<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
</TABLE>
STANDARD MICROSYSTEMS CORPORATION
-------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
</TABLE>
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 18, 2000
------------------------
To the Stockholders of
STANDARD MICROSYSTEMS CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Standard
Microsystems Corporation ("SMSC") will be held on July 18, 2000, at 10:00 A.M.,
at Chase Conference Center, 270 Park Avenue, 11th Floor, New York, New York for
the following purposes:
(1) Elect directors.
(2) Adopt and approve the 2000 Stock Option Plan.
(3) Ratify the selection of Arthur Andersen LLP as independent public
accountants for SMSC for the fiscal year ending February 28, 2001.
(4) Transact such other business as may properly come before the meeting
or any adjournment thereof.
In accordance with the bylaws of SMSC, the board of directors has fixed the
close of business on May 24, 2000 as the record date for the determination of
the stockholders entitled to notice of and to vote at the meeting.
By order of the Board of Directors,
/s/ David C. Fischer
DAVID C. FISCHER
SECRETARY
Dated: June 6, 2000
AFTER READING THE FOLLOWING PROXY STATEMENT, TO VOTE BY INTERNET, PLEASE
ACCESS THE WEB PAGE AT "WWW.VOTEPROXY.COM" AND FOLLOW THE ON-SCREEN
INSTRUCTIONS. HAVE YOUR CONTROL NUMBER, SET FORTH ON THE ENCLOSED PROXY,
AVAILABLE WHEN YOU ACCESS THE WEB PAGE. TO VOTE BY MAIL, PLEASE SIGN AND
MAIL THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
80 ARKAY DRIVE
HAUPPAUGE, NEW YORK 11788
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS, JULY 18, 2000
This statement is furnished in connection with the solicitation of proxies
by the board of directors of Standard Microsystems Corporation, a Delaware
corporation ("SMSC"), for use at the annual meeting of stockholders of SMSC to
be held on July 18, 2000 and at any adjournment thereof. The approximate date on
which this statement and the accompanying proxy are first being mailed to
stockholders is June 6, 2000.
ELECTION OF DIRECTORS
At the annual meeting, two directors are to be elected for terms expiring in
2003.
NOMINEES OF THE BOARD OF DIRECTORS
The persons named in the proxy hereby solicited intend to vote for the
election as directors the two nominees of the board who are named below, unless
otherwise specified in the proxy. Should any nominee become unable to accept
nomination or election (which is not anticipated), the persons designated as
proxies intend to vote for the election of any remaining nominee and for any
substitute nominee as the board may designate.
Set forth below is certain information with respect to each nominee and each
other person whose term as a director will continue after the annual meeting:
<TABLE>
<CAPTION>
OTHER POSITIONS WITH SMSC, PRINCIPAL OCCUPATION, CERTAIN OTHER DIRECTOR
NAME DIRECTORSHIPS AND AGE AS OF MAY 24, 2000 SINCE
---------------------------- -------------------------------------------------------------- ----------
<S> <C> <C>
NOMINEES TO SERVE UNTIL THE 2003 ANNUAL MEETING:
Robert M. Brill............. General Partner, Newlight Associates, L.P., General Partner, 1994
Poly Ventures II, L.P., venture capital investment in high
technology; Director, Level 8 Systems, Inc.; 53
James J. Boyle.............. Chairman and President, Cardinal Resources, Inc., independent 2000
oil and gas producer; Trustee, Alvernia College; Councilor,
American Geographical Society; 60
DIRECTORS CONTINUING TO SERVE UNTIL THE 2002 ANNUAL MEETING:
Steven J. Bilodeau.......... Chairman, President and Chief Executive Officer, SMSC; 41 1999
Peter F. Dicks.............. Corporate Director; Directorships include, among others, 1992; also
Champion Communication Services, Inc., Interactive Investor 1976-1991
International Plc, The East German Investment Trust Plc,
Action Computer Suppliers Holdings Plc; 57
DIRECTORS CONTINUING TO SERVE UNTIL THE 2001 ANNUAL MEETING:
James R. Berrett............ Retired corporate executive; until January 1996, Office of the 1996
Chairman and Chief Operating Executive of NEC Corporation,
manufacturer of computers, telecommunications products, and
semiconductors; 60
Kathleen B. Earley.......... President, AT&T Data and Internet Services, AT&T Corp., 1996
telecommunications services; 48
Ivan T. Frisch.............. Executive Vice President and Provost, Polytechnic University; 1992
62
</TABLE>
<PAGE>
The principal occupation for the last five years of each nominee and
director continuing in office is stated above, except that Mr. Bilodeau was
employed by Robotic Vision Systems Inc. ("RVSI") as President of the
Semiconductor Equipment Group, which supplies inspection equipment to the
semiconductor industry, between 1996 and 1998 and prior thereto was an Executive
Vice President of RVSI.
COMMITTEES AND MEETINGS OF THE BOARD
SMSC's board of directors held eight meetings during the last fiscal year.
Its audit committee held six meetings, its compensation committee held seven
meetings, and its corporate governance committee held one meeting. The members
of the audit committee are Robert M. Brill, Kathleen B. Earley, and Ivan T.
Frisch; the members of the compensation committee are James R. Berrett,
Peter F. Dicks, and Ivan T. Frisch; and the members of the corporate governance
committee are James R. Berrett, Robert M. Brill, and Kathleen B. Earley.
The audit committee reviews the internal controls of SMSC and the
objectivity of its financial reporting. It meets with appropriate SMSC financial
personnel and SMSC's independent public accountants in connection with these
reviews. It recommends to the board the appointment of the firm of independent
public accountants, subject to ratification by the stockholders at the annual
meeting, to serve as auditors for the following year. The compensation committee
makes recommendations to the board with respect to the compensation of SMSC's
officers. Members of the compensation committee also constitute the committees
that administer SMSC's employee stock option plans and restricted stock bonus
plan. Among other responsibilities, the corporate governance committee
recommends criteria and qualifications for nominations for director, identifies
possible candidates, and recommends to the board for nomination those whom the
committee deems best qualified. The corporate governance committee will consider
recommendations for director nominations made by stockholders. Stockholder
recommendations should be in writing and mailed to the Secretary of SMSC.
VOTING SECURITIES OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The management of SMSC has been informed that, as of May 24, 2000, the
persons and groups identified in the table below, including all directors,
nominees and executive officers, owned beneficially, within the meaning of
Securities and Exchange Commission ("SEC") Rule 13d-3, the shares of SMSC common
stock reflected in such table. As of May 24, 2000, each director, nominee or
executive officer of SMSC disclaims beneficial ownership of securities of any
subsidiary of SMSC. Except as otherwise noted, the named beneficial owner claims
sole investment and voting power as to the securities reflected in the table.
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
BENEFICIAL OWNER SHARES(1)
------------------------------------------------------------ ---------
<S> <C>
James R. Berrett............................................ 44,684(2)
Steven J. Bilodeau.......................................... 90,766(3)
Robert M. Brill............................................. 33,700(4)
James J. Boyle.............................................. 167,433(5)
Andrew M. Caggia............................................ 15,000
Peter F. Dicks.............................................. 48,850(6)
Kathleen B. Earley.......................................... 37,184(7)
Ivan T. Frisch.............................................. 39,350(8)
George W. Houseweart........................................ 85,155(9)
Eric M. Nowling............................................. 54,843(10)
All directors and executive officers as a group
(10 persons).............................................. 616,965(11)
Dimensional Fund Advisors Inc.
1299 Ocean Ave.
11th Floor
Santa Monica, CA 90401.................................... 1,013,600(12)
Franklin Resources, Inc., Charles B. Johnson and Rupert H.
Johnson, Jr.
777 Mariners Island Boulevard
San Mateo, CA 94404
and
Franklin Advisory Services, LLC
One Parker Plaza,
Sixteenth Floor
Fort Lee, NJ 07024........................................ 1,180,300(13)
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052-8119................................ 1,542,506(14)
Citigroup Inc.
153 East 53rd Street
New York, NY 10043
and
Salomon Brothers Holding Company Inc., Salomon Smith Barney
Inc., and Salomon Smith Barney Holdings Inc.
388 Greenwich Street
New York, NY 10013........................................ 2,149,757(15)
The TCW Group, Inc. and Robert Day
865 South Figueroa Street
Los Angeles, CA 90017..................................... 796,000(16)
</TABLE>
------------------------
(1) Shares held by each beneficial owner constitute less than 1% of the class,
except for James J. Boyle (1.06%), all directors and executive officers as
a group (3.82%), Dimensional Fund Advisors Inc. (6.40%), Franklin
Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr. and Franklin
Advisory Services, LLC (7.45%), Intel Corporation (9.74%), Citigroup Inc.,
Salomon Brothers Holding Company Inc., Salomon Smith Barney Inc., and
Salomon Smith Barney Holdings Inc. (13.57%), and The TCW Group, Inc. and
Robert Day (5.03%).
(2) Includes 7,500 shares owned by the James R. Berrett Trust, 33,333 shares
covered by currently exercisable options and 3,851 phantom share units
pursuant to SMSC's Plan for Deferred Compensation in Common Stock for
Outside Directors described on page 10 (the "Deferred Compensation Plan").
(3) Includes 70,000 shares covered by currently exercisable options.
(4) Includes 24,999 shares covered by currently exercisable options and 7,701
phantom share units pursuant to the Deferred Compensation Plan.
3
<PAGE>
(5) Includes shares held by various entities of which Mr. Boyle is the sole
owner or beneficiary, and 333 phantom share units pursuant to the Deferred
Compensation Plan.
(6) Includes 24,999 shares covered by currently exercisable options and 3,851
phantom share units pursuant to the Deferred Compensation Plan.
(7) Includes 33,333 shares covered by currently exercisable options and 3,851
phantom share units pursuant to the Deferred Compensation Plan.
(8) Includes 24,999 shares covered by currently exercisable options and 3,851
phantom share units pursuant to the Deferred Compensation Plan.
(9) Includes 4,600 shares owned jointly with spouse, 1,000 shares owned by
spouse, and 19,299 shares covered by currently exercisable options.
(10) Includes 40,408 shares covered by currently exercisable options.
(11) Includes 271,370 shares covered by currently exercisable options and 23,438
phantom share units pursuant to the Deferred Compensation Plan.
(12) Information is furnished in reliance on Schedule 13G dated February 4, 2000
of the named person, filed with the SEC.
(13) Information is furnished in reliance on Amendment No. 2 to Schedule 13G
dated January 31, 2000 of the named persons, filed with the SEC.
(14) Information is furnished in reliance on Amendment No. 1 to Schedule 13D
dated March 22, 2000 of the named person, filed with the SEC.
(15) Voting power and investment power are shared as to all shares. Information
is furnished in reliance on Amendment No. 5 to Schedule 13G dated
February 7, 2000 of the named persons, filed with the SEC.
(16) Voting power and investment power are shared as to all shares. Information
is furnished in reliance on Schedule 13G dated February 11, 2000 of the
named persons, filed with the SEC.
EXECUTIVE COMPENSATION
The following table sets forth all plan and non-plan compensation paid to
the named executive officers for services rendered in all capacities to SMSC and
its subsidiaries during the three years ended February 29, 2000.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------------------------
SHARES OF
ANNUAL COMPENSATION(1) STOCK
------------------------------ RESTRICTED UNDERLYING
FISCAL SALARY BONUS STOCK OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) AWARDS($)(2) GRANTED(#) COMPENSATION($)(3)
----------------------------------- -------- -------- -------- ------------ ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Bilodeau................. 2000 371,000 280,000 -0- 280,000 163,804(5)
Chairman, Chief Executive Officer
and President (4)
Andrew M. Caggia................... 2000 9,615 50,000 -0- 200,000 205,804(7)
Senior Vice President
and Chief Financial
Officer (6)
George W. Houseweart............... 2000 239,700 37,512 12,600 40,000 4,247
Senior Vice President and General 1999 239,700 29,483 -0- 25,000 5,396
Counsel 1998 230,480 36,653 -0- -0- 4,929
Eric M. Nowling.................... 2000 171,600 -0- 15,000 50,000 4,404
Vice President and Controller 1999 171,600 -0- -0- 35,000 4,941
1998 165,000 -0- 22,620 10,000 5,275
Paul Richman....................... 2000 416,000 520,000 -0- -0- 3,600
Retired Chairman and Chief 1999 416,000 520,000 -0- 55,000 5,834
Executive Officer (8) 1998 400,000 500,000 -0- -0- 4,938
Arthur Sidorsky.................... 2000 215,084 88,500 -0- 20,000 2,987
Retired President and Chief 1999 316,300 -0- -0- 45,000 5,622
Operating Officer (9) 1998 296,300 -0- -0- -0- 4,903
</TABLE>
------------------------
(1) Excludes perquisites and other personal benefits aggregating less than the
lesser of $50,000 or 10% of the total salary and bonus reported for the
named person.
(2) Restricted stock awards vest on each of the first and second anniversaries
of the grant date, to the extent of one-quarter of the shares awarded, and
on the third anniversary as to the remaining balance. Holders of restricted
stock awards are entitled to dividends to the same extent as owners of
unrestricted shares. Restricted stock awards of 1,694 and 2,017 shares were
granted to Messrs. Houseweart and Nowling, respectively, in fiscal 2000 and
a restricted stock award of 2,000 shares was granted to Mr. Nowling in
fiscal 1998.
As of February 29, 2000, Mr. Houseweart and Mr. Nowling held restricted stock
with market values of $33,670 and $45,349, respectively. No other named
executive officer held restricted stock as of that date.
(3) Reflects SMSC contributions under SMSC's Incentive Savings and Retirement
Plan.
(4) Mr. Bilodeau became SMSC's President and Chief Executive Officer in March
1999 and SMSC's Chairman in February 2000.
(5) Includes 20,000 shares of SMSC common stock issued to Mr. Bilodeau upon his
joining SMSC, certain relocation expenses, automobile allowance and life
insurance.
(6) Mr. Caggia became SMSC's Senior Vice President and Chief Financial Officer
as of February 15, 2000.
(7) Includes 15,000 shares of SMSC common stock issued to Mr. Caggia on
effectiveness of his employment agreement.
5
<PAGE>
(8) Mr. Richman retired as Chief Executive Officer of SMSC in March 1999 and as
Chairman of SMSC in February 2000.
(9) Mr. Sidorsky retired as President of SMSC in March 1999 and as Chief
Operating Officer in October 1999.
Mr. Bilodeau and SMSC entered into an employment agreement as of March 18,
1999, pursuant to which Mr. Bilodeau will be employed as President and Chief
Executive Officer of SMSC until March 18, 2002. Mr. Bilodeau currently receives
an annual base salary of $410,000.
Mr. Caggia and SMSC entered into an employment agreement as of January 7,
2000, pursuant to which Mr. Caggia will be employed as Senior Vice President and
Chief Financial Officer of SMSC until February 14, 2003. Mr. Caggia's current
annual base salary is $250,000. To the extent the options granted by SMSC to
Mr. Caggia during his employment term do not achieve a potential value before
taxes of at least $463,000 before February 16, 2004, SMSC will pay Mr. Caggia
the shortfall in ten equal quarterly installments.
These employment agreements also provide for:
- automatic extensions for one-year periods after the initial term, unless
either party elects not to extend the term by providing at least six
months prior notice to the other;
- bonuses determined in accordance with SMSC's executive incentive
compensation policy described below;
- early termination by the executive following a change in control of SMSC,
and, in the case of Mr. Bilodeau, if SMSC's stockholders fail to elect him
as a director of SMSC;
- upon termination of Mr. Bilodeau's employment by SMSC other than for
cause, or Mr. Caggia's following a change in control, immediate vesting of
stock options, stock grants and deferred compensation, an amount equal to
one year's base salary, pro-rated bonus for the fiscal year in which the
termination occurs, and paid coverage for life and group health insurance
for 18 months or until the executive sooner obtains full-time employment;
- such benefits as are provided generally to SMSC's senior executive
officers;
- vesting under the below described Executive Retirement Plan of 50% after
five years and pro-ratably over the next five years of the remaining 50%;
and
- customary provisions regarding assignment of inventions, trade secrets,
works of authorship, nondisclosure and noncompetition by the executive.
Pursuant to an employment agreement the other substantive terms of which
have expired, Mr. Richman received percentages of certain SMSC licensing
revenues or revenues from sales of products manufactured or sold by SMSC
pursuant to second-sourcing, technology transfer, or other agreements with SMSC
licensees, in each of fiscal 1998, 1999 and 2000. Such additional compensation
is included in the Summary Compensation Table. Mr. Richman is also entitled to
receive percentages of revenues so long as he acts as a consultant to SMSC on
terms satisfactory to SMSC (or his estate will be entitled to receive lesser
percentages for five years, if Mr. Richman dies while acting as a consultant to
SMSC). Mr. Richman retired as an officer of SMSC but continues to serve as a
consultant to SMSC.
Mr. Sidorsky and SMSC entered into an employment agreement as of March 1,
1996 pursuant to which Mr. Sidorsky was employed until October 31, 1999.
Mr. Sidorsky continues to provide services to SMSC, subject to the terms and
conditions of a part-time employment agreement. Pursuant to the agreement,
Mr. Sidorsky will provide services upon the request of SMSC at specified hourly
and daily rates. The agreement will continue until October 31, 2003 unless
earlier terminated.
6
<PAGE>
Pursuant to an employment agreement the other substantive terms of which
have expired, Mr. Houseweart is entitled to receive specified percentages of
certain SMSC licensing revenues or revenues from sales of products manufactured
and/or sold by SMSC pursuant to certain second-sourcing, technology transfer or
other agreements with SMSC licensees. Such additional compensation for fiscal
1998, 1999 and 2000 is included in the Summary Compensation Table.
For recent fiscal years, SMSC implemented plans to pay certain of its
executives, including executive officers named in the preceding table, incentive
compensation, primarily based on financial performance of SMSC, as determined by
the compensation committee of the board of directors. Part of such incentive
compensation was paid in the form of restricted stock awards, as set forth in
the table. The board of directors has authorized a similar arrangement for
fiscal 2001.
Under SMSC's Executive Retirement Plan, officers, including executive
officers, whose employment terminates, generally after 10 years of continuous
service or by reason of total and permanent disability (or the beneficiary of a
deceased participant), are entitled to receive, for 10 years, in equal monthly
installments, beginning at age 65 or such officer's later retirement date, an
annual benefit equal to 35% of the participant's Base Annual Salary, as defined
in the plan. At age 65, Mr. Richman will become entitled to annual benefits
under the plan in the amount of $127,983 for 10 years. Upon his retirement,
Mr. Sidorsky became entitled to annual benefits under the plan in the amount of
$108,465 for 10 years. As of March 1, 2000, the annual benefit that would be
payable to each of the executive officers named in the table on reaching age 65
is as follows (assuming full vesting in the case of Messrs. Bilodeau and
Caggia): Steven J. Bilodeau, $129,850; Andrew M. Caggia, $87,500; George W.
Houseweart $82,819; Eric M. Nowling, $59,290.
The following table sets forth information regarding individual grants of
stock options to the named executive officers during the 2000 fiscal year.
Options generally become exercisable in four equal annual installments
commencing on the first anniversary of grant and may be exercised cumulatively
at any time before expiration.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
% OF TOTAL AT ASSUMED ANNUAL RATES
NUMBER OF SHARES SUBJECT OF STOCK PRICE
SECURITIES TO OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM
OPTIONS GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------------
EXECUTIVE OFFICER (# OF SHARES) FISCAL YEAR ($ PER SHARE) DATE 5%($) 10%($)
------------------------------ --------------- -------------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Bilodeau............ 280,000 15.63 7.312 3/18/09 1,287,574 3,262,965
Andrew M. Caggia.............. 200,000 11.16 13.687 2/15/10 1,721,536 4,362,711
George W. Houseweart.......... 40,000 2.23 7.375 4/30/09 185,524 470,154
Eric M. Nowling............... 50,000 2.79 7.375 4/30/09 231,905 587,693
Paul Richman (retired)........ -0- -0- -- -- -- --
Arthur Sidorsky (retired)..... 20,000 1.12 7.125 6/10/09 89,617 227,108
</TABLE>
7
<PAGE>
The following table sets forth aggregate information concerning stock option
exercises during fiscal 2000 by each of the named executive officers, together
with the year-end value of unexercised options.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------------------- --------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Steven J. Bilodeau........... -0- -- -0- 280,000 -0- 2,161,320
Andrew M. Caggia............. -0- -- -0- 200,000 -0- 268,800
George W. Houseweart......... 3,818 11,857 15,168 60,449 90,228 425,818
Eric M. Nowling.............. -0- -- 30,086 85,200 169,651 581,289
Paul Richman (retired)....... 116,346 472,285 -0- -0- -0- -0-
Arthur Sidorsky (retired).... 10,616 10,517 25,960 58,653 156,565 391,236
</TABLE>
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the board of directors is composed entirely of
outside directors and is responsible for developing and making recommendations
to the board of directors with respect to compensation of SMSC's officers,
directors and certain other employees, as well as any bonuses for officers.
The committee has developed and implemented compensation programs that seek
to enhance the profitability of SMSC and improve stockholder value by closely
aligning the financial interests of SMSC's senior management team with those of
its stockholders. A significant part of each executive's compensation depends on
appreciation of SMSC's common stock. Each executive's compensation is composed
of two elements: (1) current compensation composed of base salary and cash
bonuses and (2) long-term compensation tied directly to stockholder value,
composed of restricted stock awards and stock options.
Base pay is designed to be competitive with salary levels at similar
industry companies for equivalent positions. From time to time, the committee
utilizes independent consultants or survey information to ensure that executive
salaries are within a competitive range. Each executive is eligible to receive
an annual incentive bonus.
Long-term compensation is tied directly to stockholder return. Under the
current program, executives have typically received stock options that vest over
four years and restricted stock awards that vest over either three or four
years. The purposes of this program are to motivate SMSC's executives to enhance
SMSC's market capitalization and hence, its stockholders' return, and to create
an incentive for the executive to remain with SMSC.
Base salary and additional compensation for certain of the named executive
officers are fixed by employment agreement, as described following the Summary
Compensation Table.
Section 162(m) of the Internal Revenue Code limits to $1,000,000 the amount
of "applicable employee remuneration" deductible by SMSC for "covered" employees
for any taxable year. No policy has been adopted with respect to Section 162(m)
of the Code for executive officers, since their "applicable employee
remuneration" levels are not expected to exceed $1,000,000. It is the
committee's policy to the extent feasible, to keep compensation within the
deductible limits.
By the Compensation Committee: James R. Berrett, Peter F. Dicks, Ivan T. Frisch
8
<PAGE>
PERFORMANCE GRAPH
The following line graph compares cumulative total stockholder return for
SMSC common stock, the Center for Research in Security Prices ("CRSP") Total
Return Index for Nasdaq Stock Market (US Companies) and the CRSP Total Return
Index for Nasdaq Computer Manufacturers Stocks, assuming an investment of $100
in each in February 1995 and the monthly reinvestment of dividends. The
performance shown on the graph is not necessarily indicative of future
performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SMSC NASDAQ MARKET NASDAQ COMPUTER MANUFACTURERS
<S> <C> <C> <C>
2/28/95 $100.00 $100.00 $100.00
2/29/96 $59.00 $139.40 $172.20
2/28/97 $32.10 $166.30 $195.70
2/27/98 $35.80 $227.30 $312.20
2/26/99 $31.10 $296.00 $568.90
2/29/00 $56.70 $602.60 $1,367.00
</TABLE>
Pursuant to SEC rules, the material under the caption Board Compensation
Committee Report on Executive Compensation through and including the line graph
and related explanatory material is not to be deemed either "soliciting
material" or "filed" with the SEC. It is specifically excluded from any material
incorporated by reference in SMSC filings under the Securities Act of 1933 or
Securities Exchange Act of 1934, whether such filings occur before or after the
date of this proxy statement and notwithstanding anything to the contrary set
forth in any such filing.
------------------------
9
<PAGE>
DIRECTOR COMPENSATION
Directors who are not officers of SMSC receive an annual basic retainer of
$25,000, plus $1,200 per meeting attended; committee members receive an
additional annual retainer of $3,500 per committee, plus $800 per committee
meeting attended.
SMSC's Plan for Deferred Compensation in Common Stock for Outside Directors
provides for deferred payment, at the election of the director, of 100%, 50%, or
0% of such director's annual retainer, in shares of SMSC common stock. The
deferred amount is payable in cash or stock, at the election of the director,
when the director ceases to be a director for any reason, or in cash only, upon
the occurrence of a change in control of SMSC.
Under SMSC's 1994 Director Stock Option Plan, options to purchase an
aggregate of 250,000 shares of SMSC common stock were authorized for grant to
directors who are not employees of SMSC or any subsidiary of SMSC. Pursuant to
the plan, each eligible director upon initial election automatically is granted
a vesting option to purchase 25,000 shares. Vesting options become exercisable
to the extent of one-third of the number of shares granted on each of the first
three anniversaries of the date of grant. Each eligible director automatically
is granted an immediately exercisable option to purchase 8,333 shares following
each annual meeting of stockholders, provided that the director shall have been
eligible for the three prior annual meetings. The per share exercise price of
each option equals the fair market value of a share of the common stock on the
date of grant. In general, options are not transferable. Options granted
subsequent to July 14, 1998 will expire ten, and those granted before July 14,
1998 will expire five, years after grant, or, if earlier, three years after the
holder ceases to be a director.
SMSC's Retirement Plan for Directors provides for the payment to each
retired director, for a maximum of 10 years after retirement, of an amount equal
to the director's retainer in effect at his or her retirement, for service on
the board and on each board committee of which he or she was then a member.
Payments for a shorter period are made to the spouse of a director who dies
while in service or within 10 years after his or her retirement.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the sale to Intel Corporation ("Intel") of 1,542,506
shares of SMSC common stock in March 1997 at $9.50 per share, SMSC granted Intel
a three-year warrant covering 1,542,606 shares at $10.45 per share until March
18, 1998, $11.40 per share between March 18, 1998 and March 18, 1999, and $12.35
per share between March 18, 1999 and March 18, 2000. In March 2000, Intel
exercised the warrant in accordance with its net exercise provision. Intel
received 200,284 shares of SMSC common stock upon the exercise, which SMSC
repurchased for $1,928,000. In connection with the March 1997 sale to Intel,
SMSC and Intel entered into an Investors Rights Agreement, pursuant to which
Intel (a) has the right to (1) designate an observer to attend meetings of
SMSC's board of directors or a representative for election to SMSC's board;
(2) require SMSC to register Intel's SMSC common stock for sale pursuant to the
Securities Act of 1933; and (3) buy additional shares of SMSC common stock from
SMSC pursuant to a right of first refusal or to maintain its percentage
ownership of SMSC common stock; and (b) is prohibited from acquiring more than
25% of SMSC's outstanding common stock (subject to certain exceptions). The
agreement gives SMSC a right of first refusal respecting sales by Intel of its
SMSC common stock. In addition, Intel agreed to make SMSC a preferred supplier
of Low Pin Count Specification compliant components. SMSC has agreed to sell I/O
components that SMSC has designed into Intel's motherboard designs to Intel at
prices no higher than SMSC charges any unaffiliated party for comparable
production volumes of the same or substantially the same products. During fiscal
2000, sales to Intel totaled $16.8 million. Such sales were made pursuant to the
above-described agreement in SMSC's ordinary course of business.
In September 1999, SMSC entered into a technology exchange agreement with
Intel which is intended to accelerate SMSC's development of value-added chipset
solutions that support Intel microprocessors in
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personal computer and embedded applications. As part of this agreement, SMSC
gains access to Intel's complete line of current and future memory controllers
and firmware hub devices. SMSC's chipset products will include complete
solutions comprised of Intel's leading performance memory controllers and SMSC's
own value-added I/O controllers, and in some applications, super I/O devices and
Intel firmware hub devices.
Pursuant to the employment agreement between SMSC and its Chairman, Chief
Executive Officer and President, Mr. Bilodeau, SMSC loaned to Mr. Bilodeau
$160,000 in connection with his purchase of a home in the Hauppauge, NY area.
The loan is secured by a second mortgage on the home and bears interest at a
variable rate which was 5.56% at fiscal 2000 year end. The loan is repayable at
the end of five years, with interest payable quarterly.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of copies of reports and written representations
furnished to SMSC by its executive officers and directors, SMSC believes that
all reports required to be filed by its executive officers and directors in the
2000 fiscal year were filed timely.
2000 STOCK OPTION PLAN
SMSC's board of directors has adopted the 2000 Stock Option Plan, subject to
stockholder approval. The board of directors believes that the plan is desirable
to attract and retain executives and other key employees and consultants of
outstanding ability.
The plan is set forth as Exhibit A to this proxy statement, and the
following description is qualified in its entirety by this reference thereto.
Under the plan, options to purchase an aggregate of not more than 1,000,000
shares of common stock may be granted from time to time to salaried employees of
SMSC or any subsidiary of SMSC, including executive officers, or individuals,
excluding nonemployee directors, who are consultants to SMSC. The number of
shares subject to options granted to a single individual during any fiscal year
may not exceed 80,000. Approximately 500 persons, including four executive
officers, are expected to be eligible to participate in the plan.
The plan is to be administered by the 2000 stock option plan committee. The
committee may in general exercise all of the powers of the board in relation to
the plan. The committee is generally empowered to interpret the plan, to
prescribe rules and regulations relating thereto, to determine the terms of the
option agreements, to amend them with the consent of the optionee, to determine
the optionees to whom options are to be granted, and to determine the number of
shares subject to each option granted.
The per share exercise price of each option is established by the 2000 stock
option plan committee and in each instance will not be less than the fair market
value of a share of common stock on the date the option is granted (110% of fair
market value on the date of grant of an ISO (as hereinafter defined) if the
optionee owns stock possessing more than 10% of the total combined voting power
of all classes of stock of SMSC or any of its subsidiaries). Upon exercise of an
option, the optionee may pay the purchase price with cash and, unless the 2000
stock option plan committee shall otherwise determine, securities of SMSC
previously acquired by the optionee.
Options will be exercisable for a term determined by the 2000 stock option
plan committee, which term will not be greater than 10 years from the date of
grant. Unless otherwise provided in an option agreement, generally, an option
will have a ten-year term and become fully exercisable four years after the date
of grant. Prior thereto, each option will become exercisable as to one-quarter
of the number of shares covered thereby cumulatively upon each anniversary of
the date of the grant. Except in the event of certain terminations of employment
or death or permanent and total disability, no option granted to an employee
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may be exercised unless the holder is then an employee of SMSC or a subsidiary.
Any impact on the exercisability of options granted to a consultant of the
termination of the optionee's consultancy relationship with SMSC will be
specified in the option agreement. Options will not be transferable other than
by will or the laws of descent and distribution and may be exercised during the
optionee's lifetime only by the optionee or the optionee's guardian or legal
representative.
Options granted pursuant to the plan may be designated as incentive stock
options ("ISOs"), with the attendant tax benefits provided under Sections 421
and 422 of the Internal Revenue Code of 1986 (the "Code"). Accordingly, the plan
provides that the aggregate fair market value (determined at the time an ISO is
granted) of the common stock subject to ISOs exercisable for the first time by
an employee during any calendar year (under all plans of SMSC and any
subsidiary) may not exceed $100,000.
Shares subject to option may be either authorized but unissued shares or
issued shares reacquired by SMSC. The number of shares subject to each option
and the exercise price of options are subject to adjustment as the board
considers appropriate in the event of changes in the outstanding common stock by
reason of stock dividends, recapitalizations, mergers, and similar events. In
the event of certain basic changes in SMSC, including a change in control of
SMSC, in the discretion of the board, each option shall become fully
exercisable, regardless of whether any installment is then exercisable.
The board of directors may suspend, terminate, modify or amend the plan,
provided, however, that (except for adjustments by reason of stock dividends,
recapitalizations, mergers, and similar events) any increase in the aggregate
number of shares issuable upon the exercise of options, any reduction in the
purchase price of the common stock covered by any option, any extension of the
period during which options may be granted, any increase in the maximum term of
options, and any material modification in the requirements as to eligibility for
participation in the plan shall be subject to the approval of stockholders. No
suspension, termination, modification or amendment of the plan may, without the
consent of the optionee, adversely affect the optionee's rights under an option
theretofore granted.
No option may be granted under the plan after April 2, 2010.
On May 24, 2000, the closing sale price reported on the Nasdaq National
Market for SMSC common stock was $12.00 per share.
TAX CONSEQUENCES
SMSC has been advised as follows regarding the federal income tax
consequences with respect to the grant and exercise of stock options and the
payment in stock of the exercise price of options under the plan.
Optionees will not be taxed upon the grant of an option. At the time of
exercise of an option other than an ISO, the optionee generally will realize
ordinary income equal to the excess of the fair market value of the shares over
the option price, SMSC will be entitled to a deduction in the same amount
(provided applicable reporting requirements are met), and the shares so acquired
will have a basis to the optionee equal to their fair market value. Upon the
sale of a share so acquired, any gain or loss will result in a capital gain or
loss measured by the difference between the optionee's basis and the amount
realized on such sale, provided the share is a capital asset in the hands of the
holder.
At the time of exercise of an ISO, the optionee will realize no income and
SMSC will not be entitled to any deduction. However, the optionee generally will
have an item of adjustment, for purposes of calculating alternative minimum
taxable income, equal to the excess of the fair market value of the shares at
such time over the option price. Upon the sale of a share acquired pursuant to
the exercise of an ISO, any gain or loss will result in a capital gain or
capital loss (measured by the difference between the amount realized on such
sale and the exercise price), provided the share sold is a capital asset in the
hands of the holder. However, if at the time of sale or other disposition of
such share, the optionee has held the share for less than one year, or less than
two years have elapsed since the grant of the ISO (a "premature
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disposition"), a portion (or all) of any gain will be taxed at ordinary income
rates at the time of the disposition in an amount equal to the excess of the
fair market value of the shares on the date of exercise (or, if less, the amount
realized upon disposition) over the option price, and SMSC will be entitled to a
deduction in the same amount.
If an optionee uses previously acquired shares of common stock to pay the
exercise price of an option, the optionee will not ordinarily recognize any
taxable income to the extent that the number of new shares of common stock
received upon exercise of the option does not exceed the number of previously
acquired shares so used. If non-recognition treatment applies to the payment for
option shares with previously acquired shares, the tax basis of the option
shares received without recognition of taxable income is the same as the basis
of the shares surrendered as payment. If a greater number of shares of common
stock is received upon exercise than the number of shares surrendered in payment
of the option price, if an ISO is being exercised, such excess shares will have
a zero basis in the hands of the optionee; if an option other than an ISO is
being exercised, the optionee will be required to include in gross income (and
SMSC will be entitled to deduct) an amount equal to the fair market value of the
additional shares on the date the option is exercised less any cash paid for the
shares, and the excess shares will have a basis equal to the fair market value
of such shares on the exercise date.
Moreover, if stock previously acquired by exercise of an ISO is transferred
in connection with the exercise of an ISO, and if, at the time of such transfer,
the stock so transferred has not been held for the holding period required in
order to receive favorable treatment under the rules governing ISOs, then such
transfer will be treated as a premature disposition. Accordingly, with respect
to the shares so transferred, an optionee will recognize ordinary income under
the rules governing a premature disposition discussed earlier in this section.
Nonetheless, the shares acquired upon exercise can still qualify for ISO
treatment, if all of the other ISO requirements are fulfilled.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE 2000 STOCK
OPTION PLAN.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to ratification by the stockholders, the board of directors has
selected Arthur Andersen LLP as independent public accountants for SMSC for the
fiscal year ending February 28, 2001. Arthur Andersen was the independent public
accountant for SMSC for its fiscal year ended February 29, 2000. A
representative of Arthur Andersen 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.
If the selection of Arthur Andersen is not ratified, or if prior to the next
annual meeting of stockholders such firm shall decline to act or otherwise
become incapable of acting, or if its engagement shall be otherwise discontinued
by the board of directors, the board of directors will appoint other independent
auditors whose selection for any period subsequent to the next annual meeting
will be subject to stockholder ratification at such meeting.
VOTING PROCEDURES
Every stockholder of SMSC is entitled to cast, in person or by proxy, one
vote for each share of SMSC common stock held at the close of business on May
24, 2000, the record date for the annual meeting. At that date, SMSC had
outstanding 15,838,967 shares. The proxy hereby solicited is revocable at any
time prior to its exercise and may be revoked in any manner permitted by law.
The election of directors is decided by a plurality of the votes cast. A
majority of the votes cast is required to approve each other matter to be acted
on at the meeting. Abstentions and broker non-votes have no effect on the
proposals being acted upon.
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The proxies named in the enclosed form of proxy or their substitutes will
vote the shares represented by the enclosed form of proxy, if the proxy appears
to be valid on its face, and, where a choice is specified on the form of proxy,
the shares will be voted in accordance with the specification so made.
GENERAL
The cost of preparing, assembling and mailing the proxy statement and
related material will be borne by SMSC. In addition to soliciting proxies by
mail, SMSC may make requests for proxies by telephone, facsimile transmission or
messenger or by personal solicitation by officers, directors, or employees of
SMSC, at nominal cost to SMSC, or by any one or more of the foregoing means.
Georgeson & Company has been retained by SMSC to assist in the solicitation of
proxies, for fees anticipated to aggregate approximately $4,500, plus reasonable
out-of-pocket expenses. SMSC will reimburse brokerage firms and other nominees
in accordance with the New York Stock Exchange schedule of charges for the cost
of forwarding proxy material to beneficial owners of SMSC common stock.
STOCKHOLDER PROPOSALS AND OTHER MATTERS
Stockholder proposals intended for inclusion in the proxy statement for the
next annual meeting must be received by SMSC by February 1, 2001 and should be
sent to the Vice President and Controller, Standard Microsystems Corporation, 80
Arkay Drive, P.O. Box 18047, Hauppauge, New York 11788. The persons named on the
form of proxy to be sent in connection with the solicitation of proxies on
behalf of SMSC's board of directors for the next annual meeting will vote in
their own discretion on any matter as to which SMSC shall not have received
notice by April 25, 2001.
By order of the Board of Directors,
/s/ David C. Fischer
Dated: June 6, 2000
DAVID C. FISCHER
SECRETARY
YOUR PROXY IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. PLEASE VOTE BY
INTERNET OR MAIL TODAY.
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EXHIBIT A
2000 STOCK OPTION PLAN
OF
STANDARD MICROSYSTEMS CORPORATION
1. PURPOSE OF THE PLAN
The purpose of this Plan is to provide a method whereby present and future
officers and key employees of, and individuals, excluding non-employee
directors, who are consultants to, Standard Microsystems Corporation, a Delaware
corporation (the "Company"), who are responsible for the management, growth and
promotion of the business and who are making and can continue to make
substantial contributions to the success of the business, may be encouraged to
acquire capital stock ownership in the Company, thus increasing their
proprietary interest in the business, providing them with greater incentive,
encouraging their continuance in the service of the Company and promoting the
interests of the Company and all its stockholders. Accordingly, the Company
will, from time to time, on or before April 2, 2010, grant to such employees and
consultants as may be selected in the manner hereinafter provided, options to
purchase shares of Common Stock, $.10 par value, of the Company ("Common Stock")
subject to the conditions hereinafter provided.
2. ADMINISTRATION OF THE PLAN
(a) This Plan will be administered by a Stock Option Committee (the
"Committee") consisting of not fewer than two directors of the Company, who
shall be appointed and serve at the pleasure of the Board of Directors (the
"Board"). All members of the Committee shall be both "Non-Employee Directors"
within the meaning of paragraph (b)(3)(i) of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 (the "Exchange Act") and "outside directors"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code") and Treasury Regulations promulgated thereunder. The
Committee shall have and may exercise all of the powers of the Board under the
Plan, other than the power to appoint a director to committee membership. A
majority of the Committee shall constitute a quorum, and acts of the majority of
members present at any meeting at which a quorum is present shall be deemed the
acts of the Committee. The Committee may also act by instrument signed by all
members of the Committee.
(b) The Committee shall have plenary authority in its discretion, subject to
and consistent with the express provisions of the Plan, to direct the grants of
options; to determine the numbers of shares and purchase price of the Common
Stock covered by each option, the individuals to whom and the time or times at
which, options shall be granted and may be exercised; to prescribe, amend and
rescind rules and regulations relating to the Plan, including, without
limitation, such rules and regulations as it shall deem advisable so that
transactions involving options may qualify for exemption under such rules and
regulations as the Securities and Exchange Commission may promulgate from time
to time exempting transactions from Section 16(b) of the Exchange Act; to
determine the terms and provisions of, and to cause the Company to enter into,
agreements with optionees in connection with options granted under the Plan
("Agreements"), which Agreements may vary from one another, as the Committee
shall deem appropriate; to amend any such Agreement from time to time, with the
consent of the optionee; and to make all other determinations the Committee may
deem necessary or advisable for the administration of the Plan.
(c) Each option granted under this Plan shall be deemed to have been granted
when the determination of the Committee with respect to such option is made.
Once an option has been granted, all conditions and requirements of this Plan
with respect to such option shall be deemed to be conditions upon the exercise
of the option but not upon the grant thereof.
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(d) Every action, decision, interpretation or determination by the Committee
or the Board with respect to the application or administration of this Plan
shall be final and binding upon the Company and each person holding or claiming
any right or interest pursuant to any option granted under this Plan.
3. STOCK SUBJECT TO THIS PLAN
(a) The shares to be issued upon exercise of options granted under this Plan
shall be made available, at the discretion of the Board, either from the
authorized but unissued shares of Common Stock or from shares of Common Stock
reacquired by the Company, including shares purchased in the open market. The
aggregate number of shares of Common Stock for which options may be granted
under this Plan shall not exceed 1,000,000. The maximum number of shares that
may be subject to options granted to any one individual within one fiscal year
shall be 80,000. Such aggregate numbers shall be subject to adjustment as
provided in paragraph 12. If any option granted under this Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares shall (unless this Plan shall have been terminated) become available for
option to other individuals.
(b) In the discretion of the Board, but subject to the provisions of the
Plan and Section 422 of the Code, options granted to employees may, at the time
of grant, be designated as incentive stock options ("ISOs") with the attendant
tax benefits provided under Sections 421 and 422 of the Code. The aggregate fair
market value (determined at the time an ISO is granted) of the Common Stock
covered by ISOs exercisable for the first time by an employee during any
calendar year (under all plans of the Company), may not exceed $100,000.
4. ELIGIBILITY OF OPTIONEES
(a) Options may be granted only to salaried employees (including officers)
of, and individuals who are consultants to, the Company. In its determination of
any individual to whom an option shall be granted and the number of shares to be
covered by such option, the Committee shall take into account the duties of the
individual, the present and potential contributions of the individual to the
success of the Company, the number of years of service remaining before the
anticipated retirement of the individual, and other factors deemed relevant by
the Committee in connection with accomplishing the purpose of this Plan.
(b) An individual who has been granted an option under this Plan or
otherwise may, if the Committee shall so determine, be granted one or more
additional options.
5. OPTION PRICE
(a) The purchase price per share of Common Stock under each option shall be
established by the Committee, but shall not be less than the fair market value
(as hereinafter defined) of a share of Common Stock on the date such option is
granted.
(b) In the case of an individual who at the time the option is granted owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company, the purchase price of the Common Stock covered by any
ISO shall in no event be less than 110% of the fair market value of the Common
Stock on the date such ISO is granted.
6. NONTRANSFERABILITY OF OPTION
No option granted under this Plan shall be transferable by the grantee,
either voluntarily or by operation of law, otherwise than by last will and
testament or by laws of descent and distribution, and such option shall be
exercised during the lifetime of the grantee, only by the grantee, or by his or
her guardian or legal representative.
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7. EXERCISE OF OPTION
(a) Each option granted under this Plan shall by its terms expire not later
than ten years from the date on which it was granted.
(b) Unless the Committee shall fix a different schedule at the time a
particular option is granted, each option granted under this Plan shall become
exercisable, to the extent of one-quarter of the aggregate number of shares
optioned thereby, one year after the date of grant and, cumulatively, to the
extent of an additional one-quarter, at the expiration of each year thereafter,
so that, four years after the date of grant, each option shall be fully
exercisable, subject to the provisions set forth elsewhere in the Plan.
Notwithstanding the foregoing, the Committee may declare any outstanding option
immediately and fully exercisable (but in no event prior to the first
anniversary of the date of grant).
(c) A person electing to exercise an option shall give written notice to the
Company of such election and of the number of shares he or she has elected to
purchase; provided that no option may be exercised as to fewer than 100 shares
unless it is then exercised as to all of the shares then purchasable thereunder.
Such notice shall be accompanied by payment to the Company of the full purchase
price in cash; provided that, unless otherwise determined by the Committee, the
purchase price may be paid in whole or in part, by surrender or delivery to the
Company of Common Stock of the Company having a fair market value on the date of
exercise equal to the portion of the purchase price being so paid. In addition,
an employee shall, upon notification of the amount due and prior to or
concurrently with delivery to the employee of a certificate representing such
shares, pay, in cash, any amount necessary to satisfy federal, state and local
tax requirements.
(d) No person shall have the rights of a stockholder with respect to shares
covered by an option until such person becomes the holder of record of such
shares.
(e) Except as provided in paragraph 8 or paragraph 9, no option granted to
an employee may be exercised, unless, at the time of exercise, the optionee is
an employee of the Company. Options granted under the Plan to an employee shall
not be affected by any change of duties or position so long as the optionee
continues to be an employee of the Company.
(f) Notwithstanding any other provision of this Plan, the Company shall not
be required to issue or deliver any share of stock upon the exercise of an
option prior to (a) the admission of such share to listing on any stock exchange
or automated quotation system on which the Company's Common Stock may then be
listed and (b) the completion of such registration or other qualification of
such share under any state or federal law, rule or regulation as the Company
shall determine to be necessary or advisable.
8. TERMINATION OF RELATIONSHIP TO THE COMPANY
(a) In the case of an option granted to an employee of the Company, if the
optionee shall cease to be an employee of the Company, other than by reason of
death or permanent and total disability, any option held by such optionee may be
exercised (to the extent that the optionee was entitled to exercise such option
at the termination of such employment) at any time within three months after
such termination, but not later than the expiration date of such option;
provided, however, that any option held by an employee whose employment shall be
terminated by the Company for cause shall, to the extent not theretofore
exercised, forthwith terminate.
(b) Notwithstanding the provisions of paragraph 7 specifying the
installments in which an option shall be exercisable, in the case of an option
granted to an employee of the Company, upon an optionee's actual retirement at
age 65 or thereafter, the option shall be exercisable (within the time periods
set forth in paragraph 8(a)) as to all shares of Common Stock remaining subject
to the option.
(c) Any Agreement may contain such provisions as the Board shall approve
with reference to the determination of the date employment terminates for
purposes of the Plan (which provisions may allow
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periods of consultancy to be treated as periods of employment) and the effect of
leaves of absence, which provisions may vary from one another.
(d) In the case of an option granted to an individual who is a consultant
to, and not an employee of the Company, the option agreement shall specify the
impact, if any, which a termination of the optionee's consultancy relationship
with the Company shall have on the exercisability of the option.
(e) Nothing in the Plan or in any Agreement shall confer upon any employee
or consultant any right to continue in the employ or consultancy of the Company
or affect the right of the Company to terminate such employment or consultancy
relationship at any time for any reason, or for no reason.
9. DEATH OR DISABILITY OF OPTIONEE
Notwithstanding the provisions of paragraph 7 specifying installments in
which an option shall be exercisable, if an optionee shall die or become
permanently and totally disabled within the meaning of Section 22(e)(3) of the
Code, while he or she is employed by the Company or within three months after
the termination of his or her employment (other than termination by the Company
for cause or voluntarily on the part of the optionee and without the consent of
the Company), such option may be exercised, as to all shares of Common Stock
remaining subject to the option, within the later to occur of (a) three months
after the termination of the optionee's employment or (b) thirty days after the
appointment of a legal representative or guardian, but in no case more than one
year after termination of employment and in no case after the original
expiration date of the option.
10. AMENDMENTS TO THE PLAN
The Board may at any time terminate or from time to time modify, amend or
suspend this Plan, including any amendment for the purpose of complying with or
securing the benefit of any change in the Exchange Act or the Code or any
regulation adopted under either; provided that no such modification without the
approval of stockholders shall increase the aggregate number of shares reserved
for issuance upon the exercise of options, permit the granting of options at an
option price less than 100% of the fair market value of the Common Stock at the
date of the grant, reduce the price of outstanding options (except pursuant to
paragraph 12), extend the period during which options may be exercised or
granted, or otherwise materially increase the benefits accruing to optionees
under this Plan or materially modify the requirements as to eligibility of
optionees under this Plan, except that any increase, reduction or change that
may result from any adjustment authorized by paragraph 12 or any modification
based on any revision to the Code or any regulation promulgated thereunder (to
the extent permitted by the Code or the Internal Revenue Service) shall not
require such approval. No suspension, termination, modification or amendment of
the Plan may, without the consent of the individual to whom an option shall
theretofore have been granted, adversely affect the rights of such individual
under such option.
11. GRANTING OF OPTIONS
(a) The grant of any option pursuant to the Plan shall be entirely in the
discretion of the Committee, and nothing in the Plan shall be construed to
confer on any officer, employee or consultant any right to receive any option
under the Plan.
(b) The grant of an option pursuant to the Plan shall not constitute an
agreement or an understanding, express or implied, to employ the optionee for
any specified period.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
(a) The Board may at any time make such provision as it shall consider
appropriate for the adjustment of the number and class of shares covered by each
option, the exercise price and the number of shares as to which such option
shall be exercisable, in the event of changes in the outstanding Common
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Stock of the Company by reason of any stock dividend, split-up, reorganization,
liquidation, and the like. In the event of any such change in the outstanding
Common Stock of the Company, the aggregate number of shares as to which options
may be granted under the Plan shall be appropriately adjusted by the Board,
whose determination shall be conclusive. No adjustment shall be made in the
requirements set forth in paragraph 7 with respect to the minimum number of
shares that must be purchased upon any exercise.
(b) In the event (i) of a dissolution, liquidation, merger or consolidation
of the Company or (ii) of a sale of all or substantially all of the assets of
the Company or the sale of substantially all of the assets or stock of a
subsidiary of which the optionee is then an employee, or (iii) a change in
control (as hereinafter defined) of the Company has occurred or is about to
occur, then, the Board may determine that each option under the Plan, if such
event shall occur with respect to the Company, or each option granted to an
employee or consultant of such subsidiary, shall become immediately and fully
exercisable.
13. EFFECTIVE DATE OF THE PLAN
Options may be granted under the Plan, subject to its authorization and
adoption by the stockholders of the Company, at any time or from time to time
after its adoption by the Board, but no option shall be exercised under this
Plan until this Plan shall have been authorized and adopted at a meeting of
stockholders of the Company. If so adopted by stockholders, this Plan shall
become effective as of April 3, 2000, the date of its adoption by the Board of
Directors.
14. SEVERABILITY
In the event that any one or more provisions of the Plan or any Agreement,
or any action taken pursuant to the Plan or such Agreement, should, for any
reason, be unenforceable or invalid in any respect under the laws of the United
States, any state of the United States or any other government, such
unenforceability or invalidity shall not affect any other provision of the Plan
or of such or any other Agreement, but in such particular jurisdiction and
instance the Plan and the affected Agreement shall be construed as if such
unenforceable or invalid provision had not been contained therein or as if the
action in question had not been taken thereunder.
15. EFFECT ON PRIOR OPTION PLANS
The adoption of the 2000 Plan shall have no effect on outstanding options
granted by the Company under any other option plan.
16. CERTAIN DEFINITIONS
(a) The terms "parent" and "subsidiary" shall have the meanings
respectively, of "parent corporation" and "subsidiary corporation" as set forth
in Sections 424(e) and (f) of the Code, respectively.
(b) The term "fair market value" of a share of Common Stock shall mean, as
of the date on which such fair market value is to be determined, the closing
price (or the average of the latest bid and asked prices) of a share of Common
Stock as reported in The Wall Street Journal (or a publication or reporting
service deemed equivalent to The Wall Street Journal for such purpose by the
Board or the Committee) for the over-the-counter market or any national
securities exchanges and other securities markets which at the time are included
in the stock price quotations of such publication. In the event that the Board
or the Committee shall determine such stock price quotation is not
representative of fair market value, the Board or the Committee may determine
fair market value in such a manner as it shall deem appropriate under the
circumstances.
(c) The term "termination of employment for cause" or words to like effect
shall mean termination by the Company of the employment of the optionee by
reason of the optionee's (i) willful refusal to perform his or her obligations
to the Company, (ii) willful misconduct, contrary to the interests of the
A-5
<PAGE>
Company, or (iii) commission of a serious criminal act, whether denominated a
felony, misdemeanor or otherwise. In the event of any dispute whether a
termination for cause has occurred, the Board may by resolution resolve such
dispute and such resolution shall be final and conclusive on all parties.
(d) The term "Company" shall include any parent or subsidiary of the
Company.
(e) The term "change in control" shall mean an event or series of events
that would be required to be described as a change in control of the Company in
a proxy or information statement distributed by the Company pursuant to Schedule
14A or Schedule 14C promulgated under the Exchange Act. The determination
whether and when a change in control has occurred or is about to occur shall be
made by vote of a majority of the Non-Employee Directors who shall have
constituted the Board immediately prior to the occurrence of the event or series
of events constituting such change in control.
A-6
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
STANDARD MICROSYSTEMS CORPORATION
JULY 18, 2000
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To Vote By Mail, Please Detach and Mail in the Envelope Provided
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<S> <C>
A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR WITHHOLD
ALL NOMINEES AUTHORITY THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
(except as marked to to vote for all
the contrary) nominees listed
FOR ABSTAIN AGAINST
1. ELECTION 2. ADOPTION AND APPROVAL OF THE 2000
OF / / / / STOCK OPTION PLAN. / / / / / /
DIRECTORS
NOMINEES: Robert M. Brill, James J. Boyle 3. SELECTION OF ARTHUR ANDERSEN LLP
INSTRUCTION: To withhold authority to vote for any AS INDEPENDENT PUBLIC ACCOUNTANTS. / / / / / /
individual nominee, write that nominee's name in the
space provided below.
____________________________________________________
This proxy is solicited on behalf of the Board of Directors.
Unless otherwise properly marked, this proxy will be voted FOR
Proposals 1, 2 and 3, as recommended by the Board of Directors.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY.
Signature_______________________________________________Signature______________________________________________date___________, 2000
NOTE: (Please sign exactly as your name appears hereon. If the named holder is a corporation, partnership or other association,
please sign its name and add your own name and title. When signing as attorney, executor, administrator, trustee or guardian, please
also give your full title. If shares are held jointly, EACH holder should sign.)
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<PAGE>
STANDARD MICROSYSTEMS CORPORATION
PROXY - ANNUAL MEETING OF STOCKHOLDERS - JULY 18, 2000
STEVEN J. BILODEAU and GEORGE W. HOUSEWEART, and each of them, each
with full power of substitution, hereby are authorized to vote, by a
majority of those or their substitutes present and acting at the meeting
or, if only one shall be present and acting, then that one, all of the
shares of Standard Microsystems Corporation that the undersigned would be
entitled, if personally present, to vote at the 2000 annual meeting of
stockholders, and at any adjournment thereof, upon such business as may
properly come before the meeting, including the items set forth on the
reverse side hereof and in the notice of annual meeting.
PLEASE DATE AND SIGN THIS PROXY ON THE REVERSE SIDE, AND MAIL IT IN THE
ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
(CONTINUED AND TO BE DATED AND SIGNED ON OTHER SIDE)
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
JULY 18, 2000
PROXY VOTING INSTRUCTIONS
Your Internet vote authorizes the named proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card. Standard
Microsystems Corporation encourages you to use this cost-effective and
convenient way to vote.
TO VOTE BY MAIL
Please date, sign and mail your proxy card in the envelope provided as soon
as possible.
TO VOTE BY INTERNET
Please access the web page at "www.voteproxy.com" and follow the on-screen
instructions. Have your control number available when you access the web
page.
YOUR CONTROL NUMBER IS | |
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To Vote By Mail, Please Detach and Mail in the Envelope Provided
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<S> <C>
A /X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR WITHHOLD
ALL NOMINEES AUTHORITY THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
(except as marked to to vote for all
the contrary) nominees listed
FOR ABSTAIN AGAINST
1. ELECTION 2. ADOPTION AND APPROVAL OF THE 2000
OF / / / / STOCK OPTION PLAN. / / / / / /
DIRECTORS
NOMINEES: Robert M. Brill, James J. Boyle 3. SELECTION OF ARTHUR ANDERSEN LLP
INSTRUCTION: To withhold authority to vote for any AS INDEPENDENT PUBLIC ACCOUNTANTS. / / / / / /
individual nominee, write that nominee's name in the
space provided below.
____________________________________________________
This proxy is solicited on behalf of the Board of Directors.
Unless otherwise properly marked, this proxy will be voted FOR
Proposals 1, 2 and 3, as recommended by the Board of Directors.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY.
Signature_______________________________________________Signature______________________________________________date___________, 2000
NOTE: (Please sign exactly as your name appears hereon. If the named holder is a corporation, partnership or other association,
please sign its name and add your own name and title. When signing as attorney, executor, administrator, trustee or guardian, please
also give your full title. If shares are held jointly, EACH holder should sign.)
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