<PAGE>
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
CYRIX 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 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>
CYRIX CORPORATION
2703 NORTH CENTRAL EXPRESSWAY
RICHARDSON, TEXAS 75080
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, APRIL 17, 1997
To the Stockholders:
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of Cyrix
Corporation (the "Company") will be held on Thursday, April 17, 1997, at 2:00
p.m. local time at the University of Texas at Dallas in the Conference Center
located at 2601 Floyd Drive, Richardson, Texas 75080, for the following
purposes:
(1) To elect four directors to serve until the 1998 Annual Meeting of
Stockholders or until their respective successors have been elected
and qualified;
(2) To approve the amendment to the 1988 Incentive Stock Plan that will
increase the number of shares of Common Stock available for grant
under the plan by 900,000 shares;
(3) To ratify the selection of Ernst & Young LLP as independent auditors
of the Company;
(4) To transact such other business as may properly come before this
meeting or any adjournments thereof.
The foregoing items of business are more fully described in the proxy
statement delivered with this notice.
The close of business on March 10, 1997, has been fixed as the record
date for the determination of stockholders entitled to receive notice of and
to vote at the Annual Meeting or any adjournments thereof.
By Order of the Board of Directors,
/s/ JAMES W. SWENT, III
JAMES W. SWENT, III
SECRETARY
Richardson, Texas
March 19, 1997
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED
TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
THE POSTAGE PAID ENVELOPE ENCLOSED. RETURNING YOUR PROXY WILL HELP THE
COMPANY ASSURE A QUORUM AND AVOID THE ADDITIONAL EXPENSE OF DUPLICATE PROXY
SOLICITATIONS. ANY STOCKHOLDER ATTENDING THE MEETING MAY VOTE IN PERSON EVEN
IF HE OR SHE HAS RETURNED THE PROXY.
- --------------------------------------------------------------------------------
<PAGE>
CYRIX CORPORATION
2703 NORTH CENTRAL EXPRESSWAY
RICHARDSON, TEXAS 75080
(972) 968-8388
-----------------
PROXY STATEMENT
-----------------
SOLICITATION AND REVOCABILITY OF PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors
of Cyrix Corporation (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Thursday, April 17, 1997,
at 2:00 p.m. local time at the University of Texas at Dallas in the
Conference Center located at 2601 Floyd Drive, Richardson, Texas 75080 or at
any adjournments thereof. The solicitation of proxies by the Board of
Directors of the Company (the "Board of Directors") will be conducted
primarily by mail. Officers, directors and employees of the Company may
solicit proxies personally or by telephone, telegram or other forms of wire
or facsimile communication. The costs of the solicitation will be borne by
the Company. The Company will reimburse brokers, custodians, nominees and
fiduciaries for reasonable expenses incurred by them in forwarding proxy
material to beneficial owners of the Company's common stock, par value $.004
per share (the "Common Stock"). This proxy statement and the form of proxy
were first mailed to stockholders of the Company on or about March 19, 1997.
The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy (a) by the execution and submission
of a revised proxy, (b) by written notice to the Secretary of the Company or
(c) by voting in person at the Annual Meeting. In the absence of such
revocation, shares represented by the proxies will be voted at the Annual
Meeting.
Presence in person or by proxy of a majority of the shares of Common Stock
outstanding on the record date is required for a quorum. At the close of
business on March 10, 1997, the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting, there
were outstanding 19,623,737 shares of Common Stock entitled to vote at the
Annual Meeting. Each share is entitled to one vote for each proposal.
Stockholders may not cumulate their votes. The Common Stock is the only
class of outstanding securities of the Company entitled to notice of and to
vote at the Annual Meeting. The closing price of the Common Stock on the
Record Date was $25.125 per share, as reported by the Nasdaq National Market.
The Company's annual report to stockholders for the year ended December
29, 1996 ("fiscal 1996"), including financial statements, is being mailed
herewith to all stockholders entitled to vote at the Annual Meeting. The
annual report is not a part of the proxy solicitation material.
PRINCIPAL STOCKHOLDERS
To the knowledge of the management of the Company and based upon filings
with the Securities and Exchange Commission ("SEC") or representations from
such companies, there are no persons deemed to own beneficially more than 5%
of the outstanding Common Stock (including any "group" as that term is used
in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), as
of January 31, 1997.
1.
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ITEM 1. ELECTION OF DIRECTORS
Four directors will be elected at the Annual Meeting. All of the nominees
are presently directors of the Company. Directors elected will hold office
until the next annual meeting of the stockholders and until their successors
have been elected and qualified. Unless otherwise instructed in the proxy,
proxies will be voted for election of the nominees named below.
If a nominee becomes unable or unwilling to serve at the time of the
Annual Meeting, proxies will be voted for such person as designated by the
Board of Directors. However, management knows of no reason why any nominee
should be unable or unwilling to serve.
The following information regarding the names, ages and principal
occupations of the nominees for director, other directorships in certain
companies held by them and the length of continuous service as a director of
the Company is as reported by the respective nominees for director:
HARVEY B. CASH, age 58, has served as a Director of the Company since
March 1988 and as Chairman of the Board of Directors since April 1988. Mr.
Cash also serves as Chairman of the Company's Compensation Committee and also
serves on the Company's Audit Committee and Stock Committee. He has been a
general partner of InterWest Partners, a venture capital fund, since 1985.
Mr. Cash is also the managing general partner of the Berry Cash Southwest
Partnership, a venture capital fund, and serves on the Boards of Directors of
ProNet Inc., Aurora Electronics, Inc., BenchMarq Microelectronics, AMX
Corporation, Heritage Media Corporation and i2 Technologies. Mr. Cash was
employed by InteCom Corporation, a telecommunications company, as Vice
President of Business Strategy from 1982 to 1983. He was a co-founder of
Mostek Semiconductor Corporation ("Mostek"), a company that designed,
manufactured and marketed semiconductors and was acquired by United
Technologies, which subsequently sold it to SGS-Thomson Microelectronics,
Inc. ("SGS-Thomson"). Mr. Cash was a director of Mostek and served as
Executive Vice President with various marketing and engineering
responsibilities from 1969 to 1981. Mr. Cash was also employed by Texas
Instruments Incorporated ("TI") as a marketing manager from 1964 to 1969.
Mr. Cash has a B.S. in Electrical Engineering from Texas A&M University and
an MBA from Western Michigan University.
GERALD D. ROGERS, age 53, a co-founder of the Company, has served as a
Director of the Company since the Company's formation in February 1988. He
also served as President and Chief Executive Officer of the Company from
February 1988 until December 1996. From November 1987 to February 1988, Mr.
Rogers was involved in the organization of the Company. From March 1986 to
November 1987, he served as President, Chief Executive Officer and a Director
of Visual Information Technologies Incorporated ("VIT"), a computer company.
Prior to joining VIT, for 16 years Mr. Rogers held a variety of management
positions at TI, most recently serving as Vice President of the Semiconductor
Group and Manager of the Microprocessor Division. During his employment at
TI, Mr. Rogers was the named inventor on 12 patents granted to TI. He has a
B.S. in Computer Science from the University of Houston.
L.J. SEVIN, age 66, has served as a Director of the Company since March
1988 and serves on the Company's Compensation Committee and Stock Committee.
Mr. Sevin also serves as a director of Proteon, Inc. and BenchMarq
Microelectronics. In 1981, he co-founded Sevin Rosen Management Company, a
Texas corporation that manages Sevin Rosen Fund II L.P., a venture capital
fund. He is also an advisor to and limited partner in the venture capital
funds Sevin Rosen Fund III L.P. and Sevin Rosen Fund V L.P. Mr. Sevin is also
a general partner of SRB Associates II L.P., which is the general partner of
Sevin Rosen Fund II L.P. He served for nine years as the Chairman of the
Board and Chief Executive Officer of Mostek, of which he was a co-founder.
Prior to founding Mostek, Mr. Sevin was employed by TI in its Semiconductor
Division. He has a B.S. and an M.S. in Electrical Engineering from Louisiana
State University.
GARY A. STIMAC, age 45, was appointed as a Director of the Company in
September 1996 and currently serves on the Company's Audit Committee. Mr.
Stimac most recently served as Senior Vice President and General Manager of
the Systems Division of Compaq Computer Corporation until July 1996. He
joined Compaq in February 1982, was elected Vice President, Engineering in
January 1986, and Vice President of Systems Engineering in May 1987.
Previously, Mr. Stimac worked for TI for nine years. He has a B.S. in
Electrical Engineering from the Milwaukee School of Engineering.
2.
<PAGE>
The election of directors requires the affirmative vote of a plurality of
the shares of Common Stock present or represented by proxy and entitled to
vote at the Annual Meeting. Under Delaware law and the Company's Restated
Certificate of Incorporation and Bylaws, neither abstentions nor "broker
non-votes" have any legal effect. A broker non-vote occurs if a broker or
other nominee does not have discretionary authority and has not received
instructions with respect to a particular item. Proxies may not be voted for
a greater number of nominees for director than the number of nominees named.
The persons named in the accompanying proxy intend to vote for the
election of all directors unless instructed otherwise on the proxy.
DIRECTORS' MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held nine meetings during fiscal 1996. Each
director attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Directors held during the period in which he was a
director and (ii) the total number of meetings held by all committees on
which he served.
The Company has the following standing committees:
AUDIT COMMITTEE. Messrs. Cash and Stimac are the current members of the
Audit Committee. The Audit Committee met one time during fiscal year 1996.
At the time of the meeting, the members of the Audit Committee consisted of
Mr. Cash and Melvin Sharp. (Mr. Sharp served as a Director of the Company
from October 1991 until April 1996 and did not seek re-election.) The
Committee's principal functions are to recommend to the Board of Directors
for its approval and for ratification by the stockholders of the Company the
engagement of the independent auditors to serve the following year in
examining the accounts of the Company, to confirm the existence of effective
accounting and internal control systems and to monitor the effectiveness of
the audit.
COMPENSATION COMMITTEE. Messrs. Cash and Sevin serve on the Compensation
Committee, which met nine times during fiscal 1996. Its principal functions
are to study, advise and consult with the Company's management regarding the
compensation of officers and other key employees of the Company, to consider
and to act upon recommendations of management to grant stock options and
restricted stock and to otherwise administer the Company's 1988 Stock
Incentive Plan. Members of the Compensation Committee are not eligible to
participate in the plans or programs they administer.
STOCK COMMITTEE. Currently, the Stock Committee consists of the
Compensation Committee whose members are Messrs. Cash and Sevin. Formerly,
Mr. Rogers was the sole member of the Stock Committee which was formed in
1996. The Committee met seven times during fiscal year 1996. Its principal
functions are to advise and consult with the Company's management and to
grant stock options pursuant to the Company's 1988 Incentive Stock Plan with
respect to participants who are not subject to Section 16(b) ("Section
16(b)") of the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
COMPENSATION OF DIRECTORS
Each director who is not currently receiving compensation as an officer or
employee of the Company or any of its affiliates is entitled to be paid
$1,500 for each meeting attended. In addition, all non-employee directors of
the Company participate in the Non-Discretionary Non-Employee Directors Stock
Plan.
The Company also paid Mr. Stimac $4,500 in consulting fees for fiscal year
1996 in connection with various business activities.
3.
<PAGE>
ITEM 2. PROPOSAL TO APPROVE AMENDMENT TO THE 1988 INCENTIVE STOCK PLAN
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
GENERAL
The Company has used stock options as a key element of its overall
compensation program for employees of the Company. The Board of Directors
and the Compensation Committee believe that it is important to have
equity-based incentives available to attract and retain quality employees for
the Company. On January 16, 1997, the Board of Directors approved, subject
to stockholder approval, a proposal to amend the 1988 Incentive Stock Plan.
The following descriptions present summaries of (i) the 1988 Incentive Stock
Plan as it currently exists and (ii) the proposed amendment to the 1988
Incentive Stock Plan.
DESCRIPTION OF THE EXISTING 1988 INCENTIVE STOCK PLAN
On March 16, 1988, the Board of Directors of the Company adopted the 1988
Incentive Stock Plan, which was approved by the Company's stockholders on
March 16, 1988. As amended through the date hereof, an aggregate of up to
7,218,334 shares of Common Stock have been or may be issued upon the exercise
of stock purchase rights and options that have been or may be granted under
the 1988 Incentive Stock Plan. As of January 31, 1997, 4,320,257 shares had
been issued upon exercise of options and stock purchase rights granted under
the 1988 Incentive Stock Plan. As of such date, options to purchase a total
of 3,291,847 shares of Common Stock were outstanding, 1,072,115 shares had
been repurchased by the Company and made available for grant under such plan
and options for 678,345 shares remained available for issuance.
Approximately 390 individuals were eligible to participate in the 1988
Incentive Stock Plan as of January 31, 1997. The proceeds received by the
Company upon exercise of options and stock purchase rights increase the
Company's cash and equity balances.
Options granted under the 1988 Incentive Stock Plan may be (i) options
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) non-qualified
stock options which are not intended to qualify for incentive stock option
treatment, (iii) stock purchase rights and (iv) stock bonuses. Under the
1988 Incentive Stock Plan, incentive stock options may be granted to
employees (including officers and directors who are employees) of the Company
or a parent or subsidiary of the Company and non-qualified stock options,
stock purchase rights and stock bonuses may be granted to employees
(including officers and directors who are employees) consultants to and
non-employee directors of the Company or a parent or subsidiary of the
Company. As of January 31, 1997 no stock bonuses had been issued under this
Plan and the Compensation Committee of the Board of Directors currently has
no plans to issue stock bonuses.
The 1988 Incentive Stock Plan is administered by the Compensation
Committee of the Board of Directors with respect to participants who are
subject to Section 16(b). The Board of Directors has delegated the
administration of the 1988 Incentive Stock Plan with respect to participants
who are not subject to Section 16(b) to the Stock Committee (referred to
together with the Compensation Committee as the "Committee"). Subject to the
provisions of the 1988 Incentive Stock Plan, the Committee has authority to
determine all terms and provisions under which options, stock purchase rights
and stock bonuses are granted pursuant to the 1988 Incentive Stock Plan,
including (i) the number of shares subject to each option, stock purchase
right or stock bonus, (ii) when the option, stock purchase right or bonus
becomes exercisable, (iii) the exercise price and (iv) the duration of the
option, which cannot exceed 10 years (five years for incentive stock options
granted to holders of more than 10% of the outstanding Common Stock). The
Committee has the authority to determine the duration of the stock purchase
rights granted, which cannot exceed 90 days from the date on which the
Committee made the determination to grant the stock purchase right. The
Committee has discretion in connection with a merger, sale of assets,
dissolution or liquidation involving the Company to provide that outstanding
options shall be terminated or shall be assumed or otherwise continued or to
provide for the accelerated vesting of outstanding options. The acceleration
of options in the event of a merger or other similar event may be seen as an
anti-takeover provision and may have the effect of discouraging a proposal
for a merger, a takeover attempt or other efforts to gain control of the
Company. The Company has certain rights to repurchase shares issued under
the 1988 Incentive Stock Plan upon the voluntary or involuntary termination
of the grantee's employment pursuant to agreements between the Company and
grantee.
4.
<PAGE>
The aggregate fair market value (determined at the time of grant) of
shares issuable pursuant to incentive stock options which first become
exercisable in any calendar year by a participant in the 1988 Incentive Stock
Plan may not exceed $100,000. Incentive stock options, non-qualified stock
options and stock purchase rights granted under the 1988 Incentive Stock Plan
may not be granted at a price less than 100% of the fair market value of the
Common Stock on the date of grant (or 110% of the fair market value in the
case of incentive stock options or nonstatutory stock options granted to
participants in the 1988 Incentive Stock Plan holding 10% or more of the
voting stock of the Company).
An option, stock purchase right or stock bonus granted under the 1988
Incentive Stock Plan is not transferable by the option holder except by will
or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder. Options
may be exercised only while the option holder is in the employ of, or serving
as a consultant to, the Company or within one month after termination of
employment or the consulting arrangement (or such other period of time, not
exceeding three months as in the case of an Incentive Stock Option, as is
determined by the Board of Directors) to the extent such option was vested
and the option holder was entitled to exercise it at the time of termination.
If termination is due to death or disability, the option is exercisable for
a three-month period or six-month period, respectively, after any such
termination (or such other period of time, not exceeding 12 months, as
determined by the Board of Directors) to the extent such option was vested
and the option holder was entitled to exercise it. If death occurs within 30
days after termination, the option is exercisable for six months after the
death of the option holder.
Options, stock purchase rights and stock bonuses will vest at such times
and under such conditions as determined by the Committee, including
performance criteria with respect to the Company and/or the optionee, as
permitted under the 1988 Incentive Stock Plan. Generally, the Committee has
provided for a schedule pursuant to which options will vest within four years
of the date of grant.
TAX CONSEQUENCES
NON-QUALIFIED STOCK OPTIONS AND STOCK PURCHASE RIGHTS. As a general rule,
no federal income tax is imposed on the optionee upon the grant of a
non-qualified stock option such as those under the 1988 Incentive Stock Plan
and the Company is not entitled to a tax deduction by reason of such a grant.
Generally, upon the exercise of a non-qualified stock option, the optionee
will be treated as recognizing ordinary income in the year of exercise,
which, in the case of an option, is an amount equal to the excess of the fair
market value of the shares on the date of exercise over the option price.
Upon the exercise of a non-qualified stock option, the Company may claim a
deduction for compensation paid at the same time and in the same amount as
ordinary income is recognized to the optionee, assuming federal income tax
withholding requirements are satisfied. Upon a subsequent disposition of the
shares, the difference between the amount realized on the disposition and the
basis of the stock (exercise price plus any ordinary income recognized)
should qualify as long-term or short-term capital gain, depending on whether
the stock was held for more than one year prior to disposition. If the
shares purchased upon the exercise of an option are nontransferable and
subject to a substantial risk of forfeiture, then the taxable income realized
by the optionee, unless the optionee elects otherwise pursuant to Section
83(b) of the Code, and the Company's tax deduction should be deferred and
measured at the fair market value of the shares at the time the stock becomes
transferable or the risk of forfeiture lapses. The restriction imposed on
officers, directors and 10% stockholders by Section 16(b) of the Exchange Act
is such a transfer restriction during the period prescribed thereby. As a
general rule, tax treatment of stock purchase rights is consistent with that
of non-qualified stock options.
INCENTIVE STOCK OPTIONS. The incentive stock options are intended to
constitute "incentive stock options" within the meaning of Section 422(b) of
the Code. No federal income tax is imposed on the optionee upon the grant or
the exercise of an incentive stock option. However, the optionee must
generally include the difference between the exercise price and the fair
market value of the Common Stock on the date of exercise in alternative
minimum taxable income. If the optionee does not dispose of shares acquired
pursuant to the exercise within a two-year period beginning on the date the
option was granted or within a one-year period beginning on the date the
option was exercised (collectively, the "Holding Periods"), the Company would
not be entitled to any deduction for federal income tax purposes in
connection with the grant or exercise of the option or the disposition of the
shares so acquired. Upon disposition of the shares after the Holding
Periods, the difference between the amount realized and the exercise price
should constitute long-term capital gain or loss. If the Holding Periods are
not satisfied at
5.
<PAGE>
the time of sale, the optionee will be treated as having received, at the
time of disposition, ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the stock on the
date of exercise or the sale price of the stock. Any gain realized in excess
of the ordinary income recognized by the optionee would be treated as
short-term or long-term capital gain, depending on the holding period of the
shares. In such event, the Company may claim a deduction for compensation
paid at the same time and in the same amount as compensation is treated as
received by the optionee.
Under Section 162(m), as enacted by the Omnibus Budget Reconciliation Act
of 1993, for tax years beginning on or after January 1, 1994, publicly held
corporations cannot deduct compensation payments made to certain employees
for federal income tax purposes to the extent that the employee's
compensation exceeds $1 million. The employees covered by this provision
include the chief executive officer of the corporation and the four other
most highly compensated officers for the taxable year. In the case of stock
options, the $1 million deduction limitation does not apply to the extent
that such compensation is based on performance goals if (i) the performance
goals are established by a compensation committee that is comprised solely of
two or more outside directors and (ii) the material terms of the compensation
are disclosed to the stockholders of the corporation and approved by a
majority vote of the stockholders before the compensation is paid. To ensure
that the options granted under the 1988 Incentive Stock Plan qualify for the
performance-based exception described above, the 1988 Incentive Stock Plan
provides that the Compensation Committee shall consist of two or more
"outside directors," within the meaning of Section 162(m).
STOCK BONUSES. Stock bonuses are subject to federal income tax treatment
in the same manner as are cash bonuses. Although the Company has never
issued a stock bonus under the 1988 Incentive Stock Plan, any stock bonus
would be valued at the fair market value of the Common Stock upon the date of
grant. Upon issuance of a stock bonus, the Company may claim a deduction for
compensation paid at the same time and in the same amount as compensation
income is recognized for the individual receiving the stock bonus, assuming
federal tax withholding requirements are satisfied.
DESCRIPTION OF PROPOSED AMENDMENT TO THE 1988 INCENTIVE STOCK PLAN
Assuming approval by the stockholders of the Company of the proposed
amendment to the 1988 Incentive Stock Plan, the Company intends to restate
such plan, as amended (the "Amended Incentive Stock Plan"). Options, stock
purchase rights and stock bonuses under the Amended Incentive Stock Plan
would continue to vest under conditions determined by the Committee,
including performance criteria with respect to the Company and/or the
optionee, as permitted under the Amended Incentive Stock Plan. The material
amendment to be effected pursuant to the Amended Incentive Stock Plan is as
follows:
INCREASE IN NUMBER OF SHARES AVAILABLE FOR ISSUANCE. The Amended
Incentive Stock Plan would increase the total number of shares available
under the 1988 Incentive Stock Plan to be issued upon the exercise of stock
purchase rights and options granted, and stock bonuses awarded, by 900,000
shares to 8,118,334 shares of Common Stock. This amendment would increase
the shares available for issuance as of January 31, 1997 from 678,345 to
1,578,345 shares. As noted previously, the proceeds received by the Company
upon exercise of stock options and stock purchase rights will increase the
Company's cash and equity balances.
The Amended Incentive Stock Plan would continue to be administered by the
Committee.
Approval of the amendment to the 1988 Incentive Stock Plan requires the
affirmative vote of a majority of the shares of Common Stock present or
represented by proxy and entitled to vote at the Annual Meeting. Under
Delaware law and the Company's Restated Certificate of Incorporation and
Bylaws, an abstention would have the same legal effect as a vote against the
amendment to the 1988 Incentive Stock Plan, and each "broker non-vote" would
reduce the absolute number, but not the percentage, of affirmative votes
necessary for approval of the amendment to the 1988 Incentive Stock Plan. A
broker non-vote occurs if a broker or other nominee does not have
discretionary authority and has not received instructions with respect to a
particular item.
The persons named in the accompanying proxy intend to vote for the
amendment to the 1988 Incentive Stock Plan unless instructed otherwise on the
proxy.
6.
<PAGE>
ITEM 3. APPOINTMENT OF AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
The Board of Directors has selected the firm of Ernst & Young LLP as
independent auditors of the Company for fiscal 1997. Ernst & Young LLP has
served as independent auditors of the Company since the Company's inception
in 1988.
If the appointment is not ratified, the Board of Directors will consider
the appointment of other independent auditors. The Board of Directors may
terminate the appointment of Ernst & Young LLP as the Company's independent
auditors without the approval of the stockholders of the Company whenever the
Board of Directors deems such termination necessary or appropriate. A
representative of Ernst & Young LLP is expected to attend the Annual Meeting
and will have the opportunity to make a statement, if such representative
desires to do so, and will be available to respond to appropriate questions.
Ratification of Ernst & Young LLP as auditors requires the affirmative
vote of a majority of the shares of Common Stock present or represented by
proxy and entitled to vote at the Annual Meeting. Under Delaware law and
the Company's Restated Certificate of Incorporation and Bylaws, an abstention
would have the same legal effect as a vote against the ratification of Ernst
& Young LLP as auditors and each "broker non-vote" would reduce the absolute
number, but not the percentage, of affirmative votes necessary for approval
of the ratification of Ernst & Young LLP as auditors. A broker non-vote
occurs if a broker or other nominee does not have discretionary authority and
has not received instructions with respect to a particular item.
The persons named in the accompanying proxy intend to vote for the
ratification of Ernst & Young LLP as auditors unless instructed otherwise on
the proxy.
MANAGEMENT OF THE COMPANY
The names, ages and positions of the Company's executive officers are as
follows:
NAME AGE POSITION
- ---- --- --------
James W. Swent, III 46 Chairman of the Office of the
President, Sr. Vice President of
Finance and Administration, Chief
Financial Officer, Secretary and
Treasurer
Kevin C. McDonough 47 Sr. Vice President of Engineering and
Member of the Office of the President
Nancy B. Dechaud 39 Vice President of Manufacturing and
Member of the Office of the President
Kenneth B. Edoff 45 Sr. Vice President of Sales
Mark W. Bluhm 39 Vice President of Strategic Planning
and Business Development
Russell N. Fairbanks, Jr. 53 Vice President and General Counsel
Robert D. Maher, III 38 Vice President of Engineering
Lewis R. Paceley 41 Vice President of Marketing
Everett J. Roach 41 Vice President of Sales, Asia/Pacific
Stephen A. Tobak 40 Vice President of Corporate and
Channel Marketing
- -----------------------------------------------------------------------------
JAMES W. SWENT, III, joined the Company in July 1996 as Senior Vice
President of Finance and Administration and Chief Financial Officer. He also
serves as Secretary and Treasurer of the Company and has served as Chairman
of the Office of the President since December 1996. Mr. Swent joins the
Company from Northern Telecom Limited, where he was Vice President of
Business Development since 1993, and Vice President and Chief Financial
Officer of Latin American Operations prior to that post in 1992. Prior to
his employment with Northern Telecom, Mr. Swent held various senior
management positions in the computer peripherals industry. Mr. Swent also
serves on the Board of Directors of Rodime plc. He has a B.S. in Finance and
an MBA from the University of California, Berkeley.
7.
<PAGE>
KEVIN C. MCDONOUGH is Senior Vice President of Engineering and serves as a
member of the Office of the President. In March 1989, Mr. McDonough joined
the Company as Vice President of Engineering with the responsibility for the
design and development of Cyrix's first math coprocessor. He has continued
to build the engineering group of the Company, completing over 20 compatible
microprocessors and math coprocessors. Prior to joining the Company, Mr.
McDonough spent 15 years with TI in various positions including Design
Engineer, Design Manager, Program Manager and Product Line Manager, where he
was responsible for the design and development of TI's first two generations
of digital signal processors. During his employment with TI, Mr. McDonough
was the named inventor on 23 patents granted to TI, and in 1985 he was
elected a TI Fellow. Mr. McDonough has a B.S. and an M.S. in Electrical
Engineering from Ohio State University.
NANCY B. DECHAUD, joined the Company in April 1988 as one of the Company's
initial Design Engineers. Currently, Ms. Dechaud serves as Vice President of
Manufacturing and as a member of the Office of the President. Prior to
joining the Company, Ms. Dechaud was employed by SGS-Thomson as a Design
Engineering Manager. Ms. Dechaud graduated from the University of Illinois
with a B.S. in Electrical Engineering and received an M.S. in Electrical
Engineering from Southern Methodist University.
KENNETH B. EDOFF, joined the Company in February 1997 as Senior Vice
President of Sales. Prior to joining the Company, Mr. Edoff was employed by
Hitachi, LTD as Senior Director of Sales and Marketing. Prior to his
employment with Hitachi, Mr. Edoff was employed by Quantum Corporation from
1990 until 1995 and held various sales management positions. Mr. Edoff has
five years of international sales experience, primarily in Asia. Mr. Edoff
graduated from Temple University with a B.S. in Communications.
MARK W. BLUHM, joined the Company in November 1988 as one of the
Company's initial Design Engineers. Currently, Mr. Bluhm serves as Vice
President of Strategic Planning and Business Development. Prior to joining
the Company, Mr. Bluhm was employed by Martin Marietta as a Senior Staff
Engineer and was also employed as an Engineer by Motorola Incorporated. He
began his career in 1980 at Mostek Incorporated. Mr. Bluhm graduated from
the University of Arkansas with a B.S. in Electrical Engineering and received
an M.S. in Electrical Engineering from Southern Methodist University. He
also has a M.S. in Computer Science from the Florida Institute of Technology.
RUSSELL N. FAIRBANKS, JR., joined the Company in October 1993 as Vice
President and General Counsel. Prior to joining the Company, he served as
Deputy General Counsel of Electronic Data Systems ("EDS") from January 1990
through September 1993. Prior to EDS, Mr. Fairbanks served as an
international attorney for General Motors. Mr. Fairbanks has a B.A. in
Economics from Trinity College and is a graduate of the Columbia University
Law School.
ROBERT D. MAHER, III, joined the Company in April 1988 as one of the
Company's initial Design Engineers. Currently, Mr. Maher serves as Vice
President of Engineering and is responsible for future processor designs. He
began his career at TI as a Design Engineer in 1983. Mr. Maher graduated
from Michigan State with a B.S. in Electrical Engineering and received an
M.S. in Electrical Engineering from the University of Texas at Arlington.
LEWIS R. PACELEY, joined the Company in January 1996 as Vice President of
Marketing. Prior to joining the Company, Mr. Paceley was employed by Intel
Corporation ("Intel") for 13 years in various marketing positions, most
recently being Marketing Director of the Pentium Pro. Prior to his
employment with Intel, Mr. Paceley was employed by Bell Telephone Labs as a
Member of the Technical Staff. Mr. Paceley has a B.S. in Computer Science
and Electrical Engineering from Vanderbilt University and an M.S. in Computer
Engineering from the University of Michigan.
EVERETT J. ROACH, joined the Company in June 1991 as a Regional Sales
Manager. Currently he serves as Vice President of Sales, Asia/Pacific.
Prior to joining the Company, Mr. Roach spent five years with Weitek in
various marketing, sales and product management positions, the most recent
being Director of Business Development. Prior to joining Weitek, he spent
eight years with Intel in various positions in the United States, Asia and
Europe. Mr. Roach has a B.S. in Economics from the University of California,
Davis.
8.
<PAGE>
STEPHEN A. TOBAK, joined the Company as Vice President of Corporate and
Channel Marketing in May 1995. Prior to joining the Company, he served as
OPTi Incorporated's ("OPTi") Director of Corporate Marketing, a position that
he held since November 1993. Prior to joining OPTi, Mr. Tobak was Director of
OEM Sales and Marketing for Stac Electronics beginning in August 1991. Mr.
Tobak, who began his career with TI in 1980, has an M.S. in Electrical
Engineering and a B.S. in Physics from the State University of New York,
Stony Brook.
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the number of shares of Common Stock owned
beneficially by (i) each of the Company's directors, (ii) certain of the
Company's executive officers and (iii) all of the Company's directors and
executive officers as a group, in each case as of January 31, 1997:
COMMON STOCK
BENEFICIALLY OWNED
-------------------------------
PERCENT OF
NO. OF SHARES CLASS
-------------- ----------
DIRECTORS:
Harvey B. Cash(1) 370,501 1.81%
Gerald D. Rogers(1) 995,030 4.87%
L. J. Sevin(1) 285,504 1.40%
Gary Stimac -- *
EXECUTIVE OFFICERS:
Russell N. Fairbanks, Jr.(1) 69,000 *
Kevin C. McDonough(1)(2) 440,194 2.15%
Lewis R. Paceley(1) 25,250 *
Everett J. Roach(1) 40,386 *
James N. Chapman(3) 2,000 *
All directors and executive officers
as a group (15 persons)(1) 2,457,113 12.02%
__________
* Less than 1%
(1) Includes shares issuable upon exercise of options that are
exercisable at or within 60 days of January 31, 1997, the total of which
for all directors and executive officers is 869,879 shares.
(2) Includes 5,100 shares held in Mr. McDonough's children's names.
(3) Mr. Chapman resigned as Senior Vice President of Sales on August 16,
1996.
9.
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes the compensation earned by the Company's
former Chief Executive Officer and its four other most highly compensated
executive officers (collectively, the "Named Officers") for services rendered
during fiscal years ended December 29, 1996, December 31, 1995 and January 1,
1995.
SUMMARY COMPENSATION TABLE
<TABLE>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------------------------ ------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(2) BONUS (2) COMPENSATION OPTIONS(#) COMPENSATION(8)
- ------------------------------ ------ --------- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Gerald D. Rogers 1996 $303,593 $125,000 $ -- 200,000 $4,500
Former President and Chief 1995 293,100 44,467 -- 100,000 --
Executive Officer 1994 209,046 30,401 -- 125,000 --
Russell N. Fairbanks, Jr. 1996 $167,098 $48,000 $ 41,966(3) 25,000 $4,500
Vice President and General 1995 165,321 42,908 43,965 15,000 --
Counsel 1994 151,855 10,951 45,963 10,000 --
Kevin C. McDonough 1996 $186,618 $55,000 $ -- 35,000 $4,500
Senior Vice President of 1995 183,683 25,877 -- 25,000 --
Engineering 1994 159,795 13,196 -- 62,500 --
Lewis R. Paceley 1996 $185,339 $ -- $ 112,960(4) 100,000 $3,365
Vice President of Marketing 1995 -- -- -- -- --
1994 -- -- -- -- --
Everett J. Roach 1996 $208,161 $ 1,000 $ 211,493(5) 45,000 $2,038
Vice President of Sales, 1995 142,014 8,152 104,238(6) 88,000 --
Asia/Pacific 1994 -- -- -- -- --
James N. Chapman(1) 1996 $188,042 $20,000 $ 717,407(7) 35,000 $3,588
Former Senior Vice 1995 260,614 71,692 1,029,600 75,000 --
President of Sales 1994 199,148 22,951 1,176,803 62,500 --
</TABLE>
(1) Mr. Chapman resigned as Senior Vice President of Sales on August 16, 1996.
(2) Amounts shown include cash and non-cash compensation earned and received
by executive officers, profit sharing payments and amounts earned but
deferred at the election of those officers pursuant to the Company's
401(k) Retirement Plan.
(3) Represents the forgiveness of $25,000 of the principal amount of a loan
made by the Company to Mr. Fairbanks in connection with the commencement
of his employment with the Company, payment by the Company of an aggregate
of $1,250 in interest on such loan made by the Company to Mr. Fairbanks
and tax assistance in the amount of $15,716.
(4) Represents the amount of Mr. Paceley's relocation expenses paid by the
Company.
(5) Of the amount shown, $8,590 represents relocation expenses paid by the
Company, $28,080 represents tax assistance paid to Mr. Roach, and $173,314
represents perquisites and other personal benefits paid to Mr. Roach
pursuant to foreign living expenses. Also includes $1,509 which is the
compensation realized upon the disposition of shares pursuant to the
Company's Employee Stock Purchase Plan equal to the difference between
the price paid by Mr. Roach for 500 shares and the fair market value on
the date of purchase.
(6) Includes $97,016, which is the difference between the price paid by Mr.
Roach upon exercise of vested stock options for 3,124 shares and the market
price on the date of exercise. Also includes $2,597 which is the
compensation realized upon the disposition of shares pursuant to the
Company's Employee Stock Purchase Plan equal to the difference between the
price paid by Mr. Roach for 500 shares and the fair market value on the
date of purchase. Also represents $4,625 of auto allowance.
(7) Represents the difference between the price paid by Mr. Chapman upon the
exercise or sale of vested stock options for 31,158 shares granted to him
by the Company and the market price on the date of exercise or date of
sale as required by the type of option.
10.
<PAGE>
(8) All amounts listed in this column are amounts contributed by the Company
to the broad-based defined contribution retirement plan. These amounts
are to be paid to the Named Officers (or any other plan participant) only
upon retirement, termination, disability or death.
STOCK OPTION GRANTS IN 1996
The following table sets forth details regarding stock options granted to
the Named Officers in 1996. In addition, there are shown hypothetical gains
that would exist for the respective options.
<TABLE>
POTENTIAL REALIZED VALUE AT
ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION FOR
NUMBER OF % OF TOTAL OPTION TERM
SECURITIES OPTIONS GRANTED ----------------------------
UNDERLYING TO EMPLOYEES IN EXERCISE EXPIRATION
NAME OPTIONS 1996 PRICE DATE 5% 10%
- --------------------- ---------- --------------- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald D. Rogers 200,000 13.42% $19.25 1/17/06 $2,421,244 $6,135,908
Russell N. Fairbanks, Jr. 25,000 1.68% $19.25 1/17/06 302,656 766,989
Kevin C. McDonough 35,000 2.35% $19.25 1/17/06 423,718 1,073,784
Lewis R. Paceley 100,000 6.71% $26.00 1/22/06 1,635,126 4,143,730
Everett J. Roach 25,000 1.68% $19.25 1/17/06 302,656 766,989
20,000 1.34% $14.1875 9/19/06 178,449 452,224
James N. Chapman(1) 35,000 2.35% $19.25 1/17/06 -- --
</TABLE>
(1) Mr. Chapman resigned as Senior Vice President of Sales on August 16,
1996. All options granted to Mr. Chapman in 1996 were canceled due to his
resignation pursuant to the option agreements.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following is information with respect to option exercises and
unexercised options to purchase Common Stock outstanding as of December 31,
1996 under the Company's 1988 Incentive Stock Plan held by the Named Officers
at December 31, 1996:
<TABLE>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1996 DECEMBER 31, 1996(2)
--------------------------- ---------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gerald D. Rogers -- $ -- 465,399 -- $720,718 $ --
Russell N. Fairbanks, Jr. -- -- 48,334 51,666 -- --
Kevin C. McDonough -- -- 94,156 66,250 676,243 --
Lewis R. Paceley -- -- -- 100,000 -- --
Everett J. Roach -- -- 24,125 114,167 30,788 83,097
James N. Chapman(1) 52,908 1,190,470 -- -- -- --
</TABLE>
(1) Mr. Chapman resigned as Senior Vice President of Sales on August 16, 1996.
(2) Value based on the December 31, 1996 closing price of the Common Stock on
the Nasdaq National Market of $18.00 as defined pursuant to the Company's
1988 Incentive Stock Plan.
11.
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company operates in the highly competitive and rapidly changing high
technology industry. The goals of the Company's compensation program are to
align compensation with the Company's overall business objectives and
performance, to foster teamwork and to enable the Company to attract, retain
and reward employees who contribute to its long-term success.
COMPENSATION COMPONENTS
Compensation for the Company's executive officers generally consists of
salary, incentive bonus plan, profit sharing program and stock option awards.
The Company's executive compensation program has been structured and is
administered by the Compensation Committee. The Compensation Committee
assesses the past performance and anticipated future contribution to the
Company of each executive officer in establishing total future compensation.
The Compensation Committee is currently composed of two independent,
non-employee directors who have no interlocking relationships as defined by
the SEC.
SALARY. The salaries of the executive officers, including the Chief
Executive Officer, are determined annually by the Committee with reference to
several surveys of salaries paid to executives with similar responsibilities
at comparable companies primarily in the high technology industry, the
officer's performance and the Company's overall financial results without
specific weighting of these factors. The Compensation Committee believes it
is crucial to provide salaries within a competitive market range in order to
attract and retain talented executives. However, the Compensation Committee
manages salaries for the executive group as a whole in a conservative fashion
in order to place more emphasis on incentive compensation. Specifically, the
Compensation Committee believes that the base salary for the Company's
executive officers as a group should approximate the 50th percentile for the
Company's peers, although certain individuals may be above the 50th
percentile.
INCENTIVE BONUS PLAN. The Company's pay-for-performance compensation
philosophy includes the awarding of cash incentive payments in the form of
bonuses. Cash bonuses are paid to eligible officers when the officer meets
or exceeds Board of Director approved key objectives. Eligible officers
meeting these criteria may receive cash bonuses of between 35% and 66% of
base salary. These objectives are reviewed and approved by the Compensation
Committee. Following the completion of the fiscal year, the Committee
assesses the Company's and officer's performance against the established
objectives and determines incentive payments based upon the targeted level of
performance achieved.
PROFIT SHARING PROGRAM. The employee profit sharing program is designed
to provide significant financial incentive and reward to employees for
superior performance by the Company. All full-time and part-time regular
employees who are in the continuous employment of the Company as of the first
and last days of a fiscal quarter are eligible to receive a profit sharing
bonus. Profit sharing bonuses will be paid quarterly if the Company achieves
a goal of 16% After Tax Return on Sales ("ATROS") for a given fiscal quarter.
ATROS is defined as after tax profit divided by net revenue. Upon
achievement of 16% ATROS, a profit sharing bonus pool will be funded with 5%
of the profit after taxes for that quarter. The profit sharing bonus pool
will be distributed to each employee based on a formula related to percentage
of base salary. If the Company achieves less than 16% ATROS, no profit
sharing is paid for that fiscal quarter.
1988 INCENTIVE STOCK PLAN. Options granted under the 1988 Incentive Stock
Plan may be (i) options intended to qualify as "incentive stock options"
under Section 422 of the Code, (ii) non-qualified stock options, which are
not intended to qualify for incentive stock option treatment, (iii) certain
stock purchase rights and (iv) stock bonuses. Under the 1988 Incentive Stock
Plan, incentive stock options may be granted to employees (including officers
and directors who are employees) as well as non-employee directors of the
Company or a parent or subsidiary of the Company, and non-qualified stock
options and stock purchase rights may be granted to employees (including
officers and directors who are employees) of, and consultants to, the Company
or a parent or subsidiary of the Company. Options and stock purchase rights
generally will vest within a four-year period.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), places a limit of $1,000,000 on the amount of compensation that may
be deducted by the Company in any year with respect to each of the Company's
five most highly paid executive officers. Certain performance based
compensation that has been
12.
<PAGE>
approved by stockholders is not subject to the deduction limit. Options
granted pursuant to the Company's stock option plan intend to qualify as
performance based compensation to maximize tax deductibility. However, in
order to maintain flexibility in compensating executive officers to promote
the attainment of various corporate goals, the Compensation Committee has not
adopted a policy that all compensation must be deductible.
EMPLOYEE STOCK PURCHASE PLAN. The Company maintains an Employee Stock
Purchase Plan that is intended to qualify under Section 423 of the Code.
Such plan is implemented by one offering during each six-month period. The
Employee Stock Purchase Plan permits eligible employees to purchase Common
Stock through payroll deductions, which may not exceed 10% of an employee's
base salary. Each participating employee will be granted at the start of a
period options to purchase shares of Common Stock exercisable at the end of
the period. The number of shares subject to an option will be that number of
full shares that can be purchased with the total amount of payroll deductions
for such employee during the period at the exercise price equal to 85% of the
lower of (i) the closing selling price of the Common Stock on the first day
of the purchase period or (ii) the closing selling price on the last day of
the purchase period. No employee will be granted an option under the
Employee Stock Purchase Plan if the employee, immediately after the option is
granted, would own, directly or indirectly, stock (including the stock to be
acquired upon exercise of the option) representing 5% or more of the total
combined voting power or value of the Common Stock.
401(K) RETIREMENT PLAN MATCHING. The Company implemented an employer
matching contribution to the 401(k) Retirement Plan in January 1996. All
employees, as well as executive officers, are able to participate. The
Company will match employee contributions $0.50 for every $1.00 of employee
contribution, up to 6% of compensation. The matching contributions are
limited as required by the Internal Revenue Code.
CHIEF EXECUTIVE OFFICER COMPENSATION
As described above, the Company manages its pay for all executives,
including the Chief Executive Officer, considering both a pay-for-performance
philosophy and market rates of compensation for the job. Specific actions
taken by the Compensation Committee regarding Mr. Rogers' compensation are
summarized below.
BASE SALARY. In 1996, Mr. Rogers annual base salary was $300,000 which
remained unchanged from 1995. The criteria used in establishing Mr. Rogers'
salary included a comparison of salaries of other officers in comparable
companies and a review of national salary surveys, as well as progress made
in the implementation of the Company's business strategy, without any
specific weighting among these factors. The Company also contributed $4,500
to Mr. Rogers' account pursuant to the Company's 401(k) Retirement Plan.
BONUS AND PROFIT SHARING PLAN. Mr. Rogers received a cash bonus of
$125,000 during fiscal 1996. Mr. Rogers' cash bonus was based upon the
attainment of certain key objectives, as defined by the Board of Directors.
There were no profit sharing payments made to Mr. Rogers pursuant to the
Company's Profit Sharing Plan.
INCENTIVE STOCK PLAN. The Compensation Committee considered equity based
compensation, in the form of stock options, to be an important component of
Mr. Rogers' compensation. Based upon his and the Company's performance, Mr.
Rogers was granted options to purchase 200,000 shares during fiscal 1996.
SEVERANCE ARRANGEMENT. Mr. Rogers resigned as President and Chief
Executive Officer of the Company on December 9, 1996. Pursuant to a
severance arrangement between the Company and Mr. Rogers dated March 10,
1997, cash payments of $11,540 will be paid to Mr. Rogers on a bi-weekly
basis through June 9, 1998. The Company will pay $33,934, which represents
accrued vacation through December 8, 1996 and a $50,000 cash bonus. All
unvested stock options accelerated in full at the time of termination. On
February 12, 1997, Mr. Rogers exercised the option for 40,399 shares that was
granted to him on January 15, 1991 pursuant to the terms and conditions of
such option grant. His remaining options are exercisable for ten years from
the date of each option grant pursuant to the Company's 1988 Incentive Stock
Option Plan.
COMPENSATION COMMITTEE
HARVEY B. CASH, CHAIRMAN
L. J. SEVIN
13.
<PAGE>
COMPANY PERFORMANCE STOCK PRICE GRAPH
The Performance Graph shown below was prepared by the Company for use in
this proxy statement. Note that historic stock price performance is not
necessarily indicative of future stock performance. As required by
applicable rules of the SEC, the graph was prepared based upon the following
assumptions.
1. $100 was invested in the Company's Common Stock, the S&P High
Technology Composite Index and the S&P 500 Composite Index on July
16, 1993 (the date of the Company's initial inclusion in the Nasdaq
National Market).
2. Dividends are reinvested on the ex-dividend dates.
CYRIX CORPORATION
COMPARISON OF CUMULATIVE TOTAL RETURN
JULY 16, 1993 - DECEMBER 29, 1996
[CHART]
The chart above was plotted using the following year end data:
BASE PERIOD DECEMBER DECEMBER DECEMBER DECEMBER
JULY 16, 1993 1993 1994 1995 1996
------------- -------- -------- -------- --------
Cyrix Corporation $100 (1) $127 $123 $144 $113
S&P High Technology
Composite Index $100 $115 $133 $192 $273
S&P 500 Composite
Index $100 $106 $107 $148 $182
(1) Based upon stock price of $16.00 per share, the initial public
offering price per share of the Common Stock.
14.
<PAGE>
CERTAIN TRANSCTIONS AND OTHER MATTERS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between the members of the Company's
Compensation Committee of the Board of Directors, comprised of Messrs. Cash
and Sevin, and the board of directors or compensation committee of any other
company, nor has any such interlocking relationship existed in the past.
INDEBTEDNESS OF MANAGEMENT
In July 1996, the Company loaned $75,000 at an interest rate of 6% per
annum to Mr. James W. Swent, III, the Company's Senior Vice President of
Finance and Administration and Chief Financial Officer, in connection with
the commencement of his employment with the Company. Pursuant to the terms
of the loan, the Company will forgive the $75,000 plus accrued interest on
the first anniversary of the loan provided that Mr. Swent remains employed by
the Company through the maturity date of July 1, 1997. In the event of Mr.
Swent's voluntary or involuntary termination of employment, all unforgiven
principal of such loan will become immediately due and payable. The largest
amount of Mr. Swent's indebtedness to the Company under this loan during
fiscal 1996 was $75,000.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, if any, to file reports of ownership on Form 3
and changes in ownership on Forms 4 or 5 with the SEC, and to provide the
Company copies of these filings. Based on the written representations of its
officers and directors and a review of the copies of such forms furnished to
the Company during the fiscal year ended December 29, 1996, the Company
believes that its officers and directors complied with all Section 16(a)
filing requirements.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Any stockholder who wishes to submit a proposal for inclusion in the proxy
material and for presentation at the Company's 1998 Annual Meeting of
Stockholders must forward such proposal to the Secretary of the Company at
MS 220, PO Box 853920, Richardson, Texas, 75085-3920, so that the Secretary
receives it no later than November 20, 1997.
The Board of Directors does not know of any other matters that are to be
presented for action at the Annual Meeting. However, if any other matters
properly come before the Annual Meeting or any adjournment(s) thereof, it is
intended that the enclosed proxy will be voted in accordance with the
judgment of the individuals voting the proxy.
By Order of the Board of Directors,
/s/ JAMES W. SWENT, III.
-------------------------------
JAMES W. SWENT, III.
SECRETARY
March 19, 1997
15.
<PAGE>
CYRIX CORPORATION ANNUAL MEETING--APRIL 17, 1997
The undersigned, having received the Notice of Annual Meeting and accompanying
Proxy Statement relating to the Annual Meeting, hereby appoints James W. Swent,
III and Russell N. Fairbanks, Jr., and each of them, as a true and lawful
attorneys, agents and proxies of the undersigned, with full power of
substitution, to vote and act in the manner designated below at the Annual
Meeting and any adjournments thereof, in respect of all Common Stock of the
Company as to which the undersigned may be entitled to vote or act, with all
powers the undersigned would possess if personally present and, without limiting
the general authorization hereby given, the undersigned directs that his or her
vote be cast as specified in this proxy. The undersigned hereby revokes any
other proxy previously granted to vote the same shares of Common Stock for such
meeting. The matters listed below are proposed by the Company:
1. The nominees for the Board of Directors are Messrs. Harvey B. Cash, Gerald
D. Rogers, L.J. Sevin and Gary A. Stimac.
/ / VOTE FOR all nominees listed, except as listed below (if any).
/ / VOTE WITHHELD from all nominees.
- --------------------------------------------------------------------------------
INSTRUCTION: To withhold authority to vote for individual nominee(s), write
such nominees(s) name(s) in the space provided above.
2. Proposal to amend the Company's 1988 Incentive Stock Plan as described in
the Proxy Statement dated March 19, 1997.
FOR / / AGAINST / / ABSTAIN / /
3. Proposal to ratify the selection of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending December 28, 1997.
FOR / / AGAINST / / ABSTAIN / /
<PAGE>
CYRIX CORPORATION ANNUAL MEETING--APRIL 17, 1997
When properly executed and returned, this proxy will be voted as designated on
the reverse hereof by the undersigned. IF NO CHOICE IS SPECIFIED, THE PROXY WILL
BE VOTED FOR THE PROPOSALS DESCRIBED IN THE PROXY STATEMENT, and will be voted
in the discretion of the persons named as proxy herein in connection with any
other business that may properly come before the Annual Meeting. The Board of
Directors recommends voting for the proposals described in the Proxy Statement.
Number of Shares
IMPORTANT: Signature(s) must
correspond exactly with the
name(s) as they appear on the
stock record book of the Company.
Each joint owner shall sign.
Executors, administrators,
trustees, etc. should give full
title as such.
Dated: 1997,
----------------------------------
----------------------------------------
Signature
----------------------------------------
Signature
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
