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 Section 240.14a-11(c) or Section
240.14a-12
Ramtron International Corporation
- ------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------------------------
(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 Rule 14-6(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):
---------------------------------------------------------------
Page 1
<PAGE>
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
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
December 22, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders (the
"Annual Meeting") of Ramtron International Corporation, a Delaware
corporation (the "Company"), will be held on December 22, 1999, at 10:30 a.m.,
Mountain Time, at the Hilton Garden Inn, 1810 Briargate Parkway, Colorado
Springs, Colorado 80920, for the following purposes, each as more fully
described in the attached Proxy Statement:
1. To elect five directors. The names of the nominees intended to be
presented for election are: L. David Sikes, William G. Howard, Greg B. Jones,
Eric A. Balzer and Albert J. Hugo-Martinez.
2. To amend the Company's 1995 Stock Option Plan to increase the number of
shares available for grant under such plan by 1,200,000 shares to a cumulative
total of 1,800,000 and to increase the maximum number of shares that may be
awarded as options under the Plan during any calendar year to any optionee by
200,000 shares.
3. To ratify the appointment of Arthur Andersen LLP as independent auditors
of the Company for the fiscal year ending December 31, 1999.
4. To transact other business as may properly come before the Annual Meeting
or any adjournment(s) thereof.
Only record holders of Common Stock at the close of business on November 11,
1999, are entitled to notice of, and to vote at, the Annual Meeting and at any
adjournment(s) thereof.
All stockholders are cordially invited to attend the Annual Meeting in person.
Whether or not you expect to attend the Annual Meeting in person, in order to
ensure your representation at the Annual Meeting, please mark, sign, date and
return the enclosed proxy card as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any stockholder attending the Annual
Meeting may vote in person even if such stockholder has returned a proxy.
By Order of the Board of Directors
/S/Richard L. Mohr
-----------------------
Richard L. Mohr
Secretary
Colorado Springs, Colorado
November 15, 1999
Page 3
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited by and on behalf of the Board of Directors of
Ramtron International Corporation, a Delaware corporation ("Ramtron" or the
"Company"), for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Wednesday, December 22, 1999, at 10:30 a.m., Mountain
Time, or at any adjournment(s) thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held at the Hilton Garden Inn, 1810 Briargate Parkway,
Colorado Springs, Colorado 80920.
These proxy solicitation materials were first mailed on or about November 15,
1999 to all stockholders entitled to vote at the Annual Meeting.
Only stockholders of record at the close of business on November 11, 1999 (the
"Record Date") are entitled to notice of, and to vote at, the Annual
Meeting. At the Record Date, 13,656,606 shares of Common Stock were issued
and outstanding.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Annual Meeting and voting in person.
The Company's principal place of business is 1850 Ramtron Drive, Colorado
Springs, Colorado 80921.
The Company filed with the Secretary of State of the State of Delaware on
August 6, 1999, a Certificate of Amendment of the Company's Certificate of
Incorporation, effecting a one-for-five reverse split of the Company's common
stock. All references to shares of the Company's common stock and associated
stock prices shown in this document, including tables and accompanying
footnotes, have been adjusted to show the pro-forma effects of the reverse
split.
VOTING AND SOLICITATION
On all matters, each share of Common Stock has one vote. The affirmative vote
of a majority of shares present, in person or by proxy, and entitled to vote
at the Annual Meeting is required for the approval of matters submitted to the
stockholders for a vote. Abstentions are counted as shares that are present
and entitled to vote for purposes of determining the presence of a quorum.
Abstentions, however, do not constitute a vote "for" or "against" any
matter and thus will be disregarded in the calculation of a plurality or of
Page 4
<PAGE>
"votes cast." Broker non-votes are counted as shares that are present and
entitled to vote for purposes of determining a quorum. If a broker indicates
on the proxy that it does not have discretionary authority to vote on a
particular matter as to certain shares, those shares will be counted for
purposes of determining the presence of a quorum but will not be treated as
present and entitled to vote with respect to that matter (even though such
shares are considered present and entitled to vote for quorum purposes and may
be entitled to vote on other matters).
The costs of this solicitation will be borne by the Company. The Company has
retained the services of Proxy Express, Inc. to assist in distributing proxy
materials to brokerage houses, banks, custodians and other nominee holders.
The estimated cost of such services is $3,000 plus out-of-pocket expenses.
Although there are no formal agreements to do so, the Company may reimburse
brokerage houses and other persons representing beneficial owners of shares
for their expenses in forwarding proxy materials to such beneficial owners.
Proxies may be solicited personally or by telephone or telegram by certain of
the Company's directors, officers and regular employees, without additional
compensation.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be presented by
such stockholders at the next annual meeting of stockholders of the Company to
be held after the Annual Meeting must be received by the Company no later than
December 15, 1999, in order that they may be included in the proxy statement
and form of proxy relating to that annual meeting. It is recommended that
stockholders submitting proposals direct them to the Secretary of the Company
by certified mail, return receipt requested, in order to ensure timely
delivery. No such proposals were received with respect to the Annual Meeting
scheduled for December 22, 1999.
PROPOSAL 1 - ELECTION OF DIRECTORS
NOMINEES
A board of five directors will be elected at the Annual Meeting. Unless
otherwise instructed, proxy holders will vote the proxies received by them for
the five nominees named below, all of whom are currently directors of the
Company. It is not expected that any nominee will be unable or will decline
to serve as a director. If, however, 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 additional persons are nominated
for election as directors, the proxy holders intend to vote all proxies
received by them for the nominees listed below and not for a greater number of
persons than the number of nominees listed below. The term of office of each
person elected as a director at the Annual Meeting will continue until the
next annual meeting of stockholders and such time as his successor is duly
elected and qualified or until his earlier resignation, removal or death.
Page 5
<PAGE>
The names of the nominees, who constitute all of the current directors, and
certain information about them, are set forth below:
Name Age Position(s) with the Company
- ---- --- ----------------------------
L. David Sikes 57 Chairman of the Board and Chief
Executive Officer
Greg B. Jones 52 Director, President and Chief
Operating Officer
William G. Howard(1) 57 Director
Eric A. Balzer (1)(2) 51 Director
Albert J. Hugo-Martinez(1)(2) 54 Director
- -------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Mr. Sikes became the Company's Chairman of the Board and Chief Executive
Officer in April 1995 and has been a director of the Company since September
1992. Prior to becoming Chairman of the Board and Chief Executive Officer,
Mr. Sikes was the Company's President and Chief Operating Officer from July
1992 until January 1995, at which time he left the Company and joined Micro
Component Technology Inc., a semiconductor equipment manufacturer, as
Chairman, President and Chief Executive Officer from January 1995 until April
1995. Prior to joining Ramtron, Mr. Sikes was President and Chief Executive
Officer of ASM America, Inc. ("ASM America"), a semiconductor equipment
company, from January 1991 until June 1992, and Executive Vice President and
General Manager of ASM Epitaxy, a semiconductor equipment manufacturer, from
February 1989 until December 1990. Prior to his tenure with ASM Epitaxy,
Mr. Sikes spent 18 years with Motorola, Inc. ("Motorola") in various
management and executive positions including Vice President and Director of
Semiconductor Research and Development Lab. His experience also includes
several management and engineering roles with Eastman Kodak and National
Semiconductor Corporation. Mr. Sikes holds a Bachelor of Science degree
in Electrical Engineering from Massachusetts Institute of Technology.
Mr. Jones became a director of the Company and the Company's President and
Chief Operating Officer in February 1995. Prior to becoming President and
Chief Operating Officer, Mr. Jones was Ramtron's Chief of Administration from
January 1995 until February 1995. Prior to joining Ramtron, Mr. Jones was
Marketing Director at Concord Services, Inc., from November 1993 until January
1995. From August 1990 until November 1993, Mr. Jones served as Director of
Vertical Reactors at ASM America, Inc. Prior to his work with ASM America,
Inc., Mr. Jones held a variety of management positions in sales, marketing,
corporate planning and project management. He holds a Bachelor of Science
degree in Engineering from the U.S. Naval Academy, Annapolis and a Master of
Science degree in Management Sciences from Stanford University.
Page 6
<PAGE>
Dr. Howard has served as a director of the Company since July 1994. Since
September 1990, Dr. Howard has been an independent engineering consultant to
various entities, including SEMATECH, the Semiconductor Industry Association
and VLSI Technology. From October 1987 until December 1990, he served as a
Senior Fellow at the National Academy of Engineering while on leave from
Motorola. From 1969 to 1990, Dr. Howard was employed by Motorola in its
integrated circuits operations where he most recently served as Corporate
Senior Vice President and Director of Research and Development. Dr. Howard is
a member of the National Academy of Engineering and a fellow of the Institute
of Electrical Engineers and of the American Association for the Advancement of
Science. Dr. Howard is the Chairman of Credence Systems, Inc., a manufacturer
of electronic test equipment. Dr. Howard is also a director of BEI
Electronics, Inc., a manufacturer of electronic sensors and Xilinx, Inc., a
manufacturer of integrated circuits.
Mr. Balzer has served as a director of the Company since September 1998.
From January 1990 until September 1999, Mr. Balzer served as Senior Vice
President of Operations for Advanced Energy Industries, Inc. a company that
develops, manufactures and markets power conversion devices for the
semiconductor equipment industry. Prior to his employment with Advanced
Energy Industries, Inc., Mr. Balzer served as Materials and Manufacturing
Manager for IBM's corporate systems technology division.
Mr. Hugo-Martinez has served as a director of the Company since March 1999.
From March 1996 to November 1998, he served as President and Chief Executive
Officer and a member of the Board of Directors of GTI Corporation, a
manufacturer of ISDN and local area network subcomponents. From 1987 to 1995,
he served as President and Chief Executive Officer of Applied Micro Circuits
Corporation, a manufacturer of high-performance bipolar and biCMOS gate
arrays. Mr. Hugo-Martinez is also a director of Microchip, Inc., a
semiconductor manufacturing company specializing in micro-controller devices.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION
OF EACH OF THE NOMINEES NAMED ABOVE.
INFORMATION REGARDING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held a total of nine meetings during 1998 and acted by
unanimous written consent two times.
The Compensation Committee, which during 1998 was comprised of Dr. Howard and
Messrs. George J. Stathakis and William G. Tull (Messrs. Stathakis and Tull
are former directors of the Company), met three times during 1998. The
Compensation Committee makes recommendations to the Board of Directors
regarding salaries, bonuses, stock option grants and other compensation and
benefits for directors, officers and employees.
Page 7
<PAGE>
The Executive Committee, which during 1998 was comprised of L. David Sikes,
William G. Howard and George J. Stathakis, did not meet during 1998. The
Executive Committee was formed to act as the liaison between the Company and
legal counsel retained by the Company in connection with the filing by Oren L.
Benton, a former principal stockholder and former director of the Company, for
protection under Chapter 11 of the United States Bankruptcy Code. The
Executive Committee was disbanded in April 1999.
The Audit Committee, which during 1998 was comprised of Mr. William G. Tull
and Mr. L. T. Womack, both former directors of the Company, met two times
during 1998. The Audit Committee is currently comprised of
Messrs. Hugo-Martinez and Balzer. The Audit Committee recommends the
engagement of independent auditors, reviews the scope of audits proposed by
the independent auditor, reviews results of audit engagements and generally
performs functions related to financial matters of the Company.
The Company does not have a nominating committee or any committee performing
the functions thereof.
COMPENSATION OF DIRECTORS. Directors who are not officers of the Company are
paid monthly fees of $1,000, plus $1,500 for each Board of Directors meeting
attended in person. Mr. William G. Tull, was the National Electrical Benefit
Fund's designee on the Board until September 1999 when he retired. The
National Electrical Benefit Fund (the "Fund") is a principal shareholder of
the Company. Mr. Tull was not paid such director fees by the Company.
Pursuant to the March 1989 Stock and Warrant Purchase Agreement between the
Company and the Fund, any compensation payable by the Company to Mr. Tull, as
a director of the Company, was to be paid to the Fund rather than to Mr. Tull.
Directors are also reimbursed for reasonable expenses for attending Board of
Directors' meetings. Non-employee directors of the Company are eligible to be
granted non-statutory stock options under the Company's 1989 Nonstatutory
Stock Option Plan and the 1995 Stock Option Plan.
In July 1998, the Company granted to each of Mr. Stathakis, a former director
of the Company, and Dr. Howard options to purchase 4,000 shares of the
Company's common stock at $20.75 per share, the fair market value at the date
of such grant. In September 1998, the Company also granted to Mr. Balzer
options to purchase 4,000 shares of the Company's common stock at $7.03 per
share, the fair market value at the date of such grant. The grant of these
options was in recognition of the services the named individuals performed as
Directors of the Company.
Page 8
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company, and certain information about them, are
as follows:
Name Age Position(s)
- ---- --- -----------
L. David Sikes 57 Chairman of the Board and Chief Executive Officer
Greg B. Jones 52 Director, President and Chief Operating Officer
Richard L. Mohr 39 Executive Vice President and Chief Financial
Officer and Corporate Secretary
Donald G. Carrigan 52 Vice President and General Manager (FRAM Products
Business)
Craig W. Rhodine 36 Vice President and General Manager (EDRAM
Products Business)
Officers are appointed by and serve at the discretion of the Board of
Directors. Each officer was appointed for a term ending upon his death,
resignation, removal or appointment and qualification of a successor. For
information concerning Mr. Sikes and Mr. Jones, see "Nominees" above.
Mr. Mohr joined the Company in January 1991 as Controller. In April 1994, he
was named Vice President and Controller and served in that position until
February 1995 when he was named Executive Vice President and Chief Financial
Officer. Mr. Mohr is a certified public accountant and has over 17 years of
professional finance experience including 13 years employed with high
technology and manufacturing companies. From February 1987 until December
1990, Mr. Mohr was the Chief Financial Officer of Packaging Research
Corporation, an equipment manufacturing company. Mr. Mohr received his
Bachelor of Science degree in Accounting from Colorado State University and a
Master of Business Administration degree in Accounting and Finance from Regis
University.
Mr. Carrigan joined the Company in November 1989 as Sales Manager and in July
1990 was named Director of Marketing and Sales and held that position
until October 1992, when he became Vice President of Sales. In July 1996,
Mr. Carrigan became an officer of the Company, and in January 1997,
Mr. Carrigan was named Vice President of Sales and Marketing. In February
1999, Mr. Carrigan was named Vice President and General Manager of the
Company's FRAM Product Business. Mr. Carrigan has over 26 years of
semiconductor industry experience in research and development, design,
operations, marketing and sales. Prior to joining the Company, Mr. Carrigan
held various managerial and technical positions, including Vice President of
Sales and Marketing for Information Storage Incorporated, an optical storage
system venture between Eastman Kodak Co. and Kawasaki Steel. He also held
positions as Product and Test Engineering Manager and Director of Marketing
for INMOS Corporation, Design Manager for NCR Microelectronics, IC Design
Engineer in the Corporate Research Labs of Texas Instruments, and Design
Manager for SRAM's with the Advanced MOS Memory Division of Texas Instruments.
Mr. Carrigan received his Bachelor of Science degree in Electrical Engineering
from the University of Tennessee and a Master of Science degree in Electrical
Engineering from Southern Methodist University.
Page 9
<PAGE>
Mr. Rhodine joined the Company in August 1992 as Senior Product Engineer, and
in February 1994, he was named Engineering Manager. In August 1995,
Mr. Rhodine was named General Manager of Enhanced Memory Systems, Inc.
("EMS"), a wholly owned subsidiary of Ramtron, and in March 1997,
Mr. Rhodine became Vice President and General Manager of EMS. Mr. Rhodine
became an officer of the Company in January 1998. Mr. Rhodine has
over 13 years of experience in the semiconductor industry in engineering,
development, and operations. Prior to joining the Company, Mr. Rhodine was a
Member of the Group Technical Staff at Texas Instruments where he was involved
with memory products development. Mr. Rhodine received his Bachelor of
Science degree in Electrical Engineering from the University of Wyoming.
SECURITY OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of October 1, 1999 by: (i) each
person who is known by the Company to own beneficially more than 5% of the
outstanding shares of the Company's Common Stock; (ii) each of the Company's
directors; (iii) each of the Company's executive officers; and (iv) all
current directors and executive officers of the Company as a group.
Shares of Common Stock Percent
Name of Beneficial Owner(1) Beneficially Owned of Class(2)
- --------------------------- ---------------------- -----------
National Electrical Benefit Fund 2,554,377(3) 17.5%
1125 15th Street, N.W., Room 912
Washington, D.C. 20005
NTC Liquidating Trust 1,516,617(4) 10.6
PricewaterhouseCoopers
200 E. Randolph Dr., Suite 7600
Chicago, IL 60601
Benton Liquidating Trust 349,186(5) 2.6
PricewaterhouseCoopers
200 E. Randolph Dr., Suite 7600
Chicago, IL 60601
L. David Sikes 71,350(6) *
Richard L. Mohr 36,304(7) *
Greg B. Jones 34,600(8) *
Donald G. Carrigan 25,693(9) *
Craig W. Rhodine 23,063(10) *
William G. Howard 8,000(11) *
Albert J. Hugo-Martinez 2,600(12) *
Eric A. Balzer 1,000(11) *
All current directors and executive
officers as a group (8 persons) 202,610(13) 1.5
- -------------
Page 10
<PAGE>
* Less than one percent
(1) Such persons have sole voting and investment power with respect to all
shares of Common Stock shown as being beneficially owned by them, subject
to community property laws where applicable, except as otherwise
indicated in the information contained in these footnotes.
(2) As of October 31, 1999, there were 13,656,606 shares of Common Stock
issued and outstanding. Pursuant to Rule 13d-3(d)(1)(B), shares of
Common Stock issuable upon the exercise of warrants or stock options held
by each person set forth in the table which are currently exercisable or
become exercisable within 60 days are included in the number of shares of
Common Stock outstanding for purposes of determining the percentage
ownership of such person.
(3) Includes: (i) 1,638,680 shares of Common Stock owned by the National
Electrical Benefit Fund ("NEBF"); (ii) 905,697 shares of Common Stock
issuable upon exercise of warrants held by the NEBF, which are currently
exercisable or become exercisable within 60 days; and (iii) 10,000 shares
of Common Stock issuable upon exercise of options held by the NEBF, which
are currently exercisable or become exercisable within 60 days. The
trustees of the NEBF share voting and dispositive powers as to such
shares. To the best knowledge of the Company, the trustees of the NEBF
are Edwin D. Hill and John M. Grau.
(4) In an amended Schedule 13D dated May 20, 1999, the NTC Liquidating Trust
reported sole voting and sole dispositive power as to 1,516,617 shares of
Common Stock consisting of: (i) 924,373 shares of Common Stock owned
directly by the NTC Liquidating Trust; and (ii) 592,243 shares of
Common Stock issuable upon exercise of warrants held by the NTC
Liquidating Trust, which are currently exercisable or become exercisable
within 60 days.
(5) In an amended Schedule 13D dated May 20, 1999, the Benton Liquidating
Trust reported sole voting and sole dispositive power as to 349,186
shares of Common Stock owned directly.
(6) Includes: (i) 2,100 shares of Common Stock owned directly and
(ii) 69,250 shares issuable to Mr. Sikes pursuant to options, which are
currently exercisable or become exercisable within 60 days.
(7) Includes: (i) 2,178 shares of Common Stock owned directly and
(ii) 34,126 shares issuable to Mr. Mohr pursuant to options, which are
currently exercisable or become exercisable within 60 days.
(8) Includes: (i) 2,600 shares of Common Stock owned directly and
(ii) 32,000 shares issuable to Mr. Jones pursuant to options, which are
currently exercisable or become exercisable within 60 days.
Page 11
<PAGE>
(9) Includes: (i) 2,168 shares of Common Stock owned directly and
(ii) 23,525 shares issuable to Mr. Carrigan pursuant to options, which
are currently exercisable or become exercisable within 60 days.
(10) Includes: (i) 1,200 shares of Common Stock owned directly and
(ii) 21,863 shares issuable to Mr. Rhodine pursuant to options, which are
currently exercisable or become exercisable within 60 days.
(11) Such shares of Common Stock are issuable pursuant to options, which are
currently exercisable or become exercisable within 60 days.
(12) Such shares of Common Stock are owned directly.
(13) Includes 189,764 shares of Common Stock issuable to current officers
and directors pursuant to options, which are currently exercisable or
become exercisable within 60 days.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company's directors and officers and persons holding
more than ten percent of the Company's Common Stock are required to report
their ownership of the Company's Common Stock and any changes in that
ownership to the Securities and Exchange Commission (the "SEC"). The
specific due dates for these reports have been established by the SEC, and the
Company is required to report in this Proxy Statement any failure to file by
the established dates. To the knowledge of the Company and based solely on a
review of the Section 16(a) reports furnished to the Company during 1998, none
of the Company's directors, officers and persons holding more than 10% of the
Company's Common Stock were delinquent in filing reports pursuant to Section
16(a) of the Exchange Act.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information for the three years ended
December 31, 1998 concerning compensation paid or accrued by the Company to or
on behalf of the Company's Chief Executive Officer during 1998 and each of the
four other most highly compensated executive officers of the Company whose
compensation during 1998 exceeded $100,000.
Page 12
<PAGE>
Long-Term
Compensation Awards
-------------------------
Annual Compensation Securities Restricted
Name and -------------------- Underlying Stock
Principal Position Year Salary($) Bonus($) Options(#) Awards($)
- ------------------ ---- --------- -------- -------------------------
L. David Sikes 1998 $360,000 $65,000 20,000 $64,806(1)
Chairman of the 1997 355,000 75,000 10,000 --
Board and Chief 1996 335,005 100,000 10,000 --
Executive Officer
Greg B. Jones 1998 202,100 -- 9,000 49,790(2)
President and Chief 1997 179,900 -- -- --
Operating Officer 1996 167,500 105,044 29,000 --
Richard L. Mohr 1998 200,000 -- -- 48,117(3)
Executive Vice 1997 175,333 20,000 10,000 --
President and Chief 1996 131,300 98,183 27,490 --
Financial Officer
Donald G. Carrigan(4) 1998 152,092 5,333 8,000 33,804(5)
Vice President and 1997 139,225 -- 10,000 --
General Manager, 1996 122,500 87,930 13,900 --
FRAM Business
Craig W. Rhodine(6) 1998 137,500 -- -- 42,254(7)
Vice President and 1997 122,083 -- -- --
General Manager,
EDRAM Business
- ---------------
(1) The amount shown represents the dollar value of the award of restricted
stock, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded plus withholding tax on the calculated amount of the award. The
number of shares of fully vested restricted stock awarded was 1,600. The
closing market price on the date of the award, the market value of the
stock on the date of the award and the associated withholding taxes were
$25,078, $40,125 and $24,681, respectively. As of December 31, 1998,
Mr. Sikes held 1,600 shares of such restricted stock having a value of
$4,000 based upon the fair market value of the Common Stock on
December 31, 1998. The restricted shares are currently unregistered and
are not tradable pursuant to an active registration statement filed with
the SEC.
Page 13
<PAGE>
(2) The amount shown represents the dollar value of the award of restricted
stock, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded plus withholding tax on the calculated amount of the award. The
number of shares of fully vested restricted stock awarded was 1,200. The
closing market price on the date of the award, the market value of the
stock on the date of the award and the associated withholding taxes were
$25,078, $30,094 and $19,696, respectively. As of December 31, 1998,
Mr. Jones held 1,200 shares of such restricted stock having a value of
$3,000 based upon the fair market value of the Common Stock on
December 31, 1998. The restricted shares are currently unregistered and
are not tradable pursuant to an active registration statement filed with
the SEC.
(3) The amount shown represents the dollar value of the award of restricted
stock, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded plus withholding tax on the calculated amount of the award. The
number of shares of fully vested restricted stock awarded was 1,200. The
closing market price on the date of the award, the market value of the
stock on the date of the award and the associated withholding taxes were
$25,078, $30,094 and $18,023, respectively. As of December 31, 1998,
Mr. Mohr held 1,200 shares of such restricted stock having a value of
$3,000 based upon the fair market value of the Common Stock on
December 31, 1998. The restricted shares are currently unregistered and
are not tradable pursuant to an active registration statement filed with
the SEC.
(4) Mr. Carrigan became an executive officer of the Company in July 1996 and
was employed by the Company in various non-executive officer positions
from November 1989 until July 1996.
(5) The amount shown represents the dollar value of the award of restricted
stock, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded plus withholding tax on the calculated amount of the award. The
number of shares of fully vested restricted stock awarded was 800. The
losing market price on the date of the award, the market value of the
stock on the date of the award and the associated withholding taxes were
$25,078, $20,062 and $13,742, respectively. As of December 31, 1998,
Mr. Carrigan held 800 shares of such restricted stock having a value of
$2,000 based upon the fair market value of the Common Stock on
December 31, 1998. The restricted shares are currently unregistered and
are not tradable pursuant to an active registration statement filed with
the SEC.
(6) Mr. Rhodine became an executive officer of the Company in March 1997 and
was employed by the Company in various non-executive officer positions
from September 1992 until March 1997.
Page 14
<PAGE>
(7) The amount shown represents the dollar value of the award of restricted
stock, calculated by multiplying the closing market price of the
Company's Common Stock on the date of grant by the number of shares
awarded plus withholding tax on the calculated amount of the award. The
number of shares of fully vested restricted stock awarded was 1,000. The
closing market price on the date of the award, the market value of the
stock on the date of the award and the associated withholding taxes were
$25.078, $25,078 and $17,176, respectively. As of December 31, 1998,
Mr. Rhodine held 1,000 shares of such restricted stock having a value of
$2,500 based upon the fair market value of the Common Stock on
December 31, 1998. The restricted shares are currently unregistered and
are not tradable pursuant to an active registration statement filed with
the SEC.
OPTION GRANTS IN 1998
The following table sets forth certain information concerning stock option
grants in 1998 to each of the executive officers named in the Summary
Compensation Table who received stock option grants in 1998.
Individual Grants
------------------------------------------ Potential Realizable
No. of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Term(2)
Granted Employees Price Expiration --------------------
Name (#) in 1998(1) ($/Share) Date 5%($) 10%($)
- ---- ---------- ---------- --------- ---------- -------- ---------
L. David Sikes
20,000(3) 21.0% $22.500 04/27/08 $283,003 $717,184
Greg B. Jones
9,000(3) 9.4 28.440 01/02/08 160,972 407,934
Donald G. Carrigan
8,000(4) 8.4 23.595 04/23/08 118,710 300,835
- ---------------
(1) The Company granted options to purchase an aggregate of 95,422 shares to
employees in 1998.
(2) Potential values are net of exercise price and before taxes payable in
connection with the exercise of such options or the subsequent sale of
shares acquired upon the exercise of such options. These values
represent certain assumed rates of appreciation (i.e., 5% and 10%
compounded annually over the term of such options) based on the
Securities and Exchange Commission's rules. The actual values, if any,
will depend upon, among other factors, the future performance of the
Company's Common Stock, overall market conditions and the named officer's
continued employment with the Company. Therefore, the potential values
reflected in this table may not necessarily be achieved.
Page 15
<PAGE>
(3) Such options were granted under the 1995 Stock Option Plan
(the "1995 Plan") and vest and become exercisable in four equal annual
installments commencing one year following the grant date. The exercise
price per share of such options is equal to the reported closing price of
the Company's Common Stock on The Nasdaq Stock Market on the date of
grant.
(4) Such options were granted under the 1989 Nonstatutory Stock Option Plan
(the "1989 Plan") and vest and become exercisable in four equal annual
installments commencing one year following the grant date. The exercise
price per share of such options is equal to the reported closing price of
the Company's Common Stock on The Nasdaq Stock Market on the date of
grant.
AGGREGATED OPTIONS EXERCISED IN 1998 AND OPTION VALUES AT DECEMBER 31, 1998
The following table sets forth the aggregate number and the value of options
held as of the end of 1998 by the executive officers named in the Summary
Compensation Table. None of the executive officers named in the Summary
Compensation Table exercised options during 1998.
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
at 12/31/98(#) at 12/31/98($)*
------------------------------ --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
L. David Sikes 49,250 42,500 $-- $--
Greg B. Jones 20,500 25,500 -- --
Richard L. Mohr 23,755 22,245 -- --
Donald G. Carrigan 15,550 22,450 -- --
Craig W. Rhodine 15,242 13,242 -- --
- ---------------
* Represents the difference between the closing price of the Company's Common
Stock on December 31, 1998 as reported on The Nasdaq Stock Market
(i.e., $2.50 per share) and the exercise price of such options.
Page 16
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
AGREEMENTS
EMPLOYMENT AGREEMENTS. In March 1995, the Company entered into a three-
year employment agreement, effective on April 1, 1995, with Mr. Sikes in
connection with his becoming the Company's Chief Executive Officer and
Chairman of the Board. The agreement provided for Mr. Sikes to receive an
initial annual salary of $320,000. The agreement provides that if the Company
terminates Mr. Sikes' employment during the term of the agreement for any
reason other than for cause, the Company will be obligated to pay him his
then annual salary for the remainder of the three-year term. In May 1997, the
Board of Directors extended Mr. Sikes' employment agreement for a period of
two years beyond the original expiration date of April 1, 1998, and in August
1999, the expiration date was further extended to December 31, 2000.
In April 1997, the Company entered into a two-year employment agreement,
effective on April 1, 1997, with Mr. Mohr. The agreement provided for
Mr. Mohr to receive an initial monthly salary of $15,000. The agreement
provided that if the Company terminated Mr. Mohr's employment during the term
of the agreement for any reason other than for cause, the Company would be
obligated to pay him his then annual salary for the remainder of the two-year
term. In April 1999, the Board of Directors extended Mr. Mohr's employment
agreement for a period of two years beyond the original expiration date of
April 1, 1999.
In January 1998, the Company entered into a two-year employment
agreement, effective on January 1, 1998, with Mr. Jones. The agreement
provided for Mr. Jones to receive an initial annual salary of $200,000. The
agreement provides that if the Company terminates Mr. Jones' employment during
the term of the agreement for any reason other than for cause, the Company
will be obligated to pay him his then annual salary for the remainder of the
two-year term. In August 1999, the Board of Directors extended Mr. Jones'
employment agreement to December 31, 2000.
In July 1998, the Company entered into a two-year employment agreement,
effective on July 22, 1998, with Mr. Rhodine. The agreement provided for
Mr. Rhodine to receive an initial annual salary of $137,500. The agreement
provides that if the Company terminates Mr. Rhodine's employment during the
term of the agreement for any reason other than for cause, the Company will be
obligated to pay him his then annual salary for the remainder of the two-year
term. In August 1999, the Board of Directors extended Mr. Rhodine's
employment agreement to December 31, 2000.
In August 1999, the Company entered into an employment agreement with
Mr. Carrigan, effective August 16, 1999 with an expiration date of
December 31, 2000. The agreement provided for Mr. Carrigan to receive an
initial salary of $152,092. The agreement provides that if the Company
terminates Mr. Carrigan's employment during the term of the agreement for any
reason other than for cause, the Company will be obligated to pay him his then
annual salary for the remainder of the term of the agreement.
Page 17
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee during 1998 were George J.
Stathakis, William G. Tull, both former directors of the Company, and
William G. Howard. There were no executive officers or employees of the
Company that were members of the Company's Compensation Committee during 1998.
Mr. Stathakis served as Chairman of the Board and Chief Executive Officer of
the Company from March 1990 until June 1994 and, in an interim capacity, from
February 1995 until April 1995.
TRANSACTIONS INVOLVING GEORGE J. STATHAKIS. Mr. Stathakis was a Director of
the Company through September 1999. In July 1995, Mr. Stathakis entered into
a consulting agreement with the Company pursuant to which he agreed to perform
consulting services for the Company until December 31, 1996 in consideration
of $7,000 per month. Pursuant to the terms of such consulting agreement, the
Company had the option to extend the term of the agreement for six additional
periods of six months each. In December 1996, the Company exercised a six-
month extension to such agreement for Mr. Stathakis to perform consulting
services for the Company through June 30, 1997. In July 1997, the Company
exercised a second extension to such agreement for Mr. Stathakis to perform
consulting services for the Company through December 1998, with a decrease in
consideration for such services to $5,800 per month. The consulting agreement
with Mr. Stathakis expired on December 31, 1998 and was not further extended.
During 1998, the Company paid to Mr. Stathakis $99,000 as payment for
consulting fees and reimbursement for expenses owed to Mr. Stathakis in
connection with consulting services performed by Mr. Stathakis for the benefit
of the Company during 1998.
The following Board of Directors Report on Executive Compensation and the
Performance Graph on page 20 shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933 or under the Securities Exchange
Act of 1934, except to the extent that the Company specifically incorporates
such information by reference, and shall not otherwise be deemed filed under
such Acts.
BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
In 1998, the Board of Directors was responsible for determining and approving
the annual compensation to be paid and the benefits to be provided to the
Company's executive officers and for administering the Company's Amended and
Restated 1986 Stock Option Plan, the 1989 Nonstatutory Stock Option Plan and
the 1995 Stock Option Plan. The Company's compensation program is designed to
attract, retain and motivate qualified executive officers who the Company
believes will contribute to its long-term success. The Company's compensation
program is comprised primarily of annual base salaries and stock option
grants. In addition, executive officers receive group life insurance and
health benefits as part of their overall compensation. The Board considers
each component of compensation within the context of the entire officer
compensation program in making its determination.
Page 18
<PAGE>
The Compensation Committee of the Board of Directors makes recommendations to
the Board of Directors regarding salaries, bonuses, stock option grants and
other compensation and benefits for directors, officers and employees.
ANNUAL BASE SALARIES. The Board of Directors reviews and approves the annual
base salaries of all executive officers (including the Chief Executive
Officer). In determining annual base salaries, the Board collects and
analyzes base salary information from competitors in its industry and uses
that information as the basis for comparing the base salaries of the Company's
executive officers to the amounts paid to executive officers with comparable
qualifications, experience and responsibilities in businesses similar to the
Company's business. The Board also considers both subjective and objective
factors, including, among others, an officer's responsibilities, experience
and qualifications, job performance, contributions and length of service to
the Company, and the Company's financial results and condition. The annual
base salary of Mr. Sikes, the Company's Chief Executive Officer, remained
unchanged during 1998 at $360,000.
The Board also increased the base salaries of its other executive officers in
1998 by an average of approximately 7.75% over 1997 base salary levels in
recognition of such officers' performance and contributions made in 1997 as
well as to remain competitive with similar types of positions in the industry
or comparable industries in which the Company competes and does business.
Such salary increases made to executive officers (and other key personnel)
were also pursuant to a salary survey conducted at the request of the
Company's Compensation Committee.
BONUSES. The Board approved a one-time cash bonus to Mr. Sikes, the
Company's Chairman and Chief Executive Officer, of $65,000 during 1998 in
recognition of Mr. Sikes' contributions to the Company during 1997 with
respect to operational, financial and legal issues of the Company.
STOCK OPTIONS. Options to purchase the Company's Common Stock have
historically been and continue to be a key component of the Company's
compensation program. The Board of Directors views the grant of stock options
as a valuable incentive that serves to attract, retain and motivate executive
officers and other key employees, as well as to align their interest more
closely with the Company's goal of enhancing stockholder value. The
Compensation Committee reviews and considers recommendations by the Company's
Chief Executive Officer (other than for himself) with regard to the grant of
stock options to executive officers and other key employees, and then makes
recommendations to the Board of Directors. In determining the size, frequency
and other terms of an option grant to an executive officer, the Compensation
Committee and the Board consider a number of factors, including, among others,
such officer's position, responsibilities, job performance, prior option
grants, contributions and length of service to the Company and the value of
his or her vested and unvested previously granted stock options, if any.
Page 19
<PAGE>
Options generally vest in annual installments over two to four years as long
as the optionee remains an employee of the Company and, therefore, encourages
an optionee to remain in the employ of the Company. In 1998, options to
purchase an aggregate of 37,000 shares of Common Stock were granted to all
executive officers as a group and represented approximately 39% of all options
granted to the Company's employees in 1998. Information concerning options
granted during 1998 to executive officers is provided in the table entitled
"Option Grants in 1998" above.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. The Board of Directors generally
considers the same factors in determining the Chief Executive Officer's
compensation as it considers with respect to the Company's other executive
officers including both subjective and objective factors. Although L. David
Sikes, the Company's Chief Executive Officer, is a member of the Company's
Board of Directors, he did not participate in any discussions or decisions of
the Board regarding the setting of his compensation for 1998. During 1998,
Mr. Sikes' compensation consisted of an annual salary of approximately
$360,000, a cash bonus of $65,000, and the granting of new stock options to
purchase 20,000 shares of the Company's Common Stock.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), a publicly held corporation
such as the Company will not be allowed a federal income tax deduction for
compensation paid to the executive officers named in the Summary Compensation
Table to the extent that compensation (including stock-based compensation)
paid to a particular officer exceeds $1 million in any fiscal year unless such
compensation was based on performance goals or paid under a written contract
that was in effect on February 17, 1993. Qualifying performance-based
compensation (including compensation attributable to the exercise of stock
options) will not be subject to the deductibility limitation if certain
conditions are met. The Company expects that compensation attributable to the
exercise of stock options will qualify for the exception for qualifying
performance-based compensation and that such compensation will not, therefore,
count toward the $1 million limit. Based upon the Company's current
compensation plans and policies and the regulation under Section 162(m), it
appears that the compensation to be paid to the Company's executive officers
for 1999 will not exceed the $1 million limitation per officer.
L. David Sikes
Greg B. Jones
William G. Howard
Eric A. Balzer
Albert J. Hugo-Martinez
PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock with the cumulative total return of the S&P Electronics
(Semiconductors) Industry Index and the S&P Composite Index for the period
commencing December 31, 1993 and ending December 31, 1998.
Page 20
<PAGE>
In preparing the following graph, it was assumed that $100 was invested on
December 31, 1993 in each of the Company's Common Stock, the S&P Electronics
(Semiconductors) Index and the S&P 500 Composite Index with all dividends, if
any, reinvested.
The historic stock price performance presented in the following chart is not
necessarily indicative of future stock performance.
Comparison of Five-Year Cumulative Total Return Among
Ramtron International Corporation, the S&P Electronics (Semiconductors) Index
and the S&P Composite Index
Dec 31, Dec 30, Dec 29, Dec 31, Dec 31, Dec 31,
1993 1994 1995 1996 1997 1998
-------- -------- -------- -------- -------- --------
Ramtron $100 $ 63.49 $ 82.54 $ 76.19 $ 70.63 $ 6.35
S&P Electronics
(Semiconductors)
Industry Index 100 116.90 158.76 285.88 307.62 515.45
S&P Composite Index 100 101.32 139.40 171.41 228.59 293.92
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following are certain transactions entered into between the Company and
its officers, directors and principal stockholders or their affiliates since
January 1, 1998.
TRANSACTIONS INVOLVING GEORGE J. STATHAKIS
See "Compensation Committee Interlocks and Insider Participation-Transactions
Involving George J. Stathakis."
TRANSACTIONS INVOLVING THE NATIONAL ELECTRICAL BENEFIT FUND
Pursuant to a Stock and Warrant Purchase Agreement dated March 13, 1989
between the Company and the Fund, as amended by Amendment No. 1 thereto dated
June 29, 1989 (the "1989 Fund Purchase Agreement"), the Company agreed to
pay to the Fund, for as long as the Fund owns at least 5% of the outstanding
shares of the Company's Common Stock, a reasonable monthly consulting fee of
not more than $5,000 and to reimburse the Fund for all out-of-pocket expenses
incurred in monitoring the Fund's investment in the Company. During 1998,
the Company was obligated to pay to the Fund approximately $60,000 in payment
of such fees and expenses, of which no payments were made during 1998.
Page 21
<PAGE>
In July 1998, the Company granted to the Fund options to purchase 7,000
shares of the Company's common stock at the fair market value at the date of
such grant. The grant of these options to the Fund was in lieu of Mr. Tull, a
former director of the Company, the Fund's board representative, receiving
these options in recognition of the services he had performed on the Company's
behalf as a Director of the Company.
TRANSACTIONS INVOLVING L. DAVID SIKES
See "Employment Contracts and Termination of Employment and Change-In-Control
Agreements."
TRANSACTIONS INVOLVING RICHARD L. MOHR
See "Employment Contracts and Termination of Employment and Change-In-Control
Agreements."
TRANSACTIONS INVOLVING GREG B. JONES
See "Employment Contracts and Termination of Employment and Change-In-Control
Agreements."
TRANSACTIONS INVOLVING CRAIG W. RHODINE
See "Employment Contracts and Termination of Employment and Change-In-Control
Agreements."
TRANSACTIONS INVOLVING DONALD G. CARRIGAN
See "Employment Contracts and Termination of Employment and Change-In-Control
Agreements."
PROPOSAL 2 - APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1995 STOCK OPTION PLAN
TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR GRANT UNDER SUCH PLAN BY
1,200,000 SHARES TO A CUMULATIVE TOTAL OF 1,800,000 AND TO INCREASE THE
MAXIMUM NUMBER OF SHARES THAT MAY BE AWARDED AS OPTIONS UNDER THE PLAN DURING
ANY CALENDAR YEAR TO ANY OPTIONEE BY 200,000 SHARES.
On December 15, 1995, the Company's stockholders adopted and approved the 1995
Stock Option Plan (the "1995 Plan") and 600,000 shares (adjusted for the
August 1999 one-for-five reverse split) of Common Stock were reserved for
issuance thereunder. As of October 1, 1999, 11,446 shares remained available
for future option grants under this plan.
Page 22
<PAGE>
On September 28, 1999, the Board of Directors approved an amendment to the
1995 Plan to increase the number of shares available under such plan by
1,200,000 shares and to increase the maximum number of shares that may be
awarded as options under the Plan during any calendar year to any optionee by
200,000 shares. Additional shares are needed for use in the 1995 Plan so that
stock option grants can continue to be made to attract and retain key
employees of the Company and its subsidiaries. If this amendment to the 1995
Plan is not approved by the stockholders, no grants of options will be made
under the 1995 Plan once the currently available shares subject to options are
granted. The proceeds received by the Company from the exercise of options
under the 1995 Plan are used for the general corporate purposes of the
Company.
On September 28, 1999, the board of directors of the Company, with interested
directors abstaining, granted options to purchase 500,000 shares of the
Company's common stock to the officers of the Company under the 1995 Plan.
The granting of these options is subject to stockholder approval of PROPOSAL 2
contained herein. If shareholders do not approve PROPOSAL 2 as presented
herein, the options granted to the officers of the Company on September 28,
1999 to purchase 500,000 shares of the Company's common stock will be
cancelled. The outside directors of the Company believe that the granting of
these options will help to retain the services of the officers of the Company
who are in a position to make a material contribution to the successful
operations of the Company's business; (ii) motivate such persons, by means of
performance-related incentives, to achieve the Company's business goals; and
(iii) enable such persons to participate in the long-term growth and financial
success of the Company by providing them with an opportunity to purchase stock
of the Company.
The following table sets forth information, to the extent determinable,
concerning the allocation of the increase sought pursuant to Proposal 2 in the
authorized number of shares of the Company's Common Stock issuable upon
exercise of the options granted under the 1995 Plan, and the value of such
increase to each of the following groups: (i) each of the executive officers
named in the Summary Compensations Table on page 12; (ii) all current
executive officers as a group; (iii) all current directors who are not
executive officers as a group; and (iv) all employees, including all current
officers who are not executive officers, as a group.
Value of Unexercised Securities
In-The-Money Underlying
Name Options($)(1) Options(#)(2)
- ------------------------ -------------------- -------------
L. David Sikes $-- 195,000(3)
Greg B. Jones -- 95,000(3)
Richard L. Mohr -- 95,000(3)
Craig W. Rhodine -- 70,000(3)
Donald C. Carrigan -- 45,000(3)
Executive Officers as a Group -- 500,000(3)
Non-Executive Director Group -- --
Non-Executive Officer Employee Group -- --
- ------------------------
Page 23
<PAGE>
(1) Dollar value represents the difference between market value of the
underlying Common Stock and the exercise price of the options. The
market value of the underlying Common Stock is based upon the October 22,
1999 closing price of the Company's Common Stock as reported on The
Nasdaq Stock Market which was $2.063 per share.
(2) Option grants are subject to shareholder approval of the increase in the
number of authorized shares issuable under the 1995 Plan as described in
Proposal 2.
(3) Option grants are subject to vesting with vesting occurring in two equal
installments commencing on March 31, 2000.
AT THE ANNUAL MEETING, THE STOCKHOLDERS WILL BE REQUESTED TO CONSIDER AND
APPROVE THE AMENDMENT TO THE 1995 PLAN. THE AFFIRMITIVE VOTE OF A MAJORITY
OF THE SHARES OF THE COMPANY'S COMMON STOCK PRESENT OR REPRESENTED AND
ENTITLED TO VOTE AT THE ANNUAL MEETING WILL BE REQUIRED TO APPROVE THE
AMENDMENT TO THE 1995 PLAN. THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE FOR APPROVAL OF THE AMENDMENT TO THE 1995 PLAN.
Future grants under the 1995 Plan, in addition to those already made, will be
made at the discretion of the Board of Directors of the Company.
A summary of the principal provisions of the 1995 Plan is set forth below and
is qualified in its entirety by reference to the 1995 Plan. A copy of the
1995 Plan is available from the Company's Secretary upon request.
SUMMARY OF THE 1995 PLAN
If the September 28, 1999 amendment adding 1,200,000 shares is approved by the
Company's stockholders, a total of 1,800,000 shares of Common Stock will be
reserved for issuance to eligible participants pursuant to the 1995 Plan and
there will be an increase in the maximum number of shares that may be awarded
as options under the Plan during any calendar year to any optionee from
100,000 to 300,000 shares.
PURPOSE. The purposes of the 1995 Plan are to (i) attract and retain the
services of selected key employees of the Company who are in a position to
make a material contribution to the successful operations of the Company's
business; (ii) motivate such persons, by means of performance-related
incentives, to achieve the Company's business goals; and (iii) enable such
persons to participate in the long-term growth and financial success of the
Company by providing them with an opportunity to purchase stock of the
Company.
ADMINISTRATION. The 1995 Plan is administered by the Board of Directors
or, upon appointment by the Board, by a committee composed of two or more
board members. The interpretation and construction of any provision of the
1995 Plan is within the sole discretion of the members of the Board or its
committee, whose determination is final and binding.
Page 24
<PAGE>
ELIGIBILITY. The 1995 Plan provides that nonstatutory stock options and
incentive stock options may be granted to employees of the Company and any
parent or subsidiary of the Company (including officers and directors who are
also employees), as well as to non-employee directors of and consultants to
the Company and any parent or subsidiary of the Company. As administrator of
the 1995 Plan, the Board of Directors selects the optionees and determines the
type of option (i.e., incentive or nonstatutory) and the number of shares to
be subject to each option. In making such determination, there is taken into
account a number of factors, including an employee's position and
responsibilities, individual job performance, previous stock options grants
(if any), length of service to the Company, and other relevant factors. As of
October 1, 1999, approximately 124 persons were eligible to receive options
and 131 optionees were holding options under the 1995 Plan.
TERMS OF OPTIONS. Options granted under the 1995 Plan may be either
"incentive stock options" as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or nonstatutory stock options. Each
option is evidenced by a written stock option agreement between the Company
and the person to whom such option is granted and is subject to the following
additional terms and conditions:
(a) NUMBER OF SHARES: The aggregate fair market value (determined as of
the grant date) of the stock for which an employee may be granted
incentive stock options that first become exercisable during any one
calendar year under all the Company's plans may not exceed $100,000.
In addition, the maximum number of shares which may be awarded as
options under the 1995 Plan during any calendar year to any one
optionee shall not exceed 100,000 shares.
(b) EXERCISE OF THE OPTION: The optionee must earn the right to
exercise the option by continuing to work for the Company. Options
granted under the 1995 Plan will become exercisable at such times
and in such cumulative installments as the Board of Directors or its
committee determines subject to earlier termination of the option
upon termination of the optionees's employment for any reason. The
form of payment for shares to be issued upon the exercise of any
option may, in the discretion of the Board of Directors or its
committee, consist of cash, check, a promissory note, an exchange of
shares of Common Stock, a combination thereof or such other
consideration as is determined by the Board of Directors or its
committee.
(c) EXERCISE PRICE: The exercise price per share for the shares to be
issued pursuant to the exercise of an option is determined by the
Board of Directors or its Committee and may not be less than 100% of
the fair market value of the Common Stock on the grant date with
respect to incentive stock options and 95% of the fair market value
of the Common Stock on the grant date with respect to nonstatutory
options. The fair market value of the Common Stock on the date of
an option grant will be equal to the closing price of the Common
Stock on the date of the option grant. On October 22, 1999, the
closing price of the Company's Common Stock on The Nasdaq Stock
Market was $2.063 per share.
Page 25
<PAGE>
(d) TERMINATION OF EMPLOYMENT: If the optionee's employment with the
Company is terminated for any reason, other than death, total and
permanent disability or termination "for cause" (as defined in the
1995 Plan), the option may be exercised within 90 days (or, in the
case of a nonstatutory stock option, such other period of time as is
determined by the Board of Directors or its committee at the time of
granting the option or during the term of the option) after such
termination as to all or part of the shares as to which the optionee
was entitled to exercise the option at the time of termination. If
the optionee's employment with the Company is terminated for cause,
his or her options may be exercised within 30 days after such
termination to the extent such options are vested and not exercised
as of such date.
(e) DEATH OR DISABILITY: If an optionee should die or become
permanently and totally disabled while employed by the Company, the
options granted to him or her may be exercised at any time within
one year after such death or disability, but only to the extent the
optionee was entitled to exercise the options at the date of his or
her termination of employment due to such death or disability.
(f) EXPIRATION OF OPTIONS: Options may not have a term greater than ten
years from the grant date for an incentive stock option or ten years
plus one day from the grant date for a nonstatutory stock option.
No option may be exercised after its expiration. Incentive stock
options granted to an optionee who at the time of such grant owns
stock possessing more than 10% of the voting power of the stock of
the Company may not have a term greater than five years from the
grant date.
(g) NONTRANSFERABILITY OF OPTIONS: An option is nontransferable by the
optionee, other than by will or by the laws of descent and
distribution or transfers between spouses incident to a divorce, and
is exercisable only by the optionee or his or her legal guardian
during the lifetime of the optionee or, in the event of death of the
optionee, by the estate of the optionee or by a person who acquires
the rights to exercise the option by bequest or inheritance.
(h) OTHER PROVISIONS: The option agreement may contain such other
terms, provisions and conditions not inconsistent with the 1995 Plan
as may be determined by the Board of Directors or its committee.
Page 26
<PAGE>
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that a change, such
as a stock split or stock dividend, is made in the Company's capitalization
which affects the stock for which options are exercisable under the 1995 Plan,
appropriate adjustment will be made in the exercise price of and the number of
shares covered by outstanding options and in the number of shares available
for issuance under the 1995 Plan. In the event of a dissolution or
liquidation of the Company, a sale of all or substantially all of the assets
of the Company, or the merger or consolidation of the Company with or into
another corporation as a result of which the Company is not the surviving and
controlling corporation, outstanding options will be assumed by the successor
corporation or the Board of Directors will declare that any option will
terminate as of a date fixed by the Board which is at least 30 days after
notice thereof is given to optionees and permit each optionee to exercise his
or her options as to all or any portion of the shares covered by such options,
including shares as to which the options would not otherwise be exercisable.
AMENDMENT AND TERMINATION. The Board of Directors or its committee may amend
or terminate the 1995 Plan at any time or from time to time without the
approval of the Company's stockholders; provided, however, that approval of
the holders of voting shares represented or present and entitled to vote is
required for any amendment to the 1995 Plan which would: (a) materially
increase the number of shares which may be issued thereunder other than in
connection with an adjustment upon changes in capitalization; (b) materially
change the designation or the class of person eligible to participate in the
1995 Plan; (c) remove the administration of the 1995 Plan from the Board of
Directors or its committee; (d) extend the term of the 1995 Plan beyond its
initial ten-year term; (e) materially increase the benefits to participants
under the 1995 Plan. In any event, the 1995 Plan will terminate on the tenth
anniversary of its approval by the stockholders of the Company provided that
any options then outstanding will remain outstanding until they expire by
their terms.
TAX INFORMATION. The federal tax consequences of options are complex and
subject to change. The following discussion is only a brief summary of the
general federal income tax rules currently in effect which are applicable to
stock options. A taxpayer's particular situation may be such that some
variation of the general rules may apply. This summary does not cover the
state, local or foreign tax consequences of the grant or exercise of options
under the 1995 Plan or the disposition of shares acquired upon exercise of
such options or federal estate tax or state estate, inheritance or death
taxes.
INCENTIVE STOCK OPTIONS
If an option granted under the 1995 Plan is treated as an "incentive stock
option" as defined in Section 422 of the Code, then the optionee will not
recognize any income for regular income tax purposes upon either the grant or
the exercise of the option and the Company will not be allowed a deduction for
federal tax purposes. Upon a sale of the shares, the tax treatment to the
optionee and the Company will depend primarily upon whether the optionee has
met certain holding period requirements at the time of sale. In addition, as
discussed below, the exercise of an incentive stock option may subject the
optionee to alternative minimum tax liability in the year of exercise.
Page 27
<PAGE>
If an optionee exercises an incentive stock option and does not dispose of the
shares received within two years of the date of the grant of such option and
within one year after the exercise of the option, whichever period ends later,
any gain realized upon disposition will be characterized as long-term capital
gain, and any loss will be long-term capital loss. In either such case, the
Company will not be entitled to a federal income tax deduction.
If the optionee disposes of the shares either within two years after the date
the option is granted or within one year after the exercise of the option,
such disposition will be treated as a disqualifying disposition and an amount
equal to the lesser of (1) the fair market value of the shares on the date of
exercise less the purchase price or (2) the amount realized on the disposition
less the purchase price will be taxed as ordinary income in the taxable year
in which the disposition occurs. Any such ordinary income will increase the
optionee's tax basis for purposes of determining gain or loss on the sale or
exchange of such shares. The excess, if any, of the amount realized over the
fair market value of the shares at the time of the exercise of the option will
be treated as short-term or long-term capital gains, as the case may be, and
any loss realized upon the disposition will be treated as a capital loss. An
optionee will be generally considered to have disposed of shares if he or she
sells, exchanges, makes a gift or transfers legal title to such shares (except
by pledge, in certain non-taxable exchanges, a transfer in insolvency
proceedings, incident to a divorce, or upon death). If the amount realized is
less than the purchase price, generally the optionee will not recognize
income.
The exercise of an incentive stock option may subject an optionee to
alternative minimum tax liability in the year of exercise because the excess
of the fair market value of the shares at the time an incentive stock option
is exercised over the option price is an adjustment in determining an
optionees's alternative minimum taxable income for such year. Consequently,
an optionee may be obligated to pay alternative minimum tax in the year he or
she exercises an incentive stock option. If such a disqualifying disposition
occurs in the same year as an option is exercised, the amount of ordinary
income resulting from such disposition may offset any adjustment of
alternative minimum taxable income for the year of exercise. In the case of a
disqualifying disposition which occurs after the year of exercise, an
individual would be required to recognize an adjustment of alternative minimum
taxable income in the year of exercise and ordinary income in the year of such
disqualifying disposition in an amount determined under the rules described
above. An optionee's alternative minimum tax liability is affected by the
availability of a special credit, a basis adjustment and other complex rules.
Optionees are urged to consult their tax advisors concerning the applicability
of the alternative minimum tax to their own circumstances.
In general, there will be no federal tax consequences to the Company upon the
grant, exercise or termination of an incentive stock option. However, in the
event an optionee sells or disposes of stock received upon the exercise of an
incentive stock option prior to satisfying the two-year and one-year holding
periods described above, the Company will be entitled to a deduction for
federal income tax purposes in an amount equal to the ordinary income, if any,
recognized by the optionee upon disposition of the shares.
Page 28
<PAGE>
NONSTATUTORY STOCK OPTIONS
Nonstatutory stock options granted under the 1995 Plan do not qualify as
"incentive stock options" and, accordingly, do not qualify for any special tax
benefits to the optionee. An optionee will not recognize any income at the
time he or she is granted a nonstatutory option. However, upon its exercise,
the optionee will generally recognize ordinary income for federal income tax
purposes measured by the excess of the then fair market value of the shares
over the option price. The income realized by the optionee will be subject to
income tax withholding by the company out of the compensation paid to the
optionee. If such earnings are insufficient to pay the withholding tax, the
optionee will be required to make a direct payment to the Company to cover the
withholding tax liability.
Upon a sale of any shares acquired pursuant to the exercise of a non-statutory
stock option, the difference between the sale price and the optionee's basis
in the shares will be treated as a long-term or short-term capital gain or
loss, as the case may be. The optionee's basis for determination of such gain
or loss will ordinarily be the sum of the amount paid for such shares plus any
ordinary income recognized as a result of the exercise of such option.
In general, there will be no federal tax consequences to the Company upon the
grant or termination of a nonstatutory stock option or the sale or disposition
of the shares acquired upon exercise of a nonstatutory stock option. However,
upon the exercise of a nonstatutory stock option, the Company will be entitled
to a deduction to the extent and in the year that ordinary income from the
exercise of the option is recognized by the optionee, provided the Company has
satisfied its withholding obligations under the Code.
PROPOSAL 3 - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent
auditors, to audit the Company's consolidated financial statements for the
year ending December 31, 1999. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting, will have an opportunity to make a statement if he or she desires to
do so and is expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITORS NAMED ABOVE.
OTHER MATTERS
The Company currently knows of no matters to be submitted at the Annual
Meeting other than those described herein. If any other matters properly come
before the Annual Meeting, it is the intention of the persons named on the
enclosed proxy card to vote the shares they represent as the Board of
Directors may recommend.
Page 29
<PAGE>
The financial statements, supplementary financial information, and
management's discussion and analysis of financial condition and results of
operations included in the Company's Annual Report to Stockholders enclosed
with this Proxy Statement and in the Company's Annual Report on Form 10-K for
the year ended December 31, 1998, as filed with the Securities and Exchange
Commission and as subsequently amended, are hereby incorporated by
reference herein.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION WILL
BE PROVIDED TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE
CORPORATE SECRETARY, RAMTRON INTERNATIONAL CORPORATION, 1850 RAMTRON
DRIVE, COLORADO SPRINGS, COLORADO 80921.
Page 30
<PAGE>
PROXY PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
RAMTRON INTERNATIONAL CORPORATION
1999 Annual Meeting of Stockholders
The undersigned stockholder(s) of Ramtron International Corporation, a
Delaware corporation (the "Company"), hereby acknowledges receipt of the
Notice of Annual Meeting of Stockholders and Proxy Statement, each dated
November 15, 1999, and hereby appoints L. David Sikes and Greg B. Jones, 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 Annual Meeting of Stockholders of the Company to be held
December 22, 1999, at 10:30 a.m., Mountain Time, at the Hilton Garden Inn,
1810 Briargate Parkway, Colorado Springs, Colorado 80920, and at any
adjournment(s) thereof, and to vote all shares of Common Stock to which the
undersigned would be entitled, if then and there personally present, on the
matters set forth on reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR PROPOSALS 1, 2 AND 3 AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COMES BEFORE THE MEETING.
DO NOT FOLD, STAPLE OR MUTILATE.
(To be Signed on Reverse Side)
SEE REVERSE SIDE
Page 31
<PAGE>
RAMTRON INTERNATIONAL CORPORATION
PLEASE MARK VOTES AS IN THIS EXAMPLE USING DARK INK ONLY.
( X )
1. ELECTION OF DIRECTORS:
Nominees: L. David Sikes; Greg B. Jones; William G. Howard; Eric A. Balzer;
Albert J. Hugo-Martinez
FOR WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
( ) ( )
FOR, except vote withheld from the following nominee(s):
( )------------------------------------------------------------------
List Nominees(s)
2. APPROVAL OF AN AMENDMENT TO THE COMPANY'S 1995 STOCK OPTION PLAN:
To amend the Company's 1995 Stock Option Plan to increase the number of
shares available for grant under such plan by 1,200,000 shares to a cumulative
total of 1,800,000 and to increase the maximum number of shares that may be
awarded as options under the Plan during any calendar year to any optionee by
200,000 shares.
FOR AGAINST ABSTAIN
( ) ( ) ( )
3. APPOINTMENT OF INDEPENDENT AUDITORS:
To ratify the appointment of Arthur Andersen LLP as independent auditors of
the Company for the fiscal year ending December 31, 1999, as described in the
Proxy Statement.
FOR AGAINST ABSTAIN
( ) ( ) ( )
OTHER BUSINESS: In their discretion, the Proxies are authorized to vote
upon such other business as may properly come before the meeting or any
adjournment(s) thereof.
Any one of such attorneys-in-fact or substitutes as shall be present and shall
act at said meeting or any adjournment(s) thereof shall have and may exercise
all powers of said attorney-in-fact hereunder.
Dated 1999
---------------------
Signature(s)
------------------------------------------------------------------
(This Proxy should be marked, dated and signed by the stockholder(s) exactly
as his or her name appears hereon and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign.)
Page 32
<PAGE>
==============================================================================
By Order of the Board of Directors
/S/ Richard L. Mohr
------------------------
Richard L. Mohr
Secretary
Colorado Springs, Colorado
November 15, 1999
Page 33
<PAGE>
