(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, 2013
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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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1050 Enterprise Way, Suite 700
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Sunnyvale, California
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94089
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(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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(The NASDAQ Global Select Market)
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Large accelerated filer
þ
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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Success in the markets of our products and services or our customers' products;
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•
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Sources of competition;
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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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Success in signing and renewing license agreements;
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•
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Technology product development;
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Outcome and effect of current and potential future intellectual property litigation and other significant litigation;
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Dispositions, acquisitions, mergers or strategic transactions and our related integration efforts;
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Impairment of goodwill and long-lived assets;
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Pricing policies of our customers;
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Changes in our strategy and business model;
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Deterioration of financial health of commercial counterparties and their ability to meet their obligations to us;
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Engineering, marketing and general and administration expenses;
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Contract revenue;
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Operating results;
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International licenses and operations;
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Effects of changes in the economy and credit market on our industry and business;
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Ability to identify, attract, motivate and retain qualified personnel;
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Growth in our business;
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Methods, estimates and judgments in accounting policies;
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Adoption of new accounting pronouncements;
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Effective tax rates;
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Realization of deferred tax assets/release of deferred tax valuation allowance;
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Trading price of our common stock;
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Internal control environment;
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Corporate governance;
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The level and terms of our outstanding debt;
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Resolution of the governmental agency matters involving us;
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Litigation expenses;
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Protection of intellectual property;
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Terms of our licenses and amounts owed under license agreements;
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Indemnification and technical support obligations;
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Refinancing debt;
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Issuances of our securities, which could involve restrictive covenants or be dilutive to our existing stockholders; and
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Likelihood of paying dividends or repurchasing securities.
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Advanced Micro Devices Inc.
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AMD
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Broadcom Corporation
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Broadcom
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Cooper Lighting, LLC
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Cooper Lighting
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Cryptography Research, Inc.
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CRI
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Elpida Memory, Inc.
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Elpida
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Freescale Semiconductor Inc.
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Freescale
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Fujitsu Limited
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Fujitsu
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General Electric Company
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GE
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Hewlett-Packard Company
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Hewlett-Packard
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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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Lighting and Display Technology
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LDT
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LSI Corporation
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LSI
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MediaTek Inc.
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MediaTek
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Memory and Interfaces Division
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MID
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Micron Technology, Inc.
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Micron
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Mobile Technology Division
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MTD
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Nanya Technology Corporation
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Nanya
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NVIDIA Corporation
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NVIDIA
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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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Renesas Electronics
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Renesas
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Samsung Electronics Co., Ltd.
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Samsung
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SK hynix, Inc.
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SK hynix
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Sony Computer Electronics
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Sony
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ST Microelectronics N.V.
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STMicroelectronics
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Toshiba Corporation
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Toshiba
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Item 1.
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Business
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Name
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Age
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Position and Business Experience
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Ronald D. Black, Ph.D.
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50
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Chief Executive Officer and President. Dr. Black has served as our chief executive officer and president since June 2012 and as a director since July 2012. Dr. Black was previously the Managing Director of R.D. Black & Company, a consulting firm, since August 2011. From September 2010 to August 2011, Dr. Black was the Chief Executive Officer of MobiWire, formerly Sagem Wireless, a privately-held mobile handset company headquartered near Paris, France that offers products and services to original equipment manufacturers and mobile network operators in the mobile phone marketplace. From June 2009 to October 2010, Dr. Black served as Chairman and CEO of UPEK, Inc. Dr. Black currently serves as a board member of EnOcean GmbH, a German-based company that manufactures and markets energy harvesting technology, sensors, and radio frequency communication. From September 2010 to November 2012, he served as a board member of AuthenTec, Inc., which he joined following the AuthenTec-UPEK merger in September 2010 and from 2007 to 2013, he served as a board member of Inside Contactless, a France-based company engaged in the semiconductors and information technology industry. From September 2004 to June 2009, he was chief executive officer of Wavecom S.A., a publicly traded French wireless solutions company. Dr. Black holds a Bachelor of Science, a Masters of Science, and a Ph.D. in materials science and engineering from Cornell University in Ithaca, N.Y.
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Kevin Donnelly
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52
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Senior Vice President, GM, Memory & Interfaces. Mr. Donnelly joined us in 1993. Mr. Donnelly has served in his current position since August 2012. From November 2008 to August 2012, Mr. Donnelly served as Senior Vice President, IP Strategy, from March 2006 to November 2008, as Senior Vice President, Engineering and from January 2005 to March 2006, as co-vice president of Engineering. From October 2002 to January 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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Jae Kim
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43
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Senior Vice President and General Counsel. Mr. Kim has served as the senior vice president and general counsel since February 2013 and as our vice president, corporate legal since joining us in July 2010. Prior to his tenure at Rambus, Mr. Kim held senior legal positions at Aricent Inc., a privately-held communications technology company and Electronics for Imaging Inc., a digital printing technology company. Mr. Kim has also had significant experience in private practice with the law firm of Wilson Sonsini Goodrich & Rosati, P.C., where he advised high technology and emerging growth companies on mergers and acquisitions, private financings, public offerings, securities compliance, public company reporting and corporate governance. Mr. Kim began his legal career as an attorney with the United States Securities and Exchange Commission, Division of Corporation Finance, in Washington, DC. Mr. Kim is a member of both the California State Bar and New York State Bar, and received a J.D. from the American University, Washington College of Law, and his bachelor's degree from Boston University.
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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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54
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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 27-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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Martin Scott, Ph.D.
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58
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Senior Vice President, Chief Technology Officer. Dr. Scott has served in his current position since August 2012. From August 2010 until August 2012, Dr. Scott served as our Senior Vice President, GM, New Business Group and from December 2006 to August 2010, as our Senior Vice President, Engineering. 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 Stark
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45
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Senior Vice President, Corporate Strategy and M&A. Ms. Stark has served in her current position since August 2012. From April 2008 to August 2012, Ms. Stark served as Senior Vice President, Corporate Development, from February 2005 to April 2008 as Senior Vice President, Platform Solutions and from October 2002 to February 2005 as vice president, Memory Interface Division. Ms. Stark held various business and management positions before becoming vice president, Memory Interface Division in October 2002. Prior to joining us, 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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Item 1A.
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Risk Factors
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•
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expenditure of significant financial and research and development resources in efforts to analyze, correct, eliminate or work-around breaches, errors or defects or to address and eliminate vulnerabilities;
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•
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financial liability to customers for breach of certain contract provisions;
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•
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loss of existing or potential customers;
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•
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delayed or lost revenue;
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•
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delay or failure to attain market acceptance;
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•
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negative publicity, which would harm our reputation; and
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•
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litigation, regulatory inquiries or investigations that would be costly and harm our reputation.
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•
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hiring, maintaining and managing a workforce and facilities remotely and under various legal systems;
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•
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natural disasters, acts of war, terrorism, widespread illness or security breaches;
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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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adverse tax 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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unanticipated changes in foreign government laws and regulations;
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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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social, political and economic instability;
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•
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geopolitical issues, including changes in diplomatic and trade relationships; and
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•
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cultural differences in the conduct of business both with customers and in conducting business in our international facilities and international sales offices.
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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 and technology companies' acceptance of our products, including the results of our efforts to expand into new target markets;
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•
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our signing or not signing new licenses and the loss of strategic relationships with any customer;
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•
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announcements of our technological innovations or new products by us, our customers or our competitors;
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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;
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•
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positive or negative reports by securities analysts as to our expected financial results and business developments;
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•
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developments with respect to patents or proprietary rights and other events or factors;
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•
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new litigation and the unpredictability of litigation results or settlements;
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•
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trading activity related to our share repurchase plans; and
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•
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issuance of additional securities by us, including in acquisitions.
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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 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 in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due, including the remaining aggregate principal amount of the 2014 Notes at maturity in June 2014 and the remaining aggregate principal amount of the 2018 Notes at maturity in August 2018; and
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•
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we may be required to make cash payments upon any conversion of the Notes, which would reduce our cash on hand.
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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, which means that a stockholder rights plan could be implemented by our board;
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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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our stockholders have no authority to call special meetings of stockholders; 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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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 or enforcing patents;
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•
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changes in law will not be implemented, or changes in interpretation of such laws will occur, that will affect our ability to protect and enforce our patents and other intellectual property, including as a result of the passage of the America Invents Act of 2011 (which codifies several significant changes to the U.S. patent laws, including changing from a “first to invent” to a “first inventor to file” system, limiting where a patentee may file a patent suit, requiring the apportionment of patent damages, replacing interference proceedings with derivation actions, and creating a post-grant opposition process to challenge patents after they have issued);
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•
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new legal theories and strategies utilized by our competitors will not be successful;
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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; or
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•
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factors such as difficulty in obtaining cooperation from inventors, pre-existing challenges or litigation, or license or other contract issues will not present additional challenges in securing protection with respect to patents and other intellectual property that we acquire.
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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Number of
Offices
Under Lease
|
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Location
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Primary Use
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6
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United States
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Sunnyvale, CA (2) (Corporate Headquarters)
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Executive and administrative offices, research and development, sales and marketing and service functions
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Chapel Hill, NC
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Research and development
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Brecksville, OH (2)
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Research and development and prototyping facility
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San Francisco, CA
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Research and development
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1
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Bangalore, India
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Administrative offices, research and development and service functions
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1
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Tokyo, Japan
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Business development
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1
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Seoul, Korea
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Business development
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1
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Paris, France
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|
Research and development
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
|
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
Year Ended
|
|
Year Ended
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||||||||||||
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December 31, 2013
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December 31, 2012
|
||||||||||||
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High
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Low
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|
High
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Low
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||||||||
First Quarter
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$
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6.27
|
|
|
$
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4.80
|
|
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$
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9.29
|
|
|
$
|
6.28
|
|
Second Quarter
|
$
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8.99
|
|
|
$
|
5.31
|
|
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$
|
6.48
|
|
|
$
|
4.16
|
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Third Quarter
|
$
|
10.85
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|
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$
|
7.95
|
|
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$
|
6.10
|
|
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$
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3.78
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Fourth Quarter
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$
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10.57
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$
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8.15
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$
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5.65
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$
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4.01
|
|
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
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Among Rambus Inc., the NASDAQ Composite Index,
|
and the RDG Semiconductor Composite Index
|
|
|
12/08
|
12/09
|
12/10
|
12/11
|
12/12
|
12/13
|
Rambus Inc.
|
100.00
|
153.27
|
128.64
|
47.42
|
30.59
|
59.48
|
NASDAQ Composite
|
100.00
|
144.88
|
170.58
|
171.30
|
199.99
|
283.39
|
RDG Semiconductor Composite
|
100.00
|
159.67
|
182.24
|
176.00
|
178.51
|
236.96
|
Item 6.
|
Selected Financial Data
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2013 (1) (2)
|
|
2012 (1)
|
|
2011 (2)
|
|
2010 (2)
|
|
2009
|
||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||
Total revenue
|
$
|
271,501
|
|
|
$
|
234,051
|
|
|
$
|
312,363
|
|
|
$
|
323,390
|
|
|
$
|
113,007
|
|
Net income (loss)
|
$
|
(33,748
|
)
|
|
$
|
(134,336
|
)
|
|
$
|
(43,053
|
)
|
|
$
|
150,917
|
|
|
$
|
(92,186
|
)
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(0.30
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
1.34
|
|
|
$
|
(0.88
|
)
|
Diluted
|
$
|
(0.30
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
1.30
|
|
|
$
|
(0.88
|
)
|
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
387,662
|
|
|
$
|
203,330
|
|
|
$
|
289,456
|
|
|
$
|
512,009
|
|
|
$
|
460,193
|
|
Total assets
|
$
|
713,379
|
|
|
$
|
587,812
|
|
|
$
|
693,654
|
|
|
$
|
663,172
|
|
|
$
|
555,869
|
|
Convertible notes
|
$
|
273,676
|
|
|
$
|
147,556
|
|
|
$
|
133,493
|
|
|
$
|
121,500
|
|
|
$
|
248,044
|
|
Stockholders’ equity
|
$
|
340,229
|
|
|
$
|
321,594
|
|
|
$
|
429,794
|
|
|
$
|
334,783
|
|
|
$
|
255,327
|
|
(1)
|
The net loss for the years ended December 31, 2013 and 2012 included $17.8 million and $35.5 million, respectively, of impairment of goodwill and long-lived assets.
|
(2)
|
The net income (loss) for the years ended December 31, 2013, 2011 and 2010 included $0.5 million, $6.2 million and $126.8 million, respectively, of gain from settlement which was reflected as a reduction of operating costs and expenses.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Years Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Revenue:
|
|
|
|
|
|
|||
Royalties
|
97.3
|
%
|
|
99.3
|
%
|
|
95.7
|
%
|
Contract and other revenue
|
2.7
|
%
|
|
0.7
|
%
|
|
4.3
|
%
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses:
|
|
|
|
|
|
|||
Cost of revenue*
|
12.2
|
%
|
|
12.1
|
%
|
|
7.7
|
%
|
Research and development*
|
43.5
|
%
|
|
60.0
|
%
|
|
37.0
|
%
|
Marketing, general and administrative*
|
28.2
|
%
|
|
48.1
|
%
|
|
52.6
|
%
|
Restructuring charges
|
2.0
|
%
|
|
3.1
|
%
|
|
—
|
%
|
Impairment of goodwill and long-lived assets
|
6.5
|
%
|
|
15.2
|
%
|
|
—
|
%
|
Gain from sale of intellectual property
|
(0.5
|
)%
|
|
—
|
%
|
|
—
|
%
|
Gain from settlement
|
(0.2
|
)%
|
|
—
|
%
|
|
(2.0
|
)%
|
Costs of restatement and related legal activities, net
|
0.0
|
%
|
|
0.1
|
%
|
|
5.2
|
%
|
Total operating costs and expenses
|
91.7
|
%
|
|
138.6
|
%
|
|
100.5
|
%
|
Operating income (loss)
|
8.3
|
%
|
|
(38.6
|
)%
|
|
(0.5
|
)%
|
Interest income and other income, net
|
(0.6
|
)%
|
|
0.0
|
%
|
|
0.2
|
%
|
Interest expense
|
(12.1
|
)%
|
|
(11.8
|
)%
|
|
(8.0
|
)%
|
Interest and other income (expense), net
|
(12.7
|
)%
|
|
(11.8
|
)%
|
|
(7.8
|
)%
|
Loss before income taxes
|
(4.4
|
)%
|
|
(50.4
|
)%
|
|
(8.3
|
)%
|
Provision for income taxes
|
8.0
|
%
|
|
7.0
|
%
|
|
5.5
|
%
|
Net loss
|
(12.4
|
)%
|
|
(57.4
|
)%
|
|
(13.8
|
)%
|
* Includes stock-based compensation:
|
|
|
|
|
|
|||
Cost of revenue
|
0.0
|
%
|
|
0.0
|
%
|
|
0.2
|
%
|
Research and development
|
2.4
|
%
|
|
4.1
|
%
|
|
3.4
|
%
|
Marketing, general and administrative
|
3.1
|
%
|
|
5.5
|
%
|
|
5.4
|
%
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Total Revenue
|
|
|
|
|
|
|
|
|
|
||||||||
Royalties
|
$
|
264.1
|
|
|
$
|
232.4
|
|
|
$
|
299.0
|
|
|
13.7
|
%
|
|
(22.3
|
)%
|
Contract and other revenue
|
7.4
|
|
|
1.7
|
|
|
13.4
|
|
|
NM*
|
|
|
NM*
|
|
|||
Total revenue
|
$
|
271.5
|
|
|
$
|
234.1
|
|
|
$
|
312.4
|
|
|
16.0
|
%
|
|
(25.1
|
)%
|
*
|
NM — percentage is not meaningful
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Engineering costs
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
7.3
|
|
|
$
|
0.7
|
|
|
$
|
4.9
|
|
|
NM*
|
|
|
(86.9
|
)%
|
Amortization of intangible assets
|
25.9
|
|
|
27.7
|
|
|
18.6
|
|
|
(6.5
|
)%
|
|
48.9
|
%
|
|||
Stock-based compensation
|
0.0
|
|
|
0.0
|
|
|
0.6
|
|
|
0.0
|
%
|
|
(96.5
|
)%
|
|||
Total cost of revenue
|
33.2
|
|
|
28.4
|
|
|
24.1
|
|
|
17.1
|
%
|
|
17.8
|
%
|
|||
Research and development
|
111.4
|
|
|
131.0
|
|
|
105.2
|
|
|
(14.9
|
)%
|
|
24.5
|
%
|
|||
Stock-based compensation
|
6.6
|
|
|
9.5
|
|
|
10.5
|
|
|
(31.0
|
)%
|
|
(9.2
|
)%
|
|||
Total research and development
|
118.0
|
|
|
140.5
|
|
|
115.7
|
|
|
(16.0
|
)%
|
|
21.4
|
%
|
|||
Total engineering costs
|
$
|
151.2
|
|
|
$
|
168.9
|
|
|
$
|
139.8
|
|
|
(10.5
|
)%
|
|
20.8
|
%
|
*
|
NM — percentage is not meaningful
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Marketing, general and administrative costs
|
|
|
|
|
|
|
|
|
|
||||||||
Marketing, general and administrative costs
|
$
|
70.7
|
|
|
$
|
86.4
|
|
|
$
|
86.2
|
|
|
(18.1
|
)%
|
|
0.2
|
%
|
Litigation expense
|
(2.6
|
)
|
|
13.2
|
|
|
61.0
|
|
|
NM*
|
|
|
(78.3
|
)%
|
|||
Stock-based compensation
|
8.3
|
|
|
13.0
|
|
|
16.9
|
|
|
(35.6
|
)%
|
|
(23.2
|
)%
|
|||
Total marketing, general and administrative costs
|
$
|
76.4
|
|
|
$
|
112.6
|
|
|
$
|
164.1
|
|
|
(32.1
|
)%
|
|
(31.4
|
)%
|
*
|
NM — percentage is not meaningful
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
|||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
|||||||
|
(Dollars in millions)
|
|
|
|
|
|||||||||||
Restructuring charges
|
$
|
5.5
|
|
|
$
|
7.3
|
|
|
$
|
—
|
|
|
(24.0
|
)%
|
|
N/A*
|
*
|
N/A — not applicable
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
|||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
|||||||
|
(Dollars in millions)
|
|
|
|
|
|||||||||||
Impairment of goodwill and long-lived assets
|
$
|
17.8
|
|
|
$
|
35.5
|
|
|
$
|
—
|
|
|
(50.0
|
)%
|
|
N/A*
|
*
|
N/A — not applicable
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||
Gain from sale of intellectual property
|
$
|
1.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A*
|
|
N/A*
|
*
|
N/A — not applicable
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
|||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
|||||||
|
(Dollars in millions)
|
|
|
|
|
|||||||||||
Gain from settlement
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
6.2
|
|
|
N/A*
|
|
(100.0
|
)%
|
*
|
N/A — not applicable
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Costs of restatement and related legal activities, net
|
$
|
0.0
|
|
|
$
|
0.2
|
|
|
$
|
16.2
|
|
|
(92.2
|
)%
|
|
(98.5
|
)%
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Interest income and other income (expense), net
|
$
|
(1.6
|
)
|
|
$
|
0.0
|
|
|
$
|
0.5
|
|
|
NM*
|
|
|
(89.5
|
)%
|
Interest expense
|
(32.9
|
)
|
|
(27.5
|
)
|
|
(24.8
|
)
|
|
19.5
|
%
|
|
10.8
|
%
|
|||
Interest and other income (expense), net
|
$
|
(34.5
|
)
|
|
$
|
(27.5
|
)
|
|
$
|
(24.3
|
)
|
|
25.6
|
%
|
|
13.1
|
%
|
*
|
NM — percentage is not meaningful
|
|
Years Ended December 31,
|
|
2012 to 2013
|
|
2011 to 2012
|
||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
Change
|
|
Change
|
||||||||
|
(Dollars in millions)
|
|
|
|
|
||||||||||||
Provision for income taxes
|
$
|
21.7
|
|
|
$
|
16.5
|
|
|
$
|
17.3
|
|
|
32.1
|
%
|
|
(4.6
|
)%
|
Effective tax rate
|
(180.8
|
)%
|
|
(14.0
|
)%
|
|
(66.9
|
)%
|
|
|
|
|
*
|
NM — percentage is not meaningful
|
|
December 31,
2013
|
|
December 31, 2012
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
338.7
|
|
|
$
|
149.0
|
|
Marketable securities
|
49.0
|
|
|
54.3
|
|
||
Total cash, cash equivalents, and marketable securities
|
$
|
387.7
|
|
|
$
|
203.3
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
51.3
|
|
|
$
|
(17.5
|
)
|
|
$
|
53.0
|
|
Net cash provided by (used in) investing activities
|
$
|
(2.3
|
)
|
|
$
|
2.6
|
|
|
$
|
(24.1
|
)
|
Net cash provided by (used in) financing activities
|
$
|
140.8
|
|
|
$
|
1.7
|
|
|
$
|
(81.9
|
)
|
|
Total
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
Contractual obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Imputed financing obligation (2)
|
$
|
40,260
|
|
|
$
|
5,874
|
|
|
$
|
6,010
|
|
|
$
|
6,156
|
|
|
$
|
6,302
|
|
|
$
|
6,447
|
|
|
$
|
9,471
|
|
Leases and other contractual obligations
|
8,456
|
|
|
3,753
|
|
|
2,108
|
|
|
1,237
|
|
|
1,018
|
|
|
340
|
|
|
—
|
|
|||||||
Software licenses (3)
|
8,715
|
|
|
5,477
|
|
|
2,865
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Acquisition retention bonuses (4)
|
18,083
|
|
|
18,013
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Convertible notes
|
310,500
|
|
|
172,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,000
|
|
|
—
|
|
|||||||
Interest payments related to convertible notes
|
12,076
|
|
|
5,865
|
|
|
1,553
|
|
|
1,553
|
|
|
1,553
|
|
|
1,552
|
|
|
—
|
|
|||||||
Total
|
$
|
398,090
|
|
|
$
|
211,482
|
|
|
$
|
12,606
|
|
|
$
|
9,319
|
|
|
$
|
8,873
|
|
|
$
|
146,339
|
|
|
$
|
9,471
|
|
(1)
|
The above table does not reflect possible payments in connection with uncertain tax benefits of approximately
$18.8 million
including
$12.6 million
recorded as a reduction of long-term deferred tax assets and
$6.2 million
in long-term income taxes payable, as of
December 31, 2013
. As noted in Note 17, “Income Taxes,” of Notes to Consolidated Financial Statements of this Form 10-K, 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.
|
(2)
|
With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the Consolidated Balance Sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. Additionally, the amount includes the amended Ohio lease and the amended Sunnyvale lease.
|
(3)
|
We have commitments with various software vendors for non-cancellable license agreements generally having terms longer than
one
year. The above table summarizes those contractual obligations as of
December 31, 2013
which are also presented on our Consolidated Balance Sheet under current and other long-term liabilities.
|
(4)
|
In connection with acquisitions, we are obligated to pay retention bonuses to certain employees and contractors, subject to certain eligibility and acceleration provisions including the condition of employment. The remaining
$16.9 million
of CRI retention bonuses payable on June 3, 2014 will be paid in cash or stock at our election.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
(i)
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
|
Page
|
|
/s/ PricewaterhouseCoopers LLP
|
San Jose, California
|
|
February 21, 2014
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands, except shares and per share amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
338,696
|
|
|
$
|
148,984
|
|
Marketable securities
|
48,966
|
|
|
54,346
|
|
||
Accounts receivable
|
2,251
|
|
|
529
|
|
||
Prepaids and other current assets
|
8,253
|
|
|
10,529
|
|
||
Deferred taxes
|
205
|
|
|
788
|
|
||
Total current assets
|
398,371
|
|
|
215,176
|
|
||
Intangible assets, net
|
117,172
|
|
|
153,173
|
|
||
Goodwill
|
116,899
|
|
|
124,969
|
|
||
Property, plant and equipment, net
|
72,642
|
|
|
86,905
|
|
||
Deferred taxes, long term
|
4,797
|
|
|
4,458
|
|
||
Other assets
|
3,498
|
|
|
3,131
|
|
||
Total assets
|
$
|
713,379
|
|
|
$
|
587,812
|
|
LIABILITIES & STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
7,001
|
|
|
$
|
7,918
|
|
Accrued salaries and benefits
|
33,448
|
|
|
23,992
|
|
||
Accrued litigation expenses
|
498
|
|
|
9,822
|
|
||
Convertible notes, short-term
|
164,047
|
|
|
—
|
|
||
Other accrued liabilities
|
7,848
|
|
|
12,402
|
|
||
Total current liabilities
|
212,842
|
|
|
54,134
|
|
||
Convertible notes, long-term
|
109,629
|
|
|
147,556
|
|
||
Long-term imputed financing obligation
|
39,349
|
|
|
45,919
|
|
||
Long-term income taxes payable
|
6,561
|
|
|
6,533
|
|
||
Other long-term liabilities
|
4,769
|
|
|
12,076
|
|
||
Total liabilities
|
373,150
|
|
|
266,218
|
|
||
Commitments and contingencies (Notes 12 and 18)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Convertible preferred stock, $.001 par value:
|
|
|
|
||||
Authorized: 5,000,000 shares; Issued and outstanding: no shares at December 31, 2013 and December 31, 2012
|
—
|
|
|
—
|
|
||
Common Stock, $.001 par value:
|
|
|
|
||||
Authorized: 500,000,000 shares; Issued and outstanding: 113,459,390 shares at December 31, 2013 and 111,525,021 shares at December 31, 2012
|
113
|
|
|
112
|
|
||
Additional paid in capital
|
1,128,148
|
|
|
1,075,761
|
|
||
Accumulated deficit
|
(787,727
|
)
|
|
(753,979
|
)
|
||
Accumulated other comprehensive loss
|
(305
|
)
|
|
(300
|
)
|
||
Total stockholders’ equity
|
340,229
|
|
|
321,594
|
|
||
Total liabilities and stockholders’ equity
|
$
|
713,379
|
|
|
$
|
587,812
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands, except per share amounts)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
Royalties
|
$
|
264,111
|
|
|
$
|
232,385
|
|
|
$
|
299,004
|
|
Contract and other revenue
|
7,390
|
|
|
1,666
|
|
|
13,359
|
|
|||
Total revenue
|
271,501
|
|
|
234,051
|
|
|
312,363
|
|
|||
Operating costs and expenses:
|
|
|
|
|
|
||||||
Cost of revenue*
|
33,215
|
|
|
28,372
|
|
|
24,085
|
|
|||
Research and development*
|
117,981
|
|
|
140,503
|
|
|
115,696
|
|
|||
Marketing, general and administrative*
|
76,448
|
|
|
112,594
|
|
|
164,131
|
|
|||
Restructuring charges
|
5,546
|
|
|
7,301
|
|
|
—
|
|
|||
Impairment of goodwill and long-lived assets
|
17,751
|
|
|
35,471
|
|
|
—
|
|
|||
Gain from sale of intellectual property
|
(1,388
|
)
|
|
—
|
|
|
—
|
|
|||
Gain from settlement
|
(535
|
)
|
|
—
|
|
|
(6,200
|
)
|
|||
Costs of restatement and related legal activities, net
|
19
|
|
|
244
|
|
|
16,187
|
|
|||
Total operating costs and expenses
|
249,037
|
|
|
324,485
|
|
|
313,899
|
|
|||
Operating income (loss)
|
22,464
|
|
|
(90,434
|
)
|
|
(1,536
|
)
|
|||
Interest income and other income (expense), net
|
(1,596
|
)
|
|
59
|
|
|
563
|
|
|||
Interest expense
|
(32,885
|
)
|
|
(27,510
|
)
|
|
(24,828
|
)
|
|||
Interest and other income (expense), net
|
(34,481
|
)
|
|
(27,451
|
)
|
|
(24,265
|
)
|
|||
Loss before income taxes
|
(12,017
|
)
|
|
(117,885
|
)
|
|
(25,801
|
)
|
|||
Provision for income taxes
|
21,731
|
|
|
16,451
|
|
|
17,252
|
|
|||
Net loss
|
$
|
(33,748
|
)
|
|
$
|
(134,336
|
)
|
|
$
|
(43,053
|
)
|
Net loss per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(0.30
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.39
|
)
|
Diluted
|
$
|
(0.30
|
)
|
|
$
|
(1.21
|
)
|
|
$
|
(0.39
|
)
|
Weighted average shares used in per share calculations:
|
|
|
|
|
|
||||||
Basic
|
112,415
|
|
|
110,769
|
|
|
110,041
|
|
|||
Diluted
|
112,415
|
|
|
110,769
|
|
|
110,041
|
|
* Includes stock-based compensation:
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
575
|
|
Research and development
|
$
|
6,597
|
|
|
$
|
9,546
|
|
|
$
|
10,519
|
|
Marketing, general and administrative
|
$
|
8,365
|
|
|
$
|
12,980
|
|
|
$
|
16,902
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Net loss
|
$
|
(33,748
|
)
|
|
$
|
(134,336
|
)
|
|
$
|
(43,053
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain (loss) on marketable securities, net of tax
|
(5
|
)
|
|
89
|
|
|
(27
|
)
|
|||
Total comprehensive loss
|
$
|
(33,753
|
)
|
|
$
|
(134,247
|
)
|
|
$
|
(43,080
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Gain (Loss)
|
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||
Balances at December 31, 2010
|
102,676
|
|
$
|
103
|
|
|
$
|
911,632
|
|
|
$
|
(576,590
|
)
|
|
$
|
(362
|
)
|
|
$
|
334,783
|
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(43,053)
|
|
—
|
|
|
(43,053)
|
|||||||
Unrealized loss on marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27)
|
|
(27)
|
|||||||
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
|
1,371
|
|
1
|
|
10,093
|
|
—
|
|
|
—
|
|
|
10,094
|
|||||||||
Net issuance of common stock due to CRI acquisition
|
6,220
|
|
|
6
|
|
|
86,137
|
|
—
|
|
|
—
|
|
|
86,143
|
|
||||||
Settlement of Samsung’s option related to the contingently redeemable common stock
|
—
|
|
|
—
|
|
|
13,500
|
|
—
|
|
|
—
|
|
|
13,500
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
28,354
|
|
—
|
|
|
—
|
|
|
28,354
|
|||||||
Balances at December 31, 2011
|
110,267
|
|
110
|
|
|
1,049,716
|
|
|
(619,643
|
)
|
|
(389
|
)
|
|
429,794
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(134,336
|
)
|
|
—
|
|
|
(134,336
|
)
|
|||||
Unrealized gain on marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
89
|
|||||||
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
|
1,258
|
|
2
|
|
3,499
|
|
—
|
|
|
—
|
|
|
3,501
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
22,546
|
|
—
|
|
|
—
|
|
|
22,546
|
|||||||
Balances at December 31, 2012
|
111,525
|
|
112
|
|
|
1,075,761
|
|
|
(753,979
|
)
|
|
(300
|
)
|
|
321,594
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(33,748)
|
|
|
|
(33,748)
|
||||||||
Unrealized loss on marketable securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
(5)
|
|||||||
Issuance of common stock upon exercise of options, equity stock and employee stock purchase plan
|
1,934
|
|
1
|
|
7,864
|
|
—
|
|
|
—
|
|
|
7,865
|
|||||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
14,981
|
|
—
|
|
|
—
|
|
|
14,981
|
|||||||
Equity component of 1.125% convertible senior notes due 2018
|
—
|
|
|
—
|
|
|
29,542
|
|
—
|
|
|
—
|
|
|
29,542
|
|||||||
Balances at December 31, 2013
|
113,459
|
|
$
|
113
|
|
|
$
|
1,128,148
|
|
|
$
|
(787,727
|
)
|
|
$
|
(305
|
)
|
|
$
|
340,229
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(33,748
|
)
|
|
$
|
(134,336
|
)
|
|
$
|
(43,053
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation
|
14,981
|
|
|
22,546
|
|
|
27,996
|
|
|||
Depreciation
|
15,451
|
|
|
13,190
|
|
|
11,894
|
|
|||
Amortization of intangible assets
|
28,909
|
|
|
30,345
|
|
|
20,191
|
|
|||
Non-cash interest expense and amortization of convertible debt issuance costs
|
19,296
|
|
|
14,695
|
|
|
12,622
|
|
|||
Impairment of goodwill and long-lived assets
|
17,751
|
|
|
35,471
|
|
|
—
|
|
|||
Impairment of investment in non-marketable equity security
|
1,400
|
|
|
—
|
|
|
—
|
|
|||
Deferred tax (benefit) provision
|
1,919
|
|
|
3,728
|
|
|
(246
|
)
|
|||
Non-cash restructuring
|
653
|
|
|
—
|
|
|
—
|
|
|||
Loss on disposal of property, plant and equipment
|
364
|
|
|
8
|
|
|
—
|
|
|||
Gain from sale of intellectual property
|
(1,388
|
)
|
|
—
|
|
|
—
|
|
|||
Non-cash acquisition of patents
|
—
|
|
|
—
|
|
|
(3,000
|
)
|
|||
Change in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(1,722
|
)
|
|
497
|
|
|
2,714
|
|
|||
Prepaids and other assets
|
6,174
|
|
|
8,379
|
|
|
8,810
|
|
|||
Accounts payable
|
(1,544
|
)
|
|
(9,664
|
)
|
|
10,452
|
|
|||
Accrued salaries and benefits and other accrued liabilities
|
(7,114
|
)
|
|
1,847
|
|
|
(741
|
)
|
|||
Accrued litigation expenses
|
(9,324
|
)
|
|
(680
|
)
|
|
6,442
|
|
|||
Income taxes payable
|
(716
|
)
|
|
(3,522
|
)
|
|
(1,047
|
)
|
|||
Net cash provided by (used in) operating activities
|
51,342
|
|
|
(17,496
|
)
|
|
53,034
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
(6,938
|
)
|
|
(21,809
|
)
|
|
(19,431
|
)
|
|||
Acquisition of intangible assets
|
(2,656
|
)
|
|
(1,700
|
)
|
|
(1,210
|
)
|
|||
Purchases of marketable securities
|
(125,554
|
)
|
|
(110,716
|
)
|
|
(173,996
|
)
|
|||
Maturities of marketable securities
|
119,600
|
|
|
183,086
|
|
|
337,880
|
|
|||
Proceeds from sale of marketable securities
|
11,020
|
|
|
—
|
|
|
33
|
|
|||
Proceeds from sale of intellectual property and property, plant and equipment
|
2,255
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(46,278
|
)
|
|
(167,381
|
)
|
|||
Net cash provided by (used in) investing activities
|
(2,273
|
)
|
|
2,583
|
|
|
(24,105
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of convertible senior notes
|
138,000
|
|
|
—
|
|
|
—
|
|
|||
Issuance costs related to issuance of convertible senior notes
|
(3,603
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds received from issuance of common stock under employee stock plans
|
8,391
|
|
|
4,103
|
|
|
12,282
|
|
|||
Payments under installment payment arrangement
|
(1,829
|
)
|
|
(1,923
|
)
|
|
(2,531
|
)
|
|||
Principal payments against financing lease obligation
|
(178
|
)
|
|
(522
|
)
|
|
(456
|
)
|
|||
Payment to redeem contingently redeemable common stock pursuant to the settlement agreement with Samsung
|
—
|
|
|
—
|
|
|
(100,000
|
)
|
|||
Proceeds from landlord for tenant improvements
|
—
|
|
|
—
|
|
|
8,800
|
|
|||
Net cash provided by (used in) financing activities
|
140,781
|
|
|
1,658
|
|
|
(81,905
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(138
|
)
|
|
(5
|
)
|
|
(42
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
189,712
|
|
|
(13,260
|
)
|
|
(53,018
|
)
|
|||
Cash and cash equivalents at beginning of year
|
148,984
|
|
|
162,244
|
|
|
215,262
|
|
|||
Cash and cash equivalents at end of year
|
$
|
338,696
|
|
|
$
|
148,984
|
|
|
$
|
162,244
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
8,625
|
|
|
$
|
8,625
|
|
|
$
|
8,625
|
|
Income taxes, net of refunds
|
$
|
18,720
|
|
|
$
|
16,384
|
|
|
$
|
16,254
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Non-cash obligation for property, plant and equipment
|
$
|
—
|
|
|
$
|
2,512
|
|
|
$
|
7,409
|
|
Property, plant and equipment received and accrued in accounts payable and other accrued liabilities
|
$
|
5,909
|
|
|
$
|
1,709
|
|
|
$
|
3,093
|
|
Common stock, net, issued pursuant to acquisition
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,143
|
|
|
Years Ended December 31,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||||||||||||||
|
(In thousands, except per share amounts)
|
||||||||||||||||||||||
|
CRCS*
|
|
Other CS**
|
|
CRCS*
|
|
Other CS**
|
|
CRCS*
|
|
Other CS**
|
||||||||||||
Basic net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allocation of undistributed earnings
|
$
|
—
|
|
|
$
|
(33,748
|
)
|
|
$
|
—
|
|
|
$
|
(134,336
|
)
|
|
$
|
(1,180
|
)
|
|
$
|
(41,873
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted-average common shares outstanding
|
—
|
|
|
112,415
|
|
|
—
|
|
|
110,769
|
|
|
4,788
|
|
|
107,024
|
|
||||||
Basic net loss per share
|
$
|
—
|
|
|
$
|
(0.30
|
)
|
|
$
|
—
|
|
|
$
|
(1.21
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.39
|
)
|
Diluted net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Allocation of undistributed earnings for basic computation
|
$
|
—
|
|
|
$
|
(33,748
|
)
|
|
$
|
—
|
|
|
$
|
(134,336
|
)
|
|
$
|
(1,180
|
)
|
|
$
|
(41,873
|
)
|
Reallocation of undistributed earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Allocation of undistributed earnings for diluted computation
|
$
|
—
|
|
|
$
|
(33,748
|
)
|
|
$
|
—
|
|
|
$
|
(134,336
|
)
|
|
$
|
(1,180
|
)
|
|
$
|
(41,873
|
)
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Number of shares used in basic computation
|
—
|
|
|
112,415
|
|
|
—
|
|
|
110,769
|
|
|
4,788
|
|
|
107,024
|
|
||||||
Dilutive potential shares from stock options, ESPP, convertible notes, CRI retention bonuses and nonvested equity stock and stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Number of shares used in diluted computation
|
—
|
|
|
112,415
|
|
|
—
|
|
|
110,769
|
|
|
4,788
|
|
|
107,024
|
|
||||||
Diluted net loss per share
|
$
|
—
|
|
|
$
|
(0.30
|
)
|
|
$
|
—
|
|
|
$
|
(1.21
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.39
|
)
|
|
Total
|
||
|
(in thousands)
|
||
Cash
|
$
|
182
|
|
Property and equipment
|
51
|
|
|
Other tangible assets
|
36
|
|
|
Identified intangible assets
|
19,280
|
|
|
Goodwill
|
15,451
|
|
|
Total
|
$
|
35,000
|
|
|
Total
|
||
|
(in thousands)
|
||
Cash
|
$
|
1,424
|
|
Accounts receivable
|
1,140
|
|
|
Identified intangible assets
|
159,200
|
|
|
Property and equipment
|
965
|
|
|
Other assets
|
133
|
|
|
Goodwill
|
96,994
|
|
|
Liabilities
|
(2,613
|
)
|
|
Total
|
$
|
257,243
|
|
Reportable Segment:
|
December 31,
2012 |
|
Addition to Goodwill
|
|
Impairment Charge of Goodwill (1)
|
|
December 31,
2013 |
||||||||
|
(In thousands)
|
||||||||||||||
MID
|
$
|
19,905
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
8,070
|
|
|
—
|
|
|
(8,070
|
)
|
|
—
|
|
||||
CRI
|
96,994
|
|
|
—
|
|
|
—
|
|
|
96,994
|
|
||||
Total
|
$
|
124,969
|
|
|
$
|
—
|
|
|
$
|
(8,070
|
)
|
|
$
|
116,899
|
|
|
As of December 31, 2013
|
||||||||||
Reportable Segment:
|
Gross Carrying Amount
|
|
Accumulated Impairment Losses
|
|
Net Carrying Amount
|
||||||
|
(In thousands)
|
||||||||||
MID
|
$
|
19,905
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
8,070
|
|
|
(8,070
|
)
|
|
—
|
|
|||
CRI
|
96,994
|
|
|
—
|
|
|
96,994
|
|
|||
All Other
|
13,700
|
|
|
(13,700
|
)
|
|
—
|
|
|||
Total
|
$
|
138,669
|
|
|
$
|
(21,770
|
)
|
|
$
|
116,899
|
|
Reportable Segment:
|
December 31,
2011 |
|
Addition to Goodwill (1)
|
|
Impairment Charge of Goodwill (2)
|
|
December 31,
2012 |
||||||||
|
|
||||||||||||||
MID
|
$
|
4,454
|
|
|
$
|
15,451
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
—
|
|
|
8,070
|
|
|
—
|
|
|
8,070
|
|
||||
CRI
|
96,994
|
|
|
—
|
|
|
—
|
|
|
96,994
|
|
||||
All Other
|
13,700
|
|
|
—
|
|
|
(13,700
|
)
|
|
—
|
|
||||
Total
|
$
|
115,148
|
|
|
$
|
23,521
|
|
|
$
|
(13,700
|
)
|
|
$
|
124,969
|
|
|
As of December 31, 2012
|
||||||||||
Reportable Segment:
|
Gross Carrying Amount
|
|
Accumulated Impairment Losses
|
|
Net Carrying Amount
|
||||||
|
|
||||||||||
MID
|
$
|
19,905
|
|
|
$
|
—
|
|
|
$
|
19,905
|
|
CTO
|
8,070
|
|
|
—
|
|
|
8,070
|
|
|||
CRI
|
96,994
|
|
|
—
|
|
|
96,994
|
|
|||
All Other
|
13,700
|
|
|
(13,700
|
)
|
|
—
|
|
|||
Total
|
$
|
138,669
|
|
|
$
|
(13,700
|
)
|
|
$
|
124,969
|
|
|
|
|
As of December 31, 2013
|
||||||||||
|
Useful Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Existing technology (1)
|
3 to 10 years
|
|
$
|
186,202
|
|
|
$
|
(80,961
|
)
|
|
$
|
105,241
|
|
Customer contracts and contractual relationships (2)
|
1 to 10 years
|
|
31,093
|
|
|
(19,204
|
)
|
|
11,889
|
|
|||
Non-compete agreements
|
3 years
|
|
300
|
|
|
(258
|
)
|
|
42
|
|
|||
Total intangible assets
|
|
|
$
|
217,595
|
|
|
$
|
(100,423
|
)
|
|
$
|
117,172
|
|
|
|
|
As of December 31, 2012
|
||||||||||
|
Useful Life
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Existing technology (1)
|
3 to 10 years
|
|
$
|
191,815
|
|
|
$
|
(57,240
|
)
|
|
$
|
134,575
|
|
Customer contracts and contractual relationships
|
1 to 10 years
|
|
32,650
|
|
|
(14,194
|
)
|
|
18,456
|
|
|||
Non-compete agreements
|
3 years
|
|
300
|
|
|
(158
|
)
|
|
142
|
|
|||
Total intangible assets
|
|
|
$
|
224,765
|
|
|
$
|
(71,592
|
)
|
|
$
|
153,173
|
|
Years Ending December 31:
|
Amount
|
||
2014
|
$
|
27,487
|
|
2015
|
25,348
|
|
|
2016
|
24,356
|
|
|
2017
|
23,734
|
|
|
2018
|
10,827
|
|
|
Thereafter
|
5,420
|
|
|
|
$
|
117,172
|
|
|
For the Year Ended December 31, 2013
|
||||||||||||||||||
|
MID
|
|
CRI
|
|
CTO
|
|
All Other
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue
|
$
|
232,040
|
|
|
$
|
32,625
|
|
|
$
|
—
|
|
|
$
|
6,836
|
|
|
$
|
271,501
|
|
Gain from settlement
|
535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
|||||
Other adjustment from revenue to CLI
|
5,000
|
|
|
2,304
|
|
|
—
|
|
|
2,250
|
|
|
9,554
|
|
|||||
Customer licensing income
|
$
|
237,575
|
|
|
$
|
34,929
|
|
|
$
|
—
|
|
|
$
|
9,086
|
|
|
$
|
281,590
|
|
Segment operating expenses
|
33,764
|
|
|
24,149
|
|
|
25,703
|
|
|
22,502
|
|
|
106,118
|
|
|||||
Segment operating income (loss)
|
$
|
203,811
|
|
|
$
|
10,780
|
|
|
$
|
(25,703
|
)
|
|
$
|
(13,416
|
)
|
|
$
|
175,472
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
(153,008
|
)
|
|||||||||
Operating income
|
|
|
|
|
|
|
|
|
$
|
22,464
|
|
||||||||
Interest and other income (expense), net
|
|
|
|
|
|
|
|
|
(34,481
|
)
|
|||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
$
|
(12,017
|
)
|
|
For the Year Ended December 31, 2012
|
||||||||||||||||||
|
MID
|
|
CRI
|
|
CTO
|
|
All Other
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue
|
$
|
215,047
|
|
|
$
|
17,808
|
|
|
$
|
—
|
|
|
$
|
1,196
|
|
|
$
|
234,051
|
|
Gain from settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other adjustment from revenue to CLI
|
7,500
|
|
|
5,165
|
|
|
—
|
|
|
—
|
|
|
12,665
|
|
|||||
Customer licensing income
|
$
|
222,547
|
|
|
$
|
22,973
|
|
|
$
|
—
|
|
|
$
|
1,196
|
|
|
$
|
246,716
|
|
Segment operating expenses
|
37,353
|
|
|
13,611
|
|
|
28,106
|
|
|
19,330
|
|
|
98,400
|
|
|||||
Segment operating income (loss)
|
$
|
185,194
|
|
|
$
|
9,362
|
|
|
$
|
(28,106
|
)
|
|
$
|
(18,134
|
)
|
|
$
|
148,316
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
(238,750
|
)
|
|||||||||
Operating loss
|
|
|
|
|
|
|
|
|
$
|
(90,434
|
)
|
||||||||
Interest and other income (expense), net
|
|
|
|
|
|
|
|
|
(27,451
|
)
|
|||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
$
|
(117,885
|
)
|
|
For the Year Ended December 31, 2011
|
||||||||||||||||||
|
MID
|
|
CRI
|
|
CTO
|
|
All Other
|
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Revenue
|
$
|
292,074
|
|
|
$
|
17,353
|
|
|
$
|
—
|
|
|
$
|
2,936
|
|
|
$
|
312,363
|
|
Gain from settlement
|
6,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,200
|
|
|||||
Other adjustment from revenue to CLI
|
(3,000
|
)
|
|
2,250
|
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|||||
Customer licensing income
|
$
|
295,274
|
|
|
$
|
19,603
|
|
|
$
|
—
|
|
|
$
|
2,936
|
|
|
$
|
317,813
|
|
Segment operating expenses
|
45,670
|
|
|
5,606
|
|
|
17,771
|
|
|
15,025
|
|
|
84,072
|
|
|||||
Segment operating income (loss)
|
$
|
249,604
|
|
|
$
|
13,997
|
|
|
$
|
(17,771
|
)
|
|
$
|
(12,089
|
)
|
|
$
|
233,741
|
|
Reconciling items
|
|
|
|
|
|
|
|
|
(235,277
|
)
|
|||||||||
Operating loss
|
|
|
|
|
|
|
|
|
$
|
(1,536
|
)
|
||||||||
Interest and other income (expense), net
|
|
|
|
|
|
|
|
|
(24,265
|
)
|
|||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
$
|
(25,801
|
)
|
|
Years Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Customer A (MID and CRI reportable segments)
|
33
|
%
|
|
38
|
%
|
|
30
|
%
|
Customer B (MID reportable segment)
|
*
|
|
|
*
|
|
|
11
|
%
|
Customer C (MID reportable segment)
|
*
|
|
|
*
|
|
|
10
|
%
|
|
As of December 31, 2013
|
|||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Weighted Rate of Return
|
|||||||||
Money market funds
|
$
|
300,605
|
|
|
$
|
300,605
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
0.01
|
%
|
Corporate notes, bonds and commercial paper
|
58,492
|
|
|
58,507
|
|
|
—
|
|
|
(15)
|
|
|
0.15
|
%
|
||||
Total cash equivalents and marketable securities
|
359,097
|
|
|
359,112
|
|
|
—
|
|
|
(15)
|
|
|
|
|||||
Cash
|
28,565
|
|
|
28,565
|
|
|
—
|
|
|
—
|
|
|
|
|||||
Total cash, cash equivalents and marketable securities
|
$
|
387,662
|
|
|
$
|
387,677
|
|
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
|
|
As of December 31, 2012
|
|||||||||||||||||
(Dollars in thousands)
|
Fair Value
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Weighted Rate of Return
|
|||||||||
Money market funds
|
$
|
126,570
|
|
|
$
|
126,570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
0.01
|
%
|
Corporate notes, bonds and commercial paper
|
57,345
|
|
|
57,356
|
|
|
4
|
|
|
(15
|
)
|
|
0.17
|
%
|
||||
Total cash equivalents and marketable securities
|
183,915
|
|
|
183,926
|
|
|
4
|
|
|
(15
|
)
|
|
|
|||||
Cash
|
19,415
|
|
|
19,415
|
|
|
—
|
|
|
—
|
|
|
|
|||||
Total cash, cash equivalents and marketable securities
|
$
|
203,330
|
|
|
$
|
203,341
|
|
|
$
|
4
|
|
|
$
|
(15
|
)
|
|
|
|
As of
|
||||||
|
December 31,
2013 |
|
December 31,
2012 |
||||
|
(Dollars in thousands)
|
||||||
Cash equivalents
|
$
|
310,131
|
|
|
$
|
129,569
|
|
Short term marketable securities
|
48,966
|
|
|
54,346
|
|
||
Total cash equivalents and marketable securities
|
359,097
|
|
|
183,915
|
|
||
Cash
|
28,565
|
|
|
19,415
|
|
||
Total cash, cash equivalents and marketable securities
|
$
|
387,662
|
|
|
$
|
203,330
|
|
|
Fair Value
|
|
Gross Unrealized Loss
|
||||||||||||
|
December 31,
2013 |
|
December 31,
2012 |
|
December 31,
2013 |
|
December 31,
2012 |
||||||||
|
(In thousands)
|
||||||||||||||
Less than one year
|
|
|
|
|
|
|
|
||||||||
Corporate notes, bonds and commercial paper
|
$
|
53,491
|
|
|
$
|
51,819
|
|
|
$
|
(15
|
)
|
|
$
|
(15
|
)
|
|
As of December 31, 2013
|
||||||||||||||
|
Total
|
|
Quoted Market Prices in Active Markets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Money market funds
|
$
|
300,605
|
|
|
$
|
300,605
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes, bonds and commercial paper
|
58,492
|
|
|
—
|
|
|
58,492
|
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
359,097
|
|
|
$
|
300,605
|
|
|
$
|
58,492
|
|
|
$
|
—
|
|
|
As of December 31, 2012
|
||||||||||||||
|
Total
|
|
Quoted Market Prices in Active Markets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
(In thousands)
|
||||||||||||||
Money market funds
|
$
|
126,570
|
|
|
$
|
126,570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Corporate notes, bonds and commercial paper
|
57,345
|
|
|
—
|
|
|
57,345
|
|
|
—
|
|
||||
Total available-for-sale securities
|
$
|
183,915
|
|
|
$
|
126,570
|
|
|
$
|
57,345
|
|
|
$
|
—
|
|
|
As of December 31, 2013
|
|
|||||||||||||||||
(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, 2013
|
||||||||||
Investment in non-marketable security
|
$
|
600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
600
|
|
|
$
|
1,400
|
|
|
As of December 31, 2012
|
|
|||||||||||||||||
(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, 2012
|
||||||||||
Investment in non-marketable security
|
$
|
2,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,000
|
|
|
$
|
—
|
|
|
As of December 31, 2013
|
|
As of December 31, 2012
|
||||||||||||||||||||
(in thousands)
|
Face
Value
|
|
Carrying Value
|
|
Fair
Value
|
|
Face
Value
|
|
Carrying Value
|
|
Fair
Value
|
||||||||||||
5% Convertible Senior Notes due 2014
|
$
|
172,500
|
|
|
$
|
164,047
|
|
|
$
|
175,821
|
|
|
$
|
172,500
|
|
|
$
|
147,556
|
|
|
$
|
172,716
|
|
1.125% Convertible Senior Notes due 2018
|
138,000
|
|
|
109,629
|
|
|
142,427
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Building
|
$
|
40,320
|
|
|
$
|
42,129
|
|
Computer software
|
22,068
|
|
|
36,349
|
|
||
Computer equipment
|
29,869
|
|
|
29,371
|
|
||
Furniture and fixtures
|
12,360
|
|
|
12,708
|
|
||
Leasehold improvements
|
7,024
|
|
|
9,731
|
|
||
Machinery
|
11,533
|
|
|
13,501
|
|
||
Construction in progress
|
282
|
|
|
9,559
|
|
||
|
123,456
|
|
|
153,348
|
|
||
Less accumulated depreciation and amortization
|
(50,814
|
)
|
|
(66,443
|
)
|
||
|
$
|
72,642
|
|
|
$
|
86,905
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Foreign currency translation adjustments, net of tax
|
$
|
86
|
|
|
$
|
86
|
|
Unrealized loss on available-for-sale securities, net of tax
|
(391
|
)
|
|
(386
|
)
|
||
Total
|
$
|
(305
|
)
|
|
$
|
(300
|
)
|
(Dollars in thousands)
|
As of December 31, 2013
|
|
As of December 31, 2012
|
||||
1.125% Convertible Senior Notes due 2018
|
$
|
138,000
|
|
|
$
|
—
|
|
5% Convertible Senior Notes due 2014
|
172,500
|
|
|
172,500
|
|
||
Total principal amount of convertible notes
|
310,500
|
|
|
172,500
|
|
||
Unamortized discount - 2018 Notes
|
(28,371
|
)
|
|
—
|
|
||
Unamortized discount - 2014 Notes
|
(8,453
|
)
|
|
(24,944
|
)
|
||
Total unamortized discount
|
$
|
(36,824
|
)
|
|
$
|
(24,944
|
)
|
Total convertible notes
|
$
|
273,676
|
|
|
$
|
147,556
|
|
Less current portion
|
164,047
|
|
|
—
|
|
||
Total long-term convertible notes
|
$
|
109,629
|
|
|
$
|
147,556
|
|
(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 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 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).
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(in thousands)
|
||||||||||
2018 Notes coupon interest at a rate of 1.125%
|
$
|
582
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2018 Notes amortization of discount and debt issuance cost at an additional effective interest rate of 5.5%
|
$
|
2,171
|
|
|
—
|
|
|
—
|
|
||
2014 Notes coupon interest at a rate of 5%
|
8,625
|
|
|
8,625
|
|
|
8,625
|
|
|||
2014 Notes amortization of discount at an additional effective interest rate of 11.7%
|
17,126
|
|
|
14,695
|
|
|
12,622
|
|
|||
Total interest expense on convertible notes
|
$
|
28,504
|
|
|
$
|
23,320
|
|
|
$
|
21,247
|
|
|
Total
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
||||||||||||||
Contractual obligations (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Imputed financing obligation (2)
|
$
|
40,260
|
|
|
$
|
5,874
|
|
|
$
|
6,010
|
|
|
$
|
6,156
|
|
|
$
|
6,302
|
|
|
$
|
6,447
|
|
|
$
|
9,471
|
|
Leases and other contractual obligations
|
8,456
|
|
|
3,753
|
|
|
2,108
|
|
|
1,237
|
|
|
1,018
|
|
|
340
|
|
|
—
|
|
|||||||
Software licenses (3)
|
8,715
|
|
|
5,477
|
|
|
2,865
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Acquisition retention bonuses (4)
|
18,083
|
|
|
18,013
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Convertible notes
|
310,500
|
|
|
172,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,000
|
|
|
—
|
|
|||||||
Interest payments related to convertible notes
|
12,076
|
|
|
5,865
|
|
|
1,553
|
|
|
1,553
|
|
|
1,553
|
|
|
1,552
|
|
|
—
|
|
|||||||
Total
|
$
|
398,090
|
|
|
$
|
211,482
|
|
|
$
|
12,606
|
|
|
$
|
9,319
|
|
|
$
|
8,873
|
|
|
$
|
146,339
|
|
|
$
|
9,471
|
|
(1)
|
The above table does not reflect possible payments in connection with uncertain tax benefits of approximately
$18.8 million
including
$12.6 million
recorded as a reduction of long-term deferred tax assets and
$6.2 million
in long-term income taxes payable, as of
December 31, 2013
. As noted below in Note 17, “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.
|
(2)
|
With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the Consolidated Balance Sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. Additionally, the amount includes the amended Ohio lease and the amended Sunnyvale lease.
|
(3)
|
The Company has commitments with various software vendors for non-cancellable license agreements generally having terms longer than
one
year. The above table summarizes those contractual obligations as of
December 31, 2013
which are also presented on the Company’s Consolidated Balance Sheet under current and other long-term liabilities.
|
(4)
|
In connection with acquisitions, the Company is obligated to pay retention bonuses to certain employees and contractors, subject to certain eligibility and acceleration provisions including the condition of employment. The remaining
$16.9 million
of CRI retention bonuses payable on June 3, 2014 will be paid in cash or stock at the Company’s election.
|
|
Shares Available for Grant
|
Shares available as of December 31, 2010
|
5,348,162
|
Stock options granted
|
(2,357,001)
|
Stock options forfeited
|
865,097
|
Stock options expired under former plans
|
(503,526)
|
Nonvested equity stock and stock units granted (1)
|
(562,257)
|
Nonvested equity stock and stock units forfeited (1)
|
22,401
|
Total shares available for grant as of December 31, 2011
|
2,812,876
|
Increase in shares approved for issuance
|
6,500,000
|
Stock options granted (2)
|
(7,789,220)
|
Stock options forfeited (3)
|
2,610,812
|
Stock options expired under former plans
|
(576,763)
|
Nonvested equity stock and stock units granted (1)
|
(1,113,014)
|
Nonvested equity stock and stock units forfeited (1)
|
284,468
|
Total shares available for grant as of December 31, 2012
|
2,729,159
|
Stock options granted
|
(2,084,276)
|
Stock options forfeited
|
3,318,022
|
Stock options expired under former plans
|
(1,157,419)
|
Nonvested equity stock and stock units granted (1)
|
(709,611)
|
Nonvested equity stock and stock units forfeited (1)
|
431,553
|
Total shares available for grant as of December 31, 2013
|
2,527,428
|
(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.
|
(2)
|
Amount includes
2,840,986
shares that were granted from the stock option exchange program (discussed below).
|
(3)
|
Amount excludes
6,449,255
shares that were surrendered from the stock option exchange program (discussed below) as the shares are no longer available for grant.
|
|
Options Outstanding
|
|
Weighted Average Remaining Contractual Term
|
|
|
||||||
|
Number of Shares
|
|
Weighted Average Exercise Price per Share
|
|
|
Aggregate Intrinsic Value
|
|||||
|
(Dollars in thousands, except per share amounts)
|
||||||||||
Outstanding as of December 31, 2010
|
13,969,383
|
|
$
|
18.85
|
|
|
|
|
|
||
Options granted
|
2,357,001
|
|
$
|
18.83
|
|
|
|
|
|
||
Options exercised
|
(873,691)
|
|
$
|
8.46
|
|
|
|
|
|
||
Options forfeited
|
(865,097)
|
|
$
|
14.53
|
|
|
|
|
|
||
Outstanding as of December 31, 2011
|
14,587,596
|
|
$
|
19.73
|
|
|
|
|
|
||
Options granted
|
7,789,220
|
|
$
|
5.81
|
|
|
|
|
|
||
Options exercised
|
(221,934)
|
|
$
|
4.44
|
|
|
|
|
|
||
Options forfeited
|
(2,610,812)
|
|
$
|
10.91
|
|
|
|
|
|
||
Options surrendered in stock option exchange program
|
(6,449,255)
|
|
$
|
21.11
|
|
|
|
|
|
||
Outstanding as of December 31, 2012
|
13,094,815
|
|
$
|
12.79
|
|
|
|
|
|
||
Options granted
|
2,084,276
|
|
$
|
6.09
|
|
|
|
|
|
||
Options exercised
|
(483,923)
|
|
$
|
6.72
|
|
|
|
|
|
||
Options forfeited
|
(3,318,022)
|
|
$
|
14.51
|
|
|
|
|
|
||
Outstanding as of December 31, 2013
|
11,377,146
|
|
$
|
11.32
|
|
|
5.7
|
|
$
|
24,540
|
|
Vested or expected to vest at December 31, 2013
|
10,685,898
|
|
$
|
11.64
|
|
|
5.5
|
|
$
|
22,113
|
|
Options exercisable at December 31, 2013
|
6,242,733
|
|
$
|
15.35
|
|
|
3.7
|
|
$
|
6,779
|
|
|
Options Outstanding
|
|
Options Exercisable
|
|||||||||||
Range of Exercise Prices
|
Number Outstanding
|
|
Weighted Average Remaining
Contractual Life (in years)
|
|
Weighted Average Exercise Price
|
|
Number Exercisable
|
|
Weighted Average Exercise Price
|
|||||
$4.13 – $5.39
|
1,087,176
|
|
8.6
|
|
$
|
4.45
|
|
|
93,470
|
|
$
|
4.80
|
|
|
$5.46 – $5.46
|
1,306,654
|
|
9.0
|
|
$
|
5.46
|
|
|
240,292
|
|
|
$
|
5.46
|
|
$5.49 – $5.49
|
36,918
|
|
9.1
|
|
$
|
5.49
|
|
|
5,734
|
|
$
|
5.49
|
|
|
$5.63 – $5.63
|
1,511,307
|
|
5.3
|
|
$
|
5.63
|
|
|
724,285
|
|
$
|
5.63
|
|
|
$5.76– $5.76
|
1,246,839
|
|
8.5
|
|
$
|
5.76
|
|
|
219,246
|
|
$
|
5.76
|
|
|
$6.39– $7.97
|
1,138,049
|
|
7.3
|
|
$
|
7.27
|
|
|
531,824
|
|
$
|
7.27
|
|
|
$8.11 – $13.30
|
1,177,647
|
|
5.7
|
|
$
|
9.21
|
|
|
784,077
|
|
$
|
9.15
|
|
|
$13.31 – $18.69
|
1,250,463
|
|
2.8
|
|
$
|
16.92
|
|
|
1,138,570
|
|
$
|
17.15
|
|
|
$19.13 – $21.51
|
1,318,182
|
|
2.5
|
|
$
|
20.15
|
|
|
1,237,247
|
|
$
|
20.10
|
|
|
$21.95 – $40.80
|
1,303,911
|
|
2.0
|
|
$
|
26.12
|
|
|
1,267,988
|
|
$
|
26.21
|
|
|
$4.13 – $40.80
|
11,377,146
|
|
5.7
|
|
$
|
11.32
|
|
|
6,242,733
|
|
$
|
15.35
|
|
|
Stock Option Plans for Years Ended December 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Stock Option Plans
|
|
|
|
|
|
Expected stock price volatility
|
45%-47%
|
|
57%-68%
|
|
50%-75%
|
Risk free interest rate
|
0.8%-1.5%
|
|
0.6%-0.9%
|
|
1.4%-2.8%
|
Expected term (in years)
|
5.4-5.5
|
|
5.5-5.7
|
|
6.0-6.1
|
Weighted-average fair value of stock options granted
|
$2.60
|
|
$3.57
|
|
$10.27
|
|
Employee Stock Purchase Plan for Years Ended December 31,
|
||||
|
2013
|
|
2012
|
|
2011
|
Employee Stock Purchase Plan
|
|
|
|
|
|
Expected stock price volatility
|
44%-48%
|
|
56%-63%
|
|
56%-78%
|
Risk free interest rate
|
0.1%
|
|
0.2%
|
|
0.1%
|
Expected term (in years)
|
0.5
|
|
0.5
|
|
0.5
|
Weighted-average fair value of purchase rights granted under the purchase plan
|
$1.96
|
|
$1.58
|
|
$6.16
|
Nonvested Equity Stock and Stock Units
|
Shares
|
|
Weighted-Average
Grant-Date Fair Value
|
||
Nonvested at December 31, 2010
|
718,007
|
|
$
|
18.23
|
|
Granted
|
374,838
|
|
$
|
17.86
|
|
Vested
|
(314,401)
|
|
$
|
18.15
|
|
Forfeited
|
(14,934)
|
|
$
|
21.76
|
|
Nonvested at December 31, 2011
|
763,510
|
|
$
|
18.02
|
|
Granted
|
742,009
|
|
$
|
6.43
|
|
Vested
|
(393,383)
|
|
$
|
17.38
|
|
Forfeited
|
(189,645)
|
|
$
|
11.77
|
|
Nonvested at December 31, 2012
|
922,491
|
|
$
|
10.24
|
|
Granted
|
473,074
|
|
$
|
6.92
|
|
Vested
|
(478,214)
|
|
$
|
9.81
|
|
Forfeited
|
(287,702)
|
|
$
|
9.18
|
|
Nonvested at December 31, 2013
|
629,649
|
|
$
|
8.56
|
|
|
|
Employee
Severance
and Related Benefits
|
|
Facilities
|
|
Total
|
||||||
|
|
(in thousands)
|
||||||||||
Balance at December 31, 2011
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
7,301
|
|
|
—
|
|
|
7,301
|
|
|||
Payments
|
|
(6,395
|
)
|
|
—
|
|
|
(6,395
|
)
|
|||
Balance at December 31, 2012
|
|
$
|
906
|
|
|
$
|
—
|
|
|
$
|
906
|
|
Charges
|
|
136
|
|
|
1,960
|
|
|
2,096
|
|
|||
Payments
|
|
(958
|
)
|
|
(1,307
|
)
|
|
(2,265
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
(653
|
)
|
*
|
(653
|
)
|
|||
Balance at December 31, 2013
|
|
$
|
84
|
|
|
—
|
|
|
$
|
84
|
|
|
|
Employee
Severance
and Related Benefits
|
|
Facilities
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Balance at December 31, 2012
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
3,255
|
|
|
195
|
|
|
3,450
|
|
|||
Payments
|
|
(1,523
|
)
|
|
(62
|
)
|
|
(1,585
|
)
|
|||
Non-cash settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31, 2013
|
|
$
|
1,732
|
|
|
133
|
|
|
$
|
1,865
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
|
(In thousands)
|
||||||||||
Domestic
|
$
|
(12,535
|
)
|
|
$
|
(61,036
|
)
|
|
$
|
(3,586
|
)
|
Foreign
|
518
|
|
|
(56,849
|
)
|
|
(22,215
|
)
|
|||
|
$
|
(12,017
|
)
|
|
$
|
(117,885
|
)
|
|
$
|
(25,801
|
)
|
|
Years Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Expense (benefit) at U.S. federal statutory rate
|
(35.0
|
)%
|
|
(35.0
|
)%
|
|
(35.0
|
)%
|
Expense (benefit) at state statutory rate
|
(3.3
|
)
|
|
0.1
|
|
|
(0.1
|
)
|
Withholding tax
|
160.4
|
|
|
13.3
|
|
|
64.2
|
|
Foreign rate differential
|
4.1
|
|
|
17.4
|
|
|
33.0
|
|
Research and development (“R&D”) credit
|
(36.7
|
)
|
|
—
|
|
|
(1.0
|
)
|
Executive compensation
|
0.8
|
|
|
0.3
|
|
|
2.0
|
|
Non-deductible stock-based compensation
|
2.5
|
|
|
0.7
|
|
|
2.8
|
|
Foreign tax credit
|
(163.3
|
)
|
|
(13.3
|
)
|
|
(197.7
|
)
|
Capitalized merger and acquisition costs
|
—
|
|
|
0.3
|
|
|
5.9
|
|
Other
|
(1.0
|
)
|
|
(2.2
|
)
|
|
0.5
|
|
Valuation allowance
|
252.3
|
|
|
32.4
|
|
|
192.3
|
|
|
180.8
|
%
|
|
14.0
|
%
|
|
66.9
|
%
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Depreciation and amortization
|
$
|
28,093
|
|
|
$
|
20,230
|
|
Other liabilities and reserves
|
18,578
|
|
19,624
|
||||
Deferred equity compensation
|
33,837
|
|
42,546
|
||||
Net operating loss carryovers
|
27,416
|
|
38,133
|
||||
Tax credits
|
100,052
|
|
76,826
|
||||
Total gross deferred tax assets
|
207,976
|
|
|
197,359
|
|
||
Convertible debt
|
(12,664)
|
|
(8,019)
|
||||
Total net deferred tax assets
|
195,312
|
|
|
189,340
|
|
||
Valuation allowance
|
(192,823
|
)
|
|
(184,817
|
)
|
||
Net deferred tax assets
|
$
|
2,489
|
|
|
$
|
4,523
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
|
(In thousands)
|
||||||
Reported as:
|
|
|
|
||||
Current deferred tax assets
|
$
|
205
|
|
|
$
|
788
|
|
Current deferred tax liabilities
|
(791
|
)
|
|
—
|
|
||
Non-current deferred tax assets
|
4,797
|
|
|
4,458
|
|
||
Non-current deferred tax liabilities
|
(1,722
|
)
|
|
(723
|
)
|
||
Net deferred tax assets
|
$
|
2,489
|
|
|
$
|
4,523
|
|
|
Balance at Beginning of Period
|
|
Charged (Credited) to Operations
|
|
Charged to Other Account*
|
|
Utilized
|
|
Balance at End of Period
|
|||||||
Tax Valuation Allowance
|
|
|
|
|
|
|
|
|
|
|||||||
Year ended December 31, 2011
|
$
|
66,395
|
|
|
—
|
|
|
64,153
|
|
|
—
|
|
|
$
|
130,548
|
|
Year ended December 31, 2012
|
$
|
130,548
|
|
|
—
|
|
|
54,269
|
|
|
—
|
|
|
$
|
184,817
|
|
Year ended December 31, 2013
|
$
|
184,817
|
|
|
—
|
|
|
8,006
|
|
|
—
|
|
|
$
|
192,823
|
|
*
|
Amounts not charged to operations are charged to other comprehensive income or deferred tax assets (liabilities).
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at January 1
|
$
|
16,773
|
|
|
$
|
16,610
|
|
|
$
|
11,816
|
|
Tax positions related to current year:
|
|
|
|
|
|
||||||
Additions
|
1,156
|
|
|
589
|
|
|
608
|
|
|||
Tax positions related to prior years:
|
|
|
|
|
|
||||||
Additions
|
956
|
|
|
1,521
|
|
|
4,911
|
|
|||
Reductions
|
(91
|
)
|
|
(1,947
|
)
|
|
(725
|
)
|
|||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 31
|
$
|
18,794
|
|
|
$
|
16,773
|
|
|
$
|
16,610
|
|
(in millions)
|
Estimated SK hynix Fair Value
|
||
Antitrust litigation settlement
|
$
|
4.0
|
|
Settlement of past infringement
|
280.0
|
|
|
License agreement
|
250.0
|
|
|
Total SK hynix Fair Value
|
$
|
534.0
|
|
(in millions)
|
Allocated Consideration
|
||
Antitrust litigation settlement
|
$
|
1.9
|
|
Settlement of past infringement
|
125.8
|
|
|
License agreement
|
112.3
|
|
|
Total consideration
|
$
|
240.0
|
|
·
|
$238.1 million
as "royalty revenue" which represents the allocated consideration related to the settlement of past infringement (
$125.8 million
) from the resolution of the infringement litigation and the patent license agreement (
$112.3 million
); and
|
·
|
$1.9 million
as "gain from settlement" which represents the allocated consideration related to the resolution of the antitrust litigation.
|
|
Received
in
|
|
Estimated to Be Received in
|
|
Total Estimated
Cash Receipts
|
||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
|||||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Royalty revenue
|
$
|
23.6
|
|
|
$
|
47.3
|
|
|
$
|
47.3
|
|
|
$
|
47.9
|
|
|
$
|
48.0
|
|
|
$
|
24.0
|
|
|
$
|
238.1
|
|
Gain from settlement
|
0.4
|
|
|
0.7
|
|
|
0.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||||
Total
|
$
|
24.0
|
|
|
$
|
48.0
|
|
|
$
|
48.0
|
|
|
$
|
48.0
|
|
|
$
|
48.0
|
|
|
$
|
24.0
|
|
|
$
|
240.0
|
|
(in millions)
|
Estimated Micron Fair Value
|
||
Antitrust litigation settlement
|
$
|
8.0
|
|
Settlement of past infringement
|
235.0
|
|
|
License agreement
|
440.0
|
|
|
Total Micron Fair Value
|
$
|
683.0
|
|
(in millions)
|
Allocated Consideration
|
||
Antitrust litigation settlement
|
$
|
3.3
|
|
Settlement of past infringement
|
96.3
|
|
|
License agreement
|
180.4
|
|
|
Total consideration
|
$
|
280.0
|
|
·
|
$276.7 million
as "royalty revenue" which represents the allocated consideration related to the settlement of past infringement (
$96.3 million
) from the resolution of the infringement litigation and the patent license agreement (
$180.4 million
); and
|
·
|
$3.3 million
million as "gain from settlement" which represents the allocated consideration related to the resolution of the antitrust litigation.
|
|
Received
in
|
|
Estimated to Be Received in
|
|
Total Estimated
Cash Receipts
|
||||||||||||||||||||||
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018 and thereafter
|
|
|||||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Royalty revenue
|
$
|
5.3
|
|
|
$
|
38.7
|
|
|
$
|
38.7
|
|
|
$
|
39.5
|
|
|
$
|
40.0
|
|
|
$
|
114.5
|
|
|
$
|
276.7
|
|
Gain from settlement
|
0.2
|
|
|
1.3
|
|
|
1.3
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
3.3
|
|
|||||||
Total
|
$
|
5.5
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
40.0
|
|
|
$
|
114.5
|
|
|
$
|
280.0
|
|
|
Dec. 31, 2013
|
|
Sept. 30, 2013
|
|
June 30, 2013
|
|
March 31, 2013
|
|
Dec. 31, 2012
|
|
Sept. 30, 2012
|
|
June 30, 2012
|
|
March 31, 2012
|
||||||||||||||||
|
(In thousands, except for per share amounts)
|
||||||||||||||||||||||||||||||
Total revenue
|
$
|
73,422
|
|
|
$
|
73,294
|
|
|
$
|
57,919
|
|
|
$
|
66,866
|
|
|
$
|
57,443
|
|
|
$
|
57,530
|
|
|
$
|
56,215
|
|
|
$
|
62,863
|
|
Total operating costs and expenses (1) (2)
|
$
|
67,208
|
|
|
$
|
64,229
|
|
|
$
|
52,175
|
|
|
$
|
65,425
|
|
|
$
|
61,470
|
|
|
$
|
104,630
|
|
|
$
|
77,964
|
|
|
$
|
80,421
|
|
Operating income (loss)
|
$
|
6,214
|
|
|
$
|
9,065
|
|
|
$
|
5,744
|
|
|
$
|
1,441
|
|
|
$
|
(4,027
|
)
|
|
$
|
(47,100
|
)
|
|
$
|
(21,749
|
)
|
|
$
|
(17,558
|
)
|
Net loss
|
$
|
(9,777
|
)
|
|
$
|
(5,725
|
)
|
|
$
|
(7,844
|
)
|
|
$
|
(10,402
|
)
|
|
$
|
(16,132
|
)
|
|
$
|
(58,098
|
)
|
|
$
|
(32,216
|
)
|
|
$
|
(27,890
|
)
|
Net loss per share — basic
|
$
|
(0.09
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.52
|
)
|
|
(0.29
|
)
|
|
$
|
(0.25
|
)
|
|
Net loss per share — diluted
|
$
|
(0.09
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.52
|
)
|
|
(0.29
|
)
|
|
$
|
(0.25
|
)
|
|
Shares used in per share calculations — basic
|
113,217
|
|
|
112,640
|
|
|
112,183
|
|
|
111,599
|
|
|
111,332
|
|
|
110,826
|
|
|
110,553
|
|
|
110,358
|
|
||||||||
Shares used in per share calculations — diluted
|
113,217
|
|
|
112,640
|
|
|
112,183
|
|
|
111,599
|
|
|
111,332
|
|
|
110,826
|
|
|
110,553
|
|
|
110,358
|
|
(1)
|
The quarterly financial information includes the following amounts related to the impairment of goodwill and long-lived assets as follows:
$9.7 million
in the quarter ended December 31, 2013,
$8.1 million
in the quarter ended September 30, 2013 and
$35.5 million
in the quarter ended September 30, 2012. Refer to Note 6, "Intangible Assets and Goodwill" of Notes to Consolidated Financial Statements of this Form 10-K.
|
(2)
|
The quarterly financial information includes the following amounts related to restructuring charges as follows:
$2.2 million
in the quarter ended December 31, 2013,
$1.1 million
in the quarter ended September 30, 2013,
$2.2 million
in the quarter ended March 31, 2013,
$0.7 million
in the quarter ended December 31, 2012, and
$6.6 million
in the quarter ended September 30, 2012. Refer to Note 16, "Restructuring Charges" of Notes to Consolidated Financial Statements of this Form 10-K.
|
RAMBUS INC.
|
|
|
|
By:
|
/s/ SATISH RISHI
|
|
Satish Rishi
|
|
Senior Vice President, Finance and Chief Financial Officer
|
Signature
|
Title
|
Date
|
|
|
|
/s/ RONALD BLACK
|
Chief Executive Officer, President and Director (Principal Executive Officer)
|
February 21, 2014
|
Ronald Black
|
|
|
|
|
|
/s/ SATISH RISHI
|
Senior Vice President, Finance and Chief Financial Officer (Principal Financial and Accounting Officer)
|
February 21, 2014
|
Satish Rishi
|
|
|
|
|
|
/s/ ERIC STANG
|
Chairman of the Board of Directors
|
February 21, 2014
|
Eric Stang
|
|
|
|
|
|
/s/ J. THOMAS BENTLEY
|
Director
|
February 21, 2014
|
J. Thomas Bentley
|
|
|
|
|
|
/s/ PENELOPE HERSCHER
|
Director
|
February 21, 2014
|
Penelope Herscher
|
|
|
|
|
|
/s/ CHARLES KISSNER
|
Director
|
February 21, 2014
|
Charles Kissner
|
|
|
|
|
|
/s/ DAVID SHRIGLEY
|
Director
|
February 21, 2014
|
David Shrigley
|
|
|
|
|
|
Exhibit Number
|
|
Description of Document
|
2.2(1)
|
|
Merger Agreement dated as of May 12, 2011, by and among Rambus Inc., Padlock Acquisition Corp., Cryptography Research, Inc. and the shareholder representative.
|
3.1(2)
|
|
Amended and Restated Certificate of Incorporation of Registrant filed May 29, 1997.
|
3.2(3)
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of Registrant filed June 14, 2000.
|
3.3(4)
|
|
Amended and Restated Bylaws of Registrant dated April 25, 2013.
|
4.1(5)
|
|
Form of Registrant’s Common Stock Certificate.
|
4.2(6)
|
|
Indenture between Rambus Inc. and U.S. Bank, National Association, dated as of June 29, 2009 (including the form of 5% Convertible Senior Note due 2014 therein).
|
4.3(7)
|
|
Indenture between Rambus Inc. and U.S. Bank, National Association, dated as of August 16, 2013 (including the form of 1.125% Convertible Senior Note due 2018 therein).
|
10.1(8)
|
|
Form of Indemnification Agreement entered into by Registrant with each of its directors and executive officers.
|
10.2(9)*
|
|
1997 Stock Plan (as amended and restated as of April 4, 2007) and related forms of agreements.
|
10.3(10)*
|
|
2006 Equity Incentive Plan, as amended.
|
10.4(11)*
|
|
Forms of agreements under the 2006 Equity Incentive Plan, as amended.
|
10.5(12)*
|
|
2006 Employee Stock Purchase Plan as amended.
|
10.6(13)
|
|
Redwood and Yellowstone Semiconductor Technology License Agreement, dated as of January 6, 2003, between Registrant, Sony Corporation and Sony Computer Entertainment Inc.
|
10.7(14)
|
|
Triple Net Space Lease, dated as of December 15, 2009, by and between Registrant and MT SPE, LLC.
|
10.8(15)†
|
|
Settlement Agreement, dated January 19, 2010, among Registrant, Samsung Electronics Co., Ltd, Samsung Electronics America, Inc., Samsung Semiconductor, Inc. and Samsung Austin Semiconductor, L.P.
|
10.9(15)†
|
|
Semiconductor Patent License Agreement, dated January 19, 2010, between Registrant and Samsung Electronics Co., Ltd.
|
10.10(15)†
|
|
Stock Purchase Agreement, dated January 19, 2010, between Registrant and Samsung Electronics Co., Ltd.
|
10.11(16)
|
|
First Amendment of Lease, dated November 4, 2011, by and between Registrant and MT SPE, LLC.
|
10.12(17)
|
|
Employment Agreement between the Company and Ronald Black, dated as of June 22, 2012.
|
10.13(18)†
|
|
Settlement Agreement, dated June 11, 2013, among Registrant, SK hynix and certain SK hynix affiliates.
|
10.14(19)†
|
|
Semiconductor Patent License Agreement, dated June 11, 2013, between Registrant and SK hynix.
|
10.15**
|
|
Settlement Agreement, dated December 9, 2013, between Rambus Inc., Micron Technology, Inc., and certain Micron affiliates.
|
10.16**
|
|
Semiconductor Patent License Agreement, dated December 9, 2013, between Rambus, Inc. and Micron Technology, Inc.
|
10.17**
|
|
Amendment to Semiconductor Patent License Agreement, dated December 30, 2013, by and between Rambus Inc. and Samsung Electronics Co., Ltd.
|
12.1(20)
|
|
Computation of ratio of earnings to fixed charges.
|
21.1
|
|
Subsidiaries of Registrant.
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
24
|
|
Power of Attorney (included in signature page).
|
31.1
|
|
Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS±
|
|
XBRL Instance Document
|
101.SCH±
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL±
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB±
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE±
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF±
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
|
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.
|
**
|
|
Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.
|
±
|
|
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
|
|
|
(1)
|
|
Incorporated by reference to the Form 10-Q filed on August 5, 2011.
|
|
|
|
(2)
|
|
Incorporated by reference to the Form 10-K filed on December 15, 1997.
|
|
|
|
(3)
|
|
Incorporated by reference to the Form 10-Q filed on May 4, 2001.
|
|
|
|
(4)
|
|
Incorporated by reference to the Form 8-K filed on April 30, 2013.
|
|
|
|
(5)
|
|
Incorporated by reference to the Form S-1/A (file no. 333-22885) filed on April 24, 1997.
|
|
|
|
(6)
|
|
Incorporated by reference to the Form 8-K filed on June 29, 2009.
|
|
|
|
(7)
|
|
Incorporated by reference to the Form 8-K filed on August 16, 2013.
|
|
|
|
(8)
|
|
Incorporated by reference to the Form S-1 (file no. 333-22885) filed on March 6, 1997.
|
|
|
|
(9)
|
|
Incorporated by reference to the Form 10-K filed on September 14, 2007.
|
|
|
|
(10)
|
|
Incorporated by reference to the Form 8-K filed on May 1, 2012.
|
|
|
|
(11)
|
|
Incorporated by reference to the Form 8-K filed on May 16, 2006.
|
|
|
|
(12)
|
|
Incorporated by reference to the Form 8-K filed on May 1, 2012.
|
|
|
|
(13)
|
|
Incorporated by reference to the Form 10-Q filed on April 30, 2003.
|
|
|
|
(14)
|
|
Incorporated by reference to the Form 10-K filed on February 25, 2010.
|
|
|
|
(15)
|
|
Incorporated by reference to the Form 10-Q filed on May 3, 2010.
|
|
|
|
(16)
|
|
Incorporated by reference to the Form 10-K filed on February 24, 2012.
|
|
|
|
(17)
|
|
Incorporated by reference to the Form 8-K filed on June 25, 2012.
|
|
|
|
(18)
|
|
Incorporated by reference to the Form 10-Q/A filed on January 13, 2014.
|
|
|
|
(19)
|
|
Incorporated by reference to the Form 10-Q filed on July 29, 2013.
|
|
|
|
(20)
|
|
Incorporated by reference to the Form S-3 filed on June 22, 2009.
|
|
|
|
1.1
|
Affiliate
. The term “Affiliate” means, for an identified entity, any other entity that (a) is a Subsidiary of such identified entity; or (b) Controls or is under common Control of such identified entity, but only so long as such Control exists.
|
1.2
|
Agreement
. The term “Agreement” has the meaning set forth in the introductory paragraph.
|
1.3
|
Antitrust Litigation
. The term “Antitrust Litigation” means the matter entitled
Rambus Inc. v. Micron Technology Inc. et al.
, No. 04-431105 (Supr. Ct. Cal., San Fran. Filed May 5, 2004) and any appeals therefrom and related proceedings, including specifically the appeal in
Rambus Inc. v Micron Technology, Inc., et al
., in the Court of Appeal of the State of California, First Appellate District, Division Two, Case No. A135150.
|
1.4
|
Change of Control
. The term “Change of Control” has the meaning set forth in the Patent License Agreement.
|
1.5
|
Comprehensive Resolution Agreements
. The term “Comprehensive Resolution Agreements” means this Agreement and the Patent License Agreement.
|
1.6
|
Control
. The term “Control” has the meaning set forth in the Patent License Agreement.
|
1.7
|
Design.
The term “Design” has the meaning set forth in the Patent License Agreement.
|
1.8
|
Disputes
. The term “Disputes” means any and every litigation, lawsuit, or similar proceeding pending between the Parties as of the Effective Date in any court, governmental body, or agency in any jurisdiction, including the Patent Litigation, the German Patent Litigation, the Italian Patent Litigation, the Antitrust Litigation, and the Patent Actions, and any and all disputes related thereto.
|
1.9
|
Effective Date
. The term “Effective Date” has the meaning set forth in the introductory paragraph.
|
1.10
|
Excluded Entity
. The term “Excluded Entity” means Broadcom Corporation, LSI Corporation, MediaTek Inc., SK hynix Inc., SK hynix America Inc., Hynix Semiconductor Manufacturing America Inc., SK hynix U.K. Ltd., SK hynix Deutschland, GmbH, Nanya Technology Corporation, Nanya Technology Corporation U.S.A., NVIDIA Corporation, Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Samsung Austin Semiconductor, L.P., STMicroelectronics N.V., STMicroelectronics Inc. and any other Third Party (including the Affiliates of such Third Party) that is an adverse party to Rambus or its Subsidiaries in any lawsuit, litigation or other similar proceedings pending as of the Effective Date.
|
1.11
|
German Patent Litigation
. The term "German Patent Litigation" means (a) the infringement action based on the German part of EP 0 525 068 and based on the German utility model DE 19 17 296.9 filed by Rambus Inc. against Micron Semiconductor (Germany) GmbH at the District Court Mannheim/Germany (Court docket 7 O 451/00) on August 31, 2000, which claim has been withdrawn on June 18, 2004 and April 28, 2006, respectively, (b) the infringement action based on the German part of EP 1 022 642, filed by Rambus Inc. against Micron Semiconductor (Deutschland) GmbH at the District Court Mannheim/Deutschland (Court docket 7 O 452/01) on August 9, 2001, which proceedings are stayed (decision dated July 29, 2002), and (c) the infringement suit based on the German part of EP 1 022 642 filed by Rambus Inc. against Micron Technology at the Administrative Court Karlsruhe/Deutschland (Court docket 6 K 2021/01), which proceedings have been continued with the District Court Mannheim/Germany (Court docket 7 O 131/02) and stayed (decision dated July 26, 2002) (the “value in dispute” for such decision has preliminarily been fixed to EUR 2.500.000 (decision dated March 3, 2003)).
|
1.12
|
Initial Payment
. The term “Initial Payment” has the meaning set forth in the Patent License Agreement.
|
1.13
|
Italian Patent Litigation
. The term "Italian Patent Litigation" means the matters entitled (a)
Micron Technology Inc. and Micron Technology Italia Srl v. Rambus Inc.
, Docket nos. 33560/01 and 61500/09, District Court of Milan (J. Bichi), and (b)
Micron Technology Inc. and Micron Technology Italia Srl v. Rambus Inc.
, Docket no. 18700/2011, Supreme Court.
|
1.14
|
Licensed Product
. The term “Licensed Product” has the meaning set forth in the Patent License Agreement.
|
1.15
|
Micron
. The term “Micron” has the meaning set forth in the introductory paragraph.
|
1.16
|
Micron Patents
. The term “Micron Patents” has the meaning set forth in the Patent License Agreement.
|
1.17
|
Micron Product
. The term “Micron Product” has the meaning set forth in the Patent License Agreement.
|
1.18
|
Party
. The terms “Party” and “Parties” have the meanings set forth in the introductory paragraph.
|
1.19
|
Patent Actions
. The term “Patent Actions” means all United States Patent and Trademark Office, all European Patent Office and all other governmental reexamination proceedings, oppositions, actions or challenges filed, requested or supported by Micron with respect to any Rambus Patents, and any appeals thereof, as of the Effective Date, including without limitation all such reexaminations and/or oppositions of U.S. Patent, European Patent and or other governmental Patent numbers.
|
1.20
|
Patent License Agreement
. The term “Patent License Agreement” has the meaning set forth in Article 2.
|
1.21
|
Patent Litigation
. The term “Patent Litigation” means the matters entitled
Micron Technology, Inc. v. Rambus Inc.
, No. 00-792 (D. Del. Filed Aug. 28, 2000) and
Rambus Inc.
|
1.22
|
Patents
. The term “Patents” has the meaning set forth in the Patent License Agreement.
|
1.23
|
Rambus
. The term “Rambus” has the meaning set forth in the introductory paragraph.
|
1.24
|
Rambus Patents
. The term “Rambus Patents” has the meaning set forth in the Patent License Agreement.
|
1.25
|
Rambus Leadership Products
. The term “Rambus Leadership Products” has the meaning set forth in the Patent License Agreement.
|
1.26
|
[***]
|
1.27
|
Subsidiary
. The term “Subsidiary” has the meaning set forth in the Patent License Agreement.
|
1.28
|
Third Party
. The term “Third Party” means with respect to a specified Party, or any Subsidiary of such specified Party, any entity that is not the specified Party or an Affiliate or Subsidiary of such specified Party.
|
3.1
|
Release by Rambus
.
|
3.2
|
Release by Micron
.
|
3.3
|
Releases Shall Remain Effective
. Each of Rambus and Micron acknowledges that, after entering into this Agreement, they may discover facts different from, or in addition to, those they now believe to be true with respect to the conduct of the other Party. Each of Rambus and Micron intends that the releases and discharges set forth in this Article 3 shall be, and shall remain, in effect in all respects as written, notwithstanding the discovery of any different or additional facts.
|
3.4
|
Waiver of California Civil Code § 1542
. In connection with the releases and discharges described in this Article 3, each of Rambus and Micron acknowledges that it is aware of the provisions of section 1542 of the Civil Code of the State of California, and hereby expressly waives and relinquishes all rights and benefits that it has or may have had under that section (or any equivalent law or rule of any other jurisdiction), which reads as follows:
|
3.5
|
[***]
|
3.6
|
Certain Exclusions
. For the avoidance of doubt:
|
(a)
|
The releases and covenants not to sue contained in this Article 3 shall apply solely to (i) the activities occurring prior to the Effective Date of each of the Parties, (ii) the activities occurring prior to the Effective Date of each of the Parties’ respective Subsidiaries existing on or prior to the Effective Date [***]. In no event shall the releases and covenants not to sue contained in this Article 3 apply to the activities, whether occurring prior to or after the Effective Date, of (1) any Third Party with or into which a Party merges or combines, whether or not such Party remains the surviving entity, or (2) any Third Party and/or portion of the assets of any business of a Third Party that may be acquired by a Party, through merger (including reverse triangular merger), acquisition of stock, acquisition of assets or otherwise, in each case, after the Effective Date.
|
(b)
|
The releases and covenants not to sue contained in this Article 3 are not intended to and do not extend to any Excluded Entity.
|
3.7
|
Dismissals and Other Provisions Terminating the Disputes
.
|
(a)
|
[***], Micron and Rambus, through their respective counsel, shall take all necessary and permissible actions to obtain dismissal with prejudice of all claims, counterclaims, cross-claims and cross-complaints asserted against one another and/or one another’s Subsidiaries in the Patent Litigation and the Antitrust Litigation and the withdrawal or dismissal with prejudice of all appeals therefrom. Such dismissals are final and not appealable.
|
(b)
|
[***]. Both Parties shall, [***], withdraw or discontinue any formal or informal complaints, requests, petitions, actions, or other proceedings they may have pending against the other Party or its Subsidiaries before any court or regulatory body anywhere in the world related to the claims, counterclaims, demands, damages, debts, liabilities, accounts, actions and causes of action released by this Agreement or that relate in any way to the Rambus Patents or the Micron Patents. For the avoidance of doubt, this provision (i) requires Micron to withdraw and discontinue the German Patent Litigation, (ii) requires the Parties, through their respective counsel, to withdraw the Italian Patent Litigation by executing, delivering and submitting such documents as may be necessary to dismiss those cases, and (iii) does not require Rambus to withdraw any complaint or other proceeding as against parties other than Micron or its Subsidiaries.
|
(c)
|
[***], Micron shall, to the full extent permitted by applicable law, withdraw, cease to prosecute or pursue and notify the U.S. Patent and Trademark Office, the European Patent Office, and/or other applicable governmental agency, that it no longer intends to participate in, the Patent Actions.
|
(d)
|
The Parties and their counsel shall cooperate in good faith to effect the dismissals and withdrawals required by Sections 3.7(a), (b), and (c) herein.
|
3.8
|
Costs and Attorneys’ Fees
. For any and all cases, lawsuits, proceedings, Disputes and Patent Actions, including but not limited to the Patent Litigation, German Patent Litigation, the Italian Patent Litigation and the Antitrust Litigation, the Parties agree that each will pay its own costs and attorneys’ fees and that neither will file requests for costs or fees or otherwise seek to recover its fees and/or costs. Without limiting the foregoing, Micron shall not seek to recover any costs previously awarded to it in the Antitrust Litigation. Any bills of costs, judgments or other requests previously filed or awarded in such cases that have not yet been paid including without limitation the judgment for costs awarded to Micron in the Antitrust Litigation shall be withdrawn or vacated.
|
3.9
|
No Admission
. Nothing contained in any of the Comprehensive Resolution Agreements, or done or omitted in connection with any of the Comprehensive Resolution Agreements, is intended as, or shall be construed as, an admission by any Party of any fault, liability or wrongdoing.
|
3.10
|
No Further Actions
. During the Initial Term-Product License Period (as defined in the Patent License Agreement) and each Term-Product License Renewal Period (as defined in the Patent License Agreement) , if any, and as part of the settlement of claims and releases contemplated by this Agreement, during the term of the Patent License Agreement, and in each case unless and to the extent required by court order, summons, subpoena or judicial or regulatory agency order or rule:
|
(a)
|
Micron covenants not to bring, or aid, assist or participate in, any action or proceeding challenging or contesting the assertion, enforcement, validity or enforceability of, or any use or infringement by any Third Party of, the Rambus Patents, including but not limited to filing, requesting, participating or assisting in any of the Patent Actions, provided that, notwithstanding the foregoing, Micron may assist (e.g., provide prior art and/or non-infringement analyses to) each Third Party to whom Micron has distributed or sold a Micron Product before the Effective Date or a Licensed Product during the term of the license associated with such Licensed Product as set forth in the Patent License Agreement, in its defense of any claim of a Rambus Patent asserted against such Third Party by Rambus to the extent that Micron is obligated to provide such Third Party with such assistance pursuant to an indemnification provision;
|
(b)
|
[***]; and
|
(c)
|
Each Party covenants not to (i) file or bring a complaint against, or formally or informally request or urge investigation of, the other Party or any of its Subsidiaries before any regulatory body, or (ii) support, cooperate with or otherwise assist any Third Party in any dispute against the other Party or any of its Subsidiaries, or any regulatory body in any proceeding involving the other Party or any of its Subsidiaries, in each case in any matter related to the claims, counterclaims, defenses, demands, damages, debts, liabilities, accounts, actions and causes of action released by this Agreement, including but not limited to filing, requesting, participating or assisting in any United States, European, or other patent office reexamination proceedings, actions, challenges, oppositions or interferences with respect to Patents of the other Party or any of its Subsidiaries, and filing
amicus curiae
briefs in the Patent Litigation, the Antitrust Litigation, or any other Dispute.
|
4.1
|
Due Incorporation
. Such Party is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation with the requisite corporate authority to own and use its properties and assets and to carry on its business as currently conducted.
|
4.2
|
Due Authorization; Enforceability
. Such Party has the requisite corporate or other authority to enter into, and to grant the releases and discharges, make the covenants, and consummate the transactions contemplated by, this Agreement, on behalf of itself and its Subsidiaries, and otherwise to carry out its and its Subsidiaries’ obligations hereunder. The execution, delivery and performance of this Agreement by such Party and its Subsidiaries has been duly authorized by all necessary action of such Party and its Subsidiaries, and no other act or proceeding on the part of or on behalf of such Party and its Subsidiaries is necessary to approve the execution and delivery of this Agreement, the performance by such Party and its Subsidiaries of their obligations hereunder and the consummation of the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or affecting creditors generally, by general equity principles or by limitations on indemnification pursuant to public policy.
|
4.3
|
No Conflicts; No Consents
. The execution, delivery and performance of this Agreement by such Party and its Subsidiaries, including but not limited to the granting of the releases and discharges contemplated hereby, will not infringe any law, regulation, judgment or order applicable to such Party and its Subsidiaries and is not and will not be contrary to the provisions of the constitutional documents of such Party and its Subsidiaries and will not (with or without notice, lapse of time or both) result in any breach of the terms of, or constitute a default under, any instrument or agreement to which such Party and its Subsidiaries is a party or by which it or its property is bound. All consents and approvals of any court, government agencies or other regulatory body required by such Party and its Subsidiaries for the execution, delivery and performance of the terms of this Agreement have been obtained and are in full force and effect.
|
4.4
|
No Assignment of Claims
. Each Party represents and warrants that it has not assigned, transferred or granted to any Third Party any rights or interests with respect to any claim or cause of action, or any right(s) underlying any claim or cause of action, it had, has, or may have against the other or its Subsidiaries as of, or prior to, the Effective Date of this Agreement.
|
4.5
|
Micron Electronics, Inc.
Micron represents and warrants that Micron Electronics, Inc. is not a Subsidiary of Micron.
|
5.1
|
All notices or other communication required or permitted hereunder shall be in writing and shall be (a) mailed by first class air mail (registered or certified if available), postage prepaid, or otherwise delivered by hand, by messenger, addressed to the addresses set forth below, or (b) delivered by facsimile to the facsimile number set forth below. Each Party may change its address or facsimile number for notices by providing a notice to the other Party in the manner set forth herein. Such notices shall be deemed to have been effective when delivered or, if delivery is not accomplished by reason of some fault or refusal of the addressee, when tendered (which tender, in the case of mail, shall be deemed to have occurred upon posting, and in the case of facsimile, shall be deemed to have occurred upon transmission). All notices shall be in English.
|
6.1
|
Subject to the limitation in Section 3.6 and 8.5, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and assigns, and upon any corporation, limited liability partnership, limited liability company, or other entity into or with which any Party hereto may merge, combine or consolidate. For the avoidance of doubt, this provision does not govern the rights or obligations of successors or assigns of the Parties under the Patent License Agreement. The releases, dismissals and covenants granted by each Party and its Subsidiaries under this Agreement (but not any benefits received by such Party or its Subsidiaries under this Agreement) shall run with (a) in the case of Micron, the Micron Patents or (b) in the case of Rambus, the Rambus Patents, and remain in full force and effect regardless of any subsequent assignment, sale or other transfer of any such Micron Patents or Rambus Patents or any rights or interests therein. Any such assignment, sale, or transfer of rights in contravention of the foregoing shall be null and void
ab initio
and of no force or effect.
|
7.1
|
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
|
7.2
|
English Language
. This Agreement is executed in the English language and no translation shall have any legal effect.
|
7.3
|
Jurisdiction and Venue
. Any legal action, suit or proceeding arising under, or relating to, this Agreement, shall be brought in State or Federal Courts located in the State of Delaware, and each Party agrees that any such action, suit or proceeding may be brought only in such courts. Each Party further waives any objection to the laying of jurisdiction and venue for any such suit, action or proceeding in such courts.
|
8.1
|
Entire Agreement
. This Agreement and the Patent License Agreement embody the entire understanding of the Parties with respect to the subject matter hereof, and merges all prior oral or written communications between them, and neither of the Parties shall be bound by any conditions, definitions, warranties, understandings, or representations with respect to the
|
8.2
|
Relationship of the Parties
. Nothing contained in this Agreement or the Patent License Agreement shall be construed as creating any association, partnership, joint venture or the relation of principal and agent between Rambus and Micron. Each Party is acting as an independent contractor, and no Party shall have the authority to bind any other Party or its representatives in any way.
|
8.3
|
Headings and Recitals
. The headings of the several articles and sections are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. The recitals to this Agreement are intended to be a part of and affect the meaning and interpretation of this Agreement.
|
8.4
|
Modification; Waiver
. No modification or amendment to this Agreement, nor any waiver of any rights, will be effective unless assented to in writing by the Party to be charged, and the waiver of any breach or default will not constitute a waiver of any other right hereunder or any subsequent breach or default.
|
8.5
|
No Assignment
. This Agreement is personal to the Parties, and the Agreement and/or any right or obligation hereunder is not assignable, whether in conjunction with a change in ownership, merger, acquisition, the sale or transfer of all, or substantially all or any part of either Party’s or any of their respective Subsidiaries’ business or assets or otherwise, voluntarily, by operation of law, reverse triangular merger or otherwise, without the prior written consent of the other Party, which consent may be withheld at the sole discretion of such other Party. Each Party understands that, as a condition to such consent, the other Party may require it to convey, assign or otherwise transfer its rights and obligations under the other Comprehensive Resolution Agreements to the entity assuming such Party’s rights and obligations under this Agreement. Any such purported or attempted assignment or transfer in violation of the foregoing shall be deemed a breach of this Agreement and shall be null and void. Notwithstanding the foregoing, either Party shall be entitled to, and each Party hereby agrees to, assign this Agreement to a successor to all or substantially all of a Party’s assets in a transaction entered into solely to change a Party’s place of incorporation.
|
8.6
|
Interpretation
. Each Party confirms that it and its respective counsel have reviewed, negotiated and adopted this Agreement as the agreement and understanding of the Parties hereto and the language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent. Regardless of which Party may have drafted this Agreement or any part thereof, no rule of strict construction shall be applied against either Party. For the avoidance of doubt “includes”, “including”, “included”, and other variations of such terms shall be deemed to be followed by the phrase “without limitation”.
|
8.7
|
No Third Party Beneficiaries
. Unless otherwise expressly stated herein, nothing in this Agreement, express or implied, is intended to confer upon any person other than the Parties hereto or their respective permitted assignees, successors in interest, and Subsidiaries any rights or remedies under or by reason of this Agreement. The former and current agents, representatives, directors, officers, employees, and attorneys of the Parties and their Subsidiaries are intended beneficiaries of Sections 0, 0, 0, 3.4, and 3.5.
|
8.8
|
Severability
. If any provision of any Comprehensive Resolution Agreement is held to be invalid or unenforceable, the meaning of such provision shall be construed, to the extent feasible, so as to render the provision enforceable
and to effectuate the intent and purpose of the Parties with respect to such invalid or unenforceable provision, and if no feasible interpretation shall save such provision, (a) a suitable and equitable provision shall be substituted therefor in order to effectuate, so far as may be valid and enforceable, the intent and purpose of the Parties with respect to such invalid or unenforceable provision, and (b) the remainder of such Comprehensive Resolution Agreement shall remain in full force and effect.
|
8.9
|
Counterparts; Facsimile Transmission
. This Agreement may be executed in two (2) or more counterparts, all of which, taken together, shall be regarded as one and the same instrument. Each Party may rely on facsimile or .pdf signature pages as if such facsimile or .pdf pages were originals.
|
8.10
|
Bankruptcy Code
. All rights, licenses, privileges, releases, and immunities granted under this Agreement shall be deemed to be, for the purposes of Section 365(n) of the U.S. Bankruptcy Code, as amended (the “Bankruptcy Code”), licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that each of the Parties shall retain and may fully exercise all of their respective rights and elections under the Bankruptcy Code. [***].
|
8.11
|
Further Actions
. Each of the Parties hereto agrees to take and cause its Subsidiaries to take any and all actions reasonably necessary in order to effectuate the intent, and to carry out the provisions, of this Agreement.
|
8.12
|
Public Disclosures and Confidentiality
. The Parties shall issue a press release with respect to the Comprehensive Resolution Agreement in a mutually acceptable form. Each Party agrees that, after the issuance of such press release, each Party shall be entitled to disclose the general scope and nature of this Agreement, but that the terms and conditions of this Agreement, to the extent not already disclosed pursuant to such press release, shall be treated as confidential information and that neither Party will disclose such terms or conditions to any Third Party without the prior written consent of the other Party, provided, however, that each Party may disclose the terms and conditions of this Agreement:
|
(a)
|
as required by any court or other governmental body;
|
(b)
|
as otherwise required by law;
|
(c)
|
as otherwise may be required by applicable securities and other law and regulation, including to legal and financial advisors in their capacity of advising a party in such matters, so long as the disclosing Party shall seek confidential treatment of such terms and conditions to the extent reasonably possible;
|
(d)
|
to legal counsel, accountants, and other professional advisors of the Parties;
|
(e)
|
in confidence, to banks, investors and other financing sources and their advisors;
|
(f)
|
in connection with the enforcement of this Agreement or rights under this Agreement;
|
(g)
|
during the course of litigation so long as the disclosure of such terms and conditions are restricted in the same manner as is the confidential information of other litigating parties and so long as (i) the restrictions are embodied in a court-entered protective order limiting disclosure to outside counsel and (ii) the disclosing party informs the other party in writing at least ten (10) business days in advance of the disclosure and discusses the nature and contents of the disclosure, in good faith, with the other party
(for purposes of this provision, the Protective Order entered in the Antitrust Litigation is acceptable, as long as the disclosure is designated as both "Highly Confidential-BP and Highly Confidential-IP");
|
(h)
|
in confidence, in connection with an actual or prospective merger or acquisition or similar transaction; or
|
(i)
|
in confidence, in connection with a Party’s obligation(s) under any most favored nation, or similar clause, whereby such Party is contractually obligated to disclose and offer terms given to Third Parties.
|
RAMBUS INC.
|
|
|
By:
|
/s/ Kevin Donnelly
|
|
Name:
|
Kevin Donnelly
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY, INC.
|
|
|
By:
|
/s/ Brian M. Shirley
|
|
Name:
|
Brian M. Shirley
|
|
|
|
|
|
|
|
MICRON SEMICONDUCTOR PRODUCTS, INC.
|
||
By:
|
/s/ Thomas L. Laws Jr.
|
|
Name:
|
Thomas L. Laws Jr.
|
|
|
|
|
|
|
|
MICRON TECHNOLOGY ITALIA, SRL
|
||
By:
|
/s/ Thomas L. Laws Jr.
|
|
Name:
|
Thomas L. Laws Jr.
|
|
|
|
|
|
|
|
MICRON SEMICONDUCTOR (DEUTSCHLAND) GMBH
|
||
By:
|
/s/ Thomas L. Laws Jr.
|
|
Name:
|
Thomas L. Laws Jr.
|
|
(a)
|
owns or co-owns the entire design of such product and are free to set the price and other terms with respect to such product and not subject to limitation on how it may use and exploit such design except for field of use limitations agreed at arms-length with one or more JV Partners; or,
|
(b)
|
owns, or co-owns, only a portion of the entire design of such product with no limitations on how it may use and exploit such portion and where, with respect to the remaining portion(s) of such design, (i) Micron or any of its Subsidiaries has a license from the entity or entities that own(s) such remaining portion(s) of the design to (A) make (and/or have made) such remaining portion(s) as embodied in such product and (B) Sell such made (or have made) remaining portion(s) as embodied in such product without restriction as to whom Micron and/or its Subsidiaries may Sell such remaining portion(s) as embodied in such product and (ii) Micron and/or its Subsidiaries are free to set the price and other terms with respect to such remaining portion(s) as embodied in such product; or,
|
(c)
|
has a license from the entity or entities that own(s) the entire design of such product to (i) make (and/or have made) such product and (ii) Sell such made (or have made) product without restriction as to whom Micron and/or its Subsidiaries may Sell such product and Micron and/or its Subsidiaries are free to set the price and other terms with respect to such product.
|
(a)
|
Term-Product License
. Subject to the terms and conditions of this Agreement, Rambus, on behalf of itself and its Subsidiaries, hereby grants to Micron and, subject to Section 5.2 below, its Subsidiaries, for each product that falls within the definition of a Term Product, a non-exclusive, non-transferable, worldwide license, without the right to sublicense, solely under the Rambus Applicable Patent Claims applicable to such Term Product, to make (including have made), use, Sell, offer for Sale, transfer from Micron and its Subsidiaries to their Affiliates, and import such Term Product until the expiration or termination of this license pursuant to Section 7.1(a) below, provided that such license:
|
(b)
|
Initial Paid-Up Product License
. Subject to the terms and conditions of this Agreement, Rambus, on behalf of itself and its Subsidiaries, hereby grants to Micron and, subject to Section 5.2 below, its Subsidiaries, for each product that falls within the definition of an Initial Paid-Up Product, a non-exclusive, non-transferable, worldwide license, without the right to sublicense, solely under the Rambus Applicable Patent Claims applicable to such Initial Paid-Up Product, to make (including have made), use, Sell, offer for Sale, transfer from Micron and its Subsidiaries to their Affiliates, and import such Initial Paid-Up Product until the termination of this license pursuant to Section 7.1(b) below, provided that such license, is expressly conditioned upon Rambus’ receipt, in accordance with Section 6.2 below or during the cure period set forth in Section 7.2 below, of (i) the Initial Payment and (ii) each Quarterly Payment that becomes due on or before the Expiration Date.
|
(c)
|
Subsequent Paid-Up Product License
. Subject to the terms and conditions of this Agreement, Rambus, on behalf
|
(a)
|
Rambus, on behalf of itself and its Subsidiaries, represents and warrants that Exhibit A sets forth all patents and patent applications that have been assigned, between [***] and the Effective Date, to one or more Third Parties by Rambus and its Subsidiaries.
|
(b)
|
Rambus, on behalf of itself and its Subsidiaries, represents and warrants that:
|
(a)
|
The rights and licenses granted herein apply solely to those products and activities expressly provided for under this Agreement. Nothing in this Agreement shall be deemed to, and shall not be construed to, constitute any release, forbearance, forfeiture or other waiver of any rights of either Party or their respective Subsidiaries to enforce any of their respective intellectual property rights with respect to any activities undertaken by the other Party, its Subsidiaries, and/or any other Third Party to the extent not expressly granted or made hereunder.
|
(b)
|
Except as expressly provided for under this Agreement, no authorization, release, license, covenant or other right is granted or made, by implication, estoppel, acquiescence or otherwise under this Agreement, to either Party, its respective Subsidiaries, and/or any other Third Party under any patents, utility models, patent or utility model claims, or other intellectual property rights now or hereafter owned or controlled by either Party or their respective Subsidiaries.
|
(c)
|
Except as expressly provided for under this Agreement, none of the terms of this Agreement shall be deemed to, and shall not be construed to, constitute, whether by implication, estoppel, acquiescence or otherwise, (i) an authorization by either Party, its Subsidiaries, and/or any Third Party to Sell, offer for Sale and/or import any product (A) in or for combination with any other element (including, but not limited to any function or feature), product or instrumentality; or (B) unconditionally for use in or for combination with any other element (including, but not limited to any function or feature), product or instrumentality or (ii) a waiver by either Party or its Subsidiaries of any liability for infringement based on the other Party’s, its respective Subsidiaries, and/or any other Third Party’s making, use, Sale, offer for Sale and/or import of any product in combination with any other element (including, but not limited to, any function or feature), product or instrumentality.
|
(a)
|
[***]. Provided that and for so long as Micron and its Subsidiaries are not in breach of either this Agreement or the Settlement Agreement, and subject to Sections 3.4, 3.5, and 3.6 below, Rambus, for itself and on behalf of its Subsidiaries, agrees that [***].
|
(b)
|
[***]
. Provided that and for so long as Micron and its Subsidiaries are not in breach of either this Agreement or the Settlement Agreement, and subject to Sections 3.4, 3.5, and 3.6 below, Rambus, for itself and on behalf of its Subsidiaries, agrees that, [***].
|
(c)
|
Covenants [***]
.
|
(d)
|
Benefits Not Transferable
. The benefits under Sections 3.1(a), 3.1(b), and 3.1(b) above are personal and cannot be assigned, transferred, or delegated by Micron to any Third Party.
|
(a)
|
Designs and Released Designs
. Provided that Rambus and its Subsidiaries are not in breach of either this Agreement or the Settlement Agreement, and subject to Sections 3.4, 3.5, and 3.6 below, Micron, for itself and on behalf of its Subsidiaries, agrees that [***].
|
(b)
|
Other Rambus Designs
. Provided that Rambus and its Subsidiaries are not in breach of either this Agreement or the Settlement Agreement, and subject to Sections 3.4, 3.5, and 3.6 below, Micron, for itself and on behalf of its Subsidiaries, agrees that, [***].
|
(c)
|
Benefits Not Transferable
. The benefits under Sections 3.2(a) and 3.2(b) above are personal and cannot be assigned, transferred, or delegated by Rambus to any Third Party.
|
(a)
|
Each Party shall ensure that the Patents of each New Subsidiary are included within the definition of the applicable Party’s Patents; and,
|
(b)
|
Each Party shall ensure that each New Subsidiary is bound as applicable, by this Agreement.
|
(a)
|
Rambus agrees that the Elpida Technology License Agreement and the Elpida XDR License Agreement are each hereby amended such that, from and after the Effective Date, Elpida will be licensed (i) to sell Direct Rambus DRAMs and Direct Rambus Multichip Modules to Micron, as a Semiconductor Company, for resale as an integrated circuit, in the case of Direct Rambus DRAMs, or Direct Rambus Multichip Module, and (ii) to make, use and sell Yellowstone Rambus DRAMs, alone or incorporated into Yellowstone Rambus Multichip Modules, Yellowstone Rambus Boards, and Yellowstone Rambus Systems to Micron as a Semiconductor Company, for resale by Micron to Third Parties, where the meaning of each of the foregoing capitalized terms has the meaning ascribed to in the Elpida Technology License Agreement or the Elpida XDR License Agreement, as the case may be.
|
(b)
|
The Elpida Patent License Agreement shall be deemed to have terminated on September 30, 2013 and, for the avoidance of doubt, Elpida shall be licensed hereunder as a Subsidiary of Micron. Notwithstanding Section 7.6 (Survival) of the Elpida Patent License Agreement, the following provisions of the Elpida Patent License Agreement are hereby terminated and shall not survive this termination: Section 5.2 (Quarterly License Payment), Section 6 (Payments), and Section 9.1 (DRAM Revenue).
|
(c)
|
The Semiconductor Technology License Agreement entered into by and between Rambus and Micron, effective March 24, 1997 shall be deemed to have terminated on the Effective Date, if and to the extent such agreement is still in place and effective as of the Effective Date.
|
(a)
|
Initial and Fixed 28th Quarterly Payments
.
|
(b)
|
Quarterly Payments
. Subject to Section 5.3 below, Micron shall pay to Rambus:
|
(a)
|
Acquisition of Business with [***] Products
. If (i) Micron or any of its Subsidiaries completes an Acquisition for which:
|
(b)
|
Acquisition of Business with [***] Products [***]
. If Micron or any of its Subsidiaries completes an Acquisition
|
(c)
|
Acquisition Report and Audit Rights
. Within thirty (30) days after the end of each Quarter (until all Quarterly Payments payable hereunder have been reported and paid) in which one or more Acquisition Dates occurred, Micron shall notify Rambus in writing of such event and Micron’s determination of the associated Quarterly Payment Cap Increase, if any, and provide Rambus with a written detailed statement (in suitable form) containing all information necessary to calculate such Quarterly Payment Cap Increase. Each Quarterly Payment Cap Increase will become effective in the Quarter following the Quarter in which the associated Acquisition Date occurred. If, for any reason, Rambus disagrees with Micron’s determination of the associated Quarterly Payment Cap Increase, Rambus may conduct an audit pursuant to subsection (e) below. If the Parties cannot reach agreement on the determination of the associated Quarterly Payment Cap Increase within thirty (30) days following the conclusion of such audit, either Party may, as its sole and exclusive remedy to resolve such dispute, submit such dispute to binding arbitration pursuant to the terms of Section 9.1. Unless and until the Parties resolve such disagreement, none of the rights, licenses and covenants granted under Section
2
.1 shall apply to any activity of any such Acquired Business (“Audited Acquired Business”).
|
(d)
|
[***]
|
(e)
|
[***]
|
(f)
|
[***]
|
(a)
|
Given the worldwide scope of this Agreement, the impracticality of monitoring by Micron of the movement of Licensed Products through international markets, and that Rambus will be issued new patents and/or utility models continually in various countries throughout the Initial Term-Product License Period and the Term-Product License Renewal Periods (if any) that will be licensed hereunder, it is agreed and recognized that paying Quarterly Payments based on the worldwide Sales of certain DRAMs, DRAM Controllers, SerDes ICs, Resistive RAMs, and RAM Flash Memories at the rates set forth in this Agreement, is fair and reasonable, representing a balance between the concerns and interests of both Parties and resulting in a convenience for both Parties.
|
(b)
|
The Parties acknowledge that it is essential that their respective obligations under this Agreement be certain and not subject to collateral attack. Accordingly, each Party agrees that it will not seek, through litigation or otherwise, to adjust the amount of payments required under this Agreement, or to avoid, defer or modify their respective obligations hereunder, and that Micron shall make the full amount of such payments regardless of whether any of the Rambus Patents is determined not to be infringed by any particular Licensed Product, or whether any court, patent office or other governmental agency determines any Rambus Patent to be invalid or unenforceable in any reexamination, action or other proceeding, provided that the foregoing shall not prevent the Parties from seeking enforcement of the terms or conditions of the this Agreement or taking any action expressly contemplated by this Agreement.
|
(a)
|
the total revenue and Net Sales, each in United States Dollars, that Micron and each of its Subsidiaries invoiced or otherwise charged during such Quarter for the Sale worldwide of DRAMs, DRAM Controllers, SerDes ICs,
|
(b)
|
an itemized accounting of the number of DRAMs, DRAM Controllers, SerDes ICs, Resistive RAMs, and RAM Flash Memories (excluding Initial Paid-Up Products and Subsequent Paid-Up Products to the extent that they are so excluded under Section 5.1(b) above) Sold worldwide during such Quarter by Micron and each of its Subsidiaries; and,
|
(c)
|
an itemized accounting (by associated customer and associated Technical Specification) of the number of Custom Memory ICs Sold worldwide during such Quarter by Micron and each of its Subsidiaries and the total revenue and Net Sales, each itemized (by associated customer and associated Technical Specification) and in United States Dollars, that Micron and each of its Subsidiaries invoiced or otherwise charged during such Quarter for the Sale worldwide of each such Custom Memory IC (excluding Initial Paid-Up Products and Subsequent Paid-Up Products to the extent that they are so excluded under Section 5.1(b) above), provided that if no such revenue and/or Net Sales were invoiced or otherwise charged during such Quarter, that fact shall be shown on such statement;
|
(d)
|
the associated Quarterly Payment payable thereon (each such itemized statement, a “Quarterly Itemized Sales Report”).
|
(a)
|
Term-Product License
. The Term-Product License shall, unless earlier terminated in accordance with Section 7.1(e) below, continue in full force and effect until:
|
(b)
|
Initial Paid-Up Product License
. The Initial Paid-Up Product License shall, continue in full force and effect unless and until terminated in accordance with Section 7.1(e). For avoidance of doubt, the Initial Paid-Up Product License shall automatically be rendered null, void, and without effect as if never granted if Micron breaches this Agreement by failing to pay Rambus (A) the Initial Payment in a timely manner and (B) each Quarterly Payment that becomes due on or before the Expiration Date in a timely manner and fails to cure such failure in accordance with Section 7.2 below.
|
(c)
|
Subsequent Paid-Up Product License
. The Subsequent Paid-Up Product License shall, with respect to each given Subsequent Paid-Up Product qualifying as such under Section 1.87(a), unless earlier terminated in accordance with Section 7.1(e) below, continue in full force and effect until the date of the expiration of the Initial Term-Product License Period, if Micron fails to renew the Term-Product License for the Initial Term-Product License Renewal Period in accordance with Section 7.1(d) below, and in perpetuity following the date of the expiration of the Initial Term-Product License Renewal Period, if Micron renews the Term-Product License for the Initial Term-Product License Renewal Period in accordance with Section 7.1(d) and Micron has satisfied all of its payment obligations set forth in this Agreement during such Initial Term-Product License Renewal Period. The Subsequent Paid-Up Product License shall, with respect to each given Subsequent Paid-Up Product qualifying as such under Section 1.87(b), unless earlier terminated in accordance with Section 7.1(e), below, continue in full force and effect until:
|
(d)
|
Term-Product License Renewal
. Micron shall have the option to:
|
(e)
|
Effect of Termination of Agreement
.
|
(a)
|
In General
. [***] in the event of [***] Change of Control, Rambus may, in addition to the rights set forth in
|
(b)
|
[***]
|
(a)
|
as required by any court or other governmental body;
|
(b)
|
as otherwise required by law;
|
(c)
|
as otherwise may be required by applicable securities and other law and regulation, including to legal and financial advisors in their capacity of advising a Party in such matters so long as the disclosing Party shall seek confidential treatment of such terms and conditions to the extent reasonably possible;
|
(d)
|
in confidence to legal counsel, accountants, and other professional advisors of the Parties;
|
(e)
|
in confidence, to banks, investors and other financing sources and their advisors;
|
(f)
|
during the course of litigation so long as the disclosure of such terms and conditions are restricted in the same manner as is the confidential information of other litigating entities and so long as (A) the restrictions are embodied in a court-entered protective order limiting disclosure to outside counsel and (B) the disclosing Party informs the other Party in writing at least ten (10) business days in advance of the disclosure and discusses the nature and contents of the disclosure, in good faith, with the other Party;
|
(g)
|
in confidence, to a Third Party to whom either Party assigns one or more of its Patents, but solely to the extent necessary to inform such Third Party of the encumbrances contained herein on such Patents;
|
(h)
|
in confidence, in connection with an actual or prospective merger or acquisition or similar transaction,
|
(i)
|
in confidence, by Rambus to [***]; or,
|
(j)
|
in confidence, in connection with a Party’s obligation(s) under any most favored nation, or similar clause, whereby such Party is contractually obligated to disclose and offer terms given to Third Parties.
|
(a)
|
a warranty or representation by either Party as to the validity, enforceability, and/or scope of any intellectual property rights;
|
(b)
|
imposing upon either Party any obligation to institute any suit or action for infringement of any intellectual property right, or to defend any suit or action brought by a Third Party which challenges or concerns the validity, enforceability or scope of any intellectual property rights;
|
(c)
|
imposing on either Party any obligation to file any application or registration with respect to any intellectual property rights or to secure or maintain in force any intellectual property rights;
|
(d)
|
imposing on either Party any obligation to furnish any technical information or know-how; or,
|
(e)
|
imposing or requiring, whether by implication or otherwise, any support, maintenance or any technology deliverable obligations on either Party’s or their respective Subsidiaries’ part under this Agreement (and neither Party nor any of their respective Subsidiaries are providing any support, maintenance or technology deliverables under this Agreement).
|
(a)
|
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
|
(b)
|
This Agreement is executed in the English language and no translation shall have any legal effect.
|
(c)
|
Any legal action, suit or proceeding arising under, or relating to, this Agreement, shall be brought in the State or Federal Courts located in the State of Delaware, and each Party agrees that any such action, suit or proceeding may be brought only in such courts. Each Party further waives any objection to the laying of jurisdiction and venue for any such suit, action or proceeding in such courts.
|
RAMBUS INC.
|
|
MICRON TECHNOLOGY, INC.
|
||
By:
|
/s/ Kevin Donnelly
|
|
By:
|
/s/ Brian M. Shirley
|
Name:
|
Kevin Donnelly
|
|
Name:
|
Brian M. Shirley
|
Title:
|
Senior Vice President
|
|
Title:
|
Vice President of DRAM Solutions
|
Date:
|
December 9, 2013
|
|
Date:
|
December 9, 2013
|
Agreed on behalf of
Rambus:
|
|
/s/ Kevin Donnelly
|
|
Name:
|
Kevin Donnelly
|
Title:
|
Senior Vice President
|
Date:
|
December 30, 2013
|
|
|
Agreed on behalf of
Samsung:
|
|
/s/ Jay Shim
|
|
Name:
|
Jay Shim
|
Title:
|
Senior Vice President of IP
|
Date:
|
December 23, 2013
|
1.
|
I have reviewed this annual report on Form 10-K of Rambus Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 21, 2014
|
|
|
|
By:
|
/s/ Ronald Black
|
Name:
|
Ronald Black, Ph.D.
|
Title:
|
Chief Executive Officer and President
|
1.
|
I have reviewed this annual report on Form 10-K of Rambus Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: February 21, 2014
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By:
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/s/ Satish Rishi
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Name:
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Satish Rishi
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Title:
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Senior Vice President, Finance and Chief Financial Officer
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By:
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/s/ Ronald Black
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Name:
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Ronald Black, Ph.D.
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Title:
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Chief Executive Officer and President
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By:
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/s/ Satish Rishi
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Name:
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Satish Rishi
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Title:
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Senior Vice President, Finance and Chief Financial Officer
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