S-3
As filed with the Securities and Exchange Commission on
March 8, 2007
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
SKYWORKS SOLUTIONS,
INC.
(Exact Name of Registrant as
Specified in Its Charter)
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Delaware
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04-2302115
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(State or Other Jurisdiction
of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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20 Sylvan Road
Woburn, Massachusetts 01801
(781) 376-3000
(Address, Including Zip Code,
and Telephone Number, Including Area Code, of Registrants
Principal Executive Offices)
Mark V. B. Tremallo, Esq.
Vice President, General Counsel and Secretary
Skyworks Solutions, Inc.
20 Sylvan Road
Woburn, Massachusetts 01801
(781) 376-3000
(Name, Address, Including Zip
Code, and Telephone Number, Including Area Code, of Agent for
Service)
Copy to:
Mark G. Borden, Esq.
Peter N. Handrinos, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 526-6675
Telecopy: (617) 526-5000
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date hereof.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box. þ
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o _
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If this form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o _
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If this form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following box. þ
If this form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to
register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following box. o
CALCULATION OF REGISTRATION FEE
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Proposed maximum
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Title of each class of
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Amount
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offering price per
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Proposed maximum
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Amount of
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securities to be registered
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to be registered
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unit
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aggregate offering price
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registration fee
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11/4%
Convertible Subordinated Notes due 2010
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$100,000,000
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100%
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$100,000,000
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$3,070
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11/2%
Convertible Subordinated Notes due 2012
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$100,000,000
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100%
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$100,000,000
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$3,070
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Common Stock, $0.25 par value per
share
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32,747,315(1)
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(2)
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(2)
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(2)
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(1)
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Includes 32,747,315 shares of
common stock issuable upon conversion of the
11/4%
Convertible Subordinated Notes due 2010 and the
11/2%
Convertible Subordinated Notes due 2012 at an initial conversion
rate of 105.0696 shares per $1,000 principal amount of the notes
and the maximum number of shares issuable upon increase in the
conversion rate upon certain fundamental changes. Pursuant to
Rule 416 under the Securities Act, the number of shares of
common stock registered hereby includes an indeterminate number
of shares of common stock that may be issued upon conversion of
the notes, as this amount may be adjusted as a result of stock
splits, stock dividends and antidilution provisions.
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(2)
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Pursuant to Rule 457(i), there
is no additional filing fee with respect to the shares of common
stock issuable upon conversion of the notes because no
additional consideration will be received by the registrant.
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Prospectus
$100,000,000
11/4% Convertible
Subordinated Notes due 2010
$100,000,000
11/2% Convertible
Subordinated Notes due 2012
and
Shares of Common Stock Issuable Upon Conversion of the Notes
The securities to be
offered and sold using this prospectus are our
11/4% Convertible
Subordinated Notes due 2010, or the 2010 notes, and our
11/2% Convertible
Subordinated Notes due 2012, or the 2012 notes, which we issued
in a private placement in March 2007, and shares of our common
stock issuable upon conversion of the 2010 notes and 2012 notes.
We refer to the 2010 notes and 2012 notes together as the notes.
Any securities
offered and sold using this prospectus will be offered and sold
by the selling security holders to be named in one or more
supplements to this prospectus or in one or more reports filed
with the Securities and Exchange Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended. See Selling Security
Holders beginning on page 27. We will not receive any
of the proceeds from the sale by the selling security holders of
the securities offered or sold using this prospectus.
We will pay interest
on the notes semi-annually on each March 1 and
September 1, commencing on September 1, 2007. The 2010
notes mature on March 1, 2010, and the 2012 notes mature on
March 1, 2012. We may not redeem the notes.
The notes are
convertible into cash, shares of our common stock or a
combination of cash and shares of our common stock, at our
option. The initial conversion rate for the notes is 105.0696
shares per $1,000 principal amount, which is equivalent to a
conversion price of approximately $9.52 per share, subject to
adjustments for certain events. Holders may surrender some or
all of their notes for conversion at any time prior to maturity.
Upon the occurrence
of a fundamental change, holders may require us to repurchase
some or all of their notes for cash at a price equal to 100% of
the principal amount of the notes being repurchased, plus
accrued and unpaid interest, if any. Also, if a fundamental
change occurs, we may be required to increase the conversion
rate for any notes converted in connection with such fundamental
change by a specified number of shares of our common stock. The
extent to which the conversion rate will be increased will be
based on the price paid, or deemed to be paid, in respect of a
share of our common stock in, and the effective date of, the
fundamental change.
The notes are our
subordinated unsecured obligations and rank junior in right of
payment to our existing and future senior obligations. Our
obligations under the notes are not guaranteed by, and are
structurally subordinated in right of payment to all existing
and future obligations of, our subsidiaries.
The notes are not,
and will not be, listed on any securities exchange. The notes
are currently designated for trading on The
PORTALsm
Market. Our common stock is listed on the Nasdaq Global Select
Market, or Nasdaq, under the symbol SWKS. The
reported last sale price of our common stock on Nasdaq on
March 7, 2007 was $6.51 per share.
Investing in the
notes and our common stock involves a high degree of risk. See
Risk Factors beginning on page 8.
Neither the
Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal
offense.
The date of this
prospectus is March 8, 2007.
TABLE OF
CONTENTS
You should rely only on the information contained or
incorporated by reference in this prospectus and in any
supplement to this prospectus. We have not authorized any other
person to provide you with different information. If anyone
provides you with different or inconsistent information, you
should not rely on it. You should assume that the information
appearing in this prospectus or in any supplement to this
prospectus is accurate as of the date on their respective
covers. Our business, financial condition, results of operations
and prospects may have changed since that date.
Skyworks®,
Breakthrough
Simplicity®,
the star design
logo®,
DCR®,
Heliostm,
Interatm,
iPACtm,
LIPAtm,
Polar
Looptm,
Single Package
Radiotm,
SPR®,
System
Smart®,
and
Trans-Tech®
are trademarks or service marks of Skyworks Solutions, Inc. or
its subsidiaries. All other trademarks or trade names in this
prospectus are the property of their respective owners.
Except for purposes of the Description of the Notes
section or unless stated otherwise or the context otherwise
requires, references in this prospectus to Skyworks,
the Company, we, us and
our refer to Skyworks Solutions, Inc. and its
subsidiaries.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the Securities and Exchange Commission, or SEC, using
a shelf registration process. Under this process,
the selling security holders to be named in any supplement to
this prospectus under the heading Selling Security
Holders or any report filed with the SEC pursuant to
Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 may sell, from time to time, in one or more
offerings, the notes and shares of our common stock issuable
upon conversion of the notes registered under the registration
statement of which this prospectus is a part. These securities
were acquired from us in an unregistered private offering. A
prospectus supplement may set forth specific information about
the terms of any offering by the selling security holders. Such
prospectus supplement may add, update or change information
contained in this prospectus. You should read this prospectus
and any prospectus supplement together with additional
information described under the heading Where You Can Find
More Information and Incorporation by Reference.
1
FORWARD-LOOKING
STATEMENTS
This prospectus contains certain statements that are, or may be
deemed to be, forward-looking statements within the
meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act of 1934, as
amended, or the Exchange Act. All statements, other than
statements of historical facts, included herein or incorporated
herein by reference are forward-looking statements.
Included among forward-looking statements are those relating to,
among other things:
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our plans to develop and market new products, enhancements or
technologies and the timing of these development programs;
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our estimates regarding our capital requirements and our needs
for additional financing;
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our estimates of expenses and future revenues and profitability;
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our estimates of the size of the markets for our products and
services;
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the rate and degree of market acceptance of our products;
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the success of other competing technologies that may become
available; and
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other non-historical or future information.
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These forward-looking statements are often identified by the use
of terms and phrases such as achieve,
anticipate, believe,
estimate, expect, may,
will, would, should,
could, seek, forecast,
intend, plan, project,
potential, continue,
predict, propose, strategy
and similar terms and phrases. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and
uncertainties, and these expectations may prove to be incorrect.
You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus.
Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of a
variety of important factors, including those discussed in
Risk Factors beginning on page 8 of this
prospectus and those risks discussed in our Annual Report on
Form 10-K
for the fiscal year ended September 29, 2006. All
forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by these
risk factors. These forward-looking statements are made as of
the date of this prospectus. We assume no obligation to update
or revise these forward-looking statements or provide reasons
why actual results may differ.
WHERE YOU
CAN FIND MORE INFORMATION AND INCORPORATION BY
REFERENCE
We file annual, quarterly and current reports, proxy statements
and other information with the SEC pursuant to the Exchange Act.
The SEC maintains an Internet site at http://www.sec.gov that
contains those reports, proxy and information statements and
other information regarding us. You may also inspect and copy
those reports, proxy and information statements and other
information at the Public Reference Room of the SEC at
100 F Street, N.E., Room 1580,
Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330
for further information on the operation of the Public Reference
Room.
We incorporate by reference information into this
prospectus, which means that we are disclosing important
information to you by referring you to another document filed
separately with the SEC. The information incorporated by
reference is deemed to be part of this prospectus, except for
any information superseded by information in this prospectus.
This prospectus incorporates by reference the documents set
forth below that we previously filed with the SEC. These
documents contain important information about us and are an
important part of this prospectus.
The following documents that we have filed with the SEC (File
No. 1-15560)
are incorporated by reference into this prospectus:
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Annual Report on
Form 10-K
for the fiscal year ended September 29, 2006, filed on
December 13, 2006;
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Quarterly Report on
Form 10-Q
for the first quarter ended December 29, 2006, filed on
February 7, 2007;
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Current Reports on
Form 8-K
filed on October 2, 2006 (but only with respect to the
information under Items 2.05 and 2.06 thereof),
October 24, 2006, November 13, 2006, February 27,
2007 (but only with respect to the information under
Item 3.02 thereof) and March 5, 2007; and
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Description of our common stock contained in our registration
statements on
Form 8-A.
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We hereby incorporate by reference all documents that we file
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus and until the
date our offering is terminated into this prospectus and they
will be a part of this prospectus from the date of the filing of
the document. Any statement contained in a document incorporated
or deemed to be incorporated by reference into this prospectus
will be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this
prospectus or in any other subsequently filed document that also
is or is deemed to be incorporated by reference into this
prospectus conflicts with, negates, modifies or supersedes that
statement. Any statement that is modified or superseded will not
constitute a part of this prospectus, except as modified or
superseded.
We will provide without charge to each person, including any
beneficial owner, to whom a copy of this prospectus has been
delivered, upon written or oral request, a copy of the indenture
and registration rights agreement and any or all of the
information incorporated by reference into this prospectus but
not delivered herewith, other than the exhibits to those
documents, unless the exhibits are specifically incorporated by
reference into the information that this prospectus
incorporates. You should direct a request for copies to us as
follows:
Skyworks Solutions, Inc.
20 Sylvan Rd.
Woburn, MA 01801
Telephone:
(781) 376-3000
Attention: Investor Relations
You can access electronic copies of our Annual Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q
and Current Reports on
Form 8-K
and all amendments to those reports and any other documents we
file with the SEC, free of charge, on our website at
http://www.skyworksinc.com. Access to those electronic filings
is available as soon as reasonably practicable after they are
filed with, or furnished to, the SEC. We make our website
content available for information purposes only. It should not
be relied upon for investment purposes, nor is it incorporated
by reference into this prospectus.
3
PROSPECTUS
SUMMARY
This summary highlights selected information contained
elsewhere in or incorporated by reference into this prospectus
and does not contain all of the information you need to consider
in making your investment decision. This summary is qualified in
its entirety by the more detailed information and consolidated
financial statements and notes thereto incorporated by reference
into this prospectus. You should read carefully this entire
prospectus and such other information and should consider, among
other things, the matters set forth in the section entitled
Risk Factors before deciding to invest in the notes
or our common stock.
Our
Company
We design, manufacture and market a broad range of high
performance analog and mixed signal semiconductors that enable
wireless connectivity. Our power amplifiers (PAs), front-end
modules (FEMs) and integrated radio frequency (RF) solutions can
be found in many of the cellular handsets sold by the
worlds leading manufacturers. Leveraging our core PA and
RF technologies, we also offer a diverse portfolio of linear
integrated circuits (IC) that support automotive, broadband,
cellular infrastructure, industrial and medical applications.
We have aligned our product portfolio around two markets:
cellular handsets and diversified linear products. Our cellular
handset products include highly customized PAs, FEMs and
integrated RF transceivers that are at the heart of many of
todays leading-edge multimedia handsets. Our primary
customers for these products include top-tier handset
manufacturers such as Motorola, Sony Ericsson, Samsung and LG
Electronics. We also offer over 800 different linear products to
a highly diversified non-handset customer base. Our linear
products are precision ICs that target markets in wireless
communications infrastructure, broadband networking, medical,
automotive and industrial applications. Representative linear
products include catalog synthesizers, mixers, switches, diodes
and RF receivers. Our primary customers for linear products
include Ericsson, Huawei, Alcatel
Lucent, ZTE and
Broadcom, as well as leading distributors such as Avnet.
We are a leader in the PA and FEM market for cellular handsets,
and we plan to build upon our position by continuing to develop
more highly integrated and higher performance products necessary
for the next generation of multimedia handsets. Our competitors
in the handset market include RF Micro Devices, Anadigics
and TriQuint Semiconductor. In the linear products market, we
plan to continue to grow by both expanding distribution of our
standard components and by leveraging our core analog, mixed
signal and RF technologies to develop integrated products
for specific customer applications. Our competitors in the
linear products market include Analog Devices, Hittite
Microwave, Linear Technology and Maxim Integrated Products.
We operate worldwide, with manufacturing plants in North America
and facilities in Asia, Europe and North America.
Our principal executive offices are located at 20 Sylvan
Road, Woburn, Massachusetts 01801, and our telephone number
is
(781) 376-3000.
Our website is located at www.skyworksinc.com. Information
contained on our website is not a part of this prospectus.
4
The
Offering
This prospectus covers the resale of up to $200,000,000
aggregate principal amount of the notes and the shares of our
common stock issuable upon conversion of the notes. We issued
and sold a total of $200,000,000 aggregate principal amount of
the notes on March 2, 2007 in a private placement to an
initial purchaser. The following summary contains basic
information about the notes and is not intended to be complete.
It does not contain all the information that is important to
you. For a more complete understanding of the notes and the
shares of common stock issuable upon conversion of the notes,
please refer to the sections of this document entitled
Description of the Notes and Description of
Capital Stock, respectively. For purposes of the following
summary reference to we, us,
our and Skyworks refer solely to
Skyworks Solutions, Inc. and not to its subsidiaries.
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Issuer |
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Skyworks Solutions, Inc. |
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Selling Security Holders |
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The securities to be offered and sold using this prospectus will
be offered and sold by the selling security holders named in a
supplement to this prospectus or in one or more reports filed
with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. See Selling Security
Holders. |
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Notes Offered |
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$100,000,000 aggregate principal amount of
11/4% convertible
subordinated notes due 2010. |
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$100,000,000 aggregate principal amount of
11/2% convertible
subordinated notes due 2012. |
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Maturity Dates |
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March 1, 2010 for the 2010 notes. |
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March 1, 2012 for the 2012 notes. |
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Common Stock Offered |
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Shares of our common stock, par value $0.25 per share, issuable
upon conversion of the notes. |
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Interest Payment Dates |
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March 1 and September 1 of each year, beginning on
September 1, 2007. |
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Interest |
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11/4% per
annum for the 2010 notes. |
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11/2% per
annum for the 2012 notes. |
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Interest is payable semiannually in arrears. Interest will be
computed on the basis of a
360-day year
comprised of twelve
30-day
months. |
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Guarantees |
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The notes are not guaranteed. |
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Ranking |
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The notes are our unsecured subordinated obligations and are: |
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subordinated in right of payment to all of our
existing and future senior indebtedness, except that the notes
rank equal in right of payment with our 4.75% convertible
subordinated notes due November 2007 (the 2007
notes); and
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structurally subordinated in right of payment to all
indebtedness and liabilities of our subsidiaries, including
trade debt and amounts borrowed by our wholly-owned subsidiary,
Skyworks USA, Inc., under its credit facility with Wachovia
Bank, N.A., under which $50.0 million was outstanding as of
December 29, 2006.
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Conversion |
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Prior to maturity, a holder may surrender some or all of its
notes for conversion. Notes are convertible into cash, shares of
our common stock or a combination of cash and shares of our
common stock, at our option. Holders may only convert notes with
a principal amount of $1,000 or an integral multiple of $1,000. |
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The initial conversion rate for the 2010 notes and for the 2012
notes is 105.0696 shares per $1,000 principal amount of the
applicable notes, which is equivalent to a conversion price of
approximately $9.52 per share, in each case, subject to
adjustments for certain events. |
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Except as described in Description of the
Notes Conversion of Notes, no separate payment
or adjustment will be made for accrued and unpaid interest on a
converted note or for dividends or distributions on any of our
common stock issued upon conversion of a note. |
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Fundamental Change Purchase |
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A holder may require us to repurchase some or all of its notes
for cash upon the occurrence of a fundamental change at a price
equal to 100% of the principal amount of the notes being
repurchased, plus accrued and unpaid interest, if any, to, but
not including, the date of repurchase. See Description of
the Notes Repurchase of Notes at the Option of
Holders Upon a Fundamental Change. |
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Conversion Rate Adjustment upon a Fundamental Change |
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If a fundamental change occurs, we may be required to increase
the conversion rate for any notes converted in connection with
such fundamental change by a specified number of shares of our
common stock. |
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The extent to which the conversion rate will be increased will
be based on the price paid, or deemed to be paid, in respect of
a share of our common stock in, and the effective date of, the
fundamental change. A description of how the conversion rate
will be increased and tables showing the conversion rate that
would apply at various stock prices and fundamental change
effective dates are set forth under Description of the
Notes Conversion of Notes Increase of
Conversion Rate Upon Certain Fundamental Changes. |
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Sinking Fund |
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None. |
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Use of Proceeds |
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We will not receive any proceeds from the sale by any selling
security holder of the notes or our common stock issuable upon
conversion of the notes. |
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Trustee and Paying Agent |
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U.S. Bank National Association. |
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DTC Eligibility |
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The notes were issued in fully registered form and are
represented by permanent global certificates deposited with, or
on behalf of, The Depository Trust Company, or DTC, and
registered in the name of a nominee of DTC. Beneficial interests
in any of the notes will be shown on, and transfers will be
effected only through, records maintained by DTC or its nominee,
and any such interest may not be exchanged for certificated
securities, except in limited circumstances. See
Description of the Notes Book-Entry Delivery
and Form. |
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Listing and Trading |
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The notes are eligible for trading on The PORTAL Market;
however, we cannot assure any holder that any trading market
will develop or the notes will have any liquidity. See
Risk Factors. Our common stock is listed on the
Nasdaq Global Select Market under the symbol SWKS. |
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Governing Law |
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The indenture and the notes provide that they are governed by,
and construed in accordance with, the laws of the State of New
York. |
Risk
Factors
See Risk Factors beginning on page 8 of this
prospectus for a discussion of certain factors that you should
carefully consider before investing in the notes or our common
stock.
7
RISK
FACTORS
An investment in the notes and our common stock involves
risks. You should carefully consider the following risks, as
well as the other information contained in this prospectus. If
any of the following risks actually occurs, our business, and
your investment in the notes and our common stock, could be
negatively affected. The risks and uncertainties described below
are not the only ones we face. Additional risks and
uncertainties not presently known to us, or that we currently
see as immaterial, may also negatively affect us and your
investment in the notes and our common stock.
Risks
Relating to the Notes and Our Common Stock
If we
are unable to pay all of our debts, holders of the notes will
receive payment on the notes only if we have funds remaining
after we have paid our senior indebtedness.
The notes are unsecured and subordinated in right of payment to
all of our existing and future senior indebtedness. The
indenture governing the notes defines senior indebtedness as all
of our indebtedness other than any indebtedness that expressly
states that it is not superior in right of payment to the notes.
In the event of our bankruptcy, liquidation or reorganization or
upon acceleration of the convertible notes due to an event of
default under the indenture and in specified other events, our
assets will be available to pay obligations on the notes only
after all senior indebtedness has been paid. In addition, all
payments on the notes will be blocked in the event of a payment
default on certain senior indebtedness and may be blocked for up
to 179 consecutive days in the event of certain non-payment
defaults on certain senior indebtedness. As of December 29,
2006, we had no indebtedness outstanding that would constitute
senior indebtedness.
The notes are effectively subordinated to all indebtedness and
other liabilities of our subsidiaries, including amounts
borrowed by our wholly-owned subsidiary, Skyworks USA, Inc.,
under its credit facility with Wachovia Bank, N.A. As of
December 29, 2006, there was $50.0 million outstanding
under this credit facility. Our subsidiaries are separate and
distinct legal entities. Our subsidiaries have no obligation to
pay any amounts due on the notes or to provide us with funds for
payment of the notes. As a result, we may not have sufficient
assets to pay amounts due on any or all of the notes.
The
convertible notes are unsecured and contain no restrictive
covenants.
The notes are not secured by our assets or those of our
subsidiaries. The indenture does not limit our ability to incur
debt, including secured debt. Accordingly, the notes are
effectively subordinated to any of our existing or future
secured debt to the extent of the assets securing that debt. In
addition, the indenture does not contain any financial
covenants, restrict our ability to repurchase our securities,
pay dividends or make restricted payments or contain covenants
or other provisions to afford holders protection in the event of
a transaction that substantially increases our level of
indebtedness. Furthermore, the requirement that we offer to
repurchase the notes upon a fundamental change is limited to
transactions specified in the definition of fundamental
change under Description of the Notes
Repurchase of Notes at the Option of Holders Upon a Fundamental
Change and may not include other events that might
adversely affect our financial condition. In addition, the
requirement, if applicable, that we offer to repurchase the
notes upon a fundamental change may not protect holders in the
event of a highly leveraged transaction, reorganization, merger
or similar transaction involving us.
Rating
agencies may provide unsolicited ratings on the notes that could
reduce the market value or liquidity of the notes and our common
stock.
We have not requested a rating of the notes from any rating
agency and we do not anticipate that the notes will be rated.
However, if one or more rating agencies rates the notes and
assigns the notes a rating lower than the rating expected by
investors, or reduces their rating in the future, the market
price or liquidity of the notes and our common stock could be
harmed.
8
The
adjustment to increase the conversion rate for notes converted
in connection with a fundamental change may not adequately
compensate holders for the lost option time value of their notes
as a result of such fundamental change and may not be
enforceable.
If a fundamental change occurs, we may be required to increase
the conversion rate for any notes converted in connection with
such fundamental change. The extent to which the conversion rate
will be increased will be based on the date on which the
fundamental change becomes effective and the price paid, or
deemed to be paid, in respect of a share of our common stock in
the fundamental change as described under Description of
the Notes Conversion of Notes Increase
of Conversion Rate Upon Certain Fundamental Changes. While
this adjustment is designed to compensate the holders of notes
for the lost option time value of their notes as a result of a
fundamental change, the adjustment is only an approximation of
such lost value and may not adequately compensate them for such
loss. In addition, if the price paid, or deemed to be paid, in
respect of a share of our common stock in connection with such
fundamental change is less than $7.05 or more than $40.00
(subject to adjustment), we will not increase the conversion
rate in connection with such fundamental change. Furthermore,
our obligation to make the adjustment could be considered a
penalty, in which case the enforceability thereof would be
subject to general principles of reasonableness of economic
remedies.
There
is no public market for the notes, which could limit their
market price or the ability to sell them for an amount equal to
or higher than their initial offering price.
The notes are new issues of securities for which there currently
are no trading markets. Although the notes are designated for
trading on The PORTAL Market, we do not intend to apply for a
listing of the notes on any securities exchange or to arrange
for quotation on any automated dealer quotation system. As a
result, a market for the notes may not develop and the holders
of notes may not be able to sell their notes. If any of the
notes are traded after their initial issuance, they may trade at
a discount from their initial offering price. Future trading
prices of the notes will depend on many factors, including
prevailing interest rates, the market for similar securities,
the price of our underlying common stock, general economic
conditions and our financial condition, performance and
prospects. The initial purchaser has advised us that it intends
to make markets in the notes, but it is not obligated to do so.
The initial purchaser may terminate its market making activities
at any time, in its sole discretion, which could negatively
impact the ability of holders of notes to sell the notes or the
prevailing market price at the time holders of notes choose to
sell.
We may
not be able to repurchase the notes upon a fundamental change or
pay a holder of notes cash upon conversion of its
notes.
Upon the occurrence of a fundamental change, a holder of a note
will have the right to require us to repurchase its note at a
price in cash equal to 100% of the principal amount of the note
such holder has selected to be repurchased plus accrued and
unpaid interest, if any, to, but not including, the repurchase
date. Any future credit agreement or other agreements relating
to indebtedness to which we become a party may contain similar
provisions. In the event that we experience a fundamental change
that results in us having to repurchase the notes or upon a
holders conversion of notes, we may not have sufficient
financial resources to satisfy all of our obligations under the
notes and our other debt instruments. Our failure to make the
fundamental change offer, to pay the fundamental change
repurchase price when due, or to pay cash to a holder upon
conversion of notes, would result in a default under the
indenture governing the notes. In addition, the fundamental
change feature of the notes does not cover all corporate
reorganizations, mergers or similar transactions and may not
provide a holder with protection in a highly leveraged
transaction. See Description of the Notes
Repurchase of Notes at the Option of Holders Upon a Fundamental
Change and Description of the Notes
Consolidation, Merger and Sale of Assets.
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The
price of our common stock may experience volatility in the
future and the issuance of substantial amounts of our common
stock could adversely affect the price of our common stock and,
thus, the price of the notes. Additionally, the price of our
common stock will impact the price of the notes.
The notes are convertible into cash, shares of our common stock
or both cash and shares of our common stock, at our option, and
the number of shares into which the notes may be partially
converted will depend on the market price of our common stock.
The market price of our common stock may experience high
volatility in the future, and the broader stock market from time
to time experiences significant price and volume fluctuations.
This volatility has and may continue to affect the market prices
of securities issued by many companies for reasons unrelated to
their operating performance and may adversely affect the price
of our common stock in a similar fashion. In addition, our
announcements of our quarterly operating results or other
company-specific events, changes in general conditions in the
economy or the financial markets, changes in outlook, estimates
or coverage of us by research analysts and other developments
affecting us or our competitors could also cause the market
price of our common stock to fluctuate substantially. The
trading price of the notes is expected to be affected
significantly by the price of our common stock.
In addition, the issuance of substantial amounts of our common
stock, including any common stock issuable upon conversion of
the notes or the 4.75% convertible subordinated notes due
November 2007, or the 2007 notes, could adversely impact its
price. In the future, we may sell additional shares of our
common stock to raise capital. In addition, a substantial number
of shares of our common stock is reserved for issuance upon the
exercise of stock options and upon conversion of the notes or
the 2007 notes. As of December 29, 2006, approximately
12.5 million shares of our common stock were reserved for
issuance for outstanding stock options. We cannot predict the
size of future issuances or the effect, if any, that they may
have on the market price of our common stock. The issuance and
sales of substantial amounts of common stock, or the perception
that such issuances and sales may occur, could adversely affect
the market price of our common stock and the trading price of
the notes.
The price of our common stock could also be affected by possible
sales of our common stock by investors who view the notes or the
2007 notes as a more attractive means of equity
participation in us and by hedging or arbitrage trading activity
that may develop involving our common stock. The hedging or
arbitrage could, in turn, affect the trading prices of the notes.
Conversion
of the notes or the 2007 notes may affect the trading price
of our common stock.
The conversion of some or all of the notes or the
2007 notes and any sales in the public market of our common
stock issued upon such conversion could adversely affect the
market price of our common stock. In addition, the existence of
the notes or the 2007 notes may encourage short selling by
market participants because the conversion of the notes or the
2007 notes could depress our common stock price.
Upon
conversion of the notes, we may elect to provide converting
holders cash or a combination of cash and shares of our common
stock. Therefore, holders of the notes may receive no shares of
our common stock or fewer shares than they may
expect.
Our conversion obligation to holders will be satisfied, at our
option, in cash, shares of our common stock or a combination of
both. Accordingly, upon conversion of a note, holders may not
receive any shares of common stock, or they might receive fewer
shares of common stock than they may expect.
Holders
of notes will not be entitled to any rights with respect to our
common stock, but will be subject to all changes made with
respect to our common stock.
A holder of notes will have rights with respect to our common
stock only if and when we deliver shares of common stock to the
holder upon conversion of its notes and, in limited cases, under
the conversion rate adjustments applicable to the notes. For
example, in the event that an amendment is proposed to our
articles of incorporation or by-laws requiring stockholder
approval and the record date for determining the stockholders of
record entitled to vote on the amendment occurs prior to
delivery of common stock to a holder of notes, the holder will
not be entitled to vote on the amendment, although any shares of
our common stock that the holder
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later receives upon conversion will nevertheless be subject to
any changes in the powers, preferences or special rights of our
common stock. Similarly, if we declare a dividend, a holder of
notes will only be entitled to the conversion rate adjustment,
if any, provided for under Description of the
Notes Conversion of Notes Conversion
Rate Adjustments.
There
are restrictions on the ability to resell notes and any common
stock issuable upon conversion of the notes.
The notes and any common stock issuable upon conversion of the
notes are being offered and sold pursuant to an exemption from
registration under U.S. and applicable state securities
laws. As a result, the notes and any common stock issuable upon
conversion of the notes may be transferred or resold only in
transactions registered under, or exempt from, U.S. and
applicable state securities laws. Therefore, a holder of notes
may be required to bear the risk of its investment for an
indefinite period of time. Pursuant to a registration rights
agreement executed in connection with the offering by us of the
notes, we have filed a shelf registration statement, of which
this prospectus is a part with the SEC. We cannot assure any
holder that the registration statement will remain effective or
that there will be an active trading market for the notes. If
the registration statement does not remain effective, this could
adversely affect the liquidity and price of the notes and common
stock issuable upon conversion of the notes. Selling security
holders who sell notes or common stock issuable upon conversion
of the notes pursuant to the registration statement may be
subject to certain restrictions and potential liability under
the Securities Act. If we do not comply with certain of our
obligations under the registration rights agreement, we will be
obligated to pay additional interest to holders of the notes.
See Description of the Notes Registration
Rights.
Investors
should consider the U.S. federal income tax consequences of
owning the notes.
Holders should be aware that the conversion of notes into either
cash only or a combination of cash and shares of our common
stock will be taxable, at least in part, at the time of such
conversion (or subject to alternative treatment different from
that of conventional convertible debt instruments). These
consequences may be materially different from the consequences
that may be expected by holders in considering other convertible
debt investments. Investors are urged to consult with their own
tax advisor concerning such consequences and the potential
impact in particular circumstances. The material
U.S. federal income tax consequences of the purchase,
ownership and disposition of the notes are summarized in this
prospectus under the heading Certain United States Federal
Income Tax Considerations.
Holders
of notes may have to pay taxes with respect to distributions on
the common stock that they do not receive.
The conversion price of the notes is subject to adjustment for
certain events arising from stock splits and combinations, stock
dividends, certain cash dividends and certain other actions by
us that modify our capital structure. Please read
Description of the Notes Conversion of
Notes Conversion Rate Adjustments. If, for
example, the conversion price is adjusted as a result of a
distribution that is taxable to the holders of our common stock,
such as a cash dividend, a holder of notes may be required to
include an amount in income for federal income tax purposes,
notwithstanding the fact that the holder does not receive such
distribution. In addition, holders of the notes may, in certain
circumstances, be deemed to have received a distribution subject
to U.S. federal withholding tax requirements. If we pay
withholding taxes on behalf of a holder, we may set off such
payments against payments of cash and common stock on the notes.
See Certain United States Federal Income Tax
Considerations.
Our
stock price has been volatile and may fluctuate in the future.
Accordingly, the price of our notes may fluctuate.
The trading price of our common stock has and may continue to
fluctuate significantly. Such fluctuations may be influenced by
many factors, including:
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our performance and prospects,
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the performance and prospects of our major customers,
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the depth and liquidity of the market for our common stock,
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investor perception of us and the industry in which we operate,
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changes in earnings estimates or buy/sell recommendations by
analysts,
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general financial and other market conditions, and
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domestic and international economic conditions.
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Public stock markets have recently experienced extreme price and
trading volume volatility, particularly in the technology
sectors of the market. This volatility has significantly
affected the market prices of securities of many technology
companies for reasons frequently unrelated to or
disproportionately impacted by the operating performance of
these companies. These broad market fluctuations may materially
and adversely affect the market price of our common stock.
In addition, fluctuations in our stock price, volume of shares
traded, and our
price-to-earnings
multiple may have made our stock attractive to momentum, hedge
or day-trading investors who often shift funds into and out of
stocks rapidly, exacerbating price fluctuations in either
direction, particularly when viewed on a quarterly basis. We
have been, and in the future may be, the subject of commentary
by financial news media. Such commentary may contribute to
volatility in our stock price. If our operating results do not
meet the expectations of securities analysts or investors, our
stock price may decline, possibly substantially over a short
period of time.
We
have no plans to pay dividends on our common stock. A common
stockholder may not receive funds without selling its
shares.
We currently intend to retain all of our future earnings, if
any, to finance our operations. Accordingly, we do not
anticipate paying any cash dividends on our common stock in the
foreseeable future. The declaration, payment and amount of
future dividends, if any, will be at the sole discretion of our
board of directors after taking into account various factors,
including our financial condition, results of operations, cash
flow from operations, current and anticipated capital
requirements and expansion plans, the income tax laws then in
effect and the requirements of Delaware law.
We can
issue preferred stock without stockholder approval, which could
materially adversely affect the rights of common
stockholders.
Our second amended and restated certificate of incorporation
authorizes us to issue up to 25,000,000 shares of preferred
stock in one or more series, the designation, number, voting
powers, preferences, and rights of which may be fixed from time
to time by our board of directors. Accordingly, the board of
directors has the authority, without stockholder approval, to
issue preferred stock with rights that could materially
adversely affect the voting power or other rights of the common
stockholders or the market value of the common stock.
Risks
Relating to Our Business
We
operate in the highly cyclical wireless communications
semiconductor industry, which is subject to significant
downturns.
We operate primarily in the semiconductor industry, which is
cyclical and subject to rapid change and evolving industry
standards. From time to time, changes in general economic
conditions, together with other factors, cause significant
upturns and downturns in the industry. Periods of industry
downturn are characterized by diminished product demand,
production overcapacity, excess inventory levels and accelerated
erosion of average selling prices. These characteristics, and in
particular their impact on the level of demand for digital
cellular handsets, may cause substantial fluctuations in our
revenues and results of operations. Furthermore, downturns in
the semiconductor industry may be severe and prolonged, and any
prolonged delay or failure of
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the industry or the wireless communications market to recover
from downturns would materially and adversely affect our
business, financial condition and results of operations. The
semiconductor industry also periodically experiences increased
demand and production capacity and materials constraints, which
may affect our ability to meet customer demand for our products.
We have experienced these cyclical fluctuations in our business
and may experience cyclical fluctuations in the future.
There
are many uncertainties involving shifting marketplace dynamics.
If we are unable to respond to shifting customer demand on a
timely basis, if at all, our operating results may be adversely
affected.
Our operating results for fiscal 2005 and fiscal 2006 were
adversely affected by shifting marketplace dynamics which
favored Tier I and Tier II handset manufacturers and
suppliers. Consolidation of the global handset marketplace from
smaller Tier III handset customers primarily located in
developing countries to Tier I and Tier II customers
accelerated in fiscal 2006. This trend led to a slowdown in
customer orders, increasing channel inventories and customer
defaults on accounts receivable. We responded to this rapidly
changing dynamic by exiting our baseband product area in the
fourth quarter of fiscal 2006. While this marketplace shift only
affected our baseband product area, there can be no assurances
that future changes in marketplace conditions in our other
product areas will not materially and adversely affect our
operating results. We may not be able to respond to shifting
customer demand in other product areas on a timely basis, if at
all, and accordingly this could result in a material and adverse
impact to our operating results.
We
have incurred substantial operating losses in the past and may
experience future losses.
Our operating results for fiscal years 2002 and 2003 were
adversely affected by a global economic slowdown, decreased
consumer confidence, reduced capital spending, and adverse
business conditions and liquidity concerns in the
telecommunications and related industries. These factors led to
a slowdown in customer orders, an increase in the number of
cancellations and reschedulings of backlog, higher overhead
costs as a percentage of our reduced net revenue, and an abrupt
decline in demand for many of the end-user products that
incorporate our wireless communications semiconductor products
and system solutions.
During the fourth fiscal quarter of 2006, we began the
restructuring of our business by discontinuing our baseband
operations which resulted in substantial operating losses. As a
result, in fiscal year 2006, we had operating losses of
$66.3 million.
Additionally, the conflict in Iraq, as well as other
contemporary international conflicts, natural disasters, acts of
terrorism, and civil and military unrest contributes to the
economic uncertainty. These continuing and potentially
escalating conflicts can also be expected to place continued
pressure on economic conditions in the United States and
worldwide. These conditions make it extremely difficult for our
customers, our vendors and for us to accurately forecast and
plan future business activities. If such uncertainty continues
or economic conditions worsen (or both), our business, financial
condition and results of operations will likely be materially
and adversely affected.
The
wireless semiconductor markets are characterized by intense
competition which may cause pricing pressures, decreased gross
margins and loss of market share and may materially and
adversely affect our business, financial condition and results
of operations.
The wireless communications semiconductor industry in general
and the markets in which we compete in particular are intensely
competitive. We compete with U.S. and international
semiconductor manufacturers of all sizes in terms of resources
and market share, including RF Micro Devices, Anadigics and
TriQuint Semiconductor. As we expand in the linear products
market, we will compete with companies in other industries,
including Analog Devices, Hittite Microwave, Linear Technology
and Maxim Integrated Products.
We currently face significant competition in our markets and
expect that intense price and product competition will continue.
This competition has resulted in, and is expected to continue to
result in, declining average selling prices for our products and
increased challenges in maintaining or increasing market share.
Furthermore, additional competitors may enter our markets as a
result of growth opportunities in communications electronics,
the trend toward global expansion by foreign and domestic
competitors and technological
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and public policy changes. We believe that the principal
competitive factors for semiconductor suppliers in our markets
include, among others:
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rapid
time-to-market
and product ramp,
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timely new product innovation,
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product quality, reliability and performance,
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product price,
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features available in products,
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compliance with industry standards,
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strategic relationships with customers, and
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access to and protection of intellectual property.
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We cannot assure you that we will be able to successfully
address these factors. Many of our competitors enjoy the benefit
of:
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long presence in key markets,
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name recognition,
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high levels of customer satisfaction,
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ownership or control of key technology or intellectual
property, and
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strong financial, sales and marketing, manufacturing,
distribution, technical or other resources.
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As a result, certain competitors may be able to adapt more
quickly than we can to new or emerging technologies and changes
in customer requirements or may be able to devote greater
resources to the development, promotion and sale of their
products than we can.
Current and potential competitors have established or may in the
future establish, financial or strategic relationships among
themselves or with customers, resellers or other third parties.
These relationships may affect customers purchasing
decisions. Accordingly, it is possible that new competitors or
alliances among competitors could emerge and rapidly acquire
significant market share. Furthermore, some of our customers
have divisions that internally develop or manufacture products
similar to ours, and may compete with us. We cannot assure you
that we will be able to compete successfully against current and
potential competitors. Increased competition could result in
pricing pressures, decreased gross margins and loss of market
share and may materially and adversely affect our business,
financial condition and results of operations.
Our
manufacturing processes are extremely complex and specialized
and disruptions could have a material adverse effect on our
business, financial condition and results of
operations.
Our manufacturing operations are complex and subject to
disruption, including for causes beyond our control. The
fabrication of integrated circuits is an extremely complex and
precise process consisting of hundreds of separate steps. It
requires production in a highly controlled, clean environment.
Minor impurities, contamination of the clean room environment,
errors in any step of the fabrication process, defects in the
masks used to print circuits on a wafer, defects in equipment or
materials, human error, or a number of other factors can cause a
substantial percentage of wafers to be rejected or numerous die
on each wafer to malfunction. Because our operating results are
highly dependent upon our ability to produce integrated circuits
at acceptable manufacturing yields, these factors could have a
material adverse affect on our business. In addition, we may
discover from time to time defects in our products after they
have been shipped, which may require us to pay warranty claims,
replace products, or pay costs associated with the recall of a
customers products containing our parts.
Additionally, our operations may be affected by lengthy or
recurring disruptions of operations at any of our production
facilities or those of our subcontractors. These disruptions may
include electrical power
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outages, fire, earthquake, flooding, war, acts of terrorism,
health advisories or risks, or other natural or man-made
disasters. Disruptions of our manufacturing operations could
cause significant delays in shipments until we are able to shift
the products from an affected facility or subcontractor to
another facility or subcontractor. In the event of such delays,
we cannot assure you that the required alternative capacity,
particularly wafer production capacity, would be available on a
timely basis or at all. Even if alternative wafer production or
assembly and test capacity is available, we may not be able to
obtain it on favorable terms, which could result in higher costs
and/or a
loss of customers. We may be unable to obtain sufficient
manufacturing capacity to meet demand, either at our own
facilities or through external manufacturing or similar
arrangements with others.
Due to the highly specialized nature of the gallium arsenide
integrated circuit manufacturing process, in the event of a
disruption at the Newbury Park, California or Woburn,
Massachusetts semiconductor wafer fabrication facilities,
alternative gallium arsenide production capacity would not be
immediately available from third-party sources. These
disruptions could have a material adverse effect on our
business, financial condition and results of operations.
We may
not be able to maintain and improve manufacturing yields that
contribute positively to our gross margin and
profitability.
Minor deviations or perturbations in the manufacturing process
can cause substantial manufacturing yield loss, and in some
cases, cause production to be suspended. Manufacturing yields
for new products initially tend to be lower as we complete
product development and commence volume manufacturing, and
typically increase as we bring the product to full production.
Our forward product pricing includes this assumption of
improving manufacturing yields and, as a result, material
variances between projected and actual manufacturing yields will
have a direct effect on our gross margin and profitability. The
difficulty of accurately forecasting manufacturing yields and
maintaining cost competitiveness through improving manufacturing
yields will continue to be magnified by the increasing process
complexity of manufacturing semiconductor products. Our
manufacturing operations will also face pressures arising from
the compression of product life cycles, which will require us to
manufacture new products faster and for shorter periods while
maintaining acceptable manufacturing yields and quality without,
in many cases, reaching the longer-term, high-volume
manufacturing conducive to higher manufacturing yields and
declining costs.
We are
dependent upon third parties for the manufacture, assembly and
test of our products.
We rely upon independent wafer fabrication facilities, called
foundries, to provide silicon-based products and to supplement
our gallium arsenide wafer manufacturing capacity. There are
significant risks associated with reliance on third-party
foundries, including:
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the lack of ensured wafer supply, potential wafer shortages and
higher wafer prices,
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limited control over delivery schedules, manufacturing yields,
production costs and quality assurance, and
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the inaccessibility of, or delays in obtaining access to, key
process technologies.
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Although we have long-term supply arrangements to obtain
additional external manufacturing capacity, the third-party
foundries we use may allocate their limited capacity to the
production requirements of other customers. If we choose to use
a new foundry, it will typically take an extended period of time
to complete the qualification process before we can begin
shipping products from the new foundry. The foundries may
experience financial difficulties, be unable to deliver products
to us in a timely manner or suffer damage or destruction to
their facilities, particularly since some of them are located in
earthquake zones. If any disruption of manufacturing capacity
occurs, we may not have alternative manufacturing sources
immediately available. We may therefore experience difficulties
or delays in securing an adequate supply of our products, which
could impair our ability to meet our customers needs and
have a material adverse effect on our operating results.
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Although we own and operate a test and assembly facility, we
still depend on subcontractors to package, assemble and test
certain of our products. We do not have long-term agreements
with any of our assembly or test subcontractors and typically
procure services from these suppliers on a per order basis. If
any of these subcontractors experiences capacity constraints or
financial difficulties, suffers any damage to its facilities,
experiences power outages or any other disruption of assembly or
testing capacity, we may not be able to obtain alternative
assembly and testing services in a timely manner. Due to the
amount of time that it usually takes us to qualify assemblers
and testers, we could experience significant delays in product
shipments if we are required to find alternative assemblers or
testers for our components. Any problems that we may encounter
with the delivery, quality or cost of our products could damage
our customer relationships and materially and adversely affect
our results of operations. We are continuing to develop
relationships with additional third-party subcontractors to
assemble and test our products. However, even if we use these
new subcontractors, we will continue to be subject to all of the
risks described above.
We are
dependent upon third parties for the supply of raw materials and
components.
Our manufacturing operations depend on obtaining adequate
supplies of raw materials and the components used in our
manufacturing processes. Although we maintain relationships with
suppliers located around the world with the objective of
ensuring that we have adequate sources for the supply of raw
materials and components for our manufacturing needs, recent
increased demand from the semiconductor industry for such raw
materials and components has resulted in tighter supplies. We
cannot assure you that our suppliers will be able to meet our
delivery schedules, that we will not lose a significant or sole
supplier, or that a supplier will be able to meet performance
and quality specifications. If a supplier were unable to meet
our delivery schedules, or if we lost a supplier or a supplier
were unable to meet performance or quality specifications, our
ability to satisfy customer obligations would be materially and
adversely affected. In addition, we review our relationships
with suppliers of raw materials and components for our
manufacturing needs on an ongoing basis. In connection with our
ongoing review, we may modify or terminate our relationship with
one or more suppliers. We may also enter into other sole
supplier arrangements to meet certain of our raw material or
component needs. While we do not typically rely on a single
source of supply for our raw materials, we are currently
dependent on a sole-source supplier for epitaxial wafers used in
the gallium arsenide semiconductor manufacturing processes at
our manufacturing facilities. If we were to lose this sole
source of supply, for any reason, a material adverse effect on
our business could result until an alternate source is obtained.
To the extent we enter into additional sole supplier
arrangements for any of our raw materials or components, the
risks associated with our supply arrangements would be
exacerbated.
Our
success depends upon our ability to develop new products and
reduce costs in a timely manner.
The wireless communications semiconductor industry generally
and, in particular, the markets into which we sell our products
are highly cyclical and characterized by constant and rapid
technological change, rapid product evolution, price erosion,
evolving technical standards, short product life cycles,
increasing demand for higher levels of integration, increased
miniaturization, and wide fluctuations in product supply and
demand. Our operating results depend largely on our ability to
continue to cost-effectively introduce new and enhanced products
on a timely basis. The successful development and
commercialization of semiconductor devices and modules is highly
complex and depends on numerous factors, including:
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the ability to anticipate customer and market requirements and
changes in technology and industry standards,
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the ability to obtain capacity sufficient to meet customer
demand,
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the ability to define new products that meet customer and market
requirements,
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the ability to complete development of new products and bring
products to market on a timely basis,
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the ability to differentiate our products from offerings of our
competitors,
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overall market acceptance of our products, and
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the ability to obtain adequate intellectual property protection
for our new products.
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Our ability to manufacture current products, and to develop new
products, depends, among other factors, on the viability and
flexibility of our own internal information technology systems,
or IT Systems.
We cannot assure you that we will have sufficient resources to
make the substantial investment in research and development
needed to develop and bring to market new and enhanced products
in a timely manner. We will be required to continually evaluate
expenditures for planned product development and to choose among
alternative technologies based on our expectations of future
market growth. We cannot assure you that we will be able to
develop and introduce new or enhanced wireless communications
semiconductor products in a timely and cost-effective manner,
that our products will satisfy customer requirements or achieve
market acceptance or that we will be able to anticipate new
industry standards and technological changes. We also cannot
assure you that we will be able to respond successfully to new
product announcements and introductions by competitors or to
changes in the design or specifications of complementary
products of third parties with which our products interface. If
we fail to rapidly and cost-effectively introduce new and
enhanced products in sufficient quantities and that meet our
customers requirements, our business and results of operations
would be materially and adversely harmed.
In addition, prices of many of our products decline, sometimes
significantly, over time. We believe that to remain competitive,
we must continue to reduce the cost of producing and delivering
existing products at the same time that we develop and introduce
new or enhanced products. We cannot assure you that we will be
able to continue to reduce the cost of our products to remain
competitive.
The
markets into which we sell our products are characterized by
rapid technological change. If we are not able to adapt to
changes, our products may become obsolete.
The demand for our products can change quickly and in ways we
may not anticipate. Our markets generally exhibit the following
characteristics:
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rapid technological developments and product evolution,
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rapid changes in customer requirements,
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frequent new product introductions and enhancements,
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demand for higher levels of integration, decreased size and
decreased power consumption,
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short product life cycles with declining prices over the life
cycle of the product, and
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evolving industry standards.
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These changes in our markets may contribute to the obsolescence
of our products. Our products could become obsolete or less
competitive sooner than anticipated because of a faster than
anticipated change in one or more of the above-noted factors.
If we
are unable to attract and retain qualified personnel to
contribute to the design, development, manufacture and sale of
our products, we may not be able to effectively operate our
business.
As the source of our technological and product innovations, our
key technical personnel represent a significant asset. Our
success depends on our ability to continue to attract, retain
and motivate qualified personnel, including executive officers
and other key management and technical personnel. The
competition for management and technical personnel is intense in
the semiconductor industry, and therefore we cannot assure you
that we will be able to attract and retain qualified management
and other personnel necessary for the design, development,
manufacture and sale of our products. We may have particular
difficulty attracting and retaining key personnel during periods
of poor operating performance, given, among other things, the
use of equity-based compensation by us and our competitors. The
loss of the services of one or more of our key
17
employees or our inability to attract, retain and motivate
qualified personnel, could have a material adverse effect on our
ability to operate our business.
If
OEMs and Original Design Manufacturers, or ODMs, of
communications electronics products do not design our products
into their equipment, we will have difficulty selling those
products. Moreover, a design win from a customer
does not guarantee future sales to that customer.
Our products are not sold directly to the end-user, but are
components or subsystems of other products. As a result, we rely
on OEMs and ODMs of wireless communications electronics products
to select our products from among alternative offerings to be
designed into their equipment. Without these design
wins, we would have difficulty selling our products. If a
manufacturer designs another suppliers product into one of
its product platforms, it is more difficult for us to achieve
future design wins with that platform because changing suppliers
involves significant cost, time, effort and risk on the part of
that manufacturer. Also, achieving a design win with a customer
does not ensure that we will receive significant revenues from
that customer. Even after a design win, the customer is not
obligated to purchase our products and can choose at any time to
reduce or cease use of our products, for example, if its own
products are not commercially successful, or for any other
reason. We cannot assure you that we will continue to achieve
design wins or to convert design wins into actual sales, and any
failure to do so could materially and adversely affect our
operating results.
Lengthy
product development and sales cycles associated with many of our
products may result in significant expenditures before
generating any revenues related to those products.
After our product has been developed, tested and manufactured,
our customers may need three to six months or longer to
integrate, test and evaluate our product and an additional three
to six months or more to begin volume production of equipment
that incorporates the product. This lengthy cycle time increases
the possibility that a customer may decide to cancel or change
product plans, which could reduce or eliminate our sales to that
customer. As a result of this lengthy sales cycle, we may incur
significant research and development expenses, and selling,
general and administrative expenses, before we generate the
related revenues for these products. Furthermore, we may never
generate the anticipated revenues from a product after incurring
such expenses if our customer cancels or changes its product
plans.
Uncertainties
involving the ordering and shipment of, and payment for, our
products could adversely affect our business.
Our sales are typically made pursuant to individual purchase
orders and not under long-term supply arrangements with our
customers. Our customers may cancel orders before shipment.
Additionally, we sell a portion of our products through
distributors, some of whom have rights to return unsold
products. We may purchase and manufacture inventory based on
estimates of customer demand for our products, which is
difficult to predict. This difficulty may be compounded when we
sell to OEMs indirectly through distributors or contract
manufacturers, or both, as our forecasts of demand will then be
based on estimates provided by multiple parties. In addition,
our customers may change their inventory practices on short
notice for any reason. The cancellation or deferral of product
orders, the return of previously sold products, or
overproduction due to a change in anticipated order volumes
could result in us holding excess or obsolete inventory, which
could result in inventory write-downs and, in turn, could have a
material adverse effect on our financial condition.
In addition, if a customer encounters financial difficulties of
its own as a result of a change in demand or for any other
reason, the customers ability to make timely payments to
us for non-returnable products could be impaired.
In the fourth quarter of fiscal 2006, the Company recorded bad
debt expense of $35.1 million. Specifically, the Company
recorded charges related to two customers: Vitelcom Mobile
Technology SA and an Asian component distributor.
18
Our
leverage and our debt service obligations may adversely affect
our cash flow.
On December 29, 2006, we had total indebtedness of
approximately $229.3 million, which represented
approximately 30.7% of our total capitalization. We incurred an
additional $200 million of indebtedness in connection with
the issuance of the notes in March 2007.
We may require additional funding prior to the date that we
expect our existing sources of liquidity, together with cash
expected to be generated from operations and short term
investments, to allow us to sufficiently fund our research and
development, capital expenditures, acquisitions, debt
obligations, purchase obligations, working capital and other
cash requirements. If necessary, among other alternatives, we
may add lease lines of credit to finance capital expenditures
and we may obtain other long-term debt, lines of credit and
other financing.
Our indebtedness could have significant negative consequences,
including:
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increasing our vulnerability to general adverse economic and
industry conditions,
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limiting our ability to obtain additional financing,
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requiring the dedication of a substantial portion of any cash
flow from operations to service our indebtedness, thereby
reducing the amount of cash flow available for other purposes,
including capital expenditures,
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limiting our flexibility in planning for, or reacting to,
changes in our business and the industry in which we
compete, and
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placing us at a possible competitive disadvantage to less
leveraged competitors and competitors that have better access to
capital resources.
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Despite our current debt levels, we are able to incur
substantially more debt, which would increase the risks
described above.
Our
reliance on a small number of customers for a large portion of
our sales could have a material adverse effect on the results of
our operations.
Significant portions of our sales are concentrated among a
limited number of customers. If we lost one or more of these
major customers, or if one or more major customers significantly
decreased its orders for our products, our business would be
materially and adversely affected. Sales to our three largest
customers in fiscal 2006, Motorola, Inc., Sony Ericsson Mobile
Communication AB and Asian Information Technology, Inc.,
including sales to their manufacturing subcontractors,
represented approximately 50% of our net revenue for fiscal
2006. We expect that our largest customers will continue to
account for a substantial portion of our net revenue in fiscal
2007 and for the foreseeable future.
Average
product life cycles in the semiconductor industry tend to be
very short. If we are unable to sell our products at an
acceptable price, or at all, our operating results would be
harmed.
In the semiconductor industry, product life cycles tend to be
short relative to the sales and development cycles. Therefore,
the resources devoted to product sales and marketing may not
result in material revenue, and from time to time we may need to
write off excess or obsolete inventory. If we were to incur
significant marketing expenses and investments in inventory that
we are not able to recover, and we are not able to compensate
for those expenses, our operating results would be materially
and adversely affected. In addition, if we sell our products at
reduced prices in anticipation of cost reductions but still hold
higher cost products in inventory, our operating results would
be harmed.
We
face a risk that capital needed for our business will not be
available when we need it.
We might obtain additional sources of financing in the future.
To the extent that our existing cash and securities and cash
from operations are insufficient to fund our future activities,
we may need to raise additional funds through public or private
equity or debt financing. Conditions existing in the
U.S. capital
19
markets, if and when we seek additional financing as well as the
then current condition of the Company, will affect our ability
to raise capital, as well as the terms of any such financing. We
may not be able to raise enough capital to meet our capital
needs on a timely basis or at all. Failure to obtain capital
when required would have a material adverse effect on us.
In addition, any strategic investments and acquisitions that we
may make to help us grow our business may require additional
capital resources. We cannot assure you that the capital
required to fund these investments and acquisitions will be
available in the future.
Remaining
competitive in the semiconductor industry requires transitioning
to smaller geometry process technologies and achieving higher
levels of design integration.
In order to remain competitive, we expect to continue to
transition our semiconductor products to increasingly smaller
line width geometries. This transition requires us to modify the
manufacturing processes for our products, design new products to
more stringent standards, and to redesign some existing
products. In the past, we have experienced some difficulties
migrating to smaller geometry process technologies or new
manufacturing processes, which resulted in
sub-optimal
manufacturing yields, delays in product deliveries and increased
expenses. We may face similar difficulties, delays and expenses
as we continue to transition our products to smaller geometry
processes in the future. In some instances, we depend on our
relationships with our foundries to transition to smaller
geometry processes successfully. We cannot assure you that our
foundries will be able to effectively manage the transition or
that we will be able to maintain our foundry relationships. If
our foundries or we experience significant delays in this
transition or fail to efficiently implement this transition, our
business, financial condition and results of operations could be
materially and adversely affected. As smaller geometry processes
become more prevalent, we expect to continue to integrate
greater levels of functionality, as well as customer and third
party intellectual property, into our products. However, we may
not be able to achieve higher levels of design integration or
deliver new integrated products on a timely basis, or at all.
We are
subject to the risks of doing business
internationally.
A substantial majority of our net revenues are derived from
customers located outside the United States, primarily countries
located in the Asia-Pacific region and Europe. In addition, we
have suppliers located outside the United States, and
third-party packaging, assembly and test facilities and
foundries located in the Asia-Pacific region. Finally, we have
our own packaging, assembly and test facility in Mexicali,
Mexico. Our international sales and operations are subject to a
number of risks inherent in selling and operating abroad. These
include, but are not limited to, risks regarding:
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currency exchange rate fluctuations,
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local economic and political conditions, including social,
economic and political instability,
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disruptions of capital and trading markets,
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inability to collect accounts receivable,
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restrictive governmental actions (such as restrictions on
transfer of funds and trade protection measures, including
export duties, quotas, customs duties, import or export controls
and tariffs),
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changes in legal or regulatory requirements,
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natural disasters, acts of terrorism, widespread illness and war,
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limitations on the repatriation of funds,
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difficulty in obtaining distribution and support,
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cultural differences in the conduct of business,
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the laws and policies of the United States and other countries
affecting trade, foreign investment and loans, and import or
export licensing requirements,
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tax laws,
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the possibility of being exposed to legal proceedings in a
foreign jurisdiction, and
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limitations on our ability under local laws to protect or
enforce our intellectual property rights in a particular foreign
jurisdiction.
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Additionally, we are subject to risks in certain global markets
in which wireless operators provide subsidies on handset sales
to their customers. Increases in handset prices that negatively
impact handset sales can result from changes in regulatory
policies or other factors, which could impact the demand for our
products. Limitations or changes in policy on phone subsidies in
South Korea, Japan, China and other countries may have
additional negative impacts on our revenues.
Our
operating results may be adversely affected by substantial
quarterly and annual fluctuations and market
downturns.
Our revenues, earnings and other operating results have
fluctuated in the past and our revenues, earnings and other
operating results may fluctuate in the future. These
fluctuations are due to a number of factors, many of which are
beyond our control.
These factors include, among others:
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changes in end-user demand for the products (principally digital
cellular handsets) manufactured and sold by our customers,
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the effects of competitive pricing pressures, including
decreases in average selling prices of our products,
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production capacity levels and fluctuations in manufacturing
yields,
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availability and cost of products from our suppliers,
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the gain or loss of significant customers,
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our ability to develop, introduce and market new products and
technologies on a timely basis,
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new product and technology introductions by competitors,
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changes in the mix of products produced and sold,
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market acceptance of our products and our customers, and
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intellectual property disputes.
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The foregoing factors are difficult to forecast, and these, as
well as other factors, could materially and adversely affect our
quarterly or annual operating results. If our operating results
fail to meet the expectations of analysts or investors, it could
materially and adversely affect the price of our common stock.
Global
economic conditions that impact the wireless communications
industry could negatively affect our revenues and operating
results.
Global economic weakness can have wide-ranging effects on
markets that we serve, particularly wireless communications
equipment manufacturers and network operators. Although the
wireless communications industry has recovered somewhat from an
industry-wide recession, such recovery may not continue. In
addition, we cannot predict what effects negative events, such
as war or other international conflicts, may have on the economy
or the wireless communications industry. The continued threat of
terrorism and heightened security and military action in
response to this threat, or any future acts of terrorism, may
cause further disruptions to the global economy and to the
wireless communications industry and create further
uncertainties. Further, a continued economic recovery may not
benefit us in the near term. If it does not, our ability to
increase or maintain our revenues and operating results may be
impaired.
21
Our
gallium arsenide semiconductors may cease to be competitive with
silicon alternatives.
Among our product portfolio, we manufacture and sell gallium
arsenide semiconductor devices and components, principally power
amplifiers and switches. The production of gallium arsenide
integrated circuits is more costly than the production of
silicon circuits. The cost differential is due to higher costs
of raw materials for gallium arsenide and higher unit costs
associated with smaller sized wafers and lower production
volumes. Therefore, to remain competitive, we must offer gallium
arsenide products that provide superior performance over their
silicon-based counterparts. If we do not continue to offer
products that provide sufficiently superior performance to
justify the cost differential, our operating results may be
materially and adversely affected. We expect the costs of
producing gallium arsenide devices will continue to exceed the
costs of producing their silicon counterparts. Silicon
semiconductor technologies are widely used process technologies
for certain integrated circuits and these technologies continue
to improve in performance. We cannot assure you that we will
continue to identify products and markets that require
performance attributes of gallium arsenide solutions.
We may
be subject to claims of infringement of third-party intellectual
property rights, or demands that we license third-party
technology, which could result in significant expense and
prevent us from using our technology.
The semiconductor industry is characterized by vigorous
protection and pursuit of intellectual property rights. From
time to time, third parties have asserted and may in the future
assert patent, copyright, trademark and other intellectual
property rights to technologies that are important to our
business and have demanded and may in the future demand that we
license their technology or refrain from using it.
Any litigation to determine the validity of claims that our
products infringe or may infringe intellectual property rights
of another, including claims arising from our contractual
indemnification of our customers, regardless of their merit or
resolution, could be costly and divert the efforts and attention
of our management and technical personnel. Regardless of the
merits of any specific claim, we cannot assure you that we would
prevail in litigation because of the complex technical issues
and inherent uncertainties in intellectual property litigation.
If litigation were to result in an adverse ruling, we could be
required to:
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pay substantial damages,
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cease the manufacture, import, use, sale or offer for sale of
infringing products or processes,
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discontinue the use of infringing technology,
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expend significant resources to develop non-infringing
technology, and
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license technology from the third party claiming infringement,
which license may not be available on commercially reasonable
terms.
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We cannot assure you that our operating results or financial
condition will not be materially adversely affected if we were
required to do any one or more of the foregoing items.
Many
of our products incorporate technology licensed or acquired from
third parties. If licenses to such technology are not available
on commercially reasonable terms and conditions, our business
could be adversely affected.
We sell products in markets that are characterized by rapid
technological changes; evolving industry standards, frequent new
product introductions, short product life cycles and increasing
levels of integration. Our ability to keep pace with this market
depends on our ability to obtain technology from third parties
on commercially reasonable terms to allow our products to remain
in a competitive posture. If licenses to such technology are not
available on commercially reasonable terms and conditions, and
we cannot otherwise integrate such technology, our products or
our customers products could become unmarketable or
obsolete, and we could lose market share. In such instances, we
could also incur substantial unanticipated costs or scheduling
delays to develop substitute technology to deliver competitive
products.
22
If we
are not successful in protecting our intellectual property
rights, it may harm our ability to compete.
We rely on patent, copyright, trademark, trade secret and other
intellectual property laws, as well as nondisclosure and
confidentiality agreements and other methods, to protect our
proprietary technologies, information, data, devices, algorithms
and processes. In addition, we often incorporate the
intellectual property of our customers, suppliers or other third
parties into our designs, and we have obligations with respect
to the non-use and non-disclosure of such third-party
intellectual property. In the future, it may be necessary to
engage in litigation or like activities to enforce our
intellectual property rights, to protect our trade secrets or to
determine the validity and scope of proprietary rights of
others, including our customers. This could require us to expend
significant resources and to divert the efforts and attention of
our management and technical personnel from our business
operations. We cannot assure you that:
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the steps we take to prevent misappropriation, infringement,
dilution or other violation of our intellectual property or the
intellectual property of our customers, suppliers or other third
parties will be successful,
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any existing or future patents, copyrights, trademarks, trade
secrets or other intellectual property rights or ours will not
be challenged, invalidated or circumvented, or
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any of the measures described above would provide meaningful
protection.
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Despite these precautions, it may be possible for a third party
to copy or otherwise obtain and use our technology without
authorization, develop similar technology independently or
design around our patents. If any of our intellectual property
protection mechanisms fails to protect our technology, it would
make it easier for our competitors to offer similar products,
potentially resulting in loss of market share and price erosion.
Even if we receive a patent, the patent claims may not be broad
enough to adequately protect our technology. Furthermore, even
if we receive patent protection in the United States, we may not
seek, or may not be granted, patent protection in foreign
countries. In addition, effective patent, copyright, trademark
and trade secret protection may be unavailable or limited for
certain technologies and in certain foreign countries.
There is a growing industry trend to include or adapt open
source software that is generally made available to the
public by its developers, authors or third parties. Often such
software includes license provisions, requiring public
disclosure of any derivative works containing open source code.
There is little legal precedent in the area of open source
software or its effects on copyright law or the protection of
proprietary works. We take steps to avoid the use of open source
works in our proprietary software, and are taking steps to limit
our suppliers from doing so. However, in the event a copyright
holder were to demonstrate in court that we have not complied
with a software license, we may be required to cease production
or distribution of that work or to publicly disclose the source
code for our proprietary software, which may negatively affect
our operations or stock price.
We attempt to control access to and distribution of our
proprietary information through operational, technological and
legal safeguards. Despite our efforts, parties, including former
or current employees, may attempt to copy, disclose or obtain
access to our information without our authorization.
Furthermore, attempts by computer hackers to gain unauthorized
access to our systems or information could result in our
proprietary information being compromised or interrupt our
operations. While we attempt to prevent such unauthorized access
we may be unable to anticipate the methods used, or be unable to
prevent the release of our proprietary information.
Our
success depends, in part, on our ability to effect suitable
investments, alliances and acquisitions, and to integrate
companies we acquire.
Although we have invested in the past, and intend to continue to
invest, significant resources in internal research and
development activities, the complexity and rapidity of
technological changes and the significant expense of internal
research and development make it impractical for us to pursue
development of all technological solutions on our own. On an
ongoing basis, we review investment, alliance and acquisition
prospects that would complement our product offerings, augment
our market coverage or enhance our technological capabilities.
However, we cannot assure you that we will be able to identify
and consummate
23
suitable investment, alliance or acquisition transactions in the
future. Moreover, if we consummate such transactions, they could
result in:
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issuances of equity securities dilutive to our stockholders,
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large, one-time write-offs,
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the incurrence of substantial debt and assumption of unknown
liabilities,
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the potential loss of key employees from the acquired company,
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amortization expenses related to intangible assets, and
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the diversion of managements attention from other business
concerns.
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Moreover, integrating acquired organizations and their products
and services may be difficult, expensive, time-consuming and a
strain on our resources and our relationship with employees and
customers and ultimately may not be successful. Additionally, in
periods following an acquisition, we will be required to
evaluate goodwill and acquisition-related intangible assets for
impairment. When such assets are found to be impaired, they will
be written down to estimated fair value, with a charge against
earnings. For instance, we recorded a cumulative effect of a
change in accounting principle in fiscal 2003 in the amount of
$397.1 million as a result of the goodwill obtained in
connection with our formation through the merger of the wireless
business of Conexant Systems, Inc. and Alpha Industries, Inc. on
June 25, 2002.
Certain
provisions in our organizational documents and Delaware law may
make it difficult for someone to acquire control of
us.
We have certain anti-takeover measures that may affect our
common stock. Our certificate of incorporation, our by-laws and
the Delaware General Corporation Law contain several provisions
that would make more difficult an acquisition of control of us
in a transaction not approved by our Board of Directors. Our
certificate of incorporation and by-laws include provisions such
as:
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the division of our Board of Directors into three classes to be
elected on a staggered basis, one class each year,
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the ability of our Board of Directors to issue shares of
preferred stock in one or more series without further
authorization of stockholders,
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a prohibition on stockholder action by written consent,
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elimination of the right of stockholders to call a special
meeting of stockholders,
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a requirement that stockholders provide advance notice of any
stockholder nominations of directors or any proposal of new
business to be considered at any meeting of stockholders,
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a requirement that the affirmative vote of at least
662/3%
of our shares be obtained to amend or repeal any provision of
our by-laws or the provision of our certificate of incorporation
relating to amendments to our by-laws,
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a requirement that the affirmative vote of at least 80% of our
shares be obtained to amend or repeal the provisions of our
certificate of incorporation relating to the election and
removal of directors, the classified board or the right to act
by written consent,
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a requirement that the affirmative vote of at least 80% of our
shares be obtained for business combinations unless approved by
a majority of the members of the Board of Directors and, in the
event that the other party to the business combination is the
beneficial owner of 5% or more of our shares, a majority of the
members of Board of Directors in office prior to the time such
other party became the beneficial owner of 5% or more of our
shares,
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a fair price provision, and
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a requirement that the affirmative vote of at least 90% of our
shares be obtained to amend or repeal the fair price provision.
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In addition to the provisions in our certificate of
incorporation and by-laws, Section 203 of the Delaware
General Corporation Law generally provides that a corporation
shall not engage in any business combination with any interested
stockholder during the three-year period following the time that
such stockholder becomes an interested stockholder, unless a
majority of the directors then in office approves either the
business combination or the transaction that results in the
stockholder becoming an interested stockholder or specified
stockholder approval requirements are met.
Increasingly
stringent environmental laws, rules and regulations may require
us to redesign our existing products and processes, and could
adversely affect our ability to cost-effectively produce our
products.
The semiconductor and electronics industries have been subject
to increasing environmental regulations. A number of domestic
and foreign jurisdictions seek to restrict the use of various
substances, a number of which have been used in our products or
processes. For example, the European Union Restriction of
Hazardous Substances in Electrical and Electronic Equipment
(RoHS) Directive now requires that certain substances be removed
from all electronics components. Removing such substances
requires the expenditure of additional research and development
funds to seek alternative substances, as well as increased
testing by third parties to ensure the quality of our products
and compliance with the RoHS Directive. While we have
implemented a compliance program to ensure our product offering
meets these regulations, there may be instances where
alternative substances will not be available or commercially
feasible, or may only be available from a single source, or may
be significantly more expensive than their restricted
counterparts. Additionally, if we were found to be non-compliant
with any such rule or regulation, we could be subject to fines,
penalties
and/or
restrictions imposed by government agencies that could adversely
affect our operating results.
We may
be liable for penalties under environmental laws, rules and
regulations, which could adversely impact our
business.
We have used, and will continue to use, a variety of chemicals
and compounds in manufacturing operations and have been and will
continue to be subject to a wide range of environmental
protection regulations in the United States and in foreign
countries. We cannot assure you that current or future
regulation of the materials necessary for our products would not
have a material adverse effect on our business, financial
condition and results of operations. Environmental regulations
often require parties to fund remedial action for violations of
such regulations regardless of fault. Consequently, it is often
difficult to estimate the future impact of environmental
matters, including potential liabilities. Furthermore, our
customers increasingly require warranties or indemnity relating
to compliance with environmental regulations. We cannot assure
you that the amount of expense and capital expenditures that
might be required to satisfy environmental liabilities, to
complete remedial actions and to continue to comply with
applicable environmental laws will not have a material adverse
effect on our business, financial condition and results of
operations.
25
USE OF
PROCEEDS
We are filing the registration statement of which this
prospectus is a part to permit the holders of the notes and
shares of our common stock issuable upon conversion of the notes
described under Selling Security Holders in the
applicable prospectus supplement, to resell such securities. We
will not receive any of the proceeds from the resale of such
securities from time to time by such holders.
DIVIDEND
POLICY
We have never declared or paid any cash dividends on our capital
stock. We currently intend to retain all of our future earnings,
if any, to finance our operations and do not anticipate paying
any cash dividends on our capital stock in the foreseeable
future.
RATIO OF
EARNINGS TO FIXED CHARGES
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Fiscal Year Ended
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Three Months Ended
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September 27,
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October 3,
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October 1,
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September 30,
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September 29,
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December 30,
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December 29,
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2002(1)
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2003(2)
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2004
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2005
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2006(3)
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2005
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2006
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Ratio of earnings before taxes and
fixed charges, to fixed charges
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2.2
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3.3
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2.5
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4.5
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(1) |
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As a result of the loss incurred in the fiscal year ended
September 27, 2002, we were unable to fully cover fixed
charges. The amount of such deficiency during this period was
approximately $256 million. |
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As a result of losses incurred in the fiscal year ended
October 3, 2003, we were unable to fully cover fixed
charges. The amount of such deficiency during this period was
approximately $54 million. |
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As a result of losses incurred in the fiscal year ended
September 29, 2006, we were unable to fully cover fixed
charges. The amount of such deficiency during this period was
approximately $73 million. |
26
SELLING
SECURITY HOLDERS
On March 2, 2007, we issued and sold a total of
$200,000,000 aggregate principal amount of the notes in a
private placement to Credit Suisse Securities (USA) LLC, which
we refer to in this prospectus as the initial purchaser. The
initial purchaser has advised us that it resold the notes, in
transactions exempt from the registration requirements of the
Securities Act of 1933, to qualified institutional
buyers, as defined in Rule 144A under the Securities
Act of 1933, in compliance with Rule 144A. The selling
security holders, which term includes their transferees,
pledgees, donees and successors, may from time to time offer and
sell pursuant to this prospectus any and all of the notes and
the shares of our common stock issuable upon conversion of the
notes.
The notes and our shares of common stock to be issued upon
conversion of the notes are being registered pursuant to a
registration rights agreement between the initial purchaser and
us. In that agreement, we undertook to file a registration
statement with regard to the notes and our shares of common
stock issuable upon conversion of the notes and, subject to
certain exceptions, to keep that registration statement
effective for up to two years. The registration statement of
which this prospectus is a part is intended to satisfy our
obligations under that agreement.
Before a security holder may use this prospectus in connection
with an offering of securities, this prospectus will be
supplemented. The prospectus supplement will set forth the name
of each selling security holder and the number and type of our
securities beneficially owned by such selling security holder
that are covered by such prospectus supplement. The prospectus
supplement will also disclose whether any selling security
holder has held any position or office with, has been employed
by or otherwise has had a material relationship with us during
the three years prior to the date of the prospectus supplement.
Alternatively, we may include that information in a report filed
with the SEC pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act and incorporate it by reference
into this prospectus.
27
DESCRIPTION
OF CAPITAL STOCK
General
We have 550,000,000 authorized shares of capital stock,
consisting of 525,000,000 shares of common stock,
$0.25 par value per share, and 25,000,000 shares of
preferred stock, no par value per share. As of March 7,
2007, we had 159,574,388 shares of common stock outstanding
and no shares of preferred stock outstanding. The authorized
shares of common stock and preferred stock are available for
issuance without further action by our stockholders, unless such
action is required by applicable law or the rules of any stock
exchange system on which our securities may be listed or traded.
If the approval of our stockholders is not so required, our
board of directors may determine not to seek stockholder
approval.
The following is a summary of certain provisions of Delaware
law, our Amended and Restated Certificate of Incorporation, as
amended, and our Second Amended and Restated By-laws. This
summary does not purport to be complete and is qualified in its
entirety by reference to the corporate law of Delaware and our
certificate of incorporation and our by-laws.
Certain of the provisions described below under
Certain Provisions in our Certificate of
Incorporation and By-laws could have the effect of
discouraging transactions that might lead to a change in control
of us. For example, our certificate of incorporation and bylaws:
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establish a classified board of directors;
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permit our board of directors to issue shares of preferred stock
in one or more series without further authorization of our
stockholders;
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prohibit stockholder action by written consent;
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require stockholders to provide advance notice of any
stockholder nominations of directors or any proposal of new
business to be considered at any meeting of stockholders;
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require a supermajority vote to amend or repeal certain
provisions of our certificate of incorporation or by-laws;
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preclude stockholders from calling a special meeting of
stockholders;
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require a supermajority vote for business combinations not
approved by a majority of the members of our board of directors
in office prior to the time the other party to the business
combination became the beneficial owner of 5% or more of our
shares; and
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contain a fair price provision.
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Common
Stock
Holders of our common stock are entitled to such dividends as
may be declared by our board of directors out of funds legally
available for such purpose. Dividends may not be paid on common
stock unless all accrued dividends on preferred stock, if any,
have been paid or declared and set aside. In the event of our
liquidation, dissolution or winding up, the holders of our
common stock will be entitled to share pro rata in the assets
remaining after payment to creditors and after payment of the
liquidation preference plus any unpaid dividends to holders of
any outstanding preferred stock.
Each holder of our common stock is entitled to one vote for each
such share outstanding in the holders name. No holder of
common stock is entitled to cumulate votes in voting for
directors. Our certificate of incorporation provides that,
unless otherwise determined by our board of directors, no holder
of common stock will have any preemptive right to purchase or
subscribe for any stock of any class which we may issue or sell.
Our common stock is listed on the Nasdaq Global Select Market
under the symbol SWKS. American Stock
Transfer & Trust Company is the transfer agent and
registrar for our common stock. Its address is 59 Maiden
Lane, New York, NY 10038, and its telephone number is
(800) 937-5449.
Preferred
Stock
Our certificate of incorporation permits us to issue up to
25,000,000 shares of preferred stock in one or more series
and with rights and preferences that may be fixed or designated
by our board of directors without
28
any further action by our stockholders. The designation, powers,
preferences, rights and qualifications, limitations and
restrictions of the preferred stock of each series will be fixed
by the certificate of designation relating to such series, which
will specify the terms of the preferred stock, including:
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the designation of the series;
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the number of shares of the series, which number our board of
directors may increase or decrease;
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whether dividends, if any, will be cumulative or noncumulative
and the dividend rate of the series;
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the dates at which dividends, if any, will be payable;
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the redemption rights and price or prices, if any, for shares of
the series;
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the terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;
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the amounts payable on shares of the series in the event of our
liquidation, dissolution or winding up;
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whether the shares of the series will be convertible into shares
of our common stock or any security of ours, and, if so, the
terms and conditions upon which the conversion may be made;
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restrictions on the issuance of shares of the same series or of
any other class or series; and
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the voting rights, if any, of the holders of shares of the
series.
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Our board of directors could issue a series of preferred stock
that could, depending on the terms of such series, impede the
completion of a merger, tender offer or other takeover attempt.
Certain
Provisions in Our Certificate of Incorporation and
By-Laws
Our certificate of incorporation and by-laws contain various
provisions intended to:
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promote the stability of our stockholder base; and
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render more difficult certain unsolicited or hostile attempts to
take us over, which could disrupt us, divert the attention of
our directors, officers and employees and adversely affect the
independence and integrity of our business.
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Pursuant to our certificate of incorporation, the number of
directors is fixed by our board of directors. Our directors are
divided into three classes, each class to consist as nearly as
possible of one third of the directors. Pursuant to our by-laws,
directors elected by stockholders at an annual meeting of
stockholders will be elected by a plurality of all votes cast.
At each of our annual meetings, the term of office of one class
of directors expires. The term of the successors of each such
class of directors expires three years from the year of election.
Our certificate of incorporation contains a fair price provision
pursuant to which a business combination (including, among other
things, a merger or consolidation) between us or our
subsidiaries and a related person, as defined in our certificate
of incorporation, requires approval by the affirmative vote of
the holders of at least 90% of the then outstanding shares of
our capital stock entitled to vote generally in the election of
directors, voting together as a single class, unless the
business combination is approved by a majority of the continuing
directors and certain fair price criteria and procedural
requirements specified in the fair price provision are met. If
the business combination does not involve any cash or other
property being received by any of the our stockholders, then the
fair price criteria would not apply, and only approval by a
majority of the continuing directors would be required.
Under the fair price provision, the fair price criteria that
must be satisfied to avoid the 90% stockholder voting
requirement include the requirement that the consideration paid
to our stockholders in a business combination must be either
cash or the same form of consideration used by the related
person in acquiring its beneficial ownership of the largest
number of shares of our capital stock acquired by the related
person. The related person would be required to meet the fair
price criteria with respect to each class of our capital stock
entitled to vote generally in the election of directors, whether
or not the related person beneficially owned shares of that
class prior to proposing the business combination.
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Under the fair price provision, even if the foregoing fair price
criteria are met, the following procedural requirements must be
met if the business combination is not to require approval by
the holders of at least 90% of the then outstanding shares of
capital stock entitled to vote generally in the election of
directors, voting together as a single class:
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after the related person had become a related person and before
the consummation of such business combination, (1) we must
not have failed to declare and pay full quarterly dividends on
any outstanding preferred stock, reduced the annual rate of
dividends paid on our common stock or failed to increase such
annual rate of dividends as necessary to reflect any
reclassification, recapitalization, reorganization or any
similar transaction which has the effect of reducing the number
of outstanding shares of our common stock, unless such failure,
reduction or reclassification was approved by a majority of the
continuing directors and (2) the related person must not
have acquired any newly issued shares of our capital stock
entitled to vote generally in the election of directors,
directly or indirectly, from us, except as part of the
transaction which results in such related person becoming a
related person;
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the related person must not have received, directly or
indirectly (other than proportionately as a stockholder), at any
time after becoming a related person, the benefit of any loans,
advances, guarantees, pledges or other financial assistance or
any tax advantages provided by us; and
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a proxy or information statement describing the proposed
business combination and complying with the requirements of the
Exchange Act must have been mailed to all our stockholders at
least 30 days prior to the consummation of the business
combination and such proxy or information statement must have
contained a recommendation as to the advisability or
inadvisability of the business combination which any of the
continuing directors may have furnished in writing to the board
of directors.
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Our certificate of incorporation requires the affirmative vote
of the holders of at least 80% of the shares of all classes of
stock entitled to vote for the election of directors, voting
together as a single class, to approve a business combination
(including, among other things, a merger, consolidation or sale
of all or substantially all of our assets) that has not been
approved by a majority of the members of our board of directors
in office prior to the time the other party to the business
combination became the beneficial owner of 5% or more of our
shares entitled to vote for the election of directors.
Our by-laws provide that a special meeting of stockholders may
be called only by a resolution adopted by a majority of the
entire board of directors. Stockholders are not permitted to
call, or to require that the board of directors call, a special
meeting of stockholders. Moreover, the business permitted to be
conducted at any special meeting of stockholders is limited to
the business brought before the meeting pursuant to the notice
of the meeting given by us. In addition, our certificate of
incorporation provides that any action taken by our stockholders
must be effected at an annual or special meeting of stockholders
and may not be taken by written consent instead of a meeting.
Our by-laws establish an advance notice procedure for
stockholders to nominate candidates for election as directors or
to bring other business before meetings of our stockholders.
Our certificate of incorporation requires the affirmative vote
of the holders of at least
662/3%
of the shares of all classes of stock entitled to vote for the
election of directors, voting together as a single class, to:
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amend or repeal any provision of our by-laws;
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amend or repeal the provision of our certificate of
incorporation relating to amendments to our by-laws; or
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adopt any provision inconsistent with such provisions.
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Our certificate of incorporation requires the affirmative vote
of the holders of at least 80% of the shares of all classes of
stock entitled to vote for the election of directors, voting
together as a single class, to:
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amend or repeal the provisions of our certificate of
incorporation relating to the election of directors, the
classified board or the right to act by written consent; or
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adopt any provision inconsistent with such provisions.
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Our certificate of incorporation requires the affirmative vote
of the holders of at least 90% of the shares of all classes of
stock entitled to vote for the election of directors, voting
together as a single class, to:
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amend or repeal the fair price provision of our certificate of
incorporation; or
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adopt any provision inconsistent with such provision.
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Under the business combination provision discussed above, our
certificate of incorporation requires the affirmative vote of
the holders of at least 80% of the shares of all classes of
stock entitled to vote for the election of directors, voting
together as a single class, to amend, revise or revoke the
business combination provision.
Business
Combination Provisions
We are subject to a Delaware statute regulating business
combinations, defined to include a broad range of
transactions, between Delaware corporations and interested
stockholders, defined as persons who have acquired at
least 15% of a corporations stock. Under such statute, a
corporation may not engage in any business combination with any
interested stockholder for a period of three years after the
date such person became an interested stockholder unless certain
conditions are satisfied. The statute contains provisions
enabling a corporation to avoid the statutes restrictions.
We have not sought to elect out of the statute, and
therefore, the restrictions imposed by such statute will apply
to us.
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DESCRIPTION
OF OTHER INDEBTEDNESS
As of December 29, 2006, we had approximately
$179.3 million in principal amount of
4.75% convertible subordinated notes due November 2007, or
2007 notes, outstanding. These 2007 notes can be converted into
110.4911 shares of our common stock per $1,000 principal
balance, which is the equivalent of a conversion price of
approximately $9.05 per share. We may redeem the 2007 notes
at any time. The current redemption price of the notes is
$1,000 per $1,000 principal amount of notes to be redeemed,
plus accrued and unpaid interest, if any, to the redemption
date. Holders of the 2007 notes may require us to repurchase the
2007 notes upon a change in control of us. We pay interest in
cash semi-annually in arrears on May 15 and November 15 of each
year.
On July 15, 2003, we entered into a receivables purchase
agreement under which we have agreed to sell from time to time
certain of our accounts receivable to Skyworks USA, Inc., or
Skyworks USA, a wholly-owned special purpose entity of us that
is fully consolidated for accounting purposes. At the same time,
Skyworks USA entered into an agreement with Wachovia Bank, N.A.
providing for a $50.0 million credit facility secured by
the purchased accounts receivable. As a part of the
consolidation, any interest incurred by Skyworks USA related to
monies it borrows under the credit facility is recorded as
interest expense in our results of operations. We perform
collections and administrative functions on behalf of Skyworks
USA. Interest related to the credit facility accrues at the
London Interbank Offered Rate, or LIBOR, plus 0.4% per annum. As
of December 29, 2006, there was $50.0 million
outstanding under this credit facility.
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DESCRIPTION
OF THE NOTES
We issued the
11/4%
convertible subordinated notes due 2010, or the 2010 notes, and
the
11/2%
convertible subordinated notes due 2012, or the 2012 notes,
under an indenture dated as of March 2, 2007 between us and
U.S. Bank National Association, as trustee. We refer
to the 2010 notes and the 2012 notes together as the notes. The
notes and any common stock issuable upon conversion of the notes
are subject to a registration rights agreement.
The following description is only a summary of the material
provisions of the notes, the indenture and the registration
rights agreement. It does not purport to be complete. We urge
you to read these documents in their entirety because they, and
not this description, define the rights of holders of the notes.
You may request copies of these documents from us upon written
request at our address, which is listed in this prospectus under
Where You Can Find More Information and Incorporation by
Reference.
For purposes of this Description of the Notes section,
references to we, us, our
and Skyworks refer solely to Skyworks Solutions,
Inc., and not to its subsidiaries.
General
The
Notes
The 2010 notes:
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are initially limited to $100,000,000 aggregate principal amount;
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mature on March 1, 2010 unless earlier converted by holders
or repurchased by us at the option of holders; and
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bear interest at a rate of
11/4% per
annum on the principal amount, payable semi-annually in arrears
on each March 1 and September 1, beginning on
September 1, 2007 to the holders of record at the close of
business on the preceding February 15 and August 15,
respectively.
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The 2012 notes:
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are initially limited to $100,000,000 aggregate principal amount;
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mature on March 1, 2012 unless earlier converted by holders
or repurchased by us at the option of holders; and
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bear interest at a rate of
11/2% per
annum on the principal amount, payable semi-annually in arrears
on each March 1 and September 1, beginning on
September 1, 2007 to the holders of record at the close of
business on the preceding February 15 and August 15,
respectively.
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The notes:
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are our unsecured subordinated obligations;
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are subordinated in right of payment to all of our existing and
future senior indebtedness (as defined below);
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bear additional interest if we fail to comply with certain
obligations set forth under Registration
Rights;
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are convertible into cash, shares of our common stock or a
combination of cash and shares of our common stock, at our
option;
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are subject to repurchase by us, in whole or in part, for cash
at the option of holders upon the occurrence of a
fundamental change, which is defined under
Repurchase of Notes at the Option of Holders
Upon a Fundamental Change, at a price equal to 100%
of the principal amount of the notes being repurchased, plus
accrued and unpaid interest, including additional interest, if
any, to, but
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not including, the repurchase date as described under
Repurchase of Notes at the Option of Holders
Upon a Fundamental Change; and
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are represented by registered securities in global form as
described under Book-Entry Delivery and
Form.
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The indenture governing the notes does not contain any financial
covenants and does not restrict us or our subsidiaries from
paying dividends, incurring additional senior indebtedness or
any other indebtedness or issuing or repurchasing securities.
The indenture contains no covenants or other provisions to
afford protection to holders of the notes in the event of highly
leveraged transactions or a fundamental change of Skyworks,
except to the extent described under
Repurchase of Notes at the Option of Holders
Upon a Fundamental Change and
Consolidation, Merger and Sale of Assets.
The notes are our subordinated unsecured obligations and are
subordinated in right of payment to all of our existing and
future senior indebtedness. The notes rank equal in right of
payment with our 4.75% convertible subordinated notes due
November 2007. In addition, the notes are structurally
subordinated in right of payment to all indebtedness and
liabilities of our subsidiaries, including trade credit. As of
December 29, 2006, we had no indebtedness outstanding that
would constitute senior indebtedness.
No sinking fund is provided for the notes. We may at any time
and from time to time purchase notes in the open market or
otherwise.
We will continue to maintain an office where the notes may be
presented for registration, transfer, exchange or conversion.
This office is initially an office of the trustee. Except under
limited circumstances described below, the notes were issued
only in fully registered book-entry form, without coupons, in
denominations of $1,000 principal amount and multiples thereof,
and are represented by global securities. We may pay interest by
check mailed to each holder at its address as it appears in the
notes register; provided, however, that holders
with notes in an aggregate principal amount in excess of
$2.0 million will be paid, at their written election, by
wire transfer of immediately available funds; provided
further, however, that payments to The Depository
Trust Company, New York, New York, which we refer to as
DTC, will be made by wire transfer of immediately
available funds to the account of DTC or its nominee. There will
be no service charge for any registration of transfer or
exchange of notes. We may, however, require holders to pay a sum
sufficient to cover any tax or other governmental charge payable
in connection with certain transfers or exchanges.
Holders may not sell or otherwise transfer the notes or any
common stock issuable upon conversion of the notes except in
compliance with the provisions set forth under
Registration Rights. In addition,
neither we nor the registrar nor the trustee is required to
register a transfer or exchange of any notes for which the
holder has delivered, and not validly withdrawn, a fundamental
change repurchase notice, except with respect to that portion of
the notes not being repurchased.
The material U.S. federal income tax consequences of the
purchase, ownership and disposition of the notes and any cash or
shares of our common stock received upon conversion of the notes
are summarized in this prospectus under the heading
Certain United States Federal Income Tax
Considerations.
Principal,
Maturity
The indenture provides for the issuance by us of 2010 notes in
an amount initially limited to $100,000,000 aggregate principal
amount and 2012 notes in an amount initially limited to
$100,000,000 aggregate principal amount. We may, without consent
of the holders, issue additional 2010 notes or 2012 notes under
the indenture with the same terms as the 2010 notes or the 2012
notes, respectively, in an unlimited aggregate principal amount.
The 2010 notes and the 2012 notes were issued as two separate
classes, but, except as otherwise provided below, will be
treated as a single class for all purposes of the indenture. The
2010 notes and any additional 2010 notes issued under the
indenture will be treated as a single class for all purposes
under the indenture, including, without limitation, waivers,
amendments and offers to purchase and may have the same CUSIP
number. The 2012 notes and any additional 2012 notes issued
under the indenture will be treated as a single class for all
purposes under the indenture, including, without limitation,
waivers,
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amendments and offers to purchase and may have the same CUSIP
number. If any additional notes are issued at a price that
causes them to have original issue discount within
the meaning of Section 1273 of the United States Internal
Revenue Code of 1986, as amended, they will not have the same
CUSIP number. The 2010 notes and any additional 2010 notes
mature on March 1, 2010, and the 2012 notes and any
additional 2012 notes mature on March 1, 2012.
Interest
The 2010 notes bear interest at a rate of
11/4% per
annum on the principal amount from March 2, 2007, and the
2012 notes bear interest at a rate of
11/2% per
annum on the principal amount from March 2, 2007. We will
pay interest semi-annually in arrears on each March 1 and
September 1, beginning on September 1, 2007, subject
to limited exceptions if the notes are converted prior to the
relevant interest payment date. Subject to certain exceptions,
interest will be paid to the holders of record at the close of
business on February 15 and August 15, as the case may be,
immediately preceding the relevant interest payment date.
Interest on the notes accrues from the most recent date to which
interest has been paid or, if no interest has been paid, from
March 2, 2007. Interest is computed on the basis of a
360-day year
comprised of twelve
30-day
months.
Interest will cease to accrue on a note upon its maturity,
conversion or repurchase by us at the option of a holder.
Conversion
of Notes
General
Prior to maturity, a holder may surrender some or all of its
notes for conversion. Notes are convertible into cash, shares of
our common stock or a combination of cash and shares of our
common stock, at our option. Holders may only convert notes with
a principal amount of $1,000 or an integral multiple of $1,000.
The conversion rate with respect to a 2010 note is initially
105.0696 shares of our common stock per $1,000 principal
amount, and the conversion rate with respect to a 2012 note is
initially 105.0696 shares of our common stock per $1,000
principal amount. The conversion price of a note is equal to
$1,000 divided by the applicable conversion rate at the time of
determination. The conversion rate is subject to adjustment as
described under Conversion Rate
Adjustments and, with respect to conversions occurring in
connection with a fundamental change, as described under
Increase of Conversion Rate Upon Certain
Fundamental Changes. Accordingly, an adjustment to the
conversion rate will result in a corresponding adjustment to the
conversion price. The initial conversion price for the 2010
notes is approximately $9.52 per share, and the initial
conversion price for the 2012 notes is approximately
$9.52 per share.
If a holder exercises its right to require us to repurchase its
notes as described under Repurchase of Notes
at the Option of Holders Upon a Fundamental Change, such
holder may convert its notes only if it withdraws its applicable
repurchase notice in accordance with the indenture or if we
default in the payment of the repurchase price.
Settlement
Upon Conversion
Conversion on or prior to the Final Notice
Date. If we receive any notice of conversion on
or prior to the 23rd scheduled trading day prior to
maturity (the final notice date) of the applicable
notes, the following procedures will apply:
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If we elect to satisfy all or any portion of our obligation to
convert notes presented for conversion (the conversion
obligation) in cash, other than cash in lieu of any
fractional shares, we will notify the presenting holders through
the trustee of the dollar amount to be satisfied in cash, which
must be expressed either as 100% of the conversion obligation or
as a fixed dollar amount at any time on or before the date that
is two trading days following the conversion date (as defined
below) (the cash settlement notice period).
Settlement, in cash or in cash and shares, will occur on the
trading day following the final day of the cash settlement
averaging period. The cash settlement averaging
period
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35
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means the 20 consecutive trading day period beginning on the
first scheduled trading day after the final day of the cash
settlement notice period.
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If we do not elect to satisfy any part of the conversion
obligation in cash, other than cash in lieu of any fractional
shares, delivery of the shares of our common stock into which
the notes are converted and cash in lieu of any fractional
shares will occur through the conversion agent or DTC, as the
case may be, as described below as soon as practicable on or
after the conversion date.
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Settlement amounts will be computed as follows:
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If we elect to satisfy the entire conversion obligation in
shares, we will deliver to holders a number of shares equal to
(i) the aggregate principal amount of notes to be converted
divided by $1,000 multiplied by (ii) the applicable
conversion rate. In addition, we will pay cash for any
fractional share of our common stock based on the closing sale
price of our common stock on the trading day immediately
preceding the conversion date.
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If we elect to satisfy the entire conversion obligation in cash,
we will deliver to holders that have delivered the notice of
conversion giving rise to the conversion obligation cash in an
amount equal to the product of:
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the aggregate principal amount of notes to be converted divided
by $1,000;
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the applicable conversion rate; and
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an amount (the applicable stock price) equal to the
arithmetic average of the volume-weighted average price of our
common stock for each of the 20 consecutive trading days in the
cash settlement averaging period.
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If we elect to satisfy a fixed portion, other than 100%, of the
conversion obligation in cash, we will deliver to holders, for
each $1,000 principal amount of notes surrendered for conversion:
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cash in any amount we specify (the specified cash
amount); and
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a number of shares of our common stock equal to the greater of
(i) zero and (ii) the excess, if any, of the number of
shares calculated as if we elected to satisfy the entire
conversion obligation in shares over the number of shares equal
to the sum of the quotients, calculated for each of the 20
consecutive trading days of the cash settlement averaging
period, of (x) the specified cash amount divided by the
number of trading days in the cash settlement averaging period
divided by (y) the volume-weighted average price of our
common stock on such day. In addition, we will pay cash for all
fractional shares of common stock in an amount based on the
average daily closing sale price of our common stock during the
cash settlement averaging period.
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If we irrevocably elect to satisfy our conversion obligation for
the remaining term of the notes in cash, as described below
under Conversion after Irrevocable Settlement
Election, we will deliver to holders, for each $1,000
principal amount of notes surrendered for conversion:
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cash in an amount equal to the lesser of (i) $1,000 and
(ii) the conversion value (the required cash
amount); and
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if the conversion value is greater than $1,000, a number of
shares of our common stock (the remaining shares)
equal to the sum of the daily share amounts for each of the 20
consecutive trading days in the cash settlement averaging
period, subject to our right to deliver cash in lieu of all or a
portion of such remaining shares as described below under
Conversion after Irrevocable Settlement
Election. In addition, we will pay cash for all fractional
shares of common stock in an amount based on the average daily
closing sale price of our common stock during the cash
settlement averaging period.
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The closing sale price of our common stock on any
date means the closing per share sale price, or if no sale price
is reported, the average of the bid and ask prices or, if more
than one in either case, the average of the average bid and the
average ask prices, on that date as reported in composite
transactions on the Nasdaq Global Select Market, or Nasdaq, or
on the principal United States securities exchange on which our
common
36
stock is traded or, if our common stock is not listed on a
United States national or regional securities exchange, as
available in any
over-the-counter
market or, if not available in any over-the counter market, the
sale price will be determined in good faith by our board of
directors.
The conversion value means the average of the
products for each trading day of the cash settlement averaging
period of (i) the applicable conversion rate for such day
multiplied by (ii) the volume-weighted average price per
share of our common stock on such day.
The daily share amount means, for each trading day
of the cash settlement averaging period and each $1,000
principal amount of notes surrendered for conversion, a number
of shares, but in no event less than zero, determined by the
following formula:
(volume-weighted average price per share for such trading day
× conversion rate in effect on such trading day) −
$1,000
volume-weighted average price per share for such trading day
× 20
The volume-weighted average price per share of our
common stock on any trading day means such price as displayed on
Bloomberg, or any successor service, page SWKS
<EQUITY> <GO> in respect of the period from
9:30 a.m. to 4:00 p.m., New York City time, on such
trading day; or, if such price is not available, the
volume-weighted average price means the market value per share
of our common stock on such day as determined by a nationally
recognized investment banking firm retained for this purpose by
us.
Conversion after the Final Notice Date. If we
receive any notice of conversion after the final notice date and
prior to maturity, the following procedures will apply:
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If we elect to satisfy all or any portion of the conversion
obligation in cash, other than cash in lieu of any fractional
shares, on or before the final notice date we will send a single
notice to holders indicating the dollar amount to be satisfied
in cash, which must be expressed either as 100% of the
conversion obligation or as a fixed dollar amount. We will not
send individual notices of such election.
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If we do not elect to satisfy any part of the conversion
obligation in cash, other than cash in lieu of any fractional
shares, delivery of shares of our common stock into which the
notes are converted and cash in lieu of any fractional shares
will occur through the conversion agent or DTC, as the case may
be, as described below as soon as practicable on or after the
conversion date.
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Settlement amounts will be computed and settlement dates will be
determined in the same manner as set forth above under
Conversion on or prior to the Final Notice
Date, except that the cash settlement averaging
period shall be the 20 trading day period beginning on the
final notice date.
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Conversion after Irrevocable Settlement
Election. At any time prior to maturity, we may
irrevocably elect, with respect to the 2010 notes, the 2012
notes or both the 2010 notes and the 2012 notes, in our sole
discretion to satisfy our conversion obligation for the
remaining term of the applicable notes either (i) in cash
for the lesser of 100% of the principal amount of the notes
converted and the conversion value of the notes converted, with
any remaining amount to be satisfied in cash, shares of our
common stock or a combination of cash and shares of our common
stock, at our option, or (ii) only in shares of our common
stock. After making an election to pay up to the principal
amount of the 2010 notes, the 2012 notes or all the notes in
cash, we still may satisfy our conversion obligation, to the
extent our conversion obligation exceeds the principal amount of
the applicable notes converted, at our option, in cash, shares
of our common stock or a combination of cash and shares of our
common stock. If we choose to satisfy all or a portion of the
remainder of our conversion obligation in cash, we will provide
notice of our election in the same manner as set forth above
under either Conversion on or prior to the
Final Notice Date or Conversion after
the Final Notice Date, as applicable. If we choose to
satisfy all of the remainder of our conversion obligation in
shares of our common stock, notice of our election to deliver
such common stock will be deemed to have been provided on the
last date of the cash settlement notice period. Settlement
amounts will be computed and settlement dates will be determined
in the same manner as set forth above under
Conversion on or prior to the Final Notice
Date and Conversion after the Final
Notice Date, as applicable.
We may not have the financial resources, and we may not be able
to arrange for financing, to pay the cash required to satisfy
our conversion obligations. See Risk Factors
Risks Relating to This Offering
37
We may not be able to repurchase the notes upon a fundamental
change or pay a holder of notes cash upon conversion of its
notes.
We will make adjustments to the applicable stock price in
accordance with the indenture to account for the occurrence of
certain events during the cash settlement averaging period.
Exchange
in Lieu of Conversion
When a holder surrenders notes for conversion, we may direct the
conversion agent to surrender, on or prior to the date of
determination of the applicable stock price, such holders
notes to a financial institution designated by us for exchange
in lieu of conversion. In order to accept any notes surrendered
for conversion, an applicable designated institution must agree
to deliver, in exchange for such holders notes, the amount
of cash or shares of common stock that we would be obligated to
deliver with respect to such notes, as described under
Settlement Upon Conversion.
If a designated financial institution accepts any such notes, it
will deliver the appropriate amount of cash or a combination of
cash and shares of common stock, as applicable, to the
conversion agent and the conversion agent will deliver such cash
or combination of cash and shares, as applicable, to the
applicable holder. Any notes exchanged by a designated financial
institution will remain outstanding. If a designated financial
institution agrees to accept any notes for exchange but does not
timely deliver the related consideration, we will, as promptly
as practical thereafter, but not later than the third business
day following determination of the applicable stock price,
convert those notes into cash and shares of our common stock, if
any, as described under Settlement Upon
Conversion.
Our designation of an institution to which the notes may be
submitted for exchange does not require the institution to
accept any notes. If a designated financial institution declines
to accept any notes surrendered for exchange, we will convert
those notes into cash or a combination of cash and shares of our
common stock, at our option, as described under
Settlement Upon Conversion. We have
initially designated Credit Suisse Securities (USA) LLC to act
as a designated financial institution.
Increase
of Conversion Rate Upon Certain Fundamental
Changes
If, in connection with a fundamental change, a holder surrenders
notes for conversion at any time beginning on the effective
notice date (as defined below) and until the second trading day
preceding the related fundamental change repurchase date, we
will increase the conversion rate by a number of shares (the
additional shares) as described below. The increase
in the conversion rate will be expressed as a number of
additional shares per $1,000 principal amount of notes and is
based on the date on which the fundamental change becomes
effective (the effective date) and the price (the
stock price) paid, or deemed to be paid, per share
of our common stock in the transaction constituting the
fundamental change, subject to adjustment as described under
Conversion Rate Adjustments. If holders
of our common stock receive only cash in the fundamental change,
the stock price shall be the cash amount paid per share. In all
other cases, the stock price will be the average of the closing
sale stock prices of our common stock for the five consecutive
trading days beginning on the second trading day after the date
(the effective notice date) we give notice of such
fundamental change to all record holders of the notes, which
shall be within 30 trading days after the effective date of the
fundamental change.
The stock prices set forth in the first column of each table
below will be adjusted as of any date on which the conversion
rate of the applicable notes is adjusted, as described under
Conversion Rate Adjustments. The
adjusted stock prices will equal the stock prices applicable
immediately prior to such adjustment, multiplied by a fraction,
the numerator of which is the conversion rate immediately prior
to the adjustment giving rise to the stock price adjustment and
the denominator of which is the conversion rate as so adjusted.
The number of additional shares will be adjusted in the same
manner as the conversion rate as set forth under
Conversion Rate Adjustments.
38
The following table sets forth the stock price, effective date
and the increase in the conversion rate, expressed as a number
of additional shares of our common stock to be received per
$1,000 principal amount of 2010 notes, upon a conversion in
connection with a fundamental change.
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Fundamental Change Effective Date
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March 2,
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March 1,
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March 1,
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March 1,
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Stock Price
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2007
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2008
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2009
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2010
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$7.05
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36.77
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36.77
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36.77
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36.77
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$8.00
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27.71
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26.52
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24.01
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19.94
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$9.00
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20.98
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19.26
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15.93
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6.15
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$10.00
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16.17
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14.20
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10.60
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0.00
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$11.00
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12.65
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10.62
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7.09
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0.00
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$12.00
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10.03
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8.05
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4.77
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0.00
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$13.00
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8.05
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6.18
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3.24
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0.00
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$14.00
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6.54
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4.80
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2.22
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0.00
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$15.00
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5.36
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3.77
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1.55
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0.00
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$16.00
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4.44
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2.99
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1.09
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0.00
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$17.00
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3.70
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2.40
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0.79
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0.00
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$18.00
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3.11
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1.95
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0.58
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0.00
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$19.00
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2.63
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1.59
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0.44
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0.00
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$20.00
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2.24
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1.32
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0.34
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0.00
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$30.00
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0.58
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0.28
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0.07
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0.00
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$40.00
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0.17
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0.08
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0.01
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0.00
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The exact stock price and effective date may not be set forth on
the table, in which case:
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if the stock price is between two stock prices on the table or
the effective date is between two effective dates on the table,
the number of additional shares will be determined by a
straight-line interpolation between the number of additional
shares set forth for the higher and lower share price amounts
and the two dates based on a
365-day
year, as applicable;
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if the stock price is in excess of $40.00 per share,
subject to adjustment in the same manner as the stock price, no
increase in the conversion rate will be made; and
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if the stock price is less than $7.05 per share, subject to
adjustment in the same manner as the stock price, no increase in
the conversion rate will be made.
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39
The following table sets forth the stock price, effective date
and the increase in the conversion rate, expressed as a number
of additional shares of our common stock to be received per
$1,000 principal amount of 2012 notes, upon a conversion in
connection with a fundamental change.
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Fundamental Change Effective Date
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March 2,
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March 1,
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March 1,
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March 1,
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March 1,
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March 1,
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Stock Price
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2007
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2008
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2009
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|
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2010
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2011
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2012
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|
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|
$7.05
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36.77
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|
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36.77
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|
|
|
36.77
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|
|
|
36.77
|
|
|
|
36.77
|
|
|
|
36.77
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|
|
$8.00
|
|
|
|
28.94
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|
|
|
28.81
|
|
|
|
28.16
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|
|
|
26.79
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|
|
|
24.14
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|
|
|
19.89
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|
|
$9.00
|
|
|
|
22.97
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|
|
|
22.48
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|
|
|
21.42
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|
|
|
19.54
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|
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16.07
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|
|
|
6.19
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|
|
$10.00
|
|
|
|
18.58
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|
|
|
17.87
|
|
|
|
16.60
|
|
|
|
14.48
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|
|
|
10.75
|
|
|
|
0.00
|
|
|
$11.00
|
|
|
|
15.26
|
|
|
|
14.43
|
|
|
|
13.06
|
|
|
|
10.89
|
|
|
|
7.23
|
|
|
|
0.00
|
|
|
$12.00
|
|
|
|
12.70
|
|
|
|
11.82
|
|
|
|
10.43
|
|
|
|
8.31
|
|
|
|
4.90
|
|
|
|
0.00
|
|
|
$13.00
|
|
|
|
10.69
|
|
|
|
9.79
|
|
|
|
8.43
|
|
|
|
6.43
|
|
|
|
3.36
|
|
|
|
0.00
|
|
|
$14.00
|
|
|
|
9.08
|
|
|
|
8.20
|
|
|
|
6.90
|
|
|
|
5.04
|
|
|
|
2.33
|
|
|
|
0.00
|
|
|
$15.00
|
|
|
|
7.79
|
|
|
|
6.94
|
|
|
|
5.71
|
|
|
|
4.00
|
|
|
|
1.65
|
|
|
|
0.00
|
|
|
$16.00
|
|
|
|
6.73
|
|
|
|
5.92
|
|
|
|
4.77
|
|
|
|
3.21
|
|
|
|
1.18
|
|
|
|
0.00
|
|
|
$17.00
|
|
|
|
5.86
|
|
|
|
5.08
|
|
|
|
4.01
|
|
|
|
2.61
|
|
|
|
0.87
|
|
|
|
0.00
|
|
|
$18.00
|
|
|
|
5.14
|
|
|
|
4.40
|
|
|
|
3.41
|
|
|
|
2.14
|
|
|
|
0.65
|
|
|
|
0.00
|
|
|
$19.00
|
|
|
|
4.52
|
|
|
|
3.83
|
|
|
|
2.92
|
|
|
|
1.78
|
|
|
|
0.51
|
|
|
|
0.00
|
|
|
$20.00
|
|
|
|
4.00
|
|
|
|
3.36
|
|
|
|
2.52
|
|
|
|
1.49
|
|
|
|
0.40
|
|
|
|
0.00
|
|
|
$30.00
|
|
|
|
1.44
|
|
|
|
1.12
|
|
|
|
0.75
|
|
|
|
0.40
|
|
|
|
0.11
|
|
|
|
0.00
|
|
|
$40.00
|
|
|
|
0.61
|
|
|
|
0.46
|
|
|
|
0.29
|
|
|
|
0.15
|
|
|
|
0.04
|
|
|
|
0.00
|
|
The exact stock price and effective date may not be set forth on
the table, in which case:
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|
|
|
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if the stock price is between two stock prices on the table or
the effective date is between two effective dates on the table,
the number of additional shares will be determined by a
straight-line interpolation between the number of additional
shares set forth for the higher and lower share price amounts
and the two dates based on a
365-day
year, as applicable;
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|
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if the stock price is in excess of $40.00 per share,
subject to adjustment in the same manner as the stock price, no
increase in the conversion rate will be made; and
|
|
|
|
if the stock price is less than $7.05 per share, subject to
adjustment in the same manner as the stock price, no increase in
the conversion rate will be made.
|
Our obligations to deliver the additional shares could be
considered a penalty, in which case the enforceability thereof
would be subject to general principles of reasonableness of
economic remedies.
Notwithstanding the above, certain listing standards of Nasdaq
may limit the amount by which we may increase the conversion
rate pursuant to the events described above and under
Conversion Rate Adjustments. These
standards generally require us to obtain the approval of our
stockholders before entering into certain transactions that
potentially result in the issuance of 20% or more of our common
stock outstanding at the time the notes are issued. Accordingly,
in the event of an increase in the conversion rate above that
which would result in the notes, in the aggregate, becoming
convertible into shares in excess of such limitations, we will,
at our option, either obtain stockholder approval of such
issuances or deliver cash in lieu of any shares otherwise
deliverable upon conversions in excess of such limitations.
Conversion
Rate Adjustments
The conversion rate will be adjusted:
(1) upon the issuance of shares of our common stock as a
dividend or distribution on our common stock;
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(2) upon subdivisions, combinations or reclassifications of
our outstanding common stock;
(3) upon the issuance to all holders of our common stock of
rights or warrants entitling them to subscribe for or purchase
our common stock, or securities convertible into our common
stock, at a price per share or a conversion price per share less
than the current market price (as defined in the
indenture) per share on the record date for the issuance, other
than a distribution of rights pursuant to any shareholder rights
plan, provided that the conversion rate for the notes will be
readjusted to the extent that any rights or warrants are not
exercised prior to their expiration;
(4) upon the distribution to all holders of our common
stock of shares of our capital stock, evidences of indebtedness
or other non-cash assets, or rights or warrants, excluding:
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dividends, distributions and rights or warrants referred to in
clause (1) or (3) above;
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a distribution referred to in clause (6) below; and
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distribution of rights pursuant to a shareholder rights plan;
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(5) upon the occurrence of any dividend or any other
distribution of cash, other than in connection with a
liquidation, dissolution or winding up of Skyworks or as
contemplated by clause (6) below, to all holders of our
common stock, in which case, immediately prior to the opening of
business on the business day immediately following the record
date for the dividend or distribution, the conversion rate shall
be increased so that it equals an amount equal to the conversion
rate in effect at the close of business on the record date for
the dividend or distribution multiplied by a fraction:
(a) whose numerator is the average of the volume-weighted
average price per share of our common stock for the five
consecutive trading days ending on the date immediately
preceding the ex date (as defined below) for such
dividend or distribution; and
(b) whose denominator is the same average volume-weighted
average price per share of our common stock less the per share
amount of such dividend or distribution;
(6) upon the distribution of cash or other consideration by
us or any of our subsidiaries in respect of a tender offer or
exchange offer for our common stock, where such cash and the
value of any such other consideration per share of our common
stock validly tendered or exchanged exceeds the current
market price (as defined in the indenture) per share of
our common stock on the last date (the expiration
date) on which tenders or exchanges may be made pursuant
to the tender or exchange offer, in which case, immediately
prior to the opening of business on the ex date, the
conversion rate shall be increased so that it equals an amount
equal to the conversion rate in effect immediately before the
close of business on the expiration date multiplied by a
fraction:
(a) whose numerator is the sum of:
(i) the aggregate amount of cash and the aggregate value of
any such other consideration distributed in connection with the
tender or exchange offer; and
(ii) the product of (A) such current market
price per share of our common stock and (B) the
number of shares of our common stock outstanding as of the last
time (the expiration time) tenders or exchanges
could have been made pursuant to the tender or exchange offer,
excluding shares validly tendered and not withdrawn in
connection with the tender or exchange offer and any shares held
in our treasury; and
(b) whose denominator is the product of:
(i) such current market price per share of our
common stock; and
(ii) the number of shares of our common stock outstanding
as of the expiration time, including shares validly tendered and
not withdrawn in connection with the offer, but excluding any
shares held in our treasury.
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For purposes hereof, the term ex date, means:
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when used with respect to any dividend or distribution, the
first date on which the common stock trades, regular way, on the
relevant exchange or in the relevant market from which the sale
price was obtained without the right to receive such dividend or
distribution; and
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when used with respect to any tender offer or exchange offer,
the first date on which the common stock trades, regular way, on
the relevant exchange or in the relevant market from which the
sale price was obtained after the expiration time.
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No adjustment to the conversion rate will be made if Skyworks
provides that the holders of the notes will participate in the
distribution without conversion, or in certain other cases.
The conversion rate will not be adjusted:
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upon the issuance of any shares of our common stock pursuant to
any present or future plan providing for the reinvestment of
dividends or interest payable on Skyworks securities and the
investment of additional optional amounts in shares of our
common stock under any plan;
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upon the issuance of any shares of our common stock or options
or rights to purchase shares of our common stock pursuant to any
present or future employee, director or consultant benefit plan
or program of or assumed by Skyworks or any of its
subsidiaries; or
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upon the issuance of any shares of our common stock pursuant to
any option, warrant, right or exercisable, exchangeable or
convertible security not described in the preceding bullet and
outstanding as of the date the notes were first issued.
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The holders will receive, upon conversion of any notes into
shares of our common stock, if any, in addition to the common
stock, the rights under any future rights plan we may adopt,
whether or not the rights have separated from the common stock
at the time of conversion unless, prior to conversion, the
rights have expired, terminated or been redeemed or exchanged.
See Description of Capital Stock.
In the event of:
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any reclassification of our common stock;
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a consolidation, merger or combination involving
Skyworks; or
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a sale or conveyance to another person of the property and
assets of Skyworks as an entirety or substantially as an
entirety,
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in which holders of our outstanding common stock would be
entitled to receive stock, other securities, other property,
assets or cash for their common stock, holders of the notes will
generally thereafter be entitled to convert their notes into the
same type of consideration received by common stock holders
immediately following one of these types of events.
Subject to applicable Nasdaq listing standards, we are permitted
to increase the conversion rate of the notes by any amount for a
period of at least 20 days if our Board of Directors
determines that such increase would be in our best interest. We
are required to give at least 15 days prior notice of
any increase in the conversion rate. Subject to applicable
Nasdaq listing standards, we may also increase the conversion
rate to avoid or diminish income tax to holders of our common
stock in connection with a dividend or distribution of stock or
similar event.
If the applicable conversion rate is increased, holders of the
notes may, in certain circumstances, be deemed to have received
a distribution subject to U.S. federal income tax as a
dividend. As a result, we may be required to pay withholding tax
with respect to such deemed income. Because this deemed income
would not give rise to any cash from which any applicable
withholding tax could be satisfied, if we pay withholding taxes
on behalf of a holder, we may, at our option, set-off such
payments against payments of cash and common stock on the notes.
See Certain United States Federal Income Tax
Considerations Consequences
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to U.S. Holders Constructive
Distributions and Certain United States Federal
Income Tax Considerations Consequences to
Non-U.S. Holders
Dividends and Constructive Distributions.
No adjustment in the conversion rate will be required unless it
would result in a change in the conversion rate of at least one
percent. Any adjustment not made will be taken into account in
subsequent adjustments.
Notwithstanding the above, certain listing standards of Nasdaq
may limit the amount by which we may increase the conversion
rate pursuant to the events described above and as
described under Increase of Conversion Rate
Upon Certain Fundamental Changes. These standards
generally require us to obtain the approval of our stockholders
before entering into certain transactions that potentially
result in the issuance of 20% or more of our common stock
outstanding at the time the notes are issued. Accordingly, in
the event of an increase in the conversion rate above that which
would result in the notes, in the aggregate, becoming
convertible into shares in excess of such limitations, we will,
at our option, either obtain stockholder approval of such
issuances or deliver cash in lieu of any shares otherwise
deliverable upon conversions in excess of such limitations.
Conversion
Procedures
The right of conversion attaching to any note may be exercised
(a) if such note is represented by a global security, by
book-entry transfer to the conversion agent, which will
initially be the trustee, through the facilities of DTC, or
(b) if such note is represented by a certificated security,
by delivery of such note at the specified office of the
conversion agent, accompanied, in either case, by a duly signed
and completed conversion notice and appropriate endorsements and
transfer documents if required by the conversion agent. The
conversion date shall be the date on which the note
and all of the items required for conversion shall have been so
delivered.
No separate payment or adjustment will be made for accrued and
unpaid interest on a converted note or for dividends or
distributions on any of our common stock issued upon conversion
of a note, except as provided in the next paragraph. By
delivering to the holder the cash, the shares of common stock or
the combination of cash and shares of our common stock issuable
upon conversion, together with a cash payment in lieu of any
fractional shares, plus any other consideration due upon
conversion, we will satisfy our obligation with respect to the
conversion of the notes. That is, accrued interest (including
additional interest), if any, will not be paid and we will not
adjust the conversion rate to account for any accrued interest,
including additional interest, if any.
If the holder converts after the close of business on a record
date for an interest payment but prior to the corresponding
interest payment date, the holder on such record date will
receive on the interest payment date interest accrued on those
notes, notwithstanding the conversion of notes prior to the
interest payment date. Each holder, however, agrees, by
accepting a note, that if the holder surrenders any notes for
conversion during such period, such holder must pay us at the
time such holder surrenders its note for conversion an amount
equal to the interest that will be paid on the notes being
converted on the interest payment date. The preceding sentence
does not apply, however, if (1) any overdue interest exists
at the time of conversion with respect to the notes being
converted, but only to the extent of the amount of such overdue
interest or (2) the holder surrenders any notes for
conversion after the close of business on the record date
relating to the final interest payment date.
Holders of notes are not required to pay any taxes or duties
relating to the issuance or delivery of any common stock upon
exercise of conversion rights, but they are required to pay any
tax or duty which may be payable relating to any transfer
involved in the issuance or delivery of the common stock in a
name other than the name of the holder of the note. Certificates
representing shares of our common stock will be issued or
delivered only after all applicable taxes and duties, if any,
payable by the holder have been paid.
The notes will be deemed to have been converted immediately
prior to the close of business on the conversion date. Delivery
of shares will be accomplished by delivery to the conversion
agent of certificates for the relevant number of shares, other
than in the case of holders of notes in book-entry form with
DTC, which shares shall be delivered in accordance with DTC
customary practices. A holder will not be entitled to any
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rights as a holder of our common stock, including, among other
things, the right to vote and receive dividends and notices of
stockholder meetings, until the conversion is effective and to
the extent that any shares of our common stock are issued upon
conversion.
Subordination
of the Notes
The indebtedness represented by the notes is subordinated to the
extent provided in the indenture to the prior payment in full,
in cash or other payment satisfactory to holders of senior
indebtedness, of all senior indebtedness.
Upon any distribution of our assets upon any dissolution,
winding-up,
liquidation or reorganization, or in bankruptcy, insolvency,
receivership or similar proceedings, payment of the principal
of, premium, if any, and interest on the notes is to be
subordinated in right of payment to the prior payment in full,
in cash or other payment satisfactory to holders of senior
indebtedness, of all senior indebtedness.
In the event of any acceleration of the notes because of an
event of default, the holders of any senior indebtedness then
outstanding would be entitled to payment in full, in cash or
other payment satisfactory to holders of senior indebtedness, of
all obligations with respect to such senior indebtedness before
the holders of the notes are entitled to receive any payment or
other distribution.
We also may not make any payment on the notes if:
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a default in the payment of designated senior indebtedness
occurs and is continuing beyond any applicable period of
grace, or
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any other default occurs and is continuing with respect to
designated senior indebtedness that permits holders of the
designated senior indebtedness to accelerate its maturity and
the trustee receives a notice of such default (a payment
blockage notice), from any person permitted to give this
notice under the indenture.
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We may resume making payments on the notes:
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in the case of a payment default, when the default is cured or
waived or ceases to exist, and
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in the case of a nonpayment default, the earlier of
(i) when the default is cured or waived or ceases to exist
and (ii) 179 days after receipt of the payment
blockage notice.
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No new period of payment blockage may be commenced pursuant to a
payment blockage notice unless and until 360 days have
elapsed since our receipt of the prior payment blockage notice
with respect to a nonpayment default.
No default that existed on the date of delivery of any payment
blockage notice to the trustee shall be the basis for a
subsequent payment blockage notice with respect to a nonpayment
default.
By reason of the subordination provisions described above, in
the event of our bankruptcy, dissolution or reorganization,
holders of senior indebtedness may receive more, ratably, and
holders of the notes may receive less, ratably, than our other
creditors. These subordination provisions will not prevent the
occurrence of any event of default under the indenture.
Our right to receive any assets of any of our subsidiaries upon
their liquidation or reorganization, and therefore the right of
the holders of the notes to participate in those assets, will be
effectively subordinated to all indebtedness and other
liabilities of our subsidiaries, including amounts borrowed by
our wholly-owned subsidiary, Skyworks USA, Inc., under its
credit facility with Wachovia Bank, N.A. As of December 29,
2006, there was $50.0 million outstanding under this credit
facility.
In addition, even if we were a creditor of any of our
subsidiaries, our rights as a creditor would be subordinate to
any security interest in the assets of our subsidiaries and any
indebtedness of our subsidiaries senior to that held by us.
As of December 29, 2006, we had no indebtedness outstanding
that would constitute senior indebtedness.
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Designated senior indebtedness means any senior
indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at
the date of determination, the holders thereof are committed to
lend up to, at least $10.0 million and is specifically
designated by us in the instrument evidencing or governing such
senior indebtedness as designated senior
indebtedness for purposes of the indenture.
Obligations means, with respect to any indebtedness,
all obligations for principal, premium, interest, penalties,
fees, indemnifications, reimbursements and other amounts payable
pursuant to the documentation governing such indebtedness.
Senior indebtedness means:
(a) our indebtedness; and
(b) all of our other obligations, including interest
accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to us whether or not post-filing
interest is allowed in such proceeding, in respect of
indebtedness described in clause (a) above,
unless, in the case of clauses (a) and (b), in the
instrument creating or evidencing such indebtedness or other
obligation or pursuant to which such indebtedness or other
obligation is outstanding it is provided that such indebtedness
or other obligations are not superior in right of payment to the
notes; provided, however, that senior indebtedness shall not
include:
(i) any of our obligations to any of our subsidiaries;
(ii) any liability for Federal, state, local or other taxes
owed or owing by us;
(iii) any accounts payable or other liability to trade
creditors arising in the ordinary course of business; or
(iv) our 2007 notes.
Repurchase
of Notes at the Option of Holders Upon a Fundamental
Change
In the event of a fundamental change (as defined below) each
holder has the right at its option, subject to the terms and
conditions of the indenture, to require us to repurchase some or
all of such holders notes for cash in integral multiples
of $1,000 principal amount, at a price equal to 100% of the
principal amount of the notes being repurchased, plus accrued
and unpaid interest (including additional interest), if any, to,
but not including, the date of repurchase. We are required to
repurchase the notes on a date that is not less than 15 nor more
than 45 business days after the date we mail the notice referred
to below.
Within 30 business days after a fundamental change has become
effective, we must mail to all holders of the notes at their
addresses shown in the register of the registrar and to
beneficial owners as required by applicable law a notice
regarding the fundamental change, which notice must state, among
other things:
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the events causing such fundamental change;
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the date of such fundamental change;
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the last date on which a holder may exercise the repurchase
right;
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the repurchase price;
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the repurchase date;
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the names and addresses of the paying and conversion agents;
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the conversion rate, and any increase to the conversion rate
that will result from the fundamental change;
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that notes with respect to which a repurchase notice is given by
the holder may be converted only if the repurchase notice has
been withdrawn in accordance with the terms of the
indenture; and
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the procedures that holders must follow to exercise the right.
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To exercise this right, a holder must transmit to the paying
agent a written repurchase notice, and such repurchase notice
must be received by the paying agent no later than the close of
business on the business day immediately preceding the
repurchase date. The repurchase notice must state:
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the certificate numbers of the notes to be delivered by the
holder, if applicable;
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the portion of the principal amount of notes to be repurchased,
which portion must be $1,000 or an integral multiple of
$1,000; and
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that such notes are being tendered for repurchase pursuant to
the fundamental change provisions of the indenture.
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A holder may withdraw any repurchase notice by delivering to the
paying agent a written notice of withdrawal prior to the close
of business on the business day immediately preceding the
repurchase date. The notice of withdrawal must state:
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the certificate numbers of the notes being withdrawn, if
applicable;
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the principal amount of notes being withdrawn, which must be
$1,000 or an integral multiple of $1,000; and
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the principal amount, if any, of the notes that remain subject
to the repurchase notice.
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If the notes are not in certificated form, the foregoing notices
from holders must comply with the applicable DTC procedures.
We have agreed under the indenture to:
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comply with the provisions of
Rule 13e-4,
Rule 14e-1
and any other tender offer rules under the Exchange Act that may
then be applicable; and
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otherwise comply with all federal and state securities laws in
connection with any offer by us to repurchase the notes upon a
fundamental change.
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Our obligation to pay the repurchase price for a note for which
a repurchase notice has been delivered and not validly withdrawn
is conditioned upon delivery of the note, together with
necessary endorsements, to the paying agent at any time after
the delivery of such repurchase notice. We will cause the
repurchase price for such note to be paid promptly following the
later of the repurchase date or the time of delivery of such
note.
If the paying agent holds money sufficient to pay the repurchase
price of a note for which a repurchase notice has been delivered
on the repurchase date in accordance with the terms of the
indenture, then, on and after the repurchase date, the notes
will cease to be outstanding and interest (including additional
interest), if any, on such notes will cease to accrue, whether
or not the notes are delivered to the paying agent. Thereafter,
all rights of the holder shall terminate, other than the right
to receive the repurchase price upon delivery of the note.
A fundamental change will be deemed to have occurred
upon the occurrence of any of the following:
(1) any person or group becomes the
beneficial owner, directly or indirectly, of shares
of our voting stock representing 50% or more of the total voting
power of all outstanding classes of our voting stock or has the
power, directly or indirectly, to elect a majority of the
members of our board of directors and (i) files a
Schedule 13D or Schedule TO, or any successor
schedule, form or report under the Exchange Act, disclosing the
same, or (ii) we otherwise become aware of any such person
or group;
(2) we consolidate with, or merge with or into, another
person or we sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of our assets, or any person
consolidates with, or merges with or into, us, in any such event
other than pursuant to a transaction in which the persons that
beneficially owned directly or indirectly, the
shares of our voting stock immediately prior to such transaction
beneficially own, directly or indirectly, shares of voting stock
representing a majority of the total voting power of all
outstanding classes of voting stock of the surviving or
transferee person in
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substantially the same proportion amongst themselves
(disregarding for this purpose any shares of voting stock
(i) received as consideration for the capital stock of any
person other than Skyworks or (ii) held prior to such
transaction and issued by a person other than Skyworks) as such
ownership immediately prior to such transaction; or
(3) our common stock ceases to be listed on Nasdaq, the New
York Stock Exchange, or NYSE, or another national securities
exchange and is not then quoted on an established automated
over-the-counter
trading market in the United States.
However, a merger or consolidation will be deemed not to be a
fundamental change if at least 90% of all the consideration,
excluding cash payments for fractional shares and cash payments
pursuant to dissenters appraisal rights, in the merger or
consolidation constituting the fundamental change consists of
common stock traded on Nasdaq, the NYSE or another national
securities exchange, or which will be so traded when issued or
exchanged in connection with such merger or consolidation, and,
as a result of such transaction or transactions the notes become
convertible solely into such common stock.
For purposes of this fundamental change definition:
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person and group shall have the meanings
given to them for purposes of Sections 13(d) and 14(d) of
the Exchange Act or any successor provisions, and the term
group includes any group acting for the purpose of
acquiring, holding or disposing of securities within the meaning
of
Rule 13d-5(b)(1) under
the Exchange Act, or any successor provision;
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a beneficial owner will be determined in accordance
with
Rule 13d-3
under the Exchange Act, as in effect on the date of the
indenture;
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beneficially own and beneficially owned
have meanings correlative to that of beneficial owner;
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board of directors means the board of directors or
other governing body charged with the ultimate management of any
person;
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capital stock means: (1) in the case of a
corporation, corporate stock; (2) in the case of an
association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated)
of corporate stock; (3) in the case of a partnership or
limited liability company, partnership interests (whether
general or limited) or membership interests; or (4) any
other interest or participation that confers on a person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing person;
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voting stock means any class or classes of capital
stock or other interests then outstanding and normally entitled,
without regard to the occurrence of any contingency, to vote in
the election of the board of directors.
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The term all or substantially all as used in the
definition of fundamental change will likely be interpreted
under applicable state law and will be dependent upon particular
facts and circumstances. There may be a degree of uncertainty in
interpreting this phrase. As a result, we cannot assure holders
how a court would interpret this phrase under applicable law if
holders elect to exercise their rights following the occurrence
of a transaction which such holders believe constitutes a
transfer of all or substantially all of our assets.
This fundamental change repurchase feature may make more
difficult or discourage a takeover of us and the removal of
incumbent management. We are not, however, aware of any specific
effort to accumulate shares of our common stock or to obtain
control of us by means of a merger, tender offer, solicitation
or otherwise. In addition, the fundamental change repurchase
feature is not part of a plan by management to adopt a series of
antitakeover provisions. Instead, the fundamental change
repurchase feature is a result of negotiations between us and
the initial purchaser.
We could, in the future, enter into certain transactions,
including recapitalizations, that would not constitute a
fundamental change but would increase the amount of debt,
including unsubordinated indebtedness, outstanding or otherwise
adversely affect a holder. Neither we nor our subsidiaries are
prohibited from
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incurring debt, including unsubordinated indebtedness, under the
indenture. The incurrence of significant amounts of additional
debt could adversely affect our ability to service our debt,
including the notes.
Our ability to repurchase notes may be limited by restrictions
on our ability to obtain funds for such repurchase through
dividends from our subsidiaries and the terms of our then
existing borrowing agreements. Our failure to repurchase the
notes when required would result in an event of default with
respect to the notes. We cannot assure holders that we would
have the financial resources, or would be able to arrange
financing, to pay the repurchase price for all the notes that
might be delivered by holders of notes seeking to exercise the
repurchase right. See Risk Factors Risks
Relating to This Offering We may not be able to
repurchase the notes upon a fundamental change or pay a holder
of notes cash upon conversion of its notes.
Events of
Default
Each of the following constitutes an event of default with
respect to the notes, with the 2010 notes and the 2012 notes
treated as a separate classes:
(1) a default in the payment when due of any principal of
any of the notes at maturity, exercise of a repurchase right or
otherwise, whether or not prohibited by the subordination
provisions of the indenture;
(2) a default in the payment of any interest or additional
interest when due under the notes, which default continues for
30 days (whether or not prohibited by the subordination
provisions of the indenture);
(3) a default in our obligation to satisfy our conversion
obligation upon exercise of a holders conversion right,
which default continues for 15 days after performance is
due;
(4) a default in our obligation to provide notice of the
occurrence of a fundamental change when required by the
indenture;
(5) our failure to comply with any of our other agreements
in the notes or the indenture upon receipt of notice to us of
such default from the trustee or to us and the trustee from
holders of not less than 25% in aggregate principal amount of
the notes then outstanding, and our failure to cure, or obtain a
waiver of, such default within 60 days after we receive
such notice;
(6) Skyworks or any significant subsidiary fails to make
any payment of principal in excess of $20.0 million in
respect of indebtedness for borrowed money, when and as the same
shall become due and payable, whether at maturity or upon
acceleration, and such indebtedness is not paid, or such
acceleration is not rescinded, by the end of the 30th day
after receipt of notice to us of such default from the trustee
or to us and the trustee from holders of not less than 25% in
aggregate principal amount of the notes then outstanding; or
(7) certain events of bankruptcy, insolvency or
reorganization of Skyworks or any significant subsidiary.
The term significant subsidiary means any of our
subsidiaries which has: (i) consolidated assets or in which
we and our other subsidiaries have investments equal to or
greater than 10% of our total consolidated assets; or
(ii) consolidated gross revenue equal to or greater than
10% of our consolidated gross revenue.
If an event of default other than an event of default described
in clause (7) above with respect to Skyworks occurs and is
continuing, either the trustee or the holders of at least 25% in
aggregate principal amount of the affected notes then
outstanding may declare the principal amount of such notes then
outstanding plus any interest on such notes accrued and unpaid
(including additional interest), if any, through the date of
such declaration to be immediately due and payable. Any payment
by us on the notes following any such acceleration will be
subject to the subordination provisions described above.
The indenture provides that if an event of default described in
clause (7) above with respect to Skyworks occurs, the
principal amount of the notes plus accrued and unpaid interest
(including additional interest), if any, will automatically
become immediately due and payable. However, the effect of such
provision may be
48
limited by applicable law. Any payment by us on the notes
following any such acceleration will be subject to the
subordination provisions described above.
At any time after a declaration of acceleration has been made,
but before a judgment or decree for payment of money has been
obtained by the trustee, and subject to applicable law and
certain other provisions of the indenture, the holders of a
majority in aggregate principal amount of the affected notes
then outstanding may, under certain circumstances, rescind and
annul such acceleration.
Subject to the indenture, applicable law and the trustees
indemnification, the holders of a majority in aggregate
principal amount of the outstanding affected notes will have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to such
notes.
No holder will have any right to institute any proceeding under
the indenture, or for the appointment of a receiver or a
trustee, or for any other remedy under the indenture unless:
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the holder has previously given the trustee written notice of a
continuing event of default;
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the holders of at least 25% in aggregate principal amount of the
notes then outstanding have made a written request and have
offered indemnity reasonably satisfactory to the trustee to
institute such proceeding as trustee; and
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the trustee has failed to institute such proceeding within
60 days after such notice, request and offer, and has not
received from the holders of a majority in aggregate principal
amount of the notes then outstanding a direction inconsistent
with such request within 60 days after such notice, request
and offer.
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However, the above limitations do not apply to a suit instituted
by a holder for the enforcement of payment of the principal of
or any interest on any note on or after the applicable due date
or the right to convert the note in accordance with the
indenture.
Generally, the holders of not less than a majority of the
aggregate principal amount of outstanding affected notes may
waive any default or event of default other than:
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our uncured failure to pay principal of or any interest
(including additional interest), if any, on any note when due or
the payment of any repurchase price;
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our uncured failure to convert any note into cash or a
combination of cash and shares of our common stock; and
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our uncured failure to comply with any of the provisions of the
indenture that cannot be modified without the consent of the
holder of each outstanding note.
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We are required to furnish to the trustee, on an annual basis, a
statement by our officers as to whether or not we, to the
officers knowledge, are in default in the performance or
observance of any of the terms, provisions and conditions of the
indenture, specifying any known defaults.
Consolidation,
Merger and Sale of Assets
We may not consolidate with or merge into any person or convey,
transfer or lease all or substantially all of our properties and
assets to any successor person, unless:
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we are the surviving person or the resulting, surviving or
transferee person, if other than us, is organized and validly
existing under the laws of the United States of America, any
state of the United States of America, or the District of
Columbia and assumes our obligations on the notes and under the
indenture; and
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immediately after giving effect to the transaction, no default
or event of default shall have occurred and be continuing.
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When such a person assumes our obligations in such
circumstances, subject to certain exceptions, we shall be
discharged from all obligations under the notes and the
indenture. Although the indenture permits these transactions,
some of the transactions could constitute a fundamental change
of our company and permit each holder to require us to
repurchase the notes of such holder as described under
Repurchase of Notes at the Option of Holders
Upon a Fundamental Change. Notwithstanding anything else
described under Consolidation, Merger and Sale
of Assets, we may transfer all or substantially all of our
assets to a wholly owned subsidiary without such subsidiary
assuming our obligations on the notes and under the indenture,
provided that such subsidiary shall be required to guarantee the
notes if it issues any debt securities or if, in the future, we
issue debt securities and such subsidiary guarantees any such
debt securities, in each case, to the same extent that it
guaranteed such other debt securities.
Modification
and Waiver
Except as described below, we and the trustee may amend or
supplement the indenture or the notes with the consent of the
holders of at least a majority in aggregate principal amount of
the outstanding notes. In addition, subject to certain
exceptions, the holders of a majority in aggregate principal
amount of the outstanding notes may waive our compliance in any
instance with any provision of the indenture without notice to
the holders. However, (i) if any amendment, supplement or
waiver would by its terms disproportionately and adversely
affect the 2010 notes or the 2012 notes, such amendment,
supplement or waiver shall also require the consent of the
holders of at least a majority in aggregate principal amount of
the then outstanding 2010 notes or 2012 notes, as applicable,
and (ii) if any amendment, waiver or other modification
would only affect the 2010 notes or the 2012 notes, only the
consent of the holders of at least a majority in aggregate
principal amount of the then outstanding 2010 notes or 2012
notes, as applicable, will be required. In addition, no
amendment, supplement or waiver may be made without the consent
of the holder of each outstanding note if such amendment,
supplement or waiver would:
(1) change the stated maturity of the principal of or the
payment date of any installment of interest or additional
interest on or with respect to the notes;
(2) reduce the principal amount or repurchase price, or the
conversion rate of, any note, or the rate of interest or
additional interest on any note;
(3) reduce the amount of principal payable upon
acceleration of the maturity of any note;
(4) change the currency in which the principal or
repurchase price or interest with respect to the notes is
payable;
(5) impair the right to institute suit for the enforcement
of any payment on, or with respect to, any note;
(6) modify the provisions with respect to the repurchase
rights of the holders described under
Repurchase of Notes at the Option of Holders
Upon a Fundamental Change in a manner adverse to holders;
(7) adversely affect the right of holders to convert notes
other than as provided in the indenture;
(8) reduce the percentage in principal amount of the
outstanding notes, the consent of whose holders is required in
order to take specific actions including, but not limited to,
the waiver of past defaults or the modification or amendment of
the indenture; or
(9) alter the manner of calculation or rate of accrual of
interest or additional interest, repurchase price or the
conversion rate, except in a manner that would increase the
conversion rate, on any note or extend the time for payment of
any such amount.
We and the trustee may amend or supplement the indenture or the
notes without notice to, or the consent of the holders to, among
other things:
(1) cure any ambiguity, defect or inconsistency;
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(2) provide for uncertificated notes in addition to or in
place of certificated notes;
(3) provide for the assumption of our obligations to
holders of notes in the case of a share exchange, merger or
consolidation or sale of all or substantially all of our assets;
(4) make any change that would provide any additional
rights or benefits to the holders of notes or that does not
adversely affect in any material respect the legal rights under
the indenture of any such holder;
(5) add a guarantor;
(6) comply with requirements of the SEC in order to effect
or maintain the qualification of the indenture under the Trust
Indenture Act;
(7) secure the notes;
(8) increase the conversion rate;
(9) comply with the rules of any applicable securities
depositary, including DTC;
(10) conform the text of the indenture or the notes to any
provision of this description of the notes to the extent that
the text of this description of the notes was intended by us and
the initial purchaser to be a recitation of the text of the
indenture or the notes as represented by us to the trustee in an
officers certificate;
(11) provide for a successor trustee in accordance with the
terms of the indenture or to otherwise comply with any
requirement of the indenture;
(12) modify the restrictions and procedures for resale and
other transfers of notes or our common stock pursuant to law,
regulation or practice relating to the resale or transfer of
restricted securities generally; or
(13) amend the indenture to provide for the issuance of
additional notes.
Satisfaction
and Discharge
We may satisfy and discharge our obligations under the indenture
by delivering to the trustee for cancellation all outstanding
notes or by depositing with the paying agent or conversion
agent, as the case may be, after the notes have become due and
payable, whether at maturity or any repurchase date or by
delivery of a notice of conversion or otherwise, cash, shares or
other consideration (as applicable under the terms of the
indenture) sufficient to pay all of the outstanding notes and
paying all other sums payable under the indenture. Such
discharge is subject to terms contained in the indenture.
Calculations
in Respect of the Notes
We or our agents will be responsible for making all calculations
called for under the notes. These calculations include, but are
not limited to, determination of the sale price of our common
stock and the amount of any increase in the conversion rate for
any notes converted in connection with a fundamental change. We
or our agents will make all these calculations in good faith
and, absent manifest error, our and their calculations will be
final and binding on holders of notes. We or our agents will
provide a schedule of these calculations to the trustee, and the
trustee is entitled to conclusively rely upon the accuracy of
these calculations without independent verification.
Governing
Law
The indenture and the notes are governed by, and construed in
accordance with, the laws of the State of New York.
51
Concerning
the Trustee
U.S. Bank National Association is the trustee under the
indenture. The trustee is the paying agent, conversion agent and
registrar for the notes.
If the trustee becomes one of our creditors, the indenture
limits the right of the trustee to obtain payment of claims in
certain cases, or to realize on certain property received in
respect of any such claims, as security or otherwise. The
trustee is permitted to engage in other transactions; if,
however, after a default has occurred and is continuing, it
acquires any conflicting interest, it must eliminate such
conflict within 90 days, apply to the SEC for permission to
continue as trustee, if the indenture has been qualified under
the Trust Indenture Act, or resign.
Book-Entry
Delivery and Form
We initially issued the notes in the form of global securities.
Each global security was deposited with the trustee as custodian
for DTC and registered in the name of Cede & Co., as
DTCs nominee. Except as set forth below, each global
security may be transferred, in whole and not in part, only to
DTC or another nominee of DTC. Holders may hold their beneficial
interests in each global security directly through DTC if they
have an account with DTC or indirectly through organizations
that have accounts with DTC. Notes in definitive certificated
form (called certificated securities) will be issued
only in certain limited circumstances described below.
DTC has advised us that it is:
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a limited purpose trust company organized under the laws of the
State of New York;
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a member of the Federal Reserve System;
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a clearing corporation within the meaning of the New
York Uniform Commercial Code; and
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a clearing agency registered pursuant to the
provisions of Section 17A of the Exchange Act.
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DTC was created to hold securities of institutions that have
accounts with DTC (called participants) and to
facilitate the clearance and settlement of securities
transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities
certificates. DTCs participants include securities brokers
and dealers, which may include the initial purchaser, banks,
trust companies, clearing corporations and certain other
organizations. Access to DTCs book-entry system is also
available to others such as banks, brokers, dealers and trust
companies (called the indirect participants) that
clear through or maintain a custodial relationship with a
participant, whether directly or indirectly.
Ownership of beneficial interests in each global security is
limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in each
global security will be shown on, and the transfer of those
beneficial interests will be effected only through, records
maintained by DTC with respect to participants interests,
the participants and the indirect participants. The laws of some
jurisdictions may require that certain purchasers of securities
take physical delivery of such securities in definitive form.
These limits and laws may impair the ability to transfer or
pledge beneficial interests in the global securities.
Owners of beneficial interests in global securities who desire
to convert their notes in accordance with the indenture should
contact their brokers or other participants or indirect
participants through whom they hold such beneficial interests to
obtain information on procedures, including proper forms and
cut-off times, for submitting requests for conversion.
So long as DTC, or its nominee, is the registered owner or
holder of a global security, DTC or its nominee, as the case may
be, will be considered the sole owner or holder of the notes
represented by the global security for all purposes under the
indenture and the notes. In addition, no owner of a beneficial
interest in a global security is able to transfer that interest
except in accordance with the applicable procedures of DTC.
Except as set forth below, as an owner of a beneficial interest
in a global security, holders are not entitled to have the notes
represented by the global security registered in their name,
will not receive or be
52
entitled to receive physical delivery of certificated securities
and are not considered to be the owner or holder of any notes
under the global security. We understand that, under existing
industry practice, if an owner of a beneficial interest in a
global security desires to take any action that DTC, as the
holder of the global security, is entitled to take, DTC would
authorize the participants to take such action, and the
participants would authorize beneficial owners owning through
such participants to take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
We will make payments of principal of, and any interest on, the
notes represented by the global securities registered in the
name of and held by DTC or its nominee to DTC or its nominee, as
the case may be, as the registered owner and holder of the
global securities. We expect that DTC or its nominee, upon
receipt of any payment of principal of, or interest on, a global
security, will credit participants accounts with payments
in amounts proportionate to their respective beneficial
interests in the principal amount of the global security as
shown on the records of DTC or its nominee. We also expect that
payments by participants or indirect participants to owners of
beneficial interests in a global security held through such
participants or indirect participants will be governed by
standing instructions and customary practices and will be the
responsibility of such participants or indirect participants.
Neither we, the trustee nor any paying agent or conversion agent
will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial
interests in a global security for any note or for maintaining,
supervising or reviewing any records relating to such beneficial
interests or for any other aspect of the relationship between
DTC and its participants or indirect participants or the
relationship between such participants or indirect participants
and the owners of beneficial interests in the global security
owning through such participants.
Transfers between participants in DTC will be effected in the
ordinary way in accordance with DTC rules and will be settled in
same-day
funds.
DTC has advised us that it will take any action permitted to be
taken by a holder of notes only at the direction of one or more
participants to whose account the DTC interests in the
applicable global security is credited, and only in respect of
such portion of the aggregate principal amount of notes as to
which such participant or participants has or have given such
direction. If, however, DTC notifies us that it is unwilling to
be a depository for a global security or ceases to be a clearing
agency, and we do not appoint a successor depositary within
90 days, or if there is an event of default under the
notes, we will exchange the global security for certificated
securities, which we will distribute to DTC participants and
which will be legended.
Although DTC is expected to follow the foregoing procedures in
order to facilitate transfers of interests in global securities
among participants of DTC, it is under no obligation to perform
or continue to perform such procedures, and such procedures may
be discontinued at any time. Neither we nor the trustee will
have any responsibility or liability for the performance by DTC
or the participants or indirect participants of their respective
obligations under the rules and procedures governing their
respective operations.
Registration
Rights
The following summary of the registration rights provided in the
registration rights agreement is not complete. Holders should
refer to the registration rights agreement for a full
description of the registration rights that apply to the notes.
The notes and any common stock issuable upon conversion of the
notes are referred to collectively as registrable securities. We
will use our reasonable best efforts to keep the registration
statement of which this prospectus is a part effective until the
earliest of:
(1) two years from the effective date of the registration
statement;
(2) the date when all registrable securities shall have
been registered under the Securities Act and disposed
of; and
(3) the date on which all registrable securities held by
non-affiliates are eligible to be sold to the public pursuant to
Rule 144(k) under the Securities Act.
If we notify the holders in accordance with the registration
rights agreement of our intention to suspend the use of the
prospectus upon the occurrence of certain events, then the
holders will be obligated to suspend
53
the use of the prospectus until the requisite changes have been
made, and the period of effectiveness of the registration
statement provided for in clause (1) above shall be
extended by the number of days from and including the date of
the giving of such notice to and including the date when holders
have been advised by us that the prospectus may be used or have
received the amended or supplemented prospectus.
A holder of registrable securities that sells registrable
securities pursuant to the registration statement generally will
be required to provide information about itself and the
specifics of the sale, be named as a selling security holder in
the related prospectus, deliver a prospectus to purchasers, be
subject to relevant civil liability provisions under the
Securities Act of 1933 in connection with such sales and be
bound by the provisions of the registration rights agreement
which are applicable to such holder.
We may suspend the availability of the registration statement of
which this prospectus is a part and the use of any prospectus by
written notice to the holders for a period or periods not to
exceed 45 consecutive days or an aggregate of 90 days in
any twelve month period (we refer to each of these periods of
suspension as a suspension period) without incurring such
additional interest upon the occurrence of certain events
relating to pending corporate developments, public filings with
the SEC and similar events.
Each holder wishing to sell its registrable securities pursuant
to the registration statement and related prospectus is required
to deliver a questionnaire to us at least 15 business days prior
to any intended distribution. As promptly as practicable after
the later of receipt of a questionnaire or the expiration of any
suspension period in effect when such questionnaire is
delivered, we will file, if required by applicable law, a
post-effective amendment to the registration statement or a
supplement to this prospectus. In no event will we be required
to file more than one post-effective amendment in any calendar
quarter or to file a supplement or posteffective amendment
during any suspension period.
We will pay all expenses incident to our performance of and
compliance with the registration rights agreement, provide each
holder that is selling registrable securities pursuant to the
registration statement of which this prospectus is a part copies
of this prospectus as reasonably requested and take other
actions as are required under the terms of the registration
rights agreement to permit, subject to the foregoing,
unrestricted resales of the registrable securities.
54
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material U.S. federal
income tax considerations of the purchase, ownership and
disposition of notes and the shares of common stock into which
the notes may be converted. This summary is based upon
provisions of the Internal Revenue Code of 1986, or the Code,
applicable regulations, administrative rulings and judicial
decisions in effect as of the date of this prospectus, any of
which may subsequently be changed, possibly retroactively, or
interpreted differently by the Internal Revenue Service, or the
IRS, so as to result in U.S. federal income tax
consequences different from those discussed below. Except where
noted, this summary deals only with a note or share of common
stock held as a capital asset. This summary does not address all
aspects of U.S. federal income taxes and does not deal with
all tax consequences that may be relevant to holders in light of
their personal circumstances or particular situations, such as:
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tax consequences to holders who may be subject to special tax
treatment, including dealers in securities or currencies,
financial institutions, regulated investment companies, real
estate investment trusts, tax-exempt entities, insurance
companies and traders in securities that elect to use a
mark-to-market
method of accounting for their securities;
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tax consequences to persons holding notes or shares of our
common stock as a part of a hedging, integrated, conversion or
constructive sale transaction or a straddle;
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tax consequences to U.S. holders (as defined below) of
notes or shares of common stock whose functional
currency is not the U.S. dollar;
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tax consequences to investors in pass-through entities;
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tax consequences to certain former citizens or residents of the
United States;
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alternative minimum tax consequences, if any;
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any state, local or foreign tax consequences; and
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estate or gift taxes, if any, except as set forth below with
respect to
non-U.S. holders.
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If a partnership holds notes or shares of common stock, the tax
treatment of a partner will generally depend upon the status of
the partner and the activities of the partnership. If you are a
partner in a partnership holding the notes or shares of common
stock, you should consult your tax advisors.
If you are considering the purchase of notes, you should
consult your tax advisors concerning the U.S. federal
income tax consequences to you in light of your own specific
situation, as well as consequences arising under the laws of any
other taxing jurisdiction.
In this discussion, we use the term U.S. holder
to refer to a beneficial owner of notes or shares of common
stock received upon conversion of the notes that is, for
U.S. federal income tax purposes:
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an individual citizen or resident of the United States;
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a corporation (or any other entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof or the
District of Columbia;
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust, if it (i) is subject to the primary supervision of
a court within the U.S. and one or more U.S. persons have
the authority to control all substantial decisions of the trust,
or (ii) has a valid election in effect under applicable
U.S. Treasury regulations to be treated as a
U.S. person.
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We use the term
non-U.S. holder
to describe a beneficial owner (other than a partnership) of
notes or shares of common stock received upon conversion of the
notes that is not a U.S. holder.
Non-U.S. holders
should consult their tax advisors to determine the
U.S. federal, state, local and other tax consequences that
may be relevant to them.
55
Consequences
to U.S. Holders
Payment
of Interest
Interest on a note will generally be taxable to a
U.S. holder as ordinary income at the time it is received
or accrued in accordance with the U.S. holders usual
method of accounting for tax purposes.
Additional
Payments
We may be required to pay additional amounts to a
U.S. holder in certain circumstances described above under
the heading Description of the Notes
Registration Rights. Because we believe the likelihood
that we will be obligated to make any such additional payments
on the notes is remote, we intend to take the position (and this
discussion assumes) that the notes will not be treated as
contingent payment debt instruments. Assuming our position is
respected, a U.S. holder would be required to include in
income such additional amounts at the time payments are received
or accrued, if at all, in accordance with such
U.S. holders method of accounting for
U.S. federal income tax purposes.
Our determination that the notes are not contingent payment debt
instruments is not binding on the IRS. If the IRS were to
challenge successfully our determination and the notes were
treated as contingent payment debt instruments,
U.S. holders would be required, among other things,
(i) to accrue interest income at a rate higher than the
stated interest rate on the notes regardless of their method of
tax accounting, (ii) treat as ordinary income, rather than
capital gain, any gain recognized on a sale, exchange or
redemption of a note, and (iii) treat the entire amount of
recognized gain upon a conversion of notes as taxable. Our
determination that the notes are not contingent payment debt
instruments is binding on U.S. holders unless they disclose
their contrary positions to the IRS in the manner that is
required by applicable U.S. Treasury regulations.
Market
Discount
A U.S. holder that acquires a note at a price less than the
notes stated redemption price at maturity (generally, the
sum of all payments required under the note other than payments
of stated interest) may be affected by the market
discount rules of the Internal Revenue Code. Subject to a
de minimis exception, the market discount rules generally
require a U.S. holder who acquires a note at a market discount
to treat any principal payment on the note and any gain
recognized on any disposition of the note as ordinary income to
the extent of the accrued market discount, not previously
included in income, at the time of such payment or disposition.
In general, the amount of market discount that has accrued is
determined on a straight-line basis over the remaining term of
the note as of the time of acquisition, or, at the election of
the holder, on a constant yield basis. Such an election applies
only to the note with respect to which it is made and may not be
revoked.
A U.S. holder of a note acquired at a market discount also may
elect to include the market discount in income as it accrues. If
a U.S. holder so elects, the rules discussed above with respect
to ordinary income recognition resulting from the payment of
principal on a note or the disposition of a note would not
apply, and the holders tax basis in the note would be
increased by the amount of the market discount included in
income at the time it accrues. This election would apply to all
market discount obligations acquired by the U.S. holder on or
after the first day of the first taxable year to which the
election applies and may not be revoked without the consent of
the IRS.
A U.S. holder may be required to defer until maturity of the
note, or, in certain circumstances, its earlier disposition, the
deduction of all or a portion of the interest expense
attributable to debt incurred or continued to purchase or carry
a note with market discount, unless the holder elects to include
market discount in income on a current basis.
Upon the conversion of a note into common stock or a combination
of cash and common stock, any accrued market discount on the
note not previously included in income will be carried over to
the common stock received upon conversion of the note, and any
gain recognized upon the disposition of such common stock will
be treated as ordinary income to the extent of such accrued
market discount.
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Amortizable
Bond Premium
If a U.S. holder acquires a note for a price that is in excess
of the notes stated redemption price at maturity, the U.S.
holder generally will be considered to have acquired a note with
amortizable bond premium. Amortizable bond premium,
however, does not include any premium attributable to the
conversion feature of the note. A U.S. holder may elect to
amortize amortizable bond premium on a constant yield basis. The
amount amortized in any year generally will be treated as a
deduction against the holders interest income on the note.
If the amortizable bond premium allocable to a year exceeds the
amount of interest income allocable to that year, the excess
would be allowed as a deduction for that year but only to the
extent of the holders prior inclusions of interest income,
net of any deductions for bond premium, with respect to the
note. The premium on a note held by a U.S. holder that does not
make such an election will decrease the gain or increase the
loss otherwise recognizable on the disposition of the note. The
election to amortize the premium on a constant yield basis
generally applies to all bonds held or subsequently acquired by
the electing holder on or after the first day of the first
taxable year to which the election applies and may not be
revoked without the consent of the IRS.
Sale,
Redemption or Other Taxable Disposition of Notes
Except as provided below under Consequences to
U.S. Holders Conversion of Notes, a
U.S. holder will generally recognize gain or loss upon the
sale, redemption or other taxable disposition of a note
(including an exchange described in Description of the
Notes Conversion of Notes Exchange in
Lieu of Conversion) equal to the difference between the
amount realized (less accrued interest which will be taxable as
such) upon such sale, redemption or other taxable disposition
and such U.S. holders adjusted tax basis in the note.
A U.S. holders adjusted tax basis in a note will
generally be equal to the amount that such U.S. holder paid
for the note increased by the amount of any accrued market
discount previously included in the holders income and
decreased by the amount of any amortizable bond premium
previously deducted by the holder. Subject to the discussion
above regarding market discount, any gain or loss recognized on
a taxable disposition of the note will be capital gain or loss.
If, at the time of the sale, redemption or other taxable
disposition of the note, a U.S. holder is treated as
holding the note for more than one year, such capital gain or
loss will be a long-term capital gain or loss. Otherwise, such
capital gain or loss will be a short-term capital gain or loss.
In the case of certain non-corporate U.S. holders
(including individuals), long-term capital gain generally will
be subject to a maximum U.S. federal income tax rate of
15%, which maximum tax rate currently is scheduled to increase
to 20% for dispositions occurring during the taxable years
beginning on or after January 1, 2011. A
U.S. holders ability to deduct capital losses may be
limited.
Conversion
of Notes
Upon conversion of the notes, we may deliver solely shares of
our common stock, solely cash, or a combination of cash and
shares of our common stock, as described above under
Description of the Notes Conversion of
Notes Settlement Upon Conversion.
A U.S. holder of notes generally will not recognize gain or
loss on the conversion of the notes solely into shares of common
stock, other than cash received in lieu of fractional shares,
which will be treated as described below, and other than amounts
attributable to accrued interest, which will be taxable as such.
The U.S. holders tax basis in the shares of common
stock received upon conversion of the notes, other than common
stock attributable to accrued interest, the tax basis of which
would equal the amount of accrued interest with respect to which
the common stock was received, will be equal to the
holders aggregate tax basis in the notes converted, less
any portion allocable to cash received in lieu of fractional
shares. The holding period of the shares of common stock
received by the holder upon conversion of notes generally will
include the period during which the holder held the notes prior
to the conversion, except that the holding period of any common
stock received with respect to accrued interest would commence
on the day after the date of receipt.
Subject to the discussion above regarding market discount, cash
received in lieu of a fractional share of common stock will be
treated as a payment in exchange for the fractional share and
generally will result in
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capital gain or loss. Gain or loss recognized on the receipt of
cash paid in lieu of fractional shares generally will equal the
difference between the amount of cash received and the amount of
tax basis allocable to the fractional share exchanged.
In the event that we deliver solely cash upon such a conversion,
the U.S. holders gain or loss will be determined in
the same manner as if the U.S. holder disposed of the notes
in a taxable disposition, as described above under
Consequences to U.S. Holders Sale,
Redemption or Other Taxable Disposition of Notes.
In the event that we deliver common stock and cash upon such a
conversion, the U.S. federal income tax treatment of the
conversion is uncertain. U.S. holders should consult their
tax advisors regarding the consequences of such a conversion. It
is possible that the conversion may be treated as a
recapitalization or as a taxable exchange, in whole or in part,
as discussed below.
Treatment as a Recapitalization. If we pay a
combination of cash and stock in exchange for notes upon
conversion, we intend to take the position that the notes are
securities for U.S. federal income tax purposes and that,
as a result, the exchange would be treated as a
recapitalization. Subject to the discussion above regarding
market discount, in such case, capital gain, but not loss, would
be recognized equal to the excess of the sum of the fair market
value of the common stock and cash received, other than amounts
attributable to accrued interest, which will be treated as such,
over a U.S. holders adjusted tax basis in the notes,
but in no event should the gain recognized exceed the amount of
cash received, excluding amounts attributable to accrued
interest and cash in lieu of fractional shares. Subject to the
discussion above regarding market discount, the amount of
capital gain or loss recognized on the receipt of cash in lieu
of a fractional share would be equal to the difference between
the amount of cash a U.S. holder would receive in respect
of the fractional share and the portion of the
U.S. holders adjusted tax basis in the note that is
allocable to the fractional share.
The tax basis of the shares of common stock received upon a
conversion (other than common stock attributable to accrued
interest, the tax basis of which would equal the amount of
accrued interest with respect to which the common stock was
received) would equal the adjusted tax basis of the note that
was converted (excluding the portion of the tax basis that is
allocable to any fractional share), reduced by the amount of any
cash received (other than cash received in lieu of a fractional
share or cash attributable to accrued interest), and increased
by the amount of gain, if any, recognized (other than with
respect to a fractional share). A U.S. holders
holding period for shares of common stock would include the
period during which the U.S. holder held the notes, except
that the holding period of any common stock received with
respect to accrued interest would commence on the day after the
date of receipt.
Alternative Treatment as Part Conversion and Part
Sale. If the conversion of a note into cash and
common stock were not treated as a recapitalization, the cash
payment received would generally be treated as proceeds from the
sale of a portion of the note and taxed in the manner described
under Consequences to U.S. Holders Sale,
Redemption or Other Taxable Disposition of Notes above (or
in the case of cash received in lieu of a fractional share,
taxed as a disposition of a fractional share), and the common
stock received should be treated as having been received upon a
conversion of the note, which generally would not be taxable to
a U.S. holder except to the extent of any common stock
received with respect to accrued interest. In such case, the
U.S. holders tax basis in the note would generally be
allocated pro rata among the common stock received, other than
common stock received with respect to accrued interest, the
fractional share that is treated as sold for cash and the
portion of the note that is treated as sold for cash. The
holding period for the common stock received in the conversion
would include the holding period for the notes, except that the
holding period of any common stock received with respect to
accrued interest would commence on the day after the date of
receipt.
Alternative Treatment as a Fully Taxable
Event. If the conversion of a note into cash and
common stock were not treated as a recapitalization, it is
possible that the IRS would treat the conversion as a fully
taxable event. In such case, a U.S. holder would generally
recognize gain or loss in a taxable disposition in the manner
described above under Consequences to U.S.
Holders Sale, Redemption or Other Taxable
Disposition of Notes, the U.S. holders tax basis in
the stock would equal its fair market value on the date of
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the conversion, and the holding period of the stock would begin
on the day immediately after the date of the conversion.
Distributions
If a U.S. holder receives shares of our common stock upon a
conversion of the notes, distributions made on our common stock
generally will be included in a U.S. holders income
as ordinary dividend income to the extent of our current and
accumulated earnings and profits. Distributions in excess of our
current and accumulated earnings and profits will be treated as
a return of capital to the extent of a U.S. holders
adjusted tax basis in the common stock and thereafter as capital
gain from the sale or exchange of such common stock. With
respect to dividends received by individuals, for taxable years
beginning before January 1, 2011, such dividends may be
taxed at the lower applicable long-term capital gains rates if
certain holding period requirements are satisfied. Dividends
received by a corporation may be eligible for a dividends
received deduction, subject to applicable limitations.
Constructive
Distributions
The conversion rate of the notes will be adjusted in certain
circumstances, as described in Description of the
Notes Conversion of Notes Conversion
Rate Adjustments and Increase of
Conversion Rate Upon Certain Fundamental Changes.
Adjustments or failures to make adjustments that have the effect
of increasing a U.S. holders proportionate interest
in our assets or earnings may in some circumstances result in a
deemed distribution to a U.S. holder for U.S. federal
income tax purposes. Adjustments to the conversion rate made
pursuant to a bona fide reasonable adjustment formula that have
the effect of preventing the dilution of the interest of the
holders of the notes, however, will generally not be considered
to result in a deemed distribution to a U.S. holder.
Certain of the possible conversion rate adjustments provided in
the notes, including, without limitation, adjustments in respect
of taxable dividends to holders of our common stock and
adjustments to the conversion rate upon certain fundamental
changes, may not qualify as being pursuant to a bona fide
reasonable adjustment formula. If such an adjustment is made and
does not so qualify, a U.S. holder generally will be deemed
to have received a distribution even if the U.S. holder has
not received any cash or property as a result of such
adjustment. Any deemed distributions will be taxable as a
dividend, return of capital, or capital gain in accordance with
the description above under Distributions. It is not
clear whether a constructive dividend deemed paid to a
U.S. holder would be eligible for the preferential rates of
U.S. federal income tax applicable in respect of certain
dividends received. It is also unclear whether corporate holders
would be entitled to claim the dividends received deduction with
respect to any such constructive dividends. Because a
constructive dividend deemed received by a U.S. holder
would not give rise to any cash from which any applicable
withholding tax could be satisfied, if we pay backup withholding
taxes on behalf of a U.S. holder because such
U.S. holder failed to establish an exemption from backup
withholding taxes, we may, at our option, set-off any such
payment against payments of cash and common stock payable on the
notes.
Sale,
Certain Redemptions or Other Taxable Dispositions of Common
Stock
Subject to the discussion above regarding market discount, upon
the sale, certain redemptions or other taxable dispositions of
our common stock, a U.S. holder generally will recognize
capital gain or loss equal to the difference between
(i) the amount of cash and the fair market value of any
property received upon such taxable disposition and
(ii) the U.S. holders adjusted tax basis in the
common stock. Such capital gain or loss will be long-term
capital gain or loss if a U.S. holders holding period
in the common stock is more than one year at the time of the
taxable disposition. Long-term capital gains recognized by
certain non-corporate U.S. holders, including individuals,
will generally be subject to a maximum U.S. federal income
tax rate of 15%, which maximum is currently scheduled to
increase to 20% for dispositions occurring during taxable years
beginning on or after January 1, 2011. The deductibility of
capital losses is subject to limitations.
Information
Reporting and Backup Withholding
Information reporting requirements generally will apply to
payments of interest on the notes and dividends on shares of
common stock and to the proceeds of a sale of a note or share of
common stock paid to a U.S. holder unless the
U.S. holder is an exempt recipient, such as a corporation.
A backup withholding tax will apply to those payments if the
U.S. holder fails to provide its correct taxpayer
identification number, or certification of exempt status, or if
the U.S. holder is notified by the IRS that it has failed
to report in full
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payments of interest and dividend income. Any amounts withheld
under the backup withholding rules will be allowed as a refund
or a credit against a U.S. holders U.S. federal
income tax liability provided the required information is
furnished timely to the IRS.
Consequences
to
Non-U.S. Holders
Payments
of Interest
The 30% U.S. federal withholding tax will not be applied to
any payment of interest to a
non-U.S. holder
provided that:
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interest paid on the note is not effectively connected with the
non-U.S. holders
conduct of a trade or business in the United States and, if
required by an applicable income tax treaty, is not attributable
to a U.S. permanent establishment;
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the
non-U.S. holder
does not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock that are
entitled to vote within the meaning of section 871(h)(3) of
the Code;
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the
non-U.S. holder
is not a controlled foreign corporation that is related to us
(actually or constructively) through stock ownership;
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the
non-U.S. holder
is not a bank whose receipt of interest on a note is described
in section 881(c)(3)(A) of the Code; and
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(a) the
non-U.S. holder
provides its name and address, and certifies, under penalties of
perjury, that it is not a U.S. person, which certification
may be made on an IRS
Form W-8BEN
or other applicable form, or (b) the
non-U.S. holder
holds the notes through certain foreign intermediaries or
certain foreign partnerships, and the
non-U.S. holder
and the foreign intermediary or foreign partnership satisfies
the certification requirements of applicable Treasury
regulations. Special certification rules apply to
non-U.S. holders
that are pass-through entities.
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If a
non-U.S. holder
cannot satisfy the requirements described above, payments of
interest will be subject to the 30% U.S. federal
withholding tax, unless the
non-U.S. holder
provides us with a properly executed (i) IRS
Form W-8BEN
or other applicable form claiming an exemption from or reduction
in withholding under the benefit of an applicable income tax
treaty or (ii) IRS
Form W-8ECI
(or other applicable form) stating that interest paid on the
notes is not subject to withholding tax because it is
effectively connected with the
non-U.S. holders
conduct of a trade or business in the United States. If a
non-U.S. holder
is engaged in a trade or business in the United States and
interest on the notes is effectively connected with the conduct
of that trade or business and, if required by an applicable
income tax treaty, is attributable to a U.S. permanent
establishment, then, although the
non-U.S. holder
will be exempt from the 30% withholding tax provided the
certification requirements discussed above are satisfied, the
non-U.S. holder
will be subject to U.S. federal income tax on that interest
on a net income basis in the same manner as if the
non-U.S. holder
were a U.S. holder. In addition, if a
non-U.S. holder
is a foreign corporation, it may be subject to a branch profits
tax equal to 30% or lesser rate under an applicable income tax
treaty of its earnings and profits for the taxable year, subject
to adjustments, that are effectively connected with its conduct
of a trade or business in the United States.
If we fail to register the notes as agreed, we will be required
to pay additional interest, which may be subject to
U.S. withholding tax. We intend to withhold tax at a rate
of 30% on any payment of such interest made to a
non-U.S. holder
unless we receive certain certifications from the
non-U.S. holder
claiming that such payments are subject to reduction or
elimination of withholding under an applicable treaty or that
such payments are effectively connected with such holders
conduct of a trade or business in the United States, as
described above. If we withhold tax from any payment of
additional interest made to a
non-U.S. holder
and such payment were determined not to be subject to
U.S. federal tax, a
non-U.S. holder
would be entitled to a refund of any tax withheld.
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Dividends
and Constructive Distributions
Any dividends paid to a
non-U.S. holder
with respect to the shares of common stock (and any deemed
dividends resulting from certain adjustments, or failure to make
adjustments, to the conversion rate, see Consequences to
U.S. Holders Constructive Distributions
above) will be subject to withholding tax at a 30% rate or such
lower rate as may be specified by an applicable income tax
treaty. However, dividends that are effectively connected with
the conduct of a trade or business within the United States and,
where a tax treaty applies, are attributable to a
U.S. permanent establishment, are not subject to the
withholding tax, but instead are subject to U.S. federal
income tax on a net income basis in the same manner as if the
non-U.S. holder
were a U.S. holder. In addition, any such effectively
connected income received by a foreign corporation may, under
certain circumstances, be subject to an additional branch
profits tax at a 30% rate or such lower rate as may be specified
by an applicable income tax treaty. Certain certification
requirements and disclosure requirements must be complied with
in order for effectively connected income to be exempt from
withholding. Because a constructive dividend deemed received by
a
non-U.S. holder
would not give rise to any cash from which any applicable
withholding tax could be satisfied, if we pay withholding taxes
on behalf of a
non-U.S. holder,
we may, at our option, set-off any such payment against payments
of cash and common stock payable on the notes.
A
non-U.S. holder
of shares of common stock who wishes to claim the benefit of an
applicable treaty rate is required to satisfy applicable
certification and other requirements. If a
non-U.S. holder
is eligible for a reduced rate of U.S. withholding tax
pursuant to an income tax treaty, it may obtain a refund of any
excess amounts withheld by timely filing an appropriate claim
for refund with the IRS.
Sale,
Certain Redemptions, Conversion or Other Taxable Dispositions of
Notes or Shares of Common Stock
Gain realized by a
non-U.S. holder
on the sale, certain redemptions or other taxable disposition of
common stock or a note (including an exchange described in
Description of the Notes Exchange in Lieu of
Conversion,), as well as upon the conversion of a note
into cash or into a combination of cash and stock, will not be
subject to U.S. federal income tax unless:
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that gain is effectively connected with a
non-U.S. holders
conduct of a trade or business in the United States (and, if
required by an applicable income treaty, is attributable to a
U.S. permanent establishment);
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the
non-U.S. holder
is an individual who is present in the United States for
183 days or more in the taxable year of that disposition
and certain other conditions are met; or
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we are or have been a U.S. real property holding
corporation for U.S. federal income tax purposes
during the shorter of the
non-U.S. holders
holding period or the
5-year
period ending on the date of disposition of the notes or common
stock, as the case may be; provided, that as long as our common
stock is regularly traded on an established securities market,
generally only
non-U.S. holders
who have held more than 5% of such class of stock at any time
during such five-year or shorter period would be subject to
taxation under this rule. We believe that we are not, and we do
not anticipate becoming, a U.S. real property holding
corporation for U.S. federal income tax purposes.
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If a
non-U.S. holder
is described in the first bullet point above, it will be subject
to tax on the net gain derived from the sale, redemption,
conversion or other taxable disposition under regular graduated
U.S. federal income tax rates and in the same manner as if
the
non-U.S. holder
were a U.S. holder. In addition, if a
non-U.S. holder
is a foreign corporation, it may be subject to the branch
profits tax equal to 30% of its effectively connected earnings
and profits for that taxable year, or at such lower rate as may
be specified by an applicable income tax treaty. If a
non-U.S. holder
is an individual described in the second bullet point above,
such holder will be subject to a flat 30% tax on the gain
derived from the sale, redemption, conversion or other taxable
disposition, which may be offset by U.S. source capital
losses, even though such holder is not considered a resident of
the United States. Any common stock which a
non-U.S. holder
receives on the conversion of a note that is attributable to
accrued interest will be subject to U.S. federal income tax
in accordance with the rules for taxation of interest described
above under Consequences to
Non-U.S. Holders
Payments of Interest.
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Information
Reporting and Backup Withholding
Generally, we must report annually to the IRS and to
non-U.S. holders
the amount of interest and dividends paid to
non-U.S. holders
and the amount of tax, if any, withheld with respect to those
payments. Copies of the information returns reporting such
interest, dividends and withholding may also be made available
to the tax authorities in the country in which a
non-U.S. holder
resides under the provisions of an applicable income tax treaty.
In general, a
non-U.S. holder
will not be subject to backup withholding with respect to
payments of interest or dividends that we make, provided the
statement described above in the last bullet point under
Consequences to
Non-U.S. Holders
Payments of Interest has been received and we do not have
actual knowledge or reason to know that the holder is a
U.S. person, as defined under the Code, that is not an
exempt recipient. In addition, a
non-U.S. holder
will be subject to information reporting and, depending on the
circumstances, backup withholding with respect to payments of
the proceeds of the sale of a note or share of our common stock
within the United States or conducted through certain
U.S.-related
financial intermediaries, unless the statement described above
has been received, and we do not have actual knowledge or reason
to know that a holder is a U.S. person, as defined under
the Code, that is not an exempt recipient, or the
non-U.S. holder
otherwise establishes an exemption. Any amounts withheld under
the backup withholding rules will be allowed as a refund or a
credit against a
non-U.S. holders
U.S. federal income tax liability provided the required
information is furnished timely to the IRS.
U.S. Federal
Estate Taxes
A note beneficially owned by an individual who is not a citizen
or resident of the U.S. (as specially defined for
U.S. federal estate tax purposes) at the time of his or her
death generally will not be subject to U.S. federal estate
tax as a result of the individuals death, provided that:
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the individual does not actually or constructively own 10% or
more of the total combined voting power of all classes of our
stock entitled to vote within the meaning of
section 871(h)(3) of the Code; and
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interest payments with respect to such note would not have been,
if received at the time of the individuals death,
effectively connected with the conduct of a U.S. trade or
business by the individual.
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Common stock owned or treated as owned by an individual who is
not a citizen or resident of the U.S. (as specially defined
for U.S. federal estate tax purposes) at the time of his or
her death (including stock treated as owned by such
non-U.S. holder
by reason of a transfer subject to certain retained powers, or
by reason of any transfer within three years of death) will be
included in the individuals estate for U.S. federal
estate tax purposes and thus will be subject to
U.S. federal estate tax, unless an applicable estate tax
treaty provides otherwise.
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PLAN OF
DISTRIBUTION
We are registering the notes and the shares of our common stock
issuable upon conversion of the notes to permit public secondary
trading of these securities by the selling security holders from
time to time after the date of this prospectus. We have agreed,
among other things, to bear all expenses, other than selling
expenses, including any underwriting discounts and commissions,
registration expenses incurred by selling security holders, and
expenses and fees for one counsel in connection with the
registration and sale of the notes and the shares of our common
stock issuable upon conversion of the notes covered by this
prospectus.
We will not receive any of the proceeds from the offering of the
notes or the shares of our common stock issuable upon conversion
of the notes by the selling security holders, which term
includes their transferees, pledgees, donees and successors. The
selling security holders may pledge or grant a security interest
in some or all of the notes or shares of common stock issuable
upon conversion of the notes owned by them and, if they default
in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the notes or shares of common
stock issuable upon conversion of the notes from time to time
pursuant to this prospectus. The notes and shares of common
stock issuable upon conversion of the notes may be sold from
time to time directly by any selling security holder or,
alternatively, through underwriters, broker-dealers or agents.
If notes or shares of common stock issuable upon conversion of
the notes are sold through underwriters, broker-dealers or
agents, the selling security holder will be responsible for
underwriting discounts or commissions or agents
commissions and their professional fees.
The notes and shares of common stock issuable upon conversion of
the notes may be sold:
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in one or more transactions at fixed prices;
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at prevailing market prices at the time of sale;
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at varying prices determined at the time of sale; or
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at negotiated prices.
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Such sales may be effected in transactions, which may involve
crosses or block trades or transactions in which the broker acts
as agent for the seller and the buyer:
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on any national securities exchange on which the notes or shares
of common stock issuable upon conversion of the notes may be
listed at the time of sale;
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in the
over-the-counter
market;
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in transactions otherwise than on a national securities exchange
or in the
over-the-counter
market;
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through the settlement of short sales; or
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through the writing of options, whether the options are listed
on an options exchange or otherwise.
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In connection with sales of the notes or shares of common stock
issuable upon conversion of the notes or otherwise, any selling
security holder may:
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enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the notes or shares of common
stock issuable upon conversion of the notes in the course of
hedging the positions they assume;
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enter into option or other transactions with broker-dealers or
other financial institutions that require the delivery to the
broker-dealer or other financial institution of notes or shares
of common stock issuable upon conversion of the notes, which the
broker-dealer or other financial institutions may resell
pursuant to this prospectus;
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enter into transactions in which a broker-dealer makes purchases
as a principal for resale for its own account or through other
types of transactions;
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sell short and deliver notes or shares of common stock issuable
upon conversion of the notes to close out the short positions; or
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loan or pledge notes or shares of common stock issuable upon
conversion of the notes to broker-dealers that in turn may sell
the securities.
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Our outstanding common stock is publicly traded on the Nasdaq
Global Select Market. We do not intend to apply for listing of
the notes on any securities exchange. The notes are currently
designated for trading on The
PORTALSM
Market. However, we cannot assure any holder that any trading
market will develop or the notes will have any liquidity.
Selling security holders and any broker-dealers, agents or
underwriters that participate with selling security holders in
the distribution of the notes or the shares of common stock
issuable upon conversion of the notes may be deemed to be
underwriters within the meaning of the Securities
Act of 1933, in which event any commissions received by these
broker-dealers, agents or underwriters and any profits realized
by selling security holders on the resales of the notes or the
shares may be deemed to be underwriting commissions or discounts
under the Securities Act of 1933.
Selling security holders and any other person participating in
the sale of the notes or the shares of common stock issuable
upon conversion of the notes will be subject to the Securities
Exchange Act of 1934. The Securities Exchange Act of 1934 rules
include, without limitation, Regulation M, which may limit
the timing of purchases and sales of any of the notes and the
shares of common stock issuable upon conversion of the notes by
selling security holders and any other such person. In addition,
Regulation M of the Securities Exchange Act of 1934 may
restrict the ability of any person engaged in the distribution
of the notes and the shares of common stock issuable upon
conversion of the notes to engage in market-making activities
with respect to the particular notes and the shares of common
stock issuable upon conversion of the notes being distributed
for a period of up to five business days before the commencement
of such distribution. This may affect the marketability of the
notes and the shares of common stock issuable upon conversion of
the notes and the ability of any person or entity to engage in
market-making activities with respect to the notes and the
shares of common stock issuable upon conversion of the notes.
In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144, Rule 144A, or
any other available exemption from registration under the
Securities Act may be sold under Rule 144, Rule 144A,
or any of the other available exemption rather than pursuant to
this prospectus.
There is no assurance that any selling security holder will sell
any or all of the notes or shares of common stock issuable upon
conversion of the notes described in this prospectus, and any
selling security holder may transfer, devise or gift the
securities by other means not described in this prospectus.
On March 2, 2007, we issued and sold the notes in a private
placement to the initial purchaser. We have agreed to indemnify
the initial purchaser against liabilities or to contribute to
payments which it may be required to make in that respect.
Pursuant to the registration rights agreement, we have agreed to
indemnify holders of notes and each person, if any, who controls
within the meaning of the Securities Act of 1933 or the
Securities Exchange Act of 1934 the holders, from and against
certain liabilities under the Securities Act of 1933, the
Securities Exchange Act of 1934 or otherwise, or such persons
will be entitled to contribution in connection with these
liabilities. Pursuant to the registration rights agreement, the
selling security holders have agreed, severally and not jointly,
to indemnify us and each of our directors, officers and control
persons from certain liabilities under the Securities Act of
1933, the Securities Exchange Act of 1934 or otherwise, or we
will be entitled to contribution in connection with these
liabilities.
We have agreed pursuant to the registration rights agreement to
use our reasonable best efforts to keep the registration
statement of which this prospectus is a part effective until the
earliest of:
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two years from the effective date of the registration statement;
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the date when all registrable securities shall have been
registered under the Securities Act of 1933 and disposed of; and
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the date on which all registrable securities held by
non-affiliates are eligible to be sold to the public pursuant to
Rule 144(k) under the Securities Act of 1933.
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The registration rights agreement provides that we may suspend
the availability of the registration statement of which this
prospectus is a part and the use of any prospectus by written
notice to the holders for a period or periods not to exceed 45
consecutive days or an aggregate of 90 days in any twelve
month period, under certain circumstances relating to pending
corporate developments, public filings with the SEC and similar
events.
LEGAL
MATTERS
Certain legal matters relating to the issuance and sale of the
securities will be passed upon for us by Wilmer Cutler Pickering
Hale and Dorr LLP of Boston, Massachusetts.
EXPERTS
The consolidated financial statements and schedule of Skyworks
Solutions, Inc. and subsidiaries as of September 29, 2006
and September 30, 2005, and for each of the years in the
three-year period ended September 29, 2006, and
managements assessment of the effectiveness of internal
control over financial reporting as of September 29, 2006
(which is included in Managements Report on Internal
Control over Financial Reporting), have been incorporated by
reference herein and into the registration statement of which
this prospectus is a part, in reliance upon the reports of KPMG
LLP, an independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report
covering the September 29, 2006, consolidated financial
statements includes an explanatory paragraph that refers to
Skyworks Solutions, Inc.s adoption of Statement of
Financial Accounting Standards No. 123(R),
Share-Based Payment, effective October 1, 2005.
65
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
|
Item 14.
|
Other
Expenses of Issuance and Distribution.
|
The following table sets forth the various expenses to be
incurred in connection with the sale and distribution of the
securities being registered hereby, all of which will be borne
by Skyworks Solutions, Inc. (except any underwriting discounts
and commissions and expenses incurred by the selling security
holders for brokerage, accounting, tax or legal services or any
other expenses incurred by the selling security holders in
disposing of the shares). All amounts shown are estimates except
the SEC registration fee.
|
|
|
|
|
SEC registration fee
|
|
$
|
6,140
|
|
Legal fees and expenses
|
|
|
20,000
|
|
Accounting fees and expenses
|
|
|
10,000
|
|
Miscellaneous expenses
|
|
|
2,860
|
|
|
|
|
|
|
Total expenses
|
|
$
|
39,000
|
|
|
|
|
|
|
|
|
Item 15.
|
Indemnification
of Directors and Officers.
|
Section 102 of the Delaware General Corporation Law allows
a corporation to eliminate the personal liability of directors
of a corporation to the corporation or its stockholders for
monetary damages for a breach of fiduciary duty as a director,
except where the director breached his duty of loyalty, failed
to act in good faith, engaged in intentional misconduct or
knowingly violated a law, authorized the payment of a dividend
or approved a stock repurchase in violation of Delaware
corporate law or obtained an improper personal benefit. Skyworks
Solutions, Inc. has included such a provision in its Certificate
of Incorporation.
Section 145 of the General Corporation Law of Delaware
provides that a corporation has the power to indemnify a
director, officer, employee or agent of the corporation and
certain other persons serving at the request of the corporation
in related capacities against amounts paid and expenses incurred
in connection with an action or proceeding to which he is or is
threatened to be made a party by reason of such position, if
such person shall have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation, and, in any criminal proceeding,
if such person had no reasonable cause to believe his conduct
was unlawful; provided that, in the case of actions brought by
or in the right of the corporation, no indemnification shall be
made with respect to any matter as to which such person shall
have been adjudged to be liable to the corporation unless and
only to the extent that the adjudicating court determines that
such indemnification is proper under the circumstances.
Section 14 of Skyworks Second Amended and Restated
By-laws provides that a director or officer:
|
|
|
|
|
Shall be indemnified by Skyworks against all expenses (including
attorneys fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in any action, suit
or proceeding (other than an action by or in the right of
Skyworks) brought against such person by virtue of his or her
position as a Skyworks director or officer if such person
acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of
Skyworks, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was
unlawful; and
|
|
|
|
Shall be indemnified by Skyworks against all expenses (including
attorneys fees) actually and reasonably incurred in
connection with the defense or settlement of any action or suit
by or in the right of Skyworks brought against such person by
virtue of his or her position as a Skyworks director or
officer if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best
interests of Skyworks, except that no indemnification shall be
made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to Skyworks unless
a court shall determine that, despite the adjudication of
liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses.
|
II-1
In addition, to the extent that a director or officer has been
successful, on the merits or otherwise, in defense of any
action, suit or proceeding such person is required to be
indemnified by Skyworks against expenses (including
attorneys fees) actually and reasonably incurred. Expenses
will be advanced to a director or officer at such persons
request, provided that he or she undertakes to repay the amount
received if it is ultimately determined that he or she is not
entitled to indemnification for such expenses.
Skyworks Solutions, Inc. has purchased directors and
officers liability insurance which would indemnify its
directors and officers against damages arising out of certain
kinds of claims which might be made against them based on their
negligent acts or omissions while acting in their capacity as
such.
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
4
|
.1
|
|
Amended and Restated Certificate
of Incorporation of the Registrant.
|
|
4
|
.2
|
|
Second Amended and Restated
By-laws of the Registrant.
|
|
4
|
.3(1)
|
|
Indenture, dated as of
March 2, 2007, between the Registrant and U.S. Bank
National Association, as Trustee.
|
|
4
|
.4
|
|
Form of
11/4% Convertible
Subordinated Note due 2010.
|
|
4
|
.5
|
|
Form of
11/2% Convertible
Subordinated Note due 2012.
|
|
4
|
.6(2)
|
|
Registration Rights Agreement,
dated March 2, 2007, between the Registrant and Credit
Suisse Securities (USA) LLC.
|
|
4
|
.7(3)
|
|
Specimen Certificate of Common
Stock.
|
|
5
|
.1
|
|
Opinion of Wilmer Cutler Pickering
Hale and Dorr LLP.
|
|
12
|
.1
|
|
Computation of Ratio of Earnings
to Fixed Charges.
|
|
23
|
.1
|
|
Consent of KPMG LLP.
|
|
23
|
.2
|
|
Consent of Wilmer Cutler Pickering
Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
|
|
24
|
.1
|
|
Power of Attorney (See
page II-5
of this Registration Statement).
|
|
25
|
.1
|
|
Statement of Eligibility of
Trustee on
Form T-1.
|
|
|
|
(1) |
|
Incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed on March 5, 2007. |
|
(2) |
|
Incorporated by reference to Exhibit 99.1 to the
Registrants Current Report on
Form 8-K
filed on March 5, 2007. |
|
(3) |
|
Incorporated by reference to Exhibit 4 to the
Registrants
Form S-3
filed on July 15, 2002. |
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended
(the Securities Act);
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in the
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than
II-2
20 percent change in the maximum aggregate offering price
set forth in the Calculation of Registration Fee
table in the effective Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement
provided, however, that paragraphs (1)(i), (1)(ii)
and (1)(iii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the SEC by the
Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended (the
Exchange Act), that are incorporated by reference in
this Registration Statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of
this Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under
the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by the Registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by
section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of
the earlier of the date such form of prospectus is first used
after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of
the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement
or prospectus that is part of the registration statement will,
as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made
in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately
prior to such effective date.
(5) That, for the purpose of determining liability of the
Registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned
Registrant undertakes that in a primary offering of securities
of the undersigned Registrant pursuant to this Registration
Statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned Registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the
undersigned Registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned Registrant or used
or referred to by the undersigned Registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned Registrant or its securities provided by or on
behalf of the undersigned Registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned Registrant to the purchaser.
II-3
The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing
of the Registrants annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plans
annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the
indemnification provisions described herein, or otherwise, the
Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form S-3
and has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the
City of Woburn, Commonwealth of Massachusetts, on March 8,
2007.
SKYWORKS SOLUTIONS, INC.
David J. Aldrich
Chief Executive Officer, President and Director
SIGNATURES
AND POWER OF ATTORNEY
We, the undersigned officers and directors of Skyworks
Solutions, Inc., hereby severally constitute and appoint David
J. Aldrich, Allan M. Kline, and Mark V.B. Tremallo and each of
them singly, our true and lawful attorneys with full power to
any of them, and to each of them singly, to sign for us and in
our names in the capacities indicated below the Registration
Statement on
Form S-3
filed herewith and any and all pre-effective and post-effective
amendments to said Registration Statement and generally to do
all such things in our name and behalf in our capacities as
officers and directors to enable Skyworks Solutions, Inc. to
comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as
they may be signed by our said attorneys, or any of them, to
said Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ David
J.
Aldrich David
J. Aldrich
|
|
Chief Executive Officer, President
and Director (Principal Executive Officer)
|
|
March 8, 2007
|
|
|
|
|
|
/s/ Allan
M.
Kline Allan
M. Kline
|
|
Chief Financial Officer (Principal
Financial and Accounting Officer)
|
|
March 8, 2007
|
|
|
|
|
|
|
|
Chairman of the Board
|
|
|
|
|
|
|
|
/s/ Kevin
L.
Beebe Kevin
L. Beebe
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
/s/ Moiz
M.
Beguwala Moiz
M. Beguwala
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
/s/ Timothy
R.
Furey Timothy
R. Furey
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
/s/ Balakrishnan
S.
Iyer Balakrishnan
S. Iyer
|
|
Director
|
|
March 8, 2007
|
II-5
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Thomas
C.
Leonard Thomas
C. Leonard
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
/s/ David
P.
McGlade David
P. McGlade
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
/s/ David
J.
McLachlan David
J. McLachlan
|
|
Director
|
|
March 8, 2007
|
|
|
|
|
|
|
|
Director
|
|
|
II-6
EXHIBIT INDEX
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
|
|
|
|
|
4
|
.1
|
|
Amended and Restated Certificate
of Incorporation of the Registrant.
|
|
4
|
.2
|
|
Second Amended and Restated
By-laws of the Registrant.
|
|
4
|
.3(1)
|
|
Indenture, dated as of
March 2, 2007, between the Registrant and U.S. Bank
National Association, as Trustee.
|
|
4
|
.4
|
|
Form of
11/4% Convertible
Subordinated Note due 2010.
|
|
4
|
.5
|
|
Form of
11/2% Convertible
Subordinated Note due 2012.
|
|
4
|
.6(2)
|
|
Registration Rights Agreement,
dated March 2, 2007, between the Registrant and Credit
Suisse Securities (USA) LLC.
|
|
4
|
.7(3)
|
|
Specimen Certificate of Common
Stock.
|
|
5
|
.1
|
|
Opinion of Wilmer Cutler Pickering
Hale and Dorr LLP.
|
|
12
|
.1
|
|
Computation of Ratio of Earnings
to Fixed Charges.
|
|
23
|
.1
|
|
Consent of KPMG LLP.
|
|
23
|
.2
|
|
Consent of Wilmer Cutler Pickering
Hale and Dorr LLP, included in Exhibit 5.1 filed herewith.
|
|
24
|
.1
|
|
Power of Attorney (See
page II-5
of this Registration Statement).
|
|
25
|
.1
|
|
Statement of Eligibility of
Trustee on
Form T-1.
|
|
|
|
(1) |
|
Incorporated by reference to Exhibit 4.1 to the
Registrants Current Report on
Form 8-K
filed on March 5, 2007. |
|
(2) |
|
Incorporated by reference to Exhibit 99.1 to the
Registrants Current Report on
Form 8-K
filed on March 5, 2007. |
|
(3) |
|
Incorporated by reference to Exhibit 4 to the
Registrants
Form S-3
filed on July 15, 2002. |
II-7
Exhibit 4.1
RESTATED CERTIFICATE OF INCORPORATION
OF SKYWORKS SOLUTIONS, INC.
AS AMENDED
FIRST: The name of the Corporation is
Skyworks Solutions, Inc.
SECOND: The Corporation's registered office in the State of Delaware is
located at 2711 Centerville Road, Suite 400, City of Wilmington, County of New
Castle. The name and address of its registered agent is The Prentice-Hall
Corporation System, Inc., 2711 Centerville Road, Suite 400, City of Wilmington,
County of New Castle.
THIRD: The nature of the business, or objects or purposes to be
transacted, promoted or carried on, are: To engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 550,000,000, of which (i)
525,000,000 shares of the par value of $.25 each are to be of a class designated
Common Stock (the "Common Stock") and (ii) 25,000,000 shares without par value
are to be of a class designated Preferred Stock (the "Preferred Stock").
In this Article Fourth, any reference to a section or paragraph,
without further attribution, within a provision relating to a particular class
of stock is intended to refer solely to the specified section or paragraph of
the other provisions relating to the same class of stock.
COMMON STOCK
The Common Stock shall have the following voting powers, designations,
preferences and relative, participating, optional and other special rights, and
qualifications, limitations or restrictions thereof:
1. DIVIDENDS. Subject to the rights of the holders of Preferred
Stock, the holders of shares of the Common Stock shall be entitled to
receive such dividends and distributions in equal amounts per share,
payable in cash or otherwise, as may be declared thereon by the Board of
Directors from time to time out of assets or funds of the Corporation
legally available therefor.
2. RIGHTS ON LIQUIDATION. In the event of any liquidation,
dissolution or winding-up of the Corporation, whether voluntary or
involuntary, after the payment to creditors and the payment or setting
apart for payment to the holders of any outstanding Preferred Stock of
the full preferential amounts to which such holders are entitled as
herein provided or referred to, all of the remaining assets of the
Corporation shall belong to and be distributable in equal amounts per
share to the holders of the Common Stock. For purposes of this paragraph
2, a consolidation or merger of the Corporation with any other
corporation, or the sale, transfer or lease of all or substantially all
its assets shall not constitute or be deemed a liquidation, dissolution
or winding-up of the Corporation.
3. VOTING. Except as otherwise provided by the laws of the State of
Delaware or by this Article Fourth, each share of Common Stock shall
entitle the holder thereof to one vote.
PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized to provide for the issuance
of shares of Preferred Stock in series and, by filing a certificate pursuant to
the applicable law of the State of Delaware (hereinafter referred to as a
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations and restrictions thereof. The authority of the Board of Directors
with respect to each series shall include, but not be limited to, determination
of the following:
(a) the designation of the series, which may be by distinguishing
number, letter or title;
(b) the number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the
Preferred Stock Designation) increase or decrease (but not below the
number of shares thereof then outstanding);
(c) whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series;
(d) the dates at which dividends, if any, shall be payable;
(e) the redemption rights and price or prices, if any, for shares of
the series;
(f) the terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series;
2
(g) the amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation;
(h) whether the shares of the series shall be convertible into
shares of any other class or series, or any other security, of the
Corporation or any other corporation, and, if so, the specification of
such other class or series or such other security, the conversion price
or prices or rate or rates, any adjustments thereof, the date or dates as
of which such shares shall be convertible and all other terms and
conditions upon which such conversion may be made;
(i) restrictions on the issuance of shares of the same series or of
any other class or series; and
(j) the voting rights, if any, of the holders of shares of the
series; provided, that, except as otherwise provided by the laws of the
State of Delaware, no share of Preferred Stock of any series shall be
entitled to more than one vote per share of Preferred Stock.
Except as may be provided in this Certificate of Incorporation or in a
Preferred Stock Designation, the Common Stock shall have the exclusive right to
vote for the election of directors and for all other purposes, and holders of
Preferred Stock shall not be entitled to receive notice of any meeting of
stockholders at which they are not entitled to vote. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the shares of all classes of stock of the Corporation
entitled to vote for the election of directors, considered for the purposes of
this Article Fourth as one class of stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such holders is
required pursuant to any Preferred Stock Designation.
The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person, whether or not the Corporation shall have
notice thereof, except as expressly provided by applicable law.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders of the Corporation shall
not be subject to the payment of corporate debts to any extent whatever.
SEVENTH: The number of directors shall be fixed from time to time
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total
3
number of authorized directors (whether or not there exist any vacancies in
previously authorized directorships at the time any such resolution is presented
to the Board of Directors for adoption). At the 1983 annual meeting of
stockholders, the directors shall be divided into three classes, as nearly equal
in number as possible, with the term of office of the first class to expire at
the 1984 annual meeting of stockholders, the term of office of the second class
to expire at the 1985 annual meeting of stockholders and the term of office of
the third class to expire at the 1986 annual meeting of stockholders. At each
annual meeting of stockholders following such initial classification and
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election, unless, by reason of any intervening
changes in the authorized number of directors, the board shall designate one or
more of the then expiring directorships as directorships of another class in
order more nearly to achieve equality of number of directors among the classes.
Notwithstanding the rule that the three classes shall be as nearly equal
in number of directors as possible, in the event of any change in the authorized
number of directors, each director then continuing to serve as such shall
nevertheless continue as a director of the class of which he is a member until
the expiration of his current term, or his prior death, resignation or removal.
If any newly created directorship may, consistently with the rule that the three
classes shall be as nearly equal in number of directors as possible, be
allocated to one of two or more classes, the Board of Directors shall allocate
it to that of the available classes whose term of office is due to expire at the
earliest date following such allocation.
Vacancies resulting from any increase in the authorized number of
directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
may be filled only by a majority vote of the directors then in office, though
less than a quorum, and directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of office of
the class to which they have been elected expires. No decrease in the number of
authorized directors shall shorten the term of any incumbent director.
Subject to the rights of the holders of any series of Preferred Stock or
any other series or class of stock, as provided herein or in any Preferred Stock
Designation, to elect additional directors under specific circumstances, any
director may be removed from office at any time, but only for cause and only by
the affirmative vote of the holders of at least a majority of the shares of all
classes of stock of the Corporation entitled to vote for the election of
directors, considered for the purposes of this Article Seventh as one class of
stock.
No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for
4
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. No repeal or modification of this paragraph, directly
or by adoption of an inconsistent provision of this Certificate of
Incorporation, by the stockholders of the Corporation shall be effective with
respect to any cause of action, suit, claim or other matter that, but for this
paragraph, would accrue or arise prior to such repeal or modification.
EIGHTH: Unless otherwise determined by the Board of Directors, no holder
of stock of the Corporation shall, as such holder, have any right to purchase or
subscribe for any stock of any class which the Corporation may issue or sell,
whether or not exchangeable for any stock of the Corporation of any class or
classes and whether out of unissued shares authorized by the Certificate of
Incorporation of the Corporation as originally filed or by any amendment thereof
or out of shares of stock of the Corporation acquired by it after the issue
thereof.
NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of the General Corporation Law of the State of
Delaware (the "GCL") or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions of
section 279 of the GCL order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
TENTH:
1. AMENDMENT OF CERTIFICATE OF INCORPORATION. The corporation
reserves the right to amend, alter, change or repeal any provision
contained in this Certificate of Incorporation, in the manner hereafter
set forth, and all rights conferred upon stockholders herein are granted
subject to this reservation.
5
A. Except as provided in paragraphs 1(B) and (2) of this Article
Tenth and in Article Eleventh, any provision of this
Certificate of Incorporation may be amended, altered, changed
or repealed in the manner now or hereafter prescribed by the
statutes of the State of Delaware.
B. Notwithstanding any of the provisions of this Certificate of
Incorporation or any provision of law which might otherwise
permit a lesser vote or no vote, but in addition to any
affirmative vote of holders of any particular class or series
of stock of the Corporation required by law or this Certificate
of Incorporation, the affirmative vote of the holders of at
least the following percentages of the shares of all classes of
stock of the Corporation entitled to vote for the election of
directors, considered for this purpose as one class of stock,
shall be required to amend, alter, change or repeal, or to
adopt any provisions inconsistent with, the indicated
provisions of this Certificate of Incorporation:
(i) 80% in the case of Article Seventh or Article
Thirteenth; and
(ii) 90% in the case of Article Twelfth.
The foregoing paragraphs 1(B)(i) and (ii) of this Article Tenth may
not be amended so as to alter the stockholder vote required by
either such paragraph or to adopt any provisions inconsistent with
these provisions, except by an amendment that is itself approved by
the affirmative vote of the holders of at least the percentage of
all shares of all classes of stock of the Corporation as is required
to amend the provision or provisions of this Certificate of
Incorporation to which such amendment relates.
2. BY-LAWS. The Board of Directors is expressly authorized to adopt,
alter, amend and repeal the By-laws of the Corporation, in any manner not
inconsistent with the laws of the State of Delaware or of the Certificate
of Incorporation of the Corporation, subject to the power of the holders
of capital stock of the Corporation to adopt, alter or repeal the By-laws
made by the Board of Directors; provided, that any such adoption,
amendment or repeal by stockholders shall require the affirmative vote of
the holders of at least 66 2/3% of the shares of all classes of stock of
the Corporation entitled to vote for the election of directors,
considered for this purpose as one class of stock. This paragraph 2 of
Article Tenth may not be amended so as to alter the stockholder vote
specified hereby, nor may any provisions inconsistent with these
provisions be adopted, except by an amendment that is itself approved by
the affirmative vote of the holders of at least 66 2/3% of
6
the shares of all classes of stock of the Corporation entitled to vote
for the election of directors, considered for this purpose as one class
of stock.
ELEVENTH:
1. Except as set forth in paragraph 2 of this Article Eleventh, the
affirmative vote or consent of the holders of 80% of the shares of all
classes of stock of the Corporation entitled to vote for the election of
directors, considered for the purposes of this Article as one class,
shall be required (a) for the adoption of any agreement for the merger or
consolidation of the Corporation with or into any Other Corporation (as
hereinafter defined), or (b) to authorize any sale, lease, exchange,
mortgage, pledge or other disposition of all, or substantially all of the
assets of the Corporation or any Subsidiary (as hereinafter defined) to
any Other Corporation, or (c) to authorize the issuance or transfer by
the Corporation of any Substantial Amount (as hereinafter defined) of
securities of the Corporation in exchange for the securities or assets of
any Other Corporation. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of the stock of the
Corporation otherwise required by law, the Certificate of Incorporation
of the Corporation or any agreement or contract to which the Corporation
is a party.
2. The provisions of paragraph 1 of this Article Eleventh shall not
be applicable to any transaction described therein if such transaction is
approved by resolution of the Board of Directors of the Corporation;
provided that a majority of the members of the Board of Directors voting
for the approval of such transaction were duly elected and acting members
of the Board of Directors prior to the time any such Other Corporation
may have become a Beneficial Owner (as hereinafter defined) of 5% or more
of the shares of stock of the Corporation entitled to vote for the
election of directors.
3. For the purposes of paragraph 2 of this Article, the Board of
Directors shall have the power and duty to determine for the purposes of
this Article Eleventh, on the basis of information known to such Board,
if and when any Other Corporation is the Beneficial Owner of 5% or more
of the outstanding shares of stock of the Corporation entitled to vote
for the election of directors. Any such determination shall be conclusive
and binding for all purposes of this Article Eleventh.
4. As used in this Article Eleventh, the following terms shall have
the meanings indicated:
"Other Corporation" means any person, firm, corporation or other
entity, other than a subsidiary of the Corporation.
"Subsidiary" means any corporation in which the Corporation owns,
directly or indirectly, more than 50% of the voting securities.
7
"Substantial Amount" means any securities of the Corporation having
a then fair market value of more than $500,000.
An Other Corporation (as defined above) shall be deemed to be the
"Beneficial Owner" of stock if such Other Corporation or any "affiliate"
or "associate" of such Other Corporation (as those terms are defined in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934 (15
U.S.C. 78 aaa et seq.), as amended from time to time), directly or
indirectly, controls the voting of such stock or has any options,
warrants, conversion or other rights to acquire such stock.
5. This Article Eleventh may not be amended, revised or revoked, in
whole or in part, except by the affirmative vote or consent of the
holders of 80% of the shares of all classes of stock of the Corporation
entitled to vote for the election of directors, considered for the
purposes of this Article Eleventh as one class of stock.
TWELFTH:
1. The following definitions shall apply for the purpose of this
Article Twelfth only:
A. "Announcement Date" shall mean the date of first public
announcement of the proposal of a Business Combination.
B. "Business Combination" shall mean:
(i) any merger or consolidation of the Corporation or
any Subsidiary with (a) any Related Person, or (b)
any other corporation (whether or not itself a
Related Person) which is, or after such merger or
consolidation would be, an Affiliate of a Related
Person; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or
a series of transactions) to or with any Related
Person or any Affiliate of any Related Person of any
assets of the Corporation or any Subsidiary having
an aggregate Fair Market Value of $500,000 or more;
or
(iii) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of
transactions) of any securities of the Corporation
or any Subsidiary to any Related Person or any
Affiliate of any Related Person in exchange for
cash, securities or other property (or a combination
thereof) having an aggregate Fair Market Value of
$500,000 or more; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation
proposed by or on behalf of any Related Person or
any Affiliate of any Related Person; or
8
(v) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or
otherwise involving the Related Person) which has
the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of
any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or
indirectly owned by any Related Person or any
Affiliate of any Related Person.
C. "Consideration Received" shall mean the amount of cash and the
Fair Market Value, as of the Consummation Date, of
consideration other than cash received by the stockholder. In
the event of any Business Combination in which the Corporation
survives, the consideration other than cash shall include
shares of any class of outstanding Voting Stock retained by the
holders of such shares.
D. "Consummation Date" shall mean the date upon which the Business
Combination is consummated.
E. "Continuing Director" shall mean any member of the Board of
Directors of the Corporation who is unaffiliated with the
Related Person and who was a member of the Board of Directors
prior to the time that the Related Person became a Related
Person, and any successor of a Continuing Director who is
unaffiliated with the Related Person and is recommended to
succeed a Continuing Director by a majority of the Continuing
Directors then on the Board of Directors.
F. "Determination Date" shall mean the date upon which a Related
Person became a Related Person.
G. "Exchange Act" shall mean the Securities Exchange Act of 1934
as in effect on May 1, 1983.
H. "Fair Market Value" shall mean: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the
principal United States securities exchange registered under
the Exchange Act on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing
bid quotation with respect to a share of such
9
stock during the 30-day period preceding the date in question
on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use or, if no
such quotations are available, the fair market value on the
date in question of a share of such stock as determined by the
Board of Directors in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of
such property on the date in question as determined by the
Board of Directors in good faith.
I. "Related Person" shall mean any individual, firm, corporation
or other entity (other than the Corporation or any Subsidiary)
which, together with its Affiliates and Associates (as such
terms are defined in Rule 12b-2 under the Exchange Act) and
with any other individual, firm, corporation or other entity
(other than the Corporation or any Subsidiary) with which it or
they have any agreement, arrangement or understanding with
respect to acquiring, holding or disposing of Voting Stock,
beneficially owns (as defined in Rule 13d-3 of the Exchange
Act, except that such term shall include any Voting Stock which
such person has the right to acquire, whether or not such right
may be exercised within 60 days), directly or indirectly, more
than twenty percent of the voting power of the outstanding
Voting Stock.
J. "Subsidiary" shall mean any corporation in which a majority of
the capital stock entitled to vote generally in the election of
directors is owned, directly or indirectly, by the Corporation.
K. "Voting Stock" shall mean all of the then outstanding shares of
the capital stock of the Corporation entitled to vote generally
in the election of directors.
2. In addition to the affirmative vote otherwise required by law or
any provision of this Certificate of Incorporation (including without
limitation Article Eleventh), except as otherwise provided in paragraph
3, any Business Combination shall require the affirmative vote of the
holders of 90% of all Voting Stock, voting together as a single class.
Such affirmative vote shall be required notwithstanding any other
provision of this Certificate of Incorporation or any provision of law or
of any agreement with any national securities exchange which might
otherwise permit a lesser vote or no vote, and such affirmative vote
shall be required in addition to any affirmative vote
10
of the holders of any particular class or series of the Voting Stock
required by law or by this Certificate of Incorporation.
3. The provisions of paragraph 2 of this Article Twelfth shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by
law, any other provision of this Certificate of Incorporation (including
Article Eleventh), or any agreement with any national securities
exchange, if, in the case of a Business Combination that does not involve
any Consideration Received by the stockholders of the Corporation, solely
in their respective capacities as stockholders of the Corporation, the
condition specified in the following paragraph A is met, or, in the case
of any other Business Combination, the conditions specified in either of
the following paragraphs A and B are met:
A. The Business Combination shall have been approved by a majority
of the Continuing Directors, it being understood that this
condition shall not be capable of satisfaction unless there is
at least one Continuing Director.
B. All of the following conditions shall have been met:
(i) The form of the Consideration Received by holders of
shares of a particular class of outstanding Voting
Stock shall be in cash or in the same form as the
Related Person has paid for shares of such class of
Voting Stock within the two-year period ending on
and including the Determination Date. If, within
such two-year period, the Related Person has paid
for shares of any class of Voting Stock with varying
forms of consideration, the form of Consideration
Received per share by holders of shares of such
class of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of
such class of Voting Stock acquired by the Related
Person within such two-year period.
(ii) The aggregate amount of Consideration Received per
share by holders of each class of Voting Stock in
such Business Combination shall be at least equal to
the higher of the following (it being intended that
the requirements of this paragraph B(ii) shall be
required to be met with respect to every such class
of Voting Stock outstanding, whether or not the
Related Person has previously acquired any shares of
that particular class of Voting Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes
and soliciting dealers' fees)
11
paid by the Related Person for any shares of that
class of Voting Stock acquired by it within the
two-year period immediately prior to the
Announcement Date or in the transaction in which it
became a Related Person, whichever is higher; or
(b) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date; or
(c) in the case of any class of preferred stock, the
highest preferential amount per share to which the
holders of shares of such class of Voting Stock are
entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up
of the Corporation.
(iii) After such Related Person has become a Related
Person and prior to the consummation of such
Business Combination: (a) except as approved by a
majority of the Continuing Directors, there shall
have been no failure to declare and pay at the
regular date therefor any full quarterly dividends
(whether or not cumulative) on any outstanding
preferred stock; (b) there shall have been (I) no
reduction in the annual rate of dividends paid on
the Common Stock (except as necessary to reflect any
subdivision of the Common Stock), except as approved
by a majority of the Continuing Directors, and (II)
an increase in such annual rate of dividends as
necessary to reflect any reclassification (including
any reverse stock split), recapitalization,
reorganization or any similar transaction which has
the effect of reducing the number of outstanding
shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority
of the Continuing Directors; and (c) such Related
Person shall have not become the beneficial owner of
any newly issued share of Voting Stock directly or
indirectly from the Corporation except as part of
the transaction which results in such Related Person
becoming a Related Person.
(iv) After such Related Person has become a Related
Person, such Related Person shall not have received
the benefit, directly or indirectly (except
proportionately, solely in such Related Person's
capacity as a stockholder of the Corporation), of
any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in
anticipation of or in connection with such Business
Combination or otherwise.
12
(v) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Exchange Act and the rules and
regulations thereunder (or any subsequent provisions
replacing such act, rules or regulations) shall be
mailed to all stockholders of the Corporation at
least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or
information statement is required to be mailed
pursuant to the Exchange Act or subsequent
provisions). Such proxy or information statement
shall contain on the front thereof, prominently
displayed, any recommendation as to the advisability
or inadvisability of the Business Combination which
the Continuing Directors, or any of them, may have
furnished in writing to the Board of Directors.
4. A majority of the total number of authorized directors (whether
or not there exist any vacancies in previously authorized directorships
at the time any determination is to be made by the Board of Directors)
shall have the power and duty to determine, on the basis of information
known to them after reasonable inquiry, all facts necessary to determine
compliance with this Article Twelfth including, without limitation, (1)
whether a person is a Related Person, (2) the number of shares of Voting
Stock beneficially owned by any person, (3) whether the applicable
conditions set forth in paragraph (2) of Section C have been met with
respect to any Business Combination, and (4) whether the assets which are
the subject of any Business Combination or the Consideration Received for
the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination have an aggregate Fair Market
Value of $500,000 or more.
5. Nothing contained in this Article Twelfth shall be construed to
relieve any Related Person from any fiduciary obligation imposed by law.
THIRTEENTH: Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at an annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders.
13
Exhibit 4.2
SECOND AMENDED AND RESTATED
BY-LAWS OF
SKYWORKS SOLUTIONS, INC.
ARTICLE I
OFFICES
SECTION 1 Registered Office in Delaware; Resident Agent. The
address of the Corporation's registered office in the State of Delaware and the
name and address of its resident agent in charge thereof are as filed with the
Secretary of State of the State of Delaware.
SECTION 2 Other Offices. The Corporation may also have an office or
offices at such other place or places either within or without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation requires.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1 Place of Meetings. All meetings of the stockholders of the
Corporation shall be held at such place, within or without the State of
Delaware, as may from time to time be designated by resolution passed by the
Board of Directors. The Board of Directors may, in its sole discretion,
determine that the meetings shall not be held at any place, but may instead be
held solely by means of remote communication.
SECTION 2 Annual Meeting. An annual meeting of the stockholders for
the election of directors and for the transaction of such other proper business,
notice of which was given in the notice of meeting, shall be held on a date and
at a time as may from time to time be designated by resolution passed by the
Board of Directors.
SECTION 3 Special Meetings. A special meeting of the stockholders for
any purpose or purposes shall be called only by the Board of Directors pursuant
to a resolution adopted by a majority of the whole Board.
SECTION 4 Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of the stockholders, whether annual or special,
shall be mailed, postage prepaid, or sent by electronic transmission, not less
than ten nor more than sixty days before the date of the meeting, to each
stockholder entitled to vote at such meeting, at the stockholder's address as it
appears on the records of the Corporation. Every such notice shall state the
place, date and hour of the meeting, the means of remote communications, if any,
by which stockholders and proxy holders may be deemed to be present in person or
by proxy and vote at such meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called. Notice of any adjourned
meeting of the stockholders shall not be required to be given, except when
expressly required by law.
SECTION 5 List of Stockholders. The Secretary shall, from information
obtained from the transfer agent, prepare and make, at least ten days before
every meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the
meeting: (a) on a reasonably accessible electronic network, provided that the
information required to gain access to such list is provided with the notice of
the meeting, or (b) during ordinary business hours, at the principal place of
business of the Corporation. In the event that the Corporation determines to
make the list available on an electronic network, the Corporation may take
reasonable steps to ensure that such information is available only to
stockholders of the Corporation. If the meeting is to be held at a specified
place, then the list shall be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present. If the meeting is to be held solely by means of remote
communication, then the list shall also be open to the examination of any
stockholder during the whole time of the meeting on a reasonably accessible
electronic network, and the information required to access the list shall be
provided with the notice of the meeting. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock ledger,
the list referred to in this section or the books of the Corporation, or to vote
in person or by proxy at any meeting of stockholders.
SECTION 6 Quorum. At each meeting of the stockholders, the holders of
a majority of the issued and outstanding stock of the Corporation present either
in person or by proxy shall constitute a quorum for the transaction of business
except where otherwise provided by law or by the Certificate of Incorporation or
by these By-laws for a specified action. Except as otherwise provided by law, in
the absence of a quorum, a majority in interest of the stockholders of the
Corporation present in person or by proxy and entitled to vote shall have the
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until stockholders holding the requisite amount of
stock shall be present or represented. At any such adjourned meeting at which a
quorum may be present, any business may be transacted which might have been
transacted at a meeting as originally called, and only those stockholders
entitled to vote at the meeting as originally called shall be entitled to vote
at any adjournment or adjournments thereof. The absence from any meeting of the
number of stockholders required by law or by the Certificate of Incorporation or
by these By-laws for action upon any given matter shall not prevent action at
such meeting upon any other matter or matters which may properly come before the
meeting, if the number of stockholders required in respect of such other matter
or matters shall be present.
SECTION 7 Organization. At every meeting of the stockholders the
Chief Executive Officer, or in the absence of the Chief Executive Officer, a
director or an officer of the Corporation designated by the Board, shall act as
Chairman of the meeting. The Secretary, or, in the Secretary's absence, an
Assistant Secretary, shall act as Secretary at all meetings of the stockholders.
In the absence from any such meeting of the Secretary and the Assistant
Secretaries, the Chairman may appoint any person to act as Secretary of the
meeting.
SECTION 8 Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders. (1) Nominations of persons
for election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting, (b) by or
at the direction of the Board of Directors or (c) by any stockholder of the
Corporation who was a stockholder of record at the time of giving of notice
provided for in this By-law, who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this By-law.
(2) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to clause (c) of
paragraph (A)(1) of
2
this By-law, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the case of the
annual meeting to be held in 2003 or in the event that the date of the annual
meeting is more than 30 days before or after such anniversary date, notice by
the stockholder to be timely must be so delivered not earlier than the close of
business on the 120th day prior to such annual meeting and not later than the
close of business on the later of the 90th day prior to such annual meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by the Corporation. In no event shall the public
announcement of an adjournment of an annual meeting commence a new time period
for the giving of a stockholder's notice as described above. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors in an election contest, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Rule 14a-ll thereunder (including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected); (b) as to any other business that the
stockholder proposes to bring before the meeting, a brief description of the
business desired to be brought before the meeting, the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (c) as to the stockholder giving the notice and the beneficial owner,
if any, on whose behalf the nomination or proposal is made (i) the name and
address of such stockholder, as they appear on the Corporation's books, and of
such beneficial owner and (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner.
Notwithstanding anything in the second sentence of paragraph (A)(2) of
this By-law to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least 100
days prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this By-law shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation.
(B) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this By-law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this By-law. In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any stockholder who
shall be entitled to vote at the meeting may nominate a person or
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persons (as the case may be), for election to such position(s) as specified in
the Corporation's notice of meeting, if the stockholder's notice required by
paragraph (A)(2) of this By-law shall be delivered to the Secretary at the
principal executive offices of the Corporation not earlier than the close of
business on the 120th day prior to such special meeting and not later than the
close of business on the later of the 90th day prior to such special meeting or
the 10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. In no event shall the public
announcement of an adjournment of a special meeting commence a new time period
for the giving of a stockholder's notice as described above.
(C) General. (1) Only such persons who are nominated in
accordance with the procedures set forth in this By-law shall be eligible to
serve as directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this By-law. Except as otherwise provided by law,
the Certificate of Incorporation or these By-laws, the Chairman of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this By-law and, if any
proposed nomination or business is not in compliance with this By-law, to
declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this By-law, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15 (d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
By-law, a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this By-law. Nothing in this By-law shall be deemed to
affect any rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
SECTION 9 Business and Order of Business. At each meeting of the
stockholders such business may be transacted as may properly be brought before
such meeting, except as otherwise provided by law or in these By-laws. The order
of business at all meetings of the stockholders shall be as determined by the
Chairman of the meeting.
SECTION 10 Voting. Except as otherwise provided by law, the
Certificate of Incorporation or these By-laws, each stockholder shall at every
meeting of the stockholders be entitled to one vote for each share of stock held
by such stockholder. Any vote on stock may be given by the stockholder entitled
thereto in person or by proxy appointed by an instrument in writing, subscribed
(or transmitted by electronic means and authenticated as provided by law) by
such stockholder or by the stockholder's attorney thereunto authorized, and
delivered to the Secretary; provided, however, that no proxy shall be voted
after three years from its date unless the proxy provides for a longer period.
Except as otherwise provided by law, the Certificate of Incorporation or these
By-laws, at all meetings of the stockholders, all matters shall be decided by
the vote (which need not be by ballot) of a majority in interest of the
stockholders present in person or by proxy and entitled to vote thereat, a
quorum being present.
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SECTION 11 Participation at Meetings Held by Remote Communication. If
authorized by the Board of Directors in its sole discretion, and subject to such
guidelines and procedures as the Board of Directors may adopt, stockholders and
proxy holders not physically present at a meeting of stockholders may, by means
of remote communication: (A) participate in a meeting of stockholders; and (B)
be deemed present in person and vote at a meeting of stockholders whether such
meeting is to be held at a designated place or solely by means of remote
communication.
SECTION 12 Inspectors of Election. In advance of any meeting ,of
stockholders, the Board by resolution or the Chief Executive Officer shall
appoint one or more inspectors of election to act at the meeting and make a
written report thereof. One or more other persons may be designated as alternate
inspectors to replace any inspector who fails to act. If no inspector or
alternate is present, ready and willing to act at a meeting of stockholders, the
Chairman of the meeting shall appoint one or more inspectors to act at the
meeting. Unless otherwise required by law, inspectors may be officers, employees
or agents of the Corporation. Each inspector, before entering upon the discharge
of his or her duties, shall take and sign an oath faithfully to execute the
duties of inspector with strict impartiality and according to the best of his or
her ability. The inspector shall have the duties prescribed by law and shall
take charge of the polls and, when the vote is completed, shall make a
certificate of the result of the vote taken and of such other facts as may be
required by law.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1 General Powers. The property, affairs and business of the
Corporation shall be managed by or under the direction of its Board of
Directors.
SECTION 2 Number, Qualifications, and Term of Office. Subject to
the rights of the holders of any series of Preferred Stock to elect additional
directors under specified circumstances, the number of directors of the
Corporation shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the whole Board. A
director need not be a stockholder.
The number of directors shall be fixed from time to time exclusively by
the Board of Directors pursuant to a resolution adopted by a majority of the
total number of authorized directors (whether or not there exist any vacancies
in previously authorized directorships at the time any such resolution is
presented to the Board of Directors for adoption). At the 1983 annual meeting of
stockholders, the directors shall be divided into three classes, as nearly equal
in number as possible, with the term of office of the first class to expire at
the 1984 annual meeting of stockholders, the term of office of the second class
to expire at the 1985 annual meeting of stockholders and the term of office of
the third class to expire at the 1986 annual meeting of stockholders. At each
annual meeting of stockholders following such initial classification and
election, directors elected to succeed those directors whose terms expire shall
be elected for a term of office to expire at the third succeeding annual meeting
of stockholders after their election, unless, by reason of any intervening
changes in the authorized number of directors, the board shall designate one or
more of the then expiring directorships as directorships of another class in
order more nearly to achieve equality of number of directors among the classes.
SECTION 3 Election of Directors. At each meeting of the stockholders
for the election of directors, at which a quorum is present, the directors shall
be elected by a plurality vote of all votes cast for the election of directors
at such meeting.
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SECTION 4 Chairman of the Board of Directors. The Board of Directors
may elect from among its members one director to serve at its pleasure as
Chairman of the Board.
SECTION 5 Quorum and Manner of Acting. A majority of the members of
the Board of Directors shall constitute a quorum for the transaction of business
at any meeting, and the act of a majority of the directors present at any
meeting at which a quorum is present shall be the act of the Board of Directors
unless otherwise provided by law, the Certificate of Incorporation or these
By-laws. In the absence of a quorum, a majority of the directors present may
adjourn any meeting from time to time until a quorum shall be obtained. Notice
of any adjourned meeting need not be given. The directors shall act only as a
board and the individual directors shall have no power as such.
SECTION 6 Place of Meetings. The Board of Directors may hold its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
SECTION 7 First Meeting. Promptly after each annual election of
directors, the Board of Directors shall meet for the purpose of organization,
the election of officers and the transaction of other business, at the same
place as that at which the annual meeting of stockholders was held or as
otherwise determined by the Board. Notice of such meeting need not be given.
Such meeting may be held at any other time or place which shall be specified in
a notice given as hereinafter provided for special meetings of the Board of
Directors.
SECTION 8 Regular Meetings. Regular meetings of the Board of
Directors shall be held at such places and at such times as the Board shall from
time to time determine. If any day fixed for a regular meeting shall be a legal
holiday at the place where the meeting is to be held, then the meeting which
would otherwise be held on that day shall be held at the same hour on the next
succeeding business day not a legal holiday. Notice of regular meetings need not
be given.
SECTION 9 Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board or the
Chief Executive Officer and shall be called by the Chairman of the Board, the
Chief Executive Officer or the Secretary of the Corporation at the written
request of three directors. Notice of each such meeting stating the time and
place of the meeting shall be given to each director by mail, telephone, other
electronic transmission or personally. If by mail, such notice shall be given
not less than five days before the meeting; and if by telephone, other
electronic transmission or personally, not less than two days before the
meeting. A notice mailed at least two weeks before the meeting need not state
the purpose thereof except as otherwise provided in these By-laws. In all other
cases the notice shall state the principal purpose or purposes of the meeting.
Notice of any meeting of the Board need not be given to a director, however, if
waived by the director in writing before or after such meeting or if the
director shall be present at the meeting, except when the director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
SECTION 10 Organization. At each meeting of the Board of Directors,
the Chairman of the Board, or, in the absence of the Chairman of the Board, the
Chief Executive Officer, or, in his or her absence, a director or an officer of
the Corporation designated by the Board shall act as Chairman of the meeting.
The Secretary, or, in the Secretary's absence, any person appointed by the
Chairman of the meeting, shall act as Secretary of the meeting.
SECTION 11 Order of Business. At all meetings of the Board of
Directors, business shall be transacted in the order determined by the Board.
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SECTION 12 Resignations. Any director of the Corporation may resign at
any time by giving written notice to the Chairman of the Board, the Chief
Executive Officer or the Secretary of the Corporation. The resignation of any
director shall take effect at the time specified therein, and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 13 Compensation. Each director shall be paid such
compensation, if any, as shall be fixed by the Board of Directors.
SECTION 14 Indemnification. (A) The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation), by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation or any of its
majority-owned subsidiaries or is or was serving at the request of the
Corporation as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
this section) of another corporation or of any partnership, joint venture,
trust, employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such
person reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
(B) The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation or any of its
majority-owned subsidiaries, or is or was serving at the request of the
Corporation as a director, officer, employee or agent (except in each of the
foregoing situations to the extent any agreement, arrangement or understanding
of agency contains provisions that supersede or abrogate indemnification under
this section) of another corporation or of any partnership, joint venture,
trust, employee benefit plan or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery of Delaware or such other court shall deem
proper.
(C) To the extent that a director, officer, employee or agent
of the Corporation or any of its majority-owned subsidiaries has been successful
on the merits or otherwise in defense of any action, suit or proceeding referred
to in subsections (A) and (B), or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including attorneys'
7
fees) actually and reasonably incurred by or on behalf of such person in
connection therewith. If any such person is not wholly successful in any such
action, suit or proceeding but is successful, on the merits or otherwise, as to
one or more but less than all claims, issues or matters therein, the Corporation
shall indemnify such person against all expenses (including attorneys' fees)
actually and reasonably incurred by or on behalf of such person in connection
with each claim, issue or matter that is successfully resolved. For purposes of
this subsection and without limitation, the termination of any claim, issue or
matter by dismissal, with or without prejudice, shall be deemed to be a
successful result as to such claim, issue or matter.
(D) Notwithstanding any other provision of this section, to the
extent any person is a witness in, but not a party to, any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person is or was a director, officer, employee or agent of
the Corporation or any of its majority-owned subsidiaries, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
(except in each of the foregoing situations to the extent any agreement,
arrangement or understanding of agency contains provisions that supersede or
abrogate indemnification under this section) of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise,
such person shall be indemnified against all expenses (including attorneys'
fees) actually and reasonably incurred by or on behalf of such person in
connection therewith.
(E) Indemnification under subsections (A) and (B) shall be made
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because such person has met the applicable standard of conduct set
forth in subsections (A) and (B). Such determination shall be made (1) if a
Change of Control (as hereinafter defined) shall not have occurred, (a) with
respect to a person who is a present or former director or officer of the
Corporation, (i) by the Board of Directors by a majority vote of the
Disinterested Directors (as hereinafter defined), even though less than a
quorum, or (ii) if there are no Disinterested Directors or, even if there are
Disinterested Directors, a majority of such Disinterested Directors so directs,
by (x) Independent Counsel (as hereinafter defined) in a written opinion to the
Board of Directors, a copy of which shall be delivered to the claimant, or (y)
the stockholders of the Corporation; or (b) with respect to a person who is not
a present or former director or officer of the Corporation, by the chief
executive officer of the Corporation or by such other officer of the Corporation
as shall be designated from time to time by the Board of Directors; or (2) if a
Change of Control shall have occurred, by Independent Counsel selected by the
claimant in a written opinion to the Board of Directors, a copy of which shall
be delivered to the claimant, unless the claimant shall request that such
determination be made by or at the direction of the Board of Directors (in the
case of a claimant who is a present or former director or officer of the
Corporation) or by an officer of the Corporation authorized to make such
determination (in the case of a claimant who is not a present or former director
or officer of the Corporation), in which case it shall be made in accordance
with clause (1) of this sentence. Any claimant shall be entitled to be
indemnified against the expenses (including attorneys' fees) actually and
reasonably incurred by such claimant in cooperating with the person or entity
making the determination of entitlement to indemnification (irrespective of the
determination as to the claimant's entitlement to indemnification) and, to the
extent successful, in connection with any litigation or arbitration with respect
to such claim or the enforcement thereof.
(F) If a Change of Control shall not have occurred, or if a
Change of Control shall have occurred and a director, officer, employee or agent
requests pursuant to clause (2) of the second sentence in subsection (E) that
the determination as to whether the claimant is entitled to indemnification be
made by or at the direction of the Board of Directors (in the case of a claimant
who is a present or former director or officer of the Corporation) or by an
officer of the
8
Corporation authorized to make such determination (in the case of a claimant who
is not a present or former director or officer of the Corporation), the claimant
shall be conclusively presumed to have been determined pursuant to subsection
(E) to be entitled to indemnification if (1) in the case of a claimant who is a
present or former director or officer of the Corporation, (a)(i) within fifteen
days after the next regularly scheduled meeting of the Board of Directors
following receipt by the Corporation of the request therefor, the Board of
Directors shall not have resolved by majority vote of the Disinterested
Directors to submit such determination to (x) Independent Counsel for its
determination or (y) the stockholders for their determination at the next annual
meeting, or any special meeting that may be held earlier, after such receipt,
and (ii) within sixty days after receipt by the Corporation of the request
therefor (or within ninety days after such receipt if the Board of Directors in
good faith determines that additional time is required by it for the
determination and, prior to expiration of such sixty-day period, notifies the
claimant thereof), the Board of Directors shall not have made the determination
by a majority vote of the Disinterested Directors, or (b) after a resolution of
the Board of Directors, timely made pursuant to clause (a)(i)(y) above, to
submit the determination to the stockholders, the stockholders meeting at which
the determination is to be made shall not have been held on or before the date
prescribed (or on or before a later date, not to exceed sixty days beyond the
original date, to which such meeting may have been postponed or adjourned on
good cause by the Board of Directors acting in good faith), or (2) in the case
of a claimant who is not a present or former director or officer of the
Corporation, within sixty days after receipt by the Corporation of the request
therefor (or within ninety days after such receipt if an officer of the
Corporation authorized to make such determination in good faith determines that
additional time is required for the determination and, prior to expiration of
such sixty-day period, notifies the claimant thereof), an officer of the
Corporation authorized to make such determination shall not have made the
determination; provided, however, that this sentence shall not apply if the
claimant has misstated or failed to state a material fact in connection with his
or her request for indemnification. Such presumed determination that a claimant
is entitled to indemnification shall be deemed to have been made (I) at the end
of the sixty-day or ninety-day period (as the case may be) referred to in clause
(1)(a)(ii) or (2) of the immediately preceding sentence or (II) if the Board of
Directors has resolved on a timely basis to submit the determination to the
stockholders, on the last date within the period prescribed by law for holding
such stockholders meeting (or a postponement or adjournment thereof as permitted
above).
(G) Expenses (including attorneys' fees) incurred in defending
a civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding to a present or former director or officer of the
Corporation, promptly after receipt of a request therefor stating in reasonable
detail the expenses incurred, and to a person who is not a present or former
director or officer of the Corporation as authorized by the chief executive
officer of the Corporation or such other officer of the Corporation as shall be
designated from time to time by the Board of Directors; provided that in each
case the Corporation shall have received an undertaking by or on behalf of the
present or former director, officer, employee or agent to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this section.
(H) The Board of Directors shall establish reasonable
procedures for the submission of claims for indemnification pursuant to this
section, determination of the entitlement of any person thereto and review of
any such determination. Such procedures shall be set forth in an appendix to
these By-laws and shall be deemed for all purposes to be a part hereof.
(I) For purposes of this section,
(1) "Change of Control" means any of the following:
9
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13 (d)(3) or 14(d)(2) of the Exchange Act)(a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Corporation (the "Outstanding Corporation Common Stock")
or (ii) the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this subparagraph (a), the following acquisitions shall not
constitute a Change of Control: (w) any acquisition directly from the
Corporation, (x) any acquisition by the Corporation, (y) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation or (z) any
acquisition pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Paragraph 13(I)(1); or
(b) Individuals who, as of the date of the Distribution,
constitute the Board of Directors (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors; provided, however,
that any individual becoming a director subsequent to that date whose election,
or nomination for election by the Corporation's stockholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board of Directors; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Corporation or the acquisition of assets of another entity (a
"Corporate Transaction"), in each case, unless, following such Corporate
Transaction, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to such
Corporate Transaction beneficially own, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Corporation or all or
substantially all of the Corporation's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related trust) of the
Corporation or of such corporation resulting from such Corporate Transaction)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Corporate Transaction and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
Corporate Transaction were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of Directors,
providing for such Corporate Transaction; or
(d) Approval by the Corporation's stockholders of a
complete liquidation or dissolution of the Corporation.
10
(3) "Disinterested Director" means a director of the
Corporation who is not and was not a party to an action, suit or proceeding in
respect of which indemnification is sought by a director, officer, employee or
agent.
(4) "Independent Counsel" means a law firm, or a member
of a law firm, that (i) is experienced in matters of corporation law; (ii)
neither presently is, nor in the past five years has been, retained to represent
the Corporation, the director, officer, employee or agent claiming
indemnification or any other party to the action, suit or proceeding giving rise
to a claim for indemnification under this section, in any matter material to the
Corporation, the claimant or any such other party, and (iii) would not, under
applicable standards of professional conduct then prevailing, have a conflict of
interest in representing either the Corporation or such director, officer,
employee or agent in an action to determine the Corporation's or such person's
rights under this section.
(J) The indemnification and advancement of expenses herein
provided, or granted pursuant hereto, shall not be deemed exclusive of any other
rights to which any of those indemnified or eligible for advancement of expenses
may be entitled under any agreement, vote of stockholders or Disinterested
Directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
person. Notwithstanding any amendment, alteration or repeal of this section or
any of its provisions, or of any of the procedures established by the Board of
Directors pursuant to subsection (H) hereof, any person who is or was a
director, officer, employee or agent of the Corporation or any of its
majority-owned subsidiaries or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of any partnership, joint venture, employee benefit plan or other enterprise
shall be entitled to indemnification in accordance with the provisions hereof
and thereof with respect to any action taken or omitted prior to such amendment,
alteration or repeal except to the extent otherwise required by law.
(K) No indemnification shall be payable pursuant to this
section with respect to any action against the Corporation commenced by an
officer, director, employee or agent unless the Board of Directors shall have
authorized the commencement thereof or unless and to the extent that this
section or the procedures established pursuant to subsection (H) shall
specifically provide for indemnification of expenses relating to the enforcement
of rights under this section and such procedures.
SECTION 15 Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of any
partnership, joint venture, trust, employee benefit plan or other enterprise
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether or
not the Corporation would have the power or the obligation to indemnify such
person against such liability under the provisions of Section 14 of this Article
III.
ARTICLE IV
COMMITTEES
SECTION 1 Appointment and Powers. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more directors of the
Corporation (or in the case of a special-purpose committee, one or
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more directors of the Corporation), which, to the extent provided in said
resolution or in these By-laws and not inconsistent with Section 141 of the
Delaware General Corporation Law, as amended, shall have and may exercise the
powers of the Board of Directors in the management of the business and affairs
of the Corporation, and may authorize the seal of the Corporation to be affixed
to all papers which may require it. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.
SECTION 2 Term of Office and Vacancies. Each member of a committee
shall continue in office until a director to succeed him or her shall have been
elected and shall have qualified, or until he or she ceases to be a director or
until he or she shall have resigned or shall have been removed in the manner
hereinafter provided. Any vacancy in a committee shall be filled by the vote of
a majority of the whole Board of Directors at any regular or special meeting
thereof.
SECTION 3 Alternates. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee.
SECTION 4 Organization. Unless otherwise provided by the Board of
Directors, each committee shall appoint a chairman. Each committee shall keep a
record of its acts and proceedings and report the same from time to time to the
Board of Directors.
SECTION 5 Resignations. Any regular or alternate member of a
committee may resign at any time by giving written notice to the Chairman of the
Board, the Chief Executive Officer or the Secretary of the Corporation. Such
resignation shall take effect at the time of the receipt of such notice or at
any later time specified therein, and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 6 Removal. Any regular or alternate member of a committee may
be removed with or without cause at any time by resolution passed by a majority
of the whole Board of Directors at any regular or special meeting.
SECTION 7 Meetings. Regular meetings of each committee, of which no
notice shall be necessary, shall be held on such days and at such places as the
chairman of the committee shall determine or as shall be fixed by a resolution
passed by a majority of all the members of such committee. Special meetings of
each committee will be called by the Secretary at the request of any two members
of such committee, or in such other manner as may be determined by the
committee. Notice of each special meeting of a committee shall be mailed to each
member thereof at least two days before the meeting or shall be given personally
or by telephone or other electronic transmission at least one day before the
meeting. Every such notice shall state the time and place, but need not state
the purposes of the meeting. No notice of any meeting of a committee shall be
required to be given to any alternate.
SECTION 8 Quorum and Manner of Acting. Unless otherwise provided by
resolution of the Board of Directors, a majority of a committee (including
alternates when acting in lieu of regular members of such committee) shall
constitute a quorum for the transaction of business and the act of a majority of
those present at a meeting at which a quorum is present shall be the act of such
committee. The members of each committee shall act only as a committee and the
individual members shall have no power as such.
SECTION 9 Compensation. Each regular or alternate member of a
committee shall be paid such compensation, if any, as shall be fixed by the
Board of Directors.
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ARTICLE V
OFFICERS
SECTION 1 Officers. The officers of the Corporation shall be a Chief
Executive Officer, a President, one or more Vice Presidents (one or more of whom
may be Executive Vice Presidents, Senior Vice Presidents or otherwise as may be
designated by the Board), a Secretary and a Treasurer, all of whom shall be
elected by the Board of Directors. Any two or more offices may be held by the
same person. The Board of Directors may also from time to time elect such other
officers as it deems necessary.
SECTION 2 Term of Office. Each officer shall hold office until his or
her successor shall have been duly elected and qualified in his or her stead, or
until his or her death or until he or she shall have resigned or shall, have
been removed in the manner hereinafter provided.
SECTION 3 Additional Officers; Agents. The Chief Executive Officer or
the President may from time to time appoint and remove such additional officers
and agents as may be deemed necessary. Such persons shall hold office for such
period, have such authority, and perform such duties as provided in these
By-laws or as the Chief Executive Officer or the President may from time to time
prescribe. The Board of Directors or the Chief Executive Officer or the
President may from time to time authorize any officer to appoint and remove
agents and employees and to prescribe their powers and duties.
SECTION 4 Salaries. Unless otherwise provided by resolution passed by
a majority of the whole Board, the salaries of all officers elected by the Board
of Directors shall be fixed by the Board of Directors.
SECTION 5 Removal. Except where otherwise expressly provided in a
contract authorized by the Board of Directors, any officer may be removed,
either with or without cause, by the vote of a majority of the Board at any
regular or special meeting or, except in the case of an officer elected by the
Board, by any superior officer upon whom the power of removal may be conferred
by the Board or by these By-laws.
SECTION 6 Resignations. Any officer elected by the Board of Directors
may resign at any time by giving written notice to the Chairman of the Board,
the Chief Executive Officer, the President or the Secretary. Any other officer
may resign at any time by giving written notice to the Chief Executive Officer
or the President. Any such resignation shall take effect at the date of receipt
of such notice or at any later time specified therein, and unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
SECTION 7 Vacancies. A vacancy in any office because of death,
resignation, removal or otherwise, shall be filled for the unexpired portion of
the term in the manner provided hi these By-laws for regular election or
appointment to such office.
SECTION 8 Chief Executive Officer. Subject to the control of the
Board of Directors, the Chief Executive Officer shall have general and overall
charge of the business and affairs of the Corporation and of its officers. The
Chief Executive Officer shall keep the Board of Directors appropriately informed
on the business and affairs of the Corporation. The Chief Executive Officer
shall preside at all meetings of the stockholders and shall enforce the
observance of the rules of order for the meetings of the stockholders and of the
By-laws of the Corporation.
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SECTION 9 President. The President shall be the chief operating
officer of the Corporation and, subject to the control of the Chief Executive
Officer, shall direct and be responsible for the operation of the business and
affairs of the Corporation. The President shall keep the Chief Executive Officer
and the Board of Directors appropriately informed on the business and affairs of
the Corporation. In the case of the absence or disability of the Chief Executive
Officer, the President shall perform all the duties and functions and execute
all the powers of, and be subject to all the restrictions upon, the Chief
Executive Officer.
SECTION 10 Executive and Senior Vice Presidents. One or more Executive
or Senior Vice Presidents shall, subject to the control of the Chief Executive
Officer, have lead accountability for components or functions of the Corporation
as and to the extent designated by the Chief Executive Officer. Each Executive
or Senior Vice President shall keep the Chief Executive Officer appropriately
informed on the business and affairs of the designated components or functions
of the Corporation.
SECTION 11 Vice Presidents. The Vice Presidents shall perform such
duties as may from time to time be assigned to them or any of them by the Chief
Executive Officer.
SECTION 12 Secretary. The Secretary shall keep or cause to be kept in
books provided for the purpose the minutes of the meetings of the stockholders,
of the Board of Directors and of any committee constituted pursuant to Article
IV of these By-laws. The Secretary shall be custodian of the corporate seal and
see that it is affixed to all documents as required and attest the same. The
Secretary shall perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him or her.
SECTION 13 Assistant Secretaries. At the request of the Secretary, or
in the Secretary's absence or disability, the Assistant Secretary designated by
the Secretary shall perform all the duties of the Secretary and, when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
Secretary. The Assistant Secretaries shall perform such other duties as from
time to time may be assigned to them.
SECTION 14 Treasurer. The Treasurer shall have charge of and be
responsible for the receipt, disbursement and safekeeping of all funds and
securities of the Corporation. The Treasurer shall deposit all such funds in the
name of the Corporation in such banks, trust companies or other depositories as
shall be selected in accordance with the provisions of these By-laws. From time
to time and whenever requested to do so, the Treasurer shall render statements
of the condition of the finances of the Corporation to the Board of Directors.
The Treasurer shall perform all the duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him or her.
SECTION 15 Assistant Treasurers. At the request of the Treasurer, or
in the Treasurer's absence or disability, the Assistant Treasurer designated by
the Treasurer shall perform all the duties of the Treasurer and, when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
Treasurer. The Assistant Treasurers shall perform such other duties as from time
to time may be assigned to them.
SECTION 16 Certain Agreements. The Board of Directors shall have power
to authorize or direct the proper officers of the Corporation, on behalf of the
Corporation, to enter into valid and binding agreements in respect of
employment, incentive or deferred compensation, stock options, and similar or
related matters, notwithstanding the fact that a person with whom the
Corporation so contracts may be a member of its Board of Directors. Any such
agreement may validly and
14
lawfully bind the Corporation for a term of more than one year, in accordance
with its terms, notwithstanding the fact that one of the elements of any such
agreement may involve the employment by the Corporation of an officer, as such,
for such term.
ARTICLE VI
AUTHORIZATIONS
SECTION 1 Contracts. The Board of Directors, except as otherwise
provided in these By-laws, may authorize any officer, employee or agent of the
Corporation to enter into any contract or execute and deliver any instrument in
the name of and on behalf of the Corporation, and such authority may be general
or confined to specific instances.
SECTION 2 Loans. No loan shall be contracted on behalf of the
Corporation and no negotiable paper shall be issued in its name, unless
authorized by the Board of Directors.
SECTION 3 Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers, employee or
employees, of the Corporation as shall from time to time be determined in
accordance with authorization of the Board of Directors.
SECTION 4 Deposits. All funds of the Corporation shall be deposited
from time to time to the credit of the Corporation in such banks, trust
companies or other depositories as the Board of Directors may from time to time
designate, or as may be designated by any officer or officers of the Corporation
to whom such power may be delegated by the Board, and for the purpose of such
deposit the officers and employees who have been authorized to do so in
accordance with the determinations of the Board may endorse, assign and deliver
checks, drafts, and other orders for the payment of money which are payable to
the order of the Corporation.
SECTION 5 Proxies. Except as otherwise provided in these By-laws or
in the Certificate of Incorporation, and unless otherwise provided by resolution
of the Board of Directors, the Chief Executive Officer or any other officer may
from time to time appoint an attorney or attorneys or agent or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise in
any other corporation any of whose stock or other securities may be held by the
Corporation, at meetings of the holders of the stock or other securities of such
other corporations, or to consent in writing to any action by such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such vote or giving such consent, and may execute or cause to
be executed in the name and on behalf of the Corporation and under its corporate
seal, or otherwise, all such written proxies or other instruments as such
officer may deem necessary or proper in the premises.
ARTICLE VII
SHARES AND THEIR TRANSFER
SECTION 1 Shares of Stock. Certificates for shares of the stock of
the Corporation shall be in such form as shall be approved by the Board of
Directors. They shall be numbered in the order of their issue, by class and
series, and shall be signed by the Chief Executive Officer or a Vice President,
and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary, of the Corporation. If a share certificate is countersigned (1) by a
transfer agent other than
15
the Corporation or its employee, or (2) by a registrar other than the
Corporation or its employee, any other signature on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a share certificate shall have
ceased to be such officer, transfer agent, or registrar before such certificate
is issued, it may be issued by the Corporation with the same effect as if such
person were such officer, transfer agent, or registrar at the date of issue. The
Board of Directors may by resolution or resolutions provide that some or all of
any or all classes or series of the shares of stock of the Corporation shall be
uncertificated shares. Notwithstanding the preceding sentence, every holder of
uncertificated shares, upon request, shall be entitled to receive from the
Corporation a certificate representing the number of shares registered in such
stockholder's name on the books of the Corporation.
SECTION 2 Record Ownership. A record of the name and address of each
holder of the shares of the Corporation, the number of shares held by such
stockholder, the number or numbers of any share certificate or certificates
issued to such stockholder and the number of shares represented thereby, and the
date of issuance of the shares held by such stockholder shall be made on the
Corporation's books. The Corporation shall be entitled to treat the holder of
record of any share of stock (including any holder registered in a book-entry or
direct registration system maintained by the Corporation or a transfer agent or
a registrar designated by the Board of Directors) as the holder in fact thereof
and accordingly shall not be bound to recognize any equitable or other claim to
or interest in such share on the part of any other person, whether or not it
shall have express or other notice thereof, except as required by law.
SECTION 3 Transfer of Stock. Shares of stock shall be transferable on
the books of the Corporation by the holder of record of such stock in person or
by such person's attorney or other duly constituted representative, pursuant to
applicable law and such rules and regulations as the Board of Directors shall
from time to time prescribe. Any shares represented by a certificate shall be
transferable upon surrender of such certificate with an assignment endorsed
thereon or attached thereto duly executed and with such guarantee of signature
as the Corporation may reasonably require.
SECTION 4 Lost, Stolen and Destroyed Certificates. The Corporation
may issue a new certificate of stock or may register uncertificated shares, if
then authorized by the Board of Directors, in the place of any certificate
theretofore issued by it, alleged to have been lost, stolen or destroyed, and
the Corporation may require the owner of the lost, stolen or destroyed
certificate, or such person's legal representative, to give the Corporation a
bond sufficient to indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such certificate, the
issuance of such new certificate or the registration of such uncertificated
shares.
SECTION 5 Transfer Agent and Registrar; Regulations. The Corporation
shall, if and whenever the Board of Directors shall so determine, maintain one
or more transfer offices or agencies, each in charge of a transfer agent
designated by the Board of Directors, where the shares of the stock of the
Corporation shall be directly transferable, and also one or more registry
offices, each in charge of a registrar designated by the Board of Directors,
where such shares of stock shall be registered, and no certificate for shares of
the stock of the Corporation, in respect of which a registrar and transfer agent
shall have been designated, shall be valid unless countersigned by such transfer
agent and registered by such registrar. The Board of Directors may also make
such additional rules and regulations as it may deem expedient concerning the
issue, transfer and registration of shares of stock of the Corporation and
concerning the registration of pledges of uncertificated shares.
16
SECTION 6 Fixing Record Date. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. If no record
date is fixed, (1) the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (2) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 7 Examination of Books by Stockholders. The Board of
Directors shall, subject to the laws of the State of Delaware, have power to
determine from time to time, whether and to what extent and under what
conditions and regulations the accounts and books of the Corporation, or any of
them, shall be open to the inspection of the stockholders; and no stockholder
shall have any right to inspect any book or document of the Corporation, except
as conferred by the laws of the State of Delaware, unless and until authorized
so to do by resolution of the Board of Directors or of the stockholders of the
Corporation.
ARTICLE VIII
NOTICE
SECTION 1 Manner of Giving Written Notice. (A) Any notice in writing
required by law or by these By-laws to be given to any person shall be effective
if delivered personally, by depositing the same in the post office or letter box
in a postpaid envelope addressed to such person at such address as appears on
the books of the Corporation or by a form of electronic transmission consented
to by such person to whom the notice is to be given. Any such consent shall be
deemed revoked if (i) the Corporation is unable to deliver by electronic
transmission two consecutive notices given by the Corporation in accordance with
such consent and (ii) such inability becomes known to the Secretary or an
Assistant Secretary of the Corporation or to the transfer agent, or other person
responsible for the giving of notice; provided however, the inadvertent failure
to treat such inability as a revocation shall not invalidate any meeting or
other action.
(B) Notice by mail shall be deemed to be given at the time when
the same shall be mailed and notice by other means shall be deemed given when
actually delivered (and in the case of notice transmitted by a form of
electronic transmission, such notice shall be deemed given (i) if by facsimile
telecommunication, when directed to a number at which the stockholder has
consented to receive notice; (ii) if by electronic mail, when directed to an
electronic mail address at which the stockholder has consented to receive
notice; (iii) if by a posting on an electronic network together with separate
notice to the stockholder of such specific posting, upon the later of (a) such
posting and (b) the giving of such separate notice; and (iv) if by any other
form of electronic transmission, when directed to the stockholder).
SECTION 2 Waiver of Notice. Whenever any notice is required to be
given to any person, a waiver thereof by such person in writing or transmitted
by electronic means (and authenticated if
17
and as required by law), whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE IX
SEAL
SECTION 1 The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate Seal" and
"Delaware".
ARTICLE X
FISCAL YEAR
The fiscal year of the Corporation shall end on the Friday closest to
September 30 in each year.
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APPENDIX
PROCEDURES FOR SUBMISSION
AND DETERMINATION OF CLAIMS FOR INDEMNIFICATION
PURSUANT TO ARTICLE III, SECTION 14 OF THE BY-LAWS.
SECTION 1 Purpose. The Procedures for Submission and Determination
of Claims for Indemnification Pursuant to Article III, Section 14 of the By-laws
(the "Procedures") are to implement the provisions of Article III, Section 14 of
the By-laws of the Corporation (the "By-laws") in compliance with the
requirement of subsection (H) thereof.
SECTION 2 Definitions. For purposes of these Procedures:
(A) All terms that are defined in Article III, Section 14 of
the By-laws shall have the meanings ascribed to them therein when used in these
Procedures unless otherwise defined herein.
(B) "Expenses" include all reasonable attorneys' fees, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in, a
Proceeding; and shall also include such retainers as counsel may reasonably
require in advance of undertaking the representation of an Indemnitee in a
Proceeding.
(C) "Indemnitee" includes any person who was or is, or is
threatened to be made, a witness in or a party to any Proceeding by reason of
the fact that such person is or was a director, officer, employee or agent of
the Corporation or any of its majority-owned subsidiaries or is or was serving
at the request of the Corporation as a director, officer, employee or agent
(except in each of the foregoing situations to the extent any agreement,
arrangement or understanding of agency contains provisions that supersede or
abrogate indemnification under Article III, Section 14 of the By-laws) of
another corporation or of any partnership, joint venture, trust, employee
benefit plan or other enterprise.
(D) "Proceeding" includes any action, suit, arbitration,
alternative dispute resolution mechanism, investigation, administrative hearing
or any other proceeding, whether civil, criminal, administrative or
investigative, except one initiated by an Indemnitee unless the Board of
Directors shall have authorized the commencement thereof.
SECTION 3 Submission and Determination of Claims.
(A) To obtain indemnification or advancement of Expenses under
Article III, Section 14 of the By-laws, an Indemnitee shall submit to the
Secretary of the Corporation a written request therefor, including therein or
therewith such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to permit a determination as to whether
and what extent the Indemnitee is entitled to indemnification or advancement of
Expenses, as the case may be. The Secretary shall, promptly upon receipt of a
request for indemnification, advise the Board of Directors (if the Indemnitee is
a present or former director or officer of the Corporation) or the officer of
the Corporation authorized to make the determination as to whether an Indemnitee
is entitled to indemnification (if the Indemnitee is not a present or former
director or officer of the Corporation) thereof in writing if a determination in
accordance with Article III, Section 14(E) of the By-laws is required.
(B) Upon written request by an Indemnitee for indemnification
pursuant to Section 3 (A) hereof, a determination with respect to the
Indemnitee's entitlement thereto in the specific case, if required by the
By-laws, shall be made in accordance with Article III, Section 14(E) of the
By-laws, and, if it is so determined that the Indemnitee is entitled to
indemnification, payment to the Indemnitee shall be made within ten days after
such determination. The Indemnitee shall cooperate with the person, persons or
entity making such determination, with respect to the Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity upon
reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to the Indemnitee and reasonably necessary to such determination.
(C) If entitlement to indemnification is to be made by
Independent Counsel pursuant to Article III, Section 14(E) of the By-laws, the
Independent Counsel shall be selected as provided in this Section 3(C). If a
Change of Control shall not have occurred, the Independent Counsel shall be
selected by the Board of Directors, and the Corporation shall give written
notice to the Indemnitee advising the Indemnitee of the identity of the
Independent Counsel so selected. If a Change of Control shall have occurred, the
Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee
shall request that such selection be made by the Board of Directors, in which
event the immediately preceding sentence shall apply), and the Indemnitee shall
give written notice to the Corporation advising it of the identity of the
Independent Counsel so selected. In either event, the Indemnitee or the
Corporation, as the case may be, may, within seven days after such written
notice of selection shall have been given, deliver to the Corporation or to the
Indemnitee, as the case may be, a written objection to such selection. Such
objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of "Independent Counsel" as defined in
Article III, Section 14 of the By-laws, and the objection shall set forth with
particularity the factual basis of such assertion. If such written objection is
made, the Independent Counsel so selected may not serve as Independent Counsel
unless and until a court has determined that such objection is without merit.
If, within twenty days after the next regularly scheduled Board of Directors
meeting following submission by the Indemnitee of a written request for
indemnification pursuant to Section 3 (A) hereof, no Independent Counsel shall
have been selected and not objected to, either the Corporation or the Indemnitee
may petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection which shall have been
made by the Corporation or the Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by the Court or by such other person as the Court shall
designate, and the person with respect to whom an objection is favorably
resolved or the person so appointed shall act as Independent Counsel under
Article III, Section 14(E) of the By-laws. The Corporation shall pay any and all
reasonable fees and expenses (including without limitation any advance retainers
reasonably required by counsel) of Independent Counsel incurred by such
Independent Counsel in connection with acting pursuant to Article III, Section
14(E) of the By-laws, and the Corporation shall pay all reasonable fees and
expenses (including without limitation any advance retainers reasonably required
by counsel) incident to the procedures of Article III, Section 14(E) of the
By-laws and this Section 3(C), regardless of the manner in which Independent
Counsel was selected or appointed. Upon the delivery of its opinion pursuant to
Article III, Section 14 of the By-laws or, if earlier, the due commencement of
any judicial proceeding or arbitration pursuant to Section 4(A)(3) of these
Procedures, Independent Counsel shall be discharged and relieved of any further
responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
(D) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification under the By-laws,
the person, persons or entity making such determination shall presume that an
Indemnitee is entitled to indemnification under the By-laws
2
if the Indemnitee has submitted a request for indemnification in accordance with
Section 3 (A) hereof, and the Corporation shall have the burden of proof to
overcome that presumption in connection with the making by any person, persons
or entity of any determination contrary to that presumption.
SECTION 4 Review and Enforcement of Determination.
(A) In the event that (1) advancement of Expenses is not timely
made pursuant to Article III, Section 14 (G) of the By-laws, (2) payment of
indemnification is not made pursuant to Article III, Section 14(C) or (D) of the
By-laws within ten days after receipt by the Corporation of written request
therefor, (3) a determination is made pursuant to Article III, Section 14(E) of
the By-laws that an Indemnitee is not entitled to indemnification under the
By-laws, (4) the determination of entitlement to indemnification is to be made
by Independent Counsel pursuant to Article III, Section 14(E) of the By-laws and
such determination shall not have been made and delivered in a written opinion
within ninety days after receipt by the Corporation of the written request for
indemnification, or (5) payment of indemnification is not made within ten days
after a determination has been made pursuant to Article III, Section 14(E) of
the By-laws that an Indemnitee is entitled to indemnification or within ten days
after such determination is deemed to have been made pursuant to Article III,
Section 14(F) of the By-laws, the Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other
court of competent jurisdiction, of the Indemnitee's entitlement to such
indemnification or advancement of Expenses. Alternatively, the Indemnitee, at
his or her option, may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association. The
Indemnitee shall commence such proceeding seeking an adjudication or an award in
arbitration within one year following the date on which the Indemnitee first has
the right to commence such proceeding pursuant to this Section 4(A). The
Corporation shall not oppose the Indemnitee's right to seek any such
adjudication or award in arbitration.
(B) In the event that a determination shall have been made
pursuant to Article III, Section 14 (E) of the By-laws that an Indemnitee is not
entitled to indemnification, any judicial proceeding or arbitration commenced
pursuant to this Section 4 shall be conducted in all respects as a de novo
trial, or arbitration, on the merits and the Indemnitee shall not be prejudiced
by reason of that adverse determination. If a Change of Control shall have
occurred, the Corporation shall have the burden of proving in any judicial
proceeding or arbitration commenced pursuant to this Section 4 that the
Indemnitee is not entitled to indemnification or advancement of Expenses, as the
case may be.
(C) If a determination shall have been made or deemed to have
been made pursuant to Article III, Section 14 (E) or (F) of the By-laws that an
Indemnitee is entitled to indemnification, the Corporation shall be bound by
such determination in any judicial proceeding or arbitration commenced pursuant
to this Section 4, absent (1) a misstatement or omission of a material fact in
connection with the Indemnitee's request for indemnification, or (2) a
prohibition of such indemnification under applicable law.
(D) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 4 that the
procedures and presumptions of these Procedures are not valid, binding and
enforceable, and shall stipulate in any such judicial proceeding or arbitration
that the Corporation is bound by all the provisions of these Procedures.
(E) In the event that an Indemnitee, pursuant to this Section
4, seeks to enforce the Indemnitee's rights under, or to recover damages for
breach of, Article III, Section 14 of the
3
By-laws or these Procedures in a judicial proceeding or arbitration, the
Indemnitee shall be entitled to recover from the Corporation, and shall be
indemnified by the Corporation against, any and all expenses (of the types
described in the definition of Expenses in Section 2 of these Procedures)
actually and reasonably incurred in such judicial proceeding or arbitration, but
only if the Indemnitee prevails therein. If it shall be determined in such
judicial proceeding or arbitration that the Indemnitee is entitled to receive
part but not all of the indemnification or advancement of Expenses sought, the
expenses incurred by the Indemnitee in connection with such judicial proceeding
or arbitration shall be appropriately prorated.
SECTION 5 Amendments. These Procedures may be amended at any time and
from time to time in the same manner as any By-law of the Corporation in
accordance with the Certificate of Incorporation; provided, however, that
notwithstanding any amendment, alteration or repeal of these Procedures or any
provision hereof, any Indemnitee shall be entitled to utilize these Procedures
with respect to any claim for indemnification arising out of any action taken or
omitted prior to such amendment, alteration or repeal except to the extent
otherwise required by law.
4
EX-4.4
Exhibit 4.4
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT.
SKYWORKS SOLUTIONS, INC.
NO. 001
1.25% Convertible Subordinated Notes due 2010
No. CUSIP: 83088M AE2
No. ISIN: US83088MAE21
Skyworks Solutions, Inc., a Delaware corporation (the Company, which term shall
include any successor Person under the Indenture referred to on the attached Terms of the Notes),
promises to pay to, or registered assigns, the principal amount of one hundred million dollars
($100,000,000) on March 1, 2010, and to pay interest thereon, in arrears, from and including the
most recent Interest Payment Date to which interest has been paid or duly provided for (or if no
interest has been paid, from, and including March 2, 2007), to, but excluding, March 1 and
September 1 of each year (each, an Interest Payment Date), beginning on September 1,
2007, at a rate of 1.25% per annum until the principal hereof is paid or made available for payment
at March 1, 2010, or upon acceleration, or until such date on which this security is converted or
purchased as provided herein. Except as otherwise provided in the Indenture and herein, the
interest so payable and punctually paid or duly provided for on any Interest Payment Date shall, as
provided in the Indenture (as hereinafter defined), be paid to the Person in whose name this
Security is registered at the close of business on the regular record date for such interest, which
shall be the February 15 or August 15 (whether or not a Business Day), as the case may be,
immediately preceding the relevant Interest Payment Date (each, an Interest Payment Record
Date).
Reference is hereby made to the further provisions of this Security set forth on the attached
Terms of the Notes, which further provisions shall for all purposes have the same effect as if
set forth at this place.
[Signature page follows]
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
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SKYWORKS SOLUTIONS, INC.,
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By: |
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Name: |
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Title: |
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Trustees Certificate of Authentication: This is one of the Securities referred to in the within-mentioned Indenture.
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U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Trustee,
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By: |
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Authorized Signatory |
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A-1-4
SKYWORKS SOLUTIONS, INC.
1.25% CONVERTIBLE SUBORDINATED NOTES DUE 2010
This Security is one of a duly authorized issue of 1.25% Convertible Subordinated Notes due
2010 (the Securities) of the Company issued under an Indenture, dated as of March 2, 2007
(the Indenture), between the Company and U.S. Bank National Association, as trustee (the
Trustee). The terms of the Security include those stated in the Indenture, those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
TIA), and those set forth in this Security. This Security is subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of all such terms. To the
extent permitted by applicable law, if any provision of this Security conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture
unless otherwise indicated.
1. Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day
months as set forth on the face of the Security.
If the Holder elects to require the Company to purchase this Security pursuant to paragraph 5
of this Security, on a date that is after an Interest Payment Record Date but on or before the
corresponding Interest Payment Date, interest and Additional Interest, if any, accrued and unpaid
hereon to, but not including, the applicable Fundamental Change Purchase Date shall be paid to the
same Holder to whom the Company pays the principal of this Security. Interest and Additional
Interest, if any, accrued and unpaid hereon at the Final Maturity Date also shall be paid to the
same Holder to whom the Company pays the principal of this Security.
Interest and Additional Interest, if any, on Securities converted after the close of business
on an Interest Payment Record Date but prior to the corresponding Interest Payment Date shall be
paid, on such Interest Payment Date, to the Holder of the Securities as of the close of business on
the Interest Payment Record Date but, upon conversion, the converting Holder must pay the Company
an amount equal to the interest that shall be payable on such Interest Payment Date. No such
payment need be made with respect to Securities converted after an Interest Payment Record Date and
prior to the corresponding Interest Payment Date (1) if any overdue interest exists at the time of
conversion with respect to the Securities being converted, but only to the extent of the amount of
such overdue interest, or (2) if the Holder converts after the close of business on the last
Interest Payment Record date prior to March 1, 2010 (the Final Maturity Date).
Except as otherwise stated herein, any reference herein to interest accrued or payable as of
any date shall include Additional Interest, if any, accrued or payable on such date as provided in
the Indenture or the Registration Rights Agreement.
2. Method of Payment.
Payment of the principal of, and interest on, the Securities shall be made at the office of
the Paying Agent in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. The Holder must surrender this Security
to a Paying Agent to collect payment of principal. Payment of interest on Certificated Securities
shall be made by check mailed to the address of the Person entitled thereto as such address appears
in the Register; provided, however, that Holders with Securities in an aggregate
principal amount in excess of $2.0 million shall be paid, at their written election, by wire
transfer of immediately available funds. Notwithstanding the foregoing, so long as the Securities
are registered in the name of a Depositary or its nominee, all payments with respect to the
Securities shall be made by wire transfer of immediately available funds to the account of the
Depositary or its nominee.
3. Paying Agent, Registrar, Conversion Agent.
Initially, the Trustee shall act as Paying Agent, Registrar and Conversion Agent. The Company
or any Affiliate of the Company may act as Paying Agent, Registrar or Conversion Agent, subject to
the terms of the Indenture.
4. Indenture.
The Securities are general subordinated unsecured obligations of the Company initially limited
to $100,000,000 aggregate principal amount. The Company may, without consent of the
Securityholders, issue additional Securities under the Indenture with the same terms as the notes
offered hereby in an unlimited aggregate principal amount. The Indenture does not limit other debt
of the Company, senior or subordinated or secured or unsecured.
5. Purchase by the Company Upon a Fundamental Change.
Subject to the terms and conditions of the Indenture, the Company shall become obligated to
purchase for Cash, at the option of any Holder, all or any portion of the Securities held by such
Holder upon a Fundamental Change in multiples of $1,000 at the Fundamental Change Purchase Price.
To exercise such right, a Holder shall deliver to the Paying Agent a Fundamental Change Purchase
Notice containing the information set forth in the Indenture, at any time prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change Purchase Date, and
shall deliver the Securities to the Paying Agent as set forth in the Indenture.
Holders have the right to withdraw any Fundamental Change Purchase Notice by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.
If Cash sufficient to pay the Fundamental Change Purchase Price of all Securities or portions
thereof to be purchased with respect to a Fundamental Change Purchase Date is deposited with the
Paying Agent by 10:00 a.m., New York City time, on the Fundamental Change Purchase Date and the
Paying Agent is not prohibited from paying such money to the Holders on such date pursuant to the
terms of the Indenture, then on and after such Fundamental Change Purchase Date such Securities
shall cease to be outstanding and interest on such Securities shall cease to accrue, whether or not
such Securities are delivered by their Holders to the Paying Agent, and the Holders thereof shall
have no rights as such other than the right to receive the Fundamental Change Purchase Price upon
delivery of such Securities to the Paying Agent.
6. Conversion.
Subject to the terms of the Indenture, prior to the Final Maturity Date, Holders may surrender
Securities, in whole or in part, for conversion at the Conversion Price then in effect. Subject to
the terms and conditions of the Indenture, a Holder of a Security may convert the Security (or any
portion thereof equal to $1,000 principal amount or any integral multiple of $1,000 principal
amount in excess thereof) into Cash, shares of Common Stock or a combination
of Cash and shares of Common Stock, at the Companys option in accordance with Section
4.13 of the Indenture; provided, however, that, if a Fundamental Change Purchase Notice with
respect to a Security is delivered in accordance with the Indenture, such Security shall not be
convertible unless such Fundamental Change Purchase Notice is duly withdrawn in accordance with the
Indenture or unless there shall be a default in the payment of the Fundamental Change Purchase
Price, in which case the conversion right with respect to such Security shall terminate immediately
when such default is cured and such Security is purchased in accordance with the Indenture.
The initial Conversion Rate is 105.0696 shares of Common Stock per $1,000 principal amount of
Securities, which represents an initial Conversion Price of approximately $9.52 per share of Common
Stock. The Conversion Rate is subject to adjustment under certain circumstances as provided in the
Indenture, including, with respect to Securities surrendered for conversion, upon a Fundamental
Change. No fractional shares will be issued upon conversion.
To convert a Security, a Holder must (i) if the Security is represented by a Global Security,
comply with the Applicable Procedures, or (ii) if the Security is represented by a Certificated
Security, (a) deliver to the Conversion Agent a duly signed and completed Conversion Notice set
forth below, (b) deliver the Security to the Conversion Agent, (c) deliver to the Conversion Agent
appropriate endorsements and transfer documents if required by the Conversion Agent and (d) pay any
tax or duty, if required pursuant to the Indenture. A Holder may convert a portion of a Security
equal to $1,000 or any integral multiple thereof.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain taxes, assessments or other
governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of such Security for all
purposes.
9. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written request any Cash or
securities held by them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the Cash or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
10. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Securities or the Indenture may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal amount of the
Securities and the 2012 Securities then outstanding; provided, however, that (i) if any amendment,
supplement or waiver would by its terms disproportionately and adversely affect the Securities,
such amendment, supplement or waiver will also require the consent of Holders of at
least a majority in aggregate principal amount of the Securities then outstanding and (ii) if
any amendment, supplement or waiver would only affect the Securities or the 2012 Securities, as the
case may be, such amendment, supplement or waiver will only require the consent of Holders of at
least a majority in aggregate principal amount of the Securities or the 2012 Securities, as
applicable, then outstanding. Subject to certain exceptions, an existing Default or Event of
Default with respect to the Securities and its consequences or compliance with any provision of the
Securities or the Indenture may be waived with the consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding. Subject to the terms of the
Indenture, without the consent of or notice to any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Securities to, among other things, cure any ambiguity, defect or
inconsistency or make any change that does not adversely affect in any material respect the legal
rights under the Indenture of any Holder.
11. Defaults and Remedies.
If any Event of Default other than as a result of certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of all the Securities then
outstanding plus accrued and unpaid interest may be declared due and payable in the manner and with
the effect provided in the Indenture. If an Event of Default occurs as a result of certain events
of bankruptcy, insolvency or reorganization of the Company, the principal amount of the Securities
plus accrued and unpaid interest shall become due and payable immediately without any declaration
or other act on the part of the Trustee or any Holder, all to the extent provided in the Indenture.
12. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it were not the
Trustee.
13. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement of the Company contained in
the Indenture, or in this Security, or because of any indebtedness evidenced thereby or hereby,
shall be had against any incorporator, as such, or against any past, present or future employee,
stockholder, officer or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issuance of the Securities.
14. Authentication.
This Security shall not be valid until the Trustee or an authenticating agent manually signs
the certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA
(= Uniform Gifts to Minors Act).
16. Indenture to Control; Governing Law.
To the extent permitted by applicable law, if any provision of this Security conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. This Security shall be governed by, and construed in accordance with, the laws of the
State of New York.
17. Copies of Indenture.
The Company shall furnish to any Holder, upon written request and without charge, a copy of
the Indenture. Requests may be made to: Skyworks Solutions, Inc., 20 Sylvan Road, Woburn, MA
01801, Fax no.: (781) 376-3310, Attention: General Counsel.
18. Registration Rights.
The Holders of the Securities are entitled to the benefits of a Registration Rights Agreement,
dated as of March 2, 2007, between the Company and the Initial Purchaser, including, in certain
circumstances, the receipt of Additional Interest upon a registration default (as defined in such
agreement).
19. Subordination.
The Securities are subordinated to Senior Indebtedness, as defined in the Indenture. To the
extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee to give it effect
and appoints the Trustee as attorney-in-fact for such purpose.
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges, purchases or conversions of a part of this Global Security have been
made:
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OR INCREASE |
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Insert assignees soc. sec. or tax ID no.)
(Print or type assignees name, address and zip code)
and irrevocably appoint the agent to transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Dated:
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Your Signature: |
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(Sign exactly as your name
appears on the other side of this
Security) |
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Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
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FORM OF CONVERSION NOTICE
To convert this Security into Cash, shares of Common Stock or a combination of Cash and shares
of Common Stock, as applicable and as provided in the Indenture, check the box o
To convert only part of this Security, state the principal amount to be converted (which must
be $1,000 or a multiple of $1,000):
If you want the stock certificate made out in another persons name, fill in the form below:
(Insert assignees soc. sec. or tax ID no.)
(Print or type assignees name, address and zip code)
The undersigned (the Applicant) hereby makes application for the issuance of record to the
name of the Applicant of shares of Common Stock.
Date:
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Your Signature: |
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(Sign exactly as your name appears on the
other side of this Security) |
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Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
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FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
U.S. Bank National Association, as Trustee
One Federal Street, 3rd Floor
Boston, MA 02110
Attn: Corporate Trust Administration
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Re: |
Skyworks Solutions, Inc. (the Company) |
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1.25% Convertible Subordinated Notes due 2010 |
This is a Fundamental Change Purchase Notice as defined in Section 3.1(c) of the
Indenture, dated as of March 2, 2007 (the Indenture), between the Company and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to
them in the Indenture.
Certificate No(s). of Securities:
I intend to deliver the following aggregate principal amount of Securities for purchase by the
Company pursuant to Article III of the Indenture (in multiples of $1,000):
$
I hereby agree that the Securities shall be purchased on the Fundamental Change Purchase Date
pursuant to the terms and conditions specified in paragraph 5 of the Securities and in the
Indenture.
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES
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Re: |
1.25% Convertible Subordinated Notes due 2010
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(the Securities) of Skyworks Solutions, Inc. |
This certificate relates to $ principal amount of Securities owned in
(check applicable box):
o book-entry or o definitive form by (the Transferor).
The Transferor has requested a Registrar or the Trustee to exchange or register the transfer
of such Securities. In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating
to the Securities as provided in Section 2.12 of the Indenture, dated as of March 2, 2007,
between Skyworks Solutions, Inc. and U.S. Bank National Association, as trustee (the Indenture),
and either the transfer of such Security is being made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the Securities Act) (check applicable
box) or the transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):
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Such Security is being transferred pursuant to an effective registration statement
under the Securities Act. |
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Such Security is being acquired for the Transferors own account, without transfer. |
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Such Security is being transferred to the Company or a Subsidiary (as defined in
the Indenture) of the Company. |
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Such Security is being transferred to a person the Transferor reasonably believes
is a qualified institutional buyer (as defined in Rule 144A or any successor
provision thereto (Rule 144A) under the Securities Act) to whom notice has been
given that the transfer is being made in reliance on such Rule 144A, in reliance on
Rule 144A. |
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Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements under the Securities Act in accordance with Rule
144 (or any successor thereto) (Rule 144) under the Securities Act. |
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Such Security is being transferred to a non-U.S. Person in an offshore transaction
in compliance with Rule 904 of Regulation S under the Securities Act (or any successor
thereto). |
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Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act (other than an exemption
referred to above). |
The Transferor acknowledges and agrees that, if the transferee will hold any such Securities
in the form of beneficial interests in a Global Security that is a restricted security within the
meaning of Rule 144 under the Securities Act, then such transfer can be made only (x) pursuant to
Rule 144A under the Securities Act to a transferee that the transferor reasonably believes is a
qualified institutional buyer, as defined in Rule 144A, or (y) pursuant to Regulation S under the
Securities Act.
Date:
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Signature(s) of Transferor |
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(If the registered owner is a
corporation, partnership or
fiduciary, the title person signing
on behalf of such registered owner
must be stated.) |
Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
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EX-4.5
Exhibit 4.5
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (DTC), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR
IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY EXCEPT AS PERMITTED
UNDER THE SECURITIES ACT.
SKYWORKS SOLUTIONS, INC.
NO. 002
1.50% Convertible Subordinated Notes due 2012
No. CUSIP: 83088M AG7
No. ISIN: US83088MAG78
Skyworks Solutions, Inc., a Delaware corporation (the Company, which term shall
include any successor Person under the Indenture referred to on the attached Terms of the Notes),
promises to pay to, or registered assigns, the principal amount of one hundred million dollars
($100,000,000) on March 1, 2012, and to pay interest thereon, in arrears, from and including the
most recent Interest Payment Date to which interest has been paid or duly provided for (or if no
interest has been paid, from, and including March 2, 2007), to, but excluding, March 1 and
September 1 of each year (each, an Interest Payment Date), beginning on September 1,
2007, at a rate of 1.50% per annum until the principal hereof is paid or made available for payment
at March 1, 2012, or upon acceleration, or until such date on which this security is converted or
purchased as provided herein. Except as otherwise provided in the Indenture and herein, the
interest so payable and punctually paid or duly provided for on any Interest Payment Date shall, as
provided in the Indenture (as hereinafter defined), be paid to the Person in whose name this
Security is registered at the close of business on the regular record date for such interest, which
shall be the February 15 or August 15 (whether or not a Business Day), as the case may be,
immediately preceding the relevant Interest Payment Date (each, an Interest Payment Record
Date).
Reference is hereby made to the further provisions of this Security set forth on the attached
Terms of the Notes, which further provisions shall for all purposes have the same effect as if
set forth at this place.
[Signature page follows]
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
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SKYWORKS SOLUTIONS, INC.,
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Name: |
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Title: |
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Trustees Certificate of Authentication: This is one of the Securities referred to in the
within-mentioned Indenture.
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U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity, but solely as Trustee,
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By: |
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Authorized Signatory |
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A-2-4
SKYWORKS SOLUTIONS, INC.
1.50% CONVERTIBLE SUBORDINATED NOTES DUE 2012
This Security is one of a duly authorized issue of 1.50% Convertible Subordinated Notes due
2012 (the Securities) of the Company issued under an Indenture, dated as of March 2, 2007
(the Indenture), between the Company and U.S. Bank National Association, as trustee (the
Trustee). The terms of the Security include those stated in the Indenture, those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
TIA), and those set forth in this Security. This Security is subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of all such terms. To the
extent permitted by applicable law, if any provision of this Security conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.
Capitalized terms used but not defined herein have the meanings assigned to them in the Indenture
unless otherwise indicated.
1. Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day
months as set forth on the face of the Security.
If the Holder elects to require the Company to purchase this Security pursuant to paragraph 5
of this Security, on a date that is after an Interest Payment Record Date but on or before the
corresponding Interest Payment Date, interest and Additional Interest, if any, accrued and unpaid
hereon to, but not including, the applicable Fundamental Change Purchase Date shall be paid to the
same Holder to whom the Company pays the principal of this Security. Interest and Additional
Interest, if any, accrued and unpaid hereon at the Final Maturity Date also shall be paid to the
same Holder to whom the Company pays the principal of this Security.
Interest and Additional Interest, if any, on Securities converted after the close of business
on an Interest Payment Record Date but prior to the corresponding Interest Payment Date shall be
paid, on such Interest Payment Date, to the Holder of the Securities as of the close of business on
the Interest Payment Record Date but, upon conversion, the converting Holder must pay the Company
an amount equal to the interest that shall be payable on such Interest Payment Date. No such
payment need be made with respect to Securities converted after an Interest Payment Record Date and
prior to the corresponding Interest Payment Date (1) if any overdue interest exists at the time of
conversion with respect to the Securities being converted, but only to the extent of the amount of
such overdue interest, or (2) if the Holder converts after the close of business on the last
Interest Payment Record date prior to March 1, 2012 (the Final Maturity Date).
Except as otherwise stated herein, any reference herein to interest accrued or payable as of
any date shall include Additional Interest, if any, accrued or payable on such date as provided in
the Indenture or the Registration Rights Agreement.
2. Method of Payment.
Payment of the principal of, and interest on, the Securities shall be made at the office of
the Paying Agent in such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. The Holder must surrender this Security
to a Paying Agent to collect payment of principal. Payment of interest on Certificated Securities
shall be made by check mailed to the address of the Person entitled thereto as such address appears
in the Register; provided, however, that Holders with Securities in an aggregate
principal amount in excess of $2.0 million shall be paid, at their written election, by wire
transfer of immediately available funds. Notwithstanding the foregoing, so long as the Securities
are registered in the name of a Depositary or its nominee, all payments with respect to the
Securities shall be made by wire transfer of immediately available funds to the account of the
Depositary or its nominee.
3. Paying Agent, Registrar, Conversion Agent.
Initially, the Trustee shall act as Paying Agent, Registrar and Conversion Agent. The Company
or any Affiliate of the Company may act as Paying Agent, Registrar or Conversion Agent, subject to
the terms of the Indenture.
4. Indenture.
The Securities are general subordinated unsecured obligations of the Company initially limited
to $100,000,000 aggregate principal amount. The Company may, without consent of the
Securityholders, issue additional Securities under the Indenture with the same terms as the notes
offered hereby in an unlimited aggregate principal amount. The Indenture does not limit other debt
of the Company, senior or subordinated or secured or unsecured.
5. Purchase by the Company Upon a Fundamental Change.
Subject to the terms and conditions of the Indenture, the Company shall become obligated to
purchase for Cash, at the option of any Holder, all or any portion of the Securities held by such
Holder upon a Fundamental Change in multiples of $1,000 at the Fundamental Change Purchase Price.
To exercise such right, a Holder shall deliver to the Paying Agent a Fundamental Change Purchase
Notice containing the information set forth in the Indenture, at any time prior to 5:00 p.m., New
York City time, on the Business Day immediately preceding the Fundamental Change Purchase Date, and
shall deliver the Securities to the Paying Agent as set forth in the Indenture.
Holders have the right to withdraw any Fundamental Change Purchase Notice by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.
If Cash sufficient to pay the Fundamental Change Purchase Price of all Securities or portions
thereof to be purchased with respect to a Fundamental Change Purchase Date is deposited with the
Paying Agent by 10:00 a.m., New York City time, on the Fundamental Change Purchase Date and the
Paying Agent is not prohibited from paying such money to the Holders on such date pursuant to the
terms of the Indenture, then on and after such Fundamental Change Purchase Date such Securities
shall cease to be outstanding and interest on such Securities shall cease to accrue, whether or not
such Securities are delivered by their Holders to the Paying Agent, and the Holders thereof shall
have no rights as such other than the right to receive the Fundamental Change Purchase Price upon
delivery of such Securities to the Paying Agent.
6. Conversion.
Subject to the terms of the Indenture, prior to the Final Maturity Date, Holders may surrender
Securities, in whole or in part, for conversion at the Conversion Price then in effect. Subject to
the terms and conditions of the Indenture, a Holder of a Security may convert the Security (or any
portion thereof equal to $1,000 principal amount or any integral multiple of $1,000 principal
amount in excess thereof) into Cash, shares of Common Stock or a combination
of Cash and shares of Common Stock, at the Companys option in accordance with Section
4.13 of the Indenture; provided, however, that, if a Fundamental Change Purchase Notice with
respect to a Security is delivered in accordance with the Indenture, such Security shall not be
convertible unless such Fundamental Change Purchase Notice is duly withdrawn in accordance with the
Indenture or unless there shall be a default in the payment of the Fundamental Change Purchase
Price, in which case the conversion right with respect to such Security shall terminate immediately
when such default is cured and such Security is purchased in accordance with the Indenture.
The initial Conversion Rate is 105.0696 shares of Common Stock per $1,000 principal amount of
Securities, which represents an initial Conversion Price of approximately $9.52 per share of Common
Stock. The Conversion Rate is subject to adjustment under certain circumstances as provided in the
Indenture, including, with respect to Securities surrendered for conversion, upon a Fundamental
Change. No fractional shares will be issued upon conversion.
To convert a Security, a Holder must (i) if the Security is represented by a Global Security,
comply with the Applicable Procedures, or (ii) if the Security is represented by a Certificated
Security, (a) deliver to the Conversion Agent a duly signed and completed Conversion Notice set
forth below, (b) deliver the Security to the Conversion Agent, (c) deliver to the Conversion Agent
appropriate endorsements and transfer documents if required by the Conversion Agent and (d) pay any
tax or duty, if required pursuant to the Indenture. A Holder may convert a portion of a Security
equal to $1,000 or any integral multiple thereof.
7. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000. A Holder may register the transfer of or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain taxes, assessments or other
governmental charges that may be imposed in relation thereto by law or permitted by the Indenture.
8. Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of such Security for all
purposes.
9. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written request any Cash or
securities held by them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the Cash or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
10. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Securities or the Indenture may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal amount of the
Securities and the 2010 Securities then outstanding; provided, however, that (i) if any amendment,
supplement or waiver would by its terms disproportionately and adversely affect the Securities,
such amendment, supplement or waiver will also require the consent of Holders of at
least a majority in aggregate principal amount of the Securities then outstanding and (ii) if
any amendment, supplement or waiver would only affect the Securities or the 2010 Securities, as the
case may be, such amendment, supplement or waiver will only require the consent of Holders of at
least a majority in aggregate principal amount of the Securities or the 2010 Securities, as
applicable, then outstanding. Subject to certain exceptions, an existing Default or Event of
Default with respect to the Securities and its consequences or compliance with any provision of the
Securities or the Indenture may be waived with the consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding. Subject to the terms of the
Indenture, without the consent of or notice to any Holder, the Company and the Trustee may amend or
supplement the Indenture or the Securities to, among other things, cure any ambiguity, defect or
inconsistency or make any change that does not adversely affect in any material respect the legal
rights under the Indenture of any Holder.
11. Defaults and Remedies.
If any Event of Default other than as a result of certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of all the Securities then
outstanding plus accrued and unpaid interest may be declared due and payable in the manner and with
the effect provided in the Indenture. If an Event of Default occurs as a result of certain events
of bankruptcy, insolvency or reorganization of the Company, the principal amount of the Securities
plus accrued and unpaid interest shall become due and payable immediately without any declaration
or other act on the part of the Trustee or any Holder, all to the extent provided in the Indenture.
12. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it were not the
Trustee.
13. No Recourse Against Others.
No recourse under or upon any obligation, covenant or agreement of the Company contained in
the Indenture, or in this Security, or because of any indebtedness evidenced thereby or hereby,
shall be had against any incorporator, as such, or against any past, present or future employee,
stockholder, officer or director, as such, of the Company or of any successor, either directly or
through the Company or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issuance of the Securities.
14. Authentication.
This Security shall not be valid until the Trustee or an authenticating agent manually signs
the certificate of authentication on the other side of this Security.
15. Abbreviations.
Customary abbreviations may be used in the name of the Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and UGMA
(= Uniform Gifts to Minors Act).
16. Indenture to Control; Governing Law.
To the extent permitted by applicable law, if any provision of this Security conflicts with
the express provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. This Security shall be governed by, and construed in accordance with, the laws of the
State of New York.
17. Copies of Indenture.
The Company shall furnish to any Holder, upon written request and without charge, a copy of
the Indenture. Requests may be made to: Skyworks Solutions, Inc., 20 Sylvan Road, Woburn, MA
01801, Fax no.: (781) 376-3310, Attention: General Counsel.
18. Registration Rights.
The Holders of the Securities are entitled to the benefits of a Registration Rights Agreement,
dated as of March 2, 2007, between the Company and the Initial Purchaser, including, in certain
circumstances, the receipt of Additional Interest upon a registration default (as defined in such
agreement).
19. Subordination.
The Securities are subordinated to Senior Indebtedness, as defined in the Indenture. To the
extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be
paid. The Company agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee to give it effect
and appoints the Trustee as attorney-in-fact for such purpose.
SCHEDULE OF EXCHANGES OF SECURITIES
The following exchanges, purchases or conversions of a part of this Global Security have been
made:
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INCREASE |
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Insert assignees soc. sec. or tax ID no.)
(Print or type assignees name, address and zip code)
and irrevocably appoint the agent to transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Dated:
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Your Signature: |
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(Sign exactly as your name
appears on the other side of this
Security) |
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Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory
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FORM OF CONVERSION NOTICE
To convert this Security into Cash, shares of Common Stock or a combination of Cash and shares
of Common Stock, as applicable and as provided in the Indenture, check the box o
To convert only part of this Security, state the principal amount to be converted (which must
be $1,000 or a multiple of $1,000): ____________
If you want the stock certificate made out in another persons name, fill in the form below:
(Insert assignees soc. sec. or tax ID no.)
(Print or type assignees name, address and zip code)
The undersigned (the Applicant) hereby makes application for the issuance of record to the
name of the Applicant of shares of Common Stock.
Date:
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Your Signature: |
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(Sign exactly as your name appears on the
other side of this Security) |
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Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory
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FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
U.S. Bank National Association, as Trustee
One Federal Street, 3rd Floor
Boston, MA 02110
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Attn: Corporate Trust Administration |
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Re: |
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Skyworks Solutions, Inc. (the Company) |
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1.50% Convertible Subordinated Notes due 2012 |
This is a Fundamental Change Purchase Notice as defined in Section 3.1(c) of the
Indenture, dated as of March 2, 2007 (the Indenture), between the Company and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have the meanings ascribed to
them in the Indenture.
Certificate No(s). of Securities:
I intend to deliver the following aggregate principal amount of Securities for purchase by the
Company pursuant to Article III of the Indenture (in multiples of $1,000):
$
I hereby agree that the Securities shall be purchased on the Fundamental Change Purchase Date
pursuant to the terms and conditions specified in paragraph 5 of the Securities and in the
Indenture.
Signed:
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF RESTRICTED SECURITIES
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Re: |
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1.50% Convertible Subordinated Notes due 2012
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(the Securities) of Skyworks Solutions, Inc. |
This
certificate relates to $____________ principal amount of Securities owned in
(check applicable box):
o book-entry or o definitive form by (the Transferor).
The Transferor has requested a Registrar or the Trustee to exchange or register the transfer
of such Securities. In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer restrictions relating
to the Securities as provided in Section 2.12 of the Indenture, dated as of March 2, 2007,
between Skyworks Solutions, Inc. and U.S. Bank National Association, as trustee (the Indenture),
and either the transfer of such Security is being made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the Securities Act) (check applicable
box) or the transfer or exchange, as the case may be, of such Security does not require
registration under the Securities Act because (check applicable box):
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Such Security is being transferred pursuant to an effective registration statement under the Securities Act. |
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Such Security is being acquired for the Transferors own account, without transfer. |
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Such Security is being transferred to the Company or a Subsidiary (as defined in the Indenture) of the Company. |
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Such Security is being transferred to a person the Transferor reasonably believes
is a qualified institutional buyer (as defined in Rule 144A or any successor
provision thereto (Rule 144A) under the Securities Act) to whom notice has been
given that the transfer is being made in reliance on such Rule 144A, in reliance on
Rule 144A. |
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Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements under the Securities Act in accordance with Rule
144 (or any successor thereto) (Rule 144) under the Securities Act. |
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Such Security is being transferred to a non-U.S. Person in an offshore transaction
in compliance with Rule 904 of Regulation S under the Securities Act (or any successor
thereto). |
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Such Security is being transferred pursuant to and in compliance with an exemption
from the registration requirements of the Securities Act (other than an exemption
referred to above). |
The Transferor acknowledges and agrees that, if the transferee will hold any such Securities
in the form of beneficial interests in a Global Security that is a restricted security within the
meaning of Rule 144 under the Securities Act, then such transfer can be made only (x) pursuant to
Rule 144A under the Securities Act to a transferee that the transferor reasonably believes is a
qualified institutional buyer, as defined in Rule 144A, or (y) pursuant to Regulation S under the
Securities Act.
Date:
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Signature(s) of Transferor
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(If the registered owner is a
corporation, partnership or
fiduciary, the title person signing
on behalf of such registered owner
must be stated.) |
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Signature Guaranteed
Participant in a Recognized Signature |
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Guarantee Medallion Program |
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By: |
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Authorized Signatory |
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EX-5.1
Exhibit 5.1
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March 8, 2007
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+1 617 526 6000 (t) |
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+1 617 526 5000 (f) |
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wilmerhale.com |
Skyworks Solutions, Inc.
20 Sylvan Road
Woburn, Massachusetts 01801
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished to you in connection with a Registration Statement on Form S-3 (the
Registration Statement) to be filed with the Securities and Exchange Commission (the
Commission) under the Securities Act of 1933, as amended (the Securities Act), for the
registration of an aggregate principal amount of $100,000,000 11/4% Convertible Subordinated Notes
due 2010 and $100,000,000 11/2% Convertible Subordinated Notes due 2012 (collectively, the Notes)
and the underlying shares of common stock issuable upon the conversion of such Notes (the
Underlying Shares, and collectively with the Notes, the Securities) of Skyworks Solutions,
Inc., a Delaware corporation (the Company). All of the Securities are being registered on behalf
of certain security holders of the Company.
The Notes were issued pursuant to an indenture, dated as of March 2, 2007 (the Indenture),
between the Company and U.S. Bank National Association as trustee (the Trustee).
We are acting as counsel for the Company in connection with the registration for resale of the
Securities. We have examined signed copies of the Registration Statement to be filed with the
Commission. We have also examined and relied upon the Registration Rights Agreement, dated March
2, 2007, the Indenture, resolutions adopted by the Board of Directors of the Company, minutes of
meetings of the Board of Directors of the Company as provided to us by the Company, the
Certificate of Incorporation and By-Laws of the Company, each as restated and/or amended to date,
and such other documents as we have deemed necessary for purposes of rendering the opinions
hereinafter set forth.
In our examination of the foregoing documents, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as copies, the authenticity of the originals of such
latter documents and the legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer and sale of the Securities,
to register and qualify the Securities for sale under all applicable state securities or blue sky
laws.
We express no opinion herein as to the laws of any state or jurisdiction other than the state laws
of the State of New York and the General Corporation Law of the State of Delaware.
March 8, 2007
Page 2
Our opinions below are qualified to the extent that they may be subject to or affected by (a)
applicable bankruptcy, insolvency, reorganization, moratorium, usury, fraudulent conveyance or
other laws affecting the rights of creditors generally; (b) statutory or decisional law concerning
recourse by creditors to security in the absence of notice or hearing; (c) duties and standards
imposed on creditors and parties to contracts, including, without limitation, requirements of good
faith, reasonableness and fair dealing; and (d) general equitable principles. We express no
opinion as to the enforceability of any provision of any of the Notes that purports to select the
laws by which it or any other agreement or instrument is to be governed. Furthermore, we express
no opinion as to the availability of any equitable or specific remedy upon any breach of any of the
agreements as to which we are opining herein, or any of the agreements, documents or obligations
referred to therein, or to the successful assertion of any equitable defenses, inasmuch as the
availability of such remedies or the success of any equitable defenses may be subject to the
discretion of a court. In addition, we express no opinion with respect to the enforceability of any
provision of the Notes requiring the payment of interest on overdue interest.
We also express no opinion herein as to any provision of any agreement (a) that waives any right of
the Company; (b) to the effect that rights and remedies are not exclusive, that every right or
remedy is cumulative and may be exercised in addition to or with any other right or remedy and does
not preclude recourse to one or more other rights or remedies; (c) relating to the effect of
invalidity or unenforceability of any provision of such agreement on the validity or enforceability
of any other provision thereof; (d) which is in violation of public policy; (e) relating to
indemnification and contribution with respect to securities law matters; (f) which provides that
the terms of any such agreement may not be waived or modified except in writing; (g) purporting to
indemnify any person against his, her or its own negligence or misconduct; (h) requiring the
payment of penalties (including, without limitation, liquidated damages that may be deemed or
construed to constitute penalties) or consequential damages; or (i) relating to choice of law or
consent to jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Notes have been duly authorized, executed and delivered by the Company and, assuming they
have been authenticated by the Trustee in the manner provided by the Indenture, are valid and
binding obligations of the Company, enforceable against the Company in accordance with their terms;
and
2. The Underlying Shares reserved for issuance upon conversion of the Notes have been duly
authorized by the Company and, when issued upon conversion of the Notes in accordance with the
terms of the Notes and the Indenture, will be validly issued, fully paid and nonassessable.
It is understood that this opinion is to be used only in connection with the offer and sale of the
Securities while the Registration Statement is in effect.
March 8, 2007
Page 3
Please note that we are opining only as to the matters expressly set forth herein, and no opinion
should be inferred as to any other matters. This opinion is based upon currently existing
statutes, rules, regulations and judicial decisions, and we disclaim any obligation to advise you
of any change in any of these sources of law or subsequent legal or factual developments which
might affect any matters or opinions set forth herein.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the
Registration Statement in accordance with the requirements of Item 601(b)(5) of Regulation S-K
under the Securities Act and to the use of our name therein and in the related prospectus under the
caption Legal Matters. In giving such consent, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities Act or the rules
and regulations of the Commission.
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Very truly yours, |
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WILMER CUTLER PICKERING |
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HALE AND DORR LLP |
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By:
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/s/ Peter N. Handrinos |
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Peter N. Handrinos, Partner |
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EX-12.1
EXHIBIT 12.1
SKYWORKS SOLUTIONS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
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Fiscal Year Ended |
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Three Months Ended |
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September 27, |
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October 3, |
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October 1, |
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September 30, |
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September 29, |
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December 30, |
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December 29, |
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2002(1) |
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2003(2) |
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2004 |
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2005 |
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2006(3) |
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2005 |
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2006 |
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Income (loss) before
provision (benefit)
for taxes on income |
|
$ |
(255,653 |
) |
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$ |
(53,625 |
) |
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$ |
26,396 |
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|
$ |
40,989 |
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$ |
(72,774 |
) |
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$ |
7,011 |
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$ |
13,773 |
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Add Fixed charges
net of capitalized
interest |
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6,587 |
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24,868 |
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21,221 |
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17,874 |
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17,882 |
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4,607 |
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3,991 |
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Income (loss) before taxes
and fixed charges
(net of capitalized
interest) |
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(249,066) |
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|
(28,757 |
) |
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|
47,617 |
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58,863 |
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|
(54,892) |
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11,618 |
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|
17,764 |
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Fixed charges: |
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Interest |
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|
4,227 |
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|
|
19,467 |
|
|
|
15,771 |
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|
13,001 |
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|
12,805 |
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|
3,413 |
|
|
|
2,938 |
|
Amortization of debt issuance costs |
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|
|
|
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|
1,936 |
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|
|
2,176 |
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|
|
1,596 |
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|
|
1,992 |
|
|
|
399 |
|
|
|
311 |
|
Capitalized interest |
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|
Estimated interest
component of
rental expense |
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|
2,360 |
|
|
|
3,465 |
|
|
|
3,274 |
|
|
|
3,277 |
|
|
|
3,085 |
|
|
|
795 |
|
|
|
742 |
|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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Total |
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|
6,587 |
|
|
|
24,868 |
|
|
|
21,221 |
|
|
|
17,874 |
|
|
|
17,882 |
|
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|
4,607 |
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|
3,991 |
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Ratio of earnings
before taxes and
fixed charges, to
fixed charges |
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2.2 |
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3.3 |
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2.5 |
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4.5 |
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(1) |
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As a result of the loss incurred in the fiscal year ended
September 27, 2002, we were unable to
fully cover fixed charges. The amount of such deficiency during this period was approximately $256
million. |
|
(2) |
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As a result of losses incurred in the fiscal year ended
October 3, 2003, we were unable to
fully cover fixed charges. The amount of such deficiency during this period was approximately $54
million. |
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(3) |
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As a result of losses incurred in the fiscal year ended
September 29, 2006, we were unable to
fully cover fixed charges. The amount of such deficiency during this period was approximately $73
million. |
EX-23.1
Exhibit
23.1
Consent
of Independent Registered Public Accounting Firm
The
Board of Directors
Skyworks
Solutions, Inc.:
We
consent to the use of our reports dated December 13, 2006, with
respect to the consolidated balance sheets of Skyworks Solutions,
Inc. and subsidiaries (the Company) as of September 29, 2006 and
September 30, 2005, and the related consolidated statements of
operations, stockholders equity and comprehensive income (loss),
and cash flows for each of the years in the three-year period ended
September 29, 2006, and the related financial statement
schedule, managements assessment of the effectiveness of
internal control over financial reporting as of September 29,
2006, and the effectiveness of internal control over financial
reporting as of September 29, 2006, incorporated herein by
reference in this Registration Statement on Form S-3 and the
prospectus that is a part thereof, and to the
reference to our firm under the heading Experts in the
prospectus.
Our
report covering the 2006 consolidated financial statements includes
an explanatory paragraph that refers to the Companys adoption
of Statement of Financial Accounting Standards No. 123(R),
Share-Based Payment, effective October 1, 2005.
/s/
KPMG LLP
Boston,
Massachusetts
March 7, 2007
EX-25.1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)
U.S. BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
31-0841368
I.R.S. Employer Identification No.
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800 Nicollet Mall |
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Minneapolis, Minnesota
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55402
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(Address
of principal executive offices)
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(Zip
Code) |
James P. Freeman
U.S. Bank National Association
One Federal Street, 3rd Floor
Boston, MA 02110
(617) 603-6565
(Name, address and telephone number of agent for service)
Skyworks Solutions, Inc.
(Issuer with respect to the Securities)
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Delaware
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04-2302115
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.) |
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20 Sylvan Road |
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Woburn, Massachusetts
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01801
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(Address
of Principal Executive Offices)
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(Zip
Code) |
1 1/4% Convertible Subordinated Notes due 2010
1 1/2% Convertible Subordinated Notes due 2012
(Title of the Indenture Securities)
FORM T-1
Item 1. GENERAL INFORMATION. Furnish the following information as to the Trustee.
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a) |
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Name and address of each examining or supervising authority to which it
is subject. |
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
|
b) |
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Whether it is authorized to exercise corporate trust powers. |
Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the Trustee, describe
each such affiliation.
None
Items 3-15 Items 3-15 are not applicable because to the best of the Trustees knowledge, the
obligor is not in default under any Indenture for
which the Trustee acts as Trustee.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of
eligibility and qualification.
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1. |
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A copy of the Articles of Association of the Trustee.* |
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2. |
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A copy of the certificate of authority of the Trustee to commence
business.* |
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3. |
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A copy of the certificate of authority of the Trustee to exercise
corporate trust powers.* |
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4. |
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A copy of the existing bylaws of the Trustee.* |
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5. |
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A copy of each Indenture referred to in Item 4. Not applicable. |
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6. |
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The consent of the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939, attached as Exhibit 6. |
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7. |
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Report of Condition of the Trustee as of June 30, 2006 published
pursuant to law or the requirements of its supervising or examining authority,
attached as Exhibit 7. |
* Incorporated by reference to Exhibit 25.1 to Amendment No. 2 to registration statement on
S-4, Registration Number 333-128217 filed on November 15, 2005.
2
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S.
BANK NATIONAL ASSOCIATION, a national banking association organized and existing under
the laws of the United States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of Boston, Commonwealth of Massachusetts, on March 6, 2007.
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By:
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/s/ James P. Freeman |
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James P. Freeman |
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Vice President |
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By:
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/s/ Andrew M. Sinasky
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Andrew M. Sinasky
Assistant Vice President |
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3
Exhibit 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S.
BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by
Federal, State, Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Dated: March 6, 2007
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By:
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/s/ James P. Freeman |
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James P. Freeman |
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Vice President |
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By:
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/s/ Andrew M. Sinasky
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Andrew M. Sinasky
Assistant Vice President |
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4
Exhibit 7
U.S. Bank National Association
Statement of Financial Condition
As of 6/30/2006
($000s)
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6/30/2006 |
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Assets |
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|
|
Cash and Due From Depository Institutions |
|
$ |
7,250,783 |
|
Securities |
|
|
38,280,379 |
|
Federal Funds |
|
|
3,206,234 |
|
Loans & Lease Financing Receivables |
|
|
138,643,464 |
|
Fixed Assets |
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|
1,738,725 |
|
Intangible Assets |
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|
11,772,884 |
|
Other Assets |
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|
11,661,480 |
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Total Assets |
|
$ |
212,553,949 |
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Liabilities |
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Deposits |
|
$ |
135,429,440 |
|
Fed Funds |
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|
9,690,491 |
|
Treasury Demand Notes |
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|
0 |
|
Trading Liabilities |
|
|
370,355 |
|
Other Borrowed Money |
|
|
32,369,084 |
|
Acceptances |
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|
0 |
|
Subordinated Notes and Debentures |
|
|
6,909,696 |
|
Other Liabilities |
|
|
6,518,843 |
|
|
|
|
|
Total Liabilities |
|
$ |
191,287,909 |
|
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|
Equity |
|
|
|
|
Minority Interest in Subsidiaries |
|
$ |
1,033,230 |
|
Common and Preferred Stock |
|
|
18,200 |
|
Surplus |
|
|
11,804,040 |
|
Undivided Profits |
|
|
8,410,170 |
|
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|
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|
Total Equity Capital |
|
$ |
21,265,640 |
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|
Total Liabilities and Equity Capital |
|
$ |
212,553,549 |
|
|
To the best of the undersigneds determination, as of the date hereof, the above financial
information is true and correct.
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U.S. Bank National Association |
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By:
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/s/ James P. Freeman
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Vice President |
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Date: March 6, 2007
5