UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Section 240.14a-11(c) or Section 240.14a-12
TRIQUINT SEMICONDUCTOR, INC.
(Name of Registrant as Specified In Its Charter)
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:
TRIQUINT SEMICONDUCTOR, INC.
2300 N.E. BROOKWOOD PARKWAY
HILLSBORO, OREGON 97124
April 11, 1997
Dear Stockholders:
Our Annual Meeting of Stockholders will be held on Thursday, May 29, 1997, at
2:00 p.m., local time, at the Company's principal executive offices, located at
2300 N.E. Brookwood Parkway, Hillsboro, Oregon 97124. You are invited to
attend this meeting to give us an opportunity to meet you personally, to allow
us to introduce to you the key management and Directors of your Company and to
answer any questions you may have.
The formal Notice of Meeting, the Proxy Statement, the proxy card and a copy of
the Annual Report to Stockholders for the year ended December 31, 1996 are
enclosed.
I hope that you will be able to attend the meeting in person. Whether or not
you plan to attend the meeting, please sign and return the enclosed proxy card
promptly. A prepaid return envelope is provided for this purpose. Your shares
will be voted at the meeting in accordance with your proxy.
If you have shares in more than one name, or if your stock is registered in more
than one way, you may receive multiple copies of the proxy materials. If so,
please sign and return each proxy card you receive so that all of your shares
may be voted. I look forward to meeting you at the Annual Meeting.
Very truly yours,
TRIQUINT SEMICONDUCTOR, INC.
STEVEN J. SHARP
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
TRIQUINT SEMICONDUCTOR, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TRIQUINT
SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), will be held on
Thursday, May 29, 1997 at 2:00 p.m., local time, at the Company's principal
executive offices, located at 2300 N.E. Brookwood Parkway, Hillsboro, Oregon
97124, for the following purposes:
1. To elect six Directors to serve until the next Annual Meeting of
Stockholders or until their successors are duly elected and
qualified (Proposal No. 1);
2. To ratify the appointment of KPMG Peat Marwick LLP as independent
accountants of the Company for the fiscal year ending December
31, 1997 (Proposal No. 2);
3. To approve an amendment to the TriQuint Semiconductor, Inc. 1996
Stock Incentive Program to increase the aggregate number of
shares of Common Stock that may be issued thereunder by 400,000
shares to a total of 800,000 shares as summarized in the attached
proxy statement (Proposal No. 3); and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice. Only stockholders of record at the close of business
on April 1, 1997 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she has returned a Proxy.
By Order of the Board of Directors:
Edward C.V. Winn
EXECUTIVE VICE PRESIDENT, FINANCE AND
ADMINISTRATION, CHIEF FINANCIAL OFFICER
AND SECRETARY
Hillsboro, Oregon
April 11, 1997
YOUR VOTE IS IMPORTANT.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING,
YOU ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
TRIQUINT SEMICONDUCTOR, INC.
2300 N.E. BROOKWOOD PARKWAY
HILLSBORO, OREGON 97124
_______________________________
PROXY STATEMENT FOR 1997
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 29, 1997
SOLICITATION AND REVOCATION OF PROXIES
The enclosed Proxy is solicited on behalf of the Board of Directors of TRIQUINT
SEMICONDUCTOR, INC., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held Thursday, May 29, 1997 at 2:00 p.m.,
local time, or at any adjournment thereof, for the purposes set forth herein and
in the accompanying Notice of Annual Meeting of Stockholders. The Annual
Meeting will be held at the Company's principal executive offices, located at
2300 N.E. Brookwood Parkway, Hillsboro, Oregon 97124. The Company's telephone
number at that location is (503) 615-9000. All expenses of the Company
associated with this solicitation will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and other employees, without additional compensation,
personally or by telephone or telegram. The Company may also retain an outside
proxy solicitation firm for which the Company would pay not more than $10,000.
The two persons named as proxies on the enclosed proxy card, Steven J. Sharp and
Edward C.V. Winn, were designated by the Board of Directors. All properly
executed proxies will be voted (except to the extent that authority to vote has
been withheld) and where a choice has been specified by the stockholder as
provided in the proxy card, it will be voted in accordance with the
specification so made. Proxies submitted without specification will be voted
FOR Proposal No. 1 to elect the nominees for Directors proposed by the Board of
Directors, FOR Proposal No. 2 to ratify the appointment of KPMG Peat Marwick LLP
as independent accountants for the Company and FOR Proposal No. 3 to approve an
amendment to the TriQuint Semiconductor, Inc. 1996 Stock Incentive Program to
increase the aggregate number of shares of Common Stock that may be issued
thereunder by 400,000 shares to a total of 800,000 shares as described in "1996
Stock Incentive Program Summary" below.
A proxy may be revoked by a stockholder prior to its exercise by written notice
to the Secretary of the Company, by submission of another proxy bearing a later
date or by voting in person at the Annual Meeting of Stockholders. Such notice
or later proxy will not affect a vote on any matter taken prior to the receipt
thereof by the Company.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended December 31, 1996, including financial
statements, were first mailed on or about April 11, 1997 to all stockholders
entitled to vote at the meeting.
1
VOTING AT THE MEETING
Stockholders of record at the close of business on April 1, 1997 are entitled to
notice of, and to vote at, the Annual Meeting. The Company has one series of
Common Stock outstanding, designated Common Stock, $.001 par value. At the
record date, 8,290,474 shares of the Company's Common Stock were issued and
outstanding and held by 247 stockholders of record. The closing price of the
Company's Common Stock on the record date was $24.00. No shares of the
Company's Preferred Stock were outstanding.
Every stockholder voting for the election of Directors (Proposal No. 1) may
cumulate such stockholder's votes and give one candidate a number of votes equal
to the number of Directors to be elected multiplied by the number of shares that
such stockholder is entitled to vote, or distribute such stockholder's votes on
the same principle among as many candidates as the stockholder may select,
provided that votes cannot be cast for more than six candidates. However, no
stockholder shall be entitled to cumulate votes unless the candidate's name has
been placed in nomination prior to the voting and the stockholder, or any other
stockholder, has given notice at the meeting, prior to the voting, of the
intention to cumulate the stockholder's votes.
On all other matters, each share of Common Stock outstanding on the record date
is entitled to one vote per share at the Annual Meeting. If a quorum is present
at the Annual Meeting: (i) the six nominees for election as Directors who
receive the greatest number of votes cast for the election of Directors shall be
elected Directors, (ii) Proposal No. 2 to ratify the appointment of KPMG Peat
Marwick LLP as independent accountants for the Company will be approved if the
number of votes cast in favor of the proposal exceeds the number of votes cast
against it and (iii) Proposal No. 3 to approve an amendment to the TriQuint
Semiconductor, Inc. 1996 Stock Incentive Program to increase the aggregate
number of shares of Common Stock that may be issued thereunder by 400,000 shares
to a total of 800,000 shares as described in "1996 Stock Incentive Program
Summary" below will be approved if it receives the affirmative vote of the
holders of a majority of shares of Common Stock present in person or represented
by proxy at the Annual Meeting and entitled to vote.
With respect to the election of Directors, Directors are elected by a plurality
of the votes cast and only votes cast in favor of a nominee will have an effect
on the outcome. Therefore, abstention from voting or nonvoting by brokers will
have no effect thereon. With respect to voting on Proposal No. 2, abstention
from voting or nonvoting by brokers will have no effect thereon. With respect
to voting on Proposal No. 3, abstention from voting will have the same effect as
voting against the proposal and nonvoting by brokers will have no effect
thereon.
2
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINEES
A board of six Directors is to be elected at the Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES NAMED BELOW. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for the Company's six nominees
named below, all of whom are presently Directors of the Company. In the event
that any nominee of the Company is unable or declines to serve as a Director at
the time of the Annual Meeting of Stockholders, the proxies will be voted for
any nominee who shall be designated by the present Board of Directors to fill
the vacancy. The Company is not aware of any nominee who will be unable or will
decline to serve as a Director. In the event that additional persons are
nominated for election as Directors, the proxy holders intend to vote all
proxies received by them in such a manner (in accordance with cumulative voting)
as will assure the election of as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders. The term of office for each person elected as a Director
will continue until the next Annual Meeting of Stockholders or until a successor
has been elected and qualified. The following table lists the persons nominated
by the Board of Directors to be elected as Directors along with certain
information:
NAME OF NOMINEE AGE POSITION WITH THE COMPANY SINCE
- --------------- --- ------------------------- -----
Steven J. Sharp 55 President, Chief Executive Officer 1991
and Chairman of the Board
Dr. Paul A. Gary 56 Director 1996
Charles Scott Gibson 44 Director 1992
E. Floyd Kvamme 59 Director 1991
Dr. Walden C. Rhines 50 Director 1995
Edward F. Tuck 65 Director 1994
There is no family relationship between any director or executive officer of the
Company.
Mr. Sharp joined the Company in September 1991 as President, Chief Executive
Officer and director. In May 1992 he became Chairman of the Board of
Directors. For the prior eight years he had served in various roles
associated with venture capital financed semiconductor companies. From April
1988 to June 1989, Mr. Sharp was the founder and served as Chief Executive
Officer of Power Integrations, Inc., a semiconductor manufacturing company.
Previously, Mr. Sharp was employed for 14 years by Signetics Corporation, a
semiconductor manufacturer, and for nine years by Texas Instruments, a
semiconductor manufacturer. He received a B.S. degree in Mechanical
Engineering from Southern Methodist University, an M.S. degree in Engineering
Science from California Institute of Technology and an M.B.A. from Stanford
University.
Dr. Gary has been a director of the Company since May 1996. From May 1987 until
June 1996, Mr. Gary served in various capacities for AT&T Microelectronics, a
telecommunications company, with his last position being Vice President of
Netcom IC Business Unit. Mr. Gary retired from AT&T in June 1996. Mr. Gary
holds a B.S. degree in Electrical Engineering from Lafayette College, an M.S.
degree in Electrical Engineering from Stanford University and a Ph.D. in
Electrical Engineering from Stanford University.
Mr. Gibson has been a director of the Company since September 1992. Since
February 1993, Mr. Gibson has been a self-employed consultant. He co-founded
Sequent Computer Systems Inc., a computer systems company, in 1983 and served as
President from January 1988 to February 1992. From 1976 to 1983, Mr. Gibson was
employed at Intel Corporation as General Manager, Memory Components Operations.
Mr. Gibson also serves as a director and Chairman of Adaptive Solutions Inc.,
RadiSys Corporation, Inference Software, Integrated Measurement Systems
Corporation and
3
Health Systems Technology. Mr. Gibson is also the Vice Chairman of the Board of
the Oregon Graduate Institute of Science and Technology. He received a B.S. in
Electrical Engineering and an M.B.A. from the University of Illinois.
Mr. Kvamme has been a director of the Company since May 1991. He was a director
of Gazelle Microcircuits, Inc. ("Gazelle"), a predecessor corporation of the
Company, from its inception in 1986 to May 1991. He has been a General Partner
of Kleiner Perkins Caufield & Byers, a venture capital firm, since 1984. He is
also a director of Photon Dynamics, Inc. (a display equipment company), Harmonic
Lightwaves, Inc. (a telecom/cable equipment supplier company), Prism Solutions (
a software company) and several private companies. He received a B.S. in
Electrical Engineering from the University of California at Berkeley and an M.S.
in Engineering from Syracuse University.
Dr. Rhines has been a director of the Company since May 1995. Dr. Rhines has
been the President, Chief Executive Officer and a director of Mentor Graphics
Corporation ("Mentor"), an electronic design automation company, since 1993.
Prior to joining Mentor, Dr. Rhines spent twenty-one years at Texas Instruments,
Inc. ("TI"), with his most recent position having responsibility for directing
TI's worldwide semiconductor business as the Executive Vice President of TI's
Semiconductor Group. Dr. Rhines holds a B.S. degree in Metallurgical
Engineering from the University of Michigan, an M.S. and Ph.D. in Materials
Science and Engineering from Stanford University and an M.B.A. from Southern
Methodist University.
Mr. Tuck has been a director of the Company since November 1994. He is a
Managing Director of Kinship Venture Management LLP, which is the general
partner of Kinship Partners II, a venture capital firm. From January 1986 to
May 1995, he was also a Managing Director of Boundary LLP, which is the general
partner of the Boundary Fund III, a venture capital fund. Mr. Tuck is Chairman
of Endgate Technology Corporation, Chairman of Space Destinations Services,
Inc., Vice Chairman of Teledesic Corporation and a director of Applied Digital
Access, Inc., Superconducting Core Technologies, Inc., Angel Technologies and
TeleQual Corporation. Mr. Tuck holds a B.S. degree in Electrical Engineering
from the University of Missouri at Rolla and serves on its Board of Trustees.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company held a total of seven (7) meetings during
fiscal 1996. No director attended fewer than 75 percent of the meetings of the
Board of Directors and committees thereof, if any, during the period that he was
a member of the Board of Directors. The Board of Directors has an Audit
Committee and a Compensation Committee. The Board of Directors has no
Nominating Committee or any committee performing such functions.
The Audit Committee consisted of Directors Tuck (Chairman), Darnall and
Kvamme until May 29, 1996, and Directors Tuck, Kvamme and Gary after that
date. The Audit Committee is responsible for overseeing actions taken by the
Company's independent accountants and reviews the Company's internal
financial controls. The Audit Committee met twice during 1996, with all
then-current members present at each meeting.
The Compensation Committee, which consisted of Directors Kvamme (Chairman),
Gibson and Rhines during 1996, is responsible for determining salaries,
incentives and other forms of compensation for the executive officers of the
Company as well as overseeing the administration of various incentive
compensation and benefit plans, including the 1987 and 1996 Stock Incentive
Programs. The Compensation Committee met twice during 1996, with all members
present at each meeting.
4
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(PROPOSAL NO. 2)
The Board of Directors has selected KPMG Peat Marwick LLP, independent
accountants, to audit the financial statements of the Company for the fiscal
year ending December 31, 1997, subject to ratification by the stockholders of
the Company. In the absence of contrary specifications, the shares represented
by the proxies will be voted FOR the following resolution ratifying the
appointment of KPMG Peat Marwick LLP as the Company's independent accountants
for the fiscal year ending December 31, 1997.
RESOLVED, that the stockholders of TriQuint Semiconductor, Inc. hereby
ratify the appointment of KPMG Peat Marwick LLP as the Company's independent
accountants for the fiscal year ending December 31, 1997.
KPMG Peat Marwick LLP has audited the Company's financial statements annually
since 1991. Representatives of KPMG Peat Marwick LLP are expected to be present
at the meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions. In the
event of a negative vote on ratification, the Board of Directors will reconsider
its selection.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION
OF THE APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT ACCOUNTANTS
OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
5
AMENDMENT TO THE TRIQUINT SEMICONDUCTOR, INC.
1996 STOCK INCENTIVE PROGRAM
(PROPOSAL NO. 3)
The Board of Directors has approved an amendment to the TriQuint Semiconductor,
Inc. 1996 Stock Incentive Program (the "Program") to increase the aggregate
number of shares of Common Stock that may be issued thereunder by 400,000 shares
to a total of 800,000 shares. For a description of the Program see "1996 Stock
Incentive Program Summary" below.
The amendment to the Program was adopted by the Board in order to provide
additional long-term incentives to all employees of the Company as well as to
maintain competitive compensation packages for key employees of the Company.
As of March 31, 1997, options to purchase 299,635 shares of the Company's Common
Stock have been granted pursuant to the Program, 1,125 of which were vested. As
of March 31, 1997, there were 987,491 options outstanding under the Company's
1987 Stock Incentive Program and the Company's other incentive plans that have
terminated, 574,233 of which were vested. This proposal increases the number of
shares authorized for issuance under the Program to provide sufficient shares
for anticipated grants to be issued to both new and existing employees through
May 1998. The Company intends to utilize the options available for grant to
attract and retain both executive and other key employees.
In the absence of contrary specifications, the shares represented by proxies
will be voted FOR the following resolution approving the above:
RESOLVED, that the stockholders of TriQuint Semiconductor, Inc. hereby
approve the amendment to the 1996 Stock Incentive Program to increase the
aggregate number of shares of Common Stock that may be issued thereunder by
400,000 shares to a total of 800,000 shares.
The affirmative vote of the holders of at least a majority of the shares of
Common Stock present in person or represented by proxy and entitled to vote at
the Annual Meeting is required to adopt the foregoing resolution. The award of
options under the Program is at the discretion of the Compensation Committee of
the Board of Directors. See "Executive Compensation-Stock Incentive Program"
below.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE AMENDMENT TO THE TRIQUINT SEMICONDUCTOR, INC.
1996 STOCK INCENTIVE PROGRAM.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of Common Stock of the Company as of April 1, 1997 as to (i) each
person who is known by the Company to own beneficially 5% or more of the
outstanding shares of Common Stock, (ii) each Director of the Company, (iii)
the Chief Executive Officer and the next four most highly compensated
executive officers as of December 31, 1996 (the "Named Executive Officers")
and (iv) the Directors and the executive officers as a group.
Common Stock Approximate
Five Percent Stockholders, Directors Beneficially Percentage
and Certain Executive Officers Owned Owned (1)
- ------------------------------- ----- ---------
FMR Corp. (2) 825,800 9.96%
82 Devonshire Street
Boston, MA 02109
Travelers Group, Inc. (3) 711,850 8.59%
388 Greenwich Street
New York, NY 10013
Lucent Technologies, Inc. (4) 661,059 7.97%
600 Mountain Avenue
Murray Hill, NJ 07974
The Capital Group Companies, Inc. (5) 465,000 5.61%
333 South Hope Street
Los Angeles, CA 90071
Steven J. Sharp (6) 196,671 2.32%
Joseph I. Martin (7) 46,404 *
Edward C. V. Winn (8) 44,307 *
E. Floyd Kvamme (9) 35,593 *
Charles Scott Gibson (10) 31,000 *
Bruce Fournier (11) 24,749 *
Donald H. Mohn (12) 23,433 *
Edward F. Tuck (13) 17,000 *
Walden C. Rhines (14) 16,000 *
Paul A. Gary (15) -- --
All Directors and executive
officers as a group
(13 persons) (16) 474,976 5.48%
- --------------------
* Less than 1%
7
(1) Applicable percentage of ownership is based on 8,290,474 shares of Common
Stock outstanding as of April 1, 1997 together with applicable options for
such stockholders. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission the ("SEC"), and
includes voting and investment power with respect to shares. Shares of
Common Stock subject to options or warrants currently exercisable or
exercisable within 60 days after April 1, 1997 are deemed outstanding for
computing the percentage ownership of the person holding such options or
warrants, but are not deemed outstanding for computing the percentage of
any other person.
(2) The Company has been advised in a Schedule 13G filed with the SEC on March
10, 1997 by FMR Corp. ("FMR") as follows: Fidelity Management & Research
Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp. and a
registered investment adviser, is the beneficial owner of 640,300 shares of
the Common Stock referred to herein as a result of acting as investment
adviser to various investment, and as a result of acting as sub-adviser to
Fidelity American Special Situations Trust ("FASST"). The ownership of one
investment company, Fidelity Select Electronics Portfolio, amounted to
529,500 shares of the Common Stock referred to herein. Edward C. Johnson
III, Chairman of FMR, through its control of Fidelity, and FMR each
have the sole power to dispose of the 630,900 shares owned by the
Fidelity Funds. Neither FMR nor Mr. Johnson III has the sole power to vote
or direct the voting of the shares owned directly by the Fidelity Funds,
which power resides with the Fidelity Funds' Boards of Trustees. Fidelity
Management Trust Company, a "bank" under the Securities Exchange Act of
1934 ("FMTC") and a wholly owned subsidiary of FMR, is the beneficial owner
of 185,500 shares of the Company's Common Stock. Mr. Johnson and FMR,
through control of FMTC, each have sole dispositive power over
185,500 shares of the Company's Common Stock and the sole voting power over
157,000 shares of the Company's Common Stock.
(3) The Company has been advised in a Schedule 13G filed with the SEC on
February 12, 1997 by Capital Group Companies, Inc. ("Capital") as follows:
Capital is the parent holding company of a group of investment management
companies, Capital Research and Management Company ("CRMC") and SMALLCAP
World Fund, Inc. ("SMALL CAP"), which are both registered investment
advisers. Capital, CRMC and SMALL CAP have sole dispositive power over
465,000 shares of the Company's Common Stock and may be deemed to
beneficially own such securities by virtue of Rule 13d-3 under the Act.
Capital disclaims beneficial ownership of the 465,000 shares of the
Company's Common Stock pursuant to Rule 13d-4.
(4) The Company has been advised in a Schedule 13D filed with the SEC on
December 11, 1996 by Lucent Technologies, Inc. ("Lucent") that Lucent
acquired sole voting and dispositive power over 661,059 shares of the
Company's Common Stock from AT&T Corp. ("AT&T") on September 27, 1996. The
interest in the Company's Common Stock was transferred to Lucent from AT&T
pursuant to the Separation and Distribution Agreement dated February 1,
1996 and Amended and Restated as of March 29, 1996 between AT&T, Lucent and
NCR Corporation. Includes 200,000 shares issuable pursuant to a presently
exercisable warrant.
(5) The Company has been advised in a Schedule 13G filed with the SEC on
February 13, 1997 by the Travelers Group Inc. ("Travelers") as follows:
Travelers, through its wholly-owned subsidiaries Smith Barney Holdings,
Inc. ("Smith Barney") and Smith Barney Mutual Funds Management Inc.
("SBMFM"), has shared voting and shared dispositive power over 711,850
shares of the Company's Common Stock. SBMFM has shared voting and shared
dispositive power over 705,500 shares of the Company's Common Stock.
(6) Represents 188,305 shares issuable pursuant to options exercisable within
60 days of April 1, 1997.
(7) Represents 28,266 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
(8) Represents 42,573 shares issuable pursuant to options exercisable within
60 days of April 1, 1997.
(9) Represents 1,125 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
8
(10) Represents 11,556 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
(11) Represents 22,190 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
(12) Represents 21,900 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
(13) Represents 15,000 shares issuable pursuant to options exercisable within 60
days of April 1, 1997.
(14) Represents 2,000 shares held by Mr. Rhines wife and children and 9,000
shares issuable pursuant to options exercisable within 60 days of April 1,
1997.
(15) Mr. Gary is a former employee of the predecessor of Lucent Technologies,
Inc., AT&T. Mr. Gary has no shared voting or investment control over the
shares of the Company's Common Stock held by Lucent Technologies, Inc.
(16) Represents 371,548 shares issuable pursuant to options exercisable within
60 days of April 1, 1997.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and positions of the Company's current executive officers
are as follows:
POSITION
NAME AGE CURRENT POSITION(S) WITH COMPANY HELD SINCE
- ---- --- -------------------------------- ----------
Steven J. Sharp 55 Chairman of the Board of Directors, 1992
President and Chief Executive Officer
Bruce R. Fournier 40 Vice President, Sales 1994
Joseph I. Martin 57 Vice President, Corporate Development 1996
Donald H. Mohn 44 Vice President, Telecommunications and 1995
Computing
J. David Pye 47 Vice President, Manufacturing Operations 1996
E.K. Ranjit 47 Vice President, Finance, Treasurer and
Assistant Secretary 1996
Ronald R. Ruebusch 47 Vice President and General Manager,
Wireless Communications 1996
Edward C.V. Winn 58 Executive Vice President, Finance and 1996
Administration, Chief Financial Officer
and Secretary
For information on the business background of Mr. Sharp, see "Nominees for
Director" above.
Mr. Fournier has held the position of Vice President, Sales since September
1994. Mr. Fournier joined the Company in June 1987 as the Eastern Area Sales
Manager. In July 1991, Mr. Fournier was promoted to National Sales Manager,
Wireless Products and in January 1994 was promoted to Director of World Wide
Sales. Prior to joining the Company, Mr. Fournier was a sales manager for the
semiconductor division at Honeywell, SPT. Mr. Fournier received an A.S. degree
in Electrical Engineering from the University of Maine in 1977, a B.S. degree in
Business Administration from the University of Maine in 1979 and an M.B.A. from
the University of Southern Maine in 1982.
Mr. Martin became the Company's Vice President, Corporate Development in May
1996. Mr. Martin joined the Company in July 1993 as Vice President, Finance and
Administration and Chief Financial Officer. Mr. Martin also served as the
Company's Secretary from July 1993 to December 1996. From January 1989 to June
1993, Mr. Martin was employed as Vice President, Finance and Administration at
In Focus Systems, Inc., a liquid crystal display projection device company.
From July 1987 to January 1989, he was employed by Saba Technologies, Inc., an
optical scanning device company as Vice President of Finance and Administration
and then President. Previously, Mr. Martin held senior finance and
administrative positions with Archive Corporation and Century Data Systems,
Inc., and finance and administrative positions with Xerox Corporation. Mr.
Martin received
9
a B.S. degree in Electrical Engineering from Louisiana State University and an
M.S. degree in Systems Management from the United States Air Force Institute of
Technology. He is a graduate of the Program for Management Development at
Harvard University.
Mr. Mohn joined the Company in June 1995 as Vice President, Telecommunications
and Computing. From July 1993 until June 1995, Mr. Mohn was Vice President,
Marketing for IC Works, Inc. where he was responsible for product strategy
development, tactical marketing, marketing communications and public relations.
From 1989 until July 1993, Mr. Mohn held various positions at AT&T
Microelectronics, with his last position there being Director/General Manager of
the Application Specific Standard Products Group, which he started in 1989 and
grew to $100 million in revenue by 1993. Mr. Mohn received a B.S. degree in
electrical engineering from the University of Minnesota and an M.B.A. from the
University of Dallas, Texas.
Mr. Pye joined the Company in June 1996 as Vice President, Manufacturing
Operations. Prior to joining the Company, Mr. Pye was Vice President and
General Manager at VLSI Technology from 1983 to 1986, where he served in various
capacities. From 1973 to 1983, Mr. Pye worked at Texas Instruments, Inc.,
involved in process engineering and process development. Mr. Pye holds a B.A.
degree from Napier College of Science and Technology in Edinburgh, Scotland
Mr. Ranjit joined the Company in May 1991 and from that date until June 1996,
served as Corporate Controller and Treasurer. In June 1996, Mr. Ranjit was
promoted to Vice President, Finance, Treasurer and Assistant Secretary. From
1986 until May 1991, Mr. Ranjit held various positions at GigaBit Logic, a
predecessor of the Company, including Controller, Director of Finance and
Corporate Secretary. Previously, Mr. Ranjit spent nine years in various
management positions in finance and administration at Mostek Semiconductor and
Controltronics, Inc. Mr. Ranjit received an Accounting degree from the
University of Calicut, India, a B.A. from the University of Texas and is a
Certified Public Accountant.
Mr. Ruebusch joined the Company in May 1996 as Vice President and General
Manager, Wireless Communications. From 1993 to 1996, Mr. Ruebusch was Vice
President, Semiconductor Product Development at Celeritek, Inc. From 1991 to
1993, Mr. Ruebusch held management positions at Pacific Monolithics. Prior to
that, Mr. Ruebusch spent thirteen years in various management positions at
Advanced Micro Devices and Signetics Corp. Mr. Ruebusch holds B.S.E.E.,
M.S.E.E. and M.B.A. degrees from the University of Santa Clara.
Mr. Winn was a consultant to the Company and Acting Vice President, Computing
and Networking from March 1992 to January 1993. In January 1993 he joined the
Company as Vice President and General Manager, Computing and Networking and in
September 1994 was promoted to Executive Vice President and Chief Operating
Officer. In May 1996, Mr. Winn was promoted to Executive Vice President,
Finance and Administration and Chief Financial Officer and in December 1996,
became the Company's Secretary. From 1985 until December 1991, he served in
various capacities with Avantek, Inc., a microwave semiconductor company, most
recently as Product Group Vice President. Mr. Winn's prior experience includes
14 years with Signetics Corporation, a manufacturer of integrated circuits,
where he held various marketing and operations management positions. He
received a B.S. in Physics from Rensselaer Polytechnic Institute and an
M.B.A. from Harvard University.
10
EXECUTIVE COMPENSATION AND OTHER MATTERS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides certain summary information for fiscal years 1996,
1995 and 1994 concerning compensation awarded to, earned by or paid to the
Company's Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company determined as of the end of the
last fiscal year (hereafter referred to as the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Awards
Annual Compensation ------------
--------------------------------------------- Securities All Other
Name and Other Annual Underlying Compensation
Principal Position Year Salary($) Bonus($)(1) Compensation ($) Options (#) ($)(2)
- ------------------------------------------------------------------------------------------------------------------
Steven J. Sharp 1996 265,000 2,938 (3) 31,704 -- 4,239
Chairman of the Board, 1995 245,463 3,034 (3) 33,408 -- 2,480
President and Chief 1994 225,006 16,313 (3) 31,704 100,000 2,304
Executive Officer
Edward C. V. Winn 1996 206,042 2,297 -- -- 3,244
Executive Vice President, 1995 195,664 2,352 -- -- 3,071
Finance and Administration, 1994 161,443 8,700 -- 54,000 2,970
Chief Financial Officer
and Secretary
Bruce R. Fournier 1996 (4) 187,267 1,828 -- -- 340
Vice President, Sales 1995 (4) 163,227 1,240 -- -- 206
1994 (4) 142,226 -- (5) 27,000 35,500 270
Joseph I. Martin 1996 161,962 1,808 -- -- 2,468
Vice President, Corporate 1995 152,066 1,845 -- -- 2,305
Development 1994 145,068 6,960 -- 37,500 2,223
Donald H. Mohn, Vice 1996 145,959 1,603 -- 10,000 490
President, Telecommun- 1995 (6) 94,231 838 (5) 13,775 35,000 471
ications and Computing 1994 -- -- -- -- --
(1) The Company established a bonus program in 1992, which remained in effect
through 1994, for the benefit of its executive officers and certain other
management employees. Bonuses were established by the Compensation
Committee of the Board of Directors, and were based upon the Company's
achieving certain profitability-based goals established by the Board of
Directors at the beginning of the fiscal year. Bonuses were paid
quarterly after the end of the quarter. This bonus program was
discontinued in January 1995 and a Company wide profit sharing program was
instituted.
(2) Represents premiums for group term life insurance.
(3) Represents forgiveness of Mr. Sharp's relocation loan and associated
interest charges (see "Employment Contracts and Change-in- Control
Arrangements").
(4) Includes sales commissions of $67,709, $48,472 and $32,078 earned in 1996,
1995 and 1994, respectively.
(5) Represents reimbursement of relocation expenses.
(6) Includes compensation earned from June 1995 when Mr. Mohn joined the
Company to the end of fiscal 1995.
11
STOCK OPTION GRANTS
The following table contains information concerning the grant of stock options
under the Company's 1987 Stock Incentive Program, as amended (the "Program") to
the Named Executive Officers in 1996.
OPTION GRANTS IN LAST FISCAL YEAR
Potential Realizable Value
At Assumed Annual Rates
of Stock Price Appreciation
Individual Grants (1) for Option Term (2)
- ----------------------------------------------------------------------------------- ---------------------------
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Expiration
Name Granted Fiscal Year Price ($/Sh.) Date 5% ($) 10% ($)
- ----------------------------------------------------------------------------------- ---------------------------
Steven J. Sharp -- -- -- -- -- --
Edward C. V. Winn -- -- -- -- -- --
Bruce R. Fournier -- -- -- -- -- --
Joseph I. Martin -- -- -- -- -- --
Donald H. Mohn 10,000 3.95% $15.75 04/03/06 $99,051 $251,014
(1) Options granted in 1996 vest as to 28 percent of the options granted
on the first anniversary of the grant date, with an additional 2
percent vesting per month thereafter, with full vesting occurring on
the fourth anniversary date. The grant of options under the Program
to executive officers, including the officers named in the Summary
Compensation Table above, is subject to the discretion of the
Compensation Committee of the Board of Directors.
(2) These calculations are based on certain assumed annual rates of
appreciation as required by rules adopted by the SEC requiring
additional disclosure regarding executive compensation. Under these
rules, an assumption is made that the shares underlying the stock
options shown in this table could appreciate at rates of 5% and 10%
per annum on a compounded basis over the ten-year term of the stock
options. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Company's Common Stock and
overall stock market conditions. There can be no assurance that
amounts reflected in this table will be achieved.
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information with respect to the exercise
of stock options and the value of stock options held by each of the Named
Executive Officers at December 31, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Securities
Underlying Value of
Unexercised Options Unexercised In-The-Money
Shares Acquired Value At FY-End (#) Options At FY-End ($) (2)
On Exercise Realized Exercisable/ Exercisable/
Name (#) ($) (1) Unexercisable Unexercisable
- -----------------------------------------------------------------------------------------------
Steven J. Sharp 40,000 $730,250 184,417 25,000 $4,232,690 $500,000
Edward C.V. Winn 15,000 $352,625 40,573 25,240 $860,650 $508,380
Bruce R. Fournier 6,500 $127,288 18,340 15,510 $383,143 $318,806
Joseph I. Martin 14,000 $199,500 35,044 17,456 $716,479 $356,958
Donald H. Mohn -- -- 15,400 29,600 $227,150 $395,350
(1) Market value of the underlying securities at exercise date, minus exercise
price of the options.
(2) Based on the closing price of $26.375 of the Company's Common Stock on
December 31,1996 as reported by The Nasdaq National Market, minus exercise
price of the unexercised options.
12
DIRECTOR COMPENSATION
Until April 3, 1996, Directors received no cash fees for services provided in
that capacity but were reimbursed for out-of-pocket expenses incurred in
connection with attendance at meetings of the Board of Directors. From and after
April 3, 1996, each non-employee Directors receives, in addition to
reimbursement for out-of-pocket expenses, $1,000 per Board meeting he attends
in person and $500 for each Board meeting in which he participates by phone
and for each committee meeting he attends. The Company's 1987 and 1996 Stock
Incentive Programs provide that options may not be granted to non-employee
Directors who represent stockholders holding more than 1% of the outstanding
shares. Options may be granted to non-employee Directors who do not
represent such stockholders ("Outside Directors") only pursuant to a
nondiscretionary, automatic grant mechanism, whereby each Outside Director is
automatically granted an option to purchase 6,000 shares on the date of each
Annual Meeting of Stockholders. Each new Outside Director who joins the
Board on a date other than the date of an Annual Meeting of Stockholders is
entitled to automatically receive an option to purchase a prorata number of
shares of the Company's Common Stock based upon the portion of the period
between the Annual Meetings of Stockholders remaining. Options granted to
Outside Directors have an exercise price equal to the fair market value of
the Company's Common Stock as of the date of grant and vest at a rate of
12.5% per calendar quarter following the date of grant so long as the
optionee remains a Director of the Company.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
EDWARD C.V. WINN. In February 1995, Edward C.V. Winn, the Company's Chief
Financial Officer, Executive Vice President, Finance and Administration and
Secretary, entered into a letter agreement with the Company pursuant to which he
is to receive an annual base salary of $190,000. The agreement provides that,
with certain exceptions, in the event that Mr. Winn's employment is terminated
by the Company for other than just cause, he will receive severance pay equal to
nine months salary at his then current salary (not less than $190,000 per year)
paid every two weeks and fully paid Company insurance benefits for nine months.
Should the Company experience a change in control and Mr. Winn elects to leave
the Company for good reason, Mr. Winn will become vested in the last eight
months of his unvested stock options (see "Change-in-Control Arrangements"
below) and receive a lump-sum payment equal to six months pay at his then
current salary (not less than $190,000 per year) plus fully paid Company
insurance benefits for six months.
STEVEN J. SHARP. In September 1991, under the terms of his acceptance of
employment with the Company, Steven J. Sharp, President, Chief Executive Officer
and Chairman of the Board of Directors, entered into a letter agreement with the
Company pursuant to which he was to receive an annual base salary of $225,000,
subject to annual review, and a quarterly bonus of $18,750 if the Company
achieved its operating income goals in the relevant quarter. The Company also
granted Mr. Sharp an option to purchase 178,571 shares of Common Stock with an
exercise price of $1.40 per share which option vested at a rate of 2% per month
over a 50-month period. Upon the closing of the Company's initial public
offering in December 1993, that portion of Mr. Sharp's option which would
otherwise have vested over the final 12 months of the 50 month vesting period
(42,857 shares) vested immediately.
In the event that the Company desires to terminate Mr. Sharp's employment for
any reason, it must provide Mr. Sharp with one year's advance notice or, in lieu
of such notice, a payment equal to one year's compensation at the then-current
rate. In conjunction with his acceptance of employment, Mr. Sharp also received
a loan from the Company in the amount of $150,000 in lieu of relocation
assistance. The loan agreement provides that the loan will be forgiven in the
amount of $30,000 (and any accrued interest) on each of January 1, 1993, 1994,
1995, 1996 and 1997. The agreement also provides that if Mr. Sharp's employment
with the Company is terminated for any reason, the entire principal amount
remaining, and any accrued interest, will be forgiven as of the date of
13
termination. The Company forgave $31,704 on January 1, 1996. As of the end of
fiscal 1996, the outstanding principal balance of this loan was $30,000. The
final debt forgiveness was recorded on January 1, 1997 in the amount of $31,704.
CHANGE-IN-CONTROL ARRANGEMENTS
In January 1995, the Board approved an amendment to the option agreements
held by each current and future executive officer (an "Executive Officer") of
the Company, as determined from time to time by the Board of Directors or
committee thereof, to provide that, in the event of a change of control of
the Company, certain outstanding options held by each Executive Officer
listed on page 9 of this Proxy Statement to purchase Common Stock of the
Company granted pursuant to the Company's incentive stock programs,
regardless of whether such stock options are then exercisable in accordance
with their terms, shall become vested and exercisable as follows:
1. The Chief Executive Officer shall become immediately vested for those
shares that would have otherwise become vested over the last twelve months of
the options' vesting schedules.
2. The Chief Financial Officer shall become immediately vested for those
shares that would otherwise have become vested over the last eight months of the
options' vesting schedules.
3. All other Executive Officers shall become immediately vested for those
shares that would have otherwise become vested over the last four months of the
options' vesting schedules.
However, the amendment prohibits such acceleration if the Board of Directors
determines, based on written opinion of the Company's independent public
accountants, that the enforcement of the foregoing amendments to the option
agreements of the Executive Officers, which require the acceleration of vesting
of options to purchase shares of the Company's Common Stock under certain
circumstances upon a change of control, would preclude accounting for any
proposed business combination of the Company as a "pooling of interests," and
the Board of Directors otherwise desires to approve a proposed business
combination, a condition to the closing of which is that it be accounted for as
a "pooling of interests," then the foregoing amendments to the option agreements
of the Executive Officers shall be null and void.
The reincorporation of the Company from California to Delaware on February 18,
1997 was not a change in control and no acceleration of option vesting occurred
as a result.
1996 STOCK INCENTIVE PROGRAM SUMMARY
BACKGROUND. The 1996 Stock Incentive Program (the "1996 Program"), which was
approved by the Company's Board of Directors in February 1996, replaced the
existing 1987 Stock Incentive Program (the "1987 Program" collectively the
"Programs") when, pursuant to its terms, the 1987 Program terminated. The
Programs provide for the grant of incentive stock options ("ISOs") to officers
and other employees of the Company or any parent or subsidiary, and non-
qualified stock options ("NQSOs") to officers and other employees of the
Company, Directors, and consultants of the Company. As of February 28, 1997 the
persons eligible to participate in the Programs included 8 officers, 4 Directors
and 367 non-executive officer employees of the Company. During the year ended
December 31, 1996, options to purchase 271,759 shares of Common Stock were
granted under the Programs at an average exercise price of approximately $18.00
per share. As of March 31, 1997, options to purchase 1,287,126 shares of Common
Stock (575,358 of which were vested) were outstanding under the Programs at an
average exercise price of approximately $23.57 per share and 902,094 shares of
Common Stock had been issued upon exercise of options under the Programs. At
March 31, 1997, there were no shares of Common Stock available for future grants
under the 1987 Program and 100,565 shares were available under the 1996 Program.
14
ADMINISTRATION. The Board of Directors has vested the Compensation Committee
with full authority to administer the Programs in accordance with its terms and
to determine all questions arising in connection with the interpretation and
application of the Program. Currently, a Compensation Committee consisting of
Outside Directors Gibson, Kvamme and Rhines, all Disinterested Persons, are
administering the Programs. In any calendar year, no person may be granted
options under the Programs exercisable for more than 125,000 shares, except the
Chief Executive Officer who may not receive options under the Programs
exercisable for more than 250,000 shares.
MINIMUM OPTION PRICE. The exercise prices of ISOs granted under the Programs
must equal or exceed the fair market value of the Common Stock on the date of
grant (110% of the fair market value in the case of employees who holds 10% or
more of the voting power of the Common Stock (a "10 percent stockholder")), and
the exercise price of NQSOs must equal or exceed 50% of the fair market value of
Common Stock on the date of grant. As defined in the Programs, "fair market
value" means the last reported sales price of the Common Stock on The Nasdaq
National Market System on the date of grant.
DURATION OF OPTIONS. Subject to earlier termination of the option as a result
of termination of employment, death or disability, each option granted under the
Programs expires on the date specified by the Compensation Committee, but in no
event more than (i) ten years and one day from the date of grant in the case of
NQSOs, (ii) ten years from the date of grant in the case of ISOs generally, and
(iii) five years from the date of grant in the case of ISOs granted to a 10%
Stockholder.
MEANS OF EXERCISING OPTIONS. The Board of Directors, or the Compensation
Committee, as the case may be, may determine the consideration to be paid for
the shares to be issued upon exercise of an Option, including the method of
payment, and may consist entirely of: (i) cash, (ii) check, (iii) promissory
note, (iv) other shares of the Company's Common Stock which (i) either have been
owned by the Optionee for more than six (6) months on the date of surrender or
were not acquired, directly or indirectly, from the Company, and (ii) have a
fair market value on the date of surrender equal to the aggregate exercise price
of the shares as to which said option shall be exercised, (v) delivery of a
properly executed exercise notice together with such other documentation as the
Administrator and the broker, if applicable, shall require to effect an exercise
of the option and delivery to the Company of the sale or loan proceeds required
to pay the exercise price, or (vi) any combination of such methods of payment,
or such other consideration and method of payment for the issuance of shares to
the extent permitted under federal and state law.
TERM AND AMENDMENT OF THE PROGRAM. The Programs became effective when adopted
by the Board of Directors. The 1996 Program will continue in effect until
February 1, 2006 unless earlier terminated, and the 1987 Program terminated on
March 26, 1997, in accordance with its terms. The Board of Directors may
terminate or amend the Programs at any time, provided, however, that the Company
must obtain stockholder approval of any amendment to the extent necessary and
desirable to comply with Rule 16b-3 or with Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor rule, regulation or
statute. Such stockholder approval, if required, must be obtained in such a
manner and to such a degree as is required by the applicable law, rule or
regulation.
ASSIGNABILITY. Unless otherwise indicated, no option granted under the Program
is assignable or transferable by the optionee except by will or by the laws of
descent and distribution.
FEDERAL TAX EFFECTS OF ISOS. The Company intends that ISOs granted under the
Program will qualify as incentive stock options under Section 422 of the Code.
An optionee acquiring stock pursuant to an ISO receives favorable tax treatment
in that the optionee does not recognize any taxable income at the time of the
grant of the ISO or upon exercise. The tax treatment of the disposition of ISO
stock depends upon whether the stock is disposed of within the holding period,
which is the later of two years from the date the ISO is granted or one year
from the date the ISO is exercised. If the optionee disposes of ISO stock after
completion of the holding period, the optionee will recognize as
15
capital gains income the difference between the amount received in such
disposition and the basis in the ISO stock, i.e. the option's exercise price.
If the optionee disposes of ISO stock before the holding period expires, it is
considered a disqualifying disposition and the optionee must recognize the gain
on the disposition as ordinary income in the year of the disqualifying
disposition. Generally, the gain is equal to the difference between the
option's exercise price and the stock's fair market value at the time the option
is exercised and sold (the "bargain purchase element"). While the exercise of
an ISO does not result in taxable income, there are implications with regard to
the alternative minimum tax ("AMT"). When calculating income for AMT purposes,
the favorable tax treatment granted ISOs is disregarded and the bargain purchase
element of the ISO will be considered as part of AMT income. Just as the
optionee does not recognize any taxable income on the grant or exercise of an
ISO, the Company is not entitled to a deduction on the grant or exercise of an
ISO. Upon a disqualifying disposition of ISO stock, the Company may deduct from
taxable income in the year of the disqualifying disposition an amount generally
equal to the amount that the optionee recognizes as ordinary income due to the
disqualifying disposition.
FEDERAL TAX EFFECTS OF NQSOS. If an option does not meet the statutory
requirements of Section 422 of the Code and therefore does not qualify as an
ISO, the difference, if any, between the option's exercise price and the fair
market value of the stock on the date the option is exercised is considered
compensation and is taxable as ordinary income to the optionee in the year the
option is exercised. The Company may deduct the amount of expense recognized by
an employee as compensation expense. Although an optionee will generally
realize ordinary income at the time the NQSO is exercised, if the stock issued
upon exercise of the option is considered subject to a "substantial risk of
forfeiture" and the employee has not filed a "Section 83 Election," then the
optionee is not taxed when the option is exercised, but rather when the
forfeiture restriction lapses. At that time, the optionee will realize ordinary
income in an amount equal to the difference between the option's exercise price
and the fair market value of the stock on the date the forfeiture restriction
lapses.
The foregoing summary of federal income tax consequences of stock options does
not purport to be complete, nor does it discuss the provisions of the income tax
laws of any state or foreign country in which the optionee resides.
PARTICIPATION IN THE PROGRAMS. The grant of options under the Programs to
executive officers is subject to the discretion of the Board of Directors and
the recommendation of the Board's Compensation Committee. The following
executive officers of the Company received grants covering the following number
of shares on March 20, 1997 at $23.25 per share, the fair market value of the
Company's Common Stock on the date of grant: Mr. Mohn - 7,000 shares; Mr.
Fournier - 10,000 shares; Mr. Ranjit - 6,800 shares; Mr. Winn - 15,000 shares;
and Mr. Sharp - 80,000 shares. The table of option grants under "Executive
Compensation and Other Matters - Option Grants in Last Fiscal Year" provides
information concerning the grant of options to the Named Executive Officers
during fiscal 1996. Information regarding the automatic, nondiscretionary
options granted to non-employee Directors during fiscal 1996 is set forth under
the heading "Executive Compensation and Other matters - Compensation of
Directors." During fiscal 1996, all current officers and Directors, as a group,
and all non-officer employees, as a group received options to purchase 132,500
shares and 139,259 shares, respectively under the Programs. In fiscal 1997, the
Outside Directors will each receive an option to purchase 6,000 shares of the
Company's Common Stock, or an aggregate of 24,000 shares, at fair market value
on the date of grant, pursuant to the nondiscretionary grant mechanism in place
for such Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Messrs. Gibson, Kvamme and Rhines.
Mr. Sharp who is President, Chief Executive Officer and Chairman of the Board of
Directors of the Company, participates in the discussions and decisions
regarding salaries and incentive compensation for all executive officers of the
Company, except that Mr. Sharp is excluded from discussions regarding his own
salary and incentive compensation.
16
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors reviews
and approves the Company's executive compensation policies. The following is
the report of the Committee describing compensation policies and rationale
applicable to the Company's executive officers with respect to the compensation
paid to such executive officers for the fiscal year ended December 31, 1996.
The information contained in such report shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any future filing under
the Securities Act or Exchange Act, except to the extent that the Company
specifically incorporates it by reference into such filing.
COMPENSATION PHILOSOPHY AND POLICIES FOR EXECUTIVE OFFICERS
The Company's 1996 executive compensation program was designed to align the
interests of executives with the interest of the stockholders by creating a
performance-oriented environment that rewards performance related to the goals
of the Company. The Company's executive compensation program was also designed
to attract and retain qualified executives in the highly competitive high
technology marketplace in which the Company competes. In this regard, the
levels of executive compensation established by the Committee were designed to
be consistent with those available to other executives in the industry. The
Company's executive compensation program consists primarily of the following
integrated components:
1. BASE SALARY -- which was designed to compensate executives
competitively within the industry and the marketplace.
2. QUARTERLY PROFIT SHARING -- which provided a direct link between
executive compensation and the quarterly performance of the Company.
3. LONG TERM INCENTIVES -- which consisted of stock options that link
management decision making with long-term Company performance and stockholder
interests.
The Committee has considered the potential impact of Section 162(m) of the
Internal Revenue Code on the compensation paid to the Company's executive
officers. Section 162(m) disallows a tax deduction for any publicly-held
corporation for individual compensation exceeding $1.0 million in any taxable
year for any of the named executive officers, unless compensation is
performance-based. In general it is the Committee's policy to qualify, to the
maximum extent possible, its executives' compensation for deductibility under
applicable tax laws.
BASE SALARIES
Base salary levels for the Chief Executive Officer (the "CEO") and other
executive officers of the Company are reviewed annually by the Compensation
Committee. The Committee's current policy is to maintain base salary levels in
the median range for the industry when compared with those of executives holding
similar positions with other companies in the high technology and semiconductor
industries that are similar in size to the Company. Certain companies included
in the peer group index of the stock performance graph are also included in
surveys reviewed by the Company in determining salary levels for the CEO and
other executive officers of the Company.
QUARTERLY PROFIT SHARING
All employees participate in the profit sharing program. Profit sharing is
paid quarterly and equals a percentage of the employees' quarterly W-2
income. In 1996, the profit sharing pool was equal to 10 percent of
operating income. One half of the profit sharing amount is paid quarterly
in cash, with the other half paid as an employer contribution to employees'
401(k) account. Only employees who are employees at the end of the fiscal
year receive the 401(k) portion of the profit sharing. Profit sharing
amounts, as a percentage of W-2 income, ranged from approximately 0.5 percent
to 1.1 percent, 1.7 percent
17
to 2.7 percent, 0.9 percent to 2.8 percent and 1.28 percent to 1.56 percent for
the first, second, third and fourth quarters of 1996, respectively, for the CEO
and the Named Executive Officers.
LONG TERM INCENTIVES
The Company provides long term incentives through the grant of stock options
under its 1987 and 1996 Stock Incentive Programs (the "Programs"). The purpose
of the Programs is to create a direct link between compensation and the
long-term performance of the Company. Stock options under this Program are
generally granted at an exercise price equaling 100% of fair market value, have
a ten year term and generally vest in installments over four years. Because the
receipt of value by an executive officer under a stock option is dependent upon
an increase in the price of the Company's Common Stock, this portion of the
executives' compensation is directly aligned with an increase in stockholder
value. The primary stock options granted to executive officers are generally in
conjunction with the executive officer's acceptance of employment with the
Company, or upon promotion to executive officer. When determining the number of
stock options to be awarded to an executive officer, the Compensation Committee
considers (i) the executive's current contribution to the Company's performance,
(ii) the executive's anticipated contribution in meeting the Company's long-term
strategic performance goals and (iii) comparisons to an internally generated
informal survey of executive stock option grants made by other high technology
and semiconductor companies at a similar stage of development as the Company.
Individual considerations, such as the executive's current and anticipated
contributions to the Company's performance may be more subjective and less
measurable by financial results at the corporate level. In this respect, the
Committee exercises significant judgment in measuring the contribution or
anticipated contribution to the Company's performance. The Compensation
Committee also periodically reviews the stock options granted to insure
equitable distribution of such options among the officers.
OTHER
The Company's executive officers are also eligible to participate in
compensation and benefit programs generally available to other employees,
including the Company's Employee Stock Purchase Plan.
CEO COMPENSATION
The Committee reviews the Chief Executive Officer's compensation annually using
the same criteria and policies as are employed for the other executive officers.
The compensation of the Company's CEO is determined in part by the terms of a
letter agreement entered into with the CEO upon his acceptance of employment
with the Company in September 1991. See "Employment Contracts and
Change-In-Control Arrangements" above. However, the Committee retains the
discretion to increase the CEO's compensation to levels above those provided in
the letter agreement. The Committee raised Mr. Sharp's salary to $245,000 for
fiscal 1995. Mr. Sharp received an aggregate bonus of $2,938 during 1996 under
the Company's Profit Sharing Plan described above. Such amount reflected 0.5
percent, 1.7 percent, 0.9 percent and 1.37 percent of Mr. Sharp's W-2 income for
the first, second, third and fourth quarter, respectively. Mr. Sharp did not
receive any stock options under the Company's 1996 or 1987 Stock Incentive
Programs during 1996.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
E. Floyd Kvamme
Charles Scott Gibson
Dr. Walden C. Rhines
18
STOCK PERFORMANCE GRAPH
The SEC requires that registrants include in their proxy statement a line-graph
presentation comparing cumulative five-year stockholder returns on an indexed
basis, assuming a $100 initial investment and reinvestment of dividends, of (a)
the Company, (b) a broad-based equity market index and (c) an industry-specific
index or a registrant-constructed peer group index. Set forth below is a line
graph comparing the annual percentage change in the cumulative return to the
stockholders of the Company's Common Stock with the cumulative return of the
Nasdaq U.S. Index and of the SIC Code 3674 - Electronic Components and
Accessories Index for the period commencing December 13, 1993 (the date of the
Company's initial public offering) and ending on December 31, 1996. The
information contained in such graph shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any future filing under
the Securities Act of 1933 or Securities Exchange Act of 1934, except to the
extent that the Company specifically incorporates it by reference into such
filing.
INDEXED RETURNS
Base Years Ending
Period
Company Name/Index 12/13/93 Dec93 Dec94 Dec95 Dec96
- --------------------------------------------------------------------------------
TRIQUINT SEMICONDUCTOR INC 100 111.36 59.09 122.72 239.76
NASDAQ U.S. INDEX 100 102.79 100.51 142.10 174.78
PEER GROUP 100 105.08 130.64 195.30 302.03
No dividends have been declared or paid on the Company's Common Stock.
Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
The peer group index used, SIC Code 3674 - Electronic Components and
Accessories, utilizes the same the same methods of presentation and
assumptions for the total return calculation as the Company and the Nasdaq
U.S. Index. All companies in the peer group index are weighted in accordance
with their market capitalizations.
19
Companies included in the peer group index are as follows:
Advanced Micro Devices Microsemi Corp.
Advanced Photonix, Inc. Mitsubishi Electronics Corporation - ADR
Aeroflex, Inc. Mizar, Inc.
Allegheny Teledyne, Inc. MRV Communications, Inc.
Alliance Semiconductor Corporation MSI Electronics, Inc.
Alpha Industries National Semiconductor Corporation
Altera Corporation Nuwave Technologies, Inc.
Anadigics, Inc. Oak Technology, Inc.
Analog Devices Optek Technology, Inc.
Atmel Corporation Opti, Inc.
Benchmarq Microelectronics Panda Project, Inc.
BKC Semiconductor, Inc. Paradigm Technology, Inc.
Bowmar Instrument Corporation Qlogic Corporation
Burr-Brown Corporation Quality Semiconductor, Inc.
Catalyst Semiconductor, Inc. Ramtron International Corporation
Chips & Technologies, Inc. Remec, Inc.
Cypress Semiconductor Corporation Ross Technologies, Inc.
Cyrix Corporation SDL Inc.
Dallas Semiconductor Corporation SEEQ Technology, Inc.
Data Systems & Software, Inc. Semicon, Inc.
Dense-Pac Microsystems, Inc. Semiconductor Laser Intl. Corporation
Diodes, Inc. Semtech Corporation
Dionics, Inc. SGS-Thomson Microelectronics
Elantec Semiconductor, Inc. Sierra Semiconductor Corporation
ESS Technology, Inc. Silicon Storage Technology
Exar Corporation Siliconix Inc.
Harman Industries, Inc. Simtek Corporation
HEI, Inc. Sipex Corporation
Hytek Microsystems, Inc. Smart Modular Technologies, Inc.
IBIS Technology, Inc. Solitron Devices, Inc.
IMP, Inc. Supertex, Inc.
Information Storage Devices Telcom Semiconductor, Inc.
Integrated Circuit systems Texas Instruments, Inc.
Integrated Device Technology, Inc. Three-Five Systems, Inc.
Integrated Silicon Solution Tower Semiconductor, Ltd.
Intel Corporation Transwitch Corporation
International Rectifier Corporation Trident Microsystems, Inc.
Jetronic Industries, Inc. TriQuint Semiconductor, Inc.
Kyocera Corporation - ADR Uniphase Corporation
Lattice Semiconductor Corporation Unitrode Corporation
Level One Communications, Inc. Vitesse Semiconductor Corporation
Linear Technology Corporation VLSI Technology, Inc.
Logic Devices, Inc. Xicor, Inc.
LSI Logic Corporation Xilinx Inc.
Macronix International Ltd. - ADR Zilog, Inc.
Maxim Integrated Products Zing Technologies, Inc.
MEMC Electronic Materials, Inc. Zoran Corporation
Micrel, Inc.
Micro Linear Corporation
Microchip Technology, Inc.
Microelectronic Packaging
Micron Technology, Inc.
Micropac Industries, Inc.
20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1996, the Company entered into an employment agreement with Ronald
Ruebusch, Vice President and General Manager, Wireless Communications, providing
for certain relocation benefits, including the cost of alternative housing for
up to three months until his prior residence was sold, reimbursement for moving
expenses and closing costs upon the sale of his prior residence. Pursuant to
such employment agreement, the Company paid $106,897 in relocation assistance to
Mr. Ruebusch in fiscal 1996.
In September 1991, the Company entered into an employment agreement with Steven
Sharp, the Company's Chairman of the Board of Directors, Chief Executive Officer
and President, providing for certain relocation benefits. The Company provided
such relocation benefits through a loan to Mr. Sharp, and on November 30, 1992,
Mr. Sharp executed a promissory note evidencing a $150,000 loan at a rate of
5.68 percent per annum and due in 1997. This promissory note provided for
annual forgiveness of $30,000 of principal plus any accrued and unpaid interest
on January 1 of each year until such time as the loan was repaid or forgiven in
full as long as Mr. Sharp was an employee of the Company. The agreement also
provided that if Mr. Sharp's employment with the Company was terminated for any
reason, the entire principal amount remaining, and any accrued interest, would
be forgiven as of the date of termination. The Company forgave $31,704,
$33,408 and $31,704 on January 1, 1995, January 1, 1996 and January 1, 1997,
respectively. As of January 1, 1996 and January 1, 1997, the outstanding
principal and accrued interest on the loan was $31,704 and $30,000,
respectively. The Company forgave the loan in full on January 1, 1997.
Until June 1996, Paul Gary, a Director of the Company, was employed by AT&T,
a stockholder of the Company. Although, Mr. Gary is no longer an employee of
AT&T or its successor Lucent Technologies, Inc. ("collectively Lucent"), his
nomination was proposed to the Board of Directors by Lucent. Mr. Gary serves
as a representative of Lucent on the Companys Board of Directors and he is
compensated for his services on the Company's Board of Directors by Lucent.
However, the Company reimburses Mr. Gary for any out-of-pocket expenses
incurred in connection with travel to meetings of the Company's Board of
Directors. As a result of his relationship with Lucent, Mr. Gary did not
receive a partial nondiscretionary stock option for the Company's Common
Stock in fiscal 1996 and will not receive such an automatic grant in fiscal
1997.
Lucent Technologies, Inc., a spin-off of AT&T, holds 661,059 shares of the
Company's Common Stock and a warrant to purchase 200,000 additional shares of
the Company's Common Stock at $24.00 per share (the "Warrant"). In
conjunction with Lucent's acquisition of the Company's Common Stock and the
Warrant in August 1993, Lucent entered into a series of agreements with the
Company, including an Asset Purchase Agreement, a Joint Development and
Technology Transfer Agreement, a Manufacturing Services Agreement, and a
Patent License Agreement. The Lucent agreements provide for the Company to
work jointly with Lucent to develop and market certain GaAs wafers and other
products. The agreements do not provide any minimum order or development
requirements for Lucent, and there can be no assurance that a substantial
relationship with Lucent will result. The sale of the Company's products to
Lucent occurs at prices no more favorable than those charged to other
customers.
All future transactions, including loans between the Company and its officers,
directors, principal stockholders and their affiliates, will be approved by a
majority of the Board of Directors, including a majority of the independent and
disinterested outside directors, and will be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
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
to file reports of ownership and changes in ownership with the SEC and the
National Association of Securities Dealers, Inc. Executive officers, Directors
and greater than ten percent stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. Based
solely on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that,
during fiscal 1996 all executive officers and other employees of the Company who
are subject to Section 16 of the Exchange Act, Directors and greater than 10%
stockholders complied with all applicable filing requirements except that in
1996, Gordon Cumming and E.K. Ranjit, Section 16(a) reporting officers of the
Company, each failed to timely file a Form 4, Statement of Changes in Beneficial
Ownership.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented by
such stockholders at the Company's 1998 Annual Meeting of Stockholders must be
received by the Company no later than March 11, 1998 in order that they may
be considered for inclusion in the proxy statement and form of proxy relating to
that meeting.
21
OTHER MATTERS
The Company knows of no other matters to be submitted at the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of Proxy to vote the shares they represent as
the Board of Directors may recommend.
By Order of the Board of Directors:
Edward C.V. Winn
EXECUTIVE VICE PRESIDENT, FINANCE AND
ADMINISTRATION, CHIEF FINANCIAL OFFICER
Dated: April 11, 1997 AND SECRETARY
22
APPENDIX A
TRIQUINT SEMICONDUCTOR, INC.
1996 STOCK INCENTIVE PROGRAM
AS AMENDED AND RESTATED
1. PURPOSES OF THE PROGRAM. The purposes of this Stock Incentive Program
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to the Employees,
Consultants and certain Outside Directors of the Company and to promote the
success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Program also provides for
automatic grants of Nonstatutory Stock Options to Outside Directors who are
neither representatives nor employees or shareholders owning more than one
percent (1%) of the outstanding shares of the Company.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "ADMINISTRATOR" shall mean the Board or any of its Committees as
shall be administering the Program, in accordance with Section 4 of the Program.
(b) "APPLICABLE LAWS" means the requirements relating to the
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.
(c) "BOARD" shall mean the Board of Directors of the Company.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "COMMON STOCK" shall mean the Common Stock of the Company.
(f) "COMPANY" shall mean TriQuint Semiconductor, Inc., a Delaware
corporation.
(g) "COMMITTEE" shall mean a Committee appointed by the Board of
Directors in accordance with Section 4 of the Program.
(h) "CONSULTANT" shall mean any person who is engaged by the Company
or any Parent or Subsidiary to render consulting services and is compensated for
such consulting services; provided that the term Consultant shall not include
directors who are not compensated for their services; or are paid only a
director's fee by the Company.
1
(i) "DIRECTOR " shall mean a member of the Board.
(j) "CONTINUOUS STATUS AS AN EMPLOYEE, CONSULTANT OR OUTSIDE
DIRECTOR" shall mean the absence of any interruption or termination of service
as an Employee, Consultant or Outside Director. Continuous Status as an
Employee, Consultant or Outside Director shall not be considered interrupted in
the case of sick leave, military leave, or any other leave of absence approved
by the Administrator; provided that such leave is for a period of not more than
90 days or reemployment upon the expiration of such leave is guaranteed by
contract or statute.
(k) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(l) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(m) "INCENTIVE STOCK OPTION" shall mean an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.
(n) "NONSTATUTORY STOCK OPTION" shall mean an Option not intended to
qualify as an Incentive Stock Option.
(o) "OFFICER " shall mean a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(p) "OPTION" shall mean a stock option granted pursuant to the
Program.
(q) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(r) "OPTIONEE" shall mean an Employee, Consultant or Outside Director
who holds an outstanding Option.
(s) "OUTSIDE DIRECTOR" shall mean a member of the Board of Directors
of the Company who is not an Employee.
(t) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(u) "PROGRAM" shall mean this 1996 Stock Incentive Program.
(v) "RULE 16b-3" shall mean Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Program.
2
(w) "SHARE" shall mean a share of the Common Stock, as adjusted in
accordance with Section 10 of the Program.
(x) "SUBSIDIARY" shall mean a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PROGRAM. Subject to the provisions of Section 10
of the Program, the maximum aggregate number of shares under the Program is
800,000 shares of Common Stock. The Shares may be authorized, but unissued, or
reacquired Common Stock.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares which were subject thereto
shall, unless the Program shall have been terminated, become available for
future grant under the Program. Notwithstanding the above, however, if Shares
are issued upon exercise of an Option and later repurchased by the Company, such
Shares shall not become available for future grant or sale under the Program.
4. ADMINISTRATION OF THE PROGRAM.
(a) PROCEDURE.
(i) MULTIPLE ADMINISTRATIVE BODIES. The Plan may be
administered by different Committees with respect to different groups of Service
Providers.
(ii) SECTION 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.
(iii) RULE 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.
(iv) OTHER ADMINISTRATION. Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws.
(b) POWERS OF THE ADMINISTRATOR. Subject to the provisions of the
Program, the Administrator shall have the authority, in its discretion: (i) to
grant Incentive Stock Options or Nonstatutory Stock Options; (ii) to determine,
upon review of relevant information and in accordance with Section 7 of the
Program, the fair market value of the Common Stock; (iii) to determine the
exercise price per share of Options to be granted, which exercise price shall be
determined in accordance with Section 7 of the Program; (iv) to determine the
Employees or Consultants to whom, and the time or times at which, Options shall
be granted and the number of shares to be represented
3
by each Option (except with respect to automatic Option grants made to certain
Outside Directors); (v) to interpret the Program; (vi) to prescribe, amend and
rescind rules and regulations relating to the Program; (vii) to determine the
terms and provisions of each Option granted (which need not be identical) and,
with the consent of the holder thereof, modify or amend each Option; (viii) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Administrator;
(ix) to allow Optionees to satisfy withholding tax obligations by electing to
have the Company withhold from the Shares to be issued upon exercise of an
Option that number of Shares having a Fair Market Value equal to the amount
required to be withheld; and (x) to make all other determinations deemed
necessary or advisable for the administration of the Program. However, with
respect to Options granted to certain Outside Directors pursuant to Section
8(b)(ii) hereof, the Administrator shall exercise no discretion and such awards
shall be administered solely according to their terms.
(c) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all Optionees and any other holders of any Options granted under the
Program.
5. ELIGIBILITY.
(a) Options may be granted to Employees and Consultants; Options may
also be granted to Outside Directors who are neither employees nor
representatives of shareholders owning more than one percent (1%) of the
outstanding shares of the Company. However, (i) Incentive Stock Options may be
granted only to Employees, and (ii) Options may only be granted to Outside
Directors who are neither employees nor representatives of shareholders owning
more than one percent (1%) of the outstanding shares of the Company in
accordance with the provisions of Section 8(b)(ii) hereof. An Employee,
Consultant or Outside Director who has been granted an Option may, if he is
otherwise eligible, be granted an additional Option or Options.
(b) To the extent that the aggregate fair market value of Shares
subject to an Optionee's incentive stock options granted by the Company, any
Parent or Subsidiary, which become exercisable for the first time during any
calendar year (under all plans or programs of the Company or any Parent or
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), incentive stock
options shall be taken into account in the order in which they were granted, and
the fair market value of the Shares shall be determined as of the time of grant.
(c) Neither the Program nor any Option shall confer upon any Optionee
any right with respect to continuation of employment or consulting relationship
with the Company, nor shall it interfere in any way with the Optionee's right or
the Company's right to terminate such employment or consulting relationship at
any time with or without cause.
(d) The following limitations shall apply to grants of Options under
the Program (defined below):
4
(i) The President of the Company shall not be granted, in
any fiscal year of the Company, options to purchase more than 250,000 Shares,
and no other Employee shall be granted, in any fiscal year of the Company,
Options to purchase more than 125,000 Shares.
(ii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 10.
(iii) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 10), the canceled Option will be counted against the limit
set forth in Section (i) above. For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
(iv) The foregoing limitations set forth in this Section
5(d) are intended to satisfy the requirements applicable to Options intended to
qualify as "performance-based compensation" (within the meaning of Section
162(m) of the Code). In the event the Administrator determines that such
limitations are not required to qualify Options as performance-based
compensation, the Administrator may modify or eliminate such limitations.
6. TERM OF PROGRAM. The Program shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by vote of
the shareholders of the Company as described in Section 16 of the Program. It
shall continue in effect for a term of ten (10) years unless sooner terminated
under Section 12 of the Program.
7. EXERCISE PRICE AND CONSIDERATION OF SHARES.
(a) The per Share exercise price for the Shares to be issued pursuant
to exercise of a Nonstatutory Stock Option shall be such price as is determined
by the Administrator, but in no event shall it be (i) less than 50% of the fair
market value per Share on the date of grant and (ii) in the case of an Incentive
Stock Option, not less than 100% of the fair market value per Share on the date
of grant. In the case of an Incentive Stock Option granted to an Employee who,
at the time of grant of such Incentive Stock Option owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the fair market value per Share on the date of grant.
(b) The fair market value shall be determined by the Administrator;
provided, however, in the event that the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its fair market value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the time of
determination, as reported in THE WALL STREET JOURNAL or such other source as
the Administrator deems reliable; or in the event that the Common
5
Stock is regularly quoted by a recognized securities dealer but selling prices
are not reported, the fair market value of a Share of Common Stock shall be the
mean between the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported in THE WALL
STREET JOURNAL or such other source as the Administrator deems reliable.
(c) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Board and may consist entirely of:
(i) cash,
(ii) check,
(iii) promissory note,
(iv) other Shares of Common Stock which (i) either have been
owned by the Optionee for more than six (6) months on
the date of surrender or were not acquired, directly
or indirectly, from the Company, and (ii) have a fair
market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which said
option shall be exercised,
(v) delivery of a properly executed exercise notice
together with such other documentation as the
Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or
(vi) any combination of such methods of payment, or such
other consideration and method of payment for the
issuance of Shares to the extent permitted under
Sections 408 and 409 of the California General
Corporation Law.
In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
However, with respect to Options granted to certain Outside Directors
pursuant to Section 8(b)(ii) hereof, the consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
consist entirely of:
(i) cash,
(ii) check,
6
(iii) other Shares of Common Stock which (i) either have been
owned by the Optionee for more than six (6) months on
the date of surrender or were not acquired, directly or
indirectly, from the Company, and (ii) have a fair
market value on the date of surrender equal to the
aggregate exercise price of the Shares as to which
said option shall be exercised,
(iv) delivery of a properly executed exercise notice
together with such other documentation as the
Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and
delivery to the Company of the sale or loan proceeds
required to pay the exercise price, or
(v) any combination of such methods of payment.
8. OPTIONS.
(a) TERM OF OPTION. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
Incentive Stock Option Agreement in the form attached hereto as Exhibit A. The
term of each Option that is not an Incentive Stock Option shall be ten (10)
years and one (1) day from the date of grant thereof or such shorter term as may
be provided in the Nonstatutory Stock Option Agreement in the form attached
hereto as Exhibit B-1 or B-2. However, in the case of an Option granted to an
Optionee who, at the time the Option is granted, owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, (a) if the Option is an Incentive Stock
Option, the term of the Option shall be five (5) years from the date of grant
thereof or such shorter time as may be provided in the Incentive Stock Option
Agreement, or (b) if the Option is not an Incentive Stock Option, the term of
the Option shall be five (5) years and one (1) day from the date of grant
thereof or such shorter term as may be provided in the Nonstatutory Stock Option
Agreement. However, with respect to Options granted to certain Outside
Directors pursuant to Section 8(b)(ii) hereof the term shall be as stated in
such Section.
(b) EXERCISE OF OPTION.
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER. Any
Option granted hereunder, except for Options granted to certain Outside
Directors in accordance with Section 8(b)(ii) below, shall be exercisable at
such times and under such conditions as determined by the Administrator,
including performance criteria with respect to the Company and/or the Optionee,
and shall be permissible under the terms of the Program.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person
7
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full payment
may, as authorized by the Administrator, consist of any consideration and method
of payment allowable under Section 7(c) of the Program. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, which issuance shall be made as soon as is practicable, no right to
vote or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly upon
exercise of the Option. No adjustment will be made for a dividend or other
right for which the record date is prior to the date the stock certificate is
issued, except as provided in Section 10 of the Program.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Program and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(ii) AUTOMATIC OPTION GRANTS TO CERTAIN OUTSIDE DIRECTORS.
The provisions set forth in this Section 8(b)(ii) shall not be amended more than
once every six months, other than to comport with changes in the Code, the
Employee Retirement Income Security Act of 1974 as amended, or the rules or
regulations promulgated thereunder. All grants of Options to Outside Directors
under this Program shall be automatic and non-discretionary and shall be made
strictly in accordance with the following provisions:
(A) No person shall have any discretion to select which
Outside Directors shall be granted Options or to determine the number of shares
to be covered by Options granted to Outside Directors; provided, however, that
nothing in this Program shall be construed to prevent an Outside Director from
declining to receive an Option under this Program.
(B) On the date of each annual meeting of the Company's
shareholders (beginning with the 1996 annual meeting of shareholders), each
person who is then an Outside Director (including any person who first becomes
an Outside Director as of such date) and who is not a representative of
shareholders owning more than one percent (1%) of the outstanding shares of the
Company shall automatically receive an Option to purchase 6,000 Shares;
provided, however, that no options shall be granted to an Outside Director
pursuant to Section 8(b)(ii)(B) of this Program for any calendar year in which
the Outside Director has been granted options under the TriQuint Semiconductor,
Inc. 1987 Stock Incentive Program.
(C) Each Outside Director who is not a representative of
shareholders owning more than one percent (1%) of the outstanding shares of the
Company and who first becomes an Outside Director as of a date other than the
date of an annual meeting of the Company's shareholders shall automatically
receive, upon such date, an Option to purchase that number of Shares obtained by
multiplying 6,000 by a fraction, the numerator of which is the difference
obtained by subtracting from 12 the number of whole calendar months that have
elapsed
8
since the date of the previous annual meeting of the Company's shareholders and
the denominator of which is 12; provided, however, that no options shall be
granted to any Outside Director pursuant to Section 8(b)(ii)(C) of this Program
for any calendar year in which such Outside Director has been granted options
under the TriQuint Semiconductor, Inc. 1987 Stock Incentive Program..
(D) The terms of an Option granted pursuant to this Section
8(b)(ii) shall be as follows:
(1) the term of the Option shall be five (5) years;
(2) except as provided in Sections 8(b)(iii), 8(b)(iv)
and 8(b)(v) of this Program, the Option shall be
exercisable only while the Outside Director
remains a director;
(3) the exercise price per share of Common Stock shall
be 100% of the fair market value on the date of
grant of the Option, provided that, with respect
to the Options granted on the date on which the
Company's registration statement on Form S-1 (or
any successor form thereof) is declared effective
by the Securities and Exchange Commission, the
fair market value of the Common Stock shall be the
Price to Public as set forth in the final
prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424 under the
Securities Act of 1933, as amended;
(4) the Option shall become exercisable in
installments cumulatively with respect to
twenty-five percent (25%) of the Optioned Stock
six months after the date of grant and as to an
additional twelve and one-half percent (12.5%) of
the Optioned Stock each calendar quarter
thereafter, so that one hundred percent (100%) of
the Optioned Stock shall be exercisable two years
after the date of grant; provided, however, that
in no event shall any Option be exercisable prior
to obtaining shareholder approval of the Program.
(iii) TERMINATION OF STATUS AS AN EMPLOYEE, CONSULTANT OR
OUTSIDE DIRECTOR. In the event of termination of an Optionee's Continuous
Status as an Employee, Consultant or Outside Director, such Optionee may, but
only within three (3) months (or, for Options not granted pursuant to Section
8(b)(ii) hereof, for such other period of time, not exceeding three (3) months
in the case of an Incentive Stock Option or six (6) months in the case of a
Nonstatutory Stock Option, as is determined by the Administrator, with such
determination in the case of an Incentive Stock
9
Option being made at the time of grant of the Option) after the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), exercise his or her Option
to the extent that the Optionee was entitled to exercise it as of the date of
such termination. To the extent that the Optionee was not entitled to exercise
the Option at the date of such termination, or if the Optionee does not
exercise such Option (which the Optionee was entitled to exercise) within the
time specified herein, the Option shall terminate.
(iv) DISABILITY OF OPTIONEE. Notwithstanding the provisions
of Section 8(b)(iii) above, in the event of termination of an Optionee's
Continuous Status as an Employee, Consultant or Outside Director as a result of
his or her total and permanent disability (as defined in Section 22(e)(3) of the
Code), the Optionee may, but only within six (6) months (or, for Options not
granted pursuant to Section 8(b)(ii) hereof, for such other period of time not
exceeding twelve (12) months as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option) from the date of such termination (but in no event later
than the date of expiration of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent the Optionee was
entitled to exercise it at the date of such termination. To the extent that the
Optionee was not entitled to exercise the Option at the date of termination, or
if the Optionee does not exercise such Option (which the Optionee was entitled
to exercise) within the time specified herein, the Option shall terminate.
(v) DEATH OF OPTIONEE. In the event of the death of an
Optionee:
(A) during the term of the Option, where the Optionee is at
the time of his or her death an Employee, Consultant or Outside Director of the
Company and where such Optionee shall have been in Continuous Status as an
Employee, Consultant or Outside Director since the date of grant of the Option,
the Option may be exercised, at any time within one (1) year following the date
of death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, to the extent that he and she was
entitled to exercise it at the date of death; or
(B) within three (3) months after the termination of
Continuous Status as an Employee, Consultant or Outside Director for any reason
other than for cause or a voluntary termination initiated by the Optionee, the
Option may be exercised, at any time within one (1) year following the date of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that had accrued at the date of termination.
(vi) BUYOUT PROVISIONS. The Administrator may at any time
offer to buy out for a payment in cash or Shares, an Option previously granted
based on such terms and conditions as the Administrator shall establish and
communicate to the Optionee at the time that such offer is made; provided,
however, that the Administrator shall not offer to buy out any Options granted
pursuant to Section 8(b)(ii) of the Program.
10
9. NON-TRANSFERABILITY OF OPTIONS. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such option shall contain such additional terms and conditions as
the Administrator deems appropriate.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to any
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Program but as to
which no Options have yet been granted or which have been returned to the
Program upon cancellation or expiration of an Option, as well as the price per
share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Board shall notify the holder of an Option at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action.
In the event of a merger of the Company with or into another corporation,
or the sale of all or substantially all of the Company's assets, the Option
shall be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the
Board determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Optionee shall have the right to exercise
the Option as to all of the Optioned Stock, including as to Shares as to which
the Option would not otherwise be exercisable. If the Board makes an Option
fully exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of thirty (30) days from the date of such notice,
and the Option will terminate upon the expiration of such period. Provided,
however, that notwithstanding any other provision of this Program, Options
granted pursuant to Section 8(b)(ii) hereof shall, in the event of a merger of
the Company with or into another corporation or the sale of all or substantially
all of the Company's assets, be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation; provided, further, however, that in the event the
successor corporation or a parent or subsidiary of such successor corporation
refuses to so assume or
11
substitute such options, such options shall become fully vested and exercisable
including as to Shares as to which such options would not otherwise be
exercisable. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or asset sale, the option confers the right to
purchase, for each Share of Optioned Stock subject to the Option immediately
prior to the merger or asset sale, the consideration (whether stock, cash, or
other securities or property) received in the merger or asset sale by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
11. TIME OF GRANTING OPTIONS. The date of grant of an Option shall be the
date on which the Administrator makes the determination granting such Option,
except with respect to the date of grant of Options to certain Outside
Directors, which is set by the terms of the Program. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
granted within a reasonable time after the date of such grant.
12. AMENDMENT AND TERMINATION OF THE PROGRAM.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Program.
(b) SHAREHOLDER APPROVAL. The Company shall obtain shareholder
approval of any Program amendment to the extent necessary and desirable to
comply with Section 422 of the Code (or any successor rule or statute or other
applicable law, rule or regulation, including the requirements of any exchange
or quotation system on which the Common Stock is listed or quoted). Such
shareholder approval, if required, shall be obtained in such a manner and to
such a degree as is required by the applicable law, rule or regulation.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Program shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.
13. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended (the "Securities Act"), the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the
12
Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option or making such purchase to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
14. RESERVATION OF SHARES. The Company, during the term of this Program,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Program.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15. OPTION AGREEMENTS. Each Option shall be designated in a written
option agreement as either an Incentive Stock Option or a Nonstatutory Stock
Option. Such agreements shall be subject to amendment from time to time as
shall be determined by the Administrator; provided, however, that agreements
reflecting option grants pursuant to Section 8(b)(ii) hereof shall contain only
the terms and conditions as set forth in this Program.
16. STOCKHOLDER APPROVAL. Continuance of the Program shall be subject to
approval by the stockholders of the Company within twelve months before or after
the date the Program is adopted. Such stockholder approval shall be obtained in
the manner and to the degree required under applicable federal and state law.
13
TRIQUINT SEMICONDUCTOR, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 29, 1997
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
of Shareholders and Proxy Statement, each dated April 11, 1997 and hereby names,
constitutes and appoints Steven J. Sharp and Edward C. V. Winn, or either of
them acting in absence of the other, with full power of substitution, my true
and lawful attorneys and Proxies for me and in my place and stead to attend the
Annual Meeting of the Shareholders of TriQuint Semiconductor, Inc. (the
"Company") to be held at 2:00 p.m. on Thursday, May 29, 1997, and at any
adjournment thereof, and to vote all the shares of Common Stock held of record
in the name of the undersigned on April 1, 1997, with all the powers that the
undersigned would possess if he were personally present.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY. IF NO SPECIFIC
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES NAMED IN
PROPOSAL 1 AND FOR PROPOSALS 2 AND 3.
FOLD AND DETACH HERE
Please mark your votes as indicated in this example /X/
1. Election of Directors
STEVEN J. SHARP
DR. PAUL A. GARY
CHARLES SCOTT GIBSON
E. FLOYD KVAMME
DR. WALDEN C. RHINES
EDWARD F. TUCK
FOR all nominees listed below (except as marked to the contrary below) / /
WITHHOLD AUTHORITY to vote for all nominees listed below / /
(Instructions: To withhold authority to vote for any individual nominee,
strike a line through the nominee's name in the list.)
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
NAMED ABOVE.
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent accountants for the year ending December 31, 1997. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL 2.
FOR / / AGAINST / / ABSTAIN / /
3. To approve an amendment to the TriQuint Semiconductor, Inc. 1996 Stock
Incentive Program to increase the aggregate number of shares of Common Stock
that may be issued thereunder by 400,000 shares to a total of 800,000 shares,
as summarized in the accompanying proxy statement. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF PROPOSAL 3.
FOR / / AGAINST / / ABSTAIN / /
4. Upon such other matters as may properly come before, or incident to the
conduct of the Annual Meeting, the Proxy holders shall vote in such manner as
they determine to be in the best interests of the Company. The Company is not
presently aware of any such matters to be presented for action at the meeting.
I plan to attend the meeting / /
Shareholder (print name)_________________________________________________
Shareholder (sign name)__________________________________________________
Dated ___________________
This Proxy should be marked, dated and signed by the shareholder(s) exactly
as his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenant or as community property, both should sign.