LINEAR TECHNOLOGY CORPORATION
SENIOR EXECUTIVE BONUS PLAN
The Compensation Committee (the "Committee") of the Board of Directors has approved the adoption of a new
Senior Executive Bonus Plan (the "Plan"). Adoption of the Plan is subject to the approval of a majority of the
shares of the Company's Common Stock which are present in person or by proxy and entitled to vote at the
Annual meeting. The Plan provides the Company's senior key executives with the opportunity to earn incentive
awards based on the achievement of goals relating to the performance of the Company.
Background and Reasons for Adoption
The Company has a performance-based bonus plan similar to the Plan, pursuant to which the Company rewards
management for achieving certain performance objectives. However, under new section 162(m) of the Internal
Revenue Code, the federal income tax deductibility of compensation paid to the Company's Chief Executive
Officer and to each of its four other most highly compensated executive officers may be limited to the extent that
such compensation exceeds $1 million in any one year. Under section 162(m), the Company may deduct
compensation in excess of that amount if it qualifies as "performance-based compensation," as defined in section
162(m). The Plan is designed to qualify payments thereunder as performance-based compensation, so that the
Company may continue to receive a federal income tax deduction for the payment of incentive bonuses to its
executives. The Company will continue to operate its current bonus plan, as well, for the compensation of senior
executives and other key employees for whom section 162(m) is not an issue.
Description of the Plan
The following paragraphs provide a summary of the principal features of the Plan and its operation.
Purpose of the Plan
The Plan is intended to increase stockholder value and the success of the Company by aligning senior executive
compensation with the Company's business objectives and performance.
Administration of the Plan