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 (S) 240.14a-11(c) or (S) 240.14a-12
National Instruments Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number 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:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
NATIONAL INSTRUMENTS CORPORATION
Notice of Annual Meeting of Stockholders
May 30, 200114, 2002
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 20012002 Annual Meeting of Stockholders of
National Instruments Corporation, a Delaware corporation, will be held on May
30, 2001,14, 2002, at 9:00 a.m. local time, at National Instruments' principal executive
offices located at 11500 North Mopac Expressway, Building B, Austin, Texas,
78759 for the following purposes as more fully described in the Proxy Statement
accompanying this Notice:
1. To elect two directors to the Board of Directors for a term of three
years;
2. To ratify the appointment of PricewaterhouseCoopers LLP as National
Instruments' independent public accountants for the fiscal year ending December
31, 2001;2002; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only stockholders of record at the close of business on April 4, 2001,March 15, 2002, are
entitled to receive notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed Proxy Card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Stockholders attending the
meeting may vote in person even if they have returned a Proxy. However, if you
have returned a Proxy and wish to vote at the meeting, you must notify the
inspector of electionelections of your intention to revoke the Proxy you previously
returned and instead vote in person at the meeting. If your shares are held in
the name of a broker, trustee, bank or other nominee, please bring a proxy from
the broker, trustee, bank or other nominee with you to confirm you are entitled
to vote the shares.
Sincerely,
/s/ DAVID G. HUGLEY
David G. Hugley
Secretary
Austin, Texas
April 25, 20014, 2002
NATIONAL INSTRUMENTS CORPORATION
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of National Instruments
Corporation, a Delaware corporation (the "Company"), for use at its 20012002 Annual
Meeting of Stockholders (the "Annual Meeting") to be held on May 30, 2001,14, 2002, at
9:00 a.m., local time, or at any adjournments or postponements thereof, for the
purposes set forth in this Proxy Statement and in the accompanying Notice of
Annual Meeting of Stockholders. The Annual Meeting will be held at the Company's
principal executive offices at 11500 North Mopac Expressway, Building B, Austin,
Texas 78759. The Company's telephone number is (512) 338-9119.
These proxy solicitation materials were mailed on or about April 25, 20014, 2002 to
all stockholders entitled to vote at the Annual Meeting.
Record Date; Outstanding Shares
Stockholders of record at the close of business on April 4, 2001March 15, 2002 (the
"Record Date"), are entitled to receive notice of and vote at the meeting. On
the Record Date, 50,765,35051,251,722 shares of the Company's Common Stock, $.01 par
value, were issued and outstanding. For information regarding holders of more than five
percent of the outstanding Common Stock, see "Election of Directors -- Security
Ownership."
Revocability of Proxies
Proxies given pursuant to this solicitation may be revoked at any time
before they have been used. Revocation will occur by delivering a written notice
of revocation to the Company or by duly executing a proxy bearing a later date.
Revocation will also occur if the individual attends the meeting, notifies the
inspector of elections of his or her intention to revoke the proxy and votes in
person at the meeting.
Voting and Solicitation
Every stockholder of record on the Record Date is entitled, for each share
held, to one vote on each proposal or item that comes before the meeting. In the
election of directors, each stockholder will be entitled to vote for two
nominees and the two nominees with the greatest number of votes will be elected.
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding solicitation material to beneficial
owners. Proxies may be solicited by certain of the Company's directors, officers
and regularother employees, without additional compensation, personally, by telephone
or by telefax.
1
Deadline for Receipt of Stockholder Proposals
StockholderStockholders of the Company may submit proper proposals or director nominations which are intendedfor inclusion in the
Company's proxy statement and for consideration at the next annual meeting of
stockholders by submitting their proposals in writing to the Secretary of the
Company in a timely manner. In order to be presented atconsidered for inclusion in the
Company's 2002 Annual Meetingproxy materials for the annual meeting of stockholders to be held in
the year 2003, stockholder proposals must be received by the Secretary of the
Company no later than December 4, 2001 in order to be included in5, 2002, and must otherwise comply with the
proxy statement
and formrequirements of proxy for that meeting.
If you intend to present a proposal atRule 14a-8 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
In addition, the Company's Annual Meeting of
stockholdersbylaws establish an advance notice procedure with
regard to be held in 2002, but you dobusiness brought before an annual meeting, including stockholder
proposals not intend to have it included in the Company's 2002 Proxy Statement, youproxy statement. For director
nominations or other business to be properly brought before the 2003 Annual
Meeting by a stockholder, such stockholder must deliver a copy of your proposalwritten notice to the
Company's Secretary of the Company at the Company's principal executive office no later
than February 24, 20023, 2003 and no earlier than January 25, 2002.4, 2003. If the date of the
Company's 20022003 Annual Meeting is advanced or delayed by more than 30 calendar
days from the first anniversary date of the 20012002 Annual Meeting, your notice of
a proposal will be timely if it is received by the Company by the close of
business on the tenth day following the day the Company publicly announces the
date of the 20022003 Annual Meeting.
If the Company does not receive notice of your
proposal within this time frame,The Proxy grants the proxy holders designated by the Company
will use their discretionary authority to vote on any
matter raised at the shares they represent asAnnual Meeting. If such a stockholder fails to comply with
the Boardforegoing notice provisions, proxy holders will be allowed to use their
discretionary voting authority should the stockholder proposal come before the
2003 Annual Meeting.
A copy of Directorsthe full text of the bylaw provisions governing the notice
requirements set forth above may recommend.be obtained by writing to the Secretary of the
Company. All notices of proposals and director nominations by stockholders
should be sent to National Instruments Corporation, 11500 N. Mopac Expressway,
Building B, Austin, Texas 78759, Attention: Corporate Secretary.
2
PROPOSAL ONE:
ELECTION OF DIRECTORS
General
The Company's Board of Directors is divided into three classes, with the
term of office of one class expiring each year. The Company currently has eightseven
directors with two directors in one classtwo classes and three directors in two classes.
The terms of office of Class I directors Dr. James J. Truchard and William C.
Nowlin, Jr. will expire at the 2001 Annual Meeting. Mr. Nowlin is not standing
for re-election at the 2001 Annual Meeting. Dr. Truchard will stand for re-
election to the Board of Directors at the 2001 Annual Meeting. In addition,
Charles J. Roesslein, whose term of office expires at the 2002 Annual Meeting,
has tendered his resignation from the Board of Directors to take effect
immediately prior to the 2001 Annual Meeting. Mr. Roesslein will stand for re-
election to the Board of Directors at the 2001 Annual Meeting.one class.
The terms of office of Class II directors L. Wayne Ashby and Donald M. Carlton
will expire at the 2002 Annual Meeting. Mr. Ashby is not standing for
re-election at the 2002 Annual Meeting. Dr. Carlton will stand for re-election
to the Board of Directors at the 2002 Annual Meeting. In addition, Jeffrey L.
Kodosky, whose term of office expires at the 2003 Annual Meeting, andhas tendered
his resignation from the Board of Directors to take effect immediately prior to
the 2002 Annual Meeting. Mr. Kodosky will stand for re-election to the Board of
Directors at the 2002 Annual Meeting. The terms of office of Class III directors Jeffrey
L. Kodosky,
Ben G. Streetman and R. Gary Daniels will expire at the 2003 Annual Meeting and
the terms of office of Class I directors James J. Truchard and Charles J.
Roesslein will expire at the 2004 Annual Meeting. At the 20012002 Annual Meeting,
stockholders will elect two directors for a term of three years. After the
election at the 20012002 Annual Meeting, there will be sevensix directors, with two
directors in two classes andeach of the three directors
in one class.classes.
Vote Required
The two nominees receiving the highest number of affirmative votes of the
shares present in person or represented by proxy at the Annual Meeting and
entitled to vote onin the election of directors shall be elected to the Board of
Directors. Votes withheld from any director are counted for purposes of
determining the presence or absence of a quorum, but have no legal effect under
Delaware law. While there is no definitive statutory or case law authority in
Delaware as to the proper treatment of abstentions and broker non-votes in the
election of directors, the Company believes that both abstentions and broker
non-votes should be counted for purposes of whether a quorum is present at the
Annual Meeting. In the absence of precedent to the contrary, the Company intends
to treat abstentions and broker non-votes with respect to the election of
directors in this manner. Cumulative voting is not permitted by the Company's
Certificate of Incorporation.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the Company's two nominees named below. If any nominee of
the Company is unable or declines to serve as a director at the time of the
Meeting, the proxies will be voted for any nominee who is designated by the
present Board of Directors to fill the vacancy. It is not expected that any
nominee will be unable or will decline to serve as a director. The Board of
Directors recommends that stockholders vote FOR the nominees listed below.
Nominees for Election at the Annual Meeting
The following sets forth information concerning the nominees for election as
directors at the Annual Meeting, including information as to each nominee's age
as of the Record Date, position with the Company and business experience.
Director
Name of Nominee Age Position/Principal Occupation Since
--------------- ------- ----------------------------- --------
James J. Truchard.................... 57 Chairman of the Board of Directors and 1976
President
Jeffrey L. Kodosky (3) ...... 52 Director; Fellow of the Company Charles J. Roesslein (1)1976
Donald M. Carlton (2).......... 52 (3) .... 64 Director; Former ChairmanPresident and Chief Executive 1994
Officer of the Board 2000
of Directors and President of Prodigy
Communications Corp.Radian International LLC
__________- ----------
(1) Member of Compensation Committee
(2) Member of Audit Committee
(3) Member of Nominating and Governance Committee
3
James J. Truchard, PhD,Jeffrey L. Kodosky co-founded the Company in 1976 and has been a director
since that time. He was appointed Vice President of the Company in 1978 and
served as itsVice President, Research and ChairmanDevelopment from 1980 to 2000. Since 2000
he has held the position of the Board of Directors since inception. From 1963Fellow. Prior to 1976, Dr. Truchardhe was the Managing Director ofemployed at the
Acoustical Measurements Division at Applied Research Laboratories ("ARL"), The
University of Texas ("UT Austin"). Dr. TruchardMr. Kodosky received his PhD in Electrical Engineering, his MS in
Physics and his BS in Physics all from
UT Austin.
Charles J. Roesslein was elected as a director by the Board of Directors
effective July 19, 2000. He was elected into Class II as provided in the
Company's Certificate of Incorporation. Mr. Roesslein is the Former Chairman of
the Board of Directors, President and Chief Executive Officer of Prodigy
Communications Corporation. Mr. Roesslein holds a bachelor's degree in
mechanical engineering from the University of Missouri-Columbia and a master's
degree in finance from the University of Missouri-Kansas City.
Incumbent Directors Whose Terms of Office Continue After the Annual Meeting
The following sets forth information concerning the directors whose terms of
office continue after the Annual Meeting, including information as to each
director's age as of the Record Date, position with the Company and business
experience.
Director
Name of Director Age Position/Principal Occupation Since
---------------- --- ----------------------------- --------
L. Wayne Ashby (1)......................... 61 Director 1977
Donald M. Carlton (2)(3)................... 63 Director; Past President and Chief Executive 1994
Officer of Radian International LLC
Jeffrey L. Kodosky (3)..................... 51 Director; Fellow of the Company 1976
Ben G. Streetman (1) (2) (3)............... 61 Director; Dean, College of Engineering at The 1997
University of Texas at Austin
R. Gary Daniels (1) (2).................... 63 Director; Former Senior Vice President and 1999
General Manager of the Microcontroller
Technologies Group, Motorola
__________
(1) Member of Compensation Committee
(2) Member of Audit Committee
(3) Member of Nominating and Governance Committee
L. Wayne Ashby has been a member of the Company's Board of Directors since
1977. From January 1983 until August 1995, Mr. Ashby served as Program Manager
and as Division Head of the U.S. Navy's Electronic Warfare Programs at ARL, UT
Austin. From 1964 to 1980, Mr. Ashby worked at ARL in various positions
including Research Engineer, Project Leader and Division Head. Mr. Ashby was
Vice President, Special Projects at the Company from 1980 to 1983. Mr. Ashby
received his BS in Electrical Engineering and his MS in Electrical Engineering,
both from UT Austin.Rensselaer Polytechnic Institute.
Donald M. Carlton, PhD, has been a member of the Company's Board of
Directors since 1994. From February 1996 until December 1998, Dr. Carlton served
as the President and Chief Executive Officer of Radian International LLC, and
from 1969 until January 1996, Dr. Carlton served as President and Chairman of
the Board of Radian Corporation, both of which are environmental engineering
firms. Dr. Carlton received his BS in Chemistry from the University of St.
Thomas and his PhD in Chemistry from UT Austin. Dr. Carlton is currently a
director of the following publicly traded companies: American Electric Power,
SmithBarney
Investment Trust (fka Concert Investment Series Fund)Trustee of SmithBarney/CITI Mutual Funds (26 Funds), and Valero Energy
Corporation.
Jeffrey L. Kodosky co-foundedIncumbent Directors Whose Terms of Office Continue After the Annual Meeting
The following sets forth information concerning the directors whose terms of
office continue after the Annual Meeting, including information as to each
director's age as of the Record Date, position with the Company in 1976 and has been a director
since that time. He was appointedbusiness
experience.
Director
Name of Director Age Position/Principal Occupation Since
---------------- --- ----------------------------- --------
Ben G. Streetman (1) (2) (3) ...... 62 Director; Dean, College of Engineering at The 1997
University of Texas at Austin
R. Gary Daniels (1) (2) .......... 64 Director; Former Senior Vice President and 1999
General Manager of the Microcontroller
Technologies Group, Motorola
James J. Truchard ................. 58 Chairman of the Board of Directors and 1976
President of the Company
Charles J. Roesslein (1) (2) ...... 53 Director; Former Chairman of the Board of 2000
Directors and President of Prodigy
Communications Corp.
____________
(1) Member of the Company in 1978Compensation Committee
(2) Member of Audit Committee
(3) Member of Nominating and has
served as Vice President, Research and Development from 1980 to 2000.
4
Since 2000 he has held the position of Fellow. Prior to 1976, he was employed at
ARL, UT Austin. Mr. Kodosky received his BS in Physics from Rensselaer
Polytechnic Institute.Governance Committee
Ben G. Streetman, PhD, has been a member of the Company's Board of Directors
since 1997 and1997. He is the Dean of the College of Engineering at UT Austin, as well
as Professor of Electrical and Computer Engineering, Dula D. Cockrell Centennial
Chair in Engineering, and Henry E. Singleton Research Fellow at IC2 Institute.
From 1984 to 1996, Dr. Streetman served as Director of the Microelectronics
Research Center at UT Austin. Dr. Streetman received his BS, MS, and PhD in
Electrical Engineering, all from UT Austin. Dr. Streetman is currently a
director of the following publicly traded companies: Global Marine, Inc. and
ZixIt Corporation (formerly CustomTracks Corporation).
R. Gary Daniels has been a member of the Company's Board of Directors since
1999. Mr. Daniels retired in 1997 from his position as Senior Vice President and
General Manager of the Microcontroller Technologies Group of Motorola, Inc.
after a thirty-two year career with Motorola. Mr. Daniels has a bachelor's
degree in electrical engineering from the University of New Mexico.
James J. Truchard, PhD, co-founded the Company in 1976 and has served as its
President and Chairman of the Board of Directors since inception. From 1963 to
1976 Dr. Truchard was the Managing Director of ARL, UT Austin. Dr. Truchard
received his PhD in Electrical Engineering, his MS in Physics and his BS in
Physics, all from UT Austin.
4
Charles J. Roesslein has served as a director since July 2000. During 2000,
Mr. Roesslein served as the Chairman of the Board of Directors and President of
Prodigy Communications Corporation, an internet service provider. He served as
President of SBC-CATV, a cable television service provider, from 1999 until
2000, and as President of SBC Technology Resources, the applied research
division of SBC Communications Inc., from 1997 until 1999. Prior to 1997, Mr.
Roesslein served in executive officer positions with SBC Communications, Inc.
and Southwestern Bell. Mr. Roesslein holds a bachelor's degree in mechanical
engineering from the University of Missouri-Columbia and a master's degree in
finance from the University of Missouri-Kansas City.
There is no family relationship between any director or officer of the
Company.
Security Ownership
The following table sets forth the beneficial ownership of the Company's
Common Stock as of the Record Date (i) by all persons known to the Company,
based on statements filed by such persons pursuant to Section 13(d) or 13(g) of
the Securities Exchange Act, of 1934, as amended, to be the beneficial owners of more than 5% of the Company's
Common Stock, (ii) by each of the executive officers named in the table under
"Executive Compensation -- Summary Compensation Table," (iii) by each director,
and nominee, and (iv) by all current directors and executive officers as a group:
Approximate
Number of Percentage of Total
Name of Person or Entity Shares (1) Voting Power
------------------------ ---------- ------------------------------ -------------
James J. Truchard.................................... 12,932,211Truchard ......................................... 12,872,211 (2) 25.5%25.1%
11500 North Mopac Expressway
Austin, Texas 78759
Jeffrey L. Kodosky................................... 4,792,558Kodosky ........................................ 4,632,558 (3) 9.4%9.0%
11500 North Mopac Expressway
Austin, Texas 78759
Gail T. Kodosky...................................... 3,692,340Kodosky ........................................... 3,538,340 (4) 7.3%6.9%
11500 North Mopac Expressway
Austin, Texas 78759
L. Wayne Ashby....................................... 2,578,940Ashby ............................................ 2,576,940 (5) 5.1%5.0%
5512 Cuesta Verde Drive
Austin, Texas 78746
William C. Nowlin, Jr................................ 1,397,411Capital Research and Management Company ................... 3,262,500 (6) 2.8%6.4%
333 South Hope Street
Los Angeles, California 90071
R. Gary Daniels...................................... 11,506Daniels ........................................... 19,902 (7) *
Ben G. Streetman..................................... 36,652Streetman .......................................... 42,464 (8) *
Donald M. Carlton.................................... 31,976Carlton ......................................... 26,580 (9) *
Charles J. Roesslein................................. 3,077Roesslein ...................................... 9,117 (10) *
Peter Zogas, Jr...................................... 107,557Jr. .......................................... 101,085 (11) *
Timothy R. Dehne..................................... 86,131Dehne .......................................... 97,431 (12) *
Ruben Reynoso-Mangin................................. 26,130 (13) *
Alexander M. Davern.................................. 36,410Davern ....................................... 49,744 (13) *
Mihir Ravel ............................................... 26,108 (14) *
All executive officers and directors as a group
(16 persons)....................................... 22,200,516 ............................................. 20,722,145 (15) 43.4%40.4%
- ----------
__________
* Represents less than 1% of the outstanding shares of Common Stock.
(1) Except as indicated in the footnotes to this table, the persons named in
the table have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them, subject to community
property laws where applicable.
5
(2) Includes 1,188,500 shares held by a trust for which Dr. Truchard is the
trustee and 123,850116,350 shares held by a corporation of which Dr. Truchard is
president.
(3) Includes an aggregate of 1,065,6001,059,600 shares held in two trusts for the
benefit of Mr. Kodosky's daughters for which Mr. Kodosky is the trustee;
includes an aggregate of 425,000419,000 shares held by a non-profit corporation of
which Mr. Kodosky is president and his wife, Gail T. Kodosky is secretary;
includes 112,100 shares held by a trust for the
5
benefit of Mr. Kodosky and his wife; includes 12,000 shares held in a
charitable remainder trust for the benefit of Mr. Kodosky's brother of
which Mr. Kodosky is the sole trustee with dispositive power over the
securities held therein; includes 22,618 shares held in 18 trusts for
non-immediate family members of Mr. Kodosky of which Mr. Kodosky is the
sole trustee with dispositvedispositive power over the securities held therein; and
includes 1,577,6201,503,620 shares owned by his wife. Mr. Kodosky disclaims
beneficial ownership of the shares owned by his wife. (Cumulatively,
Jeffrey and Gail Kodosky control and/or beneficially own a total of
4,792,5584,632,558 shares.)
(4) Includes 425,000419,000 shares held by a non-profit corporation of which Mrs.
Kodosky is secretary and her husband, Jeffrey L. Kodosky is president;
includes 112,100 shares held by a trust for the benefit of Mrs. Kodosky and
her husband; and includes 1,577,6201,503,620 shares owned by her husband. Mrs.
Kodosky disclaims beneficial ownership of the shares owned by her husband.
(Cumulatively, Jeffrey and Gail Kodosky control and/or beneficially own a
total of 4,792,5584,632,558 shares.)
(5) Includes 2,024 shares subject to options exercisable on or before June 3,
2001,May 14,
2002, and 958 shares held by Mr. Ashby's wife.
(6) The information as to beneficial ownership is based on a Schedule 13G filed
with the Securities and Exchange Commission ("SEC") on February 11, 2002,
reflecting its beneficial ownership of Common Stock as of December 31,
2001. The Schedule 13G states that Capital Research and Management Company
has sole dispositive power with respect to 3,262,500 shares of Common
Stock, sole voting power with respect to no shares of Common Stock and
shared voting power with respect to no shares of Common Stock.
(7) Includes 1,01218,889 shares subject to options exercisable on or before June 3,
2001.
(7)May 14,
2002.
(8) Includes 10,49341,339 shares subject to options exercisable on or before June 3,
2001.
(8)May 14,
2002.
(9) Includes 35,52722,130 shares subject to options exercisable on or before June 3,
2001.
(9)May 14,
2002.
(10) Includes 28,3268,117 shares subject to options exercisable on or before June 3,
2001.
(10)May 14,
2002.
(11) Includes 2,77783,713 shares subject to options exercisable on or before June 3,
2001.
(11)May 14,
2002.
(12) Includes 72,55961,020 shares subject to options exercisable on or before June 3,
2001.
(12)May 14,
2002.
(13) Includes 49,93049,410 shares subject to options exercisable on or before June 3,
2001.
(13)May 14,
2002.
(14) Includes 25,10426,108 shares subject to options exercisable on or before June 3,
2001.
(14)May 14,
2002.
(15) Includes 36,076521,092 shares subject to options exercisable on or before June 3,
2001.
(15) Includes 393,422 shares subject to options exercisable on or before June 3,
2001.May 14,
2002.
Board Meetings and Committees
The Board of Directors of the Company held a total of 8 meetings during
2000.2001. During 2000,2001, the Board of Directors had a standing Audit Committee,
Compensation Committee, and Nominating and Governance Committee.
The Audit Committee, which currently consists of directors Donald M.
Carlton, William C. Nowlin, Jr., Ben G. Streetman, R. Gary Daniels and Charles J. Roesslein, met 311
times during 2000.2001. The Audit Committee recommends to the Board of Directors the
engagement of the Company's independent accountants, reviews with such
accountants the plan, scope and results of their examination of the consolidated
financial statements and determinesreviews the independence of such
6
accountants. The Audit
Committee inquires about any significant risks or exposures and assesses the
steps management has taken to minimize such risk to the Company, including
adequacy of insurance coverage and the strategy for management of foreign
currency risk. The Audit Committee also reviews the Company's compliance with
matters relating to antitrust, environmental, EEOCEqual Employment Opportunity
Commission, export and SEC regulations.
6
The Compensation Committee, which currently consists of directors William C.
Nowlin Jr.,R. Gary
Daniels, L. Wayne Ashby, Ben G. Streetman R. Gary Daniels and Charles J. Roesslein, met 98 times
during 2000.2001. The Compensation Committee sets the level of compensation of
executive officers and advises management with respect to compensation levels
for key employees. The Compensation Committee also administers the Company's 1994
Incentive Plan and Employee Stock Purchase Plan.
The Nominating and Governance Committee, which currently consists of
directors Donald M. Carlton, Jeffrey L. Kodosky and Ben G. Streetman, and William C. Nowlin,
Jr., met 2 times1 time
during 2000.2001. The Nominating and Governance Committee recommends to the Board of
Directors the selection criteria for board members, compensation of outside
directors, appointment of board committee members and committee chairmen, and
develops board governance principles. The Nominating and Governance Committee
will consider nominees recommended by stockholders provided such recommendations
are made in accordance with procedures described in this Proxy Statement under
"Deadline for Receipt of Stockholder Proposals".
No director attended fewer than 75% of the total number of meetings of the
Board of Directors orand the total number of meetings held by all committees of
the Board of Directors on which he served.
Board Compensation
Non-employee directors are paid a $10,000 annual retainer ($12,000 for
committee chairs), $1,000 for each Board meeting attended in person, $750
($1,000 for committee chairs) for each committee meeting attended in person,
$150 for each Board or committee meeting attended telephonically, and
reimbursement of out-of-town travel expenses. Prior to MarchSince 1997, non-employee directors
were also entitled to receive options (exercisable at fair market
value on the date of grant) to purchase 2,025 shares of Common Stock upon
joining the Board, and 1,012 shares on June 1st of each year. Non-employee
directors no longer receivehave not received automatic annual option grants although they may still
exercise options previously granted to them and are currently eligible to
receive discretionary option grants under the terms of the Company's Amended and
Restated 1994 Incentive Plan. Employee directors of the Company do not receive
any additional compensation for services provided as a director.
Executive Officers
The following sets forth information concerning the persons currently
serving as executive officers of the Company, including information as to each
executive officer's age as of the Record Date, position with the Company and
business experience. Officers of the Company serve at the discretion of the
Board and are appointed annually.
Name of Executive Officer Age Position
------------------------- ------- --------
James J. Truchard..................... 57Truchard ................ 58 Chairman of the Board of Directors and President
Timothy R. Dehne...................... 35Dehne ................. 36 Vice President, Engineering
Peter Zogas, Jr....................... 40Jr .................. 41 Vice President, Sales
Mark A. Finger........................ 43Finger ................... 44 Vice President, Human Resources
Ruben Reynoso-Mangin.................. 53Reynoso-Mangin ............. 54 Vice President, Manufacturing
John M. Graff........................ 36Graff .................... 37 Vice President, Marketing
Mihir Ravel........................... 41Ravel ...................... 42 Vice President, Corporate Development
Raymond C. Almgren ............... 36 Vice President, Product Strategy
Alexander M. Davern................... 34Davern .............. 35 Chief Financial Officer and Treasurer
David G. Hugley....................... 37Hugley .................. 38 Secretary, General Counsel
See "Election of Directors" for additional information with respect to Dr.
Truchard.
Timothy R. Dehne joined the Company in 1987 and is currently Vice
President, Engineering. He previously served as the Company's Vice President,
Marketing; Vice President, Strategic Marketing; Strategic Marketing Manager;
GPIB
7
Marketing Manager; GPIB Product Manager and as an Applications Engineer.
Mr. Dehne received his BS in Electrical Engineering from Rice University.
Peter Zogas, Jr., joined the Company in 1985 and is currently Vice
President, Sales. He served as the Company's National Sales Manager from July
1992 until his appointment as Vice President, Sales in July 1996. Earlier
positions with the Company include Business Development Manager, Regional Sales
Manager, and Sales Engineer. Prior to joining the Company, Mr. Zogas worked as
an engineer at Texas Instruments and, prior to that, at AT&T. Mr. Zogas
7
received his BS in Electrical Engineering from Drexel University. He is
co-holder of one patent on multichip packaging issued in 1986.
Mark A. Finger joined the Company in August 1995 as Director of Human
Resources and became Vice President, Human Resources in December 1996. Prior to
joining the Company, Mr. Finger was employed by Rosemount Inc., and Fisher
Rosemount Systems Inc., from 1981 to 1995.1995 (both of which are process management
companies). Positions held at Rosemount include Human Resources Manager,
Staffing Manager, Senior Human Resources Representative, Compensation and
Benefits Specialist and Staffing Specialist. Mr. Finger received his BS in
Marketing from St. Cloud University.
Ruben Reynoso-Mangin joined the Company in February 1997 as Vice President,
Manufacturing. Prior to joining the Company, Mr. Reynoso-Mangin was employed by
3M Corporation from 1972 to 1997. Positions held at 3M Corporation include Plant
Manager, Plant Quality Manager, Technology Manager, and Product Manager. Mr.
Reynoso-Mangin received his BS in BSIE from the California State Polytechnic
University.
John M. Graff joined the Company in June 1987 and is currently Vice
President, Marketing. He previously served as the Company's Acting Vice
President, Marketing; Director, Corporate Marketing; Corporate Marketing
Manager; Product Marketing Manager and as an Applications Engineer. Mr. Graff
received his BS in Electrical Engineering from UT Austin.
Mihir Ravel joined the Company in April 2000 as Vice President, Corporate
Development. Prior to joining the Company, Mr. Ravel was employed by Tektronix,
Inc., a test and measurement company, from 1982 to 2000. Mr. Ravel was a
Director/Fellow at Tektronix and worked in the area of R&D Management. Mr. Ravel
received his BS in Physics, Electrical Engineering and Computer Science from
Massachusetts Institute of Technology.
Raymond C. Almgren joined the Company in June 1987 and is currently Vice
President, Product Strategy. He previously served as the Company's Director of
Engineering, Director of Marketing, Product Manager, and as an Applications
Engineer. Mr. Almgren received his BS in Electrical Engineering from UT Austin.
Alexander M. Davern joined the Company in February 1994 and is currently
Chief Financial Officer and Treasurer. He previously served as Corporate
Controller and International Controller. Prior to joining the Company, Mr.
Davern worked both in Europe and in the United States for the international
accounting firm of Price Waterhouse, LLP. Mr. Davern received his BBA and a
master's degreediploma in professional accounting from University College in Dublin, Ireland.
David G. Hugley joined the Company in 1991 as General Counsel and currently
also serves as Secretary of the Company. Mr. Hugley received his BBA and JD from
UT Austin and is a licensed attorney in Texas.
8
Executive Compensation
Summary Compensation Table. The following table shows the compensation paid
by the Company during the years ended December 31, 2001, 2000, 1999, and 19981999 to the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company whose total salary and bonus exceeded $100,000
(collectively, the "Named Executive Officers"):
Long-Term
Compensation
Awards
Securities
Annual SecuritiesUnderlying
Compensation Underlying
------------------------ Options All Other
-------------------------
Name and Principal Position Year Salary Bonus(1) (# of Shares) Compensation(2)
--------------------------- ----------- ----------- ------------ ---------- ------------- ----------------------------- ----------------
Dr. James J. Truchard........................................ 2000 $195,797 $47,853Truchard ................... 2001 $193,348 -- $5,721-- $ 5,631
Chairman of the Board and President 2000 195,797 $47,853 -- 5,721
1999 195,797 41,117 -- 5,470
1998 195,797 27,020 -- 5,470
Peter Zogas, Jr.............................................. 2000 $198,926 $48,618 20,000 $5,728Jr. ........................ 2001 $162,338 $ 1,407 10,000 $ 5,569
Vice President, Sales 2000 198,926 48,618 20,000 5,728
1999 154,002 33,840 6,000 5,239
1998 145,561 20,087 17,250 5,071
Timothy R. Dehne............................................. 2000 $171,250 $42,853 20,000 $5,579Dehne ........................ 2001 $184,175 $ 1,407 10,000 $ 5,612
Vice President, Engineering 2000 171,250 42,853 20,000 5,579
1999 149,750 32,948 6,000 4,853
1998 138,500 19,113 16,950 4,847
Ruben Reynoso-Mangin......................................... 2000 $146,250 $37,743 10,000 $4,571
Vice President, Manufacturing 1999 137,625 30,401 6,000 4,319
1998 132,063 18,225 6,950 3,295
Alexander M. Davern.......................................... 2000 $163,750 $41,021 75,000 $5,160Davern ..................... 2001 $184,175 $ 1,407 10,000 $ 4,967
Chief Financial Officer 2000 163,750 41,021 75,000 5,160
and Treasurer 1999 117,625 26,701 22,500 3,058
and Treasurer 1998 101,625 14,024 16,500 2,680
- ------------------------------------------------------------------------------------------------------------------------------------Mihir Ravel (3) ......................... 2001 $189,025 $ 1,407 30,000 $ 372
Vice President, Corporate 2000 133,122 52,535(4) 100,000 36,407(5)
Development
- --------------------------------------------------------------------------------
(1) Bonus amounts for 2001, 2000, 1999, and 19981999 include bonus amounts paid in fiscal
year 2002, 2001, 2000, and 1999,2000, respectively, for services rendered in fiscal
2001, 2000, 1999, and 1998,1999, respectively.
(2) Represents Company contributions to the Company's 401(k) plan on behalf of
the Named Executive Officers and the full dollar value of premiums paid by
the Company for term life insurance on behalf of the Named Executive
Officers for 2001, 2000, 1999, and 1998.1999.
(3) Mr. Ravel joined the Company in April 2000 under a compensation plan
providing for the payment of one year's salary if his employment is
constructively terminated or terminated without cause.
(4) Includes a signing bonus of $20,000.
(5) Includes relocation expenses of $33,857 and a housing allowance of $2,550.
9
Option Grants in Last Fiscal Year. The following table sets forth each grant
of stock options made during the fiscal year ended December 31, 20002001 to each
Named Executive Officer.
Potential
Realizable
Individual Grants Value at Assumed
--------------------------------------------------------------------
% of Total Annual Rates of
% of TotalOptions Stock Price
Options Appreciation
Granted to Exercise for Option Term(1)Appreciation
Options Employees or Base Expiration -------------------------for Option Term(1)
---------------------
Name Granted in FY00FY01 Price Date 5% ($) 10% ($)
- ---------------------------------------------- --------- --------------- -------- ---------- --------------------- ------------------- --------- ----------
Dr. James J. Truchard.....................Truchard ........... -- -- -- -- -- --
Peter Zogas, Jr...........................Jr. ................ 10,000 (2) .67% $31.56 3/21/11 $198,495 $ 503,025
Timothy R. Dehne. ............... 10,000 (2) .67% 31.56 3/21/11 198,495 503,025
Alexander M. Davern ............. 10,000 (2) .67% 31.56 3/21/11 198,495 503,025
Mihir Ravel ..................... 10,000 (2)(3) .67% 31.56 3/21/11 198,495 503,025
20,000 (2) 1.4% $48.125 3/22/10 $ 605,311 $1,533,977
Timothy R. Dehne.......................... 20,000 (2) 1.4% $48.125 3/22/10 $ 605,311 $1,533,977
Ruben Reynoso-Mangin...................... 10,000 (2) * $48.125 3/22/10 $ 302,656 $ 766,989
Alexander M. Davern....................... 75,000 (2) 5.2% $48.125 3/22/10 $2,269,917 $5,752,414(3) 1.34% 33.45 7/18/11 420,730 1,066,214
_________
* Represents less than 1% of the total number of options granted in 2000.
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission ("SEC")SEC and therefore are not intended to
forecast possible future appreciation, if any, of the Company's stock
price. The Company did not use an alternative formula for a grant date
valuation, as the Company does not believe that any formula will determine
with reasonable accuracy a present value based on future unknown or
volatile factors.
(2) These options have a term of ten years and vest as to 1/120th of the shares
per month after the date of grant, subject to acceleration based upon
Company financial performance.
(3) These options are subject to a maximum of twelve months of accelerated
vesting if the optionee's employment is constructively terminated or
terminated without cause within three years of his hire date.
Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Values.
The following table sets forth, for each of the Named Executive Officers, the
year-
endvalue realized for options exercised during the year and the year-end value of
unexercised options.
Value (1) of Unexercised
Number of Unexercised In-the Money
Shares Acquired Value Realized Options at Year-End: Options at Year-End:
Shares Acquired Value -------------------------------- --------------------------------------------------------------- -----------------------------------
Name on Exercise (#) Realized ($) Exercisable(#) Unexercisable(#) Exercisable($) Unexercisable($)
---- -------------- ------------ -------------- ---------------- -------------- ----------------------------- -----------------
Dr. James J. Truchard.....Truchard ..... -- -- -- -- -- --
Peter Zogas, Jr...........Jr. .......... -- -- 60,677 57,048 $2,215,571 $1,287,96680,072 47,653 $2,115,813 $1,102,157
Timothy R. Dehne.......... 22,479 $645,206 38,113 56,833 $1,392,301 $1,281,658
Ruben Reynoso-Mangin......Dehne .......... -- -- 19,052 36,098 $ 564,473 $ 812,68857,382 47,564 1,540,548 1,100,747
Alexander M. Davern....... 3,514 $121,770 25,650 104,519 $ 631,885 $1,091,286Davern ....... 3,388 $144,005 44,582 92,199 1,167,759 2,681,762
Mihir Ravel ............... -- -- 22,776 107,224 853,189 3,031,986
___________________
(1) Based on a fair market value of $48.5625,$37.46, which was the closing price of the
Company's Common Stock on December 29, 2000,31, 2001, as reported by the Nasdaq
National Market. The number of unexercised options in the table includes
options that have an exercise price that exceeded the closing price of the
Company's common stock on the NASDAQ Stock
Market.December 31, 2001. The value assigned to these
unexercised options is zero.
10
Compensation Committee Interlocks and Insider Participation
In 2000,2001, the Compensation Committee consisted of Directors William C. Nowlin,
Jr.,directors R. Gary Daniels,
Ben G. Streetman, L. Wayne Ashby R. Gary Daniels and Charles J. Roesslein. Dr. Truchard may
participate in the deliberations of the Compensation Committee with respect to
the compensation of the Company's executive officers (other than himself),
changes in the incentive plan and in other compensation matters.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent10% of a registered class of the
Company's equity securities, to file reports of ownership on Form 3 and changes
in ownership on Form 4 or Form 5 with the SEC. Such officers, directors and 10%
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, the Company believes that, during the fiscal year
ended December 31, 2000,2001, all Section 16(a) filing requirements applicable to its
officers, directors and 10% stockholders were satisfied.
Performance Graph
The following line graph compares the cumulative total return to
stockholders of the Company's Common Stock from March 13, 1995 (the date of the
Company's initial public offering) to December 31, 20002001 to the cumulative total
return over such period of the (i) Nasdaq Composite Index and (ii) Russell 2000
Index. The graph assumes that $100 was invested on March 13, 1995 in the
Company's common stock at its initial public offering price of $6.44 per share
and in each of the other two indices and the reinvestment of all dividends, if
any. Stockholders are cautioned against drawing any conclusions from the data
contained therein, as past results are not necessarily indicative of future
performance.
The information contained in the Performance Graph shall not be deemed to
be "soliciting material" or to be "filed" with the SEC, nor shall such
information be incorporated by reference into any future filing under the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities Exchange Act, of 1934,
as amended (the "Exchange Act"),
except to the extent that the Company specifically incorporates it by reference
into any such filing. The graph is presented in accordance with SEC
requirements.
Stockholders are cautioned
against drawing any conclusions from the data contained therein, as past results
are not necessarily indicative of future performance.
[Performance Graph Appears Here]
- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3/13/95 12/29/95 12/31/96 12/31/97 12/31/98 12/31/99 12/29/00 12/31/01
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
National Instruments 100 140 221 300 353 594 753 581
Instruments
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nasdaq 100 132 161 199 270 507 308 243
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Russell 2000 100 123 142 171 161 197 189 191
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11
Report of the Compensation Committee Regarding Executive CompensationCompensation*
The Compensation Committee, comprisedcomposed of directors Nowlin,Daniels, Streetman, Ashby
Daniels
and Roesslein, is responsible for recommending to the Board of Directorsdetermining the compensation programs and
levels of pay for the Company's executive officers. The Committee also advises
management on pay programs and levels for other employees. The Committee
regularly retains anutilizes independent compensation
consulting firm to providesurvey data for analyses of competitive industry pay levels
and practices, and to adviseguide the Committee on appropriate pay levels for the
Company.
Compensation Philosophy and Objectives. The Company's basic philosophy is to
align executive compensation with increases in stockholder value through growth
in sales and operating profits. Primarily, this is accomplished through the use
of stock options, which provide compensation in direct proportion to increases
in stockholder value, and profit sharing. In addition, the Company believes it
is important to emphasize teamwork, entrepreneurship and active participation by
all employees. This is accomplished through providing options to a majority of
full-time, exempt domestic employees and similarly situated international
employees, and through cash incentives, through which both executivesexecutive and other
employees receive cash bonuses based on company-wide financial goals. Finally,
it is the Company's philosophy that no special perquisites should be provided to
senior executives.
Executive Compensation Programs. The Company's executive compensation
programs consist of three principal elements: base salary, cash bonus and stock
options. The Company emphasizes incentive compensation in the form of stock
options and bonuses, rather than base salary. The Compensation Committee has
adopted a guideline that executives should be paid competitive base salaries.
The Board of
DirectorsCommittee sets the annual base salary for executives after consideration of the
recommendations of the Compensation Committee.executives. Prior to making its
recommendations,determination, the Compensation Committee reviews historical compensation levels
of the executives, evaluations of past performance, assessments of expected
future contributions of the executives, competitive pay levels and programs
provided by other comparable companies, and general industry pay practices. In
making its determinations, the Committee does not utilize any particular indices
or formulae to arrive at each executive's recommended pay level. In a
demonstration of leadership during the economically challenging times of 2001,
the executive officers proposed that the Company temporarily reduce their base
salaries. In response, the base salary of each executive officer, except the
Vice President of Sales, was adjusted to reflect a 5% reduction effective
October 1, 2001.
For many years, the Company has maintained a cash bonus plan under which
executive officers participate. In recent years, this plan provided for a target
incentive to be paid based on achieving pre-determined levels of revenue growth
and profitability. For fiscal 2001, 2000 1999 and 19981999 these goals were 40% revenue
growth and 18% operating profit as a percent of revenue, the same goals as for
all other employees. At the end of each year, actual results for the Company are
compared to these targets and executive bonuses are based on actual Company
performance in relation to these factors. If there is no growth or no
profitability, no cash bonuses are payable to executive officers. Individual
performance is not considered in determining the bonus of individual for
officers
for the cash bonus program.
In 1999, the Company added a discretionary cash bonus program for
executive officers and other employees which is paidfunded based on
individual performance andupon the
achievement of the Company's minimum annualquarterly growth goal.goal and with payments
based upon individual performance. The program was adjusted as of the second
quarter of 2000 to provide that if the Company meets its minimum quarterly
revenue growth goal, a percentage of payroll will be available as a
discretionary cash bonus pool for distribution to executive and other employees.
For fiscal 2000,year 2001, the minimum annual quarterly growth goal was 20% revenue growth
over the same period in the prior year. As a result of the program, executives
and other employees are eligible forto receive the discretionary company cash bonus on a
quarterly basis. IfSeparate from the discretionary cash bonus program, in December
2001, the Company meets its minimum quarterly revenue growth goal for the
quarter,paid each executive officer, except Dr. Truchard, a percentagebonus
award of payroll will be available for distribution to
executives and employees. The program was adjusted asapproximately $1,400 in appreciation of the second quarter of
2000 to make 2% of payroll available as discretionary company cash bonus for
distribution to executives and employees.their management efforts
throughout fiscal year 2001. In addition, the Vice President, Sales is eligible
for a separate company sales commission program. Theprogram based upon growth and
profitability performance measures were approved by the Board of Directors.
Total compensation for executive officers also includes long-term
incentives in the form of stock options, which are generally provided through
initial stock option grants at the date of hire and periodic additional stock
option grants. Stock options are instrumental in promoting the alignment of
long-term interests between the Company's executive officers and stockholders
due to the fact that executives realize gains only if the stock price increases
over the fair market value at the date of grant and the executives exercise
their options. In determining the amount of such grants, the Committee evaluates
12
the job level of the executive, responsibilities of the executive, and
competitive practices in the industry. All options are granted at 100% of fair
market value at the date of grant. Options to executive officers and other
employees vest over a period of five years toor ten years, subject to acceleration
based on Company performance (in case of special option grants to 12
executives);
however, Mr. Ravel also has the right to a maximum of twelve months of
accelerated vesting of his stock holdings if his employment is constructively
terminated or terminated without cause within three years of his hire date. The
long-term value realized by executives through option exercises can be directly
linked to the enhancement of stockholder value.
Chief Executive Officer Compensation. While the Board was highly pleased
with Dr. Truchard's performance in 2000,2001, at his request, the Chief Executive
Officer's base salary was not changed during the fiscal yearreduced along with other executive officers (as
discussed above), and he received no stock options. Based on the same formula
applied to other executive officers, Dr. Truchard'sTruchard did not receive a bonus for
2000 was $47,853 based on2001 and declined to receive the Company's revenue growth
of 24.44% and its profit percentage of 18.63%.$1,400 bonus awarded to the other executive
officers. Dr. Truchard is the Company's largest stockholder with an ownership of
approximately 26%25% of the Company's stock.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), imposes a limit on tax deductions for annual compensation in excess of
one million dollars paid by a corporation to its chief executive officer and the
other four most highly compensated executive officers of a corporation.
Deductions are, however, permitted if certain conditions are met, including a
requirement that the plan under which such compensation is paid be reapproved by
stockholders every five years. None of the compensation paid by the Company in
fiscal 20002001 was subject to the limitation on deductibility. The Compensation
Committee will continue to assess the impact of Section 162(m) of the Code on
its compensation practices and determine what further action, if any, is
appropriate.
Respectfully Submitted,
William C. Nowlin, Jr.R. Gary Daniels
Ben G. Streetman
L. Wayne Ashby
R. Gary Daniels
Charles J. Roesslein
13
Notwithstanding anything to* The foregoing Report of the contrary set forth in any of National
Instruments' previous or future filings under the Securities Act or the Exchange
Act that might incorporate this Proxy Statement or future filings with the SEC,
in whole or in part, the following report shallCompensation Committee Regarding Executive
Compensation does not constitute soliciting material and should not be deemed
to befiled or incorporated by reference into any such filing.other Company filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent the Company specifically incorporates this Report by express reference
therein.
13
Report of the Audit CommitteeCommittee*
The Audit Committee of National Instruments' Board of Directors is composed of fivefour independent directors and operates
under a written charter adopted by the Board of Directors which is attached hereto as Appendix A. The Audit Committee
believes it has fulfilled its responsibilities under this charter during the
latest fiscal year.Directors. The members of the
Audit Committee are Donald M. Carlton, Chairman, William C. Nowlin, Jr., Ben G. Streetman, R. Gary
Daniels and Charles J. Roesslein. All members of the Audit Committee meet the
independence standards of Rule 4200(a)(15) of the National Association of
Securities Dealers' listing standards.
In March 2002, the Board of Directors amended the Committee's charter to
incorporate restrictions on the use of the Company's independent auditor,
PricewaterhouseCoopers LLP, to provide non-audit services. (The amended charter
is attached to this proxy as Appendix A.)
Management is responsible for National Instruments' internal controls and
the financial reporting process. National Instruments' independent accountants,
PricewaterhouseCoopers LLP,auditors are
responsible for performing an independent audit of National Instruments'
consolidated financial statements in accordance with generally accepted auditing
standards and to issue a report thereon. The Audit Committee's responsibility is
to monitor and oversee these processes.
The Audit Committee schedules its meetings and conference calls with a view to
ensuring it devotes appropriate attention to all of its tasks. The Committee
convened 11 times during fiscal 2001 to carry out its responsibilities. The
Committee regularly meets privately with the independent auditors, internal
audit, and management, each of whom has unrestricted access to the Committee.
As part of its oversight of the Company's financial statements, the
Committee reviewed and discussed with both management and the independent
auditors the Company's quarterly and audited fiscal year financial statementsresults,
including a review of National Instruments for the fiscal year ended December 31, 2000 with
National Instruments' management and PricewaterhouseCoopers.Annual Report on Form 10-K. The Audit
Committee also discussed with the PricewaterhouseCoopers theindependent auditors any matters required to
be discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended.
The Audit Committee has also received the written disclosures from
PricewaterhouseCoopers required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the Audit Committee has
discussed the independence of PricewaterhouseCoopers with that firm. The
Committee has implemented a procedure to monitor auditor independence.
Based upon the Audit Committee's discussion with management and
PricewaterhouseCoopers and the report of PricewaterhouseCoopers to the Audit
Committee, the Audit Committee recommended that the Board of Directors include
the audited consolidated financial statements in National Instruments' Annual
Report on Form 10-K for the year ended December 31, 2000,2001, which was filed with
the Securities and Exchange Commission.SEC.
AUDIT COMMITTEE
Donald M. Carlton, Chairman
William C. Nowlin, Jr.
Ben G. Streetman
R. Gary Daniels
Charles J. Roesslein
* The foregoing Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference into any
other Company filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically incorporates this
Report by express reference therein.
14
PROPOSAL TO RATIFY THETWO:
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of its Audit Committee, has
appointed, subject to approval by the Company's stockholders,
PricewaterhouseCoopers LLP, independent accountants, to audit the books, records
and accounts of the Company for the current fiscal year ending December 31,
2001.2002. PricewaterhouseCoopers LLP has audited the Company's financial statements
since the fiscal year ended December 31, 1993.
Audit Fees
The aggregate fees billed for professional services rendered for the audit
of the Company's annual financial statements for the fiscal year ended December
31, 2000,2001, and for the reviews of the financial statements included in the
Company's Quarterly Reports on Form 10-Q for that fiscal year, were
approximately $212,000
dollars.$190,000.
Financial Information Systems Design and Implementation Fees
PricewaterhouseCoopers LLP did not render to the Company any professional
services relating to financial information systems design and implementation for
the fiscal year ended December 31, 2000.2001.
All Other Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for services
rendered to the Company, other than the services described above under "Audit
Fees" for the fiscal year ended December 31, 2000,2001, were approximately $375,000. The
majority of these fees relate to$201,000
for tax compliance and tax consulting, $101,000 for statutory audits for various
international locations and $10,000 for other services.
Vote Required
The affirmative vote of the holders of a majority of the Company's Common
Stock represented and voting at the meeting will be required to approve and
ratify the Board's selection of PricewaterhouseCoopers LLP. With respect to such
matter, an abstention from voting will have the same affect as a vote against
the proposal. Broker non-votes do not count as votes for or against the proposal
and are not considered in calculating the number of votes necessary for
approval.
The Board of Directors recommends a vote "FOR" the approval and
ratification of PricewaterhouseCoopers LLP as the Company's independent auditors
for 2001.2002. In the event of a negative vote on such ratification, the Board of
Directors will reconsider its selection.
A representative of PricewaterhouseCoopers LLP is expected to be available
at the Annual Meeting to make a statement if such representative desires to do
so and to respond to appropriate questions.
In making its recommendation to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year ending December 31, 2002, the Audit Committee has considered whether
the non-audit services provided by PricewaterhouseCoopers LLP are compatible
with maintaining any independence of PricewaterhouseCoopers LLP.
15
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed proxy card to vote the shares they represent as
the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ DAVID G. HUGLEY
David G. Hugley
Secretary
Austin, Texas
April 25, 2001
154, 2002
16
APPENDIX A
Audit Committee Charter
National Instruments Corporation
(as amended on March 20, 2002)
Policy
The Audit Committee shall provide assistance to the corporate directorsBoard of Directors in
fulfilling theirits responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
National Instruments Corporation (NI), and the quality and integrity of the
financial reports of NI. In so doing, it is the responsibility of the audit
committee to maintain a free and open means of communication between the
directors, the independent auditors, the internal auditor, and the financial
management of NI.
Membership Requirements
The Board shall elect from its members an Audit Committee of at least three
members. The Board shall also appoint a Chairman of the Audit Committee. The
Audit Committee members must meet the following requirements:
Independence:
- -------------
1. Members must not be an employee of NI or any affiliate within the past
three years.
2. Members must not be an immediate family member of an NI executive
officer who currently serves in that role or did so in any of the past
three years.
3. MemberMembers may not receive compensation in excess of $60,000 during the
previous fiscal year, other than compensation for board service,
benefits under a tax-qualified retirement plan, or nondiscretionary
compensation.
4. Members must not be a partner, controlling shareholder, or executive
officer of any for-profit business that receives payments from NI.
This applies where the payments, other than solely from the
investments in NI's securities, in any of the past three years
exceeded the greater of 5% of either organization's consolidated gross
revenues for the year or $200,000.
5. A member must not be an executive of another corporation that has on
its compensation committee an NI executive.
6. OneThe Board of Directors may appoint one member exception is allowed forof the Committee who
does not meet the above rules.criteria.
Qualifications:
- ---------------
1. Members must be able to read and understand fundamental financial
statements, including a balance sheet, income statement, and cash flow
statement.
2. One member is required to have extensive financial knowledge,
including being or having been a chief executive, chief financial, or
other senior officer with financial oversight responsibilities.
Responsibilities
It shall be the duty of the Audit Committee to:
1. Recommend to the Board of Directors the selection of independent
public accountants for the ensuing year and to review and
recommend discharge, it should be noted that the independent
auditors ultimately are accountable to the Board and the Audit
Committee;
2. Review and approve the scope of the independent public
accountants' annual audit activity and the proposed fees
therefore;
3. Confirm with the independent auditors with a formal written statement
delineating all relationships between the auditor and NI, theNI. The
independent auditor is responsible for discussing with the audit
committee any disclosed relationships or services that may impact
auditor objectivity and independence;
4. Review and approve the extent of non-auditThe Committee shall periodically review services provided annually by the
independent publicaccountants. NI may engage the independent
accountants or an affiliated consulting firmwithout Committee approval for (i) the following
audit and related services: financial accounting research and
consultations; services related to SEC filings; carve-out audits;
benefit plan audits; statutory audits; due diligence reviews; and
(ii) the fees proposed therefore;following tax services: research and consultations;
international tax consulting; tax assistance and compliance in
international locations; assistance with transfer pricing;
expatriate tax services; consultations and assistance with other
taxes including state and local taxes, sales and use taxes,
customs and duties; review of intercompany agreements; and
assistance with international manufacturing tax issues. Services
of the independent accountants, excluding the financial audit and
statutory audits, shall not exceed in the aggregate $150,000 per
year without approval of the Committee. Under special
circumstances, NI may engage the independent accountants for
other services as approved by the Committee.
5. Review with NI's independent public accountants and management,
the nature and adequacy of NI's accounting system and practices
and its systems of internal controls;
6. Review with independent public accountants and management the
adequacy of internal and external audit activities to provide
reasonable assurance that material instances of fraud,
illegality, errors, and irregularities are detected and
appropriately corrected;
7. Review the internal audit charter and function of NI including
the independence and authority of its reporting obligations, the
proposed audit plans for the coming year, and the coordination of
such plans with the independent auditors;
8. Review NI's certified financial statements with management and
the independent public accountants including any changes in the
audit plan or expansion of audit scope and any disputes and
difficulties in the audit. Review the nature and extent of any
significant changes in accounting principles or the application
thereof, reserves established or adjustments reflected therein;
9. Review with the independent accountants and management quarterly
review results;
10. ReviewAs applicable, review with the independent public accountants
their comments, both written and oral, to management regarding
the annual examination and the adequacy of management's response;
11. Exercise general oversight of NI's financial reporting processes;
maintain general familiarity with financial reporting practices
and accounting standards and principles followed by NI; review
with the independent public accounts and management significant
developments in accounting and financial reporting standards and
requirements and their impact upon NI. Inquire about any
significant risks or exposures and assess the steps management
has taken to minimize such risk to NI, including adequacy of
insurance coverage, management of foreign currency risk, and
other risks.
12. Maintain free and open communication with the independent public
accountants and legal counsel; insure that the independent public
accountants are instructed to communicate directly with the
Committee regarding any matter which, in their judgment, has not
been satisfactorily resolved with management; also independent
auditors are to communicate all matters necessary as required by
SAS 61, Communications with Audit Committees;
13. Review filings with the SEC and other published documents
containing NI's financial statements and consider whether the
information contained in these documents is consistent with the
information contained in the financial statements;
14. Review with management and, as appropriate, the independent
accountants the interim financial report before it is filed with
the SEC or made public in a press release. Review NI's process
for disclosure of financial datadata. Review policies and procedures
with respect to officers' expense accounts and perquisites,
including their use of corporate assets, and consider the results
of any review of these areas by the independent accountant;
A-2
15. Monitor compliance with NI's Business Ethics, Antitrust, and
Conflicts of Interest Policies, and such other Company policies
an may be appropriate; and review such reports as may be required
under such policies or otherwise directed by the Board;
16. Review with NI's General Counsel, independent accountants, and
management litigation and other legal matters and regulatory
matters which may be material to NI's financial condition or
operations;
17. Review with NI's Compliance Officer, or other appropriate management, the reports on compliance with
regulatory matters including environmental, equal employment
opportunity, and SEC regulations;
18. Hold such regulatory meeting each year as may be appropriate and
such special meetings as may be called by the Chairman of the
Committee, or at the request of the independent public
accountants, NI's Chief Financial Officer or the General Counsel;
19. Review with management any differences of opinion with the
independent public accountants over a significant accounting
issue which has led management to seek a second opinion from
another independent public accounting firm; and
20. Report through its Chairman to the Board of Directors following
meetings of the Committee.
A-2
21. Meet privately with independent auditors, internal audit, and
management, each of whom shall have unrestricted access to the
Committee.
Audit Committee Disclosures:
The Audit Committee must include a report in the annual proxy statement
containing the following:following information:
1. The Committee reviewed and discussed the audited financial statements
with managementmanagement.
2. The Committee discussed with the independent auditors the matters
requiring discussion by SAS 61.
3. The Committee received written disclosures and letter from the
auditors required by Independence Standards Board Standard No. 1, and
discussed with the auditors their independence.
4. Based on the above, the Committee recommends to the full board that
the audited financial statements be included in NI's Annual Report on
Form 10K.10-K.
The Audit Committee must disclose the following in the annual proxy:
1. StatementA statement that NI has adopted an Audit Committee Charter and has
fulfilled its responsibilities under this Charter during the latest
year and include a copy of the Charter as an attachment to the proxy
statement at least every three years;years.
2. TheA statement as to whether each member of the Audit Committee's independence as defined above, if thereCommittee is an
exception the nature of the relationship making the individualindependent director and, if a director is not independent, and the reasons forreason
that the Board's determination must be
disclosed;director is not an independent director together with an
explanation of why the Board believes such director should continue to
serve on the Audit Committee.
The Committee must provide written confirmation to the NASD/AMEX on audit
committee member qualifications and related board determinations, as well as the
review and re-evaluation of the audit committee charter.
In addition, the Audit Committee shall have and may exercise all the powers and
authority of the Board in connection with the performance of its duties and
responsibilities, including the authority to call upon Company officers and
employees for such assistance and support as it deems appropriate, and to instituteengage
such special counsel or experts as it may require to properly discharge its
responsibilities.
The above prescribed responsibilities were authorized by Board resolutions dated
June 22, 1994, March 19, 1998, March 24, 1999, December 20, 2000, and March 21, 2001.20,
2002.
The Audit Committee shall have such additional authority and duties, as the
Board by resolution shall prescribe.
A-3
DETACH HERE
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VOTE BY INTERNET - www.proxyvote.com
-----------------
Use the Internet to transmit your voting instructions
and for electronic delivery of information up until 11:59
P.M. Eastern Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you
NATIONAL INSTRUMENTS CORPORATION access the web site. You will be prompted to enter
11500 N. MOPAC EXPRESSWAY your 12-digit Control Number which is located below
BUILDING B to obtain your records and to create an electronic voting
AUSTIN, TEXAS 78759 instruction form.
ATTN: CORPORATE SECRETARY
VOTE BY PHONE - 1-800-690-6903
AUTO DATA PROCESSING Use any touch-tone telephone to transmit your voting
INVESTOR COMM SERVICES instructions up until 11:59 P.M. Eastern Time the day
ATTENTION: before the cut-off date or meeting date. Have your proxy
TEST PRINT card in hand when you call. You will be prompted to
51 MERCEDES WAY enter your 12-digit Control Number which is located
EDGEWOOD, NY below and then follow the simple instructions the Vote
11717 Voice provides you.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the
postage-paid envelope we have provided or return it to
NATIONAL INSTRUMENTS CORPORATION, c/o ADP,
51 Mercedes Way, Edgewood, NY 11717.
123,456,789,012.00000
CONTROL NUMBER 000000000000
ACCOUNT NUMBER 1234567890123456789
PAGE 2 OF 2
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X NAIPRX KEEP THIS PORTION FOR YOUR RECORDS
- ----------------------------------------------------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
- ----------------------------------------------------------------------------------------------------------------------------
NATIONAL INSTRUMENTS CORPORATION
02 0000000000 215168039603
Vote On Directors
1. Election of Directors. For Withhold For All To withhold authority to vote, mark "For All Except"
All All Except and write the nominee's number on the line below.
Nominees: 01) Donald M. Carlton [ ] [ ] [ ]
02) Jeffrey L. Kodosky -----------------------------------------------------
Vote On Proposal For Against Abstain
[ ] [ ] [ ]
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as the Company's independent public accounts for the
fiscal year ending December 31, 2002.
And to transact such other business, in their discretion, as may properly come before the meeting or any adjournment thereof.
Please sign exactly as name(s) appear(s) hereon. All holders must sign. When signing in a fiduciary capacity, please indicate
full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized person.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT [ ] AUTO DATA PROCESSING
INVESTOR COMM SERVICES
ATTENTION:
TEST PRINT
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ] 51 MERCEDES WAY
EDGEWOOD, NY
11717
[ ][ ] [ ][ ] 123,456,789,012
Signature [PLEASE SIGN WITHIN BOX] Date P47378 Signature (Joint Owners) Date 636518E99
PROXY
NATIONAL INSTRUMENTS CORPORATION
20012002 ANNUAL MEETING OF STOCKHOLDERS
MAY 30, 200114, 2002
This Proxy is solicited on behalf of the Board of Directors
The undersigned stockholder of NATIONAL INSTRUMENTS CORPORATION, a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated April 25, 2001,4, 2002, and the 20002001 Annual
Report (Form 10-KA)on Form 10-K to Stockholders and hereby appoints Dr. James J. Truchard
and Jeffrey L. Kodosky, and each of them, proxies and attorneys-in-fact, with
full power of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 20012002 Annual Meeting of Stockholders of NATIONAL
INSTRUMENTS CORPORATION to be held on May 30, 200114, 2002 at 9:00 a.m. local time, at
the Company's headquarters at 11500 North Mopac Expressway, Building B, Austin,
Texas 78759, and at any 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 the matters set forth below.on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED "FOR" THE ELECTION OF DIRECTORS, "FOR" THE RATIFICATION
OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS, AND
AS SAID PROXIES DEEM ADVISABLE, ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- ----------------- -----------------
SEE REVERSE SEE REVERSE
SIDE SIDE
- ----------- -----------
DETACH HERE
[X] Please mark
votes as in
this example
1. Election of Directors 2. Proposal to ratify the appointment FOR AGAINST ABSTAIN
of PricewaterhouseCoopers LLP [ ] [ ] [ ]
Nominees: (01) James J. Truchard as the Company's Independent
(02) Charles J. Roesslein public accountants for the Company
for fiscal 2001.
FOR [ ] [ ] WITHHELD 3. Proposal to transact such other
BOTH FROM business, in their discretion, as [ ] [ ] [ ]
NOMINEES BOTH may properly come before the meeting
NOMINEES or any adjournments thereof.
[ ] _______________________________________
For both nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
Please sign exactly as your name(s) appear(s) hereon. All holders must
sign. When signing in a fiduciary capacity, please indicate full title
as such. If a corporation or partnership, please sign in full corporate
or partnership name by authorized person.
Signature:_______________ Date:________ Signature:_______________ Date:________----------------- -----------------