<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 Rule 14a-11(c) or Rule 14a-12
BENCHMARQ MICROELECTRONICS, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
---------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):_____________
4) Proposed maximum aggregate value of transaction:_______________________
5) Total fee paid:________________________________________________________
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form, Schedule or Registration Statement No.:_________________________
3) Filing Party:_________________________________________________________
4) Date Filed:___________________________________________________________
<PAGE>
BENCHMARQ MICROELECTRONICS, INC.
17919 Waterview Parkway
Dallas, Texas 75252
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 16, 1997
-------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of BENCHMARQ Microelectronics, Inc. (the "Company") will be held at
9:30 a.m., local time, on Wednesday, April 16, 1997, at the Omni Richardson
Hotel, 701 East Campbell Road, Richardson, Texas 75081, for the following
purposes:
1. To elect six members of the Company's Board of Directors, to hold
office until the next annual meeting of stockholders and until their successors
are elected and qualify.
2. To approve certain amendments to the BENCHMARQ Microelectronics, Inc.
1995 Flexible Stock Option Plan.
3. To consider and transact such other business as may properly be
brought before the Meeting or any adjournment thereof.
Only stockholders of record at the close of business on March 3, 1997 will
be entitled to vote at the Meeting. The share transfer books will not be closed.
By Order of the Board of Directors
/s/ Reginald B. McHone
Reginald B. McHone
Vice President, Finance and Administration, Chief
Financial Officer and Corporate Secretary
Dallas, Texas
March 11, 1997
YOUR VOTE IS IMPORTANT
To ensure that your interests will be represented at the Meeting, whether
or not you plan to attend the Meeting, please complete, date, sign and mail the
enclosed proxy promptly in the enclosed postage-paid envelope. Stockholders who
attend the Meeting in person may revoke their proxies and vote in person if they
so desire.
<PAGE>
BENCHMARQ MICROELECTRONICS, INC.
17919 Waterview Parkway
Dallas, Texas 75252
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 16, 1997
-------------------------
This Proxy Statement and the enclosed proxy are furnished to stockholders
of BENCHMARQ Microelectronics, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company from holders of outstanding shares of common stock, $.001 par value per
share (the "Common Stock"), for use at the Annual Meeting of Stockholders (the
"Meeting") to be held at 9:30 a.m., local time, on Wednesday, April 16, 1997, at
the Omni Richardson Hotel, 701 East Campbell Road, Richardson, Texas 75081, and
at any adjournment or postponement thereof. This Proxy Statement and the
related form of proxy are first being sent to stockholders on or about March 11,
1997.
If the enclosed proxy is properly executed and returned, and if a
stockholder specifies a choice on the proxy, the Common Stock represented by the
proxy will be voted (or withheld from voting) in accordance with such
stockholder's specification. If the proxy is signed and returned but no
specification is made, the proxy will be voted FOR the election of each of the
nominees for director listed herein and FOR the proposal to ratify certain
amendments to the BENCHMARQ Microelectronics, Inc. 1995 Flexible Stock Option
Plan (Amended and Restated as of September 18, 1996) (the "1995 Option Plan").
Stockholders voting by proxy with respect to the election of directors may
vote "For" all nominees, may "Withhold Authority" to vote as to all nominees or
"Withhold Authority" to vote as to specific nominees. With respect to each other
proposal that comes before the stockholders at the Meeting, stockholders may
vote "For" the proposal, may vote "Against" the proposal or may "Abstain" from
voting with respect to the proposal.
Any proxy executed and returned by a stockholder may be revoked by such
stockholder, at any time prior to its being voted, by filing with the Secretary
of the Company at its address set forth above a written notice of revocation or
a duly executed proxy bearing a later date. Any proxy also may be revoked by
the stockholder's attendance at the Meeting and voting in person. A notice of
revocation need not be in any specific form.
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no business that will be presented for consideration at the
Meeting other than the matters described in this Proxy Statement. If any other
matters are properly brought before the Meeting, the persons named in the
accompanying form of proxy will vote the proxies in accordance with their
judgment.
<PAGE>
RECORD DATE AND VOTING AT THE MEETING
The Board of Directors has fixed the close of business on March 3, 1997 as
the record date for the determination of the stockholders of the Company
entitled to notice of, and to vote at, the Meeting. At that date, there were
outstanding 6,797,954 shares of Common Stock, the holders of which will be
entitled to one vote per share of Common Stock on each matter submitted to the
stockholders at the Meeting. No other voting securities of the Company were
outstanding on March 3, 1997. Stockholders are not entitled to cumulate their
votes in connection with the election of directors.
The holders of a majority of the outstanding shares of Common Stock
entitled to vote, present in person or represented by proxy, will constitute a
quorum for the transaction of business at the Meeting. If such quorum is not
present or represented at the Meeting, the holders of a majority of the shares
present or represented and entitled to vote at the Meeting may adjourn the
Meeting from time to time without notice other than announcement at the Meeting
until a quorum is present or represented. If a quorum is present or represented
at the Meeting, the stockholders present or represented at the Meeting may
continue to transact business until adjournment notwithstanding the withdrawal
of enough stockholders to leave less than a quorum present.
Abstentions and broker non-votes (where a nominee holding shares for a
beneficial owner has not received voting instructions from the beneficial owner
with respect to a particular matter and such nominee does not possess or chooses
not to exercise discretionary voting authority with respect thereto) will be
included in the determination of the number of shares of Common Stock present at
the Meeting for quorum purposes. Because directors are elected by a plurality of
the votes cast and the approval of the amendment to the 1995 Option Plan
requires a majority of the votes cast, abstentions and broker non-votes will
have no effect on the outcome of the election of directors or the proposal to
approve certain amendments to the 1995 Option Plan.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock by (i) each director, (ii) the Company's Chief
Executive Officer and the four other most highly paid executive officers of the
Company, named in the Summary Compensation Table included elsewhere herein
(collectively, the "Named Executive Officers"), (iii) all directors and
executive officers of the Company as a group, and (iv) each person who is known
by the Company to be a stockholder of the Company owning 5% or more of the
Common Stock, in each case at February 28, 1997. Each person named in the table
has sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by such person, except pursuant to applicable
community property laws or as otherwise set forth in the notes to the table. In
each case, the number of shares includes the beneficial ownership of Common
Stock which the designated person has the right to acquire prior to May 2, 1997,
including shares of Common Stock issuable upon exercise of options that are
exercisable prior to May 2, 1997.
<TABLE>
<CAPTION>
Percentage of
Number of Shares of Outstanding
Common Stock Shares of
Name of Beneficial Owners Beneficially Owned Common Stock/(1)/
------------------------- ------------------- ------------------
<S> <C> <C>
Putnam Investments, Inc./(2)/ ......................... 889,678/(3)/ 13.1%
Driehaus Capital Management, Inc./(4)/................. 506,577 7.5%
AIM Management Group, Inc./(5)/........................ 465,000/(6)/ 6.8%
Nicholas-Applegate Capital Management/(7)/ ............ 352,500 5.2%
Derrell C. Coker ...................................... 127,805/(8)/ 1.9%
William F. Davies, Jr. ................................ 85,987/(9)/ 1.3%
Reginald B. McHone .................................... 67,238/(10)/ *
Jimmie C. Vernon ...................................... 53,487/(11)/ *
Wallace E. Matthews/(12)/ ............................. 40,957/(13)/ *
L.J. Sevin/(14)/ ...................................... 692,966/(15)/ 10.2%
Harvey B. Cash ........................................ 69,738/(16)/ 1.0%
Dietrich Erdmann/(17)/ ................................ 605,212 8.9%
Jack S. Kilby ......................................... 6,250/(18)/ *
Charles Phipps ........................................ 37,003/(19)/ *
All executive officers and directors as a group
(10 persons).......................................... 1,786,643/(20)/ 25.4%
</TABLE>
_______________________
* Less than 1%
(1) Calculation of percentage beneficial ownership assumes the exercise by only
the respective named stockholder of all rights to acquire shares of Common
Stock which are exercisable prior to May 2, 1997, including, without
limitation, upon exercise of options for the purchase of Common Stock held
by such stockholder.
(2) Putnam Investments, Inc.'s address is One Post Office Square, Boston,
Massachusetts 02109
-3-
<PAGE>
(3) Putnam Investments, Inc. ("Putnam"), a wholly-owned subsidiary of Marsh &
McLennon Companies, Inc., acting through its investment advisory management
subsidiaries, Putnam Investment Management, Inc. ("PIM") and The Putnam
Advisory Company, Inc. ("PAC"), may be deemed to be the beneficial owner of
889,678 shares of Common Stock. Putnam shares dispositive power with
respect to 889,678 shares of Common Stock with PIM and PAC and the funds
they manage and shares voting power with respect to 67,600 shares of Common
Stock with PAC and its institutional clients. PIM shares dispositive power
with respect to 814,678 shares of Common Stock with the funds it manages
including the Putnam OTC & Energy Growth Fund shares with respect to
497,400 shares and Putnam. No other single fund shares dispositive power
with respect to more than five percent of the outstanding shares of Common
Stock.
(4) Driehaus Capital Management, Inc.'s address is 25 East Erie Street,
Chicago, Illinois 60611.
(5) AIM Management Group, Inc.'s address is 11 Greenway Plaza, Suite 1919,
Houston, Texas 77046.
(6) AIM Management Group, Inc., acting through its wholly-owned subsidiary, AIM
Advisors, Inc., may be deemed to be the beneficial owner of 465,000 shares
of Common Stock. AIM Management Group, Inc., AIM Advisors, Inc., and two
funds managed by AIM Advisors, Inc. share dispositive power and voting
power with respect to 465,000 shares of Common Stock.
(7) Nicholas-Applegate Capital Management's address is 600 West Broadway, 29th
Floor, San Diego, California 92101.
(8) Includes 15,050 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(9) Includes 58,487 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(10) Includes 63,237 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(11) Includes 48,487 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(12) Effective January 1997, Mr. Mathews resigned his duties and
responsibilities as Vice President, Technology in order to focus his
efforts on design engineering as the Company's Chief Design Engineer.
(13) Includes 40,957 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(14) Mr. Sevin's address is Two Galleria Tower, 13455 Noel Road, Suite 1670, LB
5, Dallas, Texas 75240
(15) Includes 60,639 shares held of record by the L.J. Sevin Benevolent Fund.
As the trustee of the L.J. Sevin Benevolent Fund, Mr. Sevin may be deemed a
beneficial owner of the shares owned by the L.J. Sevin Benevolent Fund.
Mr. Sevin disclaims beneficial interest in such shares.
(16) Includes 18,738 shares held of record by the Mary Berryman Cash 1992
Grandchildren's Trust. Mr. Cash disclaims beneficial ownership of the
shares of Common Stock held of record by the Mary Berryman Cash 1992
Grandchildren's Trust.
(17) Mr. Erdmann's address is Two Galleria Tower, 13455 Noel Road, Suite 1670,
LB 5, Dallas, Texas 75240
(18) Includes 6,250 shares issuable upon exercise of options exercisable prior
to May 2, 1997.
(19) Includes 1,125 shares held of record in a trust for Mr. Phipps' dependent
son, of which Mr. Phipps' wife is the trustee.
(20) Includes the shares referred to in notes 8-11, 13, 15, 16, 18 and 19 above.
-4-
<PAGE>
INFORMATION REGARDING DIRECTORS
For biographical information regarding the members of the Board of
Directors, see "Proposal One: Election of Directors."
Board Committees
The Board of Directors has a Compensation Committee and an Audit Committee.
The Board of Directors does not have a nominating committee. The Compensation
Committee, which is comprised of Messrs. Sevin, Cash and Kilby, administers the
Company's 401(k) defined contribution plan, the BENCHMARQ Microelectronics, Inc.
1989 Stock Option Plan (Amended and Restated as of September 18, 1996) (the
"1989 Option Plan"), the 1995 Option Plan (together with the 1989 Option Plan,
the "Option Plans"), the BENCHMARQ Microelectronics, Inc. Profit Sharing Program
(the "Profit Sharing Program") and 1995 BENCHMARQ Microelectronics, Inc. Bonus
Plan (the "1995 Bonus Plan") and deals with all matters concerning executive
compensation. The Audit Committee, which is comprised of Messrs. Sevin, Cash and
Kilby, approves the Company's independent auditors, reviews the results and
scope of annual audits and other accounting related services, and reviews and
evaluates the Company's internal audit and control functions. These committees
were established in the second quarter of 1995.
Meetings of the Board and Committees
During 1996, there were 10 meetings of the Board of Directors. There were
two meetings of the Audit Committee. The Compensation Committee took action by
written consent during 1996. No director attended, in person or by phone, less
than 75% of all meetings of the Board of Directors and the committees on which
such director served during 1996, except that Mr. Erdmann attended 40% of such
meetings.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3 and 4 and amendments thereto, if any,
furnished to the Company during the year ended December 31, 1996, with respect
to such year and representations made by certain of the Company's officers,
directors and/or stockholders, no person failed to file on a timely basis the
reports required by Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except Messrs. Coker, McHone, Davies, Vernon and
Matthews failed to file a Form 5 until March 7, 1997.
Family Relationships
There are no family relationships among the directors, nominees for
election as directors or executive officers or persons chosen to become
executive officers of the Company.
-5-
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
annual and long-term compensation earned for services rendered to the Company in
all capacities for the years ended December 31, 1996, 1995 and 1994 paid to the
Company's Chief Executive Officer and to each of the Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
-------------------------------------------------- ------------
Shares of
Common
Other Stock
Annual Underlying
Name and Principal Position Year Salary/(1)/ Bonus/(1)(2)/ Compensation/(3)(4)/ Options
- - --------------------------- ---- ----------- ------------- -------------------- -------
<S> <C> <C> <C> <C> <C>
Derrell C. Coker.......................... 1996 $159,305 $50,812 $4,282 22,000
President and Chief Executive Officer 1995 $138,564 $12,000 -- 12,500
1994 $122,191 $30,126 -- 31,250
Reginald B. McHone........................ 1996 $142,262 $44,770 $3,428 16,500
Vice President, Finance and 1995 $127,048 $12,000 -- 12,500
Administration, Chief Financial Officer 1994 $110,986 $30,117 -- 31,250
and Corporate Secretary
William F. Davies, Jr..................... 1996 $137,379 $46,914 $3,404 17,000
Vice President, Manufacturing 1995 $117,026 $12,000 -- 12,500
Operations 1994 $101,241 $30,106 -- 31,250
Jimmie C. Vernon.......................... 1996 $135,053 $42,997 $3,735 17,000
Vice President, Sales 1995 $117,627 $12,000 -- 12,500
1994 $101,821 $30,101 -- 31,250
Wallace E. Matthews....................... 1996 $128,006 $44,998 $2,800 17,000
Vice President, Technology 1995 $108,942 $12,000 -- 25,000
1994 $ 94,205 $25,091 -- 18,750
- - ---------------
</TABLE>
(1) Amounts shown include cash compensation earned but deferred pursuant to the
Company's 401(k) defined contribution plan.
(2) Amounts shown with respect to 1996 include cash compensation earned and
paid in the indicated fiscal year and with respect to each fiscal year cash
compensation earned in the indicated fiscal year but not received until the
subsequent fiscal year.
(3) Amounts shown include cash compensation relating to the reimbursement of
travel expenses for family members to accompany Messrs. Coker, McHone,
Davies and Vernon to an out-of-town meeting of the Board of Directors.
(4) Amounts shown include cash compensation to provide discretionary funds for
personal activities including but not limited to legal and tax counseling
and personal health maintenance.
-6-
<PAGE>
Option and Bonus Plans
1989 Option Plan
In April 1989 the Board of Directors of the Company adopted the 1989
Option Plan, which was approved by the Company's stockholders in April 1989.
Under the 1989 Option Plan, the Company may grant options to purchase up to
1,176,188 shares of Common Stock (as adjusted for the one-for-four reverse stock
split which took place on July 6, 1995), subject to adjustment for stock splits,
stock dividends and similar events. The 1989 Option Plan provides for the
issuance of both incentive stock options ("ISOs") to employees and nonqualified
stock options ("NQSOs") to employees (including directors who are employees) and
consultants (including directors who are not employees) of the Company or a
parent or subsidiary of the Company.
Shares Available for Options. As of February 28, 1997, a total of
779,636 shares of Common Stock, subject to adjustment for stock splits, stock
dividends and similar events, may be purchased pursuant to options granted under
the 1989 Option Plan. If an option expires or becomes unexercisable for any
reason without having been exercised in full, the unpurchased shares which were
subject to such option will again become available for future option grants
under the plan. As of February 28, 1997, 52,253 shares of Common Stock with a
market value of $927,491 (based on the February 28, 1997 closing sales price of
$17.75 per share) remained available for future option grants under the 1989
Option Plan.
Options. The Compensation Committee has the authority under the 1989
Option Plan to determine the terms of options granted under the 1989 Option
Plan, including, among other things, the individuals who shall receive options,
whether an ISO or NQSO will be granted and the number of shares of Common Stock
subject to each option. No option may be granted under the 1989 Option Plan
after April 26, 1999.
The exercise price and term of each option are fixed by the
Compensation Committee, provided, however, that the term of an option shall not
exceed ten years and provided further that in the case of an ISO the exercise
price must be at least equal to the fair market value of the shares of Common
Stock on the date of grant and the term cannot exceed 10 years, unless granted
to an individual who owns (or is deemed to own) at least 10% of the total
combined voting power of all classes of stock of the Company or any parent or
subsidiary (within the meaning of Section 424 of the Internal Revenue Code of
1986, as amended (the "Code")), in which event the exercise price must be at
least 110% of the fair market value on the date of grant and the term cannot
exceed five years. With respect to any individual, the aggregate market price
(determined at the time the option is granted) of Common Stock with respect to
which ISOs may be granted under the 1989 Option Plan, or any other plan of the
Company or any subsidiary, which ISOs are exercisable for the first time during
any calendar year may not exceed $100,000, or such option is to be treated as a
NQSO. An optionee may elect to pay for the Common Stock to be received upon
exercise of options in cash, or by check or promissory note, or if authorized by
the Compensation Committee, in shares of Common Stock or any combination of the
foregoing.
Vesting and Exercisability. If the holder of an option ceases to be
an employee of the Company for any reason other than death or disability, such
individual may, subject to the prior expiration of the term of such option,
exercise any option exercisable at the date of termination within 30 days after
such termination. In the event an employee's employment terminates by reason of
his permanent and total disability, such individual may, subject to the prior
expiration of the term of such option, exercise any option exercisable at the
date of termination within 12 months after the date of termination. Upon the
death of an employee, the employee's estate or a person acquiring the right to
exercise the option by bequest or inheritance may, subject to the prior
expiration of the term of such option, exercise any option exercisable at the
date of death within 12 months after the date of death. If a holder of an option
dies within 30 days after termination of his employment, such individual's
estate or a person acquiring the right
-7-
<PAGE>
to exercise the option by bequest or inheritance may, subject to the prior
expiration of the term of such option, exercise any option exercisable at the
date of death within three months after the date of death. Options not exercised
within the time periods set forth above shall terminate. Options granted under
the 1989 Option Plan to consultants may contain such terms and conditions with
respect to death, disability and termination of the consulting relationship as
the Compensation Committee deems necessary or appropriate.
Administration. The 1989 Option Plan states that it will be
administered by the Board of Directors or a committee of not less than three
Board members appointed by the Board of Directors. Currently the 1989 Option
Plan is administered by the Compensation Committee.
Change in Control. In the event of a recapitalization (other than a
stock split, stock dividend or certain other similar transactions), a merger,
consolidation or conversion involving the Company or any exchange of shares
involving Common Stock, pursuant to which the persons who were holders of the
Common Stock immediately prior to such transaction receive securities or other
property as a result of such sale or merger or do not continue to hold solely
shares of Common Stock, the 1989 Option Plan provides that the terms and
conditions of the option will be modified as described in this paragraph. If
the entity or persons which issues securities or other property to the
stockholder of the Company in connection with such a merger or sale assumes the
options outstanding under the 1989 Option Plan without modification or amendment
(other than Permitted Modifications, as defined in the 1989 Option Plan) such
options will remain outstanding and continue in full force and effect, subject
to the Permitted Modifications. However, if such acquirer does not assume the
options outstanding under the 1989 Option Plan without modification (other than
Permitted Modifications) all vesting restrictions (including performance based
restrictions) will accelerate and the holders of such options will be entitled
to exercise such options (with certain exceptions) within 10 days preceding the
consummation of such sale or merger. Further, upon certain other events which
result in a "Change of Control" of the Company (which is defined in the 1989
Option Plan), all options that have not previously been terminated, exercised or
cancelled become fully vested and immediately exercisable.
Amendment. The 1989 Option Plan may be amended or terminated by the
Board of Directors at any time; provided, however, that the approval of the
holders of a majority of the outstanding shares of the Company entitled to vote
is required for any change in the aggregate number of shares which may be
optioned and sold under the 1989 Option Plan, any change in the designation of
the class of employees entitled to be granted ISOs, or any change that would
materially increase the benefits accruing to participants under the 1989 Option
Plan. An amendment that would have a material effect on the rights of a
participant under an outstanding option will not be valid with respect to such
option without the participant's consent. Finally, the stockholders of the
Company must approve any amendment to the extent required for compliance with
Rule 16b-3 (herein so called) promulgated under the Securities Exchange Act of
1934, as amended, Section 423 of the Code, or any other applicable law or
regulation.
Benefits to Certain Persons Under the 1989 Option Plan. The
individuals who will receive future grants of options under the 1989 Option Plan
will be selected by the Compensation Committee and are not presently
determinable.
-8-
<PAGE>
Options Granted Under the 1989 Option Plan. The following table sets forth
certain information with respect to options awarded to the specified persons and
groups under the 1989 Option Plan through February 28, 1997:
<TABLE>
<CAPTION>
Number of
Name and Shares of
Principal Position Common Stock Grant Dates Exercise Prices Expiration Dates
------------------ ------------ ----------- --------------- ----------------
<S> <C> <C> <C> <C>
Derrell C. Coker........................... 31,250 January 19, 1994 $1.00 to $4.60 January 19, 2004
President and Chief Executive Officer to to
August 22, 1994 August 22, 2004
Reginald B. McHone......................... 87,500 October 2, 1989 $0.20 to $4.60 October 2, 1999
Vice President, Finance and to to
Administration, Chief Financial Officer August 22, 1994 August 22, 2004
and Corporate Secretary
William F. Davies, Jr...................... 93,750 May 1, 1989 $0.20 to $4.60 May 1, 1999
Vice President, Manufacturing Operations to to
August 22,1994 August 22, 2004
Jimmie C. Vernon........................... 68,750 April 29, 1991 $0.32 to $4.60 April 29, 2001
Vice President, Sales to to
August 22, 1994 August 22, 2004
Wallace E. Matthews........................ 47,500 April 9, 1990 $0.28 to $4.60 April 9, 2000
Vice President, Technology to to
August 22, 1994 August 22, 2004
All current executive officers as a group.. 328,750 May 1, 1989 $0.20 to $4.60 May 1, 1999
(5 persons) to to
August 22, 1994 August 22, 2004
L. J. Sevin................................ -- -- -- --
Director
Harvey B. Cash............................. -- -- -- --
Director
Dietrich Erdmann........................... -- -- -- --
Director
Jack Kilby................................. 6,250 April 1, 1993 $.40 April 1, 2003
Director
Charles H. Phipps.......................... -- -- -- --
Director
All current directors who are not executive
officers as a group........................ 6,250 April 1, 1993 $.40 April 1, 2003
(5 persons)
All Employees (including all current
officers who are not executive officers) as
a group.................................... 788,935 April 26, 1989 $0.20 to $21.625 April 26, 1999
(221 persons) to to
February 5, 1997 February 5, 2007
</TABLE>
The closing sales price of the Common Stock as of February 28, 1997 was
$17.75 per share, as reported on the Nasdaq National Market of The Nasdaq Stock
Market, Inc.
Certain Federal Income Tax Matters. For a discussion of the Federal income
tax consequences with regard to the grant and exercise of ISOs and NQSOs, see
"Proposal Two: Approval of Certain Amendments to the 1995 Option Plan -- Certain
Federal Income Tax Matters."
-9-
<PAGE>
1995 Option Plan
In June 1995 the Board of Directors adopted the 1995 Option Plan, which was
approved by the Company's stockholders in June 1995. The purpose of the 1995
Option Plan is to strengthen the Company by providing a means of retaining and
attracting competent personnel by extending added long-term incentives for high
levels of performance and for unusual efforts designed to improve the financial
performance of the Company.
Shares Available for Options. As of February 28, 1997, a total of 497,576
shares of Common Stock, subject to adjustment for stock splits, stock dividends
and similar events, may be purchased pursuant to options granted under the 1995
Option Plan. If an option expires or becomes unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
to such option will again become available for future option grants under the
plan. As of February 28, 1997, options to purchase 11,800 shares of Common
Stock with a market value of $209,450 (based on the February 28, 1997 closing
sales price of $17.75 per share) remained available for future grants under the
1995 Option Plan. The Board of Directors has amended and restated the 1995
Option Plan, subject to stockholder approval, to increase the total number of
shares of Common Stock reserved for issuance by 750,000 shares from 500,000 to
1,250,000 shares. See "Proposal Two: Approval of Amendments to 1995 Option
Plan."
Options. The 1995 Option Plan provides for the issuance of both ISOs and
NQSOs to officers, employees and directors (who are employees) and consultants
of the Company or a parent or subsidiary of the Company. Consultants engaged by
the Company or a parent or subsidiary thereof to render consulting services and
compensated for such services, and any director (who is not an employee) of the
Company, may be granted NQSOs under the 1995 Option Plan. The Compensation
Committee has the authority under the 1995 Option Plan to determine the terms of
options granted under the plan, including, among other things, the individuals
who shall receive options, whether an ISO or NQSO will be granted and the number
of shares of Common Stock subject to each option. No option may be granted
under the 1995 Option Plan after June 30, 2005.
The exercise price and term of each option are fixed by the Compensation
Committee, provided, however, that the term of an option shall not exceed ten
years and provided further that in the case of an ISO the exercise price must be
at least equal to the fair market value of the shares of Common Stock on the
date of grant and if granted to an individual who owns (or is deemed to own) at
least 10% of the total combined voting power of all classes of stock of the
Company or any parent or subsidiary (within the meaning of Section 424 of the
Code), the exercise price must be at least 110% of the fair market value on the
date of grant and the term cannot exceed five years. With respect to any
individual, the aggregate market price (determined at the time the option is
granted) of Common Stock with respect to which ISOs may be granted under the
1995 Option Plan, or any other plan of the Company or any subsidiary, which ISOs
are exercisable for the first time during any calendar year, may not exceed
$100,000. An optionee may pay for the Common Stock to be received upon exercise
of his options in cash, or if the related option agreement so provides, shares
of Common Stock or any combination of the foregoing.
Vesting and Exercisability. If the employment or other service of the
holder of an option ceases for any reason other than death or disability, such
individual may exercise any option exercisable at the date of termination within
30 days after such termination or until its expiration date, whichever is the
shorter period. In the event an optionholder's employment or other service
terminates by reason of his disability, such individual may exercise any option
exercisable at the date of termination within 12 months after the date of
termination or until its expiration date, whichever is the shorter period. Upon
the death of an optionholder, the optionholder's estate or a person acquiring
the right to exercise the option by bequest or inheritance may exercise any
option exercisable at the date of death within 12 months after the
-10-
<PAGE>
date of death or until its expiration date, whichever is the shorter period. If
a holder of an option dies within 30 days after termination of his employment or
other service, such individual's estate or a person acquiring the right to
exercise the option by bequest or inheritance may exercise any option
exercisable at the date of death within three months after the date of death or
until its expiration date, whichever is the shorter period. Options not
exercised within the time periods set forth above shall terminate.
Administration. The 1995 Option Plan states that it will be administered
by the compensation committee established by the Board of Directors which must
be comprised of two or more non-employee directors.
Change in Control. In the event of a sale of all or substantially all of
the assets of the Company, or the merger of the Company with or into another
corporation (a "Corporate Transaction"), pursuant to which the persons who were
holders of the Common Stock immediately prior to such sale or merger receive
securities or other property as a result of such sale or merger or do not
continue to hold solely shares of Common Stock, the 1995 Option Plan provides
that the terms and conditions of the option will be modified as described in
this paragraph. If the entity or persons which issues securities or other
property to the stockholder of the Company in connection with such a merger or
sale assumes the options outstanding under the 1995 Option Plan without
modification or amendment (other than Permitted Modifications, as defined in the
1995 Option Plan) such options will remain outstanding and continue in full
force and effect, subject to the Permitted Modifications. However, if such
acquirer does not assume the options outstanding under the 1995 Option Plan
without modification (other than Permitted Modifications) all vesting
restrictions (including performance based restrictions) will accelerate and the
holders of such options will be entitled to exercise such options (with certain
exceptions) within 10 days preceding the consummation of such sale or merger.
Further, upon the consummation of a Corporate Transaction, which results in a
"Change of Control" (as defined in the 1995 Option Plan), all vesting
restriction applicable to the options are to accelerate and the holders of such
options may exercise such options without regard to such vesting restrictions.
Amendment. The 1995 Option Plan may be amended or terminated by the Board
of Directors at any time; provided, that the Board of Directors may not amend
any provision of the 1995 Option Plan relating to the amount and price of Common
Stock subject to the options granted thereunder or the timing of grants
thereunder more than once every six months, other than to comport with changes
in the Code, the Employee Retirement Income Security Act, or the rules
thereunder, and provided further, that the approval of the Company's
stockholders is required for any change in the aggregate number of shares which
may be optioned and sold under the 1995 Option Plan, any change in the minimum
option price, any increase in the maximum terms of options granted under the
1995 Option Plan, any material modification of the requirements as to
eligibility for participation in the 1995 Option Plan, the removal of
administration of the 1995 Option Plan from the Compensation Committee or any
change that would materially increase the benefits accruing to holders of
options under the 1995 Option Plan. An amendment that would have a material
effect on the rights of a participant under an outstanding option will not be
valid with respect to such option without the participant's consent. Finally,
the stockholders of the Company must approve any amendment to the extent
required for compliance with Rule 16b-3, Section 423 of the Code, or any other
applicable law or regulation.
Benefits to Certain Persons Under the 1995 Option Plan. The individuals
who will receive future grants of options under the 1995 Option Plan will be
selected by the Compensation Committee and are not presently determinable.
-11-
<PAGE>
Options Granted Under the 1995 Option Plan. The following table sets forth
certain information with respect to options awarded to the specified persons and
groups under the 1995 Option Plan through February 28, 1997:
<TABLE>
<CAPTION>
Name and Number
Principal Position of Shares Grant Date Exercise Price Expiration Date
------------------ --------- ---------- -------------- ---------------
<S> <C> <C> <C> <C>
Derrell C. Coker............................. 34,500 September 19, 1995 $7.63 to $8.60 September 19, 2005
President and Chief Executive Officer to to
July 16, 1996 July 16, 2006
Reginald B. McHone........................... 29,000 September 19, 1995 $7.63 to $8.60 September 19, 2005
Vice President, Finance and Administration, to to
Chief Financial Officer and Corporate July 16, 1996 July 16, 2006
Secretary
William F. Davies, Jr........................ 29,500 September 19, 1995 $7.63 to $8.60 September 19, 2005
Vice President, Manufacturing Operations to to
July 16, 1996 July 16, 2006
Jimmie C. Vernon............................. 29,500 September 19, 1995 $7.63 to $8.60 September 19, 2005
Vice President, Sales to to
July 16, 1996 July 16, 2006
Wallace E. Matthews.......................... 42,000 September 19, 1995 $7.63 to $8.60 September 19, 2005
Vice President, Technology to to
July 16, 1996 July 16, 2006
All current executive officers as a group.... 164,500 September 19, 1995 $7.63 to $8.60 September 19, 2005
(5 persons) to to
July 16, 1996 July 16, 2006
L. J. Sevin.................................. -- -- -- --
Director
Harvey B. Cash............................... -- -- -- --
Director
Dietrich Erdmann............................. -- -- -- --
Director
Jack Kilby................................... -- -- -- --
Director
Charles H. Phipps............................ -- -- -- --
Director
All current directors who are not executive
officers as a group.......................... -- -- -- --
(5 persons)
All Employees (including current officers who
are not executive officers) as a group....... 323,700 September 19, 1995 $7.63 to $8.60 September 19, 2005
(119 persons) to to
July 16, 1996 July 16, 2006
</TABLE>
The closing sales price of the Common Stock as of February 28, 1997 was
$17.75 per share, as reported on the Nasdaq National Market of The Nasdaq Stock
Market, Inc.
Certain Federal Income Tax Matters. For a discussion of the Federal income
tax consequences with regard to the grant and exercise of ISOs and NQSOs, see
"Proposal Two: Approval of Certain Amendments to the 1995 Option Plan --
Certain Federal Income Tax Matters."
-12-
<PAGE>
1995 Bonus Plan
In July 1995 the Board of Directors of the Company adopted the 1995 Bonus
Plan. The 1995 Bonus Plan is applicable to the Company's executive officers and
certain other key employees and consists of three components: (i) annual salary
increases consistent with industry practices; (ii) cash bonuses for performance
by the Company and the specific area of responsibility; and (iii) stock option
incentives rewarding long term Company performance.
Profit Sharing Program
In June 1995 the Board of Directors of the Company approved the Profit
Sharing Program, which provides for payment of quarterly profit sharing bonuses
to all eligible employees for fiscal quarters in which the Company achieves a
goal of 12% of pre-tax return on sales ("ROS") (before cash bonuses, profit
sharing, and the 401(k) Plan (as hereinafter defined) matching contributions)
and for discretionary annual matching contributions to participants in the
Company's 401(k) defined contribution savings plan (the "401(k) Plan").
Option Grants in Last Fiscal Year
The following table sets forth as to the Chief Executive Officer and each
of the other Named Executive Officers certain information with respect to
options to purchase shares of Common Stock granted during the fiscal year ended
December 31, 1996:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential realizable value
Number of at assumed annual rates of
securities Percent of total stock price appreciation
underlying options granted Exercise for option term/(4)/
options to employees in price Expiration --------------------------
Name granted/(1)/ fiscal year per share/(2)/ date/(3)/ 5% 10%
- - ---- ------------ ---------------- -------------- ------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Derrell C. Coker........ 22,000 5.8% $7.63 July 16, 2006 $105,566 $267,526
Reginald B. McHone...... 16,500 4.3% $7.63 July 16, 2006 $ 79,175 $200,644
William F. Davies, Jr... 17,000 4.5% $7.63 July 16, 2006 $ 81,574 $206,724
Jimmie C. Vernon........ 17,000 4.5% $7.63 July 16, 2006 $ 81,574 $206,724
Wallace E. Matthews..... 17,000 4.5% $7.63 July 16, 2006 $ 81,574 $206,724
</TABLE>
- - ---------------
(1) Options are exercisable beginning one year after the date of grant, with
25% of the shares covered thereby becoming exercisable on the first
anniversary of the grant date. An additional 2.08% of such shares become
exercisable each month thereafter until the earlier of (i) the date such
option is fully vested or (ii) the date such option terminates.
(2) The exercise price per share was equal to the closing sales price per share
on the date of grant, as reported on the Nasdaq National Market of The
Nasdaq Stock Market, Inc.
(3) Options were granted for a term of 10 years, subject to earlier
termination.
(4) Disclosure of the 5% and 10% assumed rates of appreciation are mandated by
the Securities and Exchange Commission and do not represent the Company's
estimate or projection of the future price of the Common Stock. The Common
Stock's closing sales price of $7.63 on the date of grant (July 16, 1996)
as reported by the Nasdaq National Market of The Nasdaq Stock Market, Inc.
was used as the base price for these calculations.
-13-
<PAGE>
Fiscal Year End Option Values
The following table sets forth as to the Chief Executive Officer and each
of the other Named Executive Officers certain information concerning option
holdings under the Option Plans:
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of securities Value of unexercised
Shares underlying unexercised options in-the-money options
Acquired on at fiscal year-end at fiscal year-end/(1)/
--------------------------------- -------------------------------
Name Exercise (#) Value Realized ($) (Exercisable/Unexercisable) (Exercisable/Unexercisable)
- - ---- ------------ ------------------ --------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Derrell C. Coker........ 8,750 $ 91,875 11,926/45,074 $ 192,308/$683,207
Reginald B. McHone...... 10,000 $ 142,700 62,863/43,637 $ 1,258,261/$692,831
William F. Davies, Jr... 25,000 $ 175,625 54,113/44,137 $ 1,073,430/$699,704
Jimmie C. Vernon........ 10,000 $ 65,600 44,113/44,137 $ 862,880/$699,704
Wallace E. Matthews..... 7,500 $ 104,275 36,957/45,043 $ 693,377/$661,313
</TABLE>
- - ---------------
(1) Values are based on the December 31, 1996 closing sales price as reported
on the Nasdaq National Market of The Nasdaq Stock Market, Inc. of $21.375
per share, less the per share exercise price.
Employment Agreements
There are no employment agreements between the Company and any of the Named
Executive Officers.
Under the 1989 Option Plan and 1995 Option Plan, the vesting of options
granted thereunder, including those granted to the Named Executive Officers may
accelerate in connection with certain transactions. See "1989 Option Plan" and
"1995 Option Plan."
Compensation of Directors
Directors are not reimbursed for expenses incurred in connection with their
attendance at Board and committee meetings, except they may be reimbursed for
expenses incurred in connection with travel to Board and committee meetings.
Directors are not compensated by the Company for their service as Board members
or for committee participation. However, Mr. Kilby received an option to
acquire 6,250 shares when he was elected to the Board in 1993. Directors are
reimbursed for expenses incurred in connection with special assignments for the
Company.
Compensation Committee Report on Executive Compensation
The Compensation Committee (the "Committee") of the Board of Directors was
formed in May 1995 and is composed entirely of non-employee Directors. Prior to
the formation of the Committee, decisions with respect to executive compensation
were made by the full Board of Directors.
The Committee is charged with the responsibility for administering and
interpreting officer and director compensation programs, although the full Board
of Directors may be consulted on matters of executive compensation. The
Committee's principle objectives are:
. to attract and retain qualified officers;
. to ensure that the Company's officers and key employees are fairly
compensated relative to industry practices;
. to reward the achievement of assigned objectives;
-14-
<PAGE>
. to encourage long-term contribution and sustained equity ownership by
officers and key employees; and
. to correlate to a meaningful degree overall compensation with
financial returns to the Company's stockholders.
The 1995 Bonus Plan and the Profit Sharing Program provide the major
components of executive compensation.
The 1995 Bonus Plan. The 1995 Bonus Plan is applicable to the Company's
executive officers and certain other key employees and consists of three
components: (i) annual salary increases consistent with industry practices; (ii)
cash bonuses for performance by the Company and the specific area of
responsibility; and (iii) stock option incentives rewarding long term Company
performance. Salaries are reviewed at least annually and are determined by the
Committee using whatever resources it deems advisable, including external
sources and personal experience, to confirm industry salary practices. In
addition, the Committee considers the performance of each individual, his
compensation history, his level of responsibility within the Company and his
individual talents. Mr. Derrell Coker, President and Chief Executive Officer of
the Company (the "CEO"), makes recommendations to the Committee regarding the
salaries of the Company Officers. Effective June 1, 1996, the base salary rate
increase for the Named Executive Officers averaged 8.5% from their prior salary.
Effective October 1, 1996, the Committee increased the base salary of four of
the five Named Executive Officers. These adjustments were made to bring the
compensation for certain positions into line with competitive industry
practices, as determined by the Committee. The rate increases averaged 10.9%
from the increase in June 1996.
Pursuant to the 1995 Bonus Plan, stock options may be granted to officers
and other employees in compliance with the terms of the 1989 Option Plan and the
1995 Option Plan. Stock option grants are generally made in an effort to ensure
the long-term contribution of officers and key employees. Individual awards
generally reflect the judgment of the Board of Directors or the Committee, as
then applicable, with respect to the grantee's relative contribution to the
Company's effort to improve the Company's financial performance. In 1996 the CEO
made recommendations to the Committee, regarding stock option grants. The Board
of Directors has been responsible for determining stock option awards made to
the CEO. In fiscal 1996, stock options were granted to all Named Executive
Officers.
Pursuant to the 1995 Bonus Plan, the Committee is responsible for the
establishment of specific target performance objectives for officers of the
Company. These objectives are intended to be integral to the achievement of the
annual financial and operating plan. In years when assigned objectives are met
or exceeded the Committee intends to recognize this achievement with substantial
bonus awards. In 1996 the CEO made recommendations to the Committee regarding
target performance objectives and percentages of salaries eligible for bonus
payments to individual officers. Bonuses awarded to the CEO were determined by
the Committee. In 1996, the Company exceeded all of the performance goals
established by the Committee. The cash bonuses accrued in 1996 for the Named
Executive Officers averaged $39,440.
The Profit Sharing Program. The Profit Sharing Program is intended to
provide incentives and rewards to all eligible employees of the Company for
excellent financial performance by the Company. Effective for the quarter ending
June 30, 1996, the Committee amended the 1995 Profit Sharing Program to restate
the minimum pre-tax ROS (before cash bonuses, profit sharing, and 401(k)
matching contributions) required to accrue and pay quarterly profit sharing from
15% to 12%. Consequently, the Company met or exceeded this minimum pre-tax ROS
in each of the last three quarters of 1996. Profit Sharing bonuses accrued in
1996 for the five Named Executive Officers averaged $5,658. Additionally, each
of the Named Executive Officers received $1,000 in 401(k) Plan matching
contributions.
-15-
<PAGE>
CEO Performance Evaluation
Effective June 1, 1996, the CEO's base salary rate was increased 7.5% from
$147,813 per year to $158,899 per year. In 1996 the Committee also granted the
CEO stock options to purchase 22,000 shares of the Company's Common Stock.
Additionally, effective October 1, 1996, the Committee increased the CEO's base
salary a further 12.7% to $179,000 to raise the CEO's salary to a level the
Committee deemed to be commensurate with the CEO position at comparable publicly
owned companies. In determining the amount of increases and the number of stock
options, the Committee considered the CEO's performance, his compensation
history and other subjective factors. The Committee believes that the CEO's
1996 cash compensation and stock option grant were justified by the Company's
financial progress and performance against the goals set by the Committee.
The foregoing report is given by the following members of the Committee:
L.J. Sevin
Harvey B. Cash
Jack Kilby
-16-
<PAGE>
Performance Graph
The following graph shows a comparison of cumulative total returns for the
Company, The Nasdaq Stock Market Index and The Nasdaq Electronic Components
Stocks Index from December 1, 1995, the date the Common Stock was first quoted
on the Nasdaq National Market of The Nasdaq Stock Market, Inc., through December
31, 1996, the last trading day of 1996. The closing price of the Common Stock
on December 1, 1995 of $8.50 was used as the base price for the investment in
the Company. The stock price performance graph assumes an investment of $100 in
the Company and the two indexes on December 1, 1995, and assumes the full
reinvestment of dividends.
[LINE GRAPH APPEARS HERE]
BENCHMARQ Microelectronics, Inc.
Stock Price Performance
<TABLE>
<CAPTION>
12/1/95 12/31/95 12/31/96
------- -------- --------
<S> <C> <C> <C>
BENCHMARQ Microelectronics, Inc. 100.00 95.59 251.47
Nasdaq Electronic Components Stock Index 100.00 91.42 158.03
Nasdaq Stock Market Index 100.00 99.84 122.82
</TABLE>
-17-
<PAGE>
CERTAIN TRANSACTIONS
In December 1992, the Company issued Subordinated Notes (herein so called)
in the aggregate principal amount of $2,000,000 to affiliates of L.J. Sevin and
Harvey B. Cash. Borrowings of $1,000,000 and $1,000,000 were made under the
Subordinated Notes in 1992 and 1993, respectively. As partial consideration for
obtaining such lending commitments, the Company granted such affiliates warrants
("Series E Warrants") to purchase an aggregate of 480,000 shares of its
Convertible Preferred Stock, Series E. As of the date of the Company's initial
public offering, the rights to purchase 360,000 shares of Convertible Preferred
Stock, Series E, were vested. Simultaneously with the consummation of the
Company's initial public offering, the vested portion of the Series E Warrants
was converted into warrants to purchase an aggregate of 90,000 shares of Common
Stock, exercisable at $4.00 per share. The Company used a portion of the net
proceeds from its initial public offering to retire the Subordinated Notes in
1995 prior to their maturity. As a result of the prepayment, the remaining
Series E Warrants did not vest. All of the Series E Warrants were exercised in
1996.
In connection with the establishment of the Company's equipment lease line
of credit with The First National Bank of Boston, L.J. Sevin provided a personal
guaranty of repayment up to a maximum of $187,500 plus certain interest and
costs. In connection with this guaranty, the Company issued to Mr. Sevin a
warrant (the "Series D Warrant"), exercisable at $.90 per share, to purchase
22,500 shares of its Convertible Preferred Stock, Series D. Simultaneously with
the consummation of the Company's initial public offering, the Series D Warrant
was converted into a warrant to purchase 5,625 shares of Common Stock,
exercisable at $3.60 per share, which were fully vested. This guaranty has
since been released, and all of the Series D Warrants were exercised in 1996.
PROPOSAL ONE:
ELECTION OF DIRECTORS
Six directors are to be elected at the Meeting, to hold office until the
next Annual Meeting of Stockholders or until their successors are elected and
qualify or their earlier resignation or removal. Unless such authority is
withheld, it is the intention of the persons named in the enclosed proxy to vote
such proxy for the election of each of the nominees named herein. If a
stockholder who executes and returns a proxy fails to specify how the proxy is
to be voted, the person acting under the proxy will vote such stockholder's
shares for the election of each of the nominees named herein.
If for any reason any nominee for director should become unavailable for
election, the proxies may be voted for the election of a substitute designated
by the Board of Directors, unless a contrary instruction is given on the proxy.
The Board of Directors has no reason to believe that any of the nominees will be
unavailable or unwilling to serve if elected, and all nominees have expressed an
intention to serve the entire term for which election is sought.
Nominees for Election to the Board
Derrell C. Coker, L. J. Sevin, Harvey B. Cash, Dietrich Erdmann, Jack Kilby
and Charles H. Phipps have been nominated by the Board of Directors for election
and currently are serving as directors of the Company.
Derrell C. Coker, 43, the founder of the Company, has served as President,
Chief Executive Officer and a director of the Company since the Company's
inception in March 1989. Prior to founding
-18-
<PAGE>
the Company, Mr. Coker was employed by Dallas Semiconductor Corporation, a
developer and manufacturer of electronic chips and chip-based subsystems, from
1984 to 1989, where most recently he was Vice President for Sales. Prior to
that, he was co-owner of Technology Sales Co., a manufacturers' representative
company, from 1982 to 1984. He also held various management, marketing and
engineering related positions with Mostek Corporation, a semiconductor
manufacturer, from 1973 to 1982.
L.J. Sevin, 66, has served as a director of the Company and as Chairman of
the Board since April 1989. He also serves as Chairman of the Company's
Compensation and Audit Committees. Mr. Sevin also serves as a director of
Proteon, Inc., a provider of data communications equipment and software, and
Cyrix Corporation, a semiconductor company. Since 1981, when he co-founded the
Sevin Rosen family of venture capital funds (the "Sevin Rosen Funds"), Mr. Sevin
has been involved principally in venture capital financing activities. He is a
general partner of the general partner of Sevin Rosen Fund II L.P. and is an
advisor to and limited partner of the general partner of Sevin Rosen Fund III
L.P., Sevin Rosen Fund IV L.P., and Sevin Rosen Fund V L.P., all of which are
venture capital funds. Prior to founding the Sevin Rosen Funds, Mr. Sevin
served for 11 years as the Chairman of the Board and Chief Executive Officer of
Mostek Corporation, of which he was a co-founder. Prior to founding Mostek
Corporation, Mr. Sevin was employed by Texas Instruments Incorporated, a
developer and manufacturer of electrical and electronic products, in its
Semiconductor Division. He holds B.S. and M.S. degrees in Electrical
Engineering from Louisiana State University.
Harvey B. Cash, 58, has served as a director of the Company since April
1989. He is also a member of the Company's Compensation and Audit Committees.
Mr. Cash has been a general partner of the general partner of InterWest
Partners, a venture capital fund, since 1985 and heads InterWest's Texas office.
He served as the managing general partner of the general partner of the Berry
Cash Southwest Partnership, a venture capital fund, from 1983 until its
dissolution in December 1996. Mr. Cash also serves as Chairman of the Board of
Cyrix Corporation and is a member of the boards of directors of ProNet, Inc., a
paging network company, Heritage Media Corporation, an acquiror of in-store,
media and other communications-related properties, Aurora Electronics, Inc., an
electronics recycling and asset recovery services company, AMX Corporation, a
manufacturer of integrated remote control systems and i2 Technologies, Inc., a
provider of planning and scheduling of manufacturing software and related
logistics software. 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 Corporation. He served as Vice President
of Marketing at Mostek Corporation, and its successor company, from 1969 to
1981. Mr. Cash was employed by Texas Instruments Incorporated as a marketing
manager from 1964 to 1969. Mr. Cash holds a B.S. degree in Electrical
Engineering from Texas A&M University and an M.B.A. from Western Michigan
University.
Dietrich Erdmann, 58, has served as a director of the Company since April
1989. Since 1983, he has been active as an international marketing consultant
and independent investor in several technology start-up companies. From 1981 to
1983 he served as Vice President, Electronics Group, for United Technology
Corporation, a diversified manufacturing corporation, with responsibility for
European electronics strategy. From 1970 to 1981 Mr. Erdmann was employed by
Mostek Corporation, where he held several positions in design, marketing and
sales, including Senior Vice President of International Marketing and Sales.
From 1965 to 1970, Mr. Erdmann was employed by Texas Instruments Incorporated in
integrated circuit design, application and sales positions. Mr. Erdmann holds a
B.S. degree in Electrical Engineering from State Engineering College in
Osnabruck, Germany and an M.S. degree in Computer Sciences from Southern
Methodist University.
-19-
<PAGE>
Jack Kilby, 73, has served as a director of the Company since April 1993.
He is also a member of the Company's Compensation and Audit Committees. Since
1970, Mr. Kilby has been an independent inventor and consultant. Mr. Kilby is a
member of the board of directors of Wyle Electronics, an electronics
distributor. He has served as a technical advisor to Semiconductor Research
Corporation, a research consortium of semiconductor manufacturers, the Houston
Area Research Council and the Department of Defense. Mr. Kilby held various
engineering positions at Texas Instruments Incorporated where he was employed
from 1958 to 1970. He is credited with the invention of the integrated circuit
in 1958 and is a named inventor on more than 50 patents. Mr. Kilby holds a B.S.
degree in Electrical Engineering from the University of Illinois and an M.S.
degree in Electrical Engineering from the University of Wisconsin.
Charles H. Phipps, 70, has served as a director of the Company since
February 1990. He has been affiliated with the Sevin Rosen Funds since 1987.
Mr. Phipps is a general partner of the partnerships which are the general
partners of Sevin Rosen Fund III L.P. and Sevin Rosen Fund IV L.P., both venture
capital funds. He is currently a member of the board of directors of T/R
Systems, an electrophotographic printing company, Silicon Video, a company
involved in the flat panel display industry, and Xante, a company which provides
specialized printer controllers for the graphic arts/publishing industry. Prior
to joining the Sevin Rosen Funds, Mr. Phipps was employed by Texas Instruments
Incorporated in various marketing and managerial positions from 1957 to 1986,
most recently as Vice President of Marketing and Strategic Development of the
Semiconductor Group, by Motorola, Inc., a diversified electronics company, from
1953 to 1956 and by General Electric Company, a diversified manufacturing
company, from 1949 to 1950 in various engineering positions. He holds a B.S.
degree in Electrical Engineering from Case Western Reserve University and an
M.B.A. from Harvard University.
Vote Required; Recommendation of the Board of Directors
To be elected a director, a nominee must receive the affirmative vote of
the holders of a plurality of the votes cast at the Meeting.
The Board of Directors unanimously recommends a vote FOR election of each
of the nominees named herein.
PROPOSAL TWO:
APPROVAL OF AMENDMENTS TO 1995 OPTION PLAN
The purposes of the 1995 Option Plan are to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to all employees and consultants of the Company and to
promote the success of the Company's business.
Under the terms of the 1995 Option Plan, stockholders must approve an
amendment to the 1995 Option Plan if, among other things, the amendment would
(i) increase the aggregate number of shares of Common Stock that may be issued
pursuant to options granted under the 1995 Option Plan or (ii) materially
increase the benefits accruing to holders of options under the 1995 Option Plan.
Effective January 29, 1997, the Board of Directors amended and restated the
1995 Option Plan, subject to stockholder approval, for items as set forth in (i)
and (ii) below.
-20-
<PAGE>
Certain other provisions of the 1995 Option Plan have also been amended for
clarification purposes; however, they are not deemed material changes and are
not hereby submitted to stockholders for ratification.
(i) Increase in Authorized Options. The Board of Directors has
------------------------------
amended and restated the 1995 Option Plan, subject to stockholder
approval, to increase the total number of shares of Common Stock
reserved for issuance by 750,000 shares from 500,000 to 1,250,000
shares, after considering that only 4,800 shares remained issuable
under the 1995 Option Plan and only 60,903 shares remained issuable
under the 1989 Option Plan as of January 29, 1997. On that date,
options to purchase 493,878 shares of Common Stock were outstanding
under the 1995 Option Plan at a weighted average exercise price of
$8.03 per share and options to purchase 737,777 shares of Common
Stock were outstanding under the 1989 Option Plan at a weighted
average exercise price of $3.45 per share. The increased reserved
shares of Common Stock will allow management to continue using stock
options to attract new personnel, to retain existing personnel, to
serve as long-term incentives and to provide employees and directors
with an ownership interest in the Company, which will help align
their financial interests with those of the stockholders.
(ii) Change to grant the Compensation Committee the Flexibility it
-------------------------------------------------------------
has in the 1989 Option Plan. The Board of Directors has amended and
---------------------------
restated the 1995 Option Plan, subject to stockholder approval, to
allow the Committee to, in addition to the powers that it already has
under the 1995 Option Plan, amend or modify any outstanding options
(with the consent of the optionee), to accelerate or defer (with the
consent of the optionee) the exercise date of any outstanding option
and accelerate the option vesting schedule if, in the sole discretion
of the Committee, the acceleration of such vesting schedule would be
in the best interest of the Company.
A copy of the 1995 Option Plan and all amendments thereto is included
herein as Exhibit A. A summary of certain provisions of the 1995 Option Plan,
---------
as amended is described above. Such summary does not purport to be complete and
is qualified in its entirety by reference to the provisions of the 1995 Option
Plan.
Certain Federal Income Tax Matters
Under current law, the Federal income tax consequences to an individual and
to the Company with regard to the grant and exercise of an ISO generally will,
under current law, be as follows:
An individual will not recognize any income upon the grant or exercise of
an ISO. If the individual does not dispose of the Common Stock acquired
pursuant to the exercise of an ISO until at least two years after the date the
ISO is granted and at least one year after exercise of the ISO, the individual
will recognize long-term capital gain upon the sale of the Common Stock in an
amount equal to the excess, if any, of his or her selling price for the Common
Stock over the option exercise price. In such case, the Company will not be
entitled to any tax deduction resulting from the issuance or sale of the Common
Stock. If the individual disposes of the Common Stock acquired pursuant to the
exercise of an ISO prior to the expiration of either two years from the date the
ISO is granted or one year from the date the ISO is exercised, any gain realized
will be taxable at such time as follows: (a) as ordinary income to the extent
of the difference between the option exercise price and the lesser of the fair
market value
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<PAGE>
of the Common Stock on the date the ISO was exercised or the amount realized
from such disposition, and (b) as capital gain to the extent of any excess of
the amount realized from such disposition over the fair market value on the date
of exercise, which gain shall be treated as short-term capital gain. In such
case, the Company may claim an income tax deduction (as compensation) for the
amount taxable to an individual as ordinary income.
In general, the difference between the fair market value of the Common
Stock at the time the ISO is exercised and the option exercise price will
constitute an item of adjustment for the optionee, for purposes of determining
alternative minimum taxable income, and under certain circumstances may be
subject, in the year in which the option is exercised, to the alternative
minimum tax.
If an individual uses Common Stock which he or she owns to pay, in whole or
in part, the exercise price for Common Stock acquired pursuant to an ISO, (a)
the holding period for the newly issued Common Stock equal in value to the old
Common Stock which was surrendered upon the exercise shall include the period
during which the old Common Stock was held, (b) the individual's basis in such
newly issued Common Stock will be the same as his or her basis in the old Common
Stock surrendered and (c) no gain or loss will be recognized by the individual
on the old Common Stock surrendered. However, if an employee uses Common Stock
previously acquired pursuant to the exercise of an ISO to pay all or part of the
exercise price under an ISO, such tender will constitute a disposition of such
previously acquired Common Stock for purposes of the one-year (or two-year)
holding period requirement applicable to such ISO and such tender may be treated
as a taxable exchange.
The Federal income tax consequences to an individual who receives NQSOs and
to the Company generally will, under current law, be as follows:
An individual will not recognize any income at the time the NQSO is
granted. Generally, an individual will recognize ordinary income, at the time
the NQSO is exercised, in a total amount equal to the excess of the then fair
market value of the Common Stock acquired over the exercise price. However,
Section 83 of the Code provides that, if an employee receives Common Stock
subject to a substantial risk of forfeiture (e.g., vesting requirements) or if a
director, officer or principal stockholder (i.e., an owner of more than ten
percent of the outstanding Common Stock) receives shares of Common Stock
pursuant to the exercise of a NQSO, he or she is not required to recognize any
income until the Common Stock is no longer subject to a substantial risk of
forfeiture or the date on which such shares can be sold at a profit without
liability under Section 16(b) of the Exchange Act, respectively. At such time,
the employee or director, officer or principal stockholder will recognize income
equal to the amount by which the then fair market value of the Common Stock
acquired pursuant to the exercise of such NQSO exceeds the price paid for such
Common Stock. Alternatively, an employee or director, officer or principal
stockholder who would not otherwise be taxed at the time the shares of Common
Stock are received may file a written election, within 30 days of such receipt,
with the Internal Revenue Service, to be taxed as of the date of receipt on the
difference between the then fair market value of the Common Stock and the price
paid for such Common Stock.
All income realized upon the exercise of a NQSO will be taxed as ordinary
compensation income, subject to withholding. The Company will be entitled to a
tax deduction (as compensation) for the amount taxable to an individual upon the
exercise of a NQSO, as described above, in the same year as those amounts are
taxable to the individual.
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<PAGE>
Common Stock issued pursuant to the exercise of a NQSO generally will
constitute a capital asset in the hands of an individual and will be eligible
for capital gain or loss treatment upon any subsequent disposition. The holding
period of such individual will commence upon the date he or she recognizes
income with respect to the issuance of such Common Stock, as described above.
The individual's basis in the Common Stock will be equal to the greater of his
or her fair market value as of that date or the amount paid for such Common
Stock. If, however, an individual uses Common Stock which he or she owns to
pay, in whole or in part, the exercise price for Common Stock acquired pursuant
to the exercise of a NQSO, (a) the holding period for the newly issued Common
Stock equal in value to shares of the old Common Stock which were surrendered
upon the exercise shall include the period during which the old Common Stock was
held, (b) the individual's basis in such newly issued Common Stock will be the
same as his or her basis in the surrendered Common Stock, (c) no gain or loss
will be realized by the individual on the old Common Stock surrendered, and (d)
the individual will realize ordinary compensation income in an amount equal to
the fair market value of the additional number of shares of Common Stock
received over and above the number of shares of old Common Stock surrendered.
In addition to the Federal income tax consequences discussed above, Section
280G of the Code provides that if an officer, stockholder or highly compensated
individual receives a payment which is in the nature of compensation and which
is contingent upon a change in control of the employer, and such payment equals
or exceeds three times his or her "base salary" (as defined below), then any
amount received in excess of base salary shall be considered an "excess
parachute payment." An individual's "base salary" is equal to his or her
average annual compensation over the five-year period (or period of employment,
if shorter) ending with the close of the individual's taxable year immediately
preceding the taxable year in which the change in control occurs. If the
taxpayer establishes, by clear and convincing evidence, that an amount received
is reasonable compensation for past or future services, all or a portion of such
amount may be deemed not to be an excess parachute payment. If any payments
made under the Option Plans in connection with a change in control of the
Company constitute excess parachute payments with respect to any individual (and
such payments are not reduced or eliminated pursuant to the terms of the Option
Plans), then in addition to any income tax which would otherwise be owed on such
payment, the individual will be subject to an excise tax equal to 20% of such
excess parachute payment and the Company will not be entitled to any tax
deduction to which it otherwise would have been entitled with respect to such
excess parachute payment.
Section 280G provides that payments made pursuant to a contract entered
into within one year of the change in control are presumed to be parachute
payments unless the individual establishes, by clear and convincing evidence,
that such contract was not entered into in contemplation of a change in control.
In addition, the General Explanation of the Tax Reform Act of 1984 prepared by
the Staff of the Joint Committee on Taxation indicates that the grant of an
option within one year of the change in control or the acceleration of an option
because of a change in control may be considered a parachute payment, in an
amount equal to the value of the option or the value of the accelerated portion
of the option, as the case may be. Pursuant to proposed regulations issued by
the Treasury Department under Section 280G, the acceleration of a NQSO because
of a change in control is considered a parachute payment in an amount equal to
the value of the accelerated portion of the NQSO. Even if the grant of an
option within one year of the change in control or the acceleration of an option
is not a parachute payment for purposes of Section 280G, the exercise of an
option granted within one year of the change in control or the exercise of the
accelerated portion of an option may result in a parachute payment, in an amount
equal to the excess of the fair market value of the Common Stock received upon
exercise of the option over the exercise price. Payments received for the
cancellation of an option because of a change in control may also result in
parachute payments.
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<PAGE>
Under Section 162(m) of the Code, publicly held companies may not deduct
compensation for certain employees to the extent that such compensation exceeds
$1 million for the taxable year. The $1 million limitation applies to the
Company's Chief Executive Officer and the four most highly compensated officers
other than the Chief Executive Officer. Compensation which is performance based
(as defined in the Code and rules and regulations thereunder), however, is not
counted as subject to the deductibility limitation of Section 162(m). The
options under the Option Plans may not qualify as performance-based compensation
and, therefore, the compensation expense incurred by the Company with respect to
the options may not be exempt from the limitations of Section 162(m).
The foregoing summary with respect to Federal income taxation does not
purport to be complete and reference is made to the applicable provisions of the
Code.
Vote Required; Recommendation of the Board of Directors
The affirmative vote of a majority of the votes cast is required for the
adoption of the proposal to approve the above-referenced amendments to the 1995
Option Plan.
The Board of Directors unanimously recommends that stockholders vote FOR
the adoption of the proposal to approve the above-referenced amendments to the
1995 Option Plan.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Commission. Should a
stockholder intend to present a proposal at the Company's 1998 Annual Meeting of
Stockholders, it must be received by the Secretary of the Company, 17919
Waterview Parkway, Dallas, Texas 75252, not later than November 11, 1997, to be
included in the Company's proxy statement and form of proxy relating to that
meeting.
SOLICITATION PROCEDURES
The Company has engaged Boston EquiServe, L.P. ("Boston EquiServe") to act
as the Company's transfer agent, registrar and proxy solicitor for the Company's
annual meeting for a fixed monthly administrative fee. No additional fee is
charged by Boston EquiServe specifically for assisting the Company in soliciting
proxies for the Meeting, but the Company does reimburse Boston EquiServe for
reasonable out of pocket expenses. In addition, officers and regular employees
of the Company, without extra compensation, may solicit the return of proxies by
mail, telephone, telegram or personal interview. Certain holders of record,
such as brokers, custodians and nominees, are being requested to distribute
proxy materials to beneficial owners and to obtain such beneficial owners'
instructions concerning the voting of proxies.
The cost of solicitation of proxies pursuant to this Proxy Statement
(including the cost of reimbursing banks, brokerage houses and other custodians,
nominees and fiduciaries for their reasonable expenses in forwarding proxy
soliciting material to beneficial owners) will be paid by the Company.
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<PAGE>
INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Ernst & Young LLP as
the Company's independent auditors for 1997. Ernst & Young LLP, a certified
public accounting firm, has served as the Company's independent auditors since
1989.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting to respond to appropriate questions and to make such statements as they
may desire.
MISCELLANEOUS
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 1996 has previously been sent or is concurrently being sent to
stockholders of the Company. The Annual Report to Stockholders is not part of
the proxy solicitation materials.
The information set forth in this Proxy Statement under the captions
"Compensation Committee Report on Executive Officer Compensation" and "Executive
Compensation -- Performance Graph" shall not be deemed to be (i) incorporated by
reference into any filing by the Company under the Securities Act or the
Exchange Act, except to the extent that in any such filing the Company expressly
so incorporates such information by reference, and (ii) "soliciting material" or
to be "filed" with the Commission.
Where information contained in this Proxy Statement rests particularly
within the knowledge of a person other than the Company, the Company has relied
upon information furnished by such person or contained in filings made by such
person with the Commission.
By Order of the Board of Directors
/s/ Reginald B. McHone
Reginald B. McHone
Vice President, Finance and Administration, Chief
Financial Officer and Corporate Secretary
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<PAGE>
EXHIBIT A
BENCHMARQ MICROELECTRONICS, INC.
1995 FLEXIBLE STOCK OPTION PLAN
(Amended and Restated as of March 11, 1997)
I
Purpose of Plan; Administration
-------------------------------
1.1 Purpose. The purpose of the BENCHMARQ Microelectronics, Inc. 1995
-------
Flexible Stock Option Plan (the "Plan") is to strengthen BENCHMARQ
Microelectronics, Inc. (the "Company") by providing a means of retaining and
attracting competent personnel by extending to participating officers,
employees, directors and consultants (as defined in Section 1.3) of the Company,
or of a Parent or Subsidiary (as defined herein) of the Company, added long-term
incentives for high levels of performance and for unusual efforts designed to
improve the financial performance of the Company. It is intended that this
purpose be achieved through the opportunity for ownership of shares of the
common stock, par value $.001 per share, of the Company (the "Stock") and the
benefits of stock appreciation offered under the Plan. It is further intended
that pursuant to this Plan the Committee (as defined in Section 1.2) may grant
either incentive stock options as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or nonqualified stock options. As used
herein, the term "Parent" will be deemed to have the meaning set forth in
Section 424(e) of the Code and the term "Subsidiary" will be deemed to have the
meaning set forth in Section 424(f) of the Code.
1.2 Administration. The Plan shall be administered by the Compensation
--------------
Committee (the "Committee") established by the Board of Directors of the Company
(the "Board"). Such Committee shall be comprised of two (2) or more directors,
each of whom shall be "non-employee directors," as defined in Rule 16b-3,
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
Subject to the express provisions of the Plan, the Committee shall have the
authority to construe and interpret the Plan, to define the terms used in the
Plan, to prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, to determine the duration and purposes of leaves of
absence which may be granted to participants without constituting a termination
of their employment or other service for purposes of the Plan to amend or modify
any outstanding option (with the consent of the Optionee (as defined herein)),
to accelerate or defer the exercise date of any outstanding option (with the
consent of the Optionee), and to make all other determinations necessary or
advisable for the administration of the Plan. The determinations of the
Committee on all matters referred to in this Plan shall be conclusive. No
member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
Subject to the express provisions of the Plan, the Committee shall determine
from the eligible class those individuals to whom incentive stock options or
nonqualified stock options under the Plan shall be granted (the "Optionees"),
the terms and provisions (which need not be identical) of the respective
agreements (the "Option Agreements") evidencing such options, the time at which
options shall be granted, and the number of shares of Stock subject to each
option.
1.3 Participation. Officers, employees, directors and consultants of the
-------------
Company or any Parent or Subsidiary of the Company shall be eligible for
selection to participate in the Plan upon approval by the Committee; provided,
however, that only those individuals who are employed by the Company or a Parent
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<PAGE>
or Subsidiary of the Company shall be eligible to receive incentive stock
options. For purposes of the Plan, the term "consultant" shall mean any person
or entity who or which is engaged by the Company or a Parent or Subsidiary of
the Company to render consulting services and is compensated for such consulting
services.
1.4 Stock Subject to the Plan. Subject to adjustment as provided in Section
-------------------------
3.1 hereof, the shares to be offered under the Plan shall be treasury shares or
shares of the Company's authorized but unissued Stock. The aggregate number of
shares of Stock to be issued upon exercise of all options granted under the Plan
shall not exceed 1,247,576 shares (after giving effect to all exercises of
options prior to March 11, 1997), subject to adjustment as set forth in Sections
3.1 hereof. The aggregate number of shares of Stock to be issued to any
individual within any calendar year shall not exceed 100,000 shares. If any
option granted hereunder shall lapse or terminate for any reason without having
been fully exercised, the shares subject thereto shall again be available for
purposes of the Plan.
1.5 Restrictions on Exercise. No options granted hereunder may be exercised
------------------------
and no shares of Stock issuable upon exercise of such options may be transferred
unless and until the Committee determines that such exercise/transfer will be
made in compliance with all applicable laws, rules and regulations, including,
without limitation, applicable securities laws, rules and regulations and the
rules and regulations of any securities exchange or automated transaction
reporting system on which the securities of the Company are listed or admitted
to trading. The Company does not have any obligation to take any action to
register or qualify shares of Stock pursuant to applicable securities laws or to
perfect an exemption from such registration/qualification requirements. As a
condition to the exercise of an option, the Company may require the person
exercising such option to represent and warrant at the time of any such exercise
that the shares of Stock are being purchased only for investment and without any
present intention to sell or distribute such shares of Stock if, in the opinion
of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.
II
Stock Options
-------------
2.1 Grant and Option Price. The Committee may grant one or more options to
----------------------
any eligible individual. Options granted under the Plan shall be granted within
ten (10) years from the earlier of the date the Plan is adopted by the Board or
approved by the stockholders of the Company, and such options may be intended to
qualify as Incentive Stock Options (as hereinafter defined), or the Committee
may in its discretion grant nonqualified stock options under the Plan. All
options shall be subject to the terms and conditions set forth in the Plan and
such other terms and conditions established by the Committee as are not
inconsistent with the purposes and provisions of the Plan.
Except as otherwise provided herein, the purchase price of the Stock covered
by each option shall be determined by the Committee and set forth in the Option
Agreement, but as to Stock covered by an Incentive Stock Option the purchase
price shall not be less than 100% of the Fair Market Value (as such term is
defined in this Section 2.1) of such Stock on the date of the grant of the
option. Notwithstanding the foregoing, the purchase price of Stock covered by
an Incentive Stock Option granted to any individual who owns or is deemed to own
more than 10% of the total combined voting power and value of all classes of
stock of the Company, its Parent, if any, or a Subsidiary, shall not be less
than 110% of the Fair Market Value (as such term is defined in this Section 2.1)
of such Stock on the date of the grant of the option. For purposes of the Plan,
the term "Fair Market Value" on any date shall mean (i) if the Stock is listed
or admitted to trade on a national securities exchange, the closing price of the
Stock on the Composite Tape, as published in the Wall Street Journal, of the
principal national securities exchange on which the Stock is so listed or
admitted to trade, on such date or, if there is no trading of the Stock on
A-2
<PAGE>
such date, then the closing price of the Stock as quoted on such Composite Tape
on the next preceding date on which there was trading in such shares; (ii) if
the Stock is not listed or admitted to trade or a national securities exchange,
then the closing price of the Stock as quoted on the National Market System of
the National Association of Securities Dealers, Inc. ("NASD"); (iii) if the
Stock is not listed or admitted to trade on a national securities exchange or
the National Market System of the NASD, the mean between the bid and asked price
for the Stock on such date, as furnished by the NASD through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information; or (iv) if the
Stock is not listed or admitted to trade on a national securities exchange or
the National Market System of the NASD and if bid and asked prices for the Stock
are not so furnished by the NASD or a similar organization, the values
established by the Committee for purposes of granting options under the Plan.
In addition to the above rules, Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
2.2 Stock Option Agreement. Subject to the provisions of Section 1.2 hereof,
----------------------
each option granted pursuant to the Plan shall be evidenced by a Stock Option
Agreement in substantially the form of Exhibit "A" or "B" attached hereto and
incorporated fully herein by reference (each, an "Option Agreement"). Exhibit
"A" shall be used whenever such option is intended to be an "incentive stock
option" within the meaning of Section 422 of the Code ("Incentive Stock
Option"). Exhibit "B" shall be used whenever such option is intended to be a
nonqualified stock option, as determined in the sole and absolute discretion of
the Committee.
2.3 Option Period. Except as otherwise provided herein, each option and all
-------------
rights or obligations thereunder shall expire on such date as the Committee
shall determine (the "Expiration Date"), but not later than the tenth
anniversary of the date on which the option is granted, and shall be subject to
earlier termination as hereinafter provided. Notwithstanding the foregoing, the
Expiration Date of an Incentive Stock Option granted to any individual who owns
or is deemed to own more than 10% of the total combined voting power and value
of all classes of stock of the Company, its Parent, if any, or a Subsidiary,
shall be a date which is not later than the fifth anniversary of the date on
which the option is granted, and shall be subject to earlier termination as
hereinafter provided.
2.4 Terms of Options. Each option granted under this Plan by its terms shall
----------------
require the officer, employee, director or consultant granted such option to
remain in the continuous employ or service of the Company or of a Parent or
Subsidiary of the Company for such period of time, if any, from the date of
grant of such option before the right to exercise any part of the option will
accrue as the Committee may determine at the time of granting such option.
2.5 Exercise of Options. Each option shall become exercisable and the total
-------------------
number of shares of Stock subject thereto shall be as the Committee shall
determine, as set forth in the Option Agreement evidencing such option. The
purchase price of the Stock purchased upon exercise of an option shall be paid
in full in cash or by check at the time of each exercise of an option or by such
other consideration as may be provided for in the Option Agreement by the
Committee; provided, however, that if the Option Agreement so provides and upon
receipt of all regulatory approvals, the person exercising the option may
deliver, in payment of a portion or all of the purchase price, shares of Stock,
including a multiple series of exchanges of such Stock, which shall be valued at
the Fair Market Value of such Stock on the date of exercise of the option. No
options shall be exercisable except in respect of whole shares of Stock.
2.6 Nontransferability of Options. An option granted under the Plan shall,
-----------------------------
by its terms, be nontransferable by the Optionee other than by will or by the
laws of descent and distribution, and shall be exercisable during the Optionee's
lifetime only by the Optionee or by the Optionee's duly appointed guardian or
personal representative.
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<PAGE>
2.7 Termination of Relationship.
---------------------------
(a) If the employment or other service of the Optionee is terminated for
any reason other than (i) Disability (as hereinafter defined) of the Optionee,
or (ii) death of the Optionee, an option (to the extent otherwise exercisable
on the date of such termination) shall be exercisable by the Optionee at any
time prior to the Expiration Date of the option or within thirty (30) days
after the date of such termination of employment or other service, whichever
is the shorter period.
(b) If the Optionee's employment or other service is terminated by reason
of the Optionee's Disability, an option (to the extent otherwise exercisable
on the date of the Optionee's termination of employment or other service by
reason of Disability) shall be exercisable by the Optionee at any time prior
to the Expiration Date of the option or within twelve (12) months after the
date of such termination, whichever is the shorter period. As used herein,
the term "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12)
months. The determination of whether or not an Optionee's employment or
service is terminated by reason of Disability shall be in the sole and
absolute discretion of the Committee. An individual shall not be considered
Disabled unless he furnishes proof of the existence thereof in such form and
manner, and at such times, as the Committee may require.
(c) If an Optionee dies while in the employ or other service of the
Company or of a Parent of Subsidiary of the Company, the option shall be
exercisable (to the extent otherwise exercisable on the date of the death of
such Optionee) by the person or persons entitled to do so under the Optionee's
will, or, if the Optionee shall fail to make testamentary disposition of said
option or shall die intestate, by the Optionee's legal representative or
representatives, at any time prior to the Expiration Date of the option or
within twelve (12) months after the date of such death, whichever is the
shorter period.
(d) If an Optionee dies within thirty (30) days after his termination of
employment or other service, or within the twelve-month period described in
subsection (b) above, an option shall be exercisable (to the extent otherwise
exercisable on the date of such termination) by the person or persons entitled
to do so under the Optionee's will, or, if the Optionee shall fail to make
testamentary disposition of said option or shall die intestate, by the
Optionee's legal representative or representatives, at any time prior to the
Expiration Date of the option or within three (3) months after the date of
death, whichever is the shorter period.
2.8 Issuance of Stock Certificates. Upon exercise of an option, but subject
------------------------------
to the provisions of Section 3.6 of this Plan, the person exercising the option
shall be entitled to one (1) stock certificate evidencing the shares of Stock
acquired upon such exercise; provided, however, that any person who tenders
shares of Stock in payment of a portion or all of the purchase price of Stock
purchased upon exercise of the option shall be entitled to receive a separate
certificate representing the number of shares purchased in consideration of the
tender of such Stock.
2.9 Limitation on Grant of Incentive Stock Options. The aggregate Fair
----------------------------------------------
Market Value (determined at the time the option is granted) of the Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an Optionee during any calendar year (under all such plans of the individual's
employer and its Parent or Subsidiary) shall not exceed $100,000. In the event
the limits of this Section 2.9 would otherwise be exceeded, the Optionee may
still exercise his option, but such option, to the extent of such excess, shall
be deemed to be a nonqualified stock option.
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<PAGE>
2.10 Other Limitations. The Board shall impose any other limitations on the
-----------------
terms and conditions of Incentive Stock Options granted under the Plan required
in order that such options qualify as Incentive Stock Options as that term is
defined in Section 422 of the Code.
2.11 "Stand-Off" Agreement. By exercising an option granted under the Plan,
---------------------
each Optionee will be deemed to have agreed for a period of time (not to exceed
90 days, but up to 270 days if approved by a majority of the Board) from the
effective date of any registration (other than a registration effected solely to
implement an employee benefit plan or a transaction to which Rule 145
promulgated under the Securities Act of 1933, as amended (the "Act"), is
applicable) of securities of the Company (upon request of the Company or of the
underwriters managing any underwritten offering of the Company's securities) not
to sell, make any short sale of, loan, grant any option for the purchase of, or
otherwise dispose of any shares of Stock received upon exercise of an option or
any shares of Stock covered by an option granted under the Plan, other than
shares of Stock included in the registration, without the prior written consent
of the Company or such underwriters, as the case may be.
2.12 Vesting and Exercise of Vested Options. Each option granted pursuant to
--------------------------------------
the Plan may only be exercised to the extent that the Optionee is vested in such
option. Each option shall vest separately in accordance with the option vesting
schedule determined by the Committee, which will be incorporated into the Option
Agreement entered into between the Company and such Optionee. The option
vesting schedule may be accelerated if, in the sole discretion of the Committee,
the acceleration of the option vesting schedule would be in the best interests
of the Company.
III
Other Provisions
----------------
3.1 Adjustments Upon Changes in Capitalization or Merger. Subject to any
----------------------------------------------------
required action by the stockholders of the Company, the number of shares of
Stock covered by each outstanding option, and the aggregate number of shares of
Stock which have been authorized for issuance under the Plan, as well as the
exercise price per share of Stock covered by each such outstanding option, shall
be proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a stock split or the payment of a stock dividend
with respect to the Stock or any other increase or decrease in the number of
issued shares of Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration".
Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Stock subject to an option.
In the event of the dissolution or liquidation of the Company, each Option
shall terminate as of a date to be fixed by the Committee; provided, however,
that not less than thirty (30) days' written notice of the date so fixed shall
be given to each Optionee. During such period each option which has not
previously been terminated, exercised or cancelled will fully vest and become
exercisable (subject to the expiration of the term of such option),
notwithstanding the vesting schedule set forth in the Option Agreement
evidencing the grant of such option or any performance based restriction. Upon
the date fixed by the Committee, any unexercised option shall terminate and be
of no further effect.
If a Corporate Transaction (as hereinafter defined) is consummated and
immediately following the consummation of such Corporate Transaction the persons
who were holders of shares of Stock immediately prior to the consummation of
such Corporate Transaction do not receive any securities or
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<PAGE>
other property ("Corporate Transaction Consideration") as a result of such
Corporate Transaction and continue to hold solely the shares of Stock held by
them immediately prior to the consummation of such Corporate Transaction, the
options will remain outstanding and will continue in full force and effect
(without any modification) following the consummation of such Corporate
Transaction.
If a Corporate Transaction is consummated and immediately following the
consummation of such Corporate Transaction the persons who were holders of
shares of Stock immediately prior to the consummation of such Corporate
Transaction do receive Corporate Transaction Consideration as a result of such
Corporate Transaction or do not continue to hold solely the shares of Stock held
by them immediately prior to the consummation of such Corporate Transaction, the
terms and conditions of the options will be modified as follows:
(i) If the documentation pursuant to which a Corporate Transaction will be
consummated provides for the assumption by the entity issuing Corporate
Transaction Consideration to the persons who were the holders of shares of
Stock immediately prior to the consummation of such Corporate Transaction of
the options granted pursuant to the Plan without any modification or amendment
(other than Permitted Modifications (as hereinafter defined)), such options
will remain outstanding and will continue in full force and effect, subject to
the Permitted Modifications, following the consummation of such Corporate
Transaction.
(ii) If the documentation pursuant to which a Corporate Transaction will be
consummated does not provide for the assumption by the entity issuing
Corporate Transaction Consideration to the persons who were the holders of
shares of Stock immediately prior to the consummation of such Corporate
Transaction of the options granted pursuant to the Plan without any
modification or amendment (other than Permitted Modifications), all vesting
restrictions (performance based or otherwise) will accelerate and the holders
of such options may (subject to the expiration of the term of such options)
exercise such options without regard to such vesting restrictions during the
ten (10) day period immediately preceding the consummation of such Corporate
Transaction. For purposes of the immediately preceding sentence, all
performance based goals will be deemed to have been satisfied in full. The
Company will provide each Optionee with reasonable notice of the termination
of such vesting restrictions and the impending termination of such options.
Upon the consummation of such a Corporate Transaction, all unexercised options
will automatically terminate and cease to be outstanding.
As used herein, the term "Corporate Transaction" will be deemed to mean any sale
of all or substantially all of the assets of the Company or the merger of the
Company with or into another corporation. As used herein, the term "Permitted
Modifications" will be deemed to mean any modification of an option which is
made in connection with a Corporate Transaction and which provides that
subsequent to the consummation of the Corporate Transaction (i) the exercise
price of such option will be proportionately adjusted to reflect the exchange
ratio applicable to the particular Corporate Transaction and/or (ii) the nature
and amount of consideration to be received upon exercise of the option will be
the same (on a per share basis) as was received by persons who were holders of
shares of Stock immediately prior to the consummation of the Corporate
Transaction.
Notwithstanding the foregoing, in the event of the consummation of a Corporate
Transaction in which a Change in Control (as hereinafter defined) occurs, all
vesting restrictions (performance based or otherwise) applicable to options will
accelerate and the holders of such options may (subject to the expiration of the
term of such options) exercise such options without regard to such vesting
restrictions. For purposes of the immediately preceding sentence, all
performance based goals will be deemed to have been satisfied in full. As used
herein, the term "Change in Control" will be deemed to mean (i) a merger
A-6
<PAGE>
of the Company with or into another corporation is consummated, other than a
merger that would result in the holders of voting securities of the Company
outstanding immediately prior thereto owning (directly or indirectly) not less
than fifty percent (50%) of the combined voting power of the voting securities
of the surviving or resulting entity outstanding immediately after such merger
or (ii) an agreement for the sale or other disposition of all or substantially
all of the Company's assets (evaluated on a consolidated basis, without regard
to whether the sale or disposition is effected via a sale or disposition of
assets of the Company, the sale or disposition of the securities of one or more
Subsidiaries of the Company or the sale or disposition of the assets of one or
more Subsidiaries of the Company) is consummated.
3.2 Continuation of Employment. Nothing contained in the Plan (or in any
--------------------------
option granted pursuant to the Plan) shall confer upon any Optionee any right to
continue in the employ or other service of the Company or any Parent or
Subsidiary or constitute any contract or agreement of employment or interfere in
any way with the right of the Company or any Parent or Subsidiary to reduce any
person's compensation from the rate in existence at the time of the granting of
an option or to terminate such person's employment or other service. Nothing
contained herein or in any Option Agreement shall affect any other contractual
rights of an employee.
3.3 Withholding. The Company or the Parent or any Subsidiary of the Company
-----------
shall have the right to deduct any sums that the Committee reasonably determines
that federal, state or local tax law requires to be withheld with respect to the
exercise of any option or as otherwise may be required by those laws. The
Company or the Parent or any Subsidiary of the Company may require as a
condition to issuing shares of Stock upon exercise of an option that the
Optionee or other person exercising the option pay any sums that federal, state
or local tax law requires to be withheld with respect to the exercise. Neither
the Company nor the Parent or any Subsidiary of the Company shall be obligated
to advise any Optionee of the existence of the tax or the amount which the
employer corporation will be so required to withhold. Upon the exercise of a
nonqualified stock option, if tax withholding is required, an Optionee may, with
the consent of the Committee, have shares of Stock withheld ("Share
Withholding") by the Company from the shares of Stock otherwise to be received;
provided, that if the Optionee is subject to the provisions of Section 16 under
- - --------
the Exchange Act, no Share Withholding shall be permitted unless such
transaction complies with the requirements of Rule 16b-3 promulgated under the
Exchange Act. The number of shares so withheld should have an aggregate Fair
Market Value on the date of exercise sufficient to satisfy the applicable
withholding taxes.
3.4 Amendment and Termination. The Board may at any time suspend or
-------------------------
terminate the Plan and may, with the consent of the holder of an option, make
such modifications of the terms and conditions of such holder's option as it
shall deem advisable. No option may be granted during any suspension of the
Plan or after such termination. The amendment, suspension or termination of the
Plan shall not, without the consent of the Optionee, alter or impair any rights
or obligations under any option theretofore granted under the Plan.
The Board may at any time amend the Plan as it shall deem advisable without
further action on the part of the stockholders of the Company; provided, that
--------
the Board may not amend any provision of the Plan relating to the amount and
price of Stock subject to the option granted hereunder or the timing of grants
hereunder more than once every six (6) months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the rules
thereunder; and provided further, that any amendment to the Plan must be
-------- -------
approved by the stockholders of the Company, if the amendment would (i) increase
the aggregate number of shares of Stock which may be issued pursuant to options
granted under the Plan; (ii) change the minimum option price; (iii) increase the
maximum terms of options provided for herein; (iv) materially modify the
requirements as to eligibility for participation in the Plan;
A-7
<PAGE>
(v) remove the administration of the Plan from the Committee; or (vi) materially
increase the benefits accruing to holders of options under the Plan.
Notwithstanding the above, the Committee may grant to an Optionee, if he is
otherwise eligible, additional options or, with the consent of the Optionee, may
grant a new option in lieu of an outstanding option, at a price and for a term
which in any respect is greater or less than that of the earlier option, subject
to the general limitations of Article II hereof.
3.5 Time of Grant and Exercise. The granting of an option pursuant to the
--------------------------
Plan shall take place at the time of the Committee's action, as described in
Section 2.1 hereof; provided, however, that if the appropriate resolutions of
the Committee indicate that an option is to be granted as of and at some future
date, the date of grant shall be such future date. In the event action by the
Committee is taken by written consent of its members, the action by the
Committee shall be deemed to have been taken at the time the last member
required for a valid action of the Committee signs the consent.
An option shall be deemed to be exercised when the Secretary of the Company
receives written notice of such exercise from the person entitled to exercise
the option together with payment of the purchase price made in accordance with
Section 2.5 of this Plan.
3.6 Privileges of Stock Ownership; Non-Distributive Intent. The holder of an
------------------------------------------------------
option shall not be entitled to the privileges of ownership as to any shares of
Stock not actually issued and delivered to the holder. Upon exercise of an
option for Stock at a time when there is not in effect under the Act a
registration statement relating to the shares of Stock issuable upon exercise
thereof or not available for delivery a prospectus, the holder of the option
shall represent and warrant in writing to the Company that, inter alia, the
----- ----
shares of Stock purchased are being acquired for investment and not with a view
to the resale or distribution thereof. No shares of Stock shall be issued upon
the exercise of any option unless and until there shall have been compliance
with any then applicable requirements of the Securities and Exchange Commission
(the "Commission"), other regulatory agencies having jurisdiction and any
exchanges or automated quotation systems upon which securities subject to the
option may be listed or admitted to trading.
3.7 Effective Date of the Plan. The Plan shall be effective upon approval by
--------------------------
the affirmative vote of the holders of a majority of the outstanding shares of
Stock present and entitled to vote at a meeting duly held or by the written
consent of the holders of a majority of the shares of Stock entitled to vote.
3.8 Expiration. Unless previously terminated by the Board, the Plan shall
----------
expire at the close of business on the date which is the last day of the ten
(10) year period beginning on the date on which the stockholders approve the
Plan, and no option shall be granted under it thereafter, but such expiration
shall not affect any option theretofore granted.
3.9 Governing Law. The Plan and the options issued hereunder shall be
-------------
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and performed within that State.
3.10 No Liability for Good Faith Determinations. Neither the members of the
------------------------------------------
Board nor any member of the Committee shall be liable for any act, omission or
determination taken or made in good faith with respect to the Plan or any option
granted under it.
3.11 Execution of Receipts and Releases. Any payment or any issuance or
----------------------------------
transfer of shares of Stock to the Optionee, or to his legal representative,
heir, legatee or distributee, in accordance with the
A-8
<PAGE>
provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Board may require any Optionee, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
3.12 Company Records. Records of the Company or any Parent or Subsidiary of
---------------
the Company regarding the Optionee's period of employment or other service,
termination of employment or other service and the reason therefor, leaves of
absence, re-employment and other matters shall be conclusive for all purposes
hereunder, unless determined by the Board to be incorrect.
3.13 Information. The Company or any Parent or Subsidiary of the Company
-----------
shall, upon request or as may be specifically required hereunder, furnish or
cause to be furnished all of the information or documentation which is necessary
or required by the Board or the Committee to perform its duties and functions
under the Plan.
3.14 No Liability of Company. The Company assumes no obligation or
-----------------------
responsibility to the Optionee or his personal representatives, heirs, legatees
or distributees for any act of, or failure to act on the part of, the Board or
the Committee.
3.15 Company Action. Any action required of the Company shall be by
--------------
resolution of its Board or by a person authorized to act by Board resolution.
3.16 Severability. In the event any provision of this Plan shall be held to
------------
be illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions hereof, but shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
3.17 Notice. Whenever any notice is required or permitted hereunder, such
------
notice must be in writing and personally delivered or sent by mail. Except as
otherwise provided in Section 3.5 of this Plan, any notice required or permitted
to be delivered hereunder shall be deemed to be delivered on the date on which
it is personally delivered or, whether actually received or not, on the third
(3rd) business day after it is deposited in the United States mail, certified or
registered, postage pre-paid, addressed to the person who is to receive it at
the address which such person has theretofore specified by written notice
delivered in accordance herewith. The Company or an Optionee may change, at any
time and from time to time, by written notice to the other, the address which it
or he had theretofore specified for receiving notices. Until it is changed in
accordance herewith, the Company and each Optionee shall specify as its and his
address for receiving notices the address set forth in the Option Agreement
pertaining to the shares to which such notice relates.
3.18 Waiver of Notices. Any person entitled to notice hereunder may waive
-----------------
such notice.
3.19 Successors. The Plan shall be binding upon the Optionee, his heirs,
----------
legatees and legal representatives, upon the Company, its successors and assigns
and upon the Board and its successors.
3.20 Headings. The titles and headings of sections and paragraphs are
--------
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
3.21 Word Usage. Words used in the masculine shall apply to the feminine
----------
where applicable and, wherever the context of this Plan dictates, the plural
shall be read as the singular and the singular as the plural.
A-9
<PAGE>
PROXY
DETACH HERE
BENCHMARQ MICROELECTRONICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned security holder of BENCHMARQ Microelectronics, Inc., a
Delaware corporation, hereby appoints Reginald B. McHone and R. Scott Schaefer,
and each of them, with full power of substitution, to represent and to vote on
behalf of the undersigned all securities which the undersigned is entitled to
cast at the Annual Meeting of Stockholders scheduled to be held on Wednesday,
April 16, 1997, at 9:30 A.M., local time, at the Omni Richardson Hotel, 701
East Campbell Road, Richardson, Texas 75081 and at any adjournments thereof,
hereby revoking all proxies heretofore given with respect to such securities (i)
upon the matters described in the Notice of Annual Meeting of Stockholders and
related Proxy Statement for the Annual Meeting (receipt of which is hereby
acknowledged), and (ii) with respect to any other business that may properly
come before such Annual Meeting.
The securities represented by this Proxy will be voted as specified on the
reverse side, but if no specification is made, the Proxies named above intend to
vote the securities at their discretion FOR the election of the nominees listed
---
in Proposal 1, FOR Proposal 2 to approve certain amendments to the BENCHMARQ
---
Microelectronics, Inc. 1995 Flexibile Stock Option Plan and otherwise at the
discretion of the Proxies.
-----------
SEE REVERSE
(Continued and to be dated and signed on the reverse side) SIDE
-----------
<PAGE>
DETACH HERE
[X] Please mark
votes as in
this example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEES LISTED
BELOW AS DIRECTORS, FOR THE PROPOSAL TO APPROVE CERTAIN AMENDMENTS TO THE
BENCHMARQ MICROELECTRONICS, INC. 1995 FLEXIBLE STOCK OPTION PLAN AND OTHERWISE
AT THE DISCRETION OF THE PROXIES.
1. Election of Directors
Nominees: Mr. Derrell C. Coker, Mr. L.J. Sevin,
Mr. Harvey B. Cash, Mr. Dietrich Erdmann,
Mr. Jack Kilby, Mr. Charles H. Phipps
[_] FOR [_] WITHHELD
ALL FROM
NOMINEES NOMINEES
[_]__________________________________________
For all nominees except for as noted above
Signature ______________________________ Date _____________________________
FOR AGAINST ABSTAIN
2. To approve certain amendments to [_] [_] [_]
the BENCHMARQ Microelectronics.
Inc. 1995 Flexible Stock Option Plan
3. In their discretion upon such other matters as properly come
before the meeting.
MARK HERE MARK HERE
FOR ADDRESS [_] IF YOU PLAN [_]
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE DATE, SIGN AND RETURN ALL CARDS
IN THE ACCOMPANYING ENVELOPE.
Please sign exactly as name appears hereon. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership please sign in partnership name by authorized person.
(Only one signature is required in the case of securities registered in the name
of two or more persons.)
Signature ______________________________ Date _____________________________
