=============================================================================
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 December 31, 1993
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 January 31, 1994, the registrant had 16,603,542 shares of common
stock outstanding.
=============================================================================
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 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 10
Security Holders
Item 5. Other Information Not
applicable
Item 6. Exhibits and Reports on Form 8-K 13
PART I. - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CHIPS AND TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
DEC. 31, JUNE 30,
1993 1993
-------- --------
ASSETS (UNAUDITED)
Current Assets:
Cash and cash equivalents $ 17,136 $ 20,742
Short-term investments 2,000 8,436
Accounts receivable, net of allowances 11,975 10,287
for doubtful accounts of $1,505 and
$1,463
Finished goods inventory 7,044 5,244
Prepaid and other assets 4,775 5,401
--------- ----------
Total current assets 42,930 50,110
Property, plant and equipment, net 11,160 13,059
Other assets 1,890 1,637
--------- ---------
$ 55,980 $ 64,806
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,976 $ 6,889
Other accrued liabilities 8,174 8,337
Current portion of capitalized lease 1,984 3,410
obligations
Accrued commissions to manufacturers 1,474 2,218
representatives
Deferred gross profit 1,451 1,581
Accrued restructuring costs 4,001 13,775
--------- ---------
Total current liabilities 24,060 36,210
Subordinated debt 7,910 7,910
Long-term capitalized lease obligations, 367 1,009
less current portion
Noncurrent notes payable 939 -
--------- ---------
Total liabilities 33,276 45,129
--------- ---------
Stockholders' Equity:
Convertible preferred stock, $.01 par 1 1
value; 5,000,000 shares authorized;
123,000 shares issued and outstanding
Common stock $.01 par value, 100,000,000 165 160
shares authorized; 16,480,000 and
16,074,000 shares issued
Capital in excess of par value 57,276 55,329
Notes receivable from officers 0 (34)
Retained earnings (34,738) (35,779)
--------- ---------
Total stockholders' equity 22,704 19,677
--------- ---------
$ 55,980 $ 64,806
========= =========
See notes to Unaudited Condensed Consolidated Financial Statements
CHIPS AND TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1993 1992 1993 1992
---- ---- ---- ----
NET SALES $ 22,438 $ 28,415 $43,609 $54,733
Costs and expenses:
Cost of sales and other
manufacturing expenses 14,060 25,365 27,173 43,913
Research and development 3,349 5,876 6,607 13,881
Marketing and selling 2,914 5,774 6,031 11,822
General and administrative 1,324 3,245 2,995 7,081
Restructuring charge 0 17,038 0 17,038
-------- -------- ------- -------
Income (loss) from operations 791 (28,883) 803 (39,002)
Interest and other income, net 11 3,032 355 3,425
-------- -------- ------- -------
Income (loss) before taxes 802 (25,851) 1,158 (35,577)
Provision for income taxes (82) (32) (116) (32)
-------- -------- ------- -------
NET INCOME (LOSS) $ 720 $(25,883) $1,042 $(35,609)
======== ======== ======= =======
NET INCOME (LOSS) PER SHARE $ 0.04 $ (1.67) $ 0.06 $ (2.29)
Weighted average common shares
and dilutive share equivalents
outstanding 17,252 15,547 16,699 15,546
======== ======== ======= =======
See notes to Unaudited Condensed Consolidated Financial Statements
CHIPS AND TECHNOLOGIES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
SIX MONTHS ENDED
DECEMBER 31,
----------------
1993 1992
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 1,042 $ (35,609)
------- ---------
Adjustments to reconcile net income
(loss) to cash provided by operating
activities:
Depreciation and amortization 1,901 5,573
Provision for losses on accounts 451 1,060
receivable
Provision for losses on inventory 409 7,091
Compensation related to non-qualified - 97
stock options
Accrued interest for officer's loans (1) (12)
CHANGES IN OPERATING ASSETS AND
LIABILITIES NET OF EFFECTS FROM
PURCHASE OF SMS:
Accounts receivable (2,139) 1,639
Finished goods inventory (2,209) (1,023)
Other assets & liabilities (641) 15,836
Accrued restructuring costs (9,774) 14,983
------- ---------
Total adjustments (12,003) 45,244
------- ---------
NET CASH PROVIDED BY (USED FOR) (10,961) 9,635
OPERATING ACTIVITIES ------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,003) (750)
Disposition of fixed assets 1,064 -
Sale of short-term investment 6,436 -
------- ---------
NET CASH PROVIDED BY (USED FOR) BY 6,497 (750)
INVESTING ACTIVITIES ------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments for capital lease (2,068) (3,061)
obligations
Proceeds from issuance of stock 1,952 568
Note payable 939 -
Proceeds from issuance of subordinated - 10,280
debt
Repayment from officer's loans 35 7
------- ---------
NET CASH FROM (USED BY) FINANCING 858 7,794
ACTIVITIES ------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH (3,606) 16,679
EQUIVALENTS
Cash and cash equivalents at beginning 20,742 14,175
of period ------- ---------
CASH AND CASH EQUIVALENTS AT PERIOD-END $ 17,136 $ 30,854
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 220 $ 838
Income taxes 27 118
Additions to capital lease obligations - 338
See notes to Unaudited Condensed Consolidated Financial Statements
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated balance sheet as of December 31, 1993 and
related condensed consolidated statements of operations and condensed
consolidated statements of cash flows for the three and six month periods
ended December 31, 1993 and 1992 are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial statements have been included. Such adjustments consisted only of
normal recurring items. 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.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended December 31, 1993 ("Second Quarter
1994") declined 21% to $22.4 million, compared to net sales of $28.4 million
for the quarter ended December 31, 1992 ("Second Quarter 1993"). The decline
in sales was a result of lower unit volumes in the systems logic product line
and discontinued products.
Revenue from media/graphics products was 59% of Second Quarter 1994
gross sales compared to 44% of Second Quarter 1993. Vampire LCD controllers
continued to enjoy acceptance worldwide. Revenues from systems logic product
shipments totaled 24% of sales in Second Quarter 1994 compared to 28% in
Second Quarter 1993. We expect product revenues to decline by approximately
15-20% in Third Quarter 1994 from Second Quarter 1994 as we transition our
customers to next generation products, but expect revenues to rebound in
Fourth Quarter 1994.
The Company reduced its Second Quarter 1994 operating expenses by $7.3
million versus Second Quarter 1993, exclusive of Second Quarter 1993
restructuring charges, as a result of cost controls.
Gross margin was $8.4 million for Second Quarter 1994 compared to $3.1
million for Second Quarter 1993. The gross margin percentage increased to
37% from 11% in Second Quarter 1993. The improvement reflects lower
inventory provisions, a shift to higher margin media products and reduced
fixed operating costs. The Company has experienced and expects to continue
to experience price pressure with regard to both its new and mature product
lines. The Company's ability to retain higher margins and market share will
depend on its ability to introduce new products with unique features and
performance characteristics ahead of the competition and its success in
securing favorable product cost reductions from its subcontract
manufacturers.
Research and development ("R&D") expenses include circuit and system
software design costs, computer-aided-engineering system support, and non-
recurring engineering ("NRE") expenses paid to manufacturing subcontractors.
R&D expenses were reduced significantly to $3.3 million in Second Quarter
1994, compared to $5.9 million in Second Quarter 1993. The decrease was a
result of a cost reduction and restructuring program, with the major savings
being related to labor and depreciation.
The integrated circuits which comprise the Company's products are
currently manufactured in the United States by NEC Corporation, NCR
Corporation and National Semiconductor Corporation. International foundries
are Samsung Semiconductor, Inc., Taiwan Semiconductor Manufacturing Company
Ltd., Toshiba International Corp., Yamaha International Corporation, and NEC
Corporation. These sources of supply are subject to such risks as capacity
constraints, transportation delays and interruptions, and imposition of
tariffs. The overseas foundries are also subject to import and export
controls, currency exchange fluctuations and changes in governmental
policies. Moreover, no contractual commitments bind these subcontractors to
continue to manufacture the Company's products beyond the period of
outstanding purchase orders. There can be no assurance that the Company will
be able to obtain product in a timely manner. However, the Company believes
it has developed strong relationships with its suppliers due in part to the
high volume of business the Company's products represent and the leading edge
design methodologies employed. If any of these relationships were to
abruptly end or deteriorate, the Company's business could be adversely
affected. Additionally, the Company's policy is to obtain second sources of
supply for all high volume products within one year of the release of the
product to volume production.
Marketing and selling expenses include commissions paid to all of the
Company's internal and external sales representatives and costs associated
with product marketing and advertising. Marketing and selling expenses were
$2.9 million in Second Quarter 1994 compared to $5.8 million in Second
Quarter 1993. This decrease was primarily due to headcount reductions
resulting from cost control programs and lower sales commissions.
General and administrative ("G&A") expenses were reduced to $1.3 million
in Second Quarter 1994 compared to $3.2 million in Second Quarter 1993. G&A
expenses declined mainly as a result of lower costs related to outside
services, reduced provision for bad debt and headcount reduction.
For Second Quarter 1994, the Company had income from operations of $.8
million, compared to a loss from operations of $28.9 million for Second
Quarter 1993. Exclusive of inventory reserves of $5.0 million and
restructuring charges of $17.0 million, Second Quarter 1993 loss from
operations would have been $6.9 million. Net of these unusual charges, the
margin improvement was primarily attributable to lower operating costs
resulting from the Company's restructuring and cost control efforts.
The Company's future profitability depends on maintaining adequate sales
levels through the timely introduction of new products to the market in
volume production, achievement of targeted product cost and performance
levels, demonstrated compatibility with industry standards, and development
of manufacturing, marketing and support capabilities. If the Company is not
successful in bringing new products to market in a timely manner and if such
products do not receive widespread market acceptance, the Company's financial
results would be adversely affected.
The Company recorded a 10% tax provision in the first half of fiscal
1994 for certain alternative minimum tax and state tax obligations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its growth to date through cash generated from
public and private placements of equity and debt, operations, and, to a
lesser extent, lease financing of capital equipment. The Company's
subcontract manufacturing strategy enables the Company to use the majority of
its capital resources for continuing operations and product development.
Cash and short-term investments decreased by $10.0 million from June 30,
1993 principally due to payments necessary to settle certain lease
obligations in connection with the consolidation of facilities and other
actions taken under the previously announced restructuring plan.
Accounts receivable at December 31, 1993 were $12.0 million, an increase
of $1.7 million from balances at June 30, 1993 due to timing of payments and
the addition of the current portion of the note receivable from the sale of
certain discontinued products.
Inventories at December 31, 1993 were $7.0 million, compared to $5.2
million at June 30, 1993 due to the increased level of inventory needed to
satisfy customer demand in a timely manner.
Accrued restructuring costs at December 31, 1993 aggregate $4.0 million,
compared to $13.8 million at June 30, 1993. The $9.8 million decrease is
principally attributable to the settlement of certain building leases,
severance payments, and other payments made for the consolidation of
facilities. The Company believes the reserves are adequate to cover
remaining costs associated with the restructuring plan.
Total long-term debt at December 31, 1993 includes the long term portion
of the Company's $1 million note payable issued in partial settlement of long-
term lease obligations. The note calls for monthly payments of $9,000 with
the remaining unpaid principal balance due September 1996.
The Company has two secured line of credit agreements which allow it to
borrow up to $8 million at the banks' reference rates. These agreements will
expire in October 1994. No amounts were outstanding at December 31, 1993
under these lines of credit. The Company's lines of credit contain financial
covenants. The availability of such lines of credit in future quarters will
depend upon the Company's compliance with the covenants established by the
banks and the Company's ability to renew the lines of credits when they
expire. The Company also has $7,910,000 in debentures outstanding. The
debentures contain certain financial covenants. If the Company does not
comply with the covenants of the debentures, they could become due and
payable.
Based on the current level of working capital and available borrowing
capacity, the Company believes that its present capital resources are
sufficient to meet its needs for the current fiscal year.
In May 1993 the Financial Accounting Standards Board issued Financial
Accounting Standard No. 115 (FAS 115) Accounting for Certain Investments in
Debt and Equity Securities to be effective for fiscal years beginning after
December 15, 1993. Implementation of FAS 115 is not expected to have a
significant impact on the Company's financials.
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
SECURITY HOLDERS
The Annual Meeting of the Stockholders of
Chips and Technologies, Inc. was held on
November 10, 1993 in Milpitas, California.
Of the total of 16,235,052 shares
outstanding as of the record date,
14,412,110 shares were present or
represented by proxies at the meeting.
ELECTION OF CLASS III DIRECTOR
James F. Stafford was elected as Class III
Director. Mr. Stafford received
13,774,093 affirmative votes and 638,017
were withheld.
1988 STOCK OPTION PLAN FOR OUTSIDE
DIRECTORS
The stockholders voted to modify the
automatic grant feature of the 1988 Stock
Option Plan for Outside Directors.
Pursuant to the Amendment, each new
Outside Director would continue to receive
an initial grant of 20,000 shares, and
each current Outside Director will receive
an option to purchase 10,000 shares of
Common Stock on each anniversary of his or
her tenure, instead of the current
biannual grant of 10,000 shares. To
compensate directors for prior years in
which he or she did not receive an option
grant, the Amendment provides that each
current Outside Director would also
receive an option to purchase 10,000
shares for each of his odd year
Anniversary Dates subsequent to the later
of the effective date of the Outside
Directors Plan or such Outside Director's
appointment to the Board an prior to the
effective date of the Amendment. The
proposal received 12,357,982 affirmative
votes, 1,825,485 negative votes and
228,643 abstentions.
Item 4. The stockholders voted to increase the
number of shares for issuance under the
1988 Stock Option Plan for Outside
Directors by 150,000 shares. The proposal
received 12,947,747 affirmative votes,
1,272,785 negative votes and 191,578
abstentions.
The stockholders voted to amend the
Outside Director Plan to increase the term
of options pursuant to the Plan to ten
(10) years. The proposal received
12,282,227 affirmative votes, 1,941,001
negative votes and 188,882 abstentions.
APPOINTMENT OF CORPORATION'S INDEPENDENT
ACCOUNTANTS
The stockholders voted to ratify the
appointment of Price Waterhouse as the
Corporation's independent accountants for
the fiscal year ending June 30, 1994. The
proposal received 14,245,618 affirmative
votes, 57,911 negative votes and 108,581
abstentions.
Item 5. Other Information Not
applicable
Item 6. Exhibits and Reports on Form 8-K 13
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: February 11, 1994
INDEX TO EXHIBITS
Exhibit
No. Description Page
- ------- ----------- ----
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).
Exhibit
No. Description Page
- ------- ----------- ----
10.10 First Amended of Chips and Technologies, Inc. 1988 15
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.)
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)
Exhibit
No. Description Page
- ------- ----------- ----
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)
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 20
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 27
November 14, 1993.
10.29 Amendment to Loan Agreement between the Company and 28
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.)