SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment no. 1)
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 by
[ ] Definitive Additional Materials Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
INTEGRATED DEVICE TECHNOLOGY, INC.
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(Name of Registrant as Specified in Its Charter)
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(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.
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(2) Aggregate number of securities to which transactions applies:
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to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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[ ] 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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<PAGE>
INTEGRATED DEVICE TECHNOLOGY, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 22, 2000
----------------
Notice is hereby given that the 2000 Annual Meeting of the Stockholders (the
"Annual Meeting") of Integrated Device Technology, Inc., a Delaware corporation
(the "Company"), will be held on Friday, September 22, 2000, at 9:30 a.m., local
time, at the Santa Clara Marriott Hotel located at 2700 Mission College
Boulevard, Santa Clara, California, for the following purposes:
1. To elect one Class I director for a term to expire at the 2003 Annual
Meeting of Stockholders;
2. To approve an amendment to the Company's 1994 Stock Option Plan to
extend the term of the Plan from May 3, 2004 to July 26, 2010;
3. To approve an amendment to the Company's Certificate of Incorporation
to increase the authorized number of shares issuable by the Company
from 210,000,000 to 360,000,000;
4. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Company for fiscal 2001; and
5. 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 26, 2000 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 31, 2000
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>
[LOGO]
INTEGRATED DEVICE TECHNOLOGY, INC.
2975 Stender Way
Santa Clara, California 95054
(408) 727-6116
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2000 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
--------------------
July 31, 2000
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
Friday, September 22, 2000 at 9:30 a.m., local time, or at any adjournment or
postponement thereof. The Annual Meeting will be held at the Santa Clara
Marriott Hotel located at 2700 Mission College Boulevard, Santa Clara,
California 95054. Only holders of record of the Company's Common Stock at the
close of business on July 26, 2000 (the "Record Date") are entitled to notice
of, and to vote at, the Annual Meeting. On the Record Date, the Company had
104,102,707 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
31, 2000. An annual report for the fiscal year ended April 2, 2000 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. At the Annual Meeting, only
one director is to be elected.
The director 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 the director. Proposal Nos. 2, 3 and 4 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.
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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 DIRECTOR
The Board of Directors currently consists of four members and one vacancy,
divided into three classes. One Class I director is to be elected at the Annual
Meeting to serve a three-year term expiring at the 2003 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.
Jerry G. Taylor has been nominated by the Board of Directors to continue to
serve as a Class I director.
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 July 26, 2000 are set forth below:
<CAPTION>
Name Age Principal Occupation Director Since
---- --- -------------------- --------------
<S> <C> <C> <C>
Class I Director -- Term expiring
at the 2000 Annual Meeting:
Jerry G. Taylor 51 Chief Executive Officer and President of 1999
the Company
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, Corporate Director 1993
Class III Director - Term expiring
at the 2002 Annual Meeting:
Carl E. Berg 63 Partner, Berg & Berg Industrial 1982
Developers
<FN>
---------------
(1) Member of the Compensation and Stock Option Committee.
(2) Member of the Audit Committee.
</FN>
</TABLE>
Mr. Taylor joined the Company as Vice President, Memory Products in June
1996, and was elected Executive Vice President, Manufacturing and Memory
Products, in January 1998. Mr. Taylor became President and was appointed to the
Board of Directors in July 1999. He was named Chief Executive Officer in
December 1999. Prior to joining the Company, Mr. Taylor held engineering
positions at Mostek, Fairchild Semiconductor,
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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 through 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., GlobeSpan, Inc. and Avanex
Corporation.
Mr. Bolger has been a director of the Company since 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
Mission West Properties, Inc., Sanmina Corporation, TCSI Corporation, JNI
Corporation and Wind River Systems, 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, Inc. and Videonics, Inc.
Board Meetings and Committees
The Board of Directors of the Company held a total of thirteen (13) meetings
and acted by unanimous written consent three (3) times during the fiscal year
ended April 2, 2000. 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
non-employee 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 three (3) meetings during fiscal 2000 and acted by written
consent twelve (12) 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 four (4) meetings during fiscal 2000.
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 2000.
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 non-employee director is initially granted an option to purchase 20,000
shares of the Company's Common Stock on the date of such non-employee director's
first election or appointment to the Board. In addition, the non-employee
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 non-employee 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 non-employee 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.
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<PAGE>
Annually after receipt of the initial grant, each non-employee director is
granted an option to purchase 5,000 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 or her election to Chair of the
Audit Committee. The annual grants for the other non-employee 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 remaining shares
each month thereafter.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF
THE NOMINATED DIRECTOR
PROPOSAL NO. 2 - APPROVAL OF AMENDMENT TO THE 1994 STOCK OPTION PLAN
Stockholders are being asked to approve an amendment to the Company's 1994
Stock Option Plan (the "1994 Option Plan") to extend the current term of the
1994 Option Plan from May 3, 2004 to July 26, 2010. The Board of Directors of
the Company approved the proposed amendment described above on July 26, 2000 to
be effective upon stockholder approval.
Below is a summary of the principal provisions of the 1994 Option Plan
assuming approval of the above amendment, which summary is qualified in its
entirety by reference to the full text of the 1994 Option Plan.
1994 Option Plan History
In May 1994, the Board of Directors of the Company adopted the 1994 Option
Plan and on August 25, 1994, it was approved by the stockholders of the Company.
3,250,000 shares of Common Stock were originally reserved for issuance under the
1994 Option Plan. In May 1995, the Board of Directors approved an amendment to
the 1994 Option Plan to increase the number of shares reserved for issuance
thereunder to 7,250,000, and on August 24, 1995 the stockholders of the Company
approved the amendment. In April 1996, the Board of Directors approved an
amendment to the 1994 Option Plan to increase the number of shares reserved for
issuance thereunder to 10,750,000, and on August 28, 1996 the stockholders of
the Company approved the amendment. In April 1997, the Board of Directors
approved an amendment to the 1994 Option Plan to increase the number of shares
reserved for issuance thereunder to 13,500,000, and on August 28, 1997 the
stockholders of the Company approved the amendment. In addition, up to
10,000,000 shares of Common Stock issuable upon exercise of stock options
available for future grant or currently outstanding pursuant to the Company's
1985 Option Plan that expire or become unexercisable for any reason without
having been exercised in full are available for issuance under the 1994 Option
Plan. The 1994 Option Plan was intended to replace the 1985 Option Plan, which
the Board of Directors terminated upon stockholder approval of the 1994 Option
Plan. The Board of Directors further amended the 1994 Stock Option Plan in
January 2000 as it relates to accelerated vesting for non-employee directors in
the event of a change of control as described in detail below.
Description of the 1994 Stock Option Plan
Purpose. The purpose of the 1994 Option Plan is to provide incentives to
attract, retain and motivate eligible persons whose present and potential
contributions are important to the success of the Company and its affiliates, by
offering them an opportunity to participate in the Company's future performance
through awards of stock options. The Board of Directors believes that the use of
stock options as a supplement to other forms of compensation paid by the Company
is desirable to secure for the Company and its stockholders the advantages of
stock ownership by participants, upon whose efforts, initiative and judgment the
Company is largely dependent for the successful conduct of its business.
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<PAGE>
Plan Terms. The 1994 Option Plan provides for the grant of incentive stock
options ("ISOs") and nonstatutory stock options ("NSOs") to employees of the
Company and its affiliates and the grant of NSOs to independent contractors,
consultants and advisors of the Company and its affiliates, including directors.
As of July 26, 2000, 4,710,832 shares were available for issuance under the 1994
Option Plan.
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. If an employee owns more than 10% of the total combined voting power
of all classes of the Company's stock, the exercise price of an ISO must be at
least 110% of such fair market value. If any option is forfeited or terminates
for any reason before being exercised, then the shares of Common Stock subject
to such option shall again become available for future awards under the 1994
Option Plan.
Plan Administration. The 1994 Option Plan is administered, subject to its
terms, by the Compensation and Stock Option Committee, whose members are
designated by the Board of Directors. The members of the Compensation and Stock
Option Committee, John C. Bolger and Federico Faggin, are "non-employee
directors" within the meaning of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and "outside directors"
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). Subject to the terms and conditions of the 1994 Option
Plan, the Stock Option Committee, in its discretion, designates those
individuals who are to be granted options, whether the options will be ISOs or
NSOs, the number of shares for which an option or options will be awarded, the
exercise price of the option, the periods during which the option may be
exercised and other terms and conditions of the option. The interpretation or
construction by the Compensation and Stock Option Committee of any provision of
the 1994 Option Plan or of any option granted under it is final and binding on
all optionees.
Stock Option Agreements. Each option is evidenced by a written stock option
agreement adopted by the Compensation and Stock Option Committee. Each option
agreement states when and the extent to which options become exercisable, and
the agreements need not be uniform. Options expire not more than ten years after
the date of grant (five years in the case of an ISO granted to a 10%
stockholder), or sooner upon an optionee's termination of employment. With
respect to options granted as ISOs, option agreements contain such other
provisions as necessary to comply with Section 422 of the Code. The exercise
price may be paid in cash or check or, at the discretion of the Compensation and
Stock Option Committee, by delivery of fully paid shares of Common Stock of the
Company that have been owned by the optionee for more than six months, by waiver
of compensation due or accrued to an optionee for services rendered, through a
"same day sale" or "margin commitment" with a broker-dealer that is a member of
the National Association of Securities Dealers, or by any combination of the
foregoing.
Termination of Employment. Options granted under the 1994 Option Plan
terminate three months after the optionee ceases to be employed by the Company
unless (i) the termination of employment is due to permanent and total
disability, in which case the option may, but need not, provide that it may be
exercised at any time within 12 months of termination to the extent the option
was exercisable on the date of termination; (ii) the optionee dies while
employed by the Company or within three months after termination of employment,
in which case the option may, but need not, provide that it may be exercised at
any time within 18 months after death to the extent the option was exercisable
on the date of death; or (iii) the option by its terms specifically provides
otherwise. In no event will an option be exercisable after the expiration date
of the option.
Amendment and Termination. The Board of Directors may at any time terminate
or amend the 1994 Option Plan. Rights and obligations under any award granted
before amendment shall not be materially changed or adversely affected by such
amendment except with the consent of the optionee. Amendments to the 1994 Option
Plan are subject to the approval of the Company's stockholders only to the
extent required by applicable laws, regulations or rules. The 1994 Option Plan
will continue in effect (assuming approval of the proposed amendment) until July
26, 2010, subject to earlier termination by the Board of Directors.
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<PAGE>
Accelerated Vesting. In the event of (i) a merger or acquisition in which
the Company is not the surviving entity (except for a transaction to change the
state in which the Company is incorporated), (ii) the sale, transfer or other
disposition of all or substantially all of the assets of the Company or (iii)
any other corporate reorganization or business combination that is not approved
by the Board of Directors and in which the beneficial ownership of 50% or more
of the Company's voting stock is transferred, all options outstanding under the
1994 Option Plan shall become fully exercisable immediately before the effective
date of the transaction. Options will not become fully exercisable, however, if
and to the extent that options are either to be assumed by the successor
corporation or parent thereof or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation or parent
thereof. Upon the effective date of such transaction, all options outstanding
will terminate and cease to be exercisable, except to the extent they were
previously exercised or assumed by the successor corporation or its parent. In
the event of (i) a tender or exchange offer that is not recommended by the
Company's Board of Directors for 25% or more of the Company's voting stock by a
person or related group of persons other than the Company or an affiliate of the
Company or (ii) a contested election for the Board of Directors that results in
a change in a majority of the Board within any period of 24 months or less, all
options outstanding under the 1994 Option Plan will become fully exercisable 15
days following the effective date of such event. In such event, all options
outstanding under the 1994 Option Plan will remain exercisable until the
expiration or sooner termination of the option term specified in the option
agreement. In the event of (i) a dissolution or liquidation of the Company, (ii)
a merger in which the Company is not the surviving corporation, (iii) a sale of
substantially all of the Company's assets, (iv) any other transaction which
qualifies as a "corporate transaction" under Section 424 of the Code wherein the
Company's stockholders give up all of their equity interest in the Company or
(v) a change in the composition of the Board of Directors by reason of a
contested election in which a majority of the Board of Directors is not
comprised of those individuals who were members of the Board of Directors prior
to such election, then all outstanding options under the 1994 Option Plan
granted to non-employee directors shall become fully vested and exercisable
prior to the consummation of such event, at such times and on such conditions as
the Compensation and Stock Option Committee determines. However, in the event
that the Board of Directors receives notice from the Securities and Exchange
Commission that such accelerated vesting for non-employee directors would
preclude pooling of interests accounting treatment for any proposed business
combination, and the Board of Directors desires such treatment, then the
provisions allowing such accelerated vesting shall be null and void.
Acceleration of the exercisability of options may have the effect of
depressing the market price of the Company's Common Stock and denying
stockholders a control premium that might otherwise be paid for their shares in
such a transaction and may have the effect of discouraging a proposal for
merger, a takeover attempt or other efforts to gain control of the Company.
Adjustments Upon Changes in Capitalization. If the number of shares of
Common Stock outstanding is changed by a stock dividend, stock split, reverse
stock split, recapitalization, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration or
by certain types of acquisitions of the Company, the Compensation and Stock
Option Committee will make appropriate adjustments in the aggregate number of
securities subject to the 1994 Option Plan and the number of securities and the
price per share subject to outstanding options. In the event of the proposed
dissolution or liquidation of the Company, the Board of Directors must notify
optionees at least 15 days before such proposed action. To the extent that
options have not previously been exercised, such options will terminate
immediately before consummation of such proposed action.
Nontransferability. The rights of an optionee under the 1994 Option Plan are
not assignable by such optionee, by operation of law or otherwise, except by
will or the applicable laws of descent and distribution or in the event of an
optionee's divorce or dissolution of marriage. Options granted under the 1994
Option Plan are exercisable during the optionee's lifetime only by the optionee
or the optionee's guardian or legal representative.
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Federal Income Tax Information
Incentive Stock Options. An optionee does not recognize income upon the
grant of an ISO and incurs no tax on its exercise (unless the optionee is
subject to the alternative minimum tax described below). If the optionee holds
the stock acquired upon exercise of an ISO (the "ISO Shares") for more than one
year after the date the option was exercised and for more than two years after
the date the option was granted, the optionee generally will realize long-term
capital gain or loss (rather than ordinary income or loss) upon disposition of
the ISO Shares. This gain or loss will be equal to the difference between the
amount realized upon such disposition and the amount paid for the ISO Shares. If
the optionee disposes of ISO Shares before the expiration of either required
holding period (a "disqualifying disposition"), then gain realized upon such
disqualifying disposition, up to the difference between the fair market value of
the ISO Shares on the date of exercise (or, if less, the amount realized on a
sale of such ISO Shares) and the option exercise price, will be treated as
ordinary income. Any additional gain will be long-term or short-term capital
gain, depending upon the length of time the optionee held the ISO Shares. The
Company will be entitled to a deduction in connection with the disposition of
ISO Shares only to the extent that the optionee recognizes ordinary income on a
disqualifying disposition of the ISO Shares.
Alternative Minimum Tax. The difference between the exercise price and fair
market value of the ISO Shares on the date of exercise of an ISO is an
adjustment to income for purposes of the alternative minimum tax ("AMT"). The
AMT (imposed to the extent it exceeds the taxpayer's regular tax) is generally
26% of an individual taxpayer's alternative minimum taxable income (28% in the
case of alternative minimum taxable income in excess of $175,000). Alternative
minimum taxable income is determined by adjusting regular taxable income for
certain items, increasing that income by certain tax preference items and
reducing this amount by the applicable exemption amount ($45,000 in the case of
a joint return, subject to reduction in certain circumstances). If a
disqualifying disposition of the ISO Shares occurs in the same calendar year as
exercise of the ISO, there is no AMT adjustment with respect to those ISO
Shares. Also, upon a sale of ISO Shares that is not a disqualifying disposition,
alternative minimum taxable income is reduced in the year of sale by the excess
of the fair market value of the ISO Shares at exercise over the amount paid for
the ISO Shares.
Nonstatutory Stock Options. An optionee does not recognize any taxable
income at the time an NSO is granted. However, upon exercise of an NSO, the
optionee must include in income as compensation an amount equal to the
difference between the fair market value of the shares on the date of exercise
(or, in the case of exercise for stock subject to a substantial risk of
forfeiture, at the time such forfeiture restriction lapses) and the amount paid
for that stock upon exercise of the NSO. In the case of stock subject to a
substantial risk of forfeiture, if the optionee makes an 83(b) election, the
included amount must be based on the difference between the fair market value on
the date of exercise and the option exercise price. The included amount must be
treated as ordinary income by the optionee and will be subject to income tax
withholding by the Company. Upon resale of the shares by the optionee, any
subsequent appreciation or depreciation in the value of the shares will be
treated as capital gain or loss. The Company will be entitled to a deduction in
connection with the exercise of an NSO by a domestic optionee to the extent that
the optionee recognizes ordinary income and the Company withholds tax.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT
TO THE COMPANY'S 1994 STOCK OPTION PLAN
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PROPOSAL NO. 3 - AMENDMENT TO CERTIFICATE OF INCORPORATION
On July 26, 2000, the Board of Directors approved an amendment to Article 4,
Section 4.1 of our Certificate of Incorporation to increase the authorized
number of shares of Common Stock from 200,000,000 to 350,000,000 shares, subject
to stockholder approval of the amendment. The text of Article 4, Section 4.1 as
so amended is set forth in Appendix A hereto.
Presently, the Company's capital stock consists of 200,000,000 shares of
Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred
Stock, par value $0.001 per share. As of July 26, 2000, 104,102,707 shares of
Common Stock were issued and outstanding and 15,350,943 shares were reserved for
issuance upon exercise of outstanding options, leaving the Company 80,546,350
shares of Common Stock available for issuance. There are no shares of Preferred
Stock outstanding. The proposed increase in the number of shares of Common Stock
will not change the number of shares of stock outstanding or the rights of the
holders of such stock. Stockholders do not have preemptive rights to acquire the
Common Stock authorized by this amendment.
The proposed increase in the number of authorized shares of Common Stock
from 200,000,000 to 350,000,000 would result in additional shares being
available for issuance from time to time for corporate purposes (such as
possible stock splits, stock dividends, acquisitions of companies or assets,
sales of stock or securities convertible into stock, stock options or other
employee benefit plans). The Company believes that the availability of the
additional shares will provide it with the flexibility to meet business needs as
they arise, to take advantage of favorable opportunities and to respond to a
changing corporate environment. Although the Company believes it is in the best
interests of the stockholders for the Company to have the flexibility to issue
additional shares of Common Stock in any or all of the above circumstances, the
issuance of additional shares of Common Stock could, in certain instances,
discourage an attempt by another person or entity to acquire control of the
Company. The issuance of additional Common Stock, whether or not in connection
with a contest for control could dilute the voting power of each stockholder,
and may dilute earnings and book value on a per share basis. The Company
presently has no specific plans, arrangements or understandings with respect to
the issuance of these additional shares, if authorized.
If the stockholders approve the amendment, the Company will file a
Certificate of Amendment of its Certificate of Incorporation with the Secretary
of State of the State of Delaware.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION
PROPOSAL NO. 4 - 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 1, 2001, 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 SELECTION OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth certain information, as of July 26, 2000,
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.
<CAPTION>
SECURITY OWNERSHIP
Shares Percentage of
Name and Address of Beneficial Owner Beneficially Owned(1)(2) Beneficial Ownership
------------------------------------ ------------------------ --------------------
<S> <C> <C>
5% Shareholders
J. & W. Seligman & Co. Incorporated 5,473,140 5.3%
Non-Employee Directors
Carl E. Berg(4).................................... 2,022,031 1.9%
Federico Faggin(5)................................. 52,000 *
John C. Bolger(6).................................. 15,000 *
Named Executive Officers
Jerry G. Taylor(7)................................. 283,436 *
Chuen-Der Lien(8).................................. 185,566 *
Mike Hunter(9)..................................... 114,624 *
Alan Krock(10)...................................... 44,565 *
Bill Franciscovich (11)............................ 35,486 *
Leonard C. Perham(12).............................. 139,807 *
All current Executive Officers
and Directors as a Group (11 persons)(13)(14)...... 3,024,211 2.9%
<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 26, 2000, have been exercised.
(3) Represents shares beneficially owned by J.& W. Seligman & Co. Incorporated
("Seligman"), an institutional investment manager. This information is
obtained from a form 13F dated June 30, 2000 and filed with the SEC on July
20, 2000 by Seligman. Seligman reported shared investment discretion and
shared voting power over 5,473,140 shares. Seligman's principal business
office is located at 100 Park Avenue, New York, New York 10017.
(4) Represents 2,002,031 shares beneficially owned by Mr. Berg and 20,000
shares subject to options exercisable within 60 day of July 26, 2000.
(5) Includes 52,000 shares subject to options exercisable within 60 days of
July 26, 2000.
(6) Includes 15,000 shares subject to options exercisable within 60 days of
July 26, 2000.
(7) Includes 283,436 shares subject to options exercisable within 60 days of
July 26, 2000.
(8) Represents 7,574 shares beneficially owned by Mr. Lien, 2,700 shares held
of record by Mr. Lien's son and 175,292 shares subject to options
exercisable within 60 days of July 26, 2000.
(9) Represents 2,000 shares beneficially owned by Mr. Hunter and 112,624 shares
subject to options exercisable within 60 days of July 26, 2000.
(10) Represents 1,864 shares beneficially owned by Mr. Krock and 42,701 shares
subject to options exercisable within 60 days of July 26, 2000.
(11) Represents 5,247 shares beneficially owned by Mr. Franciscovich and 30,239
shares subject to options exercisable within 60 days of July 26, 2000.
11
<PAGE>
(12) Includes 139,807 shares subject to options exercisable within 60 days of
July 26, 2000.
(13) Includes the shares described in notes 4-11, and an additional 19,776
shares and 251,727 shares subject to options exercisable within 60 days of
July 26, 2000 held by executive officers not listed in the table.
(14) Excludes shares described in note 12 as Mr. Perham is no longer an
executive officer of the Company.
</FN>
</TABLE>
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, Jerry G. Taylor, and
other executive officers. During the Company's fiscal year ended April 2, 2000,
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 non-employee 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 ("Compensation 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 Compensation Survey include annual revenue, industry, growth
rate and geography. The Company's executive level positions, including the Chief
Executive Officer, were matched to comparable Compensation 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 Compensation Survey were
substantially similar to the companies contained in the S&P Index. Approximately
one-half of the companies included in the Compensation Survey group are included
in the S&P Index. The remaining companies included in the Compensation 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 Compensation Survey
12
<PAGE>
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 Compensation Survey group, is reviewed for each
executive officer each year with the Chief Executive Officer and with the
Compensation and Stock Option Committee. 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.
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
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 Compensation 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 8.8% over salaries for fiscal 1999.
Bonus Pay: The Company's bonus policy is to pay an annual cash bonus to
certain executive officers and other key employees based on the 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 fiscal year. The amount of each bonus is determined by the Chief
Executive Officer subject to the approval of the Compensation and Stock Option
Committee. Pursuant to this policy, all of the Company's executive officers
received a bonus for fiscal 2000. The aggregate amount of all bonuses paid for
any single fiscal year may not exceed 6% of operating income for the year. In
fiscal 2000, the Company provided for a total of $7.8 million in bonus pay.
Profit Sharing Pay: Profit Sharing pay is comprised of two components: a
cash payment made directly to eligible employees, and a cash contribution made
directly to eligible employees' 401(k) Savings Plan accounts. During fiscal
2000, Profit Sharing pay was available to most employees who had at least six
months of service with the Company. The Board of Directors determines the amount
of annual Profit Sharing to be paid. In fiscal 2000, the Company provided for a
total of $11.0 million in Profit Sharing pay, including the contribution of 1%
of pre-tax profit into the employees' Section 401(k) Plan accounts. Profit
Sharing payments and 401(k) Savings Plan contributions are made semi-annually.
An employee's Profit Sharing payment is determined by taking that portion of
total funds available for distribution equal to such employee's base pay divided
by the aggregate base pay of all participating employees. An employee's Profit
Sharing 401(k) Savings Plan contribution is determined on a per capita basis,
with all participating employees eligible to receive the same amount.
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's
stock.
During fiscal 2000, 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 2000." Stock options typically
have been granted to executive officers when the executive first joins the
Company, annually
13
<PAGE>
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 following 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.
Fiscal 2000 CEO Compensation
In evaluating the compensation of Mr. Taylor, President and Chief Executive
Officer of the Company, for services rendered in fiscal 2000, 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 2000 financial results and compared them with the
Company's financial results in fiscal 1999 and with the companies in the
Compensation Survey. The Compensation and Stock Option Committee reviewed the
Company's net profit for fiscal 2000, the Company's increase in earnings per
share in fiscal 2000, the Company's increase in revenues for fiscal 2000 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. Taylor, the
Committee made the following determinations with respect to Mr. Taylor's
compensation for fiscal 2000.
In fiscal 2000, Mr. Taylor's base salary was increased to $316,964 (compared
to $268,524 in fiscal 1999).
In fiscal 2000, Mr. Taylor received bonuses totaling $522,000, payments
totaling $25,591 under the Profit Sharing Plan and $823 in profit sharing under
the Section 401(k) Plan.
During fiscal 2000, Mr. Taylor was granted 450,000 new stock options.
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
14
<PAGE>
EXECUTIVE COMPENSATION
The following table shows certain information concerning the compensation of
each of the Company's Chief Executive Officer, the Company's four most highly
compensated executive officers other than the Chief Executive Officer who were
serving as executive officers at the end of fiscal 2000, and Leonard C. Perham,
the Company's former Chief Executive Officer, for services rendered in all
capacities to the Company for the fiscal years ended 2000, 1999 and 1998
(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.
<TABLE>
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>
Jerry G. Taylor 2000 $316,964 $547,591 $ -- 450,000 $ 823
President and Chief 1999 268,524 762 6,440 370,000 (4) 29
Executive Officer 1998 211,409 50,906 45,571 90,000 35
Chuen-Der Lien 2000 238,355 340,072 -- 30,000 2,323
Vice President, Chief 1999 217,260 19,601 -- 231,543 (4) 29
Technical Officer 1998 213,860 23,885 -- 30,000 4,035
Mike Hunter 2000 236,271 252,972 -- 94,000 823
Vice President, 1999 210,600 645 -- 144,500 (4) 29
Manufacturing 1998 172,822 677 -- 18,500 35
Alan F. Krock 2000 207,238 273,308 -- 132,100 2,326
Vice President, Chief 1999 156,000 40,957 -- 122,790 (4) 29
Financial Officer 1998 147,415 29,000 -- 119,650 35
Bill Franciscovich 2000 203,264 156,396 85,595 65,000 6,823
Vice President, Sales 1999 180,000 541 4,000 95,000 (4) 29
1998 159,409 20,653 20,000 32,256 35
Leonard C. Perham (5) 2000 359,798 550,864 -- 200,000 1,223
Former President and 1999 334,248 1,181 -- 700,000 (4) 2,029
Chief Executive Officer 1998 339,393 1,506 -- 300,000 35
<FN>
---------------
(1) Amounts listed in this column for fiscal 2000, 1999 and 1998 include cash
paid under the Company's Profit Sharing Plan, as follows: Mr. Taylor,
$25,591, $762 and $906; Mr. Lien $19,142, $768 and $885; Mr. Hunter $18,972,
$645 and $677; Mr. Krock $16,805, $522 and $572; Mr. Franciscovich $16,396,
$541 and $653; and Mr. Perham $28,864, $1,181 and $1,506. All remaining
amounts in this column represent performance bonuses.
(2) The amounts reflected for Mr. Taylor represent a housing relocation
allowance. The amounts reflected for Mr. Franciscovich represent
commissions.
(3) Amounts listed in this column represent the Company's contributions to
individual 401(k) accounts of the Named Executive Officers, tenure bonuses
of $4,000 for Mr. Lien (1998) and $2,000 for Mr. Perham (1999), patent
awards of $1,500 for Mr. Lien (2000) and $400 for Mr. Perham (2000), auto
allowance of $6,000 for Mr. Franciscovich (2000), and frequent flyer
buy-back of $1,503 for Mr. Krock (2000).
(4) Includes options for Common Stock granted prior to fiscal 1999 and repriced
in fiscal 1999 as follows: Mr. Taylor 210,000 shares; Mr. Lien, 156,000
shares; Mr. Hunter, 111,000 shares; Mr. Krock, 99,900 shares; Mr.
Franciscovich, 65,000 shares; and Mr. Perham, 700,000 shares.
(5) Mr. Perham retired as President in July 1999 and as Chief Executive Officer
in December 1999.
</FN>
</TABLE>
15
<PAGE>
<TABLE>
The following table contains information concerning the grant of stock
options under the Company's 1994 Option Plan to the Named Executive Officers
during fiscal 2000. In addition, there are shown the hypothetical gains or
"option spreads" that would exist for the respective options based on assumed
rates of annual compound stock appreciation of 5% and 10% from the date of grant
over the full option term. Actual gains, if any, on option exercises are
dependent on the future performance of the Company's Common Stock. The
hypothetical gains shown in this table are not intended to forecast possible
future appreciation, if any, of the stock price.
<CAPTION>
Option Grants in Fiscal 2000
Individual Grants
--------------------------------------------------------------------------------
Potential Realizable Value
Number of % of Total At Assumed Annual Rates
Shares Options of Stock Price Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees Price Expiration -----------------------
Name Granted(2) In Fiscal 2000 ($/Share)(3) Date 5% 10%
----------------- ----------- ------------ ------------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Jerry G. Taylor 45,000 0.9% $7.6250 6/24/06 $141,497 $330,435
45,000 (4) 0.9 9.0625 4/26/06 162,198 376,590
160,000 3.1 11.3437 7/13/06 738,884 1,721,914
200,000 (5) 3.9 24.3750 12/14/06 1,983,698 4,622,516
Chuen-Der Lien 30,000 0.6 7.6250 8/10/06 96,367 225,835
Mike Hunter 34,000 0.7 7.6250 4/26/06 104,032 241,882
30,000 0.6 7.6250 1/15/07 103,307 244,982
30,000 0.6 24.3750 12/14/06 297,555 693,377
Alan F. Krock 34,600 (6) 0.7 7.6250 4/26/06 105,868 246,150
30,000 0.6 7.6250 2/12/07 104,552 248,459
27,500 (7) 0.5 12.0625 7/14/06 134,980 314,538
40,000 0.8 24.3750 12/14/06 396,740 924,503
Bill Franciscovich 15,000 0.3 7.6250 2/05/07 52,120 123,794
30,000 (8) 0.6 12.0625 7/14/06 147,251 343,133
20,000 0.4 24.3750 12/14/06 198,370 462,252
Leonard C. Perham 100,000 (9) 1.9 7.6250 4/26/06 305,977 711,417
100,000 1.9 7.6250 10/03/06 329,075 774,302
<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) Vests as follows: 10,000 vest on 4/26/00; 20,000 vest 1/24 per month for
the 24 months ending 4/26/02; 15,000 vest 1/12 per month for the 12 months
ending on 4/26/03.
(5) Vests 1/24 per month for the 24 months ending on 12/14/01.
(6) Vests as follows: 15,000 vest 1/24 per month for the 24 months ending on
4/26/01; 12,100 vest 1/12 per month for the 12 months ending on 4/26/02;
7,500 vest 1/12 per month for the 12 months ending on 4/26/03.
(7) 100% of grant subject to accelerated vesting based on attainment of
certain goals; vesting was accelerated for 100% of grant on 10/15/99.
(8) Vests as follows: 5,000 vest on 7/14/00; 10,000 vest 1/24 per month for
the 24 months ending on 7/14/02; 10,000 vest 1/12 per month for the 12
months ending on 7/14/03; 5,000 vest 1/12 per month for the 12 months
ending 7/14/04.
(9) 50% of grant subject to accelerated vesting on or after 4/26/00; vesting
was accelerated for 50% of grant on 5/15/00.
</FN>
</TABLE>
16
<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 2000, 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 April 2, 2000, and the value of such options based on
the last closing price of the Company's Common Stock at fiscal year-end
($39.6250).
<CAPTION>
Aggregated Option Exercises in Fiscal 2000 and Fiscal Year-End Option Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End (#) at Fiscal Year-End ($)(2)
------------------------------ -------------------------
Shares
Acquired on Valued
Name Exercise (#) Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerry G. Taylor 100,000 $2,349,725 130,625 589,375 $3,823,517 $15,633,563
Chuen-Der Lien 46,000 1,340,230 161,918 135,625 5,249,611 4,520,508
Mike Hunter -- -- 84,853 153,647 2,758,489 4,445,354
Alan F. Krock 75,000 1,751,382 20,055 159,835 606,422 4,473,363
Bill Franciscovich 20,001 429,691 31,214 113,786 1,016,186 3,209,205
Leonard C. Perham 700,000 20,591,423 329,807 570,000 10,718,728 18,425,000
<FN>
--------------------
(1) "Value Realized" represents the aggregate sales price 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 31,
2000, the last day of trading for fiscal 2000.
</FN>
</TABLE>
EMPLOYMENT CONTRACT
The Company has entered into Change of Control Agreements effective as
of January 27, 2000 with each of Jerry Taylor, Alan Krock, Mike Hunter, Dave
Cote, Jimmy Lee, Chris Schott, Chuen-Der Lien, Bill Franciscovich, Brian
Boisseree, Michael Miller and Jerry Fielder. In the event of a termination of
employment by any of these employees without cause within two years after a
change of control of the Company, the agreements provide generally for lump sum
severance payments of from twelve to twenty-four months monthly salary, as well
as a prorated bonus payment and continued health benefits for the same period.
The agreements also provide that, subject to pooling of interest accounting
restrictions associated with the change of control, the vesting of outstanding
option and restricted stock will become accelerated by two years upon a change
of control. The agreements provide that benefits may be limited in the event
their payment results in the imposition of excise taxes under the "golden
parachute" provisions of Section 280G of the Code.
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 2000.
17
<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 (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.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------------------------------------------
3/95 3/96 3/97 3/98 3/99 3/00
<S> <C> <C> <C> <C> <C> <C>
Integrated Device Technology, Inc. 100 61 54 76 29 214
S&P 500 Index 100 132 158 234 278 327
S&P Electronics (Semiconductor) Index 100 110 234 255 387 956
</TABLE>
18
<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, with the
exception of the following: Messrs. Berg and Carey filed a late Form 4, Mr.
Carey filed an amended Form 4 and Messrs. Bolger, Cote and Lien filed a late
Form 5.
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 2001 Annual Meeting must be received by the
Company no later than April 2, 2001, as the Company expects to mail proxy
statements for its 2001 Annual Meeting in July 2001.
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: July 31, 2000
Santa Clara, California
19
<PAGE>
APPENDIX A
RESTATED CERTIFICATE OF INCORPORATION
OF
INTEGRATED DEVICE TECHNOLOGY, INC.
Article 4, Section 4.1
Section 4.1 This Corporation is authorized to issue two classes of
shares designated "Common Stock" and "Preferred Stock." The total number of
shares which the Corporation shall have authority to issue is Three Hundred
Sixty Million (360,000,000), of which Three Hundred Fifty Million (350,000,000)
shall be Common Stock with a par value of $.001 per share and Ten Million
(10,000,000) shall be Preferred Stock with a par value of $.001 per share.
20
<PAGE>
APPENDIX B
INTEGRATED DEVICE TECHNOLOGY, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 22, 2000
The undersigned hereby appoints Jerry Taylor and Jerry Fielder, 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 Santa Clara Marriott Hotel located at 2700 Mission
College Boulevard, Santa Clara, California 95054 on September 22, 2000, at 9:30
a.m. PDT, 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>
[X] Please mark
your choices
like this
--------------- -----------------
ACCOUNT NUMBER COMMON
1. ELECTION OF CLASS 1 DIRECTOR FOR WITHHELD
[ ] [ ]
Nominee: Jerry G. Taylor
2. APPROVAL OF AMENDMENT TO 1994 FOR AGAINST ABSTAIN
STOCK OPTION PLAN [ ] [ ] [ ]
3. APPROVAL OF AMENDMENT TO CERTIFICATE FOR AGAINST ABSTAIN
OF INCORPORATION [ ] [ ] [ ]
4. RATIFICATION OF SELECTION OF FOR AGAINST ABSTAIN
PRICEWATERHOUSECOOPERS LLP AS THE [ ] [ ] [ ]
COMPANY'S INDEPENDENT ACCOUNTANTS
The Board of Directors recommends a vote FOR the nominee for election and FOR
Proposals 2, 3 and 4. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF
DIRECTION, THIS PROXY WILL BE VOTED FOR THE COMPANY'S NOMINEE FOR ELECTION AND
FOR PROPOSALS 2, 3 AND 4.
In their discretion, the proxy 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: ___________________________________________________________________2000
________________________________________________________________________________
________________________________________________________________________________
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.
<PAGE>
SKU #IDT-PS-00
