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.  Vacation may 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 conducted annually.  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.

 

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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