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
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:
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:
BURR-BROWN CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 25, 1997 9:00 a.m.
You are hereby notified that the Annual Meeting of Stockholders
of Burr-Brown Corporation will be held on the 25th day of April
1997 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 amendments to the Company's 1993 Stock
Incentive Plan, including a 500,000-share increase
to the number of shares authorized for issuance
under the Plan;
3. To ratify the selection of Ernst & Young LLP to serve
as independent auditors for the Company for the year
ending December 31, 1997; and
4. 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 March 5, 1997 will be entitled to vote at
the meeting.
By Order of the Board of Directors,
Jill H. Rice
Corporate Secretary
March 27, 1997
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.
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 25, 1997, 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 March 27, 1997.
On March 4, 1997, the Board of Directors declared a 3-for-2
split of the Company's common stock, in the form of a stock
dividend, payable on April 8, 1997 to stockholders of record on
March 18, 1997. The share numbers in this Proxy Statement do not
give effect to this stock split unless specifically stated as
"post-split."
VOTING RIGHTS
The close of business on March 5, 1997 was the record date
for stockholders entitled to notice of and to vote at the Annual
Meeting and any adjournments thereof. As of March 5, 1997, the
Company had 15,940,297 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 and 3 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 and are treated as
negative votes, 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.
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The following table sets forth certain information as of
March 5, 1997, with the exception of information regarding
Warburg, Pincus Counsellors, Inc. and The Prudential Insurance
Company of America which are stated as of December 31, 1996,
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, including those who are nominees for
election to the Board at the Annual Meeting, (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 Class
Name of Beneficial Owner Shares
=========================== ============ =================
<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 59,600 (3) *
Director and Vice Chairman
Francis J. Aguilar 16,500 (4) *
Director
John S. Anderegg, Jr. 68,156 (4) *
Director
James A. Riggs 15,000 (4) *
Director
Marcelo A. Gumucio 21,000 (5) *
Director
Syrus P. Madavi 310,000 (6) 2
Director, President & CEO
John L. Carter 33,562 (7) *
Former Executive
Vice President & CFO
J. Scott Blouin 5,400 (8) *
CFO
All Current Directors and 5,987,944 (9) 37
Current Executive Officers
as a Group (9 persons)
Warburg, Pincus Counsellors,
Inc. 1,189,600 7
466 Lexington Avenue
New York, NY 10017
The Prudential Insurance
Company of America 849,000 5
751 Broad Street
Newark, New Jersey 07102
</TABLE>
================================
* Less than one (1%) percent of the outstanding common stock.
(1)Percentage of beneficial ownership is calculated assuming
16,297,090 shares of common stock were outstanding on March
5, 1997. This percentage also includes common stock of which
such individual or entity has the right to acquire beneficial
ownership either currently or within sixty (60) days after
March 5, 1997, 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 4,332,298 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 71,049 shares held in
the Burr-Brown Corporation Stock Bonus Plan and Trust
pursuant to which Mr. Brown and Mr. Madavi have voting power.
(3)Includes 50,600 shares held in a trust pursuant to which Mr.
Troup holds voting and investment power and 9,000 shares
subject to options granted pursuant to the Company's Stock
Incentive Plan which are currently exercisable or which will
become exercisable within sixty (60) days after March 5,
1997.
(4)Includes 15,000 shares subject to options granted pursuant to
the Company's Stock Incentive Plan which are currently
exercisable or which will become exercisable within sixty
(60) days after March 5, 1997.
(5)Includes 12,000 shares subject to options granted pursuant to
the Company's Stock Incentive Plan which are currently
exercisable or which will become exercisable within sixty
(60) days after March 5, 1997.
(6)Includes 267,393 shares subject to options granted pursuant
to the Company's Stock Incentive Plan which are currently
exercisable or which will become exercisable within sixty
(60) days after March 5, 1997.
(7)Mr. Carter retired as Executive Vice President and Chief
Financial Officer on August 18, 1996, however, he continued
in the service of the Company as a consultant until December
18, 1996. Includes 18,000 shares subject to options granted
pursuant to the Company's Stock Incentive Plan which are
currently exercisable.
(8)Mr. Blouin was appointed Chief Financial Officer on August
19, 1996. Includes 5,400 shares subject to options granted
pursuant to the Company's Stock Incentive Plan which are
currently exercisable or which will become exercisable within
sixty (60) days after March 5, 1997.
(9)Includes 356,793 shares subject to options granted to
directors and officers pursuant to the Company's Stock
Incentive Plan which are currently exercisable or which will
become exercisable within sixty (60) days after March 5,
1997. 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.
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 five (5) directors to be elected.
There are five (5) 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 proxy holders 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 proxy holders intend to vote all proxies
received by them for the nominees listed below, to the extent
authority is not withheld. The five (5) 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 five (5) 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. 70 Director since 1956. Founder of the Company and
Brown, Jr. 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. 47 Director, President and Chief Executive Officer
Madavi of the Company since March 1994. Formerly, Mr.
Madavi was employed at Raytheon from 1990 to
1994, the last two years as President, Semicon-
ductor Division. Prior to that Mr. Madavi 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.
John S. 73 Director since 1958. Chairman of the Board of
Anderegg, Jr. 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.
Francis J. 64 Director since 1993. Professor Emeritus Business
Aguilar Administration, Harvard Business School, served as
Faculty Chairman, Harvard International Senior
Manager's Program, 1972 to 1974 and Chairman,
International Teachers Program, 1968 to 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. 59 Director since 1995. Mr. Gumucio has served as
Gumucio Chief Executive Officer of Micro Focus since April
1996. From November 1992 until March 1996,
Mr. Gumucio was Chairman of the Management Board
and the Chief Executive Officer of Memorex
Telex N.V., 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., where he served as Executive Vice
President from 1983 to 1988 and as President
and Chief Operating Officer from 1988 to
1990.
Mr. James A. Riggs, resigned on March 15, 1997 for health reasons
and Mr. Thomas J. Troup, a current director, will retire on April
25, 1997 and will not stand for re-election.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held five (5) meetings during 1996.
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 1996. The Audit Committee, which is currently
comprised of Directors John S. Anderegg, Jr., Chairman, and
Thomas J. Troup, 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 eight (8) meetings during
1996. The Compensation Committee, which is currently comprised
of Directors James A. Riggs, Chairman, Francis J. Aguilar, and
Marcelo A. Gumucio 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 one (1) meeting during 1996.
The Nominating Committee which is currently comprised of
Directors Thomas J. Troup, Chairman, John S. Anderegg, Jr., and
Marcelo A. Gumucio considers nominees recommended by
stockholders. Any nominee recommendations should be addressed to
the attention of the Corporate Secretary at the Company's
principal executive offices.
The Governance Committee held two (2) meetings during 1996.
The Governance Committee which is currently comprised of
Directors Francis J. Aguilar, Chairman, Thomas J. Troup, John S.
Anderegg, Jr., James A. Riggs and Marcelo A. Gumucio 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. None of
the non-employee Directors received any option grants under the
Stock Incentive Plan during the 1996 fiscal year.
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, 1996, 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 one Form 4 report which
should have been filed by Mr. Bob J. Jenkins with respect to his
sale of 3,000 shares of common stock in April, 1996. Mr.
Jenkins subsequently reported this transaction on his Form 5 for
the 1996 fiscal year.
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 1996 fiscal year was in
excess of $100,000, for services rendered in all capacities to
the Company and its subsidiaries for each of the fiscal years
ended December 31, 1996, 1995, and 1994. John L. Carter retired
as Executive Vice President and Chief Financial Officer on August
18, 1996, but continued in the service of Burr-Brown as a
consultant through December 18, 1996. The individuals included
in the table will be hereafter referred to as the Named Executive
Officers. No other executive officer who would have otherwise
been included in such table on the basis of salary and bonus
earned for the 1996 fiscal year resigned or terminated employment
during that fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Other Awards(3) All
Name and Annual Options Other
Principal Compen- (No.of Compen-
Position Year Salary Bonus sation Shares) sation
($)(1) ($) ($)(2) ($)(4)
<S> <C> <C> <C> <C> <C> <C>
Thomas R. 1996 195,000 2,144 --- --- 2,375
Brown, Jr., 1995 195,000 11,660(5) --- --- 2,310
Chairman of 1994 195,000 --- --- --- 2,310
the Board
Syrus P. 1996 250,000 202,441 --- --- 2,375
Madavi, 1995 250,000 464,797(6) 4,780 --- 2,310
President and 1994 190,385 99,000 81,374 450,000 1,288
Chief Executive
Officer
John L. 1996 105,025 --- --- ---
6,375(8)
Carter, 1995 160,000 86,864(7) --- --- 2,310
Former Executive 1994 160,000 20,000 --- 84,000 2,310
Vice President
and Chief
Financial Officer
J. Scott Blouin(9) 1996 143,731 38,868 56,205 --- 2,375
Chief Financial 1995 --- --- --- --- ---
Officer 1994 --- --- --- --- ---
</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) None of the Named Executive Officers were awarded restricted
stock in the 1996 fiscal year nor held restricted stock at the
end of that year.
(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 part of his salary deferrals under
such plan.
(5) Includes a profit sharing bonus of $11,660 paid in 1996 for
services in 1995.
(6) Includes a profit sharing bonus of $14,797 paid in 1996 for
services in 1995.
(7) Includes a profit sharing bonus of $9,664 paid in 1996 for
services in 1995.
(8) Includes $4,000 paid for consulting fees for the period August
18, 1996 through December 18, 1996.
(9) Mr. Blouin became Chief Financial Officer on August 19, 1996.
Stock Options
No stock options were granted to any of the Named Executive
Officers during the fiscal year ended December 31, 1996.
Stock Option Exercises and Holdings
The following table sets forth certain information concerning the
exercise of stock options during the fiscal year ended December 31,
1996 by each of the Named Executive Officers and the number and
value of unexercised options held by each of the Named Executive
Officers at the end of the 1996. No stock appreciation rights
have been granted to the Named Executive Officers.
<TABLE>
<CAPTION>
Aggregated Option Vales at 1996 Year End:
Name Shares Value Number of Value of
Acquired Realized securities unexercised in-the-
on ($)(1) underlying money options at
Exercise unexercised 1996 year end
options at 1996 (2)(3)
year end
Exercis- Unexer- Exercis- Unexer-
able cisable able ($) cisable
($)
<S> <C> <C> <C> <C> <C> <C>
Thomas R. 0 0 0 0 0 0
Brown Jr.,
Chairman of
the Board
Syrus P. 20,000 349,168 200,000 180,000 4,290,668 3,856,003
Madavi,
President &
CEO
John L. 7,000 141,750 30,000 0 642,750 0
Carter,
Former
Executive
Vice
President
and CFO(4)
J. Scott 0 0 5,400 21,600 14,850 59,400
Blouin,
CFO(5)
</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, 1996.
(3) Based on the market price of $26.00 which was the closing price
per share of the Company's common stock on the Nasdaq National
Market on December 31, 1996, less the option exercise price
payable per share.
(4) Mr. Carter retired from the Company on August 18, 1996 and
served as a consultant for the period August 18, 1996 through
December 18, 1996.
(5) Mr. Blouin became Chief Financial Officer on August 19, 1996.
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 $4,310 $8,621 $12,931 $17,242
$125,000 5,560 11,121 16,681 22,242
$150,000 6,810 13,621 20,431 27,242
$200,000 9,310 18,621 27,931 37,242
</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 1996. Compensation covered under the plan for
named executives as of the end of 1996: Brown: $189,150; Madavi:
$150,000; Carter: $115,564; Blouin $110,096. The estimated
years of service for each named executive are as follows: Brown:
41; Madavi: 3; Carter: 3; and Blouin: 2.
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 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 1996 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 executive
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 utilized several
specific compensation surveys for comparative compensation
purposes. In addition, 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 are reviewed on an annual basis, and adjustments, if
any, will be made in accordance with the factors indicated above.
During 1996 the base salary for J. Scott Blouin was increased to
$147,000 to reflect his new position as Chief Financial Officer.
His salary was further increased to $162,000 in early 1997.
* Annual Incentive Compensation. The Compensation
Committee established an executive incentive plan for fiscal 1996
designed to reward executive officers on the basis of the
Company's financial results for the year and each executive
officer's individual performance. Under the plan, a percentage
of the Company's pre-tax income for the 1996 fiscal year was set
aside for individual bonus awards to the Chief Executive Officer
and other executive officers and employees of the Company. The
Compensation Committee determined the individual bonus award for
the Chief Executive Officer on the basis of his achievement of a
number of strategic objectives relating to product development,
increased market share and financial performance of the Company
relative to the industry. The Compensation Committee then
distributed the balance of the bonus pool to the other executive
officers and participating employees on the basis of the
individual performance evaluations and bonus recommendations
submitted by the Chief Executive Officer. The actual bonuses
awarded to the Chief Executive Officer and the other named
executive officers are set forth in the Summary Compensation
Table which appears earlier in this Proxy Statement.
* 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, and his or her 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 1996 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.
As previously indicated, Mr. Madavi's incentive compensation
for the 1996 fiscal year was dependent upon the Company's
financial performance, measured in terms of pre-tax income, and
his achievement of a number of strategic objectives relating to
the Company's position in the industry. No additional stock
options were awarded to Mr. Madavi during the 1996 fiscal year.
In October 1996, the Compensation Committee approved a new
severance agreement with Mr. Madavi which replaced his former
severance arrangement. Under the new agreement, severance
benefits will be paid to Mr. Madavi upon his termination of
employment under certain specified circumstances, including an
involuntary termination of his employment by the Company or any
voluntary or involuntary termination in connection with certain
changes in control or ownership of the Company. A detailed
summary of Mr. Madavi's benefits and the payout events under the
new agreement may be found in the section of this Proxy Statement
entitled "Employment Contracts, Severance Agreements, and Change
in Control Benefits." The Compensation Committee designed the
new severance agreement so that Mr. Madavi's overall compensation
package will remain competitive with the compensation
arrangements, including termination benefits, in effect for other
chief executive officers in the industry. The Compensation
Committee believes that the level of financial security which the
new agreement will provide Mr. Madavi in the event his employment
were to be terminated is fair and equitable in light of the
valuable contribution which Mr. Madavi has made to the Company's
financial success during his tenure to date as Chief Executive
Officer and will allow him to continue to concentrate his efforts
and attention to the business and affairs of the Company without
undue concern for his own financial situation.
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 1996 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 1997 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 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, 1991 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.
<TABLE>
<CAPTION>
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
Measurement Russell Value Burr-Brown
Period 2000 Line Corporation
(Year Covered) $ $ $
<S> <C> <C> <C>
Measurement PT
1991
1991 100.00 100.00 100.00
1992 118.41 158.58 107.33
1993 140.80 248.80 96.22
1994 138.24 303.13 200.00
1995 177.55 417.51 566.67
1996 206.83 627.97 577.78
Note: Assumes $100 invested on 12/31/91 in Burr-Brown, Russell
2000 Index and Value Line's Semiconductor Index. Assumes
reinvestment of dividends on a daily basis.
</TABLE>
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1933
or the Securities Exchange Act of 1934 that might incorporate
future filings made by the Company under those statutes,
including this Proxy Statement, the preceding Compensation
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
The Company does not have any employment contracts with its
executive officers. However, in October 1996, the Company
entered into a formal severance agreement with Mr. Syrus P.
Madavi, the Company's President and Chief Executive Officer,
which replaces his former severance arrangement. Under the new
agreement, severance benefits will be paid to Mr. Madavi upon his
termination of employment under certain specified circumstances.
The nature of those benefits and the various pay-out events may
be summarized as follows:
Voluntary Termination/Termination for Misconduct: In
the absence of a change in control of the Company, Mr. Madavi
will not be entitled to any severance benefits in the event of
his voluntary resignation, and under no circumstances will any
severance benefits be paid to him if his employment is terminated
for misconduct.
Termination for Just Cause: If the Company terminates
Mr. Madavi's employment for just cause (including his failure to
correct one or more material deficiencies in his performance
after receipt of written notice from the Board), then he will be
entitled to the following severance benefits: (i) a one-time lump
sum payment equal to his average annual base salary and bonus for
the preceding three years and (ii) the continuation of his base
salary for twelve months.
Termination without Cause: Should the Company
terminate Mr. Madavi's employment without cause (for any reason
other than misconduct or just cause), then the Company will pay
him a severance benefit equal to two times his average annual
base salary and bonus for the preceding three years, with one-
half of such amount to be paid in an immediate lump sum and the
balance to be paid in twelve equal monthly installments.
Should the Company undergo a change in control (a
change in ownership of securities possessing more than fifty
percent of the total combined voting power of the Company's
outstanding securities or the sale of all or substantially all of
the Company's assets in liquidation or dissolution of the
Company), then Mr. Madavi will be entitled to the following
severance benefits in connection with the subsequent termination
of his employment:
Resignation: If Mr. Madavi voluntarily leaves the
Company's employ within two years after the change in control,
then he will be entitled to a severance benefit equal to two
times his average annual base salary and bonus for the preceding
three years, with one-half of such amount to be paid in an
immediate lump sum and the balance to be paid in twelve equal
monthly installments.
Constructive Termination: Should Mr. Madavi resign
within six months following a constructive termination of his
employment triggered by a material reduction in his duties, a
greater than ten percent reduction in his level of compensation,
or a relocation of his principal place of employment by more than
fifty miles, then he will be entitled to a severance benefit
equal to three times his average annual base salary and bonus for
the preceding three years, with two-thirds of such amount to be
paid in an immediate lump sum and the balance to be paid in
twelve equal monthly installments.
Termination without Cause: Should the Company
terminate Mr. Madavi's employment without cause (for any reason
other than misconduct or just cause) at any time following a
change in control of the Company, then he will be entitled to a
severance benefit equal to four times his average annual base
salary and bonus for the preceding three years, with three-
fourths of such amount to be paid in an immediate lump sum and
the balance to be paid in twelve equal monthly installments.
Should the Company be acquired through a hostile take-over
(whether through the successful completion of a hostile tender
offer for more than fifty percent of the Company's outstanding
voting securities or a change in the majority of the Board of
Directors through one or more contested elections for Board
members) and Mr. Madavi leaves the Company's employ at any time
within the succeeding two years, then he will be entitled to a
lump sum severance payment equal to two times his average annual
base salary and bonus for the preceding three years.
The change in control severance benefits payable to Mr.
Madavi (other than in connection with a hostile take-over) are
subject to certain limitations to prevent any excess parachute
payments under the federal tax laws. The severance agreement
also imposes certain non-competition covenants and consulting
obligations upon Mr. Madavi during the period severance benefits
are to be paid to him following his termination of employment,
whether or not such termination is in connection with a change in
control. In addition, the Company will, at its expense, provide
continued health care coverage under the Company's medical/dental
plans to Mr. Madavi and his eligible dependents for up to a
twelve-month period following his termination.
The severance agreement also requires that all future option
grants made to Mr. Madavi contain certain vesting acceleration
provisions, ranging from twenty percent (20%) to one hundred
percent (100%) accelerated vesting, in connection with his
termination of employment or certain changes in control or
ownership of the Company. Mr. Madavi will have a one-year period
following his termination of service with the Company in which to
exercise those accelerated options. None of Mr. Madavi's current
options contain such provisions.
Mr. Madavi's severance agreement is to remain in effect
through December 31, 1999 and will automatically be renewed each
calendar year thereafter unless the Company gives written notice
of non-renewal at least one hundred eighty days prior to the
start of any such subsequent calendar year. Should Mr. Madavi
resign within six months after such non-renewal, the Company will
be obligated to negotiate a reasonable severance package with him
on the basis of the termination benefits provided similarly-
situated chief executive officers in the industry.
PROPOSAL NO. 2:
APPROVAL OF AMENDMENTS TO THE COMPANY'S 1993 STOCK INCENTIVE PLAN
All share numbers in this Proposal No. 2 which relate to the
size of the option grants made or to be made under the Automatic
Option Grant Program have been adjusted upward to take into
account the 3-for-2 split of the Company's common stock which the
Board authorized on March 4, 1997 and which is to become payable
in the form of a stock dividend payable on April 8, 1997 to
stockholders of record on March 18, 1997.
The Board of Directors is requesting stockholder approval of
a series of amendments to the Company's 1993 Stock Incentive Plan
(the "1993 Plan") that will effect the following changes: (i)
increase the number of shares of the Company's common stock
authorized for issuance under the 1993 Plan by an additional
500,000 shares (pre-split), (ii) reduce the number of shares of
common stock for which an option grant is to be made under the
Automatic Option Grant Program to each non-employee Board member
when he or she first joins the Board from 22,500 shares (post-
split) to 12,000 shares (post-split), (iii) amend the provisions
of the Automatic Option Grant Program so that each non-employee
Board member will become eligible to receive a series of annual
option grants, each for 4,000 shares (post-split) of common
stock, over his or her period of continued Board service, with
the first such annual grant for each individual serving as a non-
employee Board member on March 4, 1997 to be made on the date of
the Annual Stockholders Meeting held in the calendar year in
which the final installment of his or her initial 22,500-share
(post-split) option grant under the Automatic Option Grant
Program becomes vested, and with the first such annual grant for
each individual who first joins the Board after March 4, 1997 to
be made on the date of the Annual Stockholders Meeting held in
the calendar year in which the third annual installment of his or
her initial 12,000-share (post-split) option grant under the
Automatic Option Grant Program becomes vested, (iv) modify the
vesting acceleration provisions of the Automatic Option Grant
Program so that no options granted under that program after March
4, 1997 will vest on an accelerated basis upon the non-employee
Board member's death or permanent disability, (v) allow any
unvested shares issued under the 1993 Plan and subsequently
repurchased by the Company at the option exercise or direct issue
price paid per share to be reissued under the 1993 Plan, (vi)
remove certain restrictions on the eligibility of non-employee
Board members to serve on the plan administration committee and
(vii) effect a series of additional changes to the provisions of
the 1993 Plan (including the stockholder approval requirements)
in order to take advantage of the recent amendments to Rule 16b-3
of the Securities Exchange Act of 1934, as amended, which exempts
certain officer and director transactions under the 1993 Plan
from the short-swing liability provisions of the federal
securities laws.
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.
Structure of the 1993 Plan
The 1993 Plan contains three separate equity incentive
programs: (i) a Discretionary Option Grant Program, under which
key employees, non-employee Board members and consultants may be
granted options to purchase shares of the Company's common stock,
(ii) a Stock Issuance Program under which key employees, non-
employee Board members 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 a series of special option
grants over their period of continued Board service.
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
("Incentive Stock Options") or nonstatutory options
("Nonstatutory Options") not intended to satisfy such
requirements. All grants under the Automatic Option Grant
Program will be Nonstatutory Options.
Administration
The 1993 Plan is administered with respect to all executive
officers of the Company subject to the short-swing trading
restrictions of the federal securities laws by the Compensation
Committee of the Board comprised of two or more non-employee
Board members. With respect to all other participants, the 1993
Plan may be administered either by the Compensation Committee or
by a secondary committee comprised of one or more Board members
appointed by the Board. The Compensation Committee or the
secondary committee acting within the scope of its administrative
jurisdiction under the 1993 Plan will be referred to in this
summary as the Plan Administrator, and each Plan Administrator
will have full authority, within the scope of its administrative
jurisdiction, to determine the eligible individuals who are to
receive option grants and/or share issuances under the
Discretionary Option Grant and Stock Issuance Programs, the type
of option (Incentive 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 or the issued shares are to vest, and
the maximum term for which a granted 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
any Plan Administrator with respect to the grants made under that
program.
Eligibility
Key employees (including officers) of the Company or its
subsidiaries (whether now existing or subsequently established),
non-employee Board members and independent consultants are
eligible to participate in the Discretionary Option Grant and the
Stock Issuance Programs under the 1993 Plan. Non-employee Board
members are also eligible to participate in the Automatic Option
Grant Program. As of March 5, 1997, approximately 350 employees,
including 3 executive officers, and 5 non-employee Board members
were eligible to participate in the Discretionary Option Grant
and Stock Issuance Programs, and the 5 non-employee Board members
were also eligible to participate in the Automatic Option Grant
Program.
Share Reserve
None of the share figures in this "Share Reserve" section
have been adjusted upward to take into account the 3-for-2 split
of the Company's common stock which the Board authorized on March
4, 1997 and which is to become payable in the form of a stock
dividend payable on April 8, 1997 to stockholders of record on
March 18, 1997.
2,616,960 shares (pre-split) 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 (pre-split) of the Company's
common stock which remained available for issuance under the
Company's 1981 Stock Option Plan at the time of its incorporation
into the 1993 Plan, (ii) the additional 900,000 shares (pre-
split) approved by the stockholders in connection with the
implementation of the 1993 Plan, (iii) the additional 500,000-
share (pre-split) increase approved by the Company's stockholders
at the 1996 Annual Meeting, plus (iv) the additional 500,000-
share (pre-split) increase which is subject to stockholder
approval as part of 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 (pre-split) 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. In addition,
unvested shares issued under the 1993 Plan and subsequently
repurchased by the Company, at the original exercise or issue
price paid per share, pursuant to the Company's repurchase rights
under the 1993 Plan shall be added back to the number of shares
of common stock reserved for issuance and will accordingly be
available for reissuance through one or more subsequent option
grants or direct stock issuances under the 1993 Plan. However,
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.
As of March 5, 1997, options for 1,292,643 shares (pre-
split) of common stock were outstanding under the 1993 Plan
(including options incorporated from the 1981 Plan), and 375,473
shares (pre-split) were available for future option grants or
direct stock issuances. Assuming stockholder approval of the
500,000-share (pre-split) increase which forms part of this
Proposal, the total number of available shares for future option
grants or direct stock issuances will be 875,473 shares (pre-
split).
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 March 5, 1997, the fair market
value of the Company's common stock was $33.875 per share.
DISCRETIONARY OPTION GRANT PROGRAM
Price and Exercisability
The exercise 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 exercise 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 (10) 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 vested 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 vested options, then the outstanding vested 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 his or her
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 or vesting 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 those 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 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.
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. Incentive
Options may be exercised only by the optionee during his or her
lifetime and may not be assignable or transferable by the
optionee other than a transfer of the option by will or by the
laws of inheritance following the optionee's death. However,
Nonstatutory Options may, in connection with the optionee's
estate plan, be assigned in whole or in part during the
optionee's lifetime to one or more members of the optionee's
immediate family or to a trust established exclusively for one or
more such family members.
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 those shares,
including the right to vote such shares and receive all cash divi
dends paid on such shares, whether or not those 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 promissory notes payable 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 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 member who first joins the Board at any time after March 4,
1997 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 12,000 shares (post-split). In addition, each
non-employee Board member will automatically be granted an option
for 4,000 shares (post-split) at each Annual Stockholders
Meeting at which he or she continues to serve as a Board member,
with the first such annual grant for each individual serving as a
non-employee Board member on March 4, 1997 to be made on the date
of the Annual Stockholders Meeting held in the calendar year in
which the final installment of his or her initial 22,500-share
(post-split) automatic option grant becomes vested, and with
the first such annual grant for each individual who first joins
the Board after March 4, 1997 to be made on the date of the
Annual Stockholders Meeting held in the calendar year in which
the third annual installment of his or her initial 12,000-share
(post-split) automatic option grant becomes vested. Stockholder
approval of this Proposal will constitute pre-approval of each
option subsequently granted pursuant to the provisions of the
Automatic Option Grant Program as summarized below and the
subsequent exercise of that option in accordance with its terms.
Each option granted under the Automatic Option Grant Program
is subject to the following terms and conditions:
- 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 those shares. The
shares subject to each automatic option grant, whether
the initial grant or any annual 4,000-share (post-
split) grant, will vest in a series of five (5)
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 while in
Board service or within six months after his or her
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. Should the optionee cease
Board service by reason of permanent disability, then
he or she will have a twelve-month period in which to
exercise the option. In no event, however, may any
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 his or her 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 outstanding automatic option grant 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.
Stockholder approval of this Proposal will constitute
pre-approval of each option surrender right
subsequently granted under the Automatic Option Grant
Program and the subsequent exercise of that right in
accordance with the terms and provisions of the
Automatic Option Grant Program.
- 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.
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, 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
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 a Corporate Transaction in which
those options are assumed.
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 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 a 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 to newly-elected and continuing non-employee
Board members 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,
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 Plan Administrator.
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.
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, no amendment to the 1993 Plan may
adversely affect the rights of existing optionees without their
consent. In addition, certain amendments may require the
approval of the Company's stockholders pursuant to applicable
laws or regulations.
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, 1996 and ending March 5, 1997: (i) the
number of shares of the Company's common stock subject to options
granted under the 1993 Plan and (ii) the weighted average
exercise price payable per share. These share numbers and
exercise prices have not been adjusted to reflect the 3-for-2
split of the Company's common stock which will be effected on
April 8, 1997. No direct stock issuances have been made to date
under the 1993 Plan.
<TABLE>
<CAPTION>
OPTION TRANSACTIONS
Name Options Granted Weighted Average
Exercise (Number of Shares) Exercise Price of
Options Granted
================================================================
<S> <C> <C>
Thomas R. Brown,
Jr., Chairman of
the Board 0 $0
Syrus P. Madavi,
President & Chief
Executive Officer 0 $0
John L. Carter,
Former Executive
Vice President and
Chief Financial Officer 0 $0
J. Scott Blouin,
Chief Financial Officer 15,000 $25.50
All current executive
officers as a group
(4 persons) 15,000 $25.50
Thomas J. Troup 0 $0
Francis J. Aguilar 0 $0
John S. Anderegg, Jr. 0 $0
James A. Riggs 0 $0
Marcelo A. Gumucio 0 $0
All non-employee
directors as a group
(5 persons) 0 $0
All employees, including
current officers who are
not executive officers,
as a group 505,000 $21.25
</TABLE>
No option grants have been made to date on the basis of
amendments which are the subject of this Proposal.
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
shares 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.
- 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 on a fully-diluted basis. In
addition, the Company must disclose, in footnotes to the
Company's financial statements, the impact which the options
granted under the 1993 Plan would have upon the Company's
reported earnings had the value of those options at the time of
grant been 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 1997 Annual Meeting is required for approval of
the amendments to the 1993 Plan that are the subject of this
Proposal. If the stockholders do not approve such amendments,
then (i) the 500,000-share (pre-split) increase to the 1993 Plan
will not be implemented and no stock option grants or direct
stock issuances will be made on the basis of that proposed
increase, (ii) the annual 4,000-share (post-split) option grant
program will not be implemented under the Automatic Option Grant
Program for continuing non-employee Board members, (iii) non-
employee Board members will not become eligible to receive option
grants and direct stock issuances under the Discretionary Option
Grant and Stock Issuance Programs in effect under the 1993 Plan,
(iv) the unvested shares issued under the 1993 Plan, and
subsequently repurchased by the Company at the option exercise
price or direct issue price paid per share will continue to
reduce on a share-for-share basis the number of shares of Common
Stock reserved for issuance under the 1993 Plan and (v) certain
other changes to the provisions of the 1993 Plan (including the
stockholder approval requirements) in order to take advantage of
the recent Rule 16b-3 amendments will not be implemented.
The Board of Directors recommends a vote IN FAVOR OF the approval
of the amendments to the 1993 Stock Incentive Plan.
PROPOSAL NO. 3:
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, 1997.
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 LLP, 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 year ending December 31, 1997.
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
1998 must be received by no later than November 17, 1997 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, 1997
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 per
sonally 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 25,
1997, 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, John S. Anderegg,
Jr., 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 amendments to the Company's 1993 Stock Incentive
Plan.
FOR / / AGAINST / / ABSTAIN / /
3. Proposal to ratify the appointment of Ernst & Young LLP
as independent auditors of the Company for the year
ending December 31, 1997:
FOR / / AGAINST / / ABSTAIN / /
4. 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: _______________________, 1997
___________________________________
(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 rep
resentative 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.
BURR-BROWN CORPORATION
1993 STOCK INCENTIVE PLAN
(As Amended and Restated through March 4, 1997)
PREAMBLE
The BURR-BROWN CORPORATION previously adopted the Burr-
Brown Research Corporation Incentive Stock Plan of 1981 that was
amended and restated in 1983. That plan shall be referred to as
the "Original Plan." The Burr-Brown Corporation 1993 Stock
Incentive Plan ("Plan") shall serve as the successor to the
Original Plan and will become effective as provided in Section 7
of this Article One.
ARTICLE ONE
GENERAL
1. Definitions. As used herein, the following terms
have the meanings hereinafter set forth unless the context
clearly indicates to the contrary:
1.1 "Board" shall mean the Board of Directors of the
Company.
1.2 "Change in Control" shall mean a change in
ownership or control of the Company effected through either of
the following transactions:
1.2.1 any person or related group of
persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or
is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of
1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power
of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's
stockholders; or
1.2.2 there is a change in the
composition of the Board over a period of twenty-four
(24) consecutive months or less such that a majority of
the Board members (rounded up to the next whole number)
ceases, by reason of one or more proxy contests for the
election of Board members, to be comprised of
individuals who either (A) have been Board members
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.
1.3 "Code" shall mean the Internal Revenue Code of
1986.
1.4 "Committee" shall mean either the Primary
Committee or the Secondary Committee acting within the scope of
its administrative jurisdiction under the Plan, as determined
pursuant to Section 4 of Article One.
1.5 "Company" shall mean Burr-Brown Corporation, a
Delaware corporation.
1.6 "Corporate Transaction" shall mean any of the
following stockholder-approved transactions to which the Company
is a party:
1.6.1 a merger, consolidation or other
reorganization in which the Company is not the
surviving entity, except for a transaction the
principal purpose of which is to change the state in
which the Company is incorporated,
1.6.2 the sale, transfer or other
disposition of all or substantially all of the assets
of the Company in complete liquidation or dissolution
of the Company, or
1.6.3 any reverse merger in which the
Company is the surviving entity but in which securities
possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding
securities are transferred to a person or persons
different from those who held such securities
immediately prior to such merger.
1.7 "Fair Market Value" shall mean the closing selling
price per share of Stock on the date in question, as reported by
the National Association of Securities Dealers on the Nasdaq
National Market. If there is no such reported price on the date
in question, then the Fair Market Value shall be the closing
selling price on the last preceding date for which such quotation
exists.
1.8 "Hostile Take-Over" shall mean a change in
ownership of the Company in which any person or related group of
persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control
with, the Company) directly or indirectly acquires beneficial
ownership (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing more
than fifty percent (50%) of the total 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.
1.9 "Option" shall mean an option to purchase Stock
granted pursuant to the provisions of the Discretionary Option
Grant or Automatic Option Grant Program.
1.10 "Optionee" shall mean any person to whom an Option
is granted pursuant to the Discretionary Option Grant or
Automatic Option Grant Program.
1.11 "Original Plan" shall mean the Burr-Brown Research
Corporation Incentive Stock Plan of 1981, as amended and restated
in 1983.
1.12 "Participant" shall mean an employee or consultant
to whom Stock is issued pursuant to the provisions of the Stock
Issuance Program.
1.13 "Plan" shall mean the Burr-Brown Corporation 1993
Stock Incentive Plan, as amended from time to time.
1.14 "Service" shall mean the performance of services
on a periodic basis to the Company (or any Subsidiary
corporation) in the capacity of an employee, a non-employee
member of the board of directors or an independent consultant or
advisor, except to the extent otherwise specifically provided in
the applicable Option or Stock issuance agreement executed
pursuant to the provisions of the Plan.
1.15 "Stock" shall mean the Common Stock of the
Company.
1.16 "Subsidiary" or "Subsidiaries" shall mean any
corporation, the majority of the outstanding capital stock of
which is owned, directly or indirectly, by the Company.
1.17 "Take-Over Price" shall mean the greater of (a)
the Fair Market Value per share of Stock subject to an
outstanding Option on the date that Option is surrendered to the
Company in connection with a Hostile Take-Over or (b) the highest
reported price per share of such Stock paid by the tender offeror
in effecting such Hostile Take-Over. However, if the surrendered
Option is an incentive stock option under Federal tax laws, the
Take-Over Price shall not exceed the clause (a) price per share.
2. Purpose. This Plan is intended to benefit the
Company by (i) providing an incentive to and encouraging Stock
ownership by key employees (including officers), non-employee
members of the Board and consultants of the Company and its
Subsidiaries; (ii) providing such key employees, non-employee
Board members and consultants the opportunity to acquire a
proprietary interest or to increase their proprietary interest in
the Company's success; and (iii) encouraging such individuals to
remain in the Service of the Company or its Subsidiaries.
3. Structure of the Plan.
3.1 Stock Programs. The Plan shall be divided into
three (3) separate components:
- The Discretionary Option Grant Program, under
which eligible individuals may, at the discretion of
the Committee, be granted Options to purchase shares of
Stock in accordance with the provisions of Article Two.
- The Stock Issuance Program, under which
eligible individuals may be issued shares of Stock
directly, either through the immediate purchase of such
shares at a price not less than their Fair Market Value
at the time of issuance or as a bonus tied to the
performance of services or the Company's attainment of
financial objectives, without any cash payment required
of the recipient.
- The Automatic Option Grant Program, under
which each non-employee Board member shall
automatically receive special Option grants at periodic
intervals in accordance with the provisions of Article
Four.
3.2 General Provisions. Unless the context clearly
indicates otherwise, the provisions of Articles One and Five
shall apply to the Discretionary Option Grant, Stock Issuance and
Automatic Option Grant Programs and shall accordingly govern the
interests of all individuals under the Plan.
4. Administration.
4.1 The Discretionary Option Grant and Stock Issuance
Programs under the Plan shall, with respect to all individuals
subject to the short-swing profit restrictions of the Federal
securities laws, be administered by the Primary Committee. The
Primary Committee shall initially have the same membership as the
Board's Compensation Committee. Administration of the
Discretionary Option Grant and Stock Issuance Programs with
respect to all other persons eligible to participate in those
programs shall be vested in the Primary Committee. However, the
Board may, in its discretion, appoint a Secondary Committee of
the Board to exercise separate but concurrent jurisdiction with
respect to the participation of such persons in those programs.
4.2 Individuals serving on the Primary Committee or
any Secondary Committee shall serve for such term as the Board
may determine and shall be subject to removal by the Board at any
time. Each Committee shall, within the scope of its
administrative jurisdiction under the Plan, have full authority,
subject to the express provisions of the Plan, to administer the
Discretionary Option Grant and Stock Issuance Programs, including
authority to interpret and construe any provision of such
programs and to adopt such rules and regulations as it may deem
necessary or appropriate. Decisions of each Committee within the
scope of its administrative jurisdiction under the Plan shall be
final and binding on all parties who have an interest in the
Discretionary Option Grant or Stock Issuance Program or any
outstanding Option grant or Stock issuance hereunder. No member
of the Board and no member of the Primary Committee or any
Secondary Committee shall be liable for any action or
determination made in good faith with respect to the
Discretionary Option Grant or Stock Issuance Program under its
jurisdiction or any Option grant or Stock issuance under it.
5. Option Grants and Stock Issuances.
5.1 The persons eligible to participate in the
Discretionary Option Grant Program under Article Two and the
Stock Issuance Program under Article Three are as follows:
- officers and other key employees of the
Company (or its parent or subsidiary corporations,
whether now existing or subsequently established) who
render services which contribute to the management,
growth and financial success of the Company (or such
parent or subsidiary corporations);
- non-employee Board members; and,
- those consultants or other independent
contractors who provide valuable services to the
Company (or its parent or subsidiary corporations).
5.2 Non-employee Board members shall also be eligible
to participate in the Automatic Option Grant Program under
Article Four.
5.3 Both the Primary Committee and the Secondary
Committee shall each have full authority, within the scope of
their administrative jurisdiction under the Plan, to determine,
(i) with respect to the Option grants made under the
Discretionary Option Grant Program, which eligible individuals
are to receive Option grants, the number of shares to be covered
by each such grant, the status of the granted Option as either an
incentive stock option meeting the requirements of Code Sections
421 and 422 ("Incentive Option") or a nonstatutory option not
intended to meet such requirements ("Nonstatutory Option"), the
time or times at which each granted Option is to become
exercisable and the maximum term for which the Option may remain
outstanding; and (ii) with respect to Stock issuances under the
Stock Issuance Program, which eligible individuals are to be
selected for participation, the number of shares to be issued to
each selected individual, the vesting schedule (if any) to be
applicable to the issued shares and the consideration to be paid
for such shares.
6. Stock.
6.1 Stock Available. The Stock to be issued under
this Plan may be either authorized but unissued shares or shares
issued and thereafter reacquired by the Company. The aggregate
number of shares of Stock which may be issued pursuant to this
Plan shall not exceed at any time 2,616,960 shares,* subject to
adjustment from time to time as provided in paragraph 6.3 below.
Such authorized share reserve is comprised of (i) the number of
shares which remained available for issuance under the Original
Plan as of the Effective Date, including the shares of Stock
subject to the outstanding options under the Original Plan
incorporated into this Plan and any other shares which would have
been available for future option grant under the Original Plan
(estimated to be 716,960 shares in the aggregate), plus (ii) an
additional increase of 900,000 shares of Stock previously
authorized by the Board and approved by the Company's
stockholders prior to the Plan Effective Date, plus (iii) a
subsequent increase of 500,000 shares of Stock authorized by the
Board on February 16, 1996 and approved by the Company's
stockholders at the 1996 Annual Meeting held on April 26, 1996
plus (iv) an additional increase of 500,000 shares of Stock
authorized by the Board as of March 4, 1997, subject to
stockholder approval at the 1997 Annual Meeting. All issuances
of Stock under the Plan, including any shares of Stock issued
upon the exercise of options incorporated into the Plan from the
Original Plan, shall reduce on a one-for-one basis the number of
shares of Stock available for subsequent issuance under the Plan.
Should any Option or any portion thereof be terminated or
canceled for any reason without being exercised or surrendered in
accordance with Section 4 of Article Two or Section 3 of Article
Four, the shares subject to the portion of the Option not so
exercised or surrendered shall be available for subsequent Option
grants or Stock issuances under this Plan. In addition, unvested
shares issued under the Plan and subsequently repurchased by the
Company, at the original exercise or issue price paid per share,
pursuant to the Company's repurchase rights under the Plan shall
be added back to the number of shares of Common Stock reserved
for issuance under the Plan and shall accordingly be available
for reissuance through one or more subsequent option grants or
direct stock issuances under the Plan. However, shares subject
to an Option or portion thereof surrendered in accordance with
Section 4 of Article Two shall not be available for subsequent
Option grants or Stock issuances under the Plan. If the Option
price for any Options granted under the Plan is paid with shares
of Stock or if any shares of Stock otherwise issuable under the
Plan are withheld by the Company in satisfaction of the income
and employment tax liability incurred in connection with any
Optionee's or Participant's acquisition of Stock hereunder, then
the number of shares of Stock available for subsequent issuance
shall be reduced by the gross number of shares for which the
Option is exercised or in which the Participant vests, and not by
the net number of shares actually issued to the Optionee or the
Participant.
6.2 In no event may the aggregate number of shares of
Stock for which any one individual participating in the Plan may
be granted Options and direct Stock issuances exceed 900,000
shares in the aggregate over the term of the Plan. For purposes
of such limitation, no Option grants or direct Stock issuances
made prior to January 1, 1994 shall be taken into account.
6.3 Corporate Reorganization. In the event that any
change is made to the securities issuable under the Plan (whether
by reason of merger, consolidation, reorganization,
recapitalization, Stock dividend, Stock split, combination of
shares, exchange of shares or other change in capitalization)
then, subject to the provisions of Section 2 of Article Two,
Section 2 of Article Three and Section 3 of Article Four, the
Primary Committee may make appropriate adjustments in the maximum
number and/or kind of securities issuable under the Plan, the
maximum number and/or kind of securities for which Option grants
and direct Stock issuances may be made to any one participant in
the aggregate after December 31, 1993 and the number and/or kind
of securities for which automatic Option grants are to be
subsequently made to newly-elected and continuing non-employee
Board members under the Automatic Option Grant Program in order
to reflect the effect of such change upon the Company's capital
structure, and may make appropriate adjustments to the number
and/or kind of securities and Option price of the securities
subject to each outstanding Option to prevent the dilution of
benefits thereunder. The adjustments determined by the Primary
Committee shall be final, binding and conclusive.
6.4 Excess Grants and Issuances. Options to purchase
shares of Stock may be granted and shares of Stock may be issued
under the 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 under the Plan are
held in escrow until the Company's stockholders approve an
amendment sufficiently increasing the number of shares of Stock
available for issuance under the Plan. If such stockholder
approval is not obtained within twelve (12) months after the date
the initial excess issuances are made, whether as Option grants
or direct Stock issuances, then (I) any unexercised Options
representing such excess shall terminate and cease to be
exercisable and (II) the Company shall promptly refund to the
Optionees and Participants the Option or purchase price paid for
any excess shares issued under the Plan and held in escrow,
together with interest (at the applicable Short Term Federal
Rate) for the period the shares were held in escrow, and such
shares shall thereupon be automatically cancelled and cease to be
outstanding.
6.5 Restrictions. Shares issued under the
Discretionary Option Grant or Stock Issuance Program may be
subject to such restrictions on transfer, repurchase rights or
other restrictions as shall be determined by the Committee.
7. Effective Date and Term of Plan.
7.1 Effective Date. The Discretionary Option Grant
and Stock Issuance Programs under the Plan were adopted by the
Board on February 11, 1994, and the date of such adoption
accordingly constitutes the Effective Date for those two programs
and the Plan. The Automatic Option Grant Program under the Plan
was adopted by the Board on February 11, 1994 and became
effective upon approval by the stockholders at the 1994 Annual
Meeting held on April 22, 1994. The date of such stockholder
approval accordingly constitutes the Effective Date of the
Automatic Option Grant Program.
7.2 Amendment. The Plan was amended and restated by
the Board, effective February 16, 1996 (the "February 1996
Restatement") to increase the maximum number of shares of Stock
authorized for issuance over the term of the Plan by an
additional 500,000 shares to 2,116,959 shares. Stockholders
approved the February 1996 Restatement at the 1996 Annual Meeting
held on April 26, 1996. On March 4, 1997, the Board restated the
Plan to (i) increase the maximum number of shares of Stock
authorized for issuance over the term of the Plan by an
additional 500,000 share, (ii) reduce the number of shares of
Stock for which an Option grant is to be made under the Automatic
Option Grant Program to each non-employee Board member when he or
she first joins the Board from 15,000 shares to 8,000 shares,
(iii) amend the provisions of the Automatic Option Grant Program
so that each non-employee Board member shall become eligible to
receive a series of annual Option grants, each for 2,667 shares
of Stock, over his or her period of continued Board service, with
the first such annual grant for each individual serving as a non-
employee Board member on March 4, 1997 to be made on the date of
the Annual Stockholders Meeting held in the calendar year in
which the final installment of his or her initial 15,000-share
Option grant under the Automatic Option Grant Program becomes
vested, and with the first such annual grant for each individual
who first joins the Board after March 4, 1997 to be made on the
date of the Annual Stockholders Meeting held in the calendar year
in which the third annual installment of his or her initial 8,000-
share Option grant under the Automatic Option Grant Program
becomes vested, (iv) modify the vesting acceleration provisions
of the Automatic Option Grant Program so that no Options granted
under that program after March 4, 1997 shall vest on an
accelerated basis upon the Optionee's death or permanent
disability, (v) allow any unvested shares issued under the Plan
and subsequently repurchased by the Company at the option
exercise price or issue price paid per share to be reissued under
the Plan, (vi) remove certain restrictions on the eligibility of
non-employee Board members to serve on the Primary Committee and
(vii) effect a series of additional changes to the provisions of
the Plan (including the stockholder approval requirements) in
order to take advantage of the recent amendments to Rule 16b-3 of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act") which exempts certain officer and director transactions
under the Plan from the short-swing liability provisions of the
federal securities laws. The March 4, 1997 restatement is
subject to stockholder approval at the 1997 Annual Meeting and
shall not become effective unless such stockholder approval is
obtained. Should such stockholder approval not be obtained, the
Plan shall continue in full force and effect in accordance with
the terms and provisions in effect under the Plan immediately
prior to the March 4, 1997 restatement, and Option grants and
Stock issuances may continue to be made under the Plan until the
existing share reserve under the Plan is issued. All option
grants made under the Plan prior to the March 4, 1997 restatement
shall remain outstanding in accordance with the terms and
conditions of the respective instruments evidencing those
options, and nothing in the March 4, 1997 restatement shall be
deemed to modify or in any way affect those outstanding options.
7.3 Term of Plan. Unless sooner terminated in
accordance with Section 2 of Article Two, Section 2 of Article
Three, Section 3 of Article Four or by the Board, the Plan shall
terminate on the earlier of:
(i) the tenth (10th) anniversary of the
Effective Date of the Plan; or
(ii) the date on which all shares available
for issuance under the Plan shall have been issued or
their availability cancelled pursuant to the surrender
of Options granted hereunder.
If the date of termination is determined under (i)
above, then Options and unvested Stock issuances outstanding on
such date shall continue to have force and effect in accordance
with the provisions of the instruments evidencing such Options
and Stock issuances.
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
1. Terms and Conditions of Options. Options granted
pursuant to this Discretionary Option Grant Program shall be
authorized by the Committee and may be either Incentive Options
or Nonstatutory Options. The granted Options shall be evidenced
by instruments in such form and including such terms and
conditions as the Committee shall from time to time approve;
provided, however, that each such instrument shall comply with
the following terms and conditions:
1.1 Option Price.
1.1.1 The Option price per share shall be fixed
by the Committee, but in no event shall the Option price per
share be less than the Fair Market Value of a share of the option
Stock on the date of the Option grant.
1.1.2 Subject to the provisions of Section 1 of
Article Five, the Option price shall become immediately due and
payable upon exercise of the Option and shall be payable in one
of the alternative forms specified below:
1.1.2.1 Full payment in United States
dollars in cash or cash equivalents;
1.1.2.2 Full payment in shares of Stock
valued at Fair Market Value on the date the Option is exercised
and held for the requisite period necessary to avoid a charge to
the Company's earnings for financial reporting purposes;
1.1.2.3 A combination of shares of Stock
valued at Fair Market Value on the date the Option is exercised
and held for the requisite period necessary to avoid a charge to
the Company's earnings for financial reporting purposes, and cash
or cash equivalents, equal in the aggregate to the Option price;
1.1.2.4 Full payment through a broker-dealer
sale and remittance procedure pursuant to which the Optionee
(I) shall provide irrevocable instructions to a designated
brokerage firm to effect the immediate sale of the purchased
shares and remit to the Company, out of the sale proceeds
available on the settlement date, sufficient funds to cover the
aggregate Option price payable for the purchased shares plus all
applicable Federal, state and local income and employment taxes
required to be withheld by the Company in connection with such
purchase and (II) shall provide directives to the Company to
deliver the certificates for the purchased shares directly to
such brokerage firm in order to complete the sale transaction; or
1.1.2.5 Such other lawful consideration as
the Committee shall determine.
1.2 Manner of Exercise of Options. Each Option
granted under the Discretionary Option Grant Program shall be
exercisable at such time or times and during such period as shall
be determined by the Committee and set forth in the instrument
evidencing such Option. However, no Option may be exercised
after the expiration of ten (10) years from the date such Option
is granted. During the lifetime of the Optionee, Incentive
Options shall be exercisable only by the Optionee and shall not
be assignable or transferable by the Optionee other than a
transfer of the Option by will or by the laws of descent and
distribution following the Optionee's death. However,
Nonstatutory Options may, in connection with the Optionee's
estate plan, be assigned in whole or in part during the
Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be
exercised by the persons or persons who acquire a proprietary
interest in the option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in
effect for the option immediately prior to such assignment and
shall be set forth in such documents issued to the assignee as
the Committee may deem appropriate. Options may be exercised by
written notice to the Company in such terms as the Committee
shall specify.
1.3 Stockholder Rights. An Option holder shall have
none of the rights of a stockholder with respect to any shares
issuable under the Plan until such individual shall have been
issued a stock certificate for the shares.
1.4 Dollar Limitation. The aggregate Fair Market
Value (determined as of the respective date or dates of grant) of
the Stock for which one or more Options granted to any employee
under this Plan (or any other option plan of the Company or its
parent or Subsidiary corporations) may for the first time become
exercisable as incentive stock options under the Federal tax laws
during any one calendar year shall not exceed the sum of One
Hundred Thousand Dollars ($100,000). To the extent the employee
holds two (2) or more such Options which become exercisable for
the first time in the same calendar year, the foregoing
limitation on the exercisability of such Options as incentive
stock options under the Federal tax laws shall be applied on the
basis of the order in which such Options are granted. Should the
number of shares of Stock for which any Incentive Option first
becomes exercisable in any calendar year exceed the applicable
One Hundred Thousand Dollar ($100,000) limitation, then the
Option may nevertheless be exercised in that calendar year for
the excess number of shares as a nonstatutory option under the
Federal tax laws.
1.5 Termination of Service.
1.5.1 Except to the extent otherwise provided
in paragraph 1.5.4 below, the following provisions shall govern
the exercise period applicable to any outstanding Options under
this Discretionary Option Grant Program held by the Optionee at
the time of cessation of Service or death.
- Should the Optionee cease to remain in
Service for any reason other than death or permanent
disability, then the period during which each
outstanding Option held by such Optionee is to remain
exercisable shall be limited to the three (3)-month
period following the date of such cessation of Service.
However, the Committee shall have the discretion to
provide for a longer post-Service exercise period (not
to exceed the expiration date of the maximum Option
term) in the event the Optionee ceases Service by
reason of retirement at or after attainment of age
sixty-five (65).
- In the event such Service terminates by
reason of permanent disability (as defined in Code
Section 22(e)(3)) or should the Optionee die while
holding one or more outstanding Options, then the
period during which each such Option is to remain
exercisable shall be limited to the twelve (12)-month
period following the date of the Optionee's cessation
of Service or death. During the limited exercise
period following the Optionee's death, the Option may
be exercised by the personal representative of the
Optionee's estate or by the person or persons to whom
the Option is transferred pursuant to the Optionee's
will or in accordance with the laws of descent and
distribution.
- Under no circumstances, however, shall
any such Option be exercisable after the specified
expiration date of the Option term.
1.5.2 During the post-Service exercise period,
the Option may not be exercised for more than the number of
shares of Stock in which the Optionee is vested at the time of
cessation of Service. Upon the expiration of such post-Service
exercise period or (if earlier) upon the expiration of the Option
term, the Option shall terminate and cease to be outstanding for
any vested shares for which the Option has not been exercised.
However, each Option shall immediately terminate and cease to be
outstanding, at the time of the Optionee's cessation of Service,
with respect to any option shares for which such Option is not
otherwise at that time exercisable or in which the Optionee is
not otherwise at that time vested.
1.5.3 Should (i) the Optionee's Service be
terminated for misconduct (including, but not limited to, any act
of dishonesty, willful misconduct, fraud or embezzlement) or
(ii) the Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Company or its
Subsidiaries, then in any such event all outstanding Options held
by the Optionee under this Discretionary Option Grant Program
shall terminate immediately and cease to be outstanding.
1.5.4 The Committee shall have full power and
authority to extend the period of time for which the Option is to
remain exercisable following the Optionee's cessation of Service
or death from the limited post-Service exercise period specified
in the instrument evidencing such grant to such greater period of
time as the Committee shall deem appropriate under the
circumstances. In no event, however, shall such Option be
exercisable after the specified expiration date of the Option
term.
1.5.5 The Committee shall have complete
discretion, exercisable either at the time the Option is granted
or at any time the Option remains outstanding, to permit one or
more Options granted under this Discretionary Option Grant
Program to be exercised not only for the number of shares for
which each such Option is exercisable at the time of the
Optionee's cessation of Service but also for one or more
subsequent installments of purchasable shares for which the
Option would otherwise have become exercisable had such cessation
of Service not occurred.
2. Corporate Transactions/Changes in Control.
2.1 Option Acceleration. Each Option which is
outstanding under this Discretionary Option Grant Program at the
time of a Corporate Transaction shall automatically accelerate so
that each such Option shall, immediately prior to the specified
effective date for such Corporate Transaction, become fully
exercisable with respect to the total number of shares of Stock
at the time subject to such Option and may be exercised for all
or any portion of such shares. However, an outstanding Option
under this Discretionary Option Grant Program shall not so
accelerate if and to the extent: (i) such Option is, in
connection with the Corporate Transaction, either to be assumed
by the successor corporation or parent thereof or to be replaced
with a comparable option to purchase shares of the capital stock
of the successor corporation or parent thereof, (ii) such Option
is to be replaced with a cash incentive program of the successor
corporation which preserves the option spread existing at the
time of the Corporate Transaction and provides for subsequent
payout in accordance with the same vesting schedule applicable to
such Option, or (iii) the acceleration of such Option is subject
to other limitations imposed by the Committee at the time of the
Option grant. The determination of option comparability under
clause (i) above shall be made by the Committee and its
determination shall be final, binding and conclusive. The
Committee shall also have full power and authority to grant
Options under the Plan which are to automatically accelerate in
whole or in part upon the termination of the Optionee's Service
following a Corporate Transaction in which those Options are
assumed or replaced.
2.2 Termination of Options. Immediately following the
consummation of the Corporate Transaction, all outstanding
Options under this Discretionary Option Grant Program shall
terminate and cease to be outstanding, except to the extent
assumed by the successor corporation or its parent company.
2.3 Option Adjustments. Each outstanding Option under
this Discretionary Option Grant Program which is assumed in
connection with the Corporate Transaction or is otherwise to
continue in effect shall be appropriately adjusted, immediately
after such Corporate Transaction, to apply and pertain to the
number and kind of securities which would have been issued to the
Option holder, in consummation of such Corporate Transaction, had
such person exercised the Option immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be
made to the Option price payable per share, provided the
aggregate Option price payable for such securities shall remain
the same. In addition, the class and kind of securities
available for issuance under the Plan on both an aggregate and
per participant basis following the consummation of the Corporate
Transaction shall be appropriately adjusted.
2.4 Change in Control. The Committee shall have the
discretionary authority, exercisable either at the time the
Option is granted or at any time while the Option remains
outstanding, to provide for the automatic acceleration of one or
more outstanding Options under this Discretionary Option Grant
Program upon the occurrence of a Change in Control. The
Committee shall also have full power and authority to condition
any such Option acceleration upon the subsequent termination of
the Optionee's Service within a specified period following the
Change in Control.
2.5 Option Continuation. Any Options accelerated in
connection with the Change in Control shall remain fully
exercisable until the expiration or sooner termination of the
Option term or the surrender of such Option in accordance with
Section 4 of this Article Two.
2.6 ISO Limitation. The exercisability as incentive
stock options under the Federal tax laws of any Options
accelerated under this Section 2 in connection with a Corporate
Transaction or Change in Control shall remain subject to the
dollar limitation of paragraph 1.4 of this Article Two.
2.7 Right to Modify Corporate Structure. The grant of
Options under this Plan shall in no way effect the right of the
Company to adjust, reclassify, reorganize, or otherwise change
its capital or business structure or to merge, consolidate,
dissolve, liquidate, sell or transfer all or any part of its
business or assets.
3. Cancellation and New Grant of Options. The
Committee shall have the authority to effect, at any time and
from time to time, with the consent of the affected Option
holders, the cancellation of any or all outstanding Options under
this Discretionary Option Grant Program and to grant in
substitution therefor new Options under the Plan covering the
same or different number and kind of shares of Stock but having
an Option price per share not less than the Fair Market Value of
the option Stock on the new grant date.
4. Surrender of Options for Cash or Stock.
4.1 Surrender Right. One or more Optionees may be
granted the right, exercisable upon such terms and conditions as
the Committee may establish, to surrender all or part of an
unexercised Option under this Discretionary Option Grant Program
in exchange for a distribution from the Company in an amount
equal to the excess of (i) the Fair Market Value (on the Option
surrender date) of the number of shares in which the Optionee is
at the time vested under the surrendered Option (or surrendered
portion thereof) over (ii) the aggregate Option price payable for
such vested shares.
4.2 Approval. No such Option surrender shall be
effective unless it is approved by the Committee. If the
surrender is so approved, then the distribution to which the
Optionee shall accordingly become entitled under this Section 4
may be made in shares of Stock valued at Fair Market Value on the
Option surrender date, in cash or partly in shares and partly in
cash, as the Committee shall in its sole discretion deem
appropriate.
4.3 Limited Rights. One or more officers of the
Company subject to the short-swing profit restrictions of the
Federal securities laws may, in the Primary Committee's sole
discretion, be granted limited stock appreciation rights in
tandem with their outstanding Options under this Discretionary
Option Grant Program. Upon the occurrence of a Hostile Take-
Over, each such officer holding one or more Options with such a
limited stock appreciation right shall have the unconditional
right (exercisable for a thirty (30)-day period following such
Hostile Take-Over) to surrender each such Option to the Company,
to the extent the Option is at the time exercisable for vested
shares of Stock. In return for the surrendered Option, the
officer shall be entitled to a cash distribution from the Company
in an amount equal to the excess of (i) the Take-Over Price of
the shares of Stock which are at the time vested under each
surrendered Option (or surrendered portion) over (ii) the
aggregate Option price payable for such vested shares. Such cash
distribution shall be paid within five (5) days following the
Option surrender date. The Primary Committee shall pre-approve,
at the time the limited right is granted, the subsequent exercise
of that right in accordance with the terms of the grant and
provisions of this paragraph 4.3 of Article Two. No additional
approval of the Primary Committee or the Board shall be required
at the time of the actual Option surrender and cash distribution.
The balance of the Option (if any) shall continue in full force
and effect in accordance with the instrument evidencing such
grant.
ARTICLE THREE
STOCK ISSUANCE PROGRAM
1. Terms and Conditions of Direct Stock Issuances.
Stock may be issued under this Stock Issuance Program, either
through direct and immediate purchases without any intervening
Option grants or as unvested shares issued upon the exercise of
immediately exercisable Options granted under Article Two. The
issued shares shall be evidenced by a Stock Issuance Agreement
("Issuance Agreement") that complies with the following terms and
conditions:
1.1 Consideration.
1.1.1 Stock drawn from the Company's
authorized but unissued shares of Stock ("Newly Issued Shares")
shall be issued for one or more of the following items of
consideration which the Committee may deem appropriate in each
individual instance:
(i) cash or cash equivalents (such as a
personal check or bank draft) paid the Company;
(ii) a promissory note payable to the
Company's order in one or more installments, which may
be subject to cancellation in whole or in part upon
terms and conditions established by the Committee; or
(iii) past services rendered to the
Company or any Subsidiary.
1.1.2 Newly Issued Shares must be issued for
consideration with a value not less than one-hundred percent
(100%) of the Fair Market Value of such shares at the time of
issuance.
1.1.3 Shares of Stock reacquired by the
Company and held as treasury shares ("Treasury Shares") may be
issued for such consideration (including one or more of the items
of consideration specified in paragraph 1.1.1. of this Article
Three) as the Committee may deem appropriate. Treasury Shares
may, in lieu of any cash consideration, be issued subject to such
vesting requirements tied to the Participant's period of future
Service or the Company's attainment of specified performance
objectives as the Committee may establish at the time of
issuance.
1.2 Vesting Provisions.
1.2.1 The issued Stock may, in the absolute
discretion of the Committee, be fully and immediately vested upon
issuance or may vest in one or more installments over the
Participant's period of Service. The elements of the vesting
schedule applicable to any unvested shares of Stock, namely:
(i) the Service period to be completed by
the Participant or the performance objectives to be
achieved by the Company,
(ii) the number of installments in which the
shares are to vest,
(iii) the interval or intervals (if any) which
are to lapse between installments, and
(iv) the effect which death, disability or
other event designated by the Committee is to have upon
the vesting schedule,
shall be determined by the Committee and incorporated into the
Issuance Agreement executed by the Company and the Participant at
the time such unvested shares are issued.
1.3 Stockholder Rights. The Participant shall have
full stockholder rights with respect to any shares of Stock
issued to him or her under this Stock Issuance Program, whether
or not his or her interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such
shares and to receive any regular cash dividends paid on such
shares. Any new, additional or different shares of Stock or
other property (including money paid other than as a regular cash
dividend) which the Participant may have the right to receive
with respect to his or her unvested shares by reason of any Stock
dividend, Stock split, reclassification of Stock or other similar
change in the Company's capital structure or by reason of any
Corporate Transaction shall be issued, subject to (i) the same
vesting requirements applicable to his or her unvested shares and
(ii) such escrow arrangements as the Committee shall deem
appropriate.
1.4 Termination of Service.
1.4.1 Should the Participant cease to remain
in Service while holding one or more unvested shares of Stock,
then those shares shall be immediately surrendered to the Company
for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent
the surrendered shares were previously issued to the Participant
for consideration paid in cash or cash equivalent (including the
Participant's purchase-money promissory note), the Company shall
repay to the Participant the cash consideration paid for the
surrendered shares and shall cancel the unpaid principal balance
of any outstanding purchase-money note of the Participant
attributable to such surrendered shares. The surrendered shares
may, at the Committee's discretion, be retained by the Company as
Treasury Shares or may be retired to authorized but unissued
share status.
1.4.2 The Committee may in its discretion
elect to waive the surrender and cancellation of one or more
unvested shares of Stock (or other assets attributable thereto)
which would otherwise occur upon the non-completion of the
vesting schedule applicable to such shares. Such waiver shall
result in the immediate vesting of the Participant's interest in
the shares of Stock as to which the waiver applies. Such waiver
may be effected at any time, whether before or after the
Participant's cessation of Service or the attainment or non-
attainment of the applicable performance objectives.
2. Corporate Transactions/Changes in Control.
2.1 All unvested shares of Stock outstanding under
this Stock Issuance Program shall immediately vest in full upon
the occurrence of a Corporate Transaction, except to the extent
the Committee imposes limitations in the Issuance Agreement which
preclude such accelerated vesting in whole or in part.
2.2 The Committee shall have the discretionary
authority, exercisable either at the time the unvested shares are
issued or at any time while those shares remain outstanding, to
provide for the immediate and automatic vesting of one or more
unvested shares of Stock outstanding under this Stock Issuance
Program at the time of a Change in Control. The Committee shall
also have full power and authority to condition any such
accelerated vesting upon the subsequent termination of the
Participant's Service within a specified period following the
Change in Control.
3. Transfer Restrictions/Share Escrow.
3.1 Unvested shares may, in the Committee's
discretion, be held in escrow by the Company until the
Participant's interest in such shares vests or may be issued
directly to the Participant with restrictive legends on the
certificates evidencing such unvested shares.
3.2 The Participant shall have no right to transfer
any unvested shares of Stock issued to him or her under this
Stock Issuance Program. For purposes of this restriction, the
term "transfer" shall include (without limitation) any sale,
pledge, assignment, encumbrance, gift or other disposition of
such shares, whether voluntary or involuntary. Upon any such
attempted transfer, the unvested shares shall immediately be
cancelled, and neither the Participant nor the proposed
transferee shall have any rights with respect to those shares.
However, the Participant shall have the right to make a gift of
unvested shares acquired under this Stock Issuance Program to his
or her spouse or issue, including adopted children, or to a trust
established for such spouse or issue, provided the donee of such
shares delivers to the Company a written agreement to be bound by
all the provisions of the Plan and the Issuance Agreement
applicable to the gifted shares.
ARTICLE FOUR
AUTOMATIC OPTION GRANT PROGRAM
1. Eligibility.
1.1 Eligible Optionees. The individuals eligible to
receive automatic Option grants pursuant to the provisions of
this Article Four shall be limited to (i) those individuals who
were serving as non-employee Board members on the date of the
1994 Annual Stockholders Meeting, (ii) those individuals who are
first elected or appointed as non-employee Board members on or
after the date of such Annual Meeting, whether through
appointment by the Board or election by the Company's
stockholders, and (iii) those non-employee Board members who
continue to serve on the Board at one or more Annual Stockholders
Meetings beginning with the 1997 Annual Meeting. Any non-
employee Board member eligible to participate in the Automatic
Option Grant Program pursuant to the foregoing criteria shall be
designated an Eligible Director for purposes of this Article
Four.
2. Terms and Conditions of Automatic Option Grants.
2.1 Grant Dates. Option grants shall be made under
this Article Four on the dates specified below:
2.1.1 Each individual who was serving as an
Eligible Director on the date of the 1994 Annual Stockholders
Meeting was automatically granted, on such date, a Nonstatutory
Option to purchase 15,000 shares of Stock upon the terms and
conditions of this Article Four.
2.1.2 Each individual who first became an
Eligible Director on or after the date of the 1994 Annual Meeting
and before March 4, 1997, whether through election by the
Company's stockholders or appointment by the Board, was
automatically granted, at the time of such initial election or
appointment, a Nonstatutory Option to purchase 15,000 shares of
Stock upon the terms and conditions of this Article Four.
2.1.3 Each individual who first becomes an
Eligible Director on or after March 4, 1997, whether through
election by the Company's stockholders or appointment by the
Board, shall automatically be granted, at the time of such
initial election or appointment, a Nonstatutory Option to
purchase 8,000 shares of Stock* upon the terms and conditions of
this Article Four.
2.1.4 An Eligible Director serving as a non-
employee Board member on March 4, 1997 shall, at each Annual
Stockholders Meeting at which he or she is to continue to serve
as a non-employee Board member, beginning with the Annual
Stockholders Meeting held in the calendar year in which the last
installment of the shares of Stock subject to his or her initial
15,000-share automatic Option grant under paragraph 2.1.1 or
2.1.2 vests, automatically be granted a Non-Statutory Option to
purchase an additional 2,667 shares of Stock.**
2.1.5 An Eligible Director who first joins the
Board as a non-employee Board member at any time after March 4,
1997 shall, at each Annual Stockholders Meeting at which he or
she is to continue to serve as a non-employee Board member,
beginning with the Annual Stockholders Meeting held in the
calendar year in which the third installment of the shares of
Stock subject to his or her initial 8,000-share automatic Option
grant under paragraph 2.1.3 vests, automatically be granted a Non-
Statutory Option to purchase an additional 2,667 shares of
Stock.**
2.1.6 There shall be no limit on the number of
such 2,667-share** Option grants which any one Eligible Director
may receive over his or her period of continued Board service.
2.2 Adjustments. The number of shares for which the
automatic Option grants are to be made to Eligible Directors
shall be subject to periodic adjustment pursuant to the
applicable provisions of paragraph 6.3 of Article One.
2.3 Option Price. The Option price per share of Stock
of each automatic Option grant made under this Article Four shall
be equal to one hundred percent (100%) of the Fair Market Value
per share of Stock on the automatic grant date.
2.4 Option Term. Each automatic Option grant under
this Article Four shall have a maximum term of ten (10) years
measured from the automatic grant date.
2.5 Exercisability/Vesting. Each automatic Option
grant shall be immediately exercisable for any or all of the
option shares. However, any shares purchased under the Option
shall be subject to repurchase by the Company, at the Option
price paid per share, upon the Optionee's cessation of Board
service prior to vesting in those shares in accordance with the
schedule below:
2.5.1 Each initial automatic Option grant made
pursuant to paragraph 2.1.1, 2.1.2 or 2.1.3 of this Article Four
shall vest, and the Company's repurchase right shall lapse, in a
series of five (5) successive equal annual installments over the
Optionee's period of continued Service as a Board member, with
the first such installment to vest upon Optionee's completion of
one (1) year of Board service measured from the automatic grant
date.
2.5.2 Each annual Automatic Option grant made
pursuant to paragraph 2.1.4 or 2.1.5 of Article Four shall vest,
and the Company's repurchase right shall lapse, in a series of
five (5) successive equal annual installments over the Optionee's
period of continued Service as a Board member, with the first
such installment to vest upon Optionee's completion of one (1)
year of Board service measured from the automatic grant date.
2.5.3 Vesting of the option shares granted
under this Article Four shall be subject to the acceleration
provisions of Section 3 of this Article Four. No Option grant
made under this Automatic Option Grant Program on or after March
4, 1997 shall vest on an accelerated basis upon the Optionee's
cessation of Board service by reason of death or permanent
disability. Accordingly, no additional option shares shall vest
after the Optionee's cessation of Board service.
2.6 Payment. The Option price shall be payable in one
of the alternative forms specified in paragraph 1.1.2 of Article
Two. To the extent the Option is exercised for any unvested
shares, the Optionee must execute and deliver to the Company a
Stock issuance agreement for those unvested shares which provides
the Company with the right to repurchase, at the Option price
paid per share, any unvested shares held by the Optionee at the
time of cessation of Board service and which precludes the sale,
transfer or other disposition of any shares purchased under the
Option, to the extent those shares are subject to the Company's
repurchase right.
2.7 Limited Transferability. An automatic Option
grant may, in connection with the Optionee's estate plan, be
assigned in whole or in part during the Optionee's lifetime to
one or more members of the Optionee's immediate family or to a
trust established exclusively for one or more such family
members. The assigned portion may only be exercised by the
persons or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the
option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Committee
may deem appropriate.
2.8 Termination of Board Service.
2.8.1 Should the Optionee cease service as a
Board member for any reason other than death or permanent
disability, while holding any automatic Option grant under this
Article Four, then such individual shall have a six (6)-month
period following the date of such cessation of Board service in
which to exercise that Option for any or all of the option shares
in which the Optionee is vested at the time of such cessation of
Board service.
2.8.2 Should the Optionee die while in Board
service or within six (6) months after cessation of Board
service, then any automatic Option grant held by the Optionee at
the time of death may subsequently be exercised, for any or all
of the option shares in which the Optionee is vested at the time
of his or her cessation of Board service (less any option shares
subsequently purchased by the Optionee prior to death), by the
personal representative of the Optionee's estate or by the person
or persons to whom the Option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and
distribution. The right to exercise each such Option shall lapse
upon the expiration of the twelve (12)-month period measured from
the date of the Optionee's death.
2.8.3 Should the Optionee become permanently
disabled (as defined in Code Section 22(e)(3)) and cease to serve
as a Board member by reason of such disability, then the Optionee
shall have a twelve (12)-month period following such cessation of
Board service in which to exercise his or her outstanding
automatic Option grants for any or all of the option shares in
which the Optionee is vested at the time of his or her cessation
of Board service.
2.8.4 Upon the Optionee's cessation of Board
service for any reason, his or her outstanding automatic Option
grants shall immediately terminate and cease to remain
outstanding with respect to any option shares in which the
Optionee is not otherwise at that time vested under those
Options.
2.8.5 In no event shall any automatic Option
grant under this Article Four remain exercisable after the
expiration date of the ten (10)-year Option term. Upon the
expiration of the applicable post-Service exercise period under
paragraphs 2.8.1 through 2.8.3 above or (if earlier) upon the
expiration of the ten (10)-year Option term, the automatic Option
grant shall terminate and cease to remain outstanding for any
option shares in which the Optionee was vested at the time of his
or her cessation of Board Service but for which such Option was
not otherwise exercised.
2.9 Stockholder Rights. The holder of an automatic
Option grant under this Article Four shall have none of the
rights of a stockholder with respect to any shares subject to
that Option until such individual shall have exercised the Option
and paid the Option price for the purchased shares.
2.10 Remaining Terms. The remaining terms and
conditions of each automatic Option grant shall be as set forth
in the form Automatic Stock Option Agreement attached as Exhibit
A to the Plan.
3. Corporate Transactions/Changes in Control/Hostile
Take-Overs.
3.1 In the event of any Corporate Transaction, the
shares of Stock at the time subject to each outstanding Option
under this Article Four but not otherwise vested shall
automatically vest in full, and the Company's repurchase right
with respect to those shares shall terminate, so that each such
Option shall, immediately prior to the specified effective date
for the Corporate Transaction, become fully exercisable for all
of the shares of Stock at the time subject to that Option and may
be exercised for all or any portion of such shares as fully
vested shares of Stock. Immediately following the consummation
of the Corporate Transaction, all automatic Option grants under
this Article Four shall terminate and cease to remain
outstanding.
3.2 In connection with any Change in Control, the
shares of Stock at the time subject to each outstanding Option
under this Article Four but not otherwise vested shall
automatically vest in full, and the Company's repurchase right
with respect to those shares shall terminate, so that each such
Option shall, immediately prior to the occurrence of such Change
in Control, become fully exercisable for all of the shares of
Stock at the time subject to that Option and may be exercised for
all or any portion of such shares as fully vested shares of
Stock. Each such Option shall remain so exercisable until the
expiration or sooner termination of the Option term.
3.3 Upon the occurrence of a Hostile Take-Over, the
Optionee shall have a thirty (30)-day period in which to
surrender to the Company any Option granted to him or her under
this Article Four. The Optionee shall in return be entitled to a
cash distribution from the Company in an amount equal to the
excess of (i) the Take-Over Price of the shares of Stock at the
time subject to the surrendered Option (whether or not the
Optionee is otherwise at the time vested in those shares) over
(ii) the aggregate Option price payable for such shares. Such
cash distribution shall be paid within five (5) days following
the surrender of the Option to the Company. Stockholder approval
of the March 4, 1997 restatement of the Plan shall constitute pre-
approval of each option surrender right subsequently granted
under the Automatic Option Grant Program and the subsequent
exercise of that right in accordance with the terms and
provisions of this paragraph 3.3 of Article Three. No additional
approval of the Committee or the Board shall be required in
connection with such Option surrender and cash distribution. The
shares of Stock subject to each Option surrendered in connection
with the Hostile Take-Over shall not be available for subsequent
issuance under the Plan.
3.4 The automatic Option grants outstanding under this
Article Four shall in no way 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.
ARTICLE FIVE
MISCELLANEOUS
1. Installment Payments, Loans and Guarantees of
Loans.
1.1 The Committee may, in its discretion, assist any
Optionee or Participant (other than an Optionee or Participant
who is a non-employee member of the Board) in the exercise of one
or more Options granted to such Optionee or the purchase of one
or more shares of Stock issued to such Participant under the
Plan, including the satisfaction of any Federal, state and local
income and employment tax obligations arising therefrom, by
(i) authorizing the extension of a loan from the Company to such
Optionee or Participant, (ii) permitting the Optionee or
Participant to pay the Option price or purchase price for the
purchased Stock in installments over a period of years or
(iii) authorizing a guarantee by the Company of a third-party
loan to the Optionee or Participant. The terms of any loan,
installment method of payment or guarantee (including the
interest rate and terms of repayment) shall be upon such terms as
the Committee specifies in the applicable Option or Issuance
Agreement or otherwise deems appropriate under the circumstances.
Loans, installment payments and guarantees may be granted with or
without security or collateral. However, the maximum credit
available to the Optionee or Participant may not exceed the
Option or purchase price of the acquired shares (less the par
value of such shares) plus any Federal, state and local income
and employment tax liability incurred by the Optionee or
Participant in connection with the acquisition of such shares.
1.2 The Committee may, in its absolute discretion,
determine that one or more loans extended under this financial
assistance program shall be subject to forgiveness by the Company
in whole or in part upon such terms and conditions as the
Committee may deem appropriate.
2. Amendment of the Plan. The Board shall have
complete and exclusive power and authority to amend or modify the
Plan, and the Committee may amend or modify the terms of any
outstanding Options or unvested Stock issuances under the Plan in
any or all aspects whatsoever not inconsistent with the terms of
the Plan. However, no such amendment or modification shall
adversely affect rights and obligations with respect to Options
at the time outstanding under the Plan, nor adversely affect the
rights of any Participant with respect to Stock issued under the
Plan prior to such action, unless the Optionee or Participant
consents to such amendment. In addition, certain amendments may
require stockholder approval pursuant to applicable laws or
regulations.
3. Use of Proceeds. Any cash proceeds received by
the Company from the sale of shares pursuant to Option grants or
direct Stock issuances under the Plan shall be used for general
corporate business.
4. Withholding.
4.1 The Company's obligation to deliver shares of
Stock upon the exercise of Options for such shares or upon the
direct issuance or vesting of such shares under the Plan shall be
subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
4.2 The Committee may, in its discretion and in
accordance with the provisions of this Section 4 and such
supplemental rules as the Committee may from time to time adopt
(including applicable safe-harbor provisions of SEC Rule 16b-3),
provide any or all holders of Nonstatutory Options (other than
the automatic Option grants made pursuant to Article Four of the
Plan) or unvested shares under the Stock Issuance Program with
the right to use shares of Stock in satisfaction of all or part
of the Federal, state and local income and employment tax
liabilities incurred by such holders in connection with the
exercise of their Options or the vesting of their shares (the
"Taxes"). Such right may be provided to any such holder in
either or both of the following formats:
4.2.1 Stock Withholding. The holder of the
Nonstatutory Option or unvested shares may be provided with the
election to have the Company withhold, from the shares of Stock
otherwise issuable upon the exercise of such Nonstatutory Option
or the vesting of such shares, a portion of those shares with an
aggregate Fair Market Value equal to the percentage of the
applicable Taxes (not to exceed one hundred percent (100%))
designated by the holder.
4.2.2 Stock Delivery. The Committee may, in
its discretion, provide the holder of the Nonstatutory Option or
the unvested shares with the election to deliver to the Company,
at the time the Nonstatutory Option is exercised or the shares
vest, one or more shares of Stock already held by such individual
with an aggregate Fair Market Value equal to the percentage of
the Taxes incurred in connection with such Option exercise or
share vesting (not to exceed one hundred percent (100%))
designated by the holder.
5. Regulatory Approvals. The implementation of the
Plan, the granting of any Option hereunder and the issuance of
Stock upon the exercise or surrender of any such Option or as a
direct issuance under the Plan shall be subject to the Company's
procurement of all approvals and permits required by regulatory
authorities having jurisdiction over the Plan, the Options
granted under it and the Stock issued pursuant to it.
6. No Employment Rights. Nothing in the Plan shall
confer upon the Optionee or the Participant any right to continue
in the Service of the Company (or any Subsidiary employing or
retaining such Optionee or Participant) for any period of
specific duration or interfere with or otherwise restrict in any
way the rights of the Company (or any such Subsidiary) or of the
Optionee or the Participant, which rights are hereby expressly
reserved by each, to terminate the Service of the Optionee or
Participant at any time for any reason whatsoever, with or
without cause.
7. Certain Outstanding Options.
7.1 Each Option granted under the Company's Original
Plan or the 1980 Burr-Brown Research Corporation Executive Stock
Plan which was outstanding on the Effective Date of this Plan was
incorporated into this Plan and treated as an outstanding Option
under this Plan, but each such Option continues to be governed
solely by the terms and conditions of the instrument evidencing
such grant, and nothing in this Plan shall be deemed to affect or
otherwise modify the rights or obligations of the holders of such
Options with respect to their acquisition of shares of Stock
thereunder.
7.2 One or more provisions of this Plan, including the
Option/vesting acceleration provisions applicable in the event of
a Corporate Transaction or Change in Control or the limited
surrender rights exercisable in the event of a Hostile Take-Over,
may, in the Committee's discretion, be extended to one or more
Options which were outstanding under the Company's Original Plan
or the 1980 Burr-Brown Research Corporation Executive Stock Plan
on the Effective Date of this Plan but which do not otherwise
provide for such benefits.
IN WITNESS WHEREOF, this March 4, 1997 Restatement of
the BURR-BROWN CORPORATION 1993 STOCK INCENTIVE PLAN is hereby
declared effective and is executed as of March 4, 1997 on behalf
of the Company by its hereunto duly authorized officer.
BURR-BROWN CORPORATION
By:
Title:
_______________________________
* All share figures in this March 4, 1997 restatement reflect
the 3-for-2 split of the Stock effected in May, 1995.
* This number will be increased to 12,000 shares of Stock
when the 3-for-2 split of the Stock authorized by the Board on
March 4, 1997 becomes effective.
** This number will be increased to 4,000 shares of Stock
when the 3-for-2 split of the Stock authorized by the Board on
March 4, 1997 becomes effective.
** This number will be increased to 4,000 shares of Stock
when the 3-for-2 split of the Stock authorized by the Board on
March 4, 1997 becomes effective.
** The number of shares of Stock will be increased to 4,000
shares when the 3-for-2 split of the Stock authorized by the
Board on March 4, 1997 becomes effective.
