Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-22339

_______________________________

RAMBUS INC.

(Exact name of registrant as specified in its charter)

_______________________________



Delaware		94-3112828
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



1050 Enterprise Way, Suite 700 Sunnyvale, California				94089
(Address of principal executive offices)				(ZIP Code)

Registrant’s telephone number, including area code: (408) 462-8000

_______________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (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 past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer ý		Accelerated filer o

Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The number of shares outstanding of the registrant’s Common Stock, par value $.001 per share, was 116,360,766 as of June 30, 2015.

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RAMBUS INC.

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	PAGE
Note Regarding Forward-Looking Statements	3
PART I. FINANCIAL INFORMATION	5
Item 1. Financial Statements (Unaudited):	5
Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014	5
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014	6
Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014	7
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014	8
Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3. Quantitative and Qualitative Disclosures about Market Risk	38
Item 4. Controls and Procedures	39
PART II. OTHER INFORMATION	40
Item 1. Legal Proceedings	40
Item 1A. Risk Factors	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 3. Defaults Upon Senior Securities	50
Item 4. Mine Safety Disclosures	50
Item 5. Other Information	50
Item 6. Exhibits	50
Signature	51
Exhibit Index	52

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements. These forward-looking statements include, without limitation, predictions regarding the following aspects of our future:


•	Success in the markets of our products and services or our customers’ products;


•	Sources of competition;


•	Research and development costs and improvements in technology;


•	Sources, amounts and concentration of revenue, including royalties;


•	Success in signing and renewing license agreements;


•	Terms of our licenses and amounts owed under license agreements;


•	Technology product development;


•	Dispositions, acquisitions, mergers or strategic transactions and our related integration efforts;


•	Impairment of goodwill and long-lived assets;


•	Pricing policies of our customers;


•	Changes in our strategy and business model, including the expansion of our portfolio of inventions, products and solutions to address additional markets in lighting, chip and system security;


•	Deterioration of financial health of commercial counterparties and their ability to meet their obligations to us;


•	Effects of security breaches or failures in our or our customers’ products and services on our business;


•	Engineering, sales and general and administration expenses;


•	Contract revenue;


•	Operating results;


•	International licenses and operations;


•	Effects of changes in the economy and credit market on our industry and business;


•	Ability to identify, attract, motivate and retain qualified personnel;


•	Effects of government regulations on our industry and business;


•	Manufacturing and supply partners and/or sale and distribution channels;


•	Growth in our business;


•	Methods, estimates and judgments in accounting policies;


•	Adoption of new accounting pronouncements;


•	Effective tax rates;


•	Realization of deferred tax assets/release of deferred tax valuation allowance;


•	Trading price of our common stock;


•	Internal control environment;


•	The level and terms of our outstanding debt and the repayment or financing of such debt;


•	Litigation expenses;


•	Protection of intellectual property;


•	Any changes in laws, agency actions and judicial rulings that may impact the ability to enforce intellectual property rights;


•	Indemnification and technical support obligations;


•	Equity repurchase plans;


•	Issuances of debt or equity securities, which could involve restrictive covenants or be dilutive to our existing stockholders;


•	Outcome and effect of potential future intellectual property litigation and other significant litigation; and


•	Likelihood of paying dividends.

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You can identify these and other forward-looking statements by the use of words such as “may,” “future,” “shall,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” “projecting” or the negative of such terms, or other comparable terminology. Forward-looking statements also include the assumptions underlying or relating to any of the foregoing statements.

Actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under Item 1A, “Risk Factors.” All forward-looking statements included in this document are based on our assessment of information available to us at this time. We assume no obligation to update any forward-looking statements.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

RAMBUS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



	June 30, 2015			December 31, 2014
	(In thousands, except shares and par value)
ASSETS
Current assets:
Cash and cash equivalents	$	201,477		$	154,126
Marketable securities	146,649			145,983
Accounts receivable	6,745			6,001
Prepaids and other current assets	9,690			8,541
Deferred taxes	1,113			187
Total current assets	365,674			314,838
Intangible assets, net	76,694			89,371
Goodwill	116,899			116,899
Property, plant and equipment, net	60,689			64,023
Deferred taxes, long-term	454			536
Other assets	3,345			2,612
Total assets	$	623,755		$	588,279
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,187		$	6,962
Accrued salaries and benefits	11,857			14,840
Deferred revenue	6,551			4,133
Other current liabilities	7,774			8,723
Total current liabilities	31,369			34,658
Convertible notes, long-term	117,949			115,089
Long-term imputed financing obligation	38,874			39,063
Long-term income taxes payable	2,679			2,769
Other long-term liabilities	8,139			5,078
Total liabilities	199,010			196,657
Commitments and contingencies (Notes 9 and 13)
Stockholders’ equity:
Convertible preferred stock, $.001 par value:
Authorized: 5,000,000 shares
Issued and outstanding: no shares at June 30, 2015 and December 31, 2014	—			—
Common stock, $.001 par value:
Authorized: 500,000,000 shares
Issued and outstanding: 116,360,766 shares at June 30, 2015 and 115,161,675 shares at December 31, 2014	116			115
Additional paid-in capital	1,170,159			1,153,435
Accumulated deficit	(745,164		)	(761,526		)
Accumulated other comprehensive loss	(366		)	(402		)
Total stockholders’ equity	424,745			391,622
Total liabilities and stockholders’ equity	$	623,755		$	588,279

See Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(In thousands, except per share amounts)
Revenue:
Royalties	$	62,387		$	69,741		$	129,350		$	143,378
Contract and other revenue	10,425			6,777			16,376			11,428
Total revenue	72,812			76,518			145,726			154,806
Operating costs and expenses:
Cost of revenue*	12,137			10,637			22,893			20,659
Research and development*	29,188			27,668			57,722			54,566
Sales, general and administrative*	17,339			18,619			35,841			37,439
Gain from sale of intellectual property	(896		)	—			(3,156		)	(170		)
Restructuring charges	—			—			—			39
Gain from settlement	(510		)	(510		)	(1,020		)	(1,020		)
Total operating costs and expenses	57,258			56,414			112,280			111,513
Operating income	15,554			20,104			33,446			43,293
Interest income and other income (expense), net	203			104			335			117
Interest expense	(3,091		)	(8,770		)	(6,174		)	(18,696		)
Interest and other income (expense), net	(2,888		)	(8,666		)	(5,839		)	(18,579		)
Income before income taxes	12,666			11,438			27,607			24,714
Provision for income taxes	5,805			6,395			11,244			11,867
Net income	$	6,861		$	5,043		$	16,363		$	12,847
Net income per share:
Basic	$	0.06		$	0.04		$	0.14		$	0.11
Diluted	$	0.06		$	0.04		$	0.14		$	0.11
Weighted average shares used in per share calculation:
Basic	116,027			114,116			115,683			113,854
Diluted	120,939			117,398			119,225			116,733

_________________________________________

* Includes stock-based compensation:



Cost of revenue	$	27	$	15	$	39	$	22
Research and development	$	1,988	$	2,615	$	3,755	$	3,926
Sales, general and administrative	$	2,400	$	2,225	$	4,387	$	3,806

See Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In thousands)	2015			2014			2015		2014
Net income	$	6,861		$	5,043		$	16,363	$	12,847
Other comprehensive income:
Foreign currency translation adjustment	9			—			9		—
Unrealized gain (loss) on marketable securities, net of tax	(26		)	(59		)	27		(51		)
Total comprehensive income	$	6,844		$	4,984		$	16,399	$	12,796

See Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Six Months Ended
	June 30,
	2015			2014
	(In thousands)
Cash flows from operating activities:
Net income	$	16,363		$	12,847
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation	8,181			7,754
Depreciation	6,295			6,979
Amortization of intangible assets	12,645			13,554
Non-cash interest expense and amortization of convertible debt issuance costs	3,140			11,711
Deferred income taxes	1,233			5,941
Gain from sale of intellectual property and property, plant and equipment	(3,151		)	(170		)
Change in operating assets and liabilities:
Accounts receivable	(744		)	(10,252		)
Prepaid expenses and other assets	(2,106		)	(1,283		)
Accounts payable	(1,873		)	756
Accrued salaries and benefits and other liabilities	(3,843		)	(19,630		)
Income taxes payable	282			(3,982		)
Deferred revenue	2,418			2,229
Net cash provided by operating activities	38,840			26,454
Cash flows from investing activities:
Purchases of property, plant and equipment	(3,117		)	(4,293		)
Purchases of marketable securities	(97,665		)	(166,070		)
Maturities of marketable securities	70,396			51,428
Proceeds from sale of marketable securities	26,648			17,689
Proceeds from sale of intellectual property and property, plant and equipment	3,404			2,500
Net cash used in investing activities	(334		)	(98,746		)
Cash flows from financing activities:
Proceeds received from issuance of common stock under employee stock plans	9,053			5,855
Principal payments against lease financing obligation	(208		)	(132		)
Payments under installment payment arrangement	—			(56		)
Repayment of convertible senior notes	—			(172,500		)
Net cash provided by (used in) financing activities	8,845			(166,833		)
Net increase (decrease) in cash and cash equivalents	47,351			(239,125		)
Cash and cash equivalents at beginning of period	154,126			338,696
Cash and cash equivalents at end of period	$	201,477		$	99,571

Non-cash investing activities during the period:
Property, plant and equipment received and accrued in accounts payable and other liabilities	$	677		$	166

See Notes to Unaudited Condensed Consolidated Financial Statements

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RAMBUS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Rambus Inc. (“Rambus” or the “Company”) and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the accompanying unaudited condensed consolidated financial statements. Investments in entities with less than 20% ownership or in which the Company does not have the ability to significantly influence the operations of the investee are being accounted for using the cost method and are included in other assets.

In the opinion of management, the unaudited condensed consolidated financial statements include all adjustments (consisting only of normal recurring items) necessary to state fairly the financial position and results of operations for each interim period presented. Interim results are not necessarily indicative of results for a full year.

The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to interim financial information. Certain information and Note disclosures included in the financial statements prepared in accordance with generally accepted accounting principles have been omitted in these interim statements pursuant to such SEC rules and regulations. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto in Form 10-K for the year ended December 31, 2014.

Operating Segment Definitions

Operating segments are based upon Rambus' internal organization structure, the manner in which its operations are managed, the criteria used by its Chief Operating Decision Maker ("CODM") to evaluate segment performance and availability of separate financial information regularly reviewed for resource allocation and performance assessment.

The Company determined its CODM to be the Chief Executive Officer and determined its operating segments to be: (1) Memory and Interface Division ("MID"), which focuses on the design, development and licensing of technology that is related to memory and interfaces; (2) Cryptography Research Division ("CRD"), which focuses on the design, development and licensing of technologies for chip and system security and anti-counterfeiting; (3) Emerging Solutions Division ("ESD"), which includes the computational sensing and imaging group along with the development efforts in the area of emerging technologies; and (4) Lighting and Display Technologies ("LDT"), which focuses on the design, development and licensing of technologies for lighting.

For the three and six months ended June 30, 2015, only MID and CRD were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining other operating segment were shown under “Other.”

Reclassifications

Certain prior periods' amounts were reclassified to conform to the current year’s presentation. None of these reclassifications had an impact on reported net income for any of the periods presented.

2. Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs", which requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. This ASU requires retrospective adoption and is effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on its financial statements.

In August 2014, the FASB issued ASU No. 2014-15, "Disclosures of Uncertainties About an Entity's Ability to Continue as a Going Concern." The new standard provides guidance around management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect that this guidance will have a material impact on its financial position, results of operations or cash flows.

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In June 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718)," which makes amendments to the codification topic 718, "Accounting for Share-Based Payments," when the terms of an award provide that a performance target could be achieved after the requisite service period. The new accounting standards update becomes effective for the Company on January 1, 2016. The Company is currently evaluating the impact that this guidance will have on its financial position, results of operations or cash flows.

In May 2014, the FASB and International Accounting Standards Board issued their converged accounting standards update on revenue recognition. The core principle of the new guidance is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The new guidance also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively (for example, service revenue and contract modifications) and improve guidance for multiple-element arrangements. The new accounting standards update becomes effective for the Company on January 1, 2018. The Company is currently evaluating the impact that this guidance will have on its financial condition and results of operations.

3. Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the earnings by the weighted average number of common shares and potentially dilutive securities outstanding during the period. Potentially dilutive common shares consist of incremental common shares issuable upon exercise of stock options, employee stock purchases, restricted stock and restricted stock units and shares issuable upon the conversion of convertible notes. The dilutive effect of outstanding shares is reflected in diluted earnings per share by application of the treasury stock method. This method includes consideration of the amounts to be paid by the employees, the amount of excess tax benefits that would be recognized in equity if the instrument was exercised and the amount of unrecognized stock-based compensation related to future services. No potential dilutive common shares are included in the computation of any diluted per share amount when a net loss is reported.

The following table sets forth the computation of basic and diluted net income per share:



	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Net income per share:	(In thousands, except per share amounts)
Numerator:
Net income	$	6,861	$	5,043	$	16,363	$	12,847
Denominator:
Weighted-average shares outstanding - basic	116,027		114,116		115,683		113,854
Effect of potential dilutive common shares	4,912		3,282		3,542		2,879
Weighted-average shares outstanding - diluted	120,939		117,398		119,225		116,733
Basic net income per share	$	0.06	$	0.04	$	0.14	$	0.11
Diluted net income per share	$	0.06	$	0.04	$	0.14	$	0.11

For the three months ended June 30, 2015 and 2014, options to purchase approximately 2.6 million and 3.7 million shares, respectively, and for the six months ended June 30, 2015 and 2014, options to purchase approximately 2.6 million and 6.2 million shares, respectively, were excluded from the calculation because they were anti-dilutive after considering proceeds from exercise, taxes and related unrecognized stock-based compensation expense.

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4. Intangible Assets and Goodwill

Goodwill

The following tables present goodwill information for each of the reportable segments for the six months ended June 30, 2015:



Reportable Segment:	As of December 31, 2014		Additions to Goodwill		Impairment Charge of Goodwill		As of June 30, 2015
	(In thousands)
MID	$	19,905	$	—	$	—	$	19,905
CRD	96,994		—		—		96,994
Total	$	116,899	$	—	$	—	$	116,899



	As of
	June 30, 2015
Reportable Segment:	Gross Carrying Amount		Accumulated Impairment Losses			Net Carrying Amount
	(In thousands)
MID	$	19,905	$	—		$	19,905
CRD	96,994		—			96,994
Other	21,770		(21,770		)	—
Total	$	138,669	$	(21,770	)	$	116,899

Intangible Assets

The components of the Company’s intangible assets as of June 30, 2015 and December 31, 2014 were as follows:



		As of June 30, 2015
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	185,321	$	(115,835	)	$	69,486
Customer contracts and contractual relationships	1 to 10 years	31,093		(23,885		)	7,208
Non-compete agreements	3 years	300		(300		)	—
Total intangible assets		$	216,714	$	(140,020	)	$	76,694



		As of December 31, 2014
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
		(In thousands)
Existing technology	3 to 10 years	$	185,321	$	(104,426	)	$	80,895
Customer contracts and contractual relationships	1 to 10 years	31,093		(22,617		)	8,476
Non-compete agreements	3 years	300		(300		)	—
Total intangible assets		$	216,714	$	(127,343	)	$	89,371

During the three and six months ended June 30, 2015, the Company did not purchase or sell any intangible assets. During the six months ended June 30, 2014, the Company sold portfolios of its intellectual property covering wireless and other technologies for $4.4 million and the related gain was recorded as gain from sale of intellectual property and revenue in the condensed consolidated statements of operations.

The favorable contracts (included in customer contracts and contractual relationships) are acquired patent licensing agreements where the Company has no performance obligations. Cash received from these acquired favorable contracts reduces

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the favorable contract intangible asset. For the three months ended June 30, 2015 and 2014, the Company received $0.1 million and $0.1 million related to the favorable contracts, respectively. For the six months ended June 30, 2015 and 2014, the Company received $0.1 million and $0.9 million related to the favorable contracts, respectively. As of June 30, 2015 and December 31, 2014, the net balance of the favorable contract intangible assets was zero and $0.1 million, respectively.

Amortization expense for intangible assets for the three and six months ended June 30, 2015 was $6.3 million and $12.6 million, respectively. Amortization expense for intangible assets for the three and six months ended June 30, 2014 was $6.8 million and $13.6 million, respectively. The estimated future amortization expense of intangible assets as of June 30, 2015 was as follows (amounts in thousands):



Years Ending December 31:	Amount
2015 (remaining 6 months)	$	12,428
2016	24,311
2017	23,709
2018	10,827
2019	1,789
Thereafter	3,630
	$	76,694

It is reasonably possible that the businesses could perform significantly below the Company's expectations or a deterioration of market and economic conditions could occur. This would adversely impact the Company's ability to meet its projected results, which could cause the goodwill in any of its reporting units or long-lived assets in any of its asset groups to become impaired. Significant differences between these estimates and actual cash flows could materially affect the Company's future financial results. If the reporting units are not successful in commercializing new business arrangements, if the businesses are unsuccessful in signing new license agreements or renewing their existing license agreements, or if the Company is unsuccessful in managing its costs, the revenue and income for these reporting units could adversely and materially deviate from their historical trends and could cause goodwill or long-lived assets to become impaired. If the Company determines that its goodwill or long-lived assets are impaired, it would be required to record a non-cash charge that could have a material adverse effect on its results of operations and financial position.

5. Segments and Major Customers

For the three and six months ended June 30, 2015, MID and CRD were reportable segments as each of them met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining operating segments were shown under “Other.” Additionally, some employees moved departments in the fourth quarter of 2014 causing a change in the prior period reportable segment financial results. The presentation of the 2014 segment data has been updated accordingly to conform with the updated segment presentation.

The Company evaluates the performance of its segments based on segment operating income (loss), which is defined as revenue minus segment operating expenses. Segment operating expenses are comprised of direct operating expenses.

Segment operating expenses do not include sales, general and administrative expenses and the allocation of certain expenses managed at the corporate level, such as stock-based compensation, amortization, and certain bonus and acquisition costs. The “Reconciling Items” category includes these unallocated sales, general and administrative expenses as well as corporate level expenses.

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The tables below present reported segment operating income (loss) for the three and six months ended June 30, 2015 and 2014, respectively.



	For the Three Months Ended June 30, 2015										For the Six Months Ended June 30, 2015
	MID		CRD		Other			Total			MID		CRD		Other			Total
	(In thousands)										(In thousands)
Revenues	$	54,579	$	11,778	$	6,455		$	72,812		$	109,313	$	24,604	$	11,809		$	145,726
Segment operating expenses	12,801		7,329		8,770			28,900			24,321		14,665		16,029			55,015
Segment operating income (loss)	$	41,778	$	4,449	$	(2,315	)	$	43,912		$	84,992	$	9,939	$	(4,220	)	$	90,711
Reconciling items								(28,358		)								(57,265		)
Operating income								$	15,554									$	33,446
Interest and other income (expense), net								(2,888		)								(5,839		)
Income before income taxes								$	12,666									$	27,607



	For the Three Months Ended June 30, 2014										For the Six Months Ended June 30, 2014
	MID		CRD		Other			Total			MID		CRD		Other			Total
	(In thousands)										(In thousands)
Revenues	$	58,664	$	12,771	$	5,083		$	76,518		$	119,820	$	25,674	$	9,312		$	154,806
Segment operating expenses	9,038		7,189		9,193			25,420			18,319		13,719		17,847			49,885
Segment operating income (loss)	$	49,626	$	5,582	$	(4,110	)	$	51,098		$	101,501	$	11,955	$	(8,535	)	$	104,921
Reconciling items								(30,994		)								(61,628		)
Operating income								$	20,104									$	43,293
Interest and other income (expense), net								(8,666		)								(18,579		)
Income before income taxes								$	11,438									$	24,714

The Company’s CODM does not review information regarding assets on an operating segment basis. Additionally, the Company does not record intersegment revenue or expense.

Accounts receivable from the Company's major customers representing 10% or more of total accounts receivable at June 30, 2015 and December 31, 2014, respectively, was as follows:



	As of
Customer	June 30, 2015	December 31, 2014
Customer 1 (Other segment)	62%	50%
Customer 2 (CRD reportable segment)	12%	*
Customer 3 (MID reportable segment)	*	33%

_________________________________________

* Customer accounted for less than 10% of total accounts receivable in the period

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Revenue from the Company’s major customers representing 10% or more of total revenue for the three and six months ended June 30, 2015 and 2014, respectively, was as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
Customer	2015		2014		2015		2014
Customer A (MID and CRD reportable segments)	21	%	20	%	21	%	19	%
Customer B (MID reportable segment)	16	%	15	%	16	%	15	%
Customer C (MID reportable segment)	13	%	13	%	13	%	13	%

Revenue from customers in the geographic regions based on the location of contracting parties was as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2015		2014		2015		2014
South Korea	$	26,821	$	26,946	$	53,642	$	53,799
USA	29,677		27,898		57,384		56,572
Japan	7,915		7,388		16,406		16,643
Europe	1,540		4,276		6,715		12,839
Canada	5		1,787		201		3,611
Asia-Other	6,854		8,223		11,378		11,342
Total	$	72,812	$	76,518	$	145,726	$	154,806

6. Marketable Securities

Rambus invests its excess cash and cash equivalents primarily in U.S. government sponsored obligations, commercial paper, corporate notes and bonds, money market funds and municipal notes and bonds that mature within three years. As of June 30, 2015 and December 31, 2014, all of the Company’s cash equivalents and marketable securities had a remaining maturity of less than one year.

All cash equivalents and marketable securities are classified as available-for-sale. Total cash, cash equivalents and marketable securities are summarized as follows:



	As of June 30, 2015
(In thousands)	Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Weighted Rate of Return
Money market funds	$	175,972	$	175,972	$	—	$	—		0.01	%
Corporate notes, bonds and commercial paper	146,649		146,735		2		(88		)	0.40	%
Total cash equivalents and marketable securities	322,621		322,707		2		(88		)
Cash	25,505		25,505		—		—
Total cash, cash equivalents and marketable securities	$	348,126	$	348,212	$	2	$	(88	)



	As of December 31, 2014
(In thousands)	Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Weighted Rate of Return
Money market funds	$	124,938	$	124,938	$	—	$	—		0.01	%
Corporate notes, bonds and commercial paper	145,983		146,096		1		(114		)	0.25	%
Total cash equivalents and marketable securities	270,921		271,034		1		(114		)
Cash	29,188		29,188		—		—
Total cash, cash equivalents and marketable securities	$	300,109	$	300,222	$	1	$	(114	)

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Available-for-sale securities are reported at fair value on the balance sheets and classified as follows:



	As of
	June 30, 2015		December 31, 2014
	(In thousands)
Cash equivalents	$	175,972	$	124,938
Short term marketable securities	146,649		145,983
Total cash equivalents and marketable securities	322,621		270,921
Cash	25,505		29,188
Total cash, cash equivalents and marketable securities	$	348,126	$	300,109

The Company continues to invest in highly rated quality, highly liquid debt securities. As of June 30, 2015, these securities have a remaining maturity of less than one year. The Company holds all of its marketable securities as available-for-sale, marks them to market, and regularly reviews its portfolio to ensure adherence to its investment policy and to monitor individual investments for risk analysis, proper valuation, and unrealized losses that may be other than temporary.

The estimated fair value of cash equivalents and marketable securities classified by the length of time that the securities have been in a continuous unrealized loss position at June 30, 2015 and December 31, 2014 are as follows:



	Fair Value				Gross Unrealized Loss
	June 30, 2015		December 31, 2014		June 30, 2015			December 31, 2014
	(In thousands)
Less than one year
Corporate notes, bonds and commercial paper	$	126,434	$	139,989	$	(88	)	$	(114	)

The gross unrealized loss at June 30, 2015 and December 31, 2014 was not material in relation to the Company’s total available-for-sale portfolio. The gross unrealized loss can be primarily attributed to a combination of market conditions as well as the demand for and duration of the corporate notes and bonds. There is no requirement to sell and the Company believes that it can recover the amortized cost of these investments. The Company has found no evidence of impairment due to credit losses in its portfolio. Therefore, these unrealized losses were recorded in other comprehensive income (loss). However, the Company cannot provide any assurance that its portfolio of cash, cash equivalents and marketable securities will not be impacted by adverse conditions in the financial markets, which may require the Company in the future to record an impairment charge for credit losses which could adversely impact its financial results.

See Note 7, “Fair Value of Financial Instruments,” for discussion regarding the fair value of the Company’s cash equivalents and marketable securities.

7. Fair Value of Financial Instruments

The Company reviews the pricing inputs by obtaining prices from a different source for the same security on a sample of its portfolio. The Company has not adjusted the pricing inputs it has obtained. The following table presents the financial instruments that are carried at fair value and summarizes the valuation of its cash equivalents and marketable securities by the above pricing levels as of June 30, 2015 and December 31, 2014:



	As of June 30, 2015
	Total		Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Money market funds	$	175,972	$	175,972	$	—	$	—
Corporate notes, bonds and commercial paper	146,649		—		146,649		—
Total available-for-sale securities	$	322,621	$	175,972	$	146,649	$	—

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	As of December 31, 2014
	Total		Quoted Market Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Money market funds	$	124,938	$	124,938	$	—	$	—
Corporate notes, bonds and commercial paper	145,983		—		145,983		—
Total available-for-sale securities	$	270,921	$	124,938	$	145,983	$	—

The Company monitors its investments for other-than-temporary impairment and records appropriate reductions in carrying value when necessary. The Company monitors its investments for other-than-temporary losses by considering current factors, including the economic environment, market conditions, operational performance and other specific factors relating to the business underlying the investment, reductions in carrying values when necessary and the Company’s ability and intent to hold the investment for a period of time which may be sufficient for anticipated recovery in the market. Any other-than-temporary loss is reported under “Interest and other income (expense), net” in the condensed consolidated statement of operations.

For the three and six months ended June 30, 2015 and 2014, there were no transfers of financial instruments between different categories of fair value.

The following table presents the financial instruments that are not carried at fair value but require fair value disclosure as of June 30, 2015 and December 31, 2014:



	As of June 30, 2015						As of December 31, 2014
(In thousands)	Face Value		Carrying Value		Fair Value		Face Value		Carrying Value		Fair Value
1.125% Convertible Senior Notes due 2018 (the "2018 Notes")	$	138,000	$	117,949	$	189,060	$	138,000	$	115,089	$	159,293

The fair value of the convertible notes at each balance sheet date is determined based on recent quoted market prices for these notes which is a level 2 measurement. As discussed in Note 8, "Convertible Notes," as of June 30, 2015, the 2018 Notes are carried at their face value of $138.0 million, less any unamortized debt discount. The carrying value of other financial instruments, including accounts receivable, accounts payable and other liabilities, approximates fair value due to their short maturities.

8. Convertible Notes

The Company’s convertible notes are shown in the following table:



(In thousands)	As of June 30, 2015			As of December 31, 2014
1.125% Convertible Senior Notes due 2018	$	138,000		$	138,000
Unamortized discount	(20,051		)	(22,911		)
Total convertible notes	$	117,949		$	115,089
Less current portion	—			—
Total long-term convertible notes	$	117,949		$	115,089

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Interest expense related to the notes for the three and six months ended June 30, 2015 and 2014 was as follows:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
	(In thousands)
2014 Notes coupon interest at a rate of 5%	$	—	$	1,773	$	—	$	3,929
2014 Notes amortization of discount and debt issuance costs at an additional effective interest rate of 11.7%	—		3,975		—		8,744
2018 Notes coupon interest at a rate of 1.125%	388		388		791		776
2018 Notes amortization of discount and debt issuance costs at an additional effective interest rate of 5.5%	1,581		1,494		3,140		2,967
Total interest expense on convertible notes	$	1,969	$	7,630	$	3,931	$	16,416

9. Commitments and Contingencies

As of June 30, 2015, the Company’s material contractual obligations were as follows (in thousands):



	Total		Remainder of 2015		2016		2017		2018		2019		Thereafter
Contractual obligations (1)
Imputed financing obligation (2)	$	31,415	$	3,039	$	6,156	$	6,302	$	6,447	$	6,602	$	2,869
Leases and other contractual obligations	7,893		3,825		2,378		1,350		340		—		—
Software licenses (3)	7,403		5,045		2,188		170		—		—		—
Convertible notes	138,000		—		—		—		138,000		—		—
Interest payments related to convertible notes	5,434		776		1,553		1,553		1,552		—		—
Total	$	190,145	$	12,685	$	12,275	$	9,375	$	146,339	$	6,602	$	2,869

_________________________________________

(1)

The above table does not reflect possible payments in connection with uncertain tax benefits of approximately $20.6 million including $18.4 million recorded as a reduction of long-term deferred tax assets and $2.2 million in long-term income taxes payable as of June 30, 2015. As noted below in Note 12, “Income Taxes,” although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time.

(2)

With respect to the imputed financing obligation, the main components of the difference between the amount reflected in the contractual obligations table and the amount reflected on the condensed consolidated balance sheets are the interest on the imputed financing obligation and the estimated common area expenses over the future periods. The amount includes the amended Ohio lease and the amended Sunnyvale lease.


(3)	The Company has commitments with various software vendors for non-cancellable agreements generally having terms longer than one year.

Building lease expense was approximately $0.6 million and $1.3 million for the three and six months ended June 30, 2015, respectively. Building lease expense was approximately $0.7 million and $1.3 million for the three and six months ended June 30, 2014, respectively. Deferred rent of $0.9 million and $1.1 million as of June 30, 2015 and December 31, 2014, respectively, was included primarily in other long-term liabilities.

Indemnification

The Company enters into standard license agreements in the ordinary course of business. Although the Company does not indemnify most of its customers, there are times when an indemnification is a necessary means of doing business. Indemnification covers customers for losses suffered or incurred by them as a result of any patent, copyright, or other intellectual property infringement or any other claim by any third party arising as result of the applicable agreement with the

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Company. The Company generally attempts to limit the maximum amount of indemnification that the Company could be required to make under these agreements to the amount of fees received by the Company.

10. Equity Incentive Plans and Stock-Based Compensation

As of June 30, 2015, 12,632,940 shares of the 35,400,000 shares approved under the 2006 Equity Incentive Plan (the “2006 Plan”) and 2015 Equity Incentive Plan (the “2015 Plan”) remain available for grant, which included an increase of 4,000,000 shares approved under the 2015 Plan. On April 23, 2015, the Company's stockholders approved the 2015 Plan, which authorizes 4,000,000 shares for future issuance plus the number of shares that remained available for grant under the 2006 Plan as of the effective date of the 2015 Plan. The 2015 Plan became effective and replaced the 2006 Plan on April 23, 2015. The 2015 Plan was the Company’s only plan for providing stock-based incentive awards to eligible employees, executive officers, non-employee directors and consultants as of June 30, 2015. No further awards will be made under the 2006 Plan, but the 2006 Plan will continue to govern awards previously granted under it. In addition, any shares subject to stock options or other awards granted under the 2006 Plan that on or after the effective date of the 2015 Plan are forfeited, cancelled, exchanged or surrendered or terminate under the 2006 Plan will become available for grant under the 2015 Plan. Additionally, the 1997 Stock Option Plan (the “1997 Plan”) continues to govern awards previously granted under that plan.

A summary of shares available for grant under the Company’s plans is as follows:



	Shares Available for Grant
Shares available as of December 31, 2014	10,724,228
Increase in shares approved for issuance	4,000,000
Stock options granted	(362,335	)
Stock options forfeited	1,369,490
Stock options expired under former plans	(618,722	)
Nonvested equity stock and stock units granted (1) (2)	(2,611,833	)
Nonvested equity stock and stock units forfeited (1)	132,112
Total available for grant as of June 30, 2015	12,632,940

_________________________________________


(1)	For purposes of determining the number of shares available for grant under the 2015 Plan (and previously the 2006 Plan) against the maximum number of shares authorized, each share of restricted stock granted reduces the number of shares available for grant by 1.5 shares and each share of restricted stock forfeited increases shares available for grant by 1.5 shares.


(2)	Amount includes 238,980 shares that have been reserved for potential future issuance related to certain performance unit awards discussed under the section titled "Nonvested Equity Stock and Stock Units" below.

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General Stock Option Information

The following table summarizes stock option activity under the 1997 Plan, 2006 Plan and 2015 Plan for the six months ended June 30, 2015 and information regarding stock options outstanding, exercisable, and vested and expected to vest as of June 30, 2015.



	Options Outstanding
	Number of Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value
	(In thousands, except per share amounts)
Outstanding as of December 31, 2014	11,441,646		$	10.73
Options granted	362,335		$	11.27
Options exercised	(780,858	)	$	7.74
Options forfeited	(1,369,490	)	$	18.56
Outstanding as of June 30, 2015	9,653,633		$	9.88	6.26	$	58,097
Vested or expected to vest at June 30, 2015	9,277,512		$	9.90	6.17	$	56,120
Options exercisable at June 30, 2015	5,317,747		$	11.71	4.91	$	28,210

No stock options that contain a market condition were granted during the three and six months ended June 30, 2015. As of both June 30, 2015 and December 31, 2014, there were 1,315,000 stock options outstanding that require the Company to achieve minimum market conditions in order for the options to become exercisable. The fair values of the options granted with a market condition were calculated, on their respective grant dates, using a binomial valuation model, which estimates the potential outcome of reaching the market condition based on simulated future stock prices.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for in-the-money options at June 30, 2015, based on the $14.49 closing stock price of Rambus’ common stock on June 30, 2015 on the NASDAQ Global Select Market, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options outstanding and exercisable as of June 30, 2015 was 8,001,891 and 4,302,260, respectively.

Employee Stock Purchase Plan

Under the 2006 Employee Stock Purchase Plan ("2006 ESPP"), the Company issued 315,100 shares at a price of $9.66 per share during the six months ended June 30, 2015. The Company issued 374,588 shares at a price of $7.42 per share during the six months ended June 30, 2014. As of June 30, 2015, 2,607,944 shares under the employee stock purchase plan remain available for issuance, which include the additional 2,000,000 shares from the 2015 Employee Stock Purchase Plan (“2015 ESPP”) approved by the Company's stockholders on April 23, 2015. The 2006 ESPP will remain in effect until the Company’s next offering period scheduled to begin on November 2, 2015 at which time the first offering period under the 2015 ESPP will begin.

Stock-Based Compensation

For the six months ended June 30, 2015 and 2014, the Company maintained stock plans covering a broad range of potential equity grants including stock options, nonvested equity stock and equity stock units and performance based instruments. In addition, the Company sponsors the 2006 ESPP and 2015 ESPP, whereby eligible employees are entitled to purchase common stock semi-annually, by means of limited payroll deductions, at a 15% discount from the fair market value of the common stock as of specific dates.

Stock Options

During the three months ended June 30, 2015, the Company did not grant any stock options. During the six months ended June 30, 2015, the Company granted 362,335 stock options with an estimated total grant-date fair value of $1.7 million. During the three and six months ended June 30, 2015, the Company recorded stock-based compensation expense related to stock options of $2.3 million and $4.4 million, respectively.

During the three and six months ended June 30, 2014, the Company granted 118,615 and 1,916,077 stock options, respectively, with an estimated total grant-date fair value of $0.6 million and $7.6 million, respectively. During the three and

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six months ended June 30, 2014, the Company recorded stock-based compensation expense related to stock options of $2.4 million and $4.6 million, respectively.

As of June 30, 2015, there was $9.6 million of total unrecognized compensation cost, net of expected forfeitures, related to non-vested stock-based compensation arrangements granted under the stock option plans. That cost is expected to be recognized over a weighted-average period of 1.9 years. The total fair value of shares vested as of June 30, 2015 was $40.5 million.

The total intrinsic value of options exercised was $3.5 million and $4.6 million for the three and six months ended June 30, 2015, respectively. The total intrinsic value of options exercised was $1.6 million and $2.2 million for the three and six months ended June 30, 2014, respectively. Intrinsic value is the total value of exercised shares based on the price of the Company’s common stock at the time of exercise less the cash received from the employees to exercise the options.

During the six months ended June 30, 2015, net proceeds from employee stock option exercises totaled approximately $6.0 million.

Employee Stock Purchase Plan

For the three and six months ended June 30, 2015, the Company recorded compensation expense related to the 2006 ESPP of $0.4 million and $0.8 million, respectively. For the three and six months ended June 30, 2014, the Company recorded compensation expense related to the 2006 ESPP of $1.8 million and $1.9 million, respectively. As of June 30, 2015, there was $0.5 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under the 2006 ESPP. That cost is expected to be recognized over four months.

There were no tax benefits realized as a result of employee stock option exercises, stock purchase plan purchases, and vesting of equity stock and stock units for the three and six months ended June 30, 2015 and 2014 calculated in accordance with accounting for share-based payments.

Valuation Assumptions

The fair value of stock awards is estimated as of the grant date using the Black-Scholes-Merton (“BSM”) option-pricing model assuming a dividend yield of 0% and the additional weighted-average assumptions as listed in the table below.

The following table presents the weighted-average assumptions used to estimate the fair value of stock options granted that contain only service conditions in the periods presented.



	Stock Option Plans
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Stock Option Plans
Expected stock price volatility	—		%	40		%	41		%	40-44%
Risk free interest rate	—		%	2.2		%	1.2		%	2.1-2.2%
Expected term (in years)				6.0			6.0			6.0-6.1
Weighted-average fair value of stock options granted to employees	$	—		$	4.95		$	4.59		$	3.98

There were no stock options granted during the three months ended June 30, 2015.



	Employee Stock Purchase Plan
	Six Months Ended
	June 30,
	2015			2014
Employee Stock Purchase Plan
Expected stock price volatility	34		%	39-44%
Risk free interest rate	0.05		%	0.0-0.1%
Expected term (in years)	0.5			0.02-0.5
Weighted-average fair value of purchase rights granted under the purchase plan	$	3.48		$	3.91

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Nonvested Equity Stock and Stock Units

The Company grants nonvested equity stock units to officers, employees and directors. During the three and six months ended June 30, 2015, the Company granted nonvested equity stock units totaling 60,724 and 1,581,902 shares under the 2006 Plan. During the three and six months ended June 30, 2014, the Company granted nonvested equity stock units totaling 22,868 and 228,676 shares under the 2006 Plan, respectively. These awards have a service condition, generally a service period of four years, except in the case of grants to directors, for which the service period is one year. For the three and six months ended June 30, 2015, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $0.9 million and $18.0 million. For the three and six months ended June 30, 2014, the nonvested equity stock units were valued at the date of grant giving them a fair value of approximately $0.3 million and $2.1 million. During the first quarter of 2015, the Company granted performance unit awards to certain Company executive officers with vesting subject to the achievement of certain performance conditions. The ultimate number of performance units that can be earned can range from 0% to 150% of target depending on performance relative to target over the applicable period. The shares earned will vest on the third anniversary of the date of grant. The Company's shares available for grant has been reduced to reflect the shares that could be earned at 150% of target. During the three and six months ended June 30, 2015, the Company recorded $0.3 million and $0.5 million of stock-based compensation expense related to these performance unit awards.

For the three and six months ended June 30, 2015, the Company recorded stock-based compensation expense of approximately $1.7 million and $2.9 million related to all outstanding nonvested equity stock grants. For the three and six months ended June 30, 2014, the Company recorded stock-based compensation expense of approximately $0.7 million and $1.3 million related to all outstanding nonvested equity stock grants. Unrecognized stock-based compensation related to all nonvested equity stock grants, net of estimated forfeitures, was approximately $15.5 million at June 30, 2015. This amount is expected to be recognized over a weighted average period of 3.0 years.

The following table reflects the activity related to nonvested equity stock and stock units for the six months ended June 30, 2015:



Nonvested Equity Stock and Stock Units	Shares		Weighted- Average Grant-Date Fair Value
Nonvested at December 31, 2014	673,864		$	9.23
Granted	1,581,902		$	11.39
Vested	(149,982	)	$	8.54
Forfeited	(88,074	)	$	10.47
Nonvested at June 30, 2015	2,017,710		$	10.92

11. Stockholders’ Equity

Share Repurchase Program

During the six months ended June 30, 2015, the Company did not repurchase any shares of its common stock under its share repurchase program.

On January 21, 2015, the Company's Board approved a new share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares. Share repurchases under the plan may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules, and regulations. There is no expiration date applicable to the plan. This new stock repurchase program replaced the previous program approved by the Board in February 2010 and canceled the remaining shares outstanding as part of the previous authorization. No repurchases have been made under the new plan.

The Company records stock repurchases as a reduction to stockholders’ equity. The Company records a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock.

12. Income Taxes

The Company recorded a provision for income taxes of $5.8 million and $6.4 million for the three months ended June 30, 2015 and 2014, respectively, and $11.2 million and $11.9 million for the six months ended June 30, 2015 and 2014,

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respectively. The provision for income taxes for the three and six months ended June 30, 2015 and 2014 is primarily comprised of withholding taxes, state taxes and other foreign taxes.

During the three and six months ended June 30, 2015, the Company paid withholding taxes of $4.8 million and $9.6 million. During the three and six months ended June 30, 2014, the Company paid withholding taxes of $4.8 million and $9.8 million, respectively.

As of June 30, 2015, the Company’s condensed consolidated balance sheets included net deferred tax assets, before valuation allowance, of approximately $186.5 million, which consists of net operating loss carryovers, tax credit carryovers, amortization, employee stock-based compensation expenses and certain liabilities, partially reduced by deferred tax liabilities associated with the convertible notes. As of June 30, 2015, a full valuation allowance has been recorded against the U.S. deferred tax assets.

Management periodically evaluates the realizability of the Company's net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company's ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. The Company weighed both positive and negative evidence and determined that there is a continued need for a full valuation allowance on its deferred tax assets in the United States as of June 30, 2015. The Company emerged from a cumulative loss position over the previous three years during the first quarter of 2015. However, given economic uncertainties and the uncertainty of commercializing new business arrangements and new product acceptances, the Company currently believes there is not sufficient positive evidence of sustained future profitability to change its judgment regarding the need for a full valuation allowance on its deferred tax assets in the United States. The continued improvement in the Company's operating results, along with successfully commercializing new business arrangements, signing new or renewing existing license agreements and managing costs would provide additional positive evidence in determining the need for the valuation allowance and could lead to reversal of substantially all of the Company's valuation allowance on its deferred tax assets in the United States. Until such time, consumption of tax attributes to offset profits will reduce the overall level of deferred tax assets subject to valuation allowance. Should the Company determine that it would be able to realize its remaining deferred tax assets in the foreseeable future, an adjustment to its remaining deferred tax assets would cause a material increase to net income in the period such determination is made.

The Company maintains liabilities for uncertain tax positions within its long-term income taxes payable accounts and as a reduction to existing deferred tax assets to the extent tax attributes are available to offset such liabilities. These liabilities involve judgment and estimation and are monitored by management based on the best information available including changes in tax regulations, the outcome of relevant court cases and other information.

As of June 30, 2015, the Company had approximately $20.6 million of unrecognized tax benefits, including $18.4 million recorded as a reduction of long-term deferred tax assets and $2.2 million in long-term income taxes payable. If recognized, approximately $2.2 million would be recorded as an income tax benefit. No benefit would be recorded for the remaining unrecognized tax benefits as the recognition would require a corresponding increase in the valuation allowance. As of December 31, 2014, the Company had $19.9 million of unrecognized tax benefits, including $17.8 million recorded as a reduction of long-term deferred tax assets and $2.1 million recorded in long-term income taxes payable.

Although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, the Company cannot reasonably estimate the outcome at this time.

The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. At June 30, 2015 and December 31, 2014, an immaterial amount of interest and penalties is included in long-term income taxes payable.

Rambus files income tax returns for the U.S., California, India and various other state and foreign jurisdictions. The U.S. federal returns are subject to examination from 2012 and forward. The California returns are subject to examination from 2009 and forward. In addition, any research and development credit carryforward or net operating loss carryforward generated in prior years and utilized in these or future years may also be subject to examination. The India returns are subject to examination from fiscal year ended March 2006 and forward. The Company is currently under examination by California for the 2010 and 2011 tax years. The Company’s India subsidiary is under examination by the Indian tax administration for years 2008 through 2010. These examinations may result in proposed adjustments to the income taxes as filed during these periods. Management regularly assesses the likelihood of outcomes resulting from income tax examinations to determine the adequacy of their provision for income taxes and believes their provision for unrecognized tax benefits is adequate.

Additionally, the Company's future effective tax rates could be adversely affected by earnings being higher than anticipated in countries where the Company has higher statutory rates or lower than anticipated in countries where it has lower statutory rates, by changes in valuation of its deferred tax assets and liabilities or by changes in tax laws or interpretations of those laws.

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13. Litigation and Asserted Claims

Rambus is not currently a party to any material pending legal proceeding; however, from time to time, Rambus may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.

The Company records a contingent liability when it is probable that a loss has been incurred and the amount is reasonably estimable in accordance with accounting for contingencies.

14. Agreements with SK hynix and Micron

SK hynix

On June 11, 2013, Rambus, SK hynix and certain related entities of SK hynix entered into a settlement agreement, pursuant to which the parties have agreed to release all claims against each other with respect to all outstanding litigation between them. Pursuant to the settlement agreement, Rambus and SK hynix entered into a semiconductor patent license agreement on June 11, 2013, under which SK hynix licenses from Rambus non-exclusive rights to certain Rambus patents and has agreed to pay Rambus cash amounts over the next five years. Under the license agreement, Rambus has granted to SK hynix (i) a paid-up perpetual patent license for certain identified SK hynix DRAM products and (ii) a five-year term patent license to all other DRAM and other semiconductor products.

In June 2015, the Company signed an amendment that extends its current agreement with SK hynix for an additional six years for use of Rambus memory-related patented innovations in SK hynix semiconductor products. The Company signed the original agreement with SK hynix for a five-year term in June 2013. Under the amendment, SK hynix has agreed to continue to pay the Company an average quarterly cash payment of $12.0 million which equates to $432.0 million over the remaining term of the agreement ending July 1, 2024, provided that (a) for each of the six full calendar quarters immediately following July 1, 2015, SK hynix will pay the Company a quarterly cash payment of $16.0 million, and (b) in addition, after December 1, 2017, SK hynix will have the option to make six quarterly cash payments of $8.0 million upon six months written notice. In addition, SK hynix has the option to renew the agreement for an additional three-year extension under the existing rate structure.

The agreements with SK hynix are considered a multiple element arrangement for accounting purposes. For a multiple element arrangement under the applicable accounting rules, the Company is required to identify specific elements of the arrangement and then determine when those elements should be recognized. The Company identified three elements in the arrangement: antitrust litigation settlement, settlement of past infringement, and license agreement. The Company considered several factors in determining the accounting fair value of the elements of the SK hynix agreements which included a third party valuation using an income approach (collectively the “SK hynix Fair Value”). The inputs and assumptions used in this accounting valuation were from a market participant perspective and included projected customer revenue, royalty rates, estimated discount rates, useful lives and income tax rates, among others. The development of a number of these inputs and assumptions in the model requires a significant amount of management judgment and discretion, and is based upon a number of factors, including the selection of industry comparables, market growth rates and other relevant factors. Changes in any number of these assumptions may have a substantial impact on the SK hynix Fair Value as assigned to each element. These inputs and assumptions represent management’s best estimates at the time of the transaction.

During the second quarter of 2015, the Company received cash consideration of $12.0 million from SK hynix. The amount was allocated between royalty revenue ($11.8 million) and gain from settlement ($0.2 million) based on the elements’ SK hynix Fair Value. During the first half of 2015, the Company received cash consideration of $24.0 million from SK hynix. The amount was allocated between royalty revenue ($23.6 million) and gain from settlement ($0.4 million) based on the elements’ SK hynix Fair Value.

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The cumulative cash receipts through June 30, 2015 and the remaining future cash receipts from the agreements with SK hynix are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements:



	Cumulative Received to-date as of June 30,		Estimated to Be Received in												Total Estimated Cash Receipts
	2015		Remainder of 2015		2016		2017		2018		2019		2020 and Thereafter		Total Estimated Cash Receipts
(in millions)
Royalty revenue	$	94.6	$	31.6	$	63.9	$	48.0	$	40.0	$	32.0	$	216.0	$	526.1
Gain from settlement	1.4		0.4		0.1		—		—		—		—		1.9
Total	$	96.0	$	32.0	$	64.0	$	48.0	$	40.0	$	32.0	$	216.0	$	528.0

Micron

On December 9, 2013, Rambus, Micron and certain related entities of Micron entered into a settlement agreement, pursuant to which the parties have agreed that they will release all claims against each other with respect to all outstanding litigation between them and certain other potential claims. Pursuant to the settlement agreement, Rambus and Micron entered into a semiconductor patent license agreement on December 9, 2013. Under the license agreement, Rambus has granted to Micron and its subsidiaries and certain affiliated entities (i) a paid-up perpetual patent license for certain identified Micron DRAM products and (ii) a seven-year term patent license to other memory and semiconductor products.

The agreements with Micron are considered a multiple element arrangement for accounting purposes. For a multiple element arrangement under the applicable accounting rules, the Company is required to identify specific elements of the arrangement and then determine when those elements should be recognized. The Company identified three elements in the arrangement: antitrust litigation settlement, settlement of past infringement, and license agreement. The Company considered several factors in determining the accounting fair value of the elements of the Micron agreements which included a third party valuation using an income approach (collectively the “Micron Fair Value”). The inputs and assumptions used in this accounting valuation were from a market participant perspective and included projected customer revenue, royalty rates, estimated discount rates, useful lives and income tax rates, among others. The development of a number of these inputs and assumptions in the model requires a significant amount of management judgment and discretion, and is based upon a number of factors, including the selection of industry comparables, market growth rates and other relevant factors. Changes in any number of these assumptions may have a substantial impact on the Micron Fair Value as assigned to each element. These inputs and assumptions represent management’s best estimates at the time of the transaction.

During the second quarter of 2015, the Company received cash consideration of $10.0 million from Micron. The amount was allocated between royalty revenue ($9.7 million) and gain from settlement ($0.3 million) based on the elements’ Micron Fair Value. During the first half of 2015, the Company received cash consideration of $20.0 million from Micron. The amount was allocated between royalty revenue ($19.4 million) and gain from settlement ($0.6 million) based on the elements’ Micron Fair Value.

The remaining $214.5 million is expected to be paid in successive quarterly payments of $10.0 million, concluding in the fourth quarter of 2020.

The cumulative cash receipts through June 30, 2015 and the remaining future cash receipts from the agreements with Micron are expected to be recognized as follows assuming no adjustments to the payments under the terms of the agreements:



	Cumulative Received to-date as of June 30,		Estimated to Be Received in												Total Estimated Cash Receipts
	2015		Remainder of 2015		2016		2017		2018		2019		2020		Total Estimated Cash Receipts
(in millions)
Royalty revenue	$	63.4	$	19.3	$	39.5	$	40.0	$	40.0	$	40.0	$	34.5	$	276.7
Gain from settlement	2.1		0.7		0.5		—		—		—		—		3.3
Total	$	65.5	$	20.0	$	40.0	$	40.0	$	40.0	$	40.0	$	34.5	$	280.0

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including any statements regarding trends in future revenue or results of operations, gross margin or operating margin, expenses, earnings or losses from operations, synergies or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning developments, performance or industry ranking; any statements regarding future economic conditions or performance; any statements regarding negotiations, litigation, investigations, claims, disputes or settlements; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Generally, the words “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “should,” “estimates,” “predicts,” “potential,” “continue,” “projecting” and similar expressions identify forward-looking statements. Our forward-looking statements are based on current expectations, forecasts and assumptions and are subject to risks, uncertainties and changes in condition, significance, value and effect. As a result of the factors described herein, and in the documents incorporated herein by reference, including, in particular, those factors described under “Risk Factors,” we undertake no obligation to publicly disclose any revisions to these forward-looking statements to reflect events or circumstances occurring subsequent to filing this report with the Securities and Exchange Commission.

Rambus, RDRAM™, XDR™, FlexIO™ and FlexPhase™ are trademarks or registered trademarks of Rambus Inc. Other trademarks that may be mentioned in this quarterly report on Form 10-Q are the property of their respective owners.

Industry terminology, used widely throughout this report, has been abbreviated and, as such, these abbreviations are defined below for your convenience:



Differential Power Analysis	DPA
Dynamic Random Access Memory	DRAM
Light Emitting Diodes	LED
Rambus Dynamic Random Access Memory	RDRAM™
eXtreme Data Rate	XDR™

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From time to time we will refer to the abbreviated names of certain entities and, as such, have provided a chart to indicate the full names of those entities for your convenience.



Advanced Micro Devices Inc.	AMD
Broadcom Corporation	Broadcom
Cryptography Research Division	CRD
Eaton Corporation plc	Eaton
Elpida Memory, Inc.	Elpida
Emerging Solutions Division	ESD
Freescale Semiconductor Inc.	Freescale
Fujitsu Limited	Fujitsu
General Electric Company	GE
Intel Corporation	Intel
International Business Machines Corporation	IBM
Lighting and Display Technology	LDT
LSI Corporation (now a division of Avago Technologies Limited)	LSI
Memory and Interfaces Division	MID
Micron Technologies, Inc.	Micron
Mobile Technology Division	MTD
Nanya Technology Corporation	Nanya
NVIDIA Corporation	NVIDIA
Qualcomm Incorporated	Qualcomm
Panasonic Corporation	Panasonic
Renesas Electronics	Renesas
Samsung Electronics Co., Ltd.	Samsung
SK hynix, Inc.	SK hynix
Sony Computer Electronics	Sony
ST Microelectronics N.V.	STMicroelectronics
Toshiba Corporation	Toshiba

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Business Overview

We are an innovative technology solutions company that brings invention to market. Our customers leverage our customizable platforms, services and tools to improve, differentiate and accelerate the development of products and services. Our extensive technology portfolio addresses the evolving power, performance and security requirements of the mobile, cloud computing and connected device markets. We drive innovations in memory, chip interfaces and architectures, end-to-end security, and advanced LED lighting, while also looking to disruptions and opportunities in tomorrow’s high-growth markets. We generate revenue by licensing our inventions and solutions and providing services to market-leading companies.

While we have historically focused our efforts on the development of technologies for electronics memory and chip interfaces, we have expanded our portfolio of inventions and solutions to address additional markets in lighting, chip and system security, as well as new areas within the semiconductor industry, such as computational sensing and imaging. We intend to continue our growth into new technology fields, consistent with our mission to create great value through our innovations and to make those technologies available through both our licensing and non-licensing business models.

We have four operational units: (1) Memory and Interfaces Division, or MID, which focuses on the design, development and licensing of technology that is related to memory and interfaces; (2) Cryptography Research Division, or CRD, which focuses on the design, development and licensing of technologies for chip and system security and anti-counterfeiting; (3) Emerging Solutions Division, or ESD, which includes our computational sensing and imaging group along with our development efforts in the area of emerging technologies; and (4) Lighting and Display Technologies, or LDT, which focuses on the design, development and licensing of technologies for lighting. As of June 30, 2015, MID and CRD were considered reportable segments as they met the quantitative thresholds for disclosure as a reportable segment. The results of the remaining operating segments were shown under “Other.” For additional information concerning segment reporting, see Note 5, “Segments and Major Customers,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Our inventions and technology solutions are primarily offered to our customers through either a patent license or a technology license. Royalties from patent licenses accounted for 82% and 85% of our consolidated revenue for the three and six months ended June 30, 2015, respectively, as compared to 88% and 89% for the three and six months ended June 30, 2014. Royalties from technology licenses accounted for 4% and 3% of our consolidated revenue for the three and six months ended June 30, 2015, respectively, as compared to 3% and 3% for the three and six months ended June 30, 2014. Today, a majority of our revenues are derived from patent licenses, through which we provide our customers a license to use a certain portion of our broad portfolio of patented inventions. The license provides our customers with a defined right to use our innovations in the customer's own digital electronics products, systems or services, as applicable. The licenses may also define the specific field of use where our customers may use or employ our inventions in their products. License agreements are structured with fixed, variable or a hybrid of fixed and variable royalty payments over certain defined periods ranging for periods of up to ten years. Leading consumer product, semiconductor and system companies such as AMD, Broadcom, Cisco, Freescale, Fujitsu, GE, IBM, Intel, LSI, Micron, Nanya, Panasonic, Qualcomm, Renesas, Samsung, SK hynix, STMicroelectronics and Toshiba have licensed our patents for use in their own products. The majority of our intellectual property in MID was developed in-house and we have expanded our business strategy of monetizing our MID intellectual property to include the sale of select intellectual property. As any sales executed under this expanded strategy represent a component of our ongoing major or central operations and activities, we will record the related proceeds as revenue.

We also offer our customers technology licenses to support the implementation and adoption of our technology in their products or services. Our customers include leading companies such as Eaton, GE, IBM, Panasonic, Qualcomm, Samsung, Sony and Toshiba. Our technology license offerings include a range of technologies for incorporation into our customers' products and systems. We also offer a range of services as part of our technology licenses which can include know-how and technology transfer, product design and development, system integration, and other services. These technology license agreements may have both a fixed price (non-recurring) component and ongoing royalties. Further, under technology licenses, our customers typically receive licenses to our patents necessary to implement these solutions in their products with specific rights and restrictions to the applicable patents elaborated in their individual contracts with us.

The remainder of our revenue is contract services revenue which includes license fees and engineering services fees. The timing and amounts invoiced to customers can vary significantly depending on specific contract terms and can therefore have a significant impact on deferred revenue or account receivables in any given period.

We intend to continue making significant expenditures associated with engineering, sales, general and administration and expect that these costs and expenses will continue to be a significant percentage of revenue in future periods. Whether such expenses increase or decrease as a percentage of revenue will be substantially dependent upon the rate at which our revenue or expenses change.

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Our strategy is to evolve from providing primarily patent licenses to providing additional technology, products and services while creating and leveraging strategic synergies to increase revenue. One of our goals is to supplement our patent licensing business with additional licensing opportunities for our technologies, products and services to be incorporated into our customers’ products and/or systems. Our technology licenses are designed to support the implementation and adoption of our technology into our customers’ products or services. As part of these offerings, we can provide a range of services that can include access to technical experts, advanced system design and analysis, hardware and software to enhance design and validation, system IP and specifications, and process-specific hard and soft macros, along with other services. These technology license agreements may have both a fixed price (non-recurring) component and ongoing royalties. Further, under technology licenses, our customers typically receive licenses to our patents necessary to implement these solutions in their products with specific rights and restrictions to the applicable patents elaborated in their individual contracts with us.

We believe that the successful execution of this strategy requires an exceptional business model that relies on the skills and talent of our employees. Accordingly, we seek to hire and retain world-class scientific and engineering expertise in all of our fields of technological focus, as well as the executive management and operating personnel required to successfully execute our business strategy. In order to attract the quality of employees required for this business model, we have created an environment and culture that encourages, fosters and supports research, development and innovation in breakthrough technologies with significant opportunities for broad industry adoption. We believe we have created a compelling company for inventors and innovators who are able to work within a business model and platform that focuses on technology development to drive strong future growth.

As of June 30, 2015, our semiconductor, lighting, security and other technologies are covered by 1,765 U.S. and foreign patents. Additionally, we have 674 patent applications pending. Some of the patents and pending patent applications are derived from a common parent patent application or are foreign counterpart patent applications. We have a program to file applications for and obtain patents in the United States and in selected foreign countries where we believe filing for such protection is appropriate and would further our overall business strategy and objectives. In some instances, obtaining appropriate levels of protection may involve prosecuting continuation and counterpart patent applications based on a common parent application. We believe our patented innovations provide our customers with the ability to achieve improved performance, lower risk, greater cost-effectiveness and other benefits in their products and services.

Executive Summary

In June 2015, we signed an amendment that extends our current agreement with SK hynix through July 1, 2024 for use of our memory-related patented innovations in SK hynix semiconductor products. We signed the original agreement with SK hynix for a five-year term in June 2013. With this amendment and extension of the agreement for an additional six years, SK hynix will continue making payments to us averaging $12.0 million per quarter for the next thirty-six quarters. In addition, SK hynix has the option to renew the agreement for an additional three-year extension under the existing rate structure. Furthermore, we renewed our patent license agreement with Renesas. The new agreement extends the relationship between us and Renesas until April 1, 2020, covering the use of our patented memory, interface, and security technologies in a wide range of logic integrated circuit (IC) products offered by Renesas.

Engineering expenses continue to play a key role in our efforts to maintain product innovations. Our engineering expenses for the three months ended June 30, 2015 increased $3.0 million as compared to the same period in 2014 primarily due to increased prototyping costs of $1.6 million, increased expenses related to software design tools of $1.2 million, increased headcount related expenses of $0.6 million, increased cost of sales associated with sales of light guides and security products and engineering services of $1.5 million offset by decreased accrual of retention bonuses of $0.9 million, decreased stock-based compensation expense of $0.6 million and decreased amortization costs of 0.4 million. Our engineering expenses for the six months ended June 30, 2015 increased $5.4 million as compared to the same period in 2014 primarily due to increased expenses related to software design tools of $2.2 million, increased prototyping costs of $2.0 million, increased headcount related expenses of $1.8 million, increased bonus accrual expense of $1.1 million and increased cost of sales associated with sales of light guides and security products and engineering services of $2.7 million offset by decreased accrual of retention bonuses of $2.1 million and decreased amortization costs of $0.8 million

Sales, general and administrative expenses for the three months ended June 30, 2015 decreased $1.3 million as compared to the same period in 2014 primarily due to decreased consulting costs of $0.7 million, decreased litigation costs of $0.4 million, decreased depreciation expense of $0.4 million, decreased general legal costs of $0.3 million and decreased sales and marketing costs of $0.2 million offset by increased headcount related expenses of $1.0 million. Sales, general and administrative expenses for the six months ended June 30, 2015 decreased $1.6 million as compared to the same period in 2014 primarily due to decreased consulting costs of $1.6 million, decreased depreciation expense of $0.8 million, decreased litigation costs of $0.6 million, decreased software and equipment maintenance costs of $0.6 million and decreased accrual of retention

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bonuses of $0.3 million offset by increased headcount related expenses of $1.9 million and increased stock-based compensation expense of $0.6 million.

Trends

There are a number of trends that may have a material impact on us in the future, including but not limited to, the evolution of memory technology, adoption of LEDs in general lighting, the use and adoption of our inventions or technologies and global economic conditions with the resulting impact on sales of consumer electronic systems.

We have a high degree of revenue concentration. Our top five customers for each reporting period represented approximately 66% and 65% of our revenue for the three and six months ended June 30, 2015, respectively, as compared to 62% and 60% for the three and six months ended June 30, 2014. As a result of renewing with Samsung in 2013 and settling with SK hynix and Micron in 2013, as well as extending our license agreement with SK hynix in June 2015, Samsung, SK hynix and Micron are expected to account for a significant portion of our ongoing licensing revenue. For the three and six months ended June 30, 2015, revenue from Micron, Samsung and SK hynix each accounted for 10% or more of our total revenue. For the three and six months ended June 30, 2014, revenue from Micron, Samsung and SK hynix each accounted for 10% or more of our total revenue.

The particular customers which account for revenue concentration have varied from period to period as a result of the addition of new contracts, expiration of existing contracts, renewals of existing contracts, industry consolidation and the volumes and prices at which the customers have recently sold to their customers. These variations are expected to continue in the foreseeable future.

Our licensing cycle is lengthy, costly and unpredictable with any degree of certainty. We may incur costs in any particular period before any associated revenue stream begins, if at all. Our lengthy license negotiation cycles could make our future revenue difficult to predict because we may not be successful in entering into licenses with our customers in the amounts projected, or on our anticipated timelines. In addition, while some of our license agreements provide for fixed, quarterly royalty payments, many of our license agreements provide for volume-based royalties, and may also be subject to caps on royalties in a given period. The sales volume and prices of our customers' products in any given period can be difficult to predict. As a result, our actual results may differ substantially from analyst estimates or our forecasts in any given quarter or over the next year.

The semiconductor industry is intensely competitive and highly cyclical, limiting our visibility with respect to future sales. To the extent that macroeconomic fluctuations negatively affect our principal customers, the demand for our technology may be significantly and adversely impacted and we may experience substantial period-to-period fluctuations in our operating results. The royalties we receive from our semiconductor customers are partly a function of the adoption of our technologies by system companies. Many system companies purchase semiconductors containing our technologies from our customers and do not have a direct contractual relationship with us. Our customers generally do not provide us with details as to the identity or volume of licensed semiconductors purchased by particular system companies. As a result, we face difficulty in analyzing the extent to which our future revenue will be dependent upon particular system companies. System companies face intense competitive pressure in their markets, which are characterized by extreme volatility, frequent new product introductions and rapidly shifting consumer preferences.

Global demand for effective security technologies continues to increase. In particular, highly integrated devices such as smart phones and tablets are increasingly used for applications requiring security such as mobile payments, content protection, corporate information and user data. Our CRD is primarily focused on positioning its DPA countermeasures, CryptoFirewall™ and CryptoManager™ technology solutions to capitalize on these trends and growing adoption among technology partners and customers.

The highly fragmented general lighting industry is undergoing a fundamental shift from incandescent technology to cold cathode fluorescent lights and LED driven technology due to the need to reduce energy consumption and to comply with government mandates. LED lighting typically saves energy costs as compared to existing installed lighting. Our LDT group's patents in LED edge-lit light guide technology can be applied in the design of next generation LED lighting products.

During 2013, we changed our business strategy to increase our focus on general lighting technologies instead of lower margin bulb products. With this shift to focus on the general lighting market, the strategy of the LDT group is to focus on providing the market with novel, patented light guide technologies and products to customers who are leading the transition to solid-state LED-based lamps and fixtures.

Another shift in our business strategy regarding our core display patents led us in 2013 to sell a set of patent assets where the purchaser of the patents can proceed independently with a licensing program. We have a net proceeds-sharing program in place with the purchaser of the patents upon their licensing of these patent assets. We retain the rights to use certain application

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techniques and may selectively engage with customers to license our intellectual property and technology for use and applications as permitted under our agreement, including without limitation, display panel and designs.

Our revenue from companies headquartered outside of the United States accounted for approximately 59%, and 61% of our total revenue for the three and six months ended June 30, 2015, respectively, as compared to 64% and 63% for the three and six months ended June 30, 2014, respectively. We expect that revenue derived from international customers will continue to represent a significant portion of our total revenue in the future. To date, all of the revenue from international customers has been denominated in U.S. dollars. However, to the extent that such customers’ sales to their customers are not denominated in U.S. dollars, any revenue that we receive as a result of such sales could be subject to fluctuations in currency exchange rates. In addition, if the effective price of licensed products sold by our foreign customers were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for licensed products could fall, which in turn would reduce our revenue. We do not use financial instruments to hedge foreign exchange rate risk.

For additional information concerning international revenue, see Note 5, “Segments and Major Customers,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q.

Engineering costs in the aggregate and as a percentage of revenue increased for the three months ended June 30, 2015 as compared to the same period in the prior year. Engineering costs in the aggregate and as a percentage of revenue increased for the six months ended June 30, 2015 as compared to the same period in the prior year. In the near term, we expect engineering costs in the aggregate to remain relatively flat.

Sales, general and administrative expenses in the aggregate and as a percentage of revenue decreased for the three months ended June 30, 2015 as compared to the same period in the prior year. Sales, general and administrative expenses in the aggregate decreased and as a percentage of revenue increased for the six months ended June 30, 2015 as compared to the same period in the prior year. In the past, our litigation expenses have been high and difficult to predict. Because we have successfully negotiated settlements and license agreements with SK hynix, Micron and Nanya during the course of 2013 and 2014, we have settled all outstanding litigation and should no longer have material litigation expenses related to these specific matters. In the near term, we expect our sales, general and administrative costs in the aggregate to remain relatively flat. To the extent litigation is again necessary, our expectations on the amount and timing of any future general and administrative costs is uncertain.

Our continued investment in research and development projects, involvement in any future litigation or other legal proceedings and any lower revenue from our customers in the future, will negatively affect our cash from operations.

As a part of our overall business strategy, from time to time, we evaluate businesses and technologies for potential acquisition that are aligned with our core business and designed to supplement our growth. In the first six months of 2015, we did not identify any acquisition opportunities that met our criteria from a strategic and valuation perspective.

We continue to evaluate our acquisition options, but to provide us with more flexibility in returning capital back to our stockholders, on January 21, 2015, our Board authorized a new share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares, which we may opportunistically execute from time to time.

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Results of Operations

The following table sets forth, for the periods indicated, the percentage of total revenue represented by certain items reflected in our unaudited condensed consolidated statements of operations:



	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Revenue:
Royalties	85.7	%	91.1	%	88.8	%	92.6	%
Contract and other revenue	14.3	%	8.9	%	11.2	%	7.4	%
Total revenue	100.0	%	100.0	%	100.0	%	100.0	%
Operating costs and expenses:
Cost of revenue*	16.7	%	13.9	%	15.7	%	13.4	%
Research and development*	40.1	%	36.2	%	39.6	%	35.2	%
Sales, general and administrative*	23.8	%	24.3	%	24.6	%	24.2	%
Gain from sale of intellectual property	(1.2	)%	—	%	(2.2	)%	(0.1	)%
Gain from settlement	(0.7	)%	(0.7	)%	(0.7	)%	(0.7	)%
Total operating costs and expenses	78.7	%	73.7	%	77.0	%	72.0	%
Operating income	21.3	%	26.3	%	23.0	%	28.0	%
Interest income and other income (expense), net	0.3	%	0.1	%	0.2	%	0.1	%
Interest expense	(4.2	)%	(11.4	)%	(4.2	)%	(12.1	)%
Interest and other income (expense), net	(3.9	)%	(11.3	)%	(4.0	)%	(12.0	)%
Income before income taxes	17.4	%	15.0	%	18.9	%	16.0	%
Provision for income taxes	8.0	%	8.4	%	7.7	%	7.7	%
Net income	9.4	%	6.6	%	11.2	%	8.3	%

_________________________________________

* Includes stock-based compensation:



Cost of revenue	0.0	%	0.0	%	0.0	%	0.0	%
Research and development	2.7	%	3.4	%	2.6	%	2.5	%
Sales, general and administrative	3.3	%	2.9	%	3.0	%	2.5	%



	Three Months						Six Months
	Ended June 30,				Change in		Ended June 30,				Change in
(Dollars in millions)	2015		2014		Percentage		2015		2014		Percentage
Total Revenue
Royalties	$	62.4	$	69.7	(10.5	)%	$	129.4	$	143.4	(9.8	)%
Contract and other revenue	10.4		6.8		53.8	%	16.3		11.4		43.3	%
Total revenue	$	72.8	$	76.5	(4.8	)%	$	145.7	$	154.8	(5.9	)%

Royalty Revenue

Patent Licenses

Our patent royalties decreased approximately $8.3 million to $59.4 million for the three months ended June 30, 2015 from $67.7 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from NVIDIA, Qualcomm and STMicroelectronics, offset by higher royalty revenue from IBM. Of the $59.4 million patent royalties for the three months ended June 30, 2015, $21.5 million is related to royalty revenue from settlement of past legal proceedings with SK Hynix and Micron.

Our patent royalties decreased approximately $13.7 million to $124.4 million for the six months ended June 30, 2015 from $138.1 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from Nanya, NVIDIA and STMicroelectronics, offset by higher royalty revenue from IBM. Of the $124.4 million patent royalties for the six months

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ended June 30, 2015, $43.0 million is related to royalty revenue from settlement of past legal proceedings with SK Hynix and Micron.

We are continuously in negotiations for licenses with prospective customers. We expect patent royalties will continue to vary from period to period based on our success in adding new customers, renewing or extending existing agreements, as well as the level of variation in our customers' reported shipment volumes, sales price and mix, offset in part by the proportion of customer payments that are fixed or hybrid in nature.

Technology Licenses

Royalties from technology licenses increased approximately $1.0 million to $3.0 million for the three months ended June 30, 2015 from $2.0 million for the same period in 2014. The increase was primarily due to higher security and lighting technology license revenue offset by lower royalties reported from decreased shipments of the Sony PlayStation^®3 product, DDR2 technology products and Serial Link products.

Royalties from technology licenses decreased approximately $0.3 million to $4.9 million for the six months ended June 30, 2015 from $5.2 million for the same period in 2014. The decrease was primarily due to lower royalties reported from decreased shipments of the Sony PlayStation^®3 product, DDR2 technology products and Serial Link products, offset by an increase in security and lighting technology license revenue.

We expect future technology licensing royalties from the Sony PlayStation®3 product to continue to decrease. In the future, we expect technology royalties will continue to vary from period to period based on our customers’ shipment volumes, sales prices, and product mix.

Royalty Revenue by Reportable Segments

Royalty revenue from the MID reportable segment, which includes patent and technology license royalties, decreased approximately $3.1 million to $53.6 million for the three months ended June 30, 2015 from $56.7 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from NVIDIA, Qualcomm and STMicroelectronics, offset by higher royalty revenue from IBM.

Royalty revenue from the MID reportable segment decreased approximately $10.3 million to $107.7 million for the six months ended June 30, 2015 from $118.0 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from Nanya, NVIDIA and STMicroelectronics offset by higher royalty revenue from IBM.

Royalty revenue from the CRD reportable segment, which includes patent and technology license royalties, decreased approximately $4.6 million to $7.9 million for the three months ended June 30, 2015 from $12.5 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from Qualcomm and STMicroelectronics.

Royalty revenue from the CRD reportable segment decreased $4.6 million to $20.3 million for the six months ended June 30, 2015 from $24.9 million for the same period in 2014. The decrease was primarily due to lower royalty revenue from a smartphone and tablet manufacturer and STMicroelectronics.

Royalty revenue from the Other segment was immaterial for both the three months ended June 30, 2015 and 2014, and increased period over period.

Royalty revenue from the Other segment was immaterial for both the six months ended June 30, 2015 and 2014, and increased period over period.

Contract and Other Revenue

Contract and other revenue consists of revenue from technology development and sale of security and lighting products. Contract and other revenue increased approximately $3.6 million to $10.4 million for the three months ended June 30, 2015 from $6.8 million for the same period in 2014. The increase was primarily due to increased revenue from security technology development projects and products as well as lighting technology development projects and sales of light guides.

Contract and other revenue increased approximately $5.0 million to $16.4 million for the six months ended June 30, 2015 from $11.4 million for the same period in 2014. The increase was primarily due to increased revenue from security technology development projects and products as well as lighting technology development projects and sales of light guides.

We believe that contract and other revenue will fluctuate over time based on our ongoing technology development contractual requirements, the amount of work performed, the timing of completing engineering deliverables, and the changes to work required, as well as new technology development contracts booked in the future.

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Contract and Other Revenue by Reportable Segments

Contract and other revenue from the MID reportable segment decreased $0.9 million to $1.0 million for the three months ended June 30, 2015 from $1.9 million as compared to the same period in 2014, primarily due to lower revenue from development projects.

Contract and other revenue from the MID reportable segment decreased $0.3 million to $1.6 million for the six months ended June 30, 2015 from $1.9 million as compared to the same period in 2014, primarily due to lower revenue from development projects.

Contract and other revenue from the CRD reportable segment increased approximately $3.6 million to $3.9 million for the three months ended June 30, 2015 from $0.3 million for the same period in 2014, primarily due to higher revenue from security products.

Contract and other revenue from the CRD reportable segment increased approximately $3.5 million to $4.3 million for the six months ended June 30, 2015 from $0.8 million for the same period in 2014, primarily due to higher revenue from security products.

Contract and other revenue from the Other segment increased approximately $1.0 million to $5.6 million for the three months ended June 30, 2015 from $4.6 million for the same period in 2014. The increase was primarily due to increased lighting technology development projects and sales of light guides.

Contract and other revenue from the Other segment increased approximately $1.7 million to $10.5 million for the six months ended June 30, 2015 from $8.8 million for the same period in 2014. The increase was primarily due to increased lighting technology development projects and sales of light guides.

Engineering costs:



	Three Months Ended						Six Months Ended
	June 30,				Change in		June 30,				Change in
(Dollars in millions)	2015		2014		Percentage		2015		2014		Percentage
Engineering costs
Cost of revenue	$	6.4	$	4.9	30.3	%	$	11.5	$	9.2	24.4	%
Amortization of intangible assets	5.7		5.7		—	%	11.4		11.4		—	%
Stock-based compensation	0.0		0.0		—	%	0.0		0.0		—	%
Total cost of revenue	12.1		10.6		14.1	%	22.9		20.6		10.8	%
Research and development	27.2		25.1		8.6	%	53.9		50.7		6.6	%
Stock-based compensation	2.0		2.6		(24.0	)%	3.8		3.9		(4.4	)%
Total research and development	29.2		27.7		5.5	%	57.7		54.6		5.8	%
Total engineering costs	$	41.3	$	38.3	7.9	%	$	80.6	$	75.2	7.2	%

Total engineering costs increased $3.0 million for the three months ended June 30, 2015 as compared to the same period in 2014 primarily due to increased prototyping costs of $1.6 million, increased expenses related to software design tools of $1.2 million, increased headcount related expenses of $0.6 million, increased cost of sales associated with sales of light guides and security products and engineering services of $1.5 million offset by decreased accrual of retention bonuses of $0.9 million, decreased stock-based compensation expense of $0.6 million and decreased amortization costs of 0.4 million.

Total engineering costs increased $5.4 million for the six months ended June 30, 2015 as compared to the same period in 2014 primarily due to increased expenses related to software design tools of $2.2 million, increased prototyping costs of $2.0 million, increased headcount related expenses of $1.8 million, increased bonus accrual expense of $1.1 million and increased cost of sales associated with sales of light guides and security products and engineering services of $2.7 million offset by decreased accrual of retention bonuses of $2.1 million and decreased amortization costs of $0.8 million.

In the future, engineering costs may be higher as we continue to make investments in the infrastructure and technologies required to maintain our product innovation in semiconductor, lighting, security and other technologies. However, in the near term, we expect engineering costs to remain relatively flat.

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Sales, general and administrative costs:



	Three Months Ended						Six Months Ended
	June 30,				Change in		June 30,				Change in
(Dollars in millions)	2015		2014		Percentage		2015		2014		Percentage
Sales, general and administrative costs
Sales, general and administrative costs	$	14.9	$	16.4	(8.9	)%	$	31.4	$	33.6	(6.5	)%
Stock-based compensation	2.4		2.2		7.9	%	4.4		3.8		15.3	%
Total sales, general and administrative costs	$	17.3	$	18.6	(6.9	)%	$	35.8	$	37.4	(4.3	)%

Total sales, general and administrative costs decreased $1.3 million for the three months ended June 30, 2015 as compared to the same period in 2014 primarily due to decreased consulting costs of $0.7 million, decreased litigation costs of $0.4 million, decreased depreciation expense of $0.4 million, decreased general legal costs of $0.3 million and decreased sales and marketing costs of $0.2 million offset by increased headcount related expenses of $1.0 million.

Total sales, general and administrative costs decreased $1.6 million for the six months ended June 30, 2015 as compared to the same period in 2014 primarily due to decreased consulting costs of $1.6 million, decreased depreciation expense of $0.8 million, decreased litigation costs of $0.6 million, decreased software and equipment maintenance costs of $0.6 million and decreased accrual of retention bonuses of $0.3 million offset by increased headcount related expenses of $1.9 million and increased stock-based compensation expense of $0.6 million.

In the future, sales, general and administrative costs will vary from period to period based on the trade shows, advertising, legal, acquisition and other sales, marketing and administrative activities undertaken, and the change in sales, marketing and administrative headcount in any given period. In the near term, we expect our sales, general and administrative costs to remain relatively flat.

Gain from sale of intellectual property:



	Three Months Ended						Six Months Ended
	June 30,				Change in		June 30,				Change in
(Dollars in millions)	2015		2014		Percentage		2015		2014		Percentage
Gain from sale of intellectual property	$	0.9	$	—	100.0	%	$	3.2	$	0.2	NM*

__________________________________


*	NM — percentage is not meaningful

During 2013, we sold portfolios of our patent assets covering lighting technologies. As part of these transactions, we received an initial upfront payment and expect to receive subsequent payments if and when the purchaser of the patents is successful in licensing that portfolio. During the first half of 2015, we received $3.2 million from the purchaser of the patents related to this transaction which was recorded as gain from sale of intellectual property.

During the first half of 2014, we sold portfolios of our patent assets covering wireless and other technologies.

Gain from settlement:



	Three Months Ended						Six Months Ended
	June 30,				Change in		June 30,				Change in
(Dollars in millions)	2015		2014		Percentage		2015		2014		Percentage
Gain from settlement	$	0.5	$	0.5	—	%	$	1.0	$	1.0	—	%

The settlements with SK hynix and Micron are multiple element arrangements for accounting purposes. For a multiple element arrangement, we are required to determine the fair value of the elements. We considered several factors in determining the accounting fair value of the elements of the settlement with SK hynix and the settlement with Micron which included a third party valuation using an income approach (the “SK hynix Fair Value” and "Micron Fair Value", respectively). The total gain from settlement related to the settlements with SK hynix and Micron was $1.9 million and $3.3 million, respectively. During the three months ended June 30, 2015 and 2014, we recognized $0.5 million in each period as gain from settlement, which

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represents the portion of the SK hynix Fair Value and Micron Fair Value of the cash consideration allocated to the resolution of the antitrust litigation settlements. During the six months ended June 30, 2015 and 2014, we recognized $1.0 million in each period as gain from settlement. Refer to Note 14, “Agreements with SK hynix and Micron,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for further discussion.

Interest and other income (expense), net:



	Three Months								Six Months
	Ended June 30,						Change in		Ended June 30,						Change in
(Dollars in millions)	2015			2014			Percentage		2015			2014			Percentage
Interest income and other income (expense), net	$	0.2		$	0.1		95.2	%	$	0.3		$	0.1		NM*
Interest expense	(3.1		)	(8.8		)	(64.8	)%	(6.1		)	(18.7		)	(67.0	)%
Interest and other income (expense), net	$	(2.9	)	$	(8.7	)	(66.7	)%	$	(5.8	)	$	(18.6	)	(68.6	)%

__________________________________


*	NM — percentage is not meaningful

Interest income and other income (expense), net, consists primarily of interest income generated from investments in high quality fixed income securities.

Interest expense consists of interest expense associated with our imputed facility lease obligations on the Sunnyvale and Ohio facilities and non-cash interest expense related to the amortization of the debt discount and issuance costs on the 5% convertible senior notes due 2014 (the “2014 Notes”) and 1.125% convertible senior notes due 2018 (the “2018 Notes”) as well as the coupon interest related to the notes. Interest expense decreased for the three and six months ended June 30, 2015 as compared to the same periods in 2014 primarily due to the repayment of the 2014 Notes in second quarter of 2014. We expect our non-cash interest expense to increase steadily as the 2018 Notes reach maturity.

Provision for income taxes:



	Three Months Ended								Six Months Ended
	June 30,						Change in		June 30,						Change in
(Dollars in millions)	2015			2014			Percentage		2015			2014			Percentage
Provision for income taxes	$	5.8		$	6.4		(9.2	)%	$	11.2		$	11.9		(5.2	)%
Effective tax rate	45.8		%	55.9		%			40.7		%	48.0		%

Our effective tax rates for the three and six months ended June 30, 2015 was different from the U.S. statutory tax rate applied to our pretax income primarily due to a full valuation allowance on our U.S. deferred tax assets, foreign withholding and income taxes, and state income taxes. The effective tax rate decreased for the three and six months ended June 30, 2015 as compared to the three and six months ended June 30, 2014, despite a relatively consistent provision for income taxes, due to higher quarterly pre-tax book income.

During the three and six months ended June 30, 2015, we paid withholding taxes of $4.8 million and $9.6 million, respectively. During the three and six months ended June 30, 2014, we paid withholding taxes of $4.8 million and $9.8 million, respectively. We recorded a provision for income taxes of $5.8 million and $11.2 million for the three and six months ended June 30, 2015, respectively which is primarily comprised withholding taxes, other foreign taxes and state income taxes.

Our effective tax rate for the three and six months ended June 30, 2014 was different from the U.S. statutory tax rate applied to our pretax income primarily due to a full valuation allowance on our U.S. deferred tax assets, foreign withholding and foreign income taxes, and state income taxes.

We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on our ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. We weighed both positive and negative evidence and determined that there is a continued need for a full valuation allowance on our deferred tax assets in the United States as of June 30, 2015. We emerged from a cumulative loss position over the previous three years during the first quarter of 2015. However, given economic uncertainties and the uncertainty of commercializing new business arrangements and new product acceptances, we currently believe there is not sufficient positive evidence of sustained future profitability to change our judgment regarding the need for a full valuation allowance on our deferred tax assets in the United States. The continued

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improvement in our operating results, along with successfully commercializing new business arrangements, signing new or renewing existing license agreements and managing costs would provide additional positive evidence in determining the need for the valuation allowance and could lead to reversal of substantially all of our valuation allowance on our deferred tax assets in the United States. Until such time, consumption of tax attributes to offset profits will reduce the overall level of deferred tax assets subject to valuation allowance. Should we determine that we would be able to realize our remaining deferred tax assets in the foreseeable future, an adjustment to our remaining deferred tax assets would cause a material increase to net income in the period such determination is made.

Liquidity and Capital Resources



	As of
	June 30, 2015		December 31, 2014
	(In millions)
Cash and cash equivalents	$	201.5	$	154.1
Marketable securities	146.6		146.0
Total cash, cash equivalents, and marketable securities	$	348.1	$	300.1



	Six Months Ended
	June 30,
	2015			2014
	(In millions)
Net cash provided by operating activities	$	38.8		$	26.5
Net cash used in investing activities	$	(0.3	)	$	(98.7	)
Net cash provided by (used in) financing activities	$	8.8		$	(166.8	)

Liquidity

We currently anticipate that existing cash, cash equivalents and marketable securities balances and cash flows from operations will be adequate to meet our cash needs for at least the next 12 months. Additionally, substantially all of our cash and cash equivalents are in the United States. Our cash needs for the six months ended June 30, 2015 were funded primarily from cash collected from our customers.

We do not anticipate any liquidity constraints as a result of either the current credit environment or investment fair value fluctuations. Additionally, we have the intent and ability to hold our debt investments that have unrealized losses in accumulated other comprehensive loss for a sufficient period of time to allow for recovery of the principal amounts invested. Additionally, we have no significant exposure to European sovereign debt. We continually monitor the credit risk in our portfolio and mitigate our credit risk exposures in accordance with our policies.

Operating Activities

Cash provided by operating activities of $38.8 million for the six months ended June 30, 2015 was primarily attributable to the cash generated from customer licensing. Changes in operating assets and liabilities for the six months ended June 30, 2015 primarily included a decrease in accrued salaries and benefits and other liabilities mainly due to the payout of the 2014 Corporate Incentive Plan, a decrease in accounts payable, an increase in deferred revenue and an increase in prepaids and other current assets.

Cash provided by operating activities of $26.5 million for the six months ended June 30, 2014 was primarily attributable to the cash generated from customer licensing. Changes in operating assets and liabilities for the six months ended June 30, 2014

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primarily included a decrease in accrued salaries and benefits and other liabilities primarily due to the payment of acquisition related retention bonuses and an increase in accounts receivable.

Investing Activities

Cash used in investing activities of $0.3 million for the six months ended June 30, 2015 primarily consisted of cash paid for purchases of available-for-sale marketable securities of $97.7 million and $3.1 million paid to acquire property, plant and equipment, offset by proceeds from the maturities and sales of available-for-sale marketable securities of $70.4 million and $26.6 million, respectively. In addition, we received $3.4 million from the sale of intellectual property.

Cash used in investing activities of $98.7 million for the six months ended June 30, 2014 primarily consisted of cash paid for purchases of available-for-sale marketable securities of $166.1 million, offset by proceeds from the maturities and sales of available-for-sale marketable securities of $51.4 million and $17.7 million, respectively. In addition, we paid $4.3 million to acquire property, plant and equipment. We also received $2.5 million from the sale of intellectual property.

Financing Activities

Cash provided by financing activities was $8.8 million for the six months ended June 30, 2015. We received proceeds of $9.0 million from the issuance of common stock under equity incentive plans and paid $0.2 million due to principal payments against the lease financing obligation.

Cash used in financing activities was $166.8 million for the six months ended June 30, 2014. We repaid $172.5 million in face value of 2014 Notes, upon maturity. We also received proceeds of $5.9 million from the issuance of common stock under equity incentive plans and paid $0.2 million due to payments under installment payment arrangements for fixed assets and principal payments against the lease financing obligation.

Contractual Obligations

As of June 30, 2015, our material contractual obligations were (in thousands):



	Total		Remainder of 2015		2016		2017		2018		2019		Thereafter
Contractual obligations (1)
Imputed financing obligation (2)	$	31,415	$	3,039	$	6,156	$	6,302	$	6,447	$	6,602	$	2,869
Leases and other contractual obligations	7,893		3,825		2,378		1,350		340		—		—
Software licenses (3)	7,403		5,045		2,188		170		—		—		—
Convertible notes	138,000		—		—		—		138,000		—		—
Interest payments related to convertible notes	5,434		776		1,553		1,553		1,552		—		—
Total	$	190,145	$	12,685	$	12,275	$	9,375	$	146,339	$	6,602	$	2,869

_________________________________________

(1)

The above table does not reflect possible payments in connection with uncertain tax benefits of approximately $20.6 million including $18.4 million recorded as a reduction of long-term deferred tax assets and $2.2 million in long-term income taxes payable as of June 30, 2015. As noted in Note 12, “Income Taxes,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q, although it is possible that some of the unrecognized tax benefits could be settled within the next 12 months, we cannot reasonably estimate the outcome at this time.

(2)


(3)	We have commitments with various software vendors for non-cancellable agreements generally having terms longer than one year.

Share Repurchase Program

During the six months ended June 30, 2015, we did not repurchase any shares of our common stock.

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On January 21, 2015, our Board approved a new share repurchase program authorizing the repurchase of up to an aggregate of 20.0 million shares. Share repurchases under the plan may be made through the open market, established plans or privately negotiated transactions in accordance with all applicable securities laws, rules, and regulations. There is no expiration date applicable to the plan. This new stock repurchase program replaced the previous program approved by the Board in February 2010 and canceled the remaining shares outstanding as part of the previous authorization. No repurchases have been made under the new plan.

We record stock repurchases as a reduction to stockholders’ equity. We record a portion of the purchase price of the repurchased shares as an increase to accumulated deficit when the price of the shares repurchased exceeds the average original proceeds per share received from the issuance of common stock.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, expense accrual, investments, income taxes and other contingencies. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting estimates include those regarding (1) revenue recognition, (2) goodwill and intangible assets, (3) income taxes and (4) stock-based compensation. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Recent Accounting Pronouncements

See Note 2, “Recent Accounting Pronouncements,” of Notes to Unaudited Condensed Consolidated Financial Statements of this Form 10-Q for discussion of recent accounting pronouncements including the respective expected dates of adoption.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to financial market risks, primarily arising from the effect of interest rate fluctuations on our investment portfolio. Interest rate fluctuation may arise from changes in the market’s view of the quality of the security issuer, the overall economic outlook, and the time to maturity of our portfolio. We mitigate this risk by investing only in high quality, highly liquid instruments. Securities with original maturities of one year or less must be rated by two of the three industry standard rating agencies as follows: A1 by Standard & Poor’s, P1 by Moody’s and/or F-1 by Fitch. Securities with original maturities of greater than one year must be rated by two of the following industry standard rating agencies as follows: AA- by Standard & Poor’s, Aa3 by Moody’s and/or AA- by Fitch. By corporate investment policy, we limit the amount of exposure to $15.0 million or 10% of the portfolio, whichever is lower, for any single non-U.S. Government issuer. A single U.S. Agency can represent up to 25% of the portfolio. No more than 20% of the total portfolio may be invested in the securities of an industry sector, with money market fund investments evaluated separately. Our policy requires that at least 10% of the portfolio be in securities with a maturity of 90 days or less. We may make investments in U.S. Treasuries, U.S. Agencies, corporate bonds and municipal bonds and notes with maturities up to 36 months. However, the bias of our investment portfolio is shorter maturities. All investments must be U.S. dollar denominated. Additionally, we have no significant exposure to European sovereign debt.

We invest our cash equivalents and marketable securities in a variety of U.S. dollar financial instruments such as U.S. Treasuries, U.S. Government Agencies, commercial paper and corporate notes. Our policy specifically prohibits trading securities for the sole purposes of realizing trading profits. However, we may liquidate a portion of our portfolio if we experience unforeseen liquidity requirements. In such a case, if the environment has been one of rising interest rates we may experience a realized loss, similarly, if the environment has been one of declining interest rates we may experience a realized gain. As of June 30, 2015, we had an investment portfolio of fixed income marketable securities of $322.6 million including cash equivalents. If market interest rates were to increase immediately and uniformly by 1.0% from the levels as of June 30, 2015, the fair value of the portfolio would decline by approximately $0.8 million. Actual results may differ materially from this sensitivity analysis.

The fair value of our convertible notes is subject to interest rate risk, market risk and other factors due to the convertible feature. The fair value of the convertible notes will generally increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of the convertible notes will generally increase as our common stock price increases and will generally

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decrease as our common stock price declines in value. The interest and market value changes affect the fair value of our convertible notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligation.

We invoice our customers in U.S. dollars. Although the fluctuation of currency exchange rates may impact our customers, and thus indirectly impact us, we do not attempt to hedge this indirect and speculative risk. Our overseas operations consist primarily of design centers in Canada, India and France and small business development offices in Japan, Korea and Taiwan. We monitor our foreign currency exposure; however, as of June 30, 2015, we believe our foreign currency exposure is not material enough to warrant foreign currency hedging.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit pursuant to the Securities and Exchange Act of 1934 as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2015, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are not currently a party to any material pending legal proceeding; however, from time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business, operating results, financial position or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors

Because of the following factors, as well as other variables affecting our operating results, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. See also “Note Regarding Forward-Looking Statements” at the beginning of this report.

Risks Associated With Our Business, Industry and Market Conditions

The success of our business depends on sustaining or growing our licensing revenue and the failure to achieve such revenue would lead to a material decline in our results of operations.

Our revenue consists mainly of patent and technology license fees paid for access to our patents, developed technology and development and support services provided to our customers. Our ability to secure and renew the licenses from which our revenues are derived depends on our customers adopting our technology and using it in the products they sell. Once secured, license revenue may be negatively affected by factors within and outside our control, including reductions in our customers’ sales prices, sales volumes, our failure to timely complete engineering deliverables, and the terms of such licenses. In addition, we cannot provide any assurance that we will be successful in renewing existing license agreements on equal or favorable terms or at all. If we do not achieve our revenue goals, our results of operations could decline.

We have traditionally operated in industries that are highly cyclical and competitive.

Our target customers are companies that develop and market high volume business and consumer products in semiconductors, computing, tablets, handheld devices, mobile applications, gaming and graphics, high-definition televisions and displays, general lighting, cryptography and data security. The electronics industry is intensely competitive and has been impacted by price erosion, rapid technological change, short product life cycles, cyclical market patterns and increasing foreign and domestic competition. We are subject to many risks beyond our control that influence whether or not we are successful in winning target customers or retaining existing customers, including, primarily, competition in a particular industry, market acceptance of such customers' products and the financial resources of such customers. In particular, DRAM manufacturers, which make up many of our customers, have suffered material losses and other adverse effects to their businesses, leading to industry consolidation from time-to-time that may result in loss of revenues under our existing license agreements or loss of target customers. As a result of ongoing competition in the industries in which we operate and volatility in various economies around the world, we may achieve a reduced number of licenses or may experience tightening of customers' operating budgets, difficulty or inability of our customers to pay our licensing fees, lengthening of the approval process for new licenses and consolidation among our customers. All of these factors may adversely affect the demand for our technology and may cause us to experience substantial fluctuations in our operating results.

We face competition from semiconductor and digital electronics products and systems companies, other semiconductor intellectual property companies that provide security cores and non-edge lit LED lighting options that are available to the market. We believe the principal competition for our technologies may come from our prospective customers, some of whom are evaluating and developing products based on technologies that they contend or may contend will not require a license from us. Some of our competitors use a system-level design approach similar to ours, including activities such as board and package design, power and signal integrity analysis, and thermal management. Many of these companies are larger and may have better access to financial, technical and other resources than we possess.

To the extent that alternatives might provide comparable system performance at lower than or similar cost to our technologies, or are perceived to require the payment of no or lower royalties, or to the extent other factors influence the industry, our customers and prospective customers may adopt and promote alternative technologies. Even to the extent we determine that such alternative technologies infringe our patents, there can be no assurance that we would be able to negotiate

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agreements that would result in royalties being paid to us without litigation, which could be costly and the results of which would be uncertain.

We may have to invest more resources in research and development than anticipated, which could increase our operating expenses and negatively impact our operating results.

If new competitors, technological advances by existing competitors, and/or development of new technologies or other competitive factors require us to invest significantly greater resources than anticipated in our research and development efforts, our operating expenses could increase. If we are required to invest significantly greater resources than anticipated in research and development efforts without an increase in revenue, our operating results would decline. We expect these expenses to increase in the foreseeable future as our technology development efforts continue.

Our revenue is concentrated in a few customers, and if we lose any of these customers through contract terminations or acquisitions, our revenue may decrease substantially.

We have a high degree of revenue concentration. Our top five customers for each reporting period represented approximately 65% and 60% of our revenue for the six months ended June 30, 2015 and 2014, respectively. For the six months ended June 30, 2015, revenue from Micron, Samsung and SK hynix each accounted for 10% or more of our total revenue. For the six months ended June 30, 2014, revenue from Micron, Samsung and SK hynix each accounted for 10% or more of our total revenue. Additionally, our top five customers represented approximately 62% of our revenue for both of the years ended December 31, 2014 and 2013. For the year ended December 31, 2014, revenue from Micron, Samsung and SK hynix each accounted for 10% or more of our total revenue. For the year ended December 31, 2013, revenue from Samsung accounted for 10% or more of our total revenue. We extended our license agreement with Samsung in December 2013, and we expect Samsung to continue to account for a significant portion of our licensing revenue. We also entered into settlement agreements with each of SK hynix and Micron (which included Elpida, which Micron had acquired in July 2013) in June 2013 and December 2013, respectively. In June 2015, we also extended our license agreement with SK hynix. As a result of the renewal and such settlements, we expect each of Samsung, SK hynix and Micron to account for a significant portion of our licensing revenue in the future. We expect to continue to experience significant revenue concentration for the foreseeable future.

In addition, our license agreements are complex and some contain terms that require us to provide certain customers with the lowest royalty rate that we provide to other customers for similar technologies, volumes and schedules. These clauses may limit our ability to effectively price differently among our customers, to respond quickly to market forces, or otherwise to compete on the basis of price. These clauses may also require us to reduce royalties payable by existing customers when we enter into or amend agreements with other customers. Any adjustment that reduces royalties from current customers or licensees may have a material adverse effect on our operating results and financial condition.

We continue to negotiate with customers and prospective customers to enter into license agreements. Any future agreement may trigger our obligation to offer comparable terms or modifications to agreements with our existing customers, which may be less favorable to us than the existing license terms. We expect licensing fees will continue to vary based on our success in renewing existing license agreements and adding new customers, as well as the level of variation in our customers' reported shipment volumes, sales price and mix, offset in part by the proportion of customer payments that are fixed. In particular, under our license agreement with Samsung, the license fees payable by Samsung are subject to certain adjustments and conditions, and we therefore cannot provide assurances that the revenues generated by this license will not decline in the future. In addition, some of our material license agreements may contain rights by the customer to terminate for convenience, or upon certain other events, such as change of control, material breach, insolvency or bankruptcy proceedings. If we are unsuccessful in entering into license agreements with new customers or renewing license agreements with existing customers, on favorable terms or at all, or if they are terminated, our results of operations may decline significantly.

Our business and operations could suffer in the event of security breaches.

Attempts by others to gain unauthorized access to our information technology systems are becoming more sophisticated. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. While we have not identified any material incidents of unauthorized access to date, the theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position and reputation, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. To the extent that any future security breach results in inappropriate disclosure of our customers' confidential information, we may incur liability.

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Failures in our products and services or in the products of our customers, including those resulting from security vulnerabilities, defects or errors, could harm our business.

Because the techniques used by hackers to access or sabotage secure chip and other technologies change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques and may not address them in our data security technologies. Furthermore, our data security technologies may fail to detect or prevent security breaches due to a number of reasons such as the evolving nature of such threats and the continual emergence of new threats. An actual or perceived security breach of our customers or their end-customers, regardless of whether the breach is attributable to the failure of our data security technologies, could adversely affect the market's perception of our security technologies. We may not be able to correct any security flaws or vulnerabilities promptly, or at all. Any breaches, defects, errors or vulnerabilities in our data security technologies could result in:


•	expenditure of significant financial and research and development resources in efforts to analyze, correct, eliminate or work around breaches, errors or defects or to address and eliminate vulnerabilities;


•	financial liability to customers for breach of certain contract provisions;


•	loss of existing or potential customers;


•	delayed or lost revenue;


•	delay or failure to attain market acceptance;


•	negative publicity, which would harm our reputation; and


•	litigation, regulatory inquiries or investigations that would be costly and harm our reputation.

Some of our revenue is subject to the pricing policies of our customers over whom we have no control.

We have no control over our customers' pricing of their products and there can be no assurance that licensed products will be competitively priced or will sell in significant volumes. Any premium charged by our customers in the price of memory and controller chips or other products over alternatives must be reasonable. If the benefits of our technology do not match the price premium charged by our customers, the resulting decline in sales of products incorporating our technology could harm our operating results.

Our licensing cycle is lengthy and costly, and our marketing and licensing efforts may be unsuccessful.

The process of persuading customers to adopt and license our chip interface, lighting, data security, and other technologies can be lengthy. Even if successful, there can be no assurance that our technologies will be used in a product that is ultimately brought to market, achieves commercial acceptance or results in significant royalties to us. We generally incur significant marketing and sales expenses prior to entering into our license agreements, generating a license fee and establishing a royalty stream from each customer. The length of time it takes to establish a new licensing relationship can take many months or even years. We may incur costs in any particular period before any associated revenue stream begins, if at all. If our marketing and sales efforts are very lengthy or unsuccessful, then we may face a material adverse effect on our business and results of operations as a result of failure to obtain or an undue delay in obtaining royalties.

Future revenue is difficult to predict for several reasons, and our failure to predict revenue accurately may result in our stock price declining.

Our lengthy license negotiation cycles could make our future revenue difficult to predict because we may not be successful in entering into licenses with our customers on our anticipated timelines.

In addition, while some of our license agreements provide for fixed, quarterly royalty payments, many of our license agreements provide for volume-based royalties, and may also be subject to caps on royalties in a given period. The sales volume and prices of our customers' products in any given period can be difficult to predict. As a result, our actual results may differ substantially from analyst estimates or our forecasts in any given quarter.

Furthermore, a portion of our revenue comes from development and support services provided to our customers. Depending upon the nature of the services, a portion of the related revenue may be recognized ratably over the support period, or may be recognized according to contract revenue accounting. Contract revenue accounting may result in deferral of the service fees to the completion of the contract, or may result in the recognition of service fees over the period in which services are performed on a percentage-of-completion basis.

We may fail to meet our publicly announced guidance or other expectations about our business, which would likely cause our stock price to decline.

We provide guidance regarding our expected financial and business performance including our anticipated future revenues and operating expenses. Correctly identifying the key factors affecting business conditions and predicting future events is inherently an uncertain process.

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Such guidance may not always be accurate or may vary from actual results due to our inability to meet our assumptions and the impact on our financial performance that could occur as a result of the various risks and uncertainties to our business as set forth in these risk factors. We offer no assurance that such guidance will ultimately be accurate, and investors should treat any such guidance with appropriate caution. If we fail to meet our guidance or if we find it necessary to revise such guidance, even if such failure or revision is seemingly insignificant, investors and analysts may lose confidence in us and the market value of our common stock could be materially adversely affected.

We have in the past made and may in the future make acquisitions or enter into mergers, strategic investments, sales of assets or other arrangements that may not produce expected operating and financial results.

From time to time, we engage in acquisitions, strategic transactions and strategic investments. We completed a number of acquisitions from 2009 to 2012. Many of our acquisitions or strategic investments entail a high degree of risk, including those involving new areas of technology and such investments may not become liquid for several years after the date of the investment, if at all. Our acquisitions or strategic investments may not generate the financial returns we expect, we may discover unidentified issues not discovered in due diligence, and we may be subject to liabilities that either are not covered by indemnification protection we may obtain or become subject to litigation. Achieving the anticipated benefits of business acquisitions depends in part upon our ability to integrate the acquired businesses in an efficient and effective manner. The integration of companies that have previously operated independently may result in significant challenges, including, among others: retaining key employees; successfully integrating new employees, business systems and technology; retaining customers of the acquired business; minimizing the diversion of management's attention from ongoing business matters; coordinating geographically separate organizations; consolidating research and development operations; and consolidating corporate and administrative infrastructures.

Our strategic investments in new areas of technology may involve significant risks and uncertainties, including distraction of management from current operations, greater than expected liabilities and expenses, inadequate return of capital, and unidentified issues not discovered in due diligence. These investments are inherently risky and may not be successful.

In addition, we may record impairment charges related to our acquisitions or strategic investments. For example, in the third quarter of 2013, we recorded an impairment of goodwill related to our MTD reporting unit. Any losses or impairment charges that we incur related to acquisitions, strategic investments or sales of assets will have a negative impact on our financial results, and we may continue to incur new or additional losses related to acquisitions or strategic investments.

We may have to incur debt or issue equity securities to pay for any future acquisition, which debt could involve restrictive covenants or which equity security issuance could be dilutive to our existing stockholders.

From time to time, we may also divest certain assets, where we may be required to provide certain representations, warranties and covenants to their buyers. While we would seek to ensure the accuracy of such representations and warranties and fulfillment of any ongoing obligations, we may not be completely successful and consequently may be subject to claims by a purchaser of such assets.

A substantial portion of our revenue is derived from sources outside of the United States and this revenue and our business generally are subject to risks related to international operations that are often beyond our control.

For the six months ended June 30, 2015 and 2014, revenues received from our international customers constituted approximately 61% and 63%, respectively, of our total revenue. Additionally, for the years ended December 31, 2014 and 2013, revenues received from our international customers constituted approximately 63% and 70%, respectively, of our total revenue. We expect that future revenue derived from international sources will continue to represent a significant portion of our total revenue.

To date, all of the revenue from international customers has been denominated in U.S. dollars. However, to the extent that such customers' sales are not denominated in U.S. dollars, any royalties which are based on a percentage of the customers' sales that we receive as a result of such sales could be subject to fluctuations in currency exchange rates. In addition, if the effective price of licensed products sold by our foreign customers were to increase as a result of fluctuations in the exchange rate of the relevant currencies, demand for licensed products could fall, which in turn would reduce our royalties. We do not use financial instruments to hedge foreign exchange rate risk.

We currently have international design operations in India and France and business development operations in Japan, Korea and Taiwan. Our international operations and revenue are subject to a variety of risks which are beyond our control, including:


•	hiring, maintaining and managing a workforce and facilities remotely and under various legal systems;


•	natural disasters, acts of war, terrorism, widespread illness or security breaches;


•	export controls, tariffs, import and licensing restrictions and other trade barriers;

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•	profits, if any, earned abroad being subject to local tax laws and not being repatriated to the United States or, if repatriation is possible, limited in amount;


•	adverse tax treatment of revenue from international sources and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding, income or other taxes in foreign jurisdictions;


•	unanticipated changes in foreign government laws and regulations;


•	lack of protection of our intellectual property and other contract rights by jurisdictions in which we may do business to the same extent as the laws of the United States;


•	social, political and economic instability;


•	geopolitical issues, including changes in diplomatic and trade relationships; and


•	cultural differences in the conduct of business both with customers and in conducting business in our international facilities and international sales offices.

We and our customers are subject to many of the risks described above with respect to companies which are located in different countries. There can be no assurance that one or more of the risks associated with our international operations will not result in a material adverse effect on our business, financial condition or results of operations.

Weak global economic conditions may adversely affect demand for the products and services of our customers.

Our operations and performance depend significantly on worldwide economic conditions. Uncertainty about global or regional economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit, negative financial news and declines in income or asset values, which could have a material negative effect on the demand for the products of our customers in the foreseeable future. If our customers experience reduced demand for their products as a result of global or regional economic conditions or otherwise, this could result in reduced royalty revenue and our business and results of operations could be harmed.

If our counterparties are unable to fulfill their financial and other obligations to us, our business and results of operations may be affected adversely.

Any downturn in economic conditions or other business factors could threaten the financial health of our counterparties, including companies with whom we have entered into licensing and/or settlement agreements, and their ability to fulfill their financial and other obligations to us. Such financial pressures on our counterparties may eventually lead to bankruptcy proceedings or other attempts to avoid financial obligations that are due to us. Because bankruptcy courts have the power to modify or cancel contracts of the petitioner which remain subject to future performance and alter or discharge payment obligations related to pre-petition debts, we may receive less than all of the payments that we would otherwise be entitled to receive from any such counterparty as a result of bankruptcy proceedings.

If we are unable to attract and retain qualified personnel, our business and operations could suffer.

Our success is dependent upon our ability to identify, attract, compensate, motivate and retain qualified personnel, especially engineers, senior management and other key personnel. We recently have faced retention issues, such as when our employee turnover accelerated after our reduction-in-force efforts in 2012 and 2013 and subsequent voluntary and involuntary separations. The loss of the services of any key employees could be disruptive to our development efforts or business relationships and could cause our business and operations to suffer.

We are subject to various government restrictions and regulations, including on the sale of products and services that use encryption technology and those related to privacy and other consumer protection matters.

Various countries have adopted controls, license requirements and restrictions on the export, import and use of products or services that contain encryption technology. In addition, governmental agencies have proposed additional requirements for encryption technology, such as requiring the escrow and governmental recovery of private encryption keys. Restrictions on the sale or distribution of products or services containing encryption technology may impact the ability of CRD to license its data security technologies to the manufacturers and providers of such products and services in certain markets or may require CRD or its customers to make changes to the licensed data security technology that is embedded in such products to comply with such restrictions. Government restrictions, or changes to the products or services of CRD's customers to comply with such restrictions, could delay or prevent the acceptance and use of such customers' products and services. In addition, the United States and other countries have imposed export controls that prohibit the export of encryption technology to certain countries, entities and individuals. Our failure to comply with export and use regulations concerning encryption technology of CRD could subject us to sanctions and penalties, including fines, and suspension or revocation of export or import privileges.

We are subject to a variety of laws and regulations in the United States, the European Union and other countries that involve, for example, user privacy, data protection and security, content and consumer protection. A number of proposals are pending before federal, state, and foreign legislative and regulatory bodies that could significantly affect our business. Existing

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and proposed laws and regulations can be costly to comply with and can delay or impede the development of new products, result in negative publicity, increase our operating costs and subject us to claims or other remedies.

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC established new disclosure and reporting requirements for those companies who use "conflict" minerals mined from the Democratic Republic of Congo and adjoining countries in their products, whether or not these products are manufactured by third parties. While these requirements continue to be the subject of ongoing litigation and, as a result, uncertainty, we submitted a conflicts minerals report on Form SD with the SEC on May 30, 2014. These requirements could affect the sourcing and availability of minerals that are used in the manufacture of our products. We have to date incurred costs and expect to incur significant additional costs associated with complying with the disclosure requirements, including for example, due diligence in regard to the sources of any conflict minerals used in our products, in addition to the cost of remediation and other changes to products, processes, or sources of supply as a consequence of such verification activities. Additionally, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins of all minerals used in our products through the due diligence procedures that we implement. We may also face challenges with government regulators and our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are conflict free.

Our operations are subject to risks of natural disasters, acts of war, terrorism, widespread illness or security breach at our domestic and international locations, any one of which could result in a business stoppage and negatively affect our operating results.

Our business operations depend on our ability to maintain and protect our facilities, computer systems and personnel, which are primarily located in the San Francisco Bay Area and Bangalore, India. The San Francisco Bay Area is in close proximity to known earthquake fault zones. Our facilities and transportation for our employees are susceptible to damage from earthquakes and other natural disasters such as fires, floods and similar events. Should a catastrophe disable our facilities, we do not have readily available alternative facilities from which we could conduct our business, so any resultant work stoppage could have a negative effect on our operating results. We also rely on our network infrastructure and technology systems for operational support and business activities which are subject to physical and cyber damage, and also susceptible to other related vulnerabilities common to networks and computer systems. Acts of terrorism, widespread illness, war and any event that causes failures or interruption in our network infrastructure and technology systems could have a negative effect at our international and domestic facilities and could harm our business, financial condition, and operating results.

We do not have extensive experience in manufacturing and marketing products and, as a result, may be unable to sustain and grow a profitable commercial market for new and existing products.

We do not have extensive experience in manufacturing and marketing products and, as a result, we rely, and may rely in the future, on manufacturing supply chain partners and/or sales and distribution channels for certain of our new and existing products. Certain of these partners are, and may be, our sole manufacturer or sole source of production materials. In addition, many of our purchases are on a purchase order basis, and we do not generally have long-term contracts with our contract manufacturers or suppliers. If we are unable to secure and manage manufacturing supply chain partners and/or sales and distribution channels, or if our partners do not effectively manufacture and/or sell our products, or if we are unable to obtain the necessary production materials to produce our products, our operating results may be adversely affected.

Warranty and product liability claims brought against us could cause us to incur significant costs and adversely affect our operating results as well as our reputation and relationships with customers.

We may from time to time be subject to warranty and product liability claims with regard to product performance and effects of our lighting solutions. We could incur losses as a result of repair and replacement costs in response to customer complaints or in connection with the resolution of contemplated or actual legal proceedings relating to such claims. In addition to potential losses arising from claims and related legal proceedings, product liability claims could affect our reputation and our relationship with customers.

Our business and operating results could be harmed if we undertake any restructuring activities.

From time to time, we may undertake restructurings of our business. There are several factors that could cause restructurings to have adverse effects on our business, financial condition and results of operations. These include potential disruption of our operations, the development of our technology, the deliveries to our customers and other aspects of our business. Loss of sales, service and engineering talent, in particular, could damage our business. Any restructuring would require substantial management time and attention and may divert management from other important work. Employee reductions or other restructuring activities also would cause us to incur restructuring and related expenses such as severance expenses. Moreover, we could encounter delays in executing any restructuring plans, which could cause further disruption and additional unanticipated expense.

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Risks Related to Capitalization Matters and Corporate Governance

The price of our common stock may continue to fluctuate.

Our common stock is listed on The NASDAQ Global Select Market under the symbol “RMBS.” The trading price of our common stock has at times experienced price volatility and may continue to fluctuate significantly in response to various factors, some of which are beyond our control. Some of these factors include:


•	any progress, or lack of progress, real or perceived, in the development of products that incorporate our innovations and technology companies' acceptance of our products, including the results of our efforts to expand into new target markets;


•	our signing or not signing new licenses and the loss of strategic relationships with any customer;


•	announcements of technological innovations or new products by us, our customers or our competitors;


•	changes in our strategies, including changes in our licensing focus and/or acquisitions of companies with business models or target markets different from our own;


•	positive or negative reports by securities analysts as to our expected financial results and business developments;


•	developments with respect to patents or proprietary rights and other events or factors;


•	new litigation and the unpredictability of litigation results or settlements; and


•	issuance of additional securities by us, including in acquisitions.

In addition, the stock market in general, and prices for companies in our industry in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the price of our common stock, regardless of our operating performance.

We have outstanding senior convertible notes in an aggregate principal amount totaling $138.0 million. Because these notes are convertible into shares of our common stock, volatility or depressed prices of our common stock could have a similar effect on the trading price of such notes. In addition, the existence of these notes may encourage short selling in our common stock by market participants because the conversion of the notes could depress the price of our common stock.

We have been party to, and may in the future be subject to, lawsuits relating to securities law matters which may result in unfavorable outcomes and significant judgments, settlements and legal expenses which could cause our business, financial condition and results of operations to suffer.

We and certain of our current and former officers and directors, as well as our current auditors, were subject from 2006 to 2011 to several stockholder derivative actions, securities fraud class actions and/or individual lawsuits filed in federal court against us and certain of our current and former officers and directors. The complaints generally alleged that the defendants violated the federal and state securities laws and stated state law claims for fraud and breach of fiduciary duty. Although to date these complaints have either been settled or dismissed, the amount of time to resolve any future lawsuits is uncertain, and these matters could require significant management and financial resources. Unfavorable outcomes and significant judgments, settlements and legal expenses in litigation related to any future securities law claims could have material adverse impacts on our business, financial condition, results of operations, cash flows and the trading price of our common stock.

We are leveraged financially, which could adversely affect our ability to adjust our business to respond to competitive pressures and to obtain sufficient funds to satisfy our future research and development needs, to protect and enforce our intellectual property, and to meet other needs.

We have material indebtedness. In August 2013, we issued $138.0 million aggregate principal amount of our 2018 Notes which remain outstanding. The degree to which we are leveraged could have negative consequences, including, but not limited to, the following:


•	we may be more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in responding to changing business and economic conditions;


•	our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, litigation, general corporate or other purposes may be limited;


•	a substantial portion of our cash flows from operations in the future may be required for the payment of the principal amount of our existing indebtedness when it becomes due at maturity in August 2018; and


•	we may be required to make cash payments upon any conversion of the 2018 Notes, which would reduce our cash on hand.

A failure to comply with the covenants and other provisions of our debt instruments could result in events of default under

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such instruments, which could permit acceleration of all of our outstanding 2018 Notes. Any required repurchase of the 2018 Notes as a result of a fundamental change or acceleration of the 2018 Notes would reduce our cash on hand such that we would not have those funds available for use in our business.

If we are at any time unable to generate sufficient cash flows from operations to service our indebtedness when payment is due, we may be required to attempt to renegotiate the terms of the instruments relating to the indebtedness, seek to refinance all or a portion of the indebtedness or obtain additional financing. There can be no assurance that we will be able to successfully renegotiate such terms, that any such refinancing would be possible or that any additional financing could be obtained on terms that are favorable or acceptable to us.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Changing laws, regulations and standards relating to corporate governance and public disclosure have historically created uncertainty for companies such as ours. Any new or changed laws, regulations and standards are subject to varying interpretations due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Our certificate of incorporation and bylaws, Delaware law and our outstanding convertible notes contain provisions that could discourage transactions resulting in a change in control, which may negatively affect the market price of our common stock.

Our certificate of incorporation, our bylaws and Delaware law contain provisions that might enable our management to discourage, delay or prevent a change in control. In addition, these provisions could limit the price that investors would be willing to pay in the future for shares of our common stock. Pursuant to such provisions:


•	our board of directors is authorized, without prior stockholder approval, to create and issue preferred stock, commonly referred to as “blank check” preferred stock, with rights senior to those of common stock, which means that a stockholder rights plan could be implemented by our board;


•	our board of directors is staggered into two classes, only one of which is elected at each annual meeting;


•	stockholder action by written consent is prohibited;


•	nominations for election to our board of directors and the submission of matters to be acted upon by stockholders at a meeting are subject to advance notice requirements;


•	certain provisions in our bylaws and certificate of incorporation such as notice to stockholders, the ability to call a stockholder meeting, advance notice requirements and action of stockholders by written consent may only be amended with the approval of stockholders holding 66 2/3% of our outstanding voting stock;


•	our stockholders have no authority to call special meetings of stockholders; and


•	our board of directors is expressly authorized to make, alter or repeal our bylaws.

We are also subject to Section 203 of the Delaware General Corporation Law, which provides, subject to enumerated exceptions, that if a person acquires 15% or more of our outstanding voting stock, the person is an “interested stockholder” and may not engage in any “business combination” with us for a period of three years from the time the person acquired 15% or more of our outstanding voting stock.

Certain provisions of our outstanding 2018 Notes could make it more difficult or more expensive for a third party to acquire us. Upon the occurrence of certain transactions constituting a fundamental change, holders of such 2018 Notes will have the right, at their option, to require us to repurchase, at a cash repurchase price equal to 100% of the principal amount plus accrued and unpaid interest on such 2018 Notes, all or a portion of their 2018 Notes. We may also be required to increase the conversion rate of such 2018 Notes in the event of certain fundamental changes.

Unanticipated changes in our tax rates or in the tax laws and regulations could expose us to additional income tax liabilities which could affect our operating results and financial condition.

We are subject to income taxes in both the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes and, in the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is uncertain. Our effective tax rate could be adversely affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and regulations as well as other factors. Our tax determinations are regularly subject to audit by tax authorities and developments in those audits could adversely affect our income tax provision, and we are currently undergoing such audits of certain of our tax returns. Although we believe that our tax estimates are reasonable, the final determination of tax audits or tax disputes may be different from what is reflected in our historical income tax provisions which could affect our operating results.

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Litigation, Regulation and Business Risks Related to our Intellectual Property

We have in the past, and may in the future, become engaged in litigation stemming from our efforts to protect and enforce our patents and intellectual property and make other claims, which could adversely affect our intellectual property rights, distract our management and cause substantial expenses and declines in our revenue and stock price.

We seek to diligently protect our intellectual property rights and will continue to do so. While we are not currently involved in intellectual property litigation, any future litigation, whether or not determined in our favor or settled by us, would be expected to be costly, may cause delays applicable to our business (including delays in negotiating licenses with other actual or potential customers), would be expected to tend to discourage future design partners, would tend to impair adoption of our existing technologies and would divert the efforts and attention of our management and technical personnel from other business operations. In addition, we may be unsuccessful in any litigation if we have difficulty obtaining the cooperation of former employees and agents who were involved in our business during the relevant periods related to our litigation and are now needed to assist in cases or testify on our behalf. Furthermore, any adverse determination or other resolution in litigation could result in our losing certain rights beyond the rights at issue in a particular case, including, among other things: our being effectively barred from suing others for violating certain or all of our intellectual property rights; our patents being held invalid or unenforceable or not infringed; our being subjected to significant liabilities; our being required to seek licenses from third parties; our being prevented from licensing our patented technology; or our being required to renegotiate with current customers on a temporary or permanent basis.

From time to time, we are subject to proceedings by government agencies that may result in adverse determinations against us and could cause our revenue to decline substantially.

An adverse resolution by or with a governmental agency could result in severe limitations on our ability to protect and license our intellectual property, and could cause our revenue to decline substantially. Third parties have and may attempt to use adverse findings by a government agency to limit our ability to enforce or license our patents in private litigations, to challenge or otherwise act against us with respect to such government agency proceedings.

Further, third parties have sought and may seek review and reconsideration of the patentability of inventions claimed in certain of our patents by the U.S. Patent and Trademark Office (“PTO”) and/or the European Patent Office (the “EPO”). Any re-examination proceedings may be reviewed by the PTO's Patent Trial and Appeal Board (“PTAB”). The PTAB and the related former Board of Patent Appeals and Interferences (BPAI) have previously issued decisions in a few cases, finding some challenged claims of Rambus' patents to be valid, and others to be invalid. Decisions of the PTAB are subject to further PTO proceedings and/or appeal to the Court of Appeals for the Federal Circuit. A final adverse decision, not subject to further review and/or appeal, could invalidate some or all of the challenged patent claims and could also result in additional adverse consequences affecting other related U.S. or European patents, including in any intellectual property litigation. If a sufficient number of such patents are impaired, our ability to enforce or license our intellectual property would be significantly weakened and could cause our revenue to decline substantially.

The pendency of any governmental agency acting as described above may impair our ability to enforce or license our patents or collect royalties from existing or potential customers, as any litigation opponents may attempt to use such proceedings to delay or otherwise impair any pending cases and our existing or potential customers may await the final outcome of any proceedings before agreeing to new licenses or to paying royalties.

Litigation or other third-party claims of intellectual property infringement could require us to expend substantial resources and could prevent us from developing or licensing our technology on a cost-effective basis.

Our research and development programs are in highly competitive fields in which numerous third parties have issued patents and patent applications with claims closely related to the subject matter of our programs. We have also been named in the past, and may in the future be named, as a defendant in lawsuits claiming that our technology infringes upon the intellectual property rights of third parties. As we develop additional products and technology, we may face claims of infringement of various patents and other intellectual property rights by third parties. In the event of a third-party claim or a successful infringement action against us, we may be required to pay substantial damages, to stop developing and licensing our infringing technology, to develop non-infringing technology, and to obtain licenses, which could result in our paying substantial royalties or our granting of cross licenses to our technologies. We may not be able to obtain licenses from other parties at a reasonable cost, or at all, which could cause us to expend substantial resources, or result in delays in, or the cancellation of, new products.

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If we are unable to protect our inventions successfully through the issuance and enforcement of patents, our operating results could be adversely affected.

We have an active program to protect our proprietary inventions through the filing of patents. There can be no assurance, however, that:


•	any current or future U.S. or foreign patent applications will be approved and not be challenged by third parties;


•	our issued patents will protect our intellectual property and not be challenged by third parties;


•	the validity of our patents will be upheld;


•	our patents will not be declared unenforceable;


•	the patents of others will not have an adverse effect on our ability to do business;


•	Congress or the U.S. courts or foreign countries will not change the nature or scope of rights afforded patents or patent owners or alter in an adverse way the process for seeking or enforcing patents;


•	changes in law will not be implemented, or changes in interpretation of such laws will occur, that will affect our ability to protect and enforce our patents and other intellectual property;


•	new legal theories and strategies utilized by our competitors will not be successful;


•	others will not independently develop similar or competing chip interfaces or design around any patents that may be issued to us; or


•	factors such as difficulty in obtaining cooperation from inventors, pre-existing challenges or litigation, or license or other contract issues will not present additional challenges in securing protection with respect to patents and other intellectual property that we acquire.

If any of the above were to occur, our operating results could be adversely affected.

Furthermore, policymakers, including the President, as well as certain industry stakeholders, have proposed reforming U.S. patent laws and regulations to address perceived issues surrounding patent litigation initiated by non-practicing entities. The federal courts, the USPTO, the Federal Trade Commission, and the U.S. International Trade Commission have also recently taken certain actions and issued rulings that have been viewed as unfavorable to patentees. While we cannot predict what form any new patent reform laws or regulations may ultimately take, or what impact they may have on our business, any laws or regulations that restrict or negatively impact our ability to enforce our patent rights against third parties could have a material adverse effect on our business.

In addition, our patents will continue to expire according to their terms, with expiration dates ranging from 2015 to 2038. Our failure to continuously develop or acquire successful innovations and obtain patents on those innovations could significantly harm our business, financial condition, results of operations, or cash flows.

Our inability to protect and own the intellectual property we create would cause our business to suffer.

We rely primarily on a combination of license, development and nondisclosure agreements, trademark, trade secret and copyright law and contractual provisions to protect our non-patentable intellectual property rights. If we fail to protect these intellectual property rights, our customers and others may seek to use our technology without the payment of license fees and royalties, which could weaken our competitive position, reduce our operating results and increase the likelihood of costly litigation. The growth of our business depends in large part on the use of our intellectual property in the products of third party manufacturers, and our ability to enforce intellectual property rights against them to obtain appropriate compensation. In addition, effective trade secret protection may be unavailable or limited in certain foreign countries. Although we intend to protect our rights vigorously, if we fail to do so, our business will suffer.

We rely upon the accuracy of our customers' recordkeeping, and any inaccuracies or payment disputes for amounts owed to us under our licensing agreements may harm our results of operations.

Many of our license agreements require our customers to document the manufacture and sale of products that incorporate our technology and report this data to us on a quarterly basis. While licenses with such terms give us the right to audit books and records of our customers to verify this information, audits rarely are undertaken because they can be expensive, time consuming, and potentially detrimental to our ongoing business relationship with our customers. Therefore, we typically rely on the accuracy of the reports from customers without independently verifying the information in them. Our failure to audit our customers' books and records may result in our receiving more or less royalty revenue than we are entitled to under the terms of our license agreements. If we conduct royalty audits in the future, such audits may trigger disagreements over contract terms with our customers and such disagreements could hamper customer relations, divert the efforts and attention of our management from normal operations and impact our business operations and financial condition.

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Any dispute regarding our intellectual property may require us to indemnify certain customers, the cost of which could severely hamper our business operations and financial condition.

In any potential dispute involving our patents or other intellectual property, our customers could also become the target of litigation. While we generally do not indemnify our customers, some of our license agreements provide limited indemnities, and some require us to provide technical support and information to a customer that is involved in litigation involving use of our technology. In addition, we may agree to indemnify others in the future. Any of these indemnification and support obligations could result in substantial expenses. In addition to the time and expense required for us to indemnify or supply such support to our customers, a customer's development, marketing and sales of licensed semiconductors, lighting, mobile communications and data security technologies could be severely disrupted or shut down as a result of litigation, which in turn could severely hamper our business operations and financial condition as a result of lower or no royalty payments.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

A list of exhibits to this Quarterly Report on Form 10-Q is set forth on the Exhibit Index immediately preceding such exhibits and is incorporated herein by reference.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	RAMBUS INC.

Date: July 23, 2015	By:	/s/ Satish Rishi
		Satish Rishi
		Senior Vice President, Finance and Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

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INDEX TO EXHIBITS



Exhibit Number		Description of Document

10.1*		Amendment 1 to Semiconductor Patent License Agreement, dated June 17, 2015, between Registrant and SK Hynix.

10.2		2015 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 28, 2015).

10.3		Form of Restricted Stock Unit Agreement (2015 Equity Incentive Plan)

10.4		Form of Stock Option Agreement (2015 Equity Incentive Plan)

10.5		2015 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed April 28, 2015).

31.1		Certification of Principal Executive Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

_________________________________________


*	Confidential treatment has been requested with respect to certain portions of this exhibit. These portions have been omitted and submitted separately to the Securities and Exchange Commission.

The certifications furnished in Exhibit 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

Exhibit 10.1

AMENDMENT 1 TO

SEMICONDUCTOR PATENT LICENSE AGREEMENT

This AMENDMENT 1 TO SEMICONDUCTOR PATENT LICENSE AGREEMENT (“Amendment”), effective as of the date of the later signature below (the “Amendment Effective Date”), is made by and between Rambus Inc., a corporation duly organized and existing under the laws of Delaware, U.S.A., having its principal place of business at 1050 Enterprise Way, Suite #700, Sunnyvale, California 94089, U.S.A., (hereinafter “Rambus”) and SK hynix Inc., a corporation duly organized and existing under the laws of Korea., having its principal place of business at 2091, Gyeongchung-daero, Bubal-eub, Icheon-si, Gyeonggi-do, Korea (hereinafter “SK hynix”) and amends that certain Semiconductor Patent License Agreement between the parties with an effective date of July 1, 2013 (such agreement, the “Agreement”).

WHEREAS, in light of unforeseen circumstances, the parties desire to amend and supplement the Agreement in accordance with the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the mutual covenants and premises contained herein, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the parties agree as follows:


1.	Expiration Date. As of the Amendment Effective Date, Section 1.18 of the Agreement is replaced in its entirety with the following:

“1.18 “Expiration Date” means either:

(a) July 1, 2024 (at 12:00 a.m., Pacific Daylight Time); or

(b) July 1, 2027 (at 12:00 a.m., Pacific Daylight Time) if SK hynix elects to exercise its option to make such later date the Expiration Date by providing Rambus with a written notice of such election by no later than the earlier of:

(i) [***]; and

(ii) March 31, 2024.”


2.	Integrated Circuit. As of the Amendment Effective Date, Section 1.27 of the Agreement is replaced in its entirety with the following:

“1.27 “Integrated Circuit” means a single, discrete integrated circuit chip, in any form factor, including wafer, cingulated die, or packaged die, such as, without limitation, packaged system-on-chips (SOCs), package-on-packages (POPs), package-in-packages (PIPs), memory cards, smart cards, and solid-state drives (SSDs).”


3.	Paid-Up Product. As of the Amendment Effective Date, Section 1.37 of the Agreement is replaced in its entirety with the following:

“1.37 “Paid-up Product” means (a) each SK hynix Product that is an SDR DRAM or LPSDR DRAM, and (b) each double-data rate DRAM (including each graphics-based and low-power DRAM) that (i) implements the minimum set of features, parameters, and protocols defined or recommended in any JEDEC published specification for such double-data rate DRAM, (ii) is solely capable of communicating with any other Integrated Circuit through the protocol defined or recommended in such JEDEC-published specification, and (iii) has been sold in arms-length transactions to Third Parties by SK hynix and/or one or more of its Subsidiaries prior to September 30, 2019 (if SK hynix fails to provide Rambus with a written notice of its election to exercise its option to make July 1, 2027 the Expiration Date in accordance with Section 1.18 above) or September 30, 2022 (if SK hynix has provided Rambus with a written notice of its election to exercise its option to make July 1, 2027 the Expiration Date in accordance with Section 1.18 above) [***]. Notwithstanding the foregoing sentence, any product that constitutes a Rambus Leadership Product, and each physical instantiation thereof, shall be deemed not to be a Paid-up Product.”


4.	SK hynix Product. As of the Amendment Effective Date, Section 1.59 of the Agreement is replaced in its entirety with the following:

“1.59 “SK hynix Product” means, an Integrated Circuit or Component, for which SK hynix or any of its Subsidiaries either:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.


(a)	owns the entire design of such Integrated Circuit or Component with no limitations on how it may use such design; and/or,

(b)

has a license from the party or parties that created or otherwise owns the design of such Integrated Circuit or Component, under which license SK hynix and/or its Subsidiaries (i) can make (and/or have made) such Integrated Circuit or Component; (ii) is free to Sell such made (or have made) Integrated Circuit or Component without restriction as to whom SK hynix and/or its Subsidiaries may Sell such Integrated Circuit or Component; and (iii) is not required or bound to discriminate in price or other terms with respect to such Integrated Circuit.”


5.	Term Product. As of the Amendment Effective Date, Section 1.66 of the Agreement is replaced in its entirety with the following:

“1.66 “Term Product” means each SK hynix Product that is an (a) Other DRAM; (b) DRAM Controller; (c) Synchronous Flash Memory; (d) Synchronous Flash Controller; (e) SerDes IC; and (f) any other Integrated Circuit or Component other than a Paid-Up Product. Notwithstanding the foregoing sentence, any product that constitutes a Rambus Leadership Product shall be deemed not to be a Term Product.”


6.	Quarterly License Payments.


(a)	As of the Amendment Effective Date, Section 4.1 of the Agreement is replaced in its entirety with the following:

“4.1 Quarterly License Payment. For each calendar quarter that occurs between the Effective Date and the Expiration Date, SK hynix will pay to Rambus a quarterly license payment of twelve million United States Dollars (US$12,000,000; each such payment, a “Quarterly License Payment”), provided that:


(a)	for each of the six (6) full calendar quarters immediately following July 1, 2015, SK hynix will pay to Rambus (in lieu of an unadjusted Quarterly License Payment) an adjusted Quarterly License Payment of sixteen million United States Dollars (US$16,000,000); and

(b)

in addition, SK hynix shall have the option to make six (6) adjusted Quarterly License Payments (each, an “Adjusted Quarterly License Payment”) by providing to Rambus written notice of its election to exercise such option, provided that such notice shall be made no earlier than December 1, 2017, in which case for each of the first six (6) consecutive full calendar quarters following the six (6) month anniversary of Rambus’ receipt of such notice, SK hynix will pay to Rambus (in lieu of an unadjusted Quarterly License Payment) an Adjusted Quarterly License Payment of eight-million United States Dollars (US$8,000,000), provided that SK hynix may retract such election a single time (thus preserving it for a later date) by providing to Rambus written notice of such retraction by no later than thirty (30) days before the first day of the quarter in which, absent such retraction, the first associated Adjusted Quarterly License Payment would have come due.”


(b)	As of the Amendment Effective Date, Section 5.1(a)(ii) of the Agreement is replaced in its entirety with the following:

“Starting with the Quarterly License Payment associated with the fourth calendar quarter of 2013, SK hynix shall pay Rambus each subsequent Quarterly License Payments within ten (10) United States business days of its receipt (as determined for notices under Section 9.2) of Rambus’ invoice therefor. Rambus shall invoice SK hynix for each of the subsequent Quarterly License Payments no earlier than thirty (30) days after the first day of the quarter to which each such Quarterly License Payment relates.”


7.	Taxes. As of the Amendment Effective Date, the following new sentence shall be added to the end of Section 5.3 of the Agreement:

“5.3 Taxes. Upon Rambus’ written request and at Rambus’ expenses, SK hynix shall reasonably assist Rambus in a dispute between Rambus and the Korea National Tax Authority with respect to refund of the withholding tax remitted in relation to this section.”


8.	Future Contingencies.


(a)	As of the Amendment Effective Date, the Agreement is supplemented with the following Section 6.6:

“[***]”


(b)	As of the Amendment Effective Date, the Agreement is supplemented with the following Section 7.3:

“[***]”


(c)	As of the Amendment Effective Date, Section 9.4 of the Agreement is supplemented with the following:

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

“Notwithstanding the foregoing, SK hynix shall be entitled to, and Rambus hereby agrees to, assign this Agreement to a successor to all or substantially all of SK hynix’s DRAM assets, provided that (a) SK hynix is not in breach of, and has not breached, this Agreement as of the date of such assignment and (b) such successor agrees in writing with Rambus to be bound, as if it were SK hynix, by this Agreement as so assigned.”

Press Release. The parties shall issue a press release with respect to the Agreement as amended and supplemented by this Amendment in a mutually acceptable form. Each party agrees that, after the issuance of such press release, each party shall be entitled to disclose the general nature of this Agreement as so amended and supplemented, but that the terms and conditions of this Agreement as so amended and supplemented, to the extent not already disclosed pursuant to such press release, shall be treated as Confidential Information in accordance with Section 7 of the Agreement.


10.	Miscellaneous. Except as specifically amended hereby, the Agreement shall remain in full force and effect. This Amendment may be executed in two (2) or more counterparts, all of which, taken together, shall be regarded as one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by duly authorized officers or representatives as of the date first above written.

RAMBUS INC. SK HYNIX INC.

By: /s/ Kevin Donnelly By: /s/ Kyung-hyun Min

Name: Kevin Donnelly Name: Kyung-hyun Min

Title: Senior Vice President Title: Vice President, General Counsel

Date: June 15, 2015 Date: June 17, 2015

[***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

Exhibit 10.3

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Unless otherwise defined herein, the terms defined in the 2015 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Restricted Stock Unit Agreement including Exhibit A, which includes the special provisions for Participant’s country of residence, if any (collectively, the “Agreement”).


I.	NOTICE OF RESTRICTED STOCK UNIT GRANT

Name of Participant: [_____________]

Participant has been granted the right to receive Restricted Stock Units, subject to the terms and conditions of the Plan and the Agreement as follows:

Grant Number [_____________]

Date of Grant [_____________]

Vesting Commencement Date [_____________]

Total Number of Restricted Stock Units [_____________]

Vesting Schedule:

(1) The Restricted Stock Units will vest as follows:

[_____________]

(2) In the event Participant ceases to be a Service Provider for any or no reason before Participant vests in the Restricted Stock Unit, the Restricted Stock Unit and Participant’s right to acquire any Shares hereunder will immediately terminate.


II.	AGREEMENT

A.Grant.

The Company hereby grants to Participant under the Plan an Award of Restricted Stock Units, subject to all of the terms and conditions in the Plan, the Notice of Grant, and this Agreement.

B.Company’s Obligation to Pay.

Each Restricted Stock Unit represents the right to receive a Share on the date it vests. Unless and until the Restricted Stock Units will have vested in the manner set forth in Section C, Participant will have no right to payment of any such Restricted Stock Units. Prior to actual payment of any vested Restricted Stock Units, such Restricted Stock Unit will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.

C.Vesting Schedule.

Subject to Section D, the Restricted Stock Units awarded by this Agreement will vest in Participant according to the vesting schedule set forth on the attached Notice of Grant, subject to Participant continuing to be a Service Provider through each such date.

D.Forfeiture upon Termination of Status as a Service Provider.

Notwithstanding any contrary provision of this Agreement, if Participant ceases to be a Service Provider for any or no reason, the then-unvested Restricted Stock Units awarded by this Agreement will thereupon be forfeited at no cost to the Company and Participant will have no further rights thereunder. The date on which Participant ceases to be a Service Provider shall not be extended by any notice of termination period or non-working garden leave established under the local law (including, but not limited to statutory law, regulatory law, and/or common law) in the jurisdiction in which Participant resides or under the terms of Participant’s employment agreement, if any; such date will be considered the last date Participant is providing active services. The Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of his or her Award (including whether Participant may still be considered to be providing services while on an approved leave of absence).

E. Payment after Vesting.

Any Restricted Stock Units that vest in accordance with Section C will be paid to Participant (or, in the event of Participant’s death, to his or her estate (or legal representative for Participants outside of the U.S.)) in whole Shares, subject to Participant satisfying any applicable Tax-Related Items withholding obligations (as defined in Section G below).

F. Payments after Death.

Any distribution or delivery to be made to Participant under this Agreement will, if Participant is then deceased, be made to Participant’s designated beneficiary, or if no beneficiary (or legal representative for Participants outside of the U.S.) survives Participant, the administrator, executor or legal representative of Participant’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.

G.Withholding of Taxes.

1.Participant acknowledges that, regardless of any action taken by the Company or, if different, Participant’s employer (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”), is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including, but not limited to, the grant, vesting or settlement of the Restricted Stock Units, the subsequent sale of Shares acquired pursuant to settlement and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the Award or any aspect of the Restricted Stock Units to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required

to withhold or account for Tax-Related Items in more than one jurisdiction.

2.Prior to any relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company or its respective agents to satisfy the obligations with regard to all Tax-Related Items by withholding in Shares to be issued upon settlement of the Restricted Stock Units. In the event that such withholding in Shares is problematic under the applicable tax or securities laws or has materially adverse accounting consequences, by Participant’s acceptance of the Restricted Stock Units, he or she authorizes and directs the Company and any brokerage firm determined acceptable to the Company to sell on Participant’s behalf a whole number of Shares from those Shares issuable to Participant as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy the obligation for Tax-Related Items.

3.Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant will be deemed to have been issued the full number of Shares subject to the vested Restricted Stock Unit, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

4.Participant agrees to pay the Company, including through withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer, any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds from the sales of the Shares, if Participant fails to comply with his or her obligations in connection with the Tax-Related Items.

H.Nature of Grant. In accepting the Award, Participant acknowledges, understands and agrees that:

1.the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

2.the grant of Restricted Stock Units is voluntary and occasional and does not create any contractual or other right to receive future Awards, or benefits in lieu of Restricted Stock Units, even if Restricted Stock Units have been granted in the past;

3.all decisions with respect to the future Awards or other grants, if any, will be at the sole discretion of the Company;

4.the Award grant and Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, the Employer or any Subsidiary or affiliate of the Company;

5.Participant is voluntarily participating in the Plan;

6.the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same are not intended to replace any pension rights or compensation;

7.the Restricted Stock Units and the Shares subject to the Restricted Stock Units, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

8.the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

9.no claim or entitlement to compensation or damages shall arise from forfeiture of the Restricted Stock Units resulting from Participant ceasing to provide employment or other services to the Company or the Employer (for any reason whatsoever, whether or not later found to be invalid or in breach of employment law in the jurisdiction where Participant is employed or the terms of his or her employment agreement, if any), and in consideration of the grant of the Restricted Stock Units to which Participant is otherwise not entitled, he or she irrevocably agrees never to institute any claim against the Company, any of its Subsidiaries or affiliates or the Employer, waives his or her ability, if any, to bring any such claim, and releases the Company, its Subsidiaries and affiliates and the Employer from any such claim; if notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;

10.unless otherwise provided in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company not to be exchanged, cashed out or substituted for, in connection with any Change in Control or other corporate transaction affecting the Shares of the Company; and

11.the following provisions apply if Participant is providing services outside the United States:

(a)the Restricted Stock Units and the Shares subject to the Restricted Stock Units are not part of normal or expected compensation or salary for any purpose;

(b)Participant acknowledges and agrees that neither the Company, the Employer nor any Subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Restricted Stock Units or of any amounts due to Participant pursuant to the settlement of the Restricted Stock Units or the subsequent sale of any Shares acquired upon settlement;

12.the Restricted Stock Units and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability.

I. No Advice Regarding Grant.

The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares. Participant is hereby advised to consult with his or her own personal tax,

legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.

J. Data Privacy Notice and Consent.

1.Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Award of Restricted Stock Units materials by and among, as applicable, the Employer, the Company and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

2.Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Restricted Stock Unit or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).

3.Participant understands that Data will be transferred to E*Trade Financial, Inc. or to any other third party assisting in the implementation, administration and management of the Plan. Participant understands that the recipients of the 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 Participant’s country. Participant understands that if Participant resides outside the United States, Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative. Participant authorizes the Company, E*Trade Financial, Inc. and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that if Participant resides outside the United States, Participant may, at any time, view Data, request additional information about 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 Participant’s local human resources representative. Further, Participant understands, however, that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, Participant’s employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant Restricted Stock Units or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect his or her ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact Participant’s local human resources representative.

J. Rights as Stockholder.

Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges of a stockholder of the Company in respect of any Shares deliverable hereunder,

unless and until certificates representing such Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to Participant.

K.No Effect on Service.

Participant acknowledges and agrees that the vesting of the Restricted Stock Units pursuant to Section C hereof is earned only by Participant continuing to be a Service Provider through the applicable vesting dates (and not through the act of being hired or acquiring Shares hereunder). Participant further acknowledges and agrees that this Agreement, the transactions contemplated hereunder and the vesting schedule set forth herein do not constitute an express or implied promise of Participant continuing to be a Service Provider for the vesting period, for any period, or at all, and will not interfere with Participant’s right or the right of the Company (or the Parent or Subsidiary employing or retaining Participant) to terminate Participant’s status as a Service Provider at any time, with or without cause.

L. Address for Notices.

Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company at Rambus Inc., 1050 Enterprise Way, Suite 700, Sunnyvale, CA 94089, or at such other address as the Company may hereafter designate in writing.

M.Grant is Not Transferable.

Except to the limited extent provided in Section F, this grant and the rights and privileges conferred hereby will not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) 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 any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

N.Binding Agreement.

Subject to the limitation on the transferability of this grant contained herein, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

O.Compliance with Law.

Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares issuable upon settlement of the Restricted Stock Units prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. Participant understands that the Company is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

P. Plan Governs.

This Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.

Q.Administrator Authority.

The Administrator will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Restricted Stock Units have vested). All actions taken and all 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 or interpretation made in good faith with respect to the Plan or this Agreement.

R.Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

S.Captions.

Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

T.Agreement Severable.

In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on the remaining provisions of this Agreement.

U.Modifications to the Agreement.

This Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly warrants that he or she is not accepting this Agreement in reliance on any promises, representations, or inducements other than those contained herein. Modifications to this Agreement or the Plan can be made only in an express written contract executed by a duly authorized officer of the Company. Notwithstanding anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise this Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code in connection to this Award of Restricted Stock Units.

V. Governing Law and Venue.

The Award grant and the provisions of this Agreement shall be governed by, and subject

to, the laws of the State of Delaware, without regard to the conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Award of Restricted Stock Units is made and/or to be performed.

W.Language.

If Participant has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

X.Exhibit A.

Notwithstanding any provisions in this Agreement, the Award grant shall be subject to any special terms and conditions set forth in Exhibit A of this Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in Exhibit A, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit A constitutes part of this Agreement.

Y. Imposition of Other Requirements.

The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

Z. Waiver.

Participant acknowledges that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Participant of any other Participant.

3. By Participant’s electronic signature and the electronic signature of the Company’s representative below, Participant and the Company agree that this Award is granted under and governed by the terms and conditions of the Plan and the Agreement, both of which are made a part of this document.

RAMBUS INC.

_____________________________________

Title

* * * * *

By clicking on the “Accept” button, Participant agrees to accept the Award granted to Participant by Rambus Inc., and agrees to be bound by the terms of the Restricted Stock Unit Agreement governing the Award and the Rambus Inc. 2015 Equity Incentive Plan. When clicking the “Accept” button, that will act as Participant’s electronic signature to this Agreement and will result in a contract between Participant and the Company with respect to this Award.

Exhibit A

FOR NON-U.S. PARTICIPANTS

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

This Exhibit A includes additional terms and conditions that govern the Award of Restricted Stock Units to Participant if he or she resides in one of the countries listed herein. This Exhibit A forms part of the Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement and the Plan.

This Exhibit A also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of May 2015. Such laws are often complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information noted herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time Participant vests in the Restricted Stock Units or sell the Shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result. Accordingly, Participant is advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.

Finally, if Participant is a citizen or resident of a country other than the one in which Participant is currently residing or transfers employment after the grant date, the information contained herein may not be applicable to Participant.

* * * * *

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

ALL COUNTRIES

Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant's country of residence, Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect Participant's ability to acquire or sell Shares or rights to Shares (e.g., Restricted Stock Units) under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant's country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Participant acknowledge that it is Participant's responsibility to comply with any applicable restrictions, and Participant is advised to speak to Participant's personal advisor on this matter.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

CANADA

Terms and Conditions

Payment after Vesting. The following provision supplements the “Payment after Vesting” section of the Agreement:

The discretion to settle the Restricted Stock Units in cash as described in Section 8 of the Plan is not applicable to Restricted Stock Units granted to Participants in Canada.

The following provisions apply if Participant is in Quebec:

Consent to Receive Information in English. The parties acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Les parties reconnaissent avoir expressement souhaité que la convention [“Agreement”], ainsi que tous les documents, avis et procédures judiciaries, éxecutés, donnés ou intentés en vertu de, ou lié, directement ou indirectement à la présente convention, soient rédigés en langue anglaise.

Data Privacy Notice and Consent. The following provision supplements the “Data Privacy Notice and Consent” section of the Agreement:

Participant hereby authorizes the Company and the Company’s representatives to discuss and obtain all relevant information from all personnel, professional or non-professional, involved in the administration of the Plan. Participant further authorizes the Company, the Employer, any Subsidiary or affiliate and the Company’s designated broker/third party administrator for the Plan (or such other stock plan service provider that may be selected by the Company to assist with the implementation, administration and management of the Plan) to disclose and discuss such information with their advisors. Participant also authorizes the Company, the Employer and/or any Subsidiary or affiliate to record such information and to keep such information in Participant’s employment file.

Notifications

Securities Law Notification. Participant is permitted to sell Shares acquired through the Plan through the designated broker appointed under the Plan, if any (or any other broker acceptable to the Company), provided the resale of Shares acquired under the Plan takes place outside of Canada through the facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the Nasdaq Global Select Market.

Foreign Asset / Account Reporting Notification. Foreign property, including Shares and rights to receive Shares (e.g., Restricted Stock Units), must be reported annually on a Form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds CAD 100,000 at any time during the year. Thus, Restricted Stock Units must be reported - generally at a nil cost - if the CAD 100,000 cost threshold is exceeded because of other foreign property. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares. The ACB would ordinarily equal the fair market value of the Shares at the

time of acquisition, but if other Shares are also owned, this ACB may have to be averaged with the ACB of the other Shares.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

FRANCE

Terms and Conditions

Language Consent. By accepting the Award grant, Participant confirms having read and understood the Plan and Agreement which were provided in the English language. Participant accepts the terms of those documents accordingly.

Consentement Relatif à la Langue Utilisée. En acceptant l’attribution, le Participant confirme avoir lu et compris le Plan et le Contrat, qui ont été communiqués en langue anglaise. Le Participant accepte les termes de ces documents en connaissance de cause.

Notifications

Foreign Asset / Account Reporting Notification. If Participant holds Shares outside of France or maintains a foreign bank account, Participant is required to report such to the French tax authorities when filing his or her annual tax return. Severe penalties may applicable for any failure to comply with this reporting obligation.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

INDIA

Notifications

Exchange Control Notification. Participant understands that if resident in India, he or she must repatriate the proceeds from the sale of Shares acquired under the Plan while Participant was resident in India to India within 90 days of receipt. Participant must also obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency and must maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or the Employer requests proof of repatriation.

Foreign Asset / Account Reporting Notification. Participant is required to declare foreign bank accounts and any foreign financial assets (including Shares held outside India and possibly including Restricted Stock Units) in Participant's annual tax return. Participant is responsible for complying with this reporting obligation and is advised to confer with his or her personal legal advisor in this regard.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

JAPAN

Notifications

Exchange Control Notification. If Participant acquires Shares valued at more than ¥100,000,000 in a single transaction, Participant must file a Securities Acquisition Report with the Ministry of Finance through the Bank of Japan within 20 days of the purchase of Shares.

Foreign Asset / Account Reporting Notification. Participant is required to report details of any assets held outside of Japan as of December 31, including Shares acquired under the Plan, to the extent such assets have a total net fair market value exceeding ¥50,000,000. Such report will be due by March 15 each year. Participant is responsible for complying with this reporting obligation and is advised to consult with his or her personal tax advisor in this regard.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

KOREA

Notifications

Exchange Control Notification. If the Participant receives US$500,000 or more from the sale of Shares in a single transaction, Korean exchange control laws require the Participant to repatriate the proceeds to Korea within 18 months of the sale.

Foreign Asset / Account Reporting Notification. Korean residents must declare all foreign financial accounts (e.g., non-Korean bank accounts, brokerage accounts, etc.) based in foreign countries that have not entered into an “inter-governmental agreement for automatic exchange of tax information” with Korea to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 1 billion (or an equivalent amount in foreign currency). Participant should consult with his or her personal tax advisor for additional information about this reporting obligation, including whether or not there is an applicable inter-governmental agreement between Korea and the U.S. (or any other country where Participant may hold any Shares or cash acquired in connection with the Plan).

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Restricted STOCK UNIT AGREEMENT

additional terms for participants in

TAIWAN

Notifications

Exchange Control Notification. Participant may remit and acquire foreign currency (including proceeds from the sale of Shares) up to US$5,000,000 per year without justification.

If the transaction amount is TWD500,000 or more in a single transaction, Participant must submit a Foreign Exchange Transaction Form. If the transaction amount is US$500,000 or more in a single transaction, Participant must also provide supporting documentation to the satisfaction of the bank involved in the transaction. Participant should consult his or her personal legal advisor prior to taking any action with respect to remittance of proceeds from the sale of Shares into or out of Taiwan, as Participant is responsible for complying with all exchange control laws in Taiwan.

* * * * *

Exhibit 10.4

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

Unless otherwise defined herein, the terms defined in the 2015 Equity Incentive Plan (the “Plan”) will have the same defined meanings in this Stock Option Agreement, including Exhibit B, which includes the special provisions for Participant’s country of residence, if any (collectively, the “Agreement”).


I.	NOTICE OF STOCK OPTION GRANT

Name of Participant: [_____________]

Participant has been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Agreement, as follows:

Grant Number [_____________]

Date of Grant [_____________]

Vesting Commencement Date [_____________]

Exercise Price per Share [_____________]

Total Number of Shares Granted [_____________]

Total Exercise Price [_____________]

Type of Option Nonstatutory Stock Option

Term/Expiration Date [_____________]

Vesting Schedule:

Subject to accelerated vesting as set forth below or in the Plan, this Option may be exercised, in whole or in part, in accordance with the following schedule:

[_____________]

If a successor corporation or a Parent or Subsidiary of the successor corporation (the “Successor Corporation”) assumes this Option or substitutes it with an equivalent award as provided in Section 16(c) of the Plan, then if following such assumption or substitution Participant’ s status as an Employee or employee of the Successor Corporation, as applicable, is terminated by the Successor Corporation as a result of an Involuntary Termination (as defined below) other than for Cause (as defined below) within twelve (12) months following the Change in Control, this Option will immediately vest and become exercisable as to 100% of the Shares subject to this Option.

For these purposes, “Cause” will mean (i) any act of personal dishonesty taken by Participant in connection with his responsibilities as an employee and intended to result in substantial personal enrichment

of Participant, (ii) Participant’s conviction of a felony, (iii) a willful act by Participant which constitutes gross misconduct and which is injurious to the Successor Corporation, and (iv) following delivery to Participant of a written demand for performance from the Successor Corporation which describes the basis for the Successor Corporation’s belief that Participant has not substantially performed his duties, continued violations by Participant of Participant’s obligations to the Successor Corporation which are demonstrably willful and deliberate on Participant’s part.

For these purposes, any of the following events shall constitute an “Involuntary Termination”: (i) without Participant’s express written consent, a significant reduction of Participant’s duties, authority or responsibilities, relative to Participant’s duties, authority or responsibilities as in effect immediately prior to the Change in Control, or the assignment to Participant of such reduced duties, authority or responsibilities; (ii) without Participant’s express written consent, a substantial reduction, without good business reasons, of the facilities and perquisites (including office space and location) available to Participant immediately prior to the Change in Control; (iii) a reduction by the Successor Corporation in the base salary of Participant as in effect immediately prior to the Change in Control; (iv) a material reduction by the Successor Corporation in the kind or level of employee benefits, including bonuses, to which Participant was entitled immediately prior to the Change in Control with the result that Participant’s overall benefits package is significantly reduced; (v) the relocation of Participant to a facility or a location more than fifty (50) miles from Participant’s then present location, without Participant’s express written consent; (vi) any purported termination of Participant by the Successor Corporation which is not effected for Disability or for Cause, or any purported termination for which the grounds relied upon are not valid; or (vii) any act or set of facts or circumstances which would, under California case law or statute constitute a constructive termination of Participant.

Termination Period:

To the extent vested, this Option shall be exercisable for three (3) months after Participant ceases to be a Service Provider, unless such termination is due to Participant’s death or Disability; provided, however, that if Participant is an Officer, Other Officer (as defined below) or Director on the date of such termination, this Option to the extent vested will be exercisable for one (1) year from the date of such termination. For purposes of this Agreement, “Other Officer” shall mean a person who (i) was designated an Officer at any point in time prior to such person’s termination as a Service Provider or (ii) is a non-executive officer who reports directly to the Company’s Chief Executive Officer. If Participant ceases to be a Service Provider due to Participant’s death or Disability, this Option shall be exercisable for one (1) year after Participant ceases to be Service Provider. Notwithstanding the foregoing, in no event may this Option be exercised after the Term/Expiration Date as provided above and may be subject to earlier termination as provided in Section 16(c) of the Plan. The date on which Participant ceases to be a Service Provider shall not be extended by any notice of termination period or non-working garden leave established under the local law (including, but not limited to statutory law, regulatory law, and/or common law) in the jurisdiction in which Participant resides or under the terms of Participant’s employment agreement, if any; such date will be considered the last date Participant is providing active services. The Administrator shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the Option (including whether Participant may still be considered to be providing services while on an approved leave of absence).


II.	AGREEMENT

A.Grant of Option.

The Administrator hereby grants to individual named in the Notice of Grant attached as Part I of this Agreement (the “Participant”) an option (the “Option”) to purchase the number of Shares, as set forth

in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, which is incorporated herein by reference. Subject to Section 21(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.

B.Exercise of Option.

(a)Right to Exercise. This Option is exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Agreement.

(b)Method of Exercise. Primarily, Options are to be exercised online through the Company’s designated broker (currently E*Trade Financial, Inc.). Alternatively, and if permitted by the Company, Options can be exercised by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which will state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice will be completed by Participant and delivered to the Company. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares, together with any applicable Tax-Related Items (as defined in Section F below). This Option will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

No Shares will be issued pursuant to the exercise of this Option unless such issuance and exercise comply with Applicable Laws. Assuming such compliance, for income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with respect to such Exercised Shares, unless otherwise required under Applicable Laws.

C.Method of Payment.

Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election of Participant:

1.cash;

2.check; or

3.consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan.

The Company reserves the right to restrict available methods of payment to the extent it determines necessary for legal or administrative reasons.

D.Non-Transferability of Option.

This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Participant only by Participant. The terms of the Plan and this Agreement, will be binding upon the executors, administrators, heirs, successors and assigns of Participant, to the extent permissible under local law.

E.Term of Option.

This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Agreement.

F.Responsibility for Taxes.

payroll tax, fringe benefits tax, payment on account or other tax related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

2. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items.

3. In this regard, Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

(a) withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer; or

(b) withholding from proceeds from the sale of Shares acquired upon exercise of the Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization without further consent).

4. Participant agrees to pay to the Company or the Employer, including through withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer, any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds from the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.

G.Nature of Grant. In accepting the Option, Participant acknowledges, understands and agrees that:

1.the Plan is established voluntarily by the Company, is discretionary in nature, and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

2.the grant of the Option is voluntary and occasional and does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if Options have been granted in the past;

3.all decisions with respect to future Option or other grants, if any, will be at the sole discretion of the Company;

4.Participant’s participation in the Plan is voluntary;

5.the Option grant and Participant’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, the Employer or any Subsidiary or affiliate of the Company;

6.the Option and any Shares acquired under the Plan, and the income and value of same, are not intended to replace any pension rights or compensation;

7.the Option and any Shares acquired under the Plan and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

8.the future value of the Shares underlying the Option is unknown, indeterminable and cannot be predicted with certainty;

9.if the underlying Shares do not increase in value, the Option will have no value;

10.if Participant exercises the Option and acquires Shares, the value of such Shares may increase or decrease in value, even below the Exercise Price;

11.no claim or entitlement to compensation or damages shall arise from forfeiture of the vested Option resulting from Participant ceasing to provide employment or other services to the Company or the Employer (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any) or failing to exercise the vested Option during any post-termination exercise period, and in consideration of the grant of the Option to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, any of its Subsidiaries or affiliates or the Employer, waives his or her ability, if any, to bring any such claim, and releases the Company, its Subsidiaries and affiliates and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;

12.the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan or Participant’s purchase or sale of Shares;

13.Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to the Plan;

14.unless otherwise provided in the Plan or by the Company in its discretion, the Option and the benefits evidenced by this Agreement do not create any entitlement to have the Option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any Change in Control or other corporate transaction affecting the Shares, and

15.the following provisions apply only if Participant is providing services outside the United States:

(a)the Option and the Shares subject to the Option are not part of normal or expected compensation or salary for any purpose;

(b)Participant acknowledges and agrees that neither the Company, the Employer nor any Subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Option or of any amounts due to Participant pursuant to the exercise of the Option or the subsequent sale of any Shares acquired upon exercise.

H.Data Privacy Notice and Consent.

Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Option grant materials by and among, as applicable, the Employer, the Company and its Subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or any Subsidiary, details of all options or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).

Participant understands that Data will be transferred to E*Trade Financial, Inc. or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company in the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, Participant may request a list with the names and addresses of any potential recipients of Data by contacting Participant’s local human resources representative. Participant authorizes the Company, E*Trade Financial, Inc. and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that if he or she resides outside the United States , Participant may, at any time, view Data, request additional information about 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 Participant’s local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent or if Participant later seeks to revoke his or her consent, Participant’s employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing participant’s consent is that the Company would not be able to grant Participant Options or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.

I.Language.

If Participant has received this Agreement, or any other document related to the Option and/or the Plan translated into a language other than English and if the translated version is different than the English version, the English version will control.

J.Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to the current or future participation in the Plan by electronic means. Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

K.Exhibit B.

Notwithstanding any provisions in this Agreement, the Option grant shall be subject to any special terms and conditions set forth in Exhibit B of this Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in Exhibit B, the special terms and conditions for such country shall apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit B constitutes part of this Agreement.

L.Imposition of Other Requirements.

The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Option and on the Shares purchased upon exercise of the Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

M.Severability.

The provisions of this Agreement, including Exhibit B, are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

N.Entire Agreement.

The Plan and Exhibit B are incorporated herein by reference. The Plan and this Agreement, including Exhibit B constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof, and may not be modified adversely to Participant's interest except by means of a writing signed by the Company and Participant.

O.Governing Law and Venue.

The Option grant and the provisions of this Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to the conflict of law provisions. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Option or this Agreement is made and/or to be performed.

P.Compliance with Law.

Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares issuable upon exercise of the Options prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. Further, Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

Q.NO GUARANTEE OF CONTINUED SERVICE.

PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY OR THE EMPLOYER (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE WITH PARTICIPANT'S RIGHT OR THE RIGHT OF THE COMPANY OR EMPLOYER TO TERMINATE PARTICIPANT'S RELATIONSHIP AS AN EMPLOYEE, CONSULTANT OR NON-EMPLOYEE DIRECTOR AT ANY TIME, WITH OR WITHOUT CAUSE.

R.Waiver.

Participant acknowledges that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provisions of this Agreement, or of any subsequent breach by Participant or any other Participant.

By Participant’s electronic signature and the electronic signature of the Company's representative below, Participant and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and this Agreement. Participant has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Plan and Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan and Agreement. Participant further agrees to notify the Company upon any change in the residence address indicated below.

RAMBUS INC.

Title

* * * * *

By clicking on the “Accept” button, Participant agrees to accept the Option granted to Participant by Rambus Inc., and agrees to be bound by the terms of the Stock Option Agreement governing the Option and the Rambus Inc. 2015 Equity Incentive Plan. Clicking the “Accept” button will act as Participant’s electronic signature to this Agreement and will result in a contract between Participant and the Company with respect to this option.

EXHIBIT A

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

EXERCISE NOTICE

Rambus Inc.

1050 Enterprise Way, Suite 700

Sunnyvale, CA 94089

Attention: Stock Administration

1.Exercise of Option. Effective as of today, ________________, _____, the undersigned (“Purchaser”) hereby elects to purchase ______________ shares (the “Shares”) of the Common Stock of Rambus Inc. (the “Company”) under and pursuant to the 2015 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement dated ________ (the “Agreement”). The purchase price for the Shares will be $_____________, as required by the Agreement.

2.Delivery of Payment. Purchaser herewith delivers to the Company the full purchase price for the Shares and any required withholding taxes to be paid in connection with the exercise of the Option.

3.Representations of Purchaser. Purchaser acknowledges that Purchaser has received, read and understood the Plan and the Agreement and agrees to abide by and be bound by their terms and conditions.

4.Rights as Stockholder. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired will be issued to Participant as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 16 of the Plan.

5.Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

6.Entire Agreement. The Plan and Agreement (including any country-specific terms in Exhibit B), are incorporated herein by reference. This Plan and the Agreement, constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's interest except by means of a writing signed by the Company and Purchaser.

7.Governing Law and Venue. The Option grant and the provisions of this Agreement are governed by, and subject to, the laws of the State of Delaware, without regard to the conflict of law provisions as provided in the Plan. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of Santa Clara County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this Option or this Agreement is made and/or to be performed.

RAMBUS INC.

Title

* * * * *

Exhibit B

FOR PARTICIPANTS OUTSIDE THE U.S.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

This Exhibit B includes additional terms and conditions that govern the Options granted to Participant if he or she resides in one of the countries listed herein. This Exhibit B forms part of the Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement and the Plan.

This Exhibit B also includes information regarding exchange controls and certain other issues of which Participant should be aware with respect to Participant’s participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of May 2015. Such laws are often complex and change frequently. As a result, the Company strongly recommends that Participant not rely on the information noted herein as the only source of information relating to the consequences of Participant’s participation in the Plan because the information may be out of date at the time Participant exercises the Option and purchases Shares or when Participant subsequently sells the Shares acquired under the Plan.

* * * * *

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

additional terms for participants in

ALL COUNTRIES

Insider Trading Restrictions/Market Abuse Laws. Participant acknowledges that, depending on Participant's country of residence, Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect Participant's ability to acquire or sell Shares or rights to Shares (e.g., Options) under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant's country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. Participant acknowledge that it is Participant's responsibility to comply with any applicable restrictions, and Participant is advised to speak to Participant's personal advisor on this matter.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

CANADA

Terms and Conditions

The following provisions apply if Participant is in Quebec:

Data Privacy Notice and Consent. The following provision supplements the “Data Privacy Notice and Consent” section of the Agreement:

Notifications

Foreign Asset / Account Reporting Notification. Foreign property, including Shares and rights to receive Shares (e.g., the Option), must be reported annually on a Form T1135 (Foreign Income Verification Statement) if the total cost of the foreign property exceeds CAD 100,000 at any time during the year. Thus, the Option must be reported - generally at a nil cost - if the CAD 100,000 cost threshold is exceeded because of other foreign property. When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares. The ACB would ordinarily equal the fair market value of the Shares at the time of acquisition, but if other Shares are also owned, this ACB may have to be averaged with the ACB of the other Shares.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

FRANCE

Terms and Conditions

Language Consent. By accepting the grant, Participant confirms having read and understood the Plan and Agreement which were provided in the English language. Participant accepts the terms of those documents accordingly.

Notifications

Foreign Asset /Account Reporting Notification. If Participant holds Shares outside France or maintains a foreign bank account, Participant is required to report such to the French tax authorities when filing his or her annual tax return. Severe penalties may applicable for any failure to comply with this reporting obligation.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

INDIA

Terms and Conditions

Method of Exercise. Notwithstanding anything to the contrary in the Plan and/or the Agreement, due to legal restrictions in India, Participant will not be permitted to pay the Exercise Price by a cashless sell-to-cover exercise whereby a certain number of Shares subject to the exercised Option are sold immediately upon exercise to cover the aggregate Exercise Price, brokers’ fees and any Tax-Related Items and the remaining Shares are delivered to Participant (i.e., a cashless sell-all exercise is permitted but a cashless sell-to-cover exercise is not). The Company reserves the right to provide Participant with this method of payment depending on the development of Indian exchange control law.

Notifications

Foreign Asset / Account Reporting Notification. Participant is required to declare foreign bank accounts and any foreign financial assets (including Shares held outside India and possibly including Options) in Participant's annual tax return. Participant is responsible for complying with this reporting obligation and is advised to confer with his or her personal legal advisor in this regard.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

JAPAN

Notifications

In addition, if Participant pays more than ¥30,000,000 in a single transaction for the purchase of Shares at exercise of the Option, Participant must file a Payment Report with the Ministry of Finance through the Bank of Japan by the 20^th day of the month following the month in which the payment was made. The precise reporting requirements vary depending on whether the relevant payment is made through a bank in Japan.

A Payment Report is required independently of a Securities Acquisition Report. Therefore, if the total amount that Participant pays in a one-time transaction to exercise the Option and purchase Shares exceeds ¥100,000,000, Participant must file both a Securities Acquisition Report and a Payment Report.

Foreign Asset / Account Reporting Notification. Participant is required to report details of any assets held outside Japan as of December 31, including Shares acquired under the Plan, to the extent such assets have a total net fair market value exceeding ¥50,000,000. Such report will be due by March 15 each year. Participant is responsible for complying with this reporting obligation and is advised to consult with his or her personal tax advisor in this regard.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

KOREA

Notifications

Exchange Control Notification. To remit funds out of Korea to exercise the Option by means of a cash exercise method, Participant must obtain a confirmation of the remittance by a foreign exchange bank in Korea. Participant likely will need to present to the bank processing the transaction supporting documentation evidencing the nature of the remittance. This is an automatic procedure, i.e., the bank does not need to “approve” the remittance, and it should take no more than a single day to process.

If Participant receives US$500,000 or more from the sale of Shares in a single transaction, Korean exchange control laws require Participant to repatriate the proceeds to Korea within 18 months of the sale.

Foreign Asset / Account Reporting Notification. Korean residents must declare all foreign financial accounts (e.g., non-Korean bank accounts, brokerage accounts, etc.) based in foreign countries that have not entered into an “inter-governmental agreement for automatic exchange of tax information” with Korea to the Korean tax authority and file a report with respect to such accounts if the value of such accounts exceeds KRW 1 billion (or an equivalent amount in foreign currency). Participant should consult with his or her personal tax advisor to determine how to value his or her foreign accounts for purposes of this reporting requirement and whether he is she is required to file a report with respect to such accounts.

RAMBUS INC.

2015 EQUITY INCENTIVE PLAN

Stock Option AGREEMENT

additional terms for participants in

TAIWAN

Notifications

Exchange Control Notification. Participant may remit and acquire foreign currency (including proceeds from the sale of Shares) up to US$5,000,000 per year without justification.

* * * * *

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald Black, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Rambus Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date: July 23, 2015

	By:	/s/ Ronald Black
	Name:	Ronald Black, Ph.D.
	Title:	Chief Executive Officer and President

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Satish Rishi, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Rambus Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



	Date: July 23, 2015

	By:	/s/ Satish Rishi
	Name:	Satish Rishi
	Title:	Senior Vice President, Finance and Chief Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Ronald Black, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Rambus Inc. on Form 10-Q for the quarter ended June 30, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Rambus Inc.

Date: July 23, 2015



	By:	/s/ Ronald Black
	Name:	Ronald Black, Ph.D.
	Title:	Chief Executive Officer and President

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Satish Rishi, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Rambus Inc. on Form 10-Q for the quarter ended June 30, 2015, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Rambus Inc.

Date: July 23, 2015



	By:	/s/ Satish Rishi
	Name:	Satish Rishi
	Title:	Senior Vice President, Finance and Chief Financial Officer

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