__________________________________________________________________________
__________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________
FORM 10-Q
(Mark One)
| X | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarter period ended March 31, 1994
OR
|__| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to ____________________
Commission file number 0-15012
CHIPS AND TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 77-0047943
(State or other jurisdiction of (I.R.S. Employee
incorporation or organization) Identification No.)
2950 Zanker Road, San Jose, California 95134
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (408)434-0600
_____________________________________________________________________________
Former name, former address and former fiscal year. If changed
since last report.
Indicate by check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------ -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
At March 31, 1994, the registrant had 16,765,956 shares of
common stock outstanding.
__________________________________________________________________________
__________________________________________________________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial 3
Statements
Notes to Unaudited Condensed Consolidated 6
Financial Statements
Item 2. Management's Discussion and Analysis of 7
Financial Condition and Results of
Operations
PART OTHER INFORMATION
II.
Item 1. Legal Proceedings Not applicable
Item 2. Changes in Securities Not applicable
Item 3. Defaults upon Senior Securities Not applicable
Item 4. Submission of Matters to a Vote of Not applicable
Security Holders
Item 5. Other Information Not applicable
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
<PAGE>
PART I. - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CHIPS AND TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
MARCH 31, JUNE 30,
1994 1993
ASSETS --------- ---------
(UNAUDITED)
Current Assets:
Cash and cash equivalents $ 21,094 $ 20,742
Short-term investments 2,000 8,436
Accounts receivable, net of allowances for 8,968 10,287
doubtful accounts of $1,470 and $1,463
Inventory 6,980 5,244
Prepaid and other assets 3,478 5,401
-------- ---------
Total current assets 42,520 50,110
Property, plant and equipment, net 10,460 13,059
Other assets 1,553 1,637
-------- --------
$ 54,533 $ 64,806
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 5,203 $ 6,889
Other accrued liabilities 8,194 8,337
Current portion of capitalized lease 1,010 3,410
obligations
Accrued commissions to manufacturers 1,851 2,218
representatives
Deferred gross profit 1,408 1,581
Accrued restructuring costs 3,467 13,775
------- --------
Total current liabilities 21,133 36,210
Subordinated debt 7,910 7,910
Long-term capitalized lease obligations, 191 1,009
less current portion
Noncurrent notes payable 929 -
------- -------
Total liabilities 30,163 45,129
------- -------
Stockholders' Equity:
Convertible preferred stock, $.01 par value; 1 1
5,000,000 shares authorized; 123,000 shares
issued and outstanding
Common stock $.01 par value, 100,000,000 shares 168 160
authorized; 16,766,000 and 16,074,000
shares issued
Capital in excess of par value 58,791 55,329
Notes receivable from officers 0 (34)
Retained deficit (34,590) (35,779)
-------- --------
Total stockholders' equity 24,370 19,677
-------- --------
$ 54,533 $ 64,806
======== ========
See notes to Unaudited Condensed Consolidated Financial Statements
<PAGE>
<PAGE>
CHIPS AND TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1994 1993 1994 1993
------------------- ------------------
NET REVENUE $ 14,442 $ 21,611 $58,051 $ 76,343
Costs and expenses:
Cost of sales and other
manufacturing expenses 9,269 15,117 36,442 59,029
Research and development 2,598 4,528 9,205 18,408
Marketing and selling 2,596 4,339 8,627 16,161
General and administrative 1,260 1,751 4,255 8,832
Restructuring charge (372) 0 (372) 17,038
-------- -------- ------- -------
Loss from operations (909) (4,124) (106) (43,125)
Interest and other income, net 1,072 58 1,427 3,482
------- -------- ------- -------
Income (loss) before taxes 163 (4,066) 1,321 (39,643)
Provision for income taxes (16) (27) (132) (59)
------- -------- ------- -------
NET INCOME (LOSS) $ 147 $ (4,093) $ 1,189 $(39,702)
====== ======== ====== =======
NET INCOME (LOSS) PER SHARE $ 0.01 $ (0.26) $ 0.07 $ (2.53)
======== ======== ======= ========
Weighted average common shares
and dilutive share equivalents
outstanding 17,492 15,667 16,721 15,667
====== ====== ====== ======
See notes to Unaudited Condensed Consolidated Financial Statements
<PAGE>
<PAGE> CHIPS AND TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
NINE MONTHS ENDED
MARCH 31,
-----------------
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES: ---- ----
Net Income (Loss) $ 1,189 $ (39,702)
Adjustments to reconcile net income (loss) ------ -------
to cash provided by operating activities:
Depreciation and amortization 2,721 6,914
Provision for losses on accounts receivable 676 1,060
Provision for losses on inventory 409 8,035
Compensation related to non-qualified stock options 0 117
Accrued interest for officers' loans (1) (17)
Gain (Loss) on sale of investment, net (939) 0
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Prepaid Income Taxes 0 28,261
Accounts receivable 643 6,439
Inventory (2,146) 450
Other assets & liabilities (1,530) (16,197)
Accrued restructuring costs (10,308) 13,490
------- -------
Total adjustments (10,475) 48,552
------- -------
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (9,286) 8,850
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,264) (916)
Disposition of fixed assets 1,236 599
Sale of short-term investment 6,436 -
Sale of stock investment 2,014 -
------- -------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 8,422 (317)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments for capital lease obligations (3,218) (4,236)
Proceeds from issuance of stock 3,470 572
Note payable 929 -
Proceeds from issuance of subordinated debt 0 10,280
Repayment from officer's loans 35 11
------- -------
NET CASH FROM FINANCING ACTIVITIES 1,216 6,627
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 352 15,160
Cash and cash equivalents at beginning of period 20,742 14,175
------- -------
CASH AND CASH EQUIVALENTS AT PERIOD-END $ 21,094 $ 29,335
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 296 $ 1,291
Income taxes 38 144
Additions to capital lease obligations 0 433
See notes to Unaudited Condensed Consolidated Financial Statements
<PAGE>
<PAGE>
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
- ------------------------------
The condensed consolidated balance sheet as of March 31,
1994 and related condensed consolidated statements of operations
for the three and nine month periods ended March 31, 1994 and
1993 and condensed consolidated statements of cash flows for the
nine months ended March 31, 1994 and 1993 are unaudited. In the
opinion of management, all adjustments necessary for a fair
presentation of such financial statements have been included.
Interim results are not necessarily indicative of results for a
full fiscal year.
The financial statements and notes are presented as
permitted by the Securities and Exchange Commission, and do not
contain all information included in the Company's annual
financial statements and notes, which should be read in
conjunction with this Form 10-Q.
NOTE 2. PRINCIPLES OF CONSOLIDATION
- ------------------------------------
The condensed consolidated financial statements include the
accounts of the Company and its subsidiaries. All material
intercompany accounts and transactions have been eliminated.
NOTE 3. NET INCOME (LOSS) PER SHARE
- ------------------------------------
Net income (loss) per share is computed using the weighted
average number of common shares and dilutive common share
equivalents outstanding.
NOTE 4. RESTRUCTURING CHARGE
- -----------------------------
In September 1993, the Company entered into an agreement to
sell the Company's system business, networking products, and
development of stand-alone multimedia products to a corporation,
Techfarm, Inc., the principals of which are a director and two
former officers of the Company. A provision for the
discontinuation of these operations was included in the Fiscal
1993 restructuring charge. Techfarm acquired these operations
from the Company for $1.7 million, comprising $100,000 in cash
and a two year note of $1.6 million. In addition, Techfarm
assumed up to $1 million of the liabilities associated with
termination of a joint venture operating the systems business.
In March 1994, the promissory note was restructured to provide
that the Techfarm subsidiaries operating the systems business are
the principals on the note, with Techfarm as guarantor and all
security remaining intact.
In March 1994, the Company received the first of four scheduled
semiannual note payments. The principal payment of $0.4 million
was recorded as a recovery of previous provisions made for
discontinued product lines in the Fiscal 1993 restructuring
charge. The balance of this note will be recorded in income as
cash collections are received.
NOTE 5. OTHER INCOME
- ---------------------
During fiscal years 1988, 1989 and 1990, the Company
invested in selected common and preferred stock equities. In the
third quarter fiscal 1994, the Company disposed of its common
stock investments and made provisions against the value of other
investments resulting in a net gain of $0.9 million.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET REVENUE
Net revenues for the third quarter fiscal 1994 were $14.4
million, a decrease of 33% from the $21.6 million reported for
the third quarter fiscal 1993. Net revenues for the first three
quarters of fiscal 1994 were $58.1 million, a decrease of 24%
from the $76.3 million reported for the same period of fiscal
1993. The decrease in net revenues for both the third quarter
fiscal 1994 and the first three quarters of fiscal 1994 was
largely due to decreases in sales of systems logic chipsets and
the previously announced discontinuation of certain products at
the beginning of fiscal year 1994. The revenue decline from
these products was partially offset by increases in sales of
graphics products.
Systems logic chipset revenue declined as a result of decreases
in unit volumes for the Company's older generation of products
which addressed the 386 processor architecture. The Company
discontinued certain system level products and de-emphasized its
participation in math co-processor products during the beginning
of FY1994, which further contributed to the revenue decline.
Graphics product revenues grew because of increases in unit
volumes of flat panel graphics controllers. Revenue from
graphics products comprised 58% of sales for the first three
quarters in fiscal 1994 compared to 31% of sales in the first
three quarters of fiscal 1993.
GROSS MARGIN
The gross margin percentage of 36% in the third quarter of fiscal
1994 improved compared to 30% for the third quarter fiscal 1993.
This improvement was due to a higher proportion of flat panel
graphics controllers and reductions in the proportion of lower
margin systems logic products. The gross margin was $5.2 million
in the third quarter fiscal 1994 compared to $6.5 million in the
third quarter fiscal 1993. The gross margin for the third
quarter fiscal 1994 decreased in absolute dollars compared to the
third quarter fiscal 1993 mainly due to lower overall revenues.
The gross margin percentage of 37% for the first three quarters
of fiscal 1994 improved compared to the 23% for the first three
quarters of fiscal 1993. Gross margin for the first three
quarters of fiscal 1994 was $21.6 million compared to $17.3
million for the first three quarters of fiscal 1993. The
increase in gross margin percentage and absolute gross margin
dollars reflects a greater proportion of flat panel graphics
controller sales as well as a reduction in inventory provisions
for excess and obsolete inventory.
RESEARCH & DEVELOPMENT
Research & development expenditures were $2.6 million for the
third quarter fiscal 1994, a decrease of $1.9 million from the
same period in fiscal 1993. The decrease in spending is
primarily due to the reductions realized from the Company's
discontinuation of certain product lines as part of its
restructuring efforts instituted in the beginning of fiscal 1994.
For the first three quarters of fiscal 1994, research and
development expenses were $9.2 million, a decrease of $9.2
million from the same period in fiscal 1993. Although research
and development spending during fiscal 1994 has been
significantly reduced from the same period in fiscal 1993, the
Company continues to invest in new product development and
expects these expenditures to increase in absolute amounts.
MARKETING & SELLING
Marketing and selling expenses for the first three quarters of
fiscal 1994 were $8.6 million, a decline of $7.6 million from the
same period in fiscal 1993. The decrease in expenses is due to
the closure of certain foreign sales offices and lower sales
commissions resulting from lower overall revenues. The Company's
marketing and selling expenses include sales commissions paid to
its internal sales force and to its authorized sales
representative and distributor organizations.
GENERAL & ADMINISTRATIVE
General and administrative expenses were $1.3 million in the
third quarter of fiscal 1994, a decrease of $0.5 million from the
third quarter of fiscal 1993. General and administrative
expenses for the first three quarters of fiscal 1994 were $4.3
million, a decrease of $4.5 million from the same period in
fiscal 1993. The reductions in fiscal 1994 compared to fiscal
1993 are largely due to reductions in headcount and outside
service fees.
RESTRUCTURING CHARGES
During the third quarter of fiscal 1994, the Company received the
first of four scheduled semiannual principal payments of $0.4
million against a note receivable recorded in respect of the sale
of the Company's discontinued product lines consisting of its
systems business, networking products and portions of its
multimedia product technology. The carrying value of these
discontinued product lines was reserved for as part of the
restructuring charges recorded in Fiscal 1993. Income will be
recorded, as the note is realized through future cash
collections. The Company maintains no influence or control over
the operations of the divested businesses and technologies and no
assurances can be made that future payments will be received in
respect of the note receivable.
INTEREST & OTHER INCOME, NET
During fiscal years 1988, 1989 & 1990 the Company invested in
selected common and preferred stock equities. In the third
quarter fiscal 1994, the Company sold its common stock
investments and made provisions against the value of other
investments, resulting in a net gain of approximately $0.9
million. The Company anticipates no material effects on its
future operations from activity related to its equity
investments.
INCOME TAXES
For the third quarter fiscal 1994 and the first three quarters of
fiscal 1994, a tax provision of 10% was recorded for certain
alternative minimum tax and state tax obligations.
LIQUIDITY AND CAPITAL RESOURCES
During the first three quarters of fiscal 1994, $6.1 million of
cash, cash equivalents and short-term investments were used in
the operating, financing and investing activities of the Company,
compared to the generation of $15.2 million over the same period
in fiscal 1993. The usage of cash is largely the result of cash
needed to implement the restructuring programs instituted in
early fiscal 1994, consisting primarily of payments made to
settle lease obligations and employee severance. These payments
were partially offset by the proceeds received from the sale of
certain common stock investments. The $15.2 million of cash
generated in fiscal 1993 was mainly due to the receipt of a
federal tax refund of $28.3 million.
Cash, cash equivalents and short term investments decreased from
$29.2 million at June 30, 1993, to $23.1 million at March 31,
1994. During the same period accounts receivable decreased $1.3
million, inventory increased $1.8 million and current liabilities
decreased $15.1 million. Accounts receivable decreased because
of improvements in receivable collections resulting in a decrease
in receivable days outstanding. Increases in inventory are due to
higher levels of inventory maintained for flat panel graphics
controller products. The reduction in current liabilities is
largely due to the decrease in accrued restructuring costs, which
reflects payments made in respect of the Company's restructuring
activities. The Company believes the restructuring accruals are
adequate to cover remaining actions associated with the
restructuring plan.
Total long-term debt at March 31, 1994, includes the long term
portion of the Company's $1.0 million note payable issued in
partial settlement of long-term lease obligations associated with
the Company's restructuring plan. The note calls for monthly
payments of $9,000 with the remaining unpaid principal balance
due September 1996.
The Company's capital requirements primarily consist of financing
working capital items and funding operational activities. The
Company has line of credit agreements allowing borrowing up to
$8.0 million at the bank reference rates. These agreements will
both expire on October 1994. There were no amounts outstanding
at March 31, 1994, under these lines of credit.
The existing line of credit agreements require that the Company
meet certain covenants related to financial performance and
condition. Maintaining the existing lines of credit as well as
any future renewal or replacement of these agreements will depend
on the Company's ability to comply with the financial covenants
required by the lender. Although the Company anticipates no
difficulty maintaining and renewing its available borrowing
capacity, no assurances can be made that the Company will in the
future be able to meet the necessary requirements or be able to
comply with the financial covenants required by a lender.
FUTURE OPERATING RESULTS
The future operating results of the Company are affected by its
ability, among other things, to develop and introduce innovative
products in a timely manner, obtain customer acceptance for its
products, procure a supply of product in sufficient quantities
and obtain competitive product costs. Other factors, some of
which are outside the control of the Company, can also affect
future operating results including, but not limited to, market
acceptance of the Company's end customers products, technological
shifts in the semiconductor and personal computer industries as
well as general worldwide economic conditions. Unfavorable
occurrences in any of the above mentioned areas could have a
materially adverse affect on the Company's future operating
results.
During the third quarter fiscal 1994, the Company experienced a
decline in revenues compared to second quarter fiscal 1994. The
Company believes this reduction occured as a result of customers
for the Company's flat panel graphics controllers reducing their
consumption of the current generation Vampire product line as
they depleted inventories in preparation of volume production
shipments of the Company's next generation Mustang product line
of flat panel graphics controllers. The Company anticipates an
increase in revenues for the fourth quarter fiscal 1994 compared
to the third quarter fiscal 1994 if customers successfully
transition to products in the Company's Mustang product family
and if anticipated increased shipments occur for its Wingine(R) DGX
desktop graphics accelerator product. Third quarter fiscal 1994
gross margin declined in both absolute dollars and percentage
compared to second quarter fiscal 1994 primarily due to lower
overall revenues. Although the company anticipates absolute
gross margin dollars increasing in the fourth quarter fiscal 1994
compared to the third quarter fiscal 1994, the gross margin
percentage is expected to decrease as the proportion of revenue
from lower margin desktop graphics accelerators increases and
competitive pricing pressure on flat panel graphics products
increases. Although the Company believes that it has obtained
customer acceptance for its products, there can be no assurance
made that customers will place orders and accept delivery of
these products at the anticipated prices or volumes. Since the
Company uses subcontract vendors for the manufacture of its
products, no assurance can be made that the Company's subcontract
vendors will be able to provide the required supply of product.
Any interruption or delay in the subcontract vendors' ability to
supply product would have a materially adverse impact on fourth
quarter fiscal 1994 revenues, gross margins and operating
results.
The Company's reliance on subcontract vendors for manufacture of
its products presents risks including the lack of guaranteed
production capacity, delays in delivery, reduced control over
production costs and restrictions on availability of certain
advanced process technologies. Because most of the Company's
production is met through subcontractors located throughout Asia,
the Company is subject to risks beyond its control related to
international trade policies, currency fluctuations and political
and economic changes in foreign governments. The Company
currently has no commitments that are binding on these
subcontractors beyond the period of outstanding purchase orders.
The Company attempts to mitigate the risks associated with its
subcontract vendors by maintaining favorable vendor relationships
and developing alternate sources of supply for high volume
products. However, there can be no assurances that the Company
will obtain sufficient timely supply of its products in the
future.
Because the Company uses subcontract vendors for the manufacture
of its products, the Company must place orders with its suppliers
far in advance of shipment to its end customers. The Company uses
projections of future end customer shipments to determine
inventory purchase requirements. Because the Company's products
address volatile markets, are subject to rapid technological
change and generally have short design and life cycles,
particularly for desktop graphics accelerator and systems logic
products, there is the risk that the Company will be incorrect in
its projections and produce excess or insufficient product
inventories. Future operating results could be adversely
affected if the Company is not able to anticipate its inventory
supply requirements and subsequently generates excess or
insufficient product inventories.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings Not applicable
Item 2. Changes in Securities Not applicable
Item 3. Defaults upon Senior Securities Not applicable
Item 4. Submission of Matters to a Vote of Not applicable
Security Holders
Item 5. Other Information Not applicable
Item 6. Exhibits 14
Reports on Form 8-K Not applicable
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
CHIPS AND TECHNOLOGIES, INC.
(Registrant)
/s/ James F. Stafford
---------------------------
James F. Stafford
President & Chief Executive
Officer
/s/ Timothy R. Christoffersen
--------------------------------
Timothy R. Christoffersen
Vice President of Finance
Chief Financial Officer and
Principal Accounting Officer
Date: May 6, 1994
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Description Page
No.
4.1 Stockholders' Rights Agreement dated August 23, 1989.
(Incorporated by reference to Exhibit 4.1 to the
Company's Annual Report on Form 10-K which was filed
September 20, 1989)
10.1 Amended and Restated 1985 Stock Option Plan, as
amended November 5, 1991 (Incorporated by reference to
Exhibit 10.1 to the Company's Annual Report on Form 10-K
which was filed September 24, 1992)
10.2 Form of Stock Option Agreement used in conjunction with
the 1985 Stock Option Plan (Incorporated by reference
to Exhibit 10.2 to the Company's Annual Report on
Form 10-K which was filed September 24, 1992)
10.3 Registration Rights Agreement dated October 10, 1985
and amendment thereto dated January 24, 1986.
(Incorporated by reference to Exhibit 10.6 to
Registration Statement No. 33-8005 effective October
8, 1986.)
10.4 Amended and Restated Employee Stock Purchase Plan, as
amended July 27,1992. (Incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on Form 10-K
which was filed September 27, 1993.)
10.5 Lease Termination Agreement and related exhibit
between the Company and The Equitable Life Assurance
Society dated September 10, 1993. (Incorporated by
reference to Exhibit 10.5 to the Company's Annual Report
on Form 10-K which was filed September 27, 1993.)
10.6 Master Equipment Lease and related Schedules between
Oliver Allen Corporation and the Company dated February 9,
1989. (Incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10-K which was filed
September 20, 1990).
10.7 Line of Credit Agreement between the Company and
Silicon Valley Bank dated December 19, 1991.
(Incorporated by reference to Exhibit 10.7 to the
Company's Annual Report on Form 10-K which was filed
September 21, 1992.)
10.8 Line of Credit Agreement between the Company and Bank of
America dated December 19, 1991. (Incorporated by reference
to Exhibit 10.8 to the Company's Annual Report on Form 10-K
which was filed September 21, 1992.)
10.9 Amended and Restated Qualified Investment Plan dated
January 1, 1989. (Incorporated by reference to Exhibit
10.16 to the Company's Annual Report on Form 10-K which was
filed September 20, 1990).
10.10 First Amended of Chips and Technologies, Inc. 1988
Nonqualified Stock Option Plan for Outside Directors dated
October 1, 1993
10.11 Promissory Note to the Company from Enzo Torresi dated
August 1, 1992. (Incorporated by reference to Exhibit
10.14 to the Company's Annual Report on Form 10-K which
was filed September 27, 1993.)
<PAGE>
<PAGE>
Exhibit Description Page
No.
10.12 Promissory Note to the Company from Marc Jones dated
February 3, 1993. (Incorporated by reference to Exhibit
10.15 to the Company's Annual Report on Form 10-K which
was filed September 27, 1993.)
10.13 Form of Indemnity Agreement between the Company and each
of its directors and executive officers. (Incorporated by
reference to Exhibit 10.27 to the Company's Annual Report
on Form 10-K which was filed September 20, 1990).
10.14 Form of Incentive Deferred Compensation Agreement
(Incorporated by reference to Exhibit 10.20 to the
Company's Annual Report on Form 10-K which was filed
September 20, 1989.)
10.15 Equipment term lease agreement and supplemental
schedules between the Company and IBM Credit Corporation
dated November 7, 1990 and December 19, 1990 (Incorporated
by reference to Exhibit 10.30 to the Company's Annual
Report on Form 10-K which was filed September 25, 1991.)
10.16 Confidential Termination Agreement and General Release
of Claims between the Company and Ravi Bhatnagar dated
December 18, 1992. (Incorporated by reference to
Exhibit 10.19 to the Company's Annual Report on Form 10-K
which was filed September 27, 1993)
10.17 Confidential Termination Agreement and General Release
of Claims between the Company and Nancy S. Dusseau,
dated September 1, 1993. (Incorporated by reference to
Exhibit 10.20 to the Company's Annual Report on Form 10-K
which was filed September 27, 1993)
10.18 Confidential Termination Agreement and General Release
of Claims between the Company and Jeffrey H. Grammer, dated
September 2, 1993. (Incorporated by reference to Exhibit
10.21 to the Company's Annual Report on Form 10-K which
was filed September 27, 1993)
10.19 Confidential Termination Agreement and General Release
of Claims between the Company and Gary P. Martin, dated
April 19, 1993. (Incorporated by reference to Exhibit
10.22 to the Company's Annual Report on Form 10-K which
was filed September 27, 1993)
10.20 Relocation Agreement between the Company and Lee J. Barker,
dated September 2, 1992. (Incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form 10-K
which was filed September 27, 1993)
10.21 Convertible Promissory Notes and Preferred Stock
Purchase Agreement, dated as of July 16, 1992.
(Incorporated by reference to Exhibit 10.24 to the
Company's Annual Report on Form 10-K which was filed
September 27, 1993)
10.22 Amendment to convertible Promissory Notes and
Preferred Stock Purchase Agreement (Incorporated by
reference to Exhibit 10.25 to the Company's Annual
Report on Form 10-K which was filed September 27, 1993)
10.23 Form of Convertible Subordinated Debenture, due June
30, 2002. (Incorporated by reference to Exhibit 10.26
to the Company's Annual Report on Form 10-K which was
filed September 27, 1993)
<PAGE>
<PAGE>
Exhibit Description Page
No.
10.24 Amendment to 8 1/2 % convertible Subordinated
Debentures, due June 30, 2002. (Incorporated by
reference to Exhibit 10.27 to the Company's Annual
Report on Form 10-K which was filed September 27, 1993)
10.25 Confidential Resignation and Consulting Agreement and
General Release of Claims between the Company and
Gordon A. Campbell dated September 30, 1993.
(Incorporated by reference to Exhibit 10.25 to the
Company's Quarterly Report on Form 10-Q which was
filed November 15, 1993).
10.26 Agreement for Sale and Purchase of Assets between
Techfarm, Inc. and Chips and Technologies, Inc., dated
September 24, 1993. (Incorporated by reference to
Exhibit 10.26 to the Company's Quarterly Report on Form
10Q which was filed November 15, 1993.)
10.27 Form of Nonqualified Stock Option Agreement for
Outside Directors used in conjunction with the 1988
Stock Option Plan for Outside Directors dated
November 10, 1993.
10.28 Promissory Note to the Company from Lee Barker dated
November 14, 1993.
10.29 Amendment to Loan Agreement between the Company and
Silicon Valley Bank dated September 13, 1993
10.30 Amendment to Line of Credit Agreement between the
Company and Bank of America dated September 1993.
(Incorporated by reference to Exhibit 10.8 to the
Company's Annual Report on Form 10K which was filed
September 27, 1993.)
