<PAGE>
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ x ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ x ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Integrated Silicon Solution, Inc.
- --------------------------------------------------------------------------------
(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 Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
___________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_______________________________________________
(5) Total fee paid:
_________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:_________________________________________
(2) Form, Schedule or Registration Statement No.: _________________
(3) Filing Party:___________________________________________________
(4) Date Filed:_____________________________________________________
<PAGE>
[LOGO OF INTEGRATED SILICON SOLUTION, INC.]
INTEGRATED SILICON SOLUTION, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 4, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Integrated Silicon Solution, Inc., a Delaware corporation (the "Company"), will
be held on Tuesday, February 4, 1997 at 2:00 p.m., local time, at the Silicon
Valley Capital Club, Fairmont Plaza, 50 West San Fernando, 17th Floor, San Jose,
California, for the following purposes:
1. To elect six (6) directors to serve for the ensuing year and until
their successors are duly elected and qualified.
2. To ratify the appointment of Ernst & Young, LLP as independent auditors
for the Company for the 1997 fiscal year.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing matters are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on December 9, 1996
are entitled to vote at the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and return the enclosed proxy as promptly as possible in the postage-
prepaid envelope for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
In conjunction with this Notice the Company wishes to inform its
stockholders that effective January 1, 1997 its corporate mailing address will
be 2231 Lawson Lane, Santa Clara, California 95054-3311.
FOR THE BOARD OF DIRECTORS
/s/ Gary L. Fischer
Gary L. Fischer
Secretary
Sunnyvale, California
January 3, 1997
----------------------------------------------------------------------------
|IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED|
|TO COMPLETE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.|
----------------------------------------------------------------------------
<PAGE>
INTEGRATED SILICON SOLUTION, INC.
2231 LAWSON LANE
SANTA CLARA, CALIFORNIA 95054-3311
(408) 588-0800
PROXY STATEMENT FOR 1997
ANNUAL MEETING OF STOCKHOLDERS
The enclosed Proxy is solicited on behalf of the Board of Directors of
Integrated Silicon Solution, Inc. (the "Company") for use at the Annual Meeting
of Stockholders to be held on Tuesday, February 4, 1997 at 2:00 p.m., local
time, or at any adjournment 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 Silicon Valley Capital Club, Fairmont Plaza, 50 West San
Fernando, 17th Floor, San Jose, California.
These proxy solicitation materials were mailed on or about January 3, 1997
to all stockholders of record on December 9, 1996.
INFORMATION CONCERNING SOLICITATION AND VOTING
REVOCABILITY OF PROXIES
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 at the above address of the Company, written notice of revocation or a
duly executed proxy bearing a later date, or by attending the meeting and voting
in person.
VOTING AND SOLICITATION
Proxies properly executed, duly returned to the Company and not revoked,
will be voted in accordance with the specifications made. Where no
specifications are given, such proxies will be voted as the management of the
Company may propose. If any matter not described in this Proxy Statement is
properly presented for action at the meeting, the persons named in the enclosed
form of proxy will have discretionary authority to vote according to their best
judgment.
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the meeting. The required quorum for the transaction
of business at the Annual Meeting is a majority of the votes eligible to be cast
by holders of shares of Common Stock issued and outstanding on the Record Date.
Shares that are voted "FOR," "AGAINST," "WITHHELD" OR "ABSTAIN" are treated as
being present at the meeting for purposes of establishing a quorum and are also
treated as shares entitled to vote at the Annual Meeting (the "Votes Cast") with
respect to such matter. Abstentions will have the same effect as a vote against
a proposal. Broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but such non-
votes will not be counted for purposes of determining the number of Votes Cast
with respect to the particular proposal on which a broker has expressly not
voted. Thus, a broker non-vote will not effect the outcome of the voting on a
proposal.
-3-
<PAGE>
The cost of soliciting proxies will be borne by the Company. The Company
may also reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation materials to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers, and employees, without additional compensation, personally
or by telephone or telegram.
RECORD DATE AND PRINCIPAL SHARE OWNERSHIP
Stockholders of record at the close of business on December 9, 1996 are
entitled to notice of the meeting and to vote at the meeting. At the record
date, 17,619,739 shares of the Company's Common Stock, $.0001 par value per
share, were issued and outstanding and no shares of the Company's Preferred
Stock, $.0001 par value per share, were issued and outstanding. As of December
9, 1996, there was no entity known by the Company to be the beneficial owner of
more than 5% of the Company's Common Stock.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals by stockholders of the Company which such stockholders intend to
present at the Company's 1998 Annual Meeting of Stockholders must be received by
the Company no later than September 5, 1997 so that they may be considered for
inclusion in the proxy statement and form of proxy relating to that meeting.
PROPOSAL ONE:
ELECTION OF DIRECTORS
NOMINEES
A board of six (6) directors is to be elected at the Annual Meeting of
Stockholders. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's six (6) nominees named below, all of
whom are presently directors of the Company. If 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 the nominee designated by the present Board of
Directors to fill the vacancy. It is not expected that any nominees will be
unable or will decline to serve as a director. The term of office of each
person elected as a director will continue until the next Annual Meeting of
Stockholders or until the director's successor has been elected and qualified.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The six (6) candidates receiving the highest number of "FOR" votes shall be
elected to the Company's Board of Directors. An abstention will have the same
effect as a vote withheld for the election of directors, and, pursuant to
Delaware law, a broker non-vote will not be treated as voting in person or by
proxy on the proposal.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
NOMINEES LISTED BELOW:
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation
- --------------- --- -----------------------------------------------------------------------------
<S> <C> <C>
Jimmy S. M. Lee....... 41 Chief Executive Officer, President and Director of the Company
Kong-Yeu Han.......... 41 Executive Vice President, General Manager, Taiwan and Director of the Company
Diosdado P. Banatao... 50 Chairman of S3 Incorporated
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation
- --------------- --- -----------------------------------------------------------------------------
<S> <C> <C>
Hou-Teng Lee.......... 67 Chairman of Fu Sheng Industrial Co., Ltd.
Lip-Bu Tan............ 37 General Partner of Walden Group
Chun Win Wong......... 61 Vice Chairman, Wearnes Technology Pte., Ltd.
</TABLE>
Except as set forth below, each nominee has been engaged in his principal
occupation described above during the past five (5) years. There are no family
relationships among any directors or executive officers of the Company.
Jimmy S.M. Lee has served as Chief Executive Officer, President and a
director of the Company since he co-founded the Company in October 1988. He has
also served as a director of ISSI-Taiwan since September 1990. From 1985 to
1988, Mr. Jimmy Lee was engineering manager at International CMOS Technology,
Inc., a semiconductor company, and from 1983 to 1985, he was a design manager at
Signetics Corporation, a semiconductor company. Prior thereto, Mr. Jimmy Lee
was a project manager at Toshiba Semiconductor Corporation and a design engineer
at National Semiconductor Corporation. Mr. Jimmy Lee holds an M.S. degree in
electrical engineering from Texas Tech University and a B.S. degree in
electrical engineering from National Taiwan University.
Kong-Yeu Han has served as the Company's Executive Vice President since
April 1995, as General Manager, ISSI-Taiwan since September 1990 and as a
director of the Company since he co-founded the Company in October 1988. He has
also served as a director of ISSI-Taiwan since September 1990. From October
1988 to September 1990, he also served as Vice President, Engineering of the
Company. From 1985 to 1988, Mr. Han was design engineering manager at Vitelic
Corporation, a semiconductor company, and from 1984 to 1985 he was a staff
engineer at Signetics Corporation. From 1980 to 1984, Mr. Han was a senior
engineer at Advanced Micro Devices and its subsidiary Monolithic Memories, Inc.
("MMI"), both of which are semiconductor companies. Mr. Han holds an M.S.
degree in electrical engineering from the University of California, Santa
Barbara and a B.S. degree in electrical engineering from National Taiwan
University.
Diosdado P. Banatao has served as a director of the Company since July
1993. Since January 1992, he has been Chairman of the Board of S3 Incorporated,
a semiconductor company that he founded. He also served as President and Chief
Executive Officer of S3 from 1989 to January 1992. From 1984 to 1988, Mr.
Banatao held various executive level positions at Chips & Technologies, Inc., a
semiconductor company that he co-founded, most recently serving as Vice
President and General Manager of the Advanced Products Operation. Mr. Banatao
holds an M.S. degree in electrical engineering from the Mapua Institute of
Technology in the Philippines.
Hou-Teng Lee has served as a director of the Company since March 1993 and
as a director of ISSI-Taiwan since September 1990. Since 1953, he has been
Chairman of Fu Sheng Industrial Co., Ltd., the parent company of a diversified
business group engaged in the machinery, computer, and sporting goods industries
and in investment activities. He has also served as Chairman of Nelson
Precision Casting Co., Ltd., Top Business Machine Co., Ltd. and Getmore
Precision Co., Ltd., all of which are privately-held manufacturing companies,
since 1978, 1980 and 1987, respectively.
Lip-Bu Tan has served as a director of the Company since March 1990. Mr.
Tan was also a director of ISSI-Taiwan from July 1992 until July 1993. Mr. Tan
is a General Partner of the Walden Group of venture capital funds and serves as
President of International Venture Capital Investment Corporation ("IVCIC").
-5-
<PAGE>
Mr. Tan holds an M.S. degree in business administration from the University of
San Francisco and a B.S. degree from Nanyang University. He has also served as
a director of Creative Technology Ltd., a multimedia products company, Eltech
Electronics, Ltd., a contract manufacturing company, and Premisys
Communications, Inc., a telecommunications company, since 1990, 1988 and 1990,
respectively.
Chun Win Wong has served as a director of the Company since December 1994.
Mr. Wong was also a director of the Company from March 1991 to May 1994 and a
director of ISSI-Taiwan from March 1991 until July 1993. Since April 1994, Mr.
Wong has been Vice Chairman of Wearnes Technology Pte, Ltd. ("Wearnes") and
since 1983, he has been Group General Manager of Wearnes Brothers, Limited,
Singapore, the parent company of Wearnes, both of which are multinational
electronics companies. He was also Managing Director of Wearnes from 1983 to
1994. From 1970 to 1980, Mr. Wong was Chief Executive Officer of Industrial
Electronics and Engineers Limited, an electronics company which he founded. Mr.
Wong holds a degree in electrical and control engineering from the Royal
Melbourne Institution of Technology in Australia and a degree from the
Manchester College of Science & Technology in England. He has also served as a
director of Advanced Logic Research, Inc. since 1985.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock as of December 9, 1996 (i) by each director of the Company, (ii) by
the Company's Chief Executive Officer and the two other executive officers of
the Company during fiscal 1996 (such officers are collectively referred to as
the "Named Executive Officers"), and (iii) by all current directors and
executive officers as a group:
<TABLE>
<CAPTION>
Beneficial Ownership(1)
---------------------------------
<S> <C> <C>
Name Number Percent
- ------------------------------------------------------------------ -------- --------
Jimmy S.M. Lee(1)................................................. 475,335 2.7%
Kong-Yeu Han(2)................................................... 362,040 2.0
Gary L. Fischer(3)................................................ 75,460 *
Diosdado Banatao(4)............................................... 62,917 *
Hou-Teng Lee(5)................................................... 197,304 1.1
Lip-Bu Tan(6)..................................................... 188,490 1.1
Chun Win Wong(7).................................................. 692,170 3.9
All directors and executive officers as a group (7 persons) (8)... 2,053,716 11.4
</TABLE>
- -------------------------------
* Less than 1%
(1) Includes 96,156 shares issuable upon exercise of options which are
exercisable within 60 days of December 9, 1996. Also includes 51,000 shares
held by Mr. Lee as custodian for his minor children.
(2) Includes 102,916 shares issuable upon exercise of options which are
exercisable within 60 days of December 9, 1996. Also includes 40,000 shares
held by Mr. Han as custodian for his minor children.
(3) Includes 70,050 shares issuable upon exercise of options which are
exercisable within 60 days of December 9, 1996.
(4) Represents shares issuable upon exercise of options which are exercisable
within 60 days of December 9, 1996.
(5) Includes 7,917 shares issuable upon exercise of options held by Hou-Teng Lee
which are exercisable within 60 days of December 9, 1996, and 188,750 shares
held by Top Business Machine Co., Ltd. Mr. Hou-Teng Lee is Chairman of the
Board of such company and may be deemed to be a beneficial owner of such
shares.
(6) Includes 5,157 shares issuable upon exercise of options held by Mr. Tan
which are exercisable within 60 days of December 9, 1996, and 183,333 shares
held by IVCIC. Mr. Tan is President of IVCIC and may be deemed to be a
beneficial owner of shares held by such entity.
-6-
<PAGE>
(7) Includes 4,792 shares issuable upon exercise of options held by Mr. Wong
which are exercisable within 60 days of December 9, 1996. Also includes an
aggregate of 682,378 shares held by Wearnes Technology Pte. Ltd. and United
Wearnes Technology Pte. Ltd. Mr. Wong is the Managing Director of Wearnes
and may be deemed to be a beneficial owner of shares held by such entities.
(8) Includes 349,905 shares issuable upon the exercise of options which are
exercisable within 60 days of December 9, 1996. See notes 1 through 7
above.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held five meetings and took action by
written consent one time during fiscal 1996.
The Audit Committee, consisting of Messrs. Hou-Teng Lee and Wong, held
three meetings for fiscal 1996. The Audit Committee reviews the financial
statements and the internal financial reporting system and controls of the
Company with the Company's management and independent auditors, recommends
resolutions for any dispute between the Company's management and its auditors,
and reviews other matters relating to the relationship of the Company with its
auditors.
The Compensation Committee, consists of Messrs. Banatao, Tan and Wong, held
one meeting for fiscal 1996. The Compensation Committee makes recommendations
to the Board of Directors regarding the Company's executive compensation
policies and administers the Company's stock option plans and employee stock
purchase plan.
The Board of Directors currently has no nominating committee or committee
performing a similar function.
Each director, except for C. W. Wong, attended at least 75% of the
aggregate of (i) the total number of meetings of the Board of Directors held
during fiscal 1996 and (ii) the total number of meetings held by all committees
of the Board of Directors during fiscal 1996 on which such director served.
COMPENSATION OF DIRECTORS
Non-employee directors receive $1,000 for attendance at each Board meeting
and are reimbursed for all reasonable expenses incurred by them in attending
Board and Committee meetings. In addition, each non-employee director is
eligible to participate in the Company's 1995 Director Stock Option Plan (the
"Director Plan"). Under the Director Plan, each non-employee director is
automatically granted a nonstatutory option to purchase 2,500 shares of Common
Stock upon the date upon which such person first becomes a non-employee
director. In addition, each director who has been a non-employee director for
at least six (6) months will automatically receive a nonstatutory option to
purchase 2,500 shares of Common Stock upon such director's annual reelection to
the Board by the stockholders. Options granted under the Director Plan have a
term of ten (10) years unless terminated sooner upon termination of the
optionee's status as a director or otherwise pursuant to the Director Plan. The
exercise price of each option granted under the Director Plan is equal to the
fair market value of the Common Stock on the date of grant. Options granted
under the Director Plan are subject to cumulative monthly vesting over a twelve
(12) month period commencing at the date of grant. On February 15, 1996,
Messrs. Tan, Wong, Hou-Teng Lee and Banatao were each granted an option under
the Director Plan to purchase 2,500 shares of Common Stock at an exercise price
of $14.50 per share.
-7-
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of Messrs.
Banatao, Tan and Wong, none of whom has been or is an officer or an employee of
the Company. No member of the Compensation Committee or executive officer of
the Company has a relationship that would constitute an interlocking
relationship with executive officers or directors of another entity.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The members of the Compensation Committee of the board of Directors are
Messrs. Banatao, Tan and Wong. All such members are non-employee directors.
The Compensation Committee reviews compensation levels of senior management and
recommends salaries and other compensation paid to senior management to the
Company's Board of Directors for approval.
Compensation Philosophy. 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 interests through equity-based
plans, and to provide a compensation package that recognizes individual
contributions and Company performance. A meaningful portion of each executive's
total compensation is intended to be variable and to relate to and be contingent
upon Company performance. The Company's compensation philosophy is that cash
compensation must be competitive with other semiconductor companies of
comparable size in order to help motivate and retain existing staff and provide
a strong incentive to achieve specific Company goals. The Company believes that
the use of stock options as a long-term incentive links the interests of the
employees to that of the stockholders and motivates key employees to remain with
the Company to a degree that is critical to the Company's long-term success.
Components of Executive Compensation. The three key components of the
-------------------------------------
Company's senior management compensation program in fiscal 1996 were base
salary, short-term incentives, represented by the Company's bonus program, and
long-term incentives, represented by the Company's stock option program. The
Compensation Committee utilizes an industry recognized independent annual survey
of companies to determine whether the Company's senior management compensation
is within the competitive range. Base salary is set for each senior manager
commensurate with that person's level of responsibility and within the
parameters of companies of comparable size within the semiconductor industry.
The base salary for the Company's Chief Executive Officer has generally been
toward the low end of comparable companies in the annual survey utilized by the
Compensation Committee. Accordingly, Mr. Jimmy Lee's base salary was increased
by $7,000 to $257,000 in October 1996.
It is the policy of the Company, and the members of the Committee believe
that it is consistent with practices of comparable companies in the industry,
that bonus compensation should comprise a meaningful portion of the annual total
compensation of senior management. For fiscal 1996, the Board determined annual
incentive targets based on Company performance targets compared to fiscal 1995.
Due to the declining market conditions in fiscal 1996, no bonuses were approved
for the executive officers for fiscal 1996.
Stock options are generally granted when a senior manager joins the Company
and additional options may be granted from time-to-time thereafter. The options
granted to each senior manager vest over a four (4)year period. In addition to
the stock option program, senior managers are eligible to participate in the
Company's 1993 Employee Stock Purchase Plan.
-8-
<PAGE>
Other elements of executive compensation include participation in Company-
wide medical and dental benefits and the ability to defer compensation pursuant
to a 401 (k) plan, and a non-qualified deferred compensation program. The
Company does not match annual contributions under the 401 (k) plan at this time.
The Compensation Committee has considered the potential impact of Section
162(m) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Section"). The Section disallows a tax deduction for any
publicly-held corporation for individual compensation exceeding $1 million in
any taxable year for any of the Named Executive Officers, unless such
compensation is performance-based. Since the cash compensation of each of the
Named Executive Officers is below the $1 million threshold and the Compensation
Committee believes that any options granted under the Company's 1989 Stock Plan
(the "Stock Plan") will meet the requirements of being performance-based, the
Compensation Committee believes that the Section will not reduce the tax
deduction available to the Company. The Company's policy is to qualify, to the
extent reasonable, its executive officers' compensation for deductibility under
applicable tax laws. However, the Compensation Committee believes that its
primary responsibility is to provide a compensation program that will attract,
retain and reward the executive talent necessary to the Company's success.
Consequently, the Compensation Committee recognizes that the loss of a tax
deduction could be necessary in some circumstances.
Mr. Jimmy Lee receives no other material compensation or benefits not
provided to all executive officers.
Compensation Committee of the Board of
--------------------------------------
Directors
---------
Diosdado P. Banatao
Lip-Bu Tan
Chun Win Wong
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young, LLP, independent
auditors, to audit the financial statements of the Company for the 1997 fiscal
year. This nomination is being presented to the stockholders for ratification
at the meeting. Ernst & Young, LLP has audited the Company's financial
statements since 1990. A representative of Ernst & Young, LLP is expected to be
present at the meeting, will have the opportunity to make a statement, and is
expected to be available to respond to appropriate questions.
VOTE REQUIRED; RECOMMENDATION OF BOARD OF DIRECTORS
The affirmative vote of a majority of the Votes Cast on the proposal at the
Annual Meeting is required to ratify the Board's selection. If the stockholders
reject the nomination, the Board will reconsider its selection.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE 1997 FISCAL YEAR.
-9-
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation received for services
rendered to the Company and the Company's subsidiaries in all capacities during
the last three fiscal years by (i) the Company's Chief Executive Officer and
(ii) the Company's two other Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation(1) Compensation
---------------------------------------------
Fiscal Other Annual Awards All Other
-------
Name and Principal Position Year Salary Bonus(2) Compensation(3) Options Compensation
- -------------------------------- ----- ------- -------- -------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jimmy S. M. Lee................ 1996 $248,205 -- -- 33,000 --
Chief Executive Officer and 1995 179,523 $200,712 -- 25,000 --
President 1994 141,166 41,166 3,052 -- --
Kong-Yeu Han................... 1996 219,229 -- 50,307 30,000 --
Executive Vice President and 1995 167,693 184,128 51,418 25,000 --
General Manager, Taiwan 1994 123,835 42,316 4,000 -- $10,000(4)
Gary L. Fischer................ 1996 170,000 -- -- 12,000 --
Executive Vice President and 1995 142,500 120,000 -- 25,000 --
Chief Financial Officer 1994 120,062 18,000 -- 10,000 --
</TABLE>
- ------------------------------------
(1) Excludes perquisites and other personal benefits which for each Named
Executive Officer did not exceed the lesser of $50,000 or 10% of the total
annual salary and bonus for such officer.
(2) Includes bonus awards earned for performance in the fiscal year noted even
though such amounts are payable in subsequent years. Excludes bonus awards
paid in the fiscal year noted but earned in prior years.
(3) For Mr. Jimmy Lee includes $3,052 for accrued but unused vacation in fiscal
1994 and, for Mr. Han, in fiscal 1994, includes $4,000 for housing
reimbursement and, in fiscal 1996 and 1995, includes $50,307 and $51,418,
respectively, for housing allowance and rent allowance in connection with
Mr. Han's relocation to Taiwan.
(4) Represents payment for expenses related to Mr. Han's relocation to Taiwan
in fiscal 1994.
OPTION GRANTS IN FISCAL YEAR 1996
The following table sets forth certain information concerning grants of
stock options to each of the Named Executive Officers during the fiscal year
ended September 30, 1996.
<TABLE>
<CAPTION>
Individual Grants(1)
-------------------------------------------------------------
% of Total Potential Realizable
Options Value at Annual Rates
Granted to of Stock Price
Employees Exercise or Appreciation
Options in Fiscal Base Price Expiration for Option Term(2)
-------------------------
Name Granted Year Per Share Date 5% 10%
- ------------------ ------- --------- ---------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jimmy S.M. Lee.... 33,000 2.2% $26.00 10/13/05 $539,592 $1,367,431
Kong-Yeu Han...... 30,000 2.0 26.00 10/13/05 490,538 1,243,119
Gary L. Fischer... 12,000 0.8 26.00 10/13/05 196,215 497,248
</TABLE>
-10-
<PAGE>
- -------------------------------------
(1) Each of these options was granted pursuant to the Stock Plan and is subject
to the terms of such plan. These options were granted at an exercise price
equal to the fair market value of the Company's Common Stock as determined
by the Board of Directors of the Company on the date of grant and, as long
as the optionee maintains continuous employment with the Company, vest over
a four year period at the rate of one-fourth of the shares on the first
anniversary of the date of grant and 1/48th of the remaining shares per
month thereafter. On December 6, 1996, each of these options was exchanged
for an option with an exercise price of $10.125 per share.
(2) In accordance with the rules of the Securities and Exchange Commission (the
"Commission"), shown are the hypothetical gains or "option spreads" that
would exist for the respective options. These gains are based on assumed
rates of annual compounded stock price appreciation of 5% and 10% from the
date the option was granted over the full option term. The 5% and 10%
assumed rates of appreciation are mandated by the rules of the Commission
and do not represent the Company's estimate or projection of future
increases in the price of its Common Stock.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning options
exercised by the Named Executive Officers in fiscal 1996, and exercisable and
unexercisable stock options held by each of the Named Executive Officers as of
September 30, 1996.
<TABLE>
<CAPTION>
Fiscal Year-End Option Values
-------------------------------------------------------------------
Number of Unexercised Value of Unexercised
Shares Options In-the-Money Options
Acquired on Value at Fiscal Year End at Fiscal Year End(1)
------------------------------ ---------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ---------- -------- ------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jimmy S.M. Lee.... -- -- 74,843 55,657 $670,492 --
Kong-Yeu Han...... -- -- 83,647 51,353 721,736 --
Gary L. Fischer... 10,750 $131,437 56,362 41,688 346,808 --
</TABLE>
- ---------------------------------
(1) The value of an "in the money" option represents the difference between the
exercise price of such option and the fair market value of the Company's
Common Stock at September 30, 1996, multiplied by the total number of
shares subject to the option.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of copies of filings under Section 16 (a) of the
Securities Exchange Act of 1934, as amended, received by it, or written
representations from certain reporting persons, the Company believes that during
fiscal 1996, all Section 16 filing requirements were met.
-11-
<PAGE>
COMPARISON OF TOTAL CUMULATIVE STOCKHOLDER RETURN
The following graph sets forth the Company's total cumulative stockholder
return compared to the Standard & Poor's 500 Index and the Standard & Poor's
Semiconductor Index for the period February 3, 1995 (the date of the Company's
initial public offering) through September 30, 1996. Total stockholder return
assumes $100 invested at the beginning of the period in the Common Stock of the
Company, the stocks represented in the Standard & Poor's 500 Index and the
stocks represented in the Standard & Poor's Semiconductor Index, respectively.
Total return also assumes reinvestment of dividends; the Company has paid no
dividends on its Common Stock.
Historical stock price performance should not be relied upon as indicative
of future stock price performance.
<TABLE>
<CAPTION>
Feb-95 Mar-95 Apr-95 May-95 Jun-95 Jul-95 Aug-95 Sep-95 Oct-95 Nov-95 Dec-95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ISSI 100.00 122.81 135.09 142.54 183.33 242.11 174.56 130.70 109.87 84.21 58.77
S&P 500 100.00 103.38 106.27 110.13 113.22 116.82 116.78 122.19 121.58 126.57 129.52
S&P Semi. Index 100.00 108.81 129.09 138.98 159.18 168.74 168.79 170.51 172.92 147.68 131.50
</TABLE>
<TABLE>
<CAPTION>
Jan-96 Feb-96 Mar-96 Apr-96 May-96 Jun-96 Jul-96 Aug-96 Sep-96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ISSI 57.46 47.37 46.59 58.33 52.41 40.35 35.97 31.14 40.13
S&P 500 133.75 134.67 136.46 138.29 141.45 142.56 136.05 138.61 146.95
S&P Semi. Index 124.11 129.06 125.47 147.83 156.24 146.63 142.08 153.31 183.13
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
Since fiscal 1993, the Company has utilized Taicera Electronics
Corporation, Ltd. ("Taicera"), a Taiwan company, for a portion of its assembly
work. Taicera is an affiliate of the Fu Sheng Industrial Group, whose chairman
is Hou-Teng Lee. Mr. Hou-Teng Lee is a director of the Company. The total
amount of services provided to the Company by Taicera during fiscal 1996 was
approximately $1,342,000.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual
Meeting. If any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares they
represent as the Board of Directors of the Company may recommend.
THE BOARD OF DIRECTORS
Sunnyvale, California
January 3, 1997
<PAGE>
PROXY
INTEGRATED SILICON SOLUTION, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JIMMY S.M. LEE and GARY FISCHER, jointly
and severally, proxies, with full power of substitution, to vote all shares of
Common Stock of Integrated Silicon Solution, Inc., a Delaware corporation, which
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held at the Silicon Valley Capital Club, Fairmont Plaza, 50 West San Fernando,
17th floor, San Jose, California, on February 4, 1997, at 2:00 p.m., local time,
or any adjournment thereof. The proxies are being directed to vote as specified
on the reverse side hereof or, if no specification is made, FOR the election of
directors, FOR the appointment of Ernst & Young, LLP as independent auditors and
in accordance with their discretion on such other matters that may properly come
before the meeting.
The directors recommend a FOR vote on each item.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
Please mark [X]
your vote -
as this
FOR WITHHOLD
1. ELECTION OF DIRECTORS all nominees AUTHORITY
listed (except to vote for -
as withheld) nominees listed
(Instruction: To withhold authority to vote
for any individual nominee, strike that
nominee's name below)
[_] [_]
NOMINEES: Jimmy S.M. Lee Kong-Yeu Han
Diosdado P. Banatao Hou-Teng Lee
Lip-Bu Tan Chun Win Wing
FOR AGAINST ABSTAIN
2. Proposal to ratify the appointment of
Ernst & Young LLP as independant [_] [_] [_]
auditors for the 1997 fiscal year.
I plan to attend the meeting: YES NO
[_] [_]
SIGNATURE(S) DATE
------------------------------------------ -------------------
(Signature(s) must be exactly as name(s) appear on this Proxy. If
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such, and if signing for a corporation,
please give your title. When shares are in the names of more than
one person, each should sign this Proxy.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
