11-K 1 form-11k_063002.txt MICREL FORM 11-K, PERIOD ENDED 12-31-01 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001. [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-25236 A. Full title of the plan and address of the plan, if different from that of the issuer named below: MICREL, INC. 401(k) PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principle executive office: MICREL, INCORPORATED 2180 Fortune Drive San Jose, CA 95131 REQUIRED INFORMATION 1. Financial Statements and Schedules The following documents are filed as part of this report on the pages indicated: Page No. -------- Independent Auditors' Report 2 Statements of Net Assets Available for Benefits 3 Statement of Changes in Net Assets Available for Benefits 4 Notes to Financial Statements 5 Supplemental Schedule Schedule H, Line 4i - Schedule of Assets (Held At End of Year) 9 2. Exhibits Exhibit 23 - Independent Auditors' Consent SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. MICREL, INC. 401(k) PLAN Date: June 25, 2002 By: /s/ Richard D. Crowley, Jr. --------------------------- Richard D. Crowley, Jr. Vice President, Finance and Chief Financial Officer -1- INDEPENDENT AUDITORS' REPORT To the Administrative Committee Micrel, Inc. 401(k) Plan San Jose, California We have audited the accompanying statements of net assets available for benefits of Micrel, Inc. 401(k) Plan as of December 31, 2001 and 2000, and the related statement of changes in net assets available for benefits for the year ended December 31, 2001. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2001 and 2000, and the changes in net assets available for benefits for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan's management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ARMANINO McKENNA LLP San Leandro, California June 10, 2002 -2-
MICREL, INC. 401(k) PLAN Statements of Net Assets Available for Benefits December 31, 2001 and 2000 __________________________ ASSETS ------ 2001 2000 ------------ ------------ Cash in bank and short-term funds $ 20,404,714 $ 1,377,069 Investments at fair value Registered investment companies 2,899,077 20,530,874 Common stocks 847,956 474,373 Employer common stock 165,957 - ------------ ------------ Total investments 3,912,990 21,005,247 Participant loans 456,963 453,536 Employer contribution receivable - 1,782,360 ------------ ------------ Net assets available for benefits $ 24,774,667 $ 24,618,212 ============ ============ The accompanying notes are an integral part of these financial statements.
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MICREL, INC. 401(k) PLAN Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 2001 __________________________ Additions to net assets Contributions Participant contributions $ 3,175,855 Rollovers 452,397 ------------ Total contributions 3,628,252 Interest and dividends 119,308 Net depreciation in fair value of investments (2,538,946) ------------ Total additions 1,208,614 ------------ Deductions from net assets Benefits paid to participants 1,544,899 Administrative fees 104,726 ------------ Total deductions 1,649,625 ------------ Net decrease in net assets (441,011) Transfer of assets into Plan due to merger 597,466 ------------ Net assets available for benefits at December 31, 2000 24,618,212 ------------ Net assets available for benefits at December 31, 2001 $ 24,774,667 ============ The accompanying notes are an integral part of these financial statements.
-4- MICREL, INC. 401(k) PLAN Notes to Financial Statements December 31, 2001 and 2000 ________________________ 1. Description of the Plan ----------------------- The following description of the Micrel, Inc. 401(k) Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General ------- The Plan, a defined contribution plan sponsored by Micrel, Inc. (the "Company"), intended to qualify under Section 401(a) and related provisions of the Internal Revenue Code ("Code"), was established effective January 1, 1980. The Plan is designed to provide participants a means to defer a portion of their compensation for retirement. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Plan merger ----------- In 2001, the Company merged with another company. All of the assets of the other company's qualified contribution plan were transferred to the Plan. Plan administration ------------------- The Company is the administrator of the Plan and, as such, carries out the duties imposed by ERISA. The Company has delegated certain responsibilities for the operation and administration of the Plan. Custodianship of the assets and investment transactions are provided by Charles Schwab & Company, Inc. ("Schwab"). Administrative services are provided by Investmart. Eligibility ----------- Employees of the Company become eligible to participate in the Plan on the first day of the month following their employment commencement date. Participants of the Plan who have more than six months of service are eligible to receive discretionary contributions from the Company. Contributions ------------- Annually, participants may elect to make salary deferral contributions up to 15% of their pretax eligible compensation subject to limitations described in the Code. A participant may also contribute cash to the Plan in the form of a "rollover contribution" from another qualified employer-sponsored retirement plan. Employer contributions may be contributed at the discretion of the Company's board of directors and are invested in a portfolio of investments as directed by the Company. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers various money market funds, mutual funds, and employer common stock as investment options for participants. The non-employer common stocks held by the Plan are not investment alternatives for participants. -5- MICREL, INC. 401(k) PLAN Notes to Financial Statements December 31, 2001 and 2000 ________________________ 1. Description of the Plan (continued) ----------------------------------- Participant accounts -------------------- Each participant's account is credited with the participant's contribution and earnings thereon and an allocation of (a) the Company's contribution and earnings thereon, and (b) forfeitures of terminated participants' non-vested accounts. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Vesting ------- Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the Company discretionary contributions portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after 6 years of credited service. Payment of benefits ------------------- Distributions and withdrawals are payable upon termination, financial hardship, disability, death, or retirement. The participant (or his/her beneficiary), may elect to receive either a lump-sum amount equal to the vested value of his or her account, or installments over a period of years not to exceed the life expectancy of the participant. Participant loans ----------------- Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance, whichever is less. Loan terms range from 1 to 5 years or up to 15 years for the purchase of a primary residence. The loans are secured by the remaining balance in the participant's account and bear interest at rates that range from 7% to 11.5%, which are commensurate with local prevailing rates as determined by the Plan administrator. Principal and interest is paid ratably through monthly payroll deductions. Forfeitures ----------- Forfeitures shall be allocated to all participants eligible to share in the allocations in the same proportion that each participant's compensation for the year bears to the compensation of all participants for such year. 2. Summary of Significant Accounting Policies ------------------------------------------ Payment of benefits ------------------- Benefits are recorded when paid. -6- MICREL, INC. 401(k) PLAN Notes to Financial Statements December 31, 2001 and 2000 ________________________ Investment valuation and income recognition ------------------------------------------- The Plan's investments are stated at fair value. Shares of registered investment companies (i.e. mutual funds) are valued at quoted market prices as reported by Schwab which represent the net asset value of shares held by the Plan at year-end. Common stocks are valued at quoted market prices as reported by Schwab. Participant loans are valued at cost which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Investment valuation and return is subject to fluctuations in the market performance of the underlying investment alternatives provided by the Plan. Accordingly, investment returns may vary from period to period depending on the performance of the underlying investments and these variations could be significant. Estimates --------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. 3. Investments ----------- The following presents investments that represent 5 percent or more of the Plan's net assets: 2001 2000 ------------ ------------ Cash $ 18,315,615 N/A Schwab Institutional Advantage Money Market Fund $ 1,782,548 N/A Gabelli Growth Fund $ - $ 1,832,835 Gabelli Value Fund $ - $ 2,080,818 Schwab S&P 500 Fund $ - $ 3,823,352 Invesco Dynamic Fund $ - $ 1,880,109 Janus World Wide Fund $ - $ 1,730,484 RS Emerging Growth Fund $ - $ 1,946,775 Selected American Shares Inc. Fund $ - $ 1,391,227 Weitz Partners Value Fund $ - $ 1,634,856
-7- MICREL, INC. 401(k) PLAN Notes to Financial Statements December 31, 2001 and 2000 ________________________ 4. Nonparticipant-Directed Investments ----------------------------------- Information about the net assets and significant components of the change in net assets relating to the nonparticipant-directed investments is as follows: 2001 2000 ------------ ------------ Net assets Cash in bank and short-term funds $ 2,089,074 $ 91,687 Registered investment companies (mutual funds) 2,899,077 4,408,240 Non-employer common stocks 847,956 474,373 Employer contributions receivable - 1,782,360 ------------ ------------ $ 5,836,107 $ 6,756,660 ============ ============ Changes in net assets Interest and dividends $ 49,905 Net depreciation of investments (702,785) Benefits paid to participants (243,003) Administrative expenses (24,670) ------------ $ (920,553) ============
5. Tax Status ---------- The Plan obtained its latest determination letter on September 1, 1993, in which the Internal Revenue Service stated that the plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the plan administrator and the plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan's financial statements. 6. Related Party Transactions -------------------------- Plan investments are held by Schwab. Schwab is the custodian as defined by the Plan and therefore, these transactions qualify as party- in-interest transactions specifically exempted from the prohibited transaction rules of ERISA. 7. Plan Termination ---------------- Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, the full value of each participant's account shall become fully vested and nonforfeitable. 8. Subsequent Event ---------------- Effective January 2002, the Plan replaced Charles Schwab & Company, Inc. with Security Trust Company as custodian of the Plan's investments. All participant-directed investments were transferred to cash on December 27, 2001 to facilitate the transfer of funds to Security Trust Company on January 2, 2002. In March 2002, the non- participant-directed funds were also transferred from Charles Schwab & Company, Inc. to Security Trust Company. -8- SUPPLEMENTAL SCHEDULE
MICREL, INC. 401(k) PLAN Schedule H, Line 4i - Schedule of Assets (Held At End of Year) EIN: 94-2526744; Plan No. 001 December 31, 2001 ____________________ (c) (b) Description of Investment including (e) Identity of Issue, Maturity Date, Rate of interest, (d) Current (a) Borrower, Lessor, or Similar Party Collateral, Par or Maturity Value Cost Value --- ---------------------------------- ----------------------------------- ----------- ----------- Gabelli Growth Fund Mutual fund $ 496,511 $ 348,248 Invesco Dynamic Fund Mutual fund $ 618,500 $ 376,818 Janus World Wide Fund Mutual fund $ 271,268 $ 145,105 Muhlenkamp Fund Mutual fund $ 14,471 $ 16,720 RS Emerging Growth Fund Mutual fund $ 467,335 $ 317,491 * Schwab S&P 500 Fund Mutual fund $ 1,394,098 $ 1,132,696 Selected American Shares Inc. Fund Mutual fund $ 207,064 $ 185,695 Weitz Partners Value Fund Mutual fund $ 334,498 $ 376,304 * Micrel Common Stock $ 190,431 $ 165,957 Americredit Corporation Common Stock $ 75,406 $ 88,025 Ameripath Inc. Common Stock $ 53,659 $ 85,489 Cree Corporation Common Stock $ 29,280 $ 37,562 Health Care Property Inv. Inc. Common Stock $ 66,818 $ 72,601 ICU Medical Inc. Common Stock $ 33,431 $ 52,288 Integrated Circuit Systems Common Stock $ 45,866 $ 62,687 Knight Trans inc. Common Stock $ 19,242 $ 31,607 Mens Wearhouse Inc. Common Stock $ 55,901 $ 46,566 Metris Companies Inc. Common Stock $ 36,314 $ 40,365 Microchip Technology Inc. Common Stock $ 20,503 $ 31,186 Orthodontic Centers of America Common Stock $ 66,721 $ 73,353 Pediatrix Medical Group Inc. Common Stock $ 25,053 $ 23,744 Rent A Center Inc. Common Stock $ 71,428 $ 74,022 United Rentals Inc. Common Stock $ 50,072 $ 66,511 Wireless Facilities Inc. Common Stock $ 56,874 $ 61,950 * Schwab Institutional Advantage MMF Money market fund $ 1,782,548 $ 1,782,548 * Schwab Retirement MMF Money market fund $ 306,526 $ 306,526 Cash Cash $18,315,615 $18,315,615 * Participant loans Interest Rates 7 - 11.5% $ - $ 456,963
-9- EXHIBIT INDEX Exhibit Number Description -------------- ----------- 23 Independent Auditors' Consent. EXHIBIT 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statement No. 333-52136 of Micrel, Incorporated on Form S-8 of our report dated June 10, 2002, appearing in this Annual Report on Form 11-K of Micrel, Inc. 401(k) Plan for the year ended December 31, 2001. /s/ Armanino McKenna LLP ------------------------ ARMANINO McKENNA LLP San Leandro, California June 25, 2002