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:
[X] Preliminary proxy statement [ ] Confidential, For Use of the
Commission Only (as permitted
[ ] Definitive proxy statement by Rule 14a-6(e)(2))
[ ] 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:
_______________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction.
_______________________________________________________________________
(5) Total fee paid:
_______________________________________________________________________
[ ] Fee paid previously with preliminary materials:
_______________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of
its filing.
(1) Amount previously paid:
_______________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________
(3) Filing Party:
_______________________________________________________________________
(4) Date Filed:
_______________________________________________________________________
<PAGE>
MICREL, INCORPORATED
1849 Fortune Drive
San Jose, California 95131
Notice of Annual Meeting of Shareholders
To Be Held May 25, 2000
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 25, 2000 at 12:00 p.m. local
time, for the following purposes:
1. ELECTION OF DIRECTORS. To elect five directors of the Company to
serve until the 2001 annual meeting or until their successors are
duly elected and qualified;
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION. To approve an amendment to the Company's Restated
Articles of Incorporation to increase the number of shares of
Common Stock which the Company is authorized to issue from
100,000,000 shares to 250,000,000 shares.
3. 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, 2000; and
4. 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, 2000 as
the record date for determining the shareholders entitled to notice of and to
vote at the 2000 Annual Meeting and any adjournment or postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING 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,
/s/ Raymond D. Zinn
Raymond D. Zinn
President, Chief Executive Officer
and Chairman of the Board of Directors
San Jose, California
April 18, 2000
<PAGE>
MICREL, INCORPORATED
1849 Fortune Drive
San Jose, California 95131
_______________
PROXY STATEMENT
_______________
Annual Meeting of Shareholders
May 25, 2000
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 12:00
local time, at the Company's offices at 1931 Fortune Drive, San Jose,
California 95131, on May 25, 2000, and at any adjournment or postponement
thereof. Only holders of the Company's Common Stock of record on April 3,
2000 will be entitled to vote. Holders of Common Stock are entitled to one
vote for each share held. There is no cumulative voting. At the close of
business on the record date, there were approximately __________ shares of
the Company's Common Stock outstanding. All Common Stock numbers in this
Proxy Statement have been adjusted to reflect the effect of the one-for-one
stock dividend declared by the Company payable September 15, 1999.
Votes cast by proxy or in person at the Annual Meeting will be tabulated
by the Inspector of Elections. The Inspector of Elections will also
determine whether or not a quorum is present. The affirmative vote of a
majority of shares represented and voting at a duly held meeting at which a
quorum is present (which shares voting affirmatively also constitute at least
a majority of the required quorum) is required under California law for
approval of Proposals No. 1 and No. 3 presented to shareholders. In general,
California law also provides that a quorum consists of a majority of the
shares entitled to vote, represented either in person or by proxy. The
Inspector of Elections will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum but as
not voting for purposes of determining the approval of Proposal No. 1 and
No. 3 submitted to the shareholders for a vote. Any proxy which is returned
using the form of proxy enclosed and which is not marked as to a particular
item will be voted FOR the election of directors, FOR approval of the other
proposals in the enclosed proxy statement and as the proxy holders deem
advisable on other matters that may come before the meeting, as the case may
be, with respect to the particular item not marked. If a broker indicates on
the enclosed proxy or its substitute that it does not have discretionary
authority as to certain shares to vote on a particular matter ("broker
non-votes"), those shares will be considered present and entitled to vote for
purposes of determining a quorum but not as voting for purposes of
determining the approval of Proposal No. 1 and No. 3. Abstentions and broker
non-votes will have the effect as a vote against Proposal No. 2. While there
is no definitive specific statutory or case law authority in California
concerning the proper treatment of abstentions and broker non-votes, the
Company believes that the tabulation procedures to be followed by the
Inspector of Elections are consistent with the general statutory requirements
in California concerning voting of shares and determination of a quorum.
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, by submitting 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.
This Proxy Statement and the accompanying proxy were first sent by mail
to shareholders on or about April 18, 2000. 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.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As set by the Board of Directors in accordance with 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 2001 annual
meeting or until their successors are duly elected and qualified. The
nominees receiving the highest number of affirmative votes will be 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 62, 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 61, 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. In 1999, Mr. Muller
assumed the position of Chief Technology Officer. 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 71, 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. and Electro Scientific Industries, Inc.
George Kelly, age 65, joined the Company's Board of Directors in June
1994. He is a retired partner of Deloitte & Touche LLP, where he worked for
thirty years until his retirement in June 1989. He is also serves on the
Board of Directors of Ion Systems, Inc. and Business Resource Group.
Dale L. Peterson, age 64, joined the Company's Board of Directors in June
1994. He is retired from Signal Technology Corp., where he served in the
capacities of President, Chief Executive Officer and Chairman of the Board of
Directors during his employment which commenced in 1989.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR THE ELECTION OF EACH NAMED NOMINEE
2
<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
March 31, 2000, 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.
5% SHAREHOLDERS, DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned (1)
---------------------------------
<S> <C> <C>
5% Shareholders, Directors, Nominees
- ------------------------------------
and Named Executive Officers Number Percent (2)
---------------------------- ---------- -----------
Raymond D. Zinn (3)....................
Warren H. Muller (4)...................
Capital Research & Management Company
333 South Hope Street, 55th Floor
Los Angeles, CA 90071(5).........
Putnam Investments, Inc.
One Post Office Square
Boston, MA 02109(6)..............
Barry Small..................
Dale L. Peterson(8)....................
Robert Whelton(9)......................
Larry L. Hansen(10)....................
George Kelly(11).......................
George Anderl..........................
All executive officers and directors
as a group (9 persons)(12)........
- ----------------------
*Less than 1%
(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 March
31, 2000 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 _________ shares outstanding
as of March 31, 2000.
(3) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(4) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(5) Based on a Schedule 13G dated February 10, 2000, Capital Research
& Management Company has sole dispositive power with respect to
3,126,400 shares of the Company's Common Stock as of December 31, 1999.
(6) Based on a Schedule 13G dated January 26, 1999 Putnam Investments, Inc.
has shared voting power and shared dispositive power with respect to
1,213,950 shares of the Company's Common Stock.
(7) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(8) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(9) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(10) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
(11) Represents _________ shares held of record by the Kelly Family Trust of
which Mr. Kelly is a trustee. Includes _________ shares subject to
stock options exercisable within 60 days of March 31, 2000.
(12) Includes _________ shares subject to stock options exercisable within
60 days of March 31, 2000.
</TABLE>
3
<PAGE>
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 five regularly scheduled or special meetings
during the fiscal year ended December 31, 1999 (the "Fiscal Year"). Each
current member of the Board of Directors 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. Kelly and
Hansen, 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 four times during the Fiscal Year.
Compensation Committee. The Compensation Committee consists of Messrs.
Kelly and Peterson. 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 two
times during the Fiscal Year.
Employment Agreements
None of the Named Executive Officers has an employment agreement with the
Company.
Compensation of Directors
Non-employee directors of the Company receive $1,000 in compensation for
each Board of Directors meeting attended and $1,000 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,
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
(which number was not increased as a result of the stock dividend) 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 over time. On May 27, 1999,
Messrs. Kelly, Hansen and Peterson received automatic stock option grants
under the Company's 1994 Option Plan for 5,000 (which number was subsequently
adjusted for the stock dividend to 10,000) shares each of the Company's
Common Stock at an exercise price of $55.875 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 which follows shall not be
incorporated by reference into any such filings, nor shall they be deemed to
4
<PAGE>
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. 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 1999
was $294,754. Mr. Zinn's base salary for 1999 was established, in part, by
comparing the base salaries of chief 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.
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 of 1986, as
amended, 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 2000
will exceed the $1 million limit per officer. Option grants under the 1994
Stock Option Plan are intended to qualify as performance-based compensation
not subject to the $1 million limitation.
5
<PAGE>
COMPENSATION COMMITTEE
Larry L. Hansen, Chairman
George Kelly
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table sets forth the annual compensation earned during the
years ended December 31, 1999, 1998 and 1997 by the Company's Chief Executive
Officer and each of the Named Executive Officers:
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Long-Term
Compensation Compensation
-------------------------- ------------
Securities All Other
Name and Salary Bonus Underlying Compensation
Principal Position Year ($) ($)(1) Options(#) ($)(2)
- ------------------ ---- -------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Raymond D. Zinn,.... 1999 $294,754 $400,000 250,000 $ 6,375
President, Chief 1998 277,240 300,000 -- 8,972
Executive Officer 1997 268,406 300,000 -- 18,072
and Chairman of
the Board
George Anderl,...... 1999 232,933(3) 50,000 90,000 2,075
Vice President, 1998 210,909(4) 53,000 -- 1,665
Sales and 1997 161,687 129,800 -- 1,670
Marketing
Robert Whelton,(5).. 1999 203,849 100,000 -- 2,075
Executive 1998 200,000 125,000 -- 1,665
Vice President, 1997 -- -- 200,000 --
Operations
Barry Small,(6)..... 1999 169,009 100,000 -- 1,337
Vice President 1998 110,154 -- 200,000 1,133
Wafer Fabrication
and Manufacturing
Warren H. Muller,... 1999 199,912 60,000 90,000 8,075
Vice President 1998 187,461 100,000 -- 7,665
and Secretary 1997 185,163 100,000 -- 7,729
_______________
(1) All bonuses for a particular year reflect amounts earned in that year
whether or not paid in that or the following year.
(2) Represents premiums paid on term life insurance and in 1998, automobile
allowances of $6,375 for Mr. Zinn and $6,000 for Mr. Muller, and in
1999, an automobile allowance of $6,000 for Mr. Muller.
(3) Includes commissions of $62,724.
(4) Includes commissions of $57,467.
(5) Mr. Whelton joined in Company in December, 1997. He commenced
receiving salary effective January 1, 1998.
(6) Mr. Small joined the Company on April 21, 1998.
</TABLE>
6
<PAGE>
Option Grants In Last Fiscal Year
The following table provides certain information with respect to the
grant of stock options under the Company's 1994 Option Plan to each of the
Named Executive Officers during the fiscal year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Potential Realizable
Securities % of Total Value at Assumed
Underlying Options to Exercise Annual Rate of Stock
Options Employees in Price Per Expiration Price Appreciation
Name Granted(1) Fiscal Year(2) Share (3) Date for Option Term(5)
- ---------------- ------------ -------------- ---------- ---------- ---------------------
5% 10%
--------- ----------
<S> <C> <C> <C> <C> <C> <C>
Raymond D. Zinn... 250,000 12.12% $24.1875 2/22/09 $3,802,847 $9,637,161
George Anderl..... 90,000 4.36 24.1875 2/22/09 1,369,025 3,469,378
Robert Whelton.... -- -- -- -- -- --
Barry Small....... -- -- -- -- -- --
Warren H. Muller.. 90,000 4.36 24.1875 2/22/09 1,369,025 3,469,378
- ------------------
(1) Each of these options vests over five years at a rate of 20% of the
shares subject to the option per year and has a ten-year term.
(2) Based on a total of 2,062,750 options granted to employees of the
Company in 1999, including the Named Executive Officers.
(3) The exercise price per share of options granted represented the fair
market value of the underlying shares of Common Stock on the date the
options were granted.
(4) The potential realizable value portion of the foregoing table
illustrates value that might be realized upon exercise of the options
immediately prior to the expiration of their terms, assuming the
specified compounded rates of appreciation on the Company's Common
Stock over the term of the options. Actual gains, if any, on stock
option exercise are dependent upon a number of factors, including the
future performance of the Common Stock, overall stock market
conditions, and the timing of option exercises, if any. There can be
no assurance that amounts reflected in this table will be achieved.
</TABLE>
7
<PAGE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Values
The following table sets forth for each of the Named Executive Officers
certain information concerning the number of shares subject to both
exercisable and unexercisable stock options as of December 31, 1999. Also
reported are values for "in-the-money" options that represent the positive
spread between the respective exercise prices of outstanding stock options
and the fair market value of the Company's Common Stock as of December 31,
1999.
<TABLE>
<CAPTION>
Number of Securities Value of
Underlying Unexercised Unexercised
Options at In-the-Money Options at
December 31, 1999(#) December 31, 1999($)(2)
--------------------------- --------------------------
Shares
Acquired Value
Name on Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
------- ----------------- ------------- ------------ --------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Raymond D. Zinn.... -- -- 84,000 306,000 $4,465,062 $11,164,333
George Anderl...... 15,000 $ 650,938 65,000 250,000 3,477,533 11,507,625
Robert Whelton..... 80,000 1,266,255 80,000 240,000 3,555,040 10,665,120
Barry Small........ -- -- 40,000 160,000 1,569,400 6,277,600
Warren H. Muller... -- -- 36,000 114,000 1,913,598 4,223,277
_________________
(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, 1999 ($56.9380
per share) and the exercise price of the Named Executive Officers'
respective options.
</TABLE>
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, 1999), with the percentage change in
the cumulative total return for The Nasdaq Stock Market (U.S. Companies) and
the Hambrecht & 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>
Micrel, Inc.
H&Q Technology Index
Nasdaq Stock Market - U.S. Index
PROPOSAL NO. 2
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
In February, 2000, the Board of Directors unanimously approved an
amendment to increase the aggregate number of shares of Common Stock which
the Company is authorized to issue from 100,000,000 shares to 250,000,000
shares (the "Amendment"). No increase in the number of shares of Preferred
stock of the Company, currently 5,000,000 shares, is proposed or anticipated.
If approved by the shareholders, the Amendment will become effective upon
the filing of a Certificate of Amendment of Articles of Incorporation with
the California Secretary of State. The Amendment would change Section 3.1 of
Article III of the Company's Articles of Incorporation to read in its
entirety as follows:
"3.1. Authorized Capital Stock. This Corporation is authorized to
issue two classes of stock to be designated, respectively, "Common Stock"
and "Preferred Stock." The total number of shares which the Corporation
is authorized to issue is two hundred fifty-five million (255,000,000)
shares. Two hundred fifty million (250,000,000) shares shall be Common
Stock, no par value, and five million (5,000,000) shares shall be
Preferred Stock, no par value."
Purpose and Effect of the Amendment
As of the Record Date, of the Company's 100,000,000 authorized shares of
Common Stock, ___________ shares were issued and outstanding, and ___________
shares were subject to outstanding options granted pursuant to the Company's
current stock option plans and stock purchase plan (together, the "Plans").
The Board of Directors believes that it is in the Company's best interests to
increase the number of authorized shares of Common Stock in order to have
additional shares available to meet the Company's future business needs as
they arise. Among other things, the increase will provide shares to effect
future stock dividends or stock splits, to raise additional capital through
the sale of securities, to acquire another company or its business or assets
through the issuance of securities, or to establish a strategic relationship
with a corporate partner through the exchange of securities.
If the proposed Amendment is adopted, the aggregate number of authorized
shares of Common Stock will be increased from 100,000,000 shares to
250,000,000 shares. If the Amendment were adopted, as of the Record Date,
__________ shares would be available for issuance by the Board of Directors,
without any further shareholder approval, except for certain issuance of
shares which require shareholder approval in accordance with law, regulation
or stock exchange rule. The Board of Directors believes that the
availability of such additional shares will provide the Company with the
flexibility to issue common stock for the purposes stated above without
further action by the Company's shareholders. If the Amendment is not
approved, the number of authorized shares will remain the same and management
will have limited flexibility to do the things described above. The Board of
Directors has no immediate plans, understandings, agreements or commitments
to issue any of the additional shares of Common Stock.
9
<PAGE>
There will be no change in the voting rights, dividend rights,
liquidation rights, preemptive rights or any other shareholder rights as a
result of the proposed Amendment. The additional shares might be issued at
such times and under such circumstances as to have a dilutive effect on
earnings per share and on the equity ownership of the present holders of
Common Stock.
Potential Anti-Takeover Effect
The proposed Amendment could, under certain circumstances, have an anti-
takeover effect, although this is not the intention of the proposal. The
increased number of authorized shares of Common Stock could discourage, or be
used to impede, an attempt to acquire or otherwise change control of the
Company. The private placement of shares of Common Stock into "friendly"
hands, for example, could dilute the voting strength of a party seeking
control of the Company. Furthermore, many companies have issued warrants or
other rights to acquire additional shares of Common Stock to the holders of
its Common Stock to discourage or defeat unsolicited share accumulation
programs and acquisition proposals, which programs or proposals may be viewed
by the Board of Directors as not in the best interest of the Company and its
shareholders. Although the Company has no present intent to use the
additional authorized shares of Common Stock for such purposes, if this
proposal is adopted, more capital stock of the Company would be available for
such purposes than is currently available.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting, assuming a
quorum is present, is necessary for approval of the Amendment. Therefore,
abstentions and broker non-votes (which may occur if a beneficial owner of
stock where shares are held in a brokerage or bank account fails to provide
the broker or the bank voting instructions as to such shares) effectively
count as votes against the Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT.
PROPOSAL NO. 3
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, 2000. 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, 2000.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE AS THE
COMPANY'S INDEPENDENT AUDITORS
10
<PAGE>
OTHER MATTERS
Annual Report and Financial Statements
The 1999 Annual Report of the Company, which includes its audited
financial statements for the fiscal year ended December 31, 1999, 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 and 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 1999, all
Reporting Persons complied with all applicable filing requirements, except
one Form 4 filing covering an option grant to Dale L. Peterson, one Form 4
filing covering an option grant to George Kelly, one Form 4 filing covering
an option grant to Larry Hansen, and one Form 3 filing reporting the
appointment of Carlos Mejia, Jr. as Vice President of Human Resources were
inadvertently filed late.
Shareholder Proposals
Requirements for Shareholder Proposals to be Brought Before an Annual
Meeting. For shareholder proposals to be considered properly brought before
an annual meeting by a shareholder, the shareholder must have given timely
notice therefor in writing to the Secretary of the Company. To be timely, a
shareholder's notice must be delivered to or mailed and received by the
Secretary of the Company at the principal executive offices of the Company,
not earlier than ___________________ nor later than ___________________. A
shareholder's notice to the Secretary must set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (ii) the
name and record address of the shareholder proposing such business, (iii) the
class and number of shares of the Company which are beneficially owned by the
shareholder, and (iv) any material interest of the shareholder in such
business.
Requirements for Shareholder Proposals to be Considered for Inclusion in
the Company's Proxy Materials. Shareholder proposals submitted pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934 and intended to be
presented at the Company's 2001 annual meeting of shareholders must be
received by the Company not later than ___________________ in order to be
considered for inclusion in the Company's proxy materials for that meeting.
11
<PAGE>
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.
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 proxy card 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 18, 2000
San Jose, California
12
<PAGE>
[FORM OF FRONT OF PROXY CARD]
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 25, 2000.
Raymond D. Zinn and Richard D. Crowley, Jr., or either 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 25, 2000,
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.
<PAGE>
[FORM OF BACK OF PROXY CARD]
Shares represented by this MARK HERE
proxy will be voted as directed FOR ADDRESS [ ]
by the shareholder. If no such CHANGE AND
directions are indicated, the NOTE AT RIGHT
Proxies will have authority to
vote FOR the election of all
directors, and FOR proposals
2 and 3.
__________________________________
The Board of Directors Please sign exactly as your name
recommends a vote FOR the appears herein. Joint owners should
election of Directors and each sign. When signing as attorney,
FOR proposals 2 and 3 . executor, administrator, trustee or
__________________________________ guardian, please give full title as .
such.
1. Election of Directors (see
reverse): Signature _______________ Date _______
[ ] FOR [ ] WITHHELD
FOR, except vote withheld Signature _______________ Date _______
from the following nominee(s):
______________________________ PLEASE MARK, SIGN, DATE AND RETURN
PROXY CARD USING THE ENCLOSED REPLY
______________________________ ENVELOPE.
2. Approval of an amendment to
the Company's Restated
Articles of Incorporation to
increase the number of shares
of Common Stock which the
Company is authorized to issue
from 100,000,000 shares to
250,000,000 shares.
[ ]FOR [ ]AGAINST [ ] ABSTAIN
3. To ratify the appointment of
Deloitte & Touche LLP as the
Company's independent auditors
for the fiscal year ending
December 31, 2000:
[ ]FOR [ ]AGAINST [ ] ABSTAIN
4. In their discretion, the
Proxies are authorized to
vote upon such other business
as may properly come before
the Annual Meeting.
Annual Shareholder Meeting
Thursday, May 27, 1999
12:00 p.m.
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>
