<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Confidential, for Use of the
[_] Preliminary Proxy Statement Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
</TABLE>
OPTi Inc.
--------------------------------------------------
(Name of Registrant as specified in its charter)
OPTi Inc.
--------------------------------------------------
(Name of person(s) filing proxy statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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: N/A
(2) Form, Schedule, or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
OPTi INC.
----------------
Notice of Annual Meeting of Shareholders
September 28, 2000
----------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of OPTi
Inc., a California corporation ("OPTi" or the "Company"), will be held on
September 28, 2000 at 10:00 a.m., local time, at the Embassy Suites, 2885
Lakeside Drive, Santa Clara, California 95054, for the following purposes:
1. To elect four directors to serve for the ensuing year and until their
successors are elected;
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending December 31, 2000; and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on July 31, 2000 are
entitled to notice of and to vote at the meeting and any postponement or
adjournment thereof.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if he or she has returned a proxy.
Sincerely,
/s/ Douglas E. Gans
Douglas E. Gans
Secretary
Santa Clara, California
August 29, 2000
IMPORTANT: All shareholders are cordially invited to attend the Annual
Meeting in person. However, to ensure your representation at the meeting,
you are urged to mark, sign, date, and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope enclosed for that
purpose. Any shareholder attending the meeting may vote in person even if
such shareholder returned a proxy card.
<PAGE>
OPTi INC.
PROXY STATEMENT FOR 2000 ANNUAL MEETING OF SHAREHOLDERS
----------------
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of OPTi Inc. ("OPTi" or the
"Company") for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held on September 28, 2000 at 10:00 a.m., local time, or at any
postponement or adjournment thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at the Embassy Suites, 2885 Lakeside Drive, Santa Clara,
California 95054. The telephone number at that location is (408) 496-6400.
These proxy solicitation materials were mailed on or about August 29, 2000
to all shareholders entitled to vote at the meeting.
Purposes of the Annual Meeting
The purposes of the Annual Meeting are to (i) elect four directors to serve
for the ensuing year and until their successors are duly elected and qualified,
(ii) ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the fiscal year 2000, and (iii) transact such other business as
may properly come before the Annual Meeting and at any and all postponements or
adjournments thereof.
Record Date and Share Ownership
Only shareholders of record at the close of business on July 31, 2000 (the
"Record Date") are entitled to receive notice of and to vote at the Annual
Meeting. At the Record Date, 11,645,970 shares of the Company's Common Stock
were issued and outstanding. For information regarding security ownership by
management and by 5% shareholders, see "OTHER INFORMATION--Share Ownership of
Directors, Officers and Certain Beneficial Owners." The closing price of the
Company's Common Stock on the Nasdaq National Market on the Record Date was
$4.69 per share.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company at its principal executive offices, 3393 Octavius Drive, 2nd Floor,
Santa Clara, California, 95054, a written notice of revocation or a duly
executed proxy bearing a later date or by attending the Annual Meeting and
voting in person. Attending the Annual Meeting in and of itself will not
constitute a revocation of a proxy.
Voting and Solicitation
Every shareholder voting in the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares held by
such shareholder, or distribute the shareholder's votes on the same principle
among as many candidates as the shareholder deems fit, provided that votes
cannot be cast for more than four (4) candidates. However, no shareholder shall
be entitled to cumulate votes unless the candidate's name has been placed in
nomination prior to the voting and the shareholder, or any other shareholder,
has given notice at the Annual Meeting prior to the voting of the intention to
cumulate the shareholder's votes. On all other matters, each share has one (1)
vote.
Shares of Common Stock represented by properly executed proxies will, unless
such proxies have been previously revoked, be voted in accordance with the
instructions indicated thereon. In the absence of specific
<PAGE>
instructions to the contrary, properly executed proxies will be voted: (i) FOR
the election of each of the Company's nominees as a director; and (ii) FOR
ratification of the appointment of Ernst & Young LLP as independent auditors
for fiscal 2000. No business other than that set forth in the accompanying
Notice of Annual Meeting of Shareholders is expected to come before the Annual
Meeting. Should any other matter requiring a vote of shareholders properly
arise, the persons named in the enclosed form of proxy will vote the shares
they represent as the Board of Directors may recommend.
The cost of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners of
shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone, telegram or letter.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the Record
Date. Shares that are voted "FOR" or "AGAINST" a matter are treated as being
present at the meeting for purposes of establishing a quorum and are also
treated as shares "represented and voting" at the Annual Meeting (the "Votes
Cast") with respect to such matter.
While there is no definitive statutory or case law authority in California
as to the proper treatment of abstentions or broker non-votes, the Company
believes that both abstentions and broker non-votes should be counted for
purposes of determining the presence or absence of a quorum for the transaction
of business. The Company further believes that neither abstentions nor broker
non-votes should be counted as shares "represented and voting" with respect to
a particular matter for purposes of determining the total number of Votes Cast
with respect to such matter. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions and broker non-votes in this
manner. Accordingly, abstentions and broker non-votes will not affect the
determination as to whether the requisite majority of Votes Cast has been
obtained with respect to a particular matter.
Deadline for Receipt of Shareholder Proposals
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the 2001 Annual Meeting of Shareholders must be
received by the Company no later than May 31, 2001 in order to have them
included in the proxy statement and form of proxy relating to that meeting.
In addition, proposals of the Company's shareholders that such shareholders
intend to present at the Company's 2001 Annual Meeting, but not include in the
Company's Proxy Statement and form of Proxy relating to the 2001 Annual Meeting
(a "Non-Rule 14a-8 Proposal"), must be received by the Company at the Company's
offices no later than July 15, 2001 and no earlier than June 1, 2001. In the
event that the Company does not receive timely notice with respect to a Non-
Rule 14a-8 Proposal, management of the Company would use its discretionary
authority to vote the shares it represents as the Board of Directors may
recommend.
Fiscal Year End
The Company's fiscal year ends on December 31. Fiscal 1999 ended on December
31, 1999 and is referred to herein as the "Last Fiscal Year."
2
<PAGE>
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
Directors and Nominees for Directors
A board of four directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's four (4) nominees named below, all of whom are presently
directors of the Company. In the event that any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting,
the proxies will be voted for any nominee who shall be designated by the
present Board of Directors to fill the vacancy. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner in accordance with
cumulative voting as will assure the election of as many of the nominees listed
below as possible, and, in such event, the specific nominees to be voted for
will be determined by the proxy holders. The Company is not aware of any
nominee who will be unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Shareholders or until a successor has been duly elected and
qualified.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" THE NOMINEES LISTED BELOW.
Nominees for Director
The names of the nominees, each of whom is currently a director of the
Company, and certain information about them is set forth below, including
information furnished by them as to their principal occupations for the last
five (5) years and their ages as of the Record Date.
<TABLE>
<CAPTION>
Director
Name of Nominee Age Position with the Company Since
--------------- --- ------------------------- --------
<S> <C> <C> <C>
Bernard T. Marren....... 64 President, Chief Executive Officer and Chairman of the Board 1996
Stephen A. Dukker(1).... 47 Director 1993
Kapil K. Nanda(1)(2).... 54 Director 1996
William Welling(1)(2)... 67 Director 1998
</TABLE>
--------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
Bernard T. Marren has served as President and Chief Executive Officer of the
Company since May 1998. Mr. Marren was elected as a director in May 1996. Mr.
Marren founded Western Microtechnology Inc., a distributor of electronic
systems and semiconductor devices. He served as its President from 1977 to
1994. He also founded and was the first President of SIA (the Semiconductor
Industry Association). Mr. Marren is also a director of three private
companies.
Stephen A. Dukker was elected as a director of the Company in January 1993.
He is currently President and Chief Executive Officer of eMachines where he has
been employed since mid 1998. He was a Senior Vice President of Merchandising
at Computer City from October 1997 to August 1998. He served as President of
OPTi Inc. from January of 1996 to October 1997. From May 1994 to mid 1995, Mr.
Dukker served as President of VideoLogic, Inc., a supplier of video and
graphics add-on boards. From June 1991 through October 1993, he served as a
Senior Vice President of CompUSA, Inc., a chain of discount computer
superstores. During that time he was also a member of the Executive Committee
of CompUSA and President of its Compudyne Computer manufacturing and mail order
subsidiaries. Prior to joining CompUSA, Mr. Dukker was President of PC Brand,
Inc., a manufacturer and mail order distributor of PC products from January
1988 to May 1991.
3
<PAGE>
William Welling was elected as a director in August 1998. He is currently
Chairman and CEO of @ Com Corporation, a telecommunications software company.
Since 1983 he has been Managing Partner of Venture Growth Associates, an
investment firm. Mr. Welling also serves as a director on the boards of several
private companies.
Kapil K. Nanda was elected as a director in May 1996. Mr. Nanda is currently
President of InfoGain Corporation, a software and development consulting
company, which he founded in 1990. Prior to 1990, Mr. Nanda held various
positions at Altos Computer Systems, a personal computer manufacturing company,
from 1981 to 1989. He served as Vice President of Engineering from 1984 to
1989. From 1974 to 1981, Mr. Nanda was employed at Intel Corporation, serving
as Manager, Software Engineering from 1976 to 1981. Mr. Nanda holds a B.S. in
Engineering from the University of Punjab, India, an M.S. in Engineering from
the University of Kansas, and an M.B.A. from the University of Southern
California.
Vote Required
The four (4) nominees receiving the highest number of affirmative votes of
the shares entitled to be voted for them shall be elected as directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum for the transaction of business, but have no other legal
effect in the election of directors under California law.
Board Meetings and Committees
During the Last Fiscal Year, the Board of Directors held a total of eight
(8) meetings. No incumbent director attended less than 75% of the aggregate of
all meetings of the Board of Directors and any committees of the Board on which
he served, if any, during his tenure as a director.
The Audit Committee was established to review, in consultation with the
independent auditors, the Company's financial statements, accounting and other
policies, accounting systems and system of internal controls. The Audit
Committee also recommends the engagement of the Company's independent auditors
and reviews other matters relating to the relationship of the Company with its
auditors. The Audit Committee met one (1) time during the Last Fiscal Year. On
May 5, 2000, the Board of Directors adopted a written charter for the Audit
Committee. The charter is attached hereto as Appendix A.
The Compensation Committee was established to review and act on matters
relating to compensation levels and benefit plans for key executives of the
Company, among other things. The Compensation Committee met one (1) time during
the Last Fiscal Year.
The Board of Directors currently has no nominating committee or other
committee performing a similar function.
Director Compensation
Non-employee members of the Board of Directors are currently compensated at
the rate of $1,000 per Board meeting attended, plus out-of-pocket expenses for
attending such meetings. In addition, non-employee directors are eligible to
participate in the Company's 1993 Director Stock Option Plan.
4
<PAGE>
PROPOSAL NUMBER 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent auditors,
to audit the financial statements of the Company for the fiscal year ending
December 31, 2000. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection.
Ernst & Young LLP has audited the Company's financial statements for each
fiscal year since the Company's inception. Representatives of Ernst & Young LLP
are expected to be present at the meeting with the opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions.
Recommendation
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2000.
Vote Required
The affirmative vote of a majority of the Votes Cast will be required to
ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 31, 2000.
5
<PAGE>
OTHER INFORMATION
Executive Officers
In addition to Mr. Marren, the following person was an executive Officer of
the Company as of the Record Date:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Douglas E. Gans....................... 56 Chief Financial Officer and Secretary
</TABLE>
Douglas E. Gans was appointed Chief Financial Officer of the Company in
January 2000. Mr. Gans has over 30 years of financial management experience. He
is a consultant to the Company working for The Brenner Group, Inc. From 1991 to
1999 he held the position of CFO at Asante Technologies, Inc, and Sunseeds
Corporation.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's equity securities, to file certain reports regarding ownership
of, and transactions in, the Company's securities with the Securities and
Exchange Commission (the "SEC") and with Nasdaq. Such officers, directors and
10% shareholders are also required by SEC rules to furnish the Company with
copies of all Section 16(a) forms that they file.
Based solely on its review of copies of Forms 3 and 4 and amendments thereto
furnished to the Company pursuant to Rule 16a-3(e) and Forms 5 and amendments
thereto furnished to the Company with respect to the Last Fiscal Year, and any
written representations referred to in Item 405(b)(2)(i) of Regulation S-K
stating that no Forms 5 were required, the Company believes that, during the
last Fiscal Year, all Section 16(a) filing requirements applicable to the
Company's officers, directors and 10% shareholders were complied with.
6
<PAGE>
Share Ownership of Directors, Officers and Certain Beneficial Owners
The following nominee table sets forth the beneficial ownership of Common
Stock of the Company as of June 30, 2000 by: (i) each present director of the
Company; (ii) each of the officers named in the table under the heading
"EXECUTIVE COMPENSATION--Summary Compensation Table"; (iii) all current
directors and executive officers as a group; and (iv) each person known to the
Company who beneficially owns 5% or more of the outstanding shares of its
Common Stock. The number and percentage of shares beneficially owned is
determined under the rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes shares as to which the individual has sole or
shares voting power or investment power and also any shares which the
individual has the right to acquire within sixty (60) days of June 30, 2000
through the exercise of any stock option or other right. Unless otherwise
indicated, each person has sole voting and investment power (one shares such
powers with his or her spouse) with respect to the shares, shown as
beneficially owned. Unless otherwise indicated, officers and directors can be
reached at the Company's principal executive offices. A total of 11,645,970
shares of the Company's Common Stock were issued and outstanding as of June 30,
2000.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned
-----------------
Name Number Percent
---- --------- -------
<S> <C> <C>
Bernard T. Marren(1)........................................ 133,121 1.1%
Michael Mazzoni(2).......................................... 0 *
Stephen Dukker.............................................. 89,166 *
Kapil Nanda(3).............................................. 21,333 *
William Welling............................................. 13,333 *
MG Capital Management....................................... 1,181,950 10.1%
1725 Kearny Street No. 1
San Francisco, CA 94133
Dimension Fund Advisors..................................... 776,500 6.7%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Caxten International........................................ 676,900 5.8%
315 Enterprise Drive
Plainsboro, NJ 08536
All Directors and Executive Officers as a group (5
persons)(6)................................................ 254,953 2.2%
</TABLE>
--------
* Represents less than one percent.
(1) Includes 117,333 shares subject to stock option exercisable as of June 30,
2000 or within sixty (60) days thereafter.
(2) Mr. Mazzoni resigned and left OPTi in January 2000. At June 30, 2000 he
owned no shares of OPTi stock and held no stock options.
(3) Includes 17,333 shares subject to stock option exercisable as of June 30,
2000 or within sixty (60) days thereafter.
(4) Includes shares pursuant to notes (1) and (3).
7
<PAGE>
Summary Compensation Table
The following table sets forth certain information with respect to the
compensation paid by the Company for services rendered during fiscal years
1999, 1998, and 1997 to Bernard Marren and Michael Mazzoni (the "Named
Officers"). The table lists the principal position held by each Named Officer
in the Last Fiscal Year.
<TABLE>
<CAPTION>
Annual Long-Term
Compensation Compensation
------------------ Awards All Other
Name Year Salary($) Bonus($) Options(#) Compensation
---- ---- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Bernard T. Marren......... 1999 $251,250 $420,000(1) -- --
President and Chief 1998 150,923 -- 100,000 --
Executive Officer 1997 -- -- -- --
Michael Mazzoni(1)........ 1999 145,763 69,525 -- --
Chief Financial Officer 1998 136,475 50,000 45,000 --
1997 96,771 10,350 -- --
</TABLE>
--------
(1) Includes $400,000 dividend paid, per agreement, on stock options
outstanding.
(2) On January 31, 2000, Mr. Mazzoni resigned from his position as Chief
Financial Officer of the Company.
Option Grants In Last Fiscal Year
There were no options granted in the last fiscal year to the Named Officers.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table provides information with respect to option exercises in
the Last Fiscal Year by the Named Officers and the value of such officer's
unexercised options at December 31, 1999.
<TABLE>
<CAPTION>
Total Number of
Total Value of Unexercised In-the-Money
Unexercised Options at Options at Fiscal Year
Shares Fiscal Year End(#) End($)(1)
Acq. Value ------------------------- -------------------------
Exer. Realized Exercisable Unexercisable Exercisable Unexercisable
------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard T. Marren....... -- -- 100,000 -- $71,000 --
Michael Mazzoni......... 20,000 44,900 88,750 -- $ 7,100 --
</TABLE>
--------
(1) Market value of underlying securities based on the closing price of the
Company's Common Stock on December 31, 1999 on the Nasdaq National Market,
minus the exercise price.
Compensation Committee Interlocks and Insider Participation
In February 1993, the Company established a compensation committee of the
Board of Directors which currently consists of Mr. Nanda and Mr. Welling.
Certain Transactions
The Company's policy is that it will not make loans to, or enter into other
transactions with, directors, officers or affiliates unless such loans or
transactions are (i) approved by a majority of the Company's independent
disinterested directors, (ii) may reasonably be expected to benefit the
Company, and (iii) will be on terms no less favorable to the Company than could
be obtained in arm's length transactions with unaffiliated third parties.
Since the beginning of fiscal year 1999, the Company has not entered into
any transactions or business relationships with its directors or executive
officers for which disclosure is required pursuant to item 404 of regulation s-
k promulgated by the Securities and Exchange Commission.
The Company has entered into indemnification agreements with each of its
directors and executive officers. Such agreements require the Company to
indemnify such individuals to the fullest extent permitted by California law.
8
<PAGE>
REPORT OF COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors establishes the general
compensation policies of the Company as well as the compensation plans and
specific compensation levels for executive officers. It also administers the
Company's employee stock benefit plans and the 1993 Bonus Plan (the "Bonus
Plan"). The Compensation Committee is currently composed of independent, non-
employee directors who have no interlocking relationships as defined by the
Securities and Exchange Commission.
The Compensation Committee believes that the compensation of the executive
officers, including that of the Chief Executive Officer (collectively, the
"Executive Officers") should be influenced to a very significant extent by the
Company's financial performance. The Committee establishes the salaries of all
of the Executive Officers by considering various factors, including the
following: (i) the Company's financial performance for the past year, (ii) the
opportunity of the Executive to participate in the Company's success through
equity ownership and stock options, (iii) the salaries of executive officers in
similar positions of comparably-sized companies, and (iv) the critical
importance of cost control in the Company's business in light of ongoing
competition. In addition to salary, the cash portion of the Company's executive
compensation packages includes discretionary bonuses which are paid quarterly
based on the Company's operating results. The Committee believes that the
Company's executive Officer salaries and cash compensation are currently less
than or comparable to the compensation paid to executives at similarly-sized
businesses in the industry.
The Company's Bonus Plan provides that the maximum aggregate bonuses to be
paid to any individual Executive Officer in the year will in no event exceed
two (2) times the base salary of such Executive Officer. In addition, the
aggregate quarterly bonuses which may be paid to all Executive Officers will
not exceed 5% of the Company's pre-tax, pre-bonus income for the quarter.
Acting with the advice of the Committee, the Board of Directors periodically
grants options to Executive Officers. The Committee views stock option grants
as an important component of its long-term, performance-based compensation
philosophy. Since the value of an option bears a direct relationship to the
Company's stock price, the Committee believes that options motivate Executive
Officers to manage the Company in a manner which will also benefit
shareholders. Options are granted at the current market price on the date of
grant.
The compensation package for the Company's Chief Executive Officer, Bernard
T. Marren, includes three elements: (i) base salary, (ii) performance bonus and
(iii) stock options. The base salary was determined through a comparison of
base salaries paid with respect to chief executive officers of other publicly-
traded semiconductor companies located in Northern California. The performance
bonus element has been established to provide variable bonus compensation to
the CEO based on the Company's actual operating results during fiscal 1996 and
thereafter, including both sales and net income measurements. The stock option
award is intended to provide long-term compensation to the CEO based on the
stock performance of the Company. The options vest over a four (4) year period.
In general, the Committee believes that the compensation package of the CEO is
closely tied to the financial performance of the Company and has a high degree
of variability based on such performance.
COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS
Kapil Nanda
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total shareholder
return, calculated on a dividend reinvested basis, from the effective date of
the initial public offering of the Company's Common Stock (December 31, 1993)
through the Last Fiscal Year end (December 31, 1999) for OPTi Inc., the CRSP
Index for Nasdaq Stock Market (U.S. Companies) (the "Nasdaq Index") and the
CRSP Index for Nasdaq Electronic Components Stocks (the "Nasdaq Electronic
Components Index"). The graph assumes that $100 was invested in the Company's
Common Stock on December 31, 1993 at the initial public offering price and in
the Nasdaq Index and the Nasdaq Electronic Components Index on December 31,
1993. Note that historic stock price performance is not necessarily indicative
of future stock price performance.
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
OPTi Inc.
Prepared by the Center for Research in Security Prices
Produced on 7/14/00 including data to 12/31/99
[Performance Graph for OPTi Inc.]
<TABLE>
<CAPTION>
CRSP Total Returns
Index for 12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
------------------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Opti Inc. $100.0 51.6 32.5 43.3 29.4 73.0
Nasdaq Stock Market
(US Companies) $100.0 141.3 173.9 213.1 300.4 557.4
Nasdaq Electronic
Components Stocks $100.0 166.5 288.3 302.3 466.9 868.3
SIC 3670-3679 US & Foreign
</TABLE>
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The Indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval based on the fiscal year-end is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 12/30/1994.
10
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy to vote the shares they represent as the
Board of Directors may recommend.
It is important that your shares of stock be represented at the meeting,
regardless of the number of shares which you hold. You are, therefore, urged to
execute and return, at your earliest convenience, the accompanying proxy in the
envelope which has been enclosed.
FOR THE BOARD OF DIRECTORS
/s/ Douglas E. Gans
Douglas E. Gans
Secretary
Dated: August 29, 2000
11
<PAGE>
Exhibit A
OPTi INC.
AUDIT COMMITTEE CHARTER
BOARD OF DIRECTORS
Organization
This charter governs the operations of the Audit Committee. The Committee
shall review and reassess the charter at least annually and obtain the approval
of the Board of Directors. The Committee shall be appointed by the Board of
Directors and shall comprise at least three Directors, each of whom are
independent of management and the Company. Members of the Committee shall be
considered independent if they have no relationship that may interfere with the
exercise of their independence from management and the Company. All Committee
members shall be financially literate, or shall become financially literate
within a reasonable period of time after appointment to the Committee, and at
least one member shall have accounting or related financial management
expertise.
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the annual independent audit of the
Company's financial statements, and the legal compliance and ethics programs as
established b management and the Board. In so doing, it is the responsibility
of the Committee to maintain free and open communication between the Committee,
independent auditors, and the management of the Company. In discharging its
oversight role, the Committee is empowered to investigate any matter brought to
its attention with full access to all books, records, facilities, and personnel
of the Company and the power to retain outside counsel or other experts for
this purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee the
Company's financial reporting process on behalf of the Board and report the
results of their activities to the Board. Management is responsible for
preparing the Company's financial statements, and the independent auditors are
responsible for auditing those financial statements. The Committee in carrying
out its responsibilities believes its policies and procedures should remain
flexible, in order to best react to changing conditions and circumstances. The
Committee should take the appropriate actions to set the overall corporate
"tone" for quality financial reporting, sound business risk practices, and
ethical behavior.
The following shall be the principal recurring processes of the Audit
Committee in carrying out its oversight responsibilities. The processes are set
forth as a guide with the understanding that the Committee may supplement them
as appropriate:
. The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Audit Committee, as representatives of
the Company's shareholders. The Committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The Committee shall discuss with the auditors
their independence from management and the Company and the matters
<PAGE>
included in the written disclosures required by the Independence Standards
Board. Annually, the Committee shall review and recommend to the Board the
selection of the Company's independent auditors, subject to shareholders'
approval.
. The Committee shall discuss the independent auditors the overall scope
and plans for their audits including the adequacy of staffing and
compensation. Also, the Committee shall discuss with management, and the
independent auditors the adequacy and effectiveness of the accounting and
financial controls, including the Company's system to monitor and manage
business risk, and legal and ethical compliance programs. Further, the
Committee shall meet separately with the independent auditors, with and
without management present, to discuss the results of their examinations.
. The Committee shall review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the Committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent auditors
under generally accepted auditing standards. The chair of the Committee
may represent the entire Committee for the purposes of this review.
. The Committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
the filing of Form 10-K), including their judgment about the quality, not
just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the
financial statements. Also, the Committee shall discuss the results of
the annual audit and any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards.
2
<PAGE>
DETACH HERE
PROXY
OPTi INC
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of OPTi Inc. (the "Company"), hereby appoints
Bernard T. Marren and Douglas E. Gans and each of them, with power of
substitution to each true and lawful attorneys, agents, and proxyholders of the
undersigned and hereby authorizes them to represent and vote, as specified
herein, all shares of Common Stock of the Company to be held of record by the
undersigned on July 31, 2000 at the 2000 Annual Meeting of Shareholders of the
Company to be held on Thursday, September 28, 2000 at 10:00 a.m., local time, at
the Embassy Suites, 2885 Lakeside Drive, Santa Clara, California 95054, and any
adjournments or postponement thereof.
-------------- --------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
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<PAGE>
[x] Please mark
votes as in
this example
The shares represented by this proxy will be voted in the manner directed. In
the absence of any direction, the shares will be voted FOR Proposal 1 and 2.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and Proxy Statement dated August 29, 2000.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of Directors. 2. APPOINTMENT OF INDEPENDENT FOR AGAINST ABSTAIN
Nominees: Bernard T. Marren, Stephen A. Dukker, AUDITORS [_] [_] [_]
Kapil K. Nanda, and Willian H. Welling To ratify the appointment of
FOR WITHHELD Ernst & Young LLP as Independent
[_] [_] auditors of the Company for the
fiscal year ending December 31,
2000.
3. In their discretion, the proxyholders are authorized to vote
upon such other business as may properly come before the
meeting, or any adjournment.
[_] _______________________________________
For all nominees except as noted above Please mark, sign and date this proxy and return it promptly
whether you plan to attend the meeting or not. If you do attend,
you may vote in person if you desire.
Please sign exactly as your name appears hereon. Joint owners
should each sign. Trustees and others acting in a representative
capacity should indicate the capacity in which they sign and give
their full title. If a corporation, please sign in full corporate
name by an authorized officer. If a partnership please sign in
partnership name by an authorized person.
</TABLE>
Signature: ____________ Date: ________ Signature: ____________ Date: ________
