-----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, HB8vxynRyxL9DV7FKCyO/DpO6cA8DdD7q6UJ3nYbUA0Q5q/MJZ1SxxScgnJ6hFVx YXUSSGudvM9OnZgxpXbkIA== 0000703361-94-000021.txt : 19941117 0000703361-94-000021.hdr.sgml : 19941117 ACCESSION NUMBER: 0000703361-94-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941116 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTEGRATED DEVICE TECHNOLOGY INC CENTRAL INDEX KEY: 0000703361 STANDARD INDUSTRIAL CLASSIFICATION: 3674 IRS NUMBER: 942669985 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12695 FILM NUMBER: 94560708 BUSINESS ADDRESS: STREET 1: 2975 STENDER WAY CITY: SANTA CLARA STATE: CA ZIP: 95054 BUSINESS PHONE: 4087276116 MAIL ADDRESS: STREET 2: 2975 STENDER WAY CITY: SANTA CLARA STATE: CA ZIP: 95054 10-Q 1 FORM 10-Q 10\02\94 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________ FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 2, 1994 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: 0-12695 INTEGRATED DEVICE TECHNOLOGY, INC. (Exact name of registrant as specified in its charter) Delaware 94-2669985 ________________________________________________________________________ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 2975 Stender Way, Santa Clara, California 95054 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (408) 727-6116 NONE _________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) 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 ____ ____ The number of outstanding shares of the registrant's Common Stock, $.001 par value, as of October 30, 1994 was 33,753,377. PART I. FINANCIAL INFORMATION -------------------------------- Item 1. Financial Statements INTEGRATED DEVICE TECHNOLOGY, INC. ----------------------------------- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- ( In thousands, except per share data) (Unaudited) Quarter Ended Quarter Ended October 2, 1994 Sept. 26, 1993 --------------- -------------- Revenues $95,585 $80,295 Cost of revenues 40,011 40,328 Gross profit 55,574 39,967 Operating expenses: Research and development 17,956 15,715 Selling, general and administrative 15,538 13,529 Total operating expenses 33,494 29,244 Operating income 22,080 10,723 Interest expense (895) (1,340) Interest income and other, net 1,480 276 Income before provision for income taxes 22,665 9,659 Provision for income taxes 5,659 1,926 Net income $17,006 $7,733 Net income per share $.47 $.24 Shares used in computing net income per share 35,952 32,186 The accompanying notes are an integral part of these financial statements. INTEGRATED DEVICE TECHNOLOGY, INC. ------------------------------------ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ----------------------------------------------- ( In thousands, except per share data) (Unaudited) Six Months Ended Six Months Ended October 2, 1994 Sept. 26, 1993 Revenues $190,628 $153,061 Cost of revenues 80,422 79,146 Gross profit 110,206 73,915 Operating expenses: Research and development 35,536 31,182 Selling, general and administrative 30,368 25,306 Total operating expenses 65,904 56,488 Operating income 44,302 17,427 Interest expense (1,854) (2,778) Interest income and other, net 2,721 795 Income before provision for income taxes 45,169 15,444 Provision for income taxes 11,285 3,083 Net income $33,884 $12,361 Net income per share $.94 $.39 Shares used in computing net income per share 36,040 31,953 The accompanying notes are an integral part of these financial statements. INTEGRATED DEVICE TECHNOLOGY, INC. ------------------------------------ CONDENSED CONSOLIDATED BALANCE SHEETS -------------------------------------- ( In thousands, except share data) (Unaudited) October 2, 1994 April 3, 1994 --------------- ------------- ASSETS Current assets: Cash and cash equivalents $87,774 $88,490 Short-term investments 38,120 33,351 Accounts receivable, net 59,872 40,643 Inventory (Note 2) 32,755 29,855 Deferred tax assets 24,068 26,276 Prepayments and other current assets 4,382 3,858 Total current assets 246,971 222,473 Property, plant and equipment, net 143,170 120,838 Other assets 7,425 6,260 TOTAL ASSETS $397,566 $349,571 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $25,954 $15,925 Accrued compensation and related expense 15,851 16,528 Deferred income on shipments to distributors 25,829 17,592 Income taxes payable 8,052 1,964 Other accrued liabilities 10,066 13,032 Current portion of long term obligations 8,608 14,184 Total current liabilities 94,360 79,225 Long term obligations 34,316 37,462 Deferred tax liabilities 8,517 8,517 Commitments and contingencies Shareholders' equity : Preferred stock; $.001 par value: 5,000,000 shares authorized; no shares issued Common stock; $.001 par value: 65,000,000 shares authorized; 33,652,361 and 33,405,552 shares issued and outstanding 34 33 Additional paid-in capital 162,109 160,221 Retained earnings 98,401 64,517 Cumulative translation adjustment (171) (404) Total shareholders' equity 260,373 224,367 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $397,566 $349,571 The accompanying notes are an integral part of these financial statements. INTEGRATED DEVICE TECHNOLOGY, INC. ------------------------------------ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- ( In thousands) (Unaudited) Six months Ended Six months Ended October 2, 1994 Sept. 26, 1993 ----------------- ---------------- Increase (decrease) in cash - --------------------------- Operating activities: Net income $33,884 $12,361 Adjustments: Depreciation and amortization 19,089 18,809 Provision for losses on accounts receivable 290 392 Changes in assets and liabilities: Accounts receivable (19,519) (668) Inventory (2,900) (1,882) Other assets (2,874) (1,417) Accounts payable 10,029 385 Accrued compensation and related expense (677) 2,559 Deferred income to distributors 8,237 1,695 Income taxes including deferred 8,296 2,940 Other accrued liabilities (2,348) 143 Net cash provided by operating activities 51,507 35,317 Investing activities: Additions to property, plant and equipment, net (40,636) (16,061) Proceeds from sale of equipment 400 591 Purchases of short-term investments (24,456) (2,007) Proceeds from sales of short-term investments 19,687 460 Net cash used for investing activities (45,005) (17,017) Financing activities: Issuance of common stock, net 1,889 3,946 Proceeds from borrowings 2,731 Payment on capital leases and other debt (9,107) (12,744) Net cash used for financing activities (7,218) (6,067) Net increase (decrease) in cash and cash equivalents (716) 12,233 Cash and cash equivalents at beginning of period 88,490 22,529 Cash and cash equivalents at end of period $87,774 $34,762 Supplemental disclosure of cash flow information: Interest paid 1,526 2,711 Income taxes paid 2,841 151 The accompanying notes are an integral part of these financial statements. INTEGRATED DEVICE TECHNOLOGY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The accompanying condensed consolidated balance sheets and the condensed consolidated statements of operations and cash flows and the accompanying notes are unaudited. In the opinion of management, these financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial data of Integrated Device Technology, Inc. and its subsidiaries for such periods. The results of operations for the three and six months period ending October 2, 1994 are not necessarily indicative of the results to be expected for the year ending April 2, 1995. This report on Form 10-Q for the quarter ended October 2, 1994 should be read in conjunction with the Company's Annual Report to Stockholders and Annual Report on Form 10-K for the year ended April 3, 1994. 2. Inventory consists of the following (in thousands): October 2, 1994 April 3, 1994 Raw materials $ 3,076 $ 2,834 Work-in-process 15,058 10,201 Finished goods 14,621 16,820 $ 32,755 $ 29,855 3. The provision for income taxes reflects the estimated annualized effective tax rate applied to earnings for the interim period. The effective rate differs from the U.S. statutory rate primarily due to earnings of foreign subsidiaries being taxed at lower rates, utilization of research and development credits and realization of certain deferred tax benefits for which a valuation allowance was previously required. 4. Net income per share is based on the weighted average number of shares of common stock and common stock equivalents outstanding, if dilutive. 5. The Company adopted Statement of Financial Accounting Standards (FAS) 115, "Accounting for Certain Investments in Debt and Equity Securities" effective April 4, 1994 as required by that pronouncement. The Statement requires reporting of investments as either held to maturity, trading or available for sale. The Company's investments have been classified as available for sale. The effect of adoption was not material. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations All references are to the company's fiscal periods ended October 2, 1994, and September 26, 1993, unless otherwise indicated. RESULTS OF OPERATIONS Revenues for the quarter and six months of fiscal 1995 increased to $95.6 million and $190.6 million respectively, representing increases of 19.0% for the quarter and 24.5% for the six-month period, respectively. The increases in the quarter and six-month period were attributable to higher unit volumes across most product families, geographic regions and sales channels. Significant unit volume growth was experienced in SRAM memories, particularly 3.3 volt devices, RISC based microprocessors, logic circuits and specialty memory products. The higher unit volumes were offset in part by lower average unit selling prices on certain products due to competitive pricing and the maturation of certain products. Gross profit for the quarter increased by $15.6 million to $55.6 million, or to 58.1% as a percentage of revenue (gross margin) from 49.8% in the same quarter of the prior year. For the six-month period gross profit increased to $110.2 million, or to 57.8% of revenues as compared to $73.9 million or 48.3%, respectively, for the comparable period of the prior year. The improvements in gross profit and gross margin were primarily attributable to higher capacity utilization and increased unit volumes. In addition, the Company continued a shift to more advanced designs and wafer fabrication processes which resulted in increased die per wafer yields and therefore lower unit costs. More efficient test and burn-in procedures also contributed to improved yields and reduced manufacturing costs. In addition, selective acceptance of new orders as a result of continued strong demand allowed the Company to shift manufacturing capacity to higher-margin products. Due primarily to the Company reaching a cap on certain royalty obligations, gross profit also benefited in the first six months of fiscal 1995 compared to the first six months of fiscal 1994 from a $1 million reduction in patent and royalty expenses relating to cross-license agreements. However, the Company's industry is characterized by patent claims and license agreements, and there can be no assurance royalty expenses will not increase in the future. Research and development (R&D) expenses increased in absolute dollars but declined as a percentage of revenues for the quarter and the first six months of fiscal 1995 as compared to the same periods of fiscal 1994. R&D grew $2.2 million in the quarter but declined as a percentage of revenues to 18.8% from 19.6% in the same quarter a year ago. For the six-month period R&D expenses increased 14.0% to $35.5 million, but decreased to 18.6% of revenues from 20.4% in the corresponding period of the prior year. The Company continues to invest in the development of new products and process technologies. In the first six months of fiscal 1995, the Company introduced 11 new products and continued to develop its 0.5 micron CMOS processes. The Company expects that it will continue to increase R&D spending in the future, although such expenses may vary as a percentage of revenues. Selling, general and administrative (S,G&A) expenses increased by $2.0 million in the quarter, decreasing to 16.3% of revenues from 16.9% in the same quarter of the prior year. SG&A expenses increased 20.0% to $30.4 million for the first six months of fiscal 1995, but declined as a percentage of revenues to 15.9% from 16.5% in the comparable period of the prior year. The increase in SG&A expenses was attributable to higher costs associated with the higher level of sales, including higher sales commissions, employee profit sharing and management bonuses, although SG&A expenses did not increase as rapidly as sales. The Company anticipates that SG&A expenses will continue to increase, but may vary as a percentage of revenues. Interest expense in the quarter decreased by 33.2% to $.9 million compared with $1.3 million in the prior year. For the six-month period interest expense decreased 33.3% to $1.9 million. The decrease was the result of lower debt balances coupled with lower interest rates. Interest income and other, net, increased to $1.5 million in the quarter and $2.7 million for the six-month period as contrasted with $.3 million and $.8 million, respectively, for the same period of the prior year. The increase in interest income was attributable to significantly higher average cash balances, partially offset by lower interest rates. Income taxes for the quarter are provided at an effective rate of 25%. This compares to an effective rate of 20% provided in the same quarter a year ago. The increase in the effective tax rate in fiscal 1995 as compared to fiscal 1994 is primarily due to higher utilization in fiscal 1994 of certain deferred tax benefits. The Company believes that its effective tax rate will increase in the future as the tax holiday associated with the Company's Malaysia facility expires and the Company will have exhausted its deferred tax benefits. LIQUIDITY AND CAPITAL RESOURCES The Company had cash and liquid investments of $125.9 million at October 2, 1994, an increase of $4.1 million during the first six months of fiscal 1995. Working capital increased from $143.2 million at April 3, 1994 to $152.6 million at October 2, 1994. As of October 2, 1994, the Company had $4.4 million available under unsecured lines of credit, all of which are overseas. The Company generated $51.5 million of cash flows from operations during the first six months of fiscal 1995. The Company's net cash used in investing activities was $45.0 million, of which $40.6 million was used for capital equipment and property and plant improvements. For the six months ended October 2, 1994 the Company used $7.2 million in net cash for financing activities, including net repayments of $9.1 million relating to capital equipment financing. In view of current and anticipated capacity requirements, the Company anticipates total fiscal 1995 capital expenditures of $100 million to $110 million. For the last six months of fiscal 1995 capital expenditures of $60 to $70 million are anticipated. For fiscal 1996, capital expenditures of approximately $200 million are anticipated. Principal requirements are for incremental production equipment at the Company's San Jose' wafer fabrication facility and completion of the conversion of the Salinas wafer fabrication facility from five-inch to six-inch wafer manufacturing. The Company has begun construction of a new building, planned at $3.1 million, adjacent to it's existing Penang, Malaysia facility. The new building will allow further expansion of the assembly and test capabilities and capacities of the Penang facility. Incremental production test equipment at the Company's San Jose' and Salinas facilities is also included in the planned capital expenditures. In addition, the Company has begun construction of a new eight-inch wafer fabrication facility in Hillsboro, Oregon. Construction is progressing more rapidly than previously anticipated. The incremental impact of the improved construction schedule is included in the planned capital expenditures. The new facility is planned to be operational late in fiscal 1996. On November 15, 1994, the Company filed with the Securities and Exchange Commission a Registration Statement on Form S-3 relating to the issuance and sale by the Company of 3,300,000 shares of Common Stock to the public. There can be no assurance that such offering will actually occur or that it will not be reduced in size. The Company may consider additional forms of financing to help meet its anticipated capital needs for the construction and equipping of its new Oregon facility, including a possible bond financing through the State of Oregon and/or a leasing transaction, which could yield aggregate proceeds of up to $70 million or more. The Company believes that the proceeds from such offering, together with existing cash and cash equivalents, cash flow from operations, existing credit facilities and possible other financing arrangements for the Oregon facility, will be adequate to fund anticipated capital expenditures and working capital needs through fiscal 1996. There can be no assurance, however, that the Company will not be required to seek other financing sooner or that such financing, if required, will be available on terms satisfactory to the Company. FACTORS AFFECTING FUTURE RESULTS The Company has experienced improvements in revenues, bookings and profitability during the first six months of fiscal 1995. However, the Company's future operating results are subject to a variety of uncertainties. The Company's quarterly operating results may be subject to fluctuations due to a number of factors, including the semiconductor industry's volatility, the timing of new product and process technology announcements by the Company or competitors, competitive pricing pressures, fluctuations in manufacturing yields, changes in the mix of products sold, availability and costs of raw materials, industry-wide wafer processing capacity, various geographic area economic conditions, or the costs of other events, such as the expansion of existing production capacities, delays in new facility construction or litigation. While the Company's business conditions appear to be improved, intense semiconductor industry competition and the world economy, as well as the rapid pace of technological change, make profitability trends difficult to predict. New products and process technology continue to require significant R&D investments by the Company but there can be no assurance that those efforts will result in market acceptance. A significant number of the Company's growth opportunities are targeted at the emerging market demand in computer and communications industries and depend on customer preference for IDT products and capabilities in lieu of competitive alternatives. There is no assurance that market acceptance and demand will continue or that customer preference will be realized. The Company is operating its wafer fabrication facilities in Salinas and San Jose and its assembly operations in Malaysia near installed equipment capacity. As a result, the Company has not been able to take advantage of all market opportunities. Due to long production lead times and current capacity constraints, any failure by the Company to adequately forecast the mix of product demand could adversely affect the Company's sales and operating results. To address its capacity requirements, the Company is converting its Salinas wafer fabrication facility from the existing five-inch wafer capability to six-inch wafers. Should the Company encounter production difficulties during the conversion, quality problems and delivery delays could result. The Company has also begun construction of a new eight-inch wafer fabrication facility. Construction or equipment delivery delays could result in longer term delays in the Company realizing the revenue production capacity of the new facility. The Company's capacity additions will result in a significant increase in fixed and operating expenses. If revenue levels do not increase sufficiently to offset these additional expense levels, the Company's operating results could be adversely impacted in future periods. PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) On Thursday, August 25, 1994 the Company held its 1994 Annual Meeting of Shareholders. At the meeting, 29,548,099 shares of Common Stock were represented in person or by proxy, representing 88.07% of the total outstanding shares. (b) The meeting involved the election of Class I Director - Leonard C. Perham. Votes For: 29,318,116 Votes Withheld: 229,983 The term of office of the following directors continued after the meeting: Federico Faggin John C. Bolger D. John Carey Carl E. Berg (c) Three additional matters (other than procedural matters) were voted upon at the meeting, the results of which were as follows: (i) Adoption of the 1994 Stock Option Plan Votes For: 22,402,240 Votes Against: 5,953,532 Votes Withheld: 58,813 Broker Non Vote: 1,133,514 (ii) Adoption of the 1994 Directors Stock Option Plan Votes For: 20,037,149 Votes Against: 8,451,232 Votes Withheld: 69,652 Broker Non Vote: 990,066 (iii) Ratification of appointment of Price Waterhouse as independent auditors Votes For: 29,451,828 Votes Against: 61,992 Votes Withheld: 34,279 Broker Non Vote 0 Item 6 Exhibits and Reports on Form 8-K (a) The following exhibits are filed herewith or incorporated by reference herein: Exhibit No. Description Page 4.1* Restated Certificate of Incorporation (previously filed as Exhibit 3A to Registration Statement on Form 8-B [File No. 0-12695] dated September 23, 1987). 4.2* Certificate of Amendment of Restated Certificate of Incorporation (previously filed as Exhibit 3.2 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 2, 1989). 4.3* Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock (previously filed as Exhibit 3.3 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 2, 1989). 4.4* Bylaws dated January 25, 1993 (previously filed as Exhibit 3.4 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended March 28, 1993). 4.5* Amended and Restated Rights Agreement dated as of February 27, 1992, between the Company and The First National Bank of Boston (previously filed as Exhibit 4.1 to Current Report on Form 8-K [File No. 0-12695] dated February 27, 1992). 10.1* Lease for 1566 Moffet Street, Salinas, California, dated June 28, 1985 between the Company and Carl E. Berg and Clyde J. Berg, dba Berg & Berg Developers (previously filed as Exhibit 10.7 to Form S-1 Registration Statement No. 33-3189). 10.2* Assignment of Lease dated October 30, 1985 between the Company and Synertek Inc. relating to 2975 Stender Way, Santa Clara, California (previously filed as Exhibit 10.4 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 1, 1990). 10.3* Assignment of Lease dated October 30, 1985 between the Company and Synertek Inc. relating to 3001 Stender Way, Santa Clara, California (previously filed as Exhibit 10.5 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 1, 1990). 10.4* Lease dated October 23, 1989 between Integrated Device Technology International Inc. and RREEF USA FUND-III relating to 2972 Stender Way, Santa Clara, California (previously filed as Exhibit 10.6 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 1, 1990). 10.5* First Deed of Trust and Assignment of Rents, Security Agreement and Fixture Filing dated March 28, 1990 between the Company and Santa Clara land Title Company for the benefit of The Variable Annuity Life Insurance Company relating to 2670 Seely Avenue, San Jose, California (previously filed as Exhibit 10.7 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 1, 1990). 10.6* Amended and Restated 1984 Employee Stock Purchase Plan. 10.7* Form of Indemnification Agreement between the Company and its directors and officers (previously filed as Exhibit 10.68 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended April 2, 1989). 10.8* Manufacturing, Marketing and Purchase Agreement between the Company and MIPS Computer Systems, Inc. dated January 16, 1988 (previously filed as Exhibit 10.12 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended March 29, 1992) (Confidential Treatment). 10.9* Preferred Stock Purchase Agreement dated January 14, 1992 among the Company, Berg & Berg Enterprises, Inc. and Quantum Effect Design, Inc. (previously filed as Exhibit 10.13 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended March 29, 1992). 10.10* Patent License Agreement between the Company and American Telephone and Telegraph Company dated May 1, 1992 (previously filed as Exhibit 19.1 to Quarterly Report on Form 10-Q [File No. 0-12695] for the Quarter Ended June 28, 1992) (Confidential Treatment). 10.11* Agreement Between the Company and Texas Instruments Incorporated effective December 10, 1992, including all related exhibits, among others, the Patent Cross-License Agreement and the OEM Purchase Agreement (previously filed as Exhibit 19.1 to Quarterly Report on Form 10-Q [File No. 0-12695] for the Quarter Ended December 27, 1992) (Confidential Treatment). 10.12 Series A Preferred Stock Purchase Agreement dated July 16, 1992 among Monolithic System Technology, Inc. and certain purchasers. 10.13 Series B Preferred Stock Purchase Agreement dated March 1994 among Monolithic System Technology, Inc. and certain purchasers. 10.14 Series C Preferred Stock Purchase Agreement dated June 13, 1994 among Monolithic System Technology, Inc. and certain purchasers. 10.15 Domestic Distributor Agreement between the Company and Wyle Laboratories, Inc. Electronic Marketing Group dated as of April 15, 1994. 10.16 Lease Extension and Modification Agreement between the Company and Baccarat Silicon, Inc. dated as of September 1, 1994, relating to 1566 Moffet Street, Salinas, California. 10.17 1994 Stock Option Plan and related documents. 10.18 1994 Directors Stock Option Plan and related documents. 10.19 Letter dated June 29, 1994 to the Company regarding construction of Oregon facility. * These exhibits were previously filed with the Commission as indicated and are incorporated herein by reference. (b) Reports on Form 8-K No reports have been filed on Form 8-K during this quarter. SIGNATURES 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. INTEGRATED DEVICE TECHNOLOGY, INC. Date: November 15, 1994 /s/ Leonard C. Perham ____________________________________ Leonard C. Perham Chief Executive Officer Date: November 15, 1994 /s/ William D. Snyder ____________________________________ William D. Snyder Vice President Finance (principal financial and accounting officer) EX-10.12 2 AGREEMENT (SERIES A STOCK PURCHASE) MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES A PREFERRED STOCK PURCHASE AGREEMENT July 16, 1992 TABLE OF CONTENTS Page SECTION 1 - Authorization and Sale of Preferred Stock 1 1.1 Authorization 1 1.2 Sale of Series A Preferred 1 SECTION 2 - Closing and Delivery 1 2.1 Closing and Delivery 1 SECTION 3 - Representations and Warranties of the Company 2 3.1 Organization and Standing 2 3.2 Corporate Power 2 3.3 Capitalization 2 3.4 Authorization 2 3.5 Compliance with Other Instruments 3 3.6 Litigation 3 3.7 Governmental Consents 3 3.8 Brokers or Finders 3 SECTION 4 - Representations and Warranties of the Purchasers 3 4.1 Experience 4 4.2 Investment 4 4.3 Rule 144 4 4.4 No Public Market 4 4.5 Access to Data 4 4.6 Authorization 5 4.7 Brokers or Finders 5 SECTION 5 - Miscellaneous 5 5.1 Governing Law 5 5.2 Successors and Assigns 5 5.3 Entire Agreement; Amendment 5 5.4 Notices, etc 5 5.5 Delays or Omissions 6 5.6 California Corporate Securities Law 6 5.7 Expenses 6 5.8 Indemnification For Finders Fees 6 5.9 Severability 6 5.10 Counterparts 6 EXHIBITS A. Schedule of Purchasers B. Amended and Restated Articles of Incorporation C. Not Used D. Registration Rights Agreement MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES A PREFERRED STOCK PURCHASE AGREEMENT This Agreement is made as of July 16, 1992, among Monolithic System Technology, Inc., a California corporation (the "Company"), and the persons and entities listed on the Schedule of Purchasers attached hereto as Exhibit A (the "Purchasers"). SECTION 1 Authorization and Sale of Preferred Stock 1.1 Authorization. The Company has authorized the sale and issuance of up to 500,000 shares of its Series A Preferred Stock ("Series A Preferred"), having the rights, restrictions, privileges and preferences as set forth in the Company's Amended and Restated Articles of Incorporation in the form attached to this Agreement as Exhibit B (the "Restated Articles"). 1.2 Sale of Series A Preferred. Subject to the terms and conditions hereof, the Company hereby issues and sells to the Purchasers, and the Purchasers hereby buy from the Company, the number of shares (the "Shares") of Series A Preferred specified opposite each Purchaser's name on the Schedule of Purchasers, at a purchase price of $1.00 per share payable in cash or through cancellation of indebtedness of the Company to the Purchasers. The Company's agreements with each of the Purchasers are separate agreements, and the sales of the Series A Preferred to each of the Purchasers are separate sales. SECTION 2 Closing and Delivery 2.1 Closing and Delivery. The closing of the purchase and sale of the Series A Preferred hereunder (the "Closing") took place and is effective as of the date hereof. Each of the Purchasers hereby acknowledges receipt from the Company of a certificate or certificates representing the number of Shares designated in column 2 of the Schedule of Purchasers and the Company hereby acknowledges receipt of payment of the purchase price therefor, by check or wire transfer payable to the Company or through cancellation of indebtedness of the Company to the Purchasers, in the amount specified in column 3 of the Schedule of Purchasers. SECTION 3 Representations and Warranties of the Company The Company hereby represents and warrants to the Purchasers as follows: 3.1 Organization and Standing. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of California and is in good standing under such laws. The Company has requisite corporate power to own and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted. The Company is not qualified to do business as a foreign corporation in any jurisdiction and such qualification is not presently required. 3.2 Corporate Power. The Company has all requisite legal and corporate power to execute and deliver this Agreement and the Registration and Information Rights Agreement attached hereto as Exhibit C (the "Registration Rights Agreement"), to sell and issue the Shares hereunder, to issue the Common Stock issuable upon conversion of the Series A Preferred and to carry out and perform its obligations under the terms of this Agreement and the Shareholder Rights Agreement. 3.3 Capitalization. The authorized capital stock of the Company consists of 4,000,000 shares of Common Stock, of which 2,600,000 shares are issued and outstanding, and 1,000,000 shares of Preferred Stock, of which 500,000 shares have been designated as Series A Preferred Stock and none of which is issued or outstanding prior to the Closing. All such issued and outstanding shares have been duly authorized and validly issued, and are fully paid and nonassessable. The Company has reserved (or will reserve prior to the Closing) (i) 500,000 shares of Series A Preferred for issuance hereunder, (ii) 500,000 shares of Common Stock for issuance upon conversion of the Shares and (iii) 900,000 shares of Common Stock for issuance to employees and consultants. The Series A Preferred shall have the rights, preferences, privileges and restrictions set forth in the Restated Articles. 3.4 Authorization. All corporate action on the part of the Company, its directors and shareholders necessary for the authorization, execution, delivery and performance of this Agreement and the Registration Rights Agreement by the Company, the authorization, sale, issuance and delivery of the Shares (and the Common Stock issuable upon conversion of the Shares) and the performance of the Company's obligations hereunder has been taken. This Agreement and the Registration Rights Agreement, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their respective terms. The Shares, when issued in compliance with the provisions of this Agreement, will be validly issued and fully paid and nonassessable, and the Common Stock issuable upon conversion of the Shares will be duly and validly reserved and, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and non assessable, and free of any liens or encumbrances. 3.5 Compliance with Other Instruments. The Company is not in violation of any term of its Articles or Bylaws nor, to the best of its knowledge, any material term of any agreement, judgment, statute, rule or regulation to which the Company is subject and a violation of which would have a material adverse effect on the condition, financial or otherwise, or operations of the Company. 3.6 Litigation. There are no actions, suits, proceedings or investigations pending against the Company or its properties before any court or governmental agency. 3.7 Governmental Consents. No consent, approval or authorization of, or designation, declaration or filing with, any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement and the Rights Agreement, or the offer, sale or issuance of the Series A Preferred (and the Common Stock issuable upon conversion of the Series A Preferred), or the consummation of any other transaction contemplated hereby, except (a) filing of the Restated Articles with the office of the Secretary of State of the State of California and (b) qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series A Preferred (and the Common Stock issuable upon conversion of the Series A Preferred) under the California Corporate Securities Law and other applicable Blue Sky laws, which filing and qualification, if required, will be accomplished in a timely manner prior to or promptly upon completion of the Closing. 3.8 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 4 Representions and Warranties of the Purchasers Each Purchaser hereby represents and warrants to the Company with respect to its purchase of the Shares as follows: 4.1 Experience. Each Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. 4.2 Investment. Each Purchaser is acquiring the Shares and the underlying Common Stock for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Each Purchaser understands that the Shares to be purchased and the underlying Common Stock have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act") by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser's representations as expressed herein. 4.3 Rule 144. Each Purchaser acknowledges that the Shares and the underlying Common Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. Each Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than two years after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. 4.4 No Public Market. Each Purchaser understands that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities. 4.5 Access to Data. Each Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has had the opportunity to review the Company's facilities. Each Purchaser has also had an opportunity to ask questions of officers of the Company concerning the terms of this offering, which questions were answered to its satisfaction. It understands that such discussions, as well as any written information issued by the Company, were intended to describe certain aspects of the Company's business and prospects but were not a thorough or exhaustive description. 4.6 Authorization. This Agreement and the Rights Agreement when executed and delivered by such Purchaser will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms. 4.7 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by such Purchaser, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 5 Miscellaneous 5.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California. 5.2 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. 5.3 Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termina tion is sought. 5.4 Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon delivery to the party to be notified in person or by courier service or five (5) days after deposit with the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to a Purchaser, at such Purchaser's address set forth in Exhibit A, or at such other address as such Purchaser shall have furnished to the Company in writing, or (b) if to any other holder of any Shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such Shares who has so furnished an address to the Company, or (c) if to the Company, one copy should be sent to its address set forth on the last page of this Agreement and addressed to the attention of the President, or at such other address as the Company shall have furnished to the Purchasers. 5.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of any Shares, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. 5.6 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING AVAILABLE. 5.7 Expenses. The Company and the Purchasers shall each bear their own expenses and legal fees with respect to this Agreement and the transactions contemplated hereby. 5.8 Indemnification For Finders Fees. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder's fee (and the costs and expenses of defending against such liability or asserted liability) for which such Purchaser or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 5.9 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 5.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the Purchasers, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. The foregoing agreement is hereby executed as of the date first above written. "COMPANY" MONOLITHIC SYSTEM TECHNOLOGY, INC., a California corporation 21775 Congress Hall Lane Saratoga, California 95070 By: ____________________________ Fu-Chieh Hsu, President "PURCHASERS" BACCARAT DEVELOPMENT PARTNERSHIP By: Baccarat Development Corporation, General Partner By: _______________________ Carl E. Berg, President _______________________________ Keno Misawa KAN ELECTRONICS CO., LTD. By: ____________________________ Title: _________________________ INTEGRATED DEVICE TECHNOLOGY, INC. By: ____________________________ Title: _________________________ EXHIBIT A SCHEDULE OF PURCHASERS Name and Address Number Aggregate of Purchaser of Shares Purchase Price Baccarat Development Partnership 266,000 $266,000 Keno Misawa 50,000 50,000 Kan Electronics Co., Ltd. 50,000 50,000 Integrated Device 134,000 134,000 Technology, Inc. Total 500,000 $500,000 RESTATED ARTICLES OF INCORPORATION OF MONOLITHIC SYSTEM TECHNOLOGY, INC. The undersigned, Fu-Chieh Hsu and Wing Yu Leung, hereby certify that: 1. They are the duly elected and acting President and Secretary, respectively, of Monolithic System Technology, Inc., a California corporation. 2. The Articles of Incorporation of this corporation are amended and restated to read in full as follows: I. The name of this corporation is Monolithic System Technology, Inc. II. The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. III. This corporation is authorized to issue two classes of stock, designated "Common Stock" and "Preferred Stock." The total number of shares which this corporation is authorized to issue is 5,000,000 shares. The number of shares of Common Stock which this corporation is authorized to issue is 4,000,000 shares. The number of shares of Preferred Stock which this Corporation is authorized to issue is 1,000,000 shares. The Preferred Stock may be issued from time to time in one or more series. Of the Preferred Stock, 500,000 shares shall be designated Series A Preferred Stock. The Board of Directors of this corporation is authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series, to determine the designation of any series, and to fix the number of shares of any series. The Series A Preferred Stock (the "Series A Preferred") shall have the rights, preferences, privileges and restrictions set forth below. Section 1. Dividend Rights of Series A Preferred. Subject to the rights of additional series of Preferred Stock which may be designated by the Board of Directors (the "Board") from time to time, the holder of each share of Series A Preferred shall be entitled to receive, prior and in preference to any declaration and payment of any dividend (payable other than in stock of the corporation) on the Common Stock, non-cumulative dividends at an annual rate equal to $0.10 per share, when and as declared by the Board of Directors. Section 2. Liquidation Preference. (a) Subject to the rights of additional series of Preferred Stock which may be designated by the Board from time to time, in the event of any liquidation, dissolution or winding up of the corporation, either voluntarily or involuntarily, the holders of the Series A Preferred shall be entitled to receive, prior and in preference to any distribution of any of the assets of the corporation to the holders of the Common Stock, an amount per share equal to $1.00 plus any declared but unpaid dividends for each share of Series A Preferred then held by them. After payment to the holders of the Series A Preferred of the amounts set forth in this Section 2, the entire remaining assets and funds of the corporation legally available for distribution, if any, shall be distributed among the holders of the Common Stock in proportion to the shares of Common Stock then held by them. If, upon the occurrence of such event, the assets thus distributed among the holders of the Series A Preferred shall be insufficient to permit the payment to such holders of the full aforesaid preferential amount, then the entire assets and funds of the corporation legally available for distribution shall be distributed among the holders of the Series A Preferred in proportion to the number of shares of Series A Preferred then held by them. (b) (i) For purposes of this Section 2, a liquidation, dissolution or winding up of the corporation shall be deemed to be occasioned by and to include (A) the corporation's sale of all or substantially all of its assets or (B) any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) which will result in the holders of the outstanding voting equity securities of the corporation immediately prior to such transaction or series of related transactions holding securities representing less than 50% of the voting power of the surviving entity immediately following such transaction or series of related transactions. (ii) In any such events, if the consideration received by the corporation is other than cash or indebtedness, its value will be deemed to be its fair market value. In the case of publicly traded securities, fair market value shall mean the closing market price of such securities on the date such consolidation, merger or sale is consummated. If a consideration is in a form other than publicly traded securities, its value shall be determined by the Board. Section 3. Conversion. The holders of the Series A Preferred shall have conversion rights as follows (the "Conversion Rights"): (a) Right to Convert. Each share of Series A Preferred shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for the Series A Preferred, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing One Dollar ($1.00) by the Conversion Price, determined as hereinafter provided, in effect at the time of conversion. The price at which shares of Common Stock shall be deliverable upon conversion of shares of Series A Preferred (the "Conversion Price") shall initially be One Dollar ($1.00) per share of Common Stock. Such initial Conversion Price shall be subject to adjustment as hereinafter provided. Upon conversion, all declared and unpaid dividends on the Series A Preferred shall be paid either in cash or in shares of Common Stock of the Corporation, at the election of the Company, wherein the shares of Common Stock shall be valued at the fair market value at the time of such conversion, as determined by the Board of Directors of the Corporation. (b) Automatic Conversion. Each share of Series A Preferred shall automatically be converted into shares of Common Stock at the then effective Conversion Price upon the closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Corporation to the public at a price per share (prior to underwriter commissions and offering expenses) of not less than $5.00 per share (appropriately adjusted for any recapitalization) and an aggregate offering price to the public of not less than $7,500,000. In the event of the automatic conversion of the Series A Preferred, the person(s) entitled to receive the Common Stock issuable upon such conversion of Series A Preferred shall not be deemed to have converted such Series A Preferred until immediately prior to the closing of such sale of securities. (c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock and to receive certificates there for, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that in the event of an automatic conversion pursuant to Section 3(b), the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent, and provided further that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such automatic conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, or in the case of automatic conversion on the date of closing of the offering or the effective date of such written consent, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. (d) Adjustments to Conversion Price for Diluting Issues. (i) Special Definitions. For purposes of this Section 3(d), the following definitions shall apply: (A) 'Options' shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities. (B) 'Original Issue Date' shall mean the date on which a share of Series A Preferred Stock was first issued. (C) 'Convertible Securities' shall mean any evidences of indebtedness, Preferred Stock, or other securities convertible into or exchangeable for Common Stock. (D) 'Additional Shares of Common' shall mean all shares of Common Stock issued (or, pursuant to Sec tion 3(d)(iii), deemed to be issued) by the Corporation after the Original Issue Date, other than shares of Common Stock issued, issuable or, pursuant to Section 3(d)(iii), deemed to be issued: (a) upon conversion of shares of Preferred Stock; (b) to officers, directors or employees of, or consultants to, the Corporation pursuant to a stock grant, option plan or purchase plan or other employee stock incentive program or arrangement approved by the Board of Directors; (c) as a dividend or distribution on Preferred Stock; and (d) in connection with any trans action for which adjustment is made pursuant to Section 3(d)(vi) hereof. (ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue. (iii) Options and Convertible Securities. In the event the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 3(d)(v) hereof) of such Additional Shares of Common would be less than the Conversion Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common are deemed to be issued: (A) no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities, in each case, pursuant to their respective terms; (B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (C) upon the expiration of any such Options or any rights of conversion or exchange under such Convert ible Securities which shall not have been exercised, the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if: (a) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and (b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation upon the issue of the Convertible Securities with respect to which such Options were actually exercised; (D) no readjustment pursuant to clauses (B) or (C) above shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price on the original adjustment date, or (ii) the Conversion Price that would have resulted from any issuance of Additional Shares of Common between the original adjustment date and such readjustment date; and (E) in the case of an Option which expires by its terms not more than 30 days after the date of issue thereof, no adjustment of the Conversion Price shall be made until the expiration or exercise of such Option, whereupon such adjustment shall be made in the same manner provided in clause (C) above. (iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to Section 3(d)(iii)) without consideration or for a consideration per share less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, such Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price theretofore in effect by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common so issued; provided further that, for the purposes of this Section 3(d)(iv), all shares of Common Stock issuable upon exercise, conversion or exchange of outstanding Options or Convertible Securities, as the case may be, shall be deemed to be outstanding, and immediately after any Additional Shares of Common are deemed issued pursuant to Section 3(d)(iii), such Additional Shares of Common shall be deemed to be outstanding. (v) Determination of Consideration. For purposes of this Section 3(d), the consideration received by the Corporation for the issue of any Additional Shares of Common shall be computed as follows: (A) Cash and Property. Such consideration shall: (a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation excluding amounts paid or payable for accrued interest or accrued dividends; (b) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board; and (c) in the event Additional Shares of Common are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as determined in good faith by the Board. (2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to Section 3(d)(iii)(1), relating to Options and Convertible Securities, shall be determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by (y) the maximum number of shares of Common Stock issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, as determined in Section 3(d)(iii) hereof. (vi) Adjustments for Subdivisions, Stock Dividends, Combinations or Consolidations of Common Stock. In the event the Corporation effects a subdivision or combination of its outstanding shares of Common Stock into a greater or smaller number of shares without a proportionate and corresponding subdivision or combination of its outstanding shares of Preferred Stock, then and in each such event the Conversion Price shall be increased or decreased proportionally. (vii) Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, any distribution payable in securities of the Corporation other than shares of Common Stock and other than as otherwise adjusted in this Section 3, then and in each such event provision shall be made so that the holders of Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation which they would have received had their shares of Preferred Stock been converted into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 3 with respect to the rights of the holders of the Preferred Stock. (viii) Adjustments for Reclassification, Exchange and Substitution. If the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than in an event provided for in Section 3(d)(i) above), the Conversion Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted such that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Preferred Stock immediately before that change. (e) No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Preferred Stock against impairment. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 3, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock. (g) Notices of Record Date. In the event of any taking by the corporation of the record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the corporation shall mail to each holder of Series A Preferred, at least twenty (20) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution. (h) Reservation of Stock. The corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Series A Preferred such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all the then outstanding shares of the Series A Preferred, the corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. (i) Notices. Any notice required by the provisions of this Section 3 to be given to the holders of shares of Series A Preferred shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his or her address appearing on the books of the corporation. Section 4. Voting Matters. Except as otherwise required by law, each share of Common Stock issued and outstanding shall have one vote. Each share of Series A Preferred issued and outstanding shall have the number of votes equal to the number of shares of Common Stock into which the Series A Preferred is convertible as adjusted from time to time pursuant to Section 3 hereof. The holder of each share of Series A Preferred shall be entitled to notice of any shareholders' meeting in accordance with the by-laws of the corporation and shall vote with the holders of the Common Stock and upon any matter submitted to a vote of shareholders, except those matters required by law to be submitted to a class vote. Section 5. Residual Rights. All rights accruing to the outstanding shares of this corporation not expressly provided for to the contrary herein shall be vested in the Common Stock. Section 6. Consent for Certain Repurchases of Common Stock Deemed to be Distributions. Each holder of Series A Preferred shall be deemed to have consented, for purposes of Section 502, 503 and 506 of the California Corporations Code, to distributions made by the corporation in connection with the repurchase of shares of Common Stock issued to or held by employees or consultants upon termination of their employment or services or pursuant to agreements providing for the right of said repurchase between the corporation and such persons. IV Section 1. Limitation of Directors' Liability. The liability of the directors of this corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. Section 2. Indemnification of Corporate Agents. This corporation is authorized to provide for, through bylaw provisions or through agreements with the agents, or both, the indemnification of agents (as defined in Section 317 of the California General Corporation Law) of the corporation in excess of that expressly permitted by said Section 317 for said agents to the fullest extent permissible under California law, subject to the limitations set forth in Section 204 of the California General Corporation Law with respect to actions for breach of duty to this corporation or its shareholders. Section 3. Repeal or Modification. Any repeal or modification of the foregoing provisions of this Article IV shall not adversely affect any right of indemnification or limitation of liability of an agent of this corporation relating to acts or omissions occurring prior to such repeal or modification." 3. The foregoing amendment and restatement has been duly approved by the Board of Directors of the corporation. 4. The foregoing amendment has been duly approved by the holders of the requisite number of shares of the corporation in accordance with Sections 902 and 903 of the California Corporations Code. The total number of outstanding shares of each class entitled to vote with respect to the foregoing amendment and restatement was 2,600,000 shares of Common Stock. The number of shares voting in favor of the foregoing amendment equaled or exceeded the vote required. The required vote was a majority of the outstanding shares of Common Stock. I further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of our my knowledge. Executed at Saratoga, California this _____ day of June, 1992. Fu-Chieh Hsu, President Wing Yu Leung, Secretary REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is made as of this 16th day of July, 1992 by and among Monolithic System Technology, Inc., a California corporation (the "Company"), and the Purchasers listed on Exhibit A to that certain Series A Preferred Stock Purchase Agreement dated the date hereof (the "Purchase Agreement") by and among the Company and the Purchasers pursuant to which the Company sold to the Purchasers 500,000 shares of its Series A Preferred Stock ("Series A Preferred"). AGREEMENT I. REGISTRATION RIGHTS 1. Certain Definitions. As used in this Agreement, the following terms shall have the following respective meanings: "Commission" shall mean the Securities and Exchange Commission or any successor agency. "Holder" shall mean each Purchaser and any transferee of Registrable Securities who, pursuant to Section 15 below, is entitled to registration rights hereunder. "Restricted Securities" shall mean the securities of the Company required to bear the legend set forth in Section 3 hereof (or any similar legend). "Registrable Securities" shall mean (i) shares of the Company's Common Stock issued or issuable upon the conversion of the Series A Preferred; (ii) any Common Stock of the Company or other securities issued or issuable in respect of shares of the Series A Preferred; and (iii) shares of the Company's Common Stock or other securities issued or issuable upon any conversion of the Series A Preferred upon any stock split, stock dividend, recapitalization, or similar event; provided, however, that any shares described in clauses (i)-(iii) above which have been resold to the public shall cease to be Registrable Securities upon such resale. The terms "register," "registered," and "registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement. "Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 5, 6 and 7 hereof, including, without limitation, all registration, qualification and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration but excluding all Selling Expenses. "Securities Act" shall mean the Securities Act of 1933, as amended. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to the securities registered by the Holders and any fees of counsel to any Holder. 2. Restrictions on Transferability. The Restricted Securi ties shall not be transferable except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. Each holder of Restricted Securities will cause any proposed transferee of the Restricted Securities held by such holder to agree to take and hold such Restricted Securities subject to the provisions and upon the conditions specified in this Agreement. 3. Restrictive Legend. Each certificate representing (i) the Series A Preferred, (ii) shares of the Company's Common Stock issued upon conversion of the Series A Preferred, and (iii) any other securities issued in respect of the Series A Preferred or Common Stock issued upon conversion of the Series A Preferred upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of Section 4 below) be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws): THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THESE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION. 4. Notice of Proposed Transfers. The holder of each certificate representing Restricted Securities by acceptance thereof agrees to comply in all respects with the provisions of this Section 4. Prior to any proposed transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transfer, the holder thereof shall give written notice to the Company of such Holder's intention to effect such transfer. Each such notice shall describe the manner and circumstances of the proposed transfer in sufficient detail, and shall, if the Company so requests, be accompanied by either (i) an unqualified written opinion of legal counsel who shall be reasonably satisfactory to the Company, addressed to the Company and reasonably satisfactory in form and substance to the Company's counsel, to the effect that the proposed transfer of the Restricted Securities may be effected without registration under the Securities Act, or (ii) a "No Action" letter from the Commission to the effect that the transfer of such securities without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such Restricted Securities shall be entitled to transfer such Restricted Securities in accordance with the terms of the notice delivered by the holder to the Company; provided, however, that no opinion or No Action letter need be obtained with respect to a transfer to (A) a partner, active or retired, of a holder of Restricted Securities, (B) the estate of any such partner, or (C) the spouse, children, grandchildren or spouse of such children or grandchildren of any holder or to trusts for the benefit of any holder or such persons, provided that in such cases the transferee agrees in writing to be subject to the terms hereof. Each certificate evidencing the Restricted Securities transferred as above provided shall bear the appropriate restrictive legend set forth in Section 3 above, except that such certificate shall not bear such restrictive legend if in the opinion of counsel for the Company such legend is not required in order to establish compliance with any provisions of the Securities Act. 5. Requested Registration. (a) Request for Registration. If at any time after three months following the Company's initial registered public offering, the Company shall receive from any Holder or group of Holders of Registrable Securities a written request that the Company effect any registration, qualification or compliance with respect to all or a part of the Registrable Securities, the anticipated gross offering price of which would exceed $2,000,000, the Company will: (x) promptly give written notice of the proposed registration, qualification or compliance to all other Holders; and (y) as soon as practicable, use its best efforts to effect such registration, qualification or compliance (including, without limitation, the execution of an undertaking to file post- effective amendments, appropriate qualification under applicable blue sky or other state securities laws and appropriate compliance with applicable regulations issued under the Securities Act and any other governmental requirements or regulations) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request received by the Company within 15 days after receipt of such written notice from the Company; Provided, however, that the Company shall not be obligated to take any action to effect any such registration, qualification or compliance pursuant to this Section 5: (A) In any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act; (B) After the Company has effected one (1) such registration pursuant to this Section 5(a), such registration has been declared or ordered effective and the securities offered pursuant to such registration have been sold. Subject to the foregoing clauses (A) and (B), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of any Holder or Holders. If, however, the Company shall furnish to the Holder or Holders requesting a registration statement pursuant to this Section 5 a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its share holders for such registration statement to be filed and it is therefore essential to defer the filing of such registration statement, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request of the Holder or Holders requesting such registration; provided, however, that the Company may not utilize this right more than once in any twelve-month period. (b) Underwriting. If the Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 5(a) and the Company shall include such information in the written notice referred to in Sec tion 5(a)(x). The right of any Holder to registration pursuant to Section 5 shall be conditioned upon such Holder's participation in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting to the extent provided herein. The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the managing underwriter selected for such underwriting by a majority in interest of the Holders. Notwithstanding any other provision of this Section 5, if the managing underwriter advises the Holders in writing that marketing factors require a limitation of the number of shares to be underwritten, then, subject to the provisions of Section 5(a), the Company shall so advise all Holders and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be allocated among all Holders requesting inclusion in the registration in proportion, as nearly as practicable, to the respective amounts of Registrable Securities originally requested by such Holders to be included in the registration statement. No Registrable Securities excluded from the underwriting by reason of the managing underwriter's marketing limitation shall be included in such registration. If any Holder of Registrable Securities disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the managing under writer and the other Holders. The Registrable Securities and/or other securities so withdrawn shall also be withdrawn from registration; provided, however, that if by the withdrawal of such Registrable Securities a greater number of Registrable Securities held by other Holders may be included in such registration (up to the maximum of any limitation imposed by the underwriters), then the Company shall offer to all Holders who have included Registrable Securities in the registration the right to include additional Registrable Securities in the same proportion used in determining the underwriter limitation in this Section 5(b). If the registration does not become effective due to the withdrawal of Registrable Securities, then either (1) the Demand Holders requesting registration shall reimburse the Company for expenses incurred in complying with the request or (2) the aborted registration shall be treated as effected for purposes of Section 5(a)(B). 6.Company Registration. (a) Notice of Registration. If the Company shall determine to register any of its securities, either for its own account or the account of a security holder or holders exercising their respective demand registration rights, other than (i) the Company's initial public offering, (ii) a registration relating solely to employee benefit plans or (iii) a registration relating solely to a Commission Rule 145 transaction, the Company will: (i) promptly give to each Holder written notice thereof; and (ii) include in such registration (and any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or requests, made within 15 days after receipt of such written notice from the Company, by any Holder or Holders, provided that the Company may limit, to the extent so advised by the underwriters, the amount of Registrable Securities to be included in the registration by the Holders. (b) Allocation. In all registered public offerings, whether underwritten or not, the amount of Registrable Securities of Holders which are included in such registration, in accordance with the limitation set forth in Section 6(a)(ii) above, shall be allocated among all Holders requesting inclusion in the registration in proportion, as nearly as practicable, to the respective amounts of Registrable Securities originally requested by such Holders to be included in the registration statement. 7.Registration on Form S-3. The Company shall use its best efforts to qualify for registration on Form S-3, and to that end, the Company shall comply with the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). After the Company has qualified for the use of Form S-3, each holder of Registrable Securities shall have the right to request an unlimited number of registrations on Form S-3 (such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended method of disposition of such shares by each such holder), subject only to the following limitations: (i) The Company shall not be obligated to cause a registration on Form S-3 to become effective prior to one hundred eighty (180) days following the effective date of a Company- initiated registration (other than a registration effected solely to qualify an employee benefit plan or to effect a business combination pursuant to Rule 145); (ii) The Company shall not be obligated to cause a registration on Form S-3 to become effective prior to expiration of one hundred eighty (180) days following the effective date of the most recent registration pursuant to a request by a holder of Registrable Securities under Section 5 of this Agreement or pursuant to a request by a holder of registration rights under any other agreement of the Company granting Form S-3 demand registration rights; (iii) The Company shall not be required to effect a registration pursuant to this Section 7, unless the Holder or Holders requesting registration propose to dispose of shares of Registrable Securities having an aggregate disposition price (before deduction of underwriting discounts and expenses of sale) of at least $1,000,000; and (iv) The Company shall not be required to maintain and keep any such registration on Form S-3 effective for a period exceeding ten (10) days from the effective date thereof. The Company shall give notice to all Holders and all holders of registration rights under any other agreement of the Company granting Form S-3 or similar demand registration rights of the receipt of a request for registration pursuant to this Section 7 and shall provide a reasonable opportunity for all such other Holders, including holders of registration rights under any other agreement of the Company granting Form S-3 or similar demand registration rights, to participate in the registration. Subject to the fore going, the Company will use its best efforts to effect promptly the registration of all shares of Registrable Securities on Form S-3 to the extent requested by the Holder or Holders thereof for purposes of disposition. In the event the Underwriter determines that market factors require a limitation on the number of shares to be underwritten, then shares shall be excluded from such registration and underwriting pursuant to the method described in Section 5(b). 8.Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 5, Section 6 or Section 7 shall be borne by the Company. All Selling Expenses relating to securities registered by the Holders shall be borne by the Holders of such securities pro rata on the basis of the number of shares so registered. 9.Registration Procedures. In the case of each registration, qualification or compliance effected by the Company pursuant to this Agreement the Company will keep each Holder advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. At its expense the Company will furnish such number of prospectuses and other documents incident thereto as a Holder from time to time may reasonably request. 10.Termination of Registration Rights. The registration rights granted pursuant to this Agreement shall terminate as to any Holder, at such time after the Company's initial public offering as the Registrable Securities held by such Holder may be sold within any three (3) month period pursuant to Rule 144. 11.Lockup Agreement. In consideration for the Company agreeing to its obligations under this Agreement each Holder of Registrable Securities and each transferee pursuant to Section 15 hereof agrees (but only if each officer and director of the Company also agrees), in connection with the first registration of the Company's securities, upon request of the Company or the under writers managing any underwritten offering of the Company's securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as the Company or the underwriters may specify. Each Holder agrees that the Company may instruct its transfer agent to place stop-transfer notations in its records to enforce the provisions of this Section 11. 12.Indemnification. (a) The Company will indemnify each Holder, each of its officers, directors and partners and such Holder's legal counsel and independent accountants, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and liabilities (or actions in respect thereof), including any of the foregoing incurred in settlement of any litigation, commenced or threatened, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus, offering circular or other document, or any amendment or supplement thereto, incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each of its officers, directors and partners and such Holder's legal counsel and independent accountants, and each person controlling such Holder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating, preparing or defending any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission or alleged untrue statement or omission, made in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder or underwriter and stated to be specific ally for use therein. (b) Each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers and its legal counsel and independent accountants, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, and each other such Holder, each of its officers and directors and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, such Holders, such directors, officers, legal counsel, independent accountants, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by an instrument duly executed by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holders hereunder shall be limited to an amount equal to the gross proceeds before expenses and commissions to each such Holder of Registrable Securities sold as contemplated herein. (c) Each party entitled to indemnification under this Section 12 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, except to the extent, but only to the extent, that the Indemnifying Party's ability to defend against such claim or litigation is impaired as a result of such failure to give notice. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. 13.Information by Holder. The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as the Company may request in writing and as shall be required in connection with any registration, qualification or compliance referred to in this Agreement. 14.Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission which may at any time permit the sale of the Restricted Securities to the public without registration, after such time as a public market exists for the Common Stock of the Company, the Company agrees to: (a) Make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times after the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public; (b) Use its best efforts to then file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements); (c) Furnish to Holders of Registrable Securities forth with upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after 90 days after the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting require ments), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as a Holder of Registrable Securities may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration. 15.Transfer of Registration Rights. The right to cause the Company to register securities granted the Purchasers hereunder may be assigned to a transferee or assignee who acquires at least 10,000 shares of Series A Preferred (or Common Stock issued upon conversion thereof) (appropriately adjusted for stock splits, recapitalizations and the like) provided that the Company is given prior written notice of such assignment. In addition, rights to cause the Company to register securities may be freely assigned (a) to any constituent partner of a Holder of Registrable Securities, where such Holder is a partnership, or (b) to the spouse, children, grandchildren or spouse of such children or grandchildren of any Holder or to trusts for the benefit of any Holder or such persons. II. INFORMATION RIGHTS 16.Information Rights. The Company hereby covenants and agrees to furnish to each Purchaser for so long as such Purchaser is a holder of any shares of Series A Preferred purchased by such person pursuant to this Agreement (or Common Stock issued upon conversion of the Series A Preferred), as soon as practicable after the end of each fiscal year, and in any event within 90 days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such fiscal year, and consolidated statements of income and consolidated statements of changes in financial position of the Company and its subsidiaries, if any, for such year, prepared in accordance with generally accepted accounting principles, provided that this Section 16 shall terminate and be of no further force or effect immediately upon an initial public offering. Each Purchaser who receives from the Company or its agents, directly or indirectly, any information which the Company has not made generally available to the public, pursuant to the preparation and execution of this Agreement or disclosure in connection therewith or pursuant to the provisions of this Section 16, acknowledges and agrees that such information is confidential and for its use only in connection with evaluating its investment in the Company, and further agrees that it will not disseminate such information to any person other than its accountant, investment advisor or attorney and that such dissemination shall be only for purposes of evaluating its investment. III. RIGHT OF FIRST REFUSAL 17.Transfers of Securities. Before any Purchaser may transfer any of their shares of Series A Preferred (including Common Stock issued upon conversion of the Series A Preferred) (either referred to as "Shares"), such Shares shall first be offered to the Company (or the Company's assignee, as the case may be) as follows: (a) The Purchaser desiring to transfer the Shares (the "Seller") shall deliver a notice ("Notice") to the Company (or the Company's assignee, as the case may be) stating (i) its bona fide intention to sell or transfer such shares, (ii) the number of shares to be sold or transferred, (iii) the price for which the Seller proposes to sell or transfer such shares and (iv) the name of the proposed purchaser or transferee. (b) Within thirty (30) days after delivery of the Notice, the Company (or the Company's assignee, as the case may be) may elect to purchase all or part of the shares referenced in the Notice, by delivery to the Seller of a written notice stating the number of shares it elects to purchase. (c) In the event that the Company (or the Company's assignee, as the case may be) fails to exercise in full the right of first refusal within the period specified above, the Seller shall have one hundred twenty (120) days thereafter to sell the shares referenced in the Notice at a price and upon terms no more favorable to the purchaser thereof than specified in the Notice. In the event that the Seller has not sold such shares within such one hundred twenty (120) day period, the Seller shall not thereafter sell any of such shares without first offering such shares to the Company (or the Company's assignee, as the case may be) in the manner provided above. (d) The provisions of this Section 17 shall not apply (and no Notice shall be required) to a transfer of any shares (i) by a Purchaser to any constituent partner of a Purchaser, where such Purchaser is a partnership; provided, however, that any such transferee shall receive and hold such shares subject to the provisions of this Section 17 and there shall be no further transfer of such shares except in accordance herewith, and (ii) by a Purchaser as to shares sold as part of an initial public offering. (e) The right of first refusal granted pursuant to this Section 17 shall expire immediately prior to an initial public offering. (f) So long as this Section 17 is in effect, each certificate representing shares of the Company's Series A Preferred (or the Common Stock issued upon conversion of the Series A Preferred) upon any stock split, recapitalization or similar event, held by a Purchaser shall be stamped or otherwise imprinted with a legend in the following form (in addition to any other legends required under applicable federal or state securities laws): THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A RIGHT OF FIRST REFUSAL WHEREBY THE COMPANY HAS THE RIGHT TO PURCHASE THE SHARES REPRESENTED BY THIS CERTIFICATE PRIOR TO THE CONSUMMATION OF A SALE TO ANY OTHER PERSON. A COPY OF SUCH AGREEMENT MAY BE OBTAINED UPON A WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY. (g) The Company may assign its rights to purchase Shares pursuant to this Section 17 provided that any assignee must exercise such rights within the time periods designated herein with respect to action to be taken by the Company. IV. GENERAL PROVISIONS 18.Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California. The parties hereto agree to submit to the jurisdiction of the federal and state courts of the State of California with respect to the breach or interpretation of this Agreement or the enforcement of any and all rights, duties, liabilities, obligations, powers, and other relations between the parties arising under this Agreement. 19.Entire Agreement. This Agreement constitutes the full and entire understanding among the parties regarding the subject matter herein. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. 20.Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon delivery to the party to be notified in person or by courier service or five (5) days after deposit with the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to a Purchaser, to such Purchaser's address set forth on the signature pages hereto, or at such other address as such Purchaser shall have furnished to the Company in writing, or (b) if to any other holder of any Registrable Securities, to such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such Securities who has so furnished an address to the Company, or (c) if to the Company, to its address set forth on the signature page of this Agreement the attention of the Corporate Secretary, or at such other address as the Company shall have furnished to the Holders. 21.Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 22.Amendment. Any provision of this Agreement may be amended, waived or modified upon the written consent of the (i) Company and (ii) holders of a majority of the outstanding shares of Series A Preferred and Common Stock issued upon conversion thereof (excluding for all purposes in such computation any Common Stock resold to the public). Any Purchaser may waive any of his or her rights or the Company's obligations hereunder without obtaining the consent of any other person. IN WITNESS WHEREOF, the undersigned have executed this Regis tration and Information Rights Agreement as of the date set forth above. COMPANY MONOLITHIC SYSTEM TECHNOLOGY, INC. a California corporation 21775 Congress Hall Lane Saratoga, California 95070 By: ____________________________ Fu-Chieh Hsu, President PURCHASERS _________________________ Carl E. Berg _________________________ Keno Misawa KAN ELECTRONICS, INC. By: ____________________________ Title: _________________________ INTEGRATED DEVICE TECHNOLOGY, INC. By: ____________________________ Title: _________________________ EX-10.13 3 AGREEMENT (SERIES B STOCK PURCHASE) MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES B PREFERRED STOCK PURCHASE AGREEMENT March ____, 1994 TABLE OF CONTENTS Page SECTION 1 - Authorization and Sale of Preferred Stock 1 1.1 Authorization 1 1.2 Sale of Series B Preferred at the Closing 1 SECTION 2 - Closing and Delivery 1 SECTION 3 - Representations and Warranties of the Company 2 3.1 Organization and Standing 2 3.2 Corporate Power 2 3.3 Capitalization 2 3.4 Authorization 2 3.5 Compliance with Other Instruments 3 3.6 Litigation 3 3.7 Governmental Consents 3 3.8 Brokers or Finders 3 SECTION 4 - Representations and Warranties of the Purchasers 4 4.1 Experience 4 4.2 Investment 4 4.5 Access to Data 4 4.6 Authorization 5 4.7 Brokers or Finders 5 SECTION 5 - Agreement to Future Financings 5 5.1 Future Sales of Preferred Stock 5 SECTION 6 - Miscellaneous 5 6.1 Governing Law 5 6.2 Successors and Assigns 5 6.3 Entire Agreement; Amendment 5 6.4 Notices, etc 6 6.5 Delays or Omissions 6 6.6 California Corporate Securities Law 6 6.7 Expenses 7 6.8 Indemnification For Finders Fees 7 6.9 Severability 7 6.10 Counterparts 7 EXHIBITS A. Schedule of Purchasers B. Amended and Restated Articles of Incorporation C. Registration Rights Agreement MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES B PREFERRED STOCK PURCHASE AGREEMENT This Agreement is made as of March ____, 1994 among Monolithic System Technology, Inc., a California corporation (the "Company"), and the persons and entities listed on the Schedule of Purchasers attached hereto as Exhibit A (the "Purchasers"). SECTION 1 Authorization and Sale of Preferred Stock 1.1 Authorization. The Company has authorized the sale and issuance of up to 1,000,000 shares of its Series B Preferred Stock ("Series B Preferred"), having the rights, restrictions, privileges and preferences as set forth in the Company's Amended and Restated Articles of Incorporation in the form attached to this Agreement as Exhibit B (the "Restated Articles"). The Company's agreements with each of the Purchasers are separate agreements, and the sales of the Series B Preferred to each of the Purchasers are separate sales. 1.2 Sale of Series B Preferred. Subject to the terms and conditions hereof, the Company hereby issues and sells to the Purchasers, and the Purchasers hereby buy from the Company, a total of 1,000,000 shares (the "Shares") of Series B Preferred, the specific number of which is set forth opposite each Purchaser's name on the Schedule of Purchasers, at a purchase price of $2.00 per share payable in cash or through cancellation of indebtedness of the Company to the Purchasers. SECTION 2 Closing and Delivery 2.1 Closing. The closing of the purchase and sale of the Series B Preferred hereunder (the "Closing") has taken place concurrent with the execution of this Agreement and is effective as of the date hereof. Each of the Purchasers hereby acknowledges receipt from the Company of a certificate or certificates representing the number of Shares designated in column 2 of the Schedule of Purchasers and the Company hereby acknowledges receipt of payment of the purchase price therefor, by check or wire transfer payable to the Company or through cancellation of indebtedness of the Company to the Purchasers, in the amount specified in column 3 of the Schedule of Purchasers. SECTION 3 Representations and Warranties of the Company The Company hereby represents and warrants to the Purchasers as follows: 3.1 Organization and Standing. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of California and is in good standing under such laws. The Company has requisite corporate power to own and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted. The Company is not qualified to do business as a foreign corporation in any jurisdiction and such qualification is not presently required. 3.2 Corporate Power. The Company has all requisite legal and corporate power to execute and deliver this Agreement and the Amended and Restated Registration and Information Rights Agreement attached hereto as Exhibit C (the "Registration Rights Agreement"), to sell and issue the Shares hereunder, to issue the Common Stock issuable upon conversion of the Series B Preferred and to carry out and perform its obligations under the terms of this Agreement and the Registration Rights Agreement. 3.3 Capitalization. The authorized capital stock of the Company at Closing will consist of 5,000,000 shares of Common Stock, of which 2,600,000 shares are issued and outstanding, and 1,500,000 shares of Preferred Stock, of which 500,000 shares have been designated as Series A Preferred Stock and are issued and outstanding and of which 1,000,000 shares will at the Closing be designated as Series B Preferred Stock and none of which is issued or outstanding prior to the Closing. All such issued and outstanding shares have been duly authorized and validly issued, and are fully paid and nonassessable. The Company has reserved (or will reserve prior to the Closing) (i) 1,000,000 shares of Series B Preferred for issuance hereunder, (ii) 1,500,000 shares of Common Stock for issuance upon conversion of the Series A and Series B Preferred and (iii) 900,000 shares of Common Stock for issuance to employees and consultants. The Series B Preferred shall have the rights, preferences, privileges and restrictions set forth in the Restated Articles. 3.4 Authorization. All corporate action on the part of the Company, its directors and shareholders necessary for the authorization, execution, delivery and performance of this Agreement and the Registration Rights Agreement by the Company, the authorization, sale, issuance and delivery of the Shares (and the Common Stock issuable upon conversion of the Shares) and the performance of the Company's obligations hereunder has been taken. This Agreement and the Registration Rights Agreement, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their respective terms. The Shares, when issued in compliance with the provisions of this Agreement, will be validly issued and fully paid and nonassessable, and the Common Stock issuable upon conversion of the Shares will be duly and validly reserved and, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable, and free of any liens or encumbrances. 3.5 Compliance with Other Instruments. The Company is not in violation of any term of its Articles or Bylaws nor, to the best of its knowledge, any material term of any agreement, judgment, statute, rule or regulation to which the Company is subject and a violation of which would have a material adverse effect on the condition, financial or otherwise, or operations of the Company. 3.6 Litigation. There are no actions, suits, proceedings or investigations pending against the Company or its properties before any court or governmental agency. 3.7 Governmental Consents. No consent, approval or authorization of, or designation, declaration or filing with, any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement and the Registration Rights Agreement, or the offer, sale or issuance of the Series B Preferred (and the Common Stock issuable upon conversion of the Series B Preferred), or the consummation of any other transaction contemplated hereby, except (a) filing of the Restated Articles with the office of the Secretary of State of the State of California and (b) qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series B Preferred (and the Common Stock issuable upon conversion of the Series B Preferred) under the California Corporate Securities Law and other applicable Blue Sky laws, which filing and qualification, if required, will be accomplished in a timely manner prior to or promptly upon completion of the Closing. 3.8 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 4 Representations and Warranties of the Purchasers Each Purchaser hereby represents and warrants to the Company with respect to its purchase of the Shares as follows: 4.1 Experience. Each Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. 4.2 Investment. Each Purchaser is acquiring the Shares and the underlying Common Stock for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Each Purchaser understands that the Shares to be purchased and the underlying Common Stock have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act") by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser's representations as expressed herein. 4.3 Rule 144. Each Purchaser acknowledges that the Shares and the underlying Common Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. Each Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than two years after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. 4.4 No Public Market. Each Purchaser understands that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities. 4.5 Access to Data. Each Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has had the opportunity to review the Company's facilities. Each Purchaser has also had an opportunity to ask questions of officers of the Company concerning the terms of this offering, which questions were answered to its satisfaction. It understands that such discussions, as well as any written information issued by the Company, were intended to describe certain aspects of the Company's business and prospects but were not a thorough or exhaustive description. 4.6 Authorization. This Agreement and the Registration Rights Agreement when executed and delivered by such Purchaser will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms. 4.7 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by such Purchaser, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 5 Agreement to Future Financings 5.1 Future Sales of Preferred Stock. In the event the Company should engage in a subsequent round or rounds of financing involving the sale of any future series of Preferred Stock at a price per share not less than $2.00 and otherwise on terms and conditions on parity, on a share- for-share basis with those rights conferred upon the Purchasers herein, then each Purchaser agrees that it will take such action as the Company may reasonably request, including consent to any amendment of this Agreement, the Company's Articles of Incorporation or any other instrument related to the issue and sale of such future series of Preferred Stock, to enable the Company to conclude such financing. SECTION 6 Miscellaneous 6.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California. 6.2 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. 6.3 Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought. 6.4 Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon delivery to the party to be notified in person or by courier service or five (5) days after deposit with the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to a Purchaser, at such Purchaser's address set forth in Exhibit A, or at such other address as such Purchaser shall have furnished to the Company in writing, or (b) if to any other holder of any Shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such Shares who has so furnished an address to the Company, or (c) if to the Company, one copy should be sent to its address set forth on the last page of this Agreement and addressed to the attention of the President, or at such other address as the Company shall have furnished to the Purchasers. 6.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of any Shares, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. 6.6 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING AVAILABLE. 6.7 Expenses. The Company and the Purchasers shall each bear their own expenses and legal fees with respect to this Agreement and the transactions contemplated hereby. 6.8 Indemnification For Finders Fees. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder's fee (and the costs and expenses of defending against such liability or asserted liability) for which such Purchaser or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 6.9 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 6.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the Purchasers, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. The foregoing agreement is hereby executed as of the date first above written. COMPANY MONOLITHIC SYSTEM TECHNOLOGY, INC., a California corporation 2670 Seeley Road San Jose, California 95134 By: ________________________ Fu-Chieh Hsu, President PURCHASERS BACCARAT DEVELOPMENT PARTNERSHIP By: Baccarat Development Corporation, General Partner By: ________________________ Carl E. Berg, President INTEGRATED DEVICE TECHNOLOGY, INC. By: ____________________________ Title: _________________________ EXHIBIT A SCHEDULE OF PURCHASERS Aggregate Name and Address Number Purchase of Purchaser of Shares Price Baccarat Development Partnership 666,500 $1,333,000 [address] Integrated Device 333,500 $ 667,000 Technology, Inc. [address] Total 1,000,000 $2,000,000 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF MONOLITHIC SYSTEM TECHNOLOGY, INC. The undersigned, Fu-Chieh Hsu and Wing Yu Leung, hereby certify that: 1. They are the duly elected and acting President and Secretary, respectively, of Monolithic System Technology, Inc., a California corporation. 2. The Articles of Incorporation of this corporation are amended and restated to read in full as follows: I. The name of this corporation is Monolithic System Technology, Inc. II. The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. III. This corporation is authorized to issue two classes of stock, designated "Common Stock" and "Preferred Stock." The total number of shares which this corporation is authorized to issue is 6,500,000 shares. The number of shares of Common Stock which this corporation is authorized to issue is 5,000,000 shares. The number of shares of Preferred Stock which this Corporation is authorized to issue is 1,500,000 shares. The Preferred Stock may be issued from time to time in one or more series. Of the Preferred Stock, 500,000 shares shall be designated Series A Preferred Stock and 1,000,000 shares shall be designated Series B Preferred Stock. The Board of Directors of this corporation is authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series, to determine the designation of any series, and to fix the number of shares of any series. The Series A Preferred Stock (the "Series A Preferred") and the Series B Preferred Stock (the "Series B Preferred") shall have the rights, preferences, privileges and restrictions set forth below. Section 1. Dividend Rights of Series A Preferred. Subject to the rights of additional series of Preferred Stock which may be designated by the Board of Directors (the "Board") from time to time, the holder of each share of Series A Preferred and Series B Preferred shall be entitled to receive, prior and in preference to any declaration and payment of any dividend (payable other than in stock of the corporation) on the Common Stock, non-cumulative dividends at an annual rate equal to $0.10 and $0.20 per share, respectively, when and as declared by the Board of Directors. Dividends, if paid, or if declared and set apart for payment, must be paid on, or declared and set apart for payment on, all series of Preferred Stock contemporaneously, and if less than full dividends are paid or declared and set apart for payment, the same percentage of the dividend rate will be paid on or declared and set apart for payment on each series of Preferred Stock. Section 2. Liquidation Preference. (a) Subject to the rights of additional series of Preferred Stock which may be designated by the Board from time to time, in the event of any liquidation, dissolution or winding up of the corporation, either voluntarily or involuntarily, the holders of the Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the corporation to the holders of the Common Stock, an amount per share equal to $1.00 plus any declared but unpaid dividends for each share of Series A Preferred then held by them and an amount per share equal to $2.00 plus any declared but unpaid dividends for each share of Series B Preferred then held by them. After payment to the holders of the Series A Preferred of the amounts set forth in this Section 2, the entire remaining assets and funds of the corporation legally available for distribution, if any, shall be distributed among the holders of the Common Stock in proportion to the shares of Common Stock then held by them. If, upon the occurrence of such event, the assets thus distributed among the holders of the Series A Preferred and Series B Preferred shall be insufficient to permit the payment to such holders of the full aforesaid preferential amount, then the entire assets and funds of the corporation legally available for distribution shall be distributed among the holders of the Preferred Stock in proportion to the aggregate preferential amounts owed the holders of the then outstanding shares of each series of Preferred Stock upon a liquidation, dissolution or winding up of the corporation; and no amount shall be paid or set apart for payment on any series of the Preferred Stock unless, at the same time, amounts in like proportion to the respective preferential amounts to which the other outstanding series of the Preferred Stock are entitled shall be paid or set apart for payment on the outstanding other series. (b) Upon the completion of the distribution required by subparagraph (a) of this Section 2, if assets remain in this corporation, the holders of Common Stock of this corporation, including Common Stock issued upon conversion of the Preferred Stock, shall share ratably in the distribution of all remaining assets of the corporation available for distribution. (c) (i) For purposes of this Section 2, a liquidation, dissolution or winding up of the corporation shall be deemed to be occasioned by and to include (A) the corporation's sale of all or substantially all of its assets or (B) any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) which will result in the holders of the outstanding voting equity securities of the corporation immediately prior to such transaction or series of related transactions holding securities representing less than 50% of the voting power of the surviving entity immediately following such transaction or series of related transactions. (ii) In any such events, if the consideration received by the corporation is other than cash or indebtedness, its value will be deemed to be its fair market value. In the case of publicly traded securities, fair market value shall mean the closing market price of such securities on the date such consolidation, merger or sale is consummated. If a consideration is in a form other than publicly traded securities, its value shall be determined by the Board. Section 3. Conversion. The holders of the Series A Preferred and Series B Preferred shall have conversion rights as follows (the "Conversion Rights"): (a) Right to Convert. Each share of Series A Preferred and each share of Series B Preferred shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the corporation or any transfer agent for the Preferred Stock, into such number of fully paid and nonassessable shares of Common Stock as is determined, in the case of the Series A Preferred, by dividing One Dollar ($1.00) by the Series A Conversion Price, and, in the case of the Series B Preferred, by dividing Two Dollars ($2.00) by the Series B Conversion Price, determined as hereinafter provided, in effect at the time of conversion. The price at which shares of Common Stock shall be deliverable upon conversion of shares of Series A Preferred (the "Series A Conversion Price") shall initially be One Dollar ($1.00) per share of Common Stock, and the price at which shares of Common Stock shall be deliverable upon conversion of shares of Series B Preferred (the "Series B Conversion Price") shall initially be Two Dollars ($2.00) per share of Common Stock. The term "Conversion Price" as used herein shall refer to the respective Conversion Price for each series of Preferred Stock as the context so requires. The initial Conversion Price shall be subject to adjustment as hereinafter provided. Upon conversion, all declared and unpaid dividends on the Preferred Stock shall be paid either in cash or in shares of Common Stock of the Corporation, at the election of the Company, wherein the shares of Common Stock shall be valued at the fair market value at the time of such conversion, as determined by the Board of Directors of the Corporation. (b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Conversion Price upon the closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Corporation to the public at a price per share (prior to underwriter commissions and offering expenses) of not less than $5.00 per share (appropriately adjusted for any recapitalization) and an aggregate offering price to the public of not less than $7,500,000. In the event of the automatic conversion of the Preferred Stock, the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities. (c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock and to receive certificates there for, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that in the event of an automatic conversion pursuant to Section 3(b), the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent, and provided further that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such automatic conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, or in the case of automatic conversion on the date of closing of the offering or the effective date of such written consent, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. (d) Adjustments to Conversion Price for Diluting Issues. (i) Special Definitions. For purposes of this Section 3(d), the following definitions shall apply: (A) 'Options' shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities. (B) 'Original Issue Date' shall mean the date on which a share of either series of the Preferred Stock was first issued. (C) 'Convertible Securities' shall mean any evidences of indebtedness, Preferred Stock, or other securities convertible into or exchangeable for Common Stock. (D) 'Additional Shares of Common' shall mean all shares of Common Stock issued (or, pursuant to Section 3(d)(iii), deemed to be issued) by the Corporation after the Original Issue Date, other than shares of Common Stock issued, issuable or, pursuant to Section 3(d)(iii), deemed to be issued: (a) upon conversion of shares of Preferred Stock; (b) to officers, directors or employees of, or consultants to, the Corporation pursuant to a stock grant, option plan or purchase plan or other employee stock incentive program or arrangement approved by the Board of Directors; (c) as a dividend or distribution on Preferred Stock; and (d) in connection with any transaction for which adjustment is made pursuant to Section 3(d)(vi) hereof. (ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular share of Preferred Stock shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such share of Preferred Stock. (iii) Options and Convertible Securities. In the event the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 3(d)(v) hereof) of such Additional Shares of Common would be less than the Conversion Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common are deemed to be issued: (A) no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities, in each case, pursuant to their respective terms; (B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (C) upon the expiration of any such Options or any rights of conversion or exchange under such Convert ible Securities which shall not have been exercised, the Conversion Price computed upon the original issue thereof (or upon the occur rence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if: (a) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and (b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation upon the issue of the Convertible Securities with respect to which such Options were actually exercised; (D) no readjustment pursuant to clauses (B) or (C) above shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price on the original adjustment date, or (ii) the Conversion Price that would have resulted from any issuance of Additional Shares of Common between the original adjustment date and such readjustment date; and (E) in the case of an Option which expires by its terms not more than 30 days after the date of issue thereof, no adjustment of the Conversion Price shall be made until the expiration or exercise of such Option, whereupon such adjust ment shall be made in the same manner provided in clause (C) above. (iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to Section 3(d)(iii)) without consideration or for a consideration per share less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, such Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price theretofore in effect by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common so issued; provided further that, for the purposes of this Section 3(d)(iv), all shares of Common Stock issuable upon exercise, conversion or exchange of outstanding Options or Convertible Securities, as the case may be, shall be deemed to be outstanding, and immediately after any Additional Shares of Common are deemed issued pursuant to Section 3(d)(iii), such Additional Shares of Common shall be deemed to be outstanding. (v) Determination of Consideration. For purposes of this Section 3(d), the consideration received by the Corporation for the issue of any Additional Shares of Common shall be computed as follows: (A) Cash and Property. Such consideration shall: (a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation excluding amounts paid or payable for accrued interest or accrued dividends; (b) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board; and (c) in the event Additional Shares of Common are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as determined in good faith by the Board. (2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to Section 3(d)(iii)(1), relating to Options and Convertible Securities, shall be determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by (y) the maximum number of shares of Common Stock issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, as determined in Section 3(d)(iii) hereof. (vi) Adjustments for Subdivisions, Stock Dividends, Combinations or Consolidations of Common Stock. In the event the Corporation effects a subdivision or combination of its outstanding shares of Common Stock into a greater or smaller number of shares without a proportionate and corresponding subdivision or combina tion of its outstanding shares of Preferred Stock, then and in each such event the Conversion Price shall be increased or decreased proportionally. (vii) Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, any distribution payable in securities of the Corporation other than shares of Common Stock and other than as otherwise adjusted in this Section 3, then and in each such event provision shall be made so that the holders of Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation which they would have received had their shares of Preferred Stock been converted into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 3 with respect to the rights of the holders of the Preferred Stock. (viii) Adjustments for Reclassification, Exchange and Substitution. If the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than in an event provided for in Section 3(d)(i) above), the Conversion Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted such that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Preferred Stock immediately before that change. (e) No Impairment. The Corporation will not, by amend ment of its Articles of Incorporation or through any reorgani zation, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Preferred Stock against impairment. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 3, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjust ments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock. (g) Notices of Record Date. In the event of any taking by the corporation of the record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the corporation shall mail to each holder of Preferred Stock, at least twenty (20) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution. (h) Reservation of Stock. The corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all the then outstanding shares of the Preferred Stock, the corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. Any reserve of its authorized but unissued shares of Common Stock established by the corporation in accordance with this paragraph may not be diminished without the consent of the holders of a majority of the outstanding Preferred Stock. (i) No Reissuance of Series A or B Preferred. No share or shares of Series A Preferred or B Preferred acquired by the corporation by reason of purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares which the corporation shall be authorized to issue. (j) Notices. Any notice required by the provisions of this Section 3 to be given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his or her address appearing on the books of the corporation. Section 4. Voting Matters. Except as otherwise required by law, each share of Common Stock issued and outstanding shall have one vote. Each share of Preferred Stock issued and outstanding shall have the number of votes equal to the number of shares of Common Stock into which the Preferred Stock is convertible as adjusted from time to time pursuant to Section 3 hereof. The holder of each share of Preferred Stock shall be entitled to notice of any shareholders' meeting in accordance with the by-laws of the corporation and shall vote with the holders of the Common Stock and upon any matter submitted to a vote of shareholders, except those matters required by law to be submitted to a class vote. Section 5. Residual Rights. All rights accruing to the outstanding shares of this corporation not expressly provided for to the contrary herein shall be vested in the Common Stock. Section 6. Consent for Certain Repurchases of Common Stock Deemed to be Distributions. Each holder of Preferred Stock shall be deemed to have consented, for purposes of Section 502, 503 and 506 of the California Corporations Code, to distributions made by the corporation in connection with the repurchase of shares of Common Stock issued to or held by employees or consultants upon termination of their employment or services or pursuant to agree ments providing for the right of said repurchase between the corporation and such persons. IV Section 1. Limitation of Directors' Liability. The liability of the directors of this corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. Section 2. Indemnification of Corporate Agents. This corporation is authorized to provide for, through bylaw provisions or through agreements with the agents, or both, the indemnification of agents (as defined in Section 317 of the California General Corporation Law) of the corporation in excess of that expressly permitted by said Section 317 for said agents to the fullest extent permissible under California law, subject to the limitations set forth in Section 204 of the California General Corporation Law with respect to actions for breach of duty to this corporation or its shareholders. Section 3. Repeal or Modification. Any repeal or modification of the foregoing provisions of this Article IV shall not adversely affect any right of indemnification or limitation of liability of an agent of this corporation relating to acts or omissions occurring prior to such repeal or modification." 3. The foregoing amendment and restatement has been duly approved by the Board of Directors of the corporation. 4. The foregoing amendment has been duly approved by the holders of the requisite number of shares of the corporation in accordance with Sections 902 and 903 of the California Corporations Code. The total number of outstanding shares of each class entitled to vote with respect to the foregoing amendment and restatement was 2,600,000 shares of Common Stock and 500,000 shares of the Series A Preferred Stock. The number of shares voting in favor of the foregoing amendment equaled or exceeded the vote required. The required vote was a majority of the outstanding shares of Common Stock and a majority of the outstanding shares of Series A Preferred Stock. The undersigned further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of our own knowledge. Executed at Saratoga, California this _____ day of October, 1992. ------------------------ Fu-Chieh Hsu, President ------------------------- Wing Yu Leung, Secretary EX-10.14 4 AGREEMENT (SERIES C STOCK PURCHASE) MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES C PREFERRED STOCK PURCHASE AGREEMENT June 13, 1994 TABLE OF CONTENTS Page SECTION 1 - Authorization and Sale of Preferred Stock 1 1.1 Authorization 1 1.2 Sale of Series C Preferred at the Closing 1 SECTION 2 - Closing and Delivery 1 SECTION 3 - Representations and Warranties of the Company 2 3.1 Organization and Standing 2 3.2 Corporate Power 2 3.3 Capitalization 2 3.4 Authorization 2 3.5 Compliance with Other Instruments 3 3.6 Litigation 3 3.7 Governmental Consents 3 3.8 Brokers or Finders 3 SECTION 4 - Representations and Warranties of the Purchasers 4 4.1 Experience 4 4.2 Investment 4 4.3 Rule 144 4 4.4 No Public Market 4 4.5 Access to Data 4 4.6 Authorization 5 4.7 Brokers or Finders 5 SECTION 5 - Agreement to Future Financings 5 5.1 Future Sales of Preferred Stock 5 SECTION 6 - Miscellaneous 5 6.1 Governing Law 5 6.2 Successors and Assigns 5 6.3 Entire Agreement; Amendment 5 6.4 Notices, etc 6 6.5 Delays or Omissions 6 6.6 California Corporate Securities Law 6 6.7 Expenses 7 6.8 Indemnification For Finders Fees 7 6.9 Severability 7 6.10 Counterparts 7 EXHIBITS A. Schedule of Purchasers B. Amended and Restated Articles of Incorporation C. Addendum to Amended and Restated Registration Rights Agreement MONOLITHIC SYSTEM TECHNOLOGY, INC. SERIES C PREFERRED STOCK PURCHASE AGREEMENT This Agreement is made as of June 13, 1994 among Monolithic System Technology, Inc., a California corporation (the "Company"), and the persons and entities listed on the Schedule of Purchasers attached hereto as Exhibit A (the "Purchasers"). SECTION 1 Authorization and Sale of Preferred Stock 1.1 Authorization. The Company has authorized the sale and issuance of up to 1,100,000 shares of its Series C Preferred Stock ("Series C Preferred"), having the rights, restrictions, privileges and preferences as set forth in the Company's Amended and Restated Articles of Incorporation in the form attached to this Agreement as Exhibit B (the "Restated Articles"). The Company's agreements with each of the Purchasers are separate agreements, and the sales of the Series C Preferred to each of the Purchasers are separate sales. 1.2 Sale of Series C Preferred. Subject to the terms and conditions hereof, the Company hereby issues and sells to the Purchasers, and the Purchasers hereby buy from the Company, the total number of shares of Series A Preferred specified opposite such Purchaser's name in column 2 of the Schedule of Purchasers (the "Shares"), at a purchase price of $5.00 per share payable in cash or through cancellation of indebtedness of the Company to the Purchasers. SECTION 2 Closing and Delivery 2.1 Closing. The closing of the purchase and sale of the Series C Preferred hereunder (the "Closing") has taken place concurrent with the execution of this Agreement and is effective as of the date hereof. Each of the Purchasers hereby acknowledges receipt from the Company of a certificate or certificates representing the number of Shares designated in column 2 of the Schedule of Purchasers and the Company hereby acknowledges receipt of payment of the purchase price therefor, by check or wire transfer payable to the Company or through cancellation of indebtedness of the Company to the Purchasers, in the amount specified in column 3 of the Schedule of Purchasers. 2.2 Additional Closings. If the full amount of the Shares authorized for sale in Section 1.1 above is not sold at the Closing, the Company shall have the right for up to six (6) months following the Closing to sell the remaining Shares to one or more additional purchasers (the "Additional Shares") at the price and on the terms set forth herein. The closing of any purchase and sale of Shares to Additional Purchasers shall be referred to as an "Additional Closing." By execution of this Agreement, (i) the Purchasers hereby consent to the sale of the Shares to the Additional Purchasers and to the Additional Purchasers becoming a party to the Agreement, and (ii) each Additional Purchaser shall be added to the Schedule of Purchasers and shall be entitled to all rights and subject to all obligations of the Purchasers under this Agreement. The term "Purchasers" as used in this Agreement shall include the Additional Purchasers, unless the context specifically indicates otherwise. SECTION 3 Representations and Warranties of the Company SECTION 3 Representations and Warranties of the Company The Company hereby represents and warrants to the Purchasers as follows: 3.1 Organization and Standing. The Company is a corporation duly organized and existing under, and by virtue of, the laws of the State of California and is in good standing under such laws. The Company has requisite corporate power to own and operate its properties and assets, and to carry on its business as presently conducted and as proposed to be conducted. The Company is not qualified to do business as a foreign corporation in any jurisdiction and such qualification is not presently required. 3.2 Corporate Power. The Company has all requisite legal and corporate power to execute and deliver this Agreement and the Addendum to Amended and Restated Registration Rights Agreement attached hereto as Exhibit C (the "Addendum"), to sell and issue the Shares hereunder, to issue the Common Stock issuable upon conversion of the Series C Preferred and to carry out and perform its obligations under the terms of this Agreement and the Addendum. 3.3 Capitalization. The authorized capital stock of the Company at Closing will consist of 6,100,000 shares of Common Stock, of which 2,656,250 shares are issued and outstanding, and 2,600,000 shares of Preferred Stock, of which 500,000 shares have been designated as Series A Preferred Stock and are issued and outstanding, of which 1,000,000 shares have been designated as Series B Preferred Stock and are issued and outstanding, and of which 1,100,000 shares will at the Closing be designated as Series C Preferred Stock and none of which is issued or outstanding prior to the Closing. All such issued and outstand ing shares have been duly authorized and validly issued, and are fully paid and nonassessable. The Company has reserved (or will reserve prior to the Closing) (i) 1,100,000 shares of Series C Preferred for issuance hereunder, (ii) 2,600,000 shares of Common Stock for issuance upon conversion of the Series A, Series B and Series C Preferred and (iii) 900,000 shares of Common Stock for issuance to employees and consultants. The Series C Preferred shall have the rights, preferences, privileges and restrictions set forth in the Restated Articles. 3.4 Authorization. All corporate action on the part of the Company, its directors and shareholders necessary for the authorization, execution, delivery and performance of this Agreement and the Addendum by the Company, the authorization, sale, issuance and delivery of the Shares (and the Common Stock issuable upon conversion of the Shares) and the performance of the Company's obligations hereunder has been taken. This Agreement and the Addendum, when executed and delivered by the Company, shall constitute valid and binding obligations of the Company enforceable in accordance with their respective terms. The Shares, when issued in compliance with the provisions of this Agreement, will be validly issued and fully paid and nonassessable, and the Common Stock issuable upon conversion of the Shares will be duly and validly reserved and, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable, and free of any liens or encumbrances. 3.5 Compliance with Other Instruments. The Company is not in violation of any term of its Articles or Bylaws nor, to the best of its knowledge, any material term of any agreement, judgment, statute, rule or regulation to which the Company is subject and a violation of which would have a material adverse effect on the condition, financial or otherwise, or operations of the Company. 3.6 Litigation. There are no actions, suits, proceedings or investigations pending against the Company or its properties before any court or governmental agency. 3.7 Governmental Consents. No consent, approval or authorization of, or designation, declaration or filing with, any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Agreement and the Addendum, or the offer, sale or issuance of the Series C Preferred (and the Common Stock issuable upon conversion of the Series C Preferred), or the consummation of any other transaction contemplated hereby, except (a) filing of the Restated Articles with the office of the Secretary of State of the State of California and (b) qualification (or taking such action as may be necessary to secure an exemption from qualification, if available) of the offer and sale of the Series C Preferred (and the Common Stock issuable upon conversion of the Series C Preferred) under the California Corporate Securities Law and other applicable Blue Sky laws, which filing and qualification, if required, will be accomplished in a timely manner prior to or promptly upon completion of the Closing. 3.8 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 4 Representations and Warranties of the Purchasers Each Purchaser hereby represents and warrants to the Company with respect to its purchase of the Shares as follows: 4.1 Experience. Each Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. 4.2 Investment. Each Purchaser is acquiring the Shares and the underlying Common Stock for investment for its own account, not as a nominee or agent, and not with the view to, or for resale in connection with, any distribution thereof. Each Purchaser understands that the Shares to be purchased and the underlying Common Stock have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act") by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of such Purchaser's representations as expressed herein. 4.3 Rule 144. Each Purchaser acknowledges that the Shares and the underlying Common Stock must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from such registration is available. Each Purchaser is aware of the provisions of Rule 144 promulgated under the Securities Act which permit limited resale of shares purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the shares, the availability of certain current public information about the Company, the resale occurring not less than two years after a party has purchased and paid for the security to be sold, the sale being effected through a "broker's transaction" or in transactions directly with a "market maker" and the number of shares being sold during any three-month period not exceeding specified limitations. 4.4 No Public Market. Each Purchaser understands that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company's securities. 4.5 Access to Data. Each Purchaser has had an opportunity to discuss the Company's business, management and financial affairs with the Company's management and has had the opportunity to review the Company's facilities. Each Purchaser has also had an opportunity to ask questions of officers of the Company concerning the terms of this offering, which questions were answered to its satisfaction. It understands that such discussions, as well as any written information issued by the Company, were intended to describe certain aspects of the Company's business and prospects but were not a thorough or exhaustive description. 4.6 Authorization. This Agreement and the Addendum when executed and delivered by such Purchaser will constitute a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms. 4.7 Brokers or Finders. The Company has not incurred, and will not incur, directly or indirectly, as a result of any action taken by such Purchaser, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. SECTION 5 Agreement to Future Financings 5.1 Future Sales of Preferred Stock. In the event the Company should engage in a subsequent round or rounds of financing involving the sale of any future series of Preferred Stock at a price per share not less than $5.00 and otherwise on terms and conditions on parity, on a share- for-share basis with those rights conferred upon the Purchasers herein, then each Purchaser agrees that it will take such action as the Company may reasonably request, including consent to any amendment of this Agreement, the Company's Articles of Incorporation or any other instrument related to the issue and sale of such future series of Preferred Stock, to enable the Company to conclude such financing. SECTION 6 Miscellaneous 6.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California. 6.2 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. 6.3 Entire Agreement; Amendment. This Agreement and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought. 6.4 Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon delivery to the party to be notified in person or by courier service or five (5) days after deposit with the United States mail, by registered or certified mail, postage prepaid, addressed (a) if to a Purchaser, at such Purchaser's address set forth in Exhibit A, or at such other address as such Purchaser shall have furnished to the Company in writing, or (b) if to any other holder of any Shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such Shares who has so furnished an address to the Company, or (c) if to the Company, one copy should be sent to its address set forth on the last page of this Agreement and addressed to the attention of the President, or at such other address as the Company shall have furnished to the Purchasers. 6.5 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of any Shares, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. 6.6 California Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING AVAILABLE. 6.7 Expenses. The Company and the Purchasers shall each bear their own expenses and legal fees with respect to this Agreement and the transactions contemplated hereby. 6.8 Indemnification For Finders Fees. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder's fee (and the costs and expenses of defending against such liability or asserted liability) for which such Purchaser or any of its officers, partners, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finders' fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 6.9 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 6.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the Purchasers, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument. The foregoing agreement is hereby executed as of the date first above written. COMPANY MONOLITHIC SYSTEM TECHNOLOGY, INC., a California corporation 2670 Seeley Road San Jose, California 95134 By: ________________________ Fu-Chieh Hsu, President PURCHASERS DYNAMICS TECHNOLOGY By: ____________________________ Title: _________________________ INTEGRATED DEVICE TECHNOLOGY, INC. By: ____________________________ Title: _________________________ ________________________________ Phillip Pare EXHIBIT A SCHEDULE OF PURCHASERS Aggregate Name and Address Number Purchase of Purchaser of Shares Price Dynamics Technology 600,000 $3,000,000 21311 Hawthorne Boulevard Torrance, California 90503 Attention: Dana Ulrich Integrated Device Technology, Inc. 400,000 $2,000,000 2975 Stender Way Santa Clara, California 95054-3214 Phillip Pare 10,000 $50,000 233 Brown Road San Juan Bautista, California 95045 Total 1,010,000 $5,050,000 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF MONOLITHIC SYSTEM TECHNOLOGY, INC. The undersigned, Fu-Chieh Hsu and Wing Yu Leung, hereby certify that: 1. They are the duly elected and acting President and Secretary, respectively, of Monolithic System Technology, Inc., a California corporation. 2. The Articles of Incorporation of this corporation are amended and restated to read in full as follows: I. The name of this corporation is Monolithic System Technology,Inc. II. The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code. III. This corporation is authorized to issue two classes of stock, designated "Common Stock" and "Preferred Stock." The total number of shares which this corporation is authorized to issue is 8,700,000 shares. The number of shares of Common Stock which this corporation is authorized to issue is 6,100,000 shares. The number of shares of Preferred Stock which this Corporation is authorized to issue is 2,600,000 shares. The Preferred Stock may be issued from time to time in one or more series. Of the Preferred Stock, 500,000 shares shall be designated Series A Preferred Stock, 1,000,000 shares shall be designated Series B Preferred Stock and 1,100,000 shares shall be designated Series C Preferred Stock. The Board of Directors of this corporation is authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, and within the limitations or restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series, to determine the designation of any series, and to fix the number of shares of any series. The Series A Preferred Stock (the "Series A Preferred"), the Series B Preferred Stock (the "Series B Preferred") and the Series C Preferred Stock (the "Series C Preferred") shall have the rights, preferences, privileges and restrictions set forth below. Section 1. Dividend Rights of Preferred Stock. Subject to the rights of additional series of Preferred Stock which may be designated by the Board of Directors (the "Board") from time to time, the holder of each share of Series A Preferred, Series B Preferred and Series C Preferred shall be entitled to receive, prior and in preference to any declaration and payment of any dividend (payable other than in stock of the corporation) on the Common Stock, non-cumulative dividends at an annual rate equal to $0.10, $0.20 and $0.50 per share, respectively, when and as declared by the Board of Directors. Dividends, if paid, or if declared and set apart for payment, must be paid on, or declared and set apart for payment on, all series of Preferred Stock contemporaneously, and if less than full dividends are paid or declared and set apart for payment, the same percentage of the dividend rate will be paid on or declared and set apart for payment on each series of Preferred Stock. Section 2. Liquidation Preference. (a) Subject to the rights of additional series of Preferred Stock which may be designated by the Board from time to time, in the event of any liquidation, dissolution or winding up of the corporation, either voluntarily or involuntarily, the holders of the Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the corporation to the holders of the Common Stock, an amount per share equal to $1.00 plus any declared but unpaid dividends for each share of Series A Preferred then held by them, an amount per share equal to $2.00 plus any declared but unpaid dividends for each share of Series B Preferred then held by them and an amount per share equal to $5.00 plus any declared but unpaid dividends for each share of Series C Preferred then held by them. After payment to the holders of the Preferred Stock of the amounts set forth in this Section 2, the entire remaining assets and funds of the corporation legally available for distribution, if any, shall be distributed among the holders of the Common Stock in proportion to the shares of Common Stock then held by them. If, upon the occurrence of such event, the assets thus distributed among the holders of the Series A Preferred, Series B Preferred and Series C Preferred then held by them shall be insufficient to permit the payment to such holders of the full aforesaid preferential amount, then the entire assets and funds of the corporation legally available for distribution shall be distributed among the holders of the Preferred Stock in proportion to the aggregate preferential amounts owed the holders of the then outstanding shares of each series of Preferred Stock upon a liquidation, dissolution or winding up of the corporation; and no amount shall be paid or set apart for payment on any series of the Preferred Stock unless, at the same time, amounts in like proportion to the respective preferential amounts to which the other outstanding series of the Preferred Stock are entitled shall be paid or set apart for payment on the outstanding other series. (b) Upon the completion of the distribution required by subparagraph (a) of this Section 2, if assets remain in this corporation, the holders of Common Stock of this corporation, including Common Stock issued upon conversion of the Preferred Stock, shall share ratably in the distribution of all remaining assets of the corporation available for distribution. (c) (i) For purposes of this Section 2, a liquidation, dissolution or winding up of the corporation shall be deemed to be occasioned by and to include (A) the corporation's sale of all or substantially all of its assets or (B) any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) which will result in the holders of the outstanding voting equity securities of the corporation immediately prior to such transaction or series of related transactions holding securities representing less than 50% of the voting power of the surviving entity immediately following such transaction or series of related transactions. (ii) In any such events, if the consideration received by the corporation is other than cash or indebtedness, its value will be deemed to be its fair market value. In the case of publicly traded securities, fair market value shall mean the closing market price of such securities on the date such consolidation, merger or sale is consummated. If a consideration is in a form other than publicly traded securities, its value shall be determined by the Board. Section 3. Conversion. The holders of the Series A Preferred, Series B Preferred and Series C Preferred shall have conversion rights as follows (the "Conversion Rights"): (a) Right to Convert. Each share of Series A Preferred, each share of Series B Preferred and each shares of Series C Preferred shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the corporation or any transfer agent for the Preferred Stock, into such number of fully paid and nonassessable shares of Common Stock as is determined, in the case of the Series A Preferred, by dividing One Dollar ($1.00) by the Series A Conversion Price, in the case of the Series B Preferred, by dividing Two Dollars ($2.00) by the Series B Conversion Price, and, in the case of the Series C Preferred, by dividing Five Dollars ($5.00) by the Series C Conversion Price, determined as hereinafter provided, in effect at the time of conversion. The price at which shares of Common Stock shall be deliverable upon conversion of shares of Series A Preferred (the "Series A Conversion Price") shall initially be One Dollar ($1.00) per share of Common Stock, the price at which shares of Common Stock shall be deliverable upon conversion of shares of Series B Preferred (the "Series B Conversion Price") shall initially be Two Dollars ($2.00) per share of Common Stock and the price at which shares of Common Stock shall be deliverable upon conversion of shares of Series C Preferred (the "Series C Conversion Price") shall initially be Five Dollars ($5.00) per share of Common Stock. The term "Conversion Price" as used herein shall refer to the respective Conversion Price for each series of Preferred Stock as the context so requires. The initial Conversion Price shall be subject to adjustment as hereinafter provided. Upon conversion, all declared and unpaid dividends on the Preferred Stock shall be paid either in cash or in shares of Common Stock of the Corporation, at the election of the Company, wherein the shares of Common Stock shall be valued at the fair market value at the time of such conversion, as determined by the Board of Directors of the Corporation. (b) Automatic Conversion. Each share of Preferred Stock shall automatically be converted into shares of Common Stock at the then effective Conversion Price upon the closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Corporation to the public at a price per share (prior to underwriter commissions and offering expenses) of not less than $5.00 per share (appropriately adjusted for any recapitalization) and an aggregate offering price to the public of not less than $7,500,000. In the event of the automatic conversion of the Preferred Stock, the person(s) entitled to receive the Common Stock issuable upon such conversion of the Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities. (c) Mechanics of Conversion. No fractional shares of Common Stock shall be issued upon conversion of Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the then effective Conversion Price. Before any holder of Preferred Stock shall be entitled to convert the same into full shares of Common Stock and to receive certificates there for, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written notice to the Corporation at such office that he elects to convert the same; provided, however, that in the event of an automatic conversion pursuant to Section 3(b), the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Corporation or its transfer agent, and provided further that the Corporation shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such automatic conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection with such certificates. The Corporation shall, as soon as practicable after such delivery, or such agreement and indemnification in the case of a lost certificate, issue and deliver at such office to such holder of Preferred Stock, a certificate or certificates for the number of shares of Common Stock to which he shall be entitled as aforesaid and a check payable to the holder in the amount of any cash amounts payable as the result of a conversion into fractional shares of Common Stock. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Preferred Stock to be converted, or in the case of automatic conversion on the date of closing of the offering, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date. (d) Adjustments to Conversion Price for Diluting Issues. (i) Special Definitions. For purposes of this Section 3(d), the following definitions shall apply: (A) 'Options' shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire either Common Stock or Convertible Securities. (B) 'Original Issue Date' shall mean, for each series, the date on which a share of that series of the Preferred Stock was first issued. (C) 'Convertible Securities' shall mean any evidences of indebtedness, Preferred Stock, or other securities convertible into or exchangeable for Common Stock. (D) 'Additional Shares of Common' shall mean all shares of Common Stock issued (or, pursuant to Section 3(d)(iii), deemed to be issued) by the Corporation after the Original Issue Date, other than shares of Common Stock issued, issuable or, pursuant to Section 3(d)(iii), deemed to be issued: (a) upon conversion of shares of Preferred Stock; (b) to officers, directors or employees of, or consultants to, the Corporation pursuant to a stock grant, option plan or purchase plan or other employee stock incentive program or arrangement approved by the Board of Directors; (c) as a dividend or distribution on Preferred Stock; and (d) in connection with any transaction for which adjustment is made pursuant to Section 3(d)(vi) hereof. (ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a particular share of Preferred Stock shall be made in respect of the issuance of Additional Shares of Common unless the consideration per share for an Additional Share of Common issued or deemed to be issued by the Corporation is less than the Conversion Price in effect on the date of, and immediately prior to such issue, for such share of Preferred Stock. (iii) Options and Convertible Securities. In the event the Corporation at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date, provided that Additional Shares of Common shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 3(d)(v) hereof) of such Additional Shares of Common would be less than the Conversion Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common are deemed to be issued: (A) no further adjustment in the Conversion Price shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities, in each case, pursuant to their respective terms; (B) if such Options or Convertible Securities by their terms provide, with the passage of time or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the Conversion Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect such increase or decrease insofar as it affects such Options or the rights of conversion or exchange under such Convertible Securities; (C) upon the expiration of any such Options or any rights of conversion or exchange under such Convert ible Securities which shall not have been exercised, the Conversion Price computed upon the original issue thereof (or upon the occur rence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if: (a) in the case of Convertible Securities or Options for Common Stock, the only Additional Shares of Common issued were shares of Common Stock, if any, actually issued upon the exercise of such Options or the conversion or exchange of such Convertible Securities and the consideration received therefor was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration actually received by the Corporation upon such exercise, or for the issue of all such Convertible Securities which were actually converted or exchanged, plus the additional consideration, if any, actually received by the Corporation upon such conversion or exchange, and (b) in the case of Options for Convertible Securities, only the Convertible Securities, if any, actually issued upon the exercise thereof were issued at the time of issue of such Options, and the consideration received by the Corporation for the Additional Shares of Common deemed to have been then issued was the consideration actually received by the Corporation for the issue of all such Options, whether or not exercised, plus the consideration deemed to have been received by the Corporation upon the issue of the Convertible Securities with respect to which such Options were actually exercised; (D) no readjustment pursuant to clauses (B) or (C) above shall have the effect of increasing the Conversion Price to an amount which exceeds the lower of (i) the Conversion Price on the original adjustment date, or (ii) the Conversion Price that would have resulted from any issuance of Additional Shares of Common between the original adjustment date and such readjustment date; and (E) in the case of an Option which expires by its terms not more than 30 days after the date of issue thereof, no adjustment of the Conversion Price shall be made until the expiration or exercise of such Option, whereupon such adjust ment shall be made in the same manner provided in clause (C) above. (iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In the event this Corporation shall issue Additional Shares of Common (including Additional Shares of Common deemed to be issued pursuant to Section 3(d)(iii)) without consideration or for a consideration per share less than the Conversion Price in effect on the date of and immediately prior to such issue, then and in such event, such Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Conversion Price theretofore in effect by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of Common Stock which the aggregate consideration received by the Corporation for the total number of Additional Shares of Common so issued would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock outstanding immediately prior to such issue plus the number of such Additional Shares of Common so issued; provided further that, for the purposes of this Section 3(d)(iv), all shares of Common Stock issuable upon exercise, conversion or exchange of outstanding Options or Convertible Securities, as the case may be, shall be deemed to be outstanding, and immediately after any Additional Shares of Common are deemed issued pursuant to Section 3(d)(iii), such Additional Shares of Common shall be deemed to be outstanding. (v) Determination of Consideration. For purposes of this Section 3(d), the consideration received by the Corporation for the issue of any Additional Shares of Common shall be computed as follows: (A) Cash and Property. Such consideration shall: (a) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation excluding amounts paid or payable for accrued interest or accrued dividends; (b) insofar as it consists of property other than cash, be computed at the fair value thereof at the time of such issue, as determined in good faith by the Board; and (c) in the event Additional Shares of Common are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (a) and (b) above, as determined in good faith by the Board. (2) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common deemed to have been issued pursuant to Section 3(d)(iii), relating to Options and Convertible Securities, shall be determined by dividing (x) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities by (y) the maximum number of shares of Common Stock issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, as determined in Section 3(d)(iii) hereof. (vi) Adjustments for Subdivisions, Stock Dividends, Combinations or Consolidations of Common Stock. In the event the Corporation effects a subdivision or combination of its outstanding shares of Common Stock into a greater or smaller number of shares without a proportionate and corresponding subdivision or combination of its outstanding shares of Preferred Stock, then and in each such event the Conversion Price shall be increased or decreased proportionally. (vii) Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, any distribution payable in securities of the Corporation other than shares of Common Stock and other than as otherwise adjusted in this Section 3, then and in each such event provision shall be made so that the holders of Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation which they would have received had their shares of Preferred Stock been converted into Common Stock on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Sec tion 3 with respect to the rights of the holders of the Preferred Stock. (viii) Adjustments for Reclassification, Exchange and Substitution. If the Common Stock issuable upon conversion of the Preferred Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than in an event provided for in Section 3(d) above), the Conversion Price then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted such that the Preferred Stock shall be convertible into, in lieu of the number of shares of Common Stock which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common Stock that would have been subject to receipt by the holders upon conversion of the Preferred Stock immediately before that change. (e) No Impairment. The Corporation will not, by amend ment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 3 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Preferred Stock against impairment. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this Section 3, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjust ments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Stock. (g) Notices of Record Date. In the event of any taking by the corporation of the record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, the corporation shall mail to each holder of Preferred Stock, at least twenty (20) days prior to the date specified herein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution. (h) Reservation of Stock. The corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock solely for the purpose of effecting the conversion of the shares of the Preferred Stock such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all the then outstanding shares of the Preferred Stock, the corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. Any reserve of its authorized but unissued shares of Common Stock established by the corporation in accordance with this paragraph may not be diminished without the consent of the holders of a majority of the outstanding Preferred Stock. (i) No Reissuance of Series A, B or C Preferred. No share or shares of Series A Preferred, Series B Preferred or Series C Preferred acquired by the corporation by reason of purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares which the corporation shall be authorized to issue. (j) Notices. Any notice required by the provisions of this Section 3 to be given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his or her address appearing on the books of the corporation. Section 4. Voting Matters. Except as otherwise required by law, each share of Common Stock issued and outstanding shall have one vote. Each share of Preferred Stock issued and outstanding shall have the number of votes equal to the number of shares of Common Stock into which the Preferred Stock is convertible as adjusted from time to time pursuant to Section 3 hereof. The holder of each share of Preferred Stock shall be entitled to notice of any shareholders' meeting in accordance with the by-laws of the corporation and shall vote with the holders of the Common Stock and upon any matter submitted to a vote of shareholders, except those matters required by law to be submitted to a class vote (in which case, except as otherwise required by law, the Series A Preferred, Series B Preferred and Series C Preferred shall vote together as a class). Section 5. Residual Rights. All rights accruing to the outstanding shares of this corporation not expressly provided for to the contrary herein shall be vested in the Common Stock. Section 6. Consent for Certain Repurchases of Common Stock Deemed to be Distributions. Each holder of Preferred Stock shall be deemed to have consented, for purposes of Section 502, 503 and 506 of the California Corporations Code, to distributions made by the corporation in connection with the repurchase of shares of Common Stock issued to or held by employees or consultants upon termination of their employment or services or pursuant to agreements providing for the right of said repurchase between the corporation and such persons. IV Section 1. Limitation of Directors' Liability. The liability of the directors of this corporation for monetary damages shall be eliminated to the fullest extent permissible under California law. Section 2. Indemnification of Corporate Agents. This corporation is authorized to provide for, through bylaw provisions or through agreements with the agents, or both, the indemnification of agents (as defined in Section 317 of the California General Corporation Law) of the corporation in excess of that expressly permitted by said Section 317 for said agents to the fullest extent permissible under California law, subject to the limitations set forth in Section 204 of the California General Corporation Law with respect to actions for breach of duty to this corporation or its shareholders. Section 3. Repeal or Modification. Any repeal or modification of the foregoing provisions of this Article IV shall not adversely affect any right of indemnification or limitation of liability of an agent of this corporation relating to acts or omissions occurring prior to such repeal or modification." 3. The foregoing amendment and restatement has been duly approved by the Board of Directors of the corporation. 4. The foregoing amendment has been duly approved by the holders of the requisite number of shares of the corporation in accordance with Sections 902 and 903 of the California Corporations Code. The total number of outstanding shares of each class entitled to vote with respect to the foregoing amendment and restatement was 2,656,250 shares of Common Stock, 500,000 shares of the Series A Preferred Stock and 1,000,000 shares of the Series B Preferred Stock. The number of shares voting in favor of the foregoing amendment equaled or exceeded the vote required. The required vote was a majority of the outstanding shares of Common Stock and a majority of the outstanding shares of Series A and Series B Preferred Stock, voting together as a class. The undersigned further declare under penalty of perjury under the laws of the State of California that the matters set forth in this Certificate are true and correct of our own knowledge. Executed at Saratoga, California this _____ day of May, 1994. ----------------------- Fu-Chieh Hsu, President ----------------------- Wing Yu Leung, Secretary ADDENDUM TO REGISTRATION RIGHTS AGREEMENT, AS AMENDED THIS ADDENDUM (the "Addendum") to the Amended and Restated Registration Rights Agreement dated September 30, 1992, as amended (the "Registration Rights Agreement"), is entered into as of this 13th day of June, 1994, by and among Monolithic Systems Technology, Inc., a California corporation (the "Company") and the purchasers of Series C Preferred Stock of the Company (the "Purchasers"). All capitalized terms used in the Addendum shall have the same meanings set forth for them in the Registration Rights Agreement, unless otherwise defined in the Addendum. RECITALS WHEREAS, the Company has entered into a Series C Preferred Stock Purchase Agreement (the "Purchase Agreement") with the Purchasers, as set forth on the Schedule of Purchasers attached as Exhibit A to the Purchase Agreement, pursuant to which the Company shall sell and issue up to 1,100,000 shares of Series C Preferred Stock (the "Shares") to the Purchasers, WHEREAS, the Purchase Agreement provides for the grant of registration rights to the Purchasers on the same terms as the registration rights granted to the purchasers of Series A and Series B Preferred Stock of the Company (the "Preferred Holders") pursuant to the Registration Rights Agreement, WHEREAS, pursuant to Section 16 of the Registration Rights Agreement, the Company may grant registration rights to a prospective holder of securities of the Company on a pari passu basis with the rights of the Original Purchasers, and WHEREAS, the Company desires to amend the Agreement to include the Shares within the definition of "Registrable Securities" and to make the Purchasers a party to the Agreement by including each Series C Purchaser in the definition of "Holder", NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as follows: 1. Amendment. (a) The definition of "Holder" as set forth in Section 1 of the Registration Rights Agreement is hereby amended to include the Purchasers. (b) The definition of "Registrable Securities" as set forth in Section 1 of the Registration Rights Agreement is hereby amended to include the Shares. 2. Effectiveness. This Addendum in its entirety shall be effective upon its execution by the Company and the Purchasers. 3. Miscellaneous. (a) Governing Law. This Addendum shall be governed in all respects by the internal laws of the State of California. (b) Counterparts. This Addendum may be executed in one or more counterparts, each of which shall be deemed an original but all of which, together, shall constitute one and the same instrument. (c) Successors and Assigns. Except as otherwise pro vided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto. (d) Titles and Subtitles. The titles and subtitles used in this Addendum are for convenience only and are not to be considered in construing or interpreting this Addendum. The foregoing Addendum is hereby executed as of the date first above written. COMPANY MONOLITHIC SYSTEMS TECHNOLOGY, INC. a California Corporation By: ___________________________ Fu-Chieh Hsu, President PURCHASERS _______________________________ Print Name of Holder By: ___________________________ Title: ________________________ EX-10.15 5 DISTRIBUTOR AGREEMENT WITH WYLE DOMESTIC DISTRIBUTOR AGREEMENT between INTEGRATED DEVICE TECHNOLOGY, INC. and WYLE LABORATORIES, INC., ELECTRONIC MARKETING GROUP Made as of April 15, 1994, by and between INTEGRATED DEVICE TECHNOLOGY, INC., a Delaware Corporation having its principal place of business at 2975 Stender Way, Santa Clara, California 95054 ("IDT") and WYLE LABORATORIES, INC., ELECTRONIC MARKETING GROUP, a California corporation having its principal place of business at 15370 Barranca Parkway, Irvine, California 92173 ("Distributor"). The parties agree as follows: 1. DEFINITIONS. 1.1 Confidential Information: Information clearly marked as "Confidential" and identifying the owner on the face thereof. 1.2 Book Distributor Cost: Distributor's cost as published in the then current IDT distribution price list. 1.3 Cost: Unless otherwise defined, the price paid for the Product excluding taxes, duties, freight, insurance, handling or other fee charge. 1.4 Product: All items manufactured by IDT and included on IDT's price list in effect from time to time. "Product" and "IDT Product" have the same meaning. 1.5 Custom Product: Items manufactured by IDT which are not listed in the current IDT price list or are manufactured or altered to comply with a customer's specifications. 1.6 Territory: The geographic area and/or specific accounts described on Exhibit A, attached hereto, as modified from time to time by IDT by written notice to Distributor. 2. APPOINTMENT. 2.1 IDT appoints Distributor as a nonexclusive distributor of the Products in the Territory. 3. STAFF, EDI COMMUNICATIONS AND RECORDS. 3.1 Sales Organization: Distributor shall use its best efforts to promote the sale of IDT Products in the Territory during the term of this Agreement. Distributor shall maintain an active and well trained sales organization and shall participate from time to time in sales incentive programs sponsored by IDT. 3.2 EDI COMMUNICATIONS: Distributor and IDT shall establish a program for the exchange of purchase orders and acknowledgements electronically, and have executed an Electronic Data Interchange Trading Partner Agreement ("EDI Agreement") for this purpose. A copy of the EDI Agreement is attached hereto as Exhibit C and incorporated by this reference. To the extent that there are any inconsistencies between the terms and conditions of the EDI Agreement and this Agreement, this Agreement will control. 3.3 Records: Distributor shall keep current and accurate books and records, including inventory records, in accordance with generally accepted accounting principles in effect in the Territory. Such books and records shall include, with respect to inventories, the date of purchase and cost (net of freight, taxes, insurance, duties and credits) of each IDT Product in inventory. 3.4 Inspection: IDT may, at any time during the term hereof, on not less than 24 hours prior notice, inspect Distributors sales, finance, other records, physical inventories and count thereof at Distributor's facilities or in such other places as such records and inventories may be located. 4. ADVERTISING. 4.1 Promotion: Distributor shall advertise and promote the sale of IDT Products through all appropriate means, including tradeshow exhibits, catalogues and direct mailings, space advertising, educational meetings and sales aids. 4.2 Authority: Distributor shall submit to IDT all advertisements and promotions of IDT Products which utilize any IDT trademark, tradename or service mark for approval prior to publication. Distributor and IDT shall cooperate with each other to expedite the review of each such advertisement or promotion. 4.3 Consent: IDT consents to Distributor's use of IDT's trademarks, tradename, and service marks in connection with the authorized promotion of IDT Products. Distributor shall assign to IDT, upon request, any and all rights acquired by Distributor by reason of the use, registration, or association with any trademark, tradename or service mark of IDT. Distributor shall cooperate with IDT and shall execute such documents as may be reasonably required to perfect IDT's interest in such marks in the Territory. 4.4 Literature: Distributor shall maintain an adequate supply of IDT's Product literature. 4.5 Cooperative Advertising: IDT shall pay up to fifty percent (50%) of the cost of Distributor's advertising or other promotional programs provided: a. such advertisement or program has been approved by IDT in writing prior to publication or implementation; and b. the aggregate amount of all such payments made by IDT to Distributor does not exceed five-tenths of one percent (0.5%) of Distributor's net purchases of IDT Products during the prior 12 months. 5. ORDERS. 5.1 Distributor may submit offers to purchase Products from IDT for resale by submission of a written or electronic purchase order to IDT setting forth a description of the Product, the unit price, model code, total price and such other information as IDT may reasonably require. Distributor shall promptly confirm in writing all verbal offers submitted to IDT. IDT shall promptly accept or reject each offer. IDT may accept any offer by delivery of the Products or by a written acknowledgment setting forth the essential terms of the sale. 5.2 IDT shall have no obligation to accept any offer by Distributor to purchase Products from IDT which is consistent with the terms of this Agreement. In addition, IDT shall have no obligation to accept offers to purchase Products for resale via EDI which do not conform to the requirements set forth in Exhibit C. 6. TERMS AND CONDITIONS. 6.1 Except as modified by this Agreement, all sales of Products shall be subject to IDT's standard terms and conditions of sale in effect at the time of acceptance of Distributor's offer. A copy of IDT's current terms and conditions is attached hereto as Exhibit B and incorporated by this reference. 6.2 In addition to the terms and conditions of this Agreement, IDT may from time to time publish Distributor Policies and Procedures. IDT will provide Distributor with thirty days written notice before the implementation or modification of any Distributor Policies and Procedures. IDT will not be obligated to undertake any action or make any sale that is inconsistent with previously published Distributor Policies and Procedures. To the extent that there are any inconsistencies between the Distributor Policies and Procedure and this Agreement, this Agreement will control. 6.3 The relationship between the parties is that of independent contractors. In no event shall either party undertake any obligation on behalf of the other party nor act as an Agent of the other party without obtaining prior written consent. 7. CUSTOM PRODUCTS. 7.1 In additions to the other terms and conditions set forth in this Agreement, all sales of Custom Products to Distributor shall be subject to the following additional restrictions: a. Distributor shall be liable for 100% of the order within ninety (90) days prior to the scheduled shipping date. b. There shall be no returns for these products other than warranty returns as defined in Exhibit B, item 4. 8. SINGLE SOURCE. Distributor shall not, without IDT's prior written consent, purchase Products from any other person, including without limitation, another authorized IDT distributor. 9. PRICE. 9.1 The purchase price of Products shall be IDT's price in effect at the time of shipment by IDT of Distributor's order, or such other price as may be agreed to in writing. 9.2 The purchase price of Products is FOB origin. Distributor shall pay all costs of delivery, taxes, duties, freight, insurance and handling. 9.3 In the event IDT shall reduce the published purchase price for any Product in Distributor's inventory, for which Distributor paid Book Distributor Cost, Distributor may apply to IDT for credit in an amount equal to the quantity of such Product in Distributor's inventory on the effective date of the price reduction, multiplied by the amount of the price reduction. IDT shall calculate the amount of the price reduction by comparing the new Book Distributor Cost with the immediately preceding Book Distributor Cost. Any such credit may only be applied to purchase Products from IDT hereunder. 10. PAYMENT TERMS. 10.1 Terms of payment include a two percent (2%) discount if the balance due is paid in full within ten (10) days of issuance of the invoice, and the net balance is due thirty (30) days after issuance of the invoice. Invoices shall be dated the date of shipment (delivery FOB origin). Distributor shall make all payments to IDT in U.S. Dollars. 10.2 Notwithstanding the foregoing, IDT may at any time amend or revoke the amount or duration of credit allowed to Distributor,including requiring full or partial payment in advance of,or after, shipment. 11. INVENTORY. 11.1 Adjustments: Distributor may, by written notice to IDT and compliance with such reasonable procedures as IDT may from time to time establish, exchange a portion of Distributor's slow moving Products,purchased at Distributor's Book Cost, in Distributor's inventory for other Products of Distributor's choice, provided, however, that the purchase price of such slow moving Products shall not exceed an amount equal to five percent (5%) of IDT's current Book Distributor Cost for all Products purchased from IDT at Book Distributor Cost during the prior six (6) months. Distributor shall not exercise this right more frequently than twice in any calendar year. In no event shall Distributor have any right to return Products for cash or credit. IDT shall have no obligation to accept the return of any Products hereunder unless the returned Products are new and unused, in original packing, free of damage, and pass inspection upon receipt by IDT. 11.2 Discontinued Products: IDT shall notify Distributor thirty (30) days in advance in the event IDT shall elect to discontinue the sale of any Product. Distributor may return to IDT, in unopened shipping tubes and in multiples of the Factory Order Increments, all or any portion of such discontinued Product in Distributor's inventory provided Distributor complies, within thirty (30) days of the date of receipt of such notice, with the procedures set forth therein. Distributor may only return, and IDT shall only be obligated to accept, Discontinued Product which was purchased at Book Distributor Cost, was properly accounted for in Distributor's reports to IDT and is new, unused and free of damage or defect may be returned hereunder. IDT shall value the Discontinued Product at the lesser of either the Book Distributor Cost or original purchase price. New Product shall be valued at the purchase price in effect at the time of receipt of the Discontinued Product. 11.3 Recall: IDT may purchase any Product in Distributor's inventory at Distributor's cost. 11.4 On Termination: Upon termination of this Agreement, Distributor may apply to IDT for the purchase by IDT of such portion of Distributor's inventory of Products as was purchased at Book Distributor Cost and which meets the following additional requirements: a. such Product was properly accounted for during the term of the Agreement, b. such Product is new, unused and free of damage or defect in unopened tubes and in multiples of the Factory Order Increment, and c. such Product is current Product listed on IDT's most current price list for which no notice of discontinuation has been issued. IDT shall have no obligation hereunder unless and until such application is accepted in writing by IDT. All Product returned hereunder shall be subject to inspection and test by IDT. In the event IDT elects to purchase any portion of Distributor's inventory, such inventory must be delivered to IDT not more than thirty (30) days from the effective date of termination of this Agreement. 11.5 If this Agreement is terminated for convenience by IDT and IDT elects to purchase Distributor's Inventory, then the purchase price for the Product returned shall be the lesser of either the current Book Distributor Cost or the actual price paid. If this Agreement is terminated by IDT for cause or by Distributor, and IDT elects to purchase Distributor's Inventory, then the purchase price of Product returned shall be Distributor's cost less fifteen percent (15%). 12. TERM AND TERMINATION. 12.1 Term: The term of this Agreement shall commence on the date of this Agreement and terminate on March 31, 1995. Upon thirty (30) days written notice, either party may request renewal of the Agreement for an additional year. Paragraphs 11, 13, 14, 18, and 22 shall survive the termination of this Agreement. 12.2 Termination for Convenience: Either party may terminate this Agreement on thirty days prior written notice. In the event IDT shall elect to terminate this Agreement for convenience, Distributor shall promptly, and in no event more than thirty (30) days, notify IDT whether and to what extent it desires to cancel or otherwise amend any orders for Product then outstanding. IDT shall have no obligation to deliver any Product to Distributor after the termination date if the termination of Distributor was either at Distributor's election or due to the insolvency of Distributor, provided, however, that IDT will deliver such Product to Distributor as Distributor is obligated by contract to deliver to third persons within 90 days of the termination date. IDT may condition the delivery of any Product on adequate assurances of payment, including, without limitation, cash in advance or the posting of an irrevocable letter of credit in the full amount of the purchase price and any indebtedness then outstanding. 12.3 Termination for Cause: Either party may terminate this Agreement on written notice in the event of the insolvency or a material breach by the other. In the case of material breach, the defaulting party shall have thirty (30) days to cure the breach. If the defaulting party provides the other party with written confirmation that the material breach has been cured within the thirty days period, then the Agreement shall continue to be in effect and to govern the relationship of the parties. 13. CONFIDENTIALITY. 13.1 Neither party shall disclose Confidential Information to any third party without the prior written consent of the disclosing party. 13.2 A party receiving Confidential Information shall use such information solely for purposes consistent with the distribution of the Products hereunder and for no other purpose. 13.3 Neither party shall be under any obligation with respect to Confidential Information which is available to the general public through no fault of such party, was known by such party prior to disclosure, was disclosed to a third party without breach of this Agreement, or was independently developed without use of the Confidential Information. All information of a business or technical nature imparted to or learned by Distributor during the term of this Agreement with respect to the business of IDT, including customer names and information, shall be deemed to be confidential and shall be used by Distributor only in connection with the distribution and sale of the Products and shall not be disclosed by Distributor to anyone outside the employ of distributor without IDT's written authorization. 14. ASSIGNMENT. 14.1 Distributor shall not, by operation of law or otherwise assign this Agreement or any right accruing to it hereunder without the prior written consent of IDT. Except for the assignment of accounts receivable for collection, IDT shall not, by operation of law or otherwise assign this Agreement or any right accruing to it hereunder without the prior written consent of Distributor. 14.2 Either party may assign this Agreement to any company a majority of whose shares outstanding entitled to vote for directors is held by the assigning company or by a wholly owned subsidiary of the assigning company. 15. NOTICES. Any notice given hereunder shall be in writing, in the English language, and shall be effective upon delivery to a party at the address set forth herein or at such other address as may be designated in writing from time to time by a party hereto. 16. COMMERCIAL PAYMENTS Both parties agree that they will not, in connection with this Agreement, directly or indirectly offer, pay, or authorize payment of any monies or things of value to any government official for the purpose of influencing any act or decision of such official in order to assist IDT or Distributor in obtaining business. 17. GOVERNING LAW, JURISDICTION. 17.1 This Agreement is made in and shall be construed in accordance with the laws of the State of California, U.S.A. 17.2 The parties hereto consent to the jurisdiction of all federal and state courts in California, U.S.A. Any action concerning this Agreement shall be brought in the United States District Court for the Northern District of California in San Jose, California or the Santa Clara County Superior or Municipal Court. 18. WAIVER, AMENDMENT. No waiver, amendment, or modification of any provision of this Agreement shall be effective unless in writing and signed by the party against whom such waiver, amendment, or modification is sought to be enforced. No failure or delay by either party in exercising any right, power, or remedy, except as expressly provided herein, shall operate as a waiver of any such right, power, or remedy. 19. SEVERABILITY. If any provision of this Agreement shall be held invalid, the remaining provisions of this Agreement shall remain in full force and effect. 20. ENTIRE AGREEMENT This Agreement and the Exhibits hereto constitute the entire Agreement between the parties concerning the subject matter hereof. 21. LIMITATION OF LIABILITY. 21.1 IN NO EVENT SHALL IDT BE LIABLE TO DISTRIBUTOR FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR INDIRECT DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS, EVEN IF IDT HAS HAD NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 21.2 IDT agrees to provide Distributor with a certificate of insurance on any and all product liability insurance policies it may have in effect from time to time with respect to the Products. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. Integrated Device Technology, Inc. Wyle Laboratories, Inc. Electronic Marketing Group By: _______________________ By: _______________________ Title: ______________________ Title: ______________________ EXHIBIT A To Distributor Agreement between IDT and Wyle Laboratories, Inc., Electronic Marketing Group. The date of this Exhibit A is April 15, 1994. 1. TERRITORY: The Territory shall be California, Oregon, Washington, Idaho, Nevada, Arizona, New Mexico, Utah, Colorado, Wyoming, Montana. Exhibit B INTEGRATED DEVICE TECHNOLOGY, INC. TERMS AND CONDITIONS OF SALE 1. Offer and Acceptance. These terms and conditions shall apply to all contracts between Buyer and Integrated Device Technology, Inc. ("Seller"). Any purchase order or other document which purportedly modifies, supersedes or otherwise alters these terms and conditions shall be of no force or effect whatsoever. 2. Price and Payment. Prices are in U.S. dollars. Transportation and all sales, property, excise, duties, and other federal, state and local taxes (other than those based on IDT's net income) shall be paid by Buyer. All invoices are payable within thirty (30) days of date of invoice, provided, however, IDT may require full or partial payment in advance of delivery. There is no discount for payment within such period. 3. Delivery. Delivery shall be FOB origin. Neither party shall not be liable for any loss, expense, or damage caused by delays or failures in performance resulting from acts of God, or other cause beyond its reasonable control. 4. Limited Warranty. IDT warrants that all products, when delivered, shall conform to IDT's specifications and be free of defects in manufacture and workmanship. Buyer is authorized to pass this warranty through to Buyer's customers and to end users. The warranty period as stated in Exhibit B shall begin to run with respect to any end user upon delivery of the product to the end user. Provided Buyer or its customer notifies IDT in writing within 90 days of the date of delivery of printed circuit modules or boards, or within one year of the date of delivery of integrated circuits or ceramic modules, to a common carrier at the point of origin of such defective or nonconforming product, and promptly returns such product to IDT in accordance with IDT's instructions, freight prepaid, IDT shall, at IDT's option and expense, either repair, replace, or refund the purchase price of any nonconforming or defective product. IDT shall have no obligation with respect to any damage arising from misuse, neglect, tampering, unauthorized or improper use or installation, disassembly, repair, alteration, or accident. Notwithstanding the foregoing, if any product is designated developmental or experimental, such product shall be purchased "as is, with all faults" and the remedy granted above shall be of no force or effect whatsoever. IDT DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE STATUTORY WARRANTY OF TITLE, THERE ARE NO OTHER EXPRESS OR IMPLIED WARRANTIES. 5. Patent Indemnity. IDT shall defend, at its expense, any action brought against Buyer or its customers which alleges that an IDT product infringes a Unites States patent, United States mask work right, or United States copyright, provided that Buyer promptly notifies IDT in writing of any claim, gives IDT sole control of the defense and settlement thereof, and provides all reasonable assistance in connection therewith. If any product is finally adjudged to so infringe, IDT shall, at its option, (a) procure for Buyer the right to continue using the product; (b) modify or replace the product so there is no infringement; or (c) refund the purchase price paid upon return of the product. IDT shall have no liability regarding any claim arising out of the use of the product in combination with other goods if the infringement would not occur but for such combination. Buyer shall defend, indemnify, and hold IDT harmless from any and all expense, damage, cost or losses resulting from any suit or proceeding brought for infringement of patents, maskworks, copyrights, or trademarks arising from compliance with Buyer's design, specifications or instructions. 6. Limitation of Liability. THE REMEDIES SET FORTH ABOVE CONSTITUTE THE EXCLUSIVE REMEDY OF BUYER WHETHER ARISING IN CONTRACT, TORT, OR OTHER LEGAL THEORY. IN NO EVENT SHALL IDT BE LIABLE TO BUYER FOR INJURY OR DAMAGE TO ANY PERSON OR PROPERTY NOR FOR LOSS OF PROFITS, EXCESS COSTS, OR INCIDENTAL, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES EVEN IF IDT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IDT'S LIABILITY HEREUNDER SHALL NOT EXCEED THE PURCHASE PRICE PAID BY BUYER FOR THE PRODUCT. THIS LIMITATION OF DAMAGES SHALL NOT BE AFFECTED BY ANY FAILURE OF BUYER'S REMEDIES UNDER THE EXPRESS WARRANTY SET FORTH ABOVE. 7. Rights in Data. Technical information and software, if any, are subject to the U.S. Government's Restricted Rights Legend, and use, duplication, or disclosure by the Government is subject to restrictions set forth in subparagraph (c)(1) (ii) of the Rights in Technical Data and Computer Software clause at 52.227-7013 of the Department of Defense Federal Acquisition Regulations. All software is copyrighted. All maskwork is registered. Buyer shall not copy, reverse engineer or decompile or disassemble any product or software without IDT's express written consent. 8. Export Controls. Buyer shall not, without the prior written approval, if required, of the Office of Export Administration of the U.S. Department of Commerce, Washington D.C. 20230, transmit, or directly or indirectly, any product to Afghanistan, Namibia, The Republic of South Africa, the People's Republic of China or to any Group Q, S, W, Y or Z country specified in Supplement No. 1 to section 370 of the Department of Commerce Export Administration Regulations. 9. Choice of Law. This Agreement is made in and shall be construed in accordance with the laws of the state of California. 10. Entire Agreement. This Agreement sets forth the entire agreement of the parties with respect to the subject matter hereof. This Agreement may only be modified by a written instrument signed by each party hereto. 11. Waiver. No waiver of any right or default hereunder shall constitute a waiver of the right or default in any subsequent exercise thereof. 12. Severability. If any provision of these terms and conditions shall be ruled unenforceable, then the remainder shall be enforced to the extent permissible. Exhibit C INTEGRATED DEVICE TECHNOLOGY INC. EDI TRADING PARTNER AGREEMENT (Rev. 3/94 -- No Software) This Agreement is made by and between Integrated Device Technology, Inc. ("IDT") with a principle place of business at 2975 Stender Way, Santa Clara, California 95054 and the EDI Participant listed and signing this Agreement on the attached page. In consideration of the mutual covenants of the Electronic Data Interchange (EDI) relationship, the parties agree as follows: 1. PURPOSE. IDT and EDI Participant agree, under terms and conditions set forth herein, to establish a system whereby communication and/or transactions between IDT and EDI Participant can be accomplished through electronics means, rather than writing on a paper. 2. EDI OPERATIONS. Technical and operational details necessary to implement the EDI relationship contemplated herein, such as defining transaction standards and sets, the time frame for implementation of EDI communications and the selection of third party networks, shall be mutually agreed upon and followed by the parties in good faith using reasonable efforts. Appendix A sets forth the specific categories of transaction to be communicated electronically ("Transaction Sets") and the control parameters for those Transaction Sets. The communication of any transaction set other than those provided for in Exhibit A shall have no force or effect between parties. 3. GENERAL TERMS AND CONDITIONS FOR PURCHASES AND SALES. This Agreement does not express or imply any commitment to purchase or sell goods or services. The terms and conditions of the Domestic Distributor Agreement between the parties will control in all EDI transactions between the parties. 4. EDI TRANSACTIONS ENFORCEABILITY. EDI Participants agree that all rights, duties, and obligations which would accrue upon receipt to data in the form of paper documentation shall be accrue upon receipt of the data in electronic form via EDI. Further, they agree: (1) that neither party shall contest the admissibility of paper documentation copies of electronically transmitted data under the business records exception to the hearsay rule, or the best evidence rule, or the Statute of Frauds, on the basis that the data were not originated or maintained in documentary form, or that the data do not constitute a signed writing by a party intending to be bound thereby; (2) that company identifiers such as DUNS numbers in data transmission fields of network access identification codes shall constitute prima facie evidence of which EDI participant sent a transmission; and (3) that copies of the transmitted and received data, mechanically or electronically stored by either party shall constitute evidence of the intended contents of the orders, acknowledgement, transactions, and other information covered by this Agreement, if they are machine readable and capable of reproduction into printed human readable form of paper. Each party is obligated to retain records as prescribed by law or common business practice. 5. THIRD PARTY PUBLIC DATA NETWORK (PDN) USE. Unless otherwise agreed, each party is responsible for establishing its own agreements with third party networks. Unless otherwise agreed, connect time and any other charges of the third party network shall be paid for by the party initiating each communication. Either party may change their third party network at any time for convenience without liability therefor, upon thirty (30) days prior written notice to the other party at the address on the attached page hereof. However, such termination shall not relieve either party of any contractual obligations incurred prior to termination. The third party providers of the parties are: IDT's Third Party Provider EDI Participant's Third Party Provider Harbinger EDI Service 1800 Century Plaza, Ste. 340 -------------------------------------- Atlanta, GA 30345 -------------------------------------- 6. TRANSMISSION REQUIREMENT. Each party shall have in place reasonable controls to ensure timely handling of EDI transmissions and to promptly contact the sending agent for corrective action in the event of a transmission error, such as an unintelligible or garbled transmission. Exhibit A contains specific Transmission Requirements to be followed by both parties. In addition, the following general criteria shall apply: a. PROPER RECEIPT. Transmissions shall not be deemed to have been properly received, and no transmission shall give rise to any obligation, until accessible to the receiving party at such party's receipt computer. b. VERIFICATION. Upon proper receipt of any transmission, the receiving party shall promptly and properly transmit a functional acknowledgement in return for all transmissions. A functional acknowledgement shall constitute conclusive evidence a transmission has been properly received. If a document is in error or partial received, the functional acknowledgement is to notify of rejection of transmission of the select document. c. ACCEPTANCE. Acceptance of an EDI transmission which has been properly received shall not give rise to any obligation unless and until the party initially transmitting such document has properly received in return an acceptance document without change (as specified in Appendix A). Any acceptance transmission with changes will be considered a counter offer by IDT and IDT will require another issue of offer until the offer from IDT is accepted without changes by supplier. 7. SECURITY DUTIES. Each party is solely responsible for the selection, implementation, and maintenance of appropriate security products, tools, tests and procedures sufficient to meet its requirements for protecting its programs and data from improper access, loss, alteration, or destruction. Each party agrees to treat as proprietary and not to provide or otherwise make available the whole or any portion of the other party's network procedures, passwords, or computer telephone numbers to any person other than to EDI Participant's employees who need to know, without written consent from the other party. Each party agrees that its access to the other party's network, if any, will be limited and agrees not to try and exceed the scope of authorized access. If the scope is exceeded by a party, it will promptly notify the other party. Each party agrees that it will take appropriate actions by instructions, agreement, or otherwise with its employees who are permitted access to the aforementioned items to notify them of that party's and their individual obligations under this Agreement. Each party agrees that any other network procedure information and data transmitted to the other party shall not be considered as proprietary information unless a separate nondisclosure agreement or clause covering said information in the then-current general terms and conditions is in place between the parties. 8. TERM AND TERMINATION. The term of this Agreement shall begin on the date of acceptance by IDT and continue for the duration of the Domestic Distributor Agreement between the parties. Either party may terminate this EDI Agreement at any time for conveniences without liability therefore, upon ten (10) days prior written notice to the other party at the address on the attached page hereof. However, such termination shall not relieve either party of any contractual obligations incurred prior to termination. 9. WARRANTY. IDT GRANTS NO CONDITIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, FOR THE EDI SERVICES PROVIDED, INCLUDING ALL IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 10. REMEDIES AND DAMAGE LIMITATION. NEITHER PARTY SHALL BE LIABLE FOR ANY LOSS OF PROFITS, LOSS OF USE, LOSS OF INFORMATION, INTERRUPTION OF BUSINESS, OR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT WHETHER ALLEGED AS A BREACH OF CONTRACT OR TORTUOUS CONDUCT, EVEN IF THE PARTIES ARE ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 11. LIMITATION OF ACTIONS. All legal actions, however asserted, shall be commenced within one year from the date the cause of action arises. 12. FORCE MAJEURE. Neither party shall be liable for any failure to perform its obligations hereunder where such failure results from any act of God or other cause beyond such party's reasonable control, including without limitation, any mechanical, electronic or communications failure which prevents electronic transmission or receipt of data. 13. APPLICABLE LAW. The validity, performance and construction of this Agreement will be governed by the laws of the State of California, U.S.A. 13. ASSIGNMENTS. This Agreement shall not be assigned or transferred by either party without securing the prior written consent of the other party. 15. RELEASE OF INFORMATION. Neither party shall, without securing the prior written consent of the other party, publicly announce the existence of this Agreement, any EDI transactions or IDT network access, of advertise or release any publicity in regard thereto. This provision shall survive expiration of termination of this Agreement. 16. TECHNICAL CONTACTS. Each party shall designate a primary technical contact to coordinate the establishment and operation of EDI communication. Those individuals are: Company EDI Contact Name, Address and Phone IDT EDI Contact Name, Address and Phone Peggy Connors, 2975 Stender Way, Santa Clara, CA 95054 (408) 492-8640 EDI Participant: IDT: Name: Name: Signature: Signature: Title: Title: Date: Date: IDT EDI TRADING PARTNER AGREEMENT - EXHIBIT A 1.0 Transaction Sets. All Transactions Sets contemplated by this Agreement shall be transmitted and formatted in accordance with the American National Standard Institute Business Data Interchange (ANSI X12 ) Standard, as reflected in the number, version and date column set forth below beside each Transaction Set. This also includes the data dictionary, segment dictionary, and transmission controls published as X12 standards. 1.1 Transaction Sets to be transmitted by IDT to Provider. Communication Number X12 Version Purchase Order Acknowledgement 855 002002 Change Order Acknowledgement 865 002002 Functional Acknowledgement 997 002002 1.2 Transaction Sets to be transmitted from Provider to IDT Communication Number X12 Version Purchase Order 850 002002 Change Order 860 002002 Functional Acknowledgement 997 002002 2.0 Transmission Requirements. For each Transaction Set, the Header Control Number Data Element must have an identical corresponding value in the Trailer Control Number Data Element for all control Segments as follows: 2.1 The value for the Interchange Control Number contained in Data Element ISA13 for a transmission must equal the value for Data Element IEAO2 that is contained in the transmission. 2.2 The value for the Data Interchange Control Number contained in Data Element GS06 must equal the value for Data Element GE02 that is contained in that Functional Group. 2.3 The value for the Transaction Set Control Number contained in Data Element ST02 for a Transaction Set must equal the value for Data Element SE02 contained in that Transaction Set. 3.0 Additional Requirements In addition, all Transactions Sets contemplated by this Agreement shall meet the following requirements: 3.1. The actual quantity of Functional Groups received within the transmission must equal the quantity the trading partner has identified as being included, as contained in the IEA01 Data Element; 3.2. The actual quantity of Transaction Sets received with the transmission must equal the quantity the trading partner has identified as being included, as contained in the GE01 Data Element; 3.3. The actual quantity of Segments included within each Transaction Set must equal the quantity the trading partner has identified as being included, as contained in the SE01 field; 3.4 The actual quantity of Line Items included within each Transaction Set must equal the quantity the trading partner has identified as being included, as contained in the CTT01 field; and 3.5 The Hash Totals contained in the CTT02 field must equal the sum of values as defined in each Transaction Set. EX-10.16 6 SALINAS LEASE EXTENSION LEASE EXTENSION AND MODIFICATION AGREEMENT This Lease Extension and Modification Agreement is made and entered into as of September 1, 1994, by and between Baccarat Silicon, Inc., ("Baccarat"), a California corporation,and Integrated Device Technology, Inc. ("IDT"), a Delaware corporation. RECITALS A. By lease dated June 28, 1985 (the "Lease"), Carl E. Berg & Clyde J. Berg , dba Berg & Berg Developers, dba Berg & Berg Industrial Developers, ("Berg") leased to IDT the property at 1566 Moffett Street, Salinas, California (the "Premises"). B. Berg and IDT entered into an Addendum to Lease dated September, 1985. C. Berg assigned all of its right, title, and interest in and to the Premises and the Lease to Baccarat Silicon, Inc. ("Baccarat"). D. IDT and Baccarat desire to modify the terms of the Lease and to extend the term of the Lease to June 30, 2005. The parties agree as follows: 1. Term. The term of the Lease is extended until June 30, 2005. 2. Rent. IDT shall pay to Baccarat as rent for the Premises during the extended Lease term, a monthly rent payable in advance on the first day of each calendar month as follows: July 1, 1995 - December 31, 1997 $73,900 January 1, 1998 - June 30, 2000 $76,500 July 1, 2000 - December 31, 2002 $78,000 January 1, 2003 - June 30, 2005 $80,500 3. First Right of Offer. The first paragraph of Paragraph 33 of the Addendum to Lease is deleted and replaced as follows: "Prior to Baccarat making any offer to sell the Premises or any part thereof, Baccarat shall give IDT written notice of such offer which shall include the price and terms of sale and a statement that Baccarat is willing to sell at that price and on those terms of sale. IDT shall have the option, which must be exercised by written notice within thirty (30) days from the date of Baccarat's notice, to agree to purchase the Premises at the price and on the terms specified in the notice from Baccarat to IDT. If IDT fails to exercise its option within the 30 day period, Baccarat shall have 180 days from the date of Baccarat's notice to sell at the price and upon the terms of sale specified in the notice to IDT. "If, within 180 days of Baccarat's notice to IDT, Baccarat wants to sell the Premises to a third party on terms more favorable to the third party than the terms set forth in Baccarat's notice to IDT, then Baccarat must first re-offer the Premises to IDT on the same terms and conditions offered to the third party ("Baccarat's Second Notice"). IDT shall have five (5) business days from IDT's receipt of Baccarat's Second Notice to elect to buy the Premises. If IDT does not accept all terms and conditions in writing within said five days, then Baccarat may sell the Premises to the third party on terms and conditions not more favorable than those set forth on Baccarat's Second Notice." 4. Options to Extend. Paragraph 34 of the Addendum to Lease is deleted in its entirety and replaced as follows: "IDT shall have two options to extend the term of this Lease for consecutive terms of five (5) years each, commencing on July 1, 2005, and July 1, 2010, respectively. Each option shall be exercisable by written notice to Baccarat at least 180 days prior to the expiration of this Lease or applicable extension hereof. 5. Option Term Rental. The last sentence of the first paragraph of Paragraph 35 of the Lease shall read, "In no event shall the fair market rent be less than $73,900 for the option periods specified herein." 6. Purchase Option. Baccarat grants to IDT an option to purchase the Premises. Such option shall be exercisable by delivery not earlier than July 1, 2000 nor later than January 1, 2001 to Baccarat of a written notice of purchase. The purchase price shall be $8,509,090. The purchase of the Premises shall be consummated as a tax free exchange of IDT stock and Baccarat stock according to terms and conditions acceptable to Baccarat and IDT. 7. Ratification of Lease. Except as modified herein, the Lease as modified by the Addendum to Lease, is hereby ratified, approved and confirmed. IN WITNESS WHEREOF, the parties have signed this Lease Extension and Modification Agreement. BACCARAT SILICON, INC., INTEGRATED DEVICE TECHNOLOGY, INC. By: _____________________ By:________________________ Carl E. Berg Leonard C. Perham Title: President Title: Chief Executive Officer Date:_______________________ Date:______________________ EX-10.17 7 1994 STOCK OPTION PLAN INTEGRATED DEVICE TECHNOLOGY, INC. 1994 STOCK OPTION PLAN As Adopted May 3, 1994 1. PURPOSE. The purpose of the Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, its Parent, Subsidiaries and Affiliates, by offering them an opportunity to participate in the Company's future performance through awards of stock options. Capitalized terms not defined in the text are defined in Section 19. 2. SHARES SUBJECT TO THE PLAN. 2.1 Number of Shares Available. Subject to Sections 2.2 and 14, the total number of Shares reserved and available for grant and issuance pursuant to Awards under the Plan shall be One Million Six Hundred Twenty-Five Thousand (1,625,000) Shares. Shares issuable upon exercise of stock options granted pursuant to the Company's 1985 Incentive and Nonqualified Stock Option Plan (the "Prior Plan") that expire or become unexercisable for any reason without having been exercised in full, shall no longer be available for exercise under the Prior Plan, but shall be available for distribution under this Plan (not to exceed Five Million (5,000,000) Shares). Subject to Sections 2.2 and 14, Shares shall again be available for grant and issuance in connection with future Awards under the Plan if such Shares cease to be subject to an Award. 2.2 Adjustment of Shares. In the event that the number of outstanding Shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, or by a Corporate Transaction (as defined in Section 14.1) then, unless such change results in the termination of all outstanding Awards as a result of the Corporate Transaction, (a) the number of Shares reserved for issuance under the Plan and (b) the Exercise Prices of and number of Shares subject to outstanding Awards shall be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share shall not be issued but shall either be paid in cash at Fair Market Value or shall be rounded up to the nearest Share, as determined by the Committee; and provided, further, that the Exercise Price of any Award may not be decreased to below the par value of the Shares. 3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in Section 5 below) may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any Parent, Subsidiary or Affiliate of the Company; provided such consultants, contractors and advisors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person may be granted more than one Award under the Plan. Each person is eligible to receive up to an aggregate maximum of One Million (1,000,000) Shares per fiscal year. 4. ADMINISTRATION. 4.1 Committee Authority. The Plan shall be administered by the Committee. Subject to the general purposes, terms and conditions of the Plan, the Committee shall have full power to implement and carry out the Plan. The Committee shall have the authority to: (a) construe and interpret the Plan, any Stock Option Agreement and any other agreement or document executed pursuant to the Plan; (b) prescribe, amend and rescind rules and regulations relating to the Plan; (c) select persons to receive Awards; (d) determine the form and terms of Awards; (e) determine the number of Shares subject to Awards; (f) determine whether Awards will be granted in replacement of, or as alternatives to, other Awards under the Plan or any other incentive or compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company; (g) grant waivers of Plan or Award conditions; (h) determine the vesting and exercisability of Awards; (i) correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any Award or any Stock Option Agreement; (j) determine the disposition of Awards in the event of a Participant's divorce or dissolution of marriage; and (k) make all other determinations necessary or advisable for the administration of the Plan. 4.2 Committee Discretion. Any determination made by the Committee with respect to any Award shall be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of the Plan or Award, at any later time, and such determination shall be final and binding on the Company and all persons having an interest in any Award under the Plan. The Committee may delegate to one or more officers of the Company the authority to grant an Award under the Plan to Participants who are not Insiders of the Company. 4.3 Exchange Act Requirements. If two or more members of the Board are Outside Directors, the Committee shall be comprised of at least two members of the Board, all of whom are Outside Directors and Disinterested Persons. The Company will take appropriate steps to comply with the disinterested director requirements of Section 16(b) of the Exchange Act, including but not limited to, the appointment by the Board of a Committee consisting of not less than two persons (who are members of the Board), each of whom is a Disinterested Person. It is the intent of the Company that the Plan and Awards hereunder satisfy and be interpreted in a manner, that, in the case of Participants who are or may be Insiders, satisfies the applicable requirements of Rule 16b-3 (or its successor) of the Exchange Act. If any provision of the Plan or of any Award would otherwise conflict with the intent expressed in this Section 4.3, that provision to the extent possible shall be interpreted and deemed amended so as to avoid such conflict. 5. STOCK OPTIONS. The Committee may grant Awards to eligible persons and shall determine whether such Awards shall be Incentive Stock Options within the meaning of the Code ("ISOs") or Nonqualified Stock Options ("NQSOs"), the number of Shares subject to the Award, the Exercise Price of the Award, the period during which the Award may be exercised, and all other terms and conditions of the Award, subject to the following: 5.1 Form of Option Grant. Each Award granted under the Plan shall be evidenced by an Stock Option Agreement which shall expressly identify the Award as an ISO or NQSO, and be in such form and contain such provisions (which need not be the same for each Participant) as the Committee shall from time to time approve, and which shall comply with and be subject to the terms and conditions of the Plan. 5.2 Date of Grant. The date of grant of an Award shall be the date on which the Committee makes the determination to grant such Award, unless otherwise specified by the Committee. The Stock Option Agreement and a copy of the Plan will be delivered to the Participant within a reasonable time after the granting of the Award. 5.3 Exercise Period. Awards shall be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement; provided, however, that no Award shall be exercisable after the expiration of ten (10) years from the date the Award is granted; and provided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company ("Ten Percent Stockholder") shall be exercisable after the expiration of five (5) years from the date the Award is granted. The Committee also may provide for the exercise of Awards to become exercisable at one time or from time to time, periodically or otherwise, in such number or percentage as the Committee determines. 5.4 Exercise Price. The Exercise Price shall be determined by the Committee when the Award is granted and shall be not less than 100% of the Fair Market Value of the Shares on the date of grant; provided, that the Exercise Price of any ISO granted to a Ten Percent Stockholder shall not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 6 of the Plan. 5.5 Method of Exercise. Awards may be exercised only by delivery to the Company of a written exercise agreement (the "Exercise Agreement") in a form approved by the Committee (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares, if any, and such representations and agreements regarding Participant's investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased. 5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Award shall always be subject to the following: (a) If the Participant is Terminated for any reason except death or Disability, then Participant may exercise such Participant's Awards only to the extent that such Awards would have been exercisable upon the Termination Date no later than three (3) months after the Termination Date (or such longer time period not exceeding five years as may be determined by the Committee), but in any event, no later than the expiration date of the Awards. (b) If the Participant is terminated because of death or Disability (or the Participant dies within three months of such termination), then Participant's Awards would have been exercisable by Participant on the Termination Date and must be exercised by Participant (or Participant's legal representative or authorized assignee) no later than (i) twelve (12) months after the Termination Date in the case of disability or (ii) eighteen (18) months after the Termination Date in the case of death (or such longer time period not exceeding five years as may be determined by the Committee), but in any event no later than the expiration date of the Awards. 5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Award; provided that such minimum number will not prevent Participant from exercising the Award for the full number of Shares for which it is then exercisable. 5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under the Plan or under any other incentive stock option plan of the Company or any Affiliate, Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, the Awards for the first $100,000 worth of Shares to become exercisable in such calendar year shall be ISOs and the Awards for the amount in excess of $100,000 that become exercisable in that calendar year shall be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date of the Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISOs, such different limit shall be automatically incorporated herein and shall apply to any Awards granted after the effective date of such amendment. 5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Awards and authorize the grant of new Awards in substitution therefor; provided that any such action may not, without the written consent of Participant, impair any of Participant's rights under any Award previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered shall be treated in accordance with Section 424(h) of the Code. The Committee may reduce the Exercise Price of outstanding Awards without the consent of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 5.4 of the Plan for Awards granted on the date the action is taken to reduce the Exercise Price; and provided, further, that the Exercise Price shall not be reduced below the par value of the Shares, if any. 5.10 No Disqualification. Notwithstanding any other provision in the Plan, no term of the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify the Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code. 6. PAYMENT FOR SHARE PURCHASES. Payment for Shares purchased pursuant to the Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted by law: (a) by surrender of Shares that either: (1) have been owned by Participant for more than six (6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such Shares); or (2) were obtained by Participant in the public market; (b) by waiver of compensation due or accrued to Participant for services rendered; (c) provided that a public market for the Company's stock exists: (1) through a "same day sale" commitment from Participant and a broker-dealer that is a member of the National Association of Securities Dealers (a "NASD Dealer") whereby the Participant irrevocably elects to exercise the Award and to sell a portion of the Shares so purchased in order to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or (2) through a "margin" commitment from Participant and a NASD Dealer whereby Participant irrevocably elects to exercise the Award and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (d) by any combination of the foregoing. 7. WITHHOLDING TAXES. 7.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted under the Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Whenever, under the Plan, payments in satisfaction of Awards are to be made in cash, such payment shall be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements. 7.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in connection with the exercise of any Award that is subject to tax withholding and the Participant is obligated to pay the Company the amount required to be withheld, the Committee may allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares to be issued that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined (the "Tax Date"). All elections by a Participant to have Shares withheld for this purpose shall be made in writing in a form acceptable to the Committee and shall be subject to the following restrictions: (a) the election must be made on or prior to the applicable Tax Date; (b) once made, then except as provided below, the election shall be irrevocable as to the particular Shares as to which the election is made; (c) all elections shall be subject to the consent or disapproval of the Committee; (d) if the Participant is an Insider and if the Company is subject to Section 16(b) of the Exchange Act: (1) the election may not be made within six (6) months of the date of grant of the Award, except as otherwise permitted by SEC Rule 16b-3(e) under the Exchange Act, and (2) either (A) the election to use stock withholding must be irrevocably made at least six (6) months prior to the Tax Date (although such election may be revoked at any time at least six (6) months prior to the Tax Date) or (B) the exercise of the Award or election to use stock withholding must be made in the ten (10) day period beginning on the third day following the release of the Company's quarterly or annual summary statement of sales or earnings; and (e) in the event that the Tax Date is deferred until six (6) months after the delivery of Shares under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the exercise occurs, but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date. 8. PRIVILEGES OF STOCK OWNERSHIP. 8.1 Voting and Dividends. No Participant shall have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant shall be a stockholder and have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares. 8.2 Financial Statements. The Company shall provide financial statements to each Participant prior to such Participant's purchase of Shares under the Plan, and to each Participant annually during the period such Participant has Awards outstanding; provided, however, the Company shall not be required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information. 9. TRANSFERABILITY. Subject to Section 4.1(j), Awards granted under the Plan, and any interest therein, shall not: (a) be transferable or assignable by the Participant, (b) be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or as consistent with the specific Plan and Stock Option Agreement provisions relating thereto or (c) during the lifetime of the Participant, be exercisable by anyone other than the Participant, and any elections with respect to an Award, may be made only by the Participant. 10. CERTIFICATES. All certificates for Shares or other securities delivered under the Plan shall be subject to such stock transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed. 11. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in the Plan, the Company shall have no obligation to issue or deliver certificates for Shares under the Plan prior to (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and/or (b) completion of any registration or other qualification of such shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company shall be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company shall have no liability for any inability or failure to do so. 12. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the Plan shall confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent, Subsidiary or Affiliate of the Company or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate of the Company to terminate Participant's employment or other relationship at any time, with or without cause. 13. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award previously granted with payment in cash, Shares or other consideration, based on such terms and conditions as the Committee and the Participant shall agree. 14. CORPORATE TRANSACTIONS. 14.1 Corporate Transactions. In the event of a Corporate Transaction (as defined in this Section 14.1), the exercisability of each Award shall be automatically accelerated so that each Award shall, immediately before the specified effective date for the Corporate Transaction, become fully exercisable with respect to the total number of Shares and may be exercised for all or any portion of such Shares; provided, that an Award shall not be accelerated if and to the extent that such Award is, in connection with the Corporate Transaction, either to be assumed by the successor corporation or parent thereof or to be replaced with a comparable option to purchase shares of the capital stock of the successor corporation or parent thereof. The determination of comparability shall be made by the Committee, and the Committee's determination shall be final, binding and conclusive. Upon the consummation of a Corporate Transaction, all outstanding Awards shall, to the extent not previously exercised or assumed by the successor corporation or its parent, terminate and cease to be exercisable. "Corporate Transaction" means (a) a merger or acquisition in which the Company is not the surviving entity (except for a transaction the principal purpose of which is to change the State in which the Company is incorporated), (b) the sale, transfer or other disposition of all or substantially all of the assets of the Company or (c) any other corporate reorganization or business combination that is not approved by the Board and in which the beneficial ownership of 50% or more of the Company's outstanding voting stock is transferred. 14.2 Change in Control. Notwithstanding any provision in Section 14.1 to the contrary, in the event of a Change in Control (as defined in this Section 14.2), each Award shall automatically accelerate effective fifteen (15) days following the effective date of the Change in Control, so that each Award shall become fully exercisable with respect to the total number of Shares and may be exercised for all or any portion of such Shares. Upon a Change in Control, all outstanding Awards accelerated shall remain fully exercisable until the expiration or sooner termination of the Award term specified in the Stock Option Agreement. A "Change in Control" shall be deemed to occur: (a) should a person or related group of persons, other than the Company or a person that directly or indirectly controls, is controlled by or is under common control with the Company, becomes the beneficial owner (within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act) of 25% or more of the Company's outstanding voting stock pursuant to a tender or exchange offer that the Board does not recommend and that the stockholders of the Company accept; or (b) on the first date within any period of twenty-four (24) consecutive months or less on which there is effected a change in the composition of the Board by reason of a contested election such that a majority of the Board members cease to be comprised of individuals who either (i) have been members of the Board continuously since the beginning of such period or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board. 14.3 Dissolution. In the event of the proposed dissolution or liquidation of the Company, the Board shall notify the Participant at least fifteen (15) days prior to such proposed action. To the extent that Awards have not been previously exercised, such Awards will terminate immediately prior to the consummation of such proposed action. 14.4 Assumption of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in substitution of such other company's award, or (b) assuming such award as if it had been granted under the Plan if the terms of such assumed award could be applied to an Award granted under the Plan. Such substitution or assumption shall be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under the Plan if the other company had applied the rules of the Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award shall remain unchanged (except that the exercise price and the number and nature of Shares issuable upon exercise of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Award rather than assuming an existing option, such new Award may be granted with a similarly adjusted Exercise Price. 15. ADOPTION AND STOCKHOLDER APPROVAL. The Plan shall become effective on the date that it is adopted by the Board (the "Effective Date"). The Plan shall be approved by the stockholders of the Company (excluding Shares issued pursuant to this Plan), consistent with applicable laws, within twelve months before or after the Effective Date. Upon the Effective Date, the Board may grant Awards pursuant to the Plan; provided, however, that: (a) no Award may be exercised prior to initial stockholder approval of the Plan and (b) no Award granted pursuant to an increase in the number of Shares approved by the Board shall be exercised prior to the time such increase has been approved by the stockholders of the Company. For so long as and whenever the Company is subject to Section 16(b) of the Exchange Act, the Company will comply with the requirements of Rule 16b-3 (or its successor), as amended, with respect to stockholder approval. 16. TERM OF PLAN. The Plan will terminate ten (10) years from the Effective Date or, if earlier, the date of stockholder approval. 17. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend the Plan in any respect, including without limitation amendment of any form of Stock Option Agreement or instrument to be executed pursuant to the Plan; provided, however, that the Board shall not, without the approval of the stockholders of the Company, amend the Plan in any manner that requires such stockholder approval pursuant to the Code or the regulations promulgated thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act or Rule 16b-3 (or its successor), as amended, thereunder; provided, further, that no amendment may be made to outstanding Awards without the consent of the Participant. 18. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by the Board, the submission of the Plan to the stockholders of the Company for approval, nor any provision of the Plan shall be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases. 19. DEFINITIONS. As used in the Plan, the following terms shall have the following meanings: "Affiliate" means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company where "control" (including the terms "controlled by" and "under common control with") means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. "Award" means an award of an option to purchase Shares. "Stock Option Agreement" means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award. "Board" means the Board of Directors of the Company. "Code" means the Internal Revenue Code of 1986, as amended. "Committee" means the committee appointed by the Board to administer the Plan, or if no committee is appointed, the Board. "Company" means Integrated Device Technology, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation. "Disability" means a disability, whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Code, as determined by the Committee. "Disinterested Person" means a director who has not, during the period that person is a member of the Committee and for one year prior to service as a member of the Committee, been granted or awarded equity securities pursuant to the Plan or any other plan of the Company or any Parent, Subsidiary or Affiliate of the Company, except in accordance with the requirements set forth in Rules as promulgated by the SEC under Section 16(b) of the Exchange Act, as such Rules are amended from time to time and as interpreted by the SEC. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exercise Price" means the price at which a holder of an Award may purchase the Shares issuable upon exercise of the Award. "Fair Market Value" means the value of a share of the Company's Common Stock determined as follows: (a) if such Common Stock is then quoted on the Nasdaq National Market the closing price on the Nasdaq National Market System on the trading day immediately preceeding the date on which Fair Market Value is determined, or, if no such reported sale takes place on such date, the closing price on the next preceding trading date on which a reported sale occurred; (b) if such Common Stock is publicly traded and is then listed on a national securities exchange, the closing price or, if no reported sale takes place on such date, the closing price on the next preceding trading day on which a reported sale occurred; (c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on such date, as reported by The Wall Street Journal, for the over-the-counter market; or (d) if none of the foregoing is applicable, by the Board in good faith. "Insider" means an officer or director of the Company or any other person whose transactions in the Company's Common Stock are subject to Section 16 of the Exchange Act. "Outside Director" means any outside director as defined in Section 162(m) of the Code and the regulations issued thereunder. "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if at the time of the granting of an Award under the Plan, each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. "Participant" means a person who receives an Award under the Plan. "Plan" means this Integrated Device Technology, Inc. 1994 Stock Option Plan, as amended from time-to-time. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Shares" means shares of the Company's Common Stock $0.001 par value, reserved for issuance under the Plan, as adjusted pursuant to Sections 2 and 14, and any successor security. "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. "Termination" or "Terminated" means, for purposes of the Plan with respect to a Participant, that the Participant has ceased to provide services as an employee, director, consultant, independent contractor or adviser, to the Company or a Parent, Subsidiary or Affiliate of the Company, except in the case of sick leave, military leave, or any other leave of absence approved by the Committee; provided, that such leave is for a period of not more than ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by contract or statute. The Committee shall have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the "Termination Date"). Integrated Device Technology, Inc. 1994 Stock Option Plan INTEGRATED DEVICE TECHNOLOGY, INC. 1994 STOCK OPTION PLAN STOCK OPTION AGREEMENT Participant: _________________________________ ID: _____________________ Social Security No.: _________________________ Address: _____________________________________ ______________________________________________ You have been granted a stock option (this "Option") to purchase Common Stock of Integrated Device Technology, Inc. as follows: Stock Option Agreement No.: _______________________________ Date of Grant: ____________________________________________ Exercise Price Per Share: _________________________________ Total Number of Shares Granted: ___________________________ Total Exercise Price of Shares Granted: ___________________ Expiration Date: __________________________________________ Type of Option: Incentive ______ Nonqualified ______ Capitalized terms not defined below shall have the meaning ascribed to them in the Integrated Device Technology, Inc. 1994 Stock Option Plan (the "Plan"). If the Participant set forth above is Terminated for any reason, except death or Disability, this Option to the extent (and only to the extent) that it would have been exercisable by Participant on the Termination Date, may be exercised by Participant no later than three (3) months after the Termination Date, but in any event no later than the Expiration Date set forth above. If Participant is Terminated because of death or Disability of Participant (or the Participant dies within three months of such Termination), this Option, to the extent that it is exercisable by Participant on the Termination Date, may be exercised by Participant (or Participant's legal representative) no later than (i) twelve (12) months after the Termination Date in the case of Disability or (ii) eighteen (18) months after the Termination Date in the case of death, but in any event no later than the Expiration Date. This Option may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of Participant only by Participant. The terms of this Option shall be binding upon the executors, administrators, successors and assigns of Participant. By our signatures we agree that this Option is granted under and governed by the terms of the Plan, specifically including Section 6 of the Plan. The term of this Option is ten (10) years from the Date of Grant set forth above. This Option shall be exercisable in accordance with the schedule on the Grant Summary attached hereto as Exhibit A. ______________________________________ ______________________ For INTEGRATED DEVICE TECHNOLOGY, INC. Date ______________________________________ ______________________ Participant Date EXHIBIT A GRANT SUMMARY EXHIBIT B INTEGRATED DEVICE TECHNOLOGY, INC. Stock Option Exercise Agreement _______________________________ I hereby elect to purchase the number of shares of Common Stock as set forth below, pursuant to the Integrated Device Technology, Inc. 1994 Stock Option Plan (the "Plan"): Participant _______________________ Number of Shares Purchased: ___________ Social Security Number: ___________ Purchase Price per Share: _____________ Address: __________________________ Aggregate Purchase Price: _____________ ___________________________________ Date of Stock Option Agreement: _______ Type of Stock Option Exact Name of Title to Shares: [ ] Incentive Stock Option _______________________________________ [ ] Nonqualified Stock Option _______________________________________ Participant hereby delivers to the Company the Aggregate Purchase Price as set forth above, as follows (check as applicable and complete): [ ] in cash (by check) in the amount of $__________________, receipt of which is acknowledged by the Company; [ ] through a "same-day-sale" commitment, delivered herewith, from Participant and the NASD Dealer named therein, in the amount of $___________________; or [ ] through a "margin" commitment, delivered herewith from Participant and the NASD Dealer named therein, in the amount of $_____________________. Tax Consequences. PARTICIPANT UNDERSTANDS THAT PARTICIPANT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S PURCHASE OR DISPOSITION OF THE SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED WITH ANY TAX CONSULTANT(S) PARTICIPANT DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Entire Agreement. The Plan, Stock Option Agreement and Grant Summary are incorporated herein by reference. This Exercise Agreement, the Plan, the Stock Option Agreement and the Grant Summary constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and are governed by California law except for that body of law pertaining to conflict of laws. Date: _______________________________ __________________________________ Signature of Participant EX-10.18 8 1994 DIRECTORS STOCK OPTION PLAN INTEGRATED DEVICE TECHNOLOGY, INC. 1994 DIRECTORS STOCK OPTION PLAN As Adopted May 3, 1994 1. Purpose. This 1994 Directors Stock Option Plan (this "Plan") is established to provide equity incentives for nonemployee members of the Board of Directors of Integrated Device Technology, Inc. (the "Company") who are described in Section 6.1 below, by granting such persons options to purchase shares of stock of the Company. 2. Adoption and Stockholder Approval. This Plan shall become effective on the date that it is adopted by the Board of Directors (the "Board") of the Company. This Plan shall be approved by the stockholders of the Company, consistent with applicable laws, within twelve (12) months after the date that it is adopted by the Board. After adoption of this Plan by the Board, options ("Options") may be granted under this Plan provided that, in the event that stockholder approval is not obtained within the time period provided herein, this Plan, and all Options granted hereunder, shall terminate. No Option that is issued as a result of any increase in the number of shares authorized to be issued under this Plan shall be exercised prior to the time such increase has been approved by the stockholders of the Company and all such Options granted pursuant to such increase shall similarly terminate if such stockholder approval is not obtained. So long as the Company is subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act") the Company will comply with the requirements of Rule 16b-3 with respect to stockholder approval. 3. Types of Options and Shares. Options granted under this Plan shall be non qualified stock options ("NQSOs"). The shares of stock that may be purchased upon exercise of Options granted under this Plan (the "Shares") are shares of the Common Stock of the Company. 4. Number of Shares. The number of Shares reserved and made available for grant and issuance hereunder is Fifty Thousand (50,000) Shares. Effective upon stockholder approval of this Plan, there shall also be reserved for issuance under this Plan an additional Four Thousand (4,000) Shares currently available for grant under the Company's 1989 Nonemployee Director Stock Option Plan (the "Predecessor Plan"), which will thereupon be terminated. The maximum number of Shares that may be issued pursuant to Options granted under this Plan is Fifty Four Thousand (54,000) Shares, subject to adjustment as provided in this Plan. If any Option is terminated for any reason without being exercised in whole or in part, the Shares thereby released from such Option shall be available for purchase under other Options subsequently granted under this Plan. At all times during the term of this Plan, the Company shall reserve and keep available such number of Shares as shall be required to satisfy the requirements of outstanding Options under this Plan. 5. Administration. This Plan shall be administered by the Board or by a committee of not less than two members of the Board appointed to administer this Plan (the "Committee"). As used in this Plan, references to the Committee shall mean either such Committee or the Board if no Committee has been established. The interpretation by the Committee of any of the provisions of this Plan or any Option granted under this Plan shall be final and binding upon the Company and all persons having an interest in any Option or any Shares purchased pursuant to an Option. 6. Eligibility and Award Formula. 6.1 Eligibility. Options may be granted only to directors of the Company who are not common-law employees of the Company or any Parent, Subsidiary or Affiliate of the Company, as those terms are defined in Section 17 below (each an "Optionee"). 6.2 Standard Grant. Each Optionee who becomes a member of the Board will automatically be granted an Option for 16,000 Shares upon his election or appointment to the Board. An Optionee who becomes the Chair of the Audit Committee of the Board will automatically be granted an additional Option for 4,000 Shares on the date of the Optionee's election or appointment to the office of Chair of the Audit Committee. Each such Option grant to a member of the Board or to the Chair of the Audit Committee shall be referred to as a "Standard Grant". An Optionee who received a Standard Nonqualified Option (as defined in Section 4.1 of the Predecessor Plan) for such Optionee's initial election or appointment to the Board or to the office of Chair of the Audit Committee shall not be eligible to receive a Standard Grant hereunder. Notwithstanding the preceding sentence, if an Optionee resigns and is later reelected or reappointed to the Board or the office of Chair of the Audit Committee, such Optionee shall again be eligible to receive a Standard Grant pursuant to the terms of the Plan. 6.3 Fourever Grants. Each Optionee who remains a member of the Board or the Chair of the Audit Committee as provided below, will automatically be granted an Option for 4,000 Shares if the Optionee remains a member of the Board and an additional Option for 1,000 Shares, if the Optionee remains the Chair of the Audit Committee, on each anniversary of the grant of such Optionee's Standard Grant (each a "Fourever Grant"). To remain eligible for a Fourever Grant under the Plan, the Optionee must, on each such anniversary date, (a) not have given notice to the Company that he will not stand for re-election as a member of the Board at the annual meeting of the Company's stockholders following expiration of his term; (b) not have received notice from the Board that he will not be nominated for election as a member of the Board at such meeting; and (c) in the case of the Chair of the Audit Committee, (i) not have given notice to the Company that he intends to resign as Chair of the Audit Committee and (ii) not have received notice from the Board that he will be replaced as Chair of the Audit Committee. 6.4 Maximum Shares. The maximum number of Shares that may be issued to any one Optionee under this Plan in any one fiscal year shall be Twenty Thousand (20,000) shares. No grant will be made if such grant will cause the number of Shares issued or subject to outstanding Options under this Plan to exceed the number specified in Section 4 above. 7. Terms and Conditions of Options. Subject to the following and to Section 6 above: 7.1 Form of Option Grant. Each Option granted under this Plan shall be evidenced by a written Stock Option Grant ("Grant") in such form (which need not be the same for each Optionee) as the Committee shall from time to time approve, which Grant shall comply with and be subject to the terms and conditions of this Plan. 7.2 Vesting. Options granted under this Plan shall be exercisable as they vest. Standard Grants shall vest in cumulative increments of 25% per year, commencing on the first anniversary of the date of grant. Fourever Grants shall not vest until the fourth anniversary of the date of grant, on which date Fourever Grants shall vest in full. No portion of an Option that is unvested at the Optionee's Termination Date (as defined in Section 7.4) shall thereafter become vested. 7.3 Exercise Price. The exercise price of an Option shall be the Fair Market Value (as defined in Section 17.4) of the Shares, at the time that the Option is granted. 7.4 Termination of Option. Except as provided below in this Section 7.4, each Option shall expire ten (10) years after the date of grant (the "Expiration Date"). The Option shall cease to vest if Optionee ceases to be a member of the Board. The date on which Optionee ceases to be a member of the Board shall be referred to as the "Termination Date." An Option may be exercised after the Termination Date only as set forth below: (a) Termination Generally. If Optionee ceases to be a member of the Board for any reason except death or disability, each Option, to the extent (and only to the extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised by Optionee within three (3) months after the Termination Date, but in no event later than the Expiration Date. (b) Death or Disability. If Optionee ceases to be a member of the Board because of the death of Optionee or the disability of Optionee within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), each Option, to the extent (and only to the extent) that it would have been exercisable by Optionee on the Termination Date, may be exercised by Optionee (or Optionee's legal representative) within twelve (12) months after the Termination Date, but in no event later than the Expiration Date. 8. Exercise of Options. 8.1 Notice. Options may be exercised only by delivery to the Company of an exercise agreement in a form approved by the Committee, stating the number of Shares being purchased, the restrictions imposed on the Shares and such representations and agreements regarding the Optionee's investment intent and access to information as may be required by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased. 8.2 Payment. Payment for the Shares may be made (a) in cash (by check); (b) by surrender of shares of Common Stock of the Company that have been owned by Optionee for more than six (6) months (and which have been paid for within the meaning of SEC Rule 144 and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares) or were obtained by the Optionee in the open public market, having a Fair Market Value equal to the exercise price of the Option; (c) provided that a public market for the Company's stock exists, through a "same day sale" commitment from the Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (a "NASD Dealer") whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; (d) provided that a public market for the Company's stock exists, through a "margin" commitment from the Optionee and a NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (e) by any combination of the foregoing. 8.3 Withholding Taxes. Prior to issuance of the Shares upon exercise of an Option, the Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable. 8.4 Limitations on Exercise. Notwithstanding the exercise periods set forth in the Grant, exercise of an Option shall always be subject to the following limitations: (a) An Option shall not be exercisable until such time as the Plan or, in the case of Options granted pursuant to an amendment to the number of shares that may be issued pursuant to the Plan the amendment, has been approved by the stockholders of the Company in accordance with Section 15 hereof. (b) An Option shall not be exercisable unless such exercise is in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and all applicable state securities laws, as they are in effect on the date of exercise. (c) The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent the Optionee from exercising the full number of Shares as to which the Option is then exercisable. 9. Nontransferability of Options. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or by the Optionee's guardian or legal representative, unless otherwise permitted by the Committee. No Option may be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution. 10. Privileges of Stock Ownership. No Optionee shall have any of the rights of a stockholder with respect to any Shares subject to an Option until the Option has been validly exercised. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of exercise, except as provided in this Plan. The Company shall provide to each Optionee a copy of the annual financial statements of the Company, at such time after the close of each fiscal year of the Company as they are released by the Company to its stockholders. 11. Adjustment of Option Shares. In the event that the number of outstanding shares of Common Stock of the Company is changed by a stock dividend, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, the number of Shares available under this Plan and the number of Shares subject to outstanding Options and the exercise price per share of such Options shall be proportionately adjusted, subject to any required action by the Board or stockholders of the Company and compliance with applicable securities laws; provided, however, that no certificate or scrip representing fractional shares shall be issued upon exercise of any Option and any resulting fractions of a Share shall be ignored. 12. No Obligation to Employ. Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee any right to continue as a director of the Company. 13. Compliance With Laws. The grant of Options and the issuance of Shares upon exercise of any Options shall be subject to and conditioned upon compliance with all applicable requirements of law, including without limitation compliance with the Securities Act, compliance with all other applicable state securities laws and compliance with the requirements of any stock exchange or national market system on which the Shares may be listed. The Company shall be under no obligation to register the Shares with the Securities and Exchange Commission or to effect compliance with the registration or qualification requirement of any state securities laws, stock exchange or national market system. l4. Acceleration of Options. In the event of (i) a dissolution or liquidation of the Company, (ii) a merger in which the Company is not the surviving corporation, the sale of substantially all of the assets of the Company, (iii) any other transaction which qualifies as a "corporate transaction" under Section 424 of the Code wherein the stockholders of the Company give up all of their equity interest in the Company or (iv) a change in the composition of the Board by reason of a contested election such that a majority of the Board members cease to be comprised of individuals who have been members of the Board immediately prior to such change, the vesting of all Options granted pursuant to the Plan will accelerate and the Options will become exercisable in full prior to the consummation of such event at such times and on such conditions as the Committee determines. 15. Amendment or Termination of Plan. The Committee may at any time terminate or amend this Plan but not the terms of any outstanding Option; provided, however, that the Committee shall not, without the approval of the stockholders of the Company, increase the total number of Shares available under this Plan (except by operation of the provisions of Sections 4 and 11 above) or change the class of persons eligible to receive Options. Further, the provisions in Sections 6 and 7 of this Plan shall not be amended more than once every six (6) months, other than to comport with changes in the Code, the Employee Retirement Income Security Act or the rules thereunder. In any case, no amendment of this Plan may adversely affect any then outstanding Options or any unexercised portions thereof without the written consent of the Optionee. 16. Term of Plan. Options may be granted pursuant to this Plan from time to time within a period of ten (10) years from the date this Plan is adopted by the Board of Directors. 17. Certain Definitions. As used in this Plan, the following terms shall have the following meanings: 17.1 "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the granting of the Option, each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 17.2 "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of granting of the Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 17.3 "Affiliate" means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company where "control" (including the terms "controlled by" and "under common control with") means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. 17.4 "Fair Market Value" shall mean, as of any date, the value of a share of the Company's Common Stock determined as follows: (a) the closing price of a share on the principal exchange on which shares are then trading, if any, on the last business day before such date, or, if shares were not traded on such date, then on the next preceding trading day during which a sale occurred; (b) if the shares are not traded on an exchange but quoted on the Nasdaq Stock Market or a successor quotation system, (i) the closing price (if the shares are then listed as a National Market Issue on the Nasdaq National Market) or (ii) the mean between the closing representative bid and asked prices (in all other cases) for the shares on the last business day before such date as reported by the Nasdaq Stock Market or such successor quotation system; or (c) if the shares are not publicly traded on an exchange and not quoted on the Nasdaq Stock Market or a successor quotation system, the mean between the closing bid and asked prices for the shares on the last business day before such date. Integrated Device Technology, Inc. 1994 Directors Stock Option Plan INTEGRATED DEVICE TECHNOLOGY, INC. 1994 DIRECTORS STOCK OPTION PLAN DIRECTORS NONQUALIFIED STOCK OPTION AGREEMENT Participant: __________________ ID: __________________ Social Security No.: __________________ Address: __________________ You have been granted a nonqualified stock option (this "Option") to purchase Common Stock of Integrated Device Technology, Inc. as follows: Nonqualified Stock Option Agreement No.: __________________ Date of Grant: __________________ Exercise Price Per Share: __________________ Total Number of Shares Granted: __________________ Total Exercise Price of Shares Granted: __________________ Expiration Date: __________________ Capitalized terms not defined below shall have the meaning ascribed to them in the Integrated Device Technology, Inc. 1994 Directors Stock Option Plan (the "Plan"). If the Participant set forth above ceases to be a member of the Board for any reason, except death or disability, this Option to the extent (and only to the extent) that it would have been exercisable by Participant on the Termination Date, may be exercised by Participant no later than three (3) months after the Termination Date, but in any event no later than the Expiration Date set forth above. If Participant ceases to be a member of the Board because of death or disability of Participant, this Option, to the extent (and only to the extent) that it is exercisable by Participant on the Termination Date, may be exercised by Participant (or Participant's legal representative) no later than twelve (12) months after the Termination Date, but in any event no later than the Expiration Date. This Option may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of Participant only by Participant. The terms of this Option shall be binding upon the executors, administrators, successors and assigns of Participant. By our signatures we agree that this Option is granted under and governed by the terms of the Plan. The term of this Option is ten (10) years from the Date of Grant set forth above. This Option shall be exercisable in accordance with the schedule on the Grant Summary attached hereto as Exhibit A. _____________________________________ ___________________ For INTEGRATED DEVICE TECHNOLOGY, INC. Date _____________________________________ ___________________ Participant Date EXHIBIT A GRANT SUMMARY EXHIBIT B INTEGRATED DEVICE TECHNOLOGY, INC. Stock Option Exercise Agreement I hereby elect to purchase the number of shares of Common Stock as set forth below, pursuant to the Integrated Device Technology, Inc. 1994 Directors Stock Option Plan (the "Plan"): Participant ______________________ Number of Shares Purchased: _____________ Social Security Number:___________ Purchase Price per Share: _____________ Address: _________________________ Aggregate Purchase Price: _____________ __________________________________ Date of Stock Option Agreement: _________ Type of Stock Option Exact Name of Title to Shares: [ ] Incentive Stock Option _________________________________________ [ ] Nonqualified Stock Option Participant hereby delivers to the Company the Aggregate Purchase Price as set forth above, as follows (check as applicable and complete): [ ] in cash (by check) in the amount of $__________________, receipt of which is acknowledged by the Company; [ ] through a "same-day-sale" commitment, delivered herewith, from Participant and the NASD Dealer named therein, in the amount of $___________________; or [ ] through a "margin" commitment, delivered herewith from Participant and the NASD Dealer named therein, in the amount of $_______________. Tax Consequences. PARTICIPANT UNDERSTANDS THAT PARTICIPANT MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF PARTICIPANT'S PURCHASE OR DISPOSITION OF THE SHARES. PARTICIPANT REPRESENTS THAT PARTICIPANT HAS CONSULTED WITH ANY TAX CONSULTANT(S) PARTICIPANT DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR DISPOSITION OF THE SHARES AND THAT PARTICIPANT IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. Entire Agreement. The Plan, Stock Option Agreement and Grant Summary are incorporated herein by reference. This Exercise Agreement, the Plan, the Stock Option Agreement and the Grant Summary constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and are governed by California law except for that body of law pertaining to conflict of laws. Date: __________________ __________________________ Signature of Participant EX-10.19 9 LETTER RE: CONSTRUCTION OF OREGON FAB June 29, 1994 Mr. Phillip Pare' Vice President, General Manager - Special Projects Integrated Device Technology, Inc. 1566 Moffett Street Salinas, CA 93905 SUBJECT: INTEGRATED DEVICE TECHNOLOGY, INC. FAB FOUR - OREGON Dear Phillip: McCarthy is pleased to present our preliminary budget proposal for the above referenced project. Our preliminary budget includes site development, building shell and core and the two story office build-out. We propose a preliminary budget of TEN MILLION,SIX HUNDRED TWENTY ONE THOUSAND,SIX HUNDRED THIRTY TWO DOLLARS, (10,621,632) excluding a Payment and Performance Bond. We propose a 16 week construction schedule to complete a weather-tight building shell,including the basement sub-fab after completion of the site development. We propose a 4 week site development schedule including mobilization, excavation and utilities, prior to starting the slab-on-grade and basement sub-fab. Phillip, we recognize the importance of the schedule and have based our preliminary budget on building systems and methods that allow accelerated construction. Thank you for the opportunity to assist you in the development of the IDT Fab Four project. Should you have any qestions,please do not hesitate to call me. We look forward to talking with you soon. Sincerely, Arne J. Hall Director CC: Del Bishop - McCarthy Ed Weinmann - McCarthy John Bailey - McCarthy EX-27 10 FINANCIAL DATA SCHEDULES
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMNTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS APR-02-1995 OCT-02-1994 87,774 38,120 63,600 3,728 32,755 246,971 331,684 188,514 397,566 94,360 0 34 0 0 260,339 397,566 190,628 190,628 80,422 80,422 65,904 0 1,854 45,169 11,285 33,884 0 0 0 33,884 0.94 0.94
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