SCHEDULE 14A INFORMATION
(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
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-12
CIRRUS LOGIC, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] 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 transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
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Notes:
[Cirrus Logic Logo]
David D. French Cirrus Logic, Inc.
President and 4210 S. Industrial Drive
Chief Executive Officer Austin, Texas 78744
To our Stockholders:
I am pleased to invite you to attend the annual meeting of stockholders of
Cirrus Logic, Inc. to be held on Thursday, September 28, 2000 at 2:00 p.m. at
the Omni Austin Hotel South Park, 4140 Governor's Row, Austin, Texas 78744.
Details regarding admission to the meeting and the business to be conducted
are more fully described in the accompanying Notice of Annual Meeting and Proxy
Statement.
Your vote is important. Whether or not you plan to attend the annual
meeting, I hope you will vote as soon as possible. You may vote over the
Internet, as well as by telephone, or by mailing a proxy card. Voting over the
Internet, by phone or by written proxy will ensure your representation at the
annual meeting if you do not attend in person. Please review the instructions
on the proxy card regarding each of these voting options.
We appreciate your support of and continued interest in Cirrus Logic, Inc.
Sincerely,
David D. French
President and Chief Executive Officer
2000 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING................................................... 1
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING..... 2
Why am I receiving these materials?...................................... 2
What information is contained in these materials?........................ 2
What proposals will be voted on at the meeting?.......................... 2
What is Cirrus's voting recommendation?.................................. 2
What shares owned by me can be voted?.................................... 2
What is the difference between holding shares as a stockholder of record
and as a beneficial owner?.............................................. 2
How can I vote my shares in person at the meeting?....................... 3
How can I vote my shares without attending the meeting?.................. 3
Can I change my vote?.................................................... 3
How are votes counted?................................................... 3
What is the voting requirement to approve each of the proposals?......... 4
What does it mean if I receive more than one proxy or voting instruction
card?................................................................... 4
How can I obtain an admission ticket for the meeting?.................... 4
Where can I find the voting results of the meeting?...................... 4
What happens if additional proposals are presented at the meeting?....... 4
What classes of shares are entitled to be voted?......................... 4
What is the quorum requirement for the meeting?.......................... 4
Is cumulative voting permitted for the election of directors?............ 5
Who will count the votes?................................................ 5
Is my vote confidential?................................................. 5
Who will bear the cost of soliciting votes for the meeting?.............. 5
May I propose actions for consideration at next year's annual meeting of
stockholders or nominate individuals to serve as directors?............. 5
BOARD STRUCTURE AND COMPENSATION........................................... 6
DIRECTOR COMPENSATION ARRANGEMENTS AND STOCK OWNERSHIP GUIDELINES.......... 7
PROPOSALS TO BE VOTED ON................................................... 8
PROPOSAL NO. 1
ELECTION OF DIRECTORS.................................................... 8
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS.................................. 10
PROPOSAL NO. 3
APPROVAL OF THE AMENDMENT TO THE 1996 STOCK PLAN......................... 11
Equity Incentive Awards................................................ 11
Share Reserve.......................................................... 11
Eligibility............................................................ 12
Valuation.............................................................. 12
Discretionary Option Grants............................................ 12
Stock Purchase Rights.................................................. 12
General Provisions..................................................... 13
Stock Awards........................................................... 13
Federal Income Tax Consequences........................................ 14
i
Deductibility of Executive Compensation............................... 15
Accounting Treatment.................................................. 15
New Plan Benefits..................................................... 16
Stockholder Approval.................................................. 16
OTHER MATTERS........................................................... 16
OWNERSHIP OF SECURITIES................................................... 16
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
EXECUTIVE COMPENSATION................................................... 23
FORM 10-K................................................................. 28
ii
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CIRRUS LOGIC, INC.
11210 South Industrial Drive
Austin, Texas 78744
(512) 445-7222
Notice of Annual Meeting of Stockholders
TIME 2:00 P.M. on Thursday, September 28, 2000
PLACE Omni Austin Hotel South Park
4140 Governor's Row
Austin, TX 78744
ITEMS OF BUSINESS (1) To elect directors.
(2) To ratify the appointment of Ernst & Young LLP as
independent accountants.
(3) To approve an amendment to the Cirrus Logic, Inc. 1996
Stock Plan increasing the number of shares of Cirrus
Logic, Inc. common stock available for grant under the
plan by 3,500,000 shares.
(4) To consider such other business as may properly come
before the meeting.
RECORD DATE You are entitled to vote if you were a stockholder at the
close of business on Friday, August 4, 2000.
MEETING ADMISSION Two cut-out admission tickets are included on the back cover
of this proxy statement. Please contact the Cirrus Corporate
Secretary at our headquarters if you need additional
tickets. The meeting will begin promptly at 2 o'clock.
VOTING BY PROXY Please submit a proxy as soon as possible so that your
shares can be voted at the meeting in accordance with your
instructions. You may submit your proxy (1) over the
Internet, (2) by telephone, or (3) by mail. For specific
instructions, please refer to the Questions and Answers
beginning on page 2 of this proxy statement and the
instructions on the proxy card.
For the Board of Directors
David D. French
President and Chief Executive
Officer
This notice of meeting and proxy statement and accompanying proxy card are
being distributed to stockholders on or about August 11, 2000.
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1
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Q: Why am I receiving these materials?
A: The Board of Directors (the "Board") of Cirrus Logic, Inc., a Delaware
corporation (sometimes referred to as the "Company" or "Cirrus"), is
providing these proxy materials for you in connection with the annual
meeting of stockholders to take place on September 28, 2000. As a
stockholder, you are invited to attend the meeting and are entitled to and
requested to vote on the proposals described in this proxy statement.
Q: What information is contained in these materials?
A: The information included in this proxy statement relates to the proposals
to be voted on at the meeting, the voting process, the compensation of
directors and our most highly paid officers, and certain other required
information. Our 2000 Annual Report to Stockholders for the fiscal year
ended March 25, 2000 is also enclosed.
Q: What proposals will be voted on at the meeting?
A: There are three proposals scheduled to be voted on at the meeting:
. The election of directors;
. The approval of an amendment to the Cirrus Logic, Inc. 1996 Stock Plan
increasing the number of shares of Company common stock available for
grant under the Plan by 3,500,000 shares;
. The ratification of the appointment of Ernst & Young LLP as independent
auditors of the company.
Q: What is Cirrus's voting recommendation?
A: Our Board of Directors recommends that you vote your shares "FOR" each of
the nominees to the Board and "FOR" each of the other proposals.
Q: What shares owned by me can be voted?
A: All shares owned by you as of the close of business on August 4, 2000, (the
"Record Date"), may be voted by you. These shares include (1) shares held
directly in your name as the stockholder of record, including shares
purchased through Cirrus's Employee Stock Purchase Plan, and (2) shares
held for you as the beneficial owner through a stockbroker or bank.
Q: What is the difference between holding shares as a stockholder of record and
as a beneficial owner?
A: Most Cirrus stockholders hold their shares through a stockbroker, bank or
other nominee rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those owned
beneficially.
Stockholder of Record
If your shares are registered directly in your name with Cirrus's transfer
agent, Equiserve, you are considered, with respect to those shares, the
stockholder of record, and these proxy materials are being sent directly to
you by Cirrus. As the stockholder of record, you have the right to grant
your voting proxy directly to Cirrus or to vote in person at the meeting.
Cirrus has enclosed a proxy card for you to use.
Beneficial Owner
If your shares are held in a stock brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in street
name, and these proxy materials are being forwarded to you by
2
your broker or nominee which is considered, with respect to those shares,
the stockholder of record. As the beneficial owner, you have the right to
direct your broker how to vote and are also invited to attend the meeting.
However, since you are not the stockholder of record, you may not vote
these shares in person at the meeting. Your broker or nominee has enclosed
a voting instruction card for you to use in directing the broker or nominee
how to vote your shares.
Q: How can I vote my shares in person at the meeting?
A: Shares held directly in your name as the stockholder of record may be voted
in person at the annual meeting. If you choose to do so, please bring the
enclosed proxy card or proof of identification.
Even if you currently plan to attend the annual meeting, we recommend that
you also submit your proxy as described below so that your vote will be
counted if you later decide not to attend the meeting. Shares held in
street name may be voted in person by you only if you obtain a signed proxy
from the record holder giving you the right to vote the shares.
Q: How can I vote my shares without attending the meeting?
A: Whether you hold shares directly as the stockholder of record or
beneficially in street name, you may direct your vote without attending the
meeting. You may vote by granting a proxy or, for shares held in street
name, by submitting voting instructions to your broker or nominee. In most
instances, you will be able to do this over the Internet, by telephone or
by mail. Please refer to the summary instructions below and those included
on your proxy card or, for shares held in street name, the voting
instruction card included by your broker or nominee.
BY INTERNET--If you have Internet access, you may submit your proxy from
any location in the world by following the "Vote by Internet" instructions
on the proxy card.
BY TELEPHONE--If you live in the United States or Canada, you may submit
your proxy by following the "Vote by Phone" instructions on the proxy card.
BY MAIL--You may vote by mail by signing your proxy card or, for shares
held in street name, the voting instruction card included by your broker or
nominee and mailing it in the enclosed, postage prepaid and addressed
envelope. If you provide specific voting instructions, your shares will be
voted as you instruct. If you sign but do not provide instructions, your
shares will be voted as described below in "How Are Votes Counted?"
Q: Can I change my vote?
A: You may change your proxy instructions at any time prior to the vote at the
annual meeting. For shares held directly in your name, you may accomplish
this change by granting a new proxy bearing a later date (which
automatically revokes the earlier proxy) or by attending the annual meeting
and voting in person. Attendance at the meeting will not cause your
previously granted proxy to be revoked unless you specifically so request.
For shares held beneficially by you, you may accomplish this change by
submitting new voting instructions to your broker or nominee.
Q: How are votes counted?
A: In the election of directors, you may vote "FOR" all of the nominees or
your vote may be "WITHHELD" with respect to one or more of the nominees.
For the other proposals, you may vote "FOR," "AGAINST" or "ABSTAIN." If you
"ABSTAIN," it has the same effect as a vote "AGAINST." If you sign your
proxy card or broker voting instruction card with no further instructions,
your shares will be voted in accordance with the recommendations of the
Board ("FOR" all of the Company's nominees to the Board "FOR" all other
items described in this proxy statement and in the discretion of the proxy
holders on any other matters that properly come before the meeting).
3
Q: What is the voting requirement to approve each of the proposals?
A: In the election of directors, the seven persons receiving the highest
number of "FOR" votes will be elected. All other proposals require the
affirmative "FOR" vote of a majority of those shares present and entitled
to vote. If you are a beneficial owner and do not provide the stockholder
of record with voting instructions, your shares may constitute broker non-
votes, as described in "WHAT IS THE QUORUM REQUIREMENT FOR THE MEETING?"
below. In tabulating the voting result for any particular proposal, shares
that constitute broker non-votes are not considered entitled to vote on
that proposal.
Q: What does it mean if I receive more than one proxy or voting instruction
card?
A: It means your shares are registered differently or are in more than one
account. Please provide voting instructions for all proxy and voting
instruction cards you receive.
Q: How can I obtain an admission ticket for the meeting?
A: Two cut-out admission tickets are included on the back of this proxy
statement. A limited number of tickets are available for additional joint
owners. To request additional tickets, please contact the Cirrus Corporate
Secretary at our headquarters. If you forget to bring an admission ticket,
you will be admitted to the meeting only if you are listed as a stockholder
of record as of the close of business on August 4, 2000 and bring proof of
identification. If you hold your shares through a stockbroker or other
nominee and fail to bring an admission ticket, you will need to provide
proof of ownership by bringing either a copy of the voting instruction card
provided by your broker or a copy of a brokerage statement showing your
share ownership as of August 4, 2000.
Q: Where can I find the voting results of the meeting?
A: We will announce preliminary voting results at the meeting and publish
final results in our quarterly report on Form 10-Q for the third quarter of
the fiscal year ending March 31, 2001.
Q: What happens if additional proposals are presented at the meeting?
A: Other than the 3 proposals described in this proxy statement, we do not
expect any matters to be presented for a vote at the annual meeting. If you
grant a proxy, the persons named as proxy holders, David D. French,
Cirrus's President and Chief Executive Officer, and Robert W. Fay, Cirrus's
Vice President, Chief Financial Officer and Secretary, will have the
discretion to vote your shares on any additional matters properly presented
for a vote at the meeting. If for any unforeseen reason any of our nominees
is not available as a candidate for director, the persons named as proxy
holders will vote your proxy for such other candidate or candidates as may
be nominated by the Board of Directors.
Q: What classes of shares are entitled to be voted?
A: Each share of our common stock outstanding as of the close of business on
August 4, 2000, the Record Date, is entitled to one vote on all items being
voted upon at the annual meeting other than election of directors. On the
Record Date, we had approximately 66,271,342 shares of common stock issued
and outstanding.
Q: What is the quorum requirement for the meeting?
A: The quorum requirement for holding the meeting and transacting business is
a majority of the outstanding shares entitled to be voted and present in
person or represented by proxy. Both abstentions and broker non-votes are
counted as present for the purpose of determining the presence of a quorum.
Abstentions are also counted as shares present and entitled to be voted.
Broker non-votes, however, are not counted as
4
shares present and entitled to be voted with respect to the matter on which
the broker has expressly not voted. Thus, broker non-votes will not affect
the outcome of any of the matters being voted upon at the meeting.
Generally, broker non-votes occur when shares held by a broker for a
beneficial owner are not voted with respect to a particular proposal
because the broker has not received voting instructions from the beneficial
owner and the broker lacks discretionary voting power to vote such shares.
Q: Is cumulative voting permitted for the election of directors?
A: In the election of directors, you are not entitled to cumulate your vote.
Q: Who will count the votes?
A: A representative of Equiserve, Cirrus's transfer agent, will tabulate the
votes and act as the inspector of the election.
Q: Is my vote confidential?
A: Proxy instructions, ballots and voting tabulations that identify
individual stockholders are handled in a manner that protects your voting
privacy. Your vote will not be disclosed either within Cirrus or to third
parties except (1) as necessary to meet applicable legal requirements, (2)
to allow for the tabulation of votes and certification of the vote, or (3)
to facilitate a successful proxy solicitation by our Board. Occasionally,
stockholders provide written comments on their proxy card, which are then
forwarded to Cirrus management.
Q: Who will bear the cost of soliciting votes for the meeting?
A: Cirrus will pay the entire cost of preparing, assembling, printing,
mailing and distributing these proxy materials. If you choose to access
the proxy materials and/or vote over the Internet or by telephone,
however, you are responsible for Internet access or telephone charges you
may incur. In addition to the mailing of these proxy materials, the
solicitation of proxies or votes may be made in person, by telephone or by
electronic communication by our directors, officers and employees, who
will not receive any additional compensation for such solicitation
activities. We also have hired Corporate Investor Communications, Inc.
("CIC") to assist us in the distribution of proxy materials and the
solicitation of votes. We will pay CIC a fee of $6,500 plus expenses for
these services. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation materials to stockholders.
Q: May I propose actions for consideration at next year's annual meeting of
stockholders or nominate individuals to serve as directors?
A: You may submit proposals for consideration at future stockholder meetings,
including director nominations.
Stockholder Proposals: In order for a stockholder proposal, including a
director nominating to be considered for inclusion in Cirrus's proxy
statement for next year's annual meeting, the written proposal must be
received by Cirrus no later than Thursday, April 13, 2001. Such proposals
also will need to comply with Securities and Exchange Commission
regulations regarding the inclusion of stockholder proposals in company-
sponsored proxy materials. Similarly, in order for a stockholder proposal
to be raised from the floor during next year's annual meeting, written
notice must be received by Cirrus no later than Thursday, April 13, 2001
and shall contain such information as required under our Bylaws.
Copy of Bylaw Provisions: You may contact the Cirrus Corporate Secretary at
our headquarters for a copy of the relevant Bylaw provisions regarding the
requirements for making stockholder proposals and nominating director
candidates.
5
BOARD STRUCTURE AND COMPENSATION
Our Board has 7 directors and the following three committees: (1) Audit, (2)
Compensation and (3) Governance. The membership and the function of each
committee are described below. During the fiscal year ended March 25, 2000, the
Board held 10 meetings and each director attended at least 75% of all Board and
applicable committee meetings.
Name of Director Audit Compensation Governance
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Non-Employee
Directors:
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D. James Guzy X X
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Walden C. Rhines X* X
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Robert H. Smith X* X X
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Alfred S. Teo X X
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Employee
Directors:
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Michael L.
Hackworth X*
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Suhas S. Patil
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David D. French
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Number of
Meetings in
Fiscal Year
Ended March 25,
2000 1 2 6
X = Committee member; * = Chair
The Audit Committee
The Audit Committee is composed of two non-employee directors who review our
auditing, accounting, financial reporting and internal control functions and
select our independent accountants. In addition, the committee monitors the
non-audit services of our independent accountants. In discharging its duties,
the committee:
. Reviews and approves the scope of the annual audit and the independent
accountants' fees;
. Meets independently with our independent accountants and our senior
management; and
. Reviews the general scope of our accounting, financial reportings,
annual audit and matters relating to internal control systems, as well
as the results of the annual audit.
Compensation Committee
The Compensation Committee determines, and approves and reports to the Board
on, all elements of compensation for our elected officers including bonuses, as
described below in pages 23 through 26 of this proxy statement.
Governance Committee
The Governance Committee meets or takes written action on special projects
designated by the Board from time to time. In addition, the Governance
Committee performs the functions traditionally delegated to a Nominating
Committee, in that it proposes a slate of directors for election by our
stockholders at each annual meeting and candidates to fill any vacancies on the
Board. See "May I propose actions for consideration at next year's annual
meeting of stockholders or nominate individuals to serve as directors?", above.
6
DIRECTOR COMPENSATION ARRANGEMENTS AND STOCK OWNERSHIP GUIDELINES
The following table provides information on Cirrus's compensation and
reimbursement practices during fiscal year ended March 25, 2000 for non-
employee directors, as well as the range of compensation paid to non-employee
directors who served the entire fiscal year. Directors who are employed by
Cirrus, do not receive any compensation for their Board activities.
DIRECTOR COMPENSATION TABLE
FOR FISCAL YEAR ENDED MARCH 25, 2000(1)
Quarterly Director Retainer.......................................... $6,250
Board Meeting Attendance Fees (per day in attendance)................ $2,000
Committee Meeting Attendance Fees.................................... $ 250
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(1) All directors served the entire fiscal year ended March 25, 2000.
7
PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1
ELECTION OF DIRECTORS
There are seven nominees for election to our Board this year. All of the
nominees have served as directors since the last annual meeting. Information
regarding the business experience of each nominee is provided below. All
directors are elected annually to serve until the next annual meeting and until
their respective successors are elected. There are no family relationships
among our executive officers and directors.
Our Board of Directors recommends a vote FOR the election to the Board of
each of the following nominees.
Vote Required
The seven persons receiving the highest number of votes represented by
outstanding shares of common stock present or represented by proxy and entitled
to vote will be elected. Votes withheld from any director are counted for
purposes of determining the presence or absence of a quorum for the transaction
of business, but have no other effect.
Michael L. Hackworth Michael L. Hackworth is currently Chairman of the Board
Director since 1985 of Cirrus Logic, Inc. Prior to becoming Chairman, he
Age 59 served as President and Chief Executive Officer since
January 1985. Before joining the Company, Mr. Hackworth
spent 14 years at Signetics Corp., a subsidiary of N.V.
Philips, where he held various management positions, his
last one being Senior Vice President. Prior to joining
Signetics (now Philips Semiconductors), he served in a
number of general management and marketing and sales
management positions at Motorola and Fairchild
Semiconductor.
Suhas S. Patil Suhas S. Patil, was a founder of Cirrus Logic's
Director since 1984 predecessor company in 1981, and a founder of Cirrus
Age 55 Logic in 1984. Dr. Patil was appointed Chairman Emeritus
in July 1997. Prior to that, he served as Chairman of the
Board since 1984. He served as Vice President, Research
and Development until March 1990 and Executive Vice
President, Products and Technology through April 1997.
Dr. Patil was an Associate Professor of Computer Science
at the University of Utah from 1976 to 1980 and an
Assistant Professor of Electrical Engineering and
Computer Science at the Massachusetts Institute of
Technology from 1970 to 1975. He invented the
Storage/Logic Array during his work at MIT and the
University of Utah.
David D. French David D. French is the President and Chief Executive
Director since 1999 Officer of Cirrus Logic, Inc. Mr. French joined the
Age 44 Company in June 1998 as President and Chief Operating
Officer, and assumed additional duties with his
appointment as Chief Executive Officer in February 1999.
As President/CEO, French oversees worldwide operations
and corporate functions. Formerly a Vice President and
General Manager for Analog Devices, Mr. French has worked
in the semiconductor industry for more than 20 years,
mostly as a manager of businesses focused on embedded
applications. Prior to joining Analog Devices in 1988,
Mr. French held management posts at Texas Instruments and
Fairchild Semiconductor.
D. James Guzy D. James Guzy is Chairman, President, and CEO of SRC
Director since 1984 Computer Corporation, a developer of super-computer
Age 64 systems. He is also Chairman of the Board of PLX
Technology, Incorporated. Since 1969 he has served as
president of the Arbor Company, a limited partnership
involved in the electronics and computer industry. Mr.
Guzy is also a director of Intel Corporation, Micro
Component Technology, Inc., Novellus Systems, Inc., Davis
Selected Group of Mutual Funds, Alliance Capital
Management Technology Fund, and a member of the boards of
directors of several private technology companies.
8
Walden C. Rhines Walden C. Rhines is the President and Chief Executive
Director since 1995 Officer and a director of Mentor Graphics Corporation, a
Age 53 maker of electronic design automation products.
Previously, he was employed by Texas Instruments Inc. from
1972 to 1993, most recently as Executive Vice President,
Semiconductor Group. He is also a director of TriQuint
Semiconductor.
Robert H. Smith Robert H. Smith is the Executive Vice President, Finance
Director since 1990 and Administration, Chief Financial Officer and Secretary
Age 63 of Novellus Systems, Inc., a capital equipment
manufacturer. Prior to joining Novellus in 1995, he served
as an industry consultant since 1990. He was President of
Maxwell Communication Corporation North America, a
printing, publishing, telecommunications and information
management company, from August 1988 to July 1990. Prior
to that, he was Executive Vice President, Finance and
Chief Financial Officer of R. R. Donnelley & Sons Company,
a printing organization from 1982 to 1986. He was employed
by Control Data from 1973 to 1982, most recently as Vice
President having responsibility for all acquisitions and
joint ventures for the company. He was a Vice President of
Memorex Corporation from 1969 to 1973.
Alfred S. Teo Alfred S. Teo is the Chairman and Chief Executive Officer
Director since 1998 of the Sigma Plastics Group, Chairman and Chief Executive
Age 54 Officer of Red Line Express, and Alpha Technologies, Inc.
He is also a director of Fleet Bank, N.A. and Musicland
Stores Corporation. Mr. Teo is a Trustee of St. Joseph's
Hospital and of Stevens Institute of Technology.
9
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has appointed Ernst & Young
LLP as Cirrus's independent accountants to audit Cirrus's consolidated
financial statements for the fiscal year ending March 31, 2001. During fiscal
year ended March 25, 2000, Ernst & Young served as Cirrus's independent
accountants and also provided certain tax services. A representative of Ernst &
Young LLP is expected to attend the meeting and be available to respond to
questions and, if they desire, to make a statement.
Our Board of Directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as Cirrus's independent accountants for the
fiscal year ending March 31, 2001. If the appointment is not ratified, our
Board will consider whether it should select other independent accountants.
Vote Required
Ratification of the appointment of Ernst & Young LLP as Cirrus's independent
accountants for fiscal year ended March 31, 2001 requires the affirmative vote
of a majority of the shares of common stock present or represented by proxy and
entitled to vote at the meeting.
10
PROPOSAL NO. 3
APPROVAL OF THE AMENDMENT TO THE 1996 STOCK PLAN
The Company's stockholders are being asked to approve an amendment to the
1996 Stock Plan (the "1996 Plan"), which will increase the number of shares of
the Company's common stock reserved for issuance under the 1996 Plan by an
additional 3,500,000 shares.
The board of directors believes the amendment is necessary to assure that a
sufficient reserve of the Company's common stock remains available for issuance
under the 1996 Plan to allow the Company to continue to utilize equity
incentives to attract and retain the services of key individuals essential to
the Company's long-term growth and financial success. Equity incentives play a
significant role in the Company's efforts to remain competitive in the market
for talented individuals, and the Company relies on such incentives as means to
attract and retain highly qualified individuals in the positions vital to the
Company's success.
The following is a summary of the principal features of the 1996 Plan, as
most recently amended. Any stockholder who wishes to obtain a copy of the
actual plan document may do so upon written request to the Company at 4210 S.
Industrial Drive, Austin, Texas 78744.
The amendment was adopted by the board of directors on July 27, 2000,
subject to stockholder approval at the annual meeting.
Equity Incentive Awards
Two types of awards may be made under the 1996 Plan: (i) stock options and
(ii) stock purchase rights. The principal features of each award are described
below. The Compensation Committee of the Board has the exclusive authority to
grant stock options and issue stock purchase rights to the Company's executive
officers and non-employee Board members and also has the authority to make
option grants and issue stock purchase rights to all other eligible
individuals. However, the Board may at any time appoint a secondary committee
of one or more Board members to have separate but concurrent authority with the
Compensation Committee to make option grants and issue stock purchase rights to
individuals other than the Company's executive officers and non-employee Board
members.
The term 1996 Plan Administrator, as used in this summary, will mean the
Compensation Committee and any secondary committee, to the extent each such
entity is acting within the scope of its administrative jurisdiction under the
1996 Plan.
Share Reserve
12,000,000 shares of the Company's common stock has been reserved for
issuance over the term of the 1996 Plan, including the 3,500,000 shares of
common stock subject to this Proposal.
As of August 4, 2000, 6,516,009 shares of common stock were subject to
outstanding options under the 1996 Plan, 570,330 shares of common stock had
been issued under the 1996 Plan, and 4,913,961 shares of common stock remained
available for future issuance, assuming stockholder approval of this Proposal.
No employee may receive option grants for more than 400,000 shares of common
stock in the aggregate per fiscal year other than in connection with the
employee's initial employment, for which option grants to purchase an
additional 800,000 shares may be authorized. Stockholder approval of this
Proposal will also constitute a reapproval of the 400,000-share limitation for
purposes of Internal Revenue Code Section 162(m). The aggregate number of
shares subject to stock purchase rights may not exceed 1,200,000 shares.
The shares of common stock issuable under the 1996 Plan may be drawn from
shares of the Company's authorized but unissued shares of such common stock or
from shares of such common stock reacquired by the Company, including shares
repurchased on the open market.
11
In the event any change is made to the outstanding shares of common stock by
reason of any recapitalization, stock dividend, stock split, combination of
shares, exchange of shares or other change in corporate structure effected
without the Company's receipt of consideration, appropriate adjustments will be
made to the securities issuable (in the aggregate and per employee) under the
1996 Plan and the securities and the exercise price per share in effect under
each outstanding option.
Eligibility
Employees (including officers) and independent consultants in the service of
the Company or its parent and subsidiaries (whether now existing or
subsequently established) are eligible to participate in the 1996 Plan. Non-
employee Board members who are paid only a director's fee or who the Company
does not compensate for their services are ineligible to participate in the
1996 Plan.
As of August 4, 2000, 11 executive officers, 4 non-employee Board members
and approximately 1,402 other employees and consultants were eligible to
participate in the 1996 Plan.
Valuation
The fair market value per share of common stock on any relevant date under
the 1996 Plan will be deemed to be equal to the closing selling price per share
on that date on the Nasdaq National Market. On August 4, 2000 the fair market
value per share determined on such basis was $20.50.
Discretionary Option Grants
The 1996 Plan Administrator has complete discretion under the 1996 Plan to
determine which eligible individuals are to receive option grants, the time or
times when those grants are to be made, the number of shares subject to each
such grant, the status of any granted option as either an incentive stock
option or a non-statutory option under the federal tax laws, the vesting
schedule (if any) to be in effect for the option grant and the maximum term for
which any granted option is to remain outstanding.
Each granted option will have an exercise price per share determined by the
1996 Plan Administrator, but the exercise price will not be less than the fair
market value of the shares on the grant date. No granted option will have a
term in excess of ten (10) years, and the option will generally become
exercisable in one or more installments over a specified period of service
measured from the grant date. However, one or more options may be structured so
that they will be immediately exercisable for any or all of the option shares;
the shares acquired under those options will be subject to repurchase by the
Company, at the exercise price paid per share, if the optionee ceases service
with the Company prior to vesting in those shares.
Upon cessation of service, the optionee will have a limited period of time
in which to exercise any outstanding option to the extent exercisable for
vested shares. The 1996 Plan Administrator will have complete discretion to
extend the period following the optionee's cessation of service during which
his or her outstanding options may be exercised and/or to accelerate the
exercisability or vesting of such options in whole or in part. Such discretion
may be exercised at any time while the options remain outstanding, whether
before or after the optionee's actual cessation of service.
Stock Purchase Rights
Stock Purchase Rights will be issued under the 1996 Plan at a price per
share determined by the 1996 Plan Administrator. A stock purchase right gives
the purchaser a period of no longer than 90 days from the date of grant to
accept the offer. A stock purchase right is accepted by the execution of a
restricted stock purchase agreement between the Company and the purchaser.
Unless the 1996 Plan Administrator determines otherwise, the restricted stock
purchase agreement shall give the Company a repurchase option exercisable upon
the voluntary or involuntary termination of the purchaser's employment or
consulting relationship with the
12
company for any reason (including death and disability). The purchase price for
any shares repurchased by the company shall be the original price paid by the
purchaser. The repurchase option lapses at a rate determined by the
Administrator.
General Provisions
Acceleration
In the event that the Company is acquired by merger or asset sale, each
outstanding option that is not to be assumed or replaced by the successor
corporation will automatically accelerate in full, and all unvested shares
outstanding under options or stock purchase rights will immediately vest,
except to the extent the Company's repurchase rights with respect to those
shares are to be assigned to the successor corporation.
In the event of the proposed dissolution or liquidation of the Company, the
1996 Plan Administrator has the discretion to accelerate outstanding options or
stock purchase rights for a period ending ten (10) days prior to the
transaction.
The acceleration of vesting in the event of a change in the ownership or
control of the Company may be seen as an anti-takeover provision and may have
the effect of discouraging a merger proposal, a takeover attempt or other
efforts to gain control of the Company.
Financial Assistance
The 1996 Plan Administrator may provide for payment of consideration to
exercise outstanding options with promissory notes, shares of common stock
(owned for more than six months (6) months), reduction of Company indebtedness
to optionee, a same day exercise/sale program through a designated broker or
any other valid legal consideration.
Amendment and Termination
The Board may amend or modify the 1996 Plan at any time, subject to any
required stockholder approval pursuant to applicable laws and regulations.
Unless sooner terminated by the Board, the 1996 Plan will terminate on the
earliest of (i) May 20, 2006, (ii) the date on which all shares available for
issuance under the 1996 Plan have been issued as fully-vested shares or (iii)
the termination of all outstanding options in connection with certain changes
in control or ownership of the Company.
Stock Awards
The table below shows, as to (i) each director and nominee for director;
(ii) each of the executive officers named in the Summary Compensation Table of
the Executive Compensation and Related Information section of this Proxy
Statement and (iii) each of the other persons and groups indicated, the number
of shares of common stock subject to option grants made under the 1996 Plan
from March 28, 1999 through August 4, 2000, together with the weighted average
exercise price payable per share. In addition, the table provides information
regarding grants of restricted stock purchase rights during the same period.
13
OPTION TRANSACTIONS
Weighted
Average
Number of Exercise
Shares Price
Underlying Per
Options Share
Name and Position Granted (#) ($)
- ----------------- ----------- --------
David D. French....................................... 275,000 $12.375
Chairman of the Board, Chief Executive Officer, and
Director Nominee
Glenn C. Jones........................................ 105,000(1) 6.054
Advisor and Former Vice President Finance, Chief
Financial Officer and Treasurer
Arthur Smith.......................................... 75,000 8.063
Former Vice President & General Manager--Optical
Storage Division
Henry M. Josefczyk.................................... 0 N/A
Former Senior Vice President--Worldwide Sales
Terry Leeder.......................................... 200,000 10.6406
Vice President--Worldwide Sales
Suhas Patil........................................... 0 N/A
Chairman Emeritus and Director
Patrick V. Boudreau................................... 70,000 10.5536
Senior Vice President--Human Resources
Michael L. Hackworth.................................. 0 N/A
Director Nominee
D. James Guzy......................................... 0 N/A
Director Nominee
Walden C. Rhines...................................... 0 N/A
Director Nominee
Robert H. Smith....................................... 0 N/A
Director Nominee
Alfred S. Teo......................................... 0 N/A
Director Nominee
All current executive officers as a group (11)........ 1,240,000 12.004
All current non-employee directors as a group (4)..... 20,000 9.000
All employees, including current officers who are not
executive officers, as a group (1,396)............... 5,135,475 11.883
- --------
(1) Pursuant to a Stock Purchase Right issued to Mr. Jones on April 20, 1999,
Mr. Jones received, at par value, 50,000 shares of restricted stock and
these shares vested 50% on the six-month anniversary, October 20, 1999,
and 100% on the one-year anniversary of the date of grant.
Federal Income Tax Consequences
Option Grants
Options granted under the 1996 Plan may be either incentive stock options
which satisfy the requirements of Section 422 of the Internal Revenue Code or
non-statutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as follows:
Incentive Options. No taxable income is recognized by the optionee at the
time of the option grant, and no taxable income is generally recognized at the
time the option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise disposed
of. For Federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. A qualifying disposition occurs if the sale
or other disposition is made after the optionee has held the shares for
14
more than two (2) years after the option grant date and more than one (1) year
after the exercise date. If either of these two holding periods is not
satisfied, then a disqualifying disposition will result.
If the optionee makes a disqualifying disposition of the purchased shares,
the Company will be entitled to an income tax deduction, for the taxable year
in which such disposition occurs, equal to the excess of (i) the fair market
value of such shares on the option exercise date over (ii) the exercise price
paid for the shares. If the optionee makes a qualifying disposition, the
Company will not be entitled to any income tax deduction.
Non-Statutory Options. No taxable income is recognized by an optionee upon
the grant of a non-statutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares, and the optionee will be required
to satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the
optionee's termination of service prior to vesting in those shares, then the
optionee will not recognize any taxable income at the time of exercise but will
have to report as ordinary income, as and when the Company's repurchase right
lapses, an amount equal to the excess of (i) the fair market value of the
shares on the date the repurchase right lapses over (ii) the exercise price
paid for the shares. The optionee may, however, elect under Section 83(b) of
the Internal Revenue Code to include as ordinary income in the year of exercise
of the option an amount equal to the excess of (i) the fair market value of the
purchased shares on the exercise date over (ii) the exercise price paid for
such shares. If the Section 83(b) election is made, the optionee will not
recognize any additional income as and when the repurchase right lapses.
The Company will be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for the taxable
year of the Company in which such ordinary income is recognized by the
optionee.
Stock Purchase Rights
The tax principles applicable to stock purchase rights under the 1996 Plan
will be substantially the same as those summarized above for the exercise of
non-statutory option grants.
Deductibility of Executive Compensation
The Company anticipates that any compensation deemed paid by it in
connection with the disqualifying dispositions of incentive stock option
shares, or the exercise of non-statutory options with exercise prices equal to
the fair market value of the option shares on the grant date, will qualify as
performance-based compensation for purposes of Code Section 162(m) and will not
have to be taken into account for purposes of the $1 million limitation per
covered individual on the deductibility of the compensation paid to certain of
our executive officers. Accordingly, all compensation deemed paid with respect
to those options will remain deductible by the Company without limitation under
Code Section 162(m).
Accounting Treatment
Under the current accounting principles in effect for equity incentive
programs such as the 1996 Plan, the option grants under the 1996 Plan will not
result in any direct charge to the Company's reported earnings. However, the
fair value of those options is required to be disclosed in the notes to the
Company's financial statements, and the Company must also disclose, in
footnotes to the Company's financial statements, the pro-forma impact those
options would have upon the Company's reported earnings were the fair value of
those options at the time of grant treated as a compensation expense. In
addition, the number of outstanding options may be a factor in determining the
Company's earnings per share on a diluted basis.
15
On March 31, 2000, the Financial Accounting Standards Board issued
Interpretation No. 44, which is an interpretation of APB Opinion No. 25
governing the accounting principles applicable to equity incentive plans. Under
the Interpretation, option grants made to consultants (but not non-employee
Board members) after December 15, 1998 will result in a direct charge to the
Company's reported earnings based upon the fair value of the option measured
initially as of the grant date and then subsequently on the vesting date of
each installment of the underlying option shares. Such charge will accordingly
include the appreciation in the value of the option shares over the period
between the grant date of the option (or, if later, the July 1, 2000 effective
date of the Interpretation) and the vesting date of each installment of the
option shares. In addition, if the proposed interpretation is adopted, any
options which are repriced after December 15, 1998 will also trigger a direct
charge to the Company's earnings measured by the appreciation in the value of
the underlying shares over the period between the grant date of the option (or,
if later, the July 1, 2000 effective date of the Interpretation) and the date
the option is exercised for those shares.
New Plan Benefits
As of August 4, 2000, no stock options had been granted, and no shares of
common stock had been issued, on the basis of the share increase that is the
subject of this Proposal.
Stockholder Approval
The affirmative vote of at least a majority of the outstanding shares of
common stock present in person or by proxy at the annual meeting and entitled
to vote is required for approval of the amendment to the 1996 Plan. Should such
stockholder approval not be obtained, then the 3,500,000 share increase to the
share reserve under the 1996 Plan will not be implemented, any stock options
granted under the 1996 Plan on the basis of such increase will immediately
terminate without ever becoming exercisable for the shares of common stock
subject to those options, and no additional options or stock purchase rights
will be made on the basis of such increase. The 1996 Plan will, however,
continue in effect, and option grants and stock purchase rights may continue to
be made under the 1996 Plan until all the shares available for issuance under
the 1996 Plan have been issued pursuant to such option grants and direct stock
issuances.
Our Board of Directors recommends a vote FOR the approval of the proposal to
amend the Company's stock option plan to increase the number of shares
available for issuance under the 1996 Plan by an additional 3,500,000 shares.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the annual meeting. If any other matters properly come before
the annual 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. Discretionary authority with respect to such other matters is
granted by the execution of the enclosed Proxy.
ADDITIONAL INFORMATION
OWNERSHIP OF SECURITIES
The following table sets forth certain information known to the Company
regarding the beneficial ownership of the Company's common stock as of March
25, 2000 by (i) each person known to the Company to be a beneficial owner of
more than 5% of the Company's common stock; (ii) each director and nominee for
director; (iii) each of the executive officers named in the Summary
Compensation Table of the Executive Compensation and Related Information
section of this Proxy Statement and (iv) all current executive officers
16
and directors of the Company as a group. Unless otherwise indicated in the
footnotes, the beneficial owner has sole voting and investment power with
respect to the securities beneficially owned, subject only to community
property laws, if applicable.
Percentage of
Number of Shares Beneficially
Beneficial Owner Shares(1) Owned
- ---------------- ---------- -------------------
Alfred S. Teo(2)(3), Director.................. 8,164,858 12.2%
MacKay Shields LLC(4), 5% stockholder.......... 3,443,205 5.2%
9 West 57th Street, New York, NY 10019
Michael L. Hackworth(5), Chairman of the
Board......................................... 1,160,187 1.7%
Suhas S. Patil(6), Chairman Emeritus and
Director...................................... 1,304,562 1.9%
David D. French(7), Chief Executive Officer and
Director...................................... 460,414 *
D. James Guzy(8), Director..................... 185,906 *
Henry M. Josefczyk(9), Former Senior Vice
President, Worldwide Sales.................... 85,875 *
Walden C. Rhines(10), Director................. 29,124 *
Glenn C. Jones, Former Vice President Finance,
Chief Financial Officer and Treasurer(11)..... 75,000 *
Robert H. Smith(12), Director.................. 23,124 *
Terry Leeder, Vice President Worldwide
Sales(13)..................................... 2,000 *
Arthur Swift................................... 2,000 *
Patrick V. Boudreau, Former Senior Vice
President, Human Resources.................... 0 *
All current executive officers and directors as
a group (22 Persons)(14)...................... 11,689,707 17.5%
- --------
* Less than 1% of the outstanding common stock.
(1) Percentage ownership is based on 66,830,082 shares of common stock
outstanding on March 25, 2000. Shares of common stock which are currently
exercisable or will become exercisable within 60 days after March 25, 2000
are deemed outstanding for computing the percentage of the person or group
holding such options, but are not deemed outstanding for computing the
percentage of any other person or group.
(2) Includes (a) 16,458 shares issuable upon exercise of options held by Mr.
Teo exercisable within 60 days of March 25, 2000, (b) 8,035,600 held by
Alfred S. and Annie Teo as to which Mr. Teo has shared voting power and
(c) 112,800 shares held by Alpha Industries, Inc. Retirement Plan dated
January 1, 1984, as to which Mr. Teo has voting power as Trustee.
(3) Mr. And Mrs. Teo have agreed to vote their shares in favor of
recommendations by the Board of Directors of the Company. Information on
this agreement is described in the Schedule 13G filed by them with the
Securities and Exchange Commission on February 8, 2000. The amount of
shares represented is exclusive of the 78,452 shares over which New York
Life Insurance Company, MacKay Shields LLC's parent company, has sole
dispositive power.
(4) This information is provided on the Schedule 13G filed with the Securities
and Exchange Commission on February 8, 2000. the amount of shares
represented is exclusive of the 78,452 shares over which New York Life
Insurance Company, MacKay Shields LLC's parent company, has sole
dispositive power.
(5) Includes 893,750 shares issuable upon exercise of options held by Mr.
Hackworth exercisable within 60 days of March 25, 2000, and 261,351 shares
held in a trust over which he has beneficially ownership.
17
(6) Includes (a) 440,000 shares issuable upon exercise of options held by Dr.
Patil exercisable within 60 days of March 25, 2000, (b) 791,162 held by
Dr. Patil and (c) 73,400 shares held by family members and trusts for the
benefit of family members, with respect to which Dr. Patil has voting and
investment power but disclaims beneficial ownership because he has no
economic interest in any of the shares.
(7) Includes 160,414 shares issuable upon exercise of options held by Mr.
French exercisable within 60 days of March 25, 2000.
(8) Includes 23,124 shares issuable upon exercise of options held by Mr. Guzy
exercisable within 60 days of March 25, 2000. Also includes 132,782 shares
held by Arbor Company, of which Mr. Guzy is President and may therefore be
deemed to be the beneficial owner.
(9) Includes 200 shares held by Mr. Josefczyk's wife and 84,375 shares
issuable upon exercise of options held by Mr. Josefczyk exercisable within
60 days of March 25, 2000.
(10) Includes (a) 23,124 shares issuable upon exercise of options held by Mr.
Rhines exercisable within 60 days of March 25, 2000 and (b) 6,000 shares
held by his wife.
(11) Includes 25,000 shares issuable upon exercise of options held by Mr.
Jones exercisable within 60 days of March 25, 2000
(12) Includes 23,124 shares issuable upon exercise of options held by Mr.
Smith exercisable within 60 days March 25, 2000.
(13) As reported to the SEC on Form 5, filed with the SEC on July 20, 2000.
(14) Includes 1,973,605 shares issuable upon exercise of options held by
executive officers and directors exercisable within 60 days of March 25,
2000.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information concerning the
compensation earned by the Company's Chief Executive Officer and each of the
four other most highly compensated executive officers of the Company whose
salary and bonus for the fiscal year ended March 25, 2000 was in excess of
$100,000. The table contains compensation for services rendered in all
capacities to the Company and its subsidiaries for the fiscal years ended March
25, 2000, March 27, 1999 and March 28, 1998. In addition, Mr. Jones and Mr.
Josefczyk are also included in the table because they would have been among the
four most highly compensated executive officers of the Company on the last day
of the fiscal year ended March 25, 2000 had they not resigned earlier during
that year. No other executive officer who would have otherwise been included in
such table on the basis of salary and bonus earned for the fiscal year ended
March 25, 2000 has been excluded by reason of his or her termination of
employment or change in executive status during that year. The listed
individuals shall be hereinafter referred to as the "Named Officers."
18
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
------------------------
Annual
Compensation
------------------ Restricted Securities
Name and Principal Stock Underlying All Other
Position Year Salary(1) Bonus Awards Options Compensation
- ------------------ ---- --------- -------- ---------- ---------- ------------
David D. French......... 2000 $373,624 $150,000(2) -- -- $2,500(3)
President and Chief
Executive 1999 231,250 300,000(4) $2,375,000(5) 393,750 --
Officer 1998 -- -- -- -- --
Glenn C. Jones.......... 2000 $231,095 $ 50,000 $ 393,750(7) -- --
Advisor and Former Vice 1999 -- -- -- -- --
President, Finance,
Chief Financial 1998 -- -- -- -- --
Officer and
Treasurer(6)
Arthur Swift............ 2000 $246,333 $ 17,725 -- -- --
VP/GM Optical Storage 1999 193,502 71,023 -- -- --
Division 1998 172,142 90,000 -- -- --
Henry M. Josefczyk...... 2000 $263,349 $149,262(9) -- -- --
Senior Vice President, 1999 265,018 175,814(10) -- 35,000 --
Worldwide Sales(8) 1998 107,026 220,000(11) -- 150,000 --
Suhas Patil............. 2000 $248,216 -- -- -- --
Chairman Emeritus and
Director 1999 270,504 -- -- -- --
1998 132,252 -- -- -- --
Patrick V. Boudreau..... 2000 $247,460 -- -- -- --
Former Senior Vice
President, 1999 210,348 234,008(12) -- -- --
Human Resources 1998 91,534 50,000 -- -- --
Terry Leeder............ 2000 $188,225 $ 50,000 -- -- --
Vice President,
Worldwide Sales 1999 -- -- -- -- --
1998 -- -- -- -- --
- --------
(1) Amounts shown are before salary reductions resulting from employee
contributions to the Cirrus Logic, Inc. 401(k) Profit Sharing Plan.
(2) Mr. French's bonus for fiscal year 2000 was paid from the Company's
Variable Compensation Plan.
(3) This amount reflects an estimated $2,500 in interest that would have been
paid by Mr. French to the Company had the interest payable by Mr. French
on two promissory notes to the Company not been below-market. The notes
are discussed below under "Employment Contracts, Termination of Employment
and Change in Control Arrangements." The Company estimates that the
interest paid by Mr. French is approximately .5% below the market rate at
the time the loans were made.
(4) Upon joining the Company in June 1998, Mr. French received a hiring bonus
of $150,000. Mr. French's employment agreement guaranteed a minimum
payment of $150,000 for the 1999 Variable Compensation Program. Such
amount was paid in May 1999.
(5) Pursuant to his employment agreement with the Company, Mr. French received
a grant of 250,000 shares of restricted Company Stock on June 25, 1998.
This amount represents the fair market value of the stock granted on the
date of grant, $9.50 per share. As of March 25, 2000, Mr. French held
250,000 shares of restricted stock valued at $5,218,750. These shares
vested 100% on the one-year anniversary of the effective date, June 25,
1999. Dividends have not been paid on these shares of restricted stock but
will be paid to the extent they are paid to holders of Company common
stock generally.
(6) Mr. Jones resigned as Chief Financial Officer March 30, 2000.
19
(7) This amount represents a grant of 50,000 shares of restricted stock to
Mr. Jones on April 20, 1999 This amount represents the fair market value
of the stock granted on the date of grant, $7.8750 per share. As of March
25, 2000, Mr. Jones held 50,000 shares of restricted stock valued at
$1,043,750. These shares vested 50% on the six-month anniversary, October
20, 1999 and 100% on the one-year anniversary of the date of grant.
Dividends have not been paid on these shares of restricted stock but will
be paid to the extent they are paid to holders of Company common stock
generally.
(8) Mr. Josefczyk resigned as Senior Vice President, Worldwide Sales on
February 28, 2000.
(9) This amount reflects commissions received by Mr. Josefczyk under the
fiscal 2000 Sales Commission Plan.
(10) This amount reflects commissions received by Mr. Josefczyk under the
fiscal 1999 Sales Commission Plan.
(11) Mr. Josefczyk received a hiring bonus of $100,000 upon joining the
Company in November 1997 and $120,000 in commissions under the fiscal
1998 Sales Commission Plan.
(12) Mr. Boudreau received a performance bonus of $233,815 in May of 1998.
Stock Options
The following table provides information with respect to options granted in
the fiscal year ended March 25, 2000 to the Named Officers. All the grants were
made under the Company's 1996 Stock Option Plan. No stock appreciation rights
were granted to the Named Officer's division the fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
---------------------------------------------------
Potential Realizable
Value of Assumed
Annual Rates of
Stock Price
Number of % of Total Appreciation
Securities Options for Option Term
Underlying Granted to ---------------------
Options Employees in Exercise Price Expiration
Granted Fiscal Year(1) ($/Sh)(2) Date(3) 5%(4) 10%(4)
---------- -------------- -------------- ---------- --------- -----------
David D. French......... 75,000 1.83% $ 7.1250 06/03/09 $ 366,066 $ 851,656
50,000 1.22% 9.0000 07/29/09 $ 283,003 $ 717,184
Glenn C. Jones.......... 25,000 * 7.8750 04/20/09 $ 123,814 $ 313,768
30,000 * 14.6250 02/02/10 $ 275,928 $ 699,255
Arthur Swift............ 37,500 * 7.1250 06/03/09 $ 168,033 $ 425,828
37,500 * 9.0000 07/29/09 $ 212,252 $ 537,888
Henry M. Josefczyk...... -- -- -- -- -- --
Suhas Patil............. 24,000 * 7.125 06/03/09 $ 107,451 $ 272,530
Patrick V. Boudreau..... 26,000 * 9.000 07/29/00 $ 147,161 $ 372,936
Terry Leeder............ 150,000 3.66% 8.6250 07/07/09 $ 813,632 $ 2,061,904
- --------
* indicates less than 1%
(1) Based on 4,093,625 shares underlying options granted to all employees
during the fiscal year ended March 25, 2000 from the 1996 Stock Option
Plan.
(2) The exercise price may be paid in cash or in shares of common stock valued
at fair market value on the exercise date. Alternatively, the option may
be exercised through a cashless exercise procedure pursuant to which the
optionee provides irrevocable instructions to a brokerage firm to sell the
purchased shares and to remit to the Company, out of the sale proceeds, an
amount equal to the exercise price plus all applicable withholding taxes.
The Compensation Committee may also assist an optionee in the exercise of
an option by (i) authorizing a loan from the Company in a principal amount
not to exceed the aggregate exercise price plus any tax liability incurred
in connection with the exercise or (ii) permitting the optionee to pay the
option price in installments over a period of years upon terms established
by the Compensation Committee.
20
(3) The option will become exercisable for 25% of the shares upon the
optionee's completion of one year of service measured from the grant date
and will become exercisable for the balance of the shares in 36 successive
equal monthly installments upon his or her completion of each additional
month of service thereafter. The option will become exercisable on an
accelerated basis upon a sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another
corporation.
(4) There can be no assurance provided to any executive officer or other
holder of the Company's securities that the actual stock price
appreciation over the ten-year option term will be at the assumed 5% and
10% levels or at any other defined level. Unless the market price of the
common stock appreciates over the option term, no value will be realized
from those option grants which were made to the Named Officers with an
exercise price equal to the fair market value of the option shares on the
grant date.
Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
The following table provides information with respect to option exercises in
the fiscal year ended March 25, 2000 by the Named Officers and the value of
their unexercised options at fiscal year end. No stock appreciation rights were
held or exercised by the Named Officers as of the end of the fiscal year.
AGGREGATED OPTIONS IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of
Securities Underlying Value of Unexercised
Unexercised Options In-The-Money Options
Shares Value at Fiscal Year End at Fiscal Year End(2)
acquired on Realized ---------------------- ---------------------
Name Exercise ($)(1) Vested Unvested Vested Unvested
- ---- ----------- -------- ---------- ----------- ---------- ----------
Glenn C. Jones.......... 0 $ 0 25,000 30,000 $ 325,000 $ 187,500
Arthur Swift............ 10,000 91,875 23,750 0 233,667 0
David D. French......... 0 0 153,122 365,628 1,741,763 4,520,737
Suhas Patil............. 40,000 607,500 440,000 50,000 5,287,969 584,375
Patrick V. Boudreau..... 22,000 237,875 40,499 107,301 443,957 1,285,593
Terry Leeder............ 0 0 0 150,000 0 1,837,500
Henry M. Josefczyk...... 0 0 84,375 0 453,516 0
- --------
(1) Based upon the market value of the purchased shares on the exercise date
less the option exercise price paid for those shares.
(2) Based upon the market value of the Company's common stock of $20.875 per
share on March 24, 2000 (the last trading day of the fiscal year), less
the exercise price.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
The Board of Directors named David D. French President and Chief Executive
Officer on February 4, 1999. Prior to becoming Chief Executive Officer, Mr.
French held the position of President and Chief Operating Officer since joining
the Company in June 1998. The Company did not enter into a new employment
agreement with Mr. French upon his promotion to Chief Executive Officer, but
adjusted his salary under the existing employment agreement from $325,000 per
year to $375,000 per year. Mr. French's employment agreement with the Company
does not have a definite term. During the term of the agreement, Mr. French
will be provided with the following compensation: a minimum base salary of
$325,000 per year, to be reviewed annually; Company-paid health care coverage
for him and his eligible dependents and an annual target bonus under the
Company's Variable Compensation Program of up to 100% of his base salary. The
Variable Compensation Program is discussed below as part of the Board of
Director's Compensation Committee Report. For the fiscal year ended March 25,
2000, Mr. French's employment agreement also provided for a minimum bonus
payment under the Company's Variable Compensation Program of $150,000. In
addition, Mr. French received 250,000 shares of restricted stock at zero value
which vested in June 1999 and stock options to
21
purchase 350,000 shares of common stock at $9.50 per share vesting over four
years, beginning June 25, 1998. In October 1998, he was granted an option to
purchase 43,750 shares at an exercise price of $5.875 which vests in October
2002.
The Company also extended a bridge loan to Mr. French for the purchase of
his principal residence in Texas. The bridge loan is for $721,899 and carries
an interest rate of 5.64%. The loan is due and payable on September 1, 2013, or
180 days following the date of his resignation from the Company, whichever
occurs first.
In the event (i) the Company terminates Mr. French's employment on or before
the third anniversary of the effective date of his agreement with the Company
other than for Cause (as defined below), or (ii) any successor to the Company
fails or refuses to assume the employment agreement in accordance with its
provisions, Mr. French shall be entitled to receive a single, lump-sum
severance payment within fifteen (15) days of termination equal to his then
current annual base salary. In addition, the Company would be required to pay
to Mr. French a lump-sum payment in an amount equivalent to the reasonably
estimated costs he may incur to extend for a period of twelve (12) months under
the COBRA continuation laws his group health and dental plans coverage in
effect on the date of such termination. In addition, in such event Mr. French
will vest fully in his restricted stock and as to an additional twelve (12)
months with respect to his option to purchase 350,000 shares of common stock at
$9.50 per share, which will remain exercisable for a one-year period following
such termination. For purposes of his employment agreement, the term "Cause"
means (i) gross negligence or willful misconduct in the performance of duties
to the Company after one written warning detailing the concerns and offering
Mr. French opportunities to cure; (ii) material and willful violation of
federal or state law; (iii) commission of any act of fraud with respect to the
Company; (iv) conviction of a felony or a crime causing material harm to the
standing and reputation of the Company; or (v) intentional and improper
disclosure of the Company's confidential proprietary information. For purposes
of his employment agreement, the determination of Cause shall be determined by
the Board in its sole and absolute discretion.
On March 31, 2000, the Company advanced a loan of $790,000 to Jason Carlson,
Vice President of Consumer Audio Division of the Company, and Georgette
Carlson. Their obligation to repay the loan is evidenced by a promissory note.
The note carries an 8% interest rate. The funds advanced by the note were
utilized for the payment of a portion of the purchase price of and are secured
by the Carlson's private residence in Travis County, Texas.
On July 21, 1999, the Company advanced a loan of $750,000 to David D.
French, President and Chief Executive Officer of the Company. His obligation to
repay the loan is evidenced by a promissory note. The note carries an 5.82%
interest rate and is secured by 90,000 shares of the Company's common stock
held in escrow. The note and accrued interest are due and payable five years
from the date of the note or upon termination of employment, voluntary or
involuntary, by Mr. French.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors consists of directors
Rhines, Guzy and Smith. Neither of these individuals was an officer or employee
of the Company at any time during the fiscal year ended March 25, 2000 nor are
any of these individuals former officers of the Company.
No executive officer of the Company has ever served as a member of the board
of directors or the compensation committee of another entity that has or has
had at the time of his service or during the same fiscal year one or more
executive officers serving as a member of the Company's Board of Directors or
Compensation Committee.
22
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to review and determine the
salaries and bonuses of executive officers of the Company, including the Chief
Executive Officer, and to establish the general compensation policies for such
individuals. The Compensation Committee also has the sole and exclusive
authority to make discretionary option grants to the Company's executive
officers under the Company's 1996 Stock Incentive Plan.
The Compensation Committee believes that the compensation programs for the
Company's executive officers should reflect the Company's performance and the
value created for the Company's stockholders. In addition, the compensation
programs should support the short-term and long-term strategic goals and values
of the Company and should reward individual contribution to the Company's
success. We are engaged in a very competitive industry, and the Company's
success depends upon its ability to attract and retain qualified executives
through the competitive compensation packages it offers to such individuals.
General Compensation Policy
The Compensation Committee's policy is to provide the Company's executive
officers with compensation opportunities which are based upon their personal
performance, the financial performance of the Company and their contribution to
that performance. These opportunities are designed to be competitive enough to
attract and retain highly skilled individuals. Each executive officer's
compensation package is comprised of three elements: (i) base salary that is
competitive with the market and reflects individual performance, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of annual financial performance goals and (iii) long-term stock-
based incentive awards designed to strengthen the mutuality of interests
between the executive officers and the Company's stockholders. As an officer's
level of responsibility increases, a greater proportion of his or her total
compensation will be dependent upon the Company's financial performance and
stock price appreciation rather than base salary.
The Committee sets compensation levels for executives based on a review of
competitive information. Competitive compensation information is gathered from
published surveys of high technology company compensation levels (the "Survey
Group") and from proxy statements of particular companies that are considered
generally comparable to the Company (the "Proxy Group"). The Proxy Group
includes companies used in the peer performance graph as well as other
semiconductor or high technology companies that are high growth, profitable,
and similar in revenue size to the Company. Recommendations by Company
management are examined in light of this information, with the intention of
establishing and maintaining competitive total cash compensation levels. In
general, the Company has attempted to establish a strong relationship between
total cash compensation, the Company's performance and individual performance
by maintaining base salaries at approximately the 50th percentile of the Survey
Group and Proxy Group data, and providing additional incentive opportunities so
that total cash compensation (salary plus bonus) approaches 50th percentile
levels when the Company's performance is near the middle of the semiconductor
companies in the Proxy Group, and has the potential to pay at or near the top
of the semiconductor companies in the Proxy Group for commensurate levels of
performance.
Factors
The principal factors that were taken into account in establishing each
executive officer's compensation package for the fiscal year ended March 25,
2000 are described below. The Compensation Committee may in its discretion
apply entirely different factors, such as different measures of financial
performance, for future fiscal years.
Base Salary
In setting base salaries, the Compensation Committee reviewed the data
obtained from the Proxy Group and the Survey Group. The base salary for each
officer reflects the salary levels for comparable positions within
23
this comparative group of companies, as well as each individual's personal
performance and internal alignment considerations. The relative weight given to
each factor varies with each individual in the sole discretion of the
Compensation Committee. Each executive officer's base salary is adjusted each
year on the basis of (i) the Compensation Committee's evaluation of the
officer's personal performance for the year and (ii) the competitive
marketplace for persons in comparable positions. The Company's performance and
profitability may also be a factor in determining the base salaries of
executive officers. For the fiscal year ended March 25, 2000, in accordance
with the Company's compensation philosophy, the base salary rates of the
executive officers were generally below the 50th percentile levels of the
Survey Group and Proxy Group.
Annual Incentives
The Variable Compensation Plan (the "VCP") is designed to motivate and
reward the executive officers by making a significant portion of their cash
compensation directly dependent upon achieving predetermined corporate and/or
business unit financial goals. For fiscal 2000, the Company introduced a new
rolling three-year performance bonus plan, which sets targets based on
Operating Profit per Share and Return on Net Assets. In addition, an
executive's variable compensation award may be reduced or increased based on
achievement of key strategic goals and objectives previously agreed upon for
each executive. The VCP pool is calculated as a percentage of the operating
targets achieved multiplied by the base pool for all employees eligible to
participate in the plan and is capped at a percentage of annual operating
profit. Cash payments due are paid after the end of the performance period for
services rendered and performance levels achieved during the performance
period.
Long Term Incentives
Generally, stock option grants are made annually by the Compensation
Committee to each of the Company's key employees, including its executive
officers, and to other eligible employees on their date of hire. Each grant is
designed to align the interests of the executive officer with those of the
stockholders and provide each individual with a significant incentive to manage
the Company from the perspective of an owner with an equity stake in the
business. Each grant allows the officer to acquire shares of the Company's
common stock at a fixed price per share (the market price on the grant date)
over a specified period of time (up to ten years). Each option becomes
exercisable in a series of installments over a 4-year period, contingent upon
the officer's continued employment with the Company. Accordingly, the option
will provide a return to the executive officer only if he or she remains
employed by the Company during the vesting period, and then only if the market
price of the shares appreciates over the option term. In the fiscal year ended
March 25, 2000, stock options for the executive officers were granted upon
recommendation of management and approval of the Committee within guidelines
approved by the Board of Directors, and were granted at an exercise price equal
to the fair market value of the Company's common stock on the date of grant.
The size of the option grant to each executive officer, including the Chief
Executive Officer, is set by the Compensation Committee at a level that is
intended to create a meaningful opportunity for stock ownership based upon the
individual's position with the Company, current performance, anticipated future
contribution based on that performance, and ability to affect corporate and/or
business unit results. The Compensation Committee also takes into account the
number of unvested options held by the executive officer in order to maintain
an appropriate level of equity incentive for that individual. The relevant
weight given to each of these factors varies from individual to individual. The
Compensation Committee has established certain guidelines with respect to the
option grants made to the executive officers, but has the flexibility to make
adjustments to those guidelines at its discretion.
CEO Compensation
The Compensation Committee reviews the CEO's base salary annually,
considering Company performance, individual performance, and external pay
practices. In setting the total compensation payable to the Company's Chief
Executive Officer for the fiscal year ended March 25, 2000, the Compensation
Committee
24
sought to make that compensation competitive with the compensation paid to the
chief executive officers of the companies in the Proxy Group and the Survey
Group, while at the same time assuring that a significant percentage of
compensation was tied to Company performance and stock price appreciation. As
is the case for other executives of the Company, the Company's executive pay
program as it relates to the chief executive officer is highly leveraged toward
variable compensation plans that reward achievement of pre-determined corporate
goals and objectives.
The Compensation Committee adjusted Mr. French's base salary for the fiscal
year ended March 25, 2000 in recognition of his personal performance as
President and Chief Operating Officer prior to his appointment as Chief
Executive Officer of the Company and with the objective of maintaining his base
salary at a competitive level when compared with the base salary levels in
effect for similarly situated chief executive officers. With respect to Mr.
French's base salary, it is the Compensation Committee's intent to provide him
with a level of stability and certainty each year and not have this particular
component of compensation affected to any significant degree by Company
performance factors. For the fiscal year ended March 25, 2000, Mr. French's
base salary was approximately at the median of the base salary levels of other
chief executive officers at the companies in the Survey Group and the Proxy
Group.
The remaining components of Mr. French's 2000 fiscal year compensation,
other than a guaranteed bonus of $150,000, were primarily dependent upon
corporate performance. Mr. French was eligible for a cash bonus for the 2000
fiscal year of up to $375,000 conditioned on the Company's attainment of EPS
goals with additional consideration to be given to individual business plan
objectives. Because the Company did not reach its EPS goal during the fiscal
year ended March 25, 2000, no additional bonus was paid to Mr. French. The
Compensation Committee awarded a stock option grant to Mr. French in fiscal
2000 in order to provide him with an equity incentive to continue contributing
to the financial success of the Company. The option will have value for Mr.
French only if the market price of the underlying option shares appreciates
over the market price in effect on the date the grant was made.
Executive Management Severance Plan
In April 1999, the Board of Directors adopted an Executive Management
Severance Plan (the "Severance Plan") providing for certain benefits to
executive officers of the Company in the event that an executive is
involuntarily terminated, other than for cause. Upon such event, the Severance
Plan provides for salary continuation for a period no greater than six months.
In addition, the Severance Plan provides for continued health coverage for a
period of eighteen months or until the executive accepts employment elsewhere.
Outstanding stock options will continue to vest for six months or until the
executive accepts employment elsewhere and he will have twelve months from his
termination date to exercise vested options.
Compliance With Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per covered
officer in any fiscal year. The limitation applies only to compensation which
is not considered to be performance-based. As a result of an executive
officer's restricted stock award on June 25, 1998, which became fully vested on
June 25, 1999, approximately $1.7 million of compensation deemed payable to him
by the Company was not deductible as required under Code Section 162(m) because
the restricted stock award did not qualify as performance based compensation
under Code Section 162(m). Other than this restricted stock award, non-
performance based compensation paid to the Company's executive officers for the
fiscal year ended March 25, 2000 did not exceed the $1 million limit per
officer. It is the Committee's objective that, so long as it is consistent with
its overall business, compensation and retention objectives, the Company will,
to the extent reasonable, endeavor to keep executive compensation deductible
for federal income tax purposes.
25
It is the opinion of the Compensation Committee that the executive
compensation policies and plans provide the necessary total remuneration
program to properly align the Company's performance and the interests of the
Company's stockholders through the use of competitive and equitable executive
compensation in a balanced and reasonable manner, for both the short and long-
term.
Submitted by the Compensation Committee of the Company's Board of Directors:
Compensation Committee
Walden C. Rhines, Chairman
D. James Guzy
Robert H. Smith
26
Performance Graph
The following graph shows a comparison of five-year cumulative total
stockholder return, calculated on a dividend reinvestment basis, for Cirrus
Logic, Inc., the S&P 500 Composite Index (the "S&P 500") and the Semiconductor
Subgroup of the S&P Electronics Index (the "Semiconductors Index").
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG CIRRUS LOGIC, INC., THE S & P 500 INDEX
AND THE S & P ELECTRONICS (SEMICONDUCTORS) INDEX
CUMULATIVE TOTAL RETURN
---------------------------------------
- -------
3/95 3/96 3/97 3/98 3/99 3/00
CIRRUS LOGIC, INC. 100.00 106.25 71.32 59.56 37.50 107.35
S & P 500 100.00 132.11 158.30 234.27 277.52 327.32
S & P ELECTRONICS (SEMICONDUCTORS) 100.00 110.22 233.91 255.43 386.82 956.04
(1) The graph covers the period from March 31, 2000.
(2) The graph assumes that $100 was invested in the Company's common stock on
March 31, 1995, and also in each index, and that all dividends were
reinvested. No cash dividends have been declared on the Company's common
stock.
(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings made under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings made by the Company under those statutes, neither the preceding Stock
Performance Graph nor the Compensation Committee Report is to be incorporated
by reference into any such prior filings, nor shall such graph or report be
incorporated by reference into any future filings made by the Company under
those statutes.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 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 an initial report
of ownership on Form 3 and changes in ownership on Form 4 or 5 with the
Securities and Exchange Commission (the "SEC"). Executive officers, directors
and greater than ten percent stockholders are also required by SEC rules 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 the last fiscal year and for the fiscal year already in progress, the
following officers had late filings of their initial beneficial ownership on
Form 3: Jason L. Carlson, Charles Keith Essency and Terry Leeder.
27
ANNUAL REPORT
A copy of the Annual Report of the Company for the fiscal year ended March
25, 2000 has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the annual meeting. The
Annual Report is not incorporated into this Proxy Statement and is not
considered proxy solicitation material.
FORM 10-K
We filed an Annual Report on Form 10-K with the Securities and Exchange
Commission on or about June 23, 2000. Stockholders may obtain a copy of this
report, without charge at www.cirrus.com, or may request a copy of the report
from our investor relations department by telephone at (510) 226-2112, by email
at invest@corp.cirrus.com or by writing to Stan Victor, Vice President of
Corporate Communications, at the Company's principal executive offices located
at 4210 S. Industrial Drive, Austin, TX 78744.
BY ORDER OF THE BOARD OF DIRECTORS
David D. French
President and Chief Executive
Officer
Austin, Texas
August 4, 2000
28
[CIRRUS LOGIC LOGO APPEARS HERE] [CIRRUS LOGIC LOGO APPEARS HERE]
Annual Meeting of Stockholders Annual Meeting of Stockholders
Omni Austin Hotel Omni Austin Hotel
South Park South Park
4140 Governors Row 4140 Governors Row
Austin, Texas 78744 Austin, Texas 78744
September 28, 2000 September 28, 2000
2:00 P.M. 2:00 P.M.
ADMIT ONE ADMIT ONE
DETACH HERE
PROXY
CIRRUS LOGIC, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of CIRRUS LOGIC, INC., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated August 4, 2000 and the Company's Annual Report for
the fiscal year ending March 25, 2000, and hereby appoints Robert W. Fay and
David D. French and each of them, proxies and attorneys-in-fact, with full power
to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 2000 Annual Meeting of Stockholders of CIRRUS
LOGIC, INC., to be held on September 28, 2000 at 2:00 p.m. local time at the
Omni Austin Hotel South Park, 4140 Governor's Row, Austin, Texas 78744 and at
any adjournment or adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote, if then and there personally
present, on matters set forth on the reverse side.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
DETACH HERE
Please mark
[X] votes as in
this example.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, IT WILL BE VOTED FOR THE ELECTION OF THE
DIRECTORS, AND FOR THE PROPOSALS 2, 3, 4.
1. Election of Directors
Nominees: (01) David D. French, (02) D. James Guzy, FOR AGAINST ABSTAIN
(03) Michael L. Hackworth, (04) Suhas S. Patil, 2. To ratify the appointment of Ernst & [_] [_] [_]
(05) Walden C. Rhines, (06) Robert H. Smith and Young LLP as independent auditors
(07) Alfred S. Teo of the Company.
FOR All Nominees WITHHELD
Except As Noted As to All
Below Nominees FOR AGAINST ABSTAIN
[_] [_] 3. To approve an amendment to the 1996 [_] [_] [_]
Stock Plan to increase the number of
[_] ___________________________________________________ shares of Common Stock available for
For all nominees except as noted above grant under the Plan by 3,500,000
shares.
4. To transact such other business as may be properly come
before the meeting or any adjournment thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
Signature:________________________________ Date:_______________ Signature:________________________________ Date:______________