<PAGE>1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
Burr-Brown Corporation
Name of the Registrant as Specified In Its Charter
Burr-Brown Corporation
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE> 2
BURR-BROWN CORPORATION
6730 South Tucson Boulevard
Tucson, Arizona 85706
NOTICE AND PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 23, 1999 AT 9:00 AM
You are hereby notified that the 1999 Annual Meeting of Stockholders of Burr-
Brown Corporation (the "Company") will be held April 23, 1999, 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 five members to the Board of Directors to serve until the next
annual meeting of shareholders and until their successors are elected;
2. To ratify the selection of Ernst & Young LLP to serve as independent
auditors for the Company for the year ending December 31, 1999; and
3. To transact such other business as may properly come before the meeting.
Only stockholders of record on the books of the Company at the close of
business on March 1, 1999 will be entitled to vote at the meeting. Whether or
not you expect to attend the meeting personally, please be sure to date, sign,
and return the enclosed proxy in the stamped envelope provided.
A copy of the Company's 1998 Annual Report to Stockholders is enclosed.
Management cordially invites you to attend the Annual Meeting.
By Order of the Board of Directors,
Bradley S. Paulson
Secretary & General Counsel
Tucson, Arizona
March 10, 1999
IMPORTANT
A Proxy Statement and Proxy Card are submitted herewith. 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. ALL STOCKHOLDERS
ARE URGED TO COMPLETE AND MAIL THE PROXY PROMPTLY WHETHER OR NOT THEY PLAN TO
ATTEND THE MEETING IN PERSON. IT IS IMPORTANT THAT YOUR SHARES BE VOTED.
<PAGE> 3
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 23, 1999 (the "Annual
Meeting"), 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 10, 1999.
VOTING RIGHTS
The close of business on March 1, 1999 was the record date for stockholders
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof. As of March 1, 1999, the Company had 36,702,364 shares of its common
stock outstanding and entitled to vote at the Annual Meeting. Each holder of
shares of common stock is entitled to one vote for each share of common stock
held on the record date on each of the proposals presented in this Proxy
Statement. There is no cumulative voting in the election of directors.
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, "FOR" proposal 2 and in the proxy holder's discretion for any
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.
<PAGE> 4
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of March 1, 1999, with
the exception of information regarding J.W. Seligman & Co., Inc., T. Rowe Price
& Associates, Massachusetts Financial Services, and Warburg, Pincus Asset
Management, Inc., which are stated as of December 31, 1998, 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
Name of Beneficial Owner Shares Class
<S> <C> <C>
Thomas R. Brown, Jr. (2) 10,862,154(3) 29
Director and Chairman
Emeritus
Francis J. Aguilar, (2) 37,125(4) *
Director
John S. Anderegg, Jr. (2) 153,348(4) *
Director
Marcelo A. Gumucio (2) 45,850(5) *
Director
Syrus P. Madavi (2) 497,956(6) 1
Chairman, President,
CEO & Director
Kenneth G. Wolf (2) 55,651(7) *
Executive Vice President
J. Scott Blouin (2) 33,150(8) *
CFO
Bryan Rooney (2) 49,062(9) *
Vice President, Sales
All Current Directors 11,734,296(10) 32
and Current Executive
Officers as a Group
(8 persons)
J.W. Seligman & Co.,Inc. 3,814,092(11) 10
Mr. William C. Morris
100 Park Avenue
New York, NY 10017
T. Rowe Price & Associates 3,200,700(12) 9
100 East Pratt Street
Baltimore, MD 21202
Massachusetts Financial l2,299,159 6
Services
500 Boylston St., 15th Floor
Boston, MA 02116
Warburg, Pincus Asset 2,065,274 6
Management, Inc.
466 Lexington Avenue
New York, NY 10017
</TABLE>
* less than one (1%) percent of the outstanding common stock.
<PAGE> 5
(1) Percentage of beneficial ownership is calculated assuming 36,702,364
shares of common stock were outstanding on March 1, 1999. 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 1, 1999, including but not limited to the exercise of an option;
however, such common stock is not 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(d)(1)(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 indicated as owned by them, subject to applicable community
property laws.
(2) Unless otherwise indicated, the address of each person or entity listed
is Burr-Brown Corporation, 6730 South Tucson Blvd., Tucson, Arizona 85706.
(3) Represents 10,061,488 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. Additionally, includes
782,666 shares held by Mr. Brown, individually. Of these shares, Mr. Brown
has sole dispositive power. Also includes 18,000 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 1, 1999.
(4) Includes 33,750 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 1, 1999.
(5) Includes 27,000 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 1, 1999.
(6) Includes 301,000 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 1, 1999.
(7) Includes 55,312 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 1, 1999.
(8) Includes 33,150 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 1, 1999.
(9) Includes 47,250 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 1, 1999.
(10) Includes 515,462 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 1, 1999. Also includes 10,061,488 shares held by Brown Investment
Management Limited Partnership, of which Mr. Brown is a General Partner,
as described in Note (3) above.
(11) Includes shares deemed to be beneficially owned by Mr. William C.
Morris by reason of his shared dispositive and voting power.
(12) These securities are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. (Price Associates) serves as
investment adviser with power to direct investments and/or sole power to
vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
<PAGE> 6
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
At the Annual Meeting, five (5) directors will be elected, each to hold
office until the next annual meeting of stockholders and until a successor
for such director is elected and has been qualified, or until the death,
resignation, or removal of such director. There are five (5) nominees for
election to the Board, 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
to the extent authority is not withheld. The five (5) candidates
receiving the highest number of 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>
Name & Age Present Principal Employment and
Prior Business Experience
<S> <C>
Syrus P. Madavi President and Chief Executive Officer of the
49 Company since March 1994 and Chairman since
April 1998. Prior to joining the Company, Mr.
Madavi was employed at Raytheon from 1990 to
1994, the last two years as President,
Semiconductor 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.
Thomas R. Brown,Jr. Director since 1956. Mr. Brown
72 founded the Company and served as its Chairman
from 1956 to 1998. Mr. Brown also served as the
Chief Executive Officer until February 1983 and
President until 1976. In addition, Mr. Brown
served as Corporate Secretary from
February 1986 to November 1987. Mr. Brown again
served as President and CEO
from April 1993 to March 1994. Mr. Brown is a
former member of the Board of
Directors of the Los Angeles Regional Office of
the Federal Reserve Board.
John S. Anderegg,Jr. Director since 1958. Chairman of
75 the Board of Dynamics Research Corporation since
1955 and served as its President from 1955 to
1986. Mr. Anderegg also serves as a Director of
the Ivy/MacKenzie Funds.
Francis J. Aguilar Director since 1993. Professor Emeritus
66 Business Administration, Harvard Business
School. Dr. Aguilar served as Faculty Chairman,
Harvard International Senior Manager's Program,
from 1972 to 1974, and Chairman, International
Teachers Program, from 1968 to 1972. Dr. Aguilar
is Executive Director of the Management Education
Alliance and is also a consultant and an author.
He serves as a Director of Bowater, Inc. and
Dynamics Research Corporation.
<PAGE> 7
Marcelo A. Gumucio Director since 1995. Mr. Gumucio retired
61 as Chief Executive Officer of Micro Focus
in 1997. From 1992 to 1996, Mr. Gumucio was
Chairman of the Management Board and the Chief
Executive Officer of Memorex Telex N.V., and
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.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held four (4) meetings during 1998. During this
period, each Board member attended or participated in at least 75% of the
aggregate of (i) the total number of meetings of the Board that were held
while he was a member and (ii) the total number of meetings held by all
committees of the Board on which he was a member.
The Audit Committee of the Board of Directors held three (3) meetings
during 1998. The Audit Committee, which is currently comprised of
Directors John S. Anderegg, Jr., Chairman, Thomas R. Brown, Jr. and
Marcelo A. Gumucio, 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 four (4) meetings during 1998. The
Compensation Committee, which is currently comprised of Directors
Francis J. Aguilar, Chairman, Thomas R. Brown, Jr. 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 and Performance Bonus Plan.
DIRECTOR COMPENSATION
Non-employee Board members each received a quarterly retainer fee of $5,000
and an additional $1,500 for each Board meeting attended. In addition,
each such Board member was reimbursed for travel expenses incurred in
connection with his attendance at Board meetings and the committees thereof.
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 off 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, 1998, there was
compliance with all Section 16(a) filing requirements applicable to the
Company's officers, directors and greater than ten percent (10%)
stockholders.
<PAGE> 8
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 1998
fiscal year was in excess of $100,000, for services rendered in all
capacities to the Company and its subsidiaries for each of the fiscal
years ended December 31, 1998, 1997, and 1996. The individuals included
in the table will be hereafter referred to as the Named Executive
Officers. Mr. Brown resigned as Chairman of the Board in April
1998. No other executive officer who would have otherwise
been included in such table on the basis of salary and bonus earned for
the 1998 fiscal year resigned or terminated employment during that fiscal
year.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual
Compensation
Name and
Principal Position Year Salary Bonus
($)(1) ($)(2)
<S> <C> <C> <C>
Syrus P. Madavi 1998 350,000 110,867
Chairman 1997 350,000 311,169
President & CEO 1996 250,000 202,441
Thomas R. Brown, Jr. 1998 67,500 2,799
Chairman 1997 195,000 6,832
Emeritus(6) 1996 195,000 2,144
Kenneth G. Wolf 1998 230,000 27,535
Executive Vice 1997 161,000 80,591
President (7) 1996 --- ---
J. Scott Blouin 1998 172,000 35,817
CFO 1997 162,000 65,868
1996 143,730 38,864
Bryan Rooney 1998 180,000 64,444
Vice President, 1997 170,000 82,252
Sales 1996 162,154 40,300
</TABLE>
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation Awards
Other Options
Annual (No. of All
Name and Compensa- Underlying Other Compen-
Principal Position Year tion($)(3) Shares)(4) sation($)(5)
<S> <C> <C> <C>
Syrus P. Madavi 1998 --- 350,000 2,500
Chairman, 1997 --- --- 2,375
President & CEO 1996 --- --- 2,310
Thomas R. Brown, Jr. 1998 --- 18,000 1,858
Chairman 1997 --- --- 2,375
Emeritus (6) 1996 --- --- 2,310
Kenneth G. Wolf 1998 --- 37,500 2,500
Executive Vice 1997 75,299 191,250 1,274
President (7) 1996 --- --- ---
J. Scott Blouin 1998 --- 37,500 2,500
CFO 1997 --- 33,750 2,375
1996 56,205 --- 2,375
Bryan Rooney 1998 6,000 22,500 2,500
Vice President, 1997 6,000 15,000 2,375
Sales 1996 60,995 90,000 2,172
</TABLE>
(1) Includes amounts deferred under the Company's Future Investment Trust Plan
("401(k) Plan").
(2) Except for Mr. Brown, includes a performance bonus earned in the year
noted above but paid in the subsequent year. For all Named Executive
Officers, includes a profit sharing bonus paid quarterly. For Mr. Rooney,
also includes sales commissions paid quarterly.
(3) Represents amounts paid as reimbursement for relocation and automobile
expenses.
(4) None of the Named Executive Officers were awarded restricted stock in
the 1998 fiscal year nor held restricted stock at the end of that year.
(5) 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.
(6) Mr. Brown retired from his employment with the Company and his position
as Chairman of the Board in April 1998. He continues to serve on the
Board of Directors.
(7) Mr. Wolf was appointed Executive Vice President on April 10, 1997.
<PAGE> 9
Stock Options
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1998 by the Company to
the Named Executive Officers:
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Percent
of Total
Number of Options/SARs
Securities Granted Exercise
Underlying Employees or
Options/SAR in Fiscal Base Price
Granted Year (#/Sh)
Name (#)(1) (2) (3)
<S> <C> <C> <C>
Syrus P. Madavi 350,000 25.32% 28.69
Thomas R. Brown 18,000 1.3% 28.69
Kenneth G. Wolf 37,500 2.71% 18.50
J.Scott Blouin 37,500 2.71% 18.50
Bryan Rooney 22,500 1.63% 18.50
</TABLE>
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation
Expiration for Option Term(4)
Name Date 5% 10%
<S> <C> <C> <C>
Syrus P. Madavi 04/23/08 6,314,495 16,002,170
Thomas R. Brown 04/23/08 324,745 822,969
Kenneth G. Wolf 01/12/08 436,296 1,105,659
J. Scott Blouin 01/12/08 436,296 1,105,659
Bryan Rooney 01/12/08 261,777 663,395
</TABLE>
(1) Represents options granted pursuant to the Company's 1993 Stock
Incentive Plan (the "Plan"). The options granted to Messrs. Wolf, Blouin,
and Rooney will become exercisable in a series of five successive
equal annual installments, with the first such installment
to become exercisable upon completion of one year of service
measured from the grant date. The options granted to Mr. Madavi
are contained in two separate agreements pursuant to which 150,000 shares
will vest in a series of five successive equal installments and 200,000
shares will vest as follows: 100,000 shares on the first anniversary of
the grant; 70,000 shares on the second anniversary of the grant;
and 30,000 shares on the third anniversary of the grant.
The option grant to Mr. Brown was an automatic option grant
relating to his commencement of service as a non-employee director in
April 1998. This option was exercisable in full upon grant but, pursuant
to the terms of the Plan, shares purchased are subject to repurchase by
the Company if his service as a Director ceases during the five-year
vesting period. All of these option grants have a maximum ten year term.
(2) The Company granted options to purchase 1,382,250 shares of common
stock to all employees in fiscal 1998.
(3) The exercise price is equal to the fair market value of the Company's
common stock on the date of grant.
(4) Potential realizeable value is based on an assumption that the market
price will appreciate at the stated rate, compounded annually, from the date
of grant until the end of the ten year term. These values are calculated
based on rules promulgated by the Securities and Exchange Commission and
do not reflect the Company's estimate or projection of future stock prices.
Actual gains, if any, on stock option exercises will be dependent upon
the future performance of the price of the Company's common stock.
<PAGE> 10
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, 1998 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 1998.
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1998 And Option Values at 1998 Year End
Shares
Acquired Number of securities
on Value Underlying unexercised
Exercise Realized Options at 1998 year end
Name (#) ($)(1) Exercisable Unexercisable
<S> <C> <C> <C> <C>
Syrus P. Madavi, 382,181 7,187,221 171,000 350,000
President & CEO
Thomas R. Brown, -- -- 18,000 --
Former Chairman of
The Board
Kenneth G. Wolf, -- -- -- 228,750
Executive
Vice President
J. Scott Blouin, -- -- 18,900 88,800
CFO
Bryan Rooney, 7,500 130,000 21,750 88,500
Vice President,
Sales
</TABLE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in 1998 and Option Values at 1998 Year End
Value of unexercised
In-the-money options at
1998 year end(2)(3)
Name Exercisable($) Unexercisable($)
<S> <C> <C>
Syrus P. Madavi, 3,665,813 0
President & CEO
Thomas R. Brown, 0 ---
Former Chairman of the Board
Kenneth G. Wolf, --- 1,766,947
Executive Vice President
J. Scott Blouin, 240,919 830,402
CFO
Bryan Rooney, 287,140 970,467
Vice President, Sales
</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, 1998.
(3) Based on the market price of $23.4375 which was the closing price per
share of the Company's common stock on the Nasdaq National Market on
December 31, 1998, less the option exercise price payable per share.
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>
Years of Service
Compensation 5 10 15 20 or More
<S> <C> <C> <C> <C>
$100,000 $4,222 $8,444 $12,665 $16,887
125,000 5,472 10,944 16,415 21,887
150,000 6,722 13,444 20,165 26,887
200,000 7,222 14,444 21,665 28,887
</TABLE>
<PAGE> 11
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
a 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 1998. Compensation covered
under the plan for named executives as of the end
of 1998: Brown: $189,150; Madavi: $154,000; Wolf: $160,000;
Blouin $135,048; Rooney $156,667. The estimated years of service for
each named executive are as follows: Brown: 42; Madavi: 4; Wolf: 1;
and Blouin: 3; Rooney: 2.
Effective January 1, 1998, the defined benefit pension plan was amended to
provide a minimum lump sum "Cash Balance" benefit equal to 2% of pay per
year plus interest. For those employees hired on or after January 1, 1999,
this minimum benefit is the only benefit payable from the plan. For those
employed prior to January 1, 1999, the projected benefit at age 65 is
presently greater under the original formula than the benefit under the
Cash Balance formula. Each named executive was employed prior to January 1,
1999. Consequently, the projected benefit for each executive can be
determined by reference to the illustrative table above.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is designed to attract,
retain and reward executives who successfully contribute to the Company's
achievement of its business objectives. The Compensation Committee of the
Board of Directors (the "Committee"), which is comprised of only
non-employee directors, is responsible for establishing and implementing
the executive compensation program. Early each year, the Committee
determines base salaries and option grant awards for each executive
officer for the new year, as well as any performance
bonuses to be paid based upon individual and Company performance during
the prior year.
General Compensation Policy
The 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
individual 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 individual and corporate 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 1998 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.
<PAGE> 12
* Base Salary. The base salary for each executive officer is set on the
basis of personal performance, the 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. The Committee made
its decisions as to the appropriate market level of base salary for each
executive officer on the basis of its review and 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 1998, the
annual base salaries for Syrus P. Madavi and Kenneth G. Wolf
remained at $350,000 and $230,000, respectively, the same as
their respective 1997 base salaries. The base salary for Thomas R.
Brown, Jr. also remained the same as his 1997 level, $195,000, in light of
his pending retirement in April 1988. The base salary for J. Scott Blouin
was increased from $ 162,000 in 1997 to $172,000 in 1998. The base
salary for Bryan Rooney was increased from $170,000 in 1997 to $180,000
in 1998.
* Annual Incentive Compensation. The Committee established an executive
incentive plan for fiscal 1998 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 1998 fiscal year was set aside for
individual bonus awards to the Chief Executive Officer and the other
executive officers and key employees of the Company. The 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 Committee then distributed the balance of the bonus pool to the other
executive officers and key employees on the basis of the individual
performance evaluations, achievement of pre-determined individual
performance objectives, Company performance and bonus recommendations
submitted by the Chief Executive Officer. Based on the foregoing,
in January 1999 the Committee awarded performance bonuses
to Messrs. Wolf, Blouin and Rooney of $20,000, $30,000, and $10,000,
respectively, based on their 1998 fiscal year contributions. Mr. Rooney
also received quarterly sales commissions pursuant to his individual
performance objectives. Mr. Brown did not receive a performance bonus.
* Long-Term Incentive Compensation. Stock options are designed to
provide the executive officers with an equity stake in the business,
thereby aligning their interests with those of the stockholders. The
Committee has established general guidelines for awarding options to
executive officers. These guidelines take 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 contributions and promotions over
the option term. The Committee does not always strictly
adhere to these guidelines and will occasionally vary the
size of the option award as circumstances warrant. Based on the
foregoing, the Committee awarded option grants to Messrs. Wolf, Blouin
and Rooney to purchase the following number of shares of the Company's
common stock, respectively: 37,500, 37,500, and 22,500. Mr. Brown did
not receive a discretionary option grant from the Committee, but he did
receive an automatic option grant to purchase 18,000 shares of
common stock in April 1998 following his retirement as Chairman and
the commencement of his service as a non-employee director of the Company.
CEO Compensation
In setting the compensation payable to the Company's Chief Executive
Officer, Syrus P. Madavi, for the 1998 fiscal year, the Committee
determined to keep his base salary at $350,000 and provide him with a
greater percentage of overall compensation from performance bonus and
equity incentives. The Committee believes this is consistent with its
objectives of providing Mr. Madavi with a competitive level of overall
compensation and tying his compensation to a great extent to the
Company's financial and operating performance and the appreciation
of the Company's stock. Although it is the 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, the Committee determined that Mr. Madavi's current base salary
satisfied these purposes for 1998.
<PAGE> 13
As previously indicated, Mr. Madavi's incentive compensation for the
1998 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.
Although the Company did not achieve some performance objectives in 1998
due to difficult industry conditions, the Company set records for
profitability, new product introductions and earnings per share, and Mr.
Madavi achieved several individual objectives. Consequently,
in January 1999 the Committee awarded Mr. Madavi a performance
bonus of $100,000 for his 1998 performance. In addition, in light of Mr.
Madavi's individual accomplishments, the Company's performance and the
fact that no stock options were awarded to Mr. Madavi during the previous
three fiscal years, the Committee granted Mr. Madavi options to purchase
350,000 shares of the Company's common stock in April 1998.
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 1998 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 1999 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 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 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 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
Francis J. Aguilar
Thomas R. Brown, Jr.
Marcelo A. Gumucio
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee is a current officer or employee
of the Company or any of its subsidiaries. Thomas R. Brown, Jr. was the
Chairman of the Board of the Company until his retirement in April 1998.
Following his retirement, he remained a director of the Company and he
became a member of the Compensation Committee. No executive officer of
the Company serves as a member of the board of directors or compensation
committee of any other entity that has an executive officer serving as
a member of the Company's Board of Directors or Compensation Committee.
<PAGE> 14
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, 1993 in the Company's common stock, the stocks included in the
Russell 2000 Index and the stocks included in Value Line's Semiconductor
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
<S> <C> <C> <C>
1993 1994 1995
Russell 2000 100.00 98.18 126.10
Value Line 100.00 129.70 196.47
Burr-Brown 100.00 207.25 587.05
</TABLE>
<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 Semiconductror Index
<S> <C> <C> <C>
1996 1997 1998
Russell 2000 146.90 179.74 175.16
Value Line 334.16 448.70 579.37
Burr-Brown 598.96 1,109.84 1,214.40
</TABLE>
Note: Assumes $100 invested on 12/31/93 in Burr-Brown, Russell 2000
Index and Value Line's Semiconductors Index. Assumes reinvestment of
dividends on a daily basis.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933 or the 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.
<PAGE> 15
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. Under this agreement, severance benefits will
be paid to Mr. Madavi upon his termination of employment under certain
specified circumstances. In the absence of a change in control of the
Company, the agreement does not provide any severance benefits to Mr.
Madavi in the event of his voluntary resignation or if
his employment is terminated for misconduct. If the Company terminated 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 would be entitled to: (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. If the Company terminated Mr. Madavi's employment
without cause (for any reason other than misconduct or just
cause), then the Company would 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.
If the Company incurred a "change in control" (a change in ownership of
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 or dissolution of the Company), then Mr. Madavi would be
entitled to a severance benefit equal to: (a) two times his average annual
base salary and bonus for the preceding three years, if he voluntarily
left the Company within two years after the change in control; (b) three
alary and bonus for the preceding three years, if he was constructively
discharged within six months after the change in control, or (c)
four times his average annual base salary and bonus for the preceding
three years, if he was is terminated without cause following the
change in control. In addition, if the Company is acquired through
a hostile takeover and Mr. Madavi left the Company's employ at any time
within the succeeding two years, then he would 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 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.
The severance agreement is effective 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 comparable
to termination benefits provided to similarly-situated chief executive
officers in the industry.
<PAGE> 16
PROPOSAL NO. 2:
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, 1999.
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, 1999.
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 PROPOSAL
Stockholders are entitled to present proposals for action at a forthcoming
meeting if they comply with the requirements of the proxy rules
promulgated by the Securities and Exchange Commission. Proposals of
stockholders of the Company intended to be presented for consideration at
the Company's 2000 Annual Meeting of Stockholders must be received by the
Company no later than November 9, 1999, in order that they be included in
the proxy statement and form of proxy related to that meeting.
In connection with the 2000 Annual Meeting of Stockholders, the proxy card
will grant the proxy holders discretionary authority to vote on any matter
raised at the 2000 Annual Meeting of Stockholders. If a stockholder
intends to submit a proposal at the 2000 Annual Meeting of Stockholders
that is not eligible for inclusion in the proxy statement and form of proxy
relating to that meeting, the stockholder must do so not later than
February 8, 2000. If such stockholder fails to comply with the foregoing
notice provision, the proxy holders will be allowed to use
their discretionary voting authority when the proposal is raised
at the 2000 Annual Meeting of Stockholders.
By order of the Board of Directors
Bradley S. Paulson
Secretary & General Counsel
March 10, 1999
<PAGE> 17
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BURR-BROWN CORPORATION
Thomas R. Brown, Jr. and Syrus P. Madavi, or either of them, are hereby
appointed as the lawful agents and proxies of the undersigned (with all
powers the undersigned would possess if personally present, including
full power of substitution) to represent and to vote all shares of capital
stock of Burr-Brown Corporation (the "Company") which the undersigned
is entitled to vote at the Company's Annual Meeting of Stockholders on
April 23, 1999, 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. Proposal to ratify the appointment of Ernst & Young LLP as
independent auditors of the Company for the year ending December 31, 1999.
FOR AGAINST ABSTAIN
3. 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:-----------------, 1999
- -------------------------
Signature
- -------------------------
Name (Print)
- -------------------------
Signature if held jointly
- -------------------------
Name (Print)
(Please sign exactly as shown on your stock certificate and on the envelope
in which this proxy was mailed. When signing as partner, corporate
officer, attorney, executor, administrator, trustee, guardian or in any
other representative capacity, give full title as such and sign your own
name as well. If stock is held jointly, each joint owner should sign.)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.