MAXIM INTEGRATED PRODUCTS INC (Form: 10-Q, Received: 10/28/2020 16:05:59)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM	10-Q



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	September 26, 2020



☐	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 1-34192

MAXIM INTEGRATED PRODUCTS, INC.

(Exact name of registrant as specified in its charter)



Delaware		94-2896096
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

160 Rio Robles

San Jose, CA 95134

(Address of Principal Executive Offices including Zip Code)

(408) 601-1000

(Registrant’s Telephone Number, including Area Code)



Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, $0.001 par value	MXIM	The NASDAQ Global Select Market

Indicate by check mark 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 reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller” reporting company in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisited financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). (Check one): Yes ☐ No ☒

As of October 15, 2020, there were 267,301,195 shares of Common Stock, par value $.001 per share, of the registrant outstanding.

MAXIM INTEGRATED PRODUCTS, INC.

INDEX



PART I - FINANCIAL INFORMATION		Page

Item 1. Financial Statements (Unaudited)		3

Condensed Consolidated Balance Sheets as of September 26, 2020 and June 27, 2020		3

Condensed Consolidated Statements of Income for the Three Months Ended September 26, 2020 and September 28, 2019		4

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended September 26, 2020 and September 28, 2019		5

Condensed Consolidated Statements of Shareholders' Equity for the Three Months Ended September 26, 2020 and September 28, 2019		7

Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 26, 2020 and September 28, 2019		6

Notes to Condensed Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24

Item 3. Quantitative and Qualitative Disclosures About Market Risk		30

Item 4. Controls and Procedures		30

PART II - OTHER INFORMATION		32

Item 1. Legal Proceedings		32

Item 1A. Risk Factors		32

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		32

Item 3. Defaults Upon Senior Securities		32

Item 4. Mine Safety Disclosures		32

Item 5. Other Information		32

Item 6. Exhibits		33

SIGNATURE		34

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

MAXIM INTEGRATED PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



	September 26, 2020			June 27, 2020
	(in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	1,595,089		$	1,578,670
Short-term investments	17,022			35,536
Total cash, cash equivalents and short-term investments	1,612,111			1,614,206
Accounts receivable, net of allowances of $636 at September 26, 2020 and $645 at June 27, 2020	449,376			404,778
Inventories	265,664			259,626
Other current assets	29,816			39,219
Total current assets	2,356,967			2,317,829
Property, plant and equipment, net	542,421			550,406
Intangible assets, net	82,679			87,959
Goodwill	562,540			562,540
Other assets	108,920			110,569
TOTAL ASSETS	$	3,653,527		$	3,629,303

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	86,831		$	91,982
Price adjustment and other revenue reserves	144,255			148,916
Income taxes payable	53,655			43,457
Accrued salary and related expenses	115,460			126,751
Accrued expenses	46,119			42,228
Total current liabilities	446,320			453,334
Long-term debt	994,381			994,022
Income taxes payable	360,164			385,072
Other liabilities	141,643			139,418
Total liabilities	1,942,508			1,971,846

Commitments and contingencies (Note 12)

Stockholders’ equity:
Common stock and capital in excess of par value	12,461			266
Retained earnings	1,713,153			1,671,786
Accumulated other comprehensive loss	(14,595		)	(14,595		)
Total stockholders’ equity	1,711,019			1,657,457
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY	$	3,653,527		$	3,629,303

See accompanying Notes to Condensed Consolidated Financial Statements.

MAXIM INTEGRATED PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended
	September 26, 2020			September 28, 2019
	(in thousands, except per share data)

Net revenues	$	619,357		$	533,040
Cost of goods sold	202,343			189,717
Gross margin	417,014			343,323
Operating expenses:
Research and development	115,466			108,989
Selling, general and administrative	82,954			76,115
Intangible asset amortization	919			756
Severance and restructuring expenses	8,813			1,434
Other operating expenses (income), net	7,428			25
Total operating expenses	215,580			187,319
Operating income	201,434			156,004
Interest and other income (expense), net	(7,037		)	1,829
Income before provision for income taxes	194,397			157,833
Income tax provision	24,883			17,677
Net income	$	169,514		$	140,156

Earnings per share:
Basic	$	0.64		$	0.52
Diluted	$	0.63		$	0.51

Shares used in the calculation of earnings per share:
Basic	266,831			271,388
Diluted	269,529			274,436

See accompanying Notes to Condensed Consolidated Financial Statements.

MAXIM INTEGRATED PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended
	September 26, 2020			September 28, 2019
	(in thousands)
Net income	$	169,514		$	140,156
Other comprehensive income (loss), net of tax:
Change in net unrealized gains and losses on available-for-sale securities, net of tax benefit (expense) of $9 and $(14), respectively	(80		)	118
Change in net unrealized gains and losses on cash flow hedges, net of tax benefit (expense) of $(23) and $165, respectively	63			(859		)
Change in net unrealized gains and losses on post-retirement benefits, net of tax benefit (expense) of $11 and $(22), respectively	17			98
Other comprehensive income (loss), net	—			(643		)
Total comprehensive income	$	169,514		$	139,513

See accompanying Notes to Condensed Consolidated Financial Statements.

MAXIM INTEGRATED PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Three Months Ended
	September 26, 2020			September 28, 2019
	(in thousands)
Cash flows from operating activities:
Net income	$	169,514		$	140,156
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	35,730			24,671
Depreciation and amortization	24,199			23,921
Deferred taxes	(1,103		)	453
Loss on disposal of property, plant and equipment	63			376
Other adjustments	1,867			27
Changes in assets and liabilities:
Accounts receivable	(44,798		)	(10,300		)
Inventories	(5,986		)	10,578
Other assets	4,159			(52,443		)
Accounts payable	(3,423		)	1,242
Price adjustment and other revenue reserves	(4,461		)	(10,284		)
Income taxes payable	(14,710		)	(25,341		)
All other accrued liabilities	1,460			38,214
Net cash provided by (used in) operating activities	162,511			141,270
Cash flows from investing activities:
Purchases of property, plant and equipment	(12,728		)	(20,631		)
Proceeds from sale of property, plant and equipment	4			43
Proceeds from maturity of available-for-sale securities	18,425			42,921
Purchases of investments in privately-held companies	(84		)	—
Proceeds from sale of investments in privately-held companies	25			516
Other investing activities	—			(35		)
Net cash provided by (used in) investing activities	5,642			22,814
Cash flows from financing activities:
Net issuance of restricted stock units and awards	(17,018		)	(9,943		)
Proceeds from stock options exercised	2,632			7,482
Repurchase of common stock	(9,201		)	(93,552		)
Dividends paid	(128,147		)	(130,222		)
Net cash provided by (used in) financing activities	(151,734		)	(226,235		)
Net increase (decrease) in cash and cash equivalents	16,419			(62,151		)
Cash, cash equivalents and restricted cash:
Beginning of period	$	1,585,428		$	1,757,342
End of period	$	1,601,847		$	1,695,191

Supplemental disclosures of cash flow information:
Cash paid, net, during the period for income taxes	$	29,124		$	32,156
Cash paid for interest	$	8,438		$	8,438
Noncash financing and investing activities:
Accounts payable related to property, plant and equipment purchases	$	9,858		$	8,307

Cash, cash equivalents and restricted cash:
Cash and cash equivalents	1,595,089			1,695,191
Restricted cash in Other assets	6,758			—
Total cash, cash equivalents and restricted cash	1,601,847			1,695,191

See accompanying Notes to Condensed Consolidated Financial Statements.

MAXIM INTEGRATED PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)



	Three Months Ended September 26, 2020
	Common Stock				Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	Shares		Par Value		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	(in thousands)

Balance, June 27, 2020	266,797		$	266	$	—		$	1,671,786		$	(14,595	)	$	1,657,457
Net income	—		—		—			169,514			—			169,514
Repurchase of common stock	(150	)	—		(9,201		)	—			—			(9,201		)
Net issuance of restricted stock units and awards	563		—		(17,018		)	—			—			(17,018		)
Stock options exercised	94		—		2,631			—			—			2,631
Stock-based compensation	—		1		35,782			—			—			35,783
Dividends paid, $0.48 per common share	—		—		—			(128,147		)	—			(128,147		)
Balance, September 26, 2020	267,304		$	267	$	12,194		$	1,713,153		$	(14,595	)	$	1,711,019



	Three Months Ended September 28, 2019
	Common Stock					Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	Shares		Par Value			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Total Stockholders' Equity
	(in thousands)

Balance, June 29, 2019	271,852		$	272		$	—		$	1,856,358		$	(11,354	)	$	1,845,276
Net income	—		—			—			140,156			—			140,156
Other comprehensive income (loss), net	—		—			—			—			(643		)	(643		)
Repurchase of common stock	(1,622	)	(1		)	(22,235		)	(71,316		)	—			(93,552		)
Cumulative-effect adjustment for adoption of ASU 2016-02	—		—			—			(1,964		)	—			(1,964		)
Net issuance of restricted stock units	387		—			(9,943		)	—			—			(9,943		)
Stock options exercised	266		—			7,482			—			—			7,482
Stock-based compensation	—		—			24,696			—			—			24,696
Dividends paid, $0.48 per common share	—		—			—			(130,222		)	—			(130,222		)
Balance, September 28, 2019	270,883		$	271		$	—		$	1,793,012		$	(11,997	)	$	1,781,286

See accompanying Notes to Condensed Consolidated Financial Statements.

MAXIM INTEGRATED PRODUCTS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Maxim Integrated Products, Inc. and all of its majority-owned subsidiaries (collectively, the “Company” or “Maxim Integrated”) included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with generally accepted accounting principles of the United States of America (“GAAP”) have been condensed or omitted pursuant to applicable rules and regulations. In the opinion of management, all adjustments of a normal recurring nature which were considered necessary for fair statement have been included. The year-end condensed consolidated balance sheet data were derived from audited consolidated financial statements but do not include all disclosures required by GAAP. The results of operations for the three months ended September 26, 2020 are not necessarily indicative of the results to be expected for the entire year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 27, 2020.

The Company has a 52-to-53-week fiscal year that ends on the last Saturday in June. Accordingly, every fifth or sixth fiscal year will be a 53-week fiscal year. Fiscal years 2021 and 2020 are 52-week fiscal years.

Merger with Analog Devices

On July 13, 2020, the Company announced that it had entered into an Agreement and Plan of Merger, dated July 12, 2020 (as it may be amended from time to time, the “ADI Merger Agreement”) with Analog Devices, Inc., a Massachusetts corporation (“Analog Devices” or "ADI"), and Magneto Corp., a wholly-owned subsidiary of Analog Devices (“Acquisition Sub”), under which, subject to the satisfaction or (to the extent permissible) waiver of the conditions set forth therein, Acquisition Sub will merge with and into the Company, and the Company will survive the merger as a wholly-owned subsidiary of Analog Devices (the “ADI Merger”). Under the terms of the ADI Merger Agreement, at the effective time of the ADI Merger (the “Effective Time”), each share of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”), issued and outstanding immediately prior to the Effective Time (other than treasury shares and any shares of Company Common Stock held by Analog Devices or Acquisition Sub) will be converted into the right to receive 0.6300 of a fully paid and non-assessable share of common stock, par value $0.16 2/3 per share, of Analog Devices (with cash being paid (without interest and less applicable withholding taxes) in lieu of any fraction of a share of Analog Devices common stock). Analog Devices shareholders will continue to own their existing Analog Devices shares, and the combined company will be named Analog Devices.

The ADI Merger has been approved by both the Company’s Board of Directors and the Board of Directors of Analog Devices. The completion of the ADI Merger is subject to customary closing conditions, including, among others, the required approvals of Maxim Integrated’s stockholders, the approval of ADI’s shareholders and the receipt of various regulatory approvals. Subject to the satisfaction or (to the extent permissible) waiver of such conditions, the transaction is expected to close in the summer of 2021. The Company cannot guarantee that the ADI Merger will be completed on a timely basis or at all or that, if completed, it will be completed on the terms set forth in the ADI Merger Agreement.

As of October 8, 2020, stockholder approval for the ADI Merger has been obtained from Maxim Integrated's stockholders and ADI's shareholders. In addition, the proposed transaction has received antitrust clearance from the United States Federal Trade Commission.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates relate to the useful lives and fair value of fixed assets, valuation allowance for deferred tax assets, reserves relating to uncertain tax positions, allowance for distributor credits, inventory valuation, reserves relating to litigation matters, assumptions about the fair value of reporting units and asset groups, accrued liabilities and reserves, and the value of intangibles

acquired associated with business combinations. The Company bases its estimates and judgments on its historical experience, knowledge of current conditions and its beliefs of what could occur in the future, given available information. Actual results may differ from those estimates, and such differences may be material to the financial statements.

The ongoing novel coronavirus ("COVID-19") pandemic and the mitigation efforts by governments to attempt to control its spread created uncertainties and disruptions in the economic and financial markets. The Company is not aware of events or circumstances that would require an update to its estimates, judgments, or adjustments to the carrying values of its assets or liabilities as of October 28, 2020, the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as developments occur and as the Company obtains additional information. These future developments are highly uncertain, and the outcomes, unpredictable. Actual results may differ from those estimates, and such differences may be material to the financial statements.

(i) New Accounting Update Recently Adopted

In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes resulted in earlier recognition of credit losses. We adopted ASU 2016-13 beginning in the first quarter of fiscal year 2021 using the modified retrospective approach. The effect on our consolidated financial statements and related disclosures was not material.

NOTE 3: BALANCE SHEET COMPONENTS

Inventories consist of:



	September 26, 2020		June 27, 2020
	(in thousands)
Raw materials	$	20,397	$	18,287
Work-in-process	172,267		164,061
Finished goods	73,000		77,278
Total inventories	$	265,664	$	259,626

Property, plant and equipment, net, consist of:



	September 26, 2020			June 27, 2020
	(in thousands)
Land	$	17,720		$	17,720
Buildings and building improvements	314,043			312,999
Machinery, equipment and software	1,333,793			1,323,791
Total	1,665,556			1,654,510
Less: accumulated depreciation	(1,123,135		)	(1,104,104		)
Total property, plant and equipment, net	$	542,421		$	550,406

Accrued salary and related expenses consist of:



	September 26, 2020		June 27, 2020
	(in thousands)
Accrued vacation	$	36,061	$	33,992
Accrued bonus	29,213		66,662
Accrued salaries	21,244		12,153
ESPP Withholding	16,898		5,986
Accrued fringe benefits	4,228		4,077
Other	7,816		3,881
Total accrued salary and related expenses	$	115,460	$	126,751

NOTE 4: DISAGGREGATION OF REVENUE

The following table summarizes net revenue disaggregated by end market. The Company classifies end market revenue by using estimates and assumptions based on historical experience and knowledge of current conditions, given available information.



	Three Months Ended
	September 26, 2020				September 28, 2019
	Revenue		% of Total		Revenue		% of Total
	(in thousands, except percentages)
Automotive	$	158,068	26	%	$	139,769	26	%
Communications and Data Center	131,293		21	%	96,071		18	%
Consumer	136,390		22	%	133,338		25	%
Industrial	193,606		31	%	163,862		31	%
	$	619,357			$	533,040

The following table summarizes net revenue disaggregated by sales channel:



	Three Months Ended
	September 26, 2020				September 28, 2019
	Revenue		% of Total		Revenue		% of Total
	(in thousands, except percentages)
Distributors	$	324,550	52	%	$	266,586	50	%
Direct customers	294,807		48	%	266,454		50	%
	$	619,357			$	533,040

NOTE 5: FAIR VALUE MEASUREMENTS

The FASB established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Three levels of inputs that may be used to measure fair value are as follows:

Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities.

The Company’s Level 1 assets consist of money market funds.

Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

The Company’s Level 2 assets and liabilities consist of corporate debt securities and foreign currency forward contracts that are valued using quoted market prices or are determined using a yield curve model based on current market rates.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company's Level 3 assets and liabilities consist of acquisition-related contingent consideration liabilities.

Assets and liabilities measured at fair value on a recurring basis were as follows:



	As of September 26, 2020								As of June 27, 2020
	Fair Value Measurements Using						Total		Fair Value Measurements Using						Total
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash and cash equivalents
Money market funds	$	26,629	$	—	$	—	$	26,629	$	61,814	$	—	$	—	$	61,814
Short-term investments
Corporate debt securities	—		17,022		—		17,022		—		35,536		—		35,536
Other current assets
Foreign currency forward contracts	—		1,228		—		1,228		—		1,151		—		1,151
Total assets	$	26,629	$	18,250	$	—	$	44,879	$	61,814	$	36,687	$	—	$	98,501

Liabilities
Accrued expenses
Foreign currency forward contracts	$	—	$	596	$	—	$	596	$	—	$	341	$	—	$	341
Contingent consideration	—		—		10,000		10,000		—		—		10,000		10,000
Other liabilities
Contingent consideration	—		—		4,165		4,165		—		—		4,165		4,165
Total Liabilities	$	—	$	596	$	14,165	$	14,761	$	—	$	341	$	14,165	$	14,506

During the three months ended September 26, 2020 and the year ended June 27, 2020, there were no transfers in or out of Level 3 from other levels in the fair value hierarchy.

There were no assets or liabilities measured at fair value on a non-recurring basis as of September 26, 2020 and June 27, 2020 other than impairments of long-lived assets.

As of September 26, 2020 and June 27, 2020, the fair value of private company investments amounted to $21.2 million and $20.6 million, respectively. The aggregate amount of unrealized losses recognized from these investments were $3.8 million and $4.3 million, respectively, as of September 26, 2020 and June 27, 2020.

The Company recorded $0.5 million of unrealized gains on private company investments, during the three months ended September 26, 2020. Unrealized gains (loss) on private company investments was not material during the three months ended September 28, 2019. Unrealized gains (losses) on private company investments are recorded in Interest and other income (expense), net in the Company's Condensed Consolidated Statements of Income.

NOTE 6: FINANCIAL INSTRUMENTS

Short-term investments

Fair values were as follows:



	September 26, 2020									June 27, 2020
	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value		Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
	(in thousands)
Available-for-sale investments
Corporate debt securities	$	16,983	$	47	$	(8	)	$	17,022	$	35,417	$	137	$	(18	)	$	35,536
Total available-for-sale investments	$	16,983	$	47	$	(8	)	$	17,022	$	35,417	$	137	$	(18	)	$	35,536

In the three months ended September 26, 2020 and September 28, 2019, the Company did not recognize impairment charges on short-term investments. All available-for-sale investments have maturity dates between October 2, 2020 and March 12, 2021.

Derivative instruments and hedging activities

The Company incurs expenditures denominated in non-U.S. currencies, primarily the Philippine Peso and the Thai Baht associated with the Company's manufacturing activities in the Philippines and Thailand, respectively, and European Euro, Indian Rupee, Taiwan New Dollar, South Korean Won, Chinese Yuan, Japanese Yen, Singapore Dollar, and Canadian Dollar expenditures for sales offices and research and development activities undertaken outside of the U.S.

The Company has established a program that primarily utilizes foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. The Company does not use these foreign currency forward contracts for trading purposes.

Derivatives designated as cash flow hedging instruments

The Company designates certain forward contracts as hedging instruments pursuant to Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). As of September 26, 2020 and June 27, 2020, the notional amounts of the forward contracts the Company held to purchase international currencies were $57.0 million and $61.6 million, respectively.

Derivatives not designated as hedging instruments

As of September 26, 2020 and June 27, 2020, the notional amounts of the forward contracts the Company held to purchase international currencies were $49.5 million and $32.3 million, respectively, and the notional amounts of forward contracts the Company held to sell international currencies were $11.2 million and $12.0 million, respectively.

The Company's foreign currency forward contract gains or losses included in the Condensed Consolidated Statements of Income were not material for the three months ended September 26, 2020 and September 28, 2019, respectively.

Effect of hedge accounting on the Condensed Consolidated Statements of Income

The following tables summarize the gains (losses) from hedging activities recognized in the Company's Condensed Consolidated Statements of Income:



	Three Months Ended						Three Months Ended
	September 26, 2020						September 28, 2019
	Net Revenue		Cost of Goods Sold		Operating Expenses			Net Revenue		Cost of Goods Sold		Operating Expenses
	(in thousands)
Income and expenses line items in which the effects of cash flow hedges are recorded	$	619,357	$	202,343	$	215,580		$	533,040	$	189,717	$	187,319

Gain (loss) on cash flow hedges:
Foreign exchange contracts:
Gain (loss) reclassified from accumulated other comprehensive income into income	$	—	$	435	$	670		$	—	$	120	$	(370	)

Outstanding debt obligations

The following table summarizes the Company’s outstanding debt obligations:



	September 26, 2020			June 27, 2020
	(in thousands)
3.375% fixed rate notes due March 2023	$	500,000		$	500,000
3.45% fixed rate notes due June 2027	500,000			500,000
Total outstanding debt	1,000,000			1,000,000
Less: Reduction for unamortized discount and debt issuance costs	(5,619		)	(5,978		)
Total long-term debt	$	994,381		$	994,022

On June 15, 2017, the Company completed a public offering of $500 million aggregate principal amount of the Company's 3.45% senior unsecured and unsubordinated notes due in June 2027 (“2027 Notes”), with an effective interest rate of 3.5%. Interest on the 2027 Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2017. The net proceeds of this offering were approximately $495.2 million, after issuing at a discount and deducting paid expenses.

On March 18, 2013, the Company completed a public offering of $500 million aggregate principal amount of the Company’s 3.375% senior unsecured and unsubordinated notes due in March 2023 (“2023 Notes”), with an effective interest rate of 3.5%. Interest on the 2023 Notes is payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds of this offering were approximately $490.0 million, after issuing at a discount and deducting paid expenses.

The debt indentures that govern the 2027 Notes and the 2023 Notes include covenants that limit the Company's ability to grant liens on its facilities and to enter into sale and leaseback transactions, which could limit the Company's ability to secure additional debt funding in the future. In circumstances involving a change of control of the Company followed by a downgrade of the rating of the 2027 Notes or the 2023 Notes, the Company would be required to make an offer to repurchase the affected notes at a purchase price equal to 101% of the aggregate principal amount of such notes, plus accrued and unpaid interest.

The Company accounts for all the notes above based on their amortized cost. The discount and expenses are being amortized to Interest and other income (expense), net in the Condensed Consolidated Statements of Income over the life of the notes. The interest expense is recorded in Interest and other income (expense), net in the Condensed Consolidated Statements of Income. Amortized discount and expenses, as well as interest expense associated with the notes, were $8.9 million and $8.9 million during the three months ended September 26, 2020 and September 28, 2019, respectively.

The estimated fair value of the Company’s outstanding debt obligations was approximately $1.0 billion as of September 26, 2020. The estimated fair value of the debt is based primarily on observable market inputs and is a Level 2 measurement.

The Company recorded interest expense of $9.4 million and $9.3 million during the three months ended September 26, 2020, and September 28, 2019, respectively.

Other Financial Instruments

For the balance of the Company’s financial instruments, cash equivalents, accounts receivable, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities.

NOTE 7: STOCK-BASED COMPENSATION

At September 26, 2020, the Company had one stock incentive plan, the Company's 1996 Stock Incentive Plan (the “1996 Plan”) and one employee stock purchase plan, the 2008 Employee Stock Purchase Plan (the “2008 ESPP”). The 1996 Plan was adopted by the Board of Directors to provide the grant of incentive stock options, non-statutory stock options, restricted stock units (“RSUs”), restricted stock awards ("RSAs") and market stock units (“MSUs”) to employees, directors, and consultants.

Pursuant to the 1996 Plan, the exercise price for incentive stock options and non-statutory stock options is determined to be the fair market value of the underlying shares on the date of grant. Options typically vest ratably over a four-year period measured from the date of grant. Options generally expire no later than seven years after the date of grant, subject to earlier termination upon an optionee's cessation of employment or service.

RSUs granted to employees typically vest ratably over a four-year period and are released or converted into shares of the Company's common stock upon vesting, subject to the employee's continued service to the Company over that period. RSUs granted from September 2017 to July 2020 will continue to vest post-employment at the Company for certain individuals satisfying specific eligibility requirements.

RSAs granted to employees typically vest over a four-year cliff period and are converted into shares of the Company's common stock upon vesting, subject to the employee's continued service to the Company over that period. RSAs have certain shareholder rights, such as voting rights, but are not eligible for dividends or dividend equivalents.

MSUs granted to employees typically vest over a four-year cliff period and are converted into shares of the Company's common stock upon vesting, subject to the employee's continued service to the Company over that period. The number of shares that are released at the end of the performance period can range from zero to a maximum cap depending on the Company's performance. MSUs granted in September 2017, September 2018, and September 2019 will continue to vest post-employment at the Company for certain individuals satisfying specific eligibility requirements.

The following tables show total stock-based compensation expense by type of award, and the resulting tax effect, included in the Condensed Consolidated Statements of Income for the three months ended September 26, 2020 and September 28, 2019, respectively:



	Three Months Ended								Three Months Ended
	September 26, 2020								September 28, 2019
	Stock Options		Restricted Stock Units and Other Awards		Employee Stock Purchase Plan		Total		Stock Options		Restricted Stock Units and Other Awards		Employee Stock Purchase Plan		Total
	(in thousands)
Cost of goods sold	$	11	$	3,794	$	864	$	4,669	$	9	$	2,280	$	669	$	2,958
Research and development	3		12,267		2,106		14,376		4		9,485		1,395		10,884
Selling, general and administrative	75		15,483		1,127		16,685		67		9,953		810		10,830
Pre-tax stock-based compensation expense	$	89	$	31,544	$	4,097	$	35,730	$	80	$	21,718	$	2,874	$	24,672
Less: income tax effect							2,531								2,888
Net stock-based compensation expense							$	33,199							$	21,784

The expense included in the Condensed Consolidated Statements of Income for RSUs and other awards include expenses related to MSUs of $3.6 million and $4.4 million for the three months ended September 26, 2020 and September 28, 2019, respectively. In connection with the proposed ADI Merger, on September 1, 2020, the Company’s Board of Directors granted RSAs to certain employees. For employees who made IRS Section 83(b) elections, Maxim accelerated a portion of the RSAs to satisfy tax withholding requirements. The Company recorded $7.9 million of stock-based compensation expense related to the accelerated RSAs in the three months ended September 26, 2020.

Stock Options

The fair value of options granted to employees under the 1996 Plan is estimated on the date of grant using the Black-Scholes option valuation model.

There were no stock options granted in the three months ended September 26, 2020 and September 28, 2019.

The following table summarizes outstanding, exercisable and vested and expected to vest stock options as of September 26, 2020 and related activity for the three months ended September 26, 2020:



	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value⁽¹⁾
Balance at June 27, 2020	104,447		$	28.76
Options Granted	—		—
Options Exercised	(94,375	)	28.30
Options Cancelled	—		—
Balance at September 26, 2020	10,072		$	33.09	0.6	$	326,753
Exercisable, September 26, 2020	10,072		$	33.09	0.6	$	326,753
Vested and expected to vest, September 26, 2020	10,072		$	33.09	0.6	$	326,753
⁽¹⁾Aggregate intrinsic value represents the difference between the exercise price and the closing price per share of the Company’s common stock on September 25, 2020, the last business day preceding the fiscal quarter-end, multiplied by the number of options outstanding, exercisable or vested and expected to vest as of September 26, 2020.

As of September 26, 2020, there was no unrecognized stock compensation from unvested stock options.

Restricted Stock Units and Restricted Stock Awards

The fair value of RSUs and RSAs under the Company’s 1996 Plan is estimated using the value of the Company’s common stock on the date of grant, reduced by the present value of dividends expected to be paid on the Company’s common stock prior to vesting. The Company also estimates forfeitures at the time of grant and makes revisions to forfeitures on a quarterly basis.

The weighted-average fair value of RSUs and RSAs granted was $69.05 and $47.61 per share for the three months ended September 26, 2020 and September 28, 2019, respectively.

The following table summarizes the outstanding and expected to vest RSUs and RSAs as of September 26, 2020 and related activity during the three months ended September 26, 2020:



	Number of Shares		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value⁽¹⁾
Balance at June 27, 2020	4,606,592
Restricted stock units and restricted stock awards granted	1,304,862
Restricted stock units and restricted stock awards released	(500,583	)
Restricted stock units and restricted stock awards cancelled	(45,575	)
Balance at September 26, 2020	5,365,296		3.2	$	351,587,847
Outstanding and expected to vest, September 26, 2020	4,446,092		2.9	$	291,352,394
⁽¹⁾Aggregate intrinsic value for RSUs and RSAs represents the closing price per share of the Company’s common stock on September 25, 2020, the last business day preceding the fiscal quarter-end, multiplied by the number of RSUs and RSAs outstanding or expected to vest as of September 26, 2020.

The Company withheld shares totaling $17.0 million in value as a result of employee withholding taxes based on the value of RSUs and RSAs on their vesting date for the three months ended September 26, 2020. Total payments for employees’ tax obligations to taxing authorities are reflected as financing activities within the Condensed Consolidated Statements of Cash Flows.

As of September 26, 2020, there was $209.1 million of unrecognized compensation expense related to 5.4 million unvested RSUs and RSAs, which is expected to be recognized over a weighted average period of approximately 3.2 years.

Market Stock Units (MSUs)

The Company grants MSUs to senior members of management in lieu of granting stock options. For MSUs granted prior to September 2017, the performance metrics of this program are based on relative performance of the Company’s stock price as compared to the Semiconductor Exchange Traded Fund index SPDR S&P (the “XSD”). For MSUs granted in September 2017, September 2018, and September 2019, the performance metrics for this program are based on the total shareholder return ("TSR") of the Company relative to the TSR of the other companies included in the XSD. The fair value of MSUs is estimated using a Monte Carlo simulation model on the date of grant. The Company also estimates forfeitures at the time of grant and makes revisions to forfeitures on a quarterly basis. Compensation expense is recognized based on the initial valuation and is not subsequently adjusted as a result of the Company’s performance relative to that of the XSD or the TSR of the companies included in the XSD, as applicable. Vesting for MSUs is contingent upon both service and market conditions and has a four-year vesting cliff period. MSUs granted in September 2017, September 2018, and September 2019 vest based upon annual performance and are subject to continued service through the end of the four-year period but will continue to vest post-employment at the Company for certain individuals satisfying specific eligibility requirements. Pursuant to the terms of the ADI Merger Agreement, the Company grants RSUs in lieu of MSUs (or RSAs in lieu of MSUs for any potential “disqualified individuals” within the meaning of Section 280G of the Internal Revenue Code, which RSAs will not be eligible for dividends or dividend equivalent rights) from the date of the ADI Merger Agreement through the date that the transaction closes.

No MSUs were granted during the three months ended September 26, 2020. The weighted-average fair value of MSUs granted was $54.70 per share for the three months ended September 28, 2019.

The following table summarizes the number of MSUs outstanding and expected to vest as of September 26, 2020 and their activity during the three months ended September 26, 2020:



	Number of Shares		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value⁽¹⁾
Balance at June 27, 2020	971,220
Market stock units granted	—
Market stock units released	—
Market stock units cancelled	(230,132	)
Balance at September 26, 2020	741,088		2.2	$	48,563,497
Outstanding and expected to vest, September 26, 2020	576,716		2.2	$	37,792.218
⁽¹⁾Aggregate intrinsic value for MSUs represents the closing price per share of the Company’s common stock on September 25, 2020, the last business day preceding the fiscal quarter-end, multiplied by the number of MSUs outstanding or expected to vest as of September 26, 2020.

As of September 26, 2020, there was $22.3 million of unrecognized compensation expense related to 0.7 million unvested MSUs, which is expected to be recognized over a weighted average period of approximately 2.2 years.

Employee Stock Purchase Plan

Employees are granted rights to acquire common stock under the 2008 ESPP.

The fair value of 2008 ESPP rights granted to employees has been estimated at the date of grant using the Black-Scholes option valuation model using the following assumptions for the offering periods outstanding:



	Three Months Ended
	September 26, 2020	September 28, 2019
Expected holding period (in years)	0.5 years	0.5 years
Risk-free interest rate	0.2% - 1.6%	2.3% - 2.7%
Expected stock price volatility	29.2% - 55.2%	29.5% - 31.3%
Dividend yield	3.3% - 3.3%	3.1% - 3.4%

As of September 26, 2020 and September 28, 2019, there was $2.5 million and $4.0 million, respectively, of unrecognized compensation expense related to the 2008 ESPP. At the end of the current offering period in November 2020, the Company will suspend the 2008 ESPP program pursuant to the terms of the ADI Merger Agreement.

NOTE 8: EARNINGS PER SHARE

Basic earnings per share are computed using the weighted average number of shares of common stock outstanding during the period. For purposes of computing basic earnings per share, the weighted average number of outstanding shares of common stock excludes unvested RSUs, RSAs and MSUs. Diluted earnings per share incorporates the incremental shares issuable upon the assumed exercise of stock options, assumed release of unvested RSUs, RSAs and MSUs, and assumed issuance of common stock under the 2008 ESPP using the treasury stock method.

The following table sets forth the computation of basic and diluted earnings per share:



	Three Months Ended
	September 26, 2020		September 28, 2019
	(in thousands, except per share data)
Numerator for basic earnings per share and diluted earnings per share
Net income	$	169,514	$	140,156

Denominator for basic earnings per share	266,831		271,388
Effect of dilutive securities:
Stock options, ESPP, RSUs, RSAs and MSUs	2,698		3,048
Denominator for diluted earnings per share	269,529		274,436

Earnings per share
Basic	$	0.64	$	0.52
Diluted	$	0.63	$	0.51

For the three months ended September 26, 2020 and September 28, 2019 stock awards determined to be anti-dilutive were insignificant and were excluded from the computation of diluted earnings per share in all periods.

NOTE 9: SEGMENT INFORMATION

The Company designs, develops, manufactures and markets a broad range of linear and mixed signal integrated circuits. All of the Company's products are designed through a centralized R&D function, manufactured using centralized manufacturing (internal and external), and sold through a centralized sales force and shared wholesale distributors.

The Company currently has one operating segment and reportable segment. In accordance with ASC No. 280, Segment Reporting (“ASC 280”), the Company considers operating segments to be components of the Company’s business for which separate financial information is available that is evaluated regularly by the Company’s Chief Operating Decision Maker in deciding how to allocate resources and in assessing performance. The Chief Operating Decision Maker for the Company was assessed and determined to be the CEO. The CEO reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it has a single operating and reportable segment.

Enterprise-wide information is provided in accordance with ASC 280. Geographical revenue information is based on customers’ ship-to location. Long-lived assets consist of property, plant and equipment. Property, plant and equipment information is based on the physical location of the assets at the end of each fiscal year.

Net revenues from unaffiliated customers by geographic region were as follows:



	Three Months Ended
	September 26, 2020		September 28, 2019
	(in thousands)
United States	$	60,136	$	55,799
China	245,805		197,299
Rest of Asia	198,464		169,914
Europe	99,505		95,940
Rest of World	15,447		14,088
	$	619,357	$	533,040

Net long-lived assets by geographic region were as follows:



	September 26, 2020		June 27, 2020
	(in thousands)
United States	$	356,188	$	362,093
Philippines	83,006		88,660
Rest of World	103,227		99,653
	$	542,421	$	550,406

NOTE 10: COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive income (loss) by component and related tax effects in the three months ended September 26, 2020 and September 28, 2019 were as follows:



(in thousands)	Unrealized Gains and (Losses) on Intercompany Receivables			Unrealized Gains and (Losses) on Post-Retirement Benefits			Cumulative Translation Adjustment			Unrealized Gains and (Losses) on Cash Flow Hedges			Unrealized Gains and (Losses) on Available-For-Sale Securities			Total
June 27, 2020	$	(6,280	)	$	(7,988	)	$	(1,136	)	$	690		$	119		$	(14,595	)
Other comprehensive income (loss) before reclassifications	—			—			—			1,191			(89		)	1,102
Amounts reclassified out of accumulated other comprehensive (income) loss	—			6			—			(1,105		)	—			(1,099		)
Tax effects	—			11			—			(23		)	9			(3		)
Other comprehensive income (loss), net	—			17			—			63			(80		)	—
September 26, 2020	$	(6,280	)	$	(7,971	)	$	(1,136	)	$	753		$	39		$	(14,595	)



(in thousands)	Unrealized Gains and (Losses) on Intercompany Receivables			Unrealized Gains and (Losses) on Post-Retirement Benefits			Cumulative Translation Adjustment			Unrealized Gains and (Losses) on Cash Flow Hedges			Unrealized Gains and (Losses) on Available-For-Sale Securities			Total
June 29, 2019	$	(6,280	)	$	(4,322	)	$	(1,136	)	$	425		$	(41	)	$	(11,354	)
Other comprehensive income (loss) before reclassifications	—			—			—			(1,274		)	132			(1,142		)
Amounts reclassified out of accumulated other comprehensive (income) loss	—			120			—			250			—			370
Tax effects	—			(22		)	—			165			(14		)	129
Other comprehensive income (loss), net	—			98			—			(859		)	118			(643		)
September 28, 2019	$	(6,280	)	$	(4,224	)	$	(1,136	)	$	(434	)	$	77		$	(11,997	)

NOTE 11: INCOME TAXES

In the three months ended September 26, 2020 and September 28, 2019, the Company recorded an income tax provision of $24.9 million and $17.7 million, respectively. The Company’s effective tax rate for the three months ended September 26, 2020 and September 28, 2019 was 12.8% and 11.2%, respectively.

The Company’s federal statutory tax rate is 21%. The Company’s effective tax rate for the three months ended September 26, 2020 and September 28, 2019 was lower than the statutory rate primarily due to earnings of foreign subsidiaries, generated by the Company's international operations managed in Ireland, that were taxed at lower rates, partially offset by U.S. tax expense generated by Global Intangible Low-Taxed Income.

On June 18, 2019, the U.S. Treasury and Internal Revenue Service (“IRS”) released temporary regulations under Internal Revenue Code (“IRC”) Sections 245A and 954(c)(6) (the “Temporary Regulations”), which applied retroactively to intercompany dividends occurring after December 31, 2017. The Temporary Regulations limit the applicability of the foreign personal holding company income (“FPHCI”) look-through exception for certain intercompany dividends received by a controlled foreign corporation. Before application of the retroactive Temporary Regulations, the Company benefited in fiscal years 2018 and 2019 from the FPHCI look-through exception. On August 21, 2020, the U.S. Treasury and IRS released final regulations under IRC Sections 245A and 954(c)(6) (the “Final Regulations”), which generally apply to years ending on or after June 14, 2019. The relevant sections of the Final Regulations are virtually the same as the Temporary Regulations. The Temporary Regulations apply to fiscal year 2018 and the Final Regulations apply to fiscal year 2019 intercompany dividends. The Company does not have any intercompany dividends after fiscal year 2019 that are impacted by relevant sections of the Temporary Regulations or Final Regulations.

The Company previously analyzed the relevant Temporary Regulations and concluded that they were not validly issued, a conclusion which the Company has determined is not altered by issuance of the Final Regulations. The Company has also analyzed the relevant Final Regulations and concluded that they were not validly issued. Therefore, the Company has not accounted for the effects of the Temporary Regulations or Final Regulations in its results of operations for any fiscal period. The Company believes it has strong arguments in favor of its position and that it has met the more likely than not recognition threshold that its position will be sustained. The Company intends to vigorously defend its position, however, due to the uncertainty involved in challenging and litigating the validity of regulations, there can be no assurance that a court of law will rule in favor of the Company. An unfavorable resolution of this issue could have a material adverse impact on the Company's results of operations and financial condition.

The Company’s federal corporate income tax returns are audited on a recurring basis by the IRS. In fiscal year 2020, the IRS commenced an audit of the Company’s federal corporate income tax returns for fiscal years 2015 through 2017, which is ongoing.

NOTE 12: COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is party or subject to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business, including proceedings and claims that relate to intellectual property matters. While the outcome of these matters cannot be predicted with certainty, the Company does not believe that the outcome of any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized or reserved, if any.

Indemnification

The Company indemnifies certain customers, distributors, suppliers and subcontractors for attorney fees, damages and costs awarded against such parties in certain circumstances in which the Company's products are alleged to infringe third party intellectual property rights, including patents, registered trademarks or copyrights. The terms of the Company's indemnification obligations are generally perpetual from the effective date of the agreement. In certain cases, there are limits on and exceptions to the Company's potential liability for indemnification relating to intellectual property infringement claims.

Pursuant to the Company's charter documents and separate written indemnification agreements, the Company has certain indemnification obligations to its current officers, employees and directors, as well as certain former officers and directors.

NOTE 13: COMMON STOCK REPURCHASES

On October 30, 2018, the Board of Directors of the Company authorized the repurchase of up to $1.5 billion of the Company’s common stock. The stock repurchase authorization does not have an expiration date and the pace of repurchase activity will depend on factors such as current stock price, levels of cash generated from operations, cash requirements, and other factors. All prior repurchase authorizations by the Company’s Board of Directors for the repurchase of common stock were cancelled and superseded by this repurchase authorization.

During the three months ended September 26, 2020, the Company repurchased approximately 149.8 thousand shares of its common stock for $9.2 million. As of September 26, 2020, the Company had remaining authorization of $0.7 billion for future share repurchases. Pursuant to the terms of the ADI Merger Agreement, the Company suspended its repurchase program on July 13, 2020, the date the Company announced its planned merger with ADI.

NOTE 14: LEASES

The Company's lease obligations consist of operating leases for domestic and international office facilities, data centers, and equipment. These leases expire at various dates through fiscal year 2031. For the three months ended September 26, 2020, the Company recorded operating lease expense of $2.4 million.

Leases are included in the following Condensed Consolidated Balance Sheet lines:



	September 26, 2020		June 27, 2020
	(in thousands)
Other assets	$	52,070	$	54,610

Accrued expenses	$	10,673	$	10,445
Other liabilities	$	46,105	$	48,314

Future minimum lease payments under non-cancelable operating leases as of September 26, 2020 are as follows:



	Operating Lease Obligations
Fiscal Year	(in thousands)
Remainder of 2021	$	9,399
2022	11,513
2023	9,622
2024	8,429
2025	6,777
Thereafter	17,324
Total	63,064
Less imputed interest	6,286
Total	$	56,778

Future minimum lease payments under non-cancelable operating leases as of September 28, 2019 are as follows:



	Operating Lease Obligations
Fiscal Year	(in thousands)
Remainder of 2020	$	9,051
2021	11,647
2022	10,665
2023	9,549
2024	8,215
Thereafter	22,064
Total	71,191
Less imputed interest	8,204
Total	$	62,987

Other information related to leases as of September 26, 2020 are as follows:



	Three Months Ended
	September 26, 2020			September 28, 2019
Supplemental cash flow information:
Operating cash flows used for operating leases, in thousands	$	2,994		$	2,863

Weighted-average remaining lease term - operating leases, in years	6			7
Weighted-average discount rate - operating leases	3.28		%	3.45		%

NOTE 15: GOODWILL AND INTANGIBLE ASSETS

Goodwill

The Company monitors the recoverability of goodwill recorded in connection with acquisitions, by reporting unit, annually, or more often if events or changes in circumstances indicate that the carrying amount may not be recoverable.

There were no changes to goodwill during the three months ended September 26, 2020.

No indicators or instances of impairment were identified during the three months and fiscal year ended September 26, 2020 and June 27, 2020, respectively.

Intangible Assets

Intangible assets consisted of the following:



	September 26, 2020						June 27, 2020
	Original Cost		Accumulated Amortization		Net		Original Cost		Accumulated Amortization		Net
	(in thousands)
Intellectual property	$	525,196	$	462,780	$	62,416	$	525,196	$	458,418	$	66,778
Customer relationships	118,335		109,321		9,014		118,335		108,603		9,732
Trade name	11,374		9,393		1,981		11,374		9,265		2,109
Backlog	170		97		73		170		25		145
Patents	2,500		2,500		—		2,500		2,500		—
Total amortizable purchased intangible assets	657,575		584,091		73,484		657,575		578,811		78,764
In-process research & development (IPR&D)	9,195		—		9,195		9,195		—		9,195
Total purchased intangible assets	$	666,770	$	584,091	$	82,679	$	666,770	$	578,811	$	87,959

The following table presents the amortization expense of intangible assets and its presentation in the Condensed Consolidated Statements of Income:



	Three Months Ended
	September 26, 2020		September 28, 2019
	(in thousands)
Cost of goods sold	$	4,361	$	3,111
Intangible asset amortization	919		756
Total intangible asset amortization expenses	$	5,280	$	3,867

The following table represents the estimated future amortization expense of intangible assets as of September 26, 2020:



	Amount
Fiscal Year	(in thousands)
Remainder of 2021	$	13,999
2022	13,454
2023	12,970
2024	9,995
2025	9,716
Thereafter	13,350
Total intangible assets	$	73,484

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Maxim Integrated Products, Inc. (“Maxim Integrated” or the “Company” and also referred to as “we,” “our” or “us”) disclaims any duty to and undertakes no obligation to update any forward-looking statement, whether as a result of new information relating to existing conditions, future events or otherwise, the uncertainties as to the timing of the completion of our pending merger with Analog Devices, Inc. and the ability of each party to complete the merger, and the effects of the ongoing novel coronavirus ("COVID-19") pandemic, or to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, including the impact of the COVID-19 pandemic and the responses to it, except as required by federal securities laws. Readers are cautioned not to place undue reliance on such statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Readers should carefully review future reports and documents that the Company files with or furnishes to the SEC from time to time, such as its Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K.

Overview of Business

Maxim Integrated Products, Inc. (“Maxim Integrated” or the “Company” and also referred to as “we,” “our” or “us”) designs, develops, manufactures and markets a broad range of linear and mixed-signal integrated circuits, commonly referred to as analog circuits, for a large number of customers in diverse geographical locations. The analog market is fragmented and characterized by many diverse applications, a great number of product variations and, with respect to many circuit types, relatively long product life cycles. We are a global company with a wafer manufacturing facility in the U.S., test facilities in the Philippines and Thailand, and sales and circuit design offices around the world. We also utilize third parties for manufacturing and assembly of our products.

Recent Developments

The Linear and Mixed-Signal Analog Integrated Circuit Market

All electronic signals generally fall into one of two categories, linear or digital. Linear (or analog) signals represent real world phenomena, such as temperature, pressure, sound or speed, and are continuously variable over a wide range of values. Digital signals represent the “ones” and “zeros” of binary arithmetic and are either on or off.

Three general classes of semiconductor products arise from this distinction between linear and digital signals:


•	digital devices, such as memories and microprocessors that operate primarily in the digital domain;


•	linear devices, such as amplifiers, references, analog multiplexers and switches that operate primarily in the analog domain; and


•	mixed-signal devices such as data converter devices that combine linear and digital functions on the same integrated circuit and interface between the analog and digital domains.

Our strategy has been to target both the linear and mixed-signal markets, often collectively referred to as the analog market. However, some of our products are exclusively or principally digital. While our focus continues to be on the linear and mixed-signal market, our capabilities in the digital domain enable development of new mixed-signal and other products with highly sophisticated digital characteristics.

Our linear and mixed-signal products now serve four major end-markets: (i) Automotive, (ii) Communications and Data Center, (iii) Consumer and (iv) Industrial. These major end-markets and their corresponding markets are noted in the table below:



MAJOR END-MARKET		MARKET

AUTOMOTIVE		Infotainment
		Powertrain
		Body Electronics
		Safety & Security

COMMUNICATIONS & DATA CENTER		Base Stations
		Data Center
		Data Storage
		Desktop Computers
		Network & Datacom
		Notebook Computers
		Peripherals & Other Computer
		Server
		Telecom
		Other Communications

CONSUMER		Smartphones
		Digital Cameras
		Handheld Computers
		Home Entertainment & Appliances
		Wearables
		Other Consumer

INDUSTRIAL		Automatic Test Equipment
		Control & Automation
		Electrical Instrumentation
		Financial Terminals
		Medical
		Security
		USB Extension
		Other Industrial

CRITICAL ACCOUNTING POLICIES

The methods, estimates, and judgments we use in applying our most critical accounting policies have a significant impact on the results we report in our financial statements. The Securities and Exchange Commission (“SEC”) has defined the most critical

accounting policies as the ones that are most important to the presentation of our financial condition and results of operations, and that require us to make our most difficult and subjective accounting judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include valuation of inventories; accounting for income taxes; and assessment of litigation and contingencies. These policies and the estimates and judgments involved are discussed further in the Management’s Discussion and Analysis of Financial Condition in our Annual Report on Form 10-K for the fiscal year ended June 27, 2020. We have other significant accounting policies that either do not generally require estimates and judgments that are as difficult or subjective, or it is less likely that such accounting policies would have a material impact on our reported results of operations for a given period.

Except for the accounting policies and estimates outlined under Part I, Item 1. Financial Statements - Note 2, there have been no material changes during the three months ended September 26, 2020 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended June 27, 2020.

Impact of COVID-19 on Our Business

The ongoing COVID-19 pandemic has impacted and will continue to impact the Company’s operations, employees, customers, and suppliers, due to shelter-in-place orders, mandated quarantines, reduced facility operations, and travel bans and restrictions. While the operating results for the second quarter of fiscal year 2021 and thereafter may be impacted by COVID-19, the extent and form of such impact to our business is uncertain and cannot be estimated with any degree of certainty.

Employee Health and Safety

During the third and fourth quarters of fiscal year 2020 and the first quarter of fiscal year 2021, the Company's facilities and offices were either operating at reduced capacity or temporarily closed for non-essential operations. In an effort to protect the health and safety of our employees, we implemented safety measures such as work-from-home practices, travel restrictions, extensive cleaning protocols, and social distancing when engaging in essential activities.

Focus on Customers

We continue to work with our sales, supplier, and customer design and engineering teams to meet current demand. Teams meet remotely, through telephonic or video conferences and by leveraging available technology, to continue the design and engineering process that would normally take place at physical customer locations.

Manufacturing and Operations

We will continue to actively monitor this evolving situation and implement changes to protect employee health. In addition to our actions, we will continue to implement government-placed orders in all our locations. While COVID-19 related disruptions have impacted our manufacturing operations, we continue to leverage our manufacturing flexibility to reduce the negative effects of such disruptions.

Please refer certain risk factors included in Item 1A in our Annual Report on Form 10-K for the fiscal year ended June 27, 2020 for discussions of the risks to our business from COVID-19.

RESULTS OF OPERATIONS

The following table sets forth certain Condensed Consolidated Statements of Income data expressed as a percentage of net revenues for the periods indicated:



	Three Months Ended
	September 26, 2020		September 28, 2019

Net revenues	100.0	%	100.0	%
Cost of goods sold	32.7	%	35.6	%
Gross margin	67.3	%	64.4	%
Operating expenses:
Research and development	18.6	%	20.4	%
Selling, general and administrative	13.4	%	14.3	%
Intangible asset amortization	0.1	%	0.1	%
Severance and restructuring expenses	1.4	%	0.3	%
Other operating expenses (income), net	1.2	%	—	%
Total operating expenses	34.8	%	35.1	%
Operating income	32.5	%	29.3	%
Interest and other income (expense), net	(1.1	)%	0.3	%
Income before provision for income taxes	31.4	%	29.6	%
Income tax provision (benefit)	4.0	%	3.3	%
Net income	27.4	%	26.3	%

The following table shows stock-based compensation included in the components of the Condensed Consolidated Statements of Income reported above as a percentage of net revenues for the periods indicated:



	Three Months Ended
	September 26, 2020		September 28, 2019
Cost of goods sold	0.8	%	0.6	%
Research and development	2.3	%	2.0	%
Selling, general and administrative	2.7	%	2.0	%
	5.8	%	4.6	%

Net Revenues

Net revenues were $619.4 million and $533.0 million for the three months ended September 26, 2020 and September 28, 2019, respectively. Revenue from communications and data center products was up by 37% driven by an increased demand for base station and data center products. Revenue from industrial products was up by 18% primarily due to higher demand for medical and automatic test equipment products. Revenue from automotive products increased by 13% mainly due to increased demand for powertrain and safety and security products.

During each of the three months ended September 26, 2020 and September 28, 2019, approximately 90% of net revenues were derived from customers outside of the United States. While less than 2% of our sales are denominated in currencies other than U.S. dollars, we enter into foreign currency forward contracts to mitigate our risks on firm commitments and net monetary assets denominated in foreign currencies. The impact of changes in foreign exchange rates on our revenue and results of operations for the three months ended September 26, 2020 and September 28, 2019 was immaterial.

Gross Margin

Our gross margin percentages were 67.3% and 64.4% for the three months ended September 26, 2020 and September 28, 2019, respectively. Our gross margin increased by 2.9 percentage points, primarily due to increased factory utilization and higher revenues.

Research and Development

Research and development expenses were $115.5 million and $109.0 million for the three months ended September 26, 2020 and September 28, 2019, respectively, which represented 18.6% and 20.4% of net revenues for each respective period. The $6.5 million increase was primarily due to higher salaries and related personnel costs, including increased stock-based compensation for acceleration of certain RSAs for tax withholding purposes.

Selling, General and Administrative

Selling, general and administrative expenses were $83.0 million and $76.1 million for the three months ended September 26, 2020 and September 28, 2019, respectively, which represented 13.4% and 14.3% of net revenues for each respective period. The $6.9 million increase was mainly due to higher salaries and related personnel costs, including increased stock-based compensation for acceleration of certain RSAs for tax withholding purposes. This was partially offset by lower depreciation expense.

Severance and restructuring

Severance and restructuring expenses were $8.8 million and $1.4 million for the three months ended September 26, 2020 and September 28, 2019, respectively, which represented 1.4% and 0.3% of net revenues for each respective period. The $7.4 million increase was due to increased restructuring activities which, as a result of the pending ADI merger, now include change in control related benefits.

Other operating expense (income), net

Other operating expense (income), net were $7.4 million and less than $0.1 million for the three months ended September 26, 2020 and September 28, 2019, respectively, which represented 1.2% and less than 0.1% of net revenues for each respective period. The $7.3 million increase was primarily due to expenses related to the pending ADI merger such legal and professional services.

Provision for Income Taxes

In the three months ended September 26, 2020 and September 28, 2019, we recorded an income tax provision of $24.9 million and $17.7 million, respectively. Our effective tax rate for the three months ended September 26, 2020 and September 28, 2019 was 12.8% and 11.2%, respectively.

Our federal statutory tax rate is 21%. The effective tax rate for the three months ended September 26, 2020 and September 28, 2019 was lower than the statutory rate primarily due to earnings of foreign subsidiaries, generated by the Company's international operations managed in Ireland, that were taxed at lower rates, partially offset by U.S. tax expense generated by Global Intangible Low-Taxed Income.

BACKLOG

As of September 26, 2020 and June 27, 2020, our current quarter backlog was approximately $493.0 million and $496.4 million, respectively. Our current quarter backlog includes customer request dates to be filled within the next three months. As is customary in the semiconductor industry, these orders may be canceled in most cases without penalty to customers. Accordingly, we believe that our backlog is not a reliable measure for predicting future revenues. All backlog amounts have been adjusted for estimated future distribution ship and debit pricing adjustments.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Financial Condition

Cash flows were as follows:



	Three Months Ended
	September 26, 2020			September 28, 2019
	(in thousands)
Net cash provided by (used in) operating activities	$	162,511		$	141,270
Net cash provided by (used in) investing activities	5,642			22,814
Net cash provided by (used in) financing activities	(151,734		)	(226,235		)
Net increase (decrease) in cash and cash equivalents	$	16,419		$	(62,151	)

Operating activities

Cash provided by operating activities is net income adjusted for certain non-cash items and changes in certain assets and liabilities.

Cash provided by operating activities increased by $21.2 million for the three months ended September 26, 2020 compared with the three months ended September 28, 2019 primarily due to higher net income, partially offset by changes in working capital.

Investing activities

Investing cash flows consist primarily of net investment purchases and maturities, and capital expenditures.

Cash provided by investing activities decreased by $17.2 million for the three months ended September 26, 2020 compared with the three months ended September 28, 2019. The decrease was due to lower proceeds from maturity of available-for-sale securities partially offset by lower purchases of property, plant and equipment.

Financing activities

Financing cash flows consist primarily of payment of debt, dividends to stockholders, and repurchases of common stock.

Cash used in financing activities decreased by $74.5 million for the three months ended September 26, 2020 compared with the three months ended September 28, 2019. The decrease was primarily due to lower repurchases of common stock.

Liquidity and Capital Resources

Our primary source of liquidity is our cash flows from operating activities resulting from net income and management of working capital.

As of September 26, 2020, our available funds consisted of $1.6 billion in cash, cash equivalents and short-term investments.

On October 30, 2018, we were authorized to repurchase up to $1.5 billion of the Company's common stock. During the three months ended September 26, 2020, we repurchased an aggregate of $9.2 million of the Company's common stock. Pursuant to the terms of the ADI Merger Agreement, the Company suspended its repurchase program on July 13, 2020, the date we announced our planned merger with ADI.

During the three months ended September 26, 2020, we paid cash dividends of $0.48 per common share totaling $128.1 million. The Company will neither declare nor pay a dividend in any of the next succeeding three fiscal quarters, as provided in the ADI Merger Agreement.

We anticipate that the available funds and cash generated from operations will be sufficient to meet cash and working capital requirements, including the anticipated level of capital expenditures, debt repayments and dividend payments for at least the next twelve months.

Off-Balance-Sheet Arrangements

As of September 26, 2020, we did not have any material off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company’s market risk has not changed materially from the interest rate and foreign currency risks disclosed in Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020.

The impact of inflation and changing prices on the Company’s net revenues and on operating income during the three months ended September 26, 2020 and September 28, 2019 was not material.

ITEM 4: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer (“CEO”) and our chief financial officer (“CFO”), evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as of September 26, 2020. Our management, including the CEO and the CFO, has concluded that the Company’s disclosure controls and procedures were effective as of September 26, 2020. The purpose of these controls and procedures is to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, and that such information is accumulated and communicated to our management, including our CEO and our CFO, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 26, 2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. Due to the COVID-19 pandemic, most of the Company’s employees are working remotely, and the Company is striving to minimize the impact of this on the design and effectiveness of the Company’s internal control over financial reporting. The Company is continually monitoring and assessing its internal control over financial reporting and has not experienced any material impact to its internal control over financial reporting due to the COVID-19 pandemic.

Inherent Limitations on the Effectiveness of Internal Controls

A system of internal control over financial reporting is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP, and no control system, no matter

how well designed and operated, can provide absolute assurance. The design of any control system is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of its inherent limitations, internal control over financial reporting may not prevent or detect financial statement errors and misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

PART II. OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

The information set forth above under Part I, Item 1, Note 12 “Commitments and Contingencies” to the Condensed Consolidated Financial Statements is incorporated herein by reference.

ITEM 1A: RISK FACTORS

A description of risks associated with our business, financial condition and results of our operations is set forth in Item 1A - Risk Factors of our Annual Report on Form 10-K for the fiscal year ended June 27, 2020, which is incorporated herein by reference.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On October 30, 2018, the Board of Directors of the Company authorized the repurchase of up to $1.5 billion of the Company’s common stock. This stock repurchase authorization does not have an expiration date and the pace of repurchase activity will depend on factors such as current stock price, levels of cash generated from operations, cash requirements, and other factors. The Company’s prior repurchase authorization was cancelled and superseded by this new repurchase authorization.

The following table summarizes the activity related to stock repurchases for the three months ended September 26, 2020:



	Issuer Repurchases of Equity Securities
	(in thousands, except per share amounts)
	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
Jun 28, 2020 - Sep 26, 2020	150	$	61.41	150	$	664,970
Total for the quarter	150	$	61.41	150	$	664,970

In the three months ended September 26, 2020, the Company repurchased approximately 149.8 thousand shares of its common stock for approximately $9.2 million. As of September 26, 2020, the Company had remaining authorization of $0.7 billion for future share repurchases. Pursuant to the terms of the ADI Merger Agreement, the Company suspended its repurchase program on July 13, 2020, the date we announced our planned merger with ADI.

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4: MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5: OTHER INFORMATION

None.

ITEM 6: EXHIBITS

(a) Exhibits



10.5 (A)	Form of Global Restricted Stock Agreement
31.1	Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act (1)
31.2	Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act (1)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 (1)
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 (1)
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ⁽¹⁾
101.SCH	Inline XBRL Taxonomy Extension Schema Document ⁽¹⁾
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document ⁽¹⁾
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document ⁽¹⁾
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document ⁽¹⁾
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document ⁽¹⁾
104	Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. ⁽¹⁾



(A) Management contract or compensatory plan or arrangement.
(1) Filed or furnished herewith.

In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections.

SIGNATURE

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.



October 28, 2020		MAXIM INTEGRATED PRODUCTS, INC.

		By:/s/ Brian C. White
		Brian C. White
		Senior Vice President, Chief Financial Officer

EXHIBIT 10.5

MAXIM INTEGRATED PRODUCTS, INC.

1996 STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

Maxim Integrated Products, Inc., a Delaware corporation (the “Company”), pursuant to its 1996 Stock Incentive Plan (the “Plan”) has granted to Grantee an award of a number of restricted shares of the Company’s Common Stock (the “Restricted Stock”) with the terms set forth in a document delivered separately to Grantee (the “Grant Notice”). The Restricted Stock is subject to all of the terms and conditions in the Grant Notice, this Restricted Stock Agreement and any appendix for Grantee’s country¹ (the “Appendix,” and together with the Restricted Stock Agreement and the Grant Notice, the “Agreement”) and the Plan. Unless otherwise defined herein, capitalized terms shall have the meaning ascribed to such terms in the Plan.

1.Vesting Schedule. Subject to Sections 2, 3 and 4, the Restricted Stock awarded by this Agreement will vest in Grantee according to the vesting schedule set forth on the Grant Notice, subject to Grantee’s Continuous Status as an Employee, Director or Consultant through each such date. Vesting may be suspended during any unpaid leave of absence, unless continued vesting is required by Applicable Laws or unless continued vesting is approved by the Company in writing. Notwithstanding anything to the contrary herein, the Company, in its sole discretion, shall have the right to accelerate the vesting of any portion of the Restricted Stock to satisfy any withholding and/or payment obligations for Tax-Related Items.

2.Forfeiture upon Termination of Continuous Status as an Employee, Director or Consultant. Subject to Sections 3 and 4, if Grantee’s Continuous Status as an Employee, Director or Consultant ceases for any or no reason, any then unvested Restricted Stock awarded by this Agreement will thereupon be forfeited at no cost to the Company and Grantee will have no further rights thereunder.

For purposes of the Restricted Stock, Grantee’s Continuous Status as an Employee, Director or Consultant will be considered terminated (regardless of the reason for such termination and whether or not such termination is later found to be invalid or in breach of Applicable Laws or the terms of Grantee’s employment or service agreement, if any) effective as of the date that Grantee is no longer actively providing services to the Company, Parent or any Subsidiary and will not be extended by any notice period (e.g., Grantee’s period of active service would not include any contractual notice period, statutory notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Grantee is rendering services or the terms of Grantee’s employment or service agreement, if any). Subject to Section 4, below, actively providing services during only a portion of the vesting period prior to a vesting date shall not entitle Grantee to vest in a pro-rata portion of the unvested Restricted Stock that would have vested as of such vesting date, nor will it entitle Grantee to any compensation for the lost vesting. The Administrator shall have the exclusive discretion to determine when Grantee is no longer actively providing services for purposes of the Restricted Stock (including whether Grantee may still be considered to be actively providing services while on leave of absence).

3.Death. If Grantee’s Continuous Status as an Employee, Director or Consultant is terminated due to Grantee’s death, then the Restricted Stock will fully vest immediately as of the date of Grantee’s death.

4.Change in Control. If the Restricted Stock is not assumed, converted, replaced or substituted with an equivalent award by a successor company (or a parent or subsidiary thereof) in connection with a Change in Control (as defined in the Company’s Change in Control Employee Severance Plan for U.S. Based Employees or the Company’s Change in Control Employee Severance Plan for Non-U.S. Based Employees (collectively, the “CIC Plan”)), then all Restricted Stock will fully vest immediately before the Change in Control. If the Restricted Stock is assumed,

___________________________

¹For the purposes of this Agreement, the phrase “Grantee’s country” refers to any country whose laws and regulations apply to Grantee during the relevant time period, as determined by the Company in its sole discretion. Grantee should speak with his or her personal legal and tax advisor for more information as to which countries this phrase may include, based on Grantee’s personal circumstances.

converted, replaced or substituted with an equivalent award by a successor company (or parent or subsidiary thereof) in connection with a Change in Control (an “Equivalent Award”), the vesting of the Restricted Stock shall be accelerated upon a termination of employment following a Change in Control which qualifies Grantee for severance benefits under the CIC Plan, solely to the extent equity award acceleration is provided in connection with a qualifying termination pursuant to and in accordance with the terms of the CIC Plan.

5.Issuance of Shares.

(a)Book-Entry Registration of Shares; Delivery of Shares. Unless otherwise determined by the Administrator, no certificates representing the Restricted Stock subject to this Agreement will be issued and the Company will instead document Grantee’s interest in the Restricted Stock as of the grant date by registering the Restricted Stock with the Company’s transfer agent (or another custodian selected by the Company) in book-entry form in Grantee’s name with the applicable restrictions noted in the book entry system until such time as the Restricted Stock has vested, and if and to the extent that the Restricted Stock is forfeited or otherwise required to be transferred back to the Company, the Company may cancel those book-entry Shares. In any case, the Company may provide a reasonable delay in the issuance or delivery of vested Shares to address withholding of Tax-Related Items (as defined below) and other administrative matters.

(b)Shareholder Rights. Upon the grant date of the Restricted Stock, Grantee shall have all the rights of a shareholder of the Company with respect to the Restricted Stock, subject to the restrictions and other provisions under the Agreement.

(c)Dividend Rights. Notwithstanding anything to the contrary herein, Grantee shall not be entitled to receive any cash dividends (or dividend equivalents) paid with respect to the Shares of Restricted Stock granted hereunder until the point in time when the Shares of Restricted Stock have vested in Grantee. For the avoidance of doubt, no dividends (or dividend equivalents) will accrue or be paid at any time with respect to unvested Shares of Restricted Stock.

6.Responsibility for Taxes. Grantee acknowledges that, regardless of any action taken by the Company and/or the Parent or Subsidiary employing Grantee or for which Grantee is otherwise providing services (the “Service Recipient”), the ultimate liability for any and all income tax (including U.S. and non-U.S. federal, state, and/or local taxes), social insurance, fringe benefit tax, payroll tax, payment on account or other tax-related items related to Grantee’s participation in the Plan and legally applicable to Grantee or deemed by the Company or the Service Recipient in their reasonable discretion to be an appropriate charge to Grantee even if legally applicable to the Company or Service Recipient (“Tax-Related Items”) is and remains Grantee’s responsibility and may exceed the amount, if any, actually withheld by the Company or Service Recipient. Grantee further acknowledges that the Company and/or the Service Recipient (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock, including, but not limited to, the grant, vesting or value of the Restricted Stock and the subsequent sale of any Shares and the receipt of any dividends; and (ii) do not commit and are under no obligation to structure the terms of the grant or any aspect of the Restricted Stock to reduce or eliminate Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if Grantee is subject to Tax-Related Items in more than one jurisdiction, Grantee acknowledges that the Company and/or the Service Recipient (or former service recipient, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may require Grantee to satisfy any withholding obligations for Tax-Related Items, in whole or in part, by one or more of the following (without limitation): (a) paying cash, (b) withholding from Grantee’s wages, salary or other cash compensation payable to Grantee by the Company, the Service Recipient or any other Parent or Subsidiary, (c) selling a sufficient number of vested Shares (on Grantee’s behalf pursuant to this authorization without further consent) through such means as the Company may determine in its sole discretion (whether through a broker or otherwise), (d) by the Company requiring Grantee to tender to the Company Restricted Stock that has vested, or (e) any other method as determined by the Administrator, subject to Applicable Laws; provided, however, that if Grantee is a Section 16

officer of the Company under the Exchange Act, then any withholding obligation for Tax-Related Items will be satisfied only by one or a combination of methods (a) through (c) above.

The Company may withhold or account for Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding rates, including maximum rates applicable in Grantee’s jurisdiction(s). In the event of over-withholding, Grantee may receive a refund of any over-withheld amount (with no entitlement to the Share equivalent), or if not refunded, Grantee may seek a refund from the applicable tax authorities. In the event of under-withholding, Grantee may be required to pay additional Tax-Related Items directly to the applicable tax authorities or to the Company and/or Service Recipient.

The Company may refuse to issue or deliver the Shares or the proceeds from the sale of Shares or refuse to remove restrictions from the Shares, if Grantee fails to comply with Grantee’s obligations in connection with the Tax-Related Items. Further, if Grantee fails to make satisfactory arrangements for the payment of any Tax-Related Items hereunder, Grantee will permanently forfeit such Shares and the Shares will be returned to the Company at no cost to the Company.

7.Certificates. If the Administrator determines that certificates will be issued in respect of the vested Shares, unless the Administrator otherwise determines, such certificates will be registered in the name of Grantee and will be in electronic form. Such share certificates shall carry such appropriate legends, and such written instructions shall be given to the Company transfer agent (or other applicable custodian selected by the Company), as may be deemed necessary or advisable by the Administrator in order to comply with Applicable Laws.

8.Acknowledgment of Nature of Plan and Restricted Stock. In accepting the Award, Grantee understands, acknowledges and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(b)the Award of Restricted Stock is exceptional, voluntary and occasional and does not create any contractual or other right to receive future Awards of Restricted Stock, or benefits in lieu of Restricted Stock even if Restricted Stock has been awarded in the past;

(c)all decisions with respect to future Awards, if any, will be at the sole discretion of the Company;

(d)Grantee’s participation in the Plan is voluntary;

(e)Restricted Stock and the income from and value of same, are not part of normal or expected compensation or salary for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, leave-related payments, holiday top-up, variable compensation, pension or retirement or welfare benefits or similar mandatory payments;

(f)the Award of Restricted Stock, this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein shall not create a right of Grantee’s Continuous Status as an Employee, Director or Consultant for the vesting period, for any period, or at all, or be interpreted as forming or amending an employment or service contract with the Company, the Service Recipient or any other Parent or Subsidiary, and shall not interfere with Grantee’s right or the right of the Company, Service Recipient or any other Parent or Subsidiary to terminate Grantee’s Continuous Status as an Employee, Director or Consultant (if any) at any time;

(g)unless otherwise agreed in writing with the Company, the Restricted Stock, and the income from and value of same, are not granted as consideration for, or in connection with, the service Grantee may provide as a director of a Parent or Subsidiary;

(h)the future value of the Shares is unknown, indeterminable and cannot be predicted with certainty;

(i)no claim or entitlement to compensation or damages arises from termination of the Award and forfeiture of Shares subject to the Award, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Award of Restricted Stock resulting from termination of Grantee’s Continuous Status as an Employee, Director or Consultant (regardless of the reason for the termination and whether or not such termination is found to be invalid or in breach of employment laws in the jurisdiction where Grantee is rendering services or the terms of Grantee’s employment or service agreement, if any); and

(j)neither the Company, the Service Recipient, nor any other Parent or Subsidiary shall be liable for any foreign exchange rate fluctuations between Grantee’s local currency and the United States Dollar that may affect the value of the Restricted Stock or the subsequent sale of any Shares.

9.No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding participation in the Plan, or Grantee’s acquisition of Restricted Stock or sale of Shares. Grantee should consult with his or her personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to the Plan.

10.Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care of Stock Administration at Maxim Integrated Products, Inc., 160 Rio Robles Drive, San Jose, CA 95134, United States of America, with a copy to the Corporate Secretary at 160 Rio Robles Drive, San Jose, CA 95134, United States of America, or at such other address as the Company may hereafter designate in writing. Any notices provided for in this Agreement or the Plan shall be given in writing (including electronic mail) and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to Grantee, five (5) days after deposit in the United States mail, postage prepaid, addressed to Grantee at the address specified above or at such other address as Grantee hereafter designate by written notice to the Company.

11.Grant is Not Transferable. This grant of Restricted Stock and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of this grant of Restricted Stock, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

12.Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

13.Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the listing, registration or qualification of the Shares upon any securities exchange or under any U.S. or non-U.S. state, federal, local or other Applicable Laws, or the consent or approval of any governmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to Grantee (or Grantee’s legal heirs), such issuance will not occur unless and until such listing, registration, qualification, consent or approval has been effected or obtained free of any conditions not acceptable to the Company. The Company is under no obligation to register or qualify the Shares with any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, the Company shall have unilateral authority to amend the Agreement without Grantee’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

14.Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.

15.Administrator Authority. The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock has vested). All actions taken and all interpretations and determinations made by the Administrator in good faith will be final and binding upon Grantee, the Company and all other interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.

16.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock awarded under the Plan or future Restricted Stock that may be awarded under the Plan by electronic means or request Grantee’s consent to participate in the Plan by electronic means. Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

17.Section 83(b) Election. If Grantee is a U.S. taxpayer, Grantee understands that for U.S. taxation purposes, Section 83(a) of the Code taxes as ordinary income the difference between the amount, if any, paid for the Restricted Stock and the Fair Market Value of such Restricted Stock at the time the restrictions on such Shares lapse. If Grantee is a U.S. taxpayer, Grantee understands that, notwithstanding the preceding sentence, Grantee may elect to be taxed for U.S. taxation purposes at the time of the grant date, rather than at the time the applicable restrictions lapse, by filing an election under Section 83(b) of the Code (an “83(b) Election”) with the U.S. Internal Revenue Service; provided, that Grantee has made such arrangements as the Company requires for the satisfaction of any Tax-Related Items withholding obligations in cash (unless otherwise determined by the Administrator in its sole discretion), upon the filing of such election. If Grantee shall fail to make such payments for the satisfaction of any Tax-Related Items, the Company shall, to the extent permitted by Applicable Law (and without limiting the Company’s rights under Section 6 above), have the right to deduct from any payment of any kind otherwise due to Grantee with respect to any Tax-Related Item to be withheld with respect to the Restricted Stock.

In the event Grantee files an 83(b) Election, Grantee will recognize ordinary income for U.S. taxation purposes in an amount equal to the difference between the amount, if any, paid for the Restricted Stock and the Fair Market Value of such Restricted Stock as of the grant date.

Further, if Grantee makes an 83(b) Election, Grantee understands and agrees that Grantee must file, within thirty (30) days following the grant date, a copy of such election with the Company and the U.S. Internal Revenue Service, in accordance with the regulations under Section 83 of the Code. Grantee further understands that (i) Grantee will not be entitled to a deduction for any ordinary income previously recognized as a result of the 83(b) Election if any unvested Restricted Stock is subsequently forfeited to the Company and (ii) the 83(b) Election may cause Grantee to recognize more compensation income for U.S. taxation purposes than Grantee would have otherwise recognized if the value of the Restricted Stock subsequently declines.

Grantee acknowledges that the foregoing is only a summary of the effect of U.S. federal income taxation with respect to the award of Restricted Stock hereunder, and does not purport to be complete. GRANTEE FURTHER ACKNOWLEDGES THAT THE COMPANY IS NOT RESPONSIBLE FOR FILING GRANTEE’S 83(B) ELECTION AND THE COMPANY HAS DIRECTED GRANTEE TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH GRANTEE MAY RESIDE.

Attached as Schedule A to this Agreement, are the “Instructions for IRS Section 83(b) Election”. Such instructions are attached solely for Grantee’s convenience and should not be construed as a recommendation from the Company (or any of its affiliates or agents) or tax advice.

18.Captions. Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

19.Language. Grantee acknowledges and represents that he or she is proficient in the English language or has consulted with an advisor who is sufficiently proficient in English as to allow Grantee to understand the terms of this Agreement and any other documents related to the Plan. If Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different from the English version, the English version will control.

20.Appendix. Notwithstanding any provisions in the Grant Notice or this Restricted Stock Agreement, the Restricted Stock shall be subject to any additional terms and conditions for Grantee’s country attached hereto in the Appendix. Moreover, if Grantee transfers residence and/or employment to, or is considered a citizen or resident for local law purposes of, one of the countries included in the Appendix, the additional terms and conditions for such country will apply to Grantee to the extent the Administrator determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Restricted Stock Agreement.

21.Imposition of Other Requirements. The Company reserves the right to impose other requirements on Grantee’s participation in the Plan, on the Restricted Stock and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

22.Agreement Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

23.Insider Trading Restrictions/Market Abuse Laws. Grantee acknowledges that Grantee may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and, if different, Grantee’s country, Grantee’s broker’s country and/or the country where Shares are listed, which may affect his or her ability to directly or indirectly, for him- or herself or for a third party, accept or otherwise acquire or sell, attempt to sell or otherwise dispose of, Shares or rights to Shares (e.g., Restricted Stock) under the Plan during such times as Grantee is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction) or the trade in Shares or the trade in rights to Shares under the Plan. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders Grantee places before he or she possessed inside information. Furthermore, Grantee could be prohibited from (1) disclosing the inside information to any third party (other than on a “need to know” basis) and (2) “tipping” third parties or otherwise causing them to buy or sell Company securities; including “third parties” who are fellow employees. Any restrictions under these laws or regulations may be separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and Grantee is advised to speak to his or her personal advisor on this matter.

24.Foreign Asset/Account Reporting; Exchange Controls. Grantee acknowledges that Grantee’s country may have certain foreign asset and/or account reporting requirements and/or exchange controls which may affect Grantee’s ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside Grantee’s country. Grantee may be required to report such accounts, assets or transactions to the tax or other authorities in his or her country. Grantee also may be required to repatriate sale proceeds or other funds received as a result of Grantee’s participation in the Plan to his or her country through a designated bank or broker and/or within a certain time after receipt. Grantee further acknowledges that it is his or her responsibility to be compliant with such regulations, and Grantee should consult his or her personal legal advisor for any details.

25.Waiver. Grantee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Grantee or any other grantee.

26.Governing Law/Choice of Venue. This Agreement and the Award of Restricted Stock granted hereunder shall be governed by, and construed in accordance with, the laws of the State of California, U.S.A., without giving effect to the conflict of law principles thereof. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Award of Restricted Stock or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California, U.S.A., and agree that such litigation shall be conducted only in the courts of Santa Clara County, California, U.S.A., or the federal courts for the United States for the Northern District of California, U.S.A., and no other courts, where this Award of Restricted Stock is made and/or to be performed.

By electronically approving the Award of Restricted Stock through the Morgan Stanley website, Grantee agrees to all of the terms and conditions described in this Agreement (including any Appendix) and in the Plan. If the Award of Restricted Stock has not been expressly approved before the first vesting date, Grantee understands and acknowledges that he or she will be deemed to have agreed to all of the terms and conditions in this Agreement (including any Appendix) and in the Plan.

APPENDIX

MAXIM INTEGRATED PRODUCTS, INC.

1996 STOCK INCENTIVE PLAN

RESTRICTED STOCK AGREEMENT

ADDITIONAL TERMS AND CONDITIONS

Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Grant Notice, the Restricted Stock Agreement and the Plan.

Terms and Conditions

This Appendix includes additional terms and conditions that govern the Award granted to Grantee if Grantee works and/or resides in one of the countries listed herein.

If Grantee is a citizen or resident of a country other than the one in which Grantee is currently working and/or residing, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the Company shall, in its sole discretion, determine to what extent the additional terms and conditions included herein will apply to Grantee under these circumstances.

Notifications

This Appendix also includes information regarding exchange controls and certain other issues of which Grantee should be aware with respect to Grantee’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of June 2020. Such laws are often complex and change frequently. Grantee should not rely on the information noted herein as the only source of information relating to the consequences of Grantee’s participation in the Plan because the information may be out of date at the time Grantee acquires Shares or sells Shares acquired under the Plan.

In addition, the information is general in nature and may not apply to Grantee’s particular situation, and the Company is not in a position to assure Grantee of any particular result. Accordingly, Grantee is advised to seek appropriate professional advice as to how the relevant laws in Grantee’s country may apply to Grantee’s situation.

If Grantee is a citizen or resident of a country other than the one in which Grantee is currently working and/or residing, is considered a resident of another country for local law purposes or transfers employment and/or residency between countries after the Grant Date, the information contained herein may not be applicable in the same manner to Grantee.

SCHEDULE A

INSTRUCTIONS FOR IRS SECTION 83(b) ELECTION

What to File. If you elect to file an 83(b) Election, the originally executed 83(b) Election is to be filed at the U.S. Internal Revenue Service Center where you file your Federal income tax return for non-payment filings. The participant can find the address to which the participant should send non-payment filings by going to the web address below or contracting the IRS:

https://www.irs.gov/uac/Where-to-File-Addresses-for--Taxpayers-and--Tax-Professionals-Filing-Form-1040)

Mail to the address for non-payment filings:

•one (1) originally signed 83(b) Election

•one (1) copy of the signed election (this is so the IRS can stamp it and mail it back to you)

•a self-addressed stamped envelope

You must retain additional signed copies (i) for your own records and (ii) to provide to the Company.

When to File. If you elect to make a 83(b) Election, it must be filed with the U.S. Internal Revenue Service within thirty (30) days of the date of grant. The 30-day period is an absolute deadline that cannot be waived under any circumstances.

How to File. The filings with the U.S. Internal Revenue Service should be made by registered or certified mail, return receipt requested, in order to maintain proof of a timely filing.

Attached is a sample cover letter to the U.S. Internal Revenue Service and sample 83(b) Election. All incomplete areas should be filled out and reviewed by you and your tax advisor.

After Filing. You may eventually receive date-stamped copies of the 83(b) Election from the IRS, although the IRS often will not return date-stamped copies. Keep one copy for your records and send another copy to the Company for its records. You will need to confirm with your tax advisor whether any signed copies of the 83(b) Election are to be filed with your applicable income tax returns for the calendar year in which the transfer of Shares occurs.

The Company must also receive copies of the following for its files:


•	A copy of your original signed 83(b) Election form


•	A copy of your certified mail receipt


•	A copy of the signed 83(b) Election form that is date stamped by the IRS (if returned to you by the IRS)

Your Acknowledgements: By accepting the Restricted Stock, you acknowledge that the foregoing information, and the attached sample cover letter and sample 83(b) Election form are provided solely for your convenience and should not be construed as a recommendation from the Company (or any of its affiliates or agents) or tax advice. You further acknowledge that the Company is not responsible for completing or filing your 83(b) Election and you are strenuously encouraged to seek your own independent tax/legal advice with respect to the award of Restricted Stock, whether an 83(b) Election is appropriate in your situation, and the accurate completion and timely filing of the 83(b) Election. You further acknowledge that the 83(b) Election must be filed with the IRS within 30 days of the date of grant of the Restricted Stock. Failure to file within that time will render the election void and you may recognize ordinary taxable income as your vesting restrictions lapse.

____________, 20__

RETURN RECEIPT REQUESTED

U.S. Department of the Treasury

Internal Revenue Service Center

__________________________

Re: Election Under Section 83(b) of the U.S. Internal Revenue Code

Dear Sir or Madam:

Enclosed please find an executed form of election under Section 83(b) of the Internal Revenue Code of 1986, as amended, relating to my recent grant of ____________ shares of common stock of Maxim Integrated Products, Inc.

My social security number is ____________.

Also enclosed is a copy of the 83(b) election and a stamped, self-addressed envelope. Please acknowledge receipt of these materials by stamping the enclosed copy of the 83(b) election with the date of receipt and returning it to me using the stamped, self-addressed envelope.

Thank you for your attention to this matter.



	Sincerely,
	[Name]
	Residence Address:

Enclosures

SECTION 83(b) ELECTION

The undersigned hereby elects pursuant to Section 83(b) of the U.S. Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares. The following information is supplied in accordance with U.S. Treasury Regulation § 1.83-2:


1.	The name, social security number, address of the undersigned, and the taxable year for which this election is being made are:



Name:
Address:

Social Security No.:
Taxable Year


2.	The property which is the subject of this election: ______________ shares of common stock of Maxim Integrated Products, Inc. (the “Company”).


3.	The property was transferred to the undersigned on: ________________.


4.	The property is subject to the following restrictions: The shares are subject to forfeiture if certain vesting conditions are not met, including if the undersigned does not continue in employment or service through specified vesting dates.


5.	The fair market value of the property at the time of transfer (determined without regard to any restrictions other than nonlapse restrictions as defined in Treasury Regulation §1.83-3(h)) is: ___________


6.	For the property transferred, the undersigned paid: _____.


7.	The amount to include in gross income is: $__________.

The undersigned taxpayer will file this election with the Internal Revenue Service Office with which the taxpayer files his or her annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election will also be furnished to the person for whom the services were performed. The undersigned is the person performing services in connection with which the property was transferred.



Dated: , 2020		By:
		Taxpayer Name:



Date:	October 28, 2020	/s/ Tunç Doluca

		Tunç Doluca
		President and Chief Executive Officer


1.	I have reviewed this quarterly report on Form 10-Q of Maxim Integrated Products, Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date:	October 28, 2020	/s/ Brian C. White
		Brian C. White
		Senior Vice President, Chief Financial Officer


1.	the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and


2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.



	By:	/s/ Tunç Doluca

		Tunç Doluca President and Chief Executive Officer



	By:	/s/ Brian C. White
		Brian C. White Senior Vice President, Chief Financial Officer