Print Page | Close Window
SEC Filings
DEF 14A
QLOGIC CORP filed this Form DEF 14A on 07/23/1996
Entire Document
 << Previous Page | Next Page >>
<PAGE>   18
 
tion 16(b) of the Exchange Act during their term of service and for up to six
months after termination of such service. SEC Rule 16b-3 provides an exemption
from the restrictions of Section 16(b) for the grant of derivative securities,
such as stock options, under qualifying plans. Because the Director Plan
satisfies the requirements for exemption under SEC Rule 16b-3, the grant of
options will not be considered a purchase and the exercise of the options to
acquire the underlying shares of common stock will not be considered a purchase
or sale. Thus, ordinary income will be recognized and the Spread will be
measured on the date of exercise.
 
     The foregoing discussion, based upon federal tax laws now in effect, is not
intended to cover all relevant tax aspects of the Director Plan.
 
AWARDS OUTSTANDING UNDER THE DIRECTOR PLAN
 
     As of July 12, 1996, options were outstanding under the Director Plan held
by four non-employee directors of the Company to purchase an aggregate of 50,000
shares of Company common stock (12,500 shares each) at an average exercise price
of $7.015 per share, and 62,500 shares were available for future grant of
options under the Director Plan to new directors. A total of 12,500 shares have
been issued pursuant to exercise of options granted under the Director Plan.
 
     An option to purchase 12,500 shares of common stock was granted under the
Director Plan to each of Mr. Bixby, Ms. Miltner and Mr. Wells when he or she
became an Eligible Director. An option to purchase 12,500 shares of common stock
was granted to Mr. Liebl in connection with the Distribution.
 
     The market value of the Company's common stock on July 12, 1996 was $9.625
per share.
 
REASONS FOR AMENDMENT OF THE DIRECTOR PLAN
 
     The Board of Directors believes that amendment of the Director Plan will
increase the proprietary and vested interest of the non-employee directors of
the Company in the growth and performance of the Company and will help enable
the Company to continue to attract and retain highly qualified persons to serve
as non-employee directors. The Board also believes that option grants such as
those contemplated in the Director Plan are consistent with a trend in computer
industry companies similar in size and complexity to the Company to compensate
directors with stock options.
 
VOTE REQUIRED FOR APPROVAL OF AMENDMENT OF THE DIRECTOR PLAN
 
     Approval of the amendment of the Director Plan requires the affirmative
vote of the holders of a majority of the shares of common stock of the Company
present, or represented, and entitled to vote at the Meeting. If the amendment
of the Director Plan is not approved by the stockholders, the Director Plan will
continue in effect and will terminate in accordance with its terms on December
31, 1996.
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF AMENDMENT OF THE
DIRECTOR PLAN.
 
          RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
 
     The accounting firm of KPMG Peat Marwick LLP serves the Company as its
independent public accountants at the direction of the Board of Directors of the
Company and has served in such capacity since the Company's inception. One or
more representatives of KPMG Peat Marwick LLP are expected to be present at the
Meeting and will have an opportunity to make a statement, if they desire to do
so, and to be available to respond to appropriate questions.
 
     THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG PEAT MARWICK LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS FOR THE
COMPANY FOR FISCAL YEAR 1997. This matter is not required to be submitted for
stockholder approval, but the Board of Directors has elected to seek
ratification of its selection of the independent public accountants by the
affirmative vote of a majority of the shares represented and voting at the
Meeting.
 
                                       16

 << Previous Page | Next Page >>