-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, sUunn59gwYRqQJHWPUkAx01ZMKxAYBu/eHBaFfbTNcltZzPB7UUylwA/V+apcYLz aHcNC5Fx8lrNzP9iWbizqA== 0000070530-95-000002.txt : 19950615 0000070530-95-000002.hdr.sgml : 19950615 ACCESSION NUMBER: 0000070530-95-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950226 FILED AS OF DATE: 19950317 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0000070530 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 952095071 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02848 FILM NUMBER: 95521587 BUSINESS ADDRESS: STREET 1: 2900 SEMICONDUCTORS DR STREET 2: PO BOX 58090 CITY: SANTA CLARA STATE: CA ZIP: 95052-8090 BUSINESS PHONE: 408-721-41 MAIL ADDRESS: STREET 1: 2900 SEMICONDUCTOR DR. CITY: SANTA CLARA STATE: CA ZIP: 95052-8090 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 26, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ------- to -------. Commission File Number: 1-6453 NATIONAL SEMICONDUCTOR CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 95-2095071 (State of incorporation) (I.R.S. Employer Identification Number) 2900 Semiconductor Drive, P.O. Box 58090 Santa Clara, California 95052-8090 (Address of principal executive offices) Registrant's telephone number, including area code: (408) 721-5000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Title of Each Class Outstanding at February 26, 1995 Common stock, par value $0.50 per share 124,132,628 NATIONAL SEMICONDUCTOR CORPORATION INDEX Part I. Financial Information Page No. Condensed Consolidated Statements of Operations (Unaudited) for the Three Months and Nine Months Ended February 26, 1995 and February 27, 1994 3 Condensed Consolidated Balance Sheets (Unaudited) as of February 26, 1995 and February 27, 1994 4 Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended February 26, 1995 and February 27, 1994 5 Notes to Condensed Consolidated Financial Statements (Unaudited) 6 Management's Discussion and Analysis of Results of Operations and Financial Condition 9 Part II. Other Information Legal Proceedings 12 Exhibits and Reports on Form 8-K 12 Signature 14 PART I. FINANCIAL INFORMATION NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in millions, except per share amounts) Three Months Ended Nine Months Ended ------------------ -------------------- Feb. 26, Feb. 27, Feb. 26, Feb. 27, 1995 1994 1995 1994 -------- ------- -------- -------- Net sales $ 571.4 $544.7 $1,709.6 $1,686.0 Operating costs and expenses: Cost of sales 342.1 316.3 995.4 985.8 Research and development 72.5 62.7 205.4 191.3 Selling, general and administrative 95.7 97.9 298.3 303.8 Restructuring of operations (5.5) - (5.5) - ------- ------ -------- ------- Total operating costs and expenses 504.8 476.9 1,493.6 1,480.9 ------- ------ -------- ------- Operating income 66.6 67.8 216.0 205.1 Interest income, net 4.7 3.1 12.7 6.9 ------- ------ -------- ------- Income before income taxes and cumulative effect of accounting change: 71.3 70.9 228.7 212.0 Income taxes 14.3 7.1 45.7 35.3 ------- ------ -------- ------- Net income before cumulative effect of accounting change $ 57.0 $ 63.8 $ 183.0 $ 176.7 Cumulative effect of accounting change - - - 4.9 ------- ------ -------- ------- Net Income $ 57.0 $ 63.8 $ 183.0 $ 181.6 ======= ====== ======== ======= Earnings per share before cumulative effect of accounting change: Primary $ .43 $ .48 $ 1.39 $1.34 Fully diluted $ .42 $ .45 $ 1.33 $1.25 Earnings per share: Primary $ .43 $ .48 $ 1.39 $1.38 Fully diluted $ .42 $ .45 $ 1.33 $1.29 Weighted average shares: Primary 124.7 120.8 125.2 120.1 Fully diluted 136.9 141.7 137.5 140.8 Income used in primary earnings per share (reflecting preferred dividends) $ 54.2 $ 58.5 $ 174.6 $ 165.7 See accompanying Notes to Condensed Consolidated Financial Statements. NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in millions) Feb. 26, May 29, 1995 1994 ASSETS -------- -------- Current assets: Cash and cash equivalents $ 288.7 $ 398.1 Short-term marketable investments 80.3 68.7 Receivables, net 310.0 289.0 Inventories 248.0 212.7 Deferred tax assets 58.3 - Other current assets 52.8 47.9 ------- ------- Total current assets 1,038.1 1,016.4 Property, plant and equipment 1,933.5 1,765.6 Less accumulated depreciation 1,154.7 1,097.6 ------- ------- Net property, plant and equipment 778.8 668.0 Long-term marketable investments - 20.9 Other assets 74.2 42.4 ------- ------- Total assets $1,891.1 $1,747.7 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short term borrowings and current portion of long-term debt $ 33.6 $ 15.6 Accounts payable 182.5 213.7 Accrued expenses 208.5 264.6 Income taxes 111.8 83.5 ------- ------- Total current liabilities 536.4 577.4 Long-term debt 10.1 14.5 Deferred income taxes 20.2 18.6 Other non-current liabilities 31.9 31.5 Minority interest 2.0 - ------- ------- Total liabilities 600.6 642.0 ------- ------- Commitments and contingencies Shareholders' equity: Convertible preferred stock 0.2 0.2 Common stock 62.1 61.4 Additional paid-in capital 949.9 912.7 Retained earnings 315.4 140.9 Unrealized gain on available-for- sale securities 20.2 - Treasury stock, at cost (57.3) (9.5) ------- ------- Total shareholders' equity 1,290.5 1,105.7 ------- ------- Total liabilities and shareholders' equity $1,891.1 $1,747.7 ======== ======== See accompanying Notes to Condensed Consolidated Financial Statements. NATIONAL SEMICONDUCTOR CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in millions) Nine Months Ended -------------------- Feb. 26, Feb. 27, 1995 1994 -------- ------- OPERATIONS: Net Income $ 183.0 $ 181.6 Adjustments to reconcile net income with net cash provided by operations: Depreciation and amortization 131.6 126.1 Other, net 3.6 (1.4) Cumulative effect of accounting change - (4.9) Gain on sale of investment (6.9) (2.2) Changes in deferred tax assets (58.3) - Changes in certain assets and liabilities, net: Receivables (21.0) 2.0 Inventories (35.3) (27.0) Other current assets (4.9) (2.3) Other non-current assets 1.5 - Accounts payable and accrued expenses (83.3) (40.8) Current and deferred income taxes 56.6 11.0 Other non-current liabilities and minority interest 2.4 5.5 -------- ------- Net cash provided by operating activities 169.0 247.6 -------- ------- INVESTING: Purchases of property, plant and equipment (240.3) (158.9) Proceeds from the sale and maturity of marketable investments 618.6 462.6 Purchase of marketable investments (609.3) (489.1) Proceeds from sale of investments 7.9 7.7 Purchases of investments and other, net (19.8) (6.4) -------- ------- Net cash used by investing activities (242.9) (184.1) -------- ------- FINANCING: Proceeds from the issuance of debt 62.3 1.9 Repayment of debt (48.7) (12.1) Issuance of common stock under employee benefit plans 11.2 20.4 Purchase of treasury stock (51.9) - Payment of preferred dividends (8.4) (15.9) -------- ------- Net cash used by financing activities (35.5) (5.7) -------- ------- Net change in cash and cash equivalents (109.4) 57.8 Cash and cash equivalents at beginning of period 398.1 277.4 -------- ------- Cash and cash equivalents at end of period $ 288.7 $ 335.2 ======== ======= See accompanying Notes to Condensed Consolidated Financial Statements. Note 1. Summary of Significant Accounting Policies In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position and results of operations of National Semiconductor Corporation and its subsidiaries ("National" or the "Company"). See Note 2. Interim results of operations are not necessarily indicative of the results to be expected for the full year. This report should be read in conjunction with the consolidated financial statements and notes thereto included in the annual report on Form 10-K for fiscal year ended May 29, 1994. Securities held-to-maturity and available-for-sale: Effective the beginning of fiscal 1995, the Company prospectively adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" ("FAS 115"). The effect of adopting FAS 115 was not material to the consolidated financial statements. Prior to implementing FAS 115, the Company's investments were carried at the lower of cost or market value. Under FAS 115, the Company has classified its investments in certain debt and equity securities as "held-to-maturity" or "available-for-sale". Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short-term or long- term on the balance sheet based upon the contractual maturity date and are stated at amortized cost. Marketable equity securities and debt securities not classified as held- to-maturity are classified as available-for-sale. Available-for-sale securities are classified on the balance sheet based upon management's intent and are carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of shareholders' equity. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, both of which are included in interest income. Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific identification method. Effective the beginning of fiscal 1995, the Company adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits Other than Pensions" ("FAS 112"); the adoption did not have a material impact on the Company's financial statements. Note 2. Results of Operations Included within SG&A expenses is net intellectual property income of $4.8 million for the third quarter and $14.3 million for the nine months ended, compared to $10.3 million and $13.6 million for the respective 1994 periods. Also included is intellectual property expense of $0.4 million and $7.3 million for third quarter and the nine months ended, respectively, compared to $5.0 million and $6.3 million for the comparable 1994 periods. In addition, the Company sold an investment in the third quarter of fiscal 1995 resulting in a $2.6 million gain. The nine months ended include gains for the sale of investments of $6.9 million for 1995 and $2.2 million for 1994. The first nine months of fiscal 1994 include costs of $10.3 million for centralization of certain sales distribution facilities. Note 3. Investment Securities The following is a summary of available-for-sale securities and held-to- maturity securities at May 30, 1994: Gross Estimated Amortized Unrealized Fair (In millions) Cost Losses Value ------- ------ ------- Available-for-sale securities: U.S. Treasury securities and obligations of U.S. government agencies $43.7 $.2 $43.5 U.S. corporate debt securities 7.4 - 7.4 Foreign corporate debt securities 3.0 - 3.0 ----- --- ------ Total available-for-sale securities $54.1 $.2 $53.9 ===== === ==== Held-to-maturity securities: U. S. corporate debt securities $15.9 $ - $15.9 Foreign government securities 3.9 - 3.9 Foreign corporate debt securities 16.2 - 16.2 ---- --- ---- Total held-to-maturity securities $36.0 $ - $36.0 ==== === ==== The amortized cost and estimated fair value of debt securities at May 30, 1994, by contractual maturity, are shown below. Balance sheet classification of certain available-for-sale securities may differ from contractual maturities based on management's intent for use in current operations. Estimated Amortized Fair (in millions) Cost Value ------- ------- Available-for-Sale Due in one year or less $33.1 $33.0 Due after one year through three years 21.0 20.9 ----- ---- $54.1 $53.9 ==== ==== The entire held-to-maturity portfolio is due in one year or less. Note 4. Components of Inventories The components of inventories were: Feb. 26, May 29, (in millions) 1995 1994 ------ ------ Raw materials $ 28.4 $ 17.3 Work in process 146.6 129.4 Finished goods 73.0 66.0 ----- ------ Total inventories $ 248.0 $ 212.7 ====== ====== 5. Supplemental disclosure of cash flow information (in millions) Nine Months Ended ----------------------- Feb. 26, Feb. 27, 1995 1994 -------- -------- Cash paid for: Interest $ 3.4 $ 2.6 Interest on tax settlements 30.0 12.2 Income taxes 45.5 20.6 Supplemental disclosure, non-cash items: Issuance of stock for employee benefit plans $ 4.0 $ 2.0 Tax benefit for employee stock option plans 26.7 - Unrealized gain on available-for-sale securities 20.2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION Sales Sales grew 5 percent in the third quarter of fiscal 1995 compared to the related 1994 period led by increases in Europe and North America for analog and mixed signal products, partially offset by worldwide declines in logic products, concentrated in the Americas region. Analog and mixed signal product sales grew to 56 percent of net sales during the third quarter and the nine months ended, compared to 52 percent for the comparable 1994 periods. While orders were up for analog and mixed signal products, the company's ability to convert the orders into sales was impacted by wafer fab capacity limitations. For the nine months ended, sales were essentially flat compared to 1994 as the 9 percent increase in analog and mixed signal product sales year over year was offset by a decline in sales of bipolar logic products. In the Company's Standard Products Group ("SPG"), which represents approximately 70 percent of the Company's net sales, sales grew 4 percent from a year ago quarter and in the Communications and Computing Group ("CCG"), which represents approximately 30 percent of the Company's net sales, sales grew 9 percent. Gross Margin Gross margin decreased from 42 percent a year ago to 40 percent for the third quarter. Included within gross margin in the current quarter is a $3.7 million charge for planned headcount and business repositioning actions. In addition, pricing declines in bi- polar logic and EPROM products resulted in significantly lower margins for these products. Margins on analog and mixed signal products decreased slightly from 50 percent in 1994 to 48 percent in 1995 due to capacity limitations at plants in Arlington, Texas and Greenock, Scotland. Gross margins as a percentage of sales were flat for the nine months ended compared to a year ago at 42 percent. While analog and mixed signal product margins were flat at 50 percent for the nine months ended, the increase in the portion of total Company sales from these higher margin products offset declines in bi-polar logic product margins. Research and Development Research and development ("R&D") expenses were up as a percentage of sales to 13 percent and 12 percent for the third quarter and the nine months ended compared to 12 percent and 11 percent for the respective 1994 periods. Current quarter and year to date amounts include a one-time charge of $1.5 million for purchased in- process technology related to the acquisition of Comlinear Corporation ("Comlinear") in the current quarter and the Company's continued investment in analog and mixed signal products. Selling, General, and Administrative While selling, general, and administrative ("SG&A") expenses have decreased as a percentage of sales to 17 percent for the third quarter and the nine months ended compared to 18 percent for the comparable 1994 periods, included within SG&A expenses is net intellectual property income of $4.8 million for the third quarter and $14.3 million for the nine months ended, compared to $10.3 million and $13.6 million for the respective 1994 periods. Also included is intellectual property expense of $0.4 million and $7.3 million for the third quarter and the nine months ended, respectively, compared to $5.0 million and $6.3 million for the comparable 1994 periods. In addition, the Company sold an investment in the third quarter of fiscal 1995 resulting in a $2.6 million gain. The nine months ended include gains on the sale of investments of $6.9 million for 1995 and $2.2 million for 1994. The first nine months of fiscal 1994 include costs of $10.3 million for centralization of certain sales distribution facilities. Exclusive of the above items, SG&A expenses in the third quarter and nine months ended were $102.7 million and $312.2 million for 1995 and $103.2 million and $303.0 million for 1994 or 18 percent of sales. The increase in SG&A expense, net of the above items, in absolute dollars for the nine months ended is primarily attributable to annual increases in salaries for all employees, additional promotional costs, and increased costs for certain employee benefit plans. Restructuring of Operations During the current quarter the Company released $10.1 million of restructuring reserves originally provided in 1994, which was partially offset by $4.6 million (of which $2.4 million is non-cash) in additional charges for existing restructuring programs identified by the Company. The release of the $10.1 million is attributable to the Company's decision to retain certain facilities and related support. The additional restructuring requirements include charges for the Company's wholly owned subsidiary, Dynacraft, Inc. ("DCI"), for continued consolidation of the DCI business and the decision by the Company to transfer the majority of the military assembly operations from South Portland, Maine to the assembly operations in Singapore. The charges for these actions, which are expected to be completed during fiscal 1996, consist primarily of fixed asset dispositions, reductions in the work force and costs related to termination of a non-cancelable commitment for a facility. Interest Income and Interest Expense Net interest income increased to $5 million and $13 million for the third quarter and nine months ended compared to $3 million and $7 million for the respective 1994 periods. The increase in net interest income relates to an increase in average interest rates compared to a year ago offset by a slightly lower average cash and investment balance during the first nine months of fiscal 1995. The increase in interest income was somewhat offset by an increase in interest expense for the nine months ended, due to the assumption and retirement of debt related to a facility repurchased in the second quarter. Income Taxes The effective tax rate for fiscal year 1995 is 20 percent compared to 15 percent for fiscal year 1994. The increase in the annual effective tax rate primarily relates to the exhaustion of certain net operating loss and tax credit carry forwards. In the current quarter the Company reduced the valuation allowance for specific deferred tax assets by approximately $19 million based upon continuing profits recorded in certain jurisdictions. Financial Condition During the first nine months of 1995, cash and cash equivalents decreased $109 million. The Company generated $169 million positive cash flow from operations for the nine months ended despite increased cash used for accounts payable and accrued expenses. In addition, the Company increased its receivables, inventories and deferred tax assets. Investing activities used $243 million during the first nine months of fiscal 1995 driven primarily by purchases of property, plant and equipment of $240 million and investments of $20 million. In addition, an unrealized gain of $20 million was recorded in equity for the current quarter to record the market value of an equity investment. Financing activities used $35 million during the first nine months and include the Company's repurchase, during the second quarter, of the equity interest in one of the facilities it had sold during fiscal 1988 and leased back, using approximately $12 million in cash and assuming $23 million in debt. The debt was retired during the current quarter. The Company is currently in negotiations to repurchase the equity interest in another facility it had sold during fiscal 1988 and leased back and expects to use approximately $40 million to $50 million of cash and assume $10 million to $20 million of debt during the fourth quarter, if the transaction is completed. In addition, financing activities include the draw down on its multicurrency line of $21 million and the repurchase of 3 million shares of its common stock on the open market for $52 million. The Company maintains a multicurrency agreement and revolving finance agreement, both of which contain restrictive covenants, conditions and default provisions which, among others, require the maintenance of financial ratios and certain levels of tangible net worth. Management believes existing cash and investment balances, existing financing agreements, cash provided by operations, and cash generated from issuance of stock to employees will be sufficient to fund anticipated capital expenditures and other investing and financing activities through the foreseeable future. Business Combination On January 5, 1995, the Company completed the acquisition of Comlinear, a manufacturer of high-performance analog and mixed signal integrated circuits based in Fort Collins, Colorado. The acquisition has been recorded using the purchase method of accounting, whereby the purchase price was allocated to the assets and liabilities based on the estimated fair values as of the date of acquisition. Approximately $1.5 million of the total purchase price represented in- process technology and was charged to the Company's operations during the quarter. The remaining cost in excess of net assets acquired was approximately $5.4 million and is being amortized on a straight-line basis over seven years. Comlinear's results of operations have been included in the Company's consolidated financial statements from its acquisition date. Comlinear's operations are not material in relation to the Company's consolidated financial statements; accordingly, pro forma financial information has not been presented. Outlook Despite continued profitability, future trends for revenue and profitability continue to be difficult to predict. Declines in the Bi-polar logic and EPROM marketplaces have impacted the Company's relative growth in the current fiscal year and the Company expects these markets to continue to decline. While the Company has set aggressive plans to ramp up capacity during the fourth quarter, the Company believes it will be constrained in bringing additional capacity on line until the first quarter of fiscal 1996 with resulting limitations on fully meeting demand. Risks and uncertainties facing the Company include business conditions and the rate of growth in the personal computer industry and the general economy; competitive factors and price pressures; market acceptance and timing of new products; capacity limitations; and international economic conditions. The Company believes sales and gross margins as a percentage of sales in the foreseeable future will be comparable to the first nine months. Operating expenses as a percentage of sales are expected to remain at existing levels. National continues to pursue opportunities to leverage its intellectual property; however, the timing and amount of future licensing income cannot be forecast with certainty. PART II. OTHER INFORMATION Item 1. Legal Proceedings - ------------------------- On December 1, 1992, Hughes Aircraft Company ("Hughes") filed an action in the U.S. District Court for the Eastern Division of the Northern District of Illinois alleging the Company had infringed U.S. Patents Nos. 3,472,712; 3,507,709; and 3,615,934 and seeking unspecified amounts of damages and costs. The Company was served with the suit on January 7, 1993. The Company countersued Hughes' parent, General Motors ("GM") and Hughes in the same action alleging infringement of U.S. Patent Nos. 3,901,735; 4,325,984; and 4,599,634. The case was transferred to the U.S. District Court for the Northern District of California. The Company also filed an action in California State Court seeking declaratory relief and alleging breach of contract by Hughes and GM in connection with a prior patent cross license agreement entered into between GM and Fairchild Camera Instrument Corporation (subsequently renamed Fairchild Semiconductor Corporation and purchased by the Company in October 1987). In September 1994, the parties agreed to resolve the dispute in its entirety in a binding mini-trial procedure structured to handle the primary disputed issue; as part of the agreement, the Company dismissed with prejudice the related California State Court action. In December, 1994, the mini-trial was conducted before a judge selected by the parties on the single issue of whether claim 2 of the U.S. Patent No. 3,472,712 owned by Hughes was infringed by one of the Company's semiconductor fabrication processes. For purposes of the mini-trial, the patent was presumed valid and the parties agreed in advance to the amounts of damages that would be paid by the Company, which amount was not disclosed to the judge until after the judge had issued his findings. The judge found for Hughes on the single issue presented in the mini-trial. In accordance with the agreement of the parties, the Company paid to Hughes the sum of $10 million and the Federal Court action was dismissed with prejudice. The dismissal constituted a full settlement and release of all claims for past infringement of the patents in issue. In addition, the Company granted Hughes and GM licenses under its patents at issue; no such license was granted by Hughes back to the Company because the Hughes patents at issue had expired. Reference is made to Item 3, Legal Proceedings, in the Company's Annual Report on Form 10-K for the year ended May 29, 1994, which information is incorporated herein by reference. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits -------- 10.1 Management Contract or Compensatory Plan or Arrangement: Stock Option Plan (as amended through January 19, 1995) 10.2 Management Contract or Compensatory Plan or Arrangement: Key Employee Incentive Plan Agreement (as amended through January 12, 1995) 11.0 Additional Fully Diluted Calculation of Earnings Per Share (b) Reports on Form 8-K ------------------- No reports on Form 8-K were filed during the fiscal quarter ended February 26, 1995. SIGNATURE - --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NATIONAL SEMICONDUCTOR CORPORATION Date: March 17, 1995 /s/ DONALD MACLEOD ---------------------------------- Donald Macleod Senior Vice President, Finance and Chief Financial Officer Signing on behalf of the registrant and as principal financial officer Exhibit 10.1 NATIONAL SEMICONDUCTOR CORPORATION STOCK OPTION PLAN (as amended through January 19, 1995) 1. TITLE OF PLAN The title of this Plan is the National Semiconductor Corporation Stock Option Plan, hereinafter referred to as the "Plan", and formerly known as the National Semiconductor Corporation 1977 Stock Option Plan. 2. PURPOSE The Plan is intended to align the interests of eligible key employees of National Semiconductor Corporation (hereinafter called the "Corporation") and its subsidiaries (as hereinafter defined) with the interests of the stockholders of the Corporation and to provide incentives for such employees to exert maximum efforts for the success of the Corporation. By extending to key employees the opportunity to acquire proprietary interests in the Corporation and to participate in its success, the Plan may be expected to benefit the Corporation and its stockholders by making it possible for the Corporation to attract and retain the best available talent and by rewarding key management and technical personnel for their part in increasing the value of the Corporation's shares. It is further intended that options granted pursuant to this Plan may be incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended (the "Code"), or may be options which are not incentive stock options (hereinafter called "non- qualified stock options"). 3. STOCK SUBJECT TO THE PLAN There will be reserved for issue upon the exercise of options granted under the Plan 32,754,929 shares of the Corporation's $.50 par value Common Stock, subject to adjustment as provided in Paragraph 8, which may be unissued shares, reacquired shares, or shares bought on the market. If any option which shall have been granted shall expire or terminate for any reason without having been exercised in full, the unpurchased shares shall again become available for the purposes of the Plan (unless the Plan shall have been terminated). 4. ADMINISTRATION (a) The Plan shall be administered by a committee of the Board of Directors of the Corporation (the "Committee") which shall be appointed by a majority of the whole Board. The Committee shall be constituted to permit the Plan to comply with (i) Rule 16b-3 promulgated under the Securities Exchange Act of 1934 ("Exchange Act") and any successor rule and (ii) IRS regulations issued under Section 162(m) of the Code, and shall initially consist of not less than three members of the Board, all of whom are ineligible for benefits under the Plan and none of whom has been so eligible for at least one year prior to serving on such Committee. (b) The Committee shall have the plenary power, subject to and within the limits of the express provisions of the Plan: (i) To determine from time to time which of the eligible persons shall be granted options under the Plan; the time or times (during the term of the option) within which all or portions of each option may be exercised and the number of shares for which an option or options shall be granted to each of them. Notwithstanding the foregoing, no person may be granted more than 500,000 options during any one fiscal year of the Corporation. (ii) To construe and interpret the Plan and options granted under it, and to establish, amend, and revoke rules and regulations for its administration. The Committee, in the exercise of this power, shall generally determine all questions of policy and expediency that may arise, may correct any defect, or supply any omission or reconcile any inconsistency in the Plan or in any option agreement in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. (iii) To prescribe the terms and provisions of each option granted (which need not be identical). (iv) To determine whether options granted shall be incentive stock options or non-qualified stock options. (v) To determine whether options granted shall be transferable without consideration to immediate family members or family trusts for the benefit of optionee's immediate family members. As used herein, "immediate family" means parents, spouses and children. (c) The Committee shall not have the authority to grant new options in exchange for the cancellation of stock options previously granted under the Plan or under any other stock option plan of the Corporation. 5. ELIGIBILITY Options may be granted only to regular salaried officers and key employees of the Corporation and its subsidiaries. The term "subsidiary" corporation shall mean any corporation in which the Corporation controls, directly or indirectly, fifty percent (50%) or more of the combined voting power of all classes of stock. A director of the Corporation shall not be eligible for the benefits of the Plan unless such person also is a regular salaried employee of the Corporation and/or of any subsidiary. 6. TERMS OF OPTION AND OPTION AGREEMENTS Each option shall be evidenced by a written Stock Option Agreement which may expressly identify the options as incentive stock options or as non-qualified stock options, and be in such form and contain such provisions as the Committee shall from time to time deem appropriate; provided, however, that the grant of a non-qualified option pursuant to this Plan shall in no way be construed to be an alternative to the right of an employee to purchase stock pursuant to any incentive stock option heretofore or hereafter granted to an employee pursuant to any stock option plans now in existence or hereafter adopted by the Corporation. The terms of the option agreements need not be identical, but each option agreement shall include, by appropriate language, or be subject to, the substance of all of the applicable following provisions: (a) The purchase price under each option granted shall be as determined by the Committee but shall in no instance be less than 100% of fair market value on the date of grant. The fair market value on the date of grant shall be the opening price of the Common Stock on the New York Stock Exchange on such date (or if there shall be no trading on such date, then on the first previous date on which there is such trading). (b) The maximum term of any incentive stock option shall be ten years from the date it was granted. (c) The maximum term of any non-qualified stock option shall be ten years and one day from the date it was granted. (d) An option may not be exercised to any extent, either by the person to whom it was granted or by the grantee's transferee, or by any person after the grantee's death, unless the person to whom the option was granted has remained in the continuous employ of the Corporation, or of a subsidiary, for not less than six months from the date when the option was granted. Otherwise, each option shall be exercisable as determined by the Committee. (e) The Corporation, during the terms of options granted under the Plan, at all times will keep available the number of shares of stock required to satisfy such options. (f) The Corporation will seek to obtain from each regulatory commission or agency having jurisdiction such authority as may be required to issue and sell shares of stock to satisfy such options. Inability of the Corporation to obtain from any such regulatory commission or agency authority which counsel for the Corporation deems necessary for the lawful issuance and sale of its stock to satisfy such options shall relieve the Corporation from any liability for failure to issue and sell stock to satisfy such options pending the time when such authority is obtained or is obtainable. (g) Neither a person to whom an option is granted nor his or her transferee, legal representative, heir, legatee, or distributee, shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such option unless and until he or she has exercised his or her option pursuant to the terms thereof. (h) In order to be exempt under Section 16 of the Exchange Act, the option may not be transferable except by will or by the laws of descent or distribution, and during the lifetime of the person to whom the option is granted he or she alone may exercise it. (i) An option shall terminate and may not be exercised if the person to whom it is granted ceases to be continuously employed by the Corporation, or by a subsidiary of the Corporation, except (subject nevertheless to the last sentence of this subparagraph (h)): (1) if the grantee's continuous employment is terminated for any reason other than (i) retirement, (ii) permanent disability, or (iii) death, the grantee or the grantee's transferee may exercise the option to the extent that the grantee was entitled to exercise such option at the date of such termination at any time within a period of three (3) months following the date of such termination, or if the grantee shall die within the period of three (3) months following the date of such termination without having exercised such option, the option may be exercised within a period of one year following the grantee's death by the grantee's transferee or the person or persons to whom the grantee's rights under the option pass by will or by the laws of descent or distribution but only to the extent exercisable at the date of such termination; (2) if the grantee's continuous employment is terminated by (i) retirement, (ii) permanent disability, or (iii) death, the option may be exercised in accordance with its terms and conditions at any time within a period of five (5) years following the date of such termination by the grantee or the grantee's transferee, or in the event of the grantee's death, by the persons to whom the grantee's rights under the option shall pass by will or by the laws of descent or distribution; (3) if the grantee's continuous employment is terminated and within a period of ninety (90) days thereafter the grantee is recalled to the active payroll, the Committee may reinstate any portion of the option previously granted but not exercised. Nothing contained in this subparagraph (h) is intended to extend the stated term of the option and in no event may an option be exercised by anyone after the expiration of its stated term. (j) Option agreements evidencing incentive stock options shall contain such terms and provisions as may be necessary to render them incentive stock options pursuant to Section 422A of the Code and the Income Tax Regulation thereunder, as the same or any successor statute or regulations may at the time be in effect. (k) Nothing in this Plan or in any option granted hereunder shall confer on any optionee any right to continue in the employ of the Corporation or any of its subsidiaries, or to interfere in any way with the right of the Corporation or any of its subsidiaries to terminate his or her employment at any time. 7. TIME OF GRANTING OPTION The Committee shall determine the date on which options are granted under the Plan. All options granted must be approved at a meeting of the Committee by a majority of the members of the Committee. If an option agreement is not executed by an employee and returned to the Corporation on or prior to ninety (90) days after the date the option is granted (or such earlier date as the Committee may specify), such option shall terminate. 8. ADJUSTMENT IN NUMBER OF SHARES AND IN OPTION PRICE In the event there is any change in the shares of the Corporation through the declaration of stock dividends or a stock split-up, or through recapitalization resulting in share split-ups, or combinations or exchanges of shares, or otherwise, the number of shares available for option, as well as the shares subject to any option and the option price thereof, shall be appropriately adjusted by the Committee. 9. PAYMENT OF PURCHASE PRICE AND WITHHOLDING TAXES (a) The purchase price for all shares purchased pursuant to options exercised must be either paid in full in cash, or paid in full, with the consent of the Committee, in Common Stock of the Corporation valued at fair market value on the date of exercise or a combination of cash and Common Stock. Fair market value on the date of exercise is the opening price of the Common Stock on the New York Stock Exchange on such date, or if there shall be no trading on such date, then on the first previous date on which there was such trading. (b) The Committee may permit the payment of all or part of the applicable withholding taxes due upon exercise of an option, up to the highest marginal rates then in effect, by the withholding of shares otherwise issuable upon exercise of the option. Option shares withheld in payment of such taxes shall be valued at the fair market value of the Corporation's Common Stock on the date of exercise as defined herein. 10. CHANGE IN CONTROL In the event the Corporation is merged into or acquired by another entity in a transaction involving a change in control, the Committee shall have the complete authority and discretion, but not the obligation, to accelerate the vesting of any outstanding options granted hereunder. The Committee may also ask the Board of Directors to negotiate, as part of any agreement involving a sale or merger of the Corporation, a sale of substantially all the Corporation's assets or similar transaction, terms providing protection for employees holding options under the Plan. 11. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN (a) The Board may amend, modify, suspend or terminate the Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law. The Board will seek stockholder approval of an amendment if determined to be required by or advisable under regulations of the Securities and Exchange Commission or the Internal Revenue Service, the rules of any stock exchange on which the Corporation's stock is listed, or other applicable law or regulation. (b) The Plan shall continue in effect until all shares available for issuance under the Plan have been issued. An option may not be granted while the Plan is suspended or after it is terminated. (c) The rights and obligations under any options granted while the Plan is in effect shall not be altered or impaired by amendment, suspension or termination of the Plan, except with the consent of the person to whom the option was granted or the grantee's transferee or to whom rights under an option shall have passed by will or by the laws of descent and distribution. 12. EFFECTIVE DATE The Plan, as amended and restated, shall become effective on April 22, 1994, subject to approval by the stockholders of the Corporation within twelve (12) months after said date. Exhibit 10.2 NATIONAL SEMICONDUCTOR CORPORATION 1995 KEY EMPLOYEE INCENTIVE PLAN AGREEMENT (as amended through January 12, 1995) ARTICLE 1 Definitions Whenever used in the Agreement, unless otherwise indicated, the following terms shall have the respective meanings set forth below: Agreement: This Key Employee Incentive Plan Agreement. Award: The amount to be paid to a Plan Participant at the end of the Plan Period. Award Date: The date forty days after the Company makes its consolidated financial statements for the fiscal year generally available to the press. Base Salary: The annualized base remuneration received by a Participant from the Company at the end of the Bonus Period. Extraordinary items, including but not limited to prior awards, relocation expenses, expatriate premiums, allowances and tax adjustments, sales incentives, amounts recognized as income from stock options and other similar kinds of extra or additional remuneration are excluded from the computation of Base Salary. Company: National Semiconductor Corporation, a Delaware corporation, or any other Corporation that has adopted this Plan as its own Plan. Committee: A committee comprised of directors of National who are not employees of the Company, as more fully defined in the Key Employee Incentive Plan. Corporation: The Company and any other corporation in which the Company controls directly or indirectly, fifty percent (50%) or more of the combined voting power of all classes of voting securities. Disabled: Inability to perform any services for the Company and eligible to receive disability benefits under the standards used by the Company's disability benefit plan or any successor plan thereto. Employee: An individual in the employ of the Company at any time during the Plan Period. Executive Officer: An Employee of the Company who is subject to the reporting and liability provisions of Section 16 of the Securities and Exchange Act of 1934. Extraordinary Occurrences: Events that, in the opinion of the Committee, are beyond the significant influence of Plan Participants or the Company and cause a significant unintended effect, positive or negative, on Company operating and financial results. Incentive Levels: The grouping of those Employees designated as Participants as set forth in Article 4. Participant: An Employee who at the time shall be a Participant in accordance with the provisions of Article 3. Performance Goal: Factors considered and scored to determine the amount of a Participant's Award and consisting of three levels of performance as follows: (i) Threshold - the minimum acceptable level of performance for which an Award may be earned on a particular Performance Goal. (ii) Target - good performance, usually set at a level equal to the Strategic Business Plan ("SBP II") for financial measures, reflecting a degree of difficulty which has a reasonable probability of achievement. (iii) Superior - exceptional performance far exceeding the Target level because of the great degree of difficulty and the limited (10% - 20%) probability of achievement. Plan Period: The fiscal year of the Company. Retired: Permanent termination of employment with the Company, and (a) age is either sixty-five (65) or age is at least fifty-five (55) and years of service in the employ of the Company is ten (10) or more, and (b) the terminating employee has certified to the Vice President- Finance of the Company that he or she does not intend to engage in a full-time vocation. Target Award: The Award, expressed as a percentage of Base Salary, that is earned by a Participant for achievement of the Target Performance Measure. All capitalized terms used in this Agreement and not otherwise defined herein have the meanings assigned to them in the Key Employee Incentive Plan. ARTICLE 2 Effective Date The Agreement will become effective as of May 29, 1994, to be effective for the Company's fiscal year 1995. ARTICLE 3 Eligibility for Plan Participation A. Prior to the commencement of each Plan Period, members of the Company's management committee will recommend to the President of the Company potential Participants for the Plan Period and their Incentive Level. The President of the Company shall then designate Plan Participants and their Incentive Level for the Plan Period. Executive Officers may not participate in the plan. B. Participants will be notified of their eligibility before the beginning of each Plan Period. Continued participation will be re- evaluated at the beginning of each Plan Period. C. Newly hired Employees may be added as Participants to the Plan during the Plan Period. Other non-participating Employees may be considered for participation in the Plan after the beginning of the Plan Period, provided they have assumed significantly greater responsibility during the Plan Period. Participants who are added to the Plan during a Plan Period will receive a prorated Award based on months of participation in the Plan, provided they have at least six months of Plan participation. ARTICLE 4 Target Awards A. Each Participant will be assigned an Incentive Level with associated Target Awards expressed as percentages of the Participant's Base Salary. Target Awards will be the same for all Participants at any given Incentive Level. B. In the event that a Participant changes positions during the Plan Period and the change results in a change in Incentive Level, whether due to promotion or demotion, the Incentive Level will be prorated to reflect the time spent in each position. ARTICLE 5 Plan Performance Goals A. Performance Goals and associated weights will be established at the start of each Plan Period. Each Performance Goal will have a defined Threshold, Target and Superior level of performance. Performance Goals and their associated weights may change from one Plan Period to another Plan Period to reflect the Company's operational and strategic goals. B. Weights for corporate and business unit financial Performance Measures will be established at the start of each Plan Period and will be equal unless otherwise approved in advance by the President of the Company. C. Awards will range between 0% and 200% of Target Award. A scale showing the amount of the Participant's Award relative to the Target Award at the various performance levels will be developed for each Performance Goal. Performance levels and associated Awards (as a percent of the Target Award) will be set generally in a straight linear relationship from Threshold to Superior Performance Goals, with Awards at the Superior level being 150% of the Target Award, Awards at the Target level being 100% of the Target Award and Awards at the Threshold level being 50% of the Target Award. Performances at less than the Threshold level or more than the Superior level are subject to discretionary adjustments that may not necessarily follow a linear progression. D. Financial and strategic Performance Goals and Target Performance Goals will be recommended by the responsible group manager for each specific group or business unit and approved by the President of the Company. E. Under exceptional circumstances, revisions to financial performance targets may be proposed at the midpoint of the Plan Period if the business environment or key planning assumptions change significantly from conditions assumed at the start of the Plan Period. Such revisions are subject to approval by the President of the Company. F. Performance Goals, performance scales and Awards may be adjusted in the event the Committee or the President determine there has been an Extraordinary Occurrence during the Plan Period that (i) affects one or more Performance Goals; (ii) unreasonably distorts Award calculations; or (iii) results in undue benefit or detriment to the Plan Participants. Such adjustments will be made solely for the purpose of neutralizing the effect of the Extraordinary Occurrence. ARTICLE 6 Calculation and Payment of Awards A. A Participant's Award will be calculated as a percentage of Base Salary as follows: 1) The Participant's Target Award is determined prior to the beginning of the Plan Period. 2) The performance of the Participant's group is scored on an overall basis at the end of the Plan Period. 3) The group's overall performance score creates an incentive pool. 4) The group's incentive pool is divided among the Participants within the group, based on individual contributions toward the group's overall performance score. No one individual Award may exceed 200% of the Participant's Target Award amount. B. Measurement of performance on Performance Goals for Participants will be scored by the Company. C. Awards will be paid in cash. D. All or any portion of the Award may be deferred if the Participant makes a voluntary irrevocable election to defer payment to a future date pursuant to the deferral terms contained in Article 8. ARTICLE 7 Termination of Employment A. To be eligible to receive an Award, the Participant must be employed by the Company on the Award Date. A Participant who terminates employment prior to the Award Date will result in forfeiture of the Award, except as otherwise provided in this Article 7. Disability: If a Participant is Disabled, the Participant will receive an Award on the Award Date representing 1/12 of the total Award for each month of employment in the Plan Period. Retirement: A Retired Participant will receive on the Award Date an Award representing 1/12 of the total Award for each month of employment in the Plan Period. Death: If a Participant dies, Awards will be paid on the Award Date to: (a) beneficiaries designated by the Participant; if none, then (b) to a legal representative of the Participant; if none, then (c) to the persons entitled thereto as determined by a court of competent jurisdiction. The amount of the Award will be 1/12 of the total Award for each month of employment in the Plan Period. Reduction in Force: Participants whose employment is terminated by a reduction in force during the Plan Period will receive an Award on the Award Date representing 1/12 of the total Award for each month of employment in the fiscal year. If a Participant's employment is terminated by a reduction in force after the Plan Period but before the Award Date, the Participant will receive the full Award on the Award Date. B. The Committee reserves the right to reduce an Award on a pro-rata basis to reflect a Participant's leave of absence during a Plan Period. ARTICLE 8 Deferral of Awards A. Each Participant is entitled to make an irrevocable election (in the form of the Notice of Election attached) to defer receipt of all or any portion of any Award. For any Plan Period, the Notice of Election must be completed prior to thirty (30) days before the end of the Plan Period. Notices of Election are not self-renewing and must be completed for each Plan Period if deferral is desired for the applicable Plan Period. B. For each Participant who elects deferral, the Company will establish and maintain book entry accounts which will reflect the deferred Award and any interest credited to the account. C. For deferred Awards, Participant deferred accounts will be credited each Award Date with interest set at the rate for long-term A- rated corporate bonds, as reported by the investment banking firm of Salomon Brothers Inc of New York City (or such other investment banking firm as the Committee may specify) during the first week of each calendar year. The interest rate will be reset at the beginning of each calendar year. Interest will begin to accrue on the Award Date and will be credited each Award Date until the date payment is actually made. If a Participant's Award is distributed at any time other than on an Award Date, the Participant's account will be credited with interest until the date of distribution. D. Participants will not receive deferred Awards until the earlier of termination of employment for any reason (including retirement, disability, or death) or a date pre-selected by the Participant. The account balance will be paid in a lump sum in the month following the earlier of termination of employment for any reason or the pre-selected date unless installment payments are permitted and have been elected as follows: Upon termination of employment by reason of retirement or disability, a Participant who has previously elected to defer an Award may irrevocably elect to have the balance of the deferred Award plus accrued interest paid to the Participant in periodic annual installments over a period of ten (10) years. Payments shall commence or be made annually on a day each year that is within thirty (30) days of the anniversary date following Participant's retirement or disability. E. If the Participant's employment is terminated for any reason other than death, disability or retirement, the Participant will be paid the entire account balance in a lump sum in the month after termination. If a Participant has requested installment payments and dies either before or after distribution has begun, the unpaid balance will be paid in a lump sum in the month following the Participant's death. F. Payment of part or all of the deferred Award may be accelerated in the case of severe hardship, which shall mean an emergency or unexpected situation in the Participant's financial affairs, including, but not limited to, illness or accident involving the Participant or any of the Participant's dependents. All payments in case of hardship must be specifically approved by the Company. G. No Participant may borrow against his or her account. H. The Participant may designate a beneficiary to receive deferred Awards in the event of the Participant's death. If the Participant is married at the time of designation, the Participant's spouse must consent to the beneficiary designation. The Participant's beneficiary may be changed without the consent of any prior beneficiary except that, for married Participants, the Participant's spouse must consent to any change in beneficiary. If no beneficiary is chosen or the beneficiary does not survive the Participant, the Award account balance will be paid in accordance with the terms of the Plan. ARTICLE 9 Interpretations and Rule-Making The Company shall have the right and power to: (i) interpret the provisions of the Agreement, and resolve questions thereunder, which interpretations and resolutions shall be final and conclusive; (ii) adopt such rules and regulations with regard to the administration of the Plan as are consistent with the terms of the Agreement, and (iii) generally take all action to equitably administer the operation of the Plan and this Agreement. ARTICLE 10 Declaration of Incentives, Amendment, or Discontinuance The President of the Company acting within his sole discretion may on or before the Award Date: (i) determine not to make any Awards to any or all Participants for any Plan Period; (ii) make any modification or amendment to this Agreement for any or all Participants; or (iii) discontinue this Agreement for any or all Participants. ARTICLE 11 Miscellaneous A. Except as provided in Article 8 H, no right or interest in the Plan is transferable or assignable except by will or the laws of descent and distribution. B. Participation in this Plan does not guarantee any right to continued employment and management reserves the right to dismiss Participants for any reason whatsoever. Participation in one Plan Period does not guarantee the Participant the right to participation in any subsequent Plan Period. C. The Company reserves the right to deduct from all Awards under this Plan any taxes or other amounts required by law to be withheld with respect to Award payments. D. This Plan constitutes an unfunded Plan of deferred compensation. As such, any amounts payable hereunder will be paid out of the general corporate assets of the Company and shall not be transferred into a trust or otherwise set aside. All accounts under the Plan will be for bookkeeping purposes only and shall not represent a claim against specific assets of the Company. The Participant will be considered a general creditor of the Company and the obligation of the Company is purely contractual and shall not be funded or secured in any way. E. Maintenance of financial information relevant to measuring performance during the Plan Period will be the responsibility of the Chief Financial Officer of the Company. F. The provisions of the Plan shall not limit, or restrict, the right or power of the Board to continue to adopt such other plans or programs, or to make salary, bonus, incentive, or other payments, with respect to compensation of officers or Employees, as in its sole judgment it may deem proper. G. Except to the extent superseded by federal law, this Agreement shall be construed in accordance with the laws of the State of California. H. No member of the Company's board of directors or any officer, employee, or agent of the Company shall have any liability to any person, firm or corporation based on or arising out of this Agreement or the Plan. NATIONAL SEMICONDUCTOR CORPORATION KEY EMPLOYEE INCENTIVE PLAN Notice of Election If you are a Participant in the Company's Key Employee Incentive Plan ("KEIP") and receive an Award under the KEIP for fiscal year 1995, you may accept payment in calendar year 1995 or you may defer payment until a later date which is at least one year after the Award Date. If you want to defer payment, complete this election form and return it to Donald Macleod, Senior Vice President, Finance, or his designee by April 27, 1995. If you do not complete this form, you will receive payment in calendar year 1995. For further details, refer to the National Semiconductor Corporation Key Employee Incentive Plan documents and Agreement. * * * * * DEFERRAL ELECTION: In accordance with the National Semiconductor Corporation KEIP, I hereby elect to defer all or part of the Award as specified below, which Award would otherwise be paid to me under the terms of the KEIP. 1. Please defer ------% or $------ of my KEIP Award. If the dollar amount selected is greater than the total KEIP Award, the entire Award will be deferred. 2. The amounts deferred will be payable on the earliest of: termination of employment for any reason (including retirement, disability, or death) or on ----------------- (specify pre-selected distribution date at least one year after the 1995 Award Date.) 3. In the event of death, my primary beneficiary is: ----------------------------------------------- (Print name) Print address: ------------------------------------------------ ----------------------------------------------- My secondary beneficiary (to receive benefits only in the event of death of my primary beneficiary) is: ----------------------------------------------- (Print name) Print address: ----------------------------------------------- ----------------------------------------------- I UNDERSTAND THIS ELECTION IS IRREVOCABLE FOR THE 1995 KEIP AWARD AND IS SUBJECT TO THE TERMS OF THE NATIONAL SEMICONDUCTOR KEIP DOCUMENT. Consent of spouse (required for married participants designating beneficiaries other than spouse) Signature: -------------------------- Signature----------------------- Print Name: -------------------------- Print Name: -------------------- Date: -------------------------------- Received by National Semiconductor Corporation Date: -------------------------------- By: -------------------------------- Print Name: -------------------------- Title: ------------------------------- Exhibit 11.0 Page 1 of 1 NATIONAL SEMICONDUCTOR CORPORATION ADDITIONAL FULLY DILUTED CALCULATION OF EARNINGS PER SHARE (in millions, except per share amounts) Three Months Ended Nine Months Ended ------------------ ------------------ Feb. 26, Feb. 27, Feb. 26, Feb. 27, 1995 1994 1995 1994 ------- ------- ------- ------- Net Income $ 57.0 $ 63.8 $ 183.0 $ 181.6 Number of shares: Weighted average common shares outstanding 120.6 112.1 121.2 111.3 Weighted average common equivalent shares, net of tax benefit 4.1 8.7 4.0 8.8 ------ ------ ------ ------ Weighted average common and common equivalent shares 124.7 120.8 125.2 120.1 Additional weighted average common equivalent shares assuming full dilution (.1) .5 - .3 Shares issuable from assumed conversion of preferred shares 12.2 20.4 12.2 20.4 ------ ------ ------ ------ Weighted average common and common equivalent shares assuming full dilution 136.8 141.7 137.4 140.8 ===== ===== ===== ===== Income per share assuming full dilution $ .42 $ .45 $ 1.33 $ 1.29 ====== ====== ====== ====== EX-27 2
5 Accounts Receivable and Interest amounts are shown net consistent with financial statment presentation. 0000070530 NATIONAL SEMICONDUCTOR CORPORATION 1,000,000 U.S. DOLLAR 3-MOS 9-MOS MAY-28-1995 MAY-28-1995 NOV-28-1994 MAY-30-1994 FEB-26-1995 FEB-26-1995 1 1 289 289 80 80 310 310 0 0 248 248 1038 1038 1994 1994 1155 1155 1891 1891 536 536 0 0 62 62 0 0 0 0 1228 1228 1891 1891 571 1710 571 1710 342 995 342 995 0 0 0 0 5 13 71 229 14 46 57 183 0 0 0 0 0 0 57 183 .43 1.39 .42 1.33
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