SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the
[ X ] Definitive proxy statement Commission Only (as permitted
[ ] Definitive additional materials by Rule 14a-6(e)(2))
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
INTEGRATED DEVICE TECHNOLOGY, INC.
(Name of Registrant as Specified in Its Charter)
------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it is determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
INTEGRATED DEVICE TECHNOLOGY, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 27, 1998
----------------
Notice is hereby given that the 1998 Annual Meeting of the Stockholders
of Integrated Device Technology, Inc., a Delaware corporation (the "Company")
will be held on Thursday, August 27, 1998, at 9:30 a.m., local time, at the
offices of the Company located at 2670 Seely Road, San Jose, California, for the
following purposes:
1. To elect two Class II directors for a term to expire at the 2001
Annual Meeting of Stockholders;
2. To approve an amendment to the Company's 1984 Employee Stock
Purchase Plan to increase the number of shares reserved for
issuance thereunder from 5,050,000 to 7,000,000;
3. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Company for fiscal 1999; and
4. To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this notice.
Stockholders of record at the close of business on July 1, 1998 are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof.
The majority of the Company's outstanding shares must be represented at
the Annual Meeting (in person or by proxy) to transact business. To assure a
proper representation at the Annual Meeting, please mark, sign and date the
enclosed proxy and mail it promptly in the enclosed self-addressed envelope.
Your proxy will not be used if you revoke it either before or at the Annual
Meeting.
Santa Clara, California
July 10, 1998
By Order of the Board of Directors
/s/ Jack Menache
----------------------------------
Jack Menache
Secretary
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE. YOUR VOTE IS IMPORTANT.
<PAGE>
INTEGRATED DEVICE TECHNOLOGY, INC.
2975 Stender Way
Santa Clara, California 95054
(408) 727-6116
--------------------
1998 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
--------------------
July 10, 1998
The accompanying proxy is solicited on behalf of the Board of Directors
of Integrated Device Technology, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
on Thursday, August 27, 1998 at 9:30 a.m., local time, or at any adjournment or
postponement thereof. The Annual Meeting will be held at 2670 Seely Road, San
Jose, California 95134. Only holders of record of the Company's Common Stock at
the close of business on July 1, 1998 (the "Record Date") are entitled to notice
of, and to vote at, the Annual Meeting. On the Record Date, the Company had
82,117,942 shares of Common Stock outstanding and entitled to vote. A majority
of such shares, present in person or represented by proxy, will constitute a
quorum for the transaction of business. This Proxy Statement and the
accompanying form of proxy were first mailed to stockholders on or about July
10, 1998. An annual report for the fiscal year ended March 29, 1998 is enclosed
with this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Holders of the Company's Common Stock are entitled to one vote for each
share held as of the above record date, except that in the election of
directors, each stockholder has cumulative voting rights and is entitled to a
number of votes equal to the number of shares held by such stockholder
multiplied by the number of directors to be elected. The stockholder may cast
these votes all for a single candidate or distribute the votes among any or all
of the candidates. No stockholder will be entitled to cumulate votes for a
candidate, however, unless that candidate's name has been placed in nomination
prior to the voting and the stockholder, or any other stockholder, has given
notice at the Annual Meeting, prior to the voting, of an intention to cumulate
votes. In such an event, the proxy holder may allocate among the Board of
Directors' nominees the votes represented by proxies in the proxy holder's sole
discretion.
Directors will be elected by a plurality of the votes of the shares of
Common Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of directors. Proposal Nos. 2 and 3 each
require for approval the affirmative vote of the majority of shares of Common
Stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on such proposals. All votes will be tabulated by the inspector
of election appointed for the Annual Meeting who will separately tabulate, for
each proposal, affirmative and negative votes, abstentions and broker non-votes.
Abstentions will be counted towards a quorum and the tabulation of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes will be counted towards a quorum but are not
counted for any purpose in determining whether a matter has been approved.
The expenses of soliciting proxies to be voted at the Annual Meeting
will be paid by the Company. Following the original mailing of the proxies and
other soliciting materials, the Company and/or its agents may also solicit
proxies by mail, telephone, telegraph or in person. The Company has retained a
proxy solicitation firm, Skinner & Co., Inc. to aid it in the solicitation
process. The Company will pay that firm a fee equal to $5,000, plus expenses.
Following the original mailing of the proxies and other soliciting materials,
the Company will request that brokers, custodians, nominees and other record
holders of the Company's Common Stock forward copies of the proxy and other
soliciting materials to persons for whom they hold shares of Common Stock and
request authority for the exercise of proxies. In such cases, the Company, upon
request of the record holders, will reimburse such holders for their reasonable
expenses.
<PAGE>
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy
Statement has the power to revoke it prior to the Annual Meeting or at the
Annual Meeting prior to the vote pursuant to the proxy. A proxy may be revoked
by (i) a writing delivered to the Company stating that the proxy is revoked,
(ii) by a subsequent proxy that is signed by the person who signed the earlier
proxy and is presented at the Annual Meeting or (iii) by attendance at the
Annual Meeting and voting in person. Please note, however, that if a
stockholder's shares are held of record by a broker, bank or other nominee and
that stockholder wishes to vote at the Annual Meeting, the stockholder must
bring to the Annual Meeting a letter from the broker, bank or other nominee
confirming that stockholder's beneficial ownership of the shares.
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors consists of five members, divided into three
classes. Two Class II directors are to be elected at the Annual Meeting to serve
a three-year term expiring at the 2001 Annual Meeting of Stockholders or until a
successor has been elected and qualified. The remaining three directors will
continue to serve for the terms as set forth in the table below.
Federico Faggin and John C. Bolger have been nominated by the Board of
Directors to serve as the Class II directors.
Shares represented by the accompanying proxy will be voted for the
election of the nominees recommended by the Board of Directors unless the proxy
is marked in such a manner as to withhold authority so to vote. In the event
that a nominee is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy, or the Board
of Directors may reduce the authorized number of directors in accordance with
the Company's Restated Certificate of Incorporation, as amended, and its Bylaws.
The Board of Directors has no reason to believe that the nominees will be unable
to serve.
Directors/Nominees
<TABLE>
The names of the nominees and the other directors of the Company, and
certain information about them, as of July 1, 1998 are set forth below:
<CAPTION>
Name Age Principal Occupation Director Since
- ---- --- -------------------- --------------
<S> <C> <C> <C>
Class I Directors -- Term expiring
at the 2000 Annual Meeting:
Leonard C. Perham 55 Chief Executive Officer and 1986
President of the Company
Class II Directors -- Term expiring
at the 2001 Annual Meeting:
Federico Faggin(1) 56 President and Chief Executive 1992
Officer of Synaptics, Inc.
John C. Bolger(1)(2) 51 Private investor 1993
Class III Directors -- Term expiring
at the 1999 Annual Meeting:
D. John Carey 62 Chairman of the Board of 1980
Directors of the Company
Carl E. Berg(2) 61 Partner, Berg & Berg Industrial 1982
Developers
<FN>
- ---------------
(1) Member of the Compensation and Stock Option Committee.
(2) Member of the Audit Committee.
</FN>
</TABLE>
2
<PAGE>
Mr. Perham joined the Company in 1983 as Vice President and General
Manager, SRAM Division. In 1986 Mr. Perham was appointed President and Chief
Operating Officer and a director of the Company. In 1991 Mr. Perham was elected
Chief Executive Officer. Prior to joining the Company, Mr. Perham held executive
positions at Optical Information Systems Incorporated and Zilog Inc.
Mr. Faggin has been a director of the Company since 1992. Mr. Faggin
has been President, Chief Executive Officer and a director of Synaptics, Inc., a
computer peripherals and research company, since 1986. He is a director of
Aptix, Inc. and Foveonics, Inc..
Mr. Bolger has been a director of the Company since January 1993. For
the past five years, Mr. Bolger has been a private investor and is a retired
Vice President of Finance and Administration of Cisco Systems, Inc. Mr. Bolger
is a director of Integrated Systems Inc., Mission West Properties, Inc., Sanmina
Corporation and TCSI Corporation.
Mr. Carey was elected to the Board of Directors in 1980 and has been
Chairman of the Board since 1982. He served as Chief Executive Officer of the
Company from 1982 until his resignation in April 1991 and was President of the
Company from 1982 until 1986. Mr. Carey was a founder of Advanced Micro Devices
in 1969 and was an executive officer there until 1978.
Mr. Berg has been a director of the Company since 1982. Mr. Berg has
been a partner of Berg & Berg Developers, a real estate development partnership,
since 1979. He is a director of Mission West Properties, Inc., Systems Research,
Valence Technology and Videonics.
Board Meetings and Committees
The Board of Directors of the Company held a total of seven (7)
meetings during the fiscal year ended March 29, 1998. The Board of Directors
also has a Compensation and Stock Option Committee and an Audit Committee, but
does not have a Nominating Committee or any committee performing this function.
The Compensation and Stock Option Committee, composed of two
disinterested nonemployee directors, Messrs. Bolger and Faggin, determines the
salaries and incentive compensation for executive officers, including the chief
executive officer and key personnel, and administers the Company's stock option
plans, including determining the number of shares underlying options to be
granted to each employee and the terms of such options. Mr. Bolger is chair of
the Compensation and Stock Option Committee. The Compensation and Stock Option
Committee held two (2) meetings during fiscal 1998 and acted by written consent
seventeen (17) times.
The Audit Committee, composed of Messrs. Berg and Bolger, recommends
engagement of the Company's independent accountants and is primarily responsible
for approving the services performed by the Company's independent accountants
and for reviewing and evaluating the Company's accounting practices and its
systems of internal accounting controls. Mr. Bolger is the Chair of the Audit
Committee. The Audit Committee held two (2) meeting during fiscal 1998.
Each director attended at least 75% of the aggregate of the total
number of meetings of the Board of Directors and the total number of meetings
held by all committees on which such director served during fiscal 1998.
Director Compensation
Members of the Board of Directors who are not also officers or
employees of the Company are paid an annual retainer in the amount of $10,000
per fiscal year, $2,500 per quarterly board meeting attended (except telephone
meetings), $1,000 per additional board meeting attended (except telephone
meetings) and $500 per committee meeting attended if not conducted on the same
day as a Board meeting.
The Company's 1994 Directors Stock Option Plan (the "Directors Plan"),
covering 108,000 shares of Common Stock, was adopted by the Board of Directors
in May 1994 and was approved by the stockholders in August 1994. The Directors
Plan serves as the successor plan to the Company's 1989 Nonemployee Director
Stock Option Plan (the "1989 Director Plan"). All members of the Board of
Directors who are not also employees of the Company or of a parent or subsidiary
of the Company ("Nonemployee Directors") are eligible to receive options under
the Directors Plan.
3
<PAGE>
The Directors Plan provides for the mandatory grant of options on an
annual basis to the Company's Nonemployee Directors. The purchase price of the
stock covered by all options may not be less than 100% of the fair market value
of the Common Stock on the date the option is granted. The fair market value on
the date of grant is defined as the closing price of the Common Stock as
reported by the Nasdaq National Market on the trading day immediately preceding
the date on which the fair market value is determined.
Pursuant to the terms of the Directors Plan, each Nonemployee Director
is granted an option to purchase 16,000 shares of the Company's Common Stock on
the date of such Nonemployee Director's first election or appointment to the
Board. In addition, the Nonemployee Director who chairs the Audit Committee of
the Board of Directors is granted an option to purchase 4,000 shares of the
Company's Common Stock on the date of such Nonemployee Director's first election
or appointment as Chair of the Audit Committee. These options have a term of ten
years and become exercisable in cumulative increments of 25% per year,
commencing on the first anniversary of the date of grant.
Annually thereafter, each Nonemployee Director is granted an option to
purchase 4,000 shares of the Company's Common Stock and an additional 1,000
shares of the Company's Common Stock if the optionee is also Chair of the Audit
Committee. The annual grant is made on the anniversary date of the optionee's
receipt of the initial option granted under the Directors Plan. Such options
become exercisable in full on the fourth anniversary of the date of grant.
As of March 29, 1998, options to purchase 511,024 shares were
outstanding to four Nonemployee Directors under the 1989 Director Plan, the
Directors Plan and the 1994 Stock Option Plan, at an average exercise price of
$4.6841 per share expiring in 1998 through 2008, and 17,000 shares remain
available for future grant under the Directors Plan. During fiscal 1998, (i) Mr.
Berg purchased 8,000 shares upon exercise of options granted under the
predecessor 1989 Director Stock Option Plan for net value realized of $62,000;
(ii) Mr. Bolger purchased 24,000 shares upon exercise of options granted under
the predecessor 1989 Director Stock Option Plan for net value received of
$205,500; and Mr. Faggin purchased 24,000 shares upon exercise of options
granted under the predecessor 1989 Director Stock Option Plan for net value
received of $258,000.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINATED DIRECTORS
4
<PAGE>
PROPOSAL NO. 2 - APPROVAL OF AMENDMENT TO THE
1984 EMPLOYEE STOCK PURCHASE PLAN
Stockholders are being asked to approve an amendment to the Company's
1984 Employee Stock Purchase Plan (the "Purchase Plan") to increase the number
of shares of Common Stock reserved for issuance thereunder from 5,050,000 shares
to 7,000,000 shares (an increase of 1,950,000 shares). The Board of Directors of
the Company approved the proposed amendment described above on April 21, 1998 to
be effective upon stockholder approval.
Below is a summary of the principal provisions of the Purchase Plan
assuming approval of the above amendment, which summary is qualified in its
entirety by reference to the full text of the Purchase Plan. The Company will
provide, without charge, to each person to whom a Proxy Statement is delivered,
upon request of such person and by first class mail within one business day of
receipt of such request, a copy of the Purchase Plan. Any such request should be
directed as follows: Stock Administrator, Integrated Device Technology, Inc.,
2975 Stender Way, Santa Clara, CA 95054; telephone number (408) 727-6116;
facsimile number (408) 654-6742.
1984 Purchase Plan History
In May 1984, the Board of Directors of the Company adopted the Purchase
Plan, and on July 31, 1984, it was approved by the stockholders of the Company.
600,000 shares of Common Stock were originally reserved for issuance under the
Purchase Plan. In June 1993, the Board of Directors amended and restated the
Purchase Plan to increase the number of shares of Common Stock issuable
thereunder by 1,000,000 shares to 4,050,000 shares and to extend the termination
date of the Purchase Plan to the last day of the Company's 2008-2009 fiscal
year, and on August 25, 1993 the stockholders of the Company approved the
amendment and restatement to the Purchase Plan. In April 1997, the Board of
Directors amended and restated the Purchase Plan to increase the number of
shares of Common Stock issuable thereunder by 1,000,000 shares to 5,050,000
shares, and on August 28, 1997, the stockholders of the Company approved the
increase. A maximum of 2,099,061 shares were available for issuance as of the
Record Date pursuant to the Purchase Plan (assuming approval of the proposed
amendment).
Description of the Purchase Plan
General. The Purchase Plan, which is intended to qualify under the
provisions of section 423 of the Internal Revenue Code of 1986 (the "Code"),
provides for the grant to employees of rights to purchase shares of the
Company's Common Stock.
Administration. The Purchase Plan is administered by a plan
administrator appointed by the Board of Directors (the "Plan Administrator").
The Plan Administrator has final authority for interpretation of any provisions
of the Purchase Plan or of any right to purchase stock granted under the
Purchase Plan. All costs and expenses associated with the administration of the
Purchase Plan are borne by the Company. In addition, the Purchase Plan provides
certain indemnification provisions.
Eligibility. Employees of the Company (including officers) become
eligible for participating in the Purchase Plan after having completed three
months of continuous employment that customarily entails more than twenty hours
a week and more than five months per calendar year. However, no employee is
eligible to participate in the Purchase Plan if, immediately after the election
to participate, such employee would own stock of the Company (including stock
such employee may purchase under outstanding options) representing 5% or more of
the total combined voting power or value of all classes of stock of the Company.
In addition, no employee is permitted to participate if under the Purchase Plan
and all similar purchase plans of the Company or its subsidiaries, such rights
would accrue at a rate which exceeds $25,000 of the fair market value of such
stock (determined at the time the right is granted) for each calendar year.
Participation. The Purchase Plan is implemented by one or more periods
of not more than twenty-seven months each ("Participation Periods"). The Board
of Directors determines the duration of Participation Periods and commencement
dates. The duration of each Participation Period is generally each of the
Company's fiscal quarters, and each Participation Period generally commences on
the first day of each quarter. Eligible employees become participants in the
Purchase Plan by executing a participation agreement and filing it with the Plan
Administrator no later than the deadline stated on the participation agreement,
and if none is stated, then no later than the first day of the Participation
Period. By enrolling in the Purchase Plan, a participant is deemed to have
elected to purchase the maximum number of whole shares of Common Stock that can
be purchased with the compensation withheld during
5
<PAGE>
the Participation Period. With respect to any Participation Period, no
participant is eligible to purchase more than 2,500 shares of stock (adjusted
for Participation Periods longer than a fiscal quarter and for
recapitalizations).
Payroll Deductions. The payroll deductions made for each participant
may be not less than 2% nor more than 10% of a participant's base earnings. Base
earnings is defined in the Purchase Plan as all compensation, including payments
for overtime work and shift differential, but excluding all incentive
compensation, sales commissions and other bonuses. Payroll deductions commence
with the first paycheck issued during the Participation Period and are deducted
from subsequent paychecks throughout the Participation Period unless changed or
terminated as provided in the Purchase Plan. The participant may, if permitted
by the Plan Administrator, decrease the rate of payroll withholding during a
Participation Period by filing a new participation agreement. The new rate
becomes effective the first day of the second payroll period which begins
following the receipt of the new participation agreement. The participant may
increase or decrease the rate of payroll withholding for the next Participation
Period by filing a new participation agreement on or before the date specified
by the Plan Administrator and if none is stated, then no later than the first
day of the Participation Period for which the change is to be effective.
The Company maintains a plan account in the name of each participant
and credits the amount deducted from compensation to such account.
Purchase of Stock; Price. As of the last day of each Participation
Period, each participant's accumulated payroll deductions are applied to the
purchase of whole shares of Common Stock at a price which is the lower of (i)
85% of the fair market value per share of the Common Stock on the first trading
day of the Participation Period or (ii) 85% of the fair market value per share
of the Common Stock on the last trading day during the Participation Period. The
fair market value of the Common Stock on a given date is defined as the closing
price as reported by the Nasdaq National Market. In the event that the aggregate
number of shares which all participants elect to purchase during a Participation
Period exceeds the number of shares remaining for issuance under the Purchase
Plan, the available shares will be ratably divided and any excess cash will be
refunded to the participants.
Participants are notified by statements of account as soon as
practicable following the end of each Participation Period as to the amount of
payroll deductions, the number of shares purchased, the purchase price and the
remaining cash balance of their plan account. Certificates representing whole
shares are delivered to a brokerage account and kept in such account pursuant to
the participation agreement. The shares must be kept in the brokerage account
for two years from the date of grant unless sold.
Withdrawal From the Purchase Plan. Participants may withdraw from
participation under the Purchase Plan at any time up to the last day of a
Participation Period by filing the prescribed form with the Plan Administrator.
As soon as practicable after withdrawal, payroll deductions cease and all
amounts credited to the participant's plan account are refunded in cash, without
interest. A participant who has withdrawn from the Purchase Plan shall not be a
participant in future Participation Periods unless he or she re-enrolls pursuant
to the Purchase Plan's guidelines.
Termination of Employment. Termination of a participant's status as a
full-time or permanent part-time employee for any reason, including death, is
treated as an automatic withdrawal from the Purchase Plan. A participant may
designate in writing a beneficiary who is to receive shares and cash in the
event of the participant's death subsequent to the purchase of shares, but prior
to delivery. A participant may also designate a beneficiary to receive cash in
his or her account in the event of such participant's death prior to the last
day of the Participation Period.
Nontransferability. The rights or interests of any participant in the
Purchase Plan or in any shares or cash to which such participant may be
entitled, shall not be transferable by voluntary or involuntary assignment or by
operation of law, or by any other manner than as permitted by the Code, by will
or the laws of descent and distribution. An attempt by a participant to transfer
an interest in violation of the Purchase Plan is treated as an automatic
withdrawal.
Amendment and Termination of the Purchase Plan. The Board of Directors
has the right to amend, modify or terminate the Purchase Plan at any time
without notice; provided, however, stockholder approval shall be obtained when
required by applicable laws, regulations or rules.
Adjustments Upon Changes in Capitalization. In the event of a
subdivision or consolidation of outstanding shares, the payment of a stock
dividend or other increase or decrease in such shares effected without the
receipt of
6
<PAGE>
consideration by the Company, the aggregate number of shares offered under the
Purchase Plan, the number and price of shares which any participant may elect to
purchase and the maximum number of shares which a participant may elect to
purchase under the Purchase Plan in any Participation Period, shall be
proportionately adjusted. In the event of a dissolution or liquidation of the
Company, or a merger or consolidation to which the Company is a constituent
corporation, the Purchase Plan shall terminate, unless the plan of merger,
consolidation or reorganization provides otherwise, and all amounts which each
participant has paid towards the stock purchase price shall be refunded.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT
TO THE 1984 EMPLOYEE STOCK PURCHASE PLAN
NEW PLAN BENEFITS
The amounts of future stock purchases under the Purchase Plan are not
determinable because, under the terms of the Purchase Plan, purchases are based
upon elections made by participants. Future purchase prices are not determinable
because they are based upon fair market value of the Company's Common Stock.
PROPOSAL NO. 3 - RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year ending March 28, 1999, and
the stockholders are being asked to ratify such selection. Price Waterhouse LLP,
which merged with Coopers & Lybrand L.L.P. effective July 1, 1998 to form
PricewaterhouseCoopers LLP, has been engaged as the Company's independent
accountants since 1993. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting, and will be given an opportunity
to make a statement if they desire to do so, and are expected to be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth certain information, as of July 1, 1998,
with respect to the beneficial ownership of the Company's Common Stock by: (a)
each stockholder known by the Company to be the beneficial owner of more than
five percent of the Company's Common Stock; (b) each director and nominee; (c)
each Named Executive Officer (as defined below); and (d) all current officers
and directors as a group.
<CAPTION>
SECURITY OWNERSHIP
Shares Percentage of
Name and Address of Beneficial Owner Beneficially Owned(1)(2) Beneficial Ownership
- ------------------------------------ ------------------------ --------------------
<S> <C> <C>
5% Stockholders
Merrill Lynch & Co., Inc.(3) 5,687,700 6.9%
Non-Employee Directors
Carl E. Berg(4) 3,788,031 4.6
D. John Carey(5) 1,159,488 1.4
Federico Faggin(6) 92,000 *
John C. Bolger(7) 44,000 *
Named Executive Officers
Leonard C. Perham(8) 965,826 1.2
Glenn Henry(9) 130,889 *
Raymond J. Farnham(10) 78,125 *
Jerry G. Taylor(11) 65,000 *
Daniel L. Lewis(12) 35,600 *
All current Executive Officers 6,659,469 7.9%
and Directors as a Group (15 Persons)(13)
<FN>
- ----------------------
* Less than 1%.
(1) Unless otherwise indicated below, the Company believes that the persons
named in the table have sole voting and sole investment power with
respect to all shares of Common Stock shown in the table to be
beneficially owned by them, subject to community property laws where
applicable. Unless otherwise indicated below, the address of the named
beneficial owner is that of the Company.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days upon the exercise of options. Each
stockholder's percentage ownership is determined by assuming that options
that are held by such person (but not those held by any other person) and
that are exercisable within 60 days of July 1, 1998, have been exercised.
(3) Represents shares held by this stockholder reported as being beneficially
owned as of January 28, 1998. Information in respect of the beneficial
owner of Merrill Lynch & Co., Inc. ("ML&Co.") has been derived from
Amendment No. 1 to its Schedule 13-G dated January 28, 1998, filed on its
behalf and on behalf of Merrill Lynch Asset Management, L.P. d/b/a
Merrill Lynch Asset Management ("MLAM"), Fund Asset Management, L.P.
d/b/a Fund Asset Management ("FAM") and Princeton Services, Inc. ("PSI")
with the Securities and Exchange Commission (the "Commission"). Based on
such Amendment No. 1 to Schedule 13-G, ML&Co. and PSI are parent holding
companies, and MLAM and FAM are registered investment advisers, which
have an interest that relates to greater than 5% of the Common Stock of
the Company. The address of ML&Co. is World Financial Center, North
Tower, 250 Vesey Street, New York, NY 10281.
(4) Represents 2,357,131 shares held of record by Mr. Berg, 1,349,900 shares
held of record by West Coast Venture Capital, L.P., of which Mr. Berg is
a general partner, 25,000 shares held of record by Mr. Berg's spouse and
56,000 shares subject to options exercisable within 60 days of July 1,
1998.
(5) Represents 846,718 shares held of record by Mr. Carey, 7,278 shares held
of record by Mr. Carey's 401(k) plan account, 3,468 shares held of record
by Mr. Carey's daughter and 302,024 shares subject to options exercisable
within 60 days of July 1, 1998.
8
<PAGE>
(6) Includes 68,000 shares subject to options exercisable within 60 days of
July 1, 1998.
(7) Includes 20,000 shares subject to options exercisable within 60 days of
July 1, 1998.
(8) Represents 124,400 shares beneficially owned by Mr. Perham, 8,286 shares
held of record by Mr. Perham's 401(k) plan account and 833,140 shares
subject to options to Mr. Perham exercisable within 60 days of July 1,
1998.
(9) Includes 128,125 shares subject to options exercisable within 60 days of
July 1, 1998.
(10) Represents 78,125 shares subject to options exercisable within 60 days of
July 1, 1998.
(11) Represents 65,000 shares subject to options exercisable within 60 days of
July 1, 1998.
(12) Represents 600 shares held of record by Mr. Lewis' children and 35,000
shares subject to options exercisable within 60 days of July 1, 1998. Mr.
Lewis resigned from the Company effective May 8, 1998.
(13) Includes the shares described in notes 4-11, an additional 32,279 shares,
and an additional 303,831 shares subject to options exercisable within 60
days of July 1, 1998.
</FN>
</TABLE>
9
<PAGE>
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
The report of the Compensation and Stock Option Committee on Executive
Compensation shall not be deemed to be incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
This report is provided by the Compensation and Stock Option Committee
of the Board of Directors of Integrated Device Technology, Inc. to assist
stockholders in understanding the objectives and procedures in establishing the
compensation of the Company's Chief Executive Officer, Leonard C. Perham, and
other executive officers. During the Company's fiscal year ended March 29, 1998,
the Company's compensation program was administered by the Compensation and
Stock Option Committee of the Board of Directors. The role of the Compensation
and Stock Option Committee was to review and approve salaries, cash bonuses and
other compensation of the executive officers and to administer the Company's
1994 Stock Option Plan (the "1994 Option Plan") and 1997 Stock Option Plan (the
"1997 Option Plan"), including review and approval of stock option grants under
the 1994 Option Plan to the executive officers. Executive officers are not
eligible for stock option grants under the 1997 Option Plan. The Compensation
and Stock Option Committee consists solely of outside directors, Messrs.
Bolger and Faggin.
Compensation Philosophy
The Compensation and Stock Option Committee believes that the
compensation of the Company's executive officers should be:
o competitive in the market place;
o directly linked to the Company's profitability and to the value of
the Company's Common Stock; and
o sufficient to attract, retain and motivate well-qualified
executives who will contribute to the long-term success of the
Company.
In 1996, the Company's Human Resources Department, working with an
independent outside consulting firm, developed executive compensation data from
a nationally recognized survey for a group of similar size high technology
companies and provided this data to the Compensation and Stock Option Committee.
The factors used to determine the participants in the survey included annual
revenue, industry, growth rate and geography. The Company's executive level
positions, including the Chief Executive Officer, were matched to comparable
survey positions and competitive market compensation levels to determine base
salary, target incentives and target total cash compensation. Practices of such
companies with respect to stock option grants are also reviewed and compared.
In preparing the performance graph for this Proxy Statement, the
Company used the S&P Electronic (Semi/Components) Index ("S&P Index") as its
published line of business index. The companies in the survey were substantially
similar to the companies contained in the S&P Index. Approximately two-thirds of
the companies included in the survey group are included in the S&P Index. The
remaining companies included in the survey group were felt to be relevant by the
Company's independent compensation consultants because they compete for
executive talent with the Company notwithstanding that they are not included in
the S&P Index. In addition, certain companies in the S&P Index were excluded
from the survey group because they were determined not to be competitive with
the Company for executive talent, or because compensation information was not
available.
This competitive market data, along with the Company's general
knowledge of compensation trends in the survey group, is reviewed each year with
the Chief Executive Officer for each executive level position and with the
Compensation and Stock Option Committee as to the Chief Executive Officer. In
addition, each executive officer's performance for the last fiscal year and
objectives for the subsequent year are viewed, together with the executive's
responsibility level and the Company's fiscal performance versus objectives and
potential performance targets for the subsequent year.
10
<PAGE>
Key Elements of Executive Compensation
The Company's executive compensation program consists of a cash and an
equity-based component. Base pay and, if warranted, an annual bonus and a
semi-annual award under the Company's Profit Sharing Plan constitute the cash
components. Grants of stock options under the Company's 1994 Option Plan
comprise the equity-based component. The Vice President of Sales is also
eligible to receive a commission-based bonus, which is paid quarterly.
Cash Components. Cash compensation is designed to fluctuate with
Company performance. In years that the Company exhibits superior financial
performance, cash compensation is designed to be above average competitive
levels; when financial performance is below goal, cash compensation is designed
generally to be below average competitive levels. Essentially, this is achieved
through the cash bonus and Profit Sharing Plan awards, which fluctuate generally
with pre-tax profitability.
Base Pay: Base pay guidelines are established for executive officers
after a review of compensation survey data referred to above, adjusted to
reflect changes in compensation trends since the survey was prepared. Individual
base pay within the guidelines is based on sustained individual performance
toward achieving the Company's goals and objectives. Executive salaries are
reviewed annually. Executive officer salaries increased by 7% over salaries for
fiscal 1997 annualized for executive officers joining the Company during fiscal
1997.
Bonus: The Company's bonus policy is to pay an annual cash bonus to
certain executive officers and other key employees based on the pre-tax earnings
of the Company and the employee's individual performance. Payment of bonuses is
usually made in the first quarter of each fiscal year for performance during the
previous year. The amount of each bonus is determined by the Chief Executive
Officer subject to the approval of the Compensation and Stock Option Committee.
The aggregate amount of all bonuses paid for any single fiscal year may not
exceed 6% of pre-tax profits for the year. Pursuant to this policy, certain of
the Company's executive officers received a bonus for fiscal 1998. The Company's
Chief Executive Officer did not receive a bonus for fiscal 1998.
Profit Sharing Plan: The Profit Sharing Plan is available to all
employees who have at least six months of service with the Company. The Board of
Directors determines the amount of annual contributions under the Profit Sharing
Plan. In fiscal 1998, $437,500 in contributions to the Profit Sharing Plan were
made. Additionally, 1% of pre-tax profit was contributed semiannually to each
employee's Section 401(k) Plan account. Contributions to the Profit Sharing Plan
and Section 401(k) Plan are made in cash and distributed semi-annually. The
amount of each participating employee's distribution is that portion of total
funds available for distribution equal to such employee's base salary divided by
the aggregate base salaries of all participating employees.
Equity-Based Component. Stock options are an essential element of the
Company's executive compensation package. The Compensation and Stock Option
Committee believes that equity-based compensation in the form of stock options
links the interests of management and stockholders by focusing employees and
management on increasing stockholder value. The actual value of such
equity-based compensation depends entirely on appreciation of the Company'
stock. Approximately 40% of the Company's employees participate in the Company's
1994 Option Plan, and approximately 8% of the Company's employees participate in
the Company's 1997 Option Plan.
During fiscal 1998, the Compensation and Stock Option Committee made
stock option grants to certain executives including the Chief Executive Officer.
See "Executive Compensation--Option Grants in Fiscal 1998." Stock options
typically have been granted to executive officers when the executive first joins
the Company, annually thereafter, in connection with significant changes in
responsibilities, and, occasionally, to achieve equity within a peer group. In
some cases, stock options are awarded to incentive certain employees to attain
or help the Company attain specified goals. The number of shares subject to each
stock option granted takes into account or is based on anticipated future
contribution and ability to impact corporate and/or business unit results, past
performance or consistency within the executive's peer group, prior option
grants to the executive officer and the level of vested and unvested options.
The purpose of these options is to provide greater incentives to those officers
to continue their employment with the Company and to strive to increase the
value of the Company's Common Stock on the date of grant. These options
generally vest as to 25% of the total shares one year after the date of grant
and then monthly over the next three years. In addition, the Committee has also
granted "fourever" options, which vest monthly over the one-year period
following the third anniversary of the date of grant. The "fourever" program is
intended to provide continuing incentive to employees to remain with the
Company.
11
<PAGE>
Fiscal 1998 CEO Compensation
In evaluating the compensation of Mr. Perham, President and Chief
Executive Officer of the Company, for services rendered in fiscal 1998, the
Compensation and Stock Option Committee examined both quantitative and
qualitative factors. In looking at quantitative factors, the Compensation and
Stock Option Committee reviewed the Company's fiscal 1998 financial results and
compared them with the Company's financial results in fiscal 1997 and with the
companies in the S&P Electronics Index. The Compensation and Stock Option
Committee reviewed the Company's net income for fiscal 1998, the Company's
increase in earnings per share in fiscal 1998, the Company's increase in
revenues for fiscal 1998 and other factors. The Compensation and Stock Option
Committee did not apply any specific quantitative formula which could assign
weights to those performance measures or establish numerical targets for any
given factor.
Based on the foregoing, the factors considered in determining the sizes
of the stock option awards discussed above and certain other incentives that the
Compensation and Stock Option Committee wished to provide to Mr. Perham, the
Committee made the following determinations with respect to Mr. Perham's
compensation for fiscal 1998.
In fiscal 1998, Mr. Perham's base salary was decreased to $339,393
(compared to $351,848 in fiscal 1997).
Mr. Perham received no bonus in fiscal 1998. For fiscal 1998, Mr.
Perham received a payment of $1,506 under the Profit Sharing Plan and $35 in
profit sharing under the Section 401(k) Plan.
During fiscal 1998, Mr. Perham was granted one option for 100,000
shares that vests in accordance with the Company's normal vesting procedures and
two additional options for an aggregate of 200,000 shares that vest on the
earlier of 2002 or the attainment of certain objectives by certain of the
Company's business units. The Compensation and Stock Option Committee believes
such options are appropriate for Mr. Perham's level of responsibility and are
well within competitive practice, taking into account prior option grant
history, the level of vested versus unvested shares and the number of shares Mr.
Perham already owned. The Compensation and Stock Option Committee determined
that these new options granted provided the necessary incentives to Mr. Perham.
Tax Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended
("Section 162(m)"), generally provides that publicly held corporations may not
deduct in any taxable year certain compensation in excess of $1 million paid to
the chief executive officer and the next five most highly compensated executive
officers. The 1994 Option Plan and the Profit Sharing Plan are in compliance
with Section 162(m) and the Company believes that its compensation programs will
generally satisfy the requirements for deductibility of all cash and
stock-related incentive compensation to be paid to the Company's executive
officers under Section 162(m). However, the Compensation and Stock Option
Committee considers one of its primary responsibilities to be providing a
compensation program that will attract, retain and reward executive talent
necessary to maximize shareholder returns. Accordingly, the Compensation and
Stock Option Committee believes that the Company's interests are best served in
some circumstances to provide compensation (such as salary and perquisites)
which might be subject to the tax deductibility limitation of Section 162(m).
COMPENSATION AND STOCK OPTION COMMITTEE
John C. Bolger Federico Faggin
12
<PAGE>
EXECUTIVE COMPENSATION
<TABLE>
The following table shows certain information concerning the
compensation of each of the Company's Chief Executive Officer and the Company's
four most highly compensated executive officers other than the Chief Executive
Officer of the Company who were serving as executive officers at the end of
fiscal 1998 for services rendered in all capacities to the Company for the
fiscal years ended 1998, 1997 and 1996 (together, the "Named Executive
Officers"). This information includes the dollar values of base salaries, bonus
awards, the number of stock options granted and certain other compensation, if
any, whether paid or deferred. The Company does not grant stock appreciation
rights and has no long-term compensation benefits other than stock options.
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
---------------------------------------------------- ----------
Shares
Name and Fiscal Other Annual Underlying All Other
Principal Position Year Salary($) Bonus($)(1) Compensation($)(2) Options(#) Compensation($)(3)
- --------------------- ------ --------- ----------- ------------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Leonard C. Perham.... 1998 $ 339,393 $ 1,506 $ -- 300,000 $ 35
Chief Executive 1997 351,848 -- -- 120,000 --
Officer 1996 341,600 1,369,003 -- 400,000(4) 1,045
Glenn Henry.......... 1998 211,539 223,333 -- 116,875 --
Senior Vice 1997 200,000 109,000 -- 28,125 --
President, President 1996 197,692 177,000 -- 250,000(4) --
of Centaur Technology
Jerry G. Taylor(5)... 1998 211,409 906 45,571 60,000 35
Executive Vice 1997 131,539 150,000 23,275 150,000 --
President, 1996 -- -- -- -- --
Manufacturing and
Memory Products
Raymond J. Farnham(5) 1998 260,393 1,131 -- 30,000 35
Executive Vice 1997 163,466 -- -- 150,000 --
President 1996 -- -- -- -- --
Daniel L. Lewis(6)... 1998 171,287 48,841 88,971 11,250 35
Vice President, Sales 1997 163,246 105,326 -- 15,000 --
1996 157,200 294,664 -- 40,000(4) 1045
<FN>
- ---------------
(1) Amounts listed in this column for fiscal 1998, 1997 and 1996 include cash
paid under the Company's Profit Sharing Plan, as follows: Mr. Perham,
$1,506, $0 and $52,183; Mr. Henry, $0, $0 and $0; Mr. Taylor, $906, $0
and $0; Mr. Farnham, $1,131, $0 and $0; and Mr. Lewis, $743, $0 and
$24,077. In fiscal 1997, Mr. Taylor received a bonus of $100,000 in
connection with commencing his employment with the Company. All remaining
amounts in this column represent performance bonuses.
(2) The amounts reflected for Mr. Taylor represents a housing relocation
allowance. The amount reflected for Mr. Lewis represents commissions.
(3) Amounts listed in this column for are the Company's contributions to
individual 401(k) accounts of the Named Executive Officers.
(4) Includes an option for 160,000 shares granted in fiscal 1995 and repriced
in fiscal 1996 and an option for 120,000 shares granted in fiscal 1996
and repriced in fiscal 1996 for Mr. Perham; options for 250,000 shares
granted in fiscal 1996 and repriced in fiscal 1996 for Mr. Henry; and an
option for 20,000 shares granted in fiscal 1996 and repriced in fiscal
1996 for Mr. Lewis.
(5) Mr. Taylor joined the Company in June 1996. Mr. Farnham joined the
Company in July 1996.
(6) Mr. Lewis resigned from the Company effective May 8, 1998.
</FN>
</TABLE>
13
<PAGE>
<TABLE>
The following table contains information concerning the grant of stock
options under the Company's 1994 Option Plan to the Named Executive Officers
during fiscal 1998. In addition, there are shown the hypothetical gains or
"option spreads" that would exist for the respective options based on assumed
rates of annual compound stock appreciation of 5% and 10% from the date of grant
over the full option term. Actual gains, if any, on option exercises are
dependent on the future performance of the Company's Common Stock. The
hypothetical gains shown in this table are not intended to forecast possible
future appreciation, if any, of the stock price.
Option Grants in Fiscal 1998
<CAPTION>
Potential Realizable
Value
At Assumed Annual Rates
of Stock Price
Appreciation
Individual Grants for Option Term(1)
- ----------------------------------------------------------------------------------- -------------------------
% of Total
Number of Options
Shares Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted(2) 1998 ($/Share)(3) Date 5% 10%
- ------------------------- ----------- ------------ ------------ --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leonard C. Perham..... 100,000 1.9% $10.3750 10/03/04 $ 441,221 $1,035,617
200,000(4) 3.9 11.5625 10/06/05 1,104,116 2,644,549
Glenn Henry........... 21,094 0.4 10.8750 03/23/04 92,440 215,072
30,781 0.6 12.3750 03/23/05 171,067 405,272
25,000 0.5 10.3750 03/23/05 118,853 282,571
40,000 0.8 9.1250 12/11/05 173,983 416,593
Jerry G. Taylor....... 5,000 0.1 12.3750 06/24/04 24,598 57,107
25,000 0.5 10.3750 06/24/04 105,397 245,546
30,000(5) 0.6 9.4375 01/02/06 135,180 323,779
Raymond J. Farnham.... 30,000 0.6 10.3750 07/22/04 128,059 298,942
Daniel L. Lewis....... 11,250 0.2 10.3750 07/30/04 48,198 112,582
<FN>
- ------------------
(1) In accordance with Securities and Exchange Commission (the "SEC") rules,
these columns show gains that might exist for the respective options over
the term of each option. This valuation model is hypothetical. If the
stock price does not increase over the exercise price, compensation to
the Named Executive Officer would be zero.
(2) Except as otherwise noted, the options shown in the table are
non-qualified stock options that vest in 12 equal monthly increments
beginning approximately three years after the date of grant. The terms of
the 1994 Option Plan provide that these options may become exercisable in
full in the event of a change in control (as defined in the 1994 Option
Plan).
(3) All stock options are granted at the fair market value on the date of
grant. The exercise price and tax withholding obligations related to
exercise may be paid by delivery of shares already owned and tax
withholding obligations related to exercise may be paid by offset of the
underlying shares, subject to certain conditions.
(4) This option is a non-qualified stock option that vests on the fifth
anniversary of the date of grant, subject to earlier vesting based on
performance targets.
(5) This option is a non-qualified stock option that vests in 12 equal
monthly increments beginning on the fourth anniversary of the date of
grant, subject to earlier vesting based on performance targets.
</FN>
</TABLE>
14
<PAGE>
<TABLE>
The following table shows the number of shares of Common Stock acquired
by each of the Named Executive Officers upon the exercise of stock options
during fiscal 1998, the net value realized upon exercise, the number of shares
of Common Stock represented by outstanding stock options held by each of the
Named Executive Officers as of March 29, 1998 and the value of such options
based on the closing price of the Company's Common Stock at fiscal year-end
($14.375).
Aggregated Option Exercises in Fiscal 1998 and Fiscal Year-End Option Values
<CAPTION>
Number of Shares
Underlying Unexercised Value of Unexercised
Options at Fiscal Year End In-the-Money Options
(#)(1) at Fiscal Year-End ($)(2)
-------------------------- -------------------------
Shares
Acquired on Valued
Names Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard C. Perham..... -- $ -- 866,473 633,334 $9,082,897 $2,552,503
Glenn Henry........... -- -- 112,500 282,500 506,250 1,132,696
Jerry G. Taylor....... -- -- 52,500 157,500 223,125 635,471
Raymond J. Farnham.... -- -- 62,500 117,500 328,125 579,375
Daniel L. Lewis....... 5,000 60,937 31,666 54,584 208,956 231,044
<FN>
- --------------------
(1) "Value Realized" represents the fair market value of the shares
underlying the options on the date of exercise less the aggregate
exercise price.
(2) These values, unlike the amounts set forth in the column entitled "Value
Realized," have not been, and may never be, realized, and are based on
the positive spread between the respective exercise prices of outstanding
options and the closing price of the Company's Common Stock on March 27,
1998, the last day of trading for fiscal 1998.
</FN>
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The Company has a Compensation and Stock Option Committee of the Board
of Directors, comprised of John C. Bolger and Federico Faggin, both of whom are
outside directors. This Committee makes decisions regarding option grants to
employees including executive officers. No interlocking relationship exists
between the Board or the Compensation and Stock Option Committee and the board
of directors or compensation committee of any other company, nor did any such
interlocking relationship exist during fiscal 1998.
15
<PAGE>
PERFORMANCE GRAPH
The Performance Graph shall not be deemed to be incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
The Securities and Exchange Commission requires that the Company
include in this Proxy Statement a line-graph presentation comparing cumulative,
five-year stockholder returns on an indexed basis with (i) a broad equity market
index and (ii) an industry index or peer group. Set forth below is a line graph
comparing the percentage change in the cumulative total stockholder return on
the Company's Common Stock against the cumulative total return of the Standard &
Poor's 500 Index and the Standard & Poor's Electronics (Semi/Components) Index
for a period of five fiscal years. The Company's fiscal year ends on a different
day each year because the Company's year ends at midnight on the Sunday nearest
to March 31 of each calendar year. However, for convenience, the amounts shown
below are based on a March 31 fiscal year end. "Total return," for the purpose
of this graph, assumes reinvestment of all dividends.
<TABLE>
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
<CAPTION>
Cumulative Total Return
------------------------------------------------------------------------
03/31/93 03/31/94 03/31/95 03/31/96 03/31/97 03/31/98
<S> <C> <C> <C> <C> <C> <C>
Integrated Device Technology, Inc. 100 327 477 294 258 363
S & P 500 Index 100 101 117 155 186 275
S & P Electronics (Semiconductor) Index 100 134 161 177 377 411
<FN>
* $100 Invested on 3/31/93 in Stock or Index Including Reinvestment of Dividends.
Fiscal Year Ending March 31.
</FN>
</TABLE>
16
<PAGE>
CERTAIN TRANSACTIONS
The Company has from time to time retained Phillip Perham, a contractor
and the brother of Leonard C. Perham, as an independent contractor to perform
certain construction services in connection with improvements and repairs to
various Company facilities. The Company paid Phillip Perham an aggregate of
approximately $553,000 for such services during fiscal 1998.
During fiscal 1998, Carl Berg, a director of the Company, advanced $9.7
million to a wholly owned subsidiary of the Company in connection with the
Company's purchase of real estate and options to purchase real estate in
California from third parties. The loan, made pursuant to an oral agreement,
bears interest at the prime rate and is payable by the Company on demand by Mr.
Berg.
COMPLIANCE UNDER SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16 of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of the
Company's Common Stock to file initial reports of ownership and reports of
changes in ownership with the SEC and the Nasdaq National Market. Such persons
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms that they file.
Based solely on the Company's review of the copies of such forms
furnished to it and written representations from the executive officers and
directors, the Company believes that all Section 16(a) filing requirements were
met, except for one Form 4 for Mr. Faggin that was filed late with respect to
one transaction.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of stockholders that are intended to be presented by such
stockholders at the Company's 1999 Annual Meeting must be received by the
Company no later than March 12, 1999.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual
Meeting. However, if any other matters properly come before the Annual Meeting
or any adjournment or postponement thereof, it is the intention of the persons
named in the enclosed form of Proxy to vote the shares they represent as the
Board of Directors may recommend.
By Order of the Board of Directors
/s/ Jack Menache
----------------------------------
Jack Menache
Secretary
Dated: July 10, 1998
Santa Clara, California
17
<PAGE>
<TABLE>
APPENDIX A
<CAPTION>
INTEGRATED DEVICE TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 27, 1998
The undersigned hereby appoints Leonard C. Perham and Jack Menache, or either of them, each with power of substitution, to represent
the undersigned at the Annual Meeting of Stockholders of Integrated Device Technology, Inc. (the "Company") to be held at 2670 Seely
Road, San Jose, California 95054 on August 27, 1998, at 9:30 a.m. P.D.T., and at any adjournment thereof, and to vote the number of
shares the undersigned would be entitled to vote if personally present at the meeting on the following matters:
------------ ------------
See Reverse CONTINUE AND TO BE SIGNED ON REVERSE SIDE See Reverse
Side Side
------------ ------------
<PAGE>
<S> <C> <C>
Please mark
[X] votes as in
this example
- ------------------------------------------------------------------------------------------------------------------------------------
WITHHELD
FROM BOTH
1. ELECTION FOR NOMINEES
OF TWO CLASS II FOR AGAINST ABSTAIN
DIRECTORS [ ] [ ] 2. AMENDMENT OF 1984
EMPLOYEE STOCK PURCHASE [ ] [ ] [ ]
PLAN
Nominees: Federico Faggin
John C. Bolger FOR AGAINST ABSTAIN
3. RATIFICATION OF
SELECTION OF [ ] [ ] [ ]
PRICEWATERHOUSECOOPERS LLP
AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS
Mark here for address change and note below [ ]
-------------------------------------------
Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the
line above:
The Board of Directors recommends a vote
FOR the nominees for election and FOR
Proposals 2 and 3. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF
DIRECTION, THIS PROXY WILL BE VOTED FOR
THE COMPANY'S NOMINEES FOR ELECTION AND
FOR PROPOSALS 2 AND 3.
In their discretion, the proxy holders
are authorized to vote upon such other
business as may properly come before the
meeting or any adjournment thereof to the
extent authorized by Rule 14a-4(c) of the
Securities Exchange Act of 1934, as
amended. THIS PROXY IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY.
Dated:
-----------------------------
------------------------------------------
------------------------------------------
Signature(s)
Please sign exactly as your name(s)
appear(s) on your stock certificate. If
shares are held of record in the names of
two or more persons or in the name of
husband and wife, whether as joint tenants
or otherwise, both or all of such persons
should sign the proxy. If shares of stock
are held of record by a corporation, the
proxy should be executed by the president
or vice president and the secretary or
assistant secretary. Executors,
administrators or other fiduciaries who
execute the above proxy for a deceased
stockholder should give their full title.
Please date the proxy. WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING, PLEASE
COMPLETE, DATE, SIGN AND PROMPTLY RETURN
THIS PROXY IN THE ENCLOSED, POSTAGE PAID
ENVELOPE SO THAT YOUR SHARES MAY BE
REPRESENTED AT THE MEETING.
-------------------------------------------
</TABLE>
