SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for Use of
[ X ] Definitive proxy statement the Commission Only (as
[ ] Definitive additional materials permitted 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:
<PAGE>
INTEGRATED DEVICE TECHNOLOGY, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 14, 1999
----------------
Notice is hereby given that the 1999 Annual Meeting of the Stockholders
(the "Annual Meeting") of Integrated Device Technology, Inc., a Delaware
corporation (the "Company"), will be held on Tuesday, December 14, 1999, at 9:30
a.m., local time, at the Westin Hotel located at 5101 Great America Parkway,
Santa Clara, California, for the following purposes:
1. To elect one Class III director for a term to expire at the 2002
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 7,000,000 to 8,500,000;
3. To ratify the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Company for fiscal 2000; 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 October 22, 1999 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
October 29, 1999
By Order of the Board of Directors
Jerry Fielder
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
--------------------
1999 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
--------------------
October 29, 1999
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 Tuesday, December 14, 1999 at 9:30 a.m., local time, or at any adjournment or
postponement thereof. The Annual Meeting will be held at the Westin Hotel
located at 5101 Great America Parkway, Santa Clara, California 95054. Only
holders of record of the Company's Common Stock at the close of business on
October 22, 1999 (the "Record Date") are entitled to notice of, and to vote at,
the Annual Meeting. On the Record Date, the Company had 91,057,296 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 October 29, 1999. An annual report
for the fiscal year ended March 28, 1999 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
As the date of the Annual Meeting, the Board of Directors will consist
of five members, divided into three classes. One Class III director is to be
elected at the Annual Meeting to serve a three-year term expiring at the 2002
Annual Meeting of Stockholders or until a successor has been elected and
qualified. The remaining four directors will continue to serve for the terms as
set forth in the table below.
Carl E. Berg has been nominated by the Board of Directors to continue
to serve as the Class III director. Mr. John Carey, also a Class III director,
has decided not to seek re-election. As a result, the Board of Directors has
reduced the number of Class III directors to one (1), effective as of the 1999
Annual Meeting.
Shares represented by the accompanying proxy will be voted for the
election of the nominee recommended by the Board of Directors unless the proxy
is marked in such a manner so as to withhold authority 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 nominee will be unable
to serve.
Directors/Nominee
<TABLE>
The names of the nominee and the other directors of the Company, and
certain information about them, as of October 22, 1999 are set forth below:
<CAPTION>
Name Age Principal Occupation Director Since
- ---- --- -------------------- --------------
<S> <C> <C>
Class I Directors -- Term expiring
at the 2000 Annual Meeting:
Leonard C. Perham 56 Chief Executive Officer of the Company 1986
Jerry G. Taylor 50 President of the Company 1999
Class II Directors -- Term expiring
at the 2001 Annual Meeting:
Federico Faggin(1)(2) 58 Chairman of the Board of Directors of 1992
Synaptics, Inc.
John C. Bolger(1)(2) 53 Private investor 1993
Class III Director -- Term expiring
at the 1999 Annual Meeting:
Carl E. Berg 62 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. In July 1999, Mr. Perham resigned from his position as
President. Prior to joining the Company, Mr. Perham held executive positions at
Optical Information Systems Incorporated and Zilog Inc.
Mr. Taylor has been President of the Company since July 1999. Mr.
Taylor joined the Company as Vice President, Manufacturing and Memory Products
in June 1996, and served as Executive Vice President from January 1998 to July
1999. Prior to joining the Company, Mr. Taylor held engineering positions at
Mostek, Fairchild Semiconductor, Benchmarq Microelectronics, Plano ISD and
Lattice Semiconductor. Mr. Taylor was with Benchmarq Microelectronics from 1987
to 1992, with Plano ISD from 1993 to 1995 and with Lattice Semiconductor from
April 1995 to June 1996.
Mr. Faggin has been a director of the Company since 1992. Mr. Faggin is
Chairman of the Board of Directors of Synaptics, Inc., a computer peripherals
and software company, and since 1986 he has held various positions with
Synaptics, including President, Chief Executive Officer and director. He is a
director of Aptix, Inc., BOPS, Inc., Foveon, Inc. and Globespan, 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, TCSI Corporation, and JNI, Inc.
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 ten (10) meetings
and acted once by unanimous written consent during the fiscal year ended March
28, 1999. 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 outside
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 1999 and acted by written consent
thirteen (13) times.
The Audit Committee, composed of Messrs. Bolger and Faggin, 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) meetings during fiscal 1999.
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 1999.
3
<PAGE>
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.
Each nonemployee Director is initially 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. Initial grants which have been granted in or prior to
fiscal 1999 vest 25% per year commencing on the first anniversary date of the
grant and expire ten years after issuance. Initial option grants to nonemployee
directors after fiscal 1999 will have a term of seven years and become
exercisable as to 25% of the shares subject to such options on the first
anniversary of the date of grant, and then as to 1/36 of the shares each month
thereafter.
Annually after receipt of the initial grant, 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 for the Chair of the Audit
Committee is made on the anniversary of his election to Chair of the Audit
Committee. The annual grants for the other nonemployee directors are made each
year on the date of the Company's annual meeting of stockholders. Annual option
grants in or prior to fiscal 1999 become fully exercisable four (4) years after
the date of the grant and expire ten (10) years after the date of the Grant.
Options granted after fiscal 1999 have a term of seven (7) years and become
exercisable as to 25% of the shares subject to such options on the first
anniversary of the date of grant, and then as to 1/36 of the shares each month
thereafter.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINATED DIRECTOR
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 7,000,000 shares
to 8,500,000 shares (an increase of 1,500,000 shares). The Board of Directors of
the Company approved the proposed amendment described above on April 21, 1999,
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) 727-5111;
facsimile number (408) 654-6943.
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. From time to time, the Board of Directors and stockholders of the
Company have approved increases in the number of shares reserved for issuance
under the Purchase Plan. Most recently, in April 1998, the Board of Directors
amended and restated the Purchase Plan to increase the number of shares of
Common Stock issuable thereunder by 1,950,000 shares to 7,000,000 shares, and on
August 27, 1998, the stockholders of the Company approved the increase. A
maximum of 2,185,962 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 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,
5
<PAGE>
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 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.
6
<PAGE>
Certain Federal Income Tax Information
The following is a general summary as of this date of the federal
income tax consequences to the Company and employees participating in the
Purchase Plan. The federal tax laws may change and the federal, state and local
tax consequences for any participating employee will depend upon his or her
individual circumstances. Each participating employee is encouraged to seek the
advice of a qualified tax advisor regarding the tax consequences for
participation in this Purchase Plan.
The Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Section 423 of the
Internal Revenue Code. The Purchase Plan is not subject to any provisions of the
Employees Retirement Income Security Act of 1974. Under these provisions, no
income will be taxable to a participant until the sale or other disposition of
the shares purchased under the Purchase Plan. Upon such sale or disposition, the
participant will generally be subject to tax in an amount that depends upon the
holding period. If the shares are sold or disposed of more than two years from
the first day of the Participation Period and one year from the date of
purchase, the participant will recognize ordinary income measured as the lesser
of (i) the excess of the fair market value of the shares at the time of such
sale or disposition over the purchase price or (ii) an amount equal to 15% of
the fair market value of the shares as of the first day of the Participation
Period. Any additional gain will be treated as long-term capital gain. If the
shares are held for the periods described above, are sold and the sale price is
less than the purchase price, there is no ordinary income and the participating
employee has a long-term capital loss for the difference between the sale price
and the purchase price. If the shares are sold or otherwise disposed of before
the expiration of the holding periods described above, the participant will
recognize ordinary income generally measured as the excess of the fair market
value of the shares on the date the shares are purchased over the purchase
price. Any additional gain or loss on such sale or disposition will be long-term
or short-term capital gain or loss, depending on the holding period. The Company
is not entitled to a deduction for amounts taxed as ordinary income or capital
gain to a participant except to the extent of ordinary income recognized upon a
sale or disposition of shares prior to the expiration of the holding periods
described above. The Company will treat any transfer of record ownership of
shares as a disposition, unless it is notified to the contrary. In order to
enable the Company to learn of disqualifying dispositions and ascertain the
amount of the deductions to which it is entitled, participating employees will
be required to notify the Company in writing of the date and terms of any
disposition of shares purchased under the 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE AMENDMENT
TO THE 1984 EMPLOYEE STOCK PURCHASE PLAN
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 April 2, 2000,
and the stockholders are being asked to ratify such selection.
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 October 22,
1999, with respect to the beneficial ownership of the Company's Common Stock by:
(a) each director and nominee; (b) each Named Executive Officer (as set forth
below); and (c) all current officers and directors as a group.
SECURITY OWNERSHIP
------------------
<CAPTION>
Shares Percentage of
Name and Address of Beneficial Owner Beneficially Owned(1)(2) Beneficial Ownership
- ------------------------------------ ------------------------ --------------------
<S> <C> <C>
Non-Employee Directors
Carl E. Berg(3).................................... 4,356,131 4.8
D. John Carey(4)................................... 1,087,266 1.2
Federico Faggin(5)................................. 92,000 *
John C. Bolger(6).................................. 20,000 *
Named Executive Officers
Leonard C. Perham(7)............................... 1,125,493 1.2
Glenn Henry(8)..................................... 230,706 *
Jerry G. Taylor(9)................................. 158,125 *
Chuen-Der Lien(10)................................. 222,875 *
David G. Cote(11).................................. 73,781 *
All current Executive Officers
and Directors as a Group (15 persons)(12)(13)...... 7,652,529 8.2
<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 October 22, 1999, have been
exercised.
(3) Represents 2,450,231 shares held of record by Mr. Berg, 1,849,900 shares
held of record by West Coast Venture Capital, L.P., of which Mr. Berg is
a general partner and 56,000 shares subject to options exercisable within
60 days of October 22, 1999.
(4) Represents 842,274 shares held of record by Mr. Carey, 7,278 shares held
of record by Mr. Carey's 401(k) plan account, 5,690 shares held of record
by Mr. Carey's daughter and 232,024 shares subject to options exercisable
within 60 days of October 22, 1999. Mr. Carey has been a Class III
director of the Company since 1980, but has decided not to seek
re-election. His term expires as of the 1999 Annual Meeting.
(5) Includes 68,000 shares subject to options exercisable within 60 days of
October 22, 1999.
(6) Represents 20,000 shares subject to options exercisable within 60 days of
October 22, 1999.
(7) Represents 117,400 shares beneficially owned by Mr. Perham, 8,286 shares
held of record by Mr. Perham's 401(k) plan account and 999,807 shares
subject to options exercisable within 60 days of October 22, 1999.
(8) Represents 5,082 shares beneficially owned by Mr. Henry and 225,624
shares subject to options exercisable within 60 days of October 22, 1999.
(9) Represents 158,125 shares subject to options exercisable within 60 days
of October 22, 1999.
(10) Represents 22,192 shares beneficially owned by Mr. Lien, 2,140 shares
held of record by Mr. Lien's 401(k) plan account and 198,543 shares
subject to options exercisable within 60 days of October 22, 1999.
8
<PAGE>
(11) Represents 6,515 shares beneficially owned by Mr. Cote and 67,266 shares
subject to options exercisable within 60 days of October 22, 1999.
(12) Includes the shares described in notes 3-7 and 9-11, and an additional
30,423 shares and 486,435 shares subject to options exercisable within 60
days of October 22, 1999 held by executive officers not listed in the
table.
(13) Excludes shares described in note 9 as Mr. Henry is no longer an
executive officer or employee of the Company.
</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 28, 1999,
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.
Each year, the Company's Human Resources Department develops executive
compensation data from a nationally recognized survey for a group of similar
size high technology companies and provides this data to the Compensation and
Stock Option Committee. The factors used to determine the participants in the
survey include 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 Electronics (Semiconductors) 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 reviewed, 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 approximately 5% over
salaries for fiscal 1998 annualized for executive officers joining the Company
during fiscal 1998.
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
operating income 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
1999. The Company's Chief Executive Officer did not receive a bonus for fiscal
1999, but has received a payment of $1,181 under the Profit Sharing Plan.
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 1999, the Company provided for $315,000 in contributions to the
Profit Sharing Plan, including approximately 1% of pre-tax profit which is
contributed semiannually to the employees' Section 401(k) Plan accounts.
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.
During fiscal 1999, 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 1999." 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 provide incentives to 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 incentive
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. Except as
otherwise provided by the Compensation and Stock Option Committee, these options
generally vest as to 25% of the total shares one (1) to two (2) years after the
date of grant and then monthly over the next three years.
11
<PAGE>
Fiscal 1999 CEO Compensation
In evaluating the compensation of Mr. Perham, President and Chief
Executive Officer of the Company, for services rendered in fiscal 1999, 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 1999 financial results and
compared them with the Company's financial results in fiscal 1998 and with the
companies in the S&P Electronics Index. The Compensation and Stock Option
Committee reviewed the Company's net loss for fiscal 1999, the Company's
decrease in earnings per share in fiscal 1999, the Company's decrease in
revenues for fiscal 1999 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 1999.
In fiscal 1999, Mr. Perham's base salary was decreased to $334,248
(compared to $339,393 in fiscal 1998).
In fiscal 1999, Mr. Perham received a payment of $1,181 under the
Profit Sharing Plan and $29 in profit sharing under the Section 401(k) Plan.
During fiscal 1999, Mr. Perham was granted no new options. Mr. Perham
did have previously granted options for 700,000 shares repriced during fiscal
1999 as part of the Company's 1998 Option Repricing Program (described below)
that was offered to all executive officers and employees of the Company.
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).
12
<PAGE>
1998 Option Repricing Program
Competition for skilled engineers and other key employees in the
semiconductor industry is intense and the use of significant stock options for
retention and motivation of such personnel is widespread in the high technology
industries. The Compensation and Stock Option Committee believes that stock
options are a critical component of the compensation offered by the Company to
promote longer-term retention of key employees, motivate high levels of
performance and recognize employee contributions in the success of the Company.
The market price of the Company's Common Stock decreased substantially from a
high of $16.13 in the fourth quarter of fiscal 1998 to a low of $4.22 in the
second quarter of fiscal 1999. In light of this substantial decline in the
market price, the Compensation and Stock Option Committee believed that the
larger numbers of outstanding stock options with exercise prices in excess of
the actual market price were no longer an effective tool to encourage employee
retention or to motivate high levels or performance. As a result, the
Compensation and Stock Option Committee approved, on July 15, 1998, an option
repricing program.
All executive officers and employees and certain consultants who had
been granted stock options were eligible to participate. Under the program, the
eligible optionees were permitted to exchange one or more of their existing
stock options with an exercise price not less than $8.125 ("Old Options") for
new stock options ("Repriced Options") covering a number of shares equal to the
number of unexercised shares covered by the applicable Old Option. Each
exchanged Old Option was cancelled. The exercise price of the Repriced Options
was equal to the closing market price ($7.125) on July 14, 1998, the trading
date preceding the date on which the Committee approved the repricing plan. The
schedules on which Repriced Options became exercisable were, subject to the
exercise black-out period described below, identical to the applicable exchanged
and cancelled Old Options. Notwithstanding the foregoing and except for the
circumstances described below, each Repriced Option was prohibited from being
exercised, in whole or in part (notwithstanding any amount that may have
previously been exercisable) until July 15, 1999, at which time the same number
of shares that would have been exercisable on July 15, 1999, under the Old
Option become exercisable under the Repriced Option.
<TABLE>
Options subject to repricing from April 1, 1989 through March 31, 1999
for each of the Company's executive officers at the end of fiscal 1999 are
listed in the following table:
<CAPTION>
Number Of
Securities Market Price Length Of Original
Underlying Of Stock At Exercise Option Term
Options/ Time Of Price At Time New Remaining At Date
Repriced Or Repricing Or Of Repricing Exercise If Repricing Or
Name Date Amended (#) Amendment Or Amendment Price Amendment
- ------------------------- ---------- ---------------- -------------- --------------- ----------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Boisseree, Brian 7/15/98 24,000 $7.1250 $12.6250 $7.1250 1 Years 212 Days
7/15/98 4,500 7.1250 10.0000 7.1250 4 Years 212 Days
7/15/98 4,500 7.1250 10.3750 7.1250 6 Years 212 Days
7/15/98 17,500 7.1250 10.8750 7.1250 2 Years 353 Days
7/15/98 20,000 7.1250 9.4375 7.1250 3 Years 171 Days
Carey, D. John 11/29/88 17,776 4.2500 5.6250 4.2500 5 Years 100 Days
11/29/88 72,224 4.2500 5.2650 4.2500 5 Years 100 Days
2/2/90 90,000 2.5625 2.9600 2.9625 2 Years 261 Days
2/2/90 17,776 2.5625 4.2500 2.5625 3 Years 300 Days
2/2/90 72,224 2.5625 4.2500 2.5625 3 Years 300 Days
2/2/90 21,332 2.5625 4.6875 2.5625 4 Years 361 Days
2/2/90 68,668 2.5625 4.6875 2.5625 4 Years 361 Days
10/15/90 300,000 1.8125 2.3767 1.8125 6 Years 167 Days
10/15/90 90,000 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 15,820 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 64,280 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 21,332 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 68,668 1.8125 2.5625 1.8125 9 Years 110 Days
Cote, David G. 7/15/98 100,000 $7.1250 $10.8750 $7.1250 2 Years 273 Days
13
<PAGE>
Number Of
Securities Market Price Length Of Original
Underlying Of Stock At Exercise Option Term
Options/ Time Of Price At Time New Remaining At Date
Repriced Or Repricing Or Of Repricing Exercise If Repricing Or
Name Date Amended (#) Amendment Or Amendment Price Amendment
- ------------------------- ---------- ---------------- -------------- --------------- ----------- ----------------------
7/15/98 20,000 7.1250 10.3750 7.1250 6 Years 273 Days
Henry, Glenn 1/15/96 150,000 9.8750 18.0313 9.8750 9 Years 108 Days
1/15/96 100,000 9.8750 18.0313 9.8750 9 Years 108 Days
7/15/98 150,000 7.1250 9.8750 7.1250 1 Years 184 Days
7/15/98 100,000 7.1250 9.8750 7.1250 6 Years 251 Days
7/15/98 28,125 7.1250 11.9375 7.1250 3 Years 251 Days
7/15/98 21,094 7.1250 10.8750 7.1250 4 Years 251 Days
7/15/98 25,000 7.1250 10.3750 7.1250 6 Years 251 Days
7/15/98 30,781 7.1250 12.3750 7.1250 4 Years 251 Days
7/15/98 40,000 7.1250 9.1250 7.1250 7 Years 149 Days
Hunter, Michael 7/15/98 50,000 7.1250 9.8750 7.1250 1 Years 184 Days
7/15/98 24,000 7.1250 13.6250 7.1250 2 Years 143 Days
7/15/98 18,500 7.1250 10.0000 7.1250 4 Years 184 Days
7/15/98 18,500 7.1250 10.3750 7.1250 6 Years 184 Days
Krock, Alan F. 7/15/98 3,375 7.1250 10.0000 7.1250 4 Years 212 Days
7/15/98 5,400 7.1250 10.3750 7.1250 6 Years 212 Days
7/15/98 50,000 7.1250 9.4375 7.1250 3 Years 171 Days
7/15/98 23,125 7.1250 9.4375 7.1250 2 Years 353 Days
7/15/98 18,000 7.1250 9.4375 7.1250 1 Years 212 Days
Lien, Chuen-Der 2/2/90 12,240 2.5625 2.9600 2.5625 2 Years 190 Days
2/2/90 2,190 2.5625 4.2500 2.5625 3 Years 187 Days
2/2/90 2,230 2.5625 4.2500 2.5625 3 Years 187 Days
2/2/90 3,400 2.5625 4.7500 2.5625 4 Years 195 Days
10/15/90 12,240 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 2,190 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 2,230 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 3,400 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 2,950 1.8125 2.0625 1.8125 9 Years 336 Days
10/15/90 14,850 1.8125 2.0625 1.8125 9 Years 336 Days
1/15/96 32,000 9.8750 10.5000 9.8750 8 Years 213 Days
1/15/96 40,000 9.8750 32.0625 9.8750 9 Years 212 Days
1/15/96 24,000 9.8750 32.0625 9.8750 9 Years 212 Days
7/15/98 32,000 7.1250 9.8750 7.1250 2 Years 26 Days
7/15/98 40,000 7.1250 9.8750 7.1250 3 Years 26 Days
7/15/98 24,000 7.1250 9.8750 7.1250 1 Years 184 Days
7/15/98 30,000 7.1250 10.1250 7.1250 5 Years 26 Days
7/15/98 25,000 7.1250 10.3750 7.1250 6 Years 26 Days
7/15/98 5,000 7.1250 12.3750 7.1250 6 Years 26 Days
14
<PAGE>
Number Of
Securities Market Price Length Of Original
Underlying Of Stock At Exercise Option Term
Options/ Time Of Price At Time New Remaining At Date
Repriced Or Repricing Or Of Repricing Exercise If Repricing Or
Name Date Amended (#) Amendment Or Amendment Price Amendment
- ------------------------- ---------- ---------------- -------------- --------------- ----------- ----------------------
Menache, Jack 2/2/90 60,000 $2.5625 $4.7500 $2.5625 4 Years 228 Days
10/15/90 60,000 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 20,000 1.8125 2.5625 1.8125 9 Years 274 Days
1/15/96 28,000 9.8750 10.1563 9.8750 8 Years 274 Days
1/15/96 21,000 9.8750 19.8750 9.8750 9 Years 273 Days
7/15/98 28,000 7.1250 9.8750 7.1250 2 Years 65 Days
7/15/98 21,000 7.1250 9.8750 7.1250 3 Years 65 Days
7/15/98 21,000 7.1250 10.1250 7.1250 5 Years 65 Days
7/15/98 17,500 7.1250 10.3750 7.1250 6 Years 65 Days
7/15/98 25,000 7.1250 9.4375 7.1250 7 Years 171 Days
Perham, Leonard C. 11/29/88 17,776 4.2500 5.6250 4.2500 5 Years 100 Days
11/29/88 72,224 4.2500 5.6250 4.2500 5 Years 100 Days
2/2/90 90,000 2.5625 2.9600 2.5625 2 Years 261 Days
2/2/90 17,776 2.5625 4.2500 2.5625 3 Years 300 Days
2/2/90 72,224 2.5625 4.2500 2.5625 3 Years 300 Days
2/2/90 21,332 2.5625 4.6875 2.5625 4 Years 361 Days
2/2/90 68,668 2.5625 4.6875 2.5625 4 Years 361 Days
10/15/90 24,999 1.8125 2.2500 1.8125 5 Years 358 Days
10/15/90 30,000 1.8125 2.2500 1.8125 5 Years 358 Days
10/15/90 300,000 1.8125 2.3767 1.8125 6 Years 6 Days
10/15/90 90,000 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 17,776 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 72,224 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 21,332 1.8125 2.5625 1.8125 9 Years 110 Days
10/15/90 68,668 1.8125 2.5625 1.8125 9 Years 110 Days
1/15/96 160,000 9.8750 10.1563 9.8750 8 Years 274 Days
1/15/96 120,000 9.8750 19.8750 9.8750 9 Years 273 Days
7/15/98 160,000 7.1250 9.8750 7.1250 2 Years 80 Days
7/15/98 120,000 7.1250 9.8750 7.1250 3 Years 80 Days
7/15/98 120,000 7.1250 9.1250 7.1250 5 Years 80 Days
7/15/98 100,000 7.1250 10.3750 7.1250 6 Years 80 Days
7/15/98 100,000 7.1250 11.5625 7.1250 7 Years 83 Days
7/15/98 100,000 7.1250 11.5625 7.1250 7 Years 83 Days
Taylor, Jerry G. 7/15/98 120,000 7.1250 10.1250 7.1250 1 Years 345 Days
7/15/98 30,000 7.1250 11.3593 7.1250 8 Years 243 Days
7/15/98 25,000 7.1250 10.3750 7.1250 5 Years 345 Days
7/15/98 5,000 7.1250 12.3750 7.1250 5 Years 345 Days
7/15/98 30,000 7.1250 9.4375 7.1250 7 Years 171 Days
COMPENSATION AND STOCK OPTION COMMITTEE
John C. Bolger Federico Faggin
</TABLE>
15
<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 1999 for services rendered in all capacities to the Company for the
fiscal years ended 1999, 1998 and 1997 (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..... 1999 $334,248 $ 1,181 $ -- 700,000 (4) $2,029
Chief Executive Officer 1998 339,393 1,506 -- 300,000 35
1997 351,848 -- -- 120,000 --
Glenn Henry (5)....... 1999 300,000 57,446 -- 425,000 (4) --
Former Senior Vice 1998 211,539 223,333 -- 116,875 --
President 1997 200,000 109,000 -- 28,125 --
1999
1998
Jerry G. Taylor (6)... 1997 268,524 762 6,440 370,000 (4) 29
President 211,409 50,906 45,571 90,000 35
131,539 150,000 23,275 150,000 --
Chuen-Der Lien........ 1999 217,260 19,601 -- 231,543 (4) 29
Vice President, Chief 1998 213,860 23,920 -- 30,000 4,000
Technical Officer 1997 191,557 407,224 -- 30,000 --
David G. Cote (7)..... 1999 190,523 15,538 15,000 140,600 (4) 24
Vice President, Sales 1998 165,622 20,000 -- 120,000 --
and Marketing 1997 -- -- -- -- --
<FN>
- ---------------
(1) Amounts listed in this column for fiscal 1999, 1998 and 1997 include cash
paid under the Company's Profit Sharing Plan, as follows: Mr. Perham,
$1,181, $1,506 and $0; Mr. Henry, $0, $0 and $0; Mr. Taylor, $762, $906
and $0; Mr. Lien, $768, $920 and $12,374; and Mr. Cote, $538, $0 and $0.
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. Cote represents commissions.
(3) Amounts listed in this column represent the Company's contributions to
individual 401(k) accounts of the Named Executive Officers, as well as
tenure bonuses of $2,000 for Mr. Perham and $4,000 for Mr. Lien.
(4) Includes options for Common Stock granted prior to fiscal 1999 and
repriced in fiscal 1999 as follows: Mr. Perham, 700,000 shares; Mr.
Henry, 395,000 shares; Mr. Taylor, 210,000 shares; Mr. Lien, 156,000
shares; and Mr. Cote, 120,000 shares.
(5) As a result of the Company's sale of its Centaur Technology, Inc.,
subsidiary, Mr. Henry has left the Company on September 22, 1999.
(6) In July 1999, Mr. Perham resigned as President of the Company and Mr.
Taylor was appointed President.
(7) Mr. Cote joined the Company in April 1997.
</FN>
</TABLE>
16
<PAGE>
<TABLE>
The following table contains information concerning the grant of stock
options under the Company's 1994 Option Plan to the Named Executive Officers
during fiscal 1999. In addition, there are shown the hypothetical gains or
"option spreads" that would exist for the respective options based on assumed
rates of annual compound stock appreciation of 5% and 10% from the date of grant
over the full option term. Actual gains, if any, on option exercises are
dependent on the future performance of the Company's Common Stock. The
hypothetical gains shown in this table are not intended to forecast possible
future appreciation, if any, of the stock price.
<CAPTION>
Option Grants in Fiscal 1999
Potential Realizable
Individual Grants Value
- ------------------------------------------------------------------------------------ At Assumed Annual Rates
Number of % of Total of Stock Price
Shares Options Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees Price Expiration -----------------------
Name Granted(2) in Fiscal 1999 ($/Share)(3) Date 5% 10%
- -------------------- ----------- -------------- ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Leonard C. Perham..... 700,000(4) 4.3% $7.1250 7/14/05 $2,029,475 $4,729,189
Glenn Henry........... 395,000(4) 2.4 7.1250 7/14/05 1,145,204 2,668,614
30,000 0.2 7.0625 3/23/06 97,666 232,444
Jerry G. Taylor....... 30,000(5) 0.2 7.0625 6/24/05 86,613 201,981
210,000(4) 1.3 7.1250 7/14/05 608,843 1,418,757
80,000 0.5 4.3125 9/04/05 139,736 325,379
50,000 0.3 4.3125 9/04/05 87,335 203,362
Chuen-Der Lien........ 543(6) 0.0 7.0625 5/15/05 1,539 3,578
156,000(4) 1.0 7.1250 7/14/05 452,283 1,053,934
30,000 0.2 7.0625 8/10/05 88,494 207,091
45,000(7) 0.3 4.3125 8/14/05 77,837 180,964
David G. Cote......... 600(6) 0.0 7.0625 5/15/05 1,700 3,954
120,000(4) 0.7 7.1250 7/14/05 347,910 810,718
20,000 0.1 7.0625 4/14/06 65,718 156,669
<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 25% approximately one (1) to two
(2) years after the date of the grant, and thereafter in thirty six (36)
monthly equal installments. 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) Represents options granted prior to fiscal 1999 and repriced in fiscal
1999. These options continue to vest based on the vesting schedule of the
replaced options.
(5) Vests 100% approximately four (4) years after the date of the grant.
(6) Vests 100% approximately one (1) year after the date of the grant.
(7) Vests 50% approximately two (2) years after the date of the grant, and
100% one (1) year thereafter.
</FN>
</TABLE>
17
<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 1999, 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 28, 1999 and the value of such options
based on the closing price of the Company's Common Stock at fiscal year-end
($6.1875).
Aggregated Option Exercises in Fiscal 1999 and Fiscal Year-End Option Values
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End at Fiscal Year-End
(#)(1) ($)(2)
---------------------------- ---------------------------
Shares
Acquired on Valued
Name Exercise (#) Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Leonard C. Perham....... 100,000 $531,562 909,807 490,000 $1,818,543 $ --
Glenn Henry............. -- -- 250,000 175,000 -- --
Jerry G. Taylor......... -- -- 82,500 287,500 -- 243,750
Chuen-Der Lien.......... -- -- 161,333 152,210 208,625 84,375
David G. Cote........... -- -- 47,916 92,684 -- --
<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 26,
1999, the last day of trading for fiscal 1999.
</FN>
</TABLE>
EMPLOYMENT CONTRACT
On January 25, 1999, the Company entered into an employment agreement
with Glenn Henry, who is an executive officer and a Senior Vice President of the
Company, as well as President of Centaur Technology, Inc. ("Centaur"), a
wholly-owned subsidiary of the Company. Pursuant to the Agreement, Mr. Henry
serves at the will of the Company's Board of Directors. In connection with the
Company's sale of its Centaur Technology, Inc. subsidiary, Mr. Henry's
employment agreement terminated, and Mr. Henry left the Company on September 22,
1999.
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 1999.
18
<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.
<TABLE>
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 (Semiconductors) 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.
[OBJECT OMITTED]
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T)
<CAPTION>
Cumulative Total Return
---------------------------------------------------------------------------
3/94 3/95 3/96 3/97 3/98 3/99
<S> <C> <C> <C> <C> <C> <C>
Integrated Device Technology, Inc. 100 146 90 79 111 43
S&P 500 Index 100 116 153 183 271 321
S&P Electronics (Semiconductor) Index 100 120 132 281 307 465
</TABLE>
19
<PAGE>
CERTAIN TRANSACTIONS
During fiscal 1998, Carl Berg, a director of the Company, acted as an
uncompensated agent on behalf of a subsidiary of the Company in acquiring
parcels of land for future corporate development. In September 1999, that
subsidiary of the Company sold the land at its acquisition price to Acquisition
Technology, Inc., of which Mr. Berg is president.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
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.
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 2000 Annual Meeting must be received by the
Company no later than March 12, 2000, as the Company expects to mail proxy
statements for its 2000 Annual Meeting in July 2000. Stockholders wishing to
bring a proposal before the annual meeting for 2000 (but not include it in the
Company's proxy material(s) must provide written notice of such proposal to the
Secretary of the Company at the principal executive offices of the Company by
May 26, 2000.
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
Jerry Fielder
Secretary
Dated: October 29, 1999
Santa Clara, California
20
<PAGE>
INTEGRATED DEVICE TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 14, 1999
The undersigned hereby appoints Jerry Taylor and David Mersten, 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 the Westin Hotel located at 5101 Great America Parkway,
Santa Clara, California 95054 on December 14, 1999, at 9:30 a.m. P.S.T., and any
adjournment or postponement 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
Side
-------------
<PAGE>
<TABLE>
----- Please mark
X your choices
----- like this
<CAPTION>
- ---------------------------------- -----------------------------------
ACCOUNT NUMBER COMMON
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1. ELECTION FOR WITHHELD FOR AGAINST ABSTAIN -----------------------------------
OF CLASS III [ ] [ ] 2. AMENDMENT OF 1984 [ ] [ ] [ ] The Board of Directors recommends a
DIRECTOR EMPLOYEE STOCK PURCHASE vote FOR the nominee for election
PLAN and FOR Proposals 2 and 3. THIS
PROXY WILL BE VOTED AS DIRECTED. IN
Nominee: Carl E. Berg THE ABSENCE OF DIRECTION, THIS
FOR AGAINST ABSTAIN PROXY WILL BE VOTED FOR THE
3. RATIFICATION OF [ ] [ ] [ ] COMPANY'S NOMINEE FOR ELECTION AND
SELECTION OF FOR PROPOSALS 2 AND 3.
PRICEWATERHOUSECOOPERS
LLP, AS THE COMPANY'S In their discretion, the proxy
INDEPENDENT ACCOUNTANTS holders are authorized to vote upon
such other business as may properly
come before the meeting or any
adjournment or postponement 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: , 1999
----------------------
-----------------------------------
-----------------------------------
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>
<PAGE>
SKU # IDT-PS-99
