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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from _____________ to ___________
COMMISSION FILE NUMBER 0-3698
SILICONIX INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 94-1527868
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2201 LAURELWOOD ROAD
SANTA CLARA, CALIFORNIA 95054
(Address of principal executive offices)
(408) 988-8000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $0.01 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes _X_ No___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates is
$81,400,000, based upon the closing price for the registrant's Common Stock
on March 20, 1998 ($41.875).
The number of shares of the registrant's Common Stock, $0.01 par value,
outstanding at March 20, 1998 was 9,959,680.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Siliconix incorporated 1997 Annual Report to
Shareholders: Parts I, II, and IV.
2. Portions of the definitive Proxy Statement dated April 30, 1998 to be
filed with the Securities and Exchange Commission on or about April 30,
1998, pursuant to Section 14 of the Securities Exchange Act of 1934, in
connection with the 1998 Annual Meeting of Shareholders of Siliconix
incorporated: Part III.
PART I
ITEM 1. BUSINESS
GENERAL
Siliconix designs, markets, and manufactures power and analog semiconductor
products. The Company focuses on technologies and products for the
communications, computer, and automotive markets; additionally, many of the
Company's products are also used in instrumentation and industrial
applications.
Founded in 1962, Siliconix uses its advanced technology and applications
expertise to develop value-added products for power management and
conversion. These products serve two types of markets. The first type,
represented by the communications and computer markets, exhibits design
cycles as short as a few months and product life cycles as short as six to
twelve months, thus creating numerous new opportunities for the Company. The
other type, represented by the automotive market, exhibits long design
cycles, sometimes as much as four or five years, and product life cycles as
long or longer. Participation in both types of businesses helps the Company
balance growth opportunities with research and development investments
required to maintain technology leadership.
Siliconix was a member of TEMIC Semiconductors, a division of the
Daimler-Benz microelectronics consortium, for several years. On December 16,
1997, Daimler-Benz announced that it had agreed to sell the Semiconductor
Division of TEMIC, which included its 80.4% interest in Siliconix, to Vishay
Intertechnology, Inc. ("Vishay") of Malvern, Pennsylvania. The acquisition
was completed on March 2, 1998, and on that date, Vishay became the Company's
largest shareholder. The Company's products will continue to be marketed
with the Siliconix brand name under the Vishay umbrella.
Coincident with the acquisition of the majority interest in Siliconix by
Vishay, Richard J. Kulle stepped down as Siliconix President and CEO and was
replaced by Dr. King Owyang, formerly Executive Vice President, Technology &
Silicon Operations. Dr. Owyang has been employed by Siliconix for ten years
and served in his previous position for approximately six years. From the
beginning of his employment, Dr. Owyang led the technology advances which are
the foundation of Siliconix's growth and profitability.
PRODUCTS
All of the analog and power products produced by Siliconix can be divided
into two general classes: discrete devices and integrated circuits (ICs).
Discrete devices are active components that generate, control, regulate,
amplify, or switch electronic signals or energy. They must be interconnected
with other, passive components (E.G., resistors, capacitors, inductors, etc.)
to create an electronic circuit. ICs consist of a number of active and
passive components, interconnected on a single chip, that are intended to
perform a specific function.
The Company's discrete power MOSFETs (an acronym for "metal oxide
semiconductor field effect transistor") and power ICs are designed for
similar applications and can often be used together as chip sets with
complementary performance characteristics optimized for a specific
application.
Power MOSFETs are the Company's fastest growing products in terms of sales.
In this product line, Siliconix has focused on low-voltage products that are
prevalent in battery-operated products (E.G., notebook computers and cellular
phones) and in automotive systems. Siliconix has maintained technology
leadership in low-voltage, surface-mount power MOSFETs through advances in
both silicon technologies and product packaging. Advanced silicon process
technologies, such as the Company's "Trench" technology, offer very high cell
densities and low device on-resistance. These process technologies have been
coupled with innovative packaging techniques to create surface-mount product
families, such as LITTLE FOOT-Registered Trademark- power MOSFETs, that
2
provide customers with size and performance benefits as well as manufacturing
compatibility with digital integrated circuits.
Siliconix power ICs include power conversion and interface ICs, and motor
control ICs. The Company's power conversion and interface ICs are based on
low-voltage, mixed-signal silicon processes that offer customers higher
frequencies and greater efficiencies than competitive products. They are
used in applications where an input voltage from a battery or other supply
source must be switched or converted to a level that is compatible with logic
signals used by microprocessors and other digital components in the system.
The Company's motor control ICs are used to control motion in data storage
applications (E.G., optical and hard disk drives) and to control the speed of
small motors in office equipment (E.G., printers and copy machines).
The Company's mature product lines include discrete small-signal
transistors and signal processing ICs (I.E., analog switches and
multiplexers). The small-signal transistors range from junction field-effect
transistors ("JFETs"), Siliconix's original product line, which remain critical
for some applications, to newer transistor processes, such as the Company's
lateral DMOS process, which offer performance advantages over competitors'
similar product lines. The analog switches and multiplexers are primarily
used in instrumentation and industrial equipment that receives and/or outputs
real-world analog signals.
The following table shows net sales and the percentage of the Company's
net sales attributable to the product categories for the periods indicated
(dollars in thousands).
Years ended December 31
-----------------------
1997 1996 1995
---- ---- ----
Integrated Circuits $ 66,509 21% $ 65,135 24% $ 64,179 26%
Discrete Devices,
LITTLE FOOT and
LITE FOOT-Registered
Trademark- 255,042 79% 203,799 76% 186,112 74%
-------- ---- -------- ---- -------- ----
$321,551 100% $268,934 100% $250,291 100%
-------- ---- -------- ---- -------- ----
-------- ---- -------- ---- -------- ----
MANUFACTURING
The Company's manufacturing operations are strategically located to support
customer manufacturing locations, to cultivate growth markets, and to access
cost-effective engineering talent. All of the Company's manufacturing sites
use Statistical Process Control methods of total quality control and have ISO
9000 certification.
Siliconix fabricates wafers for its advanced power products at its Santa
Clara, California manufacturing headquarters, where the Company maintains a
Class 1 (clean room classification) six-inch wafer fab. Further capacity for
wafer fabrication of power products was added during 1997 in a Class 1
facility in Itzehoe, Germany. Wafers for analog switches and multiplexers are
fabricated in the Company's four-inch wafer fab in Santa Clara. In 1997,
fabrication of the Company's JFETs was transferred to a foundry in Beijing,
China.
Assembly and testing of the Company's products are performed in Company
facilities in Taiwan and Shanghai, China, and by subcontractors in the
Philippines and India. The Shanghai facility is a joint venture between
Siliconix and the Shanghai Institute of Metallurgy.
Raw materials used by the Company include single-crystal silicon wafers,
chemicals, gases, metal wire, and ceramic, plastic, and glass-to-metal
packages. Although these materials are generally available from two or more
3
sources, the industry has experienced difficulties in obtaining supplies of
some raw materials from time to time; such difficulties in the future could
adversely affect the Company's operations.
Government regulations impose various environmental controls on the
discharge of certain chemicals and gases used in the manufacturing process.
The Company believes that its activities substantially conform to present and
anticipated regulations and is constantly upgrading its Santa Clara facility
to ensure continued compliance with such regulations. In 1990, the Company
reached a settlement for cleanup of soil and groundwater at a site the
Company occupied prior to 1972, with the current owner of that site, and
settled a lawsuit against its insurance carriers in 1992 and 1993 with
respect to this matter. The Company also established a remedial activity to
remove soil and groundwater contamination at its Santa Clara site in 1990.
For details on these matters, see Item 3, Legal Proceedings. While the
Company has experienced only limited effects on its operations from
environmental regulations, there can be no assurance that changes in such
regulations will not impose the need for additional capital equipment or
other requirements.
SALES
From 1993 until the change of ownership, Siliconix sales were handled by
the sales organization of TEMIC Semiconductors, the semiconductor division of
the Daimler-Benz microelectronics group, which included Siliconix, Telefunken
Semiconductors, Matra MHS, and Dialog Semiconductor. Unifying the sales
activities for these four companies brought value to customers by allowing
them to deal with one entity for a broader range of their semiconductor
needs. Today, the Company's products are sold by the Vishay worldwide sales
organization, which consists of much of the same worldwide structure of sales
representatives and distributors that was established for TEMIC
Semiconductors.
The sales organizations are regionally based, functioning as agents that
earn a commission at a fixed percentage of sales and performing all
sales-related activities. The following table shows net sales and the
percentage of the Company's net sales on a geographic basis for the periods
indicated (dollars in thousands).
Years ended December 31
-----------------------
1997 1996 1995
---- ---- ----
North America $113,890 36% $ 89,596 33% $ 93,613 37%
Europe 90,480 28% 71,739 27% 64,897 26%
Japan 33,359 10% 51,065 19% 31,944 13%
Asia Pacific 83,822 26% 56,534 21% 59,837 24%
-------- ---- -------- ---- -------- ----
$321,551 100% $268,934 100% $250,291 100%
-------- ---- -------- ---- -------- ----
-------- ---- -------- ---- -------- ----
In 1997, a Japanese distributor accounted for 10% of the Company's net
sales. The Company markets its products in different geographic areas as
follows.
NORTH AMERICA: Sales are made by the North American field sales force and
manufacturer's representative organizations, the latter being compensated by
commissions only. Area sales managers coordinate these representatives and
the North American sales force. North American sales offices are located in
or near Santa Clara, California; Troy, Michigan; Basking Ridge, New Jersey;
and Dallas, Texas.
Sales not made directly to original equipment manufacturers are made
through distributors, which currently have approximately 200 locations
throughout the United States and Canada. Certain distributors are provided
with contractual protection for their inventory against reductions in
published prices and against product obsolescence.
4
EUROPE: Sales are made by the European sales force and manufacturer's
representative organizations. As in North America, sales not made directly
to the original equipment manufacturers are made through distributors, with
approximately 30 locations. The distributors are provided with certain
inventory obsolescence and price protections similar to those granted to
domestic distributors.
JAPAN: Sales in Japan are made by the Asia Pacific sales force.
ASIA PACIFIC: Sales are made in Hong Kong, Korea, Taiwan, The People's
Republic of China, and in Southeast Asia by the Asia Pacific sales force,
headquartered in Singapore. In these locations, as in the United States,
sales are made directly to original equipment manufacturers through field
sales engineers or through manufacturer's representatives. Direct sales
agents and representatives are compensated by commissions only.
Sales in the rest of the world are made through manufacturer's
representatives, stocking representatives, and distributors.
For further information, see Note 7 of Notes to Consolidated Financial
Statements, which is incorporated herein by reference.
ORDER BACKLOG
As of December 31, 1997, the backlog of orders booked was $74.1 million.
The backlog as of December 31, 1996 was $77.2 million. The Company includes
in backlog only open orders which have been released by the customer for
shipment in the calendar year 1998. The Company's customers encounter
uncertain and changing demand for their products. They typically order
products from the Company based on their forecasts. If demand falls below
customers' forecasts, or if customers do not control their inventory
effectively, they may cancel or reschedule their shipments previously ordered
from the Company, in many instances without the payment of any penalty.
Therefore, backlog is not necessarily indicative of sales for any future
period.
COMPETITION
The semiconductor industry is highly competitive. Many of the Company's
competitors are larger companies with greater financial resources and limited
dependency on semiconductor products as their sole source of sales and
earnings. The Company has been able to compete effectively by being
selective in its choice of products and markets, and by being a technology
leader in those areas. Through closely established customer relationships,
the Company acquires in-depth applications know-how for the markets it serves
and develops products that specifically address customer needs.
RESEARCH AND DEVELOPMENT
Research and development activities are directed toward expanding
technology leadership. Focus is on developing new products and processes,
and activities are ongoing to improve the cycle time from new product
development to product release. Total expenditures were $17.8 million in
1997, $20.8 million in 1996, and $19.1 million in 1995. Significant effort
has been expended on new power products and ICs where continued rapid market
growth is expected.
5
PATENTS AND LICENSES
Siliconix protects its technology leadership by securing patents on
proprietary products and processes. As of December 31, 1997, Siliconix owned
130 U.S. patents, covering primarily semiconductor device structures,
processes, and circuitry. Expiration dates for these patents range from 1998
to 2016. An additional eight patents have been allowed but not yet issued.
There were also 64 U.S. patent applications pending. The Company believes
that, as it increasingly utilizes these patents in the design and manufacture
of its products, its royalty obligations will decrease significantly. See
Note 8 of Notes to Consolidated Financial Statements.
EMPLOYEES
In the last three years, the total number of employees has remained
relatively flat, with only key positions focused on target growth areas being
added. On December 31, 1997, the Company employed 1,266 people, of whom 847
were employed in the United States, 402 in East Asia, and 17 in Europe.
There are no collective bargaining agreements between the Company and its
employees, and there have been no work stoppages due to labor difficulties.
The Company considers its relations with its employees to be excellent.
EXECUTIVE OFFICERS
The following sets forth the name, age, offices presently held, business
experience, and principal occupation of the Company's executive officers:
Name Office Presently Held
---- ---------------------
King Owyang President and Chief Executive Officer
Juergen F. Biehn Senior Vice President and Chief Financial Officer
John Cox Vice President, Worldwide Environmental, Health & Safety Affairs
Dr. Owyang, age 52, joined the Company in January 1988 as a divisional Vice
President of Research and Development. He assumed additional responsibility
for Corporate Reliability and Quality Assurance in April 1990. He became
Vice President, Engineering in May 1990; Executive Vice President, Technology
and Silicon Operations in April 1992; and President and Chief Executive
Officer in March 1998. Prior to joining the Company, he served fourteen
years at General Electric Semiconductor Division, the last two years as
Manager of Research and Development Engineering of Power Integrated Circuit
Products. Dr. Owyang holds B.S. and Ph.D. degrees in Physics.
Mr. Biehn, age 56, joined the Company in March 1991 as Vice President and
Corporate Controller. He became Chief Financial Officer in October 1991 and
Senior Vice President in October 1996. He also became Chief Financial
Officer of the TEMIC Semiconductor Discrete Components Division in April 1996
and served as such until March 1998. Prior to joining the Company, he was
employed by AEG Aktiengesellschaft (a former affiliate of the Company which
was subsequently merged into Daimler-Benz AG, the former parent corporation
of the Company), a German company which then had interests in rail systems,
microelectronics, power distribution, large power generating systems and
automation systems, in a variety of positions, most recently Manager
Departmental Director for controlling in the central administration
headquarters. Mr. Biehn holds a German M.A. degree.
Mr. Cox, age 49, joined the Company in April 1997 as Vice President,
Worldwide Environmental, Health & Safety Affairs. He devotes approximately
one-half of his time to the Company's affairs. Since September 1995, he has
also been Executive Vice President and Principal Consultant of
EnviroBusiness, Inc., an environmental consulting firm to high-technology
industries, specializing in semiconductor and semiconductor equipment
manufacturers. For more than the previous five years, he served as Corporate
Director of Safety, Health & Environmental Affairs of Shipley Company.
6
ITEM 2. PROPERTIES.
The Company owns its principal manufacturing plant and general offices
which are located in four two-story buildings totaling 234,600 square feet on
a 13-acre site in Santa Clara, California. TEMIC Semiconductor North
America, Inc., a subsidiary of the Company, leases approximately 11,700
square feet of office space in Basking Ridge, New Jersey, where the Company's
North American Sales Headquarters are located. Siliconix Limited, a
subsidiary of the Company, currently occupies, under an agreement with TEMIC
UK Limited, a subsidiary of Matra MHS (formerly an affiliated company),
approximately 2,000 square feet of space in premises located in Bracknell,
United Kingdom, where the Company's European Headquarters are located. TEMIC
(S) Pte. Ltd., also a subsidiary of the Company, occupies approximately
17,300 square feet of administrative space in premises in Singapore, where
the Company's Far East Administrative Headquarters are located. TEMIC (S)
Pte. Ltd. also leases approximately 22,100 square feet of manufacturing and
general office space in Manila from TEMIC TELEFUNKEN microelectronics
(Philippines) Inc., formerly an affiliated company. Siliconix (Taiwan)
Limited, an indirect subsidiary of the Company, owns a 50,000-square-foot
portion of a building in the Nan-Tse Export Processing Zone, a suburb of
Kaohsiung, Taiwan, which consists of manufacturing and general office space.
TEMIC Japan KK, another subsidiary of the Company, leases 2,700 square feet
of general office space in Tokyo from Mercedes-Benz Japan. Shanghai Simconix
Co. Ltd., a joint venture between the Company and the Shanghai Institute of
Metallurgy (the "SIM"), leases 35,000 square feet of manufacturing and
general office space in Shanghai from the SIM.
ITEM 3. LEGAL PROCEEDINGS.
The Company is party to two environmental proceedings. The first
involved property that the Company vacated in 1972. In July 1989, the
California Regional Water Quality Control Board ("RWQCB") issued Cleanup and
Abatement Order No. 89-115 both to the Company and the current owner of the
property. The Order alleged that the Company contaminated both the soil and
the groundwater on the property by the improper disposal of certain chemical
solvents. The RWQCB considered both parties to be liable for the
contamination and sought to have them decontaminate the site to acceptable
levels. The Company subsequently reached a settlement of this matter with
the current owner of the property. The settlement also provided that the
current owner will indemnify the Company and its employees, officers, and
directors against any liability that may arise out of any governmental agency
actions brought for environmental cleanup of the subject site, including
liability arising out of RWQCB Order No. 89-115, to which the Company remains
nominally subject.
The second proceeding involves the Company's Santa Clara, California
facility, which the Company has owned and occupied since 1969. In February
1989, the RWQCB issued Cleanup and Abatement Order No. 89-27 to the Company.
The Order is based on the discovery of contamination of both the soil and the
groundwater on the property by certain chemical solvents. The Order calls
for the Company to specify and implement interim remedial actions and to
evaluate final remedial alternatives. The RWQCB issued a subsequent order
requiring the Company to complete the decontamination. The Company is
complying with the RWQCB's orders.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
7
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
As of March 20, 1998, there were 770 holders of record of the Company's
Common Stock. Under Delaware law, the Company may pay dividends only from
retained earnings or, if none, from net profits for the current or preceding
fiscal year. The Company has paid no dividends since December 1980 in order
to retain the Company's earnings to fund future growth requirements. No
change in such policy is anticipated in the near future.
A presentation of the highest and lowest "last trade" price for the
Company's Common Stock for each quarterly period during 1996 and 1997 is
incorporated by reference from the Company's 1997 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto. The
Company's Common Stock trades on the Nasdaq Stock Market under the symbol
"SILI."
ITEM 6. SELECTED FINANCIAL DATA.
Incorporated by reference from the Company's 1997 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Incorporated by reference from the Company's 1997 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The report of KPMG Peat Marwick LLP on the financial statements for the
years ended December 31, 1997, 1996, and 1995 is found on page 10 of this
Annual Report on Form 10-K. The remainder of the financial statements are
incorporated by reference from the Company's 1997 Annual Report to
Shareholders, portions of which are filed as Exhibit 13 hereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
8
Independent Auditors' Report
Board of Directors
Siliconix incorporated:
We have audited the accompanying consolidated balance sheets of Siliconix
incorporated as of December 31, 1997 and 1996, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of
the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Siliconix
incorporated as of December 31, 1997 and 1996, and the results of their
operations and their cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
Mountain View, California
January 21, 1998
9
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The executive officers of the Company are identified in Item 1 of Part I of
this Annual Report on Form 10-K. Identification of the directors of the
Company is incorporated by reference from the "Election of Directors" section
of the Company's definitive Proxy Statement dated April 30, 1998 to be mailed
to shareholders in connection with the 1998 Annual Shareholders Meeting and
filed with the Securities and Exchange Commission on or about April 30, 1998
(the "Proxy Statement").
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated by reference from the "Compensation of Officers and Directors"
and "Report of Compensation Committee" sections of the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated by reference from the "Security Ownership" section of the
Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Incorporated by reference from the "Certain Transactions" section of the
Proxy Statement.
10
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) DOCUMENTS FILED AS PART OF FORM 10-K
1. FINANCIAL STATEMENTS
Independent Auditors' Report on the Financial Statements for the
Years Ended December 31, 1997, 1996, and 1995 (see page 10 hereof)
The remainder of the Financial Statements are incorporated by
reference from the Company's 1997 Annual Report to Shareholders,
portions of which are filed as Exhibit 13 hereto.
Consolidated Statements of Operations for the years ended
December 31, 1997, 1996, and 1995
Consolidated Balance Sheets as of December 31, 1997 and 1996
Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1997, 1996, and 1995
Consolidated Statements of Cash Flows for the years ended
December 31, 1997, 1996, and 1995
Notes to Consolidated Financial Statements
Quarterly Financial Data (unaudited)
2. FINANCIAL STATEMENT SCHEDULE
A. Independent Auditors' Report on Financial Statement Schedule
II. Valuation and Qualifying Accounts
All other schedules have been omitted as the required
information is reported or incorporated by reference elsewhere
in this Annual Report or is not applicable.
11
3. EXHIBITS
3.1 Restated Certificate of Incorporation(1)
3.2 Bylaws(2)
10.2 One-Year Key Professional Incentive Bonus Plan(1)
10.3 Key Professional Performance Unit Plan(2)
10.5 Amended and Restated License Agreement dated April 10,
1990 between the Company and International Rectifier
Corporation(1)
10.6 Amendment to Amended and Restated License Agreement dated
December 21, 1990 between the Company and International
Rectifier Corporation(1)
10.10 Pension Contract dated January 26, 1995 between Richard J.
Kulle and TEMIC TELEFUNKEN microelectronic GmbH(3)
10.11 Special Retention Bonus Plan of Siliconix incorporated(4)
10.12 Change-in-Control Severance Plan of Siliconix
incorporated(4)
10.13 Special Retention Bonus Plan (1998) of Siliconix
incorporated(5)
10.14 Amendment No. 1 to Change-in-Control Severance Plan of
Siliconix incorporated(5)
10.15 Amendment No. 1 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.16 Amendment No. 2 to Siliconix One-Year Key Professional
Incentive Bonus Plan(5)
10.17 Amendment No. 1 to Siliconix Key Professional Performance
Unit Plan(5)
10.18 Amendment No. 2 to Siliconix Key Professional Performance
Unit Plan(5)
10.19 Employment Agreement dated April 1, 1997 between the
Company and John Cox
13 Portions of Siliconix incorporated 1997 Annual Report to
Shareholders
21 Subsidiaries of the Company
27 Financial Data Schedule
- -----------------
(1) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, filed with the
SEC on April 15, 1991.
(2) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, filed with the
SEC on April 1, 1996.
(FOOTNOTES CONTINUED ON NEXT PAGE)
12
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(3) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, filed with the
SEC on April 10, 1995.
(4) Incorporated by reference to Exhibits to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on
May 14, 1997.
(5) Incorporated by reference to Exhibits to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 28, 1997, filed with the
SEC on November 12, 1997.
(b) REPORTS ON FORM 8-K
The Company did not file any reports on Form 8-K in the last
quarter of the year ended December 31, 1997.
13
FINANCIAL STATEMENT SCHEDULE
A.Independent Auditors' Report
II. Valuation and Qualifying Accounts
14
INDEPENDENT AUDITORS' REPORT
Board of Directors
Siliconix incorporated:
Under date of January 21, 1998, we reported on the consolidated balance sheets
of Siliconix incorporated as of December 31, 1997 and 1996, and the related
consolidated statements of operations, shareholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 1997, as
contained in the annual report on Form 10-K for the year ended December 31,
1997. In connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated financial
statement schedule listed in item 14(a)2. The consolidated financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this consolidated financial
statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
KPMG PEAT MARWICK LLP
Mountain View, California
January 21, 1998
15
SILICONIX INCORPORATED
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31
(IN THOUSANDS)
Additions
---------
Balance
At Charged to Balance
Beginning Costs and Charged to At End
of Period Expenses Revenues Deductions of Period
---------- ----------- ----------- ----------- ----------
1995:
Allowance for Doubtful Accounts $1,063 $1,075 $ - $ 297 $ 1,841
Allowance for Price Adjustments 902 - 922 1,381 443
Allowance for Returned Parts and
Distributor Adjustments 3,192 - 9,064 9,014 3,242
------ ------ ------- ------- -------
$5,157 $1,075 $ 9,986 $10,692 $ 5,526
1996:
Allowance for Doubtful Accounts $1,841 $ 329 $ - $ 69 $ 2,101
Allowance for Price Adjustments 443 - 3,945 4,288 100
Allowance for Returned Parts and
Distributor Adjustments 3,242 - 18,636 15,474 6,404
------ ------ ------- ------- -------
$5,526 $ 329 $22,581 $19,831 $ 8,605
1997:
Allowance for Doubtful Accounts $2,101 $ 545 $ - $ 458 $ 2,188
Allowance for Price Adjustments 100 - 4,712 4,421 391
Allowance for Returned Parts and
Distributor Adjustments 6,404 - 24,818 21,878 9,344
------ ------ ------- ------- -------
$8,605 $ 545 $29,530 $26,757 $11,923
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: March 30, 1998
SILICONIX INCORPORATED
By: /s/ King Owyang
--------------------------------------
King Owyang
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Principal Executive Officer
/s/ King Owyang President and Chief Executive
- ------------------------- Officer March 30, 1998
King Owyang
Principal Financial and
Accounting Officer
/s/ Juergen Biehn Senior Vice President and
- ------------------------- Chief Financial Officer March 30, 1998
Juergen Biehn
/s/ Everett Arndt
- ------------------------- Director March 30, 1998
Everett Arndt
/s/ Lori Lipcaman
- ------------------------- Director March 30, 1998
Lori Lipcaman
/s/ Frank Maier
- ------------------------- Director March 30, 1998
Frank Maier
/s/ Glyndwr Smith
- ------------------------- Director March 30, 1998
Glyndwr Smith
/s/ Robert L. Wehrli
- ------------------------- Director March 30, 1998
Robert L. Wehrli
17
INDEX TO EXHIBITS
EXHIBIT
3.1 Restated Certificate of Incorporation(1)
3.2 Bylaws(2)
10.2 One-Year Key Professional Incentive Bonus Plan(1)
10.3 Key Professional Performance Unit Plan(2)
10.5 Amended and Restated License Agreement dated April 10, 1990 between
the Company and International Rectifier Corporation(1)
10.6 Amendment to Amended and Restated License Agreement dated December
21, 1990 between the Company and International Rectifier
Corporation(1)
10.10 Pension Contract dated January 26, 1995 between Richard J. Kulle and
TEMIC TELEFUNKEN microelectronic GmbH(3)
10.11 Special Retention Bonus Plan of Siliconix incorporated(4)
10.12 Change-in-Control Severance Plan of Siliconix incorporated(4)
10.13 Special Retention Bonus Plan (1998) of Siliconix incorporated(5)
10.14 Amendment No. 1 to Change-in-Control Severance Plan of Siliconix
incorporated(5)
10.15 Amendment No. 1 to Siliconix One-Year Key Professional Incentive
Bonus Plan(5)
10.16 Amendment No. 2 to Siliconix One-Year Key Professional Incentive
Bonus Plan(5)
10.17 Amendment No. 1 to Siliconix Key Professional Performance Unit Plan(5)
10.18 Amendment No. 2 to Siliconix Key Professional Performance Unit Plan(5)
10.19 Employment Agreement dated April 1, 1998 between the Company and John
Cox
13 Portions of Siliconix incorporated 1997 Annual Report to Shareholders
21 Subsidiaries of the Company
27 Financial Data Schedule
- ---------------------------
(1) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1990, filed with the
SEC on April 15, 1991.
(FOOTNOTES CONTINUED ON NEXT PAGE)
18
(FOOTNOTES CONTINUED FROM PREVIOUS PAGE)
(2) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, filed with the
SEC on April 1, 1996.
(3) Incorporated by reference from Exhibits to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, filed with the
SEC on April 10, 1995.
(4) Incorporated by reference to Exhibits to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 30, 1997, filed with the SEC on
May 14, 1997.
(5) Incorporated by reference to Exhibits to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 28, 1997, filed with the
SEC on November 12, 1997.