DEF 14A: Definitive proxy statements

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant [x]
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Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
[x] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

Microchip Technology Incorporated
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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or Item 22(a)(2) of Schedule 14A.

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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.

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(5) Total fee paid: ______________.

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
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statement number, or the Form or Schedule and the date of its filling.

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(4) Date Filed:
MICROCHIP
MICROCHIP TECHNOLOGY INCORPORATED
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 26, 1996
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The Annual Meeting of Stockholders of Microchip Technology Incorporated, a
Delaware corporation (the "Company"), will be held at 9:00 a.m. local time on
Friday, July 26, 1996, at the Company's facility at 1200 South 52nd Street,
Tempe, Arizona, for the following purposes:

1. To elect directors to serve until the next annual meeting of stockholders
and until their successors are elected and qualified;

2. To approve an amendment to the Company's 1993 Stock Option Plan to: (i)
increase from 3,000 to 5,000 the number of shares of Common Stock for which
options are automatically granted following the election of directors at each
annual meeting of stockholders; and (ii) increase from 8,000 to 10,000 the
number of shares of Common Stock for which options are automatically granted
following a director's initial appointment or election to the Board of
Directors;

3. To ratify the appointment of KPMG Peat Marwick LLP as the independent
auditors of the Company for the fiscal year ending March 31, 1997; and

4. To transact such other business as may properly come before the meeting or
any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.

Only stockholders of record at the close of business on May 29, 1996 are
entitled to notice of and to vote at the meeting.

All stockholders are cordially invited to attend the meeting in person. To
assure your representation at the meeting, however, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she previously has returned a
proxy.
Sincerely,


/S/ C. Philip Chapman
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C. Philip Chapman
Secretary
Chandler, Arizona
June 17, 1996
MICROCHIP

MICROCHIP TECHNOLOGY INCORPORATED
2355 WEST CHANDLER BOULEVARD
CHANDLER, ARIZONA 85224-6199

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PROXY STATEMENT
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VOTING AND OTHER MATTERS

General

The enclosed proxy is solicited on behalf of Microchip Technology
Incorporated, a Delaware corporation (the "Company"), by the Company's board of
directors (the "Board of Directors") for use at the Annual Meeting of
Stockholders to be held at 9:00 a.m. local time on Friday, July 26, 1996 (the
"Meeting"), or at any adjournment thereof, for the purposes set forth in this
Proxy Statement and in the accompanying Notice of Annual Meeting of
Stockholders. The Meeting will be held at the Company's facility at 1200 South
52nd Street, Tempe, Arizona.

These proxy solicitation materials were first mailed on or about June 17,
1996, to all stockholders entitled to vote at the Meeting.

Voting Securities and Voting Rights

Stockholders of record at the close of business on May 29, 1996 (the "Record
Date") are entitled to notice of and to vote at the Meeting. On the Record Date,
34,554,522 shares of the Company's Common Stock, par value $.001 per share (the
"Common Stock") were issued and outstanding.

The presence, in person or by proxy, of the holders of a majority of the
total number of shares of Common Stock outstanding on the Record Date
constitutes a quorum for the transaction of business at the Meeting. Each
stockholder voting at the Meeting, either in person or represented by proxy, may
cast one vote per share of Common Stock held on all matters to be voted on at
the Meeting. Assuming that a quorum is present, the affirmative vote of a
majority of the shares of Common Stock present in person or represented by proxy
at the Meeting and entitled to vote is required to amend the Company's 1993
Stock Option Plan, as proposed, and for the ratification of the appointment of
the Company's independent auditors. In the election of directors, the nominees
receiving the highest number of affirmative votes shall be elected as directors.
Votes withheld from any director are counted for purposes of determining the
presence or absence of a quorum, but have no other effect under Delaware law.

Voting of Proxies

Votes cast in person or by proxy at the Meeting will be tabulated by the
election inspector(s) appointed for the Meeting. When a proxy is properly
executed and returned, the shares it represents will be voted at the Meeting as
directed. Any proxy that is returned using the form of proxy enclosed and which
is not marked as to a particular item will be voted: (i) "FOR" the election of
the nominees set forth
in this Proxy Statement; (ii) "FOR" approval of each of the other matters
presented to stockholders in this Proxy Statement; and (iii) as the proxy
holders deem advisable on other matters that may come before the Meeting. A
stockholder may indicate on the enclosed proxy or its substitute that it is
abstaining from voting on a particular matter (an "abstention"). A broker may
indicate on the enclosed proxy or its substitute that it does not have
discretionary authority as to certain shares to vote on a particular matter (a
"broker non-vote"). Abstentions and broker non-votes are each tabulated
separately. The election inspector(s) will determine whether a quorum is present
at the Meeting. In general, Delaware law provides that a majority of the shares
entitled to vote, present in person or represented by proxy, constitutes a
quorum. Abstentions and broker non-votes of shares that are entitled to vote are
treated as shares that are present in person or represented by proxy for
purposes of determining the presence of a quorum. In determining whether a
proposal has been approved, abstention of shares that are entitled to vote are
treated as present in person or represented by proxy, but not as voting for such
proposal and hence have the same effect as votes against such proposal, while
broker non-votes of shares that are entitled to vote are not treated as present
in person or represented by proxy, and hence have no effect on the vote for such
proposal.

Revocability of Proxies

Any person giving a proxy may revoke the proxy at any time before its use by
delivering to the Company written notice of revocation or a duly executed proxy
bearing a later date or by attending the Meeting and voting in person.

Solicitation

The Company will pay all expenses of this solicitation. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for expenses incurred in forwarding solicitation materials to
such beneficial owners. Proxies also may be solicited by certain of the
Company's directors and officers, personally or by telephone or telegram,
without additional compensation. The Company may also, at its sole expense,
retain a proxy solicitation firm to assist in the distribution of proxy
solicitation materials and in the collection of proxies. If so, the Company does
not believe that the expense will exceed $15,000.

ELECTION OF DIRECTORS

Nominees

A board of four directors is to be elected at the Meeting. Unless otherwise
instructed, the proxy holders will vote the proxies received by them for each of
the nominees named below. All of the nominees are currently directors of the
Company. In the event that any such nominee is unable or declines to serve as a
director at the time of the Meeting, the proxies will be voted for any nominee
designated by the current Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director.
The term of office of each person elected as a director at the Meeting will
continue until the next annual meeting of stockholders and until a successor has
been elected and qualified.

The following table sets forth certain information regarding the nominees for
directors of the Company:

NAME AGE POSITION(S) HELD
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Steve Sanghi ................. 40 Chairman of the Board, President and Chief
Executive Officer
Albert J. Hugo-Martinez (1)(2) 50 Director
Jon H. Beedle (1) ............ 63 Director
L.B. Day (2) ................. 51 Director
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(1) Member of the Compensation Committee
(2) Member of the Audit Committee
2
Mr. Sanghi is currently, and has been since August 1990, President of the
Company, since October 1991, Chief Executive Officer and since October 1993,
Chairman of the Board of Directors. He has served as a director of the Company
since August 1990. He served as the Company's Chief Operating Officer from
August 1990 through October 1991 and as Senior Vice President of Operations from
February 1990 through August 1990. Mr. Sanghi is also a director of ADFlex
Solutions, Inc., a U.S. supplier of flexible circuit-based interconnect
solutions.

Mr. Hugo-Martinez has served as a director of the Company since October 1990.
Since March, 1996, he has served as President and Chief Executive Officer of GTI
Corporation, a manufacturer of ISDN and local area network subcomponents. From
1987 to 1995, he served as President and Chief Executive Officer of Applied
Micro Circuits Corporation, a manufacturer of high-performance bipolar and
bi-CMOS gate arrays.

Mr. Beedle has served as director of the Company since October 1993. In 1995,
Mr. Beedle retired as President of IN-STAT, Inc., a leading high technology,
market research firm, a position in which he had served since 1981. Currently,
Mr. Beedle serves as a consultant to IN-STAT. Mr. Beedle is also a director of
Bell Microproducts, a regional electronics distributor.

Mr. Day has served as a director since December 1994. Since 1976, he has
served as President of L.B. Day & Company, Inc. (formerly Day-Floren Associates,
Inc.), a management consulting firm specializing in organizational structure,
development and strategic planning.

Meetings and Committees of the Board of Directors

The Company's By-Laws authorize the Board of Directors to appoint among its
members one or more committees composed of one or more directors. The Board of
Directors has appointed a standing Audit Committee and a standing Compensation
Committee. The Company does not have a nominating committee or any committee
that performs the functions of a nominating committee. The Audit Committee is
primarily responsible for appointing the Company's independent accounting firm
and for reviewing and evaluating the Company's accounting principals and its
systems of internal controls. The Audit Committee also reviews the annual
financial statements, significant accounting and tax issues and the scope of the
annual audit with the Company's independent auditors. The Compensation Committee
reviews and acts on all matters relating to compensation levels and benefit
plans for the Company's key executives. See "Board Compensation Committee Report
on Executive Compensation," below.

The Board of Directors met eight times during the fiscal year ended March 31,
1996. The Company's Audit Committee met separately once, and the Company's
Compensation Committee met separately three times, during the fiscal year ended
March 31, 1996.

Director Compensation and Other Information

Director Fees

During fiscal 1996, directors did not receive any fees for services on the
Board of Directors. Commencing in fiscal 1997, directors receive a $10,000
annual retainer, paid quarterly, and $1,000 per meeting for each regular and
special Board of Directors' meeting. No compensation is paid for telephonic
meetings of the Board of Directors or for meetings of committees of the Board of
Directors.

Stock Options

Under the terms of the Company's 1993 Stock Option Plan, non-employee
directors receive stock options to purchase 8,000 shares of Common Stock upon
their first election to the Board of Directors and options to purchase 3,000
shares of Common Stock at the meeting of the Board of Directors held immediately
following each annual stockholders' meeting. Following the 1995 annual meeting
of stockholders on July 21, 1995, each of Messrs. Hugo-Martinez, Beedle and Day
were granted options to acquire 3,000 shares of Common Stock at an exercise
price of $36.00, such options to vest in a series of 12 equal and successive
monthly installments commencing one month after the grant date.
3
As discussed below at "Proposal To Amend The Company's 1993 Stock Option
Plan," at the Meeting the stockholders are being asked to approve an amendment
to the 1993 Stock Option Plan to: (i) increase from 3,000 to 5,000 the number of
shares of Common Stock for which options are automatically granted following the
election of directors at each annual meeting of the stockholders; and (ii)
increase from 8,000 to 10,000 the number of shares of Common Stock for which
options are automatically granted following a director's initial appointment or
election to the Board of Directors. Options granted to directors following an
annual stockholders' meeting vest in a series of 12 equal and successive monthly
installments commencing one month after the grant date; options granted upon a
director's initial appointment or election to the Board of Directors vest in a
series of 36 equal and successive monthly installments commencing one month
after the grant date. If the proposed amendment is approved by the stockholders,
then following the Meeting, each of the directors elected by the stockholders at
the Meeting, and at each subsequently held meeting of the stockholders where
directors are elected, will automatically be granted an option to acquire 5,000
shares of Common Stock at an exercise price equal to the fair market value of a
share of the Common Stock on the date of the Meeting, to vest as described
above. If the proposed amendment is not approved, the directors so elected at
the Meeting will automatically be granted an option to purchase 3,000 shares of
Common Stock at an exercise price equal to the fair market value of a share of
the Common Stock on the date of the Meeting, to vest as described above.

EXECUTIVE COMPENSATION

Summary of Cash and Other Compensation

The following table sets forth the compensation earned by the Company's Chief
Executive Officer and each of the Company's four other most highly compensated
executive officers whose aggregate annual cash compensation exceeded $100,000
for services rendered in all capacities to the Company (collectively, the "Named
Executive Officers") for the three fiscal years ended March 31, 1996, 1995 and
1994:
Summary Compensation Table