<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
x Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Burr-Brown Corporation
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Burr-Brown Corporation
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
$125 per Exchange Act Rule 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 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 transactions 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:
- - --------------------------------------------------------------------------------
x 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 identity 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:
- - --------------------------------------------------------------------------------
<PAGE>
BURR-BROWN CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 26, 1996 9:00 a.m.
You are hereby notified that the Annual Meeting of Stockholders of Burr-Brown
Corporation will be held on the 26th day of April 1996 at 9:00 a.m. at the
principal executive offices of the Company, 6730 South Tucson Boulevard,
Tucson, Arizona 85706, to consider and act upon the following matters:
1. To elect a Board of Directors consisting of the number so fixed for
the ensuing year;
2. To approve an amendment to the Company's 1993 Stock Incentive Plan to
increase the number of shares of Common Stock authorized for issuance
thereunder by an additional 500,000 shares.
3. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized shares of Common Stock
from 40,000,000 shares to 80,000,000 shares;
4. To ratify the selection of Ernst & Young LLP to serve as
independent auditors for the Company for the year ending
December 31, 1996; and
5. To transact such other business as may properly come before the
meeting.
If you are unable to attend the meeting personally, please be sure to date, sign
and return the enclosed proxy in the stamped envelope provided.
Only stockholders of record on the books of the Company at the close of business
on February 28, 1996 will be entitled to vote at the meeting.
By Order of the Board of Directors,
Jill H. Rice
Corporate Secretary
March 27, 1996
IMPORTANT
A PROXY STATEMENT AND PROXY ARE SUBMITTED HEREWITH. ALL STOCKHOLDERS ARE URGED
TO COMPLETE AND MAIL THE PROXY PROMPTLY WHETHER OR NOT THEY PLAN TO ATTEND THE
MEETING IN PERSON. THE ENCLOSED ENVELOPE FOR RETURN OF THE PROXY REQUIRES NO
POSTAGE IF MAILED IN THE U.S.A. OR CANADA. STOCKHOLDERS ATTENDING THE MEETING
MAY PERSONALLY VOTE ON ALL MATTERS WHICH ARE CONSIDERED, IN WHICH EVENT THE
SIGNED PROXY MAY BE REVOKED. IT IS IMPORTANT THAT YOUR SHARES BE VOTED.
<PAGE>
BURR-BROWN CORPORATION
6730 South Tucson Boulevard
Tucson, Arizona 85706
PROXY STATEMENT
GENERAL
This Proxy Statement and accompanying Proxy Card are furnished in
connection with the solicitation by the Board of Directors of Burr-Brown
Corporation, a Delaware corporation (the "Company" or "Burr-Brown"), of proxies
to be voted at the Annual Meeting of Stockholders to be held on April 26, 1996,
or at any adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at 9:00 a.m. at the principal executive offices of the Company located
at 6730 South Tucson Boulevard, Tucson, Arizona 85706. It is anticipated that
this Proxy Statement and the enclosed Proxy Card will be first mailed to
stockholders on or about April 2, 1996.
VOTING RIGHTS
The close of business on February 28, 1996 was the record date for
stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. As of February 28, 1996, the Company had 16,187,374
shares of its common stock outstanding and entitled to vote at the Annual
Meeting. Holders of common stock are entitled to one vote for each share of
common stock so held. The certificate of incorporation of the Company does not
provide for cumulative voting.
REVOCABILITY AND VOTING OF PROXIES
Any person giving a proxy has the power to revoke it at any time before its
exercise. A proxy may be revoked by filing with the Secretary of the Company an
instrument of revocation or a duly executed proxy bearing a later date, or may
be revoked by attending the Annual Meeting and voting in person. When a proxy
is returned properly signed, the shares represented thereby will be voted as
directed by the persons named in the proxies. If a proxy is returned without
specifying choices, the shares will be voted "FOR" the directors named in
proposal 1 and "FOR" proposals 2, 3 and 4 and in the proxy holder's discretion
for all other matters properly under consideration at the Annual Meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present for quorum purposes. Abstentions are counted in
tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved.
SOLICITATION OF PROXIES
The Company will bear the cost of solicitation of proxies. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
to forward to such beneficial owners. The Company may reimburse such persons
for their costs of forwarding the solicitation material to such beneficial
owners. The original solicitation of proxies by mail may be supplemented by
solicitation by telephone, telegram, or other means by directors, officers,
employees or agents of the Company. No additional compensation will be
paid to these individuals for any such services.
1
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information as of February 28, 1996,
with the exception of information regarding FMR Corp. which is stated as of
December 31, 1995, regarding the ownership of the Company's common stock by (i)
all persons known by the Company to be beneficial owners of five percent (5%) or
more of its outstanding common stock, (ii) each director of the Company, (iii)
each of the executive officers named in the Summary Compensation Table, and (iv)
all executive officers and directors of the Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership(1)
--------------------------------
Number of Percent of
Name of Beneficial Owner Shares Class
- - ------------------------ ------ -----
<S> <C> <C>
Thomas R. Brown, Jr. 5,458,726 (2) 34
Director and Chairman
Burr-Brown Corporation
6730 South Tucson Blvd.
Tucson, Arizona 85706
Thomas J. Troup 80,770 (3) *
Director and Vice Chairman
Francis J. Aguilar 16,500 (4) *
Director
John S. Anderegg, Jr. 68,155 (4) *
Director
James A. Riggs 15,000 (4) *
Director
Bob J. Jenkins 12,000 (5) *
Director
Marcelo A. Gumucio 21,000 (5) *
Director
Syrus P. Madavi 241,216 (6) 1
Director, President & CEO
John L. Carter 54,562 (7) *
Executive Vice President & CFO
All Current Directors and 5,967,929 (8) 36
Current Executive Officers
as a Group (9 persons)
2
<PAGE>
FMR Corp. 1,334,215 8
82 Devonshire Street
Boston, MA 02109
</TABLE>
- - -----------------------------------
* Less than one (1%) percent of the outstanding common stock.
(1) Percentage of beneficial ownership is calculated assuming 16,187,374 shares
of common stock were outstanding on February 28, 1996. This percentage
also includes common stock of which such individual or entity has the right
to acquire beneficial ownership within sixty (60) days of February 28,
1996, including but not limited to the exercise of an option; however, such
common stock shall not be deemed outstanding for the purpose of computing
the percentage owned by any other individual or entity. Such calculation
is required by General Rule 13d-3(a)(l)(i) under the Securities Exchange
Act of 1934. Unless otherwise indicated, each of the beneficial owners
named in the table has sole voting and investment power with respect to all
shares shown as owned by them, subject to applicable community property
laws.
(2) Represents 5,308,726 shares held by Brown Investment Management Limited
Partnership, of which Mr. Brown is a General Partner and pursuant to which
he shares dispositive power over these shares. Of these shares, Mr. Brown
has sole voting power with respect to 4,486,584 shares, and has no voting
power with respect to the remaining shares. Additionally, includes 150,000
shares held by Mr. Brown, individually. Of these shares, Mr. Brown has
sole dispositive power. Does not include 175,259 shares held in the
Burr-Brown Corporation Stock Bonus Plan and Trust of which Mr. Brown and
Mr. Carter have voting power.
(3) Includes 71,770 shares held in a trust of which Mr. Troup holds voting and
investment power and 9,000 shares subject to options granted to
non-employee Directors pursuant to the Company's Stock Incentive Plan.
(4) Includes 15,000 shares subject to options granted to each non-employee
Director pursuant to the Company's Stock Incentive Plan.
(5) Includes 12,000 shares subject to options granted to each non-employee
Director pursuant to the Company's Stock Incentive Plan.
(6) Includes 200,000 shares subject to options granted to Mr. Madavi pursuant
to the Company's Stock Incentive Plan which are exercisable within 60 days
following the Record Date. Also includes 1,216 shares held in the 401(k)
plan.
(7) Includes 33,000 shares subject to options granted to Mr. Carter pursuant to
the Company's Stock Incentive Plan, which are exercisable within 60 days
following the Record Date.
(8) Includes 311,000 shares subject to options granted to directors and
officers pursuant to the Company's Stock Incentive Plan, which are
exercisable within 60 days following the Record Date. Also includes
5,308,726 shares held by Brown Investment Management Limited Partnership,
of which Mr. Brown is a General Partner, as described in Note 2 above.
3
<PAGE>
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
Each director to be elected at the Annual Meeting will hold office
until the next annual meeting of stockholders and until a successor for such
director is elected and has qualified, or until the death, resignation, or
removal of such director. At the Annual Meeting there are seven (7) directors
to be elected. There are seven (7) nominees, each of whom is currently a
director of the Company. Each person nominated for election has agreed to serve
if elected, and the Board of Directors has no reason to believe that any nominee
will be unavailable or will decline to serve. In the event, however, that any
nominee is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the current Board of Directors to fill the vacancy. Unless authority is
withheld, the proxyholders will vote the proxies received by them for the
nominees named below. In the event that additional persons are nominated for
election as directors, the proxyholders intend to vote all proxies received by
them for the nominees listed below, to the extent authority is not withheld.
The seven (7) candidates receiving the highest number of the affirmative votes
of the shares entitled to vote at the Annual Meeting will be elected directors
of the Company . The proxies solicited by this Proxy Statement may not be voted
for more than seven (7) nominees.
NOMINEES
Set forth below is information regarding the nominees to the Board of
Directors.
<TABLE>
<CAPTION>
Present Principal Employment
Name Age and Prior Business Experience
- - ---- --- -----------------------------
<S> <C> <C>
Thomas R. Brown, Jr. 69 Director since 1956. Founder of the Company and
has served as its Chairman since 1956. Mr. Brown
served as Corporate Secretary from February 1986
to November 1987. Mr. Brown served as the Chief
Executive Officer until February 1983 and
President until 1976. Most recently, he served as
President and CEO from April 1993 to March 1994.
Former member of the Board of Directors of the Los
Angeles Regional Office of the Federal Reserve
Board.
Syrus P. Madavi 46 Director, President and Chief Executive Officer of
the Company since March 1994. Formerly Mr. Madavi
was President of Raytheon Semiconductor
Division from 1992 to March 1994. He was Director
of Product Development and Marketing of Raytheon
from 1990 to 1992, and prior to that served as the
Vice President and General Manager of Honeywell
Signal Processing Technologies from 1984 to 1989.
He also held management positions with Analog
Devices Inc. from 1980 to 1983.
Thomas J. Troup 72 Director since 1967. Vice Chairman since 1982 and
Chief Financial Officer from February 1983 to July
1988. Mr. Troup served as Treasurer from November
1986 to March 1987. From 1971 to 1982, Mr. Troup
served as Vice President, Treasurer and a Director
of Akzona, Inc. He has served as a Director of
Dynamics Research Corporation since 1962 and
served as a Director of BRIntec Corporation from
1985-1989, Baird Corporation 1982-1987; Holmberg
Electronic Corporation 1982-1987; and the Research
Triangle Institute 1981-1992.
4
<PAGE>
John S. Anderegg, Jr. 72 Director since 1958. Chairman of the Board of
Dynamics Research Corporation since
1955 and served as its President from 1955 to
1986. Serves as a Director of the Ivy
Fund, Metritape, Inc. and MacKenzie Funds.
James A. Riggs 59 Director since 1991. Senior Vice President and
Chief Financial Officer, Olin
Corporation from 1990 until his retirement in
February, 1996.
Francis J. Aguilar 63 Director since 1993. Professor Emeritus Business
Administration, Harvard Business School, served as
Faculty Chairman, Harvard International Senior
Manager's Program, 1972-1974; and Chairman,
International Teachers Program, 1968-1972. Dr.
Aguilar is Executive Director of the Management
Education Alliance and is also a consultant and
author. Serves as a Director of Bowater, Inc. and
Dynamics Research Corporation.
Marcelo A. Gumucio 58 Director since 1995. Currently Chairman of the
Management Board and the Chief Executive Officer
of Memorex Telex N.V. since November 1992. He is
also the President and Chairman of the Board of
Memorex Telex Corporation. In 1990, Mr. Gumucio
founded the private investment firm Gumucio, Burke
and Associates, of which he has been a partner
since its formation. Prior to his affiliation with
that firm, Mr. Gumucio was an executive at Cray
Research, Inc., and served as an Executive Vice
President from 1983 to 1988 and as President and
Chief Operating Officer from 1988 to 1990.
Mr. Bob J. Jenkins will not stand for re-election.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held five (5) meetings during 1995. During this
period, each director attended or participated in at least 75% of the aggregate
of (i) the total number of meetings of the Board that were held while they were
members and (ii) the total number of meetings held by all committees of the
Board on which they were members.
The Audit Committee of the Board of Directors held two (2) meetings during
1995. The Audit Committee, which is currently comprised of Directors John S.
Anderegg, Jr., Chairman, Thomas J. Troup, and Bob J. Jenkins, recommends
engagement of the Company's independent accountants, approves services performed
by such accountants, and reviews and evaluates the Company's accounting system
and its system of internal controls.
The Compensation Committee held nine (9) meetings during 1995. The
Compensation Committee, which is currently comprised of Directors James A.
Riggs, Chairman, Francis J. Aguilar, and Marcelo A. Gumucio (who joined the
Committee on April 21, 1995) has overall responsibility for the Company's
compensation policies and determines the compensation payable to the Company's
executive officers, including their participation in certain of the Company's
employee benefit plans. The Compensation Committee also administers the
Company's Stock Incentive Plan.
The Nominating Committee held two (2) meetings during 1995. The committee
consists of three (3) members, Thomas J. Troup, Chairman, John S. Anderegg,
Jr., and Marcelo A. Gumucio (who joined the committee on April 21, 1995). The
Nominating Committee will consider nominees recommended by stockholders. Any
nominee recommendations should be addressed to the attention of the Corporate
Secretary at the Company's principal executive offices.
5
<PAGE>
The Governance Committee held two (2) meetings during 1995. The committee
consists of six members: Francis J. Aguilar, Chairman, Thomas J. Troup, John S.
Anderegg, Jr., Bob J. Jenkins, James A. Riggs and Marcelo A. Gumucio (who joined
the Committee April 21, 1995). The Governance Committee acts on all matters
concerning strategic governance and policies of the Company.
DIRECTOR COMPENSATION
Non-employee Directors received a quarterly retainer fee of $2,500 and an
additional $1,500 for each board meeting attended. In addition, each such
director was reimbursed for travel expenses incurred in connection with his
attendance at meetings of the Board of Directors and the committees thereof.
Under the Automatic Option Grant Program in effect under the Company's 1993
Stock Incentive Plan, each individual will receive, at the time he or she first
becomes a non-employee Board member, an option grant to purchase 15,000 shares
of the Company's common stock (as adjusted for the 3-for-2 common stock split
effected in May 1995). Accordingly, an automatic option grant for 15,000 shares
of the Company's common stock was made to Mr. Gumucio on April 21, 1995 at the
time he first joined the Board as a non-employee Board member. The option has
an exercise price of $16.00 per share, the fair market value per share of common
stock on such grant date, and a maximum term of ten (10) years, subject to
earlier termination upon Mr. Gumucio's cessation of Board service. The option
is immediately exercisable for all of the option shares, but any purchased
shares will be subject to repurchase by the Company, at the exercise price paid
per share, should Mr. Gumucio cease Board service prior to vesting in those
shares. The shares subject to the option will vest in a series of five (5)
successive equal annual installments over his period of Board service, with the
first such installment to vest one (1) year after the grant date. However, all
the option shares will immediately vest should the Company be acquired by merger
or asset sale or should there occur a hostile take-over of the Company's
outstanding common stock or a change in the majority of the Board as a result of
one or more contested elections for Board membership. Upon the successful
completion of a hostile tender offer for more than fifty percent (50%) of the
Company's outstanding common stock, the option grant may be surrendered to the
Company for a cash payment in an amount per surrendered option share equal to
the greater of (i) the highest tender offer price per share paid for the
Company's common stock or (ii) the fair market value per share on the option
surrender date, less the option exercise price payable per share.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission (the "SEC") initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent (10%)
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely upon review of copies of such
reports furnished to the Company and written representations that no other
reports were required during the year ended December 31, 1995, there was
compliance with all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten percent (10%) stockholders
with the exception of (i) a late Form 4 filed by Mr. Thomas R. Brown with
respect to the October 1988 formation of Brown Investment Management Limited
Partnership, a limited partnership holding more than ten percent (10%) of the
Company's outstanding common stock, of which Mr. Brown is a general partner, and
(ii) the late Form 3 reports filed by Brown Investment Management Limited
Partnership and the two other general partners of that partnership. Pursuant to
SEC regulations, a form 5 was filed to report all holdings of Burr-Brown common
stock acquired by the Company's executive officers through their participation
in the Company's 401(k) Plan.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information concerning the
compensation earned by the Company's Chief Executive Officer and each of the
Company's other executive officers whose salary and bonus for the 1995 fiscal
year was in excess of $100,000, for services rendered in all capacities to the
Company and its subsidiaries for each of the fiscal years ended December 31,
1995, 1994, and 1993. The individuals included in the table will be hereafter
referred to as the Named Executive Officers. No executive officer who would
have otherwise been includible in such table on the basis of salary and bonus
earned for the 1995 fiscal year has resigned or terminated employment during the
fiscal year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensa-
Annual Compensation tion Awards(3)
------------------- -------------
Other Options All Other
Annual (No. of Compen-
Name and Compensa- Under- sation
Principal Position Year Salary($)(1) Bonus($) tion($)(2) lying Shares) ($)(4)
------------------ ---- ------------ -------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Thomas R. Brown, 1995 195,000 --- --- --- 2,310
Jr., Chairman of the 1994 195,000 --- --- --- 2,310
Board 1993 195,000 --- --- 2,249
Syrus P. Madavi, 1995 250,000 450,000 4,780 2,310
President and Chief 1994 190,385 99,000 81,374 450,000 1,288
Executive Officer 1993 --- --- --- --- ---
John L. Carter, 1995 160,000 77,200 --- --- 2,310
Executive 1994 160,000 20,000 --- 84,000 2,310
Vice President and 1993 113,731 16,700 --- 9,000 1,077
Chief Financial
Officer
</TABLE>
(1) Includes amounts deferred under the Company's Future Investment Trust Plan
("401(k) Plan").
(2) Represents amounts paid as reimbursement for relocation expenses.
(3) The number of option shares for each individual named in this table
reflects the 3-for-2 stock split in the form of a stock dividend
effected on May 19, 1995. None of the Named Executive Officers were
awarded restricted stock in 1995 nor held restricted stock at the end
of 1995.
7
<PAGE>
(4) All other compensation includes the contributions made by the Company
to the 401(k) Plan on behalf of each of the Named Executive Officers
to match their salary deferrals under such plan.
STOCK OPTIONS
No stock options were granted to any of the Named Executive Officers during
the fiscal year ended December 31, 1995.
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning each exercise
of stock options during the fiscal year ended December 31, 1995 by each of the
Named Executive Officers and the number and value of unexercised options held by
each of the Named Executive Officers at the end of the 1995 .
<TABLE>
<CAPTION>
AGGREGATED OPTION VALUES AT 1995 YEAR-END
Number of securities Value of unexercised
Shares underlying unexercised in-the-money options at
Name Acquired options at 1995 year-end 1995 year end(2)(3)
- - ---- on Value
Exercise Realized Exercis- Unexercis- Exercisable Unexercis-
(#) ($)(1) able able ($) able ($)
-------- -------- -------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Thomas R. Brown, 0 0 0 0 0 0
Chairman of the Board
Syrus P. Madavi, 50,000 866,667 130,000 270,000 2,721,835 5,649,004
President and CEO
John L. Carter, Executive 15,000 310,875 18,000 60,000 375,750 1,260,000
Vice President & CFO
</TABLE>
- - -----------------------
(1) Value represents the difference between the closing price of the Common
Stock on the date of exercise and the exercise price, multiplied by the
number of shares acquired on exercise.
(2) "In-the-money" options are options whose exercise price was less than the
market price of the Company's common stock on December 31, 1995.
(3) Based upon the market price of $25.50, which was the closing price per
share of the Company's common stock on the Nasdaq National Market on
December 29, 1995, less the option exercise price payable per share.
8
<PAGE>
Annual Retirement Benefits
The table below provides a schedule of estimated annual benefits payable upon
retirement to individuals who participate in the Company's defined benefit
pension plan.
<TABLE>
<CAPTION>
COMPENSATION YEARS OF SERVICE
- - --------------------------------------------------------------------------------
5 10 15 20 or More
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$100,000 4,352 8,704 13,056 17,408
- - --------------------------------------------------------------------------------
125,000 5,602 11,204 16,806 22,408
- - --------------------------------------------------------------------------------
150000 6,852 13,704 20,566 27,408
- - --------------------------------------------------------------------------------
200,000 9,352 18,704 28,056 37,408
- - --------------------------------------------------------------------------------
</TABLE>
A participant's compensation covered by the Company's retirement plan is his
or her average salary for the five consecutive calendar plan years during the
last ten (10) years of the participant's career for which such average is the
highest. Under the retirement plan, contributions are not specifically allocated
to individual participants. The table above shows estimated annual retirement
benefits payable at age sixty-five (65) to participants, based upon the
plan formula equal to 0.5% of final average annual salary plus 0.5% of excess
final average salary over the individual's Social Security covered compensation,
multiplied by years of service, up to a maximum of twenty (20) years. The
estimates do not include Social Security benefits payable from the federal
government and assume that benefits begin at age sixty-five (65) under a
straight life annuity form. The Social Security covered compensation used in
the calculation is that applicable to an individual attaining age sixty-five
(65) in 1995. Compensation covered under the plan for named executives as of
the end of 1995: Brown: $189,150; Madavi: $150,000; Carter: $119,077. The
estimated years of service for each named executive are as follows: Brown: 40;
Madavi: 2; Carter: 3.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of Burr-Brown
Corporation is responsible for establishing the base salary of the Company's
executive officers and administering the Company's Stock Incentive Plan under
which grants may be made to the executive officers and other key employees. In
addition, the Compensation Committee approves the individual bonus programs to
be in effect for the executive officers each year.
GENERAL COMPENSATION POLICY
The Compensation Committee's fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based
substantially upon their contribution to the financial success of
9
<PAGE>
the Company and their personal performance. Accordingly, each executive
officer's compensation package is comprised of three elements: (i) base salary,
which reflects individual performance and is designed primarily to be
competitive with relevant salary levels in the industry, (ii) annual variable
performance awards payable in cash and tied to the achievement of performance
goals established by the Committee, and (iii) long-term stock-based incentive
awards that strengthen the mutuality of interests between the executive officers
and the Company's stockholders. As an officer's level of responsibility
increases, a greater portion of his or her total compensation is to be dependent
upon Company performance and stock price appreciation rather than base salary.
FACTORS. The principal factors considered in establishing the
components of each executive officer's compensation package for the 1995 fiscal
year are summarized below. The Committee may in its discretion apply entirely
different factors, particularly different measures of financial performance, in
setting executive compensation for future years.
* BASE SALARY. The base salary for each officer is set on the basis
of personal performance, the Compensation Committee's assessment of salary
levels in effect for comparable positions with the Company's principal
competitors, and internal comparability considerations. The weight given to
each of these factors may vary from individual to individual, and the
Compensation Committee did not rely upon any specific compensation surveys for
comparative compensation purposes. Instead, the Compensation Committee made its
decisions as to the appropriate market level of base salary for each executive
officer on the basis of its understanding of the salary levels in effect for
similar positions at those companies with which the Company competes for
executive talent. Base salaries will be reviewed on an annual basis, and
adjustments will be made in accordance with the factors indicated above.
* ANNUAL INCENTIVE COMPENSATION. The Compensation Committee
established an executive incentive plan for fiscal 1995 designed to reward
executive officers on the basis of the Company's performance for the year and
each executive officer's individual contributions. Under the plan, a bonus pool
was funded with a percentage of the Company's pre-tax income for the 1995 fiscal
year, after giving effect to certain deductions such as contributions to the
Company's 401(k) Plan. However, no funding was to be allocated to the 1995
bonus pool unless the Company achieved a minimum level of pre-tax income for
such year, and in no event was the aggregate pool to exceed a specified dollar
maximum. The pre-tax income for the 1995 fiscal year was in excess of the
minimum targeted level, and the resulting bonus pool was then allocated among
the Company's key employees and executive officers based upon the Compensation
Committee's determination of their relative contributions to the Company's
profitability and their base salary levels.
* LONG-TERM INCENTIVE COMPENSATION. Stock options are designed to
align the interests of the executive officers with those of the stockholders and
to provide each with an equity stake in the business. The Compensation
Committee has established general guidelines for awarding options to executive
officers which takes into account an individual's current position with the
Company, comparability with grants made to other Company executives, the number
of unvested shares held by an individual, and an individual's potential for
growth within the Company, i.e., future responsibilities and possible promotions
over the option term. The Compensation Committee does not always strictly
adhere to these guidelines and will occasionally vary the size of the option
award as circumstances warrant.
CEO COMPENSATION
In setting the compensation payable to the Company's Chief Executive
Officer, Mr. Syrus P. Madavi, for the 1995 fiscal year, the Compensation
Committee has sought to provide him with a competitive level of compensation
while at the same time tying a significant percentage of that compensation to
Company performance. It is the Compensation Committee's intent to provide Mr.
Madavi with a level of stability and certainty each year with respect to base
salary and not to have this particular component of compensation affected to any
significant degree by Company performance factors.
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However, Mr. Madavi's incentive compensation for the 1995 fiscal year was
dependent upon the Company's financial performance and his individual
contribution to that performance and provided no dollar guarantees. As
previously indicated, Company performance for the 1995 fiscal year was measured
in terms of the pre-tax income target established by the Compensation Committee
for that year, and his incentive bonus was based upon the Company's achievement
of that target and the Compensation Committee's assessment of his individual
performance for the 1995 fiscal year.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation exceeding
$1 million paid to certain of the corporation's executive officers. The
limitation applies only to compensation which is not considered to be
performance-based. The non-performance based compensation to be paid to the
Company's executive officers for the 1995 fiscal year did not exceed the $1
million limit per officer, nor is it expected that the non-performance based
compensation to be paid to the Company's executive officers for fiscal 1996 will
exceed that limit. The Company's 1993 Stock Incentive Plan is structured so
that any compensation deemed paid to an executive officer in connection with the
exercise of option grants made under that plan will qualify as performance-based
compensation which will not be subject to the $1 million limitation. Because it
is very unlikely that the cash compensation payable to any of the Company's
executive officers in the foreseeable future will approach the $1 million limit,
the Compensation Committee has decided at this time not to take any other action
to limit or restructure the elements of cash compensation payable to the
Company's executive officers. The Compensation Committee will reconsider this
decision should the individual compensation of any executive officer ever
approach the $1 million level.
Submitted by the Compensation Committee
Burr-Brown Corporation Board of Directors
James A. Riggs
Francis J. Aguilar
Marcelo A. Gumucio
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. No executive officer of the
Company serves as a member of the board of directors or compensation committee
of any entity which has one or more executive officers serving as a member of
the Company's Board of Directors or Compensation Committee.
PERFORMANCE GRAPH
The following graph compares the cumulative total stockholder return on the
common stock of the Company with that of the Russell 2000 Index, a broad market
index of companies with comparable market capitalization, and Value Line's
Semiconductors Index, a published line-of-business index. The comparison for
each of the periods assumes that $100 was invested on December 31, 1990 in the
Company's common stock, the stocks included in the Russell 2000 Index and the
stocks included in Value Line's Semiconductors Index. These indices, which
reflect formulas for dividend reinvestment and weighing of individual stocks, do
not necessarily reflect returns that could be achieved by individual investors.
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<TABLE>
PERFORMANCE GRAPH FOR BURR-BROWN CORPORATION
INDEXED COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN
BURR-BROWN, RUSSELL 2000 INDEX AND VALUE LINE'S SEMICONDUCTOR INDEX
<CAPTION>
Measurement Russell Value Line Burr-Brown
Period 2000 Corporation
(Year covered) $ $ $
- - ---------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement PT -
1990
1990 100.00 100.00 100.00
1991 146.05 129.23 117.39
1992 172.94 204.93 126.09
1993 205.64 321.50 113.05
1994 201.90 391.71 234.79
1995 259.32 539.49 295.66
</TABLE>
Note: Assumes $100 invested on 12/31/90 in Burr-Brown, Russell 2000 Index
and Value Line's Semiconductor Index. Assumes reinvestment of dividends on a
daily basis.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the Exchange Act that might
incorporate future filings made by the Company under those statutes, including
this Proxy Statement, the preceding Compensation and Stock Option Committee
Report on Executive Compensation and the preceding Company Stock Price
Performance Graph are not to be incorporated by reference into any such prior
filings; nor will such report or graph be incorporated by reference into any
future filings made by the Company under those statutes.
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
None of the Named Executive Officers have employment agreements with the
Company, and their employment may be terminated at any time at the discretion of
the Board of Directors. However, the Compensation Committee of the Board of
Directors has the authority as administrator of the Company's Stock Incentive
Plan to provide for the accelerated vesting of the shares of common stock
subject to any outstanding options held by the Chief Executive Officer and the
other Named Executive Officers or any unvested shares actually held by those
individuals under the Plan, in the event their employment were to be terminated
(whether involuntarily or through a forced resignation) following a hostile
take-over of the Company effected through a successful tender for more than 50%
of the Company's outstanding common stock or through a change in the majority of
the Board as a result of one or more contested elections for Board membership.
Mr. Madavi's outstanding stock option contains such an acceleration provision.
Pursuant to his offer letter, Mr. Madavi is entitled to certain severance
benefits upon termination of his employment, at any time within five (5) years
after the date that he commenced employment, by the Company other than for
cause. Upon such termination of employment, Mr. Madavi would receive severance
pay equal to his then current base salary, until the earlier of (i) his
attainment of new employment or (ii) twelve (12) months from the date his
employment was terminated.
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PROPOSAL NO. 2:
AMENDMENT TO THE COMPANY'S 1993 STOCK INCENTIVE PLAN
The Board of Directors is requesting stockholder approval of an amendment to
the Company's 1993 Stock Incentive Plan to increase the number of shares of the
Company's common stock authorized for issuance thereunder by an additional
500,000 shares.
SUMMARY OF THE 1993 STOCK INCENTIVE PLAN
The following is a summary of the principal features of the 1993 Plan, as
most recently amended. The summary, however, does not purport to be a complete
description of all the provisions of the 1993 Plan. Any stockholder who wishes
to obtain a copy of the actual plan document may do so by written request to the
Corporate Secretary at the Company's executive offices. All share numbers in
the summary have been adjusted to reflect the 3-for-2 split of the Company's
common stock which was effected on May 19, 1995.
STRUCTURE OF THE 1993 PLAN
The 1993 Plan contains three separate equity incentive programs: (i) a
Discretionary Option Grant Program, under which key employees and consultants
may be granted options to purchase shares of the Company's common stock, (ii) a
Stock Issuance Program under which key employees and consultants may be issued
shares of the Company's common stock directly, either through the purchase of
such shares or as a bonus tied to the performance of services or the Company's
attainment of financial objectives, and (iii) an Automatic Option Grant Program,
under which non-employee Board members will automatically receive special option
grants to purchase shares of the Company's common stock.
Options granted under the Discretionary Option Grant Program may be either
incentive stock options designed to meet the requirements of Section 422 of the
Internal Revenue Code or nonstatutory options not intended to satisfy such
requirements. All grants under the Automatic Option Grant Program will be
nonstatutory options.
ADMINISTRATION
The 1993 Plan (other than the Automatic Option Grant Program) will be
administered by a committee (the "Committee") comprised of at least two members
of the Board. The Committee members will be appointed by, and serve at the
pleasure of, the Board. The Committee, which will be referred to in this
summary as the Plan Adminstrator, will have full authority, subject to the
provisions of the 1993 Plan, to determine the eligible individuals who are to
eceive option grants and/or share issuances under the Discretionary Option Grant
and Stock Issuance Programs, the type of option (incentive stock option or
nonstatutory option) to be granted, the number of shares to be covered by each
granted option or share issuance, the date or dates on which the option is to
become exercisable, and the maximum term for which the option is to remain
outstanding. All grants under the Automatic Option Grant Program will be made
in strict compliance with the express provisions of that program, and no
administrative discretion will be exercised by the Plan Administrator with
respect to the grants made under that program.
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<PAGE>
ELIGIBILITY
Key employees (including officers) of the Company and independent
consultants will be eligible to participate in the Discretionary Option Grant
and the Share Issuance Programs under the 1993 Plan. Non-employee members of
the Board will only be eligible to participate in the Automatic Option Grant
Program. As of February 28, 1996, approximately 200 employees, including 3
executive officers, were eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs, and 6 non-employee Board members were
eligible to participate in the Automatic Option Grant Program.
SHARE RESERVE
2,116,960 shares of the Company's common stock have been reserved for
issuance over the term of the 1993 Plan, subject to adjustment from time to time
in the event of certain changes to the Company's capital structure. Such share
reserve consists of (i) the 716,960 shares of the Company's common stock which
remained available for issuance under the Company's 1981 Stock Option Plan at
the time the 1993 Plan was implemented and which were accordingly transferred to
the 1993 Plan at that time, including the shares subject to outstanding options
incorporated into the 1993 Plan, plus (ii) an additional 900,000 shares
approved by the stockholders in connection with the implementation of the 1993
Plan, plus (iii) the additional 500,000-share increase for which stockholder
approval is sought under this Proposal. The issuable shares may be made
available either from the Company's authorized but unissued shares of common
stock or from shares of the Company's common stock repurchased by the Company,
including shares purchased on the open market.
In no event may the aggregate number of shares of the Company's common stock
for which any one individual participating in the 1993 Plan may be granted stock
options, separately exercisable stock appreciation rights and direct share
issuances exceed 900,000 shares in the aggregate over the remaining term of the
1993 Plan. For purposes of this limitation, any stock option grants, stock
appreciation rights or direct share issuances made prior to January 1, 1994 will
not be taken into account.
Should an option expire or terminate for any reason prior to exercise in
full (including options incorporated from the 1981 Plan and options cancelled in
accordance with the cancellation-regrant provisions described in the
"Cancellation and Regrant of Options" section below), the shares subject to the
portion of the option not so exercised will be available for subsequent option
grants or share issuances under the 1993 Plan. Shares subject to any option
surrendered in accordance with the stock appreciation right provisions of the
1993 Plan will not be available for subsequent issuance. All share issuances
under the 1993 Plan, including shares issued upon the exercise of options
incorporated into the 1993 Plan from the 1981 Plan, will reduce on a
share-for-share basis the number of shares of common stock available for
subsequent option grant or stock issuance.
As of February 28, 1996, options for 1,040,944 shares of common stock were
outstanding under the 1993 Plan (including options incorporated from the 1981
Plan), and 739,073 shares were available for future option grants, including the
500,000 share increase for which stockholder approval is sought under this
Proposal.
VALUATION
For all purposes under the 1993 Plan, the fair market value per share of
the Company's common stock on any relevant date will be the closing selling
price per share on such date, as reported on the Nasdaq National Market. On
February 28, 1996, the fair market value of the Company's common stock was
$22.50 per share.
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<PAGE>
DISCRETIONARY OPTION GRANT PROGRAM
PRICE AND EXERCISABILITY
The option price of options granted under the 1993 Plan may not be less than
the fair market value of the option shares on the grant date. The option price
is payable in cash or in shares of the Company's common stock. The option may
also be exercised through a same-day sale program without any cash outlay on the
optionee's part.
The maximum period during which any option may remain outstanding under the
1993 Plan may not exceed ten years. The Plan Administrator will have complete
discretion to grant options (i) which are immediately exercisable for vested
shares, (ii) which are immediately exercisable for unvested shares subject to
the Company's reacquisition rights or (iii) which become exercisable in
installments for vested shares over the optionee's period of service.
Any options held by the optionee at the time of his or her cessation of
service for any reason other than death or disability will normally not remain
exercisable for more than a three-month period thereafter. Should the optionee
cease service by reason of disability or die while holding one or more
outstanding options, then the outstanding options will not remain exercisable
for more than a twelve-month period thereafter. The Plan Administrator may also
permit such a twelve-month exercise period in the event the optionee ceases
service by reason of retirement at or after attainment of age 65. Under no
circumstances, however, may any option be exercised after the specified
expiration date of the option term. Each such option will normally, during the
applicable post-service exercise period, be exercisable only to the extent of
the number of option shares in which the optionee is vested at the time of
cessation of service. For purposes of the 1993 Plan, the optionee will be
deemed to continue in service for so long as such individual performs services
for the Company or any majority-owned subsidiary, whether as an employee, a
non-employee member of the board of directors or an independent consultant or
advisor.
The Plan Administrator will have complete discretion,exercisable at any
time the option remains outstanding, to extend the period following the
optionee's cessation of service during which his or her outstanding options may
be exercised and/or to accelerate the exercisability of such options in whole or
in part.
STOCK APPRECIATION RIGHTS
The Plan Administrator may grant options with tandem or limited stock
appreciation rights. Tandem stock appreciation rights provide the holders with
the right to surrender their options for an appreciation distribution from the
Company equal in amount to the excess of (i) the fair market value of the vested
shares of common stock subject to the surrendered option over (ii) the aggregate
exercise price payable for such shares. Such appreciation distribution may, at
the discretion of the Plan Administrator, be made in cash or in shares of the
Company's common stock. Officers of the Company subject to the short-swing
profit restrictions of the Federal securities laws may also be granted limited
stock appreciation rights in connection with their option grants. Any option
with such a limited stock appreciation right in effect for at least six (6)
months may be surrendered to the Company upon the successful completion of a
hostile tender offer for more than 50% of the Company's outstanding voting
securities, to the extent the option is at the time exercisable for vested
shares of common stock. In return for the surrendered option, the officer will
be entitled to a cash distribution from the Company in an amount per option
share equal to the excess of (i) the highest reported price per share of common
stock paid in the tender offer over (ii) the option exercise price payable per
share. The balance of the option (if any) will continue to remain outstanding
and become exercisable and vest in accordance with the agreement evidencing such
grant.
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<PAGE>
The Compensation Committee has the discretion to extend such limited
rights to any or all outstanding options held by officers under the 1981 Plan
and incorporated into the 1993 Plan.
STOCKHOLDER RIGHTS AND OPTION ASSIGNABILITY
No optionee is to have any stockholder rights with respect to the option
shares until such optionee has exercised the option and paid the exercise price
for the purchased shares. Options are not assignable or transferable other than
by will or by the laws of inheritance following the optionee's death, and the
option may, during the optionee's lifetime, be exercised only by the optionee.
CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator has the authority to effect the cancellation of any
or all options outstanding under the 1993 Plan (including options incorporated
from the 1981 Plan) and to grant in substitution new options covering the same
or different numbers of shares of the Company's common stock but with an
exercise price per share not less than the fair market value of the option
shares on the new grant date.
STOCK ISSUANCE PROGRAM
To the extent the shares of the Company's common stock issued under the
Stock Issuance Program are drawn from the Company's authorized but unissued
reserve of common stock, those shares must be issued for consideration payable
in (i) cash or cash equivalents, (ii) promissory notes payable to the Company's
order, or (iii) services rendered, with such consideration to be valued at not
less than the fair market value of the issued shares. Treasury shares (shares
repurchased by the Company and held as treasury shares) may be issued for
similar consideration or for such other consideration, including future
services, as the Plan Administrator deems appropriate under the circumstances.
The issued shares may be fully vested upon issuance or may vest over a
period of time. The holder of the issued shares will have full stockholder
rights with respect to thoseshares, including the right to vote suchshares and
receive allcash dividends paid on such shares, whether or not such shares are
vested. However, unvested shares may not be sold,transferred or assigned,
except for certain permitted transfers to the participant's spouse or issue or
transfers effected upon the participant's death.
Upon the participant's cessation of service (as defined above) for any
reason, his or her unvested shares will immediately be surrendered to the
Company for cancellation, and the participant will cease to have any stockholder
rights with respect to those shares. If the surrendered shares were previously
issued to the participant for consideration paid in cash or cash equivalent, the
Company will repay to the participant the cash consideration or cancel the
principal balance of any outstanding purchase-money note to the extent
attributable to the surrendered shares. The Plan Administrator may at any time
waive in whole or in part the surrender and cancellation of the unvested shares
held by the participant at the time of termination of service and thereby
accelerate the vesting of the participant's interest in the shares as to which
the waiver applies.
AUTOMATIC OPTION GRANT PROGRAM
Under the Automatic Option Grant Program, each non-employee Board will, at
the time of his or her initial election to the Board by the stockholders or
appointment by the Board, receive an option grant for 15,000 shares.
Each option granted under the Automatic Option Grant Program is subject to
the following terms and conditions:
16
<PAGE>
- The option price per share will be equal to 100% of the fair
market value per share of the Company's common stock on the automatic option
grant date.
- Each option will have a maximum term of ten years measured from
the grant date.
- Each option will be immediately exercisable for all the option
shares, but any purchased shares will be subject to repurchase by the Company at
the exercise price paid per share should the optionee cease Board service prior
to vesting in such shares. The option shares will vest, and the Company's
repurchase right will lapse, in a series of five successive equal annual
installments over the optionee's period of continued Board service, with the
first such installment to vest upon the completion of one year of Board service
measured from the automatic option grant date.
- The option will remain exercisable for a six-month period
following the optionee's cessation of Board service for any reason other than
death or permanent disability. Should the optionee die within six months after
such cessation of Board service, then the option will remain exercisable for
a twelve-month period following such optionee's death and may be exercised by
the personal representative of the optionee's estate or the person to whom the
grant is transferred by the optionee's will or the laws of inheritance. In no
event, however, may the option be exercised after the expiration date of the
option term. During the applicable exercise period, the option may not be
exercised for more than the number of shares (if any) in which the optionee is
vested at the time of the optionee's cessation of Board service.
- Should the optionee die or become permanently disabled while
serving as a Board member, then the shares of the Company's common stock subject
to any automatic option grant held by that optionee will immediately vest in
full, and those vested shares may be purchased at any time within the
twelve-month period following the date of the optionee's cessation of Board
service.
- In the event of a Corporate Transaction or Change in Control (as
those terms are defined in the Option/Vesting Acceleration section below), the
shares subject to each outstanding automatic option grant will immediately vest
in full, and each such option may be exercised for any or all of those vested
shares until the expiration or sooner termination of the option term.
- Upon the successful completion of a hostile tender offer for
securities possessing more than 50% of the combined voting power of the
Company's outstanding securities, each automatic option grant which has been
outstanding for at least six months may be surrendered to the Company for a cash
distribution per surrendered option share in an amount equal to the excess of
(A) the highest reported price per share of the Company's common stock paid in
such tender offer over (B) the option exercise price payable per share.
- The remaining terms and conditions of the option will in general
conform to the terms described above for option grants made under the
Discretionary Option Grant Program and will be incorporated into the option
agreement evidencing the automatic option grant.
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<PAGE>
GENERAL PROVISIONS
OPTION/VESTING ACCELERATION
Accelerated vesting of outstanding options and share issuances under the
1993 Plan may occur under certain circumstances in connection with changes in
the ownership or control of the Company. The transactions which may trigger
such acceleration may be identified as follows:
CORPORATE TRANSACTION: any one of the following stockholder-approved
transactions to which the Company is a party:
(i) a merger, consolidation or other reorganization in which the
Company is not the surviving entity,
(ii) the sale, transfer or other disposition of all or
substantially all of the Company's assets in complete liquidation or
dissolution of the Company, or
(iii) any reverse merger in which the Company is the surviving entity
but in which more than 50% of the Company's outstanding voting securities
are transferred to persons other than those who held such securities
immediately prior to the merger.
CHANGE IN CONTROL: either of the following events effecting a change in
ownership or control of the Company:
(i) the acquisition by any person or related group of persons (other
than the Company or its affiliates) of securities possessing more than
50% of the combined voting power of the Company's outstanding securities
pursuant to a tender or exchange offer made directly to the Company's
stockholders which the Board does not recommend such stockholders to
accept, or
(ii) a change in the composition of the Board over a period of
twenty-four (24) months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (a) have been
members of the Board continuously since the beginning of such period or
(b) have been elected or nominated for election as Board members during
such period by at least a majority of the Board members described in
clause (a) who were still in office at the time such election or
nomination was approved by the Board.
In the event of a Corporate Transaction, each option at the time outstanding
under the 1993 Plan will automatically become exercisable for all of the shares
of the Company's common stock at the time subject to that option and may be
exercised for any or all of such shares as fully-vested shares. However, an
outstanding option under the Discretionary Option Grant Program will not so
accelerate if and to the extent: (i) such option is either to be assumed by the
successor corporation (or parent thereof) or (ii) the acceleration of such
option is precluded by other limitations or restrictions imposed by the Plan
Administrator at the time of grant. Immediately following the consummation of
the Corporate Transaction, all outstanding options under the 1993 Plan will, to
the extent not previously exercised by the optionees or assumed by the successor
corporation (or its parent company), terminate and cease to be exercisable. The
Plan Administrator will have the discretion to grant options under the
Discretionary Option Grant Program which will automatically accelerate in the
event the optionee's service terminates within a designated period following
such Corporate Transaction, whether or not such options are assumed or replaced.
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<PAGE>
All unvested shares outstanding under the Discretionary Option Grant or
Stock Issuance Program will immediately vest in full upon the occurrence of a
Corporate Transaction, except to the extent (i) one or more of the Company's
repurchase rights with respect to those shares are expressly assigned to the
successor corporation (or its parent company) or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the unvested shares are issued. The outstanding repurchase rights of the Company
under the Automatic Option Grant Program will immediately terminate, and the
shares subject to those terminated rights will become fully vested, upon the
Corporate Transaction.
The Plan Administrator has full power and authority, exercisable either in
advance of any actually-anticipated Change in Control or at the time of an
actual Change in Control, to provide for the acceleration of options outstanding
under the Discretionary Option Grant Program and vesting of unvested shares
issued under the Discretionary Option Grant or Stock Issuance Program upon the
occurrence of such Change in Control. Alternatively, the Plan Administrator may
condition such acceleration upon the individual's cessation of service under
certain prescribed circumstances following the Change in Control. Upon a Change
in Control, the shares subject to each outstanding option under the Automatic
Option Grant Program will immediately vest in full, and the Company's repurchase
rights will lapse as to those shares.
The acceleration of options or vesting in the event of a Corporate
Transaction or Change in Control may be seen as an anti-takeover provision and
may have the effect of discouraging a merger proposal, a takeover attempt or
other efforts to gain control of the Company.
CHANGES IN CAPITALIZATION
In the event any change is made to the common stock issuable under the 1993
Plan by reason of any stock split, stock dividend, combination of shares,
merger, reorganization, consolidation, recapitalization, exchange of shares or
other change in capitalization of the Company affecting the common stock as a
class without the Company's receipt of consideration, the Compensation Committee
may make appropriate adjustments to (i) the maximum number and/or class of
securities issuable under the 1993 Plan, (ii) the maximum number and/or class of
securities for which any one individual may be granted stock options, separately
exercisable stock appreciation and direct stock issuances under the 1993 Plan
after December 31, 1993, (iii) the class and/or number of securities and option
price per share in effect under each outstanding option, and (iv) the class
and/or number of securities for which automatic option grants are to be
subsequently made per eligible non-employee Board member under the Automatic
Option Grant Program. The adjustments to the outstanding options will prevent
the dilution or enlargement of benefits thereunder.
The grant of stock options or stock appreciation rights under the 1993 Plan
will not affect the right of the Company to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.
FINANCIAL ASSISTANCE
The Plan Administrator may institute a loan program in order to assist one
or more optionees or participants in financing the exercise of outstanding
options under the Discretionary Option Grant Program or the acquisition of
shares under the Stock Issuance Program. The form in which such assistance is
to be made available (including Company loans or guarantees or installment
payments) and the terms upon which such assistance is to be provided will be
determined by the Committee. However, the maximum amount of financing provided
any optionee or participant may not exceed the amount of cash consideration
payable for the issued shares plus all applicable federal and state taxes
incurred in connection with the acquisition of the shares. Any such financing
may be subject to forgiveness in whole or in part, at the discretion of the Plan
Administrator, over the optionee's or participant's period of service.
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EXCESS ISSUANCES
Options to purchase shares of common stock may be granted and shares of
common stock may be issued under the 1993 Plan which are in both instances in
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued are held in escrow until the
Company's stockholders approve an amendment sufficiently increasing the number
of shares available for issuance under the 1993 Plan.
SPECIAL TAX ELECTION
The Plan Administrator may provide one or more holders of nonstatutory
options or unvested shares under the 1993 Plan with the right to have the
Company withhold a portion of the shares otherwise issuable to such individuals
in satisfaction of the federal and state income and employment tax liability
incurred by such individuals in connection with the exercise of their options or
the vesting of their shares. Alternatively, the Plan Administrator may allow
such individuals to deliver already existing shares of the Company's common
stock in payment of such tax liability.
TREATMENT OF OPTIONS OUTSTANDING UNDER THE 1981 PLAN
Each outstanding stock option under the 1981 Plan was incorporated into the
1993 Plan when the 1993 Plan was approved by the stockholders at the 1993 Annual
Stockholders Meeting. However, each such option will continue to be governed
solely by the terms and conditions of the instrument evidencing such grant, and
nothing in the 1993 Plan will be deemed to affect or otherwise modify the rights
or obligations of the holder of such stock options with respect to their
acquisition of shares of the Company's common stock thereunder. However, one or
more provisions or features of the 1993 Plan (including the option/vesting
acceleration provisions applicable to Corporate Transactions and Changes in
Control) may, in the discretion of the Plan Administrator, be extended to the
incorporated options.
AMENDMENT AND TERMINATION
The Board may amend or modify the 1993 Plan in any or all respects
whatsoever. However, the Automatic Option Grant Program may not be amended more
often than every six months, except to the extent necessary to comply with
applicable Federal income tax laws and regulations. No amendment to the 1993
Plan may adversely affect the rights of existing optionees without their
consent, and the Board may not (i) materially increase the maximum number of
shares issuable under the 1993 Plan, increase the maximum number of shares for
which any one participant may be granted stock options, separately exercisable
stock appreciation rights or direct stock issuances after December 31, 1993 or
materially increase the number of shares for which options may be granted to
non-employee Board members under the Automatic Option Grant Program, except to
reflect certain changes in the Company's capital structure; (ii) materially
modify the eligibility requirements for option grants; or (iii) otherwise
materially increase the benefits accruing to participants under the 1993 Plan
without the approval of the Company's stockholders.
The Board may terminate the 1993 Plan at any time, and the 1993 Plan will in
all events terminate on February 10, 2003. Each stock option or unvested share
issuance outstanding at the time of such termination will remain in force in
accordance with the provisions of the instruments evidencing such grant or
issuance.
STOCK AWARDS
The table below shows, as to the Company's executive officers and the
indicated groups, the following information for the period commencing January 1,
1993 and ending February 28, 1996: (i) the number of shares
20
<PAGE>
of the Company's common stock subject to options granted under the 1993 Plan and
(ii) the weighted average exercise price payable per share. All the share
numbers and exercise prices have been adjusted to reflect the 3-for-2 split of
the Company's common stock effected in May 1995.
- - --------------------------------------------------------------------------------
OPTION TRANSACTIONS
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Weighted Average
Exercise Price
Options Granted of Options
Name (Number of Shares) Granted
- - --------------------------------------------------------------------------------
<S> <C> <C>
Thomas R. Brown, Jr., Chairman 0 $ 0.00
of the Board
- - --------------------------------------------------------------------------------
Syrus P. Madavi, President & 450,000 $ 4.58
Chief Executive Officer
- - --------------------------------------------------------------------------------
John L. Carter, Executive Vice 93,000 $4.52
President and Chief Financial
Officer
- - -------------------------------------------------------------------------------
All current executive officers as a 543,000 $ 4.55
group (3 persons)
- - --------------------------------------------------------------------------------
Thomas J. Troup 15,000 $ 5.33
- - --------------------------------------------------------------------------------
Francis J. Aguilar 15,000 $ 5.33
- - --------------------------------------------------------------------------------
John S. Anderegg, Jr. 15,000 $ 5.33
- - --------------------------------------------------------------------------------
James A. Riggs 15,000 $ 5.33
- - --------------------------------------------------------------------------------
Bob J. Jenkins 15,000 $ 5.33
- - --------------------------------------------------------------------------------
Marcelo A. Gumucio 15,000 $ 5.33
- - --------------------------------------------------------------------------------
All non-employee directors as a 90,000 $ 7.10
group (6 persons)
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
All employees, including current 498,250 $15.82
officers who are not executive
officers as a group
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
</TABLE>
No option grants have been made to date on the basis of the 500,000-share
increase to the 1993 Plan for which stockholder approval is sought under this
Proposal.
21
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
OPTION GRANTS
Options granted under the 1993 Plan may be either incentive stock options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
nonstatutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as described
below:
INCENTIVE STOCK OPTIONS. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized at
the time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise made the
subject of disposition. For Federal tax purposes, dispositions are divided into
two categories: (i) qualifying and (ii) disqualifying. The optionee will make a
qualifying disposition of the purchased shares if the sale or other disposition
of such shares is made after the optionee has held the shares for more than two
years after the grant date of the option and more than one year after the
exercise date. If the optionee fails to satisfy either of these two minimum
holding periods prior to the sale or other disposition of the purchased shares,
then a disqualifying disposition will result.
Upon a qualifying disposition of the shares, the optionee will recognize
long-term capital gain in an amount equal to the excess of (i) the amount
realized upon the sale or other disposition of the purchased shares over (ii)
the option exercise price paid for those shares. If there is a disqualifying
disposition of the shares, then the excess of (i) the fair market value of those
shares on the option exercise date over (ii) the option exercise price paid for
the shares will be taxable as ordinary income. Any additional gain recognized
upon the disposition will be a capital gain.
If the optionee makes a disqualifying disposition of the purchased shares,
then the Company will be entitled to an income tax deduction, for the taxable
year in which such disposition occurs, equal to the excess of (i) the fair
market value of such those on the option exercise date over (ii) the option
exercise price paid for the shares. In no other instance will the Company be
allowed a deduction with respect to the optionee's disposition of the purchased
shares. The Company anticipates that any compensation deemed paid by the
Company upon one or more disqualifying dispositions of incentive stock option
shares under the 1993 Plan will be deductible by the Company and will not have
to be taken into account for purposes of the $1 million limitation per covered
individual on the deductibility of the compensation paid to certain executive
officers of the Company.
NONSTATUTORY OPTIONS. No taxable income is recognized by an optionee upon
the grant of a nonstatutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the option exercise price paid for the shares, and the optionee will be
required to satisfy the tax withholding requirements applicable to such income.
Special provisions of the Internal Revenue Code apply to the acquisition of
unvested shares of the Company's common stock under a nonstatutory option.
These special provisions may be summarized as follows:
- If the shares acquired upon exercise of the nonstatutory option
are subject to repurchase by the Company at the original option
exercise price in the event of the optionee's termination of
service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will
have to report as ordinary income, as and when the optionee vests
in the shares, an amount equal to the excess of (i) the fair
market value of the shares on the date the optionee vests in those
shares over (ii) the option exercise price paid for the shares.
22
<PAGE>
- The optionee may, however, elect under Section 83(b) of the
Internal Revenue Code to include as ordinary income in the year of
exercise of the nonstatutory option an amount equal to the excess of
(i) the fair market value of the purchased shares on the exercise date
over (ii) the option exercise price paid for such shares. If the
Section 83(b) election is made, the optionee will not recognize any
additional income as and when he or she vests in such shares.
The Company will be entitled to a business expense deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised nonstatutory option. The deduction will in general be allowed for the
taxable year of the corporation in which such ordinary income is recognized by
the optionee. The Company anticipates that the compensation deemed paid by the
Company upon the exercise of nonstatutory options granted under the 1993 Plan
will be deductible by the Company and will not have to be taken into account for
purposes of the $1 million limitation per covered individual on the
deductibility of the compensation paid to certain executive officers of the
Company.
STOCK APPRECIATION RIGHTS.
An optionee who is granted a stock appreciation right will recognize
ordinary income in the year of exercise equal to the amount of the appreciation
distribution. The Company will be entitled to a business expense deduction
equal to the appreciation distribution for the taxable year in which the
ordinary income is recognized by the optionee.
DIRECT STOCK ISSUANCES
The tax principles applicable to direct stock issuances under the 1993 Plan
will be substantially the same as those summarized above for the exercise of
nonstatutory option grants.
ACCOUNTING TREATMENT
Under current accounting rules, option grants or stock issuances with
exercise or issue prices equal to the fair market value of the shares on the
grant or issue date will not result in any direct charge to the Company's
reported earnings. However, outstanding options may have to be taken into
account in the calculation of earnings per share. In addition, new FASB 123
will require footnote disclosure and pro-forma statements to the Company's
financial statements indicating the impact which the options granted under the
1993 Plan would have upon the Company's reported earnings were the value of
those options at the time of grant treated as compensation expense.
Should one or more optionees be granted stock appreciation rights which have
no conditions upon exercisability other than a service or employment
requirement, then such rights will result in compensation expense to be charged
against the Company's earnings.
STOCKHOLDER APPROVAL
The affirmative vote of a majority of the outstanding shares of the
Company's voting stock present or represented and entitled to vote at the 1996
Annual Meeting is required for approval of the amendment to the 1993 Plan. If
the stockholders do not approve such amendment, then any options granted on the
basis of the 500,000 share increase authorized by the amendment will terminate
without becoming exercisable for any of the shares of common stock subject to
those options, and no further options will be granted on the basis of such share
increase. The 1993 Plan will, however, remain in effect, and option grants may
continue to be made
23
<PAGE>
pursuant to the provisions of the 1993 Plan until the available reserve of
common stock as last approved by the stockholders has been issued under the 1993
Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT TO
THE COMPANY'S 1993 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF
COMMON STOCK AUTHORIZED FOR ISSUANCE THEREUNDER BY AN ADDITIONAL 500,000 SHARES.
PROPOSAL NO. 3:
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors is requesting stockholder approval of an amendment to
the Company's Restated Certificate of Incorporation to increase the number of
shares of Common Stock authorized for issuance from 40,000,000 to 80,000,000.
The Company's stockholders have previously approved an amendment to the
Company's Restated Certificate of Incorporation to increase the number of shares
of Common Stock authorized for issuance from 20,000,000 shares to 40,000,000
shares. Such increase was proposed, in part, in order to maintain an adequate
percentage of Common Stock available for future issuance, in view of the
increase in outstanding shares due to the 3-for-2 stock split in the form of a
stock dividend effected on May 19, 1995. On February 28, 1996, 16,187,374
shares of Common Stock were issued and outstanding. There are 1,780,017
shares of Common Stock reserved for issuance upon exercise of options or
warrants. The remaining 22,032,609 shares of authorized but unissued Common
Stock are not reserved for any specific use and are available for future
issuance. The Board of Directors considers it advisable to have the additional
shares available for possible future financings, acquisitions, stock dividends,
for issuance under the Company's employee benefit plans and for other general
corporate purposes. However, the Company does not presently have any plans or
proposals to use any portion of the additional shares that would be authorized
upon adoption of the amendment for any of the foregoing purposes with the
exception of the shares recommended in Proposal 4 to increase the shares
allocated for issuance under the 1993 Stock Incentive Plan by 500,000 shares.
In addition, the Company is not presently contemplating a merger or acquisition
transaction that would use any portion of the additional authorized shares.
If this Amendment is adopted, Article Fourth of the Company's Restated
Certificate of Incorporation will be amended to read in its entirety as follows:
"FOURTH: The Corporation shall be authorized to issue two classes of shares
of stock to be designated, respectively, "Preferred Stock" and "Common Stock".
The total number of shares which the Corporation shall have authority to issue
is Eighty-two Million (82,000,000) and the aggregate par value of all shares of
stock that are to have a par value shall be Eight Hundred Twenty Thousand
Dollars ($820,000). The total number of shares of Preferred Stock shall be Two
Million (2,000,000) and the part value of each share of such class shall be One
Cent ($.01). The total number of shares of common stock shall be Eighty Million
(80,000,000) and the par value of each share of such class shall be One Cent
($.01)."
If this amendment is adopted, the additional shares of Common Stock may be
issued by direction of the Board of Directors at such times, in such amounts and
upon such terms as the Board of Directors may determine, without further
approval of the stockholders unless, in any instance, such approval is expressly
required by regulatory agencies or otherwise. The Nasdaq National Market, on
which the issued shares of Common Stock are currently included for quotation,
requires stockholder approval as a prerequisite to continued inclusion of the
shares in several situations, including acquisition transaction, where the
issuance of additional shares could result in an increase of 20% or more of the
number of shares of capital stock of the Company outstanding. The Common Stock
carries no preemptive rights to purchase additional shares.
24
<PAGE>
The proposed increase in the authorized number of shares of Common Stock
could have a number of effects on the Company's stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover of
the Company more difficult. For example, additional shares could be issued by
the Company so as to dilute the stock ownership or voting rights of persons
seeking to obtain control of the Company. Similarly, the issuance of additional
shares to certain persons allied with the Company's management could have the
effect of making it more difficult to remove the Company's current management by
diluting the stock ownership or voting rights of persons seeking to cause such
removal.
In addition, an issuance of additional shares by the Company could have an
effect on the potential realizable value of a stockholder's investment. In the
absence of a proportionate increase in the Company's earnings and book value, an
increase in the aggregate number of outstanding shares of the Company caused by
the issuance of the additional shares would dilute the earnings per share and
book value per share of all outstanding shares of the Company's stock. If
suchfactors were reflected in the price per share of Common Stock, the potential
realizable value of a stockholder's investment could be adversely affected.
The affirmative vote of a majority of the outstanding shares of Common Stock
is required for approval of the amendment to the Company's Restated Certificate
of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
INCREASE IN THE COMPANY'S AUTHORIZED SHARES OF COMMON STOCK FROM 40,000,000
SHARES TO 80,000,000 SHARES.
PROPOSAL NO. 4:
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the books, records, and accounts of the Company and its
subsidiaries for the year ending December 31, 1996.
The firm of Ernst & Young LLP audits the Company's books annually, has
offices in or convenient to the localities in the United States and foreign
countries where the Company or its subsidiaries operate and is considered to be
well qualified. The Board of Directors recommends that the stockholders approve
the proposal to ratify the selection of Ernst & Young LLP to serve as
independent auditors for the current year.
Ernst & Young LLP has no direct or indirect material financial interest in
the Company or any of its subsidiaries. A representative of Ernst & Young LLP
is expected to be present at the Annual Meeting and will be given the
opportunity to make a statement on behalf of Ernst & Young, if they so desire.
The representative also will be available to respond to questions raised by
those in attendance at the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
SELECTION OF ERNST & YOUNG LLP TO SERVE AS INDEPENDENT AUDITORS FOR THE
YEARENDING DECEMBER 31, 1996.
25
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, however, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
annual meeting of stockholders to be held in 1997 must be received by no later
than November 27, 1996 in order to be included in the proxy statement and proxy
relating to that meeting.
By order of the Board of Directors
Jill H. Rice
Corporate Secretary
March 27, 1996
26
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BURR-BROWN CORPORATION
Thomas R. Brown, Jr. and Syrus P. Madavi, or either of them, are hereby
appointed as the lawful agents and proxies of the undersigned (with all powers
the undersigned would possess if personally present, including full power of
substitution) to represent and to vote all shares of capital stock of Burr-Brown
Corporation (the "Company") which the undersigned is entitled to vote at the
Company's Annual Meeting of Stockholders on April 26, 1996, and at any
adjournments or postponements thereof as follows:
1. The election of all nominees listed below for the Board of
Directors, as described in the Proxy Statement:
Thomas R. Brown, Jr., Syrus P. Madavi, Thomas J. Troup, John S.
Anderegg, Jr., James A. Riggs, Francis J. Aguilar and Marcelo A.
Gumucio.
FOR / / AUTHORIZATION WITHHELD / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
such name or names in the space provided below.)
- - --------------------------------------------------------------------------------
2. Approve an amendment to the Company's 1993 Stock Incentive
Plan to increase the number of shares of Common Stock
authorized for issuance thereunder by an additional 500,000
shares;
FOR / / AGAINST / / ABSTAIN / /
3. Approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized shares of Common
Stock from 40,000,000 shares to 80,000,000 shares;
FOR / / AGAINST / / ABSTAIN / /
4. Proposal to ratify the appointment of Ernst & Young LLP as
independent auditors of the Company for the year ending
December 31, 1996:
FOR / / AGAINST / / ABSTAIN / /
P-1
<PAGE>
5. Transaction of any other business which may properly come before
the meeting and any adjournment or postponement thereof.
The Board of Directors recommends a vote FOR each of the above
proposals. THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO DIRECTION IS
INDICATED, WILL BE VOTED FOR EACH OF THE ABOVE PROPOSALS AND, AT THE DISCRETION
OF THE PERSONS NAMED AS PROXIES, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. This proxy may be revoked at any time before it is voted.
DATE: , 1996
------------------------
------------------------------------
(Signature)
------------------------------------
(Signature if held jointly)
(Please sign exactly as shown on your stock certificate and on the
envelope in which this proxy was mailed. When signing as partner,
corporate officer, attorney, executor, administrator, trustee,
guardian or in any other representative capacity, give full title as
such and sign your own name as well. If stock is held jointly, each
joint owner should sign.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
P-2
