8-K

WASHINGTON, D.C. 20549

_______________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): December 18, 2008

MICREL, INCORPORATED

(Exact name of Registrant as specified in its charter)

California	94-2526744
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

2180 Fortune Drive, San Jose, CA 95131

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (408) 944-0800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN REPORT

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(c)

On December 18, 2008, Micrel, Inc. (the “Company”) announced the appointment of Clyde R. Wallin, age 55, to the position of Vice President, Finance and Chief Financial Officer, effective January 12, 2009.  

From April, 2008 until the present, Mr. Wallin served as Chief Financial Officer of Neterion, Inc., a networking equipment company.   Mr. Wallin served as Chief Financial Officer of Tallwood Venture Capital, a venture capital firm, from September, 2007 to January, 2008.  Mr. Wallin was employed by Sipex Corporation, an analog semiconductor company, from April, 2004 to August, 2007, where he served as Senior Vice President of Finance, Chief Financial Officer and Secretary.   From October, 2002 to April, 2004, Mr. Wallin was the Vice President of Finance and Chief Financial Officer at iWatt, Inc., a semiconductor company.  Mr. Wallin holds an MBA in Finance from the University of Chicago and a BS in Economics with Honors from the University of Oregon.

In connection with Mr. Wallin’s appointment to the position of Vice President, Finance and Chief Financial Officer, the Company and Mr. Wallin entered into an offer letter on December 13, 2008 (the “Offer Letter”).  Pursuant to the terms of the Offer Letter, Mr. Wallin will be entitled to receive an annual salary of $245,000 and will be eligible to receive an annual bonus pursuant to the Company’s cash incentive bonus program.  The current annual bonus target for Mr. Wallin’s position is $100,000.  The actual bonus payment will be based on the Company’s financial performance as measured by earnings per share and individual performance metrics, which will be evaluated on an annual basis. Mr. Wallin will also receive a signing bonus $35,000.  If Mr. Wallin leaves the Company voluntarily within two years of his hire date, he will be required to repay the full amount of the bonus. The Company also agreed to grant Mr. Wallin, subject to approval by the Compensation Committee of the Board of Directors, an option to purchase up to 200,000 shares of the Company’s common stock (the “Option”).  The Option will vest as to 40,000 shares on the first anniversary of Mr. Wallin’s hire date and in equal annual installments thereafter over four years, so long as Mr. Wallin continues to provide services to the Company.  Mr. Wallin will also enter into a change of control agreement with the Company, in which Mr. Wallin shall be entitled to a lump sum amount equal to one year base salary (subject to a general release of claims), less applicable withholdings, in the event that the Company has a change of control following the termination of employment of Mr. Raymond D. Zinn with the Company and within 12 months following such change of control, Mr. Wallin’s employment with the Company is terminated without cause.  Mr. Wallin will also enter into the Company’s standard form of indemnification agreement between the Company and its directors and executive officers.

The description of the Offer Letter is qualified in its entirety by the full text of the Offer Letter attached hereto as Exhibit 10.1 and incorporated herein by reference.

(e)

The disclosure in Item 5.02(c) above relating to the Offer Letter is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On December 18, 2008, the Company issued a press release announcing the appointment of Clyde R. Wallin,  as set forth in Item 5.02 of this Form 8-K.  A copy of the press release is furnished with this Form 8-K and attached hereto as Exhibit 99.1.  Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) The following items are filed as exhibits to this report:

99.1 Press release, dated December 18, 2008 issued by Micrel Incorporated.

10.1 Offer Letter, by and between Micrel Incorporated and Clyde R. Wallin, dated December 13, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MICREL, INCORPORATED

(the Registrant)

By:  /s/ J. Vincent Tortolano

J. Vincent Tortolano

Vice President, General Counsel and Secretary

Dated: December 18, 2008

EX-10.1

Exhibit 10.1

MICREL, INC.

2180 Fortune Drive                                                                                                                        TEL (408) 944-0800

San Jose, CA 95131 USA                                                                                                                       FAX (408) 955-1672

December 10, 2008

Ray Wallin

15288 Peach Hill Rd.

Saratoga, CA 95070

Dear Ray:

We believe that Micrel is a special place to work.  We strive to recruit only the highest quality people.  It is in this context that we are pleased to invite you to become a member of the Micrel team.  I am pleased to confirm my offer to you for the position of Vice President of Finance, Chief Financial Officer, reporting to me.  As Vice President of Finance & CFO, your regular bi-weekly salary will be $9,423.08, which is approximately $245,000.00 per year. You will also be eligible to participate in the Executive Bonus Plan.  The current annual target set for the Executive Bonus Plan is $100,000.  Actual payments under the Plan are based on the Company’s financial performance as measured by earnings per share and individual performance metrics, evaluated on an annual basis.

You will also receive a sign-on bonus of $35,000.00.  In accordance with a Sign-on Bonus Agreement that we will ask you sign, you will be required to reimburse Micrel for the full amount of the bonus if you leave the Company voluntarily within two years of your date of hire (see attached Agreement).

Also, we are pleased to offer you an option to purchase 200,000 shares of Micrel Common Stock, as approved by the Board of Directors, in accordance with the Company’s 2003 Incentive Award Plan,.  The option grant date and the vesting commencement date will be your first day of employment and the stock options will vest at 20% per year, beginning on the first anniversary of the grant date.  The exercise price for the stock option grant will be the closing price of Micrel’s Common Stock (MCRL) on your first day of employment.

We will also enter into a severance agreement with you that includes a change of control provision specifying that you will receive a severance payment equal to one year’s base salary if the following three events occur: 1) Micrel is acquired by another company;  2) CEO Ray Zinn has left the Company prior to the acquisition; and 3) as a result of the acquisition, you are no longer the Company’s Chief Financial Officer (other than for good cause.)

As a regular full-time employee, you are eligible for the standard benefits package at a nominal monthly cost.  This coverage includes major medical, dental, vision, life insurance, and long term disability and will become effective on the first of the month following your hire date.  Dependent coverage may also be elected for an additional monthly fee.  You will also be eligible for our 401(k) Plan and Employee Stock Purchase Plan (ESPP) in accordance with the terms and conditions of these programs.  Also, if you elect to join us, you will begin to accrue vacation on your date of hire at the rate specified in Micrel’s Employee Handbook.  Vacationmay be used in accordance with the policies set forth in the Handbook.  The complete benefit package will be explained in further detail at your new-hire orientation.

Our progress and growth are the result of each employee's contribution.  As responsibility increases, typically so do the rewards.  Formal performance reviews are generally conductedannually.  Salary increases will be considered based upon merit and performance, as well as market conditions and the financial performance of the Company.  The first three (3) calendar months of employment is considered an introductory period.  An informal evaluation may be conducted for a new employee after this introductory period.

Ray Wallin                                                        Page Two     December 10, 2008

As required by law, upon your first day of employment, you will be asked to provide proof of your eligibility to work legally in the United States and to sign such other documents as are customarily executed at the time of starting employment with Micrel.

Micrel is committed to providing a safe, healthy, and productive working environment.  Therefore, this offer is contingent upon the completion of a background screen, which includes prior employment, educational and criminal history, and passing a drug test to be taken after Micrel’s receipt of a written offer acceptance.  To take the drug test, bring the attached form to Alliance Occupational Medicine.  You must have your drug test completed, and test results received by Micrel, before your start date.  Moreover, in order to address rising health care costs, and out of concern for Micrel’s current employees, this offer is contingent also on your voluntarily discontinuing the use of tobacco products, i.e. smoking, if you use such products.  You will be provided assistance to identify and participate in a smoking cessation program, if necessary.  If you have any questions, contact Irma Luna, HR Staffing Coordinator, at (408) 474-1067.

Ray, we realize that this is an important decision for you.  We sincerely believe that this offer provides you with an excellent opportunity.  We are confident that Micrel will provide the challenge and growth potential you seek. This offer of employment will be open until the close of business on Monday, December 15, 2008.  We are looking forward to an affirmative response.  To accept this offer, please sign and date a copy of this letter and return it to me.  A second copy of this offer is enclosed for your personal records.  As we discussed with you previously, should you accept this offer, we expect you to commence employment no later than January 12, 2009.

For all new employees, New Hire Orientation will be on Monday beginning at 8:30 a.m. to 1:00 p.m. at 1931 Fortune Drive, San Jose, CA.

If you have any questions or need additional information, please do not hesitate to call me at (408) 435-3401.  We are excited at the prospect of having you join us at Micrel, and we look forward to working with you.

Sincerely,

/s/Ray Zinn
Ray Zinn

President, CEO

Acceptance

I am pleased to accept this offer.  I will report to work on Monday, January 12, 2009.

Signature: /s/ Clyde R. Wallin Date:12/13/08.

  Ray Wallin

EX-99

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Julieanne DiBene, Marketing Communications

1-408-474-1276

Email Julie.DiBene@Micrel.com

Micrel, Inc. Appoints Ray Wallin as Company’s New Chief Financial Officer

San Jose, Calif., Dec. 18, 2008 — Micrel Inc., (Nasdaq:MCRL), an industry leader in analog, high bandwidth communications and Ethernet IC solutions, today announced the appointment of Ray Wallin as the Company’s Vice President of Finance and Chief Financial Officer.

Wallin has more than 25 years of experience in the high technology industry.  He has held senior financial management positions at several high growth semiconductor companies and has extensive experience with both private and public firms including a proven track record of building a sound financial infrastructure within a Company.

Wallin most recently served as Chief Financial Officer of Neterion, an industry leader in 10 Gigabit Ethernet (10 GbE) adapters for server and storage environments.  In his prior role as Chief Financial Officer and Senior Vice President at Sipex Corporation, a public analog semiconductor company, Wallin managed all financial and legal functions for the Company.  He was also responsible for re-listing the Company on the NASDAQ Capital Market and successfully managing a multi-year restatement process, bringing the Company current with its periodic SEC reporting requirements.  He also has broad experience in the mergers and acquisitions arena, having been an integral part of Sipex’s sale to Exar Corporation, and the sale of Kendin Communications to Micrel.

“Ray comes to Micrel bringing with him decades of expertise and financial experience,” said Ray Zinn, President, CEO, Co-Founder and Chairman of the Board.  “Many of us at Micrel have had the opportunity to work with Ray while he was with Kendin and therefore have first hand knowledge of his business and finance acumen. We are looking forward to Ray’s contributions in the challenging times to come.”

Prior to his role at Sipex, Wallin was with iWatt, a privately held analog power management company.  Prior to iWatt, he held the role of Chief Financial Officer of Kendin.  Wallin has also held senior financial management positions with Cirrus Logic.  He holds a Masters of Business Administration in Finance from the University of Chicago and a Bachelor of Science in Economics with Honors and Phi Beta Kappa from the University of Oregon.

About Micrel, Inc.

 Micrel Inc., is a leading global manufacturer of IC solutions for the worldwide analog, Ethernet and high bandwidth markets.  The Company’s products include advanced mixed-signal, analog and power semiconductors; high performance communication, clock management, Ethernet switch and physical layer transceiver ICs.  Company customers include leading manufacturers of enterprise, consumer, industrial, mobile, telecommunications, automotive, and computer products.  Corporation headquarters and state-of-the-art wafer fabrication facilities are located in San Jose, CA with regional sales and support offices and advanced technology design centers situated throughout the Americas, Europe and Asia.  In addition, the Company maintains an extensive network of distributors and reps worldwide.  Web: http://www.micrel.com.

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