SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. ______________)
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/x/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
ALLIANCE SEMICONDUCTOR CORPORATION
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) or Schedule 14A
/ / $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 transactions applies:
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(2) Aggregate number of securities to which transactions applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing party:
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(4) Date filed:
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ALLIANCE SEMICONDUCTOR CORPORATION
3099 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134-2006
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders of ALLIANCE
SEMICONDUCTOR CORPORATION (the "Company") will be held at the Company's
principal office located at 3099 North First Street, San Jose, California on
Thursday, September 19, 1996 at 10:00 a.m., local time for the following
purposes:
1. To elect four (4) directors of the Company to serve until the next
Annual Meeting of Stockholders or until their respective successors are
elected and qualified or until their earlier resignation, death or removal.
The Company's Board of Directors has nominated the following individuals to
serve: Sanford L. Kane, Jon B. Minnis, C.N. Reddy and N. Damodar Reddy
2. To approve the adoption of the Company's 1996 Employee Stock Purchase
Plan and the reservation for issuance thereunder of an aggregate of 750,000
shares of the Company's Common Stock.
3. To ratify the appointment of Price Waterhouse as independent
accountants for the Company for the current fiscal year.
4. To transact any other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on August 16, 1996 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED
TO MARK, SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY CARD IN THE RETURN
ENVELOPE PROVIDED SO THAT YOUR SHARES WILL BE REPRESENTED AT THE ANNUAL MEETING.
IF YOU SEND IN YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO
VOTE YOUR SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN
ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors
/s/ C. N. REDDY
C. N. REDDY
Senior Vice President--Engineering and
Operations, and Secretary
San Jose, California
August 20, 1996
<PAGE>
ALLIANCE SEMICONDUCTOR CORPORATION
3099 NORTH FIRST STREET
SAN JOSE, CALIFORNIA 95134-2006
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The accompanying proxy (the "Proxy") is solicited on behalf of the Board of
Directors of ALLIANCE SEMICONDUCTOR CORPORATION, a Delaware corporation
("Alliance" or the "Company"), for use at the Annual Meeting of Stockholders of
the Company to be held at 3099 North First Street, San Jose, California
95134-2006 on September 19, 1996 at 10:00 a.m., local time (the "Annual
Meeting"). Only holders of record of the Company's Common Stock at the close of
business on August 16, 1996 (the "Record Date") will be entitled to vote. At the
close of business on that date, the Company expects to have 38,457,882 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting. A majority,
or 19,228,942 of these shares, will constitute a quorum for the transaction of
business at the Annual Meeting. This Proxy Statement will be first mailed to
stockholders on or about August 20, 1996.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use either by delivering to the Company
(Attention: C. N. Reddy) a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the Annual Meeting and voting in person.
If a proxy is properly signed and not revoked, the shares it represents will be
voted in accordance with the instructions of the stockholder. If no specific
instructions are given, the shares will be voted FOR the election as directors
of all of the nominees described below ("Proposal No. 1"); FOR approval of the
Company's 1996 Employee Stock Purchase Plan ("Proposal No. 2"); and FOR
ratification of the appointment of Price Waterhouse as the Company's independent
auditors for the fiscal year ending March 29, 1997 ("Proposal No. 3").
VOTING
Holders of shares of Common Stock are entitled to one vote for each share
held as of the Record Date. Shares of Common Stock may not be voted
cumulatively. With regard to the election of directors, votes may be cast in
favor or withheld; votes that are withheld will be excluded entirely from the
vote and will have no effect. Abstentions may be specified on all proposals (but
not on the election of directors) and will be counted as present for purposes of
the item on which the abstention is noted. The aggregate number of votes
entitled to be cast by all stockholders present in person or represented by
proxy at the Annual Meeting, whether those stockholders vote "For," "Against,"
"Abstain" or give no instructions, will be counted for purposes of determining
the minimum number of affirmative votes required to approve the actions proposed
in Proposals Nos. 2 and 3, and the total number of shares cast "For" such
proposal will be counted for purposes of determining whether sufficient
affirmative votes have been cast. An abstention from voting on a matter by a
stockholder present in person or represented by proxy at the meeting has the
same effect as a vote "Against" the matter. In the event that a broker indicates
on a Proxy that it does not have discretionary authority to vote certain shares
on a particular matter, those shares will not be considered present and entitled
to vote with respect to that matter and will be considered a "broker non-vote."
Each nominee to serve on the Company's Board of Directors to be elected must
receive a plurality of the votes of the shares present in person or represented
by proxy at the Annual Meeting and entitled to vote on the election of directors
(provided a quorum is present). Votes "Withheld," as well as broker non-votes,
will not contribute to the number of votes required to elect a director.
Proposal Nos. 2 and 3 require for approval the affirmative vote of a majority
of the outstanding shares of Common Stock of the Company present in person or by
proxy at the Annual Meeting and entitled to
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vote (provided a quorum is present). Votes "Against" and "Abstain" will count
toward the number of shares voted at the Annual Meeting, but will not contribute
toward the required number of votes necessary to approve Proposal Nos. 2 and 3.
Broker non-votes will not be counted toward the number of shares voted at the
Annual Meeting, either in determining whether a quorum is present or in
determining the number of affirmative votes necessary to approve Proposal Nos. 2
and 3.
Unless otherwise instructed by the stockholder or described herein, each
Proxy validly returned in the form accompanying this Proxy Statement that is not
revoked will be voted in the election of directors "For" the nominees of the
Board of Directors, and "For" Proposal Nos. 2 and 3 described in this Proxy
Statement, and at the Proxy holder's discretion, on such other matters, if any,
that may come before the Annual Meeting (including any proposal to adjourn the
Annual Meeting).
The expenses of soliciting Proxies in the enclosed form will be paid by the
Company. Following the original mailing of the Proxy and other soliciting
materials, the Company will request brokers, custodians, nominees and other
record holders to forward copies of the Proxy and other soliciting materials to
persons for whom they hold shares of Common Stock and to request authority for
the exercise of Proxies. In such cases, the Company, upon the request of the
record holders, will reimburse such holders for their reasonable expenses.
Proxies may also be solicited by certain of the Company's directors, officers
and regular employees, without additional compensation, in person or by
telephone or telegram.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Board of Directors of the Company (the "Board" or "Board of Directors")
has nominated for election as directors each of the following persons to serve
until the next annual meeting of stockholders and until his successor has been
elected or until his earlier resignation, death or removal: Sanford L. Kane, Jon
B. Minnis, C.N. Reddy and N. Damodar Reddy. Unless otherwise instructed, the
Proxy holders will vote the Proxies received by them for the Company's nominees
named below. Each of the nominees is currently a director of the Company.
Assuming a quorum is present, the four nominees for election as directors who
receive the greatest number of votes cast for the election of directors at the
Annual Meeting will become directors at the conclusion of the tabulation of
votes. In the event that any nominee 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 or the Board will be reduced in accordance with the Bylaws of the
Company. It is not expected that any nominee will be unable, or will decline, to
serve as a director.
<TABLE>
DIRECTORS/NOMINEES
The names of the current members of the Board, who are also the Company's
nominees for the Board, and certain information about them, are set forth below:
<CAPTION>
NAME OF NOMINEE DIRECTOR
AND DIRECTOR AGE PRINCIPAL OCCUPATION SINCE
- ------------------------- --- ---------------------------------------------- ----------
<S> <C> <C> <C>
N. Damodar Reddy(1) ......... 57 Chairman of the Board, Chief Executive Officer 1985
and President of the Company
C.N. Reddy ................... 40 Senior Vice President--Engineering and 1985
Operations, and Secretary of the Company
Jon B. Minnis(1)(2)(3) ...... 60 President of Milpitas Materials Company 1992
Sanford L. Kane(1)(2)(3) ..... 54 President of Kane Concepts Incorporated 1993
<FN>
- ----------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Stock Benefit Committee.
</FN>
</TABLE>
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N. Damodar Reddy and C.N. Reddy are brothers. There are no other family
relationships among any of the directors or executive officers of the Company.
N. Damodar Reddy co-founded the Company and has served as the Company's
Chairman of the Board, Chief Executive Officer and President from its inception
in February 1985. From September 1983 to February 1985, he served as President
and Chief Executive Officer of Modular Semiconductor, Inc., and from 1980 to
1983, he served as manager of Advanced CMOS Technology Development at Synertek,
Inc., a subsidiary of Honeywell, Inc. Prior to that time, Mr. Reddy held various
research and development and management positions at Four Phase Systems, a
subsidiary of Motorola, Inc., Fairchild Semiconductor and RCA Technology Center.
He holds a M.S. degree in Electrical Engineering from North Dakota State
University and a M.B.A. from Santa Clara University.
C.N. Reddy co-founded the Company and has served as the Company's Vice
President--Engineering and Secretary and a director since its inception in
February 1985. In May 1993, he was appointed Senior Vice President--Engineering
and Operations of the Company. From 1984 to 1985, he served as Director of
Memory Products of Modular Semiconductor, Inc., and from 1983 to 1984, he served
as SRAM product line manager for Cypress Semiconductor Corporation. From 1980 to
1983, Mr. Reddy served as a DRAM development manager for Texas Instruments, Inc.
and, before that, he was a design engineer with National Semiconductor
Corporation for two years. Mr. Reddy holds a M.S. degree in Electrical
Engineering from Utah State University. C.N. Reddy is named inventor of over 15
patents related to SRAM and DRAM designs.
Jon B. Minnis has served as a director of the Company since April 1992. For
more than the past 29 years, he has been President of Milpitas Materials
Company, a construction materials company. Mr. Minnis has also been involved in
venture capital investment activities for high technology companies.
Sanford L. Kane was elected to the Company's Board of Directors in June 1993.
He currently serves as President of Kane Concepts Incorporated, a consulting
company. From January 1993 to April 1995, he served as Chairman and Chief
Executive Officer of Tower Semiconductor Ltd., a publicly held wafer fabrication
company. From October 1990 to January 1992, he was President and Chief Executive
Officer of PCO, Inc., a manufacturer of fiber optic electronic products. From
July 1989 to June 1990, he was President and Chief Executive Officer of U.S.
Memories, Inc., a joint venture that was intended to be a United States
manufacturer of semiconductor memory devices. Prior to July 1989, Mr. Kane spent
27 years with IBM in various managerial and technical positions, most recently
as Vice President of Industry Operations--General Technology Division. While at
IBM, Mr. Kane served as a director of SEMATECH and the Semiconductor Industry
Association.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
BOARD OF DIRECTORS. During the fiscal year ended March 30, 1996 ("fiscal
1996"), the Board of Directors met twice and acted by unanimous written consent
three times. Each incumbent director attended all of the meetings of the Board
of Directors and of the committees of the Board on which he served.
The Board of Directors has delegated certain authority to designated
committees. Standing committees of the Board currently include an Audit
Committee, a Compensation Committee and a Stock Benefit Committee, the current
membership and duties of which are as set forth below.
AUDIT COMMITTEE COMPENSATION COMMITTEE STOCK BENEFIT COMMITTEE
Sanford L. Kane Sanford L. Kane Sanford L. Kane
Jon B. Minnis Jon B. Minnis Jon B. Minnis
N. Damodar Reddy
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AUDIT COMMITTEE. The Audit Committee exercises the following powers: (1)
meets with the Company's independent auditors to review the adequacy of the
Company's internal control systems and financial reporting procedures; (2)
reviews the general scope of the Company's annual audit and fees charged by the
independent auditors; (3) reviews and monitors the performance of non-audit
services provided by the independent auditors; and (4) reviews interested
transactions between the Company and any of its affiliates and any other matter
to be passed upon by an audit committee as a matter of law or pursuant to the
rules and regulations of any stock exchange or other securities market upon
which the Company's securities may be listed. The Audit Committee held one
meeting in fiscal 1996.
COMPENSATION COMMITTEE. The Compensation Committee sets all non-stock
compensation for the Company's officers, employees and service providers, other
than directors, and took action once in fiscal 1996.
STOCK BENEFIT COMMITTEE. The Stock Benefit Committee administers the
Company's 1992 Stock Option Plan, 1993 Directors Stock Option Plan and other
stock benefit plans for officers, employees and other service providers;
however, the Stock Benefit Committee does not administer discretionary stock
benefit plans for directors. The Stock Benefit Committee acted by unanimous
written consent sixteen times in fiscal 1996.
DIRECTORS' COMPENSATION
Directors do not receive compensation for serving as members of the Company's
Board of Directors, but are reimbursed for expenses incurred attending meetings
of the Board. Messrs. Minnis and Kane, the Company's two non-employee members of
the Board of Directors, were granted options to purchase 90,000 shares of Common
Stock, each with an exercise price of $1.33 (as adjusted to reflect two
three-for-two forward stock splits effected in the forms of one-for-two stock
dividends by the Company in January 1995 and July 1995, respectively), in fiscal
1994. Each of these options vests in increments of 25% per year with the first
such increment vesting on the one-year anniversary of the date of its grant. The
Company issued no options to directors in fiscal 1996.
On October 1, 1993, the Company adopted its 1993 Directors Stock Option Plan,
under which 900,000 shares of Common Stock (as adjusted to reflect two
three-for-two forward stock splits effected in the forms of one-for-two stock
dividends by the Company in January 1995 and July 1995, respectively) are
reserved for issuance. Under the 1993 Directors Stock Option Plan, independent
directors are entitled to a specified number of options to purchase shares of
Common Stock as a result of their appointment and subsequent service as
directors. No stock has been issued pursuant to this Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE NOMINATED DIRECTORS.
PROPOSAL NO. 2
APPROVAL OF THE EMPLOYEE STOCK PURCHASE PLAN AND
THE RESERVATION FOR ISSUANCE THEREUNDER OF AN AGGREGATE OF
750,000 SHARES OF THE COMPANY'S COMMON STOCK
At the Annual Meeting, the Company's stockholders are being asked to approve
the adoption of the Company's 1996 Employee Stock Purchase Plan (the "Purchase
Plan") and the reservation for issuance thereunder of an aggregate of 750,000
shares of the Company's Common Stock. The Purchase Plan provides for employee
purchases of the Company's Common Stock through accumulated payroll deductions,
and is a continuation of the Company's policy of equity ownership by employees
as an incentive for employees to exert maximum efforts for the success of the
Company.
GENERAL
The Purchase Plan was adopted by the Board of Directors in July, 1996. A
total of 750,000 shares of Common Stock has been reserved for issuance under the
Purchase Plan. The Purchase Plan, and the right
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of participants to make purchases thereunder, is intended to qualify under the
provisions of Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code"). The Purchase Plan is not a qualified deferred compensation plan under
Section 401(a) of the Code, and is not subject to the provisions of the
Employment Retirement Income Security Act of 1974, as amended ("ERISA").
PURPOSE
The purpose of the Purchase Plan is to provide employees of the Company (and
any of its majority-owned subsidiaries designated by the Board of Directors) who
participate in the Purchase Plan with an opportunity to purchase Common Stock of
the Company through payroll deductions.
ADMINISTRATION
The Purchase Plan may be administered by the Board of Directors or a
committee appointed by the Board of Directors. All questions of interpretation
of the Purchase Plan are determined by the Board of Directors or its committee,
and its decisions are final and binding upon all participants. The composition
of the committee shall be in accordance with the requirements to obtain or
retain any available exemption from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") pursuant to
Rule 16b-3 promulgated thereunder (or any successor rule or provision).
ELIGIBILITY
Any person who is customarily employed by the Company (or any of its
majority-owned subsidiaries designated by the Board of Directors) for at least
20 hours per week and more than five months in any calendar year is eligible to
participate in the Purchase Plan, provided that the employee is employed on the
first day of an Offering Period (as defined below) and subject to certain
limitations imposed by Section 423(b) of the Code. See "Purchase of Stock;
Exercise of Option."
OFFERING DATES
In general, the Purchase Plan will be implemented by a series of twelve month
offering periods ("Offering Periods") commencing on or about February 16 and
August 16 of each year (or at such other times as may be determined by the Board
of Directors), each of which shall consist of two (2) consecutive purchase
periods of six months' duration ("Purchase Periods") with the last day of each
Purchase Period being designated a "Purchase Date." A Purchase Period commencing
on February 16 shall end on the next August 15. A Purchase Period commencing on
August 16 shall end on the next February 15. The first Offering Period will
commence on October 1, 1996 and end on August 15, 1997, of which the first
Purchase Period will end on February 15, 1997 and the second Purchase Period
will end on August 15, 1997. The Board of Directors has the power to change the
duration and/or frequency of the Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected.
PARTICIPATION IN THE PLAN
Eligible employees may participate in the Purchase Plan by completing a
subscription agreement in the form provided by the Company and filing it with
the Company at least five (5) business days prior to the first business day of
the applicable Offering Period, unless a later time for filing the subscription
agreement is set by the Board for all eligible employees with respect to a given
offering. The subscription agreement currently authorizes payroll deductions of
up to ten per cent (10%) of the participant's eligible compensation.
PURCHASE PRICE
The purchase price per share at which shares are sold under the Purchase Plan
is eighty-five per cent (85%) of the lower of the fair market value of the
Common Stock on (a) the date of commencement of the Offering Period (the
"Offering Date") or (b) the applicable Purchase Date. The fair market value on a
given date shall be determined by the Board in its discretion based on the
closing price of the Common
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Stock for such date (or, in the event that the Common Stock is not traded on
such date, on the immediately preceding trading date), as reported by the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
National Market.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions during
the applicable Offering Period. The deductions may be up to ten per cent (10%)
of a participant's eligible compensation received on each payday during the
Offering Period. Eligible compensation is defined in the Purchase Plan to
include the regular straight time gross earnings and commissions, and shall not
include payments for overtime, shift premium, incentive compensation, incentive
payments, bonuses or other compensation. A participant may discontinue his or
her participation in the Purchase Plan at any time during the Offering Period
prior to a Purchase Date, and may decrease the rate of his or her payroll
deductions once during the Offering Period by completing and filing a new
subscription agreement. Payroll deductions shall commence on the first payroll
following the Offering Date and shall end on the last payroll paid on or prior
to the last Purchase Period of the Offering Period to which the subscription
agreement is applicable, unless sooner terminated by the participant as provided
below under "Withdrawal." No interest accrues on the payroll deductions of a
participant in the Purchase Plan.
PURCHASE OF STOCK; EXERCISE OF OPTION
By executing a subscription agreement to participate in the Purchase Plan,
the participant is entitled to have shares placed under option. The maximum
number of shares placed under option to a participant in an Offering Period is
the number determined by dividing $25,000 by the fair market value of one share
of the Company's Common Stock on the Offering Date. Within this limit, the
number of shares purchased by a participant will be determined by dividing the
amount of the participant's total payroll deductions for such offering
accumulated prior to the Purchase Date by the lower of (i) eighty-five per cent
(85%) of the fair market value of the Common Stock on the Offering Date, or (ii)
eighty-five per cent (85%) of the fair market value of the Common Stock on the
Purchase Date. See "Payment of Purchase Price; Payroll Deductions" for
additional limitations on payroll deductions. Unless the participant's
participation is discontinued, each participant's option for the purchase of
shares will be exercised automatically on each Purchase Date at the applicable
price. See "Withdrawal." Notwithstanding the foregoing, no participant shall be
permitted to subscribe for shares under the Purchase Plan if immediately after
the grant of the option he or she would own five per cent (5%) or more of the
combined voting power or value of all classes of stock of the Company or of a
parent or of any of the Company's subsidiaries (including stock which may be
purchased under the Purchase Plan or pursuant to any other options), nor shall
any participant be granted an option which would permit the participant to buy
pursuant to the Purchase Plan (or any other employee stock purchase plan
described in Section 423 of the Code) more than $25,000 of fair market value of
stock (determined at the fair market value of the shares at the time the option
is granted) in any calendar year. Furthermore, if the number of shares which
would otherwise be placed under option at the beginning of an Offering Period
exceeds the number of shares then available under the Purchase Plan, a pro rata
allocation of the available shares shall be made in as equitable a manner as is
practicable.
WITHDRAWAL
Although each participant in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest may be decreased once during any Offering Period by completing and
filing a new subscription agreement with the Company. In addition, a
participant's interest may be terminated in whole, but not in part, by signing
and delivering to the Company a notice of withdrawal from the Purchase Plan.
Such withdrawal may be elected at any time prior to the end of the applicable
six-month period prior to a Purchase Date under the Purchase Plan, unless the
subscription agreement was made irrevocable by the participant (at his or her
own election).
Any withdrawal by the participant of accumulated payroll deductions for a
given Offering Period automatically terminates the participant's interest in
that Offering Period. In effect, the participant is
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given an installment option, for a maximum number of shares, which may or may
not be exercised at the end of each six-month Purchase Period. However, unless
the participant actively withdraws from the Offering Period, the option will be
exercised automatically at the end of each Purchase Period, and the maximum
number of full shares purchasable (within the limits of the Purchase Plan) with
the participant's accumulated payroll deductions will be purchased for that
participant at the applicable price.
A participant's withdrawal from an Offering Period does not have an effect
upon such participant's eligibility to participate in subsequent Offering
Periods under the Purchase Plan; however, the participant may not re-enroll in
the same Offering Period after withdrawal.
AUTOMATIC WITHDRAWAL
If the fair market value of the shares on the first Purchase Date of an
Offering Period is less than the fair market value of the shares on the Offering
Date for such Offering Period, then every participant shall automatically (i) be
withdrawn from such Offering Period at the close of such Purchase Date and after
the acquisition of shares for such Purchase Period, and (ii) be enrolled in the
Offering Period commencing on the first business day subsequent to such Purchase
Period.
TERMINATION OF EMPLOYMENT
Upon termination of the participant's continuous status as an employee prior
to the Exercise Date of an Offering Period for any reason, including retirement
or death, the contributions credited to his or her account (and not previously
used for the exercise of options pursuant to the Purchase Plan) will be returned
to him or her, without interest, or, in the case of his or her death, to the
person or persons entitled thereto, and his or her option will be automatically
terminated.
In the event an employee fails to remain in continuous status as an employee
of the Company for at least twenty (20) hours per week during the Offering
Period in which the employee is a participant, he or she will be deemed to have
elected to withdraw from the Purchase Plan and the contributions credited to his
or her account (and not previously used for the exercise of options pursuant to
the Purchase Plan) will be returned to him or her, without interest, and his or
her option will be automatically terminated.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION; CORPORATE TRANSACTIONS
In the event any change, such as a stock split or stock dividend, is made in
the Company's capitalization which results in an increase or decrease in the
number of outstanding shares of Common Stock without receipt of consideration by
the Company, appropriate adjustments will be made in the number of shares
subject to purchase and the purchase price per share covered by each option not
yet exercised, and in the number of shares of Common Stock that have been
authorized for issuance under the Purchase Plan but have not yet been placed
under option. In the event of the proposed dissolution or liquidation of the
Company, each option will terminate immediately prior to the consummation of
such proposed action, unless otherwise provided by the Board of Directors.
In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, each
option under the Purchase Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board of Directors determines, in the exercise
of its sole discretion and in lieu of such assumption or substitution, to
shorten the Offering Period then in progress by setting a new Purchase Date (the
"New Purchase Date"). If the Board shortens the Offering Period then in progress
in lieu of assumption or substitution in the event of a merger or sale of
assets, the Board shall notify each participant in writing, at least ten (10)
days prior to the New Purchase Date, that the Purchase Date for his or her
option has been changed to the New Purchase Date and that his or her option will
be exercised automatically on the New Purchase Date, unless prior to such date
he or she has withdrawn from the Offering Period as provided in the Purchase
Plan. An option granted under the Purchase Plan shall be deemed to be assumed
if, following the sale of assets or merger, the option confers the right to
purchase, for each share of option stock subject to the option immediately prior
to the sale of assets or merger, the consideration (whether stock, cash or other
securities or property) received in the sale of assets or merger
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by holders of Common Stock for each share of Common Stock held on the effective
date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board of Directors may, with the consent of the successor
corporation and the participant, provide for the consideration to be received
upon exercise of the option to be solely common stock of the successor
corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the sale of assets or
merger.
The Board of Directors may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the number of shares subject to
purchase and the purchase price per share covered by each option not yet
exercised, and in the number of shares of Common Stock that have been authorized
for issuance under the Purchase Plan but have not yet been placed under option,
in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares
of its outstanding Common Stock, and in the event of the Company being
consolidated with or merged into any other corporation.
NONTRANSFERABILITY
No rights or accumulated payroll deductions of a participant under the
Purchase Plan may be pledged, assigned or transferred for any reason and any
such attempt may be treated by the Company as an election to withdraw from the
Purchase Plan.
REPORTS
Individual accounts will be maintained for each participant in the Purchase
Plan. Each participant shall receive promptly following each Purchase Date a
report of such participant's account setting forth the total amount of payroll
deductions accumulated, the per share purchase price and the number of shares
purchased and the remaining cash balance, if any.
TERM OF PLAN
The Purchase Plan became effective upon its approval by the Board of
Directors, but the first Offering Period will not commence until the Purchase
Plan has been approved by the stockholders of the Company. The Purchase Plan
shall continue in effect for a term of twenty (20) years unless sooner
terminated.
AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors may at any time amend or terminate the Purchase Plan.
Except as provided under "Adjustments Upon Changes in Capitalization; Corporate
Transactions," such termination shall not affect options previously granted nor
may any amendment make any change in any option granted prior thereto which
adversely affects the rights of any participant. Except as provided in
"Adjustments upon Changes in Capitalization; Corporate Transactions," no
amendment may be made to the Purchase Plan without prior approval of the
stockholders of the Company if such amendment would increase the number of
shares reserved under the Purchase Plan, permit a new class of employees to
participate in the Purchase Plan or make any other change to the Purchase Plan
for which stockholder approval is required to comply with Section 16 of the
Exchange Act, Rule 16b-3 promulgated thereunder or under Section 423 of the Code
(or any successor provisions thereto).
FEDERAL INCOME TAX ASPECTS OF THE PURCHASE PLAN
THE FOLLOWING IS A GENERAL SUMMARY OF THE EFFECT OF U.S. FEDERAL INCOME
TAXATION UPON THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE PURCHASE AND
SALE OF SHARES UNDER THE PURCHASE PLAN. THE SUMMARY DOES NOT PURPORT TO BE
COMPLETE. MOREOVER, THE SUMMARY IS BASED UPON EXISTING STATUTES, REGULATIONS AND
INTERPRETATIONS AS OF THE DATE HEREOF. BECAUSE THE CURRENTLY APPLICABLE RULES
ARE COMPLEX, THE TAX LAWS MAY
8
<PAGE>
CHANGE AND THE INCOME TAX CONSEQUENCES MAY VARY DEPENDING UPON THE PARTICULAR
CIRCUMSTANCES OF EACH PARTICIPANT. THE FOREGOING DOES NOT DISCUSS THE INCOME TAX
LAWS OF ANY MUNICIPALITY, STATE OR NON-U.S. TAXING JURISDICTION OR GIFT, ESTATE
OR OTHER LAWS OTHER THAN U.S. FEDERAL INCOME TAX LAW. THE COMPANY ADVISES EACH
PARTICIPANT TO CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES
OF PARTICIPATION IN THE PURCHASE PLAN.
General Tax Information. The Purchase Plan, and the right of participants to
make purchases thereunder, is intended to qualify for the federal income tax
treatment provided to employee stock purchase plans and their participants under
the provisions of Sections 421 and 423 of the Code. Under these provisions, no
income will be taxable to a participant until the shares purchased under the
Purchase Plan are sold or otherwise disposed of. Upon sale or other disposition
of the shares, the participant will generally be subject to tax in a manner that
depends upon the holding period of the shares. If the shares are sold or
otherwise disposed of (including by gift) more than two years from the first day
of the offering period and more than one year from the date the shares are
purchased, the participant will recognize ordinary income measured as the lesser
of (a) the excess of the fair market value of the shares at the time of such
sale or disposition over the purchase price, or (b) an amount equal to fifteen
per cent (15%) of the fair market value of the shares as of the first day of the
offering period. Any additional gain or loss will be treated as long-term
capital gain or loss. If the shares are sold or otherwise disposed of (including
by gift) before the expiration of either of these holding periods, the
participant will recognize ordinary income generally measured as the excess of
the fair market value of the shares on the date the shares are purchased over
the purchase price. Any additional gain or loss on such sale or disposition will
be long-term or short-term capital gain or loss, depending on whether or not the
disposition occurs more than one year after the date the shares are purchased.
The Company is not entitled to a deduction for amounts taxed as ordinary income
or capital gain to a participant except to the extent of ordinary income
recognized by a participant upon a sale or disposition of shares prior to the
expiration of the holding periods described above. Capital losses are allowed in
full against capital gains plus $3,000 of other income.
The ordinary income reported under the rules described above, added to the
actual purchase price of the shares, determines the tax basis of the shares for
the purpose of determining capital gain or loss on a sale or exchange of the
shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
PURCHASE PLAN AND THE RESERVATION OF 750,000 SHARES
OF COMMON STOCK FOR ISSUANCE THEREUNDER.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Price Waterhouse as the Company's
independent accountants for the fiscal year ending March 29, 1997, and the
stockholders are being asked to ratify such selection. Price Waterhouse has been
engaged as the Company's independent accountants since the Company's inception
in 1985. Representatives of Price Waterhouse are expected to be present at the
Annual Meeting, will be given an opportunity to make a statement if they desire
to do so, and are expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF PRICE WATERHOUSE
AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
9
<PAGE>
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information that has been provided to the
Company with respect to beneficial ownership of shares of the Company's Common
Stock as of June 30, 1996 for (i) each person who is known by the Company to own
beneficially more than 5% of the outstanding shares of Common Stock, (ii) each
executive officer or former executive officer of the Company named in the
Summary Compensation Table, (iii) each director of the Company and (iv) all
directors and executive officers of the Company as a group.
<CAPTION>
SHARES BENEFICIALLY
OWNED(1)(2)
-------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT (%)
- ------------------------------------------------------------- ------------ -----------
<S> <C> <C>
C.N. Reddy(3) .................................................... 7,951,250 20.3
N. Damodar Reddy(4) .............................................. 7,980,150 20.4
State of Wisconsin Investment Board(5) ........................... 3,285,000 8.3
Jon B. Minnis(6) ................................................. 1,102,500 2.9
Kamal Gunsagar(7) ................................................ 236,250 *
Ajit Medhekar(8) ................................................. 196,875 *
Sid Agrawal(9) ................................................... 95,000 *
Sanford L. Kane(10) .............................................. 67,500 *
Phil Richards(11) ................................................ 18,750 *
All executive officers and directors (and the former
executive officer named in the Summary Compensation Table)
as a group (9 persons)(12) ...................................... 17,813,275 44.5
<FN>
- ----------
* Less than 1%
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole voting and sole investment power with respect to all shares
of Common Stock shown in the table to be beneficially owned by them,
subject to community property laws where applicable.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within sixty (60) days upon the exercise of
options. Each stockholder's percentage ownership is determined by assuming
that options that are held by such person (but not those held by any other
person) and that are exercisable within sixty (60) days of June 30, 1996
have been exercised.
(3) Includes 67,500 shares held of record by C.N. Reddy Investments, Inc., of
which C.N. Reddy is the sole shareholder, and 675,000 shares subject to
options exercisable within sixty (60) days of June 30, 1996. The address of
C.N. Reddy is c/o Alliance Semiconductor Corporation, 3099 North First
Street, San Jose, California 95134.
(4) Includes 165,000 shares held of record by N.D.R. Investments, Inc., of
which N. Damodar Reddy is the sole shareholder, and 675,000 shares subject
to options exercisable within sixty (60) days of June 30, 1996. The address
of N. Damodar Reddy is c/o Alliance Semiconductor Corporation, 3099 North
First Street, San Jose, California 95134.
(5) Represents shares held as of May 31, 1996, based on the Company's knowledge
after investigation, but without verification from the State of Wisconsin
Investment Board.
(6) Includes 1,035,000 shares owned of record by Milpitas Materials Company, of
which Mr. Minnis is the President and a shareholder, and 22,500 shares
subject to options exercisable within sixty (60) days of June 30, 1996. The
address of Mr. Minnis is c/o Milpitas Materials Company, P.O. Box 360003,
1125 N. Milpitas Boulevard, Milpitas, California 95035.
(7) Includes 11,250 shares subject to options exercisable within sixty (60)
days of June 30, 1996.
(8) Represents shares owned as of October 26, 1995. Mr. Medhekar commenced
leave from the Company in May 1995 and resigned from the Company effective
September 1995.
(9) Includes 16,875 shares subject to options exercisable within sixty (60)
days of June 30, 1996.
(10) Represents shares subject to options exercisable within sixty (60) days of
June 30, 1996.
(11) Represents shares subject to options exercisable within sixty (60) days of
June 30, 1996.
(12) Includes 1,576,875 shares subject to options exercisable within sixty (60)
days of June 30, 1996.
</FN>
</TABLE>
10
<PAGE>
<TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation of
(i) the Company's Chief Executive Officer, (ii) the four other most highly
compensated executive officers of the Company serving at March 30, 1996 and
(iii) one former executive officer of the Company.
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------- ---------------------
OTHER
BONUS COMPENSATION SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($)(1) ($)(2) OPTION(S) (#)(3)
- --------------------------- ------ ---------- -------- -------------- ---------------------
<S> <C> <C> <C> <C> <C>
N. Damodar Reddy ............... 1996 286,745 -- -- --
President and Chief 1995 249,043 -- 215,218 --
Executive Officer 1994 228,131 -- -- 900,000
C.N. Reddy ..................... 1996 262,998 -- -- --
Senior Vice President-- 1995 240,057 -- 152,085 --
Engineering and Operations 1994 219,006 -- -- 900,000
Sid Agrawal .................... 1996 108,945 16,000 -- --
Vice President--Marketing 1995 95,960 16,000 -- --
1994 92,700 16,000 -- 67,500
Kamal Gunsagar ................. 1996 133,293 -- -- 45,000
Vice President--Contract 1995 120,361 -- -- --
Manufacturing 1994 110,000 -- -- --
Phil Richards(4) ............... 1996 108,433 26,750 -- 75,000
Vice President--Sales
Ajit K. Medhekar ............... 1996 29,424 -- 28,288 --
Vice President--Memory 1995 131,533 -- -- --
Products(5) 1994 115,000 -- -- 112,500
<FN>
- ----------
(1) Represents bonuses earned for services rendered during the fiscal year
listed, even if paid after the end of the fiscal year.
(2) Perquisites are excluded as their aggregate value did not meet the reporting
threshold of the lesser of $50,000 or ten per cent (10%) of the individual's
salary plus bonus. Represents compensation as a result of reductions in the
principal balance of loans from the Company.
(3) To the extent applicable, as adjusted to reflect the three-for-two forward
stock splits effected in the forms of one-for-two stock dividends by the
Company in January 1995 and July 1995, respectively.
(4) Mr. Richards joined the Company in June 1995.
(5) Mr. Medhekar commenced leave from the Company in May 1995 and resigned from
the Company effective September 1995.
</FN>
</TABLE>
11
<PAGE>
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information concerning each grant of options to
purchase the Company's common stock made during the fiscal year 1996 to the
named executive officers:
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF
STOCK PRICE
INDIVIDUAL GRANTS APPRECIATION
------------------------------------------------------------------------------ FOR OPTION TERM ($)(1)
# OF SECURITIES % OF TOTAL OPTIONS ---------------------
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE PRICE EXPIRATION
NAME GRANTED(2) IN FISCAL YEAR (%) PER SHARE ($)(3) DATE 5% 10%
- -------------- ------------------ -------------------- ---------------- ------------ --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kamal Gunsagar 45,000 3.05 10.625(4) 05/08/00 111,096 240,981
Phil Richards 75,000 5.08 10.625(5) 06/12/00 189,765 412,639
<FN>
- ----------
(1) There is no assurance provided to any executive officer or to any other
optionee that the actual stock price appreciation over the option term will
be at the assumed five per cent (5%) and ten per cent (10%) levels set forth
on the table or at any other defined level. Unless the market price of the
Common Stock of the Company does in fact appreciate over the option term, no
value will be realized from the options grants made to the executive
officers or to any other optionee.
(2) Each of the options reported on this table were granted in fiscal 1996 and
originally became exercisable as to twenty-five per cent (25%) of the shares
underlying the option, in four equal annual installments commencing one year
from the date of grant. The reported share amounts have been adjusted to
reflect the three-for-two forward stock split effected in the form of a
one-for-two stock dividend by the Company in July 1995. Each of the reported
options is an incentive stock option ("ISO") to the extent it does not
exceed applicable limits set by the tax laws. For each option that exceeds
such limits, the number of shares underlying the option grant is allocated
between two options, the first an ISO up to the applicable limits set by the
tax laws, and the second a non-statutory option for the balance of the
shares. In each case, vesting continues only so long as employment with the
Company or one of its subsidiaries (or in the case of non-statutory stock
option, one of the Company's affiliates) continues. In January 1996, the
options reported on this table were canceled and replaced with options
having a lower exercise price, as described in the following footnotes and
in "Option Repricings," below, and in "Stock Benefit Committee Report on
Repriced Options," below.
(3) The exercise price may be paid in cash or pursuant to a cashless exercise
procedure under which the optionee provides irrevocable instructions to a
brokerage firm to sell the purchased shares and to remit to the Company, out
of the sale proceeds, an amount equal to the exercise price.
(4) The original exercise price for these options was $25.833 per share (as
adjusted to reflect the three-for-two forward stock split effected in the
form of a one-for-two stock dividend by the Company in July 1995). On
January 26, 1996, these options were repriced to have an exercise price of
$10.625 per share.
(5) The original exercise price for these options was $28.333 per share (as
adjusted to reflect the three-for-two forward stock split effected in the
form of a one-for-two stock dividend by the Company in July 1995). On
January 26, 1996, these options were repriced to have an exercise price of
$10.625 per share.
</FN>
</TABLE>
12
<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning shares acquired on
exercise of stock options during fiscal 1996 and the value of stock options held
at the end of fiscal 1996 by each of the executive officers named in the Summary
Compensation Table above.
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES VALUE AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(2)
ACQUIRED ON REALIZED ------------------------------- -------------------------------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ------------- ------------- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
N. Damodar Reddy..... -- -- 450,000 450,000 3,671,235 3,671,235
C.N. Reddy .......... -- -- 450,000 450,000 3,671,235 3,671,235
Sid Agrawal ......... 88,125 1,450,189 -- 101,250 -- 926,529
Kamal Gunsagar ..... 225,000 1,902,488 -- 45,000 -- --
Ajit Medhekar ...... 106,875 3,699,622 -- -- -- --
Phil Richards ...... -- -- -- 75,000 -- --
<FN>
- ----------
(1) "Value Realized" represents the fair market value of the shares underlying
the option on the date of exercise less the aggregate exercise price, and
may not be realized upon the sale of the shares underlying the option.
(2) These values have not been and may never be realized. They are based on the
difference between the respective exercise prices of outstanding stock
options and the closing price of the Company's Common Stock on March 29,
1996 of $9.625 per share.
</FN>
</TABLE>
<TABLE>
OPTION REPRICINGS
The following table sets forth information concerning the repricing or
amendment of certain options held by the Company's executive officers during the
last fiscal year:
<CAPTION>
NUMBER OF
SECURITIES LENGTH OF
UNDERLYING MARKET PRICE OF EXERCISE PRICE ORIGINAL OPTION
OPTIONS STOCK AT TIME OF AT TIME OF TERM AT DATE OF
REPRICED OR REPRICING OR REPRICING OR NEW EXERCISE REPRICING OR
NAME DATE AMENDED (#) AMENDMENT ($) AMENDMENT ($) PRICE ($) AMENDMENT
- -------------- --------- ------------- ---------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Kamal Gunsagar.... 1/26/96 45,000 10.625 25.833 10.625 4 years, 104 days
Phil Richards..... 1/26/96 75,000 10.625 28.333 10.625 4 years, 138 days
</TABLE>
13
<PAGE>
CERTAIN TRANSACTIONS
In July 1993, the Company entered into a consulting agreement with Kane
Concepts Incorporated, a corporation owned by Sanford L. Kane, a director of the
Company ("Kane Concepts"), pursuant to which Kane Concepts agreed to perform
such consulting services as the Company requested, but no more than 10 hours per
month or 100 hours per year. The Company agreed to pay Kane Concepts $20,000 per
year plus expenses for services rendered under the consulting agreement. The
agreement of Kane Concepts to provide consulting services was not a condition to
Mr. Kane's retention as a director. The agreement was terminated effective March
1996.
In June 1995, the Company loaned Phil Richards, the Company's Vice
President--Sales, $80,000. Mr. Richards has executed a promissory note in favor
of the Company with respect to this loan. Pursuant to the promissory note, Mr.
Richards agreed to pay the balance in four equal annual installments, together
with interest at a rate of seven per cent (7%) per annum, commencing June 14,
1996. In May 1996, Mr. Richards repaid to the Company the sum of $82,000, in
cancellation of the promissory note. The largest amount of indebtedness under
this note was $84,956. In October 1995, the Company loaned Phil Richards
$155,000. Mr. Richards has executed a promissory note in favor of the Company
with respect to this loan. Pursuant to the promissory note, Mr. Richards agreed
to pay the balance in five equal annual installments, together with interest at
a rate of seven per cent (7%) per annum, commencing October 11, 1996. No
payments have been due or made to date with respect to this note, and to date
the largest amount of aggregate indebtedness under this note is $158,680.
In July 1996, the Company loaned Kamal Gunsagar, the Company's Vice
President--Contract Manufacturing, $350,000. Mr. Gunsagar has executed a
promissory note in favor of the Company with respect to this loan. Pursuant to
the promissory note, Mr. Gunsagar agreed to pay the Company $100,000 of the
principal amount thereunder, plus interest at the rate of six and four
one-hundredths per cent (6.04%) per annum, on October 1, 1996. The remaining
principal balance of $250,000 shall be due and payable pursuant to the
promissory note in four equal semi-annual installments, commencing July 1, 1997,
together with interest at the above rate. No payments have been due or made to
date with respect to this note, and to date the largest amount of aggregate
indebtedness under this note is $351,947.
REPORT ON EXECUTIVE COMPENSATION
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act that might incorporate future filings, including this
Proxy Statement, in whole or in part, this section entitled "Report on Executive
Compensation" shall not be incorporated by reference into any such filings or
into any future filings, and shall not be deemed soliciting material or filed
under the Securities Act or Exchange Act.
REPORT OF COMPENSATION COMMITTEE AND STOCK BENEFIT COMMITTEE
The Compensation Committee of the Board of Directors sets the base salary of
the Company's executive officers and approves individual bonuses for executive
officers. The Stock Benefit Committee of the Board of Directors administers the
Company's 1992 Stock Option Plan under which grants may be made to executive
officers and others. The following is a summary of policies of the Compensation
Committee and Stock Benefit Committee that affect the compensation paid to
executive officers, as reflected in the tables and text set forth elsewhere in
this Proxy Statement.
GENERAL COMPENSATION POLICY. The Compensation Committee and Stock Benefit
Committee's overall policies with respect to executive officers is to offer
competitive compensation opportunities for such persons based upon their
personal performance, the financial performance of the Company and their
contribution to that performance. Each executive officer's compensation package
is comprised of three elements: (i) base salary that reflects individual
performance and is designed primarily to be competitive with salary levels in
the industry, (ii) stock-based incentive awards designed to strengthen the
mutuality of interests between the executive officers and the Company's
stockholders, and (iii) for executive officers in the sales and marketing
functions, and for other executive officers in certain other
14
<PAGE>
circumstances, annual or quarterly cash bonuses related to the performance of
the Company for such executive officer's functional area. In addition, from time
the time the Company has forgiven certain debt obligations of executive officers
to the Company.
FACTORS. Several important factors considered in establishing the components
of each executive officer's compensation package for the 1996 fiscal year are
summarized below. Additional factors were taken into account to a lesser degree.
The Compensation Committee and Stock Benefit Committee may in their discretion
apply entirely different factors, such as different measures of financial
performance, for future fiscal years. However, it is presently contemplated that
all compensation decisions will be designed to further the overall compensation
policy described above.
o BASE SALARY. The base salary for each executive officer is set on the basis
of personal performance, the salary levels in effect for comparable positions in
similarly situated companies within the semiconductor industry, and internal
comparability considerations. The Compensation Committee believes that the
Company's most direct competitors for executive talent are not limited to the
companies that the Company would use in a comparison for shareholder returns.
Therefore, the compensation comparison group is not the same as the industry
group index used in the section "Comparison of Stockholder Return," below.
o STOCK-BASED INCENTIVE COMPENSATION. The Stock Benefit Committee approves
periodic grants of stock options to each of the Company's executive officers and
others under the Company's 1992 Stock Option Plan. The grants are designed to
align the interests of the optionees with those of the stockholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Moreover, vesting
schedules (historically four or five years from the date of grant) encourage a
long-term commitment to the Company by its executive officers and other
optionees. Each grant generally allows the optionee to acquire shares of the
Company's Common Stock at a fixed price per share (the fair market value on the
grant date) over a specified period of time (historically, up to one year after
full vesting), thus providing a return to the optionee only if the market price
of the shares appreciates over the option term. The size of the option grant to
each optionee is set at a level that the Stock Benefit Committee deems
appropriate in order to create a meaningful opportunity for stock ownership
based upon the individual's current position with the Company, but also takes
into account the individual's potential for future responsibility and promotion
over the option vesting period, and the individual's performance in recent
periods. The Stock Benefit Committee periodically reviews the number of shares
owned by, or subject to options held by, each executive officer, and additional
awards are considered based upon past performance of the executive officer.
o ANNUAL OR QUARTERLY CASH BONUSES. Other than with respect to executive
officers engaged in the sales and marketing functions, the Company historically
has not had a formal cash bonus program for executive officers, although cash
bonuses have been paid from time to time in the past to selected executive
officers in recognition of superior individual performance. For fiscal 1996,
Messrs. Agrawal and Richards received bonuses based upon the Company's
achievement of certain sales milestones. None of the other executive officers of
the Company earned bonuses during fiscal 1996.
CEO COMPENSATION. In setting the compensation payable during fiscal 1996 to
the Company's Chief Executive Officer, N. Damodar Reddy, the Compensation
Committee used the same factors described above for the executive officers. Mr.
Reddy was not issued any stock-based incentive compensation and did not earn a
bonus during fiscal 1996.
Submitted by the Compensation Committee and the Stock Benefit Committee of
the Company's Board of Directors:
Compensation Committee Stock Benefit Committee
N. Damodar Reddy, Chairman Jon B. Minnis, Chairman
Jon B. Minnis, Member Sanford L. Kane, Member
Sanford L. Kane, Member
STOCK BENEFIT COMMITTEE REPORT ON REPRICED OPTIONS
In January 1996, the Stock Benefit Committee determined that it was in the
best interests of the Company to offer to cancel and replace the then-existing
stock option grants to the optionees with
15
<PAGE>
exercise prices in excess of the then-current fair market value of the Company's
Common Stock. Given the substantial decline in fair market value of the
Company's Common Stock in the months leading up to January 1996, and the fact
that many of the Company's employees had commenced work at the Company during
those months, a large number of the Company's employees held stock option
grants, before the repricing, with exercise prices substantially in excess of
the fair market value of the Company's Common Stock in January 1996.
The objectives of the Company's 1992 Stock Option Plan (the "Stock Option
Plan") are to promote the interests of the Company by providing employees,
officers, directors, and certain consultants, independent contractors and
advisors an incentive to acquire a proprietary interest in the Company and to
render or continue to render services to the Company. It was the view of the
Stock Benefit Committee that stock options outstanding at that time with
exercise prices substantially above the then-current fair market value of the
Company's Common Stock did not provide sufficient equity incentive to the
optionees. The Stock Benefit Committee thus concluded that such option grants
failed to further the objectives of the Stock Option Plan, and should be
canceled and replaced. In the opinion of the Stock Benefit Committee, the
long-term best interests of the Company and all of its stockholders were clearly
served by the retention and motivation of the optionees who remained at the
Company.
In this context, the Stock Benefit Committee decided that effective January
26, 1996 (the "Grant Date"), the optionees who remained at the Company and held
stock options with exercise prices in excess of the fair market value of the
Company's Common Stock as of the Grant Date could receive a one-for-one
replacement of their then-existing unexercised stock options with a new exercise
price of $10.625 per share, the fair market value of the Company's Common Stock
as of the Grant Date. The new lower-priced options had the same term as the
original options, but were subject to a delayed exercise schedule as follows: no
options could be exercised until July 26, 1996, after which time, the original
exercise schedule would resume. Certain other terms of the new options were
different from the old; for example, the new options must be exercised, if at
all, within a shorter period of time following an optionee's cessation of
employment. It is the opinion of the Stock Benefit Committee that the repricing
program furthered the objectives of building employee morale and providing
strengthened incentives for the Company's optionees. The Stock Benefit Committee
notes that since the repricing, the fair market value of the Company's Common
Stock has declined from the exercise price of the repriced options.
Submitted by the Stock Benefit Committee of the Company's Board of Directors:
Jon B. Minnis, Chairman
Sanford L. Kane, Member
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
The Company presently has no employment contracts, plans or arrangements in
effect for executive officers in connection with their resignation, retirement
or termination of employment or following a change in control or ownership of
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee, are Messrs. Sanford L. Kane, Jon
B. Minnis and N. Damodar Reddy. The members of the Stock Benefit Committee are
Messrs. Kane and Minnis. Neither Mr. Kane nor Mr. Minnis was at any time during
fiscal 1996 or any other time an officer or employee of the Company. Mr. Reddy
has been President and Chief Executive Officer of the Company, and Chairman of
the Company's Board of Directors, since the Company's founding in 1985.
16
<PAGE>
COMPARISON OF STOCKHOLDER RETURN
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act or the Exchange Act that might
incorporate future filings, including this Proxy Statement, in whole or in part,
this section entitled "Comparison of Stockholder Return" shall not be
incorporated by reference into any such filings or into any future filings, and
shall not be deemed soliciting material or filed under the Securities Act or
Exchange Act.
<TABLE>
The graph below compares the cumulative stockholder return on the Company's
Common Stock from the date of the Company's initial public offering (November
30, 1993) to March 30, 1996 with the cumulative return on the Nasdaq Stock
Market (U.S.) Index and the Nasdaq Electronic Component Stock Index over the
same period (assuming the investment of $100 in the Company's Common Stock and
in each of the indexes on November 30, 1993 and reinvestment of all dividends).
[The following description data is supplied in accordance with Rule 304(d) of
Regulation S-T]
COMPARISON OF CUMULATIVE TOTAL RETURN
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
11/30/93 12/31/93 3/31/94 6/30/94 9/30/94 12/30/94 3/31/95 6/30/95 9/30/95 12/31/95 3/31/96
-------- -------- ------- ------- ------- -------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alliance Semiconductor 100 128.1 159.4 137.5 284.4 390.6 796.9 918.8 1,118.0 327.0 270.7
Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
Nasdaq Stock Market (U.S) 100 102.8 98.5 93.9 101.6 100.5 109.5 125.3 140.4 142.1 148.7
Index
- ------------------------------------------------------------------------------------------------------------------------------------
Nasdaq Electronic 100 102.7 108.6 97.9 109.1 113.5 142.0 201.9 217.5 187.9 186.8
Component Stock Index
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of the Company's Common
Stock ("10% Stockholders"), to file with the Securities and Exchange Commission
("SEC") initial reports of ownership on a Form 3 and reports of changes in
ownership of Common Stock and other equity securities of the Company on a Form 4
or Form 5. Officers, directors and 10% Stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during fiscal 1996 all Section 16(a) filing requirements
applicable to its officers, directors, and 10% Stockholders were complied with,
except that C.N. Reddy timely filed one Form 5 reporting a transaction that
should have been reported timely on a Form 4, and Phil Richards filed his
initial report on Form 3 approximately one month late.
STOCKHOLDER PROPOSALS
Stockholder proposals that are intended to be presented at the Company's 1997
Annual Meeting of Shareholders must be received by the Company no later than
April 23, 1997.
OTHER BUSINESS
The Board of Directors does not presently intend to bring any other business
before the Annual Meeting and, so far as is known to the Board, no matters are
to be brought before the Annual Meeting except as specified in the notice of
such meeting. As to any business that may properly come before the Annual
Meeting, or any adjournment thereof, however, it is intended that Proxies, in
the form enclosed, will be voted in accordance with the judgment of the persons
voting such Proxies.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY IN THE RETURN ENVELOPE PROVIDED SO
THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.
By Order of the Board of Directors
/s/ C.N. REDDY
C.N. REDDY
Senior Vice President--Engineering and
Operations, and Secretary
18
<PAGE>
APPENDIX A
PROXY ALLIANCE SEMICONDUCTOR CORPORATION PROXY
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 19, 1996
THIS PROXY IS SOLICITED ON BEHALF OF ALLIANCE SEMICONDUCTOR CORPORATION'S
BOARD OF DIRECTORS
The undersigned hereby appoints N. Damodar Reddy and C.N. Reddy, or either of
them, each with power of substitution and revocation thereof, to represent the
undersigned at the Annual Meeting of Stockholders of Alliance Semiconductor
Corporation (the "Company") to be held at 3099 North First Street, San Jose,
California, on Thursday, September 19, 1996 at 10:00 a.m., and any adjournments
thereof, and to vote the number of shares the undersigned would be entitled to
vote if personally present at the meeting as directed on the reverse side of
this proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
AND WILL BE VOTED AS DIRECTED ON THE REVERSE SIDE OF THIS PROXY. IN THE ABSENCE
OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE FOUR NOMINEES FOR ELECTION AND
FOR PROPOSALS 2 AND 3. In their discretion, the proxy holders named above are
authorized to vote upon such other business as may properly come before the
meeting and any adjournment thereof to the extent authorized by Rule 14a-4(c)
promulgated by the Securities and Exchange Commission. The Board of Directors
recommends a vote for election of each of the four nominees and for Proposals 2
and 3. The undersigned hereby acknowledges receipt of: (a) the Notice of Annual
Meeting of Stockholders of the Company; (b) the accompanying Proxy Statement;
and (c) the Annual Report to Stockholders for the fiscal year ended March 30,
1996.
(CONTINUED ON THE OTHER SIDE)
<PAGE>
- --------------------------------------------------------------------------------
[ X ] Please mark
your votes
as this
WITHHOLD
1. ELECTION OF DIRECTORS FOR* FOR ALL
(The Board recommends a vote "FOR" [ ] [ ]
all nominees listed below)
For all nominees listed below
(except as marked to the contrary).
WITHHOLD AUTHORITY to vote for all nominees listed below.
Sanford L. Kane, Jon B. Minnis, C.N. Reddy and N. Damodar Reddy
(Instruction to withhold authority to vote for any individual nominee,
strike through the nominee's name above)
I PLAN TO ATTEND THE MEETING [ ]
2. APPROVAL OF ADOPTION OF THE COMPANY'S FOR AGAINST ABSTAIN
1996 EMPLOYEE STOCK PURCHASE PLAN [ ] [ ] [ ]
AND THE RESERVATION FOR ISSUANCE
THEREUNDER OF AN AGGREGATE OF 750,000
SHARES OF COMMON STOCK. (The Board
recommends a vote "FOR")
3. RATIFICATION OF SELECTION OF PRICE FOR AGAINST ABSTAIN
WATERHOUSE AS THE COMPANY'S INDEPENDENT [ ] [ ] [ ]
ACCOUNTANTS (The Board recommends a
vote "FOR").
Please sign exactly as your name(s) appears on your stock certificate.
If shares of stock stand of record in the names of two or more persons
or in the name of husband and wife, whether as joint tenants or
otherwise, both or all of such persons should sign the proxy. If
shares of stock are held of record by a corporation, the proxy should
be executed by the president or vice president and the secretary or
assistant secretary. Executors or administrators or other fiduciaries
who execute the above proxy for a deceased shareholder should give
their full title. Please date this proxy.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED
TO SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE PROVIDED
SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
Signature(s)__________________________________________ Dated:___________, 1996
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, as 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.
- --------------------------------------------------------------------------------
<PAGE>
[GRAPHIC OMITTED](R)
ALLIANCE SEMICONDUCTOR CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 1996 Employee Stock
Purchase Plan (the "Plan") of Alliance Semiconductor Corporation, a Delaware
corporation with its principal offices at 3099 North First Street, San Jose,
California 95134 (the "Company").
1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company. It is the intention of the Company to have the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" shall mean the Common Stock of the Company.
(d) "Company" shall mean Alliance Semiconductor Corporation, a
Delaware corporation.
(e) "Compensation" shall mean all regular straight time gross
earnings and commissions, and shall not include payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses and other
compensation.
(f) "Continuous Status as an Employee" shall mean the absence of
any interruption or termination of service as an Employee. Continuous Status as
an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
(g) "Contributions" shall mean all amounts credited to the account
of a participant pursuant to the Plan.
<PAGE>
(h) "Designated Subsidiaries" shall mean the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(i) "Employee" shall mean any person, including an Officer, who is
customarily employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Purchase Date" shall mean the last day of each Purchase Period
of the Plan.
(l) "Offering Date" shall mean the first business day of each
Offering Period of the Plan.
(m) "Offering Period" shall mean a period of twelve (12) months
commencing on February 16 and August 16 of each year, except for the first
Offering Period as set forth in Section 4(a).
(n) "Officer" shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(o) "Plan" shall mean this Employee Stock Purchase Plan.
(p) "Purchase Period" shall mean a period of six (6) months within
an Offering Period, except for the first Purchase Period as set forth in Section
4(b).
(q) "Subsidiary" shall mean a corporation, domestic or foreign, of
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any person who is an Employee as of the Offering Date of a
given Offering Period shall be eligible to participate in such Offering Period
under the Plan, subject to the requirements of Section 5(a) and the limitations
imposed by Section 423(b) of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any parent or subsidiary of the Company, or (ii) if such option
would permit his or her rights to purchase stock under all employee stock
purchase plans (described in Section 423
-2-
<PAGE>
of the Code) of the Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value of such
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. Offering Periods and Purchase Periods.
(a) Offering Periods. The Plan shall be implemented by a series of
Offering Periods of twelve (12) months' duration, with new Offering Periods
commencing on or about February 16 and August 16 of each year (or at such other
time or times as may be determined by the Board of Directors). The first
Offering Period shall commence on October 1, 1996 and continue until August 15,
1997. The Plan shall continue until terminated in accordance with Section 20
hereof. The Board of Directors of the Company shall have the power to change the
duration and/or the frequency of Offering Periods with respect to future
offerings without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Offering Period
to be affected. Eligible employees may not participate in more than one Offering
Period at a time.
(b) Purchase Periods. Each Offering Period shall consist of two (2)
consecutive purchase periods of six (6) months duration. The last day of each
Purchase Period shall be the "Purchase Date" for such Purchase Period. A
Purchase Period commencing on February 16 1 shall end on the next August 15. A
Purchase Period commencing on August 16 shall end on the next February 15. The
first Purchase Period shall commence on October 1, 1996 and shall end on
February 15, 1997. The Board of Directors of the Company shall have the power to
change the duration and/or frequency of Purchase Periods with respect to future
purchases without stockholder approval if such change is announced at least
fifteen (15) days prior to the scheduled beginning of the first Purchase Period
to be affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement on the form provided by the Company and
filing it with the Company's payroll office at least five (5) business days
prior to the first business day of the applicable Offering Date, unless a later
time for filing the subscription agreement is set by the Board for all eligible
Employees with respect to a given offering. The subscription agreement shall set
forth the percentage of the participant's Compensation (which shall be not less
than one percent (1%) and not more than ten percent (10%)) to be paid as
Contributions pursuant to the Plan.
(b) Payroll deductions shall commence on the first payroll
following the Offering Date and shall end on the last payroll paid on or prior
to the last Purchase Period of the Offering Period to which the subscription
agreement is applicable, unless sooner terminated by the participant as provided
in Section 10.
6. Method of Payment of Contributions.
(a) The participant shall elect to have payroll deductions
made on each payday during the Offering Period in an amount not less than one
percent (1%) and not more
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<PAGE>
than ten percent (10%) of such participant's Compensation on each such payday.
All payroll deductions made by a participant shall be credited to his or her
account under the Plan. A participant may not make any additional payments into
such account.
(b) A participant may discontinue his or her participation in the
Plan as provided in Section 10, or, on one occasion only during the Offering
Period, may decrease the rate of his or her Contributions during the Offering
Period by completing and filing with the Company a new subscription agreement.
The change in rate shall be effective as of the beginning of the next calendar
month following the date of filing of the new subscription agreement, if the
agreement is filed at least ten (10) business days prior to such date and, if
not, as of the beginning of the next succeeding calendar month
(c) Notwithstanding the foregoing, to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 3(b) herein, a
participant's payroll deductions may be decreased to 0% at such time during any
Offering Period which is scheduled to end during the current calendar year that
the aggregate of all payroll deductions accumulated with respect to such
Offering Period and any other Offering Period ending within the same calendar
year equal $21,250. Payroll deductions shall re-commence at the rate provided in
such participant's subscription Agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in Section 10.
7. Grant of Option.
(a) On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Purchase Date a number of shares of the Company's Common Stock
determined by dividing such Employee's Contributions accumulated prior to such
Purchase Date and retained in the participant's account as of the Purchase Date
by the lower of (i) eighty-five percent (85%) of the fair market value of a
share of the Company's Common Stock on the Offering Date, or (ii) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Purchase Date; provided, however, that the maximum number of shares an
Employee may purchase during each Offering Period shall be determined at the
Offering Date by dividing $25,000 by the fair market value of a share of the
Company's Common Stock on the Offering Date, and provided further that such
purchase shall be subject to the limitations set forth in Sections 3(b) and 13.
The fair market value of a share of the Company's Common Stock shall be
determined as provided in Section 7(b).
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Offering Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Purchase Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion based on the closing
price of the Common Stock for such date (or, in the event that the Common Stock
is not traded on such date, on the immediately preceding trading date), as
reported by the National Association of Securities Dealers Automated Quotation
(Nasdaq) National Market.
-4-
<PAGE>
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in Section 10, his or her option for the purchase of shares will be
exercised automatically on each Purchase Date of an Offering Period, and the
maximum number of full shares subject to the option will be purchased at the
applicable option price with the accumulated Contributions in his or her
account. The shares purchased upon exercise of an option hereunder shall be
deemed to be transferred to the participant on the Purchase Date. During his or
her lifetime, a participant's option to purchase shares hereunder is exercisable
only by him or her.
9. Delivery. As promptly as practicable after each Purchase Date of
each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, of a certificate representing the shares purchased
upon exercise of his or her option. Any cash remaining to the credit of a
participant's account under the Plan after a purchase by him or her of shares at
the termination of each Purchase Period, or which is insufficient to purchase a
full share of Common Stock of the Company, shall be carried over to the next
Purchase Period if the Employee continues to participate in the Plan, or if the
Employee does not continue to participate, shall be returned to said
participant.
10. Voluntary Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the
Contributions credited to his or her account under the Plan (and not previously
used for the exercise of options pursuant to Section 8) at any time prior to
each Purchase Date by giving written notice to the Company. All of the
participant's Contributions credited to his or her account under the Plan (and
not previously used for the exercise of options pursuant to Section 8) will be
paid to him or her promptly after receipt of his or her notice of withdrawal and
his or her option for the current period will be automatically terminated, and
no further Contributions for the purchase of shares will be made during the
Offering Period.
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Purchase Date of an Offering Period for any reason,
including retirement or death, the Contributions credited to his or her account
under the Plan (and not previously used for the exercise of options pursuant to
Section 8) will be returned to him or her or, in the case of his or her death,
to the person or persons entitled thereto under Section 15, and his or her
option will be automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status
as an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the Contributions credited to his
or her account will be returned to him or her and his or her option will be
automatically terminated.
(d) A participant's withdrawal from an offering will not have any
effect upon his or her eligibility to participate in a succeeding offering or in
any similar plan which may hereafter be adopted by the Company.
-5-
<PAGE>
11. Automatic Withdrawal. If the fair market value of the shares on the
first Purchase Date of an Offering Period is less than the fair market value of
the shares on the Offering Date for such Offering Period, then every participant
shall automatically (i) be withdrawn from such Offering Period at the close of
such Purchase Date and after the acquisition of shares for such Purchase Period,
and (ii) be enrolled in the Offering Period commencing on the first business day
subsequent to such Purchase Period.
12. Interest. No interest shall accrue on the Contributions of a
participant in the Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock
which shall be made available for sale under the Plan shall be seven hundred and
fifty thousand (750,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 19. If the total number of
shares which would otherwise be subject to options granted pursuant to Section
7(a) on the Offering Date of an Offering Period exceeds the number of shares
then available under the Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the Company shall make a pro rata
allocation of the shares remaining available for option grant in as uniform a
manner as shall be practicable and as it shall determine to be equitable. In
such event, the Company shall give written notice of such reduction of the
number of shares subject to the option to each Employee affected thereby and
shall similarly reduce the rate of Contributions, if necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Board, or a committee named by the Board, shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration
of the Plan. The composition of the committee shall be in accordance with the
requirements to obtain or retain any available exemption from the operation of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated thereunder
(or any successor provisions thereto).
15. Designation of Beneficiary.
(a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to the end of a Purchase Period but prior to delivery to him or her
of such shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's
account under the Plan in the event
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<PAGE>
of such participant's death prior to the Purchase Date of an Offering Period. If
a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant (and his or her spouse, if any) at any time by written notice. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such shares and/or cash to the
executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such shares and/or cash to the
spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
16. Transferability. Neither Contributions credited to a participant's
account nor any rights with regard to the exercise of an option or to receive
shares under the Plan may be assigned, transferred, pledged or otherwise
disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15) by the participant. Any such attempt
at assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10.
17. Use of Funds. All Contributions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such Contributions.
18. Reports. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to participating
Employees promptly following the Purchase Date, which statements will set forth
the amounts of Contributions, the per share purchase price, the number of shares
purchased and the remaining cash balance, if any.
19. Adjustments Upon Changes in Capitalization; Corporate Transactions.
(a) Adjustment. Subject to any required action by the stockholders
of the Company, (1) the number of shares of Common Stock covered by each option
under the Plan which has not yet been exercised, (2) the price per share of
Common Stock covered by each option under the Plan which has not yet been
exercised, and (3) the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), each shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common 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 issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and
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<PAGE>
no adjustment by reason thereof shall be made with respect to (x) the number of
shares of Common Stock covered by each option under the Plan which has not yet
been exercised, (y) the price per share of Common Stock covered by each option
under the Plan which has not yet been exercised, or (z) the Reserves.
(b) Corporate Transactions. In the event of the proposed
dissolution or liquidation of the Company, the Offering Period will terminate
immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. In the event of a proposed sale of all or substantially
all of the assets of the Company, or the merger of the Company with or into
another corporation, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a parent
or subsidiary of such successor corporation, unless the Board determines, in the
exercise of its sole discretion and in lieu of such assumption or substitution,
to shorten the Offering Period then in progress by setting a new Purchase Date
(the "New Purchase Date"). If the Board shortens the Offering Period then in
progress in lieu of assumption or substitution in the event of a merger or sale
of assets, the Board shall notify each participant in writing, at least ten (10)
days prior to the New Purchase Date, that the Purchase Date for his or her
option has been changed to the New Purchase Date and that his or her option will
be exercised automatically on the New Purchase Date, unless prior to such date
he or she has withdrawn from the Offering Period as provided in Section 10. For
purposes of this paragraph, an option granted under the Plan shall be deemed to
be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board may, with the consent of the successor corporation and
the participant, provide for the consideration to be received upon exercise of
the option to be solely common stock of the successor corporation or its parent
equal in fair market value to the per share consideration received by holders of
Common Stock and the sale of assets or merger.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
number of shares of Common Stock covered by each option under the Plan which has
not yet been exercised and the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
20. Amendment or Termination.
(a) The Board of Directors of the Company may at any time terminate
or amend the Plan. Except as provided in Section 19, no such termination may
affect options
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<PAGE>
previously granted, nor may an amendment make any change in any option
theretofore granted which adversely affects the rights of any participant. In
addition, to the extent necessary to comply with Rule 16b-3 or any successor
provision promulgated under the Exchange Act, or under Section 423 of the Code
(or any successor rule or provision or any applicable law or regulation), the
Company shall obtain stockholder approval in such a manner and to such a degree
as so required.
(b) Without stockholder consent and without regard to whether any
participant rights may be considered to have been adversely affected, the Board
(or its committee) shall be entitled to change the Offering Periods and Purchase
Periods, limit the frequency and/or number of changes in the amount withheld
during an Offering Period, establish the exchange ratio applicable to amounts
withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a participant in order to adjust for delays
or mistakes in the Company's processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from
the participant's Compensation, and establish such other limitations or
procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Plan.
21 Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated under each of the foregoing, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject
to the approval of counsel for the Company with respect to such compliance.
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 are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
23. Term of Plan; Effective Date. The Plan shall become effective upon
the earlier to occur of its adoption by the Board of Directors or its approval
by the stockholders of the Company. It shall continue in effect for a term of
twenty (20) years unless sooner terminated under Section 20.
24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of shares by, persons subject to
Section 16 of the
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<PAGE>
Exchange Act shall comply with the applicable provisions of Rule 16b-3
promulgated thereunder (or any successor provision thereto). This Plan shall be
deemed to contain, and such options shall contain, and the shares issued upon
exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Exchange Act with respect to Plan transactions.
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<PAGE>
[GRAPHIC OMITTED](R)
ALLIANCE SEMICONDUCTOR CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
New Election ______
Change of Election ______
1. I, ________________________, hereby elect to participate in the 1996
Employee Stock Purchase Plan (the "Plan") of Alliance Semiconductor Corporation
(the "Company") for the Offering Period ______________, 19__ to _______________,
19__, and subscribe to purchase shares of the Company's Common Stock in
accordance with this Subscription Agreement and the Plan.
2. I elect to have Contributions in the amount of ____% of my
Compensation, as those terms are defined in the Plan, applied to this purchase.
I understand that this amount must not be less than one per cent (1% ) and not
more than ten per cent (10%) of my Compensation during the Offering Period.
(Please note that no fractional percentages are permitted).
3. I hereby authorize payroll deductions from each paycheck during the
Offering Period at the rate stated in Paragraph 2 of this Subscription
Agreement. I understand that all payroll deductions made by me shall be credited
to my account under the Plan and that I may not make any additional payments
into such account. I understand that all payments made by me shall be
accumulated for the purchase of shares of Common Stock at the applicable
purchase price determined in accordance with the Plan. I further understand
that, except as otherwise set forth in the Plan, shares will be purchased for me
automatically on the Purchase Date of each Offering Period unless I otherwise
withdraw from the Plan by giving written notice to the Company for such purpose.
I further understand that no interest shall accrue or be paid on the amounts in
my account under the Plan.
4. I understand that I may discontinue at any time prior to the
Purchase Date my participation in the Plan as provided in Section 10 of the
Plan. I also understand that I can decrease the rate of my Contributions on one
occasion only during any Offering Period by completing and filing a new
Subscription Agreement with such decrease taking effect as of the
<PAGE>
beginning of the calendar month following the date of filing of the new
Subscription Agreement, if filed at least ten (10) business days prior to the
beginning of such month. Further, I may change the rate of deductions for future
Offering Periods by filing a new Subscription Agreement, and any such change
will be effective as of the beginning of the next Offering Period. In addition,
I acknowledge that, unless I discontinue my participation in the Plan as
provided in Section 10 of the Plan, my election will continue to be effective
for each successive Offering Period.
5. I have received a copy of the Company's most recent description of
the Plan and a copy of the complete "Alliance Semiconductor Corporation 1996
Employee Stock Purchase Plan." I understand that my participation in the Plan is
in all respects subject to the terms of the Plan.
6. Shares purchased for me under the Plan should be issued in the
name(s) of (name of employee or employee and spouse only):
------------------------------------
------------------------------------
7. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and shares due to me under the Plan:
NAME: (Please print) _____________________________________
(First) (Middle) (Last)
- -------------------- -------------------------------------
(Relationship) (Address)
-------------------------------------
8. I understand that if I dispose of any shares received by me pursuant
to the Plan within two (2) years after the Offering Date (the first day of the
Offering Period during which I purchased such shares) or within one (1) year
after the Purchase Date, I will be treated for federal income tax purposes as
having received ordinary compensation income at the time of such disposition in
an amount equal to the excess of the fair market value of the shares on the
Purchase Date over the price which I paid for the shares, regardless of whether
I disposed of the shares at a price less than their fair market value at the
Purchase Date. The remainder of the gain or loss, if any, recognized on such
disposition will be treated as capital gain or loss.
9. If I dispose of such shares at any time after expiration of both the
2-year and 1-year holding periods referenced in Paragraph 8 above, I understand
that I will be treated for federal income tax purposes as having received
compensation income only to the extent of an amount equal to the lesser of (a)
the excess of the fair market value of the shares at the time of
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<PAGE>
such disposition over the purchase price which I paid for the shares under the
option, or (b) 15% of the fair market value of the shares on the Offering Date.
The remainder of the gain or loss, if any, recognized on such disposition will
be treated as capital gain or loss.
10. I hereby agree to notify the Company in writing within thirty (30)
days after the date of any disposition of Common Stock I receive pursuant to the
Plan, and I will make adequate provision for federal, state or other tax
withholding obligations, if any, which arise upon the disposition of the Common
Stock. The Company may, but will not be obligated to, withhold from my
compensation the amount necessary to meet any applicable withholding obligation
including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to the sale or early disposition of Common
Stock by me.
11. I understand that the above tax summary is only a summary and is
subject to change. I further understand that I should consult a tax advisor
concerning the tax implications of the purchase and sale of stock under the
Plan.
12. I hereby agree to be bound by the terms of the Plan. The
effectiveness of this Subscription Agreement is dependent upon my eligibility to
participate in the Plan.
13. Restriction on Exercise. This option to purchase Common Stock
pursuant to the Plan may not be exercised unless such exercise is in compliance
with the Securities Act of 1933 and all applicable state securities laws as they
are in effect on the date of exercise, and the requirements of any stock
exchange or national market system on which the Company's Common Stock may be
listed at the time of exercise. I understand that the Company is under no
obligation to register, qualify or list the Common Stock reserved for issuance
under the Plan with the Securities and Exchange Commission ("SEC"), any state
securities commission or any stock exchange to effect such compliance.
14. No Right to Employment. Nothing in the Plan or in this Subscription
Agreement shall confer on me any right to continue in the employ of, or other
relationship with, the Company or with any parent, subsidiary or affiliate of
the Company or limit in any way the right of the Company or of any parent,
subsidiary or affiliate of the Company to terminate my employment or other
relationship at any time, with or without cause.
15. Interpretation. Any dispute regarding the interpretation of this
Subscription Agreement shall be submitted by me or the Company to the Company's
Board of Directors (or the committee named by the board to administer the Plan)
(the "Committee") for review. The resolution of such a dispute by the Board or
Committee shall be final and binding on the Company and on me.
16. Privileges of Stock Ownership. I understand that I shall not have
any of the rights of a stockholder with respect to any Common Stock pursuant to
the Plan until I exercise the option pursuant to Section 8 of the Plan and pay
the exercise price thereof.
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<PAGE>
17. Successors and Assigns. The Company may assign any of its rights
under this Subscription Agreement. This Subscription Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer set forth herein and in the Plan, this
Subscription Agreement shall be binding upon me and my heirs, executors,
administrators, legal representatives, successors and assigns.
18. Entire Agreement. The Plan is incorporated herein by this
reference. This Subscription Agreement and the Plan (the "Agreements")
constitute the entire agreement of the Company and myself and supersede all
prior undertakings and agreements, oral or written, with respect to the subject
matter hereof. The Agreements may not be contradicted by evidence of any prior
or contemporaneous agreement. To the extent that the policies and procedures of
the Company apply to me and are inconsistent with the terms of the Agreements,
the provisions of the Agreements shall control.
19. Amendments; Waivers. This Subscription Agreement may not be
modified, amended, or terminated except by an instrument in writing, signed by
the Company and myself. No failure to exercise and no delay in exercising any
right, remedy, or power under this Subscription Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power under this Subscription Agreement preclude any other or further
exercise thereof, or the exercise of any other right, remedy, or power provided
herein or by law or in equity.
20. Severability; Enforcement. If a court or arbitrator holds any
provision of this Subscription Agreement to be invalid, unenforceable, or void,
the remainder of this Subscription Agreement shall remain in full force and
effect.
21. Attorneys' Fees and Costs. In any legal action, arbitration, or
other proceeding brought to enforce or interpret the terms of this Subscription
Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and costs.
22. Governing Law. This Subscription Agreement shall be governed by and
construed in accordance with the law of the State of California, without
reference to that body of law concerning choice of law or conflicts of law,
except that the General Corporation Law of Delaware ("GCLD") shall apply to all
matters governed by the GCLD, including without limitation matters concerning
the validity of grants of stock options and actions of the Company's board of
directors or any committee thereof.
23. Action by the Company. All actions required or permitted to be
taken under this Subscription Agreement by the Company, including without
limitation, exercise of discretion, consents, waivers, and amendments to this
Subscription Agreement, shall be made and authorized only by the President or by
his or her representative specifically authorized to fulfill these obligations
under this Subscription Agreement.
24. Notices. All notices required or permitted by this Subscription
Agreement must be in writing and shall be deemed to have been duly given if
delivered by hand; mailed, postage
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<PAGE>
prepaid, by certified or registered mail, return receipt requested; or deposited
with any return receipt express courier, prepaid; and addressed to me at the
address listed above or to the Company at: Alliance Semiconductor Corporation,
3099 North First Street, San Jose, California 95134, Attn: General Counsel. I
shall timely notify the Company in writing of any change in my address. Notice
of change of address shall be effective only when done in accordance with this
Paragraph 24. All notices shall be deemed to have been given or delivered upon:
personal delivery; three days after deposit in the United States mail by
certified or registered mail, return receipt requested; or one business day
after deposit with any return receipt express courier (prepaid).
Acceptance
I hereby acknowledge: I have received a copy of the Plan and
Subscription Agreement; I have had the opportunity to consult legal
counsel in regard to the Plan and Subscription Agreement, and have
availed myself of that opportunity to the extent I wish to do so; I
have read and understand the Plan and Subscription Agreement, and am
fully aware of the legal effect of each; I have entered into this
Subscription Agreement freely and voluntarily and based on my own
judgment and not on any representations or promises other than those
contained in the Plan and Subscription Agreement; and I have entered
into this Subscription Agreement subject to all the terms and
conditions of the Plan and this Subscription Agreement.
I acknowledge that there may be adverse tax consequences upon exercise
of any option exercised pursuant to the Plan and Subscription
Agreement, or pursuant to the disposition of any shares acquired
thereby, and that I should consult a tax adviser prior to any such
exercise or disposition.
SIGNATURE: ______________________________________
SOCIAL SECURITY #: ______________________________
DATE: ___________________________________________
SPOUSE'S SIGNATURE (necessary
if beneficiary is not spouse):
- -------------------------------------------------
(Signature)
- -------------------------------------------------
(Print name)
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<PAGE>
[GRAPHIC OMITTED](R)
ALLIANCE SEMICONDUCTOR CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
I, __________________________, hereby elect to withdraw my
participation in the 1996 Employee Stock Purchase Plan (the "Plan") of Alliance
Semiconductor Corporation (the "Company") for the Offering Period commencing
______________________. This withdrawal covers all Contributions credited to my
account (and not already used for the purchase of options pursuant to the Plan)
and is effective on the date designated below.
I understand that all Contributions credited to my account (and not
already used for the purchase of options pursuant to the Plan) will be paid to
me within ten (10) business days of receipt by the Company of this Notice of
Withdrawal and that my option for the current period will automatically
terminate, and that no further Contributions for the purchase of shares can be
made by me during the Offering Period.
I further understand and agree that I shall be eligible to participate
in succeeding offering periods only by delivering to the Company a new
Subscription Agreement.
Dated:___________________ __________________________________
Signature of Employee
__________________________________
Social Security Number
