robert J. Barker, 1996 141,277 23,000 -- 913
Vice President, Finance and 1995 132,954 6,000 -- 615
Chief Financial Officer..... 1994 94,583 30,000 -- 500
</TABLE>
- -----------
(1) All bonuses for a particular year reflect amounts earned in that year
and paid in the following year.
(2) Represents premiums paid on term life insurance and in 1996, an
automobile allowance of $6,000 for each of Messrs. Muller and Husher.
(3) Includes an automobile allowance of $6,375 and $32,935 in premiums paid
on Mr. Zinn's behalf for life and disability insurance policies.
6
<PAGE>
Option Grants In Last Fiscal Year
The following table provides certain information with respect to stock
options granted to the Named Executive Officers during the fiscal year ended
December 31, 1996. In addition, as required by the Securities and Exchange
Commission rules, the table sets forth the potential realizable value over the
term of the option (the period from the grant to the expiration date) based on
assumed rates of stock appreciation of 5% and 10%, compounded annually. These
amounts are based on assumed rates of appreciation and do not represent the
Company's estimate of future stock values. Actual gains, if any, on stock
option exercises will be dependent on the future performance of the Common
Stock.
<TABLE>
Individual Grants
-----------------------------------------------
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Exercise Annual Rate of Stock
Underlying Granted to Price Per Price Appreciation
Options Employees in Share Expiration for Option Term(5)
------------------
Name Granted(#)(1) Fiscal Year(2) ($/Sh)(3) Date(4) 5%($) 10%($)
- ---------------- ------------ ------------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Raymond D. Zinn... 35,000 6.75% $15.13 06/26/01 $146,305 $323,295
Warren H. Muller.. 15,000 2.89% $15.13 06/26/01 62,702 138,555
John D. Husher.... 10,000 1.93% $13.75 06/26/06 86,472 219,139
Lawrence R. Sample 10,000 1.93% $13.75 06/26/06 86,472 219,139
Robert J. Barker.. -- -- -- -- -- --
- ------------------
</TABLE>
(1) The options were granted pursuant to the Company's 1994 Stock Option
Plan. The options will become vested and exercisable at the rate of 20%
per year.
(2) Based on a total of 518,500 options granted to employees of the Company
in 1996, including the Named Executive Officers.
(3) The options granted to individuals owning less than 10% of the
outstanding shares of the Company's Common Stock were granted at an
exercise price per share equal to the fair market value based on the
closing market value of a share of the Company's Common Stock on the
Nasdaq National Market on the date the options were granted. Options
granted to individuals owning 10% or more of the shares of the Company's
outstanding Common Stock were granted at 110% of the fair market value
of the Common Stock on the date of grant.
(4) The options granted to individuals owning less than 10% of the
outstanding shares of the Company's Common Stock have a term of ten
years subject to earlier termination upon the occurrence of certain
events related to termination of employment. Options granted to
individuals owning 10% or more of the shares of the Company's
outstanding Common Stock have a term of five years.
(5) The potential realizable value is calculated based on the term of the
option at its time of grant (five or ten years). It is calculated by
assuming that the stock price on the date of grant appreciates at the
indicated annual rate, compounded annually for the entire term of the
option, and that the option is exercised and sold on the last day of its
term for the appreciated stock price. There can be no assurance that
the amounts reflected in this table will be achieved.
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<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values
The following table sets forth for each of the Named Executive Officers
certain information concerning the number of shares subject to both exercisable
and unexercisable stock options as of December 31, 1996. Also reported are
values for "in-the-money" options that represent the positive spread between the
respective exercise prices of outstanding stock options and the fair market
value of the Company's Common Stock as of December 31, 1996.
<TABLE>
Number of Securities Value of
Underlying Unexercised Unexercised
Options at In-the-Money Options at
December 31, 1996(#) December 31, 1996($)(2)
----------------------- -----------------------
Shares Value
Acquired on Realized
Name Exercise(#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Raymond D. Zinn... 90,000 $1,255,800 -- 35,000 -- $ 577,324
Warren H. Muller.. 54,400 754,528 -- 15,000 -- 247,425
John D. Husher.... -- -- -- 10,000 -- 178,750
Lawrence R. Sample 10,000 127,500 162,900 10,000 $4,988,812 178,750
Robert J. Barker.. 40,000 837,500 -- 120,000 -- 3,495,000
- ----------------------
</TABLE>
(1) Calculated by determining the difference between the fair market value of
the securities underlying the option on the date of exercise and the
exercise price of the Named Executive Officers' respective options.
(2) Calculated by determining the difference between the fair market value of
the securities underlying the option at December 31, 1996 ($31.625 per
share) and the exercise price of the Named Executive Officers' respective
options.
Stock Performance Graph
The following graph compares the percentage change in the cumulative total
shareholder return on the Company's Common Stock from the date of the Company's
initial public offering (December 9, 1994) through the end of the Company's last
fiscal year (December 31, 1996), with the percentage change in the cumulative
total return for The Nasdaq Stock Market (U.S. Companies) and the Hambrecht and
Quist Technology Index. The comparison assumes an investment of $100 on
December 9, 1994 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends. The stock price performance
shown on the graph below is not necessarily indicative of future price
performance.
8
<PAGE>
[PERFORMANCE GRAPH FOR THE PERIOD DECEMBER 9,
1994 THROUGH DECEMBER 31, 1996 APPEARS HERE]
The following table sets forth the data points used in preparing the
Performance Graph:
H&Q Technology Nasdaq Stock
Dates Micrel, Inc. Index Market - U.S.
-------- ----------- --------------- -------------
12/09/94 9.00 487.27 233.822
12/31/94 14.50 516.18 244.462
01/31/95 15.63 513.81 245.832
02/28/95 17.75 552.36 258.833
03/31/95 17.50 574.51 266.502
04/30/95 17.75 611.00 274.892
05/31/95 21.13 629.09 281.981
06/30/95 23.00 696.94 304.832
07/31/95 23.50 757.33 327.239
08/31/95 28.00 771.71 333.871
09/30/95 28.00 793.66 341.548
10/31/95 22.75 803.87 339.592
11/30/95 16.50 799.32 347.565
12/31/95 19.50 775.02 345.715
01/31/96 18.75 792.26 347.424
02/29/96 15.13 822.47 360.665
03/31/96 14.25 790.50 361.864
04/30/96 17.00 876.73 391.879
05/31/96 16.50 888.94 409.872
06/30/96 16.75 826.80 391.401
07/31/96 17.25 748.15 356.543
08/31/96 18.25 792.53 376.521
09/30/96 23.75 880.39 405.339
10/31/96 20.50 865.38 400.897
11/30/96 25.13 950.86 425.742
12/31/96 31.63 929.94 425.258
9
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has selected Deloitte & Touche LLP ("Deloitte &
Touche") as the Company's independent auditors for the fiscal year ending
December 31, 1997. Deloitte & Touche has been the Company's independent
auditors since 1980. In the event that ratification of this selection of
auditors is not approved by a majority of the shares of the Company's Common
Stock voting at the Annual Meeting in person or by proxy, management will
reconsider its future selection of auditors.
A representative of Deloitte & Touche is expected to be present at the
Annual Meeting and will have an opportunity to make a statement if he or she so
desires. Moreover, he or she will be available to respond to appropriate
questions from the shareholders.
Unless marked to the contrary, proxies received will be voted "FOR" the
ratification of the appointment of Deloitte & Touche as the independent auditors
for the Company for the fiscal year ending December 31, 1997.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE AS THE
COMPANY'S INDEPENDENT AUDITORS
OTHER MATTERS
Annual Report and Financial Statements
The 1996 Annual Report of the Company, which includes its audited financial
statements for the fiscal year ended December 31, 1996, has accompanied or
preceded this Proxy Statement.
Section 16(a) Beneficial Ownership Reporting Compliance
Under the securities laws of the United States, the Company's directors,
executive officers, and any persons holding more than ten percent of the
Company's Common Stock ("Reporting Persons") are required to report, to the
Securities Exchange Commission and to The Nasdaq Stock Market, their initial
ownership of the Company's stock and any subsequent changes in that ownership.
Specific due dates for these reports have been established, and the Company is
required to disclose in this Proxy Statement any failure to file these reports
on a timely basis.
Based solely on its review of the copies of such reports received by it or
written representations from certain Reporting Persons that no Forms 3, 4 or 5
were required, the Company believes that during fiscal 1996, all Reporting
Persons complied with all applicable filing requirements.
Shareholder Proposals
Subject to Securities and Exchange Commission regulations, proposals of
shareholders intended to be presented at the 1998 Annual Meeting must be
received by the Secretary of the Company no later than December 18, 1997 to be
included in the Company's 1998 Proxy Statement.
Other Business
The Board of Directors knows of no other business which will be presented
at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, it is intended that proxies in the enclosed form will be voted
in respect thereof in accordance with the judgments of the persons voting the
proxies.
10
<PAGE>
It is important that the proxies be returned promptly and that your shares
be represented. Shareholders are urged to fill in, sign and promptly return the
accompanying form in the enclosed envelope.
By Order of the Board of Directors,
Raymond D. Zinn
President, Chief Executive Officer and
Chairman of the Board of Directors
April 17, 1997
San Jose, California
11
<PAGE>
PROXY
MICREL, INCORPORATED
1849 FORTUNE DRIVE
SAN JOSE, CA 95131
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON MAY 22 1997.
Raymond D. Zinn and Robert J. Barker, or any one of them, each with the
power of substitution, are hereby authorized to represent and vote the shares of
the undersigned, with all the powers which the undersigned would possess if
personally present, at the Annual Meeting of Shareholders of Micrel,
Incorporated (the "Company"), to be held on Thursday, May 22, 1997, and any
adjournment or postponement thereof.
Election of five directors (or if any nominee is not available for
election, such substitute as the Board of Directors or the proxy holders may
designate). Nominees: Raymond D. Zinn, Warren H. Muller, Larry L. Hansen,
George Kelly and Dale L. Peterson.
(Continued, and to be signed on the other side)
DETACH AND FOLD HERE
Micrel
Annual Shareholders Meeting
Thursday, May 22, 1997
10:00 am
1931 Fortune Drive
San Jose, CA 95131
IMPORTANT Reminder
Whether or not you plan to attend this meeting, your vote is important to us.
We urge you to complete, detach and mail the proxy card as soon as possible in
the enclosed envelope.
We look forward to seeing you at the meeting. On behalf of the management and
directors of Micrel, Incorporated, we want to thank you for your support.
<PAGE>
Please Mark
your votes [ X ]
as indicated
The Board of Directors recommends a vote FOR the election of Directors and FOR
proposals 2.
Shares represented by this proxy will be voted as directed by the shareholder.
If no such directions are indicated, the Proxies will have authority to vote
FOR the election of all directors, and FOR item 2.
FOR WITHHOLD
1. Election of Directors (see reverse): [ ] [ ]
FOR, except vote withheld from the following nominee(s):
- ---------------------------------------------------
- ---------------------------------------------------
2. To ratify the appointment of
Deloitte & Touche LLP as the Company's
independent auditors for the fiscal
year ending December 31, 1997:
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come
before the Annual Meeting.
MARK HERE FOR ADDRESS
CHANGE AND NOTE AT RIGHT [ ]
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED REPLY ENVELOPE.
Signature(s) Date 1997
----------------------------------------------- ----------
NOTE: Please sign exactly as your name appears herein. Joint owners should
each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
FOLD AND DETACH HERE
Travel Directions
to Micrel
(for meeting appointments)
From San Francisco Int'l Airport
or San Francisco via US 101:
Take US 101 south (towards San
Jose); exit Montague Expwy.;
right at Trade Zone Blvd.; immedi-
ate right at Ringwood Ave., left on
Fortune Dr.
From San Jose Int'l Airport: [MAP TO MICREL OFFICE
OFFICE DISPLAYED HERE]
Take Airport Parkway (becomes
Brokaw Rd. then Murphy Rd.); left
on Ringwood Ave.; right on
Fortune Dr.
From San Francisco via I-280
Take I-280 South (toward San
Jose); exit I-880 north (toward
Oakland); exit Montague Expwy.
east; right at Trade Zone Blvd.;
immediate right at Ringwood
Ave., left on Fortune Dr.
<PAGE>
