Document:

exv10w14

 

Exhibit 10.14

AMENDMENT NO. 1

TO

LOAN AND SECURITY AGREEMENT

     This Amendment No. 1 to Loan and Security Agreement (this “Amendment”) is entered
into this 13th day of December, 2004, by and between Cypress Semiconductor Corporation, a
Delaware corporation (“Borrower”), and Silicon Valley Bank (“Bank”). Capitalized terms
used herein without definition shall have the same meanings given them in the Loan Agreement (as
defined below).

Recitals

     A. Borrower and Bank have entered into that certain Loan and Security Agreement dated as of
September 25, 2003 (the “Loan Agreement”), pursuant to which Bank agreed to extend and make
available to Borrower certain advances of money.

     B. Borrower desires that Bank amend the Loan Agreement to, among other things, extend the
maturity of such indebtedness and increase the amount available for borrowing thereunder.

     C. Subject to the representations and warranties of Borrower herein and upon the terms and
conditions set forth in this Amendment, Bank is willing to amend the Loan Agreement.

Agreement

     NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound,
the parties hereto agree as follows:

     1. Amendments to Loan Agreement.

          1.1 Section 6.7 (Financial Covenants). Section 6.7(a) of the Loan Agreement is amended and
restated in its entirety as follows:

          Tangible Net Worth. A Tangible Net Worth of not less than Six Hundred Fifty Million Dollars
($650,000,000).

          1.2 Section 13 (Definitions). Section 13 of the Loan Agreement is amended in the following
manner:

               (a) The definitions for the following terms are amended and restated in their entirety as
follows:

               “Committed Revolving Line” is an Advance or Advances not to exceed a principal
amount outstanding at any time of $70,000,000.

               “Maturity Date” is December 13, 2006.

 

 

     2. Borrower’s Representations And Warranties. Borrower represents and warrants that:

               (a) immediately upon giving effect to this Amendment (i) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (ii) no Event of Default has occurred
and is continuing;

               (b) Borrower has the corporate power and authority to execute and deliver this Amendment and
to perform its obligations under the Loan Agreement, as amended by this Amendment;

               (c) the certificate of incorporation, bylaws and other organizational documents of Borrower
delivered to Bank on the Closing Date remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force and effect;

               (d) the execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, have been duly
authorized by all necessary corporate action on the part of Borrower; and

               (e) this Amendment has been duly executed and delivered by the Borrower and is the binding
obligation of Borrower, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.

     3. Limitation. The amendments and modifications set forth in this Amendment shall be
limited precisely as written and shall not be deemed (a) to be a waiver or modification of any
other term or condition of the Loan Agreement or of any other instrument or agreement referred to
therein or to prejudice any right or remedy which Bank may now have or may have in the future under
or in connection with the Loan Agreement or any instrument or agreement referred to therein; or (b)
to be a consent to any future amendment or modification or waiver to any instrument or agreement
the execution and delivery of which is consented to hereby, or to any waiver of any of the
provisions thereof. Except as expressly amended hereby, the Loan Agreement shall continue in full
force and effect.

     4. Effectiveness. This Amendment shall become effective upon the satisfaction of all
the following conditions precedent:

          4.1 Amendment. Borrower and Bank shall have duly executed and delivered this Amendment to
Bank and each Guarantor shall have duly executed and delivered a Reaffirmation in the form attached
hereto.

          4.2 Authorizing Resolutions. Bank shall have received a certified copy of resolutions of the
Board of Directors of Borrower authorizing the execution, delivery, and performance of this
Amendment and Loan Agreement, as amended.

 

 

          4.3 Payment of Loan Fee. Borrower shall have paid Bank a fully-earned, non-refundable loan
fee in the amount of $200,000.

          4.4 Payment of Bank Expenses. Borrower shall have paid all Bank Expenses (including all
reasonable attorneys’ fees and reasonable expenses) incurred through the date of this Amendment.

     5. Counterparts. This Amendment may be signed in any number of counterparts, and by
different parties hereto in separate counterparts, with the same effect as if the signatures to
each such counterpart were upon a single instrument. All counterparts shall be deemed an original
of this Amendment.

     6. Integration. This Amendment, the Loan Documents and any documents executed in
connection herewith or pursuant hereto contain the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior agreements, understandings, offers and
negotiations, oral or written, with respect thereto and no extrinsic evidence whatsoever may be
introduced in any judicial or arbitration proceeding, if any, involving this Amendment or the Loan
Documents; except that any financing statements or other agreements or instruments filed by Bank
with respect to Borrower shall remain in full force and effect.

     7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

[Signature page follows.]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first written above.

	 	 	 
	Borrower:

	 	Cypress Semiconductor Corporation
	

	 	a Delaware corporation
	 
	 	 
	

	 	By:/s/ Neil Weiss
	

	 	

	

	 	      Neil Weiss
	

	 	      Vice President and Treasurer
	 
	 	 
	Bank:

	 	Silicon Valley Bank
	 
	 	 
	

	 	By: /s/ Tom Smith
	

	 	

	

	 	Print: Tom Smith
	

	 	

	

	 	Title: Senior Relationship Manager
	

	 	

 

 

ACKNOWLEDGEMENT, CONSENT AND

REAFFIRMATION OF GUARANTOR

The undersigned (a “Guarantor”) executed an Unconditional Guaranty in favor of Silicon Valley
Bank (“Bank”) in respect of the Loan and Security Agreement, dated as of September 25, 2003
(as amended from time to time, the “Loan Agreement”), by and between Cypress Semiconductor
Corporation (“Borrower”) and Bank and hereby acknowledge that it has received a copy of, and
has read, that certain Amendment No. 1 to Loan and Security Agreement (“Amendment”) dated as of
December 13, 2004, between Borrower and Bank, which serves to amend the Loan Agreement. Guarantor
(i) consents to all amendments and modifications made by the Amendment, (ii) reconfirms and
ratifies the Unconditional Guaranty to which Guarantor is a party and (iii) agrees that such
Unconditional Guaranty shall remain in full force and effect with respect to the Loan Agreement as
amended by the Amendment and all obligations thereunder; and that the amendments and modifications
shall not act as a limitation on Guarantor’s liability under its Unconditional Guaranty.

Dated: December 13, 2004

	 	 	 
	Guarantor:

	 	Cypress Semiconductor (Minnesota), Inc.
	 
	 	 
	

	 	By:
	

	 	

	 
	 	 
	

	 	     Emmanuel T. Hernandez
	

	 	     Chief Financial Officer, Executive Vice President,
	

	 	     Finance and Administration

 

 

ACKNOWLEDGEMENT, CONSENT AND

REAFFIRMATION OF GUARANTOR

The undersigned (a “Guarantor”) executed an Unconditional Guaranty in favor of Silicon Valley
Bank (“Bank”) in respect of the Loan and Security Agreement, dated as of September 25, 2003
(as amended from time to time, the “Loan Agreement”), by and between Cypress Semiconductor
Corporation (“Borrower”) and Bank and hereby acknowledge that it has received a copy of, and
has read, that certain Amendment No. 1 to Loan and Security Agreement (“Amendment”) dated as of
December 13, 2004, between Borrower and Bank, which serves to amend the Loan Agreement. Guarantor
(i) consents to all amendments and modifications made by the Amendment, (ii) reconfirms and
ratifies the Unconditional Guaranty to which Guarantor is a party and (iii) agrees that such
Unconditional Guaranty shall remain in full force and effect with respect to the Loan Agreement as
amended by the Amendment and all obligations thereunder; and that the amendments and modifications
shall not act as a limitation on Guarantor’s liability under its Unconditional Guaranty.

Dated: December 13, 2004

	 	 	 
	Guarantor:

	 	Cypress Semiconductor (Texas), Inc.
	 
	 	 
	

	 	By:
	

	 	

	 
	 	 
	

	 	     Emmanuel T. Hernandez
	

	 	     Chief Financial Officer, Executive Vice President,
	

	 	      Finance and Administrationexv10w15

 

Exhibit 10.15

CYPRESS SEMICONDUCTOR CORPORATION

EMPLOYEE QUALIFIED STOCK PURCHASE PLAN

AMENDED AND RESTATED EFFECTIVE AS OF THE OFFERING PERIOD COMMENCING DECEMBER 31, 2004

     The following constitute the provisions of the Employee Stock Purchase Plan (herein
called the “Plan”) of Cypress Semiconductor Corporation (herein called the “Company”).

     1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an
“Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended.
The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation
in a manner consistent with the requirements of that section of the Code.

     2. Definitions.

	 	(a)  	“Act” shall mean the Securities Exchange Act of 1934, as
amended.
	 
	 	(b)  	“Board” shall mean the Board of Directors of the Company.
	 
	 	(c)  	“Code” shall mean the Internal Revenue Code of 1986, as
amended.
	 
	 	(d)  	“Common Stock” shall mean the Common Stock of the
Company.
	 
	 	(e)  	“Company” shall mean Cypress Semiconductor Corporation, a
Delaware corporation.
	 
	 	(f)  	“Compensation” shall mean all regular straight time
earnings, payments for overtime, shift premium, cash incentive compensation,
cash incentive payments, cash bonuses and commissions (except to the extent that
the exclusion of any such items for all participants is specifically directed by
the Board or its committee).
	 
	 	(g)  	“Continuous Status as an Employee” shall mean the absence
of any interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of a leave of
absence agreed to in writing by the Company, provided that such leave is for a
period of not more than 90 days or reemployment upon the expiration of such
leave is guaranteed by contract or statute.
	 
	 	(h)  	“Designated Subsidiaries” shall mean the Subsidiaries
which have been designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

 

 

	 	(i)  	“Employee” shall mean any person, including an officer,
who is customarily employed for at least twenty (20) hours per week and more
than five (5) months in a calendar year by the Company or one of its Designated
Subsidiaries.
	 
	 	(j)  	“Exercise Date” shall mean the first Trading Day on or
after December 31 and June 30 of each year.
	 
	 	(k)  	“Exercise Period” shall mean the approximately six (6)
month period commencing on one Exercise Date and ending with the next Exercise
Date, except that the first Exercise Period of any Offering Period shall
commence on the Offering Date and end with the next Exercise Date.
	 
	 	(l)  	“Offering Period” shall mean a period of approximately
eighteen (18) months during which an option granted pursuant to the Plan may be
exercised, commencing on the first Trading Day on or after December 31 and June
30 of each year and terminating on the Offering Period commencement date
approximately eighteen months later.
	 
	 	(m)  	“Offering Date” shall mean the first Trading Day of each
Offering Period of the Plan.
	 
	 	(n)  	“Plan” shall mean this Employee Qualified Stock Purchase
Plan.
	 
	 	(o)  	“Subsidiary” shall mean a corporation, domestic or
foreign, of which not less than 50% of the voting shares are held by the Company
or a Subsidiary, whether or not such corporation now exists or is hereafter
organized or acquired by the Company or a Subsidiary.
	 
	 	(p)  	“Trading Day” shall mean a day on which national stock
exchanges and the Nasdaq System are open for trading.

     3. Eligibility.

	 	(a)  	Any Employee as defined in paragraph 2 who is employed by the
Company as of an Offering Date shall be eligible to participate in the Plan,
subject to limitations imposed by Section 423(b) of the Code.
	 
	 	(b)  	Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase 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 subsidiary of the Company, or (ii) which permits his rights to
purchase stock under all employee stock purchase plans of the Company and its
subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand

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	 	   	Dollars ($25,000) of fair market value of such stock determined at the time
such option is granted) for each calendar year in which such option is
outstanding at any time.

     4. Offering Periods. The plan shall be implemented by eighteen (18) month Offering
Periods beginning approximately every six (6) months with a new Offering Period commencing on the
first Trading Day on or after December 31 and June 30 each year, or on such other date as the Board
shall determine. The Plan shall continue thereafter until terminated in accordance with paragraph
20 hereof. Subject to the requirements of paragraph 20, the Board of Directors of the Company
shall have the power to change the duration of Offering Periods with respect to future offerings
without stockholder approval if such change is announced at least fifteen (15) days prior to the
scheduled beginning of the first offering period to be affected.

     5. Participation.

	 	(a)  	An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deduction on the form
provided by the Company and filing it with the Company’s payroll office prior to
the applicable Offering Date, unless a later time for filing the subscription
agreement is set by the Board for all eligible Employees with respect to a given
offering.
	 
	 	(b)  	Payroll deductions for a participant shall commence on the first
payroll following the Offering Date and shall end on the Exercise Date of the
offering to which such authorization is applicable, unless sooner terminated by
the participant as provided in paragraph 11.

     6. Payroll Deductions.

	 	(a)  	At the time a participant files his subscription agreement, he
shall elect to have payroll deductions made on each payday during the Offering
Period in amounts from two (2%) to ten percent (10%) of his Compensation; or
such greater percentage of Compensation as the Board, in its sole discretion,
determines and communicates to eligible Employees prior to the commencement of
the first Offering Period affected thereby. The aggregate of such payroll
deductions during any Offering Period shall not exceed ten percent (10%) of his
aggregate Compensation (or such greater percentage of Compensation as is
determined by the Board pursuant to the preceding sentence) during said offering
period.
	 
	 	(b)  	All payroll deductions made by a participant shall be credited to
his account under the Plan. A participant may not make any additional payments
into such account.
	 
	 	(c)  	A participant may discontinue his participation in the Plan as
provided in paragraph 11, or may decrease or increase the rate or amount of his
payroll

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	 	   	deductions during the Offering Period (within the limitations of paragraph
6(a)) by completing and filing with the Company a new subscription agreement
authorizing a change in the rate or amount of payroll deductions; provided,
however, that a participant may not change the rate or amount of his payroll
deductions more than two (2) times in any one calendar year. The change in
rate shall be effective fifteen (15) days following the Company’s receipt of
the new authorization. Subject to the limitations of paragraph 6(a), a
participant’s subscription agreement shall remain in effect for successive
Offering Periods unless revised as provided herein or terminated as provided
in paragraph 11.
	 
	 	(d)  	Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant’s
payroll deductions may be decreased to 0% at such time during any Exercise
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Exercise
Period and any other Exercise Period ending within the same calendar year equal
$21,250. Payroll deductions shall recommence at the rate provided in such
participant’s subscription agreement at the beginning of the first Exercise
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in paragraph 11.

     7. Grant of Option.

	 	(a)  	On the Offering Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period a number of shares of
the Company’s Common Stock determined by dividing such Employee’s payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant’s account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company’s Common Stock
on the Offering Date or (ii) eighty-five percent (85%) of the fair market value
of a share of the Company’s Common Stock on the Exercise Date; provided,
however, that the maximum number of Shares an Employee may purchase during each
Offering Period shall be determined at the Offering Date by dividing $100,000 by
the fair market value of a share of the Company’s Common Stock on the Offering
Date, and provided further that such purchase shall be subject to the
limitations set forth in paragraphs 3(b) and 13 hereof. Exercise of the option
shall occur as provided in paragraph 8, unless the participant has withdrawn
pursuant to paragraph 11, and shall expire on the last day of the Offering
Period. Fair market value of a share of the Company’s Common Stock shall be
determined as provided in paragraph 7(b) herein.
	 
	 	(b)  	The option price per share of the shares offered in a given
Exercise Period shall be the lower of: (i) eighty-five percent (85%) of the fair
market value of a share of the Common Stock of the Company on the Offering Date;
or

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	 	(ii)  	eighty-five percent (85%) of the fair market value of a share of the
Common Stock of the Company on the Exercise Date. The fair market value of
the Company’s Common Stock on a given date shall be determined by the Board
in its discretion; provided, however, that where there is a public market for
the Common Stock, the fair market value per share shall be the closing price
of the Common Stock for such date on the New York Stock Exchange or on such
other stock exchange as the Company’s Common Stock may be traded or, if not
traded on a stock exchange, as reported by the NASDAQ National Market System,
or, in the event the Common Stock is not listed on a stock exchange or
NASDAQ’s National Market System, the fair market value per share shall be the
mean of the bid and asked prices of the Common Stock reported for such date
in over-the-counter trading.

     8. Exercise of Option. Unless a participant withdraws from the Plan as provided in
paragraph 11, his option for the purchase of shares will be exercised automatically on each
Exercise Date of the Offering Period, and the maximum number of full shares subject to option shall
be purchased for such participant at the applicable option price with the accumulated payroll
deductions in his account. During a participant’s lifetime, a participant’s option to purchase
shares hereunder is exercisable only by him.

     9. Delivery. As promptly as practicable after the Exercise Date of each Exercise
Period, the Company shall arrange the delivery to each participant, as appropriate, of a
certificate representing the shares purchased upon exercise of his option or an electronic notice
reflecting the allocation of such shares to his brokerage account. Any cash remaining to the
credit of a participant’s account under the Plan after a purchase by him of shares at the
termination of each Exercise Period which is insufficient to purchase a full share of Common Stock
of the Company shall be applied to the participant’s account for the next Exercise Period. Any
other excess accumulated payroll deductions shall be returned to the participant.

     10. Automatic Transfer to Low Price Offering Period. In the event that the fair
market value of the Company’s Common Stock is lower on an Exercise Date than it was on the first
Offering Date for that Offering Period, all Employees participating in the Plan on the Exercise
Date shall be deemed to have withdrawn from the Offering Period immediately after the exercise of
their option on such Exercise Date and to have enrolled as participants in the newly commencing
Offering Period. A participant may elect to remain in the previous Offering Period by filing a
written statement declaring such election with the Company prior to the time of the automatic
change to the new Offering Period.

     11. Withdrawal; Termination of Employment.

	 	(a)  	A participant may withdraw all but not less than all the payroll
deductions credited to his account and not yet used to exercise his option under
the Plan at any time by giving written notice to the Company. All of the
participant’s payroll deductions credited to his account will be paid to such
participant promptly after receipt of notice of withdrawal and such
participant’s option for the Offering Period will be automatically terminated,
and no further payroll

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	 	   	deductions for the purchase of shares will be made during the Offering
Period. If a participant withdraws from an Offering Period, payroll
deductions will not resume at the beginning of the succeeding Offering Period
unless the participant delivers to the Company a new subscription agreement.
	 
	 	(b)  	Upon termination of the participant’s Continuous Status as an
Employee prior to an Exercise Date for any reason, including retirement or
death, the payroll deductions credited to such participant’s account during the
Offering Period but not yet used to exercise the option will be returned to such
participant or, in the case of his death, to the person or persons entitled
thereto under paragraph 15, and such participant’s option will be automatically
terminated.
	 
	 	(c)  	In the event an Employee fails to remain in Continuous Status as
an Employee of the Company during an Offering Period in which the Employee is a
participant, he will be deemed to have elected to withdraw from the Plan and the
payroll deductions credited to his account will be returned to such participant
and such participant’s option terminated.
	 
	 	(d)  	A participant’s withdrawal from an Offering Period will not have
any effect upon his eligibility to participate in any similar plan which may
hereafter be adopted by the Company or in succeeding Offering Periods which
commence after the termination of the Offering Period from which the participant
withdraws.
	 
	 	(e)  	A participant’s withdrawal from an offering will not have any
effect upon his eligibility to participate in any similar plan which may
hereafter be adopted by the Company.

     12. Interest. No interest shall accrue on the payroll deductions of a participant in
the Plan.

     13. Stock.

	(a)  	The maximum number of shares of the Company’s Common Stock which
shall be made available for sale under the Plan shall be 10,100,000 shares,
plus, commencing on the first day of the Company’s 1999 fiscal year, an annual
increase equal to the lesser of (i) 3,000,000 shares, (ii) 1.5% of the Issued
Shares (as defined below) as of the last day of the immediately preceding fiscal
year or (iii) a lesser amount determined by the Board, all subject to adjustment
upon changes in capitalization of the Company as provided in paragraph 19.
“Issued Shares” shall mean the number of shares of Common Stock of the Company
outstanding on such date plus any shares reacquired by the Company during the
fiscal year that ends on such date. If the total number of shares which would
otherwise be subject to options granted pursuant to paragraph 7(a) hereof on the
Exercise Date exceeds the number of shares then available under the Plan (after
deduction of all shares

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	   	for which options have been exercised or are then outstanding), the Company
shall make a pro rata allocation of the shares remaining available for option
grant in as uniform a manner as shall be practicable and as it shall
determine to be equitable. In such event, the Company shall give written
notice of such reduction of the number of shares subject to the option to
each Employee affected thereby and shall similarly reduce the rate of payroll
deductions, if necessary.
	 
	(b)  	The participant will have no interest or voting right in shares
covered by his option until such option has been exercised.
	 
	(c)  	Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his spouse.

     14. Administration. The Plan shall be administered by the Board of Directors of the
Company or a committee appointed by the Board. The administration, interpretation or application
of the Plan by the Board or its committee shall be final, conclusive and binding upon all
participants. Members of the Board who are eligible Employees are permitted to participate in the
Plan.

     15. Designation of Beneficiary.

	 	(a)  	A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant’s account under
the Plan in the event of such participant’s death subsequent to the end of the
Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant’s account under the Plan in the event
of such participant’s death prior to the Exercise Date of the Offering Period.
	 
	 	(b)  	Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant’s death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

     16. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares under the Plan may be
assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of
descent and distribution or as provided in paragraph 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without effect, except that
the Company may treat such act as an election to withdraw funds in accordance with paragraph 11.

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     17. Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.

     18. Reports. Individual accounts will be maintained for each participant in the Plan.
Statements of account will be given to participating Employees promptly following the Exercise
Date, which statements will set forth the amounts of payroll deductions, the per share purchase
price, the number of shares purchased and the remaining cash balance, if any.

     19. Adjustments Upon Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by each option under the
Plan which has not yet been exercised and the number of shares of Common Stock which have been
authorized for issuance under the Plan but have not yet been placed under option, including the
annual share replenishment limit of three million shares set forth in Section 13, (collectively,
the “Reserves”) as well as the price per share of Common Stock covered by each option under the
Plan which has not yet been exercised, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock split or the payment
of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number
of shares of Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not be deemed to have
been “effected without receipt of consideration”. Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an option.

     In the event of the proposed dissolution or liquidation of the Company, the offering period
will terminate immediately prior to the consummation of such proposed action, unless otherwise
provided by the Board. In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another corporation, each option under
the Plan shall be assumed or an equivalent option shall be substituted by such successor
corporation or a parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or substitution, that the
participant shall have the right to exercise the option as to all of the option stock, including
shares as to which the option would not otherwise be exercisable. If the Board makes an option
fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets,
the Board shall notify the participant that the option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and the option will terminate upon the expiration of
such period.

     The Board may, if it so determines in the exercise of its sole discretion, also make provision
for adjusting the Reserves, as well as the price per share of Common Stock covered by each
outstanding option, in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of shares of its outstanding
Common Stock, and in the event of the Company being consolidated with or merged into any other
corporation.

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     20. Amendment or Termination.

          (a) The Administrator may at any time and for any reason terminate or amend the Plan. Except
as otherwise provided in the Plan, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the
Administrator determines that the termination of the Offering Period or the Plan is in the best
interests of the Company and its shareholders. Except as provided in Section 19 and this Section
20 hereof, no amendment may make any change in any option theretofore granted which adversely
affects the rights of any participant. To the extent necessary to comply with Section 423 of the
Code (or any successor rule or provision or any other applicable law, regulation or stock exchange
rule), the Company shall obtain shareholder approval in such a manner and to such a degree as
required.

          (b) Without shareholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Administrator shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Administrator determines in its sole
discretion advisable which are consistent with the Plan.

          (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator may, in its discretion
and, to the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such
accounting consequence including, but not limited to:

               (i) increasing the Purchase Price for any Offering Period including an Offering Period
underway at the time of the change in Purchase Price;

               (ii) shortening any Offering Period so that Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Administrator action; and

               (iii) allocating shares.

     21. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

     22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign, including, without

-9-

 

limitation, the Securities Act of 1933, as amended, the Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which the shares may then
be listed, and shall be further subject to the approval of counsel for the Company with respect to
such compliance.

     As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

     23. Term of Plan. The Plan shall be come effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the stockholders of the Company. It shall
continue for a term of twenty (20) years unless sooner terminated under paragraph 20.

-10-

 

CYPRESS SEMICONDUCTOR CORPORATION

EMPLOYEE QUALIFIED STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

	 	 	 	 	 
	

	 	Original Application
	 	Date:
	

	 	 	 	

	

	 	Change in Payroll Deduction Rate	 	 
	

	 	 	 	 
	

	 	Change of Beneficiary	 	 
	

	 	 	 	 

	1.  	                                         hereby elects to participate in the Cypress Semiconductor Corporation
Employee Qualified Stock Purchase Plan (the “Stock Purchase Plan”) and subscribes to purchase
shares of the Company’s Common Stock, with par value $.01, in accordance with this
Subscription Agreement and the Stock Purchase Plan.
	 
	2.  	I hereby authorize payroll deductions from each paycheck in the amount of ___% of my
Compensation (not less than 2% nor more than 10%) on each payday during the Offering Period in
accordance with the Stock Purchase Plan. Such deductions are to continue for succeeding
Offering Periods until I give written instructions for a change in or termination of such
deductions.
	 
	3.  	I understand that said payroll deductions shall be accumulated for the purchase of shares of
Common Stock at the applicable purchase price determined in accordance with the Stock Purchase
Plan. I further understand that, except as otherwise set forth in the Stock Purchase Plan,
shares will be purchased for me automatically on each Exercise Date of the Offering Period
unless I otherwise withdraw from the Stock Purchase Plan by giving written notice to the
Company for such purpose.
	 
	4.  	Shares purchased for me under the Stock Purchase Plan will be deposited into my account with
UBS Paine Webber.
	 
	5.  	I understand that if I dispose of any shares received by me pursuant to the Stock Purchase
Plan within two years after the Offering Date (the first day of the Offering Period during
which I purchased such shares) or within one year after the date on which such shares were
delivered to me, I may be treated for federal income tax purposes as having received ordinary
income at the time of such disposition in an amount generally measured as the excess of the
fair market value of the shares at the time such shares were delivered to me over the price
which I paid for the shares, and that I may be required to provide income tax withholding on
that amount. I hereby agree to notify the Company in writing within 30 days after the date of
any such disposition. However, if I dispose of such shares at any time after the expiration
of the two-year and one-year holding periods, I understand that I will be treated for federal
income tax purposes as having received income only at the time of such disposition, and that
such income will be taxed as ordinary income only to the extent of an amount equal to the
lesser of (1) the excess of the fair market value of the shares at the time of such
disposition over the purchase price which I paid for the shares under the option, or (2) 15%
of the fair market value on the first day of the Offering

 

 

	   	Period. The remainder of the gain, if any, recognized on such disposition will be taxed as
capital gains.
	 
	6.  	I have received a copy of the Company’s most recent prospectus which describes the Stock
Purchase Plan and a copy of the complete “Cypress Semiconductor Employee Qualified Stock
Purchase Plan.” I understand that my participation in the Stock Purchase Plan is in all
respects subject to the terms of the Plan.
	 
	7.  	I hereby agree to be bound by the terms of the Stock Purchase Plan. The effectiveness of
this Subscription Agreement is dependent upon my eligibility to participate in the Stock
Purchase Plan.
	 
	8.  	In the event of my death, I hereby designate the following as my beneficiary(ies) to receive
all payments and shares due me under the Stock Purchase Plan:

	 	 	 
	NAME: (Please print)
	 	 
	 	 	 
	

	 	(First)                      (Middle)                      (Last)
	 
	 	 
	 	 	 
	 
	 	 
	

	 	(Address)
	 
	 	 
	 	 	 
	 
	 	 
	NAME: (Please print)
	 	 
	 	 	 
	

	 	(First)                      (Middle)                      (Last)
	 
	 	 
	 	 	 
	 
	 	 
	

	 	(Address)
	 
	 	 
	 	 	 
	 
	 	 
	Employee’s Social
	 	 
	 	 	 
	Security Number:
	 	 
	 	 	 
	Employee’s Address:*
	 	 
	 	 	 
	 
	 	 
	 	 	 
	 
	 	 
	 	 	 

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

	 	 	 
	Dated:
	 	 
	

	 	

	

	 	Signature of Employee 

	*	 	It is the participant’s responsibility to
notify the company’s stock administrator in the event of a change of address.

-2-

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