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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended June 30, 1995
OR
________ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to _________
COMMISSION FILE NUMBER 0-16538
MAXIM INTEGRATED PRODUCTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2896096
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 San Gabriel Drive
Sunnyvale, California 94086
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (408) 737-7600
_______________
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The aggregate market value of the voting stock held by nonaffiliates
of the registrant as of August 1, 1995 was approximately $477,000,000*.
Number of shares outstanding of the registrant's Common Stock, $.001
par value, as of June 30, 1995: 29,436,579.
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DOCUMENTS INCORPORATED BY REFERENCE:
Part II - Annual Report to Stockholders for the fiscal year ended June
30, 1995
Part III - Proxy Statement for the 1995 Annual Meeting of Stockholders
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
Amendment to this Form 10-K. /X/
* Excludes the Common Stock held by executive officers, directors and
stockholders whose ownership exceeds 5% of the Common Stock outstanding at
August 1, 1995. Exclusion of such shares should not be construed to indicate
that each of such persons possesses the power, direct or indirect, to control
the Registrant, or that each such person is controlled by or under common
control with the Registrant.
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PART I
ITEM 1. BUSINESS
Maxim Integrated Products, Inc. ("Maxim" or the "Company") designs,
develops, manufactures and markets a broad range of linear and mixed signal
integrated circuits, commonly referred to as analog circuits. The Company also
provides a range of high frequency design processes and capabilities that can
be used in custom design. The analog market is highly fragmented and
characterized by many diverse applications, a great number of product
variations and relatively long product life cycles. Maxim's objective is to
actively develop and market both proprietary and industry standard analog
integrated circuits that meet the increasingly stringent quality standards
demanded by customers. Maxim owns and operates two Class 10 wafer fabrication
facilities capable of producing 0.8 and 1.2 micron CMOS and bipolar products
(see "Manufacturing" below). In addition, the Company subcontracts the
fabrication of a small portion of its silicon wafers to outside silicon
foundries. Based on product announcements by its competitors, Maxim believes
that in the past twelve years it has developed more products for the analog
market, including proprietary and second source products, than any of its
competitors over the same period.
THE ANALOG INTEGRATED CIRCUIT MARKET
All electronic signals fall into one of two categories, linear or
digital. Linear (or analog) signals represent real world phenomena, such as
temperature, pressure, sound or speed, and are continuously variable over a
wide range of values. Digital signals represent the "ones" and "zeros" of
binary arithmetic and are either on or off.
Three general classes of semiconductor products arise from this
partitioning of signals into linear or digital. There are those, such as
memories and microprocessors, which operate only in the digital domain. There
are linear devices such as amplifiers, references, analog multiplexers and
switches, which operate primarily in the analog domain. Finally, there are
mixed signal devices that combine linear and digital functions on the same
integrated circuit and interface between the analog and digital worlds. Maxim
targets the combined linear and mixed signal market, often collectively
referred to as the analog market.
The Company believes that, compared to the digital integrated circuit
market, the analog market has generally been characterized by a wider range of
standard products used in smaller quantities by a large number of customers;
longer product life cycles; less competition from Japanese and other foreign
manufacturers; lower capital requirements as a result of using more mature
manufacturing technologies; and relatively more stable growth rates that are
less influenced by economic cycles. The Company believes that the widespread
application of low cost microprocessor-based
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systems has affected the market for analog integrated circuits by increasing the
need for interfaces with the analog world.
The analog market is a highly fragmented group of niche markets,
serving numerous and widely differing applications for instrumentation,
industrial control, data processing, communications, military, video and
selected medical equipment. For each application, different users may have
unique requirements for circuits with specific resolution, accuracy, linearity,
speed, power and signal amplitude capability, which results in a high degree of
market complexity. Maxim's products can be used in a variety of applications
but serve only certain segments of the total analog market.
PRODUCTS AND APPLICATIONS
The Company initially entered the analog market with a relatively
narrow portfolio of products as second sources for industry standard parts for
which there was an existing customer base. After establishing a position in
the market, the Company began to introduce technically innovative proprietary
products. Although second sourcing continues to be a component of the
Company's product development program, current research and development
emphasizes development of proprietary circuits. The Company believes it
addresses the requirements of the market by providing competitively priced
products that add value to electronic equipment with superior quality and
reliability.
As of June 30, 1995, Maxim has introduced over 850 products. These
products are available with numerous packaging alternatives, including packages
for surface mount technology.
The following table illustrates the major industries served by the
Company and typical applications for which the Company's products can be used:
<TABLE>
<CAPTION>
Industry Typical Application
-------- -------------------
<S> <C>
Instrumentation . . . . . . . . . . . . Testers
Analyzers
Data Recorders
Code Readers
Measuring Instruments
* Temperature
* Pressure
* Speed
* Electrical
* Sound
* Light
Automatic Test Equipment
Industrial Control . . . . . . . . . . Control of
</TABLE>
4
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<TABLE>
<S> <C>
* Temperature
* Flow
* Pressure
* Velocity
* Position
Robotics
Data Processing . . . . . . . . . . . Disk Drives
Tape Drives
Printers
Personal Computers
Workstations
Terminals
Minicomputers
Mainframes
Communications . . . . . . . . . . . PBX
Modems
Terminals
Switches
Video Communications
Phones
Cellular
Cordless
Local Wire Area Networks
Pagers
Direct Broadcast TV
</TABLE>
The Company also sells products for military and selected medical
equipment.
While Maxim's proprietary products have received substantial market
acceptance, Maxim has experienced additional competition as Maxim's competitors
develop second sources for Maxim's successful innovative proprietary products.
Typically in the semiconductor industry, when a proprietary product becomes
second sourced, the credibility of the original design is enhanced, there is an
opportunity to increase total revenues as the potential customers' reluctance
to design in a sole source product is removed but gross margins decrease due to
increased price competition.
PRODUCT QUALITY
Maxim places strong emphasis on product quality from initial design
through final quality assurance. In the product design phase, Maxim applies a
set of circuit design rules that it believes results in enhanced product
reliability. Upon receipt from Maxim's own fabrication facilities, or from
silicon foundries, A majority of processed wafers are tested for conformance
with specific parameters. Products are individually
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tested using specialized test equipment and complex programs to ensure that they
meet data sheet performance levels. In addition, long-term operating life and
mechanical stress tests are performed on samples routinely to assure continued
consistency.
MANUFACTURING
Once a product has been designed and released to production, Maxim
uses its own wafer fabrication facilities and to a small extent silicon
foundries to produce wafers. The majority of processed wafers are subjected to
parametric and functional testing before being sent to subcontractors, where
they are cut into individual circuits and assembled into a variety of packages.
Some of the packaged circuits are functionally tested by test subcontractors
prior to returning to Maxim. Units from these lots are then sample tested and
inspected for final quality assurance. The rest of the products are fully
tested at Maxim upon receipt from the subcontractor.
The broad range of products demanded by the analog integrated circuit
market requires multiple manufacturing process technologies. Fifteen different
process technologies are currently used for wafer fabrication of the Company's
products. Historically, wafer fabrication of analog integrated circuits has
not required the state-of-the-art processing equipment necessary for the
fabrication of advanced digital integrated circuits.
In addition, hybrid products are manufactured using a complex
multi-chip technology featuring thin-film, thick-film and laser trimmed
resistors.
For redundant supply of these technologies in multiple fabrication
lines, the Company relies on its two geographically remote fabrication
facilities and, to a small extent, manufacturing subcontractors. The Company
currently uses 3 subcontract silicon foundries which represent less than 8% of
wafer production. Each of the subcontractors currently used by Maxim are
unrelated to Maxim.
In December 1989, the Company acquired a Class 10 wafer fabrication
facility capable of producing 1.2 micron CMOS and bipolar products. Maxim
leased the building housing the facility and purchased all manufacturing assets
required for its manufacturing operations. In May 1994, the Company acquired a
mixed class wafer fabrication facility capable of producing sub-micron CMOS
and Bipolar products (see "Item 2. Properties" below). Maxim currently plans
to operate these facilities at their capacity in the near term and to use
independent foundries for a small portion of its wafer production.
As is typical in the semiconductor industry, the Company has
experienced disruptions in the supply of processed wafers due to quality
problems or failure to achieve satisfactory electrical yields. Procurement from
foundries is done by purchase order rather than long-term contracts and Maxim's
foundries could decline additional purchase orders at their discretion. There
can be no assurance that material disruptions
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in supply will not occur in the future. If the foundries used by the Company
and its own internal wafer fabs are unable or unwilling to produce adequate
supplies of processed wafers conforming to the Company's quality standards, the
Company's business and relationships with its customers may be adversely
affected.
As is customary in the industry, the Company ships most of its
processed wafers to foreign assembly subcontractors, located in the
Philippines, Malaysia, Thailand, South Korea and Japan, where wafers are
separated into individual integrated circuits and packaged.
SALES AND MARKETING
In the United States and Canada, the Company sells its products
through 22 independent sales representative organizations at 42 locations.
Maxim products also are sold through 4 national and 3 regional and/or
specialist distributors with a combined total of approximately 115 locations.
As is customary in the industry, domestic distributors are entitled to certain
price rebates and limited product return privileges.
International sales are conducted by 5 Maxim Sales offices and 32
sales representative organizations and distributors. The Company's
international sales are generally billed and payable in United States dollars
and are therefore not directly subject to currency exchange fluctuations with
the exception of sales of the UK, French and German affiliates and sales to
customers located in Japan. Changes in the relative value of the dollar,
however, may create pricing pressures for Maxim's products. In addition,
various forms of protectionist trade legislation have been proposed in the
United States and certain foreign countries. A change in current tariff
structures or other trade policies could adversely affect the Company's foreign
marketing strategies. In general, payment terms for foreign customers,
distributors and others, are longer than for U.S. customers, and certain major
foreign customers habitually pay for product well beyond the payment dates.
As is customary in the semiconductor industry, the Company's domestic
distributors may market products competitive with Maxim's. The Company's
independent sales representatives and foreign distributors may not represent
competitive product lines, although they are permitted to sell non-competing
products for other companies.
International sales accounted for approximately 51%, 52% and 49% of
net revenues in fiscal 1993, 1994 and 1995, respectively. See Note 7 of
"Financial Information - Notes to Consolidated Financial Statements" set forth
in the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1995.
The Company also sells product directly to certain customers. In
particular, the Company has a long-term supply arrangement with Tektronix,
Inc. for the supply of
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products manufactured by Tektronix prior to its sale of its integrated circuits
operation ("ICO") to the Company and for new designs created by Tektronix.
Although inventories at the end of fiscal 1995 were lower than
historical norms as a result of unexpectedly large demand, the Company
generally carries large inventories due to the large number of its products and
its need to meet customer orders in a timely manner. Also, due to the
relatively lengthy manufacturing cycle, particularly for products produced by
independent foundries, the Company builds some of its inventory in advance of
receiving orders from its customers. As a consequence of inaccuracies inherent
in forecasting, inventory imbalances periodically occur which result in surplus
amounts of some Company products and shortages of others. Such shortages can
adversely affect customer relations.
As of June 30, 1995, the Company's backlog was approximately $199
million as compared to approximately $64 million at June 30, 1994. The Company
includes in its backlog customer released orders with firm schedules for
shipment within the next 12 months. As is customary in the semiconductor
industry, these orders may be canceled without significant penalty to the
customers. In addition, the Company's backlog includes its orders from
domestic distributors as to which revenues are not recognized until the
products are sold by the distributors. Accordingly, the Company believes that
its backlog at any time should not be used as a measure of future revenues.
The Company warrants its standard products to its distributors'
customers against defects for up to 18 months from shipment to the distributor
or 12 months from shipment by the distributor to OEM, whichever is earlier.
Warranty expense to date has been minimal.
RESEARCH AND DEVELOPMENT
The Company believes that research and development is critical to its
future success. Objectives for the research and development function include
definition and design of innovative proprietary products that meet customer
needs, development of second source products, design of parts for high yield
and reliability and development of manufacturing processes to support an
expanding product line.
Maxim has assembled a strong team of analog circuit designers with
extensive experience in development of successful products. Prior to joining
Maxim, these designers were responsible for a number of significant industry
achievements, including the development of many of the first CMOS analog
circuits. Other areas where members of Maxim's design team made pioneering
contributions include CMOS integrating analog-to-digital converters, display
drivers, monolithic analog switches and video switches, operational amplifiers,
chopper amplifiers, high speed bipolar circuits and voltage converters. Maxim
also has an experienced team of test engineers to develop the critical test
functions required by each new product. The continued ability
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of the Company to attract, train and retain circuit designers and test engineers
will be critical to its growth.
Research, development and engineering expenses were approximately
$16.4 million, $22.6 million and $42.4 million in fiscal 1993, 1994 and 1995,
respectively.
COMPETITION
The analog integrated circuit industry is intensely competitive, and
virtually all major semiconductor companies presently compete with, or
conceivably could compete with, some segment of the Company's business.
Maxim's primary competitors are Analog Devices, Inc. and Linear Technology
Corporation. Other competitors with respect to some of the Company's products
include Burr-Brown Corporation, Harris Corporation, National Semiconductor
Corporation, Siliconix Incorporated, AT&T Corporation, Motorola, Inc., TelCom
Semiconductor, Inc., Philips Electronics N.V. and Texas Instruments
Incorporated. While Japanese and other foreign manufacturers have not played a
major role in markets from which the Company currently derives the bulk of its
revenue, they possess the necessary technical and financial capabilities to
participate in these markets, and there can be no assurance that significant
foreign competition will not develop in the future. Most of Maxim's
competitors have substantially greater financial, manufacturing and marketing
resources than the Company, and some of Maxim's competitors have greater
technical resources. The Company believes it competes favorably with these
corporations primarily on the basis of technical innovation, product
definition, quality and service. There can be no assurance that competitive
factors will not adversely affect the Company's future business.
PATENTS, LICENSES AND OTHER INTELLECTUAL PROPERTY RIGHTS
The Company relies primarily upon know-how, rather than on patents, to
develop and maintain its competitive position. There can be no assurance that
others will not develop or patent similar technology or reverse engineer the
Company's products or that the confidentiality agreements with employees,
consultants, silicon foundries and other suppliers and vendors will be adequate
to protect the Company's interests.
Maxim currently owns 52 U.S. patents and 26 foreign patents with
expiration dates ranging from August 1997 to May 2011. In addition, the
Company has applied for 22 U.S. patents and 17 foreign patents. It is the
Company's policy to seek patent protection for significant inventions that may
be patented, though the Company may elect, in appropriate cases, not to seek
patent protection even for significant inventions if other protection, such as
maintaining the invention as a trade secret, is considered more advantageous.
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There can be no assurance that any patent will issue on pending
applications or that any patent issued will provide substantive protection for
the technology or product covered by it. In addition, the Company has been
registering its mask sets under the Semiconductor Chip Protection Act of 1984
in an attempt to make copying more difficult. However, the Company believes
that patent and mask work protection are of less significance in its business
than experience, innovation and management skill.
Maxim has registered many of its trademarks with the U.S. Patent and
Trademark Office and in foreign jurisdictions.
Maxim is a party to a number of licenses, including patent and other
licenses obtained from Tektronix in connection with its acquisition of
Tektronix's ICO in fiscal 1994. Except for the licenses related to the ICO, no
other license is significant to a material part of Maxim's business.
Because of technological developments in the semiconductor industry,
it is possible that certain of the Company's designs or processes may involve
infringement of patents or other intellectual property rights held by others.
From time to time, the Company has received, and in the future may receive,
notice of claims of infringement by its products of intellectual property
rights of third parties. If any such infringements were to exist, the Company
might be obligated to seek a license from the holder of the rights and might
have liability for past infringement. In the past, it has been common
semiconductor industry practice for patent holders to offer licenses on
reasonable terms and rates. Although in some situations, typically where the
patent directly relates to a specific product, patent holders have refused to
grant licenses, the practice of offering licenses appears to be generally
continuing. However, no assurance can be given that the Company will be able
to obtain licenses as needed in all cases or that the terms of any license that
may be offered will be acceptable to Maxim. In those circumstances where an
acceptable license is not available, the Company would need either to change
the process or product so that it no longer infringes or else stop
manufacturing the product or products involved in the infringement.
ENVIRONMENTAL REGULATION
Federal, state and local regulations impose a variety of environmental
controls on the use and disposal of certain chemicals and gases used in
semiconductor manufacturing. The Company's facilities have been designed to
comply with these regulations, and it believes that its activities are
conducted in material compliance with such regulations. There can be no
assurance, however, that interpretation and enforcement of current or future
environmental regulations will not impose costly requirements upon the Company.
Any failure of the Company to control adequately the use and disposal of
regulated substances could result in future liabilities.
Increasing public attention has been focused on the environmental
impact of electronic manufacturing operations. While the Company to date has
not experienced
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any materially adverse effects on its business from environmental regulations,
there can be no assurance that changes in such regulations will not impose
costly equipment or other requirements.
EMPLOYEES
As of June 30, 1995, Maxim had 1,552 employees of which 236 were in
engineering, research and development, 782 in manufacturing and operations, 188
in marketing and sales, and 51 in finance and administration. In addition, the
Company retained 295 temporary employees, principally in manufacturing and
operations.
The supply of skilled analog designers and other engineers required
for Maxim's business is limited, and competition for such personnel is intense.
The Company's growth also requires the hiring or training of additional middle
level managers. If the Company is unable to hire, retain and motivate
qualified technical and management personnel, its operations and financial
results will be adversely affected.
None of the Company's employees is subject to a collective bargaining
agreement. The Company believes that its relations with its employees are
good.
MAXTEK COMPONENTS CORPORATION
In connection with Maxim's 1994 purchase of the integrated circuits
business of Tektronix, Inc., Maxim and Tektronix jointly formed a new company,
which is equally owned, to operate Tektronix's hybrid circuit business. This
new company, named Maxtek Components Corporation, is an independent company
devoted to design and production of multichip modules and hybrids. Maxtek's
principal customer, Tektronix, accounts for over 70% of its revenue. Under
Maxtek's supply agreements all of its costs are reimbursed on a cost plus
profit basis. High frequency designs often require a multitude of component
technologies, and there are no monolithic IC processes currently available that
can combine the performance advantages of all disparate technologies. High
frequency modules and hybrids are intended to combine the optimum technologies
and deliver maximum performance.
RISK FACTORS
An investment in the securities of Maxim involves certain risks. In
evaluating the Company and its business, prospective investors should give
careful consideration to the factors listed below, in addition to the
information provided elsewhere in this Annual Report on Form 10-K and in other
documents filed with the Securities and Exchange Commission.
SEMICONDUCTOR INDUSTRY. The semiconductor industry historically has
experienced repeated and severe business cycles. In addition, the industry is
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characterized by rapid technological change, price erosion, intense competition
and significant expenditures for product development and capital equipment.
Although the Company believes that the analog segment of the semiconductor
industry has been less affected by these factors than the digital segment,
there can be no assurance that such factors will not have an adverse effect on
the Company's future operating results and cause fluctuations in
period-to-period performance. Furthermore, as the Company's operations expand,
the Company will become increasingly susceptible to industry business cycles.
COMPETITION. The Company experiences intense competition from a
number of companies, most of which have significantly greater financial,
manufacturing and marketing resources than the Company and some of which have
greater technical resources than the Company. As the Company's proprietary
products become more successful, competitors will offer second sources for
those products, causing some erosion of profit margins. Although Japanese and
other foreign manufacturers have not played a major role in the markets from
which the Company currently derives the bulk of its revenue, they possess the
necessary technical and financial capabilities to participate in these markets,
and there can be no assurance that significant foreign competition will not
develop in the future. See "Business-Competition."
DEPENDENCE ON SUBCONTRACTORS. Although the Company has an internal
capability to fabricate most of its wafers, Maxim remains dependent on outside
silicon foundries for a small portion of its wafer fabrication and has not
developed multiple sources of supply for some of its products. Maxim has
single sources of supply for 3 process technologies that accounted for less
than 8% of revenue in fiscal 1995. Each of the foundries currently used by
Maxim is unrelated to Maxim and a relatively small operation. As is typical in
the semiconductor industry, the Company has experienced disruptions in the
supply of processed wafers from these foundries due to quality problems or
failure to achieve satisfactory electrical yields. Procurement from foundries
is done by purchase order rather than long-term contracts and Maxim's foundries
could decline additional purchase orders at their discretion. There can be no
assurance that material disruptions in supply will not occur in the future. If
these foundries are unable or unwilling to produce adequate supplies of
processed wafers conforming to the Company's quality standards, the Company's
business and relationships with its customers for the limited quantities of
products produced by these foundries may be adversely affected.
Maxim also relies on foreign assembly and test subcontractors to separate
wafers into individual integrated circuits and package and test them. In
recent years South Korea and the Philippines have experienced relatively severe
political disorders, labor disruptions and natural disasters. Although the
Company has been affected by these problems, none has materially affected the
Company's revenues to date. However, similar problems in the future or more
aggravated consequences of current problems could affect deliveries to Maxim of
assembled, tested product, possibly resulting in
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substantial delayed or lost sales and/or increased expense. See
"Business-Manufacturing."
AVAILABILITY OF MATERIALS AND SUPPLIES AND SUBCONTRACT SERVICES. The
semiconductor industry has been in the midst of a very large expansion of
fabrication capacity and production worldwide. As a result of increasing
demands from semiconductor manufacturers, availability of certain basic
materials and supplies, such as polysilicon, silicon wafers, lead frames and
molding compounds, and of subcontract services, like assembly of integrated
circuits into packages, are in increasing short supply. Maxim devotes
continuous efforts to maintaining availability of all required materials,
supplies and subcontract services. However, shortages could occur as a result
of production constraints on suppliers that could have materially adverse
effects on Maxim's ability to achieve its planned production.
DEPENDENCE ON NEW PRODUCTS AND TECHNOLOGIES. The Company's future
success will depend in part on its ability to introduce new products and to
develop new process technologies. Semiconductor design and process technology
are subject to rapid technological change, requiring a high level of
expenditures for research and development. The success of new product
introductions is dependent on several factors, including proper new product
selection, timely product introduction, achievement of acceptable production
yields and market acceptance. From time to time, Maxim has not fully achieved
its new product introduction goals, and there can be no assurance that the
Company will successfully develop or implement new process technologies or that
new products will be introduced on a timely basis or receive substantial market
acceptance. See "Business-Research and Development."
DEPENDENCE UPON INDEPENDENT DISTRIBUTORS AND SALES REPRESENTATIVES.
A significant portion of the Company's sales are realized through electronics
distributors and independent sales representatives that are not under the
direct control of the Company. These independent sales organizations generally
represent product lines offered by several companies and thus could reduce
their sales efforts applied to the Company's products or terminate their
representation of the Company. As noted above, payment terms for foreign
distributors are substantially longer, either according to contract or de
facto, than for U.S. customers, and the inability to collect open accounts
could adversely affect the Company's results of operations. Termination of the
relationship between Maxim and significant distributors or representatives
could have a material adverse impact on the Company. See "Business- Sales and
Marketing" and "Item 3. Legal Proceedings."
FUTURE REVENUE FROM ACQUIRED BUSINESS. During fiscal 1994, the Company
acquired the ICO at Tektronix, Inc. The Company believes that revenues from
Tektronix and the customers historically served by the Tektronix ICO may be
level or decline over time. The Company's ability to successfully exploit the
acquisition of the Tektronix ICO is dependent upon a number of factors,
including the development of
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new products designed on the acquired high frequency processes for Tektronix and
its former customers and, to a large extent, for customers that have not
historically purchased high frequency products from the Company or Tektronix, as
well as the Company's ability to implement the production of products based upon
its existing processes at the acquired facility. The Company's inability to
successfully address one or more of these challenges could materially adversely
affect its business.
PROTECTION OF PROPRIETARY INFORMATION. The Company relies primarily
upon know-how, rather than on patents, to develop and maintain its competitive
position. There can be no assurance that others will not develop or patent
similar technology or reverse engineer the Company's products or that the
confidentiality agreements upon which the Company relies will be adequate to
protect its interests. Other companies have obtained patents covering a
variety of semiconductor designs and processes, and the Company might be
required to obtain licenses under some of these patents or be precluded from
making and selling the infringing products. There can be no assurance that
Maxim would be able to obtain licenses, if required, upon commercially
reasonable terms. See "Business- Patents and Licenses."
FOREIGN TRADE AND CURRENCY EXCHANGE. Many of the materials and
manufacturing steps in the Company's products are supplied by foreign
companies, and approximately 49% of the Company's net revenues in fiscal 1995
were from foreign customers. Accordingly, both manufacturing and sales of the
Company's products may be adversely affected by political or economic
conditions abroad. In addition, various forms of protectionist trade
legislation have been proposed in the United States and certain foreign
countries. A change in current tariff structures or other trade policies could
adversely affect the Company's foreign manufacturing or marketing strategies.
Currency exchange fluctuations could also increase the cost of components
manufactured abroad and the cost of the Company's products to foreign customers
or decrease the costs of products from the Company's foreign competitors. See
"Business- Manufacturing" and "Business-Sales and Marketing."
ITEM 2. PROPERTIES
Maxim's headquarters are located in a 63,000 square foot building in
Sunnyvale, California, which the Company purchased in October 1987. Between
December 1989 and June 1995 the Company has purchased five buildings adjacent
to its headquarters building in Sunnyvale with an aggregate of 83,000 square
feet of space. These buildings serve as the executive offices of the Company
and also provide space for engineering, manufacturing, administration, customer
service and other uses. In December 1989, in connection with acquiring one of
its wafer fabrication facilities, Maxim assumed the operating lease of the
30,000 square foot building housing these assets in Sunnyvale, California.
This lease extends through November 2003 and has a five year lease extension
option. In May 1994, Maxim purchased the Tektronix ICO. This facility,
located in Beaverton, Oregon on 21 acres, totals 226,000 square feet and
contains 60,000 square feet of wafer fabrication areas as well as engineering,
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manufacturing and general office space. A portion of the space is leased to
unrelated parties. The Company expects these buildings and the contiguous land
to be adequate for its purposes through fiscal 1996.
ITEM 3. LEGAL PROCEEDINGS
Analog Devices, Inc. In November 1992, Maxim sued Analog Devices,
Inc. ("AD") (Action #C-92 20716 RMW in the United States District Court for the
Northern District of California) seeking monetary damages plus other relief.
The suit resulted from AD's inducing five of Maxim's long time North American
distributors to terminate their distributorship of Maxim products and AD's
attempt to induce a sixth distributor, a national distributor of Maxim
products, to terminate its distributorship, which actions Maxim contended
violated federal antitrust and state tort laws. Maxim sought damages for the
prospective cumulative loss of more than $40 million in revenues over the five
years following termination of the distributorships, principally attributable
to AD's interference with Maxim's access to the very large numbers of original
equipment manufacturer ("OEM") customers with whom its distributors were the
key link in Maxim's sales process. On September 7, 1994 the Federal District
Court granted AD's motion for summary judgment against Maxim on all of its
claims. Maxim filed an appeal of the judgment. The Ninth Circuit Court of
Appeals has not schedule a hearing on the appeal to date.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference
from the Company's Annual Report to Stockholders for the fiscal year ended
June 30, 1995 under the headings "Financial Information - Financial Highlights
by Quarter" and "Corporate Data, Stockholder Information."
15
<PAGE> 16
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated by reference
from the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1995 under the heading "Financial Information - Selected Financial Data."
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is incorporated by reference
from the Company's Annual Report to Stockholders for the fiscal year ended June
30, 1995 under the heading "Financial Information - Management's Discussion and
Analysis of Financial Condition and Results of Operations."
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference from
the Company's Annual Report to Stockholders for the fiscal year ended June 30,
1995 under the headings "Financial Information - Consolidated Balance Sheets, -
Consolidated Statement of Income, - Consolidated Statements of Stockholders'
Equity, - Consolidated Statement of Cash Flows, - Notes to Consolidated
Financial Statements, - Report of Ernst & Young LLP, Independent Auditors and -
Financial Highlights by Quarter."
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
16
<PAGE> 17
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Other than as follows, the information required by this item is
incorporated by reference from the Company's Proxy Statement for the 1995
Annual Meeting of Stockholders under the headings "Proposal 1 - Election of
Directors" and "Compliance with Section 16(A) of the Securities Exchange Act of
1934."
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
John F. Gifford 54 President, Chief Executive Officer
and Chairman of the Board
Frederick G. Beck 58 Vice President
Ziya G. Boyacigiller 43 Vice President
Michael J. Byrd 35 Vice President and Chief
Financial Officer
Stephen R. Combs 45 Vice President
Tunc Doluca 37 Vice President
David J. Fullagar 53 Vice President
Anthony C. Gilbert 57 Vice President and Secretary
Kenneth J. Huening 34 Vice President
William N. Levin 54 Vice President
Robert F. Scheer 42 Vice President
Richard E. Slater 44 Vice President and Chief Accounting Officer
</TABLE>
17
<PAGE> 18
Mr. Gifford, a founder of the Company, has served as Maxim's
President, Chief Executive Officer and Chairman of the Board since its
incorporation in April 1983.
Mr. Beck, a founder of the Company, has served as Vice President since
May 1983, except for a medical leave between December 1991 and January 1994.
Mr. Boyacigiller joined Maxim in June 1983 and was promoted to Vice
President in April 1995. Prior to April 1995, he served in business management
and IC design positions.
Mr. Byrd joined Maxim in February 1994 as Vice President and Chief
Financial Officer. Prior to joining Maxim he was with Ernst & Young from August
1982 to February 1994 where he held various positions, including partner.
Dr. Combs, a founder of the Company, has served as Vice President
since May 1983.
Mr. Doluca joined Maxim in October 1984 and was promoted to Vice
President in July 1994. Prior to July 1994, he served in a number of
integrated circuit development positions.
Mr. Fullagar, a founder of the Company, has served as Vice President
since May 1983.
Mr. Gilbert joined Maxim in October 1994 as Vice President and
Secretary. From 1970 and until joining Maxim, he was a senior partner at the
law firm of Cooley Godward Castro Huddleson and Tatum, responsible for its
business department, which included approximately 100 lawyers.
Mr. Huening joined Maxim in December 1983 and was promoted to Vice
President in December 1993. Prior to December 1993, he served in a number of
quality assurance positions.
Mr. Levin joined Maxim in August 1990 as Vice President. From 1987
and until joining Maxim, he was Vice President, Program Management for Shugart
Corporation.
Mr. Scheer joined Maxim in June 1983 and was promoted to Vice President
in June 1992.
Mr. Slater joined Maxim in March 1984, has served as Controller since
1986 and was promoted to Vice President in August 1990.
18
<PAGE> 19
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference
from the Company's Proxy Statement for the 1995 Annual Meeting of Stockholders
under the headings "Executive Compensation" and "Performance Graph."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference
from the Company's Proxy Statement for the 1995 Annual Meeting of Stockholders
under the heading "Security Ownership of Certain Beneficial Owners and
Management."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) The following financial statements are included in the Company's 1995
Annual Report to Stockholders and are incorporated herein by reference
pursuant to Item 8.
Consolidated Balance Sheets at June 30, 1995 and 1994.
Consolidated Statements of Income for each of the three years in the
period ended June 30, 1995.
Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended June 30, 1995.
Consolidated Statements of Cash Flows for each of the three years in
the period ended June 30, 1995.
Notes to Consolidated Financial Statements
19
<PAGE> 20
(a) (2) The following financial statement schedule are filed as part of this
Form 10-K.
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable, or
because the required information is included in the consolidated
financial statements or notes thereto.
(a) (3) Exhibits. See attached Exhibit Index.
(b) Reports on Form 8-K. None
20
<PAGE> 21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
Date: September 25, 1995 MAXIM INTEGRATED PRODUCTS, INC.
By /s/ Michael J. Byrd
-------------------------------------
Michael J. Byrd, Vice President
and Chief Financial Officer (For
the Registrant and as Principal
Financial Officer)
By /s/ Richard E. Slater
-------------------------------------
Richard E. Slater, Vice President and
Chief Accounting Officer (Principal
Accounting Officer)
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John F. Gifford President, Chief September 25, 1995
- ------------------- Executive Officer and
John F. Gifford Chairman of the Board
(Principal Executive Officer)
/s/ James R. Bergman Director September 25, 1995
- --------------------
James R. Bergman
/s/ Robert F. Graham Director September 25, 1995
- --------------------
Robert F. Graham
/s/ A.R. Wazzan Director September 25, 1995
- ---------------
A.R. Wazzan
</TABLE>
21
<PAGE> 22
MAXIM INTEGRATED PRODUCTS, INC.
SCHEDULE II - VALUATION AND QUALIFYING
ACCOUNTS
(amounts in thousands)
<TABLE>
<CAPTION>
Additions
Charged
Balance at to Costs Balance at
Beginning and End
of Period Expenses Deductions (1) of Period
--------- -------- -------------- ---------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts:
Year ended June 30, 1993 $ 317 $ 112 $ 51 $ 378
Year ended June 30, 1994 $ 378 $ 35 $ 34 $ 379
Year ended June 30, 1995 $ 379 $ 805 $ 39 $1,145
</TABLE>
(1) Uncollectible accounts written off.
22
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Numbered Page Description
- ------ ------------- -----------
<S> <C> <C>
3.1 Restated Certificate of Incorporation of the Company as filed with the Delaware
Secretary of State on September 21, 1995
3.2 Bylaws of the Company
10.1 X Form of the Company's Domestic Distributor Agreement
10.2 # Form of the Company's International Distributor Agreement
10.3 # Form of the Company's Domestic Sales Representative Agreement
10.4 # Form of the Company's International Representative Agreement
10.5 0 Agreement dated as of July 14, 1987, amended and restated February 1994 between
John F. Gifford and the Company(1)
10.6 X Agreement dated as of March 7, 1991 between John F. Gifford and the Company(1)
10.7 + Deferred Compensation agreement dated as of March 13, 1994 between John F.
Gifford and the Company(1)
10.8 * Form of Indemnity Agreement
10.9 Z Asset Purchase Agreement by and between the Company and Tektronix, Inc., dated as
</TABLE>
(1) Management contract or compensatory plan or arrangement.
23
<PAGE> 24
<TABLE>
<S> <C> <C>
of March 31, 1994, as amended, with certain attachments(2)
10.10 0 Technology Transfer Agreement dated May 27, 1994 by and between the Company and
Tektronix, Inc.(2)
10.11 Incentive Stock Option Plan, as amended(1)
10.12 1987 Supplemental Stock Option Plan, as amended(1)
10.13 Nonemployee Stock Option Plan, as amended(1)
10.14 1987 Employee Stock Participation Plan, as amended(1)
10.15 + 1988 Nonemployee Director Stock Option Plan, as amended(1)
11.1 Statement re Computation of Income Per Share
13.1 Portions of the Annual Report to Stockholders for the fiscal year ended June 30,
1995 incorporated by reference into the Form 10-K
21 List of Subsidiaries
23 Consent of Ernst & Young LLP, Independent Auditors
</TABLE>
* Incorporated by Reference to the Company's Registration Statement on
Form S-1 No. 33-19561.
X Incorporated by Reference to the Company's Annual Report on Form 10-K
for the year ended June 30, 1991.
- ----------------------
(2) Schedules and certain attachments omitted pursuant to Item 601(b) of
Registration S-K. The Company hereby undertakes to furnish supplemental
copies of any of the omitted schedules upon request by the Commission.
Certain material omitted pursuant to the request for confidential treatment
by the Company.
24
<PAGE> 25
# Incorporated by Reference to the Company's Annual Report on Form 10-K
for the year ended June 30, 1992.
+ Incorporated by Reference to the Company's Annual Report on Form 10-K
for the year ended June 30, 1993.
Z Incorporated by Reference to the Company's Form 8-K filed with the
Commission on June 11, 1994.
0 Incorporation by Reference to the Company's Annual Report on Form 10-K
for the year ended June 30, 1995.
25
<PAGE> 1
EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
MAXIM INTEGRATED PRODUCTS, INC.
MAXIM INTEGRATED PRODUCTS, INC., a corporation organized and existing
under the General Corporation Law of the State of Delaware DOES HEREBY CERTIFY:
FIRST:
(a) The present name of this corporation is Maxim Integrated
Products, Inc.
(b) The name under which this corporation was originally
incorporated was Maxim Integrated Products, Inc. (Delaware).
(c) The original Certificate of Incorporation of Maxim
Integrated Products, Inc. (Delaware) was filed with the Secretary of State of
the State of Delaware on August 19, 1987.
SECOND: The Restated Certificate of Incorporation of Maxim Integrated
Products, Inc. in the form attached hereto as Exhibit A has been duly adopted
in accordance with the provisions of Section 245 of the General Corporation Law
of the State of Delaware by the directors of the Corporation.
THIRD: The Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the corporation's
Certificate of Incorporation as heretofore amended or supplemented, and there is
no discrepancy between those provisions and the provisions of the Restated
Certificate.
FOURTH: The Restated Certificate of Incorporation so adopted reads in
full as set forth in Exhibit A attached hereto and hereby incorporated by
reference.
IN WITNESS WHEREOF, Maxim Integrated Products, Inc. has caused this
Certificate to be signed by John F. Gifford, its President, this 20 day of
September, 1995.
MAXIM INTEGRATED PRODUCTS, INC.
By /s/ John F. Gifford
----------------------------
John F. Gifford, President
<PAGE> 2
EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
OF
MAXIM INTEGRATED PRODUCTS, INC.
FIRST: The name of the corporation (hereinafter called the
"Corporation") is MAXIM INTEGRATED PRODUCTS, INC.
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 32 Loockerman Square, Suite L-100, City of Dover,
County of Kent, and the name of the registered agent of the Corporation in the
State of Delaware at such address is the United States Corporation Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH:
A. The Corporation is authorized to issue two classes of shares
designated respectively "Common Stock" and "Preferred Stock", and referred to
herein as Common Stock and either Preferred Stock or Preferred Shares,
respectively. The total number of shares of all classes of stock which the
Corporation has the authority to issue is 62,000,000 shares. The number of
shares of Common Stock which the Corporation is authorized to issue is
60,000,000, and the number of shares of Preferred Stock which the Corporation
is authorized to issue is 2,000,000. Each share of Common Stock shall have a
par value of $0.001, and each share of Preferred Stock shall have a par value
of $0.001.
B. The Preferred Shares may be issued from time to time in one or
more series. The Board of Directors is authorized to fix the number of shares
of any series of Preferred shares and to determine the designation of any such
series. The Board of Directors is also authorized to determine the rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred shares and, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares constituting any series, to increase or decrease
(but not below the number of shares of such series then outstanding) the number
of shares of any series subsequent to the issue of shares of that series.
FIFTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors shall have the power to adopt, amend, repeal
or otherwise alter the bylaws without any action on the part of the
stockholders; provided, however, that any bylaws made by the Board of
<PAGE> 3
Directors and any and all powers conferred by any of said bylaws may be amended,
altered or repealed by the stockholders.
SIXTH: A director of the Corporation shall, to the full extent
permitted by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, not be liable to the Corporation or its stockholders for
monetary damages for breach of his fiduciary duty as a director.
SEVENTH:
(a) Vote Required for Certain Business Combinations.
(1) Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or this Restated Certificate
of Incorporation, and except as otherwise expressly provided in paragraph (b)
of this Article Seventh:
(i) any merger or consolidation of this Corporation
or any Subsidiary (as hereinafter defined) with (a) any Interested Stockholder
(as hereinafter defined) or (b) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of transactions)
to or with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of this Corporation or any Subsidiary having an
aggregate Fair Market Value equal to or greater than 10% of the Corporation's
assets as set forth on the Corporation's most recent audited, consolidated
financial statements filed with the Securities and Exchange Commission; or
(iii) the adoption of any plan or proposal for the
liquidation or dissolution of this Corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested Stockholder; or
(iv) any reclassification of securities (including
any reverse stock split) or recapitalization of this Corporation, or any merger
or consolidation of this Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing the
proportionate shares of the outstanding shares of any class of equity or
convertible securities of this Corporation or any Subsidiary which is directly
or indirectly owned by any Interested Stockholder or any affiliate of any
Interested Stockholder;
shall require the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the voting power of the then outstanding shares
of capital stock of the Corporation entitled
<PAGE> 4
to vote generally in the election of directors (the "Voting Stock"), voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) Definition of "Business Combination. The term "Business
Combination" as used in this Article Seventh shall mean any transaction which
is referred to in any one or more clauses (i) through (iv) or subparagraph (1)
of this paragraph (a).
(b) When Higher Vote is Not Required. The provisions of paragraph
(a) of this Article Seventh shall not be applicable to any particular Business
Combination, and such Business Combination shall require only such affirmative
vote as is required by law and any other provision of this Restated Certificate
of Incorporation, if all of the conditions specified in either of the following
subparagraphs (b)(1) or (b)(2) are met:
(1) Approval by Disinterested Directors. The Business
Combination shall have been approved by a majority of the Disinterested
Directors (as hereinafter defined).
(2) Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value (as hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be received per share
by holders of Common Stock in such Business Combination shall be at least equal
to the higher of the following:
(A) (if applicable) the highest per share price
paid by the Interested Stockholder for any shares of Common Stock acquired by it
(1) within the two-year period immediately prior to the first public
announcement of the proposal of the Business Combination (the "Announcement
Date") or (2) in the transaction in which it became an Interested Stockholder,
whichever is higher; and
(B) the Fair Market Value per share of Common
Stock on the Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter date is referred to in
this Article Seventh as the "Determination Date"), whichever is higher.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of shares of
any other class of outstanding Voting Stock shall be at least equal to the
highest of the following (it being intended that the requirements of this
subparagraph (b)(2)(ii) shall be required to be met with respect to every class
of outstanding Voting
<PAGE> 5
Stock, whether or not the Interested Stockholder has previously acquired any
shares of a particular class of Voting Stock):
(A) (if applicable) the highest preferential
amount per share to which the holders of shares of such class of Voting Stock
are entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of this corporation; and
(C) the Fair Market Value per share of such
class of Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(iii) The consideration to be received by holders of
any particular class of outstanding Voting Stock (including Common Stock) shall
be in cash or in the same form as the Interested Stockholder has previously
paid for shares of such class of Voting Stock. If the Interested Stockholder
has paid for shares of any class of Voting Stock with varying forms of
consideration, the form of consideration for such class of Voting Stock shall
be either cash or the form used to acquire the largest number of shares of such
class of Voting Stock previously acquired by it. The price determined in
accordance with subparagraphs (b)(2)(i) and (b)(2)(ii) shall be subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination of shares or similar event.
(iv) A proxy or information statement describing the
proposed Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations thereunder (or any subsequent provisions replacing the Exchange
Act or such rules or regulations) shall be mailed to public stockholders of
this corporation at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is required to
be mailed pursuant to such Act or subsequent provisions).
(c) Certain Definitions. For the purposes of this Article Seventh:
(1) A "person" shall mean any individual, firm, corporation
or other entity.
(2) "Interested Stockholder" shall mean any person (other
than this Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 20% of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of this corporation and at any
time within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 20% or more of the voting
power of the then outstanding Voting Stock; or
<PAGE> 6
(iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock that were at any time within the two-year period
immediately prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving public offering within
the meaning of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting
Stock:
(i) that such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or indirectly;
or
(ii) that such person or any of its Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to an agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise; provided, however, that a
person shall not be deemed the beneficial owner of securities tendered pursuant
to a tender or exchange offer made by or on behalf of such person or any of
such person's Affiliates or Associates until such tender securities are
accepted for purchase; of (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a person shall not be
deemed the beneficial owner of any security of the agreement, arrangement or
under standing to vote such security (I) arises solely from a revocable proxy
or consent given to such person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the Exchange Act and
(II) is not also then reportable on Schedule 13D under the Exchange Act (or a
comparable or successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other person with which such person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except to the extent permitted by the proviso of
subparagraph (c)(3)(ii)(B) above) or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an
Interested Stockholder pursuant to subparagraph (c)(2), the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned through
application of subparagraph (c)3), but shall not include any other shares of
Voting Stock that may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights warrants or options, or
otherwise.
(5) "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on August 15, 1987.
(6) "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by this
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in subparagraph (c)(2), the term
<PAGE> 7
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly by this Corporation.
(7) "Disinterested Director" means any member of the Board of
Directors of this Corporation (the "Board") who is unaffiliated with the
Interested Stockholder and was a member of the Board prior to the time that the
Interested Stockholder became an Interested Stockholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested Stockholder and
is recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board.
(8) "Fair Market Value" means: (i) in the case of stock, the
average of the closing sale prices during the 10-day period immediately
preceding the date in question of a share of such stock on the Composite Tape
for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if the stock is not listed on any such exchange but is listed as a
National Market System stock in the National Association of Securities Dealers,
Inc. Automated Quotation System, as reported in that National Market System, if
such stock is not listed on any such exchange or reported in such system the
average of the closing bid quotations with respect to a share of such stock
during the 10-day period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
Board in good faith; and (ii) in the case of property other than cash or stock,
the fair market value of such property on the date in question as determined by
the Board in good faith.
(9) In the event of any Business Combination in which the
corporation survives, the phase "consideration other than cash to be received"
as used in subparagraphs (b)(2)(i) and (ii) of this Article Seventh shall
include the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
(d) Powers of the Board of Directors. A majority of the
Disinterested Directors of this Corporation shall have the power and duty to
determine for the purposes of this Article Seventh on the basis of information
known to them after reasonable inquiry (i) whether a person is an Interested
Stockholder, (ii) the number of shares of Voting Stock beneficially owned by
any person, (iii) whether a person is an Affiliate or Associate of another, and
(iv) the Fair Market Value of the assets that are the subject of any Business
Combination. A majority of the Disinterested Directors of this Corporation
shall have the further power to interpret all of the terms and provisions of
this Article Seventh.
(e) No Effect on Fiduciary Obligations of Interested Stockholders.
Nothing contained in this Article Seventh shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.
<PAGE> 8
(f) Amendment, Repeal, etc. Notwithstanding any other provisions of
this Certificate of Incorporation or the bylaws of this corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, this
Restated Certificate of Incorporation or the bylaws of this Corporation), the
affirmative vote of the holders of sixty-six and two-thirds percent (66-2/3%)
or more of the outstanding Voting Stock, voting together as a single class,
shall be required to amend or repeal, or adopt any provisions inconsistent with
this Article Seventh.
EIGHTH: At all elections of directors of the Corporation, each holder
of shares of the Corporation's stock shall be entitled to as many votes as
shall equal the number of votes which (except for this provision as to
cumulative voting) he would be entitled to cast for the election of directors
with respect to his shares of stock multiplied by the number of directors to be
elected by him, and such holder may cast all of such votes for a single
director or may distribute them among the number to be voted for, or for any
two or more of them as he may see fit.
<PAGE> 1
EXHIBIT 3.2
BYLAWS
OF
MAXIM INTEGRATED PRODUCTS, INC.
(a Delaware corporation)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I - Offices.............................................................................. 1
Section 1. Registered Office...................................................... 1
Section 2. Other Offices.......................................................... 1
ARTICLE II - Corporate Seal...................................................................... 1
Section 3. Corporate Seal......................................................... 1
ARTICLE III - Stockholders' Meetings............................................................. 1
Section 4. Place of Meetings...................................................... 1
Section 5. Annual Meeting......................................................... 1
Section 6. Special Meetings....................................................... 1
Section 7. Notice of Meetings..................................................... 1
Section 8. Quorum................................................................. 2
Section 9. Adjournment and Notice of Adjourned Meetings........................... 2
Section 10. Voting Rights.......................................................... 2
Section 11. Joint Owners of Stock.................................................. 3
Section 12. List of Stockholders................................................... 3
Section 13. Action without Meeting................................................. 3
Section 14. Organization........................................................... 4
ARTICLE IV - Directors........................................................................... 4
Section 15. Number and Term of Office.............................................. 4
Section 16. Powers................................................................. 4
Section 17. Vacancies.............................................................. 4
Section 18. Resignation............................................................ 5
Section 19. Removal................................................................ 5
Section 20. Meetings............................................................... 5
Section 21. Quorum and Voting...................................................... 6
Section 22. Action Without Meeting................................................. 6
Section 23. Fees and Compensation.................................................. 7
Section 24. Committees............................................................. 7
Section 25. Organization........................................................... 8
</TABLE>
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<TABLE>
<S> <C> <C>
ARTICLE V - Officers............................................................................. 8
Section 26. Officers Designated.................................................... 8
Section 27. Tenure and Duties of Officers.......................................... 9
Section 28. Resignations........................................................... 10
Section 29. Removal................................................................ 10
ARTICLE VI - Execution of Corporate Instruments and Voting of Securities Owned by the
Corporation......................................................................... 10
Section 30. Execution of Corporate Instruments..................................... 10
Section 31. Voting of Securities Owned by the Corporation.......................... 11
ARTICLE VII - Shares of Stock.................................................................... 11
Section 32. Form and Execution of Certificates..................................... 11
Section 33. Lost Certificates...................................................... 11
Section 34. Transfers.............................................................. 12
Section 35. Fixing Record Dates.................................................... 12
Section 36. Registered Stockholders................................................ 13
ARTICLE VIII - Other Securities of the Corporation............................................... 13
Section 37. Execution of Other Securities.......................................... 13
ARTICLE IX - Dividends........................................................................... 13
Section 38. Declaration of Dividends............................................... 13
Section 39. Dividend Reserve....................................................... 14
ARTICLE X - Fiscal Year.......................................................................... 14
Section 40. Fiscal Year............................................................ 14
ARTICLE XI - Indemnification..................................................................... 14
Section 41. Indemnification of Officers, Directors, Employees and Other Agents..... 14
ARTICLE XII - Notices............................................................................ 17
Section 42. Notices................................................................ 17
ARTICLE XIII - Amendments........................................................................ 18
</TABLE>
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<TABLE>
<S> <C> <C>
Section 43. Amendments............................................................. 18
</TABLE>
iii
<PAGE> 5
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be in the City of Dover, County of
Kent.
Section 2. Other Offices. The Corporation shall also have and
maintain an office or principal place of business in Sunnyvale, California, or
at such other place as may be fixed by the Board of Directors, and may also
have offices at such other places, both within and without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
Corporate Seal
Section 3. Corporate Seal. The Corporate seal shall consist of
a die bearing the name of the Corporation and the inscription, "Corporate
Seal-Delaware." Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
ARTICLE III
Stockholders' Meetings
Section 4. Place of Meetings. Meetings of the stockholders of
the Corporation shall be held at such place, either within or without the State
of Delaware, as may be designated from time to time by the Board of Directors,
or, if not so designated, then at the office of the Corporation required to be
maintained pursuant to Section 2 hereof.
Section 5. Annual Meeting. The annual meeting of the
stockholders of the Corporation, for the purpose of election of Directors and
for such other business as may lawfully come before it shall be held on such
date and at such time as may be designated from time to time by the Board of
Directors, or, if not so designated, then at 10 o'clock A.M. on the third
Tuesday in October in each year if not a legal holiday, and, if a legal
holiday, at the same hour and place on the next succeeding day not a holiday.
Section 6. Special Meetings. Special meetings of the
stockholders of the Corporation may be called at any time, for any purpose or
purposes, by the Board of Directors or by the holders of outstanding stock of
the Corporation holding at least ten (10) percent of the voting power of the
Corporation.
Section 7. Notice of Meetings. Except as otherwise provided by
law or the Certificate of Incorporation, written notice of each meeting of
stockholders shall be given not less than ten (10)
<PAGE> 6
nor more than sixty (60) days before the date of the meeting to each stockholder
entitled to vote at such meeting, such notice to specify the place, date and
hour and purpose or purposes of the meeting. Notice of the time, place and
purpose of any meeting of stockholders may be waived in writing, signed by the
person entitled to notice thereof, either before or after such meeting, and will
be waived by any stockholder by his attendance thereat in person or by proxy,
except when the stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Any stockholder so
waiving notice of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Certificate of Incorporation, or
by these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. Any shares, the voting of
which at said meeting has been enjoined, or which for any reason cannot be
lawfully voted at such meeting, shall not be counted to determine a quorum at
such meeting. In the absence of a quorum any meeting of stockholders may be
adjourned, from time to time, by vote of the holders of a majority of the
shares represented thereat, but no other business shall be transacted at such
meeting. The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum. Except as otherwise provided by law, the Certificate of Incorporation
or these Bylaws, all action taken by the holders of a majority of the voting
power represented at any meeting at which a quorum is present shall be valid
and binding upon the Corporation.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be adjourned from time
to time by the vote of a majority of the shares, the holders of which are
present either in person or by proxy. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business that
might have been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights. For the purpose of determining those
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the
stock records of the Corporation on the record date, as provided in Section 12
of these Bylaws, shall be entitled to vote at any meeting of stockholders.
Every person entitled to vote or execute consents shall have the right to do so
either in person or by an agent or agents authorized by a written proxy
executed by such person or his duly authorized agent, which proxy shall be
filed with the Secretary at or before the meeting at which it is to be used.
An agent so appointed need not be a stockholder. No proxy shall be voted after
three (3) years from its
2.
<PAGE> 7
date of creation unless the proxy provides for a longer period. All elections
of Directors shall be by written ballot, unless otherwise provided in the
Certificate of Incorporation.
Section 11. Joint Owners of Stock. If shares or other securities
having voting power stand of record in the names of two (2) or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in
common, tenants by the entirety, or otherwise, or if two (2) or more persons
have the same fiduciary relationship respecting the same shares, unless the
Secretary is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect: (a) if only one (1) votes, his act binds all; (b) if more than one (1)
votes, the act of the majority so voting binds all; (c) if more than one (1)
votes, but the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the Delaware
Court of Chancery for relief as provided in the General Corporation Law of
Delaware, Section 217(b). If the instrument filed with the Secretary shows
that any such tenancy is held in unequal interests, a majority or even split
for the purpose of this subsection (c) shall be a majority or even split in
interest.
Section 12. List of Stockholders. The Secretary shall prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 13. Action without Meeting.
(a) Any action required by statute to be taken at any
annual or special meeting of the stockholders, or any action which may be taken
at any annual or special meeting of the stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, are signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by
hand or by certified or registered mail, return receipt requested.
(b) Every written consent shall bear the date of
signature of each stockholder who signs the consent, and no written consent
shall be effective to take the corporate action referred
3.
<PAGE> 8
to therein unless, within sixty (60) days of the earliest dated consent
delivered to the Corporation in the manner herein required, written consents
signed by a sufficient number of stockholders to take action are delivered to
the Corporation by delivery to its registered office in the State of Delaware,
its principal place of business or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to a Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested.
(c) No such action by written consent may be taken
following the effectiveness of the registration of any class of securities of
the Corporation under the Securities Exchange Act of 1934, as amended.
Section 14. Organization. At every meeting of stockholders, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or, if the President is absent, the most senior Vice
President present, or in the absence of any such officer, a chairman of the
meeting chosen by a majority in interest of the stockholders entitled to vote,
present in person or by proxy, shall act as chairman. The Secretary, or, in
his absence, an Assistant Secretary directed to do so by the President, shall
act as secretary of the meeting.
ARTICLE IV
Directors
Section 15. Number and Term of Office. The number of Directors
which shall constitute the whole of the Board of Directors shall be five (5).
The number of authorized Directors may be modified from time to time by
amendment of this Bylaw in accordance with the provisions of Section 43 hereof.
Except as provided in Section 17, the Directors shall be elected by the
stockholders at their annual meeting in each year and shall hold office until
the next annual meeting and until their successors shall be duly elected and
qualified, or until their death, resignation or removal. Directors need not be
stockholders unless so required by the Certificate of Incorporation. If for
any cause, the Directors shall not have been elected at an annual meeting, they
may be elected as soon thereafter as convenient at a special meeting of the
stockholders called for that purpose in the manner provided in these Bylaws.
Section 16. Powers. The powers of the Corporation shall be
exercised, its business conducted and its property controlled by the Board of
Directors, except as may be otherwise provided by statute or by the Certificate
of Incorporation.
Section 17. Vacancies. Unless otherwise provided in the
Certificate of Incorporation, vacancies and newly created directorships
resulting from any increase in the authorized number of Directors may be filled
by a majority of the Directors then in office, although less than a quorum, or
by a sole remaining Director, and each Director so elected shall hold office
for the unexpired portion of the term of the Director whose place shall be
vacant and until his successor shall have been duly elected and qualified. A
vacancy in the Board of Directors shall be deemed to exist
4.
<PAGE> 9
under this Section 17 in the case of the death, removal or resignation of any
Director, or if the stockholders fail at any meeting of stockholders at which
directors are to be elected (including any meeting referred to in Section 19
below) to elect the number of Directors then constituting the whole Board of
Directors.
Section 18. Resignation. Any Director may resign at any time by
delivering his written resignation to the Secretary, such resignation to
specify whether it will be effective at a particular time, upon receipt by the
Secretary or at the pleasure of the Board of Directors. If no such
specification is made, it shall be deemed effective at the pleasure of the
Board of Directors. When one or more Directors shall resign from the Board of
Directors, effective at a future date, a majority of the Directors then in
office, including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such resignation or
resignations shall become effective, and each Director so chosen shall hold
office for the unexpired portion of the term of the Director whose place shall
be vacated and until his successor shall have been duly elected and qualified.
Section 19. Removal. At a special meeting of stockholders called
for the purpose in the manner hereinabove provided, subject to the limitation
set forth in Section 141(k) of the General Corporation Law of Delaware, the
Board of Directors, or any individual Director, may be removed from office,
with or without cause, and a new Director or Directors elected by a vote of
stockholders holding a majority of the outstanding shares entitled to vote at
an election of Directors.
Section 20. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of stockholders
and at the place where such meeting is held. No notice of an annual meeting of
the Board of Directors shall be necessary and such meeting shall be held for
the purpose of electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held at the
office of the Corporation required to be maintained pursuant to Section 2
hereof. Unless otherwise restricted by the Certificate of Incorporation,
regular meetings of the Board of Directors may also be held at any place within
or without the State of Delaware which has been designated by resolution of the
Board of Directors or the written consent of all Directors.
(c) Special Meetings. Unless otherwise restricted by the
Certificate of Incorporation, special meetings of the Board of Directors may be
held at any time and place within or without the State of Delaware whenever
called by the Chairman of the Board or the President or any Vice President or
the Secretary of the Corporation or any two (2) Directors.
5.
<PAGE> 10
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a meeting by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and participation
in a meeting by such means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the date, time and
place of all meetings of the Board of Directors, other than regular meetings
held pursuant to Section 20(a) or (b) above shall be delivered personally,
orally or in writing, or by telephone or telegraph to each Director, at least
forty-eight (48) hours before the meeting, or sent in writing to each Director
by first-class mail, charges prepaid, at least four (4) days before the
meeting. Such notice may be given by the Secretary of the Corporation or by
the person or persons who called a meeting. Such notice need not specify the
purpose of the meeting. Notice of any meeting may be waived in writing at any
time before or after the meeting and will be waived by any Director by
attendance thereat, except when the Director attends the meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
(f) Waiver of Notice. The transaction of all business at
any meeting of the Board of Directors, or any committee thereof, however called
or noticed, or wherever held, shall be as valid as though had at a meeting duly
held after regular call and notice, if a quorum be present and if, either
before or after the meeting, each of the Directors not present shall sign a
written waiver of notice, or a consent to holding such meeting, or an approval
of the minutes thereof. All such waivers, consents or approvals shall be filed
with the corporate records or made a part of the minutes of the meeting.
Section 21. Quorum and Voting.
(a) Quorum. Unless the Certificate of Incorporation
requires a greater number and except with respect to indemnification questions
arising under Section 41(a) hereof, for which a quorum shall be one-third of
the exact number of Directors fixed from time to time in accordance with
Section 15 of these Bylaws, but not less than one (1), a quorum of the Board of
Directors shall consist of a majority of the exact number of Directors fixed
from time to time in accordance with Section 15 of these Bylaws, but not less
than one (1); provided, however, at any meeting whether a quorum be present or
otherwise, a majority of the Directors present may adjourn from time to time
until the time fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) Majority Vote. At each meeting of the Board of
Directors at which a quorum is present all questions and business shall be
determined by a vote of a majority of the Directors present, unless a different
vote be required by law, the Certificate of Incorporation or these Bylaws.
6.
<PAGE> 11
Section 22. Action without Meeting. Unless otherwise restricted
by the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board
of Directors or committee, as the case may be, consent thereto in writing, and
such writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.
Section 23. Fees and Compensation. Directors shall be entitled
to such compensation for their services as may be approved by the Board of
Directors, including, if so approved by resolution of the Board of Directors, a
fixed sum and expenses of attendance, if any, for attendance at each regular or
special meeting of the Board of Directors or any meeting of a committee of
directors. Nothing herein contained shall be construed to preclude any
Director from serving the Corporation in any other capacity as an officer,
agent, employee, or otherwise and receiving compensation therefor.
Section 24. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors, appoint an
Executive Committee to consist of one (1) or more members of the Board of
Directors. The Executive Committee, to the extent permitted by law and
specifically granted by the Board of Directors, shall have and may exercise
when the Board of Directors is not in session all powers of the Board of
Directors in the management of the business and affairs of the Corporation,
including, without limitation, the power and authority to declare a dividend or
to authorize the issuance of stock, except such committee shall not have the
power or authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, to recommend to the stockholders of the Corporation a
dissolution of the Corporation or a revocation of a dissolution or to amend
these Bylaws.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors, from time to
time appoint such other committees as may be permitted by law. Such other
committees appointed by the Board of Directors shall consist of one (1) or more
members of the Board of Directors, and shall have such powers and perform such
duties as may be prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers denied to the
Executive Committee in these Bylaws.
(c) Term. The members of all committees of the Board of
Directors shall serve a term coexistent with that of the Board of Directors
which shall have appointed such committee. The Board of Directors, subject to
the provisions of subsections (a) or (b) of this Section 24, may at any time
increase or decrease the number of members of a committee or terminate the
existence of a committee. The membership of a committee member shall terminate
on the date of his death or voluntary resignation. The Board of Directors may
at any time for any reason remove any individual committee member and the Board
of Directors may fill any committee vacancy created
7.
<PAGE> 12
by death, resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more Directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee, and, in addition, in the absence or
disqualification of any member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.
(d) Meetings. Unless the Board of Directors shall
otherwise provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 24 shall be held at such times and
places as are determined by the Board of Directors, or by any such committee,
and when notice thereof has been given to each member of such committee, no
further notice of such regular meetings need be given thereafter. Special
meetings of any such committee may be held at the principal office of the
Corporation required to be maintained pursuant to Section 2 hereof, or at any
place which has been designated from time to time by resolution of such
committee or by written consent of all members thereof, and may be called by
any Director who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special meeting given
in the manner provided for the giving of written notice to members of the Board
of Directors of the time and place of special meetings of the Board of
Directors. Notice of any special meeting of any committee may be waived in
writing at any time before or after the meeting and will be waived by any
Director by attendance thereat, except when the Director attends such special
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called
or convened. A majority of the authorized number of members of any such
committee shall constitute a quorum for the transaction of business, and the
act of a majority of those present at any meeting at which a quorum is present
shall be the act of such committee.
Section 25. Organization. At every meeting of the Directors, the
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President, or if the President is absent, the most senior Vice
President, or, in the absence of any such officer, a chairman of the meeting
chosen by a majority of the Directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed to do so by
the President, shall act as secretary of the meeting.
ARTICLE V
Officers
Section 26. Officers Designated. The officers of the Corporation
shall be the Chairman of the Board of Directors, the President, one or more
Vice Presidents, the Secretary and the Chief Financial Officer, all of whom
shall be elected at the annual meeting of the Board of Directors. The order of
the seniority of the Vice Presidents shall be in the order of their nomination,
unless
8.
<PAGE> 13
otherwise determined by the Board of Directors. The Board of Directors may also
appoint such other officers and agents with such powers and duties as it shall
deem necessary. The Board of Directors may assign such additional titles to one
or more of the officers as it shall deem appropriate. Any one person may hold
any number of offices of the Corporation at any one time unless specifically
prohibited therefrom by law. The salaries and other compensation of the
officers of the Corporation shall be fixed by or in the manner designated by the
Board of Directors.
Section 27. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the
pleasure of the Board of Directors and until their successors shall have been
duly elected and qualified, unless sooner removed. If the office of any
officer becomes vacant for any reason, the vacancy may be filled by the Board
of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at all meetings
of the stockholders and the Board of Directors. The Chairman of the Board of
Directors shall perform the duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
(c) Duties of President. The President shall preside at
all meetings of the stockholders and at all meetings of the Board of Directors,
unless the Chairman of the Board of Directors has been appointed and is
present. The President shall, subject to the control of the Board of Directors
and unless otherwise determined by the Board of Directors, serve as the Chief
Executive Officer of the Corporation and shall have general supervision,
direction and control of the business and officers of the Corporation. The
President shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors and the Chairman of the Board, if one has been appointed, shall
designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents, in
the order of their seniority, may assume and perform the duties of the
President in the absence or disability of the President or whenever the office
of President is vacant. The Vice Presidents shall perform other duties
commonly incident to their office and shall also perform such other duties and
have such other powers as the Board of Directors or the President shall
designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors, and shall record
all acts and proceedings thereof in the minute book of the Corporation. The
Secretary shall give notice in conformity with these Bylaws of all meetings of
the stockholders, and of all meetings of the Board of Directors and any
committee thereof requiring notice. The Secretary shall perform all other
duties given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other powers as
the Board of Directors shall designate from time to time. The
9.
<PAGE> 14
President may direct any Assistant Secretary to assume and perform the duties of
the Secretary in the absence or disability of the Secretary, and each Assistant
Secretary shall perform other duties commonly incident to his office and shall
also perform such other duties and have such other powers as the Board of
Directors or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief
Financial Officer shall keep or cause to be kept the books of account of the
Corporation in a thorough and proper manner, and shall render statements of the
financial affairs of the Corporation in such form and as often as required by
the Board of Directors or the President. The Chief Financial Officer, subject
to the order of the Board of Directors, shall have the custody of all funds and
securities of the Corporation. The Chief Financial Officer shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the President shall
designate from time to time. The President may direct any Assistant Chief
Financial Officer to assume and perform the duties of the Chief Financial
Officer in the absence or disability of the Chief Financial Officer, and each
Assistant Chief Financial Officer shall perform other duties commonly incident
to his office and shall also perform such other duties and have such other
powers as the Board of Directors or the President shall designate from time to
time.
Section 28. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors or to the President or to the
Secretary. Any such resignation shall be effective when received by the person
or persons to whom such notice is given, unless a later time is specified
therein, in which event the resignation shall become effective at such later
time. Unless otherwise specified in such notice, the acceptance of any such
resignation shall not be necessary to make it effective.
Section 29. Removal. Any officer may be removed from office at
any time, either with or without cause, by the vote or written consent of a
majority of the Directors in office at the time, or by any committee or
superior officers upon whom such power of removal may have been conferred by
the Board of Directors.
ARTICLE VI
Execution of Corporate Instruments and Voting
of Securities Owned by the Corporation
Section 30. Execution of Corporate Instruments. The Board of
Directors may, in its discretion, determine the method and designate the
signatory officer or officers, or other person or persons, to execute on behalf
of the Corporation any corporate instrument or document, or to sign on behalf
of the Corporation the corporate name without limitation, or to enter into
contracts on behalf of the Corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding upon the
Corporation.
10.
<PAGE> 15
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of trust,
mortgages and other evidences of indebtedness of the Corporation, and other
corporate instruments or documents requiring the corporate seal, and
certificates of shares of stock owned by the Corporation, shall be executed,
signed or endorsed by the Chairman of the Board of Directors, the President or
any Vice President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and documents
requiring the corporate signature, but not requiring the corporate seal, may be
executed as aforesaid or in such other manner as may be directed by the Board
of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the Corporation or in special accounts of the
Corporation shall be signed by such person or persons as the Board of Directors
shall authorize so to do.
Section 31. Voting of Securities Owned by the Corporation. All
stock and other securities of other Corporations owned or held by the
Corporation for itself, or for other parties in any capacity, shall be voted,
and all proxies with respect thereto shall be executed, by the person
authorized so to do by resolution of the Board of Directors, or, in the absence
of such authorization, by the Chairman of the Board of Directors, the
President, or any Vice President.
ARTICLE VII
Shares of Stock
Section 32. Form and Execution of Certificates. Certificates for
the shares of stock of the Corporation shall be in such form as is consistent
with the Certificate of Incorporation and applicable law. Every holder of
stock in the Corporation shall be entitled to have a certificate signed by or
in the name of the Corporation by the Chairman of the Board of Directors, or
the President or any Vice President and by the Treasurer or Assistant Treasurer
or the Secretary or Assistant Secretary, certifying the number of shares owned
by him in the Corporation. Where such certificate is countersigned by a
transfer agent other than the Corporation or its employee, or by a registrar
other than the Corporation or its employee, any other signature on the
certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of issue. Each
certificate shall state upon the face or back thereof, in full or in summary,
all of the designations, preferences, limitations, restrictions on transfer and
relative rights of the shares authorized to be issued.
Section 33. Lost Certificates. A new certificate or certificates
shall be issued in place of any certificate or certificates theretofore issued
by the Corporation alleged to have been lost, stolen, or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen, or destroyed. The Corporation may require, as a
condition precedent to the issuance of a new certificate or certificates, the
owner of such lost, stolen, or destroyed certificate
11.
<PAGE> 16
or certificates, or his legal representative, to advertise the same in such
manner as it shall require or to give the Corporation a surety bond in such form
and amount as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost, stolen, or destroyed.
Section 34. Transfers. Transfers of record of shares of stock of
the Corporation shall be made only upon its books by the holders thereof, in
person or by attorney duly authorized, and upon the surrender of a properly
endorsed certificate or certificates for a like number of shares.
Section 35. Fixing Record Dates.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of or to vote
at a meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix, in advance, a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which date shall not be
more than ten (10) days after the date upon which the resolution fixing the
record date is adopted by the Board of Directors. If no record date has been
fixed by the Board of Directors, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required by law, shall be the first
date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business or
an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
of Directors and prior action by the Board of Directors is required by law, the
record date for determining stockholders entitled to consent to corporate
action in writing without a meeting shall be at the close of business on the
day on which the Board of Directors adopts the resolution taking such prior
action.
12.
<PAGE> 17
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix, in advance, a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall be
not more than sixty (60) days prior to such action. If no record date is
fixed, the record date for determining stockholders for any such purpose shall
be at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
Section 36. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such owner, and
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.
ARTICLE VIII
Other Securities of the Corporation
Section 37. Execution of Other Securities. All bonds, debentures
and other corporate securities of the Corporation, other than stock
certificates, may be signed by the Chairman of the Board of Directors, the
President or any Vice President, or such other person as may be authorized by
the Board of Directors, and the corporate seal impressed thereon or a facsimile
of such seal imprinted thereon and attested by the signature of the Secretary
or an Assistant Secretary, or the Treasurer or an Assistant Treasurer;
provided, however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature of a trustee under an
indenture pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and attesting the
corporate seal on such bond, debenture or other corporate security may be the
imprinted facsimile of the signatures of such persons. Interest coupons
appertaining to any such bond, debenture or other corporate security,
authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an
Assistant Treasurer of the Corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the facsimile
signature of such person. In case any officer who shall have signed or
attested any bond, debenture or other corporate security, or whose facsimile
signature shall appear thereon or on any such interest coupon, shall have
ceased to be such officer before the bond, debenture or other corporate
security so signed or attested shall have been delivered, such bond, debenture
or other corporate security nevertheless may be adopted by the Corporation and
issued and delivered as though the person who signed the same or whose
facsimile signature shall have been used thereon had not ceased to be such
officer of the Corporation.
13.
<PAGE> 18
ARTICLE IX
Dividends
Section 38. Declaration of Dividends. Dividends upon the capital
stock of the Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to
law at any regular or special meeting. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the provisions of the
Certificate of Incorporation.
Section 39. Dividend Reserve. Before payment of any dividend,
there may be set aside out of any funds of the Corporation available for
dividends such sum or sums as the Board of Directors from time to time, in
their absolute discretion, think proper as a reserve or reserves to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the Corporation, and the
Board of Directors may modify or abolish any such reserve in the manner in
which it was created.
ARTICLE X
Fiscal Year
Section 40. Fiscal Year. Unless otherwise fixed by resolution of
the Board of Directors, the fiscal year of the Corporation shall end on the
last day of June.
ARTICLE XI
Indemnification
Section 41. Indemnification of Officers, Directors, Employees and Other
Agents.
(a) Directors. The Corporation shall indemnify its
directors to the fullest extent permitted by the Delaware General Corporation
Law.
(b) Officers, Employees and Other Agents. The
Corporation shall have power to indemnify its officers, employees and other
agents as set forth in the Delaware General Corporation Law.
(c) Good Faith.
14.
<PAGE> 19
(1) For purposes of any determination under this
Bylaw, a Director, or any member of a committee designated by the Board of
Directors, shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe that his conduct was unlawful, if he relied in
good faith upon the records of the Corporation and upon such information,
opinions, reports or statements presented to the Corporation by any of the
Corporation's officers or employees, or committees of the Board of Directors, or
by any other person as to matters the Director reasonably believes are within
such other person's professional or expert competence and who has been selected
with reasonable care by or on behalf of the Corporation.
(2) The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or
its equivalent shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation, and, with respect to any
criminal proceeding, that he had reasonable cause to believe that his conduct
was unlawful.
(3) The provisions of this paragraph (c) shall
not be deemed to be exclusive or to limit in any way the circumstances in which
a person may be deemed to have met the applicable standard of conduct set forth
by the Delaware General Corporation Law.
(d) Expenses. The Corporation shall advance, prior to
the final disposition of any proceeding, promptly following request therefor,
all expenses incurred by any Director in connection with such proceeding upon
receipt of an undertaking by or on behalf of such person to repay said amounts
if it should be determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
(e) Enforcement. Without the necessity of entering into
an express contract, all rights to indemnification and advances under this
Bylaw shall be deemed to be contractual rights and be effective to the same
extent and as if provided for in a contract between the Corporation and the
Director who serves in such capacity at any time while this Bylaw and other
relevant provisions of the Delaware General Corporation Law and other
applicable law, if any, are in effect. Any right to indemnification or
advances granted by this Bylaw to a Director shall be enforceable by or on
behalf of the person holding such right in any court of competent jurisdiction
if (i) the claim for indemnification or advances is denied, in whole or in
part, or (ii) no disposition of such claim is made within ninety (90) days of
request therefor. The claimant in such enforcement action, if successful in
whole or in part, shall be entitled to be paid also the expense of prosecuting
his claim. The Corporation shall be entitled to raise by pleading as an
affirmative defense to any such action (other than an action brought to enforce
a claim for expenses incurred in connection with any proceeding in advance of
its final disposition when the required undertaking has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation
to indemnify the claimant for the amount claimed. Neither the failure of the
Corporation (including its Board of Directors,
15.
<PAGE> 20
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that claimant has not met the applicable standard of conduct.
(f) Non-Exclusivity of Rights. The rights conferred on
any person by this Bylaw shall not be exclusive of any other right which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, Bylaws, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding office. The
Corporation is specifically authorized to enter into individual contracts with
any or all of its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent permitted by the Delaware
General Corporation Law.
(g) Survival of Rights. The rights conferred on any
person by this Bylaw shall continue as to a person who has ceased to be a
Director, officer, employee or other agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
(h) Insurance. To the fullest extent permitted by the
Delaware General Corporation Law, the Corporation, upon approval by the Board
of Directors, may purchase insurance on behalf of any person required or
permitted to be indemnified pursuant to this Bylaw.
(i) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under this Bylaw in
effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the Corporation.
(j) Savings Clause. If this Bylaw or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each director to the full extent
permitted by any applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(k) Certain Definitions. For the purposes of this
Bylaw, the following definitions shall apply:
(1) The term "proceeding" shall be broadly
construed and shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement and appeal of any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative.
16.
<PAGE> 21
(2) The term "expenses" shall be broadly
construed and shall include, without limitation, court costs, attorneys' fees,
witness fees, fines, amounts paid in settlement or judgment and any other costs
and expenses of any nature or kind incurred in connection with any proceeding.
(3) The term the "Corporation" shall include, in
addition to the resulting corporation, any constituent Corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Bylaw with respect to the resulting or
surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
(4) References to a "director," "officer,"
"employee," or "agent" of the Corporation shall include, without limitation,
situations where such person is serving at the request of the Corporation as a
Director, officer, employee, trustee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
(5) References to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a Director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such Director, officer, employee,
or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Bylaw.
ARTICLE XII
Notices
Section 42. Notices.
(a) Notice to Stockholders. Whenever, under any
provisions of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, personally or timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last known post
office address as shown by the stock record of the Corporation or its transfer
agent.
(b) Notice to Directors. Any notice required to be given
to any Director may be given by the method stated in subsection (e) of Section
20 of these Bylaws except that such
17.
<PAGE> 22
notice other than one which is delivered personally shall be sent to such
address as such Director shall have filed in writing with the Secretary, or, in
the absence of such filing, to the last known post office address of such
Director.
(c) Address Unknown. If no address of a stockholder or
Director be known, notice may be sent to the office of the Corporation required
to be maintained pursuant to Section 2 hereof.
(d) Affidavit of Mailing. An affidavit of mailing,
executed by a duly authorized and competent employee of the Corporation or its
transfer agent appointed with respect to the class of stock affected,
specifying the name and address or the names and addresses of the stockholder
or stockholders, or Director or Directors, to whom any such notice or notices
was or were given, and the time and method of giving the same, shall be
conclusive evidence of the statements therein contained.
(e) Time Notices Deemed Given. All notices given by
mail, as above provided, shall be deemed to have been given as at the time of
mailing and all notices given by telegram shall be deemed to have been given as
at the sending time recorded by the telegraph company transmitting the notices.
(f) Methods of Notice. It shall not be necessary that
the same method of giving notice be employed in respect of all directors, but
one permissible method may be employed in respect of any one or more, and any
other permissible method or methods may be employed in respect of any other or
others.
(g) Failure to Receive Notice. The period or limitation
of time within which any stockholder may exercise any option or right, or enjoy
any privilege or benefit, or be required to act, or within which any Director
may exercise any power or right, or enjoy any privilege, pursuant to any notice
sent him in the manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such Director to receive such
notice.
(h) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law or of the
Certificate of Incorporation or Bylaws of the Corporation, to any person with
whom communication is unlawful, the giving of such notice to such person shall
not be required and there shall be no duty to apply to any governmental
authority or agency for a license or permit to give such notice to such person.
Any action or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same force and effect
as if such notice had been duly given. In the event that the action taken by
the Corporation is such as to require the filing of a certificate under any
provision of the Delaware General Corporation Law, the certificate shall state,
if such is the fact and if notice is required, that notice was given to all
persons entitled to receive notice except such persons with whom communication
is unlawful.
18.
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ARTICLE XIII
Amendments
Section 43. Amendments. Except as otherwise set forth in
paragraph 41(i) hereof, these Bylaws may be repealed, altered or amended or new
Bylaws adopted by the stockholders. In addition to any vote of the holders of
any class or series of stock of this Corporation required by law or by these
Bylaws, the affirmative vote of a majority of the voting power of all of the
then- outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of Directors, voting together as a single class,
shall be required to adopt, amend or repeal any provisions of the Bylaws of the
Corporation. Except as otherwise set forth in paragraph 41(i) hereof, the
Board of Directors shall also have the authority, if such authority is
conferred upon the Board of Directors by the Certificate of Incorporation, to
repeal, alter or amend these Bylaws or adopt new Bylaws (including, without
limitation, the amendment of any Bylaw setting forth the number of Directors
who shall constitute the whole Board of Directors) subject to the power of the
stockholders to change or repeal such Bylaws and provided that the Board of
Directors shall not make or alter any Bylaws fixing the qualifications,
classifications, term of office or compensation of Directors.
19.
<PAGE> 1
MAXIM INTEGRATED PRODUCTS, INC.
INCENTIVE STOCK OPTION PLAN
Adopted June 30, 1983
As Amended by the Board of Directors on October 20, 1983
with the Approval of the Shareholders on February 6, 1984
As Further Amended by the Board of Directors on June 27, 1984
with the Approval of the Shareholders on October 3, 1984
As Further Amended by the Board of Directors on September 10, 1985
with the Approval of the Shareholders on September 25, 1985
As Further Amended by the Board of Directors on August 14, 1986
with the Approval of the Shareholders on November 6, 1986
As Further Amended by the Board of Directors on February 14, June 2 and
August 26, 1987 with the Approval of the Shareholders
on October 19, 1987
As Further Amended by the Board of Directors on January 29 and
August 23, 1988 with the Approval of the Stockholders
on October 26, 1988
As Further Amended by the Board of Directors on August 24, 1989
with the Approval of the Stockholders on November 3, 1989
As Further Amended by the Board of Directors on August 9, 1990
with the Approval of the Stockholders on October 26, 1990
As Further Amended by the Board of Directors on May 8, 1991
with the Approval of the Stockholders on November 7, 1991
As Further Amended by the Board of Directors on August 13, 1992
with the Approval of the Stockholders on November 5, 1992
As Further Amended by the Board of Directors on August 25, 1993
with the Approval of the Stockholders on November 5, 1993
As Further Amended by the Board of Directors on February 17, 1994,
March 23, 1994, April 21, 1994, and May 12, 1994
with the Approval of the Stockholders on November 10, 1994
1.
<PAGE> 2
As Further Amended by the Board of Directors on August 10, 1995
with the Approval of the Stockholders on November ___, 1995
1. PURPOSE
(a) The purpose of the Plan is to provide a means by which employees of
Maxim Integrated Products, Inc., a Delaware corporation (the "Company"), and its
Affiliates, as defined in subparagraph 1(b), may be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now holding positions with the Company, to secure and retain the
services of persons capable of filling such positions, and to provide incentives
for such persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan be
incentive stock options as that term is used in Section 422 of the Code.
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
2.
<PAGE> 3
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; the provisions of each option granted (which need not be identical),
including the time or times during the term of each option within which all or
portions of such option may be exercised; and the number of shares for which an
option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) persons (who may, but need not, be members
of the Board) (the "Committee"), all of the members of which Committee shall be
disinterested persons, if required and as defined by the provisions of
subparagraph 2(d), and may also be, in the discretion of the Board, outside
directors, as defined by the provisions of subparagraph 2(f). If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the
3.
<PAGE> 4
Plan to the extent permitted by law, the powers theretofore possessed by the
Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. Notwithstanding anything in this paragraph 2 to the
contrary, the Board or the Committee may delegate to a committee of one or more
members of the Board the authority to grant options to eligible persons who (1)
are not then subject to Section 16 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and/or (2) are either (i) not then covered
employees (as defined by the provisions of subparagraph 2(e)) and are not
expected to be covered employees at the time of recognition of income resulting
from such option, or (ii) not persons with respect to whom the Company wishes to
comply with Section 162(m) of the Code.
(d) The term "disinterested person", as used in this Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subparagraph 2(c), who meets the definition of a "disinterested
person" set forth in Securities and Exchange Commission ("SEC") Rule 16b-3 or
any successor to such Rule.
(e) The term "covered employee," as used in this Plan, means the Chief
Executive Officer and the four (4) other highest compensated officers of the
Company.
(f) The term "outside director," as used in this Plan, means a director
who either (i) is not a current employee of the Company or an "affiliated
corporation" (as defined in the Treasury regulations promulgated under Section
162(m) of the Code), is not a former employee of the Company or an affiliated
corporation receiving compensation for prior services (other than benefits
4.
<PAGE> 5
under a tax qualified pension plan), was not an officer of the Company or an
affiliated corporation at any time, and is not currently receiving compensation
for personal services in any capacity other than as a director, or (ii) is
otherwise considered an "outside director" for purposes of Section 162(m) of the
Code.
(g) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate twenty-two million seven
hundred eighty thousand (22,780,000) shares (adjusted to reflect the stock
dividend effective November 23, 1994) of the Company's common stock; provided,
however, that such aggregate number of shares shall be reduced to reflect the
number of shares of the Company's common stock which has been sold under, or may
be sold pursuant to options granted under, the Company's 1987 Supplemental Stock
Option Plan, 1987 Employee Stock Participation Plan and Supplemental Nonemployee
Stock Option Plan to the same extent as if such sales had been made or options
had been granted pursuant to this Plan. If any option granted under the Plan
shall for any reason expire or otherwise terminate without having been exercised
in full, the stock not purchased under such option shall again become available
for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5.
<PAGE> 6
(c) An option may be granted to an eligible person under the Plan only
if the aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by such optionee during any calendar year under
all incentive stock option plans of the Company and its Affiliates does not
exceed one hundred thousand dollars ($100,000). Should it be determined that an
option granted under the Plan exceeds such maximum for any reason other than the
failure of a good faith attempt to value the stock subject to the option, such
option shall be considered a nonstatutory stock option to the extent, but only
to the extent, of such excess; provided, however, that should it be determined
that an entire option or any portion thereof does not qualify for treatment as
an incentive stock option by reason of exceeding such maximum, such option or
the applicable portion shall be considered a nonstatutory stock option.
4. ELIGIBILITY
(a) Options may be granted only to employees (including officers) of
the Company or its Affiliates. A director of the Company shall not be eligible
for the benefits of the Plan unless such director is also an employee (including
an officer) of the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and only if, at
any time discretion is exercised by the Board in the selection of a director as
a person to whom options may be granted, or in the determination of the number
or maximum number of shares which may be covered by options granted to a
director, a majority of the Board and a majority of the directors acting in such
matter are disinterested persons, as defined
6.
<PAGE> 7
in subparagraph 2(d). The Board shall otherwise comply with the requirements of
Rule 16b-3 promulgated under the Exchange Act, as from time to time in effect.
(c) No person shall be eligible for the grant of an option under the Plan if, at
the time of grant, such person owns (or is deemed to own pursuant to Section
424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any of its
Affiliates unless the option price is at least one hundred ten percent (110%) of
the fair market value of such stock at the date of grant and the term of the
option does not exceed five (5) years from the date of grant.
(c) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, no person shall be eligible to be granted options
covering more than one million five hundred thousand (1,500,000) shares
(adjusted to reflect the stock dividend effective November 23, 1994) of the
Company's common stock in any calendar year.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each option shall be not less than one
hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted.
7.
<PAGE> 8
(c) The purchase price of stock acquired pursuant to an option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i)
in cash at the time the option is exercised, or (ii) at the discretion of the
Board or the Committee, either at the time of grant or exercise of the option,
(A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at the minimum rate of interest
necessary to avoid the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the
deferred payment arrangement.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised
8.
<PAGE> 9
from time to time with respect to any shares then remaining subject to the
option. The provisions of this subparagraph 5(e) are subject to any option
provisions governing the minimum number of shares as to which an option may be
exercised.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters, and that he
or she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with any present intention of selling or otherwise distributing the stock. These
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the exercise of the option
has been registered under a then currently effective registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), or (ii), as
to any particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances under the
then applicable securities laws.
(g) An option shall terminate three (3) months after termination of the
optionee's employment with the Company or an Affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, in which
case the option may, but need not, provide that it may be exercised
9.
<PAGE> 10
at any time within one (1) year following such termination of employment; or
(ii) the optionee dies while in the employ of the Company or an Affiliate, or
within not more than three (3) months after termination of such employment, in
which case the option may, but need not, provide that it may be exercised at any
time within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such option pass by will
or by the laws of descent and distribution; or (iii) the option by its terms
specifies either (a) that it shall terminate sooner than three (3) months after
termination of the optionee's employment, or (b) that it may be exercised more
than three (3) months after termination of the optionee's employment with the
Company or an Affiliate. This subparagraph 5(g) shall not be construed to extend
the term of any option or to permit anyone to exercise the option after
expiration of its term, nor shall it be construed to increase the number of
shares as to which any option is exercisable from the amount exercisable on the
date of termination of the optionee's employment.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment with the
Company or any Affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.
6. COVENANTS OF THE COMPANY
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
10.
<PAGE> 11
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If the Company
is unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the Company shall be relieved from any liability for
failure to issue and sell stock upon exercise of such options unless and until
such authority is obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS
(a) The Board or the Committee shall have the power to accelerate the
time during which an option may be exercised, or the time during which an option
or any portion thereof will vest pursuant to subparagraph 5(e), notwithstanding
the provisions in the option stating the time during which it may be exercised
or the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
11.
<PAGE> 12
(c) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the
Company provided for in the bylaws of the Company and such other information
regarding the Company as the holder of such option may reasonably request.
(d) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee or optionee any right
to continue in the employ of the Company or any Affiliate or shall affect the
right of the Company or any Affiliate to terminate the employment of any
eligible employee or optionee with or without cause.
(e) Outstanding options may be Repriced (as defined below) only subject
to the following conditions: (1) Repricing may be approved as to a number of
shares subject to outstanding options equal to not more than five percent (5%)
of the Total Shares Subject to the Plan (defined below) in any twelve (12) month
period; (2) Repricing requires the approval of a majority of the Board or the
Committee; and (3) the Board or the Committee shall not Reprice options unless
it records in the minutes of its meeting or action by written consent its good
faith determination that the following conditions have been satisfied: Repricing
is to occur only infrequently and the determination to approve Repricing derives
principally from conditions other than poor operating performance by the
Company. To "Reprice" for purposes of this Plan shall mean to amend an
outstanding option to reduce its exercise price or to issue a new option with a
lower exercise price to replace an outstanding option with a higher exercise
price, in either case without a material
12.
<PAGE> 13
adverse (to the optionee) change in the other terms of the outstanding option.
The Total Shares Subject to the Plan shall mean the aggregate number of shares
initially reserved for issuance under the Plan plus all increases in shares
reserved for issuance after the initial reservation.
9. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, at the sole discretion of the
Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume any options outstanding under the Plan or shall
substitute similar options for those outstanding under the Plan, or (ii) the
time during which such
13.
<PAGE> 14
options may be exercised shall be accelerated and the options terminated if not
exercised prior to such event, or (iii) such options shall continue in full
force and effect.
10. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the vote of a
majority of the shares of the Company represented and voting at a duly held
meeting within twelve (12) months before or after the adoption of the amendment,
where the amendment will:
(i) Increase the number of shares reserved for options under the
Plan;
(ii) Materially modify the requirements as to eligibility for
participation in the Plan; or
(iii) Materially increase the benefits accruing to participants
under the Plan.
(a) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(b) It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to
14.
<PAGE> 15
employee incentive stock options and/or to bring the Plan and/or options granted
under it into compliance therewith.
(c) Rights and obligations under any option granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN
(d) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on August 12, 2002. No options may
be granted under the Plan while the Plan is suspended or after it is terminated.
(e) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN
The Plan as amended and restated herein shall become effective as
determined by the Board, but no options granted after the date of this amendment
and restatement of the Plan shall be exercised unless and until this restated
Plan has been approved by the vote of the holders of a majority of the
outstanding shares of the Company entitled to vote, or by the written consent of
the holders of the outstanding shares of the Company entitled to vote, to the
extent necessary under applicable laws to obtain incentive stock option
treatment under Section 422 of the Code, and, if required, an appropriate permit
has been issued by the Commissioner of Corporations of the State of California.
15.
<PAGE> 1
MAXIM INTEGRATED PRODUCTS, INC.
1987 SUPPLEMENTAL STOCK OPTION PLAN
Adopted June 2, 1987
As amended by the Board of Directors on August 26, 1987
Approved by Shareholders October 19, 1987
As further amended on January 29 and August 23, 1988
Approved by Stockholders on October 26, 1988
As further amended on August 24, 1988
Approved by Stockholders on November 3, 1989
As further amended on August 9, 1990
Approved by Stockholders on October 26, 1990
As further amended on May 8, 1991
Approved by Stockholders on November 7, 1991
As further amended on August 13, 1992
Approved by Stockholders on November 5, 1992
As further amended on August 25, 1993
Approved by Stockholders on November 5, 1993
As further amended on February 17, 1994,
March 23, 1994, April 21, 1994 and May 12, 1994
Approved by Stockholders on November 10, 1994
As further amended on August 10, 1995
Approved by Stockholders on November ___, 1995
1. PURPOSE
1.
<PAGE> 2
(a) The purpose of the Plan is to provide a means by which employees of
Maxim Integrated Products, Inc., a Delaware corporation (the "Company"), and its
Affiliates, as defined in subparagraph 1(b), may be given an opportunity to
purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now employed by the Company, to secure and retain the services of
persons capable of filling such positions and to provide incentives for such
persons to exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan not be
incentive stock options as that term is used in Section 422 of the Code.
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
<PAGE> 3
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; the provisions of each option granted (which need not be identical),
including the time or times during the term of each option within which all or
portions of such option may be exercised; and the number of shares for which an
option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) persons (who may, but need not, be members
of the Board) (the "Committee"), all of the members of which Committee shall be
disinterested persons, if required and as defined by the provisions of
subparagraph 2(d), and may also be, in the discretion of the Board, outside
directors, as defined by the provisions of subparagraph 2(f). If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan to the extent permitted by law, the powers
theretofore possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted
3.
<PAGE> 4
from time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan. Notwithstanding anything
in this paragraph 2 to the contrary, the Board or the Committee may delegate to
a committee of one or more members of the Board the authority to grant options
to eligible persons who (1) are not then subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and/or (2) are either (i)
not then covered employees (as defined by the provisions of subparagraph 2(e))
and are not expected to be covered employees at the time of recognition of
income resulting from such option, or (ii) not persons with respect to whom the
Company wishes to comply with Section 162(m) of the Code.
(d) The term "disinterested person," as used in this Plan, shall mean
an administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subparagraph 2(c), meets the definition of a "disinterested person"
set forth in Securities and Exchange Commission ("SEC") Rule 16b-3 or any
successor to such Rule.
(e) The term "covered employee," as used in this Plan, means the Chief
Executive Officer and the four (4) other highest compensated officers of the
Company.
(f) The term "outside director," as used in this Plan, means a director
who either (i) is not a current employee of the Company or an "affiliated
corporation" (as defined in the Treasury regulations promulgated under Section
162(m) of the Code), is not a former employee of the Company or an affiliated
corporation receiving compensation for prior services (other than benefits under
a tax qualified pension plan), was not an officer of the Company or an
affiliated corporation at any time, and is not currently receiving compensation
for personal services in any capacity other
4.
<PAGE> 5
than as a director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(g) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply if the Board or the Committee expressly
declares that such requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate twenty-two million seven
hundred eighty thousand (22,780,000) shares (adjusted to reflect the stock
dividend effective November 23, 1994) of the Company's common stock; provided,
however, that such aggregate number of shares shall be reduced to reflect the
number of shares of the Company's common stock which has been sold under, or may
be sold pursuant to outstanding options granted under, the Company's Incentive
Stock Option Plan, 1987 Employee Stock Participation Plan and Supplemental
Nonemployee Stock Option Plan to the same extent as if such sales had been made
or options had been granted pursuant to this Plan. If any option granted under
this Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for this Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
(c) There is no maximum limit on the aggregate fair market value of the
stock for which any eligible person may be granted options under the Plan in any
calendar year.
5.
<PAGE> 6
4. ELIGIBILITY
(a) Options may be granted only to employees (including officers) of
the Company or its Affiliates. A director of the Company shall not be eligible
for the benefits of the Plan unless such director is also an employee (including
an officer) of the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of the
Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and only if, at
any time discretion is exercised by the Board in the selection of a director as
a person to whom options may be granted, or in the determination of the number
or maximum number of shares which may be covered by options granted to a
director, a majority of the Board and a majority of the directors acting in such
matter are disinterested persons, as defined in subparagraph 2(d). The Board
shall otherwise comply with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. (c)No person shall be eligible for
the grant of an option under the Plan if, at the time of grant, such person owns
(or is deemed to own pursuant to Section 424(d) of the Code) stock possessing
more then ten percent (10%) of the total combined voting power of all classes of
stock of the Company or of any of its Affiliates unless the option price is at
least one hundred ten percent (110%) of the fair market value of such stock at
the date of grant and the term of the option does not exceed five (5) years from
the date of grant.
(c) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, no person shall be eligible to be granted options
covering more than one million five hundred
6.
<PAGE> 7
thousand (1,500,000) shares (adjusted to reflect the stock dividend effective
November 23, 1994) of the Company's common stock in any calendar year.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each option shall be not less than
eighty-five percent (85%) of the fair market value of the stock subject to the
option on the date the option is granted; provided, however, that no option may
be granted at less than one hundred percent (100%) of the fair market value
except as follows: (1) Any grant at less than one hundred percent (100%) of fair
market value requires the approval of the Committee; (2) the Committee shall not
grant such option unless it records in the minutes of its meeting or action by
written consent its good faith determination that the following conditions have
been satisfied: grants of this nature are to be made only infrequently and only
where good business reasons outweigh a normal presumption in favor of grants at
one hundred percent (100%) of fair market value; and (3) the total number of
shares of stock subject to grant at less than one hundred percent (100%) of the
fair market value shall not exceed five percent (5%) of the Total Shares Subject
to the Plan. The Total Shares Subject to the Plan shall mean the
7.
<PAGE> 8
aggregate number of shares initially reserved for issuance under the Plan plus
all increases in shares reserved for issuance after the initial reservation.
(c) The purchase price of stock acquired pursuant to an option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i)
in cash at the time the option is exercised, or (ii) at the discretion of the
Board or the Committee, either at the time of grant or exercise of the option
(A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee.
Deferred payment arrangements may be interest free or may provide for
interest at any rate deemed appropriate by the Board or the Committee.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised
8.
<PAGE> 9
from time to time with respect to any shares then remaining subject to the
option. The provisions of this subparagraph 5(e) are subject to any option
provisions governing the minimum number of shares as to which an option may be
exercised.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who
is knowledgeable and experienced in financial and business matters that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with a view to or for sale in connection with any distribution of the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii), as to any particular requirement, a determination is made by counsel
for the Company that such requirement need not be met in the circumstances under
the then applicable securities laws.
(g) An option shall terminate three (3) months after termination of the
optionee's employment with the Company or an Affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent and
total disability, within the meaning of Section 422(c)(6) of the Code, in which
case the option may, but need not, provide that it may be
<PAGE> 10
exercised at any time within one (1) year following such termination of
employment; or (ii) the optionee dies while in the employ of the Company or an
Affiliate, or within not more than three (3) months after termination of such
employment, in which case the option may, but need not, provide that it may be
exercised at any time within eighteen (18) months following the death of the
optionee by the person or persons to whom the optionee's rights under such
option pass by will or by the laws of descent and distribution; or (iii) the
option by its terms specifies either (a) that it shall terminate sooner than
three (3) months after termination of the optionee's employment, or (b) that it
may be exercised more than three (3) months after termination of the optionee's
employment with the Company or an Affiliate. This subparagraph 5(g) shall not be
construed to extend the term of any option or to permit anyone to exercise the
option after expiration of its term, nor shall it be construed to increase the
number of shares as to which any option is exercisable from the amount
exercisable on the date of termination of the optionee's employment.
(h) The option may, but need not, include a provision whereby the
optionee may elect at any time during the term of his or her employment with the
Company or any Affiliate to exercise the option as to any part or all of the
shares subject to the option prior to the stated vesting date of the option or
of any installment or installments specified in the option. Any shares so
purchased from any unvested installment or option may be subject to a repurchase
right in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.
6. COVENANTS OF THE COMPANY
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
10.
<PAGE> 11
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS
(a) The Board or the Committee shall have the power to accelerate the
time during which an option may be exercised or the time during which an option
or any portion thereof will vest pursuant to subparagraph 5(e), notwithstanding
the provisions in the option stating the time during which it may be exercised
or the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
11.
<PAGE> 12
(c) Throughout the term of any option granted pursuant to the Plan, the
Company shall make available to the holder of such option, not later than one
hundred twenty (120) days after the close of each of the Company's fiscal years
during the option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the shareholders of the
Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible person or optionee any right to
continue in the employ of the Company or any Affiliate or shall affect the right
of the Company or any Affiliate to terminate the employment of any eligible
person or optionee with or without cause.
(e) Outstanding options may be Repriced (as defined below) only subject
to the following conditions: (1) Repricing may be approved as to a number of
shares subject to outstanding options equal to not more than five percent (5%)
of the Total Shares Subject to the Plan (defined below) in any twelve (12) month
period; (2) Repricing requires the approval of a majority of the Board or the
Committee; and (3) the Board or the Committee shall not Reprice options unless
it records in the minutes of its meeting or action by written consent its good
faith determination that the following conditions have been satisfied: Repricing
is to occur only infrequently and the determination to approve Repricing derives
principally from conditions other than poor operating performance by the
Company. To "Reprice" for purposes of this Plan shall mean to amend an
outstanding option to reduce its exercise price or to issue a new option with a
lower exercise price to replace an outstanding option with a higher exercise
price, in either case without a material adverse (to the optionee) change in the
other terms of the outstanding option. The Total Shares
12.
<PAGE> 13
Subject to the Plan shall mean the aggregate number of shares initially reserved
for issuance under the Plan plus all increases in shares reserved for issuance
after the initial reservation.
9. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, at the sole discretion of the
Board and to the extent permitted by applicable law: (i) any surviving
corporation shall assume any options outstanding under the Plan or shall
substitute similar options for those outstanding under the Plan, or (ii) the
time during which such options may be exercised shall be accelerated and the
option terminated if not exercised prior to such event, or (iii) such options
shall continue in full force and effect.
13.
<PAGE> 14
10. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the vote of a
majority of the shares of the Company represented and voting at a duly held
meeting within twelve (12) months before or after the adoption of the amendment,
where the amendment will:
(i) Increase the number of shares reserved for options under the
Plan;
(ii) Materially modify the requirements as to eligibility for
participation in the Plan; or
(iii) Materially increase the benefits accruing to participants
under the Plan except to the extent permitted by Rule 16b-3 promulgated under
the Exchange Act, as those rules are in effect at the time the amendment is
adopted by the Board.
(b) The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) Rights and obligations under any option granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom the option was granted.
11. TERMINATION OR SUSPENSION OF THE PLAN
14.
<PAGE> 15
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No options may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN
The Plan as amended and restated herein shall become effective as
determined by the Board, but no options granted after the date of this amendment
and restatement of the Plan shall be exercised unless and until this amended and
restated Plan has been approved by the vote or written consent of the holders of
a majority of the outstanding shares of the Company entitled to vote, and, if
required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
15.
<PAGE> 1
MAXIM INTEGRATED PRODUCTS, INC.
SUPPLEMENTAL NONEMPLOYEE STOCK OPTION PLAN
Adopted October 20, 1983
As Amended by the Board of Directors on August 14, 1986
Approved by the Shareholders on October 19, 1987
As Further Amended by the Board of Directors on January 29 and April 22, 1988
As Further Amended by the Board of Directors on August 9, 1990
As Further Amended by the Board of Directors on May 8, 1991
As Further Amended by the Board of Directors on August 13, 1992
As Further Amended by the Board of Directors on August 25, 1993
As Further Amended by the Board of Directors on
February 17, 1994, March 23, 1994, April 21, 1994, and May 12, 1994
As Further Amended by the Board of Directors on August 10, 1995
1. PURPOSE
(a) The purpose of the Plan is to provide a means by which selected
consultants, advisors, independent contractors, vendors, customers and other
persons (which term shall include, for purposes of this Plan, individuals,
partnerships, corporations and other entities) having a past, current or
prospective business relationship with Maxim Integrated Products, Inc., a
Delaware corporation (the Company"), or any of its affiliates, as defined in
subparagraph 1(b), may be given an opportunity to purchase stock of the Company.
The Company, by means of the Plan, seeks to secure, retain and enhance the
benefits of relationships with such persons.
1.
<PAGE> 2
(b) The word "affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Section 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when, how and for what price, if any,
the option shall be granted; the provisions of each option granted (which need
not be identical), including the time or times during the term of each option
within which all or portions of such option may be exercised; and the number of
shares for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
2.
<PAGE> 3
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee of
the Board. If administration is delegated to a committee, the committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the committee at any time and revest in the Board
the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 9 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to options granted
under the Plan shall not exceed in the aggregate twenty-two million seven
hundred eighty thousand (22,780,000) shares (adjusted to reflect the stock
dividend effective November 23, 1994) of the Company's Common Stock; provided,
however, that such aggregate number of shares shall be reduced to reflect the
number of shares of the Company's common stock which has been sold under, or may
be sold pursuant to outstanding options granted under, the Company's Incentive
Stock Option Plan, 1987 Employee Stock Participation Plan and 1987 Supplemental
Stock Option Plan to the same extent as if such sales had been made or options
had been granted pursuant to this Plan. If any option granted under the Plan
shall for any reason expire or otherwise terminate without having been exercised
in full, the stock not purchased under such option shall again become available
for the Plan. In addition, if
3.
<PAGE> 4
options granted under the Plan are exercised in accordance with the option
prior to the full vesting thereof, and shares of the stock so acquired are
thereafter repurchased by the Company in accordance with the terms of such
option, the stock so repurchased shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. ELIGIBILITY
Options may be granted to any person having a past, current or
prospective business relationship with the Company or any of its affiliates as
to whom the Board or the committee has determined that providing such person an
opportunity for an equity interest in the Company is likely to be beneficial to
the Company or any of its affiliates. Eligible persons may include, without
limiting the generality of the foregoing, consultants, advisors, independent
contractors, suppliers and customers. Persons eligible under this Plan shall not
include (a) any person who is an employee of the Company or any of its
affiliates at the time of grant (but such person's subsequently becoming an
employee of the Company or an affiliate during the term of the option shall not
affect the option, and the exercisability of an option may be conditioned upon
an optionee's becoming and/or remaining an employee of the Company or an
affiliate), (b) any director of the Company, or (c) any person in which or whom
any director of the Company has any material financial interest. It shall be a
condition precedent to the effectiveness of any option grant hereunder that the
prospective optionee shall certify (A) as to what, if any, material financial
interest in such optionee is held by any director or officer of the Company and
(B) that the grantee
4.
<PAGE> 5
has made whatever disclosures as to the option grant and effected all other
compliances that may be required by him by law or by his employer, partners or
other persons to whom he may owe a duty of disclosure as to the option grant.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as the Board or the committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The price to be paid upon acquisition of the option, provided that
such price may be equal to zero. Any such acquisition price shall be paid in
cash or in any other form of legal consideration that may be acceptable to the
Board or the committee in their discretion.
(b) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(c) The exercise price of each option shall be not less than one
hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted.
(d) The purchase price of stock acquired pursuant to an option shall be
paid, as specified in the option, either (i) in cash at the time the option is
exercised, or (ii) at the discretion of the Board or the committee, (A) by
delivery to the Company of other common stock of the Company, (B) according to a
deferred payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other common stock of the Company) with
the person to whom the option is granted or to whom the option is transferred
pursuant to
5.
<PAGE> 6
subparagraph 5(e), or (C) in any other form of legal consideration that may be
acceptable to the Board or the committee in their discretion, either at the
time of grant or exercise of the option.
In the case of any deferred payment arrangement specified at the time
of grant, an interest rate shall be stated which is not less than the rate then
specified which will prevent any imputation of higher interest under Section 483
of the Code.
(e) An option shall not be transferable except by will or by the laws
of descent and distribution or, as to a person other than an individual, in
connection with a merger or a sale or transfer of all or substantially all the
assets of the optionee.
(f) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the option
may be exercised with respect to some or all of the shares allotted to that
period, and/or with respect to some or all of the shares allotted to any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The provisions of this subparagraph
5(f) are subject to any option provisions governing the minimum number of shares
as to which an option may be exercised.
(g) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(e), as a condition of exercising any
such option: (1) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters and/or
to employ a purchaser representative who has such knowledge
6.
<PAGE> 7
and experience in financial and business matters that he is capable of
evaluating, alone or together with the optionee, the merits and risks of
exercising the option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (i) the issuance of the
shares upon the exercise of the option has been registered under a then
currently effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii), as to any particular requirement, a
determination is made by counsel for the Company that such requirement is not
required in the circumstances under the then applicable federal securities
laws.
6. COVENANTS OF THE COMPANY
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If the Company
is unable to obtain from any such regulatory commission or agency the authority
which counsel for the Company deems necessary for the lawful issuance and sale
of stock under the Plan, the
7.
<PAGE> 8
Company shall be relieved from any liability for failure to issue and sell
stock upon exercise of such options unless and until such authority is
obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
8. MISCELLANEOUS
(a) The Board or the committee shall have the power to accelerate the
time during which an option may be exercised, notwithstanding the provisions in
the option stating the time during which it may be exercised.
(b) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
9. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject
to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Board may make
appropriate adjustments in the maximum number of shares subject to the Plan and
the number of shares and price per share of stock subject to outstanding
options.
8.
<PAGE> 9
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, any outstanding options under the Plan
shall terminate, unless another corporation assumes such options or substitutes
similar options for those under the Plan or the Board determines in its sole
discretion that such options shall continue in full force and effect.
10. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
(b) Rights and obligations under any option granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom the option was granted.
11. TERMINATION OR SUSPENSION OF THE PLAN
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on August 12, 2002. No options may
be granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
9.
<PAGE> 10
12. EFFECTIVE DATE OF PLAN
The Plan as amended and restated herein shall become effective as
determined by the Board.
10.
<PAGE> 1
MAXIM INTEGRATED PRODUCTS, INC.
1987 EMPLOYEE STOCK PARTICIPATION PLAN
Adopted August 26, 1987
Approved by Shareholders on October 19, 1987
Amended January 29 and August 23, 1988
Approved by Stockholders on October 26, 1988
Amended August 24, 1989
Approved by Stockholders on November 3, 1989
Amended August 9, 1990
Approved by Stockholders on October 26, 1990
Amended May 8, 1991
Approved by Stockholders on November 7, 1991
Amended August 13, 1992
Approved by Stockholders on November 5, 1992
Amended August 25, 1993
Approved by Stockholders on November 5, 1993
Amended February 17, 1994, March 23, 1994,
April 21, 1994, and May 12, 1994
Approved by Stockholders on November 10, 1994
Amended November 10, 1994
Amended August 10, 1995
Approved by Stockholders on November ____, 1995
1. PURPOSE
(a) The purpose of the Plan is to provide a means by which employees of
Maxim Integrated Products, Inc., a Delaware corporation (the "Company"), and its
Affiliates, as defined in
1.
<PAGE> 2
subparagraph 1(b), which are designated as provided in subparagraph 2(b), may
be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
2.
<PAGE> 3
(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than three (3) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate twenty-two million seven
hundred eighty thousand (22,780,000) shares (adjusted to reflect the stock
dividend effective November 23, 1994) of the Company's $.001 par value common
stock (the "Common Stock"); provided, however, that such aggregate number of
shares
3.
<PAGE> 4
shall be reduced to reflect the number of shares of the Company's Common Stock
which has been sold under, or may be sold pursuant to outstanding options
granted under, the Company's Incentive Stock Option Plan, 1987 Supplemental
Stock Option Plan and Supplemental Nonemployee Stock Option Plan to the same
extent as if such sales had been made or options had been granted pursuant to
this Plan. If any right granted under the Plan shall for any reason terminate
without having been exercised, the Common Stock not purchased under such right
shall again become available for the Plan.
4. GRANT OF RIGHTS; OFFERING
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder: (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right with
a lower exercise price (or an earlier-granted right, if two rights have
identical exercise prices), will be exercised to the fullest possible extent
before a right with a higher exercise price (or a later-granted right, if two
rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through 8, inclusive.
4.
<PAGE> 5
5. ELIGIBILITY
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the Offering, no employee of the Company or any
Affiliate shall be eligible to be granted rights under the Plan, unless, on the
Offering Date, such employee's customary employment with the Company or such
Affiliate is at least twenty (20) hours per week and at least five (5) months
per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;
5.
<PAGE> 6
(ii) the Purchase Period (as defined below) for such right shall
begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board or the Committee may provide that if such person
first becomes an eligible employee within a specified period of time before the
end of the Purchase Period (as defined below) for such Offering, he or she will
not receive any right under that Offering.
(c) Directors and executive officers of the Company or an Affiliate who
are highly compensated employees within the meaning of Section 423(b)(4)(D) of
the Code are not eligible to be granted rights under the Plan.
(d) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(d), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
(e) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at the
time such rights are granted) for each calendar year in which such rights are
outstanding at any time.
6.
<PAGE> 7
6. RIGHTS; PURCHASE PRICE
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase the number
of shares of Common Stock of the Company purchasable with up to twenty percent
(20%) of such employee's Compensation (as defined in Section 7(a)) during the
period which begins on the Offering Date (or such later date as the Board
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the Committee shall specify a maximum number of
shares which may be purchased by any employee as well as a maximum aggregate
number of shares which may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each such Offering, the Board or
the Committee may specify the maximum fair market value of Common Stock which
may be purchased by any employee pursuant to such Offering as well as a maximum
aggregate number of shares which may be purchased by all eligible employees on
any given Exercise Date (as defined in the Offering) under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
7.
<PAGE> 8
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Exercise Date.
7. PARTICIPATION; WITHDRAWAL; TERMINATION
(a) An eligible employee may become a participant in an Offering by
delivering an agreement to the Company within the time specified in the
Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to twenty percent (20%) of such employee's
Compensation during the Purchase Period. Compensation is defined as total cash
compensation, including commissions, bonuses, overtime and other cash
compensation, and amounts elected to be deferred by the employee (that would
otherwise have been paid) under the Company's Cash or Deferred Savings Plan. The
payroll deductions made for each participant shall be credited to an account for
such participant under the Plan and shall be deposited with the general funds of
the Company. At any time during the Purchase Period a participant may terminate
his or her payroll deductions. A participant may reduce, increase or begin such
payroll deductions after the beginning of any Purchase Period only as provided
for in the Offering. If specifically allowed pursuant to the terms of an
Offering, a participant may make direct payments into his or her account to the
extent such participant has not had the maximum amount withheld during the
Purchase Period.
(b) If a participant terminates his or her payroll deductions, such
participant may withdraw from the Offering by delivering to the Company a notice
of withdrawal in such form as
8.
<PAGE> 9
the Company provides. Such withdrawal may be elected at any time prior to the
end of the Purchase Period. Upon such withdrawal from the Offering by a
participant, the Company shall distribute to such participant all of his or her
accumulated payroll deductions (reduced to the extent, if any, such deductions
have been used to acquire stock for the participant) under the Offering without
interest, and such participant's interest in that Offering shall be
automatically terminated. A participant's withdrawal from an Offering will have
no effect upon such participant's eligibility to participate in any other
Offerings under the Plan but such participant will be required to deliver a new
participation agreement in order to participate in other Offerings under the
Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), without interest.
(d) Rights granted under the Plan shall not be transferable, and shall
be exercisable only by the person to whom such rights are granted.
8. EXERCISE
(a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted
9.
<PAGE> 10
under the Plan. The amount, if any, of accumulated payroll deductions remaining
in each participant's account after the purchase of shares which is less than
the amount required to purchase one share of stock on the final Exercise Date of
an Offering shall be held in each such participant's account for the purchase of
shares under the next Offering under the Plan, unless such participant withdraws
from such next Offering, as provided in subparagraph 7(b), or is no longer
eligible to be granted rights under the Plan, as provided in paragraph 5, in
which case such amount shall be distributed to such participant after such
Exercise Date, without interest. The amount, if any, of accumulated payroll
deductions remaining in any participant's account after the purchase of shares
which is equal to the amount required to purchase whole shares of stock on the
final Exercise Date of an Offering shall be distributed in full to such
participant after such Exercise Date, without interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). If, on an Exercise Date of any Offering hereunder, the Plan
is not so registered, no rights granted under the Plan or any Offering shall be
exercised and all payroll deductions accumulated during the Purchase Period
(reduced to the extent, if any, such deductions have been used to acquire stock
for the participants) shall be distributed to the participants, without
interest.
9. COVENANTS OF THE COMPANY
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
10.
<PAGE> 11
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall have
been issued.
12. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and the maximum number of
shares subject to
11.
<PAGE> 12
the Plan and the class(es) and the number of shares and price per share of
stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion, any surviving corporation shall assume outstanding rights or
substitute similar rights for those under the Plan, such rights shall continue
in full force and effect, or such rights shall be exercised immediately prior to
such event.
13. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the vote of a
majority of the shares of the Company represented and voting at a duly held
meeting within 12 months before or after the adoption of the amendment, where
the amendment will:
(i) Increase the number of shares reserved for rights under the
Plan;
(ii) Modify the provisions as to eligibility for participation in
the Plan (to the extent such modification requires stockholder approval in order
for the Plan to obtain employee stock purchase plan treatment under Section 423
of the Code); or
12.
<PAGE> 13
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code. It is expressly
contemplated that the Board may amend the Plan in any respect the Board deems
necessary or advisable to provide eligible employees with the maximum benefits
provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to employee stock purchase plans and/or to bring
the Plan and/or rights granted under it into compliance therewith.
(b) Rights and obligations under any rights granted before amendment of
the Plan shall not be impaired by any amendment of the Plan, except with the
consent of the person to whom such rights were granted.
14. TERMINATION OR SUSPENSION OF THE PLAN
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No rights may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom such rights were granted.
15. EFFECTIVE DATE OF PLAN
The Plan as amended and restated herein shall become effective as
determined by the Board, but no rights granted after the date of this amendment
and restatement of the Plan shall be
13.
<PAGE> 14
exercised unless and until this amended and restated Plan has been approved by
the vote of the holders of a majority of the outstanding shares of the Company
entitled to vote or by the written consent of the holders of the outstanding
shares of the Company entitled to vote to the extent necessary to obtain
employee stock purchase plan treatment under Section 423 of the Code, and, if
required, an appropriate permit has been issued by the Commissioner of
Corporations of the State of California.
14.
<PAGE> 1
MAXIM INTEGRATED PRODUCTS, INC.
EXHIBIT 11.1 - COMPUTATION OF
INCOME PER SHARE
Three Years Ended June 30, 1995
(amounts in thousands, except per share data)
<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Weighted average shares outstanding 27,235 28,284 28,926
Add weighted average shares from assumed exercise
of options when treasury shares are reacquired
at average stock market price 4,209 5,396 6,574
Less weighted average shares assumed repurchased
from tax benefit from the assumed exercise
of non-qualified stock options (1,419) (1,866) (2,249)
------- ------- -------
Weighted average shares outstanding applicable
to computation of income per share 30,025 31,814 33,251
======= ======= =======
Net income applicable to computation of
income per share $17,282 $24,082 $38,906
======= ======= =======
Income per share $ 0.58 $ 0.76 $ 1.17
======= ======= =======
</TABLE>
26
<PAGE> 1
EXHIBIT 13.1
MAXIM INTEGRATED PRODUCTS
1995 ANNUAL REPORT
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS:
Net Revenues The Company reported net revenues of $250.8 million in fiscal
1995, up $96.9 million or 63.0% from fiscal 1994. Fiscal 1994 net revenues
exceeded fiscal 1993 by $43.7 million or 39.7%. These increases in revenues
resulted from the continued introduction of new proprietary products and
increased market acceptance of the Company's proprietary and second-source
products.
Approximately 49% of the Company's net revenues were derived from customers
outside the U.S., primarily in Europe and the Pacific Rim (52% in fiscal 1994
and 51% in fiscal 1993). In 1995, approximately 18% of the Company's net sales
were denominated in foreign currencies. The impact on the Company's operating
results from changes in foreign currencies has not been material.
Gross Margin The Company's gross margin as a percentage of net revenues was
58.7%, 58.3% and 57.5% in fiscal 1995, 1994, and 1993, respectively. The
improvements in fiscal 1995 and 1994 were principally due to continued economies
of scale and improved production yields, as well as an increasing proportion of
proprietary products in the mix of products sold, which generally yield a
somewhat higher gross margin than second-source products.
In addition to the factors above, gross margins were adversely affected in
fiscal 1995 due to a $11.7 million charge related to the Company's program to
modernize its equipment and manufacturing facilities. The charge relates to a
cumulative adjustment for depreciation as a result of changing estimates of
useful lives associated with equipment that management estimates will be
replaced or substantially upgraded over the next three years. Gross margins were
also adversely affected in fiscal 1995 due to approximately $2.3 million of
other charges related to the Company's conversion to 6" wafers.
Research and Development The Company is constantly working to introduce new
products through its research and development efforts. Research and development
expenses were 16.9%, 14.7% and 14.9% of net revenues in fiscal 1995, 1994, and
1993, respectively. The percentage increase from fiscal 1994 to 1995 was due, in
part, to $5.4 million of charges relating to the Company's program to modernize
its equipment. The percentage decrease from fiscal 1993 to 1994 was due to sales
volume increases, although actual expense increased due to the continued
emphasis on developing new products.
Selling, General and Administrative Selling, general and administrative
expenses were 19.0%, 20.5% and 19.5% of net revenues in fiscal 1995, 1994, and
1993, respectively. The percentage decrease from fiscal year 1994 to 1995 was
primarily due to increased sales volume, although actual expense increased
primarily due to the Company's international expansion and certain one-time
costs associated with technology licensing matters, and charges for $0.9 million
related to the acceleration of depreciation for certain assets that will be
substantially replaced or upgraded.
Interest Interest income and expense consisted of interest income from the
Company's investments. Interest expense, primarily related to operating leases,
was insignificant.
2
<PAGE> 3
Provision for Income Taxes Effective July 1, 1993, the Company adopted
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("FAS 109"). The cumulative effect of the adoption of FAS 109 was not
material. As permitted under FAS 109, the Company elected not to restate the
financial statements of any prior years.
The effective tax rate in fiscal 1995 decreased to 35% from 36% in fiscal 1994.
The effective tax rate in fiscal 1993 was 35%.
1996 OUTLOOK:
During the latter half of fiscal 1995, worldwide demand for precision analog
integrated circuits exceeded the industry's expectations and capacity. As a
result, we believe that industry-wide inventories have declined to record low
levels, resulting in 8 to 9 times turns (versus a more normal ratio of around
2.5), that lead times of manufacturers have doubled and tripled, and that
manufacturing capacity is generally in a sold-out situation for the next year.
Worldwide demand for the Company's products is also at record levels across all
geographic regions and all sales channels. Acceptance of new products in fiscal
1995 continued to accelerate, with customers designing in Maxim's new products
at a much faster rate than previously experienced. Maxim has doubled its
customer base over the past year and increased the direct OEM portion of its
business to over 40%. The demand for the Company's products in the third and
fourth quarters exceeded the Company's record 68% growth in revenues reported in
the second half of fiscal 1995.
The Company ended fiscal 1995 with backlog shippable in the next 12 months of
$199 million (compared to $64 million at the end of fiscal 1994). Included in
the total backlog at year-end fiscal 1995 was $69 million of backlog that had
been requested by customers for shipment in the second half of fiscal 1995.
Maxim considers that $69 million to be delinquent. Because of this record demand
in the third and fourth quarters of fiscal 1995, which unexpectedly exceeded the
Company's manufacturing capacity, the Company was unable to respond to
customers' requests in this period. We believe that our competitors are in a
similar situation. However, with the purchase of the Tektronix
60,000-square-foot Beaverton, Oregon wafer fabrication facility, our substantial
investment in manufacturing equipment in the past 6 months, and the nearly
completed conversion of our Beaverton capacity to 6" wafers, Maxim believes that
it is now one of the few precision analog companies with capacity to respond to
its customers and benefit from the increased industry demand.
Because of this position of the Company relative to its competition and to meet
our commitment to our customers, the Company has set a major goal for fiscal
1996 to ship during the first three quarters of fiscal 1996 the $69 million of
delinquent backlog in addition to the demand for this same period. If
successful, this effort will create a two-quarter substantial increase, or
bulge, in our revenues and earnings for the second and third quarters.
After the delinquent backlog has worked its way through our system, we plan to
return our revenues to more normal levels consistent with our historic trend
line. Our plan, therefore, calls for a reduction in fourth quarter 1996 revenues
and earnings below those of the third quarter. This decline in revenue may not
occur if demand increases beyond our current expectations, but we have developed
our business plan, including our spending plan, on the
3
<PAGE> 4
assumption that the fourth quarter will step down to a level consistent with
what would have been more normal growth progressing from our first quarter of
fiscal 1996 as the base.
FINANCIAL CONDITION:
Overview Total assets grew to $256.1 million at the end of fiscal 1995, up
from $178.5 million at the end of fiscal 1994. The increase is due to favorable
operating results for the year.
Liquidity and Capital Resources The Company's primary source of funds for
fiscal 1995, 1994, and 1993 has been the net cash generated from operating
activities of approximately $86.9 million, $48.2 million and $26.3 million,
respectively. In addition, the Company received approximately $9.8 million, $6.4
million and $4.8 million of proceeds from the exercises of stock options during
fiscal 1995, 1994, and 1993, respectively.
The principal uses of funds for fiscal 1995 were purchases of property, plant
and equipment of $35.6 million ($21.8 million in 1994 and $12.7 million in 1993)
and repurchases of $11.9 million ($6.5 million in 1994 and $1.3 million in 1993)
of the Company's common stock.
As of June 30, 1995, the Company's available funds consisted of approximately
$92.3 million in cash, cash equivalents and short-term U.S. Government-backed
investments.
The Company anticipates that the available funds and cash generated from
operations will be sufficient to meet cash and working capital requirements
through the end of fiscal 1996.
4
<PAGE> 5
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
June 30,
(Amounts in thousands, except share data) 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
- --------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 28,033 $ 54,966
Short-term investments 20,397 37,329
- --------------------------------------------------------------------------------
Total cash, cash equivalents and
short-term investments 48,430 92,295
Accounts receivable (net of allowance for doubtful
accounts of $379 in 1994 and $1,145 in 1995) 17,950 27,714
Inventories 18,330 19,105
Prepaid taxes and other current assets 14,770 22,708
- --------------------------------------------------------------------------------
Total current assets 99,480 161,822
- --------------------------------------------------------------------------------
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 77,696 87,925
Other assets 1,347 6,386
- --------------------------------------------------------------------------------
$178,523 $256,133
- --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------
Current liabilities:
Current portion of capital lease obligations $ 134 $ 40
Accounts payable 10,695 24,785
Income taxes payable 5,175 1,805
Accrued salaries 6,203 9,795
Accrued expenses 14,182 16,358
Payable related to building acquisitions -- 5,550
Deferred income on shipments to distributors 7,046 7,511
- --------------------------------------------------------------------------------
Total current liabilities 43,435 65,844
- --------------------------------------------------------------------------------
Capital lease obligations, less current portion 40 --
Other Liabilities -- 6,000
Deferred income taxes 4,856 5,579
Commitments and Contingencies -- --
- --------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock, $0.001 par value;
Authorized: 2,000,000 shares;
Issued and outstanding: none -- --
Common stock, $0.001 par value;
Authorized: 60,000,000 shares;
Issued and outstanding: 28,673,454 shares in
1994 and 29,436,579 shares in 1995 29 30
Additional paid-in capital 55,577 64,926
Retained earnings 74,545 113,451
Translation adjustment 41 303
- --------------------------------------------------------------------------------
Total stockholders' equity 130,192 178,710
- --------------------------------------------------------------------------------
$178,523 $256,133
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
5
<PAGE> 6
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
For the years ended June 30,
(Amounts in thousands, except per share data) 1993 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenues $110,184 $153,932 $250,820
Cost of goods sold 46,841 64,250 103,598
- --------------------------------------------------------------------------------
Gross margin 63,343 89,682 147,222
- --------------------------------------------------------------------------------
Operating expenses:
Research and development 16,426 22,561 42,392
Selling, general and administrative 21,469 31,547 47,596
- --------------------------------------------------------------------------------
37,895 54,108 89,988
- --------------------------------------------------------------------------------
Operating income 25,448 35,574 57,234
Interest expense (134) (55) (25)
Interest income 1,274 2,109 2,646
- --------------------------------------------------------------------------------
Income before provision
for income taxes 26,588 37,628 59,855
Provision for income taxes 9,306 13,546 20,949
- --------------------------------------------------------------------------------
Net income $ 17,282 $ 24,082 $ 38,906
- --------------------------------------------------------------------------------
Income per share $ 0.58 $ 0.76 $ 1.17
- --------------------------------------------------------------------------------
Common and common equivalent shares 30,025 31,814 33,251
- --------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
6
<PAGE> 7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Common
Stock Additional
For the years ended June 30, --------------------- Paid-In Retained Translation
(Amounts in thousands, except share data) Shares Amount Capital Earnings Adjustment Total
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, JUNE 30, 1992 26,642,818 $26 $ 39,183 $ 33,181 $(113) $ 72,277
Exercise of stock options under
the Stock Option and Purchase
Plans 1,295,938 2 4,835 -- -- 4,837
Repurchase of common stock (100,000) -- (1,297) -- -- (1,297)
Tax benefit on exercise of non-qualified
stock options and disqualifying
dispositions under stock plans -- -- 4,814 -- -- 4,814
Translation adjustment -- -- -- -- (577) (577)
Net income -- -- -- 17,282 -- 17,282
- ---------------------------------------------------------------------------------------------------------------------
BALANCES, JUNE 30, 1993 27,838,756 28 47,535 50,463 (690) 97,336
Exercise of stock options under
the Stock Option and Purchase
Plans 1,119,698 1 6,360 -- -- 6,361
Repurchase of common stock (285,000) -- (6,493) -- -- (6,493)
Warrants -- -- 2,000 -- -- 2,000
Tax benefit on exercise of non-qualified
stock options and disqualifying
dispositions under stock plans -- -- 6,175 -- -- 6,175
Translation adjustment -- -- -- -- 731 731
Net income -- -- -- 24,082 -- 24,082
- ---------------------------------------------------------------------------------------------------------------------
BALANCES, JUNE 30, 1994 28,673,454 29 55,577 74,545 41 130,192
Exercise of stock options under
the Stock Option and Purchase
Plans 1,151,625 1 9,765 -- -- 9,766
Repurchase of common stock (388,500) -- (11,936) -- -- (11,936)
Tax benefit on exercise of non-qualified
stock options and disqualifying
dispositions under stock plans -- -- 11,520 -- -- 11,520
Translation adjustment -- -- -- -- 262 262
Net income -- -- -- 38,906 -- 38,906
- ---------------------------------------------------------------------------------------------------------------------
BALANCES, JUNE 30, 1995 29,436,579 $30 $ 64,926 $113,451 $ 303 $178,710
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
7
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
For the years ended June 30,
Increase (decrease) in cash and cash equivalents
(Amounts in thousands) 1993 1994 1995
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 17,282 $ 24,082 $ 38,906
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,610 7,901 11,617
Reduction of equipment value -- -- 18,046
Changes in assets and liabilities:
Accounts receivable (4,578) 1,227 (9,764)
Inventories, prepaid taxes and
other current assets (3,388) (7,758) (8,713)
Accounts payable 3,534 561 14,090
Income taxes payable 5,236 7,692 8,150
Deferred income taxes (186) 2,674 723
Deferred income on shipments to distributors 1,500 2,172 465
All other accrued liabilities 2,285 9,650 13,426
- ---------------------------------------------------------------------------------------------
Net cash provided by operating activities 26,295 48,201 86,946
- ---------------------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment (12,682) (21,848) (35,553)
Other non-current assets (726) (362) (5,224)
Short-term investments (10,310) 116 (16,932)
Acquisition -- (26,000) --
- ---------------------------------------------------------------------------------------------
Net cash used in investing activities (23,718) (48,094) (57,709)
- ---------------------------------------------------------------------------------------------
Cash flows from financing activities:
Issuance of common stock 4,837 6,361 9,766
Principal payments on capital lease obligations (1,034) (508) (134)
Repurchase of common stock (1,297) (6,493) (11,936)
- ---------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 2,506 (640) (2,304)
- ---------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 5,083 (533) 26,933
Cash and cash equivalents:
Beginning of year 23,483 28,566 28,033
- ---------------------------------------------------------------------------------------------
END OF YEAR $ 28,566 $ 28,033 $ 54,966
- ---------------------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
- ---------------------------------------------------------------------------------------------
Interest $ 135 $ 51 $ 24
Income taxes $ 6,180 $ 9,774 $ 25,680
Noncash transactions:
- ---------------------------------------------------------------------------------------------
Purchase of building in exchange for payable -- -- $ 5,550
- ---------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes.
8
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Basis of presentation:
The consolidated financial statements include the accounts of Maxim Integrated
Products, Inc. and all of its wholly owned subsidiaries. Intercompany accounts
and transactions have been eliminated. Accounts denominated in foreign
currencies have been translated using the local currency as the functional
currency.
Cash equivalents and short-term investments:
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments purchased with an original maturity of three months or
less to be cash equivalents. Short-term investments consist of U.S. Government
obligations and Municipal Bond obligations collateralized by U.S. Government
obligations with original maturities beyond three months and less than twelve
months.
On July 1, 1994, the Company adopted Statement of Financial Accounting Standard
No. 115 (FAS 115) "Accounting for Certain Investments in Debt and Equity
Securities." There was no cumulative effect of adopting FAS 115.
FAS 115 requires that all investment securities be classified into one of three
categories: held-to-maturity, available-for-sale, or trading. Management
determines the appropriate classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date. Debt
securities are classified as held-to-maturity when the Company has the positive
intent and ability to hold the securities to maturity.
At June 30, 1995, all debt securities, which consist of U.S. Treasury securities
and various municipal bond obligations collaterized by U.S. Treasury securities
all maturing within one year, are designated as held-to-maturity and carried at
amortized cost which approximates market value. The amortized cost of debt
securities in this category is adjusted for amortization of premiums and
accretion of discounts to maturity. Such amortization is included in investment
income. Realized gains and losses and declines in value judged to be
other-than-temporary on held-to-maturity securities are included in investment
income. The cost of securities sold is based on the specific identification
method. Interest on securities classified as held-to-maturity is included in
investment income.
The following is a summary of held-to-maturity securities at June 30, 1995:
<TABLE>
<CAPTION>
(Amounts in thousands) Cost
- --------------------------------------------------------------------------------
<S> <C>
U.S. Treasury securities $13,321
Municipal bonds collaterized by U.S. Treasury Securities 38,441
- --------------------------------------------------------------------------------
$51,762
- --------------------------------------------------------------------------------
Amounts included in short-term investments $37,329
Amounts included in cash and cash equivalents 14,433
- --------------------------------------------------------------------------------
$51,762
- --------------------------------------------------------------------------------
</TABLE>
Derivative Financial Instruments Held for Purposes Other Than Trading:
During fiscal 1995, the Company entered into forward exchange contracts to
hedge certain firm sales commitments denominated in foreign currencies and the
net monetary assets and liabilities of its foreign subsidiaries. The pur-
9
<PAGE> 10
pose of the Company's foreign currency hedging activities is to protect the
Company from the risk that the eventual dollar cash flows resulting from the
sale of products to international customers and its subsidiaries will be
adversely affected by changes in exchange rates.
At June 30, 1995, the first year in which the Company had entered into forward
exchange contracts, the Company had forward exchange contracts, all having
maturities of less than six months, to exchange various foreign currencies for
U.S. dollars in the amount of $12.5 million. Gains and losses related to these
contracts are included in the basis of the hedged asset or liability. The table
below summarizes, by currency, the contractual amounts of the Company's forward
exchange contracts at June 30, 1995.
<TABLE>
<CAPTION>
(Amounts in thousands) Forward Contracts Unrealized Gain/(Loss)
- --------------------------------------------------------------------------------
<S> <C> <C>
Currency:
Yen $ 8,900 $ (900)
Pound Sterling 1,700 --
Other 1,900 (200)
- --------------------------------------------------------------------------------
$12,500 $(1,100)
- --------------------------------------------------------------------------------
</TABLE>
Inventories:
Inventories are stated at the lower of standard cost (which approximates first
in, first out) or market. The components of inventories at June 30 were:
<TABLE>
<CAPTION>
(Amounts in thousands) 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Raw materials $ 1,293 $ 1,925
Work in process 8,236 9,444
Finished goods 8,801 7,736
- --------------------------------------------------------------------------------
$18,330 $19,105
- --------------------------------------------------------------------------------
</TABLE>
Property, plant and equipment:
Property, plant and equipment are stated at cost and depreciation is computed
on the straight line method over estimated useful lives of 1 to 40 years.
Leased machinery and equipment and leasehold improvements are amortized over
the lesser of their useful lives or the remaining term of the related lease.
Deferred income on shipments to distributors:
A portion of the Company's sales are made to domestic distributors under
agreements which provide for certain price rebates and limited product return
privileges. As a result, the Company defers recognition of such sales until the
merchandise is sold by the distributors.
Stock Dividend/Split:
On November 10, 1994, the Company's Board of Directors authorized a two-for-one
split of the Company's common stock effected in the form of a stock dividend,
which was paid on December 7, 1994, to stockholders of record as of November
23, 1994. The stated par value of each share remained $0.001. A total of
$14,000 was reclassified from the Company's additional paid-in capital account
to the Company's common stock account. All shares and per share amounts have
been retroactively restated to reflect the stock split.
10
<PAGE> 11
Income taxes:
Effective July 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("FAS 109"). The cumulative
effect of the adoption of FAS 109 was not material. As permitted under FAS 109,
the Company has elected not to restate the financial statements of any prior
years.
Income per share:
Income per share is based upon the weighted number of common and common
equivalent shares (stock options and stock warrants) outstanding during the
period.
Concentration of credit risk:
Due to the Company's credit evaluation and collection process, bad debt
expenses have been insignificant. Credit risk with respect to trade receivables
is limited because a large number of geographically diverse customers make up
the Company's customer base, thus spreading the credit risk. In fiscal 1995 and
1994, no customer accounted for greater than 10% of net revenues. In addition,
a significant portion of the Company's sales is made through distributors.
Payments from domestic distributors are generally received in a relatively
short time because of discount terms.
The Company places its investments with government entities and high credit
quality financial institutions and limits the amount of credit exposure to any
one financial institution.
11
<PAGE> 12
2. Acquisition:
On May 27, 1994, the Company acquired substantially all of the assets of the
Tektronix Integrated Circuits Operation in exchange for $26,000,000 cash and
warrants to purchase 300,000 shares of the Company's common stock at $30 per
share (valued at $2,000,000). These warrants remain outstanding at June 30,
1995. The acquisition was accounted for as a purchase and the results of
operations for the one-month period ending June 30, 1994, are included in the
consolidated statement of income. The following summarizes the fair value of
assets acquired and liabilities assumed in this transaction:
<TABLE>
<CAPTION>
(Amounts in thousands)
- --------------------------------------------------------------------------------
<S> <C>
Inventories $ 2,341
Property, plant and equipment 28,582
- --------------------------------------------------------------------------------
Total assets 30,923
Other accrued liabilities (2,923)
- --------------------------------------------------------------------------------
Net assets $28,000
- --------------------------------------------------------------------------------
</TABLE>
The following unaudited pro forma summary presents the consolidated results of
operations as if the acquisition had occurred at the beginning of fiscal 1993,
after giving effect to the terms and conditions of the transaction and certain
other adjustments to account for differences in depreciation expense, interest
expense and corporate allocations.
Fiscal year ending June 30,
<TABLE>
<CAPTION>
(Amounts in thousands) 1993 1994
- --------------------------------------------------------------------------------------------------
Pro forma Pro forma Pro forma Pro forma
Maxim Acquisition Consolidated Maxim Acquisition Consolidated
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues $110,184 $ 30,123 $140,307 $153,932 $ 28,700 $182,632
- --------------------------------------------------------------------------------------------------
Net Income $ 17,282 $ 4,640 $ 21,922 $ 24,082 $ 4,023 $ 28,105
- --------------------------------------------------------------------------------------------------
Income per share $ 0.58 $ 0.15 $ 0.73 $ 0.76 $ 0.13 $ 0.89
- --------------------------------------------------------------------------------------------------
</TABLE>
These pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of what would have occurred had the acquisition
been made as of those dates or of results which may occur in the future. These
acquisition-related revenues consisted primarily of intercompany sales to
internal Tektronix Divisions based on intercompany transfer prices.
During fiscal 1995, the Company finalized the valuation of certain assets
purchased and liabilities assumed in connection with this acquisition and
recorded certain balance sheet reclassifications, including a reduction of
fixed assets of $1,658,000.
12
<PAGE> 13
3. Property, Plant and Equipment and Other Assets:
Property, plant and equipment at June 30 consists of:
<TABLE>
<CAPTION>
(Amounts in thousands) 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Buildings $ 16,414 $ 20,364
Building improvements 15,643 13,581
Machinery and equipment 57,366 88,988
Leased machinery and equipment 1,345 591
- --------------------------------------------------------------------------------
90,768 123,524
- --------------------------------------------------------------------------------
Less accumulated depreciation
and amortization (19,657) (43,784)
Land 6,585 8,185
- --------------------------------------------------------------------------------
$ 77,696 $ 87,925
- --------------------------------------------------------------------------------
</TABLE>
At June 30, 1994 and 1995, accumulated depreciation relating to assets recorded
under capitalized leases was $1,214,000 and $546,000, respectively.
In fiscal 1995, the Company recorded a $18,046,000 write-down of fixed assets
relating to the Company's program to modernize its equipment and manufacturing
facilities. The write-down relates to a cumulative adjustment for depreciation
as a result of changing estimates of useful lives associated with equipment
that management estimates will be replaced or substantially upgraded over the
next three years.
In 1995, other assets primarily consist of deferred taxes of $4,450,000. In
1994, other assets primarily consisted of purchased technology rights and
goodwill associated with the acquisition of Maxim GmbH of approximately
$780,000 which was fully amortized in fiscal 1995.
4. Commitments and Contingencies:
The Company is subject to legal proceedings and claims that arise in the normal
course of its business. In the opinion of Management, these proceedings will
not have a material adverse effect on the financial position or results of
operations of the Company.
The Company leases certain facilities, including a wafer fabrication facility
for which the lease expires in November 2003. Under that lease, the Company has
a five year lease extension option and is responsible for maintenance, taxes,
and insurance on the facility.
Future annual minimum lease payments for all leased facilities are as follows:
<TABLE>
<CAPTION>
Fiscal Year ending (Amounts in thousands)
- --------------------------------------------------------------------------------
<S> <C>
1996 $1,110
1997 953
1998 792
1999 564
2000 - 2009 2,738
- --------------------------------------------------------------------------------
$6,157
- --------------------------------------------------------------------------------
</TABLE>
Rent expense was $774,000, $725,000 and $943,000 in fiscal 1993, 1994 and 1995,
respectively.
13
<PAGE> 14
5. Stockholders' Equity:
Stock option and purchase plans:
As of June 30, 1995, the Company has reserved a total of 11,706,693 of its
common shares for issuance to employees and certain others under its Incentive
Stock Option Plan, Supplemental Plan, Employee Stock Participation Plan and
Nonemployee Stock Option Plan, and has reserved a total of 195,000 of its
common shares under the 1988 Nonemployee Director Stock Option Plan. Under the
Incentive Stock Option Plan and the Nonemployee Stock Option Plan, options are
granted at a price not less than fair market value as determined by the Board
at the date of grant. Under the Supplemental Plan, options are granted
ordinarily at a price not less than market value, but under the Plan, the Board
has authority to make grants at a price not less than 85% of fair market value.
Under the Participation Plan, employees of the Company may purchase shares of
common stock at a price not less than the lesser of 85% of the fair market
value of the stock either on the date the purchase right is granted or the date
the right is exercised. Options granted under the Incentive Stock Option and
Supplemental Plans expire from five to ten years from the date of the grant or
such shorter term as may be provided in the agreement. During fiscal 1995, the
Company received $11,520,000 of tax benefit on the exercise of non-qualified
stock options and on disqualifying dispositions under stock plans ($6,175,000
in 1994 and $4,814,000 in 1993).
Information with respect to activity under the stock option plans is set forth
below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Outstanding Options
Shares -----------------------------------------------------
Available Number of Price Aggregate
for Grant Shares Per Share Price
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE, JUNE 30, 1992 219,582 7,894,372 $ 0.75 to $13.82 $ 43,180,908
Shares reserved 2,000,000 -- -- --
Options granted (2,296,216) 2,296,216 $12.52 to $16.13 29,974,684
Options terminated 343,554 (343,554) $ 0.75 to $13.69 (2,938,844)
Options exercised -- (1,295,938) $ 0.75 to $13.69 (4,836,997)
- --------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1993 266,920 8,551,096 $ 0.75 to $16.13 65,379,751
Shares reserved 3,158,000 -- -- --
Options granted (3,344,148) 3,344,148 $17.82 to $26.50 71,923,793
Options terminated 311,948 (311,948) $ 0.75 to $25.75 (3,486,545)
Options exercised -- (1,119,698) $ 0.75 to $20.88 (6,341,825)
- --------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1994 392,720 10,463,598 $ 0.75 to $26.50 127,475,174
Shares reserved 2,197,000 -- -- --
Options granted (2,559,915) 2,559,915 $20.72 to $46.75 77,630,810
Options terminated 220,631 (220,631) $ 0.75 to $45.75 (4,633,737)
Options exercised -- (1,151,625) $ 0.75 to $31.38 (9,766,282)
- --------------------------------------------------------------------------------------------
BALANCE, JUNE 30, 1995 250,436 11,651,257 $ 0.75 TO $46.75 $190,705,965
- --------------------------------------------------------------------------------------------
</TABLE>
At June 30, 1995, options to purchase 3,725,783 shares of common stock were
exercisable (2,911,594 at June 30, 1994).
14
<PAGE> 15
6. Income Taxes:
The provision for income taxes consists of the following:
Year ending June 30,
<TABLE>
<CAPTION>
(Amounts in thousands) 1993 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal
Current $ 9,322 $15,065 $ 28,006
Deferred (2,415) (3,712) (11,406)
State
Current 2,100 2,287 5,473
Deferred -- (620) (2,018)
Foreign
Current 299 526 894
- --------------------------------------------------------------------------------
Total $ 9,306 $13,546 $ 20,949
- --------------------------------------------------------------------------------
</TABLE>
The provision for income taxes differs from the amount computed by applying the
statutory rate as follows:
<TABLE>
<CAPTION>
Year ending June 30 1993 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory rate 34.0% 35.0% 35.0%
State tax, net of
federal benefit 5.2 2.9 3.8
General business credits -- (2.3) (1.9)
Exempt earnings of Foreign
Sales Corporation (2.9) (3.1) (2.2)
Other (1.3) 3.5 0.3
- --------------------------------------------------------------------------------
Total 35.0% 36.0% 35.0%
- --------------------------------------------------------------------------------
</TABLE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The components of the
Company's deferred tax assets and liabilities as of June 30, 1994 and 1995 are
as follows:
<TABLE>
<CAPTION>
(Amounts in thousands) 1994 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Inventory valuation and reserve $ 4,138 $ 4,170
Accrued compensation 1,950 2,736
Other reserves and accruals not
currently deductible for tax reporting 6,257 14,593
Cumulative depreciation adjustment -- 4,450
- --------------------------------------------------------------------------------
Total assets $12,345 $25,949
- --------------------------------------------------------------------------------
Deferred tax liabilities-depreciation $ 4,856 $ 5,579
- --------------------------------------------------------------------------------
</TABLE>
Under FAS 96, the deferred tax components of the provision for income taxes are
as follows:
<TABLE>
<CAPTION>
Year ending June 30, (Amounts in thousands) 1993
- --------------------------------------------------------------------------------
<S> <C>
Inventory valuation and
reserves $ (1,301)
Depreciation 2
State franchise taxes (499)
Other (617)
- --------------------------------------------------------------------------------
Total $ (2,415)
- --------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 16
On the balance sheet, deferred tax assets of $21,499,000 and $4,450,000 are
included in prepaid and other current assets, and other assets, respectively,
at June 30, 1995. ($12,345,000 and $0 at June 30, 1994.)
7. Segment Information:
The Company designs, develops, manufactures and markets a broad range of linear
and mixed-signal integrated circuits for the analog market and its business
falls into one industry segment. Operations of the Company's overseas
subsidiaries consist primarily of sales, marketing and distribution.
Approximately 49% of the Company's net revenues (including both U.S. export
sales and direct sales from subsidiaries, noted below) were derived from
customers outside of the U.S., primarily in Europe and the Pacific Rim (52% in
fiscal 1994 and 51% in fiscal 1993). Pacific Rim consists primarily of Japan.
Intercompany transfers between geographic areas are accounted for at prices
that approximate arm's length transactions.
Information regarding geographic areas at and for the years then ended is as
follows:
<TABLE>
<CAPTION>
June 30, 1993 Geographic Area
-------------------------------------
(Amounts in thousands) : United States Europe Pacific Rim Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues from unaffiliated customers $100,357 $7,838 $1,989 $110,184
- ------------------------------------------------------------------------------------------
Operating income $ 25,255 $ (247) $ 440 $ 25,448
- ------------------------------------------------------------------------------------------
Identifiable assets $116,539 $8,931 $1,432 $126,902
- ------------------------------------------------------------------------------------------
Liabilities $ 27,912 $1,162 $ 492 $ 29,566
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
June 30, 1994 Geographic Area
-------------------------------------
(Amounts in thousands) : United States Europe Pacific Rim Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues from unaffiliated customers $135,336 $16,249 $2,347 $153,932
- ------------------------------------------------------------------------------------------
Operating income $ 34,477 $ 746 $ 351 $ 35,574
- ------------------------------------------------------------------------------------------
Identifiable assets $160,254 $16,800 $1,469 $178,523
- ------------------------------------------------------------------------------------------
Liabilities $ 46,323 $ 1,665 $ 343 $ 48,331
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
June 30, 1995 Geographic Area
-------------------------------------
(Amounts in thousands) : United States Europe Pacific Rim Total
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues from unaffiliated customers $209,490 $33,620 $7,710 $250,820
- ------------------------------------------------------------------------------------------
Operating income $ 56,096 $ (255) $1,393 $ 57,234
- ------------------------------------------------------------------------------------------
Identifiable assets $234,581 $17,405 $4,147 $256,133
- ------------------------------------------------------------------------------------------
Liabilities $ 75,604 $ 1,285 $ 534 $ 77,423
- ------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 17
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Maxim Integrated Products, Inc.
We have audited the accompanying consolidated balance sheets of Maxim
Integrated Products, Inc. as of June 30, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the three years in the period ended June 30, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Maxim Integrated
Products, Inc. at June 30, 1995 and 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
June 30, 1995, in conformity with generally accepted accounting principles.
/s/ Ernst and Young LLP
August 4, 1995
San Jose, California
17
<PAGE> 18
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
(Amounts in thousands, except per share data)
- ----------------------------------------------------------------------------------
Fiscal Year 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net revenues $73,806 $86,954 $110,184 $153,932 $250,820
- ----------------------------------------------------------------------------------
Cost of goods sold $35,144 $37,835 $ 46,841 $ 64,250 $103,598
Gross margin % 52.4% 56.5% 57.5% 58.3% 58.7%
- ----------------------------------------------------------------------------------
Operating income $15,985 $20,466 $ 25,448 $ 35,574 $ 57,234
% of net revenues 21.7% 23.5% 23.1% 23.1% 22.8%
- ----------------------------------------------------------------------------------
Net income $10,138 $13,673 $ 17,282 $ 24,082 $ 38,906
Income per share $ 0.37 $ 0.47 $ 0.58 $ 0.76 $ 1.17
- ----------------------------------------------------------------------------------
Shares used in per share
calculation 27,270 29,079 30,025 31,814 33,251
- ----------------------------------------------------------------------------------
Cash, cash equivalents
and short-term investments $14,875 $33,686 $ 49,079 $ 48,430 $ 92,295
Working capital $26,263 $47,680 $ 64,047 $ 56,045 $ 95,978
Total assets $71,840 $95,546 $126,902 $178,523 $256,133
- ----------------------------------------------------------------------------------
Long-term debt, less
current portion $ 2,745 $ 683 $ 174 $ 40 $ 0
Stockholders' equity $51,234 $72,277 $ 97,336 $130,192 $178,710
- ----------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
FINANCIAL HIGHLIGHTS BY QUARTER
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Unaudited
(Amounts in thousands, except per share data)
- --------------------------------------------------------------------------------
QUARTER ENDED
1995 9/30/94 12/31/94 3/31/95 6/30/95
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues $52,004 $56,184 $66,628 $76,004
- --------------------------------------------------------------------------------
Cost of goods sold $21,633 $23,316 $27,651 $30,998
Gross margin % 58.4% 58.5% 58.5% 59.2%
- --------------------------------------------------------------------------------
Operating income $12,337 $13,186 $14,890 $16,821
% of net revenues 23.7% 23.5% 22.3% 22.1%
- --------------------------------------------------------------------------------
Net income $ 8,304 $ 8,930 $10,124 $11,548
Income per share $ 0.26 $ 0.27 $ 0.30 $ 0.34
- --------------------------------------------------------------------------------
Shares used in per share
calculation 32,545 33,058 33,351 34,151
- --------------------------------------------------------------------------------
Market price range - High $ 31.63 $ 35.00 $ 39.13 $ 53.00
- Low $ 24.13 $ 28.19 $ 29.00 $ 34.38
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
QUARTER ENDED
1994 9/30/93 12/31/93 3/31/94 6/30/94
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net revenues $33,094 $36,143 $40,572 $44,123
- --------------------------------------------------------------------------------
Cost of goods sold $14,030 $14,977 $16,885 $18,358
Gross margin % 57.6% 58.6% 58.4% 58.4%
- --------------------------------------------------------------------------------
Operating income $ 7,617 $ 8,302 $ 9,474 $10,181
% of net revenues 23.0% 23.0% 23.4% 23.1%
- --------------------------------------------------------------------------------
Net income $ 5,303 $ 5,686 $ 6,318 $ 6,775
Income per share $ 0.17 $ 0.18 $ 0.20 $ 0.21
- --------------------------------------------------------------------------------
Shares used in per share
calculation 31,201 31,616 32,154 32,284
- --------------------------------------------------------------------------------
Market price range - High $ 22.75 $ 24.38 $ 27.81 $ 27.88
- Low $ 16.25 $ 19.00 $ 23.13 $ 22.25
- --------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 20
CORPORATE DATA STOCKHOLDER INFORMATION
CORPORATE COUNSEL
Cooley Godward Castro Huddleson & Tatum
Palo Alto, California
INDEPENDENT AUDITORS
Ernst & Young LLP
San Jose, California
REGISTRAR/TRANSFER AGENT
First National Bank of Boston
Boston, Massachusetts
CORPORATE HEADQUARTERS
120 San Gabriel Drive
Sunnyvale, California 94086
(408) 737-7600
FORM 10-K
A copy of the Company's Form 10-K filed with the Securities & Exchange
Commission, without exhibits, is available without charge upon writing to:
Stockholder Relations
Maxim Integrated Products, Inc.
120 San Gabriel Drive
Sunnyvale, California 94086
STOCK LISTING
At June 30, 1995, there were approximately 631 stockholders of record of the
Company's common stock. Maxim common stock is traded on the NASDAQ National
Market under the symbol MXIM. The Company has never paid cash dividends on its
common stock and has no present plans to do so.
ANNUAL MEETING
The annual meeting of stockholders will be Thursday, November 16, 1995 at 11:00
a.m. at the Company's headquarters, 120 San Gabriel Drive, Sunnyvale,
California 94086.
20
<PAGE> 1
Exhibit 21
EXHIBIT 21
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
Name of Subsidiary Jurisdiction of Incorporation
- ------------------ -----------------------------
<S> <C>
Maxim Integrated Products England
UK Limited
Maxim International Inc. Virgin Islands
Maxim GmbH Germany
Maxim SARL France
Maxim Japan Japan
These Subsidiaries are 100% owned by the Registrant.
Maxtek Components Corporation Oregon
This Subsidiary is 50% owned by the Registrant.
</TABLE>
27
<PAGE> 1
Exhibit 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Maxim Integrated Products, Inc. of our report dated August 4, 1995, included
in the 1995 Annual Report to Stockholders of Maxim Integrated Products, Inc.
Our audits also included the consolidated financial statement schedule of Maxim
Integrated Products, Inc. listed in Item 14(a). This schedule is the
responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, the consolidated financial
statement schedule referred to above, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos.33-57849, 33-72186, 33-54026, 33-44485, 33-37470,
33-37469, 33-34728 and 33-34519) pertaining to the 1983 Incentive Stock Option
Plan, the 1983 Supplemental Nonemployee Stock Option Plan, the 1987
Supplemental Stock Option Plan, the 1987 Employee Stock Participation Plan, and
the 1988 Nonemployee Director Stock Option Plan of our report dated August 4,
1995, with respect to the consolidated financial statements incorporated herein
by reference, and our report included in the preceding paragraph with respect
to the consolidated financial statement schedule included in this Annual Report
(Form 10-K) of Maxim Integrated Products, Inc.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
San Jose, California
September 22, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 92,295
<SECURITIES> 0
<RECEIVABLES> 28,859
<ALLOWANCES> (1,145)
<INVENTORY> 19,105
<CURRENT-ASSETS> 161,822
<PP&E> 131,709
<DEPRECIATION> (43,784)
<TOTAL-ASSETS> 256,133
<CURRENT-LIABILITIES> 65,844
<BONDS> 0
<COMMON> 64,956
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 256,133
<SALES> 0
<TOTAL-REVENUES> 250,820
<CGS> 0
<TOTAL-COSTS> 103,598
<OTHER-EXPENSES> 89,988
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25
<INCOME-PRETAX> 59,855
<INCOME-TAX> 20,949
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,906
<EPS-PRIMARY> 1.17
<EPS-DILUTED> 1.17
</TABLE>
