-----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, SpVNZNU5Qgl24Yw7GVYhIJcXfN1bWWMC/SFM/duEdYGbUbzXOU3eF388myKmoGch TuHyLZqw9Ubx7JiloNK0zQ== 0000849502-00-000015.txt : 20000501 0000849502-00-000015.hdr.sgml : 20000501 ACCESSION NUMBER: 0000849502-00-000015 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAMTRON INTERNATIONAL CORP CENTRAL INDEX KEY: 0000849502 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 840962308 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-17739 FILM NUMBER: 611300 BUSINESS ADDRESS: STREET 1: 1850 RAMTRON DR CITY: COLORADO SPRINGS STATE: CO ZIP: 80921 BUSINESS PHONE: 7194817000 MAIL ADDRESS: STREET 1: 1850 RAMTRON DR CITY: COLORADO SPRINGS STATE: CO ZIP: 80921 10-K/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ------------------- FORM 10-K/A / X / ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 1999 / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from ---------- to --------- Commission File Number 0-17739 RAMTRON INTERNATIONAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 84-0962308 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1850 Ramtron Drive, Colorado Springs, Colorado 80921 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (719) 481-7000 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: Common Stock ($.01 par value) (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes / X / No / / Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. / / As of April 24, 2000, 16,096,022 shares of the Registrant's common stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE NONE Page-1 PART I Item 1. BUSINESS THE COMPANY Ramtron International Corporation and its subsidiaries ("Ramtron" or the "Company") are engaged primarily in the design, development, manufacture and sale of specialty high-performance semiconductor memory devices. Ramtron has two product lines, ferroelectric nonvolatile random access memory ("FRAM" (registered trademark)) products and high-speed DRAM (dynamic random access memory) products, called Enhanced-DRAM ("EDRAM" (registered trademark)) products. The Company was incorporated in Delaware under the name of Amtec Securities Corporation in January 1984. Its name was changed to Ramtron International Corporation in January 1988. The Company's principal executive offices are located at 1850 Ramtron Drive, Colorado Springs, Colorado 80921, and its telephone number is (719) 481-7000. The Company has two wholly owned subsidiaries, Enhanced Memory Systems, Inc. ("EMS"), which was established in May 1995, and Ramtron Kabushiki Kaisha ("Ramtron K.K."), which was established in July 1996. The Company formed EMS to operate its EDRAM business. The Company formed Ramtron K.K. to perform sales and marketing functions within Japan for the Company's products and to act as a liaison between the Company and its Japan alliance partners. Discussion of certain matters contained in this Annual Report on Form 10-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the business environment in which Ramtron operates, projections of future performance, perceived opportunities in the market, statements regarding the Company's mission and vision and statements regarding future potential changes in the Company's capital structure. The Company's actual results, performance and achievements may differ materially from the results, performance and achievements expressed or implied in such forward-looking statements. For a discussion of some of the factors that might cause such a difference, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Expected Future Results of Operations." From time to time, the Company details other risks with respect to its business and financial results and conditions in its filings with the Securities and Exchange Commission. FRAM PRODUCTS BACKGROUND Ramtron's FRAM technology integrates ferroelectric materials with standard semiconductor chip design and manufacturing technology to provide nonvolatile memory products with unique performance characteristics and properties. Ramtron's FRAM devices combine data non-volatility with the benefits of random access memory (RAM) devices including a high number of read and write cycles, high speed for both read and write functions and low power consumption. Page-2 The Company believes that its proprietary FRAM technology is a significant innovation in comparison with other major semiconductor memory solutions. FRAM technology enables semiconductor memory products to be developed with attributes that are not otherwise available in a single semiconductor product and, in some cases, these attributes are not available even by combining multiple technologies such as RAM (Random Access Memory), ROM (Read Only Memory) and nonvolatile memories such as EEPROM (Electrically Erasable Programmable Read Only Memory) and Flash. CHARACTERISTICS OF FRAM PRODUCTS Ramtron's FRAM products provide in a single component the high-speed read/write characteristics and efficiencies of RAM with the nonvolatile memory storage capability of ROM. By integrating the nonvolatile properties of its ferroelectric materials with an industry standard CMOS semiconductor memory manufacturing process, Ramtron has produced component-level nonvolatile RAM products. The nonvolatile storage element in FRAM memories is a capacitor that is integrated between the transistor and metalization layers of a typical CMOS manufacturing process and is constructed from a thin film ferroelectric between two metal electrodes. Ferroelectric materials inherently function in a nonvolatile manner within a semiconductor memory device because they become polarized when an electric field is applied and remain polarized after the electric field is removed. Reversing the field causes spontaneous polarization in the opposite direction. The positive or negative state of the material can be sensed by the interaction of an applied electric field with the material's polarization, thereby allowing for the storage of binary digital information. Notwithstanding the theoretical simplicity of nonvolatile ferroelectric memories, it took Ramtron over eight years to be the first Company to produce such memories in commercial volumes. High- density FRAM memories, if they can be developed and commercially produced in a timely and cost-effective manner, have the potential to be important in the development of future products in the semiconductor memory industry. The advantages of Ramtron's FRAM products include: Fast write time. Because a FRAM device works by polarization rather than stored-charge, it has very fast write speeds measured in nanoseconds (billionths of a second) rather than milliseconds that are required to write to an EEPROM or Flash memory. High write endurance. Current FRAM products deliver more than 10 billion read/write cycles. Nonvolatile retention. FRAM products can retain data without a power source for a minimum of ten years under normal operating conditions. Small form factor. Batteries, extra transistors, sockets or add-on devices are unnecessary since non-volatility is inherent in the ferroelectric material. Minimal power. FRAM devices have extremely low power demands (2 to 20 times less active current than alternative nonvolatile solutions) and require less standby current. Page-3 FRAM PRODUCTS Ramtron was the first company to introduce ferroelectric technology in commercial memory products beginning with a 4 kilobit parallel interface product in late 1992. This product established initial production and demonstrated the benefits of FRAM in a commercial application. Based on this demonstration, the Company was able to broaden its product line and establish a merchant market presence. Today, the Company offers a line of serial and parallel interface FRAM memories that have distinct advantages over EEPROM equivalents. These products are manufactured by the Company's license partners using the Company's proprietary FRAM technology. The Company sold $3.5 million of FRAM products in 1999. In order to accelerate market acceptance, the Company developed FRAM serial products based on industry standard EEPROM circuits. These products are offered in 4-kilobit,16-kilobit and 64-kilobit densities with selected industry standard interfaces. The Company produces these products in industry-standard package types. They compete with EEPROM serial memories with identical pin configurations. By emulating standard EEPROM products with FRAM technology, the Company is able to accelerate product evaluation and acceptance by new customers. However, the products are distinguished from their EEPROM counterparts by faster write times, higher write endurance (number of permitted write cycles) and lower power requirements. As an example, comparable EEPROM's perform a single-byte write in 2 to 10 milliseconds, where as a FRAM-based product writes in 200 nanoseconds, or 10,000 to 50,000 times faster. Comparable EEPROM's offer write endurance from 100,000 to 1,000,000 cycles, where as a FRAM product offers from 100,000,000 to 10,000,000,000 cycles, or 1,000 to 10,000 times greater. Deploying FRAM technology in industry standard configurations offers substantial benefits in a variety of industrial and commercial applications, which are write intensive and which require collecting data or the frequent alteration of configuration settings. As a consequence of these feature advantages, the Company's FRAM products are currently able to command a price premium versus EEPROM products in these selected applications. In addition to low-density serial memories, the Company offers a line of medium density parallel interface products. In order to accelerate market acceptance, these product designs are based on industry standard SRAM circuits. The primary market these products serve is replacement in multi-device battery- backed SRAM applications. SRAM's are fundamentally a volatile device and do not retain data in the absence of power. A backup battery is commonly used to retain the stored data. FRAM parallel products offer a comparable feature set and data retention without the requirement of a battery. Current products include 64-kilobit and 256-kilobit products in industry standard package types. Page-4 The Company anticipates increases in its available manufacturing capacity from its foundry partners. The manufacturing and commercialization of FRAM technology associated with each of the Company's foundry partners depend primarily upon each individual foundry's process and product development activities, the timing and results of which are uncertain. The Company intends to continue developing new products as it is able to determine the available manufacturing capacity of each of its foundry partners. In preparation for the anticipated increase in foundry capacity, the Company is currently developing several new products that are expected to provide future revenue growth. In cooperation with one of its partners, the Company has developed a 64-kilobit FRAM product and a 256-kilobit FRAM product. During 2000 the Company expects to achieve volume manufacturing and commercialization for these two products. The manufacturing costs of FRAM products are presently higher than competing EEPROM and Flash products. The Company and its strategic alliance partners are working to reduce such manufacturing costs and, because of FRAM compatibility with CMOS semiconductor manufacturing and the mask design of FRAM chips, the Company believes that FRAM products are capable of being mass produced on a cost-effective basis. DEVELOPMENT AND MANUFACTURING ALLIANCES To gain access to advanced CMOS manufacturing processes and facilities, Ramtron has entered into manufacturing alliances and licensing agreements for FRAM products with certain well capitalized companies having or constructing advanced memory product manufacturing capabilities, including Rohm Company, Ltd. ("Rohm"), Hitachi Ltd. ("Hitachi"), Toshiba Corporation ("Toshiba") and Fujitsu Limited ("Fujitsu"). Since the purchase or construction of an advanced manufacturing facility capable of mass producing memory devices would require a capital outlay well beyond the Company's current capital resources, the Company believes that the most suitable alternative is this strategic- alliance approach, which the Company believes will enable it to develop, manufacture and sell FRAM products more rapidly and cost effectively than any other available alternative. Ramtron's intention is to utilize current and future alliance relationships as foundry sources for FRAM products. STRATEGY FOR FRAM PRODUCTS In 1999, Ramtron completed the shift to a fabless manufacturing strategy, exclusively using foundry partners to produce its product. As a consequence of this change, the Company has adopted a competitive strategy with three elements. They are (1) strategic market selection, (2) strategic partner selection, and (3) new product development. STRATEGIC MARKET SELECTION. Ramtron is continuously identifying product development opportunities while evaluating several considerations including overall semiconductor memory product market conditions and access to our strategic partners product development and manufacturing plans. Obtaining information about the manufacturing capacity, product development plans and target markets of our alliance partners has a particularly large impact on Page-5 development and product strategy. Considering the size difference between Ramtron and its alliance partners, we believe that it is critical to identify appropriate development programs and target markets which minimize near-term direct competition with our manufacturing partners. Based on its current understanding of these conditions, the Company has grouped current product plans into three market segments. They are standard memory, value added memory, and niche products. The Company believes that products developed to serve these segments provide attractive market opportunities while allowing Ramtron to remain competitive. STRATEGIC PARTNER SELECTION. The Company maintains a preference for partners that serve a strategic interest to the Company by providing complementary technology, production capacity, or market access. As the Company's FRAM technology becomes widely accepted, the Company anticipates new partnership opportunities. Ramtron expects to continue to license technology and form partnerships with selected industry suppliers and customers. NEW PRODUCT DEVELOPMENT. Ramtron believes that its product development expertise, particularly in the application of FRAM technology is a unique competence. It is the Company's intention to invest considerably to maintain this advantage to the maximum extent we can do so within our capital and financing constraints. Ramtron believes its current product development system permits the Company to bring FRAM based products to market faster than the competition and to minimize the cost of such product development. This expertise is embodied in the Ramtron design methodology, which includes ferroelectric circuit simulation, ferroelectric modeling for multiple foundry processes, ferroelectric memory core libraries, and the institutional knowledge of such memory design. The Company will continue investing to upgrade its design automation and product development activities to further improve productivity and shorten time to market. COMPLEMENTARY FERROELECTRIC APPLICATIONS AND TECHNOLOGY Ramtron's FRAM technology has product applications other than stand-alone memory devices. For example, smart cards, microcontrollers, programmable logic devices and radio frequency identification applications often include embedded ROM and/or RAM memories in the device. FRAM memory performance compared to alternative memory solutions offers distinct advantages in such applications. To exploit these product opportunities without diverting the Company's focus from the development of FRAM products, Ramtron has licensed its ferroelectric technology to, and entered into joint ventures with, other companies. Ramtron may elect to pursue selected business opportunities in these areas when appropriate market conditions and suitable partners are identified. In addition, the Company is continuing to research and develop ferroelectric material compositions with the aim of further enhancing the performance advantages of FRAM memories relative to alternative memory solutions (e.g., longer write endurance, lower operational voltage and lower power consumption). Page-6 FRAM MARKETS SALES CHANNELS. The Company markets standard FRAM memory products via commercial semiconductor sales channels including manufacturers representatives and industrial distributors. Such marketing activity is conducted in major markets around the world. Customers are distributed regionally, in size, and in end-use industry. The Company anticipates using these existing channels for the future sales and distribution of its products. The Company supports the sales channels with directly employed sales managers that have regional responsibility. Sales of FRAM product are expected to conform to the overall semiconductor industry in seasonal sales patterns. CURRENT FRAM MARKETS. The market for existing FRAM products somewhat resembles the market for EEPROM products. As examples, the Company sells products into the industrial sector in applications such as electric power meters and related datacom networks; the office equipment sector in applications such as laser printers, copiers and hand held portable electronic devices; and the communication sector in applications such as electronic telephones and cable modems. If Ramtron is able to make a significant improvement in reducing FRAM product manufacturing costs and expanding its manufacturing capacity from its strategic partners, it should be able to penetrate further into existing markets and to develop new markets. COMPETITION In order to accelerate the market acceptance of FRAM technology and Ramtron products, the Company has followed a strategy of using FRAM technology to create products that, when substituted for industry standard products such as EEPROM, achieve certain performance benefits. This strategy serves to simplify customer evaluation and design-in of FRAM products. It is a traditional approach for introducing new technology that greatly accelerates the process and improves the probability of a successful introduction. The disadvantages of this strategy are (i) that the Company must compete directly with vendors of alternate memory types and (ii) that not all the potential benefits of the FRAM product may be completely exploited through such existing product substitution. Since the competition is based on industry standard products with multiple sources, the basis for competition is price, availability, customer relationships and customer service. Ramtron faces intense competition based on these factors. The Company competes with major corporations having substantially greater resources in technical, financial, production, marketing and management categories such as ST-Microelectronics, Dallas Semiconductor, Atmel Corp., and Xicor Inc. Using the Company's FRAM technology, Ramtron introduces product performance as a new competitive factor, which has varying importance depending on the customer and the application. During the past several years many memory categories have experienced severe price erosion as a result of excess capacity. Ramtron has been adversely impacted by such erosion, which has lead to a substantial increase in the price premium of certain FRAM products that compete directly with EEPROM products. The Company is, therefore, seeking a strategy of targeting applications where the FRAM technology advantages reduce competitive pressure. One result of this strategy is a smaller market in which FRAM products can be sold. The Company will continue to emphasize FRAM product benefits while the Company and its manufacturing partners work to drive down the cost of production. Page-7 In addition to competition with other technologies, the Company expects to be competing with its licensees and foundry partners over the long term. To successfully compete in such markets, Ramtron must therefore continue to develop a low overhead structure, a value added product line, its own customer relationships and a high level of customer service. In pursuing these goals, Ramtron will develop proprietary products that more fully exploit the FRAM benefits and produce expected higher margins than more standardized products. The success of this strategy depends on the Company's ability to develop and introduce new products into production, its competitors' plans for new products, and customers' ability to deploy such products in commercial volumes. Critical factors are the availability of manufacturing capacity that the Company can use to build these products, the Company's ability to attract and retain qualified personnel, and to execute rapid development of new products. FRAM PRODUCT MANUFACTURING Since April 1999, the Company has operated as a fabless semiconductor company relying on third-party foundries for all of its wafer production. Ramtron currently is engaged in foundry relationships with Rohm and Fujitsu. Rohm provides the Company with 6" wafers using a CMOS/FRAM process with a 1.0-micron minimum feature size. The Company anticipates a 0.6-micron CMOS/FRAM production process will be available from Rohm in the future, however, process upgrades at foundry partners is not under the direct control of the Company and Ramtron cannot be assured when or if such process improvements will be available. Fujitsu manufactures 6" wafers for the Company using a 0.5-micron CMOS/FRAM process. Ramtron is currently collaborating with Fujitsu to develop a 0.35-micron production process. Implementation of these new processes will enable lower cost production and potentially larger memory arrays. The Company will continue to have access to new production capabilities at foundry partner locations based on contractual provisions in its technology license agreements with such partners. In some cases, the details of these production arrangements are to be determined when the partner's production capability is established. A critical factor in the Company's product planning is the availability and capability of these various fabrication plants. Each partner has or will be installing processes and equipment consistent with their own product plans. Neither the capacity nor the capability of these factories are under the Company's direct control. In addition, each partner will provide a different cost structure to the Company for its share of the production. It is incumbent upon Ramtron to identify a product development and manufacturing strategy that makes the best use of these diverse production resources. For this reason, Ramtron's FRAM manufacturing strategy will evolve as it is able to determine each partner's production capability. It is possible that the Company will not be able or will not elect to use all of the production capacity to which it has access. In the case of proprietary products developed solely by Ramtron, the Company must identify a source from among its partner foundries that is capable of production with an attractive cost structure. In each case, the Company must negotiate its ability to run such products at a partner foundry according to the individual manufacturing agreement. Page-8 The Company's business may be adversely affected by the unavailability of an individual foundry partner's capacity from time to time. However, the Company believes that as a consequence of multiple foundry relationships, it has more flexibility in the long term in producing its products than other similarly sized companies. The Company believes that the raw materials and services required for the manufacture of its products at its manufacturing foundry partners are readily available. Once wafers are fabricated by one of our foundries, the Company assembles and tests the products. These operations are primarily subcontracted to companies that perform these operations on a relatively large scale. Current production is subcontracted to two firms operating in Thailand and one firm operating in China. Such off-shore subcontracted functions offer significant economic benefits, however, they also introduce substantial risks. The Company expects to receive lower priority from such subcontractors than larger firms as a result of its initial limited volume of production. In addition, the Company is exposed to all of the risks associated with using foreign subcontractors. The Company maintains an active effort to manage these subcontracted operations and to minimize any associated risks. ENHANCED-DRAM PRODUCTS In May 1995, Ramtron formed EMS as a wholly owned subsidiary through which the Company operates its EDRAM and ESDRAM business, including designing, marketing and selling such products manufactured by third-party manufacturing partners. The creation of a separate organization serves to focus all of the Company's non-ferroelectric activities in a single organization. The Company has developed a family of proprietary Enhanced-DRAM ("EDRAM" (registered trademark)) and Enhanced Synchronous DRAM ("ESDRAM") products that capitalize on unique architectural and design features to provide what the Company believes are the highest performance DRAM products available. The Company currently produces EDRAM and ESDRAM products under foundry agreements with IBM and Infineon Technologies ("Infineon"), formerly Siemens Semiconductors. BACKGROUND Because of their low cost and unlimited random access read/write capability, DRAM's are the most widely used memory device in computing applications. Significant improvements in microprocessor ("MPU") speeds and increasing architectural complexity in computing systems has created a performance bottleneck at the memory system level due to slow memory access speed and bandwidth. Because DRAM's operate at slow speeds relative to the MPU, high- speed static random access memories ("SRAM's") have been used to improve memory access and retrieval speed. However, the large memory cell size of the SRAM makes it significantly more expensive than the DRAM. Alternate DRAM architectures have been developed which use interleaving of several memory banks such as synchronous DRAM ("SDRAM") and Rambus DRAM ("RDRAM"). Other DRAM's, such as extended data output ("EDO") and burst EDO, use pipelining of Page-9 data. These alternate DRAM's do not improve the basic access or retrieval speed of the DRAM but instead only improve peak bandwidth. Most high- performance systems require combinations of small amounts of SRAM to "cache" data transfers and high bandwidth DRAM architectures to fill the cache quickly. Even with these techniques, the larger size of today's software operating systems and applications and the frequent context changes required by multitasking create a bottleneck limited by the DRAM access and retrieval speed. CHARACTERISTICS OF EDRAM PRODUCTS To address the access and retrieval speed limitations of DRAM's and the high costs associated with high-speed SRAM's, the Company developed a group of 4-megabit EDRAM and 16-megabit ESDRAM products. The Company's EDRAM and ESDRAM products combine what it believes is the fastest 4-megabit (25-35 nanosecond) and 16-megabit (24-35 nanoseconds) DRAM together with a 10-15 nanosecond SRAM and a 2,048 bit-wide integrated DRAM to SRAM interconnecting bus for the EDRAM and a 4,096 bit-wide integrated DRAM to SRAM interconnecting bus for the ESDRAM, all on the same chip. The Company's EDRAM's and ESDRAM's can operate at the high speeds of today's MPU's enabling systems to operate faster and at a reduced overall system cost when compared with systems using SRAM cache plus standard DRAM or the alternate DRAM architectures. Testing of EDRAM-based systems by Ramtron's customers has shown system performance improvements from 1.3 times to 2.0 times over similar systems with DRAM or DRAM plus SRAM cache. The system performance of EDRAM and ESDRAM approaches the speed of a complete SRAM memory system but with significant cost reductions and increased density. The Company's 4-megabit EDRAM and 16-megabit ESDRAM components use the same packaging as a standard DRAM, and the Company also has a family of EDRAM and ESDRAM single in-line memory modules ("SIMM") and dual in-line memory modules ("DIMM") that use the same form factor and connectors as standard DRAM SIMM and DIMM modules. This allows system developers to design higher performance systems using the same packaging and control logic technique as slower DRAM's and to design systems which can use either memory type to provide two performance options. The Company began selling EDRAM's in commercial volumes in the first quarter of 1993. The EDRAM product has been demonstrated to provide a performance advantage and a cost effective memory solution for a variety of the highest performance system applications including personal computer motherboards, accelerator boards, multiprocessor systems, disk controllers, embedded computer modules, communication bridge/routers, digital signal processing systems and video graphic systems. STRATEGY FOR EDRAM AND ESDRAM PRODUCTS The Company's strategy is to provide SRAM performance with DRAM density in a product with significantly lower pricing than SRAM's. A significant portion of the Company's EDRAM and ESDRAM business is targeted at replacement of fast (10-15 nanosecond) SRAM's in high-performance systems. In these applications, the Company's EDRAM and ESDRAM products provide a significant density improvement and a significantly lower cost per bit than equivalent SRAM products. EDRAM and ESDRAM provide the customer cost and density advantages while allowing the Company to command a price premium over slower DRAM's. Page-10 A secondary strategy is to provide a significant performance upgrade option for industry standard DRAM's in the same memory module socket. This strategy targets the high-performance segments (communications, RAID disk control, DSP, embedded processing, and PC systems) of the main memory marketplace. The Company's strategy is to serve the highest performance segments of these markets while maintaining higher margins than the commodity DRAM. This strategy allows the business to achieve the production volumes necessary to operate an efficient DRAM business while maximizing profit margins in served markets. The Company's plan is to produce EDRAM and ESDRAM products through strategic alliances and foundry arrangements with major semiconductor companies and to expand the market for these products by licensing production through multiple sources. This approach avoids the high capital costs associated with DRAM manufacturing that would have otherwise been incurred by the Company if it had chosen to manufacture these products with Company-provided resources. In order to increase the opportunity to expand licensing opportunities of the Company's patented technology, the Company pursued and was granted a superset standard for its ESDRAM product by JEDEC during 1998 and plans to continue to pursue making the ESDRAM into an industry standard memory. During 1999, the Company completed development of 16-megabit versions of its EDRAM products. The new products, named the Enhanced Synchronous DRAM (ESDRAM), are fully compatible with the industry standard SDRAM products that are the standard main memory for PC systems. The new products use the original EDRAM architecture internally to provide significantly faster access and retrieval speeds than SDRAM. The ESDRAM can replace SDRAM directly on printed circuit boards and on current DIMM modules and small outline dual inline memory modules ("SO DIMM's") currently being used in PC desktop and notebook computer systems. The new ESDRAM has the same speed as burst SRAM but with 4-8 times higher density and much lower cost. This will allow the Company to continue to provide a higher density and lower cost solution to SRAM products while maintaining a higher average selling price over slower DRAM's. IBM. In April 1995, the Company entered into a five-year agreement with IBM under which the Company was required to design and qualify, and IBM would manufacture, completed wafers for the Company's 4-megabit EDRAM products. The Company granted to IBM an irrevocable, worldwide, non-exclusive license to use the Company's EDRAM technology and know-how for the development, fabrication, lease, sale or transfer of 4-megabit EDRAM products by or for IBM. In December 1997, the Company entered into a five-year agreement with IBM under which the Company will design and qualify, and IBM will manufacture, completed wafers for the Company's 16-megabit ESDRAM products. The Company granted to IBM a fully paid-up, irrevocable, perpetual, worldwide, non- exclusive, non-sublicensable right and license under EMS's licensed technology to use the Company's 16-megabit ESDRAM technology for the development, fabrication, lease, sale or transfer of 16-megabit ESDRAM products by or for IBM. IBM also received the unlimited right to manufacture 16-megabit ESDRAM's for its internal consumption on a royalty-free basis, and the right to manufacture and sell, measured on a quarterly basis, an amount up to two times the Company's total sales of ESDRAM's or up to two times a predetermined monthly wafer start amount, whichever is greater, for external sales on a royalty-free basis. IBM may exceed such limit by paying to the Company a royalty on such ESDRAM sales. Page-11 The Company has the right to purchase the greater of a predetermined monthly wafer amount or a quantity of wafers equal to 100% of IBM's previous quarterly sales of ESDRAM product for external sales. INFINEON TECHNOLOGIES. In February 1998, the Company entered into a manufacturing foundry agreement with Infineon pursuant to which Infineon agreed to manufacture and sell to the Company at specified prices for the Company's resale to its customers ESDRAM products or other products using the Company's EDRAM technology. The manufacturing foundry agreement has an unlimited term and Infineon does not have any rights to the Company's EDRAM or ESDRAM technology. In January 2000, the Company expanded its relationship with Infineon Technologies. Infineon acquired 20% ownership in EMS, the Company's formerly wholly owned subsidiary which conducts the Company's EDRAM and ESDRAM business, in consideration for up to $200 million per year of committed wafer manufacturing capacity using Infineon's advanced DRAM and embedded DRAM process capabilities and access to Infineon's design technology. The agreement has a term of six years with optional two year renewal periods thereafter. CYPRESS SEMICONDUCTOR. In November 1999, the Company entered into a technology development agreement with Cypress Semiconductor Corporation ("Cypress") to develop high performance, high density memory products. The agreement is expected to result in a product to be sold by both Cypress and EMS. COMPETITION Numerous companies, including major corporations possessing worldwide wafer manufacturing and integrated circuit production facilities, manufacture DRAM products. While the Company's EDRAM and ESDRAM products have certain higher performance characteristics than standard DRAM products, the Company considers only high-speed "specialty" DRAM products such as cache DRAM ("CDRAM"), RDRAM, virtual channel RAM ("VCRAM"), fast cycle RAM ("FCRAM") and multi-bank RAM ("MDRAM") products manufactured by companies such as Mitsubishi Electric Corporation, Rambus (through licensees), NEC Corporation, Fujitsu and MoSys, Inc. to be competitive with the Company's EDRAM and ESDRAM products. The Company also considers its EDRAM and ESDRAM products to be competitive in certain applications with SRAM products, which are manufactured by major corporations, including Alliance Semiconductor Corporation, Cypress Semiconductor Corporation, Integrated Device Technology, Inc., Motorola, Inc., Hitachi, ST-Microelectronics, Toshiba, Fujitsu, Samsung Electronics Co., Ltd., Hyundai Electronics Industries Co. Ltd. and Micron Technology Inc. The Company currently sells eight 4-megabit EDRAM product configurations with three speed grades and two temperature ranges. These products include components with 4-megabit by 1, l-megabit by 4 and 5 SIMM modules with 4- megabyte, 8-megabyte and 16-megabyte capacities. Each product is available with 10, 12 or 15 nanosecond speed. The Company sold approximately $9.6 million of EDRAM and ESDRAM products in 1999. Page-12 During 1999, the Company began shipments of its 16-megabit ESDRAM products. These products included three product configurations with three speed grades and two temperature ranges. The products include components with 4-megabit by 4, 2-megabit by 8, 1-megabit by 16 and 512-kilobit by 32 configurations and 3 DIMM modules with 8-megabyte, 16-megabyte, and 32-megabyte capacities. Each product is available with 100, 133, and 166MHz maximum clock rates. The Company began development of a higher density 64-megabit ESDRAM product during 1999. The Company expects the EDRAM and ESDRAM products to remain competitive with fast SRAM and the alternate DRAM architectures (SDRAM, DDR SDRAM, RDRAM and others) for the foreseeable future. Although many of the alternate DRAM products are moving to 128-megabit densities and higher, many EDRAM and ESDRAM market segments do not require higher density memories. The departure of many of the competing memory suppliers to serve the volume PC main memory market with 128-megabit products could enhance EDRAM and ESDRAM opportunities in embedded control applications, which do not require higher density memory capacities. SALES CHANNELS The Company markets EDRAM and ESDRAM memory products via commercial semiconductor sales channels including manufacturers representatives and industrial distributors. Such activity is conducted in major markets around the world. Customers are distributed regionally, in size, and in end-use industry. Using its contract manufacturing sources, the Company has produced and sold a sufficient amount of product to enable the development of these sales channels. The Company supports these sales channels with directly employed sales managers that have regional responsibility. Sales of EDRAM and ESDRAM products are expected to conform to the overall semiconductor industry in seasonal sales patterns. EDRAM AND ESDRAM PRODUCT MANUFACTURING Because of the large capital costs required to build and operate competitive DRAM manufacturing facilities, the Company's manufacturing strategy with respect to EDRAM and ESDRAM products is to contract with conventional DRAM manufacturers to produce such products on behalf of the Company. At this time, IBM and Infineon are the Company's contract manufacturers of these products. The development of additional manufacturing partners for the Company's products continues to be a priority for the Company. The Company believes that the raw materials associated with the manufacturing of the Company's EDRAM and ESDRAM products are readily available from multiple sources. The Company is currently working to develop ESDRAM products with 64-megabit and higher densities to serve the needs of the high-performance main memory markets and to reduce component counts in embedded control systems. The recent agreement with Infineon gives the Company access to advanced technologies to support development of 64-megabit, 256-megabit and higher density products. Page-13 RESEARCH AND DEVELOPMENT Development of additional FRAM and EDRAM products and the associated design development and manufacturing processes will require the Company to make significant additional investments in research and development. Continued investment in both products and processes is critical to the Company's success and, in the case of the Company's ferroelectric technology, to the ultimate commercial realization of such ferroelectric technology. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources." The Company's current research and development activities are focused on expanding the Company's technology to develop new low-density and high-density applications, materials and processes, design concepts and architectures. During 1999, the Company entered into a co-development agreement with Fujitsu to pursue an advanced FRAM manufacturing process. The agreement calls for Ramtron and Fujitsu to develop a 0.35-micron FRAM manufacturing process at Ramtron's Colorado Springs facility. Fujitsu will provide development program funding over a 2 year period and several pieces of wafer fabrication equipment to be used in the development program. As of December 31, 1999, approximately 68 of the Company's employees were engaged in research and development. In addition, manufacturing personnel were involved in research and development through efforts to increase the manufacturing yields of the Company's products. The Company's research and development expenditures for 1999, 1998 and 1997 were approximately $7.2 million, $10.9 million and $10.7 million, respectively. Customer- sponsored research and development expenditures during 1999, 1998 and 1997 were approximately $4.9 million, $0.8 million and $0.1 million, respectively. MANUFACTURING The Company's manufacturing strategy is to develop the design of new products internally and through co-development alliances for production by third-party manufacturers. Consistent with this strategy, Ramtron has entered into arrangements with Rohm, Hitachi, Toshiba, Fujitsu and Asahi Chemical Industry Co., Ltd. ("Asahi") for the development and/or manufacture of FRAM products and with IBM and Infineon for the manufacture of EDRAM products. The Company has also entered into a licensing arrangement with Samsung for the Company's ferroelectric technology and a license arrangement with NEC Corporation ("NEC")for EDRAM technology. Such licenses do not include co-development or manufacturing arrangements between the Company and the licensee. Ramtron's agreements with its third-party manufacturers are intended to enable the Company to avoid the large capital expenditures that otherwise would be required to manufacture FRAM products and EDRAM products in commercial volumes. As a result, however, the Company was dependent on IBM for its supply of 4-megabit EDRAM products during 1999 and IBM and Infineon for current and future supply of 16-megabit ESDRAM products. The Company completed its transition to a fabless manufacturing strategy for FRAM products in 1999. Commercial production of FRAM products from its Colorado Springs facility Page-14 ceased at the end of the first quarter in 1999. The Company began receiving shipments of FRAM product memories manufactured by Rohm in February 1998 and in late 1999 the Company began receiving shipments of FRAM product memories manufactured by Fujitsu. The Company has not yet negotiated the definitive terms of the foundry supply agreements with Hitachi or Toshiba, but such companies are contractually bound to enter into such agreements upon fulfillment of certain conditions. Under the fabless business strategy the Company will continue to be dependent on other manufacturers for the manufacture of FRAM and EDRAM products. As is customary in the semiconductor industry, the Company and its third-party manufacturers subcontract with foreign companies to assemble and test its finished products. Manufacturing services performed by such third parties are conducted in accordance with processes designed by the Company or its third- party manufacturers and implemented under supervision of product engineers of the Company or such third-party manufacturers. Federal, state and local regulations impose various environmental controls on the discharge of chemicals and gases used in the Company's manufacturing and research and development processes. The Company believes that it has taken all necessary steps to ensure that its activities comply with all applicable environmental rules and regulations. While the Company's operations have not been materially impacted by the cost of environmental compliance, there can be no assurance that changes in such environmental rules and regulations will not require additional investments in capital equipment and compliance programs in the future. Any failure by the Company to comply with such environmental rules and regulations regarding the discharge of hazardous substances could subject it to substantial liabilities or could adversely affect its manufacturing operations. More than 50% of the Company's EDRAM product sales in 1999 were to the Company's top three customers, Mylex Corporation, Lucent Technologies and Motorola. As a result of the concentration of the Company's EDRAM customer base, any substantial reduction or cancellation of business from any of those customers or any significant decrease in the prices of EDRAM products sold to them could have a material adverse effect on the Company's cash flow, operating results and financial condition (see "Note 12 - Segment and Geographic Area Information"). Export product sales as a percentage of total product sales were 20%, 26% and 38% for the years 1999, 1998 and 1997, respectively. MARKETING As is typical of other new products in the semiconductor industry, Ramtron's products can require lengthy "design-in" cycles for customer applications and extensive application engineering support. The Company supports its customers' design-in activities and considers such support an important element of its sales and marketing efforts. Page-15 The Company markets its products worldwide through distribution networks using internal sales resources and independent sales representatives and distributors. The Company maintains 7 full-time sales and marketing personnel at its headquarters in Colorado Springs and resident employee(s) in California, Japan and Europe. The Company has distribution and/or representation relationships with 22 companies in Europe, 4 in Japan, 3 in Korea, 2 in each of Israel, Singapore and Malaysia and 1 in each of Hong Kong, Thailand, Taiwan, China, Puerto Rico, Philippines, Russia, Mexico, New Zealand and Australia. In the United States, the Company has distribution/representation relationships with 28 companies and 2 in Canada. BACKLOG The rate of booking new orders varies from month to month and depends on scheduling practices of individual customers. Cyclical industry conditions make it difficult for many customers to enter into long-term, price-fixed contracts. Orders are typically entered into under the condition that the terms may be adjusted to reflect market conditions at the delivery date. For the foregoing reasons and because of the possibility of customer changes in delivery schedules or cancellations of orders without significant penalty, the Company does not believe that its backlog as of any particular date is firm or that it is a reliable indicator of actual sales for any succeeding period. COMPETITION The semiconductor memory industry is intensely competitive. The Company's FRAM and EDRAM products experience intense competition from numerous domestic and foreign companies. The Company may be at a disadvantage in competing with many of these competitors having significantly greater financial, technical, manufacturing and marketing resources, as well as more diverse product lines that can provide cash flows counter cyclical to fluctuations in semiconductor memory operations. The Company considers its FRAM products to be competitive with existing nonvolatile memory products such as EEPROM, Battery Backed Static RAM ("BBSRAM") and Nonvolatile RAM ("NVRAM") products in low-density applications. Although nonvolatile Flash memory products are important in the high-density memory product market, the Company's products do not currently compete in that market. Both low-density and high-density nonvolatile memory products are manufactured and marketed by major corporations possessing worldwide wafer manufacturing and integrated circuit production facilities (e.g., ST-Microelectronics, Motorola, Inc. and Hitachi) and by specialized product companies (e.g., Dallas Semiconductor, Atmel Corp., Xicor Inc., and Rohm). Numerous companies, including major corporations possessing worldwide wafer manufacturing and integrated circuit production facilities, manufacture DRAM products. Because the Company's EDRAM products have certain higher performance characteristics than standard DRAM products, the Company considers only high-speed "specialty" DRAM products (such as SDRAM, CDRAM, RDRAM, fast SRAM, VCRAM and MDRAM products manufactured by companies such as Mitsubishi Electric Corporation, Rambus (through licensees), NEC Corporation, Fujitsu, and MoSys, Inc.) to be competitive with the Company's EDRAM and ESDRAM Page-16 products. The Company also considers its EDRAM and ESDRAM products to be competitive in certain applications with SRAM products, which are manufactured by major corporations, including Alliance Semiconductor Corporation, Cypress Semiconductor Corporation, Integrated Device Technology, Inc., Motorola, Inc., Hitachi, ST-Microelectronics, Toshiba, Fujitsu, Samsung, Hyundai Electronics Industries Co. Ltd., and Micron Technology, Inc. The Company's licensees may market products, which compete with the Company's FRAM and EDRAM products. Most of the Company's strategic alliance partners have the right to manufacture and sell FRAM or EDRAM products for their own account with or without the payment of royalties, depending upon the terms of their agreements with the Company. For example, as part of its agreements with Hitachi, Rohm, Toshiba and Fujitsu, the Company granted each of those companies a royalty-bearing non-exclusive license to the Company's FRAM technology and know-how, which license includes the right to manufacture and sell products using FRAM technology. The Company has also granted IBM a non-exclusive license to manufacture, produce and sell 4-megabit and 16-megabit EDRAM products in unlimited quantities, which license is royalty-free for internal consumption of EDRAM products and royalty-free for external sales up to two times IBM's total sales of EDRAM products. Most of these license agreements provide for the continuation of the licensed rights to Ramtron's FRAM or EDRAM technology and know-how after expiration or termination of the agreements on a royalty-bearing or royalty-free basis. To the extent that any of the Company's products achieve market acceptance, there can be no assurance that the Company's competitors will not be able to develop and offer competitive products or implement pricing strategies for FRAM and EDRAM products that could adversely affect the Company's business and operating results. The Company's ability to compete successfully depends on its ability to develop low-cost volume production of its products permitting its products to be sold at a price that is both competitive and profitable to the Company and on its ability to design products which successfully address customer requirements. The Company's ability to compete successfully also depends on factors beyond its control, including the rate at which customers incorporate the Company's products into their own products, the success of such customers in selling their products, the success of the Company's protection of its intellectual property, the success of competitors' products and general market and economic conditions. Many companies are researching and developing semiconductor memory technologies and product configurations that could reduce or eliminate any future competitive advantages of the Company's products. There can be no assurance that the Company's ferroelectric technology will not be supplanted in the future by competing technology or that the Company will have the technical capability or financial resources to be competitive in the semiconductor industry with respect to the design, development or manufacture of either FRAM or EDRAM products. PATENTS AND PROPRIETARY RIGHTS The Company relies heavily on its patents and trade secrets as a defense against competitors introducing infringing products that will compete with the Company's FRAM and EDRAM products and the royalty-bearing products of the Company's licensees. Although the Company intends to enforce its patents and Page-17 trade secrets aggressively, there can be no assurance that such protection will be available or be enforceable in any particular instance or that the Company will have the financial resources necessary to adequately enforce its patent and trade secret rights, and the unavailability or unenforceability of such protection or the inability to enforce adequately such rights could materially adversely affect the Company's business and operating results. The Company's strategic alliance partners, have access to the Company's proprietary FRAM technology and know-how and have the right, on a royalty-paying basis to manufacture and sell ferroelectric products. The Company does not license from others any material right covering its ferroelectric technology and does not believe its technology infringes any known patents. The Company has, however, entered into a cross-license agreement with Symetrix Corporation ("Symetrix") for the use by the Company of certain ferroelectric technology that may have been developed by Symetrix, which is not used in the Company's FRAM products. The Company is aware, because others have obtained patents covering numerous semiconductor designs or processes, that the Company operates in a competitive environment in which it would not be unlikely for a third party to claim that certain of the Company's present or future products may infringe the patents or rights of such third parties. If any such infringements exist or arise in the future, the Company may be exposed to liability for damages and may need to obtain licenses relating to third-party technology incorporated into the Company's products. The Company's inability to obtain such licenses on acceptable terms or the occurrence of related litigation could have a material adverse affect on the Company. See "Item 3. Legal Proceedings." The Company has been granted patents it believes are fundamental in covering the basic architecture and method of operation of its EDRAM products, and the Company has other patents and patent applications involving its EDRAM technology pending. As of December 31, 1999, the Company held 104 unexpired United States patents covering certain aspects of its products and technology. Such patents will expire at various times between November 2004 and June 2018. Three of these patents involving FRAM technology are owned jointly by Ramtron and Seiko Epson and 10 involving DRAM technology are owned jointly by Ramtron and Nippon Steel. As of December 31, 1999, the Company had applied for 37 additional United States patents covering certain aspects of its products and technology. The Company has also taken steps to apply for foreign patents on its products and technology. As of December 31, 1999, the Company held 77 unexpired foreign patents and had 52 foreign patent applications pending. A number of the pending foreign patents will, upon issuance, be jointly owned by the Company and either Seiko Epson, Nippon Steel or Fujitsu. In addition to prosecuting patents, the Company protects its proprietary technology through a trade secret program that involves restricting access to confidential documents and information and obtaining written confidentiality agreements with all vendors, visitors and technical employees. The Company believes its inventions are of fundamental importance to its ferroelectric and EDRAM technology and that patents that have been issued, or allowed but not yet issued, will provide protection against unauthorized use of the Company's inventions. There is evidence that other companies are seeking to develop and patent technology similar to the Company's technologies. Furthermore, other companies may seek to reverse engineer the Company's products. Page-18 EMPLOYEES As of December 31, 1999, the Company had 127 employees, including 16 in management and administration, 68 in research and development, 28 in manufacturing and 15 in marketing and sales. The Company's ability to attract and retain qualified personnel is essential to its continued success. The majority of the Company's employees have been granted options to purchase common stock pursuant to either the Company's Amended and Restated 1986 Stock Option Plan, the 1989 Nonstatutory Stock Option Plan, the 1995 Stock Option Plan, as amended, or the 1999 Stock Option Plan. None of the Company's employees are represented by a collective bargaining agreement, nor has the Company ever experienced any work stoppage. None of the Company's employees other than L. David Sikes, the Company's Chief Executive Officer; Greg B. Jones, the Company's President and Chief Operating Officer; LuAnn D. Hanson, the Company's Acting Chief Financial Officer and Vice President of Finance; Craig W. Rhodine the Company's Vice President and General Manager; and Donald G. Carrigan, the Company's Vice President of Sales and Marketing have an employment agreement with the Company, and none of the Company's employees has a post-employment noncompetition agreement with the Company. The Company believes that its employee relations are good. Item 1a. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Company, and certain information about them, are as follows: Name Age Position(s) - ---- --- ----------- L. David Sikes 58 Chairman of the Board and Chief Executive Officer Greg B. Jones 52 Director, President and Chief Operating Officer Richard L. Mohr 40 Executive Vice President, Chief Financial Officer And Corporate Secretary (Mr. Mohr resigned from all positions he held with the Company effective January 31, 2000) LuAnn D. Hanson 40 Acting Chief Financial Officer, Vice President of Finance and Corporate Secretary (effective February 1, 2000) Donald G. Carrigan 52 Vice President of Sales and Marketing (FRAM Products Business) Craig W. Rhodine 36 Vice President and General Manager (EDRAM Products Business) Mr. Sikes became the Company's Chairman of the Board and Chief Executive Officer in April 1995 and has been a director of the Company since September 1992. Prior to becoming Chairman of the Board and Chief Executive Officer, Mr. Sikes was the Company's President and Chief Operating Officer from July 1992 until January 1995, at which time he left the Company and joined Micro Component Technology Inc., a semiconductor equipment manufacturer, as its Chairman, President and Chief Executive Officer from January 1995 until April 1995. Prior to joining Ramtron, Mr. Sikes was President and Chief Executive Page-19 Officer of ASM America, Inc., a semiconductor equipment company, from January 1991 until June 1992, and Executive Vice President and General Manager of ASM Epitaxy, a semiconductor equipment manufacturer, from February 1989 until December 1990. Prior to his tenure with ASM Epitaxy, Mr. Sikes spent 18 years with Motorola, Inc. ("Motorola") in various management and executive positions including Vice President and Director of Semiconductor Research and Development Lab. His experience also includes several management and engineering roles with Eastman Kodak and National Semiconductor Corporation. Mr. Sikes received his Bachelor of Science degree in Electrical Engineering from Massachusetts Institute of Technology. Mr. Jones became a Director of the Company and the Company's President and Chief Operating Officer in February 1995. Prior to becoming President and Chief Operating Officer, Mr. Jones was Ramtron's Chief of Administration from January 1995 until February 1995. Prior to joining Ramtron, Mr. Jones was Marketing Director at Concord Services, Inc., from November 1993 until January 1995. From August 1990 until November 1993, Mr. Jones served as Director of Vertical Reactors at ASM America, Inc. Prior to his work with ASM America, Inc., Mr. Jones held a variety of management positions in sales, marketing, corporate planning and project management. He holds a Bachelor of Science degree in Engineering from the U.S. Naval Academy, Annapolis and a Master of Science degree in Management Sciences from Stanford University. Mr. Mohr joined the Company in January 1991 as Controller. In April 1994, he was named Vice President and Controller and served in that position until February 1995 when he was named Executive Vice President and Chief Financial Officer. Mr. Mohr is a certified public accountant and has over 17 years of professional finance experience including 13 years employed with high technology and manufacturing companies. From February 1987 until December 1990, Mr. Mohr was the Chief Financial Officer of Packaging Research Corporation, an equipment manufacturing company. Mr. Mohr received his Bachelor of Science degree in Accounting from Colorado State University and a Master of Business Administration degree in Accounting and Finance from Regis University. Mr. Mohr resigned from all positions he held with the Company effective January 31, 2000. Ms. Hanson joined the Company in September 1993 as Assistant Controller. In April 1995 she was named Controller and served in that capacity until January 1999 when she was named Vice President of Finance and Corporate Controller. In February 2000 Ms. Hanson was named Acting Chief Financial Officer and Vice President of Finance. Ms. Hanson is a certified public accountant and has over 18 years of professional finance experience including 14 years of semiconductor industry experience. Before joining the Company, Ms. Hanson held various positions at Carniero, Chumney & Co., certified public accountants, and various positions in accounting with United Technologies Microelectronics Center. Ms. Hanson attended the University of Northern Iowa earning a Bachelor of Arts degree in Accounting and a Master of Business Administration degree in Finance and Accounting from Regis University. Page-20 Mr. Carrigan joined the Company in November 1989 as Sales Manager and in July 1990 was named Director of Marketing and Sales and held that position until October 1992, when he became Vice President of Sales. In July 1996 Mr. Carrigan became an officer of the Company and in January 1997, he was named Vice President of Sales and Marketing. In February 1999 Mr. Carrigan was named Vice President and General Manager of the Company's FRAM Product Business. Mr. Carrigan is currently Ramtron's Vice President of Sales and Marketing for the FRAM Product Business. Mr. Carrigan has over 27 years of semiconductor industry experience in research and development, design, operations, marketing and sales. Prior to joining the Company, Mr. Carrigan held various managerial and technical positions, including Vice President of Sales and Marketing for Information Storage Incorporated, an optical storage system venture between Eastman Kodak Co. and Kawasaki Steel. He also held positions as Product and Test Engineering Manager and Director of Marketing for INMOS Corporation; Design Manager for NCR Microelectronics; IC Design Engineer in the Corporate Research Labs of Texas Instruments; and Design Manager for SRAM's with the Advanced MOS Memory Division of Texas Instruments. Mr. Carrigan received his Bachelor of Science degree in Electrical Engineering from the University of Tennessee and a Master of Science degree in Electrical Engineering from Southern Methodist University. Mr. Rhodine joined the Company in August 1992 as Project Engineer and in February 1994 he was named Engineering Manager. In August 1995, Mr. Rhodine was named General Manager of Enhanced Memory Systems, Inc. ("EMS"), a wholly owned subsidiary of Ramtron, and in March 1997, Mr. Rhodine became Vice President and General Manager of EMS. Mr. Rhodine became an officer of the Company in January 1998. Mr. Rhodine has over 14 years of experience in the semiconductor industry in engineering, development, and operations. Prior to joining the Company, Mr. Rhodine was a Member of the Group Technical Staff at Texas Instruments where he was involved with memory product development. Mr. Rhodine received his Bachelor of Science degree in Electrical Engineering from the University of Wyoming. Item 2. PROPERTIES The Company owns a 69,000-square foot building in Colorado Springs, which serves as its principal executive offices and as a research, development facility. The facility has a Class 10 semiconductor clean room that currently is used in ferroelectric research and development activities related to advanced FRAM manufacturing process development. The Company's land, building and equipment are subject to a first deed of trust and security interest in favor of the National Electrical Benefit Fund to secure a $7.2 million (principal and accrued interest) credit facility extended to the Company in September 1995 and amended in August 1999. The Company believes that its existing facilities are adequate for its needs in the foreseeable future for research and development activities. Page-21 Item 3. LEGAL PROCEEDINGS PATENT INTERFERENCE PROCEEDING. A patent interference proceeding, which was declared in 1991 in the United States Patent and Trademark Office (the "Patent Office") between the Company, National Semiconductor Corporation ("National") and the Department of the Navy in regard to one of the Company's issued United States patents, is continuing. The Patent involved covers a basic ferroelectric memory cell design invention the Company believes is of fundamental importance to its FRAM business in the United States. An interference is declared in the Patent Office when two or more parties each claim to have made the same invention. The interference proceeding is therefore conducted to determine which party is entitled to the patent rights covering the invention. In the present interference contest, the Company is the "senior" party, which means that it is in possession of the issued United States Patent and retains all rights associated with such patent. The other two parties involved in the interference are the "junior" parties, and each has the burden of proof of convincing the Patent Office by a preponderance of the evidence that it was the first to invent the subject matter of the invention and thus is entitled to the corresponding patent rights. Only the Company and National filed briefs in this matter. Oral arguments were presented before the Patent Office on March 1, 1996. The Patent Office decided the interference on May 6, 1997, holding that all of the claims were patentable to National, one of the "junior" parties. The other "junior" party, the Department of the Navy, was not granted any patent claims pursuant to the interference proceedings. On June 20, 1997, the Company filed a Request for Reconsideration with the Patent Office concerning the interference decision. Pursuant to the Request for Reconsideration, the Company requested that five separate issues be reconsidered because, from the Company's perspective, they were either ignored or misconstrued in the original decision. A decision on the Request for Reconsideration was issued on November 19, 1998, again holding that all of the claims were patentable to National. On January 9, 1999, the Company appealed the decision of the Patent Office on one of the interference counts directly to the Court of Appeals for the Federal Circuit. On February 2, 2000 the Court of Appeals vacated and remanded the decision of the Patent Office for further proceedings. The Company also filed complaints in Federal District Court seeking a review of the decision of the Patent Office on the remaining interference counts. The Company remains in possession of the issued United States Patent and retains all rights associated with such patent while it pursues its appeal options. The "junior" party has received no rights associated with this patent decision and will not receive any such rights as long as the appeal process continues. If the Company's patent rights that are the subject of the interference proceeding are ultimately lost or significantly compromised, the Company would be precluded from producing FRAM products in the United States using the Company's existing design architecture, absent being able to obtain a suitable license to exploit such rights. If such patent rights are ultimately awarded to National, and if a license to such rights is not subsequently entered into by the Company with National, National could use the patent to prevent the Page-22 manufacture, use or sale by the Company, and/or its licensees, within the United States of any products that come within the scope of such patent rights, which would include all FRAM products as currently designed, and which would materially adversely affect the Company. The Company has vigorously defended its patent rights in this interference contest and will continue such efforts. The Company is uncertain as to the ultimate outcome of the interference proceeding, as well as to the resulting effects upon the Company's financial position or results of operations. PATENT INFRINGEMENT PROCEEDING. In October 1998, the Company filed a claim for patent infringement in the United States District Court, Northern District of California against NEC Corporation, NEC Electronics, Inc. and NEC USA, Inc. (collectively "NEC"). The complaint claimed that NEC infringed and continues to infringe on certain patents of the Company by offering to sell and/or selling NEC's Virtual Channel SDRAM products, and by actively inducing others to infringe on such patents without authority or license from the Company. The complaint sought relief from NEC to cease its infringement activities and requested damages be awarded to the Company resulting from the infringement activities. The relief also asked for reimbursement of attorney's fees and certain other relief the Court deemed proper. NEC responded by denying the infringement claims brought against them by the Company. NEC also filed certain counterclaims against the Company, which were subsequently retracted or stayed by the court. On November 9, 1999 the Company and NEC entered into an agreement to settle its patent infringement lawsuit. The parties agreed to terminate the pending patent infringement cases and pursuant to the agreement, the Company granted NEC a restricted license to use certain of the Company's Enhanced DRAM specific intellectual property for certain consideration, terms of which are confidential and under a court protective order. LITIGATION DEERE PARK. In November 1998, Deere Park Capital Management LLC ("Deere Park"), a holder of the Company's Series A Convertible Preferred Stock ("Preferred Stock"), filed a lawsuit against the Company in the Court of Chancery of the State of Delaware seeking a declaratory judgment and specific performance of the Company's alleged obligation to convert a portion of Deere Park's shares of Preferred Stock to common stock, as well as damages of $2.4 million plus costs and attorneys fees. On December 16, 1998, the Company filed its answer denying the allegations of the complaint and asserting, among other things, that the Company had fully performed its contractual obligations with respect to the conversions alleged in the complaint. On January 20, 1999, Deere Park moved for permission to file an amended complaint. Shortly thereafter, in early February 1999, Deere Park filed a second action against the Company in the Court of Chancery for the State of Delaware. Like the proposed amended complaint in its original lawsuit, Deere Park alleged in the second action that the Company breached certain obligations to convert Deere Park's shares of Preferred Stock; however, Deere Park's new complaint added a claim for relief and relied on different facts to support the claims asserted Page-23 therein. On February 23, 1999, the Company answered Deere Park's second action by denying the substance of Deere Park's new allegations and raised certain affirmative defenses that the Company previously had not raised. Effective as of August 6,1999, Deere Park dismissed all claims against the Company with prejudice pursuant to the finalization of the Company's preferred stock restructuring. TALISMAN. On January 29, 1999, Talisman Capital Opportunity Fund, LLC ("Talisman"), a holder of Preferred Stock, filed a suit against the Company in the United States District Court for the Southern District of New York, also alleging that the Company failed to honor its obligations to convert shares of its Preferred Stock and seeking damages of over $1.5 million plus costs and attorney's fees. In its answer served on February 22, 1999, the Company denied the substance of Talisman's allegations and asserted several affirmative defenses. On April 7, 1999, the Company entered into an agreement with Talisman to settle the pending litigation. Pursuant to the terms of a confidential settlement agreement, the Company agreed to make a cash payment to Talisman in consideration for the cancellation of all Talisman's remaining shares of Series A Preferred Stock. Accordingly, Talisman's suit over the Company was dismissed and Talisman ceased to be a holder of the Company's Series A Preferred Stock. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On December 21, 1999, the Company held its 1999 Annual Meeting of Stockholders (the "Annual Meeting") in Colorado Springs, Colorado. Proxies for the meeting were solicited by the Board of Directors of the Company pursuant to Regulation 14A under the Securities and Exchange Act of 1934. There was no solicitation in opposition to the management's nominees as listed in the proxy statement, and all such nominees were elected. At the Annual Meeting, the Company's stockholders elected the following persons as directors of the Company. The number of votes cast for each director, as well as the number of votes withheld, are listed opposite each director's name: Name of Director Votes Cast for Director Votes Withheld ----------------------- ----------------------- -------------- L. David Sikes 9,053,709 210,870 Greg B. Jones 9,102,964 161,615 William G. Howard 9,105,704 158,875 Eric A. Balzer 9,107,526 157,053 Albert J. Hugo-Martinez 9,103,892 160,687 At the Annual Meeting, the stockholders approved with 3,099,035 votes cast in favor, 524,872 votes cast against and 59,082 abstentions, the amendment to the Company's 1995 Stock Option Plan to increase the number of shares available for grant under such plan by 1,200,000 shares to a cumulative total of 1,800,000 shares and to increase the maximum number of shares that may be awarded as options under the Plan during any calendar year to any optionee by 200,000 shares. Page-24 PART II. Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The Company's common stock trades on the Small Cap Market tier of The Nasdaq Stock Market under the symbol "RMTR." The following table sets forth the 1999 and 1998 ranges of the high and low closing sales prices for the common stock as reported on The Nasdaq Stock Market. High Low ------ ------ 1999 - ---- First Quarter . . . . . . . . . . . . . . . . . . $4.30 $2.03 Second Quarter . . . . . . . . . . . . . . . . . . 4.22 2.50 Third Quarter . . . . . . . . . . . . . . . . . . 3.13 1.69 Fourth Quarter . . . . . . . . . . . . . . . . . . 9.00 1.88 1998 - ---- First Quarter . . . . . . . . . . . . . . . . . . $29.05 $21.90 Second Quarter . . . . . . . . . . . . . . . . . . 27.50 15.45 Third Quarter . . . . . . . . . . . . . . . . . . 20.15 3.30 Fourth Quarter . . . . . . . . . . . . . . . . . . 5.00 1.25 The prices set forth above reflect transactions in the over-the-counter market at inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. On March 21, 2000, the last reported sale of the Company's common stock was $21.50 per share. As of March 21, 2000, there were approximately 2,307 record holders of the Company's common stock. During December 1999, the Company issued approximately 953,000 common stock units at an issue price of $5.66 per unit. Each unit consisted of one share of common stock, one warrant to purchase common stock at $10.81 per share and one warrant to purchase common stock at $16.22 per share. Such shares were registered under the Securities Act of 1933, as amended (the "Securities Act"). The registration statement registering the resale of such securities under the Securities Act, became effective on February 4, 2000. REVERSE STOCK SPLIT On July 20, 1999, the Company's stockholders approved a one-for-five reverse stock split. Common stock information appearing in the accompanying financial statements and notes have been retroactively adjusted to reflect the effects of the reverse split. Page-25 DIVIDEND POLICY The Company has not paid any dividends since its inception and does not intend to pay any cash dividends in the foreseeable future. The Company intends to retain any earnings to finance its operations. Item 6. SELECTED FINANCIAL DATA The following selected financial data should be read in conjunction with, and are qualified in their entirety by, the consolidated financial statements and related notes thereto and "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" included herein. Year Ended December 31, 1999 1998 1997 1996 1995 -------- -------- -------- -------- -------- (in thousands, except per share data) Net revenues $24,871 $18,554 $20,495 $31,391 $28,886 Gross margin, product sales 5,170(1) 7,158(2) 3,863 3,910 852 Operating loss (5,825) (12,985) (9,128) (5,231) (1,833) Net loss applicable to common shares (2,035) (19,141) (8,857) (5,737) (2,482) Net loss per share - basic and diluted (.16) (2.23) (1.19) (0.80) (0.55) Working capital 7,285 5,246 4,819 12,157 12,695 Total assets 29,380 33,347 31,054 31,762 36,558 Total long-term obligations 5,766 -- -- 3,721 3,954 Stockholders' equity 13,323 17,062 17,536 22,272 24,463 Cash dividends per common share(3) -- -- -- -- -- - ----------------- (1) Excludes provision for inventory write-off of $1.2 million. (2) Excludes loss on manufacturing contract of $1.2 million. (3) The Company has not declared any cash dividends on its common stock and does not expect to pay any such dividends in the foreseeable future. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following discussion and analysis is intended to provide greater details of the results of operations and financial condition of the Company. The following discussion should be read in conjunction with the information under "Item 6. Selected Financial Data" and the Company's consolidated financial statements and notes thereto and other financial data included elsewhere Page-26 herein. Certain statements under this caption constitute "forward-looking statements" under the Reform Act which are subject to certain risks and uncertainties. The Company's actual results may differ significantly from the results discussed in such forward-looking statements. Factors that might cause such a difference include but are not limited to: (i) the timely completion of the development and qualification for manufacturing of the Company's new EDRAM and FRAM products; (ii) broader customer acceptance of its EDRAM and ESDRAM products and low-density FRAM products; (iii) acceptance of new high-density FRAM products, which may be developed; (iv) the Company's ability to manufacture its products on a cost-effective and timely basis at its alliance foundry operations; (v) the Company's ability to perform under existing alliance and joint development agreements and to develop new alliance and foundry relationships; (vi) the alliance partners' willingness to continue development activities as they relate to their license agreements with the Company; (vii) the availability and related cost of future financing; (viii) the retention of key personnel; (ix) the outcome of the Company's patent interference litigation proceedings, and (x) factors not directly related to the Company, such as competitive pressures on pricing, marketing conditions in general, competition, technological progression, product obsolescence and the changing needs of potential customers and the semiconductor industry in general. For additional information concerning these and other factors, see "Expected Future Results of Operations" in this Item 7. Since its inception, the Company has been primarily engaged in the research and development of ferroelectric technology and the design, development and commercialization of FRAM products and EDRAM products. Revenue has been derived from the sale of the Company's FRAM and EDRAM products beginning in 1993. The Company has also generated revenue under license and development agreements entered into with a limited number of established semiconductor manufacturers and involving the development of specific applications of the Company's technologies. Accordingly, fluctuations in the Company's revenues have resulted primarily from the timing of significant product orders, the timing of the signing of license development agreements, and the achievement of related performance milestones. For 1999, 1998 and 1997, FRAM product sales represented approximately 27%, 15% and 11% of total product sales revenue, respectively, while EDRAM product sales accounted for 73%, 85% and 89%, respectively, for the same periods. During these periods, product sales revenue accounted for approximately 53%, 95% and 71%, respectively, of total revenues, the remainder of which were generated principally from license and development fees, royalties and customer-sponsored research and development revenue. As a result of the Company's limited revenues as compared to its substantial ongoing product research and development costs and high manufacturing costs for certain of its products, the Company has incurred losses on a consolidated basis in each fiscal year since its inception and has required substantial capital infusions in the form of debt and equity financing. Page-27 The Company has entered into development and/or licensing arrangements with several major semiconductor manufacturers, namely Hitachi, Rohm, Toshiba, Fujitsu, IBM and Infineon to advance the development of both its FRAM products and EDRAM products and to provide the Company with access to advanced semiconductor manufacturing processes and capacity for such products. In December 1996, the Company also entered into a license agreement with Samsung, although such arrangement does not include any development activities between the Company and Samsung or the availability of manufacturing capacity to the Company from Samsung. In addition to these licensing and/or development arrangements, in December 1997, the Company entered into a FRAM development agreement with Asahi which does not currently include a license to the Company's FRAM technology. In March 1999, the Company entered into a two year joint development agreement with Fujitsu to pursue the development of advanced FRAM manufacturing processes. This agreement provided the Company with research and development funding and wafer fabrication processing equipment supplied by Fujitsu. RESULTS OF OPERATIONS REVENUES. In 1999, product sales revenues totaled $13.1 million a decrease of approximately 25% from 1998. Product revenues consisted of $3.5 million of FRAM products and $9.6 million of EDRAM products. This is compared to product sales revenues during 1998 of $17.6 million from the sale of $2.6 million of FRAM products and $15.0 million of EDRAM products. The decrease in product sales revenue in 1999 as compared with 1998 resulted primarily from a decrease in the volume of EDRAM 4-megabit products ordered and shipped to new and existing customers. The Company believes that the downward trend in 4-megabit EDRAM product revenues is a result of fluctuations in demand from a limited number of 4-megabit EDRAM customers. Although the trend in 4-megabit EDRAM revenues has been down during 1999, the Company still has substantial demand for the product and such demand is expected to continue for at least 2 more years. FRAM product revenues increased 37% from the prior year primarily as a result of increased availability of FRAM products from one of the Company's FRAM foundry manufacturing sources and from renewed sales and marketing activities resulting from the increased availability. The Company was able to maintain average selling prices on its products during 1999 despite price declines in competing products during the year. Product sales for 1999 consisted of 4-kilobit, 16-kilobit and RFID FRAM products and 4-megabit and the recently introduced 16-megabit EDRAM products. In 1998, product sales revenues increased by approximately 21% over product sales revenues in 1997 to a total of $17.6 million, consisting of sales of $2.6 million of FRAM products and $15.0 million of EDRAM products, compared to total product sales revenues during 1997 of $14.6 million from the sale of $1.6 million of FRAM products and $13.0 million of EDRAM products. The increase in product sales revenue in 1998 as compared with 1997 resulted primarily from an increase in the volume of EDRAM products shipped to new and existing customers, primarily in the communications sector. The increase in FRAM product revenues during 1998 resulted from the first availability of FRAM products manufactured by one of the Company's foundry partners. Page-28 The Company recognized $5.2 million in license and development fee revenue during 1999. In 1998, the Company did not recognize any license and development fee revenue. In 1997, the Company recognized license and development fee revenue of $5.8 million. 1999 license and development fee revenue is primarily attributable to the achievement of contractual milestones for existing licensees and development partners. The Company also licensed EDRAM technology to NEC during 1999 pursuant to the settlement of the Company's patent infringement litigation with NEC. The Company believes that its lack of license fee revenues during 1998 were driven primarily by the Asian financial crisis and the overall semiconductor industry downturn experienced during the year. Further, the Company and its alliance partners did not reach any contractual milestones during the year to allow for the recognition of any milestone licensing revenue pursuant to the terms of existing licensing agreements. The Company's license fee revenues during 1997 resulted from the achievement of milestones pursuant to an existing license arrangement with Fujitsu and from the Company entering into a new FRAM development agreement with Asahi. During 1999, the Company recognized royalty revenues of $1.5 million compared with no such royalty revenue recorded in 1998 and 1997. The $1.5 million nonrefundable payment was received under a FRAM licensing agreement with an existing licensee. The payment was consideration for a direct licensing right to use Ramtron intellectual property in the design, manufacture and sale of RF/ID products. The Company enters into customer-sponsored research and development activities primarily as a means to further the development of its technology with certain strategic partners, customers or potential future technology licensees. Revenues from such activities were $5,022,000, $944,000 and $132,000 in 1999, 1998 and 1997, respectively. Costs related to such activities were $4,880,000, $826,000 and $118,000 in 1999, 1998 and 1997, respectively. Increases in customer-sponsored research and development activities during 1999 are primarily the result of entering into an advanced FRAM manufacturing process development agreement with Fujitsu in March 1999. COST OF SALES. In 1999, 1998 and 1997, cost of product sales as a percentage of product revenues were 61%, 59% and 74%, respectively. During 1999 the cost of product sales as a percentage of product revenues remained relatively flat as compared to 1998. The decrease in cost of product sales as a percentage of product revenues in 1998 compared with 1997 resulted primarily from lower costs of manufacturing for the Company's EDRAM products and relatively stable average selling prices of the EDRAM products. The cost of product sales as a percentage of product revenues for the Company's FRAM products were approximately 74% in 1999, 94% in 1998 and 97% in 1997. Cost of product sales as a percentage of product revenues for the Company's FRAM products improved during 1999 resulting primarily from cost reductions achieved through manufacturing the Company's FRAM products at an alliance foundry partner in Japan. Additionally, the Company was able to reduce its Page-29 costs of subcontract product assembly and testing on a per unit basis. Historically, the low manufacturing volume of FRAM products has resulted in higher costs associated with the Company's external packaging and testing services and the CMOS underlayer supply used in internal FRAM manufacturing. Improvements in the cost of product sales as a percentage of product revenues for FRAM products are expected during 2000, resulting primarily from the Company receiving product from the advanced semiconductor manufacturing processes and facilities of the Company's foundry alliances, assuming further successful completion of development and product qualification. As the Company's FRAM product sales increase the Company will be better able to take advantage of volume manufacturing efficiencies. The cost of product sales as a percentage of product revenues for the Company's EDRAM products were approximately 56% in 1999, 53% in 1998, and 71% in 1997. The increase in 1999 is primarily due to lower average selling prices on certain of the Company's 4-megabit EDRAM products. During the latter part of 1999 the Company decided to sell low demand "512K X 8" EDRAM products at significantly discounted prices. The discounted sale of the "512K X 8" EDRAM inventory helped a significant customer lower overall system costs in a price sensitive application. Substantially all of the "512K X 8" EDRAM product was sold during 1999. The Company expects EDRAM cost of product sales as a percentage product revenues to increase during 2000 as the Company introduces new products with initially higher manufacturing costs. As the volume of sales and production increase into 2001 on these products, the Company expects to be able to achieve increasingly lower manufacturing costs and commensurate improvement in product gross margins. PROVISION FOR INVENTORY WRITE-DOWN. During 1999, the Company increased its provision for excess and obsolete inventory by $1.2 million. The Company determined it had excess inventories of a specialty FRAM product built for a selected market segment. Additionally, the Company has determined that certain FRAM products which were manufactured in the Colorado Springs fabrication facility, prior to receiving product from our foundry partners, should be scrapped due to inferior performance attributes as compared to the same product manufactured by our foundry partners. LOSS ON MANUFACTURING CONTRACT. In August 1998, the Company entered into a contract with Cubic Corporation to manufacture, in the Company's Colorado Springs manufacturing facility, a limited number of RFID memory chips using the Company's FRAM memory technology. As of December 31, 1998, the Company determined that the total contract revenue compared with the estimated contract costs of manufacturing this product indicated that a loss in fulfilling the contract would be incurred. The loss resulted from low product manufacturing yields, raw material quality issues and complications in product testing due to the complexity of the chip design. Accordingly, the Company recorded a charge to earnings reflecting the total estimated loss to be incurred in the fulfillment of the contract in the amount of $1,163,000. The manufacturing of this product was completed in March 1999. The loss on manufacturing contract as a percentage of product revenues in 1998 was 7%. Page-30 RESEARCH AND DEVELOPMENT. During 1999 research and development costs (including customer-sponsored research and development) remained relatively flat as compared to 1998 totaling $12.0 million as compared to $11.7 million in 1998. In March 1999, the Company entered into a two year joint development agreement with Fujitsu to pursue development of advanced FRAM manufacturing processes. This agreement provided the Company with research and development funding and wafer fabrication processing equipment supplied by Fujitsu. Funding to Ramtron in 1999 from this agreement totaled $4.0 million. In 1998, research and development expenses (including customer-sponsored research and development) increased to $11.7 from $10.8 million in 1997. The Company incurred substantial increases in research and development expenses during 1998 for product development of its 16-megabit ESDRAM products and for additional future EDRAM products. EDRAM product engineering expenses associated with the 16-megabit ESDRAM development increased significantly during 1998 to $1.6 million from $.7 million in 1997. Such increases in product engineering expenses included 16-megabit ESDRAM development costs for photomasks, engineering wafers and test probe cards totaling approximately $1.0 million. Further, EDRAM engineering design expenses increased by 63% or roughly $.5 million to $1.3 million during 1998 as compared to $.8 million during 1997 to support the 16-megabit ESDRAM development and future EDRAM product development. These increases in expenses for new EDRAM product development were offset by decreases in FRAM research and development activities that utilized the Company's Colorado Springs fabrication facility. During the last five months of 1998, the Company's Colorado Springs fabrication facility was used almost entirely for the fulfillment of an RFID manufacturing contract entered into in August 1998, rather than for FRAM technology development purposes. Certain of the resources that would typically be used in FRAM research and development activities were, therefore, used in fulfilling the RFID manufacturing contract and are included in cost of sales amounts and a recorded $1.2 million loss on manufacturing contract recorded in 1998. The Company anticipates that overall research and development costs will increase during 2000 and in future years as new FRAM and EDRAM products and technologies are developed. SALES, GENERAL AND ADMINISTRATIVE. 1999 sales, general and administrative expense("SG&A") increased $1.3 million to $9.5 million as compared to $8.2 million in 1998. These increases are primarily attributable to legal and financial advisory fees incurred in connection with the Company's preferred stock restructuring efforts and from increased in foreign withholding taxes related to license and development fee revenues recognized during 1999. In 1998, SG&A expenses increased by $168,000 (2%) to $8.2 million from $8.0 million in 1997. The primary increases in SG&A expenses during 1998 when compared to 1997 were for commissions on increased product revenues and for financial advisory and legal costs incurred associated with legal and restructuring issues surrounding the Company's Convertible Preferred Stock. These increases were partially offset by decreases in foreign withholding taxes during 1998, as there were no licensing fee revenues recorded during 1998. The Company recorded $375,000 in foreign withholding taxes from licensing activities during 1997. The Company believes that SG&A expenses for 2000 will remain relatively flat as compared to 1999. The Company expects that increases in commissions as a result of increased product sales will be partially offset by reduced legal and financial advisory fees in 2000. Page-31 COMMON STOCK PRICE ADJUSTMENT. In December 1997, the Company issued and sold in a private placement to certain investment funds ("Holders") 160,000 shares of common stock at an issue price of $24.65 per share. The purchase agreement for such common stock provided that, if during the twelve-month period following the closing of the transaction, the Company sold any shares of common stock for an issue price lower than the purchase price, the purchase price per share of the common stock would be adjusted downward to equal the lower issue price. Any adjustment would be effected by issuing additional shares of common stock to the Holders. An issuance of common stock for an issue price lower than the purchase price occurred during September and October 1998 as a result of preferred stock conversions. The lowest issue price from these conversions was $1.15 per share, which then triggered a price adjustment pursuant to the terms of the Common Stock Purchase Agreement. The Holders are not required to accept, by way of this adjustment, a number of common shares such that the total number of common shares held by the Holders would exceed 4.99% of the total outstanding common stock of the Company. The Company would be required to effect the 4.99% adjustment by cash refund. As of December 31, 1998, the additional shares and cash refund to effect the limitation adjustment was 466,338 shares and $3,223,712, respectively. Accordingly, the Company's obligation to deliver cash to the Holders was recorded as a charge to earnings during 1998. On July 20, 1999 the Company's shareholders approved a restructuring plan that created a one year unsecured promissory notes for the cash refund amount of $3,223,712 at 8% interest maturing July 31, 2000. In accordance with the provisions of the promissory notes, on February 29, 2000 the Holders elected to convert the outstanding principal and accrued and unpaid interest of approximately $3.4 million into common stock of the Company at a conversion rate of $5.00 per share. Accordingly, 675,547 common shares were issued to the Holders. INTEREST EXPENSE. Related party interest expense in 1999 increased $245,000 totaling $914,000 primarily related to non-cash amortization of a note payable discount recorded during 1999 for the valuation of stock warrants issued in connection with the amendment of the Company's credit facility with the National Electrical Benefit Fund. In 1998, related party interest expense increased by approximately 73% or $283,000 over 1997 resulting from the expensing of interest on $2.9 million of additional borrowings, which occurred during the last four months of 1997 under the Company's credit facility with the National Electrical Benefit Fund. There were no additional borrowings under the credit facility during 1998 and 1999. OTHER INCOME (EXPENSE). In 1999, the Company recorded interest income of approximately $.3 million as compared to $.8 million in 1998. The Company also recognized income of approximately $.2 million related to the reclaim of precious metal targets during 1999. In 1997, the Company recognized income associated with the collection of a $.5 million receivable written off in the previous year. Page-32 IMPUTED DIVIDENDS/ACCRETION OF DISCOUNT ON CONVERTIBLE PREFERRED STOCK. Imputed dividend and accretion of discount results from certain provisions of the Company's Preferred Stock, whereby a dividend is to be paid to the holders of the Preferred stock in additional shares of Preferred Stock, and the conversion price of the Preferred Stock is determined by applying a discount, which increases over a fourteen month period from 7% to a maximum of 15% by May 1999. The discount computed at issuance of $3,075,000 is recorded as a reduction of preferred stock and an increase to additional paid-in-capital. The discount is being recognized ratably as a non-cash deemed dividend over the applicable fourteen month period. In 1999, the Company recorded preferred stock non-cash imputed dividends and accretion of discount totaling $.9 million as compared to $2.7 million for 1998. The decrease in 1999 is primarily attributable to fewer preferred shares remaining outstanding during the year as a result of conversions of preferred stock during September and October 1998, completion the amortization period in May 1999 and restructuring of the Company's preferred stock in August 1999. During the year ended December 31, 1999, the Company recorded preferred stock non-cash imputed dividends and accretion of discount totaling $.4 million and $.5 million, respectively, as compared to $.8 million and $1.9 million in 1998, respectively. PREFERRED STOCK SETTLEMENT. On July 20, 1999, the Company's common stockholders approved the restructuring of the terms of the Company's Preferred Stock and on August 6, 1999, the Company entered into an agreement with the holders of a majority of the outstanding Preferred Stock to restate the terms of the Preferred Stock. In accordance with the restated terms of the Preferred Stock, holders thereof had until the close of business on August 16, 1999, to elect (i) to continue to own shares of Preferred Stock, (ii) to exchange shares of Preferred Stock, including accrued dividends, for cash in the amount per Preferred Stock share equal to 50% of the liquidation value thereof, or (iii) to exchange the shares of Preferred Stock, including accrued dividends, for shares of the Company's Common Stock at an exchange ratio of $3.75 liquidation value of Series A Preferred per share of Common Stock. Effective as of August 16, 1999, of the 8,878 shares of Preferred Stock outstanding on August 6, 1999, 4,204 shares plus accrued dividends were retired and canceled in exchange for the payment in the aggregate of $2,290,431 to the former holders thereof; 3,802 shares of Preferred Stock were exchanged for 1,104,746 shares of Common Stock; and 872 shares of Preferred Stock with restated terms remained outstanding. The restated terms of the remaining Preferred Stock include (i) a fixed conversion at $5.00 per share; (ii) a three-year term expiring on July 31, 2002; (iii) an adjusted dividend rate of 11% per annum (subject to possible future adjustments); and (iv) a mandatory redemption feature at the date of maturity. Page-33 For the year ended December 31, 1999, the Company recorded a gain on the settlement of the Preferred Stock of $5.0 million. The $5.0 million gain on the settlement of the Preferred Stock included a $676,000 gain recorded during April 1999 from an earlier Preferred Stock settlement. The remaining balance of the $5.0 million gain was determined on August 16, 1999 pursuant to the decisions of holders of the Preferred Stock regarding their restructuring options as described above. The gain was determined on that date by comparing the fair value of the new instrument (i.e., cash, common stock and/or restated Preferred Stock) with the recorded value of the exchanged Preferred Stock (including dividends), less restructure costs, with the difference being the recorded gain, which was recorded as an increase to additional paid-in capital. EXPECTED FUTURE RESULTS OF OPERATIONS The Company is continuing its efforts to improve and increase commercial production and sales of its EDRAM products and low-density FRAM products, decrease the cost of producing such products and develop and commercialize new high-density and low-density FRAM products and enhancements to its existing FRAM and EDRAM products. The Company expects revenues will continue to be sporadic in the foreseeable future until the Company's products gain wider market acceptance, new license arrangements are entered into and milestones under the Company's existing and any new license and development agreements are achieved. The Company's ability to significantly increase product sales and achieve profitability will depend on several factors, including: (i) the completion of the development and qualification for manufacturing of the Company's high- density FRAM products; (ii) the completion of the development and qualification for manufacturing of the Company's new EDRAM products; (iii) wider customer acceptance of its EDRAM products and low-density FRAM products; (iv) market acceptance of new high and low-density FRAM products which may be developed; (v) the Company's ability to manufacture its products on a cost-effective and timely basis through alliance foundry operations and third-party foundry sources; (vi) the availability and related cost of future financing; and (vii) factors not directly related to the Company, including market conditions, competition, technological progression, product obsolescence and the changing needs of potential customers and the semiconductor industry in general. To gain access to advanced CMOS manufacturing processes and facilities, Ramtron has entered into manufacturing alliances and licensing agreements for FRAM products with companies having or constructing advanced memory products manufacturing capability, including Rohm, Hitachi, Toshiba and Fujitsu. Since the purchase or construction of an advanced manufacturing facility capable of mass producing memory devices would require a capital outlay well beyond the Company's current capital resources, the Company believes that the most suitable alternative is this strategic-alliance approach, which the Company believes will enable it to develop, manufacture and sell FRAM products more rapidly and cost effectively than any other available alternative. Ramtron's intention is to utilize current and future alliance relationships as foundry sources for FRAM products in order to provide the Company with low-cost, high- volume, high-quality FRAM products for resale to customers. Page-34 The Company intends to produce EDRAM's through strategic alliances and foundry arrangements with major semiconductor companies and to expand the market for EDRAM's by making EDRAM products available from multiple sources. This approach avoids the high capital costs associated with DRAM manufacturing that would have otherwise been incurred by the Company if it had chosen to manufacture these products with Company-provided resources. As a result of industry wide oversupply of semiconductor memory products, significant price decreases within the industry have occurred during the past several years. Historically, the semiconductor memory industry has experienced declining average selling prices, and the Company believes these declines will continue to affect the Company. Accordingly, the Company's ability to increase revenues and margins on its products depends on the Company's ability to increase unit sales volumes and to introduce new products with higher margins or further reduce its manufacturing costs to offset the declines in average selling prices. Absent these actions, declining average selling prices would have an adverse effect on the Company's gross product margins and the overall financial performance of the Company. There can be no assurance that the Company will be able to increase unit sales volumes, introduce new, higher margin products or reduce its manufacturing costs in the future. YEAR 2000. The Company utilizes software and related technologies throughout its business and relies on suppliers of services and materials that will be affected by the date change in the year 2000 or prior. The Year 2000 issue exists because many computer systems and applications currently use two-digit fields to designate a year. As the century date change occurs, date sensitive systems will recognize the year 2000 as 1900, or not at all. This inability to recognize the year 2000 may cause systems to process critical financial and operational information incorrectly. The Company has initiated a Year 2000 project to address the Year 2000 issues as they relate to the Company. Throughout 1999 the Company maintained an active Year 2000 program to update and replace software and hardware that it determined would be effected by the date change in the year 2000 and to monitor the remediation progress of all critical suppliers . All remediation efforts were completed prior to December 1999. The Company did not experience any material interruption of business as a result of year 2000 date changes. LIQUIDITY AND CAPITAL RESOURCES Since its inception, because revenues generated from operations and licensing have been insufficient to fund operations, the Company has depended for funding principally on its stockholders, and in particular from 1989 until February 1995 on Oren L. Benton ("Benton"), a former principal stockholder and director and the former Chief Executive Officer of the Company, and from 1989 through 1997 on the National Electrical Benefit Fund (the "Fund"), a principal stockholder of the Company. Benton and the Fund financed the Company's cash flow requirements through equity investments and loans, most of which were subsequently converted into equity. Page-35 The Company also raised funds through the private placement of convertible preferred stock in 1993, all of which has been converted into common stock. In 1995, the Company entered into a $12 million loan facility, bearing interest at 12%, between the Company and the Fund. During 1999, the Company and the Fund agreed to amend the terms of the credit facility extending the maturity date to March 15, 2002, decreasing the interest rate to 8% and requiring the Company maintain certain financial ratios, as defined in the loan document. The Company's borrowings under the Fund's credit facility, including outstanding principal and accrued interest, totaled approximately $7.2 million as of December 31, 1999. No additional borrowings are available to the Company under the Amended Credit Facility. In December 1997, the Company sold approximately $4.0 million of common stock, and in February 1998, the Company sold approximately $17.4 million of Series A Convertible Preferred Stock, to certain institutional investors in separate private placements in order to obtain funds for working capital and general corporate purposes. The Company sold approximately $5.4 million of common stock and common stock warrants in a private placement in December 1999. Cash and cash equivalents decreased by $4.6 million in 1999 to $10.6 million. The Company generated $5.2 million (net of expenses) from the sale of common stock during 1999, which was offset by the use of $3.4 million in the preferred stock restructuring and $2.7 million to fund operating activities. The Company also used $3.2 million in 1999 for investing activities, primarily for costs associated with the defense of the Company's proprietary EDRAM patent position. Receivables increased by $1.0 million in 1999 (135%) from $.7 million at the end of 1998 to $1.7 million at the end of 1999. The increase in the receivables balance is primarily due to increased customer product deliveries in December 1999 as compared to December 1998. Inventories decreased by 21% in 1999 from $5.3 million at the end of 1998 to $4.2 million at the end of 1999. Inventory levels decreased as of the end of 1999 as the Company decreased its production of 4-megabit EDRAM products to correlate with 4-megabit EDRAM sales volumes. The Company also increased its reserves for excess and obsolete inventories $1.2 million during 1999 when it determined there were excess inventories of a specialty FRAM product built for a selected market segment. Additionally, the Company determined that certain FRAM products which were manufactured in the Colorado Springs fabrication facility, prior to receiving product from our foundry partners, should be scrapped due to inferior performance attributes as compared to the same product manufactured by our foundry partners. Accounts payable and accrued liabilities decreased slightly on a year-over-year basis from $4.6 million at the end of 1998 to $4.1 million at the end of 1999. This decrease resulted primarily from work in process decreases during the fourth quarter of 1999 as compared to the same period in 1998. Such decreases are the result of reduced manufacturing of 4-megabit EDRAM products to correlate with 4-megabit EDRAM sales volumes. Page-36 During 1999, the Company invested $2.9 million in intellectual property activities, due primarily to legal costs associated with the defense of the Company's proprietary EDRAM patent position. Expenditures for intellectual property purposes are expected to decrease during 2000 as a result of settling the NEC patent infringement proceeding in November 1999. Equipment and plant expenditures are expected to be minimal during 2000. During 1999, the Company received approximately $5.2 million in cash relating to FRAM and EDRAM licensing agreements for milestone achievements on existing licensing agreements and for a new license agreement. Payments pursuant to existing licensing agreements and new licensing agreements are expected to create additional cash flows during 2000 and 2001, subject to the fulfillment of certain milestone conditions with existing license agreements. An increase in product sales activity and customer-sponsored research and development revenues is anticipated in 2000. Additionally, the Company expects to continue to receive cash inflows for research and development support provided by Fujitsu throughout 2000. Based on the Company's capital resources as of December 31, 1999 and the expected operating costs and cash flows from product sales and licensing revenues, the Company expects to be able to fund its operations through year- end 2000. The Company is currently involved in a patent interference proceeding (see "Patent Interference Proceeding"). If the Company is ultimately unsuccessful in these proceedings, there would be no retroactive cash payment requirements from the Company to the junior party as a result of such an adverse decision. While the Company cannot accurately estimate the financial effects of such a result, the Company believes that it could, depending on when a final non-appealable judgment is ultimately rendered, materially adversely affect the Company's FRAM product business and operating results and, thus, have a materially adverse effect on the Company's financial condition as a whole. In view of the Company's expected future working capital requirements in connection with the design, manufacturing and sale of its FRAM and EDRAM products, the Company's projected continuing research and development expenditures, other operating expenditures and the results of pending patent litigation, the Company may be required to seek additional equity or debt financing before or soon after year-end 2000. There is no assurance, however, that the Company will be able to obtain such financing on terms acceptable to the Company, or at all. Any issuance of common or preferred stock to obtain additional funding would result in further dilution of existing stockholders' interests in Ramtron. The inability to obtain additional financing when needed would have a material adverse effect on our business, financial condition and operating results and could adversely affect the Company's ability to continue our business operations. Page-37 Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk represents the risk of loss that may impact the financial positions, results of operations or cash flows of the Company due to adverse changes in financial and commodity market prices and rates. The Company is exposed to market risk in the areas of changes in United States interest rates and changes in foreign currency exchange rates as measured against the United States dollar. These exposures are directly related to its normal operating activities. The Company currently has no derivative financial instruments. Interest payable on the Company's note payable to a related party is fixed, and, therefore, will not effect future earnings or cash flows. The Company manages interest rate risk by investing its excess cash in cash equivalents bearing variable interest rates, which are tied to various market indices. The Company does not believe that near-term changes in interest rates will result in a material effect on future earnings, fair values or cash flows of the Company. The net effect of a 10% change in interest rates on outstanding cash and cash equivalents and debt at December 31, 1999 would have less than an $100,000 effect on the fair value of the debt and earnings or cash flows. The Company has a wholly owned subsidiary located in Japan. The operating costs of this subsidiary are denominated in Japanese Yen, thereby creating exposures to exchange rate changes. To date, this subsidiary has had only limited operations and is expected to continue to have limited operations in the foreseeable future, and, therefore, the Company does not believe any changes in exchange rates will have a material effect on future earnings, fair values or cash flows of the Company. The Company also purchases certain of its FRAM products from foundry suppliers in Japan with such costs denominated in Japanese Yen, thereby creating exposures to changes in exchange rates. The changes in the Japan/U.S. exchange rate may positively or negatively effect the Company's sales, gross margins and retained earnings. The Company does not believe that reasonably possible near-term changes in exchange rates will result in a material effect on future earnings, fair values or cash flows of the Company, and therefore, the Company has chosen not to enter into foreign currency hedging instruments. There can be no assurance that such an approach will be successful, especially in the event of a significant and sudden change in Japanese currency valuation. Average selling prices of the Company's products have not increased significantly as a result of inflation during the past several years, primarily due to intense competition within the semiconductor industry. The effect of inflation on the Company's costs of production has been minimized through improvements in production efficiencies. The Company anticipates that these factors will continue to minimize the effects of any foreseeable inflation and other price pressures within the industry and markets in which the Company participates. Page-38 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial Statements: Page Report of Independent Public Accountants F-1 Consolidated Balance Sheets as of December 31, 1999 and 1998 F-2 Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997 F-3 Consolidated Statements of Cash Flows for the years ended December 31, 1999, 1998 and 1997 F-4 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1999, 1998 and 1997 F-5 Notes to Consolidated Financial Statements F-6 to F-26 Financial Statement Schedules: Schedule II: Valuation and Qualifying Accounts F-27 Page-39 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To Ramtron International Corporation: We have audited the accompanying consolidated balance sheets of Ramtron International Corporation (a Delaware corporation) and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1999. These financial statements and the schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ramtron International Corporation and subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The schedule listed in the index of financial statements is presented for purposes of complying with the Securities and Exchange Commission's rules and is not a required part of the basic financial statements. This schedule has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /S/ Arthur Andersen LLP Denver, Colorado, February 4, 2000. Page F-1 RAMTRON INTERNATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS December 31, 1999 and 1998 (in thousands, except par value and per share amounts) ------------- 1999 1998 -------- -------- ASSETS Current assets: Cash and cash equivalents $10,601 $15,237 Accounts receivable, less allowances of $347 and $134, respectively 1,703 726 Inventories 4,174 5,304 Prepaid expenses 84 170 Other current assets 100 94 --------- --------- Total current assets 16,662 21,531 Property, plant and equipment, net 6,064 7,158 Intangible assets, net 6,654 4,658 --------- --------- $29,380 $33,347 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $3,066 $ 2,535 Accrued liabilities 985 2,089 License rights -- 550 Deferred revenue 1,761 760 Common stock price adjustment -- 3,224 Promissory note and accrued interest, DFA 3,335 -- Promissory note and accrued interest, the Fund 230 7,127 --------- --------- Total current liabilities 9,377 16,285 Promissory note, the Fund 5,766 -- --------- --------- Total liabilities 15,143 16,285 --------- --------- Commitments and contingencies (Notes 5 and 13) Redeemable preferred stock, $.01 par value, 10,000 shares authorized: 1 and no shares issued and out- standing, respectively, entitled to $1,000 per share plus accrued and unpaid dividends in liquidation 914 -- --------- --------- Stockholders' equity: Convertible preferred stock, $.01 par value, 10,000 shares authorized: no and 10 shares issued and outstanding, respectively; entitled to $1,000 per share plus accrued and unpaid dividends in liquidation -- 8,966 Common stock, $.01 par value, 50,000 and 75,000 shares authorized: 14,609 and 12,085 issued and outstanding, respectively 146 121 Common stock warrants 1,409 -- Deferred compensation (2,423) -- Additional paid-in capital 179,204 165,916 Accumulated deficit (165,013) (157,941) --------- --------- Total stockholders' equity 13,323 17,062 --------- --------- $29,380 $33,347 ========= ========= See accompanying notes. Page F-2 RAMTRON INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended December 31, 1999, 1998 and 1997 (in thousands, except per share amounts) ------------- 1999 1998 1997 -------- -------- -------- Revenue: Product sales $ 13,148 $ 17,610 $14,613 License and development fees 5,200 -- 5,750 Royalties 1,501 -- -- Customer-sponsored research and development 5,022 944 132 --------- --------- --------- 24,871 18,554 20,495 --------- --------- --------- Costs and expenses: Cost of product sales 7,978 10,452 10,750 Provision for inventory write-off 1,178 -- -- Research and development 7,170 10,898 10,723 Customer-sponsored research and development 4,880 826 118 Sales, general and administrative 9,490 8,200 8,032 Loss on manufacturing contract -- 1,163 -- --------- --------- --------- 30,696 31,539 29,623 --------- --------- --------- Operating loss (5,825) (12,985) (9,128) Interest expense, related party (914) (669) (386) Other income 541 447 657 Common stock price adjustment -- (3,224) -- --------- --------- --------- Net loss $(6,198) $(16,431) $(8,857) ========= ========= ========= Loss per common share: Net loss $(6,198) $(16,431) $(8,857) Imputed dividends on convertible preferred stock (396) (779) -- Accretion of discount on convertible preferred stock (488) (1,931) -- Gain on preferred stock settlement 5,047 -- -- --------- --------- --------- Net loss applicable to common shares $(2,035) $(19,141) $(8,857) ========= ========= ========= Net loss per share - basic and diluted $(0.16) $(2.23) $(1.19) ========= ========= ========= Weighted average shares outstanding 12,815 8,572 7,412 ========= ========= ========= See accompanying notes. Page F-3 RAMTRON INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 1999, 1998 and 1997 (in thousands) -------------- 1999 1998 1997 -------- --------- -------- Cash flows from operating activities: Net loss $(6,198) $(16,431) $(8,857) Adjustments used to reconcile net loss to net cash used in operating activities: Stock based compensation 155 146 -- Depreciation and amortization 2,290 2,473 2,597 Amortization of debt discount 176 -- -- Common stock price adjustment -- 3,224 -- Loss on manufacturing contract -- 1,163 -- Provision for inventory write-off 1,178 -- -- Other -- -- (485) Changes in assets and liabilities: Accounts receivable (977) 4,036 2,439 Inventories (48) 1,843 196 Prepaid expenses 86 (59) 392 Accounts payable and accrued liabilities (573) (1,505) 1,160 Accrued interest, related party 214 670 386 Deferred revenue 1,001 (235) 132 Other -- 30 65 -------- --------- -------- Net cash used in operating activities (2,696) (4,645) (1,975) -------- --------- -------- Cash flows from investing activities: Purchase of property, plant and equipment (316) (824) (1,160) Intellectual property (2,951) (748) (346) Proceeds from sale of assets 75 -- 5 -------- --------- -------- Net cash used in investing activities (3,192) (1,572) (1,501) -------- --------- -------- Cash flows from financing activities: Proceeds from notes payable, related party -- -- 2,900 Payments on license rights payable (550) (550) (550) Issuance of capital stock, net of expenses 5,176 15,811 4,137 Preferred stock settlement (3,374) -- -- -------- --------- -------- Net cash provided by financing activities 1,252 15,261 6,487 -------- --------- -------- Net increase (decrease) in cash and cash equivalents (4,636) 9,044 3,011 Cash and cash equivalents, beginning of year 15,237 6,193 3,182 -------- --------- -------- Cash and cash equivalents, end of year $10,601 $15,237 $ 6,193 ======== ========= ======== See accompanying notes. Page F-4
RAMTRON INTERNATIONAL CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the years ended December 31, 1999, 1998 and 1997 (in thousands, except par value amounts) -------------- Convertible Preferred Stock Common Stock ($.01) Par Value ($.01) Par Value Additional Total ------------------ ---------------- Paid-in Accumulated Stock Deferred Stockholders' Shares Amount Shares Amount Capital Deficit Warrants Compensation Equity ------ ------ ------ ------ ---------- ----------- -------- ------------ ------------- Balances, December 31, 1996 -- $ -- 7,399 $ 74 $152,126 $(129,928) $ -- $ -- $22,272 Issuance of stock: Exercise of options -- -- 25 -- 583 -- -- -- 583 Sale of common stock -- -- 160 2 3,942 -- -- -- 3,944 Stock issuance costs -- -- -- -- (391) -- -- -- (391) Other -- -- -- -- -- (15) -- -- (15) Net loss for year ended December 31, 1997 -- -- -- -- -- (8,857) -- -- (8,857) ------------------------------------------------------------------------------------------------- Balances, December 31, 1997 -- -- 7,584 76 156,260 (138,800) -- -- 17,536 Issuance of stock: Stock based compensation -- -- 6 -- 146 -- -- -- 146 Exercise of options -- -- -- -- 4 -- -- -- 4 Sale of preferred stock 17 17,425 -- -- -- -- -- -- 17,425 Preferred stock discount -- (3,075) -- -- 3,075 -- -- -- -- Preferred stock dividends -- 779 -- -- -- (779) -- -- -- Preferred stock discount accretion -- 1,931 -- -- -- (1,931) -- -- -- Preferred stock conversions (7) (6,476) 4,495 45 6,431 -- -- -- -- Stock issuance costs -- (1,618) -- -- -- -- -- -- (1,618) Net loss for year ended December 31, 1998 -- -- -- -- -- (16,431) -- -- (16,431) ------------------------------------------------------------------------------------------------- Balances, December 31, 1998 10 8,966 12,085 121 165,916 (157,941) -- -- 17,062 Issuance of stock: Preferred stock discount accretion -- 488 -- -- -- (488) -- -- -- Preferred stock dividend -- 360 -- -- -- (360) -- -- -- Settlement of preferred stock (9) (8,945) 1,571 16 5,555 -- -- -- (3,374) Conversion of preferred stock to redeemable preferred stock (1) (869) -- -- -- -- -- -- (869) Redeemable preferred stock discount accretion -- -- -- -- (12) -- -- -- (12) Redeemable preferred stock dividend -- -- -- -- -- (36) -- -- (36) Sale of common stock -- -- 953 9 5,380 -- -- -- 5,389 Stock issuance costs -- -- -- -- (213) -- -- -- (213) Stock based compensation -- -- -- -- 2,578 -- -- (2,578) -- Amortization of stock based compensation -- -- -- -- -- -- -- 155 155 Price adjustment and issuance of common stock warrants -- -- -- -- -- -- 1,409 -- 1,409 Other -- -- -- -- -- 10 -- -- 10 Net loss for year ended December 31, 1999 -- -- -- -- -- (6,198) -- -- (6,198) ----------------------------------------------------------------------------------------------- Balances, December 31, 1999 -- $ -- 14,609 $146 $179,204 $(165,013) $1,409 $(2,423) $13,323 =============================================================================================== See accompanying notes.
Page F-5 RAMTRON INTERNATIONAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 1999, 1998 and 1997 ------------------------ 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: DESCRIPTION OF BUSINESS. Ramtron International Corporation (the "Company") designs, develops, manufactures and markets high-performance specialty semiconductor memory devices. The Company has two product lines, ferroelectric nonvolatile random access memory ("FRAM" (registered trademark)) products and high-speed DRAM (dynamic random access memory) products, called Enhanced-DRAM ("EDRAM" (registered trademark)) products. The Company's revenues are derived primarily from the sale of its FRAM and EDRAM products and from license and development arrangements entered into with a limited number of established semiconductor manufacturers and involving the development of specific applications of the Company's technologies. Product sales (primarily EDRAM) have been made to various customers for use in a variety of applications including consumer electronics, telecommunications, accelerator boards, disk controllers and industrial control devices. During 1999, 1998 and 1997, the Company's revenues have been derived from several customers within these industries (Note 11). USE OF ESTIMATES. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. PRINCIPLES OF CONSOLIDATION. The accompanying financial statements include the consolidation of accounts for the Company's wholly owned subsidiaries, Enhanced Memory Systems, Inc. ("EMS"), which was created in May 1995 and Ramtron Kabushiki Kaisha ("Ramtron K.K."), which was created in July 1996. The Company formed the wholly owned subsidiary, EMS, to operate its EDRAM business. The Company formed Ramtron K.K., to act in a sales and marketing role within Japan for the Company's products and to function as a liaison between the Company and its Japan alliance partners. To date, Ramtron K.K. has had limited operations. All material inter-company accounts and transactions have been eliminated in consolidation. REVENUE RECOGNITION. Revenue from product sales to direct customers is recognized upon shipment. The Company defers recognition of sales to distributors, that are given rights of return and price protection by the Company until the distributors have resold the products. Revenue from licensing and technology development programs, which are nonrefundable and for which no significant future obligations exist is recognized when the license is signed. Revenue from licensing and technology development programs, which are refundable or for which future obligations exist is recognized when the Company has completed its obligations under the terms of the agreements. Revenue from royalties is recognized upon the shipment of product from the Company's technology license partners to direct customers. Certain research and development activities are conducted for third parties and such revenue is recognized as the services are performed. Page F-6 INVENTORIES. Inventories are stated at the lower of cost or market value. The first-in, first-out method of costing inventories is used. PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are stated at cost and depreciation and amortization are provided using the straight-line method over the estimated useful lives of the respective assets. Maintenance and repairs are expensed as incurred and improvements are capitalized. The cost of assets sold or retired and the related accumulated depreciation or amortization are removed from the accounts and the resulting gain or loss is reflected in the consolidated statements of operations in the period in which such sale or disposition occurs. INTANGIBLE ASSETS. Intangible assets are recorded at cost and are amortized over their estimated useful lives using the straight-line method. The amounts capitalized for patents include the cost of acquiring and defending the patent. INCOME TAXES. The Company recognizes deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets, liabilities and carryovers. The Company recognizes deferred tax assets for the expected future effects of all deductible temporary differences, loss carryovers and tax credit carryovers. Deferred tax assets are then reduced, if deemed necessary, by a valuation allowance for the amount of any tax benefits which, more likely than not, based on current circumstances, are not expected to be realized (Note 10). CASH AND CASH EQUIVALENTS. For purposes of the consolidated statements of cash flows, the Company considers all cash and highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. NET LOSS PER SHARE. The Company calculates its loss per share pursuant to Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"), Earnings Per Share. Under SFAS No. 128, basic earnings per share is computed by dividing reported earnings available to common stockholders by weighted average shares outstanding. Diluted earnings per share reflects the potential dilution assuming the issuance of common shares for all dilutive potential common shares outstanding during the period. As a result of the Company's net losses, all potentially dilutive securities including warrants and stock options, would be anti-dilutive and thus, are excluded from diluted earnings per share. LONG-LIVED ASSETS. Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Any long-lived assets and certain identifiable intangibles to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. FAIR VALUE OF FINANCIAL INSTRUMENTS. The Company's financial instruments consist of cash and cash equivalents, short-term trade receivables and payables and related party promissory notes. The carrying values of cash and cash equivalents, and short-term trade receivables and payables approximate fair value due to their short-term nature. The fair value of the related party promissory notes is estimated on current rates available for similar debt with similar maturities and collateral. The related party promissory notes have a carrying value that is not significantly different than their estimated fair value. Page F-7 NEW ACCOUNTING STANDARDS. In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133, as amended, is effective for fiscal years beginning after June 15, 2000. SFAS No. 133 establishes accounting and reporting standards requiring that every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. It also requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative's gains and losses to offset related results on the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. SFAS No. 133 may not be applied retroactively and must be applied to (i) derivative instruments and (ii) certain derivative instruments embedded in hybrid contracts. With respect to hybrid instruments, a company may elect to apply SFAS No. 133, as amended, to (i) all hybrid contracts, (ii) only those hybrid instruments that were issued, acquired, or substantively modified after December 31, 1997, or (iii) only those hybrid instruments that were issued, acquired or substantively modified after December 31, 1998. Management is currently evaluating the effect SFAS No. 133 will have on the Company's financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition" ("SAB No. 101"), which provides guidance on the recognition, presentation and disclosure of revenue in financial statements. SAB No. 101 is effective for the second quarter of 2000. SAB No. 101 is not expected to have a material effect on the Company's financial position or results of operations. RECLASSIFICATIONS. Certain reclassifications to prior years' financial statements have been made to conform to the current year's presentation. 2. INVENTORIES: Inventories consist of: December 31, ------------------ 1999 1998 ------ ------ (in thousands) Finished goods $2,544 $3,595 Work in process 1,630 1,660 Raw materials -- 49 ------ ------ $4,174 $5,304 ====== ====== Page F-8 3. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment consists of: Estimated December 31, Useful Lives ----------------- (In Years) 1999 1998 ------------ ------- ------- (in thousands) Land -- $ 668 $ 668 Buildings and improvements 18 and 10 8,942 8,942 Equipment 5 13,094 13,738 Office furniture and equipment 5 611 611 ------- ------- 23,315 23,959 Less accumulated depreciation and amortization (17,251) (16,801) ------- ------- $ 6,064 $ 7,158 ======= ======= Depreciation and amortization expense for property, plant and equipment was $1,335,000, $1,665,000 and $1,826,000 for 1999, 1998 and 1997, respectively. Maintenance and repairs expense was $757,000, $842,000 and $823,000 for 1999, 1998 and 1997, respectively. 4. INTANGIBLE ASSETS: Intangible assets consist of: Estimated December 31, Useful Lives --------------- (In Years) 1999 1998 ------------ ------ ------ (in thousands) Patents and trademarks 17 $6,735 $3,784 License rights 5 2,150 2,150 Costs in excess of net assets purchased 17 4,529 4,529 ------ ------ 13,414 10,463 Less accumulated amortization (6,760) (5,805) ------ ------ $6,654 $4,658 ====== ====== In August 1995, the Company entered into a cross license agreement with a third party regarding the use of certain ferroelectric technology in the development and production of ferroelectric integrated circuit memories. The Company paid a technology license fee to the third party as consideration for certain rights received under the cross license agreement. Such license fee is included in intangible assets for the years ending December 31, 1999 and 1998 and is being amortized over the five-year term of the cross license agreement ending in 2000. Page F-9 Amortization expense of intangible assets was $955,000, $783,000 and $771,000 for 1999, 1998 and 1997, respectively. 5. COMMITMENTS: LEASE COMMITMENTS. The Company has commitments under non-cancelable operating leases expiring through 2002 for various equipment. Minimum future annual lease payments under these leases as of December 31, 1999 are as follows: 2000 $ 450,000 2001 407,000 2002 244,000 ---------- $1,101,000 ========== Total rent expense on all operating leases was $535,000, $624,000 and $425,000 for 1999, 1998 and 1997, respectively. EMPLOYMENT AGREEMENTS. The Company has employment agreements with certain employees, which provide for certain payments and continuation of benefits should their employment terminate as defined in the employment agreements. MANUFACTURING ALLIANCES. The Company has entered into third-party manufacturing agreements for the supply of its FRAM and EDRAM products and intends to enter into additional third-party manufacturing agreements for the supply of such products in the future. The Company has relied and will continue to rely on such manufacturing relationships as the primary source of manufacturing for its products. The Company's third-party manufacturing agreements provide only for a call on the manufacturing capacity of the vendors. The product will be supplied to the Company at prices negotiated between the Company and such third-party manufacturers based on current market conditions. The Company does not engage in any take-or-pay agreements with its manufacturing alliances. 6. STOCKHOLDERS' EQUITY: REVERSE STOCK SPLIT. On July 20, 1999, the Company's stockholders approved a one-for-five reverse stock split. Common stock information appearing in the accompanying financial statements and notes have been retroactively adjusted to reflect the effects of the reverse split. PREFERRED STOCK PLACEMENT. In February 1998, the Company issued and sold in a private placement 17,425 shares of Series A Convertible Preferred Stock ("Preferred Stock"), resulting in gross proceeds of approximately $17.4 million. Each share of Preferred Stock was entitled to receive cumulative dividends at the rate of 6% per annum, payable in shares of Preferred Stock. Except for certain exceptions, the holders of the Preferred Stock had no voting Page F-10 rights. The shares of Preferred Stock, including any accrued dividends thereon, would automatically convert into common stock on the fifth anniversary of the date of the original issuance to the extent any shares of Preferred Stock remained outstanding at that time. Until September 1, 1998, the Preferred Stock was convertible at a Conversion Price of $50.00. Thereafter, subject to a maximum conversion price, as defined, the Conversion Price was equal to the lowest trading price of the common stock for the 22-trading days immediately preceding the conversion date, less a discount of 7% (beginning September 1, 1998) and increasing by 1% per month to 15% (on or after May 1, 1999). Each purchaser of the Preferred Stock agreed to trading limitations for the offer or sale of common stock resulting from the conversion of the Preferred Stock. In addition, the purchasers of the Preferred Stock and their affiliates agreed not to engage in any short sales, swaps, purchasing of puts, or other hedging activities that involved the direct or indirect use of the common stock to hedge their investment in the Preferred Stock; however, the investor could write call options if the call exercise price was greater than the effective Conversion Price on the day that the call was written. These hedging restrictions did not apply to certain short sales within three days of conversion in amounts not greater than the number of shares issuable upon conversion. The conversion discount of the Preferred Stock was considered to be an additional preferred stock dividend. The discount computed at issuance of $3,075,000 was recorded as a reduction of preferred stock and an increase to additional paid-in-capital. The discount was recognized ratably as a non-cash deemed dividend over the applicable fourteen month period. If shares were converted prior to the full accretion, no additional discount was taken during the fourteen month period. On October 21, 1998, the Company suspended conversions of the Preferred Stock because the Company had issued, from its authorized shares, the maximum number of common shares available for such conversions (4,494,768 shares). No further conversions of the Preferred Stock could be effected until the Company's shareholders approved an authorization of additional common stock. At the time of suspension of the Preferred Stock conversions, approximately $8.9 million face value of Preferred Stock, plus accrued dividends, remained outstanding. On July 20, 1999, the Company's common stockholders approved the restructuring of the terms of the Company's Preferred Stock and on August 6, 1999, the Company entered into an agreement with the holders of a majority of the outstanding Preferred Stock to restate the terms of the Preferred Stock. In accordance with the restated terms of the Preferred Stock, holders thereof had until the close of business on August 16, 1999, to elect (i) to continue to own shares of Preferred Stock, (ii) to exchange shares of Preferred Stock, including accrued dividends, for cash in the amount per Preferred Stock share equal to 50% of the liquidation value thereof, or (iii) to exchange the shares of Preferred Stock, including accrued dividends, for shares of the Company's Common Stock at an exchange ratio of $3.75 liquidation value of Series A Preferred per share of Common Stock. Effective as of August 16, 1999, of the 8,878 shares of Preferred Stock outstanding on August 6, 1999, 4,204 shares Page F-11 plus accrued dividends were retired and canceled in exchange for the payment in the aggregate of $2,290,431 to the former holders thereof; 3,802 shares of Preferred Stock were exchanged for 1,104,746 shares of Common Stock, with an estimated fair value of $2,400,000; and 872 shares of Preferred Stock with restated terms remained outstanding. The restated terms of the remaining Preferred Stock include (i) a fixed conversion at $5.00 per share; (ii) a three-year term expiring on July 31, 2002; (iii) an adjusted dividend rate of 11% per annum (subject to possible future adjustments); and (iv) a mandatory redemption feature at the date of maturity. For the year ended December 31, 1999, the Company had recorded $395,000 of dividends, $488,000 of accreted discount and a gain on the settlement of the Preferred Stock of $5.0 million. The $5.0 million gain on the settlement of the Preferred Stock included a $676,000 gain recorded during April 1999 from an earlier Preferred Stock settlement. The remaining balance of the $5.0 million gain was determined on August 16, 1999 pursuant to the decisions of holders of the Preferred Stock regarding their restructuring options as described above. The gain was determined on that date by comparing the fair value of the new instrument (i.e., cash, common stock and/or restated Preferred Stock) with the recorded value of the exchanged Preferred Stock (including dividends), less restructure costs, with the difference being the recorded gain, which was recorded as an increase to additional paid-in capital. Included in these transactions were the reacquisition of $1.9 million of beneficial conversion features which were recorded in additional paid-in capital and were created as a part of the issuance of the preferred stock in 1998. COMMON STOCK PLACEMENT AND PRICE ADJUSTMENT. In December 1997, the Company issued and sold in a private placement to certain investment funds 160,000 shares of restricted common stock at an issue price of $24.65 per share. The common stock purchase price was based on a 15% discount to the average closing bid price for the Company's common stock as reported on The Nasdaq Stock Market ("NASDAQ")during the 5-trading day period immediately prior to the date of the issuance resulting in aggregate gross proceeds to the Company of $3,944,000. The Company also issued to the placement agents warrants to acquire an aggregate of 16,000 shares of common stock for a purchase price of $24.65 per share which expire in December 2002. The agreement covering the sale of common stock provided, subject to certain exceptions, that if during the twelve-month period following the closing of the transaction, the Company sold any shares of common stock for an issue price lower than the purchase price, the purchase price per share of such Common Stock would be adjusted downward to equal such lower issue price. Any such adjustment would be effected by issuing additional shares of common stock to the holders who purchased in the private placement. A sale of shares pursuant to the terms of the agreement included the sale or issuance of rights, options, warrants or convertible securities under which the Company would become obligated to issue shares of common stock, and the selling price of the common stock converted thereby shall be the exercise or conversion price thereof plus the consideration (if any) received by the Company upon such sale or issuance. Page F-12 The holders were not required to accept, by way of any such adjustment, a number of common shares such that the total number of common shares held by the holders, which were held by them on the date of the agreement, or acquired by them pursuant to the agreement, would exceed 4.99% of the total outstanding common stock of the Company. The Company would be required to effect the 4.99% adjustment by cash refund to the extent necessary to avoid the 4.99% limitation being exceeded. As of December 31, 1998, the additional shares and cash refund to effect the limitation adjustment was 466,338 shares and $3,223,712, respectively. At December 31, 1998 the Company's obligation to deliver cash to the holders, was recorded as a current liability with a corresponding charge to earnings. On July 20, 1999 the Company's shareholders approved a restructuring plan that created a one year promissory note for the cash refund amount of $3,223,712 at 8% interest maturing July 31, 2000. WARRANTS. Warrants to purchase shares of the Company's common stock, including warrants issued to related parties (Note 8), are as follows: Number of Shares ----------------------------- (in thousands) Exercise Principal Price Per Share Stockholders Others Total --------------- ------------ ------ ----- Outstanding and exercisable at December 31, 1996 $20.75 1,399 -- 1,399 Granted $24.65(1) -- 16 16 ---------------------------- Outstanding and exercisable at December 31, 1997 $20.75-$24.65 1,399 16 1,415 Cancelled $24.65(1) -- (16) (16) Granted $1.15(1) -- 16 16 ---------------------------- Outstanding and exercisable at December 31, 1998 $1.15-$20.75 1,399 16 1,415 Cancelled $5.00 (806) -- (806) Granted $2.25-16.22(2)(3) 2,883 -- 2,883 ---------------------------- Outstanding and exercisable at December 31, 1999 $1.15-16.22 3,476 16 3,492 ============================ All of the above warrants are currently exercisable. Of such warrants, warrants to purchase 2,570,000 shares of common stock with various exercise prices from $5.00 to $16.22 expire in August and December 2001, warrants to purchase 906,000 shares of common stock with an exercise price of $2.25 expire in 2008 and 2009. The remaining warrants to purchase 16,000 shares of common stock with an exercise price of $1.15 expire in December 2002. Page F-13 (1) In December 1997, the Company issued and sold in a private placement to certain investment funds, 160,000 shares of its common stock at an issue price of $24.65 per share. The Company issued to the placement agents for this transaction, warrants to purchase an aggregate of 16,000 shares of common stock for a purchase price of $24.65 per share (the "Private Placement Warrants"). If during the twelve month period following the Private placement transaction, the Company sold any shares of common stock for an issue price lower then $24.65 per share, the exercise price per share of the issued warrants would be adjusted downward to equal such lower issue price. In October 1998, the Company issued shares from the conversion of Preferred Stock for a price of $1.15 per share. Pursuant to the terms of the Private Placement Warrants, the exercise price of such warrants were, therefore, adjusted from $24.65 to $1.15. (2) In December 1999, the Company issued and sold in a private placement 953,000 common stock units at an issue price of $5.66 per unit. Each unit consisted of 1 share of common stock, one warrant to purchase common stock at $10.81 per share and one warrant to purchase common stock at $16.22 per share. The Company issued to the placement agent for this transaction approximately 36,000 warrants to purchase common stock at $10.81 per share and approximately 36,000 warrants to purchase common stock at $16.22 per share. (3) Pursuant to the restructuring plan approved by the Company's shareholders on July 20, 1999 and in consideration for the National Electrical Benefit Fund (the "Fund") to amend the terms of Fund's credit facility, the Company agreed to amend the exercise price of outstanding warrants held by the Fund to purchase 805,697 shares of the Company's common stock and extend the expiration date of such warrants to September 30, 2008. The Company also issued new warrants to purchase 100,000 shares of the Company's common stock with an expiration date of August 6, 2009. The amended warrants and the new warrants have an exercise price of $2.25 per share. The Company has determined that 906,000 warrants issued to the Fund at $2.25 per share in conjunction with the amendment and restatement of a note payable due to the Fund had a fair value of $1,409,000. The Company recorded the fair value as a debt discount which is amortized over the remaining life of the outstanding note payable. All other outstanding warrants had a nominal value at the time of issuance. DEFERRED COMPENSATION. Subject to shareholder approval to amend the Company's 1995 Stock Option Plan, options to purchase 500,000 shares of the Company's common stock were approved by the Board of Directors for certain officers of the Company on September 28, 1999, with an exercise price of $2.25 per share. On December 22, 1999 shareholders approved the amendment of the 1995 Stock Option Plan. The intrinsic value of stock based compensation related to the options is $2,578,000. This amount is recorded as deferred compensation and will be amortized over the vesting period of such options as a charge to compensation expense. The unamortized compensation expense as of December 31, 1999 is approximately $2,423,000. Page F-14 STOCK OPTIONS. The Company has four stock option plans, the Amended and Restated 1986 Stock Option Plan (the "1986 Plan"), the 1989 Nonstatutory Stock Option Plan (the "1989 Plan"), the 1995 Stock Option Plan, as amended (the "1995 Plan"), and the 1999 Stock Option Plan (the "1999 Plan")(collectively, the "Plans"). The Plans reserve 3,035,714 shares of the Company's common stock for issuance and permit the issuance of non-qualified stock options. The exercise price of all non-qualified stock options must be equal to at least 85% of the fair market value of the common stock on the date of grant in the 1986 and 1989 Plans and 95% in the 1995 and 1999 Plans, and the maximum term of each grant is ten years. Options granted become exercisable in full or in installments pursuant to the terms of each agreement evidencing options granted. The 1986 and the 1995 Plans also permit the issuance of incentive stock options. As of December 31, 1999, the Company has not granted any incentive stock options. The Company accounts for these plans under APB Opinion No. 25, under which no compensation cost is recognized for grants with an exercise price equal to or in excess of the value of the underlying stock on the measurement date. Had compensation costs for these plans been determined consistent with SFAS No. 123, "Accounting for Stock Based Compensation," the Company's net loss and net loss per share would have been reported as follows: Year Ended Year Ended Year Ended Dec. 31, 1999 Dec. 31, 1998 Dec. 31, 1997 ------------- ------------- ------------- (in thousands, except per share amounts) Net Loss Applicable to Common Shares As reported $(2,035) $(19,141) $(8,857) Pro forma (4,338) (22,079) (12,637) Net Loss Per Share As reported - basic and diluted $(0.16) $(2.23) $(1.19) Pro forma - basic and diluted (0.34) (2.57) (1.70) Because the SFAS No. 123 method of valuation has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation costs may not be representative of amounts to be expected in future years. For disclosure purposes, the fair value of stock based compensation was computed using the Black-Scholes option pricing model with the following weighted average assumptions used for 1999, 1998 and 1997 grants: 1999 1998 1997 ---------- ---------- ---------- Risk Free Interest Rate 6.63% 4.74% 5.54% Expected Dividend Yield 0% 0% 0% Expected Lives 3.5 years 3.5 years 3.5 years Expected Volatility 103% 93% 50% Page F-15 Activity in the Plans is as follows: Number of Shares ------------------------------- (in thousands) Weighted Average Directors Exercise and Price Per Share Officers Employees Total ---------------- --------- --------- --------- Outstanding at December 31, 1996 $30.50 306 435 741 Granted $31.00 31 49 80 Cancelled $32.75 (13) (67) (80) Exercised $23.55 (15) (10) (25) --------------------------- Outstanding at December 31, 1997 $30.65 309 407 716 Granted $21.40 61 59 120 Cancelled $31.15 (4) (25) (29) Reclassified $30.60 30 (30) -- --------------------------- Outstanding at December 31, 1998 $29.25 396 411 807 Granted $ 2.31 545 481 1,026 Cancelled $22.47 (17) (36) (53) --------------------------- Outstanding at December 31, 1999 $13.92 924 856 1,780 =========================== Exercisable at December 31, 1999 $28.57 318 272 590 =========================== The weighted average fair value of shares granted during the years ended December 31, 1999, 1998 and 1997 are $2.68, $20.55 and $16.55, respectively. The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives by groups of similar price and grant date: Weighted Average Number of --------------------------- Exercise Price Shares Exercise Contractual Range Outstanding Price Life -------------- ----------- -------- ----------- $ 1.88 - $ 3.60 1,000,430 $ 2.22 9.68 $ 7.03 - $ 8.75 22,481 7.49 8.86 $17.03 - $25.63 264,112 21.94 5.36 $28.44 - $32.50 181,144 32.21 6.14 $33.15 - $40.95 311,850 34.51 6.73 --------- 1,780,017 ========= Page F-16 Weighted Number of Average Exercise Price Shares Exercise Range Exercisable Price -------------- ----------- -------- $ 1.88 - $ 3.60 1,460 $ 2.11 $ 7.03 - $ 8.75 19,481 7.56 $17.03 - $25.63 199,237 21.30 $28.44 - $32.50 138,682 32.34 $33.15 - $40.95 230,672 34.53 --------- 589,532 ========= 7. LOSS ON MANUFACTURING CONTRACT. In August 1998, the Company entered into a contract to manufacture, in the Company's Colorado Springs manufacturing facility, a limited number of RFID memory chips using the Company's FRAM memory technology. As Of December 31, 1998, the Company determined that the total contract revenue compared with the estimated contract costs of manufacturing this product indicated that a loss in fulfilling the contract would be incurred. The loss resulted from low product manufacturing yields, raw material quality issues and complications in product testing due to chip design complexity. Accordingly, the Company recorded an accrued liability and a charge to earnings reflecting the total estimated loss on the contract in the amount of $1,163,000 in 1998. The manufacturing of this product was completed in March 1999. 8. RELATED PARTY TRANSACTIONS: The National Electrical Benefit Fund (the "Fund") is a principal stockholder of the Company. TRANSACTIONS WITH THE FUND. Pursuant to a Stock and Warrant Purchase Agreement dated March 13, 1989 between the Company and the Fund, as amended by Amendment No. 1 thereto dated June 29, 1989 (the "1989 Fund Purchase Agreement"), the Company agreed to pay to the Fund, for as long as the Fund owns at least 5% of the outstanding shares of the Company's common stock, a reasonable monthly consulting fee of not more than $5,000 and to reimburse the Fund for all out-of-pocket expenses incurred in monitoring the Fund's investment in the Company. During 1999, 1998 and 1997, the Company was obligated to pay to the Fund approximately $60,000 per year in payment of such fees and expenses. Payments made for these obligations were $390,000, $0 and $0 during 1999, 1998 or 1997, respectively. $120,000 and $450,000 related to this obligation is included in accrued expenses as of December 31, 1999 and 1998, respectively. The Company granted to the Fund pursuant to a 1995 debt conversion agreement (the "1995 Debt Conversion Agreement") certain rights to register under the Securities Act for resale all of the warrants and shares of common stock issued to the Fund pursuant to the 1995 Debt Conversion Agreement. Page F-17 In September 1995, the Company and the Fund entered into a Loan Agreement (the "Fund Credit Facility") pursuant to which the Fund agreed to lend to the Company up to $12 million bearing interest at 12% per annum. The borrowings under the Fund Credit Facility totaled $5.5 million as of August 6, 1999. On August 6, 1999, the Company and the Fund amended the terms of the Fund Credit Facility. Pursuant to the terms of the amended credit facility (the "Amended Credit Facility"), $1.5 million of accrued interest was reclassified to principal, leaving an outstanding principal balance under the loan as of August 6, 1999 of $7 million. The remaining accrued interest balance as of August 6, 1999 of approximately $525,000 that was not reclassified to principal was paid to the Fund at the time of the amendment. The Amended Credit Facility bears interest at 8% per annum, payable quarterly, with the first interest payment due January 31, 2000. The maturity date of the Amended Credit Facility is March 15, 2002. No additional borrowings are available to the Company under the Amended Credit Facility and the loan is secured by a first priority lien on substantially all of the Company's assets. The Fund has the right to convert all or any portion of the amounts outstanding under the Amended Credit Facility into common stock at any time or times before maturity of the loan at a conversion price equal to $5.00 for each share of common stock. The agreement requires the Company maintain a minimum level of net worth of $7 million, current assets to current liabilities ratio of not less than 1.5, as defined, and long-term debt to net worth ratio not to exceed 1.0, as defined. The Company was in compliance with these covenants at December 31, 1999. Outstanding principal and accrued interest as of December 31, 1999 under the Amended Credit Facility was $7.0 million and $230,000, respectively. As consideration for the Fund to amend the terms of the credit facility, the Company agreed to amend the exercise price of outstanding warrants held by the Fund to purchase 805,697 shares of the Company's common stock to $5.00 and extend the expiration date of such warrants to September 30, 2008. The Company also issued new warrants to purchase 100,000 shares of the Company's common stock with an exercise price of $2.35 with an expiration date of August 6, 2009. The exercise price of such warrants is periodically amendable to equal the lowest price of any warrant or stock option issued by the Company, as defined. The current exercise price of the Fund's warrants is $2.25 per share. The amended warrants and the new warrants were valued using the Black Scholes option pricing method with a resulting value of approximately $1.4 million. The following assumptions were used to value these warrants: risk free interest rate of 5%, expected yield of 0%, expected life of three years, and expected volatility of 103%. This amount is accounted for as a discount to the outstanding promissory note payable and will be amortized over the remaining life of the note as a charge to interest expense in the Company's consolidated statements of operations. The unamortized discount pertaining to the note and warrants as of December 31, 1999 is approximately $1,235,000. In July 1998, the Company granted to the Fund options to purchase 7,000 shares of the Company's common stock at the fair market value at the date of such grant. The grant of these options to the Fund was in lieu of Mr. Tull, the Fund's board representative, receiving these options in recognition of the services he has performed on the Company's behalf as a Director of the Company. Mr. Tull resigned from the Company's Board of Directors effective September 8, 1999. The Fund currently has no representative on the Company's Board of Directors. Page F-18 TRANSACTIONS INVOLVING DIMENSIONAL FUND ADVISORS, INC. Dimensional Fund Advisors, Inc. is a principal shareholder of the Company. In connection with the restructuring of the Company's Series A Preferred Stock in August 1999, the Company entered into agreements with certain affiliates of Dimensional Fund Advisors, Inc. (the "DFA Affiliates") to issue to each DFA Affiliate an unsecured convertible promissory note (together, the "DFA Promissory Notes") in consideration of the termination of certain Common Stock purchase rights of the DFA Affiliates. Such purchase rights were recorded as a common stock price adjustment liability in balance sheets prior to September 30, 1999. The DFA Promissory Notes bear interest at 8% per annum and mature on July 31, 2000. All or part of the principal and accrued and unpaid interest of the DFA Promissory Notes are convertible into common stock at the option of the holder of the note at a conversion ratio of one share of common stock for each $5.00 of principal and accrued interest converted. The outstanding principal balance and accrued interest as of December 31, 1999 under the DFA Promissory Notes were approximately $3,224,000 and $111,000, respectively. The consolidated statements of operations include amounts attributable to related party transactions, as follows: 1999 1998 1997 ------ ------ ------ (in thousands) Interest expense on convertible promissory notes $914 $669 $386 ====== ====== ====== INVESTMENT IN RACOM SYSTEMS, INC. Prior to September 1999 the Company had a 36% ownership interest in Racom Systems, Inc. ("Racom"). The investment was carried at zero as the Company had no commitment to provide future funding to Racom. In April 1999 Turbo International Limited ("Turbo") acquired a majority ownership position in Racom. During September 1999 the Company sold its 36% ownership interest in Racom to Turbo for $10,000. 9. SUPPLEMENTAL CASH FLOW INFORMATION: CASH PAID FOR INTEREST AND INCOME TAXES: 1999 1998 1997 ------ ------ ------ (in thousands) Interest $557 $69 $49 Income taxes -- -- -- Page F-19 10. INCOME TAXES: As of December 31, 1999, the Company had approximately $148 million of net operating loss carryovers for tax purposes. Further, the Company has approximately $1.5 million of research and development tax credits available to offset future federal tax. The net operating loss and credit carryovers expire through 2014. The Internal Revenue Code contains provisions, which may limit the net operating loss carryforwards available to be used in any given year if certain events occur, including significant changes in ownership interests. The components of the net deferred income tax asset were as follows: December 31, -------------------- 1999 1998 ------- ------- (in thousands) Deferred tax assets: License fees and deferred revenue $ -- $ 2,700 Other 1,900 1,100 Net operating loss carryovers 59,300 56,900 ------ ------- 61,200 60,700 Valuation allowance (61,200) (60,700) ------ ------ $ -- $ -- ====== ====== The provision for income taxes includes the following: December 31, ---------------------------- 1999 1998 1997 ------ ------ ------ (in thousands) Current: Federal $ -- $ -- $ -- State -- -- -- ------ ------ ------ Total current -- -- -- Deferred: Federal (2,040) (4,550) (3,221) State (290) (650) (379) ------ ------ ------ Total deferred benefit (2,330) (5,200) (3,600) Increase in valuation allowance 2,330 5,200 3,600 ------ ------ ------ Total provision $ -- $ -- $ -- ====== ====== ====== Page F-20 Income taxes computed using the federal statutory income tax rate differ from the Company's effective tax rate primarily as a result of state taxes and the increase in the valuation allowance. During 1999, net operating loss carryovers of approximately $4.6 million expired. Taxes other than payroll and income taxes were $586,000, $211,000 and $549,000 for 1999, 1998 and 1997, respectively. 11. SEGMENT AND GEOGRAPHIC AREA INFORMATION: Ramtron is engaged primarily in the design, development, manufacture and sale of specialty high-performance semiconductor memory devices. Ramtron has two principal businesses, ferroelectric nonvolatile random access memory ("FRAM") technology and products, and high-speed DRAM products called Enhanced- DRAM ("EDRAM") products. The accounting policies for determining segment net income (loss) are the same used in the consolidated financial statements. There are no internal sales between segments or geographic regions. 1999 1998 1997 ----------------- ----------------- ----------------- FRAM EDRAM FRAM EDRAM FRAM EDRAM -------- -------- -------- -------- -------- -------- (in thousands) Revenue: Product sales $3,508 $9,640 $ 2,569 $15,041 $ 1,603 $13,010 License and development fees 4,500 700 -- -- 5,750 -- Royalties 1,501 -- -- -- -- -- Customer-sponsored research and development revenue 4,562 460 944 -- 132 -- -------- -------- -------- -------- -------- -------- 14,071 10,800 3,513 15,041 7,485 13,010 -------- -------- -------- -------- -------- -------- Operating costs (18,257) (12,439) (17,296) (14,243) (16,638) (12,985) -------- -------- -------- -------- -------- -------- Operating profit(loss) $(4,186) $(1,639) (13,783) 798 (9,153) 25 Other 221 (17) (301) (19) 596 -- -------- -------- -------- -------- -------- -------- Net Profit (Loss) $(3,965) $(1,656) $(14,084) $779 $(8,557) $25 ======== ======== ======== ======== ======== ======== Total assets $21,080 $8,300 $25,393 $7,954 $21,064 $9,990 Depreciation and Amortization 1,900 390 2,187 286 2,349 248 Capital additions 249 67 726 98 766 394 Intangible additions 233 2,718 236 512 249 97 Page F-21 Net profit (loss) excludes interest income, interest expense and special charges of $577,000, $3,126,000 and $325,000 in 1999, 1998 and 1997, respectively, not allocated to business segments. Major customers representing more than 10% of total revenues are as follows: 1999 1998 1997 --------------------- --------------------- --------------------- FRAM EDRAM FRAM EDRAM FRAM EDRAM ---------- ---------- ---------- ---------- ---------- ---------- (in thousands) Customer A $8,000 32% $ -- -- $-- -- $ -- -- $3,750 18% $ -- -- Customer B -- -- 3,490 14% -- -- 4,301 23% -- -- -- -- Customer C -- -- -- -- -- -- 5,192 28% -- -- 3,488 17% Customer D -- -- -- -- -- -- 2,128 11% -- -- 2,908 14% Customer E -- -- -- -- -- -- -- -- 2,000 10% -- -- The following geographic area data include revenues based on product shipment destination, license and development payor location and customer-sponsored research and development payor location. The data presented for long-lived assets is based on physical location. Geographic Area Net Revenues: 1999 1998 1997 --------- --------- --------- (in thousands) United States $ 9,146 $13,475 $ 9,108 Japan 10,766 485 5,795 Canada 2,755 2,278 3,288 United Kingdom 923 935 1,014 Germany 643 414 495 Rest of world 638 967 795 --------- --------- --------- Total $24,871 $18,554 $20,495 ========= ========= ========= Geographic Area Long-lived Assets (Net): 1999 1998 1997 --------- --------- --------- (in thousands) United States $12,327 $11,165 $12,107 Thailand 229 310 95 Rest of world 162 341 515 --------- --------- --------- $12,718 $11,816 $12,717 ========= ========= ========= Page F-22 12. DEFINED CONTRIBUTION PLAN: The Company has a cash or deferred compensation plan (the "401(k) Plan") intended to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"), in which substantially all full-time employees are participants. Participants in the 401(k) Plan may make maximum pretax contributions, subject to limitations imposed by the Code, of 20% of their compensation. The Company may make, at the Board of Directors' discretion, an annual contribution on behalf of each participant. No amounts have been contributed by the Company under the 401(k) Plan on behalf of participating employees. 13. CONTINGENCIES: PATENT INTERFERENCE PROCEEDING. A patent interference proceeding, which was declared in 1991 in the United States Patent and Trademark Office (the "Patent Office") between the Company, National Semiconductor Corporation ("National") and the Department of the Navy in regard to one of the Company's issued United States patents, is continuing. The Patent involved covers a basic ferroelectric memory cell design invention the Company believes is of fundamental importance to its FRAM business in the United States. An interference is declared in the Patent Office when two or more parties each claim to have made the same invention. The interference proceeding is therefore conducted to determine which party is entitled to the patent rights covering the invention. In the present interference contest, the Company is the "senior" party, which means that it is in possession of the issued United States Patent and retains all rights associated with such patent. The other two parties involved in the interference are the "junior" parties, and each has the burden of proof of convincing the Patent Office by a preponderance of the evidence that it was the first to invent the subject matter of the invention and thus is entitled to the corresponding patent rights. Only the Company and National filed briefs in this matter. Oral arguments were presented before the Patent Office on March 1, 1996. The Patent Office decided the interference on May 6, 1997, holding that all of the claims were patentable to National, one of the "junior" parties. The other "junior" party, the Department of the Navy, was not granted any patent claims pursuant to the interference proceedings. On June 20, 1997, the Company filed a Request for Reconsideration with the Patent Office concerning the interference decision. Pursuant to the Request for Reconsideration, the Company requested that five separate issues be reconsidered because, from the Company's perspective, they were either ignored or misconstrued in the original decision. A decision on the Request for Reconsideration was issued on November 19, 1998, again holding that all of the claims were patentable to National. On January 9, 1999, the Company appealed the decision of the Patent Office on one of the interference counts directly to the Court of Appeals for the Federal Circuit. On February 2, 2000 the Court of Appeals vacated and Page F-23 remanded the decision of the Patent Office for further proceedings. The Company also filed complaint's in Federal District Court in the District of Columbia seeking a review of the decision of the Patent Office on the remaining interference counts, which are still pending. The Company remains in possession of the issued United States Patent and retains all rights associated with such patent while it pursues its appeal options. The "junior" party has received no rights associated with this patent decision and will not receive any such rights as long as the appeal process continues. If the Company's patent rights that are the subject of the interference proceeding are ultimately lost or significantly compromised, the Company would be precluded from producing FRAM products in the United States using the Company's existing design architecture, absent being able to obtain a suitable license to exploit such rights. If such patent rights are ultimately awarded to National, and if a license to such rights is not subsequently entered into by the Company with National, National could use the patent to prevent the manufacture, use or sale by the Company, and/or its licensees, within the United States of any products that come within the scope of such patent rights, which would include all FRAM products as currently designed, and which would materially adversely affect the Company. The Company has vigorously defended its patent rights in this interference contest and will continue such efforts. The Company is uncertain as to the ultimate outcome of the interference proceeding, as well as to the resulting effects upon the Company's financial position or results of operations. PATENT INFRINGEMENT PROCEEDING. In October 1998, the Company filed a claim for patent infringement in the United States District Court, Northern District of California against NEC Corporation, NEC Electronics, Inc. and NEC USA, Inc. (collectively "NEC"). The complaint claimed that NEC infringed and continues to infringe on certain patents of the Company by offering to sell and/or selling NEC's Virtual Channel SDRAM products, and by actively inducing others to infringe on such patents without authority or license from the Company. The complaint sought relief from NEC to cease its infringement activities and requested damages be awarded to the Company resulting from the infringement activities. The relief also asked for reimbursement of attorney's fees and certain other relief the court deemed proper. NEC responded by denying the infringement claims brought against them by the Company. NEC also filed certain counterclaims against the Company, which were subsequently retracted or stayed by the court. On November 9, 1999 the Company and NEC entered into an agreement to settle its patent infringement lawsuit. The parties agreed to terminate the pending patent infringement cases and pursuant to the agreement, the Company granted NEC a restricted license to use certain of the Company's Enhanced DRAM specific intellectual property for certain consideration, the terms of which are confidential and under a court protective order. Page F-24 LITIGATION DEERE PARK. In November 1998, Deere Park Capital Management LLC ("Deere Park"), a holder of the Company's Series A Convertible Preferred Stock ("Preferred Stock"), filed a lawsuit against the Company in the Court of Chancery of the State of Delaware seeking a declaratory judgment and specific performance of the Company's alleged obligation to convert a portion of Deere Park's shares of Preferred Stock to common stock, as well as damages of $2.4 million plus costs and attorneys fees. On December 16, 1998, the Company filed its answer denying the allegations of the complaint and asserting, among other things, that the Company had fully performed its contractual obligations with respect to the conversions alleged in the complaint. On January 20, 1999, Deere Park moved for permission to file an amended complaint. Shortly thereafter, in early February 1999, Deere Park filed a second action against the Company in the Court of Chancery for the State of Delaware. Like the proposed amended complaint in its original lawsuit, Deere Park alleged in the second action that the Company breached certain obligations to convert Deere Park's shares of Preferred Stock; however, Deere Park's new complaint added a claim for relief and relied on different facts to support the claims asserted therein. On February 23, 1999, the Company answered Deere Park's second action by denying the substance of Deere Park's new allegations and raised certain affirmative defenses that the Company previously had not raised. Effective as of August 6, 1999, Deere Park dismissed all claims against the Company with prejudice pursuant to the finalization of the Company's preferred stock restructuring. TALISMAN. On January 29, 1999, Talisman Capital Opportunity Fund, LLC ("Talisman"), a holder of Preferred Stock, filed a suit against the Company in the United States District Court for the Southern District of New York, also alleging that the Company failed to honor its obligations to convert shares of its Preferred Stock and seeking damages of over $1.5 million plus costs and attorney's fees. In its answer served on February 22, 1999, the Company denied the substance of Talisman's allegations and asserted several affirmative defenses. On April 7, 1999, the Company entered into an agreement with Talisman to settle the pending litigation. Pursuant to the terms of a confidential settlement agreement, the Company agreed to make a cash payment to Talisman in consideration for the cancellation of all Talisman's remaining shares of Series A Preferred Stock. Accordingly, Talisman's suit over the Company was dismissed and Talisman ceased to be a holder of the Company's Series A Preferred Stock. 14. SUBSEQUENT EVENTS: INFINEON. On January 26, 2000, the Company's wholly owned subsidiary, Enhanced Memory Systems ("EMS"), Incorporated, entered into a non-exclusive, worldwide technology licensing agreement with Infineon Technologies AG ("Infineon"). In consideration for the grant of the license, Infineon received 20% of the outstanding common stock of EMS. Additionally, the agreement calls for Infineon to provide EMS with up to $200 million per year of committed wafer manufacturing capacity using Infineon's advanced DRAM and embedded DRAM process capabilities and access to Infineon's design technology. The agreement has a term of six years with optional two-year renewal periods thereafter. Page F-25 PATENT INTERFERENCE PROCEEDING. The U.S. Court of Appeals for the Federal Circuit on February 2, 2000 vacated and remanded a Patent Office decision awarding rights to National Semiconductor in one of five patent interferences appeals filed by the Company. Four other patent interference issues remain to be heard in the Federal District Court in Washington, D.C. Page F-26
RAMTRON INTERNATIONAL CORPORATION SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS (in thousands) Column A Column B Column C Column D Column E - --------- ---------- ---------- ---------- ---------- Additions ---------------------- Balance at Charged to Charged to Balance at Beginning Costs and Other End Description of Period Expenses Accounts Deductions of Period - ------------ ---------- ---------- ---------- ---------- ---------- Year Ended 12/31/97: Allowance for doubtful accounts $585 $ -- $-- $485 $100 Allowance for returns and discounts 136 371 -- 440 67 ---------------------------------------------------------- $721 $371 $-- $925 $167 ========================================================== Year Ended 12/31/98: Allowance for doubtful accounts $100 $ -- $-- $ -- $100 Allowance for returns and discounts 67 375 -- 408 34 ---------------------------------------------------------- $167 $375 $-- $408 $134 ========================================================== Year Ended 12/31/99: Allowance for doubtful accounts $100 $ -- $-- $ -- $100 Allowance for returns and discounts 34 330 -- 117 247 ---------------------------------------------------------- $134 $330 $-- $117 $347 ==========================================================
Page F-27 Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no changes in or disagreements with accountants required to be reported herein. PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Directors of the Company, and certain information about them, are as follows: Name Age Position(s) with the Company - ---- --- ---------------------------- L. David Sikes 58 Chairman of the Board and Chief Executive Officer Greg B. Jones 52 Director, President and Chief Operating Officer William G. Howard(1)(2) 58 Director Eric A. Balzer(1)(2) 51 Director Albert J. Hugo-Martinez(1)(2) 54 Director - ----------------- (1) Member of the Compensation Committee. (2) Member of the Audit Committee. L. David Sikes. See Part I, Item 1a hereof entitled "Executive Officers of the Registrant." Greg B. Jones. See Part I, Item 1a hereof entitled "Executive Officers of the Registrant." Dr. Howard has served as a director of the Company since July 1994. Since September 1990, Dr. Howard has been an independent engineering consultant to various entities, including SEMATECH, the Semiconductor Industry Association and Dow Corning. From October 1987 until December 1990, he served as a Senior Fellow at the National Academy of Engineering while on leave from Motorola. From 1969 to 1990, Dr. Howard was employed by Motorola where he most recently served as Corporate Senior Vice President and Director of Research and Development. Dr. Howard is a member of the National Academy of Engineering and a fellow of the Institute of Electrical Engineers and of the American Association for the Advancement of Science. Dr. Howard is the Chairman of Credence Systems, Inc., a manufacturer of electronic test equipment. Dr. Howard is also a director of BEI Electronics, Inc., a manufacturer of electronic sensors; and Xilinx, Inc., a manufacturer of integrated circuits. Page-40 Mr. Balzer has served as a director of the Company since September 1998. From January 1990 until his retirement in November 1999, Mr. Balzer served as Senior Vice President of Operations for Advanced Energy Industries, Inc. a company that develops, manufactures and markets power conversion devices for the semiconductor equipment industry. Prior to his employment with Advanced Energy Industries, Inc., Mr. Balzer served as Materials and Manufacturing Manager for IBM's corporate systems technology division. Mr. Hugo-Martinez has served as a director of the Company since March 1999. From March 1996 to November 1998, he served as President and Chief Executive Officer and a member of the Board of Directors of GTI Corporation, a manufacturer of ISDN and local area network subcomponents. From 1987 to 1995, he served as President and Chief Executive Officer of Applied Micro Circuits Corporation, a manufacturer of high-performance bipolar and biCMOS gate arrays. Mr. Hugo-Martinez is also a director of Microchip, Inc., a semiconductor manufacturing company specializing in micro-controller devices and On Semiconductor, Inc., a semiconductor manufacturer specializing in analog integrated circuit products. The information concerning the Company's executive officers required by this Item is included in Part I, Item 1a hereof entitled "Executive Officers of the Registrant." SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE: Under Section 16(a) of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), the Company's directors and officers and persons holding more than ten percent of the Company's Common Stock are required to report their ownership of the Company's Common Stock and any changes in that ownership to the Securities and Exchange Commission (the "SEC"). The specific due dates for these reports have been established by the SEC, and the Company is required to report on any failure to file by the established dates. To the knowledge of the Company and based solely on a review of the Section 16(a) reports furnished to the Company during 1999, none of the Company's directors, officers and persons holding more than 10% of the Company's Common Stock were delinquent in filing reports pursuant to Section 16(a) of the Exchange Act. Item 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE The following table sets forth certain information for the three years ended December 31, 1999 concerning compensation paid or accrued by the Company to or on behalf of the Company's Chief Executive Officer during 1999 and each of the four other most highly compensated executive officers of the Company whose compensation during 1999 exceeded $100,000: Page-41 Long-Term Compensation Awards ------------------------- Annual Compensation Securities Restricted Name and -------------------- Underlying Stock Principal Position Year Salary($) Bonus($) Options(#) Awards($) - ------------------ ---- --------- -------- ------------------------- L. David Sikes 1999 $360,000 $ -- 200,000 $ -- Chairman of the 1998 360,000 65,000 20,000 64,806(1) Board and Chief 1997 355,000 75,000 10,000 -- Executive Officer Greg B. Jones 1999 200,000 -- 100,000 -- President and Chief 1998 202,100 -- 9,000 49,790(2) Operating Officer 1997 179,900 -- -- -- Richard L. Mohr 1999 200,000 -- 100,000 -- Executive Vice 1998 200,000 -- -- 48,117(3) President and Chief 1997 175,333 20,000 10,000 -- Financial Officer Donald G. Carrigan 1999 152,092 333 50,000 -- Vice President of 1998 152,092 5,333 8,000 33,804(4) Sales and Marketing, 1997 139,225 -- 10,000 -- FRAM Business Craig W. Rhodine(5) 1999 145,000 -- 75,000 -- Vice President and 1998 137,500 -- -- 42,254(6) General Manager, 1997 122,083 -- -- -- EDRAM Business - --------------- (1) The amount shown represents the dollar value of the award of restricted stock, calculated by multiplying the closing market price of the Company's Common Stock on the date of grant by the number of shares awarded plus withholding tax on the calculated amount of the award. The number of shares of fully vested restricted stock awarded was 1,600. The closing market price on the date of the award, the market value of the stock on the date of the award and the associated withholding taxes were $25.078, $40,125 and $24,681, respectively. As of December 31, 1999, Mr. Sikes held 1,600 shares of such restricted stock having a value of $10,700 based upon the fair market value of the Common Stock on December 31, 1999. The restricted shares are currently unregistered and are not tradable pursuant to an active registration statement filed with the SEC. Page-42 (2) The amount shown represents the dollar value of the award of restricted stock, calculated by multiplying the closing market price of the Company's Common Stock on the date of grant by the number of shares awarded plus withholding tax on the calculated amount of the award. The number of shares of fully vested restricted stock awarded was 1,200. The closing market price on the date of the award, the market value of the stock on the date of the award and the associated withholding taxes were $25.078, $30,094 and $19,696, respectively. As of December 31, 1999, Mr. Jones held 1,200 shares of such restricted stock having a value of $8,025 based upon the fair market value of the Common Stock on December 31, 1999. The restricted shares are currently unregistered and are not tradable pursuant to an active registration statement filed with the SEC. (3) The amount shown represents the dollar value of the award of restricted stock, calculated by multiplying the closing market price of the Company's Common Stock on the date of grant by the number of shares awarded plus withholding tax on the calculated amount of the award. The number of shares of fully vested restricted stock awarded was 1,200. The closing market price on the date of the award, the market value of the stock on the date of the award and the associated withholding taxes were $25.078, $30,094 and $18,023, respectively. As of December 31, 1999, Mr. Mohr held 1,200 shares of such restricted stock having a value of $8,025 based upon the fair market value of the Common Stock on December 31, 1999. The restricted shares are currently unregistered and are not tradable pursuant to an active registration statement filed with the SEC. (4) The amount shown represents the dollar value of the award of restricted stock, calculated by multiplying the closing market price of the Company's Common Stock on the date of grant by the number of shares awarded plus withholding tax on the calculated amount of the award. The number of shares of fully vested restricted stock awarded was 800. The closing market price on the date of the award, the market value of the stock on the date of the award and the associated withholding taxes were $25.078, $20,062 and $13,742, respectively. As of December 31, 1999, Mr. Carrigan held 800 shares of such restricted stock having a value of $5,350 based upon the fair market value of the Common Stock on December 31, 1999. The restricted shares are currently unregistered and are not tradable pursuant to an active registration statement filed with the SEC. (5) Mr. Rhodine became an executive officer of the Company in March 1997 and was employed by the Company in various non-executive officer positions from September 1992 until March 1997. (6) The amount shown represents the dollar value of the award of restricted stock, calculated by multiplying the closing market price of the Company's Common Stock on the date of grant by the number of shares awarded plus withholding tax on the calculated amount of the award. The number of shares of fully vested restricted stock awarded was 1,000. The closing market price on the date of the award, the market value of the stock on the date of the award and the associated withholding taxes were $25.078, $25,078 and $17,176, respectively. As of December 31, 1999, Mr. Rhodine held 1,000 shares of such restricted stock having a value of $6,688 based upon the fair market value of the Common Stock on December 31, 1999. The restricted shares are currently unregistered and are not tradable pursuant to an active registration statement filed with the SEC. Page-43 OPTION GRANTS IN 1999 The following table sets forth certain information concerning stock option grants in 1999 to each of the executive officers named in the Summary Compensation Table who received stock option grants in 1999. Individual Grants ------------------------------------------ No. of Potential Realizable Securities % of Total Value at Assumed Underlying Options Annual Rates of Stock Options Granted to Exercise Price Appreciation Granted Employees Price Expiration for Option Term(2) Name (#) in 1999(1) ($/Share) Date 5%($) 10%($) - ---- ---------- ---------- --------- ---------- -------- --------- L. David Sikes 200,000(3) 41.6% $2.25 09/28/09 $283,003 $717,184 Greg B. Jones 100,000(3) 20.8 2.25 09/28/09 141,501 358,592 Richard L. Mohr 100,000(3) 20.8 2.25 09/28/09 141,501 358,592 Donald G. Carrigan 50,000(3) 10.4 2.25 09/28/09 70,751 179,296 Craig W. Rhodine 75,000(3) 15.6 2.25 09/28/09 106,126 268,944 - --------------- (1) The Company granted options to purchase an aggregate of 481,189 shares to employees in 1999. (2) Potential values are net of exercise price and before taxes payable in connection with the exercise of such options or the subsequent sale of shares acquired upon the exercise of such options. These values represent certain assumed rates of appreciation (i.e., 5% and 10% compounded annually over the term of such options) based on the Securities and Exchange Commission's rules. The actual values, if any, will depend upon, among other factors, the future performance of the Company's Common Stock, overall market conditions and the named officer's continued employment with the Company. Therefore, the potential values reflected in this table may not necessarily be achieved. (3) Such options were granted under the 1995 Stock Option Plan, as amended (the "1995 Plan"), and vest and become exercisable in two equal annual installments on March 31, 2000 and 2001. The exercise price per share of such options is equal to the reported closing price of the Company's Common Stock on The Nasdaq Stock Market on the date of grant. Page-44 AGGREGATED OPTIONS EXERCISED IN 1999 AND OPTION VALUES AT DECEMBER 31, 1999 The following table sets forth the aggregate number and the value of options held as of the end of 1999 by the executive officers named in the Summary Compensation Table. None of the executive officers named in the Summary Compensation Table exercised options during 1999. Number of Securities Value of Unexercised Underlying Unexercised Options In-the-Money Options at 12/31/99(#) at 12/31/99($)* ------------------------------ -------------------------- Name Exercisable Unexercisable Exercisable Unexercisable - ---- ----------- ------------- ----------- ------------- L. David Sikes 71,750 220,000 $-- $887,500 Greg B. Jones 36,500 109,500 -- 443,750 Richard L. Mohr 35,999 110,000 -- 443,750 Donald G. Carrigan 25,250 112,750 -- 221,875 Craig W. Rhodine 23,485 155,000 -- 332,813 - --------------- * Represents the difference between the closing price of the Company's Common Stock on December 31, 1999 as reported on The Nasdaq Stock Market (i.e., $6.6875 per share) and the exercise price of such options. EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS EMPLOYMENT AGREEMENTS. In January 2000, the Company entered into a two-year employment agreement with Mr. Sikes to continue in his position as Chief Executive Officer and Chairman of the Board, superceding his prior agreement and providing for Mr. Sikes to receive an initial annual salary of $360,000. Pursuant to the agreement, the Company granted to Mr. Sikes 667,000 common stock purchase warrants, having an exercise price of $6.88 per share and vesting only if certain conditions are satisfied. The warrants vest and become exercisable December 31, 2002 if Mr. Sikes is employed on that date, and some or all of such warrants vest and become exercisable earlier if specified criteria are attained or a change of control of the Company occurs. The agreement also provides that if the Company terminates Mr. Sikes' employment prior to December 31, 2001 for any reason other than for just cause, the Company will be obligated to pay Mr. Sikes an amount equal to the salary he would have received for the remainder of the term of the agreement plus $360,000. Under the terms of the agreement, if for any reason other than for just cause the Company does not extend Mr. Sikes' employment upon expiration of the term or if, having been Page-45 extended, Mr. Sikes' employment is terminated at any time prior to November 13, 2006, then the Company will pay Mr. Sikes a lump sum payment of $360,000. In the event that specified criteria are attained or a change in control of the Company occurs prior to December 31, 2001 and Mr. Sikes' employment is thereafter terminated, then the Company will be required to pay Mr. Sikes amounts up to $30,000 per month from the date of such termination through November 13, 2006. In April 1997, the Company entered into a two-year employment agreement, effective on April 1, 1997, with Mr. Mohr. The agreement provided for Mr. Mohr to receive an initial monthly salary of $15,000. The agreement provided that if the Company terminated Mr. Mohr's employment during the term of the agreement for any reason other than for cause, the Company would be obligated to pay him his then annual salary for the remainder of the two-year term. In April 1999, the Board of Directors extended Mr. Mohr's employment agreement for a period of two years beyond the original expiration date of April 1, 1999. Mr. Mohr resigned all positions he held in the Company on January 31, 2000. In March 2000, the Company entered into a two-year employment agreement, with Mr. Jones, superceding all prior agreements. The agreement provides for Mr. Jones to receive an initial annual salary of $200,000. The agreement provides that if the Company terminates Mr. Jones' employment during the term of the agreement for any reason other than for cause, the Company will be obligated to pay him his then annual salary for a period of one year. The expiration of the agreement is December 31, 2001. In March 2000, the Company entered into a two-year employment agreement, with Mr. Carrigan, superceding all prior agreements. The agreement provides for Mr. Carrigan to receive an initial annual salary of $159,697. The agreement provides that if the Company terminates Mr. Carrigan's employment during the term of the agreement for any reason other than for cause, the Company will be obligated to pay him his then annual salary for a period of one year. The expiration of the agreement is December 31, 2001. In March 2000, the Company entered into a two-year employment agreement, with Mr. Rhodine, superceding all prior agreements. The agreement provides for Mr. Rhodine to receive an initial annual salary of $160,000. The agreement provides that if the Company terminates Mr. Rhodine's employment during the term of the agreement for any reason other than for cause, the Company will be obligated to pay him his then annual salary for a period of one year. The expiration of the agreement is December 31, 2001. In March 2000, the Company entered into a two-year employment agreement, with Ms. Hanson. The agreement provides for Ms. Hanson to receive an initial annual salary of $125,000. The agreement provides that if the Company terminates Ms. Hanson's employment during the term of the agreement for any reason other than for cause, the Company will be obligated to pay her her then annual salary for a period of one year. The expiration of the agreement is December 31, 2001. Page-46 COMPENSATION OF DIRECTORS. Directors who are not officers of the Company are paid monthly fees of $1,000, plus $1,500 for each Board of Directors' meeting attended in person. Directors are also reimbursed for reasonable expenses for attending Board of Directors' meetings. Non-employee directors of the Company are eligible to be granted nonstatutory stock options under the Company's 1989 Nonstatutory Stock Option plan and the 1995 Plan. In July 1998, December 1999 and January 2000, the Company granted Dr. Howard options to purchase 4,000, 5,000 and 15,000 shares, respectively, of the Company's common stock at the fair market value at the date of such grants. In September 1998, December 1999 and January 2000, the Company granted to Mr. Balzer options to purchase 4,000, 5,000 and 15,000 shares, respectively, of the Company's common stock at the fair market value at the date of such grants. In March 1999, December 1999 and January 2000, the Company granted to Mr. Hugo-Martinez options to purchase 4,000, 5,000 and 15,000 shares, respectively, of the Company's common stock at the fair market value at the date of such grants. The grant of these options was in recognition of the services the named individuals performed as Director's of the Company. COMPENSATION COMMITTEE INTERLOCKS The members of the Company's Compensation Committee during 1999 were Dr. William G. Howard, Albert J. Hugo-Martinez and Eric A. Balzer. There were no executive officers or employees of the Company that were members of the Company's Compensation Committee during 1999. Page-47 Item 12. COMMON STOCK OWNERSHIP PRINCIPAL STOCKHOLDERS AND MANAGEMENT The following table sets forth certain information regarding beneficial ownership of the Company's Common Stock as of April 24, 2000 by: (i) each person who is known by the Company to own beneficially more than 5% of the outstanding shares of the Company's Common Stock; (ii) each of the Company's directors; (iii) each of the Company's executive officers; and (iv) all current directors and executive officers of the Company as a group. The number of outstanding shares used in the calculation of beneficial ownership was 16,096,022. Shares of Common Stock Percent Name of Beneficial Owner(1) Beneficially Owned of Class(2) - --------------------------- ---------------------- ----------- National Electrical Benefit Fund 2,555,377(3) 15.0% 1125 15th Street, N.W., Room 912 Washington, D.C. 20005 CC Investments, LDC 1,317,772(4) 7.8 77 West Wacker Drive, Suite 4040 Chicago, IL 60601 L. David Sikes 181,350(5) 1.1 Greg B. Jones 89,100(6) * Craig W. Rhodine 62,185(7) * Donald G. Carrigan 56,918(8) * William G. Howard 28,000(9) * Albert J. Hugo-Martinez 23,600(10) * Eric A. Balzer 21,000(11) * LuAnn D. Hanson 17,098(12) * All current directors and executive officers as a group (8 persons) 479,251(13) 2.9 - --------------- * Less than one percent (1) Such persons have sole voting and investment power with respect to all shares of Common Stock shown as being beneficially owned by them, subject to community property laws where applicable, except as otherwise indicated in the information contained in these footnotes. Page-48 (2) Pursuant to Rule 13d-3(d)(1)(B), shares of Common Stock issuable upon the exercise of warrants or the conversion of convertible securities held by each person set forth in the table which are currently exercisable or convertible or become exercisable or convertible within 60 days are included in the number of shares of Common Stock outstanding for purposes of determining the percentage ownership of such person. (3) Includes: (i) 1,638,680 shares of Common Stock owned by the Fund; (ii) 905,697 shares of Common Stock issuable upon exercise of warrants held by the Fund which are currently convertible or become exercisable within 60 days; and(iii) 11,000 shares of Common Stock issuable to the Fund pursuant to options which are currently exercisable or become exercisable within 60 days. The trustees of the Fund share voting and dispositive powers as to such shares. To the best knowledge of the Company, the trustees of the Fund are Mr. John M. Grau and Mr. Edwin D. Hill. (4) In a Schedule 13D dated January 31, 2000, CC Investments, LDC, as nominee reported ownership of: (i) 610,634 shares of Common Stock and 707,138 shares of Common Stock issuable upon the exercise of warrants. (5) Includes: (i) 2,100 shares of Common Stock owned directly; and (ii) 179,250 shares issuable to Mr. Sikes pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. (6) Includes: (i) 2,600 shares of Common Stock owned directly; and (ii) 86,500 shares issuable to Mr. Jones pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. (7) Includes: (i) 1,200 shares of Common Stock owned directly; and (ii) 60,985 shares issuable to Mr. Rhodine pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. (8) Includes: (i) 2,168 shares of Common Stock owned directly; and (ii) 54,750 shares issuable to Mr. Carrigan pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. (9) Includes: (i) 28,000 shares issuable to Mr. Howard pursuant to options, which are currently exercisable. (10) Includes: (i) 2,600 shares of Common Stock owned directly; and (ii) 21,000 shares issuable to Mr. Hugo-Martinez pursuant to options, which are currently exercisable. (11) Includes: (i) 21,000 shares of Common Stock issuable to Mr. Balzer pursuant to options, which are currently exercisable. Page-49 (12) Includes: (i) 100 shares of Common Stock owned directly; and (ii) 16,998 shares issuable to Ms. Hanson pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. (13) Includes 468,483 shares of Common Stock issuable to current officers and directors pursuant to options, which are currently exercisable or become exercisable within 60 days after April 24, 2000. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The following are certain transactions entered into between the Company and its officers, directors and principal stockholders or their affiliates since January 1, 1999. TRANSACTIONS INVOLVING THE NATIONAL ELECTRICAL BENEFIT FUND Pursuant to a Stock and Warrant Purchase Agreement dated March 13, 1989 between the Company and the Fund, as amended by Amendment No. 1 thereto dated June 29, 1989 (the "1989 Fund Purchase Agreement"), the Company agreed to pay to the Fund, for as long as the Fund owns at least 5% of the outstanding shares of the Company's Common Stock, a reasonable monthly consulting fee of not more than $5,000 and to reimburse the Fund for all out-of-pocket expenses incurred in monitoring the Fund's investment in the Company. During 1999, the Company was obligated to pay to the Fund approximately $60,000 in payment of such fees and expenses. Payments to the Fund during 1999 included $390,000 in outstanding consulting fees and $524,469 for interest expense related to the note payable due to the Fund. TRANSACTIONS INVOLVING RICHARD L. MOHR See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." TRANSACTIONS INVOLVING DONALD G. CARRIGAN See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." TRANSACTIONS INVOLVING CRAIG W. RHODINE See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." TRANSACTIONS INVOLVING GREG B. JONES See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." Page-50 TRANSACTIONS INVOLVING LUANN D. HANSON See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." TRANSACTIONS INVOLVING L. DAVID SIKES See "Employment Contracts and Termination of Employment and Change-In-Control Agreements." PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this report: (1) Financial Statements. The following Consolidated Financial Statements of the Company and the Report of Independent Accountants are incorporated by reference from the indicated pages of the Company's 1998 Annual Report to Stockholders: Report of Independent Public Accountants Consolidated Balance Sheets as of December 31, 1999 and 1998 Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997 Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the years ended December 31, 1999, 1998 and 1997 Consolidated Statements of Cash Flow for the years ended December 31, 1999, 1998 and 1997 Notes to Consolidated Financial Statements (2) Financial Statement Schedules Schedule II: Valuation and Qualifying Accounts All other schedules are omitted because they are not required, or not applicable, or because the required information is included in the financial statements or notes thereto. 3. Exhibits Exhibit Number ------- 3.1 Certificate of Incorporation of Registrant, as amended. 3.2 Bylaws of Registrant, as amended.(2) Page-51 4.1 Form of Preferred Stock Investment Agreement dated February 25, 1998.(3) 4.2 Form of Preferred Stock Warrant dated February 25, 1998.(3) 4.3 Form of Common Stock Purchase Agreement dated December 23, 1997.(4) 4.4 Form of Common Stock Purchase Warrant dated December 23, 1997.(4) 4.5 Preferred Stock Recapitalization Agreement between the majority of the Series A Preferred Stockholders and the Registrant dated July 30, 1999.(17) 4.6 Supplemental Exchange Rights Agreement between the majority of the Series A Preferred Stockholders and the Registrant dated July 30, 1999.(17) 4.7 Form of Optional Election between the Series A Preferred Stockholders and the Registrant.(17) 4.8 DFA Stockholders Recapitalization Agreement between the DFA Affiliates: DFA Group Trust-6-10 Subtrust, DFA Group Trust - Small Company Subtrust, and U.S. 9-10 Small Company Portfolio, and the Registrant dated as of July 30, 1999.(17) 4.9 Promissory Note in the amount of $648,369 issued to DFA Affiliate, DFA Group Trust - 6-10 Subtrust, by the Registrant dated July 30, 1999.(17) 4.10 Promissory Note in the amount of $1,692,046 issued to DFA Affiliate, DFA Group Trust - Small Company Subtrust, by the Registrant dated July 30, 1999.(17) 4.11 Promissory Note in the amount of $883,297 issued to DFA Affiliate, U.S. 9-10 Small Company Portfolio, by the Registrant dated July 30, 1999.(17) 4.12 Amended Loan Agreement between the National Electrical Benefit Fund and the Registrant dated August 6, 1999.(17) 4.13 Amended and Restated Warrant to purchase 805,697 shares of common stock issued by the Registrant to the National Electrical Fund dated August 6, 1999.(17) 4.14 Amended and Restated Warrant to purchase 100,000 shares of common stock issued by the Registrant to the National Electrical Fund dated August 6, 1999.(17) 4.15 Form of Common Stock and Warrant Purchase Agreement dated December 13, 1999.(19) 4.16 Form of Warrant with an exercise price of $10.813 dated December 13, 1999.(19) 4.17 Form of Warrant with an exercise price of $16.220 dated December 13, 1999.(19) 4.18 Common Stock and Warrant Purchase Agreement dated December 13, 1999 between Castle Creek Technology Partners, LLC and the Registrant.(19) 4.19 Warrant dated December 13, 1999 between Castle Creek Technology Partners, LLC and the Registrant.(19) 4.20 Warrant dated December 13, 1999 between Castle Creek Technology Partners, LLC and the Registrant.(19) Page-52 4.21 Warrant to purchase 372,243 shares of common stock issued by the Registrant to NTC Liquidating Trust dated December 20, 1999. 4.22 Warrant to purchase 220,000 shares of common stock issued by the Registrant to NTC Liquidating Trust dated December 20, 1999. 4.23 Warrant to purchase 667,000 shares of common stock issued by the Registrant to L. David Sikes dated January 18, 2000. 10.1 Registrant's Amended and Restated 1986 Stock Option Plan and forms of Incentive Stock Option Agreement, Nonstatutory Stock Option Agreement and Stock Purchase Agreement.(5) 10.2 Registrant's Amended 1989 Nonstatutory Stock Option Plan and forms of Nonstatutory Stock Option Agreement and Stock Purchase Agreement.(6) 10.3 Form of Invention and Non-Disclosure Agreement between Registrant and employees.(7) *10.4 High-Density FRAM Cooperation Agreement between Registrant and Hitachi, Ltd. dated April 25, 1994.(6) *10.5 Cooperative Agreement for License Manufacturing of FRAM Product between Registration and Rohm Co., Ltd. dated August 3, 1994.(6) 10.6 1995 Stock Option Plan and forms of Incentive Stock Option Agreement and Nonstatutory Stock Option Agreement.(9) 10.7 Employment Agreement effective April 1, 1995 between the Registrant and L. David Sikes.(9) *10.8 Agreement for EDRAM Design and Purchase of Products dated April 26, 1995 between the Registrant and IBM.(10) *10.9 FRAM Technology License Agreement dated July 31, 1995 between the Registrant and Toshiba.(10) *10.10 Symetrix/Ramtron Ferroelectric Cross License Agreement dated as of August 11, 1995 between the Registrant and Symetrix.(11) *10.11 First Amendment to Symetrix/Ramtron Ferroelectric Cross License Agreement dated September 13, 1995 between the Registrant and Symetrix.(10) *10.12 Amendment dated September 21, 1995 to High-Density FRAM Cooperation Agreement between the Registrant and Hitachi.(8) *10.13 Supplement-1 dated September 28, 1995 to Cooperative Agreement for License Manufacturing of FRAM Product between the Registrant and Rohm.(10) *10.14 FRAM Technology License Agreement dated December 19, 1995 between the Registrant and Fujitsu.(10) *10.15 Amendment No. 2 to High-Density FRAM Cooperation Agreement dated March 11, 1996 between the Registrant and Hitachi, Ltd.(1) *10.16 Amendment to Agreement dated August 30, 1996 between the Registrant and Fujitsu.(11) Page-53 10.17 Amendment No. 1 to Registrant's 1989 Nonstatutory Stock Option Plan dated October 24, 1996.(1) 10.18 Amendment No. 1 to Registrant's Amended and Restated 1986 Stock Option Plan dated October 24, 1996.(1) 10.19 Amendment No. 1 to Registrant's 1995 Stock Option Plan dated October 24, 1996.(1) *10.20 FRAM License Agreement dated December 20, 1996 between the Registrant and Samsung Electronics Co., Ltd.(2) 10.21 Employment Agreement effective April 1, 1997 between the Registrant and Richard L. Mohr.(13) *10.22 Joint Development Agreement between the Registrant and ULVAC Japan, Ltd., dated April 9, 1997.(12) *10.23 Amendment No. 3 RF/ID Products to High-Density FRAM Cooperation Agreement dated January 15, 1998 between the Registrant, Racom Systems, Inc. and Hitachi, Ltd.(14) 10.24 Employment Agreement effective January 1, 1998 between the Registrant and Greg B. Jones, dated January 12, 1998.(15) 10.25 Employment Agreement effective July 22, 1998 between the Registrant and Craig W. Rhodine, dated July 22, 1998.(15) *10.26 Joint Development Agreement between Fujitsu Limited and the Registrant dated March 5, 1999.(16) *10.27 Settlement and License Agreement dated November 9, 1999 between NEC and Enhanced Memory Systems, Inc., a subsidiary of the Registrant.(18) *10.28 Agreement between Infineon Technologies AG and Enhanced Memory Systems, Inc., a subsidiary of the Registrant, as amended, dated January 26, 2000.(20) 10.29 Employment Agreement effective September 1, 1999 between the Registrant and Donald G. Carrigan, dated August 29, 1999. *10.30 Second Amendment to FRAM Technology License Agreement between Fujitsu Limited and the Registrant dated September 20, 1999. 10.31 Amendment No. 2 to Registrant's 1995 Stock Option Plan dated December 22, 1999. 10.32 Registrant's 1999 Stock Option Plan. 10.33 Employment Agreement effective January 1, 2000 between the Registrant and L. David Sikes, dated January 18, 2000. 10.34 Employment Agreement effective January 1, 2000 between the Registrant and Donald G. Carrigan, dated February 24, 2000. 10.35 Employment Agreement effective January 1, 2000 between the Registrant and Craig W. Rhodine, dated February 24, 2000. 10.36 Employment Agreement effective January 1, 2000 between the Registrant and Greg B. Jones, dated February 24, 2000. 10.37 Employment Agreement effective January 1, 2000 between the Registrant and LuAnn D. Hanson, dated February 24, 2000. Page-54 23.1 Consent of Independent Public Accountants 27.1 Financial Data Schedule * Confidential treatment has been granted or requested with respect to portions of this exhibit, and such confidential portions have been deleted and separately filed with the Securities and Exchange Commission pursuant to Rule 24b-2 or Rule 406. - ----------- (1) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1996 filed with the Securities and Exchange Commission on March 26, 1997. (2) Incorporated by reference to the Company's Amendment No. 1 to the Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1996 filed with the Securities and Exchange Commission on August 29, 1997. (3) Incorporated by reference to the Company's Form 8-K (Commission File No. (0-17739) filed with the Securities and Exchange Commission on March 4, 1998. (4) Incorporated by reference to the Company's Registration Statement Form S-3 (Registration No. 333-47615) filed with the Securities and Exchange Commission on March 10, 1998. (5) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended June 30, 1991, filed with the Securities and Exchange Commission on September 30, 1991. (6) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1994 filed with the Securities and Exchange Commission on April 17, 1995. (7) Incorporated by reference to Amendment No. 1 to the Company's Annual Report on Form 10-K under cover of Form 8 (Commission File No. 0-17739) for the year ended June 30, 1991, filed with the Securities and Exchange Commission on November 6, 1991. (8) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1992 filed with the Securities and Exchange Commission on March 31, 1993. (9) Incorporated by reference to the Company's Form S-1 Registration Statement (Registration No. 33-99898) filed with the Securities and Exchange Commission on December 1, 1995. (10) Incorporated by reference to the Company's Amendment No. 2 to the Form S-1 Registration Statement (Registration No. 33-99898) filed with the Securities and Exchange Commission on January 31, 1996. Page-55 (11) Incorporated by reference to the Company's Amendment No. 2 to the Form 10-Q (Commission File No. 0-17739) for the quarter ended September 30, 1996 and filed with the Securities and Exchange Commission on January 23, 1997. (12) Incorporated by reference to the Company's Form 10-Q (Commission File No. 0-17739) for the quarter ended March 31, 1997 filed with the Securities and Exchange Commission on May 14, 1997. (13) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1997 filed with the Securities and Exchange Commission on March 30, 1998. (14) Incorporated by reference to the Company's Form 10-Q (Commission File No. 0-17739) for the quarter ended March 31, 1998 filed with the Securities and Exchange Commission on May 15, 1998. (15) Incorporated by reference to the Company's Annual Report on Form 10-K (Commission File No. 0-17739) for the year ended December 31, 1998 filed with the Securities and Exchange Commission on March 26, 1999. (16) Incorporated by reference to the Company's Form 10-Q (Commission File No. 0-17739) for the quarter ended March 31, 1999 filed with the Securities and Exchange Commission on May 14, 1999. (17) Incorporated by reference to the Company's Form 8-K (Commission File No. 0-17739) filed with the Securities and Exchange Commission on August 31, 1999. (18) Incorporated by reference to the Company's Form 8-K (Commission File No. 0-17739) filed with the Securities and Exchange Commission on November 16, 1999. (19) Incorporated by reference to the Company's Form 8-K (Commission File No. 0-17739) filed with the Securities and Exchange Commission on December 27, 1999. (20) Incorporated by reference to the Company's Form 8-K (Commission File No. 0-17739) filed with the Securities and Exchange Commission on February 18, 2000. (b) Reports on Form 8-K: On March 2, 1999, the Registrant filed a report on Form 8-K. The items reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On May 4, 1999, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." Page-56 On July 2, 1999, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On July 21, 1999, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On August 31, 1999, the Registrant filed a report on Form 8-K. The items reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On November 16, 1999, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On December 27, 1999, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On February 18, 2000, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." On March 17, 2000, the Registrant filed a report on Form 8-K. The item reported were Item 5 - "Other Events" and Item 7 - "Financial Statements and Exhibits." (c) Exhibits - See the list of Exhibits under Item 14(a)3 of this Form 10-K. (d) Financial Statement Schedules - See the list of Schedules under Item 14(a)2 of this Form 10-K. Page-57 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of El Paso, State of Colorado, on April 27, 2000. RAMTRON INTERNATIONAL CORPORATION By: /S/ L. David Sikes ----------------------- L. David Sikes Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the date indicated. Signature Title Date - -------------------------- ---------------------------- -------------- /S/ L. David Sikes - -------------------------- Chairman and Chief Executive 4-27-00 L. David Sikes Officer /S/ William G. Howard - ------------------------- Director 4-27-00 William G. Howard /S/ Eric A. Balzer - ------------------------- Director 4-27-00 Eric A. Balzer /S/ Albert J. Hugo-Martinez - --------------------------- Director 4-27-00 Albert J. Hugo-Martinez /S/ Greg B. Jones - ------------------------- Director, President and 4-27-00 Greg B. Jones Chief Operating Officer /S/ LuAnn D. Hanson - ------------------------- Acting Chief Financial Officer 4-27-00 LuAnn D. Hanson and Vice President of Finance Page-58 EX-3.1 2 CERTIFICATE OF INCORPORATION STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF INCORPORATION OF AMTEC SECURITIES CORPORATION FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF JANUARY, A.D. 1984, AT 9 0'CLOCK A.M. /S/ Glenn C. Kenton -------------------- Glenn C. Kenton, Secretary of State AUTHENTICATION: :0161434 DATE: 01/18/1984 Page-59 CERTIFICATE OF INCORPORATION OF AMTEC SECURITIES CORPORATION FIRST. The name of the Corporation is: AMTEC SECURITIES CORPORATION SECOND. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD. The nature of the business or purposes to be conducted or promoted by the Corporation is as follows: To acquire, develop, license, sell and otherwise market technology of all kinds, to manufacture, have manufactured, license, sell and otherwise market products utilizing such technology, to make investments in and to enter into joint ventures, partnerships and other business ventures with respect to the foregoing. To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares of stock which the Corporation shall have authority to issue is 20,000,000 shares of Common Stock, $.01 par value per share. FIFTH. The name and mailing address of the sole incorporator are as follows: NAME MAILING ADDRESS - ------------------- ----------------- GENE T. BARTON, JR. C/O HALE AND DORR 60 State Street Boston, MA 02109 SIXTH. In furtherance of and not in limitation of powers conferred by statute, it is further provided: 1. Election of directors need not be by written ballot. 2. The Board of Directors is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation. Page-60 SEVENTH. Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for the Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or any receiver or receivers appointed for the Corporation under the provisions of section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation. EIGHTH. The Corporation reserves the right to amend, alter, change or repeal any provision continued in this Certificate of Incorporation, in the manner now or hereafter prescribed by statue and the Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. EXECUTED at Boston, on January 12, 1984. Page-61 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, GLENN C. KENTON, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF AMTEC SECURITIES CORPORATION FILED IN THIS OFFICE ON THE SEVENTEENTH DAY OF AUGUST, A.D. 1984, AT 10 0'CLOCK A.M. /S/ Glenn C. Kenton -------------------- Glenn C. Kenton, Secretary of State AUTHENTICATION: :0314628 DATE: 08/28/1984 Page-62 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION The undersigned, David R. Teplitzky and Ellen B. Corenswet, the President and Secretary, respectively, of Amtec Securities Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY: FIRST: That the Board of Directors of Amtec Securities Corporation, by a written action in lieu of a meeting, adopted a resolution setting forth a proposed amendment to the Certificate of Incorporation of said corporation. The resolution setting forth the proposed amendment is as follows: RESOLVED: That Article Fourth of the Certificate of Incorporation of the corporation be amended to read as follows: "FOURTH. The total number of shares of capital stock which the corporation shall have authority to issue shall be thirty million (30,000,000) shares of Common Stock, $.01 par value per share." SECOND: That said amendment to the corporation's Certificate of Incorporation was ratified by a majority of the stockholders of the corporation pursuant to a written action in lieu of a meeting dated August 15, 1984. THIRD: That the foregoing amendment to the Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of said corporation will not be reduced under or by reason of said amendment. IN WITNESS WHEREOF, Amtec Securities Corporation has caused this certificate to be signed by David R. Teplitzky, its President, and attested by Ellen B. Corenswet, its Secretary, this 15th day of August, 1984. AMTEC SECURITIES CORPORATION /S/ David R. Teplitzky By: ---------------------- President ATTEST: /S/ Ellen B. Corenswet By: ----------------------- Secretary Page-63 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF AMTEC SECURITIES CORPORATION FILED IN THIS OFFICE ON THE SIXTH DAY OF JUNE, A.D. 1985, AT 10 0'CLOCK A.M. /S/ Michael Harkins -------------------- Michael Harkins, Secretary of State AUTHENTICATION: :0522211 DATE: 06/07/1985 Page-64 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION The undersigned, David R. Teplitzky and Ellen B. Corenswet, the President and Secretary, respectively, of Amtec Securities Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DO HEREBY CERTIFY: FIRST: That the Board of Directors of Amtec Securities Corporation by a written action in lieu of a meeting, adopted a resolution setting forth a proposed amendment to the Certificate of Incorporation of said corporation. The resolution setting forth the proposed amendment is as follows: RESOLVED: That Article Fourth of the Certificate of Incorporation of the corporation be amended to read as follows: "FOURTH. The total number of shares of capital stock which the corporation shall have authority to issue shall be forty million (40,000,000) shares of Common Stock, $.01 par value per share." SECOND: That said amendment to the corporation's Certificate of Incorporation was ratified by a majority of the stockholders of the corporation pursuant to a written action in lieu of a meeting dated April 23, 1985. THIRD: That the foregoing amendment to the Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 228 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of said corporation will not be reduced under or by reason of said amendment. IN WITNESS WHEREOF, Amtec Securities Corporation has caused this certificate to be signed by David R. Teplitzky, its President, and attested by Ellen B. Corenswet, its Secretary, this 23 day of April, 1985. AMTEC SECURITIES CORPORATION /S/ David R. Teplitzky By: ---------------------- President ATTEST: /S/ Ellen B. Corenswet By: ----------------------- Secretary Page-65 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF AMTEC SECURITIES CORPORATION FILED IN THIS OFFICE ON THE TWENTY- SEVENTH DAY OF JANUARY, A.D. 1988, AT 9 0'CLOCK A.M. /S/ Michael Harkins -------------------- Michael Harkins, Secretary of State AUTHENTICATION: :1562788 DATE: 01/27/1988 Page-66 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF AMTEC SECURITIES CORPORATION, a Delaware Corporation The undersigned, Ross Lyndon-James and William G. Skolout, hereby certify that they are the President and Secretary, respectively, of Amtec Securities Corporation, a Delaware Corporation (the "Corporation"), and further certify that: FIRST: That the Board of Directors of the Corporation, adopted resolutions setting forth proposed amendments to the Certificate of Incorporation of the Corporation. The resolutions setting forth the proposed amendments state as follows: "NOW, THEREFORE, BE IT RESOLVED, that Article Fourth of the Certificate of Incorporation of the Corporation be amended to read as follows: 'FOURTH: The total number of the shares of capital stock which the Corporation shall have authority to issue shall be sixty million (60,000,000) shares of common stock, $.01 par value per share.'" NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Corporation change its name to Ramtron International Corporation and that Article First of the Certificate of Incorporation be so amended". SECOND: That said Amendments to the Corporation's Certificate of Incorporation were ratified by the holder of a majority of the outstanding shares of common stock of the corporation pursuant to a Board Resolution. THIRD: That written notice of such Amendments to the Corporation's Certificate of Incorporation have been given to shareholders who did not consent in writing, as provided in Section 228 (c) of the Delaware General Corporation Law. FOURTH: That the foregoing amendments to the Corporation's Certificate of Incorporation have been duly adopted in accordance with the provisions of Sections 242 and 228 of the Delaware General Corporation Law. FIFTH: That the capital of said Corporation will not be reduced under or by reason of said amendments. IN WITNESS WHEREOF, Amtec Securities Corporation has caused the Certificate to be signed by Ross Lyndon-James, its President, and attested by William G. Skolout, its Secretary, this 23 day of October, 1987. AMTEC SECURITIES CORPORATION /S/ Ross Lyndon-James By: ---------------------- President ATTEST: /S/ William G. Skolout By: ----------------------- Secretary Page-67 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF RAMTRON INTERNATIONAL CORPORATION FILED IN THIS OFFICE ON THE THIRTEENTH DAY OF MARCH, A.D. 1989, AT 10 0'CLOCK A.M. /S/ Michael Harkins -------------------- Michael Harkins, Secretary of State AUTHENTICATION: :2096663 DATE: 03/13/1989 Page-68 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF RAMTRON INTERNATIONAL CORPORATION Ramtron International Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify: FIRST: That at a meeting of the Board of Directors of Ramtron International Corporation, resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation of said corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of said corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows: RESOLVED, that Article FOURTH of the Corporation's Certificate of Incorporation be and, subject to the approval of a majority of the holders of the Corporation's outstanding shares, is hereby amended to increase the authorized number of shares of the existing Common Stock from 60,000,000 shares to 100,000,000 shares; and to create a new class of 25,000,000 shares of Nonvoting Common Stock, denominated Class A Nonvoting Common Stock, with a par value of $0.01 per share, and to state the rights of those shares, which said Article FOURTH is amended to read in full as follows: "FOURTH. The total number of shares of all classes of common stock which the Corporation shall have authority to issue is 125,000,000 shares, all of which shall be of the par value of one cent ($0.01) each. The common stocks shall be divided into two classes, consisting of 100,000,000 shares designated Common Stock and 25,000,000 shares designated Class A Nonvoting Common Stock. The powers, preferences and rights of the Common Stock and the Class A Nonvoting Common Stock shall be identical in all respects, share for share, except that the shares of Common Stock shall entitle the holder thereof to one (1) vote for each share on all matters on which stockholders are entitled or required to vote, and the shares of Class A Nonvoting Common Stock shall not entitle the holder thereof to any voting rights whatever. No dividends may be declared or paid and no other distributions of cash, securities or property may be made by the Corporation in respect of any shares of Common Stock unless simultaneously therewith a dividend or distribution identical on a per-share basis is declared, paid or made, as the case may be, in respect of all outstanding shares of Class A Nonvoting Common Stock. The Corporation may not enter into any agreement to effect any merger, consolidation or similar transaction, or effect any merger, consolidation or similar transaction, that provides or results in the conversion, exchange or repurchase of shares of its Common Stock and Class A Nonvoting Common Stock unless the consideration to be received by the holders thereof is identical on a per-share basis. This amendment shall be effective at 4:15 P.M. on the date that such amendment is filed with the Secretary of State of the State of Delaware." Page-69 SECOND: That thereafter, pursuant to resolution of its Board of Directors, a majority of the stockholders of said corporation, in accordance with Section 228 of the General Corporation Law of the State of Delaware, consented in writing to the amendment and gave prompt written notice of the taking of such corporate action to those stockholders who did not consent thereto in writing. The necessary number of shares as required by statute was voted in favor of the amendment. THIRD: That said amendment was duly adopted in accordance with the provisions of Sections 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Ramtron International Corporation has caused this certificate to be signed by Richard Horton, its President, and Jerald A. Bollinger, its Secretary, this 13 day of March, 1989. RAMTRON INTERNATIONAL CORPORATION /S/ Richard L. Horton By: ---------------------- President ATTEST: /S/ Jerald A. Bollinger By: ------------------------ Secretary Page-70 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL HARKINS, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF RAMTRON INTERNATIONAL CORPORATION FILED IN THIS OFFICE ON THE NINETEENTH DAY OF APRIL, A.D. 1991, AT 9 0'CLOCK A.M. /S/ Michael Harkins -------------------- Michael Harkins, Secretary of State AUTHENTICATION: *3826688 DATE: 04/23/1991 Page-71 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Ramtron International Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, at a meeting duly held, adopted a resolution proposing and declaring advisable the following amendments to the Certificate of Incorporation of said corporation: RESOLVED, that the Certificate of Incorporation of Ramtron International Corporation be amended by changing the FOURTH Article thereof so that, as amended, said Article shall be and read as follows: "FOURTH. The total number of shares of capital stock which the Corporation shall have authority to issue is 145,000,000 shares, consisting of 125,000,000 shares of Common Stock, $0.01 par value per share (the "Common"), and 20,000,000 shares of Preferred Stock, $0.01 par value per share (the "Preferred"). The Common Shall be divided into two classes, consisting of 100,000,000 shares designated Common Stock and 25,000,000 shares designated Class A Nonvoting Common Stock. The powers, preferences and rights of the Common Stock and the Class A Nonvoting Common Stock shall be identical in all respects, share for share, except that the shares of Common Stock shall entitle the holder thereof to one (1) vote for each share on all matters on which stockholders are entitled or required to vote, and the shares of Class A Nonvoting Common Stock shall not entitle the holder thereof to any voting rights, with the exception that holders of Class A Nonvoting Common Stock may vote, together with the holders of Common Stock as a single class, on the proposed liquidation or dissolution of the Corporation, the sale of substantially all of the assets of the Corporation in one transaction or a series of related transactions and on the proposed merger or consolidation of the Corporation with another corporation or entity. No dividends may be declared or paid and no other distributions of cash, securities or property may be made by the Corporation in respect of any shares of Common Stock unless simultaneously therewith a dividend or distribution identical on a per-share basis is declared, paid or made, as the case may be, in respect of all outstanding shares of Class A Nonvoting Common Stock. The Corporation may not enter into any agreement to effect any merger, consolidation or similar transaction, or effect any merger, consolidation or similar transaction, that provides or results in the conversion, exchange or repurchase of shares of its Common Stock and Class A Nonvoting Common Stock unless the consideration to be received by the holders thereof is identical on a per-share basis. Page-72 The board of directors is authorized, subject to any limitation prescribed by Law, to provide for the issuance of the shares of Preferred in one or more series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of Preferred, or of any series thereof, unless a vote of such holders, is required pursuant to the certificate or certificates establishing the series of Preferred." FURTHER RESOLVED, that the Certificate of Incorporation of Ramtron International Corporation be amended by adding a new NINTH Article thereof so that said Article shall be and read as follows: "NINTH. The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by paragraph (7) of subsection (b) of Section 102 of the General Corporation Law of the State of Delaware, as may be hereafter amended and supplemented." SECOND: That at a meeting duly held, the majority of stockholders have given consent to said amendments in accordance with the provisions of Section 216 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendments were duly adopted in accordance with the applicable provisions of Section 216 and 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Ramtron International Corporation has caused this certificate to be signed by Richard L. Horton, its President, and attested by David M. Becker, its Secretary, this 18 day of April, 1991. RAMTRON INTERNATIONAL CORPORATION /S/ Richard L. Horton By: ---------------------- President ATTEST: /S/ David M. Becker By: -------------------- Secretary Page-73 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF OWNERSHIP OF RAMTRON INTERNATIONAL CORPORATION, A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, MERGING RAMTRON CORPORATION A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, PURSUANT TO SECTION 253 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-THIRD DAY OF DECEMBER, A.D. 1991, AT 9 0'CLOCK A.M. AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID CORPORATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE. /S/ Michael Ratchford --------------------- Michael Ratchford, Secretary of State AUTHENTICATION: *3340594 DATE: 02/10/1992 Page-74 CERTIFICATE OF OWNERSHIP AND MERGER Pursuant to the provisions of Section 253 of the Delaware Corporation Code, the undersigned, Ramtron International Corporation, a Delaware Corporation ("Corporation"), adopts the following Certificate of Ownership and Merger for the purpose of merging Ramtron Corporation, a Delaware Corporation ("Subsidiary"), into the Corporation: 1. The name of the Corporation is Ramtron International Corporation. 2. The name of the Subsidiary is Ramtron Corporation. 3. The Corporation owns One Hundred Percent (100%) of the issued and outstanding capital stock of the Subsidiary. 4. Pursuant to the Resolution of the Board of Directors of the Corporation attached hereto as Exhibit "A," on June 18, 1991 the Board of Directors of the Corporation authorized and approved in writing the merger of the Subsidiary into the Corporation, such merger to be effective as of December 4, 1991. 5. All debts, obligations, and liabilities of the Subsidiary have been and shall be assumed and discharged by the Corporation effective as of the date of such merger. 6. All of the rights, property, and assets of the Subsidiary have been and shall be transferred, conveyed, and assigned to the Corporation effective as of the date of such merger. Dated: December 4, 1991 RAMTRON INTERNATIONAL CORPORATION, A Delaware Corporation By: /S/George J. Stathakis ---------------------- George J. Stathakis, Chief Executive Officer By: /S/David M. Becker --------------------- David M. Becker, Secretary Page-75 EXHIBIT A RESOLUTION OF THE BOARD OF DIRECTORS OF RAMTRON INTERNATIONAL CORPORATION RESOLVED, that the Board of Directors of Ramtron International Corporation, a Delaware Corporation ("Corporation"), deems it desirable and in the best interest of the Corporation and its shareholders that the Corporation cause Ramtron Corporation, a Delaware Corporation ("Subsidiary"), to be merged into the Corporation pursuant to Section 253 of the Delaware Corporation Code, with the Corporation surviving such merger ("Merger"), and that, in connection therewith, the Corporation assume all the obligations and liabilities of the Subsidiary and succeed to all of the rights, properties and assets of the Subsidiary. FURTHER RESOLVED, that the Chief Executive Officer, President, any Vice President, Chief Financial Officer and each other officer of the Corporation be, and each of them hereby is, authorized, for and in the name and on behalf of the Corporation to take or cause to be taken such action and to execute and deliver or cause to be executed and delivered, all such instruments and agreements as any such officer may deem to be necessary or advisable in order to consummate the Merger, to effect the purposes and intentions of the foregoing resolutions, and to be in the best interest of the Corporation (as conclusively evidenced by the taking of such action or the execution and delivery of such instruments or documents, as the case may be, by or under the direction of any such officer), including, without limitation, the execution and filing of any certificate of ownership and merger, together with a copy of these resolutions, and all actions heretofore taken by each of such officers of the Corporation in connection with the subjects of the foregoing resolutions be, and they hereby are, approved, ratified and confirmed in all respects as the acts and deeds of the Corporation. FURTHER RESOLVED, that any specific resolutions required for the purposes of carrying out the transactions contemplated by the foregoing resolutions, including, without limitation, the Merger, are hereby deemed adopted and may be certified as having been adopted by the Board of Directors of the Corporation provided that a copy thereof is inserted in the minute book of the Corporation following these resolutions. Page-76 STATE OF DELAWARE OFFICE OF SECRETARY OF STATE I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT OF "RAMTRON INTERNATIONAL CORPORATION" FILED IN THIS OFFICE ON THE TWENTY-NINTH DAY OF JUNE, A.D. 1992, AT 9 0'CLOCK A.M. /S/ Michael Ratchford --------------------- Michael Ratchford, Secretary of State AUTHENTICATION: *3502661 DATE: 06/29/1992 Page-77 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Ramtron International Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware. DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, at a meeting held, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation. "FOURTH. The total number of shares of capital stock which the Corporation shall have authority to issue is 63,500,000, consisting of 53,500,000 shares of Common Stock, $0.01 par value per share (the "Common"), and 10,000,000 shares of Preferred Stock, $0.01 par value per share (the "Preferred"). The Common shall be divided into two classes, consisting of 50,000,000 shares designated Common Stock and 3,500,000 shares designated Class A Nonvoting Common Stock. The powers, preferences and rights of the Common Stock and the Class A Nonvoting Common Stock shall be identical in all respects, share for share, except that the shares of Common Stock shall entitle the holder thereof to one (1) vote for each share on all matters on which stockholders are entitled or required to vote, and the shares of Class A Nonvoting Common Stock shall not entitle the holder thereof to voting rights, with the exception that holders of Class A Nonvoting Common Stock may vote, together with the holders of Common Stock as a single class, on the proposed liquidation or dissolution of the Corporation, the sale of substantially all of the assets of the Corporation in one transaction or a series of related transactions and on the proposed merger or consolidation of the Corporation with another corporation or entity. No dividends may be declared or paid and no other distributions of cash, securities or property may be made by the Corporation in respect of any shares of Common Stock unless simultaneously therewith a dividend or distribution identical on a per-share basis is declared, paid or made, as the case may be, in respect of all outstanding shares of Class A Nonvoting Common Stock. The Corporation may not enter into any agreement to effect any merger, consolidation or similar transaction, or effect any merger, consolidation or similar transaction, that provides or results in the conversion, exchange or repurchase of shares of its Common Stock and Class A Nonvoting Common Stock unless the consideration to be received by the holders thereof is identical on a per-share basis. Page-78 At the effective time of this amendment, each outstanding share of Common Stock and shares of Common Stock held as treasury shares shall be converted into and be reconstituted as one-seventh share of Common Stock. No fractional shares shall be issued upon such conversion and reconstitution, and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share. If a fractional interest in a share of Common Stock would, except for the provisions of the preceding sentence, be deliverable upon such conversion and reconstitution, the Corporation shall pay an amount in cash equal to the fair market value of such fractional interest, as determined by the Corporation's Board of Directors, to each holder of Common Stock to whom such fractional interest would have been deliverable. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred in one or more series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred, or of any series thereof, unless a vote of such holders is required pursuant to the certificate or certificates establishing the series of Preferred." SECOND: That holders of a majority of the outstanding common stock of the Company have approved said amendment by written consent in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendments were duly adopted in accordance with the applicable provisions of Section 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Ramtron International Corporation has caused this certificate to be signed by Richard L. Horton, its President, and attested by David M. Becker, its Secretary, this 5th day of June 1992. Ramtron International Corporation By: /S/ George J. Stathakis ----------------------- George J. Stathakis, Chief Executive Officer ATTEST: By: /S/ David M. Becker ------------------- David M. Becker, Secretary Page-79 STATE OF DELAWARE OFFICE OF THE SECRETARY OF STATE I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF "RAMTRON INTERNATIONAL CORPORATION" FILED IN THIS OFFICE ON THE SIXTEENTH DAY OF NOVEMBER, A.D. 1992, AT 1:43 0'CLOCK P.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE COUNTY RECORDER OF DEEDS ON THE SIXTEENTH DAY OF NOVEMBER, A.D. 1992 FOR RECORDING. /S/ Michael Ratchford --------------------- Michael Ratchford, Secretary of State AUTHENTICATION: *3661985 DATE: 11/16/1992 Page-80 CERTIFICATE OF DESIGNATION, PREFRENCES, RIGHTS, AND LIMITATIONS OF SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK, $14 PAR VALUE OF RAMTRON INTERNATIONAL CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware RAMTRON INTERNATIONAL CORPORATION (hereinafter called the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify: THAT, pursuant to authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Corporation, and pursuant to the providing of Section 151 of the Delaware Corporation Law, said Board of Directors, at a meeting duly held on October 30, 1992, duly adopted a resolution providing for the issuance of a series of 1,365,046 shares of Series A Cumulative Convertible Preferred Stock, $0.01 Par Value, which resolution is as follows: RESOLVED, that pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, as amended, a series of Preferred Stock of the Corporation be and it hereby is given the distinctive designation of Series A Cumulative Convertible Preferred Stock, $0.01 Par Value (hereinafter referred to as the "Series A Preferred Stock"), said Series to consist of 1,365,046 shares of the par value of $0.01 per share, of which the preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, shall be as follows: 1. Dividends on Series A Preferred Stock. The holders of the Series A Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors out of the funds of the Corporation legally available therefor, cumulative dividends at the annual rate of eight percent (8%) per annum calculated on a stated value of $14.00 per share of Series A Preferred Stock; provided, however, that dividends on the Series A Preferred Stock shall be payable only in Common Stock of the Corporation which, for purposes of such dividends, shall have a deemed value of $14.00 per share of Common Stock. Any fractional shares of the Corporation's Common Stock otherwise issuable pursuant to this paragraph shall be rounded to the nearest whole share. If the dividend on the Series A Preferred Stock for any dividend period shall not have been paid or set apart in full for the Series A Preferred Stock, the aggregate deficiency shall be cumulative and shall be fully paid or set apart for payment before any dividends shall be paid upon or set apart for payment for any class of Common Stock of the Corporation. Accumulations of dividends on the Series A Preferred Stock shall not bear interest. Page-81 2. Conversion of Series A Preferred Stock into Common Stock. (a) Subject to the provisions of this paragraph 2, the holder of record of any share or shares of Series A Preferred Stock shall have the right, at his option, at any time after the issuance of said shares and prior to June 30, 1993, to convert each said share of Series A Preferred Stock into one fully paid and non-assessable share of Common Stock of the Corporation. (b) Any holder of a share of Series A Preferred Stock desiring to convert such Series A Preferred Stock into Common Stock of the Corporation shall surrender the certificate or certificates representing the share or shares of Series A Preferred Stock so to be converted, duly indorsed to the Corporation or in blank, at the principal office of the Corporation (or such other place as may be designated by the Corporation), and shall given written notice to the Corporation at said office that he elects to convert the same, and setting forth the name or names (with the address or addresses) in which the shares of Common Stock are to be issued. If the last day for the exercise of the conversion right in the city where the principal place of business of the Corporation (or in the city of the principal office of such other entity as the Corporation shall have designated as the place so to surrender Series A Preferred Stock for conversion, as aforesaid) shall be a legal holiday or a day on which banking institutions are authorized by law to close, then such conversion right may be exercised in such city on the next succeeding day not in such city a legal holiday or a day on which banking institutions are authorized by law to close. (c) Conversion of the Series A Preferred Stock shall be subject to the following additional terms and provisions: (1) As promptly as practicable after the surrender for conversion of any Series A Preferred Stock, the Corporation shall deliver or cause to be delivered at the principal office of the Corporation (or such other place as may be designated by the Corporation), to or upon the written order of the holder of such Series A Preferred Stock, certificates representing the shares of Common Stock issuable upon such conversion, issued in such name or names as such holder may direct. Shares of the Series A Preferred Stock shall be deemed to have been converted as of the close of business on the date of the surrender of the Series A Preferred Stock for conversion, as provided above, and the rights of the holders of such Series A Preferred Stock shall cease at such time, and the person or persons in whose name or names the certificates for such shares are to be issued shall be treated for all purposes as having become the record holder or holders of such Common Stock at such time; provided, however, that any such surrender on any date when the stock transfer books of the Corporation shall be closed shall constitute the person or persons in whose name or names the certificates for such shares are to be issued as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open. Page-82 (2) The Corporation shall at the time of such conversion pay to the holder of record of any share or shares of Series A Preferred Stock any accrued but unpaid dividends on said Series A Preferred Stock so surrendered for conversion, in accordance with paragraph (1) above. (3) In the event that the Corporation shall at any time subdivide or combine into a greater or lesser number of shares the outstanding shares of Common Stock, the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock shall be proportionately increased in the case of subdivision or decreased in the case of combination, effective in either case at the close of business on the date when such subdivision or combination shall become effective. (4) No adjustment of the conversion ratio shall be made by reason of the issuance, other than as provided in subparagraph (3) above, of any shares of Common Stock of the Corporation, or of any securities convertible into shares of Common Stock or other securities of the Corporation, or of any rights, warrants or options to subscribe for or purchase shares of Common Stock or other securities of the Corporation, or of any other securities of the Corporation, provided that in the event the Corporation offers any of its Common Stock pursuant to any rights that may be granted to such holders of Common Stock by the Board of Directors of the Corporation, the Corporation shall mail written notice of such offer to the holders of the Series A Preferred Stock then of record at least twenty (20) days prior to the record date for the determination of holders of the Common Stock entitled to receive any such offer. (5) The Corporation shall at all times reserve and keep available solely for the purpose of issue upon conversion of Series A Preferred Stock, as herein provided, such number of shares of Common Stock as shall be issuable upon the conversion of all outstanding shares of Series A Preferred Stock. 3. Redemption of Series A Preferred Stock. (a) The Series A Preferred Stock shall be redeemed mandatorily without further action or resolution of the Corporation's Board of Directors, on June 30, 1993, if the Series A Preferred Stock has not been converted into Common Stock, as provided in paragraph 2 above, prior to such date. Each share of Series A Preferred Stock shall be redeemed for one fully paid and non-assessable share of Common Stock of the Corporation. (b) Upon such redemption date, the holders of shares of Series A Preferred Stock shall cease to be stockholders with respect to such shares and shall have no interest in or claim against the Corporation by virtue thereof and shall have no voting or other rights with respect to such shares, except the right to receive the shares of Common Stock of the Corporation payable upon such redemption from the Corporation upon surrender (and indorsement, if required by the Corporation) of the certificates, and the shares represented thereby shall no longer be deemed to be outstanding. Page-83 (c) The Corporation shall, at the time of such redemption, pay to the holder of record of any share or shares of Series A Preferred Stock any accrued but unpaid dividends on said Series A Preferred Stock so surrendered for redemption, in accordance with paragraph 1 above. (d) The Corporation shall at all times reserve and keep available solely for the purpose of issue upon redemption of Series A Preferred Stock, as herein provided, such number of shares of Common Stock as shall be issuable upon the redemption of all outstanding shares of Series A Preferred Stock. 4. Voting Rights. Except as may be otherwise provided in this Certificate of Incorporation or by applicable law, the holder(s) of Series A Preferred Stock shall not be entitled to any vote in respect of such Series A Preferred Stock at any meeting of stockholders of the Corporation. 5. Redemption of Series A Preferred Stock in the Event of Dissolution. In the event of any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or otherwise, the holders of the Series A Preferred Stock shall be entitled to receive one fully paid and non-assessable share of Common Stock of the Corporation for each share of Series A Preferred Stock, plus an amount of Common Stock, calculated in accordance with paragraph 1 above, equal to all dividends accrued and unpaid on each such share up to the date fixed for distribution. Thereafter, the holders of such Common Stock shall be treated equally with the other holders of Common Stock of the Corporation with respect to such liquidation, dissolution or winding-up of the affairs of the Corporation. 6. Limitations on Corporation; Shareholder Consent. So long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote or the written consent, as provided by law, of the holders of at least two-thirds (2/3) of the outstanding shares of Series A Preferred Stock, voting as a class, change the preferences, rights or limitations with respect to the Series A Preferred Stock in any material respect prejudicial to the holders thereof, or increase the authorized number of shares of Series A Preferred Stock; but nothing herein contained shall require such a class vote or consent (a) in connection with any increase or decrease in the total number of authorized shares of Common Stock, (b) in connection with the authorization, designation, increase or issuance of any class or series of stock ranking on a party with the Series A Preferred Stock, (c) in connection with the creation of additional series of Preferred Stock, having such powers and relative, participating, optional or other special rights as shall be stated in the resolution or resolutions providing for the issue of such series of Preferred Stock as may be adopted thereof, in accordance with the laws of the State of Delaware, or (d) in connection with the issuance of any presently authorized but unissued shares of Preferred Stock. Page-84 IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate to be executed by its President and by its Secretary, this 12th day of November, 1992. L. David Sikes /S/ L. David Sikes - ------------------ President David M. Becker /S/ David M. Becker - ------------------- Secretary Page-85 STATE OF DELAWARE OFFICE OF THE SECRETARY OF STATE I, WILLIAM T. QUILLEN, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF STOCK DESIGNATION OF "RAMTRON INTERNATIONAL CORPORATION" FILED IN THIS OFFICE ON THE TENTH DAY OF DECEMBER, A.D. 1993, AT 3 0'CLOCK P.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE COUNTY RECORDER OF DEEDS ON THE THIRTEENTH DAY OF DECEMBER, A.D. 1993 FOR RECORDING. /S/ William T. Quillen ---------------------- William T. Quillen, Secretary of State AUTHENTICATION: *4187627 DATE: 12/13/1993 Page-86 CERTIFICATE OF DESIGNATIONS, PREFRENCES, RIGHTS, AND LIMITATIONS OF SERIES B CONVERTIBLE PREFERRED STOCK AND SERIES C CONVERTIBLE PERFORMANCE RIGHT PREFERRED STOCK OF RAMTRON INTERNATIONAL CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware RAMTRON INTERNATIONAL CORPORATION (hereinafter called the "Corporation"), a Delaware corporation, does hereby certify: THAT, pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Corporation, and pursuant to the provisions of Section 151 of the Delaware Corporation Law, said Board of Directors, at a meeting held on December 1, 1993, duly adopted the following resolutions; providing for the issuance of a series of 3,600,000 shares of Series B Convertible Preferred Stock and a series of 3,600,000 shares of Series C Convertible Performance Right Preferred Stock: I. Series B Convertible Preferred Stock. RESOLVED, that pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in the Certificate of Incorporation, as amended, a series of Preferred Stock of the Corporation be and it hereby is authorized, and, as so authorized, is designated "Series B Convertible Preferred Stock" (hereinafter called the "Series B Convertible Preferred Stock"), said series to consist of 3,600,000 shares, of $0.01 par value per share, of which the preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, shall be as follows: (a) Dividends on Series B Convertible Preferred Stock. The holders of outstanding Series B Convertible Preferred Stock shall not be entitled to receive any dividends. (b) Redemption. Except as provided in Section (c)(2) hereof, the Series B Convertible Preferred Stock shall not be subject to redemption at any time. (c) Preference on Liquidation. (1) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (any such instance hereinafter called a "Liquidation"): Page-87 (i) Subject to the rights of any class or series of stock of the Corporation hereafter issued and ranking senior to the Series B Convertible Preferred Stock, upon liquidation, dissolution or winding up of the Corporation, the holders of shares of the Series B Convertible Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, prior to and in preference of any distribution of any of the assets or surplus funds of the Corporation to the holders of the Common Stock (hereinafter called "Common Stock") and Class A Nonvoting Common Stock (hereinafter called "Class A Nonvoting Common Stock") of the Corporation or of any other shares of the Corporation hereafter issued that upon liquidation are junior to the Series B Convertible Preferred Stock (such Common Stock, Class A Nonvoting Common Stock and such other shares being hereinafter collectively called "Junior Shares") by reason of their ownership thereof, an amount equal to $9.00 per share of the Series B Convertible Preferred Stock (hereinafter called the "Liquidation Preference"). Upon receipt of such amount, holders of Series B Convertible Preferred Stock will not share in any additional proceeds, whether of cash or other property, that may result from such Liquidation. If, upon Liquidation of the Corporation, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay to the holders of the Series B Convertible Preferred Stock the full amounts to which they otherwise would be entitled, the holders of the Series B Convertible Preferred Stock and any stock ranking on a parity thereto with respect to liquidation, dissolution or winding up shall share ratably in any distribution of assets according to the respective amounts which would have been payable in respect to the shares of the Series B Convertible Preferred Stock and such parity stock held by them upon such distribution if all amounts payable on or with respect to said shares were paid in full. (ii) All of the preferential amounts to be paid to the holders of Series B Convertible Preferred Stock under this Section (c)(1) shall be paid or set apart for payment prior to payment or setting apart for payment of any amount for, or the distribution of any amounts to, the holders of any Junior Shares in connection with any Liquidation. After setting apart or paying in full the preferential amounts due the holders of the Series B Convertible Preferred Stock, the remaining assets of the Corporation available for distribution to stockholders, if any, shall be distributed to the holders of Junior Shares pursuant to the respective priorities of such shares. (2) Without first obtaining the approval by vote or written consent in the manner provided by law of the holders of at least a majority of the total number of shares of the Series B Convertible Preferred Stock then outstanding, voting separately as a class, the Corporation shall not sell or otherwise transfer for value all or substantially all of its assets or merge or consolidate with another entity if such merger or consolidation would result in the exchange of the outstanding shares of the Corporation for securities or consideration issued, or caused to be issued, by the surviving corporation, its subsidiary or parent (except for a merger or consolidation after the consummation of which the stockholders of the Corporation own in excess of fifty percent (50%) of the voting securities of the surviving corporation or its parent corporation), unless immediately prior to such sale, transfer for value, merger or consolidation each outstanding share of the Series B Convertible Preferred Stock is redeemed out of funds legally available therefor for an amount equal to the Liquidation Preference. Page-88 (i) At least thirty (30), but not more than sixty (60), days prior to the date fixed for the redemption of shares of Series B Convertible Preferred Stock in accordance with this Section (c)(2), a written notice shall be mailed in a postage prepaid envelope to each holder of record of shares of Series B Convertible Preferred Stock to be redeemed, addressed to such holder at such holder's post office address as shown on the records of the Corporation, notifying such holder of the redemption of such shares, stating the date fixed for redemption thereof (the "Redemption Date"), and calling upon such holder to surrender to the Corporation, on the Redemption Date at the place designated in such notice, such holder's certificate or certificates representing the number of shares specified in such notice of redemption. On or after the Redemption Date, such holder of shares of Series B Convertible Preferred Stock to be redeemed shall present and surrender such holder's certificate or certificates for such shares to the Corporation at the place designated in such notice and thereupon the redemption price of such shares shall be paid to the order of the person whose name appears on such certificate or certificates as the owner thereof and each surrendered certificate shall be canceled. (ii) At its election, the Corporation, prior to the Redemption Date, may deposit the redemption price of the shares of Series B Convertible Preferred Stock so called for redemption in trust for the holders thereof with a bank or trust company in any city in which the Corporation at the time shall maintain a transfer agency with respect to such shares, in which case the aforesaid notice of holders of shares of Series B Convertible Preferred Stock to be redeemed shall (a) state the date of such deposit, (b) specify the office of such bank or trust company as the place of payment of the redemption price and (c) call upon such holders to surrender the certificates representing such shares at such place on or after the date fixed in such redemption notice (which shall not be later than the Redemption Date) against payment of the redemption price. Any interest accrued on such funds shall be paid to the Corporation from time to time. Any monies so deposited which shall remain unclaimed by the holders of such shares of Series B Convertible Preferred Stock at the end of two years after the Redemption Date shall be returned by such bank or trust company to the Corporation. (iii) If a notice of redemption has been give pursuant to Section (c)(2) and any holder of shares of Series B Convertible Preferred Stock shall, prior to the close of business on the second business day preceding the Redemption Date, give written notice to the Corporation pursuant to Section (e)(2) below of the conversion of any or all of the shares to be redeemed held by such holder (accompanied by a certificate or certificates for such shares, duly endorsed or assigned to the Corporation, and any necessary transfer tax payment, as required by Section (g) below), then such redemption shall not become effective as to such shares to be converted, such conversion shall become effective as provided in Section (e) below, and any monies set aside by the Corporation for the redemption of such shares of converted Series B Convertible Preferred Stock shall revert to the general funds of the Corporation. Page-89 (d) Voting. Except as otherwise required by law or by the Certificate of Incorporation of the Corporation, each outstanding share of Series B Convertible Preferred Stock shall have one vote on all matters which are the subject of a vote of the holders of Common Stock, whether at any annual or special meeting of stockholders of the Corporation, or by written consent, voting as a class together with the Common Stock. (e) Conversion Rights. (1) Each share of the Series B Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share and before December 15, 1995, into one "Unit," comprised of one share of Common Stock and one share of Series C Convertible Performance Right Preferred Stock ("Performance Right Preferred Stock"). Such optional conversion shall be deemed to have been effected on the date when delivery of the certificate or certificates representing the shares to be converted is made pursuant to Section (e)(2) hereof and such date is hereinafter called the "Optional Conversion Date". If not previously converted, each share of Series B Convertible Preferred Stock shall automatically be converted into one Unit on the earlier to occur of December 15, 1995, or the date on which a registration statement filed by the Corporation with the Securities and Exchange Commission becomes effective with respect to the Common Stock and Performance Right Preferred Stock issuable upon conversion of the then outstanding Series B Convertible Preferred Stock. Such automatic conversion date is hereinafter called the "Conversion Date." (2) The holders of the Series B Convertible Preferred Stock may exercise the conversion rights thereof until the Conversion Date as to all or any part thereof by delivering to the Corporation during regular business hours, at the office of any transfer agent of the Corporation for the Series B Convertible Preferred stock, at the principal office of the Corporation, or at such other place as may be designated by the Corporation, the certificate or certificates representing the shares to be converted, duly endorsed for transfer to the Corporation, accompanied by written notice stating that the holder elects to convert such shares. As promptly as practicable after the conversion of any shares of the Series B Convertible Preferred Stock, the Corporation shall issue and deliver to, or upon the written order of such holder, at such office or other place designated by the Corporation, a certificate or certificates registered in the name of the holder for the number of full shares of Common Stock and Performance Right Preferred Stock to which such holder is entitled and a check made payable to such holder with respect to any fractional interest in share of Common Stock or Performance Right Preferred Stock as provided in Section (f) below. The holder shall be deemed to have become a stockholder of record on the Optional Conversion Date or the Conversion Date, as applicable, unless the transfer books of the Corporation are closed on that date, in which event the holder shall be deemed to have become a stockholder of record on the next succeeding date on which the transfer books are open, but the "Closing Price," as defined below, shall Page-90 be that in effect on the applicable Optional Conversion Date or Conversion Date. Upon conversion of only a portion of the number of shares of the Series B Convertible Preferred Stock represented by a certificate surrendered for conversion, the Corporation shall issue and deliver to the holder of the certificate so surrendered for conversion, at the expense of the Corporation, a new certificate representing the unconverted portion of the Series B Convertible Preferred Stock certificate so surrendered and a certificate or certificates for the number of shares of Common Stock and Performance Right Preferred Stock to which such holder is entitled. (f) No Fractional Shares. No fractional shares of Common Stock, Performance Right Preferred Stock or scrip shall be issued upon conversion of shares of the Series B Convertible Preferred Stock. Instead of any fractional shares of Common Stock or Performance Right Preferred Stock which would otherwise be issuable upon conversion of any of the Series B Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest, the fair value of which shall be determined in good faith by the Board of Directors of the Corporation, which determination shall be conclusive and binding. (g) Taxes. The Corporation shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of shares of Common Stock and Performance Right Preferred Stock on conversion of the Series B Convertible Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than in which the shares of Series B Convertible Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax, or has established, to the satisfaction of the Corporation, that such tax has been or promptly will be paid. (h) Shares Reserved. The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock and Performance Right Preferred Stock, solely for the purpose of effecting the conversion of the Series B Convertible Preferred Stock, the full number of shares of Common Stock and Performance Right Preferred Stock deliverable upon the conversion of all Series B Convertible Preferred Stock from time to time outstanding. The Corporation shall from time to time (subject to obtaining necessary director and stockholder approval), in accordance with the laws of the State of Delaware, increase the authorized amounts of its Common Stock and Performance Right Preferred Stock if at any time the authorized number of shares of its Common Stock and Performance Right Preferred Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of Series B Convertible Preferred Stock at the time outstanding. (i) Status of Shares. All shares of Common Stock and Performance Right Preferred Stock which may be issued upon conversion of the Series B Convertible Preferred Stock will upon issuance by the Corporation be validly issued, fully-paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. Page-91 (j) Adjustment of the Number of Shares to be Received upon Conversion of Shares of Series B Convertible Preferred Stock. (1) In case the Corporation shall at any time split or subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on its outstanding Common Stock, or combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the number of shares into which the shares of Series B Convertible Preferred Stock were convertible immediately prior to such event shall be adjusted such that the holder of each share of Series B Convertible Preferred Stock shall be entitled upon conversion to receive the number of shares of Common Stock which such holder would have been entitled to receive after the happening of any such event described above, had such share of Series B Convertible Preferred Stock been converted immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant hereto shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. (2) If the Corporation shall issue rights, options or warrants, or convertible or exchangeable securities containing or providing for the right to subscribe for or purchase shares of Common Stock, to all holders of its outstanding Common Stock, without payment of additional consideration by such holders, entitling them, at any time prior to the Conversion Date, to subscribe for or purchase shares of Common Stock at a price per share that is less than the market price per share of Common Stock as of the record date for such transaction, the number of shares of Common Stock into which the then outstanding shares of Series B Convertible Preferred Stock are convertible shall be determined by multiplying the number of shares into which the Series B Convertible Preferred Stock were convertible immediately prior to such transaction by a fraction, of which the numerator shall be (i) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants, or such convertible or exchangeable securities, plus the number of additional shares of Common Stock represented by such convertible securities so offered for subscription or purchase, and of which the denominator shall be (ii) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants, or such convertible or exchangeable securities, plus the number of shares which the aggregate exercise price of the total number of shares represented by such convertible securities so offered would purchase at the market price per share of Common Stock at such record date. Such adjustment shall be made whenever such rights, options or warrants, or such convertible or exchangeable securities, are issued, and shall become effective immediately on the date of issuance retroactive to the record date for the determination of stockholders entitled to receive such rights, options or warrants, or such convertible or exchangeable securities. Page-92 (3) For the purpose of adjustments required by Section (j)(2), the shares of Common Stock that the holder of any rights, options, warrants or convertible or exchangeable securities shall be entitled to subscribe for or purchase shall be deemed to be issued and outstanding as of the date of sale, issuance or distribution of such securities and the consideration, if any, received by the Corporation therefor shall be deemed to be the consideration actually received by the Corporation for such securities, plus the consideration or premiums stated in such securities to be paid for the shares of Common Stock acquired upon such exercise and conversion. (4) For the purpose of any computation under Section (j)(2), the market price per share of Common Stock at any date shall be determined as of the record date based upon the average of the last closing sale price as reported by any national securities exchange or a consolidation transaction reporting system on which such shares are listed for the forty (40) trading days immediately preceding such date. If the Common Stock is not listed on a national exchange or consolidated transaction reporting system, the market price per share of Common Stock at any date shall mean the average of the closing bid and ask prices as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or a successor or similar organization, for the forty (40)-day trading period immediately preceding such date. If the Common Stock is not listed on a national exchange or consolidated transaction reporting system or reported on the National Association of Securities Dealers, Inc. Automated Quotation System or a successor or similar organization, the market price per share of Common Stock at any date shall be as determined in good faith by the Board of Directors of the Corporation, which determination shall be conclusive. (5) No adjustment in the number of shares into which the Series B Convertible Preferred Stock are convertible shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the number of shares of Common Stock into which the Series B Convertible Preferred Stock are convertible; provided, however, that any adjustments which by reason of this Section (j)(5) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest cent and to the nearest one-hundredth of a share, as the case may be. (6) Irrespective of any adjustments in the number of shares into which the Series B Convertible Preferred Stock are convertible, the certificates representing the Series B Convertible Preferred Stock theretofore and thereafter may continue to express the same number of shares as are initially stated in the Series B Convertible Preferred Stock. (7) If the shares of Common Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares, stock dividend or reorganization, merger, consolidation or sale of assets expressly provided for in Section (c)(2) hereof), then, and in any such event, each holder of Series B Convertible Preferred Stock shall Page-93 have the right to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change, which such holder would have been entitled to receive after the happening of any such event described above, had such shares of Series B Convertible Preferred Stock been converted immediately prior to such recapitalization, reclassification or change or any record date with respect thereto. An adjustment made pursuant hereto shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. (k) Changes Affecting the Series B Convertible Preferred Stock. So long as any shares of the Series B Convertible Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval by vote or written consent in the manner provided by law of the holders of at least a majority of the total number of shares of the Series B Convertible Preferred Stock then outstanding, voting separately as class, change the preferences, rights or limitations with respect to the Series B Convertible Preferred Stock in any material respect prejudicial to the holders thereof, increase the authorized number of shares of Series B Convertible Preferred Stock, increase or decrease the authorized number of shares of Preferred Stock of the Corporation, or authorize, designate or increase or decrease the number of authorized shares of any class or series of stock of the Corporation ranking on a parity with or senior to the Series B Convertible Preferred Stock as to dividends or upon dissolution, liquidation or winding up of the Corporation; but nothing contained herein shall require such a class vote or consent (i) in connection with any increase or decrease in the total number of authorized shares of the Common Stock or Performance Right Preferred Stock, (ii) in connection with the authorization, designation, increase or decrease of any class or series of Junior Shares; or (iii) in connection with the issuance of any presently authorized but unissued shares of Series B Convertible Preferred Stock. (l) Status of Converted Series B Convertible Preferred Stock. No share or shares of Series B Convertible Preferred Stock acquired by the Corporation by reason of purchase, conversion, redemption or otherwise shall be re-issued and such shares shall be canceled and retired and, upon compliance with applicable law, returned to the status of authorized but unissued and undesignated shares of Preferred Stock of the Corporation. All certificates representing any of the Series B Convertible Preferred Stock surrendered for conversion shall be appropriately canceled on the books of the Corporation. (m) Authorized Number of Shares of Series B Convertible Preferred Stock. The authorized number of shares of the Series B Convertible Preferred Stock shall be 3,600,000. II. Series C Performance Right Preferred Stock. RESOLVED, that pursuant to the authority expressly granted and vested in the Board of Directors of this Corporation in the Certificate of Incorporation, as amended, a series of Preferred Stock of the Corporation be and it hereby is authorized, and, as so authorized, is designated "Series C Convertible Performance Right Preferred Stock" (hereinafter called the "Performance Right Preferred Stock"), said series to consist of 3,600,000 shares, of $0.01 par value per share, of which the preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, shall be as follows: Page-94 (a) Dividends on Performance Right Preferred Stock. The holders of outstanding Performance Right Preferred Stock shall not be entitled to receive any dividends. (b) Redemption. The Performance Right Preferred Stock shall not be subject to redemption at any time. (c) Preference on Liquidation. (1) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (any such instance hereinafter called a "Liquidation"): (i) The holders of shares of the Performance Right Preferred Stock then outstanding shall be entitled to be paid, out of the assets of the Corporation available for distribution to its stockholders, prior to and in preference of any distribution of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Class A Nonvoting Common Stock of the Corporation by reason of their ownership thereof, an amount per share of Performance Right Preferred Stock (hereinafter called the "Liquidation Preference") equal to the greater of: (y) one cent ($0.01) per share of Performance Right Preferred Stock (the "Monetary Preference"), or (z) one-half (50%) of the amount available for distribution per share of Common Stock (without regard to the Monetary Preference). Upon receipt of such amount, holders of Performance Right Preferred Stock will not share in any additional proceeds, whether of cash or other property, that may result from such Liquidation. If, upon Liquidation of the Corporation, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay to the holders of the Performance Right Preferred Stock the full Liquidation Preference, the holders of the Performance Right Preferred Stock and any stock ranking on a parity thereto with respect to liquidation, dissolution or winding up shall share ratably in any distribution of assets according to the respective amounts which would have been payable in respect to the shares of the Performance Right Preferred Stock held by them upon such distribution if all amounts payable on or with respect to said shares were paid in full. (ii) All of the preferential amounts to be paid to the holders of Performance Right Preferred Stock under this Section (c) shall be paid or set apart for payment prior to payment or setting apart for payment of any amount for, or the distribution of any amounts to, the holders of Common Stock or Class A Nonvoting Common Stock in connection with any Liquidation. After setting apart or paying in full the preferential amounts due the holders of the Performance Right Preferred Stock, the remaining assets of the Corporation available for distribution to stockholders, if any, shall be distributed to the holders of Common Stock and Class A Nonvoting Common Stock. Page-95 (2) If the Corporation (i) sells or otherwise transfers for value all or substantially all of its assets and properties (a "Disposition Reorganization") or (ii) merges or consolidates with another entity if such merger or consolidation would result in the exchange of the outstanding shares of the Corporation for securities or consideration issued, or caused to be issued, by the surviving corporation, its subsidiary or parent, excepting a merger or consolidation after the consummation of which the stockholders of the Corporation own in excess of fifty percent (50%) of the voting securities of the surviving corporation or its parent corporation (a "Merger Reorganization") (a Disposition Reorganization or a Merger Reorganization being hereinafter called a "Reorganization Event"), the Performance Right Preferred Stock shall be converted automatically as provided in Section (e)(1) hereof. (d) Voting. Except as otherwise required by law or by the Certificate of Incorporation of the Corporation, the holders of Performance Right Preferred Stock shall not be entitled to any vote in respect to such Performance Right Preferred Stock, whether at any annual or special meeting of stockholders of the Corporation, or by written consent. (e) Conversion Rights. (1) Each share of the Performance Right Preferred Stock shall automatically convert, on the earlier to occur (i) of December 15, 1995 (hereinafter called the "Anniversary Date") or (ii) the date of the Reorganization Event (hereinafter called the "Reorganization Date") (the earlier to occur of the Anniversary Date or the Reorganization Date hereinafter called the "Conversion Date"), into a fraction of a share, or one or more full shares, of Common Stock determined by multiplication of each share of Performance Right Preferred Stock by the "Conversion Formula" (as hereinafter defined) based upon the average of the "Closing Prices" (as hereinafter defined) of such Common Stock for the forty (40) trading days immediately preceding the Conversion Date. The "Closing Price" shall mean the last closing sale price as reported on a national securities exchange or by a consolidation transaction reporting system, or in the instance of publicly traded securities not listed on a national exchange or consolidated transaction reporting system, the Closing Price shall mean the average of the closing bid and ask prices as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or a successor or similar organization. In the instance of securities not listed on a national exchange or consolidated transaction reporting system or reported on the national Association of Securities Dealers, Inc. Automated Quotation System or a successor or similar organization, the "Closing Price" shall mean the closing price as determined in good faith by the Board of Directors of the Corporation and a representative of the holders of a majority of the Performance Right Preferred Stock, which determination shall be conclusive and binding. The "Conversion Formula" upon which each share of the Performance Right Preferred Stock will convert into Common Stock is the result calculated by dividing sixty (60) (hereinafter the "Conversion Price") by the average of the Closing Prices of the Common Stock for the forty (40) trading days immediately preceding the Conversion Date, and then subtracting 4.5, provided, however, that in no event shall the number of shares into which each share of the Performance Right Preferred Stock shall be converted exceed three (3) shares of Common Stock or be less than one-half (1/2) share of Common Stock (hereinafter called the "Limits"), subject to adjustment as provided in Section (j). Page-96 (2) Notwithstanding the provisions of Section (e)(1), the Performance Right Preferred Stock shall automatically convert into one-half (1/2) share of Common Stock, subject to adjustment as provided in Section (j), in the event that the average of the Closing Prices of the Common Stock for any forty (40) consecutive trading days prior to the Anniversary Date equals or exceeds $15.00 (the last such consecutive trading day hereinafter called the "Price Conversion Date"). (3) The conversion rights set forth in Sections (e)(1) and (e)(2) are mandatory and automatic and shall apply to all Performance Right Preferred Stock then outstanding. Upon such automatic conversion, the holders of such Performance Right Preferred Stock shall surrender the certificate or certificates representing the shares converted, duly endorsed for transfer to the Corporation, to the principal office of the Corporation, or at such other place as may be designed by the Corporation. As promptly as practicable thereafter, the Corporation shall issue and deliver to such holder, at such office or other place designated by the Corporation, a certificate or certificates registered in the name of the holder for the number of full shares of Common Stock to which such holder is entitled and a check made payable to such holder with respect to any fractional interest in a share of Common Stock as provided in Section (f) hereof. The holder shall be deemed to have become a stockholder of record on the Conversion Date or the Price Conversion Date, as applicable, unless the transfer books of the Corporation are closed on that date, in which event the holder shall be deemed to have become a stockholder of record on the next succeeding date on which the transfer books are open. (f) No Fractional Shares. No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of the Performance Right Preferred Stock. Instead of any fractional shares of Common Stock which would otherwise be issuable upon conversion of any of the Performance Right Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional interest based on the average of the Closing Prices of Common Stock for the forty (40) days immediately preceding the Conversion Date or the Price Conversion Date, as applicable. (g) Taxes. The Corporation shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of shares of Common Stock and Performance Right Preferred Stock on conversion of the Performance Right Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Performance Right Preferred Stock so converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax, or has established, to the satisfaction of the Corporation, that such tax has been or promptly will be paid. Page-97 (h) Shares Reserved. The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Performance Right Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all Performance Right Preferred Stock from time to time outstanding. The Corporation shall from time to time (subject to obtaining necessary director and stockholder authorization), in accordance with the laws of the State of Delaware, increase the authorized amounts of its Common Stock if at any time the authorized number of shares of its Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of Performance Right Preferred Stock at the time outstanding. (i) Status of Shares. All shares of Common Stock which may be issued upon conversion of the Performance Right Preferred Stock will upon issuance by the Corporation be validly issued, fully-paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. (j) Adjustment of the Number of Shares to be Received upon Conversion of Shares of Performance Right Preferred Stock. (1) In case the Corporation shall at any time split or subdivide the outstanding shares of Common Stock, or shall issue a stock dividend on its outstanding Common Stock, or combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, the Conversion Price shall be adjusted such that the holder of each share of Performance Right Preferred Stock shall be entitled upon conversion to receive the number of shares of Common Stock which such holder would have been entitled to receive after the happening of any such event described above, had such shares of Performance Right Preferred Stock been converted immediately prior to the happening of such event or any record date with respect thereto, and the Limits shall be proportionately adjusted. An adjustment made pursuant hereto shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. (2) If the Corporation shall issue rights, options or warrants, or convertible or exchangeable securities containing or providing for the right to subscribe for or purchase shares of Common Stock, to all holders of its outstanding Common Stock, without payment of additional consideration by such holders, entitling them, at any time prior to the Conversion Date or the Price Conversion Date, to subscribe for or purchase shares of Common Stock at a price per share that is less than the market price per share of Common Stock as of the record date for such transaction, the Conversion Price shall be adjusted so that the number of shares of Common Stock into which the then outstanding shares of Performance Right Preferred Stock is convertible shall equal a number determined by multiplying the number of shares into which such shares of the Performance Right Preferred Stock was convertible immediately prior to such transaction by a fraction, of which the numerator shall be (i) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants, or such convertible or exchangeable securities, plus the number of additional shares of Common Stock represented Page-98 by such convertible securities so offered for subscription or purchase, and of which the denominator shall be (ii) the number of shares of Common Stock outstanding on the date of issuance of such rights, options or warrants, or convertible or exchangeable securities, plus the number of shares which the aggregate exercise price of the total number of shares represented by such convertible securities so offered would purchase at the market price per share of Common Stock at such record date. In connection with any adjustment, the Limits shall also be proportionately adjusted. Such adjustments shall be made whenever such rights, options or warrants, or convertible or exchangeable securities, are issued, and shall become effective immediately on the date of issuance retroactive to the record date for the determination of stockholders entitled to receive such rights, options or warrants, or convertible or exchangeable securities. (3) For the purpose of adjustments required by Section (j)(2), the shares of Common Stock that the holder of any rights, options, warrants or convertible or exchangeable securities shall be entitled to subscribe for or purchase shall be deemed to be issued and outstanding as of the date of sale, issuance or distribution of such securities and the consideration, if any, received by the Corporation therefor shall be deemed to be the consideration actually received by the Corporation for such securities, plus the consideration or premiums stated in such securities to be paid for the shares of Common Stock acquired upon such exercise and conversion. (4) For the purpose of any computation under Section (j)(2), the market price per share of Common Stock at any date shall be determined as of the record date based upon the average of the Closing Prices for the immediately preceding forty (40) trading days. (5) No adjustment in the Conversion Price, the Limits or in the number of shares into which the Performance Right Preferred Stock are convertible shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Conversion Price and in the number of shares into which the Performance Right Preferred Stock are convertible; provided, however, that any adjustments which by reasons of this Section (j)(5) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations shall be made to the nearest cent and to the nearest one-hundredth of a share, as the case may be. (6) Irrespective of any adjustments in the number of shares into which the Performance Right Preferred Stock are convertible, the certificates representing the Performance Right Preferred Stock theretofore and thereafter may continue to express the same number of shares as are initially stated in the Performance Right Preferred Stock. Page-99 (7) If the shares of Common Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by recapitalization, reclassification or otherwise (other than a subdivision or combination of shares, stock dividend or reorganization, merger, consolidation or sale of assets expressly provided for in Section (c)(2) hereof), then, and in any such event, each holder of Performance Right Preferred Stock shall have the right to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change, which such holder would have been entitled to receive after the happening of any such event described above, had such shares of Performance Right Preferred Stock been converted immediately prior to such recapitalization, reclassification or change or any record date with respect thereto. An adjustment made pursuant hereto shall become effective immediately after the effective date of such event, retroactive to the record date, if any, for such event. (k) Changes Affecting the Performance Right Preferred Stock. So long as any shares of the Performance Right Preferred Stock are outstanding, the Corporation shall not, without first obtaining the approval by vote or written consent in the manner provided by law of the holders of at least a majority of the total number of shares of the Performance Right Preferred Stock then outstanding, voting separately as class, change the preferences, rights or limitations with respect to the Performance Right Preferred Stock in any material respect prejudicial to the holders thereof, or increase the authorized number of shares of Performance Right Preferred Stock; but nothing contained herein shall require such a class vote or consent (i) in connection with any increase or decrease in the total number of authorized shares of the Common Stock, (ii) in connection with the authorization, designation, increase or decrease of any class or series of shares of the Corporation other than an increase in the authorized number of shares of Performance Right Preferred Stock; or (iii) in connection with the issuance of any presently authorized but unissued shares of Performance Right Preferred Stock. (l) Status of Converted Performance Right Preferred Stock. No share or shares of Performance Right Preferred Stock acquired by the Corporation by reason of purchase, conversion or otherwise shall be re-issued and such shares shall be canceled and retired and, upon compliance with applicable law, returned to the status of authorized but unissued and undesignated shares of Preferred Stock of the Corporation. All certificates representing any of the Performance Right Preferred Stock surrendered for conversion shall be appropriately canceled on the books of the Corporation. (m) Authorized Number of Shares of Performance Right Preferred Stock. The authorized number of shares of the Performance Right Preferred Stock shall be 3,600,000. Page-100 IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate of Designations, Preferences, Rights, and Limitations of Series B Convertible Preferred Stock and Series C Convertible Performance Right Preferred Stock to be duly executed by the undersigned this 9th day of the December, 1993. RAMTRON INTERNATIONAL CORPORATION By: /S/ Jack R. Morgan - ----------------------- Name: Jack R. Morgan Title: Sr. Vice President ATTEST /S/ John C. Coe - --------------- John C. Coe, Secretary Page-101 STATE OF DELAWARE OFFICE OF THE SECRETARY OF STATE I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF DESIGNATION OF "RAMTRON INTERNATIONAL CORPORATION," FILED IN THIS OFFICE ON THE SEVENTH DAY OF FEBRUARY, A.D. 1995, AT 11:38 0'CLOCK A.M. A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO NEW CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING. /S/ Edward J. Freel ------------------- Edward J. Freel, Secretary of State AUTHENTICATION: 7401595 DATE: 02/08/1995 Page-102 CERTIFICATE OF ELIMINATION OF SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK OF RAMTRON INTERNATIONAL CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware RAMTRON INTERNATIONAL CORPORATION (hereinafter called the "Corporation"), a Delaware corporation, does hereby certify: THAT, pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Corporation, and pursuant to the provisions of Section 151 of the Delaware Corporation Law, said Board of Directors, at a meeting held on October 30, 1992, duly adopted resolutions providing for the issuance of a series of 1,365,046 shares of Series A Cumulative Convertible Preferred Stock and at a meeting held on December 1, 1993, duly adopted resolutions providing for the issuance of a series of 3,600,000 shares of Series B Convertible Preferred Stock and a series of 3,600,000 shares of Series C Convertible Performance Right Preferred Stock; FURTHER THAT, pursuant to the authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, and pursuant to the provisions of Section 151 of the Delaware Corporation Law, said Board of Directors, at a meeting held on July 29, 1994, duly adopted the following resolutions cancelling the designation of the Series A Cumulative Convertible Preferred Stock and Series B Convertible Preferred Stock and all such previously designated preferred stock shall from this date forward be treated as authorized but unissued preferred stock with no specific designation. I. Series A Cumulative Convertible Preferred Stock and Series B Convertible Preferred Stock. RESOLVED that none of the authorized shares of Series A Cumulative Convertible Preferred Stock of the Company is outstanding; FURTHER RESOLVED that none of the authorized shares of Series A Cumulative Convertible Preferred Stock of the Company will be issued subject to the Certificate of Designations, Preferences, Rights and Limitations of Series A Cumulative Preferred Stock filed with the Delaware Secretary to State of November 16, 1992 with respect to the Series A Cumulative Convertible Preferred Stock; FURTHER RESOLVED that none of the authorized shares of Series B Convertible Preferred Stock of the Company is outstanding; Page-103 FURTHER RESOLVED that none of the authorized shares of Series B convertible Preferred Stock of the Company will be issued subject to the Certificate of Designations, Preferences, Rights and Limitations of Series B Convertible Preferred Stock filed with the Delaware Secretary to State of December 10, 1993 with respect to the Series B Convertible Preferred Stock; FURTHER RESOLVED that the Company's officers are hereby authorized and directed to execute and file with the Delaware Secretary of State a Certificate pursuant to the provisions of Section 151(g) of the General Corporation Law of the State of Delaware for the purposes of eliminating from the Certificate of Incorporation of the Company all references to both the Series A Cumulative Convertible Preferred Stock and the Series B Convertible Preferred Stock of the Company; and FURTHER RESOLVED that the Company's officers are hereby authorized and directed to perform any acts, including the payment of any and all expenses, and to execute and deliver any and all documents that they deem necessary or appropriate to carry out all of the foregoing resolutions. IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate of Elimination of Series A Cumulative Convertible Preferred Stock and Series B Convertible Preferred Stock to be duly executed by the undersigned this 3rd day of February 1995. RAMTRON INTERNATIONAL CORPORATION By: /S/ Oren L. Benton - --------------------------- Name: Oren L. Benton Title: Chief Executive Officer ATTEST: /S/ Kathy Bouard - -------------------- Kathy Bouard Page-104 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 11:45 AM 03/30/1995 950070966-2026110 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Ramtron International Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware. DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, pursuant to written unanimous written consent, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation. "FOURTH. The total number of shares of capital stock which the Company shall have authority to issue is 60,000,000, consisting of 50,000,000 shares of Common Stock, $0.01 par value per share, and 10,000,000 shares of Preferred Stock, $0.01 par value per share. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in one or more series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock." SECOND: That holders of a majority of the outstanding common stock of the Company have approved said amendment by written consent in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendments were duly adopted in accordance with the applicable provisions of Section 228 of the General Corporation Law of the State of Delaware. Page-105 IN WITNESS WHEREOF, said Ramtron International Corporation has caused this certificate to be signed by Richard L. Mohr, its Executive Vice President and attested by David N. Karpel, its Secretary, this 29th day of March 1995. Ramtron International Corporation By: /S/ Richard L. Mohr - ----------------------- Richard L. Mohr, Executive Vice President ATTEST: By: /S/ David N. Karpel - ----------------------- David N. Karpel, Secretary Page-106 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/22/1995 950139642-2026110 CERTIFICATE OF CORRECTION OF CERTIFICATE OF AMENDMENT OF RAMTRON INTERNATIONAL CORPORATION Ramtron International Corporation, a Delaware corporation (the "Corporation"), pursuant to Section 103(f) of the General Corporation Law of the State of Delaware, does hereby certify: FIRST: That the Certificate of Amendment to Certificate of Incorporation ("Certificate of Amendment") of the Corporation which was filed with the Secretary of State of Delaware on March 30, 1995, is an inaccurate record of the corporation action referred to therein. SECOND: That said Certificate of Amendment was inaccurate in that paragraphs SECOND and THIRD thereof state that the amendment was approved by a majority of the holders of the outstanding common stock by consent and that the amendment was adopted in accordance with Section 228 of the General Corporation Law of the State of Delaware. Said amendment was, in fact, adopted in accordance with Section 242 of the General Corporation Law at a duly called meeting of stockholders. THIRD: Article SECOND in correct form is as follows: SECOND: That holders of a majority of the outstanding common stock of the Company have approved said amendment at a duly called meeting. FOURTH: Article THIRD in correct form is as follows: THIRD: The amendment was duly adopted in accordance with Section 242 of the Delaware General Corporation Law. IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate of Correction to be executed by its duly authorized officer this 21st day of June, 1995. By: /S/ Richard L. Mohr - ----------------------- Richard L. Mohr Executive Vice President Page-107 STATE OF DELAWARE SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 11/12/1996 960331885-2026110 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Ramtron International Corporation, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware. DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, at a meeting held on June 7, 1996, adopted a resolution proposed and declaring advisable the following amendment to the Certificate of Incorporation of said corporation. "FOURTH. The total number of shares of capital stock which the Corporation shall have authority to issue is 85,000,000, consisting of 75,000,000 shares of Common Stock, $0.01 par value per share, and 10,000,000 shares of Preferred Stock, $0.01 par value per share. The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in one or more series, and by filing a certificate pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of such holders is required pursuant to the certificate or certificates establishing the series of Preferred Stock." SECOND: That at a meeting duly held, the majority of holders of the outstanding common stock of the Company have approved said amendment in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware. Page-108 IN WITNESS WHEREOF, said Ramtron International Corporation has caused this certificate to be signed by L. David Sikes, its Chief Executive Officer and attested by Richard L. Mohr, its Secretary, this 1st day of November 1996. RAMTRON INTERNATIONAL CORPORATION BY: /S/ L. David Sikes - ---------------------- L. David Sikes Chief Executive Officer ATTEST: BY: /S/ Richard L. Mohr - ----------------------- Richard L. Mohr Secretary Page-109 State of Delaware Office of the Secretary of State I, Edward J. Freel, Secretary of State of the State of Delaware, do hereby certify the attached is a true and correct copy of the Certificate of Designation of "Ramtron International Corporation", filed in this office on the twelfth day of February, A.D. 1998, at 1:20 O'clock P.M. /S/ Edward J. Freel - --------------------------------------- Edward J. Freel, Secretary of State Authentication: 8918338 Date: 02-12-98 Page-110 State of Delaware Secretary of State Division of Corporations Filed 01:20 PM 02/12/1998 981056214 - 2026110 CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS OF SERIES A CONVERTIBLE PREFERRED STOCK, $0.01 PAR VALUE OF RAMTRON INTERNATIONAL CORPORATION Pursuant to Section 151 of the General Corporation Law of the State of Delaware RAMTRON INTERNATIONAL CORPORATION (hereafter called the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify: THAT, pursuant to authority conferred upon the Board of Directors by the Certificate of Incorporation, as amended, of the Corporation, and pursuant to the providing Section 151 of the Delaware Corporation Law, said Board of Directors, by unanimous written consent dated February 10, 1998, duly adopted a resolution providing for the issuance of a series of 29,000 shares of the Series A Convertible Preferred Stock, $0.01 Par Value, which resolution is a follows: RESOLVED that there shall be a series of shares of the Preferred Stock of the Corporation designated "Series A Convertible Preferred Stock"; that the number of authorized shares of such series shall be 29,000 and that the rights and preferences of such series (the "Series A Preferred") and the limitations or restrictions thereon, shall be as follows: 1. Dividends. (a) The holders of the Series A Preferred shall be entitled to receive cumulative dividends at the rate of $60.00 per share per annum, payable in shares of Series A Preferred Stock valued at $1,000 per share, when and as declared by the Board of Directors. Such dividends shall accrue on any given share from the day of original issuance of such share and shall accrue from day to day whether or not declared. Dividends not theretofore paid shall be paid upon conversion of any shares of the Series A Preferred and shares of Series A Preferred issued in payment of such dividends shall be simultaneously converted into Common Stock together with the shares on which such dividends have accrued. Page-111 2. Liquidation Preference. (a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock or any other class or series of shares except any class or series which is entitled to priority over the Series A Preferred, the amount of $1,000 per share plus any accrued but unpaid dividends plus any amounts accrued but unpaid under Section 1.4(b)(iv) of the Preferred Stock Investment Agreement under which shares of the Series A Preferred were originally issued (the "Liquidation Preference"). (b) Subject to the last sentence of this Section, a consolidation or merger of the Corporation with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the Corporation, shall, at the option of the holders of the Series A Preferred, be deemed a liquidation, dissolution or winding up within the meaning of this Section 2 if the shares of stock of the Corporation (along with all derivative securities) outstanding immediately prior to such transaction represent immediately after such transaction less than a majority of the voting power of the surviving corporation (or of the acquirer of the Corporation's assets in the case of a sale of assets). Such option may be exercised by the vote or written consent of holders of a majority of the Series A Preferred at any time within thirty calendar days after written notice of the essential terms of such transaction shall have been given to the holders of the Series A Preferred as provided in Section 5 hereof. Such notice shall be given by the Corporation immediately following determination of such essential terms. If such option is exercised, the holders of the Series A Preferred shall be entitled to receive, in cash, immediately upon the occurrence of such transaction, an amount per share equal to the Liquidation Preference. This Section shall not apply to a business combination in which substantially all the Common Stock of the Corporation is converted into or exchanged for voting common stock of the corporation surviving such business combination, if (i) such common stock of the surviving corporation is listed and traded on the NASDAQ National Market or the New York Stock Exchange, and (ii) the Board of Directors of the Corporation determines in good faith that the conversion rights and other rights and preferences of the Series A Preferred are preserved and not rendered of less value by the terms of such business combination. 3. Mandatory Conversion. On the fifth anniversary of the date of issuance, all then outstanding shares of Series A Preferred including any accrued dividends thereon shall be automatically converted into Common Stock at the Conversion Price on such anniversary date and otherwise pursuant to the applicable provisions set forth in Section 4 hereof. 4. Conversion. The holders of the Series A Preferred shall have optional conversion rights as follows: Page-112 (a) Accrual of Conversion Rights. The Conversion Period shall commence 3 calendar months after the date of issuance, or (if earlier) the date that a Registration Statement covering resale of the underlying shares of Common Stock has been declared effective by the Securities and Exchange Commission, and shall continue thereafter for the life of the issue. Each holder of record of Series A Preferred shares on the date of commencement of the Conversion Period (an "Original Holder") shall be entitled to convert in any calendar month the following percentage of the Series A Preferred shares held by such holder on the date of commencement of the Conversion Period, on a cumulative basis following commencement of the Conversion Period. The percentage for each calendar month will be determined based on the highest of the daily low trading prices of the Common Stock during such month, as follows: Highest of daily low trading Percentage convertible prices during month during such month ---------------------------- ---------------------- $7.00 to less 20.0% $7.01 to $7.50 25.0% $7.51 to $8.00 30.0% $8.01 to $8.50 35.0% $8.51 to $9.00 40.0% $9.01 to $9.50 45.0% $9.51 or more 50.0% The number of shares which may be converted in any calendar month shall be the number determined as above provided plus the number which might have been but were not converted during earlier calendar months. In the case of transfers of shares by an Original Holder the Corporation shall make such notations on its stock ownership records and on the certificates for shares issued upon transfer so as to reflect the portion (if any) of the transferred shares which have become convertible pursuant to this provision, or the Corporation may at its election issue certificates representing the Series A Preferred shares in such form, or with such annotations, as to reflect the time or times at which the shares represented by such certificates will become convertible. (b) Removal of Limitations. The limitations set forth in Section 4(a) hereof, with respect to the percentage of Series A Preferred shares which may be converted during certain time periods, shall terminate and all the Series A Preferred shares shall thereafter be fully convertible if any of the following events or conditions shall occur or exist: (i) an event described in Section 2(b) (subject to the exclusion in the last sentence of such Section) shall occur, whether or not the holders of Series A Preferred deem such event to be a liquidation; (ii) proceedings for relief under any bankruptcy or similar law for the relief of debtors are instituted by or against the Corporation or any of its significant subsidiaries and, if instituted against the Corporation or such subsidiary, are consented to or not dismissed within 30 days; (iii) the independent auditors of the Corporation shall fail or be unwilling to express within 90 days after the end of the Corporation's fiscal Page-113 year a customary opinion on the financial statements of the Corporation, or shall express such opinion subject to a "going concern" qualification; (iv) the Common Stock of the Corporation shall cease to be listed on either the NASDAQ National Market or the New York Stock Exchange; or (v) there shall be a material breach by the Corporation of any of its obligations hereunder or under the Preferred Stock Investment Agreements pursuant to which the Series A Preferred was originally issued, which breach has a material adverse effect on the holders of Series A Preferred. (c) Right to Convert. At and after the time it has become convertible, each share of Series A Preferred shall be convertible, at the option of the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing (i) the liquidation preference of the Series A Preferred share determined pursuant to Section 2(a) hereof on the date the notice of conversion is given, by (ii) the Conversion Price determined as hereinafter provided in effect on said date, provided however, that a share of Series A Preferred shall not be converted into Common Stock if following such conversion the holder thereof together with affiliates of such holder would be the beneficial owners (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of 10% or more of the Common Stock of the Corporation. A share which may not be converted because of the foregoing "provided however" clause will thereafter be convertible by any holder (including the original holder) if at the time such share is submitted for conversion the "provided however" clause is inapplicable. (d) Mechanics of Conversion. To convert shares of Series A Preferred into shares of Common Stock, the holder shall give written notice to the Corporation (which notice may be given by facsimile transmission) that such holder elects to convert the same and shall therein the number of shares to be converted and the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. Promptly thereafter the holder shall surrender the certificate or certificates representing the shares to be converted, duly endorsed, at the office of the Corporation or of any transfer agent for such shares, or at such other place designated by the Corporation. The Corporation shall, immediately upon receipt of such notice, issue and deliver to or upon the order of such holder, against delivery of the certificates representing the shares which have been converted, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled, and a certificate representing the shares of Series A Preferred not so converted, if any. The Corporation shall effect such issuance immediately and shall transmit the certificates by messenger or overnight delivery service to reach the address designated by such holder within three trading days after the receipt of such notice. Notice of conversion may be given by a holder at any time of day up to 5:00 p.m. Pacific time, and such conversion shall be deemed to have been made immediately prior to the close of business on the date such notice of conversion is given (the "Conversion Date"). The person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at the close of business on the Conversion Date. Page-114 (e) Determination of Conversion Price. (i) Until the last day of the sixth full calendar month after the Closing, the Conversion Price shall be $10.00. Thereafter, subject to the provisions of subsection (e)(iii) of this Section, on any Conversion Date, the Conversion Price shall be the lowest trading price of the Common Stock for the 22 consecutive trading days ending with the trading day prior to the Conversion Date, reduced by the Applicable Percentage (as defined below) in effect on the Conversion Date. (ii) The Applicable Percentage shall be as follows: 7.0% starting on the first day of the seventh (7th) calendar month after Closing. 8.0% starting on the first day of the eighth (8th) calendar month after Closing. 9.0% starting on the first day of the ninth (9th) calendar month after Closing. 10.0% starting on the first day of the tenth (10th) calendar month after Closing. 11.0% starting on the first day of the eleventh (11th) calendar month after Closing. 12.0% starting on the first day of the twelfth (12th) calendar month after Closing. 13.0% starting on the first day of the thirteenth (13th) calendar month after Closing. 14.0% starting on the first day of the fourteenth (14th) calendar month after Closing. 15.0% starting on the first day of the fifteenth (15th) calendar month after Closing, and thereafter (iii) The Maximum Conversion Price ("Conversion Cap") shall be the lesser of (i) 85% of the average of the daily low trade prices of the Common Stock for the fifteenth calendar month after the Closing, (ii) 85% of the average of the daily low trade prices of the Common Stock for the twenty-first calendar month after the Closing, or (iii) 85% of the average of the daily low trade prices of the Common Stock for the twenty-seventh calendar month after the Closing. The provisions of clauses (i), (ii) and (iii) of the foregoing sentence shall become effective at the end of the fifteenth, twenty-first and twenty-seventh calendar months following the Closing, respectively. (iv) The terms "low trading price" and "last sale price" of the Common Stock on any day shall mean, respectively, (A) the lowest reported sale price and the last reported sale price of the Common Stock on the principal stock exchange on which the Common Stock is listed, or (B) if the Common Stock is not listed on a stock exchange, the lowest reported sale price and the last reported sale price of the Common Stock on the principal automated securities price quotation system on which sale prices of the Common Stock are reported, Page-115 or (C) if the Common Stock is not listed on a stock exchange and sale prices of the Common Stock are not reported on an automated quotation system, the lowest bid price and the last bid price for the Common Stock as reported by National Quotation Bureau Incorporated. If none of the foregoing provisions are applicable, the "low trading price" and "last sale price" of the Common Stock on a day will be the fair market value of the Common Stock on that day as determined by a member firm of the New York Stock Exchange, Inc., selected by the Board of Directors of the Corporation. The term "trading day" means (x) if the Common Stock is listed on at least one stock exchange, a day on which there is trading on the principal stock exchange on which the Common Stock is listed, (y) if the Common Stock is not listed on a stock exchange but sale prices of the Common Stock are reported on an automated quotation system, a day on which trading is reported on the principal automated quotation system on which sales of the Common Stock are reported, or (z) if the foregoing provisions are inapplicable, a day on which quotations are reported by National Quotation Bureau Incorporated. The term "trading day" shall not include any day that the New York Stock Exchange closes for at least one hour because of the "Circuit Breakers" pursuant to Rule 80A or 80B. The "closing price" of the Common Stock on any day means the "last sale price" as defined above. The term "lowest trading price" of the Common Stock for a period of several trading days means the lowest of the low trading prices for each of such trading days. (v) In the event that during any period of consecutive trading days provided for herein, the Corporation shall declare or pay any dividend on the Common Stock payable in Common Stock or in rights to acquire Common Stock, or shall effect a stock split or reverse stock split, or a combination, consolidation or reclassification of the Common Stock, then the Conversion Price and the Conversion Cap shall be proportionately decreased or increased, as appropriate, to give effect to such event, and like adjustment shall be made in any price per share specified in dollars in Section 4(a) or elsewhere herein. (f) Green Floor. If at any time the Conversion Price falls below a price designated by the Corporation upon 30 calendar days prior notice given to the holders of the Series A Preferred (the "Green Floor Price") the Corporation may at its option, exercised by written notice ("Cash Conversion Notice") given to the holders of the Series A Preferred twenty calendar days prior to the effective date specified in such Notice (the "Effective Date") honor any conversion request otherwise properly made, if at a Conversion Price lower than the Green Floor Price then in effect, by a cash payment in lieu of the issuance of Common Stock in an amount equal to the proceeds which would otherwise have been received by the holder if conversion were in fact made into Common Stock and such Common Stock were sold at the high trading price on the Conversion Date (the "Cash Conversion Amount"). A Cash Conversion Notice shall constitute a representation and warranty by the Corporation that it has funds available in cash or cash equivalents to pay the Cash Conversion Amount (computed on the basis of the Green Floor Price then in effect) upon conversion of all the Series A Preferred shares eligible for conversion at that time, and that such funds will be set aside and maintained for the Page-116 exclusive purpose of satisfying the Corporation's Cash Conversion obligations. The Cash Conversion Notice shall expressly confirm such representation and warranty. If thereafter there is a change in the availability of such funds, the Cash Conversion Notice shall automatically and immediately be cancelled and the Corporation shall immediately give notice thereof to the holders of the Series A Preferred. The Cash Conversion Notice may specify an expiration date of such Notice, or may specify that the Corporation may terminate the Cash Conversion Notice by further twenty day notice to the holders of Series A Preferred that the Cash Conversion Notice will not be in effect after a specified date. The Corporation may re-establish the Green Floor Price, at its option, not more frequently than once each month, by giving 30 days prior notice to the holders of the Series A Preferred. If notice of conversion shall be given by a holder of Series A Preferred shares on a date that a Cash Conversion Notice is in effect, the Corporation shall within 48 hours following surrender of the share certificate as provided in Section 4(d) hereof make payment of the Cash Conversion Amount to such holder by wire transfer of immediately available funds in U.S. dollars pursuant to such wire transfer instructions as may have been given by such holder, or otherwise by mailing by certified mail a bank cashier's or certified check for the Cash Conversion Amount to the record address of such holder. If the Corporation fails to make payment of the Cash Conversion Amount to any holder entitled thereto in the manner and within the time specified above, time being of the essence, such holder shall be entitled to receive from the Corporation in cash an amount equal to 3% of the Cash Conversion Amount as compensation to such holder for such failure on the part of the Corporation, and such holder shall be entitled to the immediate return of the stock certificate or certificates representing the Series A Preferred shares submitted by such holder for Cash Conversion. Then and thereafter (whether or not such certificate or certificates have been returned) such holder shall have the right to convert his Series A Preferred shares into Common Stock of the Corporation without regard to the provisions of this subsection (f). A Cash Conversion Notice shall cease to be effective if the Corporation fails to make payment of the Cash Conversion Amount to any holder entitled thereto in the manner and within the time specified above, time being of the essence, and the Corporation may not thereafter give a Cash Conversion Notice. The number of shares that a holder is entitled to convert, determined pursuant to subsections (a) and (b) of this Section 4, shall not be affected by the giving or effectiveness of a Cash Conversion Notice. Any Cash Conversion Notice shall be given as provided in Section 5 hereof. (g) Distributions. In the event the Corporation shall at any time or from time to time make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation or any of its subsidiaries or other property, other than cash dividends from earnings, then in each such event provision shall be made so that the holders of Series A Preferred shall receive, upon the conversion thereof, the securities or other property which they would have received had they been the owners on the date of such event of the number of shares of Common Stock issuable to them upon conversion. Page-117 (h) Certificates as to Adjustments. Upon the occurrence of any adjustments or readjustment of the Conversion Price pursuant to Section 4(e)(v) or Section 4(m) hereof, or any provision for distribution pursuant to Section 4(g) hereof, or any adjustment of the cash per-share prices specified herein, the Corporation at its expense shall promptly compute such adjustment, readjustment or provision in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred a certificate setting forth such adjustment, readjustment or provision and showing in detail the facts upon which such adjustment, readjustment or provision is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred, furnish or cause to be furnished to such holder a like certificate prepared by the Corporation setting forth (i) such adjustments and readjustments, and (ii) the number of other securities and the amount, if any, of other property which at the time would be received upon the conversion of Series A Preferred with respect to each share of Common Stock received upon such conversion. If any holder disputes the computation of such adjustment or provision the Corporation shall cause independent public accountants selected by the Corporation to verify and, if necessary, correct such computation. (i) Notice of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any security or right convertible into or entitling the holder thereof to receive additional shares of Common Stock, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall give notice to each holder of Series A Preferred at least 10 days prior to such date specifying the date on which any such record is to be taken for the purpose of such dividend, distribution, security or right and the amount and character of such dividend, distribution, security or right. (j) Issue Taxes. The Corporation shall pay any and all issue and other taxes, excluding any income, franchise or similar taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of shares of Series A Preferred pursuant hereto; provided, however, that the Corporation shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (k) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval as promptly as practicable. Page-118 (l) Fractional Shares. No fractional shares shall be issued upon the conversion of any share or shares of Series A Preferred. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series A Preferred by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in lieu of issuing any fractional share, pay the holder otherwise entitled to such fraction a sum in cash equal to the fair market value of such fraction on the date of conversion (as determined in good faith by the Board of Directors of the Corporation). (m) Reorganization or Merger. In case of any reorganization or any reclassification of the capital stock of the Corporation or any consolidation or merger of the Corporation with or into any other corporation or corporations or a sale of all or substantially all of the assets of the Corporation to any other person, and the holders of Series A Preferred do not elect to treat such transaction as a liquidation, dissolution or winding up as provided in Section 2, then, as part of such reorganization, consolidation, merger or sale, provision shall be made so that each share of Series A Preferred shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series A Preferred would have been entitled upon the record date of (or date of, if no record date is fixed) such event and, in any case, appropriate adjustment (as determined by the Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of the Series A Preferred, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as equivalent as is practicable, in relation to any shares of stock or the securities or property (including cash) thereafter deliverable upon the conversion of the shares of Series A Preferred. The Corporation shall have no obligation to obtain the prior consent of the holders of the Series A Preferred, individually or as a class, except as expressly provided herein or as provided by applicable law. 5. Notices. Any notice to be given to the holders of the Series A Preferred shall be (i) mailed by first class mail postage prepaid to each holder of Series A Preferred at the address shown on the records of the Corporation for such holder, (ii) transmitted by telecopy or facsimile transmission to any holder which has supplied a telecopy or facsimile address to the Corporation, and (iii) unless receipted for by telecopy or facsimile on the date such notice is given, shall be transmitted by an overnight delivery service or courier service for delivery at the address shown on the records of the Corporation for such holder on the first business day following the date such notice is given, or if delivery in one business day to such address cannot be effected by such delivery service, then on the earliest day on which such delivery can be made. Page-119 6. Other Provisions. For all purposes of this Resolution, the term "date of issuance" or "closing" shall mean the day on which shares of the Series A Preferred are first issued by the Corporation, and the terms "trading price," "low trading price," "closing price," "last trade price," and "trading days" shall have the meanings given them in Section 4(e) hereof. Any provision herein which conflicts with or violates any applicable usury law shall be deemed modified to the extent necessary to avoid such conflict or violation. 7. Restrictions and Limitations. The Corporation shall not undertake the following actions without the consent of the holders of a majority of the Series A Preferred: (i) modify its Certificate of Incorporation or Bylaws so as to amend or change any of the rights, preferences, or privileges of the Series A Preferred, (ii) authorize or issue any other equity security senior to or ranking on parity with the Series A Preferred, or (iii) pay any dividends in cash or property on, or purchase or otherwise acquire for value, any Common Stock purchase or other equity security of the Corporation either junior to or on a parity with the Series A Preferred except from current or retained earnings or from the net proceeds of sale of equity securities, except for purchases of Common Stock from terminating or retiring employees pursuant to the terms of employee benefit plans in an aggregate amount not greater than $1 million. 8. Voting Rights. Except as provided herein or as provided for by law, the Series A Preferred shall have no voting rights. 9. Attorneys' Fees. Any holder of Series A Preferred shall be entitled to recover from the Corporation reasonable attorneys' fees and expenses incurred by such holder in connection with enforcement by such holder of any obligation of the Corporation hereunder, if such holder is the prevailing party in an action or proceeding to compel such enforcement. 10. Limitation on Number of Conversion Shares. The Corporation shall not be obligated to issue, in the aggregate, more than 7,420,000 shares of Common Stock as presently constituted (the "NASD Cap") upon conversion of the Series A Preferred, if issuance of a larger number of shares would constitute a breach of the Rules of NASD. Subject to the obligation to effect certain redemptions pursuant to the last four sentences of this Section, if further issuances of shares of Common Stock upon conversion of the Series A Preferred would constitute a breach of the NASD Rules (i.e., all of the shares permitted to be issued under the NASD Cap shall have been so issued), then so long thereafter as such limitation shall continue to be applicable and any shares of Series A Preferred are submitted for conversion such shares shall receive in cash an amount equal to the Cash Conversion Amount determined as provided in Section 4(f) hereof, in lieu of the Common Stock which such shares would otherwise be entitled to receive upon conversion. Payment of the Cash Conversion Amount shall be made no later than as specified in Section 4(f) and shall bear daily interest thereafter at the rate of one-tenth of one percent per day until paid. The NASD Cap shall be proportionately and equitably adjusted in the event of stock splits, stock dividends, reverse stock splits, Page-120 reclassifications or other such events, in such manner as the Board of Directors of the Corporation shall reasonably determine. If (A) the Corporation is unable to obtain shareholder approval concerning the issuance of shares of Common Stock upon conversion of the Series A Preferred at a meeting of shareholders of the Corporation held not later than June 30, 1998, then (B) the Corporation shall immediately redeem, at a "Special Redemption Price" equal to 110% of the liquidation preference of such shares, the smallest number of Shares which is sufficient, in the Corporation's reasonable judgment, such that following such redemption, conversion of the remaining shares of Series A Preferred would not constitute a breach of the Corporation's obligations under the NASD Rules. Any redemption effected pursuant to the preceding sentence shall require 15 days notice and the Redemption Date shall be not more than 15 days after the date specified in Clause A of the preceding sentence. Such redemption shall be made pro-rata. If there shall be a default in payment of the Special Redemption Price, the amount so payable shall bear daily interest from and after the Redemption Date at the rate of one-twentieth of one percent per day until paid. IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate to be executed by its Chairman of the Board and by its Executive Vice President, Chief Financial Officer and Secretary, this 12th day of February 1998. /S/ L. David Sikes - ------------------------- L. David Sikes Chairman of the Board /S/ Richard L. Mohr - ------------------------- Richard L. Mohr Executive Vice President, Chief Financial Officer and Secretary Page-121 State of Delaware Office of the Secretary of State I, Edward J. Freel, Secretary of State of the State of Delaware, do hereby certify the attached is a true and correct copy of the Certificate of Amendment of "Ramtron International Corporation", filed in this office on the sixth day of August, A.D. 1999, at 1 O'clock P.M. A filed copy of this certificate has been forwarded to the New Castle County Recorder of Deeds. /S/ Edward J. Freel - --------------------------------------- Edward J. Freel, Secretary of State Authentication: 9908472 Date: 08-06-99 Page-122 State of Delaware Secretary of State Division of Corporations Filed 01:00 PM 08/06/1999 991327093 - 2026110 CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF RAMTRON INTERNATIONAL CORPORATION RAMTRON INTERNATIONAL CORPORATION (hereafter called the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies: FIRST, that the Corporation's Board of Directors has duly adopted the following resolution: RESOLVED, that the Corporation's Certificate of Designation, Preferences, Rights and Limitations of Series A Convertible Preferred Stock, $0.01 Par Value ("Certificate of Designation"), filed on February 12, 1998, with the Secretary of State of the State of Delaware is hereby amended and restated in its entirety to read as follows: "1. Authorized Shares. There shall be a series of shares of the Preferred Stock of the Corporation designated "Series A Convertible Preferred Stock". The number of authorized shares of such series shall be 29,000 and the rights and preferences of such series (the "Series A Preferred") and the limitations or restrictions thereon, shall be as set forth herein. 2. Dividends. The holders of the Series A Preferred shall be entitled to receive cumulative dividends at a rate equal to 11% per annum of the liquidation preference per share per annum, payable semi-annually on December 31 and June 30, with the first payment being payable on December 31, 1999, when and as declared by the Board of Directors. Prior to the first anniversary of the date of filing of this Certificate of Amendment (the "Closing Date"), all dividends shall be paid in Series A Preferred. On and after the first anniversary of the Closing Date, dividends may be paid, at the Corporation's option, on any dividend payment date, either in cash or by the issuance of additional shares of Series A Preferred (and payment of cash in lieu of fractional shares) having an aggregate liquidation preference equal to the amount of such dividends. In the event that on or after the first anniversary of the Closing Date, dividends are paid in additional shares of Series A Preferred, the dividend rate shall increase by 2% for such dividend payment period. In the event that Page-123 a registration statement is not effective within 130 days after the Closing Date with respect to the conversion rights set forth in Section 6 and the cash exchange rights set forth in Section 7, the Series A Preferred shall accrue dividends from and after the end of such 130 day period at a rate of 18% per annum until such time as the registration statement is declared effective. Dividends as provided by this Section 2 shall accrue on any given share from the Closing Date, or from the date of original issuance of such share, whichever is later, and shall accrue from day to day whether or not declared. Dividends not theretofore paid shall be paid upon conversion of any shares of the Series A Preferred and shares of Series A Preferred issued in payment of such dividends shall be simultaneously converted into Common Stock together with the shares on which such dividends have accrued. Dividends accrued in accordance with the terms of the Series A Preferred prior to the Closing Date shall not be affected by this Section 2. 3. Liquidation Preference. (a) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Preferred shall be entitled to receive, prior and in preference to any distribution of any assets of the Corporation to the holders of the Common Stock or any other class or series of shares except any class or series which is entitled to priority over the Series A Preferred, the amount of $1,000 per share plus any accrued but unpaid dividends (the "Liquidation Preference"). (b) Subject to the last sentence of this Section 3(b), a consolidation or merger of the Corporation with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the Corporation, shall, at the option of the holders of the Series A Preferred, be deemed a liquidation, dissolution or winding up within the meaning of this Section 3 if the shares of stock of the Corporation (along with all derivative securities) outstanding immediately prior to such transaction represent immediately after such transaction less than a majority of the voting power of the surviving corporation (or of the acquirer of the Corporation's assets in the case of a sale of assets). Such option may be exercised by the vote or written consent of holders of a majority of the Series A Preferred at any time within thirty calendar days after written notice of the essential terms of such transaction shall have been given to the holders of the Series A Preferred as provided in Section 8 hereof. Such notice shall be given by the Corporation immediately following determination of such essential terms. If such option is exercised, the holders of the Series A Preferred shall be entitled to receive, in cash, immediately upon the occurrence of such transaction, an amount per share equal to the Liquidation Preference. This Section shall not apply to a business combination in which substantially all the Common Stock of the Corporation is converted into or exchanged for voting common stock of the corporation surviving such business combination, if (i) such common stock of the surviving corporation is listed and traded on The Nasdaq Stock Market or the New York Stock Exchange, and (ii) the Board of Directors of the Corporation determines in good faith that the conversion rights and other rights and preferences of the Series A Preferred are preserved and not rendered of less value by the terms of such business combination. Page-124 4. Mandatory Redemption. All of the Series A Preferred outstanding on July 31, 2002 shall be redeemed by the Corporation at a redemption price equal to 100% of the Liquidation Preference thereof plus, without duplication, accumulated and unpaid dividends to the date of redemption. 5. Optional Redemption. The Series A Preferred shall be redeemable, at the option of the Corporation and subject to the consent of its lenders, in whole or in part, at any time on or after July 31, 2000 at an amount equal to its Liquidation Preference plus, without duplication, accumulated and unpaid dividends to the date of redemption. 6. Conversion. The holders of the Series A Preferred shall have optional conversion rights as follows: (a) Conversion Rights. (i) At any time prior to 10 days after the Closing Date (the "Post- Closing Date"), the Series A Preferred shall be exchangeable at the option of the holder for shares of Common Stock at an exchange ratio of $.75 face value of Series A Preferred per share of Common Stock plus accrued and unpaid dividends to the date of conversion. (ii) Each holder of record of Series A Preferred shares shall be entitled to convert Series A Preferred into shares of Common Stock on or after the Post-Closing Date at the conversion rate of 1,000 shares of Common Stock per share of Series A Preferred (i.e., $1.00 per share of Common Stock) (such rate of exchange, and the rate of exchange set forth in paragraph (i), as applicable, being hereinafter referred to as the "Conversion Rate"). (b) Restriction on Right to Convert. A share of Series A Preferred shall not be converted into Common Stock if following such conversion the holder thereof together with affiliates of such holder would be the beneficial owners (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of 10% or more of the Common Stock of the Corporation. A share which may not be converted because of the preceding sentence will thereafter be convertible by any holder if at the time such share is submitted for conversion the preceding sentence is inapplicable. Page-125 (c) Mechanics of Conversion. To convert shares of Series A Preferred into shares of Common Stock, the holder shall give written notice to the Corporation (which notice may be given by facsimile transmission) that such holder elects to convert the same and shall state therein the number of shares to be converted and the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. Promptly thereafter the holder shall surrender the certificate or certificates representing the shares to be converted, duly endorsed, at the office of the Corporation or of any transfer agent for such shares, or at such other place designated by the Corporation. The Corporation shall, immediately upon receipt of such notice, issue and deliver to or upon the order of such holder, against delivery of the certificates representing the shares which have been converted, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled, and a certificate representing the shares of Series A Preferred not so converted, if any. The Corporation shall effect such issuance immediately and shall transmit the certificates by messenger or overnight delivery service to reach the address designated by such holder within three trading days after the receipt of such notice. Notice of conversion may be given by a holder at any time of day up to 5:00 p.m. Los Angeles time, and such conversion shall be deemed to have been made immediately prior to the close of business on the date such notice of conversion is given (the "Conversion Date"). The person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock at the close of business on the Conversion Date. (d) Determination of Conversion Rate. In the event that the Corporation shall declare or pay any dividend on the Common Stock payable in Common Stock or in rights to acquire Common Stock, or shall effect a stock split or reverse stock split, or a combination, consolidation or reclassification of the Common Stock, then the Conversion Rate shall be proportionately decreased or increased, as appropriate, to give effect to such event, and like adjustment shall be made in any price per share specified elsewhere herein. (e) Distributions. In the event the Corporation shall at any time or from time to time make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in securities of the Corporation or any of its subsidiaries or other property, other than cash dividends from earnings, then in each such event provision shall be made so that the holders of Series A Preferred shall receive, upon the conversion thereof, the securities or other property which they would have received had they been the owners on the date of such event of the number of shares of Common Stock issuable to them upon conversion. Page-126 (f) Certificates as to Adjustments. Upon the occurrence of any adjustments or readjustment of the Conversion Rate pursuant to Section 6(d) hereof, or any provision for distribution pursuant to Section 6(e) hereof, or any adjustment of the cash per-share prices specified herein, the Corporation at its expense shall promptly compute such adjustment, readjustment or provision in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred a certificate setting forth such adjustment, readjustment or provision and showing in detail the facts upon which such adjustment, readjustment or provision is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred, furnish or cause to be furnished to such holder a like certificate prepared by the Corporation setting forth (i) such adjustments and readjustments, and (ii) the number of other securities and the amount, if any, of other property which at the time would be received upon the conversion of Series A Preferred with respect to each share of Common Stock received upon such conversion. If any holder disputes the computation of such adjustment or provision the Corporation shall cause independent public accountants selected by the Corporation to verify and, if necessary, correct such computation. (g) Notice of Record Date. In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any security or right convertible into or entitling the holder thereof to receive additional shares of Common Stock, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall give notice to each holder of Series A Preferred at least 10 days prior to such date specifying the date on which any such record is to be taken for the purpose of such dividend, distribution, security or right and the amount and character of such dividend, distribution, security or right. (h) Issue Taxes. The Corporation shall pay any and all issue and other taxes, excluding any income, franchise or similar taxes, that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of shares of Series A Preferred pursuant hereto; provided, however, that the Corporation shall not be obligated to pay any transfer taxes resulting from any transfer requested by any holder in connection with any such conversion. (i) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval as promptly as practicable. Page-127 (j) Fractional Shares. No fractional shares shall be issued upon the conversion of any share or shares of Series A Preferred. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Series A Preferred by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If, after the aforementioned aggregation, the conversion would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in lieu of issuing any fractional share, pay the holder otherwise entitled to such fraction a sum in cash equal to the fair market value of such fraction on the date of conversion (as determined in good faith by the Board of Directors of the Corporation). (k) Reorganization or Merger. In case of any reorganization or any reclassification of the capital stock of the Corporation or any consolidation or merger of the Corporation with or into any other corporation or corporations or a sale of all or substantially all of the assets of the Corporation to any other person, and the holders of Series A Preferred do not elect to treat such transaction as a liquidation, dissolution or winding up as provided in Section 3, then, as part of such reorganization, consolidation, merger or sale, provision shall be made so that each share of Series A Preferred shall thereafter be convertible into the number of shares of stock or other securities or property (including cash) to which a holder of the number of shares of Common Stock deliverable upon conversion of such share of Series A Preferred would have been entitled upon the record date of (or date of, if no record date is fixed) such event and, in any case, appropriate adjustment (as determined by the Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of the Series A Preferred, to the end that the provisions set forth herein shall thereafter be applicable, as nearly as equivalent as is practicable, in relation to any shares of stock or the securities or property (including cash) thereafter deliverable upon the conversion of the shares of Series A Preferred. The Corporation shall have no obligation to obtain the prior consent of the holders of the Series A Preferred, individually or as a class, except as expressly provided herein or as provided by applicable law. 7. Cash Exchange Rights. (a) Exchange Rights. At any time prior to June 25, 1999, the Series A Preferred shall be exchangeable at the option of a holder for cash in amount per share equal to 50% of the face value of the Series A Preferred Share plus all accrued but unpaid dividends on the Series A Preferred Share, up to an aggregate amount of $6.4 million face value and accrued and unpaid dividends to the date of exchange. If, in the judgment of the Board of Directors of the Corporation, the Corporation's financial condition and results of operations permit the Corporation to permit the exchange for cash of more than $6.4 million face value (plus accrued dividends) of the Series A Preferred, the terms of the Series A Preferred will permit the exchange for cash of up to $8.0 million face value (plus accrued and unpaid dividends) of the Series A Preferred. To the extent that holders of Series A Preferred desire to exchange in the aggregate a greater face value (plus accrued and unpaid dividends) of the Series A Preferred than is permitted under the terms of the Series A Preferred, Series A Preferred will be accepted for exchange by the Corporation for cash on a pro rata basis based upon the aggregate face value (plus accrued and unpaid dividends) of the Series A Preferred validly tendered for exchange. Page-128 (b) Mechanics of Exchange. To exercise the exchange right set forth in Section 7(a), the holder shall give written notice to the Corporation (which notice may be given by facsimile transmission) that such holder elects to exercise such right and shall state therein the number of shares to be converted and the name or names in which such holder wishes the payment to be received. Promptly thereafter the holder shall surrender the certificate or certificates representing the shares to be exchanged, duly endorsed, at the office of the Corporation or of any transfer agent for such shares, or at such other place designated by the Corporation. The Corporation shall, immediately upon receipt of such notice, issue and deliver to or upon the order of such holder, against delivery of the certificates representing the shares which have been converted, a check for payment of the cash amount to which such holder shall be entitled, and a certificate representing the shares of Series A Preferred not so exchanged, if any. The Corporation shall effect such payment immediately and shall transmit the check by messenger or overnight delivery service to reach the address designated by such holder within three trading days after the receipt of such notice. Notice of the exercise of exchange rights may be given by a holder at any time of day up to 5:00 p.m. Los Angeles time, and such exercise shall be deemed to have been made immediately prior to the close of business on the date such notice of conversion is given (the "Exchange Date"). The person or persons entitled to receive payment upon such exchange shall be treated for all purposes as the record holder or holders of such shares of Common Stock at the close of business on the Exchange Date. 8. Notices. Any notice to be given to the holders of the Series A Preferred shall be (i) mailed by first class mail postage prepaid to each holder of Series A Preferred at the address shown on the records of the Corporation for such holder, (ii) transmitted by telecopy or facsimile transmission to any holder which has supplied a telecopy or facsimile address to the Corporation, and (iii) unless receipted for by telecopy or facsimile on the date such notice is given, shall be transmitted by an overnight delivery service or courier service for delivery at the address shown on the records of the Corporation for such holder on the first business day following the date such notice is given, or if delivery in one business day to such address cannot be effected by such delivery service, then on the earliest day on which such delivery can be made. 9. Registration Rights. The corporation shall use its best efforts to file and cause to become effective as of no later than 130 days after June 15th a registration statement for Common Stock of the Corporation issuable upon exchange or conversion of the Series A Preferred, to the extent such shares of Common Stock are not then freely tradable under the federal securities laws. Page-129 10. Restrictions and Limitations. The Corporation shall not undertake the following actions without the consent of the holders of a majority of the Series A Preferred: (i) modify its Certificate of Incorporation or Bylaws so as to amend or change any of the rights, preferences, or privileges of the Series A Preferred, (ii) authorize or issue any other equity security senior to or ranking on parity with the Series A Preferred, or (iii) pay any dividends in cash or property on, or purchase or otherwise acquire for value, any Common Stock purchase or other equity security of the Corporation either junior to or on a parity with the Series A Preferred except from current or retained earnings or from the net proceeds of sale of equity securities, except for purchases of Common Stock from terminating or retiring employees pursuant to the terms of employee benefit plans in an aggregate amount not greater than $1 million. 11. Voting Rights. The Series A Preferred shall have no voting rights, except as otherwise required by law and except in certain circumstances described herein, including (i) amending certain rights of the holders of the Series A Preferred and (ii) the issuance of any class of equity securities that ranks pari passu with or senior to the Series A Preferred other than certain additional shares of Series A Preferred. 12. Attorneys' Fees. Any holder of Series A Preferred shall be entitled to recover from the Corporation reasonable attorneys' fees and expenses incurred by such holder in connection with enforcement by such holder of any obligation of the Corporation hereunder, if such holder is the prevailing party in an action or proceeding to compel such enforcement." SECOND, that the proposed amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware and that notice of the taking of such action by written consent has been given as provided in Section 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate of Amendment to be executed by L. David Sikes, its Chairman of the Board and Chief Executive Officer, this 6th day of August 1999. Ramtron International Corporation By: /S/ L. David Sikes -------------------- L. David Sikes Chairman of the Board and Chief Executive Officer Page-130 State of Delaware Office of the Secretary of State I, Edward J. Freel, Secretary of State of the State of Delaware, do hereby certify the attached is a true and correct copy of the Certificate of Amendment of "Ramtron International Corporation", filed in this office on the sixth day of August, A.D. 1999, at 1:05 O'clock P.M. A filed copy of this certificate has been forwarded to the New Castle County Recorder of Deeds. /S/ Edward J. Freel - ----------------------------------- Edward J. Freel, Secretary of State Authentication: 9908479 Date: 08-06-99 Page-131 State of Delaware Secretary of State Division of Corporations Filed 01:05 PM 08/06/1999 991327102 - 2026110 CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF RAMTRON INTERNATIONAL CORPORATION Ramtron International Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), does hereby certify: FIRST, that the Corporation's Board of Directors has duly adopted the following resolution: RESOLVED, that the first numbered paragraph of Article FOURTH of the Certificate of Incorporation, as amended, is hereby deleted and the following is substituted in lieu thereof: "FOURTH: The total number of shares of capital stock which the Corporation shall have authority to issue is 60,000,000, consisting of 50,000,000 shares of common stock, par value $0.01 per share (the "Common Stock"), and 10,000,000 shares of preferred stock, par value $0.01 per shares (the "Preferred Stock"). Immediately upon the filing of this Amendment to the Certificate of Incorporation (the "Effective Time"), each 5 shares of the Common Stock, issued and outstanding immediately prior to the Effective Time (the "Old Common Stock"), shall automatically, without further action on the part of the Corporation or any holder of Old Common Stock, be combined, converted and changed into one (1) fully paid and nonassessable share of Common Stock (the "New Common Stock" and the "Reverse Stock Split"), subject to the treatment of fractional share interests as described below. The conversion of the Old Common Stock into New Common Stock will be deemed to occur at the Effective Time regardless of when the certificates representing such Old Common Stock are physically surrendered to the Corporation in exchange for certificates representing New Common Stock. After the Effective Time, certificates representing the Old Common Stock will, until surrendered to the Corporation in exchange for New Common Stock, represent the number of shares of New Common Stock into which such Old Common Stock shall have been converted pursuant to this Amendment and the right to receive cash in lieu of any fractional share interest. No certificates representing fractional shares of New Common Stock shall be issued in connection with the Reverse Stock Split. Holders who otherwise would be entitled to receive fractional share interests of New Common Stock shall be entitled to receive in lieu of fractional shares and Page-132 upon surrender to the Corporation's transfer agent of their certificates representing Old Common Stock, duly endorsed, a cash payment in an amount equal to the product calculated by multiplying (i) the closing sales price of the Corporation's Common Stock on the Effective Date as reported on The Nasdaq Stock Market or, if no such sales price exists, the mid-range between the last bid and asked price on the Effective Date by (ii) the number of shares of Old Common Stock held by such holder that would otherwise have been converted into a fractional share interest. Upon surrender by a holder of Old Common Stock of a certificate or certificates for Old Common Stock, duly endorsed, to the Corporation's transfer agent, the Corporation shall, as soon as practicable thereafter, issue and deliver to such holder of Old Common Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of New Common Stock to which such holder shall be entitled as aforesaid together with cash in lieu of any fractional share interest." SECOND, that said Amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, Ramtron International Corporation has caused this Certificate of Amendment to be executed by L. David Sikes, its Chairman of the Board and Chief Executive Officer, this 6th day of August 1999. Ramtron International Corporation By: /S/ L. David Sikes -------------------- L. David Sikes Chairman of the Board and Chief Executive Officer Page-133 EX-4.21 3 WARRANT RAMTRON INTERNATIONAL CORPORATION Warrant to Purchase Shares of Common Stock RAMTRON INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), hereby certifies that, for value received and the cancellation of that certain warrant issued in the name of Oren Lee Benton, Debtor in Possession, dated August 31, 1995 for 1,861,216 shares of Common Stock, NTC Liquidating Trust or its assigns (the "Holder") is entitled to purchase from the Company, during the period commencing on the date hereof and ending at 5:00 p.m. Eastern Time on the Expiration Date (as hereinafter defined) (the "Warrant Exercise Period"), subject to the terms and conditions hereinafter set forth, the number of shares of the Common Stock, par value $0.01, of the Company determined in accordance with Section 1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement by and between the Holder and the Company dated effective as of August 31, 1995 (the "Loan Agreement"). 1. Number of Warrant Shares. Subject to adjustment as provided in Section 4, the number of shares of Common Stock for which this Warrant may, at any given time during the Warrant Exercise Period, be exercised (such total number of underlying unissued shares as may, from time to time, be issuable upon the exercise hereof being hereinafter referred to as the "Warrant Shares") shall be 372,243 (which number reflects the 1-for-5 reverse stock split for Ramtron Common Stock which became effective August 6, 1999). 2. Exercise Price. This Warrant is exercisable for Warrant Shares at a price per share (the "Warrant Price") equal to $5.00. 3. Expiration Date. Except as otherwise provided herein, this Warrant shall expire on the earlier to occur of (a) the date on which this Warrant is fully exercised and (b) 5:00 p.m. Eastern Time, on August 31, 2002, or, if such day is not a Business Day, then at 5:00 p.m. Eastern Time on the next succeeding Business Day (the "Expiration Date"). 4. Procedure for Exercise. Subject to Section 5, the Holder may exercise this Warrant by presenting and surrendering it to the Company at the office specified in Section 12 between the hours of 9:00 a.m. and 5:00 p.m. on any Business Day during the Warrant Exercise Period, accompanied by (a) payment in cash of the aggregate Warrant Price of the Warrant Shares to be purchased and (b) a subscription form duly executed by the Holder in substantially the form attached hereto as Annex A. The number of Warrant Shares shall be reduced immediately upon any partial exercise by the number of shares so purchased, and a new Warrant, of like tenor and effect herewith, for the remaining Warrant Shares shall be issued to the Holder. Page-134 5. Conditions to Exercise. It shall be a condition precedent to any exercise of this Warrant to purchase shares of Common Stock that the Holder shall have obtained, prior to such exercise, all regulatory approvals, if any, required to lawfully acquire such shares. 6. Covenants. The Company covenants and agrees with the Holder as follows: (a) All Warrant Shares shall, upon delivery to the Holder, be duly authorized, validly issued, fully paid and non-assessable shares of Common Stock. (b) The Company shall pay when due and payable any and all federal and state original issue stock taxes, if any, that may be payable in respect of the issuance of Warrant Shares upon whole or partial exercise of this Warrant. (c) The Company shall at all times on or after the issuance of this Warrant and prior to the expiration of the Warrant Exercise Period reserve and keep available a number of authorized but unissued shares of Common Stock sufficient to permit the full exercise of this Warrant. If at any time the number of authorized but unissued shares of Common Stock is not sufficient for this purpose, the Company shall take such corporate action as may be necessary to increase the authorized but unissued shares of Common Stock to a number that is sufficient for this purpose. (d) The Company shall cooperate fully with the Holder in obtaining any regulatory approvals referred to in Section 5 hereof. 7. Loss, Theft, Destruction or Mutilation. Upon delivery by the Holder to the Company of evidence reasonably satisfactory to the Company of the ownership and loss, theft, destruction or mutilation of this Warrant, and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company, and (b) in the case of mutilation, of this Warrant for cancellation, the Company shall execute and deliver, in lieu thereof, a new Warrant of like tenor and effect herewith; provided, however, that the Company may require as an additional condition to issuance of any such substitute Warrant payment of a sum sufficient to reimburse it for any stamp tax, other governmental charge or out-of-pocket expense connected therewith. 8. Rights of Holder. (a) The Holder of this Warrant or of any portion thereof shall not, solely as such, be entitled to vote or receive dividends or be deemed the holder of Common Stock for any purpose nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon a merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Warrant Shares shall have become deliverable. Page-135 (b) Regardless of the date of issue and delivery of certificates representing such shares, the Holder shall for all purposes be deemed to have become the holder of record of all shares purchased upon exercise of this Warrant as of the close of business on the date on which the Company has received, with respect to such purchase, (a) this Warrant, (b) the Warrant Price and (c) a duly executed subscription form. 9. Transfer of Warrant. The Company shall, upon surrender to it of this Warrant, accompanied by one or more duly executed certificates of transfer in substantially the form attached hereto as Annex B, execute and deliver in lieu hereof (a) to and in the name of each assignee or transferee, a new Warrant, of like tenor and effect herewith, representing the right to purchase, on the same terms and conditions as set forth herein, such number of the Warrant Shares as shall have been so assigned or transferred; and (b) to the Holder, in case the right to purchase some portion of the Warrant Shares shall have been retained by the Holder, a new Warrant, of like tenor and effect herewith, representing the right to purchase, on the same terms and conditions as set forth herein, such number of Warrant Shares. 10. Disposition of Shares. (a) Each Holder understands and agrees that this Warrant and the Warrant Shares have not been registered under either the Securities Act of 1933, as amended (the "Act") or any applicable state securities laws (the "State Acts") and may not lawfully be sold or otherwise disposed of for value except upon registration of such transfer in accordance with the securities registration requirements of the Act and any applicable State Acts, or pursuant to an exemption from such registration requirements. (b) Any certificates evidencing shares purchased upon exercise hereof shall be imprinted with a conspicuous legend in substantially the following form: The securities represented by this certificate have not been registered under either the Securities Act of 1933, as amended (the "Act") or applicable state securities laws (the "State Acts") and shall not be sold or otherwise disposed of for value by the Holder except upon registration of such sale or disposition in accordance with the securities registration requirements of the Act and any applicable State Acts, or pursuant to exemption from such registration requirements. (c) In connection with the exercise of this Warrant and the issuance of the Warrant Shares, and upon the request of Holder, Borrower shall register under the Securities Act of 1933, as amended, within a reasonable period of time after the date of such exercise and issuance, the resale of the Warrant Shares issued pursuant to such exercise. Page-136 11. Adjustment of Purchase Price and Number of Shares. The number and kind of securities purchasable upon the exercise of the Warrants and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events, as follows: (a) Consolidation, Merger or Reclassification. If the Company at any time while the Warrants remain outstanding and unexpired shall consolidate with or merge into any other corporation, or sell all or substantially all of its assets to another corporation, or reclassify or in any manner change the securities then purchasable upon the exercise of the Warrants (any of which shall constitute a "Reorganization"), then lawful and adequate provision shall be made whereby this Warrant certificate shall thereafter evidence the right to purchase such number and kind of securities and other property as would have been issuable or distributable on account of such Reorganization upon or with respect to the securities which were purchasable or would have become purchasable under the Warrants immediately prior to such Reorganization. The Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Reorganization shall assume by written instrument executed and mailed or delivered to the Holder, at the last address of the Holder appearing on the books of the Company, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase. Notwithstanding anything in this Section 11(a) to the contrary, the prior two sentences shall be inoperative and of no force and effect if upon the completion of any such Reorganization the stockholders of the Company immediately prior to such event do not own at least fifty percent (50%) of the equity interest of the corporation resulting from such Reorganization and those Warrants which are unexercised shall expire on the completion of such Reorganization if the notice required by Section 11(e) hereof has been given. (b) Subdivision or Combination of Shares. If the Company at any time while the Warrants remain outstanding and unexpired shall subdivide or combine its Common Stock, the Warrant Price shall be adjusted to a price determined by multiplying the Warrant Price in effect immediately prior to such subdivision or combination by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such subdivision or combination and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such subdivision or combination. (c) Certain Dividends and Distribution. If the Company at any time prior to the expiration of the Warrant Exercise Period shall take a record of the holders of its Common Stock for the purposes of: Page-137 (i) Stock Dividends. Entitling them to receive a dividend payable in, or to receive any other distribution without consideration of, Common Stock, then the Warrant Price shall be adjusted to the price determined by multiplying the Warrant Price in effect immediately prior to each dividend or distribution by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution; or (ii) Distribution of Assets, Securities, etc. Making any distribution without consideration with respect to its Common Stock (other than a cash dividend) payable otherwise than in its Common Stock, then the Holder shall, upon the exercise hereof, be entitled to receive, in addition to the number of Shares receivable thereupon, and without payment of any additional consideration therefor, such assets or securities as would have been payable to the Holder as owner of that number of Shares on the record date for such distribution; and an appropriate provision therefore shall be made a part of any such distribution. (d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to Subsections (b) or (c)(i) of this Section 11, the number of shares purchasable under the Warrants represented by this certificate shall be adjusted to that number determined by multiplying the number of Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately following such adjustment. (e) Notice. In case at any time: (i) The Company shall pay any dividend payable in stock upon its Common Stock or make any distribution, excluding a cash dividend, to the holders of its Common Stock. (ii) The Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; (iii) There shall be any reclassification of the Common Stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or Page-138 (iv) There shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give to the Holder at least ten (10) days prior written notice (or, in the event of notice pursuant to Section 11(e)(iii), at least thirty (30) days prior written notice) of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect to any such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up. Such notice in accordance with the foregoing clause shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holder of Common Stock shall be entitled thereto, and such notice in accordance with the foregoing clause shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Each such written notice shall be given by first-class mail, postage prepaid, addressed to the Holder at the address of the Holder as shown on the books of the Company. (f) No Change in Certificate. The form of this Warrant certificate need not be changed because of any adjustment in the Warrant Price or in the number of Warrant Shares purchasable on its exercise. The Warrant Price or the number of Warrant Shares shall be considered to have been so changed as of the close of business on the date of adjustment. 12. Notices. All notices and other communications pursuant hereto shall be in writing and shall be deemed given if delivered in person or sent by United States registered mail, postage prepaid: If to the Company at: Ramtron International Corporation 1850 Ramtron Drive Colorado Springs, Colorado 80921 Attention: Chief Executive Officer If to the Holder at: NTC Liquidating Trust c/o PriceWaterhouseCoopers 950 Seventeenth Street, Suite 2500 Denver, Colorado 80202 with copies to: James Huemoeller LeBoeuf, Lamb, Green & MacRae 633 17th Street, Suite 2000 Denver, Colorado 80202 Page-139 or at such other address as either party may designate in writing by notice to the other party as provided above. 13. Termination. This Warrant shall automatically and immediately terminate, without any further action by the Company or the Holder, upon the occurrence of any of the following: (i) any voluntary or involuntary proceeding shall be commenced with respect to the Holder in a court of competent jurisdiction seeking relief under any applicable bankruptcy, insolvency or similar law; (ii) a receiver, custodian, sequestrator or similar official for the Holder or for any substantial part of its property shall be appointed or elected; (iii) the Holder shall commence any winding-up or liquidation, voluntary or involuntary, of the Holder; (iv) the Holder shall make a general assignment for the benefit of its creditors or become unable generally, or admit in writing its inability, to pay its debts as they become due; or (v) the Holder shall take any corporate or similar action for the purpose of effecting any of the foregoing. 14. Miscellaneous. This Warrant contains the entire agreement between the parties with respect to the matters set forth herein and may not be modified, supplemented or amended except in a writing signed by both parties. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware. WITNESS the following signature effective as of the 20th day of December 1999. RAMTRON INTERNATIONAL CORPORATION By: /S/ L. David Sikes --------------------------------- L. David Sikes, Chairman and CEO Page-140 ANNEX A SUBSCRIPTION FORM To Be Executed if Holder Desires To Exercise Warrant The undersigned hereby exercises, according to the terms and conditions hereof, all or part (as indicated below) of this Warrant and herewith makes payment of the applicable Warrant Price in full. Name(s) ------------------------------------ Address ------------------------------------ No. of Shares ------------------------------ Dated -------------------------------------- Signature(s) ------------------------------- - --------------------------------- Social Security Number or Employer Identification Number Page-141 ANNEX B CERTIFICATE OF TRANSFER Ramtron International Corporation 1850 Ramtron Drive Colorado Springs, Colorado 80921 Attention: Chief Executive Officer Date: ----------------------- Gentlemen: With reference to the Warrant to Purchase Shares of Common Stock dated - -------------- (the "Warrant"), issued by Ramtron International Corporation (the "Company") to -------------------------- (the "Holder"), representing as of the date hereof the right to purchase, on the terms and subject to the conditions herein set forth, --------------- shares of the Common Stock, par value $0.01, of the Company (the "Warrant Shares"), the undersigned Holder hereby transfers, conveys and assigns to ------------------------------, subject to the terms and conditions of the Warrant, the right to purchase - ---------------- of such Warrant Shares. By this transfer, all rights of the undersigned Holder with respect to such number of the Warrant Shares are transferred to the transferee. Enclosed herewith is the original Warrant so that the Company may issue in lieu thereof (a) to the transferee, a new Warrant, of like tenor and effect therewith, for the number of Warrant Shares with respect to which the undersigned Holder's rights under the Warrant are hereby transferred, conveyed and assigned, and (b) if the undersigned Holder has retained its rights under the Warrant with respect to some portion of the Warrant Shares, a new Warrant, of like tenor and effect therewith, for such number of the Warrant Shares. - --------------------------------------- as Holder By: ----------------------------------- Title: -------------------------------- Page-142 EX-4.22 4 WARRANT RAMTRON INTERNATIONAL CORPORATION Warrant to Purchase Shares of Common Stock RAMTRON INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), hereby certifies that, for value received and the cancellation of that certain warrant issued in the name of Oren Lee Benton, Debtor in Possession, dated October 5, 1995 for 1,100,000 shares of Common Stock, NTC Liquidating Trust or its assigns (the "Holder") is entitled to purchase from the Company, during the period commencing on the date hereof and ending at 5:00 p.m. Eastern Time on the Expiration Date (as hereinafter defined) (the "Warrant Exercise Period"), subject to the terms and conditions hereinafter set forth, the number of shares of the Common Stock, par value $0.01, of the Company determined in accordance with Section 1. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Loan Agreement by and between the Holder and the Company dated effective as of August 31, 1995 (the "Loan Agreement"). 1. Number of Warrant Shares. Subject to adjustment as provided in Section 4, the number of shares of Common Stock for which this Warrant may, at any given time during the Warrant Exercise Period, be exercised (such total number of underlying unissued shares as may, from time to time, be issuable upon the exercise hereof being hereinafter referred to as the "Warrant Shares") shall be 220,000 (which number reflects the 1-for-5 reverse stock split for Ramtron Common Stock which became effective August 6, 1999). 2. Exercise Price. This Warrant is exercisable for Warrant Shares at a price per share (the "Warrant Price") equal to $5.00. 3. Expiration Date. Except as otherwise provided herein, this Warrant shall expire on the earlier to occur of (a) the date on which this Warrant is fully exercised and (b) 5:00 p.m. Eastern Time, on August 31, 2002, or, if such day is not a Business Day, then at 5:00 p.m. Eastern Time on the next succeeding Business Day (the "Expiration Date")." 4. Procedure for Exercise. Subject to Section 5, the Holder may exercise this Warrant by presenting and surrendering it to the Company at the office specified in Section 12 between the hours of 9:00 a.m. and 5:00 p.m. on any Business Day during the Warrant Exercise Period, accompanied by (a) payment in cash of the aggregate Warrant Price of the Warrant Shares to be purchased and (b) a subscription form duly executed by the Holder in substantially the form attached hereto as Annex A. The number of Warrant Shares shall be reduced immediately upon any partial exercise by the number of shares so purchased, and a new Warrant, of like tenor and effect herewith, for the remaining Warrant Shares shall be issued to the Holder. Page-143 5. Conditions to Exercise. It shall be a condition precedent to any exercise of this Warrant to purchase shares of Common Stock that the Holder shall have obtained, prior to such exercise, all regulatory approvals, if any, required to lawfully acquire such shares. 6. Covenants. The Company covenants and agrees with the Holder as follows: (a) All Warrant Shares shall, upon delivery to the Holder, be duly authorized, validly issued, fully paid and non-assessable shares of Common Stock. (b) The Company shall pay when due and payable any and all federal and state original issue stock taxes, if any, that may be payable in respect of the issuance of Warrant Shares upon whole or partial exercise of this Warrant. (c) The Company shall at all times on or after the issuance of this Warrant and prior to the expiration of the Warrant Exercise Period reserve and keep available a number of authorized but unissued shares of Common Stock sufficient to permit the full exercise of this Warrant. If at any time the number of authorized but unissued shares of Common Stock is not sufficient for this purpose, the Company shall take such corporate action as may be necessary to increase the authorized but unissued shares of Common Stock to a number that is sufficient for this purpose. (d) The Company shall cooperate fully with the Holder in obtaining any regulatory approvals referred to in Section 5 hereof. 7. Loss, Theft, Destruction or Mutilation. Upon delivery by the Holder to the Company of evidence reasonably satisfactory to the Company of the ownership and loss, theft, destruction or mutilation of this Warrant, and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company, and (b) in the case of mutilation, of this Warrant for cancellation, the Company shall execute and deliver, in lieu thereof, a new Warrant of like tenor and effect herewith; provided, however, that the Company may require as an additional condition to issuance of any such substitute Warrant payment of a sum sufficient to reimburse it for any stamp tax, other governmental charge or out-of-pocket expense connected therewith. 8. Rights of Holder. (a) The Holder of this Warrant or of any portion thereof shall not, solely as such, be entitled to vote or receive dividends or be deemed the holder of Common Stock for any purpose nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon a merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until this Warrant shall have been exercised and the Warrant Shares shall have become deliverable. Page-144 (b) Regardless of the date of issue and delivery of certificates representing such shares, the Holder shall for all purposes be deemed to have become the holder of record of all shares purchased upon exercise of this Warrant as of the close of business on the date on which the Company has received, with respect to such purchase, (a) this Warrant, (b) the Warrant Price and (c) a duly executed subscription form. 9. Transfer of Warrant. The Company shall, upon surrender to it of this Warrant, accompanied by one or more duly executed certificates of transfer in substantially the form attached hereto as Annex B, execute and deliver in lieu hereof (a) to and in the name of each assignee or transferee, a new Warrant, of like tenor and effect herewith, representing the right to purchase, on the same terms and conditions as set forth herein, such number of the Warrant Shares as shall have been so assigned or transferred; and (b) to the Holder, in case the right to purchase some portion of the Warrant Shares shall have been retained by the Holder, a new Warrant, of like tenor and effect herewith, representing the right to purchase, on the same terms and conditions as set forth herein, such number of Warrant Shares. 10. Disposition of Shares. (a) Each Holder understands and agrees that this Warrant and the Warrant Shares have not been registered under either the Securities Act of 1933, as amended (the "Act") or any applicable state securities laws (the "State Acts") and may not lawfully be sold or otherwise disposed of for value except upon registration of such transfer in accordance with the securities registration requirements of the Act and any applicable State Acts, or pursuant to an exemption from such registration requirements. (b) Any certificates evidencing shares purchased upon exercise hereof shall be imprinted with a conspicuous legend in substantially the following form: The securities represented by this certificate have not been registered under either the Securities Act of 1933, as amended (the "Act") or applicable state securities laws (the "State Acts") and shall not be sold or otherwise disposed of for value by the Holder except upon registration of such sale or disposition in accordance with the securities registration requirements of the Act and any applicable State Acts, or pursuant to exemption from such registration requirements. (c) In connection with the exercise of this Warrant and the issuance of the Warrant Shares, and upon the request of Holder, Borrower shall register under the Securities Act of 1933, as amended, within a reasonable period of time after the date of such exercise and issuance, the resale of the Warrant Shares issued pursuant to such exercise. Page-145 11. Adjustment of Purchase Price and Number of Shares. The number and kind of securities purchasable upon the exercise of the Warrants and the Warrant Price shall be subject to adjustment from time to time upon the happening of certain events, as follows: (a) Consolidation, Merger or Reclassification. If the Company at any time while the Warrants remain outstanding and unexpired shall consolidate with or merge into any other corporation, or sell all or substantially all of its assets to another corporation, or reclassify or in any manner change the securities then purchasable upon the exercise of the Warrants (any of which shall constitute a "Reorganization"), then lawful and adequate provision shall be made whereby this Warrant certificate shall thereafter evidence the right to purchase such number and kind of securities and other property as would have been issuable or distributable on account of such Reorganization upon or with respect to the securities which were purchasable or would have become purchasable under the Warrants immediately prior to such Reorganization. The Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Reorganization shall assume by written instrument executed and mailed or delivered to the Holder, at the last address of the Holder appearing on the books of the Company, the obligation to deliver to the Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase. Notwithstanding anything in this Section 11(a) to the contrary, the prior two sentences shall be inoperative and of no force and effect if upon the completion of any such Reorganization the stockholders of the Company immediately prior to such event do not own at least fifty percent (50%) of the equity interest of the corporation resulting from such Reorganization and those Warrants which are unexercised shall expire on the completion of such Reorganization if the notice required by Section 11(e) hereof has been given. (b) Subdivision or Combination of Shares. If the Company at any time while the Warrants remain outstanding and unexpired shall subdivide or combine its Common Stock, the Warrant Price shall be adjusted to a price determined by multiplying the Warrant Price in effect immediately prior to such subdivision or combination by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such subdivision or combination and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such subdivision or combination. (c) Certain Dividends and Distribution. If the Company at any time prior to the expiration of the Warrant Exercise Period shall take a record of the holders of its Common Stock for the purposes of: Page-146 (i) Stock Dividends. Entitling them to receive a dividend payable in, or to receive any other distribution without consideration of, Common Stock, then the Warrant Price shall be adjusted to the price determined by multiplying the Warrant Price in effect immediately prior to each dividend or distribution by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution; or (ii) Distribution of Assets, Securities, etc. Making any distribution without consideration with respect to its Common Stock (other than a cash dividend) payable otherwise than in its Common Stock, then the Holder shall, upon the exercise hereof, be entitled to receive, in addition to the number of Shares receivable thereupon, and without payment of any additional consideration therefor, such assets or securities as would have been payable to the Holder as owner of that number of Shares on the record date for such distribution; and an appropriate provision therefore shall be made a part of any such distribution. (d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price pursuant to Subsections (b) or (c)(i) of this Section 11, the number of shares purchasable under the Warrants represented by this certificate shall be adjusted to that number determined by multiplying the number of Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction, the numerator of which shall be the Warrant Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price immediately following such adjustment. (e) Notice. In case at any time: (i) The Company shall pay any dividend payable in stock upon its Common Stock or make any distribution, excluding a cash dividend, to the holders of its Common Stock. (ii) The Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; (iii) There shall be any reclassification of the Common Stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or (iv) There shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; Page-147 then, in any one or more of such cases, the Company shall give to the Holder at least ten (10) days prior written notice (or, in the event of notice pursuant to Section 11(e)(iii), at least thirty (30) days prior written notice) of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect to any such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up. Such notice in accordance with the foregoing clause shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holder of Common Stock shall be entitled thereto, and such notice in accordance with the foregoing clause shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Each such written notice shall be given by first-class mail, postage prepaid, addressed to the Holder at the address of the Holder as shown on the books of the Company. (f) No Change in Certificate. The form of this Warrant certificate need not be changed because of any adjustment in the Warrant Price or in the number of Warrant Shares purchasable on its exercise. The Warrant Price or the number of Warrant Shares shall be considered to have been so changed as of the close of business on the date of adjustment. 12. Notices. All notices and other communications pursuant hereto shall be in writing and shall be deemed given if delivered in person or sent by United States registered mail, postage prepaid: If to the Company at: Ramtron International Corporation 1850 Ramtron Drive Colorado Springs, Colorado 80921 Attention: Chief Executive Officer If to the Holder at: NTC Liquidating Trust c/o PriceWaterhouseCoopers 950 Seventeenth Street, Suite 2500 Denver, Colorado 80202 with copies to: James Huemoeller LeBoeuf, Lamb, Green & MacRae 633 17th Street, Suite 2000 Denver, Colorado 80202 Page-148 or at such other address as either party may designate in writing by notice to the other party as provided above. 13. Termination. This Warrant shall automatically and immediately terminate, without any further action by the Company or the Holder, upon the occurrence of any of the following: (i) any voluntary or involuntary proceeding shall be commenced with respect to the Holder in a court of competent jurisdiction seeking relief under any applicable bankruptcy, insolvency or similar law; (ii) a receiver, custodian, sequestrator or similar official for the Holder or for any substantial part of its property shall be appointed or elected; (iii) the Holder shall commence any winding-up or liquidation, voluntary or involuntary, of the Holder; (iv) the Holder shall make a general assignment for the benefit of its creditors or become unable generally, or admit in writing its inability, to pay its debts as they become due; or (v) the Holder shall take any corporate or similar action for the purpose of effecting any of the foregoing. 14. Miscellaneous. This Warrant contains the entire agreement between the parties with respect to the matters set forth herein and may not be modified, supplemented or amended except in a writing signed by both parties. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware. WITNESS the following signature effective as of the 20th day of December 1999. RAMTRON INTERNATIONAL CORPORATION By: /S/ L. David Sikes --------------------------------- L. David Sikes, Chairman and CEO Page-149 ANNEX A SUBSCRIPTION FORM To Be Executed if Holder Desires To Exercise Warrant The undersigned hereby exercises, according to the terms and conditions hereof, all or part (as indicated below) of this Warrant and herewith makes payment of the applicable Warrant Price in full. Name(s) ------------------------------------ Address ------------------------------------ No. of Shares ------------------------------ Dated -------------------------------------- Signature(s) ------------------------------- - --------------------------------- Social Security Number or Employer Identification Number Page-150 ANNEX B CERTIFICATE OF TRANSFER Ramtron International Corporation 1850 Ramtron Drive Colorado Springs, Colorado 80921 Attention: Chief Executive Officer Date: ----------------------- Gentlemen: With reference to the Warrant to Purchase Shares of Common Stock dated - -------------- (the "Warrant"), issued by Ramtron International Corporation (the "Company") to -------------------------- (the "Holder"), representing as of the date hereof the right to purchase, on the terms and subject to the conditions herein set forth, --------------- shares of the Common Stock, par value $0.01, of the Company (the "Warrant Shares"), the undersigned Holder hereby transfers, conveys and assigns to ------------------------------, subject to the terms and conditions of the Warrant, the right to purchase - ---------------- of such Warrant Shares. By this transfer, all rights of the undersigned Holder with respect to such number of the Warrant Shares are transferred to the transferee. Enclosed herewith is the original Warrant so that the Company may issue in lieu thereof (a) to the transferee, a new Warrant, of like tenor and effect therewith, for the number of Warrant Shares with respect to which the undersigned Holder's rights under the Warrant are hereby transferred, conveyed and assigned, and (b) if the undersigned Holder has retained its rights under the Warrant with respect to some portion of the Warrant Shares, a new Warrant, of like tenor and effect therewith, for such number of the Warrant Shares. - --------------------------------------- as Holder By: ----------------------------------- Title: -------------------------------- Page-151 EX-4.23 5 WARRANT THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. Warrants to Purchase Shares of Common Stock RAMTRON INTERNATIONAL CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE THE WARRANTS evidenced by this Warrant Certificate have been issued as of the 18th day of January, 2000, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. THIS CERTIFICATE evidences the right of L. David Sikes or his nominee ("Holder") to purchase, for the Exercise Price (as defined below), during the Exercise Term (as defined below), 667,000 shares of Common Stock (the "Shares") of Ramtron International Corporation, a Delaware corporation (the "Company"), subject to the terms and conditions hereinafter set forth. 1. Definitions. As used in this Certificate: (a) "Aggregate Exercise Price" shall mean with respect to any exercise under this Warrant Certificate the Exercise Price multiplied by the number of shares of Common Stock as to which the Warrant Certificate is exercised, as set forth in the Subscription Agreement. (b) "Date of Issuance" shall mean the date set forth in the preamble of this Warrant Certificate. (c) "Employment Agreement" shall mean that certain employment agreement entered into between Holder and Company dated as of January 18, 2000. (d) "Exercise Price" shall mean Six Dollars and 87.5 Cents ($6.875) per Share. (e) "Exercise Term" shall mean the five (5) year period commencing on the first date that the Warrants, or any portion thereof, vest and become exercisable pursuant to Section 2(a) of this Warrant Certificate and ending on the date that is five years from the date of such vesting; provided, however, that in the event of termination of Holder's employment with the Company for any reason prior to December 31, 2001, any vested and exercisable warrants shall be exercisable only for a period of 90 days following the effective date of termination. Page-152 (f) "Registrable Shares" shall mean all Shares that may not be resold pursuant to Rule 144 under the Act as of the date on which the Company notifies Holder, in accordance with Section 7(a) of this Warrant Certificate, of its intent to file a registration statement. (g) "Subscription Agreement" shall mean the Subscription Agreement attached hereto as Exhibit A. (h) "Warrants" shall mean the rights evidenced by this Warrant Certificate. 2. Exercise of Warrants. (a) Right to Exercise. These Warrants shall vest and become exercisable on December 31, 2002 if the Holder is employed by the Company at that date; provided, however, that, so long as Holder remains employed by the Company pursuant to the Employment Agreement, (i) all of the Warrants not previously vested shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (x) the Company or any subsidiary of the Company, or Company together with one or more of the Company's subsidiaries, sell securities in one or a series of transactions by either a public offering or private placement (including without limitation a placement or distribution of any subsidiary of the Company) for gross proceeds from such sales of at least Seventy Million Dollars ($70,000,000); or (y) a "change of control" (as hereinafter defined) of the Company occurs; or, (ii) if none of the circumstances described in (i) above has occurred, a portion of the Warrants, such portion to be determined as provided below, shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (x) if more than fifty percent (50%) of the shares of any subsidiary of the Company is sold or transferred, a percentage of the total number of Warrants equal to the percentage that the value of such subsidiary or portion of such subsidiary transferred or sold bears to the total value of the Company on the date of such sale or transfer shall vest and become exercisable; (y) if any shares of any subsidiary of the Company are distributed to the Company's stockholders, a percentage of the total number of Warrants equal to the percentage that the value of such distributed shares bears to the value of all of the outstanding shares of the Company including such subsidiary on the date of such distribution shall vest and become exercisable; and (z) if more than ten percent (10%) of the Company's assets, whether tangible or intangible, is sold or transferred, a percentage of the total number of Warrants equal to the percentage that the value of such assets bears to the total value of all of the Company's assets on the date of such sale or transfer shall vest and become exercisable. Valuations of the Company and its subsidiaries for purposes of the foregoing provisions shall be as reasonably determined by the Company's Board of Directors. For purposes of this Warrant Certificate, "change of control" means any of the following: (i) Any "person," as such term is defined in Section 3(a)(9) and used in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), who was not a beneficial owner (as defined in Rule 13(d)-3 under Page-153 the Exchange Act) on the date hereof, becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company's then outstanding securities; or (ii) the shareholders or Company approve (A) a merger of the Company with or into any other corporation of which the Company is not the surviving corporation or in which the Company survives as a subsidiary of another corporation, (B) a consolidation of the Company with any other corporation, or (C) the sale or disposition of all or substantially all of the Company's assets or a plan of complete liquidation. (b) Method of Exercise. The vested Warrants may be exercised by the Holder during the Exercise Term: (i) Cash Exercise. By the surrender of this Warrant Certificate at the principal office of the Company, along with the properly completed Subscription Agreement indicating the election of the Holder to effect a cash exercise, and the payment to the Company by certified or cashier's check of the Aggregate Exercise Price; or (ii) Cashless Exercise. By the surrender of this Warrant Certificate at the principal office of the Company, along with the properly completed Subscription Agreement indicating the election of the Holder to affect a cashless exercise pursuant to the provisions of this Section 2(b)(ii) ("Cashless Exercise"). Such surrender shall be deemed a waiver of the Holder's obligation to tender cash payment of the Aggregate Exercise Price. In the event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the Holder shall exchange its Warrants for that number of shares of Common Stock determined by multiplying the number of shares of Common Stock of Company to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference between the then current market price per share of the Common Stock and the Exercise Price, and the denominator of which shall be the then current market price per share of Common Stock. For purposes of any computation under this Section 2(b)(ii), the then current market price per share of Common Stock at any date shall be deemed to be the closing sale price of the Common Stock for the trading day preceding the date of the Cashless Exercise as reported by the Nasdaq Stock Market ("Nasdaq") or, if no reported sale takes place on such day, the representative closing bid price of the Common Stock for such day as reported by Nasdaq. (c) Issuance of Share Certificate and/or New Warrant Certificate. In the event of any exercise of the Warrants, certificates for the Shares so purchased shall be delivered to Holder within a reasonable time after the Warrants shall have been so exercised, and unless the Warrants have expired, a new certificate representing the right to purchase the number of Shares, if any, with respect to which this Warrant Certificate shall not then have been exercised shall also be issued to Holder within such time. All such new warrant certificates shall be dated the date hereof and shall be identical to this Warrant Certificate except as to the number of Shares issuable pursuant thereto. The Company shall pay all documentary, stamp or other transactional taxes (other than transfer taxes), if any, attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of the Warrants. Page-154 (d) Restrictions on Exercise. The Warrants may not be exercised if the issuance of the Shares upon such exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations. As a condition to the exercise of the Warrants, the Company may require Holder to make such representations and warranties to the Company as may be required by applicable law or regulation. 3. Stock Fully Paid; Reservation of Shares. The Company covenants and agrees that all Shares will, upon issuance and payment in accordance herewith, be fully paid, validly issued and nonassessable. The Company further covenants and agrees that during the Exercise Term the Company will at all times have authorized and reserved for the purpose of the issue upon exercise of the Warrants at least the maximum number of shares of the Company's Common Stock as are issuable upon the exercise of the Warrants. 4. Adjustment of Purchase Price and Number of Shares. The number and kind of securities purchasable upon the exercise of the Warrants and the Exercise Price shall be subject to adjustment from time to time upon the happening of certain events, as follows: (a) Consolidation, Merger or Reclassification. If the Company at any time while the Warrants remain outstanding and unexpired shall consolidate with or merge into any other corporation, or sell all or substantially all of its assets to another corporation, or reclassify or in any manner change the securities then purchasable upon the exercise of the Warrants (any of which shall constitute a "Reorganization"), then lawful and adequate provision shall be made whereby this Warrant Certificate shall thereafter evidence the right to purchase such number and kind of securities and other property as would have been issuable or distributable on account of such Reorganization upon or with respect to the securities which were purchasable under the Warrants immediately prior to the Reorganization. The Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Reorganization shall assume by written instrument executed and mailed or delivered to Holder, at the last address of Holder appearing on the books of the Company, the obligation to deliver to Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, Holder may be entitled to purchase. (b) Subdivision or Combination of Shares. If the Company at any time while the Warrants remain outstanding and unexpired shall subdivide or combine its Common Stock, the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to such subdivision or combination by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such subdivision or combination and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such subdivision or combination. Page-155 (c) Certain Dividends and Distributions. If the Company at any time while the Warrants are outstanding and unexpired shall take a record of the holders of its Common Stock for the purpose of: (i) Stock Dividends. Entitling them to receive a dividend payable in, or other distribution without consideration of, Common Stock, then the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to each dividend or distribution by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution; or (ii) Distribution of Assets, Securities, etc. Making any distribution without consideration with respect to its Common Stock (other than a cash dividend) payable otherwise than in its Common Stock, Holder shall, upon the exercise of the Warrants, be entitled to receive, in addition to the number of Shares receivable thereupon, and without payment of any additional consideration therefor, such assets or securities as would have been payable to him or her as owner of that number of Shares receivable by exercise of the Warrants had he or she been the holder of record of such Shares on the record date for such distribution, and an appropriate provision therefor shall be made a part of any such distribution. (d) Adjustment of Number of Shares. Upon each adjustment in the Exercise Price pursuant to Subsections (b) or (c) (i) of this Section 4, the number of Shares purchasable hereunder shall be adjusted to that number determined by multiplying the number of such Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price immediately prior to such adjustment and the denominator of which shall be the Exercise Price immediately following such adjustment. Any determination that the Company or the Board of Directors must make pursuant to subsections (a), (b) or (c) of this Section 4 shall be final and conclusive. (e) Notice. In case at any time: (i) The Company shall pay any dividend payable in stock upon its Common Stock or make any distribution, excluding a cash dividend, to the holders of its Common Stock; (ii) The Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; (iii) There shall be any reclassification of the Common Stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or Page-156 (iv) There shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give to Holder at least 10 days' prior written notice (or, in the event of notice pursuant to Section 4(e)(iii), at least 30 days' prior written notice) of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect to any such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up. Such notice in accordance with the foregoing clause shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto, and such notice in accordance with the foregoing clause shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Each such written notice shall be given by first-class mail, postage prepaid, addressed to Holder at the address of Holder as shown on the books of the Company. (f) No Change in Warrant Certificate. The form of this Warrant Certificate need not be changed because of any adjustment in the Exercise Price or in the number of Shares purchasable on its exercise. The Exercise Price or the number of Shares shall be considered to have been so changed as of the close of business on the date of adjustment. 5. Fractional Shares. No fractional Shares will be issued in connection with any subscription hereunder but, in lieu of such fractional Shares, the Company shall make a cash payment therefore upon the basis of the fair market value of the Shares. 6. Restrictions on Transfer. The Warrants are restricted from sale, transfer, assignment or hypothecation by operation of law. The Warrants have not been registered under the Act or any applicable state securities laws, and may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Act and under any applicable state securities law, or an opinion of counsel, satisfactory to the Company, that an exemption from such registration is available. By accepting this Warrant Certificate, the Holder acknowledges his or her understanding that because the Warrants are not registered, the Holder must hold the Warrants indefinitely unless they are registered under the Act and any applicable state securities laws or must obtain exemptions from registration. In addition, by accepting this Warrant Certificate, the Holder represents and warrants that the Holder is acquiring the Warrants for his or her own account for investment and not with the view to distribution, assignment, resale or other transfer of the Warrants. Except as specifically stated herein, no other person has a direct or indirect beneficial interest in the Warrants. Page-157 7. Registration Under Securities Act of 1933. (a) Piggyback Registration Rights. The Company agrees that if, at any time and from time to time while the Holder holds the Warrants or any Registrable Shares, the Board of Directors of the Company shall authorize the filing of a registration statement under the Act (other than a registration statement on Form S-8, Form S-4 or any other form which does not include substantially the same information as would be required in a form for the general registration of securities such as the Shares purchasable hereunder), in connection with the proposed offer of any of its securities by it or any of its shareholders, the Company will (i) notify the Holder of the Warrants and/or the Registrable Shares that such registration statement will be filed and that the Registrable Shares which are then held, and/or may be acquired upon exercise of the Warrants by the Holder, will be included in such registration statement at the Holder's written request, (ii) cause such registration statement to cover all of such Registrable Shares which it has been so requested to include, and (iii) take all other action that the Company and its counsel deem necessary under any Federal or state law or regulation of any governmental authority to permit all such Registrable Shares which it has been so requested to include in such registration statement to be sold or otherwise disposed of, and will maintain such compliance with each such Federal and state law and regulation of any governmental authority for the period, not in excess of six months, necessary for the Holder to effect the proposed sale or other disposition; provided, however, that the Company shall have no obligation under this Section 7 to the extent that, with respect to a registration statement filed in connection with a public offering or private placement, the managing underwriter of such offering, or placement agent for such placement, determines that the Registrable Shares requested to be registered under this Section 7, or a portion thereof, should be excluded from such registration statement. (b) Prospectus Delivery and Qualification in Colorado. Whenever the Company is required pursuant to the provisions of this Section 7 to include in a registration statement Registrable Shares held by Holder, the Company shall (i) furnish the Holder of any such Registrable Shares with copies of the prospectus conforming to the Act in order to facilitate the sale or distribution of such Registrable Shares, (ii) use its best efforts to register or qualify such Registrable Shares under the blue sky laws (to the extent applicable) of the State of Colorado, and (iii) take such other actions that the Company and its counsel deem necessary to consummate the sale or distribution of such Registrable Shares in the State of Colorado. (c) Expenses. The Company shall pay all expenses incurred in connection with any registration statement or other action pursuant to the provisions of this Section 7, other than underwriting discounts and commissions, compliance with the blue-sky laws of any state other than Colorado, applicable transfer taxes, and fees and expenses of counsel to the Holder. Page-158 8. No Rights as Shareholder. Holder, as holder of the Warrants, shall not be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant Certificate be construed to confer on Holder, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 9. Notices. All demands, notices, consents and other communications to be given hereunder shall be in writing and shall be deemed duly given when delivered personally or five days after being mailed by first class mail, postage prepaid, properly addressed, if to the Company at Ramtron International Corporation, 1850 Ramtron Drive, Colorado Springs Colorado 80921, or if to Holder at the last address appearing on the records of the Company. The Company and Holder may change such address at any time or times by notice hereunder to the other. 10. Amendments; Waivers, Terminations, Governing Law; Headings. The Warrants and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. The Warrants shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware. The headings in this Warrant Certificate are for convenience of reference only and are not part of the Warrants. Dated as of January 18, 2000. RAMTRON INTERNATIONAL CORPORATION By: /S/ Greg B. Jones ---------------------- Name: Greg B. Jones Title: President and COO Attest: /S/ Kathy Bouard - ------------------------- RECEIPT ACKNOWLEDGED BY HOLDER: /S/ L. David Sikes - ------------------------- L. David Sikes Address: 69 Marland Place Colorado Springs, Colorado 80906 Page-159 EXHIBIT A RAMTRON INTERNATIONAL CORPORATION 1850 Ramtron Drive Colorado Springs, Colorado 80921 Subscription Agreement for the Exercise of Warrants (To be completed and signed only upon exercise of the Warrants) The undersigned, the holder and registered owner of the attached Warrants, hereby irrevocably and unconditionally elects to exercise such Warrants and subscribes for the purchase of ---------* shares of Ramtron International Corporation (the "Company") common stock (the "Common Stock") pursuant to and in accordance with the terms and conditions of the Warrant Certificate attached hereto, and (1) elects to effect a cash exercise and herewith tenders a check in the amount of $-----------, or (2) by initialing the space that follows ----------, elects to effect a Cashless Exercise and herewith tenders the requisite number of Warrants pursuant to the Cashless Exercise provisions of the Warrants in Section 2(b)(ii) of the attached Warrant Certificate in exchange for the Common Stock which should be delivered to the undersigned at the address stated below, and, if said number of shares of Common Stock shall not be all of the Common Stock purchasable hereunder, a new Warrant of like tenor for the balance of the remaining Common Stock purchasable hereunder should be delivered to the undersigned at the address stated below. The undersigned agrees that: (1) the undersigned will not offer, sell, transfer or otherwise dispose of any of the Common Stock unless either (a) a registration statement, or post- effective amendment thereto, covering the Common Stock has been filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Act"), such sale, transfer or other disposition is accompanied by a prospectus meeting the requirements of Section 10 of the Act forming a part of such registration statement, or post-effective amendment thereto, which is in effect under the Act covering the Common Stock to be so sold, transferred or otherwise disposed of, and all applicable state securities laws have been complied with, or (b) the undersigned has delivered to the Company a written opinion of counsel, addressed to the Company, which opinion is reasonably acceptable to the Company and its counsel, that such proposed offer, sale, transfer or other disposition of the Common Stock is exempt from the provisions of Section 5 of the Act in view of the circumstances of such proposed offer, sale, transfer or other disposition; (2) the Company may notify the transfer agent for Common Stock that the certificates for the Common Stock acquired by the undersigned are not to be transferred unless the transfer agent receives advice from the Company that one or both of the conditions referred to in (1)(a) and (1)(b) above have been satisfied; and Page-160 (3) the Company may affix the following legend to the certificates for the Common Stock hereby subscribed for, if such legend is applicable: THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY NOT BE OFFERED AND SOLD UNLESS REGISTERED AND/OR QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE. THEREFORE, NO SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE OR BLUE SKY LAWS, OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION, QUALIFICATION OR APPROVAL IS NOT REQUIRED. Dated: --------------- Signed: ---------------------------- Name: L. David Sikes Address: --------------------------- --------------------------- Page-161 EX-10.29 6 EMPLOYMENT AGREEMENT August 25, 1999 Mr. Donald G. Carrigan 425 Scrub Oak Circle Monument, Colorado 80132 Dear Mr. Carrigan: This letter agreement ("Agreement") sets forth our agreement as it pertains to your salary commitment from Ramtron International Corporation ("Ramtron"). 1. Term. The term of this commitment shall begin on September 1, 1999 and shall continue until December 31, 2000, unless sooner terminated as provided in paragraph 2 below. 2. Termination. Should you voluntarily terminate your employment or should your employment be terminated for cause, Ramtron shall be relieved of all of its obligations provided herein including, but not limited to, its obligation to pay you the salary provided in paragraph 3 below. Termination for cause shall include chronic absenteeism (not due to physical or mental illness, not constituting permanent disability, habitual alcoholism, drug abuse or addiction); the commission of a felony or fraud on Ramtron, its employees, customers, stockholders, or vendors; misappropriation of any money or other assets or properties of Ramtron, its employees, customers, stockholders or vendors; violation of reasonable, specific and lawful directions received from Ramtron's Board of Directors and/or CEO, in connection with and pertaining to your duties Vice President and General Manager of FRAM Product Division; or the unauthorized disclosure or use of any Ramtron trade secrets or financial information or data which results, or is likely to result, in injury or damage to Ramtron. Upon termination of this Agreement, you shall be paid your regular salary up to the termination date less applicable income tax withholdings, or any off set for lawful charges or indebtedness which may be owed by you to Ramtron or both. If Ramtron terminates your employment for any reason other than cause during the term of this Agreement, then Ramtron shall be obligated to continue to pay you the salary provided in paragraph 3 below until such term expires. IT IS EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH RAMTRON IS AN EMPLOYMENT "AT WILL" SITUATION. 3. Salary. The salary to be paid by Ramtron to you shall be ONE HUNDRED FIFTY-TWO THOUSAND NINETY-TWO DOLLARS ($152,092.00) per year, which amount shall be paid in equal installments on or about the 15th and 30th of each month. All such payments shall be subject to withholding and other applicable taxes. For purposes of paragraph 2, salary is defined as $12,674.33 per month. Page-162 4. Ownership of Documents, Patents and Copyrights. Any documents, inventions or copyrightable material that you may prepare while employed by Ramtron shall be subject to the non-disclosure and assignment requirements provided in the Invention and Non-Disclosure Agreement between you and Ramtron dated November 27, 1989. The termination or expiration of this Agreement shall have no effect on your duties and obligations as provided in said Invention and Non-Disclosure Agreement. 5. Arbitration. Should any dispute arise under this Agreement or out of its termination or cancellation, the matter shall be submitted to and decided by arbitration. The arbitration shall be held at a mutually agreeable location within the State of Colorado and shall be held in accordance with the terms and conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13-22-201. 6. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 7. Severability. In case any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby. 8. Assignability and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon your successors, assigns and legal representatives and the successors and assigns of Ramtron. Except as set forth in paragraph 9 below, neither party may assign, transfer, pledge, encumber or otherwise dispose of this Agreement or any rights or obligations hereunder, and any such attempt at delegation or disposition shall be null and void and without effect. 9. Complete Agreement; Modification; Waiver. This Agreement constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof. This Agreement shall not be altered, modified or amended except by written instruments signed by each of the parties hereto. Waivers of any provision contained herein or any default hereunder shall only be effective if in writing and signed by the party to be charged therewith. Any written waiver shall not operate or be construed as a waiver of any or other subsequent breach or default by any party. Please indicate your agreement to the foregoing by signing below. Sincerely, /S/ L. David Sikes L. David Sikes Chairman and CEO LDS/klb This Agreement is hereby agreed to and accepted, effective as of September 1, 1999. /S/ Donald G. Carrigan - ----------------------- Donald G. Carrigan Date September 1, 1999 Page-163 EX-10.30* 7 SECOND AMENDMENT * Confidential treatment has been granted or requested with respect to portions of this exhibit, and such confidential portions have been deleted and separately filed with the Securities and Exchange Commission pursuant to Rule 24b-2 or Rule 406. SECOND AMENDMENT TO FRAM TECHNOLOGY LICENSE AGREEMENT THIS SECOND AMENDMENT TO FRAM TECHNOLOGY LICENSE AGREEMENT (the "Amendment") is entered into as of the 20th day of September, 1999, by and between RAMTRON INTERNATIONAL CORPORATION ("Ramtron"), a Delaware corporation having its principal office at 1850 Ramtron Drive, Colorado Springs, Colorado 80921, USA, and FUJITSU LIMITED ("Fujitsu"), a Japanese corporation having its registered office at 1-1, Kamikodanaka 4-chome, Nakahara-ku, Kawaski-shi, Kanagawa-ken 211-8588, Japan. R E C I T A L S: A. Ramtron and Fujitsu entered into that certain FRAM Technology License Agreement executed by Ramtron on December 6, 1995 and by Fujitsu on December 19, 1995, as amended by that certain Amendment to Agreement entered into between the parties as of August 30, 1996 (as amended the "Agreement"), pursuant to which Ramtron licensed to Fujitsu certain of its proprietary ferroelectric technology for the design, development, manufacture and sale of products based upon such ferroelectric technology. B. Ramtron and Fujitsu wish to expand the scope of the Agreement to include use of the Licensed Technology in applications involving radio frequency identification devices, as more fully described herein. NOW, THEREFORE, Ramtron and Fujitsu agree as follows: 1. Definitions. Defined terms herein shall have the meanings ascribed to such terms in the Agreement, unless otherwise provided herein. 2. Amendments. The Agreement shall be, and is hereby, amended in the following respects: a) Section 1.6 (definition of "FRAM Products") is hereby amended and restated in its entirety to read as follows: "FRAM Products" means standard, non-volatile ferroelectric semi- conductor memory devices, including, specifically, devices with only memory array and associated memory array control logic. Page-164 b) Section 1.8 (definition of "Excluded FRAM Technology") is hereby amended and restated in its entirety to read as follows: "Excluded FRAM Technology" shall mean ** . c) Section 4.1.1 (Grant of License) is hereby amended by deleting the last sentence of the paragraph added to Section 4.1.1 by the Amendment to Agreement dated August 30, 1996, and replacing it with the following sentence: Subject to the terms and conditions set forth herein, Ramtron hereby grants to Fujitsu a royalty-bearing, non-exclusive, non-transferable, worldwide, perpetual license to use the Ramtron Technology, Ramtron Intellectual Property Rights and/or Ramtron's Improvements to design, develop, manufacture, make, sell, use, lease, transfer and otherwise dispose of Ferroelectric RF/ID Products, RF/ID IC cards and RF/ID IC card systems and their components. d) Section 5.1.1 (Lump Sum Payment) is hereby amended to include the following new subparagraph (g): (g) Prepaid RF/ID Royalties. On or before September 30, 1999, Fujitsu shall pay Ramtron the amount of ** which payment shall be a prepayment of certain of the royalties owed by Fujitsu pursuant to Section 5.2.5 below. Accordingly, Fujitsu shall be entitled to a credit against the first ** in royalties otherwise due to Ramtron pursuant to Section 5.2.5 hereof. At such time as the royalties otherwise due to Ramtron pursuant to Section 5.2.5 hereof equals ** Fujitsu shall commence payment of such royalties to Ramtron in accordance with this Agreement. e) Section 5.2 (Royalty Payments) shall be amended to include the following new subsection: 5.2.5 Fujitsu shall pay Ramtron a royalty on all Ferroelectric RF/ID Products based upon and/or which use the FRAM Technology, Ramtron IPR, and/or Ramtron's Improvements made thereto and sold by Fujitsu for ** upon the first sale by Fujitsu of Ferroelectric RF/ID Products in an amount equal to ** . For purposes of the preceding sentence, the FRAM memory area consists of the FRAM memory array and associated control logic, and the die area excludes the bond pads. Subject to Section 5.1.1(g) above, the obligation of Fujitsu to pay royalties to Ramtron under this Section 5.2.5 shall commence upon first sale by Fujitsu of Ferroelectric RF/ID Products. Section 5.2 (Royalty Payments) shall be further amended such that the second to the last sentence thereof is amended and restated in its entirety to read as follows: "All FRAM Products, Embedded FRAM Products and/or Ferroelectric RF/ID Products manufactured and/or sold by Fujitsu ** . Page-165 f) Section 6.1 (OEM/Foundry Agreement) is hereby amended by modifying the paragraph added to Section 6.1 by the Amendment to Agreement dated August 30, 1996 such that each reference therein to "Embedded FRAM Products" shall be amended to read "Embedded FRAM Products and/or Ferroelectric RF/ID Products," and the reference therein to " ** Ramtron designs" shall be amended to read " ** Ramtron designs." g) Section 6.2 (Sales Price to Ramtron) is hereby amended by modifying the paragraph added to Section 6.2 by the Amendment to Agreement dated August 30, 1996 such that each reference therein to "Embedded FRAM Products" shall be amended to read "Embedded FRAM Products and/or Ferroelectric RF/ID Products." h) Sections 1.13 (definition of "Net Sales"), 4.1.2, 5.3 (Payment and Certification of Royalties by Fujitsu) and 10.10 are hereby amended such that each reference therein to "FRAM Products" shall be amended to read "FRAM Products, Embedded FRAM Products and/or Ferroelectric RF/ID Products." i) Sections 10.7, 10.8 and 10.9, as amended by the Amendment to Agreement dated August 30, 1996, are hereby amended such that each reference therein to "FRAM Products and/or Embedded FRAM Products" shall be amended to read "FRAM Products, Embedded FRAM Products and/or Ferroelectric RF/ID Products." 3. No Other Changes. Except as expressly stated above, this Amendment does not otherwise amend the Agreement, and the Agreement shall remain in full force and effect, as amended hereby. EXECUTED as of the day and year first written above. FUJITSU LIMITED By: /S/ Toshihiko Ono ------------------- Toshihiko Ono Group Senior Vice President Semiconductor Group RAMTRON INTERNATIONAL CORPORATION By: /S/ Greg B. Jones ------------------- Greg B. Jones President and COO Page-166 EX-10.31 8 AMENDMENT NO. 2 TO 1995 STOCK OPTION PLAN AMENDMENT NO. 2 TO RAMTRON INTERNATIONAL CORPORATION 1995 STOCK OPTION PLAN Ramtron International Corporation's 1995 Stock Option Plan (the "Plan") shall be amended as follows: The text of Section 3 of the Plan, entitled "Shares Reserved," is hereby amended to state the following: "The maximum aggregate number of Shares reserved for issuance pursuant to the Plan shall be 1,800,000 Shares or the number of shares of stock to which such Shares shall be adjusted as provided in Section 10 of the Plan . . . " The text of Section 6(b) of the Plan, entitled "Terms and Conditions of Options - Number of Shares," is hereby amended to state the following: " . . . The maximum number of Shares, which may be awarded as Options under the Plan during any calendar year to any Optionee is 300,000 Shares. . . ." Dated: December 22, 1999 Page-167 EX-10.32 9 1999 STOCK OPTION PLAN RAMTRON INTERNATIONAL CORPORATION 1999 STOCK OPTION PLAN 1. Establishment and Purpose of the Plan. Ramtron International Corporation hereby establishes this 1999 Stock Option Plan to promote the interests of the Company and its stockholders by (i) helping to attract and retain the services of employees of the Company who are in a position to make a material contribution to the successful operation of the Company's business, (ii) motivating such persons, by means of performance-related incentives, to achieve the Company's business goals and (iii) enabling such persons to participate in the long-term growth and financial success of the Company by providing them with an opportunity to purchase stock of the Company. 2. Definitions. The following definitions shall apply throughout the Plan: a. "Affiliate" shall mean any entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Company. b. "Board of Directors" shall mean the Board of Directors of the Company. c. "Code" shall mean the Internal Revenue Code of 1986, as amended. References in the Plan to any section of the Code shall be deemed to include any amendment or successor provisions to such section and any regulations issued under such section. d. "Company" shall mean Ramtron International Corporation, a Delaware corporation (or any successor corporation), any "subsidiary" corporation, whether now or hereafter existing as defined in Section 424(f) and (g) of the Code, and any "parent" corporation, whether now or hereafter existing, as defined in Sections 424(e) and (g) of the Code. e. "Continuous Employment" shall mean the absence of any interruption or termination of employment by the Company. Continuous Employment shall not be considered interrupted in the case of sick leave, military leave, or any other leave of absence approved by the Board of Directors or in the case of transfers between locations of the Company. Page-168 f. "Disability" shall mean the inability of the Optionee to engage in any substantial gainful activity be reason of any medically determinable physical or mental impairment which can be expected to result in death or has lasted or can be expected to last for a continuous period of not less than 12 months. In determining the Disability of the Optionee, the Board of Directors may require the Optionee to furnish proof of the existence of the Disability and may select a physician to examine the Optionee. The final determination as to the Disability of the Optionee shall be made by the Board of Directors. g. "Employee" shall mean any employee of the Company who is not an officer or director of the Company. h. "Fair Market Value" shall mean, with respect to Shares, the fair market value per Share on the date that an option is granted as determined by the Board of Directors in its sole discretion, exercised in good faith; provided, however, that where there is a public market for the Shares, the fair market value per Share shall be the closing price of the Shares on all securities exchanges on which the Shares may be listed, as of the date of grant, as reported in the Wall Street Journal, or if the Shares are not so listed on the date of grant, then the closing price quoted in the National Association of Securities Dealers Automated Quotation (Nasdaq) System as of 4:00 P.M., New York time, or, if the Shares are not quoted on the Nasdaq System, then the closing price of the Shares on the date of grant in the domestic over-the-counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization; provided that, if the grant date is not a trading day, such determination will be made as of the immediately preceding trading day. i. "Option" shall mean the grant of the right to an Employee pursuant to the Plan to purchase a specified number of Shares at a specified exercise price. All Options granted under the Plan shall be non-qualified stock options that are not intended to meet the requirements of "incentive stock options" within the meaning of Section 422 of the Code. j. "Optioned Stock" shall mean the Shares subject to an Option. k. "Optionee" shall mean an Employee who is granted an Option under the Plan. l. "Plan" shall mean this Ramtron International Corporation 1999 Stock Option Plan as amended from time to time. m. "Shares" shall mean shares of the common stock of the Company, par value per share of $0.01, or any shares into which such Shares may be converted in accordance with Section 9 of the Plan. Page-169 n. "Termination for Cause" shall mean termination of employment as a result of (i) any act or acts by the Optionee constituting a felony under any federal, state or local law; (ii) the Optinee's willful and continued failure to perform the duties assigned to him or her as an Employee; (iii) any material breach by the Optionee of any agreement with the Company concerning his or her employment or other understanding concerning the terms and conditions of employment by the Company; (iv) dishonesty, gross negligence or malfeasance by the Optionee in the performance of his or her duties as an Employee or any conduct by the Optionee which involves a material conflict of interest with any business of the Company; or (v) the Optinee's taking or knowingly omitting to take any other action or actions in the performance of Optionee's duties as an Employee without informing appropriate members of management to whom such Optionee reports, which action or actions, in the detemination of the Board of Directors , have caused or substantially contributed to the material deterioration in the business of the Company. 3. Shares Reserved. The maximum aggregate number of Shares reserved for issuance pursuant to the Plan shall be 700,000 Shares or the number of shares of stock to which such Shares shall be adjusted as provided in Section 9 of the Plan. Such number of Shares may be set aside out of authorized but unissued Shares not reserved for any other purpose, or out of issued Shares acquired for and held in the treasury of the Company from time to time. Shares subject to, but not sold or issued under, any Option terminating, expiring or canceled for any reason prior to its exercise in full, shall again be available for Options thereafter granted under the Plan, and the same shall not be deemed an increase in the number of Shares reserved for issuance under the Plan. Any Shares which may be tendered, actually or by attestation, by an Optionee as full or partial payment in connection with the exercise of any Option under the Plan shall again be available for Options thereafter granted during the remainder of the Plan. 4. Administration of the Plan. a. Unless otherwise determined by the Board of Directors, as evidenced by a resolution duly adopted by the Board of Directors, the Plan shall be administered by the Board of Directors. b. Subject to the provisions of the Plan, the Board of Directors shall have the authority, in its discretion: (i) to determine, upon review of relevant information, the Fair Market Value per Share; (ii) to determine the exercise price of the Options to be granted to Employees, in accordance with Section 6(d) of the Plan; (iii) to determine the Employees to whom, and the time or times at which, Options shall be granted and the number of Shares subject to each Option; (iv) to prescribe, amend and rescind rules and regulations relating to the Plan Page-170 subject to the limitations set forth in Section 10 of the Plan; (v) to determine the terms and provisions of each Option granted under the Plan (which need not be identical with the terms of other Options) and, with the consent of the holder thereof, modify or amend an outstanding Option; (vi) to accelerate the exercise date of any Option; (vii) to determine whether any Optionee will be required to execute a stock purchase agreement or other agreement as a condition to the exercise of an Option, and to determine the terms and provisions of any such agreement (which need not be identical with the terms of any other such agreement) and to amend any such agreement; (viii) to interpret the Plan or any agreement entered into with respect to the grant or exercise of Options and to determine the eligibility of an Employee for benefits hereunder and the amount thereof; (ix) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Option previously granted or to take such other actions as may be necessary or appropriate with respect to the Company's rights pursuant to Options or agreements relating to the grant or exercise thereof; (x) to cancel any outstanding Options and grant to an Optionee in replacement thereof such number of Options on such terms and conditions as the Board of Directors shall determine; and (xi) to make such other determinations and establish such other procedures as it deems necessary or advisable for the administration of the Plan. c. All decisions, determinations and interpretations of the Board of Directors shall be final and binding on all Optionees and any other holders of any Options granted under the Plan. d. The Board of Directors shall keep minutes of its meetings and of the actions taken by it without a meeting. A majority of the Board of Directors shall constitute a quorum, and the actions of a majority at a meeting, including a telephone meeting, at which a quorum is present, or acts approved in writing by a majority of the members of the Board of Directors without a meeting, shall constitute acts of the Board of Directors. e. The Company shall pay all original issue and transfer taxes with respect to the grant of Options and/or the issue and transfer of Shares pursuant to the exercise thereof, and all other fees and expenses necessarily incurred by the Company in connection therewith; provided, however, that the person exercising an Option shall be responsible for all payroll, withholding, income and other taxes incurred by such person on the date of exercise of an Option or transfer of Shares. 5. Eligibility. Options may be granted only to Employees, as defined under Section 2 of the Plan; accordingly, officers and directors of the Company are specifically excluded from participation in the Plan. An Employee who has been granted an Option may be granted, if he or she is otherwise eligible, additional Options. In the event that an employee to whom an Option is granted under the Plan shall, subsequent to the date of the Option grant, become an officer or director of the Company, such employee shall cease to be eligible to participate in the Plan with respect to any further Option grants; provided, however, that Options granted to such employee under the Plan prior to his or her becoming an officer or director shall not be affected thereby. Page-171 6. Terms and Conditions of Option. Options granted pursuant to the Plan by the Board of Directors shall be evidenced by an Option Agreement providing, in addition to such other terms as the Board of Directors may deem advisable, the following terms and conditions: a. Time of Granting Options. The date of grant of an Option shall be, for all purposes, the date on which the Board of Directors makes the determination granting such Option; provided, however, that if the Board of Directors determines that such grant shall be effective as of some future date, the date of grant shall be as of such future date. Notice of the determination shall be given to each Optionee within a reasonable time after the date of such grant. b. Number of Shares. Each Option Agreement shall state the number of Shares to which it pertains. c. Vesting. Options granted under the Plan shall vest as determined by the Board of Directors, in its sole and absolute discretion, from time to time, which may include installment or performance vesting or other contingent vesting provisions. d. Exercise Price. The exercise price per Share for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Board of Directors as of the date of grant; provided, however, that such price shall in no event be less than 95% of the Fair Market Value on the date of grant. e. Medium and Time of Payment. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Board of Directors on the date of grant and may consist entirely of (1) cash, check or full recourse promissory notes or (2) Shares having a Fair Market Value on the date of surrender (either actually or by attestation) equal to the aggregate exercise price of the Shares to which said Option shall be exercised, or any combination of such methods of payment, or such other consideration and method of payment for the issuance of Shares permitted under any laws to which the Company is subject which is approved by the Board of Directors in its discretion; provided, however that the Optionee shall be required to pay in cash an amount necessary to satisfy the Company's tax withholding obligations. Payment of the exercise price specified in the Option may also be made in accordance with procedures for a "cashless exercise" (including the delivery of an irrevocable notice of exercise) as the same may be established from time to time by the Company to facilitate exercises of Options and sales of Shares under this Plan. Page-172 If the consideration for the exercise of an Option is a promissory note, it shall be a full recourse promissory note executed by the Optionee, bearing interest at a test rate which shall be sufficient to preclude the imputation of interest under the applicable provisions of the Code. Until such time as the promissory note has been paid in full, the Company may retain the Shares purchased upon exercise of the Option in escrow as security as security for payment of the promissory note. If the consideration for the exercise of an Option is the actual surrender of previously acquired and owned Shares, the Optionee will be required to make representations and warranties satisfactory to the Company regarding his or her title to the Shares used to effect the purchase, including without limitation representations and warranties that the Optionee has good and marketable title to such Shares free and clear of any and all liens, encumbrances, charges, equities, claims, security interests, options or restrictions, and has full power to deliver such Shares without obtaining the consent or approval of any person or government authority other than those which have already given consent or approval in a manner satisfactory to the Company. The value of the Shares used to effect the purchase shall be the Fair Market Value of such Shares on the date of exercise as determined by the Board of Directors in its sole discretion exercised in good faith. f. Term of Options. The term of an Option may be up to ten years plus one day from the date of grant thereof. The term of any Option may be less than the maximum term provided for herein as specified by the Board of Directors upon grant of the Option and as set forth herein. 7. Exercise of Option. a. In General. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Board of Directors and as shall be permissible under the Plan, including any performance or other criteria with respect to the Company and/or the Optionee, as may be determined by the Board of Directors. An Option may be exercised in accordance with the provisions of the Plan as to all or any portion of the Shares then exercisable under an Option from time to time during the term of the Option. However, an Option may not be exercised for a fraction of a Share. b. Procedure. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company at its principal business office in accordance with the terms of the Option Agreement by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company, accompanied by any other agreements required by the terms of the Plan and/or Option Agreement or as required by the Board of Directors and payment by the Optionee of all payroll, withholding or income taxes incurred in connection with such Option exercise (or evidence that arrangements for the collection or payment of such tax satisfactory to the Committee have been made). Full payment may consist of such consideration and method of payment allowable under Section 6(e) of the Plan. Page-173 c. Decrease in Available Shares. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised, except if the Option is exercised by tendering Shares, either actually or by attestation. d. Exercise of Stockholder Rights. Until the Option is properly exercised in accordance with the terms of this Section 7, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Option is exercised, except as provided in Section 10 of the Plan. e. Termination of Continuous Employment. If an Employee's Continuous Employment with the Company terminates for any reason other than death, Disability or Termination for Cause, he or she may exercise his or her Option to the extent the Option was exercisable as of the date of such termination, but only within 90 days following the date of such termination (subject to any earlier termination of the Option as provided by its terms). The Board of Directors, at any time, may extend beyond 90 days the period of time during which an Optionee may exercise his or her Option following the date on which his or her Continuous Employment with the Company terminates for any reason other than death, Disability or Termination for Cause. Notwithstanding the forgoing, an Option shall not be exercisable after the expiration of the term of such Option, as set forth in the Option Agreement, and, unless otherwise amended by the Board of Directors, an Option may be exercised only to the extent the Optionee was entitled to exercise it on the date his or her Continuous Employment with the Company terminated. To the extent the Optionee does not exercise his or her Option, to the extent exercisable, within the time specified herein, the Option shall terminate. f. Death or Disability of Optionee. If an Optionee's Continuous Employment with the Company terminates due to death or Disability of the Optionee, the Option may be exercised, in the case of death, by the Optionee's estate or be a person who acquired the right to exercise the Option be bequest or inheritance, or, in the case of Disability, by the Optionee, within one year following the date of such termination (subject to any earlier termination of the Option as provided by its terms). Notwithstanding the forgoing, an Option shall not be exercisable after the expiration of the term of such Option, as set forth in the Option Agreement, and, unless otherwise amended by the Board of Directors, an Option may be exercised only to the extent the Optionee was entitled to exercise it on the date his or her Continuous Employment with the Company terminated. To the extent the Optionee does not exercise his or her Option, to the extent exercisable, within the time specified herein, the Option shall terminate. Page-174 g. Termination for Cause. If an Optionee's Continuous Employment with the Company terminates due his or her Termination for Cause, he or she may exercise his or her Option to the extent the Option was exercisable as of the date of such termination, but only within 30 days following the date of such Termination for Cause (subject to any earlier termination of the Option as provided by its terms). Notwithstanding the forgoing, an Option shall not be exercisable after the expiration of the term of such Option, as set forth in the Option Agreement, and, unless otherwise amended by the Board of Directors, an Option may be exercised only to the extent the Optionee was entitled to exercise it on the date his or her Continuous Employment with the Company terminated. To the extent the Optionee does not exercise his or her Option, to the extent exercisable, within the time specified herein, the Option shall terminate. h. Expiration of Option. Notwithstanding any provision in the Plan, including but not limited to the provisions set forth in Section 7(e) and 7(f), an Option may not be exercised, under any circumstances, after the expiration of its term. i. Conditions on Exercise and Issuance. As soon as practicable after any proper exercise of an Option in accordance with the provisions of the Plan, the Company shall deliver to the Optionee at the principal executive office of the Company or such other place as shall be mutually agreed upon between the Company and the Optionee, a certificate or certificates representing the Shares for which the Option shall have been exercised. The time of issuance and delivery of the certificate or certificates representing the Shares for which the Option shall have been exercised may be postponed by the Company for such period as may be required by the Company, with reasonable diligence, to comply with any law or regulation applicable to the issuance or delivery of such Shares. Options granted under the Plan are conditioned upon the Company obtaining any required permit or order from appropriate governmental agencies, authorizing the Company to issue such Options and Shares issuable upon exercise thereof. Shares shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, applicable state law, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and may be further subject to the approval of counsel for the Company with respect to such compliance. Page-175 j. Withholding or Deduction for Taxes. If, at any time, the Company, any Parent or Subsidiary is required, under applicable laws and regulations, to withhold, or to make any deduction for, any taxes or take any other action in connection with any Option exercise made hereunder or transfer of Shares, the Company, such Parent or Subsidiary shall have the right to deduct from all amounts paid in cash any taxes required by law to be withheld there from, and, in the case of Shares, the Optionee or his or her estate or beneficiary shall be required to pay to the Company, such Parent or Subsidiary the amount of taxes required to be withheld, or, in lieu thereof, the Company, such Parent or Subsidiary shall have the right to retain, or sell without notice, a sufficient number of Shares to cover the amount required to be withheld, or to make other arrangements with respect to withholding as it shall deem appropriate. The Board of Directors may, in its discretion, permit an Optionee to elect, subject to such conditions as the Board of Directors shall impose to deliver to the Company previously acquired Shares having a fair market value sufficient to satisfy all or part of the Optionee's estimated total tax obligation associated with the transaction. 8. Nontransferability of Options. Options granted under the Plan may not be sold, pledged, assigned, hypotheticated, gifted, transferred, or disposed of in any manner, voluntarily or involuntarily by operation of law, other than by will or by the laws of descent or distribution or transfers between spouses incident to a divorce, and any such attempt may result, at the discretion of the Board of Directors, in the termination of such Options. During the lifetime of the Optionee, his or her Option may be exercised only by the Optionee or his or her legal guardian. 9. Adjustments Upon Change in Corporate Structure. a. Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding Option, and the number of Shares which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the exercise or purchase price per Share covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split or combination, the payment of a stock dividend, recapitalization, merger, consolidation, exchange, spin-off, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company (other than stock awards to Employees), as may be necessary to prevent dilution or enlargement of rights; provided, however, that the conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration. Any such adjustment shall be made by the Board of Directors, in its sole discretion, whose determination in that respect shall be final, binding and conclusive. The existence of the Plan and outstanding Options shall not limit or affect in any way the right or power of the company to engage in any such transactions. Page-176 b. In the event of the proposed dissolution or liquidation of the Company, or in the event of a proposed sale of all or substantially all of the assets or stock of the Company (other than in the ordinary course of business), or the merger or consolidation of the company with or into another corporation, as a result of which the Company is not the surviving and controlling corporation or as a result of which the outstanding Shares are exchanged or converted into cash or property or securities not of the company, the Board of Directors shall (i) make provision for the assumption of all outstanding Options by the successor corporation or (ii) declare that any Option shall terminate as of a date fixed by the Board of Directors which is at least 30 days after the notice thereof to the Optionee, unless such 30-day period is waived by the Optionee, and shall give each Optionee the right to exercise the Option as to all or any part of the Optioned Stock, including Shares covered by the Option as to which the Option would not otherwise be exercisable, provided such exercise does not violate Section 7(e) of the Plan. In the event the Company elects to comply with Section 9(b)(i) and the Optionee's Continuous Employment is subsequently terminated (other than by a voluntary termination by the Optionee of Termination for Cause) prior to the time such Optionee's Options are fully vested, such Optionee's Options shall be fully and immediately vested and such Optionee shall have the right to exercise his or her Options as to all or any part of the Optioned Stock including Shares as to which the Options would not otherwise be exercisable, provided such exercise does not violate Section 7(e) of the Plan. c. No fractional Shares shall be issuable on account of any action aforesaid, and the aggregate number of shares into which Shares then covered by the Option, when changed as the result of such action, shall be reduced to the largest number of whole shares resulting from such action, unless the Board of Directors, in its sole discretion, shall determine to issue scrip certificates in respect to any fractional shares, which scrip certificates, in such event shall be in a form and have such terms and conditions as the Board of Directors in its discretion shall prescribe. 10. Amendment and Termination of the Plan. a. Amendment and Termination. The Board of Directors may amend or terminate the Plan from time to time in such respects as the Board of Directors may deem advisable. b. Effect of Amendment or Termination. Except as otherwise provided in Section 9 of the Plan, any amendment or termination of the Plan shall not affect Options already granted and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Company, which agreement must be in writing and signed by the Optionee and the Company. Page-177 11. Indemnification. No member of the Board of Directors shall be liable for any act or action taken, whether of commission or omission, except in circumstances involving actual bad faith, or for any act or action taken, whether of commission or omission, by any other member or by any officer, agent, or employee. In addition to such other rights of indemnification, as they may have as members of the Board of Directors, the Board of Directors shall be indemnified by the Company against the reasonable expenses, including attorneys' fees actually and necessarily incurred, in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any act or action taken, by commission or omission, in connection with the Plan or any Option granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such Board of Directors member is liable for actual bad faith in the performance of his or her duties; provided that within 60 days after institution of any such action, suit or proceeding, a Board of Directors member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 12. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 13. General Provisions. a. Other Plans. Nothing contained in the Plan shall prohibit the company from establishing additional incentive compensation arrangements. b. No Enlargement of Rights. Neither the Plan, nor the granting of Shares, nor any other action taken pursuant tot he Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the company will retain an Employee in employment for any period of time, or at any particular rate of compensation. Nothing in the Plan shall be deemed to limit or affect the right of the company to terminate the employment of any Employee thereof at any time for any reason or no reason. c. Notice. Any notice given to the Company pursuant to the provisions of the Plan shall be addressed to the company in care of its Secretary (or such other person as the company may designate from time to time) at its principal office, and any notice to be given to an Optionee to whom an Option is granted hereunder shall be delivered personally or addressed to him or her at the address given beneath his or her signature on his or her Option Agreement, or at such other address as such Optionee or his or her transferee (upon the transfer of the Optioned Stock) may hereinafter Page-178 designate to the Company in writing. Any such notice shall be deemed duly given when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, registered or certified, and deposited, postage and registry or certification fee prepaid, in a post office or branch post office regularly maintained by the United States Postal Service. It shall be the obligation of each Optionee holding Shares purchased upon exercise of an Option to provide the Secretary of the Company, by letter mailed as provided hereinabove, with written notice of his or her direct mailing address. d. Legends on Certificates. Unless an appropriate registration statement is filed pursuant to the Securities Act of 1933, as amended, with respect to the Options and Shares issuable under this Plan, each document or certificate representing such Options or Shares shall be endorsed thereon with a legend substantially as follows: "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, and have been acquired for investment and not with a view to, or in connection with, the sale or distribution thereof. No sale, transfer or distribution may be effected without an effective registration statement relating thereto or an opinion of counsel satisfactory to the company that such REGISTRATION IS NOT REQUIRED." Each document or certificate representing the Options or Shares issuable under the Plan shall also contain legends as may be required under applicable blue sky laws or by any agreement the execution of which is a condition to the exercise of an Option under this Plan. e. Applicable Law. To the extent that federal laws do not otherwise control, the Plan shall be governed by and construed in accordance with the law of the state of Delaware, without regard to the conflict of law rules thereof. f. Information to Optionees. The Company shall provide, upon request, without charge to each Optionee copies of such annual and periodic reports as are provided by the Company to its stockholders generally. g. Availability of Plan. A copy of the plan shall be delivered to the Secretary of the Company and shall be shown by him or her to any eligible person inquiring about it. h. Severability. In the event that any provision of the Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability shall not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions shall be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein. 14. Effective Date and Term of Plan. The Plan shall become effective upon Board of Directors approval of the Plan and shall continue in effect for a term of ten (10) years unless sooner terminated under Section 10 of the Plan. Page-179 EX-10.33 10 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the 18th day of January, 2000 ("Effective Date"), by and between Ramtron International Corporation, a Delaware corporation ("Employer"), and L. David Sikes, an individual having a mailing address hereinafter set forth ("Executive"). RECITALS A. Executive is currently the Chairman and Chief Executive Officer of Employer, and Executive and Employer are parties to that certain employment agreement dated as of August 25, 1999 (the "Old Employment Agreement"). B. In order to induce Executive to continue to serve as Employer's Chairman and Chief Executive Officer, Employer has agreed to replace and supercede the Old Employment Agreement with this Agreement effective as of January 18, 2000, and Executive has accepted this Agreement. NOW, THEREFORE, in consideration of the above recitals and the mutual covenants set forth herein, and for other valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties hereby agree that as of the Effective Date the Old Employment Agreement is replaced and superceded in its entirety with the following: 1. Employment: Employment Term; Certain Covenants 1.1 Employer agrees to employ Executive, and Executive agrees to be employed by Employer, under and pursuant to this Agreement for a term commencing on the Effective Date and continuing, unless this Agreement is sooner terminated pursuant to any provision hereof, until the close of business on December 31, 2001 (the "Employment Term"). If the Company and Executive are interested, in their absolute discretion, in renewing this Agreement at the end of the Employment Term, they shall negotiate in good faith regarding the terms and conditions of such renewal, including the period of employment to be covered by such renewal and the compensation to be paid to Executive, and, upon the effectiveness of a renewal of this Agreement, in the absence of a contrary agreement, the additional term of Executive's employment shall be included in the Employment Term. Page-180 1.2 Executive shall continue during the Employment Term to have the title of Chairman and Chief Executive Officer of Employer. Subject to the supervision and direction of Employer's Board of Directors (the "Board"), Executive's primary duties and responsibilities shall include those typically performed by the Chairman and Chief Executive Officer of a public corporation, including without limitation responsibility for the overall business planning and day-to- day management of Employer, and to carry out, together with such other duties and responsibilities in regard to Employer's business as may be prescribed from time to time by the Board, the overall policies and directives of the Board as established and in effect from time to time. 1.3 Executive agrees to perform services as generally described in Section 1.2 and to perform Executive's responsibilities with respect thereto throughout the Employment Term, and Executive shall devote his best efforts during one hundred percent (100%) of his working time to performance of his duties hereunder and to furthering the business interests of Employer. 1.4 Executive understands and acknowledges that various United States laws and regulations, including without limitation Federal and state securities laws, apply to Employer and Executive shall comply with, and shall take no action which might cause Employer to contravene, any applicable laws and regulations. 1.5 The services to be rendered by Executive hereunder shall be furnished primarily in and from Employer's offices in Colorado Springs, Colorado, and from Executive's residence in either Colorado or California. Employer agrees that Executive may perform his services from a residence either in Colorado or in California. 2. Compensation 2.1 Salary. Employer agrees to pay Executive a salary at the rate of Three Hundred Sixty Thousand United States Dollars ($360,000) per year, payable in accordance with Employer's regular salary payroll policies and procedures. Executive agrees that Employer may deduct and withhold from the payments to be made to Executive hereunder, the amounts required to be deducted and withheld by Employer under the provisions of any statute, law, regulation or ordinance heretofore or hereafter enacted. 2.2 Incentive Bonus. In addition to the salary provided for above, Executive shall be eligible to receive incentive and performance bonuses if, as, when, and in such amounts, as may be determined by the Board. It is expressly agreed that payment of any incentive or performance bonus is subject to the Board's discretion, and Executive shall have no claim to payment of any bonus except to the extent, if any, awarded by the Board. Page-181 2.3 Warrants. In addition to any other stock options or warrants for the purchase of Employer's stock held by Executive, Employer hereby grants to Executive, effective on the date of execution of this Agreement, warrants in the form of Exhibit A attached hereto for the purchase of 667,000 shares of the Common Stock of Employer at a per-share price equal to the closing bid price of Employer's Common Stock on the Effective Date (the "Warrants"). The Warrants shall vest and become exercisable on December 31, 2002 if Executive is employed by the Employer at that date; provided, however, that, so long as Executive remains employed pursuant to this Agreement, (a) all of such warrants not previously vested shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (i) Employer or any subsidiary of Employer, or Employer together with one or more of Employer's subsidiaries, sell securities in one or a series of transactions by either a public offering or private placement (including without limitation a placement or distribution of any subsidiary of Employer) for gross proceeds from such sales of at least Seventy Million Dollars ($70,000,000); or (ii) a "change of control" (as hereinafter defined) of Employer occurs; or, (b) if none of the circumstances described in (a) above has occurred, a portion of such warrants, such portion to be determined as provided below, shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (i) if more than fifty percent (50%) of the shares of any subsidiary of Employer is sold or transferred, a percentage of such warrants equal to the percentage the value of such subsidiary or portion of such subsidiary transferred or sold bears to the total value of Employer on the date of such sale or transfer shall vest and become exercisable; (ii) if any shares of any subsidiary of Employer are distributed to Employer's stockholders, the percentage of such warrants equal to the percentage the value of such distributed shares bears to the value of all of the outstanding shares of Employer including such subsidiary on the date of such distribution shall vest and become exercisable; and (iii) if more than ten percent (10%) of Employer's assets, whether tangible or intangible, is sold or transferred, a percentage of such warrants equal to the percentage the value of such assets bears to the total value of all of Employer's assets on the date of such sale or transfer shall vest and become exercisable. Valuations of Employer and its subsidiaries for purposes of the foregoing provisions shall be as reasonably determined by Employer's Board of Directors. Any warrants which become vested and exercisable shall be exercisable for a period of five (5) years from the date of vesting; provided however, that in the event of termination of Executive's employment for any reason prior to December 31, 2001, any vested and exercisable warrants shall be exercisable only for a period of 90 days following the effective date of termination. For purposes of this Agreement, "change of control" means any of the following: (i) Any "person," as such term is defined in Section 3(a)(9) and used in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), who was not a beneficial owner (as defined in Rule 13(d)-3 under the Exchange Act) on the date hereof, becomes the beneficial owner, directly or indirectly, of securities of Employer representing 40% or more of the combined voting power of Employer's then outstanding securities; or (ii) the shareholders or Employer approve (A) a merger of Employer with or into any other corporation of which Employer is not the surviving corporation or in which Employer survives as a subsidiary of another corporation, (B) a consolidation of Employer with any other corporation, or (C) the sale or disposition of all or substantially all of Employer's assets or a plan of complete liquidation. Page-182 2.4 Expense Reimbursement. It is recognized that during the Employment Term Executive will be required to incur ordinary and necessary business promotion and travel expenses in connection with the performance of his duties and Executive shall be entitled to reimbursement for such expenses in accordance with Employer's general reimbursement policies and procedures as may be established from time to time by Employer. It is specifically acknowledged, without limitation of the preceding sentence, that Executive will be required to travel frequently between Employer's offices in Colorado and Executive's residence in California (if and after it is established there), and Employer accordingly agrees that the expenses of such travel shall be reimbursable pursuant to this Agreement. 2.5. Health Insurance; Life Insurance. Employer shall provide Executive and his wife medical insurance coverage under Employer's group medical plan during the term of this Agreement and (if longer) until Executive and his wife have each become eligible for Medicare coverage, and Employer shall provide medical insurance coverage supplemental to Medicare coverage consistent with the coverage of Employer's group medical plan until Executive reaches the age of 65 years, subject to Executive's making of any reasonably required premiums or contributions consistent with the requirements of Employer's group medical plan. Employer shall also provide Executive a life insurance policy with a death benefit of at least $500,000 to extend until Executive reaches the age of 65 years, the beneficiary or beneficiaries of such policy to be as specified by Executive from time to time. The provisions of this Section 2.5 shall survive the Employment Term and any termination of Executive by Employer except a termination for "just cause" as defined in Section 3.3. 2.6 Moving Expense Reimbursement. Upon presentation of documentation thereof, Employer will reimburse Executive (or pay on Executive's behalf) up to $50,000 of Executive's expenses (including without limitation real estate agents' fees, travel expenses, temporary housing and the cost of moving personal property) incurred in relocating Executive's residence to such location in California as Executive may request. 2.7 Vacation. Executive shall be entitled to four (4) full weeks of vacation during each calendar year of the Employment Term, commencing with calendar year 2000. Executive agrees that without the express prior written consent of the Board such vacation periods shall not be accumulated, but shall be taken during each calendar year or forfeited, and Executive agrees to schedule and take such vacation at a time or times which do not unreasonably impair Employer's operations. 3. Termination 3.1 Termination by Employer. Employer may terminate Executive's employment under this Agreement at Employer's election by sending thirty (30) days' written notice to Executive, notifying Executive that effective at the end of such thirty-day period this Agreement and the Employment Term shall be terminated. Upon the expiration of such thirty-day period Employer's employment of Executive and the Employment Term shall cease and be at an end and Employer shall have no further obligations whatever to Executive except as expressly provided herein. Page-183 3.2 Termination by Executive. Executive may terminate his employment with Employer by giving sixty (60) days' written notice of termination to the Board, and this Agreement and the Employment Term shall be terminated effective at the close of business on said sixtieth (60th) day. Thereupon, the Employment Term shall cease at the expiration of such sixty-day period, Executive shall have no further obligations whatever to Employer, except that Executive's obligations provided in Section 4 hereof shall survive any termination of this Agreement by Employer or Executive and, notwithstanding any such termination the provisions of Section 4 shall continue to be binding on Executive. 3.3 Severance Payments upon Employer's Termination. Notwithstanding any other provision of this Agreement, Executive's employment may be terminated at any time by Employer immediately, and without any obligation to pay Executive any compensation or remuneration whatever other than the severance payment hereinafter mentioned, for just cause. For purposes of this Agreement, "just cause" means: (i) Executive's use of non-medically prescribed narcotic drugs or alcohol rendering him unable to fulfill his duties under this Agreement; (ii) the commission by Executive of an act of fraud or embezzlement against Employer; (iii) administrative or court determined securities law violation; (iv) any substantive and undisclosed conflict of interest exists or arises on the part of the Executive; or (v) Executive's indictment for any crime involving moral turpitude. Upon any termination for just cause Employer shall pay Executive, in lieu of any other remuneration that might otherwise be earned by Executive (including without limitation any incentive-performance bonus), an amount equal to two weeks' salary. If none of the conditions or events described in the following two sentences has occurred and (i) Employer should terminate this Agreement for any reason other than for a reason constituting just cause prior to December 31, 2001, Employer shall pay to Executive on the effective date of such termination as Executive's total, complete compensation and remuneration a lump sum payment equal to the sum of the remaining salary that would be due to Executive through December 31, 2001 plus $360,000; or (ii) Executive's employment is not extended by Employer at the end of the Employment Term or Executive's employment is terminated by Employer at any time prior to November 13, 2006 for any reason other than for a reason constituting just cause after having been extended or continued at the end of the Employment Term, Employer shall pay to Executive, on the effective date of such termination and as Executive's total, complete compensation and remuneration a lump sum payment of $360,000. In the event that during the continuation of Executive's employment hereunder but before December 31, 2001: (i) Employer or any subsidiary of Employer, or Employer together with one or more of Employer's subsidiaries, sell securities in one or a series of transactions by either a public offering or private placement (including without limitation a placement or distribution of any subsidiary of Employer) for gross proceeds from such sales of at least Seventy Million Dollars ($70,000,000); or (ii) a "change of control" (as defined in Section 2.3) of Employer occurs, Employer shall be required to continue to pay to Executive or his estate (as applicable) an amount equal to $30,000 per month (the "Monthly Payment") to Executive from and after the termination for any reason of Executive's employment hereunder through November 13, 2006 (the "Payment Termination Date"). In the event that the circumstances in the foregoing sentence have not occurred, and if during Page-184 the continuation of Executive's employment hereunder but before December 31, 2001 any of the following conditions and events occur, a portion of the Monthly Payment determined as provided below shall be paid by Employer to Executive or his estate (as applicable) each month from and after the termination for any reason of Executive's employment hereunder through the Payment Termination Date: (x) if more than fifty percent (50%) of the shares of any subsidiary of Employer is sold or transferred, a percentage of the Monthly Payment equal to the percentage the value of such subsidiary or portion of such subsidiary transferred or sold bears to the total value of Employer on the date of such sale or transfer shall be payable; (y) if any shares of any subsidiary of Employer are distributed to Employer's stockholders, the percentage of the Monthly Payment equal to the percentage the value of such distributed shares bears to the value of all of the outstanding shares of Employer including such subsidiary on the date of such distribution shall be payable; and (z) if more than ten percent (10%) of Employer's assets, whether tangible or intangible, is sold or transferred, a percentage of the Monthly Payment equal to the percentage the value of such assets bears to the total value of all of Employer's assets on the date of such sale or transfer shall be payable. Valuations of Employer and its subsidiaries for purposes of the foregoing provisions shall be as reasonably determined by Employer's Board of Directors. Executive and Employer agree that it is impossible to determine with any reasonable accuracy the amount of prospective damages to Executive upon Employer's termination other than for just cause of this Agreement; and, in consideration thereof, Executive and Employer agree that the foregoing severance payment provisions are reasonable, and do not constitute a penalty, based upon facts and circumstances of the parties at the time of entering into this Agreement, and with due regard to Executive's future expectations. 3.4 Death or Total Disability. Notwithstanding any other provision of this Agreement, in addition to any Monthly Payment or portion thereof payable to Executive's estate pursuant to Section 3.3, on the event of Executive's death or total disability at any time during the Employment Term, this Agreement and the Employment Term shall thereupon automatically terminate, and Employer shall be obligated to pay to Executive's estate a lump sum equal to the full amount of Executive's salary hereunder through December 31, 2001. Executive shall be deemed to be "totally disabled" for purposes of this Section 3.4 if, during any period of sixty (60) consecutive days or for a cumulative period of ninety (90) days in any consecutive twelve-month period, he shall be unable, due to mental or physical illness or injury, to perform his duties hereunder. Executive shall be conclusively presumed to be permanently disabled on the sixtieth (60th) such consecutive day or the 90th such cumulative day of such twelve- month period, as applicable. 3.5 Taxes and Withholding. All amounts payable by Employer to Executive hereunder shall be subject to, and reduced by the amount of any tax or other withholdings determined by Employer to be applicable thereto. 4. Executive's Agreement Not to Compete With, and to Protect the Proprietary Assets of, Employer Page-185 4.1 During the Employment Term, Executive shall not directly or indirectly engage, be involved, or have any financial interest, in any proprietorship, partnership, company or other business which engages in competition with Employer in any line of business in which Employer is or may be from time to time engaged during such period of time, whether Executive does so as a partner, officer, director, employee, consultant or holder of any beneficial interest in any such business or activity. During, and for a period of two years after, the Employment Term, Executive shall not divert nor attempt to divert from Employer any business of any kind in which Employer is or may be engaged. Furthermore, during, and for a period of two years after, the Employment Term, Executive shall not induce or attempt to induce any person who is an employee of Employer to leave the employ of Employer. Nothing contained herein shall be construed as preventing Executive from (i) engaging in non- competitive outside business interests, activities and investments which do not require more than incidental amounts of Executive's time and energy, (ii) investing in stock of business corporations listed on a national securities exchange (or reported by a newspaper of general circulation in the United States customarily published on each business day), (iii) investing in real estate, and (iv) investing in private letter stock or limited partnership interests, provided that such outside interests, investments or activities are consistent with, and do not prevent the Executive from, fully and loyally performing his duties hereunder, and do not create, directly or indirectly, any conflict of interest with respect to his employment hereunder. 4.2 Executive acknowledges that in the performance of his duties as Chairman and Chief Executive Officer of Employer he will have access to Employer's existing or potential trade secrets and proprietary information, including, but not limited to, any idea or concept, compilation of information, or investment product used or to be used in Employer's or Employer's affiliates' businesses, any marketing and product research and development plans, pricing plans, financial data and projections of sales, expenses, etc., and other confidential information, which allows Employer or Employer's affiliates' to obtain an advantage over others, including competitors, who do not know or use such trade secrets (cumulatively, "Trade Secrets"); and, confidential market information, including, but not limited to, customer, marketing and sales, financial, administrative, production, operational and other information used in Employer's or Employer's affiliates' businesses (cumulatively, "Confidential Information"), which are confidential and proprietary to Employer. Accordingly, during and after the Employment Term, Executive shall keep in confidence at all times and not disclose to any person, firm or corporation, and not make any use of, except as expressly authorized by Employer, any Trade Secrets or Confidential Information which are made available to Executive and identified as proprietary or which, from the circumstances involved, Executive should recognize as proprietary. Executive further agrees that all Trade Secrets and Confidential Information shall remain the exclusive property of Employer and shall not be removed from Employer's premises under any circumstances whatever, except as expressly authorized by Employer. Page-186 4.3 Executive agrees that, during the Employment Term and thereafter, any direct or indirect use of Employer's client lists or solicitation of Employer's clients and customers, other than to further Employer's interests, is use of confidential information that is not readily accessible to Employer's competitors, is use intended to injure Employer, and is solicitation of preferred clients and customers whose relationship to Employer is profitable. Executive further acknowledges that the established business relationship between Employer and its clients and customers and Employer would normally continue unless interfered with. 4.4 If Executive at any time should have any question about Executive's use or disclosure of Trade Secrets or Confidential Information or whether any ideas, procedures, information, documentation, materials or representations are Trade Secrets or Confidential Information, Executive shall promptly discuss the question with the Board, whose determination shall be binding on Executive. 4.5 Upon termination of Executive's employment with Employer, Executive shall return to Employer all originals and copies of any and all documents, drawings, notes, samples, flowcharts, spreadsheets, memoranda or other matters and writings relating to the business of Employer, or that of its customers, acquired during the Employment Term, and Executive shall not retain any copy, draft, duplicate, representation or extract thereof unless expressly authorized by Employer's Chairman. 4.6 Executive acknowledges and agrees that his covenants and undertakings contained in this Section 4 relate to matters which are of a special and unique character, which gives them a special value impossible of replacement by Employer and for the loss of which Employer cannot be reasonably or adequately compensated by monetary damages. Accordingly, any breach by Executive of the provisions of this Section 4 would cause Employer irreparable injury and damages and Executive therefore expressly agrees that Employer shall be entitled to injunctive and other equitable relief to prevent a breach or a continuing breach of any of the provisions of this Section 4, and to secure the enforcement of any of these provisions, in addition to any other legal or equitable remedy that may be available to Employer. Further, Executive agrees that the provisions of this Section 4 shall survive any termination of Executive's employment by Employer, and that those provisions shall not be construed to limit any of Executive's obligations and duties to Employer which may be provided by law. 5. Notices Any and all notices and other communications required or permitted hereunder shall be given in writing and delivered personally, sent by registered or certified mail or transmitted by telecopy, with confirmation of receipt, and shall be effective when so delivered (or in the case of a telecopy, when confirmation is received) to the party designated to receive such notice at the following address or telecopy number (or to such other address or telecopy number as may hereafter be designated by such party in a notice in writing given to the other party in accordance with the provisions of this Section 5): Page-187 if to Employer to: Ramtron International Corporation 1850 Ramtron Drive Colorado Springs, CO 80921 Attn: President/Chief Operating Officer Telecopy: 719.481.9294 if to Executive to: L. David Sikes 1850 Ramtron Drive Colorado Springs, CO 80921 Telecopy: 719.481.9294 6. Governing Law and Jurisdiction. 6.1 Choice of Law. The validity, construction, interpretation, and legal effect of this Agreement shall be determined and governed by the substantive laws and judicial decisions of the State of Colorado applicable to contracts entered into and performed entirely within the State of Colorado. 6.2 Forum. Employer and Executive expressly agree that any legal action or proceeding with respect to any of the obligations arising under or relating to this Agreement may be brought in any court of the State of Colorado or any Federal court of the United States of America located in Colorado, and each of the parties hereby submits to the jurisdiction of the aforesaid courts and irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in the State of Colorado and hereby further irrevocably waives any claim that any such court in the State of Colorado is not a convenient forum for any such suit, action or proceeding. 6.3 Attorneys' Fees. In the event of any legal action relating to this Agreement, the prevailing party in such action as determined by the court will be entitled to recover from the other party its court costs and reasonable fees and expenses of attorneys, accountants, experts, and other professionals incurred in connection with the action, including such costs, fees and expenses upon appeal. 7. General Provisions 7.1. Merger and Severability. This Agreement shall constitute the entire Agreement between Employer and Executive with respect to the subject matter hereof. If any provision of this Agreement should be found to be invalid or unenforceable, it shall be replaced by a provision which comes as close as possible to the intended result of the invalid provision, and the economic purpose thereof, and which is valid and enforceable. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. Page-188 7.2. Amendments. The terms and provisions of this Agreement may not be amended or modified except by a written instrument by each of Employer and Executive. 7.3. Assignment. Neither Employer nor Executive shall be entitled to assign its or his rights, duties or obligations under this Agreement. Employer, nonetheless, shall be entitled to transfer its rights pursuant to this Agreement to any affiliate of Employer, provided that the transferee, in writing, shall assume the full performance of all the terms and provisions hereof on Employer's part to be performed with the same force and effect as if such transferee had been Employer herein. 7.4. No Continuing Waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof. 7.5. Headings. The headings of the Sections of this Agreement are inserted for convenience of reference only and shall not be deemed to constitute a part hereof. 7.6. Counterparts. More than one counterpart of this Agreement may be executed by the parties hereto, and any single counterpart or a set of counterparts signed, in either case, by each of the parties hereto shall constitute and full and original agreement for all purposes. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the day and year first above written. RAMTRON INTERNATIONAL CORPORATION By: /S/ Greg B. Jones /S/ L. David Sikes - ------------------------ --------------------------- Name: Greg B. Jones L. David Sikes Title: President and COO Page-189 Exhibit A THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE AFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. Warrants to Purchase Shares of Common Stock RAMTRON INTERNATIONAL CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE THE WARRANTS evidenced by this Warrant Certificate have been issued as of the 18th day of January, 2000, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. THIS CERTIFICATE evidences the right of L. David Sikes or his nominee ("Holder") to purchase, for the Exercise Price (as defined below), during the Exercise Term (as defined below), 667,000 shares of Common Stock (the "Shares") of Ramtron International Corporation, a Delaware corporation (the "Company"), subject to the terms and conditions hereinafter set forth. 1. Definitions. As used in this Certificate: (a) "Aggregate Exercise Price" shall mean with respect to any exercise under this Warrant Certificate the Exercise Price multiplied by the number of shares of Common Stock as to which the Warrant Certificate is exercised, as set forth in the Subscription Agreement. (b) "Date of Issuance" shall mean the date set forth in the preamble of this Warrant Certificate. (c) "Employment Agreement" shall mean that certain employment agreement entered into between Holder and Company dated as of January --, 2000. (d) "Exercise Price" shall mean ----- Dollars and ----- Cents ($------) per Share. [Must equal closing bid price of the Company's stock on the Date of Issuance, i.e., the Employment Agreement is effective.] (e) "Exercise Term" shall mean the five (5) year period commencing on the first date that the Warrants, or any portion thereof, vest and become exercisable pursuant to Section 2(a) of this Warrant Certificate and ending on the date that is five years from the date of such vesting; provided however, that in the event of termination of Holder's employment with the Company for any reason prior to December 31, 2001, any vested and exercisable warrants shall be exercisable only for a period of 90 days following the effective date of termination. Page-190 (f) "Registrable Shares" shall mean all Shares that may not be resold pursuant to Rule 144 under the Act as of the date on which the Company notifies Holder, in accordance with Section 7(a) of this Warrant Certificate, of its intent to file a registration statement. (g) "Subscription Agreement" shall mean the Subscription Agreement attached hereto as Exhibit A. (h) "Warrants" shall mean the rights evidenced by this Warrant Certificate. 2. Exercise of Warrants. (a) Right to Exercise. These Warrants shall vest and become exercisable on December 31, 2002 if the Holder is employed by the Company at that date; provided, however, that, so long as Holder remains employed by the Company pursuant to the Employment Agreement, (i) all of the Warrants not previously vested shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (x) the Company or any subsidiary of the Company, or Company together with one or more of the Company's subsidiaries, sell securities in one or a series of transactions by either a public offering or private placement (including without limitation a placement or distribution of any subsidiary of the Company) for gross proceeds from such sales of at least Seventy Million Dollars ($70,000,000); or (y) a "change of control" (as hereinafter defined) of the Company occurs; or, (ii) if none of the circumstances described in (i) above has occurred, a portion of the Warrants, such portion to be determined as provided below, shall vest and become immediately exercisable upon the occurrence of any of the following conditions and events on or before December 31, 2001: (x) if more than fifty percent (50%) of the shares of any subsidiary of the Company is sold or transferred, a percentage of the total number of Warrants equal to the percentage that the value of such subsidiary or portion of such subsidiary transferred or sold bears to the total value of the Company on the date of such sale or transfer shall vest and become exercisable; (y) if any shares of any subsidiary of the Company are distributed to the Company's stockholders, a percentage of the total number of Warrants equal to the percentage that the value of such distributed shares bears to the value of all of the outstanding shares of the Company including such subsidiary on the date of such distribution shall vest and become exercisable; and (z) if more than ten percent (10%) of the Company's assets, whether tangible or intangible, is sold or transferred, a percentage of the total number of Warrants equal to the percentage that the value of such assets bears to the total value of all of the Company's assets on the date of such sale or transfer shall vest and become exercisable. Valuations of the Company and its subsidiaries for purposes of the foregoing provisions shall be as reasonably determined by the Company's Board of Directors. For purposes of this Warrant Certificate, "change of control" means any of the following: (i) Any "person," as such term is defined in Section 3(a)(9) and used in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Page-191 Act"), who was not a beneficial owner(as defined in Rule 13(d)-3 under the Exchange Act) on the date hereof, becomes the beneficial owner, directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company's then outstanding securities; or (ii) the shareholders or Company approve (A) a merger of the Company with or into any other corporation of which the Company is not the surviving corporation or in which the Company survives as a subsidiary of another corporation, (B) a consolidation of the Company with any other corporation, or (C) the sale or disposition of all or substantially all of the Company's assets or a plan of complete liquidation. (b) Method of Exercise. The vested Warrants may be exercised by the Holder during the Exercise Term: (i) Cash Exercise. By the surrender of this Warrant Certificate at the principal office of the Company, along with the properly completed Subscription Agreement indicating the election of the Holder to effect a cash exercise, and the payment to the Company by certified or cashier's check of the Aggregate Exercise Price; or (ii) Cashless Exercise. By the surrender of this Warrant Certificate at the principal office of the Company, along with the properly completed Subscription Agreement indicating the election of the Holder to effect a cashless exercise pursuant to the provisions of this Section 2(b)(ii) ("Cashless Exercise"). Such surrender shall be deemed a waiver of the Holder's obligation to tender cash payment of the Aggregate Exercise Price. In the event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the Holder shall exchange its Warrants for that number of shares of Common Stock determined by multiplying the number of shares of Common Stock of Company to which it would otherwise be entitled by a fraction, the numerator of which shall be the difference between the then current market price per share of the Common Stock and the Exercise Price, and the denominator of which shall be the then current market price per share of Common Stock. For purposes of any computation under this Section 2(b)(ii), the then current market price per share of Common Stock at any date shall be deemed to be the closing sale price of the Common Stock for the trading day preceding the date of the Cashless Exercise as reported by the Nasdaq Stock Market ("Nasdaq") or, if no reported sale takes place on such day, the representative closing bid price of the Common Stock for such day as reported by Nasdaq. (c) Issuance of Share Certificate and/or New Warrant Certificate. In the event of any exercise of the Warrants, certificates for the Shares so purchased shall be delivered to Holder within a reasonable time after the Warrants shall have been so exercised, and unless the Warrants have expired, a new certificate representing the right to purchase the number of Shares, if any, with respect to which this Warrant Certificate shall not then have been exercised shall also be issued to Holder within such Page-192 time. All such new warrant certificates shall be dated the date hereof and shall be identical to this Warrant Certificate except as to the number of Shares issuable pursuant thereto. The Company shall pay all documentary, stamp or other transactional taxes (other than transfer taxes), if any, attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of the Warrants. (d) Restrictions on Exercise. The Warrants may not be exercised if the issuance of the Shares upon such exercise would constitute a violation of any applicable federal or state securities laws or other laws or regulations. As a condition to the exercise of the Warrants, the Company may require Holder to make such representations and warranties to the Company as may be required by applicable law or regulation. 3. Stock Fully Paid; Reservation of Shares. The Company covenants and agrees that all Shares will, upon issuance and payment in accordance herewith, be fully paid, validly issued and nonassessable. The Company further covenants and agrees that during the Exercise Term the Company will at all times have authorized and reserved for the purpose of the issue upon exercise of the Warrants at least the maximum number of shares of the Company's Common Stock as are issuable upon the exercise of the Warrants. 4. Adjustment of Purchase Price and Number of Shares. The number and kind of securities purchasable upon the exercise of the Warrants and the Exercise Price shall be subject to adjustment from time to time upon the happening of certain events, as follows: (a) Consolidation, Merger or Reclassification. If the Company at any time while the Warrants remain outstanding and unexpired shall consolidate with or merge into any other corporation, or sell all or substantially all of its assets to another corporation, or reclassify or in any manner change the securities then purchasable upon the exercise of the Warrants (any of which shall constitute a "Reorganization"), then lawful and adequate provision shall be made whereby this Warrant Certificate shall thereafter evidence the right to purchase such number and kind of securities and other property as would have been issuable or distributable on account of such Reorganization upon or with respect to the securities which were purchasable under the Warrants immediately prior to the Reorganization. The Company shall not effect any such Reorganization unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such Reorganization shall assume by written instrument executed and mailed or delivered to Holder, at the last address of Holder appearing on the books of the Company, the obligation to deliver to Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, Holder may be entitled to purchase. Page-193 (b) Subdivision or Combination of Shares. If the Company at any time while the Warrants remain outstanding and unexpired shall subdivide or combine its Common Stock, the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to such subdivision or combination by a fraction (i) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such subdivision or combination and (ii) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such subdivision or combination. (c) Certain Dividends and Distributions. If the Company at any time while the Warrants are outstanding and unexpired shall take a record of the holders of its Common Stock for the purpose of: (i) Stock Dividends. Entitling them to receive a dividend payable in, or other distribution without consideration of, Common Stock, then the Exercise Price shall be adjusted to that price determined by multiplying the Exercise Price in effect immediately prior to each dividend or distribution by a fraction (A) the numerator of which shall be the total number of shares of Common Stock outstanding immediately prior to such dividend or distribution, and (B) the denominator of which shall be the total number of shares of Common Stock outstanding immediately after such dividend or distribution; or (ii) Distribution of Assets, Securities, etc. Making any distribution without consideration with respect to its Common Stock (other than a cash dividend) payable otherwise than in its Common Stock, Holder shall, upon the exercise of the Warrants, be entitled to receive, in addition to the number of Shares receivable thereupon, and without payment of any additional consideration therefor, such assets or securities as would have been payable to him or her as owner of that number of Shares receivable by exercise of the Warrants had he or she been the holder of record of such Shares on the record date for such distribution, and an appropriate provision therefor shall be made a part of any such distribution. (d) Adjustment of Number of Shares. Upon each adjustment in the Exercise Price pursuant to Subsections (b) or (c) (i) of this Section 4, the number of Shares purchasable hereunder shall be adjusted to that number determined by multiplying the number of such Shares purchasable upon the exercise of the Warrants immediately prior to such adjustment by a fraction, the numerator of which shall be the Exercise Price immediately prior to such adjustment and the denominator of which shall be the Exercise Price immediately following such adjustment. Any determination that the Company or the Board of Directors must make pursuant to subsections (a), (b) or (c) of this Section 4 shall be final and conclusive. Page-194 (e) Notice. In case at any time: (i) The Company shall pay any dividend payable in stock upon its Common Stock or make any distribution, excluding a cash dividend, to the holders of its Common Stock; (ii) The Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of stock of any class or other rights; (iii) There shall be any reclassification of the Common Stock of the Company, or consolidation or merger of the Company with, or sale of all or substantially all of its assets to, another corporation; or (iv) There shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of such cases, the Company shall give to Holder at least 10 days' prior written notice (or, in the event of notice pursuant to Section 4(e)(iii), at least 30 days' prior written notice) of the date on which the books of the Company shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect to any such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up. Such notice in accordance with the foregoing clause shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto, and such notice in accordance with the foregoing clause shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, as the case may be. Each such written notice shall be given by first-class mail, postage prepaid, addressed to Holder at the address of Holder as shown on the books of the Company. (f) No Change in Warrant Certificate. The form of this Warrant Certificate need not be changed because of any adjustment in the Exercise Price or in the number of Shares purchasable on its exercise. The Exercise Price or the number of Shares shall be considered to have been so changed as of the close of business on the date of adjustment. 5. Fractional Shares. No fractional Shares will be issued in connection with any subscription hereunder but, in lieu of such fractional Shares, the Company shall make a cash payment therefor upon the basis of the fair market value of the Shares. Page-195 6. Restrictions on Transfer. The Warrants are restricted from sale, transfer, assignment or hypothecation by operation of law. The Warrants have not been registered under the Act or any applicable state securities laws, and may not be offered for sale, sold, transferred, pledged or hypothecated without an effective registration statement under the Act and under any applicable state securities law, or an opinion of counsel, satisfactory to the Company, that an exemption from such registration is available. By accepting this Warrant Certificate, the Holder acknowledges his or her understanding that because the Warrants are not registered, the Holder must hold the Warrants indefinitely unless they are registered under the Act and any applicable state securities laws or must obtain exemptions from registration. In addition, by accepting this Warrant Certificate, the Holder represents and warrants that the Holder is acquiring the Warrants for his or her own account for investment and not with the view to distribution, assignment, resale or other transfer of the Warrants. Except as specifically stated herein, no other person has a direct or indirect beneficial interest in the Warrants. 7. Registration Under Securities Act of 1933. (a) Piggyback Registration Rights. The Company agrees that if, at any time and from time to time while the Holder holds the Warrants or any Registrable Shares, the Board of Directors of the Company shall authorize the filing of a registration statement under the Act (other than a registration statement on Form S-8, Form S-4 or any other form which does not include substantially the same information as would be required in a form for the general registration of securities such as the Shares purchasable hereunder), in connection with the proposed offer of any of its securities by it or any of its shareholders, the Company will (i) notify the Holder of the Warrants and/or the Registrable Shares that such registration statement will be filed and that the Registrable Shares which are then held, and/or may be acquired upon exercise of the Warrants by the Holder, will be included in such registration statement at the Holder's written request, (ii) cause such registration statement to cover all of such Registrable Shares which it has been so requested to include, and (iii) take all other action that the Company and its counsel deem necessary under any Federal or state law or regulation of any governmental authority to permit all such Registrable Shares which it has been so requested to include in such registration statement to be sold or otherwise disposed of, and will maintain such compliance with each such Federal and state law and regulation of any governmental authority for the period, not in excess of six months, necessary for the Holder to effect the proposed sale or other disposition; provided, however, that the Company shall have no obligation under this Section 7 to the extent that, with respect to a registration statement filed in connection with a public offering or private placement, the managing underwriter of such offering, or placement agent for such placement, determines that the Registrable Shares requested to be registered under this Section 7, or a portion thereof, should be excluded from such registration statement. (b) Prospectus Delivery and Qualification in Colorado. Whenever the Company is required pursuant to the provisions of this Section 7 to include in a registration statement Registrable Shares held by Holder, the Company shall (i) furnish the Holder of any such Registrable Shares with copies of the prospectus conforming to the Act in order to facilitate the sale or Page-196 distribution of such Registrable Shares, (ii) use its best efforts to register or qualify such Registrable Shares under the blue sky laws (to the extent applicable) of the State of Colorado, and (iii) take such other actions that the Company and its counsel deem necessary to consummate the sale or distribution of such Registrable Shares in the State of Colorado. (c) Expenses. The Company shall pay all expenses incurred in connection with any registration statement or other action pursuant to the provisions of this Section 7, other than underwriting discounts and commissions, compliance with the blue-sky laws of any state other than Colorado, applicable transfer taxes, and fees and expenses of counsel to the Holder. 8. No Rights as Shareholder. Holder, as holder of the Warrants, shall not be entitled to vote or receive dividends or be considered a shareholder of the Company for any purpose, nor shall anything in this Warrant Certificate be construed to confer on Holder, as such, any rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action, to receive notice of meetings of shareholders, to receive dividends or subscription rights or otherwise. 9. Notices. All demands, notices, consents and other communications to be given hereunder shall be in writing and shall be deemed duly given when delivered personally or five days after being mailed by first class mail, postage prepaid, properly addressed, if to the Company at Ramtron International Corporation, 1850 Ramtron Drive, Colorado Springs Colorado 80921, or if to Holder at the last address appearing on the records of the Company. The Company and Holder may change such address at any time or times by notice hereunder to the other. 10. Amendments; Waivers, Terminations, Governing Law; Headings. The Warrants and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. The Warrants shall be governed by and construed and interpreted in accordance with the laws of the State of Delaware. The headings in this Warrant Certificate are for convenience of reference only and are not part of the Warrants. Dated as of January --, 2000. RAMTRON INTERNATIONAL CORPORATION By: ------------------------ Name: ---------------------- Title: --------------------- Attest: - ----------------------------- RECEIPT ACKNOWLEDGED BY HOLDER: - ----------------------------- L. David Sikes Address: 69 Marland Place Colorado Springs, Colorado 80906 Page-197 EXHIBIT A RAMTRON INTERNATIONAL CORPORATION 1850 Ramtron Drive Colorado Springs, Colorado 80921 Subscription Agreement for the Exercise of Warrants (To be completed and signed only upon exercise of the Warrants) The undersigned, the holder and registered owner of the attached Warrants, hereby irrevocably and unconditionally elects to exercise such Warrants and subscribes for the purchase of -----------* shares of Ramtron International Corporation (the "Company") common stock (the "Common Stock") pursuant to and in accordance with the terms and conditions of the Warrant Certificate attached hereto, and (1) elects to effect a cash exercise and herewith tenders a check in the amount of $-----------, or (2) by initialing the space that follows -------, elects to effect a Cashless Exercise and herewith tenders the requisite number of Warrants pursuant to the Cashless Exercise provisions of the Warrants in Section 2(b)(ii) of the attached Warrant Certificate in exchange for the Common Stock which should be delivered to the undersigned at the address stated below, and, if said number of shares of Common Stock shall not be all of the Common Stock purchasable hereunder, a new Warrant of like tenor for the balance of the remaining Common Stock purchasable hereunder should be delivered to the undersigned at the address stated below. The undersigned agrees that: (1) the undersigned will not offer, sell, transfer or otherwise dispose of any of the Common Stock unless either (a) a registration statement, or post- effective amendment thereto, covering the Common Stock has been filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Act"), such sale, transfer or other disposition is accompanied by a prospectus meeting the requirements of Section 10 of the Act forming a part of such registration statement, or post-effective amendment thereto, which is in effect under the Act covering the Common Stock to be so sold, transferred or otherwise disposed of, and all applicable state securities laws have been complied with, or (b) the undersigned has delivered to the Company a written opinion of counsel, addressed to the Company, which opinion is reasonably acceptable to the Company and its counsel, that such proposed offer, sale, transfer or other disposition of the Common Stock is exempt from the provisions of Section 5 of the Act in view of the circumstances of such proposed offer, sale, transfer or other disposition; Page-198 (2) the Company may notify the transfer agent for Common Stock that the certificates for the Common Stock acquired by the undersigned are not to be transferred unless the transfer agent receives advice from the Company that one or both of the conditions referred to in (1)(a) and (1)(b) above have been satisfied; and (3) the Company may affix the following legend to the certificates for the Common Stock hereby subscribed for, if such legend is applicable: THIS SECURITY HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY NOT BE OFFERED AND SOLD UNLESS REGISTERED AND/OR QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE. THEREFORE, NO SALE OR TRANSFER OF THIS SECURITY SHALL BE MADE, NO ATTEMPTED SALE OR TRANSFER SHALL BE VALID, AND THE ISSUER SHALL NOT BE REQUIRED TO GIVE ANY EFFECT TO ANY SUCH TRANSACTION UNLESS (A) SUCH TRANSACTION SHALL HAVE BEEN DULY REGISTERED UNDER THE ACT AND QUALIFIED OR APPROVED UNDER APPROPRIATE STATE OR BLUE SKY LAWS, OR (B) THE ISSUER SHALL HAVE FIRST RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO IT THAT SUCH REGISTRATION, QUALIFICATION OR APPROVAL IS NO REQUIRED. Dated: ------------- Signed: ------------------------------ Name: L. David Sikes Address: -------------------- -------------------- Page-199 EX-10.34 11 EMPLOYMENT AGREEMENT February 24, 2000 Mr. Donald G. Carrigan 425 Scrub Oak Circle Monument, Colorado 80132 Dear Mr. Carrigan: This letter agreement ("Agreement") sets forth our agreement to the terms of your continued employment with Ramtron International Corporation ("Ramtron"). 1. Term. The term of this Agreement shall begin on January 1, 2000 and shall continue until December 31, 2001, unless sooner terminated as provided in paragraph 2 below. 2. Termination. Should you voluntarily terminate your employment or should your employment be terminated for cause, Ramtron shall be relieved of all of its obligations provided herein including, but not limited to, its obligation to pay you the salary provided in paragraph 3 below. Termination for cause shall include chronic absenteeism (not due to physical or mental illness, not constituting permanent disability, habitual alcoholism, drug abuse or addiction); the commission of a felony or fraud on Ramtron, its employees, customers, stockholders, or vendors; misappropriation of any money or other assets or properties of Ramtron, its employees, customers, stockholders or vendors; violation of reasonable, specific and lawful directions received from Ramtron's Board of Directors and/or CEO, in connection with and pertaining to your duties Vice President and General Manager; or the unauthorized disclosure or use of any Ramtron trade secrets or financial information or data which results, or is likely to result, in injury or damage to Ramtron. Upon termination of this Agreement, you shall be paid your regular salary and accrued vacation time, if any, up to the termination date less applicable income tax withholdings and any other lawful off set for charges or indebtedness which may be owed by you to Ramtron or both. If Ramtron terminates your employment for any reason other than cause during the term of this Agreement, then Ramtron shall be obligated to continue to pay you the salary provided in paragraph 3 below until such term expires. IT IS EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH RAMTRON IS AN EMPLOYMENT "AT WILL" SITUATION. 3. Salary. The salary to be paid by Ramtron to you shall be THIRTEEN THOUSAND THREE HUNDRED EIGHT DOLLARS AND EIGHT CENTS ($13,308.08) per month ($159,697.00 per annum), which amount shall be paid in equal installments on or about the 15th and 30th of each month. All such payments shall be subject to withholding and other applicable taxes. Page-200 4. Ownership of Documents, Patents and Copyrights. Any documents, inventions or copyrightable material that you may prepare while employed by Ramtron shall be subject to the non-disclosure and assignment requirements provided in the Invention and Non-Disclosure Agreement between you and Ramtron dated November 27, 1989. The termination or expiration of this Agreement shall have no affect on your duties and obligations as provided in said Invention and Non- Disclosure Agreement. 5. Change of Ownership. If during the term of this contract, a change of ownership of Ramtron or the business segment with which you are associated (defined as the sale or transfer of > 50% of the assets or stock to a single new owner) occurs and your employment hereunder is not continued (or an equivalent job is not offered to you with the new entity), then you shall be entitled to a severance package that would include: Your salary until departure date Any unpaid expense reimbursement Accrued vacation pay One year's salary to be paid in one lump sum or monthly over 12 months at the discretion of the Company 6.Arbitration. Should any dispute arise under this Agreement or out of its termination or cancellation, the matter shall be submitted to and decided by arbitration. The arbitration shall be held at a mutually agreeable location within the State of Colorado and shall be held in accordance with the terms and conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13- 22-201. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 8. Severability. In case any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby. 9. Assignability and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon your successors, assigns and legal representatives and the successors and assigns of Ramtron. Except as set forth in paragraph 10 below, neither party may assign, transfer, pledge, encumber or otherwise dispose of this Agreement or any rights or obligations hereunder, and any such attempt at delegation or disposition shall be null and void and without effect. 10. Complete Agreement; Modification; Waiver. This Agreement constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof. This Agreement shall not be altered, modified or amended except by written instruments signed by each of the parties hereto. Waivers of any provision contained herein or any default hereunder shall only be effective if in writing and signed by the party to be charged therewith. Any written waiver shall not operate or be construed as a waiver of any or other subsequent breach or default by any party. Page-201 Please indicate your agreement to the foregoing by signing below. Sincerely, /S/ L. David Sikes L. David Sikes Chairman and CEO LDS/klb This Agreement is hereby agreed to and accepted, effective as of January 1, 2000. /S/ Donald G. Carrigan March 2, 2000 - --------------------------- ------------- Donald G. Carrigan Date Page-202 EX-10.35 12 EMPLOYMENT AGREEMENT February 24, 2000 Mr. Craig W. Rhodine 310 Stirrup Trail Monument, Colorado 80132 Dear Mr. Rhodine: This letter agreement ("Agreement") sets forth our agreement to the terms of your continued employment with Ramtron International Corporation ("Ramtron"). 1. Term. The term of this Agreement shall begin on January 1, 2000 and shall continue until December 31, 2001, unless sooner terminated as provided in paragraph 2 below. 2. Termination. Should you voluntarily terminate your employment or should your employment be terminated for cause, Ramtron shall be relieved of all of its obligations provided herein including, but not limited to, its obligation to pay you the salary provided in paragraph 3 below. Termination for cause shall include chronic absenteeism (not due to physical or mental illness, not constituting permanent disability, habitual alcoholism, drug abuse or addiction); the commission of a felony or fraud on Ramtron, its employees, customers, stockholders, or vendors; misappropriation of any money or other assets or properties of Ramtron, its employees, customers, stockholders or vendors; violation of reasonable, specific and lawful directions received from Ramtron's Board of Directors and/or CEO, in connection with and pertaining to your duties Vice President and General Manager of Enhanced Memory Systems, Inc.; or the unauthorized disclosure or use of any Ramtron trade secrets or financial information or data which results, or is likely to result, in injury or damage to Ramtron. Upon termination of this Agreement, you shall be paid your regular salary and accrued vacation time, if any, up to the termination date less applicable income tax withholdings and any other lawful off set for charges or indebtedness which may be owed by you to Ramtron or both. If Ramtron terminates your employment for any reason other than cause during the term of this Agreement, then Ramtron shall be obligated to continue to pay you the salary provided in paragraph 3 below until such term expires. IT IS EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH RAMTRON IS AN EMPLOYMENT "AT WILL" SITUATION. 3. Salary. The salary to be paid by Ramtron to you shall be THIRTEEN THOUSAND THREE HUNDRED THIRTY-THREE DOLLARS AND THIRTY-THREE CENTS ($13,333.33) per month ($160,000.00 per annum), which amount shall be paid in equal installments on or about the 15th and 30th of each month. All such payments shall be subject to withholding and other applicable taxes. Page-203 4. Ownership of Documents, Patents and Copyrights. Any documents, inventions or copyrightable material that you may prepare while employed by Ramtron shall be subject to the non-disclosure and assignment requirements provided in the Invention and Non-Disclosure Agreement between you and Ramtron dated September 14, 1992. The termination or expiration of this Agreement shall have no affect on your duties and obligations as provided in said Invention and Non- Disclosure Agreement. 5. Change of Ownership. If during the term of this contract, a change of ownership of Ramtron or the business segment with which you are associated (defined as the sale or transfer of > 50% of the assets or stock to a single new owner) occurs and your employment hereunder is not continued (or an equivalent job is not offered to you with the new entity), then you shall be entitled to a severance package that would include: Your salary until departure date Any unpaid expense reimbursement Accrued vacation pay One year's salary to be paid in one lump sum or monthly over 12 months at the discretion of the Company 6. Arbitration. Should any dispute arise under this Agreement or out of its termination or cancellation, the matter shall be submitted to and decided by arbitration. The arbitration shall be held at a mutually agreeable location within the State of Colorado and shall be held in accordance with the terms and conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13- 22-201. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 8. Severability. In case any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby. 9. Assignability and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon your successors, assigns and legal representatives and the successors and assigns of Ramtron. Except as set forth in paragraph 10 below, neither party may assign, transfer, pledge, encumber or otherwise dispose of this Agreement or any rights or obligations hereunder, and any such attempt at delegation or disposition shall be null and void and without effect. 10. Complete Agreement; Modification; Waiver. This Agreement constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof. This Agreement shall not be altered, modified or amended except by written instruments signed by each of the parties hereto. Waivers of any provision contained herein or any default hereunder shall only be effective if in writing and signed by the party to be charged therewith. Any written waiver shall not operate or be construed as a waiver of any or other subsequent breach or default by any party. Page-204 Please indicate your agreement to the foregoing by signing below. Sincerely, /S/ L. David Sikes L. David Sikes Chairman and CEO LDS/klb This Agreement is hereby agreed to and accepted, effective as of January 1, 2000. /S/ Craig W. Rhodine March 2, 2000 - ------------------------ ------------- Craig W. Rhodine Date Page-205 EX-10.36 13 EMPLOYMENT AGREEMENT February 24, 2000 Mr. Greg B. Jones 3060 Richfield Drive Colorado Springs, CO 80919 Dear Mr. Jones: This letter agreement ("Agreement") sets forth our agreement to the terms of your continued employment with Ramtron International Corporation ("Ramtron"). 1. Term. The term of this Agreement shall begin on January 1, 2000 and shall continue until December 31, 2001, unless sooner terminated as provided in paragraph 2 below. 2. Termination. Should you voluntarily terminate your employment or should your employment be terminated for cause, Ramtron shall be relieved of all of its obligations provided herein including, but not limited to, its obligation to pay you the salary provided in paragraph 3 below. Termination for cause shall include chronic absenteeism (not due to physical or mental illness, not constituting permanent disability, habitual alcoholism, drug abuse or addiction); the commission of a felony or fraud on Ramtron, its employees, customers, stockholders, or vendors; misappropriation of any money or other assets or properties of Ramtron, its employees, customers, stockholders or vendors; violation of reasonable, specific and lawful directions received from Ramtron's Board of Directors and/or CEO, in connection with and pertaining to your duties President and COO; or the unauthorized disclosure or use of any Ramtron trade secrets or financial information or data which results, or is likely to result, in injury or damage to Ramtron. Upon termination of this Agreement, you shall be paid your regular salary and accrued vacation time, if any, up to the termination date less applicable income tax withholdings and any other lawful off set for charges or indebtedness which may be owed by you to Ramtron or both. If Ramtron terminates your employment for any reason other than cause during the term of this Agreement, then Ramtron shall be obligated to continue to pay you the salary provided in paragraph 3 below until such term expires. IT IS EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH RAMTRON IS AN EMPLOYMENT "AT WILL" SITUATION. 3. Salary. The salary to be paid by Ramtron to you shall be SIXTEEN THOUSAND SIX HUNDRED SIXTY-SIX DOLLARS AND SIXTY-SIX CENTS ($16,666.66) per month ($200,000.00 per annum), which amount shall be paid in equal installments on or about the 15th and 30th of each month. All such payments shall be subject to withholding and other applicable taxes. Page-206 4. Ownership of Documents, Patents and Copyrights. Any documents, inventions or copyrightable material that you may prepare while employed by Ramtron shall be subject to the non-disclosure and assignment requirements provided in the Invention and Non-Disclosure Agreement between you and Ramtron dated January 2, 1995. The termination or expiration of this Agreement shall have no affect on your duties and obligations as provided in said Invention and Non-Disclosure Agreement. 5. Change of Ownership. If during the term of this contract, a change of ownership of Ramtron or the business segment with which you are associated (defined as the sale or transfer of > 50% of the assets or stock to a single new owner) occurs and your employment hereunder is not continued (or an equivalent job is not offered to you with the new entity), then you shall be entitled to a severance package that would include: Your salary until departure date Any unpaid expense reimbursement Accrued vacation pay One year's salary to be paid in one lump sum or monthly over 12 months at the discretion of the Company 6. Arbitration. Should any dispute arise under this Agreement or out of its termination or cancellation, the matter shall be submitted to and decided by arbitration. The arbitration shall be held at a mutually agreeable location within the State of Colorado and shall be held in accordance with the terms and conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13- 22-201. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 8. Severability. In case any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby. 9. Assignability and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon your successors, assigns and legal representatives and the successors and assigns of Ramtron. Except as set forth in paragraph 10 below, neither party may assign, transfer, pledge, encumber or otherwise dispose of this Agreement or any rights or obligations hereunder, and any such attempt at delegation or disposition shall be null and void and without effect. 10. Complete Agreement; Modification; Waiver. This Agreement constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof. This Agreement shall not be altered, modified or amended except by written instruments signed by each of the parties hereto. Waivers of any provision contained herein or any default hereunder shall only be effective if in writing and signed by the party to be charged therewith. Any written waiver shall not operate or be construed as a waiver of any or other subsequent breach or default by any party. Page-207 Please indicate your agreement to the foregoing by signing below. Sincerely, /S/ L. David Sikes L. David Sikes Chairman and CEO LDS/klb This Agreement is hereby agreed to and accepted, effective as of January 1, 2000. /S/ Greg B. Jones March 3, 2000 - ----------------------- ------------- Greg B. Jones Date Page-208 EX-10.37 14 EMPLOYMENT AGREEMENT February 24, 2000 Ms. LuAnn D. Hanson 385 Palm Springs Drive Colorado Springs, Colorado 80921 Dear Ms. Hanson: This letter agreement ("Agreement") sets forth our agreement to the terms of your continued employment with Ramtron International Corporation ("Ramtron"). 1. Term. The term of this Agreement shall begin on January 1, 2000 and shall continue until December 31, 2001, unless sooner terminated as provided in paragraph 2 below. 2. Termination. Should you voluntarily terminate your employment or should your employment be terminated for cause, Ramtron shall be relieved of all of its obligations provided herein including, but not limited to, its obligation to pay you the salary provided in paragraph 3 below. Termination for cause shall include chronic absenteeism (not due to physical or mental illness, not constituting permanent disability, habitual alcoholism, drug abuse or addiction); the commission of a felony or fraud on Ramtron, its employees, customers, stockholders, or vendors; misappropriation of any money or other assets or properties of Ramtron, its employees, customers, stockholders or vendors; violation of reasonable, specific and lawful directions received from Ramtron's Board of Directors and/or CEO, in connection with and pertaining to your duties Acting CFO and Vice President of Finance; or the unauthorized disclosure or use of any Ramtron trade secrets or financial information or data which results, or is likely to result, in injury or damage to Ramtron. Upon termination of this Agreement, you shall be paid your regular salary and accrued vacation time, if any, up to the termination date less applicable income tax withholdings and any other lawful off set for charges or indebtedness which may be owed by you to Ramtron or both. If Ramtron terminates your employment for any reason other than cause during the term of this Agreement, then Ramtron shall be obligated to continue to pay you the salary provided in paragraph 3 below until such term expires. IT IS EXPRESSLY ACKNOWLEDGED AND UNDERSTOOD THAT YOUR EMPLOYMENT WITH RAMTRON IS AN EMPLOYMENT "AT WILL" SITUATION. 3. Salary. The salary to be paid by Ramtron to you shall be TEN THOUSAND FOUR HUNDRED SIXTEEN DOLLARS AND SIXTY-SIX CENTS ($10,416.66) per month ($125,000.00 per annum), which amount shall be paid in equal installments on or about the 15th and 30th of each month. All such payments shall be subject to withholding and other applicable taxes. Page-209 4. Ownership of Documents, Patents and Copyrights. Any documents, inventions or copyrightable material that you may prepare while employed by Ramtron shall be subject to the non-disclosure and assignment requirements provided in the Invention and Non-Disclosure Agreement between you and Ramtron dated September 18, 1992. The termination or expiration of this Agreement shall have no affect on your duties and obligations as provided in said Invention and Non- Disclosure Agreement. 5. Change of Ownership. If during the term of this contract, a change of ownership of Ramtron or the business segment with which you are associated (defined as the sale or transfer of > 50% of the assets or stock to a single new owner) occurs and your employment hereunder is not continued (or an equivalent job is not offered to you with the new entity), then you shall be entitled to a severance package that would include: Your salary until departure date Any unpaid expense reimbursement Accrued vacation pay One year's salary to be paid in one lump sum or monthly over 12 months at the discretion of the Company 6. Arbitration. Should any dispute arise under this Agreement or out of its termination or cancellation, the matter shall be submitted to and decided by arbitration. The arbitration shall be held at a mutually agreeable location within the State of Colorado and shall be held in accordance with the terms and conditions outlined in the Colorado Uniform Arbitration Act, C.R.S. Section 13- 22-201. 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. 8. Severability. In case any one or more of the provisions of this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby. 9. Assignability and Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon your successors, assigns and legal representatives and the successors and assigns of Ramtron. Except as set forth in paragraph 10 below, neither party may assign, transfer, pledge, encumber or otherwise dispose of this Agreement or any rights or obligations hereunder, and any such attempt at delegation or disposition shall be null and void and without effect. 10. Complete Agreement; Modification; Waiver. This Agreement constitutes the complete agreement and understanding between the parties with respect to the subject matter hereof. This Agreement shall not be altered, modified or amended except by written instruments signed by each of the parties hereto. Waivers of any provision contained herein or any default hereunder shall only be effective if in writing and signed by the party to be charged therewith. Any written waiver shall not operate or be construed as a waiver of any or other subsequent breach or default by any party. Page-210 Please indicate your agreement to the foregoing by signing below. Sincerely, /S/ L. David Sikes L. David Sikes Chairman and CEO LDS/klb This Agreement is hereby agreed to and accepted, effective as of January 1, 2000. /S/ Luann D. Hanson March 6, 2000 - ---------------------------- ------------- LuAnn D. Hanson Date Page-211 EX-23.1 15 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report dated February 4, 2000, included in this Form 10-K, into Ramtron International Corporation's previously filed Registration Statement File No. 333-12265 on Form S-8 and Registration Statement File Nos. 33-80411, 333-19119, 333-47615, 333-87107 and 333-95209 on Form S-3. /S/ Arthur Andersen LLP Denver, Colorado, March 29, 2000 Page-212 EX-27.1 16 FDS
5 1,000 YEAR DEC-31-1999 DEC-31-1999 10,601 0 2,050 347 4,174 16,662 23,314 17,250 29,380 9,377 0 914 0 146 13,177 29,380 18,170 24,871 14,036 30,696 514 0 914 (6,198) 0 (6,198) 0 0 4,163 (2,035) (.16) (.16)
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