Cypress Semiconductor Corporation
Annual Report 2018

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549__________________________________________Form 10-K__________________________________________(Mark One)xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 30, 2018Or¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to .Commission file number: 1-10079__________________________________________ Cypress Semiconductor Corporation(Exact name of registrant as specified in its charter)__________________________________________Delaware 94-2885898(State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.)198 Champion Court, San Jose, California 95134(Address of principal executive offices and zip code)Registrant’s telephone number, including area code: (408) 943-2600Securities registered pursuant to Section 12(b) of the Act:Title of Each Class Name of Each Exchange on Which RegisteredCommon Stock, $.01 par value The Nasdaq Global Select MarketSecurities registered pursuant to Section 12(g) of the Act: None__________________________________________Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes ¨ NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes x NoIndicate 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 thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. x Yes ¨ NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-Tduring the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes ¨ NoIndicate 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 ofregistrant’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. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerginggrowth company. See the definitions of “larger accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of theExchange Act.Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ Emerging growth company ¨If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revisedfinancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes x NoThe market value of voting and non-voting common stock held by non-affiliates of the registrant, based upon the closing sale price of the common stock on July 1, 2018as reported on the Nasdaq Global Select Market, was approximately $4.4 billion. Shares of common stock held by each executive officer and director and by each person whoowns 5% or more of the outstanding common stock have been excluded from the foregoing calculation in that such persons may be deemed affiliates. This determination ofaffiliate status is not necessarily a conclusive determination for other purposes.As of February 20, 2019, 363,878,456 shares of the registrant’s common stock were outstanding.DOCUMENTS INCORPORATED BY REFERENCEPortions of the registrant's Definitive Proxy Statement for its 2019 Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 30, 2018 areincorporated by reference in Items 10 - 14 of Part III of this Annual Report on Form 10-K.TABLE OF CONTENTS Page PART I Item 1Business5Item 1ARisk Factors13Item 1BUnresolved Staff Comments30Item 2Properties31Item 3Legal Proceedings31Item 4Mine Safety Disclosures31 PART II Item 5Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities32Item 6Selected Financial Data33Item 7Management’s Discussion and Analysis of Financial Condition and Results of Operations35Item 7AQuantitative and Qualitative Disclosure About Market Risk49Item 8Financial Statements and Supplementary Data52Item 9Changes in and Disagreements with Accountants on Accounting and Financial Disclosures114Item 9AControls and Procedures114Item 9BOther Information115 PART III Item 10Directors, Executive Officers and Corporate Governance116Item 11Executive Compensation116Item 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters116Item 13Certain Relationships and Related Transactions and Director Independence116Item 14Principal Accountant Fees and Services117 PART IV Item 15Exhibits and Financial Statement Schedule118Item 16Form 10-K Summary118Signatures and Power of Attorney1253Cautionary Note Regarding Forward-Looking StatementsThis Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not historicalfacts and include statements relating to, among other things, the future results, operations, strategies, and prospects of Cypress SemiconductorCorporation and its consolidated subsidiaries ("Cypress," the "Company," "we," or "us"), and can in some cases be identified by our use of wordssuch as "may," "will," "should," "plan," "anticipate," "believe," "expect," "future," "intend," "estimate," "predict," "potential," "continue," and similarexpressions. This Annual Report includes, among others, forward-looking statements regarding: our expectations regarding dividends, debtrepayments, and stock repurchases; our expectations regarding restructuring plan costs and effects; our expectations regarding active litigationmatters; the sufficiency of our cash, cash equivalents, and borrowing arrangements to meet our requirements for the next 12 months; possiblerecognition of certain unrecognized tax benefits within the next 12 months; and the potential impact of our indemnification obligations. Our forward-looking statements are based on the expectations, beliefs and intentions of, and the information available to, our executive management on thefiling date of this Annual Report. Readers are cautioned not to place undue reliance on forward-looking statements. Except as required by law, weassume no responsibility to update our forward-looking statements.The forward-looking statements in this Annual Report involve risks and uncertainties. Important factors that could cause actual results to differmaterially from those in the forward-looking statements include, but are not limited to: potential disruptions in the international trade and investmentenvironment, including deteriorating relationships between the U.S. government and foreign governments; the current and future state of thegeneral economy and its impact on the markets and consumers we serve (including credit conditions); our ability to execute on our Cypress 3.0strategy and our margin improvement plan; potential volatility in our stock price; risks related to paying down our indebtedness and meeting thecovenants set forth in our debt agreements; our efforts to retain and expand our customer base (which may be adversely affected if we were toraise prices) in the intensely competitive and rapidly evolving semiconductor industry; risks related to significant supply and demand volatility insemiconductor markets (including the challenges of forecasting demand, scheduling production, and making timely delivery on customer orders);risks related to our strategy of developing and maintaining a leading portfolio of programmable microcontroller, connectivity and memory products;risks related to our flexible manufacturing strategy (and the challenge of efficiently managing a smaller number of manufacturing facilities whileincreasing our reliance on third-party manufacturers); our reliance on distributors and resellers; risks related to our "take or pay" agreements withcertain vendors; the risk of defects, errors, or security vulnerabilities in our products; risks related to the integrity of our information systems,including the possibility of cyber-attacks, business-activity disruption, and loss or corruption of sensitive data; changes in tax law and policy; risksrelated to our pending tax examinations; risks related to our tax incentive/holiday arrangements in Malaysia and Thailand; our efforts to remediateany material weakness in our internal control over financial reporting; potential lack of liquidity for certain strategic investments (including thechallenge of disposing of businesses, product lines, or assets on favorable terms in a timely manner); risks related to our restructuring activities;the failure or success of the privately-held companies in which we are invested; the challenges of effectively integrating companies and assetsthat we acquire; the possibility of impairment charges; the challenges of attracting and retaining key personnel; risks related to our reliance onstock-based compensation; possible changes to our dividend policy; risks related to our share repurchase authorization; the uncertain nature ofbusiness outlook guidance; risks related to industry consolidation and the challenge of competing effectively against a smaller number of strongercompanies; the challenges of adequately protecting our intellectual property rights and risks of intellectual property litigation; the possibilities thatactivist stockholders could negatively affect our business and that our deferred tax assets could be negatively impacted by changes in ourstockholder base; risks associated with international operations; the challenges and costs of complying with environmental, data privacy,health/safety, and other laws; risks related to "conflict minerals" reporting; the possibility of business disruptions due to natural disasters; risksarising from indemnification commitments to our officers and directors; our ability to manage our financial investments and interest rate andexchange rate exposure; and the uncertainty and expense of pending litigation matters. These and other factors are described in more detail inPart I, Item 1A (Risk Factors) of this Annual Report.4PART IITEM 1. BusinessGeneralCypress manufactures and sells advanced embedded system solutions for automotive, industrial, consumer and enterprise end markets. Cypress'microcontrollers, analog ICs, wireless and wired connectivity solutions and memories help engineers design differentiated products and help withspeed to market. Cypress is committed to providing customers with quality support and engineering resources. Cypress was incorporated in California in December 1982 and reincorporated in Delaware in September 1986. Our stock is listed on the NasdaqGlobal Select Market under the ticker symbol “CY”.Our corporate headquarters are located at 198 Champion Court, San Jose, California 95134, and our main telephone number is (408) 943-2600. Wemaintain a website at www.cypress.com. The contents of our website are not incorporated into, or otherwise to be regarded as part of, this AnnualReport on Form 10-K.Our fiscal 2018 ended on December 30, 2018, fiscal 2017 ended on December 31, 2017, and fiscal 2016 ended on January 1, 2017.Acquisitions & DivestituresIn July 2016, we completed the acquisition of certain assets primarily related to the wireless Internet of Things ("wireless IoT business") ofBroadcom Corporation ("Broadcom") pursuant to an Asset Purchase Agreement with Broadcom dated April 28, 2016, for a total purchaseconsideration of $550 million.In March 2017, we completed the sale of our wafer fabrication facility in Minnesota.In August 2018, we completed the acquisition of an embedded software company focused on the IoT market for cash consideration of $3 million.In October 2018, we signed a definitive agreement to transfer our NAND flash business to a joint venture ("JV") with SK hynix system ic Inc("SKHS"). The transaction is subject to customary closing conditions and regulatory approvals. We presently expect that the transaction will becompleted by the end of the first quarter of fiscal 2019. In addition to our NAND flash business, we will contribute $2.4 million in cash towards theequity of the JV. We will own 40% of the JV’s common stock. The NAND business is presently reported as part of the MPD segment. Werecognized $167.3 million, $168.1 million and $180.5 million in revenue from the NAND business for the years ended December 30, 2018,December 31, 2017 and January 1, 2017, respectively.Business StrategyDuring fiscal 2016, we launched various long-term strategic corporate transformative initiatives, which we collectively refer to as "Cypress 3.0".Cypress 3.0 objectives are designed to increase our focus on becoming a solution-driven company by capitalizing on our broad product portfolio toextend our penetration into global markets such as the automotive, industrial, consumer, and enterprise markets; increase ease of doing business;improve operating margin; redeploy personnel and resources to target market segments that are expected to grow faster than the semiconductorindustry; and streamline our internal processes.Our revenue and profitability model is based on the following product and market strategies: (a) focus on providing customers with completesolutions, including multiple Cypress products where applicable, and supporting software, (b) growing revenue from our programmable solutionsand derivatives, (c) increasing our connectivity revenue through the introduction of new products and (d) maintain profitability in our storageproducts by leveraging our market position and expanding our portfolio. We monitor our operating expenses closely to improve our operatingleverage as driven by various company-wide initiatives.As we continue to implement our strategies, there are many internal and external factors that could impact our ability to meet any or all of ourobjectives. Some of these factors are discussed under Item 1A Risk Factors.5Business SegmentsWe continuously evaluate our reportable business segments in accordance with the applicable accounting guidance. We currently operate undertwo reportable business segments: Microcontroller and Connectivity Division ("MCD") and Memory Products Division ("MPD"). Business Segments Description Microcontroller and Connectivity Division MCD focuses on connect and compute solutions for the Internet of Things and automotivesolutions that enhance the in-cabin user experience. MCD offerings include robust wirelessand wired connectivity solutions that combine with flexible, high-performance microcontroller(MCU) and analog solutions, backed with a focus on superior design software. The portfolioincludes Wi-Fi®, Bluetooth® and Bluetooth Low Energy solutions and wireless combosolutions; Traveo™ automotive MCUs, PSoC® programmable MCUs and general-purposeMCUs; CapSense® capacitive-sensing controllers and automotive TrueTouch® touchscreensolutions; a broad line of USB controllers, including solutions for the USB-C and USB PowerDelivery standards; and analog PMIC Power Management ICs. This division also includes ourintellectual property (IP) business. Memory Products Division MPD focuses on fail-safe storage and datalogging solutions for mission critical applications.The portfolio includes specialized, high-performance parallel and serial NOR flash memories,NAND flash memories, static random access memories (SRAM), F-RAM™ ferroelectricmemory devices, nonvolatile SRAMs (nvSRAM), and other specialty memories. This divisionalso includes our nonvolatile DIMM subsidiary AgigA Tech Inc. For additional information on our segments, see Note 22 of the Notes to Consolidated Financial Statements under Part II, Item 8.6Product OverviewThe following table summarizes the markets and certain applications related to our products in the MCD segment:Products Markets ApplicationsTraveo™ MCUs, Flexible MCUs,PSoC® MCUs,CapSense® capacitive-sensingcontrollers and AutomotiveTrueTouch® touchscreen controllers Automotive, industrial, consumer,computation, white goods,communications Automotive instrument clusters, body electronics, powermanagement and infotainment systems, factory automation,machine-to-machine systems, building management systems,smart meters, printers, industrial and automotive controlapplications, digital still and video cameras, smart homeappliances, handheld devices and accessories, desktop andnotebook PCs and peripherals, medical devices, white goodsand many other applications.Wi-Fi®, Bluetooth®, Bluetooth LowEnergy and combo solutions Automotive, industrial, consumer, whitegoods, home automation IoT applications, wearables, smart home appliances, homeautomation, industrial automation equipment, connected cars,appliances, wireless headsets, consumer electronics,gamepads, remote controls, toys, presenter tools and manyother applications.EZ-PD™ controllers for USB-C withPower Deliveryand USB controllers Industrial, handset, PC and peripherals,consumer electronics, mobile devices,automotive Automotive, printers, cameras, machine vision and otherindustrial equipment, handheld devices, VoIP phones,headsets, presenter tools, dongles, point of sale devices andbar code scanners, PCs and peripherals smartphones, USB-Cpower adapters, USB-C adapter cables, monitors, dockingstations and many other applications.Analog PMICs and energy harvestingsolutions Automotive, industrial, consumer Instrument cluster systems, Advanced Driver AssistanceSystems (ADAS), body control modules, factory automation,IoT beacons, wireless sensor nodes and many otherapplications.7The following table summarizes the markets and applications related to our products in the MPD segment: Products Markets Applications NOR Flash and HyperFlash™ Automotive, industrial Automotive advanced driver assistance systems (ADAS),automotive instrument cluster, automotive infotainmentsystems, security systems, industrial control andautomation systems, networking routers and switches andmany other applications. NAND Flash Consumer, Networking, Industrial,Automotive Set-top-boxes, networking modems, networking equipment,audio systems/smart speakers, automotive infotainmentsystems, point-of-sale systems, consumer and industrialsecurity camera systems, industrial control and automationsystems, smart home appliances, and many otherapplications. RAM: Asynchronous and SynchronousSRAM, HyperRAM™, F-RAM and nySRAM Automotive, industrial, networking,medical, telecommunications Automotive systems, industrial control and factoryautomation systems, enterprise switches and routers,servers, smart meters, aerospace and defense, medicalsystems, point-of-sale terminals, gaming, printers, and testequipment. Specialty Memories and Clocks Networking, telecommunication, video,data communications, computation Medical and instrumentation, storage, wirelessinfrastructure, military communications, video, datacommunications, telecommunications, and networkswitching/routing, set-top boxes, copiers, printers, HDTV,industrial automation, printers, single-board computers, IPphones, and image processors. ManufacturingOur "flexible manufacturing" strategy combines capacity from external foundries with output from our internal manufacturing facilities which allowsus to meet fluctuations in customer demand while limiting capital expenditure requirements and lessening the burden of high fixed costs, acapability that is important with our rapidly evolving product portfolio and revenue growth.As of the end of fiscal year 2018, we owned a wafer fabrication facility in Austin, Texas. External wafer foundries, mainly in Asia, manufacturedapproximately 63% of our wafers (8 inch equivalent).We conduct assembly and test operations at our back-end manufacturing facilities in Cavite, Philippines and Bangkok, Thailand, which contributeto better leverage of manufacturing cost. External assembly and test subcontractors in Asia account for approximately 72% of the total assemblyoutput and 62% of the total test output. Various assembly and test subcontractors in Asia perform the balance of the assembly and testoperations.We have manufacturing services agreements primarily with the following partners:•Advanced Semiconductor Engineering, Inc. ("ASE") - Agreements for chip scale packing services;•Amkor J Devices - Agreements for assembly and test services;•Deca Technologies Inc. - Agreement for chip scale packaging services.•Fujitsu Semiconductor Limited - Agreements for foundry, sort and assembly and test services;•HuaHong Grace Semiconductor Manufacturing Corporation ("Grace") - Agreement for foundry services;•Semiconductor Manufacturing International Corporation ("SMIC") - Agreements for foundry services;•Skywater Technologies Inc. - Agreement for foundry services;•Taiwan Semiconductor Manufacture Company ("TSMC") - Agreement for foundry services;•United Microelectronics Corporation ("UMC") - Agreement for foundry services;8•United Test and Assembly Center Ltd - Agreement for assembly and test services; and•Wuhan Xinxin Semiconductor Manufacturing Corporation ("XMC") - Agreement for foundry services.Sales and MarketingWe sell our semiconductor products through several channels: distributors; manufacturing representative firms; and sales by our sales forcedirectly to original equipment manufacturers and their suppliers.Our marketing activities target customers, reference design houses and our potential partners; and include a variety of direct marketing activities,such as trade shows, events and sponsored activities. We augment our sales effort with field application engineers, specialists in our products,technologies and services who work with customers to design our products into their systems. Field application engineers also help us identifyemerging markets and new products.Outstanding accounts receivable from Fujitsu Electronics Inc., one of our distributors accounted for 25% of our consolidated accounts receivableas of December 30, 2018 and 28% of our consolidated accounts receivable as of December 31, 2017.Revenue generated through Fujitsu Electronics Inc. and Arrow Electronics, two of our distributors, accounted for 18% and 14%, respectively, ofour consolidated revenues for fiscal 2018, and 20% and 13% of our consolidated revenues for fiscal 2017, respectively. Revenue generatedthrough Fujitsu Electronics Inc., one of our distributors, accounted for 23% of our consolidated revenues for fiscal 2016. No other distributor orend-customer accounts for 10% or more of our revenue.BacklogOur sales typically rely upon standard purchase orders for delivery of products with relatively short delivery lead times. Customer relationships aregenerally not subject to long-term contracts. Although we have entered into long-term supply agreements with certain customers, products to bedelivered and the related delivery schedule under these long-term contracts are frequently revised. Accordingly, we believe that our backlog is nota meaningful indicator of future revenues.CompetitionThe semiconductor industry is intensely competitive and continually evolving. This intense competition results in a challenging operatingenvironment for most companies in this industry. This environment is characterized by the potential erosion of sale prices over the life of eachproduct, rapid technological change, limited product life cycles, and strong domestic and foreign competition in many markets. Our ability tocompete successfully depends on many factors, including:•our success in developing new products and manufacturing technologies;•delivery, performance, quality and price of our products;•diversity of our products and timeliness of new product introductions;•cost effectiveness of our design, development, manufacturing and marketing efforts;•quality of our customer service, relationships and reputation;•overall success with which our customers market and sell their products and solutions that incorporate our products; and•number and nature of our competitors and general economic conditions.We face competition from domestic and foreign semiconductor manufacturers, many of which have advanced technological capabilities andgreater brand recognition and have increased their participation in the markets in which we operate. We compete with a large number of companiesprimarily in the automotive, industrial, consumer, and enterprise markets. Companies that compete directly with our businesses include, but arenot limited to, Adesto, Everspin Technologies, Fujitsu, GigaDevice Semiconductor, GSI Technology, Hynix, Integrated Silicon Solution, Macronix,Marvell, MediaTek, Microchip Technology, Micron Technology, Nordic Semiconductor, NXP Semiconductors NV, Qualcomm, Realtek, Renesas,Richtek, Semtech, Silicon Laboratories, ST Microelectronics, Texas Instruments, Toshiba, VIA Labs, XMC and Winbond.Environmental Regulations9We use, generate and discharge hazardous chemicals and waste in our research and development and manufacturing activities. United Statesfederal, state and local jurisdictions, in addition to the foreign countries in which we operate, impose various environmental rules and obligations,which are becoming increasingly stringent over time, intended to protect the environment and in particular to regulate the management anddisposal of hazardous substances. We also face increasing complexity in our product design as we adjust to new and future requirements relatingto the materials composition of our products, including the restrictions on lead and other hazardous substances that apply to specified electronicproducts put on the market in the European Union (Restriction on the Use of Hazardous Substances Directive 2002/95/EC, also known as the“RoHS Directive”) and similar legislation in China and California. We are committed to the continual improvement of our environmental systemsand controls. However, we cannot provide assurance that we have been, or will at all times be, in complete compliance with all environmental lawsand regulations. Other laws impose liability on owners and operators of real property for any contamination of the property even if they did notcause or know of the contamination. While to date we have not experienced any material adverse impact on our business from environmentalregulations, we cannot provide assurance that environmental regulations will not impose expensive obligations on us in the future, or otherwiseresult in the incurrence of liabilities such as the following:•a requirement to increase capital or other costs to comply with such regulations or to restrict discharges;•liabilities to our employees and/or third parties; and•business interruptions as a consequence of permit suspensions or revocations, or as a consequence of thegranting of injunctions requested by governmental agencies or private parties.Intellectual PropertyWe have an active program to obtain patent and other intellectual property protection for our proprietary technologies, products and otherinventions that are aligned with our strategic initiatives. We rely on a combination of patents, copyrights, trade secrets, trademarks and proprietaryinformation to maintain and enhance our competitive position in the domestic and international markets we serve. As of the end of fiscal 2018, wehad approximately 3,450 issued patents and approximately 644 additional patent applications on file domestically and internationally. In addition, infiscal 2019 we are preparing to file up to 40 new patent applications in the United States and up to approximately 50 foreign applicationpredominantly in Europe and Asia. The average remaining life of our domestic patent portfolio is approximately 8.9 years.In addition to factors such as innovation, technological expertise and experienced personnel, we believe that patents are increasingly important toremain competitive in our industry, defend our position in existing markets and to facilitate the entry of our proprietary products into new markets.As our technologies are deployed in new applications and we face new competitors, we will likely subject ourselves to new potential infringementclaims and discover third-party infringement of our intellectual property. Patent litigation, if and when instituted against us, could result insubstantial costs and a diversion of our management’s attention and resources. We are committed to vigorously defending and protecting ourinvestment in our intellectual property. We believe the strength of our intellectual property program, including the breadth and depth of our portfolio,will be critical to our success, although, our business as a whole is not significantly dependent on any single patent, copyright, or other intellectualproperty right.In addition to developing patents based on our own research and development efforts, we license some patents from third parties, and we maypurchase or license additional patents from third parties. Established competitors in existing and new industries, as well as companies thatpurchase and enforce patents and other intellectual property, may obtain or already have patents that allegedly or otherwise cover products similarto ours. There is no assurance that we will be able to obtain patents covering our own products or that we will be able to obtain licenses from othercompanies on favorable terms or at all.We review our intellectual property portfolio from time to time to identify opportunities to derive additional value from our assets. We may considerselling certain patents that no longer align with our patent strategies as well as employ other monetization models for our patent portfolio. Fromtime to time we have divested patents that were not relevant to our current business. Divestiture of patents may lead to future contingent or non-contingent income.EmployeesAs of December 30, 2018, we had 5,846 employees. Geographically, 1,819 employees were located in the United States, 964 in the Philippines,924 in Thailand, 592 in India, 457 in Japan, 341 in Malaysia, 297 in Greater China,10242 in Europe, and 210 in other countries. Of the total employees, 3,220 employees were associated with manufacturing, 1,481 with research anddevelopment, and 1,145 with selling, general and administrative functions.Executive Officers of the Registrant as of December 30, 2018Certain information regarding each of our executive officers is set forth below: Name Age PositionHassane El-Khoury 39 President, Chief Executive Officer and DirectorThad Trent 51 Executive Vice President, Finance and Administration, and Chief Financial OfficerSudhir Gopalswamy 49 Executive Vice President, Microcontroller and Connectivity DivisionSam Geha 53 Executive Vice President, Memory Products DivisionPamela Tondreau 59 Executive Vice President, Chief Legal and Human Resources Officer, and Corporate Secretary Hassane El-Khoury has served as the president and chief executive officer of Cypress, and as a member of our Board of Directors, since August2016. He previously served as executive vice president of Cypress's Programmable Systems Division from 2012 to 2016, managing thecompany's standard and programmable microcontroller portfolio, including its Platform PSoC family of devices, and its automotive business. Priorto that, from 2010 to 2012, he served as a senior director of Cypress's automotive business unit. Prior to joining Cypress, Mr. El-Khoury served invarious engineering roles with subsystem supplier Continental Automotive Designs, where he spent time based in the U.S., Germany, and Japan.He holds a Bachelor of Science degree in electrical engineering from Lawrence Technological University and a master's degree in engineeringmanagement from Oakland University.Thad Trent has served as chief financial officer and executive vice president of finance & administration at the Company since June 2014. Mr.Trent joined Cypress in 2005 and became a vice president of finance in 2010. Prior to serving as chief financial officer, he led the strategicplanning functions for the Company’s business units and worldwide operations and he managed the financial reporting, accounting, and planningand analysis functions for the Company. Before joining the Company, Mr. Trent held finance leadership roles at publicly traded companies WindRiver Systems, a developer of embedded systems software, and Wyle Electronics, a distributor of high-tech electronic components, as well astwo technology startups. He currently serves on the boards of directors of AgigA Tech, Inc., which is a majority-owned Cypress subsidiary sellinghigh-performance non-volatile memory, and Deca Technologies Inc., one of our equity investees which is seeking to develop a fan-out wafer levelpackaging technology. Mr. Trent holds a Bachelor of Science degree in business administration and finance from San Diego State University.Sudhir Gopalswamy has served as executive vice president of the microcontroller and connectivity division at the Company since February 2018,having previously served as the senior vice president of MCD from September 2016 to February 2018. In his role, Mr. Gopalswamy is responsiblefor all aspects of the MCD business. Mr. Gopalswamy joined the Company in 2008 and has managed a variety of business units, including thetiming solutions business unit from 2009 to 2011, the synchronous SRAM business unit from 2011 to 2014, and the MCU business unit from 2014to 2016. Prior to joining the Company, Mr. Gopalswamy worked at Conexant Systems, Inc., a fabless semiconductor company, where he wasresponsible for the cable set-top box product line. Before Conexant, he spent nine years at Intel Corporation, one of the world's leadingsemiconductor companies, where he held management and leadership roles of increasing responsibility, spanning the computing,communications/networking, and consumer electronics segments. Mr. Gopalswamy holds a Bachelor of Science degree in electrical engineering(BSEE) from Purdue University and a Master of Business Administration degree from Duke University.Sam Geha, Ph.D., has served as executive vice president of the memory products division at the Company since February 2018, havingpreviously been the senior vice president of MPD from September 2016 to February 2018. Dr. Geha is responsible for all aspects of the MPDbusiness. Previously, he served as the senior vice president of the intellectual property (IP) business unit since June 2015, having managed theIP business unit since June 2013, where he oversaw licensing of the Company’s various embedded nonvolatile memory technologies (SONOS and11eCT) to foundries, including UMC, HLMC and HH-Grace, as well as licensing of the Company’s 3D NAND technology to XMC. Prior to that, heserved as vice president of the technology R&D organization since May 2007. Dr. Geha joined the Company in 1995 and has served as the seniordirector of technology development for SONOS and the director of technology development for MRAM and SRAM technologies. Prior to joining theCompany, he worked in various technology development functions at Motorola, a telecommunications equipment company, and NationalSemiconductor Corporation, a semiconductor manufacturer. Dr. Geha is currently a board member of one of the Company's equity investees,Enovix, a silicon-based lithium-ion battery start-up. He holds a Bachelor of Science degree in electrical engineering, a Master of Science degree inelectrical engineering, and a philosophical doctorate in electrical engineering from the University of Arizona.Pamela L. Tondreau serves as our executive vice president, chief legal and human resources officer, and corporate secretary. She has overseenall of Cypress's legal matters since joining the Company in October 2014, initially as interim general counsel, then as senior vice president andgeneral counsel starting in January 2015, then as senior vice president and chief legal officer starting in September 2016, and most recently asexecutive vice president and chief legal officer from February 2018 to the present. In addition, Ms. Tondreau assumed oversight responsibility forthe Company's human resources function in November 2017 and has served as our corporate secretary since January 2015. Prior to joining theCompany, Ms. Tondreau spent nearly 13 years at Hewlett-Packard Company (now HP Inc.), a multinational information technology company, invarious roles, including chief intellectual property counsel and deputy general counsel to the chief technology officer, HP labs, HP networking, IPlicensing, strategic initiatives and global alliances. In addition, she supported the chief marketing officer, the chief information officer and theexecutive vice president of personal systems, as well as serving as corporate secretary to the technology committee of Hewlett-Packard’s boardof directors. Prior to her time at Hewlett-Packard, Ms. Tondreau was an associate at the law firm of Thelen, Marrin, Johnson & Bridges (nowThelen LLP), serving as both a litigation and corporate attorney. She currently serves on the board of directors of AgigA Tech, Inc. Ms. Tondreauholds a bachelor’s degree from U.C. Berkeley and a J.D. degree from McGeorge School of Law.Available InformationWe make available our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to thosereports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, free of charge on ourwebsite at www.cypress.com, as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and ExchangeCommission (“SEC”). By referring to our website, we do not incorporate such website or its contents into this Annual Report on Form 10-K.Additionally, copies of materials filed by us with the SEC may be accessed at the SEC’s Public Reference Room at 100 F Street, N.E.,Washington, D.C. 20549 or at www.sec.gov. For information about the SEC’s Public Reference Room, contact 1-800-SEC-0330.12ITEM 1A.RISK FACTORSUnfavorable economic and market conditions, domestically and internationally, have affected and may in the future adversely affect ourbusiness, financial condition, results of operations and cash flows or may contribute to uncertainty of our business.We have significant customer sales both in the U.S. and internationally. We also rely on U.S. and international suppliers, manufacturing partnersand distributors. We are therefore susceptible to adverse U.S. and international economic and market conditions. If any of our manufacturingpartners, customers, distributors or suppliers experience serious financial difficulties or cease operations, our business will be adversely affectedand such effects may be material. In addition, the adverse impact of an unfavorable economy on consumers, including high unemployment rates,may adversely impact consumer spending, which would adversely impact demand for many end products in which our products are embedded.Any reduction in our customers' sales of their end-products, and/or any apprehension among our distributors and customers of a possible reductionin such sales, would likely cause an indirect negative impact on our own sales. Even prior to a widespread economic downturn, the relateduncertainty and the market's fear of deteriorating conditions might cause our distributors and customers to place fewer orders for our products.Moreover, commodity prices may be more volatile in times of economic turmoil. High or volatile commodity prices increase the cost of doingbusiness and adversely affect consumers' discretionary spending. As a result of the difficulty that businesses (including our customers) may havein obtaining credit and the decreased consumer spending that occurs during a recession, global economic turmoil (or uncertainty and apprehensionover the possibility of economic turmoil), are likely to have an adverse impact from time to time on our business, financial condition, results ofoperations and cash flows and such effects may be material.The trading price of our common stock has been and will likely continue to be volatile due to various factors, some of which are beyondour control, and each of which could adversely affect our stockholders’ value.The trading price of our common stock is influenced by various factors, some of which are beyond our control, including, but not limited to:•Revenue fluctuations due to unexpected shifts in customer demand;•Announcements about our earnings or the earnings of our competitors that are not in line with analyst expectations;•Our ability to execute on our long term strategic corporate transformation initiatives, collectively known as our Cypress 3.0 initiatives;•Credit conditions and our ability to refinance our existing debt at commercially reasonable terms, which may limit the Company’s workingcapital;•Quarterly variations in our results of operations or those of our competitors;•Announcements by us or our competitors of acquisitions, new products, significant contracts, design wins, commercial relationships orcapital commitments;•The perceptions of general market conditions in the semiconductor industry (including recent trends toward consolidation in thesemiconductor industry) and global market conditions;•Our ability to develop and market new and enhanced products on a timely basis;•Any major change in our board or senior management;•Changes in governmental regulations or in the status of our regulatory compliance that impact our business;•Recommendations by securities analysts or changes in earnings estimates concerning us or our customers or competitors;•The volume of short sales, hedging and other derivative transactions on shares of our common stock;•Economic conditions and growth expectations in the markets we serve;•Changes in our policy regarding dividends or our ability to declare a dividend;•Changes in our policy regarding stock repurchases or our ability to repurchase shares of our common stock;•Supply disruption or price increases from third-party manufacturing partners;•Our ability to generate sufficient cash flow to repay debt and•Litigation, including any disputes or legal proceedings associated with activist investors.As a result of these and other factors, the trading price for our common stock has been and will likely continue to be volatile.13Further, the stock market in general, and the market for technology companies in particular, have experienced extreme price and volumefluctuations. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actualoperating performance. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securitiesclass action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costsand a diversion of our management’s attention and resources.We utilize debt financing and such indebtedness could adversely affect our business, financial condition, results of operations andearnings per share. We may be unable to meet our payment obligations.We incur indebtedness to finance our operations and we have substantial amounts of outstanding indebtedness and debt service requirements.Our credit facility contains customary affirmative, negative and financial covenants, including a maximum total leverage ratio. Our ability to meetour payment and other obligations and covenants under our indebtedness depends on our ability to generate significant cash flow. This, to someextent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control.There is no assurance that our business will generate cash flow from operations, or that future borrowings will be available to us under our existing(or any amended) credit facilities or otherwise, in an amount sufficient to enable us to meet payment obligations under any indebtedness we mayincur from time to time. If we are not able to generate sufficient cash flow to service our debt obligations or meet required debt covenants, we mayneed to refinance or restructure our debt, sell assets, reduce or delay capital investments, or seek to raise additional capital. There is noassurance that we will be able to implement any of these alternatives on commercially reasonable terms, if at all. If we are unable to implementone or more of these alternatives, we may not be able to meet our payment obligations under any indebtedness we owe. In addition, an inability tomeet our payment obligations under any indebtedness may trigger a default, and possible acceleration of payment terms, under the applicable debtfinancing agreements.Furthermore, the interest rate on certain of these instruments is tied to short term interest rate benchmarks including the Prime Rate andLIBOR. Interest rates have remained at historically low levels for a prolonged period of time. If the rate of interest we pay on our borrowingsincreases it would increase our debt-related expenditures. There is no assurance that our business will generate cash flow from operations, or thatfuture borrowings will be available to us under our existing (or any amended) credit facilities or otherwise, in an amount sufficient to enable us tomeet payment obligations (including any increased interest payment obligations) under any indebtedness we may incur from time to time.The principal amount of our debt outstanding as of December 30, 2018 was $935.8 million which primarily included:•$476.3 million Term Loan B•$150 million of our 2% 2023 Exchangeable Notes•$287.5 million of our 4.5% 2022 Senior Exchangeable Notes and•$12 million of our 2% 2020 Spansion Exchangeable NotesSee Note 15 of the Notes to Consolidated Financial Statements for more information regarding our debt obligations.If we fail to compete successfully in our highly competitive industry and markets, our business, financial condition and results ofoperations will be seriously harmed.The semiconductor industry is intensely competitive. This intense competition results in a difficult operating environment that is marked by erosionof average selling prices over the life of each product and rapid technological change resulting in limited product life cycles. In order to offsetselling price decreases, we attempt to decrease the manufacturing costs of our products and to introduce new, higher priced products thatincorporate advanced features. If these efforts are not successful or do not occur in a timely manner, or if our newly introduced products do notgain market acceptance, our business, financial condition and results of operations could be seriously harmed.Our ability to compete successfully in the rapidly evolving semiconductor industry depends on many factors, including:•our ability to successfully execute on our long term strategic corporate transformation initiatives, collectively known as our Cypress 3.0initiatives;•our success in developing and marketing new products, software platforms and manufacturing technologies and bringing them to marketon a timely basis;14•the quality and price of our products, and our ability to meet the specification requirements of our customers;•the willingness of our customer base to absorb any increase in the price at which we sell our products;•the pace at which customers incorporate our products into their systems, as is sometimes evidenced by design wins;•the diversity of our product lines;•the cost effectiveness of our design, development, manufacturing, support and marketing efforts, especially as compared to ourcompetitors;•our success in developing and introducing firmware in a timely manner;•our customer service and customer satisfaction;•our ability to successfully execute our flexible manufacturing strategy;•the number, strength and nature of our competitors, the markets they target and the rate and success of their technological advances;•the success of certain of our development activities including our investments in internal and external development stage startups;•our ability to get competitive terms with our vendors, manufacturing partners and suppliers;•general economic conditions;•the cyclical nature of the semiconductor industry;•our ability to maintain supply of products from third party manufacturers; and•our access to and the availability of working capital.Although we believe we currently compete effectively in the above areas to the extent they are within our control, given the pace of change in ourindustry (including recent trends toward consolidation in the industry), our current abilities are not guarantees of future success. If we are unable tocompete successfully in this environment, our business, financial condition and results of operations will be seriously harmed.We face significant volatility in supply and demand conditions for our products, and this volatility, as well as any failure by us toaccurately forecast future supply and demand conditions, could materially and negatively impact our business.The semiconductor industry has historically been characterized by wide fluctuations in the demand for, and supply of, semiconductors. Demandfor our products depends in large part on the continued growth of various electronics industries that use our products, including, but not limited to:•automotive applications including advanced driver assistance systems (ADAS), instrument clusters, infotainment systems, bodyelectronics, connectivity, HVAC controls, event data recorders;•industrial systems including factory automation equipment, smart electric meters, aerospace, industrial controls, point-of-sale terminalsand test equipment;•Wireless products including smart home applications, health and fitness, audio, automotive, medical and industrial devices;•consumer electronics including wearable electronics, smartphones and other mobile devices, gaming consoles, game-pads, remotecontrols, toys, presenter tools, TVs, set-top boxes and fitness equipment;•wireless telecommunications equipment;•computers and computer-related peripherals;•medical equipment; and•networking equipment.Any downturn, shift in product launch schedule or reduction in the growth of these industries could seriously harm our business, financial conditionand results of operations. Further, pricing in the semiconductor industry is subject to significant volatility. As an example, pricing of memoryproducts during fiscal 2017 was significantly impacted by industry conditions. We may be unable to anticipate or manage price volatility which mayadversely impact our margins, market share, financial condition and results of our operations.We order materials and build our products based primarily on our internal forecasts, and customer and distributor forecasts and secondarily onexisting orders, which may be canceled under many circumstances. Because our markets can be volatile, based on consumer demand andsubject to rapid technological changes, our forecasts may be inaccurate, causing us to make too many or too few of certain products.Our customers frequently place orders requesting product delivery almost immediately after the order is made, which makes forecasting customerdemand even more difficult, particularly when supply is abundant. In addition,15demand for our products could be materially different from our expectations due to changes in customer order patterns, including order deferrals orcancellations. If we experience inadequate demand, order cancellations, or a significant shift in the mix of product orders that makes our existingcapacity and capability inadequate, our fixed costs per semiconductor produced will increase, which will harm our financial condition and results ofoperations.Alternatively, if we should experience a sudden increase in demand, we will need to quickly ramp our inventory and/or manufacturing capacity toadequately respond to our customers. If we or our manufacturing partners are unable to ramp our inventory or manufacturing capacity in a timelymanner or at all, we risk losing our customers’ business, which could have a negative impact on our financial performance and reputation.If we fail to develop, introduce and sell new products or fail to develop and implement new technologies, our ability to compete in ourend markets will suffer and our financial results could be adversely impacted. Like many semiconductor companies, which operate in a highly competitive, quickly changing environment marked by rapid obsolescence ofexisting products, our future success depends on our ability to develop and introduce new products that customers choose to buy. Our newproducts, for example PSoC® products, our wireless connectivity products, USB-C, and Traveo™ microcontroller products, are an importantstrategic focus for us and therefore, they tend to consume a significant amount of our resources. The new products the market requires tend to beincreasingly complex, incorporating more functions including software and security and operating at faster speeds than old products.Increasing complexity generally requires additional features on a smaller chip. This makes manufacturing new generations of productssubstantially more difficult, costly and time consuming than prior generations.Despite the significant amount of resources we commit to new products, there can be no guarantee that such products will perform as expected orat all, be introduced on time to meet customer schedules or gain market acceptance. If we fail to introduce new product designs or technologies ina timely manner, or are unable to manufacture products according to these design requirements, or if our customers do not successfully introducenew systems or products incorporating our products or if market demand for our new products does not materialize as anticipated, our business,financial condition and results of operations could be materially harmed.The complex nature of our manufacturing activities, our broad product portfolio, and our increasing reliance on third-partymanufacturers makes us highly susceptible to manufacturing problems and these problems can have a substantial negative impact onus if they occur.Manufacturing semiconductors is a highly complex and precise process, requiring production in tightly controlled, clean-room environments. Evenvery small impurities in our manufacturing materials, defects in the masks used to print circuits on a wafer or other problems in the waferfabrication process can cause a substantial percentage of products to be rejected and be non-functional. We and, similarly, our third-party foundrypartners, may experience problems in achieving an acceptable success rate in the manufacture of wafers and the likelihood of facing suchdifficulties is higher due to our broad product portfolio and also in connection with the transition to new manufacturing methods. We may alsoexperience manufacturing problems in our assembly and test operations (or the assembly and test operations of third-party partners) and in theintroduction of new packaging materials. The interruption of wafer fabrication, a reduction in available wafer supply, the failure to achieveacceptable manufacturing yields, or the inability to achieve acceptable levels of quality and security in our products as expected by ourcustomers, including our customers in the automotive industry, at any of our facilities, or the facilities of our third-party foundry partners, wouldseriously harm our business, financial condition and results of operations.We are dependent on third parties to manufacture products, market products, distribute products, generate a significant portion of ourproduct sales, fulfill our customer orders, and transport our products. Problems in the performance or availability of these companiescould seriously harm our financial performance.We rely significantly on independent contractors to manufacture our products, which includes wafer fabrication, assembly, packaging and testing.In March 2017, we divested a wafer fabrication facility (commonly called a fab or foundry) located in Bloomington, Minnesota, which reduced ourinternal manufacturing capacity though we continue to outsource manufacturing services from this facility. The purchaser operates the fabricationfacility as a stand-alone business that16manufactures wafers for Cypress and for other semiconductor companies. Although this transaction reduced our manufacturing footprint, itincreased our reliance on third-party suppliers. Accordingly, if the owner of this Bloomington fabrication facility is unable to effectively operate thefacility, faces financial difficulty, or is otherwise unable to meet our product demands, our supply of components may be adversely affected. Suchevents could lead to difficulties in delivering products to our customers on time and have a negative impact on our revenue and financial results.If market demand for our products exceeds our internal manufacturing capacity and available capacity from our foundry partners, we may seekadditional foundry manufacturing arrangements. A shortage in foundry manufacturing capacity, which is more likely to occur at times of increasingdemand, could hinder our ability to meet demand for our products and therefore adversely affect our operating results. Suppliers may extend leadtimes, limit supplies or increase prices due to commodity price increases, capacity constraints or other factors, which may lead to supplyinterruptions which could materially harm our results of operations. In addition, greater demand for wafers produced by any such foundries withoutan offsetting increase in foundry capacity raises the likelihood of potential shortages and wafer price increases. Our operations would be disruptedif any of our foundry partners terminates its relationship with us, delays its shipments to us, or experiences financial difficulty and we are unable toarrange a satisfactory alternative to fulfill customer orders on a timely basis and in a cost-effective manner. There are also only a few foundryvendors that have the capabilities to manufacture our most advanced products. If we need to engage alternate sources of supply, such sourcesmay be unavailable on commercially reasonable terms, or at all. Supply chain changes in the semiconductor industry are complicated, time-consuming, and costly and may disrupt longstanding business relationships that are otherwise advantageous. Due to the difficulty of engagingalternate sources of supply, if any of our key manufacturing facility partners experiences financial difficulties, we may accelerate purchases orcommit to increase our purchases in order to build up inventories as a precautionary measure; however, this approach might increase our inventorycarrying costs and expose us to inventory risks. Even if we are able to engage alternate sources of supply, we may encounter start-up difficultiesor yield issues or incur additional costs. Shipments could be delayed significantly while these alternate sources are engaged and qualified forvolume production.While many of our products are assembled, packaged and tested at our manufacturing facilities located in the Philippines and Thailand, we rely onindependent subcontractors to assemble, package and test the balance of our products. We cannot be certain that these subcontractors willcontinue to assemble, package and test products for us on acceptable economic and quality terms or at all and it might be difficult for us to findalternatives if they do not do so.Our foundry partners and assembly and test subcontractors have operations in locations that may suffer the impact of certain natural disastersand political risk, which could impact their ability to provide us with our products. We monitor these events closely, but if one of our third-partymanufacturing partners were to suffer significant damage to its operations as a result of a natural disaster or other catastrophic events, our abilityto timely meet consumer demand would suffer which would materially harm our results of operations.We also rely on channel partners, including distributors, resellers, and third-party sales representatives. We continue to expand and change ourrelationships with our channel partners. Worldwide sales through our distributors accounted for approximately 72% of our revenue in fiscal year2018. We rely on many channel partners to assist us in creating customer demand, providing technical support and other value-added services toour customers, filling customer orders, and stocking our products. We face ongoing business risks due to our reliance on our channel partners tocreate and maintain customer relationships where we have a limited or no direct relationship. Should our relationships with our channel partners ortheir effectiveness decline, or as we choose to terminate some channel partner relationships from time to time, we face the risk of decliningdemand which could affect our revenue and results of operations. Such decline could be short-term, as we work to build in-house capacity orotherwise replace the affected channel partners, or long-term if the replacements are less efficient at accessing end customers. In addition, someof our channel partners are affiliated with companies from which we source materials or with which we have other business relationships, so anydeterioration in our dealings with such a channel partner may disrupt the broader relationship. Our contracts with our distributors may be terminatedby either party upon notice. The termination of a significant distributor, reseller, or sales representative could (a) impact our revenue and limit ouraccess to certain end customers, (b) result in the return of a material amount of inventory held by a terminated distributor or reseller that we maynot be able to resell or have to resell at a loss, and (c) jeopardize our ability to collect accounts receivable originating through a terminateddistributor or reseller. In addition, our distributors are located all over the world and vary in size and financial strength. Any disruptions to our17distributors’ operations such as lower sales, lower earnings, debt downgrades, the inability to access capital markets and/or higher interest ratescould have an adverse impact on our business.We also rely on independent carriers and freight haulers to move our products between manufacturing plants and our customers’ facilities.Transport or delivery problems due to their error or because of unforeseen interruptions in their business due to factors such as strikes, politicalinstability, terrorism, natural disasters or accidents could seriously harm our business, financial condition and results of operations and ultimatelyimpact our relationship with our customers.Finally, our customers source a variety of materials from various suppliers in addition to Cypress. The failure by third-party suppliers to meet ourcustomers' materials requirements on a timely basis could negatively impact our customers' manufacturing schedules and reduce or delay ourcustomers' demand for our products. For example, in 2018 a shortage of multi-layer ceramic capacitors, or MLCCs (a necessary component onmany printed circuit boards), created challenges for manufacturers in multiple end markets. To the extent our customers experience shortages ofnecessary materials, they may be forced to slow production of their end products, with a corresponding decline in the rate at which they purchasematerials from us.We may not be able to consume minimum commitments under our “take or pay” agreements, which may have a material adverse impacton our earnings.We have entered into agreements with certain vendors that include "take or pay" terms. Take or pay terms obligate us to purchase a minimumrequired amount of services or make specified payments in lieu of such purchase. We may not be able to consume minimum commitments underthese take or pay terms, requiring payments to vendors, which may have a material adverse impact on our earnings.Failures in our products (including security vulnerabilities, defects or other errors) as well as harms caused by the devices in which ourproducts are embedded could expose us to significant costs and damage our business.We are subject to the risks of product defects and products liability. Our products are inherently complex and from time to time defects or errorsare detected only after the products are in use. Product defects and errata (deviations from published specifications) may result from problems inour product design or our manufacturing and assembly and test processes. Components and products we purchase or license from third-partysuppliers, or obtain through acquisitions, may also contain defects. The design process interface in new domains of technology and the migrationto integrated circuit technologies with smaller geometric feature sizes are complex and add risk to the design and manufacturing process. The useof devices containing our products to access untrusted content can further create a risk of exposing our products to viral or malicious activities.While we continue to focus on security issues and are taking measures to safeguard our products from cybersecurity threats, (includingmaintaining a rapid response team to investigate and respond to reports of security vulnerabilities) device capabilities continue to evolve, enablingmore data and processes and increasing the risk of security failures.Under our sales terms, we generally warrant our products will conform to published specifications and be free from defects in materials andworkmanship for a period of one year, and we limit product warranty remedies to a credit of the original purchase price, repair, or replacement.Although our selling terms generally disclaim such liability, we face a risk that we might be held liable for other remedies, including consequentialdamages resulting from errors or defects in our products, that exceed our standard warranty remedies.Further, the utilization of our products (and our customers' devices in which our products are embedded) by end users entails other productsliability risks. We could face risks if products that we design, manufacture, or sell, or that include our technology, cause personal injury or propertydamage, even where the cause is unrelated to defects or errata. These risks may increase where our products are used in medical devices orother devices or systems relating to human health and safety.Because our products and services are responsible for critical functions in our customers’ products, defects or errata or security flaws in ourproducts or services could have an adverse impact on us, on our customers and/or on the end users of our customers’ products. Such adverseimpacts could include product liability claims; product recalls; write-offs of our inventories, property, plant and equipment and/or intangible assets;costs of providing product refunds, repairs, or replacements as well as reimbursements of customer costs; unfavorable purchase commitments; ashift of business to our competitors; a decrease in demand for our products; damage to our18reputation and to our customer relationships; costs of litigation defense and and/or damages; fines imposed by regulatory agencies; and otherfinancial liability or harm to our business. The materialization of any of these risks could have an adverse impact on our results of operations andcash flows.System security risks, data protection or privacy breaches, cyber-attacks and systems integration issues could disrupt our internaloperations and/or harm our reputation, and any such disruption or harm could cause a reduction in revenue, increase our expenses,negatively impact our results of operation or otherwise adversely affect our stock price.Like most technology companies, we are subject to cyber-attacks from time to time. We face a risk that experienced computer programmers andhackers may be able to penetrate our network security and misappropriate or compromise our confidential and proprietary information, potentiallywithout being detected. Computer programmers and hackers also may be able to develop and deploy viruses, worms, and other malicious softwareprograms that attack our products or otherwise exploit any security vulnerabilities of our products. The costs to us to eliminate or alleviate cyber orother security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts toaddress these problems may not be successful and could result in interruptions and delays that may impede our sales, manufacturing, distributionor other critical functions.We manage and store various proprietary information and sensitive or confidential data relating to our business on internal networks as well as onremote internet-connected third-party servers (sometimes called the "cloud"). Breaches of our security measures or those of our cloud servicesproviders could create system disruptions or cause shutdowns or result in the accidental loss, inadvertent disclosure or unapproved disseminationof proprietary information or sensitive or confidential data about us, including the potential loss or disclosure of such information or data as a resultof fraud, trickery or other forms of deception, could expose us to a risk of loss or misuse of this information, result in litigation and potential liabilityfor us, damage our brand and reputation or otherwise harm our business. In addition, the cost and operational consequences of implementingfurther data protection measures could be significant.Portions of our IT infrastructure also experience interruptions, delays or cessations of service or produce errors in connection with systemsintegration or migration work that takes place from time to time, which may have a material impact on our business. We may not be successful inimplementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptiveand resource-intensive than originally anticipated. Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes.Delayed sales, lower margins or lost customers resulting from these disruptions have adversely affected us in the past, and in the future, couldadversely affect our financial results, stock price and reputation.Changes in U.S. and international tax legislation and tax policy could materially impact our business.A majority of our revenue is generated from customers located outside the U.S. and a substantial portion of our assets, including employees, arelocated outside the U.S. In the past, tax administrations globally have considered initiatives which could substantially eliminate utilization orreduce our ability to claim net operating losses and foreign tax credits, and eliminate various tax deductions. If any of these proposals areconstituted into law, they could have a negative impact on our financial position and results of operations.We are subject to income and other taxes in the United States and various foreign jurisdictions. Our tax liabilities are affected by the amounts wecharge in intercompany transactions for inventory, services, licenses, funding and other items. We are subject to ongoing tax audits in variousjurisdictions. Tax authorities may disagree with these intercompany transactions or other matters and may assess additional taxes or adjusttaxable income on our tax returns as a result. We regularly assess the likely outcomes of these audits in order to determine the appropriateness ofour tax provision. However, there can be no assurance we will accurately predict the outcomes of these audits, and the amounts ultimately paidupon resolution of audits could be materially different from the amounts previously included in our income tax expense and therefore could have amaterial impact on our tax provision, net income and cash flows. In addition, uncertainties related to the interpretation of the Tax Cuts and JobsAct of 2017 could materially impact our tax obligations and effective tax rate, as well as our business strategy and tax planning.Our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the mix of earnings in countrieswith differing statutory tax rates, changes in the valuation of deferred tax assets and19liabilities or changes in tax laws. In addition, various tax legislation has been introduced or is being considered that could significantly impact ourtax rate, the carrying value of deferred tax assets, or our deferred tax liabilities. For example, the Organization for Economic Cooperation andDevelopment (the “OECD”) has recently recommended changes to numerous long-standing international tax principles. If countries amend their taxlaws to adopt certain parts of the OECD guidelines, this may increase tax uncertainty and may adversely impact our tax liabilities. Any of thesechanges could affect our financial performance.If the tax incentive or tax holiday arrangements we have negotiated in Malaysia and Thailand change or cease to be in effect orapplicable, in part or in whole, for any reason, or if our assumptions and interpretations regarding tax laws and incentive or holidayarrangements prove to be incorrect, the amount of corporate income taxes we have to pay could significantly increase.We have structured our operations to maximize the benefit from various tax incentives and tax holidays extended to the Company in variousjurisdictions to encourage investment or employment. Each tax incentive is separate and distinct from the others, and may be granted, withheld,extended, modified, truncated, complied with or terminated independently without any effect on the other incentives. The tax incentives arepresently scheduled to expire at various dates within the next five years, subject in certain cases to potential extensions, which we may or maynot be able to obtain. Absent these tax incentives, the corporate income tax rate in these jurisdictions that would otherwise apply to us would bebetween 20% and 30%. The tax incentives that we have negotiated are also subject to our compliance with various operating and other conditions.If we cannot, or elect not to, comply with the operating conditions included in any particular tax incentive, we will lose the related tax benefits andwe could be required to refund previously realized material tax benefits. Depending on the incentive at issue, we could also be required to modifyour operational structure and tax strategy, which may not be as beneficial to us as the benefits provided under the present tax concessionarrangements. Our interpretations and conclusions regarding the tax incentives are not binding on any taxing authority, and if our assumptionsabout tax and other laws are incorrect or if these tax incentives are substantially modified or rescinded we could suffer material adverse tax andother financial consequences, which could adversely affect our cash flows.We have in the past and may in the future dispose of certain businesses, product lines or assets, which could adversely affect ourresults of operations and liquidity.From time to time, we have divested certain businesses, product lines or assets, acquired or otherwise, that are no longer strategically important,and exited minority investments, and we may do so in the future, which could materially affect our cash flows and results of operations. If wedecide to divest another business, product line, or assets, we may encounter difficulty in finding or completing such divestiture opportunity (oralternative exit strategy) on acceptable terms or in a timely manner. These circumstances could delay the achievement of our strategic objectivesor cause us to incur additional expenses with respect to the business, product line or assets that we seek to dispose. In addition, any delay in thetiming of a divestiture transaction may negatively impact our business operations or liquidity for a period of time. Alternatively, we may dispose ofbusinesses, product lines, or assets at prices or on terms that are less favorable than we had anticipated. Even following a divestiture, we may becontractually obligated with respect to certain continuing obligations to customers, vendors, landlords, or other third parties. Accordingly, we maybe dependent on the new owner (of such business, product line or manufacturing facility) to fulfill our continuing obligations to our customers. Wemay also have continuing obligations for pre-existing liabilities related to the divested assets or businesses. Such obligations may have a materialadverse impact on our results of operations and financial condition. Any such dispositions could also result in disruption to other parts of ourbusiness, potential loss of employees or customers (especially if the new owner is unable or unwilling to assist us in fulfilling any continuingobligations to our customers), potential loss of revenue, negative impact on our margins, exposure to unanticipated liabilities or result in ongoingobligations and liabilities to us following any such divestiture. We may also incur significant costs associated with exit or disposal activities,related impairment charges, or both.One type of divestiture is contribution of the applicable business, product lines, or assets to a joint venture in exchange for an interest in theventure, which exposes us to the risk that the joint venture might decline in value or not meet desired objectives. The success of joint ventureinvestments depends on various factors over which Cypress might have limited or no control and requires ongoing and effective cooperation withstrategic partners. Such risks could be exacerbated by unfavorable financial market and macroeconomic conditions and, as a result, the value ofany joint venture investment could be negatively impacted and lead to impairment charges.20In October 2018, we signed a definitive agreement to enter into a joint venture arrangement with SK hynix system ic Inc, under which we willcontribute our full portfolio of single-level cell NAND flash memories (along with $2.4 million in cash) to the venture. The transaction is intended toreduce our exposure to a highly commoditized product line that has traditionally been volatile with low gross margins. The joint venture agreementis subject to closing conditions, including applicable regulatory approvals, which are not assured. Although we currently expect the transaction toclose in the first quarter of fiscal 2019, we face a risk that it might not close on a timely basis, or at all. If the joint venture fails to close, we willnot realize its anticipated benefits, which might have an adverse effect on our results of operations and stock price. Further, when the transactioncloses we will transition our customer orders for NAND flash memories to the joint venture. Although we expect to have influence over the jointventure's operations, it will not be under our control, and we might be unaware of, or unable to correct, operating or product issues if they develop.Any failure by the joint venture to satisfy customer expectations could adversely impact our own relationships with customers and/or the reputationof our brand. In addition, we cannot assure you that the joint venture will be profitable. The joint venture's governing documents will not require it todistribute its profits (if any) regularly, or at all (apart from a commitment to distribute to us our share of profit on a specified portion of sales throughJanuary 31, 2021). We therefore face a risk that our investment might not generate meaningful cash flows to re-invest, for example, in higher-margin areas of our business.Our restructuring initiatives might not be successful.From time to time, we have implemented restructuring plans to reduce our operating costs and/or shift our expenditures to different areas of ourbusiness. However, if we have not sufficiently reduced operating expenses or if revenues are below our expectations, we may be required toengage in additional restructuring activities, which could result in additional restructuring charges. These restructuring charges could harm ourresults of operations. Further, our restructuring plans could result in potential adverse effects on employee capabilities, on our ability to achievedesign wins, and our ability to maintain and enhance our customer base. Such events could harm our efficiency and our ability to act quickly andeffectively in the rapidly changing technology markets in which we sell our products. In addition, we may be unsuccessful in our efforts to realignour organizational structure and shift our investments and focus to our high-growth businesses. Our financial results could be adversely impacted if privately-held companies (that we have invested in) fail to develop and successfullybring to market new and proprietary products.We have made a financial commitment to certain investments in privately-held companies. There can be no guarantee that such businesses willperform as expected or at all, launch new products and solutions as expected or gain market acceptance. During the fourth quarter of fiscal 2018,we determined that our investment in Deca Technologies Inc., which is accounted for as an equity method investment, was other-than temporarilyimpaired due to significant delays in Deca's commercialization and achievement of scalable production of certain key products, and consequentlywe recognized an impairment charge of $41.5 million. Similarly, during the fourth quarter of fiscal 2017, we determined that our investment inanother equity investee, Enovix Corporation, was other-than temporarily impaired as Enovix did not achieve certain key planned productdevelopment milestones, and consequently we recognized an impairment charge of $51.2 million. If these or any of our other privately-heldcompanies fail to introduce new products and solutions or successfully develop new technologies, or if customers do not successfully introducenew systems or products incorporating the products or solutions offered by these businesses or if market demand for the products or solutionsoffered by these businesses do not materialize as anticipated or if these or any of our other privately-held companies are not able to raise capitalto fund their operations, our business, financial condition and results of operations could be materially harmed as a result of impairment of thecarrying value of our investments in such privately-held companies.Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impactour business and results of operations.Acquisitions have been an important element of our overall corporate strategy and use of capital. We may from time to time evaluate and enterinto discussions regarding a wide array of potential strategic transactions. These transactions could be material to our financial condition andresults of operations. The process of integrating an acquired company, business, or technology has created, and may continue to create,unforeseen operating difficulties and expenditures. The areas where we face risks include, but are not limited to:•Diversion of management time and focus from operating our business to integration challenges;21•Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employeesfrom the businesses we acquire;•Successfully transitioning the current customer, supplier, foundry and other partnering relationships of the acquired company;•Implementation or remediation of controls, procedures, and policies at the acquired company;•Integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product,engineering, and sales and marketing functions;•In the case of acquired companies with global operations, the need to integrate operations across different cultures and languages and toaddress the particular economic, currency, political, and regulatory risks associated with specific countries;•Failure to successfully further develop the acquired business or technology;•Liability for activities of the acquired company before the acquisition, including intellectual property infringement claims, violations of laws,commercial disputes, tax liabilities, and other known and unknown liabilities; and•Pending litigation or other known or unknown claims in connection with the acquired company, including claims by stockholders for breachof fiduciary duties, terminated employees, customers, former stockholders, or other third parties.•To the extent a purchase agreement includes a non-competition and/or non-solicitation commitment by the seller, any breach or expirationof such commitment may expose us to additional competition if the seller decides to re-enter the relevant market or attempts to hire backits employees.Our failure to address these and other risks or other problems encountered in connection with our past or current acquisitions and investmentscould cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our businessgenerally. Current and future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingentliabilities, amortization expenses, or write-offs of goodwill, any of which could harm our financial condition or results. As a result, the anticipatedbenefit of any of our acquisitions may not be realized.In 2016, we incurred a material impairment charge with respect to our goodwill, and we may in the future incur impairments in the valueof our goodwill, intangibles and property, plant and equipment.Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in abusiness combination. We test goodwill for impairment annually, and more frequently when events occur or circumstances change that would morelikely than not reduce the fair value of a reporting unit below its carrying amount. In 2016, we conducted impairment testing on the goodwill in ourlegacy Programmable Solutions Division ("PSD") and recorded an impairment charge of $488.5 million. In addition, our other long-lived assetswhich include intangibles and property, plant and equipment are evaluated for impairments whenever events or changes in circumstances indicatethe carrying value may not be recoverable. Either of these situations may occur for various reasons, including changes in actual or expectedincome or cash flow. During the fourth quarter of fiscal 2016, we reorganized our reportable segments as a result of which goodwill was reallocatedto new segments. We continue to evaluate current conditions to assess whether any impairment exists. Additional impairments could occur in thefuture if any of the following occur: deterioration in market or interest rate environments, significant adverse changes in business climate,unanticipated competition, loss of key customers, changes in technology, declines in future cash flows of our reporting units, or material changesin reporting unit carrying values compared with changes in their respective fair values.22We compete with others to attract and retain key personnel, and any loss of, or inability to attract, such personnel would harm us.To a greater degree than most non-technology companies, we depend on the efforts and abilities of certain key members of management andtechnical personnel to execute on the strategic initiatives of our business. Our future success depends, in part, upon our ability to retain suchpersonnel and to attract and retain other highly qualified personnel, particularly skilled engineers. We compete for these individuals with certain ofour competitors, other companies, academic institutions, government entities and other organizations. Competition for such personnel, particularlyin the Silicon Valley, is intense and we may not be successful in hiring or retaining new or existing qualified personnel. Furthermore, changes inimmigration and work permit laws and regulations or the administration or enforcement of such laws or regulations can also impair our ability toattract and retain qualified personnel. Equity awards are critical to our ability to hire and retain such key personnel, and any reduction in the priceof our common stock (and accordingly the value of such equity awards) may reduce the willingness of key personnel to remain employed by theCompany. In addition, we may also need to significantly increase our cash-based compensation to retain such personnel.Our business may also be impacted if we lose members of our senior management team. Any disruption in management continuity could impactour results of operations and stock price and may make recruiting for future management positions more difficult. In addition, changes in keymanagement positions may temporarily affect our financial performance and results of operations as new management becomes familiar with ourbusiness. The loss of any of our key officers or other employees, or our inability to attract, integrate and retain qualified employees, could requireus to dedicate significant financial and other resources to such personnel matters, disrupt our operations and seriously harm our operations andbusiness.If we are unable to obtain stockholder approval of additional shares for our share-based compensation award programs in the future, wecould be at a competitive disadvantage in the marketplace for qualified personnel.Our compensation program, which includes cash and share-based compensation award components, has been instrumental in attracting, hiring,motivating, and retaining qualified personnel. Competition for qualified personnel in our industry is extremely intense, particularly for engineeringand other technical personnel. Our success depends on our continued ability to attract, hire, motivate, and retain qualified personnel and our share-based compensation award programs provide us with a competitive compensatory tool for this purpose. The continued use of our share-basedcompensation program is necessary for us to compete for engineering and other technical personnel and professional talent. In the future, if we areunable to obtain stockholder approval of additional shares for our share-based compensation award programs, we could be at a competitivedisadvantage in the marketplace for qualified personnel.There can be no assurance we will continue to declare dividends.Our Board of Directors previously adopted a policy pursuant to which the Company would pay quarterly cash dividends on our common stock. Thedeclaration and payment of any dividend or distribution is subject to the approval of our Board and our dividend may be discontinued or reduced atany time. There can be no assurance that we will declare dividends or distributions in the future in any particular amounts, or at all. Futuredividends or distributions, if any, and their timing and amount, may be affected by, among other factors, management’s views on potential futurecapital requirements for strategic transactions, including acquisitions; earnings levels; contractual restrictions; our cash position and overallfinancial condition; debt related payments and commitments, including restrictive covenants which may limit our ability to pay a dividend ordistribution; changes in tax or corporate laws; our ability to repatriate cash into the United States; stock repurchase programs; the need to invest inresearch and development or other parts of our business operations; and changes to our business model. Accordingly, our dividend or otherdistribution payments may change from time to time, and we cannot provide assurance that we will continue to declare dividends or otherdistributions in any particular amounts or at all. A reduction in our dividend payments or a change in the tax treatment of future dividends couldhave a negative effect on our stock price.We may have fluctuations in the amount and frequency of our stock repurchases and there can be no assurance that we will continue torepurchase shares of our stock.23In October 2015, our Board of Directors approved a new share repurchase plan pursuant to which we are authorized to repurchase our commonstock in an aggregate amount not to exceed $450 million. Although our Board of Directors has approved a share repurchase program, the sharerepurchase program does not obligate us to repurchase any specific dollar amount or number of shares. In addition, there can be no assurancethat we will continue to repurchase shares of our stock in any particular amounts, or at all. The stock repurchase plan could affect the price of ourstock and increase volatility and may be suspended or terminated at any time without prior notice and in compliance with legal and regulatoryrequirements, which may result in a decrease in the trading price of our common stock. Through the end the 2016 fiscal year, we repurchased atotal of 29.5 million shares for a total cost of $239.2 million under the October 2015 stock repurchase plan. A substantial majority of thesepurchases were made prior to the start of our second quarter of 2016. In fiscal 2017, we did not repurchase any shares in the open market underthe stock repurchase plan. In fiscal 2018, we repurchased 2.4 million shares for a total cost of $35 million including the Yield EnhancementProgram ("YEP"). YEPs are short-term structured agreements, typically with maturities of 90 days or less, correlated to our stock price that cansettle either in return of cash or delivery of our shares.Any guidance that we may provide about our business or expected future results may differ significantly from actual results.From time to time we have shared our views in press releases or SEC filings, on public conference calls and in other contexts about currentbusiness conditions and our expectations as to our future results of operations. Correctly identifying the key factors affecting business conditionsand predicting future events is inherently an uncertain process, especially in uncertain economic times. Given the complexity and volatility of ourbusiness, our analysis and forecasts have in the past and will likely in the future, prove to be incorrect. We offer no assurance that suchpredictions or analysis will ultimately be accurate, and investors should treat any such predictions or analysis with appropriate caution. If anyanalysis or forecast that we make ultimately proves to be inaccurate, our stock price may be adversely affected.Industry consolidation may lead to increased competition and may harm our operating results.There has been a trend toward industry consolidation in our markets for several years. We expect this trend to continue as companies attempt tostrengthen or hold their market positions in an evolving industry and as companies are acquired or are unable to continue operations. Industryconsolidation may result in stronger companies that are better able to compete with us. This could have a material adverse effect on our business,operating results, and financial condition.We may be unable to adequately protect our intellectual property rights.The protection of our intellectual property rights is essential to keeping others from copying the innovations that are critical to our existing andfuture products. It may be possible for an unauthorized third party to reverse-engineer or decompile our software products. The process of seekingpatent protection can be long and expensive and we cannot be certain that any currently pending or future applications will actually result in issuedpatents, or that, even if patents are issued, they will be respected by third parties. Furthermore, our flexible manufacturing initiative requires us toenter into technology transfer agreements with external partners, providing third-party access to our intellectual property and resulting in additionalrisk. In some cases, these technology transfer and/or license agreements are with foreign companies and subject our intellectual property toregulation in foreign countries which may afford less protection and/or result in increased costs to enforce such agreements or intellectual propertyrights. We anticipate that we will continue to enter into these kinds of licensing arrangements in the future. Consequently, we have in the pastbecome involved and we may continue to be involved in litigation, in the United States or abroad, to enforce our patents or other intellectualproperty rights, to protect our trade secrets and know-how, to determine the validity or scope of the proprietary rights of others or to defend againstclaims of invalidity. We may also from time to time continue to be involved in litigation relating to alleged infringement by us of others’ patents orother intellectual property rights. Patent litigation, if necessary or when instituted against us, could result in substantial costs and divert ourmanagement’s attention and resources.Moreover, a key element of our strategy is to enter new markets with our products. If we are successful in entering these new markets, we willlikely be subject to additional risks of potential infringement claims against us as our technologies are deployed in new applications and face newcompetitors. We may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights, particularlyin certain international markets, making misappropriation of our intellectual property more likely. In August 2016, we entered24into a series of agreements to divest a large number of older, legacy patents and we may in the future divest patents from time to time. Thedivestiture of patents may limit our ability to make certain legal claims, and to be successful, in future patent litigation.We also rely on trade secret protection for our technology, in part through confidentiality and other written agreements with our employees,consultants and third parties. Through these and other written agreements, we attempt to control access to and distribution of our intellectualproperty documentation and other proprietary technology information. Despite our efforts to protect our proprietary rights, former employees,consultants or third parties may, in an unauthorized manner, attempt to use, copy or otherwise obtain and market or distribute our intellectualproperty rights or technology or otherwise develop a product with the same functionality as our technology. Policing unauthorized use of ourintellectual property rights is difficult, and nearly impossible on a worldwide basis. Therefore, we cannot be certain that the steps we have taken orwill take in the future will prevent misappropriation of our technology or intellectual property rights, particularly in foreign countries where we dobusiness or where our technology is sold or used, where the laws may not protect proprietary rights as fully as do the laws of the United States orwhere the enforcement of such laws is not common or effective.We become involved in intellectual property litigation from time to time, which can be expensive and divert management attention andresources away from our business, and in which an adverse judgment or settlement may require us to pay substantial damages orprohibit us from using essential technologies.Intellectual property litigation and threats of litigation are very common in our industry. Other companies or entities have commenced, and mayagain commence, actions seeking to establish the invalidity of our patents. While we intend to defend these actions vigorously, there is noguarantee of success, and such effort takes significant financial and time resources from the Company. In the event that one or more of ourpatents are challenged, a court or the United States Patent and Trademark Office (USPTO) may invalidate the patent(s) or determine that thepatent(s) is not enforceable, which could harm our competitive position. If our patents are invalidated, or if the scope of the claims in any of thesepatents is limited by a court or USPTO decision, we could be prevented from pursuing certain litigation matters or licensing the invalidated orlimited portion of such patents. Such adverse decisions could negatively impact our future, expected revenue.Intellectual property litigation is frequently expensive to both the winning party and the losing party and could take up significant amounts ofmanagement’s time and attention. In addition, if we lose such a lawsuit, a court could find that our intellectual property rights are invalid, enablingour competitors to use our technology, or require us to pay substantial damages and/or royalties or prohibit us from using essential technologies.In addition, in August 2016, we entered into a series of agreements to divest a large number of older, legacy patents and we may in the futuredivest patents from time to time. The divestiture of patents may limit our ability to make certain legal claims, and to be successful, in future patentlitigation. For these and other reasons, intellectual property litigation could seriously harm our business, financial condition and results ofoperations. Also, although in certain instances we may seek to obtain a license under a third party’s intellectual property rights in order to bring anend to certain claims or actions asserted against us, we may be unable to obtain such a license on reasonable terms or at all. Even though wemay have meritorious defenses and claims and defend and pursue such claims vigorously, all litigation is subject to inherent uncertainties andmay negatively impact our business.The accumulation of changes in our shares by “5-percent stockholders” have in the past and could again trigger an ownership changefor U.S. income tax purposes, in which case our ability to utilize our net operating losses would be limited and therefore impact ourfuture tax benefits.We are a publicly traded company and our stockholders can change on a daily basis. These changes are beyond our control. The U.S. InternalRevenue Code (Section 382) restricts a company’s ability to benefit from net operating losses if a “Section 382 Ownership Change” occurs. Anownership change for purposes of U.S. tax law Section 382 may result from ownership changes that increase the aggregate ownership of “5-percent stockholders,” by more than 50 percentage points over a testing period, generally three years (“Section 382 Ownership Change”). Weexperienced a Section 382 Ownership Change upon our merger with Spansion Inc. ("Spansion") in March 2015. The resulting limitationsaccompanying the ownership change are reflected in our deferred tax assets with no permanent limitation in our ability to utilize our tax attributes.Our business could be negatively affected as a result of actions by activist stockholders.25The actions of activist stockholders, including any related legal proceedings, could adversely affect our business. Specifically:•responding to common actions of an activist stockholder, such as public proposals and requests for special meetings, nominations ofcandidates for election to our board of directors, requests that certain executive officers or directors depart the Company, requests tomake changes to internal business operations, requests to pursue a strategic combination or other transaction or other special requests,could disrupt our operations, be costly and time-consuming or divert the attention of our management and employees; •perceived uncertainties as to our future direction in relation to the actions of an activist stockholder, including any perceived changes atthe board or management level, may result in the loss of potential business opportunities or the perception that we are unstable and needto make changes, which may be exploited by our competitors and make it more difficult to attract and retain key personnel as well asconsumers and service providers;•actions of an activist stockholder, especially any legal proceedings, may divert management time and attention away from execution onthe Company’s business operations and cause the Company to incur significant costs, including expenses related to legal, publicrelations, investment banking, and/or proxy advisory services - these expenses could have a material adverse impact on our financialresults;•the election to our Board of Directors of director candidates who are not supported by the Company, may create unnecessary conflict andinstability on our board of directors; and•actions of an activist stockholder may cause fluctuations in our stock price based on speculative market perceptions, unflattering mediacoverage, or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.Our settlement agreement with T.J. Rodgers, which resolved the 2017 proxy contest, expires on the date of our 2019 annual meeting ofstockholders (or, if earlier, May 31, 2019).Geopolitical uncertainty, and changes to international trade agreements, tariffs, import and excise duties, taxes, or other governmentalrules and regulations could adversely affect our business and results of operations.A majority of our revenue is generated from customers located outside the U.S. and a substantial portion of our assets and employees are locatedoutside the U.S. Risks associated with international operations, any of which could have a material adverse effect on our business, liquidity,financial condition and/or results of operations, include:•political instability, and the possibility of a deteriorating relationship between the nations in which we do business and the United States;•the imposition of new or modified international trade restrictions, tariffs, import and excise duties or other taxes;•import and export requirements, including restrictions on sales to certain end customers;•restrictions on foreign ownership and investments, including potential intervention by the Committee on Foreign Investment in the UnitedStates (CFIUS) or by other applicable administrative review boards to block strategic transactions that might otherwise be in ourshareholders’ interests;•restrictions on repatriation of cash earned in countries outside the U.S.;•changes in local political, economic, social and labor conditions;•a less developed and less certain legal and regulatory environment in some countries, which, among other things, can create uncertaintyregarding contract enforcement, intellectual property rights and liability issues;•inadequate levels of compliance with applicable anti-bribery laws, including the Foreign Corrupt Practices Act, the UK Bribery Act of 2010;and•possible disruption of business relationships if any of the above risks disrupt our suppliers or customers' operations, or lead any of oursuppliers or customers to relocate some portion of their international operations (for example, we might face a risk of delayed or lost salesif a customer were to move its manufacturing operations out of China due to concerns over tariffs or inadequate respect for intellectualproperty rights).The U.S. federal government or other governmental bodies may propose changes to international trade agreements, tariffs, taxes and othergovernment rules and regulations. Any changes to the international trading system, or the emergence of an international trade dispute, couldsignificantly impact our business and have a26negative impact on our revenues. In addition, the U.S. and other countries in which we operate impose import and excise duties, tariffs and othertaxes on our products in varying amounts. Any significant increases in import and excise duties or other taxes on our products could have amaterial adverse effect on our business, liquidity, financial condition and/or results of operations.For example, our sales were impacted in the second quarter of 2018 when the U.S. Department of Commerce banned U.S. companies fromproviding exports to ZTE, a Chinese telecoms equipment manufacturer (which ban was subsequently lifted in the third quarter of 2018) in an exportcontrols case. Similarly, general trade tensions between the U.S. and China escalated in 2018, with rounds of U.S. tariffs on Chinese goods takingeffect in July, August, and September 2018 (some of which prompted retaliatory Chinese tariffs on U.S. goods). An additional U.S. tariff rateincrease was scheduled to take effect on January 1, 2019 but was delayed in December 2018 and again in February 2019. government announceda 90 day delay as the two nations attempt to reach a trade agreement. Further rounds of tariffs have also been threatened by U.S. and Chineseleaders.The current U.S. tariffs on China-origin goods and the related geopolitical uncertainty between the U.S. and China have caused, and may continueto cause, decreased demand for our products from distributors and other customers, which could have a material adverse effect on our business,liquidity, financial condition, and/or results of operations.•The August and September 2018 rounds of U.S. tariffs apply to some of our products that are assembled in China and imported to theU.S. Specifically, the August round imposed a 25% tariff on integrated circuits and the September round imposed a 10% tariff on modules,which is scheduled to rise to 25% at the end of the delay period mentioned above, absent a resolution of the trade dispute. Productssubject to the tariffs generated approximately 1.5% of our revenue for the fourth quarter of 2018. These current and any future tariffsimposed by the U.S. on products assembled in China that we sell in the U.S. could negatively impact our U.S. sales.•The August round of U.S. tariffs also imposed a 25% duty on imports of China-origin integrated circuit wafers, which are among thecomponents we include in our products. Although we import some such wafers for testing in the U.S., we then export them overseas forfinal assembly and/or distribution to customers. Accordingly, we have been able to avoid the wafer tariff to date by use of the "temporaryimport bond" (or TIB) process established by U.S. Customs, which requires that we separately track each wafer to ensure that, within oneyear of import, it is either re-exported or destroyed. If we fail to so track any such wafer, we would owe a double duty on the incomingshipment of which that wafer was a part. In addition, upon any such failure, U.S. Customs could (and upon repeated extreme failures U.S.Customs likely would) disallow further use of the TIB process, which would materially increase our production costs. In that case, wemight be unable to secure alternate sources for wafers on a timely basis, or at all. In the semiconductor industry, supply chain changesare complicated, time-consuming, and costly, and may disrupt longstanding business relationships that are otherwise advantageous.•Apart from wafers, the current U.S. tariffs cover only a small fraction of the materials we utilize for manufacturing of our products. We donot anticipate any material impact on our supply chain costs from the U.S. tariffs imposed to date. If the U.S. were to impose tariffs on abroader range of materials that we or our suppliers source from China for use in U.S. manufacturing (and if we were unable to avoid thetariffs by use of the TIB process or other means), such tariffs could cause our costs to increase, which could narrow the profits we earnfrom sales of products requiring such materials or force us to raise prices, negatively impacting our sales. As mentioned above, theprocess of changing suppliers in order to mitigate any such tariff costs could be complicated, time-consuming, and costly.•We believe the U.S. tariffs may cause customers to delay orders as they evaluate where to take delivery of our products in connectionwith their efforts to mitigate their own tariff exposure. Such delays create forecasting difficulties for us and increase the risk that ordersmight be canceled or might never be placed.•Some of our customers embed our products in finished goods they manufacture in China for import to the U.S. Current or future tariffsimposed by the U.S. on such goods could negatively impact our customers' sales, thereby causing an indirect negative impact on our ownsales. Any reduction in our customers' sales, and/or any apprehension among distributors and customers of a possible reduction in suchsales, would likely cause an indirect negative impact on our own sales. Even in the absence of further tariffs, the related uncertainty andthe market's fear of an escalating trade war might cause our distributors and customers to27place fewer orders for our products, which could have a material adverse effect on our business, liquidity, financial condition, and/orresults of operations.•To date, China's retaliatory tariffs have generally focused on other industries. However, if China were to impose tariffs on the products wesell in China, or on the finished goods our customers sell in China, such tariffs (and/or the market's related uncertainty and apprehension)could directly or indirectly reduce demand for our products, negatively impacting our sales.We could also be affected by nationalization of our international operations, unstable governments, unfamiliar or biased legal systems orintergovernmental disputes. Any determination that our operations or activities did not comply with applicable U.S. or foreign laws or regulationscould result in the imposition of fines and penalties, interruptions of business, terminations of necessary licenses and permits, and other legal andequitable sanctions.These international economic and political uncertainties and regulatory changes could have a material adverse effect on our, or our suppliers’ anddistributors’, business, liquidity, financial condition and/or results of operations.We face additional problems and uncertainties associated with international operations that could seriously harm us.International revenues historically accounted for a significant portion of our total revenues. Our manufacturing, assembly, and test operations andcertain finance operations located outside of the United States, as well as our international sales offices and design centers, face risks frequentlyassociated with foreign operations including but not limited to:•currency exchange fluctuations;•the devaluation of local currencies;•political instability, and the possibility of a deteriorating relationship between the nations in which we operate and the United States;•labor issues, including collective bargaining agreements;•the impact of natural disasters on local infrastructures and economies;•changes in local economic conditions;•import and export controls;•potential shortage of power supply;•potential violations by our international employees or third party agents of international or U.S. laws relevant to foreign operations (such asFCPA, UK Bribery Act of 2010); and•changes in tax laws, tariffs and freight rates.To the extent any such risks materialize, our business, financial condition or results of operations could be seriously harmed.We are subject to many different environmental, data privacy, health and safety laws, regulations and directives, and compliance withthem may be costly.We are subject to many different international, federal, state and local governmental laws and regulations related to, among other things, thestorage, use, discharge and disposal of toxic, volatile or otherwise hazardous chemicals used in our manufacturing process, conflict mineral anddata privacy legislation, as well as the health and safety regulations related to our employees. Compliance with these regulations can be costly.There can be no assurance that we have been, or will be at all times in complete compliance with such laws and regulations. If we violate or fail tocomply with these laws and regulations, we could be fined or otherwise sanctioned by regulators. Under certain environmental laws, we could beheld responsible, without regard to fault, for all of the costs relating to any contamination at our or our predecessors’ past or present facilities andat third party waste disposal sites. We could also be held liable for any and all consequences arising out of human exposure to such substancesor other environmental damage.Proposed or new legislation and regulations could also significantly affect our business. There currently are a number of proposals pending beforefederal, state, and foreign legislative and regulatory bodies. In addition, the new European General Data Protection Regulation (GDPR) took effectin May 2018 and applies to many of our products and services that provide service in Europe. The GDPR includes operational requirements forcompanies that receive or process personal data of residents of the European Union. It requires, for example, that we implement measures tochange our service or limit access to our service for minors under the age of 16 for certain28countries in Europe that maintain the minimum age of 16 under the GDPR. We are also required to obtain consent and/or offer new controls toexisting and new users in Europe before processing data for certain aspects of our service. The GDPR similarly regulates our processing ofpersonal data of European employees, European customers, European sales leads, and other European business contacts. The GDPR providessignificant penalties for non-compliance. Similarly, there are a number of legislative proposals in the United States, at both the federal and statelevel, that could impose new obligations in areas affecting our business, such as liability for copyright infringement by third parties. In addition,some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing ofdata or similar requirements that could increase the cost and complexity of delivering our services.Over the last several years, there has been increased public awareness of the potentially negative environmental impact of semiconductormanufacturing operations. This attention and other factors may lead to changes in environmental regulations that could force us to purchaseadditional equipment or comply with other potentially costly requirements. If we fail to control the use of, or to adequately restrict the discharge of,hazardous substances under present or future regulations, we could face substantial liability or suspension of our manufacturing operations, whichcould seriously harm our business, financial condition and results of operations.We face increasing complexity in our product design as we adjust to new and future requirements relating to the material composition of ourproducts, including the restrictions on lead and other hazardous substances that apply to specified electronic products put on the market in theEuropean Union, China and California. Other countries, including at the federal and state levels in the United States, are also considering similarlaws and regulations. Certain electronic products that we maintain in inventory may be rendered obsolete if they are not in compliance with suchlaws and regulations, which could negatively impact our ability to generate revenue from those products. Although we cannot predict the ultimateimpact of any such new laws and regulations, they will likely result in additional costs, or in the worst case decreased revenue, and could evenrequire that we redesign or change how we manufacture our products. Such redesigns result in additional costs and possible delayed or lostrevenue.We face risks related to "conflict minerals" reporting.Our products contain materials that are subject to the SEC's conflict minerals reporting requirements. These requirements require companies toperform ongoing diligence, and to disclose and report whether or not such minerals in their products originate from the Democratic Republic ofCongo and adjoining countries. We file such reports annually with the SEC on Form SD. Our relationships with customers and suppliers may beadversely affected if we are unable to describe our products as conflict-free. Additionally, our costs may increase if one or more of our customersdemand that we change the sourcing of materials we cannot identify as conflict-free.Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.Our worldwide operations could be adversely affected if disrupted for any reason, including natural disasters such as earthquakes, tsunamis,floods, hurricanes, typhoons, telecommunication or information technology system failures, regulatory or political issues, power or watershortages, fires, extreme weather conditions, medical epidemics or pandemics or other man- made disasters or catastrophic events. While wemaintain business interruption insurance for our facilities, the level of coverage might not be sufficient to cover potential losses. Accordingly, theoccurrence of any of these business disruptions for us or our third-party manufacturers, partners or customers could result in significant losses,seriously harm our revenue and financial condition, adversely affect our competitive position, increase our costs and expenses, and requiresubstantial expenditures and recovery time in order to fully resume operations. Our corporate headquarters, and a portion of our research anddevelopment activities, are located in California, and other critical business operations and some of our suppliers are located in California andAsia, near major earthquake faults known for seismic activity. The manufacture of product components, the final assembly of our products andother critical operations are concentrated in certain geographic locations, including the Philippines, Thailand, Malaysia, Japan, China and India. Wealso rely on major logistics hubs primarily in Asia to manufacture and distribute our products. The ultimate impact on us, our significant suppliersand our general infrastructure of being located near major earthquake faults and being consolidated in certain geographical areas is unknown.However, in the event of a major earthquake or other natural disaster or catastrophic event, our revenue, profitability and financial condition couldsuffer.29Changes to Board of Directors and senior management may disrupt our operations, our strategic focus or our ability to drive stockholdervalue.Our future success depends, in part, upon our ability to retain key members of our senior management team and our Board of Directors (the“Board”) and to attract and retain other highly qualified personnel for our Board and senior management positions. Turnover may disrupt ouroperations, our strategic focus or our ability to drive stockholder value. If we fail to attract new skilled personnel for our Board and seniormanagement positions, our business and growth prospects could be adversely impacted.Our governing documents provide indemnities to our officers and directors for which we have purchased insurance. If material liabilitieswere to arise in excess of our insurance coverage, our financial condition and results of operations could be materially impacted.Our certificate of incorporation, and by-laws require us to indemnify our officers and directors for certain liabilities that may arise in the course oftheir service to us. If we were required to pay a significant amount on account of these liabilities, or such liabilities were not covered by insurancecoverage, our business, financial condition and results of operations could be seriously harmed.ITEM 1B.UNRESOLVED STAFF COMMENTSNone.30ITEM 2.PROPERTIESOur executive offices are located in San Jose, California. The following table summarizes our primary properties as of the end of fiscal 2018: Location Square Footage Primary UseOwned: United States: San Jose, California 171,370 Administrative offices, research and developmentAustin, Texas 1,294,000 Manufacturing, research and development and administrative officesLynnwood, Washington 67,000 Administrative offices, research and developmentAsia: Cavite, Philippines* 221,000 Manufacturing, research and developmentBangkok, Thailand 253,300 Manufacturing, research and developmentPenang, Malaysia 175,900 Manufacturing, research and development and administrative offices* Co-owned with local investor. In fiscal 2018, we added 33,613 square feet of leased space for research and development, administrative, sales offices and design centerslocated in the United States, Asia and Europe. We believe that our current properties are suitable and adequate for our foreseeable needs. We mayneed to exit facilities as we continue to evaluate our business model and cost structure. ITEM 3.LEGAL PROCEEDINGSInformation with respect to this item may be found in Note 21 of the Notes to Consolidated Financial Statements under Item 8, which isincorporated herein by reference.ITEM 4.MINE SAFETY DISCLOSURESNot applicable.31PART IIITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIESMarket Information, Holders of Common Equity, and Performance GraphOur common stock is listed on the Nasdaq Global Select Market under the trading symbol “CY." As of February 20, 2019, there were approximately 1,261 registered holders of record of our common stock.The following line graph compares the yearly percentage change in the cumulative total stockholder return on our common stock against thecumulative total returns of the Standard and Poor (“S&P”) 500 Index and the S&P Semiconductors Select Industry Index for the last five fiscalyears:* $100 invested on 12/29/13 in stock or index, including reinvestment of dividends. Indexes calculated on month-end basis.Recent Sales of Unregistered SecuritiesOn March 7, 2018, we entered into a privately negotiated agreement with a certain holder of 2% 2020 Spansion Exchangeable Notes ("SpansionNotes") to induce the extinguishment of $10 million of the remaining $22 million aggregate principal amount of Spansion Notes outstanding (the“Exchange Transaction”). Pursuant to the terms of the Exchange Transaction, we paid to such holder cash in the amount of $10 millionrepresenting the par value of the principal amount of Spansion Notes exchanged in the Exchange Transaction and delivered 1.4 million shares (the“Shares”) of our Common Stock, par value $0.01 per share, for the conversion value in excess of the principal amount of such Spansion Notes. The Exchange Transaction was conducted as a private placement transaction and the Shares were issued pursuant to the exemption fromregistration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.Purchases of Equity Securities by the Issuer and Affiliated PurchasersStock Buyback Programs:Approval of a $450 Million Stock Buyback ProgramOn October 20, 2015, our Board of Directors (the “Board”) approved a share repurchase plan pursuant to which we are authorized to repurchase ourcommon stock in an aggregate amount not to exceed $450 million. The share32repurchase program does not obligate us to repurchase any specific number of shares and may be suspended or terminated at any time withoutprior notice and in compliance with legal and regulatory requirements. Yield Enhancement Program (“YEP”):In fiscal 2018, the Audit Committee approved a yield enhancement strategy intended to improve the yield on our available cash. As part of thisprogram, the Audit Committee authorized us to enter into short-term yield enhanced structured agreements, typically with maturities of 90 days orless, correlated to our stock price. Under the agreements we have entered into to date, we pay a fixed sum of cash upon execution of anagreement in exchange for the financial institution’s obligations to pay either a pre-determined amount of cash or shares of our common stockdepending on the closing market price of our common stock on the expiration date of the agreement. Upon expiration of each agreement, if theclosing market price of our common stock is above the pre-determined price, we will have our cash investment returned plus a yield substantiallyabove the yield currently available for short-term cash investments. If the closing market price is at or below the pre-determined price, we willreceive the number of shares specified at the agreement’s inception. As the outcome of these arrangements is based entirely on our stock priceand does not require us to deliver either shares or cash, other than the original investment, the entire transaction is recorded in equity. The sharesreceived upon the maturing of a yield enhancement structure are included in our “shares of common stock held in treasury” on the ConsolidatedBalance Sheets under Item 8. There was no activity in our yield enhanced structured agreements during fiscal 2017 and 2016.The table below sets forth information with respect to repurchases of our common stock made during fiscal 2016 and 2018 under this program, andthe activity of our settled yield enhanced structured agreement during fiscal 2018. There were no repurchases of our common stock in fiscal 2017. Total Numberof SharesPurchased Average PricePaid per Share Total Number ofShares Purchasedas Part of PubliclyAnnouncedPrograms Total DollarValue of SharesThat May Yet BePurchase Under thePlans or Programs (In thousands, except per-share amounts)Repurchases in fiscal 2016: January 4, 2016—April 3, 201623,822 $7.66 23,822 $210,968April 4, 2016—July 3, 20164 $9.74 4 $210,931July 4, 2016—October 2, 20162 $11.46 2 $210,913October 3, 2016—January 1, 20177 $10.59 7 $210,844Total repurchases in fiscal 201623,835 23,835 $210,844Repurchases in fiscal 2018: April 2, 2018—July 1, 2018610 $16.38 610 $200,845July 2, 2018—September 30, 2018598 $16.73 598 $190,846October 2018300 $12.6 300 $187,065November 2018585 $13.52 585 $179,157Total repurchases in fiscal 20182,093 2,093 $179,157Yield enhancement program in fiscal 2018 October 1, 2018—December 30, 2018250 $13.37 250 $175,815Total repurchases under this program31,836 31,836 ITEM 6.SELECTED FINANCIAL DATAThe following selected consolidated financial data is not necessarily indicative of results of future operations, and should be read in conjunctionwith Management’s Discussion and Analysis of Financial Condition and Results of33Operations under Part II, Item 7, and the Consolidated Financial Statements and Notes to the Consolidated Financial Statements under Part II,Item 8: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (2) January 3,2016 (2) December 28,2014 (2) (in thousands, except per-share amounts)Consolidated Statement of OperationsData: Revenues$2,483,840 $2,327,771 $1,923,108 $1,607,853 $725,497Operating income (loss)164,428 78,093 (608,738) (323,330) $22,873Net income (loss) (1)354,831 (80,783) (683,877) (367,563) $16,518Net (gain) loss attributable to non-controllinginterest, net of taxes$(239) $(132) $643 $2,271 $1,418Net income (loss) attributable to Cypress$354,592 $(80,915) $(683,234) $(365,292) $17,936 Net income (loss) attributable to Cypress pershare—basic$0.99 $(0.24) $(2.14) $(1.21) $0.11Net income (loss) attributable to Cypress pershare—diluted$0.95 $(0.24) $(2.14) $(1.21) $0.11 Dividends per share: Declared$0.44 $0.44 $0.44 $0.44 $0.44Paid$0.44 $0.44 $0.44 $0.44 $0.44Shares used in net income (loss) per-sharecalculation: Basic359,324 333,451 319,522 302,036 159,031Diluted372,178 333,451 319,522 302,036 169,122 As of December 30, 2018 December 31, 2017 January 1, 2017 (4) January 3,2016 (4) December 28,2014 (in thousands)Consolidated Balance Sheet Data: Cash, cash equivalents and short-terminvestments$285,720 $151,596 $121,144 $227,561 $118,812Working capital (1)$396,208 $147,854 $191,486 $326,114 $37,479Total assets (1)$3,693,215 $3,537,050 $3,871,871 $4,004,261 $743,281Debt (3)$881,178 $983,816 $1,225,131 $688,265 $243,250Stockholders’ equity (1)$2,117,039 $1,817,592 $1,892,752 2,716,423 $201,865 (1)Our Consolidated Financial Statements include the financial results of Spansion beginning March 12, 2015 and the financial results of the wireless IoT businessacquired from Broadcom beginning July 5, 2016. The comparability of our results for the years ended December 30, 2018, December 31, 2017, January 1, 2017, andJanuary 3, 2016 to the prior year is significantly impacted by these transactions.(2)During the fourth quarter of fiscal 2014, we started recognizing revenue for sales to certain distributors at the time of shipment (also referred to as "sell in" basis), ascompared to when the products were resold by the distributor to the end customer, as we determined we could reliably estimate returns and pricing concessions oncertain product families and with certain distributors. This change increased fiscal 2014 revenues by $12.3 million, net income by $6.2 million and net income per share,basic and diluted, by $0.04. The34change increased 2015 revenue by $40.9 million and decreased net loss by $25.0 million and net income per share, basic and diluted, by $0.08. The change increased2016 revenue by $59.2 million and decreased net loss by $19.5 million and net income per share, basic and diluted, by $0.06. As at the end of fiscal 2016, 100% of thedistribution revenue had been converted to the sell-in basis of revenue recognition.(3)The debt, net of costs, in fiscal year 2018 primarily included $467.9 million related to our Term Loan B, $135.1 million related to our 2% 2023 Exchangeable Notes,$256.7 million related to our 4.5% 2022 Senior Exchangeable Notes, and $11.4 million related to our 2% 2020 Spansion Exchangeable Notes. The debt, net of costs, infiscal year 2017 primarily included $90.0 million related to our Senior Secured Revolving Credit Facility, $495.4 million related to our Term Loan B, $131.4 million relatedto our 2% 2023 Exchangeable Notes, $246.6 million related to our 4.5% 2022 Senior Exchangeable Notes, and $20.4 million related to our 2% 2020 SpansionExchangeable Notes. The debt, net of costs, in fiscal year 2016 primarily included $332.0 million related to our Senior Secured Revolving Credit Facility, $95.0 millionrelated to our Term Loan A, $444.4 million of Term Loan B, $287.5 million related to our 4.5% 2022 Senior Exchangeable Notes, and $150 million related to our 2% 2020Spansion Exchangeable Notes. The debt, net of costs, in fiscal year 2015 primarily included $449.0 million related to our Senior Secured Revolving Credit Facility,$97.2 million related to our Term Loan A, $150.0 million related to our 2% 2020 Spansion Exchangeable Notes, $7.2 million related to our capital leases and $3.0 millionrelated to our equipment loans. The debt in fiscal year 2014, net of costs, primarily included $227.0 million related to our Senior Secured Revolving Credit Facility, $10.3million related to our capital leases, and $5.9 million related to our equipment loans. See Note 15 for more information on Credit Facility and other debt.ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with thefinancial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K. The MD&A contains forward-lookingstatements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of1934, as amended that involve risks and uncertainties, which are discussed under Item 1A.EXECUTIVE SUMMARYGeneralCypress Semiconductor Corporation (together with its consolidated subsidiaries, "Cypress", "the Company", "we" or "us") manufactures and sellsadvanced embedded system solutions for automotive, industrial, consumer and enterprise end markets. Cypress’ microcontroller, analog ICs,wireless and wired connectivity solutions and memory products help engineers design differentiated products and help with speed to market.Cypress is committed to providing customers with quality support and engineering resources.The Company operates on a 52 or 53-week fiscal year ending on the Sunday nearest to December 31. Fiscal years 2018, 2017 and 2016 eachcontained 52 weeks.Mergers, Acquisitions and DivestituresJoint Venture with SK hynix system ic Inc. ("SKHS")On October 23, 2018, we entered into an agreement whereby we will transfer our NAND business to a JV with SKHS. The transaction is subject tocustomary closing conditions and regulatory approvals. We presently expect that the transaction will be completed in the first quarter of fiscal2019. In addition to our NAND Flash business, we will contribute $2.4 million in cash towards the equity of the JV. We will own 40% of the JV’scommon stock. The NAND business is presently reported as part of the MPD segment. We recognized $167.3 million, $168.1 million and $180.5million in revenue from the NAND business for the years ended December 30, 2018, December 31, 2017 and January 1, 2017.Sale of Cypress Minnesota IncorporatedIn fiscal 2017, we completed the sale of our wafer fabrication facility in Minnesota for gross proceeds of $30.5 million.Investment in Deca Technologies Inc.On July 29, 2016, Deca Technologies Inc. ("Deca"), our majority owned subsidiary entered into a share purchase agreement, whereby certain third-party investors purchased 41.1% of the shares outstanding at that time for an35aggregate consideration of approximately $111.4 million. Concurrently, Deca repurchased certain of its preferred shares from us.After giving effect to the above transactions, our ownership in Deca was reduced to 52.2% as at July 29, 2016. As a consequence of thesubstantive rights afforded to third-party new investors in the share purchase agreement, including, among other things, participation on the Boardof directors of Deca, approval of operating plans and approval of indebtedness, we determined that we no longer have the power to direct theactivities of Deca that most significantly impact Deca's economic performance. However, as we continue to have significant influence over Deca'sfinancial and operating policies, effective July 29, 2016, our investment in Deca is being accounted for as an equity method investment andfinancial results of Deca are no longer being consolidated.Acquisition of Broadcom Corporation’s Internet of Things business (“wireless IoT business”)On July 5, 2016, we completed the acquisition of certain assets primarily related to the wireless IoT business of Broadcom pursuant to an AssetPurchase Agreement with Broadcom Corporation, dated April 28, 2016, for a total consideration of $550 million.Our consolidated financial statements include the financial results of the wireless IoT business acquired from Broadcom beginning July 5, 2016.The comparability of our results for the years ended December 30, 2018 and December 31, 2017 to the prior year is significantly impacted by thistransaction.Business DevelopmentsBusiness SegmentsWe continuously evaluate our reportable business segments in accordance with the applicable accounting guidance. Consistent with the yearended December 31, 2017, the Company operates under two reportable business segments, MPD and MCD, for the year ended December 30,2018.RESULTS OF OPERATIONSRevenuesOur total revenues increased by $156.1 million, or 6.7%, to $2,483.8 million for the year ended December 30, 2018 compared to the prior fiscalyear. For the year ended December 30, 2018, the increase was primarily driven by strength in automotive and wireless connectivity,microcontrollers, and memory products.Revenue for the year ended December 31, 2017 benefited from our acquisition of the IoT business of Broadcom, as compared to the prior yearwhich included such sales only for a partial period post acquisition.The following table summarizes our consolidated revenues by segments: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) MCD$1,474,442 $1,409,265 $994,482MPD1,009,398 918,506 928,626Total revenues$2,483,840 $2,327,771 $1,923,108Microcontroller and Connectivity Division:Revenues recorded by MCD increased in fiscal 2018 by $65.2 million, or 4.6%, compared to fiscal 2017. The increase was primarily driven bygrowth in our microcontrollers, wired and wireless connectivity and automotive products. MCD revenue during fiscal 2018 benefited from volumeincreases as a result of new program ramps at certain customers.36Revenues recorded by MCD increased in fiscal 2017 by $414.8 million, or 41.7%, compared to fiscal 2016. We acquired the wireless IoT businessacquired from Broadcom on July 5, 2016. Consequently, fiscal 2016 revenue included the results of the wireless IoT business for only a partialyear. Additionally, MCD revenues increased in fiscal 2017 as compared to fiscal 2016, due to increased revenue from our wired and wirelessconnectivity and microcontrollers products.Memory Products Division:Revenues recorded by MPD increased in fiscal 2018 by $90.9 million, or 9.9% compared to fiscal 2017. The increase was primarily due to growthin revenue from the Flash memory products. MPD revenue increased over fiscal 2017 primarily due to a shift in product mix towards high densityNOR products, as well as an increase in revenue on NAND products.Revenues recorded by MPD decreased in fiscal 2017 by $10.1 million, or 1.1% compared to fiscal 2016. The decrease was primarily due todeclines in revenue from memory products. MPD revenue decreased over fiscal 2016 due to a decline in revenue from NAND products offset bystrength in revenue from NOR products.Gross Profit & Margin Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) Revenues$2,483,840 $2,327,771 $1,923,108Less: Cost of revenues$1,552,385 $1,545,837 $1,464,612Gross profit931,455 781,934 458,496Gross margin (%)37.5% 33.6% 23.8% Our gross margin improved from 33.6% in fiscal 2017 to 37.5% in fiscal 2018. The primary drivers of the improvement in gross margin were higherfab utilization, which increased from 74.2% for the year ended December 31, 2017 to 81.2% for the year ended December 30, 2018; a reduction inthe cost of certain products; a shift in the product mix towards higher density memory products and a decrease in commoditized products; andramping of new products at favorable margins.Additionally, there was a reduction in write-downs of carrying value of inventory for the year ended December 30, 2018 as compared to the prioryear. Write-down of inventories for the year ended December 30, 2018 was $22.3 million as compared to $34.5 million for the year endedDecember 31, 2017. Write-down of inventories unfavorably impacted our gross margin by 0.9% and 1.5% for the year ended December 30, 2018and for the year ended December 31, 2017, respectively. Sale of inventory that was previously written off or written down aggregated to $19.5million and $31.6 million in fiscal 2018 and fiscal 2017, respectively, which favorably impacted our gross margin by 0.8% and 1.4%, respectively.Included in the cost of revenues are restructuring costs of $3.3 million and $0.6 million for fiscal 2018 and fiscal 2017, respectively. The increasein restructuring costs is primarily due to the 2018 Plan (as defined below), which we began implementing in the first quarter of 2018.Included in cost of revenues is the amortization of intangible assets of $196.0 million and $175.0 million for fiscal 2018 and fiscal 2017,respectively. The increase of the amortization of intangible assets is mainly due to the increase of in-process research and development("IPR&D") projects capitalized during the year.Included in cost of revenues in fiscal 2018 is the impairment of assets held for sale of $10.9 million as a result of entering into a definitiveagreement to divest the NAND products business to a joint venture with SKHS in October 2018.Our gross margin improved from 23.8% in fiscal 2016 to 33.6% in fiscal 2017. The primary drivers of the improvement in gross margin were salesfrom the acquired wireless IoT business, which were accretive to our gross margin in 2017, higher fab utilization, which increased from 56.0% forthe year ended January 1, 2017 to 74.2% for the year ended December 31, 2017, and a reduction in the cost of certain products and ramping ofnew products at accretive margins. This was partially offset by higher write downs of carrying value of inventory during the year ended December31, 2017 as compared to the same prior year period. Write-down of inventories for the37year ended December 31, 2017 was $34.5 million as compared to $25.3 million for the year ended January 1, 2017. Write-down of inventoriesunfavorably impacted our gross margin by 1.5% and 1.3% for the year ended December 31, 2017 and for the year ended January 1, 2017,respectively. Sale of inventory that was previously written off or written down aggregated to $31.6 million and $65.7 million in fiscal 2017 and fiscal2016, respectively, which favorably impacted our gross margin by 1.4% and 3.4%, respectively. Included in the cost of revenues are restructuringcosts of $0.5 million and $1.4 million for the fiscal 2017 and fiscal 2016, respectively. During fiscal 2016, we recognized $33.9 million ofimpairment charges related to two IPR&D projects that were canceled due to certain changes in our long-term product portfolio strategy duringfiscal 2016. In addition, we recorded an impairment charge of $37.2 million related to the sale of our wafer manufacturing facility located inBloomington, Minnesota, as well as a building in Austin, Texas during fiscal 2016, to reflect the estimated fair value, net of cost to sell theseassets. During fiscal 2017, we recorded a $1.2 million adjustment as a result of changes in certain estimates related to these assets, resulting in areduction of operating expense.Research and Development ("R&D") Our R&D efforts are focused on the development and design of new semiconductor products and design methodologies, as well as the continueddevelopment of advanced software platforms. Our R&D organization works with our manufacturing facilities, suppliers and customers to improveour semiconductor designs and lower our manufacturing costs.Our R&D groups conduct ongoing efforts to reduce design cycle time and increase first pass yield through structured re-use of intellectual propertyblocks from a controlled intellectual property library, development of computer-aided design tools and improved design business processes.Design and related software development work primarily occurs at design centers located in the United States, Ukraine, Ireland, Germany, Israel,India, Japan and China. Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)R&D expenses$363,996 $362,931 $347,131As a percentage of revenues14.7% 15.6% 18.1% R&D expenditures increased by $1.1 million in fiscal 2018 compared to the prior year. The increase was mainly attributable to $5.4 million inincreased labor costs mainly due to employee-related compensation expenses, $3.6 million increase in depreciation, and $1.8 million in licensingpayments to certain vendors, partially offset by a $4.1 million in lower restructuring costs, $3.8 million decrease in deferred compensationexpenses, and a $1.7 million decrease in stock-based compensation expenses.R&D expenditures increased by $15.8 million in fiscal 2017 compared to fiscal 2016. The increase was mainly attributable to $40.3 million ofexpenses due to the wireless IoT business acquisition which was primarily comprised of $28.2 million of increase in labor costs due to increasedheadcount and an increase of $12.1 million in expensed assets. The above increases were partially offset by a $1.4 million decrease in stock-based compensation expense and a $23.1 million decrease in other R&D expenses, mainly due to reduction in labor costs due to Cypress 3.0restructuring initiatives.Selling, General and Administrative ("SG&A") Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) SG&A expenses$403,031 $340,910 $720,103As a percentage of revenues16.2% 14.6% 37.4%38SG&A expenses increased by $62.1 million in fiscal 2018 compared to fiscal 2017. The increase was mainly due to an impairment of goodwillattributable to NAND of $65.7 million, a $9.1 million increase in restructuring costs, a $5.1 million increase in stock-based compensation, a $3.8million increase in higher professional fee, a $3.4 million increase in advertising expenses and a $2.5 million increase in facilities expenses,partially offset by a $14.3 million decrease in shareholder litigation, a $7.9 million decrease in labor expenses, and a $5.0 million decrease indeferred compensation expenses.SG&A expenses decreased by $379.2 million in fiscal 2017 compared to fiscal 2016. The decrease was mainly due to a goodwill impairmentcharge of $488.5 million related to our former PSD reporting unit, a $15.4 million decrease in acquisition cost related to the wireless IoTacquisition, a $6.1 million decrease in restructuring cost, a $5.0 million decrease in executive severance costs and a $10.0 million decrease innon-recurring costs, partially offset by a $112.8 million decrease in gain related to Deca Technologies (the gain was recorded in 2016), a $14.3million increase in shareholder litigation and proxy related expenses, a $8.2 million increase in labor costs, a $5.4 million increase in wireless IoTbusiness operating expenses, and an increase of $3.1 million in stock-based compensation expenses.Interest expenseInterest expense for fiscal 2018 was $65.3 million and primarily represents interest payments due and amortization of debt discount and costsrelated to our 2% 2023 Exchangeable Notes, 4.5% 2022 Senior Exchangeable Notes, 2% 2020 Spansion Exchangeable Notes, and interestexpense incurred on our Revolving Credit Facility, Term Loan B and other debt. In addition, of the $65.3 million, $5.2 million was related to therefinancing and write-off of debt issuance costs upon the debt amendment for Term Loan B and the extinguishment for the 2% 2020 SpansionExchangeable Notes.Interest expense for fiscal 2017 was $80.2 million and primarily represents interest payments due and amortization of debt discount and costsrelated to our 2% 2023 Exchangeable Notes, 4.5% 2022 Senior Exchangeable Notes, and 2% 2020 Spansion Exchangeable Notes, and interestexpense incurred on our Revolving Credit Facility, Term Loan B and other debt. In addition, of the $80.2 million, $7.2 million was related to the debtextinguishment of the 2% 2020 Spansion Exchangeable Notes and Term Loan A.Interest expense for fiscal 2016 was $55.2 million and represents interest payments due and amortization of debt discount and costs related to our4.50% Senior Exchangeable Notes and 2% Senior Exchangeable Notes, and interest expense incurred on our revolving line of credit, Term LoanA, Term Loan B and other debt.Refer to Note 15 of the Notes to Consolidated Financial Statements under Item 8 for more information about our credit facility and other debt.Other Income (expense), NetThe following table summarizes the components of other income (expense), net: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) Interest income$— $568 $1,836Changes in fair value of investments under the deferred compensation plan(2,904) 6,087 2,326Unrealized (loss) gain on marketable securities— — 325Foreign currency exchange and other (losses) gains, net(340) (1,838) (4,251)(Loss) gain on sale of investments351 — (265)Other375 (549) 342Other (expense) income, net$(2,518) $4,268 $313 Employee Deferred Compensation Plan39We have a deferred compensation plan, which provides certain key employees, including our executive management, with the ability to defer thereceipt of compensation in order to accumulate funds for retirement on a tax-deferred basis. We do not make contributions to the deferredcompensation plan and we do not guarantee returns on the investments. Participant deferrals and investment gains and losses remain as ourliabilities and the underlying assets are subject to claims of general creditors. In fiscal 2018, 2017 and 2016, we recognized changes in fair valueof the assets under the deferred compensation plan in "Other income (expense), net" of $(2.9) million, $6.1 million, and $2.3 million, respectively.The increase or decrease in the fair value of the investments relates to the increased or decreased performance of the portfolio on a year over yearbasis. Refer to Note 19 of the Notes to Consolidated Financial Statements under Item 8 for more information about our deferred compensationplan.Share in Net Loss and Impairment of Equity Method InvesteesWe have been making investments in Enovix Corporation ("Enovix"), a privately held development stage company. Our investment holdingcomprised 24.8%, 41.2% and 46.6% of Enovix's equity at the end of fiscal 2018, 2017 and 2016, respectively. Since the fourth quarter of 2014 wehave been accounting for our investment in Enovix using the equity method of accounting. During the fourth quarter of 2017, Enovix missedachieving certain key planned product development milestones. We considered various factors in determining whether to recognize an impairmentcharge, including the expectations of the investee's future cash flows and capital needs, the length of time the investee has been in a lossposition, the ability to achieve milestones, and the near-term prospect of the investee and its exit strategy. Enovix’s estimated enterprise value issensitive to its ability to achieve these milestones. Consequently, we concluded that our investment in Enovix had suffered an other-than-temporary impairment and we recorded a charge of $51.2 million.In fiscal 2018, we did not record any share of losses recorded by Enovix. During fiscal 2017 and 2016, we recorded $8.7 million and $9.9 million,respectively, for our share of losses recorded by Enovix.In the second quarter of fiscal 2016, we changed the basis of accounting for our investment in Deca Technologies Inc. ("Deca") to the equitymethod of accounting. As at the end of fiscal years 2018 and 2017, our investment comprised 52.5% of Deca's equity. During the fourth quarter offiscal 2018, the Company determined that its investment in Deca, which is accounted for as an equity method investment, was other-thantemporarily impaired due to to failure to achieve significant product development and testing milestones. We considered various factors indetermining whether to recognize an impairment charge, including the expectations of the investee's future cash flows and capital needs, thelength of time the investee has been in a loss position, the ability to achieve milestones, and the near-term prospect of the investee and its exitstrategy. Deca’s estimated enterprise value is sensitive to its ability to achieve these milestones. Consequently, we recognized a charge of $41.5million in order to write down the carrying amount of the investment to the estimated fair value of $65.1 million as at end of fiscal 2018. This writedown was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations.During fiscal 2018 and 2017, we recorded $15.8 million and $11.8 million, respectively, for our share of losses recorded by Deca.Income TaxesWe recorded an income tax benefit of $315.6 million in fiscal 2018, and income tax provisions of $11.2 million and $2.6 million in fiscal 2017 and2016, respectively. The income tax benefit for 2018 was primarily due to a release of our valuation allowance previously maintained against certaindeferred tax assets of $343.3 million, as discussed further below. The income tax expenses for fiscal 2017 and 2016 were primarily attributable toincome taxes associated with our non-U.S. operations, partially offset by release of previously accrued taxes related to the lapsing of statutes oflimitation.A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not thatall or a portion of the deferred tax assets will not be realized. We regularly assess our valuation allowance against deferred tax assets on ajurisdiction by jurisdiction basis. We consider all available positive and negative evidence, including future reversals of temporary differences,projected future taxable income, tax planning strategies and recent financial results. During the fourth quarter of 2018, the Company emerged froma cumulative loss position over the previous three years. The cumulative three-year pre-tax income is considered positive evidence which isobjective and verifiable and thus received significant weighting. The continued pattern of income before tax, recent global restructuring executed infiscal 2018 and projected future operating income in the U.S. was additional positive evidence. As a result, the Company released $343.3 million ofthe valuation allowance attributable to certain U.S. deferred tax assets during 2018.40Our effective tax rate varies from the U.S. statutory rate primarily due to a release of valuation allowance and earnings of foreign subsidiariestaxed at different rates. The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. Weregularly assess our tax positions in light of legislative, bilateral tax treaties, and regulatory and judicial developments in the many countries inwhich we and our affiliates do business.LIQUIDITY AND CAPITAL RESOURCESOur Revolving Credit Facility has a capacity of $540 million. As of December 30, 2018, the Revolving Credit Facility was undrawn and provided aguarantee for one outstanding letter of credit for $1 million.The following table summarizes our consolidated cash, cash equivalents and short-term investments and working capital: As of December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Cash, cash equivalents and short-term investments$285,720 $151,596 $121,144Working capital, net$396,208 $147,854 $191,486 Key Components of Cash Flows Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands)Net cash provided by operating activities$471,700 $403,487 $217,419Net cash used in investing activities$(49,690) $(14,429) $(613,439)Net cash provided by (used in) financing activities$(287,886) $(357,634) $289,502Fiscal 2018:Operating ActivitiesNet cash provided by operating activities during fiscal 2018 was $471.7 million consisted of (in millions):Net income $354.8Non-cash items Stock-based compensation expenses 96.0 Depreciation and amortization 283.0 Impairment of assets held for sale 76.6 Loss on sale or retirement of property and equipment, net 7.5 Change in interest rate swaps 2.8 Share in net loss and impairment of equity method investees 57.4 Accretion of interest expense on Senior Exchangeable Notes and amortization of debt and financing costs onother debt 19.5 Release of valuation allowance (343.3) Loss on extinguishment of debt 5.2 Restructuring and other costs 16.1Changes in operating asset and liability accounts (103.9) $471.741The decrease in net cash due to changes in operating assets and liabilities during fiscal 2018 of $103.9 million was primarily due to the following:•an increase in accounts receivables of $23.8 million mainly due to an increase in revenue,•an increase in inventories of $20.8 million,•an increase in other current and long-term assets of $5.4 million,•a decrease in accounts payable and accrued and other liabilities of $36.7 million mainly due to timing of payments and payments relatedto restructuring activities,•a decrease in price adjustments and other distributor related reserved of $14.5 million, and•an increase in assets held for sale related inventories of $13.5 million due to the sale of NAND business.Investing ActivitiesIn fiscal 2018, we used approximately $49.7 million of cash in our investing activities primarily due to:•$68.9 million of cash used for property and equipment expenditures relating to purchases of certain laboratory and manufacturing facilityequipment, partially offset by:•$5.8 million of cash received on the sales of property and equipment, and•$18.5 million of cash received related to our investments in privately held equity interests.Financing ActivitiesIn fiscal 2018, we used approximately $287.9 million of cash in our financing activities, primarily related to:•$157.4 million dividend payments,•net repayments of $90.0 million on the Senior Secured Revolving Credit Facility,•$35.6 million repayment of Term Loan B.•$35.0 million for stock repurchase,•$10.0 million repayment of 2% 2020 Spansion Exchangeable Notes, and•The above payments were partially offset by $40.7 million due to issuance of common stock.Fiscal 2017:Operating ActivitiesNet cash provided by operating activities during fiscal 2017 was $403.5 million consisted of (in millions):Net income (80.8)Non-cash items Stock-based compensation expenses 91.6 Depreciation and amortization 264.9 Gain on divestitures (1.2) Gain on sale or retirement of property and equipment, net (1.2) Share in net loss and impairment of equity method investees 71.8 Accretion of interest expense on Senior Exchangeable Notes and amortization of debt and financing costson other debt 21.1 Loss on extinguishment of debt 7.2 Restructuring and other costs 9.0Changes in operating asset and liability accounts 21.1 403.5The increase in net cash due to changes in operating assets and liabilities during fiscal 2016 of $21.1 million was primarily due to the following:42•a decrease in accounts payable and accrued and other liabilities of $59.0 million mainly due to timing of payments and payments relatedto restructuring activities,•an increase in price adjustments and other distributor related reserves of $19.1 million,•an increase in inventories of $14.3 million to support increased expected demand for IoT and other MCD products,•an increase in other current and long-term assets of $9.6 million, primarily due to timing of payments for certain licenses, and•an increase in accounts receivables of $37.0 million mainly due to an increase in revenue.Investing ActivitiesIn fiscal 2017, we used approximately $14.4 million of cash in our investing activities primarily due to:•$54.3 million of cash used for property and equipment expenditures relating to purchases of certain laboratory and manufacturing facilityequipment and $9.3 million related to our equity method and cost method investments, partially offset by:•$35.5 million of cash received on the sale of the wafer manufacturing facility located in Bloomington, Minnesota and a building in Austin,Texas,•receipt of $10.0 million of previously escrowed consideration from the divestiture of our TrueTouch® mobile touchscreen business, and•$2.3 million of cash received on the sales of property and equipment.Financing ActivitiesIn fiscal 2017, we used approximately $357.6 million of cash in financing activities, primarily from:•$144.7 million in dividend payments,•net repayments of $242.0 million on the Revolving Credit Facility,•$128.0 million repayment of 2% 2020 Spansion Exchangeable Notes, and•$118.7 million repayment of Term Loan A and Term Loan B.•The above payments were partially offset by $91.3 million of borrowings under Term Loan B and $150.0 million of borrowing under 2% 2023Exchangeable Notes.Liquidity and Contractual ObligationsSummary of our debt balances is included below: December 30, 2018 Principal amountoutstanding Less: Unamortized discountand issuance costs Net carrying valueoutstanding (in thousands)Term Loan B 476,310 8,391 467,9192% 2020 Spansion Exchangeable Notes 11,990 552 11,4384.5% 2022 Senior Exchangeable Notes 287,500 30,774 256,7262% 2023 Exchangeable Notes 150,000 14,943 135,057Capital Lease Obligation $10,038 $— $10,038Total Debt $935,838 $54,660 $881,178Of the total principal amount outstanding, $6.9 million related to Term Loan B and capital lease obligation is classified in current liabilities as ofDecember 30, 2018.43 December 31, 2017 Principal amountoutstanding Less: Unamortized discountand issuance costs Net carrying valueoutstanding (in thousands)Senior Secured Revolving Credit Facility $90,000 $— $90,000Term Loan B 511,924 16,541 495,3832% 2020 Spansion Exchangeable Notes 21,990 1,615 20,3754.5% 2022 Senior Exchangeable Notes 287,500 40,864 246,6362% 2023 Exchangeable Notes 150,000 18,578 131,422Total Debt $1,061,414 $77,598 $983,816Of the total principal amount outstanding, $27.3 million related to Term Loan B was classified in current liabilities as of December 31, 2017.On March 12, 2015, we entered into an Amended and Restated Credit and Guaranty Agreement with Morgan Stanley Bank, N.A., as issuing bank,and other lenders (as amended, the "Credit Agreement"). The Credit Agreement establishes a credit facility (the "Credit Facility" or "SeniorSecured Credit Facility") that includes a revolving loan facility (the "Revolving Credit Facility") and provides for the possibility of term loans.The Revolving Credit Facility provides for $540 million of borrowing capacity, of which $450 million was available at December 31, 2017 and $540million was available at December 31, 2018.We believe that the liquidity provided by existing cash, cash equivalents and our borrowing arrangements will provide sufficient capital to meet ourrequirements for at least the next twelve months. However, should economic conditions and/or financial, business and other factors beyond ourcontrol adversely affect the estimates of our future cash requirements, we could be required to fund our cash requirements by alternative financing.There can be no assurance that additional financing, if needed, would be available on terms acceptable to us or at all. In addition, we may chooseat any time to raise additional capital or debt to strengthen our financial position, facilitate growth, enter into strategic initiatives (including theacquisition of other companies) and provide us with additional flexibility to take advantage of other business opportunities that arise. As ofDecember 30, 2018, we were in compliance with all of the financial covenants under the Senior Secured Credit Facility.Refer to Note 15 of the Notes to Consolidated Financial Statements under Item 8 for more information on our debt obligations.44Contractual ObligationsThe following table summarizes our contractual obligations as of December 30, 2018: Total 2019 2020 and 2021 2022 and 2023 After 2023 (In thousands)Purchase obligations (1)$402,918 $169,033 $181,622 $52,263 $—Operating lease commitments (2)62,876 29,315 21,036 8,717 3,808Capital lease commitments10,038 1,687 3,397 3,513 1,4412% 2023 Exchangeable Notes150,000 — — 150,000 —4.5% 2022 Senior Exchangeable Notes287,500 — — 287,500 —2% 2020 Spansion Exchangeable Notes11,990 — 11,990 — —Term Loan B476,310 5,051 471,259 — —Interest and commitment fee due on debt (3)105,342 38,164 63,026 4,113 39Asset retirement obligations$5,916 $1,614 $3,966 $336 $—Total contractual obligations$1,512,890 $244,864 $756,296 $506,442 $5,288 (1)Purchase obligations primarily include non-cancelable purchase orders for materials, services, manufacturing equipment, building improvements and supplies in theordinary course of business. Purchase obligations are defined as enforceable agreements that are legally binding on us and that specify all significant terms, includingquantity, price and timing, that have remaining terms in excess of one year.(2)Operating leases include payments in 2019 relating to Spansion's lease for which the Company has signed a termination agreement, see Note 11.(3)Interest and commitment fees due on variable debt is based on the effective interest rates as of December 30, 2018.Capital Resources and Financial ConditionOur long-term strategy is to minimize the amount of cash required for operational purposes and to utilize the remaining amount of our cashinvesting in interest-bearing and highly liquid cash equivalents and debt securities, repayment of debt, the purchase of our stock through our stockbuyback program and payments of regularly scheduled cash dividends. In addition, we may use excess cash to invest in strategic investmentsand partnerships and pursue acquisitions. Our investment policy defines three main objectives when buying investments: security of principal,liquidity, and maximization of after-tax yield. We invest excess cash in various financial securities subject to certain requirements includingsecurity type, duration, concentration limits, and credit rating profile.As of December 30, 2018, a total cash and cash equivalents position of $285.7 million is available for use in current operations.As of December 30, 2018, approximately 23.8% of our cash and cash equivalents are held outside of the United States. While these amounts areprimarily invested in U.S. dollars, a portion is held in foreign currencies. All offshore balances are exposed to local political, banking, currencycontrol and other risks. In addition, these amounts, if repatriated may be subject to tax and other transfer restrictions.In December 2017, we entered into fixed-for-floating interest rate forward swap agreements (expiring July 2021) with two counterparties startingfrom April 2018, to swap variable interest payments on our debt for fixed interest payments. The aggregate notional amount of these interest rateswaps was $300 million. The interest rate on the variable debt was fixed in December 2017 and became effective in April 2017.On March 7, 2018, we entered into a privately negotiated agreement to induce the extinguishment of $10 million of the remaining $22 million ofSpansion Notes outstanding. We paid the holders of the Spansion Notes cash for the aggregate principal of $10 million and delivered 1.4million shares of common stock for the value in excess of the principal amount.45On March 12, 2018, we amended our Credit Agreement. The amendment reduces the applicable margins on the Revolving Credit Facility and TermLoan B. After giving effect to the amendment, the Term Loan B bore interest, at our option, at the base rate plus an applicable margin of 1.25% orthe Eurodollar rate plus an applicable margin of 2.25%; and the Revolving Credit Facility bore interest, at our option, at the base rate plus anapplicable margin of either 0.75% or 1.00%, depending on our secured leverage ratio, or the Eurodollar rate plus an applicable marginof 1.75% or 2.00%, depending on the Company's secured leverage ratio. The amendment removed the fixed charge coverage ratio financialcovenants. In addition, for Term Loan B, the amendment removed the total leverage ratio covenant, changed the required amortization paymentsto 1% per annum, and waived the excess cash flow mandatory repayment for fiscal 2017.On September 13, 2018, we again amended our Credit Agreement. The amendment reduces the applicable margin for Term Loan B. After givingeffect to the amendment, Term Loan B will bear interest, at our option, at the base rate plus an applicable margin of 1.00% or the Eurodollar rateplus an applicable margin of 2.00%. In addition, for Term Loan B, the amendment waived the excess cash flow mandatory repayment for fiscal2018. As part of the transaction we repaid $25.0 million of outstanding Term Loan B principal.In October 2018, we entered into fixed-for-floating interest rate forward swap agreements starting in July 2021 with two counterparties to swapvariable interest payments on expected future debt for fixed interest payments; these agreements will expire in December 2024. The aggregatenotional amount of these interest rate swaps is $300 million.We believe that liquidity provided by existing cash, cash equivalents and investments, our cash from operations and our borrowing arrangementswill provide sufficient capital to meet our requirements for at least the next twelve months. However, if economic conditions deteriorate, debtcovenants unexpectedly impact our business, and/or financial, business and other factors beyond our control adversely affect our estimates of ourfuture cash requirements, we could be required to fund our cash requirements by alternative financing. There can be no assurance that additionalfinancing, if needed, would be available on terms acceptable to us or at all. We may also choose at any time to raise additional capital or debt tostrengthen our financial position, facilitate growth, enter into strategic initiatives including the acquisition of other companies, repurchase shares ofour stock, increase our dividends or pay a special dividend and provide us with additional flexibility to take advantage of other businessopportunities that arise.CRITICAL ACCOUNTING POLICIES AND ESTIMATESThe discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included inthis Annual Report on Form 10-K and the data used to prepare them. Our consolidated financial statements have been prepared in accordance withaccounting principles generally accepted in the United States and we are required to make estimates, judgments and assumptions in the course ofsuch preparation. Note 1 of the Notes to Consolidated Financial Statements under Item 8 describes the significant accounting policies andmethods used in the preparation of the consolidated financial statements. On an ongoing basis, we re-evaluate our judgments and estimatesincluding those related to revenue recognition, allowances for doubtful accounts receivable, inventory valuation, valuation of long-lived assets,goodwill and financial instruments, stock-based compensation, and settlement costs, and income taxes. We base our estimates and judgments onhistorical experience, knowledge of current conditions and our beliefs of what could occur in the future considering available information. Actualresults may differ from these estimates under different assumptions or conditions. Our critical accounting policies that are affected by significantestimates, assumptions and judgments used in the preparation of our consolidated financial statements are as follows:Revenue Recognition:On January 1, 2018, the Company adopted ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." This standard updateoutlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted using themodified retrospective method applied to all contracts that were not completed contracts at the date of initial application (i.e., January 1, 2018).Results for reporting periods after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to bereported in accordance with the Company's historic accounting under Topic 605.Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects theconsideration to which the Company expects to be entitled in exchange for those goods or46services. Sales of products with alternative use account for the majority of the Company's revenue and are recognized at a point in time.Sales to certain distributors are made under arrangements that provide the distributors with price adjustments, price protection, stock rotation andother allowances under certain circumstances. These adjustments and allowances are accounted for as variable consideration. The Companyestimates these amounts based on the expected amount to be provided to customers and reduce revenue recognized. The Company believes thatthere will not be significant changes to its estimates of variable consideration.If the arrangement includes variable contingent consideration, the Company recognizes revenue over time if management can reasonably measureits progress or is capable of providing reliable information as required to apply an appropriate method of measuring progress.Business Combinations:We apply the provisions of Accounting Standards Codification 805, Business Combinations ("ASC 805"), in the accounting for acquisitions. Itrequires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill asof the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assetsacquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilitiesassumed at the acquisition date as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject torefinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to theassets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or finaldetermination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to ourConsolidated Statements of Operations. Accounting for business combinations requires our management to make significant estimates andassumptions, especially at the acquisition date including our estimates for intangible assets, contractual obligations assumed, restructuringliabilities, pre-acquisition contingencies and contingent consideration, where applicable. Although we believe the assumptions and estimates wehave made have been reasonable and appropriate, they are based in part on historical experience and information obtained from our managementof the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include butare not limited to: future expected cash flows from product sales, customer contracts and acquired technologies, expected costs to develop in-process research and development into commercially viable products and estimated cash flows from the projects when completed and discountrates. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actualresults.Valuation of Inventories:Management periodically reviews the adequacy of our inventory reserves. We record a write-down for our inventories which have become obsoleteor are in excess of anticipated demand or net realizable value. We perform a detailed review of inventories each quarter that considers multiplefactors including demand forecasts, product life cycle status, product development plans and current sales levels. Inventory reserves are notreleased until the related inventory has been sold or scrapped. Our inventories may be subject to rapid technological obsolescence and are sold ina highly competitive industry. If there were a sudden and significant decrease in demand for our products, or if there were a higher incidence ofinventory obsolescence because of rapidly changing technology and customer requirements, we could be required to record additional write-downs,and our gross margin could be adversely affected.Valuation of Long-Lived Assets:Our business requires heavy investment in manufacturing facilities and equipment that are technologically advanced but can quickly becomesignificantly under-utilized or rendered obsolete by rapid changes in demand. In addition, we have recorded intangible assets with finite livesrelated to our acquisitions.We evaluate our long-lived assets, including property, plant and equipment and purchased intangible assets with finite lives, for impairmentwhenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors consideredimportant that could result in an impairment review include significant underperformance relative to expected historical or projected future operatingresults, significant changes47in the manner of use of the assets or the strategy for our business, significant negative industry or economic trends, and a significant decline inour stock price for a sustained period of time. Impairments are recognized based on the difference between the fair value of the asset and itscarrying value, and fair value is generally measured based on discounted cash flow analysis. If there is a significant adverse change in ourbusiness in the future, we may be required to record impairment charges on our long-lived assets.Valuation of Goodwill:Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in abusiness combination. We assess our goodwill for impairment on an annual basis. Additionally, if certain events or circumstances indicate that animpairment loss may have been incurred, we will also perform an impairment assessment on an interim basis. In accordance with ASU 2011-08,Testing Goodwill for Impairment, qualitative factors can be assessed to determine whether it is necessary to perform the current two-step test forgoodwill impairment. If we believe, as a result of our qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit isless than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required.Investments in equity interestsInvestments in the stock of entities in which we exercise significant influence but do not own a majority equity interest or otherwise control areaccounted for using the equity method and are included as equity method investments in our consolidated balance sheets. We record our share ofthe results of those companies within share in net loss and impairment of equity method investees in our consolidated statements of operations.Investments in privately held equity interests in which we do not exercise significant influence are accounted for using the cost method ofaccounting and are included in other long-term assets in our consolidated balance sheets.We review our investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the carryingvalue of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysisto determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The determination offair value of the investment involves considering factors such as current economic and market conditions, the operating performance of theentities including current earnings trends and forecasted cash flows, and other company and industry specific information.Cash Flow Hedges:We recognize derivative instruments from hedging activities as either assets or liabilities on the balance sheet and measure them at fair value.Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated andqualifies for hedge accounting. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of thehedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. We record changes in theintrinsic value of these cash flow hedges in accumulated other comprehensive loss on the Consolidated Balance Sheets, until the forecastedtransaction occurs. When the forecasted transaction occurs, we reclassify the related gain or loss on the cash flow hedge to the appropriaterevenue or expense line of the Consolidated Statements of Operations. In the event the underlying forecasted transaction does not occur, or itbecomes probable that it will not occur, we will reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensiveloss to other income (expense), net in our Consolidated Statements of Operations at that time.We enter into cash flow hedges to protect non-functional currency revenues, inventory purchases and certain other operational expenses againstvariability in cash flows due to foreign currency fluctuations. Our foreign currency forward contracts that were designated as cash flow hedgeshave maturities between three and thirteen months. We evaluate hedge effectiveness at the inception of the hedge prospectively as well asretrospectively and record any ineffective portion of the hedge in other income (expense), net in the Consolidated Statements of Operations. We enter into interest rate swaps to manage the variability in cash flow due to interest rate fluctuations. We evaluate hedge effectiveness at theinception of the hedge prospectively as well as retrospectively and record any ineffective portion of the hedge in other income (expense), net in ourConsolidated Statements of48Operations. Changes in the fair value of interest rate swaps that have been designated as hedging instruments are recognized in accumulatedother comprehensive income (loss).Refer to Note 12 of the Notes to Consolidated Financial Statements under Item 8 for further details on cash flow and balance sheet hedges.Share-Based Compensation:Under the fair value recognition provisions of the guidance, we recognize share-based compensation based on the grant date fair value of theaward and recognize share-based compensation over the service period, which is usually the vesting period. Determining the appropriate fair valuemodel and calculating the fair value of share-based payment awards require the input of highly subjective assumptions, including measurement ofthe level of achievement of performance milestones, the expected life of the share-based payment awards and stock price volatility. Theassumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimatesinvolve inherent uncertainties and the application of management judgment. Through fiscal 2016, we estimated the expected forfeiture rate andonly recognized the expense for those shares expected to vest. Beginning fiscal 2017, with the adoption of ASU 2016-09, "Compensation - StockCompensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," we elected to recognize forfeitures as they occurredand adopted these changes using a modified retrospective approach, with a cumulative adjustment recorded to opening accumulative deficit. As aresult, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.Employee Benefit Plans:In connection with the merger with Spansion, we assumed the Spansion Innovates Group Cash Balance Plan (a defined benefit pension plan) inJapan. A defined benefit pension plan is accounted for on an actuarial basis, which requires the selection of various assumptions such as turnoverrates, discount rates and other factors. The discount rate assumption is determined by comparing the projected benefit payments to the Japanesecorporate bonds yield curve as of the end of the most recently completed fiscal year. The benefit obligation is the projected benefit obligation(PBO), which represents the actuarial present value of benefits expected to be paid upon retirement. This liability is recorded in other long-termliabilities on the Consolidated Balance Sheets. Net periodic pension cost is recorded in the Consolidated Statements of Operations and includesservice cost. Service cost represents the actuarial present value of participant benefits earned in the current year. Interest cost represents thetime value of money associated with the passage of time on the PBO. Gains or losses resulting from a change in the PBO if actual results differfrom actuarial assumptions will be accumulated and amortized over the future life of the plan participants if they exceed 10% of the PBO, beingthe corridor amount. If the amount of a net gain or loss does not exceed the corridor amount, it will be recorded to other comprehensive income(loss). See Note 19 of the Notes to Consolidated Financial Statements for further details of the pension plans.Accounting for Income Taxes:A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not thatall or a portion of the deferred tax assets will not be realized. We regularly assess our valuation allowance against deferred tax assets on ajurisdiction by jurisdiction basis. We consider all available positive and negative evidence, including future reversals of temporary differences,projected future taxable income, tax planning strategies and recent financial results. During the fourth quarter of 2018, the Company emerged froma cumulative loss position over the previous three years. The cumulative three-year pre-tax income is considered positive evidence which isobjective and verifiable and thus received significant weighting. The continued pattern of income before tax, recent global restructuring executed infiscal 2018 and projected future operating income in the U.S. was additional positive evidence. As a result, the Company released $343.3 million ofthe valuation allowance attributable to certain U.S. deferred tax assets during 2018.Recent Accounting PronouncementsSee "Recent Accounting Pronouncements" in Note 1 of the Notes to Consolidated Financial Statements under Item 8 of this Annual Report onForm 10-K. ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK49Interest Rate RisksOur investment portfolio consists of a variety of financial instruments that expose us to interest rate risk, including, but not limited to, moneymarket funds, and certificates of deposit. Due to the relatively short-term nature of our investment portfolio, we do not believe that an immediateincrease in interest rates would have a material effect on the fair market value of our portfolio.Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to our revolvingcredit facility, term loans and exchangeable notes. Interest on the exchangeable notes is fixed and interest on our term loans is at variable rates.The interest rate on the term loans is tied to short-term interest rate benchmarks including the prime rate and the London inter-bank offered rate, orLIBOR.In December 2017, we entered into fixed-for-floating interest rate forward swap agreements with two counterparties, starting from April 2018, toswap variable interest payments on our debt for fixed interest payments. These agreements will expire in July 2021. The objective of the swap wasto effectively fix the interest rate at current levels without having to refinance the outstanding term loan, thereby avoiding the incurrence oftransaction costs. Under these arrangements, the interest rate on the variable debt became fixed in April 2018. On January 3, 2018, we evaluatedthe hedge effectiveness of the interest rate swaps and have designated these swaps as hedging instruments. Upon designation as hedgeinstruments, future changes in fair value of these swaps will be recognized in accumulated other comprehensive income (loss). As of December30, 2018, these swaps were designated as hedging instruments. As of December 30, 2018, the aggregate notional amount of these interest rateswaps was $300 million.In October 2018, the Company entered into fixed-for-floating interest rate forward swap agreements starting in July 2021 with two counterparties toswap variable interest payments on expected future debt for fixed interest payments; these agreements will expire in December 2024. Theobjective of the swaps was to effectively fix the future interest rate at the level currently available to avoid the uncertainty in financing cost for aportion of debt due to future interest rate fluctuations. The aggregate notional amount of these interest rate swaps was $300 million. The Companyhas evaluated the hedge effectiveness of the interest rate swaps and has designated these swaps as cash flow hedges of debt with futurechanges in fair value of these swaps recognized in accumulated other comprehensive income (loss).A one hundred basis point change in the contractual interest rates would change our interest expense for the Revolving Credit Facility and TermLoan B by approximately $1.8 million annually.Our long-term operating results and cash flows may be materially affected to a significant degree by a sudden change in market interest rates.Foreign Currency Exchange RiskWe operate and sell products in various global markets and purchase capital equipment using foreign currencies but our transactions arepredominantly denominated in U.S. dollars. We are exposed to certain risks associated with changes in foreign currency exchange rates inJapanese yen and other foreign currencies.Example of our foreign currency transactions including:•sales of our products to Japanese distributors are denominated in U.S. dollars, Japanese yen and Euros;•some of our manufacturing costs are denominated in Japanese yen, and other foreign currencies such as the Thai Baht, Philippine Peso andMalaysian Ringgit; and•some fixed asset purchases and sales are denominated in other foreign currencies. Consequently, movements in exchange rates could cause our revenues and our expenses to fluctuate, affecting our profitability and cash flows.We use foreign currency forward contracts to reduce our foreign exchange exposure on our foreign currency denominated assets and liabilities. Wehedge a percentage of our forecasted revenue and expenses denominated in Japanese yen with foreign currency forward contracts. The objectiveof these contracts is to mitigate impact of foreign currency exchange rate movements to our operating results on a short-term basis. We do notuse these contracts for speculative or trading purposes.50We analyzed our foreign currency exposure, including our hedging strategies, to identify assets and liabilities denominated in other currencies. Forthose assets and liabilities, we evaluated the effects of a 10% shift in exchange rates between those currencies and the U.S. dollar. We havedetermined that there would be an immaterial effect on our results of operations from such a shift. Please see Note 12 of the Notes toConsolidated Financial Statements under Item 8 for details on the contracts.51ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINDEX TO CONSOLIDATED FINANCIAL STATEMENTS PageConsolidated Balance Sheets53 Consolidated Statements of Operations54 Consolidated Statements of Comprehensive Income (Loss)55 Consolidated Statements of Stockholders’ Equity56 Consolidated Statements of Cash Flows58 Notes to Consolidated Financial Statements60 Report of Independent Registered Public Accounting Firm110 Supplemental Financial Data - Quarterly Data (Unaudited)114 Schedule II—Valuation and Qualifying Accounts12352CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED BALANCE SHEETS December 30, 2018 December 31, 2017ASSETS(In thousands, except per-share amounts)Current assets: Cash and cash equivalents$285,720 $151,596Accounts receivable, net324,274 295,991Inventories292,093 272,127Assets held for sale13,510 —Other current assets101,163 103,637Total current assets1,016,760 823,351Property, plant and equipment, net282,986 289,554Goodwill1,373,750 1,439,472Intangible assets, net490,590 715,120Equity method investments65,145 122,514Deferred tax assets339,679 4,293Other long-term assets124,305 142,746Total assets3,693,215 3,537,050LIABILITIES AND EQUITY Current liabilities: Accounts payable210,715 213,101Accrued compensation and employee benefits61,994 79,275Price adjustments and other distributor related reserves163,088 173,592Dividends payable39,748 38,741Current portion of long-term debt6,943 27,303Other current liabilities138,064 143,485Total current liabilities620,552 675,497Income taxes payable53,469 52,006Credit facility and long-term debt874,235 956,513Other long-term liabilities27,920 35,442Total liabilities1,576,176 1,719,458Commitments and contingencies (Note 21)— —Stockholder's Equity: Preferred stock, $.01 par value, 5,000 shares authorized; none issued and outstanding— —Common stock, $.01 par value, 650,000 and 650,000 shares authorized; 537,327 and 525,719 sharesissued; 361,452 and 352,220 shares outstanding at December 30, 2018 and December 31, 2017,respectively5,373 4,936Additional paid-in-capital5,636,099 5,659,612Accumulated other comprehensive income (loss)1,829 (1,362)Accumulated deficit(1,157,115) (1,511,706)Stockholders’ equity before treasury stock4,486,186 4,151,480Less: shares of common stock held in treasury, at cost; 175,875 and 173,499 shares at December30, 2018 and December 31, 2017, respectively(2,370,452) (2,334,944)Total Cypress stockholders’ equity2,115,734 1,816,536Non-controlling interest1,305 1,056Total equity2,117,039 1,817,592Total liabilities and equity$3,693,215 $3,537,050The accompanying notes are an integral part of these consolidated financial statements.53CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands, except per-share amounts)Revenues$2,483,840 $2,327,771 $1,923,108Costs and expenses: Cost of revenues1,552,385 1,545,837 1,464,612Research and development363,996 362,931 347,131Selling, general and administrative403,031 340,910 720,103Total costs and expenses2,319,412 2,249,678 2,531,846Operating income (loss)164,428 78,093 (608,738)Interest expense(65,327) (80,215) (55,192)Other (expense) income, net(2,518) 4,268 313Income (loss) before income taxes and non-controlling interest96,583 2,146 (663,617)Income tax benefit (provision)315,618 (11,157) (2,616)Share in net loss and impairment of equity method investees(57,370) (71,772) (17,644)Net income (loss)354,831 (80,783) (683,877)Net (gain) loss attributable to non-controlling interest, net of taxes(239) (132) 643Net income (loss) attributable to Cypress$354,592 $(80,915) $(683,234)Net income (loss) per share attributable to Cypress: Basic$0.99 $(0.24) $(2.14)Diluted$0.95 $(0.24) $(2.14)Shares used in net income (loss) per share calculation: Basic359,324 333,451 319,522Diluted372,178 333,451 319,522 The accompanying notes are an integral part of these consolidated financial statements54CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Twelve Months Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Net income (loss)354,831 (80,783) (683,877)Other comprehensive income (loss): Net unrecognized gain on defined benefit plan3,456 324 (1,214)Net unrealized gain (loss) on cash flow hedges: Net unrealized gain (loss) arising during the period(644) 511 (5,186)Net (gain) loss reclassified into earnings for revenue hedges(37) (4,634) 13,477Net (gain) loss reclassified into earnings for expense hedges(335) 10,586 (15,661)Net gain reclassified into earnings for interest rate hedges(162) — —Provision for income tax913 662 —Net unrealized gain (loss) on cash flow hedges(265) 7,125 (7,370)Other comprehensive income (loss)3,191 7,449 (8,584)Comprehensive income (loss)358,022 (73,334) (692,461)Comprehensive income (loss) attributable to non-controlling interest(239) (132) 643Comprehensive income (loss) attributable to Cypress$357,783 $(73,466) $(691,818) The accompanying notes are an integral part of these consolidated financial statements.55CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock AdditionalPaid-In AccumulatedOtherComprehensive Accumulated Treasury Stock Non-controlling Total Shares Amount Capital Income (Loss) Deficit Shares Amount Interest Equity (in thousands, except share amounts)Balances at January 3, 2016481,912 $4,637$5,613,574$(227)$(745,205)149,636$(2,148,193)$(8,163)$2,716,423 Net loss attributable to Cypress— — — — (683,234) — — — (683,234)Net unrealized loss on cash flowhedges— — — (7,344) (2) — — (7,346)Unrealized loss on defined benefitpension plan— — — (1,240) — — — — (1,240)Changes in employee deferredcompensation plan assets— — — — — — (94) — (94)Issuance of common sharesunder employee stock plans, net15,143 100 48,166 — — — — — 48,266Withholding of common sharesfor tax obligations on vestedrestricted shares— — — — — 887 (11,320) — (11,320)Repurchase of common shares— — — — — 22,949 (175,694) — (175,694)Stock-based compensation— — 98,781 — — — — — 98,781Issuance of 4.5% 2022 SeniorExchangeable Notes— — 47,686 — — — — — 47,686Purchase of capped calls relatedto 4.5% 2022 SeniorExchangeable Notes— — (8,165) — — — — — (8,165)Dividend— — (140,398) — — — — — (140,398)Deconsolidation of Deca— — — — — — — 6,838 6,838Non-controlling interest— — — — — — — 2,249 2,249Balances at January 1, 2017497,055 4,737 5,659,644 (8,811) (1,428,441) 173,472 (2,335,301) 924 1,892,752 Net loss attributable to Cypress— — — — (80,915) — — — (80,915)Net unrealized loss on cash flowhedges— — — 7,125 — — — — 7,125Unrealized gain on defined benefitpension plan— — — 324 — — — — 324Changes in employee deferredcompensation plan assets— — — — — — 477 — 477Adoption of ASU 2016-09 — 2,350 — (2,350) — — —Issuance of common sharesunder employee stock plans, net11,316 26 47,245 — — — — — 47,271Issuance of common sharesupon conversion of 2% 2020Exchangeable Notes17,348 173 283,634 — — 27 — — 283,807Withholding of common sharesfor tax obligations on vestedrestricted shares— — — — — — (120) — (120)Stock-based compensation— — 90,261 — — — — — 90,261Issuance of 2% 2023Exchangeable Notes— — 15,028 — — — — — 15,028Extinguishment of 2% 2020Exchangeable Notes— — (290,591) — — — — — (290,591)Dividend— — (147,959) — — — — — (147,959)Non-controlling interest— — — — — — — 132 13256Balances at Balances atDecember 31, 2017525,719 4,936 5,659,612 (1,362) (1,511,706) 173,499 (2,334,944) 1,056 1,817,592Net income attributable toCypress— — — — 354,592 — — — 354,592Net unrealized loss on cash flowhedges and interest rate swaps— — — (265) (1) — — — (266)Unrealized gain on defined benefitpension plan— — — 3,456 — — — — 3,456Changes in employee deferredcompensation plan assets— — — — — — 20 — 20Issuance of common sharesunder employee stock plans, net10,206 412 40,230 — — 33 (504) — 40,138Stock-based compensation— — 95,173 — — — — — 95,173Issuance of common sharesupon conversion of 2% 2020Exchangeable Notes1,402 14 25,152 — — — — — 25,166Extinguishment of 2% 2020Exchangeable Notes— — (25,696) — — — — — (25,696)Dividend— — (158,372) — — — — — (158,372)Repurchase of common shares— — — — — 2,093 (31,681) — (31,681)Yield enhancement structuredagreements, net— — — — — 250 (3,343) — (3,343)Non-controlling interest— 11 — — — — — 249 260Balances at December 30, 2018537,327 $5,373 $5,636,099 $1,829 $(1,157,115) 175,875 $(2,370,452) $1,305 $2,117,039 The accompanying notes are an integral part of these consolidated financial statements.57CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Cash flows from operating activities: Net income (loss)$354,831 $(80,783) $(683,877)Adjustments to reconcile net income (loss) to net cash provided by operatingactivities: Stock-based compensation expenses95,965 91,581 98,513Depreciation and amortization282,985 264,905 265,922Impairment of acquisition-related intangible assets— — 33,944Impairment of assets held for sale76,591 — 37,219Impairment of goodwill— — 488,504Gain on divestitures— (1,245) —Gain related to investment in Deca Technologies— — (112,774)(Gain) loss on sale or retirement of property and equipment, net7,505 (1,165) 7,375Change in interest rate swaps2,848 — —Share in net loss and impairment of equity method investees57,370 71,772 17,644Accretion of interest expense on Senior Exchangeable Notes andamortization of debt and financing costs on other debt19,513 21,091 13,139Release of valuation allowance(343,274) — —Loss on trading securities— — 598Loss on extinguishment of debt5,169 7,246 —Restructuring and other costs16,128 8,997 27,235Changes in operating assets and liabilities, net of effects of acquisitions anddivestiture: Accounts receivable(23,836) 37,046 (41,022)Inventories(20,757) 14,327 (33,677)Asset held for sale(13,510) — —Other current and long-term assets5,379 9,629 (12,225)Price adjustments and other distributor related reserves(14,487) 19,067 100,389Accounts payable and other liabilities(36,720) (58,981) 79,476Deferred margin on sales to distributors— — (68,964)Net cash provided by operating activities471,700 403,487 217,419Cash flows from investing activities: Acquisitions, net of cash acquired(2,655) — (550,000)Proceeds from maturities of available-for-sale investments— — 40,000Proceeds from sales of available-for-sale investments— — 45,904Purchases of available-for-sale securities— — (80,202)Net (contributions) distributions, net of distributions to deferred compensationplan2,541 2,562 (1,857)Acquisition of property, plant and equipment(68,899) (54,284) (57,398)Proceeds from sales of property and equipment5,769 2,340 —Investment in Deca Technologies Inc.— — 17,627Cash paid for equity and cost method investments— (9,285) (27,149)Cash received on cost method investments18,538 — —58CYPRESS SEMICONDUCTOR CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Proceeds from divestitures— 45,500 —Other investing(4,984) (1,262) (364)Net cash used in investing activities(49,690) (14,429) (613,439)Cash flows from financing activities: Repurchase of common stock(31,682) — (175,694)Yield enhancement structured agreements settled in stock, net(3,262) — —Proceeds from employee stock-based awards40,661 47,153 43,850Payments of cash dividends(157,364) (144,749) (141,410)Purchase of capped calls— — (8,165)Repayment of equipment leases, loans and other— (112) (11,061)Borrowings under senior secured revolving credit facility94,000 190,000 195,000Borrowings under Term Loans— 91,250 450,000Repayments of senior secured revolving credit facility(184,000) (432,000) (312,000)Repayment of Term Loans(35,614) (118,701) (10,625)Financing costs related to debt(625) (12,475) (27,893)Payment for extinguishment of 2% 2020 Exchangeable Notes(10,000) (128,000) —Proceeds from issuance of Exchangeable Notes— 150,000 287,500Net cash provided by (used in) financing activities(287,886) (357,634) 289,502Net increase (decrease) in cash and cash equivalents134,124 31,424 (106,518)Cash and cash equivalents, beginning of year151,596 120,172 226,690Cash and cash equivalents, end of year285,720 151,596 120,172Supplemental disclosures: Dividends payable$39,748 $38,741 $35,506Cash paid for income taxes, net9,080 6,576 8,288Cash paid for interest39,504 53,131 32,625Unpaid purchases of property, plant and equipment5,875 14,291 3,960 The accompanying notes are an integral part of these consolidated financial statements.59CYPRESS SEMICONDUCTOR CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNOTE 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESDescription of BusinessCypress Semiconductor Corporation (together with its consolidated subsidiaries, "Cypress" or the "Company") manufactures and sells advancedembedded system solutions for automotive, industrial, consumer and enterprise end markets. Cypress' microcontroller, analog integrated circles("ICs"), wireless and wired connectivity solutions and memories help engineers design differentiated products and help them with speed to market.Cypress is committed to providing customers with support and engineering resources. On July 5, 2016, the Company completed its acquisition of certain assets primarily related to the wireless Internet of Things business ("wirelessIoT business") of Broadcom Corporation ("Broadcom") pursuant to an Asset Purchase Agreement with Broadcom, dated April 28, 2016, for a totalconsideration of approximately $550 million.On July 29, 2016, Deca Technologies Inc. ("Deca"), a majority-owned subsidiary of the Company, entered into a share purchase agreement,whereby certain third-party investors purchased 41.1% of the shares outstanding on such date for an aggregate consideration of approximately$111.4 million. Concurrently, Deca repurchased certain of its preferred shares from the Company. As a result of these transactions, the Companybegan accounting for Deca as an equity-method investment effective July 29, 2016.During the third quarter of fiscal 2017, the Company completed the sale of its wafer fabrication facility in Minnesota for gross proceeds of $30.5million.On August 14, 2018, the Company acquired an embedded software company focused on the Internet of Things (or "IoT") market for cashconsideration of $3.0 million. The purchase consideration was allocated to acquired developed technology.On October 23, 2018, the Company agreed to transfer its NAND business to a joint venture ("JV") with SK hynix systems ic Inc ("SKHS"). Thetransaction is subject to customary closing conditions and regulatory approvals. The Company presently expects that the transaction will becompleted in the first quarter of fiscal 2019. In addition to our NAND flash business, the Company will contribute $2.4 million in cash towards theequity of the JV. The Company will own 40% of the JV’s common stock.The comparability of results for the periods presented is significantly impacted by these transactions.Basis of PreparationThe Company reports on a fiscal-year basis. The Company ends its quarters on the Sunday closest to the end of the applicable calendar quarter,except in a 53-week fiscal year, in which case the additional week falls into the fourth quarter of that fiscal year. Fiscal 2018 ended onDecember 30, 2018, fiscal 2017 ended on December 31, 2017 and fiscal 2016 ended on January 1, 2017. Fiscal years 2018, 2017 and 2016 eachcontained 52 weeks.The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requiresmanagement to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanyingnotes. Actual results could differ from those estimates.The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“U.S.GAAP”) and include the accounts of Cypress and all of its subsidiaries. All intercompany transactions and balances have been eliminated inconsolidation.Certain balances included on the Consolidated Balance Sheets and in the Consolidated Statements of Cash Flows for prior periods have beenreclassified to conform to the current period presentation. Beginning fiscal year 2018, the Company allocated the amortization of acquisition-relatedintangible assets, restructuring costs and certain other expenses by function in the Consolidated Statements of Operations. The ConsolidatedStatements of Operations for the prior comparative periods have been reclassified to conform to the current period presentation as follows:60 Year Ended December 31, 2017 As PreviouslyReported Reclassification As Adjusted (In thousands)Cost of revenues $1,370,309 $175,528 $1,545,837Research and development 357,016 5,915 362,931Selling, general and administrative 303,651 37,259 340,910Amortization of intangible assets 195,304 (195,304) —Costs and settlement charges related to shareholder matter 14,310 (14,310) —Restructuring costs 9,088 (9,088) —Operating income $78,093 $— $78,093 Year Ended January 1, 2017 As PreviouslyReported Reclassification As Adjusted (In thousands)Cost of revenues $1,235,540 $229,072 $1,464,612Research and development 331,175 15,956 347,131Selling, general and administrative 317,362 402,741 720,103Amortization of intangible assets 174,745 (174,745) —Restructuring costs 26,131 (26,131) —Impairment of acquisition-related intangible assets 33,944 (33,944) —Goodwill impairment charge 488,504 (488,504) —Gain related to investment in Deca Technologies (112,774) 112,774 —Impairment related to asset held for sale 37,219 (37,219) —Operating loss $(608,738) $— $(608,738)Cash Equivalents and InvestmentsHighly liquid investments with original or remaining maturities of ninety days or less at the date of purchase are considered cash equivalents.Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk are cash in the bank, cash equivalents, debtinvestments, foreign exchange hedges, interest rate swap obligations, trade accounts receivable and the capped calls. The Company’s investmentpolicy requires cash investments to be placed with high-credit quality institutions and limits the amount of credit exposure with any one issuer. TheCompany performs ongoing credit evaluations of its customers’ financial condition whenever deemed necessary and generally does not requirecollateral. The Company mitigates its exposure to credit risk to the extent that its counterparties for hedging transactions may be unable to meetthe terms of the transactions. The Company mitigates this risk by diversifying and limiting its counterparties to major financial institutions.Outstanding accounts receivable from one of the Company’s distributors accounted for 25% and 28% of the consolidated accounts receivable asof December 30, 2018 and December 31, 2017, respectively.61Revenue generated through two of the Company's distributors, accounted for 18% and 14%, respectively, of Company's consolidated revenues forfiscal 2018.Revenue generated through two of the Company’s distributors, accounted for 20% and 13%, respectively, of the consolidated revenues for fiscal2017.Revenue generated through one of the Company’s distributors, accounted for 23% of the consolidated revenues for fiscal 2016.InventoriesInventories are stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. TheCompany writes down its inventories which have become obsolete or are in excess of anticipated demand or net realizable value based uponassumptions about demand forecasts, product life cycle status, product development plans and current sales levels.Long-Lived AssetsProperty, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is computed for financial reportingpurposes using the straight-line method over the estimated useful lives of the assets. Leasehold improvements and leasehold interests areamortized over the shorter of the estimated useful lives of the assets or the remaining term of the lease. Estimated useful lives are as follows: Equipment3 to 10 yearsBuildings and leasehold improvements5 to 20 yearsFurniture and fixtures3 to 7 years The Company evaluates its long-lived assets, including property, plant and equipment and intangible assets with finite lives, for impairmentwhenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Factors consideredimportant that could result in an impairment review include significant underperformance relative to expected historical or projected future operatingresults, significant changes in the manner of use of assets, significant negative industry or economic trends, and a significant decline in theCompany’s stock price for a sustained period of time. Impairment is recognized based on the difference between the estimated fair value of theasset and its carrying value. Estimated fair value is generally measured based on quoted market prices, if available, appraisals or discounted cashflow analysis.Assets Held for SaleThe Company considers assets to be held for sale when management approves and commits to a plan to dispose of an asset or group of assets.Assets held for sale are recorded initially at the lower of carrying value or estimated fair value, less estimated costs to sell. Upon designation asan asset held for sale, the Company stops recording depreciation and amortization expense on such assets. Costs to sell a disposal group includeincremental direct costs to transact the sale and represent the costs that result directly from and are essential to a sale transaction that would nothave been incurred by the entity had the decision to sell not been made.The properties that are held for sale prior to the sale date are classified as held for sale and are presented separately in the appropriate asset andliability sections of the balance sheet. See Note 6 of the Notes to Consolidated Financial Statements for more information.Goodwill and Other Intangible AssetsGoodwill and other intangible assets with indefinite lives are not amortized but are tested for impairment on an annual basis or whenever events orchanges in circumstances indicate that the carrying amount of these assets may not be recoverable.The Company assesses goodwill for impairment on an annual basis on the first day of the fourth quarter of the fiscal year and if certain events orcircumstances indicate that an impairment loss may have been incurred, on an interim62basis. The Company first considers qualitative factors to determine whether it is necessary to perform further assessment of goodwill impairment.If the Company believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less thanits carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. See Note 4 of the Notes to ConsolidatedFinancial Statements for more information.Purchased intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives and are reviewedfor impairment as discussed above. See Note 5 of the Notes to Consolidated Financial Statements for more information.Acquisition related In-process Research and DevelopmentAcquisition-related in-process research and development represents the fair value of incomplete research and development projects that have notreached technological feasibility as of the date of acquisition. Initially, these assets are not subject to amortization. The incomplete projects arereviewed each quarter for impairment related to cancellation, change in business plans as well as completion. Assets related to projects that havebeen completed are transferred to developed technology, which are subject to amortization.Convertible debtIn accounting for each series of Senior Exchangeable Notes (as described in Note 15) at issuance, the Company separated the Notes into debtand equity components according to accounting standards codification ("ASC") 470-20 for convertible debt instruments that may be fully orpartially settled in cash upon conversion. The carrying amount of the debt component, which approximates its fair value, was estimated by usingan interest rate for non-convertible debt, with terms similar to the Notes. The excess of the principal amount of the Notes over the fair value of thedebt component was recorded as a debt discount and a corresponding increase in additional paid-in capital. The debt discount is accreted to thecarrying value of the Notes over their term as interest expense using the effective interest method. In accounting for the transaction costs incurredrelating to issuance of the Notes, the Company allocated the costs of the offering in proportion to the fair value of the debt and equity recognizedin accordance with the accounting standards. The transaction costs allocated to the debt are being amortized as interest expense over the term ofthe Notes.The fair value of debt immediately prior to its derecognition is calculated based on the remaining expected life of the debt instrument and anupdated current non-convertible debt rate assumption. The gain or loss on extinguishment equaling the difference between the calculated fair valueof the debt immediately prior to its derecognition and the carrying amount of the debt components, including the remaining unamortized debtdiscount, is recorded in the Consolidated Statements of Operations. The remainder of the consideration relates to the reacquisition of the equitycomponent and as an adjustment to additional paid-in-capital.In accounting for the cost of the capped call transaction entered in connection with the issuance of the 4.5% 2022 Senior Exchangeable Notes, theCompany included the cost as a net reduction to additional paid-in capital in the stockholders’ equity section of the consolidated balance sheet, inaccordance with the guidance in ASC 815-40 "Derivatives and Hedging-Contracts in Entity’s Own Equity". See Note 15 of the Notes toConsolidated Financial Statements for more information.Revenue RecognitionThe Company recognizes revenues when the Company transfers control of promised goods or services to the customer in an amount that reflectsthe consideration to which we expect to be entitled in exchange for those goods or services. See Note 2 for further discussion on Revenues.Employee Benefit PlansA defined benefit pension plan is accounted for on an actuarial basis, which requires the selection of various assumptions such as turnover rates,discount rates and other factors. The discount rate assumption is determined by comparing the projected benefit payments to the corporate bondsyield curve as of end of the most recently completed fiscal year. The benefit obligation is the projected benefit obligation (PBO), which representsthe actuarial present value of benefits expected to be paid upon retirement. This liability is recorded in other long-term liabilities on theConsolidated Balance Sheets. Net periodic pension cost is recorded in the Consolidated63Statements of Operations and includes service cost. Service cost represents the actuarial present value of participant benefits earned in thecurrent year. Interest cost represents the time value of money associated with the passage of time on the PBO. Gains or losses resulting from achange in the PBO if actual results differ from actuarial assumptions will be accumulated and amortized over the future life of the plan participantsif they exceed 10% of the PBO, being the corridor amount. If the amount of a net gain or loss does not exceed the corridor amount, it will berecorded to other comprehensive income (loss). See Note 19 of the Notes to Consolidated Financial Statements for further details of the pensionplans.Investments in equity interestsInvestments in the stock of entities in which the Company exercises significant influence but does not own a majority equity interest or otherwisecontrol are accounted for using the equity method and are included as equity method investments in its consolidated balance sheets. TheCompany records its share of the results of those companies within share in net loss and impairment of equity method investees in itsConsolidated Statements of Operations. Investments in privately held equity interests in which the Company does not exercise significantinfluence are equity securities without readily determinable fair values. The Company has elected to account for these investments using themeasurement method of accounting (that is, cost less impairment adjusted for observable price changes). These investments are included in otherlong-term assets on the Consolidated Balance Sheets.The Company reviews its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate thatthe carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject tofurther analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. Thedetermination of fair value of the investment involves considering factors such as current economic and market conditions, the operatingperformance of the entities including current earnings trends and forecasted cash flows, and other company and industry specific information.Fair Value of Financial InstrumentsFor certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable and other current liabilities,the carrying amounts approximate their fair value due to the relatively short maturity of these items. See Note 8 of the Notes to ConsolidatedFinancial Statements for a detailed discussion of fair value measurements.Cash Flow HedgesThe Company has an on-going cash flow hedge program and enters into cash flow hedges to protect non-functional currency revenue, inventorypurchases and certain operating expenses from foreign currency fluctuation and interest rate variability. The Company does not enter intoderivative securities for speculative purposes. The Company’s foreign currency forward contracts that were designated as cash flow hedgesgenerally have tenors between three and thirteen months while interest rate swaps have a tenor of several years. All hedging relationships areformally documented, and the hedges are designed to offset changes to future cash flows on hedged transactions at the inception of the hedge.The Company recognizes derivative instruments from hedging activities as either assets or liabilities on the balance sheet and measures them atfair value on a monthly basis. The Company records changes in the intrinsic value of its cash flow hedges in accumulated other comprehensiveincome on the Consolidated Balance Sheets, until the forecasted transaction occurs. Beginning the second quarter of 2018, the Company enteredinto foreign exchange cash flow hedges, in which interest charges or "forward points" on the forward contracts are included in the assessment ofhedge effectiveness, and are recorded in the underlying hedged items in the Consolidated Statements of Operations. When the forecastedtransaction occurs, the Company reclassifies the related gain or loss on the cash flow hedge to revenue or costs, depending on the risk hedged. Inthe event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company will reclassify the gainor loss on the related cash flow hedge from accumulated other comprehensive income to other (expense) income, net in its ConsolidatedStatements of Operations at that time.The Company evaluates hedge effectiveness at the inception of the hedge prospectively as well as retrospectively and records any ineffectiveportion of the hedge in other (expense) income, net in its Consolidated Statements of Operations.64See Note 12 of the Notes to Consolidated Financial Statements for further details of the contracts.Shipping and Handling CostsThe Company records costs related to shipping and handling of products in cost of revenues.Advertising CostsAdvertising costs consist of development and placement costs of the Company’s advertising campaigns and are charged to expense whenincurred. Advertising expense was $5.9 million, $3.2 million and $3.1 million for fiscal years 2018, 2017 and 2016, respectively.Income TaxesThe provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferredtaxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Theprovision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferredtaxes result from differences between the financial and tax basis of the Company’s assets and liabilities and are adjusted for changes in tax ratesand tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when management cannot conclude thatit is more likely than not that a tax benefit will be realized.The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The Company recognizespotential liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extentto which, additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would resultin tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. If the estimate of tax liabilitiesproves to be less than the ultimate assessment, a further charge to expense would result.In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income ("GILTI") provisions of the TaxCuts and Jobs Act (the "Act"). The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreigncorporations. The GILTI provision is effective for the Company beginning after December 31, 2017. Companies are permitted to make anaccounting policy election to either (i) account for GILTI as a component of tax expense in the period in which the tax is incurred (the “period costmethod”), or (ii) account for GILTI in the Company’s measurement of deferred taxes (the “deferred method”). The Company has elected to treattaxes on GILTI as period costs similar to special deductions and period expenses.Foreign Currency TransactionsThe Company uses the United States dollar as the functional currency for all of its foreign entities. Assets and liabilities of these entities areremeasured into the United States dollar using exchange rates in effect at the end of the period, except for non-monetary assets and liabilities,such as property, plant and equipment, which are remeasured using historical exchange rates. Revenues and expenses are remeasured usingaverage exchange rates in effect for the period, except for items related to assets and liabilities, such as depreciation, that are remeasured usinghistorical exchange rates. See Note 14 of the Notes to Consolidated Financial Statements for further details on the impact of foreign currency re-measurement.Net income (loss) per shareBasic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted average numberof common shares outstanding during the period. Diluted EPS gives effect to all dilutive potential of shares of common stock outstanding duringthe period including stock options or warrants (if any), using the treasury stock method (by using the average stock price for the period todetermine the number of shares assumed to be purchased from the exercise of stock options or warrants (if any) and any unamortizedcompensation expenses), and exchangeable notes, using the treasury stock method. Diluted EPS excludes all dilutive potential of shares ofcommon stock if their effect is anti-dilutive.65Impact of Recently Issued Accounting PronouncementsThe following are the accounting pronouncements issued but not adopted that may materially affect the Company’s consolidated financialstatements:In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-02, "Leases (Topic842)," which replaces most current lease guidance when it becomes effective. The new standard states that a lessee will recognize a lease liabilityfor the obligation to make lease payments and a right-of-use asset for the right to use the underlying asset for the lease term. Leases will beclassified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements ofOperations. In July 2018, the FASB issued ASU 2018-11, "Leases (Topic 842): Targeted Improvements," which provides clarificationsand improvements to ASU 2016-02 including allowing entities to elect an additional transition method that permits changes to be applied by meansof a cumulative-effect adjustment recorded in retained earnings as of the beginning of the fiscal year of adoption. Consequently, an entity’sreporting for the comparative periods presented in the year of adoption would continue to be in accordance with ASC 840, Leases (Topic 840)("ASC 840"), including the disclosure requirements of ASC 840. The new guidance will be effective for the Company starting in the first quarter offiscal 2019.The Company developed and executed a comprehensive project plan to facilitate the implementation of ASU 2016-02, including reaching out to theCompany’s global businesses to assess the portfolio of active leases. The Company has also implemented a lease accounting software solutionto support the new reporting requirements.The Company does not expect to restate comparative periods, as permitted by ASU 2018-11 and to elect the package of practical expedientspermitted under the transition guidance within the new standard, which among other things, allows the Company to carry forward the historicallease classification. Further, the Company will make an accounting policy election to keep leases with an initial term of 12 months or less off ofthe balance sheet. The Company will recognize those lease payments in the Consolidated Statements of Operations on a straight-line basis overthe lease term.The Company has completed its preliminary evaluation of the impact the new lease accounting guidance will have on its Consolidated FinancialStatements and expects to recognize new right of use assets and lease liabilities of approximately $25 million to $45 million for its operatingleases on the Consolidated Balance Sheet upon adoption. Lease assets and liabilities under existing capital leases as of December 31, 2018, willcontinue to be recognized on the balance sheet as Finance leases under ASC 842. The Company does not expect the changes to have a materialimpact on the Consolidated Statements of Operations and the Consolidated Statements of Cash Flows. Further, upon adoption, the Company willexpand its financial statement disclosures to present additional details of its leasing arrangements.In August 2017, the FASB issued ASU No. 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for HedgingActivities." The amendments in ASU 2017-12 are intended to more closely align hedge accounting with companies’ risk management strategies,simplify the application of hedge accounting, and increase transparency as to the scope and results of hedging programs. The guidance in ASU2017-12 is effective for annual periods beginning after December 15, 2018, and interim periods within those fiscal years, with early adoptionpermitted. The Company does not anticipate that the adoption of this standard will have a significant impact on its consolidated financialstatements.In February 2018, the FASB issued ASU No. 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification ofCertain Tax Effects from Accumulated Other Comprehensive Income." The amendments in ASU 2018-02 are intended to allow a reclassificationfrom accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. Theguidance in ASU 2018-02 is effective for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years, withearly adoption permitted. The Company does not anticipate that the adoption of this standard will have a significant impact on its consolidatedfinancial statements.In June 2018, the FASB issued ASU No. 2018-07, "Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting." The standard expands the scope of ASC 718 to include all share-based payment arrangements related to theacquisition of goods and services from both nonemployees and employees. Under the amended guidance, equity-classified share-based paymentawards issued to nonemployees will be measured at grant date fair value. Upon transition, the entity is66required to remeasure these nonemployee awards at fair value as of the adoption date. The improvement is effective for fiscal years beginningafter December 15, 2018, including interim periods within that fiscal year. The Company does not anticipate that the adoption of this standard willhave a significant impact on its consolidated financial statements.In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the DisclosureRequirements for Fair Value Measurement." The standard modifies the disclosure requirements on fair value measurements in Topic 820 byremoving the requirement to disclose the reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing ofsuch transfers. The standard expands the disclosure requirements for Level 3 fair value measurement, primarily focused on changes in unrealizedgains and losses included in other comprehensive income. The amendment is effective for fiscal years beginning after December 15, 2019. TheCompany is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and relateddisclosures.In August 2018, the FASB issued ASU No. 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20):Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans." It is designed to improve the effectiveness ofdisclosures by removing and adding disclosures related to defined benefit plans. The update is effective for fiscal years ending after December 15,2020 with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidatedfinancial statements and related disclosures.Recently Adopted Accounting PronouncementsAdoption of ASU No. 2014-09, Revenue from Contracts with Customers:In May 2014, the FASB issued an ASU on revenue from contracts with customers, ASU No. 2014-09, "Revenue from Contracts with Customers(Topic 606)." This standard update outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts withcustomers. The guidance is effective for annual reporting periods beginning after December 15, 2017 and for interim periods within those fiscalyears. Collectively, we refer to ASU No. 2014-09, its related amendments, and Subtopic 340-40 as "Topic 606."On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to all contracts that were not completedcontracts at the date of initial application (i.e., January 1, 2018). Results for reporting periods after January 1, 2018 are presented under Topic 606,while prior period amounts are not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605.There was no impact on the opening accumulated deficit as of January 1, 2018 due to the adoption of Topic 606. The Company reclassified thesales return reserve to current liabilities presented as "Price adjustment and other revenue reserves" from the allowance for accounts receivabledue to the adoption of Topic 606. See Note 2 for further detail.Other Recently Adopted Pronouncements:In October 2016, the FASB issued ASU 2016-16, "Intra-Entity Transfers of Assets Other Than Inventory." For public entities, ASU 2016-16 iseffective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this guidance inthe first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statementsand related disclosures.In November 2016, the FASB issued ASU 2016-18, "Restricted Cash," which requires amounts generally described as restricted cash andrestricted cash equivalents to be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periodsshown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 (including interim periodswithin those periods) using a retrospective transition method to each period presented. The Company adopted the provisions of ASU 2016-18 as ofJanuary 1, 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements and relateddisclosures.In January 2017, the FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment."The standard eliminates the second step in the goodwill impairment test which requires an entity to determine the implied fair value of the reportingunit’s goodwill. Instead, an entity should recognize an impairment loss if the carrying value of the net assets assigned to the reporting unitexceeds the fair67value of the reporting unit, with the impairment loss not to exceed the amount of goodwill allocated to the reporting unit. The standard is effectivefor annual and interim goodwill impairment tests conducted in fiscal years beginning after December 15, 2019, with early adoption permitted. TheCompany adopted this guidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company'sconsolidated financial statements and related disclosures.In February 2018, the FASB issued ASU No. 2018-03, "Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities." The corrections and improvements are effective for the Companyfor fiscal years beginning after December 15, 2017 and for interim periods within those fiscal years beginning after June 15, 2018. The Companyadopted this guidance in the third quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company'sconsolidated financial statements and related disclosures.In May 2017, the FASB issued ASU No. 2017-09, "Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting." ASU2017-09 amends the requirements in GAAP related to accounting for changes to stock-based compensation awards. The guidance in ASU 2017-09is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company adopted thisguidance in the first quarter of fiscal 2018. The adoption of this guidance did not have a material impact on the Company's consolidated financialstatements and related disclosures.NOTE 2. REVENUERevenue RecognitionRevenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects theconsideration to which the Company expects to be entitled in exchange for those goods or services. Sales of products with alternative useaccount for the majority of the Company's revenue and are recognized at a point in time.Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and that arecollected by the Company from a customer and deposited with the relevant government authority are excluded from revenue. The Company'srevenue arrangements do not contain significant financing components.Revenue is recognized over a period of time when it is assessed that performance obligations are satisfied over a period rather than at a point intime. When any of the following criteria is fulfilled, revenue is recognized over a period of time:(a)The customer simultaneously receives and consumes the benefits provided by the performance as Cypress performs.(b)Cypress’ performance creates or enhances an asset (for example, work in process) that the customer controls as the asset is created orenhanced.(c)Cypress’ performance does not create an asset with an alternative use, and Cypress has an enforceable right to payment for performancecompleted to date.The Company then selects an appropriate method for measuring progress toward complete satisfaction of the performance obligation, usuallycosts incurred to date relative to the total expected costs to the satisfaction of that performance obligation.Sales to certain distributors are made under arrangements that provide the distributors with price adjustments, price protection, stock rotation andother allowances under certain circumstances. These adjustments and allowances are accounted for as variable consideration. The Companyestimates these amounts based on the expected amount to be provided to customers and reduce revenue recognized. The Company believes thatthere will not be significant changes to its estimates of variable consideration.The Company's non-recurring engineering ("NRE") contracts with customers may include multiple performance obligations. For NRE arrangements,the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determinesthe standalone selling price of intellectual68property licenses based on the residual approach, and service based on cost plus a reasonable margin. The Company recognizes revenue in theamount to which it has a right to invoice, if the right to consideration from the customer is in an amount that corresponds reasonably with the valueto the customer of the entity’s performance completed to date.The Company licenses or sells rights to use portions of the Company's intellectual property ("IP") portfolio, which includes certain patent rightsuseful in the manufacture and sales of certain products. IP revenue recognition is dependent on the nature and terms of each agreement. TheCompany recognizes IP revenue upon delivery of the IP if the Company has no substantive future obligation to perform under the arrangement.The Company defers recognition of IP revenue where future performance obligations are required to earn the revenue or the revenue is notguaranteed. Sales-based or usage-based royalties from license of the Company's IP are recognized at the later of the period the sales or usagesoccur or the satisfaction of the performance obligation to which some or all of the sales-based or usage-based royalties have been allocated.If a customer pays consideration, or the Company has a right to an amount of consideration that is unconditional before the Company transfers agood or service to the customer, those amounts are classified as deferred income/ advances received from customers which are included in othercurrent liabilities or other long-term liabilities when the payment is made or it is due, whichever is earlier.If the arrangement includes variable contingent consideration, the Company recognizes revenue over time if management can reasonably measureits progress or is capable of providing reliable information as required to apply an appropriate method of measuring progress.The following table presents the Company's revenue disaggregated by segment, end market, revenue type and geographical locations: For The Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Microcontroller and Connectivity Division ("MCD")$1,474,442 $1,409,265 $994,482Memory Products Division ("MPD")1,009,398 918,506 928,626Total revenues$2,483,840 $2,327,771 $1,923,108 For The Year Ended December 30, 2018 December 31, 2017 January 1, 2017Industrial479,091 430,976 453,887Automotive815,413 720,659 625,327Consumer721,402 742,372 557,302Enterprise467,934 433,764 286,592Total2,483,840 2,327,771 1,923,108 For The Year Ended December 30, 2018 December 31, 2017 January 1, 2017 Product revenue$2,439,373 $2,239,056 $1,828,061Non-product revenue (1)44,467 88,715 95,047Total revenue$2,483,840 $2,327,771 $1,923,10869(1) Non-product revenue primarily includes royalty, NRE, and patent revenues. For The Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Goods/Services transferred at a point in time$2,470,270 $2,282,200 $1,887,463Goods/Services transferred over time13,570 45,571 35,645Total revenue$2,483,840 $2,327,771 $1,923,108 For The Year Ended December 30, 2018 December 31, 2017 January 1, 2017 United States$253,420 $220,128 $199,294China, Taiwan, and Hong Kong972,869 980,670 819,200Japan589,818 515,622 420,869Europe329,436 291,948 255,604Rest of the World338,297 319,403 228,141Total revenue$2,483,840 $2,327,771 $1,923,108Practical Expedients and ElectionsSales commissions are owed and are recorded at the time of sell-through of our products to end customers. These costs are recorded within salesand marketing expenses.The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year orless and (ii) contracts for which the Company recognizes revenue at the amount to which the Company has the right to invoice for servicesperformed.The Company has elected to account for shipping and handling costs as fulfillment costs after the customer obtains control of the goods.NOTE 3. MERGERS, ACQUISITIONS AND DIVESTITURESJoint Venture with SK hynixOn October 23, 2018, the Company entered into a definitive agreement with SKHS (a wholly owned subsidiary of SK Hynix) to form a JV entity tobe headquartered in Hong Kong. The transaction is expected to close in the second quarter of fiscal 2019. The Company will contribute $2.4million in cash and transfer its NAND business to the JV entity. The Company will own 40% of the JV entity’s common stock. The NAND businessis presently reported as part of the MPD segment. The Company recognized $167.3 million, $168.1 million and $180.5 million in revenue from theNAND business for the years ended December 30, 2018, December 31, 2017 and January 1, 2017, respectively.Acquisition of a software businessOn August 14, 2018, the Company acquired an embedded software company focused on the Internet of things market for cash consideration of $3million. The purchased assets were primarily developed technology. Pro forma results of operations of this acquired company are not presentedbecause the effect of the acquisition was not material.70Acquisition of IoT BusinessOn July 5, 2016, the Company completed its acquisition of certain assets primarily related to the wireless IoT business of Broadcom Corporationpursuant to an Asset Purchase Agreement, dated April 28, 2016. In connection with the closing of the transaction, the Company paid Broadcom$550 million in cash. The results of the business acquired as part of this acquisition are reported in the Company’s Microcontroller andConnectivity Division.The acquisition was accounted for using the purchase method of accounting. Approximately $9.2 million in expenses were incurred as acquisitionexpenses related to the wireless IoT business and were recorded in the Selling, general and administrative line item in the ConsolidatedStatements of Operations.The table below represents the allocation of the purchase price to the net assets acquired based on their estimated fair values: Final allocation as ofJanuary 1, 2017 Intangible assets$324,000Property, plant and equipment16,270Inventories11,655Other current assets6,550Other long-term assets4,203Goodwill189,094Total assets acquired$551,772Other current liabilities(1,199)Other long-term liabilities(573)Total liabilities assumed(1,772)Fair value of net assets acquired$550,000 The purchase price was allocated based on the estimated net tangible and intangible assets of the wireless IoT business that existed on the dateof the acquisition. The fair value of identifiable intangible assets acquired was based on estimates and assumptions made by management at thetime of the acquisition.Identifiable intangible assetsThe table below shows the valuation of the intangible assets acquired from Broadcom along with their estimated useful lives: Amount Estimated life (in thousands) (in years)Existing Technology$189,300 4In-Process Research and Development Technology Arrangement88,900 N/ABacklog13,500 <1Customer Relationships20,000 10License Agreements3,700 1Trademarks8,600 4Total intangible assets$324,000 In-process research and development ("IPR&D") consisted of six projects. All projects reached technological feasibility and were transferred todeveloped technology by the end of fiscal 2018. The related intangible assets are amortized over their useful lives which were approximately 4years.71GoodwillThe excess of the fair value of the purchase consideration over the fair values of these identifiable assets and liabilities was recorded as goodwill.The goodwill recognized is primarily attributable to the assembled workforce, a reduction in costs and other synergies, and an increase in productdevelopment capabilities. Goodwill was initially allocated to the Company’s previous Data Communications Division and was reallocated to thenew Microcontroller and Connectivity Division during the fourth quarter of 2016. The goodwill resulting from the acquisition is deductible for taxpurposes.Pro forma consolidated results of operationsThe following unaudited pro forma financial data for the year ended January 1, 2017 assumes that the acquisitions of the wireless IoT businessfrom Broadcom had occurred at the beginning of fiscal year 2017. The pro forma information includes adjustments to amortization and depreciationfor intangible assets and property, plant and equipment, adjustments to stock-based compensation expense, and interest expense for theincremental indebtedness incurred, amortization of the step up to fair value of acquired inventory, acquisition related expenses and tax relatedexpenses. Year Ended January 1, 2017 (In thousands, except per-shareamounts)Revenues$2,018,124Net loss$(722,342)Net loss per share attributable to Cypress Basic$(2.26)Diluted$(2.26)NOTE 4. GOODWILLAllocation of Goodwill to NAND businessAs a result of entering into a definitive agreement to divest its NAND business during the fourth quarter of fiscal 2018, the Company allocated$65.7 million of goodwill previously recorded in the MPD segment to asset held for sale. The allocation was based on the relative estimatedenterprise value of the NAND business and that of the MPD business without the NAND business. See Note 6 of the Notes to ConsolidatedFinancial Statements.Annual impairment assessmentGoodwill is subject to an annual impairment test during the Company’s fourth quarter of each fiscal year, or earlier if indicators of potentialimpairment exist, using either a qualitative or a quantitative assessment. The Company's impairment review process compares the fair value ofthe reporting unit in which the goodwill resides to the respective reporting unit's carrying value.In fiscal 2018 and 2017, the annual evaluation of the goodwill by reporting unit was performed during the fourth quarter of the fiscal year. Inassessing the qualitative factors, the Company considered the impact of these key factors: 1) change in the industry and competitiveenvironment, 2) market capitalization, 3) stock price and 4) overall financial performance. Material adverse changes in such conditions could havethe effect of changing one of the critical assumptions or estimates the Company uses to calculate the fair value of its reporting units, which couldresult in a decrease in fair value and require it to record goodwill impairment charges. Based on the qualitative assessment described above, theCompany concluded there was no impairment in carrying value of goodwill during fiscal 2018.In fiscal 2016, the Company recorded an impairment charge of $488.5 million for the excess of the carrying value of goodwill over its implied fairvalue. The impairment was related to the legacy PSD reporting unit which was part of the MCD reportable segment.Goodwill as of December 30, 2018 was $1.4 billion, of which $782.9 million and $590.9 million was allocated to Microcontroller & ConnectivityDivision (“MCD”) and Memory Products Division (“MPD”) respectively. Goodwill as of72December 31, 2017 was $1.4 billion, of which $782.9 million and $656.6 million was allocated to MCD and MPD, respectively.NOTE 5. INTANGIBLE ASSETSThe following table presents details of the Company’s total intangible assets: As of December 30, 2018 As of December 31, 2017 Gross AccumulatedAmortization Net Gross AccumulatedAmortization Net (a) (In thousands)Developed technology and otherintangible assets Acquisition-related intangible assets$1,188,521 $(702,883) $485,638 $1,072,824 $(490,327) $582,497Non-acquisition related intangibleassets19,884 (14,932) 4,952 19,884 (10,828) 9,056Total developed technology andother intangible assets$1,208,405 $(717,815) 490,590 $1,092,708 $(501,155) $591,553In-process research anddevelopment— — — 123,567 — 123,567Total intangible assets$1,208,405 $(717,815) $490,590 $1,216,275 $(501,155) $715,120 The below table presents details of the IPR&D assets as of December 30, 2018: (in thousands)As of January 1, 2017$175,203Technological feasibility achieved(51,636)As of December 31, 2017123,567Technological feasibility achieved(123,567)As of December 30, 2018$—During fiscal 2018, five projects representing $123.6 million of the total capitalized IPR&D, with estimated useful lives of 4 - 5 years, reachedtechnological feasibility and were transferred to developed technology.During fiscal 2017, five projects representing $51.6 million of the total capitalized IPR&D, with estimated useful lives of 5 years, reachedtechnological feasibility and were transferred to developed technology.As a result of entering into a definitive agreement to divest its NAND business during the fourth quarter of fiscal 2018, the Company classified$10.9 million of intangible assets attributable to the NAND business as assets held for sale. See Note 6 of the Notes to Consolidated FinancialStatements.As of December 30, 2018, the estimated future amortization expense related to developed technology and other intangible assets was as follows: 73Fiscal Year (In thousands)2019 $207,4082020 153,7092021 58,4682022 33,0012023 28,334Thereafter 9,670Total future amortization expense $490,590NOTE 6. ASSETS HELD FOR SALESale of NAND businessThe Company allocated $65.7 million of goodwill previously recorded in the MPD segment to the NAND business being divested. The allocationwas based on the relative estimated enterprise value of the NAND business and that of the MPD business. The intangible assets attributable tothe NAND business acquired as part of a previous acquisition were $10.9 million and the inventories for the NAND business were $13.5 million asof the end of fiscal 2018. The allocated goodwill, intangible assets and inventories were classified as held for sale during the fourth quarter of 2018upon the execution of the NAND Definitive Agreement. The agreement does not contemplate any transfers of patents or other intellectual propertyfrom Cypress to the J.V. Depreciation and amortization expense corresponding to the assets classified as held for sale ceased at that time. Thisdivestiture was not presented as discontinued operations in the consolidated statements of operations, because this transaction does notrepresent a strategic shift in the Company's business.The transaction with SKHS is expected to close in the by the end of the first quarter of fiscal 2019, upon receipt of necessary regulatory approvalsand satisfaction of closing conditions. As of the end of fiscal 2018, the Company evaluated the recoverability of the carrying value of its assetsheld for sale related to the NAND Definitive Agreement. Given the proximity of the anticipated closing of the transaction to the end of fiscal 2018,the Company has considered the value expected to be realized from the JV as the part of this recoverability assessment and concluded that theCompany is not expected to recover the carrying value of goodwill and intangible assets. Accordingly, the Company recorded an impairmentcharge of $76.6 million during fiscal 2018.The aggregate value of the remaining assets recorded as held for sale at the end of fiscal year 2018 was $13.5 million.Sale of manufacturing facility located in MinnesotaIn fiscal 2016, the Company committed to a plan to sell its wafer manufacturing facility located in Bloomington, Minnesota, as well as a building inAustin, Texas. The carrying value of these assets held for sale as at the end of fiscal 2016 reflected the lower of the carrying value or fair value,net of estimated costs to sell the assets. The Company performed an analysis and estimated the fair value of the assets, less estimated sellingcosts, and determined the fair value was lower than the carrying value of the assets. As a result, based on this analysis the Company recorded animpairment charge of $37.2 million during fiscal 2016 to write these assets down to their estimated fair value, less selling costs.The sales of the wafer fabrication facility in Minnesota and the sale of the building in Austin were completed during the first quarter of fiscal 2017.During the year ended December 31, 2017, the Company recorded a gain of $1.2 million resulting from the change in the estimated costs to sellthese assets. This gain was recorded in the selling, general and administrative line item of the Consolidated Statements of Operations. TheCompany completed the sale of both of these asset groups during the year ended December 31, 2017 and received gross proceeds from the salesof $35.5 million.74NOTE 7. INVESTMENT IN EQUITY METHOD INVESTMENTSPrivately-held equity investments are accounted for under the equity method of accounting if the Company has an ownership interest of 20% orgreater or if it has the ability to exercise significant influence over the operations of such companies. The below table presents the changes in the carrying value of the equity method investments. As of December 30, 2018 (In thousands) Deca TechnologiesInc. ("Deca") Enovix Corporation("Enovix") TotalCarrying value as of January 1, 2017 $134,327 $54,360 $188,687Additional investment — 5,600 5,600Equity in net loss of equity method investees (11,813) (8,773) (20,586)Impairment of investment — (51,187) (51,187)Carrying value as of December 31, 2017 122,514 — 122,514Equity in net loss of equity method investees (15,849) — (15,849)Impairment of investment (41,520) — (41,520)Carrying value as of December 30, 2018 $65,145 $— $65,145The following table presents summarized aggregate financial information derived from the respective consolidated financial statements of Deca forthe year ended December 30, 2018 and of Deca and Enovix for the year ended December 31, 2017. Year Ended December 30, 2018 December 31, 2017 (in thousands)Operating data: Revenue $18,562 $15,500Gross loss (11,605) (8,964)Loss from operations (29,619) (44,415)Net loss (30,212) (43,589)Net loss attributable to Cypress $(15,849) $(20,586)The following table represents the assets and liabilities held by Deca as of December 30, 2018, and by Deca and Enovix as of December 31,2017. For the Year Ended December 30, 2018December 31, 2017 (in thousands)Balance Sheet Data: Current Assets$25,865$70,101 Long-term Assets$51,176$55,673 Current Liabilities$9,635$15,615 Long-term Liabilities$877$1,85975The Company’s investments are periodically reviewed for other-than-temporary declines in fair value by considering available evidence, includinggeneral market conditions, financial condition, pricing in recent rounds of financing, if any, earnings and cash flow forecasts, recent operationalperformance and any other readily available market data.Deca Technologies Inc.On July 29, 2016, Deca, a majority owned subsidiary of the Company entered into a share purchase agreement (the "Purchase Agreement"),whereby certain third-party investors purchased 41.1% of the shares outstanding on such date for an aggregate consideration of approximately$111.4 million. Concurrently, Deca repurchased certain of its preferred shares from Cypress.After giving effect to the above transactions, the Company's ownership in Deca was reduced to 52.2% as of July 29, 2016. As a consequence ofthe substantive rights afforded to third-party new investors in the Purchase Agreement, including, among other things, participation on the Board ofDirectors of Deca, the approval of operating plans, approval of indebtedness, the Company determined that it no longer has the power to direct theactivities of Deca that most significantly impact Deca's economic performance. However, since the Company continues to have significantinfluence over Deca's financial and operating policies, effective July 29, 2016, the investment in Deca is being accounted for as an equity methodinvestment and is no longer a consolidated subsidiary. The carrying value of this equity method investment as of July 29, 2016 was determinedbased on the fair value of the equity in Deca, which was estimated to be $142.5 million. This represents the Company's remaining investment inDeca immediately following the investments by the third-party investors. As a result of the change in the method of accounting for the Company'sinvestment in Deca from consolidation to the equity method of accounting, the net carrying value of the assets and liabilities related to Deca andthe adjustments related to the recognition of the initial fair value of the equity method investment resulted in a gain of $112.8 million which hasbeen reflected as "Gain related to investment in Deca Technologies Inc." in the Consolidated Statements of Operations.During the fourth quarter of fiscal 2018, the Company determined that its investment in Deca, which is accounted for as an equity methodinvestment, was other-than temporarily impaired due to failure to achieve significant product development and testing milestones. The Companyestimated the fair value of Deca using the income approach. The income approach considers a number of factors that include, but are not limitedto, forecasted financial information, growth rates, terminal or residual values and discount rates and require the Company to make certainassumptions and estimates regarding industry economic factors and the future profitability of the business. As a result, the Company recorded acharge of $41.5 million in order to write down the carrying amount of the investment to the estimated fair value as of the end of fiscal 2018. Thiswrite down was recorded in "Share in net loss and impairment of equity method investees" in the Consolidated Statements of Operations.The Company held 52.5% of Deca's outstanding voting shares as of December 30, 2018 and December 31, 2017.Enovix CorporationIn 2017, the Company completed its investment commitment in Enovix of $85.1 million per the original agreement dated February 22, 2012.Certain third-party investors made additional investments in Enovix in 2018, as a result of which the Company's ownership in Enovix decreasedfrom 41.2% as of December 31, 2017 to 24.8% as of December 30, 2018.During the fourth quarter of fiscal 2017, the Company determined that its investment in Enovix, which is accounted for as an equity methodinvestment, was other-than temporarily impaired as it did not achieve certain key planned product development milestones. The Companyconsidered various factors in determining whether to recognize an impairment charge, including the expectations of the investee's future cashflows and capital needs, the length of time the investee has been in a loss position, the ability to achieve milestones, and the near-term prospectof the investee and its exit strategy. Enovix’s estimated enterprise value is sensitive to its ability to achieve these milestones. Consequently, theCompany recognized a charge of $51.2 million in order to write down the carrying amount of the investment to zero. This amount was recorded in"Share in net loss and impairment of equity method investees” in the Consolidated Statements of Operations.76NOTE 8. FAIR VALUE MEASUREMENTSAssets and Liabilities Measured at Fair Value on a Recurring BasisThe following table presents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis asof December 30, 2018 and December 31, 2017: As of December 30, 2018 As of December 31, 2017 Level 1 Level 2 Total Level 1 Level 2 Total (In thousands)Financial Assets Cash equivalents: Money market funds$171,777 $— $171,777 $20,477 $— $20,477Other current assets: Certificates of deposit— 870 870 — 972 972Total cash equivalents and other current assets171,777 870 172,647 20,477 972 21,449Employee deferred compensation plan assets18,648 25,749 44,397 47,291 2,204 49,495Interest rate swaps— 2,548 2,548 — — —Foreign exchange forward contracts— 2,362 2,362 — 1,197 1,197Total financial assets$190,425 $31,529 $221,954 $67,768 $4,373 $72,141Financial Liabilities Foreign exchange forward contracts— 1,621 1,621 — 1,426 1,426Interest rate swaps— 4,051 4,051 — — —Total financial liabilities$— $5,672 $5,672 $— $1,426 $1,426Fair Value of Financial Instruments:Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants atthe measurement date. The Company's financial assets and financial liabilities that require recognition under the guidance generally includeemployee deferred compensation plans and foreign currency derivatives. The guidance establishes a hierarchy for inputs used in measuring fairvalue that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be usedwhen available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market dataobtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about theassumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.As such, fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liabilityrather than an entity-specific measure. The hierarchy is broken down into three levels based on the reliability of inputs as follows:•Level 1—includes instruments for which quoted prices in active markets for identical assets or liabilities that the Company has the abilityto access. The Company’s financial assets utilizing Level 1 inputs include money market funds, marketable equity securities and certainemployee deferred compensation plan assets.•Level 2—includes instruments for which the valuations are based on the quoted market price for similar instruments or nonbinding marketprices that are corroborated by observable market data. The Company’s Level 2 instruments include certain U.S. government securities,commercial paper, corporate notes and bonds, certificates of deposit, and deferred compensation plan life insurance assets. TheCompany determines the fair values of such instruments by using inputs such as actual trade data, benchmark yields, broker/dealerquotes, and other similar data, which are obtained from quoted market prices, custody bank, third-party pricing vendors, or other sources.Derivative hedging contracts are classified as77Level 2 because the valuation inputs are based on observable market data of similar instruments. The Company principally executes itsderivative hedging contracts in the retail market in an over-the-counter environment with a relatively high level of price transparency. Themarket participants and the Company’s counterparties are large money center banks and regional banks. The valuation inputs for theCompany’s derivative hedging contracts are based on observable market data from public data sources (specifically, spot rates, forwardpoints, LIBOR rates, volatilities and credit default rates at commonly quoted intervals) and do not involve management judgment.•Level 3—includes instruments for which the valuations are based on inputs that are unobservable and significant to the overall fair valuemeasurement. As of December 30, 2018 and December 31, 2017, the Company did not own any material financial assets utilizing Level 3inputs on a recurring basis.The Company determines the basis of the cost of a security sold or the amount reclassified out of accumulated other comprehensive income(loss) into earnings using the specific identification method. As of December 30, 2018, the contractual maturities of the Company’s certificates of deposit were less than a year.In December 2017, the Company entered into fixed-for-floating interest rate forward swap agreements with two counter parties, to swap variableinterest payments on certain debt for fixed interest payments. In October 2018, the Company entered into fixed-for-floating interest rate forwardswap agreements starting in July 2021 with two counterparties to swap future variable interest payments on existing debt for fixed interestpayments; these agreements will expire in December 2024. In fiscal 2018, the gross asset and liability at fair value was $2.5 million and $4.1 million respectively and the net impact to the ConsolidatedStatements of Operations was immaterial. See Note 12 of the Notes to Consolidated Financial Statements for a detail discussion.Assets and Liabilities Measured at Fair Value on a Nonrecurring BasisCertain of the Company’s assets, including intangible assets, goodwill, cost-method investments and assets held for sale, are measured at fairvalue on a nonrecurring basis using Level 3 inputs if impairment is indicated.As of December 30, 2018, the carrying value of the Company’s Senior Secured Credit Facility was $467.9 million (See Note 15). The carryingvalue of the Company's Senior Secured Revolving Facility approximates its fair value since it bears an interest rate that is comparable to rates onsimilar credit facilities and is determined using Level 2 inputs.The Company's 2% 2020 Spansion Exchangeable Notes assumed as part of the merger with Spansion are traded in the secondary market and arecategorized as Level 2. The principal of the Notes and the estimated fair value of the principal as of December 30, 2018 were $12.0 million and$30.9 million respectively. See Note 15 of the Notes to Consolidated Financial Statements for further details.The Company’s 4.5% 2022 Senior Exchangeable Notes are traded in the secondary market and their fair value is determined using Level 2 inputs.The principal of the Notes and the estimated fair value as of December 30, 2018, were $287.5 million and $336.6 million, respectively. See Note 15of the Notes to Consolidated Financial Statements for further details.The Company’s 2% 2023 Exchangeable Notes are traded in the secondary market and their fair value is determined using Level 2 inputs. Theprincipal of the Notes and the estimated fair value of the principal as of December 30, 2018, were $150.0 million and $140.6 million, respectively.See Note 15 of the Notes to Consolidated Financial Statements for further details.78NOTE 9. BALANCE SHEET COMPONENTSAccounts Receivable, net As of December 30,2018 December 31,2017 (In thousands)Accounts receivable, gross$325,178 $301,465Allowances for doubtful accounts receivable(904) (1,028)Allowances for sales returns— (4,446)Accounts receivable, net$324,274 $295,991 Inventories As of December 30, 2018 December 31, 2017 (In thousands)Raw materials$10,004 $15,635Work-in-process215,820 176,427Finished goods66,269 80,065Total inventories$292,093 $272,127 Other Current Assets As of December 30, 2018 December 31, 2017 (In thousands)Prepaid tooling$25,891 $21,132Advance to suppliers12,058 15,968Prepaid royalty and licenses14,863 16,630Derivative assets3,492 1,197Value added tax receivable7,652 11,412Prepaid expenses17,814 17,737Withholding tax receivable and tax advance4,236 5,790Other current assets15,157 13,771Total other current assets$101,163 $103,637 79Property, Plant and Equipment, Net As of December 30,2018 December 31,2017 (In thousands)Land$28,898 $29,813Equipment607,849 559,573Buildings, building and leasehold improvements170,588 174,559Construction in progress15,489 17,836Furniture and fixtures4,885 5,117Total property, plant and equipment, gross827,709 786,898Less: Accumulated depreciation and amortization(544,723) (497,344)Total property, plant and equipment, net$282,986 $289,554Other Long-term Assets As of December 30, 2018 December 31, 2017 (In thousands)Employee deferred compensation plan$44,397 $49,495Investments in cost method equity securities— 17,017Long-term licenses4,495 8,654Advances to suppliers11,471 11,315Deposits9,441 9,830Pension plan assets1,765 8,026Derivatives assets1,419 607Prepaid tooling and other non-current assets51,317 37,802Total other long-term assets$124,305 $142,746 Other Current Liabilities As of December 30, 2018 December 31, 2017 (In thousands)Employee deferred compensation plan$44,834 $50,629Restructuring accrual (see Note 11)14,536 9,580Derivative liability1,621 2,033Accrued expenses46,592 47,789Accrued interest9,440 8,094Customer advances5,296 12,873Other current liabilities15,745 12,487Total other current liabilities$138,064 $143,485 80Other Long-Term Liabilities As of December 30, 2018 December 31, 2017 (In thousands)Pension and other employee-related liabilities$14,083 $16,779Restructuring accrual (see Note 11)— 8,596Asset retirement obligation5,916 5,693Derivative liability4,051 —Other long-term liabilities3,870 4,374Total other long-term liabilities$27,920 $35,442 NOTE 10. EMPLOYEE STOCK PLANS AND STOCK-BASED COMPENSATIONThe Company’s equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and alignstockholder and employee interests.The Company currently has the following employee stock plans:1999 Stock Option Plan ("1999 Plan"):The 1999 Plan expired in March 2009. There are currently no shares available for grant under the 1999 Plan. Under the 1999 Plan, awards covering0.2 million shares are outstanding as of December 30, 2018. Any shares subject to awards that are canceled or forfeited under the 1999 Plan aftersuch date will not be available for future grants since the 1999 Plan has expired.2013 Stock Plan ("2013 Plan"):The 2013 Plan provides for (1) the discretionary granting of incentive stock options, nonstatutory stock options, stock appreciation rights ("SARs"),restricted stock awards ("RSAs"), restricted stock units ("RSUs") or performance-based restricted stock units ("PSUs") to employees, consultantsand outside directors; and (2) the grant of nonstatutory stock options, SARs, RSAs, RSUs or PSUs to outside directors pursuant to an automatic,non-discretionary formula. Options or awards granted under the 2013 Stock Plan generally expire over terms not exceeding eight years from thedate of grant, subject to earlier termination upon the cessation of employment or service of the recipients. The maximum aggregate number ofshares authorized for issuance under the 2013 Stock Plan is 203.6 million shares. Shares issued in respect of "full-value awards" (RSAs, RSUs,PSUs, and other awards with a per share purchase price lower than 100% of the stock's fair market value on the date of grant) count against theauthorized limit as 1.88 shares for every one share actually issued. As of December 30, 2018, 36.1 million options or 19.2 million RSUs, PSUsand RSAs were available for grant under the 2013 Stock Plan.2010 Equity Incentive Award Plan ("2010 Plan"):In connection with the Company’s merger with Spansion, the Company assumed Spansion's 2010 Plan, as amended, which reserves shares ofCypress common stock for issuance under stock options, stock appreciation rights, restricted stock units, restricted stock, performance awards,stock payments, dividend equivalents and deferred stock to employees and consultants. The 2010 Plan provides that incentive stock options maybe granted only to employees of the Company or its subsidiaries. All stock options expire if not exercised by the seventh anniversary of the grantdate. RSU awards generally vest over a period of two to four years. Options granted become exercisable in full or in installments pursuant to theterms of each agreement evidencing options granted. The exercise of stock options and issuance of restricted stock and restricted stock units issatisfied by issuing authorized common stock or treasury stock. Shares that are subject to or underlie awards that expire or for any reason arecanceled, terminated or forfeited, or fail to vest will again be available for grant under the 2010 Plan. Grants from this plan are limited to employeeswho joined Cypress as part of the merger with Spansion and employees hired after the merger. As of December 30, 2018, a total of 2.5 millionstock options, RSUs and RSAs remained available for grant under the 2010 Plan.812012 Incentive Award Plan ("2012 Plan"):In connection with the Company’s acquisition of Ramtron in 2012, the Company assumed Ramtron's 2012 Plan, as amended, which reserves atotal of 1.2 million shares of common stock for issuance. The exercise price of all non-qualified stock options must be no less than 100% of thefair market value on the effective date of the grant under the 2012 Plan, and the maximum term of each grant is seven years. The 2012 Planpermits the issuance of incentive stock options, restricted stock, and other types of awards. Restricted stock grants generally vest five years fromthe date of grant. Options granted become exercisable in full or in installments pursuant to the terms of each agreement evidencing optionsgranted. The exercise of stock options and issuance of restricted stock and restricted stock units is satisfied by issuing authorized common stockor treasury stock. Grants from this plan are limited to employees who joined Cypress as part of the Ramtron acquisition and employees hired afterthe acquisition. Shares issued in respect of full-value awards count against the plan's limit as 1.53 shares for every one share actually issued. Asof December 30, 2018, 0.2 million stock options or 0.1 million RSUs and RSAs were available for grant under the 2012 Plan.Employee Stock Purchase Plan ("ESPP"):The Company’s amended and restated Employee Stock Purchase Plan ("ESPP") allows eligible employees to purchase shares of the Company'scommon stock through payroll deductions. Prior to January 2018, the ESPP provided for consecutive 18 months offering periods composed ofthree six months exercise periods. Starting in January 2018, offering periods for new participants (and for continuing participants, upon theexpiration of their prior offering period) are composed of only one 6-month exercise period. As of the December 31, 2018, purchase date, all 18months offering periods have concluded. Under the ESPP's terms, at the end of each exercise period shares are purchased by participatingemployees at a price equal to 85% of the fair market value of the common stock at the commencement of the offering period of which suchexercise period is a part or on the last day of such exercise period, whichever is lower. Purchases are limited to 10% of an employee’s eligiblecompensation, subject to a maximum annual employee contribution limit of $21,250. As of December 30, 2018, 1.9 million shares were availablefor future issuance under the ESPP.Stock-Based CompensationThe following table summarizes stock-based compensation expense by line item in the Consolidated Statements of Operations: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) Cost of revenues$16,531 $15,605 $17,971Research and development35,115 36,804 38,189Selling, general and administrative44,319 39,172 42,353Total stock-based compensation expense$95,965 $91,581 $98,513Aggregate cash proceeds from the issuance of shares under the employee stock plans were $40.7 million, $47.2 million and $43.9 million for fiscal2018, fiscal 2017 and 2016, respectively. As of December 30, 2018 and December 31, 2017 stock-based compensation capitalized in inventoriestotaled $2.5 million and $3.3 million, respectively.82The following table summarizes stock-based compensation expense by type of awards: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) Stock options$96 $163 $700Restricted stock units and restricted stock awards90,655 82,946 85,170ESPP5,214 8,472 12,643Total stock-based compensation expense$95,965 $91,581 $98,513 During fiscal 2016, the Company, as part of the severance agreement executed with the Company's former CEO and severance agreements withtwo other executives, accelerated the vesting of certain awards previously granted and modified the vesting conditions. Included in the stock-based compensation expense for the year ended January 1, 2017 is an amount of $4.3 million related to the impact of such modifications.The following table summarizes the unrecognized stock-based compensation balance by type of awards as of December 30, 2018:(In thousands) Weighted-AverageAmortizationPeriod (In years)Restricted stock units and restricted stock awards59,046 1.25Total unrecognized stock-based compensation balance, net of estimated forfeitures$59,046 1.25Employee Equity Award ActivitiesAs of December 30, 2018, 38.8 million stock options, or 21.8 million RSUs/PSUs, were available for grant under the 2013 Stock Plan, the 2010Plan and the 2012 Plan.The following table summarizes the Company’s stock option activities: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 Shares Weighted-AverageExercise Priceper Share Shares Weighted-AverageExercise Priceper Share Shares Weighted-AverageExercise Priceper Share (In thousands, except per-share amounts)Options outstanding, beginning of year4,627 $11.63 7,947 $10.70 16,840 $7.99Exercised(1,547) $9.81 (2,898) $8.80 (8,255) $5.03Forfeited or expired(441) $17.29 (422) $13.58 (638) $12.54Options outstanding, end of year2,639 $11.75 4,627 $11.63 7,947 $10.70Options exercisable, end of year2,612 $11.76 4,340 $11.66 6,736 $10.62There were no options granted during fiscal years 2018, 2017, and 2016.The aggregate intrinsic value of the options outstanding and options exercisable as of December 30, 2018 was $4.6 million and $4.5 millionrespectively. The aggregate intrinsic value represents the total pre-tax intrinsic value which83would have been received by the option holders had all option holders exercised their options as of December 30, 2018 and does not includesubstantial tax payments.The aggregate intrinsic value of the options outstanding and options exercisable as of December 31, 2017 was $19.2 million and $18.0 million,respectively. The aggregate intrinsic value represents the total pre-tax intrinsic value which would have been received by the option holders had alloption holders exercised their options as of December 31, 2017 and does not include substantial tax payments.The aggregate pre-tax intrinsic value of option exercises, which represents the difference between the exercise price and the value of Cypresscommon stock at the time of exercise, was $11.2 million in fiscal 2018, $16.2 million in fiscal 2017 and $46.0 million in fiscal 2016.The aggregate grant date fair value of the options which vested in fiscal 2018, 2017, and 2016 was $0.8 million, $2.7 million, and $3.5 million,respectively.The following table summarizes information about options outstanding and exercisable as of December 30, 2018: Options Outstanding Options ExercisableRange of Exercise PriceShares Weighted-AverageRemainingContractualLife Weighted-AverageExercisePrice perShare Shares Weighted-AverageExercisePrice perShare (in thousands) (In years) (in thousands) $3.47-$11.552,198 2.08 $10.57 2,171 $10.57$12.27-$16.68129 2.44 $12.53 128 $12.53$18.86-$21.63266 0.82 $19.08 266 $19.08$22.88-$22.8839 0.11 $22.88 39 $22.88$23.23-$23.237 0.52 $23.23 7 $23.23 2,639 1.19 $11.75 2,611 $11.76 The total number of exercisable in-the-money options was 2.3 million shares as of December 30, 2018.Restricted Stock Units, Performance-Based Restricted Stock Units and Restricted Stock Awards:The following table summarizes the Company’s restricted stock unit, performance-based restricted awards and restricted stock award activities: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 Shares Weighted-AverageGrant DateFair Valueper Share Shares Weighted-AverageGrant DateFair Valueper Share Shares Weighted-AverageGrant DateFair Valueper Share (In thousands, except per-share amounts)Non-vested, beginning of year11,976 $12.44 13,780 $11.83 11,053 $13.43Granted and assumed6,344 $16.37 6,488 $13.40 11,318 $11.19Released(6,601) $12.92 (6,248) $12.17 (5,890) $13.36Forfeited(1,544) $13.49 (2,044) $12.22 (2,701) $12.36Non-vested, end of year10,175 $14.42 11,976 $12.44 13,780 $11.83 During the first quarter of 2018, the Compensation Committee of the Company's Board of Directors approved the issuance of service-based andperformance-based restricted stock units under the 2013 Plan as part of the Company's Long-Term Incentive Program ("LTIP") to certainemployees. The milestones for the 2018 LTIP grants include service84and performance conditions based on revenue growth and profit milestones over the next 3 years. A portion of the LTIP awards include a multiplierbased on certain market conditions.On March 16, 2017, the Compensation Committee of the Company approved the issuance of service-based and performance-based restrictedstock units under the Company's Performance Accelerated Restricted Stock ("PARS") program to certain employees. Both PARS and LTIP grantsinclude performance milestones that are tied to the Company's overall financial performance relative to the financial performance of a selectedindustry index, peer group, and/or internal targets. Awards are granted annually, with each award typically covering several overlappingperformance and vesting periods.With regard to the performance conditions, the fair value of new or modified awards is equal to the grant date fair market value of the Company'scommon stock, net of the estimated dividend credit. The compensation cost is recognized over the requisite service period when it is probable thatthe performance condition will be satisfied. For market conditions, the compensation cost is recognized regardless of whether the conditions aresatisfied and based on the grant date fair value of new or modified awards using a Monte Carlo simulation valuation model.The milestones for the 2018 LTI program, as approved by the Compensation Committee, included a service condition and performance conditionslinked to the Company's earnings in 2018, profit before tax in 2020 and three year total stockholder return (TSR) over the period 2018-2020.The milestones for the 2017 PARS program, as approved by the Compensation Committee, included a service condition and performanceconditions linked to the Company's total shareholder return (TSR) relative to its peers, achievement of Spansion merger synergies, achievement ofnon-GAAP earnings per share and margin and certain product development milestones.The milestones for the 2016 PARS program, as approved by the Compensation Committee, included a service condition and performanceconditions related to the Company's TSR relative to its peers, achievement of Spansion merger synergies and achievement of non-GAAP earningsper share.ESPP:The Company estimates the fair value of ESPP awards using the Black-Scholes valuation model. Assumptions used in the Black-Scholesvaluation model were as follows: Year Ended December 30, 2018 December 31, 2017 January 1, 2017ESPP: Expected life0.5-1.5 years 0.5-1.5 years 0.5-1.5 yearsVolatility31.94%-38.13% 34.8%-38.1% 36.9%-38.5%Risk-free interest rate1.06%-2.14% 0.65%-1.28% 0.37%-0.61%Dividend yield2.78%-3.87% 3.22%-3.87% 4.1%Expected life: The expected term represents the average term from the first day of the offering period to the purchase date.Volatility: The Company determined that implied volatility of publicly traded call options and quotes from option traders on its common stock ismore reflective of market conditions and, therefore, can reasonably be a better indicator of expected volatility than historical volatility. Therefore,volatility is based on a blend of historical volatility of the Company’s common stock and implied volatility.Risk-free interest rate: The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant.Dividend yield: The expected dividend is based on the Company’s history, and expected dividend payouts.During fiscal 2018, 2017 and 2016, the Company issued 2.3 million, 2.4 million and 1.2 million shares under its ESPP with weighted-average priceof $11.24, $8.48 and $8.34 per share, respectively.85NOTE 11. RESTRUCTURINGSince 2016, the Company has launched certain long-term strategic corporate transformation initiatives which required restructuring activities tostreamline internal processes and redeploy personnel and resources to target markets as discussed below:2018 Restructuring PlanDuring the first quarter of fiscal 2018, the Company began implementation of a reduction in workforce (the "2018 Plan") which resulted inelimination of approximately 75 positions across various functions. In the third quarter of fiscal 2018, the Company increased the reduction inworkforce under the 2018 plan by approximately 50 positions across various functions. The restructuring costs of $4.9 million during the yearended December 30, 2018 consist of personnel costs. The Company anticipates that the remaining restructuring accrual balance of $0.2million will be paid out in cash through the first quarter of fiscal 2019.2017 Restructuring PlanIn December 2017, the Company began implementation of a reduction in workforce ("2017 Plan") which resulted in elimination of approximately 80positions worldwide across various functions. The restructuring charge of $2.4 million during the year ended December 30, 2018 consists ofpersonnel costs. The Company anticipates that the remaining restructuring accrual balance of $30.0 thousand will be paid out in cash through thefirst quarter of fiscal 2019.2016 Restructuring PlanIn September 2016, the Company began implementation of a reduction in workforce ("2016 Plan") which resulted in elimination of approximately430 positions worldwide across various functions. No restructuring costs were recorded during the year ended December 30, 2018 related to thisplan. The personnel costs related to the 2016 plan during the year ended December 31, 2017 were $2.6 million. The Company had paid out theremaining restructuring cost of $0.5 million, which consisted of personnel costs, by July 1, 2018.Spansion Integration-Related Restructuring PlanIn March 2015, the Company implemented cost reduction and restructuring activities in connection with its merger with Spansion The restructuringcharge of $90.1 million recorded for the fiscal year ended January 3, 2016 primarily consists of severance costs, lease termination costs andimpairment of property, plant and equipment.As part of this restructuring plan, the Company exited an office space leased by Spansion and had recorded a reserve related to excess leaseobligation for the building. During the fourth quarter of fiscal 2018, the Company signed a termination agreement with the building’s owner. Thelease termination cost is approximately $19.0 million. The Company had paid out $4.7 million by the end of fiscal 2018 and anticipates paying outthe remaining $14.3 million through the end of the first quarter of fiscal 2019.During fiscal 2016, a release of previously estimated personnel related liability of $0.1 million was recorded. No charges were recorded during fiscal2017 for the Spansion Integration Plan.86Summary of Restructuring CostsThe following table summarizes the restructuring charges recorded in the Consolidated Statements of Operations: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands)Personnel Costs$7,085 7,479 $26,131Lease termination costs and other related charges9,757 540 —Other— 1,069 —Total restructuring and other charges$16,842 $9,088 $26,131The following table summarizes the restructuring costs by line item recorded in the Consolidated Statements of Operations: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands)Cost of revenues3,271 548 1,420Research and development1,786 5,915 15,956Selling, general and administrative11,785 2,625 8,755Total restructuring costs16,842 9,088 26,131Roll-forward of the restructuring reservesRestructuring activity under the Company's various restructuring plan was as follows: Year Ended December 30, 2018 (In thousands) 2018 Plan 2017 Plan 2016 Plan SpansionIntegration plan TotalAccrued balance as of January 3,2016$— $— $— $21,487 $21,487Provision— — 26,261 (130) 26,131Cash payments and other adjustments— — (5,157) (7,138) (12,295)Accrued balance as of January 1, 2017— — 21,104 14,219 35,323Provision— 6,464 2,624 — 9,088Cash payments and other adjustments— (325) (22,985) (2,922) (26,232)Accrued balance as of December 31, 2017— 6,139 743 11,297 18,179Provision4,898 2,421 (234) 9,757 16,842Cash payments and other adjustments(4,650) (8,530) (509) (6,796) (20,485)Accrued balance as of December 30, 2018$248 $30 $— $14,258 $14,53687 NOTE 12. FOREIGN CURRENCY AND INTEREST RATE DERIVATIVESThe Company enters into multiple foreign exchange forward contracts to hedge certain operational exposures resulting from fluctuations inJapanese yen and Euro exchange rates. The Company does not enter into derivative securities for speculative purposes. The Company’s hedgingpolicy is designed to mitigate the impact of foreign currency exchange rate fluctuations on its operating results. Some foreign currency forwardcontracts are considered to be economic hedges that were not designated as hedging instruments while others were designated as cash flowhedges. Whether designated or non-designated as cash flow hedges, these forward contracts protect the Company against the variability offorecasted foreign currency cash flows resulting from revenues, expenses and net monetary asset or liability positions designated in currenciesother than the U.S. dollar. The maximum original duration of any contract allowable under the Company’s hedging policy is thirteen months forforeign currency hedging contracts.Cash Flow HedgesThe Company enters into cash flow hedges to protect non-functional currency inventory purchases and certain other operational expenses, inaddition to its on-going program of cash flow hedges to protect its non-functional currency revenues against variability in cash flows due to foreigncurrency fluctuations. The Company’s foreign currency forward contracts that were designated as cash flow hedges generally have tenors betweenthree and thirteen months. All hedging relationships are formally documented, and the hedges are designed to offset changes to future cash flowson hedged transactions at the inception of the hedge. The Company recognizes derivative instruments from hedging activities as either assets orliabilities on the balance sheet and measures them at fair value on a monthly basis. The Company records changes in the intrinsic value of itscash flow hedges in accumulated other comprehensive income on the Condensed Consolidated Balance Sheets, until the forecasted transactionoccurs. Prior to the second quarter of 2018, interest charges or "forward points" on the forward contracts are excluded from the assessment ofhedge effectiveness and are recorded in interest and other income, net in the Condensed Consolidated Statements of Operations. In the secondquarter of 2018, the Company entered into cash flow hedges, in which interest charges or "forward points" on the forward contracts are included inthe assessment of hedge effectiveness, and are recorded in the underlying hedged items in the Condensed Consolidated Statements ofOperations. When the forecasted transaction occurs, the Company reclassifies the related gain or loss on the cash flow hedge to revenue orcosts, depending on the risk hedged. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will notoccur, the Company will reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive income to interest andother income, net in its Condensed Consolidated Statements of Operations at that time.The Company evaluates hedge effectiveness at the inception of the hedge prospectively as well as retrospectively and records any ineffectiveportion of the hedge in other income (expense), net in its Consolidated Statements of Operations.At December 30, 2018, the Company had net outstanding forward contracts to buy ¥5,977 million for $54.4 million. At December 31, 2017, theCompany had net outstanding forward contracts to buy ¥3,335 million for $29.8 million.Designated hedgesTotal notional amounts of net outstanding contracts were as summarized below:Buy / Sell December 30, 2018December 31, 2017 (In millions)US dollar / Japanese Yen $44.5 / ¥4,850 $58.7 / ¥6,476Japanese Yen / US dollar ¥10,827 / $98.8 ¥9,811 / $88.488Non-designated hedgesTotal notional amounts of net outstanding contracts were as summarized below. The duration or each contract is approximately thirty days: Buy / Sell December 30, 2018December 31, 2017 (In millions)US dollar / EUR $9.1 / €8.0$8.8 / €7.4US dollar / Japanese Yen $13.2 / ¥1,430 $15.9 / ¥1,744Japanese Yen / US dollar ¥4,210 / $38.0 ¥4,790 / $43.0Interest rate swapsIn December 2017, the Company entered into fixed-for-floating interest rate forward swap agreements starting in April 2018 with two counterparties,to swap future variable interest payments on certain debt for fixed interest payments; these agreements will expire in July 2021. The objective ofthe swaps was to effectively fix the interest rate at current levels without having to refinance the outstanding term loan, thereby avoiding theincurrence of transaction costs. The interest rate on the variable debt was fixed in December 2017 and became effective in April 2018.On January 3, 2018, the Company evaluated the hedge effectiveness of the interest rate swaps and designated these swaps as hedginginstruments. Upon designation as cash flow hedge instruments, future changes in fair value of these swaps are recognized in accumulated othercomprehensive income (loss). In October 2018, the Company entered into fixed-for-floating interest rate forward swap agreements starting in July 2021 with two counterparties toswap future variable interest payments on existing debt for fixed interest payments; these agreements will expire in December 2024. The objectiveof the swaps was to effectively fix the future interest rate at the level currently available to avoid the uncertainty in financing cost for a portion ofdebt due to future interest rate fluctuations. The aggregate notional amount of these interest rate swaps was $300 million. The Company hasevaluated the hedge effectiveness of the interest rate swaps and has designated these swaps as cash flow hedges of the debt with future changesin fair value of these swaps is recognized in accumulated other comprehensive income (loss).For fiscal year 2018, the Company has recorded a loss in other comprehensive income of $1.3 million for these interest rate swaps.The gross asset and liability at fair value was $2.5 million and $4.1 million respectively and the net impact to the Consolidated Statements ofOperations was immaterial.The effect of derivative instruments in the Consolidated Statements of Operations for fiscal 2018 is $0.2 million. There is no effect of derivativeinstruments in fiscal 2017,The gross fair values of derivative instruments on the Consolidated Balance Sheets as of December 30, 2018 and December 31, 2017 were asfollows:89 December 30, 2018 December 31, 2017Balance Sheet location Derivatives designatedas hedging instruments Derivatives notdesignated as hedginginstruments Derivatives designatedas hedging instruments Derivatives notdesignated as hedginginstruments (in thousands)Other Current Assets Derivative Asset $2,767 $725 $805 $392 Non-current Assets Derivative Asset $1,419 $— $— $607 Other Current Liabilities Derivative Liability $1,210 $411 $775 $1,258 Non-Current Liabilities Derivative Liability 4,051 — — —NOTE 13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)The components of accumulated other comprehensive income (loss) were as follows: Accumulated netunrealized income (loss)on cash flow hedges and other Accumulatedunrecognizedgain (loss) on theDefined Benefit Plan Accumulatedothercomprehensiveincome (loss) (in thousands)Balance as of January 1, 2017$(7,623) $(1,188) $(8,811)Other comprehensive income (loss) before reclassification511 — 511Amounts reclassified to other income (expense), net6,614 $— 6,614Net unrecognized gain (loss) on the defined benefit plan— 324 324Balance as of December 31, 2017(498) (864) (1,362)Other comprehensive income (loss) before reclassification(644) — (644)Amounts reclassified to operating income379 — 379Net unrecognized gain (loss) on the defined benefit plan— 3,456 3,456Balance as of December 30, 2018$(763) $2,592 $1,829NOTE 14. OTHER (EXPENSE) INCOME, NETThe following table summarizes the components of “other (expense) income, net,” recorded in the Consolidated Statements of Operations: 90 Year Ended December 30, 2018 December 31,2017 January 1, 2017 (In thousands)Interest income$— $568 $1,836Changes in fair value of investments under the deferred compensation plan(2,904) 6,087 2,326Unrealized (loss) gain on marketable securities— — 325Foreign currency exchange and other (losses) gains, net(340) (1,838) (4,251)(Loss) gain on sale of investments351 — (265)Other375 (549) 342Other (expense) income, net$(2,518) $4,268 $313 NOTE 15. DEBT Debt is comprised of the following: December 30, 2018 December 31, 2017 (in thousands)Current portion of long-term debt Senior Secured Credit Facility: Term Loan B 5,051 27,303 Capital Lease Obligations 1,892 —Current portion of long-term debt 6,943 27,303Revolving credit facility and long-term portion of debt Senior Secured Credit Facility: Revolving Credit Facility — 90,000 Term Loan B 462,868 468,080 2.0% 2020 Exchangeable Notes 11,438 20,375 4.5% 2022 Senior Exchangeable Notes 256,726 246,636 2.0% 2023 Exchangeable Notes 135,057 131,422 Capital lease obligations 8,146 — Credit facility and long-term debt 874,235 956,513Total debt $881,178 $983,816 Revolving Credit Facility, Term Loan A, Term Loan BOn March 12, 2015, the Company entered into an Amended and Restated Credit and Guaranty Agreement with Morgan Stanley Bank, N.A., asissuing bank, and other lenders (as amended, the "Credit Agreement"). The Credit Agreement establishes a credit facility (the "Credit Facility" orthe "Senior Secured Credit Facility") that includes a revolving loan facility (the "Revolving Credit Facility") and provides for the possibility of termloans.As per the terms of the Credit Agreement, the Company entered into a Joinder Agreement on December 22, 2015 under which the Companyborrowed an additional $100 million ("Term Loan A"). Term Loan A was subject to, at the Company’s option, either an interest rate equal to (i)3.25% over LIBOR or (ii) an interest rate equal to 2.25% over the greater of (x) the prime lending rate published by the Wall Street Journal, (y) thefederal funds effective rate plus 0.50%, and (z) the LIBOR rate for a one month interest period plus 1%. The Company paid a 1.00% upfront fee inconnection with the Term Loan A. Such Term Loan A is payable in quarterly installments equal to 1.25% per quarter for 2016, 1.875% per quarterfor 2017 and 2018, and 2.50% per quarter thereafter, with the remaining outstanding principle amount due at final maturity on March 12, 2020. Itmay be voluntarily prepaid at the Company’s option and91is subject to mandatory prepayments equal to (i) 50% of excess cash flow, as defined in the agreement, (stepping down to 25% and 0% based ona decrease in total leverage ratio over time) at the end of each fiscal year, (ii) the net cash proceeds from certain asset sales (subject to certainreinvestment rights) and (iii) the proceeds from any debt issuances not otherwise permitted under the Credit Agreement. The Company incurredfinancing costs of $2.8 million to the lenders of Term Loan A which have been capitalized and recognized as a deduction of the Term Loan Abalance in "Credit facility and long term debt" on the Consolidated Balance Sheet. As described below, Term Loan A was extinguished as aseparate borrowing on August 18, 2017.On January 6, 2016, subsequent to fiscal 2015, the Company entered into an Incremental Revolving Joinder Agreement to its existing CreditAgreement to increase the amount of revolving commitments under the Credit Facility by an additional $90 million. The total aggregate amount ofrevolving commitments under the Credit Facility starting January 6, 2016 is $540 million.On April 27, 2016, the Company amended and restated the Credit Agreement such that borrowings bear interest, at the Company's option, at anadjusted base rate plus a spread of 1.25%, or an adjusted LIBOR rate plus a spread of 2.25%. The borrowings under the Credit Facility areguaranteed by certain present and future wholly-owned material domestic subsidiaries of the Company (the "Guarantors") and are secured by asecurity interest in substantially all assets of the Company and the Guarantors. The financial covenants include the following conditions: 1)maximum total leverage ratio of 4.50x through October 2016, 4.25x until January 1, 2017, 4.00x until April 2, 2017 and 3.75x thereafter, and 2)minimum fixed charge coverage ratio of 1.00x. The Company incurred financing costs of $2.6 million related to the Credit Facility which has beencapitalized and recognized in other long-term assets on the Consolidated Balance Sheet. These costs will be amortized over the life of the CreditFacility and recorded in "Interest Expense" in the Consolidated Statement of Operations.On July 5, 2016, the Company entered into a Joinder and Amendment Agreement with the initial incremental term loan lenders party thereto andMorgan Stanley Senior Funding, Inc., as administrative agent and collateral agent. The Joinder Agreement supplements the Company’s existingCredit Agreement. The Joinder and Amendment Agreement provides for the incurrence by the Company of an incremental term loan in anaggregate principal amount of $450.0 million ("Term Loan B"). The incurrence of Term Loan B is permitted as an incremental loan under the CreditAgreement and is subject to the terms of the Credit Agreement and to additional terms set forth in the Joinder and Amendment Agreement. TermLoan B will initially bear interest at (i) an adjusted LIBOR rate loan plus an applicable margin of 5.50% or (ii) an adjusted base rate loan plus anapplicable margin of 4.50%. Following the delivery of a compliance certificate and the financial statements for the period ending the last day of thethird Fiscal Quarter of 2016, Term Loan B shall bear interest, at the Company’s option, at (i) an adjusted LIBOR rate plus an applicable margin ofeither 5.25% or 5.50%, or (ii) an adjusted base plus an applicable margin of either 4.25% or 4.50%, with the applicable margin in each casedetermined based on the Company’s total net leverage ratio for the trailing twelve month period ended as of the last day of the Company’s mostrecently ended fiscal quarter. The Company paid an upfront fee to the initial incremental lenders in an amount equal to 1.5% of the aggregateprincipal amount of the incremental term loan funded. The Company is required to pay a prepayment premium of 1.00% of the principal amountprepaid if it prepays the incremental term loan in certain circumstances prior to the date that is twelve months after the closing date. Term Loan Bwas fully funded on the closing date and matures on July 5, 2021.The Company incurred financing costs of $11.5 million to the lenders of TermLoan B which has been capitalized and recognized as a deduction of the Term Loan B balance in "Long-term revolving credit facility and long termdebt" on the Consolidated Balance Sheets. These costs will be amortized over the life of Term Loan B and recorded in "Interest Expense" in theConsolidated Statements of Operations.On February 17, 2017, the Company amended its Credit Agreement. The amendment reduced the applicable margins on Term Loan B and TermLoan A from 5.50% and 5.11%, respectively, to 3.75% effective February 17, 2017. Additionally, the amended financial covenants include thefollowing conditions: 1) maximum total leverage ratio of 4.25 to 1.00 through December 31, 2017 and 2) maximum total leverage ratio of 4.00 to1.00 through July 1, 2018 and 3.75 to 1.00 thereafter. The Company incurred financing costs of $5.9 million to lenders of the term loans whichwere capitalized and recognized as a reduction of the Term Loan A and Term Loan B balances in "Credit facility and long term debt" on theConsolidated Balance Sheets. These costs will be amortized over the life of the term loans and are recorded in "Expense" in the ConsolidatedStatements of Operations.On April 7, 2017, the Company amended its Credit Agreement. The amendment reduced the applicable margins on the Company's Term Loan Afrom 3.75% to 2.75% effective April 7, 2017. The Company incurred financing costs of $0.4 million to lenders of Term Loan A which wererecognized as a reduction of the Term Loan A balance in "Long-term credit facility and long term debt" in the Consolidated Balance Sheets.92On August 18, 2017, the Company amended its Credit Agreement. As a result of the amendment, Term Loan A borrowing of $91.3 million wasextinguished as a separate borrowing. Term Loan B was increased by $91.3 million to replace Term Loan A (the "Additional Incremental TermLoan"). Previously unamortized debt issuance costs of $3.0 million related to Term Loan A were written off and recorded as "Interest expense" inthe Consolidated Statements of Operations in fiscal 2017. The additional incremental term loan is subject to the terms of the Credit Agreement andthe additional terms set forth in the amendment. The amendment also reduced the applicable margins on Term Loan B from 3.75% to 2.75%effective August 18, 2017. The Company incurred financing costs of $0.6 million to the lenders of the term loans which have been capitalized andrecognized as a reduction of the Term Loan B balances in "Credit facility and long term debt" on the Consolidated Balance Sheets. These costswill be amortized over the life of the term loans and are recorded in "Interest Expense" on the Consolidated Statements of Operations.On March 12, 2018, the Company amended its Credit Agreement. The amendment reduces the applicable margins on the Revolving Credit Facilityand Term Loan B. After giving effect to the amendment, the Term Loan B bore interest, at the option of the Company, at the base rate plus anapplicable margin of 1.25% or the Eurodollar rate plus an applicable margin of 2.25%; and the Revolving Credit Facility bears interest, at the optionof the Company, at the base rate plus an applicable margin of either 0.75% or 1.00%, depending on the Company's secured leverage ratio, or theEurodollar rate plus an applicable margin of 1.75% or 2.00%, depending on the Company's secured leverage ratio. The amendment removed thefixed charge coverage ratio financial covenants. In addition, for Term Loan B, the amendment removed the total leverage ratio covenant, changedthe required amortization payments to 1% per annum, and waived the excess cash flow mandatory repayment for fiscal 2017.On September 13, 2018, the Company again amended its Credit Agreement. The amendment reduces the applicable margin for Term Loan B.After giving effect to the amendment, Term Loan B will bear interest, at the option of the Company, at the base rate plus an applicable margin of1.00% or the Eurodollar rate plus an applicable margin of 2.00%. As part of the transaction, the Company repaid $25.0 million of outstanding TermLoan B principal.Interest expenses related to the contractual interest expenses, the amortization of debt issuance costs and the amortization of debt discountswere $34.3 million, $45.2 million and $35.9 million during the fiscal years ended December 30, 2018, December 31, 2017 and January 1, 2017. As of December 30, 2018, $476.3 million aggregate principal amount of loan, which is related to Term Loan B, is outstanding under the CreditFacility.As of December 30, 2018, the Company was in compliance with all of the financial covenants under the Credit Facility.2% 2020 Spansion Exchangeable NotesPursuant to its merger with Spansion, Cypress assumed Spansion's outstanding 2% 2020 Spansion Exchangeable Notes ("Spansion Notes" or the"2.0% 2020 Exchangeable Notes") on March 12, 2015. The Spansion Notes are governed by a Supplemental Indenture, dated March 12, 2015,between the Company, Spansion and Wells Fargo Bank, National Association, as Trustee. They are fully and unconditionally guaranteed on asenior unsecured basis by the Company. The Spansion Notes will mature on September 1, 2020, unless earlier repurchased or converted, andbear interest of 2% per year payable semi-annually in arrears on March 1 and September 1, commencing on March 1, 2014. The Spansion Notesmay be due and payable immediately in certain events of default.As of December 30, 2018, the Spansion Notes are exchangeable for 203.87 shares of common stock per $1,000 principal amount of the SpansionNotes (equivalent to an exchange price of $4.91) subject to adjustments for dividends, anti-dilutive issuances and make-whole adjustments upon afundamental change. A fundamental change includes a change in control, delisting of the Company’s stock and liquidation, consolidation or mergerof the Company. According to the Indenture, a change in control occurs when a person or group becomes the beneficial owner directly or indirectly,of more than 50% of the Company’s common stock. In the case of a consolidation or merger, if the surviving entity continues to be listed, nochange of control will be triggered. Prior to June 1, 2020, the Spansion Notes will be exchangeable under certain specified circumstances asdescribed in the Indenture.93Upon conversion, the Company may pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and sharesof its common stock, at its election. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the casemay be, of a combination of cash and shares of our common stock, the amount of cash and shares of common stock, if any, due upon conversionwill be based on a pre-defined conversion value.It is the Company’s intent that upon conversion, the Company would pay the holders of the Spansion Notes cash for an amount up to theaggregate principal amount of the Spansion Notes. If the conversion value exceeds the principal amount, the Company intends to deliver shares ofits common stock in respect to the remainder of its conversion obligation in excess of the aggregate principal amount ("conversion spread").Accordingly, for the purposes of calculating of diluted earnings per share, there would be no adjustment to the numerator in the net income percommon share computation for the portion of the Notes intended to be settled in cash. The conversion spread will be included in the denominatorfor the computation of diluted net income per common share, using the treasury stock method.On November 1, 2017, the Company entered into a privately negotiated agreement to induce the extinguishment of a portion of the SpansionNotes. The Company paid the holders of the Spansion Notes cash for the aggregate principal of $128 million and delivered 17.3 million shares ofcommon stock for the conversion spread. The Company recorded $4.3 million in loss on extinguishment, which included $1.2 million paid in cashas an inducement premium and a reduction in additional paid-in capital of $290.6 million towards the deemed repurchase of the equity componentof the notes. The loss on extinguishment is recorded in "Other income (expense), net" in the Consolidated Statement of Operations. See Note 14of the Notes to Consolidated Financial Statements for further details.On March 7, 2018, the Company entered into a privately negotiated agreement to induce the extinguishment of $10 million of the remaining $22million of Spansion Notes outstanding. The Company paid the holders of the Spansion Notes cash for the aggregate principal of $10 million anddelivered 1.4 million shares of common stock for the conversion spread. The Company recorded $0.2 million in loss on extinguishment and areduction in additional paid-in capital of $25.7 million towards the deemed repurchase of the equity component of the notes. The loss onextinguishment is recorded in "Interest Expense" in the Consolidated Statements of Operations.The following table presents the interest expense recognized on the Spansion Notes during the fiscal years ended December 30, 2018, December31, 2017 and January 1, 2017 (in thousands): Year Ended December 30, 2018December 31, 2017January 1, 2017Contractual interest expense at 2% per annum$242$2,880$2,989Accretion of debt discount3293,1493,556Total$571$6,029$6,545The 2% 2020 Exchangeable Notes consisted of the following as of December 30, 2018 and December 31, 2017 (in thousands): December 30, 2018 December 31, 2017Equity component (1) $22,971 $42,130Liability component: Principal $11,990 $21,990 Less debt discount, net (2) (552) (1,615) Net carrying amount $11,438 $20,375(1) Included on the consolidated balance sheets within additional paid-in-capital(2) Included on the consolidated balance sheets within Credit facility and long-term debt and is amortized over the remaining life of the 2% 2020 Exchangeable Notes.4.5% 2022 Senior Exchangeable Notes 94On June 23, 2016, the Company issued $287.5 million of Senior Exchangeable Notes due in 2022 (the "4.5% 2022 Senior Exchangeable Notes")at face value in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. The 4.5% 2022Senior Exchangeable Notes are governed by an Indenture ("2016 Indenture"), dated June 23, 2016, between the Company and U.S. Bank NationalAssociation, as Trustee. The 4.5% 2022 Senior Exchangeable Notes will mature on January 15, 2022, unless earlier repurchased or converted,and bear interest of 4.50% per year payable semi-annually in arrears on January 15 and July 15, commencing on January 15, 2017. The 4.5%2022 Senior Exchangeable Notes may be due and payable immediately in certain events of default. The 4.5% 2022 Senior Exchangeable Notes are exchangeable for an initial exchange rate of 74.14 shares of common stock per $1,000 principalamount of the 4.5% 2022 Senior Exchangeable Notes (equivalent to an initial exchange price of approximately $13.49 per share) subject toadjustments for anti-dilutive issuances and make-whole adjustments upon a fundamental change. A fundamental change includes a change incontrol, delisting of the Company’s stock and liquidation, consolidation or merger of the Company. Prior to October 15, 2021, the Notes will beexchangeable under certain specified circumstances as described in the 2016 Indenture. On or after October 15, 2021, until the close of businesson the second scheduled trading day immediately preceding the maturity date, the 4.5% 2022 Senior Exchangeable Notes will be convertible inmultiples of $1,000 principal amount regardless of the foregoing circumstances. Upon conversion, the Company may pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and sharesof its common stock, at its election. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the casemay be, of a combination of cash and shares of its common stock, the amount of cash and shares of common stock, if any, due upon conversionwill be based on a pre-defined conversion value. It is the Company’s intent that upon conversion, the Company would pay the holders of the 4.5% 2022 Senior Exchangeable Notes cash for anamount up to the aggregate principal amount of the 4.5% 2022 Senior Exchangeable Notes. If the conversion value exceeds the principal amount,the Company intends to deliver shares of its common stock in respect to the remainder of its conversion obligation in excess of the aggregateprincipal amount ("conversion spread"). Accordingly, for the purposes of calculating diluted earnings per share, there would be no adjustment to thenumerator in the net income per common share computation for the portion of the 4.5% 2022 Senior Exchangeable Notes intended to be settled incash. The conversion spread will be included in the denominator for the computation of diluted net income per common share, using the treasurystock method.At the debt issuance date, the 4.5% 2022 Senior Exchangeable Notes, net of issuance costs, consisted of the following (in thousands): June 23, 2016Liability component Principal$238,338Less: Issuance cost(7,158)Net carrying amount$231,180Equity component Allocated amount$49,163Less: Issuance cost(1,477)Net carrying amount$47,686Exchangeable Notes, net of issuance costs$278,866 The following table includes total interest expense related to the 4.5% 2022 Senior Exchangeable Notes recognized during the fiscal years endedDecember 30, 2018, December 31, 2017 and January 1, 2017 (in thousands):95 Year ended December 30, 2018 December 31, 2017 January 1, 2017Contractual interest expense $12,902 $13,009 $6,900Amortization of debt issuance costs 1,278 1,289 700Accretion of debt discount 8,811 8,885 4,646Total $22,991 $23,183 $12,246The 4.5% 2022 Senior Exchangeable Notes consisted of the following as of December 30, 2018 and December 31, 2017 (in thousands): December 30, 2018 December 31, 2017Equity component (1) $47,686 $47,686Liability component: Principal $287,500 $287,500 Less debt discount and debt issuance costs, net (2) (30,774) (40,864) Net carrying amount $256,726 $246,636(1) Included in the consolidated balance sheets within additional paid-in-capital(2) Included in the consolidated balance sheets within Credit facility and long-term debt and is amortized over the remaining life of the 4.5% 2022 Exchangeable Notes.Capped Calls, 4.5% 2022 Senior Exchangeable Notes In connection with the issuance of the 4.5% 2022 Senior Exchangeable Notes, the Company entered into capped call transactions with certainbank counterparties to reduce the risk of potential dilution of the Company’s common stock upon the exchange of the 4.5% 2022 SeniorExchangeable Notes. The capped call transactions have an initial strike price of approximately $13.49 and an initial cap price of approximately$15.27, in each case, subject to adjustment. The capped calls are intended to reduce the potential dilution and/or offset any cash payments theCompany is required to make upon conversion of the 4.5% 2022 Senior Exchangeable Notes if the market price of the Company's common stockis above the strike price of the capped calls. If, however, the market price of the Company’s common stock is greater than the cap price of thecapped calls, there would be dilution and/or no offset of such potential cash payments, as applicable, to the extent the market price of thecommon stock exceeds the cap price. The capped calls expire in January 2022.2.0% 2023 Exchangeable NotesOn November 6, 2017, the Company, issued at face value, $150.0 million of Senior Exchangeable Notes due in 2023 (the "2% 2023 ExchangeableNotes") in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended. The 2% 2023Exchangeable Notes are governed by an Indenture ("2017 Indenture"), dated November 6, 2017, between the Company and U.S. Bank NationalAssociation, as Trustee. The 2% 2023 Exchangeable Notes will mature on February 1, 2023 unless earlier repurchased or converted, and bearinterest of 2% per year payable semi-annually in arrears on February 1 and August 1, commencing on February 1, 2018. The 2% 2023Exchangeable Notes may be due and payable immediately in certain events of default. The 2% 2023 Exchangeable Notes are exchangeable at an initial exchange rate of 46.7099 shares of common stock per $1,000 principal amountof the 2% 2023 Exchangeable Notes (equivalent to an initial exchange price of approximately $21.41 per share) subject to adjustments for anti-dilutive issuances and make-whole adjustments upon a fundamental change. A fundamental change includes a change in control, delisting of theCompany’s stock and liquidation, consolidation or merger of the Company. Prior to November 1, 2022, the 2% 2023 Exchangeable Notes will beexchangeable under certain specified circumstances as described in the 2017 Indenture. On or after November 1, 2022, until the close ofbusiness on the second scheduled trading day immediately preceding the maturity date, the 2% 2023 Exchangeable Notes will be convertible inmultiples of $1,000 principal amount regardless of the foregoing circumstances. Upon conversion, the Company may pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and sharesof its common stock, at its election. If the Company satisfies its conversion96obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of its common stock, theamount of cash and shares of common stock, if any, due upon conversion will be based on a pre-defined conversion value. It is the Company’s intent that upon conversion, the Company would pay the holders of the 2% 2023 Exchangeable Notes cash for an amount upto the aggregate principal amount of the Notes. If the conversion value exceeds the principal amount, the Company intends to deliver shares of itscommon stock in respect to the remainder of its conversion obligation in excess of the aggregate principal amount ("conversion spread").Accordingly, for the purposes of calculating diluted earnings per share, there would be no adjustment to the numerator in the net income percommon share computation for the portion of the Notes that are intended to be cash settled. The conversion spread will be included in thedenominator for the computation of diluted net income per common share, using the treasury stock method. In accordance with ASC 470-20, Debt with Conversion and Other Options, the Company separated the 2% 2023 Exchangeable Notes into liabilityand equity components. The carrying amount of the liability component was calculated by measuring the estimated fair value of a similar liabilitythat does not have an associated convertible feature. Such amount was based on the contractual cash flows discounted at an appropriate marketrate for non-convertible debt at the date of issuance, which was determined to be 89.7% of the par value of the 2% 2023 Exchangeable Notes or$134.6 million. The carrying amount of the equity component of $15.5 million representing the conversion option was determined by deducting thefair value of the liability component from the face value of the Exchangeable Notes as a whole. The excess of the principal amount of the liabilitycomponent over its carrying amount ("debt discount") is accreted to interest expense over the term of the 2% 2023 Exchangeable Notes using theeffective interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company incurred transaction costs of approximately $4.1 million relating to the issuance of the 2% 2023 Exchangeable Notes. Thetransaction costs of $4.1 million include $3.4 million of financing fees paid to the initial purchasers of the 2% 2023 Exchangeable Notes, and otherestimated offering expenses payable by the Company. In accounting for these costs, the Company allocated the costs of the offering in proportionto the fair value of the debt and equity recognized in accordance with the accounting standards. The transaction costs allocated to the debtcomponent of approximately $3.7 million are being amortized as interest expense over the term of the 2% 2023 Exchangeable Notes using theeffective yield method. The transaction costs allocated to the equity component of approximately $0.4 million were recorded as a reduction ofadditional paid-in capital. At the debt issuance date, the 2% 2023 Exchangeable Notes, net of issuance costs, consisted of the following (in thousands): November 6, 2017Liability component Principal $134,550Less: Issuance cost (3,678)Net carrying amount $130,872Equity component Allocated amount $15,450Less: Issuance cost (422)Net carrying amount $15,028Exchangeable Notes, net of issuance costs $145,90097The following table includes total interest expense related to the 2% 2023 Exchangeable Notes recognized during the fiscal years endedDecember 30, 2018 and December 31, 2017 (in thousands): Year ended December 30, 2018 Year ended December 31, 2017Contractual interest expense $2,992 $452Amortization of debt issuance costs 700 106Accretion of debt discount 2,940 444Total $6,632 $1,002The 2% 2023 Exchangeable Notes consisted of the following as of December 30, 2018 and December 31, 2017 (in thousands): December 30, 2018 December 31, 2017Equity component (1) $15,028 $15,028Liability component: Principal $150,000 $150,000 Less debt discount and debt issuance costs, net (2) (14,943) (18,578) Net carrying amount $135,057 $131,422(1) Included in the consolidated balance sheets within additional paid-in-capital(2) Included in the consolidated balance sheets within Credit facility and long-term debt and is amortized over the remaining life of the 2% 2023 Exchangeable Notes.Capital Leases and Equipment LoansThe Company has had capital lease arrangements related to certain equipment at its Austin manufacturing facility which expire in 2024. In June2018, the Company entered into a capital lease agreement for manufacturing equipment. The lease has a term of 5 years through June 2023. As ofDecember 30, 2018, the Company recorded a capital lease obligation of approximately $10.0 million.Future Debt PaymentsThe future scheduled principal payments for the outstanding Company's debt as of December 30, 2018 were as follows (in thousands):Fiscal Year Total2019 $6,7382020 18,7472021 467,8992022 289,2752023 151,738Thereafter 1,441Total $935,83898NOTE 16. EQUITY TRANSACTIONS$450 million Stock Buyback Program:On October 20, 2015, the Company’s Board authorized a $450 million stock buyback program. The program allows the Company to purchase itscommon stock or enter into equity derivative transactions related to its common stock. The timing and actual amount expended with the newauthorized funds will depend on a variety of factors including the market price of the Company’s common stock, regulatory, legal, and contractualrequirements, alternative uses of cash, availability of on shore cash and other market factors. The program does not obligate the Company torepurchase any particular amount of common stock and may be modified or suspended at any time at the Company’s discretion. Under theprogram through the end of fiscal 2018, the Company used $274.1 million to repurchase 31.8 million shares at an average price of $8.62. Yield Enhancement Program:In fiscal 2009, the Audit Committee approved a yield enhancement strategy intended to improve the yield on the Company’s available cash. Aspart of this program, the Audit Committee authorized the Company to enter into short-term yield enhanced structured agreements, typically withmaturities of 90 days or less, correlated to the Company’s stock price. Under the agreements that the Company has entered into to date, it pays afixed sum of cash upon execution of an agreement in exchange for the financial institution’s obligations to pay either a pre-determined amount ofcash or shares of the Company’s common stock depending on the closing market price of the Company’s common stock on the expiration date ofthe agreement. Upon expiration of each agreement, if the closing market price of the Company’s common stock is above the pre-determined price,the Company will have its cash investment returned plus a yield substantially above the yield currently available for short-term cash investments.If the closing market price is at or below the pre-determined price, the Company will receive the number of shares specified at the agreement’sinception. As the outcome of these arrangements is based entirely on the Company’s stock price and does not require the Company to delivereither shares or cash, other than the original investment, the entire transaction is recorded in equity.The Company had no activity related to yield enhanced structured agreements during fiscal 2017. The following table summarizes the activity ofthe Company’s settled yield enhanced structured agreements during fiscal 2018: AggregatePrice Paid Total Number of SharesReceived UponMaturity Average Price Paid perShareFiscal 2018:(in thousands, except per share amounts)Settled through issuance of common stock$3,262 250 $13Total for fiscal 2018$3,262 250 $13 .DividendsDuring fiscal 2018, the Company paid total cash dividends of $157.4 million consisting of dividends of $0.11 per share of common stock paid in allfour quarters of the fiscal year. On November 5, 2018, the Company’s Board declared a cash dividend of $0.11 per share payable to holders ofrecord of the Company’s common stock at the close of business day on December 27, 2018. This cash dividend was paid on January 17, 2019and totaled $39.7 million.During fiscal 2017, the Company paid total cash dividends of $144.7 million, consisting of dividends of $0.11 per share of common stock paid ineach of the quarters of the fiscal year.During fiscal 2016, the Company paid total cash dividends of $141.4 million, consisting of dividends of $0.11 per share of common stock paid ineach of the quarters of the fiscal year.NOTE 17. RELATED PARTY TRANSACTIONS99In the ordinary course of business, the Company purchases from, or sells to (a) entities for which one of the Company's directors or executiveofficers serves as a director or (b) entities that are otherwise affiliated with one of the Company's directors or executive officers (collectively,"related parties").For the indicated periods, the following table presents information on the Company's transactions with such entities occurring at a time when theentity was a related party of the Company. Year ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands)Total revenues$224 $4,713 $2,965Total purchases$12,995 $54,236 $7,936As of December 30, 2018 and December 31, 2017, amounts due from these parties totaled $0.1 million and $4.8 million, respectively, andamounts due to these parties totaled $1.9 million and $9.9 million, respectively. NOTE 18. NET INCOME (LOSS) PER SHAREBasic net income (loss) per share is computed using the weighted-average common shares outstanding during the period. Diluted net income pershare is computed using the weighted-average common shares outstanding and any dilutive potential common shares. Diluted net loss percommon share is computed using the weighted-average common shares outstanding. This computation excludes all dilutive potential commonshares when the Company is in a net loss position as their inclusion would be anti-dilutive. The Company’s dilutive securities primarily includestock options, restricted stock units, ESPP purchase rights, and the exchangeable notes.The following table sets forth the computation of basic and diluted net income (loss) per share: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands, except per-share amounts)Net Income (Loss) per Share—Basic: Net (loss) attributable to Cypress for basic and diluted computation$354,592 $(80,915) $(683,234)Weighted-average common shares for basic computation359,324 333,451 319,522Net (loss) per share—basic$0.99 $(0.24) $(2.14)Net (Loss) per Share—Diluted: Net income (loss) attributable to Cypress for diluted computation$354,592 $(80,915) $(683,234)Weighted-average common shares for basic computation359,324 333,451 319,522Effect of dilutive securities: Stock options, restricted stock units, ESPP purchase rights, exchangeablenotes, and other12,854 — —Weighted-average common shares for diluted computation372,178 333,451 319,522Net income (loss) per share—diluted$0.95 $(0.24) $(2.14) Anti-Dilutive Securities:The following securities calculated on a weighted average basis were excluded from the computation of diluted net income (loss) per share as theirimpact was anti-dilutive: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands) Stock options and restricted stock units693 8,375 6,226Exchangeable Notes2,464 17,732 13,844NOTE 19. EMPLOYEE BENEFIT PLANSPension PlansThe Company sponsors defined benefit pension plans covering employees in India, Japan, Philippines, South Korea, Taiwan and Thailand. TheCompany does not have defined-benefit pension plans for its United States-based employees. Pension plan benefits are based primarily onparticipants’ compensation and years of service credited as specified under the terms of each country’s plan. The funding policy is consistent withthe local requirements of each country.As of December 30, 2018 and December 31, 2017, projected benefit obligations, net of plan assets totaled $13.4 million and $15.5 million,respectively, and the fair value of plan assets was $3.1 million and $2.7 million, respectively.Cypress Incentive PlanThe Company has an employee incentive plan, which provides for cash incentive payments to certain employees including all named executiveofficers. Payments under the plan are determined based upon certain performance measures, including the Company’s revenue and pre-bonus pre-tax profit margin as well as the achievement of strategic, operational and financial goals established for each employee. The Company recordedtotal charges of approximately $59.8 million under the plan in fiscal 2018.Deferred Compensation PlansThe Company has deferred compensation plans, which provides certain key employees, including its executive management, with the ability todefer the receipt of compensation in order to accumulate funds for retirement on a tax-deferred basis. The Company does not make contributionsto the deferred compensation plans or guarantee returns on the investments. Participant deferrals and investment gains and losses remain theCompany’s assets and are subject to claims of general creditors.Under the deferred compensation plans the assets are recorded at fair value in each reporting period with the offset being recorded in “Otherincome (expense), net.” The liabilities are recorded at fair value in each reporting period with the offset being recorded as an operating expense orincome. As of December 30, 2018 and December 31, 2017, the fair value of the assets was $44.4 million and $49.5 million, respectively, and thefair value of the liabilities was $44.8 million and $50.6 million, respectively.100All non-cash expense and income recorded under the deferred compensation plans were included in the following line items in the ConsolidatedStatements of Operations: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (in thousands)Changes in fair value of assets recorded in: Other income (expense), net$(2,904) $6,087 $2,326Changes in fair value of liabilities recorded in: Cost of revenues168 (602) (288)Research and development expenses971 (2,826) (884)Selling, general and administrative expenses1,036 (3,936) (1,889)Total expense, net$(729) $(1,277) $(735) 401(k) PlanThe Company sponsors a 401(k) plan which provides participating employees with an opportunity to accumulate funds for retirement on a taxdeferred basis. As of December 30, 2018, the Company matches contribution equal to 50% of the first $2,000 that each employee contributes tothe Plan for both pre-tax and Roth deferrals. Effective December 31, 2018, the Company has increased the employer's matching contribution to50% of the first $4,000 that each employee contributes to the Plan for both pre-tax and Roth deferrals.NOTE 20. INCOME TAXESThe geographic distribution of income (loss) before income taxes and the components of income tax benefit (provision) are summarized below: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) United States loss$(98,546) $(108,146) $(786,610)Foreign income137,520 38,388 105,992Income (loss) before income taxes38,974 (69,758) (680,618)Income tax benefit (provision): Current tax benefit (expense): Federal(3,859) (1,358) (1,144)State(372) (125) 204Foreign(20,498) (15,081) (926)Total current tax benefit (expense)(24,729) (16,564) (1,866)Deferred tax benefit (expense): Federal334,453 4,341 (556)State5,236 (67) (31)Foreign658 1,133 (163)Total deferred tax benefit (expense)340,347 5,407 (750)Income tax benefit (provision)$315,618 $(11,157) $(2,616) 101Income tax benefit (provision) differs from the amounts obtained by applying the statutory United States federal income tax rate to income (loss)before taxes as shown below: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands) Benefit (provision) at U.S. statutory rate (21% for 2018, 35% for 2017 and 2016)$(8,185) $24,415 $238,216Valuation allowance release (excluding rate items below)363,057 — —Foreign income at other than U.S. rates(14,279) (67,685) (36,552)Future benefits not recognized¹(4,475) 23,978 (37,033)Goodwill and asset impairment(26,478) — (181,987)Reversal of previously accrued taxes— 1,447 13,371Foreign withholding taxes(2,168) (3,718) (2,018)State income taxes, net of federal benefit(372) (192) (87)Tax credit¹10,129 11,421 7,826Other, net(1,611) (823) (4,352)Income tax benefit (provision)$315,618 $(11,157) $(2,616)1.Certain balances included on the Income tax benefit (provision) for prior periods have been reclassified to conform to the current periodpresentation.The components of deferred tax assets and liabilities were as follows: As of December 30, 2018 December 31, 2017 (In thousands)Deferred tax assets: Credits and net operating loss carryovers$429,800 $460,329Reserves and accruals82,990 92,655Excess of book over tax depreciation5,614 11,744Deferred income34,347 39,367Total deferred tax assets552,751 604,095Less valuation allowance(158,535) (513,191)Deferred tax assets, net394,216 90,904Deferred tax liabilities: Foreign earnings and others(7,396) (68,013)Intangible assets arising from acquisitions(47,141) (24,477)Total deferred tax liabilities(54,537) (92,490)Net deferred tax assets$339,679 $(1,586) The Company has the following tax loss and credit carryforwards available to offset future income tax liabilities: 102Carryforward Amount Expiration Date ($ in millions) Federal net operating loss carryforward $968 2025-2037Federal research credit carryforward $117 2019-2038International foreign tax credit carryforward $12 2019-2023State research credit carryforward $104 IndefiniteState net operating loss carryforward $304 2019-2037State research credit carryforward $3 2019-2038 The federal and state net operating loss carryforward is subject to limitations under Internal Revenue Code Section 382.The Company recorded an income tax benefit of $315.6 million in 2018, an income tax expense of $11.2 million in 2017, and an income taxexpense of $2.6 million in 2016. The tax benefit for 2018 was more favorable than the tax provision to be expected based on the federal statutoryrate primarily due to the release of valuation allowance against certain U.S. deferred tax assets. The income tax expenses for fiscal 2017 and2016 were primarily attributable to income taxes associated with our non-U.S. operations, primarily offset by release of previously accrued taxesrelated to the lapsing of statutes of limitation.A valuation allowance is established or maintained when, based on currently available information and other factors, it is more likely than not thatall or a portion of the deferred tax assets will not be realized. The Company regularly assesses our valuation allowance against deferred tax assetson a jurisdiction by jurisdiction basis. The Company considers all available positive and negative evidence, including future reversals of temporarydifferences, projected future taxable income, tax planning strategies and recent financial results. During the fourth quarter of 2018, the Companyemerged from a cumulative loss position over the previous three years. The cumulative three-year pre-tax income is considered positive evidencewhich is objective and verifiable and thus received significant weighting. The continued pattern of income before tax, recent global restructuringexecuted in fiscal 2018 and projected future operating income in the U.S. was additional positive evidence. As a result, the Company released$343.3 million of the valuation allowance attributable to certain U.S. deferred tax assets during 2018. Please refer to Schedule II for theadjustments to valuation allowance balances.As of December 30, 2018, for certain federal and state attributes, a valuation allowance of $158.5 million has been recorded for the portion that isnot more likely than not to be realized. As of December 31, 2017, of the total deferred tax assets of $604.1 million, a valuation allowance of $513.2million had been recorded for the portion which was not more likely than not to be realized, based upon the Company’s evaluation at the time. TheCompany will continue to evaluate all evidence in future periods to determine if a further release of the valuation allowance is warrantedThe Company’s global operations involve manufacturing, research and development, and selling activities. The Company’s operations outside theU.S. are in certain countries that impose a statutory tax rate lower than the U.S. The Company's foreign operation is subject to tax holidays inMalaysia and Thailand where it manufactures and designs certain products. These tax holidays are scheduled to expire at varying times within thenext five years. The Company’s tax benefit of these tax holidays for the year ended December 30, 2018 had an insignificant impact on earningsper share.103Unrecognized Tax BenefitsThe following table is a reconciliation of unrecognized tax benefits: (In thousands)Unrecognized tax benefits, as of January 3, 2016$114,843Decrease related to lapsing of statute of limitation(7,190)Increase based on tax positions related to current year5,639Increases in balances related to tax positions taken during prior periods33,032Unrecognized tax benefits, as of January 1, 2017$146,324Decrease related to lapsing of statute of limitation(1,108)Increase based on tax positions related to current year4,475Increases in balances related to tax positions taken during prior periods1,631Decrease in balances due to the Tax Reform corporate tax rate change from 35% to 21%(36,087)Unrecognized tax benefits, as of December 31, 2017$115,235Decrease related to partial settlements with taxing authorities$(358)Increase based on tax positions related to current year$4,270Increases in balances related to tax positions taken during prior periods$2,729Unrecognized tax benefits, as of December 30, 2018$121,876Gross unrecognized tax benefits increased by $6.6 million during fiscal year 2018, resulting in gross unrecognized tax benefits of $121.9 million asof December 30, 2018.During fiscal year 2018, the Company recognized $0.4 million of previously unrecognized tax benefits as a result of either the expiration of thestatute of limitations for certain audit periods or settlement with taxing authorities.The Company recognized interest and penalties related to unrecognized tax benefits within the provision for income taxes line in theaccompanying consolidated statements of operations. The Company recognized approximately $2.4 million of benefit related to interest andpenalties in fiscal year 2018. Accrued interest and penalties are included within other long-term liabilities in the consolidated balance sheets. As ofDecember 30, 2018 and December 31, 2017, the combined amount of cumulative accrued interest and penalties was approximately $13.0 millionand $11.0 million, respectively. As of December 30, 2018 and December 31, 2017, the amount of unrecognized tax benefits that, if recognized, would affect the Company’seffective tax rate totaled $65.8 million and $28.9 million, respectively.Management believes events that could occur in the next 12 months and cause a material change in unrecognized tax benefits include, but are notlimited to, the following:•completion of examinations by the U.S. or foreign taxing authorities; and•expiration of statutes of limitations on the Company’s tax returns.The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. The Companyregularly assesses its tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which it doesbusiness. The Company believes it is reasonably possible that it may recognize up to approximately $3.2 million of its existing unrecognized taxbenefits within the next twelve months as a result of the lapse of statutes of limitations and the resolution of agreements with domestic andvarious foreign tax authorities.Classification of Interest and PenaltiesThe Company's policy is to classify interest expense and penalties, if any, as components of income tax provision in the Consolidated Statementsof Operations. As of December 30, 2018 and December 31, 2017, the amount of accrued interest and penalties totaled $13.0 million and $11.0million, respectively. The Company recorded a104charge or (benefit) from interest and penalties of $2.4 million, $2.2 million and $(3.4) million during fiscal 2018, 2017 and 2016, respectively.Tax ExaminationsThe following table summarizes the Company’s major tax jurisdictions and the tax years that remain subject to examination by such jurisdictionsas of December 30, 2018: Tax Jurisdictions Tax YearsUnited States 2009 and onwardCalifornia 2010 and onwardPhilippines 2014 and onwardIsrael 2014 and onwardIndia 2004 and onwardThailand 2011 and onwardMalaysia 2003 and onwardSwitzerland 2008 and onwardJapan 2011 and onward Income tax examinations of the Company’s Malaysian subsidiary for the fiscal years 2003 to 2013 and our Philippine subsidiary for fiscal year2014 are in progress. The Company does not believe the ultimate outcome of these examinations will result in a material increase to its taxliability.On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Act”) was signed into law making significant changes to the Internal RevenueCode effective for tax years beginning after December 31, 2017. Changes include, but are not limited to, a corporate tax rate decrease from 35%to 21%, the repeal of corporate alternative minimum tax, the transition of U.S. international taxation from a worldwide tax system to a territorialsystem, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017.On December 22, 2017, Staff Accounting Bulletin No. 118 ("SAB 118") was issued to address the application of U.S. GAAP in situations when aregistrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete theaccounting for certain income tax effects of the Act. In accordance with SAB 118, the Company recorded a provisional tax benefit of $8.6 millionin the fourth quarter of 2017, the period in which the legislation was enacted. In the fourth quarter of 2018, the Company completed its accountingfor the effects of the Act within the measurement period under SAB 118. There were no material adjustments to the provisional tax benefitrecorded in the fourth quarter of 2017.The Company has not provided the U.S. income taxes and foreign withholding taxes on a cumulative total of $9.9 million of undistributed earningsfor non-U.S. subsidiaries as of December 30, 2018, because such earnings are intended to be indefinitely reinvested. Income taxes and foreignwithholding taxes associated with these undistributed earnings are not significant.NOTE 21. COMMITMENTS AND CONTINGENCIESProduct WarrantiesThe Company warrants its products against defects in materials and workmanship for a period of one year and that product warranty is generallylimited to a refund of the original purchase price of the product or a replacement part. The Company estimates warranty costs based on historicalwarranty claim experience. Warranty returns are recorded as an allowance for sales returns. The allowance for sales returns is reviewed quarterlyto verify that it properly reflects the remaining obligations based on the anticipated returns over the balance of the obligation period.105The following table presents warranty reserve activities: Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Beginning balance$4,445 $3,996 $4,096Provisions & prior warranty estimates5,325 2,947 5,261Settlements made(5,788) (2,498) (5,361)Ending balance$3,982 $4,445 $3,996Operating Lease CommitmentsThe Company leases certain facilities and equipment under non-cancelable operating lease agreements that expire at various dates through fiscal2026. Some leases include renewal options, which would permit extensions of the expiration dates at rates approximating fair market rental values.As of December 30, 2018, future minimum lease payments under non-cancelable operating leases were as follows: Fiscal Year (In thousands)2019 $29,3152020 12,8602021 8,1762022 6,2412023 2,476Thereafter 3,808Total $62,876 Restructuring accrual balances related to operating facility leases were $14.3 million and $11.5 million as of December 30, 2018 and December 31,2017, respectively.Contractual ObligationsThe Company has entered into agreements with certain vendors that include "take or pay" terms. Take or pay terms obligate the Company topurchase a minimum required amount or services or make specified payments in lieu of such purchase. The Company may not be able toconsume minimum commitments under these take or pay terms, requiring payments to vendors, which may have a material adverse impact on theCompany's Consolidated Statements of Operations.Litigation and Asserted ClaimsThe Company is currently involved in various legal proceedings, claims, and disputes arising in the ordinary course of business, includingintellectual property claims and other matters.For many legal matters, particularly those in early stages, the Company cannot reasonably estimate the possible loss (or range of loss), if any.The Company records an accrual for legal matters at the time or times it determines that a loss is both probable and reasonably estimable.Amounts accrued as of December 30, 2018 were not material. Regarding matters for which no accrual has been made (including the potential forlosses in excess of amounts accrued), the Company currently believes, based on its own investigations, that any losses (or ranges of losses) thatare reasonably possible and estimable will not, in the aggregate, have a material adverse effect on its financial position, results of operations, orcash flows. However, the ultimate outcome of legal proceedings involves106judgments, estimates, and inherent uncertainties and cannot be predicted with certainty. Should the ultimate outcome of any legal matter beunfavorable, the Company's business, financial condition, results of operations, or cash flows could be materially and adversely affected. TheCompany may also incur substantial legal fees, which are expensed as incurred, in defending against legal claims.Indemnification ObligationsThe Company is a party to a variety of agreements pursuant to which it may be obligated to indemnify other parties to such agreements withrespect to certain matters. Typically, these obligations arise in the context of contracts that the Company has entered into, under which theCompany customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants or terms andconditions related to such matters as the sale and/or delivery of its products, title to assets sold, certain intellectual property claims, defectiveproducts, specified environmental matters and certain income taxes. With respect to the sale of a manufacturing facility or subsidiary business,such indemnification may also cover tax matters and the Company's management of the facility or business prior to the sale. In the foregoingcircumstances, payment by the Company is customarily conditioned on the other party making a claim pursuant to the procedures specified in theparticular contract, which procedures typically allow the Company to challenge the other party’s claims and vigorously defend itself and the otherparty against related third-party claims. Further, the Company's obligations under these agreements may be limited in terms of time, amount or thescope of its responsibility and in some instances, the Company may have recourse against third parties for certain payments made under theseagreements.It is not possible to predict the maximum potential amount of future payments under these agreements due to the conditional nature of theCompany's obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments the Company hasmade under these agreements have not had a material effect on the Company’s business, financial condition or results of operations. As ofDecember 30, 2018, management believes that if the Company were to incur a loss (in excess of amounts already recognized) in any of thesematters, such loss would not have a material effect on its business, financial condition, cash flows or results of operations, though there can be noassurance in this regard.NOTE 22. SEGMENT, GEOGRAPHICAL AND CUSTOMER INFORMATIONSegment InformationThe Company designs, develops, manufactures and markets a broad range of high-performance solutions for embedded systems, fromautomotive, industrial and networking platforms to interactive consumer devicesOperating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation bythe chief operating decision-maker, or decision-making group, in making decisions on how to allocate resources and assess performance. TheCompany’s chief operating decision maker ("CODM") is considered to be the Chief Executive Officer. The Company's segments are its Microcontroller and Connectivity Division (or MCD) and its Memory Products Division (or MPD).Income (Loss) from Operations before Income Taxes:107 Year Ended December 30, 2018 December 31, 2017 January 1, 2017 (In thousands)Microcontroller and Connectivity Division$149,347 $56,314 $(12,674)Memory Products Division375,123 279,129 192,066Unallocated items: Stock-based compensation expense(95,965) (91,581) (98,513)Restructuring (charges) benefit, including executive severance(16,842) (9,088) (30,631)Reimbursement payment in connection with the cooperation and settlement agreement— (3,500) —Amortization of intangibles and other acquisition-related costs(218,149) (204,448) (210,513)Impairment of assets and other— — (33,944)Impairment related to assets held for sale(76,590) — (37,219)Loss on extinguishment of debt(5,169) (7,246) —Imputed interest on convertible debt, equity component amortization onconvertible debt, and amortization of debt issuance cost(19,947) (20,538) (8,306)Gain on divestiture— 1,245 —Changes in value of deferred compensation plan(728) (1,277) (735)Gain related to investment in Deca Technologies Inc.— — 112,774Goodwill impairment charge— — (488,504)Gain on sale of cost method investment1,521 — —Impact of purchase accounting and other3,982 3,136 (47,418)Income (loss) from operations before income taxes$96,583 $2,146 $(663,617) The Company does not allocate stock-based compensation, changes in value of deferred compensation plan, share in net loss and impairment ofequity method investees, amortization of intangible assets, imputed interest on convertible debt, equity component amortization on convertibledebt and others, amortization of debt issuance cost, settlement agreements, restructuring charges, loss on extinguishment of Spansionconvertible notes, loss on assets held for sale, and gain on sale on cost method investment, impact of purchase accounting, interest income andother, and interest expense to its segments. The Company excludes these items consistent with the manner in which it internally evaluates itsresults of operations.Geographical InformationProperty, plant and equipment, net, by geographic locations were as follows: As of December 30, 2018 December 31, 2017 (In thousands)United States$173,973 $186,824Philippines33,413 36,747Thailand34,581 29,151Japan11,251 12,211Other29,768 24,621Total property, plant and equipment, net$282,986 $289,554 108The Company tracks its assets by physical location. Although management reviews asset information on a corporate level and allocatesdepreciation expense by segment, the Company's CODM does not review asset information on a segment basis.Customer InformationOutstanding accounts receivable from one of the Company's distributors, accounted for 25% and 28%, respectively, of the Company'sconsolidated accounts receivable as of December 30, 2018 and December 31, 2017.Revenue generated through two of the Company's distributors, accounted for 18% and 14%, respectively, of the Company's consolidated revenuesfor fiscal 2018.Revenue generated through two of the Company's distributors, accounted for 20% and 13%, respectively, of the Company's consolidated revenuesfor fiscal 2017.Revenue generated through one of the Company's distributors accounted for 23% of the Company's consolidated revenues for fiscal 2016.109Report of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of Cypress Semiconductor Corporation:Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of Cypress Semiconductor Corporation and its subsidiaries (the “Company”) as ofDecember 30, 2018 and December 31, 2017, and the related consolidated statements of operations, of comprehensive income (loss), ofstockholders’ equity and of cash flows for each of the three years in the period ended December 30, 2018, including the related notes and financialstatement schedule listed in the index appearing under Item 15(a)(2)(collectively referred to as the “consolidated financial statements”). We alsohave audited the Company's internal control over financial reporting as of December 30, 2018, based on criteria established in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Companyas of December 30, 2018 and December 31, 2017, and the results of its operations and its cash flows for each of the three years in the periodended December 30, 2018 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, theCompany maintained, in all material respects, effective internal control over financial reporting as of December 30, 2018, based on criteriaestablished in Internal Control - Integrated Framework (2013) issued by the COSO.Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financialreporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on InternalControl over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financialstatements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with thePublic Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company inaccordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and thePCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, andwhether effective internal control over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of theconsolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures includedexamining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in thecircumstances. We believe that our audits provide a reasonable basis for our opinions.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurancethat transactions are recorded as necessary to permit preparation of financial statements in accordance110with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaFebruary 27, 2019We have served as the Company’s auditor since 1982.111UNAUDITED QUARTERLY FINANCIAL DATABeginning fiscal year 2018, the Company allocated the amortization of acquisition-related intangible assets, restructuring costs and certain otherexpenses by function in the Consolidated Statements of Operations. The Consolidated Statements of Operations for the prior comparative periodshave been reclassified to conform to the current period presentation. See Note 1 to the Company's consolidated financial statements for furtherdiscussion. The 2017 quarterly reclassifications have been effected in the 2018 unaudited interim financial statements filings on Form 10-Q.Fiscal 2018 Three Months Ended December 30, 2018 (1) September 30, 2018 (2) (3) July 1, 2018 (2) (3) April 1, 2018 (2) (3)Revenues $604,474 $673,035 $624,090 $582,241Gross Margin $225,210 $259,715 $234,148 $212,392Net income (loss) $267,201 $50,747 $27,794 $9,090Adjust for net loss attributable to non-controllinginterest $(87) $(52) $(88) $(12)Net income (loss) attributable to Cypress $267,114 $50,695 $27,706 $9,078Net income (loss) per share - basic $0.74 $0.14 $0.08 $0.03Net income (loss) per share - diluted $0.72 $0.14 $0.07 $0.02Fiscal 2017 Three Months Ended December 31, 2017 (4) (5)(7) October 1, 2017 (5) July 2, 2017 (4) (5) (6) April 2, 2017 (4) (5)Revenues $597,547 $604,574 $593,776 $531,874Gross Margin $222,385 $209,696 $192,745 $157,108Net income (loss) $(34,026) $13,030 $(16,854) $(42,935)Adjust for net loss attributable to non-controllinginterest $12 $(14) $(66) $(64)Net income (loss) attributable to Cypress $(34,014) $13,016 $(16,920) $(42,999)Net income (loss) per share - basic $(0.10) $0.04 $(0.05) $(0.13)Net income (loss) per share - diluted $(0.10) $0.04 $(0.05) $(0.13)(1)During the fourth quarter of fiscal 2018, the Company recorded an impairment charge of $41.5 million related to its investment in Deca Technologies Inc., a privatelyheld company, loss on assets held for sale of $76.6 million related to the Company's entry into a definitive agreement to divest the NAND business, and release of thedeferred taxes valuation allowance of $343.3 million. See Note 7, Note 6, and Note 20 of the Notes to Consolidated Financial Statements, respectively.(2)During the first, second, and third quarters of fiscal 2018, the Company recorded $4.1 million, $1.2 million, and $10.0 million, respectively, of restructuring charges. SeeNote 11 of the Notes to Consolidated Financial Statements.(3)During the first, second, and third quarters of fiscal 2018, the Company recorded $53.1 million, $53.7 million, and $55.4 million, respectively, of amortization expensesrelated to intangible assets. See Note 5 of the Notes to Consolidated Financial Statements.(4)During the first, second, and fourth quarters of fiscal 2017, the Company recorded $2.5 million, $0.9 million, and $5.6 million, respectively, of restructuring charges. SeeNote 11 of the Notes to Consolidated Financial Statements.(5)During the first, second, third and fourth quarters of fiscal 2017, the Company recorded $48.2 million, $49.4 million, $48.4 million, and $49.2 million, respectively, ofamortization expenses related to intangible assets. See Note 5 of the Notes to Consolidated Financial Statements.(6)In the second quarter of fiscal 2017, the Company recorded $12.0 million of litigation and proxy related expenses in connection with a shareholder related matter.(7)During the fourth quarter of fiscal 2017, the Company recorded an impairment charge of $51.2 million related to its investment in Enovix, a privately held company.112Basic and diluted earnings per share are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic anddiluted per share information may not equal annual basic and diluted earnings per share.113ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURESNone.ITEM 9A.CONTROLS AND PROCEDURESEvaluation of Disclosure Controls and ProceduresWe maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of1934, as amended (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in reports that we file orsubmit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and ExchangeCommission rules and forms, and that such information is accumulated and communicated to our management, including our Chief ExecutiveOfficer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating ourdisclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated,can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, indesigning disclosure controls and procedures, our management necessarily is required to apply its judgment in evaluating the cost-benefitrelationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part uponcertain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goalsunder all potential future conditions.Based on our evaluation as of the end of the period covered by this Annual Report on Form 10-K and subject to the foregoing, our Chief ExecutiveOfficer and Chief Financial Officer have concluded that as of December 30, 2018 our disclosure controls and procedures were effective at thereasonable assurance level.Remediation of Previously Disclosed Material WeaknessA material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonablepossibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timelybasis.We previously identified and disclosed in our Form 10-K for the year ended December 31, 2017, as well as in our Forms 10-Q for each interimperiod in fiscal 2018, a material weakness in our internal control over financial reporting related to the calculation of stock-based compensationexpense. Specifically, we had not designed internal controls at a precision level sufficient to detect errors in certain assumptions and calculationsused in the determination of non-cash stock-based compensation primarily relating to Employee Stock Purchase Program ("ESPP").Throughout fiscal 2018, we implemented changes to our processes to improve our internal control over financial reporting to remediate the controldeficiency that gave rise to the material weakness. Specifically, we implemented the following changes and improvements:•Redesigned controls over the evaluation of assumptions and detailed calculations relating to the ESPP and expanded control activities toadequately reconcile and validate assumptions in the models used to determine non-cash stock-based compensation expense;•Re-evaluated the design of stock-based compensation processes and implemented new and improved processes and controls, asappropriate, including adding supplemental oversight and review; and•Strengthened the precision of the internal review process to ensure the completeness and accuracy of the assumptions and calculations usedin accounting for stock-based compensation.Upon completion of our testing of the design and operating effectiveness of these new control procedures, management concluded that thepreviously-identified material weakness was remediated as of December 30, 2018.Changes in Internal Control Over Financial ReportingThere were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) thatoccurred during the quarter ended December 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal controlover financial reporting.Management’s Report on Internal Control over Financial Reporting114Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f)under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.Our internal control over financial reporting includes those written policies and procedures that:•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets;•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance withgenerally accepted accounting principles;•provide reasonable assurance that receipts and expenditures are being made only in accordance with management and director authorization;and•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that couldhave a material effect on the consolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate.Management assessed the effectiveness of our internal control over financial reporting as of December 30, 2018. Management based thisassessment on criteria described in "Internal Control - Integrated Framework (2013)" issued by the Committee of Sponsoring Organizations of theTreadway Commission ("COSO"). Based on this assessment, management determined that as of December 30, 2018, we maintained effectiveinternal control over financial reporting.PricewaterhouseCoopers LLP, an independent registered public accounting firm, who audited the consolidated financial statements included in thisAnnual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of December 30, 2018, as statedin their report which appears under Item 8 of this Annual Report on Form 10-K.ITEM 9B.OTHER INFORMATIONNone.115PART IIICertain information required by Part III is omitted from this Annual Report. We intend to file a definitive proxy statement pursuant toRegulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and certain informationincluded therein is incorporated herein by reference as stated below.ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEThe information required by this item concerning directors is incorporated by reference to the information set forth in the section titled “ProposalOne - Election of Directors” in our Proxy Statement for the 2019 Annual Meeting of Stockholders, which we intend to file with the SEC within 120days of the fiscal year ended December 30, 2018 (the “2019 Proxy Statement”).The information required by this item concerning delinquent filers pursuant to Item 405 of Regulation S-K is incorporated by reference to theinformation set forth in the section titled “Section 16(a) Beneficial Ownership Reporting Compliance” in the 2019 Proxy Statement.The information required by this item concerning executive officers is incorporated by reference to Item 1 of this Annual Report.We have adopted a code of ethics that applies to all of our directors, officers and employees. We have made the code of ethics available, free ofcharge, on our website at www.cypress.com. By referring to our website, we do not incorporate such website or its contents into this AnnualReport.ITEM 11.EXECUTIVE COMPENSATIONThe information required by this item concerning executive compensation is incorporated by reference from the information set forth in the sectionstitled “Compensation Discussion and Analysis” and “Executive Compensation Tables” in our 2019 Proxy Statement.The information required by this item concerning compensation of directors is incorporated by reference to the information set forth in the sectiontitled “Director Compensation” in our 2019 Proxy Statement.The information required by this item concerning our compensation committee is incorporated by reference to the information set forth in thesections titled “Compensation Committee Interlocks and Insider Participation” and “Report of the Compensation Committee of the Board ofDirectors” in our 2019 Proxy Statement.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERSThe information required by this item concerning security ownership of certain beneficial owners, directors and executive officers is incorporated byreference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” in our 2019 ProxyStatement.The information required by this item regarding our equity compensation plans is incorporated by reference to the information set forth in thesection titled "Securities Authorized for Issuance under Equity Compensation Plans" in our 2019 Proxy Statement.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCEThe information required by this item concerning transactions with certain persons is incorporated by reference to the information set forth in thesections titled "Policies and Procedures with Respect to Related Person Transactions” and “Certain Relationships and Related Transactions” in our2019 Proxy Statement.116The information required by this item concerning director independence is incorporated by reference to the information set forth in the section titled“Corporate Governance” in our 2019 Proxy Statement.ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICESThe information required by this item concerning fees and services is incorporated by reference to the information set forth in the section titled“Proposal Two—Ratification of the Selection of Independent Registered Public Accounting Firm” in our 2019 Proxy Statement.The information required by this item regarding the audit committee’s pre-approval policies and procedures is incorporated by reference to theinformation set forth in the section titled “Proposal Two—Ratification of the Selection of Independent Registered Public Accounting Firm” in our2019 Proxy Statement.117PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULE(a)The following documents are filed as a part of this Annual Report on Form 10-K:1.Financial Statements: PageConsolidated Balance Sheets as of December 30, 2018 and December 31, 201754Consolidated Statements of Operations for the years ended December 30, 2018, December 31, 2017 and January 1, 201755Consolidated Statements of Comprehensive Income (Loss) Consolidated Statements of Stockholders’ Equity56Consolidated Statements of Cash Flows57Notes to Consolidated Financial Statements592.Financial Statement Schedule (Valuation and Qualifying Accounts) for the years ended December 30, 2018, December 31, 2017 andJanuary 1, 2017: PageSchedule II—Valuation and Qualifying Accounts123 3.Exhibits: The documents listed below are filed (or furnished, as noted) as exhibits to this Annual Report on Form 10-K:EXHIBIT INDEX Incorporated by Reference to: ExhibitNumber Exhibit Description Form* Filing Date Exhibit FiledHerewith2.1 Agreement and Plan of Merger and Reorganization, dated December 1,2014, between Cypress Semiconductor Corporation and Spansion Inc. 8-K 2014-12-01 2.1 2.2 Asset Purchase Agreement by and between Broadcom Corporation asSeller and Cypress Semiconductor Corporation as Buyer dated as ofApril 28, 2016. 10-Q 2016-05-10 10.1 2.3 Joint Venture Agreement, dated October 23, 2018, between CypressSemiconductor Corporation and SK hynix system ic Inc. X 3.1.1 Second Restated Certificate of Incorporation of Cypress SemiconductorCorporation, dated June 12, 2000 (included in Exhibit 3.1.2 below) 3.1.2 Amendment, dated March 23, 2017, to Second Restated Certificate ofIncorporation of Cypress Semiconductor Corporation. 10-Q 2017-05-02 3.1 3.2 Amended and Restated Bylaws of Cypress Semiconductor Corporation(effective September 21, 2017). 8-K 2017-09-25 3.1 4.1.1 Form of 2% Spansion Exchangeable Note due 2020 (included inexhibit 4.1.2 below). 1184.1.2 Indenture, dated August 26, 2013, among Spansion LLC, other partiesthereto, and Wells Fargo Bank, National Association, as trustee. 8-K (a) 2013-08-26 4.1 4.1.3 Supplemental Indenture, dated March 12, 2015, among Spansion LLC,Cypress Semiconductor Corporation, other parties thereto, and WellsFargo Bank, National Association, as trustee. 8-K 2015-03-12 4.1 4.2.1 Form of 4.50% Senior Exchangeable Note due 2022 (included inExhibit 4.2.2 below). 4.2.2 Indenture, dated June 23, 2016, by and between CypressSemiconductor Corporation and U.S. Bank National Association, astrustee. 8-K 2016-06-23 4.1 4.3 Form of Capped Call Transaction Confirmation Letter (entered into in2016 in connection with the 2022 Notes). 10-Q 2016-08-09 4.1 4.4.1 Form of 2.00% Senior Convertible Note due 2023 (included in Exhibit4.4.2 below). 4.4.2 Indenture, dated November 6, 2017, between Cypress SemiconductorCorporation and U.S. Bank National Association, as trustee. 8-K 2017-11-06 4.1 10.1.1 Amended and Restated Credit and Guaranty Agreement, dated as ofMarch 12, 2015, among Cypress Semiconductor Corporation, theguarantors party thereto, the lenders party thereto, Morgan StanleySenior Funding, Inc., as administrative agent and collateral agent, EastWest Bank, Silicon Valley Bank, and SunTrust Bank, as syndicationagents and documentation agents, and Morgan Stanley Bank, N.A., asIssuing Bank (included as Annex III to Exhibit 10.1.2 below). 10.1.2 Amendment and Restatement Agreement, dated as of March 12, 2015,among Cypress Semiconductor Corporation, certain of its subsidiaries,the lenders party thereto, and Morgan Stanley Senior Funding, Inc., asadministrative agent. 8-K 2015-03-12 10.1 10.1.3 Amended and Restated Pledge and Security Agreement, dated March12, 2015, among, Cypress Semiconductor Corporation, the grantorsparty thereto, and Morgan Stanley Senior Funding, Inc., as collateralagent. 8-K 2015-03-12 10.3 10.1.4 Amendment No. 1, dated October 20, 2015, to Amended and RestatedCredit and Guaranty Agreement. 10-Q 2015-11-05 10.4 10.1.5 Joinder Agreement dated December 22, 2015. 8-K 2016-01-11 10.1 10.1.6 Incremental Revolving Joinder Agreement dated as of January 6, 2016. 8-K 2016-01-11 10.2 10.1.7 Amendment No. 2, dated March 23, 2016, to Amended and RestatedCredit and Guaranty Agreement. 10-Q 2016-05-10 10.3 10.1.8 Amendment No. 3, dated April 27, 2016, to Amended and RestatedCredit and Guaranty Agreement. 10-Q 2016-05-10 10.4 10.1.9 Term Loan B Commitment Letter for the Broadcom transaction (ProjectLe Cose), dated April 28, 2016. 10-Q 2016-05-10 10.2 10.1.10 Joinder and Amendment Agreement, dated July 5, 2016. 8-K 2016-07-05 10.1 10.1.11 Amendment No. 4, dated February 17, 2017, to Amended and RestatedCredit and Guaranty Agreement. 8-K 2017-02-21 10.1 10.1.12 Amendment No. 5, dated April 7, 2017, to Amended and RestatedCredit and Guaranty Agreement. 8-K 2017-04-10 10.1 10.1.13 Joinder Agreement and Amendment No. 6, dated August 18, 2017, toAmended and Restated Credit and Guaranty Agreement. 8-K 2017-08-18 10.1 11910.1.14 Amendment No. 7, dated March 12, 2018, to Amended and RestatedCredit and Guaranty Agreement. 8-K 2018-03-15 10.1 10.1.15 Amendment No. 8, dated September 13, 2018, to Amended andRestated Credit and Guaranty Agreement. 8-K 2018-09-17 10.1 10.2.1+ 2013 Stock Plan, as amended and restated effective June 20, 2017. 10-Q 2017-07-28 10.1 10.2.2+ Amendment, dated February 16, 2018, to the 2013 Stock Plan. 10-Q 2018-04-30 10.3 10.2.3+ Form of Restricted Stock Unit Agreement and related notice of grantunder the 2013 Stock Plan (in use 2015-2018). 10-Q 2015-11-05 10.2 10.2.4+ Form of Restricted Stock Unit Agreement, and related notice of grant,under the 2013 Stock Plan (in use starting November 2018). X 10.2.5+ Form of Milestone-Based Restricted Stock Unit Agreement, and relatednotice of grant, under the 2013 Stock Plan (in use starting November2018). X 10.3.1+ 2010 Equity Incentive Award Plan, as amended and restated effectiveAugust 5, 2016. X 10.3.2+ Form of Restricted Stock Unit Agreement and related notice of grantunder the 2010 Stock Plan (in use starting November 2018). X 10.3.3+ Form of Milestone-Based Restricted Stock Unit Agreement and relatednotice of grant under the 2010 Stock Plan (in use starting November2018). X 10.4.1+ 2012 Incentive Award Plan, as amended and restated on November 19,2012. S-8 (b) 2012-12-12 10.4 10.4.2+ Amendment, dated February 16, 2018, to the 2012 Incentive AwardPlan. 10-Q 2018-04-30 10.2 10.5+ 1999 Non-Statutory Stock Option Plan, as amended and restatedSeptember 30, 2008. S-8 (c) 2008-10-27 10.2 10.6.1+ Employee Stock Purchase Plan, as amended and restated effectiveJanuary 1, 2019. S-8 (d) 2018-06-20 4.3 10.6.2+ Form of Employee Stock Purchase Plan Subscription Agreement. S-8 (d) 2018-06-20 4.4 10.7.1+ Non-Qualified Deferred Compensation Plan I, as amended and restatedeffective January 1, 2018. X 10.7.2+ Non-Qualified Deferred Compensation Plan II, as amended and restatedeffective January 1, 2018. X 10.7.3+ Non-Qualified Pre-2005 Deferred Compensation Plan I. X 10.7.4+ Non-Qualified Pre-2005 Deferred Compensation Plan II. X 10.8+ Cypress Incentive Plan (executive annual cash bonus plan) SummaryDescription. 8-K 2016-02-25 10.9.1+ Hassane El-Khoury Employment Offer Letter, dated August 10, 2016. 8-K 2016-08-12 10.1 10.9.2+ Hassane El-Khoury Employment Agreement, dated November 30,2016. 10-K 2017-03-01 10.41 10.9.3+ Hassane El-Khoury Amended and Restated Employment Agreement,dated December 3, 2018. 8-K 2018-12-03 10.2 10.10+ Thad Trent Employment Offer Letter, dated September 20, 2005 X 12010.11+ Sam Geha Employment Offer Letter, dated October 27, 1995 X 10.12+ Sudhir Gopalswamy Employment Offer Letter, dated February 26,2008 X 10.13+ Pamela Tondreau Employment Offer Letter, dated January 15, 2015 X 10.14+ Form of Amended and Restated Change of Control SeveranceAgreement (between the Company and its named executive officersother than the CEO). 8-K 2018-12-03 10.1 10.15 Mutual Release Agreement, dated as of June 11, 2017, between theCompany and H. Raymond Bingham. 8-K 2017-06-12 10.1 10.16 Cooperation and Settlement Agreement, dated June 30, 2017, betweenthe Company, TJ Rodgers, and the Rodgers parties named therein. 8-K 2017-07-06 10.1 21.1 Subsidiaries of Cypress Semiconductor Corporation. X 23.1 Consent of Independent Registered Public Accounting Firm. X 24.1 Power of Attorney (incorporated by reference to the signature page ofthis Annual Report on Form 10-K). X 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of theSarbanes-Oxley Act of 2002. X 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of theSarbanes-Oxley Act of 2002. X 32.1(e) Certification of Chief Executive Officer Pursuant to 18 U.S.C.Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 32.2(e) Certification of Chief Financial Officer Pursuant to 18 U.S.C.Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. X 101.INS XBRL Instance Document. X 101.SCH XBRL Taxonomy Extension Schema Document. X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. X 101.LAB XBRL Taxonomy Extension Label Linkbase Document. X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. X *Unless otherwise noted, Commission File Number for incorporated documents is 001-10079.+Management contract or compensatory plan or arrangement.(a)Filed by Spansion, Inc., Commission File Number 001-34747.(b)Form S-8 filed 2012-12-12 Commission File Number is 333-185439.(c)Form S-8 filed 2008-10-27 Commission File Number is 333-154748.(d)Form S-8 filed 2018-06-20 Commission File Number is 333-225759.(e)Exhibits 32.1 and 32.2 are furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the ExchangeAct), or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other documentfiled under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.ITEM 16. FORM 10-K SUMMARY121None.122SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS Balance atBeginning ofPeriod Additions Charged toExpenses orOther Accounts Deductions Credited toExpenses or OtherAccounts Balance atEnd ofPeriod (In thousands)Allowance for doubtful accounts receivable: Year ended December 30, 2018$1,028 $— $(124) $904Year ended December 31, 2017$1,028 $— $— $1,028Year ended January 1, 2017$1,189 $490 $(651) $1,028Deferred tax valuation allowance Year ended December 30, 2018$513,191 $— $(354,656)(1)$158,535Year ended December 31, 2017$445,030 $68,161$— $513,191Year ended January 1, 2017$512,975 $—$(67,945) $445,030 (1)Includes the 2018 change in valuation allowance previously recorded primarily related to certain federal and state deferred tax assets of $343.3 million thatmanagement has determined more likely than not to be realized.123SIGNATURESPursuant 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 signedon its behalf by the undersigned, thereto duly authorized. CYPRESS SEMICONDUCTOR CORPORATION Date: February 27, 2019By:/ S / Thad Trent Thad TrentExecutive Vice President, Finance and Administration and Chief Financial Officer124POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Hassane El-Khouryand Thad Trent, jointly and severally, his attorneys-in-fact, each with the power of substitution, for him in any and all capacities, to sign anyamendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities andExchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause tobe done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of theregistrant and in the capacities and on the dates indicated. Signature Title Date /S/ HASSANE EL-KHOURY President, Chief Executive Officer and Director (Principal ExecutiveOfficer) February 27, 2019Hassane El-Khoury /S/ THAD TRENT Executive Vice President, Finance and Administration and ChiefFinancial Officer (Principal Financial and Accounting Officer) February 27, 2019 Thad Trent /S/ W. STEVE ALBRECHT Chairman of the Board of Directors February 27, 2019 W. Steve Albrecht /S/ OH CHUL KWON Director February 27, 2019 Oh Chul Kwon /s/ CATHERINE P. LEGO Director February 27, 2019Catherine P. Lego /s/ CAMILLO MARTINO Director February 27, 2019Camillo Martino /S/ J. DANIEL MCCRANIE Director February 27, 2019J. Daniel McCranie /s/ JEFFREY J. OWENS Director February 27, 2019Jeffrey J. Owens /s/ JEANNINE P. SARGENT Director February 27, 2019Jeannine P. Sargent /S/ MICHAEL S. WISHART Director February 27, 2019Michael S. Wishart 125Exhibit 2.3CONFIDENTIALJOINT VENTURE AGREEMENTThis JOINT VENTURE AGREEMENT (“Agreement”) is made as of October 23, 2018, by and between SK hynix system icInc., a company organized under the laws of the Republic of Korea (“SKHYSI”), and Cypress Semiconductor Corporation, aDelaware corporation (“Cypress”). SKHYSI and Cypress are hereinafter also referred to together as the “Parties” and individually as a“Party.”RECITALS(A)SKHYSI is a manufacturer and seller of semiconductor devices and a wholly-owned subsidiary of SK hynix Inc., a companyorganized under the laws of the Republic of Korea (“SKH”).(B)Cypress is a manufacturer and seller of advanced embedded system solutions for automotive, industrial, home automation andappliances, consumer electronics and medical products.(C)The Parties desire to form a joint venture to pursue the Business, as hereafter defined.NOW THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Partieshereby agree as follows:AGREEMENT1.Definitions1.1“Affiliate” means any Person: (a) that is controlled by, controls, or is under common control with a Party (collectively, a“Controlled Person”); or (b) that is controlled by, controls, or is under common control with any such ControlledPerson, in each case for so long as such control continues. For purposes of this definition, “control” shall mean thepossession, directly or indirectly, of more than fifty percent (50%) of voting securities in such Controlled Person.Notwithstanding anything herein to the contrary, unless specifically provided for herein, neither SKH nor any of itsdirect or indirect subsidiaries, other than SKHYSI, shall be deemed to be an Affiliate of the Company.1.2“Applicable Law” means, as to any Person, any statute, law, rule, regulation, directive, treaty, judgment, order, decreeor injunction of any Governmental Authority that is applicable to or binding upon such Person or any of its properties.1.3“Articles” means the articles of association of the Company substantially in the form of attached Exhibit 1.3, asamended from time to time.587490.10A-PALSR01A - MSW1.4“Back-End Manufacturing Agreement” means the Manufacturing Agreement to be entered into between Cypress’sThailand subsidiary (“Cypress Thailand”) and the Company containing at a minimum the terms specified in Exhibit 1.4.1.5“Bill of Sale” means the Bill of Sale to be entered into between Cypress and the Company substantially in the form ofattached Exhibit 1.5, pursuant to which Cypress will transfer the Cypress NAND Assets to the Company.1.6“Board” means the board of directors of the Company.1.7“Business Day” means a day on which commercial banks in Hong Kong, San Francisco and Seoul are generally opento conduct their regular banking business.1.8“CFIUS” means the Committee on Foreign Investment in the United States and each member agency thereof, acting insuch capacity.1.9“CFIUS Clearance” means (i) the reasonable consensual conclusion of SKHYSI and Cypress that none of thetransactions contemplated hereunder are a “covered transaction” and are not subject to review under Section 721 of theDPA; (ii) CFIUS has issued a written notice that it has completed a review or investigation of the notificationvoluntarily provided pursuant to the DPA with respect to the transactions contemplated by this Agreement, and hasconcluded all action under the DPA; or (iii) if CFIUS has sent a report to the President of the United States requestingthe President’s decision and (x) the President has announced a decision not to take any action to suspend or prohibit thetransactions contemplated by this Agreement or (y) having received a report from CFIUS requesting the President’sdecision, the President has not taken any action after fifteen (15) days from the date the President received such reportfrom CFIUS.1.10“Class A Ordinary Share” means an ordinary share in the share capital of the Company which, subject to the provisionsof the Companies Ordinance, shall receive dividends as and when they are declared in accordance with Section 5.7 asfurther set forth in the Company’s Articles.1.11“Class B Ordinary Share” means an ordinary share in the share capital of the Company which, subject to the provisionsof the Companies Ordinance, shall receive dividends as and when they are declared in accordance with Section 5.7 andshall have the additional right to receive a further dividend as set out in Section 4.1, each as further set forth in theCompany’s Articles and this Agreement.1.12“Companies Ordinance” means the Companies Ordinance, Cap. 622 of the Laws of Hong Kong, as may be amendedfrom time to time.1.13“Companies Registry” means the Hong Kong Companies Registry.2587490.10A-PALSR01A - MSW1.14“Company” is defined in Section 3.1(a).1.15“Company Interest” means, as to any Person, the percentage interest represented by the Securities then held by suchPerson divided by all then outstanding Securities (on an as-converted to Share basis and, to the extent warrants oroptions to purchase Securities have vested, as-exercised for Share basis).1.16“CY Volume” means the 5,000 Wafers per month to be supplied by SKH to Cypress or its Affiliate until 11:59 p.m.(Hong Kong Time) on December 31, 2020 under the NAND Supply Agreement, dated as of October 1, 2016, or anyother supplementary agreement thereto by and between SKH and Cypress.1.17“Cypress NAND Assets” means the assets specified in Exhibit 1.17.1.18“Cypress Transition Services Agreement” means the Transition Services Agreement to be entered into betweenCypress and the Company, pursuant to which Cypress will provide the Company with the services specified in Exhibit1.18 as amended from time to time.1.19“Director” means a director of the Company with the powers and duties specified in the Companies Ordinance and theArticles.1.20“DPA” means the Defense Production Act of 1950, as amended (50 U.S.C. § 4565), and all rules and regulationsthereunder, including those codified at 31 C.F.R. Part 800 et seq.1.21“Governmental Authority” means any domestic or foreign government, governmental authority, court, tribunal, agencyor other regulatory, administrative or judicial agency, commission or organization, and any subdivision, branch ordepartment of any of the foregoing.1.22“HK$” or “HK Dollars” means Hong Kong Dollars, the lawful currency of Hong Kong.1.23“Hong Kong” means the Hong Kong Special Administrative Region of the People’s Republic of China.1.24“Person” means a natural individual, Governmental Authority, partnership, firm, corporation, or other businessassociation.1.25“Securities” means all issued Shares, and any other equity securities of the Company or instruments exercisable for orconvertible into Shares.1.26“Shares” means the Class A Ordinary Shares and Class B Ordinary Shares.1.27“Shareholder” means any Person registered in the books of the Company as the holder of a Share for the time being.3587490.10A-PALSR01A - MSW1.28“Signing Date” means the date of this Agreement.1.29“SKH New Supply Agreement” means the supply agreement to be entered into between SKH and the Company.1.30“Transaction Documents” means this Agreement, the Articles, the Back-End Manufacturing Agreement, the CypressTransition Services Agreement, the SKH New Supply Agreement and the Bill of Sale.1.31“US$” or “US Dollars” means the lawful currency of the United States of America.2.Purpose of Joint VentureThe Parties hereby associate themselves in a joint venture relationship which shall have as its principal purpose the business ofdeveloping, manufacturing, selling and distributing NAND products and other related products and services using Large Scale NANDWafers (“Wafers”) supplied by SKH (the “Business”).3.Establishment and Launch of the Company3.1Establishment.(a)The Parties agree that the joint venture contemplated by this Agreement shall be carried out exclusively througha newly-formed private company limited by shares in Hong Kong in accordance with the laws of Hong Kong(the “Company”) for the purpose of conducting the Business.(b)The Company’s corporate name shall be “SkyHigh Memory Limited.” The registered office of the Companyshall be located in Hong Kong at the address determined by the Board. The Company shall be a legal personestablished under the laws of Hong Kong, and all activities of the Company shall be done in accordance withthe laws, decrees, rules and regulations of Hong Kong, while at the same time shall be protected thereunder andreceive the privileges thereunder.(c)SKHYSI shall use commercially reasonable efforts to cause the Company to be formed promptly following thereceipt of all required approvals and consents (including without limitation from any applicable GovernmentalAuthority or other third party) in connection with such formation. Cypress shall provide such assistance asSKHYSI may reasonably request in connection with the formation of the Company. The date on whichSKHYSI receives confirmation from the Companies Registry that the Company has been validly formed isreferred to in the Agreement as the “Establishment Date”.4587490.10A-PALSR01A - MSW(d)The Company shall initially be a wholly-owned subsidiary of SKHYSI. Upon the final receipt of all RequiredApprovals (as defined below), the initial articles of association of the Company shall be amended in its entiretyand the Articles shall be the articles of association of the Company. Cypress shall thereafter subscribe for theShares as provided in Section 3.2. The Parties hereby agree that the Company shall not undertake any businessoperations, nor shall any offer of employment made by the Company be effective, in advance of the LaunchTime (as defined below). For avoidance of doubt, (i) Cypress shall be entitled to subscribe for Shares only uponreceipt of the Required Approvals and (ii) the Company shall not issue any Shares or other securities prior to theLaunch Time other than as expressly provided for in Section 3.2 below.3.2Subscriptions.(a)The total number of Shares that the Company shall issue following the Establishment Date is one thousand(1,000), of which six hundred (600) shall be Class A Ordinary Shares and four hundred (400) shall be Class BOrdinary Shares.(b)Within ten (10) Business Days of the Establishment Date, SKHYSI shall subscribe for six hundred (600) ClassA Ordinary Shares (such time, the “SKHYSI Subscription Time”) by signing the relevant applications forShares and paying to the Company US$600 in cash. Immediately following the SKHYSI Subscription Time,the capitalization of the Company on a fully diluted basis shall be as follows:Name of ShareholdersNumber of Shares subscribedPercentage of ShareholdingSKHYSISix hundred (600)Class A Ordinary Shares100%Total:Six hundred (600)Shares100%Promptly after the SKHYSI Subscription Time, SKHYSI shall cause the Company, to the maximum extentpermitted by all Applicable Law, (i) to deliver to SKHYSI its written acknowledgment of, and agreement toabide by, the terms of this Agreement, and (ii) to issue and deliver to SKHYSI a share certificates representingthe Shares subscribed for pursuant to this Section 3.2(b), which certificate shall comply with the provisions ofSection 9.2.(c)Thereafter, within ten (10) Business Days of the amendment of the Company’s articles of association asprovided in Section 3.1(d), Cypress shall subscribe for four hundred (400) Class B Ordinary Shares (such time,the “Cypress Subscription Time”) by signing the relevant applications for5587490.10A-PALSR01A - MSWShares and paying to the Company US$400 in cash. Immediately following the Cypress Subscription Time, thecapitalization of the Company on a fully diluted basis shall be as follows:Name of ShareholdersNumber of Shares subscribedPercentage of ShareholdingSKHYSISix hundred (600)Class A Ordinary Shares60%CypressFour hundred (400)Class B Ordinary Shares40%Total:One thousand (1,000)Shares100%Promptly after the Cypress Subscription Time, the Parties shall cause the Company, to the maximum extentpermitted by all Applicable Law, (i) to deliver to Cypress its written acknowledgment of, and agreement toabide by, the terms of this Agreement, and (ii) to issue and deliver to Cypress a share certificate representing theShares subscribed for pursuant to this Section 3.2(c), which certificate shall comply with the provisions ofSection 9.2.(d)Each Party shall fully pay the subscription price for the Shares subscribed by it pursuant to this Agreement inUS Dollars to an account to be opened by the Company with a bank in Hong Kong using best efforts to opensuch account within twenty (20) days of the SKHYSI Subscription Time, unless otherwise directed byresolution of a majority of the Board. The Company shall use all or substantial portion of the subscriptionmonies paid by the Parties pursuant to this Section 3.2 as initial working capital of the Company.3.3Required Approvals.(a)Subject to subsections (b) and (c) below, the Parties shall be jointly responsible for obtaining such approvals(including the CFIUS Clearance), consents, business licenses and similar actions from GovernmentalAuthorities or third parties as may be necessary or appropriate in order to promptly consummate thetransactions, and to thereafter conduct the Business as contemplated by the Transaction Documents(collectively, the “Required Approvals”).(b)SKHYSI shall be primarily responsible for obtaining all approvals, consents, business licenses and similaractions in connection with the establishment of the Company. Cypress shall provide such assistance as SKHYSImay reasonably request in connection with the foregoing.(c)Cypress shall be primarily responsible for obtaining all third party approvals required to effect the contributionof the Cypress NAND Assets6587490.10A-PALSR01A - MSW(the “Asset Transfer Approvals”). SKHYSI shall provide such assistance as Cypress may reasonably request inconnection with the Asset Transfer Approvals.(d)The Parties shall use commercially reasonable efforts to as promptly as practicable prepare and file all necessaryapplications, reports and similar documents in connection with the respective Required Approvals.(e)Such commercially reasonable efforts shall include, without limitation, promptly making any draft filingrequired in connection with the CFIUS Clearance in accordance with the DPA, promptly making any finalfiling in connection with the CFIUS Clearance and in accordance with the DPA after receipt of confirmationthat CFIUS has no further comment to the draft filing, and providing any information reasonably requested byCFIUS or any other agency or branch of the U.S. government in connection with the CFIUS review orinvestigation of the transactions contemplated by this Agreement within the timeframes set forth in the DPA.(f)Such commercially reasonable efforts shall also include, without limitation, efforts to file, as soon as practicableafter the date of this Agreement, all notices, reports and other documents required to be filed by such Party withany Governmental Authority (other than those subject to Section 3.3(e)) with respect to the transactionscontemplated by this Agreement, and to submit promptly any additional information requested by any suchGovernmental Authority. The Parties shall respond as promptly as practicable to any inquiries or requestsreceived from any state attorney general, antitrust authority or other Governmental Authority in connection withantitrust or related matters. The Parties each shall promptly supply the other with any information which may bereasonably required in order to effectuate any filings (including applications) pursuant to (and to otherwisecomply with its obligations set forth in) this Section 3.3(f). Except where prohibited by Applicable Law or anyGovernmental Authority, the Parties shall: (i) cooperate with each other with respect to any filings made by eachParty in connection with the transactions contemplated herein; (ii) permit the other Party to review (and considerin good faith the views of such other Party in connection with) any documents before submitting suchdocuments to any Governmental Authority in connection with the transactions contemplated herein; and (iii)promptly provide the other Party with copies of all filings, notices and other documents (and a summary of anyoral presentations) made or submitted by such Party with or to any Governmental Authority in connection withthe transactions contemplated herein.7587490.10A-PALSR01A - MSW(g)The Parties shall each be responsible for 50% of all filing fees and external legal costs required to be paid inconnection with the Required Approvals.(h)The Parties agree that commercially reasonable efforts regarding obtaining CFIUS Clearance or any otherRequired Approval include agreeing to any condition, restriction or other action required by CFIUS or anyapplicable Governmental Authority in order to obtain the CFIUS Clearance or such Required Approval thatwould not otherwise result in an adverse effect on the Company that is material. Notwithstanding the forgoingor anything to the contrary contained in this Section 3.3 or elsewhere in this Agreement, neither Party shall haveany obligation under this Agreement to, or to agree to (or to cause or permit any of its Affiliates or the Company(except to the extent not adverse and material to the Company) to, or to agree to): (i) relinquish or forbear anyright; (ii) divest, limit or restrict any business, product line or asset or the operation or use of any of theforegoing; (iii) take any affirmative action or accept any undertaking or affirmative obligation with respect toany business, product line or asset or the operation or use of any of the foregoing; or (iv) contest any LegalRestraint relating to the transactions contemplated by this Agreement.3.4Conditions to Launch.(a)Mutual Conditions. The respective obligation of SKHYSI and Cypress to effect the Launch (as defined below)is subject to the satisfaction or, to the extent permitted by Applicable Law, the waiver by each Party on or priorto the Launch Time of each of the following conditions:(i)All Required Approvals (including, in each case, the expiration or termination of the waiting periods(and any extensions thereof) applicable to the Launch and the transactions contemplated by theTransaction Documents) shall have been obtained and shall have become Final Orders. As used in thisAgreement, a “Final Order” means an action by the relevant Governmental Authority that has not beenreversed, stayed, enjoined, set aside, annulled or suspended, with respect to which any waiting periodprescribed by Applicable Law before the transactions contemplated hereby may be consummated hasexpired, and as to which all conditions (other than any conditions that are within the control of any Partyto satisfy, which conditions shall promptly be satisfied by such Party) to the consummation of suchtransactions prescribed by Applicable Law or order have been satisfied.(ii)No Applicable Law and no judgment, preliminary, temporary or permanent, issued by any court ortribunal of competent jurisdiction (collectively, “Legal Restraints”) shall be in effect, and8587490.10A-PALSR01A - MSWno suit, action or other proceeding that has been initiated by a Governmental Authority havingjurisdiction over SKHYSI, Cypress or the Company shall be pending, in which such GovernmentalAuthority seeks to impose, or has imposed, any Legal Restraint, in each case that, prevents, makesillegal or prohibits the consummation of the Launch or the transactions contemplated by the TransactionDocuments.(iii)The NAND Supply Agreement, dated as of October 1, 2016, between SKH and Cypress shall havebeen terminated, effective as of the Launch Time.(iv)SKH shall have executed and delivered to the Company the SKH New Supply Agreement, reasonablyacceptable to both SKHYSI and Cypress, in escrow to be released at the Launch Time.(v)The Parties shall have caused the Company to (A) execute and deliver to Cypress Thailand the Back-End Manufacturing Agreement, (B) execute and deliver to Cypress the Cypress Transition ServicesAgreement, (C) execute and deliver to SKH the SKH New Supply Agreement and (D) execute anddeliver to Cypress the Bill of Sale, in each case in escrow to be released at the Launch Time.(vi)The following minimum number of employees shall have accepted offers of employment from theCompany or a wholly owned subsidiary of the Company, subject to beginning such employment noearlier than the Launch Time:A.At least three (3) marketing/applications employees,B.At least three (3) product/test engineering employees, andC.At least six (6) sales/field application engineering employees.(b)Cypress Conditions. The obligation of Cypress to effect the Launch is further subject to the satisfaction or, tothe extent permitted by Applicable Law, the waiver by Cypress on or prior to the Launch Time of each of thefollowing condition:(i)The representations and warranties of SKHYSI contained in this Agreement shall be true and correct inall material respects at and as of the Launch Date as if made at and as of such date (except to the extentexpressly made as of an earlier date, in which case as of such earlier date). Cypress shall have received acertificate signed9587490.10A-PALSR01A - MSWon behalf of SKHYSI by an executive officer of SKHYSI to such effect.(ii)The Company shall not have taken or approved any actions that would have required special consent ofthe Board pursuant to Section 5.6 had it been in effect at such time.(c)SKHYSI Conditions. The obligation of SKHYSI to effect the Launch is further subject to the satisfaction or, tothe extent permitted by Applicable Law, the waiver by SKHYSI on or prior to the Launch Time of each of thefollowing conditions:(i)The representations and warranties of Cypress contained in this Agreement shall be true and correct inall material respects at and as of the Launch Date as if made at and as of such date (except to the extentexpressly made as of an earlier date, in which case as of such earlier date). SKHYSI shall have receiveda certificate signed on behalf of Cypress by an executive officer of Cypress to such effect.(ii)Cypress shall have caused Cypress Thailand to execute and deliver to the Company the Back-EndManufacturing Agreement in escrow to be released at the Launch Time.(iii)Cypress shall have executed and delivered to the Company each of the Cypress Transition ServicesAgreement and the Bill of Sale, in each case in escrow to be released at the Launch Time.3.5The Launch. The Transaction Documents (other than this Agreement and the Articles) shall become effective (the“Launch”, and such time, the “Launch Time”) on a date to be specified by SKHYSI and Cypress, which shall be nolater than the third Business Day following the satisfaction or (to the extent permitted by Applicable Law) waiver by theParty or Parties entitled to the benefits thereof of the conditions set forth in Section 3.4 (other than those conditions thatby their nature are to be satisfied at the Launch, but subject to the satisfaction or (to the extent permitted by ApplicableLaw) waiver of those conditions), or at such other place, time and date as may be agreed in writing between SKHYSIand Cypress. As soon as practicable following the Launch Time, each Party shall receive one original of each of thefully executed Transaction Documents.3.6Additional Capital Contributions.(a)At or within one (1) Business Day following the Launch Time, SKHYSI shall contribute and transfer to theCompany (as share capital of Class A Ordinary Shares) US$3,599,400 in cash.10587490.10A-PALSR01A - MSW(b)At or within one (1) Business Day following the Launch Time, Cypress shall contribute and transfer to theCompany (as share capital of Class B Ordinary Shares) US$2,399,600 in cash.(c)Neither Party shall receive any additional compensation, separate from that provided elsewhere this Agreement,for contributing assets to the Company under this Section 3.6. Subject to Section 3.7 and Section 3.8, the Partiesmay make additional contribution in cash to the Company, including in proportion to the Parties’ then currentshareholding upon the agreement of the Parties in writing, in each case in their sole discretion.3.7Preemptive Rights. Following the Cypress Subscription Time, each Party shall at all times have a preemptive right topurchase a pro rata portion (equal to such Party’s then-current Company Interest) of any new issuances of Shares orother Securities. The Company agrees to notify each Party in writing of any proposed new issuance of Securities towhich such preemptive rights apply, no less than ten (10) Business Days in advance of such offering and setting forththe terms thereof. Each Party shall notify the other Party and the Company, within five (5) Business Days after receiptof such notice, of its decision to participate in any proposed new issuance of Securities (failure to so respond duringsuch period constituting an election not to participate). In the event that a Party elects not to subscribe for such Party’sfull pro rata share of any newly issued Securities, the other Party shall be entitled to purchase any of the unsubscribedSecurities.3.8Financial Independence. Except as may be otherwise agreed by the Parties, in writing, the Company shall be entirelyself-financing and shall obtain all funds required for its operations without recourse to, or credit support provided by,either Party. In the event that either Party elects to provide a guarantee or other form of credit support to the Company,which it may elect to do or not to do in its sole discretion, such Party may condition such guarantee or credit supportupon the written agreement of the other Party to reimburse a pro rata share of amount paid by such Party in respectthereof in proportion to such other Party’s Company Interest.4.CY Amount4.1CY Amount. For so long as Cypress beneficially owns Class B Ordinary Shares of the Company, the Company shallpay Cypress, on a quarterly basis in the manner as set out in Section 4.2 below, the “CY Amount,” which shall becalculated pursuant to this Section 4.1. The CY Amount shall be paid in accordance with Section 4.2 below and shallbe in addition to any dividend that may be paid pursuant to Section 5.7 and shall not be taken into account indetermining Cypress’s share of any dividend that may be paid pursuant to Section 5.7.11587490.10A-PALSR01A - MSW(a)The CY Amount shall be profit from the sale of Company products manufactured using the CY Volume for theperiod beginning upon the Launch Time and ending at 11:59 p.m. (Hong Kong Time) on December 31, 2020(the “CY Amount End Time”), as calculated in accordance with the formula set forth below.The CY Amount for CY Volume =ⓐ x (ⓓ / ⓔ), where:ⓐ: Net income during a given quarter (which will be calculated in the same way as the accountingrecords of the Company).ⓓ: 15,000 CY Volume Wafers for such quarterⓔ: Total number of Wafers the Company purchased from SKH, including the 15,000 CY VolumeWafers, in such given quarterFor clarification, the result of (ⓓ / ⓔ) based on the above formula shall not be more than one (1).From the Launch Time until the CY Amount End Time, to the maximum extent possible, the Company shalluse the CY Volume Wafers to satisfy demand from Existing Customers before using such Wafers to satisfydemand from other customers. For the purpose of the foregoing sentence, “Existing Customers” shall mean suchcustomers that purchased Single-Level Cell NAND (“SLC”) products using Wafers from Cypress during ninety(90) calendar days prior to the Launch Time.In addition, with respect to the sale of any carried-over CY Volume Wafers inventory as of the CY AmountEnd Time, the CY Amount will be calculated and paid in accordance with the above formula during January of2021 and the Company will pay fifty percent (50%) of such amount incurred during January of 2021 to Cypress(“CY January Amount”).(b)Notwithstanding the foregoing, the total amount of “CY Amount” during each year will be finally adjusted andsettled up based on calculation with the actual annual accounting records of the Company after the end of everyfiscal year.(c)For avoidance of doubt, Cypress shall only be entitled to CY Amount payments calculated based only fromsales occurring during the time period commencing upon the Launch Time and ending January 31, 2021.12587490.10A-PALSR01A - MSW4.2Payment. The Company will pay Cypress an amount equal to the applicable CY Amount in US Dollars as follows:(a)To the maximum extent permitted by Applicable Law, the applicable CY Amount shall be paid to Cypress as aspecial dividend on Class B Ordinary Shares. The Company shall pay such dividend every quarter within thirty(30) days after the end of each quarter. Notwithstanding the foregoing, the Company shall not be considered inbreach of this Section 4.2(a) if the delay in the payment of such dividend beyond such thirty (30) day period isdue to the delay in obtaining a regulatory approval from Governmental Authority or in preparing the financialstatements and such delay could not have been prevented by the Company using commercially reasonableefforts.(b)If all or any portion of the applicable CY Amount is not paid pursuant to Section 4.2(a) above, any such unpaidCY Amount shall be paid by the Company to Cypress as soon as permitted by Applicable Law as agreed by theParties in good faith.4.3Reporting. The Company will provide Cypress with monthly reporting for an estimate of the CY Amount no later thanthree (3) Business Days from the end of each calendar month. By the middle of the third month of each calendarquarter, the Company will also provide a “flash report” that provides an estimate of the CY Amount payment for theapplicable quarter.5.Operation and Management of the Company and any Company Subsidiary5.1Operation of the Company and any Company Subsidiary. Each Party agrees to take all actions reasonably necessary toensure that the Company and any Company subsidiary shall be operated in accordance with the terms of thisAgreement and the other Transaction Documents, including, without limitation, to vote all Securities held by it (and tocause all Securities held by its permitted Affiliate transferees under Section 9.1 to be voted) and to cause the Directorsnominated by it to vote to effect the terms hereof.5.2Board of Directors. The Company will be managed by the Board in accordance with the terms of this Agreement andApplicable Law. The Board shall consist of either three (3) or five (5) Directors, to be mutually determined by theParties in good faith. Unless otherwise agreed by the Parties in writing, (i) in the event that the Board consists of three(3) Directors, SKHYSI shall be entitled to nominate two (2) Directors, including the chairman of the Board, andCypress shall be entitled to nominate one (1) Director, and (ii) in the event that the Board consists of five (5) Directors,SKHYSI shall be entitled to nominate three (3) Directors, including the chairman of the Board, and Cypress shall beentitled to nominate two (2) Directors. The Parties shall pass all such Shareholders’ resolutions, or shall cause itsDirector nominees to pass all such Board resolutions, to effect the13587490.10A-PALSR01A - MSWaforementioned nominations so as to result in the actual appointments of the relevant Directors.5.3Removal; Reappointment of Directors. Any Director may be removed for cause in accordance with Applicable Law. Inaddition, subject to Applicable Law, each Party having the right to nominate a Director pursuant to this Section 5 shallalso have the right, in its sole discretion, to suggest a removal of such Director at any time and in such an event, theParties shall pass all such Shareholders’ resolutions to effect the aforementioned removal. In the case of a vacancy in theoffice of a Director for any reason (including removal pursuant to the preceding sentence), the vacancy shall be filled bythe Party that nominated the Director in question and the Parties shall pass all such Shareholders’ resolutions to effectthe aforementioned nomination. The Party suggesting a removal of a Director shall indemnify and reimburse theCompany for any remuneration that may become due to such Director as a result of such removal.5.4Board Meetings. Each Director shall have the authority to convene Board meetings, including the authority to specifythe time and place of such meetings. Directors shall attend Board meetings in person, provided, however, that (a) theBoard shall meet at least once during each six (6)-month period and (b) written notice of all Board meetings shall begiven not less than ten (10) Business Days in advance of each meeting (which period may be shortened by eachDirector either waiving such notice in writing or attending the applicable meeting without objection). Board meetingsshall be conducted in English and minutes of such meetings shall be prepared by the Company in English anddistributed to each Director promptly following each meeting. Proposals and reports brought before any Board meetingfor information or action (including without limitation the Company’s annual and quarterly financial statements) shall beprepared in English. The Company shall pay the reasonable travel expenses incurred by Directors in attending anyBoard meeting. Subject to Applicable Law and any contrary agreement between the Parties, (i) the venue of Boardmeetings will alternate among San Jose, California, Seoul and Hong Kong, and (ii) the first Board meeting followingthe Signing Date shall be held in San Jose, California. In addition, each Director shall be permitted to attend Boardmeetings by telephone or video-conferencing, in which case all participants shall be able to hear and be heard and shallbe present from the commencement to the close of the Board meeting. A resolution in writing signed by all directorsshall be as valid and effectual as if it had been passed at a duly convened meeting of the Board. Such resolution inwriting may consist of one or several documents in identical terms.5.5Board Quorum; Resolutions. A quorum shall be deemed to exist for purposes of Board actions so long as at least two(2) Directors are present, including at least one (1) Director appointed by each Party. Any action, determination orresolution of the Board shall require the affirmative vote of a majority of Directors present at14587490.10A-PALSR01A - MSWa meeting at which a valid quorum pursuant to this Section 5.5 is present. If a quorum is not present at a duly noticedBoard meeting under the first sentence of this Section 5.5, such meeting shall be immediately adjourned andrescheduled, solely relating to matters proposed to be discussed at the prior adjourned meeting, and notice of suchrescheduled meeting shall be delivered to each Director not less than five (5) Business Days in advance of therescheduled meeting. At such rescheduled meeting a quorum shall exist if at least two (2) Directors are present.5.6Special Consent of the Board. In addition to matters entrusted to the Board under Applicable Law and pursuant to theother provisions of this Agreement, any of the actions described in attached Exhibit 5.6 with respect to the Company orany Company subsidiary shall require the approval and consent of at least two (2) Directors, consisting of one (1)Director appointed by each of SKHYSI and Cypress, present at any meeting called and held in accordance with theterms of this Agreement. In the event of any Shareholder meeting, approval, vote or consent in connection with theactions described in Exhibit 5.6, the Parties agree to vote all Shares held by them in accordance with such SpecialBoard Approval.5.7Dividends. Unless mutually agreed by the Parties, to the extent permitted by the Applicable Law and approved by theBoard of the Company, the Parties shall cause the Company to declare and pay a dividend to the Parties quarterly. Thisdividend shall be paid in accordance with the Parties’ respective Company Interest. Without limiting the generality ofthe foregoing, the Parties shall cause their respective Director appointees to approve the maximum dividends that can bepaid, taking into account the Company’s capital needs and subject to Applicable Law.5.8Further Assurances. Each Party undertakes to the other Party that it shall cooperate in good faith and take all practicableactions, including, without limitation, the exercise of votes it directly or indirectly controls at meetings of the Board andgeneral meetings of the Company and any Company subsidiary, to ensure that the terms of this Agreement arecomplied with and to procure that the Board, the Company and any Company subsidiary comply with its respectiveobligations and that it shall do all such other acts and things as may be reasonably necessary or desirable to implementthis Agreement.5.9Executive Officers.(a)Chief Executive Officer. The Company shall have one chief executive officer (the “CEO”), who shall beresponsible for managing the overall operations and business of the Company. In addition to the powers andauthority customarily provided to a chief executive officer, the CEO shall have the authority to hire outsideadvisors as he determines appropriate, consistent with his fiduciary duties. The CEO shall be elected by theBoard from among the candidates nominated by SKHYSI.15587490.10A-PALSR01A - MSW(b)Additional Officers. The Company may have one or more additional officers (each, an “Additional Officer”),each of which shall report directly to the CEO and may be granted access to information and reports provided tothe CEO regarding the Company and its operations. Any Additional Officer shall be appointed by the CEO fora term to be determined by the CEO, subject to the right of the CEO to remove and replace such AdditionalOfficer at any time.5.10Shareholder Consents.(a)The Parties shall have the ultimate control over the Company as its Shareholders or beneficial owners inconformity with Applicable Law. As specified in any Shareholders’ resolution duly passed or adopted at theShareholders’ meetings, or as required by Applicable Law, certain matters shall be referred to, and passed upon,only by the Shareholders, and the actions, or the refusal to take actions, of the Board or the officers of theCompany shall, in all respects and at all times, be in conformity with any such resolutions and Applicable Law.Each Shareholder shall take such actions as are reasonably necessary to cause the Directors and officers of theCompany nominated by it to act in accordance with the provisions of this Section 5.10(a).(b)The Shareholders’ annual general meetings of the Company shall be called in such manner as shall be specifiedin the Articles. Extraordinary Shareholders’ meetings shall be called by the Board, or by any other personentitled to call an extraordinary Shareholders' meeting under Applicable Law, by complying with the notice andother procedures with respect thereto as shall be set forth in the Articles.(c)A quorum at any meeting of Shareholders of the Company shall be the presence, in person or by proxy, of bothShareholders, and no meeting of the Shareholders shall be validly convened or constituted unless a quorum ispresent at such meeting. If a quorum is not present at a duly noticed meeting of Shareholders of the Companyunder the first sentence of this Section 5.10(c), such meeting shall be immediately adjourned and rescheduled,solely relating to matters proposed to be discussed at the prior adjourned meeting, and notice of suchrescheduled meeting shall be delivered to each Shareholder not less than five (5) Business Days in advance ofthe rescheduled meeting. At such rescheduled meeting a quorum shall exist if SKHYSI is present. Except asotherwise provided in this Agreement, all other matters concerning Shareholders shall be determined inaccordance with the Articles or as otherwise required by mandatory provisions of Applicable Law.(d)The Parties undertake to do all things reasonably necessary, including the giving of all necessary directions totheir respective appointees on the16587490.10A-PALSR01A - MSWBoard (as the case may be) to ensure that full effect is given to the provisions of this Agreement. Withoutlimiting the generality of the foregoing, the Parties shall cause their respective Director appointees to approve,and if required by Applicable Law to recommend to the Company’s Shareholders, the maximum dividends tobe paid in accordance with Section 4.(e)Except as required by Applicable Law, in the event the Company desires to amend the Articles:(i)SKHYSI agrees to vote all Shares owned by SKHYSI, or over which SKHYSI has voting control,from time to time and at all times, in whatever manner as shall be necessary to amend the Articles asapproved by the Board, provided however that such amendment does not affect the rights of SKHYSIin a manner that is different than the effect on the rights of Cypress, and(ii)Cypress agrees to vote all Shares owned by Cypress, or over which Cypress has voting control, fromtime to time and at all times, in whatever manner as shall be necessary to amend the Articles as approvedby the Board, provided however that such amendment does not (i) affect the rights of Cypress to receivethe CY Amount, nor (ii) affect the rights of Cypress in a manner that is different than the effect on therights of SKHYSI.5.11Financial Matters.(a)Fiscal Year. The Company’s fiscal year shall end on December 31 of each year.(b)Financial Statements and Accounting Records. Financial statements for the Company, including, withoutlimitation, a balance sheet, income statement, statement of cash flows and statement of shareholders’ equity,shall be submitted by the Company to each of the Parties (a) within twenty (20) Business Days after the end ofeach fiscal quarter for such quarter, and (b) within forty-five (45) days after the end of each fiscal year for suchyear. Each of the annual financial statements shall include a narrative discussion and analysis of the results ofoperations and shall be audited and certified by an internationally recognized accounting firm (which will act asan independent auditor under the Companies Ordinance) retained by the Company, selected by the Board. Allfinancial statements shall be prepared at the cost of the Company, shall be complete and correct in all materialrespects, shall be prepared in reasonable detail and in accordance with International Financial ReportingStandards, and shall contain such financial data as the Parties may reasonably request in order to keep theParties advised of the Company’s financial status (although17587490.10A-PALSR01A - MSWinterim statements need not include footnotes and may be subject to year-end adjustments). The Company shallprovide each Party with such financial information as such Party may reasonably request for purposes ofcomplying with its periodic reporting obligations under Applicable Laws and securities and listing requirementsand regulations and shall cooperate with each Party in connection with complying with such obligationsincluding, without limitation, providing information to each Party as needed to allow such Party to prepareadditional financial statements and reconcile the Company’s financial statements with U.S. GAAP for suchpurposes. Without limiting the foregoing, the Company will provide Cypress with monthly financial reporting,which will include an unaudited income statement and balance sheet, no later than three (3) Business Days fromthe end of each calendar month.5.12Company Records.(a)During the regular office hours of the Company, and upon reasonable notice to the Company, each Party andtheir respective agents and representatives shall have (i) full access to all plants, properties, books of account,minutes, records, employees and representatives of the Company and its subsidiaries, (ii) the right to inspectsuch plants and properties and the operations thereupon from time to time and (iii) the right to make copies fromsuch books and records at such Party’s own expense. Any information obtained by the Parties through exerciseof rights granted under this Section 5.12 shall, to the extent constituting Confidential Information hereunder, besubject to the confidentiality provisions set forth in Section 6.7.(b)The Company shall (i) retain all books and records pertinent to the operations or financial results of theCompany and any of the Company’s subsidiaries and controlled Affiliates in accordance with Applicable Lawor good corporate practice until the later of seven (7) years or the expiration of the statute of limitations underApplicable Law and (ii) give each Party reasonable written notice prior to transferring, destroying or discardingany such books and records and, if any Party so requests, shall allow such Party to take possession of suchbooks and records.5.13Cypress Audit Right. The Company shall keep records in sufficient detail to enable Cypress to determine thecorrectness of CY Amount payments in accordance with Section 4. The Company shall permit said records to beinspected in accordance with Section 5.12 above. The audit shall only be for the purpose of verifying that the CYAmount payments established in Section 4 have been properly calculated. Inspections conducted under this Section5.13 shall be at Cypress’s expense, unless a variation or error in the Company’s calculations have produced anunderpayment of three percent (3%) or more for the applicable18587490.10A-PALSR01A - MSWaudited period, in which case the Company shall bear the reasonable expenses of such audit.5.14Commencement of Litigation Against a Party. Any election by the Company to commence litigation against a Partyshall first be submitted by the management of the Company to the Directors who have not been appointed by the Partyin question. These disinterested Directors shall make a written recommendation to the full Board, stating whether or notthey recommend the commencement of litigation by the Company, and the basis for this recommendation, in reasonabledetail. Each Party shall cause the Directors nominated by it to vote to effect the terms of such recommendation. Inaddition, in the event that the commencement of any other litigation is approved by the requisite number of Directorsunder this Agreement, then each Party agrees that it shall cause each of its appointed Directors to vote in favor of andratify such vote.6.Additional Covenants6.1Additional Services. The Company’s product mix roadmap will be determined by the Company’s management.Cypress may provide design services to the Company as described in Exhibit 1.18.6.2Transferred Assets. The Cypress NAND Assets shall be transferred pursuant to the Bill of Sale without anycompensation.6.3Cypress Transition Services Agreement. Cypress will provide support for the Company pursuant to the CypressTransition Services Agreement.6.4Customer Transition. Cypress and the Company will use commercially reasonable efforts to cooperate to transitionCypress NAND customers to the Company. Subject to any restrictions under Applicable Law, this cooperation willinclude joint meetings with customers as well as communications to customers informing them of the transaction andinstructing them to direct orders for NAND products to the Company rather than Cypress. Cypress will also cooperatewith the Company to support ongoing relationships with NAND customers, including cooperation between theCompany and Cypress’s regional sales teams on NAND opportunities.6.5Employee Matters.(a)Specified Employees. The Company and any Company subsidiaries shall use commercially reasonable effortsto hire employees and/or advisors necessary for the operation of the Company’s business, with suchemployment to be effective upon the Launch Time. Cypress shall provide a list of fifteen (15) Cypressemployees (or employees of a Cypress Affiliate) recommended for hire by the Company. The Company shallinterview these employees and shall offer employment to those employees19587490.10A-PALSR01A - MSWthat it desires to hire (“Candidates”). If the number of Candidates recommended for hire is less than twelve (12)or if any Candidates reject the Company’s or a Company subsidiary’s offer, as applicable, then Cypress willrecommend additional qualified employees to interview, provided, however, in the event that Cypress, using itsbest efforts, is unable to locate and recommend such qualified employees within Cypress, the Parties shalldiscuss and cooperate in good faith to identify alternative qualified non-Cypress employees. The employeesrecommended by Cypress are referred to as the “Specified Employees.” The Company’s or a Companysubsidiary’s employment offer to each Candidate shall be comparable to such Candidate’s total compensation(including benefits) at Cypress or the Cypress Affiliate (as applicable). Cypress, the Company and anyCompany subsidiaries shall use commercially reasonable efforts to encourage each Candidate to accept theCompany’s employment offer. Cypress shall use commercially reasonable efforts to provide the Company withaccess to the Specified Employees sufficient to interview and assess such Specified Employees. The Companymay determine, in its absolute discretion, that a Specified Employee will not receive an offer of employment.(b)Secondment of Employees. All employees seconded by either Party shall possess appropriate skill andexperience for the positions at the Company to which they are seconded. The Company shall bear all costs andexpenses relating to the employment by the Company of the persons assigned to it by the Parties for salaries,semi-annual bonuses, national health insurance payments, pension plan contributions and such other benefits asare agreed by the Parties (collectively, “Salaries”).(c)Employee Agreements. The Company shall require each of its employees, including employees assigned to theCompany hereunder, to execute a confidentiality and proprietary rights agreement, under which each employeeshall assign all of his or her inventions, ideas and other intellectual property created within the scope of his orher employment to the Company and shall agree to (i) maintain the confidentiality of all ConfidentialInformation disclosed by the Company or either Party to such employee and (ii) use such information solely inthe performance of his or her duties as an employee of the Company.(d)No Solicitation.(i)Each Party agrees that, during the term of this Agreement and for twelve (12) months thereafter, neithersuch Party nor any of its controlled Affiliates shall directly or indirectly employ, or solicit foremployment, any person employed (either at such time or during the six (6)-month period prior thereto)by the Company or20587490.10A-PALSR01A - MSWany of its subsidiaries who became known to such Party through the operation of the Company(excluding normal recruiting operations) or otherwise solicit, induce or attempt to induce any suchperson to terminate his or her employment relationship with the Company or any of its subsidiaries,except that any Party may continue to employ any employee of the Company who was seconded to theCompany by such Party. Notwithstanding the foregoing, (1) general solicitations not targeted to theemployees of the Company or any of its subsidiaries shall not be prohibited and (2) neither Party shall beprohibited from employing any such person who contact such Party on his or her own initiative withoutany direct or indirect solicitation by such Party.(ii)The Company agrees that, during the term of this Agreement and for twelve (12) months thereafter,neither the Company nor any of its subsidiaries shall directly or indirectly employ, or solicit foremployment, any person employed (either at such time or during the six (6)-month period prior thereto)by either Party or any of their respective Affiliates (other than the Company) who became known to theCompany through the operation of the Company (excluding normal recruiting operations) or otherwisesolicit, induce or attempt to induce any such person to terminate his or her employment relationship witheither Party or their respective Affiliates; provided that this Section 6.5(d)(ii) shall not apply to, and theCompany and its subsidiaries may employ and solicit for employment, the Specified Employees.Notwithstanding the foregoing, (1) general solicitations not targeted to the employees of either Party orany of its subsidiaries shall not be prohibited and (2) the Company shall not be prohibited fromemploying any such person who contact the Company on his or her own initiative without any direct orindirect solicitation by the Company.6.6Option Rights.(a)In the event that the volume of Wafers supplied by SKH to the Company exceeds 15,000 Wafers per month(excluding the CY Volume Wafers in such month) for at least three (3) consecutive months, SKHYSI shallhave the right, but not the obligation, to cause Cypress to sell at the Call Price (as defined below) such amountof Shares that would increase SKHYSI’s Company Interest up to 70% and reduce Cypress’s Company Interestdown to 30% (a “Partial Call”).(b)In the event that the Parties fail to agree on the extension of the term of this Agreement and the initial term ofthis Agreement expires pursuant to Section 8.1:21587490.10A-PALSR01A - MSW(i)SKHYSI shall have the right, but not the obligation, to cause Cypress to sell to SKHYSI all Sharesowned by Cypress at the Call Price (a “Complete Call”), and(ii)Cypress shall have the right, but not the obligation, to cause SKHYSI to purchase all Shares owned byCypress at the Call Price (a “Cypress Put”).For clarity, neither a Complete Call nor a Cypress Put may occur while the term of this Agreement is still activeand in effect (in accordance with Section 8).(c)In the event of a merger, acquisition or other transaction or series of related transactions whereby a single partyor affiliated group who is a competitor of SKHYSI or SKH listed on Exhibit 6.6(c) obtains direct or indirectvoting control of a majority of the voting securities of the Cypress (a “Change of Control”), SKHYSI shall havethe right, but not the obligation, to cause Cypress to sell to SKHYSI all Shares owned by Cypress at the CallPrice (a “Change of Control Call”). In the event that SKHYSI purchases Cypress’s Shares pursuant to aChange of Control Call before all CY Amount and CY January Amount payments have been made, theCompany shall pay to Cypress (or the entity surviving the Change of Control if not Cypress) an amount equal tothe amount that would have been paid to Cypress under Section 4 each quarter until all quarterly payments thatwould have been made as a CY Amount under Section 4 and the CY January Amount have been made.(d)Within ten (10) Business Days of the occurrence of an event that would entitle or require SKHYSI to purchasesome or all of the Shares owned by Cypress pursuant to Section 6.6(a), 6.6(b), or 6.6(c), the Party exercising itsoption thereunder (the “Exercising Party”) shall provide written notice (a “Call Notice”) to the other Party (the“Responding Party”) specifying the circumstances pursuant to which the Exercising Party is entitled to exercisea Partial Call, Complete Call, Change of Control Call, or Cypress Put (each, an “Option Right”), as applicable.On or prior to the fifteenth (15th) day after its receipt of a Call Notice, the Responding Party shall providewritten notice (a “Call Response”) to the Exercising Party either accepting or contesting the Exercising Party’sentitlement to the applicable Option Right.(i)In the event that the Responding Party notifies the Exercising Party in the Call Response that it acceptsthe contents of the applicable Call Notice: (A) the “Call Price” shall be an amount equal to the bookvalue of the Company’s stockholder equity based on the audited balance sheet of the Company,multiplied by the Company Interest represented by the Shares to be purchased pursuant to the22587490.10A-PALSR01A - MSWapplicable Option Right, (B) the Parties shall use their reasonable best efforts to cause the consummationof the applicable Option Right to occur as soon as reasonably practicable but not later than thirty (30)days following the date of the Call Response, subject to obtaining all required approvals and consents(including without limitation from any applicable Governmental Authority or other third party)(C) payment by SKHYSI shall be in US Dollars, and (D) the purchased Shares shall be delivered withgood title, free and clear of all liens and encumbrances; provided, that if the Parties fail to obtain withinsuch thirty (30) day period any approval or consent of a Governmental Authority or Person, which, ifnot obtained, would result in a material adverse effect on the Company, such closing period shall beextended for the minimal amount of time commercially reasonably required to obtain such approval orconsent.(ii)In the event that the Call Response contests the contents of the applicable Call Notice, the Parties shallwork together in good faith to resolve such disagreement or otherwise submit to the dispute resolutionsprocedures set forth in Section 11.2.(e)Each Party undertakes to the other Party that it shall cooperate in good faith and take all practicable actions,including, without limitation, the execution and delivery of any required share transfer form, contract note andShare certificate, as applicable, to effect any necessary Transfer pursuant to a proper Option Right under thisSection 6.6. The Parties agree that each Party will be responsible and shall each pay 50% of any stamp dutyapplicable to Transfers under this Section 6.6, provided however that the amount owed and payable by Cypressshall not exceed 0.1% of the Call Price. In the event of a change of Applicable Laws such that the statutorypercentage for the total stamp duty chargeable on the transferor and transferee is increased above 0.2% of theconsideration, Cypress’s share of the total stamp duty shall continue to be based upon the Call Price and thepercentage applicable to such Call Price shall be increased by one-half of the amount by which such totalstatutory percentage exceeds 0.2%.(f)For the avoidance of doubt, each of the Transaction Documents shall survive in accordance with their termsfollowing consummation of the transfer of the Shares pursuant to an Option Right.6.7Confidentiality.(a)Non-Disclosure/Limited Use. The Parties recognize that, in connection with the performance of this Agreement,each Party or the Company (in such capacity, the “Disclosing Party”) may disclose “Confidential23587490.10A-PALSR01A - MSWInformation” (as defined below) to the other Party or the Company (the “Receiving Party”). For purposes of thisAgreement “Confidential Information” means (i) proprietary information (whether owned by the DisclosingParty or a third party to whom the Disclosing Party owes a non-disclosure obligation) regarding the DisclosingParty’s business or (ii) information which is marked as confidential at the time of disclosure to the ReceivingParty, or if in oral form, is identified as confidential at the time of oral disclosure or is otherwise clearly intendedto be treated as confidential in light of the circumstances of the disclosure. Notwithstanding the foregoing,“Confidential Information” shall not include information which: (A) was known to the Receiving Party (andwas not subject to any confidentiality obligation) at the time of the disclosure by the Disclosing Party asindicated by the Receiving Party’s written records; (B) has become publicly known through no wrongful act oromission of the Receiving Party; or (C) has rightfully been received by the Receiving Party from a third partywithout a duty of confidentiality. The Receiving Party agrees (x) not to use any such Confidential Informationfor any purpose other than in the performance of its obligations under this Agreement or any TransactionDocument and (y) not to disclose any such Confidential Information, except (1) to its employees who arereasonably required to have the Confidential Information in connection herewith or with any of the otherTransaction Documents, (2) to its agents, representatives, lawyers and other advisers that have a need to knowsuch Confidential Information and (3) pursuant to, and to the extent of, a request or order by a GovernmentalAuthority. The Receiving Party agrees to take all reasonable measures to protect the secrecy and confidentialityof, and avoid disclosure or unauthorized use of, the Disclosing Party’s Confidential Information.(b)Remedies. Each Party acknowledges and agrees that (i) its obligations under this Section 6.7 are necessary andreasonable to protect the other Party and its business, (ii) any violation of these provisions could causeirreparable injury to the other Party for which money damages would be inadequate, and (iii) as a result, theother Party shall be entitled to obtain injunctive relief against the actual or threatened breach of the provisions ofthis Section 6.7 without the necessity of proving actual damages. The Parties agree that the remedies set forth inthis Section 6.7(b) are in addition to and in no way preclude any other remedies or actions that may be availableunder this Agreement or under Applicable Law.6.8Confidentiality of Agreement; Publicity. Each Party agrees that the terms and conditions of this Agreement and theTransaction Documents shall be treated as confidential information and that no reference thereto shall be made withoutthe prior written consent of the other Party (which consent shall not be unreasonably withheld) except (a) as required byApplicable Law including, without limitation,24587490.10A-PALSR01A - MSWby the U.S. Securities and Exchange Commission, (b) to its accountants, banks, financing sources, lawyers and otherprofessional advisors, provided that such parties undertake in writing (or are otherwise bound by rules of professionalconduct) to keep such information strictly confidential, (c) in connection with the enforcement of this Agreement, or(d) to the extent reasonably necessary in connection with a merger, acquisition or proposed merger or acquisitioninvolving one of the Parties and/or their respective Affiliates provided that this exception shall not permit the disclosureof the SKH New Supply Agreement to any then-current Person competing in the semiconductor industry against SKHor any then-current customers of SKH. The Parties will consult with each other, in advance, with regard to the terms ofall proposed press releases, public announcements and other public statements with respect to the transactionscontemplated hereby. Cypress may issue a press release following the Signing Date substantially in the form agreed bythe Parties.6.9Noncompetition. Each of SKHYSI and Cypress hereby agrees that, for so long as this Agreement remains in effect,(a) neither Party nor any of its controlled Affiliates shall, directly or indirectly, sell NAND or MCP products consistingof NAND and DRAM in competition with the Company; provided that the foregoing shall not preclude SKHYSI frommanufacturing third party NAND wafers as part of its NAND foundry business; provided further that the foregoingshall not preclude Cypress from selling NAND product units in connection with NAND product purchase ordersreceived by Cypress prior to Launch Time that have not been fulfilled as of the Launch Time or from selling NANDproducts in Cypress’s inventory as of the Launch Date.6.10Dissolution and Liquidation. In the event that either Party exercises its right to cause the Company’s dissolution andliquidation pursuant to Section 8.3(a)(iii) or 8.3(b)(iii) by delivery of written notice of such exercise to the other Partyand the Company, the Parties shall promptly (i) vote their Securities to dissolve and liquidate the Company, (ii) causethe Board to approve the Company’s dissolution and liquidation, (iii) cause the Company’s debts to be paid to theextent the Company’s assets are available to do so and cause the remaining assets to be distributed to the Parties inaccordance with the Articles, and (iv) take such other actions as may be required under Applicable Law to complete thedissolution and liquidation of the Company.7.Warranties of the Parties7.1Warranties of SKHYSI. SKHYSI hereby represents and warrants to Cypress that, as of the Signing Date, the followingstatements are and shall be true and correct:(a)Organization. SKHYSI is a company duly organized and validly existing under the laws of the Republic ofKorea, and has the corporate power and authority to enter into and perform this Agreement.25587490.10A-PALSR01A - MSW(b)Authorization. All corporate action on the part of SKHYSI necessary for the authorization, execution anddelivery of this Agreement and for the performance of all of its obligations hereunder has been taken, and thisAgreement, when fully executed and delivered, shall constitute a valid, legally binding and enforceableobligation of SKHYSI.(c)Government and Other Consents. No consent, authorization, license, permit, registration or approval of, orexemption or other action by, any Governmental Authority, or any other Person, is required in connection withSKHYSI’s execution, delivery and performance of this Agreement, or if any such consent is required SKHYSIhas satisfied the applicable requirements.(d)Effect of Agreement. SKHYSI’s execution, delivery and performance of this Agreement will not (i) violate thearticles of incorporation of SKHYSI or any provision of Applicable Law, (ii) violate any judgment, order, writ,injunction or decree of any court applicable to SKHYSI, (iii) have any effect on the compliance of SKHYSIwith any applicable licenses, permits or authorizations which would materially and adversely affect SKHYSI,(iv) result in the breach of, give rise to a right of termination, cancellation or acceleration of any obligation withrespect to (presently or with the passage of time), or otherwise be in conflict with any term of, or affect thevalidity or enforceability of, any agreement or other commitment to which SKHYSI is a party and which wouldmaterially and adversely affect SKHYSI, or (v) result in the creation of any lien, pledge, mortgage, claim,charge or encumbrance upon any assets of SKHYSI.(e)Litigation. There are no actions, suits or proceedings pending or, to SKHYSI’s knowledge, threatened, againstSKHYSI before any Governmental Authority which question SKHYSI’s right to enter into or perform thisAgreement, or which question the validity of this Agreement or any of the other Transaction Documents.7.2Warranties of Cypress. Cypress hereby represents and warrants to SKHYSI that, as of the Signing Date, the followingstatements are and shall be true and correct:(a)Organization. Cypress is a corporation duly organized and validly existing under the laws of Delaware. Cypresshas the corporate power and authority to enter into and perform this Agreement, the Cypress Transition ServicesAgreement and the Bill of Sale (collectively, the “Cypress Documents”).(b)Authorization. All corporate action on the part of Cypress necessary for the authorization, execution anddelivery of this Agreement and for the performance of all of its obligations hereunder and thereunder has beentaken, and the Cypress Documents, when fully executed and delivered,26587490.10A-PALSR01A - MSWshall each constitute a valid, legally binding and enforceable obligation of Cypress.(c)Government and Other Consents. No consent, authorization, license, permit, registration or approval of, orexemption or other action by, any Governmental Authority, or any other Person, is required in connection withCypress’s execution, delivery and performance of any of the Cypress Documents, or if any such consent isrequired Cypress has satisfied any applicable requirements.(d)Effect of Agreement. Cypress’s execution, delivery and performance of the Cypress Documents will not(i) violate the certificate of incorporation of Cypress or any provision of Applicable Law, (ii) violate anyjudgment, order, writ, injunction or decree of any court applicable to Cypress, (iii) have any effect on thecompliance of Cypress with any applicable licenses, permits or authorizations which would materially andadversely affect Cypress, (iv) result in the breach of, give rise to a right of termination, cancellation oracceleration of any obligation with respect to (presently or with the passage of time), or otherwise be in conflictwith, any term of, or affect the validity or enforceability of any agreement or other commitment to whichCypress is a party and which would materially and adversely affect Cypress, or (v) result in the creation of anylien, pledge, mortgage, claim, charge or encumbrance upon any assets of Cypress.(e)Litigation. There are no actions, suits or proceedings pending or, to Cypress’s knowledge, threatened, againstCypress before any Governmental Authority which question Cypress’s right to enter into or perform any of theCypress Documents, or which question the validity of this Agreement or any of the other TransactionDocuments.8.Term and Termination8.1Term. This Agreement shall be effective as of the Signing Date and shall continue for an initial period of five (5) years,unless earlier terminated pursuant to Section 8.2. The term of this Agreement may be extended by mutual advancewritten agreement between the Parties.8.2Termination. This Agreement may be terminated as follows:(a)Upon the mutual written agreement of the Parties.(b)By either Party, effective immediately upon written notice to the other Party (i) if any representation or warrantyof the other Party set forth herein was not true and correct in any material respect when made, or (ii) if the otherParty breaches any material provision of this Agreement or27587490.10A-PALSR01A - MSWof any of the other Transaction Documents and such breach continues for a period of thirty (30) days after thedelivery of written notice of the default, describing the default in reasonable detail.(c)By either Party, effective immediately upon written notice to the other Party and the Company, in the event thatthe other Party is dissolved, liquidated or declared bankrupt, or a voluntary or involuntary bankruptcy filing ismade by such Party.(d)At any time prior to the Launch Time, by either Party, effective immediately upon written notice to the otherParty and the Company, if: (i) a court of competent jurisdiction or other Governmental Authority shall haveissued a final and nonappealable order, decree or ruling, or shall have taken any other action, having the effectof permanently restraining, enjoining or otherwise prohibiting the consummation of the transactionscontemplated by this Agreement; or (ii) there shall be any Applicable Law or Legal Restraint enacted,promulgated, issued or deemed applicable to the consummation of the agreements contemplated by thisAgreement by any Governmental Authority that would make such consummation illegal.8.3Effect.(a)If an event described in Section 8.2(b) occurs then the non-breaching Party shall have the right to terminate thisAgreement and, at its option (subject to any limitations imposed by the court or other Governmental Authorityadjudicating such bankruptcy, dissolution or liquidation proceedings), (i) buy all of the breaching Party’sSecurities at a price equal to seventy-five percent (75%) of the FMV of such Securities, (ii) sell all of itsSecurities to the breaching Party at a price equal to one hundred twenty-five percent (125%) of the FMV ofsuch Securities, or (iii) cause the Company to be dissolved and liquidated in accordance with the proceduresdescribed in Section 6.10.(b)If an event described in Section 8.2(c) occurs, the Party that is not subject to such event shall have the right toterminate this Agreement and, at its option, (i) buy all of the other Party’s Securities at a price equal to the FMVof such Securities, (ii) sell all of its Securities to other Party at a price equal to the FMV of such Securities, or(iii) cause the Company to be dissolved and liquidated in accordance with the procedures described in Section6.10.(c)FMV shall be determined by an internationally recognized third party appraiser mutually agreed by the Parties,and if no third party appraiser is mutually agreed by the Parties within fifteen (15) days after the date of thenotice of termination pursuant to Section 8.2(b) or 8.2(c) (as applicable), then the appraisal will be conducted byDuff & Phelps, LLC.28587490.10A-PALSR01A - MSW8.4Continuing Liability; Survival. Termination of this Agreement for any reason shall not release either Party or theCompany from any liability or obligation which has already accrued as of the effective date of such termination, andshall not constitute a waiver or release of, or otherwise be deemed to prejudice or adversely affect, any rights, remediesor claims related to events, actions or inactions that occurred while this Agreement was active and in effect, whether fordamages or otherwise, which a Party or the Company may have hereunder, at law, equity or otherwise or which mayarise out of or in connection with such termination. The rights and obligations of the Parties under Sections 6.7, 6.8 (tothe extent provided therein) and Sections 8 and 11 shall survive any termination of this Agreement.8.5Return of Confidential Information. Upon the termination of this Agreement, each Party, at its own cost, shall promptlydestroy or return to the Disclosing Party any and all documents and materials constituting or containing ConfidentialInformation of the Disclosing Party which are in its possession or control, or at its option, shall destroy such documentsand materials and certify such destruction in writing to the Disclosing Party. Notwithstanding to the foregoing, theParties may retain such Confidential Information of the other Party to the extent necessary to operate the Company.9.Transfer Restrictions9.1General Restriction. For so long as this Agreement remains in effect, and except as otherwise specifically provided inthis Agreement or agreed to in writing by the other Party (or, if applicable, its successor-in-interest), each Party agreesnot to, directly or indirectly, sell, transfer, assign, hypothecate or in any way alienate (“Transfer”) any Securities, or anyright or interest therein, except to an Affiliate of such Party that is reasonably acceptable to the other Party. In the caseof any transfer permitted hereunder, the transferring Party shall deliver to the other Party (a) at least ten (10) BusinessDays prior to such transfer, a written notice stating its intention to transfer Securities, the name and share ownership ofthe Affiliate transferee, the number of Securities to be transferred, and the price and other material terms and conditionsof the transfer, and (b) on or prior to the effective date of the transfer and in a form reasonably acceptable to the otherParty and its counsel, the Affiliate transferee’s written acknowledgment of and agreement to be bound by, and to votethe transferred Securities at all times in accordance with, the terms of this Agreement.9.2Board Approval; Legends. All Transfers of Securities shall be subject to approval by the Board. Each share certificateof the Company shall bear a legend, consistent with Applicable Law, providing that any transfer of the Securitiesevidenced by such certificate is subject to approval by the Board and carrying the following statement: “Anydisposition, transfer, charge of or dealing in any other manner in the Shares represented by this certificate is restricted bya Joint Venture29587490.10A-PALSR01A - MSWAgreement dated October 23, 2018 between SK hynix system ic Inc. and Cypress Semiconductor Corporation.”9.3Use of Corporate Name; Trademarks and Logos.(a)Non-Use of Name; Trademarks; Logos. Neither Party (nor any of its controlled Affiliates) shall, either duringthe term of this Agreement or thereafter, utilize, register or seek to register the corporate name, trademarks orlogos of the other Party, or any similar corporate name, trademark or logo, for any purpose whatsoever, withoutthe prior written consent of the other Party.(b)Change of Corporate Name. In the event that either Party ceases to be a Shareholder for any reason, theremaining Shareholder(s) shall promptly, and in any event within thirty (30) days thereafter, change the name,trade name and service mark of the Company to such names and marks as do not include or incorporate all orany portion of the corporate name or logo of the departing Party and deliver evidence of such changes to thedeparting Party.(c)Use of Spansion Logo. Cypress, on behalf of Spansion LLC, hereby grants the Company the right to continueto mark the products in existence as of the Launch Time with the Spansion logo, in the same manner as Cypresswas using the Spansion logo on such products immediately prior to the Launch Time. In the event that theCompany changes the back end manufacturer from Cypress Thailand, the license granted in this Section 9.3(c)will continue for so long as the products manufactured at the new back end manufacturer continue to meet thesame level of quality as those manufactured by Cypress Thailand. Cypress may monitor the quality of theproducts by any reasonable method, including by requesting product samples from time to time, which samplesshall be supplied to Cypress by the Company free of charge.10.Indemnification10.1Indemnification. Each Party (in such capacity, the “Indemnifying Party”) shall indemnify, defend and hold harmless theother Party and each of such Party’s officers, directors, employees, shareholders and agents (each an “IndemnifiedParty”), from and against any and all claims, demands, liabilities, costs, damages, expenses (including, withoutlimitation, attorneys’ fees and expenses), and causes of action of any nature whatsoever (collectively, “Losses”) arisingfrom or in any way related to any breach of any representation, warranty, covenant, agreement or obligation made or tobe performed by the Indemnifying Party hereunder. Losses shall not include Losses to the extent caused by the grossnegligence or willful misconduct of the Indemnified Party. The obligations of each Indemnifying Party under thisSection 10.1 shall survive any termination of this Agreement.30587490.10A-PALSR01A - MSW10.2Indemnification Procedures. If any lawsuit or enforcement action is filed against an Indemnified Party with respect towhich such Indemnified Party is entitled to indemnification under this Section 10.2 or an Indemnified Party becomesaware of any fact, condition or event which may give rise to Losses for which indemnification may be sought under thisSection 10.2, then such Indemnified Party shall give notice thereof (a “Claim Notice”) to the Indemnifying Party againstwhom indemnity is sought as promptly as practicable. The failure of an Indemnified Party to give a timely Claim Noticehereunder shall not affect its rights to indemnification hereunder, except to the extent that the Indemnifying Partydemonstrates that such failure actually damaged the Indemnifying Party. If within thirty (30) days after receipt of theClaim Notice the Indemnifying Party acknowledges in writing to the Indemnified Party that Indemnifying Party isobligated under the terms of its indemnity hereunder in connection with such lawsuit or action (or that it will defendunder a reservation of rights), then the Indemnifying Party shall be entitled, at its own cost, risk and expense, (a) to takecontrol of the defense and investigation of such lawsuit or action, (b) to employ and engage attorneys of its own choiceto handle and defend the same unless the named parties to such action or proceeding include both the IndemnifyingParty and the Indemnified Party and such Indemnified Party has been advised in writing by counsel that there may beone or more legal defenses available to the Indemnified Party that are different from or additional to those available tothe Indemnifying Party, in which event, the Indemnified Party shall be entitled, at the Indemnifying Party’s cost andexpense, to retain separate counsel of its own choosing, and (c) to compromise or settle such claim, which compromiseor settlement shall be made only with the prior written consent of the Indemnified Party, such consent not to beunreasonably withheld. In connection with the Indemnifying Party’s defense of the Indemnified Party as described inthe foregoing sentence, the Indemnified Party shall (at the Indemnifying Party’s cost and expense) cooperate in allreasonable respects with the Indemnifying Party and its attorneys in the investigation, trial and defense of such lawsuitor action and any appeal arising therefrom; provided, however, that the Indemnified Party may, at its own cost,participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The Partiesshall cooperate with each other in any notifications to insurers. If the Indemnifying Party fails to assume the defense ofsuch claim within thirty (30) days after receipt of the Claim Notice, then the Indemnified Party (upon delivering noticeto such effect to the Indemnifying Party) shall have the right (but not the obligation) to undertake, at the IndemnifyingParty’s cost and expense, the defense, compromise or settlement of such claim on behalf of, and for the account and riskof, the Indemnifying Party. In the event the Indemnified Party assumes the defense of the claim, the Indemnified Partywill keep the Indemnifying Party timely informed of the progress of any such defense, compromise or settlement. TheIndemnifying Party shall be liable for any settlement of any action effected pursuant to and in accordance with thisSection 10.2 and for any final judgment (subject to any right of appeal), and the Indemnifying Party agrees to indemnifyand hold harmless the31587490.10A-PALSR01A - MSWIndemnified Party from and against any Losses by reason of such settlement or judgment.11.General Provisions11.1In addition to collaboration contemplated herein, the Parties will explore other potential collaboration opportunities forthe mutual benefits in good faith.11.2Governing Law; Dispute Resolution. The validity, construction and enforceability of this Agreement shall be governedby and construed in accordance with the laws of California. All disputes between the Parties arising out of thisAgreement shall be settled by the Parties amicably through good faith discussions upon the written request of eitherParty. In the event that any such dispute cannot be resolved thereby within a period of sixty (60) days after such noticehas been given, such dispute shall be finally settled by arbitration in San Jose, California, using the English language,and in accordance with the rules then in effect of the American Arbitration Association. The arbitrator(s) shall have theauthority to grant specific performance, and to allocate between the Parties the costs of arbitration in such equitablemanner as the arbitrator(s) may determine. The prevailing Party in the arbitration shall be entitled to receivereimbursement of its reasonable expenses incurred in connection therewith. Judgment upon the award so rendered maybe entered in any court having jurisdiction or application may be made to such court for judicial acceptance of anyaward and an order of enforcement, as the case may be. Notwithstanding the foregoing, either Party shall have the rightto institute a legal action in a court of proper jurisdiction for injunctive relief and/or a decree for specific performancepending final settlement by arbitration.11.3Notices and Other Communications. Any and all notices, requests, demands and other communications required orotherwise contemplated to be made under this Agreement shall be in writing and in English and shall be provided byone or more of the following means and shall be deemed to have been duly given (a) if delivered personally, whenreceived, (b) if transmitted by facsimile, on the second (2nd) Business Day following receipt of a transmittalconfirmation, or (c) if by international courier service, on the fourth (4th) Business Day following the date of depositwith such courier service, or such earlier delivery date as may be confirmed in writing to the sender by such courierservice. All such notices, requests, demands and other communications shall be addressed as follows:If to SKHYSI:SK hynix system ic Inc. 215 Daesin-ro Heungdeok-gu Cheongju-si Chungcheongbuk-do, 28429, Korea Attention: Head of Legal Affairs 32587490.10A-PALSR01A - MSWTelephone: Facsimile: with a copy (which copy shall not constitute notice) to:SK hynix Inc. SK u-Tower, 9, Seongnam-daero 343 beon-gil, Bundang-gu, Seongnam-si Gyeonggi-do, 13558, Korea Attention: Head of Global Legal Telephone: Facsimile: If to Cypress:Cypress Semiconductor Corporation 198 Champion Court San Jose, California 95134Attention: Chief Legal Officerwith a copy (which copy shall not constitute notice) to:Skadden, Arps, Slate, Meagher & Flom LLP525 University AvenuePalo Alto, California 94301 Attention: Mike Miesor to such other address or facsimile number as a Party may have specified to the other Party in writing delivered inaccordance with this Section 11.3.11.4Language. This Agreement is in the English language only, which language shall be controlling in all respects, and allversions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties. Allcommunications and notices to be made or given pursuant to this Agreement shall be in the English language.11.5Severability. If any provision in this Agreement shall be found or be held to be invalid or unenforceable then themeaning of said provision shall be construed, to the extent feasible, so as to render the provision enforceable, and if nofeasible interpretation would save such provision, it shall be severed from the remainder of this Agreement which shallremain in full force and effect unless the severed provision is essential and material to the rights or benefits received byeither33587490.10A-PALSR01A - MSWParty. In such event, the Parties shall use best efforts to negotiate, in good faith, a substitute, valid and enforceableprovision or agreement which most nearly effects the Parties’ intent in entering into this Agreement.11.6References; Subject Headings. Unless otherwise indicated, references to Sections and Exhibits herein are to Sections of,and Exhibits to, this Agreement. The subject headings of the Sections of this Agreement are included for the purpose ofconvenience of reference only, and shall not affect the construction or interpretation of any of its provisions.11.7Further Assurances. The Parties shall each perform such acts, execute and deliver such instruments and documents, anddo all such other things as may be reasonably necessary to accomplish the transactions contemplated in this Agreement.11.8Expenses. Each of the Parties will bear its own costs and expenses, including, without limitation, fees and expenses oflegal counsel, accountants, brokers, consultants and other representatives used or hired in connection with thenegotiation and preparation of this Agreement and consummation of the transactions contemplated hereby. All suchexpenses incurred by the Company shall be borne by the Company to the maximum extent permitted by ApplicableLaw including, without limitation, expenses relating to the formation of the Company, any transfer taxes for transfer ofthe Company stock to the Parties, registration charges, taxes, fees and expenses relating to required governmental orregulatory approvals, notary fees and legal fees and expenses.11.9No Waiver. No waiver of any term or condition of this Agreement shall be valid or binding on a Party unless the sameshall have been set forth in a written document, specifically referring to this Agreement and duly signed by the waivingParty. The failure of a Party to enforce at any time any of the provisions of this Agreement, or the failure to require atany time performance by the other Party of any of the provisions of this Agreement, shall in no way be construed to bea present or future waiver of such provisions, nor in any way affect the ability of a Party to enforce each and every suchprovision thereafter.11.10Entire Agreement; Amendments. The terms and conditions contained in this Agreement (including the Exhibits hereto)and the Transaction Documents constitute the entire agreement between the Parties and supersede all previousagreements and understandings, whether oral or written, between the Parties with respect to the subject matter hereof.No agreement or understanding amending this Agreement shall be binding upon either Party unless set forth in a writtendocument which expressly refers to this Agreement and which is signed and delivered by duly authorizedrepresentatives of each Party.11.11Assignment. Neither Party shall have the right to assign its rights or obligations under this Agreement except inconnection with a transfer of such Party’s34587490.10A-PALSR01A - MSWSecurities in a manner permitted hereunder, under terms reasonably acceptable to the non-assigning Party and providingfor the assignee to be bound by the terms hereof, and for the assigning Party to remain liable for the assignee’sperformance of its obligations hereunder. This Agreement shall inure to the benefit of, and shall be binding upon, theParties and their respective permitted successors and assigns.11.12No Agency. The Parties are independent contractors. Nothing contained herein or done in pursuance of this Agreementshall constitute either Party the agent of the other Party for any purpose or in any sense whatsoever.11.13No Beneficiaries. Nothing herein express or implied, is intended to or shall be construed to confer upon or give to anyperson, firm, corporation or legal entity, other than the Parties and their Affiliates who hold Securities, any interests,rights, remedies or other benefits with respect to or in connection with any agreement or provision contained herein orcontemplated hereby.11.14Effective Date of Transaction Documents. The Transaction Documents (other than this Agreement and the Articles)shall become effective at the Launch Time. The rights of Cypress and the restrictions on the operations of the Companyset forth in Section 5 shall not be effective until the Cypress Subscription Date.11.15Counterparts. This Agreement may be executed in any number of counterparts, and each counterpart shall constitute anoriginal instrument, but all such separate counterparts shall constitute only one and the same instrument.11.16Incidental and Consequential Damages. Neither Party nor its Affiliates will be liable to the other Party under anycontract, negligence, strict liability or other theory for any indirect, incidental or consequential damages (includingwithout limitation lost profits) with respect to a breach of this Agreement or any Transaction Document.[remainder of page left blank]IN WITNESS WHEREOF, the Parties have caused their respective duly authorized representatives to execute this Agreementas of the Signing Date.SK HYNIX SYSTEM IC INC. By: /s/ Kim Joon Ho CYPRESS SEMICONDUCTOR CORPORATION By: /s/ S. Thad Trent Exhibit ListExhibit 1.3 - Articles of AssociationExhibit 1.4 - Back-End Manufacturing Agreement – TermsExhibit 1.5 - Bill of SaleExhibit 1.17 - Cypress NAND AssetsExhibit 1.18 - Cypress Transition Services Agreement – ServicesExhibit 5.6 - Actions Requiring Special Board ApprovalExhibit 6.6(c) - List of Competitors[NOTE: Schedules (and the similar attachments listed above) to this agreement have been omitted in reliance on Regulation S-K, Item601(b)(2). The Registrant hereby undertakes to furnish supplementally a copy of any such item to the Commission upon request.]35587490.10A-PALSR01A - MSWExhibit 10.10[Cypress Letterhead]September 20, 2005Thad TrentSan Jose, CADear Thad,We are pleased to extend an offer of employment to you to join Cypress Semiconductor Corporation. Effective on the date specifiedbelow, you will become a full-time employee of the Company to serve in the position of Finance Director reporting to Jeff Osorio, VPFinance and Corporate Controller and to perform other such duties and responsibilities as may be assigned to you from time to time bythe President or the Board of Directors of the Company.In consideration for all services rendered by you in such employment you will be paid an annual salary of$180,000.00. Salary payments will be made bi-weekly. During your employment, you shall be entitled to participate in the Company'semployee fringe benefit programs, stock purchase, new product bonus, and 401(k) plans to the extent of your eligibility.You will be a participant in the Cypress Semiconductor 2005 Key Employee Bonus Program (KEBP). Effective the beginning of thequarter following your date of hire your target incentive will be 30% of base salary. Your actual incentive will be based on bothcompany and individual performance. The KEBP plan description is attached for your reference.Cypress proposes to grant to you an option to purchase 25,000 shares of its Common Stock at the fair market value of the commonstock as determined by the Board of Directors.You will also receive a $20,000.00 cash employment bonus (less withholding taxes), to be paid with your first regular paycheck . Thecash bonus shall be subject to vesting at a rate of 1/12 per month. In the event of your voluntary or involuntary termination from thecompany before completing one year of service, the unvested portion of the cash bonus shall be repaid by you in cash or by cashier'scheck to the Company within 30 days of your termination date. Cypress is hereby further authorized to apply up to the full amount ofyour final paycheck, and any other compensation due to you upon your termination, against any unvested portion of the cash bonus. Inthe event the amount owed to Cypress is not repaid in full on your last day of employment, whether by application of your finalpaycheck funds or by cash or cashier's check delivered by you to Cypress, then you will be required to complete additional securitydocuments that will allow to us to secure the unpaid obligation owed by you to Cypress. In the event of your involuntary termination ofemployment due to reduction-in-force, before you have completed one year or service, repayment of the unvested cash bonus shall bewaived. The gross bonus is considered additional income and will be included on your W-2 wage summary at the end of the year.Upon your acceptance of employment, you will sign the Company's standard Proprietary Information and Inventions Agreement.This offer is contingent upon your ability to present documents establishing your right to work in the United States as required by the1986 Federal Immigration Reform and Control Act.You hereby confirm that (i) you will not disclose or use any confidential or proprietary information or trade secrets of any prioremployer or other person in connection with your employment by the Company, (ii) you are not subject to any agreement or restrictionwhich would restrict your employment with the Company, and (iii) you have not solicited, nor has the Company requested that yousolicit, any person employed by your former employer to join the Company.U.S. Export laws require Cypress to obtain licenses for foreign nationals from certain countries (for example, Libya, Iraq) who will haveaccess to certain types of technology. If an export license is required, the U.S. government must grant that license before you arepermitted to commence your job assignment. This offer of employment may be contingent upon issuance of a license. Please contactyour Cypress Human Resources Business Partner at (408) 943-2803 if you have any questions about how the export control laws applyto your employment.The expiration date will automatically be set seven (7) days after the offer generation date. This offer is valid through 12:00 noon,September 23, 2005.Very Truly Yours,/s/ Brad BussBrad BussChief Financial Officer/s/ Lynne MaranoLynne MaranoHuman Resource Business PartnerThe foregoing is agreed to and accepted bySignature /s/ S. Thad TrentDate 9/30/05Expected Start Date 10/17/05The life insurance and long-term disability insurance programs offered by Cypress are priced according to your date of birth. To allowus to correctly prepare the benefits enrollment form for you, please tell us your birthdate:Exhibit 10.11[Cypress Letterhead]October 27, 1995Sam G. GehaIrvine, CADear Sam:We are pleased to extend an offer of employment to you to join Cypress Semiconductor Corporation in the position of Staff ModuleDevelopment Engineer reporting to Daniel Arnzen, Module Development Manager.Your initial compensation will be $79,180 annually, paid bi-weekly. Subject to Board approval, Cypress also offers you an option topurchase 6,338 shares of its Common Stock at the fair market value of the common stock as determined by the Board of Directors atthe next Board meeting following your hire date. During your employment, you will be entitled to participate in the Company'semployee fringe benefit programs, stock purchase, profit sharing 2nd 401(k) plans to the extent of your eligibility.You will also receive a cash bonus in lieu of relocation benefits of $18,000 (less withholding taxes) when you begin employment. Thiswill aid in your relocation from Irvine to the Bay Area.You will also receive a $3,200 (less withholding taxes) cash cost of living adjustment bonus when you begin your employment.We, at Cypress, look forward to having you join our team.If you wish to accept our offer of employment, please sign and return to me one copy of the enclosed offer agreement. Also, indicateyour expected start date. Should you have any questions, please feel free to call me at your convenience.This offer is valid through 12:00 noon, Friday, November 3, 1995.Very truly yours,/s/ A.R. AlvarezA.R. AlvarezVice President, Research & DevelopmentARA/bvs[Cypress Letterhead]October 27, 1995Sam G. GehaIrvine, CADear Sam:This is to confirm our understanding with respect to your employment with Cypress (the 'Company'):1. Effective on the date specified below, you will become a full-time employee of the Company to serve in the position of Staff ModuleDevelopment Engineer reporting to Daniel Arnzen, Module Development Manager and to perform other such duties and responsibilitiesas may be assigned to you from time to time by the President or the Board of Directors of the Company.2. In consideration for all services rendered by you in such employment, you will be paid an annual salary of $79,180. Salary paymentswill be made bi-weekly. During your employment, you shall be entitled to participate in the Company's employee fringe benefitprograms, stock purchase, profit sharing and 401(k) plans to the extent of your eligibility.3. Subject to Board approval, Cypress proposes to grant to you an option to purchase 6,338 shares of its Common Stock at the fairmarket value of the common stock as determined by the Board of Directors at the next Board Meeting following your hire date.4. You will also receive a cash bonus in lieu of relocation benefits of $18,000 (less withholding taxes) when you begin employment.This will aid in your relocation from Irvine to the Bay Area. In the event of your voluntary termination of employment from theCompany before completing one year of service, the cash bonus and any Cypress-paid or reimbursed expenses that are a direct result ofyour relocation shall be repaid, in full, by you to the Company. Should you otherwise leave the Company during your first year ofemployment the cash bonus and any Cypress-paid or reimbursed expenses shall be subject to vesting at a rate of 1/12 per month. Thegross bonus and Cypress-paid or reimbursed expenses are considered additional income and will be included on your W-2 wagesummary at the end of the year.5. You will also receive a $3,200 cash cost of living adjustment bonus (less withholding taxes) when you begin your employment. Inthe event of your voluntary termination of employment from the Company before completing two years of service, the cash bonus shallbe repaid, in full, by you to the Company. Should you otherwise leave the Company during your first two years of employment, thecash bonus shall be subject to vesting at a rate of 1/24 per month. The gross bonus is considered additional income and will be includedon your W-2 wage summary at the end of the year.6. Upon your acceptance of employment, you will sign the Company's standard Proprietary Information and Inventions Agreement.7. This offer is contingent upon your ability to present documents establishing your right to work in the United States as required by the1986 Federal Immigration Reform and Control Act.8. You hereby confirm that (i) you will not disclose or use any confidential or proprietary information or trade secrets of any prioremployer or other person in connection with your employment by the Company, (ii) you are not subject to any agreement or restrictionwhich would restrict your employment with the Company, and (iii) you have not solicited, nor has the Company requested that yousolicit, any person employed by your former employer to join the Company.Very truly yours,CYPRESS SEMICONDUCTOR CORPORATION/s/ A.R. AlvarezA.R. AlvarezVice President, Research & DevelopmentApproved: /s/ John HuHuman Resources Business PartnerThe foregoing is agreed to and accepted by me:/a/ Sam Geha 11/3/95Signature Date11/27/95Expected Start Date Date of Birth(for benefits calculations)ARA/bvsExhibit 10.12[Cypress Letterhead]February 26, 2008Sudhir GopalswamyPleasanton, CADear Sudhir,We are pleased to extend an offer of employment to you to join Cypress Semiconductor Corporation Effective on the date specifiedbelow, you will become a full-time employee of the Company to serve in the position of Senior Product Marketing Director, reportingto David Kranzler, Vice President and to perform other such duties and responsibilities as may be assigned to you from time to time bythe President or the Board of Directors of the Company.In consideration for all services rendered by you in such employment, you will be paid an annual salary of $200,000.00. Salarypayments will be made bi-weekly. During your employment, you shall be entitled to participate in the Company's employee fringebenefit programs, stock purchase, new product bonus, and 401(k) plans to the extent of your eligibility.Cypress is pleased to offer you a grant of 12,500 Restricted Stock Units (RSUs). RSUs are a promise by the company to give you sharesof common stock in the future, provided your employment is continuous. Your RSUs will vest over five years at the rate of 1/5 (20%)per year as of the anniversary of the vesting date. Vesting begins as of your hire date. You will need to accept this RSU grant throughthe on-line web page at E*TRADE https://us.etrade.com/e/tlwelcome/employeestockplans. The acceptance of the grant must becompleted within 60 days of issuance. RSUs have no exercise price and therefore always have value. The value of each RSU is equal tothe value of one share of Cypress's stock once vested (less any applicable taxes and withholdings). Vested RSUs remain yours for aslong as you hold the shares, even if the company no longer employs you. You may sell them immediately upon vest or hold onto themfor however long you like. In the latter case, you bear the risk of the stock declining in price and your shares losing value.You will be a participant in the Cypress Semiconductor 2008 Key Employee Bonus Program (KEBP). Effective the beginning of thequarter following your date of hire your target incentive will be 30% of base salary. Your actual incentive will be based on bothcompany and individual performance.As a Cypress employee, you are required to follow all of Cypress' specifications, policies, and practices. Among many other things, thisincludes (but is not limited to) your responsibility to follow Cypress' Code of Business Conduct and Ethics. Within the first 30 days ofyour Cypress employment you are required to be trained on the Code of Business Conduct and Ethics. The training is online and isavailable through Cypress University (CYU) on the Cypress Intranet. Within the first 30 days of your Cypress employment you arerequired to take and successfully complete the Workplace Harassment Training. The training is online and is available through CypressUniversity (CYU) on the Cypress Intranet.Your employment with Cypress will be at-will. This means that both you and Cypress can end your employment at any time, whetheror not there is cause or notice. No one other than the Chief Executive Officer and the Vice President of human Resources has theauthority to change this arrangement or to make any agreement contrary to this. Any such agreement must be in writing, must be signedby the Chief Executive Officer and the Vice President of Human Resources, and must express a clear intent to alter the at-will nature ofyour employment relationship.Upon your acceptance of employment, you will sign the Company's standard Proprietary Information and Inventions Agreement. Thisoffer is contingent upon your ability to present documents establishing your right to work in the United States as required by the 1986Federal Immigration Reform and Control Act.You hereby confirm that (i) you will not disclose or use any confidential or proprietary information or trade secrets of any prioremployer or other person in connection with your employment by the Company, (ii) you are not subject to any agreement or restrictionwhich would restrict your employment with the Company, and (iii) you have not solicited, nor has the Company requested that yousolicit, any person employed by your former employer to join the Company.U.S. Export laws require Cypress to obtain licenses for foreign nationals from certain countries (for example, Libya, Iraq) who will haveaccess to certain types of technology. If an export license is required, the U.S. government must grant that license before you arepermitted to commence your job assignment. This offer of employment may be contingent upon issuance of a license. Please contactyour Cypress Human Resources Business Partner at (408) 544-1007 if you have any questions about how the export control laws applyto your employment.This offer is valid through 12:00 noon, March 3, 2008.Very Truly Yours,/s/ Dinesh RamanathanDinesh RamanathanExecutive Vice President, Data Communications Division/s/ Roy MalatestaRoy MalatestaHuman Resources Business Partner Manager Sr.I accept Cypress' offer of at-will employment and agree to all of the terms described in this Letter:Signature /s/ Sudhir GopalswamyDate 3/10/08Expected Start Date 04/02/08Please provide your preferred name, if any, so that we may order a cubicle/office name plate and for your Cypress email account: First Name: Sudhir Last Name Gopalswamy @cypress.comExhibit 10.13[Cypress Letterhead]January 15, 2015Pam TondreauDanville, CaliforniaDear Pam,We are pleased to extend an offer of employment to you to join Cypress Semiconductor Corporation. Effective on the date specifiedbelow, you will become a full-time employee of the Company to serve in the position of Senior Vice President and General Counselreporting to Paul Keswick, Executive Vice President and to perform other such duties and responsibilities as may be assigned to youfrom time to time by the President or the Board of Directors of the Company.In consideration for all services rendered by you in such employment, you will be paid based on an annual salary of $260,000. Salarypayments will be made bi-weekly. During your employment, you shall be entitled to participate in the Company's employee fringebenefit programs, stock purchase and 401(k) plans to the extent of your eligibility.You will be a participant in the Cypress Semiconductor 2015 Key Employee Bonus Program (KEBP). Your target incentive will be 50%of the base salary. Your participation starts on your hire date. Your actual incentive will be based on both company and individualperformance.You have been granted 25,000 Performance Based Restricted Stock Units (PARS) under our Company’s PARS program. All RSUsawarded under and are subject to this Plan. The Compensation Committee will set the 2015 performance milestones and vestingschedule required for the 2015 PARS targets in Q1, 2015. You may be eligible to earn your 2015 PARS if the performance milestonesare achieved by the end of the 2015 fiscal year. The terms and conditions will be outlined in the PARS agreement which will bedelivered in Q1, 2015.Subject to the approval of the Compensation Committee, Cypress offers you a grant of 90,000 Restricted Stock Units (RSUs). RSUs area promise by the company to give you shares of common stock in the future, provided your employment is continuous. Your RSUs willvest over five years at the rate of 1/5 (20%) per year as of the anniversary of your hire date. RSUs have no exercise price and thereforealways have value. Once vested, the value of each RSU is equal to the value of one share of Cypress’s stock as reported on theNASDAQ. Upon vest, any applicable taxes will be withheld in the form of shares, or you will be required to sell enough shares to paythe taxes required to be withheld, or you will need to use cash from external sources to satisfy the tax requirements. Vested RSUsremain yours for as long as you hold the shares, even if the company no longer employs you. You may sell them immediately uponvest or hold onto them for however long you like. In the latter case, you bear the risk of the stock declining in price and your shareslosing value.Your entire grant will begin vesting on your hire date. You must accept your stock grant through the on-line acceptance at E*TRADE(https://us.etrade.com/e/t/home). The acceptance of your grant must be completed within sixty (60) days of E*TRADE’s emailnotification to you that “You have a New Grant”.Within the first 30 days of your Cypress employment you are required to be trained on the Code of Business Conduct and Ethics. Thetraining is online and is available through Cypress University (CYU) on the Cypress Intranet.Within the first 30 days of your Cypress employment you are required to take and successfully complete the Workplace HarassmentTraining. The training is online and is available through Cypress University (CYU) on the Cypress Intranet.Your employment with Cypress will be at-will. This means that both you and Cypress can end your employment at any time, whetheror not there is cause or notice. No one other than the Chief Executive Officer and the Executive Vice President of Human Resources hasthe authority to change this arrangement or to make any agreement contrary to this. Any such agreement must be in writing, must besigned by the Chief Executive Officer and the Executive Vice President of Human Resources, and must express a clear intent to alterthe at-will nature of your employment relationship.This offer is contingent upon your ability to present documents establishing your right to work in the United States as required by the1986 Federal Immigration Reform and Control Act.Upon your acceptance of employment, you will sign the Company's standard Proprietary Information and Inventions Agreement andthe Hiring Non Disclosure Agreement.You hereby confirm that (i) you will not disclose or use any confidential or proprietary information or trade secrets of any prioremployer or other person in connection with your employment by the Company, (ii) you are not subject to any agreement or restrictionwhich would restrict your employment with the Company, and (iii) you have not solicited, nor has the Company requested that yousolicit, any person employed by your former employer to join the Company.U.S. Export laws require Cypress to obtain licenses for foreign nationals from certain countries (for example, Libya, Iraq) who will haveaccess to certain types of technology. If an export license is required, the U.S. government must grant that license before you arepermitted to commence your job assignment. This offer of employment may be contingent upon issuance of a license. Please contactyour Cypress HR Generalist at 408/432-7001 if you have any questions about how the export control laws apply to your employment.This offer is valid through 12:00 noon, January 22, 2015.Very truly yours,/s/ Paul KeswickPaul KeswickExecutive Vice President/s/ Sriramachandrudu VSriramachandrudu VHuman Resource GeneralistI accept Cypress’ offer of at-will employment and agree to all of the terms described in this letter:Signature /s/ P. TondreauDate 1-21-15Expected Start Date 1-22-15Please provide your preferred name, if any, so that we may order a cubicle/office name plate and for your Cypress e-mail account:First Name: Pamela Last Name: Tondreau @cypress.comIn addition to the email address selected above, employees are assigned four letter “Cypress Initials” which are used for a variety ofpurposes during your employment. To assist in the selection of your Cypress Initials, please provide your preferred four (4) letterinitials below:Option #1 PLT Option #2 ________ Option #3 ________Exhibit 10.2.4NOTICE OF GRANT OF RESTRICTED STOCK UNITSCongratulations! You have been granted an Award of Restricted Stock Units ("RSUs") under the Cypress SemiconductorCorporation 2013 Stock Plan, as amended, and any applicable sub-plan thereto for your country (collectively, the "Plan"), as follows:PARTICIPANT NAME: [name]PARTICIPANT ID: [ID#]NUMBER OF RSUs GRANTED: [number]Each RSU is equivalent to one Share of Common Stock of Cypress Semiconductor Corporation (the "Company") for purposesof determining the number of Shares subject to this Award. The RSUs are subject to forfeiture prior to vesting. None of the RSUs willvest (nor will you have the rights of a stockholder with respect to the underlying Shares) until you satisfy the vesting conditionsdescribed below and in the Restricted Stock Unit Agreement accompanying this notice (the "RSU Agreement"). The number ofunvested RSUs and underlying Shares is subject to adjustment under Section 16 of the Plan (such as in connection with a stock split orspin-off). Unless otherwise defined in this Notice of Grant of Restricted Stock Units (this "Notice of Grant"), capitalized words that aredefined in the Plan or the RSU Agreement have the meanings given to them in the Plan or RSU Agreement, as applicable. Additionalterms of this grant are as follows:GRANT NUMBER: [number]GRANT DATE: [date]VESTING BASE DATE: [date]VESTING SCHEDULE: [For Directors' Annual Awards: All of theRSUs vest the day before the next annual stockholders meeting of CypressSemiconductor Corporation.]1RSUs Scheduled to Vest Vesting Date[number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date]You acknowledge and agree that this Notice of Grant (including the vesting schedule above) does not constitute an express orimplied promise of continued engagement as an Employee, Consultant or Director for the vesting period, for any period, or at all. [ForDirectors Only: In addition, this Notice of Grant shall not in any way be construed or interpreted so as to affect adversely or otherwiseimpair the right of the Company or the stockholders to remove a Director from the Board at any time in accordance with the provisionsof applicable law.]You will not receive any Shares upon vesting unless and until satisfactory arrangements (as determined by the Administrator)have been made with respect to the collection of all Tax-Related Items that the Company or your Employer determines must bewithheld with respect to such Shares to be delivered upon the vesting of the RSUs. Currently, you can view the tax withholdingcollection method(s) that the Administrator has made available to you, including the default collection method (and if applicable youmay be able to select an alternate method) by accessing your Plan account at www.ETRADE.com.The Company's online acceptance procedure requires that you open each of the linked documents in order to proceed toacceptance.Please confirm your acceptance of this Award by clicking the "Accept" (or similar wording) button on the awardacceptance screen of your Plan account at www.ETRADE.com. If you wish to reject this award, you must so notify the Company'sStock Plan Administrator in writing to stockadmin@cypress.com no later than sixty (60) days after the grant date shown above. Ifwithin such sixty (60) day period you neither affirmatively accept nor affirmatively reject this Award, you will be deemed to haveaccepted this Award at the end of such sixty (60) day period pursuant to the terms and conditions set forth in this Notice of Grant, theRSU Agreement, and the Plan.By your acceptance of this Award:•you acknowledge receiving and reviewing this Notice of Grant, the RSU Agreement, the Plan, and the Company's relatedProspectus;2•you agree that the RSUs are granted under and governed by the terms and conditions of, and you agree to be bound by theterms of, this Notice of Grant, the RSU Agreement, and the Plan;•you agree to accept as binding, conclusive, and final all decisions or interpretations of the Plan Administrator upon anyquestions relating to the Plan and this Award; and•you consent to the collection, use and transfer, in electronic or other form, of your personal data as described in theRSU Agreement for the purpose of implementing, administering and managing your participation in the Plan.This Notice of Grant shall be construed and determined in accordance with the laws of the U.S. State of Delaware (withoutgiving effect to the conflict of laws principles thereof) and upon acceptance shall be deemed to have been executed and delivered bythe parties hereto as of the grant date shown above.3CYPRESS SEMICONDUCTOR CORPORATION2013 STOCK PLAN, AS AMENDEDRESTRICTED STOCK UNIT AGREEMENT1. Grant. Cypress Semiconductor Corporation (the "Company") hereby grants to the Participant named in the Notice of Grant ofRestricted Stock Units (the "Notice of Grant") an Award of Restricted Stock Units ("RSUs"), as set forth in the Notice of Grant andsubject to the terms and conditions in this Restricted Stock Unit Agreement ("Agreement"), in the Company's 2013 Stock Plan, asamended, and in any applicable sub-plan for the Participant's country (such plan and any such sub-plan, collectively, the "Plan"). Asub-plan is applicable to this Award if, but only if, the country-specific terms for the Participant's country as set forth in Appendix Astate that this Award is granted under or subject to such sub-plan. Unless otherwise defined herein, capitalized terms used but notdefined in this Agreement shall have the meanings given to them in the Plan.2. Company's Obligation. Each RSU represents the right of the Participant to receive a Share of Common Stock of the Company onthe date on which all applicable vesting conditions established by the Notice of Grant, this Agreement, and the Plan have been satisfied(the "Vesting Date"). Unless and until RSUs vest, the Participant will have no right to receive Shares (or any other payment) inconnection with such RSUs. Prior to actual distribution of Shares in settlement of any vested RSUs, such RSUs represent an unsecuredobligation of the Company, payable (if at all) only from the general assets of the Company.3. Vesting Schedule and Vesting Conditions. Subject to Section 4 below, the RSUs awarded by this Agreement shall vest and becomenon-forfeitable in accordance with the vesting schedule specified in the Notice of Grant (the "Vesting Schedule"). With respect to eachscheduled Vesting Date, the Participant's Continuous Status as an Employee, Consultant or Director from the grant date specified inthe Notice of Grant (the "Date of Grant") until such Vesting Date is a condition to the vesting of the RSUs scheduled to vest on suchdate. Employment or service for only a portion of such vesting period, even if a substantial portion, will not entitle the Participant toany proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment orservices as provided in Section 4 below or in the Plan.4. Forfeiture upon Termination as an Employee, Consultant or Director; Leaves of Absence.(a) Forfeiture upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the Notice of Grant, if theParticipant's Continuous Status as an Employee, Consultant or Director ceases for any or no reason after the Date of Grant but prior toa Vesting Date, any unvested RSUs awarded by this Agreement will thereupon be forfeited at no cost to the Company and, ifapplicable, at no cost to the Company affiliate that actually employs or otherwise engages the Participant (the "Employer"). Neither theParticipant nor any of the Participant's successors, heirs, assigns or personal representatives shall have any rights or interests in anyRSUs that are forfeited pursuant to any provision of this Agreement or the Plan.4(b) Unpaid Leaves of Absence. Unless otherwise provided by the Administrator (such as in a leave of absence vesting policy orotherwise) and subject to compliance with all applicable laws, in the event the Participant takes an approved but unpaid leave ofabsence ("LOA") from the Company or the Employer (as applicable), each Vesting Date that has not occurred as of thecommencement of such LOA shall be tolled for the number of calendar days that the Participant is on such LOA. (For example, if thenext scheduled Vesting Date is July 1 and prior to that date the Grantee takes a LOA spanning 20 calendar days, that Vesting Dateshall (unless otherwise provided by the Administrator) be tolled for 20 days and shall become July 21 and all future Vesting Dates shallbe similarly rescheduled).5. Settlement in Shares after Vesting. Subject to Section 17 (regarding tax matters), any RSUs that vest in accordance with thisAgreement will be settled by delivery of Shares to the Participant (or in the event of the Participant's death, to his or her estate) as soonas practicable after (and in no case more than seventy-four days after) the date such RSUs vest and become non-forfeitable.6. Payments after Death. Any distribution or delivery to be made to the Participant under this Agreement will, if the Participant is thendeceased, be made to the administrator or executor of the Participant's estate. Any such administrator or executor must furnish theCompany with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validityof the transfer and compliance with any laws or regulations pertaining to said transfer.7. Rights as Stockholder. Neither the Participant nor any person claiming under or through the Participant will have any of the rights orprivileges of a stockholder of the Company (including, without limitation, voting and dividend rights) in respect of any Sharesdeliverable hereunder unless and until certificates (or book-entry positions) representing such Shares have been issued, recorded on therecords of the Company or its transfer agents or registrars, and delivered to the Participant or the Participant's broker.8. No Effect on Employment or Status.(a) If the Participant is employed in the United States, (1) the Participant's employment or other service relationship with the Companyor the Employer is on an at-will basis only and accordingly, the terms of the Participant's employment or other service relationship withthe Company or the Employer will be determined from time to time by the Company or the Employer, and the Company or theEmployer will have the right, which is hereby expressly reserved, to terminate or change the terms of the employment or other servicerelationship of the Participant at any time for any reason whatsoever, with or without good cause or notice; and (2) the Participantunderstands and agrees that the vesting of the RSUs subject to this Award pursuant to Section 3 above is subject to the Participant'scontinuing in the employ or service of the Company or the Employer through each applicable Vesting Date.(b) This Agreement shall not in any way be construed or interpreted so as to affect adversely or otherwise impair the right of theCompany or the stockholders to remove a Director from the Board at any time in accordance with the provisions of applicable law.59. Address for Notices. (a) Any notice to be given to the Company under the terms of this Agreement will be addressed to theCompany at 198 Champion Court, San Jose, California 95134-1599, Attn: Stock Administration, or at such other address as theCompany may hereafter designate in writing or electronically. (b) Any notice to be given to the Participant under the terms of thisAgreement will be addressed to the Participant's address appearing on the books of the Company or to the Participant's residence or tosuch other address as may be designated in writing by the Participant. Notices may also be delivered to the Participant, during his orher employment, through the Company's inter-office or electronic mail systems.10. Grant is Not Transferable. Except to the limited extent provided in Section 6 of this Agreement, this grant and the rights andprivileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law orotherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under anyexecution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null andvoid.11. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be bindingupon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.12. Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the listing, registration orqualification of the Shares upon any securities exchange or under any state, federal, or foreign law, or the consent or approval of anygovernmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Participant (or his or herestate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effectedor obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet therequirements of any such U.S. state or federal law or securities exchange and to obtain any such consent or approval of any domesticgovernmental authority.13. Plan Governs. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. The Participant has beenprovided a copy of the Plan and has had an opportunity to review the Plan and shall be bound by all the terms and provisions of thePlan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions ofthe Plan, the provisions of the Plan will govern.14. Administrator Authority. The Administrator will have the power to interpret the Plan, this Agreement, and the Notice of Grant andto adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret orrevoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken andall interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company,and all other interested persons. No member of the Administrator will be personally liable for any action, determination, orinterpretation made in good faith with respect to the Plan or this Agreement.615. Additional Terms for Participants Providing Services Outside the United States. To the extent the Participant provides (or provided,subsequent to the vesting base date set forth in the Notice of Grant) services to the Company or the Employer in a country other thanthe United States, the RSUs shall be subject to such additional or substitute terms as are set forth for such country in Appendix Aattached hereto.16. Data Privacy. The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronicor other form, of the Participant's personal data as described in this Agreement by and among, as applicable, the Employer and theCompany and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing theParticipant's participation in the Plan.The Participant understands that the Company and the Employer may hold certain personal information about the Participant,including, but not limited to, the Participant's name, home address and telephone number, date of birth, social insurance number,passport number, or other identification number, salary, nationality, job title, any shares of stock or directorships held in theCompany, details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in theParticipant's favor, for the purpose of implementing, administering and managing the Plan ("Data").The Participant understands that Data may be transferred to such stock plan service provider (or providers) as may be selected bythe Company which is (or are) assisting in the implementation, administration and management of the Plan and awards grantedthereunder. The Participant understands that these recipients of Data may be located in the United States, or elsewhere, and thatthe recipients' country (e.g., the United States) may have different data privacy laws and protections than the Participant's country.The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Databy contacting the Participant's local human resources representative. The Participant hereby authorizes the Company and anyother possible recipients which may assist the Company (presently or in the future) with implementing, administering andmanaging the Plan and awards granted thereunder to receive, possess, use, retain and transfer the Data, in electronic or otherform, for the sole purpose of implementing, administering and managing the Participant's participation in the Plan.The Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or herparticipation in the Plan. The Participant understands that he or she may, at any time, view Data, request additional informationabout the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein,in any case without cost, by contacting in writing the Participant's local human resources representative. The Participantunderstands, however, that refusing or withdrawing his or her consent may affect the Participant's ability to participate in the Planand the Participant's continued eligibility for this Award or eligibility to be granted any other awards under the Plan. For moreinformation on the consequences of the Participant's refusal to consent or withdrawal7of consent, the Participant understands that he or she may contact his or her local human resources representative.17. Responsibility for Taxes.(a) Regardless of any action the Company or the Employer takes with respect to any and all income or withholding tax (includingfederal, state and local tax), social insurance, payroll tax, payment on account or other tax-related items related to the Participant'sparticipation in the Plan and legally applicable to him or her ("Tax-Related Items"), the Participant acknowledges that the ultimateliability for all Tax-Related Items is and remains the Participant's responsibility and may exceed the amount, if any, actually withheldby the Company and/or the Employer. The Participant further acknowledges that the Company and/or the Employer (1) make norepresentations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, includingthe grant of the RSUs, the vesting of RSUs, the issuance of Shares, the subsequent sale of any Shares acquired under the Award andthe receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the Award or any aspect ofthe RSUs to reduce or eliminate the Participant's liability for Tax-Related Items or achieve any particular tax result. Further, if theParticipant has become subject to tax in more than one jurisdiction between the Date of Grant and the date of any taxable or taxwithholding event, as applicable, the Participant acknowledges that the Company and/or the Employer (or former employer, asapplicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.(b) Prior to any relevant taxable or tax withholding event, as applicable, the Participant shall pay or make adequate arrangementssatisfactory to the Company and/or the Employer to satisfy all Tax-Related Items that the Company determines it or the Employer isrequired to withhold under applicable laws with respect to the RSUs. In this regard, the Participant authorizes the Company and/or theEmployer, or their respective agents, to satisfy the obligation with regard to all Tax-Related Items by any one or a combination of thefollowing methods: (1) by requiring the Participant to pay such amount in cash or by check; (2) by deducting such amount out ofwages or any other cash compensation otherwise payable to the Participant by the Company and/or the Employer; (3) by withholding(and/or reacquiring) a number of Shares issuable (or issued) in payment of the RSUs having a Fair Market Value equal to suchamount; (4) by requiring the Participant to deliver to the Company already owned shares of Common Stock having a Fair MarketValue equal to such amount; and/or (5) withholding such amount from the proceeds of a sale of a sufficient number of Shares issuedupon vesting of the RSUs ("Sell-To-Cover") either through a voluntary sale or through a mandatory sale arranged by the Company (onthe Participant's behalf pursuant to this authorization). For these purposes, the Fair Market Value of any Shares to be withheld orrepurchased, as applicable, shall be determined on the date that Tax-Related Items are to be determined. To the extent any of the abovemethods involves a sale of Shares, the Participant acknowledges that neither the Company nor its designated broker is obligated toarrange for such sale of Shares at any particular price.To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering minimumstatutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholdingin Shares, for tax purposes, the Participant is deemed to have been issued the full number of Shares subject to the vested portion8of the RSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due asa result of any aspect of the Participant's participation in the Plan.(c) The Participant shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employermay be required to withhold as a result of the Participant's receipt of RSUs, the vesting of RSUs, or the issuance of Shares that cannotbe satisfied by the means previously described. The Company may refuse to deliver Shares to the Participant if the Participant fails tocomply with the Participant's obligations in connection with Tax-Related Items as described in this Section 17.(d) The Participant understands that the Company may allow the Participant to select a tax withholding collection method and that, ifno selection is made, the default collection method may be Sell-To-Cover. In that default case and/or if the Participant subsequentlyselects Sell-To-Cover (or the related "same-day sale" alternative), the Participant hereby agrees and instructs that a sufficient number ofShares issued in payment of RSUs that become non-forfeitable shall be sold by the Company's designated brokerage firm on theParticipant's behalf and for the Participant's account pursuant to this authorization on or as soon as administratively possible after thedate of issuance. This paragraph is intended as a trading plan meeting the requirements of Rule 10b5-1(c)(1)(i) under the U.S.Securities Exchange Act of 1934, as amended. The Participant hereby represents and warrants that (a) at the time of entering into thisAgreement and trading plan and at the time of making any subsequent Sell-To-Cover or "same-day sale" election constituting a tradingplan hereunder, he or she is not aware of any material, nonpublic information regarding the Company or its securities and (b) he or sheis entering into this Agreement and any such trading plan in good faith and not as part of a plan or scheme to avoid the prohibitions ofRule 10b5-1. The Participant agrees (i) never to directly or indirectly communicate any material, non-public information regarding theCompany to the Company's designated brokerage firm or any employee or affiliate thereof and (ii) at any time an above trading plan isin effect, (x) not to influence how, when, or whether the Shares are sold (other than by selecting a different tax withholding collectionmethod that does not involve sale of Shares, which is equivalent to terminating the trading plan), and (y) not to enter into or alter acorresponding hedging transaction or position with respect to the Shares. The Participant agrees that he or she will not change the taxwithholding collection method to Sell-To-Cover (or to the related "same-day sale" alternative) at a time when he or she would beprohibited from trading under the Company's Insider Trading Policy (as defined below).18. Miscellaneous.(a) Headings. The headings in this Agreement are provided for convenience only and are not to serve as a basis for interpretation orconstruction of, and shall not constitute a part of, this Agreement.(b) Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to thisAward or future Awards that may be made under the Plan (or other Company equity plans) by electronic means, request theParticipant's consent to participate in the Plan (or other Company equity plans) by electronic means, or deliver vested Shares by book-entry to the Participant's account at a brokerage selected by the Company. The Participant hereby9consents to receive such documents by electronic delivery, authorizes vested shares to be delivered to such a brokerage account bybook-entry, and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company ora third-party brokerage designated by the Company.(c) Section 409A. This Agreement and the Award are intended to comply with or be exempt from, as the case may be, Section 409Aof the Code so as to not result in any tax, penalty or interest thereunder. This Agreement and the Award shall be construed andinterpreted accordingly. Except for the Company's tax withholding rights, the Participant shall be solely responsible for any and all taxliability with respect to the Award.(d) Invalid Provision. The invalidity or unenforceability of any particular provision hereof shall not affect the other provisions hereof,and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.(e) Governing Law/Choice of Venue.(1)This Agreement and the rights of the Participant hereunder shall be construed and determined in accordance with the laws ofthe State of Delaware (without giving effect to the conflict of laws principles thereof).(2)For the purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by theAward or this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California wherethis grant is made and/or to be performed and agree that such litigation shall be conducted only in the courts of Santa ClaraCounty, California, or the federal court of the United States for the Northern District of California, and no other courts.(f) Imposition of Other Requirements. If the Participant relocates to another country after the Date of Grant, the Company reserves theright to impose other requirements on the Participant's participation in the Plan, to the extent the Company determines it is necessary oradvisable in order to comply with local law or facilitate the administration of the Plan, and to require the Participant to sign anyadditional agreements or undertakings that may be necessary to accomplish the foregoing.(g) No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Participant's participation in the Plan, or the Participant's acquisition or sale of the underlying Shares.The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or herparticipation in the Plan before taking any action related to the Plan.(h) Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges and agrees that he or she is subject to theCompany's Amended and Restated Insider Trading Policy as may be amended from time to time (the "Insider Trading Policy")including its restrictions that extend for a limited period of time after the Participant's termination of service. In addition, the Participantunderstands that he or she may be subject to insider trading restrictions under securities laws, market10abuse laws, and/or other similar laws, and such restrictions may affect his or her ability to acquire or sell Shares or rights to Shares. TheParticipant acknowledges that it is the Participant's responsibility to comply with such Company policies and any additional restrictionsthat may apply under applicable laws with respect to the Participant's acquisition, holding, and any disposition of Shares or rights toShares. (i) Recoupment. Notwithstanding any other provision herein, any recoupment or "clawback" policies adopted by the Board or theAdministrator and applicable to equity awards, as such policies are in effect from time to time, shall apply to this Award, any Sharesthat may be issued in respect of this Award, and any proceeds (including dividends and sale proceeds) of such Shares.(j) Entire Agreement. This Agreement, the Notice of Grant, and the Plan contain the entire agreement and understanding of the partieshereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations andnegotiations in respect thereto.(k) Signature and Acceptance. This Agreement shall be deemed to have been accepted and signed by the Participant and the Companyas of the Date of Grant upon the Participant's online acceptance or deemed acceptance as set forth in the Notice of Grant.(l) Modifications. The provisions of this Agreement may not be changed, modified, or waived in a manner that is adverse to theParticipant's interests except by means of a writing signed by the Participant and the Company.11APPENDIX AThis Appendix A to the Company's 2013 Stock Plan, as amended (the "Plan") Restricted Stock Unit Agreement (the "Agreement")includes special terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to orsubstitute for, as applicable, those set forth in the Agreement. Any capitalized term used in this Appendix A without definition shallhave the meaning ascribed to such term in the Plan or the Notice of Grant, as applicable.Each Participant is advised to seek appropriate professional advice as to how the relevant exchange control and tax laws in theParticipant's country may apply to the Participant's individual situation.ALL COUNTRIES OUTSIDE THE UNITED STATESThe following provisions replace Section 8(a) of the Agreement:Nature of Award. In accepting the Award, the Participant acknowledges, understands and agrees that:(i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended orterminated by the Company at any time;(ii) the Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs,or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past;(iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;(iv) the Participant's participation in the Plan will not create a right to further employment with the Employer and shall not interfere withthe ability of the Employer to terminate the Participant's employment relationship;(v) the Participant's participation in the Plan is voluntary;(vi) the Award of RSUs is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered tothe Company or to the Employer, and which is outside the scope of the Participant's employment contract, if any;(vii) the Award of RSUs is not part of normal or expected compensation or salary for any purposes, including, but not limited to,calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension orretirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to,past services for the Company, the Employer or any Subsidiary;(viii) in the event that the Participant is not an employee of the Company, the Award shall not be interpreted to form an employmentcontract or relationship with the Company; and furthermore, the Award will not be interpreted to form an employment contract with theEmployer or any Subsidiary;(ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty;12(x) no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from termination of theParticipant's Continuous Status as an Employee, Consultant or Director by the Company or the Employer (for any reason whatsoeverand whether or not in breach of local labor laws) and in consideration of the Award of RSUs to which the Participant is otherwise notentitled, the Participant irrevocably agrees never to institute any claim against the Company or the Employer, waives the ability, if any,to bring any such claim, and releases the Company and the Employer from any such claim; if, notwithstanding the foregoing, any suchclaim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall be deemed irrevocably tohave agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of suchclaims; and(xi) in the event of termination of the Participant's Continuous Status as an Employee, Consultant or Director (whether or not in breachof local labor laws), the Participant's right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that theParticipant is no longer actively employed by or does no longer actively render services to the Company or any of its Subsidiaries andwill not be extended by any notice period mandated under local law; the Administrator shall have the exclusive discretion to determinewhen the Participant is no longer actively employed for purposes of this Award of RSUs.CANADASettlement of RSUs. Notwithstanding any terms or conditions of the Plan or the Agreement to the contrary, RSUs will be settled inshares of Common Stock only, not cash.Securities Law Information. You acknowledge and agree that you will only sell shares of Common Stock acquired through participationin the Plan outside of Canada through the facilities of a stock exchange on which the Common Stock is listed. Currently, the shares ofCommon Stock are listed on the NASDAQ.Termination of Employment. This provision replaces Section 4(a) of the Agreement:In the event of your termination of employment or other service relationship (for any reason whatsoever, whether or not later found tobe invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, ifany), your right to vest in the RSUs will terminate effective as of the date that is the earlier of (1) the date you are no longer activelyproviding service or (2) the date you receive notice of termination of employment from the Employer, regardless of any notice periodor period of pay in lieu of such notice required under applicable laws (including, but not limited to statutory law, regulatory law and/orcommon law); the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes ofthe RSUs.The following provisions apply if you are resident in Quebec:Language Acknowledgment. The parties acknowledge that it is their express wish that this Agreement, including this Appendix, as wellas all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto,be provided to them in English.Consentement relatif à la langue utilisée. Les parties reconnaissent avoir expressément souhaité que la convention («Agreement») ainsique cette Annexe, ainsi que tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés en vertu de, ou liésdirectement ou indirectement à la présente convention, soient rédigés en langue anglaise.Maternity and Paternity Leave. For the avoidance of doubt, Section 4(b) of the Agreement shall not apply to any maternity or paternityleave to which employees in Canada are entitled by law.13CHINAMandatory Sale RestrictionDue to regulatory requirements in China, the Company reserves the right to require the sale of any shares of the Company's CommonStock acquired under the Plan within 30 days following the termination of the Participant's employment or service with the Company(including its subsidiaries and affiliates). The Participant authorizes the Company, in its sole discretion, to instruct its designated brokerto assist with the mandatory sale of shares of Common Stock issued upon vesting of RSUs following the Participant's termination ofemployment or service with the Company (including its subsidiaries and affiliates) and, in this regard, the Participant authorizes theCompany's designated broker to complete the sale of such Common Stock on the Participant's behalf pursuant to this authorizationupon receipt of the Company's instructions. The Participant acknowledges that neither the Company nor its designated broker isobligated to arrange for the sale of the Shares at any particular price and that, upon the sale of the Shares, the proceeds from the sale ofthe Shares, less any brokerage fees or commissions and subject to any obligation to satisfy any applicable taxes or other tax-relateditems, will be remitted to the Participant in accordance with applicable exchange control laws and regulations.Exchange Control RestrictionsThe Participant understands and agrees that, pursuant to local exchange control requirements, the Participant (i) is not permitted totransfer any Shares acquired under the Plan out of the account established by the Participant with the Company's designated broker, and(ii) will be required to repatriate all cash proceeds resulting from the Participant's participation in the Plan, including cash dividends paidby the Company on Shares acquired under the Plan and/or the sale of such Shares (together, the "cash proceeds"). The Participantfurther understands that, under local law, such repatriation may need to be effectuated through a special exchange control accountestablished by the Company or one of its subsidiaries and the Participant hereby consents and agrees that all cash proceeds may betransferred to such special account prior to being delivered to the Participant and that any interest earned on the cash proceeds prior todistribution to the Participant will be retained by the Company to partially offset the cost of administering the Plan. The Participantunderstands that the cash proceeds may be paid to the Participant from this special account in U.S. dollars or in local currency, at theCompany's discretion. If the cash proceeds are paid in U.S. dollars, the Participant understands that he or she will be required toestablish a U.S. dollar bank account in China so that the cash proceeds may be deposited into this account. If the cash proceeds areconverted to local currency, the Participant acknowledges that the Company is under no obligation to secure any exchange conversionrate, and the Company may face delays in converting the cash proceeds to local currency due to exchange control restrictions in China.The Participant agrees to bear the risk of any exchange conversion rate fluctuation between the date the cash dividend is paid and/or theShares are sold, as applicable, and the date of conversion of the cash proceeds to local currency. The Participant further agrees tocomply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchangecontrol requirements in China.FINLANDNo country-specific Agreement terms apply.14FRANCEData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, social security number or other Participant tax identificationnumber, employment history and status, salary, nationality, job title, and information regarding equity compensation grants or CommonStock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing andadministering the Plan ("Data"). The Company, its affiliates and Participant's employer will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Currently, thethird party is E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Companymay retain additional or different third parties for any of the purposes mentioned. The Company may also make the Data available topublic authorities where required under locally applicable law. These recipients may be located in the United States, the EuropeanEconomic Area, or elsewhere, which the Participant separately and expressly consents to, accepting that outside the EuropeanEconomic Area, data protection laws may not be as protective as within. The Participant hereby authorizes them to receive, possess,use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managingparticipation in the Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required forthe administration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom theParticipant may have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require anynecessary amendments to it or withdraw the consent herein in writing by contacting the Company through its local H.R. Director;however, withdrawing the consent may affect the Participant's ability to participate in the Plan and receive the benefits intended by thisAgreement. Data will only be held as long as necessary to implement, administer and manage the Participant's participation in the Planand any subsequent claims or rights.French Language Provision. By accepting this Agreement, Participant confirms having read and understood the documents relating tothe Plan which were provided to Participant in the English language. Participant accepts the terms of those documents accordingly.French translation: En acceptant ce Contrat vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont étécommuniqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.Exchange Control Information. If you import or export cash (e.g., sales proceeds received under the Plan) with a value equal to orexceeding €10,000 and do not use a financial institution to do so, you must submit a report to the customs and excise authorities.Tax Reporting. If you hold shares of Common Stock outside of France or maintain a foreign bank account, you are required to reportsuch to the French tax authorities when filing your annual tax return. Failure to comply could trigger significant penalties.15GERMANYAcceptance of Agreement. Notwithstanding the terms of the Agreement, a Participant must acknowledge and accept the Agreement bysigning a copy of the Agreement and returning the original signed document within 30 days after the date of the electronic mailnotification of the Agreement. For the avoidance of doubt, this Agreement may be accepted electronically or please sign and return theAgreement to: Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.No Impact on Other Rights. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right toreceive any other grant of RSUs or other awards under the Plan in the future.Exchange Control Information. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. Inthe event that you make or receive a payment in excess of this amount, you are responsible for obtaining the appropriate form from theremitting bank and complying with applicable reporting requirements.Consent to Personal Data Processing and Transfer.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company and the Participant's employer hold certain personal information, including the Participant'sname, home address and telephone number, date of birth, social security number or other Participant tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company andthe Participant's employer will transfer Data to any third parties assisting the Company in the implementation, administration andmanagement of the Plan (and grants of awards made thereunder), at the time being E*Trade Financial Corporate Services, Inc., 4005Windward Plaza Drive, Alpharetta, GA 30005. These recipients are located in the European Economic Area, but also outside and in so-called insecure third-party countries that do not guarantee the data privacy protection level of the European Economic Area, forexample the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic orother form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awards madethereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants of awardsmade thereunder) on behalf of the Participant to a third party with whom the Participant may have elected to have payment madepursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consentherein in writing by contacting the Company; however, withdrawing the consent may affect the Participant's ability to participate in thePlan and receive the benefits intended by this Agreement.HONG KONGWARNING: The RSUs and Shares do not constitute a public offering of securities under Hong Kong law and are available only toEmployees. The Agreement, including this Appendix, the Plan and other incidental communication materials have not been prepared inaccordance with and are not intended to constitute a "prospectus" for a public offering of securities under the applicable securitieslegislation in Hong Kong. Nor have the documents been reviewed by any regulatory authority in Hong Kong. The RSUs are intendedonly for the personal use of each Employee and may not be distributed to any other person. If the Employee16is in any doubt about any of the contents of the Agreement, including this Appendix or the Plan, the Employee should obtainindependent professional advice.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the award will be settled inShares. In no event will the Award be settled in the form of cash.Sale of Shares. To facilitate compliance with securities laws in Hong Kong, in the event the Employee's RSUs vest and Shares areissued to the Employee within six months of the Date of Grant, the Employee agrees that he or she will not dispose of any Sharesacquired prior to the six-month anniversary of the Date of Grant.Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of theOccupational Retirement Schemes Ordinance ("ORSO"). Notwithstanding the foregoing, if the Plan is deemed to constitute anoccupational retirement scheme for the purposes of ORSO, then the Employee's grant shall be void. INDIAExchange Control Notification. The Participant understands that he or she must repatriate any proceeds from the sale of Shares acquiredunder the Plan and any dividends received in relation to the Shares to India and convert the funds into local currency within 90 days ofreceipt. The Participant must obtain a foreign inward remittance certificate ("FIRC") from the bank where the Participant deposits theforeign currency and maintains the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or theCompany requests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.Effective April 1, 2012, you are required to declare in your annual tax return (a) any foreign assets held by you or (b) any foreign bankaccounts for which you have signing authority.IRELANDManner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 8 of the Agreement:By accepting the RSUs, the Participant acknowledges, understands, and agrees that the benefits received under the Plan will not betaken into account for any redundancy or unfair dismissal claim.Director Notification. If the Participant is a director, shadow director or secretary of an Irish subsidiary of the Company, the Participantis subject to certain notification requirements under Section 53 of the Companies Act, 1990. Among these requirements is an obligationto notify the Irish affiliate in writing within five (5) business days when the Participant receives an interest (e.g., RSUs, Shares) in theCompany and the number and class of shares or rights to which the interest relates. In addition, the Participant must notify the Irishsubsidiary within five (5) business days when the Participant sells Shares acquired under the Plan. This notification requirement alsoapplies to any rights or Shares acquired by the Participant's spouse or children (under the age of 18).17ISRAELSecurities Law Notice. This RSU Award is granted pursuant to an exemption issued by the Israeli Securities Authority under Section15D of the Securities Law of 1968. The grant of this RSU Award and the issuance of its underlying shares are registered with the U.S.Securities and Exchange Commission on Form S-8. The Company will make available to any interested Israeli offeree, at his or herworkplace, the Form S-8 and all documents attached to the Form S-8, including any document directly or indirectly referred to in theForm S-8 or in its exhibits. To request any such documents, please contact stockadmin@cypress.com.Sub-Plan and Tax-Based Restrictions. If on the Date of Grant the Holder is an employee of the Company's subsidiary in Israel, CypressSemiconductors Ltd., then this Award is granted under and subject to the terms of the Cypress Semiconductor Corporation 2013 StockPlan Sub-Plan for Israeli Taxpayers (the "Israeli Sub-Plan") and the Participant acknowledges and agrees to the following: ThisAgreement is granted under and governed by the Plan, the Israeli Sub-Plan, Section 102(b)(2) of the Israeli Income Tax Ordinance(New Version) – 1961 and the Rules promulgated in connection therewith ("Section 102"), and the trust agreement (the "TrustAgreement") between the Company and the Trustee (as defined in the Israeli Sub-Plan).•The proceeds of any shares of Common Stock issued upon vesting of the RSUs will be remitted by the Company or itsdesignated broker to the Trustee to administer on Participant's behalf, pursuant to the terms of Section 102 and the TrustAgreement.•Participant is familiar with the terms and provisions of Section 102, particularly the Capital Gains Track (as defined in the IsraeliSub-Plan) described in subsection (b)(2) thereof, and agrees that Participant will not release or sell (or require the Trustee torelease or sell) the RSUs or underlying shares of Common Stock during the Restricted Holding Period (as defined in the IsraeliSub-Plan), unless permitted to do so by applicable law.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, social security number or other Participant tax identificationnumber, salary, nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled,purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data").The Company, its affiliates and the Participant's employer will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). These recipients may be locatedin the United States, the European Economic Area, or elsewhere. The Participant hereby authorizes them to receive, possess, use, retainand transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in thePlan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administration ofthe Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan, including transfers outside of Israel and further transfers thereafter. The Participantmay, at any time, review Data, require any necessary amendments to it or withdraw the consent18herein in writing by contacting the Company; however, withdrawing the consent may affect the Participant's ability to participate in thePlan and receive the benefits intended by this Agreement.ITALYData Privacy Notice and Consent.This provision replaces the "Data Privacy" section of the Agreement.Participant hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or otherform, of personal data as described in this section of Appendix A by and among, as applicable, the Company and any Subsidiaryfor the exclusive purpose of implementing, administering and managing Participant's participation in the Plan (and grants ofawards made thereunder).Participant understands that the Company and any Subsidiary may hold certain personal information about Participant, includingbut not limited to, Participant's name, home address and telephone number, date of birth, social insurance number or otheridentification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details ofthe RSUs or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding inParticipant's favor, for the exclusive purpose of managing and administering the Plan ("Personal Data").Participant also understands that providing the Company with Personal Data is necessary for the performance of the Plan andthat Participant's denial to provide Personal Data would make it impossible for the Company to perform its contractualobligations and may affect Participant's ability to participate in the Plan. The Controller of Personal Data processing is CypressSemiconductor Corporation, with its principal offices at 198 Champion Court, San Jose, California 95134, United States ofAmerica, and, pursuant to Legislative Decree no. 196/2003, its representative is Cypress Semiconductor GmbH (a subsidiary ofCypress Semiconductor Corporation) - Willy-Brandt-Allee 4, 81829 Munich, Germany.Participant understands that Personal Data will not be publicized, but it may be transferred to banks, other financial institutionsor brokers involved in the management and administration of the Plan (and grants of awards made thereunder). Participantfurther understands that the Company and/or a Subsidiary will transfer Personal Data amongst themselves as necessary for thepurpose of implementation, administration and management of Participant's participation in the Plan (and grants of awards madethereunder), and that the Company and/or a Subsidiary may each further transfer Personal Data to third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder), includingany requisite transfer of Personal Data to a broker or other third party with whom Participant may elect to deposit any Sharesacquired under the Plan. Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form,for the purposes of implementing, administering and managing Participant's participation in the Plan (and grants of awards madethereunder). Participant understands that these recipients may be located in or outside the European Economic Area, such as inthe United States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connectedwith the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessarylegal obligations connected with the management and administration of the Plan.19Participant understands that Personal Data processing related to the purposes specified above shall take place under automatedor non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected andwith confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to LegislativeDecree no. 196/2003.The processing activity, including communication, the transfer of Personal Data abroad, including outside of the EuropeanEconomic Area as specified herein and pursuant to applicable laws and regulations, does not require Participant's consent theretoas the processing is necessary to performance of contractual obligations related to implementation, administration andmanagement of the Plan (and grants of awards made thereunder). Participant understands that, pursuant to Section 7 of theLegislative Decree no. 196/2003, Participant has the right to, including but not limited to, access, delete, update, correct or stop,for legitimate reason, the Personal Data processing. Furthermore, Participant is aware that Personal Data will not be used fordirect marketing purposes. In addition, Personal Data provided can be reviewed and questions or complaints can be addressed bycontacting Participant's human resources department.Plan Document Acknowledgment. In accepting the RSU, the Participant acknowledges that a copy of the Plan was made available tothe Participant and that the Participant has reviewed the Plan and the Agreement, including this Appendix, in their entirety and fullyunderstands and accepts all provisions of the Plan, the Agreement and this Appendix. The Participant further acknowledges that he or she has read and specifically and expressly approves the following provisions in theAgreement: Vesting Schedule and Vesting Conditions and Nature of Award, as well as the following provision in the Plan: RestrictedStock/Restricted Stock Units.Additional Tax/Exchange Control Information. You are required to report in your annual tax return: (a) any transfers of cash orCommon Stock to or from Italy exceeding €10,000 or the equivalent amount in U.S. dollars; (b) any foreign investments or investments(including proceeds from the sale of Common Stock acquired under the Plan) held outside of Italy exceeding €10,000 or the equivalentamount in U.S. dollars, if the investment may give rise to taxable income in Italy; and (c) the amount of the transfers to and from abroadwhich have had an impact during the calendar year on your foreign investments or investments held outside of Italy. Under certaincircumstances, you may be exempt from requirement under (a) above if the transfer or investment is made through an authorizedbroker resident in Italy.JAPANData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold the following personal information for thepurpose of managing and administering the Plan ("Data"): the Participant's name, home address and telephone number, date of birth,social security number or other Participant tax identification number, salary, nationality, job title, and information regarding equitycompensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor. Fromtime to time, the Company may change the scope of its affiliates that hold, use or process Participant's personal information or the scopeof Participant's personal information to be held,20used or processed by the Company, its affiliates and the Participant's employer, by providing, or making easily accessible, informationabout such change to the Participant. The Company and its affiliates will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). These recipients may be locatedin the United States, the European Economic Area, Japan or elsewhere. The Participant hereby authorizes them to receive, possess, use,retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation inthe Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administrationof the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendmentsto it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect theParticipant's ability to participate in the Plan and receive the benefits intended by this Agreement.KOREAExchange Control Information. Korean residents who realize US$500,000 or more from the sale of shares of Common Stock or receiptof dividends in a single transaction are required to repatriate the proceeds to Korea within 18 months of receipt.MALAYSIAData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information from theParticipant's Participant records, including the Participant's name, home address and telephone number, date of birth, social securitynumber or other Participant tax identification number, salary, nationality, job title, and information regarding equity compensationgrants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose ofmanaging and administering the Plan ("Data"). The Company and its affiliates will transfer Data to any third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder) and will disclosecertain Data to the Inland Revenue Board and other relevant authorities as required by law. These recipients may be located in theUnited States, the European Economic Area, Malaysia or elsewhere. The Participant hereby authorizes them to receive, possess, use,retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation inthe Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administrationof the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan. The Data will be retained by the Company, its affiliates and the Participant'semployer for the entire duration of the Participant's employment or service and for a further seven years after cessation of employmentor service. The holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writingby contacting Zauyah Kechik (or other authorized individual), at Sdn. Bhd. (613545-T), Phase II, Free Industrial Zone, Bayan Lepas,11900 Penang, Malaysia; site phone no: +60 4 888 2000.21Disclosure of Data is obligatory for the implementation, administration and management of the Plan (and grants of awards madethereunder); however, withdrawing the consent may affect the Participant's ability to participate in the Plan and receive the benefitsintended by this Agreement.Director Notification. If the Participant is a director of a subsidiary or other related company in Malaysia, then the Participant is subjectto certain notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an obligation to notify theMalaysian subsidiary in writing when the Participant receives an interest (e.g., RSUs, Shares) in the Company or any related companies.In addition, the Participant must notify the Malaysian subsidiary when he or she sells Shares of the Company or any related company(including when the Participant sells Shares acquired under the Plan). These notifications must be made within 14 days of acquiring ordisposing of any interest in the Company or any related company.Securities Law Information. Malaysian insider-trading rules may impact the acquisition or disposal of Shares or rights to Shares underthe Plan. Under such rules, the Participant is prohibited from acquiring Shares or rights to Shares (e.g., RSUs) or selling Shares when heor she possesses information that is not generally available and which the Participant knows or should know will have a material effecton the price of the Shares once such information is generally available. By accepting this grant, the Participant acknowledges that he orshe is not in possession of any material, non-publicly disclosed information regarding the Company at the time of grant and will notacquire or sell Shares when in possession of any material, non-publicly disclosed information regarding the Company.PHILIPPINESSecurities Law Information. The sale or disposal of Shares acquired under the Plan may be subject to certain restrictions underPhilippines securities laws. Those restrictions should not apply if the offer and resale of Shares takes place outside of the Philippinesthrough the facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the NASDAQ. TheCompany's designated broker should be able to assist the Participant in the sale of Shares on the NASDAQ. If the Participant hasquestions with regard to the application of Philippines securities laws to the disposal or sale of Shares acquired under the Plan theParticipant should consult with his or her legal advisor.SINGAPORESecurities Law Information. The RSUs were granted to the Participant pursuant to the "Qualifying Person" exemption under section273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) ("SFA"). The Agreement and the Plan have not beenlodged or registered as a prospectus with the Monetary Authority of Singapore. The Participant should note that the Participant's RSUsare subject to section 257 of the SFA and the Participant will not be able to make any subsequent sale in Singapore, or any offer of suchsubsequent sale of the Shares unless such sale or offer in Singapore is made pursuant to the exemptions under Part XIII Division(1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).Director Notification. If the Participant is a director, associate director or shadow director of a subsidiary or other related company inSingapore, the Participant is subject to certain notification requirements under the Singapore Companies Act. Among these requirementsis an obligation to notify the Singapore subsidiary in writing when the Participant receives an interest (e.g., RSUs, Shares) in theCompany or any related company. In addition, the Participant must notify the Singapore subsidiary when the Participant sells Shares ofthe Company or any related company (including when the Participant sells Shares acquired under the Plan). These notifications must bemade within two business days of acquiring or disposing of any interest in the22Company or any related company. In addition, a notification must be made of the Participant's interests in the Company or any relatedcompany within two business days of becoming a director.Insider Trading Notification. You should be aware of the Singapore insider trading rules, which may impact the acquisition or disposalof shares or rights to shares of Common Stock under the Plan. Under the Singapore insider trading rules, you are prohibited fromacquiring or selling shares of Common Stock or rights to shares of Common Stock (e.g., RSUs under the Plan) when you are inpossession of information which is not generally available and which you know or should know will have a material effect on the priceof Common Stock once such information is generally available.SWEDENNo country-specific Agreement terms apply.TAIWANExchange Control Information. You may remit foreign currency (including proceeds from the sale of Common Stock) into or out ofTaiwan up to US$5,000,000 per year without special permission. If the transaction amount is TWD500,000 or more in a singletransaction, you must submit a Foreign Exchange Transaction Form to the remitting bank and provide supporting documentation to thesatisfaction of the remitting bank.THAILANDNo country-specific Agreement terms apply.THE NETHERLANDSData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, citizen service number (burgerservicenummer) (former socialsecurity number) or other Participant tax identification number (insofar as allowed), salary, nationality, job title, and informationregarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in theParticipant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and its affiliates will transfer Data toany third parties assisting the Company in the implementation, administration and management of the Plan (and grants of awards madethereunder). Currently, the third parties are E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA30005., however the Company may retain additional or different third parties for any of the purposes mentioned. These recipients maybe located in the United States, the European Economic Area, or elsewhere. Countries outside the European Economic Area do notprovide for a similar level of data protection as within the European Economic Area pursuant to the European Data Protection Directive95/46/EC. The Participant hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, forthe purposes of implementing, administering and managing participation in the Plan (and grants of awards made thereunder), includingany requisite transfer of such Data as may be required for the23administration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participantmay have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessaryamendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affectthe Participant's ability to participate in the Plan and receive the benefits intended by this Agreement. The holder understands that he orshe may request a list of the names and addresses of the third party recipients of Data by contacting the Company through its local H.R.Representative at Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.UNITED KINGDOMEligible Individual. For the purpose of RSUs awarded in the UK, Consultants and Outside Directors are not eligible to receive awards.Tax Withholding.The following is added to the "Responsibility for Taxes" section of the Agreement.The Participant will be liable for and agrees to indemnify and keep indemnified the Company, any subsidiary and his/her employingcompany, if different, from and against any liability for or obligation to pay any Tax Liability (a "Tax Liability" being any liability forincome tax, Participant's National Insurance contributions and employer's National Insurance Contributions) that is attributable to (i) thegrant or vesting of, or any benefit derived by the Participant from, the RSUs, (ii) the acquisition by the Participant of the Common Stockon the settlement of the RSUs, or (iii) the disposal of any Common Stock.The RSUs will not vest until the Participant has made such arrangements as the Company may require for the satisfaction of any TaxLiability that may arise in connection with the vesting or settlement of the RSUs and/or the acquisition of the Common Stock by theParticipant. The Company shall not be required to issue, allot or transfer Common Stock until the Participant has satisfied thisobligation.No Right to Continued Employment.This provision supplements the "Nature of Award" section of the Agreement.Neither the RSUs nor this Agreement:(i)confers upon the Participant any right to continue to be an Employee, Consultant or Director of the Company or any of itssubsidiaries or interferes in any way with the right of the Company or any of its subsidiaries to terminate the Participant'semployment at any time; or(ii)forms part of the Participant's entitlement to remuneration and benefits in terms of his/her employment, or affects theParticipant's terms and conditions of employment.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information (includingsensitive personal information) such as the Participant's name,24home address and telephone number, date of birth, social security number or other Participant tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). By participating inthe Plan, the Participant agrees that the Company, its affiliates and the Participant's employer may hold and process such Data, and maytransfer Data to any third parties assisting the Company or its affiliates in the implementation, administration and management of thePlan (and grants of awards made thereunder). These recipients may be located in the United States, the European Economic Area, orelsewhere. The Participant hereby authorizes them to receive, possess, process, use, hold, retain and transfer the Data, in electronic orother form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awards madethereunder) and in the course of the Company's business, including any requisite transfer of such Data as may be required for theadministration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participantmay have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessaryamendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affectthe Participant's ability to participate in the Plan and receive the benefits intended by this Agreement.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or this Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Joint Election. As a condition of the grant of RSUs, the Participant agrees to accept any liability for secondary Class 1 NationalInsurance contributions (the "Employer NICs") which may be payable by the Company or the Employer with respect to the vesting ofthe RSUs or otherwise payable with respect to a benefit derived in connection with the RSUs.Without limitation to the foregoing, if requested by the Company, the Participant agrees to execute a joint election between theCompany and/or the Employer and Participant (the "Joint Election"), the form of such Joint Election being formally approved by HerMajesty's Revenue & Customs ("HMRC"), and any other consent or election required to accomplish the transfer of the Employer NICsto the Participant. The Participant further agrees to execute such other joint elections as may be required between the Participant andany successor to the Company and/or the Employer. If the Participant does not enter into a Joint Election in response to a Companyrequest, no Shares shall be issued to the Participant (and neither the Company nor the Employer shall have any liability with respect tosuch non-issuance of shares). The Participant further agrees that the Company and/or the Employer may collect the Employer NICsfrom the Participant by any means.If the Participant has signed a Joint Election in the past with respect to an RSU award granted to him or her by the Company and thatJoint Election applies to all grants made under the Plan, the Participant need not sign another Joint Election in connection with thisRSU grant.Responsibility for Taxes. This provision supplements the Agreement:You agree that, if you do not pay or the Employer or the Company does not withhold from you the full amount of Tax-Related Itemsthat you owe at vesting and settlement of the RSUs, or the release or assignment of the RSUs for consideration, or the receipt of anyother benefit in connection with the RSUs (the "Taxable Event") within 90 days after the Taxable Event, or such other period specifiedin Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the amount of income tax that should have beenwithheld shall constitute a loan owed by you to the Employer, effective 90 days after the Taxable Event. You agree that the loan willbear interest at the HMRC official rate and will be immediately due and repayable by you, and the Company and/or the Employer mayrecover it at any time thereafter by withholding the25funds from salary, bonus or any other funds due to you by the Employer, by withholding in shares of Common Stock issued uponvesting of your RSUs or from the cash proceeds from the sale of shares of Common Stock or by demanding cash or a cheque from you.You also authorize the Company to delay the issuance of any shares of Common Stock unless and until the loan is repaid in full.Notwithstanding the foregoing, if you are a director or executive officer (as within the meaning of Section 13(k) of the U.S. SecuritiesExchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that you are such adirector or executive officer and the income tax that is due is not collected from or paid by you within 90 days of the Taxable Event, theamount of any uncollected income tax may constitute a benefit to you on which additional income tax and national insurancecontributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directlyto the HMRC under the self-assessment regime and for reimbursing the Company or the Employer (as appropriate) for the value of anyParticipant national insurance contributions due on this additional benefit.26Exhibit 10.2.5NOTICE OF GRANT OF MILESTONE-BASED RESTRICTED STOCK UNITSCongratulations! You have been granted an Award of Milestone-Based Restricted Stock Units ("RSUs") under the CypressSemiconductor Corporation 2013 Stock Plan, as amended, and any applicable sub-plan thereto for your country (collectively, the"Plan"), as follows:PARTICIPANT NAME: [name]PARTICIPANT ID: [ID#]TARGET NUMBER OF RSUs GRANTED: [number]Each RSU is equivalent to one Share of Common Stock of Cypress Semiconductor Corporation (the "Company") for purposesof determining the number of Shares subject to this Award. The RSUs are subject to forfeiture prior to vesting. None of the RSUs willvest (nor will you have the rights of a stockholder with respect to the underlying Shares) until you satisfy the vesting conditionsdescribed below and in the Milestone-Based Restricted Stock Unit Agreement accompanying this notice (the "RSU Agreement"). Thenumber of unvested RSUs and underlying Shares is subject to adjustment under Section 16 of the Plan (such as in connection with astock split or spin-off). Unless otherwise defined in this Notice of Grant of Milestone-Based Restricted Stock Units (this "Notice ofGrant"), capitalized words that are defined in the Plan or the RSU Agreement have the meanings given to them in the Plan or the RSUAgreement, as applicable. Additional terms of this grant are as follows:GRANT NUMBER: [number]GRANT DATE: [date]VESTING BASE DATE: [date]VESTING SCHEDULE:1Target Number of RSUs Vesting Date[number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date]You acknowledge and agree that this Notice of Grant (including the vesting schedule above) does not constitute an express orimplied promise of continued engagement as an Employee or Consultant for the vesting period, for any period, or at all.You will not receive any Shares upon vesting unless and until satisfactory arrangements (as determined by the Administrator)have been made with respect to the collection of all Tax-Related Items that the Company or your Employer determines must bewithheld with respect to such Shares to be delivered upon the vesting of the RSUs. Currently, you can view the tax withholdingcollection method(s) that the Administrator has made available to you, including the default collection method (and if applicable youmay be able to select an alternate method) by accessing your Plan account at www.ETRADE.com.The Company's online acceptance procedure requires that you open each of the linked documents in order to proceed toacceptance.Please confirm your acceptance of this Award by clicking the "Accept" (or similar wording) button on the awardacceptance screen of your Plan account at www.ETRADE.com. If you wish to reject this award, you must so notify the Company'sStock Plan Administrator in writing to stockadmin@cypress.com no later than sixty (60) days after the grant date shown above. Ifwithin such sixty (60) day period you neither affirmatively accept nor affirmatively reject this Award, you will be deemed to haveaccepted this Award at the end of such sixty (60) day period pursuant to the terms and conditions set forth in this Notice of Grant, theRSU Agreement, and the Plan.By your acceptance of this Award:•you acknowledge receiving and reviewing this Notice of Grant, the RSU Agreement, the Plan, and the Company's relatedProspectus;2•you agree that the RSUs are granted under and governed by the terms and conditions of, and you agree to be bound by theterms of, this Notice of Grant, the RSU Agreement, and the Plan;•you agree to accept as binding, conclusive, and final all decisions or interpretations of the Plan Administrator upon anyquestions relating to the Plan and this Award; and•you consent to the collection, use and transfer, in electronic or other form, of your personal data as described in theRSU Agreement for the purpose of implementing, administering and managing your participation in the Plan.This Notice of Grant shall be construed and determined in accordance with the laws of the U.S. State of Delaware (withoutgiving effect to the conflict of laws principles thereof) and upon acceptance shall be deemed to have been executed and delivered bythe parties hereto as of the grant date shown above.3CYPRESS SEMICONDUCTOR CORPORATION2013 STOCK PLAN, AS AMENDEDMILESTONE-BASED RESTRICTED STOCK UNIT AGREEMENT1. Grant. Cypress Semiconductor Corporation (the "Company") hereby grants to the Participant named in the Notice of Grant ofMilestone-Based Restricted Stock Units (the "Notice of Grant") an Award of Restricted Stock Units ("RSUs"), as set forth in theNotice of Grant and subject to the terms and conditions in this Milestone-Based Restricted Stock Unit Agreement ("Agreement"), inthe Company's 2013 Stock Plan, as amended, and in any applicable sub-plan for the Participant's country (such plan and any such sub-plan, if applicable, collectively, the "Plan"). A sub-plan is applicable to this Award if, but only if, the country-specific terms for theParticipant's country as set forth in Appendix A state that this Award is granted under or subject to such sub-plan. Unless otherwisedefined herein, capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan (the"Agreement").2. Company's Obligation. Each Milestone-based RSU represents the right to receive a Share of Common Stock of the Company on theVesting Date (as defined below) if and to the extent that the vesting conditions established by or pursuant to the Notice of Grant, thisAgreement and the Plan have been satisfied. Unless and until RSUs vest, the Participant will have no right to receive Shares (or anyother payment) in connection with such RSUs. Prior to actual distribution of Shares in settlement of any vested RSUs, such RSUsrepresent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.3. Vesting Conditions and Procedure.(a) Vesting Conditions. Subject to Section 4 below, the vesting of RSUs on each scheduled vesting date set forth in the Notice ofGrant (each, a "Vesting Date") shall be subject to (i) the Participant's Continuous Status as an Employee, Consultant or Director fromthe grant date specified in the Notice of Grant (the "Date of Grant") to such Vesting Date (the "Service-Based Condition") and(ii) satisfaction of the applicable performance conditions prior to such Vesting Date as described below. Employment or service foronly a portion of the vesting period described in clause (i) above, even if a substantial portion, will not entitle the Participant to anyproportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment orservices as provided in Section 4 below or in the Plan. For each scheduled Vesting Date, the Administrator shall designate anassociated performance period (each, a "Performance Period") that ends no later than such Vesting Date and shall establishperformance targets applicable to such Performance Period. The Administrator shall also establish a methodology for determining thepercentage of the target number of RSUs set forth opposite such Vesting Date in the Vesting Schedule (the "Target Number ofRSUs") that will be credited to the Participant based on relative achievement of such performance targets ("Performance-BasedCriteria"). Performance-Based Criteria (1) shall be established by the Administrator not later than thirty (30) days after the start of aquarterly or semi-annual Performance Period to which they relate, and no later than ninety (90) days after the start of an annual (orlonger) Performance Period to which they relate and (2) shall be communicated4to the Participant promptly after being established by the Administrator. Within sixty (60) days following the end of each PerformancePeriod, the Administrator shall determine whether and the extent to which the performance targets for that Performance Period weremet and will confirm the crediting percentage (the "Crediting Percentage") that applies pursuant to the previously establishedmethodology. Such determination shall be final and binding absent manifest error. In no event shall the Crediting Percentage be greaterthan 200 percent. For the avoidance of doubt, unless the Participant is an executive officer, the responsibilities allocated to theAdministrator in this paragraph may be performed by an officer of the Company if the Administrator has delegated appropriateauthority to such officer.(b) Vesting Procedure. On each Vesting Date, if the Participant has satisfied the Service-Based Condition, the number of RSUs thatshall vest and become non-forfeitable shall be equal to the Target Number of RSUs for such Vesting Date multiplied by the applicableCrediting Percentage. Any of the Target Number of RSUs for a particular Vesting Date that do not vest on such Vesting Date inaccordance with this Section 3 shall terminate as of the last day of the associated Performance Period.4. Forfeiture upon Termination as an Employee, Consultant or Director; Leaves of Absence.(a) Forfeiture upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the Notice of Grant, if theParticipant's Continuous Status as an Employee, Consultant or Director ceases for any or no reason after the Date of Grant but prior tovesting, any unvested RSUs awarded by this Agreement will thereupon be forfeited at no cost to the Company and, if applicable, at nocost to the Company affiliate that actually employs or otherwise engages the Participant (the "Employer"). Neither the Participant norany of the Participant's successors, heirs, assigns or personal representatives shall have any rights or interests in any RSUs that areforfeited pursuant to any provision of this Agreement or the Plan.(b) Unpaid Leaves of Absence. Unless otherwise provided by the Administrator (such as in a leave of absence vesting policy orotherwise) and subject to compliance with all applicable laws, in the event the Participant takes an approved but unpaid leave ofabsence ("LOA") from the Company or the Employer (as applicable) during a Performance Period, such LOA shall have thefollowing effects:(1)if the Performance Period is one fiscal year or less and the portion of the Performance Period during which the Participant is onLOA is less than or equal to 25% of the Performance Period, then the number of Shares that actually vests on the Vesting Dateassociated with such Performance Period shall be the number that otherwise would have vested on such date under Section3(b) above multiplied by a fraction, the numerator of which is the number of calendar days in the Performance Period duringwhich the Participant was not on LOA, and the denominator of which is the number of calendar days in the PerformancePeriod;(2)if the Performance Period is one fiscal year or less and the portion of the Performance Period during which the Participant is onLOA is greater than 25% of the Performance Period, then the Target Number of RSUs associated with such PerformancePeriod shall be forfeited5when the length of the LOA exceeds 25% of the Performance Period and no RSUs shall be eligible to be earned or to vest forsuch Performance Period;(3)if the Performance Period is longer than one fiscal year and the portion of the Performance Period during which the Participantis on LOA is 180 days or less, then the number of Shares that actually vests on the Vesting Date associated with suchPerformance Period shall be the number that otherwise would have vested on such date under Section 3(b) above multiplied bya fraction, the numerator of which is the number of calendar days in the Performance Period during which the Participant wasnot on LOA, and the denominator of which is the number of calendar days in the Performance Period; and(4)if the Performance Period is longer than one fiscal year and the portion of the Performance Period during which the Participantis on LOA is 181 days or more, then the Target Number of RSUs associated with such Performance Period shall be forfeitedon such 181st day and no RSUs shall be eligible to be earned or to vest for such Performance Period.5. Settlement in Shares after Vesting. Subject to Section 17 (regarding tax matters), any RSUs that vest in accordance with thisAgreement will be settled by delivery of Shares to the Participant (or in the event of the Participant's death, to his or her estate) as soonas practicable after (and in no case more than seventy-four days after) the date such RSUs vest and become non-forfeitable.6. Payments after Death. Any distribution or delivery to be made to the Participant under this Agreement will, if the Participant is thendeceased, be made to the administrator or executor of the Participant's estate. Any such administrator or executor must furnish theCompany with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validityof the transfer and compliance with any laws or regulations pertaining to said transfer.7. Rights as Stockholder. Neither the Participant nor any person claiming under or through the Participant will have any of the rights orprivileges of a stockholder of the Company (including, without limitation, voting and dividend rights) in respect of any Sharesdeliverable hereunder unless and until certificates (or book-entry positions) representing such Shares have been issued, recorded on therecords of the Company or its transfer agents or registrars, and delivered to the Participant or the Participant's broker.8. No Effect on Employment or Status.(a) If the Participant is employed in the United States, (1) the Participant's employment or other service relationship with the Companyor the Employer is on an at-will basis only; and accordingly, the terms of the Participant's employment or other service relationshipwith the Company or the Employer will be determined from time to time by the Company or the Employer, and the Company or theEmployer will have the right, which is hereby expressly reserved, to terminate or change the terms of the employment or other servicerelationship of the Participant at any time for any reason whatsoever, with or without good cause or notice; and (2) the Participantunderstands and agrees that the vesting of the RSUs subject to this Award pursuant to Section 3 is subject to performance conditions,as may be determined pursuant to the terms of this Agreement, and to the Participant's6continuing in the employ or service of the Company or the Employer through each applicable Vesting Date.(b) This Agreement shall not in any way be construed or interpreted so as to affect adversely or otherwise impair the right of theCompany or the stockholders to remove a Director from the Board at any time in accordance with the provisions of applicable law.9. Address for Notices. (a) Any notice to be given to the Company under the terms of this Agreement will be addressed to theCompany at 198 Champion Court, San Jose, California 95134-1599, Attn: Stock Administration, or at such other address as theCompany may hereafter designate in writing or electronically. (b) Any notice to be given to the Participant under the terms of thisAgreement will be addressed to the Participant's address appearing on the books of the Company or to the Participant's residence or tosuch other address as may be designated in writing by the Participant. Notices may also be delivered to the Participant, during his orher employment, through the Company's inter-office or electronic mail systems.10. Grant is Not Transferable. Except to the limited extent provided in Section 6 of this Agreement, this grant and the rights andprivileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law orotherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under anyexecution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null andvoid.11. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be bindingupon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.12. Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the listing, registration orqualification of the Shares upon any securities exchange or under any state, federal, or foreign law, or the consent or approval of anygovernmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Participant (or his or herestate), such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effectedor obtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet therequirements of any such U.S. state or federal law or securities exchange and to obtain any such consent or approval of any domesticgovernmental authority.13. Plan Governs. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. The Participant has beenprovided a copy of the Plan and has had an opportunity to review the Plan and shall be bound by all the terms and provisions of thePlan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions ofthe Plan, the provisions of the Plan will govern.714. Administrator Authority. The Administrator will have the power to interpret the Plan, this Agreement, and the Notice of Grant andto adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret orrevoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken andall interpretations and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company,and all other interested persons. No member of the Administrator will be personally liable for any action, determination, orinterpretation made in good faith with respect to the Plan or this Agreement.15. Additional Terms for Participants Providing Services Outside the United States. To the extent the Participant provides (or provided,subsequent to the vesting base date set forth in the Notice of Grant) services to the Company or the Employer in a country other thanthe United States, the RSUs shall be subject to such additional or substitute terms as are set forth for such country in Appendix Aattached hereto.16. Data Privacy. The Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronicor other form, of the Participant's personal data as described in this Agreement by and among, as applicable, the Employer and theCompany and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing theParticipant's participation in the Plan.The Participant understands that the Company and the Employer may hold certain personal information about the Participant,including, but not limited to, the Participant's name, home address and telephone number, date of birth, social insurance number,passport number, or other identification number, salary, nationality, job title, any shares of stock or directorships held in theCompany, details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in theParticipant's favor, for the purpose of implementing, administering and managing the Plan ("Data").The Participant understands that Data may be transferred to such stock plan service provider (or providers) as may be selected bythe Company which is (or are) assisting in the implementation, administration and management of the Plan and awards grantedthereunder. The Participant understands that these recipients of Data may be located in the United States, or elsewhere, and thatthe recipients' country (e.g., the United States) may have different data privacy laws and protections than the Participant's country.The Participant understands that he or she may request a list with the names and addresses of any potential recipients of the Databy contacting the Participant's local human resources representative. The Participant hereby authorizes the Company and anyother possible recipients which may assist the Company (presently or in the future) with implementing, administering andmanaging the Plan and awards granted thereunder to receive, possess, use, retain and transfer the Data, in electronic or otherform, for the sole purpose of implementing, administering and managing the Participant's participation in the Plan.The Participant understands that Data will be held only as long as is necessary to implement, administer and manage his or herparticipation in the Plan. The Participant understands that8he or she may, at any time, view Data, request additional information about the storage and processing of Data, require anynecessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing theParticipant's local human resources representative. The Participant understands, however, that refusing or withdrawing his or herconsent may affect the Participant's ability to participate in the Plan and the Participant's continued eligibility for this Award oreligibility to be granted any other awards under the Plan. For more information on the consequences of the Participant's refusal toconsent or withdrawal of consent, the Participant understands that he or she may contact his or her local human resourcesrepresentative.17. Responsibility for Taxes.(a) Regardless of any action the Company or the Employer takes with respect to any and all income or withholding tax (includingfederal, state and local tax), social insurance, payroll tax, payment on account or other tax-related items related to the Participant'sparticipation in the Plan and legally applicable to him or her ("Tax-Related Items"), the Participant acknowledges that the ultimateliability for all Tax-Related Items is and remains the Participant's responsibility and may exceed the amount, if any, actually withheldby the Company and/or the Employer. The Participant further acknowledges that the Company and/or the Employer (1) make norepresentations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, includingthe grant of the RSUs, the vesting of RSUs, the issuance of Shares, the subsequent sale of any Shares acquired under the Award andthe receipt of any dividends; and (2) do not commit to and are under no obligation to structure the terms of the Award or any aspect ofthe RSUs to reduce or eliminate the Participant's liability for Tax-Related Items or achieve any particular tax result. Further, if theParticipant has become subject to tax in more than one jurisdiction between the Date of Grant and the date of any taxable or taxwithholding event, as applicable, the Participant acknowledges that the Company and/or the Employer (or former employer, asapplicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.(b) Prior to any relevant taxable or tax withholding event, as applicable, the Participant shall pay or make adequate arrangementssatisfactory to the Company and/or the Employer to satisfy all Tax-Related Items that the Company determines it or the Employer isrequired to withhold under applicable laws with respect to the RSUs. In this regard, the Participant authorizes the Company and/or theEmployer, or their respective agents, to satisfy the obligation with regard to all Tax-Related Items by any one or a combination of thefollowing methods: (1) by requiring the Participant to pay such amount in cash or by check; (2) by deducting such amount out ofwages or any other cash compensation otherwise payable to the Participant by the Company and/or the Employer; (3) by withholding(and/or reacquiring) a number of Shares issuable (or issued) in payment of the RSUs having a Fair Market Value equal to suchamount; (4) by requiring the Participant to deliver to the Company already owned shares of Common Stock having a Fair MarketValue equal to such amount; and/or (5) withholding such amount from the proceeds of a sale of a sufficient number of Shares issuedupon vesting of the RSUs ("Sell-To-Cover") either through a voluntary sale or through a mandatory sale arranged by the Company (onthe Participant's behalf pursuant to this authorization). For these purposes, the Fair Market Value of any Shares to be withheld orrepurchased, as applicable, shall be determined on the date that Tax-Related Items are to be determined. To the extent any of9the above methods involves a sale of Shares, the Participant acknowledges that neither the Company nor its designated broker isobligated to arrange for such sale of Shares at any particular price.To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering minimumstatutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholdingin Shares, for tax purposes, the Participant is deemed to have been issued the full number of Shares subject to the vested portion of theRSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as aresult of any aspect of the Participant's participation in the Plan.(c) The Participant shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employermay be required to withhold as a result of the Participant's receipt of RSUs, the vesting of RSUs, or the issuance of Shares that cannotbe satisfied by the means previously described. The Company may refuse to deliver Shares to the Participant if the Participant fails tocomply with the Participant's obligations in connection with Tax-Related Items as described in this Section 17.(d) The Participant understands that the Company may allow the Participant to select a tax withholding collection method and that, ifno selection is made, the default collection method may be Sell-To-Cover. In that default case and/or if the Participant subsequentlyselects Sell-To-Cover (or the related "same-day sale" alternative), the Participant hereby agrees and instructs that a sufficient number ofShares issued in payment of RSUs that become non-forfeitable shall be sold by the Company's designated brokerage firm on theParticipant's behalf and for the Participant's account pursuant to this authorization on or as soon as administratively possible after thedate of issuance. This paragraph is intended as a trading plan meeting the requirements of Rule 10b5-1(c)(1)(i) under the U.S.Securities Exchange Act of 1934, as amended. The Participant hereby represents and warrants that (a) at the time of entering into thisAgreement and trading plan and at the time of making any subsequent Sell-To-Cover or "same-day sale" election constituting a tradingplan hereunder, he or she is not aware of any material, nonpublic information regarding the Company or its securities and (b) he or sheis entering into this Agreement and any such trading plan in good faith and not as part of a plan or scheme to avoid the prohibitions ofRule 10b5-1. The Participant agrees (i) never to directly or indirectly communicate any material, non-public information regarding theCompany to the Company's designated brokerage firm or any employee or affiliate thereof and (ii) at any time an above trading plan isin effect, (x) not to influence how, when, or whether the Shares are sold (other than by selecting a different tax withholding collectionmethod that does not involve sale of Shares, which is equivalent to terminating the trading plan), and (y) not to enter into or alter acorresponding hedging transaction or position with respect to the Shares. The Participant agrees that he or she will not change the taxwithholding collection method to Sell-To-Cover (or to the related "same-day sale" alternative) at a time when he or she would beprohibited from trading under the Company's Insider Trading Policy (as defined below).1018. Miscellaneous.(a) Headings. The headings in this Agreement are provided for convenience only and are not to serve as a basis for interpretation orconstruction of, and shall not constitute a part of, this Agreement.(b) Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to thisAward or future Awards that may be made under the Plan (or other Company equity plans) by electronic means, request theParticipant's consent to participate in the Plan (or other Company equity plans) by electronic means, or deliver vested Shares by book-entry to the Participant's account at a brokerage selected by the Company. The Participant hereby consents to receive such documentsby electronic delivery, authorizes vested shares to be delivered to such a brokerage account by book-entry, and agrees to participate inthe Plan through an on-line or electronic system established and maintained by the Company or a third-party brokerage designated bythe Company.(c) Section 409A. This Agreement and the Award are intended to comply with or be exempt from, as the case may be, Section 409Aof the Code so as to not result in any tax, penalty or interest thereunder. This Agreement and the Award shall be construed andinterpreted accordingly. Except for the Company's tax withholding rights, the Participant shall be solely responsible for any and all taxliability with respect to the Award.(d) Invalid Provision. The invalidity or unenforceability of any particular provision hereof shall not affect the other provisions hereof,and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.(e) Governing Law/Choice of Venue.(1)This Agreement and the rights of the Participant hereunder shall be construed and determined in accordance with the laws ofthe State of Delaware (without giving effect to the conflict of laws principles thereof).(2)For the purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by theAward or this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California wherethis grant is made and/or to be performed and agree that such litigation shall be conducted only in the courts of Santa ClaraCounty, California, or the federal court of the United States for the Northern District of California, and no other courts.(f) Imposition of Other Requirements. If the Participant relocates to another country after the Date of Grant, the Company reserves theright to impose other requirements on the Participant's participation in the Plan, to the extent the Company determines it is necessary oradvisable in order to comply with local law or facilitate the administration of the Plan, and to require the Participant to sign anyadditional agreements or undertakings that may be necessary to accomplish the foregoing.11(g) No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Participant's participation in the Plan, or the Participant's acquisition or sale of the underlying Shares.The Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or herparticipation in the Plan before taking any action related to the Plan.(h) Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges and agrees that he or she is subject to theCompany's Amended and Restated Insider Trading Policy as may be amended from time to time (the "Insider Trading Policy")including its restrictions that extend for a limited period of time after the Participant's termination of service. In addition, the Participantunderstands that he or she may be subject to insider trading restrictions under securities laws, market abuse laws, and/or other similarlaws, and such restrictions may affect his or her ability to acquire or sell Shares or rights to Shares. The Participant acknowledges that itis the Participant's responsibility to comply with such Company policies and any additional restrictions that may apply under applicablelaws with respect to the Participant's acquisition, holding, and any disposition of Shares or rights to Shares. (i) Recoupment. Notwithstanding any other provision herein, any recoupment or "clawback" policies adopted by the Board or theAdministrator and applicable to equity awards, as such policies are in effect from time to time, shall apply to this Award, any Sharesthat may be issued in respect of this Award, and any proceeds (including dividends and sale proceeds) of such Shares.(j) Entire Agreement. This Agreement, the Notice of Grant, and the Plan contain the entire agreement and understanding of the partieshereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations andnegotiations in respect thereto.(k) Signature and Acceptance. This Agreement shall be deemed to have been accepted and signed by the Participant and the Companyas of the Date of Grant upon the Participant's online acceptance or deemed acceptance as set forth in the Notice of Grant.(l) Modifications. The provisions of this Agreement may not be changed, modified, or waived in a manner that is adverse to theParticipant's interests except by means of a writing signed by the Participant and the Company.12APPENDIX AThis Appendix A to the Company's 2013 Stock Plan, as amended (the "Plan") Restricted Stock Unit Agreement (the "Agreement")includes special terms and conditions applicable to Participants in the countries below. These terms and conditions are in addition to orsubstitute for, as applicable, those set forth in the Agreement. Any capitalized term used in this Appendix A without definition shallhave the meaning ascribed to such term in the Plan or the Notice of Grant, as applicable.Each Participant is advised to seek appropriate professional advice as to how the relevant exchange control and tax laws in theParticipant's country may apply to the Participant's individual situation.ALL COUNTRIES OUTSIDE THE UNITED STATESThe following provisions replace Section 8(a) of the Agreement:Nature of Award. In accepting the Award, the Participant acknowledges, understands and agrees that:(i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended orterminated by the Company at any time;(ii) the Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs,or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past;(iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;(iv) the Participant's participation in the Plan will not create a right to further employment with the Employer and shall not interfere withthe ability of the Employer to terminate the Participant's employment relationship;(v) the Participant's participation in the Plan is voluntary;(vi) the Award of RSUs is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered tothe Company or to the Employer, and which is outside the scope of the Participant's employment contract, if any;(vii) the Award of RSUs is not part of normal or expected compensation or salary for any purposes, including, but not limited to,calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension orretirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to,past services for the Company, the Employer or any Subsidiary;(viii) in the event that the Participant is not an employee of the Company, the Award shall not be interpreted to form an employmentcontract or relationship with the Company; and furthermore, the Award will not be interpreted to form an employment contract with theEmployer or any Subsidiary;(ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty;13(x) no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from termination of theParticipant's Continuous Status as an Employee, Consultant or Director by the Company or the Employer (for any reason whatsoeverand whether or not in breach of local labor laws) and in consideration of the Award of RSUs to which the Participant is otherwise notentitled, the Participant irrevocably agrees never to institute any claim against the Company or the Employer, waives the ability, if any,to bring any such claim, and releases the Company and the Employer from any such claim; if, notwithstanding the foregoing, any suchclaim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Participant shall be deemed irrevocably tohave agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of suchclaims; and(xi) in the event of termination of the Participant's Continuous Status as an Employee, Consultant or Director (whether or not in breachof local labor laws), the Participant's right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that theParticipant is no longer actively employed by or does no longer actively render services to the Company or any of its Subsidiaries andwill not be extended by any notice period mandated under local law; the Administrator shall have the exclusive discretion to determinewhen the Participant is no longer actively employed for purposes of this Award of RSUs.CANADASettlement of RSUs. Notwithstanding any terms or conditions of the Plan or the Agreement to the contrary, RSUs will be settled inshares of Common Stock only, not cash.Securities Law Information. You acknowledge and agree that you will only sell shares of Common Stock acquired through participationin the Plan outside of Canada through the facilities of a stock exchange on which the Common Stock is listed. Currently, the shares ofCommon Stock are listed on the NASDAQ.Termination of Employment. This provision replaces Section 4(a) of the Agreement:In the event of your termination of employment or other service relationship (for any reason whatsoever, whether or not later found tobe invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, ifany), your right to vest in the RSUs will terminate effective as of the date that is the earlier of (1) the date you are no longer activelyproviding service or (2) the date you receive notice of termination of employment from the Employer, regardless of any notice periodor period of pay in lieu of such notice required under applicable laws (including, but not limited to statutory law, regulatory law and/orcommon law); the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes ofthe RSUs.The following provisions apply if you are resident in Quebec:Language Acknowledgment. The parties acknowledge that it is their express wish that this Agreement, including this Appendix, as wellas all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto,be provided to them in English.Consentement relatif à la langue utilisée. Les parties reconnaissent avoir expressément souhaité que la convention («Agreement») ainsique cette Annexe, ainsi que tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés en vertu de, ou liésdirectement ou indirectement à la présente convention, soient rédigés en langue anglaise.Maternity and Paternity Leave. For the avoidance of doubt, Section 4(b) of the Agreement shall not apply to any maternity or paternityleave to which employees in Canada are entitled by law.14CHINAMandatory Sale RestrictionDue to regulatory requirements in China, the Company reserves the right to require the sale of any shares of the Company's CommonStock acquired under the Plan within 30 days following the termination of the Participant's employment or service with the Company(including its subsidiaries and affiliates). The Participant authorizes the Company, in its sole discretion, to instruct its designated brokerto assist with the mandatory sale of shares of Common Stock issued upon vesting of RSUs following the Participant's termination ofemployment or service with the Company (including its subsidiaries and affiliates) and, in this regard, the Participant authorizes theCompany's designated broker to complete the sale of such Common Stock on the Participant's behalf pursuant to this authorizationupon receipt of the Company's instructions. The Participant acknowledges that neither the Company nor its designated broker isobligated to arrange for the sale of the Shares at any particular price and that, upon the sale of the Shares, the proceeds from the sale ofthe Shares, less any brokerage fees or commissions and subject to any obligation to satisfy any applicable taxes or other tax-relateditems, will be remitted to the Participant in accordance with applicable exchange control laws and regulations.Exchange Control RestrictionsThe Participant understands and agrees that, pursuant to local exchange control requirements, the Participant (i) is not permitted totransfer any Shares acquired under the Plan out of the account established by the Participant with the Company's designated broker, and(ii) will be required to repatriate all cash proceeds resulting from the Participant's participation in the Plan, including cash dividends paidby the Company on Shares acquired under the Plan and/or the sale of such Shares (together, the "cash proceeds"). The Participantfurther understands that, under local law, such repatriation may need to be effectuated through a special exchange control accountestablished by the Company or one of its subsidiaries and the Participant hereby consents and agrees that all cash proceeds may betransferred to such special account prior to being delivered to the Participant and that any interest earned on the cash proceeds prior todistribution to the Participant will be retained by the Company to partially offset the cost of administering the Plan. The Participantunderstands that the cash proceeds may be paid to the Participant from this special account in U.S. dollars or in local currency, at theCompany's discretion. If the cash proceeds are paid in U.S. dollars, the Participant understands that he or she will be required toestablish a U.S. dollar bank account in China so that the cash proceeds may be deposited into this account. If the cash proceeds areconverted to local currency, the Participant acknowledges that the Company is under no obligation to secure any exchange conversionrate, and the Company may face delays in converting the cash proceeds to local currency due to exchange control restrictions in China.The Participant agrees to bear the risk of any exchange conversion rate fluctuation between the date the cash dividend is paid and/or theShares are sold, as applicable, and the date of conversion of the cash proceeds to local currency. The Participant further agrees tocomply with any other requirements that may be imposed by the Company in the future in order to facilitate compliance with exchangecontrol requirements in China.FINLANDNo country-specific Agreement terms apply.15FRANCEData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, social security number or other Participant tax identificationnumber, employment history and status, salary, nationality, job title, and information regarding equity compensation grants or CommonStock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing andadministering the Plan ("Data"). The Company, its affiliates and Participant's employer will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Currently, thethird party is E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Companymay retain additional or different third parties for any of the purposes mentioned. The Company may also make the Data available topublic authorities where required under locally applicable law. These recipients may be located in the United States, the EuropeanEconomic Area, or elsewhere, which the Participant separately and expressly consents to, accepting that outside the EuropeanEconomic Area, data protection laws may not be as protective as within. The Participant hereby authorizes them to receive, possess,use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managingparticipation in the Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required forthe administration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom theParticipant may have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require anynecessary amendments to it or withdraw the consent herein in writing by contacting the Company through its local H.R. Director;however, withdrawing the consent may affect the Participant's ability to participate in the Plan and receive the benefits intended by thisAgreement. Data will only be held as long as necessary to implement, administer and manage the Participant's participation in the Planand any subsequent claims or rights.French Language Provision. By accepting this Agreement, Participant confirms having read and understood the documents relating tothe Plan which were provided to Participant in the English language. Participant accepts the terms of those documents accordingly.French translation: En acceptant ce Contrat vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont étécommuniqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.Exchange Control Information. If you import or export cash (e.g., sales proceeds received under the Plan) with a value equal to orexceeding €10,000 and do not use a financial institution to do so, you must submit a report to the customs and excise authorities.Tax Reporting. If you hold shares of Common Stock outside of France or maintain a foreign bank account, you are required to reportsuch to the French tax authorities when filing your annual tax return. Failure to comply could trigger significant penalties.16GERMANYAcceptance of Agreement. Notwithstanding the terms of the Agreement, a Participant must acknowledge and accept the Agreement bysigning a copy of the Agreement and returning the original signed document within 30 days after the date of the electronic mailnotification of the Agreement. For the avoidance of doubt, this Agreement may be accepted electronically or please sign and return theAgreement to: Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.No Impact on Other Rights. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right toreceive any other grant of RSUs or other awards under the Plan in the future.Exchange Control Information. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. Inthe event that you make or receive a payment in excess of this amount, you are responsible for obtaining the appropriate form from theremitting bank and complying with applicable reporting requirements.Consent to Personal Data Processing and Transfer.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company and the Participant's employer hold certain personal information, including the Participant'sname, home address and telephone number, date of birth, social security number or other Participant tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). The Company andthe Participant's employer will transfer Data to any third parties assisting the Company in the implementation, administration andmanagement of the Plan (and grants of awards made thereunder), at the time being E*Trade Financial Corporate Services, Inc., 4005Windward Plaza Drive, Alpharetta, GA 30005. These recipients are located in the European Economic Area, but also outside and in so-called insecure third-party countries that do not guarantee the data privacy protection level of the European Economic Area, forexample the United States. The Participant hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic orother form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awards madethereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants of awardsmade thereunder) on behalf of the Participant to a third party with whom the Participant may have elected to have payment madepursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consentherein in writing by contacting the Company; however, withdrawing the consent may affect the Participant's ability to participate in thePlan and receive the benefits intended by this Agreement.HONG KONGWARNING: The RSUs and Shares do not constitute a public offering of securities under Hong Kong law and are available only toEmployees. The Agreement, including this Appendix, the Plan and other incidental communication materials have not been prepared inaccordance with and are not intended to constitute a "prospectus" for a public offering of securities under the applicable securitieslegislation in Hong Kong. Nor have the documents been reviewed by any regulatory authority in Hong Kong. The RSUs are intendedonly for the personal use of each Employee and may not be distributed to any other person. If the Employee17is in any doubt about any of the contents of the Agreement, including this Appendix or the Plan, the Employee should obtainindependent professional advice.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Sale of Shares. To facilitate compliance with securities laws in Hong Kong, in the event the Employee's RSUs vest and Shares areissued to the Employee within six months of the Date of Grant, the Employee agrees that he or she will not dispose of any Sharesacquired prior to the six-month anniversary of the Date of Grant.Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of theOccupational Retirement Schemes Ordinance ("ORSO"). Notwithstanding the foregoing, if the Plan is deemed to constitute anoccupational retirement scheme for the purposes of ORSO, then the Employee's grant shall be void. INDIAExchange Control Notification. The Participant understands that he or she must repatriate any proceeds from the sale of Shares acquiredunder the Plan and any dividends received in relation to the Shares to India and convert the funds into local currency within 90 days ofreceipt. The Participant must obtain a foreign inward remittance certificate ("FIRC") from the bank where the Participant deposits theforeign currency and maintains the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or theCompany requests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.Effective April 1, 2012, you are required to declare in your annual tax return (a) any foreign assets held by you or (b) any foreign bankaccounts for which you have signing authority.IRELANDManner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 8 of the Agreement:By accepting the RSUs, the Participant acknowledges, understands, and agrees that the benefits received under the Plan will not betaken into account for any redundancy or unfair dismissal claim.Director Notification. If the Participant is a director, shadow director or secretary of an Irish subsidiary of the Company, the Participantis subject to certain notification requirements under Section 53 of the Companies Act, 1990. Among these requirements is an obligationto notify the Irish affiliate in writing within five (5) business days when the Participant receives an interest (e.g., RSUs, Shares) in theCompany and the number and class of shares or rights to which the interest relates. In addition, the Participant must notify the Irishsubsidiary within five (5) business days when the Participant sells Shares acquired under the Plan. This notification requirement alsoapplies to any rights or Shares acquired by the Participant's spouse or children (under the age of 18).18ISRAELSecurities Law Notice. This RSU Award is granted pursuant to an exemption issued by the Israeli Securities Authority under Section15D of the Securities Law of 1968. The grant of this RSU Award and the issuance of its underlying shares are registered with the U.S.Securities and Exchange Commission on Form S-8. The Company will make available to any interested Israeli offeree, at his or herworkplace, the Form S-8 and all documents attached to the Form S-8, including any document directly or indirectly referred to in theForm S-8 or in its exhibits. To request any such documents, please contact stockadmin@cypress.com.Sub-Plan and Tax-Based Restrictions. If on the Date of Grant, the Holder is an employee of the Company's subsidiary in Israel, CypressSemiconductors Ltd., then this Award is granted under and subject to the terms of the Cypress Semiconductor Corporation 2013 StockPlan Sub-Plan for Israeli Taxpayers (the "Israeli Sub-Plan") and the Participant acknowledges and agrees to the following: ThisAgreement is granted under and governed by the Plan, the Israeli Sub-Plan, Section 102(b)(2) of the Israeli Income Tax Ordinance(New Version) – 1961 and the Rules promulgated in connection therewith ("Section 102"), and the trust agreement (the "TrustAgreement") between the Company and the Trustee (as defined in the Israeli Sub-Plan).•The proceeds of any shares of Common Stock issued upon vesting of the RSUs will be remitted by the Company or itsdesignated broker to the Trustee to administer on Participant's behalf, pursuant to the terms of Section 102 and the TrustAgreement.•Participant is familiar with the terms and provisions of Section 102, particularly the Capital Gains Track (as defined in the IsraeliSub-Plan) described in subsection (b)(2) thereof, and agrees that Participant will not release or sell (or require the Trustee torelease or sell) the RSUs or underlying shares of Common Stock during the Restricted Holding Period (as defined in the IsraeliSub-Plan), unless permitted to do so by applicable law.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, social security number or other Participant tax identificationnumber, salary, nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled,purchased, vested, unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data").The Company, its affiliates and the Participant's employer will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). These recipients may be locatedin the United States, the European Economic Area, or elsewhere. The Participant hereby authorizes them to receive, possess, use, retainand transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in thePlan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administration ofthe Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan, including transfers outside of Israel and further transfers thereafter. The Participantmay, at any time, review Data, require any necessary amendments to it or withdraw the consent19herein in writing by contacting the Company; however, withdrawing the consent may affect the Participant's ability to participate in thePlan and receive the benefits intended by this Agreement.ITALYData Privacy Notice and Consent.This provision replaces the "Data Privacy" section of the Agreement.Participant hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or otherform, of personal data as described in this section of Appendix A by and among, as applicable, the Company and any Subsidiaryfor the exclusive purpose of implementing, administering and managing Participant's participation in the Plan (and grants ofawards made thereunder).Participant understands that the Company and any Subsidiary may hold certain personal information about Participant, includingbut not limited to, Participant's name, home address and telephone number, date of birth, social insurance number or otheridentification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details ofthe RSUs or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding inParticipant's favor, for the exclusive purpose of managing and administering the Plan ("Personal Data").Participant also understands that providing the Company with Personal Data is necessary for the performance of the Plan andthat Participant's denial to provide Personal Data would make it impossible for the Company to perform its contractualobligations and may affect Participant's ability to participate in the Plan. The Controller of Personal Data processing is CypressSemiconductor Corporation, with its principal offices at 198 Champion Court, San Jose, California 95134, United States ofAmerica, and, pursuant to Legislative Decree no. 196/2003, its representative is Cypress Semiconductor GmbH (a subsidiary ofCypress Semiconductor Corporation) - Willy-Brandt-Allee 4, 81829 Munich, Germany.Participant understands that Personal Data will not be publicized, but it may be transferred to banks, other financial institutionsor brokers involved in the management and administration of the Plan (and grants of awards made thereunder). Participantfurther understands that the Company and/or a Subsidiary will transfer Personal Data amongst themselves as necessary for thepurpose of implementation, administration and management of Participant's participation in the Plan (and grants of awards madethereunder), and that the Company and/or a Subsidiary may each further transfer Personal Data to third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder), includingany requisite transfer of Personal Data to a broker or other third party with whom Participant may elect to deposit any Sharesacquired under the Plan. Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form,for the purposes of implementing, administering and managing Participant's participation in the Plan (and grants of awards madethereunder). Participant understands that these recipients may be located in or outside the European Economic Area, such as inthe United States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connectedwith the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessarylegal obligations connected with the management and administration of the Plan.20Participant understands that Personal Data processing related to the purposes specified above shall take place under automatedor non-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected andwith confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to LegislativeDecree no. 196/2003.The processing activity, including communication, the transfer of Personal Data abroad, including outside of the EuropeanEconomic Area as specified herein and pursuant to applicable laws and regulations, does not require Participant's consent theretoas the processing is necessary to performance of contractual obligations related to implementation, administration andmanagement of the Plan (and grants of awards made thereunder). Participant understands that, pursuant to Section 7 of theLegislative Decree no. 196/2003, Participant has the right to, including but not limited to, access, delete, update, correct or stop,for legitimate reason, the Personal Data processing. Furthermore, Participant is aware that Personal Data will not be used fordirect marketing purposes. In addition, Personal Data provided can be reviewed and questions or complaints can be addressed bycontacting Participant's human resources department.Plan Document Acknowledgment. In accepting the RSU, the Participant acknowledges that a copy of the Plan was made available tothe Participant and that the Participant has reviewed the Plan and the Agreement, including this Appendix, in their entirety and fullyunderstands and accepts all provisions of the Plan, the Agreement and this Appendix. The Participant further acknowledges that he or she has read and specifically and expressly approves the following provisions in theAgreement: Vesting Schedule and Vesting Conditions and Nature of Award, as well as the following provision in the Plan: RestrictedStock/Restricted Stock Units.Additional Tax/Exchange Control Information. You are required to report in your annual tax return: (a) any transfers of cash orCommon Stock to or from Italy exceeding €10,000 or the equivalent amount in U.S. dollars; (b) any foreign investments or investments(including proceeds from the sale of Common Stock acquired under the Plan) held outside of Italy exceeding €10,000 or the equivalentamount in U.S. dollars, if the investment may give rise to taxable income in Italy; and (c) the amount of the transfers to and from abroadwhich have had an impact during the calendar year on your foreign investments or investments held outside of Italy. Under certaincircumstances, you may be exempt from requirement under (a) above if the transfer or investment is made through an authorizedbroker resident in Italy.JAPANData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold the following personal information for thepurpose of managing and administering the Plan ("Data"): the Participant's name, home address and telephone number, date of birth,social security number or other Participant tax identification number, salary, nationality, job title, and information regarding equitycompensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor. Fromtime to time, the Company may change the scope of its affiliates that hold, use or process Participant's personal information or the scopeof Participant's personal information to be held,21used or processed by the Company, its affiliates and the Participant's employer, by providing, or making easily accessible, informationabout such change to the Participant. The Company and its affiliates will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). These recipients may be locatedin the United States, the European Economic Area, Japan or elsewhere. The Participant hereby authorizes them to receive, possess, use,retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation inthe Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administrationof the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessary amendmentsto it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affect theParticipant's ability to participate in the Plan and receive the benefits intended by this Agreement.KOREAExchange Control Information. Korean residents who realize US$500,000 or more from the sale of shares of Common Stock or receiptof dividends in a single transaction are required to repatriate the proceeds to Korea within 18 months of receipt.MALAYSIAData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information from theParticipant's Participant records, including the Participant's name, home address and telephone number, date of birth, social securitynumber or other Participant tax identification number, salary, nationality, job title, and information regarding equity compensationgrants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Participant's favor, for the purpose ofmanaging and administering the Plan ("Data"). The Company and its affiliates will transfer Data to any third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder) and will disclosecertain Data to the Inland Revenue Board and other relevant authorities as required by law. These recipients may be located in theUnited States, the European Economic Area, Malaysia or elsewhere. The Participant hereby authorizes them to receive, possess, use,retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation inthe Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may be required for the administrationof the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participant may haveelected to have payment made pursuant to the Plan. The Data will be retained by the Company, its affiliates and the Participant'semployer for the entire duration of the Participant's employment or service and for a further seven years after cessation of employmentor service. The holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent herein in writingby contacting Zauyah Kechik (or other authorized individual), at Sdn. Bhd. (613545-T), Phase II, Free Industrial Zone, Bayan Lepas,11900 Penang, Malaysia; site phone no: +60 4 888 2000.22Disclosure of Data is obligatory for the implementation, administration and management of the Plan (and grants of awards madethereunder); however, withdrawing the consent may affect the Participant's ability to participate in the Plan and receive the benefitsintended by this Agreement.Director Notification. If the Participant is a director of a subsidiary or other related company in Malaysia, then the Participant is subjectto certain notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an obligation to notify theMalaysian subsidiary in writing when the Participant receives an interest (e.g., RSUs, Shares) in the Company or any related companies.In addition, the Participant must notify the Malaysian subsidiary when he or she sells Shares of the Company or any related company(including when the Participant sells Shares acquired under the Plan). These notifications must be made within 14 days of acquiring ordisposing of any interest in the Company or any related company.Securities Law Information. Malaysian insider-trading rules may impact the acquisition or disposal of Shares or rights to Shares underthe Plan. Under such rules, the Participant is prohibited from acquiring Shares or rights to Shares (e.g., RSUs) or selling Shares when heor she possesses information that is not generally available and which the Participant knows or should know will have a material effecton the price of the Shares once such information is generally available. By accepting this grant, the Participant acknowledges that he orshe is not in possession of any material, non-publicly disclosed information regarding the Company at the time of grant and will notacquire or sell Shares when in possession of any material, non-publicly disclosed information regarding the Company.PHILIPPINESSecurities Law Information. The sale or disposal of Shares acquired under the Plan may be subject to certain restrictions underPhilippines securities laws. Those restrictions should not apply if the offer and resale of Shares takes place outside of the Philippinesthrough the facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the NASDAQ. TheCompany's designated broker should be able to assist the Participant in the sale of Shares on the NASDAQ. If the Participant hasquestions with regard to the application of Philippines securities laws to the disposal or sale of Shares acquired under the Plan theParticipant should consult with his or her legal advisor.SINGAPORESecurities Law Information. The RSUs were granted to the Participant pursuant to the "Qualifying Person" exemption under section273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) ("SFA"). The Agreement and the Plan have not beenlodged or registered as a prospectus with the Monetary Authority of Singapore. The Participant should note that the Participant's RSUsare subject to section 257 of the SFA and the Participant will not be able to make any subsequent sale in Singapore, or any offer of suchsubsequent sale of the Shares unless such sale or offer in Singapore is made pursuant to the exemptions under Part XIII Division(1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).Director Notification. If the Participant is a director, associate director or shadow director of a subsidiary or other related company inSingapore, the Participant is subject to certain notification requirements under the Singapore Companies Act. Among these requirementsis an obligation to notify the Singapore subsidiary in writing when the Participant receives an interest (e.g., RSUs, Shares) in theCompany or any related company. In addition, the Participant must notify the Singapore subsidiary when the Participant sells Shares ofthe Company or any related company (including when the Participant sells Shares acquired under the Plan). These notifications must bemade within two business days of acquiring or disposing of any interest in the23Company or any related company. In addition, a notification must be made of the Participant's interests in the Company or any relatedcompany within two business days of becoming a director.Insider Trading Notification. You should be aware of the Singapore insider trading rules, which may impact the acquisition or disposalof shares or rights to shares of Common Stock under the Plan. Under the Singapore insider trading rules, you are prohibited fromacquiring or selling shares of Common Stock or rights to shares of Common Stock (e.g., RSUs under the Plan) when you are inpossession of information which is not generally available and which you know or should know will have a material effect on the priceof Common Stock once such information is generally available.SWEDENNo country-specific Agreement terms apply.TAIWANExchange Control Information. You may remit foreign currency (including proceeds from the sale of Common Stock) into or out ofTaiwan up to US$5,000,000 per year without special permission. If the transaction amount is TWD500,000 or more in a singletransaction, you must submit a Foreign Exchange Transaction Form to the remitting bank and provide supporting documentation to thesatisfaction of the remitting bank.THAILANDNo country-specific Agreement terms apply.THE NETHERLANDSData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information, including theParticipant's name, home address and telephone number, date of birth, citizen service number (burgerservicenummer) (former socialsecurity number) or other Participant tax identification number (insofar as allowed), salary, nationality, job title, and informationregarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in theParticipant's favor, for the purpose of managing and administering the Plan ("Data"). The Company and its affiliates will transfer Data toany third parties assisting the Company in the implementation, administration and management of the Plan (and grants of awards madethereunder). Currently, the third parties are E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA30005., however the Company may retain additional or different third parties for any of the purposes mentioned. These recipients maybe located in the United States, the European Economic Area, or elsewhere. Countries outside the European Economic Area do notprovide for a similar level of data protection as within the European Economic Area pursuant to the European Data Protection Directive95/46/EC. The Participant hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, forthe purposes of implementing, administering and managing participation in the Plan (and grants of awards made thereunder), includingany requisite transfer of such Data as may be required for the24administration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participantmay have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessaryamendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affectthe Participant's ability to participate in the Plan and receive the benefits intended by this Agreement. The holder understands that he orshe may request a list of the names and addresses of the third party recipients of Data by contacting the Company through its local H.R.Representative at Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.UNITED KINGDOMEligible Individual. For the purpose of RSUs awarded in the UK, Consultants and Outside Directors are not eligible to receive awards.Tax Withholding.The following is added to the "Responsibility for Taxes" section of the Agreement.The Participant will be liable for and agrees to indemnify and keep indemnified the Company, any subsidiary and his/her employingcompany, if different, from and against any liability for or obligation to pay any Tax Liability (a "Tax Liability" being any liability forincome tax, Participant's National Insurance contributions and employer's National Insurance Contributions) that is attributable to (i) thegrant or vesting of, or any benefit derived by the Participant from, the RSUs, (ii) the acquisition by the Participant of the Common Stockon the settlement of the RSUs, or (iii) the disposal of any Common Stock.The RSUs will not vest until the Participant has made such arrangements as the Company may require for the satisfaction of any TaxLiability that may arise in connection with the vesting or settlement of the RSUs and/or the acquisition of the Common Stock by theParticipant. The Company shall not be required to issue, allot or transfer Common Stock until the Participant has satisfied thisobligation.No Right to Continued Employment.This provision supplements the "Nature of Award" section of the Agreement.Neither the RSUs nor this Agreement:(i)confers upon the Participant any right to continue to be an Employee, Consultant or Director of the Company or any of itssubsidiaries or interferes in any way with the right of the Company or any of its subsidiaries to terminate the Participant'semployment at any time; or(ii)forms part of the Participant's entitlement to remuneration and benefits in terms of his/her employment, or affects theParticipant's terms and conditions of employment.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Participant acknowledges and consents to the collection, use, processing and transfer of personaldata as described below. The Company, its affiliates and the Participant's employer hold certain personal information (includingsensitive personal information) such as the Participant's name,25home address and telephone number, date of birth, social security number or other Participant tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Participant's favor, for the purpose of managing and administering the Plan ("Data"). By participating inthe Plan, the Participant agrees that the Company, its affiliates and the Participant's employer may hold and process such Data, and maytransfer Data to any third parties assisting the Company or its affiliates in the implementation, administration and management of thePlan (and grants of awards made thereunder). These recipients may be located in the United States, the European Economic Area, orelsewhere. The Participant hereby authorizes them to receive, possess, process, use, hold, retain and transfer the Data, in electronic orother form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awards madethereunder) and in the course of the Company's business, including any requisite transfer of such Data as may be required for theadministration of the Plan (and grants of awards made thereunder) on behalf of the Participant to a third party with whom the Participantmay have elected to have payment made pursuant to the Plan. The Participant may, at any time, review Data, require any necessaryamendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consent may affectthe Participant's ability to participate in the Plan and receive the benefits intended by this Agreement.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or this Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Joint Election. As a condition of the grant of RSUs, the Participant agrees to accept any liability for secondary Class 1 NationalInsurance contributions (the "Employer NICs") which may be payable by the Company or the Employer with respect to the vesting ofthe RSUs or otherwise payable with respect to a benefit derived in connection with the RSUs.Without limitation to the foregoing, if requested by the Company, the Participant agrees to execute a joint election between theCompany and/or the Employer and Participant (the "Joint Election"), the form of such Joint Election being formally approved by HerMajesty's Revenue & Customs ("HMRC"), and any other consent or election required to accomplish the transfer of the Employer NICsto the Participant. The Participant further agrees to execute such other joint elections as may be required between the Participant andany successor to the Company and/or the Employer. If the Participant does not enter into a Joint Election in response to a Companyrequest, no Shares shall be issued to the Participant (and neither the Company nor the Employer shall have any liability with respect tosuch non-issuance of shares). The Participant further agrees that the Company and/or the Employer may collect the Employer NICsfrom the Participant by any means.If the Participant has signed a Joint Election in the past with respect to an RSU award granted to him or her by the Company and thatJoint Election applies to all grants made under the Plan, the Participant need not sign another Joint Election in connection with thisRSU grant.Responsibility for Taxes. This provision supplements the Agreement:You agree that, if you do not pay or the Employer or the Company does not withhold from you the full amount of Tax-Related Itemsthat you owe at vesting and settlement of the RSUs, or the release or assignment of the RSUs for consideration, or the receipt of anyother benefit in connection with the RSUs (the "Taxable Event") within 90 days after the Taxable Event, or such other period specifiedin Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the amount of income tax that should have beenwithheld shall constitute a loan owed by you to the Employer, effective 90 days after the Taxable Event. You agree that the loan willbear interest at the HMRC official rate and will be immediately due and repayable by you, and the Company and/or the Employer mayrecover it at any time thereafter by withholding the26funds from salary, bonus or any other funds due to you by the Employer, by withholding in shares of Common Stock issued uponvesting of your RSUs or from the cash proceeds from the sale of shares of Common Stock or by demanding cash or a cheque from you.You also authorize the Company to delay the issuance of any shares of Common Stock unless and until the loan is repaid in full.Notwithstanding the foregoing, if you are a director or executive officer (as within the meaning of Section 13(k) of the U.S. SecuritiesExchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that you are such adirector or executive officer and the income tax that is due is not collected from or paid by you within 90 days of the Taxable Event, theamount of any uncollected income tax may constitute a benefit to you on which additional income tax and national insurancecontributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directlyto the HMRC under the self-assessment regime and for reimbursing the Company or the Employer (as appropriate) for the value of anyParticipant national insurance contributions due on this additional benefit.27Exhibit 10.3.1SPANSION INC.2010 EQUITY INCENTIVE AWARD PLAN(As Amended and Restated Effective August 5, 2016)ARTICLE 1. PURPOSEThe Spansion Inc. 2010 Equity Incentive Award Plan (the “Plan”) was previously adopted by Spansion Inc. (“Spansion”).Effective as of March 12, 2015, Spansion was merged into a subsidiary of Cypress Semiconductor Corporation (“Cypress”) and, as aresult of the merger, became a wholly-owned subsidiary of Cypress. Further, in connection with the merger, all awards thenoutstanding under the Plan were assumed by Cypress and shares of common stock of Cypress (“Cypress Common Stock”) weresubstituted for common stock of Spansion under such then outstanding awards.Effective March 12, 2015, Cypress assumed the Plan to permit grants of Awards (as defined herein) under the Plan with respectto Cypress Common Stock. it is now desirable for Cypress to amend the Plan effective August 5, 2016. The following provisionsconstitute an amendment and restatement of the Plan effective as of August 5, 2016, the “Effective Date” of the Plan as set forthherein. The provisions of the Plan as amended and restated shall apply only to Awards made under the Plan after the Effective Date.The purpose of the Plan shall be to promote the success and enhance the value of Cypress and its affiliates by linking the personalinterests of Employees and Consultants (as defined in Article 2) to those of Cypress’s stockholders and by providing such individualswith an incentive for outstanding performance to generate superior returns to Cypress’s stockholders. The Plan is further intended toprovide flexibility to Cypress in its ability to motivate, attract, and retain the services of Employees and Consultants upon whosejudgment, interest, and special effort the successful conduct of Cypress’s operation is largely dependent.ARTICLE 2. DEFINITIONS AND CONSTRUCTIONWherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearlyindicates otherwise. The singular pronoun shall include the plural where the context so indicates.2.1 “Administrator” shall mean the entity that conducts the general administration of the Plan as provided inArticle 12. With reference to the duties of the Committee under the Plan which have been delegated to one or morepersons pursuant to Section 12.6, or as to which the Board has assumed, the term “Administrator” shall refer to suchperson(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumptionof such duties.2.2 “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a PerformanceAward, a Dividend Equivalents award, a Deferred Stock award, a Stock Payment award or a Stock AppreciationRight, which may be awarded or granted under the Plan (collectively, “Awards”).2.3 “Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or otherinstrument or document evidencing an Award, including through electronic medium, which shall contain such termsand conditions with respect to an Award as the Administrator shall determine consistent with the Plan.2.4 “Board” shall mean the Board of Directors of Cypress.2.5 “Change in Control” shall mean and includes each of the following:(a) A transaction or series of transactions (other than an offering of Common Stock to the general public through aregistration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons”(as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than Cypress, any of its parents or subsidiaries,an employee benefit plan maintained by Cypress or any of its subsidiaries or a “person” that, prior to such transaction, directly orindirectly controls, is controlled by, or is under common control with, Cypress) directly or indirectly acquires beneficial ownership(within the meaning of Rule 13d-3 under the Exchange Act) of securities of Cypress possessing more than 50% of the totalcombined voting power of Cypress’s securities outstanding immediately after such acquisition; or(b) During any period of two consecutive years, individuals who, at the beginning of such period, constitute theBoard together with any new director(s) (other than a director designated by a person who shall have entered into an agreement withCypress to effect a transaction described in Section 2.5(a) or Section 2.5(c)) whose election by the Board or nomination for electionby Cypress’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directorsat the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for anyreason to constitute a majority thereof; or(c) The consummation by Cypress (whether directly involving Cypress or indirectly involving Cypress throughone or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other dispositionof all or substantially all of Cypress’s assets in any single transaction or series of related transactions or (z) the acquisition of assetsor stock of another entity, in each case other than a transaction:(i) Which results in Cypress’s voting securities outstanding immediately before the transaction continuing torepresent (either by remaining outstanding or by being converted into voting securities of Cypress or the person that, as a result of thetransaction, controls, directly or indirectly, Cypress or owns, directly or indirectly, all or substantially all of Cypress’s assets orotherwise succeeds to the business of Cypress (Cypress or such person, the “Successor Entity”)) directly or indirectly, at least amajority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and(ii) After which no person or group beneficially owns voting securities representing 50% or more of thecombined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of thisSection 2.5(c)(ii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the votingpower held in Cypress prior to the consummation of the transaction; or(d) Cypress’s stockholders approve a liquidation or dissolution of Cypress.In addition, if a Change in Control constitutes a payment event with respect to any Award which provides for the deferral ofcompensation and is subject to Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) withrespect to such Award mustalso constitute a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) to the extent required by Section 409A.The Committee shall have full and final authority, which shall be exercised in its discretion, to determine conclusively whether aChange in Control has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and anyincidental matters relating thereto.2.6 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.2.7 “Committee” shall mean the Compensation Committee of the Board, or another committee orsubcommittee of the Board, appointed as provided in Section 12.1.2.8 “Common Stock” shall mean the common stock of Cypress.2.9 “Consultant” shall mean any consultant or adviser (i) engaged to provide services to Spansion or anysubsidiary of Spansion or (ii) engaged to provide services to Cypress or any Subsidiary on or after March 12, 2015, thatqualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shareson a Form S-8 Registration Statement.2.10 “Cypress” shall mean Cypress Semiconductor Corporation, a Delaware corporation.2.11 “Deferred Stock” shall mean a right to receive Common Stock awarded under Section 8.4.2.12 “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Common Stock) ofdividends paid on Common Stock, awarded under Section 8.2.2.13 “DRO” shall mean a domestic relations order as defined by the Code or Title I of the EmployeeRetirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.2.14 “Effective Date” shall mean August 5, 2016.2.15 “Eligible Individual” shall mean any person who is an Employee or a Consultant, as determined by theCommittee.2.16 “Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c)of the Code and the Treasury Regulations thereunder) of Spansion or of any subsidiary of Spansion. Employee shallalso mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and theTreasury Regulations thereunder) of Cypress or of any Subsidiary so long as such person was hired by Cypress or suchSubsidiary after March 12, 2015.2.17 “Equity Restructuring” shall mean a nonreciprocal transaction between Cypress and its stockholders,such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cashdividend, that affects the number or kind of shares of Common Stock (or other securities of Cypress) or the share priceof Common Stock (or other securities) and causes a change in the per share value of the Common Stock underlyingoutstanding Awards.2.18 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.2.19 “Fair Market Value” shall mean, as of any given date, the value of a share of Common Stock determinedas follows:(a) If the Common Stock is listed on any established stock exchange (such as the New York Stock Exchange, theNASDAQ Global Market and the NASDAQ Global Select Market) or national market system, its Fair Market Value shall be theclosing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing salesprice for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the lastpreceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administratordeems reliable;(b) If the Common Stock is not listed on an established stock exchange or national market system, but theCommon Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid andlow asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the highbid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported inThe Wall Street Journal or such other source as the Administrator deems reliable; or(c) If the Common Stock is neither listed on an established stock exchange or a national market system norregularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.2.20 “Full Value Award” shall mean any Award for which the Holder pays less than Fair Market Value as ofthe date of grant of such Award for the shares of Common Stock underlying such Award.2.21 “Holder” shall mean a person who has been granted an Award.2.22 “Nonstatutory Stock Option” shall mean an Option that is not intended to qualify as an incentive stockoption and does not conform to the applicable provisions of Section 422 of the Code.2.23 “Option” shall mean a right to purchase shares of Common Stock at a specified exercise price, grantedunder Article 5. Any Options granted shall be Nonstatutory Stock Options.2.24 “Performance Award” shall mean a cash bonus award, stock bonus award, performance award orincentive award that is paid in cash, Common Stock or a combination of both, awarded under Section 8.1.2.25 “Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Awardfor purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined asfollows:(a) The Performance Criteria that shall be used to establish Performance Goals are limited to the following: (i) netearnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization), (ii) grossor net sales or revenue, (iii) net income (either before or after taxes), (iv) operating earnings or profit, (v) cash flow (including, butnot limited to, operating cash flow and free cash flow), (vi) return on assets, (vii) return on capital, (viii) return on stockholders’equity, (ix) return on sales, (x) gross or net profit or operating margin, (xi) costs, (xii) funds from operations, (xiii) expenses, (xiv)working capital, (xv) earnings per share, (xvi) price per share of Common Stock, (xvii) regulatory body approval forcommercialization of a product, (xviii) implementation or completion of critical projects and (xix) market share, any of which maybe measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peergroup or to market performance indicators or indices.(b) The Administrator may, in its sole discretion, provide that one or more objectively determinable adjustmentsshall be made to one or more of the Performance Goals. Such adjustments may include one or more of the following: (i) itemsrelated to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivityinitiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of anyentity acquired by Cypress during the Performance Period; (vii) items related to the disposal of a business or segment of a business;(viii) items related to discontinued operations that do not qualify as a segment of a business under United States generally acceptedaccounting principles (“GAAP”); (ix) items attributable to any stock dividend, stock split, combination or exchange of sharesoccurring during the Performance Period; or (x) any other items of significant income or expense which are determined to beappropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii) itemsrelated to amortization of acquired intangible assets; (xiii) items that are outside the scope of Cypress’s core, on-going businessactivities; or (xiv) items relating to any other unusual or nonrecurring events or changes in applicable laws, accounting principles orbusiness conditions.2.26 “Performance Goals” shall mean, for a Performance Period, one or more goals established in writing bythe Administrator for the Performance Period based upon one or more Performance Criteria or other performancemetrics determined by the Committee. Depending on the Performance Criteria or other performance metrics used toestablish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performanceor the performance of a division, business unit, or an individual.2.27 “Performance Period” shall mean one or more periods of time, which may be of varying and overlappingdurations, as the Administrator may select, over which the attainment of one or more Performance Goals will bemeasured for the purpose of determining a Holder’s right to, and the payment of, a Performance Award.2.28 “Plan” shall mean this Spansion Inc. 2010 Equity Incentive Award Plan, as it may be amended orrestated from time to time.2.29 “Restricted Stock” shall mean Common Stock awarded under Article 7 that is subject to certainrestrictions and may be subject to risk of forfeiture or repurchase.2.30 “Restricted Stock Units” shall mean the right to receive Common Stock awarded under Section 8.5.2.31 “Securities Act” shall mean the Securities Act of 1933, as amended.2.32 “Stock Appreciation Right” shall mean a stock appreciation right granted under Article 9.2.33 “Stock Payment” shall mean (a) a payment in the form of shares of Common Stock, or (b) an option orother right to purchase shares of Common Stock, as part of a bonus, deferred compensation or other arrangement,awarded under Section 8.3.2.34 “Subsidiary” means any entity (other than Cypress), whether domestic or foreign, in an unbroken chainof entities beginning with Cypress if each of the entities other than the last entity in the unbroken chain beneficiallyowns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the totalcombined voting power of all classes of securities or interests in one of the other entities in such chain.2.35 “Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or insubstitution for, outstanding equity awards previously granted by a company or other entity in connection with acorporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided,however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection withthe cancellation and repricing of an Option or Stock Appreciation Right.2.36 “Termination of Service” shall mean:(a) As to a Consultant, the time when the engagement of a Holder as a Consultant to Spansion, Cypress or any oftheir affiliates is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death orretirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service withCypress or any of its affiliates.(b) As to an Employee, the time when the employee-employer relationship between a Holder and Spansion,Cypress or any of their affiliates is terminated for any reason, including, without limitation, a termination by resignation, discharge,death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employmentor service with Cypress or any of its affiliates.The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to a Termination ofService, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and allquestions of whether particular leaves of absence constitute a Termination of Service. For purposes of the Plan, a Holder’s employee-employer relationship or consultancy engagement shall be deemed to be terminated in the event that Cypress or the Subsidiaryemploying or contracting with such Holder ceases to remain a Subsidiary of Cypress following any merger, sale of stock or othercorporate transaction or event (including, without limitation, a spin-off).ARTICLE 3. SHARES SUBJECT TO THE PLAN3.1 Number of Shares.(a) Subject to Section 12.2 and Section 3.1(b) the aggregate number of shares of Common Stock which may beissued or transferred pursuant to Awards under the Plan is (i) 22,002,556 (provided, that subject to Section 12.2 and, with respect toFull Value Awards that terminate, expire or lapse or for which shares of Common Stock are tendered or withheld, the aggregatenumber of shares of Common stock which may be issued or transferred pursuant to Full Value Awards under this Section 3.1(a)(i)is 61,299). Notwithstanding the foregoing, no more than 1,222,598 shares of Common Stock may be issued upon the exercise ofIncentive Stock Options.(b) To the extent that an Award terminates, expires, or lapses for any reason, or an Award is settled in cash withoutthe delivery of shares to the Holder, then any shares of Common Stock subject to the Award shall again be available for the grant ofan Award pursuant to the Plan. Any shares of Common Stock tendered or withheld to satisfy the grant or exercise price or taxwithholding obligation pursuant to any Award shall again be available for the grant of an Award pursuant to the Plan. Any shares ofCommon Stock repurchased by Cypress prior to vesting so that such shares are returned to Cypress will again be available forAwards. To the extent permitted by applicable law or any exchange rule, shares of Common Stock issued in assumption of, or insubstitution for, any outstanding awards of any entity acquired in any form of combination by Cypress or any of its affiliates shallnot be counted against shares of Common Stock available for grant pursuant to the Plan. The payment of Dividend Equivalents incash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan.3.2 Stock Distributed. Any Common Stock distributed pursuant to an Award may consist, in whole or in part,of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.ARTICLE 4. GRANTING OF AWARDS4.1 Participation. The Administrator may, from time to time, select from among all Eligible Individuals, thoseto whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not beinconsistent with the requirements of the Plan. No Eligible Individual shall have any right to be granted an Awardpursuant to the Plan.4.2 Award Agreement. Each Award shall be evidenced by an Award Agreement.4.3 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan,and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall besubject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act(including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application ofsuch exemptive rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereundershall be deemed amended to the extent necessary to conform to such applicable exemptive rule.4.4 At-Will Employment. Nothing in the Plan or in any Award Agreement hereunder shall confer upon anyHolder any right to continue in the employ of, or as a director or consultant for, Cypress, Spansion or any of theirrespective affiliates, or shall interfere with or restrict in any way the rights of Cypress, Spansion or any of their affiliates,which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with orwithout cause, except to the extent expressly provided otherwise in a written agreement between the Holder andCypress, Spansion or any Subsidiary.4.5 Foreign Holders. Notwithstanding any provision of the Plan to the contrary, in order to comply with thelaws in other countries in which Cypress, and the Subsidiaries operate or have Employees or Consultants, or in order tocomply with the requirements of any foreign stock exchange, the Administrator, in its sole discretion, shall have thepower and authority to: (a) determine which Subsidiaries shall be covered by the Plan; (b) determine which EligibleIndividuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of anyAward granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listingrequirements of any such foreign stock exchange; (d) establish subplans and modify exercise procedures and otherterms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modificationsshall be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shallincrease the share limitations contained in Sections 3.1; and (e) take any action, before or after an Award is made, that itdeems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions orapprovals or listing requirements of any such foreign stock exchange. Notwithstanding the foregoing, the Administratormay not take any actions hereunder, and no Awards shall be granted, that would violate the Exchange Act, theSecurities Act or any other securities law or governing statute or any other applicable law.4.6 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the sole discretion of theAdministrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan.Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at adifferent time from the grant of such other Awards.ARTICLE 5. GRANTING OF OPTIONS5.1 Granting of Options to Eligible Individuals. The Administrator is authorized to grant Options to EligibleIndividuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not beinconsistent with the Plan.5.2 Option Exercise Price. The exercise price per share of Common Stock subject to each Option shall be setby the Administrator, but shall not be less than 100% of the Fair Market Value of a share of Common Stock on the datethe Option is granted, unless otherwise determined by the Administrator.5.3 Option Term. The term of each Option shall be set by the Administrator in its sole discretion; provided,however, that the term shall not be more than seven (7) years from the date the Option is granted The Administratorshall determine the time period, including the time period following a Termination of Service, during which the Holderhas the right to exercise the vested Options, which time period may not extend beyond the term of the Option term.Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder, theAdministrator may extend the term of any outstanding Option, and may extend the time period during which vestedOptions may be exercised, in connection with any Termination of Service of the Holder, and may amend any otherterm or condition of such Option relating to such a Termination of Service.5.4 Option Vesting.(a) The Administrator shall determine the period during which a Holder shall vest in an Option and have the rightto exercise such Option in whole or in part. Such vesting may be based on service with Cypress, Spansion or any Subsidiary, any ofthe Performance Criteria, or any other criteria selected by the Administrator. At any time after grant of an Option, the Administratormay, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Optionvests.(b) No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter becomeexercisable, except as may be otherwise provided by the Administrator either in the Award Agreement or by action of theAdministrator following the grant of the Option.5.5 Substitute Awards. Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the caseof an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than theFair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (asof the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregateexercise price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediatelypreceding the transaction giving rise to the Substitute Award, such fair market value to be determined by theAdministrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for byCypress, over (y) the aggregate exercise price of such shares.5.6 Substitution of Stock Appreciation Rights. The Administrator may provide in the Award Agreementevidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a StockAppreciation Right for such Option at any time prior to or upon exercise of such Option; provided, that such StockAppreciation Right shall be exercisable with respect to the same number of shares of Common Stock for which suchsubstituted Option would have been exercisable.ARTICLE 6. EXERCISE OF OPTIONS6.1 Partial Exercise. An exercisable Option may be exercised in whole or in part. However, an Option shallnot be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, apartial exercise must be with respect to a minimum number of shares.6.2 Manner of Exercise. All or a portion of an exercisable Option shall be deemed exercised upon delivery ofall of the following to the Secretary of Cypress, or such other person or entity designated by the Administrator, or his,her or its office, as applicable:(a) A written notice complying with the applicable rules established by the Administrator stating that the Option, ora portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled to exercise the Option or suchportion of the Option;(b) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable toeffect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws orregulations. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect suchcompliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents andregistrars;(c) In the event that the Option shall be exercised pursuant to Section 10.3 by any person or persons other than theHolder, appropriate proof of the right of such person or persons to exercise the Option; and(d) Full payment of the exercise price and applicable withholding taxes to the Secretary of Cypress for the shareswith respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 10.1 and 10.2.ARTICLE 7. AWARD OF RESTRICTED STOCK7.1 Award of Restricted Stock.(a) The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the termsand conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not beinconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.(b) The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock;provided, however, that such purchase price shall be no less than the par value of the Common Stock to be purchased, unlessotherwise permitted by applicable state law. In all cases, legal consideration shall be required for each issuance of Restricted Stock.7.2 Rights as Stockholders. Subject to Section 7.4, upon issuance of Restricted Stock, the Holder shall have,unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said shares, subject to therestrictions in his or her Award Agreement, including the right to receive all dividends and other distributions paid ormade with respect to the shares; provided, however, that, in the sole discretion of the Administrator, any extraordinarydistributions with respect to the Common Stock shall be subject to the restrictions set forth in Section 7.3.7.3 Restrictions. All shares of Restricted Stock (including any shares received by Holders thereof with respectto shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in theterms of each individual Award Agreement, be subject to such restrictions and vesting requirements as theAdministrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights andtransferability and such restrictions may lapse separately or in combination at such times and pursuant to suchcircumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based onthe Holder’s duration of employment or consultancy with Cypress, the Performance Criteria or other performancemetrics, Company performance, individual performance or other criteria selected by the Administrator. By action takenafter the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to beappropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by theterms of the Award Agreement. Restricted Stock may not be sold or encumbered until all restrictions are terminated orexpire.7.4 Repurchase or Forfeiture of Restricted Stock. If no price was paid by the Holder for the Restricted Stock,upon a Termination of Service the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse,and such Restricted Stock shall be surrendered to Cypress and cancelled without consideration. The Administrator in itssole discretion may provide that in the event of certain events, including a Change in Control, the Holder’s death,retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvestedRestricted Stock shall not lapse and such Restricted Stock shall vest.7.5 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced in suchmanner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock mustinclude an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, andCypress may, in its sole discretion, retain physical possession of any stock certificate until such time as all applicablerestrictions lapse.7.6 Section 83(b) Election. If a Holder makes an election under Section 83(b) of the Code to be taxed withrespect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates uponwhich the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver acopy of such election to Cypress promptly after filing such election with the Internal Revenue Service.ARTICLE 8. AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERREDSTOCK, STOCK PAYMENTS, RESTRICTED STOCK UNITS8.1 Performance Awards.(a) The Administrator is authorized to grant Performance Awards to any Eligible Individual. The value ofPerformance Awards may be linked to any one or more of the Performance Criteria or other specific criteria determined by theAdministrator, in each case on a specified date or dates or over any period or periods determined by the Administrator In makingsuch determinations, the Administrator shall consider (among such other factors as it deems relevant in light of the specific type ofAward) the contributions, responsibilities and other compensation of the particular Eligible Individual. Performance Awards may bepaid in cash, shares of Common Stock, or both, as determined by the Administrator.(b) Without limiting Section 8.1(a), the Administrator may grant Performance Awards to any Eligible Individual inthe form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or notobjective, which are established by the Administrator, in each case on a specified date or dates or over any period or periodsdetermined by the Administrator.8.2 Dividend Equivalents.(a) Dividend Equivalents may be granted by the Administrator based on dividends declared on the CommonStock, to be credited as of dividend payment dates during the period between the date an Award is granted to a Holder and the datesuch Award vests, is exercised, is distributed or expires, as determined by the Administrator. Such Dividend Equivalents shall beconverted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may bedetermined by the Administrator.(b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or StockAppreciation Rights, unless otherwise determined by the Administrator.8.3 Stock Payments. The Administrator is authorized to make Stock Payments to any Eligible Individual. Thenumber or value of shares of any Stock Payment shall be determined by the Administrator and may be based upon oneor more Performance Criteria or any other specific criteria, including service to Cypress, Spansion or any Subsidiary,determined by the Administrator. Stock Payments may, but are not required to be made in lieu of base salary, bonus,fees or other cash compensation otherwise payable to such Eligible Individual.8.4 Deferred Stock. The Administrator is authorized to grant Deferred Stock to any Eligible Individual. Thenumber of shares of Deferred Stock shall be determined by the Administrator and may be based on one or morePerformance Criteria or other specific criteria, including service to Cypress, Spansion or any Subsidiary, as theAdministrator determines, in each case on a specified date or dates or over any period or periods determined by theAdministrator. Common Stock underlying a Deferred Stock award will not be issued until the Deferred Stock awardhas vested, pursuant to a vesting schedule or other conditions or criteria set by the Administrator. Unless otherwiseprovided by the Administrator, a Holder of Deferred Stock shall have no rights as a Cypress stockholder with respect tosuch Deferred Stock until such time as the Award has vested and the Common Stock underlying the Award has beenissued to the Holder.8.5 Restricted Stock Units. The Administrator is authorized to grant Restricted Stock Units to any EligibleIndividual. The number and terms and conditions of Restricted Stock Units shall be determined by the Administrator.The Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested andnonforfeitable, and may specify such conditions to vesting as it deems appropriate, including conditions based on one ormore Performance Criteria or other specific criteria, including service to Cypress, Spansion or any Subsidiary, in eachcase on a specified date or dates or over any period or periods, as the Administrator determines. The Administrator shallspecify, or permit the Holder to elect, the conditions and dates upon which the shares of Common Stock underlying theRestricted Stock Units which shall be issued. On the distribution dates, Cypress shall issue to the Holder oneunrestricted, fully transferable share of Common Stock for each vested and nonforfeitable Restricted Stock Unit unlessshares are withheld pursuant to Section 10.2.8.6 Term. The term of a Performance Award, Dividend Equivalent award, Deferred Stock award, StockPayment award and/or Restricted Stock Unit award shall be set by the Administrator in its sole discretion.8.7 Exercise or Purchase Price. The Administrator may establish the exercise or purchase price of aPerformance Award, shares of Deferred Stock, shares distributed as a Stock Payment award or shares distributedpursuant to a Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than thepar value of a share of Common Stock, unless otherwise permitted by applicable law.8.8 Exercise upon Termination of Service. A Performance Award, Dividend Equivalent award, DeferredStock award, Stock Payment award and/or Restricted Stock Unit award is exercisable or distributable only while theHolder is an Employee or Consultant, as applicable. The Administrator, however, in its sole discretion may provide thatthe Performance Award, Dividend Equivalent award, Deferred Stock award, Stock Payment award and/or RestrictedStock Unit award may be exercised or distributed subsequent to a Termination of Service in certain events, including aChange in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.ARTICLE 9. AWARD OF STOCK APPRECIATION RIGHTS9.1 Grant of Stock Appreciation Rights.(a) The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, inits sole discretion, on such terms and conditions as it may determine consistent with the Plan.(b) A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock AppreciationRight pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisablepursuant to its terms) and to receive from Cypress an amount determined by multiplying the difference obtained by subtracting theexercise price per share of the Stock Appreciation Right from the per share Fair Market Value on the date of exercise of the StockAppreciation Right by the number of shares of Common Stock with respect to which the Stock Appreciation Right shall have beenexercised, subject to any limitations the Administrator may impose. Except as described in (c) below, the exercise price per share ofCommon Stock subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of theFair Market Value on the date the Stock Appreciation Right is granted, unless determined otherwise by the Administrator.(c) Notwithstanding the foregoing provisions of Section 9.1(b) to the contrary, in the case of an Stock AppreciationRight that is a Substitute Award, the price per share of the shares subject to such Stock Appreciation Right may be less than the FairMarket Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date suchSubstitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does notexceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to theSubstitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that weresubject to the grant assumed or substituted for by Cypress, over (y) the aggregate exercise price of such shares.9.2 Stock Appreciation Right Term. The term of each Stock Appreciation Right shall be set by theAdministrator in its sole discretion; provided, however, that the term shall not be more than seven (7) years from thedate the Stock Appreciation Right is granted.9.3 Stock Appreciation Right Vesting.(a) The Administrator shall determine the period during which a Holder shall vest in a Stock Appreciation Rightand have the right to exercise such Stock Appreciation Right in whole or in part. Such vesting may be based on service withCypress, Spansion or any Subsidiary, or any other criteria selected by the Administrator. At any time after grant of a StockAppreciation Right, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, acceleratethe period during which a Stock Appreciation Right vests.(b) No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shall thereafterbecome exercisable, except as may be otherwise provided by the Administrator either in the Award Agreement or by action of theAdministrator following the grant of the Stock Appreciation Right.9.4 Manner of Exercise. All or a portion of an exercisable Stock Appreciation Right shall be deemedexercised upon delivery of all of the following to the Secretary of Cypress, or such other person or entity designated bythe Administrator, or his, her or its office, as applicable:(a) A written notice complying with the applicable rules established by the Administrator stating that the StockAppreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Holder or other person then entitled toexercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;(b) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable toeffect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws orregulations. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect suchcompliance; and(c) If the Stock Appreciation Right shall be exercised pursuant to this Section 9.4 by any person or persons otherthan the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right.9.5 Payment. Payment of the amount determined under Section 9.1(b) above shall be in cash, shares ofCommon Stock (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or acombination of both, as determined by the Administrator.ARTICLE 10. ADDITIONAL TERMS OF AWARDS10.1 Payment. The Administrator shall determine the methods by which payments by any Holder with respectto any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) shares ofCommon Stock (including, in the case of payment of the exercise price of an Award, shares of Common Stock issuablepursuant to the exercise of the Award) or shares of Common Stock held for such period of time as may be required bythe Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on thedate of delivery equal to the aggregate payments required, (c) delivery of a notice that the Holder has placed a marketsell order with a broker with respect to shares of Common Stock then issuable upon exercise or vesting of an Award,and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to Cypress in satisfactionof the aggregate payments required, provided, that payment of such proceeds is then made to Cypress upon settlementof such sale, or (d) other form of legal consideration acceptable to the Administrator. The Administrator shall alsodetermine the methods by which shares of Common Stock shall be delivered or deemed to be delivered to Holders.Notwithstanding any other provision of the Plan to the contrary, no Holder who is an “executive officer” of Cypresswithin the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to anyAwards granted under the Plan, or continue any extension of credit with respect to such payment with a loan fromCypress or a loan arranged by Cypress in violation of Section 13(k) of the Exchange Act.10.2 Tax Withholding. Cypress, Spansion or any Subsidiary shall have the authority and the right to deduct orwithhold, or require a Holder to remit to Cypress, an amount sufficient to satisfy federal, state, local and foreign taxes(including the Holder’s FICA or employment tax obligation) required by law to be withheld with respect to any taxableevent concerning a Holder arising as a result of the Plan. The Administrator may in its sole discretion and in satisfactionof the foregoing requirement withhold, or allow a Holder to elect to have Cypress withhold, shares of Common Stockotherwise issuable under an Award (or allow the surrender of shares of Common Stock). Unless determined otherwiseby the Administrator, the number of shares of Common Stock which may be so withheld or surrendered shall be limitedto the number of shares which have a Fair Market Value on the date of withholding or repurchase no greater than theaggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local andforeign income tax and payroll tax purposes that are applicable to such supplemental taxable income. The Administratorshall determine the fair market value of the Common Stock, consistent with applicable provisions of the Code, for taxwithholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exerciseinvolving the sale of shares to pay the Option or Stock Appreciation Right exercise price or any tax withholdingobligation.10.3 Transferability of Awards.(a) Except as otherwise provided in Section 10.3(b):(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by willor the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Awardhas been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;(ii) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holderor his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance,assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy,attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shallbe null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and(iii) During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof)granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portionof an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, beexercised by his personal representative or by any person empowered to do so under the deceased Holder’s will or under the thenapplicable laws of descent and distribution.(b) Notwithstanding Section 10.3(a), the Administrator, in its sole discretion, may determine to permit a Holder totransfer an Award to any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) anAward transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will orthe laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the termsand conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) theHolder and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, withoutlimitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for anexemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer. For purposes ofthis Section 10.3(b), “Permitted Transferee” shall mean, with respect to a Holder, any “family member” of the Holder, as definedunder the instructions to use of the Form S-8 Registration Statement under the Securities Act, or any other transferee specificallyapproved by the Administrator after taking into account any state, federal, local or foreign tax and securities laws applicable totransferable Awards.(c) Notwithstanding Section 10.3(a), a Holder may, in the manner determined by the Administrator, designate abeneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death. Abeneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms andconditions of the Plan and any Award Agreement applicable to the Holder, except to the extent the Plan and Award Agreementotherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Holder is marriedor a domestic partner in a domestic partnership qualified under applicable law and resides in a community property state, adesignation of a person other than the Holder’s spouse or domestic partner, as applicable, as his or her beneficiary with respect tomore than 50% of the Holder’s interest in the Award shall not be effective without the prior written consent of the Holder’s spouseor domestic partner. If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitledthereto pursuant to the Holder’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation maybe changed or revoked by a Holder at any time provided the change or revocation is filed with the Administrator prior to theHolder’s death.10.4 Conditions to Issuance of Shares.(a) Notwithstanding anything herein to the contrary, Cypress shall not be required to issue or deliver anycertificates or make any book entries evidencing shares of Common Stock pursuant to the exercise of any Award, unless and untilthe Board has determined, with advice of counsel, that the issuance of such shares is in compliance with all applicable laws,regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares of Common Stockare listed or traded, and the shares of Common Stock are covered by an effective registration statement or applicable exemptionfrom registration. In addition to the terms and conditions provided herein, the Board may require that a Holder make suchreasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply with anysuch laws, regulations, or requirements.(b) All Common Stock certificates delivered pursuant to the Plan and all shares issued pursuant to book entryprocedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to complywith federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automatedquotation system on which the Common Stock is listed, quoted, or traded. The Administrator may place legends on any CommonStock certificate or book entry to reference restrictions applicable to the Common Stock.(c) The Administrator shall have the right to require any Holder to comply with any timing or other restrictionswith respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed inthe sole discretion of the Administrator.(d) No fractional shares of Common Stock shall be issued and the Administrator shall determine, in its solediscretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by roundingdown.(e) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or requiredby any applicable law, rule or regulation, Cypress shall not deliver to any Holder certificates evidencing shares of Common Stockissued in connection with any Award and instead such shares of Common Stock shall be recorded in the books of Cypress (or, asapplicable, its transfer agent or stock plan administrator).10.5 Forfeiture Provisions. Pursuant to its general authority to determine the terms and conditions applicable toAwards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan,or to require a Holder to agree by separate written instrument, that: (a)(i) any proceeds, gains or other economic benefitactually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt orresale of any Common Stock underlying the Award, must be paid to Cypress, and (ii) the Award shall terminate andany unexercised portion of the Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of Serviceoccurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (ii) theHolder at any time, or during a specified time period, engages in any activity in competition with Cypress, or which isinimical, contrary or harmful to the interests of Cypress, as further defined by the Administrator or (iii) the Holder incursa Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forthin a written agreement relating to such Award between Cypress and the Holder).10.6 Repricing. Subject to Section 12.2, the Administrator shall not have the authority, without the approvalof the stockholders of Cypress, to amend any outstanding award, in whole or in part, to reduce the price per share or tocancel and replace an Award, in whole or in part, with the grant of an Award having a price per share that is less thanthe price per share of the original Award.ARTICLE 11. ADMINISTRATION11.1 Administrator. The Compensation Committee (or another committee or a subcommittee of the Boardassuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permittedherein) and shall consist of at least two or more directors appointed by and holding office at the pleasure of the Board,each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Actor any successor rule, and an “independent director” under the rules of the principal securities market, if any, on whichshares of Common Stock are traded; provided, that any action taken by the Committee shall be valid and effective,whether or not members of the Committee at the time of such action are later determined not to have satisfied therequirements for membership set forth in this Section 11.l or otherwise provided in any charter of the Committee.Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall beeffective upon acceptance of appointment. Committee members may resign at any time by delivering written notice tothe Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing, the Board orCommittee may delegate its authority hereunder to the extent permitted by Section 11.6.11.2 Duties and Powers of Committee. It shall be the duty of the Committee to conduct the generaladministration of the Plan in accordance with its provisions. The Committee shall have the power to interpret the Planand the Award Agreement, and to adopt such rules for the administration, interpretation and application of the Plan asare not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Award Agreementprovided that the rights or obligations of the holder of the Award that is the subject of any such Award Agreement arenot affected adversely by such amendment, unless the consent of the Holder is obtained or such amendment isotherwise permitted under Section 12.9. Any such grant or award under the Plan need not be the same with respect toeach holder. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and dutiesof the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or anysuccessor rule, or any regulations or rules issued thereunder, are required to be determined in the sole discretion of theCommittee.11.3 Action by the Committee. Unless otherwise established by the Board or in any charter of the Committee,a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meetingat which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shallbe deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon anyreport or other information furnished to that member by any officer or other employee of Cypress or any of its affiliates,Cypress’s independent certified public accountants, or any executive compensation consultant or other professionalretained by Cypress to assist in the administration of the Plan.11.4 Authority of Administrator. Subject to any specific designation in the Plan, the Administrator has theexclusive power, authority and sole discretion to:(a) Designate Eligible Individuals to receive Awards;(b) Determine the type or types of Awards to be granted to each Holder;(c) Determine the number of Awards to be granted and the number of shares of Common Stock to which anAward will relate;(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to,the exercise price, grant price, or purchase price, any reload provision, any restrictions or limitations on the Award, any schedule forvesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and anyprovisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as theAdministrator in its sole discretion determines;(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or theexercise price of an Award may be paid in cash, Common Stock, other Awards, or other property, or an Award may be canceled,forfeited, or surrendered;(f) Prescribe the form of each Award Agreement, which need not be identical for each Holder;(g) Decide all other matters that must be determined in connection with an Award;(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer thePlan;(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and(j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administratordeems necessary or advisable to administer the Plan.11.5 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards granted pursuant to thePlan, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan arefinal, binding, and conclusive on all parties.11.6 Delegation of Authority. To the extent permitted by applicable law, the Board or Committee may fromtime to time delegate to a committee of one or more members of the Board or one or more executive officers of Cypressthe authority to grant or amend Awards; provided, however, that in no event shall an executive officer be delegated theauthority to grant awards to, or amend awards held by, the following individuals: (a) individuals who are subject toSection 16 of the Exchange Act or (b) executive officers of Cypress (or directors) to whom authority to grant or amendAwards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that theBoard or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority sodelegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 11.6 shall serve in suchcapacity at the pleasure of the Board and the Committee.ARTICLE 12. MISCELLANEOUS PROVISIONS12.1 Amendment, Suspension or Termination of the Plan. Except as otherwise provided in this Section 12.1,the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from timeto time by the Board. Except as provided in Section 12.9, no amendment, suspension or termination of the Plan shall,without the consent of the Holder, impair any rights or obligations under any Award theretofore granted or awarded,unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period ofsuspension or after termination of the Plan, and in no event may any Award be granted under the Plan after the tenth(10th) anniversary of the original effective date of the Plan.12.2 Changes in Common Stock or Assets of Cypress, Acquisition or Liquidation of Cypress and OtherCorporate Events.(a) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation orother distribution (other than normal cash dividends) of Cypress assets to stockholders, or any other change affecting the shares ofCypress’s stock or the share price of Cypress’s stock other than an Equity Restructuring, the Administrator shall make equitableadjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under thePlan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shares whichmay be issued under the Plan); (ii) the number and kind of shares of Common Stock (or other securities or property) subject tooutstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicableperformance targets or criteria with respect thereto); and (iv) the grant or exercise price per share for any outstanding Awards underthe Plan.(b) In the event of any transaction or event described in Section 12.2(a) or any unusual or nonrecurring transactionsor events affecting Cypress, any affiliate of Cypress, or the financial statements of Cypress or any affiliate, or of changes inapplicable laws, regulations or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as itdeems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event andeither automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions wheneverthe Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potentialbenefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions orevents or to give effect to such changes in laws, regulations or principles.(i) To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equalto the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for theavoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 12.2 the Administratordetermines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’srights, then such Award may be terminated by Cypress without payment) or (B) the replacement of such Award with other rights orproperty selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have beenattained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable orfully vested;(ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiarythereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or aparent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;(iii) To make adjustments in the number and type of shares of Cypress’s stock (or other securities or property)subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms andconditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may begranted in the future;(iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all sharescovered thereby, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and(v) To provide that the Award cannot vest, be exercised or become payable after such event.(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary inSections 12.2(a) and 12.2(b):(i) The number and type of securities subject to each outstanding Award and/or the exercise price or grantprice thereof, if applicable, shall be equitably adjusted. The adjustments provided under this Section 12.2(c) shall be nondiscretionaryand shall be final and binding on the affected Holder and Cypress.(ii) The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion maydeem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issuedunder the Plan (including, but not limited to, adjustments of the limitations in Section 3.1 on the maximum number and kind of shareswhich may be issued under the Plan).(d) Notwithstanding any other provision of the Plan but subject to Section 12.2(e), in the event of a Change inControl, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent orsubsidiary of the successor corporation or shall terminate upon such Change in Control.(e) In the event that the successor corporation in a Change in Control refuses to assume or substitute for the Award,the Administrator may, in its sole discretion, cause any or all of such Awards to become fully exercisable immediately prior to theconsummation of such transaction and all forfeiture restrictions on any or all of such Awards to lapse. If an Award is exercisable inlieu of assumption or substitution in the event of a Change in Control, the Administrator shall notify the Holder that the Award shallbe fully exercisable for a period of fifteen (15) days from the date of such notice, contingent upon the occurrence of the Change inControl, and the Award shall terminate upon the expiration of such period.(f) The Administrator may, in its sole discretion, include such further provisions and limitations in any Award,agreement or certificate, as it may deem equitable and in the best interests of Cypress that are not inconsistent with the provisions ofthe Plan.(g) No adjustment or action described in this Section 12.2 shall be authorized to the extent such adjustment oraction would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless theAdministrator determines that the Award is not to comply with such exemptive conditions.(h) The existence of the Plan, the Award Agreement and the Awards granted hereunder shall not affect or restrictin any way the right or power of Cypress or the stockholders of Cypress to make or authorize any adjustment, recapitalization,reorganization or other change in Cypress’s capital structure or its business, any merger or consolidation of Cypress, any issue ofstock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rightsare superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock,or the dissolution or liquidation of the company, or any sale or transfer of all or any part of its assets or business, or any othercorporate act or proceeding, whether of a similar character or otherwise.(i) No action shall be taken under this Section 12.2 which shall cause an Award to fail to comply with Section409A of the Code or the Treasury Regulations thereunder, to the extent applicable to such Award.(j) In the event of any pending stock dividend, stock split, combination or exchange of shares, merger,consolidation or other distribution (other than normal cash dividends) of Cypress assets to stockholders, or any other changeaffecting the shares of Common Stock or the share price of the Common Stock including any Equity Restructuring, for reasons ofadministrative convenience, Cypress in its sole discretion may refuse to permit the exercise of any Award during a period of up tothirty (30) days prior to the consummation of any such transaction.12.3 No Stockholders Rights. Except as otherwise provided herein, a Holder shall have none of the rights of astockholder with respect to shares of Common Stock covered by any Award until the Holder becomes the record ownerof such shares of Common Stock.12.4 Paperless Administration. In the event that Cypress establishes, for itself or using the services of a thirdparty, an automated system for the documentation, granting or exercise of Awards, such as a system using an internetwebsite or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holdermay be permitted through the use of such an automated system.12.5 Effect of Plan upon Other Compensation Plans. The adoption of the Plan shall not affect any othercompensation or incentive plans in effect for Cypress, Spansion or any Subsidiary. Nothing in the Plan shall beconstrued to limit the right of Cypress, Spansion or any Subsidiary: (a) to establish any other forms of incentives orcompensation for Employees or Consultants of Cypress, Spansion or any Subsidiary, or (b) to grant or assume optionsor other rights or awards otherwise than under the Plan in connection with any proper corporate purpose includingwithout limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger,consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company,firm or association.12.6 Compliance with Laws. The Plan, the granting and vesting of Awards under the Plan and the issuanceand delivery of shares of Common Stock and the payment of money under the Plan or under Awards granted orawarded hereunder are subject to compliance with all applicable federal, state, local and foreign laws, rules andregulations (including but not limited to state, federal and foreign securities law and margin requirements) and to suchapprovals by any listing, regulatory or governmental authority as may, in the opinion of counsel for Cypress, benecessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to suchrestrictions, and the person acquiring such securities shall, if requested by Cypress, provide such assurances andrepresentations to Cypress as Cypress may deem necessary or desirable to assure compliance with all applicable legalrequirements. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall bedeemed amended to the extent necessary to conform to such laws, rules and regulations.12.7 Titles and Headings, References to Sections of the Code or Exchange Act. The titles and headings of theSections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, ratherthan such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include anyamendment or successor thereto.12.8 Governing Law. The Plan and any agreements hereunder shall be administered, interpreted and enforcedunder the internal laws of the State of Delaware without regard to conflicts of laws thereof.12.9 Section 409A. To the extent that the Administrator determines that any Award granted under the Plan issubject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms andconditions required by Section 409A of the Code. To the extent applicable, the Plan and Award Agreements shall beinterpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretiveguidance issued thereunder, including without limitation any such regulations or other guidance that may be issued afterthe Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the EffectiveDate the Administrator determines that any Award may be subject to Section 409A of the Code and related Departmentof Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), theAdministrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policiesand procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, thatthe Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Codeand/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with therequirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid theapplication of any penalty taxes under such Section.12.10 No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted anyAward pursuant to the Plan, and neither Cypress nor the Administrator is obligated to treat Eligible Individuals, Holdersor any other persons uniformly.12.11 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for incentivecompensation. With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in thePlan or any Award Agreement shall give the Holder any rights that are greater than those of a general creditor ofCypress, Spansion or any Subsidiary.12.12 Indemnification. To the extent allowable pursuant to applicable law, each member of the Committee orof the Board shall be indemnified and held harmless by Cypress from any loss, cost, liability, or expense that may beimposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, orproceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failureto act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment insuch action, suit, or proceeding against him or her; provided he or she gives Cypress an opportunity, at its own expense,to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. Theforegoing right of indemnification shall not be exclusive of any other rights of indemnification to which such personsmay be entitled pursuant to Cypress’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or anypower that Cypress may have to indemnify them or hold them harmless.12.13 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account indetermining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or otherbenefit plan of Cypress, Spansion or any Subsidiary except to the extent otherwise expressly provided in writing insuch other plan or an agreement thereunder.12.14 Expenses. The expenses of administering the Plan shall be borne by Cypress, Spansion and theSubsidiaries.Exhibit 10.3.2NOTICE OF GRANT OF RESTRICTED STOCK UNITSCongratulations! You have been granted an Award of Restricted Stock Units ("RSUs") by Cypress Semiconductor Corporationunder the Spansion Inc. 2010 Equity Incentive Award Plan, as amended, and any applicable sub-plan thereto for your country(collectively, the "Plan"), as follows:PARTICIPANT NAME: [name]PARTICIPANT ID: [ID#]NUMBER OF RSUs GRANTED: [number]Each RSU is equivalent to one share of Common Stock of Cypress Semiconductor Corporation (the "Company") for purposes ofdetermining the number of Shares subject to this Award. The RSUs are subject to forfeiture prior to vesting. None of the RSUs will vest(nor will you have the rights of a stockholder with respect to the underlying shares) until you satisfy the vesting conditions describedbelow and in the Restricted Stock Unit Agreement accompanying this notice (the "RSU Agreement"). The number of unvested RSUsand underlying shares is subject to adjustment under Section 12.2 of the Plan (such as in connection with a stock split or spin-off).Unless otherwise defined in this Notice of Grant of Restricted Stock Units (this "Notice of Grant"), capitalized words that are defined inthe Plan or the RSU Agreement have the meanings given to them in the Plan or RSU Agreement, as applicable. Additional terms of thisgrant are as follows:GRANT NUMBER: [number]GRANT DATE: [date]VESTING BASE DATE: [date]VESTING SCHEDULE:1RSUs Scheduled to Vest Vesting Date[number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date]You acknowledge and agree that this Notice of Grant (including the vesting schedule above) does not constitute an express orimplied promise of continued engagement as an Employee or Consultant for the vesting period, for any period, or at all.You will not receive any Shares upon vesting unless and until satisfactory arrangements (as determined by the Administrator)have been made with respect to the collection of all Tax-Related Items that the Company or your Employer determines must bewithheld with respect to such Shares to be delivered upon the vesting of the RSUs. Currently, you can view the tax withholdingcollection method(s) that the Administrator has made available to you, including the default collection method (and if applicable youmay be able to select an alternate method) by accessing your Plan account at www.ETRADE.com.The Company's online acceptance procedure requires that you open each of the linked documents in order to proceed toacceptance.Please confirm your acceptance of this Award by clicking the "Accept" (or similar wording) button on the awardacceptance screen of your Plan account at www.ETRADE.com. If you wish to reject this award, you must so notify the Company'sStock Plan Administrator in writing to stockadmin@cypress.com no later than sixty (60) days after the grant date shown above. Ifwithin such sixty (60) day period you neither affirmatively accept nor affirmatively reject this Award, you will be deemed to haveaccepted this Award at the end of such sixty (60) day period pursuant to the terms and conditions set forth in this Notice of Grant, theRSU Agreement, and the Plan.By your acceptance of this Award:•you acknowledge receiving and reviewing this Notice of Grant, the RSU Agreement, the Plan, and the Company's relatedProspectus;2•you agree that the RSUs are granted under and governed by the terms and conditions of, and you agree to be bound by theterms of, this Notice of Grant, the RSU Agreement, and the Plan;•you agree to accept as binding, conclusive, and final all decisions or interpretations of the Plan Administrator upon anyquestions relating to the Plan and this Award; and•you consent to the collection, use and transfer, in electronic or other form, of your personal data as described in theRSU Agreement for the purpose of implementing, administering and managing your participation in the Plan.This Notice of Grant shall be construed and determined in accordance with the laws of the U.S. State of Delaware (withoutgiving effect to the conflict of laws principles thereof) and upon acceptance shall be deemed to have been executed and delivered bythe parties hereto as of the grant date shown above.CYPRESS SEMICONDUCTOR CORPORATIONSPANSION INC. 2010 EQUITY INCENTIVE AWARD PLANRESTRICTED STOCK UNIT AGREEMENT1. Grant. Cypress Semiconductor Corporation (the "Company") hereby grants to the participant (the "Holder") named in the Notice ofGrant of Restricted Stock Units (the "Notice of Grant") an Award of Restricted Stock Units ("RSUs"), as set forth in the Notice ofGrant and subject to the terms and conditions in this Restricted Stock Unit Agreement ("Agreement"), in the Company's Spansion Inc.2010 Equity Incentive Award Plan, as amended, and in any applicable sub-plan for the Holder's country (such plan and any such sub-plan, collectively, the "Plan"). A sub-plan is applicable to this Award if, but only if, the country-specific terms for the Participant'scountry as set forth in Appendix A state that this Award is granted under or subject to such sub-plan. Unless otherwise defined herein,capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan.2. Company's Obligation. Each RSU represents the right of the Holder to receive one share of Cypress Common Stock (as adjusted inaccordance with Section 12.2 of the Plan, a "Share") on the date on which all applicable vesting conditions established by the Noticeof Grant, this Agreement, and the Plan have been satisfied (the "Vesting Date"). Unless and until RSUs vest, the Holder will have noright to receive Shares (or any other payment) in connection with such RSUs. Prior to actual distribution of Shares in settlement of anyvested RSUs, such RSUs represent an unsecured obligation of the Company, payable (if at all) only from the general assets of theCompany.3. Vesting Schedule and Vesting Conditions. Subject to Section 4 below, the RSUs awarded by this Agreement shall vest and becomenon-forfeitable in accordance with the vesting schedule specified in the Notice of Grant (the "Vesting Schedule"). With respect to eachscheduled Vesting Date, the Holder's continuous service as an Employee or Consultant from the grant date specified in the Notice ofGrant (the "Date of Grant") until such Vesting Date is a condition to the vesting of the RSUs scheduled to vest on such date.Employment or service for only a portion of such vesting period, even if a substantial portion, will not entitle the Holder to anyproportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment orservices as provided in Section 4 below or in the Plan.4. Forfeiture upon Termination of Service; Leaves of Absence.(a) Forfeiture upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the Notice of Grant, upon theHolder's Termination of Service for any or no reason after the Date of Grant but prior to a Vesting Date, any unvested RSUs awardedby this Agreement will thereupon be forfeited at no cost to the Company and, if applicable, at no cost to the Company affiliate thatactually employs or otherwise engages the Holder (the "Employer"). Neither the Holder nor any of the Holder's successors, heirs,assigns or personal representatives shall have any rights or interests in any RSUs that are forfeited pursuant to any provision of thisAgreement or the Plan.(b) Unpaid Leaves of Absence. Unless otherwise provided by the Administrator (such as in a leave of absence vesting policy orotherwise) and subject to compliance with all applicable laws, in the event the Holder takes an approved but unpaid leave of absence("LOA") from the Company or the Employer (as applicable), each Vesting Date that has not occurred as of the commencement ofsuch LOA shall be tolled for the number of calendar days that the Holder is on such LOA. (For example, if the next scheduled VestingDate is July 1 and prior to that date the Grantee takes a LOA spanning 20 calendar days, that Vesting Date shall (unless otherwiseprovided by the Administrator) be tolled for 20 days and shall become July 21 and all future Vesting Dates shall be similarlyrescheduled).5. Settlement in Shares after Vesting. Subject to Section 17 (regarding tax matters), any RSUs that vest in accordance with thisAgreement will be settled by delivery of Shares to the Holder (or in the event of the Holder's death, to his or her estate) as soon aspracticable after (and in no case more than seventy-four days after) the date such RSUs become non-forfeitable.6. Payments after Death. Any distribution or delivery to be made to the Holder under this Agreement will, if the Holder is thendeceased, be made to the administrator or executor of the Holder's estate. Any such administrator or executor must furnish theCompany with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validityof the transfer and compliance with any laws or regulations pertaining to said transfer.7. Rights as Stockholder. Neither the Holder nor any person claiming under or through the Holder will have any of the rights orprivileges of a stockholder of the Company (including, without limitation, voting and dividend rights) in respect of any Sharesdeliverable hereunder unless and until certificates (or book-entry positions) representing such Shares have been issued, recorded on therecords of the Company or its transfer agents or registrars, and delivered to the Holder or the Holder's broker.8. No Effect on Employment or Status. If the Holder is employed in the United States, (1) the Holder's employment or other servicerelationship with the Company or the Employer is on an at-will basis only and accordingly, the terms of the Holder's employment orother service relationship with the Company or the Employer will be determined from time to time by the Company or the Employer,and the Company or the Employer will have the right, which is hereby expressly reserved, to terminate or change the terms of theemployment or other service relationship of the Holder at any time for any reason whatsoever, with or without good cause or notice;and (2) the Holder understands and agrees that the vesting of the RSUs subject to this Award pursuant to Section 3 above is subject tothe Holder's continuing in the employ or service of the Company or the Employer through each applicable Vesting Date.9. Address for Notices. (a) Any notice to be given to the Company under the terms of this Agreement will be addressed to theCompany at 198 Champion Court, San Jose, California 95134-1599, Attn: Stock Administration, or at such other address as theCompany may hereafter designate in writing or electronically. (b) Any notice to be given to the Holder under the terms of thisAgreement will be addressed to the Holder's address appearing on the books of the Company or to the Holder's residence or to suchother address as may be designated in writing by the Holder. Notices may also be delivered to the Holder, during his or heremployment, through the Company's inter-office or electronic mail systems.10. Grant is Not Transferable. Except to the limited extent provided in Section 6 of this Agreement, this grant and the rights andprivileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law orotherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under anyexecution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null andvoid.11. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be bindingupon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.12. Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the listing, registration orqualification of the Shares upon any securities exchange or under any state, federal, or foreign law, or the consent or approval of anygovernmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Holder (or his or her estate),such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected orobtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet therequirements of any such U.S. state or federal law or securities exchange and to obtain any such consent or approval of any domesticgovernmental authority.13. Plan Governs. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. The Holder has beenprovided a copy of the Plan and has had an opportunity to review the Plan and shall be bound by all the terms and provisions of thePlan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions ofthe Plan, the provisions of the Plan will govern.14. Administrator Authority. The Administrator will have the power to interpret the Plan, this Agreement, and the Notice of Grant andto adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret orrevoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken andall interpretations and determinations made by the Administrator in good faith will be final and binding upon Holder, the Company,and all other interested persons. No member of the Administrator will be personally liable for any action, determination, orinterpretation made in good faith with respect to the Plan or this Agreement.15. Additional Terms for Holders Providing Services Outside the United States. To the extent the Holder provides (or provided,subsequent to the vesting base date set forth in the Notice of Grant) services to the Company or the Employer in a country other thanthe United States, the RSUs shall be subject to such additional or substitute terms as are set forth for such country in Appendix Aattached hereto.16. Data Privacy. The Holder hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic orother form, of the Holder's personal data as described in this Agreement by and among, as applicable, the Employer and theCompany and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing the Holder'sparticipation in the Plan.The Holder understands that the Company and the Employer may hold certain personal information about the Holder, including,but not limited to, the Holder's name, home address and telephone number, date of birth, social insurance number, passportnumber, or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company,details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in the Holder's favor, forthe purpose of implementing, administering and managing the Plan ("Data").The Holder understands that Data may be transferred to such stock plan service provider (or providers) as may be selected by theCompany which is (or are) assisting in the implementation, administration and management of the Plan and awards grantedthereunder. The Holder understands that these recipients of Data may be located in the United States, or elsewhere, and that therecipients' country (e.g., the United States) may have different data privacy laws and protections than the Holder's country. TheHolder understands that he or she may request a list with the names and addresses of any potential recipients of the Data bycontacting the Holder's local human resources representative. The Holder hereby authorizes the Company and any other possiblerecipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan andawards granted thereunder to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose ofimplementing, administering and managing the Holder's participation in the Plan.The Holder understands that Data will be held only as long as is necessary to implement, administer and manage his or herparticipation in the Plan. The Holder understands that he or she may, at any time, view Data, request additional information aboutthe storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in anycase without cost, by contacting in writing the Holder's local human resources representative. The Holder understands, however,that refusing or withdrawing his or her consent may affect the Holder's ability to participate in the Plan and the Holder's continuedeligibility for this Award or eligibility to be granted any other awards under the Plan. For more information on the consequencesof the Holder's refusal to consent or withdrawal of consent, the Holder understands that he or she may contact his or her localhuman resources representative.17. Responsibility for Taxes.(a) Regardless of any action the Company or the Employer takes with respect to any and all income or withholding tax (includingfederal, state and local tax), social insurance, payroll tax, payment on account or other tax-related items related to the Holder'sparticipation in the Plan and legally applicable to him or her ("Tax-Related Items"), the Holder acknowledges that the ultimate liabilityfor all Tax-Related Items is and remains the Holder's responsibility and may exceed the amount, if any, actually withheld by theCompany and/or the Employer. The Holder further acknowledges that the Company and/or the Employer (1) make no representationsor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including the grant of theRSUs, the vesting of RSUs, the issuance of Shares, the subsequent sale of any Shares acquired under the Award and the receipt of anydividends; and (2) do not commit to and are under no obligation to structure the terms of the Award or any aspect of the RSUs toreduce or eliminate the Holder's liability for Tax-Related Items or achieve any particular tax result. Further, if the Holder has becomesubject to tax in more than one jurisdiction between the Date of Grant and the date of any taxable or tax withholding event, asapplicable, the Holder acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required towithhold or account for Tax-Related Items in more than one jurisdiction.(b) Prior to any relevant taxable or tax withholding event, as applicable, the Holder shall pay or make adequate arrangementssatisfactory to the Company and/or the Employer to satisfy all Tax-Related Items that the Company determines it or the Employer isrequired to withhold under applicable laws with respect to the RSUs. In this regard, the Holder authorizes the Company and/or theEmployer, or their respective agents, to satisfy the obligation with regard to all Tax-Related Items by any one or a combination of thefollowing methods: (1) by requiring the Holder to pay such amount in cash or by check; (2) by deducting such amount out of wages orany other cash compensation otherwise payable to the Holder by the Company and/or the Employer; (3) by withholding (and/orreacquiring) a number of Shares issuable (or issued) in payment of the RSUs having a Fair Market Value equal to such amount; (4) byrequiring the Holder to deliver to the Company already owned shares of Common Stock having a Fair Market Value equal to suchamount; and/or (5) withholding such amount from the proceeds of a sale of a sufficient number of Shares issued upon vesting of theRSUs ("Sell-To-Cover") either through a voluntary sale or through a mandatory sale arranged by the Company (on the Holder's behalfpursuant to this authorization). For these purposes, the Fair Market Value of any Shares to be withheld or repurchased, as applicable,shall be determined on the date that Tax-Related Items are to be determined. To the extent any of the above methods involves a sale ofShares, the Holder acknowledges that neither the Company nor its designated broker is obligated to arrange for such sale of Shares atany particular price.To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering minimumstatutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholdingin Shares, for tax purposes, the Holder is deemed to have been issued the full number of Shares subject to the vested portion of theRSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as aresult of any aspect of the Holder's participation in the Plan.(c) The Holder shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer maybe required to withhold as a result of the Holder's receipt of RSUs, the vesting of RSUs, or the issuance of Shares that cannot besatisfied by the means previously described. The Company may refuse to deliver Shares to the Holder if the Holder fails to complywith the Holder's obligations in connection with Tax-Related Items as described in this Section 17.(d) The Holder understands that the Company may allow the Holder to select a tax withholding collection method and that, if noselection is made, the default collection method may be Sell-To-Cover. In that default case and/or if the Holder subsequently selectsSell-To-Cover (or the related "same-day sale" alternative), the Holder hereby agrees and instructs that a sufficient number of Sharesissued in payment of RSUs that become non-forfeitable shall be sold by the Company's designated brokerage firm on the Holder'sbehalf and for the Holder's account pursuant to this authorization on or as soon as administratively possible after the date of issuance.This paragraph is intended as a trading plan meeting the requirements of Rule 10b5-1(c)(1)(i) under the U.S. Securities Exchange Actof 1934, as amended. The Holder hereby represents and warrants that (a) at the time of entering into this Agreement and trading planand at the time of making any subsequent Sell-To-Cover or "same-day sale" election constituting a trading plan hereunder, he or she isnot aware of any material, nonpublic information regarding the Company or its securities and (b) he or she is entering into thisAgreement and any such trading plan in good faith and not as part of a plan or scheme to avoid the prohibitions of Rule 10b5-1. TheHolder agrees (i) never to directly or indirectly communicate any material, non-public information regarding the Company to theCompany's designated brokerage firm or any employee or affiliate thereof and (ii) at any time an above trading plan is in effect, (x) notto influence how, when, or whether the Shares are sold (other than by selecting a different tax withholding collection method that doesnot involve sale of Shares, which is equivalent to terminating the trading plan), and (y) not to enter into or alter a correspondinghedging transaction or position with respect to the Shares. The Holder agrees that he or she will not change the tax withholdingcollection method to Sell-To-Cover (or to the related "same-day sale" alternative) at a time when he or she would be prohibited fromtrading under the Company's Insider Trading Policy (as defined below).18. Miscellaneous.(a) Headings. The headings in this Agreement are provided for convenience only and are not to serve as a basis for interpretation orconstruction of, and shall not constitute a part of, this Agreement.(b) Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to thisAward or future Awards that may be made under the Plan (or other Company equity plans) by electronic means, request the Holder'sconsent to participate in the Plan (or other Company equity plans) by electronic means, or deliver vested Shares by book-entry to theHolder's account at a brokerage selected by the Company. The Holder hereby consents to receive such documents by electronicdelivery, authorizes vested shares to be delivered to such a brokerage account by book-entry, and agrees to participate in the Planthrough an on-line or electronic system established and maintained by the Company or a third-party brokerage designated by theCompany.(c) Section 409A. This Agreement and the Award are intended to comply with or be exempt from, as the case may be, Section 409Aof the Code so as to not result in any tax, penalty or interest thereunder. This Agreement and the Award shall be construed andinterpreted accordingly. Except for the Company's tax withholding rights, the Holder shall be solely responsible for any and all taxliability with respect to the Award.(d) Invalid Provision. The invalidity or unenforceability of any particular provision hereof shall not affect the other provisions hereof,and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.(e) Governing Law/Choice of Venue.(1)This Agreement and the rights of the Holder hereunder shall be construed and determined in accordance with the laws of theState of Delaware (without giving effect to the conflict of laws principles thereof).(2)For the purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by theAward or this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California wherethis grant is made and/or to be performed and agree that such litigation shall be conducted only in the courts of Santa ClaraCounty, California, or the federal court of the United States for the Northern District of California, and no other courts.(f) Imposition of Other Requirements. If the Holder relocates to another country after the Date of Grant, the Company reserves theright to impose other requirements on the Holder's participation in the Plan, to the extent the Company determines it is necessary oradvisable in order to comply with local law or facilitate the administration of the Plan, and to require the Holder to sign any additionalagreements or undertakings that may be necessary to accomplish the foregoing.(g) No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Holder's participation in the Plan, or the Holder's acquisition or sale of the underlying Shares. TheHolder is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation inthe Plan before taking any action related to the Plan.(h) Insider Trading Restrictions/Market Abuse Laws. The Holder acknowledges and agrees that he or she is subject to the Company'sAmended and Restated Insider Trading Policy as may be amended from time to time (the "Insider Trading Policy") including itsrestrictions that extend for a limited period of time after the Holder's termination of service. In addition, the Holder understands that heor she may be subject to insider trading restrictions under securities laws, market abuse laws, and/or other similar laws, and suchrestrictions may affect his or her ability to acquire or sell Shares or rights to Shares. The Holder acknowledges that it is the Holder'sresponsibility to comply with such Company policies and any additional restrictions that may apply under applicable laws with respectto the Holder's acquisition, holding, and any disposition of Shares or rights to Shares. (i) Recoupment. Notwithstanding any other provision herein, any recoupment or "clawback" policies adopted by the Board or theAdministrator and applicable to equity awards, as such policies are in effect from time to time, shall apply to this Award, any Sharesthat may be issued in respect of this Award, and any proceeds (including dividends and sale proceeds) of such Shares.(j) Entire Agreement. This Agreement, the Notice of Grant, and the Plan contain the entire agreement and understanding of the partieshereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations andnegotiations in respect thereto.(k) Signature and Acceptance. This Agreement shall be deemed to have been accepted and signed by the Holder and the Company asof the Date of Grant upon the Holder's online acceptance or deemed acceptance as set forth in the Notice of Grant.(l) Modifications. The provisions of this Agreement may not be changed, modified, or waived in a manner that is adverse to theHolder's interests except by means of a writing signed by the Holder and the Company.APPENDIX AThis Appendix A to the Spansion Inc. 2010 Equity Incentive Award Plan, as amended (the "Plan"), Restricted Stock Unit Agreement(the "Agreement") includes special terms and conditions applicable to Holders in the countries below. These terms and conditions are inaddition to or substitute for, as applicable, those set forth in the Agreement. Any capitalized term used in this Appendix A withoutdefinition shall have the meaning ascribed to such term in the Plan or the Notice of Grant, as applicable.Each Holder is advised to seek appropriate professional advice as to how the relevant exchange control and tax laws in the Holder'scountry may apply to the Holder's individual situation.ALL COUNTRIES OUTSIDE THE UNITED STATESThe following provisions replace Section 8 of the Agreement:Nature of Award. In accepting the Award, the Holder acknowledges, understands, and agrees that:(i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended orterminated by the Company at any time;(ii) the Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs,or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past;(iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;(iv) the Holder's participation in the Plan will not create a right to further employment with the Employer and shall not interfere with theability of the Employer to terminate the Holder's employment relationship;(v) the Holder's participation in the Plan is voluntary;(vi) the Award of RSUs is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered tothe Company or to the Employer, and which is outside the scope of the Holder's employment contract, if any;(vii) the Award of RSUs is not part of normal or expected compensation or salary for any purposes, including, but not limited to,calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension orretirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to,past services for the Company, the Employer or any Subsidiary;(viii) in the event that the Holder is not an employee of the Company, the Award shall not be interpreted to form an employmentcontract or relationship with the Company; and furthermore, the Award will not be interpreted to form an employment contract with theEmployer or any Subsidiary;(ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty;(x) no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs upon Termination of Service (for anyreason whatsoever and whether or not in breach of local labor laws) and in consideration of the Award of RSUs to which the Holder isotherwise not entitled, the Holder irrevocably agrees never to institute any claim against the Company or the Employer, waives theability, if any, to bring any such claim, and releases the Company and the Employer from any such claim; if, notwithstanding theforegoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Holder shall be deemedirrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal orwithdrawal of such claims; and(xi) upon a Termination of Service (whether or not in breach of local labor laws), the Holder's right to vest in the RSUs under the Plan,if any, will terminate effective as of the date that the Holder is no longer actively employed by or does no longer actively renderservices to the Company or any of its Subsidiaries and will not be extended by any notice period mandated under local law; theAdministrator shall have the exclusive discretion to determine when the Holder is no longer actively employed for purposes of thisAward of RSUs.CANADASettlement of RSUs. Notwithstanding any terms or conditions of the Plan or the Agreement to the contrary, RSUs will be settled inshares of Common Stock only, not cash.Securities Law Information. You acknowledge and agree that you will only sell shares of Common Stock acquired through participationin the Plan outside of Canada through the facilities of a stock exchange on which the Common Stock is listed. Currently, the shares ofCommon Stock are listed on the NASDAQ.Termination of Employment. This provision replaces Section 4(a) of the Agreement:In the event of your termination of employment or other service relationship (for any reason whatsoever, whether or not later found tobe invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, ifany), your right to vest in the RSUs will terminate effective as of the date that is the earlier of (1) the date you are no longer activelyproviding service or (2) the date you receive notice of termination of employment from the Employer, regardless of any notice periodor period of pay in lieu of such notice required under applicable laws (including, but not limited to statutory law, regulatory law and/orcommon law); the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes ofthe RSUs.The following provisions apply if you are resident in Quebec:Language Acknowledgment. The parties acknowledge that it is their express wish that this Agreement, including this Appendix, as wellas all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto,be provided to them in English.Consentement relatif à la langue utilisée. Les parties reconnaissent avoir expressément souhaité que la convention («Agreement») ainsique cette Annexe, ainsi que tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés en vertu de, ou liésdirectement ou indirectement à la présente convention, soient rédigés en langue anglaise.Maternity and Paternity Leave. For the avoidance of doubt, Section 4(b) of the Agreement shall not apply to any maternity or paternityleave to which employees in Canada are entitled by law.FINLANDNo country-specific Agreement terms apply.FRANCESub-Plan. The Award shall be deemed not to have been granted under any French sub-plan.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, social security number or other Holder tax identification number,employment history and status, salary, nationality, job title, and information regarding equity compensation grants or Common Stockawarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administeringthe Plan ("Data"). The Company, its affiliates and Holder's employer will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). Currently, the third party isE*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Company may retainadditional or different third parties for any of the purposes mentioned. The Company may also make the Data available to publicauthorities where required under locally applicable law. These recipients may be located in the United States, the European EconomicArea, or elsewhere, which the Holder separately and expressly consents to, accepting that outside the European Economic Area, dataprotection laws may not be as protective as within. The Holder hereby authorizes them to receive, possess, use, retain and transfer theData, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants ofawards made thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grantsof awards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent hereinin writing by contacting the Company through its local H.R. director; however, withdrawing the consent may affect the Holder's abilityto participate in the Plan and receive the benefits intended by this Agreement. Data will only be held as long as necessary to implement,administer and manage the Holder's participation in the Plan and any subsequent claims or rights.French Language Provision. By accepting this Agreement, Holder confirms having read and understood the documents relating to thePlan which were provided to Holder in the English language. Holder accepts the terms of those documents accordingly.French translation: En acceptant ce Contrat vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont étécommuniqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.Exchange Control Information. If you import or export cash (e.g., sales proceeds received under the Plan) with a value equal to orexceeding €10,000 and do not use a financial institution to do so, you must submit a report to the customs and excise authorities.Tax Reporting. If you hold shares of Common Stock outside of France or maintain a foreign bank account, you are required to reportsuch to the French tax authorities when filing your annual tax return. Failure to comply could trigger significant penalties.GERMANYAcceptance of Agreement. Notwithstanding the terms of the Agreement, a Holder must acknowledge and accept the Agreement bysigning a copy of the Agreement and returning the original signed document within 30 days after the date of the electronic mailnotification of the Agreement. For the avoidance of doubt, this Agreement may be accepted electronically or please sign and return theAgreement to: Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.No Impact on Other Rights. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right toreceive any other grant of RSUs or other awards under the Plan in the future.Exchange Control Information. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. Inthe event that you make or receive a payment in excess of this amount, you are responsible for obtaining the appropriate form from theremitting bank and complying with applicable reporting requirements.Consent to Personal Data Processing and Transfer.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company and the Holder's employer hold certain personal information, including the Holder's name, homeaddress and telephone number, date of birth, social security number or other Holder tax identification number, salary, nationality, jobtitle, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested oroutstanding in the Holder's favor, for the purpose of managing and administering the Plan ("Data"). The Company and the Holder'semployer will transfer Data to any third parties assisting the Company in the implementation, administration and management of thePlan (and grants of awards made thereunder), at the time being E*Trade Financial Corporate Services, Inc., 4005 Windward PlazaDrive, Alpharetta, GA 30005. These recipients are located in the European Economic Area, but also outside and in so-called insecurethird-party countries that do not guarantee the data privacy protection level of the European Economic Area, for example the UnitedStates. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for thepurposes of implementing, administering and managing participation in the Plan (and grants of awards made thereunder), including anyrequisite transfer of such Data as may be required for the administration of the Plan (and grants of awards made thereunder) on behalfof the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, atany time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company;however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by thisAgreement.HONG KONGWARNING: The RSUs and Shares do not constitute a public offering of securities under Hong Kong law and are available only toEmployees. The Agreement, including this Appendix, the Plan and other incidental communication materials have not been prepared inaccordance with and are not intended to constitute a "prospectus" for a public offering of securities under the applicable securitieslegislation in Hong Kong. Nor have the documents been reviewed by any regulatory authority in Hong Kong. The RSUs are intendedonly for the personal use of each Employee and may not be distributed to any other person. If the Employee is in any doubt about anyof the contents of the Agreement, including this Appendix or the Plan, the Employee should obtain independent professional advice.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Sale of Shares. To facilitate compliance with securities laws in Hong Kong, in the event the Employee's RSUs vest and Shares areissued to the Employee within six months of the Date of Grant, the Employee agrees that he or she will not dispose of any Sharesacquired prior to the six-month anniversary of the Date of Grant.Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of theOccupational Retirement Schemes Ordinance ("ORSO"). Notwithstanding the foregoing, if the Plan is deemed to constitute anoccupational retirement scheme for the purposes of ORSO, then the Employee's grant shall be void. INDIAExchange Control Notification. The Holder understands that he or she must repatriate any proceeds from the sale of Shares acquiredunder the Plan and any dividends received in relation to the Shares to India and convert the funds into local currency within 90 days ofreceipt. The Holder must obtain a foreign inward remittance certificate ("FIRC") from the bank where the Holder deposits the foreigncurrency and maintains the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Companyrequests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.Effective April 1, 2012, you are required to declare in your annual tax return (a) any foreign assets held by you or (b) any foreign bankaccounts for which you have signing authority.IRELANDManner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 8 of the Agreement:By accepting the RSUs, the Holder acknowledges, understands, and agrees that the benefits received under the Plan will not be takeninto account for any redundancy or unfair dismissal claim.Director Notification. If the Holder is a director, shadow director or secretary of an Irish subsidiary of the Company, the Holder issubject to certain notification requirements under Section 53 of the Companies Act, 1990. Among these requirements is an obligation tonotify the Irish affiliate in writing within five (5) business days when the Holder receives an interest (e.g., RSUs, Shares) in theCompany and the number and class of shares or rights to which the interest relates. In addition, the Holder must notify the Irishsubsidiary within five (5) business days when the Holder sells Shares acquired under the Plan. This notification requirement also appliesto any rights or Shares acquired by the Holder's spouse or children (under the age of 18).ISRAELSecurities Law Notice. This RSU Award is granted pursuant to an exemption issued by the Israeli Securities Authority under Section15D of the Securities Law of 1968. The grant of this RSU Award and the issuance of its underlying shares are registered with the U.S.Securities and Exchange Commission on Form S-8. The Company will make available to any interested Israeli offeree, at his or herworkplace, the Form S-8 and all documents attached to the Form S-8, including any document directly or indirectly referred to in theForm S-8 or in its exhibits. To request any such documents, please contact stockadmin@cypress.com.Sub-Plan and Tax-Based Restrictions. If on the Date of Grant, the Holder is an employee of the Company's subsidiary in Israel, CypressSemiconductors Ltd., then this Award is granted under and subject to the terms of the Spansion Inc. 2010 Equity Incentive AgreementPlan Sub-Plan – Israel (the "Israeli Sub-Plan") and the Holder acknowledges and agrees to the following: This Agreement is grantedunder and governed by the Plan, the Israeli Sub-Plan, Section 102(b)(2) of the Israeli Income Tax Ordinance (New Version) – 1961 andthe Rules promulgated in connection therewith ("Section 102"), and the trust agreement (the "Trust Agreement") between the Companyand the Trustee (as defined in the Israeli Sub-Plan).•The proceeds of any shares of Common Stock issued upon vesting of the RSUs will be remitted by the Company or itsdesignated broker to the Trustee to administer on Holder's behalf, pursuant to the terms of Section 102 and the Trust Agreement.•Holder is familiar with the terms and provisions of Section 102, particularly the Capital Gains Track (as defined in the IsraeliSub-Plan) described in subsection (b)(2) thereof, and agrees that Holder will not release or sell (or require the Trustee to releaseor sell) the RSUs or underlying shares of Common Stock during the Restricted Holding Period (as defined in the Israeli Sub-Plan), unless permitted to do so by applicable law.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, social security number or other Holder tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan ("Data"). The Company, itsaffiliates and the Holder's employer will transfer Data to any third parties assisting the Company in the implementation, administrationand management of the Plan (and grants of awards made thereunder). These recipients may be located in the United States, theEuropean Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, inelectronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awardsmade thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants ofawards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan, including transfers outside of Israel and further transfers thereafter. The Holder may, at any time, review Data,require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawingthe consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.ITALYData Privacy Notice and Consent.This provision replaces the "Data Privacy" section of the Agreement.Holder hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or other form, ofpersonal data as described in this section of Appendix A by and among, as applicable, the Company and any Subsidiary for theexclusive purpose of implementing, administering and managing Holder's participation in the Plan (and grants of awards madethereunder).Holder understands that the Company and any Subsidiary may hold certain personal information about Holder, including but notlimited to, Holder's name, home address and telephone number, date of birth, social insurance number or other identificationnumber, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of the RSUs orany other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Holder'sfavor, for the exclusive purpose of managing and administering the Plan ("Personal Data").Holder also understands that providing the Company with Personal Data is necessary for the performance of the Plan and thatHolder's denial to provide Personal Data would make it impossible for the Company to perform its contractual obligations andmay affect Holder's ability to participate in the Plan. The Controller of Personal Data processing is Cypress SemiconductorCorporation, with its principal offices at 198 Champion Court, San Jose, California 95134, United States of America, and,pursuant to Legislative Decree no. 196/2003, its representative is Cypress Semiconductor GmbH (a subsidiary of CypressSemiconductor Corporation) - Willy-Brandt-Allee 4, 81829 Munich, Germany.Holder understands that Personal Data will not be publicized, but it may be transferred to banks, other financial institutions orbrokers involved in the management and administration of the Plan (and grants of awards made thereunder). Holder furtherunderstands that the Company and/or a Subsidiary will transfer Personal Data amongst themselves as necessary for the purposeof implementation, administration and management of Holder's participation in the Plan (and grants of awards madethereunder), and that the Company and/or a Subsidiary may each further transfer Personal Data to third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder), includingany requisite transfer of Personal Data to a broker or other third party with whom Holder may elect to deposit any Sharesacquired under the Plan. Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form,for the purposes of implementing, administering and managing Holder's participation in the Plan (and grants of awards madethereunder). Holder understands that these recipients may be located in or outside the European Economic Area, such as in theUnited States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connectedwith the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessarylegal obligations connected with the management and administration of the Plan.Holder understands that Personal Data processing related to the purposes specified above shall take place under automated ornon-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected andwith confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to LegislativeDecree no. 196/2003.The processing activity, including communication, the transfer of Personal Data abroad, including outside of the EuropeanEconomic Area as specified herein and pursuant to applicable laws and regulations, does not require Holder's consent thereto asthe processing is necessary to performance of contractual obligations related to implementation, administration and managementof the Plan (and grants of awards made thereunder). Holder understands that, pursuant to Section 7 of the Legislative Decree no.196/2003, Holder has the right to, including but not limited to, access, delete, update, correct or stop, for legitimate reason, thePersonal Data processing. Furthermore, Holder is aware that Personal Data will not be used for direct marketing purposes. Inaddition, Personal Data provided can be reviewed and questions or complaints can be addressed by contacting Holder's humanresources department.Plan Document Acknowledgment. In accepting the RSU, the Holder acknowledges that a copy of the Plan was made available to theHolder and that the Holder has reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understandsand accepts all provisions of the Plan, the Agreement and this Appendix. The Holder further acknowledges that he or she has read and specifically and expressly approves the following provisions in theAgreement: Vesting Schedule and Vesting Conditions and Nature of Award, as well as the following provision in the Plan: RestrictedStock/Restricted Stock Units.Additional Tax/Exchange Control Information. You are required to report in your annual tax return: (a) any transfers of cash orCommon Stock to or from Italy exceeding €10,000 or the equivalent amount in U.S. dollars; (b) any foreign investments or investments(including proceeds from the sale of Common Stock acquired under the Plan) held outside of Italy exceeding €10,000 or the equivalentamount in U.S. dollars, if the investment may give rise to taxable income in Italy; and (c) the amount of the transfers to and from abroadwhich have had an impact during the calendar year on your foreign investments or investments held outside of Italy. Under certaincircumstances, you may be exempt from requirement under (a) above if the transfer or investment is made through an authorizedbroker resident in Italy.JAPANData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold the following personal information for the purpose ofmanaging and administering the Plan ("Data"): the Holder's name, home address and telephone number, date of birth, social securitynumber or other Holder tax identification number, salary, nationality, job title, and information regarding equity compensation grants orCommon Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor. From time to time, the Companymay change the scope of its affiliates that hold, use or process Holder's personal information or the scope of Holder's personalinformation to be held, used or processed by the Company, its affiliates and the Holder's employer, by providing, or making easilyaccessible, information about such change to the Holder. The Company and its affiliates will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Theserecipients may be located in the United States, the European Economic Area, Japan or elsewhere. The Holder hereby authorizes them toreceive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering andmanaging participation in the Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may berequired for the administration of the Plan (and grants of awards made thereunder) on behalf of the Holder to a third party with whomthe Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require anynecessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consentmay affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.KOREAExchange Control Information. Korean residents who realize US$500,000 or more from the sale of shares of Common Stock or receiptof dividends in a single transaction are required to repatriate the proceeds to Korea within 18 months of receipt.MALAYSIAData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information from the Holder's Holderrecords, including the Holder's name, home address and telephone number, date of birth, social security number or other Holder taxidentification number, salary, nationality, job title, and information regarding equity compensation grants or Common Stock awarded,cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan("Data"). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation,administration and management of the Plan (and grants of awards made thereunder) and will disclose certain Data to the InlandRevenue Board and other relevant authorities as required by law. These recipients may be located in the United States, the EuropeanEconomic Area, Malaysia or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, inelectronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awardsmade thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants ofawards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan. The Data will be retained by the Company, its affiliates and the Holder's employer for the entire duration of theHolder's employment or service and for a further seven years after cessation of employment or service. The holder may, at any time,review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting Zauyah Kechik (or otherauthorized individual), at Sdn. Bhd. (613545-T), Phase II, Free Industrial Zone, Bayan Lepas, 11900 Penang, Malaysia; site phone no:+60 4 888 2000.Disclosure of Data is obligatory for the implementation, administration and management of the Plan (and grants of awards madethereunder); however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefitsintended by this Agreement.Director Notification. If the Holder is a director of a subsidiary or other related company in Malaysia, then the Holder is subject tocertain notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an obligation to notify theMalaysian subsidiary in writing when the Holder receives an interest (e.g., RSUs, Shares) in the Company or any related companies. Inaddition, the Holder must notify the Malaysian subsidiary when he or she sells Shares of the Company or any related company(including when the Holder sells Shares acquired under the Plan). These notifications must be made within 14 days of acquiring ordisposing of any interest in the Company or any related company.Securities Law Information. Malaysian insider-trading rules may impact the acquisition or disposal of Shares or rights to Shares underthe Plan. Under such rules, the Holder is prohibited from acquiring Shares or rights to Shares (e.g., RSUs) or selling Shares when he orshe possesses information that is not generally available and which the Holder knows or should know will have a material effect on theprice of the Shares once such information is generally available. By accepting this grant, the Holder acknowledges that he or she is notin possession of any material, non-publicly disclosed information regarding the Company at the time of grant and will not acquire orsell Shares when in possession of any material, non-publicly disclosed information regarding the Company.SINGAPORESecurities Law Information. The RSUs were granted to the Holder pursuant to the "Qualifying Person" exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) ("SFA"). The Agreement and the Plan have not been lodged orregistered as a prospectus with the Monetary Authority of Singapore. The Holder should note that the Holder's RSUs are subject tosection 257 of the SFA and the Holder will not be able to make any subsequent sale in Singapore, or any offer of such subsequent saleof the Shares unless such sale or offer in Singapore is made pursuant to the exemptions under Part XIII Division (1) Subdivision(4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).Director Notification. If the Holder is a director, associate director or shadow director of a subsidiary or other related company inSingapore, the Holder is subject to certain notification requirements under the Singapore Companies Act. Among these requirements isan obligation to notify the Singapore subsidiary in writing when the Holder receives an interest (e.g., RSUs, Shares) in the Company orany related company. In addition, the Holder must notify the Singapore subsidiary when the Holder sells Shares of the Company or anyrelated company (including when the Holder sells Shares acquired under the Plan). These notifications must be made within twobusiness days of acquiring or disposing of any interest in the Company or any related company. In addition, a notification must bemade of the Holder's interests in the Company or any related company within two business days of becoming a director.Insider Trading Notification. You should be aware of the Singapore insider trading rules, which may impact the acquisition or disposalof shares or rights to shares of Common Stock under the Plan. Under the Singapore insider trading rules, you are prohibited fromacquiring or selling shares of Common Stock or rights to shares of Common Stock (e.g., RSUs under the Plan) when you are inpossession of information which is not generally available and which you know or should know will have a material effect on the priceof Common Stock once such information is generally available.SWEDENNo country-specific Agreement terms apply.TAIWANExchange Control Information. You may remit foreign currency (including proceeds from the sale of Common Stock) into or out ofTaiwan up to US$5,000,000 per year without special permission. If the transaction amount is TWD500,000 or more in a singletransaction, you must submit a Foreign Exchange Transaction Form to the remitting bank and provide supporting documentation to thesatisfaction of the remitting bank.THAILANDNo country-specific Agreement terms apply.THE NETHERLANDSData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, citizen service number (burgerservicenummer) (former social securitynumber) or other Holder tax identification number (insofar as allowed), salary, nationality, job title, and information regarding equitycompensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for thepurpose of managing and administering the Plan ("Data"). The Company and its affiliates will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Currently, thethird parties are E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005., however theCompany may retain additional or different third parties for any of the purposes mentioned. These recipients may be located in theUnited States, the European Economic Area, or elsewhere. Countries outside the European Economic Area do not provide for a similarlevel of data protection as within the European Economic Area pursuant to the European Data Protection Directive 95/46/EC. TheHolder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes ofimplementing, administering and managing participation in the Plan (and grants of awards made thereunder), including any requisitetransfer of such Data as may be required for the administration of the Plan (and grants of awards made thereunder) on behalf of theHolder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at anytime, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company;however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by thisAgreement. The holder understands that he or she may request a list of the names and addresses of the third party recipients of Data bycontacting the Company through its local H.R. Representative at Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.UNITED KINGDOMEligible Individual. For the purpose of RSUs awarded in the UK, Consultants and Outside Directors are not eligible to receive awards.Tax Withholding.The following is added to the "Responsibility for Taxes" section of the Agreement.The Holder will be liable for and agrees to indemnify and keep indemnified the Company, any subsidiary and his/her employingcompany, if different, from and against any liability for or obligation to pay any Tax Liability (a "Tax Liability" being any liability forincome tax, Holder's National Insurance contributions and employer's National Insurance Contributions) that is attributable to (i) thegrant or vesting of, or any benefit derived by the Holder from, the RSUs, (ii) the acquisition by the Holder of the Common Stock on thesettlement of the RSUs, or (iii) the disposal of any Common Stock.The RSUs will not vest until the Holder has made such arrangements as the Company may require for the satisfaction of any TaxLiability that may arise in connection with the vesting or settlement of the RSUs and/or the acquisition of the Common Stock by theHolder. The Company shall not be required to issue, allot or transfer Common Stock until the Holder has satisfied this obligation.No Right to Continued Employment.This provision supplements the "Nature of Award" section of the Agreement.Neither the RSUs nor this Agreement:(i)confers upon the Holder any right to continue to be an Employee or Consultant of the Company or any of its subsidiaries orinterferes in any way with the right of the Company or any of its subsidiaries to terminate the Holder's employment at anytime; or(ii)forms part of the Holder's entitlement to remuneration and benefits in terms of his/her employment, or affects the Holder'sterms and conditions of employment.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information (including sensitivepersonal information) such as the Holder's name, home address and telephone number, date of birth, social security number or otherHolder tax identification number, salary, nationality, job title, and information regarding equity compensation grants or Common Stockawarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administeringthe Plan ("Data"). By participating in the Plan, the Holder agrees that the Company, its affiliates and the Holder's employer may holdand process such Data, and may transfer Data to any third parties assisting the Company or its affiliates in the implementation,administration and management of the Plan (and grants of awards made thereunder). These recipients may be located in the UnitedStates, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, process, use, hold, retainand transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in thePlan (and grants of awards made thereunder) and in the course of the Company's business, including any requisite transfer of such Dataas may be required for the administration of the Plan (and grants of awards made thereunder) on behalf of the Holder to a third partywith whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, requireany necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing theconsent may affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or this Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Joint Election. As a condition of the grant of RSUs, the Holder agrees to accept any liability for secondary Class 1 National Insurancecontributions (the "Employer NICs") which may be payable by the Company or the Employer with respect to the vesting of the RSUs orotherwise payable with respect to a benefit derived in connection with the RSUs.Without limitation to the foregoing, if requested by the Company, the Holder agrees to execute a joint election between the Companyand/or the Employer and Holder (the "Joint Election"), the form of such Joint Election being formally approved by Her Majesty'sRevenue & Customs ("HMRC"), and any other consent or election required to accomplish the transfer of the Employer NICs to theHolder. The Holder further agrees to execute such other joint elections as may be required between the Holder and any successor to theCompany and/or the Employer. If the Holder does not enter into a Joint Election in response to a Company request, no Shares shall beissued to the Holder (and neither the Company nor the Employer shall have any liability with respect to such non-issuance of shares).The Holder further agrees that the Company and/or the Employer may collect the Employer NICs from the Holder by any means.If the Holder has signed a Joint Election in the past with respect to an RSU award granted to him or her by the Company and that JointElection applies to all grants made under the Plan, the Holder need not sign another Joint Election in connection with this RSU grant.Responsibility for Taxes. This provision supplements the Agreement:You agree that, if you do not pay or the Employer or the Company does not withhold from you the full amount of Tax-Related Itemsthat you owe at vesting and settlement of the RSUs, or the release or assignment of the RSUs for consideration, or the receipt of anyother benefit in connection with the RSUs (the "Taxable Event") within 90 days after the Taxable Event, or such other period specifiedin Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the amount of income tax that should have beenwithheld shall constitute a loan owed by you to the Employer, effective 90 days after the Taxable Event. You agree that the loan willbear interest at the HMRC official rate and will be immediately due and repayable by you, and the Company and/or the Employer mayrecover it at any time thereafter by withholding the funds from salary, bonus or any other funds due to you by the Employer, bywithholding in shares of Common Stock issued upon vesting of your RSUs or from the cash proceeds from the sale of shares ofCommon Stock or by demanding cash or a cheque from you. You also authorize the Company to delay the issuance of any shares ofCommon Stock unless and until the loan is repaid in full.Notwithstanding the foregoing, if you are a director or executive officer (as within the meaning of Section 13(k) of the U.S. SecuritiesExchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that you are such adirector or executive officer and the income tax that is due is not collected from or paid by you within 90 days of the Taxable Event, theamount of any uncollected income tax may constitute a benefit to you on which additional income tax and national insurancecontributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directlyto the HMRC under the self-assessment regime and for reimbursing the Company or the Employer (as appropriate) for the value of anyHolder national insurance contributions due on this additional benefit.3Exhibit 10.3.3NOTICE OF GRANT OF MILESTONE-BASED RESTRICTED STOCK UNITSCongratulations! You have been granted an Award of Milestone-Based Restricted Stock Units ("RSUs") by CypressSemiconductor Corporation under the Spansion Inc. 2010 Equity Incentive Award Plan, as amended, and any applicable sub-planthereto for your country (collectively, the "Plan"), as follows:PARTICIPANT NAME: [name]PARTICIPANT ID: [ID#]TARGET NUMBER OF RSUs GRANTED: [number]Each RSU is equivalent to one share of Common Stock of Cypress Semiconductor Corporation (the "Company") for purposes ofdetermining the number of Shares subject to this Award. The RSUs are subject to forfeiture prior to vesting. None of the RSUs will vest(nor will you have the rights of a stockholder with respect to the underlying shares) until you satisfy the vesting conditions describedbelow and in the Milestone-Based Restricted Stock Unit Agreement accompanying this notice (the "RSU Agreement"). The number ofunvested RSUs and underlying shares is subject to adjustment under Section 12.2 of the Plan (such as in connection with a stock split orspin-off). Unless otherwise defined in this Notice of Grant of Milestone-Based Restricted Stock Units (this "Notice of Grant"),capitalized words that are defined in the Plan or the RSU Agreement have the meanings given to them in the Plan or the RSUAgreement, as applicable. Additional terms of this grant are as follows:GRANT NUMBER: [number]GRANT DATE: [date]VESTING BASE DATE: [date]VESTING SCHEDULE:1Target Number of RSUs Vesting Date[number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date][number of shares] [date]You acknowledge and agree that this Notice of Grant (including the vesting schedule above) does not constitute an express orimplied promise of continued engagement as an Employee or Consultant for the vesting period, for any period, or at all.You will not receive any Shares upon vesting unless and until satisfactory arrangements (as determined by the Administrator)have been made with respect to the collection of all Tax-Related Items that the Company or your Employer determines must bewithheld with respect to such Shares to be delivered upon the vesting of the RSUs. Currently, you can view the tax withholdingcollection method(s) that the Administrator has made available to you, including the default collection method (and if applicable youmay be able to select an alternate method) by accessing your Plan account at www.ETRADE.com.The Company's online acceptance procedure requires that you open each of the linked documents in order to proceed toacceptance.Please confirm your acceptance of this Award by clicking the "Accept" (or similar wording) button on the awardacceptance screen of your Plan account at www.ETRADE.com. If you wish to reject this award, you must so notify the Company'sStock Plan Administrator in writing to stockadmin@cypress.com no later than sixty (60) days after the grant date shown above. Ifwithin such sixty (60) day period you neither affirmatively accept nor affirmatively reject this Award, you will be deemed to haveaccepted this Award at the end of such sixty (60) day period pursuant to the terms and conditions set forth in this Notice of Grant, theRSU Agreement, and the Plan.By your acceptance of this Award:•you acknowledge receiving and reviewing this Notice of Grant, the RSU Agreement, the Plan, and the Company's relatedProspectus;2•you agree that the RSUs are granted under and governed by the terms and conditions of, and you agree to be bound by theterms of, this Notice of Grant, the RSU Agreement, and the Plan;•you agree to accept as binding, conclusive, and final all decisions or interpretations of the Plan Administrator upon anyquestions relating to the Plan and this Award; and•you consent to the collection, use and transfer, in electronic or other form, of your personal data as described in theRSU Agreement for the purpose of implementing, administering and managing your participation in the Plan.This Notice of Grant shall be construed and determined in accordance with the laws of the U.S. State of Delaware (withoutgiving effect to the conflict of laws principles thereof) and upon acceptance shall be deemed to have been executed and delivered bythe parties hereto as of the grant date shown above.CYPRESS SEMICONDUCTOR CORPORATIONSPANSION INC. 2010 EQUITY INCENTIVE AWARD PLANMILESTONE-BASED RESTRICTED STOCK UNIT AGREEMENT1. Grant. Cypress Semiconductor Corporation (the "Company") hereby grants to the participant (the "Holder") named in the Notice ofGrant of Milestone-Based Restricted Stock Units (the "Notice of Grant") an Award of Restricted Stock Units ("RSUs"), as set forth inthe Notice of Grant and subject to the terms and conditions in this Milestone-Based Restricted Stock Unit Agreement ("Agreement"),in the Company's Spansion Inc. 2010 Equity Incentive Award Plan, as amended, and in any applicable sub-plan for the Holder'scountry (such plan and any such sub-plan, if applicable, collectively, the "Plan"). A sub-plan is applicable to this Award if, but only if,the country-specific terms for the Holder's country as set forth in Appendix A state that this Award is granted under or subject to suchsub-plan. Unless otherwise defined herein, capitalized terms used but not defined in this Agreement shall have the meanings given tothem in the Plan (the "Agreement").2. Company's Obligation. Each Milestone-based RSU represents the right to receive one share of Cypress Common Stock (as adjustedin accordance with Section 12.2 of the Plan, a "Share") on the Vesting Date (as defined below) if and to the extent that the vestingconditions established by or pursuant to the Notice of Grant, this Agreement and the Plan have been satisfied. Unless and until RSUsvest, the Holder will have no right to receive Shares (or any other payment) in connection with such RSUs. Prior to actual distributionof Shares in settlement of any vested RSUs, such RSUs represent an unsecured obligation of the Company, payable (if at all) onlyfrom the general assets of the Company.3. Vesting Conditions and Procedure.(a) Vesting Conditions. Subject to Section 4 below, the vesting of RSUs on each scheduled vesting date set forth in the Notice ofGrant (each, a "Vesting Date") shall be subject to (i) the Holder's continuous service as an Employee or Consultant from the grant datespecified in the Notice of Grant (the "Date of Grant") to such Vesting Date (the "Service-Based Condition") and (ii) satisfaction of theapplicable performance conditions prior to such Vesting Date as described below. Employment or service for only a portion of thevesting period described in clause (i) above, even if a substantial portion, will not entitle the Holder to any proportionate vesting oravoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section4 below or in the Plan. For each scheduled Vesting Date, the Administrator shall designate an associated performance period (each, a"Performance Period") that ends no later than such Vesting Date and shall establish performance targets applicable to suchPerformance Period. The Administrator shall also establish a methodology for determining the percentage of the target number ofRSUs set forth opposite such Vesting Date in the Vesting Schedule (the "Target Number of RSUs") that will be credited to the Holderbased on relative achievement of such performance targets ("Performance-Based Criteria"). Performance-Based Criteria (1) shall beestablished by the Administrator not later than thirty (30) days after the start of a quarterly or semi-annual Performance Period to whichthey relate, and no later than ninety (90) days after the start of an annual (or longer) Performance Period to which they relate and(2) shall be communicated to the Holder promptly after being established by the Administrator. Within sixty (60) days following theend of each Performance Period, the Administrator shall determine whether and the extent to which the performance targets for thatPerformance Period were met and will confirm the crediting percentage (the "Crediting Percentage") that applies pursuant to thepreviously established methodology. Such determination shall be final and binding absent manifest error. In no event shall theCrediting Percentage be greater than 200 percent. For the avoidance of doubt, unless the Holder is an executive officer, theresponsibilities allocated to the Administrator in this paragraph may be performed by an officer of the Company if the Administratorhas delegated appropriate authority to such officer.(b) Vesting Procedure. On each Vesting Date, if the Holder has satisfied the Service-Based Condition, the number of RSUs that shallvest and become non-forfeitable shall be equal to the Target Number of RSUs for such Vesting Date multiplied by the applicableCrediting Percentage. Any of the Target Number of RSUs for a particular Vesting Date that do not vest on such Vesting Date inaccordance with this Section 3 shall terminate as of the last day of the associated Performance Period.4. Forfeiture upon Termination of Service; Leaves of Absence.(a) Forfeiture upon Termination of Service. Notwithstanding any contrary provision of this Agreement or the Notice of Grant, upon theHolder's Termination of Service for any or no reason after the Date of Grant but prior to vesting, any unvested RSUs awarded by thisAgreement will thereupon be forfeited at no cost to the Company and, if applicable, at no cost to the Company affiliate that actuallyemploys or otherwise engages the Holder (the "Employer"). Neither the Holder nor any of the Holder's successors, heirs, assigns orpersonal representatives shall have any rights or interests in any RSUs that are forfeited pursuant to any provision of this Agreement orthe Plan.(b) Unpaid Leaves of Absence. Unless otherwise provided by the Administrator (such as in a leave of absence vesting policy orotherwise) and subject to compliance with all applicable laws, in the event the Holder takes an approved but unpaid leave of absence("LOA") from the Company or the Employer (as applicable) during a Performance Period, such LOA shall have the following effects:(1)if the Performance Period is one fiscal year or less and the portion of the Performance Period during which the Holder is onLOA is less than or equal to 25% of the Performance Period, then the number of Shares that actually vests on the Vesting Dateassociated with such Performance Period shall be the number that otherwise would have vested on such date under Section3(b) above multiplied by a fraction, the numerator of which is the number of calendar days in the Performance Period duringwhich the Holder was not on LOA, and the denominator of which is the number of calendar days in the Performance Period;(2)if the Performance Period is one fiscal year or less and the portion of the Performance Period during which the Holder is onLOA is greater than 25% of the Performance Period, then the Target Number of RSUs associated with such PerformancePeriod shall be forfeited when the length of the LOA exceeds 25% of the Performance Period and no RSUs shall be eligible tobe earned or to vest for such Performance Period;(3)if the Performance Period is longer than one fiscal year and the portion of the Performance Period during which the Holder ison LOA is 180 days or less, then the number of Shares that actually vests on the Vesting Date associated with suchPerformance Period shall be the number that otherwise would have vested on such date under Section 3(b) above multiplied bya fraction, the numerator of which is the number of calendar days in the Performance Period during which the Holder was noton LOA, and the denominator of which is the number of calendar days in the Performance Period; and(4)if the Performance Period is longer than one fiscal year and the portion of the Performance Period during which the Holder ison LOA is 181 days or more, then the Target Number of RSUs associated with such Performance Period shall be forfeited onsuch 181st day and no RSUs shall be eligible to be earned or to vest for such Performance Period.5. Settlement in Shares after Vesting. Subject to Section 17 (regarding tax matters), any RSUs that vest in accordance with thisAgreement will be settled by delivery of Shares to the Holder (or in the event of the Holder's death, to his or her estate) as soon aspracticable after (and in no case more than seventy-four days after) the date such RSUs vest and become non-forfeitable.6. Payments after Death. Any distribution or delivery to be made to the Holder under this Agreement will, if the Holder is thendeceased, be made to the administrator or executor of the Holder's estate. Any such administrator or executor must furnish theCompany with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validityof the transfer and compliance with any laws or regulations pertaining to said transfer.7. Rights as Stockholder. Neither the Holder nor any person claiming under or through the Holder will have any of the rights orprivileges of a stockholder of the Company (including, without limitation, voting and dividend rights) in respect of any Sharesdeliverable hereunder unless and until certificates (or book-entry positions) representing such Shares have been issued, recorded on therecords of the Company or its transfer agents or registrars, and delivered to the Holder or the Holder's broker.8. No Effect on Employment or Status. If the Holder is employed in the United States, (1) the Holder's employment or other servicerelationship with the Company or the Employer is on an at-will basis only; and accordingly, the terms of the Holder's employment orother service relationship with the Company or the Employer will be determined from time to time by the Company or the Employer,and the Company or the Employer will have the right, which is hereby expressly reserved, to terminate or change the terms of theemployment or other service relationship of the Holder at any time for any reason whatsoever, with or without good cause or notice;and (2) the Holder understands and agrees that the vesting of the RSUs subject to this Award pursuant to Section 3 is subject toperformance conditions, as may be determined pursuant to the terms of this Agreement, and to the Holder's continuing in the employ orservice of the Company or the Employer through each applicable Vesting Date.9. Address for Notices. (a) Any notice to be given to the Company under the terms of this Agreement will be addressed to theCompany at 198 Champion Court, San Jose, California 95134-1599, Attn: Stock Administration, or at such other address as theCompany may hereafter designate in writing or electronically. (b) Any notice to be given to the Holder under the terms of thisAgreement will be addressed to the Holder's address appearing on the books of the Company or to the Holder's residence or to suchother address as may be designated in writing by the Holder. Notices may also be delivered to the Holder, during his or heremployment, through the Company's inter-office or electronic mail systems.10. Grant is Not Transferable. Except to the limited extent provided in Section 6 of this Agreement, this grant and the rights andprivileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law orotherwise) and will not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge,hypothecate or otherwise dispose of this grant, or any right or privilege conferred hereby, or upon any attempted sale under anyexecution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null andvoid.11. Binding Agreement. Subject to the limitation on the transferability of this grant contained herein, this Agreement will be bindingupon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.12. Additional Conditions to Issuance of Stock. If at any time the Company determines, in its discretion, that the listing, registration orqualification of the Shares upon any securities exchange or under any state, federal, or foreign law, or the consent or approval of anygovernmental regulatory authority is necessary or desirable as a condition to the issuance of Shares to the Holder (or his or her estate),such issuance will not occur unless and until such listing, registration, qualification, consent or approval will have been effected orobtained free of any conditions not acceptable to the Company. The Company will make all reasonable efforts to meet therequirements of any such U.S. state or federal law or securities exchange and to obtain any such consent or approval of any domesticgovernmental authority.13. Plan Governs. This Agreement and the Notice of Grant are subject to all terms and provisions of the Plan. The Holder has beenprovided a copy of the Plan and has had an opportunity to review the Plan and shall be bound by all the terms and provisions of thePlan. In the event of a conflict between one or more provisions of this Agreement or the Notice of Grant and one or more provisions ofthe Plan, the provisions of the Plan will govern.14. Administrator Authority. The Administrator will have the power to interpret the Plan, this Agreement, and the Notice of Grant andto adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret orrevoke any such rules (including, but not limited to, the determination of whether or not any RSUs have vested). All actions taken andall interpretations and determinations made by the Administrator in good faith will be final and binding upon Holder, the Company,and all other interested persons. No member of the Administrator will be personally liable for any action, determination, orinterpretation made in good faith with respect to the Plan or this Agreement.15. Additional Terms for Holders Providing Services Outside the United States. To the extent the Holder provides (or provided,subsequent to the vesting base date set forth in the Notice of Grant) services to the Company or the Employer in a country other thanthe United States, the RSUs shall be subject to such additional or substitute terms as are set forth for such country in Appendix Aattached hereto.16. Data Privacy. The Holder hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic orother form, of the Holder's personal data as described in this Agreement by and among, as applicable, the Employer and theCompany and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing the Holder'sparticipation in the Plan.The Holder understands that the Company and the Employer may hold certain personal information about the Holder, including,but not limited to, the Holder's name, home address and telephone number, date of birth, social insurance number, passportnumber, or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company,details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in the Holder's favor, forthe purpose of implementing, administering and managing the Plan ("Data").The Holder understands that Data may be transferred to such stock plan service provider (or providers) as may be selected by theCompany which is (or are) assisting in the implementation, administration and management of the Plan and awards grantedthereunder. The Holder understands that these recipients of Data may be located in the United States, or elsewhere, and that therecipients' country (e.g., the United States) may have different data privacy laws and protections than the Holder's country. TheHolder understands that he or she may request a list with the names and addresses of any potential recipients of the Data bycontacting the Holder's local human resources representative. The Holder hereby authorizes the Company and any other possiblerecipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan andawards granted thereunder to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose ofimplementing, administering and managing the Holder's participation in the Plan.The Holder understands that Data will be held only as long as is necessary to implement, administer and manage his or herparticipation in the Plan. The Holder understands that he or she may, at any time, view Data, request additional information aboutthe storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in anycase without cost, by contacting in writing the Holder's local human resources representative. The Holder understands, however,that refusing or withdrawing his or her consent may affect the Holder's ability to participate in the Plan and the Participant'scontinued eligibility for this Award or eligibility to be granted any other awards under the Plan. For more information on theconsequences of the Holder's refusal to consent or withdrawal of consent, the Holder understands that he or she may contact hisor her local human resources representative.17. Responsibility for Taxes.(a) Regardless of any action the Company or the Employer takes with respect to any and all income or withholding tax (includingfederal, state and local tax), social insurance, payroll tax, payment on account or other tax-related items related to the Holder'sparticipation in the Plan and legally applicable to him or her ("Tax-Related Items"), the Holder acknowledges that the ultimate liabilityfor all Tax-Related Items is and remains the Holder's responsibility and may exceed the amount, if any, actually withheld by theCompany and/or the Employer. The Holder further acknowledges that the Company and/or the Employer (1) make no representationsor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the RSUs, including the grant of theRSUs, the vesting of RSUs, the issuance of Shares, the subsequent sale of any Shares acquired under the Award and the receipt of anydividends; and (2) do not commit to and are under no obligation to structure the terms of the Award or any aspect of the RSUs toreduce or eliminate the Holder's liability for Tax-Related Items or achieve any particular tax result. Further, if the Holder has becomesubject to tax in more than one jurisdiction between the Date of Grant and the date of any taxable or tax withholding event, asapplicable, the Holder acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required towithhold or account for Tax-Related Items in more than one jurisdiction.(b) Prior to any relevant taxable or tax withholding event, as applicable, the Holder shall pay or make adequate arrangementssatisfactory to the Company and/or the Employer to satisfy all Tax-Related Items that the Company determines it or the Employer isrequired to withhold under applicable laws with respect to the RSUs. In this regard, the Holder authorizes the Company and/or theEmployer, or their respective agents, to satisfy the obligation with regard to all Tax-Related Items by any one or a combination of thefollowing methods: (1) by requiring the Holder to pay such amount in cash or by check; (2) by deducting such amount out of wages orany other cash compensation otherwise payable to the Holder by the Company and/or the Employer; (3) by withholding (and/orreacquiring) a number of Shares issuable (or issued) in payment of the RSUs having a Fair Market Value equal to such amount; (4) byrequiring the Holder to deliver to the Company already owned shares of Common Stock having a Fair Market Value equal to suchamount; and/or (5) withholding such amount from the proceeds of a sale of a sufficient number of Shares issued upon vesting of theRSUs ("Sell-To-Cover") either through a voluntary sale or through a mandatory sale arranged by the Company (on the Holder's behalfpursuant to this authorization). For these purposes, the Fair Market Value of any Shares to be withheld or repurchased, as applicable,shall be determined on the date that Tax-Related Items are to be determined. To the extent any of the above methods involves a sale ofShares, the Holder acknowledges that neither the Company nor its designated broker is obligated to arrange for such sale of Shares atany particular price.To avoid negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering minimumstatutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholdingin Shares, for tax purposes, the Holder is deemed to have been issued the full number of Shares subject to the vested portion of theRSUs, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items due as aresult of any aspect of the Holder's participation in the Plan.(c) The Holder shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer maybe required to withhold as a result of the Holder's receipt of RSUs, the vesting of RSUs, or the issuance of Shares that cannot besatisfied by the means previously described. The Company may refuse to deliver Shares to the Holder if the Holder fails to complywith the Holder's obligations in connection with Tax-Related Items as described in this Section 17.(d) The Holder understands that the Company may allow the Holder to select a tax withholding collection method and that, if noselection is made, the default collection method may be Sell-To-Cover. In that default case and/or if the Holder subsequently selectsSell-To-Cover (or the related "same-day sale" alternative), the Holder hereby agrees and instructs that a sufficient number of Sharesissued in payment of RSUs that become non-forfeitable shall be sold by the Company's designated brokerage firm on the Holder'sbehalf and for the Holder's account pursuant to this authorization on or as soon as administratively possible after the date of issuance.This paragraph is intended as a trading plan meeting the requirements of Rule 10b5-1(c)(1)(i) under the U.S. Securities Exchange Actof 1934, as amended. The Holder hereby represents and warrants that (a) at the time of entering into this Agreement and trading planand at the time of making any subsequent Sell-To-Cover or "same-day sale" election constituting a trading plan hereunder, he or she isnot aware of any material, nonpublic information regarding the Company or its securities and (b) he or she is entering into thisAgreement and any such trading plan in good faith and not as part of a plan or scheme to avoid the prohibitions of Rule 10b5-1. TheHolder agrees (i) never to directly or indirectly communicate any material, non-public information regarding the Company to theCompany's designated brokerage firm or any employee or affiliate thereof and (ii) at any time an above trading plan is in effect, (x) notto influence how, when, or whether the Shares are sold (other than by selecting a different tax withholding collection method that doesnot involve sale of Shares, which is equivalent to terminating the trading plan), and (y) not to enter into or alter a correspondinghedging transaction or position with respect to the Shares. The Holder agrees that he or she will not change the tax withholdingcollection method to Sell-To-Cover (or to the related "same-day sale" alternative) at a time when he or she would be prohibited fromtrading under the Company's Insider Trading Policy (as defined below).18. Miscellaneous.(a) Headings. The headings in this Agreement are provided for convenience only and are not to serve as a basis for interpretation orconstruction of, and shall not constitute a part of, this Agreement.(b) Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to thisAward or future Awards that may be made under the Plan (or other Company equity plans) by electronic means, request the Holder'sconsent to participate in the Plan (or other Company equity plans) by electronic means, or deliver vested Shares by book-entry to theHolder's account at a brokerage selected by the Company. The Holder hereby consents to receive such documents by electronicdelivery, authorizes vested shares to be delivered to such a brokerage account by book-entry, and agrees to participate in the Planthrough an on-line or electronic system established and maintained by the Company or a third-party brokerage designated by theCompany.(c) Section 409A. This Agreement and the Award are intended to comply with or be exempt from, as the case may be, Section 409Aof the Code so as to not result in any tax, penalty or interest thereunder. This Agreement and the Award shall be construed andinterpreted accordingly. Except for the Company's tax withholding rights, the Holder shall be solely responsible for any and all taxliability with respect to the Award.(d) Invalid Provision. The invalidity or unenforceability of any particular provision hereof shall not affect the other provisions hereof,and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.(e) Governing Law/Choice of Venue.(1)This Agreement and the rights of the Holder hereunder shall be construed and determined in accordance with the laws of theState of Delaware (without giving effect to the conflict of laws principles thereof).(2)For the purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by theAward or this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the State of California wherethis grant is made and/or to be performed and agree that such litigation shall be conducted only in the courts of Santa ClaraCounty, California, or the federal court of the United States for the Northern District of California, and no other courts.(f) Imposition of Other Requirements. If the Holder relocates to another country after the Date of Grant, the Company reserves theright to impose other requirements on the Holder's participation in the Plan, to the extent the Company determines it is necessary oradvisable in order to comply with local law or facilitate the administration of the Plan, and to require the Holder to sign any additionalagreements or undertakings that may be necessary to accomplish the foregoing.(g) No Advice Regarding Award. The Company is not providing any tax, legal or financial advice, nor is the Company making anyrecommendations regarding the Holder's participation in the Plan, or the Holder's acquisition or sale of the underlying Shares. TheHolder is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation inthe Plan before taking any action related to the Plan.(h) Insider Trading Restrictions/Market Abuse Laws. The Holder acknowledges and agrees that he or she is subject to the Company'sAmended and Restated Insider Trading Policy as may be amended from time to time (the "Insider Trading Policy") including itsrestrictions that extend for a limited period of time after the Holder's termination of service. In addition, the Holder understands that heor she may be subject to insider trading restrictions under securities laws, market abuse laws, and/or other similar laws, and suchrestrictions may affect his or her ability to acquire or sell Shares or rights to Shares. The Holder acknowledges that it is the Holder'sresponsibility to comply with such Company policies and any additional restrictions that may apply under applicable laws with respectto the Holder's acquisition, holding, and any disposition of Shares or rights to Shares. (i) Recoupment. Notwithstanding any other provision herein, any recoupment or "clawback" policies adopted by the Board or theAdministrator and applicable to equity awards, as such policies are in effect from time to time, shall apply to this Award, any Sharesthat may be issued in respect of this Award, and any proceeds (including dividends and sale proceeds) of such Shares.(j) Entire Agreement. This Agreement, the Notice of Grant, and the Plan contain the entire agreement and understanding of the partieshereto with respect to the subject matter contained herein and therein and supersede all prior communications, representations andnegotiations in respect thereto.(k) Signature and Acceptance. This Agreement shall be deemed to have been accepted and signed by the Holder and the Company asof the Date of Grant upon the Holder's online acceptance or deemed acceptance as set forth in the Notice of Grant.(l) Modifications. The provisions of this Agreement may not be changed, modified, or waived in a manner that is adverse to theHolder's interests except by means of a writing signed by the Holder and the Company.APPENDIX AThis Appendix A to the Spansion Inc. 2010 Equity Incentive Award Plan, as amended (the "Plan"), Restricted Stock Unit Agreement(the "Agreement") includes special terms and conditions applicable to Holders in the countries below. These terms and conditions are inaddition to or substitute for, as applicable, those set forth in the Agreement. Any capitalized term used in this Appendix A withoutdefinition shall have the meaning ascribed to such term in the Plan or the Notice of Grant, as applicable.Each Holder is advised to seek appropriate professional advice as to how the relevant exchange control and tax laws in the Holder'scountry may apply to the Holder's individual situation.ALL COUNTRIES OUTSIDE THE UNITED STATESThe following provisions replace Section 8 of the Agreement:Nature of Award. In accepting the Award, the Holder acknowledges, understands, and agrees that:(i) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended orterminated by the Company at any time;(ii) the Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs,or benefits in lieu of RSUs even if RSUs have been awarded repeatedly in the past;(iii) all decisions with respect to future awards, if any, will be at the sole discretion of the Company;(iv) the Holder's participation in the Plan will not create a right to further employment with the Employer and shall not interfere with theability of the Employer to terminate the Holder's employment relationship;(v) the Holder's participation in the Plan is voluntary;(vi) the Award of RSUs is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered tothe Company or to the Employer, and which is outside the scope of the Holder's employment contract, if any;(vii) the Award of RSUs is not part of normal or expected compensation or salary for any purposes, including, but not limited to,calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension orretirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to,past services for the Company, the Employer or any Subsidiary;(viii) in the event that the Holder is not an employee of the Company, the Award shall not be interpreted to form an employmentcontract or relationship with the Company; and furthermore, the Award will not be interpreted to form an employment contract with theEmployer or any Subsidiary;(ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty;(x) no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs upon Termination of Service (for anyreason whatsoever and whether or not in breach of local labor laws) and in consideration of the Award of RSUs to which the Holder isotherwise not entitled, the Holder irrevocably agrees never to institute any claim against the Company or the Employer, waives theability, if any, to bring any such claim, and releases the Company and the Employer from any such claim; if, notwithstanding theforegoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Holder shall be deemedirrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal orwithdrawal of such claims; and(xi) upon a Termination of Service (whether or not in breach of local labor laws), the Holder's right to vest in the RSUs under the Plan,if any, will terminate effective as of the date that the Holder is no longer actively employed by or does no longer actively renderservices to the Company or any of its Subsidiaries and will not be extended by any notice period mandated under local law; theAdministrator shall have the exclusive discretion to determine when the Holder is no longer actively employed for purposes of thisAward of RSUs.CANADASettlement of RSUs. Notwithstanding any terms or conditions of the Plan or the Agreement to the contrary, RSUs will be settled inshares of Common Stock only, not cash.Securities Law Information. You acknowledge and agree that you will only sell shares of Common Stock acquired through participationin the Plan outside of Canada through the facilities of a stock exchange on which the Common Stock is listed. Currently, the shares ofCommon Stock are listed on the NASDAQ.Termination of Employment. This provision replaces Section 4(a) of the Agreement:In the event of your termination of employment or other service relationship (for any reason whatsoever, whether or not later found tobe invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, ifany), your right to vest in the RSUs will terminate effective as of the date that is the earlier of (1) the date you are no longer activelyproviding service or (2) the date you receive notice of termination of employment from the Employer, regardless of any notice periodor period of pay in lieu of such notice required under applicable laws (including, but not limited to statutory law, regulatory law and/orcommon law); the Company shall have the exclusive discretion to determine when you are no longer actively employed for purposes ofthe RSUs.The following provisions apply if you are resident in Quebec:Language Acknowledgment. The parties acknowledge that it is their express wish that this Agreement, including this Appendix, as wellas all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto,be provided to them in English.Consentement relatif à la langue utilisée. Les parties reconnaissent avoir expressément souhaité que la convention («Agreement») ainsique cette Annexe, ainsi que tous les documents, avis et procédures judiciares, éxécutés, donnés ou intentés en vertu de, ou liésdirectement ou indirectement à la présente convention, soient rédigés en langue anglaise.Maternity and Paternity Leave. For the avoidance of doubt, Section 4(b) of the Agreement shall not apply to any maternity or paternityleave to which employees in Canada are entitled by law.FINLANDNo country-specific Agreement terms apply.FRANCESub-Plan. The Award shall be deemed not to have been granted under any French sub-plan.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, social security number or other Holder tax identification number,employment history and status, salary, nationality, job title, and information regarding equity compensation grants or Common Stockawarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administeringthe Plan ("Data"). The Company, its affiliates and Holder's employer will transfer Data to any third parties assisting the Company in theimplementation, administration and management of the Plan (and grants of awards made thereunder). Currently, the third party isE*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005, however the Company may retainadditional or different third parties for any of the purposes mentioned. The Company may also make the Data available to publicauthorities where required under locally applicable law. These recipients may be located in the United States, the European EconomicArea, or elsewhere, which the Holder separately and expressly consents to, accepting that outside the European Economic Area, dataprotection laws may not be as protective as within. The Holder hereby authorizes them to receive, possess, use, retain and transfer theData, in electronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants ofawards made thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grantsof awards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan. The Holder may, at any time, review Data, require any necessary amendments to it or withdraw the consent hereinin writing by contacting the Company through its local H.R. director; however, withdrawing the consent may affect the Holder's abilityto participate in the Plan and receive the benefits intended by this Agreement. Data will only be held as long as necessary to implement,administer and manage the Holder's participation in the Plan and any subsequent claims or rights.French Language Provision. By accepting this Agreement, Holder confirms having read and understood the documents relating to thePlan which were provided to Holder in the English language. Holder accepts the terms of those documents accordingly.French translation: En acceptant ce Contrat vous confirmez ainsi avoir lu et compris les documents relatifs au Plan qui vous ont étécommuniqués en langue anglaise. Vous en acceptez les termes en connaissance de cause.Exchange Control Information. If you import or export cash (e.g., sales proceeds received under the Plan) with a value equal to orexceeding €10,000 and do not use a financial institution to do so, you must submit a report to the customs and excise authorities.Tax Reporting. If you hold shares of Common Stock outside of France or maintain a foreign bank account, you are required to reportsuch to the French tax authorities when filing your annual tax return. Failure to comply could trigger significant penalties.GERMANYAcceptance of Agreement. Notwithstanding the terms of the Agreement, a Holder must acknowledge and accept the Agreement bysigning a copy of the Agreement and returning the original signed document within 30 days after the date of the electronic mailnotification of the Agreement. For the avoidance of doubt, this Agreement may be accepted electronically or please sign and return theAgreement to: Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.No Impact on Other Rights. The grant of RSUs under the Plan is a one-time benefit and does not create any contractual or other right toreceive any other grant of RSUs or other awards under the Plan in the future.Exchange Control Information. Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. Inthe event that you make or receive a payment in excess of this amount, you are responsible for obtaining the appropriate form from theremitting bank and complying with applicable reporting requirements.Consent to Personal Data Processing and Transfer.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company and the Holder's employer hold certain personal information, including the Holder's name, homeaddress and telephone number, date of birth, social security number or other Holder tax identification number, salary, nationality, jobtitle, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested, unvested oroutstanding in the Holder's favor, for the purpose of managing and administering the Plan ("Data"). The Company and the Holder'semployer will transfer Data to any third parties assisting the Company in the implementation, administration and management of thePlan (and grants of awards made thereunder), at the time being E*Trade Financial Corporate Services, Inc., 4005 Windward PlazaDrive, Alpharetta, GA 30005. These recipients are located in the European Economic Area, but also outside and in so-called insecurethird-party countries that do not guarantee the data privacy protection level of the European Economic Area, for example the UnitedStates. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for thepurposes of implementing, administering and managing participation in the Plan (and grants of awards made thereunder), including anyrequisite transfer of such Data as may be required for the administration of the Plan (and grants of awards made thereunder) on behalfof the Holder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, atany time, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company;however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by thisAgreement.HONG KONGWARNING: The RSUs and Shares do not constitute a public offering of securities under Hong Kong law and are available only toEmployees. The Agreement, including this Appendix, the Plan and other incidental communication materials have not been prepared inaccordance with and are not intended to constitute a "prospectus" for a public offering of securities under the applicable securitieslegislation in Hong Kong. Nor have the documents been reviewed by any regulatory authority in Hong Kong. The RSUs are intendedonly for the personal use of each Employee and may not be distributed to any other person. If the Employee is in any doubt about anyof the contents of the Agreement, including this Appendix or the Plan, the Employee should obtain independent professional advice.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Sale of Shares. To facilitate compliance with securities laws in Hong Kong, in the event the Employee's RSUs vest and Shares areissued to the Employee within six months of the Date of Grant, the Employee agrees that he or she will not dispose of any Sharesacquired prior to the six-month anniversary of the Date of Grant.Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of theOccupational Retirement Schemes Ordinance ("ORSO"). Notwithstanding the foregoing, if the Plan is deemed to constitute anoccupational retirement scheme for the purposes of ORSO, then the Employee's grant shall be void. INDIAExchange Control Notification. The Holder understands that he or she must repatriate any proceeds from the sale of Shares acquiredunder the Plan and any dividends received in relation to the Shares to India and convert the funds into local currency within 90 days ofreceipt. The Holder must obtain a foreign inward remittance certificate ("FIRC") from the bank where the Holder deposits the foreigncurrency and maintains the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Companyrequests proof of repatriation. It is your responsibility to comply with applicable exchange control laws in India.Effective April 1, 2012, you are required to declare in your annual tax return (a) any foreign assets held by you or (b) any foreign bankaccounts for which you have signing authority.IRELANDManner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or the Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Exclusion from Termination Indemnities and Other Benefits. This provision supplements Section 8 of the Agreement:By accepting the RSUs, the Holder acknowledges, understands, and agrees that the benefits received under the Plan will not be takeninto account for any redundancy or unfair dismissal claim.Director Notification. If the Holder is a director, shadow director or secretary of an Irish subsidiary of the Company, the Holder issubject to certain notification requirements under Section 53 of the Companies Act, 1990. Among these requirements is an obligation tonotify the Irish affiliate in writing within five (5) business days when the Holder receives an interest (e.g., RSUs, Shares) in theCompany and the number and class of shares or rights to which the interest relates. In addition, the Holder must notify the Irishsubsidiary within five (5) business days when the Holder sells Shares acquired under the Plan. This notification requirement also appliesto any rights or Shares acquired by the Holder's spouse or children (under the age of 18).ISRAELSecurities Law Notice. This RSU Award is granted pursuant to an exemption issued by the Israeli Securities Authority under Section15D of the Securities Law of 1968. The grant of this RSU Award and the issuance of its underlying shares are registered with the U.S.Securities and Exchange Commission on Form S-8. The Company will make available to any interested Israeli offeree, at his or herworkplace, the Form S-8 and all documents attached to the Form S-8, including any document directly or indirectly referred to in theForm S-8 or in its exhibits. To request any such documents, please contact stockadmin@cypress.com.Sub-Plan and Tax-Based Restrictions. If on the Date of Grant, the Holder is an employee of the Company's subsidiary in Israel, CypressSemiconductors Ltd., then this Award is granted under and subject to the terms of the Spansion Inc. 2010 Equity Incentive AgreementPlan Sub-Plan – Israel (the "Israeli Sub-Plan") and the Holder acknowledges and agrees to the following: This Agreement is grantedunder and governed by the Plan, the Israeli Sub-Plan, Section 102(b)(2) of the Israeli Income Tax Ordinance (New Version) – 1961 andthe Rules promulgated in connection therewith ("Section 102"), and the trust agreement (the "Trust Agreement") between the Companyand the Trustee (as defined in the Israeli Sub-Plan).•The proceeds of any shares of Common Stock issued upon vesting of the RSUs will be remitted by the Company or itsdesignated broker to the Trustee to administer on Holder's behalf, pursuant to the terms of Section 102 and the Trust Agreement.•Holder is familiar with the terms and provisions of Section 102, particularly the Capital Gains Track (as defined in the IsraeliSub-Plan) described in subsection (b)(2) thereof, and agrees that Holder will not release or sell (or require the Trustee to releaseor sell) the RSUs or underlying shares of Common Stock during the Restricted Holding Period (as defined in the Israeli Sub-Plan), unless permitted to do so by applicable law.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, social security number or other Holder tax identification number, salary,nationality, job title, and information regarding equity compensation grants or Common Stock awarded, cancelled, purchased, vested,unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan ("Data"). The Company, itsaffiliates and the Holder's employer will transfer Data to any third parties assisting the Company in the implementation, administrationand management of the Plan (and grants of awards made thereunder). These recipients may be located in the United States, theEuropean Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, inelectronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awardsmade thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants ofawards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan, including transfers outside of Israel and further transfers thereafter. The Holder may, at any time, review Data,require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawingthe consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.ITALYData Privacy Notice and Consent.This provision replaces the "Data Privacy" section of the Agreement.Holder hereby explicitly and unambiguously consents to the collection, use, processing and transfer, in electronic or other form, ofpersonal data as described in this section of Appendix A by and among, as applicable, the Company and any Subsidiary for theexclusive purpose of implementing, administering and managing Holder's participation in the Plan (and grants of awards madethereunder).Holder understands that the Company and any Subsidiary may hold certain personal information about Holder, including but notlimited to, Holder's name, home address and telephone number, date of birth, social insurance number or other identificationnumber, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of the RSUs orany other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Holder'sfavor, for the exclusive purpose of managing and administering the Plan ("Personal Data").Holder also understands that providing the Company with Personal Data is necessary for the performance of the Plan and thatHolder's denial to provide Personal Data would make it impossible for the Company to perform its contractual obligations andmay affect Holder's ability to participate in the Plan. The Controller of Personal Data processing is Cypress SemiconductorCorporation, with its principal offices at 198 Champion Court, San Jose, California 95134, United States of America, and,pursuant to Legislative Decree no. 196/2003, its representative is Cypress Semiconductor GmbH (a subsidiary of CypressSemiconductor Corporation) - Willy-Brandt-Allee 4, 81829 Munich, Germany.Holder understands that Personal Data will not be publicized, but it may be transferred to banks, other financial institutions orbrokers involved in the management and administration of the Plan (and grants of awards made thereunder). Holder furtherunderstands that the Company and/or a Subsidiary will transfer Personal Data amongst themselves as necessary for the purposeof implementation, administration and management of Holder's participation in the Plan (and grants of awards madethereunder), and that the Company and/or a Subsidiary may each further transfer Personal Data to third parties assisting theCompany in the implementation, administration and management of the Plan (and grants of awards made thereunder), includingany requisite transfer of Personal Data to a broker or other third party with whom Holder may elect to deposit any Sharesacquired under the Plan. Such recipients may receive, possess, use, retain and transfer Personal Data in electronic or other form,for the purposes of implementing, administering and managing Holder's participation in the Plan (and grants of awards madethereunder). Holder understands that these recipients may be located in or outside the European Economic Area, such as in theUnited States or elsewhere. Should the Company exercise its discretion in suspending all necessary legal obligations connectedwith the management and administration of the Plan, it will delete Personal Data as soon as it has accomplished all the necessarylegal obligations connected with the management and administration of the Plan.Holder understands that Personal Data processing related to the purposes specified above shall take place under automated ornon-automated conditions, anonymously when possible, that comply with the purposes for which Personal Data is collected andwith confidentiality and security provisions as set forth by applicable laws and regulations, with specific reference to LegislativeDecree no. 196/2003.The processing activity, including communication, the transfer of Personal Data abroad, including outside of the EuropeanEconomic Area as specified herein and pursuant to applicable laws and regulations, does not require Holder's consent thereto asthe processing is necessary to performance of contractual obligations related to implementation, administration and managementof the Plan (and grants of awards made thereunder). Holder understands that, pursuant to Section 7 of the Legislative Decree no.196/2003, Holder has the right to, including but not limited to, access, delete, update, correct or stop, for legitimate reason, thePersonal Data processing. Furthermore, Holder is aware that Personal Data will not be used for direct marketing purposes. Inaddition, Personal Data provided can be reviewed and questions or complaints can be addressed by contacting Holder's humanresources department.Plan Document Acknowledgment. In accepting the RSU, the Holder acknowledges that a copy of the Plan was made available to theHolder and that the Holder has reviewed the Plan and the Agreement, including this Appendix, in their entirety and fully understandsand accepts all provisions of the Plan, the Agreement and this Appendix. The Holder further acknowledges that he or she has read and specifically and expressly approves the following provisions in theAgreement: Vesting Schedule and Vesting Conditions and Nature of Award, as well as the following provision in the Plan: RestrictedStock/Restricted Stock Units.Additional Tax/Exchange Control Information. You are required to report in your annual tax return: (a) any transfers of cash orCommon Stock to or from Italy exceeding €10,000 or the equivalent amount in U.S. dollars; (b) any foreign investments or investments(including proceeds from the sale of Common Stock acquired under the Plan) held outside of Italy exceeding €10,000 or the equivalentamount in U.S. dollars, if the investment may give rise to taxable income in Italy; and (c) the amount of the transfers to and from abroadwhich have had an impact during the calendar year on your foreign investments or investments held outside of Italy. Under certaincircumstances, you may be exempt from requirement under (a) above if the transfer or investment is made through an authorizedbroker resident in Italy.JAPANData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold the following personal information for the purpose ofmanaging and administering the Plan ("Data"): the Holder's name, home address and telephone number, date of birth, social securitynumber or other Holder tax identification number, salary, nationality, job title, and information regarding equity compensation grants orCommon Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor. From time to time, the Companymay change the scope of its affiliates that hold, use or process Holder's personal information or the scope of Holder's personalinformation to be held, used or processed by the Company, its affiliates and the Holder's employer, by providing, or making easilyaccessible, information about such change to the Holder. The Company and its affiliates will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Theserecipients may be located in the United States, the European Economic Area, Japan or elsewhere. The Holder hereby authorizes them toreceive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering andmanaging participation in the Plan (and grants of awards made thereunder), including any requisite transfer of such Data as may berequired for the administration of the Plan (and grants of awards made thereunder) on behalf of the Holder to a third party with whomthe Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, require anynecessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing the consentmay affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.KOREAExchange Control Information. Korean residents who realize US$500,000 or more from the sale of shares of Common Stock or receiptof dividends in a single transaction are required to repatriate the proceeds to Korea within 18 months of receipt.MALAYSIAData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information from the Holder's Holderrecords, including the Holder's name, home address and telephone number, date of birth, social security number or other Holder taxidentification number, salary, nationality, job title, and information regarding equity compensation grants or Common Stock awarded,cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administering the Plan("Data"). The Company and its affiliates will transfer Data to any third parties assisting the Company in the implementation,administration and management of the Plan (and grants of awards made thereunder) and will disclose certain Data to the InlandRevenue Board and other relevant authorities as required by law. These recipients may be located in the United States, the EuropeanEconomic Area, Malaysia or elsewhere. The Holder hereby authorizes them to receive, possess, use, retain and transfer the Data, inelectronic or other form, for the purposes of implementing, administering and managing participation in the Plan (and grants of awardsmade thereunder), including any requisite transfer of such Data as may be required for the administration of the Plan (and grants ofawards made thereunder) on behalf of the Holder to a third party with whom the Holder may have elected to have payment madepursuant to the Plan. The Data will be retained by the Company, its affiliates and the Holder's employer for the entire duration of theHolder's employment or service and for a further seven years after cessation of employment or service. The holder may, at any time,review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting Zauyah Kechik (or otherauthorized individual), at Sdn. Bhd. (613545-T), Phase II, Free Industrial Zone, Bayan Lepas, 11900 Penang, Malaysia; site phone no:+60 4 888 2000.Disclosure of Data is obligatory for the implementation, administration and management of the Plan (and grants of awards madethereunder); however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefitsintended by this Agreement.Director Notification. If the Holder is a director of a subsidiary or other related company in Malaysia, then the Holder is subject tocertain notification requirements under the Malaysian Companies Act, 1965. Among these requirements is an obligation to notify theMalaysian subsidiary in writing when the Holder receives an interest (e.g., RSUs, Shares) in the Company or any related companies. Inaddition, the Holder must notify the Malaysian subsidiary when he or she sells Shares of the Company or any related company(including when the Holder sells Shares acquired under the Plan). These notifications must be made within 14 days of acquiring ordisposing of any interest in the Company or any related company.Securities Law Information. Malaysian insider-trading rules may impact the acquisition or disposal of Shares or rights to Shares underthe Plan. Under such rules, the Holder is prohibited from acquiring Shares or rights to Shares (e.g., RSUs) or selling Shares when he orshe possesses information that is not generally available and which the Holder knows or should know will have a material effect on theprice of the Shares once such information is generally available. By accepting this grant, the Holder acknowledges that he or she is notin possession of any material, non-publicly disclosed information regarding the Company at the time of grant and will not acquire orsell Shares when in possession of any material, non-publicly disclosed information regarding the Company.SINGAPORESecurities Law Information. The RSUs were granted to the Holder pursuant to the "Qualifying Person" exemption under section 273(1)(f) of the Singapore Securities and Futures Act (Chapter 289, 2006 Ed.) ("SFA"). The Agreement and the Plan have not been lodged orregistered as a prospectus with the Monetary Authority of Singapore. The Holder should note that the Holder's RSUs are subject tosection 257 of the SFA and the Holder will not be able to make any subsequent sale in Singapore, or any offer of such subsequent saleof the Shares unless such sale or offer in Singapore is made pursuant to the exemptions under Part XIII Division (1) Subdivision(4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).Director Notification. If the Holder is a director, associate director or shadow director of a subsidiary or other related company inSingapore, the Holder is subject to certain notification requirements under the Singapore Companies Act. Among these requirements isan obligation to notify the Singapore subsidiary in writing when the Holder receives an interest (e.g., RSUs, Shares) in the Company orany related company. In addition, the Holder must notify the Singapore subsidiary when the Holder sells Shares of the Company or anyrelated company (including when the Holder sells Shares acquired under the Plan). These notifications must be made within twobusiness days of acquiring or disposing of any interest in the Company or any related company. In addition, a notification must bemade of the Holder's interests in the Company or any related company within two business days of becoming a director.Insider Trading Notification. You should be aware of the Singapore insider trading rules, which may impact the acquisition or disposalof shares or rights to shares of Common Stock under the Plan. Under the Singapore insider trading rules, you are prohibited fromacquiring or selling shares of Common Stock or rights to shares of Common Stock (e.g., RSUs under the Plan) when you are inpossession of information which is not generally available and which you know or should know will have a material effect on the priceof Common Stock once such information is generally available.SWEDENNo country-specific Agreement terms apply.TAIWANExchange Control Information. You may remit foreign currency (including proceeds from the sale of Common Stock) into or out ofTaiwan up to US$5,000,000 per year without special permission. If the transaction amount is TWD500,000 or more in a singletransaction, you must submit a Foreign Exchange Transaction Form to the remitting bank and provide supporting documentation to thesatisfaction of the remitting bank.THAILANDNo country-specific Agreement terms apply.THE NETHERLANDSData Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information, including the Holder'sname, home address and telephone number, date of birth, citizen service number (burgerservicenummer) (former social securitynumber) or other Holder tax identification number (insofar as allowed), salary, nationality, job title, and information regarding equitycompensation grants or Common Stock awarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for thepurpose of managing and administering the Plan ("Data"). The Company and its affiliates will transfer Data to any third parties assistingthe Company in the implementation, administration and management of the Plan (and grants of awards made thereunder). Currently, thethird parties are E*Trade Financial Corporate Services, Inc., 4005 Windward Plaza Drive, Alpharetta, GA 30005., however theCompany may retain additional or different third parties for any of the purposes mentioned. These recipients may be located in theUnited States, the European Economic Area, or elsewhere. Countries outside the European Economic Area do not provide for a similarlevel of data protection as within the European Economic Area pursuant to the European Data Protection Directive 95/46/EC. TheHolder hereby authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes ofimplementing, administering and managing participation in the Plan (and grants of awards made thereunder), including any requisitetransfer of such Data as may be required for the administration of the Plan (and grants of awards made thereunder) on behalf of theHolder to a third party with whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at anytime, review Data, require any necessary amendments to it or withdraw the consent herein in writing by contacting the Company;however, withdrawing the consent may affect the Holder's ability to participate in the Plan and receive the benefits intended by thisAgreement. The holder understands that he or she may request a list of the names and addresses of the third party recipients of Data bycontacting the Company through its local H.R. Representative at Cypress Semiconductor GmbH, Attn: Human Resources, Willy-Brandt-Allee 4, 81829 Munich, Germany.UNITED KINGDOMEligible Individual. For the purpose of RSUs awarded in the UK, Consultants and Outside Directors are not eligible to receive awards.Tax Withholding.The following is added to the "Responsibility for Taxes" section of the Agreement.The Holder will be liable for and agrees to indemnify and keep indemnified the Company, any subsidiary and his/her employingcompany, if different, from and against any liability for or obligation to pay any Tax Liability (a "Tax Liability" being any liability forincome tax, Holder's National Insurance contributions and employer's National Insurance Contributions) that is attributable to (i) thegrant or vesting of, or any benefit derived by the Holder from, the RSUs, (ii) the acquisition by the Holder of the Common Stock on thesettlement of the RSUs, or (iii) the disposal of any Common Stock.The RSUs will not vest until the Holder has made such arrangements as the Company may require for the satisfaction of any TaxLiability that may arise in connection with the vesting or settlement of the RSUs and/or the acquisition of the Common Stock by theHolder. The Company shall not be required to issue, allot or transfer Common Stock until the Holder has satisfied this obligation.No Right to Continued Employment.This provision supplements the "Nature of Award" section of the Agreement.Neither the RSUs nor this Agreement:(i)confers upon the Holder any right to continue to be an Employee or Consultant of the Company or any of its subsidiaries orinterferes in any way with the right of the Company or any of its subsidiaries to terminate the Holder's employment at anytime; or(ii)forms part of the Holder's entitlement to remuneration and benefits in terms of his/her employment, or affects the Holder'sterms and conditions of employment.Data Privacy.This provision replaces the "Data Privacy" section of the Agreement.By acceptance of this Agreement, the Holder acknowledges and consents to the collection, use, processing and transfer of personal dataas described below. The Company, its affiliates and the Holder's employer hold certain personal information (including sensitivepersonal information) such as the Holder's name, home address and telephone number, date of birth, social security number or otherHolder tax identification number, salary, nationality, job title, and information regarding equity compensation grants or Common Stockawarded, cancelled, purchased, vested, unvested or outstanding in the Holder's favor, for the purpose of managing and administeringthe Plan ("Data"). By participating in the Plan, the Holder agrees that the Company, its affiliates and the Holder's employer may holdand process such Data, and may transfer Data to any third parties assisting the Company or its affiliates in the implementation,administration and management of the Plan (and grants of awards made thereunder). These recipients may be located in the UnitedStates, the European Economic Area, or elsewhere. The Holder hereby authorizes them to receive, possess, process, use, hold, retainand transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing participation in thePlan (and grants of awards made thereunder) and in the course of the Company's business, including any requisite transfer of such Dataas may be required for the administration of the Plan (and grants of awards made thereunder) on behalf of the Holder to a third partywith whom the Holder may have elected to have payment made pursuant to the Plan. The Holder may, at any time, review Data, requireany necessary amendments to it or withdraw the consent herein in writing by contacting the Company; however, withdrawing theconsent may affect the Holder's ability to participate in the Plan and receive the benefits intended by this Agreement.Manner of Payment. This provision supplements Section 5 of the Agreement:Notwithstanding any discretion in the Plan or this Agreement to the contrary, upon vesting of the RSUs, the Award will be settled inShares. In no event will the Award be settled in the form of cash.Joint Election. As a condition of the grant of RSUs, the Holder agrees to accept any liability for secondary Class 1 National Insurancecontributions (the "Employer NICs") which may be payable by the Company or the Employer with respect to the vesting of the RSUs orotherwise payable with respect to a benefit derived in connection with the RSUs.Without limitation to the foregoing, if requested by the Company, the Holder agrees to execute a joint election between the Companyand/or the Employer and Holder (the "Joint Election"), the form of such Joint Election being formally approved by Her Majesty'sRevenue & Customs ("HMRC"), and any other consent or election required to accomplish the transfer of the Employer NICs to theHolder. The Holder further agrees to execute such other joint elections as may be required between the Holder and any successor to theCompany and/or the Employer. If the Holder does not enter into a Joint Election in response to a Company request, no Shares shall beissued to the Holder (and neither the Company nor the Employer shall have any liability with respect to such non-issuance of shares).The Holder further agrees that the Company and/or the Employer may collect the Employer NICs from the Holder by any means.If the Holder has signed a Joint Election in the past with respect to an RSU award granted to him or her by the Company and that JointElection applies to all grants made under the Plan, the Holder need not sign another Joint Election in connection with this RSU grant.Responsibility for Taxes. This provision supplements the Agreement:You agree that, if you do not pay or the Employer or the Company does not withhold from you the full amount of Tax-Related Itemsthat you owe at vesting and settlement of the RSUs, or the release or assignment of the RSUs for consideration, or the receipt of anyother benefit in connection with the RSUs (the "Taxable Event") within 90 days after the Taxable Event, or such other period specifiedin Section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003, then the amount of income tax that should have beenwithheld shall constitute a loan owed by you to the Employer, effective 90 days after the Taxable Event. You agree that the loan willbear interest at the HMRC official rate and will be immediately due and repayable by you, and the Company and/or the Employer mayrecover it at any time thereafter by withholding the funds from salary, bonus or any other funds due to you by the Employer, bywithholding in shares of Common Stock issued upon vesting of your RSUs or from the cash proceeds from the sale of shares ofCommon Stock or by demanding cash or a cheque from you. You also authorize the Company to delay the issuance of any shares ofCommon Stock unless and until the loan is repaid in full.Notwithstanding the foregoing, if you are a director or executive officer (as within the meaning of Section 13(k) of the U.S. SecuritiesExchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that you are such adirector or executive officer and the income tax that is due is not collected from or paid by you within 90 days of the Taxable Event, theamount of any uncollected income tax may constitute a benefit to you on which additional income tax and national insurancecontributions may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directlyto the HMRC under the self-assessment regime and for reimbursing the Company or the Employer (as appropriate) for the value of anyHolder national insurance contributions due on this additional benefit.3Exhibit 10.7.1CYPRESS NON-QUALIFIEDDEFERRED COMPENSATION PLAN IDocument No. 001-92196 Rev. *B 1TABLE OF CONTENTS PageARTICLE I PLAN I ADMINISTRATION 6ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATION 7ARTICLE III PLAN I CONTRIBUTIONS AND ALLOCATIONS 8ARTICLE IV VESTING 10ARTICLE V GENERAL DUTIES 11ARTICLE VI PARTICIPANTS’ ACCOUNTS 12ARTICLE VII PAYMENTS TO A PLAN I PARTICIPANT OR BENEFICIARY 13ARTICLE VIII CHANGE OF CONTROL 20ARTICLE IX TERMINATION DUE TO CORPORATE DISSOLUTION OR PURSUANT TOBANKRUPTCY COURT APPROVAL 21ARTICLE X UNFORESEEABLE EMERGENCY DISTRIBUTIONS 22ARTICLE XI CLAIMS PROCEDURE 25ARTICLE XII MISCELLANEOUS 27Document No. 001-92196 Rev. *B 2CYPRESS NON-QUALIFIED DEFERRED COMPENSATION PLAN IThe Cypress Semiconductor Corporation Nonqualified Deferred Compensation Plan, originally effective as of September 1,1995, and thereafter amended, was further amended and restated in its entirety by Cypress Semiconductor Corporation (the“Company”), effective as of January 1, 2002 on behalf of itself and any designated subsidiaries and was renamed the Cypress Non-Qualified Deferred Compensation Plan II (“Plan II”). Also on January 1, 2002, the Cypress Non-Qualified Deferred CompensationPlan I (“Plan I” or “Plan”) was adopted by the Company. Plan I is similar to Plan II except that (i) the phantom investments aredifferent than those available under Plan II, and (ii) beneficiaries of Plan I participants who die in certain situations will receive asupplemental survivor benefit. Plan I and Plan II were amended effective April 1, 2004 to permit outside directors who are alsoconsultants to participate in the Plans. Plan I and Plan II were frozen to new deferrals as of December 31, 2004 so as to qualify theseprior plans for “grandfather” treatment under Internal Revenue Code Section 409A and were renamed Pre-2005 Plan I and Pre-2005Plan II.To comply with Internal Revenue Code Section 409A, the Company established Plan I and Plan II, covering deferrals made onand after January 1, 2005. Plan I is similar to Plan II except that (i) the phantom investments are different than those available underPlan II, and (ii) beneficiaries of Plan I participants who die in certain situations will receive a supplemental survivor benefit.•Plan I and Plan II were amended effective June 15, 2005 to allow the Committee, in its discretion, to permitParticipants to cancel or reduce Deferral Elections in 2005 with respect to amounts deferred (or to be deferred) on orafter January 1, 2005 through December 31, 2005.•Plans I and II were further amended effective January 1, 2006 to clarify that the definition of Compensation excludesany severance payments.•Plans I and II were further amended in December, 2008 to comply with the final Treasury Regulations under InternalRevenue Code Section 409A.•Plans I and II were further amended in January, 2009 to make clear that Cypress phantom stock is a permitted phantominvestment.•Plans 1 and II were further amended effective January 1, 2016 to update plan eligibility. Plan I was also amended tofreeze the supplemental survivor benefit to two times the total amount deferred into Plan I through December 31, 2015.•Plan 1 was further amended on June 30, 2017 to exclude Cypress phantom stock as a permitted phantom investment.•Effective January 1, 2018, Plan I and Plan II were then amended to designate eligibility for participation in the plans asNon-Sales employees with an annual salary equal to or greater than $200,000, or Sales employees with a total cashtargetDocument No. 001-92196 Rev. *B 3greater than or equal to $200,000, as well as any other employee or category of employee that is approved by the CEOas eligible to participate in Plan I, and (iii) non-employee members of the Board of Directors who are also paidconsultants to the Company. Plan I and Plan II were also amended to allow a maximum deferral of 90% of anemployee’s quarterly bonus amount.Throughout, the term “Company” shall include wherever relevant any entity that is directly or indirectly controlled by theCompany or any entity in which the Company has a significant equity or investment interest, or any subsidiary of the Company, asdetermined by the Company.The purpose of Plan I is to provide supplemental retirement income and to permit eligible Participants the option to defer receiptof compensation, pursuant to the terms of the Plan. Plan I is intended to be an unfunded deferred compensation plan maintained for thebenefit of a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and 401(a)(1) of ERISAand is intended to comply with Section 409A of the Internal Revenue Code. Participants shall have the status of unsecured creditors ofthe Company with respect to the payment of Plan benefits.Document No. 001-92196 Rev. *B 4RECITALS:1. The Company maintains Plan I for the benefit of a select group of management or highly compensated employeesdesignated by the Company.2. Under Plan I, the Company is obligated to pay vested accrued benefits, and in certain circumstances, a supplementalsurvivor benefit, to Plan I Participants and their beneficiary or beneficiaries (“Plan I Beneficiaries”) from the Company’s general assets.3. The Company has entered into an agreement (the “Trust Agreement”) with American Stock Transfer and Trust Company(the “Trustees”) under an irrevocable trust (the “Trust”) to be used in connection with Plan I.4. The Company intends to make contributions to the Trust so that such contributions will be held by the Trustees andinvested, reinvested and distributed, all in accordance with the provisions of this Plan I and the Trust Agreement.5. The Company intends that the assets of the Trust shall at all times be subject to the claims of the general creditors of theCompany as provided in the Trust Agreement.6. The Company intends that the existence of the Trust shall not alter the characterization of Plan I as “unfunded” forpurposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall not be construed to provideincome to Plan I Beneficiaries prior to actual payment of the vested accrued benefits thereunder.NOW THEREFORE, the Company does hereby establish Plan I as follows and does also hereby agree that Plan I shall bestructured, held and disposed of as follows:Document No. 001-92196 Rev. *B 5ARTICLE I PLAN I ADMINISTRATIONThe Deferred Compensation Committee of the Company (the “Committee”) administers Plan I. Subject to the specific dutiesdelegated by the Compensation Committee, the Committee shall be responsible for the general administration and interpretation of PlanI and for carrying out its provisions. The Committee shall have such powers as may be necessary to discharge its duties hereunder,including, but not by way of limitation, the following powers and duties:(1) discretionary authority to construe and interpret the terms of Plan I, and to determine eligibility and the amount,manner and time of payment of any benefits hereunder;(2) to prescribe forms and procedures for purposes of Plan I participation and distribution of benefits;(3) to direct the Trustees as to the distribution of Plan I assets; and(4) to take such other action as may be necessary and appropriate for the proper administration of Plan I.The Committee may adopt such rules, regulations and bylaws and may make such decisions as it deems necessary or desirablefor the proper administration of Plan I. Any rule or decision that is not inconsistent with the provisions of Plan I shall be conclusiveand binding upon all persons affected by it, and there shall be no appeal from any ruling by the Committee that is within its authority,except as otherwise provided herein. The Committee shall have the power to (i) identify investment choices for the Trust; and(ii) appoint or employ agents, recordkeepers and advisors to assist the Committee in discharging its duties under Plan I.ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATIONEligible ParticipantsThe following categories of service providers (“Eligible Participants”) shall be eligible to participate in Plan I: (i) Non-Salesemployees with an annual salary equal to or greater than $200,000, or Sales employees with a total cash target greater than or equal to$200,000, (ii) any other employee or category of employee that is approved by the CEO as eligible to participate in Plan I, and (iii)non-employee members of the Board of Directors who are also paid consultants to the Company. The Committee reserves the right tomodify the definition of Eligible Participant at any time with the approval of the CEO. Any Eligible Participant who has commencedparticipation in Plan I shall be referred to in this Plan I as a “Participant.”ParticipationEach Eligible Participant may elect to commence participation in Plan I by completing a Cypress Non-Qualified DeferredCompensation Plan I participation agreement and Deferral ElectionDocument No. 001-92196 Rev. *B 6no later than the last day of his or her Election Period. For purposes of the foregoing, an Eligible Participant’s Election Period shall bedefined as: (i) for newly Eligible Participants who are eligible for the first time, the thirty (30) day period measured from the date uponwhich the Eligible Participant becomes eligible to participate in Plan I and any other non-qualified deferred Compensation plansrequired to be aggregated with Plan I under Section 409A; and (ii) for all other Eligible Participants (including Eligible Participantswho formerly were Eligible Participants), no later than the due date for the irrevocable enrollment forms during the annual OpenEnrollment period which is generally from December 1st to December 31st of each year (the “Annual Open Enrollment Period”) priorto the beginning of the Plan Year for which the election is effective (the calendar year is the “Plan Year”). Elections shall remain ineffect for successive Plan years unless modified or revoked (with respect to future Plan Years only) in a subsequent annual OpenEnrollment period.Beneficiary DesignationEach Participant, prior to entering Plan I, may designate a beneficiary orbeneficiaries to receive the remainder of any interest of the Participant and any supplemental survivor benefitunder Plan I in the event of the Participant’s death. A Participant may change his or her beneficiary designation atany time by submitting a complete and approved form of beneficiary designation (including dated spousalconsent, if required pursuant to the beneficiary designation form) to the Committee (or its designee). Eachbeneficiary designation shall be in a form prescribed by the Committee and will be effective only when filed withthe Committee (or its designee) during the Participant’s lifetime. Each beneficiary designation filed with theCommittee will cancel all previously filed beneficiary designations. In the absence of a valid designation, or if nodesignated beneficiary survives the Participant, the Participant’s interest shall be distributed to the Participant’sestate.ARTICLE III PLAN I CONTRIBUTIONS AND ALLOCATIONSParticipant Deferrals. Each Participant participating in Plan I shall, no later than the end of the applicable Enrollment Period,execute a participation agreement and Deferral Election authorizing the Company to withhold a percentage amount of the Participant’sCompensation which would otherwise be paid to the Participant with respect to services rendered. Compensation under Plan I isdefined as annual base salary (or, for non-employee directors, cash consulting fees, including Cypress Incentive Plan (CIP) orManufacturing Incentive Plan (MIP) bonuses), cash bonuses (including CIP or MIP bonuses, new product bonuses and any other cashbonuses), and any cash Sales Commissions payable to the Participant in connection with the Participant’s services to the Company;provided however, that Compensation does not include severance payments (“Compensation”). The Committee may, in its discretion,establish in the Deferral Election minimum and maximum levels of Compensation that may be deferred pursuant to Plan I. EffectiveJanuary 1, 2018, the maximum deferral for quarterly bonus payments is 90%. Compensation deferrals made by a Participant under thisPlan I shall be held as an asset of the Company and the Company intends to deposit the amounts deferred into the Trust.Document No. 001-92196 Rev. *B 7Sales Commissions and Bonuses Payable in a Subsequent Year. If cash bonuses (including new product bonuses and any othercash bonuses) or cash Sales Commissions are earned in one calendar year and would normally be paid in the first quarter of theensuing calendar year, they shall be deferred and distributed based upon the election made by the Participant in the Open Enrollmentperiod in the year prior to the year in which it was earned. For newly Eligible Participants, any such cash bonus or Sales Commissionshall be deferred and distributed based upon their initial election made with respect to the year in which it was earned; provided,however, that such election may apply to no more than the total amount of such Compensation multiplied by the ratio of the number ofdays remaining in the applicable performance period after such election becomes irrevocable over the total number of days in theapplicable performance period.Year-End Cross-Over Payroll Periods. Pay days relating to periods of service that cross over the calendar year-end shall becovered by the Participant’s Deferral Election in effect for the later year, consistently with the default rules under Treasury Regulation§1.409A-2(a)(13).Election ChangesA Participant may, in such form and at such time or times as the Committee may prescribe, discontinue or modify the deferralof his or her Compensation with respect to Plan Years that have not yet commenced. The Committee has the power to establishuniform and nondiscriminatory rules and from time to time to modify or change such rules governing the manner and method by whichCompensation Deferral Elections shall be made, as well as the manner and method by which Compensation Deferral Elections withrespect to Plan Years that have not yet commenced may be changed or discontinued temporarily or permanently. All Compensationdeferral contributions shall be authorized by the Participant in writing or electronically, made by payroll deduction, deducted from theParticipant’s Compensation without reduction for any taxes or withholding (except to the extent required by law or regulation) andpaid over to the Trust by the Company. Notwithstanding the foregoing, each Participant shall remain liable for any and all employmenttaxes owing with respect to such Participant’s Compensation deferral contributions.Limitation on Deferral Changes. The dollar amount of any Plan deferrals shall not be reduced or increased during any PlanYear by virtue of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefitplan, including the Company’s Employee Stock Purchase Plan, except as permitted by Code Section 409A with respect to changes inDeferral Elections under the Company’s 401(k) Employee Savings Plan and Code Section 125 flexible benefits plan (or as otherwisepermitted under Code Section 409A).Cessation of Eligible Status. In the event a Participant ceases to be an Eligible Participant while also a participant in Plan I, ifsuch individual has not undergone a Separation From Service, he or she must continue to make Compensation deferral contributionsunder Plan I through the end of the Plan Year in which the individual ceases to be an Eligible Participant. Thereafter, such individualshall not make any further Compensation deferral contributions to Plan I unless or until he or she again meets the eligibilityrequirements of Article II above.Company Discretionary Contributions. The Company may, in its sole discretion, make discretionary contributions to theaccounts of one or more Participants at such times and in suchDocument No. 001-92196 Rev. *B 8amounts as the Board of the Company shall determine, subject to such vesting and distribution conditions and limitations as theCompany, in its sole discretion, shall impose. To the extent such Company contributions do not vest, corresponding debits will bemade to a Participant's Account, including any earnings on such forfeited amounts.Allocations. The Compensation deferral contributions and any Company contributions made under Plan I on behalf of aParticipant shall be credited to the Participant’s Account. The Committee shall establish and maintain separate subaccounts as itdetermines to be necessary and appropriate for the proper administration of Plan I. The Committee may cause the Trustees to maintainand invest separate asset accounts corresponding to each Participant account. Each Participant Account consists of the aggregateinterest of the Participant under Plan I (and in the Trust), as reflected in the records maintained by the Company for such purposes.Plan to Plan Transfers. Subject to the Committee’s discretion, Participants shall be allowed to elect to transfer their deemedinvestment accounts from Plan II to Plan I or from Plan I to Plan II, subject to such limitations and reallocation requirements as theCommittee, in its sole discretion, determines to be appropriate; provided, however, that any such plan to plan transfers shall not changethe time and method of distribution of the amounts transferred. The plan to plan transfers shall be effective as of the date specified bythe Committee.Cancellation of Elections Due to 401(k) Hardship Withdrawal, Unforeseeable Emergency Distribution, or Disability(1) 401(k) Hardship Withdrawal. A Participant’s Deferral Election shall be automatically cancelled in the event theParticipant obtains a hardship distribution from the Company’s 401(k) Plan pursuant to Treasury Regulation §1.401(k)-1(d)(3). TheParticipant, if still an Eligible Participant, may re-enroll in Plan I during the next Open Enrollment period.(2) Unforeseeable Emergency Distribution. A Participant’s Deferral Election shall be automatically cancelled in theevent the Participant obtains an unforeseeable emergency distribution from Plan I or Plan II. The Participant, if still an EligibleParticipant, may re-enroll in Plan I during the next Open Enrollment period.ARTICLE IV VESTINGA. Compensation Deferral Contributions. The value of a Participant’s Account attributable to Participants’ Compensationdeferral contributions shall always be fully vested and nonforfeitable.B. Company ContributionsThe value of a Participant’s Account attributable to any Company contributions pursuant to Article III.D shall vest at such timeor times as the Committee may specify in connection with any such contributions. In the absence of Committee specification, aParticipant’s interest in Company contributions shall be fully vested and nonforfeitable. Upon a Participant’s Separation From Servicefor any reason, any portion of the Participant’s Account that is not then vested (including allocableDocument No. 001-92196 Rev. *B 9earnings, as determined by the Committee), shall be forfeited. Unless otherwise determined by the Board or the Committee, forfeituresshall be used to satisfy the Company’s obligation to remit contributions to the Trust under Plan I.Document No. 001-92196 Rev. *B 10ARTICLE V GENERAL DUTIESCommittee Duties. The Committee will provide the Trustees with a copy of any future amendment to this Plan I promptlyupon its adoption. The Committee may from time to time hire outside consultants, accountants, actuaries, legal counsel orrecordkeepers to perform such tasks as the Committee may from time to time determine.Trustees’ Duties. The Trustees shall invest and reinvest the Trust as provided in the Trust Agreement. The Trustees shallcollect the income on the Trust, and make distributions therefrom, as provided in this Plan I and in the Trust Agreement.Company Contributions. While Plan I remains in effect, and prior to a Change of Control Event, the Company shall makecontributions to the Trust at least once each quarter. The amount of any quarterly contributions shall be at the discretion of theCompany. At the close of each calendar year, the Company shall make an additional contribution to the Trust to the extent thatprevious contributions to the Trust for the current calendar year are not equal to the total of the Compensation deferrals made by eachParticipant plus Company discretionary contributions, if any, accrued, as of the close of the current calendar year. The Trustees shallnot be liable for any failure by the Company to provide contributions sufficient to pay all accrued benefits under Plan I in full inaccordance with the terms of Plan I.Department of Labor Determination. In the event that any Participants are found to be ineligible, that is, not members of aselect group of management or highly compensated employees, according to a determination made by the Department of Labor, theCommittee will take whatever steps it deems necessary, in its sole discretion, to equitably protect the interests of the affectedParticipants.ARTICLE VI PARTICIPANTS’ ACCOUNTSSeparate Accounts. The Committee shall open and maintain a separate Account for each Participant. EachParticipant’s Account shall reflect the amounts allocated thereto and distributed therefrom and such other information as affects thevalue of such Account pursuant to this Plan I.Timing of Account Credit. Amounts deferred under Plan I shall be credited to a Participant’s Account within five businessdays following the date upon which such amounts would otherwise have been paid to the Participant.Statement of Accounts. As soon as practicable after the end of each calendar year the Committee shall furnish to eachParticipant a statement of Account, determined as of the end of such calendar year. Upon the discovery of any error ormiscalculation in an Account, the Committee shall correct it, to the extent correction is practically feasible and permissibleunder Code Section 409A; provided, however, that any such statement of Account shall beDocument No. 001-92196 Rev. *B 11considered to reflect accurately the status of the Participant’s Account for all purposes under Plan I unless the Participantreports a discrepancy to the Committee within six (6) months after receipt of the statement. The Committee shall have noobligation to make adjustments to a Participant’s Account for any discrepancy reported to the Committee more than six (6)months after receipt of the statement, or for a discrepancy caused by the Participant’s error. Statements to Participants are forreporting purposes only, and no allocation, valuation or statement shall vest any right or title in any part of the Trust, nor requireany segregation of Trust assets, except as is specifically provided in this Plan I.Distribution of Accounts. Payment to a Participant shall be based on the value of the vested portion of theParticipant’s Account as of the Valuation Date immediately preceding the date of distribution plus any contribution subsequentlycredited to such Account and less any distributions subsequently made from the Account.ARTICLE VII PAYMENTS TO A PLAN I PARTICIPANT OR BENEFICIARYA. General. Payments of vested accrued benefits to Plan I Beneficiaries from the Trust shall generally be made in accordancewith the distribution event specified by the Participant in the Deferral Election between the Company and the Participant (the“Distribution Event”). Except as otherwise expressly provided in the Participant’s Deferral Election and as set forth in Article VIIbelow, no distribution shall be made or commenced prior to the time and manner as set forth in the Participant’s Deferral Election.B. Installment Payments Treated as Single Payments. All installment payments under the Plan are considered a singlepayment for purposes of complying with Code Section 409A.C. Earliest Distributions.(i) Regular Participants. Except as permitted by the Plan and Code Section 409A in connection with a Change ofControl Event, a Corporate Dissolution, pursuant to a Bankruptcy Court Approval, a conflicts of interest or ethics rules distributionunder Article 7.T., a FICA and related income tax distribution under Article 7.U., a state, local or foreign tax distribution under Article7.V., or a Code Section 409A Distribution under Article 7.W., in no event may the account of a Participant who is not a SpecifiedEmployee be distributed earlier than (i) the Participant’s Separation From Service, (ii) the Participant’s Disability, (iii) the Participant’sdeath, (iv) a specified time under Article 7.J. hereunder, (v) a Change of Control Event, (vi) the occurrence of an UnforeseeableEmergency, or (vii) to an individual other than the Participant pursuant to a Domestic Relations Order.(ii) Specified Employee Participants. Except as permitted by the Plan and Code Section 409A in connection witha Change of Control Event, a Corporate Dissolution, pursuant to a Bankruptcy Court Approval, a conflicts of interest or ethics rulesdistribution under Article 7.T., a FICA and related income tax distribution under Article 7.U., a state, local or foreign tax distributionunder Article 7.V., or a Code Section 409A Distribution under Article 7.W., in no event may a Specified Employee’s account bedistributed earlier than (i) six (6) months following the SpecifiedDocument No. 001-92196 Rev. *B 12Employee’s Separation From Service (or if earlier, the Specified Employee’s death), (ii) six (6) months following the SpecifiedEmployee’s Disability, (iii) the Specified Employee’s death, (iv) a specified time under Article 7.J. hereunder, (v) a Change of ControlEvent, (vi) the occurrence of an Unforeseeable Emergency, or (vii) to an individual other than the Participant pursuant to a DomesticRelations Order. In the event a Specified Employee’s Plan distributions are delayed due to the six-month delay requirement, theamounts otherwise payable to the Specified Employee during such period of delay shall be paid on a date that is at least six months andone day following Separation From Service, but no later than the end of the calendar year in which such six month and one day periodends (or, if earlier, upon the death of the Specified Employee). The Participant’s other scheduled distributions, if any, shall not beaffected by the period of delay.D. Small Account Lump-Sum Distribution. If, on the date of a Participant’s Separation From Service, their Accounts underPre-2005 Plan I, Pre-2005 Plan II, Plan I, Plan II and any other non-qualified deferred Compensation plans required to be aggregatedwith such plans pursuant to Treasury Regulation §1.409A-1(c)(2) total, in the aggregate, less than the then applicable limit underInternal Revenue Code Section 402(g)(1)(B) (e.g., $18,000 in 2017, then all Accounts under all such plans, including Participant’sAccount under this Plan I, shall be distributed in a lump-sum in the month following such Participant’s Separation From Service, or, ifthe Participant is a Specified Employee, in the seventh month following such Participant’s Separation From Service; provided,however, that in the event such Accounts increase in value so that their aggregate value exceeds the then applicable limit under InternalRevenue Code Section 402(g)(1)(B) on the scheduled payment date, such Accounts shall instead be paid in accordance with the Planand the Participant’s Deferral Elections.Document No. 001-92196 Rev. *B 13E. Upon Retirement – Plan Year 2005 Through 2008 Deferrals. With respect to amounts deferred in Plan Years 2005through 2008, if a Participant has a Separation From Service pursuant to Participant’s retirement at age 55 or greater but with at leastten full years of continuous employment, or for outside director Participants, age 55 or greater and ten full years of continuous serviceas a Board member (either case shall be referred to in this Plan I as “Retirement”), then Participant shall receive, pursuant to theelection selected in his or her timely submitted Deferral Election(s) a distribution of his or her Account balance in (i) a lump-sum, (ii) apartial lump-sum combined with up to fifteen years of annual payments, or (iii) two to fifteen years of annual payments, each suchpayment equal to 1/n of the Participant’s vested accrued benefit where n is the number of installments remaining to be paid, (an“Annual Payment”); provided, however, that to the extent a Participant is permitted to and makes differing distribution elections foramounts deferred in different Plan Years, then the deferrals for each Plan Year (including earnings and losses thereon) shall bedistributed in one of the three permitted methods in accordance with such Deferral Elections.F. Upon Death – Plan Year 2005 Through 2008 Deferrals. With respect to amounts deferred in Plan Years 2005 through2008, if a Participant dies, then the Participant’s beneficiary will receive their remaining Account balance in either a lump-sum or infive Annual Payments, as specified in the Participant’s Deferral Election; provided, however, that to the extent a Participant ispermitted to and makes differing distribution elections for amounts deferred in different Plan Years, then the deferrals for each PlanYear (including earnings and losses thereon) shall be distributed in one of the two permitted methods in accordance with such DeferralElections.Non-Retirement Separations From Service – Plan Year 2005 Through 2008 Deferrals. With respect to amountsdeferred in Plan Years 2005 through 2008, in the event a Participant has a Separation From Service that does not qualify asa Retirement, then his or her Account balance shall be distributed in a lump-sum within 60 days following such SeparationFrom Service.All Separations From Service and Death – Plan Year 2009 and Later Deferrals. With respect to amounts deferred inPlan Years 2009 and later, if a Participant dies or undergoes any Separation From Service, then Participant shall receive,pursuant to the election selected in his or her timely submitted Deferral Election(s) a distribution of his or her Accountbalance in (i) a lump-sum, (ii) a partial lump-sum combined with up to fifteen years of annual payments, or (iii) two tofifteen years of Annual Payments; provided, however, that to the extent a Participant is permitted to and makes differingdistribution elections for amounts deferred in different Plan Years, then the deferrals for each Plan Year (including earningsand losses thereon) shall be distributed in one of the three permitted methods in accordance with such Deferral Elections.Scheduled In-Service Distribution. A Participant may elect, as provided in his or her Participant Deferral Election,to receive one or more scheduled in-service (i.e., prior to a Separation From Service) distributions from their Accountbalance without an early withdrawal penalty. Any such distributions must be at least two full Plan Years following the dateof the Participant’s Deferral Election. Each scheduled in-service distribution may be postponed (but only once) inaccordance with Article 7.O. If a Participant specifies that a dollar amount will be distributed and the Account balance isless than the dollar amount, then the entire Account will be distributed. A Participant may neitherDocument No. 001-92196 Rev. *B 14increase nor decrease the amount or percentage specified for an in-service distribution once their initial election is made. Inthe event a Participant undergoes a Separation From Service prior to a scheduled in-service distribution, the in-servicedistribution election shall be without further force and effect and the applicable Separation From Service distributionprovisions of Plan I and the Participant’s Deferral Election shall control.Supplemental Survivor Benefit. If a Participant dies prior to undergoing a Separation From Service, then, inaddition to the Account distributions relating to his or her Deferral Elections, his or her beneficiary shall receive a taxablesurvivor benefit equal to two times the total amount deferred into Plan I through December 31, 2015, including certainamounts deferred under Plan II that were transferred to Plan I (as described below), and excluding certain distributions (asdescribed below) and amounts transferred from Plan I to Plan II, up to a maximum benefit of three million dollars($3,000,000), including any supplemental survivor benefit under Pre-2005 Plan I governing deferrals prior to January 1,2005. For the purpose of determining the amount of the supplemental survivor benefit, earnings or losses on deferrals arenot included. Any Plan I distributions prior to death and any Plan I to Plan II transfers not subsequently re-transferred backto Plan I shall reduce the Plan I deferral balance by a pro rata amount, calculated as of the distribution Valuation Date. AnyPlan II transfers to Plan I shall carry a pro rata credit for Plan II deferrals. With respect to Plan II to Plan I transfers thatresult in a supplemental survivor benefit payout (except for Plan II to Plan I transfers of amounts originally deferred to PlanI and subsequently transferred to Plan II), such supplemental survivor payout will be made simultaneously with the lastpayout scheduled to be made pursuant to the Deferral Elections in force with respect to the amount transferred from Plan IIto Plan I. Otherwise, the supplemental survivor benefit will be paid out in a full lump-sum payment in the year in which theParticipant dies, except if the Participant dies in December, in which case the supplemental survivor benefit will be paid inthe following calendar year.Example I: Participant A defers $1,750,000 to Plan I. This appreciates to $2,000,000. Participant A then dies prior to aSeparation From Service. Because the Supplemental Survivor Benefit is capped at $3,000,000, her beneficiary receives a $3,000,000Supplemental Survivor Benefit.Example II: Participant A defers $100,000 into Plan II. This appreciates to $130,000, at which time it is transferred to Plan I.Participant A then defers $25,000 into Plan I. Subsequently, Participant A’s Plan I total account value declines to $80,000 based uponher phantom investments diminishing in value. Participant A dies while on a Company-approved leave of absence that is not aSeparation From Service. Due to Participant A’s $100,000 Plan II transfer deferral credit, and her $25,000 deferral credit under Plan I,her beneficiary receives a $250,000 Supplemental Survivor Benefit.Example III: Participant A defers $100,000 into Plan II. This depreciates to $65,000, at which time it is transferred to Plan I.Participant A then defers $25,000 into Plan I. Subsequently, Participant A’s Plan I total account value declines to $40,000 based uponher phantom investments diminishing in value. Participant dies while on a Company-approved leave of absence that is not aDocument No. 001-92196 Rev. *B 15Separation From Service. Due to Participant A’s $100,000 Plan II transfer deferral credit, and her $25,000 deferral credit under Plan I,her beneficiary receives a $250,000 Supplemental Survivor Benefit.Example IV: Participant B has deferred $150,000 into Plan II. The Plan II account appreciates to $250,000, at which time$125,000 is transferred to Plan I. Participant B thereafter defers $30,000 to Plan I. The Plan I account subsequently appreciates to$235,000, at which time Participant B receives a scheduled $110,000 in-service distribution from Plan I. Subsequently Participant B’sPlan I account appreciates to $150,000, at which time Participant B dies prior to any Separation From Service.•The Plan II transfer deferral credit equals $75,000, because the total deferrals under Plan II at the time of distributionwere $150,000, and because the transfer of 50% of the Plan II balance results in a pro rata 50% transfer of the Plan IIdeferral credit.•The Total Plan I deferrals equal $30,000.•At the time of the distribution, the total Plan I deferral credit is $105,000 = Plan II transfer credit of $75,000 plus Plan Ideferrals of $30,000.•The $110,000 Plan I distribution results in a pro rata reduction in the Plan I deferral credit. The $110,000 distribution isdivided by the then Total Plan I account value of $235,000 resulting in .468. Because distributions result in a pro ratareduction of deferral credit, .468 is multiplied by the total Plan I deferral credit of $105,000 = $49,140. This amount isreduced from the Total Plan I deferral credit ($105,000 - $49,140) resulting in a post-distribution Total Plan I deferralcredit of $55,860.•Upon Participant B’s death, his beneficiary receives a Supplemental Survivor Benefit equal to 2 x $55,860 = $111,720.Example V: Participant C defers $1,400,000 to Plan I. Participant C has a Separation From Service. Shortly thereafter,Participant C dies. Because on her date of death Participant C had already undergone a Separation From Service, her beneficiary doesnot receive a Supplemental Survivor Benefit.Example VI: In 2009, Participant D defers $100,000 to Plan II and elects to receive payments upon death in five annualinstallments. In 2010, Participant D defers $50,000 to Plan II and elects to receive payments upon death in ten annual installments. ThePlan II account remains at a value of $150,000. In 2011, Participant transfers the entire $150,000 Plan II account to Plan I. In 2012,Participant D dies prior to his Separation From Service, earning a $300,000 Supplemental Survivor Benefit. The 2009 deferrals,including earnings and losses, are paid out ratably over five years. The 2010 deferrals, including earnings and losses, are paid outratably over ten years. Because it results from a Plan II to Plan I transfer, the Supplemental Survivor Benefit of $300,000 (it is notsubject to earnings or losses or interest) is paid out simultaneously with the tenth installment of the 2010 deferrals.Document No. 001-92196 Rev. *B 16G. Method of Distribution. Except as specified otherwise in this Article 7, payment to any Plan I Beneficiary shall bemade (i) in accordance with the Deferral Election executed by the Participant, (ii) in cash, (iii) in a lump-sum, or (iv) in annualpayments.H. Lump-Sum Distribution Timing. For Participants receiving a lump-sum distribution (other than a small account lump-sum distribution under Article 7.D. hereof, which shall be paid in accordance with that subsection) the value of their Account (orportion thereof specified in the Participant’s election) shall be paid in a lump-sum cash payment no later than the end of the year inwhich their Separation From Service occurs (or if their Separation From Service occurs in December of any year, no earlier thanJanuary 1 of the following year and no later than December 31 of such following year), or, for Specified Employees (or their estates orbeneficiaries), at least six months and one day after the date upon which they incur a Separation From Service, but no later than the endof the calendar year in which such six month and one day period ends or, if earlier, upon their death.I. Installment Distribution Timing. Installment payments shall commence no later than the end of the year following thetriggering distribution event (except if the triggering event is a Separation From Service or death occurring in December, in which casethe payments shall commence in the following year), or, for Specified Employees undergoing a Separation From Service triggeringevent, as soon as is practicable at least six months and one day after the date upon which they incur a Separation From Service, but nolater than the end of the calendar year in which such six month and one day period ends. However, in no event may installmentpayments be made over a period exceeding fourteen years following the first installment, even if the payments are postponed pursuantto an election made under Article 7.O. hereof.J. Subsequent Election to Delay or Change Form of Payment.(1) A Participant’s election to receive a retirement, Disability or in‑service distribution may be delayed or the form ofpayment changed by filing an election, in the form required by the Committee, at least one year in advance of the date upon which anydistribution would otherwise have been made pursuant to the prior election. Such election shall not be effective for a period of one (1)year, and must delay the initial payment by a period of at least five (5) years, but may not result in the initial payment occurring morethan then ten (10) years following Retirement or Disability. In the absence of such timely filed election, the value of such Participant’sAccount shall be distributed in accordance with their previously timely filed Account election.(2) Because Plan installment payments are considered a single payment for purposes of Code Section 409A. Asubsequent election may accelerate the method of distribution. For example, if a Participant initially elected to receive retirement orDisability payments in five annual installments following Participant’s Separation From Service, Participant could make a timelyelection to instead take a lump-sum distribution five years following Participant’s Separation From Service. Moreover, a subsequentelection may change a lump-sum distribution to an installment election, so long as, in either case, the initial payment is delayed for aperiod of at least five (5) years, the election is not effective for one (1) year and is made at least one (1) year in advance of the dateupon which the first distribution would have otherwise been made.Document No. 001-92196 Rev. *B 17(3) Because installment payments are treated as a single payment, any subsequent election must apply to all of theinstallment payments. For example, if a Participant initially elected to receive retirement or Disability payments in five annualinstallments following her Separation From Service, the Participant may not elect to defer the 1st, 2nd, 3rd and 5th installments only,but must also defer the 4th installment.Distributions From Trust; Withholding. The Company shall deliver to the Trustees a schedule for each Participant (the“Payment Schedule”) that indicates the amounts payable to each Participant (and his or her beneficiaries), unless the Trustee does notrequire a Payment Schedule, that provides a formula or other instructions acceptable to the Trustees for determining the amounts sopayable, the form in which such amount is to be paid and the time of commencement for payment of such amounts. The PaymentSchedule shall be delivered to the Trustees not fewer than 15 days prior to the first date on which a payment is to be made to theParticipant. Any change to a Payment Schedule shall be delivered to the Trustees not fewer than 15 days prior to the date on which thefirst payment is to be made in accordance with the changed Payment Schedule. Except as otherwise provided herein, the Trustees shallcause the Company or the Trust to make payments to Participants and their beneficiaries in accordance with such Payment Schedule.The Trustees shall make provisions for the reporting and withholding of any federal, state or local taxes that may be required to bewithheld with respect to the payment of Plan I benefits and shall pay amounts withheld to the appropriate taxing authorities ordetermine that such amounts have been reported, withheld and paid by the Company, it being understood among the parties hereto thatthe Company shall on a timely basis provide the Trustees specific information as to the amount of taxes from the Trustees and properlypay and report such withheld taxes from the Trustees and properly pay and report such amounts to the appropriate taxing authorities.K. Certain Distributions. In case of any distribution to a minor or to a legally incompetent person, the Committee may(1) direct the Trustees to make the distribution to his legal representative, to a designated relative, or directly to such person for hisbenefit, or (2) instruct the Trustees to use the distribution directly for his support, maintenance, or education. The Trustees shall not berequired to oversee the application, by any third party, of any distributions made pursuant to this Article.L. Phantom Cypress Stock. Distributions of accounts with allocations credited to phantom Cypress stock shall be madein cash.Domestic Relations Order Distributions. The Committee, in its sole discretion, may accelerate a payment (orpayments) make such payments to an individual other than the Participant as necessary to comply with the terms of aDomestic Relations Order.M. Conflicts of Interest and Ethics Rules Distributions. The Committee, in its sole discretion, may accelerate a payment(or payments) as necessary (i) for any U.S. federal officer or employee in the executive branch of the U.S. federal government tocomply with an ethics agreement with the U.S. federal government, or (ii) to avoid violating a U.S. federal, state, local or foreign ethicslaw or conflicts of interest law, as specified under Code Section 409A.Document No. 001-92196 Rev. *B 18N. FICA and Related Income Tax Distribution. The Committee, in its sole discretion, may permit a distribution from aParticipant’s Account sufficient to pay any FICA Amounts due upon the vesting of any Company contribution as well as to satisfy theincome tax withholding requirements with respect to the FICA Amount and income tax payments under this Article 7.U. In no eventmay the total payment under this Article 7.T. exceed the aggregate of the FICA Amount and the related income tax withholding.O. State, Local and Foreign Tax Distribution. The Committee, in its sole discretion, may permit a distribution from aParticipant’s Account sufficient to pay any state, local or foreign tax obligations arising from participation in the Plan that apply to anamount deferred under the Plan prior to the scheduled distribution of such amount. In the event the Committee exercises suchdiscretion, the Committee may also permit a distribution sufficient to pay related income tax withholding in accordance with CodeSection 409A. In no event may the total payment under this Article 7.V. exceed the aggregate amount of such taxes due.P. Code Section 409A Distribution. In the event that the Plan fails to satisfy the requirements of Code Section 409A,then the Company, in its sole discretion, may permit a distribution from a Participant’s Account up to the maximum amount required tobe included in income as a result of the failure to comply with Code Section 409A.Special 2005 Election. Notwithstanding any other provision of this Plan I, in the period commencing June 15, 2005 and endingDecember 31, 2005, the Committee, in its sole discretion, may permit one or more Participants to cancel or reduce Deferral Electionswith respect to amounts deferred (or to be deferred) under this Plan I on or after January 1, 2005 up through December 31, 2005 inaccordance with Q&A-20 under IRS Notice 2005-1, subject to the Participant entering into such cancellation or reduction agreementsas are specified by the Committee.Document No. 001-92196 Rev. *B 19ARTICLE VIII CHANGE OF CONTROLThe Company, in its sole discretion, may terminate the Plan and accelerate all scheduled Plan distributions within 30 days priorto or 12 months following a Change of Control Event by means of an irrevocable election; provided that such termination anddistribution acceleration complies with the requirements of Code Section 409A.Document No. 001-92196 Rev. *B 20ARTICLE IX TERMINATION DUE TO CORPORATE DISSOLUTION OR PURSUANT TO BANKRUPTCY COURT APPROVALA. Corporate Dissolution. The Company, in its sole discretion, may terminate the Plan and accelerate all scheduled Plandistributions within 12 months following a Corporate Dissolution; provided that such termination and distribution acceleration complieswith the requirements of Code Section 409A.B. Bankruptcy Court Approval. The Company, in its sole discretion, may terminate the Plan and accelerate allscheduled Plan distributions pursuant to Bankruptcy Court Approval; provided that such termination and distribution accelerationcomplies with the requirements of Code Section 409A.Document No. 001-92196 Rev. *B 21ARTICLE X UNFORESEEABLE EMERGENCY DISTRIBUTIONSWith the consent of the Committee, a Participant may withdraw up to one hundred percent (100%) of his or her Account asmay be required to meet a sudden Unforeseeable Emergency of the Participant. Such distribution may only be made if the amountsdistributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such emergency plusamounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which suchhardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’sassets (to the extent the liquidation of such assets would not itself cause severe financial hardship).Document No. 001-92196 Rev. *B 22ARTICLE XI CLAIMS PROCEDUREA. Claims and Review Procedures(1) Purpose. Every Participant or Beneficiary (or his or her representative who is authorized in writing by theClaimant to act on his or her behalf) (hereinafter collectively, “Claimant”) shall be entitled to file with the Committee (and subsequentlywith the individual(s) designated to review claims appealed after being initially denied by the Committee (the “Deferred CompensationCommittee”)) a written claim for benefits under the Plan. The Committee shall be able to establish such rules, policies and procedures,consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its duties and responsibilities under thisArticle 11. In the case of a denial of the claim, the Committee shall provide the Claimant with a written or electronic notification thatcomplies with Department of Labor Regulation Section 2520.104b-1(c)(1).(2) Denial of Claim. If a claim is denied by the Committee (or its authorized representative), in whole or in part, thenthe Claimant shall be furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based;(iii) a description of any additional material or information necessary for the Claimant to perfect the claim,and an explanation of why the material or information is necessary; and(iv) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial onreview (as set forth in Section 11(A)(4) below).The denial notice shall be furnished to the Claimant no later than ninety (90) days after receipt of the claim by the Committee, unlessthe Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determinesthat an extension of time for processing is required, then notice of the extension shall be furnished to the Claimant prior to thetermination of the initial ninety (90)-day period. In no event shall such extension exceed a period of ninety (90) days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.(3) Claim Review Procedure. The Claimant may request review of the denial at any time within sixty (60) daysfollowing the date the Claimant received notice of the denial of his or herDocument No. 001-92196 Rev. *B 23claim. The Committee shall afford the Claimant a full and fair review of the decision denying the claim and, if so requested, shall:(i) provide the Claimant with the opportunity to submit written comments, documents, records and otherinformation relating to the claim for benefits;(ii) provide that the Claimant shall be provided, upon request and free of charge, reasonable access to, andcopies of, all documents, records and other information (other than documents, records and other information that is legally-privileged)relevant to the Claimant’s claim for benefits; and(iii) provide for a review that takes into account all comments, documents, records and other informationsubmitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initialbenefit determination.(4) If the claim is subsequently also denied by the Committee, in whole or in part, then the Claimant shall be furnishedwith a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based; and(iii) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following the denial onreview.(5) The decision on review shall be issued within sixty (60) days following receipt of the request for review. Theperiod for decision may, however, be extended up to one hundred twenty (120) days after such receipt if the Committee determinesthat special circumstances require extension. In the case of an extension, notice of the extension shall be furnished to the Claimant priorto the expiration of the initial sixty (60)-day period. In no event shall such extension exceed a period of sixty (60) days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.(6) Special Procedure for Claims Due to Disability. To the extent an application for distribution as a result of aDisability requires the Committee, as applicable, to make a determination of Disability under the terms of the Plan, then suchdetermination shall be subject to all of the general rules described in this Article, except as they are expressly modified by this Article.(i) The initial decision on the claim for a Disability distribution will be made within forty-five (45) daysafter the Plan receives the Claimant’s claim, unless special circumstances require additional time, in which case the Committee willnotify the Claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, theCommittee may notify the Claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension of up to thirty(30) days. If an extension is due to theDocument No. 001-92196 Rev. *B 24Claimant’s failure to supply the necessary information, then the notice of extension will describe the additional information and theClaimant will have forty-five (45) days to provide the additional information. Moreover, the period for making the determination willbe delayed from the date the notification of extension was sent out until the Claimant responds to the request for additional information.No additional extensions may be made, except with the Claimant’s voluntary consent. The contents of the notice shall be the same asdescribed in Article 11(A)(2) above. If a disability distribution claim is denied in whole or in part, then the Claimant will receivenotification, as described in Article 11(A)(2).(7) If an internal rule, guideline, protocol or similar criterion is relied upon in making the adverse determination, thenthe denial notice to the Claimant will either set forth the internal rule, guideline, protocol or similar criterion, or will state that such wasrelied upon and will be provided free of charge to the Claimant upon request (to the extent not legally privileged) and if the Claimant’sclaim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then the Claimant will beprovided a statement either explaining the decision or indicating that an explanation will be provided to the Claimant free of chargeupon request.(8) Any Claimant whose application for a Disability distribution is denied in whole or in part, may appeal the denialby submitting to the Committee a request for a review of the application within one hundred and eighty (180) days after receivingnotice of the denial. The request for review shall be in the form and manner prescribed by the Committee. In the event of such anappeal for review, the provisions of Article 11(A)(3) regarding the Claimant’s rights and responsibilities shall apply. Upon request, theCommittee will identify any medical or vocational expert whose advice was obtained on behalf of the Committee in connection withthe denial, without regard to whether the advice was relied upon in making the determination. The entity or individual appointed by theCommittee to review the claim will consider the appeal de novo, without any deference to the initial denial. The review will notinclude any person who participated in the initial denial or who is the subordinate of a person who participated in the initial denial.(9) If the initial Disability distribution denial was based in whole or in part on a medical judgment, then theCommittee will consult with a health care professional who has appropriate training and experience in the field of medicine involved inthe medical judgment, and who was neither consulted in connection with the initial determination nor is the subordinate of any personwho was consulted in connection with that determination. The Committee must include in any notice of an adverse determination onreview either an explanation of the clinical basis for the determination, applying the terms of the Plan to the Claimant’s medicalcircumstances, or a statement that such explanation will be provided free of charge upon request.(10) A decision on review shall be made promptly, but not later than forty-five (45) days after receipt of a request forreview, unless special circumstances require an extension of time for processing. If an extension is required, the Claimant will benotified before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipated date that thereview will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of a request forreview. The Committee must give notice of its decision to the Claimant; such notice must comply with the requirements set forth inparagraph (h) above. In addition, if the Claimant’s claim was denied based on a medical necessity or experimental treatmentDocument No. 001-92196 Rev. *B 25or similar exclusion, then the Claimant will be provided a statement explaining the decision, or a statement providing that suchexplanation will be furnished to the Claimant free of charge upon request. The notice shall also contain the following statement: “Youand your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may beavailable is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.”B. Exhaustion of Claims Procedure and Right to Bring Legal Claim. No action in law or equity shall be brought morethan one (1) year after the Committee’s affirmation of a denial of the claim, or, if earlier, more than four (4) years after the facts orevents giving rise to the Claimant’s allegation(s) or claim(s) first occurred.Document No. 001-92196 Rev. *B 26ARTICLE XII MISCELLANEOUSA. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable rights, claims, or interests in any specific property or assets of the Company. No assets of the Company shall be held in anyway as collateral security for the fulfilling of the obligations of the Company under this Plan I. Any and all of the assets of theCompany shall be, and remain, the general unpledged, unrestricted assets of the Company. The obligation of the Company under PlanI shall be merely that of an unfunded and unsecured promise to pay money in the future, and the rights of the Participants andBeneficiaries shall be no greater than those of unsecured general creditors.B. Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or personsdesignated by Plan I and not to any other person or corporation. No part of a Participant’s Account shall be liable for the debts,contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account besubject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person haveany right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign,pledge, encumber or charge any distribution or payment from Plan I, voluntarily or involuntarily, the Committee, in its sole andabsolute discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiaryor successor in interest in such manner as the Committee shall direct.Withholding. ,All taxes that are required to be withheld by the Company shall be deducted from each payment made underPlan I, as applicable. The Company shall have the right to reduce any payment by the amount of cash sufficient to provide the amountof said taxes.Legal Representation. The Company will reimburse all reasonable legal fees and expenses incurred by a Plan I Beneficiary inseeking to obtain or enforce any right or benefit provided by Plan I. This reimbursement right applies only to claims made after aChange of Control Event and only for fees and expenses incurred after a Plan I Beneficiary has exhausted the claims and appealsprocedure specified in Article IX. No reimbursement shall be made if the request is found to be frivolous by a court of competentjurisdiction.Amendment, Modification, Suspension or Termination. The Committee may amend, modify, suspend or terminate Plan I inwhole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce anyamounts allocated to a Participant’s Account, provided that a termination or suspension of Plan I or any Plan I amendment ormodification that will significantly increase costs to the Company shall be approved by the Board. In the event that this Plan I isterminated, the timing of the disposition of the amounts credited to a Participant’s Account shall occur in accordance with Article VII.Governing Law. This Plan I shall be construed, governed and administered in accordance with the internal substantive laws ofthe State of California (other than the choice of law principles).Document No. 001-92196 Rev. *B 27Receipt or Release. Any payment to a Plan I Beneficiary in accordance with the provisions of Plan I shall, to the extentthereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may require such Plan IBeneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.H. Payments on Behalf of Persons under Incapacity. In the event that any amount becomes payable under Plan I to a personwho, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipttherefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to haveassumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of theCommittee and the Company.I. No Employment or Other Rights. Participation in this Plan I shall not confer upon any person any right to be employed bythe Company (or for outside director Participants, any right to remain in service as a Board member) or any other right not expresslyprovided hereunder.J. Headings. Headings and subheadings in this Plan I are inserted for convenience of reference only and are not to beconsidered in the construction of the provisions hereof.K. Successorship. This Plan I shall be binding upon and inure to the benefit of any successor to the Company or its businessas the result of merger, consolidation, reorganization, transfer of assets or otherwise, and any subsequent successor thereto; and anysuch successor shall be deemed to be the “Company” under this Plan I. In the event of any such merger, consolidation, reorganization,transfer of assets or other similar transaction, the successor to the Company or its business or any subsequent successor thereto shallpromptly notify the Trustees in writing of its successorship and furnish the Trustees with the name or names of any person or personsauthorized to act for the Company. In no event shall any such transaction described herein suspend or delay the rights of Plan IBeneficiaries to receive their vested accrued benefits hereunder.L. Plan I Document. This document, the prospectus to Plan I, the Deferral Election, certain definitions expressly mentionedherein that are defined in the Cypress Semiconductor 401(k) Employee Savings Plan, the Trust Agreement, and any other documentsidentified by the Committee, comprise the Plan documents for Plan I.M. Definitions (1) “Account” means the bookkeeping account established to reflect the interest of a Participant or beneficiary in PlanI.(2) “Bankruptcy Court Approval” means the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A).(3) “Cause” means: (i) Participant’s continued failure to substantially perform Participant’s principal duties andresponsibilities (other than as a result of disability or death) after thirty (30) days written notice from the Company specifying the natureof Participant’s failure and demanding that such failure be remedied; (ii) Participant’s material and continuing breach of his or herobligations to the Company set forth in any written agreement between the Company andDocument No. 001-92196 Rev. *B 28Participant or any written policy of the Company after thirty (30) days written notice from the Company specifying the nature ofParticipant’s breach and demanding that such breach be remedied (unless such breach by its nature cannot be cured, in which casenotice and an opportunity to cure shall not be required); (iii) Participant’s arrest for a felony, fraud or an act of moral turpitude; or(iv) act or acts of dishonesty undertaken by Participant and intended to result in personal enrichment of Participant at the expense of theCompany.(4) “Change of Control Event” means a change in ownership or effective control of the Company or in theownership of a substantial portion of the Company’s assets, as defined under Code Section 409A.(5) “Code Section 409A” means Code Section 409A and the proposed or final (as applicable) Treasury regulationsand other official guidance promulgated thereunder.(6) “Corporate Dissolution” means a dissolution of the Company that is taxed under Code Section 331.(7) “Deferral Election” means the documents that encompass the (i) the Deferred Compensation Plan I BeneficiaryDesignation, (ii) the Deferred Compensation Plan I Distribution Election Form, (iii) the Deferred Compensation Plan I ParticipationAgreement and Deferral Election, (iv) the Deferred Compensation Plan I Investment Allocation Form for Future Deferrals, (v) theDeferred Compensation Plan I Investment Allocation Change Form, and (vi) any other documents provided to Participants relating totheir Plan I deferral election decisions.(8) “Disability” means the Participant (i) is unable to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment which can be expected to result in death or can be expected to last for acontinuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mentalimpairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacementbenefits for a period of not less than three (3) months under an accident and health plan covering Company employees.(9) “Domestic Relations Order” means a court order that qualifies as a domestic relations order under CodeSection 414(p)(1)(B).(10) “FICA Amount” means the aggregate Federal Insurance Contributions Act (FICA) tax imposed on any Accountunder Code Sections 3101, 3121(a) and 3121(v)(2), as applicable, and any corresponding tax withholding provisions of applicablestate, local or foreign tax laws as a result of the payment of the FICA amount.(11) “Involuntary Termination” means a Participant’s termination of employment (or for outside director Participants,termination of service as a Board member) with the Company because of the Company’s downsizing and/or restructuring, asdetermined in the sole discretion of the Committee.(12) “Plan Year” means the calendar year.Document No. 001-92196 Rev. *B 29(13) “Sales Commissions” means “sales commission compensation” as such term is defined in Treasury Regulation§1.409A-2(a)(12)(i).(14) “Separation From Service” means a separation from service as defined under Code Section 409A. For thispurpose, the employment relationship will be treated as continuing intact while the Participant is on military leave, sick leave or otherbona fide leave of absence, except that if the period of such leave exceeds six (6) months and the Participant does not retain a right toreemployment under an applicable statute or by contract, then the employment relationship will be deemed to have terminated on thefirst day immediately following such 6-month period. A leave of absence constitutes a bona fide leave of absence only if there is areasonable expectation that the Participant will return to perform services for the Employer.(15) “Specified Employee” means a “key employee” as such term is defined in Internal Revenue Code Section 416(i)without regard to paragraph five (5) thereof. As of 2016, this generally includes (i) the top fifty (50) Company officers making at least$200,000 per year, (ii) a 5% owner of the Company, or (iii) a 1% owner of the Company making more than $150,000 per year. Forpurposes of the preceding sentence, “compensation” means Compensation as such term is defined in the Company’s 401(k) EmployeeSavings Plan. The determination of whom is a Specified Employee shall be made on December 31 of each year, shall include anyemployee who qualified as a Specified Employee at any time during the preceding twelve-month period and shall be effective on thefollowing April 1.(16) “Unforeseeable Emergency” means a severe financial hardship to Participant resulting from an illness or accidentof Participant, the Participant’s spouse or a dependent of Participant (as defined in Section 152(a) of the Code), loss of Participant’sproperty due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the controlof Participant.(17) “Valuation Date” means, except as otherwise specified by the Committee, (i) for distributions hereunder and forallocations of deferrals and re-allocations of amounts previously deferred, that the Participant’s Account shall be valued as of the lastbusiness day of the week preceding the transaction, and (ii) for permitted plan to plan transfers made prior to January 1, 2009, the lastbusiness day of the Plan Year.CYPRESS SEMICONDUCTORCORPORATIONBy: (Title) Date:__________________Document No. 001-92196 Rev. *B 30Exhibit 10.7.2CYPRESS NON-QUALIFIEDDEFERRED COMPENSATION PLAN IIDocument No. 001-92195 Rev. *B 1TABLE OF CONTENTS PageARTICLE I PLAN II ADMINISTRATION 6ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATION 6ARTICLE III PLAN II CONTRIBUTIONS AND ALLOCATIONS 8ARTICLE IV VESTING 11ARTICLE V GENERAL DUTIES 12ARTICLE VI PARTICIPANTS’ ACCOUNTS 13ARTICLE VII PAYMENTS TO A PLAN II PARTICIPANT OR BENEFICIARY 14ARTICLE VIII CHANGE OF CONTROL 19ARTICLE IX TERMINATION DUE TO CORPORATE DISSOLUTION OR PURSUANT TOBANKRUPTCY COURT APPROVAL 20ARTICLE X UNFORESEEABLE EMERGENCY DISTRIBUTIONS 21ARTICLE XI CLAIMS PROCEDURE 22ARTICLE XII MISCELLANEOUS 26Document No. 001-92195 Rev. *B 2CYPRESS NON-QUALIFIEDDEFERRED COMPENSATION PLAN IIThe Cypress Semiconductor Corporation Nonqualified Deferred Compensation Plan, originally effective as of September 1,1995, and thereafter amended, was further amended and restated in its entirety by Cypress Semiconductor Corporation (the“Company”), effective as of January 1, 2002 on behalf of itself and any designated subsidiaries and was renamed the Cypress Non-Qualified Deferred Compensation Plan II (“Plan II”). Also on January 1, 2002, the Cypress Non-Qualified Deferred CompensationPlan I (“Plan I” or “Plan”) was adopted by the Company. Plan I is similar to Plan II except that (i) the phantom investments aredifferent than those available under Plan II, and (ii) beneficiaries of Plan I participants who die in certain situations will receive asupplemental survivor benefit.•Plan I and Plan II were amended effective April 1, 2004 to permit outside directors who are also consultants to participate in thePlans. Plan I and Plan II were frozen to new deferrals as of December 31, 2004 so as to qualify these prior plans for“grandfather” treatment under Internal Revenue Code Section 409A and were renamed Pre-2005 Plan I and Pre-2005 Plan II.To comply with Internal Revenue Code Section 409A, the Company established Plan I and Plan II, covering deferrals made onand after January 1, 2005. Plan I is similar to Plan II except that (i) the phantom investments are different than those availableunder Plan II, and (ii) beneficiaries of Plan I participants who die in certain situations will receive a supplemental survivorbenefit.•Plan I and Plan II were amended effective June 15, 2005 to allow the Committee, in its discretion, to permit Participants tocancel or reduce Deferral Elections in 2005 with respect to amounts deferred (or to be deferred) on or after January 1, 2005through December 31, 2005.•Plans I and II were further amended effective January 1, 2006 to clarify that the definition of Compensation excludes anyseverance payments.•Plans I and II were further amended in December, 2008 to comply with the final Treasury Regulations under Internal RevenueCode Section 409A.•Plans I and II were further amended in January, 2009 to make clear that Cypress phantom stock is a permitted phantominvestment.•Plans I and II were further amended effective January 1, 2016 to update plan eligibility. Plan I was also amended to freeze thesupplemental survivor benefit to two times the total amount deferred into Plan I through December 31, 2015.•Plan I was further amended on June 30, 2017 to exclude Cypress phantom stock as a permitted phantom investment.Throughout, the term “Company” shall include wherever relevant any entity that is directly or indirectly controlled by theCompany or any entity inDocument No. 001-92195 Rev. *B 3which the Company has a significant equity or investment interest, or any subsidiary of the Company, as determined by theCompany.•Effective January 1, 2018, Plan I and Plan II were then amended to designate eligibility for participation in the plans as Non-Sales employees with an annual salary equal or greater than $200,000, or Sales employees with a total cash target greater thanor equal to $200,000, as well as any other employee or category of employee that is approved by the CEO as eligible toparticipate in Plan II, and non-employee members of the Board of Directors who are also paid consultants to the Company.Plan I and Plan II were also amended to allow a maximum deferral of 90% of an employee’s quarterly bonus amount.The purpose of Plan II is to provide supplemental retirement income and to permit eligible Participants the option to deferreceipt of compensation, pursuant to the terms of the Plan. Plan II is intended to be an unfunded deferred compensation planmaintained for the benefit of a select group of management or highly compensated employees under Sections 201(2), 301(a)(3) and401(a)(1) of ERISA and is intended to comply with Section 409A of the Internal Revenue Code. Participants shall have the status ofunsecured creditors of the Company with respect to the payment of Plan benefits.Document No. 001-92195 Rev. *B 4RECITALS:1. The Company maintains Plan II for the benefit of a select group of management or highly compensated employeesdesignated by the Company.2. Under Plan II, the Company is obligated to pay vested accrued benefits to Plan II Participants and their beneficiary orbeneficiaries (“Plan II Beneficiaries”) from the Company’s general assets.3. The Company has entered into an agreement (the “Trust Agreement”) with American Stock Transfer and Trust Company(the “Trustees”) under an irrevocable trust (the “Trust”) to be used in connection with Plan II.4. The Company intends to make contributions to the Trust so that such contributions will be held by the Trustees andinvested, reinvested and distributed, all in accordance with the provisions of this Plan II and the Trust Agreement.5. The Company intends that the assets of the Trust shall at all times be subject to the claims of the general creditors of theCompany as provided in the Trust Agreement.6. The Company intends that the existence of the Trust shall not alter the characterization of Plan II as “unfunded” forpurposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall not be construed to provideincome to Plan II Beneficiaries prior to actual payment of the vested accrued benefits thereunder.NOW THEREFORE, the Company does hereby establish Plan II as follows and does also hereby agree that Plan II shall bestructured, held and disposed of as follows:Document No. 001-92195 Rev. *B 5ARTICLE I PLAN II ADMINISTRATIONA. The Deferred Compensation Committee of the Company (the “Committee”) administers Plan II. Subject to the specificduties delegated by the Compensation Committee to such Committee, the Committee shall be responsible for the general administrationand interpretation of Plan II and for carrying out its provisions. The Committee shall have such powers as may be necessary todischarge its duties hereunder, including, but not by way of limitation, the following powers and duties:(1) discretionary authority to construe and interpret the terms of Plan II, and to determine eligibility and the amount,manner and time of payment of any benefits hereunder;(2) to prescribe forms and procedures for purposes of Plan II participation and distribution of benefits;(3) to direct the Trustees as to the distribution of Plan II assets; and(4) to take such other action as may be necessary and appropriate for the proper administration of Plan II.B. The Committee may adopt such rules, regulations and bylaws and may make such decisions as it deems necessary ordesirable for the proper administration of Plan II. Any rule or decision that is not inconsistent with the provisions of Plan II shall beconclusive and binding upon all persons affected by it, and there shall be no appeal from any ruling by the Committee that is within itsauthority, except as otherwise provided herein.The Committee shall have the power to (i) identify investment choices for the Trust Fund; and (ii) appoint or employ agents,recordkeepers and advisors to assist the Committee in discharging its duties under Plan II ARTICLE II. ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATIONEligible Participants The following categories of service providers (“Eligible Participants”) shall be eligible to participate inPlan II: (i) Non-Sales employees with an annual salary equal to or greater than $200,000, or Sales employees with a total cash targetgreater than or equal to $200,000; (ii) any other employee or category of employee that is approved by the CEO as eligible toparticipate in Plan II, and (iii) non-employee members of the Board of Directors who are also paid consultants to the Company. TheCommittee reserves the right to modify the definition of Eligible Participant at any time with the approval of the CEO. Any EligibleParticipant who has commenced participation in Plan II shall be referred to in this Plan II as a “Participant.”Participation Each Eligible Participant may elect to commence participation in Plan II by completing a Cypress Non-QualifiedDeferred Compensation Plan II participation agreement and Deferral Election no later than the last day of his or her Election Period.For purposes of the foregoing, an Eligible Participant’s Election Period shall be defined as: (i) for newly Eligible Participants who areeligible for the first time, the thirty (30) day period measured from the dateDocument No. 001-92195 Rev. *B 6upon which the Eligible Participant becomes eligible to participate in Plan II and any other non-qualified deferred compensation plansrequired to be aggregated with Plan II under Section 409A; and (ii) for all other Eligible Participants (including Eligible Participantswho formerly were Eligible Participants), no later than the due date for the irrevocable enrollment forms during the annual OpenEnrollment period which is generally from December 1st to December 31st of each year (the “Annual Open Enrollment Period”) priorto the beginning of the Plan Year for which the election is effective (the calendar year is the “Plan Year”). Elections shall remain ineffect for successive Plan years unless modified or revoked (with respect to future Plan Years only) in a subsequent Annual OpenEnrollment Period.Beneficiary Designation Each Participant, prior to entering Plan II, may designate a beneficiary or beneficiaries to receive theremainder of any interest of the Participant under Plan II in the event of the Participant’s death. A Participant may change his or herbeneficiary designation at any time by submitting a complete and approved form of beneficiary designation (including dated spousalconsent, if required pursuant to the beneficiary designation form) to the Committee (or its designee). Each beneficiary designation shallbe in a form prescribed by the Committee and will be effective only when filed with the Committee (or its designee) during theParticipant’s lifetime. Each beneficiary designation filed with the Committee will cancel all previously filed beneficiary designations. Inthe absence of a valid designation, or if no designated beneficiary survives the Participant, the Participant’s interest shall be distributedto the Participant’s estate.Document No. 001-92195 Rev. *B 7ARTICLE III PLAN II CONTRIBUTIONS AND ALLOCATIONSParticipant Deferrals Each Participant participating in Plan II shall, no later than the end of the applicable Enrollment Period,execute a participation agreement and Deferral Election authorizing the Company to withhold a percentage amount of the Participant’sCompensation which would otherwise be paid to the Participant with respect to services rendered. Compensation under Plan II isdefined as annual base salary (or, for non-employee directors, cash consulting fees, including Cypress Incentive Plan (CIP) orManufacturing Incentive Plan (MIP) bonus), cash bonuses (including CIP or MIP bonuses, new product bonuses and any other cashbonuses), and any cash Sales Commissions payable to the Participant in connection with the Participant’s services to the Company;provided however, that Compensation does not include severance payments (“Compensation”). The Committee may, in its discretion,establish in the Deferral Election minimum and maximum levels of Compensation that may be deferred pursuant to Plan II. EffectiveJanuary 1, 2018, the maximum deferral for quarterly bonus payments is 90%. Compensation deferrals made by a Participant under thisPlan II shall be held as an asset of the Company and the Company intends to deposit the amounts deferred into the Trust.B. Sales Commissions and Bonuses Payable in a Subsequent Year. If cash bonuses (including new product bonuses and anyother cash bonuses) or cash Sales Commissions are earned in one calendar year and would normally be paid in the first quarter of theensuing calendar year, they shall be deferred and distributed based upon the election made by the Participant in the Open Enrollmentperiod in the year prior to the year in which it was earned. For newly Eligible Participants, any such cash bonus or Sales Commissionshall be deferred and distributed based upon their initial election made with respect to the year in which it was earned; provided,however, that such election may apply to no more than the total amount of such compensation multiplied by the ratio of the number ofdays remaining in the applicable performance period after such election becomes irrevocable over the total number of days in theapplicable performance period.C. Year-End Cross-Over Payroll Periods. Paydays relating to periods of service that cross-over the calendar year end shall becovered by the Participant’s Deferral Election in effect for the later year, consistently with the default rules under Treasury Regulation§1.409A-2(a)(13).Document No. 001-92195 Rev. *B 8Election Changes(1). A Participant may, in such form and at such time or times as the Committee may prescribe, discontinueor modify the deferral of his or her Compensation with respect to Plan Years that have not yet commenced. The Committee has thepower to establish uniform and nondiscriminatory rules and from time to time to modify or change such rules governing the mannerand method by which Compensation Deferral Elections shall be made, as well as the manner and method by which CompensationDeferral Elections with respect to Plan Years that have not yet commenced may be changed or discontinued temporarily orpermanently. All Compensation deferral contributions shall be authorized by the Participant in writing or electronically, made bypayroll deduction, deducted from the Participant’s Compensation without reduction for any taxes or withholding (except to the extentrequired by law or regulation) and paid over to the Trust by the Company. Notwithstanding the foregoing, each Participant shallremain liable for any and all employment taxes owing with respect to such Participant’s Compensation deferral contributions.E. Limitation on Deferral Changes. The dollar amount of any Plan deferrals shall not be reduced or increased during any PlanYear by virtue of any Participant election to increase, decrease or terminate his or her rate of deferral in any other employee benefitplan, including the Company’s Employee Stock Purchase Plan; except as permitted by Code Section 409A with respect to changes inDeferral Election under the Company’s 401(k) Employee Savings Plan and Code Section 125 flexible benefits plan (or as otherwisepermitted under Code Section 409A).F. Cessation of Eligible Status. In the event a Participant ceases to be an Eligible Participant while also a participant in PlanII, if such individual has not undergone a Separation From Service, he or she will continue to make Compensation deferralcontributions under Plan II through the end of the Plan Year in which the individual ceases to be an Eligible Participant. Thereafter,such individual shall not make any further Compensation deferral contributions to Plan II unless or until he or she again meets theeligibility requirements of Article II above.G. Company Discretionary Contributions. The Company may, in its sole discretion, make discretionary contributions to theaccounts of one or more Participants at such times and in such amounts as the Board of the Company shall determine, subject to suchvesting and distribution conditions and limitations as the Company, in its sole discretion, shall impose. To the extent such Companycontributions do not vest, corresponding debits will be made to a Participant's Account, including any earnings on such forfeitedamounts.H. Allocations. The Compensation deferral contributions and any Company contributions made under Plan II on behalf of aParticipant shall be credited to the Participant’s Account. The Committee shall establish and maintain separate subaccounts as itdetermines to be necessary and appropriate for the proper administration of Plan II. The Committee may cause the Trustees to maintainand invest separate asset accounts corresponding to each Participant account. Each Participant Account consists of the aggregateinterest of the Participant under Plan II (and in the Trust), as reflected in the records maintained by the Company for such purposes.Plan to Plan Transfers. Subject to the Committee’s discretion, Participants shall be allowed to elect to transfer their deemedinvestment accounts from Plan II to Plan I or from Plan I to Plan II, subject to such limitations and reallocation requirements as theCommittee, in its sole discretion, determines to be appropriate; provided, however, that any such Plan to Plan transfers shall notDocument No. 001-92195 Rev. *B 9change the time and method of distribution of the amounts transferred. The Plan to Plan transfers shall be effective as of the datespecified by the Committee. Cancellation of Elections Due to 401(k) Hardship Withdrawal, Unforeseeable Emergency Distribution, orDisability (1) 401(k) Hardship Withdrawal. A Participant’s Deferral Election shall be automatically cancelled in the event theParticipant obtains a hardship distribution from the Company’s 401(k) Plan pursuant to Treasury Regulation §1.401(k)-1(d)(3). TheParticipant, if still an Eligible Participant, may re-enroll in New Plan I during the next Open Enrollment period.(2) Unforeseeable Emergency Distribution. A Participant’s Deferral Election shall be automatically cancelled in theevent the Participant obtains an unforeseeable emergency distribution from New Plan I or Plan II. The Participant, if still an EligibleParticipant, may re-enroll in New Plan I during the next Open Enrollment period.Document No. 001-92195 Rev. *B 10ARTICLE IV VESTINGA. Compensation Deferral Contributions. The value of a Participant’s Account attributable to Participants’ Compensationdeferral contributions shall always be fully vested and nonforfeitable.B. Company Contributions. The value of a Participant’s Account attributable to any Company contributions pursuant toArticle III.D shall vest at such time or times as the Board may specify in connection with any such contributions. In the absence ofBoard or Compensation Committee specification, a Participant’s interest in Company contributions shall be fully vested andnonforfeitable. Upon a Participant’s Separation From Service for any reason, any portion of the Participant’s Account that is not thenvested (including allocable earnings, as determined by the Committee), shall be forfeited. Unless otherwise determined by the Board orthe Committee, forfeitures shall be used to satisfy the Company’s obligation to remit contributions to the Trust under Plan II.Document No. 001-92195 Rev. *B 11ARTICLE V GENERAL DUTIESA. Committee Duties. The Committee will provide the Trustees with a copy of any future amendment to this Plan IIpromptly upon its adoption. The Committee may from time to time hire outside consultants, accountants, actuaries, legal counsel orrecordkeepers to perform such tasks as the Committee may from time to time determine.B. Trustees’ Duties. The Trustees shall invest and reinvest the Trust as provided in the Trust Agreement. The Trustees shallcollect the income on the Trust, and make distributions therefrom, as provided in this Plan II and in the Trust Agreement.C. Company Contributions. While Plan II remains in effect, and prior to a Change of Control Event, as defined below, theCompany shall make contributions to the Trust at least once each quarter. The amount of any quarterly contributions shall be at thediscretion of the Company. At the close of each calendar year, the Company shall make an additional contribution to the Trust to theextent that previous contributions to the Trust for the current calendar year are not equal to the total of the Compensation deferralsmade by each Participant plus Company discretionary contributions, if any, accrued, as of the close of the current calendar year. TheTrustees shall not be liable for any failure by the Company to provide contributions sufficient to pay all accrued benefits under Plan IIin full in accordance with the terms of Plan II.D. Department of Labor Determination. In the event that any Participants are found to be ineligible, that is, not members of aselect group of management or highly compensated employees, according to a determination made by the Department of Labor, theCommittee will take whatever steps it deems necessary, in its sole discretion, to equitably protect the interests of the affectedParticipants.Document No. 001-92195 Rev. *B 12ARTICLE VI PARTICIPANTS’ ACCOUNTSA. Separate Accounts. The Committee shall open and maintain a separate Account for each Participant. Each Participant’sAccount shall reflect the amounts allocated thereto and distributed therefrom and such other information as affects the value of suchAccount pursuant to this Plan II.B. Timing of Account Credit. Amounts deferred under Plan I shall be credited to a Participant’s Account within five businessdays following the date upon which such amounts would otherwise have been paid to the Participant.C. Statement of Accounts. As soon as practicable after the end of each calendar year the Committee shall furnish to eachParticipant a statement of Account, determined as of the end of such calendar year. Upon the discovery of any error or miscalculationin an Account, the Committee shall correct it, to the extent correction is practically feasible and permissible under Code Section 409A;provided, however, that any such statement of Account shall be considered to reflect accurately the status of the Participant’s Accountfor all purposes under Plan II unless the Participant reports a discrepancy to the Committee within six (6) months after receipt of thestatement. The Committee shall have no obligation to make adjustments to a Participant’s Account for any discrepancy reported to theCommittee more than six (6) months after receipt of the statement, or for a discrepancy caused by the Participant’s error. Statements toParticipants are for reporting purposes only, and no allocation, valuation or statement shall vest any right or title in any part of theTrust, nor require any segregation of Trust assets, except as is specifically provided in this Plan II.D. Distribution of Accounts. Payment to a Participant shall be based on the value of the vested portion of the Participant’sAccount as of the Valuation Date immediately preceding the date of distribution plus any contribution subsequently credited to suchAccount and less any distributions subsequently made from the Account.Document No. 001-92195 Rev. *B 13ARTICLE VII PAYMENTS TO A PLAN II PARTICIPANT OR BENEFICIARYGeneral(1) . Payments of vested accrued benefits to Plan II Beneficiaries from the Trust shall generally be made inaccordance with the distribution event specified by the Participant in the Deferral Election between the Company and the Participant(the “Distribution Event”). Except as otherwise expressly provided in the Participant’s Deferral Election and as set forth in Article VIIbelow, no distribution shall be made or commenced prior to the time and manner as set forth in the Participant’s Deferral Election.B. Installment Payments Treated as Single Payments. All installment payments under the Plan are considered a singlepayment for purposes of complying with Code Section 409A.C. Earliest Distributions.(i) Regular Participants. Except as permitted by the Plan and Code Section 409A in connection with a Change ofControl Event, a Corporate Dissolution, pursuant to a Bankruptcy Court Approval, a conflicts of interest or ethics rules distributionunder Article 7.Q., a FICA and related income tax distribution under Article 7.R., a state, local or foreign tax distribution under Article7.S., or a Code Section 409A Distribution under Article 7.T., in no event may the account of a Participant who is not a SpecifiedEmployee be distributed earlier than (i) the Participant’s Separation From Service, (ii) the Participant’s Disability, (iii) the Participant’sdeath, (iv) a specified time under Article 7.I. hereunder, (v) a Change of Control Event, (vi) the occurrence of an UnforeseeableEmergency, or (vii) to an individual other than the Participant pursuant to a Domestic Relations Order.(ii) Specified Employee Participants. Except as permitted by the Plan and Code Section 409A in connection with aChange of Control Event, a Corporate Dissolution, pursuant to a Bankruptcy Court Approval, a conflicts of interest or ethics rulesdistribution under Article 7.Q., a FICA and related income tax distribution under Article 7.R., a state, local or foreign tax distributionunder Article 7.S., or a Code Section 409A Distribution under Article 7.T., in no event may a Specified Employee’s account bedistributed earlier than (i) six (6) months following the Specified Employee’s Separation From Service (or if earlier, the SpecifiedEmployee’s death), (ii) six (6) months following the Specified Employee’s Disability, (iii) the Specified Employee’s death, (iv) aspecified time under Article 7.I. hereunder, (v) a Change of Control Event, (vi) the occurrence of an Unforeseeable Emergency, or (vii)to an individual other than the Participant pursuant to a Domestic Relations Order. In the event a Specified Employee’s Plandistributions are delayed due to the six-month delay requirement, the amounts otherwise payable to the Specified Employee duringsuch period of delay shall be paid on a date that is at least six months and one day following Separation From Service, but no later thanthe end of the calendar year in which such six month and one day period ends (or, if earlier, upon the death of the SpecifiedEmployee). The Participant’s other scheduled distributions, if any, shall not be affected by the period of delay.D. Small Account Lump-Sum Distribution. If, on the date of a Participant’s Separation From Service, their Accounts underPre-2005 Plan I, Pre-2005 Plan II, New Plan I, Plan II and any other non-qualified deferred compensation plans required to beaggregated with such plans pursuant to Treasury Regulation §1.409A-1(c)(2) total, in the aggregate, less than the then applicable limitunder Internal Revenue Code Section 402(g)(1)(B) (e.g., $18,000 in 2017), then all Accounts underDocument No. 001-92195 Rev. *B 14all such plans, including Participant’s Account under this New Plan I, shall be distributed in a lump-sum in the month following suchParticipant’s Separation From Service, or, if the Participant is a Specified Employee, in the seventh month following such Participant’sSeparation From Service; provided, however, that in the event such Accounts increase in value so that their aggregate value exceedsthe then applicable limit under Internal Revenue Code Section 402(g)(1)(B) on the scheduled payment date, such Accounts shallinstead be paid in accordance with the Plan and the Participant’s Deferral Elections.E. Upon Retirement – Plan Year 2005 Through 2008 Deferrals. With respect to amounts deferred in Plan Years 2005through 2008, if a Participant has a Separation From Service pursuant to Participant’s retirement at age 55 or greater but with at leastten full years of continuous employment, or for outside director Participants, age 55 or greater and ten full years of continuous serviceas a Board member (either case shall be referred to in this Plan I as “Retirement”), then Participant shall receive, pursuant to theelection selected in his or her timely submitted Deferral Election(s) a distribution of his or her Account balance in (i) a lump-sum, (ii) apartial lump-sum combined with up to fifteen years of annual payments, or (iii) two to fifteen years of annual payments, each suchpayment equal to 1/n of the Participant’s vested accrued benefit where n is the number of installments remaining to be paid, (an“Annual Payment”); provided, however, that to the extent a Participant is permitted to and makes differing distribution elections foramounts deferred in different Plan Years, then the deferrals for each Plan Year (including earnings and losses thereon) shall bedistributed in one of the three permitted methods in accordance with such Deferral Elections.F. Upon Death – Plan Year 2005 Through 2008 Deferrals. With respect to amounts deferred in Plan Years 2005 through2008, if a Participant dies, then the Participant’s beneficiary will receive their remaining Account balance in either a lump-sum or infive Annual Payments, as specified in the Participant’s Deferral Election; provided, however, that to the extent a Participant ispermitted to and makes differing distribution elections for amounts deferred in different Plan Years, then the deferrals for each PlanYear (including earnings and losses thereon) shall be distributed in one of the two permitted methods in accordance with such DeferralElections.G. Non-Retirement Separations From Service – Plan Year 2005 Through 2008 Deferrals. With respect to amounts deferredin Plan Years 2005 through 2008, in the event a Participant has a Separation From Service that does not qualify as a Retirement, thenhis or her Account balance shall be distributed in a lump-sum within 60 days following such Separation From Service.H. All Separations From Service and Death – Plan Year 2009 and Later Deferrals. With respect to amounts deferred in PlanYears 2009 and later, if a Participant dies or undergoes any Separation From Service, then Participant shall receive, pursuant to theelection selected in his or her timely submitted Deferral Election(s) a distribution of his or her Account balance in (i) a lump-sum, (ii) apartial lump-sum combined with up to fifteen years of annual payments, or (iii) two to fifteen years of Annual Payments; provided,however, that to the extent a Participant is permitted to and makes differing distribution elections for amounts deferred in different PlanYears, then the deferrals for each Plan Year (including earnings and losses thereon) shall be distributed in one of the three permittedmethods in accordance with such Deferral Elections.Document No. 001-92195 Rev. *B 15I. Scheduled In-Service Distribution. A Participant may elect, as provided in his or her Participant Deferral Election, toreceive one or more scheduled in-service (i.e., prior to a Separation From Service) distributions from their Account balance without anearly withdrawal penalty. Any such distributions must be at least two full Plan Years following the date of the Participant’s DeferralElection. Each scheduled in-service distribution may be postponed (but only once) in accordance with Article 6.M. If a Participantspecifies that a dollar amount will be distributed and the Account balance is less than the dollar amount, then the entire Account will bedistributed. A Participant may neither increase nor decrease the amount or percentage specified for an in-service distribution once theirinitial election becomes irrevocable. In the event a Participant undergoes a Separation From Service prior to a scheduled in-servicedistribution, the in-service distribution election shall be without further force and effect and the applicable Separation From Servicedistribution provisions of Plan II and the Participant’s Deferral Election shall control.J. Method of Distribution. Except as specified otherwise in this Article 6, payment to any Plan II Beneficiary shall be made(i) in accordance with the Deferral Election executed by the Participant, (ii) in cash, (iii) in a lump-sum, or (iv) in annual payments.K. Lump-Sum Distribution Timing. For Participants receiving a lump-sum distribution (other than a small account lump-sumdistribution under Article 6.D. hereof, which shall be paid in accordance with that subsection), the value of their Account (or portionthereof specified in the Participant’s election) shall be paid in a lump-sum cash payment no later than the end of the year in which theirSeparation From Service occurs (or if their Separation From Service or death occurs in December of any year, no earlier than January1 of the following year and no later than December 31 of such following year), or, for Specified Employees (or their estates orbeneficiaries), at least six months and one day after the date upon which they incur a Separation From Service, but no later than the endof the calendar year in which such six month and one day period ends or, if earlier, upon their death.L. Installment Distribution Timing. Installment payments shall commence no later than the end of the year following thetriggering distribution event (except if the triggering event is a Separation From Service or death occurring in December, in which casethe payments shall commence in the following year), or, for Specified Employees undergoing a Separation From Service triggeringevent, as soon as is practicable at least six months and one day after the date upon which they incur a Separation From Service, but nolater than the end of the calendar year in which such six month and one day period ends. However, in no event may installmentpayments be made over a period exceeding fourteen years following the first installment, even if the payments are postponed pursuantto an election made under Article 6.M. hereof.M. Subsequent Election to Delay or Change Form of Payment.(1) A Participant’s election to receive a retirement, Disability or in‑service distribution may be delayed or the form ofpayment changed by filing an election, in the form required by the Committee, at least one year in advance of the date upon which anydistribution would otherwise have been made pursuant to the prior election. Such election shall not be effective for a period of one (1)year, and must delay the initial payment by a period of at least five (5) years, but may not result in the initial payment occurring morethan then ten (10) years followingDocument No. 001-92195 Rev. *B 16Retirement or Disability. In the absence of such timely filed election, the value of such Participant’s Account shall be distributed inaccordance with their previously timely filed Account election.(2) Because Plan installment payments are considered a single payment for purposes of Code Section 409A. Asubsequent election may accelerate the method of distribution. For example, if a Participant initially elected to receive retirement orDisability payments in five annual installments following Participant’s Separation From Service, Participant could make a timelyelection to instead take a lump-sum distribution five years following Participant’s Separation From Service. Moreover, a subsequentelection may change a lump-sum distribution to an installment election, so long as, in either case, the initial payment is delayed for aperiod of at least five (5) years, the election is not effective for one (1) year and is made at least one (1) year in advance of the dateupon which the first distribution would have otherwise been made.(3) Because installment payments are treated as a single payment, any subsequent election must apply to all of theinstallment payments. For example, if a Participant initially elected to receive retirement or Disability payments in five annualinstallments following his/her Separation From Service, the Participant may not elect to defer the 1st, 2d, 3rd and 5th installments only,but must also defer the 4th installment.N. Distributions From Trust; Withholding. The Company shall deliver to the Trustees a schedule for each participant (the“Payment Schedule”) that indicates the amounts payable to each Participant (and his or her beneficiaries), unless the Trustee does notrequire a Payment Schedule, that provides a formula or other instructions acceptable to the Trustees for determining the amounts sopayable, the form in which such amount is to be paid and the time of commencement for payment of such amounts. The PaymentSchedule shall be delivered to the Trustees not fewer than 15 days prior to the first date on which a payment is to be made to theParticipant. Any change to a Payment Schedule shall be delivered to the Trustees not fewer than 15 days prior to the date on which thefirst payment is to be made in accordance with the changed Payment Schedule. Except as otherwise provided herein, the Trustees shallcause the Company or the Trust to make payments to Participants and their beneficiaries in accordance with such Payment Schedule.The Trustees shall make provisions for the reporting and withholding of any federal, state or local taxes that may be required to bewithheld with respect to the payment of Plan II benefits and shall pay amounts withheld to the appropriate taxing authorities ordetermine that such amounts have been reported, withheld and paid by the Company, it being understood among the parties hereto thatthe Company shall on a timely basis provide the Trustees specific information as to the amount of taxes from the Trustees and properlypay and report such withheld taxes from the Trustees and properly pay and report such amounts to the appropriate taxing authorities.O. Distributions From Trust; Withholding. In case of any distribution to a minor or to a legally incompetent person, theCommittee may (1) direct the Trustees to make the distribution to his legal representative, to a designated relative, or directly to suchperson for his benefit, or (2) instruct the Trustees to use the distribution directly for his support, maintenance, or education. TheTrustees shall not be required to oversee the application, by any third party, of any distributions made pursuant to this Article.Document No. 001-92195 Rev. *B 17P. Domestic Relations Order Distributions. The Committee, in its sole discretion, may accelerate a payment (or payments)make such payments to an individual other than the Participant as necessary to comply with the terms of a Domestic Relations Order.Q. Conflicts of Interest and Ethics Rules Distributions. The Committee, in its sole discretion, may accelerate a payment (orpayments) as necessary (i) for any U.S. federal officer or employee in the executive branch of the U.S. federal government to complywith an ethics agreement with the U.S. federal government, or (ii) to avoid violating a U.S. federal, state, local or foreign ethics law orconflicts of interest law, as specified under Code Section 409A.R. FICA and Related Income Tax Distribution. The Committee, in its sole discretion, may permit a distribution from aParticipant’s Account sufficient to pay any FICA Amounts due upon the vesting of any Company contribution as well as to satisfy theincome tax withholding requirements with respect to the FICA Amount and income tax payments under this Article 7.R. In no eventmay the total payment under this Article 6.R. exceed the aggregate of the FICA Amount and the related income tax withholding.S. State, Local and Foreign Tax Distribution. The Committee, in its sole discretion, may permit a distribution from aParticipant’s Account sufficient to pay any state, local or foreign tax obligations arising from participation in the Plan that apply to anamount deferred under the Plan prior to the scheduled distribution of such amount. In the event the Committee exercises suchdiscretion, the Committee may also permit a distribution sufficient to pay related income tax withholding in accordance with CodeSection 409A. In no event may the total payment under this Article 6.S. exceed the aggregate amount of such taxes due.T. Code Section 409A Distribution. In the event that the Plan fails to satisfy the requirements of Code Section 409A, thenthe Company, in its sole discretion, may permit a distribution from a Participant’s Account up to the maximum amount required to beincluded in income as a result of the failure to comply with Code Section 409A.U. Special 2005 Election. Notwithstanding any other provision of this Plan II, in the period commencing June 15, 2005 andending December 31, 2005, the Committee, in its sole discretion, may permit one or more Participants to cancel or reduce DeferralElections with respect to amounts deferred (or to be deferred) under this Plan II on or after January 1, 2005 up through December 31,2005 in accordance with Q&A-20 under IRS Notice 2005-1, subject to the Participant entering into such cancellation or reductionagreements as are specified by the Committee.Document No. 001-92195 Rev. *B 18ARTICLE VIII CHANGE OF CONTROLThe Company, in its sole discretion, may terminate the Plan and accelerate all scheduled Plan distributions within 30 days priorto or 12 months following a Change of Control Event by means of an irrevocable election; provided that such termination anddistribution acceleration complies with the requirements of Code Section 409A.Document No. 001-92195 Rev. *B 19ARTICLE IX TERMINATION DUE TO CORPORATE DISSOLUTION OR PURSUANT TO BANKRUPTCY COURT APPROVALA. Corporate Dissolution. The Company, in its sole discretion may terminate the Plan and accelerate all scheduled Plandistributions within 12 months following a Corporate Dissolution; provided that such termination and distribution acceleration complieswith the requirements of Code Section 409A.B. Bankruptcy Court Approval. The Company, in its sole discretion, may terminate the Plan and accelerate all scheduledPlan distributions pursuant to Bankruptcy Court Approval; provided that such termination and distribution acceleration complies withthe requirements of Code Section 409A.Document No. 001-92195 Rev. *B 20ARTICLE X UNFORESEEABLE EMERGENCY DISTRIBUTIONSWith the consent of the Committee, a Participant may withdraw up to one hundred percent (100%) of his or her Account asmay be required to meet a sudden Unforeseeable Emergency of the Participant. Such distribution may only be made if the amountsdistributed with respect to an Unforeseeable Emergency may not exceed the amounts necessary to satisfy such emergency plusamounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which suchhardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’sassets (to the extent the liquidation of such assets would not itself cause severe financial hardship).Document No. 001-92195 Rev. *B 21ARTICLE XI CLAIMS PROCEDUREClaims and Review Procedures(1) Purpose. Every Participant or Beneficiary (or his or her representative who is authorizedin writing by the Claimant to act on his or her behalf) (hereinafter collectively, “Claimant”) shall be entitled to file with the Committee(and subsequently with the individual(s) designated to review claims appealed after being initially denied by the Committee (the“Review Panel”)) a written claim for benefits under the Plan. The Committee and Deferred Compensation Committee shall each beable to establish such rules, policies and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate incarrying out its duties and responsibilities under this Article 11. In the case of a denial of the claim, the Committee or DeferredCompensation Committee, as applicable, shall provide the Claimant with a written or electronic notification that complies withDepartment of Labor Regulation Section 2520.104b-1(c)(1).(2) Denial of Claim. If a claim is denied by the Committee (or its authorized representative), in whole or in part, thenthe Claimant shall be furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based;(iii) a description of any additional material or information necessary for the Claimant to perfect the claim,and an explanation of why the material or information is necessary; and(iv) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial onreview (as set forth in Section 11(A)(4) below).The denial notice shall be furnished to the Claimant no later than ninety (90) days after receipt of the claim by the Committee, unlessthe Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determinesthat an extension of time for processing is required, then notice of the extension shall be furnished to the Claimant prior to thetermination of the initial ninety (90)-day period. In no event shall such extension exceed a period of ninety (90) days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.(3) Claim Review Procedure. The Claimant may request review of the denial at any time within sixty (60) daysfollowing the date the Claimant received notice of the denial of his or her claim. The Committee shall afford the Claimant a full and fairreview of the decision denying the claim and, if so requested, shall:Document No. 001-92195 Rev. *B 22(i) provide the Claimant with the opportunity to submit written comments, documents, records and otherinformation relating to the claim for benefits;(ii) provide that the Claimant shall be provided, upon request and free of charge, reasonable access to, andcopies of, all documents, records and other information (other than documents, records and other information that is legally-privileged)relevant to the Claimant’s claim for benefits; and(iii) provide for a review that takes into account all comments, documents, records and other informationsubmitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initialbenefit determination.(4) If the claim is subsequently also denied by the Deferred Compensation Committee, in whole or in part, then theClaimant shall be furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based; and(iii) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following the denial onreview.(5) The decision on review shall be issued within sixty (60) days following receipt of the request for review. Theperiod for decision may, however, be extended up to one hundred twenty (120) days after such receipt if the Deferred CompensationCommittee determines that special circumstances require extension. In the case of an extension, notice of the extension shall befurnished to the Claimant prior to the expiration of the initial sixty (60)-day period. In no event shall such extension exceed a period ofsixty (60) days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extensionof time and the date by which the Plan expects to render the benefits determination.(6) Special Procedure for Claims Due to Disability. To the extent an application for distribution as a result of aDisability requires the Committee or the Deferred Compensation Committee, as applicable, to make a determination of Disability underthe terms of the Plan, then such determination shall be subject to all of the general rules described in this Article, except as they areexpressly modified by this Article.(i) The initial decision on the claim for a Disability distribution will be made within forty-five (45) daysafter the Plan receives the Claimant’s claim, unless special circumstances require additional time, in which case the Committee willnotify the Claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, theCommittee may notify the Claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension of up to thirty(30) days. If an extension is due to the Claimant’s failure to supply the necessary information, then the notice of extension will describetheDocument No. 001-92195 Rev. *B 23additional information and the Claimant will have forty-five (45) days to provide the additional information. Moreover, the period formaking the determination will be delayed from the date the notification of extension was sent out until the Claimant responds to therequest for additional information. No additional extensions may be made, except with the Claimant’s voluntary consent. The contentsof the notice shall be the same as described in Article 11(A)(2) above. If a disability distribution claim is denied in whole or in part,then the Claimant will receive notification, as described in Article11(A)(2).(7) If an internal rule, guideline, protocol or similar criterion is relied upon in making the adverse determination, thenthe denial notice to the Claimant will either set forth the internal rule, guideline, protocol or similar criterion, or will state that such wasrelied upon and will be provided free of charge to the Claimant upon request (to the extent not legally-privileged) and if the Claimant’sclaim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then the Claimant will beprovided a statement either explaining the decision or indicating that an explanation will be provided to the Claimant free of chargeupon request.(8) Any Claimant whose application for a Disability distribution is denied in whole or in part, may appeal the denialby submitting to the Deferred Compensation Committee a request for a review of the application within one hundred and eighty (180)days after receiving notice of the denial. The request for review shall be in the form and manner prescribed by the DeferredCompensation Committee. In the event of such an appeal for review, the provisions of Article 11(A)(3) regarding the Claimant’s rightsand responsibilities shall apply. Upon request, the Deferred Compensation Committee will identify any medical or vocational expertwhose advice was obtained on behalf of the Deferred Compensation Committee in connection with the denial, without regard towhether the advice was relied upon in making the determination. The entity or individual appointed by the Deferred CompensationCommittee to review the claim will consider the appeal de novo, without any deference to the initial denial. The review will notinclude any person who participated in the initial denial or who is the subordinate of a person who participated in the initial denial.(9) If the initial Disability distribution denial was based in whole or in part on a medical judgment, then the DeferredCompensation Committee will consult with a health care professional who has appropriate training and experience in the field ofmedicine involved in the medical judgment, and who was neither consulted in connection with the initial determination nor is thesubordinate of any person who was consulted in connection with that determination.The Deferred Compensation Committee mustinclude in any notice of an adverse determination on review either an explanation of the clinical basis for the determination, applyingthe terms of the Plan to the Claimant’s medical circumstances, or a statement that such explanation will be provided free of chargeupon request.(10) A decision on review shall be made promptly, but not later than forty-five (45) days after receipt of a request forreview, unless special circumstances require an extension of time for processing. If an extension is required, the Claimant will benotified before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipated date that thereview will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of a request forreview. The Deferred Compensation Committee must give noticeDocument No. 001-92195 Rev. *B 24of its decision to the Claimant; such notice must comply with the requirements set forth in paragraph (h) above. In addition, if theClaimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion, then the Claimant will beprovided a statement explaining the decision, or a statement providing that such explanation will be furnished to the Claimant free ofcharge upon request. The notice shall also contain the following statement: “You and your Plan may have other voluntary alternativedispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department ofLabor Office and your State insurance regulatory agency.”B. Exhaustion of Claims Procedure and Right to Bring Legal Claim. No action in law or equity shall be brought more thanone (1) year after the Deferred Compensation Committee’s affirmation of a denial of the claim, or, if earlier, more than four (4) yearsafter the facts or events giving rise to the Claimant’s allegation(s) or claim(s) first occurred.Document No. 001-92195 Rev. *B 25ARTICLE XII MISCELLANEOUSA. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable rights, claims, or interests in any specific property or assets of the Company. No assets of the Company shall be held in anyway as collateral security for the fulfilling of the obligations of the Company under this Plan II. Any and all of the assets of theCompany shall be, and remain, the general unpledged, unrestricted assets of the Company. The obligation of the Company under PlanII shall be merely that of an unfunded and unsecured promise to pay money in the future, and the rights of the Participants andBeneficiaries shall be no greater than those of unsecured general creditors.B. Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or personsdesignated by Plan II and not to any other person or corporation. No part of a Participant’s Account shall be liable for the debts,contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account besubject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person haveany right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever.If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign,pledge, encumber or charge any distribution or payment from Plan II, voluntarily or involuntarily, the Committee, in its sole andabsolute discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiaryor successor in interest in such manner as the Committee shall direct.C. Withholding. All taxes that are required to be withheld by the Company shall be deducted from each payment madeunder Plan II, as applicable. The Company shall have the right to reduce any payment by the amount of cash sufficient to provide theamount of said taxes.D. Legal Representation. The Company will reimburse all reasonable legal fees and expenses incurred by a Plan IIBeneficiary in seeking to obtain or enforce any right or benefit provided by Plan II. This reimbursement right applies only to claimsmade after a Change of Control Event and only for fees and expenses incurred after the Plan II Beneficiary has exhausted the claimsand appeals procedure specified in Article IX. No reimbursement shall be made if the request is found to be frivolous by a court ofcompetent jurisdiction.E. Amendment, Modification, Suspension or Termination. The Committee may amend, modify, suspend or terminate Plan IIin whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce anyamounts allocated to a Participant’s Account, provided that a termination or suspension of Plan II or any Plan II amendment ormodification that will significantly increase costs to the Company shall be approved by the Board. In the event that this Plan II isterminated, the timing of the disposition of the amounts credited to a Participant’s Account shall occur in accordance with Article VII.Document No. 001-92195 Rev. *B 26F. Governing Law. This Plan II shall be construed, governed and administered in accordance with the internal substantivelaws of the State of California (other than the choice of law principles).G. Receipt or Release. Any payment to a Plan II Beneficiary in accordance with the provisions of Plan II shall, to the extentthereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may require such Plan IIBeneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.H. Payments on Behalf of Persons under Incapacity. In the event that any amount becomes payable under Plan II to a personwho, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipttherefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to haveassumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of theCommittee and the Company.I. No Employment or Other Rights. Participation in this Plan II shall not confer upon any person any right to be employedby the Company (or for outside director Participants, any right to remain in service as a Board member or consultant) or any other rightnot expressly provided hereunder.J. Headings. Headings and subheadings in this Plan II are inserted for convenience of reference only and are not to beconsidered in the construction of the provisions hereof.K. Successorship. This Plan II shall be binding upon and inure to the benefit of any successor to the Company or its businessas the result of merger, consolidation, reorganization, transfer of assets or otherwise, and any subsequent successor thereto; and anysuch successor shall be deemed to be the “Company” under this Plan II. In the event of any such merger, consolidation, reorganization,transfer of assets or other similar transaction, the successor to the Company or its business or any subsequent successor thereto shallpromptly notify the Trustees in writing of its successorship and furnish the Trustees with the name or names of any person or personsauthorized to act for the Company. In no event shall any such transaction described herein suspend or delay the rights of Plan IIBeneficiaries to receive their vested accrued benefits hereunder.L. Plan II Document. This document, the prospectus to Plan II, the Deferral Election, certain definitions expressly mentionedherein that are defined in the Cypress Semiconductor 401(k) Employee Savings Plan, the Trust Agreement, and any other documentsidentified by the Committee, comprise Plan documents for Plan II.M. Definitions.(1) “Account” means the bookkeeping account established to reflect the interest of a Participant or beneficiary in PlanII.(2) “Bankruptcy Court Approval” means the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A).Document No. 001-92195 Rev. *B 27(3) “Cause” means: (i) Participant’s continued failure to substantially perform Participant’s principal duties andresponsibilities (other than as a result of disability or death) after thirty (30) days written notice from the Company specifying the natureof Participant’s failure and demanding that such failure be remedied; (ii) Participant’s material and continuing breach of his or herobligations to the Company set forth in any written agreement between the Company and Participant or any written policy of theCompany after thirty (30) days written notice from the Company specifying the nature of Participant’s breach and demanding that suchbreach be remedied (unless such breach by its nature cannot be cured, in which case notice and an opportunity to cure shall not berequired); (iii) Participant’s arrest for a felony, fraud or an act of moral turpitude; or (iv) act or acts of dishonesty undertaken byParticipant and intended to result in personal enrichment of Participant at the expense of the Company.(4) “Change of Control Event” means a change in ownership or effective control of the Company or in the ownershipof a substantial portion of the Company’s assets, as defined under Code Section 409A.(5) “Code Section 409A” means Code Section 409A and the proposed or final (as applicable) Treasury regulationsand other official guidance promulgated thereunder.(6) “Corporate Dissolution” means a dissolution of the Company that is taxed under Code Section 331.(7) “Deferral Election” means the documents that encompass the (i) the Deferred Compensation Plan II BeneficiaryDesignation, (ii) the Deferred Compensation Plan II Distribution Election Form, (iii) the Deferred Compensation Plan II ParticipationAgreement and Deferral Election, (iv) the Deferred Compensation Plan II Investment Allocation Form for Future Deferrals, (v) theDeferred Compensation Plan II Investment Allocation Change Form, and (vi) any other documents provided to Participants relating totheir Plan II deferral election decisions.(8) “Disability” means the Participant (i) is unable to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment which can be expected to result in death or can be expected to last for acontinuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mentalimpairment which can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacementbenefits for a period of not less than three (3) months under an accident and health plan covering Company employees.(9) “Domestic Relations Order” means a court order that qualifies as a domestic relations order under Code Section414(p)(1)(B).(10) “FICA Amount” means the aggregate Federal Insurance Contributions Act (FICA) tax imposed on any Accountunder Code Sections 3101, 3121(a) and 3121(v)(2), as applicable and any corresponding tax withholding provisions of applicablestate, local or foreign tax laws as a result of the payment of the FICA amount.(11) “Involuntary Termination” means a Participant’s termination of employment (or for outside director Participants,termination of service as a cBoard Member) with the CompanyDocument No. 001-92195 Rev. *B 28because of the Company’s downsizing and/or restructuring, as determined in the sole discretion of the Committee.(12) “OASDI” means the Old Age, Survivors and Disability Insurance portion of FICA (the “Federal InsuranceContributions Act”).(13) “Plan Year” means the calendar year.(14) “Sales Commissions” means “sales commission compensation” as such term is defined in Treasury Regulation§1.409A-2(a)(12)(i).(15) “Separation From Service” means a separation from service as defined under Code Section 409A. For thispurpose, the employment relationship will be treated as continuing intact while the Participant is on military leave, sick leave or otherbona fide leave of absence, except that if the period of such leave exceeds six (6) months and the Participant does not retain a right toreemployment under an applicable statute or by contract, then the employment relationship will be deemed to have terminated on thefirst day immediately following such 6-month period. A leave of absence constitutes a bona fide leave of absence only if there is areasonable expectation that the Participant will return to perform services for the Employer.(16) “Specified Employee” means a “key employee” as such term is defined in Internal Revenue Code Section 416(i)without regard to paragraph five (5) thereof. As of 2016, this generally includes (i) the top fifty (50) Company officers making at least$200,000 per year, (ii) a 5% owner of the Company, or (iii) a 1% owner of the Company making more than $150,000 per year. Forpurposes of the preceding sentence, “compensation” means compensation as such term is defined in the Company’s 401(k) EmployeeSavings Plan. The determination of whom is a Specified Employee shall be made on December 31 of each year, shall include anyemployee who qualified as a Specified Employee at any time during the preceding twelve-month period and shall be effective on thefollowing April 1.(17) “Unforeseeable Emergency” means a severe financial hardship to Participant resulting from an illness or accidentof Participant, the Participant’s spouse or a dependent of Participant (as defined in Section 152(a) of the Code), loss of Participant’sproperty due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the controlof Participant.(18) “Valuation Date” means, except as otherwise specified by the Committee, (i) for distributions hereunder and forallocations of deferrals and re-allocations of amounts previously deferred, that the Participant’s Account shall be valued as of the lastbusiness day of the week preceding the transaction, and (ii) for permitted plan to plan transfers made prior to January 1, 2009, the lastbusiness day of the Plan Year.CYPRESS SEMICONDUCTORCORPORATIONBy: Document No. 001-92195 Rev. *B 29(Title) Date:__________________Document No. 001-92195 Rev. *B 30Exhibit 10.7.3CYPRESS NON-QUALIFIEDPRE-2005 DEFERRED COMPENSATION PLAN ITABLE OF CONTENTS PageARTICLE I PRE-2005 PLAN I ADMINISTRATION 3ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATION 4ARTICLE III PRE-2005 PLAN I CONTRIBUTIONS AND ALLOCATIONS 5ARTICLE IV VESTING 6ARTICLE V GENERAL DUTIES 7ARTICLE VI PARTICIPANTS’ ACCOUNTS 7ARTICLE VII PAYMENTS TO A PRE-2005 PLAN I PARTICIPANT OR BENEFICIARY 8ARTICLE VIII HARDSHIP DISTRIBUTION 12ARTICLE IX ON-DEMAND DISTRIBUTIONS 13ARTICLE X CLAIMS PROCEDURE 13ARTICLE XI MISCELLANEOUS 17CYPRESS NON-QUALIFIED PRE-2005 DEFERRED COMPENSATION PLAN IThe Cypress Semiconductor Corporation Nonqualified Deferred Compensation Plan, originally effective as of September 1,1995, and thereafter amended, was further amended and restated in its entirety by Cypress Semiconductor Corporation (the“Company”), effective as of January 1, 2002 on behalf of itself and any designated subsidiaries and was renamed the Cypress Non-Qualified Deferred Compensation Plan II (“Pre-2005 Plan II”). Also on January 1, 2002, this Cypress Non-Qualified DeferredCompensation Plan I (herein “Pre-2005 Plan I” or the “Plan”) was adopted by the Company. Pre-2005 Plan I is similar to Pre-2005Plan II except that (i) the phantom investments are different than those available under Pre-2005 Plan II and (ii) beneficiaries of Pre-2005 Plan I participants who die in certain situations will receive a supplemental survivor benefit, described more fully herein. Pre-2005 Plan I and Pre-2005 Plan II were amended effective April 1, 2004 to permit outside directors who are also consultants toparticipate in the Plans. In order to preserve grandfather treatment under Internal Revenue Code Section 409A, the Plans were frozento deferrals on and after January 1, 2005. This Plan has been renamed the Cypress Pre-2005 Non-Qualified Deferred CompensationPlan I, has been frozen to deferrals on and after January 1, 2005, the claims procedures under Article X have been updated to complywith ERISA, this Plan has been amended to make clear phantom Cypress stock is a permitted phantom investment alternative and thenames of the Trustees have been updated, but the Plan has not been materially modified for purposes of Internal Revenue CodeSection 409A. This Plan governs all Plan I deferrals made prior to January 1, 2005 and any earnings and losses thereon. Throughout,the term “Company” shall include wherever relevant any entity that is directly or indirectly controlled by the Company or any entity inwhich the Company has a significant equity or investment interest, or any subsidiary of the Company, as determined by the Company.RECITALS:1. The Company maintains Pre-2005 Plan I for the benefit of a select group of management or highly compensatedemployees designated by the Company.2. Under Pre-2005 Plan I, the Company is obligated to pay vested accrued benefits, and in certain circumstances, asupplemental survivor benefit, to Pre-2005 Plan I Participants and their beneficiary or beneficiaries (“Pre-2005 Plan I Beneficiaries”)from the Company’s general assets.3. The Company has entered into an agreement (the “Trust Agreement”) with American Stock Transfer and Trust Company(the “Trustees”) under an irrevocable trust (the “Trust”) to be used in connection with Pre-2005 Plan I.4. The Company intends to make contributions to the Trust so that such contributions will be held by the Trustees andinvested, reinvested and distributed, all in accordance with the provisions of this Pre-2005 Plan I and the Trust Agreement.5. The Company intends that the assets of the Trust shall at all times be subject to the claims of the general creditors of theCompany as provided in the Trust Agreement.-1-6. The Company intends that the existence of the Trust shall not alter the characterization of Pre-2005 Plan I as “unfunded”for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall not be construed to provideincome to Pre-2005 Plan I Beneficiaries under Pre-2005 Plan I prior to actual payment of the vested accrued benefits thereunder.NOW THEREFORE, the Company does hereby establish Pre-2005 Plan I as follows and does also hereby agree that Pre-2005 Plan I shall be structured, held and disposed of as follows:-2-ARTICLE I PRE-2005 PLAN I ADMINISTRATIONA. The Deferred Compensation Committee of the Company (the “Committee”) administers Pre-2005 Plan I. Subject to thespecific duties delegated by the Board of Directors (the “Board”) to such Committee, the Committee shall be responsible for thegeneral administration and interpretation of Pre-2005 Plan I and for carrying out its provisions. The Committee shall have such powersas may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties:(1) discretionary authority to construe and interpret the terms of Pre-2005 Plan I, and to determine eligibility and theamount, manner and time of payment of any benefits hereunder;(2) to prescribe forms and procedures for purposes of Pre-2005 Plan I participation and distribution of benefits;(3) to direct the Trustees as to the distribution of Pre-2005 Plan I assets; and(4) to take such other action as may be necessary and appropriate for the proper administration of Pre-2005 Plan I.B. The Committee may adopt such rules, regulations and bylaws and may make such decisions as it deems necessary ordesirable for the proper administration of Pre-2005 Plan I. Any rule or decision that is not inconsistent with the provisions of Pre-2005Plan I shall be conclusive and binding upon all persons affected by it, and there shall be no appeal from any ruling by the Committeethat is within its authority, except as otherwise provided herein.C. The Committee shall have the power to (i) identify investment choices for the Trust Fund; and (ii) appoint or employagents, recordkeepers and advisors to assist the Committee in discharging its duties under Pre-2005 Plan I. -3-ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATIONA. Eligible Participants. The following categories of service providers (“Eligible Participants”) shall be eligible to participatein Pre-2005 Plan I: (i) employees who are eligible to participate in the Company’s Key Employee Bonus Plan, (ii) any other employeeor category of employee that is approved by the CEO as eligible to participate in Pre-2005 Plan I, and (iii) non-employee members ofthe Board of Directors who are also paid consultants to the Company. The Committee reserves the right to modify the definition ofEligible Participant at any time with the approval of the CEO. Any Eligible Participant who has commenced participation in Pre-2005Plan I shall be referred to in this Pre-2005 Plan I as a “Participant.” There shall be no new Participants in the Pre-2005 Plan I on andafter January 1, 2005.B. Participation. Prior to January 1, 2005, each Eligible Participant may elect to commence participation in Pre-2005 Plan Iby completing a Cypress Non-Qualified Deferred Compensation Pre-2005 Plan I participation agreement and deferral election no laterthan the last day of his or her Election Period. For purposes of the foregoing, an Eligible Participant’s Election Period shall be definedas: (i) for newly Eligible Participants, the thirty (30) day period measured from the date that the Company notifies in writing suchEligible Participant of his or her eligibility to participate in Pre-2005 Plan I; and (ii) for all other Eligible Participants, no later than thedue date for the enrollment forms during the annual open enrollment period which is from December 1st to December 31st of eachyear (the “Annual Open Enrollment Period”) prior to the beginning of the Plan Year for which the election is effective (the calendaryear is the “Plan Year”). Elections shall remain in effect for successive Plan years until revoked or modified by the Participant in amanner consistent with the rules of Pre-2005 Plan I and the Committee.C. Beneficiary Designation. Prior to January 1, 2005, each Participant, prior to entering Pre-2005 Plan I, may designate abeneficiary or beneficiaries to receive the remainder of any interest of the Participant and any supplemental survivor benefit under Pre-2005 Plan I in the event of the Participant’s death. A Participant may change his or her beneficiary designation at any time bysubmitting a complete and approved form of beneficiary designation (including dated spousal consent, if required pursuant to thebeneficiary designation form) to the Committee (or its designee). Each beneficiary designation shall be in a form prescribed by theCommittee and will be effective only when filed with the Committee (or its designee) during the Participant’s lifetime. Eachbeneficiary designation filed with the Committee will cancel all previously filed beneficiary designations. In the absence of a validdesignation, or if no designated beneficiary survives the Participant, the Participant’s interest shall be distributed to the Participant’sestate.ARTICLE III PRE-2005 PLAN I CONTRIBUTIONS AND ALLOCATIONSA. Participant Deferrals. Prior to January 1, 2005, each Participant participating in Pre-2005 Plan I shall execute aparticipation agreement and deferral election (the “Deferral Election”)-4-authorizing the Company to withhold a percentage amount of the Participant’s Compensation which would otherwise be paid to theParticipant with respect to services rendered. Compensation under Pre-2005 Plan I is defined as the annual base salary (or, for non-employee directors, cash consulting fees, including KEBP bonus), cash bonuses (including key employee bonus, new product bonusand any other cash bonuses), and any cash commissions payable to the Participant in connection with the Participant’s services to theCompany, including all amounts which a Participant elects to have the Company contribute to Pre-2005 Plan I on his or her behalf as adeferral contribution (“Compensation”). A deferral percentage is applied to Compensation after all other applicable payroll deductions(other than a 401(k) wrap) have been applied. Depending on the Participant’s election and the timing of the deferral, the deferralpercentage may also include a SAVE component. The Committee may, in its discretion, establish in the Deferral Election minimumand maximum levels of Compensation that may be deferred pursuant to Pre-2005 Plan I. If the elected deferrals would not leavesufficient cash Compensation to satisfy required deductions under other Company Plans (e.g., 401(k) Plan, group health insuranceplan), then the requested deferrals under this Pre-2005 Plan I may be reduced as necessary to satisfy those deductions. Compensationdeferrals made by a Participant under this Pre-2005 Plan I shall be held as an asset of the Company and the Company intends todeposit the amounts deferred into the Trust; provided, however, if a Participant elects—pursuant to his or her Deferral Election—totransfer designated amounts of Compensation to the Cypress Semiconductor 401(k) Employee Savings Plan and related trust, thensuch amounts shall be held in the Trust until distributed in accordance with Section VII(B). Pre-2005 Plan I is closed to deferrals onand after January 1, 2005.B. Election Changes. Prior to January 1, 2005, a Participant may, in such form and at such time or times as the Committeemay prescribe, discontinue or modify deferral of future Compensation. The Committee has the power to establish uniform andnondiscriminatory rules and from time to time to modify or change such rules governing the manner and method by whichCompensation deferral elections shall be made, as well as the manner and method by which Compensation deferral elections may bechanged or discontinued temporarily or permanently. All Compensation deferral contributions shall be authorized by the Participant inwriting, made by payroll deduction, deducted from the Participant’s Compensation without reduction for any taxes or withholding(except to the extent required by law or regulation) and paid over to the Trust by the Company. Notwithstanding the foregoing, eachParticipant shall remain liable for any and all employment taxes owing with respect to such Participant’s Compensation deferralcontributions.C. Cessation of Eligible Status. Prior to January 1, 2005, in the event a Participant ceases to be an Eligible Participant whilealso a participant in Pre-2005 Plan I, such individual may continue to make Compensation deferral contributions under Pre-2005 Plan Ithrough the end of the payroll period in which the individual ceases to be an Eligible Participant. Thereafter, such individual shall notmake any further Compensation deferral contributions to Pre-2005 Plan I unless or until he or she again meets the eligibilityrequirements of Article II above.D. Company Discretionary Contributions. Prior to January 1, 2005, the Company may, in its sole discretion, makediscretionary contributions to the accounts of one or more Participants at such times and in such amounts as the Board of the Companyshall determine.-5-E. Allocations. The Compensation deferral contributions and any Company contributions made under Pre-2005 Plan I onbehalf of a Participant shall be credited to the Participant’s Account. The Committee shall establish and maintain separate subaccountsas it determines to be necessary and appropriate for the proper administration of Pre-2005 Plan I. The Committee may cause theTrustees to maintain and invest separate asset accounts corresponding to each Participant account. Each Participant Account consists ofthe aggregate interest of the Participant under Pre-2005 Plan I (and in the Trust Fund), as reflected in the records maintained by theCompany for such purposes.F. Plan to Plan Transfers. Subject to the Committee’s discretion, during the annual open enrollment period Participants shallbe allowed to elect to transfer their deemed investment accounts from Pre-2005 Plan II to Pre-2005 Plan I, subject to such limitationsand reallocation requirements as the Committee, in its sole discretion, determines to be appropriate. The plan to plan transfers shall beeffective as of the first day of the following Plan Year.ARTICLE IV VESTINGA. Compensation Deferral Contributions. The value of a Participant’s Account attributable to Participants’ Compensationdeferral contributions shall always be fully vested and nonforfeitable.B. Company Contributions. The value of a Participant’s Account attributable to any Company contributions pursuant toArticle III.D shall vest at such time or times as the Board may specify in connection with any such contributions. In the absence ofBoard specification, a Participant’s interest in Company contributions shall be fully vested and nonforfeitable. Upon termination of aParticipant’s employment (or for outside director Participants, upon the later of their termination of service as a Board member orconsultant) with the Company for any reason, any portion of the Participant’s Account that is not then vested (including allocableearnings, as determined by the Committee), shall be forfeited. Unless otherwise determined by the Board or the Committee, forfeituresshall be used to satisfy the Company’s obligation to remit contributions to the Trust under Pre-2005 Plan I.-6-ARTICLE V GENERAL DUTIESA. Committee Duties. The Committee will provide the Trustees with a copy of any future amendment to this Pre-2005 Plan Ipromptly upon its adoption. The Committee may from time to time hire outside consultants, accountants, actuaries, legal counsel orrecordkeepers to perform such tasks as the Committee may from time to time determine.B. Trustees’ Duties. The Trustees shall invest and reinvest the Trust Fund as provided in the Trust Agreement. The Trusteesshall collect the income on the Trust Fund, and make distributions therefrom, as provided in this Pre-2005 Plan I and in the TrustAgreement.C. Company Contributions. While Pre-2005 Plan I remains in effect, and prior to a Change in Control, as defined below, theCompany shall make contributions to the Trust Fund at least once each quarter. The amount of any quarterly contributions shall be atthe discretion of the Company. At the close of each calendar year, the Company shall make an additional contribution to the TrustFund to the extent that previous contributions to the Trust Fund for the current calendar year are not equal to the total of theCompensation deferrals made by each Participant plus Company discretionary contributions, if any, accrued, as of the close of thecurrent calendar year. The Trustees shall not be liable for any failure by the Company to provide contributions sufficient to pay allaccrued benefits under Pre-2005 Plan I in full in accordance with the terms of Pre-2005 Plan I.D. Department of Labor Determination. In the event that any Participants are found to be ineligible, that is, not members of aselect group of management or highly compensated employees, according to a determination made by the Department of Labor, theCommittee will take whatever steps it deems necessary, in its sole discretion, to equitably protect the interests of the affectedParticipants.ARTICLE VI PARTICIPANTS’ ACCOUNTSA. Separate Accounts. The Committee shall open and maintain a separate Account for each Participant. Each Participant’sAccount shall reflect the amounts allocated thereto and distributed therefrom and such other information as affects the value of suchAccount pursuant to this Pre-2005 Plan I.B. Timing of Account Credit. Amounts deferred under Pre-2005 Plan I shall be credited to a Participant’s Account withinfive business days following the date upon which such amounts would otherwise have been paid to the Participant.C. Statement of Accounts. As soon as practicable after the end of each calendar year the Committee shall furnish to eachParticipant a statement of Account, determined as of the end of such calendar year. Upon the discovery of any error or miscalculationin an Account, the Committee shall correct it, to the extent correction is practically feasible; provided, however, that any such statement-7-of Account shall be considered to reflect accurately the status of the Participant’s Account for all purposes under Pre-2005 Plan Iunless the Participant reports a discrepancy to the Committee within six (6) months after receipt of the statement. The Committee shallhave no obligation to make adjustments to a Participant’s Account for any discrepancy reported to the Committee more than six (6)months after receipt of the statement, or for a discrepancy caused by the Participant’s error. Statements to Participants are for reportingpurposes only, and no allocation, valuation or statement shall vest any right or title in any part of the Trust Fund, nor require anysegregation of Trust assets, except as is specifically provided in this Pre-2005 Plan I.D. Distribution of Accounts. Payment to a Participant shall be based on the value of the vested portion of the Participant’sAccount as of the Valuation Date immediately preceding the date of distribution plus any contribution subsequently credited to suchAccount and less any distributions subsequently made from the Account.ARTICLE VII PAYMENTS TO A PRE-2005 PLAN I PARTICIPANT OR BENEFICIARYA. General. Payments of vested accrued benefits to Pre-2005 Plan I Beneficiaries from the Trust shall be made in accordancewith the distribution event specified by the Participant in the Deferral Election between the Company and the Participant (the“Distribution Event”). Except as otherwise expressly provided in the Participant’s Deferral Election and as set forth in Article VIIbelow, no distribution shall be made or commenced prior to the time and manner as set forth in the Participant’s Deferral Election.B. Upon Retirement or Total Disability. If a Participant’s employment (or for outside director Participants, service as a Boardmember or consultant) with the Company terminates (i) by virtue of Participant’s Total Disability (as defined under Section 22(e)(3) ofthe Internal Revenue Code and as determined in the sole discretion of the Committee), or (ii) pursuant to Participant’s retirement (a) atage 65 or greater, or (b) at age 55 or greater but with at least ten full years of continuous employment (or for outside directorParticipants, ten full years of continuous service as a Board member or consultant) by the Company (either case shall be referred to inthis Pre-2005 Plan I as “Retirement”), then Participant shall receive, pursuant to the election selected in his or her timely submittedDeferral Election a distribution of his or her Account balance in (i) a lump-sum, (ii) a partial lump-sum combined with up to fifteenyears of annual payments, or (iii) two to fifteen years of annual payments, each such payment equal to 1/n of the Participant’s vestedaccrued benefit where n is the number of installments remaining to be paid, (an “Annual Payment”).C. Upon Death. If a Participant’s employment (or for outside director Participants, service as a Board member or consultant)terminates due to his or her death, or if a Participant dies while on a leave of absence where re-employment (or for outside directorParticipants, their re-commencement of service as a Board member or consultant) with the Company is not guaranteed by contract orstatute, then the Participant’s beneficiary will receive their Account balance in either a lump-sum or in five Annual Payments, asspecified in the Participant’s Deferral Election.-8-D. Supplemental Survivor Benefit. If a Participant dies while actively employed (or for outside director Participants, whileactively engaged in service as a Board member or consultant) by the Company or on a Company-approved leave of absence, then, inaddition to the account distribution provided for in Section VII(C) above, his or her beneficiary shall receive a taxable survivor benefitequal to two times the total amount deferred into Pre-2005 Plan I through the date of death, including certain amounts deferred underPre-2005 Plan II that were transferred to Pre-2005 Plan I (as described below), and excluding certain distributions (as described below)up to a total maximum benefit, including any supplemental survivor benefit under Plan I governing deferrals on and after January 1,2005, of three million dollars ($3,000,000). For the purpose of determining the amount of the supplemental survivor benefit, earningsor losses on deferrals are not included. Any Pre-2005 Plan I distributions prior to death shall reduce the Plan deferral balance by a prorata amount, calculated as of the distribution Valuation Date. Any Pre-2005 Plan II transfers to Pre-2005 Plan I shall carry a pro ratacredit for Pre-2005 Plan II deferrals. For this purpose, Pre-2005 Plan II deferrals will be reduced by distributions similarly to Pre-2005Plan I. For purposes of calculating Plan deferrals, amounts transferred to the Cypress Semiconductor 401(k) Employee Savings Planand related trust shall be deducted from their Plan Deferral balance; provided, however, that if a Participant dies prior to the scheduledtransfer to the Cypress Semiconductor 401(k) Employee Savings Plan, the amounts subsequently transferred shall not be deductedfrom their Plan Deferral balance for purposes of calculating the Supplemental Survivor Benefit. For purposes of valuing PlanDistributions, any 6% penalty pursuant to Section IX hereof shall be included in calculating the total amount distributed.Example I: Participant A defers $1,750,000 to Pre-2005 Plan I. This appreciates to $2,000,000. Participant A then dies whileemployed by the Company. Because the Supplemental Survivor Benefit is capped at $3,000,000, her beneficiary receives a$3,000,000 Supplemental Survivor Benefit.Example II: Participant A defers $100,000 into Pre-2005 Plan II. This appreciates to $130,000, at which time it is transferred toPre-2005 Plan I. Participant A then defers $25,000 into Pre-2005 Plan I. Subsequently, Participant A’s Pre-2005 Plan I total accountvalue declines to $80,000 based upon her phantom investments diminishing in value. Participant A dies while on a Company-approvedleave of absence. Due to Participant A’s $100,000 Pre-2005 Plan II transfer deferral credit, and her $25,000 deferral credit under Pre-2005 Plan I, her beneficiary receives a $250,000 Supplemental Survivor Benefit.Example III: Participant A defers $100,000 into Pre-2005 Plan II. This depreciates to $65,000, at which time it is transferred toPre-2005 Plan I. Participant A then defers $25,000 into Pre-2005 Plan I. Subsequently, Participant A’s Pre-2005 Plan I total accountvalue declines to $40,000 based upon her phantom investments diminishing in value. Participant dies while on a Company-approvedleave of absence. Due to Participant A’s $100,000 Pre-2005 Plan II transfer deferral credit, and her $25,000 deferral credit under Pre-2005 Plan I, her beneficiary receives a $250,000 Supplemental Survivor Benefit.Example IV: Participant B has deferred $150,000 into Pre-2005 Plan II. The Pre-2005 Plan II account appreciates to $250,000,at which time $125,000 is transferred to Pre-2005 Plan I.-9-Participant B thereafter defers $30,000 to Pre-2005 Plan I. The Pre-2005 Plan I account subsequently appreciates to $235,000, atwhich time Participant B receives a scheduled $110,000 in-service distribution from Pre-2005 Plan I. Subsequently Participant B’s Pre-2005 Plan I account appreciates to $150,000, at which time Participant B dies while employed by the Company.•The Pre-2005 Plan II transfer deferral credit equals $75,000, because the total deferrals under Pre-2005 Plan II at thetime of distribution were $150,000, and because the transfer of 50% of the Pre-2005 Plan II balance results in a pro rata50% transfer of the Pre-2005 Plan II deferral credit.•The Total Pre-2005 Plan I deferrals equal $30,000.•At the time of the distribution, the total Pre-2005 Plan I deferral credit is $105,000 = Pre-2005 Plan II transfer credit of$75,000 plus Pre-2005 Plan I deferrals of $30,000.•The $110,000 Pre-2005 Plan I distribution results in a pro rata reduction in the Pre-2005 Plan I deferral credit. The$110,000 distribution is divided by the then Total Pre-2005 Plan I account value of $235,000 resulting in .468. Becausedistributions result in a pro rata reduction of deferral credit, .468 is multiplied by the total Pre-2005 Plan I deferral creditof $105,000 = $49,140. This amount is reduced from the Total Pre-2005 Plan I deferral credit ($105,000 - $49,140)resulting in a post-distribution Total Pre-2005 Plan I deferral credit of $55,860.•Upon Participant B’s death, his beneficiary receives a Supplemental Survivor Benefit equal to 2 x $55,860 = $111,720.Example V: Participant C defers $1,400,000 to Pre-2005 Plan I. Participant C terminates her employment with the Company.Shortly thereafter, Participant C dies. Because on her date of death Participant C was neither actively employed by the Company noron a Company-approved leave of absence, her beneficiary does not receive a Supplemental Survivor Benefit.E. Change of Control. In the event of a “Change of Control,” the Committee may, in its sole discretion, decide to distributeall Account balances in a lump-sum promptly following the Change of Control. For purposes of this Pre-2005 Plan I, a “Change inControl” shall be deemed to have occurred if any person (including a “Group” as such term is used in Section 13(d)(3) of the SecuritiesExchange Act of 1934) acquires shares of the Company either (i) having a majority of the total number of votes that may be cast forthe election of directors of the Company or (ii) possessing, directly or indirectly, the power to control the direction of management orpolicies of the Company; provided, however, that no Change of Control shall be deemed to occur in the event of a merger,consolidation or reorganization of the Company where the shareholders of the Company are substantially the same as before suchmerger, consolidation or reorganization. The Trustees shall have no responsibility to determine whether a Change in Control hasoccurred and shall be advised of such event by the Company.-10-F. Prior to Retirement or for Cause. In the event a Participant is terminated involuntarily for Cause (as determined by theCommittee in its sole discretion), or in the event that his or her employment (or for outside director Participants, the later of terminationof service as a Board member or consultant) terminates voluntarily prior to Retirement, then his or her Account balance shall bedistributed in a lump-sum within 60 days following such termination.G. Involuntary Termination Due to Company Downsizing, Restructuring or Adverse Business Conditions. In the event aParticipant is terminated due to a Company down-sizing or restructuring or adverse business conditions (as determined by theCommittee in its sole discretion), then the Participant will receive their Account balance in either a lump-sum or in five AnnualPayments, as specified in the Participant’s Deferral Election.H. Scheduled In-Service Distribution. A Participant may elect, as provided in his or her Participant Deferral Election, toreceive one or more scheduled in-service (i.e., while employed by the Company, or, for outside director Participants, while serving as aBoard member or consultant) distributions from their Account balance without an early withdrawal penalty. Any such distributionsmust be at least two full Plan Years following the date of the Participant’s Deferral Election. Each scheduled in-service distributionmay be postponed (but only once) at least one full year in advance of the scheduled distribution to a later date or cancelled bysubmitting the appropriate form to the Company or its designated administrator. If a Participant specifies that a dollar amount will bedistributed and the Account balance is less than the dollar amount, then the entire Account will be distributed. A Participant mayincrease or decrease the amount or percentage specified for an in-service distribution by submitting the appropriate form at any timeprior to twelve months in advance of the scheduled in-service distribution. In the event a Participant terminates employment (or foroutside director Participants, the later of termination of service as a Board member or consultant) with the Company prior to ascheduled in-service distribution, the in-service distribution election shall be without further force and effect and the applicabletermination distribution provisions of the plan and the Participant’s Deferral Election shall control.I. Method of Distribution. Except as specified otherwise in this Section VII, payment to any Pre-2005 Plan I BeneficiaryPursuant to Pre-2005 Plan I shall be made (i) in accordance with the Deferral Election executed by the Participant, (ii) in cash, (iii) in alump sum or in Annual Payments. Notwithstanding the foregoing, if elected by the Participant in his or her Deferral Election and ifdirected by the Committee, the Trustees shall pay to the trustee of the Cypress Semiconductor 401(k) Employee Savings Plan theaggregate amount of elected transfers, but only to the extent that the transferred amount would constitute a deductible employercontribution pursuant to Code Sections 401 and 404 for the year for which they were initially contributed to Pre-2005 Plan I. TheCommittee will make the determination as to whether such amounts constitute deductible contributions pursuant to Code Section 401and 404.J. Distributions From Trust; Withholding. Unless the Trustees do not require this, with respect to each Participant, theCompany shall deliver to the Trustees a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of theParticipant (and his or her-11-beneficiaries), that provides a formula or other instructions acceptable to the Trustees for determining the amounts so payable, the formin which such amount is to be paid and the time of commencement for payment of such amounts. The Payment Schedule shall bedelivered to the Trustees not fewer than 15 days prior to the first date on which a payment is to be made to the Participant. Any changeto a Payment Schedule shall be delivered to the Trustees not fewer than 15 days prior to the date on which the first payment is to bemade in accordance with the changed Payment Schedule. Except as otherwise provided herein, the Trustees shall cause the Companyor the Trust to make payments to Participants and their beneficiaries in accordance with such Payment Schedule. The Trustees shallmake provisions for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respectto the payment of Pre-2005 Plan I benefits and shall pay amounts withheld to the appropriate taxing authorities or determine that suchamounts have been reported, withheld and paid by the Company, it being understood among the parties hereto that the Company shallon a timely basis provide the Trustees specific information as to the amount of taxes from the Trustees and properly pay and reportsuch withheld taxes from the Trustees and properly pay and report such amounts to the appropriate taxing authorities.K. Certain Distributions. In case of any distribution to a minor or to a legally incompetent person, the Committee may(1) direct the Trustees to make the distribution to his legal representative, to a designated relative, or directly to such person for hisbenefit, or (2) instruct the Trustees to use the distribution directly for his support, maintenance, or education. The Trustees shall not berequired to oversee the application, by any third party, of any distributions made pursuant to this Article.L. IRS Determination. Notwithstanding any other provisions of this Pre-2005 Plan I, if any amounts held in the Trust arefound in a “determination” (within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended (the “Code”)),to have been includible in the gross income of any Trust Beneficiary prior to payment of such amounts from the Trust, the Trusteesshall, as soon as practicable pay such amounts to the Trust Beneficiary, as directed by the Company. For purposes of this Section, theTrustees shall be entitled to written notice from the Committee that a determination described in the preceding sentence has occurredand to receive a copy of such notice. The Trustees shall have no responsibility until so advised by the Committee.M. Phantom Cypress Stock. Distributions of accounts with allocations credited to phantom Cypress stock shall be made incash.ARTICLE VIII HARDSHIP DISTRIBUTIONIf a Participant suffers a financial hardship, as such term is defined in the Cypress Semiconductor 401(k) Plan, the Participantmay, with the approval of the Committee, receive an in-service distribution from his or her Account equal to the amount needed tosatisfy such hardship. In the event a Participant receives a hardship distribution pursuant to this Article, such Participant shall beexcluded from participating in Pre-2005 Plan I and Pre-2005 Plan II for the balance of Plan Year in which the Participant receivedpayment pursuant to a request for a hardship distribution. A-12-Participant requesting a hardship distribution shall apply for the payment in writing on a form approved by the Committee and shallprovide such additional information as the Committee may require.ARTICLE IX ON-DEMAND DISTRIBUTIONSA. On-Demand Distribution While Providing Service. At any time while a Participant in Pre-2005 Plan I while employed by(or, for outside director Participants, while providing service as a Board member or Consultant to) the Company, a Participant mayrequest to receive a distribution of not less than twenty-five percent (25%) of the Participant’s Account. Such on-demand distributionshall be subject to a penalty equal to six percent (6%) of the amount distributed to the Participant as an on-demand distribution. In theevent a Participant received an on-demand distribution pursuant to this Article prior to January 1, 2003, such Participant shall not beeligible to participate in Pre-2005 Plan I (i) for the Plan Year in which the Participant received payment pursuant to a request for an on-demand distribution, and (ii) for the Plan Year following the Plan Year in which the Participant received payment pursuant to a requestfor an on-demand distribution. In the event a Participant receives an on-demand distribution pursuant to this Article on or after January1, 2003, such Participant shall not be eligible to participate in Pre-2005 Plan I for the greater of (i) six months, or (ii) the remainder ofthe Plan Year in which the Participant received payment pursuant to a request for an on-demand distribution. Moreover, a Participantmay not receive an on-demand distribution more frequently than once every two years. A Participant requesting an on-demanddistribution shall apply for the payment in writing on a form approved by the Committee and shall provide such additional informationas the Committee may require.B. On-Demand Distribution Following Service. Following a Participant’s termination of employment (or for outside directorParticipants, the later of termination of service as a Board member or consultant), a Participant who is otherwise scheduled to receive apayment over time may request to receive a distribution of the balance of his or her Account. Such on-demand distribution shall besubject to a penalty equal to six percent (6%) of the amount distributed to the Participant as an on-demand distribution. A Participantrequesting an on-demand distribution shall apply for the payment in writing on a form approved by the Committee and shall providesuch additional information as the Committee may require.ARTICLE X CLAIMS PROCEDURE1. Claims and Review Procedures. (a) Purpose. Every Participant or Beneficiary (or his or her representative who is authorized in writing by theClaimant to act on his or her behalf) (hereinafter collectively, “Claimant”) shall be entitled to file with the Committee (and subsequentlywith the individual(s) designated to review claims appealed after being initially denied by the Committee (the “Review-13-Panel”)) a written claim for benefits under the Plan. The Committee and Review Panel shall each be able to establish such rules,policies and procedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its duties andresponsibilities under this Article 10. In the case of a denial of the claim, the Committee or Review Panel, as applicable, shall providethe Claimant with a written or electronic notification that complies with Department of Labor Regulation Section 2520.104b-1(c)(1).(b) Denial of Claim. If a claim is denied by the Committee (or its authorized representative), in whole or inpart, then the Claimant shall be furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based;(iii) description of any additional material or information necessary for the Claimant to perfect theclaim a, and an explanation of why the material or information is necessary; and(iv) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial onreview (as set forth in Section 10(3) below).The denial notice shall be furnished to the Claimant no later than ninety (90)-days after receipt of the claim by the Committee, unlessthe Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determinesthat an extension of time for processing is required, then notice of the extension shall be furnished to the Claimant prior to thetermination of the initial ninety (90)-day period. In no event shall such extension exceed a period of ninety (90)-days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.2. Claim Review Procedure. The Claimant may request review of the denial at any time within sixty (60) daysfollowing the date the Claimant received notice of the denial of his or her claim. The Committee shall afford the Claimant a full and fairreview of the decision denying the claim and, if so requested, shall:(i) provide the Claimant with the opportunity to submit written comments, documents, records andother information relating to the claim for benefits;(ii) provide that the Claimant shall be provided, upon request and free of charge, reasonable accessto, and copies of, all documents, records and other information-14-(other than documents, records and other information that is legally-privileged) relevant to the Claimant’s claim for benefits; and(iii) provide for a review that takes into account all comments, documents, records and otherinformation submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered inthe initial benefit determination.3. If the claim is subsequently also denied by the Review Panel, in whole or in part, then the Claimant shall befurnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based; and(iii) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following the denial onreview.4. The decision on review shall be issued within sixty (60) days following receipt of the request for review. Theperiod for decision may, however, be extended up to one hundred twenty (120) days after such receipt if the Review Panel determinesthat special circumstances require extension. In the case of an extension, notice of the extension shall be furnished to the Claimant priorto the expiration of the initial sixty (60)-day period. In no event shall such extension exceed a period of sixty (60) days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.5. Special Procedure for Claims Due to Disability. To the extent an application for distribution as a result of aDisability requires the Committee or the Review Panel, as applicable, to make a determination of Disability under the terms of the Plan,then such determination shall be subject to all of the general rules described in this Article, except as they are expressly modified bythis Section.(i) The initial decision on the claim for a Disability distribution will be made within forty-five (45)days after the Plan receives the Claimant’s claim, unless special circumstances require additional time, in which case the Committeewill notify the Claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, theCommittee may notify the Claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension of up to thirty(30) days. If an extension is due to the Claimant’s failure to supply the necessary information, then the notice of extension will describethe additional information and the Claimant will have forty-five (45) days to provide the additional information. Moreover, the periodfor making the determination will be delayed from the date the notification of extension was sent out until the Claimant responds to therequest for additional information. No additional extensions may be made, except with the Claimant’s voluntary consent.-15-The contents of the notice shall be the same as described in Section 10(1)(b) above. If a disability distribution claim is denied in wholeor in part, then the Claimant will receive notification, as described in Section 10(1)(b).(ii) If an internal rule, guideline, protocol or similar criterion is relied upon in making the adversedetermination, then the denial notice to the Claimant will either set forth the internal rule, guideline, protocol or similar criterion, or willstate that such was relied upon and will be provided free of charge to the Claimant upon request (to the extent not legally-privileged)and if the Claimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then theClaimant will be provided a statement either explaining the decision or indicating that an explanation will be provided to the Claimantfree of charge upon request.(iii) Any Claimant whose application for a Disability distribution is denied in whole or in part, mayappeal the denial by submitting to the Review Panel a request for a review of the application within one hundred and eighty (180) daysafter receiving notice of the denial. The request for review shall be in the form and manner prescribed by the Review Panel. In theevent of such an appeal for review, the provisions of Section 10(2) regarding the Claimant’s rights and responsibilities shall apply.Upon request, the Review Panel will identify any medical or vocational expert whose advice was obtained on behalf of the ReviewPanel in connection with the denial, without regard to whether the advice was relied upon in making the determination. The entity orindividual appointed by the Review Panel to review the claim will consider the appeal de novo, without any deference to the initialdenial. The review will not include any person who participated in the initial denial or who is the subordinate of a person whoparticipated in the initial denial.(iv) If the initial Disability distribution denial was based in whole or in part on a medical judgment,then the Review Panel will consult with a health care professional who has appropriate training and experience in the field of medicineinvolved in the medical judgment, and who was neither consulted in connection with the initial determination nor is the subordinate ofany person who was consulted in connection with that determination; and upon notifying the Claimant of an adverse determination onreview, include in the notice either an explanation of the clinical basis for the determination, applying the terms of the Plan to theClaimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request.(v) A decision on review shall be made promptly, but not later than forty-five (45) days afterreceipt of a request for review, unless special circumstances require an extension of time for processing. If an extension is required, theClaimant will be notified before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipateddate that the review will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of arequest for review. The Review Panel shall give notice of its decision to the Claimant; such notice shall comply with the requirementsset forth in paragraph (h) above. In addition, if the Claimant’s claim was denied based on a medical necessity or experimental treatmentor similar exclusion, then the Claimant will be provided a statement explaining the-16-decision, or a statement providing that such explanation will be furnished to the Claimant free of charge upon request. The notice shallalso contain the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such asmediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your Stateinsurance regulatory agency.”ARTICLE XI MISCELLANEOUSA. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable rights, claims, or interests in any specific property or assets of the Company. No assets of the Company shall be held in anyway as collateral security for the fulfilling of the obligations of the Company under this Pre-2005 Plan I. Any and all of the assets ofthe Company shall be, and remain, the general unpledged, unrestricted assets of the Company. The obligation of the Company underPre-2005 Plan I shall be merely that of an unfunded and unsecured promise to pay money in the future, and the rights of theParticipants and Beneficiaries shall be no greater than those of unsecured general creditors.B. Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or personsdesignated by Pre-2005 Plan I and not to any other person or corporation. No part of a Participant’s Account shall be liable for thedebts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Accountbe subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such personhave any right to alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any mannerwhatsoever. If any Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell,transfer, assign, pledge, encumber or charge any distribution or payment from Pre-2005 Plan I, voluntarily or involuntarily, theCommittee, in its sole and absolute discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit ofsuch Participant, Beneficiary or successor in interest in such manner as the Committee shall direct.C. Withholding. There shall be deducted from each payment made under Pre-2005 Plan I, all taxes that are required to bewithheld by the Company, as applicable, in respect to such payment. The Company shall have the right to reduce any payment by theamount of cash sufficient to provide the amount of said taxes.D. Legal Representation. The Company will reimburse all reasonable legal fees and expenses incurred by a Pre-2005 Plan IBeneficiary in seeking to obtain or enforce any right or benefit provided by Pre-2005 Plan I. This reimbursement right applies only toclaims made after a Change of Control and only for fees and expenses incurred after a Pre-2005 Plan I Beneficiary has exhausted theclaims and appeals procedure specified in Article IX. No reimbursement shall be made if the request is found to be frivolous by a courtof competent jurisdiction.E. Amendment, Modification, Suspension or Termination. The Committee may amend, modify, suspend or terminate Pre-2005 Plan I in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect toreduce any amounts allocated to a Participant’s Account, provided that a termination or suspension of Pre-2005 Plan I or any Pre-2005Plan I amendment or modification that will significantly increase costs to the Company shall be approved by the Board. In the eventthat this Pre-2005 Plan I is terminated, the timing of the disposition of the amounts credited to a Participant’s Account shall occur inaccordance with Article VII, subject to earlier distribution at the discretion of the Committee.F. Governing Law. This Pre-2005 Plan I shall be construed, governed and administered in accordance with the internalsubstantive laws of the State of California (other than the choice of law principles).G. Receipt or Release. Any payment to a Pre-2005 Plan I Beneficiary in accordance with the provisions of Pre-2005 Plan Ishall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may requiresuch Pre-2005 Plan I Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.H. Payments on Behalf of Persons under Incapacity. In the event that any amount becomes payable under Pre-2005 Plan I toa person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give avalid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its solejudgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full releaseand discharge of the Committee and the Company.I. No Employment or Other Rights. Participation in this Pre-2005 Plan I shall not confer upon any person any right to beemployed by the Company (or for outside director Participants, any right to remain in service as a Board member or consultant) or anyother right not expressly provided hereunder.J. Headings, etc. Not Part of Agreement. Headings and subheadings in this Pre-2005 Plan I are inserted for convenience ofreference only and are not to be considered in the construction of the provisions hereof.K. Successorship. This Pre-2005 Plan I shall be binding upon and inure to the benefit of any successor to the Company or itsbusiness as the result of merger, consolidation, reorganization, transfer of assets or otherwise, and any subsequent successor thereto;and any such successor shall be deemed to be the “Company” under this Pre-2005 Plan I. In the event of any such merger,consolidation, reorganization, transfer of assets or other similar transaction, the successor to the Company or its business or anysubsequent successor thereto shall promptly notify the Trustees in writing of its successorship and furnish the Trustees with the nameor names of any person or persons authorized to act for the Company. In no event shall any such transaction described herein suspendor delay the rights of Pre-2005 Plan I Beneficiaries to receive their vested accrued benefits hereunder.-17-L. Pre-2005 Plan I Document. This document, the prospectus to Pre-2005 Plan I, the Deferral Election, certain definitionsexpressly mentioned herein that are defined in the Cypress Semiconductor Employee 401(k) Plan, the Trust Agreement, and any otherdocuments identified by the Committee, comprise the Plan documents for Pre-2005 Plan I.M. Definitions. (1) “Account” means the bookkeeping account established to reflect the interest of a Participant or beneficiary in Pre-2005 Plan I.(2) “Cause” means: (i) Participant’s continued failure to substantially perform Participant’s principal duties andresponsibilities (other than as a result of disability or death) after thirty (30) days written notice from the Company specifying the natureof Participant’s failure and demanding that such failure be remedied; (ii) Participant’s material and continuing breach of his or herobligations to the Company set forth in any written agreement between the Company and Participant or any written policy of theCompany after thirty (30) days written notice from the Company specifying the nature of Participant’s breach and demanding that suchbreach be remedied (unless such breach by its nature cannot be cured, in which case notice and an opportunity to cure shall not berequired); (iii) Participant’s arrest for a felony, fraud or an act of moral turpitude; or (iv) act or acts of dishonesty undertaken byParticipant and intended to result in personal enrichment of Participant at the expense of the Company.(3) “Deferral Election” means the documents that encompass the (i) Deferred Compensation Plans’ BeneficiaryDesignation, (ii) Deferred Compensation Plans’ Distribution Election Form, (iii) Deferred Compensation Plans’ ParticipationAgreement and Deferral Election, (iv) the Deferred Compensation Plan Manulife Investment Allocation Form for Future Deferrals,(v) the Deferred Compensation Plan Manulife Investment Allocation Change Form, (vi) the In-Service Distribution Change Form, (vii)the Accelerated Distribution Election Form, (viii) the Election to Stop Contribution Form, and (ix) any other documents designated bythe Committee as encompassing the Deferral Election.(4) “Involuntary Termination” means a Participant’s termination of employment (or for outside director Participants,termination of service as a consultant) with the Company because of the Company’s downsizing and/or restructuring, as determined inthe sole discretion of the Committee.(5) “OASDI” means the Old Age, Survivors and Disability Insurance portion of FICA (the “Federal InsuranceContributions Act”).(6) “Plan Year” means the calendar year.(7) “SAVE” means “Set Aside Voluntary Earnings” and refers to the Participant’s election to increase the rate of hisor her Plan deferral by an amount equal to the amount of OASDI that would have been withheld from their Compensation had theynot reached the OASDI wage base cap (e.g., $87,900 in 2004) in a particular calendar year.-18-(8) “Valuation Date” means, except as otherwise specified by the Committee, (i) for distributions hereunder and forallocations of deferrals and re-allocations of amounts previously deferred, that the Participant’s Account shall be valued as of the lastbusiness day of the week preceding the transaction, and (ii) for permitted Pre-2005 Plan II to Pre-2005 Plan I transfers, the last businessday of the Plan Year.CYPRESS SEMICONDUCTORCORPORATIONBy: (Title) Date: ___________________, 2009-19-Exhibit 10.7.4CYPRESS NON-QUALIFIEDPRE-2005 DEFERRED COMPENSATION PLAN IITABLE OF CONTENTS PageARTICLE I PRE-2005 PLAN II ADMINISTRATION 3ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATION 3ARTICLE III PRE-2005 PLAN II CONTRIBUTIONS AND ALLOCATIONS 4ARTICLE IV VESTING 6ARTICLE V GENERAL DUTIES 6ARTICLE VI PARTICIPANTS’ ACCOUNTS 7ARTICLE VII PAYMENTS TO A PRE-2005 PLAN II PARTICPANT OR BENEFICIARY 7ARTICLE VIII HARDSHIP DISTRIBUTION 10ARTICLE IX ON-DEMAND DISTRIBUTIONS 10ARTICLE X CLAIMS PROCEDURE 11ARTICLE XI MISCELLANEOUS 14() -ii-CYPRESS PRE-2005 NON-QUALIFIED DEFERRED COMPENSATION PLAN IIThe Cypress Semiconductor Corporation Nonqualified Deferred Compensation Plan, originally effective as of September 1,1995, and thereafter amended, was further amended and restated in its entirety by Cypress Semiconductor Corporation (the“Company”), effective as of January 1, 2002 on behalf of itself and any designated subsidiaries and was renamed the Cypress Non-Qualified Deferred Compensation Pre-2005 Plan II (“Pre-2005 Plan II”). Also on January 1, 2002, the Cypress Non-QualifiedDeferred Compensation Plan I (herein “Pre-2005 Plan I” or the “Plan”) was adopted by the Company. Pre-2005 Plan I is similar toPre-2005 Plan II except that (i) the phantom investments are different than those available under Pre-2005 Plan II, and (ii) beneficiariesof Pre-2005 Plan I participants who die in certain situations will receive a supplemental survivor benefit. Pre-2005 Plan I and Pre-2005Plan II were amended effective April 1, 2004 to permit outside directors who are also consultants to participate in the Plans. In order topreserve grandfather treatment under Internal Revenue Code Section 409A, the Plans were frozen to deferrals on and after January 1,2005. This Plan has been renamed the Cypress Pre-2005 Non-Qualified Deferred Compensation Plan II, has been frozen to deferralson and after January 1, 2005, the claims procedures under Article X have been updated to comply with ERISA, this Plan has beenamended to make clear phantom Cypress stock is a permitted phantom investment alternative and the names of the Trustees have beenupdated, but the Plan has not been materially modified for purposes of Internal Revenue Code Section 409A. This Plan governs allPlan I deferrals made prior to January 1, 2005 and any earnings and losses thereon. Throughout, the term “Company” shall includewherever relevant any entity that is directly or indirectly controlled by the Company or any entity in which the Company has asignificant equity or investment interest, or any subsidiary of the Company, as determined by the Company.RECITALS:1. The Company maintains Pre-2005 Plan II for the benefit of a select group of management or highly compensatedemployees designated by the Company.2. Under Pre-2005 Plan II, the Company is obligated to pay vested accrued benefits to Pre-2005 Plan II Participants and theirbeneficiary or beneficiaries (“Pre-2005 Plan II Beneficiaries”) from the Company’s general assets.3. The Company has entered into an agreement (the “Trust Agreement”) with American Stock Transfer and Trust Company(the “Trustees”) under an irrevocable trust (the “Trust”) to be used in connection with Pre-2005 Plan II.4. The Company intends to make contributions to the Trust so that such contributions will be held by the Trustees andinvested, reinvested and distributed, all in accordance with the provisions of this Pre-2005 Plan II and the Trust Agreement.5. The Company intends that the assets of the Trust shall at all times be subject to the claims of the general creditors of theCompany as provided in the Trust Agreement.()6. The Company intends that the existence of the Trust shall not alter the characterization of Pre-2005 Plan II as “unfunded”for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and shall not be construed to provideincome to Pre-2005 Plan II Beneficiaries under Pre-2005 Plan II prior to actual payment of the vested accrued benefits thereunder.NOW THEREFORE, the Company does hereby establish Pre-2005 Plan II as follows and does also hereby agree that Pre-2005 Plan II shall be structured, held and disposed of as follows:-2-ARTICLE I PRE-2005 PLAN II ADMINISTRATIONA. The Deferred Compensation Committee of the Company (the “Committee”) administers Pre-2005 Plan II. Subject to thespecific duties delegated by the Board of Directors (the “Board”) to such Committee, the Committee shall be responsible for thegeneral administration and interpretation of Pre-2005 Plan II and for carrying out its provisions. The Committee shall have such powersas may be necessary to discharge its duties hereunder, including, but not by way of limitation, the following powers and duties:(1) discretionary authority to construe and interpret the terms of Pre-2005 Plan II, and to determine eligibility and theamount, manner and time of payment of any benefits hereunder;(2) to prescribe forms and procedures for purposes of Pre-2005 Plan II participation and distribution of benefits;(3) to direct the Trustees as to the distribution of Pre-2005 Plan II assets; and(4) to take such other action as may be necessary and appropriate for the proper administration of Pre-2005 Plan II.B. The Committee may adopt such rules, regulations and bylaws and may make such decisions as it deems necessary ordesirable for the proper administration of Pre-2005 Plan II. Any rule or decision that is not inconsistent with the provisions of Pre-2005Plan II shall be conclusive and binding upon all persons affected by it, and there shall be no appeal from any ruling by the Committeethat is within its authority, except as otherwise provided herein.C. The Committee shall have the power to (i) identify investment choices for the Trust Fund; and (ii) appoint or employagents, recordkeepers and advisors to assist the Committee in discharging its duties under Pre-2005 Plan II.ARTICLE II ELIGIBILITY, PARTICIPATION, AND BENEFICIARY DESIGNATIONA. Eligible Participants. The following categories of service providers (“Eligible Participants”) shall be eligible to participatein Pre-2005 Plan II: (i) employees who are eligible to participate in the Company’s Key Employee Bonus Plan, (ii) any other employeeor category of employee that is approved by the CEO as eligible to participate in Pre-2005 Plan II, and (iii) non-employee members ofthe Board of Directors who are also paid consultants to the Company. The Committee reserves the right to modify the definition ofEligible Participant at any time with the approval of the CEO. Any Eligible Participant who has commenced participation in Pre-2005Plan II shall be referred to in this Pre-2005 Plan II as a “Participant.” There shall be no new Participants in the Pre-2005 Plan II on andafter January 1, 2005.-3-B. Participation. Prior to January 1, 2005, each Eligible Participant may elect to commence participation in Pre-2005 Plan IIby completing a Cypress Non-Qualified Deferred Compensation Pre-2005 Plan II participation agreement and deferral election no laterthan the last day of his or her Election Period. For purposes of the foregoing, an Eligible Participant’s Election Period shall be definedas: (i) for newly Eligible Participants, the thirty (30) day period measured from the date that the Company notifies in writing suchEligible Participant of his or her eligibility to participate in Pre-2005 Plan II; and (ii) for all other Eligible Participants, no later than thedue date for the enrollment forms during the annual open enrollment period which is from December 1st to December 31st of eachyear (the “Annual Open Enrollment Period”) prior to the beginning of Plan Year for which the election is effective (the calendar year isthe “Plan Year”). Elections shall remain in effect for successive Plan Years until revoked or modified by the Participant in a mannerconsistent with the rules of Pre-2005 Plan II and the Committee.C. Beneficiary Designation. Prior to January 1, 2005, each Participant, prior to entering Pre-2005 Plan II, may designate abeneficiary or beneficiaries to receive the remainder of any interest of the Participant under Pre-2005 Plan II in the event of theParticipant’s death. A Participant may change his or her beneficiary designation at any time by submitting a complete and approvedform of beneficiary designation (including dated spousal consent, if required pursuant to the beneficiary designation form) to theCommittee (or its designee). Each beneficiary designation shall be in a form prescribed by the Committee and will be effective onlywhen filed with the Committee (or its designee) during the Participant’s lifetime. Each beneficiary designation filed with the Committeewill cancel all previously filed beneficiary designations. In the absence of a valid designation, or if no designated beneficiary survivesthe Participant, the Participant’s interest shall be distributed to the Participant’s estate.ARTICLE III PRE-2005 PLAN II CONTRIBUTIONS AND ALLOCATIONSA. Participant Deferrals. Prior to January 1, 2005, each Participant participating in Pre-2005 Plan II shall execute aparticipation agreement and deferral election (the “Deferral Election”) authorizing the Company to withhold a percentage amount ofthe Participant’s Compensation which would otherwise be paid to the Participant with respect to services rendered. Compensationunder Pre-2005 Plan II is defined as the annual base salary (or, for non-employee directors, cash consulting fees, including KEBPbonus), cash bonuses (including key employee bonus, new product bonus and any other cash bonuses), and any cash commissionspayable to the Participant in connection with the Participant’s services to the Company, including all amounts which a Participantelects to have the Company contribute to Pre-2005 Plan II on his or her behalf as a deferral contribution (“Compensation”). A deferralpercentage is applied to Compensation after all other applicable payroll deductions (other than a 401(k) wrap) have been applied.Depending on the Participant’s election and the timing of the deferral, the deferral percentage may also include a SAVE component.The Committee may, in its discretion, establish in the Deferral Election minimum and maximum levels of Compensation that may bedeferred pursuant to Pre-2005 Plan II. If the elected deferrals would not leave sufficient cash Compensation to satisfy requireddeductions under other Company Plans (e.g., 401(k) Plan, group health insurance plan), then the requested deferrals under this-4-Pre-2005 Plan II may be reduced as necessary to satisfy those deductions. Compensation deferrals made by a Participant under thisPre-2005 Plan II shall be held as an asset of the Company and the Company intends to deposit the amounts deferred into the Trust;provided, however, if a Participant elects—pursuant to his or her Deferral Election—to transfer designated amounts of Compensationto the Cypress Semiconductor 401(k) Employee Savings Plan and related trust, then such amounts shall be held in the Trust untildistributed in accordance with Section VII(B).B. Election Changes. Prior to January 1, 2005, a Participant may, in such form and at such time or times as the Committeemay prescribe, discontinue or modify deferral of future Compensation. The Committee has the power to establish uniform andnondiscriminatory rules and from time to time to modify or change such rules governing the manner and method by whichCompensation deferral elections shall be made, as well as the manner and method by which Compensation deferral elections may bechanged or discontinued temporarily or permanently. All Compensation deferral contributions shall be authorized by the Participant inwriting, made by payroll deduction, deducted from the Participant’s Compensation without reduction for any taxes or withholding(except to the extent required by law or regulation) and paid over to the Trust by the Company. Notwithstanding the foregoing, eachParticipant shall remain liable for any and all employment taxes owing with respect to such Participant’s Compensation deferralcontributions.C. Cessation of Eligible Status. Prior to January 1, 2005, in the event a Participant ceases to be an Eligible Participant whilealso a participant in Pre-2005 Plan II, such individual may continue to make Compensation deferral contributions under Pre-2005 PlanII through the end of the payroll period in which the individual ceases to be an Eligible Participant. Thereafter, such individual shall notmake any further Compensation deferral contributions to Pre-2005 Plan II unless or until he or she again meets the eligibilityrequirements of Article II above.D. Company Discretionary Contributions. Prior to January 1, 2005, the Company may, in its sole discretion, makediscretionary contributions to the accounts of one or more Participants at such times and in such amounts as the Board of the Companyshall determine.E. Allocations. The Compensation deferral contributions and any Company contributions made under Pre-2005 Plan II onbehalf of a Participant shall be credited to the Participant’s Account. The Committee shall establish and maintain separate subaccountsas it determines to be necessary and appropriate for the proper administration of Pre-2005 Plan II. The Committee may cause theTrustees to maintain and invest separate asset accounts corresponding to each Participant account. Each Participant Account consists ofthe aggregate interest of the Participant under Pre-2005 Plan II (and in the Trust Fund), as reflected in the records maintained by theCompany for such purposes.F. Plan to Plan Transfers. Subject to the Committee’s discretion, during the annual open enrollment period Participants shallbe allowed to elect to transfer their deemed investment accounts from Pre-2005 Plan II to Plan I, subject to such limitations andreallocation requirements as the Committee, in its sole discretion, determines to be appropriate. The plan to plan transfers shall beeffective as of the first day of the following Plan Year.-5-ARTICLE IV VESTINGA. Compensation Deferral Contributions. The value of a Participant’s Account attributable to Participants’ Compensationdeferral contributions shall always be fully vested and nonforfeitable.B. Company Contributions. The value of a Participant’s Account attributable to any Company contributions pursuant toArticle III.D shall vest at such time or times as the Board may specify in connection with any such contributions. In the absence ofBoard specification, a Participant’s interest in Company contributions shall be fully vested and nonforfeitable. Upon termination of aParticipant’s employment (or for outside director Participants, upon the later of their termination of service as a Board member orconsultant) with the Company for any reason, any portion of the Participant’s Account that is not then vested (including allocableearnings, as determined by the Committee), shall be forfeited. Unless otherwise determined by the Board or the Committee, forfeituresshall be used to satisfy the Company’s obligation to remit contributions to the Trust under Pre-2005 Plan II.ARTICLE V GENERAL DUTIESA. Committee Duties. The Committee will provide the Trustees with a copy of any future amendment to this Pre-2005 PlanII promptly upon its adoption. The Committee may from time to time hire outside consultants, accountants, actuaries, legal counsel orrecordkeepers to perform such tasks as the Committee may from time to time determine.B. Trustees’ Duties. The Trustees shall invest and reinvest the Trust Fund as provided in the Trust Agreement. The Trusteesshall collect the income on the Trust Fund, and make distributions therefrom, as provided in this Pre-2005 Plan II and in the TrustAgreement.C. Company Contributions. While Pre-2005 Plan II remains in effect, and prior to a Change in Control, as defined below,the Company shall make contributions to the Trust Fund at least once each quarter. The amount of any quarterly contributions shall beat the discretion of the Company. At the close of each calendar year, the Company shall make an additional contribution to the TrustFund to the extent that previous contributions to the Trust Fund for the current calendar year are not equal to the total of theCompensation deferrals made by each Participant plus Company discretionary contributions, if any, accrued, as of the close of thecurrent calendar year. The Trustees shall not be liable for any failure by the Company to provide contributions sufficient to pay allaccrued benefits under Pre-2005 Plan II in full in accordance with the terms of Pre-2005 Plan II.D. Department of Labor Determination. In the event that any Participants are found to be ineligible, that is, not members of aselect group of management or highly compensated employees, according to a determination made by the Department of Labor, theCommittee will take whatever-6-steps it deems necessary, in its sole discretion, to equitably protect the interests of the affected Participants.ARTICLE VI PARTICIPANTS’ ACCOUNTSA. Separate Accounts. The Committee shall open and maintain a separate Account for each Participant. Each Participant’sAccount shall reflect the amounts allocated thereto and distributed therefrom and such other information as affects the value of suchAccount pursuant to this Pre-2005 Plan II.B. Timing of Account Credit. Amounts deferred under Plan I shall be credited to a Participant’s Account within five businessdays following the date upon which such amounts would otherwise have been paid to the Participant.C. Statement of Accounts. As soon as practicable after the end of each calendar year the Committee shall furnish to eachParticipant a statement of Account, determined as of the end of such calendar year. Upon the discovery of any error or miscalculationin an Account, the Committee shall correct it, to the extent correction is practically feasible; provided, however, that any such statementof Account shall be considered to reflect accurately the status of the Participant’s Account for all purposes under Pre-2005 Plan IIunless the Participant reports a discrepancy to the Committee within six (6) months after receipt of the statement. The Committee shallhave no obligation to make adjustments to a Participant’s Account for any discrepancy reported to the Committee more than six (6)months after receipt of the statement, or for a discrepancy caused by the Participant’s error. Statements to Participants are for reportingpurposes only, and no allocation, valuation or statement shall vest any right or title in any part of the Trust Fund, nor require anysegregation of Trust assets, except as is specifically provided in this Pre-2005 Plan II.D. Distribution of Accounts. Payment to a Participant shall be based on the value of the vested portion of the Participant’sAccount as of the Valuation Date immediately preceding the date of distribution plus any contribution subsequently credited to suchAccount and less any distributions subsequently made from the Account.ARTICLE VII PAYMENTS TO A PRE-2005 PLAN II PARTICPANT OR BENEFICIARYA. General. Payments of vested accrued benefits to Pre-2005 Plan II Beneficiaries from the Trust shall be made inaccordance with the distribution event specified by the Participant in the Deferral Election between the Company and the Participant(the “Distribution Event”). Except as otherwise expressly provided in the Participant’s Deferral Election and as set forth in Article VIIbelow, no distribution shall be made or commenced prior to the time and manner as set forth in the Participant’s Deferral Election.-7-B. Upon Retirement or Total Disability. If a Participant’s employment (or for outside director Participants, service as a Boardmember or consultant) with the Company terminates (i) by virtue of Participant’s Total Disability (as defined under Section 22(e)(3) ofthe Internal Revenue Code and as determined in the sole discretion of the Committee), or (ii) pursuant to Participant’s retirement (a) atage 65 or greater, or (b) at age 55 or greater but with at least ten full years of continuous employment (or for outside directorParticipants, ten full years of continuous service as a Board member or consultant) by the Company (either case shall be referred to inthis Pre-2005 Plan II as “Retirement”), then Participant shall receive, pursuant to the election selected in his or her timely submittedDeferral Election a distribution of his or her Account balance in (i) a lump-sum, (ii) a partial lump-sum combined with up to fifteenyears of annual payments, or (iii) two to fifteen years of annual payments, each such payment equal to 1/n of the Participant’s vestedaccrued benefit where n is the number of installments remaining to be paid, (an “Annual Payment”).C. Upon Death. If a Participant’s employment (or for outside director Participants, service as a Board member or consultant)terminates due to his or her death, or if a Participant dies while on a leave of absence where re-employment (or for outside directorParticipants, their re-commencement of service as a Board member or consultant) with the Company is not guaranteed by contract orstatute, then the Participant’s beneficiary will receive their Account balance in either a lump-sum or in five Annual Payments, asspecified in the Participant’s Deferral Election.D. Change of Control. In the event of a “Change of Control,” the Committee may, in its sole discretion, decide to distributeall Account balances in a lump-sum promptly following the Change of Control. For purposes of this Pre-2005 Plan II, a “Change inControl” shall be deemed to have occurred if any person (including a “Group” as such term is used in Section 13(d)(3) of the SecuritiesExchange Act of 1934) acquires shares of the Company either (i) having a majority of the total number of votes that may be cast forthe election of directors of the Company or (ii) possessing, directly or indirectly, the power to control the direction of management orpolicies of the Company; provided, however, that no Change of Control shall be deemed to occur in the event of a merger,consolidation or reorganization of the Company where the shareholders of the Company are substantially the same as before suchmerger, consolidation or reorganization. The Trustees shall have no responsibility to determine whether a Change in Control hasoccurred and shall be advised of such event by the Company.E. Prior to Retirement or for Cause. In the event a Participant is terminated involuntarily for Cause (as determined by theCommittee in its sole discretion), or in the event that his or her employment (or for outside director Participants, the later of terminationof service as a Board member or consultant) terminates voluntarily prior to Retirement, then his or her Account balance shall bedistributed in a lump-sum within 60 days following such termination.F. Involuntary Termination Due to Company Downsizing, Restructuring or Adverse Business Conditions. In the event aParticipant is terminated due to a Company down-sizing or restructuring or adverse business conditions (as determined by theCommittee in its sole discretion), then the Participant will receive their Account balance in either a lump-sum or in five AnnualPayments, as specified in the Participant’s Deferral Election.-8-G. Scheduled In-Service Distribution. A Participant may elect, as provided in his or her Participant Deferral Election, toreceive one or more scheduled in-service (i.e., while employed by the Company, or, for outside director Participants, while serving as aBoard member or consultant) distributions from their Account balance without an early withdrawal penalty. Any such distributionsmust be at least two full Plan Years following the date of the Participant’s Deferral Election. Each scheduled in-service distributionmay be postponed (but only once) at least one full year in advance of the scheduled distribution to a later date or cancelled bysubmitting the appropriate form to the Company or its designated administrator. If a Participant specifies that a dollar amount will bedistributed and the Account balance is less than the dollar amount, then the entire Account will be distributed. A Participant mayincrease or decrease the amount or percentage specified for an in-service distribution by submitting the appropriate form at any timeprior to twelve months in advance of the scheduled in-service distribution. In the event a Participant terminates employment (or foroutside director Participants, the later of termination of service as a Board member or consultant) with the Company prior to ascheduled in-service distribution, the in-service distribution election shall be without further force and effect and the applicabletermination distribution provisions of the plan and the Participant’s Deferral Election shall control.H. Method of Distribution. Except as specified otherwise in this Section VII, payment to any Pre-2005 Plan II BeneficiaryPursuant to Pre-2005 Plan II shall be made (i) in accordance with the Deferral Election executed by the Participant, (ii) in cash, (iii) in alump sum or in Annual Payments. Notwithstanding the foregoing, if elected by the Participant in his or her Deferral Election and ifdirected by the Committee, the Trustees shall pay to the trustee of the Cypress Semiconductor 401(k) Employee Savings Plan theaggregate amount of elected transfers, but only to the extent that the transferred amount would constitute a deductible employercontribution pursuant to Code Sections 401 and 404 for the year for which they were initially contributed to Pre-2005 Plan II. TheCommittee will make the determination as to whether such amounts constitute deductible contributions pursuant to Code Section 401and 404.I. Distributions From Trust; Withholding. Unless the Trustees do not require this, with respect to each Participant, theCompany shall deliver to the Trustees a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of theParticipant (and his or her beneficiaries), that provides a formula or other instructions acceptable to the Trustees for determining theamounts so payable, the form in which such amount is to be paid and the time of commencement for payment of such amounts. ThePayment Schedule shall be delivered to the Trustees not fewer than 15 days prior to the first date on which a payment is to be made tothe Participant. Any change to a Payment Schedule shall be delivered to the Trustees not fewer than 15 days prior to the date on whichthe first payment is to be made in accordance with the changed Payment Schedule. Except as otherwise provided herein, the Trusteesshall cause the Company or the Trust to make payments to Participants and their beneficiaries in accordance with such PaymentSchedule. The Trustees shall make provisions for the reporting and withholding of any federal, state or local taxes that may be requiredto be withheld with respect to the payment of Pre-2005 Plan II benefits and shall pay amounts withheld to the appropriate taxingauthorities or determine that such amounts have been reported, withheld and paid by the Company, it being understood among theparties hereto that the Company shall on a timely basis provide the Trustees specific information as-9-to the amount of taxes from the Trustees and properly pay and report such withheld taxes from the Trustees and properly pay andreport such amounts to the appropriate taxing authorities.J. Certain Distributions. In case of any distribution to a minor or to a legally incompetent person, the Committee may(1) direct the Trustees to make the distribution to his legal representative, to a designated relative, or directly to such person for hisbenefit, or (2) instruct the Trustees to use the distribution directly for his support, maintenance, or education. The Trustees shall not berequired to oversee the application, by any third party, of any distributions made pursuant to this Article.K. IRS Determination. Notwithstanding any other provisions of this Pre-2005 Plan II, if any amounts held in the Trust arefound in a “determination” (within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended (the “Code”)),to have been includible in the gross income of any Trust Beneficiary prior to payment of such amounts from the Trust, the Trusteesshall, as soon as practicable pay such amounts to the Trust Beneficiary, as directed by the Company. For purposes of this Section, theTrustees shall be entitled to written notice from the Committee that a determination described in the preceding sentence has occurredand to receive a copy of such notice. The Trustees shall have no responsibility until so advised by the Committee.ARTICLE VIII HARDSHIP DISTRIBUTIONIf a Participant suffers a financial hardship, as such term is defined in the Cypress Semiconductor 401(k) Plan, the Participantmay, with the approval of the Committee, receive an in-service distribution from his or her Account equal to the amount needed tosatisfy such hardship. In the event a Participant receives a hardship distribution pursuant to this Article, such Participant shall beexcluded from participating in Plan I and Pre-2005 Plan II for the balance of the Plan Year in which the Participant received paymentpursuant to a request for a hardship distribution. A Participant requesting a hardship distribution shall apply for the payment in writingon a form approved by the Committee and shall provide such additional information as the Committee may require.ARTICLE IX ON-DEMAND DISTRIBUTIONSA. On-Demand Distribution While Providing Service. At any time while a Participant in Pre-2005 Plan II while employedby (or, for outside director Participants, while providing service as a Board member or Consultant to) the Company, a Participant mayrequest to receive a distribution of not less than twenty-five percent (25%) of the Participant’s Account. Such on-demand distributionshall be subject to a penalty equal to six percent (6%) of the amount distributed to the Participant as an on-demand distribution. In theevent a Participant receives an on-demand distribution pursuant to this Article prior to January 1, 2003, such Participant shall not beeligible to participate in Pre-2005 Plan II (i) for the Plan Year in which the Participant received payment-10-pursuant to a request for an on-demand distribution, and (ii) for the Plan Year following the Plan Year in which the Participantreceived payment pursuant to a request for an on-demand distribution. In the event a Participant receives an on-demand distributionpursuant to this Article on or after January 1, 2003, such Participant shall not be eligible to participate in Plan I for the greater of (i) sixmonths, or (ii) the remainder of the Plan Year in which the Participant received payment pursuant to a request for an on-demanddistribution. Moreover, a Participant may not receive an on-demand distribution more frequently than once every two years. AParticipant requesting an on-demand distribution shall apply for the payment in writing on a form approved by the Committee and shallprovide such additional information as the Committee may require.B. On-Demand Distribution Following Employment. Following a Participant’s termination of employment (or for outsidedirector Participants, the later of termination of service as a Board member or consultant), a Participant who is otherwise scheduled toreceive a payment over time may request to receive a distribution of the balance of his or her Account. Such on-demand distributionshall be subject to a penalty equal to six percent (6%) of the amount distributed to the Participant as an on-demand distribution. AParticipant requesting an on-demand distribution shall apply for the payment in writing on a form approved by the Committee and shallprovide such additional information as the Committee may require.ARTICLE X CLAIMS PROCEDURE1. Claims and Review Procedures. (a) Purpose. Every Participant or Beneficiary (or his or her representative who is authorized in writing by theClaimant to act on his or her behalf) (hereinafter collectively, “Claimant”) shall be entitled to file with the Committee (and subsequentlywith the individual(s) designated to review claims appealed after being initially denied by the Committee (the “Review Panel”)) awritten claim for benefits under the Plan. The Committee and Review Panel shall each be able to establish such rules, policies andprocedures, consistent with ERISA and the Plan, as it may deem necessary or appropriate in carrying out its duties and responsibilitiesunder this Article 10. In the case of a denial of the claim, the Committee or Review Panel, as applicable, shall provide the Claimantwith a written or electronic notification that complies with Department of Labor Regulation Section 2520.104b-1(c)(1).(b) Denial of Claim. If a claim is denied by the Committee (or its authorized representative), in whole or in part,then the Claimant shall be furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based;-11-(iii) a description of any additional material or information necessary for the Claimant to perfect theclaim, and an explanation of why the material or information is necessary; and(iv) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following a denial onreview (as set forth in Section 10(d) below).The denial notice shall be furnished to the Claimant no later than ninety (90)-days after receipt of the claim by the Committee, unlessthe Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determinesthat an extension of time for processing is required, then notice of the extension shall be furnished to the Claimant prior to thetermination of the initial ninety (90)-day period. In no event shall such extension exceed a period of ninety (90)-days from the end ofsuch initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by whichthe Plan expects to render the benefits determination.(c) Claim Review Procedure. The Claimant may request review of the denial at any time within sixty (60)days following the date the Claimant received notice of the denial of his or her claim. The Committee shall afford the Claimant a fulland fair review of the decision denying the claim and, if so requested, shall:(i) provide the Claimant with the opportunity to submit written comments, documents, records andother information relating to the claim for benefits;(ii) provide that the Claimant shall be provided, upon request and free of charge, reasonable accessto, and copies of, all documents, records and other information (other than documents, records and other information that is legally-privileged) relevant to the Claimant’s claim for benefits; and(iii) provide for a review that takes into account all comments, documents, records and otherinformation submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered inthe initial benefit determination.(d) If the claim is subsequently also denied by the Review Panel, in whole or in part, then the Claimant shallbe furnished with a denial notice that shall contain the following:(i) specific reason(s) for the denial;(ii) reference to the specific Plan provision(s) on which the denial is based; and(iii) an explanation of the Plan’s claims review procedure and the time limits applicable to suchprocedures, including a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following the denial onreview.-12-(e) The decision on review shall be issued within sixty (60) days following receipt of the request for review.The period for decision may, however, be extended up to one hundred twenty (120) days after such receipt if the Review Paneldetermines that special circumstances require extension. In the case of an extension, notice of the extension shall be furnished to theClaimant prior to the expiration of the initial sixty (60)-day period. In no event shall such extension exceed a period of sixty (60) daysfrom the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and thedate by which the Plan expects to render the benefits determination.(f) Special Procedure for Claims Due to Disability. To the extent an application for distribution as a result of aDisability requires the Committee or the Review Panel, as applicable, to make a determination of Disability under the terms of the Plan,then such determination shall be subject to all of the general rules described in this Article, except as they are expressly modified bythis Section.(i) The initial decision on the claim for a Disability distribution will be made within forty-five (45)days after the Plan receives the Claimant’s claim, unless special circumstances require additional time, in which case the Committeewill notify the Claimant before the end of the initial forty-five (45)-day period of an extension of up to thirty (30) days. If necessary, theCommittee may notify the Claimant, prior to the end of the initial thirty (30)-day extension period, of a second extension of up to thirty(30) days. If an extension is due to the Claimant’s failure to supply the necessary information, then the notice of extension will describethe additional information and the Claimant will have forty-five (45) days to provide the additional information. Moreover, the periodfor making the determination will be delayed from the date the notification of extension was sent out until the Claimant responds to therequest for additional information. No additional extensions may be made, except with the Claimant’s voluntary consent. The contentsof the notice shall be the same as described in Section 10(b) above. If a disability distribution claim is denied in whole or in part, thenthe Claimant will receive notification, as described in Section 10(b).(g) If an internal rule, guideline, protocol or similar criterion is relied upon in making the adversedetermination, then the denial notice to the Claimant will either set forth the internal rule, guideline, protocol or similar criterion, or willstate that such was relied upon and will be provided free of charge to the Claimant upon request (to the extent not legally-privileged)and if the Claimant’s claim was denied based on a medical necessity or experimental treatment or similar exclusion or limit, then theClaimant will be provided a statement either explaining the decision or indicating that an explanation will be provided to the Claimantfree of charge upon request.(h) Any Claimant whose application for a Disability distribution is denied in whole or in part, may appeal thedenial by submitting to the Review Panel a request for a review of the application within one hundred and eighty (180) days afterreceiving notice of the denial. The request for review shall be in the form and manner prescribed by the Review Panel. In the event ofsuch an appeal for review, the provisions of Section 10(c) regarding the Claimant’s rights and responsibilities shall apply. Uponrequest, the Review Panel will identify any medical or vocational expert whose advice was obtained on behalf of the Review Panel inconnection with the denial,-13-without regard to whether the advice was relied upon in making the determination. The entity or individual appointed by the ReviewPanel to review the claim will consider the appeal de novo, without any deference to the initial denial. The review will not include anyperson who participated in the initial denial or who is the subordinate of a person who participated in the initial denial.(i) If the initial Disability distribution denial was based in whole or in part on a medical judgment, then theReview Panel will consult with a health care professional who has appropriate training and experience in the field of medicineinvolved in the medical judgment, and who was neither consulted in connection with the initial determination nor is the subordinate ofany person who was consulted in connection with that determination; and upon notifying the Claimant of an adverse determination onreview, include in the notice either an explanation of the clinical basis for the determination, applying the terms of the Plan to theClaimant’s medical circumstances, or a statement that such explanation will be provided free of charge upon request.(j) A decision on review shall be made promptly, but not later than forty-five (45) days after receipt of arequest for review, unless special circumstances require an extension of time for processing. If an extension is required, the Claimantwill be notified before the end of the initial forty-five (45)-day period that an extension of time is required and the anticipated date thatthe review will be completed. A decision will be given as soon as possible, but not later than ninety (90) days after receipt of a requestfor review. The Review Panel shall give notice of its decision to the Claimant; such notice shall comply with the requirements set forthin paragraph (h) above. In addition, if the Claimant’s claim was denied based on a medical necessity or experimental treatment orsimilar exclusion, then the Claimant will be provided a statement explaining the decision, or a statement providing that suchexplanation will be furnished to the Claimant free of charge upon request. The notice shall also contain the following statement: “Youand your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may beavailable is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency.”ARTICLE XI MISCELLANEOUSA. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal orequitable rights, claims, or interests in any specific property or assets of the Company. No assets of the Company shall be held in anyway as collateral security for the fulfilling of the obligations of the Company under this Pre-2005 Plan II. Any and all of the assets ofthe Company shall be, and remain, the general unpledged, unrestricted assets of the Company. The obligation of the Company underPre-2005 Plan II shall be merely that of an unfunded and unsecured promise to pay money in the future, and the rights of theParticipants and Beneficiaries shall be no greater than those of unsecured general creditors.B. Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or personsdesignated by Pre-2005 Plan II and not to any other person or corporation. No part of a Participant’s Account shall be liable for thedebts, contracts, or-14-engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Account be subject toexecution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any rightto alienate, anticipate, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If anyParticipant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, assign, pledge,encumber or charge any distribution or payment from Pre-2005 Plan II, voluntarily or involuntarily, the Committee, in its sole andabsolute discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiaryor successor in interest in such manner as the Committee shall direct.C. Withholding. There shall be deducted from each payment made under Pre-2005 Plan II, all taxes that are required to bewithheld by the Company, as applicable, in respect to such payment. The Company shall have the right to reduce any payment by theamount of cash sufficient to provide the amount of said taxes.D. Legal Representation. The Company will reimburse all reasonable legal fees and expenses incurred by a Pre-2005 Plan IIBeneficiary in seeking to obtain or enforce any right or benefit provided by Pre-2005 Plan II. This reimbursement right applies only toclaims made after a Change of Control and only for fees and expenses incurred after the Pre-2005 Plan II Beneficiary has exhaustedthe claims and appeals procedure specified in Article IX. No reimbursement shall be made if the request is found to be frivolous by acourt of competent jurisdiction.E. Amendment, Modification, Suspension or Termination. The Committee may amend, modify, suspend or terminate Pre-2005 Plan II in whole or in part, except that no amendment, modification, suspension or termination shall have any retroactive effect toreduce any amounts allocated to a Participant’s Account, provided that a termination or suspension of Pre-2005 Plan II or any Pre-2005 Plan II amendment or modification that will significantly increase costs to the Company shall be approved by the Board. In theevent that this Pre-2005 Plan II is terminated, the timing of the disposition of the amounts credited to a Participant’s Account shalloccur in accordance with Article VII, subject to earlier distribution at the discretion of the Committee.F. Governing Law. This Pre-2005 Plan II shall be construed, governed and administered in accordance with the internalsubstantive laws of the State of California (other than the choice of law principles).G. Receipt or Release. Any payment to a Pre-2005 Plan II Beneficiary in accordance with the provisions of Pre-2005 Plan IIshall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may requiresuch Pre-2005 Plan II Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect.H. Payments on Behalf of Persons under Incapacity. In the event that any amount becomes payable under Pre-2005 Plan IIto a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give avalid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its-15-sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a fullrelease and discharge of the Committee and the Company.I. No Employment or Other Rights. Participation in this Pre-2005 Plan II shall not confer upon any person any right to beemployed by the Company (or for outside director Participants, any right to remain in service as a Board member or consultant) or anyother right not expressly provided hereunder.J. Headings, etc. Not Part of Agreement. Headings and subheadings in this Pre-2005 Plan II are inserted for convenience ofreference only and are not to be considered in the construction of the provisions hereof.K. Successorship. This Pre-2005 Plan II shall be binding upon and inure to the benefit of any successor to the Company orits business as the result of merger, consolidation, reorganization, transfer of assets or otherwise, and any subsequent successor thereto;and any such successor shall be deemed to be the “Company” under this Pre-2005 Plan II. In the event of any such merger,consolidation, reorganization, transfer of assets or other similar transaction, the successor to the Company or its business or anysubsequent successor thereto shall promptly notify the Trustees in writing of its successorship and furnish the Trustees with the nameor names of any person or persons authorized to act for the Company. In no event shall any such transaction described herein suspendor delay the rights of Pre-2005 Plan II Beneficiaries to receive their vested accrued benefits hereunder.L. Pre-2005 Plan II Document. This document, the prospectus to Pre-2005 Plan II, the Deferral Election, certain definitionsexpressly mentioned herein that are defined in the Cypress Semiconductor Employee 401(k) Plan, the Trust Agreement, and any otherdocuments identified by the Committee, comprise Plan documents for Pre-2005 Plan II.M. Definitions. (1) “Account” means the bookkeeping account established to reflect the interest of a Participant or beneficiary in Pre-2005 Plan II.(2) “Cause” means: (i) Participant’s continued failure to substantially perform Participant’s principal duties andresponsibilities (other than as a result of disability or death) after thirty (30) days written notice from the Company specifying the natureof Participant’s failure and demanding that such failure be remedied; (ii) Participant’s material and continuing breach of his or herobligations to the Company set forth in any written agreement between the Company and Participant or any written policy of theCompany after thirty (30) days written notice from the Company specifying the nature of Participant’s breach and demanding that suchbreach be remedied (unless such breach by its nature cannot be cured, in which case notice and an opportunity to cure shall not berequired); (iii) Participant’s arrest for a felony, fraud or an act of moral turpitude; or (iv) act or acts of dishonesty undertaken byParticipant and intended to result in personal enrichment of Participant at the expense of the Company-16-(3) “Deferral Election” means the documents that encompass the (i) Deferred Compensation Plans’ BeneficiaryDesignation, (ii) Deferred Compensation Plans’ Distribution Election Form, (iii) Deferred Compensation Plans’ ParticipationAgreement and Deferral Election, (iv) the Deferred Compensation Pre-2005 Plan II Manulife Investment Allocation Form for FutureDeferrals, (v) the Deferred Compensation Pre-2005 Plan II Manulife Investment Allocation Change Form, (vi) the In-ServiceDistribution Change Form, (vii) the Accelerated Distribution Election Form, (viii) the Election to Stop Contribution Form, and (ix) anyother documents designated by the Committee as encompassing the Deferral Election.(4) “Involuntary Termination” means a Participant’s termination of employment (or for outside directorParticipants, termination of service as a consultant) with the Company because of the Company’s downsizing and/or restructuring, asdetermined in the sole discretion of the Committee.(5) “OASDI” means the Old Age, Survivors and Disability Insurance portion of FICA (the “Federal InsuranceContributions Act”).(6) “Plan Year” means the calendar year.(7) “SAVE” means “Set Aside Voluntary Earnings” and refers to the Participant’s election to increase the rate ofhis or her Plan deferral by an amount equal to the amount of OASDI that would have been withheld from their Compensation had theynot reached the OASDI wage base cap (e.g., $87,900 in 2004) in a particular calendar year.(8) “Valuation Date” means, except as otherwise specified by the Committee, (i) for distributions hereunder and forallocations of deferrals and re-allocations of amounts previously deferred, that the Participant’s Account shall be valued as of the lastbusiness day of the week preceding the transaction, and (ii) for permitted Pre-2005 Plan II to Plan I transfers, the last business day ofthe Plan Year.CYPRESS SEMICONDUCTORCORPORATIONBy: (Title) Date: __________________________, 2009-17-Exhibit 21.1Subsidiaries of Cypress Semiconductor CorporationName:Jurisdiction of Incorporation or Formation:5200 Ben White Condominiums Association, Inc.Texas (USA)AgigA Tech (Chengdu) LLCChinaAgigA Tech (Mauritius) LLCMauritiusAgigA Tech, Inc.Delaware (USA)Cirrent, LLCDelaware (USA)Cypress Innovates G.K.JapanCypress International, LLCDelaware (USA)Cypress Manufacturing, Ltd.Cayman IslandsCypress Manufacturing, Ltd. - Philippines BranchPhilippinesCypress Semiconductor (Canada), Inc.CanadaCypress Semiconductor (France) SASFranceCypress Semiconductor (Malaysia) Sdn. Bhd.MalaysiaCypress Semiconductor (Mauritius) LLCMauritiusCypress Semiconductor (Scandinavia) ABSwedenCypress Semiconductor (Scandinavia) Aktiebolag filial i FinlandFinlandCypress Semiconductor (Switzerland) SarlSwitzerlandCypress Semiconductor (Thailand) LimitedThailandCypress Semiconductor (UK) LimitedUnited KingdomCypress Semiconductor GmbHGermanyCypress Semiconductor Hong Kong Private LimitedHong KongCypress Semiconductor International Sales B.V.NetherlandsCypress Semiconductor International, Inc.Delaware (USA)Cypress Semiconductor IrelandIrelandCypress Semiconductor Ireland LimitedIrelandCypress Semiconductor Italia S.r.l.ItalyCypress Semiconductor Korea Ltd.South KoreaCypress Semiconductor México S. de R.L. de C.V.MexicoCypress Semiconductor Philippines Headquarters, Ltd.Cayman IslandsCypress Semiconductor Singapore Pte. LtdSingaporeCypress Semiconductor Singapore Pte. Ltd. Taiwan BranchTaiwan, Province Of ChinaCypress Semiconductor Technology (Shanghai) Co., Ltd.ChinaCypress Semiconductor Technology (Shanghai) Co., Ltd. Beijing BranchChinaCypress Semiconductor Technology (Shanghai) Co., Ltd. Chengdu BranchChinaCypress Semiconductor Technology (Shanghai) Co., Ltd. Shenzhen BranchChinaCypress Semiconductor Technology India Private LimitedIndiaCypress Semiconductor Technology Ltd.Cayman IslandsCypress Semiconductor UkraineUkraineCypress Semiconductor World Trade Corp.Cayman IslandsCypress Semiconductors Ltd.IsraelCypress Venture Fund I, L.L.C.Delaware (USA)Nihon Cypress G.K.JapanRamtron International CorporationDelaware (USA)Ramtron LLCColorado (USA)Saifun (BVI) Ltd.British Virgin IslandsSpansion Asia Holdings (Singapore) Pte. Ltd.SingaporeSpansion Inc.Delaware (USA)Spansion International AM, Inc.Delaware (USA)Spansion International IP, Inc.Cayman IslandsSpansion International Trading, Inc.Delaware (USA)Spansion International, Inc.Delaware (USA)Spansion LLCDelaware (USA)Spansion Singapore Pte. Ltd.SingaporeSpansion Technology LLCDelaware (USA)1Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-225759, 333-221498, 333-212320, 333-203041,333-199798, 333-189612, 333-185439, 333-174673, 333-165750, 333-154748, 333-150484, 333-131494, 333-119049, 333-108175, 333-104672, 333-101479, 333-99221, 333-91764, 333-71528, 333-66074, 333-58896, 333-44264, 333-93839, 333-93719, 333-76665, 333-68703, 333-52035, 333-24831,333-00535, 033-59153, 033-57499, and 033-54637) of Cypress Semiconductor Corporation of our report dated February 27, 2019 relating to the financialstatements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K./s/ PricewaterhouseCoopers LLPSan Jose, CaliforniaFebruary 27, 2019Exhibit 31.1CERTIFICATIONPURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002I, Hassane El-Khoury, certify that:1.I have reviewed this Annual Report on Form 10-K of Cypress Semiconductor Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: February 27, 2019By: /s/ HASSANE EL-KHOURY HASSANE EL-KHOURY President and Chief Executive OfficerExhibit 31.2CERTIFICATIONPURSUANT TO SECTION 302 OF SARBANES-OXLEY ACT OF 2002I, Thad Trent, certify that:1.I have reviewed this Annual Report on Form 10-K of Cypress Semiconductor Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; andd)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likelyto materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: February 27, 2019By: /s/ THAD TRENT Thad Trent Executive Vice President, Finance andAdministration and Chief Financial OfficerExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002I, Hassane El-Khoury, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of2002, that the Annual Report on Form 10-K of Cypress Semiconductor Corporation for the year ended December 30, 2018, fullycomplies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in suchAnnual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of CypressSemiconductor Corporation.Dated:February 27, 2019By:/s/ HASSANE EL-KHOURY HASSANE EL-KHOURY President and Chief Executive OfficerExhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350AS ADOPTED PURSUANT TO SECTION 906OF THE SARBANES-OXLEY ACT OF 2002I, Thad Trent, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the AnnualReport on Form 10-K of Cypress Semiconductor Corporation for the year ended December 30, 2018 fully complies with the requirements of Section 13(a) or15(d) of the Securities Exchange Act of 1934 and the information contained in such Annual Report on Form 10-K fairly presents, in all material respects, thefinancial condition and results of operations of Cypress Semiconductor Corporation. Date: February 27, 2019By: /s/ THAD TRENT Thad Trent Executive Vice President, Finance andAdministration and Chief Financial Officer

Continue reading text version or see original annual report in PDF format above