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SEC Filings
DEF 14A
QLOGIC CORP filed this Form DEF 14A on 07/23/1996
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<PAGE>   8
 

COMPENSATION OF DIRECTORS
 
     Directors' Fees. For service on the Board of Directors, directors who are
not employees of the Company receive a quarterly retainer of $4,000 plus $1,000
for each meeting of the Board of Directors in excess of five per year, and
reimbursement for travel expenses. The Chairman of the Board of Directors
receives an additional fee of $1,000 per quarter. In addition, the chairmen of
the audit and compensation committees receive an additional quarterly retainer
of $500. Directors who are employees of the Company receive no additional
compensation for serving on the Board of Directors. Directors are entitled to
reimbursement for out-of-pocket expenses in connection with attendance at board
and committee meetings.
 
     Stock Options. On January 12, 1994, the Board of Directors of the Company
adopted the QLogic Corporation Non-Employee Director Stock Option Plan (the
"Director Plan") under which shares of common stock of the Company may be issued
pursuant to exercise of stock options granted under the plan to directors who
are not employees of the Company or any of its subsidiaries. The Director Plan
was approved by Emulex Corporation ("Emulex"), the former parent corporation and
sole stockholder of the Company, prior to the distribution of all of the
Company's outstanding common stock to the stockholders of Emulex on February 28,
1994 (the "Distribution"). A total of 125,000 shares of common stock have been
reserved for issuance under the Director Plan.
 
     The purpose of the Director Plan is to attract and retain experienced and
knowledgeable outside directors by providing them with an ownership interest in
the Company. Only non-employee directors of the Company are eligible to
participate in the Director Plan. Each non-employee director of the Company
received an automatic grant of an option to purchase 12,500 shares of Company
common stock upon the date on which such director first became an eligible
director. Upon completion of the Distribution, non-employee directors of the
Company (excluding Mr. Liebl and a director of the Company who subsequently
resigned from the Board, each of whom had previously received an option to
purchase Company common stock as a result of the conversion of options
previously granted to them under the Emulex Corporation Non-Employee Director
Stock Option Plan in connection with the Distribution) were granted options to
purchase 12,500 shares of Company common stock.
 
     Options granted under the Director Plan are non-qualified stock options not
eligible for the favorable tax consequences given to incentive stock options by
Section 422 of the Internal Revenue Code. The purchase price per share of the
Company common stock issuable upon exercise of the option shall be 100% of the
fair market value per share of such common stock on the date of grant. No option
granted under the Director Plan shall be exercisable after the expiration of the
earlier of (i) ten years following the date the option is granted or (ii) one
year following the date the optionee ceases to be a director of the Company for
any reason.
 
     An option granted under the Director Plan shall be exercisable when it is
granted as to one-third of the shares of common stock subject to the option on
each anniversary of the date the option is granted if the director to whom the
option is granted is still a director of the Company on such anniversary. In the
event of a change in control of the Company, as defined in the Director Plan,
any unexercised option previously granted under the Director Plan shall become
exercisable upon such change in control as to one half of the shares of common
stock as to which the option is not already exercisable in addition to the
shares of common stock, if any, as to which the option is already exercisable.
 
     As currently in effect and unless sooner terminated by the Board, the
Director Plan will expire on December 31, 1996. The Board may amend, modify or
terminate the Director Plan, but may not without the prior approval of
stockholders make any amendments which would (i) materially increase the
benefits accruing to directors under the Director Plan, (ii) increase the total
number of shares of common stock which may be issued under the Director Plan, or
(iii) materially modify the eligibility requirements to receive a stock option
grant under the Director Plan.
 
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