(Mark
One)
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þ
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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For
the fiscal year ended December 31, 2009
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or
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o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
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For
the transition period from
to
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Delaware
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94-3112828
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
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4440
El Camino Real
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94022
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Los
Altos, California
(Address
of principal executive offices)
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(Zip
Code)
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Title of Each Class
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Name of Each Exchange on Which
Registered
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Common
Stock, $.001 Par Value
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The
NASDAQ Stock Market LLC
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Preferred
Share Purchase Rights
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(The
NASDAQ Global Select Market)
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Large
accelerated filer
þ
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Accelerated
filer
o
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Non-accelerated
filer
o
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Smaller
reporting company
o
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(Do
not check if a smaller reporting company)
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2
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3
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4
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11
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24
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25
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25
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25
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25
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28
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44
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Item 8
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45
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95
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95
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96
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EX-2.1 | ||
EX-10.13 | ||
EX-21.1 | ||
EX-23.1 | ||
EX-31.1 | ||
EX-31.2 | ||
EX-32.1 | ||
EX-32.2 |
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•
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Outcome
and effect of current and potential future intellectual property
litigation;
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•
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Litigation
expenses;
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•
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Resolution
of the governmental agency matters involving
us;
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•
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Protection
of intellectual property;
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•
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Amounts
owed under licensing agreements;
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•
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Terms
of our licenses;
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•
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Indemnification
and technical support obligations;
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•
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Success
in the markets of our or our licensees’
products;
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•
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Sources
of competition;
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•
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Operating
results;
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•
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Research
and development costs and improvements in
technology;
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•
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Sources,
amounts and concentration of revenue, including
royalties;
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•
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Effects
of changes in the economy and credit market on our industry and
business;
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•
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Deterioration
of financial health of commercial counterparties and their ability to meet
their obligations to us;
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•
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Restructuring
activities;
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•
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Growth
in our business;
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•
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Product
development;
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•
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Pricing
policies of our licensees;
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•
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Success
in renewing license agreements;
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•
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Engineering,
marketing and general and administration
expenses;
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•
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Contract
revenue;
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•
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International
licenses and operations, including our design facility in Bangalore,
India;
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•
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Acquisitions,
mergers or strategic transactions;
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•
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Issuances
of our securities, which could involve restrictive covenants or be
dilutive to our existing
stockholders;
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•
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Effective
tax rates;
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•
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Realization
of deferred tax assets/release of deferred tax valuation
allowance;
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•
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Methods,
estimates and judgments in accounting
policies;
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•
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Adoption
of new accounting pronouncements;
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•
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Ability
to identify, attract, motivate and retain qualified
personnel;
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•
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Trading
price of our Common Stock;
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•
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Corporate
governance;
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•
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Consequences
of the lawsuits related to the stock option
investigation;
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•
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The
level and terms of our outstanding
debt;
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•
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Internal
control environment;
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•
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Interest
and other income, net; and
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•
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Likelihood
of paying dividends or repurchasing
stock.
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Advanced
Micro Devices Inc.
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AMD
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ARM
Holdings plc
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ARM
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Elpida
Memory, Inc.
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Elpida
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Fujitsu
Limited
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Fujitsu
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Global
Lighting Technologies, Inc.
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GLT
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Hewlett-Packard
Company
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Hewlett-Packard
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Hynix
Semiconductor, Inc.
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Hynix
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Infineon
Technologies AG
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Infineon
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Inotera
Memories, Inc.
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Inotera
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Intel
Corporation
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Intel
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International
Business Machines Corporation
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IBM
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Joint
Electronic Device Engineering Councils
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JEDEC
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Juniper
Networks, Inc.
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Juniper
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Micron
Technologies, Inc.
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Micron
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Nanya
Technology Corporation
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Nanya
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NEC
Electronics Corporation
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NEC
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NVIDIA
Corporation
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NVIDIA
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Optical
Internetworking Forum
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OIF
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Qimonda
AG (formerly Infineon’s DRAM operations)
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Qimonda
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Panasonic
Corporation
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Panasonic
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Peripheral
Component Interconnect — Special Interest Group
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PCI-SIG
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Renesas
Technology Corporation
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Renesas
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Research
Data Group, Inc.
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RDG
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Samsung
Electronics Co., Ltd.
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Samsung
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Sony
Computer Electronics
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Sony
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Spansion,
Inc.
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Spansion
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Synopsys
Inc.
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Synopsys
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Texas
Instruments Inc.
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Texas
Instruments
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Toshiba
Corporation
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Toshiba
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Velio
Communications
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Velio
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Name
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Age
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Position and Business
Experience
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Kevin
S.
Donnelly
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48
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Senior
Vice President, IP Strategy. Mr. Donnelly joined us in 1993.
Mr. Donnelly has served in his current position since November 2008.
From March 2006 to November 2008, Mr. Donnelly served as our
Senior Vice President, Engineering. From February 2005 to March 2006,
Mr. Donnelly served as co-vice president of Engineering. From October
2002 to February 2005 he served as vice president, Logic Interface
Division. Mr. Donnelly held various engineering and management
positions before becoming vice president, Logic Interface Division in
October 2002. Before joining us, Mr. Donnelly held engineering
positions at National Semiconductor, Sipex, and Memorex, over an eight
year period. He holds a B.S. in Electrical Engineering and Computer
Sciences from the University of California, Berkeley, and an M.S. in
Electrical Engineering from San Jose State University.
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Sharon
E.
Holt
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45
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Senior
Vice President, Licensing and Marketing. Ms. Holt has served as our
senior vice president, Licensing and Marketing (formerly titled Senior
Vice President, Worldwide Sales, Licensing and Marketing) since joining us
in August 2004. From November 1999 to July 2004, Ms. Holt held
various positions at Agilent Technologies, Inc., an electronics
instruments and controls company, most recently as vice president and
general manager, Americas Field Operations, Semiconductor Products Group.
Prior to Agilent Technologies, Inc., Ms. Holt held various
engineering, marketing, and sales management positions at Hewlett-Packard
Company, a hardware manufacturer. Ms. Holt holds a B.S. in Electrical
Engineering, with a minor in Mathematics, from the Virginia Polytechnic
Institute and State University.
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Harold
Hughes
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64
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Chief
Executive Officer and President. Mr. Hughes has served as our chief
executive officer and president since January 2005 and as a director since
June 2003. He served as a United States Army Officer from 1969 to 1972
before starting his private sector career with Intel Corporation.
Mr. Hughes held a variety of positions within Intel Corporation
from 1974 to 1997, including treasurer, vice president of Intel Capital,
chief financial officer, and vice president of Planning and Logistics.
Following his tenure at Intel, Mr. Hughes was the chairman and chief
executive officer of Pandesic, LLC. He holds a B.A. from the University of
Wisconsin and an M.B.A. from the University of Michigan. He also serves as
a director of Berkeley Technology, Ltd.
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Thomas
Lavelle
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59
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Senior
Vice President and General Counsel. Mr. Lavelle has served in his
current position since December 2006. Previous to that, Mr. Lavelle
served as vice president and general counsel at Xilinx, one of the world’s
leading suppliers of programmable chips. Mr. Lavelle joined Xilinx in
1999 after spending more than 15 years at Intel Corporation where he
held various positions in the legal department.
Mr. Lavelle earned a J.D. from Santa Clara University
School of Law and a B.A. from the University of California at Los
Angeles.
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Name
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Age
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Position and Business
Experience
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Satish
Rishi
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50
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Senior
Vice President, Finance and Chief Financial Officer. Mr. Rishi joined
us in his current position in April 2006. Prior to joining us,
Mr. Rishi held the position of executive vice president of Finance
and chief financial officer of Toppan Photomasks, Inc., (formerly DuPont
Photomasks, Inc.) one of the world’s leading photomask providers, from
November 2001 to April 2006. During his 20-year career,
Mr. Rishi has held senior financial management positions at
semiconductor and electronic manufacturing companies. He served as vice
president and assistant treasurer at Dell Inc. Prior to Dell,
Mr. Rishi spent 13 years at Intel Corporation, where he held
financial management positions both in the United States and overseas,
including assistant treasurer. Mr. Rishi holds a B.S. with honors in
Mechanical Engineering from Delhi University in Delhi, India and an M.B.A.
from the University of California at Berkeley’s Haas School of Business.
He also serves as a director of Measurement Specialties, Inc.
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Michael
Schroeder
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50
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Vice
President, Human Resources. Mr. Schroeder has served as our vice
president, Human Resources since joining us in June 2004. From April 2003
to May 2004, Mr. Schroeder was vice president, Human Resources at
DigitalThink, Inc., an online service company. From August 2000 to August
2002, Mr. Schroeder served as vice president, Human Resources at
Alphablox Corporation, a software company. From August 1992 to August
2000, Mr. Schroeder held various positions at Synopsys, Inc., a
software and programming company, including vice president, California
Site Human Resources, group director Human Resources, director Human
Resources and employment manager. Mr. Schroeder attended the
University of Wisconsin, Milwaukee and studied Russian.
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Martin
Scott, Ph.D.
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54
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Senior
Vice President, Research and Technology Development. Dr. Scott has
served in his current position (formerly titled Senior Vice President,
Engineering) since December 2006. Dr. Scott joined us from
PMC-Sierra, Inc., a provider of broadband communications and storage
integrated circuits, where he was most recently vice president and general
manager of its Microprocessor Products Division from March 2006.
Dr. Scott was the vice president and general manager for the
I/O Solutions Division (which was purchased by PMC-Sierra) of Avago
Technologies Limited, an analog and mixed signal semiconductor components
and subsystem company, from October 2005 to March 2006. Dr. Scott
held various positions at Agilent Technologies, including as vice
president and general manager for the I/O Solutions division from October
2004 to October 2005, when the division was purchased by Avago
Technologies, vice president and general manager of the ASSP Division from
March 2002 until October 2004, and, before that, Network Products
operation manager. Dr. Scott started his career in 1981 as a member
of the technical staff at Hewlett Packard Laboratories and held various
management positions at Hewlett Packard and was appointed ASIC business
unit manager in 1998. He earned a B.S. from Rice University and holds both
an M.S. and Ph.D. from Stanford University.
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Laura
S.
Stark
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41
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Senior
Vice President, Corporate Development. Ms. Stark joined us in 1996.
Ms. Stark has served in her current position since May 2008. From
February 2005 to May 2008, Ms. Stark headed up our Platform Solutions
Group. From October 2002 to February 2005, Ms. Stark served as our
vice president, Memory Interface Division. Ms. Stark has served as
strategic accounts manager, and held the positions of strategic accounts
director and vice president, Alliances and Infrastructure, before assuming
the position of vice president, Memory Interface Division in October 2002.
Prior to joining Rambus, Ms. Stark held various positions in the
semiconductor products division of Motorola, a communications equipment
company, during a six year tenure, including technical sales engineer for
the Apple sales team and field application engineer for the Sun and SGI
sales teams. Ms. Stark holds a B.S. in Electrical Engineering from
the Massachusetts Institute of Technology.
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•
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competition
faced by a company in its particular
industry;
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•
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the
timely introduction and market acceptance of a company’s
products;
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•
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the
engineering, sales and marketing and management capabilities of a
company;
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•
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technical
challenges unrelated to our innovations faced by a company in developing
its products;
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•
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the
financial and other resources of a
company;
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•
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the
supply of semiconductors from our memory and chip interface licensees in
sufficient quantities and at commercially attractive
prices;
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•
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the
ability to establish the prices at which the chips containing our chip
interfaces are made available to system companies;
and
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•
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the
degree to which our licensees promote our innovations to their
customers.
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•
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completed
before changes in the semiconductor industry render them
obsolete;
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•
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available
when system companies require these innovations;
and
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•
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sufficiently
compelling to cause semiconductor manufacturers to enter into licensing
arrangements with us for these new
technologies.
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•
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semiconductor
and system companies’ acceptance of our chip interface
products;
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•
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the
success of high volume consumer applications, such as the Sony
PLAYSTATION® 3;
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•
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the
dependence of our royalties upon fluctuating sales volumes and prices of
licensed chips that include our
technology;
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•
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the
seasonal shipment patterns of systems incorporating our chip interface
products;
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•
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the
loss of any strategic relationships with system companies or
licensees;
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•
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semiconductor
or system companies discontinuing major products incorporating our chip
interfaces;
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•
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the
unpredictability of litigation results or settlements and the timing and
amount of any litigation expenses;
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•
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changes
in our customers’ development schedules and levels of expenditure on
research and development;
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•
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our
licensees terminating or failing to make payments under their current
contracts or seeking to modify such contracts, whether voluntarily or as a
result of financial difficulties;
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•
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the
results of our efforts to expand into new target markets, such as with our
Lighting Technology Division;
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•
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changes
in our strategies, including changes in our licensing focus and/or
acquisitions of companies with business models or target markets different
from our own; and
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•
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changes
in the economy and credit market and their effects upon demand for our
technology and the products of our
licensees.
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•
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export
controls, tariffs, import and licensing restrictions and other trade
barriers;
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•
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profits,
if any, earned abroad being subject to local tax laws and not being
repatriated to the United States or, if repatriation is possible, limited
in amount;
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•
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treatment
of revenue from international sources and changes to tax codes, including
being subject to foreign tax laws and being liable for paying withholding,
income or other taxes in foreign
jurisdictions;
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•
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foreign
government regulations and changes in these
regulations;
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•
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social,
political and economic instability;
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•
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lack
of protection of our intellectual property and other contract rights by
jurisdictions in which we may do business to the same extent as the laws
of the United States;
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•
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changes
in diplomatic and trade
relationships;
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•
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cultural
differences in the conduct of business both with licensees and in
conducting business in our international facilities and international
sales offices;
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•
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operating
centers outside the United States;
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•
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hiring,
maintaining and managing a workforce remotely and under various legal
systems; and
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•
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geo-political
issues.
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•
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the
key personnel of the acquired entity or business may decide not to work
for us or may not perform according to our
expectations;
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•
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we
may experience additional legal, financial and accounting challenges and
complexities in areas such as licensing, tax planning, cash management and
financial reporting;
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•
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our
ongoing business may be disrupted or receive insufficient management
attention;
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•
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we
may not be able to recognize the financial benefits we anticipated, both
with respect to our ongoing business and the acquired entity or
business;
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•
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our
increasing international presence resulting from acquisitions may increase
our exposure to international currency, tax and political risks;
and
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•
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our
lack of experience in new markets, products or technologies may cause us
to fail to recognize the forecasted financial and strategic benefits of
the acquisition.
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•
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new
litigation or developments in current litigation, including an unfavorable
outcome to us from court proceedings relating to our litigation with
Hynix, Micron, Nanya and NVIDIA and reaction to any settlements that we
enter into with former litigants, such as
Samsung;
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•
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any
progress, or lack of progress, real or perceived, in the development of
products that incorporate our
innovations;
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•
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our
signing or not signing new
licensees;
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•
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announcements
of our technological innovations or new products by us, our licensees or
our competitors;
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•
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positive
or negative reports by securities analysts as to our expected financial
results;
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•
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developments
with respect to patents or proprietary rights and other events or factors;
and
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•
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issuance
of additional securities by us, such as our issuance of approximately 9.6
million shares of common stock to Samsung in connection with our
settlement agreement in January
2010.
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•
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our
ability to obtain additional financing in the future for working capital,
capital expenditures, acquisitions, litigation, general corporate or other
purposes may be limited;
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•
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a
substantial portion of our cash flows from operations will be dedicated to
the payment of the principal of our indebtedness as we are required to pay
the principal amount of our convertible notes in cash upon conversion if
specified conditions are met or when
due;
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•
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if
upon any conversion of our notes we are required to satisfy our conversion
obligation with shares of our common stock or we are required to pay a
“make-whole” premium with shares of our common stock, our existing
stockholders’ interest in us would be diluted;
and
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•
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we
may be more vulnerable to economic downturns, less able to withstand
competitive pressures and less flexible in responding to changing business
and economic conditions.
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•
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our
board of directors is authorized, without prior stockholder approval, to
create and issue preferred stock, commonly referred to as “blank check”
preferred stock, with rights senior to those of common
stock;
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•
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our
board of directors is staggered into two classes, only one of which is
elected at each annual meeting;
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•
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stockholder
action by written consent is
prohibited;
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•
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nominations
for election to our board of directors and the submission of matters to be
acted upon by stockholders at a meeting are subject to advance notice
requirements;
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•
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certain
provisions in our bylaws and certificate of incorporation such as notice
to stockholders, the ability to call a stockholder meeting, advance notice
requirements and action of stockholders by written consent may only be
amended with the approval of stockholders holding 66 2/3% of our
outstanding voting stock;
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•
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the
ability of our stockholders to call special meetings of stockholders is
prohibited; and
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•
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our
board of directors is expressly authorized to make, alter or repeal our
bylaws.
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•
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any
current or future U.S. or foreign patent applications will be approved and
not be challenged by third parties;
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•
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our
issued patents will protect our intellectual property and not be
challenged by third parties;
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•
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the
validity of our patents will be
upheld;
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•
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our
patents will not be declared
unenforceable;
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•
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the
patents of others will not have an adverse effect on our ability to do
business;
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•
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Congress
or the U.S. courts or foreign countries will not change the nature or
scope of rights afforded patents or patent owners or alter in an adverse
way the process for seeking
patents;
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|
•
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changes
in law will not be implemented that will affect our ability to protect and
enforce our patents and other intellectual
property;
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•
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new
legal theories and strategies utilized by our competitors will not be
successful; or
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•
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others
will not independently develop similar or competing chip interfaces or
design around any patents that may be issued to
us.
|
Number
of
Offices
Under Lease
|
Location
|
Primary Use
|
3
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United
States
Los
Altos, CA (current Headquarters)
Chapel
Hill, NC
Cleveland,
OH
|
Executive
and administrative offices, research and development, sales and marketing
and service functions
|
1
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Bangalore,
India
|
Administrative
offices, research and
development
and service functions
|
1
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Tokyo,
Japan
|
Business
development
|
1
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Taipei,
Taiwan
|
Business
development
|
1
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Pforzheim,
Germany
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Business
development
|
|
Year Ended
December 31, 2009
|
Year Ended
December 31, 2008
|
||||||||||||||
|
High
|
Low
|
High
|
Low
|
||||||||||||
First
Quarter
|
$ | 18.70 | $ | 5.99 | $ | 26.41 | $ | 14.64 | ||||||||
Second
Quarter
|
$ | 19.65 | $ | 9.07 | $ | 24.85 | $ | 18.61 | ||||||||
Third
Quarter
|
$ | 19.94 | $ | 14.33 | $ | 18.90 | $ | 12.29 | ||||||||
Fourth
Quarter
|
$ | 25.54 | $ | 15.53 | $ | 16.59 | $ | 4.95 |
*
|
$100
invested on 12/31/04 in stock or index, including reinvestment of
dividends.
|
12/04 | 12/05 | 12/06 | 12/07 | 12/08 | 12/09 | |||||||||||||||||||
Rambus
Inc.
|
100.00 | 70.39 | 82.30 | 91.04 | 69.22 | 106.09 | ||||||||||||||||||
NASDAQ
Composite
|
100.00 | 101.33 | 114.01 | 123.71 | 73.11 | 105.61 | ||||||||||||||||||
RDG
Semiconductor Composite
|
100.00 | 111.52 | 105.29 | 118.19 | 59.74 | 87.55 |
|
Years Ended
December 31,
|
|||||||||||||||||||
|
2009
|
2008 (1)
|
2007 (1)
|
2006 (1) (2)
|
2005 (2)
|
|||||||||||||||
(In
thousands, except per share amounts)
|
||||||||||||||||||||
Total
revenue
|
$ | 113,007 | $ | 142,494 | $ | 179,940 | $ | 195,324 | $ | 157,198 | ||||||||||
Net
income (loss)
|
$ | (92,186 | ) | $ | (199,110 | ) | $ | (34,221 | ) | $ | (18,006 | ) | $ | 6,914 | ||||||
Net
income (loss) per share:
|
||||||||||||||||||||
Basic
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) | $ | (0.17 | ) | $ | 0.07 | ||||||
Diluted
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) | $ | (0.17 | ) | $ | 0.07 | ||||||
Consolidated
Balance Sheet Data:
|
||||||||||||||||||||
Cash,
cash equivalents and marketable securities
|
$ | 460,193 | $ | 345,853 | $ | 440,882 | $ | 436,341 | $ | 355,390 | ||||||||||
Total
assets
|
$ | 555,869 | $ | 397,370 | $ | 617,963 | $ | 591,295 | $ | 497,141 | ||||||||||
Convertible
notes
|
$ | 248,044 | $ | 125,474 | $ | 135,214 | $ | 124,719 | $ | 115,039 | ||||||||||
Stockholders’
equity
|
$ | 255,327 | $ | 232,941 | $ | 422,486 | $ | 404,247 | $ | 349,616 |
(1)
|
Adjusted
to reflect adoption of the new FASB accounting guidance. Refer to Note 3,
“Retrospective Adoption of New Accounting Pronouncement,” of Notes to
Consolidated Financial Statements for further
discussion.
|
(2)
|
The
year ended December 31, 2006 includes adjustments for the new FASB
accounting guidance to decrease total assets by $13,322 and convertible
notes by $35,281 and increase stockholders’ equity by $21,959. The year
ended December 31, 2005 includes additional interest expense
(including amortization of debt issuance costs) of $12,253, decrease to
interest income and other income (expense), net of $24,732, decrease to
provision for income taxes of $14,959, decrease to net income of $22,026,
decrease to basic net income per share of $0.22, decrease to diluted net
income per share of $0.21, decrease to total assets of $18,812, decrease
to convertible notes of $44,961 and increase to stockholders’ equity of
$26,149.
|
|
Years Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Revenue:
|
||||||||||||
Royalties
|
95.6 | % | 89.1 | % | 85.8 | % | ||||||
Contract
revenue
|
4.4 | % | 10.9 | % | 14.2 | % | ||||||
Total
revenue
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Costs
and expenses:
|
||||||||||||
Cost
of contract revenue*
|
6.1 | % | 15.0 | % | 15.1 | % | ||||||
Research
and development*
|
59.5 | % | 53.5 | % | 46.1 | % | ||||||
Marketing,
general and administrative*
|
113.4 | % | 87.1 | % | 67.0 | % | ||||||
Costs
(recoveries) of restatement and related legal activities
|
(11.9 | )% | 2.3 | % | 10.8 | % | ||||||
Restructuring
costs*
|
— | % | 2.9 | % | — | % | ||||||
Impairment
of intangible asset
|
— | % | 1.5 | % | — | % | ||||||
Total
costs and expenses
|
167.1 | % | 162.3 | % | 139.0 | % | ||||||
Operating
loss
|
(67.1 | )% | (62.3 | )% | (39.0 | )% | ||||||
Interest income and other income,
net
|
3.6 | % | 10.7 | % | 12.1 | % | ||||||
Interest expense
|
(18.6 | )% | (8.3 | )% | (6.1 | )% | ||||||
Interest
and other income (expense), net
|
(15.0 | )% | 2.4 | % | 6.0 | % | ||||||
Loss
before income taxes
|
(82.1 | )% | (59.9 | )% | (33.0 | )% | ||||||
Provision
for (benefit from) income taxes
|
(0.5 | )% | 79.8 | % | (14.0 | )% | ||||||
Net
loss
|
(81.6 | )% | (139.7 | )% | (19.0 | )% | ||||||
*
Includes stock-based compensation:
|
||||||||||||
Cost
of contract revenue
|
0.9 | % | 3.6 | % | 3.3 | % | ||||||
Research
and development
|
8.6 | % | 9.5 | % | 9.0 | % | ||||||
Marketing,
general and administrative
|
18.5 | % | 13.0 | % | 12.6 | % | ||||||
Restructuring
costs
|
— | % | 0.4 | % | — | % |
Years Ended December 31,
|
2008
to 2009
|
2007
to 2008
|
||||||||||||||||||
2009
|
2008
|
2007
|
Change
|
Change
|
||||||||||||||||
(Dollars
in millions)
|
||||||||||||||||||||
Total
Revenue
|
||||||||||||||||||||
Royalties
|
$ | 108.0 | $ | 126.9 | $ | 154.3 | (14.9 | )% | (17.8 | )% | ||||||||||
Contract
revenue
|
5.0 | 15.6 | 25.6 | (67.9 | )% | (39.2 | )% | |||||||||||||
Total
revenue
|
$ | 113.0 | $ | 142.5 | $ | 179.9 | (20.7 | )% | (20.8 | )% |
Years Ended December 31,
|
2008
to 2009
|
2007
to 2008
|
||||||||||||||||||
2009
|
2008
|
2007
|
Change
|
Change
|
||||||||||||||||
(Dollars
in millions)
|
||||||||||||||||||||
Engineering
costs
|
||||||||||||||||||||
Cost
of contract revenue
|
$ | 5.9 | $ | 16.1 | $ | 21.2 | (63.6 | )% | (24.0 | )% | ||||||||||
Stock-based
compensation
|
1.0 | 5.2 | 5.9 | (80.7 | )% | (12.2 | )% | |||||||||||||
Total
cost of contract revenue
|
6.9 | 21.3 | 27.1 | (67.7 | )% | (21.5 | )% | |||||||||||||
Research
and development
|
57.5 | 62.7 | 66.7 | (8.3 | )% | (5.9 | )% | |||||||||||||
Stock-based
compensation
|
9.7 | 13.5 | 16.2 | (28.0 | )% | (16.7 | )% | |||||||||||||
Total
research and development
|
67.2 | 76.2 | 82.9 | (11.8 | )% | (8.0 | )% | |||||||||||||
Total
engineering costs
|
$ | 74.1 | $ | 97.5 | $ | 110.0 | (24.0 | )% | (11.3 | )% |
Years Ended December 31,
|
2008
to 2009
|
2007
to 2008
|
||||||||||||||||||
2009
|
2008
|
2007
|
Change
|
Change
|
||||||||||||||||
(Dollars
in millions)
|
||||||||||||||||||||
Marketing,
general and administrative costs
|
||||||||||||||||||||
Marketing,
general and administrative costs
|
$ | 51.8 | $ | 49.9 | $ | 58.4 | 3.8 | % | (14.7 | )% | ||||||||||
Litigation
expense
|
55.5 | 55.7 | 39.5 | (0.3 | )% | 41.1 | % | |||||||||||||
Stock-based
compensation
|
20.9 | 18.5 | 22.7 | 12.8 | % | (18.5 | )% | |||||||||||||
Total
marketing, general and administrative costs
|
$ | 128.2 | $ | 124.1 | $ | 120.6 | 3.3 | % | 2.9 | % |
Years Ended December 31,
|
2008
to 2009
|
2007
to 2008
|
||||||||||||||||||
2009
|
2008
|
2007
|
Change
|
Change
|
||||||||||||||||
(Dollars
in millions)
|
||||||||||||||||||||
Impairment
of intangible asset
|
$ | — | $ | 2.2 | $ | — | N/A | * | N/A | * |
Years Ended December 31,
|
2008
to 2009
|
2007
to 2008
|
||||||||||||||||||
2009
|
2008
|
2007
|
Change
|
Change
|
||||||||||||||||
(Dollars
in millions)
|
||||||||||||||||||||
Interest
income and other income, net
|
$ | 4.1 | $ | 15.2 | $ | 21.7 | (73.1 | )% | (30.1 | )% | ||||||||||
Interest
expense
|
$ | (21.0 | ) | $ | (11.8 | ) | $ | (11.0 | ) | 77.5 | % | 7.2 | % | |||||||
Interest
and other income (expense), net
|
$ | (16.9 | ) | $ | 3.4 | $ | 10.7 |
NM*
|
(68.4 | )% |
|
December 31,
2009
|
December 31,
2008
|
||||||
(In
millions)
|
||||||||
Cash
and cash equivalents
|
$ | 289.1 | $ | 116.3 | ||||
Marketable
securities
|
171.1 | 229.6 | ||||||
Total
cash, cash equivalents, and marketable securities
|
$ | 460.2 | $ | 345.9 |
|
Years Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
(In
millions)
|
||||||||||||
Net
cash provided by (used in) operating activities
|
$ | (40.6 | ) | $ | (38.5 | ) | $ | 5.3 | ||||
Net
cash provided by investing activities
|
$ | 24.5 | $ | 82.7 | $ | 33.2 | ||||||
Net
cash provided by (used in) financing activities
|
$ | 188.9 | $ | (47.5 | ) | $ | 7.6 |
|
Total
|
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
|||||||||||||||||||||
Contractual
obligations(1)
|
||||||||||||||||||||||||||||
Operating
leases
|
$ | 50,504 | $ | 7,304 | $ | 4,654 | $ | 4,737 | $ | 4,313 | $ | 4,444 | $ | 25,052 | ||||||||||||||
Convertible
notes
|
309,450 | 136,950 | — | — | — | 172,500 | — | |||||||||||||||||||||
Interest
payments related to convertible notes
|
38,432 | 8,625 | 8,625 | 8,625 | 8,625 | 3,932 | — | |||||||||||||||||||||
Total
|
$ | 398,386 | $ | 152,879 | $ | 13,279 | $ | 13,362 | $ | 12,938 | $ | 180,876 | $ | 25,052 |
(1)
|
The
above table does not reflect possible payments in connection with
uncertain tax benefits of approximately $10.4 million, including
$8.4 million recorded as a reduction of long-term deferred tax assets
and $2.0 million in long-term income taxes payable, as of
December 31, 2009. As noted in Note 11, “Income Taxes,” of Notes
to Consolidated Financial Statements, although it is possible that some of
the unrecognized tax benefits could be settled within the next
12 months, we cannot reasonably estimate the outcome at this
time.
|
December 31, 2009
|
||||||||||||||||||||
(dollars
in thousands)
|
Fair Value
|
Book Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Weighted
Rate
of
Return
|
|||||||||||||||
Money
Market Funds
|
$ | 280,908 | $ | 280,908 | $ | — | $ | — | 0.01 | % | ||||||||||
U.S.
Government Bonds and Notes
|
138,829 | 138,521 | 377 | (69 | ) | 1.09 | % | |||||||||||||
Corporate
Notes, Bonds, and Commercial Paper
|
32,291 | 32,222 | 70 | (1 | ) | 1.89 | % | |||||||||||||
Total
cash equivalents and marketable securities
|
452,028 | 451,651 | 447 | (70 | ) | |||||||||||||||
Cash
|
8,165 | 8,165 | — | — | ||||||||||||||||
Total
cash, cash equivalents and marketable securities
|
$ | 460,193 | $ | 459,816 | $ | 447 | $ | (70 | ) |
December 31, 2008
|
||||||||||||||||||||
(dollars
in thousands)
|
Fair Value
|
Book Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Weighted
Rate
of
Return
|
|||||||||||||||
Money
Market Funds
|
$ | 110,732 | $ | 110,732 | $ | — | $ | — | 0.90 | % | ||||||||||
Municipal
Bonds and Notes
|
1,000 | 1,000 | — | — | 3.85 | % | ||||||||||||||
U.S.
Government Bonds and Notes
|
149,304 | 148,178 | 1,126 | — | 2.79 | % | ||||||||||||||
Corporate
Notes, Bonds, and Commercial Paper
|
79,308 | 79,275 | 197 | (164 | ) | 3.06 | % | |||||||||||||
Total
cash equivalents and marketable securities
|
340,344 | 339,185 | 1,323 | (164 | ) | |||||||||||||||
Cash
|
5,509 | 5,509 | — | — | ||||||||||||||||
Total
cash, cash equivalents and marketable securities
|
$ | 345,853 | $ | 344,694 | $ | 1,323 | $ | (164 | ) |
(in
thousands)
|
Fair Value
|
Fair
Value
Given
a
10%
Increase
in Market
Prices
|
Fair
Value Given
a
10%
Decrease
in Market
Prices
|
|||||||||
Zero
Coupon Convertible Senior Notes due 2010
|
$ | 142,599 | $ | 156,859 | $ | 128,339 | ||||||
5%
Convertible Senior Notes due 2014
|
261,160 | 287,276 | 235,044 | |||||||||
Total
convertible notes
|
$ | 403,759 | $ | 444,135 | $ | 363,383 |
|
Page
|
49
|
|
50
|
|
51
|
|
52
|
|
53
|
|
54
|
|
94
|
|
December 31,
|
|||||||
|
2009
|
2008
|
||||||
(In
thousands, except shares and per share amounts)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 289,073 | $ | 116,241 | ||||
Marketable
securities
|
171,120 | 229,612 | ||||||
Accounts
receivable
|
949 | 1,503 | ||||||
Prepaids
and other current assets
|
8,700 | 8,486 | ||||||
Deferred
taxes
|
129 | 88 | ||||||
Total
current assets
|
469,971 | 355,930 | ||||||
Restricted
cash
|
639 | 632 | ||||||
Deferred
taxes, long term
|
2,034 | 1,857 | ||||||
Intangible
assets, net
|
21,660 | 7,244 | ||||||
Property
and equipment, net
|
38,966 | 22,290 | ||||||
Goodwill
|
15,554 | 4,454 | ||||||
Other
assets
|
7,045 | 4,963 | ||||||
Total
assets
|
$ | 555,869 | $ | 397,370 | ||||
LIABILITIES
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 8,972 | $ | 6,374 | ||||
Accrued
salaries and benefits
|
6,435 | 9,859 | ||||||
Accrued
litigation expenses
|
5,147 | 14,265 | ||||||
Income
taxes payable
|
486 | 638 | ||||||
Non-cash
obligation for construction in progress
|
25,100 | — | ||||||
Other
accrued liabilities
|
4,020 | 4,965 | ||||||
Convertible
notes
|
136,032 | — | ||||||
Total
current liabilities
|
186,192 | 36,101 | ||||||
Convertible
notes
|
112,012 | 125,474 | ||||||
Long-term
income taxes payable
|
1,994 | 1,953 | ||||||
Other
long-term liabilities
|
344 | 901 | ||||||
Total
liabilities
|
300,542 | 164,429 | ||||||
Commitments
and contingencies
|
||||||||
STOCKHOLDERS’
EQUITY
|
||||||||
Convertible
preferred stock, $.001 par value:
|
||||||||
Authorized:
5,000,000 shares; Issued and outstanding: no shares at December 31, 2009
and December 31, 2008
|
— | — | ||||||
Common
Stock, $.001 par value:
|
||||||||
Authorized:
500,000,000 shares; Issued and outstanding 105,934,157 shares at December
31, 2009 and 103,803,006 shares at December 31, 2008
|
106 | 104 | ||||||
Additional
paid in capital
|
818,992 | 703,640 | ||||||
Accumulated
deficit
|
(563,858 | ) | (471,672 | ) | ||||
Accumulated
other comprehensive income, net
|
87 | 869 | ||||||
Total
stockholders’ equity
|
255,327 | 232,941 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 555,869 | $ | 397,370 |
|
Years Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
(In
thousands, except per share amounts)
|
||||||||||||
Revenue:
|
||||||||||||
Royalties
|
$ | 108,001 | $ | 126,910 | $ | 154,306 | ||||||
Contract
revenue
|
5,006 | 15,584 | 25,634 | |||||||||
Total
revenue
|
113,007 | 142,494 | 179,940 | |||||||||
Costs
and expenses:
|
||||||||||||
Cost
of contract revenue*
|
6,876 | 21,303 | 27,124 | |||||||||
Research
and development*
|
67,252 | 76,222 | 82,877 | |||||||||
Marketing,
general and administrative*
|
128,199 | 124,077 | 120,597 | |||||||||
Costs
(recoveries) of restatement and related legal activities
|
(13,458 | ) | 3,262 | 19,457 | ||||||||
Restructuring
costs*
|
— | 4,185 | — | |||||||||
Impairment
of intangible asset
|
— | 2,158 | — | |||||||||
Total
costs and expenses
|
188,869 | 231,207 | 250,055 | |||||||||
Operating
loss
|
(75,862 | ) | (88,713 | ) | (70,115 | ) | ||||||
Interest
income and other income, net
|
4,085 | 15,199 | 21,759 | |||||||||
Interest
expense
|
(20,950 | ) | (11,805 | ) | (11,011 | ) | ||||||
Interest
and other income (expense), net
|
(16,865 | ) | 3,394 | 10,748 | ||||||||
Loss
before income taxes
|
(92,727 | ) | (85,319 | ) | (59,367 | ) | ||||||
Provision
for (benefit from) income taxes
|
(541 | ) | 113,791 | (25,146 | ) | |||||||
Net
loss
|
$ | (92,186 | ) | $ | (199,110 | ) | $ | (34,221 | ) | |||
Net
loss per share:
|
||||||||||||
Basic
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) | |||
Diluted
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) | |||
Weighted
average shares used in per share calculations:
|
||||||||||||
Basic
|
105,011 | 104,574 | 104,056 | |||||||||
Diluted
|
105,011 | 104,574 | 104,056 | |||||||||
*
Includes stock-based compensation:
|
||||||||||||
Cost
of contract revenue
|
$ | 1,002 | $ | 5,187 | $ | 5,910 | ||||||
Research
and development
|
$ | 9,715 | $ | 13,488 | $ | 16,199 | ||||||
Marketing,
general and administrative
|
$ | 20,868 | $ | 18,492 | $ | 22,701 | ||||||
Restructuring
costs
|
$ | — | $ | 547 | $ | — |
|
Common Stock
|
Additional
Paid-in
|
Accumulated
|
Accumulated
Other
Comprehensive
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Deficit
|
Gain (Loss)
|
Total
|
||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Balances
at December 31, 2006
|
103,820 | $ | 104 | $ | 598,385 | $ | (193,612 | ) | $ | (630 | ) | $ | 404,247 | |||||||||||
ASC
740-10 Tax Adjustment
|
— | — | 239 | 94 | — | 333 | ||||||||||||||||||
Balances
at January 1, 2007
|
103,820 | 104 | 598,624 | (193,518 | ) | (630 | ) | 404,580 | ||||||||||||||||
Components
of comprehensive loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (34,221 | ) | — | (34,221 | ) | ||||||||||||||||
Foreign
currency translation adjustments, net of tax
|
— | — | — | — | 66 | 66 | ||||||||||||||||||
Unrealized
gain on marketable securities, net of tax
|
— | — | — | — | 688 | 688 | ||||||||||||||||||
Total
comprehensive loss
|
(33,467 | ) | ||||||||||||||||||||||
Reversal
of liability-based stock awards to equity
|
— | — | 2,136 | — | — | 2,136 | ||||||||||||||||||
Issuance
of common stock upon exercise of options, equity stock and stock units,
and employee stock purchase plan
|
1,475 | 1 | 11,831 | — | — | 11,832 | ||||||||||||||||||
Repurchase
and retirement of common stock under repurchase plan
|
— | — | — | — | — | — | ||||||||||||||||||
Stock-based
compensation
|
— | — | 43,676 | — | — | 43,676 | ||||||||||||||||||
Tax
shortfall from equity incentive plans
|
— | — | (6,271 | ) | — | — | (6,271 | ) | ||||||||||||||||
Balances
at December 31, 2007
|
105,295 | 105 | 649,996 | (227,739 | ) | 124 | 422,486 | |||||||||||||||||
Components
of comprehensive loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (199,110 | ) | — | (199,110 | ) | ||||||||||||||||
Foreign
currency translation adjustments, net of tax
|
— | — | — | — | 60 | 60 | ||||||||||||||||||
Unrealized
gain on marketable securities, net of tax
|
— | — | — | — | 685 | 685 | ||||||||||||||||||
Total
comprehensive loss
|
(198,365 | ) | ||||||||||||||||||||||
Issuance
of common stock upon exercise of options, equity stock and stock units,
and employee stock purchase plan
|
2,251 | 2 | 21,761 | — | — | 21,763 | ||||||||||||||||||
Repurchase
and retirement of common stock under repurchase plan and shares received
from a former executive
|
(3,743 | ) | (3 | ) | (5,248 | ) | (44,823 | ) | — | (50,074 | ) | |||||||||||||
Repurchase
of convertible notes
|
— | — | (259 | ) | — | — | (259 | ) | ||||||||||||||||
Stock-based
compensation
|
— | — | 37,761 | — | — | 37,761 | ||||||||||||||||||
Tax
shortfall from equity incentive plans
|
— | — | (371 | ) | — | — | (371 | ) | ||||||||||||||||
Balances
at December 31, 2008
|
103,803 | $ | 104 | $ | 703,640 | $ | (471,672 | ) | $ | 869 | $ | 232,941 | ||||||||||||
Components
of comprehensive loss:
|
||||||||||||||||||||||||
Net
loss
|
— | — | — | (92,186 | ) | — | (92,186 | ) | ||||||||||||||||
Unrealized
loss on marketable securities, net of tax
|
— | — | — | — | (782 | ) | (782 | ) | ||||||||||||||||
Total
comprehensive loss
|
(92,968 | ) | ||||||||||||||||||||||
Issuance
of common stock upon exercise of options, equity stock and stock units,
and employee stock purchase plan
|
2,131 | 2 | 19,747 | — | — | 19,749 | ||||||||||||||||||
Equity
component of 5% convertible senior notes due 2014
|
— | — | 63,867 | — | — | 63,867 | ||||||||||||||||||
Stock-based
compensation
|
— | — | 31,738 | — | — | 31,738 | ||||||||||||||||||
Balances
at December 31, 2009
|
105,934 | $ | 106 | $ | 818,992 | $ | (563,858 | ) | $ | 87 | $ | 255,327 | ||||||||||||
|
Years Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
(In
thousands)
|
||||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (92,186 | ) | $ | (199,110 | ) | $ | (34,221 | ) | |||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||
Stock-based
compensation
|
31,585 | 37,167 | 44,810 | |||||||||
Depreciation
|
10,661 | 11,326 | 11,202 | |||||||||
Impairment
of investments
|
164 | — | — | |||||||||
Amortization
of intangible assets
|
2,984 | 4,339 | 5,286 | |||||||||
Non-cash
interest expense and amortization of convertible debt issuance
costs
|
16,624 | 11,805 | 11,011 | |||||||||
Deferred
tax (benefit) provision
|
(218 | ) | 114,719 | (26,320 | ) | |||||||
Loss
on disposal of property and equipment
|
15 | 76 | 445 | |||||||||
Impairment
of intangible assets
|
— | 2,158 | — | |||||||||
Restructuring
costs (non-cash)
|
— | 547 | — | |||||||||
Gain
on repurchase of convertible notes
|
— | (2,528 | ) | — | ||||||||
Recoveries
of restatement and related legal activities (non-cash)
|
— | (849 | ) | — | ||||||||
Change
in assets and liabilities:
|
||||||||||||
Accounts
receivable
|
554 | 417 | 674 | |||||||||
Prepaids
and other assets
|
1,004 | 95 | (6,190 | ) | ||||||||
Accounts
payable
|
2,520 | (3,607 | ) | 3,809 | ||||||||
Accrued
salaries and benefits and other accrued liabilities
|
(3,506 | ) | (2,060 | ) | (4,333 | ) | ||||||
Accrued
litigation expenses
|
(9,118 | ) | (11,969 | ) | 3,091 | |||||||
Income
taxes payable
|
(111 | ) | (1,775 | ) | 816 | |||||||
Deferred
revenue
|
(1,557 | ) | (879 | ) | (4,801 | ) | ||||||
Decrease
(increase) in restricted cash
|
(7 | ) | 1,654 | 1 | ||||||||
Net
cash provided by (used in) operating activities
|
(40,592 | ) | (38,474 | ) | 5,280 | |||||||
Cash
flows from investing activities:
|
||||||||||||
Acquisition
of business
|
(26,000 | ) | — | (1,139 | ) | |||||||
Purchases
of property and equipment
|
(2,665 | ) | (9,871 | ) | (8,347 | ) | ||||||
Investment
in non-marketable security
|
(2,000 | ) | — | — | ||||||||
Acquisition
of intangible assets
|
(2,500 | ) | (300 | ) | (30 | ) | ||||||
Purchases
of marketable securities
|
(183,217 | ) | (362,968 | ) | (664,420 | ) | ||||||
Maturities
of marketable securities
|
240,927 | 430,844 | 598,543 | |||||||||
Proceeds
from sale of marketable securities
|
— | 24,996 | 108,550 | |||||||||
Proceeds
from sale of property and equipment
|
— | 30 | — | |||||||||
Net
cash provided by investing activities
|
24,545 | 82,731 | 33,157 | |||||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from issuance of convertible senior notes
|
172,500 | — | — | |||||||||
Issuance
costs related to the issuance of convertible senior notes
|
(4,313 | ) | — | — | ||||||||
Proceeds
received from issuance of common stock under employee stock
plans
|
20,692 | 21,688 | 11,831 | |||||||||
Payments
under installment payment arrangement
|
— | (1,250 | ) | (4,250 | ) | |||||||
Repurchase
and retirement of common stock
|
— | (49,226 | ) | — | ||||||||
Repurchase
of convertible notes
|
— | (18,679 | ) | — | ||||||||
Net
cash provided by (used in) financing activities
|
188,879 | (47,467 | ) | 7,581 | ||||||||
Effect
of exchange rates on cash and cash equivalents
|
— | 60 | 69 | |||||||||
Net
increase (decrease) in cash and cash equivalents
|
172,832 | (3,150 | ) | 46,087 | ||||||||
Cash
and cash equivalents at beginning of year
|
116,241 | 119,391 | 73,304 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 289,073 | $ | 116,241 | $ | 119,391 | ||||||
Supplemental
disclosure of cash flow information:
|
||||||||||||
Cash
paid for interest
|
$ | 3,943 | $ | — | $ | — | ||||||
Cash
paid for income taxes
|
$ | 748 | $ | 528 | $ | 1,046 | ||||||
Cash
received from income tax refunds
|
$ | 625 | $ | 309 | $ | — |
Non-cash
obligation for construction in progress
|
$ | 25,100 | $ | — | $ | — |
As of December 31, 2008
|
||||||||||||
As previously reported
|
Adjustments
|
As adjusted
|
||||||||||
(In
thousands)
|
||||||||||||
Deferred
taxes, long term
|
$ | 1,857 | $ | — | $ | 1,857 | ||||||
Other
assets
|
$ | 4,483 | $ | 480 | $ | 4,963 | ||||||
Total
assets
|
$ | 396,890 | $ | 480 | $ | 397,370 | ||||||
Convertible
notes
|
$ | 136,950 | $ | (11,476 | ) | $ | 125,474 | |||||
Additional
paid in capital
|
$ | 655,724 | $ | 47,916 | $ | 703,640 | ||||||
Accumulated
deficit
|
$ | (435,712 | ) | $ | (35,960 | ) | $ | (471,672 | ) | |||
Total
stockholders’ equity
|
$ | 220,985 | $ | 11,956 | $ | 232,941 | ||||||
Total
liabilities and stockholders’ equity
|
$ | 396,890 | $ | 480 | $ | 397,370 |
Year ended December 31,
2008
|
||||||||||||
As previously reported
|
Adjustments
|
As adjusted
|
||||||||||
(In
thousands, except per share amounts)
|
||||||||||||
Interest
income and other income (expense), net
|
$ | 17,042 | $ | (1,843 | ) | $ | 15,199 | |||||
Interest
expense
|
$ | — | $ | (11,805 | ) | $ | (11,805 | ) | ||||
Net
loss before income taxes
|
$ | (71,671 | ) | $ | (13,648 | ) | $ | (85,319 | ) | |||
Provision
for (benefit from) income taxes
|
$ | 124,252 | $ | (10,461 | ) | $ | 113,791 | |||||
Net
loss
|
$ | (195,923 | ) | $ | (3,187 | ) | $ | (199,110 | ) | |||
Net
loss per share — Basic
|
$ | (1.87 | ) | $ | (0.03 | ) | $ | (1.90 | ) | |||
Net
loss per share — Diluted
|
$ | (1.87 | ) | $ | (0.03 | ) | $ | (1.90 | ) |
Year ended December 31, 2007
|
||||||||||||
As previously reported
|
Adjustments
|
As adjusted
|
||||||||||
(In
thousands, except per share amounts)
|
||||||||||||
Interest
income and other income (expense), net
|
$ | 21,759 | $ | — | $ | 21,759 | ||||||
Interest
expense
|
$ | — | $ | (11,011 | ) | $ | (11,011 | ) | ||||
Net
loss before income taxes
|
$ | (48,356 | ) | $ | (11,011 | ) | $ | (59,367 | ) | |||
Benefit
from income taxes
|
$ | (20,692 | ) | $ | (4,454 | ) | $ | (25,146 | ) | |||
Net
loss
|
$ | (27,664 | ) | $ | (6,557 | ) | $ | (34,221 | ) | |||
Net
loss per share — Basic
|
$ | (0.27 | ) | $ | (0.06 | ) | $ | (0.33 | ) | |||
Net
loss per share — Diluted
|
$ | (0.27 | ) | $ | (0.06 | ) | $ | (0.33 | ) |
December 31, 2009
|
||||||||||||||||||||
(dollars
in thousands)
|
Fair Value
|
Book Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Weighted
Rate
of
Return
|
|||||||||||||||
Money
Market Funds
|
$ | 280,908 | $ | 280,908 | $ | — | $ | — | 0.01 | % | ||||||||||
U.S.
Government Bonds and Notes
|
138,829 | 138,521 | 377 | (69 | ) | 1.09 | % | |||||||||||||
Corporate
Notes, Bonds, and Commercial Paper
|
32,291 | 32,222 | 70 | (1 | ) | 1.89 | % | |||||||||||||
Total
cash equivalents and marketable securities
|
452,028 | 451,651 | 447 | (70 | ) | |||||||||||||||
Cash
|
8,165 | 8,165 | — | — | ||||||||||||||||
Total
cash, cash equivalents and marketable securities
|
$ | 460,193 | $ | 459,816 | $ | 447 | $ | (70 | ) |
December 31, 2008
|
||||||||||||||||||||
(dollars
in thousands)
|
Fair Value
|
Book Value
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Weighted
Rate
of
Return
|
|||||||||||||||
Money
Market Funds
|
$ | 110,732 | $ | 110,732 | $ | — | $ | — | 0.90 | % | ||||||||||
Municipal
Bonds and Notes
|
1,000 | 1,000 | — | — | 3.85 | % | ||||||||||||||
U.S.
Government Bonds and Notes
|
149,304 | 148,178 | 1,126 | — | 2.79 | % | ||||||||||||||
Corporate
Notes, Bonds, and Commercial Paper
|
79,308 | 79,275 | 197 | (164 | ) | 3.06 | % | |||||||||||||
Total
cash equivalents and marketable securities
|
340,344 | 339,185 | 1,323 | (164 | ) | |||||||||||||||
Cash
|
5,509 | 5,509 | — | — | ||||||||||||||||
Total
cash, cash equivalents and marketable securities
|
$ | 345,853 | $ | 344,694 | $ | 1,323 | $ | (164 | ) |
|
December 31,
2009
|
December 31,
2008
|
||||||
(Dollars
in thousands)
|
||||||||
Cash
equivalents
|
$ | 280,908 | $ | 110,732 | ||||
Short
term marketable securities
|
171,120 | 229,612 | ||||||
Total
cash equivalents and marketable securities
|
452,028 | 340,344 | ||||||
Cash
|
8,165 | 5,509 | ||||||
Total
cash, cash equivalents and marketable securities
|
$ | 460,193 | $ | 345,853 |
|
As of
|
Unrealized Gain, net
|
||||||||||||||
|
December 31,
2009
|
December 31,
2008
|
December 31,
2009
|
December 31,
2008
|
||||||||||||
(In
thousands)
|
||||||||||||||||
Contractual
maturity:
|
||||||||||||||||
Due
within one year
|
$ | 419,054 | $ | 223,458 | $ | 250 | $ | 345 | ||||||||
Due
from one year through three years
|
32,974 | 116,886 | 127 | 814 | ||||||||||||
$ | 452,028 | $ | 340,344 | $ | 377 | $ | 1,159 |
|
December 31,
|
|||||||
|
2009
|
2008
|
||||||
(In
thousands)
|
||||||||
Computer
equipment
|
$ | 23,795 | $ | 24,932 | ||||
Computer
software
|
33,768 | 35,981 | ||||||
Leasehold
improvements
|
12,924 | 12,892 | ||||||
Furniture
and fixtures
|
7,579 | 7,525 | ||||||
Construction
in progress
|
25,435 | 1,029 | ||||||
103,501 | 82,359 | |||||||
Less
accumulated depreciation and amortization
|
(64,535 | ) | (60,069 | ) | ||||
$ | 38,966 | $ | 22,290 |
|
December 31,
|
|||||||
|
2009
|
2008
|
||||||
(In
thousands)
|
||||||||
Beginning
balance at January 1
|
$ | 4,454 | $ | 4,454 | ||||
Goodwill
acquired during the period
|
11,100 | — | ||||||
Ending
balance at December 31
|
$ | 15,554 | $ | 4,454 |
|
December 31,
|
|||||||
|
2009
|
2008
|
||||||
(In
thousands)
|
||||||||
Foreign
currency translation adjustments, net of tax
|
$ | 86 | $ | 86 | ||||
Unrealized
gain on available for sale securities, net of tax
|
1 | 783 | ||||||
Total
|
$ | 87 | $ | 869 |
|
Total
|
2010
|
2011
|
2012
|
2013
|
2014
|
Thereafter
|
|||||||||||||||||||||
Contractual
obligations(1)
|
||||||||||||||||||||||||||||
Operating
leases
|
$ | 50,504 | $ | 7,304 | $ | 4,654 | $ | 4,737 | $ | 4,313 | $ | 4,444 | $ | 25,052 | ||||||||||||||
Convertible
notes
|
309,450 | 136,950 | — | — | — | 172,500 | — | |||||||||||||||||||||
Interest
payments related to convertible notes
|
38,432 | 8,625 | 8,625 | 8,625 | 8,625 | 3,932 | — | |||||||||||||||||||||
Total
|
$ | 398,386 | $ | 152,879 | $ | 13,279 | $ | 13,362 | $ | 12,938 | $ | 180,876 | $ | 25,052 |
(1)
|
The
above table does not reflect possible payments in connection with
uncertain tax benefits of approximately $10.4 million, including
$8.4 million recorded as a reduction of long-term deferred tax assets
and $2.0 million in long-term income taxes payable, as of
December 31, 2009. As noted below in Note 11, “Income Taxes,”
although it is possible that some of the unrecognized tax benefits could
be settled within the next 12 months, the Company cannot reasonably
estimate the outcome at this time.
|
|
Shares
Available
for Grant
|
|||
Shares
available as of December 31, 2006
|
7,866,200 | |||
Stock
options granted
|
(3,202,800 | ) | ||
Stock
options forfeited
|
1,791,361 | |||
Stock
options expired under former plans
|
(1,523,097 | ) | ||
Nonvested
equity stock and stock units granted(1)
|
(342,533 | ) | ||
Shares
available as of December 31, 2007
|
4,589,131 | |||
Stock
options granted
|
(1,884,490 | ) | ||
Stock
options forfeited
|
2,188,422 | |||
Stock
options expired under former plans
|
(1,359,483 | ) | ||
Nonvested
equity stock and stock units granted(1)
|
(1,056,096 | ) | ||
Nonvested
equity stock and stock units forfeited(1)
|
79,500 | |||
Shares
available as of December 31, 2008
|
2,556,984 | |||
Increase
in shares approved for issuance
|
6,500,000 | |||
Stock
options granted
|
(1,487,905 | ) | ||
Stock
options forfeited
|
2,123,045 | |||
Stock
options expired under former plans
|
(1,849,516 | ) | ||
Nonvested
equity stock and stock units granted(1)
|
(419,214 | ) | ||
Nonvested
equity stock and stock units forfeited(1)
|
39,000 | |||
Total
shares available for grant as of December 31, 2009
|
7,462,394 |
(1)
|
For
purposes of determining the number of shares available for grant under the
2006 Plan against the maximum number of shares authorized, each restricted
stock granted reduces the number of shares available for grant by
1.5 shares and each restricted stock forfeited increases shares
available for grant by
1.5 shares.
|
Options Outstanding
|
Weighted
|
|||||||||
Weighted
|
Average
|
|||||||||
Average
|
Remaining
|
Aggregate
|
||||||||
Number
of
|
Exercise
Price
|
Contractual
|
Intrinsic
|
|||||||
Shares
|
per Share
|
Term
|
Value
|
|||||||
(Dollars
in thousands, except per share amounts)
|
||||||||||
Outstanding
as of December 31, 2006
|
18,672,877 | $ | 18.32 | |||||||
Options
granted
|
3,202,800 | 18.72 | ||||||||
Options
exercised
|
(1,333,578 | ) | 8.43 | |||||||
Options
forfeited
|
(1,791,361 | ) | 22.89 | |||||||
Outstanding
as of December 31, 2007
|
18,750,738 | $ | 20.17 | |||||||
Options
granted
|
1,884,490 | 19.70 | ||||||||
Options
exercised
|
(1,873,067 | ) | 9.70 | |||||||
Options
forfeited
|
(2,188,422 | ) | 20.97 | |||||||
Outstanding
as of December 31, 2008
|
16,573,739 | $ | 21.19 | |||||||
Options
granted
|
1,487,905 | 9.21 | ||||||||
Options
exercised
|
(1,482,489 | ) | 11.29 | |||||||
Options
forfeited
|
(2,123,045 | ) | 21.34 | |||||||
Outstanding
as of December 31, 2009
|
14,456,110 | $ | 20.95 |
5.38
|
$102,146
|
|||||
Vested
or expected to vest at December 31, 2009
|
13,838,744 | $ | 21.40 |
5.35
|
$93,671
|
|||||
Options
exercisable at December 31, 2009
|
10,327,025 | $ | 22.88 |
4.53
|
$65,738
|
|
Options Outstanding
|
Options Exercisable
|
||||||||||||||||||||
Range
of Exercise
Prices
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual Life
|
Weighted
Average
Exercise
Price
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$ | 2.50 – $ 8.55 | 2,518,707 | 5.60 | $ | 6.49 | 1,219,813 | $ | 5.39 | ||||||||||||||
$ | 8.64 – $14.75 | 1,655,688 | 4.83 | $ | 13.23 | 1,462,087 | $ | 13.21 | ||||||||||||||
$ | 14.86 – $17.14 | 1,562,915 | 5.54 | $ | 16.28 | 1,268,274 | $ | 16.24 | ||||||||||||||
$ | 17.16 – $18.62 | 834,641 | 4.32 | $ | 17.86 | 768,375 | $ | 17.86 | ||||||||||||||
$ | 18.69 – $18.69 | 1,572,093 | 7.09 | $ | 18.69 | 871,836 | $ | 18.69 | ||||||||||||||
$ | 19.13 – $19.86 | 1,927,396 | 7.79 | $ | 19.66 | 832,474 | $ | 19.59 | ||||||||||||||
$ | 20.31 – $26.19 | 1,480,870 | 5.68 | $ | 22.96 | 1,163,635 | $ | 22.94 | ||||||||||||||
$ | 26.45 – $37.66 | 1,792,177 | 3.20 | $ | 32.75 | 1,733,576 | $ | 32.86 | ||||||||||||||
$ | 38.48 – $83.25 | 1,104,511 | 2.77 | $ | 57.60 | 999,843 | $ | 59.20 | ||||||||||||||
$ | 92.62 – $92.62 | 7,112 | 0.39 | $ | 92.62 | 7,112 | $ | 92.62 | ||||||||||||||
$ | 2.50 – $92.62 | 14,456,110 | 5.38 | $ | 20.95 | 10,327,025 | $ | 22.88 |
|
Stock Option Plans for Years Ended
December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Stock
Option Plans
|
||||||||||||
Expected
stock price volatility
|
89%-96 | % | 63%-114 | % | 53%-69 | % | ||||||
Risk
free interest rate
|
1.8%-2.8 | % | 2.1%-3.3 | % | 3.5%-4.9 | % | ||||||
Expected
term (in years)
|
5.3-6.1 | 5.3 | 6.2 | |||||||||
Weighted-average
fair value of stock options granted
|
$ | 6.85 | $ | 11.32 | $ | 12.29 |
|
Employee Stock Purchase Plan for Years Ended
December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Employee
Stock Purchase Plan
|
||||||||||||
Expected
stock price volatility
|
86%-92 | % | 58%-103 | % | 64 | % | ||||||
Risk
free interest rate
|
0.2%-0.3 | % | 1.1%-1.7 | % | 4.2 | % | ||||||
Expected
term (in years)
|
0.5 | 0.5 | 0.5 | |||||||||
Weighted-average
fair value of purchase rights granted under the purchase
plan
|
$ | 5.52 | $ | 5.06 | $ | 6.62 |
Nonvested Equity Stock and Stock
Units
|
Shares
|
Weighted-
Average
Grant-Date
Fair Value
|
||||||
Nonvested
at December 31, 2006
|
73,770 | $ | 36.14 | |||||
Granted
|
228,355 | 18.85 | ||||||
Vested
|
(57,948 | ) | 30.06 | |||||
Forfeited
|
— | — | ||||||
Nonvested
at December 31, 2007
|
244,177 | $ | 21.41 | |||||
Granted
|
704,064 | 17.91 | ||||||
Vested
|
(74,177 | ) | 21.99 | |||||
Forfeited
|
(53,000 | ) | 19.86 | |||||
Nonvested
at December 31, 2008
|
821,064 | $ | 18.46 | |||||
Granted
|
279,476 | 11.12 | ||||||
Vested
|
(290,564 | ) | 17.43 | |||||
Forfeited
|
(26,000 | ) | 18.05 | |||||
Nonvested
at December 31, 2009
|
783,976 | $ | 16.24 |
|
Years Ended December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Benefit
at U.S. federal statutory rate
|
(35.0 | )% | (35.0 | )% | (35.0 | )% | ||||||
Benefit
at state statutory rate
|
(5.4 | )% | (5.3 | )% | (5.5 | )% | ||||||
R&D
credit
|
(0.9 | )% | (6.3 | )% | (2.2 | )% | ||||||
Executive
compensation
|
— | % | 0.1 | % | (2.2 | )% | ||||||
Non-deductible
stock-based compensation
|
0.8 | % | 1.1 | % | 0.8 | % | ||||||
Other
|
0.7 | % | 0.0 | % | 1.7 | % | ||||||
Valuation
allowance
|
39.2 | % | 178.8 | % | — | % | ||||||
(0.6 | )% | 133.4 | % | (42.4 | )% |
|
As of December 31,
|
|||||||
|
2009
|
2008
|
||||||
(In
thousands)
|
||||||||
Deferred
tax assets:
|
||||||||
Deferred
revenue
|
$ | 22 | $ | 27 | ||||
Depreciation
and amortization
|
12,775 | 16,206 | ||||||
Other
liabilities and reserves
|
4,915 | 6,043 | ||||||
Employee
stock-based compensation
|
— | 595 | ||||||
Deferred
equity compensation
|
53,872 | 54,136 | ||||||
Net
operating loss carryovers
|
73,619 | 46,019 | ||||||
Tax
credits
|
32,751 | 32,756 | ||||||
Total
gross deferred tax assets
|
$ | 177,954 | $ | 155,782 | ||||
Convertible
debt
|
(24,859 | ) | (4,642 | ) | ||||
Total
net deferred tax assets
|
$ | 153,095 | $ | 151,140 | ||||
Valuation
Allowance
|
(150,932 | ) | (149,195 | ) | ||||
Net deferred tax
assets
|
$ | 2,163 | $ | 1,945 |
As of December 31,
|
||||||||
|
2009
|
2008
|
||||||
(In
thousands)
|
||||||||
Current
portion
|
$ | 129 | $ | 88 | ||||
Non-current
portion
|
2,034 | 1,857 | ||||||
Net deferred tax
assets
|
$ | 2,163 | $ | 1,945 |
Years
Ended December 31,
|
||||||||||||
|
2009
|
2008
|
2007
|
|||||||||
Balance
at January 1
|
$ | 9,613 | $ | 14,005 | $ | 12,395 | ||||||
Tax
positions related to current year:
|
||||||||||||
Additions
|
767 | 978 | 1,610 | |||||||||
Tax
positions related to prior years:
|
||||||||||||
Reductions
|
(27 | ) | (304 | ) | — | |||||||
Settlements
|
— | (5,066 | ) | — | ||||||||
Balance
at December 31
|
$ | 10,353 | $ | 9,613 | $ | 14,005 |
|
Years Ended
December 31,
|
|||||||||||
|
2009
|
2008
|
2007
|
|||||||||
(In
thousands, except per share amounts)
|
||||||||||||
Numerator:
|
||||||||||||
Net
loss
|
$ | (92,186 | ) | $ | (199,110 | ) | $ | (34,221 | ) | |||
Denominator:
|
||||||||||||
Weighted
average shares used to compute basic EPS
|
105,011 | 104,574 | 104,056 | |||||||||
Dilutive
potential shares from stock options, ESPP and nonvested equity stock and
stock units
|
— | — | — | |||||||||
Weighted
average shares used to compute diluted EPS
|
105,011 | 104,574 | 104,056 | |||||||||
Net
loss per share:
|
||||||||||||
Basic
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) | |||
Diluted
|
$ | (0.88 | ) | $ | (1.90 | ) | $ | (0.33 | ) |
|
As of December 31,
2009
|
|||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||
(In
thousands)
|
||||||||||||
Patents
|
$ | 12,441 | $ | (6,876 | ) | $ | 5,565 | |||||
Intellectual
property
|
10,384 | (10,384 | ) | — | ||||||||
Customer
contracts and contractual relationships
|
4,050 | (2,717 | ) | 1,333 | ||||||||
Existing
technology
|
17,550 | (2,788 | ) | 14,762 | ||||||||
Non-competition
agreement
|
100 | (100 | ) | — | ||||||||
Total
intangible assets
|
$ | 44,525 | $ | (22,865 | ) | $ | 21,660 |
As of December 31,
2008
|
||||||||||||
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Net
Carrying
Amount
|
|||||||||
(In
thousands)
|
||||||||||||
Patents
|
$ | 9,941 | $ | (5,527 | ) | $ | 4,414 | |||||
Intellectual
property
|
10,384 | (9,527 | ) | 857 | ||||||||
Customer
contracts and contractual relationships
|
4,000 | (2,224 | ) | 1,776 | ||||||||
Existing
technology
|
2,700 | (2,503 | ) | 197 | ||||||||
Non-competition
agreement
|
100 | (100 | ) | — | ||||||||
Total
intangible assets
|
$ | 27,125 | $ | (19,881 | ) | $ | 7,244 |
Years Ending December 31:
|
Amount
|
|||
2010
|
$ | 4,210 | ||
2011
|
3,835 | |||
2012
|
3,562 | |||
2013
|
3,257 | |||
2014
|
2,356 | |||
Thereafter
|
4,440 | |||
$ | 21,660 |
(dollars
in thousands)
|
As
of December 30,
2009
|
As
of December 31,
2008
|
||||||
Zero
Coupon Convertible Senior Notes due 2010
|
$ | 136,950 | $ | 136,950 | ||||
5%
Convertible Senior Notes due 2014
|
172,500 | — | ||||||
Total
principal amount of convertible notes
|
309,450 | 136,950 | ||||||
Unamortized
discount
|
(61,406 | ) | (11,476 | ) | ||||
Total
convertible notes
|
$ | 248,044 | $ | 125,474 | ||||
Less
current portion
|
(136,032 | ) | — | |||||
Total
long-term convertible notes
|
$ | 112,012 | $ | 125,474 |
|
(1)
|
default
in the payment when due of any principal of any of the 2014 Notes at
maturity, upon redemption or upon exercise of a repurchase right or
otherwise;
|
|
(2)
|
default
in the payment of any interest, including additional interest, if any, on
any of the 2014 Notes, when the interest becomes due and payable, and
continuance of such default for a period of 30
days;
|
|
(3)
|
the
Company’s failure to deliver cash or cash and shares of Common Stock
(including any additional shares deliverable as a result of a conversion
in connection with a make-whole fundamental change) when required to be
delivered upon the conversion of any 2014
Note;
|
|
(4)
|
default
in the Company’s obligation to provide notice of the occurrence of a
fundamental change when required by the
Indenture;
|
|
(5)
|
the
Company’s failure to comply with any of its other agreements in the 2014
Notes or the Indenture (other than those referred to in clauses (1)
through (4) above) for 60 days after the Company’s receipt of written
notice to the Company of such default from the trustee or to the Company
and the trustee of such default from holders of not less than 25% in
aggregate principal amount of the 2014 Notes then
outstanding;
|
|
(6)
|
the
Company’s failure to pay when due the principal of, or acceleration of,
any indebtedness for money borrowed by the Company or any of its
subsidiaries in excess of $30,000,000 principal amount, if such
indebtedness is not discharged, or such acceleration is not annulled, by
the end of a period of ten days after written notice to the Company by the
trustee or to the Company and the trustee by the holders of at least 25%
in aggregate principal amount of the 2014 Notes then outstanding;
and
|
|
(7)
|
certain
events of bankruptcy, insolvency or reorganization relating to the Company
or any of its material subsidiaries (as defined in the
Indenture).
|
|
•
|
cash
in an amount equal to the lesser of
|
(1)
|
the
principal amount of each note to be
converted and
|
(2)
|
the
“conversion value,” which is equal to (a) the applicable conversion
rate, multiplied by (b) the applicable stock price, as
defined.
|
|
•
|
if
the conversion value is greater than the principal amount of each note, a
number of shares of Rambus Common Stock (the “net shares”) equal to the
sum of the daily share amounts, calculated as defined. However, in lieu of
delivering net shares, Rambus, at its option, may deliver cash, or a
combination of cash and shares of its Common Stock, with a value equal to
the net shares amount.
|
|
•
|
default
in the payment when due of any principal of any of the 2010 Notes at
maturity, upon exercise of a repurchase right or
otherwise;
|
|
•
|
default
in the payment of liquidated damages, if any, which default continues for
30 days;
|
|
•
|
default
in Rambus’ obligation to provide notice of the occurrence of fundamental
change when required by the
indenture;
|
|
•
|
failure
to comply with any of Rambus’ other agreements in the 2010 Notes or the
indenture upon its receipt of notice to it of such default from the
trustee or to Rambus and the trustee from holders of not less than 25% in
aggregate principal amount at maturity of the 2010 Notes, and Rambus fails
to cure (or obtain a waiver of) such default within 60 days after it
receives such notice;
|
|
•
|
failure
to pay when due the principal of, or acceleration of, any indebtedness for
money borrowed by Rambus or any of its subsidiaries in excess of
$30.0 million principal amount, if such indebtedness is not
discharged, or such acceleration is not annulled, by the end of a period
of ten days after written notice to Rambus by the trustee or to Rambus and
the trustee by the holders of at least 25% in principal amount of the
outstanding 2010
Notes; and
|
|
•
|
certain
events of bankruptcy, insolvency or reorganization relating to
Rambus.
|
|
Years Ended
December 31,
|
|||||||
|
2009
|
2008
|
||||||
(in
thousands)
|
||||||||
2014
Notes coupon interest at a rate of 5%
|
$ | 4,326 | $ | — | ||||
2014
Notes amortization of discount at an additional effective interest rate of
11.7%
|
5,626 | — | ||||||
2010
Notes amortization of discount at an effective interest rate of
8.4%
|
10,998 | 11,805 | ||||||
Total
interest expense
|
$ | 20,950 | $ | 11,805 |
|
As of December 31, 2009
|
|||||||||||||||
|
Total
|
Quoted
Market
Prices
in
Active
Markets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||||||
(In
thousands)
|
||||||||||||||||
Cash
equivalents
|
$ | 280,908 | $ | 280,908 | $ | — | $ | — | ||||||||
Marketable
securities
|
171,120 | — | 171,120 | — | ||||||||||||
Total
available-for-sale securities
|
$ | 452,028 | $ | 280,908 | $ | 171,120 | $ | — |
As
of December 31, 2009
|
||||||||||||||||||||
(in
thousands)
|
Carrying
Value
|
Quoted
market
prices
in
active
markets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
Significant
unobservable
inputs
(Level 3)
|
Impairment
Charges for the Year Ended December
31,
2009
|
|||||||||||||||
Investment
in non-marketable security
|
$ | 2,000 | $ | — | $ | — | $ | 2,000 | $ | — |
|
As of December 31, 2009
|
As of December 31, 2008
|
||||||||||||||||||||||
(in
thousands)
|
Face
Value
|
Carrying
Value
|
Fair Value
|
Face
Value
|
Carrying
Value
|
Fair Value
|
||||||||||||||||||
Zero
Coupon Convertible Senior Notes due 2010
|
$ | 136,950 | $ | 136,032 | $ | 142,599 | $ | 136,950 | $ | 125,474 | $ | 125,493 | ||||||||||||
5%
Convertible Senior Notes due 2014
|
172,500 | 112,012 | 261,160 | — | — | — | ||||||||||||||||||
Total
Convertible notes
|
$ | 309,450 | $ | 248,044 | $ | 403,759 | $ | 136,950 | $ | 125,474 | $ | 125,493 |
Total
|
||||
(in
thousands)
|
||||
Goodwill
|
$ | 11,100 | ||
Acquired
developed technology
|
14,900 | |||
Total
|
$ | 26,000 |
|
Employee
Termination/Severance
And
Related Benefits
Cash
|
Employee
Termination/Severance
and
Related Benefits
Non-Cash
|
Total
|
|||||||||
(In
thousands)
|
||||||||||||
Balance
at December 31, 2007
|
$ | — | $ | — | $ | — | ||||||
Charges
to operations
|
3,638 | 547 | 4,185 | |||||||||
Charges
utilized/paid
|
(3,489 | ) | (547 | ) | (4,036 | ) | ||||||
Balance
at December 31, 2008
|
$ | 149 | $ | — | $ | 149 | ||||||
Charges
utilized/paid
|
(149 | ) | — | (149 | ) | |||||||
Balance
at December 31, 2009
|
$ | — | $ | — | $ | — |
Dec. 31,
2009
|
Sept.
30,
2009
|
June
30,
2009
|
March
31,
2009
|
Dec. 31,
2008
|
Sept.
30,
2008
|
June
30,
2008
|
March
31,
2008
|
|||||||||||||||||||||||||
(In
thousands, except for per share amounts)
|
||||||||||||||||||||||||||||||||
Revenue:
|
||||||||||||||||||||||||||||||||
Royalties
|
$ | 30,175 | $ | 26,898 | $ | 24,759 | $ | 26,169 | $ | 35,736 | $ | 25,793 | $ | 32,288 | $ | 33,093 | ||||||||||||||||
Contract
revenue
|
641 | 976 | 2,224 | 1,165 | 1,877 | 3,635 | 3,427 | 6,645 | ||||||||||||||||||||||||
Total
revenue
|
30,816 | 27,874 | 26,983 | 27,334 | 37,613 | 29,428 | 35,715 | 39,738 | ||||||||||||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||||||||||||||
Cost
of contract revenue
|
1,397 | 1,858 | 1,438 | 2,183 | 2,892 | 4,611 | 6,567 | 7,233 | ||||||||||||||||||||||||
Research
and development
|
16,975 | 16,727 | 15,713 | 17,837 | 17,174 | 17,511 | 20,035 | 21,502 | ||||||||||||||||||||||||
Marketing,
general and administrative
|
28,598 | 29,882 | 32,563 | 37,156 | 35,700 | 31,288 | 23,768 | 33,321 | ||||||||||||||||||||||||
Costs
(recoveries) of restatement and related legal activities
|
542 | 68 | (429 | ) | (13,639 | ) | (302 | ) | 392 | 2,260 | 912 | |||||||||||||||||||||
Restructuring
costs
|
— | — | — | — | 161 | 4,024 | — | — | ||||||||||||||||||||||||
Impairment
of intangible asset
|
— | — | — | — | — | 2,158 | — | — | ||||||||||||||||||||||||
Total
costs and expenses(1)
|
47,512 | 48,535 | 49,285 | 43,537 | 55,625 | 59,984 | 52,630 | 62,968 | ||||||||||||||||||||||||
Operating
loss
|
(16,696 | ) | (20,661 | ) | (22,302 | ) | (16,203 | ) | (18,012 | ) | (30,556 | ) | (16,915 | ) | (23,230 | ) | ||||||||||||||||
Interest
income and other income, net
|
581 | 891 | 1,173 | 1,440 | 4,992 | 2,704 | 2,908 | 4,595 | ||||||||||||||||||||||||
Interest
expense
|
(7,822 | ) | (7,641 | ) | (2,817 | ) | (2,670 | ) | (2,971 | ) | (3,002 | ) | (2,944 | ) | (2,888 | ) | ||||||||||||||||
Interest
and other income (expense), net
|
7,241 | (6,750 | ) | (1,644 | ) | (1,230 | ) | 2,021 | (298 | ) | (36 | ) | 1,707 | |||||||||||||||||||
Loss
before income taxes
|
(23,937 | ) | (27,411 | ) | (23,946 | ) | (17,433 | ) | (15,991 | ) | (30,854 | ) | (16,951 | ) | (21,523 | ) | ||||||||||||||||
Provision
for (benefit from) income taxes
|
(644 | ) | 85 | 25 | (7 | ) | (496 | ) | 92 | 121,364 | (7,169 | ) | ||||||||||||||||||||
Net
loss
|
$ | (23,293 | ) | $ | (27,496 | ) | $ | (23,971 | ) | $ | (17,426 | ) | $ | (15,495 | ) | $ | (30,946 | ) | $ | (138,315 | ) | $ | (14,354 | ) | ||||||||
Net
loss per share — basic
|
$ | (0.22 | ) | $ | (0.26 | ) | $ | (0.23 | ) | $ | (0.17 | ) | $ | (0.15 | ) | $ | (0.29 | ) | $ | (1.32 | ) | $ | (0.14 | ) | ||||||||
Net
loss per share — diluted
|
$ | (0.22 | ) | $ | (0.26 | ) | $ | (0.23 | ) | $ | (0.17 | ) | $ | (0.15 | ) | $ | (0.29 | ) | $ | (1.32 | ) | $ | (0.14 | ) | ||||||||
Shares
used in per share calculations — basic
|
105,727 | 105,182 | 104,675 | 104,376 | 103,915 | 104,897 | 104,804 | 104,683 | ||||||||||||||||||||||||
Shares
used in per share calculations — diluted
|
105,727 | 105,182 | 104,675 | 104,376 | 103,915 | 104,897 | 104,804 | 104,683 |
|
(1)
|
Stock-based
compensation included in —
|
Cost
of contract revenue
|
$ | 96 | $ | 283 | $ | 233 | $ | 390 | $ | 583 | $ | 1,321 | $ | 1,365 | $ | 1,918 | ||||||||||||||||
Research
and development
|
$ | 2,429 | $ | 2,332 | $ | 2,214 | $ | 2,740 | $ | 2,491 | $ | 3,326 | $ | 3,767 | $ | 3,904 | ||||||||||||||||
Marketing,
general and administrative
|
$ | 5,042 | $ | 5,134 | $ | 5,403 | $ | 5,289 | $ | 5,593 | $ | 4,371 | $ | 3,821 | $ | 4,707 | ||||||||||||||||
Restructuring
costs
|
$ | — | $ | — | $ | — | $ | — | $ | — | $ | 547 | $ | — | $ | — |
(a)(2)
|
Financial
Statement Schedules
|
(a)(3)
|
Exhibits
|
RAMBUS
INC.
|
|
By:
/s/
Satish Rishi
|
|
Satish Rishi
|
|
Senior Vice President, Finance
and Chief Financial Officer
|
Signature
|
Title
|
Date
|
/s/
Harold
Hughes
|
Chief
Executive Officer, President and
|
February
25, 2010
|
Harold Hughes
|
Director
(Principal Executive Officer)
|
|
/s/
Satish
Rishi
|
Senior
Vice President, Finance and Chief
|
February
25, 2010
|
Satish Rishi
|
Financial
Officer (Principal Financial and
Accounting
Officer)
|
|
/s/
Bruce
Dunlevie
|
Chairman
of the Board of Directors
|
February
25, 2010
|
Bruce Dunlevie
|
||
/s/
J. Thomas
Bentley
|
Director
|
February
25, 2010
|
J. Thomas
Bentley
|
||
/s/
Sunlin
Chou
|
Director
|
February
25, 2010
|
Sunlin Chou
|
||
/s/
P. Michael
Farmwald
|
Director
|
February
25, 2010
|
P. Michael
Farmwald
|
||
/s/
Penelope
Herscher
|
Director
|
February
25, 2010
|
Penelope
Herscher
|
||
/s/
Mark
Horowitz
|
Director
|
February
25, 2010
|
Mark Horowitz
|
||
/s/
David
Shrigley
|
Director
|
February
25, 2010
|
David Shrigley
|
||
/s/
Abraham D.
Sofaer
|
Director
|
February
25, 2010
|
Abraham D.
Sofaer
|
||
/s/
Eric
Stang
|
Director
|
February
25, 2010
|
Eric Stang
|
* |
Management
contracts or compensation plans or arrangements in which directors or
executive officers are eligible to participate.
|
||
† |
Confidential
treatment has been granted with respect to certain portions of this
exhibit. Omitted portions have been filed separately with the Securities
and Exchange Commission.
|
||
(1 | ) |
Incorporated
by reference from the Form 8-K filed on June 29, 2009.
|
|
(2 | ) |
Incorporated
by reference from the Form 10-K filed on December 15,
1997.
|
|
(3 | ) |
Incorporated
by reference from the Form 10-Q filed on May 4,
2001.
|
|
(4 | ) |
Incorporated
by reference from the Form 10-Q filed on August 4,
2008.
|
|
(5 | ) |
Incorporated
by reference from the Form S-1/A (file no. 333-22885) filed on
April 24, 1997.
|
|
(6 | ) |
Incorporated
by reference from the Form 8-A12G/A filed on August 3,
2000.
|
|
(7 | ) |
Incorporated
by reference from the Form 8-A12G/A filed on August 5,
2003.
|
|
(8 | ) |
Incorporated
by reference from the Form S-3 filed on April 29,
2005.
|
|
(9 | ) |
Incorporated
by reference from the Form S-1 (file no. 333-22885) filed on
March 6, 1997.
|
|
(10 | ) |
Incorporated
by reference from the Form 10-K filed on September 14,
2007.
|
|
(11 | ) |
Incorporated
by reference from the Form S-8 filed on June 6, 1997 (file no.
333-28597).
|
|
(12 | ) |
Incorporated
by reference from the Form 8-K filed on May 4,
2009.
|
|
(13 | ) |
Incorporated
by reference from the Form 8-K filed on May 16, 2006.
|
|
(14 | ) |
Incorporated
by reference from the Form 10-Q for the period ended June 30,
2006 filed on September 14, 2007.
|
|
(15 | ) |
Incorporated
by reference from the Form 10-Q filed on April 30,
2003.
|
|
(16 | ) |
Incorporated
by reference from the Form 10-K405 filed on December 23,
1999.
|
|
(17 | ) |
Incorporated
by reference from the Form 10-Q filed on April 29, 2005. Assigned to
Qimonda in October 2006 in connection with Infineon’s spin-off of
Qimonda.
|
|
(18 | ) |
Incorporated
by reference from the Form 10-Q filed on October 31,
2008.
|
|
(19 | ) |
Incorporated
by reference from the Form S-3 filed on June 22, 2009.
|
|
Table
of Content
|
||
Page
|
||
ARTICLE I
THE ACQUISITION
TRANSACTIONS
|
2
|
|
1.1
|
Certain Definitions
|
2
|
1.2
|
Additional
Defined Terms
|
7
|
1.3
|
Purchase and
Sale of Assets
|
9
|
1.4
|
Assumption of
Certain Liabilities; Transferred Employees
|
10
|
1.5
|
The
Closing
|
11
|
1.6
|
Payment of
Purchase Price; Instruments of Sale
|
11
|
1.7
|
Allocation of
Purchase Price
|
12
|
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER PARTIES
|
13
|
|
2.1
|
Organization;
Power
|
13
|
2.2
|
Capital
Structure
|
13
|
2.3
|
Subsidiaries
|
14
|
2.4
|
Authority
|
14
|
2.5
|
No
Conflict
|
14
|
2.6
|
Consents
|
15
|
2.7
|
Tax
Matters
|
15
|
2.8
|
Restrictions
on Business Activities
|
16
|
2.9
|
Title
to Properties; Absence of Liens and Encumbrances
|
16
|
2.10
|
Intellectual
Property
|
17
|
2.11
|
Agreements,
Contracts and Commitments
|
23
|
2.12
|
Interested
Party Transactions
|
25
|
2.13
|
Governmental
Authorization
|
25
|
2.14
|
Litigation
|
25
|
2.15
|
Environmental
Matters
|
25
|
2.16
|
Brokers’
and Finders’ Fees
|
25
|
2.17
|
Employee
Benefit Plans and Compensation
|
25
|
2.18
|
Insurance
|
28
|
2.19
|
Compliance
with Laws
|
28
|
2.20
|
Export
Control Laws
|
29
|
2.21
|
Solvency
|
29
|
2.22
|
Valid
Title
|
29
|
2.23
|
Corrupt
Practices
|
29
|
2.24
|
Complete
Copies of Materials
|
29
|
2.25
|
Representations
Complete
|
29
|
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER PARTIES
|
30
|
|
3.1
|
Organization;
Power
|
30
|
3.2
|
Authority
|
30
|
3.3
|
Conflicts
|
30
|
3.4
|
Consents
|
31
|
3.5
|
Adequacy
of Funds
|
31
|
3.6
|
Representations
Complete
|
31
|
ARTICLE IV
ADDITIONAL AGREEMENTS
|
31
|
|
4.1
|
Taking
of Necessary Action; Further Action; Access to Information
|
31
|
4.2
|
Confidentiality
|
33
|
4.3
|
Expenses
|
33
|
4.4
|
Public
Disclosure
|
34
|
4.5
|
Tax
Matters
|
34
|
4.6
|
Licensed
Intellectual Property Rights
|
35
|
4.7
|
Right
of First Refusal
|
36
|
4.8
|
Covenant
Not to Sue
|
37
|
4.9
|
Release
of Transferred Employees
|
37
|
4.10
|
Non-Solicitation
|
37
|
ARTICLE V
CONDITIONS TO THE ASSET PURCHASE
|
38
|
|
5.1
|
Conditions
to Obligations of Each Party to Effect the Asset Purchase
|
38
|
5.2
|
Conditions
to the Obligations of Buyer Parties
|
38
|
5.3
|
Conditions
to the Obligations of Seller Parties
|
40
|
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW
|
41
|
|
6.1
|
Survival
of Representations, Warranties and Covenants
|
41
|
6.2
|
Indemnification
|
41
|
6.3
|
Indemnification
Limitations
|
42
|
6.4
|
Escrow
Arrangements
|
43
|
6.5
|
No
Indemnification Limitations and Other Matters
|
44
|
ARTICLE VII
AMENDMENT AND WAIVER
|
45
|
|
7.1
|
Amendment
|
45
|
7.2
|
Extension;
Waiver
|
45
|
ARTICLE VIII
GENERAL PROVISIONS
|
45
|
|
8.1
|
Notices
|
45
|
8.2
|
Interpretation
|
47
|
8.3
|
Counterparts
|
47
|
8.4
|
Entire
Agreement; Assignment
|
47
|
8.5
|
Severability
|
47
|
8.6
|
Other
Remedies
|
48
|
8.7
|
Governing
Law
|
48
|
8.8
|
Rules
of Construction
|
48
|
8.9
|
WAIVER
OF JURY TRIAL
|
48
|
Exhibit
|
Description
|
Exhibit A
|
Parker
Employment Agreement
|
Exhibit
B
|
Pickett
Employment Agreement
|
Exhibit
C
|
Bill
of Sale
|
Exhibit
D
|
License
Agreement
|
Exhibit
E
|
Copyright
Co-Ownership Agreement
|
Exhibit
F
|
Transition
Services Agreement
|
Exhibit
G
|
Referral
Agreement
|
Exhibit
H
|
Rohm &
Haas Amendment
|
Exhibit
I-1
|
Form
of Patent Assignment
|
Exhibit
I-2
|
Form
of Copyright Assignment
|
Exhibit
J
|
Escrow
Agreement
|
Schedules
|
Description
|
Disclosure
Schedule
|
Seller
Disclosure Schedule
|
Schedule
I
|
Seller
Intellectual Property – Transferred Patents
|
Schedule
II
|
Seller
Intellectual Property – Transferred Know-How
|
Schedule
1.3(b)
|
Assumed
Contracts
|
Schedule
1.4(a)
|
Assumed
Liabilities
|
Schedule
4.6-1
|
Certain
Seller Party Patents
|
Schedule
4.6-2
|
Excluded
Entity List
|
Schedule
5.2(b)
|
Agreements
to be Terminated at Closing
|
Index
of Terms
|
Section
|
Acquisition
Transactions
|
Recitals
|
Agreement
|
Preamble
|
Allocation
|
1.7
|
Asset
Purchase
|
Recitals
|
Assignment
Instruments
|
5.2(j)
|
Assumed
Liabilities
|
1.4(a)
|
Background
License
|
4.6
|
Basket
Amount
|
6.3(b)
|
Books
and Records
|
1.3(c)
|
Business
Authorizations
|
2.13
|
Buyer
IP
|
Preamble
|
Buyer
Parent
|
Preamble
|
Buyer
Parties
|
Preamble
|
Buyer
R&D
|
Preamble
|
Buyer
Secretary Certificate
|
5.3(e)
|
Capital
Stock
|
4.7
|
Change
of Control
|
4.7
|
Charter
Documents
|
2.1
|
Closing
|
1.5
|
Closing
Date
|
1.5
|
COBRA
|
2.17(a)
|
Confidentiality
Agreement
|
4.2
|
Conflict
|
2.5
|
Consultant
Proprietary Information Agreement
|
2.10(x)
|
Contract(s)
|
2.5
|
Copyright
Co-Ownership
|
Recitals
|
Copyright
Co-Ownership Agreement
|
5.2(d)
|
Copyrights
|
1.1
|
Index
of Terms
|
Section
|
Counsel
|
4.1(b)
|
Disclosure
Schedule
|
Article
II
|
DOL
|
2.17(a)
|
Employee
Agreement
|
2.17(a)
|
Employee
Proprietary Information Agreement
|
2.10(x)
|
ERISA
|
2.17(a)
|
ERISA
Affiliate
|
2.17(a)
|
Escrow
Agreement
|
6.4(a)
|
Escrow
Amount
|
6.4(a)
|
Escrow
Fund
|
6.4(a)
|
Escrow
Period
|
6.4(b)
|
Exercise
Notice
|
4.7
|
Exercise
Period
|
4.7
|
FMLA
|
2.17(a)
|
HIPAA
|
2.17(a)
|
Inbound-Licenses
|
2.10(o)
|
Indemnified
Parties
|
6.2(a)
|
Intercompany-Licenses
|
2.10(o)
|
International
Employee Plan
|
2.17(a)
|
IP
Contracts
|
2.10(p)
|
IRS
|
2.17(a)
|
Lease
Agreements
|
2.9(a)
|
Leased
Real Property
|
2.9(a)
|
License
|
Recitals
|
License
Agreement
|
5.2(c)
|
Loss(es)
|
6.2(a)
|
NDAs
|
2.10(o)
|
Non-Paying
Party
|
4.5(b)(iii)
|
Offered
Assets
|
4.7
|
Officer’s
Certificate
|
6.4(a)
|
Outbound-Licenses
|
2.10(o)
|
Parker
Employment Agreement
|
Recitals
|
Patents
|
1.1
|
Paying
Party
|
4.5(b)(iii)
|
PBGC
|
2.17(a)
|
Pension
Plan
|
2.17(a)
|
Pickett
Employment Agreement
|
Recitals
|
PTO
|
1.1
|
Purchase
Price
|
1.6(a)
|
Purchased
Assets
|
1.3
|
Referral
Agreement
|
5.2(f)
|
Index
of Terms
|
Section
|
Referral
Services
|
Recitals
|
Retained
Liabilities
|
1.4(b)
|
Returns
|
2.7(b)(i)
|
Right
of First Refusal
|
4.7
|
Rohm &
Haas Amendment
|
5.2(i)
|
Seller
Employee Plan
|
2.17(a)
|
Seller
IP
|
Preamble
|
Seller
Parent
|
Preamble
|
Seller
Parties
|
Preamble
|
Seller
R&D
|
Preamble
|
Seller
Secretary Certificate
|
5.2(h)
|
Straddle
Period Tax
|
4.5(b)(iii)
|
Survival
Date
|
6.1
|
Tax(es)
|
2.7(a)
|
Third
Party Claim
|
6.4(c)
|
Third
Party Expenses
|
4.3
|
Trade
Secrets
|
1.1
|
Trademarks
|
1.1
|
Transfer
Notice
|
4.7
|
Transfer
Taxes
|
4.5(a)
|
Transferred
Employees
|
1.4(c)
|
Transition
Services
|
Recitals
|
Transition
Services Agreement
|
5.2(e)
|
Voting
Stock
|
4.7
|
Table
of Content
|
||
Page
|
||
ARTICLE
I SUMMARY OF BASIC LEASE
INFORMATION
|
1
|
|
ARTICLE
II PREMISES
|
3
|
|
Section
2.01
|
Demise
of Premises
|
3
|
Section
2.02
|
Common
Area
|
3
|
Section
2.03
|
Parking
|
4
|
Section
2.04
|
Construction
|
5
|
ARTICLE
III TERM
|
8
|
|
Section
3.01
|
Lease
Term
|
8
|
Section
3.02
|
Option
to Extend
|
8
|
Section
3.03
|
Early
Termination
Option
|
10
|
ARTICLE
IV RENT; TRIPLE NET
LEASE
|
11
|
|
Section
4.01
|
Base
Rent
|
11
|
Section
4.02
|
Abatement
of Base
Rent
|
11
|
Section
4.03
|
Payment
of
Rent
|
11
|
Section
4.04
|
Additional
Rent
|
11
|
Section
4.05
|
Operating
Expenses; Insurance Expenses; Real Estate
Taxes
|
12
|
Section
4.06
|
Tenant’s
Right to Review Supporting
Data
|
17
|
ARTICLE
V
USE
|
18
|
|
Section
5.01
|
Permitted
Use and Limitations on
Use
|
18
|
Section
5.02
|
Compliance
with
Laws
|
19
|
Section
5.03
|
Delivery
of
Premises
|
20
|
Section
5.04
|
Building
Security
|
21
|
Section
5.05
|
Rules
and
Regulations
|
21
|
Section
5.06
|
LEED
Certification
Requirements
|
21
|
Section
5.07
|
TDM
Requirements
|
22
|
ARTICLE
VI MAINTENANCE, REPAIRS AND
ALTERATIONS
|
22
|
|
Section
6.01
|
Maintenance
of Premises and
Building
|
22
|
Section
6.02
|
Maintenance
of Common
Areas
|
24
|
Page
|
||
Section
6.03
|
Alterations,
Additions and Improvements
|
24
|
Section
6.04
|
Covenant
Against Liens
|
25
|
ARTICLE
VII INSURANCE
|
26
|
|
Section
7.01
|
Property/Rental
Insurance for Premises
|
26
|
Section
7.02
|
Property
Insurance for Fixtures and Inventory
|
26
|
Section
7.03
|
Landlord’s
Liability Insurance
|
27
|
Section
7.04
|
Tenant’s
Liability Insurance
|
27
|
Section
7.05
|
Evidence
of Insurance
|
27
|
Section
7.06
|
Mutual
Waiver of Claims and Subrogation
Rights
|
28
|
Section
7.07
|
Indemnification
and
Exculpation
|
28
|
ARTICLE
VIII DAMAGE OR
DESTRUCTION
|
29
|
|
Section
8.01
|
Repair
of Damage by
Landlord
|
29
|
Section
8.02
|
Repair
Notice
|
29
|
Section
8.03
|
Landlord’s
Option To Repair or
Terminate
|
30
|
Section
8.04
|
Tenant’s
Option to
Terminate.
|
30
|
Section
8.05
|
Rent
Abatement Due to
Casualty.
|
30
|
Section
8.06
|
Damage
Near End of Lease
Term.
|
30
|
Section
8.07
|
Effective
Date of Termination; Rent
Apportionment.
|
31
|
Section
8.08
|
Waiver
of Civil Code
Remedies.
|
31
|
Section
8.09
|
No
Abatement of
Rentals.
|
31
|
Section
8.10
|
No
Liability for Tenant’s Alterations or Personal
Property.
|
31
|
ARTICLE
IX REAL PROPERTY
TAXES
|
32
|
|
Section
9.01
|
Payment
of
Taxes
|
32
|
Section
9.02
|
Proration
for Partial
Years
|
33
|
Section 9.03 | Personal Property Taxes | 33 |
ARTICLE
X
UTILITIES
|
34
|
|
ARTICLE
XI ASSIGNMENT AND
SUBLETTING
|
35
|
|
Section
11.01
|
Landlord’s
Consent
Required
|
35
|
Section
11.02
|
Tenant
Affiliates
|
35
|
Section
11.03
|
No
Release of
Tenant
|
36
|
Page
|
||
Section
11.04
|
Excess
Rent
|
36
|
Section
11.05
|
Information
to be Provided
|
36
|
Section
11.06
|
Landlord’s
Recapture Rights
|
37
|
ARTICLE
XII DEFAULTS; REMEDIES
|
38
|
|
Section
12.01
|
Defaults
|
38
|
Section
12.02
|
Remedies
|
39
|
Section
12.03
|
Default
by Landlord
|
40
|
Section
12.04
|
Late
Charges
|
40
|
Section
12.05
|
Landlord’s
Right to Perform Tenant’s Obligations
|
41
|
ARTICLE
XIII CONDEMNATION OF
PREMISES
|
41
|
|
Section
13.01
|
Total
Condemnation
|
41
|
Section
13.02
|
Partial
Condemnation
|
41
|
Section
13.03
|
Award
to
Tenant
|
42
|
ARTICLE
XIV ENTRY BY
LANDLORD
|
42
|
|
ARTICLE
XV ESTOPPEL
CERTIFICATE
|
43
|
|
Section
15.01
|
Estoppel
Certificate
|
43
|
Section
15.02
|
Failure
to
Deliver
|
43
|
ARTICLE
XVI LIMITATIONS ON LANDLORD’S
LIABILITY
|
43
|
|
ARTICLE
XVII GENERAL
PROVISIONS
|
44
|
|
Section
17.01
|
Severability
|
44
|
Section
17.02
|
Agreed
Rate Interest on Past-Due
Obligations
|
44
|
Section
17.03
|
Time
of
Essence
|
44
|
Section
17.04
|
Submission
of
Lease
|
44
|
Section
17.05
|
Incorporation
of Prior Agreements and
Exhibits
|
44
|
Section
17.06
|
Notices
|
45
|
Section
17.07
|
Waivers
|
45
|
Section
17.08
|
Recording
|
46
|
Section
17.09
|
Surrender
of Possession; Holding
Over
|
46
|
Section
17.10
|
Cumulative
Remedies
|
47
|
Section
17.11
|
Covenants
and
Conditions
|
47
|
Page
|
||
Section
17.12
|
Binding
Effect; Choice of Law
|
47
|
Section
17.13
|
Lease
to be Subordinate
|
47
|
Section
17.14
|
Attorneys’
Fees
|
48
|
Section
17.15
|
Signs
|
48
|
Section
17.16
|
Merger
|
49
|
Section
17.17
|
Quiet
Possession
|
49
|
Section
17.18
|
Easements
|
50
|
Section
17.19
|
Authority
|
50
|
Section
17.20
|
Force
Majeure
Delays
|
50
|
Section
17.21
|
Hazardous
Materials
|
50
|
Section
17.22
|
Intentionally
Deleted
|
52
|
Section
17.23
|
Brokers
|
52
|
Section
17.24
|
Survival
|
53
|
Section
17.25
|
Rooftop
Communications
Equipment
|
53
|
Section
17.26
|
Right
of First
Offer
|
53
|
Section
17.27
|
List
of
Exhibits
|
55
|
TERMS OF LEASE
|
DESCRIPTION
|
Date:
|
December 15,
2009
|
Premises
(Article II).
|
|
Premises:
|
An
agreed upon 125,210 rentable square feet of space consisting of a portion
of Floor 1 and all of Floors 6, 7 and 8 of the Building, as further set
forth in
Exhibit A
,
but
subject to the terms of Section 2.04 below.
|
Building:
|
That
certain eight (8) story building commonly known as Building C located at
1040 Enterprise Way in Sunnyvale, California 94089, which
consists of an agreed upon 317,166 rentable square feet, as depicted in
Exhibit A
.
|
Lot
1:
|
Those
three (3) certain buildings, including the Building, commonly known as
Buildings A, B and C located at 1000-1040 Enterprise Way Sunnyvale,
California 94089, which consist of an agreed upon 951,498
rentable square feet, together with the land on which the same are
situated, and related appurtenances, as depicted in
Exhibit A
.
|
Project:
|
The
Project currently consists of six (6) buildings commonly known as
Buildings A, B and C on Lot 1 and Buildings E, F and G on Lot 3, located
at 1000-1160 Enterprise Way, Sunnyvale, California, which currently
consist of approximately 1,628,096 rentable square feet, together with the
land on which the same are situated, and related appurtenances, including
an Amenities Parcel, commonly known as Building H and the related property
located at 1060 Enterprise Way Sunnyvale, CA. The Project is
commonly referred to as “Moffett Towers,” as depicted in
Exhibit A
.
As and when construction there of is completed, the Project will also
consist of a seventh (7
th
)
building known as Building D on Lot 3 and Tenant’s Share will be adjusted
pursuant to the terms of Section 4.05 (c) hereof.
|
Parking
Spaces
(Section
2.03):
|
Three
Hundred Seventy-Nine (379) non-exclusive parking
spaces. Parking spaces shall be located on Lot 1 only and
otherwise in a combination of surface and structured
parking.
|
Lease
Term
(Article III).
|
|
Commencement
Date:
|
The
earlier to occur of (i) the date upon which Tenant first commences to
conduct business in the Premises, or (ii) July 1, 2010, subject to
extension pursuant to the terms and conditions of the work letter attached
hereto as
Exhibit C
(the
“
Work Letter
”)
(the “
Commencement
Date
”).
|
Expiration
Date:
|
The
last day of the one hundred twentieth (120
th
)
full calendar month after the Commencement Date.
|
Option(s)
to Extend:
|
Tenant
is given two (2) options to extend the Lease Term (each, an “
Option to Extend
”) for a
period of sixty (60) months each (each, an “
Extended Term
”)
immediately following the date on which the initial Lease Term or First
Extended Term, as applicable, would otherwise expire.
|
EXHIBIT A
|
Real
Property Legal Description, Project Site Plan and Premises Floor
Plan
|
EXHIBIT B
|
Memorandum
of Commencement of Lease Term and Schedule of Base
Rent
|
EXHIBIT C
|
Work
Letter Agreement for Tenant Improvements and Interior Specification
Standards
|
EXHIBIT D
|
Signage
Exhibit
|
EXHIBIT E
|
SNDA
|
EXHIBIT F
|
Estoppel
Certificate
|
EXHIBIT
G
|
Rules
and Regulations
|
EXHIBIT H
|
Shipping/Loading
Access
|
EXHIBIT I
|
Intentionally
Deleted
|
EXHIBIT
J
|
Sign
Locations
|
EXHIBIT
K
|
Superior
Rights
|
LANDLORD:
MT
SPE, LLC, a Delaware limited liability company
By: Moffett
Towers, LLC, a Delaware limited liability company
Its: Sole
Member
By: Moffett
Towers Management Inc., a Delaware corporation
Its: Managing
Member
By: /s/ Jay
Paul
Jay
Paul, President
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ADDRESS:
c/o
Jay Paul Company
350
California Street, Suite 1905
San
Francisco, CA 94104-1432
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TENANT:
RAMBUS
INC.,
a
Delaware corporation
By: /s/ Michael
Schroeder
Name: Michael
Schroeder
(Type or Print Name)
Title: Vice
President, Human Resources and
Facilities
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ADDRESS:
4440
El Camino Real
Los
Altos, CA 94022
Attn: Director
of Global Facilities and Real Estate
(Before
Commencement Date)
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1040
Enterprise Way
Sunnyvale,
California 94089
Attn:
Director of Global Facilities and Real Estate
(After
Commencement Date)
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Date:
February 25, 2010
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By:
/s/ Harold
Hughes
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Name: Harold
Hughes
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Title: Chief
Executive Officer and President
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Date:
February 25, 2010
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By:
/s/ Satish Rishi
|
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Name: Satish
Rishi
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Title: Senior
Vice President, Finance and Chief Financial
Officer
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By:
/s/ Harold
Hughes
|
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Name: Harold
Hughes
|
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Title: Chief
Executive Officer and President
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By:
/s/ Satish Rishi
|
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Name: Satish
Rishi
|
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Title: Senior
Vice President, Finance and Chief Financial
Officer
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