-----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, Ij2YKGZ4XlnN+HiBX0WtXOqfgSvmTH0D2afeIaWpd5mG9kV0CnOS7UuIeTcrhZMj 5BJ/GfxOwyqsvgd0Mc2Q5Q== /in/edgar/work/0000800460-00-000011/0000800460-00-000011.txt : 20001115 0000800460-00-000011.hdr.sgml : 20001115 ACCESSION NUMBER: 0000800460-00-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA MICRO DEVICES CORP CENTRAL INDEX KEY: 0000800460 STANDARD INDUSTRIAL CLASSIFICATION: [3670 ] IRS NUMBER: 942672609 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15449 FILM NUMBER: 764631 BUSINESS ADDRESS: STREET 1: 215 TOPAZ ST CITY: MILPITAS STATE: CA ZIP: 95035-5430 BUSINESS PHONE: 4082633214 MAIL ADDRESS: STREET 1: 215 TOPAZ STREET STREET 2: 215 TOPAZ STREET CITY: MILPITAS STATE: CA ZIP: 95035-5430 10-Q 1 0001.txt United States 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 Period Ended September 30, 2000 or [ ] Transition Report Pursuant To Section 10 Or 15(d) Of The Securities Exchange Act Of 1934 For The Transition Period From ________ To _______ Commission File Number 0-15449 CALIFORNIA MICRO DEVICES CORPORATION ------------------------------------ (Exact name of registrant as specified in its charter) California 94-2672609 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 215 Topaz Street, Milpitas, California 95035-5430 -------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (408) 263-3214 -------------- (Registrant's telephone number, including area code) Not applicable --------------- (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 Applicable Only to Corporate Issuers Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: As of September 30, 2000, there were outstanding 11,254,706 shares of Issuer's Common Stock. CALIFORNIA MICRO DEVICES CORPORATION INDEX PART I. FINANCIAL INFORMATION --------------------- Page Number ----------- Item 1. Financial Statements Statements of Operations Three and Six Months Ended September 30, 2000 and 1999 2 Balance Sheets September 30, 2000 and March 31, 2000 3 Statements of Cash Flows Six Months Ended September 30, 2000 and 1999 4 Notes to Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Item 3. Quantitative and Qualitative Disclosure About Market Risk 9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 6. Exhibits and Reports on Form 8-K 11 Signature 11 ii ITEM 1. Financial Statements. --------------------- CALIFORNIA MICRO DEVICES CORPORATION STATEMENTS OF OPERATIONS (Amounts in Thousands, Except Per Share Data) (Unaudited) Three Months Ended Six Months Ended September 30, September 30, ------------------ ---------------- 2000 1999 2000 1999 ------- -------- ------ ------- Net sales $16,112 $ 9,438 $30,988 $17,955 Cost and expenses: Cost of sales 10,725 6,639 20,325 12,849 Research and development 900 769 1,710 1,727 Selling, marketing and administrative 2,857 2,032 5,663 4,149 ------- ------- ------- ------- Total costs and expenses 14,482 9,440 27,698 18,725 ------- ------- ------- ------- Operating income (loss) 1,630 (2) 3,290 (770) Other expense, net 380 127 543 304 ------- ------- ------- ------- Income (loss) before income taxes 1,250 (129) 2,747 (1,074) Provision for income taxes 25 - 55 - ------- ------- ------- ------- Net income (loss) $ 1,225 $ (129) $ 2,692 $(1,074) Net earnings/(loss) per share - basic $ 0.11 $(0.01) $ 0.24 $(0.11) ======== ======= ======= ======= Net earnings/(loss) per share - diluted $ 0.10 $(0.01) $ 0.22 $(0.11) ======== ======= ======= ======= Weighted average common shares and share equivalents outstanding - basic 11,197 10,154 11,151 10,136 ======== ======= ======= ======= Weighted average common shares and share equivalents outstanding - diluted 12,517 10,154 12,476 10,136 ======== ======= ======= =======
The accompanying notes are an integral part of these financial statements. 2 CALIFORNIA MICRO DEVICES CORPORATION BALANCE SHEETS (Amounts in Thousands, Except Share Data) September 30, March 31, 2000 2000* ------------- --------- (Unaudited) ASSETS: Current assets: Cash and short-term securities $ 2,249 $ 1,490 Short-term investments 6,170 5,069 Accounts receivable, less allowance for doubtful accounts of $220 and $219 8,674 8,875 Inventories 10,496 9,994 Prepaid expenses and other assets 1,049 980 -------- -------- Total current assets 28,638 26,408 Property, plant & equipment, net 12,334 10,637 Restricted cash 985 902 Other long term assets 1,123 1,139 -------- -------- Total assets $ 43,080 $ 39,086 ======== ======== LIABILITIES & SHAREHOLDERS' EQUITY: Current liabilities: Accounts payable $ 4,297 $ 4,821 Accrued salaries and benefits 1,590 1,097 Other accrued liabilities 473 742 Deferred margin on shipments to distributors 516 516 Current maturities of long-term debt and capital lease obligations 804 815 -------- -------- Total current liabilities 7,680 7,991 Long-term debt, less current maturities 8,189 7,342 Capital lease obligations, less current maturities 630 793 -------- -------- Total liabilities 16,499 16,126 Shareholders' equity: Common stock - no par value; authorized 25,000,000; issued and outstanding September 30 and March 31, 2000: 11,254,706 and 11,037,543, respectively 57,411 56,479 Accumulated deficit (30,836) (33,528) Accumulated other comprehensive income 6 9 -------- -------- Total shareholders' equity 26,581 22,960 -------- -------- Total liabilities and shareholders' equity $ 43,080 $ 39,086 ======== ========
*Derived from audited financial statements. The accompanying notes are an integral part of these financial statements. 3 CALIFORNIA MICRO DEVICES CORPORATION STATEMENTS OF CASH FLOWS (Amounts in Thousands) (Unaudited) Six Months Ended September 30, ---------------- 2000 1999 ------ ------ Cash flows from operating activities: Net income (loss) $ 2,692 $ (1,074) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,468 1,467 Net increase in inventories (502) (309) Net decrease /(increase) in accounts receivable 201 (1,450) Net increase in prepaid expenses and other current assets (69) (440) Net (decrease)/increase in trade accounts payable and other current liabilities (300) 564 Net decrease/(increase) in other long term assets 10 (8) Decrease in deferred margin on distributor sales - (60) ------- ------- Net cash provided by (used in) operating activities 3,500 (1,310) ------- ------- Cash flows from investing activities: Short-term investment purchases (5,453) (1,247) Short-term investment sales 4,348 2,040 Capital expenditures (3,157) (252) Net change in restricted cash (83) (68) ------- ------- Net cash (used in) provided by investing activities (4,345) 473 ------- ------- Cash flows from financing activities: Repayments of capital lease obligations (204) (155) Repayments of long-term debt (127) (82) Borrowing of long-term debt 1,003 - Proceeds from issuance of common stock 932 312 ------- ------- Net cash provided by financing activities 1,604 75 ------- ------- Net increase/(decrease) in cash and cash equivalents 759 (762) Cash and cash equivalents at beginning of period 1,490 762 ------- ------- Cash and cash equivalents at end of period $ 2,249 $ - ======= ======= Supplemental disclosures of cash flow information: Interest paid $ 483 $ 448 Income taxes paid $ - $ 1 Supplemental disclosures of non-cash investing and financing activities: Unrealized loss on securities $ (3) $ (4)
The accompanying notes are an integral part of these financial statements. 4 CALIFORNIA MICRO DEVICES CORPORATION Notes to Financial Statements 1. Basis of Presentation --------------------- In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (which include only normal recurring accruals) necessary to present fairly California Micro Devices Corporation's (the "Company") financial position as of September 30, 2000, results of operations for the three and six month periods ended September 30, 2000 and 1999, and cash flows for the six-month periods ended September 30, 2000 and 1999. Results for the quarter are not necessarily indicative of fiscal year results. The condensed financial statements should be read in conjunction with the financial statements included with the Company's annual report on Form 10-K for the fiscal year ended March 31, 2000. 2. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. Inventories ----------- The components of inventory consist of the following (amounts in thousands): September 30, March 31, 2000 2000 ------------- ------------ Raw materials $ 553 $ 452 Work-in-process 6,696 6,473 Finished goods 3,247 3,069 ------- ------- $10,496 $ 9,994
4. Litigation ---------- We are a party to lawsuits, claims, investigations, and proceedings, including commercial and employment matters, which are being handled and defended in the ordinary course of business. We are not aware of any pending or threatened legal proceedings against the Company that, individually or in the aggregate, would have a material adverse effect on our business, operating results, or financial condition. 5 5. Earnings (Loss) Per Share ------------------------- The following table sets forth the computation of basic and diluted income (loss) per share: (In thousands, except per share amounts) Three Months Ended Six Months Ended September 30 September 30 ------------------ ---------------- 2000 1999 2000 1999 ------- ------- ------- ------- Numerator: Numerator for basic and diluted net income per share - net income (loss) $ 1,225 $ (129) $ 2,692 $(1,074) Denominator for basic net income (loss) per share: Weighted average common shares used in computing basic net income (loss) per share 11,197 10,154 11,151 10,136 ------- ------- ------- ------- Basic net income (loss) per share $ 0.11 $ (0.01) $ 0.24 $ (0.11) ------- ------- ------- ------- Denominator for diluted net income per share: Weighted average common shares 11,197 10,154 11,151 10,136 Employee stock options to purchase common stock 1,320 - 1,325 - ------- ------- ------- ------- Shares used in computing diluted net income per share 12,517 10,154 12,476 10,136 ------- ------- ------- ------- Diluted net income (loss) per share $ 0.10 $ (0.01) $ 0.22 $ (0.11) ------- ------- ------- -------
Options to purchase 9,000 shares of common stock were outstanding during the quarter ended September 30, 2000, but were not included in the computation of diluted net income per share because the options' exercise price was greater than the average market price of the common stock and, therefore, the effect would be antidilutive. Options to purchase 819,158 shares of common stock were outstanding during the three months ended September 30, 1999, but were not included in the computation of diluted net loss per share as the Company incurred a net loss and the effect of the securities would have been antidilutive. 6. Comprehensive Income -------------------- Comprehensive income (loss) for the three and six months ended September 30, 2000 was $1,213,000 and $2,680,000, respectively and the three and six months ended September 30, 1999 was ($184,000) and ($1,076,000), respectively. 7. Income Taxes ------------ For the three and six months ended September 30, 2000, the Company recorded a provision for income taxes of $35,000 and $55,000, respectively, based on the projected effective annual tax rate of 2%. The effective tax rate for fiscal 2001 is substantially below the federal statutory rate of 35% due to the utilization of federal and state tax loss and credit carryforwards. No similar amounts were recorded for the three and six ended September 30, 1999 due to the Company's net loss during the period. The Company's tax provision consisted of federal and state alternative minimum taxes. 6 ITEM 2. Management's Discussion And Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations. ---------------------- Results of Operations Product sales for the quarter ended September 30, 2000, increased by $6,674,000 or 71%, compared to the quarter ended September 30, 1999, with the largest component of the increase being in products for the networking market. Unit shipments increased 101% to 35.9 million units in the September 30, 2000 quarter compared to 17.9 million units in the year-earlier quarter. The increase in product sales was primarily due to increased sales of new products. Sales of the Company's new products (products introduced within the past three years) increased by 101% in dollars and 170% in units in the quarter ended September 30, 2000 as compared to the year-earlier quarter. Thin film products accounted for 68% of dollar sales and 76% of units shipped for the quarter ended September 30, 2000 as compared to 72% of dollar sales and 79% of units shipped the year-earlier quarter. The decline in percentage of thin film units shipped was primarily due to increased mix of single chip products, and lower mix of dual chip products for solving the need for parallel port filtering, termination and ESD protection. In total the number of parallel port solutions shipped increased by 160% in the quarter ended September 30, 2000 as compared to the year-earlier period. Product sales for the six months ended September 30, 2000, increased by $13,033,000 or 73%, compared to the six months ended September 30, 1999, with the largest component of the increase being in products for the networking market. Unit shipments increased 100% to 64.8 million units in six months ended September 30, 2000 compared to 32.4 million units in the year-earlier quarter. The increase in product sales was primarily due to increased sales of new products. Sales of the Company's new products increased by 104% in dollars and 155% in units in the six months ended September 30, 2000 as compared to the year-earlier quarter. Thin film products accounted for 66% of dollar sales and 72% of units shipped for the six months ended September 30, 2000 as compared to 68% of dollar sales and 75% of units shipped the year-earlier period. The decline in percentage of thin film units shipped was primarily due to increased mix of single chip products, and lower mix of dual chip products for solving the need for parallel port filtering, termination and ESD protection. In total the number of parallel port solutions shipped increased by 129% in the six months ended September 30, 2000 as compared to the year-earlier period. Gross margins increased to 33.4% in the September 30, 2000 quarter compared to 29.7% in the year-earlier period and to 34.4% for the six months ended September 30, 2000 compared to 28.4% in the year-earlier period, in each case due to increased sales and manufacturing efficiencies. Research and development (R&D) expense was $900,000 and $769,000 for the quarters ended September 30, 2000 and 1999, respectively. The increase in research and development expense was due to increased personnel costs as the focus of R&D was more on product development than on process development compared to the year-earlier period. R&D expense for the six months ended September 30, 2000 and 1999 was $1,710,000 and $1,727,000, respectively, as increased personnel costs were offset by decreased materials cost. Selling, marketing and administrative expenses were $2,857,000 and $2,032,000 for the quarters ended September 30, 2000 and 1999, respectively and $5,663,000 and $4,149,000 for the six months ended September 30, 2000 and 1999, respectively. The increases in the fiscal 2001 periods are primarily due to increased commissions, increased personnel costs, and increased promotional activities, including expansion of the Company's presence in the Far East and Europe. As a result of the factors discussed above, operating income for the quarter ended September 30, 2000, was $1,630,000 compared to an operating loss of $2,000 in the year-earlier quarter and operating income for the six months ended September 30, 2000 was $3,290,000 compared to an operating loss of $770,000 for the year-earlier period. Other expense, net for the quarter ended September 30, 2000 and 1999, was $380,000 and $127,000, respectively, and for the six months ended September 30, 2000 and 1999, was $543,000 and $304,000, respectively. The increases in the fiscal 2001 periods were primarily due to was to the write-off of $250,000 7 of expenses related to a secondary offering of the Company's stock that was withdrawn in September 2000, due to market conditions. Income tax expense of $25,000 for the quarter ended September 30, 2000 and $55,000 for the six months then ended are provisions for estimated corporate alternative minimum taxes, which are not covered by the Company's tax loss carry forward. No income taxes were accrued for the three months and six months ended September 30, 1999, due to the availability of tax loss carry forwards. Liquidity and Capital Resources Total cash, short-term securities and investments as of September 30, 2000, was $8.4 million compared to $6.6 million on March 31, 2000. Receivables decreased to $8.7 million at September 30, 2000 compared to $8.9 million six months earlier. Receivables days sales outstanding were 48.5 days as of September 30, 2000 as compared to 56 days at March 31, 2000. Inventories increased slightly from the March quarter, with inventory turns improving to 4.1 turns compared to 3.5 at March 31, 2000. Capital expenditures totaled $3.2 million, reflecting our investment in new equipment to increase production and to support our production of chip scale products, which are expected to ramp up later this year. These expenditures were partially offset by additional long term debt financing of $1.0 million. We have a $3.0 million revolving secured line of credit agreement that expires on June 30, 2001. Under the terms of the line of credit, we can borrow at prime plus one-half percent, collateralized by eligible receivables. We have made no borrowings against this line. We also have a $1.0 million capital equipment financing facility that expires on July 31, 2003; under the terms of this facility we can borrow at prime plus 0.75%. As of September 30, 2000 we had borrowed $1.0 million against this capital equipment financing facility. On April 21, 2000 we secured an additional $500,000 capital equipment financing facility under the same terms and conditions of the original facility. The new line expires on August 31, 2003. As of September 30, 2000, we had borrowed $203,000 against this $500,000 facility. On July 27, 2000 we secured an additional $2.0 million equipment financing facility that expires on December 25, 2003. Under the terms of this facility we can borrow at prime plus 0.5%; there are no borrowings against this line. We are in compliance with our financial covenants. We expect to fund our future liquidity needs through existing cash balances, cash flows from operations, bank borrowings, and equipment lease and loan financing arrangements. Depending on market conditions and the results of operations, we may pursue other sources of liquidity. We believe we have sufficient financial resources to fund our operations for at least the next eighteen months. Impact of the Year 2000 We have experienced no material impact on our operations as a result of the Year 2000 issue. Problems relating to the Year 2000 issue could still arise, but we do not believe that they will have a material adverse effect on our financial condition or results of operations. The Company considers its operations to be Year 2000 functional and ready to support its customers, however we continue to monitor our systems to watch for any potential issues in the future. Market Risk The Company owns financial instruments that are sensitive to market risks as part of its investment portfolio. The investment portfolio is used to preserve our cash until it is required to fund operations and capital investments. None of these market-risk sensitive instruments are held for trading purposes except for amounts related to our non-qualified deferred compensation program. We do not own derivative financial instruments in our investment portfolio. The investment portfolio contains instruments that are subject to fluctuation in interest rates. 8 Our investment portfolio includes debt instruments that are primarily United States government bonds, high-grade corporate bonds and money market funds of less than one year in duration. These investments are subject to interest rate risk, and could decline in value if interest rates increase. Our investment portfolio also consists of certain commercial paper that is also subject to interest rate risk. Due to the short duration and conservative nature of these instruments, we do not believe that we have a material exposure to interest rate risk. The interest rates on nearly all of our long-term debt and capital lease obligations are fixed and therefore not subject to interest rate fluctuations. Cautionary Statement This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended. Except for the historical information contained in this discussion of the business and the discussion and analysis of financial condition and results of operations, the matters discussed herein are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward- looking statements regarding revenues, orders, and sales involve a number of risks and uncertainties, including but not limited to, demand for the Company's product, pricing pressures which could affect the Company's gross margin or the ability to consummate sales, unit volumes, intense competition within the industry, the Company's ability to attract and retain high quality people, the need for the Company to keep pace with technological developments and respond quickly to changes in customer needs, the Company's dependence on third party suppliers for components for its products, cost reductions, year 2000 issues, and the Company's dependence upon intellectual property rights which, if not available to the Company, could have a material adverse effect on the Company. These same factors, as well as others, such as the continuing litigation involving the Company, could also affect the liquidity needs of the Company. Actual results could differ materially from those projected in the forward-looking statements as a result of factors set forth above and elsewhere in this Form 10-Q. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk ---------------------------------------------------------- See discussion under the caption "Market Risk" in Item 2 above. 9 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. ------------------ We are a party to lawsuits, claims, investigations, and proceedings, including commercial and employment matters, which are being handled and defended in the ordinary course of business. We are not aware of any pending or threatened legal proceedings against the Company that, individually or in the aggregate, would have a material adverse effect on our business, operating results, or financial condition. ITEM 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- The Company's annual meeting of stockholders, at which the proposals described below were submitted to stockholders, was held on August 1, 2000. Proposal No. 1 Election of Directors. The following individuals, who - ------------- received the votes indicated, were elected as directors: NAME FOR WITHHELD ----------------- --------- --------- Dr. Angel Jordan 8,392,911 1,313,773 Jeffrey Kalb 8,217,627 1,489,057 J. Daniel McCranie 8,394,252 1,312,432 Wade Meyercord 8,394,052 1,312,632 Stuart Schube 8,393,965 1,312,719 Dr. John Sprague 8,387,132 1,319,552 Donald Waite 8.393,682 1,313,002
Proposal No. 2 The proposal to ratify the appointment of Ernst & Young LLP, - -------------- as the Company's independent auditors for the current fiscal year was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- ------- -------- 8,728,044 968,332 10,308 Proposal No. 3 The proposal to approve the amendment of the 1995 Employee - -------------- Stock Option Plan was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- --------- -------- 7,822,730 1,861,251 22,703 Proposal No. 4 The proposal to approve the Amendment of the 1995 Non- - -------------- Employee Directors' Stock Option Plan was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- --------- -------- 8,115,297 1,542,923 48,464 10 ITEM 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibits 3.1 Articles of Incorporation, as amended (filed as an exhibit to the Registrants' Annual Report on Form 10- K for the fiscal year ended March 31, 1995 and incorporated herein by reference). 3.2 By-Laws, as amended (filed as an exhibit to the Registrants' Annual Report on Form 10-K for the fiscal year ended march 31, 1995 and incorporated herein by reference). 4.1 1995 Employee Stock Option Plan amended as of July 26, 1996, amended as of July 18, 1997, amended as of August 7, 1998, and amended as of August 1, 2000. 4.2 1995 Non-Employee Directors' Stock Option Plan, amended as of July 26, 1996, amended as of July 18, 1997, amended as of August 7, 1998, and amended as of August 1, 2000. 10.11 Amended Commitment Letter from Comerica Bank. 27.1 Financial Data Schedule (for EDGAR filing only). (b) Reports on Form 8-K None. SIGNATURE 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 thereunto duly authorized. CALIFORNIA MICRO DEVICES CORPORATION ------------------------------------ (Registrant) Date: November 14, 2000 /s/John E. Trewin ------------------------------------------ John E. Trewin Vice President and Chief Financial Officer 11 Exhibit 4.1 CALIFORNIA MICRO DEVICES CORPORATION 1995 EMPLOYEE STOCK OPTION PLAN AMENDED AS OF JULY 26, 1996, AMENDED AS OF JULY 18, 1997, AMENDED AS OF AUGUST 7, 1998, and AMENDED AS OF AUGUST 1, 2000 1. PURPOSE. The purpose of the CALIFORNIA MICRO DEVICES CORPORATION 1995 Employee Stock Option Plan (the "Plan") is to advance the interests of the Corporation and its shareholders by providing a means by which the Corporation and its Subsidiaries shall be able to attract and retain qualified employees and consultants. 2. DEFINITIONS. (a) "Affiliate" shall mean any corporation (other than the Corporation) in an unbroken chain of corporations that includes the Corporation if each of such corporations, other than the last corporation in the chain, owns at least 50% of the total voting power of one of the other corporations. (b) "Affiliated Group" shall mean an affiliated group of corporations, as defined in Code Section 1504, which includes the Corporation. (c) "Board" shall mean the Board of Directors of the Corporation. (d) "Code" shall mean the Internal Revenue Code of 1986, as amended. (e) "Committee" shall mean the committee appointed by the Board, in accordance with Section 3(a) hereof, to administer the Plan. (f) "Common Stock" shall mean the voting common stock of the Corporation. (g) "Consultant" shall mean any person who, or any employee of any firm which, is engaged by the Company or any Affiliate to render consulting services. (h) "Corporation" shall mean CALIFORNIA MICRO DEVICES CORPORATION, a California corporation. (i) "Effective Date" shall mean February 10, 1995. (j) "Employee" shall mean any individual who is employed, within the meaning of Section 3401 of the Code and the regulations thereunder, by the Corporation or by any Affiliate. For purposes of the Plan and only for purposes of the Plan, and in regard to Nonstatutory Stock Options but not for Incentive Stock Options, a Consultant of the Corporation or any Affiliate shall be deemed to be an Employee, and service as a Consultant with the Corporation or any Affiliate shall be deemed to be employment, but no Incentive Stock Option shall be granted to a Consultant who is not an employee of the Corporation or any Affiliate within the meaning of Section 3401 of the Code and the regulations thereunder. In the case of a Consultant, the provisions governing when a termination of employment has occurred for purposes of the Plan shall be set forth in the written stock option agreement between the Optionee and the corporation, or, if not so set forth, the Committee shall have the discretion to determine when a termination of "employment" has occurred for purposes of the Plan. (k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (l) "Exercise Price" shall mean the price per Share at which an Option may be exercised, as determined by the Committee and as specified in the Optionee's stock option agreement. 12 (m) "Fair Market Value" shall mean the value of one Share of Common Stock, determined as follows: (i) if the Shares are traded on an exchange or on the NASDAQ National Market System, the reported "closing price" on the date of valuation or if no trading occurred on such date, the next preceding day on which trading occurred; (ii) if the Shares are traded over-the-counter on the NASDAQ System (other than on the NASDAQ National Market System), the mean between the bid and the ask prices on said System at the close of business on the date of valuation or if no trading occurred on such date, the next preceding day on which trading occurred; and (iii) if neither (i) nor (ii) applies, the fair market value as determined by the Committee in good faith. Such determination shall be conclusive and binding on all persons. (n) "Incentive Stock Option" shall mean an Option of the type described in Section 422(b) of the Code. (o) "Nonstatutory Stock Option" shall mean an Option of the type not described in Section 422(b) or 423(b) of the Code. (p) "Option" shall mean an option to purchase Common Stock granted pursuant to the Plan. (q) "Optionee" shall mean any person who holds an Option pursuant to the Plan. (r) "Outside Director" shall mean a nonemployee member of the Board who (1) is not a current employee of any member of the Affiliated Group; (2) does not receive compensation for prior services (other than benefits under a taxqualified retirement plan) from any member of the Affiliated Group during a taxable year in which he or she serves on the Committee; (3) has never been an officer of any member of the Affiliated Group; and (4) does not receive remuneration from any member of the Affiliated Group, either directly or indirectly, in any capacity other than as a director. (s) "Plan" shall mean this stock option plan as it may be amended from time to time. (t) "Purchase Price" shall mean at any particular time the Exercise Price times the number of Shares for which an Option is being exercised. (u) "Share" shall mean one share of authorized Common Stock. 3. ADMINISTRATION. (a) The Committee. The Plan shall be administered by a Committee of Outside Directors which shall consist of not less than two members, who during the one year prior to service as an administrator of the Plan, shall not have been granted or awarded equity securities pursuant to the Plan or any other plan of the Corporation or any of its Affiliates except as permitted under Rule 16b3 under the Exchange Act. The Board may from time to time designate individuals as ineligible to participate in the Plan for a specified period in order to become eligible to be a member of the Committee. (b) Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its discretion and on behalf of the Corporation: (i) to grant Options; (ii) to determine the Exercise Price per Share of Options to be granted; (iii) to determine the Employees to whom, and the time or times at which, Options shall be granted and the number of Shares for which an Option will be exercisable; (iv) to interpret the Plan; (v) to prescribe, amend, and rescind rules and regulations relating to the Plan; (vi) to determine the terms and provisions of each Option granted and, with the consent of the holder thereof, modify or amend each Option; (vii) to accelerate or defer, with the consent of the Optionee, the exercise date of any Option; 13 (viii) to authorize any person to execute on behalf of the Corporation any instrument required to effectuate the grant of an Option previously granted by the Committee; (ix) with the consent of the Optionee, to reprice, cancel and regrant, or otherwise adjust the Exercise Price of an Option previously granted by the Committee; and (x) to make all other determinations deemed necessary or advisable for the administration of the Plan. (c) Board's Determination of Fair Market Value. The Board shall have the authority to determine, upon review of relevant information, the Fair Market Value of the Common Stock, subject to the provisions of the Plan and irrespective of whether the Board has appointed a Committee to administer the Plan. The Board may delegate this authority to the Committee. (d) Committee's Interpretation of the Plan. The interpretation and construction by the Committee of any provision of the Plan or of any Option granted hereunder shall be final and binding on all parties claiming an interest in an Option granted under the Plan. No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Option. 4. PARTICIPATION. (a) Eligibility. The Optionees shall be such persons as the Committee may select from among the Employees, provided that Consultants are not eligible to receive Incentive Stock Options. Nonemployee members of the Board are not eligible for grants of Options. (b) Ten Percent Shareholders. Any Employee who owns Stock possessing more than 10% of the total combined voting power of all classes of outstanding stock of the Corporation or any Affiliate shall not be eligible to receive an Option unless: (i) the Exercise Price of the Shares subject to such Option when granted is at least 110% of the Fair Market Value of such Shares, and (ii) such Option by its terms is not exercisable after the expiration of five years from the date of grant. (c) Stock Ownership. For purposes of Paragraph 4(b), in determining stock ownership, an employee shall be considered as owning the stock owned, directly or indirectly, by or for his or her brothers and sisters, spouse, ancestors, and lineal descendants. Stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by or for its shareholders, partners, or beneficiaries, respectively. Stock with respect to which such Employee or any other person holds an option shall be disregarded. (d) Outstanding Stock. For purposes of Section 4(b), the term "outstanding stock" shall include all stock actually issued and outstanding immediately after the grant of the Option to the Optionee but shall not include any share for which an Option is exercisable by any person. 5. STOCK. (a) Shares Subject to This Plan. The aggregate number of Shares which may be issued upon exercise of Options under the Plan shall not exceed Three million One Hundred Fifty-Five Thousand (3,1555,000), subject to adjustment pursuant to Section 9 hereof. (b) Options Not to Exceed Shares Available. The number of Shares for which an Option is exercisable at any time shall not exceed the 14 number of Shares remaining available for issuance under the Plan. If any Option expires or is terminated, the number of Shares for which such Option was exercisable may be made exercisable pursuant to other Options under the Plan. The limitations established by this Section 5(b) shall be subject to adjustment in the manner provided in Section 9 hereof upon the occurrence of an event specified therein. (c) Limitation on Grants. No person shall be granted in any one fiscal year options for more than 500,000 Shares. 6. TERMS AND CONDITIONS OF OPTIONS. (a) Stock Option Agreements. Options shall be evidenced by written stock option agreements between the Optionee and the Corporation in such form as the Committee shall from time to time determine. No Option or purported Option shall be a valid and binding obligation of the Corporation unless so evidenced in writing. (b) Number of Shares. Each stock option agreement shall state the number of Shares for which the Option is exercisable and shall provide for the adjustment thereof in accordance with Section 9 hereof. (c) Vesting. An Optionee may not exercise his or her Option for any Shares until the Option, in regard to such Shares, has vested. Each stock option agreement shall include a vesting schedule which shall show when the Option becomes exercisable. The vesting schedule shall not impose upon the Corporation or any Affiliate any obligation to retain the Optionee in its employ or under contract for any period or otherwise change the employment at will status of an Optionee who is an employee of the Corporation or any Affiliate. (d) Lapse of Options. Each stock option agreement shall state the time or times when the Option covered thereby lapses and becomes unexercisable in part or in full. An Option shall lapse on the earliest of the following events (unless otherwise determined by the Committee and reflected in an option agreement): (i) The tenth anniversary of the date of granting the Option; (ii) The first anniversary of the Optionee's death; (iii) The first anniversary of the date the Optionee ceases to be an Employee due to total and permanent disability, within the meaning of Section 22(e)(3) of the Code; (iv) On the date provided in Section 6(h)(i), unless with respect to a Nonstatutory Stock Option, the Committee otherwise extends such period before the applicable expiration date; (v) On the date provided in Section 9 for a transaction described in such Section; (vi) The date the Optionee files or has filed against him or her a petition in bankruptcy; or (vii) The expiration date specified in an Optionee's stock option agreement. (e) Exercise Price. Each stock option agreement shall state the Exercise Price for the Shares for which the Option is exercisable. Subject to Section 4(b), the Exercise Price of an Incentive Stock Option and a Nonstatutory Stock Option shall, when granted, be not less than 100% and 85% of the Fair Market Value of the Shares for which the Option is exercisable, respectively, and not less than the par value of the Shares. (f) Medium and Time of Payment. The Purchase Price shall be payable in full in cash upon the exercise of an Option but the Committee may allow the Optionee to pay the Purchase Price: (i) by surrendering Shares in good form for transfer, owned by the Optionee and having a Fair Market Value on the date of exercise equal to the Purchase Price; (ii) by delivery of a full recourse promissory note ("Note") made by the Optionee in the amount of the Purchase Price, bearing interest, compounded semiannually, at a rate not less than the rate determined under Section 7872 of the Code to insure that no "foregone interest", as defined in such section, will accrue, together with the delivery of a duly executed standard form security agreement securing the Note by a pledge of the Shares purchased; or 15 (iii) in any combination of such consideration or such other consideration and method of payment for the issuance of Shares to the extent permitted under applicable law Code as long as the sum of the cash so paid, the Fair Market Value of the Shares so surrendered, and the amount of any Note equals the Purchase Price. The Committee or a stock option agreement may prescribe requirements with respect to the exercise of Options, including the submission by the Optionee of such forms and documents as the Committee may require and, the delivery by the Optionee of cash sufficient to satisfy applicable withholding requirements. The Committee may vary the exercise requirements and procedures from time to time to facilitate, for example, the broker assisted exercise of Options. (g) Nontransferability of Options. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee or the Optionee's conservator or legal representative and shall not be assignable or transferable except pursuant to a qualified domestic relations order as defined by the Code. In the event of the Optionee's death, the Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution. (h) Termination of Employment Other than by Death or Disability. (i) If an Optionee ceases to be an Employee for any reason other than his or her death or disability, the Optionee shall have the right, subject to the provisions of this Section 6, to exercise any Option held by the Optionee at any time within ninety (90) days after his or her termination of employment, but not beyond the otherwise applicable term of the Option and only to the extent that on such date of termination of employment the Optionee's right to exercise such Option had vested. (ii) For purposes of this Section 6(h), the employment relationship shall be treated as continuing intact while the Optionee is an active employee of the Corporation or any Affiliate, or is on military leave, sick leave, or other bona fide leave of absence to be determined in the sole discretion of the Committee. The preceding sentence notwithstanding, in the case of an Incentive Stock Option, employment shall be deemed to terminate on the date the Optionee ceases active employment with the Corporation or any Affiliate, unless the Optionee's reemployment rights are guaranteed by statute or contract. (i) Death of Optionee. If an Optionee dies while an Employee, or after ceasing to be an Employee but during the period while he or she could have exercised an Option under Section 6(h), any Option granted to the Optionee may be exercised, to the extent it had vested at the time of death and subject to the Plan, at any time within 12 months after the Optionee's death, by the executors or administrators of his or her estate or by any person or persons who acquire the Option by will or the laws of descent and distribution, but not beyond the otherwise applicable term of the Option. (j) Disability of Optionee. If an Optionee ceases to be an Employee due to becoming totally and permanently disabled within the meaning of Section 22(e)(3) of the Code, any Option granted to the Optionee may be exercised to the extent it had vested at the time of cessation and, subject to the Plan, at any time within 12 months after the Optionee's termination of employment, but not beyond the otherwise applicable term of the Option. (k) Rights as a Shareholder. An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder of the Corporation with respect to any Shares for which his or her Option is exercisable until the date of the issuance of a stock certificate for such Shares. No adjustment shall be made for dividends, ordinary or extraordinary or whether in currency, securities, or other property, distributions, or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 9 hereof. (l) Modification, Extension, and Renewal of Options. Within the limitations of the Plan, the Committee may modify, extend or renew outstanding Options or accept the cancellation of outstanding Options for the granting of new Options in substitution therefor. Notwithstanding the preceding sentence, no modification of an Option shall, without the consent of the Optionee, alter or impair any rights or obligations under any Option previously granted. 16 (m) Other Provisions. The stock option agreements authorized under the Plan may contain such other provisions which are not inconsistent with the terms of the Plan, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable. 7. $100,000 PER YEAR LIMITATION ON VESTING OF ISOs. To the extent that the Fair Market Value of Shares (determined for each Share as of the date of grant of the Option covering such Share) subject to Options granted under this Plan (or any other plan of the Corporation or any Affiliate) which are designated as Incentive Stock Options and which become exercisable by an Optionee for the first time during a single calendar year exceeds $100,000, the Option(s) (or portion thereof) covering such Shares shall be recharacterized (to the extent of such excess over $100,000) as a Nonstatutory Stock Option. In determining which Option(s) shall be treated as Nonstatutory Stock Options under the preceding sentence, the Options shall be taken into account in the order granted, with the result that a later granted Option shall be recharacterized as a Nonstatutory Stock Option prior to such recharacterization of a previously granted Option. 8. TERM OF PLAN. Options may be granted pursuant to the Plan until ten years following the Effective Date, and all Options which are outstanding on such date shall remain in effect until they are exercised or expire by their terms. The Plan shall expire for all purposes on the date 20 years following the Effective Date. 9. RECAPITALIZATION, TAKEOVERS, AND LIQUIDATIONS. (a) Reorganizations. The number of Shares covered by the Plan, as provided in Section 5 hereof, and the number of Shares for which each Option is exercisable shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from the payment of a Common Stock dividend, a stock split, a reverse stock split or any other event which results in an increase or decrease in the number of issued Shares effected without receipt of consideration by the Corporation, and the Exercise Price shall be proportionately increased in the event the number of Shares subject to such Option are decreased and shall be proportionately decreased in the event the number of Shares subject to such Option are increased. For the purposes of this paragraph, conversion of any convertible securities of the Corporation shall not be deemed to have been "effected without receipt of consideration." Adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. (b) Liquidation. In the event of the dissolution or liquidation of the Corporation, each Option shall terminate immediately prior to the consummation of such action. The Committee shall notify the Optionee not less than fifteen (15) days prior to the proposed consummation of a pending dissolution or liquidation, and the Option shall be exercisable as to all Shares which are vested prior to expiration until immediately prior to the consummation of such action. (c) Merger. In the event of a merger or acquisition involving an acquisition of the Corporation or an acquisition by the Corporation of another company, the result of which is that the outstanding voting securities of the Corporation do not represent, or are not converted into, a majority of the outstanding voting securities of the surviving corporation, except as otherwise provided in any particular Option agreement, the vesting of all unvested Options shall be accelerated and all options shall be immediately exercisable. Without limiting the generality of the foregoing, in the event of (i) a proposed merger of the Corporation with or into another corporation, as a result of which the Corporation is not the surviving corporation and (ii) the Option is not assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation, then in such case each Option shall terminate immediately prior to the consummation 17 of such transaction. The Committee shall notify the Optionee not less than fifteen (15) days prior to the proposed consummation of such transaction, and the Option shall be exercisable as to all Shares which are subject to the Option until immediately prior to the consummation of such transaction. (d) Determination by Committee. All adjustments described in this Section 9 shall be made by the Committee, whose determination shall be conclusive and binding on all persons. (e) Limitation on Rights of Optionee. Except as expressly provided in this Section 9, no Optionee shall have any rights by reason of any payment of any stock dividend, stock split or reverse stock split or any other increase or decrease in the number of shares of stock of any class, or by reason of any reorganization, consolidation, dissolution, liquidation, merger, exchange, split-up or reverse split-up, or spin-off of assets or stock of another corporation. Any issuance by the Corporation of Shares, Options or securities convertible into Shares or Options shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of the Shares for which an Option is exercisable. Notwithstanding the foregoing, if the Corporation shall enter into a transaction affecting the Corporation's capital stock or distributions to the holders of its capital stock for which a revision in the terms of each Option is not required pursuant to this Section 9, the Committee shall have the right, but not the obligation, to revise the terms of each Option in a manner the Committee, in its sole discretion, deems fair and reasonable given the transaction involved. If necessary or appropriate in connection with such transaction, the Committee may declare that any Option shall terminate as of a date fixed by the Committee and give each Optionee the right to exercise his Option in whole or in part, including exercise as to Shares to which the Option would not otherwise be exercisable. (f) No Restriction on Rights of Corporation. The grant of an Option shall not affect or restrict in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. 10. SECURITIES LAW REQUIREMENTS. The Corporation shall not be under any obligation to issue any Shares upon the exercise of any Option unless and until the Corporation has determined that: (i) it and the Optionee have taken all actions required to register the Shares under the Securities Act of 1933, or to perfect an exemption from the registration requirements thereof; (ii) any applicable listing requirement of any stock exchange on which the Common Stock is listed has been satisfied; and (iii) all other applicable provisions of state and Federal law have been satisfied. 11. EXERCISE OF UNVESTED OPTIONS. The Committee may grant any Optionee the right to exercise any Option prior to the complete vesting of such Option. Without limiting the generality of the foregoing, the Committee may provide that if an Option is exercised prior to having completely vested, the Shares issued upon such exercise shall remain subject to vesting at the same rate as under the Option so exercised and shall be subject to a right, but not an obligation, of repurchase by the Corporation with respect to all unvested Shares if the Optionee ceases to be an Employee for any reason. For the purposes of facilitating the enforcement of any such right of repurchase, at the request of the Committee, the Optionee shall enter into the Joint Escrow Instructions with the Corporation and deliver every certificate for his or her unvested Shares with a stock power executed in blank by the Optionee and by the Optionee's spouse, if required for transfer. 12. AMENDMENT OF THE PLAN. The Board or the Committee may, from time to time, terminate, suspend or discontinue the Plan, in whole or in part, or revise or amend it in any respect whatsoever including, but not limited to, the adoption of any amendment(s) deemed necessary or advisable to qualify the Options under rules and regulations promulgated by the Securities and Exchange Commission with respect to Employees who are subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended, or to correct any defect or 18 supply any omission or reconcile any inconsistency in the Plan or in any Option granted thereunder, without approval of the shareholders of the Corporation, but without the approval of the Corporation's shareholders, no such revision or amendment shall: (i) Increase the number of Shares subject to the Plan, other than any increase pursuant to Section 9; (ii) Materially modify the requirements as to eligibility for participation in the Plan; (iii) Materially increase the benefits accruing to Optionees under the Plan; (iv) Extend the term of the Plan; or (v) Amend this Section to defeat its purpose. No amendment, termination or modification of the Plan shall affect any Option theretofore granted in any material adverse way without the consent of the Optionee. 13. APPLICATION OF FUNDS. The proceeds received by the Corporation from the sale of Common Stock pursuant to the exercise of an Option shall be used for general corporate purposes. 14. APPROVAL OF SHAREHOLDERS. The Plan shall be subject to approval by the affirmative vote of the holders of a majority of all classes of the outstanding shares present and entitled to vote at the first meeting of shareholders of the Corporation following the adoption of the Plan or by written consent, and in no event later than one (1) year following the Effective Date. Prior to such approval, Options may be granted but shall not be exercisable. Any amendment described in Section 12 (i) to (iv) shall also be subject to approval by the Corporation's shareholders. 15 WITHHOLDING OF TAXES. In the event the Corporation or a Affiliate determines that it is required to withhold Federal, state, or local taxes in connection with the exercise of an Option or the disposition of Shares issued pursuant to the exercise of an Option, the Optionee or any person succeeding to the rights of the Optionee, as a condition to such exercise or disposition, may be required to make arrangements satisfactory to the Corporation or the Affiliate to enable it to satisfy such withholding requirements. 16. RIGHTS AS AN EMPLOYEE. Neither the Plan nor any Option granted pursuant thereto shall be construed to give any person the right to remain in the employ of the Corporation or any Affiliate, or to affect the right of the Corporation or any Affiliate to terminate such individual's employment at any time with or without cause. The grant of an Option shall not entitle the Optionee to, or disqualify the Optionee from, participation in the grant of any other Option under the Plan or participation in any other benefit plan maintained by the Corporation or any Affiliate. 17. DISAVOWAL OF REPRESENTATIONS, UNDERTAKINGS OR CREATION OF IMPLIED RIGHTS. In adopting and maintaining this Plan and granting options hereunder, neither the Corporation nor any Affiliate makes any representations or undertakings with respect to the initial qualification or treatment of Options under federal or state tax or securities laws. The Corporation and each Affiliate expressly disavows the creation of any rights in Employees, Optionees, or beneficiaries of any obligations on the part of the Corporation, any Affiliate or the Committee, except as expressly provided herein. 18. INSPECTION OF RECORDS. Copies of the Plan, records reflecting each Optionee's Option, and any other documents and records which an Optionee is entitled by law to inspect shall be open to inspection by the Optionee and his or her duly 19 authorized representative at the office of the Committee at any reasonable business hour. 19 INFORMATION TO OPTIONEES. Each Optionee shall be provided with such information regarding the Corporation as the Committee from time to time deems necessary or appropriate; provided however, that each Optionee shall at all times be provided with such information as is required to be provided from time to time pursuant to applicable regulatory requirements, including, but not limited to, any applicable requirements of the Securities and Exchange Commission, the California Department of Corporations and other state securities agencies. 20 EXHIBIT 4.2 CALIFORNIA MICRO DEVICES CORPORATION 1995 NONEMPLOYEE DIRECTORS' STOCK OPTION PLAN AMENDED AS OF JULY 26, 1996, AMENDED AS OF JULY 18, 1997, AMENDED AS OF AUGUST 7, 1998, AND AMENDED AS OF AUGUST 1, 2000 1. PURPOSE. The purpose of the CALIFORNIA MICRO DEVICES CORPORATION NonEmployee Directors' Stock Option Plan (the "Plan") is to secure for the Corporation and its shareholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors (the "Board") of the Corporation who are not employees of the Corporation or any of its subsidiaries. 2. DEFINITIONS. (a) "Board" shall mean the board of directors of the Corporation. (b) "Code" shall mean the Internal Revenue Code of 1986, as amended. (c) "Committee" shall mean the committee appointed by the Board to administer the Plan, or if no such committee is appointed, by the Board. (d) "Common Stock" shall mean the voting common stock, of the Corporation. (e) "Corporation" shall mean CALIFORNIA MICRO DEVICES CORPORATION, a California corporation. (f) "Director" shall mean a member of the Board. (g) "Effective Date" shall mean February 10, 1995. (h) "Exercise Price" shall mean the price per Share at which an Option may be exercised, as determined by the Committee and as specified in the Optionee's stock option agreement. (i) "Fair Market Value" shall mean for any day the average of the closing bid and asked prices of the Stock in the over-the-counter market, as reported through the National Association of Securities Dealers ("NASD") Automated Quotation System or, if the Stock is listed or admitted to trading on the Nasdaq National Market System or any national securities exchange or if the last reported sale price of such Stock is generally available, the last reported sale price on such system or exchange. The Fair Market Value for any day for which there is no such bid and asked or last reported sales price shall be the Fair Market Value of the next preceding day for which there is such a price. (j) "NonEmployee Director" shall mean a Director who is not an employee of the Corporation or any of its subsidiaries. (k) "Option" shall mean an option to purchase Common Stock granted pursuant to the Plan. (l) "Optionee" shall mean any person who holds an Option pursuant to the Plan. (m) "Plan" shall mean the CALIFORNIA MICRO DEVICES CORPORATION 1995 NonEmployee Directors' Stock Option Plan, as it may be amended from time to time. (n) "Purchase Price" shall mean at any particular time the Exercise Price times the number of Shares for which an Option is being exercised. 21 (o) "Share" shall mean one share of authorized Common Stock. 3. ADMINISTRATION. a) The Committee. The Plan shall be administered by a Committee which shall consist of not less than three members of the Board. (b) Powers of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its discretion and on behalf of the Corporation shall, subject to the provisions of the Plan, grant Options and shall have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Committee in the administration of the Plan, as described herein, shall be final and conclusive. No member of the Committee shall be liable for anything done or omitted to be done by such member or by any other member of the Committee in connection with the Plan, except for such member's own willful misconduct or as expressly provided by statute. 4. PARTICIPATION. Each NonEmployee Director shall be eligible to receive Options in accordance with the Plan. The adoption of this Plan shall not be deemed to give any director any right to be granted an option to purchase Common Stock of the Corporation, except to the extent and upon such terms and conditions are provided herein. 5. STOCK. (a) Shares Subject to This Plan. The aggregate number of Shares which may be issued upon exercise of Options under the Plan shall not exceed Three Hundred and Twenty Thousand (320,000) subject to adjustment pursuant to Section 8 hereof. (b) Options Not to Exceed Shares Available. The number of Shares for which an Option is exercisable at any time shall not exceed the number of Shares remaining available for issuance under the Plan. If any Option expires or is terminated, the number of Shares for which such Option was exercisable may be made exercisable pursuant to other Options under the Plan. The limitations established by this Section 5 shall be subject to adjustment in the manner provided in Section 8 hereof upon the occurrence of an event specified therein. 6. TERMS AND CONDITIONS OF OPTIONS. (a) Stock Option Agreements. Options shall be evidenced by written stock option agreements between the Optionee and the Corporation in such form as the Committee shall from time to time determine. No Option or purported Option shall be a valid and binding obligation of the Corporation unless so evidenced in writing. (b) Number of Shares. Each stock option agreement shall state the number of Shares for which the Option is exercisable in accordance with the following and shall provide for the adjustment thereof in accordance with Section 8 hereof. (i) Upon adoption of this Plan by the Board, and subject to the approval of the Plan by the Shareholders of the Corporation in accordance with Section 14 hereof, each NonEmployee Director then in office shall, without further action required, be granted an Option for the purchase of Ten Thousand (10,000) Shares. Each other person appointed or elected to serve as a NonEmployee director during the term of this Plan shall be granted an option for Fifteen Thousand (15,000) Shares upon his or her appointment or election. (ii) Subject to the approval of the Plan by the Shareholders of the Corporation in 22 accordance with Section 14 hereof, each year, as of the date of the Annual Meeting of Shareholders of the Corporation, each NonEmployee Director who has been elected or reelected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting (other than any Non- Employee Director eligible for a grant pursuant to paragraph (b)(i)) shall automatically receive an Option for Ten Thousand (10,000) shares of Common Stock. (c) Vesting. An Optionee may not exercise his or her Option for any Shares until the NonEmployee Director has served one year as a member of the Board since the date the option was granted. An Optionee may exercise the Option as to one fourth of the Shares at the end of the 4th full calendar quarter following the date the Option was granted and as to an additional 1/16th of the Shares at the end of each of the full calendar quarter commencing with the 5th full calendar quarter following the date the Option was granted. The right to exercise the Option shall be cumulative. An Optionee may buy all, or from time to time any part, of the maximum number of shares which are exercisable under the an Option, but in no case may Optionee exercise the Option with regard to a fraction of a share, or for any share for which the Stock Option is not exercisable. (d) Lapse of Options. Each stock option agreement shall state the time or times when the Option covered thereby lapses and becomes unexercisable in part or in full. An Option shall lapse on the earliest of the following events (unless otherwise determined by the Committee and reflected in an option agreement): (i) The tenth anniversary of the date of granting the Option; (ii) The first anniversary of the Optionee's death; (iii) he first anniversary of the date the Optionee ceases to be a Director due to total and permanent disability, within the meaning of Section 22(e)(3) of the Code; (iv) Ninety (90) days after the Optionee ceases to be a Director for any reason other than his or her death or total and permanent disability; (v) The date the Optionee files or has filed against him or her a petition in bankruptcy; or (vi) The expiration date specified in an Optionee's stock option agreement. (e) Exercise Price. Each stock option agreement shall state the Exercise Price for the Shares for which the Option is exercisable. The Exercise Price of all Options shall be the Fair Market Value of the Shares for which the Option is exercisable, and not less than the par value of the Shares. (f) Medium and Time of Payment. The Purchase Price shall be payable in full in cash upon the exercise of an Option but the Committee may allow the Optionee to pay the Purchase Price: (i) by surrendering Shares in good form for transfer, owned by the Optionee and having a Fair Market Value on the date of exercise equal to the Purchase Price; (ii) by delivery of a full recourse promissory note ("Note") made by the Optionee in the amount of the Purchase Price, bearing interest, compounded semiannually, at a rate not less than the rate determined under Section 7872 of the Code to insure that no "unstated interest", as defined in such section will accrue, together with the delivery of a duly executed standard form security agreement securing the Note by a pledge of the Shares purchased; or (iii) in any combination of such consideration or such other consideration and method of payment for the issuance of Shares to the extent permitted under applicable law as long as the sum of the cash so paid, the Fair Market Value of the Shares so surrendered, and the amount of any Note equals the Purchase Price. The Committee or a stock option agreement may prescribe requirements with respect to the exercise of Options, including the submission by the Optionee of such forms and documents as the Committee may require and the delivery by the Optionee of cash sufficient to satisfy applicable withholding requirements. The Committee may vary the exercise requirements and procedures from time to time to facilitate, for example, the broker-assisted exercise of Options. (g) Nontransferability of Options. During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee or 23 the Optionee's conservator or legal representative and shall not be assignable or transferable except pursuant to a qualified domestic relations order as defined by the Code. In the event of the Optionee's death, the Option shall not be transferable by the Optionee other than by will or the laws of descent and distribution. (h) Termination of Directorship Other than by Death or Disability. If an Optionee ceases to be a Director for any reason other than his or her death or disability, the Optionee shall have the right, subject to the provisions of this Section 6, to exercise any Option held by the Optionee at any time within ninety (90) days after his or her termination as a Director, but not beyond the otherwise applicable term of the Option and only to the extent that on such date of termination as a Director the Optionee's right to exercise such Option had vested. (i) Death of Optionee. If an Optionee dies while a Director, or after ceasing to be a Director but during the period while he or she could have exercised an Option under Section 6(h) hereof, any Option granted to the Optionee may be exercised, to the extent it had vested at the time of death and subject to the Plan, at any time within twelve (12) months after the Optionee's death, by the executors or administrators of his or her estate or by any person or persons who acquire the Option by will or the laws of descent and distribution, but not beyond the otherwise applicable term of the Option. (j) Disability of Optionee. If an Optionee ceases to be a Director due to becoming totally and permanently disabled within the meaning of Section 22(e)(3) of the Code, any Option granted to the Optionee may be exercised to the extent it had vested at the time of cessation and, subject to the Plan, at any time within twelve (12) months after the termination of Optionee's position as a Director, but not beyond the otherwise applicable term of the Option. (k) Rights as a Shareholder. An Optionee, or a transferee of an Optionee, shall have no rights as a shareholder of the Corporation with respect to any Shares for which his or her Option is exercisable until the date of the issuance of a stock certificate for such Shares. No adjustment shall be made for dividends, ordinary or extraordinary or whether in currency, securities, or other property, distributions, or other rights for which the record date is prior to the date such stock certificate is issued, except as provided in Section 8 hereof. (l) Other Provisions. The stock option agreements authorized under the Plan may contain such other provisions which are not inconsistent with the terms of the Plan, including, without limitation, restrictions upon the exercise of the Option, as the Committee shall deem advisable. 7. TERM OF PLAN. Options may be granted pursuant to the Plan until ten (10) years following the Effective Date, and all Options which are outstanding on such date shall remain in effect until they are exercised or expire by their terms. The Plan shall expire for all purposes on the date twenty (20) years following the Effective Date. 8. REORGANIZATIONS. (a) Reorganizations. The number of Shares covered by the Plan, as provided in Section 5 hereof, and the number of Shares for which each Option is exercisable shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from the payment of a Common Stock dividend, a stock split, a reverse stock split or any other event which results in an increase or decrease in the number of issued Shares effected without receipt of consideration by the Corporation, and the Exercise Price shall be proportionately increased in the event the number of Shares subject to such Option are decreased and shall be proportionately decreased in the event the number of Shares subject to such Option are increased. Adjustments shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason 24 thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. (b) Liquidation. In the event of the dissolution or liquidation of the Corporation, each Option shall terminate immediately prior to the consummation of such action. The Committee shall notify the Optionee not less than fifteen (15) days prior to the proposed consummation of a pending dissolution or liquidation, and the Option shall be exercisable as to all Shares which are vested prior to expiration until immediately prior to the consummation of such action. (c) Merger. In the event of a merger or acquisition involving an acquisition of the Corporation or an acquisition by the Corporation of another company, the result of which is that the outstanding voting securities of the Corporation do not represent, or are not converted into, a majority of the outstanding voting securities of the surviving corporation, except as otherwise provided in any particular Option agreement, the vesting of all unvested Options shall be accelerated and all options shall be immediately exercisable. Without limiting the generality of the foregoing, in the event of (i) a proposed merger of the Corporation with or into another corporation, as a result of which the Corporation is not the surviving corporation and (ii) the Option is not assumed or an equivalent option substituted by the successor corporation or a parent or subsidiary of the successor corporation, then in such case each Option shall terminate immediately prior to the consummation of such transaction. The Committee shall notify the Optionee not less than fifteen (15) days prior to the proposed consummation of such transaction, and the Option shall be exercisable as to all Shares subject to such Option until immediately prior to the consummation of such transaction. (d) Determination by Committee. All adjustments described in this Section 8 shall be made by the Committee, whose determination shall be conclusive and binding on all persons. (e) Limitation on Rights of Optionee. Except as expressly provided in this Section 8, no Optionee shall have any rights by reason of any payment of any stock dividend, stock split or reverse stock split or any other increase or decrease in the number of shares of stock of any class, or by reason of any reorganization, consolidation, dissolution, liquidation, merger, exchange, split-up or reverse split-up, or spin-off of assets or stock of another corporation. Any issuance by the Corporation of Shares, Options or securities convertible into Shares or Options shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of the Shares for which an Option is exercisable. (f) No Restriction on Rights of Corporation. The grant of an Option shall not affect in any way the right or power of the Corporation to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or to dissolve, liquidate, sell, or transfer all or any part of its business or assets. 9. SECURITIES LAW REQUIREMENTS. (a) Legality of Issuance. No Share shall be issued upon the exercise of any Option unless and until the Corporation has determined that: (i) The Corporation and the Optionee have taken all actions required to exempt the issuance of the Shares from the registration requirements under the Securities Act of 1933, as amended (the "Act"), or the Corporation and the Optionee shall determine that the registration requirements of the Act do not apply to such exercise; (ii) Any applicable listing requirement of any stock exchange on which the Common Stock is listed has been satisfied; and (iii) Any other applicable provision of state or Federal law has been satisfied. (b) Restrictions on Transfer; Representations of Optionee; Legends. Regardless of whether the offering and sale of Shares has been registered under the Act or has been registered or qualified under the securities laws of any state, the Corporation may impose 25 restrictions upon the sale, pledge, or other transfer of such Shares, including the placement of appropriate legends on stock certificates, if, in the judgment of the Corporation and its counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Act, the securities laws of any state, or any other law. If the sale of Shares is not registered under the Act and the Corporation shall determine that the registration requirements of the Act apply to such sale, but an exemption is available which requires an investment representation or other representation, the Optionee shall be required, as a condition to purchasing Shares by exercise of his or her Option, to represent that such Shares are being acquired for investment, and not with a view to the sale or distribution thereof, except in compliance with the Act, and to make such other representations as are deemed necessary or appropriate by the Corporation and its counsel. Stock certificates evidencing Shares acquired pursuant to an unregistered transaction to which the Act applies shall bear such restrictive legends as are required or deemed advisable under the Plan or the provisions of any applicable law. Any determination by the Corporation and its counsel in connection with any of the matters set forth in this section shall be conclusive and binding on all persons. (c) Registration or Qualification of Securities. The Corporation may, but shall not be obligated to, register or qualify the sale of Shares under the Act or any other applicable law. (d) Exchange of Certificates. If, in the opinion of the Corporation and its counsel, any legend placed on a stock certificate representing Shares sold hereunder is no longer required, the Optionee or the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but lacking such legend. 10. AMENDMENT OF THE PLAN. The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable including, but not limited to amendments necessary to qualify for any exemption or to comply with applicable law or regulations, provided, however, that except as provided in Section 8, the Board may not, without further approval by the shareholders of the Corporation, materially increase the number of shares of Common Stock as to which Options may be granted under the Plan, materially increase the benefits accruing to Participants under the Plan or materially modify the requirements as to eligibility for Participants in the Plan. No amendment of the Plan shall materially and adversely affect any right of any Optionee with respect to any Option theretofore granted without such Optionee's written consent. The Plan may not be amended more frequently than once every six months with respect to the number of shares subject to Options granted to members of the Board of Directors, the timing of such Option grants and the determination of the exercise price of such Options other than to comport with changes in the Code, the Employee Retirement Security Act, or the rules thereunder. Notwithstanding anything to the contrary contained herein, this Plan shall not be amended except in accordance with the provisions of Rule 16b3(c) under the Securities Exchange Act of 1934, as amended, or any successor rule thereto. 11. APPLICATION OF FUNDS. The proceeds received by the Corporation from the sale of Common Stock pursuant to the exercise of an Option shall be used for general corporate purposes. 12. APPROVAL OF SHAREHOLDERS. The Plan shall be subject to approval by the affirmative vote of the holders of a majority of all classes of the outstanding shares present and entitled to vote at the first meeting of shareholders of the Corporation following the adoption of the Plan, and in no event later than one (1) year following the Effective Date. Prior to such approval, Options may be granted but shall not be exercisable. 26 13. WITHHOLDING OF TAXES. In the event the Corporation or a Subsidiary determines that it is required to withhold Federal, state, or local taxes in connection with the exercise of an Option or the disposition of Shares issued pursuant to the exercise of an Option, the Optionee or any person succeeding to the rights of the Optionee, as a condition to such exercise or disposition, may be required to make arrangements satisfactory to the Corporation or the Subsidiary to enable it to satisfy such withholding requirements. 14. RIGHTS AS A DIRECTOR. Neither the Plan nor any Option granted pursuant thereto shall be construed to give any person the right to remain as a Director of the Corporation or any Subsidiary. 27 Exhibit 10.11 Amended Commitment Letter from Comerica Bank November 13, 2000 John Trewin Chief Financial Officer California Micro Devices Corp. 215 Topaz Street Milpitas, CA 95035 Dear John, This letter serves to outline the commitment made by Comerica Bank - California ("Bank") to California Micro Devices Corp. ("Borrower") and documented on July 27, 2000 which renewed the $3,000,000 revolving line of credit and established a new $2,000,000 equipment loan. FACILITY #1 TYPE/AMOUNT: - ------------ $3,000,000 revolving secured accounts receivable line of credit including a within line facility for letters of credit up to $500,000. PURPOSE: For short term operating needs and for letters of credit. - -------- ADVANCE: - -------- 75% of eligible receivables. Ineligible accounts are contra, foreign not covered by a letter of credit or credit insurance acceptable to the Bank, affiliated, employee, government, consignment, C.O.D., over 90 day accounts, all accounts from companies which have more than 25% of its accounts over 90 days past due as well as account concentrations in excess of 20% of the total. The facility will be non-formula until the utilization, including letters of credit, exceed $1,000,000. PRICING: - -------- Prime rate plus .50%. $11,500 commitment fee. REPAYMENT: - ---------- Interest is to be paid monthly. Principal is limited to the borrowing base and is due at maturity. EXPIRATION: - ----------- 6/30/2001. Documentary and Standby Letters of Credit are not to expire after the line expiration. If the line of credit is not renewed then the letters of credit outstanding are to be cash secured. SECURITY: - --------- Perfected first security interest in all of borrower's assets (unencumbered fixed assets) and other intangibles. Borrower is to not have a second lien on its assets. Borrower is not to pledge its intellectual property or grant a non-pledge of its intellectual property to another party. FACILITY #2 TYPE/AMOUNT: - ------------ $2,000,000 Equipment Loan. PURPOSE: - -------- To provide financing for acceptable capital equipment. ADVANCE: - -------- 100% of the purchase price of acceptable fixed assets, less soft costs such as tax, installation, warranty etc. 28 PRICING: - -------- Prime rate plus 0.5%. Up front commitment fee ($5,000). REPAYMENT: - -------- Interest only payments during a nine month drawdown period. Amortization is to begin when drawdowns reach $250,000 consisting of 36 equal principal payments with interest added. EXPIRATION: - ----------- Drawdown period: to end 12/25/2000. Loan maturity: 12/25/2003. SECURITY: - --------- Perfected first security interest in all of borrower's assets (unencumbered fixed assets) and other intangibles. Borrower is to not have a second lien on its assets. Borrower is not to pledge its intellectual property or grant a non-pledge of its intellectual property to another party. New facility to be cross collateralized and cross defaulted with the existing facility. OTHER CONDITIONS: - ----------------- This credit facility will be governed by the existing Revolving Credit Loan and Security Agreement with the following covenants: 1) Borrower is to maintain the following financial covenants at all times: a) Minimum monthly quick ratio of 1.25 (excludes restricted cash). b) Maximum total liabilities to tangible net worth of 1.0. c) Minimum tangible net worth of $20,000,000 increasing by 75% of quarterly profits and by 100% of any new equity and/or subordinated debt raised and return of restricted cash. (TNW excludes restricted cash) d) Borrower is to achieve quarterly profitability. Borrower may have one loss quarter per fiscal year with a maximum loss of $250,000 with no two consecutive quarterly losses. e) (New) Minimum quarterly debt service covenant of 1.5 beginning with the quarter ending 03/31/00 defined as follows (on a rolling two quarter basis): NPAT + Depreciation + Amortization ---------------------------------- current principal payments on all long term debt 2) Borrower to provide Bank with: a) Monthly financial statements within twenty (20) days of month end if borrowing. b) Annual unqualified CPA audited financial statements with ninety (90) days of FYE. c) Monthly borrowing base certificate, accounts receivable, and payable agings within 15 days of month end if utilization exceeds $1,000,000. 4 Quarterly borrowing base certificate, accounts receivable, and payables agings within 15 days of quarter end if utilization exceeds $1,000,000. e) Budgets, sell through reports, projections or other financial exhibits which Bank may reasonably request. f) Satisfactory disclosure of status of legal actions against Borrower. 3) Without Bank's prior written approval, Borrower will not: a) Pledge assets other than to the Bank except for purchase money (lease) transactions. b) Enter into any other direct borrowings, lend money or enter into guarantees. c) Enter into any merger or acquisition. d) Repurchase stock, declare or pay cash dividends. e) Make capital expenditures or lease equipment (purchase money transactions) in excess of $7,000,000 per year. 4) Bank will have the right to audit the Borrower's financial records. Audit costs are for the account of the Borrower and are on a semi-annual schedule. 5) Borrower is to provide evidence of full risk insurance covering all assets pledged to the Bank and loss payable endorsement naming lender as loss payee. 29 6) There shall be a cross default provision between this credit and any existing or future credit arrangements. 7) Reasonable out of pocket costs, legal and filing fees are for the account of the Borrower. 8) Borrower is to maintain its primary depository accounts with the Bank. Sincerely, /s/ Alan Jepsen - ------------------------------------- Alan Jepsen Vice President and Assistant Manager Comerica Bank - California High Technology Division Agreed to and accepted by: /s/ John E. Trewin - ------------------------------------ John Trewin Chief Financial Officer California Micro Devices Corp. 30 EX-5 2 0002.txt [ARTICLE] 5 [PERIOD-TYPE] QTR-2 [FISCAL-YEAR-END] MAR-31-2001 [PERIOD-END] SEP-30-2000 [CASH] $ 2,249 [SECURITIES] 6,170 [RECEIVABLES] 8,874 [ALLOWANCES] (200) [INVENTORY] 10,496 [CURRENT-ASSETS] $ 28,638 [PP&E] 32,147 [DEPRECIATION] (19,813) [TOTAL-ASSETS] $ 43,080 [CURRENT-LIABILITIES] $ 7,680 [BONDS] 0 [COMMON] 57,411 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [OTHER-SE] (30,830) [TOTAL-LIABILITY-AND-EQUITY] $ 43,080 [SALES] $ 16,112 [TOTAL-REVENUES] 16,112 [CGS] 10,725 [TOTAL-COSTS] 14,482 [OTHER-EXPENSES] 103 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] $ 483 [INCOME-PRETAX] 1,250 [INCOME-TAX] 25 [INCOME-CONTINUING] 0 [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] 1,225 [EPS-BASIC] 0.11 [EPS-DILUTED] 0.10 Includes - Other assets - $1,049K. Includes - Restricted cash - $984K; Other long term assets - $1,124K. Includes - Research and development - $900K; Selling, marketing, and administrative - $2,857K; Includes - Interest Income ($138);other expense $271K
-----END PRIVACY-ENHANCED MESSAGE-----