EXHIBIT 1
[LETTERHEAD OF NATIONAL SEMICONDUCTOR CORPORATION]
July 21, 2003
Xxxxx X. Xxxxxxxxx
Relational Investors, L.P.
00000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Dear Xx. Xxxxxxxxx:
Upon receipt of an executed counterpart hereof, this letter will be
an agreement (the "Agreement") between Relational Investors, L.P. (the
"Partnership"), Relational Investors LLC ("Relational Investors," and together
with the Partnership and their respective "affiliates," as such term is defined
or used in Rule 145 of the Securities Act of 1993, as amended, "Relational") and
National Semiconductor Corporation (the "Company"), with respect to the
following matters:
1. Withdrawal of the Notice of Nomination. By letter dated June 19, 2003,
Relational provided written notice of its intention to nominate Xxxxx X.
Xxxxxxxxx ("Xxxxxxxxx") and Xxxxx X. Xxxxxxxxxx for election to the Board
of Directors of the Company (the "Board") at the Company's 2003 annual
stockholders meeting. Effective upon the execution and delivery of the
Agreement by all parties hereto, Relational irrevocably withdraws such
nominations.
2. Meeting with the Board.
(a) Relational will be entitled to attend the regularly scheduled
meeting of the Board that most closely precedes the expiration of
the notice period provided in Article II Section 9(a)(2) of the
Company's by-laws for making nominations of persons for election to
the Board at the Company's 2004 annual meeting. At such meeting of
the Board, Relational shall be entitled to discuss with the Board
Relational's concerns and recommendations, if any, regarding the
Company. It is expected that Relational's presentations and
discussion at the meeting would last for approximately one and
one-half hours, and that Relational would not attend the entire
meeting.
(b) Until the 2004 annual meeting of stockholders, representatives of
senior management and the Board of the Company will make themselves
available to meet with representatives of Relational at reasonable
times and intervals; provided, however, that representatives of
senior management will be available for such meetings at least once
per fiscal quarter if requested by Relational.
(c) Relational acknowledges and agrees that the meetings with the Board
and management contemplated by this Section 2 will be conducted in
compliance with Regulation FD and other applicable federal
securities law, so as not to trigger a requirement that the Company
disclose any material non-public information regarding the Company.
Xxxxx X. Xxxxxxxxx
July 21, 2003
3. 2004 Annual Meeting.
(a) If Relational reasonably does not believe that the performance of
the Company was satisfactory, Relational shall have the right in its
sole discretion, upon providing written notice that complies as to
timing and substance as set forth under Article II Section 9(a) of
the Company's by-laws, to nominate Xxxxxxxxx for election to the
Board, in which case the Company shall include Xxxxxxxxx'x name and
the information required by the federal securities laws both in the
Company's 2004 annual meeting proxy statement and on the Company's
proxy card relating to the Company's 2004 annual meeting; provided,
however, that the Company reserves its right to oppose the election
of Xxxxxxxxx to the Board at such annual meeting. The Company hereby
acknowledges and agrees that the materials submitted by Relational
to nominate Relational's two nominees for election at the 2003
annual meeting of stockholders are acceptable instruments of
nomination and that nominating materials substantially in the same
form (with factual information updated to the extent necessary to
reflect changes or new information) will be accepted by the Company
in connection with Relational's nomination of Xxxxxxxxx for election
at the 2004 annual meeting.
(b) If Relational nominates Xxxxxxxxx for election at the 2004 annual
meeting pursuant to Section 3(a) above, Relational shall not
nominate any other candidates for election to the Board at the
Company's 2004 annual meeting, or participate in any solicitation of
proxies for the election of directors other than Xxxxxxxxx or other
candidates recommended for election by the Board.
(c) If Relational elects to nominate Xxxxxxxxx for election pursuant to
Section 3(a), the Company and Relational shall each have the right
to include a statement of no more than 500 words in the Company's
proxy statement in support of their respective positions regarding
the election of Xxxxxxxxx.
(d) Notwithstanding Section 3(c), each of the Company and Relational
would have the independent right to publish or distribute any other
additional proxy solicitation materials (subject to Section 3(b)
above) regarding the Xxxxxxxxx nomination and their respective
positions concerning the election of directors.
(e) Relational will have the reasonable right to review all preliminary
and definitive proxy materials filed by the Company. In addition,
the Company covenants and agrees that the proxy statement and all
proxy cards used by the Company with respect to the 2004 annual
meeting of stockholders will feature Xxxxxxxxx'x name in the same
font size, style and leading as used for the Company's nominees. In
addition, the Company and Relational shall consult with each other
in designing the proxy card such that it accords fair and comparable
treatment to Xxxxxxxxx as is accorded to the other Company nominees,
including with respect to withholding authority and other relevant
matters.
(f) Relational represents that all statements and information regarding
Xxxxxxxxx provided for inclusion in the Company's proxy materials
will be accurate and complete in all material respects and will
comply with all applicable law.
Xxxxx X. Xxxxxxxxx
July 21, 2003
4. 2005 Annual Meeting. If Xxxxxxxxx is elected to the Board at the Company's
2004 annual meeting and if Relational so requests, (i) the Company shall
include Xxxxxxxxx as a nominee to the Board on the slate of nominees
recommended by the Board in the Company's proxy statement and on its proxy
card relating to the Company's 2005 annual meeting of stockholders, (ii)
Relational shall be entitled to review and reasonably approve the
statements made regarding Xxxxxxxxx in the Company's proxy materials,
(iii) Xxxxxxxxx'x name and the information regarding Xxxxxxxxx will
receive comparable treatment (as to prominence, location and appearance)
as the Company's nominees in the Company's proxy statement and proxy cards
for the 2005 annual meeting, and (iv) if Xxxxxxxxx is included in the
Company's proxy statement and proxy card, Relational shall not nominate
any other candidates for election to the Board at the Company's 2005
annual meeting, or participate in any solicitation of proxies for the
election of directors other than Xxxxxxxxx or other candidates recommended
for election by the Board.
5. 5% Ownership. If Relational ceases to own 5% or more of the currently
outstanding common stock of the Company at any time, this Agreement
automatically shall terminate and be of no further force or effect,
without any further action by the Company or Relational.
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
7. Injunctive Relief; Specific Performance. The parties acknowledge and agree
that an action for breach of contract and an award of monetary damages
alone would not be adequate to compensate the non-breaching party for the
substantial harm which would result from any such breach or violation of
this Agreement. Accordingly, the parties hereby unconditionally and
irrevocably agree that in the event of such a breach or violation, the
non-breaching party shall be entitled to injunctive relief and other
remedies (including, without limitation, seeking specific performance of
the terms of this Agreement), in addition to any other rights or remedies
available at law or in equity, all of which shall be deemed to be
cumulative and not alternative or exclusive.
8. Complete Agreement; Amendment; Waiver; Governing Law; Execution;
Authority. This Agreement represents the complete and final agreement of
the parties with respect to its subject matter and supersedes all prior
negotiations, discussions, agreements or understandings with respect to
such subject matter. The parties further acknowledge that each party is
not executing this Agreement in reliance on any promise, representation or
warranty not contained in this Agreement. This Agreement may be amended
only by a written agreement executed by each of the parties thereto. No
breach of any provision herein may be waived unless such waiver is in
writing and signed by the party to be bound. This document may be executed
by facsimile signature and in multiple counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the
same agreement.
[signature page follows]
Xxxxx X. Xxxxxxxxx
July 21, 2003
If you are in agreement with the foregoing, please so signify by
signing in the space provided below.
Very truly yours,
NATIONAL SEMICONDUCTOR CORPORATION
By: /s/ Xxxx X. Xxxxx, III
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Xxxx X. Xxxxx, III
Senior Vice President, General
Counsel and Secretary
Accepted and agreed as of the date set forth above.
RELATIONAL INVESTORS, L.P.,
a Delaware limited partnership
By: RELATIONAL INVESTORS LLC,
a Delaware limited liability company
Its: General Partner
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxx
Principal
RELATIONAL INVESTORS LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxx
Principal