<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RAMBUS INC.
--------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
(2) Aggregate number of securities to which transaction applies: _________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): ___________
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid: ______________________________________________________
[_] Fee paid previously with preliminary materials: ___________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement no.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
<PAGE>
[RAMBUS LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 30, 1998
___________
To the Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Rambus Inc., a Delaware corporation (the "Company"), will be held
on Friday, January 30, 1998 at 9:00 a.m., local time, at the Holiday Inn, 625 El
Camino Real, Palo Alto, California 94301, for the following purposes:
1. To elect three Class I directors for a term of two years and until
their successors are duly elected and qualified.
2. To ratify the appointment by the Board of Directors of the firm
Coopers & Lybrand L.L.P. as independent auditors of the Company for
the fiscal year ending September 30, 1998.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice of Annual Meeting.
Only holders of record of the Company's common stock at the close of
business on December 12, 1997, the record date, are entitled to vote on the
matters listed in this Notice of Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to sign and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Annual Meeting may vote in person even if he or she has returned a proxy.
By Order Of The Board Of Directors
of Rambus Inc.
Gary G. Harmon
Vice President, Finance, Chief Financial Officer
and Secretary
Mountain View, California
December 30, 1997
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY
AS POSSIBLE IN THE ENCLOSED ENVELOPE
<PAGE>
RAMBUS INC.
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROCEDURAL MATTERS................................................................... 1
General...................................................................... 1
Voting at the Annual Meeting; Record Date.................................... 1
Quorum; Required Vote........................................................ 1
Proxies...................................................................... 2
Expenses of Solicitation..................................................... 2
Procedure for Submitting Stockholder Proposals............................... 3
PROPOSAL ONE: ELECTION OF DIRECTORS................................................. 4
General...................................................................... 4
Nominees for Class I Directors............................................... 4
Information Regarding Nominees and Other Directors........................... 5
Board Meetings and Committees................................................ 7
Director Compensation........................................................ 7
PROPOSAL TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS................... 9
Required Vote................................................................ 9
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT............................. 10
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.................................... 12
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.......................... 12
EXECUTIVE OFFICER COMPENSATION....................................................... 13
Executive Officers of the Company............................................ 13
Summary Compensation Table................................................... 15
Option Grants in Last Fiscal Year............................................ 15
Aggregate Option Exercises in Fiscal 1997 and Fiscal Year-End Option Values.. 16
Employment Agreements........................................................ 16
CERTAIN TRANSACTIONS................................................................. 17
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS....................... 17
Compensation Philosophy and Policies......................................... 18
Elements of Compensation..................................................... 18
Fiscal 1997 Executive Compensation........................................... 19
Fiscal 1997 Chief Executive Officer Compensation............................. 19
COMPANY STOCK PRICE PERFORMANCE GRAPH................................................ 20
OTHER MATTERS........................................................................ 21
</TABLE>
<PAGE>
RAMBUS INC.
--------------
PROXY STATEMENT
FOR
1998 ANNUAL MEETING OF STOCKHOLDERS
--------------
PROCEDURAL MATTERS
GENERAL
This Proxy Statement is being furnished to holders of common stock, par
value $0.001 per share (the "Common Stock"), of Rambus Inc., a Delaware
corporation (the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of the
Company's Stockholders (the "Annual Meeting") to be held on Friday, January 30,
1998 at 9:00 a.m., local time, and at any adjournment or postponement thereof,
for the purpose of considering and acting upon the matters set forth herein and
in the accompanying Notice of Annual Meeting. The Annual Meeting will be held
at the Holiday Inn, 625 El Camino Real, Palo Alto, California 94301. The
telephone number at the Holiday Inn is (650) 328-2800. The Company's
headquarters are located at 2465 Latham Street, Mountain View, California 94040,
and the telephone number at that location is (650) 903-3800.
This Proxy Statement and the accompanying form of proxy are first being
mailed on or about December 30, 1997, together with the Company's 1997 Annual
Report to Stockholders (which includes the Company's 10-K for its 1997 fiscal
year), to all holders of Common Stock entitled to vote at the Annual Meeting.
Stockholders may obtain, for the cost of copying, a copy of any exhibits to the
Company's 10-K by writing to the Secretary of the Company at the Company's
headquarters.
VOTING AT THE ANNUAL MEETING; RECORD DATE
Only holders of record of the Company's Common Stock at the close of
business on December 12, 1997 (the "Record Date") are entitled to notice of and
to vote at the Annual Meeting. Such stockholders are entitled to cast one vote
for each share of Common Stock held as of the Record Date on all matters
properly submitted for the vote of stockholders at the Annual Meeting. As of
the Record Date, there were 22,571,742 shares of the Company's Common Stock
outstanding and entitled to be voted at the Annual Meeting. No shares of
Preferred Stock were outstanding. For information regarding security ownership
by management and by the beneficial owners of more than 5% of the Company's
Common Stock, see "Share Ownership by Principal Stockholders and Management."
QUORUM; REQUIRED VOTE
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum at the Annual Meeting.
Stockholders' votes will be tabulated by persons appointed by the Board of
<PAGE>
Directors to act as inspectors of election for the Annual Meeting. While there
is no definitive statutory or case law authority in Delaware as to the proper
treatment of abstentions in the counting of votes, the Company believes that
abstentions should be counted for purposes of determining both (i) the presence
or absence of a quorum for the transaction of business and (ii) the total number
of shares entitled to vote. In the absence of controlling precedent to the
contrary, the Company intends to treat abstentions in this manner. In a 1988
Delaware case, Berlin v. Emerald Partners, the Delaware Supreme Court held that,
while broker non-votes may be counted for purposes of determining the presence
or absence of a quorum for the transaction of business, broker non-votes should
not be counted for purposes of determining the number of shares entitled to vote
with respect to the particular proposal on which the broker has expressly not
voted. In the election of directors, the three nominees who receive the
greatest number of votes will be elected, and therefore abstentions and broker
non-votes will have no effect on the outcome of the election of directors.
There are no cumulative voting rights in the election of directors.
PROXIES
All shares entitled to vote and represented by properly executed proxies
received prior to the Annual Meeting, and not revoked, will be voted at the
Annual Meeting in accordance with the instructions indicated on those proxies.
If no instructions are indicated on a properly executed proxy, the shares
represented by that proxy will be voted as recommended by the Board of
Directors. If any other matters are properly presented for consideration at the
Annual Meeting, including, among other things, consideration of a motion to
adjourn the Annual Meeting to another time or place (including, without
limitation, for the purpose of soliciting additional proxies), the persons named
in the enclosed proxy and acting thereunder will have discretion to vote on
those matters in accordance with their best judgment. The Company does not
currently anticipate that any other matters will be raised at the Annual
Meeting.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. A proxy may be revoked (i) by filing
with the Secretary of the Company, at or before the taking of the vote at the
Annual Meeting, a written notice of revocation or a duly executed proxy, in
either case later dated than the prior proxy relating to the same shares or (ii)
by attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not of itself revoke a proxy). Any written notice of
revocation or subsequent proxy must be received by the Secretary of the Company
prior to the taking of the vote at the Annual Meeting. Such written notice of
revocation or subsequent proxy should be hand delivered to the Secretary of the
Company or should be sent so as to be delivered to Rambus Inc., 2465 Latham
Street, Mountain View, CA 94040, Attention: Secretary.
EXPENSES OF SOLICITATION
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. The Company may
reimburse brokerage firms, custodians, nominees, fiduciaries and other persons
representing beneficial owners of Common Stock for their reasonable expenses in
forwarding solicitation material to such beneficial owners. Directors, officers
and employees of the Company may also solicit proxies in person or by telephone,
telegram, letter, facsimile or other means of communication. Such directors,
officers and employees will not be additionally compensated, but they may be
reimbursed for reasonable out-of-pocket expenses in connection with such
solicitation. In addition, the Company has retained Corporate Investor
-2-
<PAGE>
Communications, Inc. to assist in the solicitation of proxies at an estimated
fee of $1,500, plus reimbursement of reasonable out-of-pocket expenses.
PROCEDURE FOR SUBMITTING STOCKHOLDER PROPOSALS
Stockholders may present proper proposals for inclusion in the Company's
proxy statement and for consideration at the next annual meeting of its
stockholders by submitting their proposals in writing to the Secretary of the
Company in a timely manner. In order to be included in the Company's proxy
materials for the 1999 annual meeting of stockholders, stockholder proposals
must be received by the Secretary of the Company no later than September 1,
1998, and must otherwise comply with the requirements of Rule 14a-8 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
In addition, the Company's Bylaws establish an advance notice procedure
with regard to certain matters, including stockholder proposals not included in
the Company's proxy statement, to be brought before an annual meeting of
stockholders. For nominations or other business to be properly brought before
the meeting by a stockholder, such stockholder must provide written notice
delivered to the Secretary of the Company 90 days in advance of the annual or
special meeting, which notice must contain specified information concerning the
matters to be brought before such meeting and concerning the stockholder
proposing such matters. In the event that less than 100 days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be received not later than the close
of business on the tenth day following the earlier of the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A copy of the full text of the Bylaw provisions discussed above may
be obtained by writing to the Secretary of the Company. All notices of
proposals by stockholders, whether or not included in the Company's proxy
materials, should be sent to Rambus Inc., 2465 Latham Street, Mountain View, CA
94040, Attention: Secretary.
-3-
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
The Company's Board of Directors is currently comprised of six members who
are divided equally into two classes with overlapping two-year terms. A
director serves in office until his or her respective successor is duly elected
and qualified or until his or her earlier death or resignation. Any additional
directorships resulting from an increase in the number of directors will be
distributed among the two classes so that, as nearly as possible, each class
will consist of an equal number of directors.
NOMINEES FOR CLASS I DIRECTORS
Three Class I directors are to be elected at the Annual Meeting for a two-
year term ending in 2000. The Board of Directors has nominated BRUCE DUNLEVIE,
CHARLES GESCHKE and MARK HOROWITZ for re-election as Class I directors. Unless
otherwise instructed, the persons named in the enclosed proxy intend to vote
proxies received by them for the re-election of Messrs. Dunlevie, Geschke and
Horowitz. The Company expects that each of Messrs. Dunlevie, Geschke and
Horowitz will accept such nomination; however, in the event that Mr. Dunlevie,
Dr. Geschke or Dr. Horowitz is unable or declines to serve as a director at the
time of the Annual Meeting, proxies will be voted for a substitute nominee or
nominees designated by the present Board of Directors. The term of office of
the persons elected as directors will continue until such directors' term
expires in 2000 or until such directors' respective successor has been elected
and qualified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
-4-
<PAGE>
INFORMATION REGARDING NOMINEES AND OTHER DIRECTORS
Set forth below is certain information regarding the nominees for Class I
directors and each other director of the Company whose term of office continues
after the Annual Meeting.
NOMINEES FOR CLASS I DIRECTORS FOR A TERM EXPIRING IN 2000
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- ---- --- --------------------------------------------
<S> <C> <C>
Bruce Dunlevie.... 41 Mr. Dunlevie has served as a director of the Company since its
founding in March 1990. He has been a member of the venture
capital firm Benchmark Capital since April 1996, and a general
partner of the venture capital firm Merrill, Pickard, Anderson &
Eyre since 1989. Mr. Dunlevie also served as Vice President and
General Manager of the Personal Computer Systems Division of
Everex Systems, a personal computer manufacturer. He holds a
B.A. degree in History from Rice University and an M.B.A. from
Stanford University. Mr. Dunlevie also serves as a director of
Geoworks, an operating systems software company, and several
privately held companies.
Charles Geschke... 58 Dr. Geschke has served as a director of the Company since
February 1996. He is a co-founder of Adobe Systems
Incorporated, a software company, and has served as a director of
that company since 1982, Chief Operating Officer from 1986 to
1995, President since 1989 and Chairman since 1997. Prior to
1982, Dr. Geschke held various positions with Xerox's Palo Alto
Research Center, including Manager of the Imaging Sciences
Laboratory. He holds an A.B. degree in Classics and an M.S.
degree in Mathematics from Xavier University of Ohio, and
received his Ph.D. in Computer Science from Carnegie-Mellon
University. Dr. Geschke also serves as a director of a privately
held company.
Mark Horowitz..... 40 Dr. Horowitz has served as a director since co-founding the
Company in March 1990 and as Vice President from March 1990
to May 1994 and currently continues to serve in a part-time
capacity as a member of the technical staff. Dr. Horowitz has
taught at Stanford University since 1984 where he is currently
professor of Electrical Engineering. He holds B.S. and M.S.
degrees in Electrical Engineering from Massachusetts Institute of
Technology and received his Ph.D. in Electrical Engineering from
Stanford University.
</TABLE>
-5-
<PAGE>
INCUMBENT CLASS II DIRECTORS WHOSE TERMS EXPIRE IN 1999
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
- ---- --- --------------------------------------------
<S> <C> <C>
William Davidow...... 62 Dr. Davidow has served as Chairman of the Board of Directors
since the Company was founded in March 1990. Since 1985,
Dr. Davidow has been a general partner of Mohr, Davidow
Ventures, a venture capital firm. From 1973 to 1985, he held a
number of management positions at Intel Corporation, including
Senior Vice President of Marketing and Sales, Vice President of
the Microcomputer Division and Vice President of the
Microcomputer Systems Division. Dr. Davidow holds A.B. and
M.S. degrees in Electrical Engineering from Dartmouth College
and a Ph.D. in Electrical Engineering from Stanford University. He
also serves as a director of Vantive Corporation and Power
Integrations, Inc. and several privately held companies.
P. Michael Farmwald.. 43 Mr. Farmwald has served as a director of the Company since
co-founding the Company in March 1990, and as Vice President
and Chief Scientist from March 1990 to November 1993. He
co-founded Chromatic Research Inc., a privately held developer of
media processors for the PC industry, in November 1993, where
he currently holds the title of Visionary and serves as a director.
From 1988 to 1989, Dr. Farmwald was an associate professor of
Electrical and Computer Engineering at the University of Illinois.
In 1986, he co-founded FTL which merged that year with MIPS.
From 1986 to 1988, Dr. Farmwald was Chief Scientist for High
End Systems at MIPS. Dr. Farmwald holds a B.S. degree in
Mathematics from Purdue University and a Ph.D. in Computer
Science from Stanford University. He also serves as a director of
a privately held company.
Geoff Tate........... 43 Mr. Tate has served as President, Chief Executive Officer and
Director since joining the Company in May 1990. From February
1989 to January 1990, Mr. Tate served as Senior Vice President
and Corporate Officer, Microprocessor and Peripherals with
Advanced Micro Devices, Inc. ("AMD"), a semiconductor
manufacturer. From 1979 to 1989, Mr. Tate served in various
marketing and product line management positions with AMD.
Mr. Tate holds a B.S. degree in Computer Science from the
University of Alberta and an M.B.A. from the Harvard Graduate
School of Business Administration.
</TABLE>
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<PAGE>
BOARD MEETINGS AND COMMITTEES
During fiscal 1997, the Board of Directors held seven meetings (including
regularly scheduled and special meetings), and no incumbent directors attended
fewer than 75% of the total number of meetings of the Board of Directors and the
committees, if any, of which he was a member. Certain matters approved by the
Board of Directors were approved by unanimous written consent.
The Board of Directors currently has three standing committees: an Audit
Committee, a Compensation Committee and a Stock Option Committee. The Company
has no nominating committee or committee performing a similar function. The
Audit Committee and the Compensation Committee currently consist of William
Davidow, Bruce Dunlevie and Charles Geschke. The Stock Option Committee
currently consists of one member, Mr. Tate.
Audit Committee. The Audit Committee, which met one time during 1997, makes
such examinations as are necessary to monitor the corporate financial reporting
and the internal and external audits of the Company, provides to the Board the
results of its examinations and recommendations derived therefrom, outlines to
the Board improvements made, or to be made, in internal accounting controls,
nominates independent auditors, and provides such additional information and
materials as it may deem necessary to make the Board aware of significant
financial matters that require Board attention.
Compensation Committee. The Compensation Committee, which met three times
during 1997, reviews and makes recommendations to the Board of Directors
regarding all forms of compensation to be provided to the executive officers and
directors of the Company, including stock compensation and loans, and all bonus
and stock compensation to all employees. Certain matters were approved by the
Compensation Committee by unanimous written consent.
Stock Option Committee. The Stock Option Committee, which was established in
February 1997, has the authority (subject to limitations, if any, which may be
established by the Company's Board of Directors) to administer the issuance of
stock options under the Company's 1997 Stock Plan (the "Stock Plan"), of up to
25,000 shares per employee per year, other than executive officers.
DIRECTOR COMPENSATION
Board members do not receive any cash fees for their service on the Board
or any Board committee, but they are entitled to reimbursement of all reasonable
out-of-pocket expenses incurred in connection with their attendance at Board and
Board committee meetings. All Board members are eligible to receive stock
options pursuant to the discretionary option grant program in effect under the
Stock Plan. The Stock Plan also provides for an automatic grant of an option to
purchase 10,000 shares of Common Stock (the "First Option") to each non-employee
director who becomes a non-employee director after the effective date of the
Stock Plan provided that an employee director who becomes a non-employee
director is not eligible for the First Option. In addition, each non-employee
director is automatically granted an option to purchase 5,000 shares (a
"Subsequent Option") on October 1 of each year provided he or she is then a non-
employee director and, provided further, that on such date he or she has served
on the Board for at least six months. In February 1997, Dr. Davidow, Mr.
Dunlevie and Dr. Geschke were granted options for the purchase of 10,000 shares,
35,000 shares and 10,000 shares of Common Stock, respectively, at an exercise
price of $8.00 per share. On October 1, 1997,
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<PAGE>
Dr. Davidow, Mr. Dunlevie and Dr. Geschke were each granted a Subsequent Option
to purchase 5,000 shares of Common Stock with an exercise price equal to the
closing price of the Company's Common Stock.
-8-
<PAGE>
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Coopers & Lybrand L.L.P. as
independent auditors of the Company to audit the consolidated financial
statements of the Company for the fiscal year ending September 30, 1998, and has
determined that it would be desirable to request that the stockholders ratify
such appointment.
Coopers & Lybrand L.L.P. has audited the Company's financial statements
since 1991. A representative of Coopers & Lybrand L.L.P. is expected to be
present at the Annual Meeting with the opportunity to make a statement if he or
she desires to do so, and is expected to be available to respond to appropriate
questions.
REQUIRED VOTE
Although stockholder approval is not required for the appointment of
Coopers & Lybrand L.L.P. since the Board of Directors has the responsibility for
selecting auditors, the Board of Directors has conditioned its appointment of
the Company's independent auditors upon the receipt of the affirmative vote of a
majority of the votes duly cast at the Annual Meeting. In the event that the
stockholders do not approve the selection of Coopers & Lybrand L.L.P., the Board
of Directors will reconsider its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
-9-
<PAGE>
SHARE OWNERSHIP BY PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Under the proxy rules of the Securities and Exchange Commission, a person
who directly or indirectly has or shares voting power or investment power with
respect to a security is considered a beneficial owner of the security. Voting
power is the power to vote or direct the voting of shares, and investment power
is the power to dispose of or direct the disposition of shares. Shares as to
which voting power or investment power may be acquired within 60 days are also
considered as beneficially owned under the proxy rules.
The following table sets forth certain information as of December 1, 1997,
regarding beneficial ownership of the Company's Common Stock by (i) each person
who is known to the Company to own beneficially more than five percent of the
Company's Common Stock, (ii) each director and each nominee for election as a
director of the Company, (iii) each executive officer named in the Summary
Compensation Table set forth in this Proxy Statement, and (iv) all current
directors and current executive officers of the Company as a group. The
information on beneficial ownership in the table and the footnotes thereto is
based upon the Company's records and the most recent Schedule 13D or 13G filed
by each such person or entity and information supplied to the Company by such
person or entity. Unless otherwise indicated, each person has sole voting power
and sole investment power with respect to the shares shown.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY SHARES BENEFICIALLY
NAME OR GROUP OF BENEFICIAL OWNERS OWNED (1) OWNED (1)
- ---------------------------------- --------------- --------------------
<S> <C> <C>
Merrill, Pickard, Anderson & Eyre V, L.P. (2)...................... 1,776,516 7.9%
2480 Sand Hill Road, Suite 200
Menlo Park, CA 94025
Mohr, Davidow Ventures II (3)...................................... 1,631,516 7.2
2775 Sand Hill Road, Suite 240
Menlo Park, CA 94025
The Goldman Sachs Group, L.P. (4).................................. 1,270,588 5.6
85 Broad Street, 19th Floor
New York, NY 10004
Geoff Tate (5)..................................................... 1,107,789 4.9
Gary Harmon (6).................................................... 152,885 0.7
David Mooring (7).................................................. 207,973 0.9
Allen Roberts (8).................................................. 374,409 1.6
Subodh Toprani (9)................................................. 185,713 0.8
William Davidow (10)............................................... 1,734,746 7.7
Bruce Dunlevie (11)................................................ 1,846,589 8.2
P. Michael Farmwald................................................ 1,467,734 6.5
Charles Geschke(12)................................................ 66,875 0.3
Mark Horowitz...................................................... 871,529 3.9
All directors and executive officers as a group (12 persons) (13).. 8,175,409 35.6
--------- ----
</TABLE>
- ---------------
(1) Number of shares beneficially owned and percentage of shares beneficially
owned are based on: 22,569,542 shares outstanding as of December 1, 1997.
Unless otherwise indicated below, the persons and entities named in the
table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws where applicable. All
shares subject to options are currently exercisable and are deemed to be
outstanding and to be beneficially owned by the person holding such options
for the purpose of computing the percentage ownership
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<PAGE>
of such person, but are not deemed to be outstanding and to be beneficially
owned for the purpose of computing the percentage ownership of any other
person.
(2) Bruce W. Dunlevie, a director of the Company, is a general partner of MPAE
V Management Co. which is a general partner of Merrill, Pickard, Anderson &
Eyre V, L.P. and is deemed to have voting and investment power with respect
to such shares. See footnote 11 below.
(3) William Davidow, a director of the Company, is a general partner of WHD/LGM
Partners which is a general partner of Mohr, Davidow Ventures II and is
deemed to have voting and investment power with respect to such shares. See
footnote 10 below.
(4) Represents stock owned by certain investment partnerships, of which
affiliates of The Goldman Sachs Group, L.P. ("GS Group") are the general
partner, managing general partner or investment manager. GS Group disclaims
beneficial ownership of the shares owned by such investment partnerships to
the extent attributable to partnership interests therein held by persons
other than GS Group and its affiliates. Each of such investment
partnerships shares voting and investment power with certain of its
respective affiliates. No person affiliated with the Company is affiliated
with GS Group and its affiliates.
(5) Includes 75,000 shares subject to options exercisable within 60 days of
December 1, 1997 of which no shares were vested as of December 1, 1997 and
75,000 shares were unvested and subject to a right of repurchase in favor
of the Company which lapses over time. Also includes 15,000 shares held of
record by Mr. Tate's wife, Colleen Thygesen Tate, as Trustee for their
children. At December 1, 1997, 120,000 shares held by Mr. Tate were subject
to a right of repurchase in favor of the Company which lapses over time.
(6) Includes 30,500 shares subject to options exercisable within 60 days of
December 1, 1997 of which no shares were vested as of December 1, 1997 and
30,500 shares were unvested and subject to a right of repurchase in favor
of the Company which lapses over time. At December 1, 1997, 8,334 shares
held by Mr. Harmon were subject to a right of repurchase in favor of the
Company which lapses over time.
(7) At December 1, 1997, 103,584 shares held by Mr. Mooring were subject to a
right of repurchase in favor of the Company which lapses over time.
(8) Includes 130,500 shares subject to options exercisable within 60 days of
December 1, 1997 of which 9,895 shares were vested as of December 1, 1997
and 120,605 shares were unvested and subject to a right of repurchase in
favor of the Company which lapses over time.
(9) Includes 60,500 shares subject to options exercisable within 60 days of
December 1, 1997 of which 5,000 shares were vested as of December 1, 1997
and 55,500 shares were unvested and subject to a right of repurchase in
favor of the Company which lapses over time.
(10) Includes all shares held by Mohr, Davidow Ventures II. See footnote 3
above. Mr. Davidow, as a general partner of WHD/LGM Partners, is deemed to
have voting and investment power with respect to such Shares. Includes
8,125 shares which were unvested and subject to a right of repurchase in
favor of the Company which lapses over time.
(11) Includes all shares held by entities affiliated with MPAE V Management Co.
See footnote 2 above. Mr. Dunlevie, as a general partner of MPAE V
Management Co., may be deemed to beneficially own such shares, but Mr.
Dunlevie disclaims beneficial ownership of all such shares except to the
extent of his pecuniary interest therein. Also includes (i) 35,000 shares
subject to options exercisable within 60 days of December 1, 1997, of which
26,875 shares were vested as of December 1, 1997 and 8,125 shares were
unvested and subject to a right of repurchase in favor of the Company which
lapses over time and (ii) 8,000 shares held of record by Mr. Dunlevie as
trustee for his children.
(12) Includes 31,875 shares held of record by The Geschke Family Trust Dated
9/25/87, and 25,000 shares subject to options exercisable within 60 days of
December 1, 1997 of which 10,937 shares were vested as of December 1, 1997
and 14,063 shares were unvested and subject to a right of repurchase in
favor of the Company which lapses over time.
(13) Includes 405,667 shares subject to options exercisable within 60 days of
December 1, 1997 of which 57,811 shares were vested as of December 1, 1997
and 347,856 shares were unvested and subject to a right of repurchase in
favor of the Company which lapses over time. At December 1, 1997, 276,502
shares held by such persons were subject to a right of repurchase in favor
of the Company which lapses over time.
-11-
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities ("10% Stockholders"), to
file reports of ownership on a Form 3 and changes in ownership on a Form 4 or a
Form 5 with the SEC and The Nasdaq Stock Market, Inc. Such executive officers,
directors and 10% Stockholders are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no Forms
5 were required for such persons, the Company believes that, during fiscal 1997,
its executive officers, directors and 10% Stockholders complied with all
applicable Section 16(a) filing requirements, except that (i) one late report
was filed for each of James Anderson, Bruce Dunlevie, P. Michael Farmwald,
Steven Merrill and Andrew Rachleff relating to the beneficial ownership of
shares of the Company's Common Stock by such persons through their general
partner interest in MPAE Equity Partners, (ii) one report was filed for Takahiro
Kamo correcting the initial filing for Mr. Kamo, and (iii) one report was filed
for Johnathan Feiber relating to the acquisition of shares of the Company's
Common Stock by the Feiber-Buhr Family Trust u/d/t dated 10/27/97.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised of Dr. Davidow, Mr.
Dunlevie and Dr. Geschke. No interlocking relationship exists between any
member of the Company's Compensation Committee and any member of any other
company's board of directors or compensation committee, nor has any such
interlocking relationship existed in the past. No member of the Compensation
Committee is or was formerly an officer or an employee of the Company.
-12-
<PAGE>
EXECUTIVE OFFICER COMPENSATION
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company and their ages and positions as of
September 30, 1997, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---------------- --- --------------------------------------------------------------
<S> <C> <C>
Geoff Tate 43 President, Chief Executive Officer and Director
Gary Harmon 59 Vice President, Finance, Chief Financial Officer and Secretary
Ed Larsen 45 Vice President, Human Resources
David Mooring 38 Vice President and General Manager, Personal Computer Division
Allen Roberts 41 Vice President and General Manager, Memory and Technology Division
Subodh Toprani 43 Vice President and General Manager, Logic Products Division
Takahiro Kamo 62 Chairman, Rambus K.K.
</TABLE>
The Company's executive officers are appointed by, and serve at the
discretion of, the Board of Directors. There is no family relationship between
any executive officer or director of the Company.
Geoff Tate has served as President, Chief Executive Officer and Director
since joining the Company in May 1990. From February 1989 to January 1990, Mr.
Tate served as Senior Vice President and Corporate Officer, Microprocessor and
Peripherals with Advanced Micro Devices, Inc. ("AMD"), a semiconductor
manufacturer. From 1979 to 1989, Mr. Tate served in various marketing and
product line management positions with AMD. Mr. Tate holds a B.S.. degree in
Computer Science from the University of Alberta and an M.B.A. from the Harvard
Graduate School of Business Administration.
Gary Harmon has served as Vice President, Finance, Chief Financial Officer
and Secretary since joining the Company in March 1993. From November 1992 to
March 1993, Mr. Harmon was an independent consultant. From April 1992 to
November 1992, he served as Senior Vice President, Finance and Chief Financial
Officer for Novellus Systems Inc., a manufacturer of semiconductor equipment.
From October 1991 to March 1992, he served as Executive Vice President, Finance
and Chief Financial Officer of Digital Microwave Inc., a manufacturer of
telecommunications equipment. From 1989 to 1991, Mr. Harmon served as Executive
Vice President, Finance and Chief Financial Officer and was a co-founder of
International Golf Partners, a golf course development company. From 1970 to
1989, Mr. Harmon served in various positions with electronics manufacturer
Avantek, Inc., including Senior Vice President, Finance, Secretary and director.
Mr. Harmon holds a B.S. degree in Electrical Engineering from Stanford
University and an M.B.A. from the Harvard Graduate School of Business
Administration.
Ed Larsen has served as Vice President, Human Resources, since joining the
Company in September 1996. From May 1995 to August 1996, he served as Director,
Human Resources for Cirrus Logic, Inc., a semiconductor manufacturer. From June
1991 to July 1993 and May 1994 to May 1995, Mr. Larsen was an independent
consultant. From July 1993 to April 1994, he served as Director, Human
Resources for Zilog, Inc., a semiconductor manufacturer. Mr. Larsen has also
held various human resources positions with VLSI Technology and Motorola. Mr.
Larsen holds a B.S. degree in Business Administration from the University of
Minnesota.
-13-
<PAGE>
David Mooring joined the Company in February 1991 as Vice President,
Marketing and Sales. He served as Vice President, Business Development from May
1994 to March 1997, when he became Vice President and General Manager of the
Personal Computer Division. From 1989 to 1991, he served as Vice President of
Marketing and Sales at Vitesse Semiconductor, Inc., a semiconductor
manufacturer. From 1980 to 1989, Mr. Mooring held various marketing and sales
positions at Intel Corporation. Mr. Mooring holds a B.S. degree in Economics
from the University of Santa Clara, an M.B.A. from Pepperdine University and an
M.S. degree in Computer Engineering from the University of Southern California.
Allen Roberts joined the Company in February 1991 as Vice President,
Engineering. In March 1997, he became Vice President and General Manager of the
Memory and Technology Division. In 1986, he co-founded FTL which merged that
year with MIPS Computer Systems, Inc. ("MIPS"). He served as Director of High-
End Engineering at MIPS from 1986 until 1991. Mr. Roberts has also held various
engineering positions at E1xsi Inc., Infotek Systems and the Jet Propulsion
Laboratory. Mr. Roberts holds a B.S. degree in Electrical Engineering from
Stanford University.
Subodh Toprani joined the Company in May 1994 as Vice President, Marketing.
In March 1997, he became Vice President and General Manager of the Logic
Products Division. From February 1992 to April 1994, Mr. Toprani served as
Director of Marketing and Systems Engineering with the Personal Computer
Products Division of AMD. From 1982 to 1992, Mr. Toprani served in various
field engineering and marketing positions with AMD. He has also held various
engineering positions with Bally Manufacturing Corp., a manufacturer of gaming
and leisure equipment, and Gaming Devices Inc., a manufacturer of gaming
equipment. Mr. Toprani holds a B.S. degree in Physics from St. Xavier's College
of Bombay and B.S. and M.S. degrees in Electrical Engineering from the Illinois
Institute of Technology.
Takahiro "Tom" Kamo is an independent consultant and has served as Chairman
of the Company's Japanese subsidiary, Rambus K.K., since June 1991. In 1974,
Mr. Kamo established Intel Corporation's Japanese subsidiary, Intel Japan K.K.,
and served as its President and Vice Chairman. In 1988, he was elected Chairman
of Intel Japan K.K. and served in this capacity until his retirement in 1990. In
1963, Mr. Kamo co-founded Tokyo Electron Laboratories ("TEL"), a Japanese
importer/exporter of electronic products. He later founded TEL Engineering, a
subsidiary of TEL involved in the design and manufacturing of semiconductor
production equipment, where he served as President until 1974. Mr. Kamo holds a
B.S. degree in Electrical Engineering from Waseda University in Tokyo.
-14-
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information regarding the
compensation of the Company's Chief Executive Officer and each of the other four
most highly compensated executive officers (collectively, the "Named Executive
Officers") whose annual compensation (salary and bonus) for services rendered in
all capacities to the Company exceeded $100,000 for the fiscal years ended
September 30, 1996 and 1997:
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-----------
ANNUAL COMPENSATION SECURITIES
-------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (1) OPTIONS (#) COMPENSATION (2)
- --------------------------------------- ---- --------- --------- ------------- ----------------
<S> <C> <C> <C> <C> <C>
Geoff Tate............................ 1997 $215,000 $52,039 75,000 $1,920
President and Chief Executive Officer 1996 215,000 32,789 2,656
Gary Harmon........................... 1997 154,425 39,560 10,000 1,630
Vice President, Finance and Chief 1996 154,425 28,189 6,500 1,684
Financial Officer
David Mooring......................... 1997 170,250 58,302 20,000 1,920
Vice President, Business Development 1996 149,705 53,424 11,500 2,047
Allen Roberts......................... 1997 178,266 44,390 20,000 1,918
Vice President, Engineering 1996 178,266 26,235 15,500 2,409
Subodh Toprani........................ 1997 165,000 34,487 10,000 1,920
Vice President, Marketing 1996 165,000 24,721 10,500 2,331
</TABLE>
- ------------
(1) Earned for services during year.
(2) Consists of group term life insurance premiums paid by the Company.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding stock options
granted to each of the Named Executive Officers for the fiscal year ended
September 30, 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
----------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF ASSUMED ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------------
GRANTED FISCAL YEAR (3) PER SHARE (4) DATE 5% 10%
---------- --------------- ------------- ---------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Geoff Tate...... 75,000 5.68% $5.00 11/13/06 $235,835 $597,653
Gary Harmon..... 10,000 0.76 5.00 11/13/06 31,445 79,687
David Mooring... 20,000 1.51 5.00 11/13/06 62,889 159,374
Allen Roberts... 20,000 1.51 5.00 11/13/06 62,889 159,374
Subodh Toprani.. 10,000 0.76 5.00 11/13/06 31,445 79,687
</TABLE>
- ------------
(1) Each of the options listed in the table was granted on November 13, 1996 and
is immediately exercisable. The shares purchasable thereunder are subject
to repurchase by the Company at the original exercise price paid per share
upon the optionee's cessation of service prior to vesting in such shares.
The repurchase right lapses and the optionee vests in the shares subject to,
or issued upon exercise of, the options in monthly installments over the
year beginning January 1, 2000. Mr. Tate's options vest in monthly
installments over two years beginning January 1, 1999.
-15-
<PAGE>
(2) Potential realizable value is based on the assumption that the Common Stock
of the Company appreciates at the annual rate shown (compounded annually)
from the date of grant until the expiration of the ten year term. These
numbers are calculated based on Securities and Exchange Commission
requirements and do not reflect the Company's estimate of future stock price
growth.
(3) The Company granted options to purchase 1,321,600 shares of Common Stock to
all employees during fiscal 1997.
(4) Options were granted at an exercise price equal to the fair market value of
the Company's Common Stock, as determined by the Board of Directors.
AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth for each of the Named Executive Officers the
shares acquired and the value realized on each exercise of stock options during
the year ended September 30, 1997 and the year-end number and value of
exercisable and unexercisable options:
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT 9/30/97 (1) AT 9/30/97 (2)
ACQUIRED VALUE -------------------------- ----------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------- ----------- ---------- ----------- ------------- ----------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Geoff Tate...... 711,289 $4,802,571 -- 75,000 -- $3,796,875
Gary Harmon..... 70,000 402,500 -- 30,500 -- 1,613,063
David Mooring... 196,500 1,148,300 -- -- -- --
Allen Roberts... 225,000 1,412,750 73,698 126,802 $4,063,253 6,834,309
Subodh Toprani.. 20,000 152,000 -- 60,500 -- 3,258,813
</TABLE>
- ---------
(1) Although each option is immediately exercisable for all the option shares,
any shares purchased under the option are subject to repurchase by the
Company, at the exercise price paid per share, in the event the optionee
ceases to provide services to the Company prior to vesting in those shares.
Accordingly, the table reflects such option shares as to which the
repurchase right has lapsed under the "exercisable" column and such option
shares subject to the repurchase right under the "unexercisable" column.
(2) Market value of underlying securities based on the closing price of the
Company's Common Stock on September 30, 1997 (the last trading day of
fiscal 1997) on the Nasdaq National Market of $55.63 minus the exercise
price.
EMPLOYMENT AGREEMENTS
None of the Company's executive officers has employment or severance
agreements with the Company.
-16-
<PAGE>
CERTAIN TRANSACTIONS
Rambus Partners. In September 1992, the Company entered into agreements
to pay certain cash amounts to its founders for certain patent rights and
technology. The total amounts paid to the founders under these agreements were
approximately $244,000 in each of the fiscal years 1997, 1996 and 1995.
Loans to Officers. In February 1997, in connection with the exercise of
options to purchase shares of the Company's Common Stock by Geoff Tate, David
Mooring and Ed Larsen, the Company provided full recourse loans to such
executive officers in the aggregate principal amounts of $160,000, $198,250 and
$200,000, respectively. The loans bear interest at an annual rate of 12.0%, are
evidenced by promissory notes and are secured by a pledge of an aggregate of
400,000, 114,000 and 40,000 shares, respectively. Principal and all accrued
interest on the loans are due in September 1998. Mr. Tate and Mr. Mooring paid
such promissory notes in full in September 1997.
Chromatic Research Inc. In February 1994, the Company licensed its
interface technology to Chromatic Research, Inc. ("Chromatic"), a multimedia
processor design company. Under the terms of the license, Rambus received
626,053 shares of Chromatic Series B Preferred Stock. In December 1997, the
Company received an additional 142,857 shares of Chromatic Series I Preferred
Stock in return for an investment in Chromatic of $1,000,000. As of the Series
I financing, Rambus' ownership interest represented approximately 2.7% of the
outstanding shares of Chromatic. Chromatic was formed in May 1993 by, among
others, Dr. Farmwald who continues to serve as a director of, and consultant to,
Chromatic. Investors in Chromatic include affiliates of Mohr, Davidow Ventures,
Merrill, Pickard, Anderson & Eyre and Kleiner, Perkins, Caufield & Byers. Dr.
Davidow and Mr. Dunlevie also serve on the Board of Directors of Chromatic.
The Company believes that all related-party transactions described above
were on terms no less favorable than could have been otherwise obtained from
unrelated third parties. All future transactions between the Company and its
executive officers, directors and principal stockholders will be approved by a
majority of the independent and disinterested members of the Board of Directors
and will be on terms no less favorable than could be obtained from unrelated
third parties.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors (the "Committee")
consists of directors William Davidow, Bruce Dunlevie and Charles Geschke, none
of whom are employees or officers of the Company. The Committee sets policy and
administers the Company's cash and equity incentive programs for the purpose of
attracting and retaining highly skilled executives who will promote the
Company's business goals and build long-term stockholder value. The Committee is
also responsible for reviewing and making recommendations to the Board of
Directors regarding all forms of compensation to be provided to the executive
officers of the Company, including stock compensation and loans.
-17-
<PAGE>
COMPENSATION PHILOSOPHY AND POLICIES
The policy of the Committee is to attract and retain key personnel through
the payment of competitive base salaries and to encourage and reward performance
through bonuses and stock ownership. The Committee's objectives are to:
. ensure that there is an appropriate relationship between executive
compensation and the creation of stockholder value;
. ensure that the total compensation program will motivate, retain and
attract executives of outstanding abilities; and
. ensure that current cash and equity incentive opportunities are
competitive with comparable companies.
ELEMENTS OF COMPENSATION
Compensation for officers and key employees includes both cash and equity
elements.
Cash compensation consists of base salary, which is determined on the basis
of the level of responsibility, expertise and experience of the employee and
competitive conditions in the industry. In addition, cash bonuses may be
awarded to officers and other key employees.
Ownership of the Company's Common Stock is a key element of executive
compensation. Officers and other employees of the Company are eligible to
participate in the Stock Plan and the 1997 Employee Stock Purchase Plan (the
"Purchase Plan"). The Stock Plan permits the Board of Directors or the Committee
to grant stock options to employees on such terms as the Board or the Committee
may determine. The Committee has authority to grant and administer stock options
to all employees of the Company. In determining the size of a stock option
grant to a new officer or other key employee, the Committee takes into account
equity participation by comparable employees within the company, external
competitive circumstances and other relevant factors. These options typically
vest over 48 months and thus require the employee's continuing services to the
Company. Additional options may be granted to current employees to reward
exceptional performance or to provide additional unvested equity incentives. The
vesting of these additional stock options usually will not begin until previous
option grants have become fully vested. The Purchase Plan permits employees to
acquire Common Stock of the Company through payroll deductions and promotes
broad-based equity participation throughout the Company. The Committee believes
that such stock plans align the interests of the employees with the long-term
interests of the stockholders.
The Company also maintains a 401(k) Plan to provide retirement benefits
through tax deferred salary deductions for all its employees. The Company does
not currently contribute to the 401(k) Plan.
The Committee has considered the potential future effects of Section 162(m)
of the Internal Revenue Code of 1986, as amended. Section 162(m) limits the
deductibility by public companies of certain executive compensation in excess of
$1 million per executive per year, but excludes from the calculation of such $1
million limit certain elements of compensation, including performance-based
-18-
<PAGE>
compensation, provided that certain requirements are met. None of the Company's
executive officers approached the $1 million limit in fiscal 1997 nor is any
expected to approach such limit in fiscal 1998. However, the provisions of
Section 162(m) merit current consideration because, under certain circumstances,
the difference between the fair market value and the exercise price of options
granted in the present time period, measured at the time of exercise, could be
included in the calculation under Section 162(m) of the executive officers'
compensation in the time period in which the exercise occurs. This result can be
avoided if the plans under which such options are granted comply with certain
requirements at the time of grant, including administration by a committee
consisting solely of two or more outside directors and stockholder approval of
the terms of the plan, including approval of an annual limit stated in the plan
on the number of shares with respect to which options may be granted to any
employee. The Company's Stock Plan has been designed and administered to meet
such requirements. The Company has not attempted to structure other elements of
executive compensation to qualify as performance-based compensation for purposes
of Section 162(m).
FISCAL 1997 EXECUTIVE COMPENSATION
The Company's executive compensation philosophy is that base salary and
cash bonuses should reflect the overall financial and non-financial performance
of the Company and that non-cash compensation should be closely aligned with
stockholder interests. No executive officer or other employee of the Company
has an employment or severance agreement with the Company. Executive
compensation for 1997 included base salary and cash bonuses. Cash Bonuses for
executive officers are based on the following measures of the Company's
performance: total revenues, operating income, the market penetration of the
Company's technology and other performance goals. Executive officers, like
other employees, were eligible for option grants under the Stock Plan and to
participate in the Purchase Plan.
FISCAL 1997 CHIEF EXECUTIVE OFFICER COMPENSATION
Geoff Tate joined the Company as President and Chief Executive Officer in
1990. Mr. Tate does not have an employment or severance agreement with the
Company. In setting Mr. Tate's compensation, the Compensation Committee, in
addition to considering the factors for all executive officers described above,
also considers data reflecting comparative compensation information from other
companies. In fiscal 1997, Mr. Tate's compensation was based on the Company's
overall performance in relation to goals set in the beginning of the year. In
addition, in fiscal 1997 the Company granted Mr. Tate options to purchase 75,000
shares of Common Stock. The options, which do not begin to vest until January
1, 1999, are designed to increase Mr. Tate's incentive to remain with the
Company in the future and to closely align Mr. Tate's interests with those of
the Company's stockholders.
COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
William Davidow
Bruce Dunlevie
Charles Geschke
-19-
<PAGE>
COMPANY STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders on
the Company's Common Stock with the cumulative total return of the Nasdaq Stock
Market Index-U.S. ("Nasdaq US") and the Hambrecht & Quist Technology Index ("H&Q
Technology"). The graph assumes that $100 was invested on May 13, 1997 in the
Company's Common Stock, the Nasdaq US Index and the H&Q Technology Index,
including reinvestment of dividends. No dividends have been declared or paid on
the Company's Common Stock. Historic stock price performance is not indicative
of future stock price performance.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
NASDAQ H&Q TECHNOLOGY
DATE RAMBUS US INDEX INDEX
- ---------- ------ -------- --------------
<S> <C> <C> <C>
05/13/97 $100 $100 $100
05/31/97 $263 $105 $106
06/30/97 $388 $108 $107
07/31/97 $460 $120 $124
08/31/97 $663 $120 $124
09/30/97 $464 $127 $129
</TABLE>
-20-
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
at the Annual Meeting. If any additional matters are properly presented at the
Annual Meeting, the persons named in the enclosed proxy will have discretion to
vote shares they represent in accordance with their own judgement on such
matters.
It is important that your shares be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy in the envelope
which has been enclosed.
BY ORDER OF THE BOARD OF DIRECTORS
Mountain View, California
December 30, 1997
-21-
<PAGE>
APPENDIX A
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
RAMBUS INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JANUARY 30, 1998
The undersigned stockholder of Rambus Inc., a Delaware corporation (the
"Company"), hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and accompanying Proxy Statement each dated December 30, 1997 and
hereby appoints Geoff Tate and Gary Harmon, or either of them, proxies and
attorneys-in-fact, each with full power of substitution, to represent the
undersigned at the Annual Meeting of Stockholders of Rambus Inc. to be held on
January 30, 1998 at 9:00 a.m., local time at the Holiday Inn, 625 El Camino
Real, Palo Alto, California 94301, and at any adjournment thereof, and to vote
all shares of Common Stock of the Company held of record by the undersigned on
December 12, 1997 as hereinafter specified upon the proposals listed on the
reverse side.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF STOCKHOLDERS,
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
DETACH HERE
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSALS BELOW
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
EACH OF THESE PROPOSALS.
1. Election of Class I Directors.
NOMINEES: Bruce Dunlevie FOR WITHHELD
Charles Geschke [_] [_]
Mark Horowitz
[_] FOR, except note withheld from the following nominee:
_____________________________________________________
2. Ratification of appointment of FOR AGAINST ABSTAIN
Coopers & Lybrand L.L.P. as [_] [_] [_]
independent auditors of the Company
for the fiscal year ending September
30, 1998.
MARK HERE [_]
FOR ADDRESS
CHANGE AND
NOTE AT RIGHT
Please sign exactly as your name appears hereon. When shares are registered in
the names of two or more persons, whether as joint tenants, as community
property or otherwise, both or all of such persons should sign. When signing as
attorney, executor, administrator, trustee, guardian or another fiduciary
capacity, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized person. If a partnership,
please sign in partnership name by authorized person.
SIGNATURE: _____________________________________________________________________
DATE: __________________________________________________________________________
