Filed by Micrel, Incorporated
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company:
Micrel, Incorporated
(Commission File No. 001-34020)
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Presented by: Steve Sanghi President and CEO
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[] Cautionary Statement:
Statements about the expected timing, financial impact and effects of the
proposed transaction, and other statements in this presentation that are not
historical facts, are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements involve risks and uncertainties that could cause actual
results to differ materially from such forward looking statements. Such risks
and uncertainties include the actual timing of the closing of the acquisition,
the satisfaction of the conditions to closing in the acquisition agreement, any
termination of the acquisition agreement, the effect of the acquisition on
Microchip's and Micrel's existing relationships with customers, employees and
vendors and on Microchip's and Micrel's respective operating results and
businesses; general economic, industry or political conditions in the U. S. or
internationally; and the risks described from time to time in SEC reports
including filings on Forms 10-K, 10-Q and 8-K. You can obtain copies of
applicable Forms 10-K, 10-Q and 8- K and other relevant documents for free
at Microchip's website
(www. microchip. com), at Micrel's website (www. Micrel. com) or the
SEC's website (www. sec. gov) or from commercial document retrieval
services. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date such statements
are made. We do not undertake any obligation to publicly update any
forward-looking statements to reflect events, circumstances or new information
after the date hereof.
[] Additional Information and Where to Find It
Microchip will file a Registration Statement on Form S-4 that will include a
proxy statement of Micrel in connection with the acquisition transaction.
Investors and security holders are urged to read such document when it becomes
available because it will contain important information about the transaction.
Investors and security holders may obtain free copies of such document (when it
becomes available) and other documents filed with the SEC at the SEC's web site
at www. sec. gov. Microchip, Micrel and their directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
shareholders of Micrel in connection with the acquisition transaction.
Information regarding the special interests of these directors and executive
officers in the transaction will be included in the proxy statement/prospectus
described above. Additional information regarding the directors and executive
officers of Microchip is also included in Microchip's proxy statement for its
2014 Annual Meeting of Stockholders, which was filed with the SEC on July 18,
2014. Additional information regarding the directors and executive officers of
Micrel is also included in Micrel's Annual Report on Form 10-K/A, which was
filed with the SEC on April 24, 2015. These documents are available free of
charge at the SEC's web site at www. sec. gov and as described above.
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Welcome to Microchip!!!
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Corporate Overview
[] Leading provider of:
[] High-performance, field-programmable RISC Microcontrollers and Digital
Signal Controllers
[] Mixed-Signal, Analog and Interface products
[] Wireless and RF products
[] Non-volatile EEPROM and Flash Memory products
[] Flash IP solutions
[] ~ $2.2 Billion revenue run rate [] ~ 9,500 employees worldwide
[] Headquartered near Phoenix in Chandler, AZ
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Annual Net Sales Growth
[] 98 consecutive quarters of profitability
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Worldwide Technical Support Centers
Atlanta Austin Boston Chicago Cleveland Dallas Detroit Kokomo Los Angeles New
York Phoenix San Jose Toronto
Copenhagen Drunen Dublin Haan Karlsruhe London Madrid Milan Munich Padova Paris
Pforzheim Tel Aviv Wels
Bangalore Bangkok Beijing Chengdu Chongqing Hangzhou Hong Kong Hsinchu Kuala
Lumpur New Delhi Penang Pune
Kaohsiung Manila Nanjing Osaka Qingdao Seoul Daegu Shanghai Shenyang Shenzhen
Singapore Taipei Tokyo Wuhan Xiamen Xian Zhuhai
Sao Paulo
Johannesburg
Sydney Melbourne
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Global Development Centers
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Worldwide Manufacturing
Oregon, USA Fab 4 Arizona, USA
Corporate Headquarters and Fab 2
Bangkok, Thailand Test and Assembly
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Worldwide 8-Bit Microcontroller Market Share (Dollars)
1991 1996 1998 2001 2005 2006-9 2010 2014
No. Rank Rank Rank Rank Rank Rank Rank Rank
--- ----------- ---------- ---------- ---------- ---------- --------- ----------------------------- ---------
1 Motorola Motorola Motorola Motorola Motorola Microchip Renesas Microchip
2 Intel NEC NEC Hitachi Renesas NEC Microchip Renesas
3 Philips Philips ST-Micro NEC Microchip ST-Micro Atmel NXP
4 Mitsubishi Hitachi Philips Microchip NEC Freescale ST-Micro Atmel
5 NEC Mitsubishi Hitachi ST-Micro ST-Micro Atmel Samsung ST-Micro
6 Hitachi Toshiba Mitsubishi Philips Atmel Renesas Freescale Freescale
7 Toshiba Matsushita Microchip Toshiba Toshiba NXP NXP Cypress
8 Siemens SGS-Thomson Toshiba Atmel Philips Cypress Cypress Datang
9 TI Intel Siemens Matsushita Fujitsu Sony Panasonic Si Labs
10 Matsushita Microchip TI Sanyo Infineon Fujitsu Fujitsu Samsung
11 National Siemens Fujitsu Samsung Sanyo Panasonic Datang CEC Huada
12 SGS-Thomson Fujitsu Sanyo Mitsubishi Samsung Toshiba NEC (1Q) Holtek
13 Ricoh TI Matsushita Infineon Matsushita Samsung Sony Spansion
14 MHS Sony Atmel Sony Sony Datang Toshiba Tongfang
15 IIT Zilog Zilog TI Sunplus Si Labs Si Labs SHIC
16 Sharp Sharp Sharp Fujitsu Micronas Holtek JSC Panasonic
17 Fujitsu Temic Sony Sunplus Novatek Infineon Holtek Sony
18 Oki Sanyo Intel Zilog Intel Elan Infineon SH Fudan
19 Zilog National National Novatek Holtek Winbond Sonix Infineon
20 Sony Oki LG Semi Micronas Winbond Denso Elan Ixys
--- -----------
23 Microchip Based on dollar shipment volume 1991-2014, Source: Gartner and Microchip
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2015 Embedded Market Study*
*Preliminary Results
Which of the following 8-bit chip families would you consider for your next
embedded project?
Those with 100MHz Clock Speed
Microchip PIC
Atmel AVR
STMicro ST6, ST7, ST8
Freescale HC**
Arduino using Atmel AVR
NXP / Philips P80x, P87x, P89x
Renesas H8,
CypressPSoC
SiLabs 80xx
Atmel 80xx
Intel 80xx, '251
TI TMS370, 7000
Xilinx PicoBlaze
Altera soft core
Zilog Z8, Z80, Z180, eZ80
Infineon XC800, C500
Maxim 80xx
Parallax
Digi /Rabbit 2000, 3000
Toshiba
Other (specify)
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CONFIDENTIAL -- NOT FOR DISTRIBUTION OUTSIDE MICROCHIP
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Worldwide 16-Bit Microcontroller Market Share (Dollars)
2004 2006 2008 2009 2010 2011 2012 2014
No. Rank Rank Rank Rank Rank Rank Rank Rank
--- ---------- ---------- ---------- ---------- ------------- ----------- ------------------------ -----------
1 Renesas Renesas Renesas Renesas Renesas Renesas Renesas Renesas
2 Infineon Infineon Infineon Infineon Infineon Infineon Infineon Infineon
3 Freescale Freescale Samsung TI TI TI TI TI
4 TI Fujitsu TI Samsung Samsung Freescale Freescale Freescale
5 NEC TI Freescale Fujitsu Freescale Fujitsu Fujitsu Microchip
6 Matsushita Intel Fujitsu Freescale Fujitsu Toshiba Samsung Spansion
7 Toshiba Toshiba Toshiba Toshiba Toshiba Samsung Microchip Spansion
8 Fujitsu NEC Intel NEC Microchip Microchip Toshiba Toshiba
9 Intel Sunplus NEC Intel Intel Intel Intel INSIDE
10 STMicro Sony Sony Microchip Sony Sony INSIDE EM Micro
11 Oki NXP Panasonic Panasonic JSC Sitronics JSC Sony NXP
12 Sony Micronas NXP Sony Sunplus I Winbond CEC Huada Sunplus
13 Micronas Winbond Winbond Winbond Winbond Ixys JSC Sony
14 Sunplus Matsushita Microchip Sunplus I NXP Micronas EM Micro Ixys
15 Winbond Microchip Micronas Micronas Micronas Seiko Epson SH Fudan Maxim
16 Microchip Samsung Sunplus I NXP Sunplus MM Shenzhen St Sunplus Datang
17 Samsung Oki Sunplus MM Sunplus MM Seiko Epson Sunplus Datang CEC Huada
18 Philips National Sharp Seiko Panasonic Rohm Winbond SSM
19 Magnachip Sharp Rohm Sharp Rohm Panasonic Ixys Seiko Epson
20 Sharp STMicro Seiko Rohm Seiko Epson RTI Group
Based on dollar shipment volume 2004-2014, Source: Gartner and Microchip
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2015 Embedded Market Study*
*Preliminary Results
Which of the following 16-bit chip families would you consider for your next
embedded project?
Those with 100MHz Clock Speed
Microchip PIC24 / dsPIC
TI MSP430
STMicro ST9, ST10
Freescale HC16
Freescale HC12
Renesas RL78
Renesas R8C
Intel 8086, '186, '286
Infineon XE166, XC2000, XC166, C166
AMD 186, '188
Maxim
Zilog Z180, Z380
Other (specify)
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CONFIDENTIAL -- NOT FOR DISTRIBUTION OUTSIDE MICROCHIP
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Worldwide 32-bit Microcontroller Market Share (Dollars)
2010 2011 2012 2013 2014
No. Rank Rank Rank Rank Rank
--- ----------- ----------- ------------ ---------- -----------------------------------------------
1 Renesas Renesas Renesas Renesas Renesas
2 Freescale Freescale Freescale Freescale Freescale
3 TI TI ST-Micro ST-Micro ST-Micro
4 ST-Micro ST-Micro TI TI TI
5 Denso NXP Atmel Atmel Atmel
6 Fujitsu Denso Denso Infineon NXP
7 NXP Atmel Infineon Denso Infineon
8 Atmel Fujitsu NXP NXP Denso
9 Toshiba Infineon Toshiba Melfas Microchip
10 Infineon Toshiba Fujitsu Toshiba Toshiba
11 Panasonic Panasonic Panasonic Microchip Spansion
12 EM Micro EM Micro Microchip CEC-Huada Cypress
13 Rohm Rohm MELFAS Fujitsu Samsung
14 JSC JSC Samsung Spansion Melfas
15 Shenzhen St Microchip Rohm Cypress Winbond
16 Huahong Shenzhen St Energy Micro Panasonic Panasonic
17 Seiko Epson Huahong CEC Huada SH Huahong Nationz Tech
18 Winbond Winbond Nationz SH Fudan CEC Huada
19 Microchip Seiko Epson SH Fudan Winbond Energy Micro
20 Samsung Samsung Cypress Datang Rohm
Based on dollar shipment volume 2010-2014, Source: Gartner and Microchip
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2015 Embedded Market Study*
*Preliminary Results
Which of the following 32-bit chip families would you consider for your next
embedded project?
Those with 100MHz Clock Speed
STMicro STM32 (ARM)
Microchip PIC 32-bit (MIPS)
NXP LPC (ARM)
FreescaleKinetis (ARM/Cortex-M4/M0)
Atmel SAMxx (ARM)
Atmel (AVR32)
Atmel AT91xx/ATSAMxx (ARM)
Arduino
Freescale i.MX (ARM)
TI Sitara (ARM)
TI TM4Cx (ARM)
Cypress PSOC 5 (ARM)
TI Tiva (ARM)
Xilinx Zynq (with dual ARM Cortex-A9)
TI C2000 MCUs
Renesas RX
Energy Micro EFM32
Atmel AT91xx
TI OMAP
Altera Nios II (soft core)
Xilinx MicroBlaze (soft-core)
Freescale 68K, ColdFire
SiLABS Precision32 (ARM)
TI Hercules (ARM)
Altera SoC-FPGA (with dual ARM Cortex-A9)
Intel Atom, Pentium, Celeron, Core 2, Core iX
Renesas RH850
Freescale PowerPC 55xx
Microsemi SmartFusion2 SoC FPGA (Cortex-M3)
Freescale PowerPC 5xx, 6xx
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CONFIDENTIAL -- NOT FOR DISTRIBUTION OUTSIDE MICROCHIP
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Worldwide Microcontroller Market Share (Dollars)
2003 2008 2009 2010 2011 2012 2013 2014
No. Rank Rank Rank Rank Rank Rank Rank Rank
--- ---------- --------- --------- ------------- ------------- --------- ------------------------- ---------
1 Renesas Renesas Renesas Renesas Renesas Renesas Renesas Renesas
2 Motorola NEC NEC Freescale Freescale Freescale Freescale Freescale
3 NEC Freescale Freescale Samsung TI Infineon ST-Micro ST-Micro
4 Matsushita Infineon Samsung Microchip Microchip Microchip Microchip Microchip
5 Infineon Samsung Microchip Atmel ST-Micro ST-Micro Infineon NXP
6 Fujitsu Microchip TI TI Atmel TI TI TI
7 Toshiba ST-Micro Infineon Infineon Infineon Atmel NXP Infineon
8 Microchip TI ST-Micro ST-Micro Fujitsu NXP Atmel Atmel
9 Samsung Fujitsu Fujitsu Fujitsu Toshiba Fujitsu Samsung Spansion
10 ST-Micro NXP NXP NXP Samsung Samsung Cypress Samsung
11 Atmel Toshina Atmel Toshiba NXP Toshiba Denso Cypress
12 TI Atmel Toshiba Denso Denso Cypress Toshiba Toshiba
13 Sanyo Panasonic Panasonic Cypress Sony Denso Fujitsu Denso
14 Philips Denso Denso Panasonic Panasonic Panasonic Spansion Datang
15 Intel Sony Cypress Sony Cypress Sony Melfas Si Labs
16 Sony Cypress Sony Datang JSC Sitronics Si Labs CEC-Huada CEU-Huada
17 Micronas Intel Datang JSC Sitronics Datang CEC Huada Si Labs Panasonic
18 Oki Micronas Intel Si-Labs Intel Melfas Panasonic SHIC
19 Sunplus Winbond Si-Labs Intel Huahong JSC Datang Tongfang
20 Winbond Si-Labs Rohm Si Labs INSIDE INSIDE Holtek
Based on dollar shipment volume 2003-2014, Source: Gartner and Microchip
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Total MCU (8/16/32) Market Share %
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Analog Yearly Revenue (k$)
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Microchip Analog Product Portfolio 100 Growth
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Analog and Interface Products
THERMAL POWER INTERFACE/
MIXED SIGNAL
MANAGEMENT MANAGEMENT CONNECTIVITY
Temperature Delta-Sigma
Sensors Linear Regulators A/D Converters CAN/LIN
Fan Control and Switching SAR A/D USB Hubs/PHYs/
Hardware Management Regulators Converters Switches
Digitally-Enhanced and Energy Ethernet Controller/
PWM Controllers Measurement ICs Switches/Bridges/PHYs
LINEAR
Charge Pump Current/DC Power Wireless
DC/DC Converters Measurement ICs
Single Supply
CMOS Op Amps Dual Slope/Display Real Time
Battery Management A/D Converters Clock/Calendar
Comparators
USB Port Power D/A Converters I/O Expanders
RF Power Amplifiers, Controller/ Power Delivery
PGA, SGA System Supervisors SAFETY AND
Digital Potentiometers
Voltage Detectors SECURITY
Power MOSFET V/F and F/V
MOTOR DRIVER ICs Smoke Detector ICs
Drivers Converters
Stepper and DC/ High-Speed Power Piezoelectric
Voltage References
3[] Brushless DC MOSFETs Horn Drivers
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Our Analog and Memory Enables Providing Complete Solutions
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SAM Expansion Focus Areas
[] eXtreme Low Power
[] Infotainment in Cars
[] Touch Sense
[] Touch Screen
[] Advanced Graphics
[] USB Interface
[] Ethernet Connectivity
[] Wireless Connectivity
[] Advanced Analog
[] AC/DC Power Supplies
[] Wireless Audio
[] Computing Embedded Controllers
[] Motor Control
[] Digital Power Supplies
[] Energy Efficient Lighting
[] Energy Harvesting and Monitoring
[] Made for iPod and iPhone
[] Medical Solutions
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MCHP Applications in S-Class
26 MCUs / 6 Analog / 6 Memory
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MCHP Applications in S-Class
6 MOST / 5 KLEER
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MCHP Applications in Hyundai Genesis
25 MCU / 21 Analog / 4 Memory / 3 MOST / 2 USB
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MCHP Content in Tesla Model - S
5 MCU / 9 Analog / 1 Memory / 2 USB
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Incremental Growth Through Acquisitions
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Broadening Microchip Solutions Through Acquisitions
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Hampshire RandE HI-TECH ZeroG SST Adv Silicon
Products
------------- ----------- ------------- -------------- ------------ -------------
Oct '08 Apr '09 Mar '09 Jan '10 Apr '10 Oct '10
------------- ----------- ------------- -------------- ------------ -------------
Touch Screen Security/ Development Low Power High-Density Motor Drive
Controllers Life-Safety Tools/ Embedded Flash/IP Products
ASICs Compiler Wi-Fi ([R])
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Broadening Microchip Solutions Through Acquisitions
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MMT LSS Ident Roving Networks SMSC
------------- ------- -------------------- ------------------------ -----------------
Feb '11 Oct '11 Feb '12 Apr '12 Aug '12
------------- ------- -------------------- ------------------------ -----------------
Assembly and High- Gesture Recognition Bluetooth([R]) and MOST([R])
Test Capacity Speed and Proximity Wi-Fi ([R]) Solutions USB and Ethernet
Expansion ADC Wireless Audio
PC Controllers
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Broadening Microchip Solutions Through Acquisitions
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Novocell EqcoLogic Supertex, Inc. ISSC
------------- ------------- --------------------- ------------------
Jun '13 Nov '13 April '14 July '14
------------- ------------- --------------------- ------------------
Non-Volatile- Equalizer and High-Voltage Analog Low power
Memory IP Coaxial and Mixed Signal Bluetooth([R]) and
Transceiver Advanced
Products Wireless
Solutions
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Our Vision: Be The Very Best Embedded Control Solutions Company Ever
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Mission
[] Microchip is a leading supplier of field- programmable embedded control
solutions by delivering the popular PIC[R] microcontrollers, a broad spectrum
of innovative analog and mixed- signal products, wired and wireless
connectivity products, related non-volatile memory products and Flash-IP
solutions.
[] In order to contribute to the ongoing success of our customers, shareholders
and employees, our mission is to focus resources on high value, high quality
products and services and to continuously improve all aspects of our business,
providing an industry leading return on investment.
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Guiding Values
[] Quality comes first [] Customers are our focus
[] Continuous improvement is essential [] Employees are our greatest strength
[] Products and technology are our foundation [] Total cycle times are
optimized [] Safety is never compromised [] Profits and growth provide for
everything we do [] Communication is vital [] Suppliers, representatives and
distributors are our partners [] Professional ethics are practiced
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Average % of Time MCHP Practices the Guiding Values: Employee Population*
2014 2013 2012
Values (Goal: 80%) Mean Mean Mean
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Quality Comes First 86.7% 86.0% 86.3%
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Customers Are Our Focus 89.5% 89.4% 89.8%
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Continuous Improvement Is Essential 86.1% 85.7% 85.7%
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Employees Are Our Greatest Strength 80.0% 79.7% 80.2%
----------------------------------------------- ----- ----- -----
Products And Technology Are Our Foundation 87.2% 86.2% 86.8%
----------------------------------------------- ----- ----- -----
Total Cycle Times Are Competitive 83.1% 83.0% 84.1%
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Safety Is Never Compromised 91.0% 90.6% 89.8%
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Profits And Growth Provide For Everything We Do 89.7% 89.7% 89.0%
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Communication Is Vital 85.5% 84.7% 84.3%
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Suppliers And Distributors Are Our Partners 87.7% 86.8% 87.3%
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Professional Ethics Are Practiced 87.5% 87.2% 86.7%
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*Excluding Thailand
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Mode % of Time MCHP Practices the Guiding Values: Employee Population*
2014 2013 2012
Values (Goal: 90%) Mode Mode Mode
----------------------------------------------- -------- ------- -------
Quality Comes First 100% 90% 90%
----------------------------------------------- -------- ------- -------
Customers Are Our Focus 100% 100% 100%
----------------------------------------------- -------- ------- -------
Continuous Improvement Is Essential 100% 100% 90%
----------------------------------------------- -------- ------- -------
Employees Are Our Greatest Strength 100% 100% 100%
----------------------------------------------- -------- ------- -------
Products And Technology Are Our Foundation 100% 100% 100%
----------------------------------------------- -------- ------- -------
Total Cycle Times Are Competitive 90% 90% 90%
----------------------------------------------- -------- ------- -------
Safety Is Never Compromised 100% 100% 100%
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Profits And Growth Provide For Everything We Do 100% 100% 100%
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Communication Is Vital 100% 100% 100%
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Suppliers And Distributors Are Our Partners 100% 90% 90%
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Professional Ethics Are Practiced 100% 100% 100%
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*Excluding Thailand 34
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Percent of Time Employee's Direct Supervisor Practices the Guiding Values
Expressed in Mean Scores Over Time
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Job Satisfaction
Rated by Employee Population*
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High and Good Combined: 84.8% (2013: 83.5%)
*Excluding Thailand
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Strategic Rationale
[] Adds a portfolio of Linear and Power Management products to Microchip's
Analog and Interface products.
[] Adds a portfolio of LAN Solutions to Microchip's solutions of connectivity
products.
[] Adds Timing and Communication products as a new set of products and business
unit to Microchip.
[] Microchip's manufacturing and sales channel strengths can extend the reach
of Micrel's solutions into new applications and markets.
[] Adds a portfolio of 400 patents to Microchip IP portfolio.
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Next Steps
[] Microchip and Micrel executives will work towards completing the acquisition
expeditiously.
[] We expect to close transaction in early CQ3, 2015.
[] We will form an integration team consisting of employees from both companies
who will outline the integration strategy in areas of IT, HR, Finance, legal,
operations, product lines and sales.
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Some Answers in the HR area
[] Your vested stock options will be cashed out at $14.00 stock price.
[] Your unvested stock options will be assumed by Microchip adjusted for the
exchange ratio.
[] # of options = Current number of options x Exchange ratio [] Option price=
Current option price/Exchange ratio [] The vesting schedule will remain the
same
[] Exchange ratio= 14/ Microchip's avg. closing stock price for the ten
trading days ending on the second to last trading day immediately prior to the
Effective Time.
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ESPP
[] Micrel's ESPP will be terminated.
[] We will develop a schedule for employees to join
Microchip's ESPP.
[] Microchip's U. S. ESPP plan has a two years look back period and a 15%
discount, and is therefore more generous than Micrel's ESPP plan.
[] Our international ESPP plan has a 6 months look back period and has a 15%
discount.
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401K
[] Micrel's 401K plan will be frozen.
[] The employees can enroll into Microchip's 401K plan.
[] Microchip's 401K plan has a match contribution by
Microchip.
[] Match is quarterly and is discretionary based on business results.
[] Target match is 50% of the first 4% of basic contributions.
[] Micrel's's 401K plan will undergo a typical IRS audit.
Once approved, you will have the option to distribute or roll your monies into
an IRA or Microchip 401(k) Plan.
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Microchip Community Awards
2011 Microchip Again Wins Alfred P. Sloan Award for Workplace Flexibility For
Fifth Consecutive Year, Company Receives National Recognition for Business
Practices
Microchip Technology has been selected as one of Arizona's "100 Best"
Companies! 2011
Dec 2010 Microchip Named Phoenix Business Journal's "Best Place to Work "for
Fourth Straight Year--
Bay Area News "Top Workplaces Program " for fourth straight year--- 2012 -2015
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Best Employers in Thailand 2009
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Microchip Training Awards
[] Criteria
[] Strategic application of training to drive business objectives [] Robust,
formal training program [] Training budget, resources and tuition reimbursement
[] Hours of training per employee
[] Top 125 in 2012 (Rank # 116)
[] Top 125 in 2013 (Rank #124) [] Top 125 in 2014 (Rank #107) [] Top 125 in
2015 (Rank #100)
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Source: Driving Excellence John Wiley and Sons, April 2006
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Microchip Summary
[] Leading provider of embedded control solutions
[] Leadership position shaped by our vision, unique culture and guiding values
[] Dedicated to the success of our customers, investors and employees
[] Excited to have Micrel join the team!
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Thank You!
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