Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by Registrant / X /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Material
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
LSI LOGIC CORPORATION
David E. Sanders
Vice President, General Counsel, Secretary LSI Logic Corporation
Payment of Filing Fee:
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
/ / Fee computed per table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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Set forth the amount on which the filing fee is
calculated and state how it was determined.
/ / 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
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number, or the Form or Schedule and the date
of its filing.
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LSI LOGIC CORPORATION
Notice of Annual Meeting of Stockholders
May 6, 1994
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders of LSI Logic Corporation (the "Company"), a
Delaware corporation, will be held on May 6, 1994 at
11:30 a.m., local time, at the Company's offices located at
1655 McCarthy Boulevard, Milpitas, California 95035, for the
following purposes:
1. To elect directors to serve for the ensuing year
and until their successors are elected.
2. To approve an amendment to the Employee Stock Purchase
Plan to increase the number of shares of Common Stock reserved
for issuance thereunder by 700,000 shares.
3. To approve an amendment to the 1991 Equity Incentive
Plan to increase the number of shares of Common Stock reserved
for issuance thereunder by 1,500,000 shares.
4. To ratify the appointment of Price Waterhouse as
independent accountants of the Company for its 1994 fiscal
year.
5. To transact such other business as may properly
come before the meeting and any adjournments 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
March 14, 1994 are entitled to notice of and to vote at the
meeting.
All stockholders are cordially invited to attend the
meeting in person. However, to assure your representation at
the meeting, you are urged to mark, sign and return the
enclosed proxy card 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 returned a proxy.
Sincerely,
David E. Sanders
Secretary
Milpitas, California
March 25, 1994
YOUR VOTE IS IMPORTANT
In order to assure your representation at the meeting,
you are requested to complete, sign and date the enclosed proxy
card as promptly as possible and return it in the enclosed
envelope (to which no postage need be affixed if mailed in the
United States).
LSI LOGIC CORPORATION
_________________
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of LSI Logic
Corporation (the "Company") for use at the Annual Meeting of
Stockholders to be held on May 6, 1994 at 11:30 a.m., local
time, or at any adjournment(s) thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Company's
offices at 1655 McCarthy Boulevard, Milpitas, California. The
Company's principal executive offices are located at 1551
McCarthy Boulevard, Milpitas, California 95035 and its telephone
number is (408) 433-8000.
These proxy solicitation materials were mailed on or about
March 25, 1994 to all stockholders entitled to vote at the
meeting.
Record Date
Stockholders of record at the close of business on March 14,
1994 are entitled to notice of and to vote at the meeting. At
the record date, 50,179,383 shares of the Company's Common
Stock, $0.01 par value, were issued and outstanding.
Revocability of Proxies
Any Proxy given pursuant to this solicitation may be
revoked by the person giving it at any time before its use by
delivering to the Company a written notice of revocation or a
duly executed proxy bearing a later date or by attending the
meeting and voting in person.
Voting and Solicitation
On all matters other than the election of directors, each
share has one vote. See "ELECTION OF DIRECTORS - REQUIRED VOTE."
The cost of soliciting proxies will be borne by the Company.
The Company has retained the services of Skinner & Co. to aid in
the solicitation of proxies from brokers, bank nominees and other
institutional owners. The Company estimates that it will pay
Skinner & Co. a fee not to exceed $4,000 for its services and
will reimburse it for certain out of pocket expenses estimated
to be $7,000. In addition, the Company may reimburse brokerage
firms and other persons representing beneficial owners of shares
for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may be solicited by certain of the
Company's directors, officers and regular employees, without
additional compensation, personally or by telephone or telegram.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company which are intended
to be presented by such stockholders at the Company's 1994
Annual Meeting must be received by the Company no later than
November 29, 1994, and be otherwise in compliance with
applicable laws and regulations in order that such proposals may
be included in the proxy statement and form of proxy relating to
that meeting.
SECURITY OWNERSHIP
Principal Stockholders
As of March 14, 1994, the following persons were known to
the Company to be beneficial owners of more than 5% of the
Company's Common Stock:
<TABLE>
<CAPTION>
Name and Number of Percentage of
Address Shares Owned Total
<S> <C> <C>
The Capital Group, Inc.<F1> 2,551,800 5.09%
333 Hope Street
Los Angeles, CA 90071
Trimark Investment
Management, Inc.<F2> 3,586,600 7.15%
One First Canadian Place
Suite 5600, P.O. Box 487
Toronto, Ontario
Canada M5X 1E5
FMR Corp.<F3> 5,505,570 11%
82 Devonshire Street
Boston, MA 02109-3614
Wilfred J. Corrigan<F4> 3,708,726 7.4%
1551 McCarthy Blvd.
Milpitas, CA 95035
_______________
<FN>
<F1> Information obtained from a Schedule 13G filed with the
Securities and Exchange Commission and dated February 11,
1994. The Capital Group, Inc. does not own any shares of
the Common Stock of the Company directly, instead the
shares of Common Stock reported on Schedule 13G are owned
by accounts under its discretionary investment management
authority. Capital Research and Management Group is an
operating subsidiary of The Capital Group, Inc. and files a
joint statement with The Capital Group, Inc. on Schedule
13G in connection with its ownership of the Common Stock of
the Company.
<F2> Information obtained from a Schedule 13G filed with the
Securities and Exchange Commission and dated February 10,
1994. Trimark Investment Management, Inc. is considered
the beneficial owner only as a result of its position as
manager and sole trustee of the funds which own the shares
of Common Stock of the Company.
<F3> Information obtained from a Schedule 13G filed with the
Securities and Exchange Commission and dated February 11,
1994. FMR Corp. is considered the beneficial owner of
shares of Common Stock of the Company as a result of its
control of Fidelity Research and Management Company.
Fidelity Research and Management Company is a wholly-owned
subsidiary of FMR Corp. and files a joint statement with
FMR Corp. on Schedule 13G. Fidelity Research and Management
Company acts as an investment advisor to several companies
which own shares of Common Stock of the Company.
<F4> Includes 106,250 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
_____________
</TABLE>
Security Ownership of Management
The following table sets forth the beneficial ownership of
Common Stock of the Company as of March 14, 1994 (the most recent
practicable date) by all directors and nominees (naming them),
each of the named executive officers set forth in the Summary
Compensation Table and by all directors and current executive
officers as a group:
<TABLE>
<CAPTION>
Approximate
Amount Percentage
Name Owned Owned
<S> <C> <C>
Wilfred J. Corrigan<F1>............ 3,708,726 7.4%
T.Z. Chu <F2>...................... 8,500 *
Malcolm R. Currie<F3>.............. 37,850 *
James H. Keyes <F4>................ 28,250 *
R. Douglas Norby .................. 11,000 *
Horst G. Sandfort<F5>.............. 36,453 *
Brian L. Halla<F6>................. 145,985 *
Cyril F. Hannon<F7>................ 196,508 *
Albert A. Pimentel<F8>............. 17,096 *
All directors and executive officers
as a group (12 persons)<F9>....... 4,334,699 8.6%
__________________
* Less than 1%.
<FN>
<F1> Includes 106,250 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
<F2> Includes 7,500 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
<F3> Includes 3,750 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
<F4> Includes 15,000 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
<F5> Includes 23,750 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994. Excludes options to purchase 5,000 shares
of the common stock of LSI Logic Corporation of Canada,
Inc., a 55% owned affiliate of the Company.
<F6> Includes 130,000 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994. Excludes options to purchase 25,000 shares
of the common stock of LSI Logic Corporation of Canada,
Inc., a 55% owned affiliate of the Company.
<F7> Includes 178,750 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994. Excludes ownership by Mr. Hannon of 20,000
shares of the common stock of LSI Logic K.K., a 64% owned
affiliate of the Company.
<F8> Includes 12,900 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994.
<F9> Includes 595,650 shares, options for which are presently
exercisable or will become exercisable within 60 days of
March 14, 1994. Excludes options to purchase 65,000 shares
of the common stock of LSI Logic Corporation of Canada,
Inc., a 55% owned affiliate of the Company. Excludes
ownership by all directors and executive officers as a
group of 20,000 shares of the common stock of LSI Logic
K.K., a 64% owned affiliate of the Company.
</TABLE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of five directors is to be elected at the meeting.
Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's five nominees named
below, all of whom are presently directors of the Company. If
any nominee of the Company is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be
voted for such nominee as shall be designated by the present
Board of Directors to fill the vacancy. If additional persons
are nominated for election as directors, the proxy holders intend
to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of
as many of the nominees listed below as possible and, in such
event, the specific nominees to be voted for will be determined
by the proxy holders. The term of office of each person elected
as a director will continue until the next Annual Meeting of
Stockholders or until his successor has been elected and
qualified.
The names of the nominees for election to the Board of
Directors, and certain information about them, are set forth
below.
<TABLE>
<CAPTION>
Director
Name of Nominee Age Principal Occupation Since
<S> <C> <C> <C>
Wilfred J. Corrigan 56 Chairman of the Board
of Directors and Chief
Executive Officer of
the Company 1981
James H. Keyes 53 Chairman, Chief Executive
Officer and a Director of
Johnson Controls, Inc. 1983
T.Z. Chu 59 President and Chief Executive
Officer of Hoefer Scientific
Instruments 1992
Malcolm R. Currie 66 Chairman Emeritus, Hughes
Aircraft Company 1992
R. Douglas Norby 58 Senior Vice President and
Chief Financial Officer of
Mentor Graphics Corporation 1993
</TABLE>
Except as set forth below, each of the nominees has been
engaged in his principal occupation set forth above during the
past five years. There are no family relationships between or
among any directors or executive officers of the Company.
Mr. Corrigan, a founder of the Company, has served as Chief
Executive Officer and a director of the Company since its
organization in January 1981. He served as President of the
Company from its incorporation until April 1985. He presently
serves on the board of directors of Brooktree Corporation.
Mr. Keyes has served as Chairman and Chief Executive Officer
of Johnson Controls, Inc., a manufacturer of automated building
controls, batteries, automotive seating and plastics since
January, 1993. From January, 1988 until January, 1993 Mr. Keyes
served as President and Chief Executive Officer of Johnson
Controls, Inc. From January, 1986 to January, 1988, Mr. Keyes
served as President, Chief Operating Officer and a director of
Johnson Controls, Inc.; from April, 1985 to January, 1986, Mr.
Keyes served as Executive Vice President, Chief Operating Officer
and a director of Johnson Controls, Inc.; from January, 1985 to
April, 1985, he served as Executive Vice President of Johnson
Controls, Inc.
Mr. Chu has served as President and Chief Executive Officer
of Hoefer Scientific Instruments since August, 1993. From
January, 1992 until August, 1993 Mr. Chu acted as a consultant
to Hambrecht & Quist and to Thermo Instrument Systems, Inc.
From 1990 until December 31, 1991 Mr. Chu served as the
President of Finnigan Corporation. From 1969 until 1990, he
served as the Principal Executive Officer and Director of
Finnigan Corporation at which time it was acquired by Thermo
Instrument Systems, Inc.
Mr. Currie served as Chairman and Chief Executive Officer of
Hughes Aircraft Company from March, 1988 until his retirement in
July, 1992. From January, 1976 until March, 1988 Mr. Currie
served as President and Chief Executive Officer of Delco
Electronics. He presently serves on the boards of directors of
Unocal Corporation and Investment Company of America.
Mr. Norby has served as Senior Vice President and Chief
Financial Officer of Mentor Graphics Corporation since September,
1993. From July, 1992 until September, 1993 Mr. Norby served as
President and Chief Executive Officer of Pharmetrix Corporation,
a health care company located in Menlo Park, California. Mr.
Norby served as President and Chief Operating Officer of
Lucasfilm, Ltd. from February, 1985 until May, 1992.
Additionally, from 1989 until May, 1992 Mr. Norby served as
Chairman, President and Chief Executive Officer of LucasArts
Entertainment Company, a subsidiary of Lucasfilm, Ltd. Mr. Norby
serves on the boards of directors of Epitope, Inc. and Recordati
S.p.A.
Board Meetings and Committees
The Board of Directors of the Company held a total of five
meetings during the fiscal year ended January 2,1994. The Board
of Directors has an Audit Committee and a Compensation Committee.
The Board of Directors does not have a separate nominating
committee.
The Audit Committee which consists of Mr. Currie (who serves
as its chairman), Mr. Keyes and Mr. Norby, held two meetings
during the last fiscal year. The Audit Committee recommends
engagement of the Company's independent accountants, and is
primarily responsible for approving the services performed by the
Company's independent accountants and for reviewing and
evaluating the Company's accounting principles and its system of
internal accounting controls. The Compensation Committee which
consists of Mr. Keyes (who serves as its chairman), Mr. Chu, Mr.
Currie and Mr. Norby, held two meeting during the last fiscal
year. The Compensation Committee reviews and approves the
Company's executive compensation policy and makes recommendations
concerning the Company's employee benefit plans.
During the fiscal year ended January 2, 1994, all incumbent
directors attended at least 75% of the aggregate number of
meetings of the Board of Directors and meetings of the committees
of the Board on which they served.
Compensation of Directors
Members of the Board of Directors who were not employees of
the Company receive an annual fee of $20,000 paid on a prorated
basis and $1,250 for each meeting they attend, plus expenses.
The Company's 1986 Directors' Stock Option Plan (the "Directors'
Option Plan") as adopted by the Board of Directors and approved
by the stockholders, provides for the grant of a nonstatutory
stock option to purchase 15,000 shares of Common Stock of the
Company to each of the Company's non-employee directors on the
later of the effective date of the Directors' Option Plan (which
date was October 21, 1986) or the date on which such person
becomes a director. Thereafter, each non-employee director will
be automatically granted a nonstatutory stock option to purchase
5,000 shares of Common Stock of the Company on the date of and
immediately following each Annual Meeting of Stockholders at
which such non-employee director is re-elected to serve on the
Board of Directors, provided, on such date, he or she has served
on the Board of Directors for at least six months. The
Directors' Option Plan provides that the exercise price shall be
equal to the fair market value of the Common Stock on the date of
grant of the option. Options granted pursuant to the Directors'
Option Plan have a term of five years and are exercisable
cumulatively to the extent of 25% of the shares subject to the
option on each of the first four anniversaries of the date of
grant. Options granted pursuant to the Directors' Option Plan
may be exercised only while the optionee is a director of the
Company or within six months after death or within ninety days
after the optionee ceases to serve as a director of the Company.
REQUIRED VOTE
Directors shall be elected by a plurality of the votes of
the outstanding shares of the Company's Common Stock entitled to
vote and represented in person or by proxy at the Annual Meeting.
Every stockholder voting for the election of directors may
cumulate such stockholder's votes and give one candidate a number
of votes equal to the number of directors to be elected
multiplied by the number of votes to which the stockholder's
shares are entitled, or may distribute the stockholder's votes on
the same principle among as many candidates as the stockholder
thinks fit, provided that votes cannot be cast for more than five
candidates. However, no stockholder shall be entitled to
cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the stockholder, or any other
stockholder, has given notice at the meeting prior to the voting
of the intention to cumulate the stockholder's votes. The
Company will exercise discretionary authority to cumulate votes
in the event that additional persons are nominated at the Annual
Meeting for election of directors.
While there is no definitive statutory or case law in
Delaware as to the proper treatment of abstentions in the
election of directors, the Company believes that abstentions
should be counted for purposes of determining whether a quorum is
present at the annual meeting for the transaction of business.
In the absence of controlling precedent to the contrary, the
Company intends to treat abstentions with respect to the election
of directors in this manner. In a 1988 Delaware case, Berlin v.
Emerald Partners, the Delaware Supreme Court held that broker
non-votes may be counted as present or represented for purposes
of determining the presence or absence of a quorum for the
transaction of business. Accordingly, the Company intends to
treat broker non-votes with respect to the election of directors
in this manner. Votes against, votes withheld and broker
non-votes have no legal effect on the election of directors due
to the fact that such elections are by a plurality.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The Employee Stock Purchase Plan (the "Purchase Plan") was
adopted by the Board of Directors and approved by the
stockholders in April 1983 and a total of 225,000 shares of
Common Stock were initially reserved for issuance thereunder.
From time to time since April 1983, the Board of Directors and
stockholders have approved amendments to the Purchase Plan to
increase the number of shares reserved for issuance thereunder to
an aggregate of 6,275,000 shares and to make certain additional
amendments to the Purchase Plan.
PROPOSED AMENDMENT TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCE UNDER THE PURCHASE PLAN
On February 11, 1994, the Board of Directors approved an
amendment to the Purchase Plan to increase the number of shares
reserved for issuance thereunder by 700,000 shares to an
aggregate of 6,975,000 shares. The stockholders are being asked
to approve this amendment at the Annual Meeting.
As of March 14, 1994, of the 6,275,000 shares reserved for
issuance under the Purchase Plan (without giving effect to the
February, 1994 amendment), 5,178,512 shares had been issued. The
Company estimates that it will utilize a substantial portion of
the 1,096,488 remaining available shares in the exercise period
ending September 30, 1994, leaving an inadequate number of shares
available for issuance in the exercise period ending March 31,
1995.
The Board of Directors believes that it is in the best
interests of the Company to provide employees with an opportunity
to purchase Common Stock of the Company through payroll
deductions. The Board of Directors believes that the shares
remaining available for issuance pursuant to the Purchase Plan
are insufficient for such purpose. Accordingly, at the Annual
Meeting the stockholders are being requested to consider and to
approve the amendment of the Purchase Plan to increase the number
of shares reserved for issuance thereunder by 700,000 shares.
SUMMARY OF THE PURCHASE PLAN
The essential features of the Purchase Plan are outlined
below.
Purpose
The purpose of the Purchase Plan is to provide employees of
the Company and its majority-owned subsidiaries designated by the
Board of Directors who participate in the Purchase Plan with an
opportunity to purchase Common Stock of the Company through
payroll deductions.
Administration
The Purchase Plan is administered by the Board of Directors
or a committee appointed by the Board, and is currently being
administered by the Board of Directors. All questions of
interpretation or application of the Purchase Plan are determined
in the sole discretion of the Board of Directors or its
committee, and its decisions are final and binding upon all
participants. Members of the Board of Directors who are eligible
employees are permitted to participate in the Purchase Plan but
may not vote on any matter affecting the administration of the
Purchase Plan or the grant of any option pursuant to the Purchase
Plan. No member of the Board who is eligible to participate in
the Purchase Plan may be a member of the committee appointed to
administer the Purchase Plan. No charges for administrative or
other costs may be made against the payroll deductions of a
participant in the Purchase Plan. Members of the Board of
Directors receive no additional compensation for their services
in connection with the administration of the Purchase Plan.
Eligibility
Any person who is employed by the Company (or by any of its
majority-owned subsidiaries designated by the Board of Directors)
for at least 20 hours per week and more than five months in a
calendar year is eligible to participate in the Purchase Plan.
As of January 2, 1994 approximately 3,370 employees were eligible
to participate in the Purchase Plan and approximately 1,265 of
such eligible employees were participating.
Offering Dates
The Purchase Plan is implemented by consecutive 24-month
offering periods. The offering periods commence April 1 and
October 1 of each year. Each offering period is composed of four
six-month exercise periods. The Board of Directors has the power
to alter the duration of the offering periods without stockholder
approval if such change is announced 15 days prior to the
scheduled beginning of the first offering period to be affected.
Participation in the Purchase Plan
Eligible employees become participants in the Purchase Plan
by delivering to the Company's personnel office a subscription
agreement authorizing payroll deductions. An eligible employee
may participate in an offering period only if, as of the
enrollment date of such offering period, such employee is not
participating in any prior offering period which is continuing at
the time of such proposed enrollment. An employee who becomes
eligible to participate in the Purchase Plan after the
commencement of an offering may not participate in the Purchase
Plan until the commencement of the next offering period.
Purchase Price
The purchase price per share at which shares are sold under
the Purchase Plan is the lower of 85% of the fair market value of
a share of Common Stock on the date of commencement of the
offering period or 85% of the fair market value of a share of
Common Stock on the applicable exercise date within such offering
period. The fair market value of the Common Stock on a given
date shall be determined by the Board of Directors based upon the
closing sales price as reported by the New York Stock Exchange on
such date.
Payment of Purchase Price; Payroll Deductions
The purchase price of the shares is accumulated by payroll
deductions during the offering period. The deductions may not
exceed 10% of a participant's eligible compensation, which is
defined in the Purchase Plan to include the regular straight time
salary as of each payday during the offering period, exclusive of
any payments for overtime, bonuses, commissions or incentive
compensation. A participant may institute decreases in the rate
of payroll deductions at any time and such decreases are
immediately effective. Increases in the rate of payroll
deductions are effective as of the commencement of any exercise
period within the offering period.
All payroll deductions are credited to the participant's
account under the Purchase Plan; no interest accrues on the
payroll deductions. All payroll deductions received or held by
the Company may be used by the Company for any corporate purpose
and such payroll deductions need not be segregated.
Purchase of Stock; Exercise of Option
At the beginning of each offering period, by executing a
subscription agreement to participate in the Purchase Plan, each
employee is in effect granted an option to purchase shares of
Common Stock. The maximum number of shares placed under option
to a participant in an offering period is determined by dividing
the compensation which such participant has elected to have
withheld during the exercise period by 85% of the fair market
value of the Common Stock at the beginning of the offering period
or on the applicable exercise date, whichever is lower; provided
that such number shall not exceed 200% of the number of shares
determined by dividing 10% of the employee's compensation to be
accumulated over the offering period (determined as of the
enrollment date) by 85% of the fair market value of a share of
the Company's Common Stock on the enrollment date.
Notwithstanding the foregoing, no employee may make aggregate
purchases of stock of the Company and its majority-owned
subsidiaries under the Purchase Plan and any other employee stock
purchase plans qualified as such under Section 423(b) of the
Internal Revenue Code of 1986, as amended (the "Code") in excess
of $25,000 (determined using the fair market value of the shares
at the time the option is granted) during any calendar year.
Withdrawal
While each participant in the Purchase Plan is required to
sign a subscription agreement authorizing payroll deductions, a
participant may terminate his or her participation in the
Purchase Plan at any time by signing and delivering to the
Company a notice of withdrawal from the Purchase Plan. All of
the participant's accumulated payroll deductions will be paid to
the participant promptly after receipt of his or her notice of
withdrawal and his or her participation in the current offering
period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the
offering period. No resumption of payroll deductions will occur
on behalf of such participant unless such participant re-enrolls
in the Purchase Plan by delivering a new subscription agreement
to the Company during the applicable open enrollment period
preceding the commencement of a subsequent offering period. A
participant's withdrawal from the Purchase Plan during an
offering period does not have any effect upon such participant's
eligibility to participate in subsequent offering periods under
the Purchase Plan.
Termination of Employment
Termination of a participant's employment for any reason,
including retirement or death, cancels his or her participation
in the Purchase Plan immediately. In such event, the payroll
deductions credited to the participant's account will be returned
to such participant or, in the case of death, to the person or
persons entitled thereto as specified by the employee in the
subscription agreement.
Capital Changes
If any change is made in the capitalization of the Company,
such as stock splits or stock dividends, which results in an
increase or decrease in the number of shares of Common Stock
outstanding without receipt of consideration by the Company,
appropriate adjustments will be made by the Company in the number
of shares subject to purchase and in the purchase price per
share, subject to any required action by the stockholders of the
Company. In the event of the proposed dissolution or liquidation
of the Company, the offering period then in progress will
terminate immediately unless otherwise provided by the Board of
Directors. In the event of the proposed sale of all or
substantially all of the assets of the Company or the merger of
the Company with or into another corporation, each outstanding
option shall be assumed or an equivalent option shall be
substituted by the successor corporation, unless the Board of
Directors determines, in its discretion, to accelerate the
exercisability of all outstanding options under the Purchase
Plan. The Board of Directors may also make provisions for
adjusting the number of shares subject to the Purchase Plan and
the purchase price per share if the Company effects one or more
reorganizations, recapitalizations, rights offerings or other
increases or reductions of shares of the Company's outstanding
Common Stock.
Amendment and Termination of the Purchase Plan
The Board of Directors may at any time amend or terminate
the Purchase Plan, except that such termination shall not affect
options previously granted nor may any amendment make any change
in an option granted prior thereto which adversely affects the
rights of any participant. No amendment may be made to the
Purchase Plan without prior approval of the stockholders of the
Company if such amendment would increase the number of shares
reserved under the Purchase Plan, permit payroll deductions at a
rate in excess of 10% of a participant's compensation, modify the
eligibility requirements or materially increase the benefits
which may accrue to participants under the Purchase Plan.
Certain United States Federal Income Tax Information
The Purchase Plan, and the right of participants to make
purchases thereunder, is intended to qualify under the provisions
of Sections 421 and 423 of the Code. Under these provisions, no
income will be taxable to a participant at the time of grant of
the option or purchase of shares. Upon disposition of the
shares, the participant will generally be subject to tax and the
amount of the tax will depend upon the holding period. If the
shares have been held by the participant for more than two years
after the offering date and more than one year after the exercise
date, the lesser of: (a) the excess of the fair market value of
the shares at the time of such disposition over the option price,
or (b) the excess of the fair market value of the shares at the
time the option was granted over the option price (which option
price will be computed as of the grant date) will be treated as
ordinary income, and any further gain will be treated as
long-term capital gain. If the shares are disposed of before the
expiration of these holding periods, the excess of the fair
market value of the shares on the exercise date over the option
price will be treated as ordinary income, and any further gain or
any loss on such disposition will be long-term or short-term
capital gain or loss, depending on the holding period. Different
rules may apply with respect to participants subject to Section
16(b) of the Securities Exchange Act of 1934, as amended. The
Company is not entitled to a deduction for amounts taxed as
ordinary income or capital gain to a participant except to the
extent of ordinary income reported by participants upon
disposition of shares prior to the expiration of the two holding
periods described above.
The foregoing is only a summary of the effect of federal
income taxation upon the participant and the Company with respect
to the grant and exercise of options under the Purchase Plan,
does not purport to be complete, and does not discuss the income
tax laws of any municipality, state or foreign country in which a
participant may reside. It is advisable that a participant
contact his or her own tax advisor concerning the application of
these tax laws.
STOCK PRICE
The closing price of a share of the Common Stock on the New
York Stock Exchange on March 14, 1994 was $22.
PLAN BENEFITS
The Company cannot now determine the number of shares to be
purchased in the future by the named executive officers, all
current executive officers as a group or all employees (including
current officers who are not executive officers) as a group. In
1993 however, the following shares of Common Stock were purchased
by such persons pursuant to the Purchase Plan:
<TABLE>
<CAPTION>
Name or Group
<S> <C>
Wilfred J. Corrigan....................... -0-
Horst G. Sandfort......................... 4,871
Brian L. Halla............................ 5,367
Cyril F. Hannon........................... 5,097
Albert A. Pimentel...................... 4,196
All Current Executive Officers as a group
(8 persons)............................. 23,164
All employees (including current
officers who are not executive officers). 987,701
____________
</TABLE>
REQUIRED VOTE
Approval of the amendment to the Purchase Plan requires the
affirmative vote of the holders of a majority of the shares of
the Company's Common Stock represented and voting, in person or
by proxy, at the Annual Meeting. Votes against are counted for
purposes of determining the presence or absence of a quorum for
the transaction of business. Votes against are also counted for
purposes of determining the total number of votes required to
pass the proposal and whether such number of votes has been
obtained.
While there is no definitive statutory or case law in
Delaware as to the proper treatment of abstentions in the
counting of votes with respect to a proposal such as the
amendment to the Purchase Plan, the Company believes that
abstentions should be counted for purposes of determining both
the presence or absence of a quorum for the transaction of
business and the total number of shares present or represented
and entitled to vote on the proposal. In the absence of
controlling precedent to the contrary, the Company intends to
treat abstentions on this proposal in this manner. In a 1988
Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes may be counted as present
or represented for purposes of determining the presence or
absence of a quorum for the transaction of business, broker non-
votes may not be counted for purposes of determining the number
of shares entitled to vote with respect to the particular
proposal for which authorization to vote was withheld.
Accordingly, broker non-votes with respect to this proposal will
not be considered shares entitled to vote and will not be counted
in determining whether this proposal passes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT
OF THE PURCHASE PLAN. THE EFFECT OF AN ABSTENTION IS THE SAME AS
THAT OF A VOTE AGAINST THE AMENDMENT OF THE PURCHASE PLAN.
PROPOSAL THREE
AMENDMENT TO THE 1991 EQUITY INCENTIVE PLAN
GENERAL
The 1991 Equity Incentive Plan (the "1991 Incentive Plan")
was adopted by the Board of Directors and approved by the
stockholders in May 1991 and a total of 2,000,000 shares of
Common Stock were initially reserved for issuance thereunder. In
1993, the Board of Directors and the stockholders approved an
amendment to the 1991 Incentive Plan to increase the number of
shares reserved for issuance thereunder by 1,000,000 shares to an
aggregate of 3,000,000 shares.
PROPOSED AMENDMENT TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCE UNDER THE 1991 INCENTIVE PLAN
On February 11, 1994, the Board of Directors approved an
amendment to the 1991 Incentive Plan to increase the number of
shares reserved for issuance thereunder by 1,500,000 shares to an
aggregate of 4,500,000 shares. The stockholders are being asked
to approve this amendment at the Annual Meeting.
As of March 14, 1994, options to purchase 2,354,027 shares
had been granted and only 645,973 of the 3,000,000 shares
reserved for issuance under the 1991 Incentive Plan (without
giving effect to the February, 1994 amendment) remain available
for grant. The Board of Directors believes that it is in the
best interest of the Company to be able to continue to create
equity incentives to assist in attracting, retaining and
motivating employees. The Board of Directors believes that the
shares remaining available for granting of options pursuant to
the 1991 Incentive Plan are insufficient for such purposes.
Accordingly, at the Annual Meeting the stockholders are being
requested to consider and to approve the amendment of the 1991
Incentive Plan to increase the number of shares reserved for
issuance thereunder by 1,500,000 shares.
SUMMARY OF THE 1991 INCENTIVE PLAN
The essential features of the 1991 Incentive Plan are
outlined below.
Purpose
The purpose of the 1991 Incentive Plan is to enable the
Company to provide an incentive to eligible employees, including
officers, and consultants whose present and potential
contributions are important to the continued success of the
Company, to afford them an opportunity to acquire a proprietary
interest in the Company and to enable the Company to enlist and
retain in its employ the best available talent for the successful
conduct of its business.
Eligibility
Employees, including officers, and consultants of the
Company and its majority-owned subsidiaries (as well as
majority-owned subsidiaries of the Company's majority-owned
subsidiaries) whom the Board deems to have the potential to
contribute to the future success of the Company are eligible to
receive awards under the 1991 Incentive Plan.
Administration
The 1991 Incentive Plan shall be administered by (i) the
Board of Directors if the Board may administer the 1991 Incentive
Plan in compliance with Rule 16b-3 ("Rule 16b-3") promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act") or
(ii) a committee appointed by the Board and constituted so as to
permit the 1991 Incentive Plan to comply with the provisions of
Rule 16b-3. If permitted by Rule 16b-3, the 1991 Incentive Plan
may be administered by different bodies with respect to employees
who are directors, non-director officers, employees who are
neither directors nor officers and consultants. For the purposes
of this plan description, the term "Committee" shall mean either
the committee appointed by the Board or the Board, whichever is
administering the 1991 Incentive Plan. All questions of
interpretation or application of the 1991 Incentive Plan are
determined in the sole discretion of the Committee, and its
decisions are final and binding upon all participants. Members
of the Board who are eligible employees are permitted to
participate in the 1991 Incentive Plan but may not be a member of
a committee appointed to administer the 1991 Incentive Plan.
Members of the Board receive no additional compensation for their
services in connection with the administration of the 1991
Incentive Plan.
Stock Options
The 1991 Incentive Plan permits the granting of stock
options that either are intended to qualify as Incentive Stock
Options ("ISOs") or are not intended to so qualify ("Nonstatutory
Stock Options" or "NSOs").
The option exercise price for each share covered by an
option may be less than the fair market value of a share of
Common Stock on the date of grant of such option. However, in
the case of an ISO, the option exercise price shall be no less
than 100% of the fair market value of a share of Common Stock on
the date such option is granted, subject to certain additional
conditions set forth in the 1991 Incentive Plan with respect to
grants to 10% stockholders. In the case of an NSO, the option
exercise price shall be no less than 50% of the fair market value
of the Common Stock on the date the option is granted.
The term of each option will be fixed by the Board but may
not exceed ten years from the date of grant in the case of ISOs
(five years in the case of ISOs granted to an optionee who, at
the time of grant, owns Common Stock possessing more than 10% of
the total combined voting power of the Company or of any
subsidiary). The Committee will determine the time or times each
option may be exercised. Options may be made exercisable in
installments, and the exercisability of options may be
accelerated by the Committee.
The exercise price of options granted under the 1991
Incentive Plan, including applicable withholding, must be paid in
full on the exercise date. The method of payment shall be
determined by the Committee and may consist of cash, check,
promissory note, other shares of Common Stock having a fair
market value on the date of exercise equal to the aggregate
exercise price of the option, delivery of a properly executed
exercise notice and irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan
proceeds required to pay the exercise price, delivery of an
irrevocable subscription agreement for the shares which obligates
the optionee to take and pay for the shares not more than 12
months after the date of delivery of the subscription agreement,
any combination of the foregoing methods of payment or such other
consideration and method of payment for the issuance of shares to
the extent permitted under the Delaware General Corporation Law.
Under the 1991 Incentive Plan, if an employee's employment
terminates for any reason, including retirement, an option may
thereafter be exercised (to the extent it was then exercisable)
within such time period as is determined by the Committee (which
shall be no more than 90 days in the case of an ISO), subject to
the stated term of the option. If the Committee has determined
that an employee was discharged for just cause (as defined in the
1991 Incentive Plan), such employee shall have no further rights
under the 1991 Incentive Plan or under any option granted to him
or her under the plan. If an optionee's employment is terminated
by reason of the optionee's death, the option will be exercisable
for six months following the date of death or such period as is
determined by the Committee, subject to the stated term of the
option. Options granted to consultants shall have such terms and
conditions with respect to the effect of termination of the
consulting relationship (including upon the death of the
consultant) as the Committee shall determine in each case.
To qualify as ISOs, options must meet additional federal tax
requirements under the Internal Revenue Code of 1986, as amended
(the "Code"). Under current law, these requirements include
limits on the value of ISOs that may become first exercisable
annually with respect to any optionee, and a shorter exercise
period and a higher minimum exercise price in the case of
stockholders having a 10% equity interest in the Company.
Stock Appreciation Rights
Although no stock appreciation rights ("SARs") have ever been
granted, under the 1991 Incentive Plan, the Committee may also
grant SARs, either in connection with the grant of options or
independent of the grant of options. Upon exercise of an SAR
granted in connection with an option, the holder is entitled to
receive an amount of cash, Common Stock of the Company or any
combination thereof (as determined by the Committee) equal in
value to the excess of the fair market value of the shares
covered by the surrendered portion of the related option on the
date of exercise over the aggregate exercise price of the shares
covered by the surrendered portion of the related option.
Notwithstanding the foregoing, the Committee may limit the amount
that may be paid to the optionee upon exercise of an SAR;
provided, however, that such limit shall not restrict the
exercisability of the related option. The exercise of an SAR will
result in cancellation of the related option, to the extent
surrendered on exercise of the SAR. An SAR granted in connection
with an option shall be exercisable only when and to the extent
that the related option is exercisable and shall expire no later
than the date on which the related option expires.
SARs granted without related options entitle the holder,
upon exercise of the SAR, to receive an amount of cash, Common
Stock of the Company or any combination thereof (as determined by
the Committee) equal in value to the excess of the fair market
value of the shares covered by the exercised portion of the SAR
on the date of exercise over the fair market value of the shares
covered by the exercised portion of the SAR as of the date of
grant of the SAR; provided, however, that the Committee may limit
the amount that may be paid to the holder upon exercise of such
SAR. An SAR granted independent of options shall be exercisable,
in whole or in part, at such times as the Committee shall
determine.
Stock Purchase Rights
The 1991 Incentive Plan provides for the grant of stock
purchase rights to purchase Common Stock of the Company either
alone, in addition to, or in tandem with other awards under the
1991 Incentive Plan and/or cash awards made outside of the 1991
Incentive Plan. The Committee shall determine the terms of each
stock purchase right, including the number of shares of Common
Stock that the purchaser shall be entitled to purchase, the price
to be paid for the shares (which price in the case of persons
subject to Section 16 of the Exchange Act shall not exceed the
par value of the Company's Common Stock) and the time within
which the right must be exercised, which shall in no event exceed
60 days from the date the stock purchase right was granted. At
the time of exercise of a stock purchase right, the purchaser and
the Company will enter into a Restricted Stock Purchase Agreement
pursuant to which the Company shall have a right to repurchase,
at the original purchase price, any unvested shares in the event
of the purchaser's voluntary or involuntary termination of
employment or consulting relationship, including by reason of
death or disability.
Stock Bonuses
The 1991 Incentive Plan also provides for the award of stock
bonuses to employees and consultants. Stock bonuses may be
granted either alone or in addition to other awards under the
1991 Incentive Plan. Stock bonuses are generally granted in
consideration of past services rendered to the Company or its
subsidiaries. The Committee shall determine, in its sole
discretion, the terms of each stock bonus, and shall determine
the performance or employment-related factors to be considered in
granting stock bonuses and the extent to which such stock bonuses
have been earned.
Adjustments for Recapitalizations and Reorganizations
In the event of a stock dividend, stock split combination or
similar event, the number of shares of Common Stock available for
issuance under the 1991 Incentive Plan shall be increased or
decreased proportionately, as the case may be, and the number of
shares of Common Stock deliverable in connection with any
outstanding option, SAR, stock purchase right or stock bonus,
and, where applicable, the exercise price thereof, shall be
proportionately adjusted.
In the event of a merger, reorganization, liquidation or
similar event, the Board of Directors shall, with respect to
outstanding options, SARs, stock purchase rights or stock bonuses
either provide for the assumption or substitution of such awards
or provide that the options or rights must be exercised within 30
days. In either case, the Board or the Committee may, in its
discretion, provide for accelerated vesting of such awards.
Amendment and Termination
The Board may amend, alter, suspend or discontinue the 1991
Incentive Plan at any time, but such amendment, alteration,
suspension or discontinuation shall not impair the rights of any
participant in the 1991 Incentive Plan, without the participant's
consent. Subject to the specific terms of the 1991 Incentive
Plan, the Committee may accelerate any award or option or waive
any conditions or restrictions pertaining to such award or option
at any time.
In addition, to the extent necessary and desirable to comply
with Rule 16b-3 under the Exchange Act or under Section 422A of
the Internal Revenue Code of 1986, as amended (the "Code") (or
any other applicable law or regulation), the Company shall obtain
stockholder approval of any 1991 Incentive Plan amendment, in
such a manner and to such a degree as required to comply with
such laws or regulations.
Certain United States Federal Income Tax Information
The following is only a brief summary of the effect of
federal income taxation upon the participant and the Company
under the 1991 Incentive Plan based upon the Code. This summary
does not purport to be complete and does not discuss the income
tax laws of any municipality, state or country outside of the
United States in which a participant may reside.
Stock Options. If an option granted under the 1991
Incentive Plan is an ISO, the optionee will recognize no income
upon grant of the ISO and will incur no tax liability due to the
exercise unless the optionee is subject to the alterative minimum
tax. The Company will not be allowed a deduction for federal
income tax purposes as a result of the exercise of an ISO
regardless of the applicability of the alterative minimum tax.
Upon the sale or exchange of the shares at least two years after
grant of the ISO and one year after exercise by the optionee, any
gain (or loss) will be treated as capital gain (or loss). If
these holding periods are not satisfied, the optionee will
recognize ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the
stock at the date of the option exercise or the sale price of the
stock. A different rule for measuring ordinary income upon such
premature disposition may apply if the optionee is subject to
Section 16 of the Exchange Act. The Company will be entitled to
a deduction in the same amount as the ordinary income recognized
by the optionee. Any gain (or loss) recognized on such a
premature disposition of the shares in excess of the amount
treated as ordinary income will be characterized as capital gain
(or loss).
All other options which do not qualify as ISOs are taxed as
NSOs. An optionee will not recognize any taxable income at the
time he or she is granted an NSO. However, upon the exercise of
an NSO, the optionee will recognize ordinary income measured by
the excess of the then fair market value of the shares over the
option price. In certain circumstances, where the shares are
subject to a substantial risk of forfeiture when acquired or
where the optionee is subject to Section 16 of the Exchange Act,
the date of taxation may be deferred unless the optionee files an
election with the Internal Revenue Service under Section 83(b) of
the Code. The income recognized by an optionee who is also an
employee of the Company will be subject to tax withholding by the
Company by payment in cash or out of the current earnings paid to
the optionee. Upon resale of such shares by the optionee, any
difference between the sales price and the exercise price, to the
extent not recognized as ordinary income as provided above, will
be treated as capital gain (or loss). The Company will be
entitled to a tax deduction in the same amount as the ordinary
income recognized by the optionee with respect to shares acquired
upon exercise of an NSO.
Stock Appreciation Rights. A recipient will not recognize
any taxable income in connection with the grant of an SAR. On
exercise of an SAR for cash, the recipient will generally
recognize ordinary income in the year of exercise in an amount
equal to the difference between the exercise price (if any) of
the SAR and the fair market value of the SAR (computed with
reference to the Common Stock of the Company) at the time of
exercise. If the recipient is an employee, such amount will be
subject to withholding by the Company. As a general rule, the
Company will be entitled to a tax deduction in the amount and at
the time the recipient recognizes ordinary income with respect to
the SAR.
If the recipient receives shares of Common Stock of the
Company upon exercise of an SAR, the tax consequences on purchase
and sale of such shares will be the same as those discussed above
for NSOs. See "Special Rules Applicable to Corporate Insiders."
Stock Purchase Rights. Stock purchase rights will generally
be subject to the tax consequences discussed above for NSOs.
Stock Bonus Awards. A recipient who receives fully vested
shares of Common Stock pursuant to a stock bonus award will
generally recognize ordinary income in the year of receipt equal
to the fair market value of the stock on the date of grant. If
the recipient receives stock subject to vesting pursuant to a
stock bonus award, the recipient will recognize ordinary income
equal to the fair market value of the stock at the time the award
vests (unless a Section 83(b) election is timely filed at the
time of grant). Different timing rules may apply if the
recipient is subject to Section 16(b) of the Exchange Act.
If the recipient is an employee, any amount included in
income will be subject to withholding by the Company. As a
general rule, the Company will be entitled to a tax deduction in
the amount and at the time the recipient recognizes ordinary
income with respect to the stock bonus award.
Special Rules Applicable to Corporate Insiders. In the case
of an individual who could be subject to suit under Section 16(b)
of the Exchange Act in the event he or she disposes of the shares
acquired upon exercise of a stock option, an SAR, or any other
incentive right granted under the 1991 Incentive Plan
("Insider"), such Insider will not recognize ordinary income at
the time of exercise of the option or right. Instead, the time
of taxation and withholding requirements will be generally
deferred until the date that the insider would no longer be
subject to suit upon disposition of such shares. The Insider
will recognize ordinary income at that time in an amount equal to
the excess of the then fair market value of the shares over the
purchase price (if any).
If the recipient is an employee, any amount included in income
will be subject to withholding by the Company. An Insider can
avoid this deferral provision by filing a Section 83(b) election
within 30 days after exercise of the option or right.
Capital Gains. Under current law the tax on long-term
capital gains is capped at 28%. Short-term capital gain is fully
included in gross income and taxed at the same rates as ordinary
income. Capital losses are allowed in full against capital gains
plus $3,000 of other income.
STOCK PRICE
The closing price of a share of the Common Stock on the New
York Stock Exchange on March 14, 1994 was $22.
PLAN BENEFITS
The Company cannot now determine the number of options to be
received in the future by the named executive officers, all
current executive officers as a group or all employees (including
current officers who are not executive officers) as a group. See
"EXECUTIVE COMPENSATION - Stock Option Grants and Exercises" for
the number of stock options granted to the named executive
officers in 1993. In 1993, options to purchase 322,000 shares of
the Common Stock of the Company were granted to all current
executive officers as a group and options to purchase 950,850
shares of the Common Stock of the Company were granted to all
employees (including current officers who are not executive
officers).
REQUIRED VOTE
Approval of the amendment to the 1991 Incentive Plan
requires the affirmative vote of the holders of a majority of the
shares of the Company's Common Stock represented and voting, in
person or by proxy, at the Annual Meeting. Votes against are
counted for purposes of determining the presence or absence of a
quorum for the transaction of business. Votes against are also
counted for purposes of determining the total number of votes
required to pass the proposal and whether such votes have been
obtained.
While there is no definitive statutory or case law in
Delaware as to the proper treatment of abstentions in the
counting of votes with respect to a proposal such as the
amendment to the 1991 Incentive Plan, the Company believes that
abstentions should be counted for purposes of determining both
the presence or absence of a quorum for the transaction of
business and the total number of shares present or represented
and entitled to vote on the proposal. In the absence of
controlling precedent to the contrary, the Company intends to
treat abstentions on this proposal in this manner. In a 1988
Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes may be counted as present
or represented for purposes of determining the presence or
absence of a quorum for the transaction of business, broker
non-votes may not be counted for purposes of determining
the number of shares entitled to vote with respect to the
particular proposal for which authorization to vote was withheld.
Accordingly, broker non-votes with respect to this proposal will
not be considered shares entitled to vote and therefore will not
be counted in determining whether this proposal passes.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT
OF THE 1991 INCENTIVE PLAN. THE EFFECT OF AN ABSTENTION IS THE
SAME AS THAT OF A VOTE AGAINST THE AMENDMENT OF THE 1991
INCENTIVE PLAN.
PROPOSAL FOUR
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse,
independent accountants, to audit the consolidated financial
statements of the Company for its 1994 fiscal year and recommends
that the stockholders vote for ratification of such appointment.
If there is a negative vote on such ratification, the Board of
Directors will reconsider its selection. Price Waterhouse has
audited the Company's consolidated financial statements since the
fiscal year ended December 31, 1981. Representatives of Price
Waterhouse are expected to be present at the Annual Meeting with
the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE AS THE
INDEPENDENT ACCOUNTANTS FOR THE 1994 FISCAL YEAR. THE EFFECT OF
AN ABSTENTION IS THE SAME AS THAT OF A VOTE AGAINST THE
RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT ACCOUNTANTS.
EXECUTIVE COMPENSATION
The following table shows, as to the Chief Executive Officer
and each of the four other most highly compensated executive
officers whose salary plus bonus exceeded $100,000, information
concerning all reportable compensation awarded to, earned by or
paid to each for services to the Company in all capacities during
the fiscal year ended January 2, 1994, as well as such
compensation for each such individual for the Company's previous
two fiscal years (if such person was the Chief Executive Officer
or an executive officer, as the case may be, during any part of
such fiscal year).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
Other Annual
Name and Compensation
Principal Position Year Salary Bonus ($) <F1>
<S> <C> <C> <C> <C>
Wilfred J. Corrigan 1993 $530,077 $400,000 $16,600
Chief Executive 1992 $500,000 None $ 9,600
Officer 1991 $463,460 None $ 9,600
Horst G. Sandfort 1993 $354,464 $235,000 $45,872
Executive Vice 1992 $350,411 None $20,800
President, 1991 $290,782 $ 95,339 $20,755
Geographic Markets
Brian L. Halla 1993 $280,481 $200,000 $ 8,500
Executive Vice 1992 $236,250 None $17,104
President, LSI Logic 1991 $189,615 None $ 9,539
Products
Cyril F. Hannon 1993 $261,538 $170,000 $ 8,400
Executive Vice 1992 $235,385 None $ 8,400
President, Worldwide 1991 $211,692 None $ 8,400
Operations
Albert A. Pimentel 1993 $222,923 $150,000 $ 9,400
Senior Vice President 1992 $ 78,558 None $ 3,613
Finance and Chief 1991 N/A N/A N/A
Financial Officer
<FN>
<F1> Includes amounts paid for car allowances, housing and meal
allowances, tax planning and relocation.
SUMMARY COMPENSATION TABLE
Long Term Compensation
Awards Payouts
All
Restricted Other
Stock Options/ LTIP Compen-
Year Awards SARs Payouts sation
($)<F2> (#)<F3> ($)<F4> ($)<F5>
<S> <C> <C> <C> <C> <C>
Wilfred J. Corrigan 1993 0 125,000 0 $28,483
1992 0 0 0 $ 4,032
1991 0 100,000 0 $ 4,032
Horst G. Sandfort 1993 0 50,000<F6> 0 $15,417
1992 0 40,000 0 $13,554
1991 0 95,000 0 $12,316
Brian L. Halla 1993 0 50,000 0 $14,682
1992 0 75,000 0 $ 2,436
1991 0 30,000 0 $ 1,820
Cyril F. Hannon 1993 0 50,000 0 $17,391
1992 0 30,000 0 $ 4,032
1991 0 25,000 0 $ 4,032
Albert A. Pimentel 1993 0 15,000 0 $10,316
1992 0 125,000 0 $ 385
1991 N/A N/A N/A N/A
<FN>
<F2> The Company has not granted any restricted stock rights.
<F3> The Company has not granted any stock appreciation rights.
<F4> The Company does not have any Long Term Incentive Plans as
that term is defined in the regulations.
<F5> The amounts described hereunder were paid by the Company
during 1993 for group term life insurance and profit sharing
(paid to all employees as a fixed percentage of salary).
<F6> Excludes options granted to Mr. Sandfort in 1993 to purchase
20,000 shares of the stock of LSI Logic Corporation of Canada,
Inc., a 55% owned affiliate of the Company.
</TABLE>
The Company, through its European affiliate, LSI Logic
Europe plc, and in recognition of certain European employment
customs for senior executives, presently maintains a form of
salary continuation arrangement for Horst G. Sandfort. This
arrangement provides that if, prior to May 7, 1995, Mr. Sandfort
were dismissed or asked to resign from employment with the
Company or any of its affiliated companies (for any reason other
than misconduct), Mr. Sandfort would be entitled to receive a
payment equivalent to one year's salary (at date of such
termination), up to a maximum amount of DM570,000 which was
approximately $338,466 as of March 14, 1994). Mr. Sandfort's
responsibilities include his position as Chief Executive Officer
of LSI Logic Europe plc and as Executive Vice President,
Geographic Markets for the Company.
Stock Option Grants and Exercises
The following tables set forth the stock options granted to
the named executive officers under the Company's stock option
plans and the options exercised by such named executive officers
during the fiscal year ended January 2, 1994.
The Option/SAR Grant Table sets forth hypothetical gains or
"option spreads" for the options at the end of their respective
ten-year terms, as calculated in accordance with the rules of the
Securities and Exchange Commission. Each gain is based on an
arbitrarily assumed annualized rate of compound appreciation of
the market price at the date of grant of 5% and 10% from the date
the option was granted to the end of the option term. Actual
gains, if any, on option exercises are dependent on the future
performance of the Company's Common Stock and overall market
conditions.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR<F1>
LSI Logic Corporation 1991 Equity Incentive Plan <F2>
<CAPTION>
Individual Grants
Name Percent of
Total Options/ Exercise
Options/ SARs granted or Base
Sars to Employees Price Expiration
Granted(#) in Fiscal Year ($/share) Date
<S> <C> <C> <C> <C>
Wilfred J. Corrigan 125,000 9.6% $11.00 02/12/03
Horst G. Sandfort 50,000 3.8% $11.00 02/12/03
Brian L. Halla 50,000 3.8% $11.00 02/12/03
Cyril F. Hannon 50,000 3.8% $11.00 02/12/03
Albert A. Pimentel 15,000 1.2% $11.00 02/12/03
<FN>
<F1> The Company has not granted any stock appreciation rights.
<F2> The material terms of the grants are described under
Proposal Three in this proxy statement.
Potential Realizable Value
Assumed Annual Rates of Stock Price Appreciation for Option Term
Name 5% 10%
<S> <C> <C>
Wilfred J. Corrigan $866,250 $2,186,250
Horst G. Sandfort $346,500 $ 874,500
Brian L Halla $346,500 $ 874,500
Cyril F. Hannon $346,500 $ 874,500
Albert A. Pimentel $252,450 $ 410,850
</TABLE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR<F1>
LSI Logic Corporation of Canada, Inc. 1985 Stock Option Plan<F2>
<CAPTION>
Individual Grants
Name Percent of
Total Options/ Exercise
Options/ SARs granted or Base
Sars to Employees Price Expiration
Granted(#) in Fiscal Year ($/share) Date
<S> <C> <C> <C> <C>
Wilfred J. Corrigan 0 0 0 ---
Horst G. Sandfort 20000 6.6% CDN$1.85<F3> 01/21/98
Brian L. Halla 0 0 0 ---
Cyril F. Hannon 0 0 0 ---
Albert A. Pimentel 0 0 0 ---
<FN>
<F1> LSI Logic Corporation of Canada, Inc. has not granted any
stock appreciation rights.
<F2> The LSI Logic Corporation of Canada, Inc. 1985 Stock Option
Plan is administered out of the Company's Canadian affiliate. The
material terms of grant other than those set forth in the table
are: (a) the exercise price was based on the fair market value
of the Canadian common stock (in Canadian dollars) on the Toronto
Stock Exchange on the date of grant; and (b)options may only be
exercised (once vested) while optionee is an employee of LSI
Logic Corporation of Canada, Inc., its subsidiary or the Company,
or within six months after death or 30 days after termination of
employment.
<F3> Currency is denominated in Canadian dollars.
Potential Realizable Value
Assumed Annual Rates of Stock Price Appreciation for Option Term
Name 5% 10%
<S> <C> <C>
Wilfred J. Corrigan 0 0
Horst G. Sandfort CDN$23,400<F3> CDN$58,800<F3>
Brian L. Halla 0 0
Cyril F. Hannon 0 0
Albert A. Pimentel 0 0
<FN>
<F3> Currency is denominated in Canadian dollars.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END VALUES<F1>
LSI Logic Corporation 1991 Equity Incentive Plan
<CAPTION>
Name Number of Shares
Acquired on Exercise Value Realized
<S> <C> <C>
Wilfred J. Corrigan 0 0
Horst G. Sandfort 72,500 $506,875
Brian L. Halla 50,000 $477,500
Cyril F. Hannon 70,000 $773,325
Albert A. Pimentel 22,100 $287,300
__________________
<FN>
<F1> The Company has not granted any stock appreciation rights.
Name Total Number of Unexercised Option
Held at Fiscal Year End
Exercisable Unexercisable
<S> <C> <C>
Wilfred J. Corrigan 75,000 150,000
Horst G. Sandfort 10,000 130,000
Brian L. Halla 93,750 121,250
Cyril F. Hannon 157,500 85,000
Albert A. Pimentel 9,150 108,750
Name Total Value of Unexercised
In-the-Money Options Held at
Fiscal Year End
Exercisable<F2> Unexercisable
<S> <C> <C>
Wilfred J. Corrigan $582,188 $803,438
Horst G. Sandfort $83, 438 $937,500
Brian L. Halla $808,750 $831,250
Cyril F. Hannon $1,381,562 $503,125
Albert A. Pimentel $94,931 $1,045,781
<FN>
<F2> Total value of vested options based on fair market value of
Company's Common Stock of $15.875 per share as of December
31,1993.
</TABLE>
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END VALUES<F1>
LSI Logic Corporation 1985 Nonqualified Stock Option Plan
for LSI Logic Corporation of Canada, Inc.
<CAPTION>
Name Number of Shares
Acquired on Exercise Value Realized
<S> <C> <C>
Wilfred J. Corrigan 0 0
Horst G. Sandfort 0 0
Brian L. Halla 0 0
Cyril F. Hannon 40,000 CDN$57,000<F3>
Albert A. Pimentel 0 0
__________________
<FN>
<F1> The Company has not granted any stock appreciation rights.
<F3> Currency is denominated in Canadian dollars.
Name Total Number of Unexercised Option
Held at Fiscal Year End
Exercisable Unexercisable
<S> <C> <C>
Wilfred J. Corrigan 0 0
Horst G. Sandfort 0 0
Brian L. Halla 25,000 0
Cyril F. Hannon 0 0
Albert A. Pimentel 0 0
Name Total Value of Unexercised
In-the-Money Options Held at
Fiscal Year End
Exercisable<F2> Unexercisable
<S> <C> <C>
Wilfred J. Corrigan --- ---
Horst G. Sandfort --- ---
Brian L. Halla CDN$81,000<F3> ---
Cyril F. Hannon --- ---
Albert A. Pimentel --- ---
<FN>
<F2> Total value of vested options based on fair market value of
LSI Logic Corporation of Canada, Inc.'s common stock on the
Toronto Stock Exchange of CDN$4.15 per share as of December 31,
1993.
<F3> Currency is denominated in Canadian dollars.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Overview and Philosophy
The Compensation Committee (the "Committee") of the Board of
Directors establishes the overall executive compensation
strategies of the Company and approves compensation elements for
the Chief Executive Officer and other executive officers. The
Committee periodically reviews its approach to executive
compensation.
The Committee is comprised of all of the independent, non-
employee members the Board of Directors (4), none of whom have
interlocking relationships as defined by the Securities and
Exchange Commission. The Committee has available to it such
external compensation advice and data as the Committee deems
appropriate to obtain.
The compensation philosophy of the Committee is to provide a
comprehensive compensation package for each executive officer
that is well suited to support accomplishment of the Company's
business strategies, objectives and initiatives. As the
Committee applies this compensation philosophy in determining
appropriate executive compensation levels and other compensation
factors, the Committee reaches its decisions with a view toward
the Company's overall financial performance.
Executive Officer Compensation
The Committee's approach is based upon a belief that a
substantial portion of aggregate annual compensation for
executive officers should be contingent upon the Company's
performance and an individual's contribution to the Company's
success. In addition, the Committee strives to align the
interests of the Company's executive officers with the long-term
interests of shareholders through stock option grants that can
result in ownership of the Company's Common Stock. The Committee
endeavors to structure each executive officer's overall
compensation package to be consistent with this approach and to
enable the Company to attract, retain and reward personnel who
contribute to the success of the Company.
The Company's compensation program for executive officers is
based on the following guidelines:
* Establishment of salary levels and participation in
generally available employee benefit programs based on
competitive compensation package practices.
* Utilization of a performance-based, cash incentive
plan.
* Inclusion of equity opportunities that create long-term
incentives based upon increases in shareholder return.
For 1993 the Committee approved a cash incentive plan that
provided for bonus awards to the executive officers and other
members of senior management. The plan established a minimum
level of operating income to be achieved by the Company for the
year before any payments would be made and provided for upward
adjustments in awards if the minimum operating income target was
exceeded. In addition, except as to his own eligibility for
award under the plan, bonus awards to other executive officers
were determined pursuant to the CEO's judgment of such other
officers' relative contributions to the Company's performance.
The Company also established and applied an aggregate budget for
all awards to be made under the plan. The Committee received
recommendations from the CEO, and based thereon, approved awards
under the plan to each of the executive officers. During 1993
the Committee also approved a budget for increases in executive
officers' base salary levels, which were then made pursuant to
the judgment and discretion of the Chief Executive Officer.
Chief Executive Officer Compensation
Mr. Corrigan has been CEO of the Company since its founding
in 1980. His base salary prior to the beginning of fiscal 1993
was $500,000, which was increased to $550,000 during 1993, based
upon reference to external competitive pay practices, the above
described compensation approach to executive officers and an
independent assessment of Mr. Corrigan's performance by this
Committee. The Committee also awarded Mr. Corrigan a cash bonus
in the amount of $400,000 based upon its evaluation of Mr.
Corrigan's performance under the provisions of the incentive
plan applicable to the other executive officers. Competitive pay
practice data evaluated by the Committee was derived from an
information base comprising a group of other technology
companies, many of which are included in the Hambrecht & Quist
Technology Index, as compiled by an externally generated
information source.
The Committee also approved grants to Mr. Corrigan of
125,000 stock options in 1993, under the terms of the 1991 Equity
Incentive Plan described elsewhere in this proxy statement. The
stock option grants were based upon an assessment by this
Committee of Mr. Corrigan's expected contribution to the Company
and a desire to provide an appropriate incentive therefor. The
Committee believes Mr. Corrigan has managed the Company well, and
has achieved distinguished results, including in terms of
revenue, gross margin, operating income and net income growth.
MEMBERS OF THE COMPENSATION COMMITTEE
February 11, 1994 James H. Keyes
T.Z. Chu
Malcolm R. Currie
R. Douglas Norby
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are set forth in
the preceding section as well as in Proposal One. There are no
members of the Compensation Committee who were: officers or
employees of the Company or any of its subsidiaries during the
fiscal year, formerly officers of the Company, or had any
relationship otherwise requiring disclosure hereunder.
PERFORMANCE GRAPH
The stock price performance shown on the graph following is
not necessarily indicative of future price performance.
Comparison of Five-Year Cumulative Total Return
Among LSI Logic Corporation*, S&P 500 Index
and Hambrecht & Quist Technology Index
[Description of Stock Performance Graph - The Stock Performance
Graph assumes $100 invested on December 31, 1988. The X-axis of
the graph denotes the years 1988, 1989, 1990, 1991, 1992 and
1993. The Y-axis denotes dollar amounts of $50, $100, $150, $100
and $250. Each of the graphs begins at 1988 at the $100 point.
The performance of the Company is depicted by connecting graph
points at $100 for 1988, $66 for 1989, $58 for 1990, $76 for
1991, $100 for 1992 and $148 for 1993. The performance of the
S&P 500 is depicted by connecting graph points at $100 for 1988,
$132 for 1989, $128 for 1990, $166 for 1991, $179 for 1992 and
$197 for 1993. The performance of the Hambrecht & Quist
Technology Index is depicted by connecting graph points at $100
for 1988, $108 for 1989, $99 for 1990, $147 for 1991, $169 for
1992 and $184 for 1993.]
* The Company operates on a 52/53 week fiscal year which ends
on the Sunday closest to December 31. Accordingly, the
Company's last trading day of its fiscal year may vary. For
consistent presentation and comparison to the industry indices
shown herein, the Company has calculated its stock performance
graph assuming a December 31 year end. The three measures of
cumulative return were prepared assuming reinvestment of
dividends.
CERTAIN TRANSACTIONS
James S. Koford, a former executive officer of the Company
had outstanding in 1993 a promissory note in the amount of
$435,850 with interest at an annual rate of 8%. In November,
1993 Mr. Koford repaid principal in the amount of $50,000 and
effective December 1, 1993, the unpaid principal and accrued
interest was consolidated into a new promissory note in the
amount of $394,567.01 with interest at an annual rate of 8%. The
loan was made to allow Mr. Koford to meet personal financial
commitments. Principal and interest payments of $47,891.35,
$47,091.35 and $46,291.35 are due February 28, 1994, May 31,
1994, and August 31, 1994 respectively with the balance of
principal and accrued unpaid interest due and payable November
30, 1994. The largest aggregate amount outstanding at any time
during 1993 attributable to loans to Mr. Koford was $397,602 and,
as of March 9, 1994, Mr. Koford's aggregate amount outstanding on
such loan was approximately $355,000. The note is immediately
due and payable should Mr. Koford's employment with the Company
terminate for any reason.
Lewis C. Wallbridge, an executive officer of the Company,
had outstanding during 1993 a promissory note in the amount of
$100,000 with interest at 8% per year. The loan was made in
order to assist Mr. Wallbridge in meeting personal financial
commitments. The note was due and payable within one year after
the date of loan. The largest aggregate amount outstanding at
any time during 1993 attributable to the loan to Mr. Wallbridge
was $107,713.80 and was repaid in its entirety March 15, 1993.
In May 1991, LSI Logic GmbH, a wholly-owned subsidiary of
LSI Logic Europe plc, a 97% owned subsidiary of the Company,
loaned to Horst G. Sandfort, an executive officer of the Company
DM 600,000. The loan bears interest at the applicable Lombard
rate in the Federal Republic of Germany which has averaged
approximately 8% since 1991. Principal plus accrued interest is
due and payable May 7, 1995 unless Mr. Sandfort ceases to be
employed by the Company or LSI Logic GmbH in which case the loan
plus accrued interest is due and payable immediately. The
largest aggregate amount outstanding at any time during 1993 was
approximately DM 727,385 which as of January 2, 1994 was
approximately U.S. $426,000 and as of March 9, 1994 Mr.
Sandfort's aggregate amount outstanding on the loan was
approximately DM 735,692 which as of such date was approximately
U.S. $436,000.
In April 1993, Mr. Sandfort was loaned $150,000 pursuant to
an unsecured promissory note to cover all costs associated with
his relocation from Germany to the United States. The note bears
interest at 8% per year and is due April 18, 1996. Principal and
accrued interest will be forgiven in equal amounts on the last
day of each of the 12th month, 24th month and 36th month. The
largest aggregate amount outstanding at any time during 1993
attributable to the loan to Mr. Sandfort was $158,077 and as of
March 9, 1994 Mr. Sandfort's aggregate amount outstanding on the
loan was approximately $160,385.
On April 10, 1992, Robert N. Blair resigned his position as
an executive officer of the Company. Pursuant to the terms of a
Separation Agreement, Mr. Blair acted as a consultant to the
Company at a rate of $1,000 per month through May 5, 1993.
Options previously granted to him continued to vest through May
5, 1993. On July 3, 1992, George D. Wells resigned his position
as an executive officer of the Company. Pursuant to the terms of
a Separation Agreement, Mr. Wells acted as a consultant to the
Company through December 31, 1993 at a rate of $1,000 per month.
Options previously granted to him vested immediately as of the
effective date of the Separation Agreement.
Section 16(a) of the Exchange Act requires the Company's
executive officers, directors, and persons who own more than ten
percent of a registered class of the Company's equity securities
to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and the New York
Stock Exchange. Executive officers, directors and greater than
ten percent stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on its review of the copies of such forms
received by it and written representations received from those
reporting persons recognized by the Company as being subject to
filing requirements that they have complied with the relevant
filing requirements, the Company believes that all filing
requirements applicable to its executive officers and directors
were complied with as of January 2, 1994.
OTHER MATTERS
The Company knows of no other matters to be submitted to the
meeting. If any other matters properly come before the 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.
THE BOARD OF DIRECTORS
March 25, 1994
FORM OF PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
LSI LOGIC CORPORATION
1994 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of LSI Logic Corporation, a
Delaware corporation, hereby acknowledges receipt of the Notice
of Annual Meeting of Stockholders and Proxy Statement, each dated
March 25, 1994, and hereby appoints Wilfred J. Corrigan and David
E. Sanders, or either of them, proxies and attorneys-in-fact,
with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 1994
Annual Meeting of Stockholders of LSI Logic Corporation to be
held on May 6, 1994, at 11:30 a.m. local time, at the Company's
offices located at 1655 McCarthy Boulevard, Milpitas, California,
and at any adjournment(s) thereof and to vote all shares of
Common Stock which the undersigned would be entitled to vote if
then and there personally present, on the matters set forth on
the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY
DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF
DIRECTORS, FOR APPROVAL OF THE ADOPTION OF THE AMENDMENT TO THE
EMPLOYEE STOCK PURCHASE PLAN, FOR APPROVAL OF THE ADOPTION OF
THE
AMENDMENT TO THE 1991 EQUITY INCENTIVE PLAN, FOR RATIFICATION OF
THE APPOINTMENT OF THE COMPANY'S INDEPENDENT ACCOUNTANTS, AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME
BEFORE THE MEETING AND ANY ADJOURNMENT(S) THEREOF.
1. ELECTION OF DIRECTORS:
Nominees: Wilfred J. Corrigan; Malcolm R. Currie; T.Z. Chu;
James L. Keyes; R. Douglas Norby.
FOR WITHHOLD
/ / / /
/ /_________________________________
For all nominees except as noted above
/ / Mark here for address change and note below.
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE EMPLOYEE STOCK
PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCES THEREUNDER BY 700,000 SHARES:
/ / For / / Against / / Abstain
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE 1991 EQUITY
INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR
ISSUANCES THEREUNDER BY 1,500,000 SHARES:
/ / For / / Against / / Abstain
4. PROPOSAL TO RATIFY THE APPOINTMENT OF PRICE WATERHOUSE AS
THE INDEPENDENT ACCOUNTANTS OF THE COMPANY:
/ / For / / Against / / Abstain
and, in their discretion, upon such other matter or matters which
may properly come before the meeting and any adjournment(s)
thereof.
Signature:__________________________Date:___________________
Signature:__________________________Date:___________________
</TABLE>
