FIRST AMENDMENT TO
PLAN OF REORGANIZATION AND AGREEMENT OF MERGER
THIS FIRST AMENDMENT (the "AMENDMENT") to that certain Plan of
Reorganization and Agreement of Merger dated as of October 27, 1995 (the
"AGREEMENT") by and among OAK TECHNOLOGY, INC., a Delaware corporation
("OAK"), OAK ACQUISITION CORPORATION, a Massachusetts corporation, PIXEL
MAGIC, INC., a Massachusetts corporation ("PIXEL"), and the then shareholders
of Pixel (the "SHAREHOLDERS") is entered into as of June 25, 1996 by and
among Oak, Pixel and the Agents (as defined in the Agreement) appointed by
the Shareholders. All capitalized terms used but not defined in this
Amendment have the meanings attributed to them in the Agreement.
R E C I T A L S
Subject to the limitations set forth in the Agreement and pursuant to
Sections 2.4 and 2.6 thereof, Oak agreed to make a quarterly payment, defined in
the Agreement as the "CONTINGENT PAYMENT," to the Security Holders based on
Operating Income of Pixel for a calendar quarter determined on a calendar year
to date basis, which Operating Income expressly excludes operating income
attributable to any VCEP Products contributed by Oak to Pixel.
Oak and Pixel now desire that operating income attributable to New
VCEP Product Business be included in Operating Income.
Oak and Pixel desire that $312,500 attributable to VCEP Products be
included in Operating Income for calendar year 1996, but that such amount not be
subject to doubling as provided in Section 2.6 of the Agreement.
Oak and Pixel desire that all operating income attributable to New
VCEP Product Business for calendar years 1996,1997 and 1998 be included in
Operating Income in the applicable years and that such amounts be subject to
doubling as provided in Section 2.6 of the Agreement.
This Amendment is being executed by the Agents on behalf of the
Shareholders subject to the authority granted to the Agents pursuant to Section
9.1 of the Agreement.
NOW, THEREFORE, in reliance on the foregoing recitals and in consideration
of the mutual covenants and agreements contained herein, the parties hereto
agree as follows:
A G R E E M E N T
1. AMENDMENT OF SECTION 1.29 OF THE AGREEMENT. The first sentence of
Section 1.29 of the Agreement is hereby amended and restated in its entirety to
read as follows:
1.29 "OPERATING INCOME" means operating income of
Pixel (including operating income attributable to New VCEP
Product Business), as determined in accordance with GAAP
consistently applied with the Pixel Annual
Oak Technology, Inc./Pixel Magic, Inc.
First Amendment to Agreement and Plan of
Reorganization for Merger
Page 2
Financials, adjusted to exclude for calendar year 1996 only
operating income attributable to any VCEP Products
contributed by Oak to Pixel; provided however, that
Operating Income for the third (3rd) quarter of calendar
year 1996 shall include the amount of One Hundred and Fifty-
Six Thousand Two Hundred and Fifty Dollars ($156,250) as
operating income for VCEP Products and that Operating Income
for the fourth (4th) quarter of calendar year 1996 shall
include the amount of One Hundred and Fifty-Six Thousand Two
Hundred and Fifty Dollars ($156,250) as operating income for
VCEP Products.
2. NEW SECTION OF THE AGREEMENT. A new Section 1.58 shall be
added as follows:
1.58 "New VCEP Product Business" means revenue
attributable to design wins for VCEP Product awarded in
calendar years 1996, 1997 and 1998. New VCEP Product
Business shall include designs which use the VCEP-30 (TSMC
30 Mhz Version of the VCEP) but will not include existing
VCEP designs which use and/or transistion to the TSMC 20 Mhz
version of the VCEP.
3. AMENDMENT OF SECTION 2.61 OF THE AGREEMENT. The first sentence of
Section 2.61 of the Agreement is hereby amended and restated in its entirety to
read as follows:
2.61 Subject to reduction pursuant to Section 7.4, Oak shall pay to
Security Holders, for calendar years 1996, 1997 and 1998 only, two
hundred percent (200%) of Operating Income in excess of the relevant
Threshold Amounts for such calendar years, up to a maximum aggregate
amount of Five Million Dollars ($5,000,000) for all three (3) calendar
years, except that for calendar year 1996, for purposes of this
section only, Operating Income shall be reduced by One Hundred and
Fifty-Six Thousand Two Hundred and Fifty Dollars ($156,250).
EFFECT OF THIS AMENDMENT. Except as expressly set forth in this
Amendment, all the provisions of the Agreement remain in full force and effect
in accordance with the terms of the Agreement.
GOVERNING LAW. It is the intention of the parties hereto that the
internal laws of the Commonwealth of Massachusetts (irrespective of its choice
of law principles) shall govern the validity of this Amendment, the construction
of its terms, and the interpretation and enforcement of the rights and duties of
the parties hereto.
Oak Technology, Inc./Pixel Magic, Inc.
First Amendment to Agreement and Plan of
Reorganization for Merger
Page 3
COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
OAK: PIXEL:
OAK TECHNOLOGY, INC., PIXEL MAGIC, INC.,
a Delaware corporation a Massachusetts corporation
By:_____________________________ By:_____________________________
Title:__________________________ Title:__________________________
By:_____________________________
Title:__________________________
AGENTS:
________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
SECOND AMENDMENT TO
PLAN OF REORGANIZATION AND AGREEMENT OF MERGER
THIS SECOND AMENDMENT (the "AMENDMENT") to that certain Plan of
Reorganization and Agreement of Merger dated as of October 27, 1995 (the
"AGREEMENT") by and among OAK TECHNOLOGY, INC., a Delaware corporation
("OAK"), OAK ACQUISITION CORPORATION, a Massachusetts corporation, PIXEL
MAGIC, INC., a Massachusetts corporation ("PIXEL"), and the then shareholders
of Pixel (the "SHAREHOLDERS"), as amended by that certain First Amendment to
the Agreement entered into in June 1996 (the "FIRST AMENDMENT"), is entered
into effective as of June 13, 1997 by and among Oak, Pixel and the Agents (as
defined in the Agreement) appointed by the Shareholders. All capitalized
terms used but not defined in this Amendment have the meanings attributed to
them in the Agreement.
R E C I T A L S
A. Subject to the limitations set forth in the Agreement and pursuant to
Sections 2.4 and 2.6 thereof, Oak agreed to make certain quarterly payments up
to a maximum aggregate amount of Five Million Dollars ($5,000,000), originally
defined in the Agreement as the "Contingent Payment," to the Security Holders
based on Operating Income of Pixel for a calendar quarter determined on a
calendar year-to-date basis, excluding operating income attributable to any VCEP
Products contributed by Oak to Pixel.
B. Pursuant to the terms of the First Amendment, Oak and Pixel agreed to
include in Operating Income, commencing in calendar year 1996, operating income
attributable to New VCEP Product Business contributed by Oak to Pixel (with
certain additional operating income attributable to VCEP Products to be included
in calendar year 1996 in accordance with the terms of the First Amendment).
C. Oak, Pixel and the Agents now desire to modify the Agreement, as
amended by the First Amendment, to provide for payment of the Contingent Payment
in two installments and to eliminate all contingencies affecting payment of the
amounts provided for under the original terms of the Contingent Payment, in
accordance with the terms set forth in this Amendment.
D. In consideration of the elimination of all contingencies affecting
payment of the amounts provided for under the original terms of the Contingent
Payment, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ have agreed to an early
termination of their respective Employment Agreements, each dated as of
November 6, 1995, and ▇▇▇▇▇ ▇. ▇▇▇▇▇ has agreed to be bound by the terms of his
Non-Compete and Technology Transfer Agreements dated as of October 27, 1995, for
an additional two years.
E. This Amendment is being executed by the Agents on behalf of the
Shareholders subject to the authority granted to the Agents pursuant to Section
9.1 of the Agreement.
NOW, THEREFORE, in reliance on the foregoing recitals and in consideration
of the mutual covenants and agreements contained herein, the parties hereto
agree as follows:
Oak Technology, Inc./Pixel Magic, Inc.
Second Amendment to Agreement and Plan of
Reorganization for Merger
Page 2
A G R E E M E N T
1. DELETION OF CERTAIN DEFINITIONS. Sections 1.2, 1.6, 1.18, 1.29, 1.33,
1.47 and 1.55 are hereby deleted in their entirety.
2. DELETION OF SECTION 2.1.3 OF THE AGREEMENT. Section 2.1.3 of the
Agreement is hereby deleted in its entirety.
3. AMENDMENT AND RESTATEMENT OF SECTION 2.4 OF THE AGREEMENT. Section
2.4 of the Agreement is hereby amended and restated in its entirety to read as
follows:
2.4 EXCHANGE CONSIDERATION. Subject to adjustment as set forth
in Section 7.4 hereof, and subject to the terms and conditions stated
herein, the Shareholders and Option Holders will receive cash in the
aggregate amount of up to Ten Million Five Hundred Thousand Dollars
($10,500,000), consisting of a non-contingent payment (the
"NON-CONTINGENT PAYMENT") of Five Million Five Hundred Thousand Dollars
($5,500,000), plus installment payments (individually, an "INSTALLMENT
PAYMENT" and collectively, the "INSTALLMENT PAYMENTS") in the aggregate
amount of Five Million Dollars ($5,000,000), payable as provided in Section
2.6 below. All amounts payable pursuant to this Section 2.4 are
collectively referenced hereafter as the "EXCHANGE CONSIDERATION."
4. AMENDMENT AND RESTATEMENT OF SECTION 2.6 OF THE AGREEMENT. Section
2.6 of the Agreement is hereby amended and restated in its entirety to read as
follows:
2.6 TERMS OF INSTALLMENT PAYMENTS. Subject to the provisions of
this Agreement, Oak shall make Installment Payments to the Security
Holders as set forth in this Section 2.6. On January 1, 1998, Oak
shall pay to the Security Holders, subject to Oak's right of set-off
under Section 7.4 of this Agreement, an Installment Payment in an
aggregate amount equal to Three Million Dollars ($3,000,000). On
December 31, 1998, Oak shall pay to the Security Holders, subject to
Oak's right of set-off under Section 7.4 of this Agreement, an
Installment Payment in an aggregate amount equal to Two Million
Dollars ($2,000,000). The amounts payable to the Security Holders
pursuant to this Section 2.6 shall be allocated among the Security
Holders in accordance with the provisions set forth in Section 2.7
below.
5. DEFINITION OF "CONTINGENT PAYMENT". The term "Contingent Payment,"
wherever used in the Agreement or in the Transaction Documents, shall mean any
Installment Payment or the Installment Payments as the context may require.
Oak Technology, Inc./Pixel Magic, Inc.
Second Amendment to Agreement and Plan of
Reorganization for Merger
Page 3
6. AMENDMENT OF SECTION 10.13 OF THE AGREEMENT. The first sentence of
Section 10.13 of the Agreement is hereby amended and restated in its entirety to
read as follows:
From and after the Effective Date, Pixel hereby
unconditionally guarantees payment by Oak of any and all
amounts due under this Agreement and Oak hereby
unconditionally guarantees payment by Pixel of any and all
amounts due under this Agreement.
7. DELETION OF SECTION 10.14 OF THE AGREEMENT. Section 10.14. of the
Agreement is hereby deleted in its entirety.
8. DELIVERY OF AGREEMENTS. The obligations of Oak hereunder shall be
conditioned upon execution and delivery by ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
of agreements terminating their respective Employment Agreements in the forms
attached hereto as Exhibits "A-1" and "A-2," and execution and delivery by ▇▇▇▇▇
▇. ▇▇▇▇▇ of an amendment to his respective Non-Compete and Technology Transfer
Agreement in the form attached hereto as Exhibit "B-1".
9. EFFECT OF THIS AMENDMENT. Except as expressly set forth in this
Amendment, all the provisions of the Agreement and the Transaction Documents,
and any amendments thereto, remain in full force and effect in accordance with
the terms thereof. In this regard, this Amendment supersedes in its entirety
the provisions of the First Amendment.
10. GOVERNING LAW. It is the intention of the parties hereto that the
internal laws of the Commonwealth of Massachusetts (irrespective of its choice
of law principles) shall govern the validity of this Amendment, the construction
of its terms, and the interpretation and enforcement of the rights and duties of
the parties hereto.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Oak Technology, Inc./Pixel Magic, Inc.
Second Amendment to Agreement and Plan of
Reorganization for Merger
Page 4
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
OAK: PIXEL:
OAK TECHNOLOGY, INC., PIXEL MAGIC, INC.,
a Delaware corporation a Massachusetts corporation
By:_______________________________ By:________________________________
Title:____________________________ Title:_____________________________
AGENTS: By:________________________________
Title:_____________________________
__________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
__________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
