[LOGO] SILICON LABORATORIES
SILICON LABORATORIES INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 29, 2004
TO THE STOCKHOLDERS OF SILICON LABORATORIES INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Silicon
Laboratories Inc., a Delaware corporation, will be held on April 29, 2004 at
9:30 a.m. Central Time at the Lady Bird Johnson Wildflower Center, 4801 La
Crosse Avenue, Austin, Texas 78739, for the following purposes, as more fully
described in the Proxy Statement accompanying this Notice:
1. To elect three Class III directors to serve on the Board of Directors
until our 2007 annual meeting of stockholders, or until their
successors are duly elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as our independent
auditors for the fiscal year ending January 1, 2005; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only stockholders of record at the close of business on March 1, 2004 are
entitled to notice of and to vote at the Annual Meeting. A list of stockholders
entitled to vote at the Annual Meeting will be available for inspection at our
executive offices.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the Proxy in the
envelope enclosed for your convenience, or vote your shares by telephone or
internet as promptly as possible. Should you receive more than one Proxy because
your shares are registered in different names and addresses, each Proxy should
be signed and returned, or voted by telephone or internet, to assure that all
your shares will be voted. You may revoke your Proxy at any time prior to the
Annual Meeting. If you attend the Annual Meeting and vote by ballot, your Proxy
will be revoked automatically and only your vote at the Annual Meeting will be
counted.
Sincerely,
/s/ Daniel A. Artusi
Daniel A. Artusi
CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR
Austin, Texas
March 17, 2004
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY AND VOTE YOUR SHARES BY TELEPHONE,
BY INTERNET OR BY COMPLETING, SIGNING AND DATING THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE AND RETURNING IT IN THE ENCLOSED ENVELOPE.
SILICON LABORATORIES INC.
4635 BOSTON LANE
AUSTIN, TEXAS 78735
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 2004
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Silicon Laboratories Inc., a Delaware corporation, for use at the Annual Meeting
of Stockholders to be held on April 29, 2004 at 9:30 a.m. Central Time at the
Lady Bird Johnson Wildflower Center, 4801 La Crosse Avenue, Austin, Texas 78739,
or at any adjournment thereof. These proxy solicitation materials were mailed on
or about March 17, 2004 to all stockholders entitled to vote at the Annual
Meeting.
VOTING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying notice and are described in more
detail in this Proxy Statement. On March 1, 2004, the record date for
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, there were 51,473,790 shares of our common stock outstanding and no
shares of our preferred stock were outstanding. Each stockholder is entitled to
one vote for each share of common stock held by such stockholder on March 1,
2004. The presence, in person or by proxy, of the holders of a majority of our
shares entitled to vote is necessary to constitute a quorum at the Annual
Meeting or at any adjournment thereof. Stockholders may not cumulate votes in
the election of directors. The vote of a plurality of the shares of our common
stock present in person or represented by proxy at this meeting and entitled to
vote on the election of directors is necessary for the election of a director.
The nominees receiving the greatest number of votes at this meeting will be
elected to our Board of Directors, even if they receive less than a majority of
such shares.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes (i.e., a Proxy submitted by a broker or nominee
specifically indicating the lack of discretionary authority to vote on the
matter). Abstentions and broker non-votes will be counted as present for
purposes of determining a quorum for the transaction of business, but will not
be counted for purposes of determining whether each proposal has been approved.
PROXIES
If the enclosed form of Proxy is properly signed and returned or you
properly follow the instructions for telephone or internet voting, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the Proxy does not specify how the shares
represented thereby are to be voted, the Proxy will be voted FOR the election of
the directors proposed by the Board of Directors unless the authority to vote
for the election of such directors is withheld and, if no contrary instructions
are given, the Proxy will be voted FOR the approval of the selection of Ernst &
Young LLP as our independent auditors. You may revoke or change your Proxy at
any time before the Annual Meeting by filing a notice of revocation or another
signed Proxy with a later date with our Secretary at our principal executive
offices at 4635 Boston Lane, Austin, Texas 78735. You may also revoke your Proxy
by attending the Annual Meeting and voting in person.
SOLICITATION
We will bear the entire cost of solicitation, including the preparation,
assembly, printing and mailing of this Proxy Statement, the Proxy and any
additional solicitation materials furnished to the stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding in their names shares that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, we may reimburse such persons for their costs in forwarding the
solicitation materials to such beneficial owners. The original solicitation of
proxies by mail may be supplemented by a solicitation by telephone or other
means by directors, officers or employees. No additional compensation will be
paid to these individuals for any such services. Except as described above, we
do not presently intend to solicit Proxies other than by mail.
DEADLINE FOR RECEIPT OF FUTURE STOCKHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934,
stockholder proposals to be presented at our 2005 annual meeting of stockholders
and in our proxy statement and form of proxy relating to that meeting must be
received by us at our principal executive offices in Austin, Texas, addressed to
our Secretary, not later than November 17, 2004, the date which is 120 days
prior to March 17, 2005. These proposals must comply with applicable Delaware
law, the rules and regulations promulgated by the Securities and Exchange
Commission and the procedures set forth in our bylaws. Unless we receive notice
in the manner specified in the previous sentence, the proxy holders shall have
discretionary authority to vote for or against any such proposal presented at
our 2005 annual meeting of stockholders.
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MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE: ELECTION OF DIRECTORS
GENERAL
The Board of Directors is divided into three classes, designated Class I,
Class II and Class III. Each class is as nearly equal in size as practicable,
with staggered three-year terms. The term of office of the Class III directors,
Daniel A. Artusi, William G. Bock and R. Ted Enloe III, expires at this Annual
Meeting. Messrs. Artusi, Bock and Enloe have been nominated to continue as Class
III Directors. The three directors elected as Class III Directors at the Annual
Meeting will serve for a term of three years expiring at the 2007 annual meeting
of stockholders, or until their successor(s) have been duly elected and
qualified or until their earlier death, resignation or removal.
Each nominee for election has agreed to serve if elected, and management
has no reason to believe that the nominees will be unavailable to serve. In the
event a nominee is unable or declines to serve as a director at the time of the
Annual Meeting, the Proxies will be voted for any nominee who may be designated
by our present Board of Directors to fill the vacancy. Unless otherwise
instructed, the Proxy holders will vote the Proxies received by them FOR the
nominees named below.
NOMINEES FOR CLASS III DIRECTORS WITH TERMS EXPIRING IN 2007
Daniel A. Artusi, 49 ..... has served as our Chief Executive Officer and a member of
our Board of Directors since January 2004 and has served as
our President since January 2003. He previously served as
our Chief Operating Officer from August 2001 to January
2004. Prior to joining Silicon Laboratories, Mr. Artusi held
various positions at Motorola. From August 1999 to August
2001, Mr. Artusi served as Corporate Vice President and
General Manager of Motorola's Networking and Computing
Systems Group. Mr. Artusi served as Vice President and
General Manager of Motorola's Wireless Infrastructure
Systems Division from May 1997 to August 1999 and as General
Manager of Motorola's RF Products Division from April 1996
to May 1997. Mr. Artusi currently serves on the Board of
Directors of Powerwave Technologies. Mr. Artusi studied
electronics engineering at the Instituto Tecnologico de
Buenos Aires, Argentina from 1972 through 1976.
William G. Bock, 53 ...... has served as a director of Silicon Laboratories since March
2000. Since April 2002, Mr. Bock has been a general partner
of CenterPoint Ventures, a venture capital firm. From April
2001 to March 2002, Mr. Bock served as a partner of Verity
Ventures, a venture capital firm. From June 1999 to March
2001, Mr. Bock served as a Vice President and General
Manager at the Hewlett-Packard Company. Mr. Bock held the
position of President and Chief Executive Officer of DAZEL
Corporation from February 1997 until its acquisition by the
Hewlett-Packard Company in June 1999. From October 1994 to
February 1997, Mr. Bock served as Chief Operating Officer of
Tivoli Systems, a client server software company, which was
acquired by IBM in March 1996. Mr. Bock holds a B.S. in
Computer Science from Iowa State University and a M.S. in
Industrial Administration from Carnegie Mellon University.
R. Ted Enloe III, 65 ..... has served as a director of Silicon Laboratories since April
2003. Mr. Enloe is currently the President and Chief
Executive Officer of Optisoft, Inc., a provider of
intelligent traffic signal platforms. Mr. Enloe formerly
served as Vice Chairman and member of the office of chief
executive of Compaq Computer Corporation. He also served as
President of Lomas Financial Corporation and Liberte
Investors for more than 15 years. Mr. Enloe co-founded a
number of other publicly-held firms, including Capstead
Mortgage Corp., Tyler Cabot Mortgage Securities Corp., and
Seaman's Corp. Mr. Enloe currently serves on the Board of
Directors of Leggett & Platt, Inc. Mr. Enloe holds a B.S. in
engineering from Louisiana Polytechnic University and a J.D.
from Southern Methodist University.
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OTHER DIRECTORS
Set forth below is information concerning our other directors whose term of
office continues after this Annual Meeting.
CONTINUING CLASS I DIRECTORS WITH TERMS EXPIRING IN 2005
Navdeep S. Sooch, 41 ..... co-founded Silicon Laboratories in August 1996 and has served
as Chairman of the Board since our inception. Mr. Sooch
served as our Chief Executive Officer from our inception
through the end of fiscal 2003. From March 1985 until
founding Silicon Laboratories, Mr. Sooch held various
positions at Crystal Semiconductor/ Cirrus Logic, a designer
and manufacturer of integrated circuits, including Vice
President of Engineering, as well as Product Planning
Manager of Strategic Marketing and Design Engineer. From May
1982 to March 1985, Mr. Sooch was a Design Engineer with
AT&T Bell Labs. Mr. Sooch holds a B.S. in electrical
engineering from the University of Michigan, Dearborn and a
M.S. in electrical engineering from Stanford University.
William P. Wood, 48 ...... has served as a director of Silicon Laboratories since March
1997. Since 1996, Mr. Wood has also served as general
partner of Silverton Partners, an investment firm. From 1984
to 2003, Mr. Wood was a general partner, and for certain
funds created since 1996, a special limited partner, of
various funds associated with Austin Ventures, a venture
capital firm. Mr. Wood serves on the Board of Directors of
Crossroads Systems, a provider of storage routers for
storage area networks. Mr. Wood holds a B.A. in history from
Brown University and a M.B.A. from Harvard University.
Laurence G. Walker, 55 ... has served as a director of Silicon Laboratories since June
2003. Previously, Mr. Walker co-founded and served as Chief
Executive Officer of C-Port Corporation, a pioneer in the
network processor industry, which was acquired by Motorola
in 2000. Following the acquisition, Mr. Walker served as
Vice President of Strategy for Motorola's Network and
Computing Systems Group and then as Vice President and
General Manager of the Network and Computing Systems Group
until 2002. From August 1996 to May 1997, Mr. Walker served
as Chief Executive Officer of CertCo, a digital
certification supplier. Mr. Walker served as Vice President
and General Manager, Network Products Business Unit, of
Digital Equipment Corporation from January 1994 to July
1996. From 1981 to 1994, he held a variety of other
management positions at Digital Equipment Corporation. Mr.
Walker currently serves as a director of McDATA Corporation,
an expert provider of multi-capable storage networking
solutions. Mr. Walker holds a B.S. in electrical engineering
from Princeton University and a M.S. and Ph.D. in electrical
engineering from the Massachusetts Institute of Technology.
CONTINUING CLASS II DIRECTORS WITH TERMS EXPIRING IN 2006
David R. Welland, 48 .... co-founded Silicon Laboratories in August 1996 and has served
as a Vice President and director since our inception. From
November 1991 until founding Silicon Laboratories, Mr.
Welland held various positions at Crystal
Semiconductor/Cirrus Logic, including Senior Design
Engineer. Mr. Welland holds a B.S. in electrical engineering
from the Massachusetts Institute of Technology.
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H. Berry Cash, 65 ........ has served as a director of Silicon Laboratories since June
1997. Mr. Cash has served as general partner of InterWest
Partners, a venture capital firm, since 1986. Mr. Cash
currently serves on the Board of Directors of the following
public companies: Microtune, a designer and manufacturer of
RF silicon and systems "gateway" solutions for the broadband
communications and consumer electronics markets; i2
Technologies, a provider of intelligent e-business and
marketplace solutions; Ciena Corporation, a designer and
manufacturer of dense wavelength division multiplexing
systems for fiber optic networks; Airspan Networks, a
provider of broadband fixed wireless access communication
systems; and Liberte Investors, an investment company. Mr.
Cash holds a B.S. in electrical engineering from Texas A&M
University and a M.B.A. from Western Michigan University.
BOARD COMMITTEES AND MEETINGS
During fiscal 2003, our Board of Directors held 10 meetings and acted by
unanimous written consent three times. Our Board of Directors has an Audit
Committee, Compensation Committee, Special Stock Option Committee and Nominating
and Corporate Governance Committee. During fiscal 2003, each director attended
or participated in 75% or more of the aggregate of (i) the total number of
meetings of the Board of Directors (during the period that he served) and (ii)
the total number of meetings held by all committees of the Board of Directors on
which such director served (during the period that he served). The Board of
Directors has determined that Messrs. Bock, Cash, Enloe, Walker and Wood are
each independent as defined in the applicable Marketplace Rules of The NASDAQ
Stock Market, Inc.
AUDIT COMMITTEE. The Audit Committee is responsible for matters relating to
the selection of our independent auditors, the scope of the annual audits, the
fees to be paid to the independent auditors, the performance of our independent
auditors, compliance with our accounting and financial policies, and
management's procedures and policies relative to the adequacy of our internal
accounting controls. The Board of Directors has adopted a written charter for
the Audit Committee, which is filed as Exhibit A hereto. The members of the
Audit Committee are Messrs. Bock, Enloe and Wood. Mr. Bock serves as Chairman of
the Audit Committee. The Board of Directors has determined that each of the
members of the Audit Committee is independent as defined in the applicable
Marketplace Rules of The NASDAQ Stock Market, Inc. and Rule 10A-3 under the
Securities Exchange Act of 1934. The Board of Directors has determined that Mr.
Bock is qualified as an audit committee financial expert pursuant to Item 401(h)
of Regulation S-K and a financially sophisticated audit committee member under
Rule 4350(d)(2)(A) of the Marketplace Rules of The NASDAQ Stock Market, Inc. The
Audit Committee held four meetings during fiscal 2003 and acted by unanimous
written consent one time.
COMPENSATION COMMITTEE. The Compensation Committee reviews and makes
recommendations to the Board of Directors regarding our compensation policies
and all forms of compensation to be provided to our executive officers and other
employees. In addition, the Compensation Committee has authority to administer
our stock option and stock purchase plans. The members of the Compensation
Committee are Messrs. Cash, Walker and Wood, and the Board of Directors has
determined that each of the members of the Compensation Committee is independent
as defined in the applicable Marketplace Rules of The NASDAQ Stock Market, Inc.
Mr. Wood serves as Chairman of the Compensation Committee. The Compensation
Committee held three meetings and acted by unanimous written consent three times
during fiscal 2003.
SPECIAL STOCK OPTION COMMITTEE. The Special Stock Option Committee, which
is composed of Mr. Sooch, approves grants of options from our 2000 Stock
Incentive Plan to non-executive officers and employees. The Board of Directors
generally reviews the grants made by the Special Stock Option Committee at the
next meeting of the Board of Directors. The Special Stock Option Committee acted
24 times by written consent at regular intervals during fiscal 2003.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and Corporate
Governance Committee focuses on issues related to the composition, practices and
operations of the Board of Directors. In addition, the Nominating and Corporate
Governance Committee has the authority to consider candidates for the
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Board of Directors recommended by stockholders and to determine the procedures
with respect to such stockholder recommendations. The Board of Directors has
adopted a written charter for the Nominating and Corporate Governance Committee,
a current copy of which is available on our internet website under the "Investor
Relations" page. Our internet website address is http://www.silabs.com. The
members of the Nominating and Corporate Governance Committee are Messrs. Cash,
Enloe and Walker, and the Board of Directors has determined that each member is
independent as defined in the applicable Marketplace Rules of The NASDAQ Stock
Market, Inc. Mr. Enloe serves as Chairman of the Nominating and Corporate
Governance Committee. The Nominating and Corporate Governance Committee held one
meeting during fiscal 2003.
DIRECTOR NOMINATION
In evaluating potential director candidates, the Nominating and Corporate
Governance Committee considers the appropriate balance of experience, skills and
characteristics required of the Board of Directors and seeks to ensure that at
least a majority of the directors are independent under the applicable
Marketplace Rules of The NASDAQ Stock Market, Inc. The Nominating and Corporate
Governance Committee selects director nominees based on their personal and
professional integrity, depth and breadth of experience, ability to make
independent analytical inquiries, understanding of our business, willingness to
devote adequate attention and time to duties of the Board of Directors and such
other criteria as is deemed relevant by the Nominating and Corporate Governance
Committee. Silicon Laboratories believes that the backgrounds and qualifications
of the directors, considered as a group, should provide a diverse mix of
experience, knowledge and skills.
In identifying potential director candidates, the Nominating and Corporate
Governance Committee relies on recommendations made by current directors and
officers. In addition, the Nominating and Corporate Governance Committee may
engage a third party search firm to identify and recommend potential candidates.
Finally, the Nominating and Corporate Governance Committee will consider
candidates recommended by stockholders.
Any stockholder wishing to recommend a director candidate for consideration
by the Nominating and Corporate Governance Committee must provide written notice
not later than November 17, 2004 to the Corporate Secretary at our principal
executive offices located at 4635 Boston Lane, Austin, Texas 78735. Any such
notice should clearly indicate that it is a recommendation of a director
candidate by a stockholder and must set forth (i) the name, age, business
address and residence address of the recommended candidate, (ii) the principal
occupation or employment of such recommended candidate, (iii) the class and
number of shares of the corporation which are beneficially owned by such
recommended candidate, (iv) a description of all understandings or arrangements
between the stockholder and the recommended candidate and any other person or
persons pursuant to which the recommendations are to be made by the stockholder
and (v) any other information relating to such recommended candidate that is
required to be disclosed in solicitations of proxies for the election of
directors. In addition, such notice must contain (i) a representation that the
stockholder is a holder of record of stock of the corporation entitled to vote
at such meeting, (ii) the name and address, as they appear on the corporation's
books, of the stockholder proposing such nomination, (iii) the class and number
of shares of the corporation that are beneficially owned by such stockholder,
(iv) any material interest of the stockholder in such recommendation and (v) any
other information that is required to be provided by the stockholder pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, in such
stockholder's capacity as proponent of a stockholder proposal. Assuming that a
stockholder recommendation contains the information required above, the
Nominating and Corporate Governance Committee will evaluate a candidate
recommended by a stockholder by following substantially the same process, and
applying substantially the same criteria, as for candidates identified through
other sources.
ATTENDANCE AT ANNUAL MEETINGS
The Board of Directors encourages all directors to attend our annual
meetings of stockholders if practicable. Three directors attended the annual
meeting of stockholders held on April 24, 2003.
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STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board of Directors maintains a process for stockholders to communicate
with the Board of Directors or with individual directors. Stockholders who wish
to communicate with the Board of Directors or with individual directors should
direct written correspondence to our Corporate Secretary at our principal
executive offices located at 4635 Boston Lane, Austin, Texas 78735. Any such
communication must contain (i) a representation that the stockholder is a holder
of record of stock of the corporation, (ii) the name and address, as they appear
on the corporation's books, of the stockholder sending such communication and
(iii) the class and number of shares of the corporation that are beneficially
owned by such stockholder. The Corporate Secretary will forward such
communications to the Board of Directors or the specified individual director to
whom the communication is directed unless such communication is deemed unduly
hostile, threatening, illegal or similarly inappropriate, in which case the
Corporate Secretary has the authority to discard the communication or to take
appropriate legal action regarding such communication.
CODE OF ETHICS
Silicon Laboratories Inc. has adopted a Code of Business Conduct and Ethics
that applies to all officers, directors, employees and consultants. Our Code of
Business Conduct and Ethics is posted on our internet website under the
"Investor Relations" page. Our internet website address is
http://www.silabs.com.
DIRECTOR COMPENSATION AND INDEMNIFICATION ARRANGEMENTS
Non-employee directors receive option grants at periodic intervals under
the automatic option grant program of our 2000 Stock Incentive Plan. Under the
automatic option grant program, each non-employee director receives an initial
automatic option grant to purchase 30,000 shares of common stock on the date
such individual joins the Board of Directors. The initial automatic option
grants are immediately exercisable, vest in four equal successive annual
installments upon each additional year of service measured from the date of
grant, and have exercise prices equal to the fair market value as of the grant
date. Accordingly, Messrs. Enloe and Walker each received an option grant to
purchase 30,000 shares of common stock at an exercise price of $31.15 and
$26.19, respectively, on the date that such person joined the Board of
Directors. In addition, on the date of each annual stockholders meeting, each
non-employee director who continues to serve as a non-employee director receives
an automatic annual option grant to purchase 5,000 shares of common stock,
provided such individual has served as a non-employee director for at least six
months. The annual automatic option grants are immediately exercisable, vest on
the first anniversary of the date of grant and have exercise prices equal to
fair market value as of the grant date. Under this program, on the date of our
2003 annual meeting of stockholders, Messrs. Bock, Cash and Wood each received
an automatic annual option grant to purchase 5,000 shares of common stock at an
exercise price per share of $31.15. In addition, directors are eligible to
receive option grants under the discretionary option grant program of the 2000
Stock Incentive Plan. During fiscal 2003, no discretionary grants were made to
non-employee directors.
In October 2002, the Board of Directors unanimously approved a cash
compensation plan for non-employee directors that provides $25,000 per year in
cash compensation for each non-employee director and $20,000 per year in
additional cash compensation for the chairman of the Audit Committee. In April
2003, the Board of Directors unanimously approved an amendment to the cash
compensation plan to also provide $5,000 in annual compensation to Audit
Committee members (excluding the chairman), beginning with the third quarter of
2003. Payments under the cash compensation plan are paid in equal quarterly
installments on the last day of each calendar quarter. Messrs. Bock, Cash and
Wood were each paid $25,000 during fiscal 2003 pursuant to the cash compensation
plan. Messrs. Enloe and Walker were paid pro-rated fees of $17,313 and $14,000,
respectively, during fiscal 2003 pursuant to the cash compensation plan.
Additionally, Mr. Bock was paid $20,000 for his service as chairman of the Audit
Committee and Messrs. Enloe and Wood were each paid $2,500 for their services on
the Audit Committee during fiscal 2003. This cash compensation plan was
instituted, based on a review of compensation provided to directors of
similarly-situated companies, to provide incentives to retain and to attract
highly-qualified and motivated individuals to serve on our Board of Directors.
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We reimburse directors for all reasonable out-of-pocket expenses incurred
in attending board and committee meetings.
Our certificate of incorporation limits the personal liability of our
directors for breaches by them of their fiduciary duties. Our bylaws require us
to indemnify our directors to the fullest extent permitted by Delaware law. We
have also entered into indemnification agreements with all of our directors and
have purchased directors' and officers' liability insurance.
RECOMMENDATION OF THE BOARD OF DIRECTORS
OUR BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES FOR CLASS III DIRECTORS LISTED ABOVE.
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PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC AUDITORS
Our Audit Committee has appointed the firm of Ernst & Young LLP to serve as
our independent public auditors for the fiscal year ending January 1, 2005.
Ernst & Young LLP has audited our financial statements since our inception in
1996. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he or she so
desires and will be available to respond to appropriate questions.
The following table presents fees for professional services rendered by
Ernst & Young LLP for the audit of the Company's annual financial statements for
fiscal years 2003 and 2002, and fees for other services billed by Ernst & Young
LLP during those periods:
2003 2002
-------- --------
Audit fees ....................... $239,700 $170,800
Audit-related fees ............... 135,600 12,600
Tax fees ......................... 69,700 205,800
All other fees ................... -- --
-------- --------
Total ............................ $445,000 $389,200
-------- --------
AUDIT FEES. Audit fees relate to services rendered in connection with the
audit of the annual financial statements included in our Form 10-K, the
quarterly reviews of financial statements included in our Forms 10-Q filings,
Form S-8 consent procedures and statutory audits required internationally.
AUDIT-RELATED FEES. Audit-related services include fees for assurance and
related services, such as consultations concerning financial accounting and
reporting matters, and due diligence related to mergers and acquisitions.
TAX FEES. Tax services include fees for tax compliance, tax advice and tax
planning.
ALL OTHER FEES. There were no other fees in 2003 or 2002.
The Audit Committee is authorized by its charter to pre-approve all
auditing and permitted non-audit services to be performed by the Company's
independent auditors. The Audit Committee reviews and approves the independent
auditor's retention to audit our financial statements, including the associated
fee. The Audit Committee also evaluates other known potential engagements of the
independent auditor, including the scope of the proposed work and the proposed
fees, and approves or rejects each service, taking into account whether the
services are permissible under applicable law and the possible impact of each
non-audit service on the independent auditor's independence from management. At
subsequent meetings, the Committee will receive updates on the services actually
provided by the independent auditor, and management may present additional
services for approval. The Committee has delegated to the Chairman of the Audit
Committee the authority to evaluate and approve engagements on behalf of the
Committee in the event that a need arises for pre-approval between Committee
meetings. If the Chairman so approves any such engagements, he will report that
approval to the full Audit Committee at its next meeting.
Since May 6, 2003, the effective date of the Securities and Exchange
Commission rules stating that an auditor is not independent of an audit client
if the services it provides to the client are not appropriately approved, all
such services were pre-approved in accordance with the procedures described
above.
Our Audit Committee has reviewed the fees described above and believes that
such fees are compatible with maintaining the independence of Ernst & Young LLP.
Stockholder ratification of the appointment of Ernst & Young LLP as our
independent public auditors is not required by our bylaws or other applicable
legal requirement. However, the appointment of Ernst & Young LLP is being
submitted to the stockholders for ratification. If the stockholders fail to
ratify the appointment, the Audit Committee will reconsider whether or not to
retain the firm. Even if the appointment is ratified, the Audit Committee at its
discretion may direct the appointment of a different independent accounting firm
at any time during the year if it determines that such a change would be in the
best interests of Silicon Laboratories and its stockholders.
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RECOMMENDATION OF THE BOARD OF DIRECTORS
UPON THE RECOMMENDATION OF OUR AUDIT COMMITTEE, OUR BOARD OF DIRECTORS
RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP TO SERVE AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING JANUARY 1, 2005.
OTHER MATTERS
We know of no other matters that will be presented for consideration at the
Annual Meeting. If any other matters properly come before the Annual Meeting, it
is the intention of the persons named in the enclosed form of Proxy to vote the
shares they represent as the Board of Directors may recommend. Discretionary
authority with respect to such other matters is granted by the execution of the
enclosed Proxy.
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OWNERSHIP OF SECURITIES
The following table sets forth certain information known to us with respect
to the beneficial ownership of our common stock as of January 31, 2004 by (i)
all persons who are beneficial owners of five percent or more of our common
stock, (ii) each director and nominee for director, (iii) the executive officers
named in the Summary Compensation Table of the Executive Compensation section of
this Proxy Statement and (iv) all current directors and executive officers as a
group. Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable.
PERCENTAGE OF
SHARES OUTSTANDING SHARES
BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER(1) OWNED OWNED(2)
- -------------------------------------------------------------------- ------------ ------------------
David R. Welland(3) ................................................ 4,870,131 9.5%
Navdeep S. Sooch(4) ................................................ 4,649,954 9.0%
Daniel A. Artusi(5) ................................................ 121,277 *
Gary R. Gay(6) ..................................................... 171,676 *
Jonathan D. Ivester(7) ............................................. 409,296 *
Jeffrey W. Scott(8) ................................................ 2,770,890 5.4%
William P. Wood(9) ................................................. 631,092 1.2%
H. Berry Cash(10) .................................................. 435,067 *
William G. Bock(11) ................................................ 68,563 *
Laurence G. Walker(12) ............................................. 30,028 *
R. Ted Enloe III(13) ............................................... 30,000 *
Entities deemed to be affiliated with FMR Corp. ("Fidelity")(14).... 4,545,437 8.9%
Entities deemed to be affiliated with AXA Financial, Inc.(15) ...... 2,855,213 5.6%
All directors and executive officers as a group (16 persons)(16) ... 14,941,561 28.6%
- -----------------
* Represents beneficial ownership of less than one percent
(1) Unless otherwise indicated in the footnotes, the address for the beneficial owners named above is 4635 Boston Lane,
Austin, Texas 78735.
(2) Percentage of ownership is based on 51,343,422 shares of common stock outstanding on January 31, 2004. Shares of
common stock subject to stock options which are currently exercisable or will become exercisable within 60 days after
January 31, 2004 are deemed outstanding for computing the percentage for the person or group holding such options, but
are not deemed outstanding for computing the percentage for any other person or group.
(3) Includes 160,000 shares held in The Sooch Foundation, a private charitable foundation of which Mr. Welland serves as
a director. Mr. Welland shares voting and investment power with respect to the shares held by The Sooch Foundation.
(4) Includes 105,627 shares held in trusts for the benefit of Mr. Sooch's children, 156,126 shares held in a family limited
partnership, 160,000 shares held in The Sooch Foundation, and 158,000 shares issuable upon exercise of stock options.
11
Mr. Sooch shares voting and investment power with respect to the 105,627
shares held in trusts for the benefit of his children, the 156,126 shares
held in the family limited partnership, and the 160,000 shares held in The
Sooch Foundation.
(5) Includes 13,334 shares issuable upon exercise of stock options.
(6) Includes 74,276 shares issuable upon exercise of stock options.
(7) Includes 104,999 shares issuable upon exercise of stock options and 118,000
shares held in a family trust. Mr. Ivester has shared voting and investment
power with respect to the 118,000 shares held in the trust.
(8) Includes 75,559 shares issuable upon exercise of stock options.
(9) Includes 539,776 shares held by Silverton Partners, of which Mr. Wood is
the general partner, 14,000 shares held by Mr. Wood as custodian for
certain family members, 10,000 shares held by Mr. Wood's spouse and 55,000
shares issuable upon exercise of stock options.
(10) Includes 109,346 shares held in two trusts for the benefit of Mr. Cash's
family members and 25,000 shares issuable upon the exercise of stock
options. Mr. Cash has sole voting and investment power over the 109,346
shares held in the trusts.
(11) Includes 59,875 shares issuable upon exercise of stock options.
(12) Includes 30,000 shares issuable upon exercise of stock options.
(13) Includes 30,000 shares issuable upon exercise of stock options.
(14) Pursuant to a Schedule 13G/A dated February 16, 2004 filed with the
Securities and Exchange Commission, FMR Corp. reported that as of December
31, 2003 it and certain related entities had sole dispositive power over
4,545,437 shares and that its address is 82 Devonshire Street, Boston,
Massachusetts 02109.
(15) Pursuant to a Schedule 13G/A dated February 13, 2004 filed with the
Securities and Exchange Commission, AXA Financial, Inc. reported that as of
December 31, 2003 it and certain related entities had sole voting power
over 566,726 shares, shared voting power over 1,880,180 shares, sole
dispositive power over 2,700,513 shares and shared dispositive power over
154,700 shares and that its address is 1290 Avenue of Americas, New York,
New York 10104.
(16) Includes an aggregate of 954,202 shares issuable upon exercise of stock
options.
CERTAIN TRANSACTIONS
STOCK OPTIONS GRANTED TO DIRECTORS AND EXECUTIVE OFFICERS. For more
information regarding the grant of stock options to executive officers and
directors, please see "Director Compensation and Indemnification Arrangements"
above and "Stock Options" below.
INDEMNIFICATION, INSURANCE AND LIMITATION OF LIABILITY. Our bylaws require
us to indemnify our directors and executive officers to the fullest extent
permitted by Delaware law. We have entered into indemnification agreements with
all of our directors and executive officers and have purchased directors' and
officers' liability insurance. In addition, our certificate of incorporation
limits the personal liability of the members of our Board of Directors for
breaches by the directors of their fiduciary duties.
12
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee with respect to the
audit of the fiscal 2003 audited consolidated financial statements of Silicon
Laboratories Inc. (the "Company"):
Management is responsible for the Company's internal controls and the
financial reporting process. The independent auditors are responsible for
performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States and for issuing a report thereon. The Committee's responsibility
is to monitor and oversee these processes.
In this context, the Committee has met and held discussions with management
and the independent auditors. Management represented to the Committee that the
Company's consolidated financial statements in the Annual Report were prepared
in accordance with accounting principles generally accepted in the United
States, and the Committee has reviewed and discussed the consolidated financial
statements in the Annual Report with management and the independent auditors.
The Committee discussed with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
The Company's independent auditors also provided to the Committee the
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Committee discussed
with the independent auditors that firm's independence. The Audit Committee
reviewed non-audit services provided by its independent auditors for the last
fiscal year, and determined that those services are not incompatible with
maintaining the auditors' independence.
Based upon the Committee's discussion with management and the independent
auditors and the Committee's review of the representation of management and the
report of the independent auditors to the Committee, the Committee recommended
that the Board of Directors include the audited consolidated financial
statements in the Company's Annual Report on Form 10-K for the year ended
January 3, 2004 filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors:
William G. Bock (Chairman)
R. Ted Enloe III
William P. Wood
13
EXECUTIVE COMPENSATION
EXECUTIVE OFFICERS AND DIRECTORS
Set forth below is information regarding the executive officers and
directors of Silicon Laboratories as of January 31, 2004.
NAME AGE POSITION
- ---- --- --------
Navdeep S. Sooch . . . . . . . . . . . . . . . 41 Chairman of the Board
Daniel A. Artusi . . . . . . . . . . . . . . . 49 Chief Executive Officer, President and Director
John W. McGovern . . . . . . . . . . . . . . . 48 Chief Financial Officer
Russell J. Brennan . . . . . . . . . . . . . . 49 Chief Financial Officer--On Leave
David R. Welland . . . . . . . . . . . . . . . 48 Vice President and Director
Gary R. Gay. . . . . . . . . . . . . . . . . . 53 Vice President
Jonathan D. Ivester. . . . . . . . . . . . . . 48 Vice President
David P. Bresemann . . . . . . . . . . . . . . 38 Vice President
Bradley J. Fluke . . . . . . . . . . . . . . . 42 Vice President
Edmund G. Healy. . . . . . . . . . . . . . . . 49 Vice President
Jeffrey W. Scott . . . . . . . . . . . . . . . 42 Vice President
H. Berry Cash. . . . . . . . . . . . . . . . . 65 Director
William G. Bock. . . . . . . . . . . . . . . . 53 Director
R. Ted Enloe III . . . . . . . . . . . . . . . 65 Director
Laurence G. Walker . . . . . . . . . . . . . . 55 Director
William P. Wood. . . . . . . . . . . . . . . . 48 Director
Navdeep S. Sooch ......... co-founded Silicon Laboratories in August 1996 and has
served as Chairman of the Board since our inception. Mr.
Sooch served as our Chief Executive Officer from our
inception through the end of fiscal 2003. From March 1985
until founding Silicon Laboratories, Mr. Sooch held various
positions at Crystal Semiconductor/ Cirrus Logic, a designer
and manufacturer of integrated circuits, including Vice
President of Engineering, as well as Product Planning
Manager of Strategic Marketing and Design Engineer. From May
1982 to March 1985, Mr. Sooch was a Design Engineer with
AT&T Bell Labs. Mr. Sooch holds a B.S. in electrical
engineering from the University of Michigan, Dearborn and a
M.S. in electrical engineering from Stanford University.
Daniel A. Artusi ......... has served as our Chief Executive Officer and a member of
our Board of Directors since January 2004 and has served as
our President since January 2003. He previously served as
our Chief Operating Officer from August 2001 to January
2004. Prior to joining Silicon Laboratories, Mr. Artusi held
various positions at Motorola. From August 1999 to August
2001, Mr. Artusi served as Corporate Vice President and
General Manager of Motorola's Networking and Computing
Systems Group. Mr. Artusi served as Vice President and
General Manager of Motorola's Wireless Infrastructure
Systems Division from May 1997 to August 1999 and as General
Manager of Motorola's RF Products Division from April 1996
to May 1997. Mr. Artusi currently serves on the Board of
Directors of Powerwave Technologies. Mr. Artusi studied
electronics engineering at the Instituto Tecnologico de
Buenos Aires, Argentina from 1972 through 1976.
14
John W. McGovern ........ served as our Chief Financial Officer from December 1996
until his resignation in September 2002. He returned to the
position of Vice President and Chief Financial Officer in
June 2003 to fill the vacancy created by Mr. Brennan's
medical leave. From February 1985 to September 1996, Mr.
McGovern held various positions at Crystal
Semiconductor/Cirrus Logic including Vice President of
Finance and Division Controller. Mr. McGovern holds a B.B.A.
in accounting from the University of Texas and is a licensed
Certified Public Accountant.
Russell J. Brennan ....... has served as our Vice President and Chief Financial Officer
since September 2002. Mr. Brennan worked for Analog Devices,
Inc., a designer and manufacturer of integrated circuits,
from January 1988 to September 2002, where he most recently
served as Vice President of Finance and Corporate
Controller. From 1984 to 1988, Mr. Brennan served as
Controller for the Analog Unit of Fairchild Semiconductor, a
designer and manufacturer of semiconductors for multiple end
market applications prior to its acquisition by National
Semiconductor. From 1982 to 1984, Mr. Brennan served as
Controller for Schlumberger Well Services, a supplier for
the oil and gas industry. From 1978 to 1982, Mr. Brennan
served in various financial roles at Texas Instruments. Mr.
Brennan holds a B.A. in Economics from Boston College and a
M.B.A. with a concentration in Finance and Accounting from
New York University Graduate School of Business. Mr. Brennan
took a leave of absence following his diagnosis with
carcinoid tumors in June 2003 and is expected to resume his
duties as Vice President and Chief Financial Officer upon
successful completion of his treatment.
David R. Welland ......... co-founded Silicon Laboratories in August 1996 and has
served as a Vice President and director since our inception.
From November 1991 until founding Silicon Laboratories, Mr.
Welland held various positions at Crystal
Semiconductor/Cirrus Logic, including Senior Design
Engineer. Mr. Welland holds a B.S. in electrical engineering
from the Massachusetts Institute of Technology.
Gary R. Gay .............. joined Silicon Laboratories in October 1997 as Vice President.
Previously, Mr. Gay was with Crystal Semiconductor/Cirrus
Logic from 1985 to September 1997 where he most recently
served as Vice President of North American Sales. From 1979
to 1985, Mr. Gay was International Sales Manager and Asia
Pacific Sales Manager with Burr-Brown Corporation, a
designer and manufacturer of semiconductor components. Mr.
Gay holds a B.S. in electrical engineering from the
Rochester Institute of Technology.
Jonathan D. Ivester ...... joined Silicon Laboratories in September 1997 as Vice
President. From May 1984 to September 1997, Mr. Ivester was
with Applied Materials and served as Director of
Manufacturing and Director of U.S. Procurement in addition
to various engineering and manufacturing management
positions. Mr. Ivester was a scientist at Bechtel
Corporation, an engineering and construction company, from
1980 to 1982 and at Abcor, Inc., an ultrafiltration company
and subsidiary of Koch Industries, from 1978 to 1980. Mr.
Ivester holds a B.S. in chemistry from the Massachusetts
Institute of Technology and a M.B.A. from Stanford
University.
David P. Bresemann ....... joined Silicon Laboratories in July 1998 as Marketing
Director and has served as Vice President since May 2002.
From February 1992 to July 1998, Mr. Bresemann worked as
Director of Marketing for Crystal Semiconductor/Cirrus
Logic. Mr. Bresemann also worked as a Key Account Sales
Engineer for Analog Devices Inc. from July 1988 to January
1992. Mr. Bresemann holds a B.S. in electrical engineering
from the University of Arizona.
15
Bradley J. Fluke ......... has served as a Vice President since April 1997. Previously,
he served as the Director of Marketing of the Computer
Products Division of Crystal Semiconductor/Cirrus Logic from
June 1990 to April 1997. From 1984 to 1990, Mr. Fluke held
various marketing positions in the Data Converter Group for
Analog Devices Inc. Mr. Fluke holds a B.S. in electrical
engineering from Rochester Institute of Technology.
Edmund G. Healy .......... has served as Vice President since June 1998. From September
1992 to June 1998, Mr. Healy worked as General Manager of
the Magnetic Storage Division at Crystal
Semiconductor/Cirrus Logic. Mr. Healy held various Senior
Marketing and Product Planning positions for Zilog, a
designer and manufacturer of application specific standard
products, and GEC Plessey Semiconductor, from 1987 to 1992.
From 1983 to 1987, Mr. Healy was an Assistant Professor of
Electrical Engineering at the United States Military Academy
after serving as an Infantry Officer from 1976 to 1981. Mr.
Healy holds a B.S. in electrical engineering from the United
States Military Academy, a M.S. in electrical engineering
from Georgia Institute of Technology and a M.S. in
management from Stanford University.
Jeffrey W. Scott ......... co-founded Silicon Laboratories in August 1996 and has served
as a Vice President since our inception. From our inception
through the end of fiscal year 2003, Mr. Scott also served
as a director. From October 1989 until founding Silicon
Laboratories, Mr. Scott held various positions at Crystal
Semiconductor/Cirrus Logic, including Vice President of
Engineering (Computer Products), Design Manager and Design
Engineer. From 1985 until 1989, Mr. Scott served as a Design
Engineer with AT&T Bell Labs. Mr. Scott holds a B.S. in
electrical engineering from Lehigh University and a M.S. in
electrical engineering from the Massachusetts Institute of
Technology.
FOR INFORMATION ON OUR NON-EMPLOYEE DIRECTORS, SEE PROPOSAL ONE.
16
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned by our Chief Executive Officer and each of the four other
most highly compensated executive officers whose salary and bonus for fiscal
2003 was in excess of $100,000, for services rendered in all capacities to us
and our subsidiaries for the fiscal year ended January 3, 2004.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- -------------------------
OTHER
ANNUAL RESTRICTED SECURITIES
NAME AND COMPENSATION STOCK UNDERLYING
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARDS ($) OPTIONS
- ------------------ ---- ---------- --------- ------------ ----------- ----------
Navdeep S. Sooch................ 2003 $288,462 $580,450 $1,500 -- 20,000
Chairman of the Board(2) 2002 291,923 435,000 1,500 -- 200,000
2001 262,500 37,500 -- -- 283,000
Daniel A. Artusi................ 2003 280,000 543,790 1,500 -- 62,500
Chief Executive 2002 280,000 406,500 1,500 -- 100,000
Officer and President(3) 2001 96,923 100,000(4) -- $3,035,985(5) 400,000
Gary R. Gay..................... 2003 175,000 248,432 1,500 -- 25,000
Vice President 2002 175,000 210,350 1,500 -- 35,000
2001 166,346 35,000 1,500 -- 70,000
David R. Welland................ 2003 175,000 177,190 -- -- --
Vice President 2002 175,000 145,000 -- -- --
2001 159,616 12,500 -- -- --
Jonathan D. Ivester............. 2003 170,000 180,214 1,500 -- 20,000
Vice President 2002 164,116 176,800 1,500 -- 35,000
2001 157,308 20,000 1,500 -- 65,000
- ----------------
(1) "Other Annual Compensation" represents contributions made by the company to
match the first $1,500 of contributions made by the named executive officer
to his 401(k) plan.
(2) Mr. Sooch served as our Chief Executive Officer through the end of fiscal
year 2003.
(3) Mr. Artusi served as our President and Chief Operating Officer through the
end of fiscal year 2003 and was appointed Chief Executive Officer at the
beginning of fiscal year 2004.
(4) Includes a $50,000 reporting bonus.
(5) On August 27, 2001, Daniel Artusi purchased 150,000 shares of restricted
stock at their par value of $0.0001 per share. The closing price of our
common stock on the Nasdaq National Market on that day was $20.24 per
share. The shares vest in a series of seven equal annual installments
measured from the date of issuance. To the extent we declare any dividend
on our common stock, such dividend would be payable on such restricted
stock. As of January 3, 2004, Mr. Artusi held 107,143 shares of restricted
stock, valued at $4,746,435 based on the closing price of our common stock
on the Nasdaq National Market of $44.30 per share.
17
STOCK OPTIONS
The following table contains information concerning the stock options
granted during the 2003 fiscal year to our executive officers named in the
Summary Compensation Table of the Executive Compensation section of this Proxy
Statement. All the grants were made under our 2000 Stock Incentive Plan. Unless
otherwise indicated, the exercise prices represent the fair market value of the
common stock on the grant date.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS EXERCISE MARKET PRICE APPRECIATION
UNDERLYING GRANTED TO PRICE PRICE ON FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN PER SHARE DATE OF EXPIRATION -----------------------
NAME GRANTED FISCAL YEAR(2) ($/SH)(3) GRANT DATE 5%($) 10%($)
- ---- ---------- -------------- ---------- --------- ----------- ---------- ----------
Navdeep S. Sooch ..... 20,000(4) 1.01% $38.50 $38.50 08/17/2013 $ 484,249 $1,227,182
Daniel A. Artusi ..... 62,500(4) 3.16% 38.50 38.50 08/17/2013 1,513,278 3,834,943
Gary R. Gay .......... 25,000(4) 1.27% 38.50 38.50 08/17/2013 605,311 1,533,977
David R. Welland ..... -- -- -- -- -- -- --
Jonathan D. Ivester .. 20,000(4) 1.01% 38.50 38.50 08/17/2013 484,249 1,227,182
- --------------------------
(1) The potential realizable value is calculated from the closing price of our
common stock on the dates of grants to executive officers. These amounts
represent certain assumed rates of appreciation only. There can be no
assurance provided to any executive officer or other holder of our
securities that the actual stock price appreciation over the ten-year
option term will be at the assumed 5% and 10% levels or at any other
defined level. Unless the market price of our common stock appreciates over
the option term, no value will be realized from those option grants which
were made with an exercise price equal to the fair market value of the
option shares on the grant date.
(2) Percentage is based on 1,975,550 shares underlying options granted to
employees during the fiscal year ended January 3, 2004 from the 2000 Stock
Incentive Plan.
(3) The exercise price may be paid in cash or in shares of our common stock
valued at fair market value on the exercise date. Alternatively, the option
may be exercised through a cashless exercise procedure. Outstanding options
will become exercisable on an accelerated basis if we are acquired and (i)
such options are not assumed or (ii) upon termination under certain
circumstances within 18 months following an acquisition.
(4) Options were granted on August 18, 2003 and become exercisable with respect
to (i) twenty percent (20%) of the option shares upon optionee's completion
of one year of service measured from August 18, 2003 and (ii) the balance
of the option shares in a series of 48 equal successive monthly
installments over the 48 month period measured from the first year
anniversary of August 18, 2003.
18
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table provides information, with respect to our executive
officers named in the Summary Compensation Table of the Executive Compensation
section of this Proxy Statement, concerning the exercise of options during the
2003 fiscal year and unexercised options held by them as of the end of the 2003
fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END ($)(2)
ACQUIRED ON VALUE ------------------------------ ----------------------------
NAME EXERCISE REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------- ------------- ----------- ------------
Navdeep S. Sooch .. -- -- 145,500 357,500 $4,248,600 $8,131,000
Daniel A. Artusi .. 186,666 $2,931,598 -- 375,834 -- 7,495,316
Gary R. Gay ....... -- -- 68,109 109,891 2,072,969 1,946,231
David R. Welland .. -- -- -- -- -- --
Jonathan D. Ivester -- -- 99,083 100,917 3,455,568 1,836,883
- ---------------------
(1) Based upon the closing selling price per share of our common stock on the
Nasdaq National Market on the exercise date less the option exercise price
paid for those shares.
(2) Based upon the closing selling price per share of our common stock on the
Nasdaq National Market on the last day of the 2003 fiscal year, which was
$44.30, less the option exercise price payable per share.
19
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of January 3, 2004 with respect
to shares of our common stock that may be issued under our existing equity
compensation plans. The table does not include information with respect to
shares subject to outstanding options assumed by us in connection with the
acquisition of a company which originally granted those options. Footnote (4) to
the table sets forth the total number of shares of our common stock issuable
upon the exercise of those assumed options as of January 3, 2004, and the
weighted average exercise price of those options. No additional options may be
granted under such assumed plan.
EQUITY COMPENSATION PLAN INFORMATION
A B C
------------------- ----------------- ---------------------------
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
NUMBER OF SECURITIES WEIGHTED AVERAGE FUTURE ISSUANCE UNDER
TO BE ISSUED UPON EXERCISE PRICE OF EQUITY COMPENSATION
EXERCISE OF OUTSTANDING PLANS (EXCLUDING SECURITIES
PLAN CATEGORY OUTSTANDING OPTIONS OPTIONS REFLECTED IN COLUMN A)
- ------------- ------------------- ----------------- ---------------------------
Equity Compensation Plans
Approved by Shareholders(1).... 8,989,759(2) $23.77 5,358,013(3)
Equity Compensation Plans Not
Approved by Shareholders....... -- -- --
------------------- ----------------- ---------------------------
Total.............................. 8,989,759 $23.77 5,358,013
- ------------------------
(1) Consists of our 2000 Stock Incentive Plan and our Employee Stock Purchase
Plan.
(2) Excludes purchase rights accruing under our Employee Stock Purchase Plan.
Under the Employee Stock Purchase Plan, each eligible employee may
contribute up to 15% of his or her base salary to purchase shares of our
common stock at semi-annual intervals on the last U.S. business day of
April and October each year at a purchase price per share equal to 85% of
the lower of (i) the closing selling price per share of our common stock on
the employee's entry date into the two-year offering period in which that
semi-annual purchase date occurs or (ii) the closing selling price per
share on the semi-annual purchase date.
(3) Consists of shares available for future issuance under our Employee Stock
Purchase Plan and our 2000 Stock Incentive Plan. As of January 3, 2004, an
aggregate of 1,117,863 shares of our common stock were available for
issuance under our Employee Stock Purchase Plan and 4,240,150 shares of our
common stock were available for issuance in connection with future awards
under our 2000 Stock Incentive Plan. In addition, the share reserves under
our Employee Stock Purchase Plan and 2000 Stock Incentive Plan increase on
the first trading day of January of each calendar year by 0.5% and 5%,
respectively, of the total number of shares of our common stock outstanding
on the last trading day of the immediately preceding calendar year (subject
to a maximum annual increase of 250,000 and 3,000,000 shares,
respectively). The share reserve under our 2000 Stock Incentive Plan also
increases to the extent we repurchase shares pursuant to our repurchase
rights under our prior plan.
(4) The table does not include information for the equity compensation plan
assumed by the Company in connection with the acquisition of a company,
which originally established such plan. As of January 3, 2004, a total of
655 shares of our common stock were issuable upon exercise of outstanding
options under such assumed plan. The weighted average exercise price of
those outstanding options is $35.40 per share. No additional options may be
granted under such assumed plan.
20
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
The Compensation Committee of the Board of Directors, as Plan Administrator
of the 2000 Stock Incentive Plan, has the authority to provide for accelerated
vesting of the shares of our common stock subject to any outstanding options
held by any executive officer or any unvested share issuances actually held by
such individual, in connection with certain changes in control of us or the
subsequent termination of the officer's employment following the change in
control event.
Our 2000 Stock Incentive Plan, which governs the options granted to the
named executive officers, includes the following change in control provisions,
which may result in the accelerated vesting of outstanding option grants and
stock issuances:
o In the event that we are acquired, each outstanding option under the
discretionary option grant program, unless assumed or replaced by the
successor or otherwise continued in effect, will immediately become
exercisable for all the option shares, and all outstanding unvested
shares will immediately vest, except to the extent our repurchase
rights with respect to those shares are assigned to the successor or
otherwise continued in effect.
o The plan administrator has the authority under the discretionary
option grant program to provide that those options will automatically
vest in full (i) upon an acquisition of the company, whether or not
those options are assumed or replaced, (ii) upon a hostile change in
control of the company effected through a tender offer for more than
50% of our outstanding voting stock or by proxy contest for the
election of board members, or (iii) in the event the individual's
service is terminated, whether involuntarily or for good reason,
within a designated period (not to exceed 18 months) following an
acquisition in which those options are assumed or replaced or a
hostile change in control.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of our executive officers serves as a member of the Board of Directors
or Compensation Committee of any entity that has one or more of its executive
officers serving as a member of our Board of Directors or Compensation
Committee. No member of the Compensation Committee serves or has previously
served as one of our officers or employees.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to review and determine the
salaries and bonuses of our executive officers, including the Chief Executive
Officer, and to establish the general compensation policies for such
individuals. The Compensation Committee also has the sole and exclusive
authority to make discretionary option grants to our executive officers under
our 2000 Stock Incentive Plan.
The Compensation Committee believes that the compensation programs for our
executive officers should reflect our performance and the value created for our
stockholders. In addition, the compensation programs should support our
short-term and long-term strategic goals and values and should reward individual
contribution to our success. We are engaged in a very competitive industry, and
our success depends upon our ability to attract and retain qualified executives
through the competitive compensation packages we offer to such individuals.
GENERAL COMPENSATION POLICY. The Compensation Committee's policy is to
provide our executive officers with compensation opportunities that are based
upon their personal performance, our financial performance and their
contribution to that performance and which are competitive enough to attract and
retain highly skilled individuals. Each executive officer's compensation package
is comprised of three elements: (i) base salary that is competitive with the
market and reflects individual performance; (ii) variable performance awards
payable in cash and tied to our achievement of financial performance goals and
individual accomplishments; and (iii) long-term stock-based incentive awards
designed to strengthen the mutuality of interests between the executive officers
and our stockholders. As an officer's level of responsibility increases, a
greater proportion of his or her total compensation will be variable and
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dependent upon our financial performance and stock price appreciation rather
than base salary.
FACTORS. The principal factors that were taken into account in establishing
each executive officer's compensation package for the 2003 fiscal year are
described below. However, the Compensation Committee may in its discretion apply
entirely different factors, such as different measures of financial performance,
for future fiscal years.
BASE SALARY. In setting base salaries, the Compensation Committee engaged a
nationally recognized executive compensation consulting firm. The consulting
firm provided compensation data for comparable positions from six nationally
published surveys. The base salary for each officer reflects the salary levels
for comparable positions in the published surveys, as well as the individual's
personal performance. The relative weight given to each factor varies with each
individual in the sole discretion of the Compensation Committee. Each executive
officer's base salary is evaluated periodically on the basis of (i) the
Compensation Committee's evaluation of the officer's personal performance for
the year and (ii) the competitive marketplace for persons in comparable
positions. Our performance and profitability may also be a factor in determining
the base salaries of executive officers.
VARIABLE PERFORMANCE AWARDS. The variable performance awards have typically
been paid in cash quarterly payments based on the preceding quarterly results.
These payments, when the criteria are satisfied, are paid out shortly after the
release of the quarterly financial results. The cash awards are tied to a blend
of overall company financial performance metrics, individual performance metrics
and company-wide operating profits as a percent of revenue, which may exclude
certain non-cash charges or otherwise be adjusted at the discretion of the
Compensation Committee. The targeted cash awards are based on the published
survey data for each position. Typically, the Compensation Committee reviews the
variable performance targets in conjunction with the fiscal year operating plan
discussions.
Non-officer employees also participate in the variable cash compensation
plan. Bonuses are typically paid quarterly to eligible individuals according to
a written plan which prescribes a payout percentage of base salary based on the
overall company financial performance. The payout has typically been in the
range of 5 to 15% of base salary for most employees.
LONG TERM INCENTIVES. Generally, stock option grants to executive officers
are made at the discretion of the Compensation Committee. Each grant is designed
to align the interests of the executive officer with those of the stockholders
and to provide each individual with a significant incentive to manage the
company from the perspective of an owner with an equity stake in the business.
Each grant allows the officer to acquire shares of common stock at a fixed price
per share (the market price on the grant date) over a specified period of time
(up to ten years). Each option becomes exercisable in a series of installments
over a multi-year period, contingent upon the officer's continued employment.
Accordingly, the option will provide a return to the executive officer only if
he or she remains employed during the vesting period, and then only if the
market price of the shares appreciates over the option term.
The size of the option grant to executive officers is set by the
Compensation Committee at a level that is intended to create a meaningful
opportunity for stock ownership based upon the individual's current position,
the individual's personal performance in recent periods and his or her potential
for future responsibility and promotion over the option term. The Compensation
Committee also takes into account the number of unvested options held by the
executive officer in order to maintain an appropriate level of equity incentive
for that individual. The relevant weight given to each of these factors varies
from individual to individual. The Compensation Committee has established
certain guidelines with respect to the option grants made to the executive
officers but has the flexibility to make adjustments to those guidelines at its
discretion.
CEO COMPENSATION. In setting the total compensation payable to the Chief
Executive Officer for the 2003 fiscal year, the Compensation Committee
considered published survey data provided by our compensation consulting firm as
well as the compensation paid to the chief executive officers of seven companies
selected for comparative purposes.
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COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M). Section 162(m) of the
Internal Revenue Code precludes the company from taking a deduction for
compensation in excess of $1 million for the officers named in the Summary
Compensation Table. Certain performance-based compensation is specifically
excluded from the deduction limit. The company's policy is to qualify, to the
extent reasonable, the compensation of executive officers for deductibility
under applicable tax laws. However, the Compensation Committee believes that
it's primary responsibility is to provide a compensation program that will
attract, retain and reward the executives who will further the company's success
and that the loss of a tax deduction may be necessary in some circumstances.
It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration program
to properly align the Company's performance and the interests of the Company's
stockholders through the use of competitive and equitable executive compensation
in a balanced and reasonable manner, for both the short and long-term.
Submitted by the Compensation Committee of the Board of Directors:
William P. Wood (Chairman)
H. Berry Cash
Laurence G. Walker
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STOCK PERFORMANCE GRAPH
The graph depicted below shows a comparison of cumulative total stockholder
returns for an investment in Silicon Laboratories Inc. common stock, the Nasdaq
Stock Market (U.S.) Index and the Nasdaq Electronic Components Index.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG SILICON LABORATORIES INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ ELECTRONIC COMPONENTS INDEX
[PERFORMANCE GRAPH]
TOTAL RETURN TO SHAREHOLDERS
(INCLUDES REINVESTMENT OF DIVIDENDS)
INDEXED RETURNS
BASE YEARS ENDING
PERIOD
COMPANY / INDEX 3/24/00 12/30/00 12/29/01 12/28/02 1/3/04
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SILICON LABORATORIES INC. 100 46.37 109.77 64.35 142.90
NASDAQ STOCK MARKET (U.S.) 100 49.44 40.00 27.39 40.61
NASDAQ ELECTRONIC COMPONENTS 100 48.15 33.64 17.97 33.92
(1) The graph covers the period from March 24, 2000, the commencement of
our initial public offering of shares of our common stock, through
January 3, 2004.
(2) The graph assumes that $100 was invested in our common stock on March
24, 2000 at our initial public offering price of $31.00 per share and
in each index at the market close on March 24, 2000, and that all
dividends were reinvested. No cash dividends have been declared on our
common stock.
(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
NO INCORPORATION BY REFERENCE OF CERTAIN PORTIONS OF THIS PROXY STATEMENT
Notwithstanding anything to the contrary set forth in any of our previous
filings made under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings made by
us under those statutes, neither the preceding Stock Performance Graph, the
Audit Committee Report nor the Compensation Committee Report is to be
incorporated by reference into any such prior filings, nor shall such graph or
report be incorporated by reference into any future filings made by us under
those statutes.
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of our Board of Directors, the executive officers and persons
who hold more than 10% of our outstanding common stock are subject to the
reporting requirements of Section 16(a) of the Securities Exchange Act of 1934
which require them to file reports with respect to their ownership of the common
stock and their transactions in such common stock. Based upon (i) the copies of
Section 16(a) reports which we received from such persons for their 2003 fiscal
year transactions in the common stock and their common stock holdings and (ii)
the written representations received from one or more of such persons that no
annual Form 5 reports were required to be filed by them for the 2003 fiscal
year, we believe that all reporting requirements under Section 16(a) for such
fiscal year were met in a timely manner by its directors, executive officers and
greater than ten percent beneficial owners, except that Messrs. Bock and Cash
each failed to timely file one Form 4 with respect to shares received through
distributions from venture capital funds in which Messrs. Cash and Bock held
financial interests.
ANNUAL REPORT
A copy of the annual report for the 2003 fiscal year has been mailed
concurrently with this Proxy Statement to all stockholders entitled to notice of
and to vote at the Annual Meeting. The annual report is not incorporated into
this Proxy Statement and is not considered proxy solicitation material.
FORM 10-K
We filed an annual report on Form 10-K with the Securities and Exchange
Commission on January 27, 2004. We filed an amendment to such report on Form
10-K/A on January 28, 2004 to correct a clerical error in the original filing.
Stockholders may obtain a copy of our annual report, without charge, by writing
to our Secretary at our principal executive offices located at 4635 Boston Lane,
Austin, Texas 78735.
THE BOARD OF DIRECTORS OF SILICON LABORATORIES INC.
Dated: March 17, 2004
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EXHIBIT A
SILICON LABORATORIES INC. AUDIT COMMITTEE CHARTER
I. MEMBERSHIP:
The Audit Committee of Silicon Laboratories Inc. (the "Corporation") shall be
comprised of at least three members of the Corporation's Board of Directors (the
"Board"). The members of the Audit Committee shall be appointed by the Board and
shall collectively meet the applicable independence, financial literacy and
other requirements of The NASDAQ Stock Market ("Nasdaq") and applicable federal
law. Members of the Audit Committee may be removed at any time, with or without
cause, by the Board.
II. QUORUM:
A majority of the members of the Audit Committee shall constitute a quorum.
III. FREQUENCY:
The Audit Committee shall meet as required either on the dates of regular Board
meetings or in special meetings as appropriate.
IV. PURPOSE:
The purpose of the Audit Committee is to oversee the accounting and financial
reporting processes of the Corporation and the audits of the Corporation's
financial statements.
V. LIMITATIONS:
The Audit Committee shall not have authority to: (1) adopt, amend, or repeal the
Corporation's Bylaws; (2) fill vacancies on the Audit Committee or change its
membership; (3) amend the Corporation's Certificate of Incorporation; (4) act on
matters assigned to other committees of the Board; or (5) take any action
prohibited by the Corporation's Certificate of Incorporation, Bylaws or
applicable law.
VI. MINUTES:
Minutes will be kept of each meeting of the Audit Committee and will be provided
to each member of the Board. Unless otherwise restricted by the Corporation's
Certificate of Incorporation or Bylaws, any action that may be taken at any
meeting of the Audit Committee may be taken without a meeting, if all members of
the Audit Committee consent thereto in writing, and the writing is filed with
the minutes of proceedings of such committee. Any action of the Audit Committee
shall be subject to revision, modification, rescission, or alteration by the
Board, provided that no rights of third parties shall be affected by any such
revision, modification, rescission, or alteration.
VII. POWERS, RESPONSIBILITIES AND DUTIES:
To fulfill its responsibilities and duties, the Audit Committee shall:
o Be directly responsible for the appointment, compensation, retention
and oversight of the work of any registered public accounting firm
engaged for the purpose of preparing or issuing an audit report or
performing other audit, review or attest services for the Corporation,
and each such registered public accounting firm must report directly
to the Audit Committee.
o Resolve any disagreements between management and the Corporation's
independent auditors regarding financial reporting.
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o Review the organization's annual and quarterly financial statements
and quarterly earnings press releases.
o Pre-approve all auditing and permitted non-audit services to be
performed by the Corporation's auditors.
o Obtain, on an annual basis, a formal written statement from the
independent auditor delineating all relationships between the auditor
and the Corporation consistent with Independence Standards Board
Standard 1, and engage in a dialogue with the auditor with respect to
any disclosed relationships or services that may impact the
objectivity and independence of the auditor and take, or recommend
that the Board take, appropriate action to oversee the independence of
the independent auditor.
o Following completion of the annual audit, review separately with the
independent auditor, the internal auditing department, if any, and
management any significant difficulties encountered during the course
of the audit.
o Establish procedures for the receipt, retention and treatment of
complaints received by the Corporation regarding accounting, internal
accounting controls or auditing matters, as well as for the
confidential, anonymous submission by the Corporation's employees of
concerns regarding questionable accounting or auditing matters.
o Retain independent counsel, experts and other advisors as the Audit
Committee determines necessary to carry out its duties.
o Receive appropriate funds, as determined by the Audit Committee, from
the Corporation for payment of (i) compensation to any registered
public accounting firm engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services
for the Corporation, (ii) compensation to any independent counsel,
experts and other advisors employed by the Audit Committee, and (iii)
ordinary administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.
o Review and approve all "related-party transactions" as such term is
defined in Item 404 of Regulation S-K.
o Prepare the report of the Audit Committee required to be included in
the Corporation's annual proxy statement.
o Review and reassess the adequacy of this Charter at least annually and
recommend any changes to the Board.
o Perform any other activities consistent with this Charter, the
Corporation's Bylaws, Nasdaq rules and governing law, as the Audit
Committee or the Board deems necessary or appropriate, including,
without limitation, the delegation of authority to one or more members
of the Audit Committee of authority to carry out certain activities
set forth hereunder.
A-2
ANNUAL MEETING OF STOCKHOLDERS OF
SILICON LABORATORIES INC.
APRIL 29, 2004
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach along perforated line and mail in the envelope provided.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE /X/
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FOR AGAINST ABSTAIN
1. The Election of Directors: 2. To ratify the appointment of Ernst &
Young LLP as independent auditors of / / / / / /
CLASS III NOMINEES: Silicon Laboratories Inc. for the
/ / FOR ALL NOMINEES O Daniel A. Artusi fiscal year ending January 1, 2005.
O William G. Bock
/ / WITHHOLD AUTHORITY O R. Ted Enloe III In accordance with the discretion of the proxy holders, to act
FOR ALL NOMINEES upon all matters incident to the conduct of the meeting and upon
other matters as may properly come before the meeting.
/ / FOR ALL EXCEPT
(See instructions below) THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE DIRECTORS
LISTED ABOVE AND IN FAVOR OF THE APPOINTMENT OF ERNST & YOUNG LLP.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED
ABOVE. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN
FAVOR OF THE ELECTION OF THE DIRECTORS LISTED ABOVE AND IN FAVOR
OF THE APPOINTMENT OF ERNST & YOUNG LLP.
INSTRUCTION: To withhold authority to vote for any individual
- ------------ nominee(s), mark "FOR ALL EXCEPT" and fill in the
circle next to each nominee you wish to withhold,
as shown here: O
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To change the address on your account, please check the
box at right and indicate your new address in the address
space above. Please note that changes to the registered / /
name(s) on the account may not be submitted via this
method.
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Signature of Stockholder Date: Signature of Stockholder Date:
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NOTE: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer
is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is
a partnership, please sign in partnership name by authorized person.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SILICON LABORATORIES INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, APRIL 29, 2004
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of Annual Meeting of Stockholders (the "Annual Meeting") of Silicon
Laboratories Inc., a Delaware corporation, ("Silicon Laboratories") and the
Proxy Statement and appoints Navdeep S. Sooch and Daniel A. Artusi, and each of
them, the Proxy of the undersigned, with full power of substitution, to vote all
shares of Silicon Laboratories which the undersigned is entitled to vote, either
on his or her own behalf or on behalf of any entity or entities, at the Annual
Meeting of Stockholders of Silicon Laboratories to be held at the Lady Bird
Johnson Wildflower Center, 4801 La Crosse Avenue, Austin, Texas 78739 on
Thursday, April 29, 2004 at 9:30 a.m. Central Time, and at any adjournment or
postponement thereof, with the same force and effect as the undersigned might or
could do if personally present thereat. The shares represented by this Proxy
shall be voted in the manner set forth on the reverse side.
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SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
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