-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E3fZlLyzL5Ert5GCrnkh29kVkJExiUSZVZzP2FJ8Q7NjUtt1WqXvOuczJ+iiquRF C3Gm+AaXRIZOI6aLlH8hLQ== 0000772406-00-000012.txt : 20000410 0000772406-00-000012.hdr.sgml : 20000410 ACCESSION NUMBER: 0000772406-00-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000323 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000407 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CIRRUS LOGIC INC CENTRAL INDEX KEY: 0000772406 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770024818 STATE OF INCORPORATION: CA FISCAL YEAR END: 0327 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-17795 FILM NUMBER: 596104 BUSINESS ADDRESS: STREET 1: 3100 W WARREN AVE CITY: FREMONT STATE: CA ZIP: 94538 BUSINESS PHONE: 5106238300 MAIL ADDRESS: STREET 1: 3100 W WARREN AVE CITY: FREMONT STATE: CA ZIP: 94538 8-K 1 FORM 8-K CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report March 23, 2000 CIRRUS LOGIC, INC. (Exact name of registrant as specified in its charter) DELAWARE 77-0024818 0-17795 (State or other jurisdiction of (I.R.S. Employer (Commission incorporation or organization) Identification No.) File Number) 3100 West Warren Avenue, Fremont, CA 94538 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (510) 623-8300 __________________________________________________________ (Former name or former address, if changed since last report) CIRRUS LOGIC, INC. INDEX
Page --------- Item 2. Acquisition or Disposition of Assets 3 Item 7. Financial Statements and Exhibits 4 Signature 4
Item 2. Acquisition or Disposition of Assets Partial Disposition of the Company's Interest in the Common Stock of Phone.com, Inc. During February of 2000, we sold four call option contracts to Lehman Brothers Finance, S.A. that resulted in a partial liquidation of our investment in the common stock of Phone.com, Inc. (Nasdaq: PHCM). The terms of the call option contracts were as follows:
Effective Shares Premium Selling Subject to Exercise Earned Price Per Option Price Per Share Share Expiration - ----------- --------- --------- ----------- ------------------- 112,500 $110 $23.5354 $133.5354 March 23, 2000 62,500 130 15.34 145.34 March 23, 2000 62,500 135 12.88 147.88 March 23, 2000 62,500 $140 $10.70 $150.70 March 23, 2000
We received premiums totaling $5.1 million for entering into these option contracts. Each of these option contracts was automatically exercised under the terms of the agreements at the expiration date. Accordingly, we received proceeds of $37.7 million on March 24, 2000 representing the exercise prices for the sale of the 300,000 underlying shares of Phone.com. The total proceeds received by us from these transactions was $42.8 million. Item 7. Financial Statements and Exhibits c) Letter Agreements between Lehman Brothers Finance S.A. and Cirrus Logic, Inc. dated as of February 11, 2000 and February 18, 2000*. * Filed herewith SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Cirrus Logic, Inc. April 7, 2000 Date /s/ GLENN C. JONES Glenn C. Jones Vice President, Chief Financial Officer, Treasurer and Secretary EXHIBIT INDEX
Exhibit Page - --------- ------ 10.1 Letter Agreements between Lehman Brothers Finance S. 6 and Cirrus Logic, Inc. dated as of February 11, 2000 and February 18, 2000*.
EX-10.1 2 EXHIBIT 10.1 Revised Transaction Cirrus Logic Inc. Attention: Robert Fay Telephone: 512-912-3864 Facsimile: 512-445-6332 Master Number: 021400CILO LBF Reference Number: N00020269 Global Deal Id: 47442 Effort Id: 112647 Dear Sir or Madam: The purpose of this revised letter agreement (this "Confirmation") is to confirm the terms and conditions of the Option Transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. The definitions and provisions contained in the 1991 ISDA Definitions (the "Swap Definitions") and the 1996 ISDA Equity Derivatives Definitions (the "Equity Definitions", and together with the Swap Definitions, the "Definitions"), in each case as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event if any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern. This Confirmation evidences a complete binding agreement between Lehman Brothers Finance S.A. ("Party A") and Cirrus Logic Inc. ("Party B") as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement (the "Master Agreement") in the form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of, and be subject to that agreement that will govern all Transactions entered into between Party A and Party B. All provisions contained or incorporated by reference in that agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents (each a "Confirmation") confirming transactions entered into between us and referring to the ISDA Form, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule) on the Trade Date of the first such transaction between us. In the event of any inconsistency between the provisions of that agreement, or the Master Agreement when executed, and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. The terms of the Transaction to which this Confirmation relates are as follows: General Terms: Agent: Lehman Brothers Inc. ("LBI") is acting as agent on behalf of Party A for this Transaction. LBI has no obligations, by guarantee, endorsement or otherwise, with respect to the performance of this Transaction by Party A. Trade Date: February 11, 2000 Option Style: European Option Type: Call Seller: Party B Buyer: Party A Shares: Phone.com, Inc. (the "Issuer") (ticker symbol: PHCM) Number of Options: 112,500 Option Entitlement: 1 Share(s) per Option Multiple Exercise: Inapplicable Strike Price: USD110 Premium: USD2,647,732.50 Premium Payment Date: Party A shall deliver the Premium to Party B on the earlier of (i) the Expiration Date; or (ii) the date on which Party B delivers the Independent Amount to Party A (estimated to be no later than February 15, 2000) Exchange(s): Nasdaq NMS Related Exchange(s): Not Applicable Clearance System: The relevant Clearance System for the Shares Procedure for Exercise: Expiration Time: The Valuation Time Expiration Date: March 23, 2000 Automatic Exercise: Applicable Reference Price: The last traded price per Share quoted by the Exchange. Settlement Terms: Physical Settlement: Applicable Failure to Deliver: Applicable Dividends: If, at any time during the period from and including the Trade Date to but excluding the Expiration Date, an ex-dividend date occurs with respect to the Shares, then the cash dividend amount corresponding to that ex-dividend date shall accrue interest at the prevailing LIBOR rate with a designated maturity which most closely approximates the number of days from and including the ex-dividend date to and including the Expiration Date, and shall be added to the Settlement Price. Adjustments: Method of Adjustment: Calculation Agent Adjustment Extraordinary Events: Consequences of Merger Events: (a) Share- for-Share: Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. (b) Share- for-Other: Cancellation and Payment (c) Share- for-Combined: Cancellation and Payment with respect to the Other Consideration, and with respect to the New Shares, Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. Nationalization or Insolvency: Cancellation and Payment Collateral: Party A and Party B agree that this provision is a Pledge Agreement between them with respect to this Transaction until the execution of a pledge agreement with respect to all Transactions in the form of an ISDA Credit Support Annex to the Agreement. Paragraphs one through twelve of the Credit Support Annex are hereby incorporated by reference herein except to the extent such provision is affected by an election of paragraph 13 not set forth herein. Independent Amount: On February 15, 2000, Party B shall deliver to Party A, as the Independent Amount for this Transaction, registered, freely tradable Shares in an amount equal to the Number of Options multiplied by the Option Entitlement. Notwithstanding any provision to the contrary contained in the Agreement, Party A shall have no obligation to return the shares posted as the Independent Amount to Party B until this Transaction is fully and finally terminated. Failure by Party B to deliver the Independent Amount to Party A by February 15, 2000 shall constitute an Additional Termination Event under the Agreement, with Party B as the sole Affected Party. Rehypothecation: Party B hereby agrees that Party A shall have the right, after February 15, 2000, to use the Collateral pledged and delivered by Party B hereunder in the manner set forth in Paragraph 6(c) of the 1994 ISDA Credit Support Annex to the Agreement. Party B acknowledges that Party A and its affiliates may realize profits or other benefits in connection with transactions involving the Collateral authorized under this section and agrees that Party A shall not be accountable to Party B therefor. Other Provisions: Party B Representatio ns: Party B represents that (i) it is not entering into this Transaction on behalf of or for the accounts of any other person or entity, and will not transfer or assign its obligations under this Transaction or any portion of such obligations to any other person or entity except in compliance with applicable laws and the terms of this Transaction; (ii) it has provided to LBI, as agent for Party A, financial and other information concerning its investment objectives and risk tolerance, which information is contained in its LBI account documentation, and has not been rendered misleading or obsolete; (iii) it understands that this Transaction is subject to complex risks which may arise without warning, may at times be volatile, and that losses may occur quickly and in unanticipated magnitude; (iv) it is authorized to enter into this Transaction and such action does not violate any laws of its jurisdiction of organization or residence (including, but not limited to, any applicable position or exercise limits set by any self-regulatory organization, either acting alone or in concert with others) or the terms of any agreement to which it is a party; (v) it has consulted with its legal advisor(s) and has reached its own conclusions about this Transaction, and any legal, regulatory, tax, accounting or economic consequences arising from this Transaction; and (vi) it has concluded that this Transaction is suitable in light of its own investment objectives, financial capabilities and expertise. Party B further represents that (a) it is not an "affiliate" of the Issuer, as such term is defined in Regulation 230.144(a)(1) under the Securities Act of 1933, nor is it a counterparty entering into this Transaction on behalf of the Issuer or any affiliate thereof; and (b) it is not entering into this Transaction while in possession of material non-public information concerning the business, operations or prospects of the Issuer(s). "Material" information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold any securities of the Issuer(s). Neither Party A nor any of its affiliates has advised Party B with respect to any legal, regulatory, tax, accounting or economic consequences arising from this Transaction, and neither Party A nor any of its affiliates is acting as agent (other than LBI as dual agent if specified above), or advisor for Party B in connection with this Transaction. Assignment Provision: Notwithstanding any terms or conditions set forth herein to the contrary, at any time from and including the Trade Date to but excluding the Exercise Date, Party B may instruct Party A to assign this Transaction to Lehman Brothers Inc. or its permitted assigns ("LBI"), in accordance with the attached form of instruction or other similar form, and Party A hereby undertakes to transfer to LBI, before exercise, its contractual obligations hereunder, including any and all obligations related to the settlement of this Transaction. Party A shall be released from any and all obligations to Party B hereunder upon LBI's acceptance of such obligations pursuant to the assignment effected at Party B's instruction. Offices: Inapplicable Governing Law: The laws of the State of New York (without reference to choice of law doctrine) Transfer: Neither party may transfer this Transaction, in whole or in part, without the prior written consent of the non-transferring party, which consent shall not be unreasonably withheld. In addition, either party may assign this Transaction to an affiliated entity of such party whose obligations in respect of such assignment are guaranteed by the transferor party, or, if the transferor's obligations under this Transaction are guaranteed, by the guarantor of such transferor party's obligations. Notwithstanding the foregoing, any assignment hereunder shall not be permitted if, as a result thereof, a payment becomes subject to any deduction or withholding for or on account of any tax which would not have arisen had such assignment not been effected. Calculation Agent: LBI, whose determinations and calculations shall be binding in the absence of manifest error. Party A agrees to provide the following Credit Support Document: Guarantee of Lehman Brothers Holdings Inc. (unconditional guarantee to Party B of the due and punctual payment of all amounts payable by Party A under this Transaction as such payments become due and payable). Party B agrees to execute the following Credit Support Document: Credit Support Annex "THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY OTHER UNITED STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS." Please confirm your agreement with the foregoing by executing this Confirmation and returning it to us at facsimile number 201-524-2080, Attention: Documentation. Yours sincerely, Confirmed as of the date first above written: LEHMAN BROTHERS FINANCE S.A. CIRRUS LOGIC INC. By: ________________________ Name: Title: Execution time will be furnished upon Counterparty's written request. Revised 06-Mar-00 As of February 18, 2000 Transaction Cirrus Logic Inc. Attention: Robert Fay Telephone: 512-912-3864 Facsimile: 512-445-6332 Master Number: 021400CILO LBF Reference Number: N00020303 Global Deal Id: 48132 Effort Id: 111690 Dear Sir or Madam: The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Option Transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. The definitions and provisions contained in the 1991 ISDA Definitions (the "Swap Definitions") and the 1996 ISDA Equity Derivatives Definitions (the "Equity Definitions", and together with the Swap Definitions, the "Definitions"), in each case as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event if any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern. This Confirmation evidences a complete binding agreement between Lehman Brothers Finance S.A. ("Party A") and Cirrus Logic Inc. ("Party B") as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement (the "Master Agreement") in the form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of, and be subject to that agreement that will govern all Transactions entered into between Party A and Party B. All provisions contained or incorporated by reference in that agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents (each a "Confirmation") confirming transactions entered into between us and referring to the ISDA Form, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule) on the Trade Date of the first such transaction between us. In the event of any inconsistency between the provisions of that agreement, or the Master Agreement when executed, and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. The terms of the Transaction to which this Confirmation relates are as follows: General Terms: Agent: Lehman Brothers Inc. ("LBI") is acting as agent on behalf of Party A for this Transaction. LBI has no obligations, by guarantee, endorsement or otherwise, with respect to the performance of this Transaction by Party A. Trade Date: February 18, 2000 Option Style: European Option Type: Call Seller: Party B Buyer: Party A Shares: Phone.com, Inc. (the "Issuer") (ticker symbol: PHCM) Number of Options: 62,500 Option Entitlement: 1 Share(s) per Option Multiple Exercise: Inapplicable Strike Price: USD130 Premium: USD958,750 Premium Payment Date: Party A shall deliver the Premium to Party B on the earlier of (i) the Expiration Date; or (ii) the date on which Party B delivers the Independent Amount to Party A (estimated to be no later than February 24, 2000) Exchange(s): Nasdaq NMS Related Exchange(s): Not Applicable Clearance System: The relevant Clearance System for the Shares Procedure for Exercise: Expiration Time: The Valuation Time Expiration Date: March 23, 2000 Automatic Exercise: Applicable Reference Price: The last traded price per Share quoted by the Exchange. Settlement Terms: Physical Settlement: Applicable Failure to Deliver: Applicable Dividends: If, at any time during the period from and including the Trade Date to but excluding the Expiration Date, an ex-dividend date occurs with respect to the Shares, then the cash dividend amount corresponding to that ex-dividend date shall accrue interest at the prevailing LIBOR rate with a designated maturity which most closely approximates the number of days from and including the ex-dividend date to and including the Expiration Date, and shall be added to the Settlement Price. Adjustments: Method of Adjustment: Calculation Agent Adjustment Extraordinary Events: Consequences of Merger Events: (a) Share- for-Share: Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. (b) Share- for-Other: Cancellation and Payment (c) Share- for-Combined: Cancellation and Payment with respect to the Other Consideration, and with respect to the New Shares, Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. Nationalization or Insolvency: Cancellation and Payment Collateral: Party A and Party B agree that this provision is a Pledge Agreement between them with respect to this Transaction until the execution of a pledge agreement with respect to all Transactions in the form of an ISDA Credit Support Annex to the Agreement. Paragraphs one through twelve of the Credit Support Annex are hereby incorporated by reference herein except to the extent such provision is affected by an election of paragraph 13 not set forth herein. Independent Amount: On February 24, 2000, Party B shall deliver to Party A, as the Independent Amount for this Transaction, registered, freely tradable Shares in an amount equal to the Number of Options multiplied by the Option Entitlement. Notwithstanding any provision to the contrary contained in the Agreement, Party A shall have no obligation to return the shares posted as the Independent Amount to Party B until this Transaction is fully and finally terminated. Failure by Party B to deliver the Independent Amount to Party A by February 24, 2000 shall constitute an Additional Termination Event under the Agreement, with Party B as the sole Affected Party. Rehypothecation: Party B hereby agrees that Party A shall have the right, after February 24, 2000, to use the Collateral pledged and delivered by Party B hereunder in the manner set forth in Paragraph 6(c) of the 1994 ISDA Credit Support Annex to the Agreement. Party B acknowledges that Party A and its affiliates may realize profits or other benefits in connection with transactions involving the Collateral authorized under this section and agrees that Party A shall not be accountable to Party B therefor. Other Provisions: Party B Representatio ns: Party B represents that (i) it is not entering into this Transaction on behalf of or for the accounts of any other person or entity, and will not transfer or assign its obligations under this Transaction or any portion of such obligations to any other person or entity except in compliance with applicable laws and the terms of this Transaction; (ii) it has provided to LBI, as agent for Party A, financial and other information concerning its investment objectives and risk tolerance, which information is contained in its LBI account documentation, and has not been rendered misleading or obsolete; (iii) it understands that this Transaction is subject to complex risks which may arise without warning, may at times be volatile, and that losses may occur quickly and in unanticipated magnitude; (iv) it is authorized to enter into this Transaction and such action does not violate any laws of its jurisdiction of organization or residence (including, but not limited to, any applicable position or exercise limits set by any self-regulatory organization, either acting alone or in concert with others) or the terms of any agreement to which it is a party; (v) it has consulted with its legal advisor(s) and has reached its own conclusions about this Transaction, and any legal, regulatory, tax, accounting or economic consequences arising from this Transaction; and (vi) it has concluded that this Transaction is suitable in light of its own investment objectives, financial capabilities and expertise. Party B further represents that (a) it is not an "affiliate" of the Issuer, as such term is defined in Regulation 230.144(a)(1) under the Securities Act of 1933, nor is it a counterparty entering into this Transaction on behalf of the Issuer or any affiliate thereof; and (b) it is not entering into this Transaction while in possession of material non-public information concerning the business, operations or prospects of the Issuer(s). "Material" information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold any securities of the Issuer(s). Neither Party A nor any of its affiliates has advised Party B with respect to any legal, regulatory, tax, accounting or economic consequences arising from this Transaction, and neither Party A nor any of its affiliates is acting as agent (other than LBI as dual agent if specified above), or advisor for Party B in connection with this Transaction. Assignment Provision: Notwithstanding any terms or conditions set forth herein to the contrary, at any time from and including the Trade Date to but excluding the Exercise Date, Party B may instruct Party A to assign this Transaction to Lehman Brothers Inc. or its permitted assigns ("LBI"), in accordance with the attached form of instruction or other similar form, and Party A hereby undertakes to transfer to LBI, before exercise, its contractual obligations hereunder, including any and all obligations related to the settlement of this Transaction. Party A shall be released from any and all obligations to Party B hereunder upon LBI's acceptance of such obligations pursuant to the assignment effected at Party B's instruction. Offices: Inapplicable Governing Law: The laws of the State of New York (without reference to choice of law doctrine) Transfer: Neither party may transfer this Transaction, in whole or in part, without the prior written consent of the non-transferring party, which consent shall not be unreasonably withheld. In addition, either party may assign this Transaction to an affiliated entity of such party whose obligations in respect of such assignment are guaranteed by the transferor party, or, if the transferor's obligations under this Transaction are guaranteed, by the guarantor of such transferor party's obligations. Notwithstanding the foregoing, any assignment hereunder shall not be permitted if, as a result thereof, a payment becomes subject to any deduction or withholding for or on account of any tax which would not have arisen had such assignment not been effected. Calculation Agent: LBI, whose determinations and calculations shall be binding in the absence of manifest error. Party A agrees to provide the following Credit Support Document: Guarantee of Lehman Brothers Holdings Inc. (unconditional guarantee to Party B of the due and punctual payment of all amounts payable by Party A under this Transaction as such payments become due and payable). Party B agrees to execute the following Credit Support Document: Credit Support Annex "THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY OTHER UNITED STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS." Please confirm your agreement with the foregoing by executing this Confirmation and returning it to us at facsimile number 201-524-2080, Attention: Documentation. Yours sincerely, Confirmed as of the date first above written: LEHMAN BROTHERS FINANCE S.A. CIRRUS LOGIC INC. By: ________________________ Name: Title: Execution time will be furnished upon Counterparty's written request. Assignment Instruction Pursuant to the Transaction bearing LBF Reference Number N00020303 (the "Transaction"), Cirrus Logic Inc. (the "Counterparty") hereby instructs Lehman Brothers Finance S.A. ("LBF") to assign to Lehman Brothers Inc. or its permitted assigns ("LBI"), all of LBF's rights and obligations to the Counterparty related to the Transaction. Upon LBI's acceptance of this assignment effected at Counterparty's instruction, LBF will be released from any and all obligations to the Counterparty under the Transaction. CIRRUS LOGIC INC. By:________________________ Title:_______________________ Assignment accepted as of the ___ day of _______, _____ LEHMAN BROTHERS INC. By:________________________ Title:_______________________ Assignment Instruction Pursuant to the Transaction bearing LBF Reference Number N00020269 (the "Transaction"), Cirrus Logic Inc. (the "Counterparty") hereby instructs Lehman Brothers Finance S.A. ("LBF") to assign to Lehman Brothers Inc. or its permitted assigns ("LBI"), all of LBF's rights and obligations to the Counterparty related to the Transaction. Upon LBI's acceptance of this assignment effected at Counterparty's instruction, LBF will be released from any and all obligations to the Counterparty under the Transaction. CIRRUS LOGIC INC. By:________________________ Title:_______________________ Assignment accepted as of the ___ day of _______, _____ LEHMAN BROTHERS INC. By:________________________ Title:_______________________ Revised 06-Mar-00 As of February 18, 2000 As of February 18, 2000 Transaction Cirrus Logic Inc. Attention: Robert Fay Telephone: 512-912-3864 Facsimile: 512-445-6332 Master Number: 021400CILO LBF Reference Number: N00020332 Global Deal Id: 48131 Effort Id: 111689 Dear Sir or Madam: The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Option Transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. The definitions and provisions contained in the 1991 ISDA Definitions (the "Swap Definitions") and the 1996 ISDA Equity Derivatives Definitions (the "Equity Definitions", and together with the Swap Definitions, the "Definitions"), in each case as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event if any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern. This Confirmation evidences a complete binding agreement between Lehman Brothers Finance S.A. ("Party A") and Cirrus Logic Inc. ("Party B") as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement (the "Master Agreement") in the form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of, and be subject to that agreement that will govern all Transactions entered into between Party A and Party B. All provisions contained or incorporated by reference in that agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents (each a "Confirmation") confirming transactions entered into between us and referring to the ISDA Form, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule) on the Trade Date of the first such transaction between us. In the event of any inconsistency between the provisions of that agreement, or the Master Agreement when executed, and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. The terms of the Transaction to which this Confirmation relates are as follows: General Terms: Agent: Lehman Brothers Inc. ("LBI") is acting as agent on behalf of Party A for this Transaction. LBI has no obligations, by guarantee, endorsement or otherwise, with respect to the performance of this Transaction by Party A. Trade Date: February 18, 2000 Option Style: European Option Type: Call Seller: Party B Buyer: Party A Shares: Phone.com, Inc. (the "Issuer") (ticker symbol: PHCM) Number of Options: 62,500 Option Entitlement: 1 Share(s) per Option Multiple Exercise: Inapplicable Strike Price: USD135 Premium: USD805,000 Premium Payment Date: Party A shall deliver the Premium to Party B on the earlier of (i) the Expiration Date; or (ii) the date on which Party B delivers the Independent Amount to Party A (estimated to be no later than February 24, 2000) Exchange(s): Nasdaq NMS Related Exchange(s): Not Applicable Clearance System: The relevant Clearance System for the Shares Procedure for Exercise: Expiration Time: The Valuation Time Expiration Date: March 23, 2000 Automatic Exercise: Applicable Reference Price: The last traded price per Share quoted by the Exchange. Settlement Terms: Physical Settlement: Applicable Failure to Deliver: Applicable Dividends: If, at any time during the period from and including the Trade Date to but excluding the Expiration Date, an ex-dividend date occurs with respect to the Shares, then the cash dividend amount corresponding to that ex-dividend date shall accrue interest at the prevailing LIBOR rate with a designated maturity which most closely approximates the number of days from and including the ex-dividend date to and including the Expiration Date, and shall be added to the Settlement Price. Adjustments: Method of Adjustment: Calculation Agent Adjustment Extraordinary Events: Consequences of Merger Events: (a) Share- for-Share: Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. (b) Share- for-Other: Cancellation and Payment (c) Share- for-Combined: Cancellation and Payment with respect to the Other Consideration, and with respect to the New Shares, Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. Nationalization or Insolvency: Cancellation and Payment Collateral: Party A and Party B agree that this provision is a Pledge Agreement between them with respect to this Transaction until the execution of a pledge agreement with respect to all Transactions in the form of an ISDA Credit Support Annex to the Agreement. Paragraphs one through twelve of the Credit Support Annex are hereby incorporated by reference herein except to the extent such provision is affected by an election of paragraph 13 not set forth herein. Independent Amount: On February 24, 2000, Party B shall deliver to Party A, as the Independent Amount for this Transaction, registered, freely tradable Shares in an amount equal to the Number of Options multiplied by the Option Entitlement. Notwithstanding any provision to the contrary contained in the Agreement, Party A shall have no obligation to return the shares posted as the Independent Amount to Party B until this Transaction is fully and finally terminated. Failure by Party B to deliver the Independent Amount to Party A by February 24, 2000 shall constitute an Additional Termination Event under the Agreement, with Party B as the sole Affected Party. Rehypothecation: Party B hereby agrees that Party A shall have the right, after February 24, 2000, to use the Collateral pledged and delivered by Party B hereunder in the manner set forth in Paragraph 6(c) of the 1994 ISDA Credit Support Annex to the Agreement. Party B acknowledges that Party A and its affiliates may realize profits or other benefits in connection with transactions involving the Collateral authorized under this section and agrees that Party A shall not be accountable to Party B therefor. Other Provisions: Party B Representatio ns: Party B represents that (i) it is not entering into this Transaction on behalf of or for the accounts of any other person or entity, and will not transfer or assign its obligations under this Transaction or any portion of such obligations to any other person or entity except in compliance with applicable laws and the terms of this Transaction; (ii) it has provided to LBI, as agent for Party A, financial and other information concerning its investment objectives and risk tolerance, which information is contained in its LBI account documentation, and has not been rendered misleading or obsolete; (iii) it understands that this Transaction is subject to complex risks which may arise without warning, may at times be volatile, and that losses may occur quickly and in unanticipated magnitude; (iv) it is authorized to enter into this Transaction and such action does not violate any laws of its jurisdiction of organization or residence (including, but not limited to, any applicable position or exercise limits set by any self-regulatory organization, either acting alone or in concert with others) or the terms of any agreement to which it is a party; (v) it has consulted with its legal advisor(s) and has reached its own conclusions about this Transaction, and any legal, regulatory, tax, accounting or economic consequences arising from this Transaction; and (vi) it has concluded that this Transaction is suitable in light of its own investment objectives, financial capabilities and expertise. Party B further represents that (a) it is not an "affiliate" of the Issuer, as such term is defined in Regulation 230.144(a)(1) under the Securities Act of 1933, nor is it a counterparty entering into this Transaction on behalf of the Issuer or any affiliate thereof; and (b) it is not entering into this Transaction while in possession of material non-public information concerning the business, operations or prospects of the Issuer(s). "Material" information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold any securities of the Issuer(s). Neither Party A nor any of its affiliates has advised Party B with respect to any legal, regulatory, tax, accounting or economic consequences arising from this Transaction, and neither Party A nor any of its affiliates is acting as agent (other than LBI as dual agent if specified above), or advisor for Party B in connection with this Transaction. Assignment Provision: Notwithstanding any terms or conditions set forth herein to the contrary, at any time from and including the Trade Date to but excluding the Exercise Date, Party B may instruct Party A to assign this Transaction to Lehman Brothers Inc. or its permitted assigns ("LBI"), in accordance with the attached form of instruction or other similar form, and Party A hereby undertakes to transfer to LBI, before exercise, its contractual obligations hereunder, including any and all obligations related to the settlement of this Transaction. Party A shall be released from any and all obligations to Party B hereunder upon LBI's acceptance of such obligations pursuant to the assignment effected at Party B's instruction. Offices: Inapplicable Governing Law: The laws of the State of New York (without reference to choice of law doctrine) Transfer: Neither party may transfer this Transaction, in whole or in part, without the prior written consent of the non-transferring party, which consent shall not be unreasonably withheld. In addition, either party may assign this Transaction to an affiliated entity of such party whose obligations in respect of such assignment are guaranteed by the transferor party, or, if the transferor's obligations under this Transaction are guaranteed, by the guarantor of such transferor party's obligations. Notwithstanding the foregoing, any assignment hereunder shall not be permitted if, as a result thereof, a payment becomes subject to any deduction or withholding for or on account of any tax which would not have arisen had such assignment not been effected. Calculation Agent: LBI, whose determinations and calculations shall be binding in the absence of manifest error. Party A agrees to provide the following Credit Support Document: Guarantee of Lehman Brothers Holdings Inc. (unconditional guarantee to Party B of the due and punctual payment of all amounts payable by Party A under this Transaction as such payments become due and payable). Party B agrees to execute the following Credit Support Document: Credit Support Annex "THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY OTHER UNITED STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS." Please confirm your agreement with the foregoing by executing this Confirmation and returning it to us at facsimile number 201-524-2080, Attention: Documentation. Yours sincerely, Confirmed as of the date first above written: LEHMAN BROTHERS FINANCE S.A. CIRRUS LOGIC INC. By: ________________________ Name: Title: Execution time will be furnished upon Counterparty's written request. Assignment Instruction Pursuant to the Transaction bearing LBF Reference Number N00020332 (the "Transaction"), Cirrus Logic Inc. (the "Counterparty") hereby instructs Lehman Brothers Finance S.A. ("LBF") to assign to Lehman Brothers Inc. or its permitted assigns ("LBI"), all of LBF's rights and obligations to the Counterparty related to the Transaction. Upon LBI's acceptance of this assignment effected at Counterparty's instruction, LBF will be released from any and all obligations to the Counterparty under the Transaction. CIRRUS LOGIC INC. By:________________________ Title:_______________________ Assignment accepted as of the ___ day of _______, _____ LEHMAN BROTHERS INC. By:________________________ Title:_______________________ Transaction Cirrus Logic Inc. Attention: Robert Fay Telephone: 512-912-3864 Facsimile: 512-445-6332 Master Number: 021400CILO LBF Reference Number: N00020333 Global Deal Id: 48129 Effort Id: 111688 Dear Sir or Madam: The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Option Transaction entered into between us on the Trade Date specified below (the "Transaction"). This letter agreement constitutes a "Confirmation" as referred to in the ISDA Master Agreement specified below. The definitions and provisions contained in the 1991 ISDA Definitions (the "Swap Definitions") and the 1996 ISDA Equity Derivatives Definitions (the "Equity Definitions", and together with the Swap Definitions, the "Definitions"), in each case as published by the International Swaps and Derivatives Association, Inc. ("ISDA")) are incorporated into this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity Definitions, the Equity Definitions will govern. In the event if any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern. This Confirmation evidences a complete binding agreement between Lehman Brothers Finance S.A. ("Party A") and Cirrus Logic Inc. ("Party B") as to the terms of the Transaction to which this Confirmation relates. In addition, you and we agree to use all reasonable efforts promptly to negotiate, execute and deliver an agreement (the "Master Agreement") in the form of the ISDA Master Agreement (Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as you and we will in good faith agree. Upon the execution by you and us of such an agreement, this Confirmation will supplement, form a part of, and be subject to that agreement that will govern all Transactions entered into between Party A and Party B. All provisions contained or incorporated by reference in that agreement upon its execution will govern this Confirmation except as expressly modified below. Until we execute and deliver that agreement, this Confirmation, together with all other documents (each a "Confirmation") confirming transactions entered into between us and referring to the ISDA Form, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if we had executed an agreement in such form (but without any Schedule) on the Trade Date of the first such transaction between us. In the event of any inconsistency between the provisions of that agreement, or the Master Agreement when executed, and this Confirmation, this Confirmation will prevail for the purpose of this Transaction. The terms of the Transaction to which this Confirmation relates are as follows: General Terms: Agent: Lehman Brothers Inc. ("LBI") is acting as agent on behalf of Party A for this Transaction. LBI has no obligations, by guarantee, endorsement or otherwise, with respect to the performance of this Transaction by Party A. Trade Date: February 18, 2000 Option Style: European Option Type: Call Seller: Party B Buyer: Party A Shares: Phone.com, Inc. (the "Issuer") (ticker symbol: PHCM) Number of Options: 62,500 Option Entitlement: 1 Share(s) per Option Multiple Exercise: Inapplicable Strike Price: USD140 Premium: USD668,750 Premium Payment Date: Party A shall deliver the Premium to Party B on the earlier of (i) the Expiration Date; or (ii) the date on which Party B delivers the Independent Amount to Party A (estimated to be no later than February 24, 2000) Exchange(s): Nasdaq NMS Related Exchange(s): Not Applicable Clearance System: The relevant Clearance System for the Shares Procedure for Exercise: Expiration Time: The Valuation Time Expiration Date: March 23, 2000 Automatic Exercise: Applicable Reference Price: The last traded price per Share quoted by the Exchange. Settlement Terms: Physical Settlement: Applicable Failure to Deliver: Applicable Dividends: If, at any time during the period from and including the Trade Date to but excluding the Expiration Date, an ex-dividend date occurs with respect to the Shares, then the cash dividend amount corresponding to that ex-dividend date shall accrue interest at the prevailing LIBOR rate with a designated maturity which most closely approximates the number of days from and including the ex-dividend date to and including the Expiration Date, and shall be added to the Settlement Price. Adjustments: Method of Adjustment: Calculation Agent Adjustment Extraordinary Events: Consequences of Merger Events: (a) Share- for-Share: Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. (b) Share- for-Other: Cancellation and Payment (c) Share- for-Combined: Cancellation and Payment with respect to the Other Consideration, and with respect to the New Shares, Alternative Obligation or Cancellation and Payment, at Party A's discretion, and Party A shall notify Party B of its election no later than two (2) Business Days prior to the Merger Date. Nationalization or Insolvency: Cancellation and Payment Collateral: Party A and Party B agree that this provision is a Pledge Agreement between them with respect to this Transaction until the execution of a pledge agreement with respect to all Transactions in the form of an ISDA Credit Support Annex to the Agreement. Paragraphs one through twelve of the Credit Support Annex are hereby incorporated by reference herein except to the extent such provision is affected by an election of paragraph 13 not set forth herein. Independent Amount: On February 24, 2000, Party B shall deliver to Party A, as the Independent Amount for this Transaction, registered, freely tradable Shares in an amount equal to the Number of Options multiplied by the Option Entitlement. Notwithstanding any provision to the contrary contained in the Agreement, Party A shall have no obligation to return the shares posted as the Independent Amount to Party B until this Transaction is fully and finally terminated. Failure by Party B to deliver the Independent Amount to Party A by February 24, 2000 shall constitute an Additional Termination Event under the Agreement, with Party B as the sole Affected Party. Rehypothecation: Party B hereby agrees that Party A shall have the right, after February 24, 2000, to use the Collateral pledged and delivered by Party B hereunder in the manner set forth in Paragraph 6(c) of the 1994 ISDA Credit Support Annex to the Agreement. Party B acknowledges that Party A and its affiliates may realize profits or other benefits in connection with transactions involving the Collateral authorized under this section and agrees that Party A shall not be accountable to Party B therefor. Other Provisions: Party B Representatio ns: Party B represents that (i) it is not entering into this Transaction on behalf of or for the accounts of any other person or entity, and will not transfer or assign its obligations under this Transaction or any portion of such obligations to any other person or entity except in compliance with applicable laws and the terms of this Transaction; (ii) it has provided to LBI, as agent for Party A, financial and other information concerning its investment objectives and risk tolerance, which information is contained in its LBI account documentation, and has not been rendered misleading or obsolete; (iii) it understands that this Transaction is subject to complex risks which may arise without warning, may at times be volatile, and that losses may occur quickly and in unanticipated magnitude; (iv) it is authorized to enter into this Transaction and such action does not violate any laws of its jurisdiction of organization or residence (including, but not limited to, any applicable position or exercise limits set by any self-regulatory organization, either acting alone or in concert with others) or the terms of any agreement to which it is a party; (v) it has consulted with its legal advisor(s) and has reached its own conclusions about this Transaction, and any legal, regulatory, tax, accounting or economic consequences arising from this Transaction; and (vi) it has concluded that this Transaction is suitable in light of its own investment objectives, financial capabilities and expertise. Party B further represents that (a) it is not an "affiliate" of the Issuer, as such term is defined in Regulation 230.144(a)(1) under the Securities Act of 1933, nor is it a counterparty entering into this Transaction on behalf of the Issuer or any affiliate thereof; and (b) it is not entering into this Transaction while in possession of material non-public information concerning the business, operations or prospects of the Issuer(s). "Material" information for these purposes is any information to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold any securities of the Issuer(s). Neither Party A nor any of its affiliates has advised Party B with respect to any legal, regulatory, tax, accounting or economic consequences arising from this Transaction, and neither Party A nor any of its affiliates is acting as agent (other than LBI as dual agent if specified above), or advisor for Party B in connection with this Transaction. Assignment Provision: Notwithstanding any terms or conditions set forth herein to the contrary, at any time from and including the Trade Date to but excluding the Exercise Date, Party B may instruct Party A to assign this Transaction to Lehman Brothers Inc. or its permitted assigns ("LBI"), in accordance with the attached form of instruction or other similar form, and Party A hereby undertakes to transfer to LBI, before exercise, its contractual obligations hereunder, including any and all obligations related to the settlement of this Transaction. Party A shall be released from any and all obligations to Party B hereunder upon LBI's acceptance of such obligations pursuant to the assignment effected at Party B's instruction. Offices: Inapplicable Governing Law: The laws of the State of New York (without reference to choice of law doctrine) Transfer: Neither party may transfer this Transaction, in whole or in part, without the prior written consent of the non-transferring party, which consent shall not be unreasonably withheld. In addition, either party may assign this Transaction to an affiliated entity of such party whose obligations in respect of such assignment are guaranteed by the transferor party, or, if the transferor's obligations under this Transaction are guaranteed, by the guarantor of such transferor party's obligations. Notwithstanding the foregoing, any assignment hereunder shall not be permitted if, as a result thereof, a payment becomes subject to any deduction or withholding for or on account of any tax which would not have arisen had such assignment not been effected. Calculation Agent: LBI, whose determinations and calculations shall be binding in the absence of manifest error. Party A agrees to provide the following Credit Support Document: Guarantee of Lehman Brothers Holdings Inc. (unconditional guarantee to Party B of the due and punctual payment of all amounts payable by Party A under this Transaction as such payments become due and payable). Party B agrees to execute the following Credit Support Document: Credit Support Annex "THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR ANY OTHER UNITED STATES FEDERAL OR STATE SECURITIES LAWS; SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS OR EXCEPT IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS." Please confirm your agreement with the foregoing by executing this Confirmation and returning it to us at facsimile number 201-524-2080, Attention: Documentation. Yours sincerely, Confirmed as of the date first above written: LEHMAN BROTHERS FINANCE S.A. CIRRUS LOGIC INC. By: ________________________ Name: Title: Execution time will be furnished upon Counterparty's written request. Assignment Instruction Pursuant to the Transaction bearing LBF Reference Number N00020333 (the "Transaction"), Cirrus Logic Inc. (the "Counterparty") hereby instructs Lehman Brothers Finance S.A. ("LBF") to assign to Lehman Brothers Inc. or its permitted assigns ("LBI"), all of LBF's rights and obligations to the Counterparty related to the Transaction. Upon LBI's acceptance of this assignment effected at Counterparty's instruction, LBF will be released from any and all obligations to the Counterparty under the Transaction. CIRRUS LOGIC INC. By:________________________ Title:_______________________ Assignment accepted as of the ___ day of _______, _____ LEHMAN BROTHERS INC. By:________________________ Title:_______________________ -----END PRIVACY-ENHANCED MESSAGE-----