SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant |X|
Filed by a party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
|X| Definitive Proxy Statement Commission Only (as permitted by
|_| Definitive Additional Materials Rule 14a-6(e)(2))
|_| Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
LINEAR TECHNOLOGY CORPORATION
----------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transactions 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:
LINEAR TECHNOLOGY CORPORATION
---------------------------
Notice of Annual Meeting of Stockholders
To Be Held on November 5, 2003
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Linear Technology Corporation, a Delaware corporation (the "Company"), will be
held on November 5, 2003 at 3:00 p.m., local time, at the Company's principal
executive offices, located at 720 Sycamore Drive, Milpitas, California 95035,
for the following purposes:
1. To elect five (5) directors to serve until the next Annual
Meeting of Stockholders and until their successors are elected.
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending June 27, 2004.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record of the Company's Common Stock at the close
of business on September 8, 2003, the record date, are entitled to notice of and
to vote at the Annual Meeting and any adjournment thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the Annual Meeting may vote in person even if such stockholder has
returned a proxy card.
FOR THE BOARD OF DIRECTORS
/s/ Arthur F. Schneiderman
Arthur F. Schneiderman
Secretary
Milpitas, California
September 24, 2003
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
LINEAR TECHNOLOGY CORPORATION
---------------------
PROXY STATEMENT
FOR
2003 ANNUAL MEETING OF STOCKHOLDERS
---------------------
INFORMATION CONCERNING SOLICITATION
AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of
Linear Technology Corporation, a Delaware corporation (the "Company"), for use
at the Annual Meeting of Stockholders to be held November 5, 2003, at 3:00 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 720
Sycamore Drive, Milpitas, California 95035. The telephone number at that
location is (408) 432-1900.
These proxy solicitation materials and the Company's Annual Report to
Stockholders for the year ended June 29, 2003, including financial statements,
were mailed on or about September 24, 2003 to all stockholders entitled to vote
at the Annual Meeting.
Record Date and Voting Securities
Stockholders of record at the close of business on September 8, 2003
(the "Record Date") are entitled to notice of and to vote at the meeting. As of
the Record Date, 314,164,301 shares of the Company's Common Stock, par value
$0.001, were issued and outstanding. No shares of the Company's Preferred Stock
are outstanding.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Company
(Attention: Paul Coghlan, Vice President of Finance and Chief Financial Officer)
a written notice of revocation or a duly executed proxy card bearing a later
date or by attending the Annual Meeting and voting in person.
Voting Rights and Solicitation of Proxies
On all matters other than the election of directors, each share has one
vote. Each stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected (which number is currently set at five) multiplied by
the number of shares held by such stockholder, or may distribute such
stockholder's votes on the same principle among as many candidates as the
stockholder may select. However, no stockholder will be entitled to cumulate
votes unless a stockholder has, prior to the voting, given notice at the meeting
of the stockholder's intention to cumulate votes. If any stockholder gives such
notice, all stockholders may cumulate their votes for the election of directors.
In the event that cumulative voting is invoked, the proxy holders will have the
1
discretionary authority to vote all proxies received by them in such a manner as
to ensure the election of as many of the Board of Directors' nominees as
possible.
The Company will bear the cost of soliciting proxies. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for their expenses in forwarding solicitation material to
beneficial owners. Solicitation of proxies by mail may be supplemented by one or
more of telephone, telegram, facsimile, e-mail or personal solicitation by
directors, officers or regular employees of the Company. No additional
compensation will be paid to these persons for these services.
Quorum; Abstentions; Broker Non-Votes
Votes cast by proxy or in person at the Annual Meeting will be
tabulated by the Inspector of Elections. The Inspector will also determine
whether or not a quorum is present. Except in certain specific circumstances or
as discussed below, the affirmative vote of a majority of shares present in
person or represented by proxy at a duly held meeting at which a quorum is
present is required under Delaware law and the Company's Bylaws for approval of
proposals presented to stockholders. In general, Delaware law also provides that
a quorum consists of a majority of shares entitled to vote, present in person or
represented by proxy at the meeting.
When proxies are properly dated, executed and returned, the shares
represented by those proxies will be voted at the Annual Meeting in accordance
with the instructions of the stockholder. If no instructions are indicated on a
properly executed proxy, the shares represented by that proxy will be voted as
recommended by the Board of Directors. If any other matters are properly
presented for consideration at the Annual Meeting, the persons named in the
enclosed proxy card and acting thereunder will have discretion to vote on those
matters in accordance with their best judgment. The Company does not currently
anticipate that any other matters will be raised at the Annual Meeting.
Pursuant to Delaware law, the Inspector will include shares that are
voted "WITHHELD" or "ABSTAIN" on a particular matter among the shares present
and entitled to vote for purposes of determining the presence or absence of a
quorum for the transaction of business at the Annual Meeting generally, and also
among the shares entitled to vote on that matter (the "Votes Cast"). Broker
non-votes on a particular matter will be counted for purposes of determining the
presence of a quorum, but will not be counted for purposes of determining the
number of "Votes Cast" with respect to the matter on which the broker has
expressly not voted. Accordingly, broker non-votes will not affect the
determination as to whether the requisite approval has been obtained with
respect to a particular matter.
Deadline for Receipt of Stockholder Proposals
Stockholders are entitled to present proposals for action at a
forthcoming meeting if they comply with the requirements of the Company's Bylaws
and the proxy rules established by the Securities and Exchange Commission.
Proposals of stockholders of the Company that are submitted for inclusion in the
proxy statement and form of proxy card for next year's annual meeting must be
received by the Company no later than one hundred twenty (120) days prior to the
one year anniversary date of the mailing of this Proxy Statement. Assuming a
mailing date of September 24, 2003, the deadline for stockholder proposals for
next year's annual meeting will be May 27, 2004.
In addition, under the Company's Bylaws, a stockholder wishing to make
a proposal at next year's annual meeting must submit that proposal to the
Company not less than 90 days prior to the meeting (or, if the
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Company gives less than 100 days notice of the meeting, then within ten days
after that notice). The Company may refuse to acknowledge any proposal not made
in compliance with the foregoing procedure.
The attached proxy card grants the proxy holders discretionary
authority to vote on any matter raised at this year's Annual Meeting. In
addition, assuming a mailing date of September 24, 2003 for this proxy
statement, the proxy holders at next year's annual meeting will have similar
discretionary authority to vote on any matter that is submitted to the Company
after August 10, 2004.
3
PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
The Company's Bylaws currently provide for a board of five directors.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the Company's five nominees named below, all of whom are currently
directors of the Company. In the event that any nominee of the Company is unable
or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any substitute nominee who is designated by the
current Board of Directors to fill the vacancy. It is not expected that any
nominee listed below 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 as
will ensure 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. In any event, the proxy holders cannot vote for more than
five persons. The term of office of each person elected as a director will
continue until the next Annual Meeting of Stockholders or until his successor
has been elected and qualified.
The names of the nominees, and certain information about them as of
September 8, 2003, are set forth below.
Name Of Nominee Age Principal Occupation Director Since
- ------------------------------- -------- ---------------------------------------------------- --------------------
Robert H. Swanson, Jr......... 65 Chairman and Chief Executive Officer of the Company 1981
David S. Lee.................. 66 Chairman, Cortelco Systems Holding Corp. 1988
Leo T. McCarthy............... 73 President, The Daniel Group 1994
Richard M. Moley.............. 64 Former President and Chief Executive Officer, 1994
StrataCom, Inc.
Thomas S. Volpe .............. 52 Chief Executive Officer, Volpe Investments LLC 1984
There are no family relationships among the Company's directors and
executive officers.
Mr. Swanson, a founder of the Company, has served as Chairman and Chief
Executive Officer since April 1999. From the Company's incorporation in
September 1981 until April 1999, Mr. Swanson served as President and Chief
Executive Officer. Mr. Swanson has also served as a director of the Company
since its incorporation. From August 1968 to July 1981, he was employed in
various positions at National Semiconductor Corporation, a manufacturer of
integrated circuits, including Vice President and General Manager of the Linear
Integrated Circuit Operation and Managing Director in Europe.
Mr. Lee is Chairman of the Boards of eOn Communication Corp., Cortelco
and Cidco Communications, and a Regent of the University of California. Mr. Lee
co-founded Qume Corporation in 1973 and served as Executive Vice-President of
Qume until it was acquired by ITT Corporation in 1978. After the acquisition,
Mr. Lee held the positions of Executive Vice President of ITT Qume until 1981,
and President of ITT Qume through 1983. From 1983 to 1985, he served as Vice
President of ITT and as Group Executive and Chairman of its Business Information
Systems Group. In 1985, he became President and Chairman of Data Technology
Corp. ("DTC"), and in 1988 DTC acquired and merged with Qume. Currently, Mr. Lee
is a member of the Board of Directors of ESS Technology Inc., iBasis Inc.,
Accela.com and Daily Wellness Co. Mr. Lee also serves as a member of the
California Chamber of Commerce and Honorary President of Asian Cultural
Teachings. Mr. Lee served as an adviser to Presidents George Bush and Bill
4
Clinton on the Advisory Committee on Trade Policy and Negotiation (Office of the
U.S. Trade Representative/Executive Office of the President) and to Governor
Pete Wilson on the California Economic Development Corporation (CalEDC) and the
Council on California Competitiveness. Mr. Lee is a past Commissioner of the
California Postsecondary Education Commission, as well as having founded and
served as Chairman of the Chinese Institute of Engineers, the Asian American
Manufacturers' Association and the Monte Jade Science and Technology
Association.
Mr. McCarthy has served since January 1995 as President of The Daniel
Group, a partnership engaged in international trade and other investment
opportunities. Mr. McCarthy retired from elective office in 1994 after twelve
years as Lieutenant Governor of the State of California. His primary
responsibility as Lieutenant Governor was to help businesses start and grow
through his role as chair of the California Commission for Economic Development.
One major area of focus for Mr. McCarthy was and still remains international
trade and investment, particularly involving Pacific Rim markets. Mr. McCarthy
serves as a director on the board of Forward Funds, which is a mutual fund. He
also serves as Vice Chair of the Board of Accela, Inc., a privately held
software company.
Mr. Moley served as Chairman, President and Chief Executive Officer of
StrataCom, Inc., a network systems company, from June 1986 until its acquisition
by Cisco Systems, Inc., a provider of computer internetworking solutions, in
July 1996. Mr. Moley served as Senior Vice President and Board Member of Cisco
Systems until November 1997, when he became a consultant and private investor.
Mr. Moley served in various executive positions at ROLM Corporation, a
telecommunications company, from 1973 to 1986. Prior to joining ROLM, he held
management positions in software development and marketing at Hewlett-Packard
Company. Mr. Moley serves as a director of Netro, Echelon Corporation and
Spirent, plc, a British company.
Mr. Volpe has served as Chief Executive Officer of Volpe Investments
LLC since July 2001. From December 1999 to June 2001, Mr. Volpe served as
Chairman of Prudential Volpe Technology Group. Mr. Volpe served as Chief
Executive Officer of Volpe Brown Whelan & Company, LLC (formerly Volpe, Welty &
Company), a private investment banking and risk capital firm, from its founding
in April 1986 until its acquisition by Prudential Securities in December 1999.
Until April 1986, he was President and Chief Executive Officer of Hambrecht &
Quist Incorporated, an investment banking firm with which he had been affiliated
since 1981.
Board Meetings And Committees
The Board of Directors of the Company held a total of four meetings
during the fiscal year ended June 29, 2003. No director attended fewer than 75%
of the meetings of the Board of Directors and the Board committees upon which
such director served. The Board of Directors has an Audit Committee and a
Compensation Committee. The Board of Directors has no nominating committee or
any committee performing similar functions.
The Audit Committee of the Board of Directors currently consists of
directors Lee, McCarthy, Moley and Volpe, and held a total of four meetings
during the last fiscal year. The Audit Committee is governed by a written
charter that it has adopted. The Audit Committee recommends engagement of the
Company's independent auditors, and is primarily responsible for approving the
services performed by the Company's independent auditors and for reviewing and
evaluating the Company's accounting principles and its system of internal
accounting controls. Each member of the Company's Audit Committee is
"independent" as defined under Nasdaq's listing standards in effect as of the
date of this proxy statement.
5
The Compensation Committee of the Board of Directors currently consists
of directors Lee, McCarthy, Moley and Volpe, and held a total of four meetings
during the last fiscal year. The Committee reviews and approves the Company's
executive compensation policy, including the salaries and target bonuses of the
Company's executive officers, and administers the Company's stock plans.
Director Compensation
The Company currently pays each non-employee director an annual
retainer of $20,000 and a fee of $1,500 for each meeting of the Board of
Directors attended. Directors are generally eligible to receive options under
the Company's stock option plans. For the fiscal year ended June 29, 2003,
Messrs. Lee, McCarthy, Moley and Volpe each received an option to purchase
20,000 shares at an exercise price of $25.05. Each of these options vests as to
100% of the shares subject to the option one year from the date of grant.
Vote Required and Recommendation of Board of Directors
The five nominees receiving the highest number of affirmative votes of
the shares entitled to be voted will be elected as directors. Votes "withheld"
will be counted for purposes of determining the presence or absence of a quorum
for the transaction of business at the meeting, but have no other legal effect
upon election of directors under Delaware law.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE NOMINEES SET FORTH ABOVE.
6
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has selected Ernst & Young LLP, independent
auditors, to audit the financial statements of the Company for the year ending
June 27, 2004, and recommends that the stockholders vote for ratification of
such appointment. Although action by stockholders is not required by law, the
Board of Directors believes that it is desirable to request approval of this
selection by the stockholders. In the event of a negative vote on such
ratification, the Board of Directors will reconsider its selection. Ernst &
Young LLP has audited the Company's financial statements since the fiscal year
ended June 30, 1982. Representatives of Ernst & Young LLP are expected to be
present at the Annual Meeting, will have the opportunity to make a statement and
are expected to be available to respond to appropriate questions from
stockholders.
Fees Billed To The Company By Ernst & Young LLP During The Fiscal Year Ended
June 29, 2003
Audit Fees
Audit fees billed to the Company by Ernst & Young LLP during the fiscal
year ended June 29, 2003, for the audit of the Company's annual financial
statements included in the Company's 2003 Annual Report on Form 10-K, the review
of the Company's interim financial statements included in the Company's
quarterly reports on Form 10-Q, statutory audits required internationally and
other regulatory filings and consultations regarding generally accepted
accounting principals during fiscal 2003, totaled $236,000 as compared to
$194,000 in fiscal 2002.
Audit-Related Fees
The Company did not engage Ernst & Young LLP to provide any
audit-related services during fiscal 2003 or 2002.
Tax Fees
Fees billed to the Company by Ernst & Young, LLP during the Company's
fiscal year ended June 29, 2003 for domestic and international tax compliance
and tax advice and planning services totaled $171,000 as compared to $185,000 in
fiscal 2002.
All Other Fees
Fees billed to the Company by Ernst & Young LLP during the Company's
fiscal year ended June 29, 2003 for all other non-audit services, which were
primarily related to services associated with the Company's expatriate program,
totaled $42,000 as compared to $15,000 in fiscal 2002. The audit committee of
the Board has determined that the non-audit services provided by Ernst & Young
LLP are compatible with maintaining Ernst & Young LLP's independence.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR"
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING JUNE 27, 2004.
7
BENEFICIAL SECURITY
OWNERSHIP OF DIRECTORS, EXECUTIVE
OFFICERS AND CERTAIN OTHER
BENEFICIAL OWNERS
Security Ownership
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's Common Stock, as of the
Record Date, by (a) each beneficial owner of more than 5% of the Company's
Common Stock, (b) the Company's Chief Executive Officer and the Company's four
other most highly compensated executive officers during fiscal 2003
(collectively, the "Named Executive Officers"), (c) each director of the
Company, and (d) all directors and executive officers of the Company as a group.
Except as otherwise indicated, each person has sole voting and investment power
with respect to all shares shown as beneficially owned, subject to community
property laws where applicable.
Shares Beneficially Percentage
Beneficial Owner Owned Beneficially Owned
- --------------------------------------------------------------------- ------------------- ------------------
Janus Capital Management LLC (1)..................................... 34,407,276 11.0%
100 Fillmore Street
Denver, CO 80206-4923
Capital Research and Management Company (2).......................... 24,467,150 7.8
333 South Hope Street
Los Angeles, CA 90071
Robert H. Swanson, Jr. (3)......................................... 1,613,676 *
David Bell (4)....................................................... 191,761 *
Clive B. Davies (5)................................................. 728,756 *
Paul Coghlan (6)..................................................... 714,322 *
Lothar Maier (7)..................................................... 246,120 *
Thomas S. Volpe (8)................................................. 188,000 *
David S. Lee (9).................................................... 92,000 *
Leo T. McCarthy (10)................................................ 221,200 *
Richard M. Moley (11)............................................... 92,000 *
All directors and executive officers as a group (17 persons) (12).... 7,196,393 2.3
* Less than one percent of the outstanding Common Stock.
(1) Shares beneficially owned as of July 31, 2003, based on information
reported to the Company by Janus Capital Corporation on September 8,
2003.
(2) Based on information reported on Schedule 13G/A filed with the Securities
and Exchange Commission on February 13, 2003.
(3) Includes (i) 51,196 shares issued in the name of Robert H. Swanson, Jr.
and Sheila L. Swanson, Trustees of the Robert H. Swanson, Jr. and Sheila
L. Swanson Trust U/T/A dated May 27, 1976, (ii) 104,402 shares issued in
the name of Robert H. Swanson, Jr. Trustee, Robert H. Swanson, Jr.
Annuity, Trust 1, U/A 6/17/02, (iii) 104,402 shares issued in the name of
Robert H. Swanson, Jr. Trustee, Sheila L. Swanson Annuity, Trust 1, U/A
6/17/02 and (iv) 1,353,676 shares issuable pursuant to options
exercisable within 60 days of September 8, 2003.
(4) Includes (i) 339 shares issued in the name of David Bundy Bell and Bonnie
Jean Bell, Trustees of the Bell Revocable Trust dated September 30, 1997
and (ii) 191,422 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
(5) Includes 636,256 shares issued in the name of Clive B. Davies and Carol
B. Davies, Trustees of the Davies Living Trust dated September 9, 1994.
Also includes 92,500 shares issuable pursuant to options exercisable
within 60 days of September 8, 2003.
(6) Includes 641,874 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
(7) Includes 246,120 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
(8) Consists of 188,000 shares issuable pursuant to options exercisable
within 60 days of September 8, 2003.
(9) Consists of 92,000 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
8
(10) Includes 18,000 shares issued in the name of Leo and Jacqueline McCarthy
LLC and 10,000 shares issued in the name of the McCarthy Grandchildren's
Trust. Also includes 193,200 shares issuable pursuant to options
exercisable within 60 days of September 8, 2003.
(11) Consists of 92,000 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
(12) Includes 5,513,256 shares issuable pursuant to options exercisable within
60 days of September 8, 2003.
SECURITIES AUTHORIZED FOR
ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of June 29, 2003 about
shares of the Company's Common Stock that may be issued upon exercise of
outstanding options, warrants and rights under all of the Company's existing
equity compensation plans, including the 1981 Incentive Stock Option Plan, 1986
Employee Stock Purchase Plan, the 1988 Stock Option Plan, 1996 Incentive Stock
Option Plan and the 2001 Nonstatutory Stock Option Plan, and the number of
shares of Common Stock that remain available for future issuance under these
plans:
- -------------------------------- ----------------------------- ---------------------------- ----------------------------------
Plan category Number of securities Weighted-average exercise Number of securities remaining
issuable upon exercise of price of outstanding available for future issuance
outstanding options, options, warrants and under equity compensation plans
warrants and rights rights (excluding securities issuable
upon exercise of outstanding
options, warrants and rights)
- -------------------------------- ----------------------------- ---------------------------- ----------------------------------
Equity compensation plans
approved by security holders 31,537,490 $22.76 6,567,440
- -------------------------------- ----------------------------- ---------------------------- ----------------------------------
Equity compensation plans not
approved by security holders
9,983,978 (1) $30.34 19,969,646
- -------------------------------- ----------------------------- ---------------------------- ----------------------------------
Total 41,521,468 $24.58 26,537,086
- -------------------------------- ----------------------------- ---------------------------- ----------------------------------
(1) Issued pursuant to the Company's 2001 Nonstatutory Stock Option Plan, which
does not require the approval of and has not been approved by stockholders. See
description of the 2001 Nonstatutory Stock Option Plan below.
1996 Incentive Stock Option Plan
The Company's 1996 Incentive Stock Option Plan (the "1996 Plan") was
adopted by the Board of Directors in July 1996 and was approved by the Company's
stockholders in November 1996. The 1996 Plan provides for the granting to
employees, including officers, of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
for the granting to employees, directors and consultants of non-statutory stock
options. Incentive stock options may be granted only to employees, including
employee directors and officers. Section 162(m) of the Code places limits on the
deductibility for federal income tax purposes of compensation paid to certain
executive officers of the Company. In order to preserve the Company's ability to
deduct the compensation income associated with options granted to such persons,
the 1996 Plan provides that no employee, director or consultant may be granted,
in any fiscal year of the Company, options to purchase more than 500,000 shares
of Common Stock. Notwithstanding this limit, however, in connection with an
individual's initial employment with the Company, he or she may be granted
options to purchase up to an additional 500,000 shares of Common Stock. The
9
exercise price of an option is determined at the time the option is granted;
provided that, generally in the case of an incentive stock option, the exercise
price may not be less than 100% of the fair market value of the Common Stock on
the date the option is granted. Options granted under the 1996 Plan generally
vest at a rate of 1/10th of the shares subject to the option after each six
month period of continued service to the Company; however, the vesting schedule
can change on a grant-by-grant basis. The 1996 Plan provides that vested options
may be exercised for 3 months after termination of employment and for up to 12
months after termination of employment as a result of death or disability. The
Company may select alternative periods of time for exercise upon termination of
service. The 1996 Plan permits options to be exercised with cash, check, other
shares of our stock, consideration received by it under a "cashless exercise"
program or certain other forms of consideration. In the event that the Company
merges with or into another corporation, or sell substantially all of its
assets, the 1996 Plan provides that each outstanding option will be assumed or
substituted for by the successor corporation. If such substitution or assumption
does not occur, each option will fully vest and become exercisable. Unless
terminated sooner, the 1996 Plan will terminate automatically in July 2006,
although any options then outstanding under the plan will remain outstanding and
exercisable for their term. As of the date of this proxy statement, there are
32,000,000 shares of common stock reserved for issuance under the 1996 Plan, of
which 20,944,255 are subject to outstanding options and 6,282,990 shares remain
available for future grant.
1981 Incentive Stock Option Plan and 1988 Stock Option Plan
The 1981 Incentive Stock Option Plan (the "1981 Plan") and 1988 Stock
Option Plan (the "1988 Plan") have terms substantially the same as the terms of
the 1996 Plan. The Company no longer grants options under either of these plans.
As of the date of this proxy statement, no options are outstanding under the
1981 Plan and 9,360,270 shares of common stock are subject to outstanding
options under the 1988 Plan.
The 1986 Employee Stock Purchase Plan
The 1986 Employee Stock Purchase Plan (the "Purchase Plan") was adopted
by the Board of Directors in April 1986 and approved by the stockholders in May
1986. A total of 8,400,000 shares of the Company's Common Stock have been
reserved for issuance under the Purchase Plan, of which 885,666 remain available
for future issuance as of the date of this proxy statement. The Purchase Plan,
which is intended to qualify under Section 423 of the Code, permits eligible
employees to purchase Common Stock through payroll deductions at the end of each
offering period. The Purchase Plan is implemented by consecutive offering
periods of approximately six months each, ending on the last trading day of
fiscal months April and October of each year. The purchase price per share of
the shares offered under the Purchase Plan in a given offering period is the
lower of 85% of the fair market value of the Common Stock on the first day of
the offering period or 85% of the fair market value of the Common Stock on the
last day of the offering period. The purchase price for the shares is
accumulated by payroll deductions during the offering period. The deductions
must be at least 5%, but may not exceed 10%, of a participant's eligible
compensation for a given offering period.
All persons who are employed by the Company on a given enrollment date
and who are customarily employed by the Company for at least twenty hours per
week and more than five months per calendar year are eligible to participate in
the Purchase Plan. Participation in the Purchase Plan ends automatically on
termination of employment with the Company, and a participant may discontinue
his or her participation in the Purchase Plan at any time during the offering
period. The Purchase Plan operates through the granting on the first day of each
offering period of an option to purchase shares. The maximum number of shares
placed under option in an offering period is determined by dividing the amount
of the participant's total payroll
10
deductions that will be accumulated prior to the end of the offering period by a
purchase price based on the fair market value of the common stock on the first
day of the offering period, provided that the maximum number of shares subject
to such option may not exceed 300 shares per offering period. Notwithstanding
the foregoing, no employee will be permitted to subscribe for shares under the
Purchase Plan if, immediately after such subscription, the employee would own 5%
or more of the voting power or value of all classes of stock of the Company or
of any of its subsidiaries, nor will any employee be permitted to participate to
the extent such employee could buy under all employee stock purchase plans of
the Company more than $25,000 worth of stock in any calendar year. Unless
terminated sooner, the Purchase Plan will terminate 20 years from its effective
date.
2001 Nonstatutory Stock Option Plan
In fiscal 2001, the Board of Directors approved the 2001 Nonstatutory
Stock Option Plan (the "2001 Plan"). The 2001 Plan provides for the granting of
non-qualified stock options to employees and consultants at the fair market
value of our common stock as of the date of grant. The Company cannot grant
options under the 2001 Plan to directors or officers of the Company. Options
granted under the 2001 Plan generally vest at a rate of 1/10th of the shares
subject to the option after each six month period of continued service to the
Company; however, the vesting schedule can change on a grant-by-grant basis. The
2001 Plan provides that vested options may be exercised for 3 months after
termination of employment and for up to 12 months after termination of
employment as a result of death or disability. The Company may select
alternative periods of time for exercise upon termination of service. The 2001
Plan permits options to be exercised with cash, check, other shares of our
stock, consideration received by it under a "cashless exercise" program or
certain other forms of consideration. In the event that the Company merges with
or into another corporation, or sell substantially all of our assets, the 2001
Plan provides that each outstanding option will be assumed or substituted for by
the successor corporation. If such substitution or assumption does not occur,
each option will fully vest and become exercisable. As of the date of this proxy
statement, there are 30,000,000 shares of common stock reserved for issuance
under the 2001 Plan, of which 10,569,688 are subject to outstanding options and
19,326,845 shares remain reserved for future issuance.
11
EXECUTIVE OFFICER COMPENSATION
The following table sets forth all compensation received by the Named
Executive Officers for services rendered to the Company in all capacities, for
the last three fiscal years ended June 29, 2003:
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------------------------ --------------
Other Annual Securities All Other
Compensation Underlying Compensation
Name and Principal Position Year Salary ($) Bonus ($) (1) ($) Options (#) ($) (2)
- ---------------------------------- ------ ----------- -------------- ------------ --------------- -------------
Robert H. Swanson, Jr............ 2003 334,751 1,352,127 239,556(3) 381,400 17,112
Chairman and Chief Executive 2002 302,491 1,125,445 204,930(3) -- 15,980
Officer 2001 302,975 3,169,878 -- 700,000 25,417
Clive B. Davies (4).............. 2003 291,279 914,637 -- 186,220 16,606
President 2002 263,270 798,735 -- -- 15,635
2001 277,119 2,305,594 -- 195,000 21,863
Paul Coghlan...................... 2003 287,886 803,447 -- 146,690 15,859
Vice President, Finance and 2002 248,250 669,508 -- -- 15,290
Chief Financial Officer 2001 268,460 1,915,592 -- 145,000 21,540
David B. Bell (4)................. 2003 200,129 471,155 -- 78,890 15,448
Vice President, Power 2002 181,721 355,981 -- -- 13,195
Business Unit 2001 181,482 886,732 -- 80,000 27,963
Lothar Maier...................... 2003 263,846 485,992 -- 100,060 15,139
Vice President and Chief 2002 228,423 368,640 -- -- 14,450
Operating Officer 2001 244,428 987,203 -- 75,000 18,825
- --------------------
(1) Includes cash profit sharing and cash bonuses earned for the fiscal year,
whether accrued or paid.
(2) Includes insurance premiums paid by the Company under its life insurance
program. Also includes 401(k) profit sharing distributions earned during
the fiscal year.
(3) Represents the imputed value of personal use of the Company's airplane by
Mr. Swanson during the applicable fiscal year.
(4) Mr. Davies retired as President of the Company effective as of June 30,
2003. Mr. Bell was promoted to the position of President of the Company
as of such date.
12
Option Grants in Last Fiscal Year
The following table shows, as to the Named Executive Officers,
information concerning stock options granted during the year ended June 29,
2003.
Individual Grants
-----------------------------------------------------
Percent of Potential Realizable Value at
Total Assumed Annual Rates of Stock
Number of Options Exercise Price Appreciation for Option
Securities Granted to Price Term(3)
Underlying Employees Per --------------------------------
Options in Fiscal Share Expiration
Name Granted (#) Year(1) ($/Sh) Date(2) 5% ($) 10% ($)
- ---------------------------- ----------- ---------- -------- ---------- -------------- ---------------
Robert H. Swanson, Jr....... 381,400 4.72% 25.05 7/26/2012 15,561,120.00 24,779,558.00
Clive B. Davies............. 186,220 2.31% 25.05 7/26/2012 7,597,776.00 12,098,713.00
Paul Coghlan................ 146,690 1.82% 25.05 7/26/2012 5,984,952.00 9,530,449.00
David B. Bell............... 78,890 0.97% 25.05 7/26/2012 3,218,712.00 5,125,483.00
Lothar Maier................ 100,060 1.24% 25.05 7/26/2012 4,082,448.00 6,500,898.00
- --------------------
(1) The Company granted to employees in fiscal 2003 options to purchase
8,075,530 shares of Common Stock.
(2) Options may terminate before their expiration upon the termination of
optionee's status as an employee, director or consultant, the optionee's
death or disability or an acquisition of the Company.
(3) Potential realizable value assumes that the stock price increases from
the date of grant until the end of the option term (10 years) at the
annual rate specified (5% and 10%) over the option term. Annual
compounding results in total appreciation of approximately 63% (at 5% per
year) and 159% (at 10% per year). If the price per share of the Company's
Common Stock were to increase from the prices at the date of the above
grants ($25.05 per share) over the next 10 years, the resulting stock
prices at 5% and 10% appreciation would be approximately $40.80 per share
at 5% and approximately $64.97 per share at 10%, respectively. The 5% and
10% assumed annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future stock price
growth.
Option Exercises And Holdings
The following table provides information with respect to option
exercises in fiscal 2003 by the Named Executive Officers and the value of such
officers' unexercised options at June 29, 2003.
Aggregated Option Exercises in Last Fiscal Year-End Option Values
- --------------------------------------------------------------------------------
Number of Shares
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options at
Shares Fiscal Year-End (#) Fiscal Year-End ($) (2)
Acquired On Value --------------------------- ---------------------------
Name Exercise (#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------- ------------ -------------- ----------- ------------- ----------- -------------
Robert H. Swanson, Jr......... 53,000 1,533,702 969,245 362,155 17,160,241 2,454,292
Clive B. Davies............... 298,000 8,523,172 370,964 185,256 5,217,696 1,238,259
Paul Coghlan................... 75,000 2,263,729 536,046 140,644 10,874,044 957,897
David B. Bell.................. 4,000 118,930 123,181 113,709 1,471,897 1,011,738
Lothar Maier................... -- -- 164,886 135,174 445,543 719,624
- --------------------
(1) Market value of underlying securities on the exercise date, minus the
exercise price.
(2) Value is based on the last reported sale price of the Common Stock on the
Nasdaq National Market of $32.17 per share on June 27, 2003 (the last
trading day for fiscal 2003), minus the exercise price.
13
Employment Agreements
In January 2002, the Company entered into employment agreements with
Mr. Swanson, its Chairman and Chief Executive Officer, and with Messrs. Davies
and Coghlan, each a Named Executive Officer.
Employment Agreement with the Chairman and Chief Executive Officer
Mr. Swanson's employment agreement provides that he will receive an
annual base salary of $345,000, which is subject to annual adjustments by the
Compensation Committee, and bonuses pursuant to his participation in the
Company's 1996 Senior Executive Bonus Plan and Key Employee Incentive Bonus
Plan.
If Mr. Swanson is involuntarily terminated by the Company for any
reason other than cause (as defined in his employment agreement) or if he
voluntarily resigns as an employee and as Chairman of the Board, then 100% of
his stock options and restricted stock will immediately vest, and he will
receive continued payments of one year's base salary and bonus. In addition, the
Company will pay Mr. Swanson's group health and dental plan continuation
coverage premiums until the earlier of 18 months from his termination and such
time as Mr. Swanson and his dependents are covered by similar plans of a new
employer.
If Mr. Swanson voluntarily resigns as Chief Executive Officer other
than for good reason, but agrees, at the request of the Board of Directors to
remain as Chairman of the Board with duties requiring one to two days per week
of Mr. Swanson's time, Mr. Swanson will receive his existing salary and bonus
pro rated based on the number of full days Mr. Swanson performs services as
Chairman throughout the year, but in no event more than 50% of the last full
annual bonus received by Mr. Swanson. In such case, Mr. Swanson's benefits will
continue, and his stock options and restricted stock will vest at twice the rate
as if he had continued as Chief Executive Officer. After such time, if Mr.
Swanson is involuntarily terminated as Chairman of the Board for any reason
other than cause or if he voluntarily resigns, the severance benefits described
in the preceding paragraph will be payable to Mr. Swanson.
If there is a change of control of the Company (as defined in his
employment agreement), Mr. Swanson will receive similar benefits to those he is
entitled to receive if he is involuntarily terminated by the Company other than
for cause or if he voluntarily resigns as an employee and Chairman of the Board,
including payment of one year's salary and bonus in a lump sum within five days
of the change of control.
If Mr. Swanson should die while employed by the Company, 50% of his
then unvested restricted stock and options will vest immediately.
The Company has a fractional ownership in two different aircraft
operated by NetJets, Inc. So long as Mr. Swanson is either Chief Executive
Officer or Chairman of the Board, he is entitled to use the Company's airplane
for personal use for up to 35% of the available flight time in any year. To the
extent use of the airplane results in imputed taxable income to Mr. Swanson, the
Company will make additional payments to him so that the net effect is the same
as if no income were imputed to him.
If payments to Mr. Swanson under his employment agreement (together
with any other payments or benefits Mr. Swanson receives) would trigger the
excise tax provisions of Sections 280G and 4999 of the Code, Mr. Swanson will be
paid an additional amount so that he receives, net of the excise taxes, the
amount he would otherwise have been entitled to receive in their absence.
14
Employment Agreements with Two of the Named Executive Officers and
Robert Dobkin
The employment agreements with Messrs. Davies and Coghlan, each a Named
Executive Officer, and with Mr. Dobkin provide for base annual salaries of
$305,000, $285,000 and $280,000, respectively, subject to certain annual
adjustments by the Board of Directors. Each of these executives is also entitled
to bonuses pursuant to the Company's 1996 Senior Executive Bonus Plan and Key
Employee Incentive Bonus Plan.
If one of these executives is involuntarily terminated by the Company
for any reason other than cause (as defined in the employment agreements) or if
he voluntarily resigns with good reason (as defined in the employment
agreements), then his stock options and restricted stock will immediately vest
to the extent they would have vested had the executive remained employed by the
Company for an additional six months, and he will receive continued payments of
base salary and bonus for six months. In addition, the Company will pay the
executive's group health and dental plan continuation coverage premiums until
the earlier of six months from his termination and such time as the executive
and his dependents are covered by similar plans of a new employer. Mr. Davies
voluntarily resigned as President of the Company effective as of June 30, 2003.
Such resignation was not for "good reason" (as defined in his employment
agreement); therefore, the foregoing severance benefits under his employment
agreement were not triggered.
If, after a change of control (as defined in the employment
agreements), one of the above executives is involuntarily terminated for any
reason other than cause, or if he voluntarily resigns with good reason, then 50%
of his then unvested stock options and restricted stock will immediately vest,
and he will receive continued payments of one year's base salary and 50% of his
bonus. In addition, the Company will pay the executive's group health and dental
plan continuation coverage premiums until the earlier of twelve months from his
termination and such time as the executive and his dependents are covered by
similar plans of a new employer.
If the executive should die while employed by the Company, 50% of his
then unvested restricted stock and options will vest immediately.
If payments to one of the above executives under his employment
agreement (together with any other payments or benefits the executive receives)
would trigger the excise tax provisions of Sections 280G and 4999 of the Code,
and such payments are less than 3.59 multiplied by the executive's "base amount"
(as defined in Section 280G), then the payments will be reduced so that no
portion of the payments will be subject to excise tax under Section 4999. If
payments under the employment agreement (together with any other payments or
benefits the executive receives) would exceed 3.59 multiplied by the executive's
"base amount," then the executive will be paid an additional amount so that he
receives, net of the excise taxes, the amount he would otherwise have been
entitled to receive in their absence.
Compensation Committee Interlocks and Insider Participation
No executive officer of the Company served on the compensation
committee of another entity or on any other committee of the board of directors
of another entity performing similar functions during the last fiscal year.
15
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who own
more than ten percent of the Company's common stock, to file reports of
ownership on Form 3 and of changes in ownership on Forms 4 or 5 with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc. Executive officers, directors and ten percent stockholders are
also required by Commission rules to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon its review of copies of such forms and amendments, if
any, received by the Company, or written representations from certain reporting
persons that no Forms 5 were required for such persons, the Company believes
that its executive officers, directors, and ten percent stockholders complied
with all applicable Section 16(a) filing requirements during the fiscal year
ended June 29, 2003, except that a Form 4 report with respect to a transaction
was inadvertently filed late on behalf of Richard Nickson.
16
PERFORMANCE GRAPH
The following graph shows a five-year comparison of cumulative total
stockholder return, calculated on a dividend-reinvested basis, for Linear
Technology Corporation, the Nasdaq National Market, the S&P 500/Semiconductors &
Semiconductor Equipment Index (the "SPZ81") and the S&P 500. As a result of
Standard & Poor index reclassification, the S&P Electronics Index used by the
Company in prior years is no longer available. The graph assumes that $100 was
invested in the Company's Common Stock, in the Nasdaq National Market, in the
SEPI and in the S&P 500 on the last trading day of the Company's 1998 fiscal
year. Note that historic stock price performance is not necessarily indicative
of future stock price performance.
[The following descriptive data is supplied in accordance with
Rule 304(d) of Regulation S-T.]
Year LLTC Nasdaq SPZ81 S&P 500
------------ ---- ------ ---- -------
June 1998 100 100 100 100
June 1999 224 142 121 179
June 2000 427 209 128 405
June 2001 296 114 108 179
June 2002 211 77 87 112
June 2003 219 86 86 112
17
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AUDIT COMMITTEE REPORT
The following is the Audit Committee's report submitted to the Board of
Directors for the fiscal year ended June 29, 2003.
The Audit Committee of the Board of Directors has:
o reviewed and discussed the Company's audited financial statements
for the fiscal year ended June 29, 2003 with the Company's
management;
o discussed with Ernst & Young LLP, the Company's independent
auditors, the materials required to be discussed by Statement of
Auditing Standard 61; and
o reviewed the written disclosures and the letter from Ernst & Young
LLP required by Independent Standards Board No. 1 and has
discussed with Ernst & Young LLP its independence.
Based on the Audit Committee's review of the matters noted above and
its discussions with the Company's independent auditors and the Company's
management, the Audit Committee has recommended to the Board of Directors that
the Company's financial statements for the fiscal year ended June 29, 2003 be
included in the Company's 2003 Annual Report on Form 10-K.
Respectfully submitted by:
THE AUDIT COMMITTEE
David S. Lee
Leo T. McCarthy
Richard M. Moley
Thomas S. Volpe
- --------------------------------------------------------------------------------
18
- --------------------------------------------------------------------------------
COMPENSATION COMMITTEE REPORT
Introduction
The Compensation Committee of the Board of Directors is composed only
of non-employee directors. It is responsible for reviewing and recommending for
approval by the Board of Directors the Company's compensation practices,
executive salary levels and variable compensation programs, both cash-based and
equity-based. The Committee generally determines base salary levels for
executive officers of the Company at or about the start of each fiscal year and
determines actual bonuses at the end of each six-month fiscal period based upon
Company and individual performance.
Compensation Philosophy
The Committee has adopted an executive pay-for-performance philosophy
covering all executive officers, including the Chief Executive Officer. This
philosophy emphasizes variable compensation in order to align executive
compensation with the Company's business objectives and performance and to
attract, retain and reward executives who contribute both to the short-term and
long-term success of the Company. Pay is sufficiently variable that
above-average performance results in above-average total compensation, and
below-average performance for the Company or the individual results in
below-average total compensation. The focus is on corporate performance and
individual contributions toward that performance.
Compensation Program
The Company has a comprehensive compensation program which consists of
cash compensation, both fixed and variable, and equity-based compensation. The
program has four principal components, which are intended to attract, retain,
motivate and reward executives who are expected to manage both the short-term
and long-term success of the Company. These components are:
Cash-Based Compensation
Base Salary--Base salary is predicated on industry and peer group
comparisons and on performance judgments as to the past and expected future
contribution of the individual executive officer. In general, salary increases
are made based on median increases in salaries for similar executives of
similar-size companies in the high technology industry.
Profit Sharing--Profit sharing payments are distributed semi-annually
to all employees, including executives, from a profit sharing pool. The amount
of the pool is largely determined by the magnitude of sales and operating income
for the six-month period. This pool is distributed to all eligible employees
based on the ratio of their individual salary to total salaries for all
employees. A portion of this profit sharing is paid directly into a 401(k)
retirement plan for all United States employees.
Bonuses--The Company has a discretionary key employee incentive pool
pursuant to which executive officers and a limited number of key employees may
receive semi-annual cash bonuses. Targets for sales growth and operating income
as a percentage of sales influence the size of the pool. Individual payments are
made based on the Company's achievement of these targets and upon the
individual's personal and departmental performance.
- --------------------------------------------------------------------------------
19
- --------------------------------------------------------------------------------
In 1996, the Company adopted the 1996 Senior Executive Bonus Plan to
facilitate, under Section 162(m) of the Internal Revenue Code, the federal
income tax deductibility of compensation paid to the Company's most highly
compensated executive officers. In fiscal 2003, the participants included
Messrs. Swanson, Davies, Coghlan and Maier. In fiscal 2004, the plan will
include the Chief Executive Officer and each of the Company's four other most
highly compensated executive officers. The maximum amount payable to any
individual in any one year under the plan is $5 million.
Equity-Based Compensation
Stock Options--Stock options are granted periodically to provide
additional incentive to executives and other key employees to work to maximize
long-term total return to stockholders. The options generally vest over a
five-year period to encourage option holders to continue in the employ of the
Company. Over 43% of worldwide employees have received stock options. In
granting options, the Compensation Committee takes into account the number of
shares and outstanding options already held by the individual.
Chief Executive Officer Compensation
The Committee uses the same factors and criteria described above for
compensation decisions regarding the Chief Executive Officer.
Compensation Limitations for Tax Purposes
The Committee has considered the potential impact of Section 162(m) of
the Internal Revenue Code adopted under the federal Revenue Reconciliation Act
of 1993. Section 162(m) generally disallows a tax deduction for any
publicly-held corporation for individual compensation exceeding $1 million in
any taxable year for any of the Named Executive Officers, unless compensation is
performance-based. The Company's policy is to qualify, to the extent reasonable,
its executive officers' compensation for deductibility under applicable tax
laws. In 1996, the Company implemented the 1996 Senior Executive Bonus Plan in
order to qualify certain bonus payments to the Named Executive Officers as
performance-based compensation under Section 162(m). The Committee believes that
the implementation of the 1996 Senior Executive Bonus Plan enables the Company
to compensate its executive officers in accordance with its pay-for-performance
philosophy while maximizing the deductibility of such compensation. However, the
Committee recognizes that the loss of a tax deduction may be necessary in some
circumstances.
Summary
The Committee believes that a fair and motivating compensation program
has played a critical role in the success of the Company. The Committee reviews
this program on an ongoing basis to evaluate its continued effectiveness.
Respectfully submitted by:
THE COMPENSATION COMMITTEE
David S. Lee
Leo T. McCarthy
Richard M. Moley
Thomas S. Volpe
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20
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting.
If any other matters properly come before the meeting or any adjournment or
postponement thereof, 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
Dated: September 24, 2003
21
EDGAR APPENDIX A
PROXY
LINEAR TECHNOLOGY CORPORATION
2003 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Linear Technology Corporation, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated September 24, 2003 and hereby
appoints Robert H. Swanson, Jr. and Paul Coghlan, or either of them, as
attorneys-in-fact, each with full power, on behalf and in the name of the
undersigned, to represent the undersigned at the 2003 Annual Meeting of
Stockholders of Linear Technology Corporation to be held on November 5, 2003, at
3:00 p.m. local time, at the Company's principal executive offices, located at
720 Sycamore Drive, Milpitas, California 95035, and at any postponement or
adjournment thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present, on
the matters set forth on the reverse side, and, in their discretion, upon such
other matter or matters which may properly come before the meeting and any
adjournment thereof.
This proxy will be voted as directed or, if no contrary direction is indicated,
will be voted FOR the election of the specified nominees as directors, FOR the
ratification of the appointment of Ernst & Young LLP as independent auditors,
and as said proxies deem advisable on such other matters as may properly come
before the meeting.
- ------------------------- ----------------------
SEE REVERSE SIDE CONTINUED AND TO BE SEE REVERSE SIDE
- ------------------------- SIGNED ON REVERSE SIDE ----------------------
- --------------------------------------------------------------------------------
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF THE SPECIFIED NOMINEES AS DIRECTORS, FOR THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS,
AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THIS
MEETING.
1. To elect five (5) directors to serve until the next Annual
Meeting of Stockholders and until their successors are elected.
FOR WITHHELD
ALL FROM ALL
Nominees: Robert H. Swanson, Jr.; David S. Lee; Leo T. McCarthy; [ ] [ ]
Richard M. Moley; Thomas S. Volpe
[ ] For all nominees exactly except as noted ________________________________
2. To ratify the appointment of Ernst & Young LLP as independent auditors of
the Company for the fiscal year ending June 27, 2004. FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, upon such other matter or matters as may properly come
before the meeting and any postponement or adjournment thereof.
This proxy should be marked, dated, signed by the stockholder(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 tenants or as community property, both should sign.
Signature: ____________ Date:___________ Signature: ____________ Date:__________
- --------------------------------------------------------------------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON YOU ARE
URGED TO SIGN AND PROMPTLY MAIL THIS PROXY IN THE RETURN ENVELOPE
SO THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING.
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