<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
UNITRODE CORPORATION
(Name of Registrant as Specified In Its Charter)
UNITRODE CORPORATION
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
[Unitrode Logo]
UNITRODE CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 1997
To The Stockholders:
The Annual Meeting of Stockholders of Unitrode Corporation (the
"Corporation") will be held on Monday, June 2, 1997 at 11:00 a.m. at the
Executive Leadership Center, Boston University School of Management, 595
Commonwealth Avenue, Boston, Massachusetts to consider and vote upon:
1. The election of two directors for a three-year term ending in
2000.
2. Approval and ratification of an amendment to the Unitrode 1992
Employee Stock Option Plan to increase the number of shares of Common Stock
available for issuance under the Plan from 2,000,000 shares to 3,000,000
shares.
3. Such other business as may properly come before the meeting or any
adjournment or postponement thereof.
The Board of Directors has fixed the close of business on Friday, April 4,
1997 as the Record Date for determining the stockholders entitled to notice of
and to vote at the meeting.
IN ORDER THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING IN CASE YOU ARE
NOT PERSONALLY PRESENT, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ACCOMPANYING ADDRESSED ENVELOPE. NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES.
By order of the Board of Directors,
ALLAN R. CAMPBELL
Senior Vice President,
General Counsel and Secretary
7 Continental Boulevard
Merrimack, New Hampshire 03054
April 25, 1997
<PAGE> 3
UNITRODE CORPORATION
7 CONTINENTAL BOULEVARD
MERRIMACK, NEW HAMPSHIRE 03054
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JUNE 2, 1997
This Proxy Statement and the enclosed form of proxy are furnished to
stockholders of Unitrode Corporation, a Maryland corporation (the
"Corporation"), in connection with the solicitation by the Board of Directors of
proxies to be used at the Annual Meeting of Stockholders of the Corporation to
be held Monday, June 2, 1997 at the time and place set forth in the accompanying
Notice of Annual Meeting of Stockholders and at all adjournments or
postponements thereof. Any person giving the enclosed form of proxy has the
power to revoke it by voting in person at the Annual Meeting, by delivery of a
later-dated proxy, or by giving written notice to the Secretary of the
Corporation at any time before the proxy is exercised. This Proxy Statement and
the enclosed form of proxy are first being sent to stockholders on or about
April 25, 1997.
The Corporation will bear the cost of solicitation of proxies. In addition
to solicitation by mail, proxies may be solicited by directors, officers and
employees of the Corporation, personally or by telephone, and the Corporation
may reimburse brokerage firms, banks, custodians, nominees and their fiduciaries
for their reasonable out-of-pocket expenses in forwarding proxy materials to
their principals. In addition, the Corporation has retained Georgeson & Co. to
assist in the solicitation of proxies. The fees of Georgeson & Co. are expected
to aggregate approximately $7,000 plus reimbursement for out-of-pocket expenses.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on Friday, April 4,
1997, are entitled to vote at the Annual Meeting. On that date, the Corporation
had outstanding 11,710,174 shares of common stock, each of which is entitled to
one vote.
VOTES REQUIRED FOR APPROVAL
The election of directors requires the affirmative vote of the holders of a
majority of all the shares entitled to vote at the meeting in person or by
proxy. For purposes of the election of directors, abstentions will not be
counted as votes cast and will have the effect of negative votes, although they
will count toward the presence of a quorum.
The approval of the amendment to the 1992 Employee Stock Option Plan
requires the affirmative vote of a majority of the votes cast at the meeting.
For purposes of the vote on the proposed amendment, abstentions and broker
non-votes will have no effect on the result of the vote. Both abstentions and
broker non-votes will count toward the presence of a quorum.
ELECTION OF DIRECTORS
The Charter of the Corporation provides that the Board of Directors shall
be divided into three classes, with each class as nearly equal in number as
possible, and that one class shall be elected each year for a term of three
years. Edward H. Browder and Kenneth Hecht are currently serving in the class of
directors of the Corporation whose term expires at this Annual Meeting. It is
proposed that Mr. Browder and Mr. Hecht be elected to serve for three-year terms
which will expire in 2000. The persons named in the accompanying proxy
1
<PAGE> 4
will vote, unless authority is withheld, for the election of the nominees named
below, to serve for the specified term and until their successors shall be duly
elected and qualify, or until their earlier resignation or removal. If a nominee
should become unavailable for election, which is not anticipated, the persons
named in the accompanying proxy will vote for such substitute as the Board of
Directors may propose.
The following table sets forth information concerning the nominees for
election and directors whose terms continue beyond the date of this Annual
Meeting.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION, OTHER BUSINESS
YEAR FIRST EXPERIENCE DURING THE PAST FIVE
ELECTED A YEARS AND DIRECTORSHIPS IN OTHER
NAME AGE DIRECTOR PUBLIC COMPANIES
- ----------------------------------- ---- ---------- ----------------------------------------
<S> <C> <C> <C>
NOMINEES WHOSE TERMS EXPIRE IN
2000:
Edward H. Browder(4)............... 57 1991 President of Unitrode Corporation since
January 1996. From 1994 to 1995,
President of Seacliff Technologies, a
distributor of field-programmable gate
arrays. From 1990 to 1994, President and
Chief Executive Officer of Concurrent
Logic, Inc., Sunnyvale, California, a
manufacturer of field-programmable gate
arrays.
Kenneth Hecht(2)(3)................ 62 1974 Co-Director of California Food Policy
Advocates since October 1992. Attorney
and consultant to public interest
organizations prior to October 1992.
DIRECTORS WHOSE TERMS EXPIRE IN
1998:
Peter A. Brooke(1)(3)(4)........... 67 1962 Chairman, Advent International
Corporation, an international venture
investment and services company.
Director of New England Business
Services, Inc.
Robert L. Gable(4)................. 66 1988 Chairman and Chief Executive Officer of
Unitrode Corporation. President of
Unitrode Corporation from 1992 to
January 1996. Director of New England
Business Services, Inc.
DIRECTORS WHOSE TERMS EXPIRE IN
1999:
Louis E. Lataif(1)(4).............. 58 1995 Dean of the School of Management at
Boston University from 1991 to present.
From 1981 to 1991, Vice President of
Ford Motor Company. Director of Great
Lakes Chemical Co.
James T. Vanderslice(2)............ 56 1995 General Manager of the IBM Corporation
Storage Systems Division since August
1995. From 1991 to 1995, General Manager
of the IBM Corporation high-end and
mid-range system printer business.
</TABLE>
- ---------------
(1) Member of the Audit Committee.
(2) Member of the Executive Compensation Committee.
(3) Member of the Nominating Committee.
(4) Member of the Executive Committee.
2
<PAGE> 5
BOARD MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors has an Audit Committee, Executive Compensation
Committee, Executive Committee and Nominating Committee.
All members of the Audit Committee are non-employee directors. The
principal functions of the Audit Committee are to review with the Corporation's
independent auditors the scope of the audit for each year, the results of the
audit when completed, the recommendations of the auditors and responses thereto
by management, and the auditors' fees for services performed, taking into
account the relationship of audit and non-audit professional fees. The Audit
Committee also reviews with management matters brought to its attention by the
auditors relating to accounting systems, including internal accounting controls
and financial reporting. The Audit Committee met twice during the last fiscal
year.
All members of the Executive Compensation Committee are non-employee
directors. The Executive Compensation Committee serves as the administrator of
all of the Corporation's benefit plans other than the Unitrode Profit
Sharing/401(k) Savings Plan. The Executive Compensation Committee reviews the
compensation of the Corporation's officers and recommends action to the Board
with respect to officers' compensation, including salary adjustments and the
award of any cash bonuses. The Executive Compensation Committee also makes
awards of restricted stock and grants of stock options under the Corporation's
restricted stock and stock option plans. The Executive Compensation Committee
met on the days of meetings of the Board of Directors and performed other
functions by unanimous written consent in lieu of a meeting.
The Executive Committee has all of the powers of the Board of Directors,
except as prohibited by applicable law. There were no meetings of the Executive
Committee during the last fiscal year.
The Nominating Committee recommends to the Board of Directors the
individuals to be proposed by the Board for election as directors. The
Nominating Committee may also recommend to the Board persons to be elected by
the Board to key offices and positions in the Corporation. The Nominating
Committee will consider persons recommended by shareholders to be nominated to
stand for election as Directors if the recommendations are submitted in writing
to the Secretary of the Corporation in accordance with the provisions of the
Corporation's Advance Notice By-law (see "Advance Notice By-law" below). There
were no meetings of the Nominating Committee during the last fiscal year; its
functions were performed by the full Board of Directors.
During the fiscal year, there were eight meetings of the Board of
Directors. All of the Directors attended all of the meetings of the Board and of
committees of which they were members.
DIRECTORS' FEES AND OTHER REMUNERATION
Non-Employee Directors of the Corporation are paid an annual fee of
$15,000, a fee of $2,000 for each day the Director participates in person in a
meeting of the Board and/or of any committee, $500 for participation in any such
meeting by telephone conference call, and reimbursement of expenses for at-
tendance at meetings. Non-Employee Directors also receive grants of stock
options under the Corporation's Amended and Restated 1986 Non-Employee Directors
Stock Option Plan. Each Non-Employee Director is automatically granted an option
to acquire 2,000 shares of the Corporation's common stock on the date of his
appointment or election to the Board of Directors. Following the initial grant,
each then-current Non-Employee Director is automatically granted an option for
2,000 shares on the date of each annual meeting of the stockholders of the
Corporation. Options are granted at fair market value on the date of the grant
and become exercisable in six months from the date of the grant.
3
<PAGE> 6
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of April 4, 1997, those persons known to
the Corporation who may be deemed to be beneficial owners of more than five
percent of the outstanding shares of common stock of the Corporation. Unless
otherwise indicated, the persons named below have sole voting and investment
power over the shares listed below:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
- ------------------------------------------------------------- ---------------- -------
<S> <C> <C>
Oppenheimer Group, Inc....................................... 1,279,850 shares(1) 10.93%
Oppenheimer Tower
World Financial Center
New York, NY 10251
United States Trust Company of New York...................... 1,087,904 shares(2) 9.29%
114 West 47th Street
New York, NY 10036-1532
Trimark Financial Corporation, Inc........................... 1,058,200 shares(3) 9.04%
One First Canadian Place
Suite 5600, P.O. Box 487
Toronto, Ontario M5X 1E5
Wilke/Thompson Capital Management, Inc....................... 612,050 shares(4) 5.23%
3800 Norwest Center
90 S. 7th Street
Minneapolis, MN 55402
</TABLE>
- ---------------
(1) Based upon a Schedule 13G filed with the Securities and Exchange Commission
by Oppenheimer Group, Inc. on behalf of certain subsidiary companies of
Oppenheimer Group, Inc., and/or certain investment advisory clients or
discretionary accounts of such subsidiaries, which states that as of January
15, 1997, such entities had shared voting and disposition powers with
respect to these shares.
(2) Based upon a Schedule 13G filed with the Securities and Exchange Commission
which states that as of February 14, 1997, U.S. Trust Company had shared
voting and disposition power with respect to these shares via either a
trust/fiduciary capacity and/or a portfolio management/agency relationship.
(3) Based upon a Schedule 13G filed with the Securities and Exchange Commission
which states that as of December 31, 1996, Trimark Financial Corporation,
Inc. is the 100% owner of Trimark Investment Management, Inc., which has
voting and disposition power with respect to these shares in its role as the
trustee and manager of the assets of certain Trimark mutual funds.
(4) Based upon a Schedule 13G filed with the Securities and Exchange Commission
which states that as of December 31, 1996, Wilke/Thompson Capital
Management, Inc. had sole voting and disposition power with respect to all
the shares listed.
4
<PAGE> 7
SECURITIES OWNERSHIP OF MANAGEMENT
The following information is furnished as of April 4, 1997 with respect to
shares of common stock of the Corporation beneficially owned by each Director,
each of the named executive officers, and by all directors and officers as a
group. Unless otherwise indicated, the individuals named had sole voting and
investment power over the shares listed.
<TABLE>
<CAPTION>
SHARES PERCENT OF
BENEFICIALLY OUTSTANDING
NAME OWNED(1) COMMON STOCK
- ---- ------------ ------------
<S> <C> <C>
Peter A. Brooke............................................ 24,762 *
Edward H. Browder.......................................... 36,000 *
Robert L. Gable............................................ 241,500(2) 2.06%
Kenneth Hecht.............................................. 80,020 *
Louis E. Lataif............................................ 6,000 *
James T. Vanderslice....................................... 4,000 *
Allan R. Campbell.......................................... 114,000(2)(3) *
Patrick J. Moquin.......................................... 11,250 *
Cosmo S. Trapani........................................... 87,000(2) *
All officers and directors as a group (10 persons)......... 646,796 5.52%
</TABLE>
- ---------------
* Percentage is less than 1% of the total number of outstanding shares of
common stock of the Corporation.
(1) Includes shares subject to options exercisable within 60 days from April 4,
1997 for the purchase of the following numbers of shares: Mr. Brooke, 18,000
shares; Mr. Browder, 35,000 shares; Mr. Gable, 119,000 shares; Mr. Hecht,
18,000 shares; Mr. Lataif, 4,000 shares; Dr. Vanderslice, 4,000 shares; Mr.
Campbell, 62,500 shares; Mr. Moquin, 11,250 shares; Mr. Trapani, 37,500
shares; and all officers and directors as a group, 343,000 shares. Also
includes as to all officers and directors as a group an aggregate of 16,000
shares which are subject to reconveyance or forfeiture.
(2) Includes 10,000 shares in the case of Mr. Gable; 2,000 shares in the case of
Mr. Campbell; and 2,000 shares in the case of Mr. Trapani which are subject
to reconveyance or forfeiture.
(3) Includes 500 shares held by Mr. Campbell's spouse, as to which Mr. Campbell
disclaims beneficial ownership.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Board of Directors has an Executive Compensation Committee (the
"Committee") consisting of the directors whose names are set forth below this
report. Each member of the Committee is a "non-employee director" for purposes
of Rule 16b-3 under the Securities Exchange Act of 1934. This report, prepared
by the Committee, sets forth the Corporation's compensation policies for the
fiscal year ended January 31, 1997 as such policies affected the Corporation's
executive officers.
COMPENSATION POLICY
It is the policy of the Committee to link the compensation of the
Corporation's executive officers with the achievement of both corporate
performance objectives and individual objectives related to the executive
officers' specific areas of responsibility. It is also the policy of the
Committee to set executive compensation at levels it believes are consistent and
competitive with other companies in the Corporation's industry, and at levels
that it believes will enable the Corporation to attract and retain superior
executive talent.
5
<PAGE> 8
The Committee also believes that ownership of the Corporation's stock by
management is an effective means of aligning the interests of the stockholders
and management in the enhancement of shareholder value. For this reason, the
Committee has used in the past and expects in the future to continue to use the
Corporation's stock option plans to encourage equity ownership by management in
the Corporation and to provide added long-term incentive to management to work
for the continued growth and success of the Corporation.
RELATIONSHIP OF COMPENSATION TO COMPANY PERFORMANCE
The compensation of the executive officers for the fiscal year ended
January 31, 1997 included base salary and annual variable performance incentives
earned under the Corporation's Management Bonus Program. In addition, the
Committee granted stock options under the Corporation's 1992 Employee Stock
Option Plan. Total annual cash compensation varies each year based upon
achievement of company financial performance goals approved by the Board of
Directors, achievement of agreed-upon individual performance goals, and changes
in base salary.
Base salaries are targeted to be competitive with other companies in the
Corporation's industry. Management examines salary survey data published by the
American Electronics Association for executives with similar responsibilities in
electronics companies and recommendations are made to the Committee and the
Board of Directors. Individual base salaries are then set or adjusted by the
Committee, subject to ratifi-cation by the Board of Directors, based on
experience, sustained performance, and comparisons to peers inside and outside
the Corporation.
The financial performance goal upon which payments under the Management
Bonus Program are based is earnings per share for the Corporation. Subjective
performance criteria encompass evaluation of each executive officer's initiative
and contribution to overall corporate performance, managerial ability,
performance on special projects undertaken and performance against previously
agreed-upon management objectives.
In order for an executive to be eligible for any payment under the
Management Bonus Program, certain earnings-per-share thresholds must be met.
Payments under the Management Bonus Program to the executive officers for the
fiscal years ended January 31, 1995 and 1996 were made as indicated in the
Summary Compensation Table included in this proxy statement and were based on
the Committee's determination, in February 1995 and 1996 of the levels of
attainment of the goals described above which had been established by the
Committee in February 1994 and 1995, respectively. No bonuses were awarded for
the fiscal year ended January 31, 1997 because the earnings-per-share threshold
required for the award of bonuses was not met.
Long-term incentives applicable to the executive officers consist of stock
awards made under the Corporation's 1984 Restricted Stock and Cash Bonus Plan
and stock option grants made under the Corporation's 1983 and 1992 Employee
Stock Option Plans. The Restricted Stock Plan provides for the award of
so-called "restricted stock" which may not be transferred, with restrictions on
transfer lapsing for 20% of the grant for each year that the grantee remains
employed by the Corporation. Shares upon which restrictions have not lapsed are
required to be reconveyed to the Corporation if the executive's employment with
the Corporation is terminated. Stock option grants provide the right to purchase
shares of the Corporation's common stock at the fair market value of such stock
as of the date of grant. Each stock option becomes exercisable in four equal
installments. The number of options granted is determined at the discretion of
the Committee. Generally, the higher level of the executive officer, the greater
number of options granted. The Committee believes that the number of shares
covered by each grant reflects competitive industry practice, rewards recipients
for contribution to improvements in corporate performance, provides an incentive
for future performance and serves to align the interests of the executive
officers with the interests of all stockholders in the creation of stockholder
value.
6
<PAGE> 9
The Corporation has adopted the Unitrode Corporation Profit Sharing/401(k)
Savings Plan, which is a broad-based employee benefit plan in which all regular
domestic employees are eligible to participate after three months of employment.
Under the profit-sharing portion of the plan, the Corporation makes an annual
contribution to the plan's trust fund for the account of a participant based
upon the profit performance of the Corporation as determined by the Board of
Directors. Under the 401(k) portion of the plan, the Corporation matches 50% of
an employee's contributions up to 2 percent of the employee's annual eligible
compensation as determined in accordance with the plan. The executive officers
participate in certain other broad-based benefit plans in which benefits are not
directly or indirectly tied to Corporation performance.
MR. GABLE'S COMPENSATION FOR THE FISCAL YEAR ENDED JANUARY 31, 1997
Mr. Gable's base salary is designed to be competitive with base salaries
paid to other chief executive officers of corporations with similar revenues and
scope of operations in the electronics industry. Mr. Gable has received
increases in his base salary of 5.5%, 7.7% and 5.0% since his joining the
Corporation as Chief Executive Officer in June 1991. The Committee has
established target payment levels and target performance levels under the
Management Bonus Program for the fiscal year ending January 31, 1998 affecting
Mr. Gable.
The Committee made no award to Mr. Gable under the Management Bonus Program
for the fiscal year ending January 31, 1997 because the minimum
earnings-per-share threshold required for an award was not met.
Respectfully submitted,
Kenneth Hecht, Chairman
James T. Vanderslice
7
<PAGE> 10
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table shows, as to the Chief Executive Officer and each of
the four other most highly compensated executive officers, information
concerning compensation paid for services to the Corporation in all capacities
during the fiscal year ended January 31, 1997, as well as compensation paid to
each such individual for the Corporation's two previous fiscal years:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
-------------------------------------- ------------------------
OTHER ANNUAL ALL OTHER
NAME AND FY ENDED COMPENSATION NO. OF COMPENSATION
PRINCIPAL POSITION 1/31 SALARY BONUS (2) OPTIONS (3)
- ------------------------- -------- -------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Gable 1997 $220,000 $ 0 $ 66,710 -0- $ 11,113
Chairman and Chief 1996 $216,404 $220,000 $129,934 100,000 $ 16,864
Executive Officer 1995 $204,837 $110,627 $149,391 -0- $ 18,318
Edward H. Browder(1) 1997 $220,000 $ 0 $ 0 -0- $ 10,100
President 1996 $ 14,244 $ 0 $ 0 100,000 $ 0
Cosmo S. Trapani 1997 $199,000 $ 0 $ 17,374 20,000 $ 10,444
Exec. Vice President and 1996 $192,562 $194,000 $ 23,381 -0- $ 16,346
Chief Financial Officer 1995 $184,837 $ 98,527 $ 27,962 30,000 $ 18,318
Allan R. Campbell 1997 $167,750 $ 0 $ 17,374 20,000 $ 10,242
Senior Vice President, 1996 $162,561 $164,000 $ 22,381 -0- $ 16,467
General Counsel and 1995 $156,833 $ 80,637 $ 38,801 30,000 $ 18,318
Secretary
Patrick J. Moquin(1) 1997 $137,700 $ 0 $ 0 20,000 $ 10,035
Vice President, 1996 $ 67,500 $ 67,500 $ 0 25,000 $ 0
Human Resources
</TABLE>
- ---------------
(1) Mr. Browder joined the Corporation as President on January 8, 1996. Mr.
Moquin joined the Corporation as Vice President, Human Resources, on July
31, 1995.
(2) Amounts paid were bonuses based on taxes incurred on vesting of restricted
stock pursuant to the Corporation's 1984 Restricted Stock and Cash Bonus
Plan.
(3) "All Other Compensation" includes profit sharing and matching contributions
made to the Corporation's Profit Sharing/401(k) Plan.
OPTION GRANTS
The Corporation's 1983 Stock Option Plan and 1992 Employee Stock Option
Plan provide for the grant of options to officers and key employees of the
Corporation. Options granted under the plans may be either "non-qualified
options" or "incentive stock options". The exercise price is determined by the
Executive Compensation Committee and may not be less than 100% of the fair
market value of the common stock of the Corporation on the date of the grant of
the options. The options expire not more than ten years from the date of the
grant, and may be exercised only while the optionee is employed by the
Corporation, or within one year after death or within sixty days after
termination of employment. The Executive Compensation Committee may determine
when options granted may be exercisable. Options are normally granted to be
exercisable at the rate of one-quarter of the grant per year, commencing six
months or one year from the date of the grant. In the event of a change of
control of the Corporation, the Board of Directors may make all options
immediately vested and exercisable. As of April 27, 1992, no further options
were granted under the 1983 Stock Option Plan.
8
<PAGE> 11
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options granted during
the fiscal year ended January 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUES AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATE OF STOCK
------------------------------------------------------- PRICE APPRECIATION
NO. OF % OF TOTAL OPTIONS FOR OPTION TERM(1)
OPTIONS GRANTED EMPLOYEES EXERCISE EXPIRATION --------------------
NAME GRANTED IN FISCAL YEAR PRICE DATE 5% 10%
- ---------------------------- ------- ------------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Gable............. -0- -0- -- -- -- --
Edward H. Browder........... -0- -0- -- -- -- --
Cosmo S. Trapani............ 20,000 8.0613% $28.50 6/3/06 $358,470 $908,433
Allan R. Campbell........... 20,000 8.0613% $28.50 6/3/06 $358,470 $908,433
Patrick J. Moquin........... 20,000 8.0613% $28.50 6/3/06 $358,470 $908,433
</TABLE>
- ---------------
(1) The 5% and the 10% assumed rates of appreciation, using the stock price as
of the date of grant as the basis, are mandated by the rules of the
Securities and Exchange Commission and do not represent the Corporation's
estimate or projection of the future value of the Corporation's common
stock.
OPTION EXERCISES AND YEAR-END VALUES
The following table shows, as to the individuals named in the Summary
Compensation Table above, information concerning stock options exercised during
the fiscal year ended January 31, 1997.
AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT FY END(#) MONEY OPTIONS AT FY END
ACQUIRED ON VALUE ---------------------------- ----------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Gable........ -0- -0- 102,000 50,000 $ 1,860,625 $ 259,375
Edward H. Browder...... -0- -0- 35,000 75,000 $ 469,938 $ 717,188
Cosmo S. Trapani....... 5,500 $100,031 37,500 27,500 $ 906,875 $ 312,813
Allan R. Campbell...... 5,000 $ 71,438 62,500 27,500 $ 1,681,250 $ 312,813
Patrick J. Moquin...... -0- -0- 6,250 38,750 $ 53,516 $ 313,047
</TABLE>
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
stockholder returns for the Corporation, the Standard & Poor's 500 Stock Index
and the Standard & Poor's Electronics (Semiconductors) Index.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG UNITRODE CORPORATION, THE S & P 500 INDEX
AND THE S & P ELECTRONICS (SEMICONDUCTORS) INDEX
[GRAPH]
<CAPTION>
CUMULATIVE TOTAL RETURN
- ----------------------------------------------------------------------------------------
1/92 1/93 1/94 1/95 1/96 1/97
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UNITRODE CORPORATION UTR 100 176 220 276 389 544
S & P 500 I500 100 111 125 125 174 220
S & P ELECTRONICS (SEMICONDUCTORS) IELS 100 155 227 257 318 752
- ----------------------------------------------------------------------------------------
* $100 INVESTED ON 1/31/92 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JANUARY 31.
</TABLE>
10
<PAGE> 13
APPROVAL OF AMENDMENT TO UNITRODE CORPORATION
1992 EMPLOYEE STOCK OPTION PLAN
On March 17, 1997, the Board of Directors adopted, subject to stockholder
approval, an amendment to the Company's 1992 Employee Stock Option Plan (the
"Plan") to increase the number of shares of Common Stock available for issuance
under the Plan from 2,000,000 shares to 3,000,000 shares. The purpose of the
Plan is to promote the interests of the Corporation by encouraging key employees
to acquire or increase their equity interests in the Corporation, thereby giving
them an added incentive to work for its continued growth and success. In June,
1995, the Board of Directors instituted a program under the Plan entitled the
Unishare Program. The objective of the Unishare Program was to enable all
full-time employees of the Corporation who had not previously participated in
the Plan to share in the success of the Corporation through the grant of an
option to purchase 100 shares of the Corporation's stock. In June, 1995, 391
employees received Unishare grants, and in June, 1996, an additional 116
employees received Unishare grants. It is the Board's present intention to
continue the Unishare Program into the future. The Board of Directors believes
that the increase in shares available for issuance under the Plan from 2,000,000
to 3,000,000 shares will provide sufficient shares through the remaining life of
the Plan both for grants to key senior management employees, as well as all
other employees through the Unishare Program. The following is a summary of
certain provisions of the Plan:
Administration. The Plan provides for administration by a committee (the
"Committee") to be comprised of no fewer than two members of the Board of
Directors of the Corporation, each of whom must be a "non-employee director"
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934. The
Board of Directors has determined that the individuals who serve as the
Executive Compensation Committee of the Board of Directors shall serve as the
Committee under the Plan. See "Board Meetings and Committees of the Board".
Among the powers granted to the Committee are the authority to make all
determinations necessary for administration of the Plan, including selection of
employees to whom awards shall be made and the establishment of terms of
specific awards, to interpret the Plan and any awards granted under the Plan,
and to establish rules and regulations to carry the Plan into effect.
Eligibility for Participation. All key employees of the Corporation or of
any of its subsidiaries are eligible to be selected to participate in the Plan.
The selection of recipients from among key employees is within the discretion of
the Committee. The approximate number of key employees who presently are
eligible to participate in the Plan is 577.
Types of Awards; Available Shares. As more fully described below, the Plan
provides for the grant of stock options, including incentive stock options and
non-qualified stock options and stock appreciation rights ("SARs"). As of March
19, 1997, there were outstanding under the Plan options to purchase 1,109,911
shares of common stock at a weighted average option price of $21.9243 per share
with expiration dates ranging from April 27, 2002 to December 9, 2006. As of
March 19, 1997, there were 547,479 shares available for grant under the Plan,
without giving effect to the increase in shares from 2,000,000 to 3,000,000
shares. On March 18, 1997, the average of the high and low prices of the
Corporation's common stock was $33.75.
The following table shows as to the executive officers named in the
compensation table on page 8 who hold options under the Plan, as to all current
executive officers as a group and as to all non-executive officer employees as a
group (i) the number of shares covered by options granted between April 27, 1992
and April 1,
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<PAGE> 14
1997 and the weighted average per share option price thereof, and (ii) the
number of shares acquired during such period upon the exercise of options and
the net value realized upon such exercise:
<TABLE>
<CAPTION>
GRANTED EXERCISED
APRIL 27, 1992 APRIL 27, 1992
TO TO
APRIL 1, 1997 APRIL 1, 1997
------------------------------------ -------------------------------
WEIGHTED AVERAGE AGGREGATE
NUMBER OF SHARES PER SHARE NUMBER OF SHARES NET VALUE
OF COMMON STOCK OPTION PRICE OF COMMON STOCK REALIZED(1)
---------------- ---------------- ---------------- -----------
<S> <C> <C> <C> <C>
Robert L. Gable................. 100,000 $30.9375 0 0
Edward H. Browder............... 100,000 $26.5625 0 0
Cosmo S. Trapani................ 65,000 $17.3606 5,000 $ 134,375
Allan R. Campbell............... 65,000 $17.3606 0 0
Patrick J. Moquin............... 45,000 $27.9792 0 0
All current officers as a group
(6 persons)................... 417,000 $23.9399 5,000 $ 134,375
Non-officer employee group (512
persons)...................... 1,158,750 $17.5280 342,610 $ 3,791,011
</TABLE>
- ---------------
(1) Represents the difference between the option price and the fair market value
of the shares of Common Stock acquired as of the date of exercise.
Stock Options and SARs. Each non-qualified stock option ("NQSO") and
incentive stock option ("ISO") shall entitle the holder to purchase a specified
number of shares of common stock as determined by the Committee. The exercise
price of each NQSO and ISO granted under the Plan shall be not less than the
fair market value of a share of common stock on the date on which such NQSO and
ISO are granted. The exercise price shall be paid in cash or, subject to the
approval of the Committee, in shares of common stock valued at their fair market
value, or by any combination of cash and shares of common stock. An ISO or NQSO
will be exercisable for a term established by the Committee, but in no event to
exceed ten years.
The Committee may grant SARs, which entitle the recipient to receive a
payment equal to the excess of the fair market value on the date of exercise of
a stated number of shares over the exercise price specified in an option or SAR
agreement. The payment may be made in cash or in shares of common stock, or
partly in cash and partly in shares, at the discretion of the Committee. SARs
may be granted in tandem with options, in which case the option is canceled to
the extent the tandem SAR is exercised and the tandem SAR is canceled to the
extent the related option is exercised, or as freestanding SARs.
Options and SARs granted under the Plan are not transferable otherwise than
by will or under the laws of descent and distribution. They are canceled upon
termination of employment, except that exercise after termination is permitted
in certain cases, including those instances when employment terminates because
of the recipient's retirement, death or disability.
Certain Federal Income Tax Consequences. A recipient recognizes no taxable
income at the time a stock option is granted under the Plan. With regard to
NQSOs, ordinary income is recognized by the recipient at the time of his or her
exercise of an option. The amount of income recognized is equal to the excess of
the fair market value of the shares on the date of exercise over the exercise
price. Tax withholding is required on such income. When a recipient disposes of
shares acquired upon exercise, the excess will be treated as long- or short-term
capital gain, depending upon the holding period of the shares; and if the amount
received is less than the fair market value of the shares on the date of
exercise, the difference will be treated as long- or short-term capital loss,
depending upon the holding period of the shares.
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<PAGE> 15
With regard to ISOs, no income is recognized by a recipient upon exercise.
However, the excess of the fair market value of the shares received on exercise
over the exercise price is an adjustment to the recipient's taxable income for
purposes of computing the recipient's alternative minimum taxable income.
Assuming compliance with applicable holding period requirements, a recipient
realizes long-term capital gain or loss when he or she disposes of his or her
shares, measured by the difference between the exercise price and the amount
received for the shares at the time of disposition. If the recipient disposes of
shares acquired by the exercise of the option before the expiration of at least
one year from the date of exercise and two years from the date of grant of the
option, any amount realized from such disqualifying disposition is taxable as
ordinary income in the year of disposition to the extent that the lesser of (i)
fair market value on the date the option was exercised or (ii) the amount
realized upon such disposition exceeds the exercise price. Any amount realized
in excess of fair market value on the date of exercise will be treated as long
or short-term capital gain, depending upon the holding period of the shares. If
the amount realized upon such disposition is less than the exercise price, the
difference is treated as long- or short-term capital loss, depending upon the
holding period of the shares.
Participants who exercise SARs will recognize ordinary income at the time
of exercise equal to the amount of the payment to which they are entitled upon
exercise, regardless of whether such amount is paid in cash or shares.
No deduction is allowed to the Corporation for federal income tax purposes
at the time of grant of a NQSO or at the time of grant or exercise of an ISO.
The Corporation is entitled to a deduction for federal income tax purposes at
the same time and in the same amount as the recipient is considered to have
recognized ordinary income in connection with the exercise of a NQSO or SAR. In
the event of a disqualifying disposition of shares received upon exercise of an
ISO, the Corporation is entitled to a deduction for the amount taxable to the
recipient as ordinary income.
Amendment. The Board of Directors may amend, suspend or terminate the Plan
at any time. However, no such amendment may, without stockholder approval,
increase the maximum number of shares available for issuance under the Plan
(except pursuant to the anti-dilution provisions of the Plan), reduce the
minimum price at which options or SARs may be granted, extend the maximum option
or SAR exercise period, change the class of employees eligible to receive
awards, or extend the period within which awards may be granted.
Approval. The Board of Directors recommends a vote FOR approval of the
amendment to the Plan.
INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected Coopers & Lybrand L.L.P. to be the independent accountants for the
Corporation for the fiscal year ending January 31, 1998. Representatives of
Coopers & Lybrand L.L.P. will be present at the Annual Meeting and will have the
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions.
CHANGE OF CONTROL SEVERANCE AGREEMENTS
The Corporation has entered into Change of Control Severance Agreements
with its executive officers. The Agreements provide that if a "Change of
Control" (as defined in the Agreements) of the Corporation should occur, and if
within two years thereafter the employment of the executive is terminated for
reasons other than death, disability, retirement, or "Cause" (as defined in the
Agreements), or the executive voluntarily terminates his or her employment for
"Good Reason" (as defined in the Agreements), severance compensation will be
payable. The amount of severance compensation would be approximately twice the
executive's then current annual base salary, plus twice the largest annual bonus
paid to the executive during the five-year period immediately preceding the
change of control. In addition, the executive would be entitled to continued
employee benefits for a period of two years from the date of termination. Also,
to the extent that
13
<PAGE> 16
payments to the executive pursuant to his/her Agreement (together with any other
payments or benefits, such as the accelerated vesting of stock options or
restricted stock awards, received by the executive in connection with a Change
in Control) would result in the triggering of the provisions of Sections 280G
and 4999 of the Code, the Agreement provides for the payment of an additional
amount such that the executive would receive, net of excise taxes, the amount
he/she would have been entitled to receive in the absence of the excise tax
provided in Section 4999 of the Code.
ADVANCE NOTICE BYLAW
The Bylaws of the Corporation provide that in order for a stockholder to
nominate a candidate for election as a Director at an annual meeting of
stockholders or propose business for consideration at such meeting, notice must
be given to the Secretary of the Corporation no more than 90 days nor less than
60 days prior to the first anniversary of the preceding year's annual meeting.
The fact that the Corporation may not insist upon compliance with these
requirements should not be construed as a waiver by the Corporation of its right
to do so at any time in the future.
STOCKHOLDER PROPOSALS
Under regulations adopted by the Securities and Exchange Commission,
stockholder proposals must be submitted to the Secretary of the Corporation no
later than December 27, 1997, in order to be considered for inclusion in the
proxy materials for the annual meeting to be held in 1998. The inclusion of any
such proposal will be subject to applicable rules of the Securities and Exchange
Commission.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 and the
rules thereunder, the Corporation's directors, executive officers and beneficial
owners of more than ten percent of its common stock are required to file with
the Securities and Exchange Commission and the New York Stock Exchange reports
of their ownership of Common Stock. To the Corporation's knowledge, based solely
upon the review of copies of such reports furnished to the Corporation and
written representations that no other reports were required, during the fiscal
year ended January 31, 1997 all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners were
complied with.
OTHER MATTERS
Management knows of no other matters which may properly be and are likely
to be brought before the meeting. However, if any other matters properly come
before the meeting, the persons named in the enclosed proxy will vote said proxy
in accordance with the discretion of each individual.
By Order of the Board of Directors
ALLAN R. CAMPBELL
Senior Vice President,
General Counsel and Secretary
Merrimack, New Hampshire
April 25, 1997
14
<PAGE> 17
0936-PS-97
<PAGE> 18
UNITRODE CORPORATION
ANNUAL MEETING OF STOCKHOLDERS - JUNE 2, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
The undersigned stockholder of Unitrode Corporation, a Maryland
R corporation (the "Company"), revoking all prior proxies, hereby appoints
Robert L. Gable and Allan R. Campbell, or either of them, proxies for the
O undersigned, with full power of substitution in each of them, to represent
the undersigned at the Annual Meeting of Stockholders of the Company to be
X held Monday, June 2, 1997 at Boston, Massachusetts and at any
adjournment or postponement thereof (the "Meeting"), to vote in the name
Y and place of the undersigned with all the powers which the undersigned
would possess if personally present, all shares of stock of the Company
standing in the name of the undersigned upon the matters listed on the
reverse side hereof, and in their discretion upon any other matters which
may properly come before the Meeting. This Proxy when properly executed
will be voted in the manner directed herein by the undersigned stockholder.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the accompanying Proxy Statement.
(IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE)
-----------
SEE REVERSE
SIDE
-----------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
UNLESS OTHERWISE INSTRUCTED, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS SET FORTH BELOW.
1. Election Directors 2. Approval and ratification of FOR AGAINST ABSTAIN
Nominees: amendment to the Unitrode [ ] [ ] [ ]
For 3 Year Term - Edward H. Browder, 1992 Employee Stock Option Plan
Kenneth Hecht to increase the number of shares
of Common Stock available for
FOR WITHHELD issuance from 2,000,000 shares
[ ] [ ] to 3,000,000 shares.
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
--------------------------------------
FOR, EXCEPT WITHHELD FROM THE NOMINEES
AS NOTED ABOVE
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY,
USING THE ENCLOSED ENVELOPE.
Please sign exactly as your name appears. If acting as
an attorney, executor, trustee or in another
representative capacity, sign name and title.
Signature____________________________ Date __________________ Signature___________________________ Date ______________
</TABLE>
