SYMMETRICOM, INC.
85 West Tasman Drive
San Jose, California 95134-1703
Notice of Annual Meeting of Shareholders
to be Held October 20, 1994
The Annual Meeting of Shareholders of Symmetricom, Inc., a
California corporation (the "Company"), will be held on Thursday,
October 20, 1994 at 10:00 a.m. at the offices of the Company, at 85
West Tasman Drive, San Jose, California 95134-1703.
At the meeting, shareholders will consider and vote upon the
following proposals:
1. To elect a Board of Directors of the Company;
2. To ratify the adoption of the Employee Stock Purchase Plan
and the reservation of 450,000 shares of Common Stock for issuance
thereunder.
3. To ratify the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the current fiscal year; and
4. To transact such other business as may properly come before
the meeting or any and all postponements or adjournments thereof.
The Board of Directors has fixed the close of business on September
2, 1994 as the record date for the determination of shareholders
entitled to notice of and to vote at the meeting. Accordingly, only
shareholders of record at the close of business on that day will be
entitled to vote at the meeting, notwith-standing any transfer of shares
on the books of the Company after that date.
A Proxy Statement which contains information with respect to the
matters to be voted upon at the meeting and a Proxy card and return
envelope are furnished herewith. Management urges each shareholder to
carefully read the Proxy Statement. If you cannot be present personally
at the meeting, you are requested to fill in and sign the Proxy card and
return it promptly to the Company in the envelope enclosed for that
purpose.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ J. Scott Kamsler
____________________
J. SCOTT KAMSLER
Secretary
San Jose, California
Dated: September 16, 1994
IT IS DESIRABLE THAT AS MANY OF THE SHAREHOLDERS AS
POSSIBLE BE REPRESENTED AT THE MEETING IN PERSON OR BY PROXY.
YOU ARE CORDIALLY INVITED TO ATTEND IN PERSON. IF YOU ARE
UNABLE TO BE PRESENT AT THE MEETING, OR ARE NOT SURE WHETHER
YOU WILL BE, YOU ARE REQUESTED TO SIGN AND RETURN THE ENCLOSED
PROXY PROMPTLY SO THAT YOUR SHARES WILL BE REPRESENTED.
SIGNING A PROXY AT THIS TIME WILL NOT AFFECT YOUR RIGHT TO
VOTE IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE MEETING.
<PAGE>
SYMMETRICOM, INC.
85 West Tasman Drive
San Jose, California 95134-1703
PROXY STATEMENT
_______________
GENERAL
Date, Time and Place
This Proxy Statement is furnished to the shareholders
of Symmetricom, Inc., a California corporation (the
"Company"), in connection with the solicitation of Proxies
by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held at 10:00 a.m. on
Thursday, October 20, 1994, and any and all postponements or
adjournments thereof. It is anticipated that this Proxy
Statement and the enclosed Proxy card will be sent to such
shareholders on or about September 16, 1994.
Purposes of the Annual Meeting
The purposes of the Annual Meeting are to (1) elect a Board of
Directors of the Company, (2) ratify the adoption of the Employee Stock
Purchase Plan and the reservation of 450,000 shares of Common Stock
thereunder, (3) ratify the appointment of Deloitte & Touche LLP as
the Company's independent auditors for the current fiscal year and
(4) transact such other business as may properly come before the
meeting or any and all postponements or adjournments thereof.
Proxy/Voting Instruction Cards and Revocability of Proxies
When the Proxy in the enclosed form is returned, properly executed,
the shares represented thereby will be voted at the meeting in
accordance with the instructions given by the shareholder. If no
instructions are given, the returned Proxy will be voted in favor of
the election of the nominees named herein as directors and in favor of
each of the other proposals. Any shareholder, including a shareholder
personally attending the meeting, may revoke his or her Proxy at any
time prior to its use by filing with the Secretary of the Company, at
the corporate offices at 85 West Tasman Drive, San Jose, California
95134-1703, a written notice of revocation or a duly executed Proxy
bearing a later date or by voting in person at the Annual Meeting.
Record Date and Share Ownership
Shareholders of record at the close of business on September 2,
1994 (the "Record Date") are entitled to notice of and to vote at the
meeting. At the Record Date, 14,192,996 shares of the Company's Common
Stock were issued and outstanding. For information regarding security
ownership by management and by 5% shareholders, see "Other Information--
Share Ownership by Principal Shareholders and Management."
Voting and Solicitation; Quorum
Every shareholder voting for the election of directors may cumulate
such shareholder's votes and give one candidate a number of votes equal
to the number of directors to be elected multiplied by the number of
votes to which the shareholder's shares are entitled, or distribute
the shareholder's votes on the same prin-ciple among as many candidates
as the shareholder thinks fit, provided that votes cannot be cast for
more than the number of candidates to be elected. However, no
shareholder shall be entitled to cumulate votes unless the candidate's
name has been placed in nomination prior to the voting and the
shareholder, or any other shareholder, has given notice at the
meeting prior to the voting of the inten-tion to cumulate the
shareholder's votes. The Company will cumulate votes in the event
that additional persons are nominated at the Annual Meeting for
election as directors.
<PAGE>
On matters other than the election of directors, each share has
one vote. Votes against any such proposal will be counted for
determining the presence or absence of a quorum and will also be
counted as having been voted with respect to the proposal for
purposes of determining whether the requisite majority of voting
shares has been obtained, but will be treated as votes against the
proposal.
An automated system administered by the Company's transfer agent
tabulates the proxies received prior to the date of the Annual
Meeting. While there is no definitive statutory or case law
authority in California as to the proper treatment of abstentions in
the counting of votes with respect to a proposal, the Company believes
that abstentions should be counted for purposes of determining both
(i) the presence or absence of a quorum for the transaction of business
and (ii) the total number of votes cast with respect to a proposal. In
the absence of controlling precedent to the contrary, the Company
intends to treat abstentions in this manner. Accordingly, abstentions
will have the same effect as a vote against the proposal. Broker non-
votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be
counted for purposes of determining the number of votes cast with
respect to a proposal.
A majority of the outstanding shares constitutes the quorum
required to transact business at the Annual Meeting.
The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners. Proxies
may also be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, personally or
by telephone, telegram or facsimile.
Shareholder Proposals for the Next Annual Meeting
Any proposal to be presented at the Company's next Annual Meeting
of Shareholders must be received at the Company's principal office no
later than May 19, 1995 in order to be considered for inclusion in the
Company proxy materials for such meeting. Any such proposals must be
submitted in writing and addressed to the attention of the Company's
Corporate Secretary at 85 West Tasman Drive, San Jose, California
95134-1703.
PROPOSAL NO. ONE
ELECTION OF DIRECTORS
Nominees
The Bylaws of the Company provide for a Board of five directors.
The Company prefers to elect four directors to the Board at this time
leaving one vacancy to be filled when a suitable candidate is
identified. Accordingly, a Board of four directors is proposed to be
elected at the meeting. Unless otherwise instruc-ted, the proxy
holders will vote the proxies received by them for manage-ment's four
nominees named below, all of whom are presently directors of the
Company. In the event that any nominee of the Company is unable or
declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee who shall be designated by the
present Board of Directors to fill the vacancy. In the event that
additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of as
many of the nominees listed below as possible, and, in such event, the
specific nominees to be voted for will be determined by the proxy
holders. Proxies cannot be voted for a greater number of persons than
the number of nominees named by the Company in this proxy statement.
The term of office of each person elected as a director will continue
until the next Annual Meeting of Shareholders or until his successor
has been elected and qualified.
<PAGE>
The names of the nominees, and certain information about them,
are set forth below.
Director Principal Occupation
or
Name Age Since Employment
____________________________ ___ _____ ____________________
William D. Rasdal(1) 61 1985 Chairman of the Board
and Chief Executive
Officer of the Company
Paul N. Risinger 61 1989 Vice Chairman and
Assistant Secretary
of the Company
Howard Anderson(2)(3) 50 1994 Managing Director of
The Yankee Group
Robert M. Wolfe(1)(2)(3) 67 1990 Telecommunications
Network Consultant
(1) Member of the Executive Committee
(2) Member of the Audit Committee
(3) Member of the Stock Option and Compensation Committee
Mr.Rasdal has served as Chairman of the Board of the Company
since July 1989 and as Chief Executive Officer since joining the
Company in November 1985. From November 1985 until July 1989, Mr.
Rasdal was President of the Company. From March 1980 until March 1985,
Mr. Rasdal was associated with Granger Associates, a manufacturer of
telecommunication products. His last position with Granger Associates
was Presi-dent and Chief Operating Officer. From November 1972 to
January 1980, Mr. Rasdal was employed by Avantek as Vice President and
Division Manager for Avantek's microwave integrated circuit and
semiconductor operations. For the thirteen years prior to joining
Avantek, he was associated with TRW in various management positions.
His last position there was General Manager of TRW's Semiconductor
Division.
Mr.Risinger has served as Vice Chairman of the Company since
August 1990 and as a Director of the Company since March 1989. From
November 1985, when Mr. Risinger joined the Company, until August 1990,
he served as Executive Vice President, Advanced Marketing and Technology
(AMAT). From April 1981 to May 1985, Mr. Risinger served as Executive
Vice President, AMAT, for Granger Associates and was responsible for the
development of new businesses for the Digital Signal Processing
Division. For four years prior thereto, he served as Executive Vice
President and Chief Operating Officer of the Safariland Companies, a
manufacturer of equipment and accessories in the public safety field.
Prior to joining Safariland, Mr. Risinger was associated with TRW in
various management roles in marketing, research and development, and
general management for seventeen years.
Mr. Anderson has been Managing Director of The Yankee Group, a
high technology market research and consulting firm, since 1970. Mr.
Anderson is also the founder of Battery Ventures, a Boston based high
technology venture capital company.
Mr. Wolfe has been an independent telecommunications network
consultant since October 1989. From April 1985 until October 1989,
Mr. Wolfe served as Vice President of BellSouth Services, a subsidiary
of BellSouth Corporation, where he was responsible for telecommuni-
cations network planning. For three years prior thereto, he served as
Assistant Vice President of BellSouth Corporation involved in strategic
planning for BellSouth after the Bell System breakup. Prior to 1982,
Mr. Wolfe held various positions in the Bell System, including two years
at AT&T in New York.
Vote Required; Recommendation of Board of Directors
With respect to the election of directors, shareholders have
cumulative voting rights, which means that each shareholder has the
number of votes equal to the number of shares held multiplied by the
number of directors to be elected. Each shareholder may give all such
votes to one candidate or distribute such shareholder's votes among the
candidates as the shareholder chooses. However, the right to cumulate
votes may not be exercised until the candidate or candidates have been
nominated and a shareholder has given notice at the Annual Meeting of
<PAGE>
the shareholder's intention to vote cumulatively. If any shareholder
present at the Annual Meeting gives such notice, all shareholders may
cumulate their votes. The candidates receiving the highest number of
votes of shares entitled to vote for them, up to the number of directors
to be elected, shall be elected. THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" THE NOMINEES SET FORTH HEREIN.
The Board of Directors and its Committees
The Board of Directors has an Executive Committee, an Audit
Committee and a Stock Option and Compensation Committee. There is
no Nominating Committee or a committee performing the functions of a
nominating committee. The Executive Committee may, to the extent
permitted by law, exercise all of the powers of the Board of Directors
with respect to the management of the Company. The Audit Committee
monitors the performance of the independent auditors, recommends their
engage-ment or dismissal to the Board of Directors and monitors the
Company's internal financial and accounting organization and financial
reporting. The Stock Option and Compensation Committee recommends
executive compensation arrangements for action by the Board as a whole,
and administers the Company's stock option plans. During the 1994
fiscal year, the Audit Committee held two meetings and the Stock Option
and Compensation Committee held four meetings. The Executive Committee
held no meetings separate from the Board of Directors as a whole during
the 1994 fiscal year.
During the 1994 fiscal year, there were four meetings of the Board
of Directors. Each of the Company's present directors attended at least
75% of the aggregate of (i) the total number of meetings of the Board of
Directors (held during the period for which such director has been a
director) and (ii) the total number of meetings of committees of the
Board of Directors on which such person served (during the period that
such director served) during the 1994 fiscal year.
Director Compensation
Under the terms of the 1990 Director Option Plan, on each January
1, each non-employee director automatically receives a nonstatutory
stock option to purchase 10,000 shares of the Company's Common Stock.
Non-employee directors of the Company are paid $2,000 for each Board
meeting attended. No additional compensation is paid for committee
meetings attended. The Company also reimburses its directors for
certain expenses incurred by them in their capacity as directors or
in connection with attendance at Board meetings.
PROPOSAL NO. TWO
RATIFICATION OF EMPLOYEE STOCK PURCHASE PLAN
In July 1994, the Board of Directors of the Company adopted an
Employee Stock Purchase Plan (the "Purchase Plan"), subject to
approval by the shareholders. A total of 450,000 shares of Common
Stock were reserved for issuance under the Purchase Plan.
At the Annual Meeting, the shareholders are being requested to
consider and ratify the adoption of the Purchase Plan. Such
ratification will enable the Company to continue its policy of
encouraging widespread employee stock ownership as a means to
motivate high levels of performance.
Vote Required; Recommendation of Board of Directors
The affirmative vote of the holders of a majority of the shares
represented in person or by proxy and voting at the Annual Meeting
will be required to ratify the adoption of the Employee Stock Purchase
Plan and the reservation of 450,000 shares of Common Stock for issuance
thereunder. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" THIS PROPOSAL.
<PAGE>
The essential features of the Purchase Plan are outlined below.
Purpose
The general purpose of the Purchase Plan is to provide employees
of the Company and its designated subsidiaries with an opportunity to
purchase Common Stock of the Company through accumulated payroll
deductions.
Terms and Conditions
The Purchase Plan is intended to qualify under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and will be
implemented, subject to shareholder approval, with an approximately
three and one-half month offering period which commences on October 17,
1994. Subse-quent offering periods will each have a six month duration
commencing on or around February 1 and August 1 of each year. The
Purchase Plan will be administered by the Board of Directors or a
committee of members of the Board appointed by the Board. Any person
who is customarily employed at least 20 hours per week and more than
five months per calendar year by the Company and/or its designated
subsidiaries during the applicable offering period is eligible to
participate in the Purchase Plan; provided, however, that no employee
shall be granted an option under the Purchase Plan if (i) such employee
would own capital stock possessing 5% or more of the total combined
voting power or value of all classes of capital stock of the Company or
of its subsidiaries (including stock issuable upon exercise of options
held by such employee) at the end of the offering period, or (ii) such
employee would receive more than $25,000 worth of stock (computed as of
the date of grant) pursuant to the Purchase Plan in any calendar year.
The Purchase Plan permits eligible employees to purchase Common Stock
through payroll deductions, which deductions may not exceed 10% of an
employee's compensation, at a price equal to 85% of the closing sale
price for the Company's Common Stock reported on the NASDAQ National
Market System ("Fair Market Value") at the beginning or at the end of
each offering period, whichever is lower; provided, however, that no
employee shall be permitted to purchase during any offering period
more than a number of shares determined by dividing $12,500 by the Fair
Market Value of a share of the Company's Common Stock on the first day
of an offering period. Employees may end their participation in an
offering at any time prior to four days before the end of an offering
period. Parti-cipation ends automatically on termination of employment
with the Company or its designated subsidiaries. An employee may not
pledge, assign or transfer his or her rights under the Purchase Plan and
any such attempt may be treated by the Company as an election of such
employee to withdraw from the Purchase Plan. At the Record Date, the
Company employed approximately 615 people, approximately 365 of whom
were eligible to participate in the Purchase Plan.
Adjustments Upon Changes in Capitalization; Corporate
Transactions
In the event of a stock dividend, stock split or other change in
capitalization affecting the Company's Common Stock, appro-priate
adjustments will be made by the Company in the number of shares
subject to purchase and in the price per share. In the event of a
liquidation or dissolution of the Company, an employee's participation
in the Purchase Plan will be terminated immediately prior to
consummation of such event unless otherwise provided by the Board. In
the event of a sale of all or substantially all of the assets of the
Company or the merger of the Company with or into another corporation,
the offering period during which such event occurs shall be cancelled
and participants shall be refunded all amounts contributed to the
Purchase Plan during such offering period; provided, however, that the
Board may determine, in lieu of cancelling such offering period, to
shorten such offering period by setting a new termination date of such
offering period.
Amendment and Termination of the Purchase Plan
The Board of Directors may at any time amend or terminate the
Purchase Plan; provided, however, that no such termination can affect
options previously granted, unless the Board determines that termination
of the Purchase Plan is in the best interests of the Company and its
shareholders, and no amendment to the Purchase Plan may make any change
in any option theretofore granted which adversely affects the right of
any participant.
<PAGE>
Tax Information
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421
and 423 of the Code. Under these provisions, no income will be taxable
to a participant until the shares purchased under the Purchase Plan are
sold or otherwise disposed of. Upon sale or other disposition of the
shares, the participant will generally be subject to tax on any income
or loss and the amount of the tax will depend upon the holding period.
If the shares are sold or otherwise disposed of more than two years from
the first day of the offering period and one year from the date the
shares are purchased, the participant will recognize ordinary income
measured as the lesser of (a) the excess of the fair market value of the
shares at the time of such sale or disposition over the purchase price,
or (b) an amount equal to 15% of the fair market value of the shares as
of the first day of the offering period. Any additional gain will be
treated as long-term capital gain. If the shares are sold or otherwise
disposed of before meeting the holding period requirement, the
participant will recognize ordinary income generally measured as the
excess of the fair market value of the shares on the date the shares are
purchased over the purchase price. Any additional gain or loss on such
sale or disposition will be long-term or short-term capital gain or
loss, depending on the holding period. The Company is not entitled to a
deduction for amounts taxed as ordinary income or capital gain to a
participant except to the extent that it is entitled to a deduction for
ordinary income recognized by parti-cipants upon a sale or disposition of
shares prior to meeting the holding period requirement described above.
The foregoing is only a summary of the effect of federal income
taxation upon the participant and the Company with respect to the shares
purchased under the Purchase Plan. Reference should be made to the
applicable provisions of the Code. In addition, the summary does not
discuss the tax consequences of a participant's death or the income tax
laws of any state or foreign country in which the participant may
reside.
PROPOSAL NO. THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS OF THE
COMPANY
Deloitte & Touche LLP, Certified Public Accountants, have been the
independent auditors for the Company since 1976 and, upon recommendation
of the Audit Committee, their reappointment as independent auditors for
the 1995 fiscal year has been approved by the Board of Directors,
subject to ratification by the shareholders.
The Company has been advised by Deloitte & Touche LLP that neither
it nor any of its members has had any relationship with the Company or
any of its affiliates during the past three years other than as
independent auditors. The Company has been advised that a
representative of Deloitte & Touche LLP will be present at the Annual
Meeting, will be available to respond to appropriate questions, and will
be given an opportunity to make a statement if he or she so desires.
Vote Required; Recommendation of the Board of Directors
Although not required to be submitted for shareholder approval,
the Board of Directors has conditioned its appointment of its
independent auditors upon receiving the affirmative vote of a majority
of the shares represented, in person or by proxy, and voting at the
Annual Meeting. In the event the shareholders do not approve the
selection of Deloitte & Touche LLP, the appointment of independent
auditors will be reconsidered by the Board of Directors. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
<PAGE>
OTHER INFORMATION
Compliance with Section 16 of the Securities Exchange Act of
1934
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who own more
than ten percent (10%) of a registered class of the Company's equity
securities, to file certain reports regarding ownership of, and
transactions in, the Company's securities with the Securities and
Exchange Commission (the "SEC"). Such officers, directors and ten
percent (10%) shareholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms that they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes
that during fiscal 1994 all Section 16(a) filing requirements applicable
to its officers, directors and ten percent (10%) shareholders were
complied with.
Share Ownership by Principal Shareholders and Management
The following table sets forth the beneficial ownership of Common
Stock of the Company as of July 31, 1994, by (i) all persons known to
the Company to be the beneficial owners of more than 5% of the Company's
Common Stock, (ii) the Company's Chief Executive Officer, (iii) the four
most highly compensated executive officers other than the Chief
Executive Officer, (iv) Robert Austin, who would have qualified as an
officer pursuant to item (iii) but for the fact that he was not serving
as an executive officer as of the Company's fiscal year end, (v) each
director and (vi) all directors and executive officers as a group.
Shares Approximate
Beneficially Percent
Name and Address Owned Owned
__________________________ ____________ ___________
Sutter Hill Ventures, a California
Limited Partnership(1) 794,077 5.6%
755 Page Mill Road
Suite A-200
Palo Alto, CA 94304
J.F. Shea Co., Inc.(2) 744,006 5.3%
655 Brea Canyon Road
Walnut, CA 91789
William D. Rasdal(3)(4) 638,665 4.4%
Paul N. Risinger(3)(5) 336,640 2.3%
D. Ronald Duren(3)(6) 166,000 1.2%
Robert M. Austin(7) 130,500 *
J. Scott Kamsler(3) 106,500 *
Robert M. Wolfe(3)(8) 28,500 *
Howard Anderson(9) 1,000 *
Brad Whitney __ __
All directors and executive officers
as a group (8 persons)(3) 1,324,055 8.8%
_________
* Less than one percent (1%).
(1) Includes 228,115 shares held individually or in a retirement
trust for the benefit of the general partners of Sutter Hill
Ventures. Each individual disclaims beneficial ownership of
shares held by or for the benefit of the other individuals.
(2) Includes 407,760 shares held by Shea Homes L.P., 171,110 shares
held by the Edmund & Mary Shea Real Property Trust, 113,556 shares
held by the John & Dorothy Shea Foundation, 20,000 shares held by
Mary Shea Trustee, Edmund & Mary Shea Real Property Trust, 14,577
shares held by the John Shea Family Trust, 5,923 shares held by
Shea Investments, 1,080 shares held by Tahoe Partnership and an
aggregate of 10,000 shares held in individual retirement accounts
for the benefit of various Shea family members. Each individual
shareholder acts on its own behalf.
<PAGE>
(3) Includes 390,000, 259,915, 95,000, 57,895, 27,500 and 864,060
shares which Messrs. Rasdal, Risinger, Duren, Kamsler, Wolfe and
all present directors and executive officers as a group,
respectively, have the right to acquire within 60 days of July 31,
1994 upon the exercise of stock options.
(4) Includes 248,665 shares held by the Rasdal Family Trust, dated
July 16, 1983, as amended, of which William D. Rasdal and Marilyn
Kay Rasdal are Co-Trustees.
(5) Includes 76,725 shares held by The Risinger Third Family Limited
Partnership, a California Limited Partnership.
(6) Includes an aggregate of 800 shares held by Sean P. McHenry and
Ashley C. Duren, children of Mr. Duren, as to which Mr. Duren
disclaims beneficial ownership.
(7) Includes 99,621 shares held by the Austin Living Trust, dated
October 24, 1988, of which Robert M. Austin and Sheryl M. Austin
are Co-Trustees. Also includes 30,879 shares which Mr. Austin has
the right to acquire within 60 days of July 31, 1994 upon the
exercise of stock options. Mr. Austin is no longer employed by
the Company.
(8) Includes 1,000 shares held by James B. Wolfe, Mr. Wolfe's son, as
to which Mr. Wolfe disclaims beneficial ownership.
(9) Includes 1,000 shares registered in the name of Yankee Group
Research, Inc. of which Mr. Anderson is the sole shareholder.
<PAGE>
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
The following table sets forth compensation received in the last
three fiscal years by (i) the Company's Chief Executive Officer, (ii)
the four most highly compensated executive officers other than the Chief
Executive Officer who were serving as executive officers at the end of
the fiscal year ended June 30, 1994 and (iii) Robert Austin, who would
have qualified as an officer pursuant to item (ii) but for the fact that
he was not serving as an executive officer as of June 30, 1994
(together, the "Named Officers").
Long Term
Compensation
Awards
Annual Compensation
Securities All
Name and Other Annual Underlying Other
Principal Year Salary Bonus Compensation Options Compensation
Position ($) ($) ($)(1) (#) ($)(2)
William D.
Rasdal 1994 225,903 0 0 80,000 300
Chairman of
the Board
and 1993 214,135 214,135 0 0 200
Chief
Executive
Officer 1992 198,847 178,962 0 0 200
D. Ronald
Duren 1994 184,119 0 0 20,000 300
President
and Chief 1993 173,558 173,558 0 20,000 200
Operating
Officer,
Telecom
Solutions 1992 149,423 149,423 0 80,000 200
Paul N.
Risinger 1994 173,927 0 0 50,000 300
Vice
Chairman
and 1993 164,135 164,135 0 0 200
Assistant
Secretary 1992 149,423 134,481 0 0 200
Brad P.
Whitney 1994 172,692 172,692 34,384(3) 0 0
President
and Chief
Operating 1993 92,297 46,667 57,377(3) 0 0
Officer,
Linfinity 1992 N/A N/A N/A N/A N/A
Micro-
electronics
Inc.
Robert M.
Austin 1994 157,049(4) 0 0 15,000(5) 300
Executive
Vice
President, 1993 149,712 149,712 0 0 200
Telecom
Solutions 1992 144,423 144,423 0 5,000(5) 200
J. Scott
Kamsler 1994 152,865 0 0 40,000 300
Vice
President,
Finance, 1993 144,135 144,135 0 0 200
Chief
Financial
Officer
and
Secretary 1992 129,423 116,481 0 0 200
(1) Excludes certain perquisites and other amounts which, for any
executive officer, in the aggregate did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus for such
executive officer.
(2) Represents Company matching 401(k) Plan contributions.
(3) Represents reimbursed relocation expenses. Mr. Whitney commenced
employment with the Company in November 1992.
(4) Mr. Austin is no longer employed by the Company. Amount includes
$59,673 of salary continuation pay subsequent to termination of
employment.
(5) One-fourth of the 15,000 option shares and the remaining one-half
of the unvested 5,000 option shares, respectively, will vest in
October 1994 in accordance with Mr. Austin's termination
agreement.
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth, as to the Named Officers, certain
information relating to stock options granted during fiscal 1994.
Individual Grants Potential
Realizable
Value at
Assumed Annual
Rates of
% of Total Stock Price
Number of Options Appreciation
Securities Granted Exercise for Option
Underlying to or Base Term(3)
Options Employees Price Expiration
Granted in Fiscal ($/Sh)(2) Date 5% ($) 10% ($)
(#) Year(1)
Name
William
D. Rasdal 80,000 16.3% 16.25 10/21/03 817,563 2,071,865
D. Ronald
Duren 20,000 4.1% 16.25 10/21/03 204,391 517,966
Paul N.
Risinger 50,000 10.2% 16.25 10/21/03 510,977 1,294,916
Brad P.
Whitney 0 __ __ __ __ __
Robert
M. Austin 15,000(4) 3.1% 16.25 01/20/95 38,323 97,119
J. Scott
Kamsler 40,000 8.2% 16.25 10/21/03 408,782 1,035,933
(1) The total number of shares subject to options granted to employees
in fiscal 1994 was 489,500.
(2) The exercise price per share is equal to the closing price of the
Company's Common Stock on the date of grant.
(3) The Potential Realizable Value is calculated based on the fair
market value on the date of grant, which is equal to the exercise
price of options granted in fiscal 1994, assuming that the stock
appreciates in value from the date of grant until the end of the
option term at the annual rate specified (5% and 10%). Potential
Realizable Value is net of the option exercise price. The assumed
rates of appreciation are speci-fied in rules of the SEC, and do
not represent the Company's estimate or projection of future stock
price. Actual gains, if any, resulting from stock option
exercises and Common Stock holdings are dependent on the future
performance of the Common Stock, overall stock market conditions,
as well as the option holders' continued employment through the
exercise/vesting period. There can be no assurance that the
amounts reflected in this table will be achieved.
(4) Mr. Austin is no longer employed by the Company. One-fourth of
the option shares will vest in October 1994 in accordance with Mr.
Austin's termination agreement. The Potential Realizable Value
calculation is based on the number of shares that will vest in
October 1994.
<PAGE>
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year
End Option Values
The following table provides information with respect to option
exercises in fiscal 1994 by the Named Officers and the value of such
officers' unexercised options at the close of business on July 1, 1994
(the last trading day prior to the end of the Company's 1994 fiscal
year).
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal Year
Shares Fiscal Year End($)(2)
Acquired on Value End(#) Exercisable
Exercise(#) Realized Exercisable Unexercisable
Name ($)(1) Unexercisable
William
D. Rasdal 0 0 390,000 80,000 2,508,750 0
D.
Ronald
Duren 11,430 106,000 90,000 75,000 451,250 213,125
Paul N.
Risinger 0 0 259,915 50,000 1,666,323 0
Brad P.
Whitney 0 0 0 0 0 0
Robert M.
Austin 13,621 69,808 30,879 17,500 196,651 12,188
J.
Scott
Kamsler 42,105 200,180 57,895 40,000 340,133 0
(1) Market value of underlying securities based on the closing price
of the Company's Common Stock on the date of exercise, minus the
exercise price.
(2) Market value of underlying securities based on the closing price
of $8.25 of the Company's Common Stock on July 1, 1994 (the last
trading day prior to the end of the Company's 1994 fiscal year),
minus the exercise price.
Compensation Committee Interlocks and Insider Participation
The Stock Option and Compensation Committee of the Company's Board
of Directors (the "Compensation Committee") is composed of two non-
employee directors, Howard Anderson and Robert M. Wolfe. Mr. Anderson
was appointed to the Compensation Committee in January 1994. Allen M.
Peterson also served on the Compensation Committee until his death in
August 1994. No interlocking relationship exists between the Company's
Board of Directors or the compensation committee of any other company,
nor has any such interlocking relationship existed in the past.
CERTAIN TRANSACTIONS
In November 1992, Brad P. Whitney joined the Company as President
and Chief Operating Officer of Linfinity Microelectronics Inc., a
subsidiary of the Company ("Linfinity"). In accordance with Mr.
Whitney's employment offer letter, he would be paid an annual base
salary of $160,000, which base salary is to be reviewed annually in July
and which base salary was $170,000 in July 1994. In the event Mr.
Whitney's employment is terminated, Mr. Whitney shall continue to
receive his base salary, as well as medical benefits and car allowance,
until the earlier to occur of (i) twelve months following such
termination or (ii) acceptance by Mr. Whitney of other employment.
In order to induce Mr. Whitney to accept the position of President
and Chief Operating Officer of Linfinity, the Company offered to assist
him in his relocation from Texas to California by agreeing to lend him
20% of the purchase price of a home in California, up to a maximum of
$125,000. Subsequent to Mr. Whitney's relocation, the Company loaned
him $95,000 pursuant to a promissory note dated April 19, 1993 (the
"Loan"). Interest accrues on the Loan at the rate of 5.34% per annum,
with all accrued interest on the outstanding principal due and payable
on July 1, October 1, January 1 and April 1 of each year. Any payments
made by the Company to Mr. Whitney under the management incentive plan
applicable to him (after applicable taxes and other withholdings) are to
be applied to the principal amount of the Loan, with all remaining
principal and interest on the Loan due and payable on April 19, 1998.
As of the Record Date, payments made by Mr. Whitney have reduced the
principal amount of the Loan to $23,430. In addition, the Company made
a short term advance of $10,000 to Mr. Whitney in January 1993 in
<PAGE>
connection with the down payment on a residence Mr. Whitney subsequently
did not purchase and has loaned him an additional $4,205 to cover
various legal fees in connection therewith (collectively the "Advance").
As of the Record Date, the Advance has been paid in full.
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, that might
incorporate future filings, including this Proxy Statement, in whole or
in part, the following report and the Performance Graph on page 14 shall
not be deemed to be "soliciting material" or to be "filed" with the
Securities and Exchange Commission, nor shall such information be
incorporated by reference into any further filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent
that the Company specifically incor-porates it by reference into any such
filing.
COMPENSATION COMMITTEE REPORT
The Compensation Committee is comprised of two independent, non-
employee directors who have no interlocking relationships, as defined by
the Securities and Exchange Commission. Allen M. Peterson also served
on the Compensation Committee until his death in August 1994. As part
of its duties, the Compensation Committee reviews compensation levels of
senior management and evaluates performance of management. The
Compensation Committee also administers the Company's option plans. In
connection with such duties, the Compensation Committee determines base
salary levels and short-term incentive bonus programs for the Company's
top six executive officers at or about the start of the fiscal year, and
determines actual bonuses after the end of such fiscal year based upon
performance levels. The Compensation Committee also determines stock
option awards of executives and other Company employees throughout the
year. The Compensation Committee's review of the Company's executive
pay program included a comprehensive report from an independent
compensation consultant which analyzed the elements of the Company's
executive compensation program in comparison with executive compensation
programs maintained by other high technology companies.
The Company's executive pay programs are designed to attract and
retain executives who will contribute to the Company's long-term
success, to reward executives for achieving both short- and long-term
strategic Company goals, to link executive and stockholder interest
through equity-based plans, and to provide a compensation package that
recognizes individual contributions and Company performance. A
substantial portion of each executive's total compensation is intended
to be variable and to relate to and be contingent upon performance.
The three key components of the Company's executive compensation
program in fiscal 1994 were base salary, short-term incentives,
represented by the Company's annual bonus program, and long-term
incentives, represented by the Company's stock option program. The
Company also provides benefits to its executives to provide for health,
welfare and security needs, as well as for executive efficiency. The
Company's policies with respect to the three principal elements of its
executive compensation program, as well as the basis for the
compensation awarded to Mr. Rasdal, Chairman of the Board and Chief
Executive Officer of the Company, are discussed below.
Base Salary
Base salaries of executive officers are initially determined by
evaluating the responsibilities of the position held and the experience
and performance of the individual, with reference to the competitive
marketplace for executive talent, including a comparison to base
salaries for comparable positions for high technology companies. The
Compensation Committee considers not only the achievement of corporate
and business unit financial and strategic goals but also individual
performance, including managerial effectiveness, teamwork and customer
satisfaction. Base salaries of executive officers in 1994 were set
below the average for comparable positions at high technology companies
in order to place a greater emphasis on incentive components of the
compensation package.
<PAGE>
Annual Bonus Program
At the beginning of the 1994 fiscal year, the Compensation
Committee determined annual incentive payment targets based on
aggressive performance targets compared to fiscal 1993. Following the
end of the 1994 fiscal year, the Compensation Committee determined the
amount of the annual incentive payments for each executive officer based
on its evaluation of the achieve-ment of the performance targets. The
Compensation Committee's philosophy is to set high performance targets,
and to make each executive officer's maximum incentive bonus payout
targets high in relation to such executive officer's salary in
comparison with other high technology companies, in order to obtain
significant linkage between overall executive compensation and
performance. For fiscal 1994, the Compensation Committee set the
maximum annual executive compensation payout target for its executive
officers at 100% of base salary for achievement of targeted performance
goals.
The Company's fiscal 1994 net sales increased by 12% over fiscal
1993; net earnings increased by approximately 9%, with a net earnings
decrease from 6.8% to 6.7%, as a percentage of net sales, during fiscal
1994 over fiscal 1993, and net earnings per common and common equivalent
share increased by 7.5% in fiscal 1994 as compared to fiscal 1993. The
fiscal 1994 annual incentive bonus payouts were paid to executive
officers of Linfinity, the Company's semiconductor subsidiary, at or
close to the maximum levels because of Linfinity's performance during
the period. Corporate employees of the Company, as well as employees of
Telecom Solutions, the Company's telecommunications operation, did not
receive incentive bonus payouts because neither the Company nor Telecom
Solutions achieved the high performance targets during the period.
Stock Options
Under the Company's 1990 Employee Stock Plan, stock options may be
granted to executive officers and other key employees of the Com--pany.
The size of stock option awards is based primarily on an indi-vidual's
performance and the individual's responsibilities and position with the
Company, as well as on the individual's present outstanding vested and
unvested options. Options are designed to align the interests of
executive officers with those of share-holders. Stock options are
granted with an exercise price equal to the fair market value of the
Company's Common Stock on the date of grant, and current grants vest
over three years. This approach is designed to encourage the creation
of shareholder value over the long term since no benefit is realized
from the stock option grant unless the price of the Common Stock rises
over a number of years.
Compensation of the Chief Executive Officer
The Compensation Committee meets without the Chief Executive
Officer present to evaluate his performance. The Chief Executive
Officer's base salary and annual incentive bonus was determined based on
a number of factors, including comparative salaries of chief executive
officers of similar performance high technology companies, and the
Company's performance in fiscal 1993 as well as targets for 1994. Mr.
Rasdal's base salary for fiscal 1994 was set at levels below the average
of chief executive officers of high technology companies because of the
Com-pensation Committee's philosophy set forth above in "Compensation
Committee Report - Base Salary." Mr. Rasdal's maximum 1994 annual
incentive bonus targets were based on the Company's achievement of
targeted levels of profits after tax and cash flow. Mr. Rasdal was not
paid an incentive bonus because of the Company's fiscal 1994
performance, as summarized above in "Compensation Committee Report --
Annual Bonus Program." Mr. Rasdal was awarded an option to purchase
80,000 shares of the Company's Common Stock in fiscal 1994.
Stock Option and Compensation Committee
Robert M. Wolfe
Howard Anderson
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total shareholders' return
on the Company's Common Stock for the last five fiscal years with the
total return on the S & P 500 Index and the S & P High Technology -
Composite Index over the same period (assuming the investment of $100 in
the Company's Common Stock, the S & P 500 Index and the S & P High
Technology - Composite Index, and reinvestment of all dividends).
PERFORMANCE GRAPH
SYMMETRICOM, INC.
Comparison of Five-Year Cumulative Total Return
Symmetricom, Inc., S & P 500 Index and
S & P High Technology - Composite Index
1989 1990 1991 1992 1993 1994
____ ____ ____ ____ ____ ____
Symmetricom, Inc. $100 $100 $117 $167 $596 $267
S&P 500 Index $100 $116 $125 $142 $161 $163
S&P High Technology-
Composite Index $100 $113 $106 $113 $132 $143
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the
meeting. If any other matters properly come before the meeting, it is
the intention of the persons named in the enclosed form of Proxy to vote
the shares they represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ J. Scott Kamsler
____________________
J. Scott Kamsler,
Secretary
Dated: September 16, 1994
Appendix A
SYMMETRICOM, INC.
1994 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of SYMMETRICOM, INC., a California
corporation, hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement, each dated September 16, 1994, and
hereby appoints William D. Rasdal and J. Scott Kamsler, and each of
them, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent
the undersigned at the 1994 Annual Meeting of Shareholders of
SYMMETRICOM, INC. to be held on October 20, 1994, at 10:00 a.m., at the
offices of the Company, at 85 West Tasman Drive, San Jose, California
95134-1703 and at any adjournments thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if then and
there personally present, on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS INDICATED,
WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS NAMED HEREIN, "FOR" EACH
PROPOSAL LISTED, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY COME BEFORE THE MEETING. EITHER OF SUCH ATTORNEYS OR
SUBSTITUTES SHALL HAVE AND MAY EXERCISE ALL OF THE POWERS OF SAID
ATTORNEYS-IN-FACT HEREUNDER.
____________________
COMMON
The Board of Directors Recommends a vote "FOR" all nominees in
Item 1 and "FOR" Items 2 and 3.
1. ELECTION OF DIRECTORS:
William D. Rasdal, Paul N. Risinger, Robert M. Wolfe, Howard
Anderson
___ FOR
___ WITHHELD FOR ALL
WITHHELD FOR:(Write that nominee's name in the space
provided below).
____________________________________________
2. PROPOSAL TO RATIFY THE ADOPTION OF THE EMPLOYEE STOCK
PURCHASE PLAN AND THE RESERVATION OF 450,000 SHARES OF COMMON STOCK FOR
ISSUANCE THEREUNDER.
____FOR ____AGAINST ____ABSTAIN
3. PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS THE INDEPENDENT AUDITORS OF THE COMPANY FOR THE 1995 FISCAL YEAR:
____FOR ____AGAINST ____ABSTAIN
And upon such other matter or matters which may properly come before the
meeting and any adjournments thereof.
____ I Plan to Attend Meeting
____ COMMENTS/ADDRESS CHANGE
Please mark this box if you have written
comments/address change on the reverse side.
Dated: _______________________
Signature(s): _______________________
NOTE: Please sign as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
APPENDIX B
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the Employee
Stock Purchase Plan of SymmetriCom, Inc.
1. Purpose. The purpose of the Plan is to provide
employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the
company to have the Plan qualify as an "Employee Stock Purchase
Plan" under Section 423 of the Internal Revenue Code of 1986, as
amended. The provisions of the Plan, accordingly, shall be
construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the
company.
(b) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(c) "Common Stock" shall mean the Common Stock of
the Company.
(d) "Company" shall mean SymmetriCom, Inc. and any
Designated Subsidiary of the Company.
(e) "Compensation" shall mean all base straight time
gross earnings and sales commissions, including all payments for
overtime, shift premium, incentive compensation, incentive
payments, profit sharing, bonuses and other compensation.
(f) "Designated Subsidiaries" shall mean the
Subsidiaries which have been designated by the Board from time to
time in its sole discretion as eligible to participate in the
Plan.
(g) "Employee" shall mean any individual who is an
Employee of the Company for tax purposes whose customary
employment with the Company is at least twenty (20) hours per week
and more than five (5) months in any calendar year. For purposes
of the Plan, the employment relationship shall be treated as
continuing intact while the individual is on sick leave or other
leave of absence approved by the Company. Where the period of
leave exceeds 90 days and the individual's right to reemployment
is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of
such leave.
(h) "Enrollment Date" shall mean the first day of
each Offering Period.
(i) "Exercise Date" shall mean the last day of each
Offering Period.
(j) "Fair Market Value" shall mean, as of any date,
the value of Common Stock determined as follows:
(1) If the Common Stock is listed on any
established stock exchange or a national market system, including
without limitation the Nasdaq National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
("NASDAQ") System, its Fair Market Value shall be the closing sale
price for the Common Stock (or the mean of the closing bid and
asked prices, if no sales were reported), as quoted on such
exchange (or the exchange with the greatest volume of trading in
Common Stock) or system on the date of such determination, as
reported in The Wall Street Journal or such other source as the
Board deems reliable, or;
(2) If the Common Stock is quoted on the
NASDAQ System (but not on the Nasdaq National Market thereof) or
is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean
of the closing bid and asked prices for the Common Stock on the
date of such determination, as reported in The Wall Street Journal
or such other source as the Board deems reliable, or;
(3) In the absence of an established market
for the Common Stock, the Fair Market Value thereof shall be
determined in good faith by the Board.
(k) "Offering Period" shall mean a period of
approximately six (6) months, commencing on the first Trading Day
on or after February 1 and terminating on the last Trading Day in
the period ending the following July 31, or commencing on the
first Trading Day on or after August 1 and terminating on the last
Trading Day in the period ending the following January 31, during
which an option granted pursuant to the Plan may be exercised,
provided that the first Offering Period under this Plan shall be
the period of approximately four (4) months, commencing with the
first Trading Day on or after October 17, 1994 and terminating on
the last Trading Day in the period ending the following
January 31, 1995. The duration of Offering Periods may be changed
pursuant to Section 4 of this Plan.
(l) "Plan" shall mean this Employee Stock Purchase
Plan.
(m) "Purchase Price" shall mean an amount equal to
85% of the Fair Market Value of a share of Common Stock on the
Enrollment Date or on the Exercise Date, whichever is lower.
(n) "Reserves" shall mean the number of shares of
Common Stock covered by each option under the Plan which have not
yet been exercised and the number of shares of Common Stock which
have been authorized for issuance under the Plan but not yet
placed under option.
(o) "Subsidiary" shall mean a corporation, domestic
or foreign, of which not less than 50% of the voting shares are
held by the Company or a Subsidiary, whether or not such
corporation now exists or is hereafter organized or acquired by
the Company or a Subsidiary.
(p) "Trading Day" shall mean a day on which national
stock exchanges and the NASDAQ System are open for trading.
3. Eligibility.
(a) Any Employee (as defined in Section 2(g)), who
shall be employed by the Company on a given Enrollment Date shall
be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the
Plan (i) to the extent, immediately after the grant, such Employee
(or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own capital
stock of the Company and/or hold outstanding options to purchase
such stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of the capital stock
of the Company or of any Subsidiary, or (ii) to the extent his or
her rights to purchase stock under all employee stock purchase
plans of the Company and its subsidiaries to accrue at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the fair market value of the shares at the
time such option is granted) for each calendar year in which such
option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by
consecutive Offering Periods with a new Offering Period commencing
on the first Trading Day on or after February 1 and August 1 each
year, or, in the case of the first Offering Period under the Plan,
on the first Trading Day on or after October 17, 1994, or on such
other date as the Board shall determine, and continuing thereafter
until terminated in accordance with Section 19 hereof. The Board
shall have the power to change the duration of Offering Periods
(including the commencement dates thereof) with respect to future
offerings without shareholder approval if such change is announced
at least fifteen (15) days prior to the scheduled beginning of the
first Offering Period to be affected thereafter.
5. Participation.
(a) An eligible Employee may become a participant in
the Plan by completing a subscription agreement authorizing
payroll deductions in the form of Exhibit A to this Plan and
filing it with the Company's payroll office prior to the
applicable Enrollment Date.
(b) Payroll deductions for a participant shall
commence on the first payroll following the Enrollment Date and
shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the
participant as provided in Section 10 hereof.
6. Payroll Deductions.
(a) At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll
deductions made on each pay day during the Offering Period in an
amount not exceeding ten percent (10%) of the Compensation which
he or she receives on each pay day during the Offering Period.
(b) All payroll deductions made for a participant
shall be credited to his or her account under the Plan and will be
withheld in whole percentages only. A participant may not make
any additional payments into such account.
(c) A participant may discontinue his or her participation
in the Plan as provided in Section 10 hereof, or may
decrease the rate of his or her payroll deductions one time during
the Offering Period by completing or filing with the Company a new
subscription agreement authorizing a change in payroll deduction
rate. The Board may, in its discretion, limit the number of or
eliminate participation rate changes during any Offering Period.
The change in rate shall be effective with the first full payroll
period following five (5) business days after the Company's
receipt of the new subscription agreement unless the Company
elects to process a given change in participation more quickly. A
participant's subscription agreement shall remain in effect for
successive Offering Periods unless terminated as provided in
Section 10 hereof.
(d) Notwithstanding the foregoing, to the extent
necessary or advisable to comply with the limitations on
contributions and Share purchases under this Plan, including but
not limited to the limitations imposed pursuant to
Section 423(b)(8) of the Code and Section 3(b) hereof, a
participant's payroll deductions may be reduced by the Company.
For purposes of complying with Section 423(b)(8) of the Code and
Section 3(b) hereof, payroll deductions shall be decreased to 0%
at such time during any Offering Period which is scheduled to end
during the current calendar year (the "Current Offering Period")
that the aggregate of all payroll deductions which were previously
used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions
accumulated with respect to the Current Offering Period equal
$21,250. Payroll deductions shall recommence at the rate provided
in such participant's subscription agreement at the beginning of
the first Offering Period which is scheduled to end in the
following calendar year, unless terminated by the participant as
provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or
in part, or at the time some or all of the Company's Common Stock
issued under the Plan is disposed of, the participant must make
adequate provision for the Company's federal, state, or other tax
withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock. At any time,
the Company may, but will not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to
meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Common Stock
by the Employee.
7. Grant of Option. On the Enrollment Date of each
Offering Period, each eligible Employee participating in such
Offering Period shall be granted an option to purchase on the
Exercise Date of such Offering Period (at the applicable Purchase
Price) up to a number of shares of the Company's Common Stock
determined by dividing such Employee's payroll deductions
accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the applicable
Purchase Price; provided that in no event shall an Employee be
permitted to purchase during each Offering Period more than a
number of Shares determined by dividing $12,500 by the Fair Market
Value of a share of the Company's Common Stock on the Enrollment
Date, and provided further that such purchase shall be subject to
the limitations set forth in Sections 3(b) and 12 hereof. Exercise
of the option shall occur as provided in Section 8 hereof, unless
the participant has withdrawn pursuant to Section 10 hereof, and
shall expire on the last day of the Offering Period.
8. Exercise of Option. Unless a participant withdraws
from the Plan as provided in Section 10 hereof, his or her option
for the purchase of shares shall be exercised automatically on the
Exercise Date, and the maximum number of full shares subject to
option shall be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions in his or
her account. No fractional shares shall be purchased; any payroll
deductions accumulated in a participant's account which are not
sufficient to purchase a full share shall be retained in the
participant's account for the subsequent Offering Period, subject
to earlier withdrawal by the participant as provided in Section 10
hereof. Any other monies left over in a participant's account
after the Exercise Date shall be returned to the participant.
During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each
Exercise Date on which a purchase of shares occurs, the Company
shall arrange the delivery to each participant, as appropriate, of
a certificate representing the shares purchased upon exercise of
his or her option.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than
all the payroll deductions credited to his or her account and not
yet used to exercise his or her option under the Plan at any time
up to four days before the Exercise Date by giving written notice
to the Company in the form of Exhibit B to this Plan. All of the
participant's payroll deductions credited to his or her account
will be paid to such participant promptly after receipt of notice
of withdrawal and such participant's option for the Offering
Period will be automatically terminated, and no further payroll
deductions for the purchase of shares will be made during the
Offering Period. If a participant withdraws from an Offering
Period, payroll deductions will not resume at the beginning of the
succeeding Offering Period unless the participant delivers to the
Company a new subscription agreement.
(b) Upon a participant's ceasing to be an Employee
(as defined in Section 2(g) hereof) for any reason, he or she will
be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to such participant's account during
the Offering Period but not yet used to exercise the option will
be returned to such participant or, in the case of his or her
death, to the person or persons entitled thereto under Section 14
hereof, and such participant's option will be automatically
terminated. The preceding sentence notwithstanding, a participant
who receives payment in lieu of notice of termination of
employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment
during the period in which the participant is subject to such
payment in lieu of notice.
(c) A participant's withdrawal from an Offering
Period will not have any effect upon his or her eligibility to
participate in any similar plan which may hereafter be adopted by
the Company or in succeeding Offering Periods which commence after
the termination of the Offering Period from which the participant
withdraws.
11. Interest. No interest shall accrue on the payroll
deductions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of the Company's
Common Stock which shall be made available for sale under the Plan
shall 450,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 18 hereof.
If on a given Exercise Date the number of shares with respect to
which options are to be exercised exceeds the number of shares
then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as
uniform a manner as shall be practicable and as it shall determine
to be equitable.
(b) The participant will have no interest or voting
right in shares covered by his option until such option has been
exercised.
(c) Shares to be delivered to a participant under
the Plan will be registered in the name of the participant or in
the name of the participant and his or her spouse.
13. Administration.
(a) Administrative Body. The Plan shall be
administered by the Board or a committee of members of the Board
appointed by the Board. The Board or its committee shall have
full and exclusive discretionary authority to construe, interpret
and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every
finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and
binding upon all parties.
(b) Rule 16b-3 Limitations. Notwithstanding the
provisions of Subsection (a) of this Section 13, in the event that
Rule 16b-3 promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or any successor provision
("Rule 16b-3") provides specific requirements for the administrators of
plans of this type, the Plan shall be administered only by
such a body and in such a manner as shall comply with the applicable
requirements of Rule 16b-3. Unless permitted by Rule 16b-3,
no discretion concerning decisions regarding the Plan shall be
afforded to any committee or person that is not "disinterested" as
that term is used in Rule 16b-3.
14. Designation of Beneficiary.
(a) A participant may file a written designation of
a beneficiary who is to receive any shares and cash, if any, from
the participant's account under the Plan in the event of such
participant's death subsequent to an Exercise Date on which the
option is exercised but prior to delivery to such participant of
such shares and cash. In addition, a participant may file a
written designation of a beneficiary who is to receive any cash
from the participant's account under the Plan in the event of such
participant's death prior to exercise of the option. If a
participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to
be effective.
(b) Such designation of beneficiary may be changed
by the participant at any time by written notice. In the event of
the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of
such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or
to any one or more dependents or relatives of the participant, or
if no spouse, dependent or relative is known to the Company, then
to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited
to a participant's account nor any rights with regard to the
exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way
(other than by will, the laws of descent and distribution or as
provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall
be without effect, except that the Company may treat such act as
an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.
16. Use of Funds. All payroll deductions received or held
by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to
segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for
each participant in the Plan. Statements of account will be given
to participating Employees at least annually, which statements
will set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased and the remaining cash
balance, if any.
18. Adjustments Upon Changes in Capitalization.
(a) Changes in Capitalization. Subject to any
required action by the shareholders of the Company, the Reserves
as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by
the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an option.
(b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering
Period will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board.
(c) Merger or Asset Sale. In the event of a
proposed sale of all or substantially all of the assets of the
Company, or the merger of the Company with or into another
corporation, the Offering Period during which such event occurs
shall be cancelled and participants shall receive a refund of all
amounts contributed to the Plan during such Offering Period,
unless the Board determines, in the exercise of its sole
discretion and in lieu of cancelling such Offering Period, to
shorten the Offering Period then in progress by setting a new
Exercise Date (the "New Exercise Date"). If the Board shortens the
Offering Period then in progress in lieu of cancelling the
Offering Period, the Board shall notify each participant in
writing, at least ten (10) business days prior to the New Exercise
Date, that the Exercise Date for his option has been changed to
the New Exercise Date and that his option will be exercised
automatically on the New Exercise Date, unless prior to such date
he has withdrawn from the Offering Period as provided in
Section 10 hereof.
The Board may, if it so determines in the exercise of its
sole discretion, also make provision for adjusting the Reserves,
as well as the price per share of Common Stock covered by each
outstanding option, in the event the Company effects one or more
reorganizations, recapitalization, rights offerings or other
increases or reductions of shares of its outstanding Common Stock,
and in the event of the Company being consolidated with or merged
into any other corporation.
19. Amendment or Termination.
(a) The Board of Directors of the Company may at any
time and for any reason terminate or amend the Plan. Except as
provided in Section 18 hereof, no such termination can affect
options previously granted, provided that an Offering Period may
be terminated by the Board
of Directors on any Exercise Date if the Board determines that the
termination of the Plan is in the best interests of the Company
and its shareholders. Except as provided in Section 18 hereof, no
amendment may make any change in any option theretofore granted
which adversely affects the rights of any participant. To the
extent necessary to comply with Rule 16b-3 or under Section 423 of
the Code (or any successor rule or provision or any other
applicable law or regulation), the Company shall obtain
shareholder approval in such a manner and to such a degree as
required.
(b) Without shareholder consent and without regard
to whether any participant rights may be considered to have been
"adversely affected," the Board (or its committee) shall be
entitled to change the Offering Periods, limit the frequency
and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in
order to adjust for delays or mistakes in the Company's processing
of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts
withheld from the participant's Compensation, and establish such
other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent
with the Plan.
20. Notices. All notices or other communications by a
participant to the Company under or in connection with the Plan
shall be deemed to have been duly given when received in the form
specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not
be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then
be listed, and shall be further subject to the approval of counsel
for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may
require the person exercising such option to represent and warrant
at the time of any such exercise that the shares are being purchased
only for investment and without any present intention to
sell or distribute such shares if, in the opinion of counsel for
the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon
the earlier to occur of its adoption by the Board of Directors or
its approval by the shareholders of the Company. It shall
continue in effect for a term of ten (10) years unless sooner
terminated under Section 19 hereof.
EXHIBIT A
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
Enrollment Date: _____________________
Check One: New Enrollment _____
Change of Beneficiary(ies) _____
Change in Payroll Deduction Rate (Limited to one reduction
per offering period) _____
1. ______________ hereby elects to participate in the
SymmetriCom, Inc. Employee Stock Purchase Plan (the
"Employee Stock Purchase Plan") and subscribes to purchase
shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Employee Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck
in the amount of % of my gross
Compensation on each payday (not to exceed 10%) during the
Offering Period in accordance with the Employee Stock
Purchase Plan. (Please note that no fractional percentages
are permitted.)
3. I understand that said payroll deductions shall be
accumulated for the purchase of shares of Common Stock at
the applicable Purchase Price determined in accordance with
the Employee Stock Purchase Plan. I understand that if I do
not withdraw from an Offering Period, any accumulated
payroll deductions will be used to automatically exercise my
option.
4. I have received a copy of the "Employee Stock Purchase
Plan." I understand that my participation in the Employee
Stock Purchase Plan is in all respects subject to the terms
of the Plan. I understand that the grant of the option by
the Company under this Subscription Agreement is subject to
obtaining shareholder approval of the Employee Stock
Purchase Plan.
5. Shares purchased for me under the Employee Stock Purchase
Plan should be issued in the name(s) of (Employee or
Employee and Spouse Only):
Employee:__________________________________________________
Spouse: ___________________________________________________
6. I understand that if I dispose of any shares received by
me pursuant to the Plan within 2 years after the Enrollment
Date (the first day of the Offering Period during which I
purchased such shares), I will be treated for federal income
tax purposes as having received ordinary income at the time
of such disposition in an amount equal to the excess of the
fair market value of the shares at the time such shares were
purchased by me over the price which I paid for the shares.
I hereby agree to notify the Company in writing within 30
days after the date of any disposition of shares and I will
make adequate provision for Federal, state or other tax
withholding obligations, if any, which arise upon the
disposition of the Common Stock. The Company may, but will
not be obligated to, withhold from my compensation the amount
necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the
Company any tax deductions or benefits attributable to sale
or early disposition of Common Stock by me. If I dispose of
such shares at any time after the expiration of the 2-year
holding period, I understand that I will be treated for
federal income tax purposes as having received income only at
the time of such disposition, and that such income will be
taxed as ordinary income only to the extent of an amount
equal to the lesser of (1) the excess of the fair market
value of the shares at the time of such disposition over the
purchase price which I paid for the shares, or (2) 15% of the
fair market value of the shares on the first day of the
Offering Period. The remainder of the gain, if any,
recognized on such disposition will be taxed as capital gain.
7. I hereby agree to be bound by the terms of the Employee
Stock Purchase Plan. The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in
the Employee Stock Purchase Plan.
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN
EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS
TERMINATED BY ME.
Under no circumstances shall the terms of employment of any
participant be modified or in any way affected by
participation in this Plan. The maintenance of the Plan
shall not constitute a contract of employment. Participating
in the Plan will not give any participant a right to be
retained in the employ of the company.
By choosing to participate in the Plan, I understand and
agree that shares purchased for me under the Employee Stock
Purchase Plan will be issued and held, for my account, by
Smith Barney, Inc., and that the Company assumes no
responsibility in connection with such shares or such account
or in connection with any subsequent disposition of such
shares. I understand that Smith Barney will charge a
commission of 6 1/4 cents per share sold, subject to a
minimum commission charge of $25.00, plus a $4.00 service fee
for each transaction. I understand that I must comply with
Symmetricom's Policy Statement Regarding Transactions in
Company Securities and the related statements specifying open
and closed trading periods.
Dated: _______________
Signature of Employee: ______________________________
EXHIBIT B
SYMMETRICOM, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL FROM PLAN
The undersigned participant of the Symmetricom, Inc. Employee
Stock Purchase Plan hereby notifies the Company that he or
she hereby withdraws from the Plan. The participant hereby
directs the Company to pay to the undersigned as promptly as
practicable all the payroll deductions credited to his or her
account. The undersigned understands and agrees that his or
her option will be automatically terminated. The undersigned
understands that no further payroll deductions will be made.
The undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company
a new Subscription Agreement.
The undersigned understands that this form must be submitted
no later than four days before the Exercise Date of the
current offering period.
Name and Address of Participant:
(Please Print)
Signature:
Date:
