-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EbIVvXVfiI33Cz9FmuNxt/UJrziNgShOA/R1MPBsR3sD5mY3jLzfJtYMgyThW+PZ Lro7G3YhsbQZf78sHIVHcQ== 0001012870-01-500067.txt : 20010410 0001012870-01-500067.hdr.sgml : 20010410 ACCESSION NUMBER: 0001012870-01-500067 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20010406 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PERICOM SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0001001426 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770254621 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: SEC FILE NUMBER: 005-52695 FILM NUMBER: 1597209 BUSINESS ADDRESS: STREET 1: 2380 BERING DR CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4084350800 MAIL ADDRESS: STREET 1: 2380 BERING DR CITY: SAN JOSE STATE: CA ZIP: 95131 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PERICOM SEMICONDUCTOR CORP CENTRAL INDEX KEY: 0001001426 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 770254621 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 2380 BERING DR CITY: SAN JOSE STATE: CA ZIP: 95131 BUSINESS PHONE: 4084350800 MAIL ADDRESS: STREET 1: 2380 BERING DR CITY: SAN JOSE STATE: CA ZIP: 95131 SC TO-I 1 dsctoi.txt SCHEDULE 14D-1 As filed with the Securities and Exchange Commission on April 6, 2001 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________ SCHEDULE TO (Rule 13e-4) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ______________________ PERICOM SEMICONDUCTOR CORPORATION (Name of Subject Company (Issuer)) ______________________ PERICOM SEMICONDUCTOR CORPORATION (Name of Filing Person (Offeror)) Certain Options Granted Under the Pericom Semiconductor Corporation 1995 Stock Option Plan and 2001 Stock Incentive Plan, as amended, to Purchase Common Stock That Have an Exercise Price of $15.00 Per Share or Greater (Title of Class of Securities) 713 831 10 5 (CUSIP Number of Class of Securities) (Underlying Common Stock) Alex Hui President and Chief Executive Officer Pericom Semiconductor Corporation 2380 Bering Drive San Jose, CA 95131 (408) 435-0800 ______________________ (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) ______________________ Copy to: Richard Scudellari, Esq. Morrison & Foerster, LLP 755 Page Mill Road Palo Alto, CA 94304-1018 (650) 813-5880 ______________________ Calculation of Filing Fee ================================================================================ Transaction Valuation* Amount of Filing Fee ================================================================================ $28,140,403 $5,628 ================================================================================ *Calculated solely for purposes of determining the filing fee. This amount assumes that options to purchase 1,502,150 shares of common stock of Pericom Semiconductor Corporation having an aggregate value of $28,140,403 as of April 2, 2001 will be exchanged pursuant to this offer. The aggregate value of such options was calculated based on the Black-Scholes option pricing model. The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the value of the transaction. [_] Check box if any part of the fee is offset as provided by Rule 0- 11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not applicable. Form or Registration No.: Not applicable. 1 Filing party: Not applicable. Date filed: Not applicable. [_] Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [_] third party tender offer subject to Rule 14d-1. [X] issuer tender offer subject to Rule 13e-4. [_] going-private transaction subject to Rule 13e-3. [_] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer. [_] 2 INTRODUCTORY STATEMENT This Tender Offer Statement on Schedule TO (this "Schedule TO") relates to our offer to exchange certain options to purchase shares of our common stock held by our employees for new options to purchase shares of our common stock at a per share exercise price equal to the fair market value of one share of our common stock on the date of grant upon the terms and subject to the conditions in the Offer to Exchange dated April 6, 2001 attached hereto as Exhibit (a)(1) (the "Offer to Exchange") and the related Letter of Transmittal attached hereto as Exhibit (a)(2) (the "Letter of Transmittal"). The information in the Offer to Exchange and the Letter of Transmittal is incorporated herein by reference in answer to all applicable items in this Schedule TO, except as otherwise set forth below. Item 1. Summary Term Sheet. The information set forth under "Summary Term Sheet" in the Offer to Exchange, dated April 6, 2001 (the "Offer to Exchange"), attached hereto as Exhibit (a)(1), is incorporated herein by reference. Item 2. Subject Company Information. (a) The name of the issuer is Pericom Semiconductor Corporation, a California corporation (the "Company"), and the address of its principal executive offices is Pericom Semiconductor Corporation, 2380 Bering Drive, San Jose, CA 95131. The information set forth in the Offer to Exchange under Section 9 ("Information Concerning Pericom Semiconductor Corporation") is incorporated herein by reference. (b) This Tender Offer Statement on Schedule TO relates to an offer by the Company to exchange all options outstanding under the Pericom Semiconductor Corporation Amended and Restated 1995 Stock Option Plan (the "1995 Plan") and 2001 Stock Incentive Plan (the "2001 Plan") to purchase shares of the Company's common stock (the "Common Stock") (the "Options") for new options (the "New Options") to purchase shares of the Common Stock to be granted under the 1995 Plan and 2001 Plan, upon the terms and subject to the conditions described in the Offer to Exchange and the related Letter of Transmittal (the "Letter of Transmittal" and, together with the Offer to Exchange, as they may be amended from time to time, the "Offer"), attached hereto as Exhibit (a)(2). The number of shares of Common Stock subject to the New Options will be equal to the number of shares of Common Stock subject to the Options that are accepted for exchange and canceled. The information set forth in the Offer to Exchange under "Summary Term Sheet," "Introduction," Section 1 ("Number of Options; Expiration Date"), Section 5 ("Acceptance of Options for Exchange and Issuance of New Options") and Section 8 ("Source and Amount of Consideration; Terms of New Options") is incorporated herein by reference. (c) The information set forth in the Offer to Exchange under Section 7 ("Price Range of Common Stock Underlying the Options") is incorporated herein by reference. 3 Item 3. Identity and Background of Filing Person. (a) The information set forth under Item 2(a) above is incorporated herein by reference. Item 4. Terms of the Transaction. (a) The information set forth in the Offer to Exchange under "Summary Term Sheet," "Introduction," Section 1 ("Number of Options; Expiration Date"), Section 3 ("Procedures for Tendering Options"), Section 4 ("Withdrawal Rights"), Section 5 ("Acceptance of Options for Exchange and Issuance of New Options"), Section 6 ("Conditions of the Offer"), Section 8 ("Source and Amount of Consideration; Terms of New Options"), Section 11 ("Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer"), Section 12 ("Legal Matters; Regulatory Approvals"), Section 13 ("Material Federal Income Tax Consequences") and Section 14 ("Extension of Offer; Termination; Amendment") is incorporated herein by reference. (b) The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") is incorporated herein by reference. Item 5. Past Contacts, Transactions, Negotiations and Arrangements. (a) The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") is incorporated herein by reference. Item 6. Purposes of the Transaction and Plans or Proposals. (a) The information set forth in the Offer to Exchange under Section 2 ("Purpose of the Offer") is incorporated herein by reference. (b) The information set forth in the Offer to Exchange under Section 5 ("Acceptance of Options for Exchange and Issuance of New Options") and Section 11 ("Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer") is incorporated herein by reference. (c) The information set forth in the Offer to Exchange under Section 2 ("Purpose of the Offer") is incorporated herein by reference. Item 7. Source and Amount of Funds or Other Consideration. (a) The information set forth in the Offer to Exchange under Section 8 ("Source and Amount of Consideration; Terms of New Options") and Section 15 ("Fees and Expenses") is incorporated herein by reference. (b) The information set forth in the Offer to Exchange under Section 6 ("Conditions of the Offer") is incorporated herein by reference. 4 (d) Not applicable. Item 8. Interest in Securities of the Subject Company. (a) Not applicable. (b) The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") is incorporated herein by reference. Item 9. Person/Assets, Retained, Employed, Compensated or Used. (a) Not applicable. Item 10. Financial Statements. (a) The information set forth in the Offer to Exchange under Section 9 ("Information Concerning Pericom Semiconductor Corporation") and Section 16 ("Additional Information"), and on pages 2 through 18 of the Company's Annual Report on Form 10-K for its fiscal year ended July 1, 2000, pages through 3 through 19 of the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2000 and pages 3 through 19 of the Company's Quarterly Report on Form 10-Q for its fiscal quarter ended December 30, 2000 is incorporated herein by reference. Item 11. Additional Information. (a) The information set forth in the Offer to Exchange under Section 10 ("Interests of Directors and Officers; Transactions and Arrangements Concerning the Options") and Section 12 ("Legal Matters; Regulatory Approvals") is incorporated herein by reference. (b) Not applicable. Item 12. Exhibits. (a) (1) Offer to Exchange, dated April 6, 2001. (2) Form of Letter of Transmittal. (3) Form of Letter to Eligible Option Holders. (4) Form of Letter to Tendering Option Holders. (5) Form of E-mail Letter to Pericom Semiconductor Corporation Employees. (6) Pericom Semiconductor Corporation Annual Report on Form 10-K for its fiscal year ended July 1, 2000, filed with the Securities and Exchange Commission on September 29, 2000 and incorporated herein by reference. 5 (7) Pericom Semiconductor Corporation Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2000, filed with the Securities and Exchange Commission on November 13, 2000 and incorporated herein by reference. (8) Pericom Semiconductor Corporation Quarterly Report on Form 10-Q for its fiscal quarter ended December 30, 2000, filed with the Securities and Exchange Commission on February 9, 2001 and incorporated herein by reference. (b) Not applicable. (d) (1) Pericom Semiconductor Corporation 1995 Stock Option Plan incorporated herein by reference. (2) Form of Option Agreement Pursuant to the Pericom Semiconductor Corporation 1995 Stock Option Plan incorporated herein by reference. (3) Pericom Semiconductor Corporation 2001 Stock Incentive Plan and Form of Option Agreement Pursuant to the Pericom Semiconductor Corporation 2001 Stock Incentive Plan. (g) Not applicable. (h) Not applicable. Item 13. Information Required by Schedule 13E-3. (a) Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct. PERICOM SEMICONDUCTOR CORPORATION /s/ Alex C. Hui --------------------------------- Date: April 6, 2001 6 INDEX TO EXHIBITS
Exhibit Number Description ---------------------------------------------------------------------------------------------------------------- (a)(1) Offer to Exchange, dated April 6, 2001. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Letter to Eligible Option Holders. (a)(4) Form of Letter to Tendering Option Holders. (a)(5) Form of E-mail Letter to Pericom Semiconductor Corporation Employees. (a)(6) Pericom Semiconductor Corporation Annual Report on Form 10-K for its fiscal year ended July 1, 2000, filed with the Securities and Exchange Commission on September 29, 2000 and incorporated herein by reference. (a)(7) Pericom Semiconductor Corporation Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2000, filed with the Securities and Exchange Commission on November 13, 2000 and incorporated herein by reference. (a)(8) Pericom Semiconductor Corporation Quarterly Report on Form 10-Q for its fiscal quarter ended December 30, 2000, filed with the Securities and Exchange Commission on February 9, 2001 and incorporated herein by reference. (d)(1) Pericom Semiconductor Corporation 1995 Stock Option Plan incorporated herein by reference. (d)(2) Form of Option Agreement Pursuant to the Pericom Semiconductor Corporation 1995 Stock Option Plan incorporated herein by reference. (d) (3) Pericom Semiconductor Corporation 2001 Stock Incentive Plan and Form of Option Agreement Pursuant to the Pericom Semiconductor Corporation 2001 Stock Incentive Plan.
7 EX-99.(A.1) 2 dex99a1.txt OFFER TO EXCHANGE, DATED APRIL 6, 2001 Exhibit (a)(1) PERICOM SEMICONDUCTOR CORPORATION OFFER TO EXCHANGE ALL OUTSTANDING OPTIONS UNDER THE PERICOM SEMICONDUCTOR CORPORATION AMENDED AND RESTATED 1995 STOCK OPTION PLAN AND 2001 STOCK INCENTIVE PLAN TO PURCHASE COMMON STOCK HAVING AN EXERCISE PRICE OF $15.00 OR MORE HELD BY OPTION HOLDERS FOR NEW OPTIONS UNDER THE PERICOM SEMICONDUCTOR CORPORATION 1995 STOCK OPTION PLAN AND 2001 STOCK INCENTIVE PLAN ================================================================================ THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., PACIFIC TIME, ON May 4, 2001, UNLESS THE OFFER IS EXTENDED. ================================================================================ Pericom Semiconductor Corporation is offering to exchange all outstanding options to purchase shares of our common stock granted under the Pericom Semiconductor Corporation Amended and Restated 1995 Stock Option Plan (the "1995 Plan") and the 2001 Stock Incentive Plan (the "2001 Plan") that have an exercise price of $15.00 per share or more and are held by option for new options we will grant under the 1995 Plan and 2001 Plan. We are making this offer upon the terms and subject to the conditions set forth in this offer to exchange and in the related letter of transmittal (which together, as they may be amended from time to time, constitute the "offer"). The number of shares of common stock subject to new options to be granted to each option holder will be equal to the number of shares subject to the options tendered by such option holder and accepted for exchange. We will grant the new options on or about the first business day which is at least six months and one day following the date we cancel the options accepted for exchange. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. This offer is not conditioned upon a minimum number of options being tendered. This offer is subject to conditions which we describe in Section 6 of this offer to exchange. If you tender options for exchange as described in the offer, we will grant you new options under the 1995 Plan and 2001 Plan and a new option agreement between us and you. The exercise price of the new options will be equal to the last reported sale price of our common stock on the Nasdaq National Market on the date of grant. The new options will vest over a 42 month period, with 12.5% vesting on the Grant Date and 1/48th of the total amount of new options vesting each month thereafter over the next 42 months. ALTHOUGH OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR Exh.(a)(1)-1 OPTIONS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION WHETHER TO TENDER YOUR OPTIONS. Shares of our common stock are quoted on the Nasdaq National Market under the symbol "PSEM." On April 3, 2001, the last reported sale price of the common stock on the Nasdaq National Market was $11.94 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. THIS OFFER TO EXCHANGE HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER TO EXCHANGE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. You should direct questions about this offer or requests for assistance or for additional copies of the offer to exchange or the letter of transmittal to Pericom Semiconductor Corporation, 2380 Bering Drive, San Jose, CA 95131, Attn: Michael D. Craighead, CFO. IMPORTANT If you wish to tender your options for exchange, you must complete and sign the letter of transmittal in accordance with its instructions, and mail or otherwise deliver it and any other required documents to us at Pericom Semiconductor Corporation We are not making this offer to, nor will we accept any tender of options from or on behalf of, option holders in any jurisdiction in which the offer or the acceptance of any tender of options would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take any actions necessary for us to make this offer to option holders in any such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. Exh.(a)(1)-2 TABLE OF CONTENTS SUMMARY TERM SHEET INTRODUCTION THE OFFER 1. Number of Options; Expiration Date 2. Purpose of the Offer 3. Procedures for Tendering Options 4. Withdrawal Rights 5. Acceptance of Options for Exchange and Issuance of New Options 6. Conditions of the Offer 7. Price Range of Common Stock Underlying the Options 8. Source and Amount of Consideration; Terms of New Options 9. Information Concerning Pericom Semiconductor Corporation 10. Interests of Directors and Officers; Transactions and Arrangements Concerning the Options 11. Status of Options Acquired by Us in the Offer; Accounting Consequences of the Offer 12. Legal Matters; Regulatory Approvals 13. Material Federal Income Tax Consequences 14. Extension of Offer; Termination; Amendment 15. Fees and Expenses 16. Additional Information 17. Miscellaneous SCHEDULE A Information Concerning the Directors and Executive Officers of Pericom Semiconductor Corporation Exh.(a)(1)-3 SUMMARY TERM SHEET The following are answers to some of the questions that you may have about this offer. We urge you to read carefully the remainder of this offer to exchange and the accompanying letter of transmittal because the information in this summary is not complete, and additional important information is contained in the remainder of this offer to exchange and the letter of transmittal. We have included page references to the remainder of this offer to exchange where you can find a more complete description of the topics in this summary. . WHAT SECURITIES ARE WE OFFERING TO EXCHANGE? We are offering to exchange all stock options having an exercise price of $15.00 per share or more which are outstanding under our 1995 Plan and 2001 Plan , or any lesser number of options that option holders properly tender in the offer, for new options under the 1995 Plan and 2001 Plan. (Page (a)(1)-10) . WHY ARE WE MAKING THE OFFER? Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our common stock. We believe these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the market value of our common stock on the grant date, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize stockholder value. . WHAT ARE THE CONDITIONS TO THE OFFER? The offer is not conditioned upon a minimum number of options being tendered. The offer is subject to a number of conditions, including the conditions described in Section 6. (Page (a)(1)-15) . ARE THERE ANY ELIGIBILITY REQUIREMENTS I MUST SATISFY AFTER THE EXPIRATION DATE OF THE OFFER TO RECEIVE THE NEW OPTIONS? To receive a grant of new options pursuant to the offer and under the terms of the 1995 Plan and 2001 Plan, you must be an employee of Pericom Semiconductor Corporation or one of its subsidiaries from the date you tender options through the date we grant the new options. As discussed below, we will not grant the new options until on or about the first business day which is at least six months and one day following the date we cancel the options accepted for exchange. IF YOU ARE NOT AN EMPLOYEE OF PERICOM SEMICONDUCTOR CORPORATION OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR THE OPTIONS TENDERED IF YOU ARE NOT AN Exh.(a)(1)-4 EMPLOYEE FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS. . HOW MANY NEW OPTIONS WILL I RECEIVE IN EXCHANGE FOR MY TENDERED OPTIONS? We will grant you new options to purchase the number of shares of our common stock which is equal to the number of shares of common stock subject to the options you tender. All new options will be granted under our 1995 Plan and 2001 Plan and will be subject to the terms and conditions of the 1995 Plan and 2001 Plan and a new option agreement between you and us. The new option agreement will be in substantially the same form as the option agreement or agreements for your current options. . WHEN WILL I RECEIVE MY NEW OPTIONS? We will grant the new options on or about the first business day that is at least six months and one day after the date we cancel the options accepted for exchange. If we cancel tendered options on May 4, 2001, which is the scheduled expiration date of the offer, the grant date of the new options will be on or about November 5, 2001. (Page (a)(1)-14) . WHY WON'T I RECEIVE MY NEW OPTIONS IMMEDIATELY AFTER THE EXPIRATION DATE OF THE OFFER? If we were to grant the new options on any date which is earlier than six months and one day after the date we cancel the options accepted for exchange, we would be required for financial reporting purposes to record compensation expense against our earnings. By deferring the grant of the new options for at least six months and one day, we believe we will not have to record such a compensation expense. (Page (a)(1)-14) . IF I TENDER OPTIONS IN THE OFFER, WILL I BE ELIGIBLE TO RECEIVE OTHER OPTION GRANTS BEFORE I RECEIVE MY NEW OPTIONS? If we accept options you tender in the offer, we may defer until the grant date for your new options our grant to you of other options, such as annual, bonus or promotional options, for which you may be eligible before the new option grant date. We may defer the grant to you of these other options if we determine it is necessary for us to do so to avoid incurring compensation expense against our earnings because of accounting rules that could apply to these interim option grants as a result of the offer. (Page (a)(1)-14) . WHAT WILL THE EXERCISE PRICE OF THE NEW OPTIONS BE? The exercise price of the new options will be equal to the last reported sale price of our common stock on the Nasdaq National Market on the date we grant the new options. Accordingly, we cannot predict the exercise price of the new options. The exercise price of any option you tender must be at least at least $15.00 per share. This price is higher than the current market price of our common stock, which was $11.94 per share on April 3, 2001. HOWEVER, BECAUSE WE WILL NOT GRANT NEW OPTIONS UNTIL AT LEAST SIX MONTHS Exh.(a)(1)-5 AND ONE DAY AFTER THE DATE WE CANCEL THE OPTIONS ACCEPTED FOR EXCHANGE, THE NEW OPTIONS MAY HAVE A HIGHER EXERCISE PRICE THAN SOME OR ALL OF YOUR CURRENT OPTIONS. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. (PAGE (a)(1)-14) . WHEN WILL THE NEW OPTIONS VEST? The new options will vest over a 42 month period, with 12.5% vesting on the Grant Date and 1/48th of the total amount of new options vesting each month thereafter over the next 42 months. . DOES THE COMMENCEMENT OF A NEW VESTING PERIOD UNDER THE NEW OPTIONS MEAN THAT I WOULD HAVE TO WAIT A LONGER PERIOD BEFORE I CAN PURCHASE COMMON STOCK UNDER MY OPTIONS? Yes. Since most of the new options you receive will not be vested, you will lose the benefits of any vesting under options you tender in the offer. As described above, only 12.5% of the new options we grant will be immediately vested, even if the options you tender for exchange are fully or partially vested. The vesting schedule of the new options will not begin until the grant date of those options. Because the first portion of the new options will not vest until the grant date, which will occur on or about the first business day which is at least six months and one day after the date we cancel tendered options, you will not be able to purchase our common stock upon exercise of the new options until six months and one day after the cancellation date. . DO I HAVE TO TENDER OPTIONS FOR ALL OR ANY OF THE SHARES SUBJECT TO THOSE OPTIONS? No. You may tender options for any portion of the shares subject to your options, or for none of those shares, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. Any tender must be for whole option shares. If you tender options for less than all of your option shares, which we refer to as a "partial tender," you must indicate in the letter of transmittal the number of whole option shares that are included in your tender. In a partial tender of an option: . we will first accept the tender with respect to the option shares, if any, as to which your option has not vested, beginning with the option shares scheduled to vest last; and . we will next accept the tender with respect to the option shares, if any, as to which your option has vested. For example, if you tender an option with respect to 850 of a total of 2,000 shares subject to the option, and if your right to purchase 1,000 shares is vested when you tender, your right to purchase 500 shares will vest on March 1, 2001 and your right to purchase 500 shares will vest on March 1, 2002, then: Exh.(a)(1)-6 . we will first accept the tender with respect to the 500 shares that will vest on March 1, 2002; and . we will next accept the tender with respect to 350 shares that will vest on March 1, 2001. . WILL I HAVE TO PAY TAXES IF I EXCHANGE MY OPTIONS IN THE OFFER? If you exchange your current options for new options, you will not be required under current law to recognize income for federal income tax purposes at the time of the exchange. We believe that the exchange will be treated as a non-taxable exchange. Further, at the date of grant of the new options, you will not be required under current law to recognize income for federal income tax purposes. The grant of options is not recognized as taxable income. We recommend that you consult with your own tax advisor to determine the tax consequences of tendering options pursuant to the offer. (Page (a)(1)-22) . IF MY CURRENT OPTIONS ARE INCENTIVE STOCK OPTIONS, WILL MY NEW OPTIONS BE INCENTIVE STOCK OPTIONS? If your current options are incentive stock options, your new options will be granted as incentive stock options to the extent they qualify. For options to qualify as incentive stock options, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the option exercise price. This $100,000 limitation includes options that became exercisable and were later cancelled, therefore, if you have options that became exercisable after January 1, 2001 those options will reduce the $100,000 limitation with respect to any new options you receive. The excess value is deemed to be a non-incentive stock option. If the exercise price of your new options is equal to or less than the exercise price of the options you tender, the new options should qualify as incentive stock options to the extent that the options tendered qualified as incentive stock options before being tendered. If the new options have a higher exercise price than some or all of your current options, or if you receive additional incentive stock options after you tender options for exchange but before we grant the new options, a portion of the new options may exceed the limits for incentive stock options. . WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL I BE NOTIFIED IF IT IS EXTENDED? The offer expires on May 4, 2001, at 5:00 p.m., Pacific time, unless it is extended by us. We may, in our discretion, extend the offer at any time, but we cannot assure you that the offer will be extended or, if extended, for how long. If the offer is extended, we will make a public announcement of the extension no later than 9:00 a.m., Pacific time, on the next business day following the previously scheduled expiration of the offer period. (Page (a) (1) - 23) . HOW DO I TENDER MY OPTIONS? If you decide to tender your options, you must deliver, before 5:00 p.m., Pacific time, on May 4, 2001, a properly completed and duly executed letter of transmittal and any other Exh.(a)(1)-7 documents required by the letter of transmittal to Pericom Semiconductor Corporation, 2380 Bering Drive, San Jose, CA 95131, Attn: Michael D. Craighead, CFO. If the offer is extended by us beyond that time, you must deliver these documents before the extended expiration of the offer. We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options which are not validly withdrawn. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept all such properly tendered options promptly after the expiration of the offer. . DURING WHAT PERIOD OF TIME MAY I WITHDRAW PREVIOUSLY TENDERED OPTIONS? You may withdraw your tendered options at any time before 5:00 p.m., Pacific time, on May 4, 2001. If the offer is extended by us beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. To withdraw tendered options, you must deliver to us a written notice of withdrawal, or a facsimile thereof, with the required information while you still have the right to withdraw the tendered options. Once you have withdrawn options, you may re-tender options only by again following the delivery procedures described above. (Page (a)(1)-13) . WHAT DO WE AND OUR BOARD OF DIRECTORS THINK OF THE OFFER? Although our board of directors has approved this offer, neither we nor our board of directors makes any recommendation as to whether you should tender or refrain from tendering your options. You must make your own decision whether to tender options. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER? For additional information or assistance, you should contact: Michael D. Craighead, CFO Pericom Semiconductor Corporation 2380 Bering Drive San Jose, CA 95131 phone: (408) 435-0800 e-mail: mcraighead@pericom.com Exh.(a)(1)-8 INTRODUCTION Pericom Semiconductor Corporation is offering to exchange all outstanding options to purchase shares of our common stock granted under the Pericom Semiconductor Corporation 1995 Stock Option Plan and 2001 Stock Incentive Plan that have an exercise price of $15.00 per share or more for new options we will grant under the 1995 Plan and 2001 Plan. We are making this offer upon the terms and subject to the conditions set forth in this offer to exchange and in the related letter of transmittal (which together, as they may be amended from time to time, constitute the "offer"). The number of shares of common stock subject to new options to be granted to each option holder will be equal to the number of shares subject to the options tendered by such option holder and accepted for exchange. We will grant the new options on or about the first business day which is at least six months and one day following the date we cancel the options accepted for exchange. Our board of directors will select the actual grant date for the new options. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. This offer is not conditioned upon a minimum number of options being tendered. This offer is subject to conditions which we describe in Section 6 of this offer to exchange. If you tender options for exchange, we will grant you new options under the 1995 Plan and 2001 Plan and a new option agreement between us and you. The exercise price of the new options will be equal to the last reported sale price of our common stock on the Nasdaq National Market on the date of grant. The new options will vest over a 42 month period with 12.5% vesting on the Grant Date and 1/48th of the total amount of new options vesting each month thereafter over the next 42 months. As of April 2, 2001, options to purchase 4,417,923 shares of our common stock were issued and outstanding under the 1995 Plan and 2001 Plan combined. Of these options, options to purchase 1,894,150 shares of our common stock had an exercise price of $15.00 or more. The shares of common stock issuable upon exercise of options we are offering to exchange represent approximately 34% of the total shares of common stock issuable upon exercise of all options outstanding under the 1995 Plan and 2001 Plan as of April 2 , 2001. All options accepted by us pursuant to this offer will be canceled. Exh.(a)(1)-9 THE OFFER 1. NUMBER OF OPTIONS; EXPIRATION DATE. Upon the terms and subject to the conditions of the offer, we will exchange for new options to purchase common stock under the 1995 Plan and 2001 Plan all eligible outstanding options under the 1995 Plan and 2001 Plan that are properly tendered and not validly withdrawn in accordance with Section 4 before the "expiration date," as defined below. Eligible outstanding options are all options that have an exercise price of $15.00 per share or more. We will accept partial tenders of options for any portion of the shares subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. See Section 5 for more information on partial tenders. If your options are properly tendered and accepted for exchange, you will be entitled to receive new options to purchase the number of shares of our common stock which is equal to the number of shares subject to the options or portion thereof that you tendered, subject to adjustments for any stock splits, stock dividends and similar events. All new options will be subject to the terms of the 1995 Plan and 2001 Plan and to a new option agreement between us and you. IF YOU ARE NOT AN EMPLOYEE OF PERICOM SEMICONDUCTOR CORPORATION OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR YOUR TENDERED OPTIONS IF YOU ARE NOT AN EMPLOYEE FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS. The term "expiration date" means 5:00 p.m., Pacific time, on May 4, 2001, unless and until we, in our discretion, have extended the period of time during which the offer will remain open, in which event the term "expiration date" refers to the latest time and date at which the offer, as so extended, expires. See Section 14 for a description of our rights to extend, delay, terminate and amend the offer. If we decide to take any of the following actions, we will publish notice of such action and extend the offer for a period of ten business days after the date of such publication: (a) (1) we increase or decrease the amount of consideration offered for the options; or (2) we decrease the number of options eligible to be tendered in the offer; or (3) we increase the number of options eligible to be tendered in the offer by an amount that exceeds 2% of the shares of common stock issuable upon exercise of the options that are subject to the offer immediately prior to the increase; and (b) the offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such Exh.(a)(1)-10 increase or decrease is first published, sent or given in the manner specified in Section 14. For purposes of the offer, a "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, Pacific time. 2. PURPOSE OF THE OFFER. We issued the options outstanding under the 1995 Plan and 2001 Plan for the following purposes: . to provide our employees an opportunity to acquire or increase a proprietary interest in Pericom Semiconductor Corporation, thereby creating a stronger incentive to expend maximum effort for our growth and success; and . to encourage our employees to continue their employment by us. Many of our outstanding options, whether or not they are currently exercisable, have exercise prices that are significantly higher than the current market price of our common stock. We believe these options are unlikely to be exercised in the foreseeable future. By making this offer to exchange outstanding options for new options that will have an exercise price equal to the market value of our common stock on the grant date, we intend to provide our employees with the benefit of owning options that over time may have a greater potential to increase in value, create better performance incentives for employees and thereby maximize stockholder value. We are reserving the right, in the event of a merger or similar transaction, to take any actions we deem necessary or appropriate to complete a transaction that our board of directors believes is in the best interest of the Company and its shareholders. This could include terminating this offer. If we were to terminate this offer in connection with such a transaction, employees who have tendered options for cancellation pursuant to this offer would not receive options to purchase securities of the acquiror or any other consideration for their tendered options. Subject to the foregoing, and except as otherwise disclosed in this offer to exchange or in our filings with the SEC, we presently have no plans or proposals that relate to or would result in: (a) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries; (b) any purchase, sale or transfer of a material amount of our assets or the assets of any of our subsidiaries; (c) any material change in our present dividend rate or policy, or our indebtedness or capitalization; Exh.(a)(1)-11 (d) any change in our present board of directors or management, including a change in the number or term of directors or to fill any existing board vacancies or to change any executive officer's material terms of employment; (e) any other material change in our corporate structure or business; (f) our common stock not being authorized for quotation in an automated quotation system operated by a national securities association; (g) our common stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act; (h) the suspension of our obligation to file reports pursuant to Section 15(d) of the Securities Exchange Act; (i) the acquisition by any person of any of our securities or the disposition of any of our securities; or (j) any change in our certificate of incorporation or bylaws, or any actions which may impede the acquisition of control of us by any person. Neither we nor our board of directors makes any recommendation as to whether you should tender your options, nor have we authorized any person to make any such recommendation. You are urged to evaluate carefully all of the information in this offer to exchange and to consult your own investment and tax advisors. You must make your own decision whether to tender your options for exchange. 3. PROCEDURES FOR TENDERING OPTIONS. Proper Tender of Options. To validly tender your options pursuant to the ------------------------ offer, you must, in accordance with the terms of the letter of transmittal, properly complete, duly execute and deliver to us the letter of transmittal, or a facsimile thereof, along with any other required documents. We must receive all of the required documents at Pericom Semiconductor Corporation, 2380 Bering Drive, San Jose, CA 95131, Attn: Michael D. Craighead, CFO, before the expiration date. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING LETTERS OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING OPTION HOLDER. IF DELIVERY IS BY MAIL, WE RECOMMEND THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND PROPERLY INSURE YOUR PACKAGE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Determination of Validity; Rejection of Options; Waiver of Defects; No ---------------------------------------------------------------------- Obligation to Give Notice of Defects. We will determine, in our discretion, all - ------------------------------------ questions as to form of documents and the validity, form, eligibility, including time of receipt, and acceptance of any tender of options. Our determination of these matters will be final and binding on all parties. Exh.(a)(1)-12 We reserve the right to reject any or all tenders of options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we will accept properly and timely tendered options which are not validly withdrawn. We also reserve the right to waive any of the conditions of the offer or any defect or irregularity in any tender with respect to any particular options or any particular option holder. No tender of options will be deemed to have been properly made until all defects or irregularities have been cured by the tendering option holder or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any such notice. Our Acceptance Constitutes an Agreement. Your tender of options pursuant to --------------------------------------- the procedures described above constitutes your acceptance of the terms and conditions of the offer. OUR ACCEPTANCE FOR EXCHANGE OF YOUR OPTIONS TENDERED BY YOU PURSUANT TO THE OFFER WILL CONSTITUTE A BINDING AGREEMENT BETWEEN US AND YOU UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THE OFFER. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that have not been validly withdrawn. 4. WITHDRAWAL RIGHTS. You may only withdraw your tendered options in accordance with the provisions of this Section 4. You may withdraw your tendered options at any time before 5:00 p.m., Pacific time, on May 4, 2001. If the offer is extended by us beyond that time, you may withdraw your tendered options at any time until the extended expiration of the offer. To validly withdraw tendered options, an option holder must deliver to us at the address set forth on the back cover of this offer to exchange a written notice of withdrawal, or a facsimile thereof, with the required information, while the option holder still has the right to withdraw the tendered options. The notice of withdrawal must specify the name of the option holder who tendered the options to be withdrawn, the grant date, exercise price and total number of option shares subject to each option to be withdrawn, and the number of option shares to be withdrawn. Except as described in the following sentence, the notice of withdrawal must be executed by the option holder who tendered the options to be withdrawn exactly as such option holder's name appears on the option agreement or agreements evidencing such options. If the signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or another person acting in a fiduciary or representative capacity, the signer's full title and proper evidence of the authority of such person to act in such capacity must be indicated on the notice of withdrawal. You may not rescind any withdrawal, and any options you withdraw will thereafter be deemed not properly tendered for purposes of the offer, unless you properly re-tender those options before the expiration date by following the procedures described in Section 3. Exh.(a)(1)-13 Neither Pericom Semiconductor Corporation nor any other person is obligated to give notice of any defects or irregularities in any notice of withdrawal, nor will anyone incur any liability for failure to give any such notice. We will determine, in our discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal. Our determination of these matters will be final and binding. 5. ACCEPTANCE OF OPTIONS FOR EXCHANGE AND ISSUANCE OF NEW OPTIONS. Upon the terms and subject to the conditions of this offer and as promptly as practicable following the expiration date, we will accept for exchange and cancel options properly tendered and not validly withdrawn before the expiration date. If your options are properly tendered and accepted for exchange on May 4, 2001, the scheduled expiration date of the offer, you will be granted new options on or about November 5, 2001, which is the first business day that is at least six months and one day following the date we cancel the options accepted for exchange. If we extend the date by which we must accept and cancel options properly tendered for exchange, you will be granted new options on a subsequent business day which is on or about the first business day at least six months and one day following the extended date. If we accept options you tender in the offer, we may defer until the grant date for your new options our grant to you of other options, such as annual, bonus or promotional options, for which you may be eligible before the new option grant date. We may defer the grant to you of these other options if we determine it is necessary for us to do so to avoid incurring compensation expense against our earnings because of accounting rules that could apply to these interim option grants as a result of the offer. Any such grant of these other options are in the discretion of the board of directors and subject to compliance with law and market prices prevailing at the time of the grants. Any such actual grants of these other options will therefore be made when, as and if declared by the board of directors. Your new options will entitle you to purchase a number of shares of our common stock which is equal to the number of shares subject to the options or portion thereof you tender, subject to adjustments for any stock splits, stock dividends and similar events. IF YOU ARE NOT AN EMPLOYEE OF PERICOM SEMICONDUCTOR CORPORATION OR ONE OF OUR SUBSIDIARIES FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS, YOU WILL NOT RECEIVE ANY NEW OPTIONS IN EXCHANGE FOR YOUR TENDERED OPTIONS THAT HAVE BEEN ACCEPTED FOR EXCHANGE. YOU ALSO WILL NOT RECEIVE ANY OTHER CONSIDERATION FOR YOUR TENDERED OPTIONS IF YOU ARE NOT AN EMPLOYEE FROM THE DATE YOU TENDER OPTIONS THROUGH THE DATE WE GRANT THE NEW OPTIONS. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. If you tender options for less than all of your option shares, you must indicate in the letter of transmittal the number of whole shares that are included in your tender. We will not accept any tenders for fractional shares. If we accept for exchange a partial tender of an option, we will first accept the tender with respect to the option Exh.(a)(1)-14 shares, if any, as to which your option has not vested, beginning with the option shares scheduled to vest last, and will next accept the tender with respect to the option shares, if any, as to which your option has vested. For purposes of the offer, we will be deemed to have accepted for exchange options that are validly tendered and not properly withdrawn as, if and when we give oral or written notice to the option holders of our acceptance for exchange of such options, which may be by press release. Subject to our rights to extend, terminate and amend the offer, we currently expect that we will accept promptly after the expiration of the offer all properly tendered options that are not validly withdrawn. Promptly after we accept tendered options for exchange, we will send each tendering option holder a letter indicating the number of shares subject to the options that we have accepted for exchange, the corresponding number of shares that will be subject to the new options and the expected grant date of the new options. 6. CONDITIONS OF THE OFFER. Notwithstanding any other provision of the offer, we will not be required to accept any options tendered for exchange, and we may terminate or amend the offer, or postpone our acceptance and cancellation of any options tendered for exchange, in each case, subject to Rule 13e-4(f)(5) under the Securities Exchange Act, if at any time on or after April 6, 2001 and prior to the expiration date any of the following events has occurred, or has been determined by us to have occurred, and, in our reasonable judgment in any such case and regardless of the circumstances giving rise thereto, including any action or omission to act by us, the occurrence of such event or events makes it inadvisable for us to proceed with the offer or with such acceptance and cancellation of options tendered for exchange: (a) there shall have been threatened or instituted or be pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the offer, the acquisition of some or all of the tendered options pursuant to the offer, the issuance of new options, or otherwise relates in any manner to the offer or that, in our reasonable judgment, could materially and adversely affect the business, condition (financial or other), income, operations or prospects of Pericom Semiconductor Corporation or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the offer to us; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the offer or us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly: (1) make the acceptance for exchange of, or issuance of new options for, some or all of the tendered options illegal or otherwise restrict or prohibit consummation of the offer or otherwise relates in any manner to the offer; (2) delay or restrict our ability, or render us unable, to accept for exchange, or Exh. (a)(1)-15 issue new options for, some or all of the tendered options; (3) materially impair the contemplated benefits of the offer to us; or (4) materially and adversely affect the business, condition (financial or other), income, operations or prospects of Pericom Semiconductor Corporation or our subsidiaries, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the offer to us; (c) there shall have occurred: (1) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market; (2) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory; (3) the commencement of a war, armed hostilities or other international or national crisis directly or indirectly involving the United States; (4) any limitation, whether or not mandatory, by any governmental, regulatory or administrative agency or authority on, or any event that in our reasonable judgment might affect, the extension of credit by banks or other lending institutions in the United States; (5) stock or any change in the general political, market, economic or financial conditions in the United States or abroad that could, in our reasonable judgment, have a material adverse effect on the business, condition (financial or other), operations or prospects of Pericom Semiconductor Corporation or our subsidiaries or on the trading in our common stock; (6) any change in the general political, market, economic or financial conditions in the United States or abroad that could have a material adverse effect on the business, condition (financial or other), operations or prospects of Pericom Semiconductor Corporation or our subsidiaries or that, in our reasonable judgment, makes it inadvisable to proceed with the offer; (7) in the case of any of the foregoing existing at the time of the commencement of the offer, a material acceleration or worsening thereof; or (d) there shall have occurred any change in generally accepted accounting standards which could or would require us for financial reporting purposes to record compensation expense against our earnings in connection with the offer; Exh. (a)(1)-16 (e) a tender or exchange offer with respect to some or all of our common stock, or a merger or acquisition proposal for us, shall have been proposed, announced or made by another person or entity or shall have been publicly disclosed, or we shall have learned that: (1) any person, entity or "group," within the meaning of Section 13(d)(3) of the Securities Exchange Act, shall have acquired or proposed to acquire beneficial ownership of more than 5% of the outstanding shares of our common stock, or any new group shall have been formed that beneficially owns more than 5% of the outstanding shares of our common stock, other than any such person, entity or group that has filed a Schedule 13D or Schedule 13G with the SEC on or before April 6, 2001; (2) any such person, entity or group that has filed a Schedule 13D or Schedule 13G with the SEC on or before April 6, 2001 shall have acquired or proposed to acquire beneficial ownership of an additional 2% or more of the outstanding shares of our common stock; or (3) any person, entity or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of the assets or securities of us or any of our subsidiaries; or (f) any change or changes shall have occurred in the business, condition (financial or other), assets, income, operations, prospects or stock ownership of Pericom Semiconductor Corporation or our subsidiaries that, in our reasonable judgment, is or may be material to Pericom Semiconductor Corporation or our subsidiaries. The conditions to the offer are for our benefit. We may assert them in our discretion regardless of the circumstances giving rise to them prior to the expiration date. We may waive them, in whole or in part, at any time and from time to time prior to the expiration date, in our discretion, whether or not we waive any other condition to the offer. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. The waiver of any of these rights with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances. Any determination we make concerning the events described in this Section 6 will be final and binding upon all persons. 7. PRICE RANGE OF COMMON STOCK UNDERLYING THE OPTIONS. Our common stock is quoted on the Nasdaq National Market under the symbol "PSEM." The following table shows, for the periods indicated, the high and low sales prices per share of our common stock as reported by the Nasdaq National Market. All share prices have been retroactively adjusted to reflect any splits of our common stock. Exh. (a)(1)-17 QUARTER ENDED HIGH LOW ------------------------------------------------------------------------ January 1, 2001 to April 3, 2001 $ 26.50 $11.94 December 31, 2000 $ 42.75 $14.00 September 30, 2000 $41.125 $23.09 June 30, 2000 $ 40.94 $13.63 March 31, 2000 $ 28.63 $11.88 December 31, 1999 $ 15.00 $ 6.38 September 30, 1999 $ 8.82 $ 5.57 June 30, 1999 $ 5.82 $ 3.07 March 31, 1999 $ 7.07 $ 3.44 As of April 3, 2001, the last reported sale price of our common stock, as reported by the Nasdaq National Market, was $11.94 per share. WE RECOMMEND THAT YOU OBTAIN CURRENT MARKET QUOTATIONS FOR OUR COMMON STOCK BEFORE DECIDING WHETHER TO TENDER YOUR OPTIONS. 8. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF NEW OPTIONS. Consideration. We will issue new options to purchase common stock under the ------------- 1995 Plan and 2001 Plan in exchange for outstanding eligible options properly tendered and accepted for exchange by us. The number of shares of common stock subject to new options to be granted to each option holder will be equal to the number of shares subject to the options tendered by such option holder and accepted for exchange, subject to adjustments for any stock splits, stock dividends and similar events. If we receive and accept tenders of all outstanding eligible options we will grant new options to purchase a total of 1,502,150 shares of our common stock. The common stock issuable upon exercise of the new options will equal approximately 6% of the total shares of our common stock outstanding as of March 31, 2001. Terms of New Options. The new options will be issued under the same plan as -------------------- the tendered options, the 1995 Plan and 2001 Plan, as applicable, and a new option agreement between us and each option holder who has tendered options in the offer. Except with respect to the exercise price and the vesting commencement date and as otherwise specified in the offer, the terms and conditions of the new options will be substantially the same as the terms and conditions of the options tendered for exchange. The new options will have terms identical to those of the tendered options with the following exceptions, listed below. Exercise Price. The exercise price of each option will be determined by the -------------- compensation committee, but may not be less than 100% of the fair market value of a share of our common stock on the date of grant. For some 10% stockholders, the exercise price of an incentive stock option may not be less than 110% of the fair market value on the date the option Exh. (a)(1)-18 is granted. The exercise price of the new options to be granted pursuant to the offer will be equal to the last reported sale price of our common stock on the Nasdaq National Market on the date of grant. Vesting and Exercise. The compensation committee will determine at what -------------------- time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which options may be exercised. The exercisability of options may be accelerated by the compensation committee. The new options granted pursuant to the offer will vest over a 42 month period beginning on the grant date of the new options with 12.5% vesting on the grant date and 1/48 vesting each month thereafter over the following 42 months. Assuming the date we cancel the options accepted for exchange is May 4, 2001, which is the scheduled expiration date of the offer, and you are granted new options on November 5, 2001, your right to exercise the new options will vest as described above. Our statements in this offer to exchange concerning the 1995 Plan, the 2001 Plan, and the new options are merely summaries and do not purport to be complete. The statements are subject to, and are qualified in their entirety by reference to, all provisions of the 1995 Plan and 2001 Plan and the form of option agreement under the 1995 Plan and 2001 Plan. Please contact us at 2380 Bering Drive, San Jose, CA 95131, phone: (408) 435-0800 Attn: Michael D. Craighead, CFO to receive a copy of the 1995 Plan, 2001 Plan, and the forms of option agreement thereunder. We will promptly furnish you copies of these documents at our expense. 9. INFORMATION CONCERNING PERICOM SEMICONDUCTOR CORPORATION. General. We design, develop and market high-performance interface ------- integrated circuits, or ICs, used in many of today's advanced electronic systems. Interface ICs, such as interface logic, switches and clock management products, transfer, route and time electrical signals among a system's microprocessor, memory and various peripherals and between interconnected systems. The current high demand for bandwidth to support the growth of the Internet will require continual improvements in the performance of interface products. Our interface products increase system bandwidth in applications such as notebook computers, servers, network switches and routers, storage area networks and wireless base stations. We offer products that increase bandwidth by widening the data path, or bus (enlarging the pipe), increasing the data rate (increasing the flow rate through the pipe), or allowing multiple, simultaneous transactions on the bus. We have combined our extensive design technology and applications knowledge with our responsiveness to the specific needs of electronic systems developers to become a leading supplier of high-performance interface ICs. We have evolved from one product line in fiscal 1992 to four currently--SiliconSwitch, SiliconInterface, SiliconClock and SiliconConnect--with a goal of providing an increasing breadth of interface IC solutions to our customers. We currently offer over 500 products, of which 90 were introduced during fiscal 2000. Our customers include leading OEMs, contract manufacturers and distributors. Exh. (a)(1)-19 Pericom Semiconductor Corporation was incorporated in California on June 25, 1990. Its principal executive offices are located at 2380 Bering Drive, San Jose, California 95131, and the telephone number at that address is (408) 435- 0800. Financial Information. The financial information included in our Annual --------------------- Report to Shareholders for our fiscal year ended July 1, 2000, our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2000 and our quarterly report on Form 10-Q for the fiscal quarter ended December 31, 2000 are incorporated herein by reference. See "Additional Information" beginning on page (a)(1)-24 for instructions on how you can obtain copies of our SEC reports that contain our financial statements. 10. INTERESTS OF EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OPTIONS. A list of our executive officers is attached to this offer to exchange as Schedule A. As of March 31 , 2001, our executive officers as a group beneficially hold options outstanding under the 1995 Plan and 2001 Plan to purchase a total of 1,678,843 shares of our common stock, which represented approximately 38.0% of the shares subject to all options outstanding under the 1995 Plan and 2001 Plan as of that date. Of the options held by these persons, options to purchase a total of 263,960 shares of common stock are eligible to be tendered in the offer. The following table sets forth the beneficial ownership by each of our executive officers of options outstanding under the 1995 Plan and 2001 Plan as of March 31, 2001:
Number of Options to Percentage of Total Options Name of Beneficial Owners Purchase Common Stock Outstanding - ------------------------- --------------------- --------------------------- Alex Chi-Ming Hui (*) 760,000 17.2% Chi-Hung (John) Hui (*) 390,000 8.8% Patrick B. Brennan 111,383 2.5% Michael D. Craighead 92,460 2.1% Tat C. Choi 135,000 3.1% Anthony V. Walker 90,000 2.0% Gerald V. Beemiller 100,000 2.3%
* Alex Chi-Ming Hui and Chi-Hung (John) Hui have agreed that they will not participate in this Offer. Exh. (a)(1)-20 On February 8, 2001 Patrick B. Brennan, our Vice President, Investor Relations exercised an option to purchase 10,700 shares of our common stock at a price of $3.50 per share. On February 21, 2001 Mr. Brennan exercised an option to purchase 6,875 shares of our common stock at a price of $2.40 per share. On March 19, 2001 we granted an option to purchase 90,000 shares of our common stock under our 1995 Plan to Anthony V. Walker, our Vice President, Marketing. The exercise price of these options is $12.6875 per share, the fair market value of our common stock on the grant date. Except as otherwise described above and other than ordinary course purchases under the Pericom Semiconductor Corporation Stock Purchase Plan and ordinary course grants of stock options to employees who are not executive officers or directors, there have been no transactions in options to purchase our common stock or in our common stock which were effected during the past 60 days by Pericom Semiconductor Corporation or, to our knowledge, by any executive officer, director, affiliate or subsidiary of Pericom Semiconductor Corporation 11. STATUS OF OPTIONS ACQUIRED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF THE OFFER Options we acquire pursuant to the offer will be canceled and the shares of common stock subject to those options will be returned to the pool of shares available for grants of new options under the 1995 Plan and 2001 Plan and for issuance upon the exercise of such new options. To the extent such shares are not fully reserved for issuance upon exercise of the new options to be granted in connection with the offer, the shares will be available for future awards to employees and other eligible plan participants without further stockholder action, except as required by applicable law or the rules of the Nasdaq National Market or any other securities quotation system or any stock exchange on which our common stock is then quoted or listed. We believe that Pericom Semiconductor Corporation will not incur any compensation expense solely as a result of the transactions contemplated by the offer because: . we will not grant any new options until a business day that is at least six months and one day after the date that we accept and cancel options tendered for exchange; and . the exercise price of all new options will equal the market value of the common stock on the date we grant the new options. We may incur compensation expense, however, if we grant any options having an exercise price less than the exercise price of the tendered option to any tendering option holder before the scheduled new option grant date. Our grant of those options to the tendering option holder would be treated for financial reporting purposes as a variable award to the extent that the number of shares subject to the newly granted options is equal to or less than the number of the option holder's tendered option shares. In this event, we would be required to record as compensation expense the amount by which the market value of the shares subject to the newly granted options exceeds the exercise price of those shares. This compensation expense would accrue as a charge to Pericom' earnings over the forty-two month vesting period of the newly Exh. (a)(1)-21 granted options. We would adjust this compensation expense periodically during the vesting period based on increases or decreases in the market value of the shares subject to the newly granted options. 12. LEGAL MATTERS; REGULATORY APPROVALS. We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our exchange of options and issuance of new options as contemplated by the offer, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of our options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We are unable to predict whether we may determine that we are required to delay the acceptance of options for exchange pending the outcome of any such matter. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation under the offer to accept tendered options for exchange and to issue new options for tendered options is subject to conditions, including the conditions described in Section 6. 13. MATERIAL FEDERAL INCOME TAX CONSEQUENCES. The following is a general summary of the material federal income tax consequences of the exchange of options pursuant to the offer. This discussion is based on the Internal Revenue Code, its legislative history, Treasury Regulations thereunder and administrative and judicial interpretations thereof as of the date of the offer, all of which are subject to change, possibly on a retroactive basis. This summary does not discuss all of the tax consequences that may be relevant to you in light of your particular circumstances, nor is it intended to be applicable in all respects to all categories of option holders. The option holders who exchange outstanding options for new options will not be required to recognize income for federal income tax purposes at the time of the exchange. We believe that the exchange will be treated as a non-taxable exchange. At the date of grant of the new options, the option holders will not be required to recognize additional income for federal income tax purposes. The grant of options is not recognized as taxable income. If an option holder tenders incentive stock options and those options are accepted for exchange, the new options will be granted as incentive stock options to the extent they qualify. For options to qualify as incentive stock options, the value of shares subject to options that first become exercisable by the option holder in any calendar year cannot exceed $100,000, as determined using the option exercise price. The excess value is deemed to be a non- incentive stock option. This $100,000 limitation includes options that became exercisable and were later cancelled, therefore, if you have options that became exercisable after January 1, 2001 those options will reduce the $100,000 limitation with respect to any new options you receive. If the exercise price of the new options is equal to or less than the exercise price of the options Exh. (a)(1)-22 tendered, the new options should qualify as incentive stock options to the extent that the options tendered qualified as incentive stock options before being tendered. If an option holder's new options have a higher exercise price than some or all of such option holder's current options, or if additional incentive stock options are granted after an option holder tenders options for exchange but before the new options are granted, a portion of the new options may exceed the limits for incentive stock options. WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER. 14. EXTENSION OF OFFER; TERMINATION; AMENDMENT. We expressly reserve the right, in our discretion, at any time and from time to time, and regardless of whether or not any event set forth in Section 6 has occurred or is deemed by us to have occurred, to extend the period of time during which the offer is open and thereby delay the acceptance for exchange of any options by giving oral or written notice of such extension to the option holders and making a public announcement thereof. We also expressly reserve the right, in our reasonable judgment, prior to the expiration date to terminate or amend the offer and to postpone our acceptance and cancellation of any options tendered for exchange upon the occurrence of any of the conditions specified in Section 6, by giving oral or written notice of such termination or postponement to the option holders and making a public announcement thereof. Our reservation of the right to delay our acceptance and cancellation of options tendered for exchange is limited by Rule 13e-4(f)(5) promulgated under the Securities Exchange Act, which requires that we must pay the consideration offered or return the options tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, we further reserve the right, in our discretion, and regardless of whether any event set forth in Section 6 has occurred or is deemed by us to have occurred, to amend the offer in any respect, including, without limitation, by decreasing or increasing the consideration offered in the offer to option holders or by decreasing or increasing the number of options being sought in the offer. Amendments to the offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, the amendment must be issued no later than 9:00 a.m., Pacific time, on the next business day after the last previously scheduled or announced expiration date. Any public announcement made pursuant to the offer will be disseminated promptly to option holders in a manner reasonably designated to inform option holders of such change. Without limiting the manner in which we may choose to make a public announcement, except as required by applicable law, we have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a press release to the Dow Jones News Service. If we materially change the terms of the offer or the information concerning the offer, or if we waive a material condition of the offer, we will extend the offer to the extent required by Exh. (a)(1)-23 Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act. These rules require that the minimum period during which an offer must remain open following material changes in the terms of the offer or information concerning the offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information. If we decide to take any of the following actions, we will publish notice of such action and extend the offer for a period of ten business days after the date of such publication: (a) (1) we increase or decrease the amount of consideration offered for the options; (2) we decrease the number of options eligible to be tendered in the offer; or (3) we increase the number of options eligible to be tendered in the offer by an amount that exceeds 2% of the shares of common stock issuable upon exercise of the options that are subject to the offer immediately prior to the increase; and (b) the offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in this Section 14. 15. FEES AND EXPENSES. We will not pay any fees or commissions to any broker, dealer or other person for soliciting tenders of options pursuant to this offer to exchange. 16. ADDITIONAL INFORMATION. We have filed with the SEC a Tender Offer Statement on Schedule TO, of which this offer to exchange is a part, with respect to the offer. This offer to exchange does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits, and the following materials which we have filed with the SEC before making a decision on whether to tender your options: 1. our Annual Report on Form 10-K for our fiscal year ended July 1, 2000, filed with the Securities and Exchange Commission on September 29, 2000 (File No. 0-27026). 2. our quarterly report on Form 10-Q for our fiscal quarter ended September 30, 2000, filed with the SEC on November 13, 2000 (File No. 0-27026); 3. our quarterly report on Form 10-Q for our fiscal quarter ended December 31, 2000, filed with the SEC on February 9, 2001 (File No. 0- 27026); and Exh. (a)(1)-24 4. description of our Common Stock which is contained in its Registration Statement on Form 8-A filed with the SEC on October 30, 1997, including any amendment or report filed for the purpose of updating such description (File No. 0-27026). These filings, our other annual, quarterly and current reports, our proxy statements and our other SEC filings may be examined, and copies may be obtained, at the following SEC public reference rooms: 450 Fifth Street, N.W. 7 World Trade Center 500 West Madison Street Room 1024 Suite 1300 Suite 1400 Washington, D.C. 20549 New York, New York 10048 Chicago, Illinois 60661 You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public on the SEC's Internet site at http://www.sec.gov. Our common stock is quoted on the Nasdaq National Market under the symbol "PSEM" and our SEC filings can be read at the following Nasdaq address: Nasdaq Operations 1735 K Street, N.W. Washington, D.C. 20006 We will also provide without charge to each person to whom a copy of this offer to exchange is delivered, upon the written or oral request of any such person, a copy of any or all of the documents to which we have referred you, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to: Pericom Semiconductor Corporation 2380 Bering Drive San Jose, CA 95131 (408) 321-0987 (fax) Attn: Michael D. Craighead, CFO or by telephoning us at (408)435-0800 between the hours of 9:00 a.m. and 4:00 p.m., Pacific time. As you read the foregoing documents, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this offer to exchange, you should rely on the statements made in the most recent document. The information contained in this offer to exchange about Pericom Semiconductor Corporation should be read together with the information contained in the documents to which we have referred you. Exh. (a)(1) - 25 17. MISCELLANEOUS. This offer to exchange and our SEC reports referred to above include "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. When used in this offer to exchange, the words "anticipate," "believe," "estimate," expect," "intend" and "plan" as they relate to Pericom Semiconductor Corporation or our management are intended to identify these forward-looking statements. All statements by us regarding our expected future financial position and operating results, our business strategy, our financing plans and expected capital requirements, forecasted trends relating to our services or the markets in which we operate and similar matters are forward-looking statements. The documents filed by Pericom Semiconductor Corporation with the SEC, including our Annual Report on Form 10-K for the fiscal year ended July 1, 2000 filed with the SEC on September 29, 2000, our quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2000 filed on November 13, 2000 and our quarterly report on Form 10-Q for the quarter ended December 30, 2000 filed on February 9, 2001, discuss some of the risks that could cause our actual results to differ from those contained or implied in the forward-looking statements. These risks include, but are not limited to: . If we do not develop products that our customers and end-users design into their products, or if their products do not sell successfully, our business and operating results would be harmed. . The trading price of our common stock has been and is likely to continue to be highly volatile. . The markets for our products are characterized by rapidly changing technology, and our financial results could be harmed if we do not successfully develop and implement new manufacturing technologies or develop, introduce and sell new products. . The semiconductor industry is intensely competitive. . Product price declines and fluctuations may cause our future financial results to vary. . The demand for our products depends on the growth of our end users' markets. . Downturns in the semiconductor industry, rapidly changing technology and evolving industry standards can harm our operating results. . We compete with others to attract and retain key personnel, and any loss of, or inability to attract, key personnel would harm us. . Our limited ability to protect our intellectual property and proprietary rights could harm our competitive position. . We may not provide adequate allowances for exchanges, returns and concessions. Exh. (a)(1) - 26 . Because we sell our products to customers outside of the United States, we face foreign business, political and economic risks that could seriously harm us. . Our potential future acquisitions may not be successful because we have not made acquisitions in the past. . Our operations could be severely harmed by natural disasters. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. We are not aware of any jurisdiction where the making of the offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the offer is not in compliance with any valid applicable law, we will make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law, the offer will not be made to, nor will tenders be accepted from or on behalf of, the option holders residing in such jurisdiction. WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON OUR BEHALF AS TO WHETHER YOU SHOULD TENDER OR REFRAIN FROM TENDERING YOUR OPTIONS PURSUANT TO THE OFFER. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THE INFORMATION AND REPRESENTATIONS CONTAINED IN THIS DOCUMENT OR IN THE RELATED LETTER OF TRANSMITTAL. IF ANYONE MAKES ANY RECOMMENDATION OR REPRESENTATION TO YOU OR GIVES YOU ANY INFORMATION, YOU MUST NOT RELY UPON THAT RECOMMENDATION, REPRESENTATION OR INFORMATION AS HAVING BEEN AUTHORIZED BY US. Exh. (a)(1) - 27 SCHEDULE A INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF PERICOM SEMICONDUCTOR CORPORATION The directors and executive officers of Pericom Semiconductor Corporation and their positions and offices as of March 31, 2001, are set forth in the following table:
Name Position and Offices Held - ------------------------------------------------------------------------------------------------------------------------- Alex Chi-Ming Hui Chief Executive Officer, President and Chairman of the Board of Directors Chi-Hung (John) Hui, Ph.D. Vice President, Technology and Director Patrick B. Brennan Vice President, Investor Relations Michael D. Craighead Vice President, Finance & Administration and Chief Financial Officer Tat C. Choi, Ph.D. Vice President, Design Engineering Anthony V. Walker Vice President, Marketing Gerald V. Beemiller Vice President, Sales Hau L. Lee, Ph.D. Director and Member of Audit Committee Millard (Mel) Phelps Director and Member of Audit Committee Tay Thiam Song Director and Member of Compensation Committee Jeffery Young Director and Member of Compensation Committee
The address of each director and executive officer is: c/o Pericom Semiconductor Corporation, 2380 Bering Drive, San Jose, California 95131. Exh. (a)(1) - 28 EX-99.(A.2) 3 dex99a2.txt FORM LETTER OF TRANSMITTAL Exhibit (a)(2) LETTER OF TRANSMITTAL TO TENDER OPTIONS TO PURCHASE SHARES OF COMMON STOCK HAVING AN EXERCISE PRICE OF $15.00 OR MORE FOR NEW OPTIONS UNDER THE PERICOM SEMICONDUCTOR CORPORATION AMENDED AND RESTATED 1995 STOCK OPTION PLAN AND 2001 STOCK INCENTIVE PLAN PURSUANT TO THE OFFER TO EXCHANGE DATED APRIL 6, 2001 - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5 P.M., PACIFIC TIME, ON May 4, 2001, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- To: Michael D. Craighead, CFO Pericom Semiconductor Corporation 2380 Bering Drive San Jose, California 95131 Telephone: (408) 435-0800 Facsimile: (408) 321-0987 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. ================================================================================ Pursuant to the terms and subject to the conditions of the Offer to Exchange dated April 6, 2001 and this Letter of Transmittal, I hereby tender the following options or portions thereof to purchase shares of common stock ("Option Shares"), outstanding under the Pericom Semiconductor Corporation Amended and Restated 1995 Stock Option Plan and 2001 Stock Incentive Plan, having an exercise price of $15.00 or more (to validly tender such options or portions thereof you must complete the following table according to instructions 2 and 3 on page 4 of this Letter of Transmittal):
Total Number of Option Number of Option Grant Date of Shares Subject (must be in whole Option /1/ Exercise Price of Option to Option /2/ option shares) /3/ - ---------------------------------------------------------------------------------------------------------------
Exh. (a)(2) - 1 - -------------------- /1/ List each option on a separate line even if more than one option was issued on the same grant date. /2/ Even if you are only tendering a portion of an option, provide the total number of Option Shares subject to the entire option in this column. /3/ If you are tendering all of the Option Shares for a particular option, write "all" under this column in the row for that option. If you are tendering a portion of the Option Shares subject to a particular option, provide the number of Option Shares being tendered under this column in the row for that option. To Pericom Semiconductor Corporation: Upon the terms and subject to the conditions set forth in the Offer to Exchange dated April 6, 2001 (the "Offer to Exchange"), my receipt of which I hereby acknowledge, and in this Letter of Transmittal (this "Letter" which, together with the Offer to Exchange, as they may be amended from time to time, constitutes the "Offer"), I, the undersigned, hereby tender to Pericom Semiconductor Corporation, a California corporation (the "Company"), the options or portions thereof to purchase shares ("Option Shares") of common stock of the Company (the "Common Stock") specified in the table on page 1 of this Letter (the "Options") in exchange for "New Options," which are new options to purchase shares of Common Stock equal in number to the number of Option Shares subject to the Options or portions thereof that I tender hereby. I hereby acknowledge that these tendered options include all options that I received from the Company during the six month period immediately prior to and including April 6, 2001. All New Options will be subject to the terms of the Pericom Semiconductor Corporation 1995 Stock Option Plan (the "1995 Plan") and the 2001 Stock Incentive Plan (the "2001" Plan) and to a new option agreement between the Company and me. Subject to, and effective upon, the Company's acceptance for exchange of the Options tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), I hereby sell, assign and transfer to, or upon the order of, the Company all right, title and interest in and to all of the Options that I am tendering hereby. I acknowledge that the Company has advised me to consult with my own advisors as to the consequences of participating or not participating in the Offer. I agree that this Letter is an amendment to the option agreement or agreements to which the Options I am tendering hereby are subject. I hereby represent and warrant that I have full power and authority to tender the Options tendered hereby and that, when and to the extent such Options are accepted for exchange by the Company, such Options will be free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer thereof, other than pursuant to the applicable option agreement, and such Options will not be subject to any adverse claims. Upon request, I will execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the exchange of the Options I am tendering hereby. Exh. (a)(2) - 2 All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, my death or incapacity, and all of my obligations hereunder shall be binding upon my heirs, personal representatives, successors and assigns. Except as stated in the Offer, this tender is irrevocable. By execution hereof, I understand that tenders of Options pursuant to the procedure described in Section 3 of the Offer to Exchange and in the instructions to this Letter will constitute my acceptance of the terms and conditions of the Offer. The Company's acceptance for exchange of Options tendered pursuant to the Offer will constitute a binding agreement between the Company and me upon the terms and subject to the conditions of the Offer. I acknowledge that the New Options that I will receive (1) will not be granted until on or about the first business day that is at least six months and one day after the date the Options tendered hereby are accepted for exchange and canceled and (2) will be subject to the terms and conditions set forth in a new option agreement between the Company and me that will be forwarded to me after the grant of the New Options. I also acknowledge that I must be an employee of the Company or one of its subsidiaries from the date I tender Options through the date the New Options are granted and otherwise be eligible under the 1995 Plan and 2001 Plan on the date the New Options are granted in order to receive New Options. I further acknowledge that, if I do not remain such an employee, I will not receive any New Options or any other consideration for the Options that I tender and that are accepted for exchange pursuant to the Offer. I further acknowledge that in the event of a merger or similar transaction, the company may take any actions it deems necessary or appropriate to complete a transaction that the board of directors believes is in the best interest of the Company and its shareholders. This could include terminating this Offer. If the company were to terminate this offer in connection with such a transaction, I may not receive options to purchase securities of the acquiror or any other consideration for my tendered options. The name and social security number of the registered holder of the Options tendered hereby appear below exactly as they appear on the option agreement or agreements representing such Options. By completing the table on page 1 of this Letter, I have indicated whether the Options that I am tendering represent all or less than all of the Option Shares subject to each such Option (a "Partial Tender"). In the appropriate boxes of the table, I have listed for each Option the grant date, the exercise price, the total number of Option Shares subject to the Option, and the number of Option Shares I am tendering. I understand that I may tender all or any portion of my options outstanding under the 1995 Plan and 2001 Plan having an exercise price of $15.00 or more and that I am not required to tender any of such options in the Offer. I also understand that all of such Options properly tendered prior to the "Expiration Date" (as defined in the following sentence) and not properly withdrawn will be exchanged for New Options, upon the terms and subject to the conditions of the Offer, including the conditions described in Sections 1 and 6 of the Offer to Exchange. The term "Expiration Date" means 5 p.m., Pacific time, on May 4, 2001, unless and until the Company, in its discretion, has extended the period of time during which the Offer will remain open, in which event the term "Expiration Date" refers to the latest time and date at which the Offer, as so extended, expires. I recognize that, under certain circumstances set forth in the Offer to Exchange, the Company may terminate or amend the Offer and postpone its Exh. (a)(2) - 3 acceptance and cancellation of any Options tendered for exchange. In any such event, I understand that the Options delivered herewith but not accepted for exchange will be returned to me at the address indicated below. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS OF OPTIONS BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE OF THE OFFER WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. All capitalized terms used in this Letter but not defined shall have the meaning ascribed to them in the Offer to Exchange. I have read, understand and agree to all of the terms and conditions of the Offer. * * * Exh. (a)(2) - 4 HOLDER PLEASE SIGN HERE (See Instructions 1 and 4) You must complete and sign the following exactly as your name appears on the option agreement or agreements evidencing the Options you are tendering. If the signature is by a trustee, executor, administrator, guardian, attorney-in- fact, officer of a corporation or another person acting in a fiduciary or representative capacity, please set forth the signer's full title and include with this Letter proper evidence of the authority of such person to act in such capacity. ================================================================== SIGNATURE OF OWNER X_______________________________________________________ (Signature of Holder or Authorized Signatory Date: _____________, __, 2001 Name:________________________________________________ (Please Print) Capacity:____________________________________________ Address:_____________________________________________ _____________________________________________________ (Please include ZIP code) Telephone No. (with area code): _____________________________________________________ Tax ID/Social Security No.:__________________________ Exh. (a)(2) - 5 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Delivery of Letter of Transmittal. A properly completed and duly --------------------------------- executed original of this Letter (or a facsimile thereof), and any other documents required by this Letter, must be received by the Company at its address set forth on the front cover of this Letter on or before the Expiration Date. THE METHOD BY WHICH YOU DELIVER ANY REQUIRED DOCUMENTS IS AT YOUR OPTION AND RISK, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE COMPANY. IF YOU ELECT TO DELIVER YOUR DOCUMENTS BY MAIL, THE COMPANY RECOMMENDS THAT YOU USE REGISTERED MAIL WITH RETURN RECEIPT REQUESTED AND THAT YOU PROPERLY INSURE THE DOCUMENTS. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE TIMELY DELIVERY. Tenders of Options made pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. If the Offer is extended by the Company beyond that time, you may withdraw your tendered options at any time until the extended expiration of the Offer. In addition, unless the Company accepts your tendered Options before 5:00 p.m., Pacific time, on May 4, 2001, you may withdraw your tendered Options at any time until the extended expiration of the offer. To withdraw tendered Options you must deliver a written notice of withdrawal, or a facsimile thereof, with the required information to the Company while you still have the right to withdraw the tendered Options. Withdrawals may not be rescinded and any Options withdrawn will thereafter be deemed not properly tendered for purposes of the Offer unless such withdrawn Options are properly re-tendered prior to the Expiration Date by following the procedures described above. The Company will not accept any alternative, conditional or contingent tenders. All tendering Option Holders, by execution of this Letter (or a facsimile of it), waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer to Exchange. 2. Inadequate Space. If the space provided herein is inadequate, the ---------------- information requested by the first table in this Letter regarding the Options to be tendered should be provided on a separate schedule attached hereto. 3. Tenders. If you intend to tender options pursuant the Offer, you must ------- complete the table on page 1 of this Letter by providing the following information for each Option that you intend to tender: grant date, exercise price, total number of Option Shares subject to the Option, and number of Option Shares you are tendering. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. In addition, you may not tender an option or portion thereof representing less than a whole share of Common Stock. Exh. (a)(2) - 6 If we accept for exchange a Partial Tender of an Option, we will accept such Option first with respect to the Option Shares, if any, as to which the Option has not vested, beginning with the Option Shares scheduled to vest last, and next with respect to the Option Shares, if any, as to which the Option has vested. 4. Signatures on This Letter of Transmittal. If this Letter is signed by ---------------------------------------- the holder of the Options, the signature must correspond with the name as written on the face of the option agreement or agreements to which the Options are subject without alteration, enlargement or any change whatsoever. If this Letter is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of the authority of such person so to act must be submitted with this Letter. 5. Requests for Assistance or Additional Copies. Any questions or -------------------------------------------- requests for assistance, as well as requests for additional copies of the Offer to Exchange or this Letter may be directed to Pericom Semiconductor Corporation, Attn: Michael D. Craighead, CFO, at the address and telephone number given on the front cover of this Letter. Copies will be furnished promptly at the Company's expense. 6. Irregularities. All questions as to the number of Option Shares -------------- subject to Options to be accepted for exchange, and the validity, form, eligibility (including time of receipt) and acceptance for exchange of any tender of Options will be determined by the Company in its discretion, which determinations shall be final and binding on all parties. The Company reserves the right to reject any or all tenders of Options the Company determines not to be in proper form or the acceptance of which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the right to waive any of the conditions of the Offer and any defect or irregularity in the tender of any particular Options, and the Company's interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of Options will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. Neither the Company nor any other person is or will be obligated to give notice of any defects or irregularities in tenders, and no person will incur any liability for failure to give any such notice. IMPORTANT: THIS LETTER (OR A FACSIMILE COPY THEREOF) TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE COMPANY, ON OR PRIOR TO THE EXPIRATION DATE. 7. Important Tax Information. You should refer to Section 13 of the Offer ------------------------- to Exchange, which contains important tax information. Exh. (a)(2) - 7 EX-99.(A.3) 4 dex99a3.txt FORM LETTER TO ELIGIBLE OPTIONAL HOLDERS/ Exhibit (a)(3) [LETTERHEAD OF PERICOM SEMICONDUCTOR CORPORATION] April 6, 2001 Dear option holder: Due to today's difficult market conditions, you hold stock options with an exercise price that exceeds the current market price of our common stock. Because our board of directors recognizes that the Company's option plan may not currently be providing performance incentives for its valued employees, the board has considered a number of ways to provide you with the benefit of options that over time may have a greater potential to increase in value. As a result, I am happy to announce that Pericom Semiconductor Corporation will offer to exchange your outstanding options under its 1995 Stock Option Plan and 2001 Stock Incentive Plan with an exercise price of $15.00 or more for new options we will grant under those plans. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. You also have the right to choose not to tender any of your options. The number of shares of common stock subject to the new options will be equal to the number of shares subject to the options that you tender and we accept for exchange, as adjusted for any stock splits, stock dividends and similar events. We will grant the new options on or about the first business day which is at least six months and one day following the date we accept and cancel the tendered options. For example, if we accept and cancel the tendered options on May 4, 2001 as currently scheduled, we will grant the new options on or about November 5, 2001. You must be an employee of the Company or one of its subsidiaries from the date you tender options through the date we grant the new options in order to receive new options. If you do not remain an employee, you will not receive any new options or any other consideration for the options tendered by you and canceled by the Company. The terms and conditions of new options will be substantially the same as the terms and conditions of your current options, except in two respects: . the per share exercise price of all new options will equal the last reported sale price of our common stock on the Nasdaq National Market on the date we grant the new options; and . Your options will vest as follows: 12.5% will vest on the grant date and the remainder will vest at a rate of 1/48 per month over the following 42 months. Exh. (a)(3) - 1 The board of directors makes no recommendation as to whether you should tender or refrain from tendering your options in the offer. You must make your own decision whether to tender your options. The Company's offer is being made under the terms and subject to the conditions of an offer to exchange and a related letter of transmittal which are enclosed with this letter. You should carefully read the entire offer to exchange and letter of transmittal before you decide whether to tender all or any portion of your options. A tender of options involves risks which are discussed in the offer to exchange. To tender options, you will be required to properly complete and return to us the letter of transmittal and any other documents specified in that letter by the expiration date of the Company's offer. If you have any questions about the offer, please call Michael D. Craighead, CFO at (408) 435-0800. We thank you for your continued efforts on behalf of Pericom Semiconductor Corporation. PERICOM SEMICONDUCTOR CORPORATION /s/ Alex Hui --------------------------------- Enclosures Exh. (a)(3) - 2 EX-99.(A.4) 5 dex99a4.txt FORM LETTER TENDERING OPTION HOLDERS/ Exhibit (a)(4) [LETTERHEAD OF PERICOM SEMICONDUCTOR CORPORATION] May 5, 2001 Dear option holder: On behalf of Pericom Semiconductor Corporation (the "Company"), I am writing to provide you with the results of the Company's recent offer to exchange (the "Offer") outstanding options granted under the Pericom Semiconductor Corporation 1995 Stock Incentive Plan (the "1995 Plan") and 2001 Stock Incentive Plan (the "2001 Plan") with an exercise price of $15.00 or more (the "Options") for new options the Company will grant under the 1995 Plan and 2001 Plan (the "New Options"). All capitalized terms used in this letter which are not defined herein have the meanings given to those terms in the letter of transmittal (the "Letter of Transmittal") accompanying the Company's offer to exchange dated April 6, 2001 (the "Offer of Exchange"). The Offer expired at 5:00 p.m., Pacific time, on May 4, 2001. Promptly following the expiration of the Offer and pursuant to the terms and conditions of the Offer of Exchange, the Company accepted for exchange Options tendered to it for a total of ____________ shares of Common Stock and canceled all such Options. The Company has accepted for exchange and canceled the number of Options tendered by you equal to the number of Option Shares set forth on Attachment A to this letter. In accordance with the terms and subject to the conditions of the Offer, you will have the right to receive a New Option under the 1995 Plan and 2001 Plan for the number of shares of Common Stock which is equal to the number of Option Shares set forth on Attachment A, as adjusted for any stock splits, stock dividends and similar events. Also in accordance with the terms of the Offer, the terms and conditions of the New Option will be substantially the same as the terms and conditions of the Options you tendered for exchange, except that: . the per share exercise price under the New Option will equal the last reported sale price of the Common Stock on the Nasdaq National Market on the date the Company grants the New Option; and . Your options will vest as follows: 12.5% will vest on the first anniversary of the grant date and the remainder will vest at a rate of 1/48 per month over the following 42 months. In accordance with the terms of the Offer, the Company will grant you the New Option on a date determined by the Board of Directors, anticipated to be on or about November 5, 2001. At that time, as described in the Offer to Exchange, you will receive a New Option Agreement executed by the Company. In accordance with the terms of the Offer, and as provided in the 1995 Plan and 2001 Plan, you must be an employee of the Company or one of its subsidiaries from the date you tendered options through the New Option grant date in order to receive your New Option. If you do not remain an employee, you will not receive a New Option or any other consideration for the Options tendered by you and canceled by the Company. If you have any questions about your rights in connection with the grant of a New Option, please call Michael D. Craighead, CFO, at (408) 435-0800. PERICOM SEMICONDUCTOR CORPORATION /s/ Alex C. Hui ------------------------------------- President Attachment Exhibit (a)(5) Attachment A Option Grant Date No. of Option Shares - -------------------------------------------------------------------------------- EX-99.(A.5) 6 dex99a5.txt FORM OF E-MAIL LETTER TO PERICOM SEMICONDUCTOR Exhibit (a)(5) [THE FOLLOWING WILL BE DELIVERED VIA EMAIL] April 6, 2001 ANNOUNCEMENT OF OFFER TO EXCHANGE OUTSTANDING OPTIONS UNDER THE PERICOM SEMICONDUCTOR CORPORATION 1995 STOCK OPTION PLAN AND 2001 STOCK INCENTIVE PLAN The following offer is being made under the terms and subject to the conditions of an offer to exchange and related documents that are being mailed today to the home address of employees who have been identified as eligible to participate in this program. If you do not receive a mailing within a week and think you should have, or if you have questions relative to the offer after you receive your documents by mail, please contact Michael D. Craighead, CFO by email or at (408) 435-0800. Due to today's difficult market conditions, many of our employees hold stock options with an exercise price that exceeds the current market price of our common stock. Because our board of directors recognizes that the Company's option plan may not currently be providing performance incentives for its valued employees, the board has considered a number of ways to provide you with the benefit of options that over time may have a greater potential to increase in value. As a result, Pericom Semiconductor Corporation will offer to exchange your outstanding options under its 1995 Stock Option Plan and 2001 Stock Incentive Plan with an exercise price of $15.00 or more for new options we will grant under those plans. You may tender options for all or any portion of the shares of common stock subject to your options, however, if you were granted any options during the six month period immediately prior to and including April 6, 2001 and you wish to participate in this offer, you must tender any options you received during such six month period. You also have the right to choose not to tender any of your options. The number of shares of common stock subject to the new options will be equal to the number of shares subject to the options that you tender and we accept for exchange, as adjusted for any stock splits, stock dividends and similar events. We will grant the new options on or about the first business day which is at least six months and one day following the date we accept and cancel the tendered options. For example, if we accept and cancel the tendered options on May 4, 2001 as currently scheduled, we will grant the new options on or about November 5, 2001. You must be an employee of the Company or one of its subsidiaries from the date you tender options through the date we grant the new options in order to receive new options. If you Exh. (a)(5) - 1 do not remain an employee, you will not receive any new options or any other consideration for the options tendered by you and canceled by the Company. The terms and conditions of new options will be substantially the same as the terms and conditions of your current options, except in two respects: . the per share exercise price of all new options will equal the last reported sale price of our common stock on the Nasdaq National Market on the date we grant the new options; and . Your options will vest as follows: 12.5% will vest on the grant date and the remainder will vest at a rate of 1/48 per month over the following 42 months. The board of directors makes no recommendation as to whether you should tender or refrain from tendering your options in the offer. You must make your own decision whether to tender your options. The Company's offer is being made under the terms and subject to the conditions of an offer to exchange and a related letter of transmittal which you should receive within the next week. You should carefully read the entire offer to exchange and letter of transmittal before you decide whether to tender all or any portion of your options. A tender of options involves risks which are discussed in the offer to exchange. To tender options, you will be required to properly complete and return to us the letter of transmittal and any other documents specified in that letter by the expiration date of the Company's offer. If you have any questions about the offer, please call Michael D. Craighead, CFO at (408) 435-0800. We thank you for your continued efforts on behalf of Pericom Semiconductor Corporation. Exh. (a)(5) - 2 EX-99.(D.3) 7 dex99d3.txt PERICOM SMICNDCTR CORP 2001 STOCK INCENTIVE PLAN Exhibit (d)(3) PERICOM SEMICONDUCTOR CORPORATION 2001 STOCK INCENTIVE PLAN 1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to -------------------- attract and retain the best available personnel, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company's business. 2. Definitions. As used herein, the following definitions shall apply: ----------- (a) "Administrator" means the Board or any of the Committees ------------- appointed to administer the Plan. (b) "Affiliate" and "Associate" shall have the respective ------------------------- meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act. (c) "Applicable Laws" means the legal requirements relating to --------------- the administration of stock incentive plans, if any, under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents therein. (d) "Award" means the grant of an Option, SAR, Dividend ----- Equivalent Right, Restricted Stock, Performance Unit, Performance Share, or other right or benefit under the Plan. (e) "Award Agreement" means the written agreement evidencing the --------------- grant of an Award executed by the Company and the Grantee, including any amendments thereto. (f) "Board" means the Board of Directors of the Company. ----- (g) "Cause" means, with respect to the termination by the ----- Company or a Related Entity of the Grantee's Continuous Service, that such termination is for "Cause" as such term is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity, or in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator, the Grantee's: (i) refusal or failure to act in accordance with any specific, lawful direction or order of the Company or a Related Entity; (ii) unfitness or unavailability for service or unsatisfactory performance (other than as a result of Disability); (iii) performance of any act or failure to perform any act in bad faith and to the detriment of the Company or a Related Entity; (iv) dishonesty, intentional misconduct or material breach of any agreement with the Company or a Related Entity; or (v) commission of a crime involving dishonesty, breach of trust, or physical or emotional harm to any person. At least 30 days prior to the termination of the Grantee's Continuous Service pursuant to (i) or (ii) above, the Administrator shall provide the Grantee with notice of the Company's or such Related Entity's intent to terminate, the reason therefor, and an opportunity for the Grantee to cure such defects in his or her service to the Company's or such Related Entity's satisfaction. During this (d)(3)-1 30 day (or longer) period, no Award issued to the Grantee under the Plan may be exercised or purchased. (h) "Change in Control" means a change in ownership or control of the ----------------- Company effected through either of the following transactions: (i) the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or (ii) a change in the composition of the Board over a period of thirty-six (36) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors. (i) "Code" means the Internal Revenue Code of 1986, as amended. ---- (j) "Committee" means any committee appointed by the Board to --------- administer the Plan. (k) "Common Stock" means the common stock of the Company. ------------ (l) "Company" means Pericom Semiconductor Corporation, a California ------- corporation. (m) "Consultant" means any person (other than an Employee or a ---------- Director, solely with respect to rendering services in such person's capacity as a Director) who is engaged by the Company or any Related Entity to render consulting or advisory services to the Company or such Related Entity. (n) "Continuing Directors" means members of the Board who either (i) -------------------- have been Board members continuously for a period of at least thirty-six (36) months or (ii) have been Board members for less than thirty-six (36) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board. (o) "Continuous Service" means that the provision of services to the ------------------ Company or a Related Entity in any capacity of Employee, Director or Consultant, is not interrupted or terminated. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity (d)(3)-2 of Employee, Director or Consultant (except as otherwise provided in the Award Agreement). An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds ninety (90) days, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such ninety (90) day period. (p) "Corporate Transaction" means any of the following transactions: --------------------- (i) a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated; (ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company's subsidiary corporations); (iii) approval by the Company's shareholders of any plan or proposal for the complete liquidation or dissolution of the Company; (iv) any reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or (v) acquisition by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities (whether or not in a transaction also constituting a Change in Control), but excluding any such transaction that the Administrator determines shall not be a Corporate Transaction. (q) "Covered Employee" means an Employee who is a "covered employee" under ---------------- Section 162(m)(3) of the Code. (r) "Director" means a member of the Board or the board of directors of -------- any Related Entity. (s) "Disability" means a Grantee would qualify for benefit payments under ---------- the long-term disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee is covered by such policy. If the Company or the Related Entity to which the Grantee provides service does not have a long-term disability plan in place, "Disability" means that a Grantee is permanently unable to carry out the responsibilities and functions of the position held by the Grantee by reason of any medically determinable physical or mental impairment. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion. (d)(3)-3 (t) "Dividend Equivalent Right" means a right entitling the Grantee ------------------------- to compensation measured by dividends paid with respect to Common Stock. (u) "Employee" means any person, including an Officer or Director, -------- who is an employee of the Company or any Related Entity. The payment of a director's fee by the Company or a Related Entity shall not be sufficient to constitute "employment" by the Company. (v) "Exchange Act" means the Securities Exchange Act of 1934, as ------------ amended. (w) "Fair Market Value" means, as of any date, the value of Common ----------------- Stock determined as follows: (i) Where there exists a public market for the Common Stock, the Fair Market Value shall be (A) the closing price for a Share on the date of grant (or, if no closing price was reported on that date, on the next trading date on which a closing price is reported) on the stock exchange determined by the Administrator to be the primary market for the Common Stock or the Nasdaq National Market, whichever is applicable or (B) if the Common Stock is not traded on any such exchange or national market system, the average of the closing bid and asked prices of a Share on the Nasdaq Small Cap Market on the date of grant (or, if no such prices were reported on that date, on the last date on which such prices were reported), in each case, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or (ii) In the absence of an established market for the Common Stock of the type described in (i), above, the Fair Market Value thereof shall be determined by the Administrator in good faith. (x) "Good Reason" means the occurrence after a Corporate Transaction, ----------- Change in Control or a Related Entity Disposition of any of the following events or conditions unless consented to by the Grantee: (i) (A) a change in the Grantee's status, title, position or responsibilities which represents an adverse change from the Grantee's status, title, position or responsibilities as in effect at any time within six (6) months preceding the date of a Corporate Transaction, Change in Control or Related Entity Disposition or at any time thereafter or (B) the assignment to the Grantee of any duties or responsibilities which are inconsistent with the Optionee's status, title, position or responsibilities as in effect at any time within six (6) months preceding the date of a Corporate Transaction, Change in Control or Related Entity Disposition or at any time thereafter; (ii) reduction in the Grantee's base salary to a level below that in effect at any time within six (6) months preceding the date of a Corporate Transaction, Change in Control or Related Entity Disposition or at any time thereafter. (y) "Grantee" means an Employee, Director or Consultant who receives ------- an Award pursuant to an Award Agreement under the Plan. (z) "Immediate Family" means any child, stepchild, grandchild, ---------------- parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in- (d)(3)-4 law, son-in law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the Grantee's household (other than a tenant or employee), a trust in which these persons have more than fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Grantee) control the management of assets, and any other entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting interests. (aa) "Incentive Stock Option" means an Option intended to qualify as ---------------------- an incentive stock option within the meaning of Section 422 of the Code. (bb) "Non-Qualified Stock Option" means an Option not intended to -------------------------- qualify as an Incentive Stock Option. (cc) "Officer" means a person who is an officer of the Company or a ------- Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. (dd) "Option" means an option to purchase Shares pursuant to an ------ Award Agreement granted under the Plan. (ee) "Parent" means a "parent corporation," whether now or hereafter ------ existing, as defined in Section 424(e) of the Code. (ff) "Performance - Based Compensation" means compensation -------------------------------- qualifying as "performance-based compensation" under Section 162(m) of the Code. (gg) "Performance Shares" means Shares or an Award denominated in ------------------ Shares which may be earned in whole or in part upon attainment of performance criteria established by the Administrator. (hh) "Performance Units" means an Award which may be earned in whole ----------------- or in part upon attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator. (ii) "Plan" means this 2001 Stock Incentive Plan. ---- (jj) "Related Entity" means any Parent, Subsidiary and any business, -------------- corporation, partnership, limited liability company or other entity in which the Company, a Parent or a Subsidiary holds a substantial ownership interest, directly or indirectly. (kk) "Related Entity Disposition" means the sale, distribution or -------------------------- other disposition by the Company, a Parent or a Subsidiary of all or substantially all of the interests of the Company, a Parent or a Subsidiary in any Related Entity effected by a sale, merger or consolidation or other transaction involving that Related Entity or the sale of all or substantially all of the assets of that Related Entity, other than any Related Entity Disposition to the Company, a Parent or a Subsidiary. (d)(3)-5 (ll) "Restricted Stock" means Shares issued under the Plan to the ---------------- Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator. (mm) "Rule 16b-3" means Rule 16b-3 promulgated under the Exchange ---------- Act or any successor thereto. (nn) "SAR" means a stock appreciation right entitling the Grantee --- to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock. (oo) "Share" means a share of the Common Stock. ----- (pp) "Subsidiary" means a "subsidiary corporation," whether now or ---------- hereafter existing, as defined in Section 424(f) of the Code. 3. Stock Subject to the Plan. ------------------------- (a) Subject to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) is 2,250,000 Shares. The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired Common Stock. (b) Any Shares covered by an Award (or portion of an Award) which is forfeited or canceled, expires or is settled in cash, shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 4. Administration of the Plan. -------------------------- (a) Plan Administrator. ------------------ (i) Administration with Respect to Directors and Officers. ----------------------------------------------------- With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. (ii) Administration With Respect to Consultants and Other ---------------------------------------------------- Employees. With respect to grants of Awards to Employees or Consultants who are - --------- neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall be constituted in such a manner as to satisfy the (d)(3)-6 Applicable Laws. Once appointed, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines from time to time. (iii) Administration With Respect to Covered Employees. ------------------------------------------------ Notwithstanding the foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised solely of two or more Directors eligible to serve on a committee making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to Covered Employees, references to the "Administrator" or to a "Committee" shall be deemed to be references to such Committee or subcommittee. (iv) Administration Errors. In the event an Award is granted --------------------- in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid to the extent such awards were not issued in error as of its grant date and to the extent permitted by the Applicable Laws. (b) Powers of the Administrator. Subject to Applicable Laws and the --------------------------- provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion: (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder; (ii) to determine whether and to what extent Awards are granted hereunder; (iii) to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder; (iv) to approve forms of Award Agreements for use under the Plan; (v) to determine the terms and conditions of any Award granted hereunder; (vi) to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the Grantee's rights under an outstanding Award shall not be made without the Grantee's written consent; (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan, including without limitation, any notice of Award or Award Agreement, granted pursuant to the Plan; (viii) to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions and to afford Grantees favorable treatment under such laws; provided, however, that no Award shall be granted under any such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of the Plan; and (d)(3)-7 (ix) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate. 5. Eligibility. Awards other than Incentive Stock Options may be granted ----------- to Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Consultants who are residing in foreign jurisdictions as the Administrator may determine from time to time. 6. Terms and Conditions of Awards. ------------------------------ (a) Type of Awards. The Administrator is authorized under -------------- the Plan to award any type of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) an Option, a SAR or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or (iii) any other security with the value derived from the value of the Shares. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Dividend Equivalent Rights, Performance Units or Performance Shares, and an Award may consist of one such security or benefit, or two (2) or more of them in any combination or alternative. (b) Designation of Award. Each Award shall be designated in -------------------- the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares is granted. (c) Conditions of Award. Subject to the terms of the Plan, ------------------- the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria established by the Administrator may be based on any one of, or combination of, increase in share price, earnings per share, total stockholder return, return on equity, return on assets, return on investment, net operating income, cash flow, revenue, economic value added, personal management objectives, or other measure of performance selected by the Administrator. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. (d)(3)-8 (d) Acquisitions and Other Transactions. The Administrator may issue ----------------------------------- Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction. (e) Deferral of Award Payment. The Administrator may establish one or ------------------------- more programs under the Plan to permit selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program. (f) Award Exchange Programs. The Administrator may establish one or ----------------------- more programs under the Plan to permit selected Grantees to exchange an Award under the Plan for one or more other types of Awards under the Plan on such terms and conditions as determined by the Administrator from time to time. (g) Separate Programs. The Administrator may establish one or more ----------------- separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time. (h) Individual Option and SAR Limit. The maximum number of Shares ------------------------------- with respect to which Options and SARs may be granted to any Grantee in any fiscal year of the Company shall be 500,000. In connection with a Grantee's commencement of Continuous Service, a Grantee may be granted Options and SARs for up to an additional 250,000 Shares which shall not count against the limit set forth in the previous sentence.] The foregoing limitation[s] shall be adjusted proportionately in connection with any change in the Company's capitalization pursuant to Section 10, below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitation[s] with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR. (i) Early Exercise. The Award Agreement may, but need not, include a -------------- provision whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate. (d)(3)-9 (j) Term of Award. The term of each Award shall be the term ------------- stated in the Award Agreement, provided, however, that the term of an Incentive Stock Option shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. (k) Transferability of Awards. Incentive Stock Options may not ------------------------- be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee; provided, however, that the Grantee may designate a beneficiary of the Grantee's Incentive Stock Option in the event of the Grantee's death on a beneficiary designation form provided by the Administrator. Other Awards may be transferred by gift or through a domestic relations order to members of the Grantee's Immediate Family to the extent provided in the Award Agreement or in the manner and to the extent determined by the Administrator. (l) Time of Granting Awards. The date of grant of an Award shall ----------------------- for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other date as is determined by the Administrator. Notice of the grant determination shall be given to each Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the date of such grant. 7. Award Exercise or Purchase Price, Consideration and Taxes. --------------------------------------------------------- (a) Exercise or Purchase Price. The exercise or purchase price, -------------------------- if any, for an Award shall be as follows: (i) In the case of an Incentive Stock Option: (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or (B) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. (ii) In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than eighty-five percent (85%) of the Fair Market Value per Share on the date of grant. (iii) In the case of Awards intended to qualify as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. (d)(3)-10 (iv) In the case of other Awards, such price as is determined by the Administrator. (v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be determined in accordance with the principles of Section 424(a) of the Code. (b) Consideration. Subject to Applicable Laws, the consideration to be paid ------------- for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). In addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following: (i) cash; (ii) check; (iii) delivery of Grantee's promissory note with such recourse, interest, security, and redemption provisions as the Administrator determines as appropriate; (iv) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised (but only to the extent that such exercise of the Award would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price unless otherwise determined by the Administrator); (v) with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or (vi) any combination of the foregoing methods of payment. (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or ----- other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any foreign, federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Company shall withhold or collect from Grantee an amount sufficient to satisfy such tax obligations. (d)(3)-11 8. Exercise of Award. ----------------- (a) Procedure for Exercise; Rights as a Stockholder. ----------------------------------------------- (i) Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement. (ii) An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(v). Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to Shares subject to an Award, notwithstanding the exercise of an Option or other Award. The Company shall issue (or cause to be issued) such stock certificate promptly upon exercise of the Award. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in the Award Agreement or Section 10, below. (b) Exercise of Award Following Termination of Continuous Service. ------------------------------------------------------------- (i) An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee's Continuous Service only to the extent provided in the Award Agreement. (ii) Where the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee's Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first. (iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee's Continuous Service shall convert automatically to a Non-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement. 9. Conditions Upon Issuance of Shares. ---------------------------------- (a) Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. (b) As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or (d)(3)-12 distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws. 10. Adjustments Upon Changes in Capitalization. Subject to any required ------------------------------------------ action by the stockholders of the Company, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the maximum number of Shares with respect to which Options and SARs may be granted to any Grantee in any fiscal year of the Company, as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or similar event affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock to which Section 424(a) of the Code applies or any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award. 11. Corporate Transactions/Changes in Control/Related Entity Dispositions. --------------------------------------------------------------------- Except as may be provided in an Award Agreement: (a) In the event of any Corporate Transaction, each Award which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights, immediately prior to the specified effective date of such Corporate Transaction, for all of the Shares at the time represented by such Award. Effective upon the consummation of the Corporate Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate if the Awards are, in connection with the Corporate Transaction, assumed by the successor corporation or Parent thereof. In addition, an outstanding Award under the Plan shall not so fully vest and be exercisable and released from such limitations if and to the extent: (i) such Award is, in connection with the Corporate Transaction, either assumed by the successor corporation or Parent thereof or replaced with a comparable Award with respect to shares of the capital stock of the successor corporation or Parent thereof or (ii) such Award is to be replaced with a cash incentive program of the successor corporation which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award; provided, however, that such Award (if assumed), the replacement Award (if replaced), or the cash incentive program automatically shall become fully vested, exercisable and payable and be released from any restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights immediately upon termination of the Grantee's Continuous Service (substituting the successor employer corporation for "Company or Related Entity" for the definition of "Continuous (d)(3)-13 Service") if such Continuous Service is terminated by the successor company without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months of the Corporate Transaction. The determination of Award comparability above shall be made by the Administrator. (b) Following a Change in Control (other than a Change in Control which also is a Corporate Transaction) and upon the termination of the Continuous Service of a Grantee if such Continuous Service is terminated by the Company or Related Entity without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months of a Change in Control, such Grantee shall be treated as if such Grantee had one additional year of employment with the Company for purposes of vesting, exercisability, restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights. (c) Effective upon the consummation of a Related Entity Disposition, for purposes of the Plan and all Awards, the Continuous Service of each Grantee who is at the time engaged primarily in service to the Related Entity involved in such Related Entity Disposition shall be deemed to terminate and each Award of such Grantee which is at the time outstanding under the Plan automatically shall become fully vested and exercisable and be released from any restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights for all of the Shares at the time represented by such Award and be exercisable in accordance with the terms of the Award Agreement evidencing such Award. However, such Continuous Service shall be not be deemed to terminate if such Award is, in connection with the Related Entity Disposition, assumed by the successor entity or its Parent. In addition, such Continuous Service shall not be deemed to terminate and an outstanding Award under the Plan shall not so fully vest and be exercisable and released from such limitations if and to the extent: (i) such Award is, in connection with the Related Entity Disposition, either to be assumed by the successor entity or its parent or to be replaced with a comparable Award with respect to interests in the successor entity or its parent or (ii) such Award is to be replaced with a cash incentive program of the successor entity which preserves the compensation element of such Award existing at the time of the Related Entity Disposition and provides for subsequent payout in accordance with the same vesting schedule applicable to such Award; provided, however, that such Award (if assumed), the replacement Award (if replaced), or the cash incentive program automatically shall become fully vested, exercisable and payable and be released from any restrictions on transfer (other than transfer restrictions applicable to Options) and repurchase or forfeiture rights immediately upon termination of the Grantee's Continuous Service (substituting the successor employer entity for "Company or Related Entity" for the definition of "Continuous Service") if such Continuous Service is terminated by the successor entity without Cause or voluntarily by the Grantee with Good Reason within twelve (12) months of the Related Entity Disposition. The determination of Award comparability above shall be made by the Administrator.] (d) The portion of any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction, Change in Control or Related Entity Disposition shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. To the extent such dollar limitation is exceeded, the accelerated excess portion of such Option shall be exercisable as a Non-Qualified Stock Option. (d)(3)-14 12. Effective Date and Term of Plan. The Plan shall become effective upon ------------------------------- the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 17, below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective. 13. Amendment, Suspension or Termination of the Plan. ------------------------------------------------ (a) The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to comply with Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required. (b) No Award may be granted during any suspension of the Plan or after termination of the Plan. (c) Any amendment, suspension or termination of the Plan (including termination of the Plan under Section 12, above) shall not affect Awards already granted, and such Awards shall remain in full force and effect as if the Plan had not been amended, suspended or terminated, unless mutually agreed otherwise between the Grantee and the Administrator, which agreement must be in writing and signed by the Grantee and the Company. 14. Reservation of Shares. --------------------- (a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. (b) The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 15. No Effect on Terms of Employment/Consulting Relationship. The Plan -------------------------------------------------------- shall not confer upon any Grantee any right with respect to the Grantee's Continuous Service, nor shall it interfere in any way with his or her right or the Company's right to terminate the Grantee's Continuous Service at any time, with or without cause. 16. No Effect on Retirement and Other Benefit Plans. Except as ----------------------------------------------- specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended. 17. Stockholder Approval. The grant of Incentive Stock Options under the -------------------- Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution for (d)(3)-15 outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options under the Plan prior to approval by the stockholders, but until such approval is obtained, no such Incentive Stock Option shall be exercisable. In the event that stockholder approval is not obtained within the twelve (12) month period provided above, all Incentive Stock Options previously granted under the Plan shall be exercisable as Non-Qualified Stock Options. (d)(3)-16 Pericom Semiconductor Corp. Notice of Grant of Stock Options ID: 77-0254621 and Option Agreement 2380 Bering Drive San Jose, CA 95131 - -------------------------------------------------------------------------------- Name Option Number: Address Plan: Address ID: City, State Zip - -------------------------------------------------------------------------------- Effective _________, you have been granted a(n) Incentive Stock Option to buy ________ shares of Pericom Semiconductor Corp. (the Company) stock at $_______ per share. The total option price of the shares granted is $___________. Shares in each period will become fully vested on the date shown. Shares Vest Type Full Vest Expiration ------ --------- --------- ---------- ________________________________________________________________________________ By your signature and the Company's signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the Company's Stock Option Plan as amended and the Option Agreement, all of which are attached and made a part of this document. ________________________________________________________________________________ _____________________________ _______________ Pericom Semiconductor Corp. Date _____________________________ _______________ Optionee Date Date: __________ Time: __________ (d)(3)-17 Notice of Grant of Stock Options and Option Agreement continued Definitions: - ----------- 1. Date of Award is the effective date as stated in the Notice of Grant of Stock Options and Option Agreement (the "Notice"). 2. Expiration Date is the date on the Notice under the column heading "Expiration." 3. Post-Termination Exercise Period is three (3) months. Vesting Schedule: - ---------------- Subject to Grantee's Continuous Service and other limitations set forth in this Notice, the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance with the schedule on page 1 of this Notice. During any authorized leave of absence, the vesting of the Option as provided in this schedule shall cease after the leave of absence exceeds a period of ninety (90) days. Vesting of the Option shall resume upon the Grantee's termination of the leave of absence and return to service to the Company or a Related Entity. In the event of the Grantee's change in status from Employee to Consultant or from an Employee whose customary employment is 20 hours or more per week to an Employee whose customary employment is fewer than 20 hours per week, vesting of the Option shall continue only to the extent determined by the Administrator as of such change in status. In the event of termination of the Grantee's Continuous Service for Cause, the Grantee's right to exercise the Option shall terminate concurrently with the termination of the Grantee's Continuous Service. IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option Agreement. Pericom Semiconductor Corporation, a California corporation By: ______________________________ Title: ___________________________ (d)(3)-18 Notice of Grant of Stock Options and Option Agreement continued THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF GRANTEE'S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE GRANTEE'S EMPLOYER TO TERMINATE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, GRANTEE'S STATUS IS AT WILL. The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully understands all provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all disputes arising out of or relating to this Notice, the Plan and the Option Agreement shall be resolved in accordance with Section 13 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in the residence address indicated in this Notice. Dated: ______________________ Signed: _________________________________ (d)(3)-19 Award Number: ___________ PERICOM SEMICONDUCTOR CORPORATION 2001 STOCK INCENTIVE PLAN STOCK OPTION AWARD AGREEMENT ---------------------------- (a) Grant of Option. Pericom Semiconductor Corporation., a California --------------- corporation (the "Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of Stock Option Award (the "Notice"), an option (the "Option") to purchase the Total Number of Shares of Common Stock subject to the Option (the "Shares") set forth in the Notice, at the Exercise Price per Share set forth in the Notice (the "Exercise Price") subject to the terms and provisions of the Notice, this Stock Option Award Agreement (the "Option Agreement") and the Company's 2001 Stock Incentive Plan, as amended from time to time (the "Plan"), which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Option Agreement. If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by the Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in excess of the foregoing limitation, shall be treated as Non-Qualified Stock Options. For this purpose, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with respect to such Shares is awarded. (b) Exercise of Option. ------------------ (1) Right to Exercise. The Option shall be ----------------- exercisable during its term in accordance with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan relating to the exercisability or termination of the Option in the event of a Corporate Transaction, Change in Control or Related Entity Disposition. No partial exercise of the Option may be for less than the lesser of five percent (5%) of the total number of Shares subject to the Option or the remaining number of Shares subject to the Option. In no event shall the Company issue fractional Shares. (2) Method of Exercise. The Option shall be ------------------ exercisable only by delivery of an Exercise Notice (attached as Exhibit A) which shall state the election to exercise the Option, the whole number of (d)(3)-20 Shares in respect of which the Option is being exercised, such other representations and agreements as to the holder's investment intent with respect to such Shares and such other provisions as may be required by the Administrator. The Exercise Notice shall be signed by the Grantee and shall be delivered in person, by certified mail, or by such other method as determined from time to time by the Administrator to the Company accompanied by payment of the Exercise Price. The Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 3(d), below. (3) Taxes. No Shares will be delivered to the ----- Grantee or other person pursuant to the exercise of the Option until the Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of applicable income tax, employment tax, and social security tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or the disqualifying disposition of Shares received on exercise of an Incentive Stock Option. Upon exercise of the Option, the Company or the Grantee's employer may offset or withhold (from any amount owed by the Company or the Grantee's employer to the Grantee) or collect from the Grantee or other person an amount sufficient to satisfy such tax obligations and/or the employer's withholding obligations. (c) Method of Payment. Payment of the Exercise Price shall be by any of ----------------- the following, or a combination thereof, at the election of the Grantee; provided, however, that such exercise method does not then violate any Applicable Law: (1) cash; (2) check; (3) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require (including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date of surrender or attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being exercised (but only to the extent that such exercise of the Option would not result in an accounting compensation charge with respect to the Shares used to pay the exercise price); (4) payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions to a Company designated brokerage firm to effect the (d)(3)-21 immediate sale of some or all of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (ii) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction; or (A) any other method acceptable to the Administrator in its sole discretion (d) Restrictions on Exercise. The Option may not be exercised if the ------------------------ issuance of the Shares subject to the Option upon such exercise would constitute a violation of any Applicable Laws. In addition, the Option, if an Incentive Stock Option, may not be exercised until such time as the Plan has been approved by the stockholders of the Company. (e) Termination or Change of Continuous Service. In the event the ------------------------------------------- Grantee's Continuous Service terminates, other than for Cause, the Grantee may, to the extent otherwise so entitled at the date of such termination (the "Termination Date"), exercise the Option during the Post-Termination Exercise Period. In the event of termination of the Grantee's Continuous Service for Cause, the Grantee's right to exercise the Option shall, except as otherwise determined by the Administrator, terminate concurrently with the termination of the Grantee's Continuous Service. In no event shall the Option be exercised later than the Expiration Date set forth in the Notice. In the event of the Grantee's change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, the Option shall remain in effect and, except to the extent otherwise determined by the Administrator, continue to vest; provided, however, that with respect to any Incentive Stock Option that shall remain in effect after a change in status from Employee to Director or Consultant, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following such change in status. Except as provided in Sections 6 and 7 below, to the extent that the Grantee is not entitled to exercise the Option on the Termination Date, or if the Grantee does not exercise the Option within the Post-Termination Exercise Period, the Option shall terminate. (f) Disability of Grantee. In the event the Grantee's Continuous Service --------------------- terminates as a result of his or her Disability, the Grantee may, but only within twelve (12) months from the Termination Date (and in no event later than the Expiration Date), exercise the Option to the extent he or she was otherwise entitled to exercise it on the Termination Date; provided, however, that if such Disability is not a "disability" as such term is defined in Section 22(e)(3) of the Code and the Option is an Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1) day following the Termination Date. To the extent that the Grantee is not entitled to exercise the Option on the Termination Date, or if the Grantee does not exercise the Option to the extent so entitled within the time specified herein, the Option shall terminate. (g) Death of Grantee. In the event of the termination of the Grantee's ---------------- Continuous Service as a result of his or her death, or in the event of the Grantee's death during the Post-Termination Exercise Period or during the twelve (12) month period following the Grantee's termination of Continuous Service as a result of his or her Disability, the Grantee's estate, or a person who acquired the right to exercise the Option by bequest or inheritance, may exercise the (d)(3)-22 Option, but only to the extent the Grantee could exercise the Option at the date of termination, within twelve (12) months from the date of death (but in no event later than the Expiration Date). To the extent that the Grantee is not entitled to exercise the Option on the date of death, or if the Option is not exercised to the extent so entitled within the time specified herein, the Option shall terminate. (h) Transferability of Option. The Option, if an Incentive Stock Option, ------------------------- may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the Grantee only by the Grantee; provided, however, that the Grantee may designate a beneficiary of the Grantee's Incentive Stock Option in the event of the Grantee's death on a beneficiary designation form provided by the Administrator. The Option, if a Non-Qualified Stock Option may be transferred to any person by will and by the laws of descent and distribution. Non-Qualified Stock Options also may be transferred during the lifetime of the Grantee by gift and pursuant to a domestic relations order to members of the Grantee's Immediate Family to the extent and in the manner determined by the Administrator. The terms of the Option shall be binding upon the executors, administrators, heirs, successors and transferees of the Grantee. (i) Term of Option. The Option may be exercised no later than the -------------- Expiration Date set forth in the Notice or such earlier date as otherwise provided herein. (j) Tax Consequences. Set forth below is a brief summary as of the date of ---------------- this Option Agreement of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. (1) Exercise of Incentive Stock Option. If the Option ---------------------------------- qualifies as an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as income for purposes of the alternative minimum tax for federal tax purposes and may subject the Grantee to the alternative minimum tax in the year of exercise. (2) Exercise of Incentive Stock Option Following -------------------------------------------- Disability. If the Grantee's Continuous Service terminates as a ---------- result of Disability that is not total and permanent disability as defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Grantee must exercise an Incentive Stock Option within three (3) months of such termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. (3) Exercise of Non-Qualified Stock Option. On -------------------------------------- exercise of a Non-Qualified Stock Option, the Grantee will be treated as (d)(3)-23 having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If the Grantee is an Employee or a former Employee, the Company will be required to withhold from the Grantee's compensation or collect from the Grantee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. (4) Disposition of Shares. In the case of a Non- --------------------- Qualified Stock Option, if Shares are held for more than one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes and subject to tax at a maximum rate of 20%. In the case of an Incentive Stock Option, if Shares transferred pursuant to the Option are held for more than one year after receipt of the Shares and are disposed more than two years after the Date of Award, any gain realized on disposition of the Shares also will be treated as capital gain for federal income tax purposes and subject to the same tax rates and holding periods that apply to Shares acquired upon exercise of a Non-Qualified Stock Option. If Shares purchased under an Incentive Stock Option are disposed of prior to the expiration of such one-year or two-year periods, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on the date of exercise, or (ii) the sale price of the Shares. (k) Entire Agreement: Governing Law. The Notice, the Plan and this Option ------------------------------- Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the subject matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this Option Agreement are to be construed in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. (l) Headings. The captions used in the Notice and this Option Agreement -------- are inserted for convenience and shall not be deemed a part of the Option for construction or interpretation. (d)(3)-24 (m) Dispute Resolution The provisions of this Section 13 shall be the ------------------ exclusive means of resolving disputes arising out of or relating to the Notice, the Plan and this Option Agreement. The Company, the Grantee, and the Grantee's assignees pursuant to Section 8 (the "parties") shall attempt in good faith to resolve any disputes arising out of or relating to the Notice, the Plan and this Option Agreement by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either party by notice of a written statement of the party's position and the name and title of the individual who will represent the party. Within thirty (30) days of the written notification, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute. If the dispute has not been resolved by negotiation, the parties agree that any suit, action, or proceeding arising out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United States District Court for the Northern District of California located in the city of San Jose, California (or should such court lack jurisdiction to hear such action, suit or proceeding, in a California state court in the County of Santa Clara) and that the parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. (n) Notices. Any notice required or permitted hereunder shall be given in ------- writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice), with postage and fees prepaid, addressed to the other party at its address as shown beneath its signature in the Notice, or to such other address as such party may designate in writing from time to time to the other party. (d)(3)-25 EXHIBIT A --------- PERICOM SEMICONDUCTOR CORPORATION 2001 STOCK INCENTIVE PLAN EXERCISE NOTICE --------------- Pericom Semiconductor Corporation 2380 Bering Drive San Jose, CA 95131 Attention: Secretary (o) Exercise of Option. Effective as of today, ______________, ___ the ------------------ undersigned (the "Grantee") hereby elects to exercise the Grantee's option to purchase ___________ shares of the Common Stock (the "Shares") of Pericom Semiconductor Corporation (the "Company") under and pursuant to the Company's 2001 Stock Incentive Plan, as amended from time to time (the "Plan") and the [_] Incentive [_] Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice of Grant of Stock Options and Option Agreement (the "Notice") dated ______________, ________. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Exercise Notice. (p) Representations of the Grantee. The Grantee acknowledges that the ------------------------------ Grantee has received, read and understood the Notice, the Plan, and the Option Agreement and agrees to abide by and be bound by their terms and conditions. (q) Rights as Stockholder. Until the stock certificate evidencing such --------------------- Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan. (r) Delivery of Payment. The Grantee herewith delivers to the Company the ------------------- full Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in Section 3(d) of the Option Agreement. (s) Tax Consultation. The Grantee understands that the Grantee may suffer ---------------- adverse tax consequences as a result of the Grantee's purchase or disposition of the Shares. The Grantee represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in connection with the purchase or disposition of the Shares and that the Grantee is not relying on the Company for any tax advice (t) Taxes. The Grantee agrees to satisfy all applicable federal, state and ----- local income (d)(3)-26 and employment tax withholding obligations and herewith delivers to the Company the full amount of such obligations or has made arrangements acceptable to the Company to satisfy such obligations. In the case of an Incentive Stock Option, the Grantee also agrees, as partial consideration for the designation of the Option as an Incentive Stock Option, to notify the Company in writing within thirty (30) days of any disposition of any shares acquired by exercise of the Option if such disposition occurs within two (2) years from the Date of Award or within one (1) year from the date the Shares were transferred to the Grantee. If the Company is required to satisfy any federal, state or local income or employment tax withholding obligations as a result of such an early disposition, the Grantee agrees to satisfy the amount of such withholding in a manner that the Administrator prescribes. (u) Successors and Assigns. The Company may assign any of its rights under ---------------------- this Exercise Notice to single or multiple assignees, and this agreement shall inure to the benefit of the successors and assigns of the Company. This Exercise Notice shall be binding upon the Grantee and his or her heirs, executors, administrators, successors and assigns. (v) Headings. The captions used in this Exercise Notice are inserted for -------- convenience and shall not be deemed a part of this agreement for construction or interpretation. (w) Dispute Resolution. The provisions of Section 13 of the Option ------------------ Agreement shall be the exclusive means of resolving disputes arising out of or relating to this Exercise Notice. (x) Governing Law; Severability. This Exercise Notice is to be construed --------------------------- in accordance with and governed by the internal laws of the State of California (as permitted by Section 1646.5 of the California Civil Code, or any similar successor provision) without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Should any provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable. (y) Notices. Any notice required or permitted hereunder shall be given in ------- writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, (if the parties are within the United States) or upon deposit for delivery by an internationally recognized express mail courier service (for international delivery of notice) with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party. (z) Further Instruments. The parties agree to execute such further ------------------- instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this agreement. (aa) Entire Agreement. The Notice, the Plan, and the Option Agreement are ---------------- incorporated herein by reference, and together with this Exercise Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Grantee with respect to the (d)(3)-27 subject matter hereof, and may not be modified adversely to the Grantee's interest except by means of a writing signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Option Agreement and this Exercise Notice (except as expressly provided therein) is intended to confer any rights or remedies on any persons other than the parties. Submitted by: Accepted by: GRANTEE: Pericom Semiconductor Corporation By: _______________________________ Title: ____________________________ _______________________________ (Signature) Address: Address: - ------- ------- _______________________________ 2380 Bering Drive _______________________________ San Jose, CA 95131 (d)(3)-28 -----END PRIVACY-ENHANCED MESSAGE-----