e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended March 28, 2008
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 1-5560
SKYWORKS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
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Delaware
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04-2302115 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification No.) |
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20 Sylvan Road, Woburn, Massachusetts
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01801 |
(Address of principal executive offices)
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(Zip Code) |
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Registrants telephone number, including area code:
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(781) 376-3000 |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer þ |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o Yes þ No
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
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Class
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Outstanding at May 1, 2008 |
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Common Stock, par value $.25 per share
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162,996,011 |
SKYWORKS SOLUTIONS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 28, 2008
TABLE OF CONTENTS
i
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)
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Three-months Ended |
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Six-months Ended |
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March 28, |
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March 30, |
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March 28, |
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March 30, |
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2008 |
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2007 |
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2008 |
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2007 |
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Net revenues |
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$ |
201,708 |
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$ |
180,210 |
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$ |
412,241 |
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$ |
376,240 |
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Cost of goods sold |
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121,341 |
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111,508 |
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249,536 |
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232,222 |
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Gross profit |
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80,367 |
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68,702 |
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162,705 |
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144,018 |
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Operating expenses: |
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Research and development |
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36,581 |
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31,383 |
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70,675 |
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61,795 |
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Selling, general and administrative |
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23,346 |
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23,750 |
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48,633 |
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47,778 |
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Amortization of intangible assets |
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1,871 |
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536 |
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3,803 |
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1,072 |
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Restructuring and special charges |
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5,473 |
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Total operating expenses |
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61,798 |
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55,669 |
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123,111 |
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116,118 |
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Operating income |
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18,569 |
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13,033 |
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39,594 |
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27,900 |
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Interest expense |
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(1,769 |
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(4,114 |
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(3,977 |
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(7,363 |
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Other income, net |
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1,883 |
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2,903 |
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3,933 |
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5,058 |
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Income before income taxes |
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18,683 |
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11,822 |
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39,550 |
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25,595 |
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Provision for income taxes |
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2,010 |
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(375 |
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3,799 |
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1,361 |
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Net income |
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$ |
16,673 |
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$ |
12,197 |
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$ |
35,751 |
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$ |
24,234 |
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Per share information: |
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Net income, basic and diluted |
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$ |
0.10 |
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$ |
0.08 |
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$ |
0.22 |
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$ |
0.15 |
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Number of weighted-average shares
used in per share computations,
basic |
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161,165 |
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160,687 |
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160,742 |
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160,935 |
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Number of weighted-average shares
used in per share computations,
diluted |
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162,982 |
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161,972 |
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162,740 |
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162,125 |
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The following table summarizes share-based compensation expense for the three and six-month periods
ended March 28, 2008 and March 30, 2007 which is included in the financial statement line items
above as follows:
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Three-months |
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Six-months Ended |
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Ended |
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March 28, |
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March 30, |
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March 28, |
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March 30, |
(In thousands) |
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2008 |
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2007 |
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2008 |
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2007 |
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Cost of goods sold |
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677 |
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276 |
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1,511 |
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401 |
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Research and development |
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2,620 |
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1,622 |
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3,765 |
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2,108 |
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Selling, general and administrative |
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2,346 |
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2,147 |
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5,374 |
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3,562 |
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The accompanying notes are an integral part of these consolidated financial statements.
3
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
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As of |
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March 28, |
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September 28, |
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2008 |
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2007 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
222,157 |
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$ |
241,577 |
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Short-term investments |
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5,700 |
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Restricted cash |
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6,302 |
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6,502 |
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Receivables, net of allowance for doubtful accounts of $1,903 and $1,662 |
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164,604 |
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167,319 |
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Inventories |
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94,272 |
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82,109 |
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Other current assets |
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8,926 |
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10,511 |
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Total current assets |
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496,261 |
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513,718 |
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Property, plant and equipment, net |
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168,881 |
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153,516 |
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Goodwill |
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491,929 |
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480,890 |
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Intangible assets, net |
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22,568 |
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13,442 |
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Deferred tax assets |
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14,528 |
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14,459 |
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Other assets |
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14,124 |
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13,883 |
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Total assets |
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$ |
1,208,291 |
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$ |
1,189,908 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Short-term debt |
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$ |
50,000 |
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$ |
99,335 |
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Accounts payable |
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76,691 |
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56,417 |
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Accrued compensation and benefits |
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28,967 |
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28,392 |
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Other current liabilities |
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8,306 |
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13,079 |
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Total current liabilities |
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163,964 |
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197,223 |
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Long-term debt, less current maturities |
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200,000 |
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200,000 |
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Other long-term liabilities |
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6,879 |
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6,338 |
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Total liabilities |
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370,843 |
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403,561 |
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Commitments and contingencies (Note 9) |
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Stockholders equity: |
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Preferred stock, no par value: 25,000 shares authorized, no shares issued |
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Common stock, $0.25 par value: 525,000 shares authorized; 167,560 shares
issued and 162,882 shares outstanding at March 28, 2008 and 165,593
shares issued and 161,101 shares outstanding at September 28, 2007 |
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40,720 |
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40,275 |
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Additional paid-in capital |
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1,400,257 |
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1,382,230 |
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Treasury stock |
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(33,473 |
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(31,855 |
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Accumulated deficit |
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(568,338 |
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(604,089 |
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Accumulated other comprehensive loss |
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(1,718 |
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(214 |
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Total stockholders equity |
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837,448 |
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786,347 |
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Total liabilities and stockholders equity |
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$ |
1,208,291 |
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$ |
1,189,908 |
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The accompanying notes are an integral part of these consolidated financial statements.
4
SKYWORKS SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
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Six-months Ended |
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March 28, |
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March 30, |
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2008 |
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2007 |
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Cash flows from operating activities: |
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Net income |
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$ |
35,751 |
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$ |
24,234 |
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Adjustments to reconcile net income to net cash provided by
operating activities: |
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Share-based compensation expense |
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10,650 |
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6,071 |
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Depreciation |
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21,993 |
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18,830 |
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Charge in lieu of income tax expense |
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2,720 |
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673 |
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Amortization of intangible assets |
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4,112 |
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1,072 |
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Amortization of deferred financing costs |
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892 |
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1,290 |
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Contribution of common shares to savings and retirement plans |
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5,016 |
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3,633 |
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Non-cash restructuring expense |
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419 |
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Deferred income taxes |
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(300 |
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(510 |
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Loss on sales of assets |
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58 |
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209 |
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Provision for (losses) recoveries on accounts receivable |
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241 |
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(198 |
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Changes in assets and liabilities: |
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Receivables |
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2,474 |
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(2,197 |
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Inventories |
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(6,730 |
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5,646 |
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Other current and long-term assets |
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2,376 |
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114 |
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Accounts payable |
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20,274 |
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(12,373 |
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Other current and long-term liabilities |
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(3,654 |
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(5,271 |
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Net cash provided by operating activities |
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95,873 |
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41,642 |
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Cash flows from investing activities: |
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Capital expenditures |
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(37,416 |
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(17,577 |
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Payments for acquisitions |
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(32,627 |
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Sale of short-term investments |
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32,400 |
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353,533 |
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Purchase of short-term investments |
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(29,900 |
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(389,433 |
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Net cash used in investing activities |
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(67,543 |
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(53,477 |
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Cash flows from financing activities: |
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Proceeds from notes offering |
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200,000 |
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Payments on short-term borrowings |
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(9,929 |
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Payments on long-term borrowings |
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(130,000 |
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Deferred financing costs |
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(6,189 |
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Retirement of Junior Notes |
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(49,335 |
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Change in restricted cash |
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200 |
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Repurchase of common stock |
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(1,619 |
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(30,667 |
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Net proceeds from exercise of stock options |
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3,004 |
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4,318 |
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Net cash provided by (used in) financing activities |
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(47,750 |
) |
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27,533 |
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Net increase (decrease) in cash and cash equivalents |
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(19,420 |
) |
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15,698 |
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Cash and cash equivalents at beginning of period |
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241,577 |
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136,749 |
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Cash and cash equivalents at end of period |
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$ |
222,157 |
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$ |
152,447 |
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Supplemental cash flow disclosures: |
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Taxes paid |
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$ |
482 |
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$ |
483 |
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Interest paid |
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$ |
3,747 |
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$ |
8,238 |
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The accompanying notes are an integral part of these consolidated financial statements.
5
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Skyworks Solutions, Inc. (Skyworks or the Company) designs, manufactures and markets 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 analog technologies, we also offer a diverse portfolio of linear integrated circuits (ICs)
that support automotive, broadband, cellular infrastructure, industrial and medical applications.
The accompanying unaudited consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission (the SEC). Certain information
and footnote disclosures, normally included in annual consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States of America, have been
condensed or omitted pursuant to those rules and regulations. However, in the opinion of
management, the financial information reflects all adjustments, consisting of adjustments of a
normal recurring nature necessary to present fairly the financial position, results of operations,
and cash flows of the Company. The results of operations for the three and six-month periods ended
March 28, 2008 are not necessarily indicative of the results to be expected for the full year. This
information should be read in conjunction with the Companys financial statements and notes thereto
contained in the Companys Form 10-K for the fiscal year ended September 28, 2007 as filed with the
SEC.
The Companys fiscal year ends on the Friday closest to September 30. Fiscal 2007 consisted of 52
weeks and ended on September 28, 2007, and the second quarters of fiscal 2008 and fiscal 2007 each
consisted of 13 weeks and ended on March 28, 2008 and March 30, 2007, respectively. Fiscal 2008
will consist of 53 weeks and end on October 3, 2008, with the first three quarters of fiscal 2008
consisting of 13 weeks, and the fourth quarter of fiscal 2008 consisting of 14 weeks.
2. BUSINESS COMBINATIONS
In October 2007, the Company paid $32.6 million in cash to acquire certain assets from two separate
companies. The Company acquired raw materials, die bank, finished goods, proprietary GaAs PA/FEM
designs and related intellectual property in a business combination from Freescale Semiconductor.
We also acquired sixteen fundamental HBT and RF MEMs patents in an asset acquisition from another
company. The purchase accounting on these acquisitions was finalized in March 2008.
The purchase prices as of October 23, 2007 were allocated based upon the fair value of the tangible
and intangible assets acquired to allocate the purchase prices in accordance with Statement of Financial Accounting Standards (SFAS) 141,
Business Combinations. Based upon those calculations, the Company has definitively concluded
that customer relationships have a fair value of $8.5 million, order backlog has a fair
value of $1.6 million, developed technology has a fair value of $1.3 million, the Master Foundry Services agreement has a fair value of $0.9 million, patents have a fair value of $0.9 million, inventories have a fair value of $5.6 million
and the remaining purchase price of $13.8 million is allocated to goodwill. The intangible assets will be
amortized over periods ranging from .5 years to 5 years.
The Companys primary reasons for the above acquisitions were to expand its market share in power
amplifiers and front end modules at certain existing customers, and increase the probability of
future design wins with these
6
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
customers. The significant factors that resulted in recognition of
goodwill in one of the transactions were: (a) the purchase price was based on cash flow projections assuming the sale of the
acquired inventory and the sale of the Companys next generation product (a derivative of the
acquired inventory); and (b) there were very few tangible and identifiable intangible assets that
qualified for recognition.
The Consolidated Financial Statements include the operating results of the acquired business from
the date of acquisition. Pro forma results of operations for these acquisitions completed during the
six-month period ended March 28, 2008 have not been presented because the effects of the
acquisitions were not material to the Companys financial results.
3. AVAILABLE FOR SALE SECURITIES
The Company accounts for its investment in debt and equity securities in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities, and classifies them as available for sale. These securities consist of $3.2
million in amortized cost of auction rate securities (ARS), which are long-term debt instruments
which provide liquidity through a Dutch auction process that resets interest rates each month. The
recent uncertainties in the credit markets have disrupted the liquidity of this process resulting
in failed auctions.
In the three and six-month periods ended March 28, 2008, the carrying value of these securities was
reduced by $0.8 million and $1.5 million, respectively, reflecting a change in fair value. The
Company assessed these declines in fair value to be temporary and recorded this reduction in
shareholders equity in accumulated other comprehensive loss. The Company will continue to closely
monitor these ARS and evaluate the appropriate accounting treatment in each reporting period. The
Company holds no other auction rate securities.
ARS were classified in prior periods as current assets under Short-term Investments. Given the
failed auctions, the Companys ARS are considered to be illiquid until there is a successful
auction. Accordingly, the remaining ARS balance has been reclassified to non-current other assets.
4. INVENTORIES
Inventories consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
September 28, |
|
|
|
2008 |
|
|
2007 |
|
|
|
|
Raw materials |
|
$ |
8,150 |
|
|
$ |
6,624 |
|
Work-in-process |
|
|
52,312 |
|
|
|
48,128 |
|
Finished goods |
|
|
33,810 |
|
|
|
27,357 |
|
|
|
|
|
|
|
|
|
|
$ |
94,272 |
|
|
$ |
82,109 |
|
|
|
|
|
|
|
|
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
September 28, |
|
|
|
2008 |
|
|
2007 |
|
|
|
|
Land |
|
$ |
9,423 |
|
|
$ |
9,423 |
|
Land and leasehold improvements |
|
|
4,453 |
|
|
|
4,394 |
|
Buildings |
|
|
39,974 |
|
|
|
39,730 |
|
Furniture and Fixtures |
|
|
25,372 |
|
|
|
24,485 |
|
Machinery and equipment |
|
|
367,304 |
|
|
|
343,551 |
|
Construction in progress |
|
|
23,792 |
|
|
|
12,671 |
|
|
|
|
|
|
|
|
|
|
|
470,318 |
|
|
|
434,254 |
|
Accumulated depreciation and amortization |
|
|
(301,437 |
) |
|
|
(280,738 |
) |
|
|
|
|
|
|
|
|
|
$ |
168,881 |
|
|
$ |
153,516 |
|
|
|
|
|
|
|
|
7
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
6. GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
March 28, 2008 |
|
|
September 28, 2007 |
|
|
|
Average |
|
|
Gross |
|
|
|
|
|
|
Net |
|
|
Gross |
|
|
|
|
|
|
Net |
|
|
|
Amortization |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
Carrying |
|
|
Accumulated |
|
|
Carrying |
|
|
|
Period |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
|
(Years) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
$ |
491,929 |
|
|
$ |
|
|
|
$ |
491,929 |
|
|
$ |
480,890 |
|
|
$ |
|
|
|
$ |
480,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology |
|
|
5-10 |
|
|
$ |
11,850 |
|
|
$ |
(6,965 |
) |
|
$ |
4,885 |
|
|
$ |
10,550 |
|
|
$ |
(6,399 |
) |
|
$ |
4,151 |
|
Customer relationships |
|
|
5-10 |
|
|
|
21,210 |
|
|
|
(8,164 |
) |
|
|
13,046 |
|
|
|
12,700 |
|
|
|
(6,678 |
) |
|
|
6,022 |
|
Patents |
|
|
3 |
|
|
|
900 |
|
|
|
(150 |
) |
|
|
750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
.5-3 |
|
|
|
2,649 |
|
|
|
(2,031 |
) |
|
|
618 |
|
|
|
122 |
|
|
|
(122 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,609 |
|
|
|
(17,310 |
) |
|
|
19,299 |
|
|
|
23,372 |
|
|
|
(13,199 |
) |
|
|
10,173 |
|
Unamortized intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks |
|
|
|
|
|
|
3,269 |
|
|
|
|
|
|
|
3,269 |
|
|
|
3,269 |
|
|
|
|
|
|
|
3,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total intangible assets |
|
|
|
|
|
$ |
39,878 |
|
|
$ |
(17,310 |
) |
|
$ |
22,568 |
|
|
$ |
26,641 |
|
|
$ |
(13,199 |
) |
|
$ |
13,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense related to intangible assets are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28,
2008 |
|
March 30,
2007 |
|
March 28,
2008 |
|
March 30,
2007 |
|
|
|
Amortization expense |
|
$ |
2,180 |
|
|
$ |
536 |
|
|
$ |
4,112 |
|
|
$ |
1,072 |
|
The changes in the gross carrying amount of goodwill and intangible assets are as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill and Intangible Assets |
|
|
|
|
|
|
|
Developed |
|
|
Customer |
|
|
|
|
|
|
Patents |
|
|
|
|
|
|
Goodwill |
|
|
Technology |
|
|
Relationships |
|
|
Trademarks |
|
|
and Other |
|
|
Total |
|
Balance as of September 28, 2007 |
|
$ |
480,890 |
|
|
$ |
10,550 |
|
|
$ |
12,700 |
|
|
$ |
3,269 |
|
|
$ |
122 |
|
|
$ |
507,531 |
|
Additions during period |
|
|
13,759 |
|
|
|
1,300 |
|
|
|
8,510 |
|
|
|
|
|
|
|
3,427 |
|
|
|
26,996 |
|
Deductions during period |
|
|
(2,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of March 28, 2008 |
|
$ |
491,929 |
|
|
$ |
11,850 |
|
|
$ |
21,210 |
|
|
$ |
3,269 |
|
|
$ |
3,549 |
|
|
$ |
531,807 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In October 2007, the Company paid $32.6 million in cash to acquire certain assets from two separate
companies resulting in the allocation of approximately $13.8 million to goodwill. For additional
information regarding these acquisitions see Note 2, Business Combinations.
Goodwill was reduced by $2.7 million in the six-month period ended March 28, 2008 as a result of
the realization of deferred tax assets. The benefit from the recognition of a portion of these
deferred items reduces the carrying
value of goodwill instead of reducing income tax expense. Accordingly, future realization of
certain deferred tax assets will reduce the carrying value of goodwill. The remaining deferred tax
assets that could reduce goodwill in future periods are $15.9 million as of March 28, 2008.
8
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
Annual amortization expense related to intangible assets for the next five years is expected to be
as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
2012 |
Amortization expense |
|
$ |
6,933 |
|
|
$ |
4,406 |
|
|
$ |
4,406 |
|
|
$ |
4,106 |
|
|
$ |
3,560 |
|
7. BORROWING ARRANGEMENTS
Long-Term Debt
Long-term debt consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
September 28, |
|
|
|
2008 |
|
|
2007 |
|
|
|
|
Junior Notes |
|
$ |
|
|
|
$ |
49,335 |
|
2007 Convertible Notes |
|
|
200,000 |
|
|
|
200,000 |
|
|
|
|
|
|
|
|
Long-term debt |
|
$ |
200,000 |
|
|
$ |
249,335 |
|
Less-current maturities |
|
|
|
|
|
|
49,335 |
|
|
|
|
|
|
|
|
|
|
$ |
200,000 |
|
|
$ |
200,000 |
|
|
|
|
|
|
|
|
On March 2, 2007, the Company issued $200.0 million aggregate principal amount of convertible
subordinated notes (2007 Convertible Notes). The offering contained two tranches. The first
tranche consisted of $100.0 million of 1.25% convertible subordinated notes due March 2010. The
second tranche consisted of $100.0 million of 1.50% convertible subordinated notes due March 2012.
The conversion price of the 2007 Convertible Notes is 105.0696 shares per $1,000 principal amount
of notes to be redeemed, which is the equivalent of a conversion price of approximately $9.52 per
share, plus accrued and unpaid interest, if any, to the conversion date. Holders may require the
Company to repurchase the 2007 Convertible Notes upon a change in control of the Company. The
Company pays interest in cash semi-annually in arrears on March 1 and September 1 of each year. It
has been the Companys historical practice to cash settle the principal and interest components of
convertible debt instruments, and it is our intention to continue to do so in the future, including
settlement of the 2007 Convertible Notes.
On December 21, 2006, the Financial Accounting Standards Board (FASB) issued FASB Staff Position
Emerging Issues Task Force 00-19-2 (FSP EITF 00-19-2). FSP EITF 00-19-2 specifies that the
contingent obligation to make future payments, or otherwise transfer consideration under a
registration payment arrangement, should be separately recognized and measured in accordance with
FASB Statement No. 5, Accounting for Contingencies (FASB 5). The Company adopted FSP EITF 00-19-2
on September 29, 2007. The Company agreed to file a shelf registration statement under the
Securities Act of 1933 (the Securities Act) not later than 120 days after the first date of original issuance of the 2007
Convertible Notes. The Company agreed to utilize commercially reasonable efforts to have this shelf
registration statement declared effective not later than 180 days after the first date of original
issuance of the notes, and to keep it effective until the earliest of: 1) two years from the
effective date of the shelf registration statement; 2) the date when all registrable securities
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. The Company filed the shelf registration statement within 120
days of the original issuance of the 2007 Convertible Notes and the shelf registration statement
was declared effective within 180 days after the first date of original issuance of the notes. If
the shelf registration statement ceases to be effective within two years from the effective date of
the shelf registration statement the Company will be obligated to pay an additional 0.25% interest
per annum for the first 90 days after the occurrence of the registration default and at the rate of
0.50% per annum thereafter. The Company has concluded that it is not probable that a contingent
liability has been incurred as March 28, 2008 pursuant to the application of FASB 5 and thus has
not recorded a liability.
Junior Notes represent the Companys 4.75% convertible subordinated notes due November 2007. During
the three-month period ended December 28, 2007, the Company retired the entire $49.3 million in
aggregate principal amount of the Junior Notes at a price of $1,000 per $1,000 principal amount of
notes plus $1.2 million in accrued and unpaid interest.
9
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
Short-Term Debt
Short-term debt consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
March 28, |
|
|
September 28, |
|
|
|
2008 |
|
|
2007 |
|
|
|
|
Junior Notes |
|
$ |
|
|
|
$ |
49,335 |
|
Facility Agreement |
|
|
50,000 |
|
|
|
50,000 |
|
|
|
|
|
|
|
|
|
|
$ |
50,000 |
|
|
$ |
99,335 |
|
|
|
|
|
|
|
|
On July 15, 2003, the Company entered into a receivables purchase agreement under which it has
agreed to sell from time to time certain of its accounts receivable to Skyworks USA, Inc.
(Skyworks USA), a wholly-owned special purpose entity that is consolidated for accounting
purposes. Concurrently, Skyworks USA entered into an agreement with Wachovia Bank, N.A. providing
for a $50.0 million credit facility (Facility Agreement) 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 Facility Agreement is recorded as interest expense in the Companys results of
operations. The Company performs collections and administrative functions on behalf of Skyworks
USA. Interest related to the Facility Agreement is at LIBOR plus 0.4%. As of March 28, 2008,
Skyworks USA had borrowed $50.0 million under this agreement.
8. INCOME TAXES
We recorded tax provisions of $2.0 million and $3.8 million for the three and six-month periods
ended March 28, 2008 and $(0.4) million and $1.3 million for the three and six-month periods ended
March 30, 2007. Our effective tax rates were 10.8% and 9.6% for the three and six-month periods
ended March 28, 2008 and (3.2)% and 5.3% for the three and six-month periods ended March 30, 2007.
The difference between our effective tax rates and the 35% federal statutory rate resulted
primarily from a tax benefit related to a reduction in the federal and state deferred tax asset
valuation allowance and foreign earnings taxed at rates lower than the federal statutory rate.
As noted in our most recent Annual Report on Form 10-K, no benefit has been recognized for certain pre-Merger
deferred tax assets. The benefit from the recognition of these deferred items reduces the carrying
value of goodwill instead of reducing income tax expense. We will evaluate the realization of the
pre-Merger deferred tax assets on a quarterly basis and adjust the provision for income taxes
accordingly. As a result, the effective tax rate may vary in subsequent quarters.
We utilize the asset and liability method of accounting for income taxes as set forth in SFAS No.
109, Accounting for Income Taxes, (SFAS 109). Under the asset and liability method, deferred
taxes are determined based on the temporary differences between the financial statement and tax
basis of assets and liabilities using tax rates expected to be in effect during the years in which
the basis differences reverse. A valuation allowance is recorded when it is more likely than not
that some of the deferred tax assets will not be realized.
In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes-an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for
uncertainty in income taxes recognized in an enterprises financial statements in accordance with
SFAS 109. FIN 48 prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. This statement also provides guidance on derecognition,
classification, interest and penalties, accounting in the interim periods, disclosure, and
transition. The Company adopted FIN 48 on September 29, 2007, and the provisions of FIN 48 will be
applied to all income tax provisions commencing from that date.
Of the total unrecognized tax benefits at March 28, 2008, $0.6 million would impact the effective
tax rate, if recognized. The Company has accrued $0.5 million of interest related to this tax
position. This position could change within the next twelve months because of the expiration of a
statute of limitations period.
10
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
On October 1, 2007, Mexico enacted a new flat tax regime which became effective January 1, 2008.
SFAS 109 prescribes that the effect of the new tax on deferred
taxes must be included in tax expense in the period that includes the enactment date. The effect
of recording deferred taxes in the first fiscal quarter of 2008 to the foreign tax provision
(benefit) was ($0.2) million. In addition to the deferred taxes, the Company has accrued flat tax
for the three-month period ended March 28, 2008 of $0.1 million.
9. COMMITMENTS AND CONTINGENCIES
Legal Matters
From time to time, various lawsuits, claims and proceedings have been, and may in the future be,
instituted or asserted against the Company, including those pertaining to patent infringement,
intellectual property, environmental, product liability, safety and health, employment and
contractual matters.
Additionally, 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. The outcome of litigation cannot be predicted with certainty and some lawsuits, claims
or proceedings may be disposed of unfavorably to the Company. Intellectual property disputes often
have a risk of injunctive relief, which, if imposed against the Company, could materially and
adversely affect the Companys financial condition, or results of operations.
From time to time we are involved in legal proceedings in the ordinary course of business. We
believe that there is no such ordinary course litigation pending that will have, individually or in
the aggregate, a material adverse effect on our business.
Guarantees and Indemnifications
The Company has no guarantees. The Company generally indemnifies its customers from third-party
intellectual property infringement litigation claims related to its products, and, on occasion,
also provides other indemnities related to product sales. In connection with certain facility
leases, the Company has indemnified its lessors for certain claims arising from the facility or the
lease.
The Company indemnifies its directors and officers to the maximum extent permitted under the laws
of the state of Delaware. The duration of the indemnities varies, and in many cases is indefinite.
The indemnities to customers in connection with product sales generally are subject to limits based
upon the amount of the related product sales and in many cases are subject to geographic and other
restrictions. In certain instances, the Companys indemnities do not provide for any limitation of
the maximum potential future payments the Company could be obligated to make. The Company has not
recorded any liability for these indemnities in the accompanying consolidated balance sheets.
10. RESTRUCTURING AND SPECIAL CHARGES
Restructuring and special charges consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
Restructuring and special charges |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
5,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
5,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
Restructuring and special charges consist of charges for asset impairments and restructuring
activities, as follows:
2006 Restructuring and Other
On September 29, 2006, the Company implemented a plan to exit its baseband product area in order to
focus on its core products encompassing linear products, power amplifiers, front-end modules and
radio solutions. The Company recorded various charges associated with this action.
The Company recorded additional restructuring charges of $5.5 million related to the exit of the
baseband product area in the first six-month period of 2007. These charges consist of $4.1 million
relating to the exit of certain operating leases and $1.4 million for the write down of a
technology license.
Activity and liability balances related to the fiscal 2006 restructuring actions are as follows (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License and |
|
|
|
|
|
|
|
|
|
|
|
|
Facility |
|
|
Software |
|
|
Workforce |
|
|
Asset |
|
|
|
|
|
|
Closings |
|
|
Write-offs |
|
|
Reductions |
|
|
Impairments |
|
|
Total |
|
|
|
|
Charged to costs and expenses |
|
$ |
105 |
|
|
$ |
9,583 |
|
|
$ |
13,070 |
|
|
$ |
4,197 |
|
|
$ |
26,955 |
|
Non-cash items |
|
|
|
|
|
|
(6,426 |
) |
|
|
|
|
|
|
(4,197 |
) |
|
|
(10,623 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, September 29, 2006 |
|
$ |
105 |
|
|
$ |
3,157 |
|
|
$ |
13,070 |
|
|
$ |
|
|
|
$ |
16,332 |
|
Charged to costs and expenses |
|
|
4,483 |
|
|
|
(83 |
) |
|
|
530 |
|
|
|
|
|
|
|
4,930 |
|
Reclassification of reserves |
|
|
(128 |
) |
|
|
(508 |
) |
|
|
636 |
|
|
|
|
|
|
|
|
|
Non-cash items |
|
|
|
|
|
|
(419 |
) |
|
|
|
|
|
|
|
|
|
|
(419 |
) |
Cash payments |
|
|
(1,690 |
) |
|
|
(1,847 |
) |
|
|
(13,242 |
) |
|
|
|
|
|
|
(16,779 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, September 28, 2007 |
|
$ |
2,770 |
|
|
$ |
300 |
|
|
$ |
994 |
|
|
$ |
|
|
|
$ |
4,064 |
|
Reclassification of reserves |
|
|
|
|
|
|
(75 |
) |
|
|
75 |
|
|
|
|
|
|
|
|
|
Cash payments |
|
|
(812 |
) |
|
|
(225 |
) |
|
|
(608 |
) |
|
|
|
|
|
|
(1,645 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring balance, March 28, 2008 |
|
$ |
1,958 |
|
|
$ |
|
|
|
$ |
461 |
|
|
$ |
|
|
|
$ |
2,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company anticipates that most of the remaining payments associated with the exit of the
baseband product area will be remitted during fiscal years 2008 and 2009.
11. SEGMENT INFORMATION
In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information (SFAS 131), the Company has one reportable operating segment which designs,
develops, manufactures and markets proprietary semiconductor products, including intellectual
property, for manufacturers of wireless communication products. SFAS 131 establishes standards
for the way public business enterprises report information about operating segments in annual
financial statements and in interim reports to shareholders. The method for determining what
information to report is based on managements organization of segments within the Company for
making operating decisions and assessing financial performance. In evaluating financial
performance, management uses sales and operating profit as the measure of the segments profit or
loss. All of the Companys operating segments share similar economic characteristics as they have a
similar long term business model, and have similar research and development expenses
and similar selling, general and administrative expenses, thus, the Company has concluded at March 28,
2008 that it has only one reportable operating segment. The Company will re-assess its conclusions
at least annually.
12. EMPLOYEE STOCK BENEFIT PLANS
Net income for the three-month period ended March 28, 2008 and March 30, 2007 included share-based
compensation expense under SFAS No. 123(R) (revised 2004), Share-Based Payment (SFAS 123(R)) of $5.6 million and $4.1 million, respectively. Net income
for the six-month period ended March 28, 2008 and March 30, 2007 included share-based compensation
expense under SFAS 123(R) of $10.6 million and $6.1 million, respectively.
12
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
The following table summarizes share-based compensation expense related to employee stock options,
employee stock purchases, performance stock grants, and restricted stock grants under SFAS 123(R)
for the three and six-month periods ended March 28, 2008 and March 30, 2007 which were allocated as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
(In thousands) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
Stock Options |
|
$ |
2,743 |
|
|
$ |
2,308 |
|
|
$ |
5,047 |
|
|
$ |
3,085 |
|
Non-vested restricted stock with service and market conditions |
|
|
766 |
|
|
|
1,018 |
|
|
|
2,367 |
|
|
|
1,586 |
|
Non-vested restricted stock with service conditions |
|
|
244 |
|
|
|
232 |
|
|
|
529 |
|
|
|
523 |
|
Performance shares |
|
|
1,413 |
|
|
|
160 |
|
|
|
1,814 |
|
|
|
199 |
|
Employee Stock Purchase Plan |
|
|
379 |
|
|
|
327 |
|
|
|
795 |
|
|
|
678 |
|
Other |
|
|
98 |
|
|
|
|
|
|
|
98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,643 |
|
|
$ |
4,045 |
|
|
$ |
10,650 |
|
|
$ |
6,071 |
|
The Compensation Committee of the Companys Board of Directors recommended the modification of
certain of the terms of options to purchase the Companys common stock held by Board of Directors
Chairman Dwight Decker effective upon his retirement from the Board of Directors on March 27, 2008.
The Board of Directors voted on and accepted this recommendation in January 2008. The modification
impacted stock options granted 24 months or prior to Mr. Deckers retirement and those stock
options scheduled to vest within 12 months following his retirement date. Specifically, the vesting
of 18,750 of Mr. Deckers outstanding stock options was accelerated such that they are now
exercisable. In addition, the exercise period of 107,250 of Mr. Deckers stock options (including
the 18,750 accelerated options discussed above) was extended so that, instead of expiring on June
25, 2008, such options would continue to be exercisable for a period of two years from his
retirement date. The modification of the 107,250 above-referenced options resulted in the Company
incurring a non-cash credit of approximately $0.1 million since the Company had previously
recognized expense on these awards.
The following table summarizes share-based compensation expense related to employee stock options,
employee stock purchases, performance stock grants, and restricted stock grants under SFAS 123(R)
for the three and six-month periods ended March 28, 2008 and March 30, 2007 which was allocated as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
(In thousands) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
` |
|
|
Cost of sales |
|
|
677 |
|
|
|
276 |
|
|
|
1,511 |
|
|
|
401 |
|
Research and development |
|
|
2,620 |
|
|
|
1,622 |
|
|
|
3,765 |
|
|
|
2,108 |
|
Selling, general and administrative |
|
|
2,346 |
|
|
|
2,147 |
|
|
|
5,374 |
|
|
|
3,562 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation expense
included in operating expenses |
|
$ |
5,643 |
|
|
$ |
4,045 |
|
|
$ |
10,650 |
|
|
$ |
6,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company utilized the following weighted average assumptions in calculating its share-based
compensation expense using the Black Scholes model at March 28, 2008 and March 30, 2007:
|
|
|
|
|
|
|
|
|
|
|
Three and Six-months Ended |
|
|
March 28, |
|
March 30, |
|
|
2008 |
|
2007 |
|
|
|
Expected volatility |
|
|
51.56 |
% |
|
|
57.32 |
% |
Risk free interest rate (7 year contractual life options) |
|
|
2.93 |
% |
|
|
4.68 |
% |
Risk free interest rate (10 year contractual life options) |
|
|
3.49 |
% |
|
|
4.68 |
% |
Dividend yield |
|
|
0.00 |
|
|
|
0.00 |
|
Expected option life (7 year contractual life options) |
|
|
4.42 |
|
|
|
4.57 |
|
Expected option life (10 year contractual life options) |
|
|
5.80 |
|
|
|
5.86 |
|
13
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
13. EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
(In thousands, except per share amounts) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
Net income |
|
$ |
16,673 |
|
|
$ |
12,197 |
|
|
$ |
35,751 |
|
|
$ |
24,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding basic |
|
|
161,165 |
|
|
|
160,687 |
|
|
|
160,742 |
|
|
|
160,935 |
|
Effect of dilutive stock options |
|
|
1,817 |
|
|
|
1,285 |
|
|
|
1,998 |
|
|
|
1,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding diluted |
|
|
162,982 |
|
|
|
161,972 |
|
|
|
162,740 |
|
|
|
162,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share basic |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
$ |
0.22 |
|
|
$ |
0.15 |
|
Effect of dilutive stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share diluted |
|
$ |
0.10 |
|
|
$ |
0.08 |
|
|
$ |
0.22 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share is calculated by dividing net income by the weighted average number of
common shares outstanding. Diluted earnings per share includes the dilutive effect of equity based
awards using the treasury stock method, the Junior Notes on an if-converted basis and the 2007
Convertible Notes using the treasury stock method, if their effect is dilutive.
Equity based awards exercisable for approximately 23.5 million shares were outstanding but not
included in the computation of earnings per share for the three-month period ended March 28, 2008
as their effect would have been anti-dilutive. Junior Notes convertible into approximately 1.4
million shares and equity based awards exercisable for approximately 22.8 million shares were
outstanding but not included in the computation of earnings per share for the six-month period
ended March 28, 2008 as their effect would have been anti-dilutive. If the Company had earned at
least $39.5 million in net income for the six-month period ended March 28, 2008, the Junior Notes
would have been dilutive to earnings per share.
The 2007 Convertible Notes contain
cash settlement provisions, which permit the application of the treasury stock method in
determining potential share dilution associated with the conversion spread should the share price of the
Companys common stock exceed $9.52. It has been the Companys historical practice to cash settle
the principal and interest components of convertible debt instruments, and it is our intention to
continue to do so in the future, including settlement of the 2007 Convertible Notes. These shares have not been included in the computation of earnings per share for the three or
six-month period ended
March 28, 2008 as their effect would have been anti-dilutive. The maximum potential dilution from
the settlement of the 2007 Convertible Notes would be approximately 21.0 million shares.
Junior Notes convertible into approximately 5.5 million shares and equity based awards exercisable
for approximately 22.7 million shares were outstanding but not included in the computation of
earnings per share for the three-month period ended March 30, 2007 as their effect would have been
anti-dilutive. Junior Notes convertible into approximately 5.5 million shares and equity based
awards exercisable for approximately 20.2 million shares were outstanding but not included in the
computation of earnings per share for the six-month period ended March 30, 2007 as their effect
would have been anti-dilutive. If the Company had earned at least $19.8 million and $39.6 million
in net income for the three and six-month periods ended March 30, 2007, respectively, the Junior
Notes would have been dilutive to earnings per share.
14
SKYWORKS SOLUTIONS, INC.
NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS Continued
14. COMPREHENSIVE INCOME (LOSS)
The components of comprehensive income are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
(In thousands) |
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
Net Income |
|
$ |
16,673 |
|
|
$ |
12,197 |
|
|
$ |
35,751 |
|
|
$ |
24,234 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on auction rate securities |
|
|
(768 |
) |
|
|
|
|
|
|
(1,504 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
$ |
15,905 |
|
|
$ |
12,197 |
|
|
$ |
34,247 |
|
|
$ |
24,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This report and other documents we have filed with the Securities and Exchange Commission (SEC)
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, and are subject
to the safe harbor created by those sections. Words such as believes, expects, may, will,
would, should, could, seek, intends, plans, potential, continue, estimates,
anticipates, predicts, and similar expressions or variations or negatives of such words are
intended to identify forward-looking statements, but are not the exclusive means of identifying
forward-looking statements in this report. Additionally, statements concerning future matters such
as the development of new products, enhancements or technologies, sales levels, expense levels and
other statements regarding matters that are not historical are forward-looking statements. Although
forward-looking statements in this report reflect the good faith judgment of our management, such
statements can only be based on facts and factors currently known by us. Consequently,
forward-looking statements involve inherent risks and uncertainties and actual results and outcomes
may differ materially and adversely from the results and outcomes discussed in or anticipated by
the forward-looking statements. A number of important factors could cause actual results to differ
materially and adversely from those in the forward-looking statements. We urge you to consider the
risks and uncertainties discussed in our Annual Report on Form 10-K for the fiscal year ended
September 28, 2007, under the heading Certain Business Risks and in the other documents filed
with the SEC in evaluating our forward-looking statements. We have no plans, and undertake no
obligation, to revise or update our forward-looking statements to reflect any event or circumstance
that may arise after the date of this report. We caution readers not to place undue reliance upon
any such forward-looking statements, which speak only as of the date made.
In this document, the words we, our, ours and us refer only to Skyworks Solutions, Inc. and
not any other person or entity.
RESULTS OF OPERATIONS
THREE AND SIX-MONTHS ENDED MARCH 28, 2008 AND MARCH 30, 2007
The following table sets forth the results of our operations expressed as a percentage of net
revenues for the three and six-month periods ended March 28, 2008:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
|
Six-months Ended |
|
|
|
March 28, |
|
|
March 30, |
|
|
March 28, |
|
|
March 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
|
|
Net revenues |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of goods sold |
|
|
60.2 |
|
|
|
61.9 |
|
|
|
60.5 |
|
|
|
61.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
39.8 |
|
|
|
38.1 |
|
|
|
39.5 |
|
|
|
38.3 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
18.1 |
|
|
|
17.4 |
|
|
|
17.2 |
|
|
|
16.4 |
|
Selling, general and administrative |
|
|
11.6 |
|
|
|
13.2 |
|
|
|
11.8 |
|
|
|
12.7 |
|
Amortization of intangible assets |
|
|
0.9 |
|
|
|
0.3 |
|
|
|
0.9 |
|
|
|
0.3 |
|
Restructuring and special charges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
30.6 |
|
|
|
30.9 |
|
|
|
29.9 |
|
|
|
30.9 |
|
Operating income |
|
|
9.2 |
|
|
|
7.2 |
|
|
|
9.6 |
|
|
|
7.4 |
|
Interest expense |
|
|
(0.8 |
) |
|
|
(2.3 |
) |
|
|
(1.0 |
) |
|
|
(2.0 |
) |
Other income, net |
|
|
0.9 |
|
|
|
1.6 |
|
|
|
1.0 |
|
|
|
1.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
9.3 |
|
|
|
6.5 |
|
|
|
9.6 |
|
|
|
6.7 |
|
Provision for income taxes |
|
|
1.0 |
|
|
|
(0.2 |
) |
|
|
0.9 |
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
8.3 |
% |
|
|
6.7 |
% |
|
|
8.7 |
% |
|
|
6.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
16
GENERAL
During the six-month period ended March 28, 2008, certain key factors contributed to our overall
results of operations and cash flows from operations. More specifically:
|
|
|
We increased revenues by $36.0 million, a 9.6% increase for the six-month
period ended March 28, 2008 as compared to the same period in the prior year, principally
due to diversifying our product portfolio and entering new, adjacent markets, as well
as adding new mobile platforms customers and increasing our front-end module content at
existing customers. |
|
|
|
|
We generated $95.9 million in cash from operations in the six-month period ended March
28, 2008, an increase of $54.3 million from the comparable six-month period ended March 30,
2007. |
|
|
|
|
We expanded our catalog business and worldwide distribution network allowing
us to sell into a broader set of end markets including broadband, industrial, medical,
computing, wireless networking and cellular infrastructure. We increased gross profit by
$11.7 million in the second quarter of fiscal 2008 (a gross profit margin of 39.8%) as
compared to the same period in 2007, and by $18.7 million during the six-month period ended
March 28, 2008 as compared to the same period in the prior year (a gross profit margin of
39.5%). This gross profit margin improvement is principally the result of a richer revenue
mix, higher equipment efficiency cycle times and factory utilization, progress on yield
improvement initiatives and, year-over-year material cost reductions and increased overall
revenues. |
|
|
|
|
We increased operating income to $39.6 million for the first six-month period of fiscal
2008 as compared to operating income of $27.9 million in the corresponding period of fiscal
2007. This 41.9% increase in operating income was primarily the result of margin
improvements driven by improvement in yields, equipment efficiency cycle times, increased
return on invested capital and increased revenue. |
|
|
|
|
In October 2007, we paid $32.6 million in cash to acquire certain assets from two
separate companies. We acquired raw materials, die bank, finished goods, proprietary GaAs
PA/FEM designs and related intellectual property in a business combination from Freescale
Semiconductor. We also acquired sixteen fundamental HBT and RF MEMs patents from another
company in an asset acquisition, and in November 2007 we retired the entire $49.3 million
balance of our Junior Notes and in the process reduced the future potential dilution of our
share base. |
NET REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Net revenues |
|
$ |
201,708 |
|
|
|
11.9 |
% |
|
$ |
180,210 |
|
|
$ |
412,241 |
|
|
|
9.6 |
% |
|
$ |
376,240 |
|
We market and sell our mobile platforms and linear products to top tier Original Equipment
Manufacturers (OEMs) of communication electronic products, third-party Original Design
Manufacturers (ODMs) and contract manufacturers, and indirectly through electronic components
distributors. We periodically enter into strategic arrangements leveraging our broad intellectual
property portfolio by licensing or selling our patents or other intellectual property. We
anticipate continuing this intellectual property strategy in future periods.
Net revenues increased 11.9% for the second fiscal quarter of 2008 as compared to the second fiscal
quarter of 2007. Net revenues for the six-month period ended March 28, 2008 increased 9.6% as
compared to the corresponding period in fiscal 2007. The revenue increases were principally due to
diversifying our product
portfolio by entering new, adjacent markets, as well as adding new mobile platform customers and
increasing our
17
front-end module content at existing customers. Net revenues from our top three
customers decreased to 41% in the second quarter of fiscal 2008 from 53% in the second quarter of
fiscal 2007. Average selling prices declined 4.6% for the six-month period ended March 28, 2008 as
compared to the corresponding period in fiscal 2007.
GROSS PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Gross profit |
|
$ |
80,367 |
|
|
|
17.0 |
% |
|
$ |
68,702 |
|
|
$ |
162,705 |
|
|
|
13.0 |
% |
|
$ |
144,018 |
|
% of net revenues |
|
|
39.8 |
% |
|
|
|
|
|
|
38.1 |
% |
|
|
39.5 |
% |
|
|
|
|
|
|
38.3 |
% |
Gross profit represents net revenues less cost of goods sold. Cost of goods sold consists primarily
of purchased materials, labor and overhead (including depreciation and equity based compensation
expense) associated with product manufacturing.
The increase in gross profit as a percentage of revenue and in aggregate dollars for both the three
and six-month periods ended March 28, 2008 as compared to the corresponding periods in the previous
fiscal year was principally the result of a richer revenue mix as compared to the same periods in
the prior year. Additionally, this gross profit margin improvement is the result of higher
equipment efficiency and factory utilization associated with our hybrid manufacturing model,
progress on yield improvement initiatives, year-over-year material cost reductions and increased
overall revenue. In the three and six-month periods ended March 28, 2008 and the corresponding
periods in 2007, we also benefited from higher contribution margins associated with the licensing
and/or sale of intellectual property.
RESEARCH AND DEVELOPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Research and development |
|
$ |
36,581 |
|
|
|
16.6 |
% |
|
$ |
31,383 |
|
|
$ |
70,675 |
|
|
|
14.4 |
% |
|
$ |
61,795 |
|
% of net revenues |
|
|
18.1 |
% |
|
|
|
|
|
|
17.4 |
% |
|
|
17.2 |
% |
|
|
|
|
|
|
16.4 |
% |
Research and development expenses consist principally of direct personnel costs, costs for
pre-production evaluation and testing of new devices, and design and test tool costs.
The increase in research and development expenses in both aggregate dollars and as a percentage of
net revenues for the three and six-month periods ended March 28, 2008 when compared to the
corresponding periods in the previous fiscal year is predominantly attributable to increased labor
and benefit costs and increases in materials and supplies expenses as we continue to diversify our
handset product area and grow our linear products area.
SELLING, GENERAL AND ADMINISTRATIVE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Selling, general and administrative |
|
$ |
23,346 |
|
|
|
(1.7 |
)% |
|
$ |
23,750 |
|
|
$ |
48,633 |
|
|
|
1.8 |
% |
|
$ |
47,778 |
|
% of net revenues |
|
|
11.6 |
% |
|
|
|
|
|
|
13.2 |
% |
|
|
11.8 |
% |
|
|
|
|
|
|
12.7 |
% |
Selling, general and administrative expenses include personnel costs (legal, accounting, treasury,
human resources, information systems, customer service, etc.), bad debt expense, sales
representative commissions, advertising and other marketing costs.
18
Selling, general and administrative expenses in aggregate dollars remained relatively flat for both
the three months and six months ended March 28, 2008 as compared to the prior periods. Selling,
general and administrative expenses as a percentage of net revenues decreased for both the three
and six-month periods ended March 28, 2008 as compared to the prior periods due to the increase in
revenues for both periods in fiscal 2008.
AMORTIZATION OF INTANGIBLE ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Amortization |
|
$ |
1,871 |
|
|
|
249.1 |
% |
|
$ |
536 |
|
|
$ |
3,803 |
|
|
|
254.8 |
% |
|
$ |
1,072 |
|
% of net revenues |
|
|
0.9 |
% |
|
|
|
|
|
|
0.3 |
% |
|
|
0.9 |
% |
|
|
|
|
|
|
0.3 |
% |
The increase in amortization expense during the three and six-month periods ended March 28, 2008 as
compared to the corresponding periods of fiscal 2007 is due to the acquisitions completed in
October 2007 and the associated amortizable customer relationships, patents, order backlog, foundry
services agreement and developed technology that was acquired. In the six-month period of fiscal
2008, the base of our amortizable intangible assets increased by approximately $13.2 million.
RESTRUCTURING AND SPECIAL CHARGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Restructuring and special charges |
|
$ |
|
|
|
|
0.0 |
% |
|
$ |
|
|
|
$ |
|
|
|
|
100.0 |
% |
|
$ |
5,473 |
|
% of net revenues |
|
|
0.0 |
% |
|
|
|
|
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
|
|
|
|
1.5 |
% |
Restructuring and special charges consist of charges for asset impairments and restructuring
activities, as follows:
On September 29, 2006, the Company exited its baseband product area in order to focus on its core
business encompassing linear products, power amplifiers, front-end modules and radio solutions. The
Company recorded various charges associated with this action.
For the six-month period ended March 30, 2007, we recorded an additional $1.4 million related to
the write-down of technology licenses and design software, and $4.1 million related to lease
obligations associated with the shut-down of certain locations associated with the baseband product
area.
For additional information regarding restructuring charges and liability balances, see Note 10 of
Notes to Unaudited Interim Consolidated Financial Statements.
INTEREST EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Interest expense |
|
$ |
1,769 |
|
|
|
(57.0 |
)% |
|
$ |
4,114 |
|
|
$ |
3,977 |
|
|
|
(46.0 |
)% |
|
$ |
7,363 |
|
% of net revenues |
|
|
0.8 |
% |
|
|
|
|
|
|
2.3 |
% |
|
|
1.0 |
% |
|
|
|
|
|
|
2.0 |
% |
Interest expense is comprised principally of payments in connection with the $50.0 million credit
facility between Skyworks USA, Inc., our wholly owned subsidiary, and Wachovia Bank, N.A.
(Facility Agreement), the
Companys 4.75% convertible subordinated notes (the Junior Notes), and the Companys 1.50% and
1.25% convertible subordinated notes (the 2007 Convertible Notes).
19
The decrease in interest expense both in aggregate dollars and as a percentage of net revenues for
the three and six-month periods ended March 28, 2008 when compared to the corresponding period in
fiscal 2007, is due to the retirement of our higher interest rate Junior Notes.
See Note 7 of Notes to Unaudited Interim Consolidated Financial Statements for information related
to our borrowing arrangements.
OTHER INCOME, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
Other income, net |
|
$ |
1,883 |
|
|
|
(35.1 |
)% |
|
$ |
2,903 |
|
|
$ |
3,933 |
|
|
|
(22.2 |
)% |
|
$ |
5,058 |
|
% of net revenues |
|
|
0.9 |
% |
|
|
|
|
|
|
1.6 |
% |
|
|
1.0 |
% |
|
|
|
|
|
|
1.3 |
% |
Other income, net is comprised primarily of interest income on invested cash balances, other
non-operating income and expense items and foreign exchange gains/losses. The decreases in other
income in both aggregate dollars and as a percentage of net revenues for both the three and
six-month periods ended March 28, 2008 as compared to the prior periods is due to declining
interest rates in 2008 and a slight decrease in invested cash balances.
PROVISION FOR INCOME TAXES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended |
|
Six-months Ended |
|
|
March 28, |
|
|
|
|
|
March 30, |
|
March 28, |
|
|
|
|
|
March 30, |
(dollars in thousands) |
|
2008 |
|
Change |
|
2007 |
|
2008 |
|
Change |
|
2007 |
|
|
|
(Benefit) Provision for income taxes |
|
$ |
2,010 |
|
|
|
(636.0 |
)% |
|
$ |
(375 |
) |
|
$ |
3,799 |
|
|
|
179.2 |
% |
|
$ |
1,361 |
|
% of net revenues |
|
|
1.0 |
% |
|
|
|
|
|
|
(0.2 |
)% |
|
|
0.9 |
% |
|
|
|
|
|
|
0.4 |
% |
In accordance with SFAS 109, Accounting for Income Taxes, management has determined that it is
more likely than not that a portion of our historic and current year income tax benefits will not
be realized. Accordingly, as of March 28, 2008, we have established a valuation allowance of $133.7
million related to our United States deferred tax assets. Deferred tax assets have been recognized
for foreign operations when management believes that it is more likely than not that they will be
recovered during the carryforward period.
Realization of benefits from our net operating losses is dependent upon generating U.S. source
taxable income in the future, which may result in the existing valuation reserve being reversed in
the near term to the extent that the related deferred tax assets no longer require a valuation
allowance under the provisions of SFAS 109.
The provision for income taxes for the three and six-month period ended March 28, 2008 consists of
approximately $1.7 million and $3.6 million, respectively, of U.S. income taxes. Of the total U.S.
income tax provision, $1.2 million and $2.7 million were recorded as a charge reducing the carrying
value of goodwill for the three and six-month periods ended March 28, 2008. The tax benefit of
$(0.4) for the three-months ended March 28, 2007 was the result of recognizing additional tax
benefits related to a reduction in the federal and state deferred tax asset valuation allowance.
20
As noted in our Annual Report on Form 10-K, no benefit has been recognized for certain pre-Merger
deferred tax assets. The benefit from the recognition of these deferred items reduces the carrying
value of goodwill instead of reducing income tax expense. We will evaluate the realization of the
pre-Merger deferred tax assets on a quarterly basis and adjust the provision for income taxes
accordingly. As a result, the effective tax rate may vary in subsequent quarters. In addition,
the provision for the three and six-month periods ended March 28, 2008, consists of approximately
$0.3 million and $0.2 million, respectively, of foreign income taxes incurred by foreign
operations.
On October 1, 2007, Mexico enacted a new flat tax regime which became effective January 1, 2008.
SFAS 109, Accounting for Income Taxes, prescribes that the effect of the new tax on deferred
taxes must be included in tax expense in the period that includes the enactment date. The effect
of recording deferred taxes in the first fiscal quarter of 2008 to the foreign tax provision
(benefit) was $(0.2) million. In addition to the deferred taxes, the Company has accrued flat tax
for the three month period ended March 28, 2008 of $0.1 million.
The Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109, as of the beginning of fiscal year 2008. Of
the total unrecognized tax benefits at March 28, 2008, $0.6 million would impact the effective tax
rate, if recognized. The Company has accrued $0.5 million of interest related to this tax
position. This position could change within the next twelve months because of the expiration of a
statute of limitations period.
LIQUIDITY AND CAPITAL RESOURCES
|
|
|
|
|
|
|
|
|
|
|
Six- months Ended |
|
(dollars in thousands) |
|
March 28, 2008 |
|
|
March 30, 2007 |
|
Cash and cash equivalents at beginning of period |
|
$ |
241,577 |
|
|
$ |
136,749 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
95,873 |
|
|
|
41,642 |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(67,543 |
) |
|
|
(53,477 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
(47,750 |
) |
|
|
27,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
222,157 |
|
|
$ |
152,447 |
|
|
|
|
|
|
|
|
Based on our results of operations for fiscal 2007 and the first six months of fiscal 2008 along
with current trends, we expect our existing sources of liquidity, together with cash expected to be
generated from operations, will allow us to sufficiently fund our research and development, capital
expenditures, debt obligations, purchase obligations, working capital and other cash requirements
for at least the next 12 months. However, we cannot assure you that the capital required to fund
these expenses will be available in the future. In addition, any strategic investments and
acquisitions that we may make to help us grow our business may require additional capital
resources. If we are unable to obtain enough capital to meet our capital needs on a timely basis or
at all, our business and operations could be materially adversely affected.
Cash and cash equivalent balances decreased $25.3 million to $228.5 million at March 28, 2008 from
$253.8 million at September 28, 2007. This overall decrease was the result of payments for
acquisitions of $32.6 million, capital expenditures of $37.4 million, and the retirement of the
entire balance of the Junior Notes of $49.3 million offset by cash generated from operating
activities of $95.9 million. The number of days sales outstanding for the three-month period ended
March 28, 2008 decreased to 74 from 81 for the corresponding period in the previous
fiscal year. Annualized inventory turns for the three-months March 28, 2008 were 5.1 compared to
5.9 for the corresponding period in the previous fiscal year.
21
During the six-month period ended March 28, 2008, we generated $95.9 million in cash from operating
activities as we achieved net income of $35.8 million, experienced an increase in accounts payable
balances of $20.3 million, a decrease in receivables of $2.5 million and a decrease in other assets
of $2.4 million. We incurred multiple non-cash charges (e.g., depreciation, amortization, charge in
lieu of income tax expense, contribution of common shares to savings and retirement plans and
share-based compensation expense) totaling $45.4 million. This was offset by an increase in
inventories of $6.7 million and a decrease in other accrued liabilities of $3.7 million.
Cash used in investing activities for the six-month period ended March 28, 2008, consisted of net
sales of $2.5 million in auction rate securities and investments in demand-driven capital
expenditures of $37.4 million primarily for fabrication and assembly and test capacity. In
addition, we paid $32.6 million in cash to acquire certain assets from two separate companies. We
acquired raw materials, die bank, finished goods, proprietary GaAs PA/FEM designs and related
intellectual property in a business combination from Freescale Semiconductor. We also acquired
sixteen fundamental HBT and RF MEMs patents from another company in an asset acquisition. We
believe a focused program of capital expenditures will be required to sustain our current
manufacturing capabilities. Future capital expenditures will be funded by the generation of
positive cash flows from operations. We may also consider additional future acquisition
opportunities to extend our technology portfolio and design expertise and to expand our product
offerings.
Cash used in financing activities for the six-month period ended March 28, 2008, consisted of the
retirement of the remaining $49.3 million in Junior notes, repurchase of common stock of $1.6
million and cash provided by stock option exercises of $3.0 million.
In connection with our exit of the baseband product area, we anticipate making remaining cash
payments of approximately $2.4 million in future periods. Certain payments on long-term lease
obligations resulting from facility closures and severance payments will be remitted in fiscal 2008
and beyond. We expect our existing sources of liquidity, together with cash expected to be
generated from operations will be sufficient to fund these costs associated with the exit of our
baseband product area.
Our invested cash balances primarily consist of highly rated commercial paper, United States
treasury obligations, United States agency obligations, overnight repurchase agreements backed by
United States treasuries or United States agency obligations, certificates of deposit and foreign
bank obligations. At March 28, 2008, we also held a $3.2 million auction rate security which
provides liquidity through a Dutch auction process. The recent uncertainties in the credit markets
have disrupted the liquidity of this process resulting in failed auctions. Accordingly, in the
first six-month period of fiscal 2008, we recorded unrealized losses on this auction rate security
of approximately $1.5 million. We assessed these declines in fair market value to be temporary and
consider the security to be illiquid until there is a successful auction. Accordingly, the
remaining ARS balance has been reclassified to non-current other assets. We expect to continue to
monitor the liquidity and accounting classification of this security in future periods.
CONTRACTUAL OBLIGATIONS
On November 15, 2007, we retired $49.3 million of Junior Notes from cash funds. Other than this
debt retirement, the contractual obligations disclosure described in our Annual Report on Form 10-K
for the year ended September 28, 2007 has not materially changed since we filed that report. Our
short-term and long-term debt obligations are more fully described in Note 7 of Notes to Unaudited Interim Financial Statements.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
SFAS 157
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS 157) which defines
fair value, establishes a framework for measuring fair value in generally accepted accounting
principles and expands disclosures about fair value measurements. SFAS 157 is effective for
financial statements issued for fiscal years
22
beginning after November 15, 2007 and interim periods
within those fiscal years. The Company has not yet determined the impact that SFAS 157 will have on
its results from operations or financial position.
SFAS 159
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS 159) including an amendment of SFAS No. 115, which permits entities
to choose to measure many financial instruments and certain other items at fair value that are not
currently required to be measured at fair value. SFAS 159 is effective for the Company beginning in
fiscal 2009. The Company is currently evaluating SFAS 159 and the impact that it may have on
results of operations or financial position.
SFAS 141(R)
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (SFAS 141(R)). SFAS 141(R) applies
to any transaction or other event that meets the definition of a business combination. Where
applicable, SFAS No. 141(R) establishes principles and requirements for how the acquirer recognizes
and measures identifiable assets acquired, liabilities assumed, noncontrolling interest in the
acquiree and goodwill or gain from a bargain purchase. In addition, SFAS 141(R) determines what
information to disclose to enable users of the financial statements to evaluate the nature and
financial effects of the business combination. This statement is to be applied prospectively for
fiscal years beginning after December 15, 2008. The Company is in the process of evaluating the
impact of SFAS No. 141(R) on its Consolidated Financial Statements.
SFAS 160
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, An Amendment of ARB No. 51 (SFAS 160). SFAS 160 amends ARB 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of
a subsidiary. It also amends certain of ARB 51s consolidation procedures for consistency with the
requirements of SFAS 141(R). This statement is effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15, 2008. The statement
shall be applied prospectively as of the beginning of the fiscal year in which the statement is
initially adopted. The Company is currently evaluating SFAS 160 and the impact that it may have on
results of operations or financial position.
SFAS 161
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activitiesan amendment of FASB Statement No. 133 (SFAS 161). SFAS 161 amends FASB Statement No. 133 to
require enhanced disclosures about an entitys derivative and hedging activities thereby improving
the transparency of financial reporting. Entities are required to provide enhanced disclosures
about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and
related hedged items are accounted for under Statement 133 and its related interpretations, and (c)
how derivative instruments and related hedged items affect an entitys financial position,
financial performance, and cash flows. This Statement is effective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008, with early application
encouraged. The Company is currently evaluating SFAS 161 and the impact that it may have on its
Consolidated Financial Statements.
PROPOSED ACCOUNTING PRONOUNCEMENTS
In August 2007, the FASB released proposed Financial Statement of Position APB 14-a, Accounting For
Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash
Settlement)
(FSP APB 14-a) that would alter the accounting treatment for convertible debt instruments that
allow for either mandatory or optional cash settlements. FSP APB 14-a, if adopted as proposed,
would significantly impact the accounting associated with the Companys $200.0 million 2007
Convertible Notes. This FSP would require the Company to recognize additional (non-cash) interest
expense based on the market rate for similar debt instruments
23
without the conversion feature.
Furthermore, it would require recognizing interest expense in prior periods pursuant to the
proposed retrospective accounting treatment. The proposed FSP was issued for a 45-day comment
period. The FASB began its re-deliberations of the guidance in FSP APB 14-a in the first quarter of
2008 and it is anticipated that the final FSP will be issued in the second calendar quarter of 2008
and is expected to be effective for fiscal years beginning after December 15, 2008. The Company
would not be required to adopt this FSP until the first quarter of fiscal 2010.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are subject to market risks, such as changes in foreign currency exchange rates and interest
rates. Our financial instruments include cash and cash equivalents, short-term investments,
short-term debt and long-term debt. Our main investment objective is the preservation of investment
capital. Consequently, we invest with only high-credit-quality issuers and we limit the amount of
our credit exposure to any one issuer. We do not use derivative instruments for speculative or
investment purposes. There have been no material changes in market risk exposures from those
disclosed in our Annual Report on Form 10-K for the fiscal year ended September 28, 2007.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
Our management, with the participation of our chief executive officer and chief financial officer,
evaluated the effectiveness of our disclosure controls and procedures as of March 28, 2008. The
term disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act, means controls and other procedures of a company that are designed to ensure that
information required to be disclosed by a company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in
the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a company in the
reports that it files or submits under the Exchange Act is accumulated and communicated to the
companys management, including its principal executive and principal financial officers, as
appropriate to allow timely decisions regarding required disclosure. Management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable
assurance of achieving their objectives and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. Based on the
evaluation of our disclosure controls and procedures as of March 28, 2008, our chief executive
officer and chief financial officer concluded that, as of such date, our disclosure controls and
procedures were effective at the reasonable assurance level.
(b) Changes in internal controls over financial reporting.
No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act) occurred during the fiscal quarter ended March 28, 2008 that has
materially affected, or is reasonably likely to materially affect, Skyworks internal control over
financial reporting.
PART II OTHER INFORMATION
Item 1A. Risk Factors
There have been no significant changes in the risk factors disclosed in Item 1A of our Annual
Report on Form 10-K for the year ended September 28, 2007.
24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a) Recent Sales of Unregistered Securities
During the quarter ended March 28, 2008, the Company issued an aggregate of 100,000 shares of
restricted common stock to the eight (8) non-employee directors on its Board of Directors. These
restricted stock grants were made pursuant to the Companys 2008 Director Long-Term Incentive Plan
and the standard forms of award agreements adopted by the Company in connection with the plan. No
consideration was received by the Company in connection with the issuance of the restricted common
stock. The foregoing issuances of restricted stock were completed pursuant to Section 4(2) of the
Securities Act (and/or Regulation D promulgated thereunder) as a transaction by an issuer not
involving a public offering. The shares of restricted common stock are deemed restricted
securities for the purposes of the Securities Act.
(c) The following table provides information regarding repurchases of common stock made by us
during the fiscal quarter ended March 28, 2008:
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Maximum Number (or |
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Approximately |
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Total Number of |
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Dollar Value) of |
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Shares Purchased as |
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Shares that May Yet |
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Part of Publicly |
|
Be Purchased Under |
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Total Number of |
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Average Price Paid |
|
Announced Plans or |
|
the Plans or |
Period |
|
Shares Purchased |
|
per Share |
|
Programs |
|
Programs |
February 24, 2008 |
|
|
7,075 |
(1) |
|
$ |
8.74 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
February 29, 2008 |
|
|
634 |
(1) |
|
$ |
8.26 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
March 6, 2008 |
|
|
1,604 |
(1) |
|
$ |
8.06 |
|
|
|
N/A |
(2) |
|
|
N/A |
(2) |
March 7, 2008 |
|
|
22,435 |
(1) |
|
$ |
7.78 |
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|
|
N/A |
(2) |
|
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N/A |
(2) |
March 20, 2008 |
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5,319 |
(1) |
|
$ |
6.71 |
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|
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N/A |
(2) |
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N/A |
(2) |
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(1) |
|
All shares of common stock reported in the table above were repurchased by Skyworks at the
fair market value of the common stock on February 24, 2008, February 29, 2008, March 6, 2008,
March 7, 2008, and March 20, 2008, respectively, in connection with the satisfaction of tax
withholding obligations under restricted stock agreements between Skyworks and certain of its
key employees. |
|
(2) |
|
We have no publicly announced plans or programs. |
Item 4. Submission of Matters to a Vote of Security Holders
Our annual meeting of shareholders was held on March 27, 2008 in Bedford, Massachusetts. At the
meeting, the following matters were voted on by our shareholders and approved by the following
votes:
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Shares Voted |
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Shares Voted |
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Votes Withheld/ |
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For |
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Against |
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Abstentions |
Election of directors: |
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|
|
Proposal to elect
three (3) members of
the Board of Directors
of the Company as
Class III Directors
with terms expiring at
the fiscal year 2011
Annual Meeting of
Stockholders: |
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David J. Aldrich |
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127,719,727 |
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16,685,381 |
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Moiz M. Beguwala |
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127,634,933 |
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16,770,176 |
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David P. McGlade |
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126,954,704 |
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17,450,405 |
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Proposal to approve
the adoption of the
Companys 2008
Director Long-Term
Incentive Plan |
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99,696,165 |
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22,863,377 |
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409,234 |
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|
Proposal to approve an
amendment to the
Companys 2002
Employee Stock
Purchase Plan to
increase the aggregate
number of shares
authorized for
issuance under the
plan by 2.25 million
shares |
|
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121,523,340 |
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1,107,872 |
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337,563 |
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Proposal to ratify the
selection by the
Companys Audit
Committee of KPMG LLP
as the independent
registered public
accounting firm for
the Company for fiscal
year 2008 |
|
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142,815,747 |
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1,253,053 |
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366,310 |
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25
Item 6. Exhibits
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|
Number |
|
Description |
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|
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10.H*
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Skyworks Solutions, Inc. Non-Qualified Employee Stock Purchase Plan, as amended |
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10.W*
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|
Severance and Change in Control Agreement between the Company and David J.
Aldrich dated January 22, 2008 |
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10.X*
|
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Severance and Change in Control Agreement between the Company and Liam K.
Griffin dated January 22, 2008 |
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10.AA*
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|
Severance and Change in Control Agreement between the Company and George M.
LeVan dated January 22, 2008 |
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10.BB*
|
|
Severance and Change in Control Agreement between the Company and Gregory L.
Waters dated January 22, 2008 |
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10.DD*
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Severance and Change in Control Agreement between the Company and Mark V.B.
Tremallo dated January 22, 2008 |
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10.II*
|
|
Severance and Change in Control Agreement between the Company and Donald W.
Palette dated January 22, 2008 |
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10.KK*
|
|
Severance and Change in Control Agreement between the Company and Bruce J.
Freyman dated January 22, 2008 |
|
|
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10.LL*
|
|
Severance and Change in Control Agreement between the Company and Stanley A.
Swearingen dated January 22, 2008 |
|
|
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10.MM*
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Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
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10.NN*
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|
Form of Restricted Stock Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
|
|
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10.OO*
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|
Form of Stock Option Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
|
|
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10.PP*
|
|
Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan, as amended |
|
|
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31.1*
|
|
Certification of the Companys Chief Executive Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a- 14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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31.2*
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|
Certification of the Companys Chief Financial Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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32.1*
|
|
Certification of the Companys Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
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32.2*
|
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Certification of the Companys Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
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SKYWORKS SOLUTIONS, INC. |
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Date: May 7, 2008
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By:
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/s/ David J. Aldrich
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David J. Aldrich, President and Chief |
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Executive Officer (Principal Executive Officer) |
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By:
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/s/ Donald W. Palette |
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Donald W. Palette, Chief Financial Officer |
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Vice President (Principal Accounting and Financial Officer) |
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27
EXHIBIT INDEX
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Number |
|
Description |
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10.H
|
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Skyworks Solutions, Inc. Non-Qualified Employee Stock Purchase Plan, as amended |
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|
10.W
|
|
Severance and Change in Control Agreement between the Company and David J.
Aldrich dated January 22, 2008 |
|
|
|
10.X
|
|
Severance and Change in Control Agreement between the Company and Liam K.
Griffin dated January 22, 2008 |
|
|
|
10.AA
|
|
Severance and Change in Control Agreement between the Company and George M.
LeVan dated January 22, 2008 |
|
|
|
10.BB
|
|
Severance and Change in Control Agreement between the Company and Gregory L.
Waters dated January 22, 2008 |
|
|
|
10.DD
|
|
Severance and Change in Control Agreement between the Company and Mark V.B.
Tremallo dated January 22, 2008 |
|
|
|
10.II
|
|
Severance and Change in Control Agreement between the Company and Donald W.
Palette dated January 22, 2008 |
|
|
|
10.KK
|
|
Severance and Change in Control Agreement between the Company and Bruce J.
Freyman, dated January 22, 2008 |
|
|
|
10.LL
|
|
Severance and Change in Control Agreement between the Company and Stanley A.
Swearingen dated January 22, 2008 |
|
|
|
10.MM
|
|
Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
|
|
|
10.NN
|
|
Form of Restricted Stock Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
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10.OO
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|
Form of Stock Option Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan |
|
|
|
10.PP
|
|
Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan, as amended |
|
|
|
31.1
|
|
Certification of the Companys Chief Executive Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2
|
|
Certification of the Companys Chief Financial Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1
|
|
Certification of the Companys Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
|
|
|
32.2
|
|
Certification of the Companys Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 |
28
exv10wh
EXHIBIT 10.H
SKYWORKS SOLUTIONS, INC.
NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The Skyworks Solutions, Inc. Non-Qualified Employee Stock Purchase Plan (hereinafter the Plan),
effective as of October 1, 2002, is intended to provide a method whereby employees of participating
organizations (as defined in Article 17) of Skyworks Solutions, Inc. (the Company) will have an
opportunity to acquire a proprietary interest in the Company through the purchase of shares of the
Companys Common Stock. It is the intention of the Company that this Plan authorize the grant of
purchase rights and issuance of Common Stock which do not qualify as an Employee Stock Purchase
Plan under section 423 of the United States Internal Revenue Code of 1986, as amended (the
Internal Revenue Code).
2. ELIGIBLE EMPLOYEES.
All employees of any of the participating organizations of the Company who are employed by the
Company or a participating organization at least ten (10) business days prior to the first day of
the applicable Offering Period or any Special Offering Period (each as defined below), or at such
other time on or before the first day of the applicable Offering Period or any Special Offering
Period, as determined by the Committee (the Eligibility Date), shall be eligible to participate
in and receive rights under this Plan to purchase Common Stock. Except as otherwise provided
herein, persons who become eligible employees after the Eligibility Date shall be eligible to
receive purchase rights on the first day of the next succeeding Offering Period on which purchase
rights are granted to eligible employees under the Plan. In no event may an employee be granted a
purchase right if such employee, immediately after the purchase right is granted, owns stock
possessing five (5%) percent or more of the total combined voting power or value of all classes of
stock of the Company or of its parent corporation or subsidiary corporation as the terms parent
corporation and subsidiary corporation are defined in Section 424(e) and (1) of the Internal
Revenue Code. For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Internal Revenue Code shall apply and stock which the employee may purchase
under outstanding purchase rights shall be treated as stock owned by the employee. All employees
who participate in the Plan shall have the same rights and privileges under the Plan except for
differences which may be mandated by local law and except that employees participating in a
sub-plan adopted pursuant to Article 26 need not have the same rights and privileges as other
employees participating in the Plan. The Committee (as defined in Article 18) may impose
restrictions on eligibility and participation of employees who are officers and directors to
facilitate compliance with federal or state securities laws or foreign laws.
3. STOCK SUBJECT TO THE PLAN.
The stock subject to the purchase rights granted hereunder shall be shares of the Companys
authorized but unissued Common Stock or shares of Common Stock reacquired by the Company, including
shares purchased in the open market. The aggregate number of shares which may be issued pursuant to
the Plan is 1,020,000 for all Offering Periods, including any Special Offering Period, subject to
increase or decrease by reason of stock split-ups, reclassifications, stock dividends, changes in
par value and the like. If any purchase right granted under the Plan shall expire or terminate for
any reason without having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject to such purchase right shall again be available
under the Plan. If the number of shares of Common Stock available for any
Offering Period, including any Special Offering Period, is insufficient to satisfy all purchase
requirements for that Offering Period, the available shares for that Offering Period shall be
apportioned among participating employees in proportion to their purchase rights.
4. OFFERING PERIODS AND STOCK PURCHASE RIGHTS.
There shall be Offering Periods and Special Offering Periods during which payroll deductions or
permitted cash contributions will be accumulated under the Plan. Each Offering Period, including
any Special Offering Period, includes only regular paydays falling within it, The Committee shall
be expressly permitted to establish the Offering Periods and the Special Offering Periods,
including the Offering Commencement Date and Offering Termination Date (as both defined below) of
any Offering Period or Special Offering Period, under the Plan; provided, however, that in no event
shall any Offering Period or Special Offering Period extend for more than twenty-four (24) months.
Subject to the foregoing, the Offering Periods shall generally commence and end as follows:
|
|
|
Offering Period |
|
Offering Period |
Commencement Dates |
|
Termination Dates |
Each February 1
Each August 1
|
|
Each July 31
Each January 31 |
Provided, however, that (i) the Offering Commencement Date and Offering Termination Date of the
initial Offering Period under this Plan shall be October 1, 2002 and March 31, 2003, respectively,
and (ii) the Offering Commencement Date and Offering Termination Date of the Offering Period
immediately following the initial Offering Period under this Plan shall be April 1, 2003 and July
31, 2003, respectively.
Notwithstanding the foregoing, in the event that the Committee adopts a sub-plan or establishes
eligibility pursuant to Article 26 hereof for the employees of a particular organization or
location, there will be a Special Offering Period (the Special Offering Period) that will begin
ten (10) business days after the adoption of such a sub-plan or such establishment of eligibility
for all employees that particular organization or location who are eligible as of the date of the
Offering Commencement Date of the Special Offering Period.
The Offering Commencement Date is the first day of each Offering Period, including any Special
Offering Period. The Offering Termination Date is the applicable date on which an Offering Period
ends under this Article 4. In the case of a Special Offering Period, the Offering Termination Date
is the date which is the Offering Termination Date for the regular Offering Period in which the
Offering Commencement Date for such Special Offering Period occurs unless otherwise decided by the
Committee in its discretion.
On each Offering Commencement Date, the Company will grant to each eligible employee who is then a
participant in the Plan a purchase right to purchase on the Offering Termination Date at the
Purchase Right Exercise Price, as hereinafter provided, that number of full shares of Common Stock
reserved for the purpose of the Plan, up to a maximum of 1,000 shares, subject to increase or
decrease by reason of stock split-ups, reclassifications, stock dividends, changes in par value and
the like; provided that such employee remains eligible to participate in the Plan throughout such
Offering Period or Special Offering Period, as the ease may be. If the eligible employees
accumulated payroll deductions or permitted cash contributions on the Offering Termination Date
would enable the eligible employee to purchase more than 1,000 shares except for the 1,000-share
2
limitation, the excess of the amount of the accumulated payroll deductions or permitted cash
contributions over the aggregate Purchase Right Exercise Price of the 1,000 shares shall be
refunded to the eligible employee by the Company as soon as administratively practicable, without
interest (except where required by local law as determined by the Committee). The Purchase Right
Exercise Price for each Offering Period, including any Special Offering Period, shall be the lesser
of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering
Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock
on the Offering Termination Date, in either case rounded up to the next whole cent. in the event of
an increase or decrease in the number of outstanding shares of Common Stock through stock splits,
reclassifications, stock dividends, changes in par value and the like, an appropriate adjustment
shall be made in the number of shares and Purchase Right Exercise Price per share provided for
under the Plan, either by a proportionate increase in the number of shares and proportionate
decrease in the Purchase Right Exercise Price per share, or by a proportionate decrease in the
number of shares and a proportionate increase in the Purchase Right Exercise Price per share, as
may be required to enable an eligible employee who is then a participant in the Plan to acquire on
the Offering Termination Date that number of full shares of Common Stock as his accumulated payroll
deductions or permitted cash contributions on such date will pay for at a price equal to the lesser
of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering
Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock
on the Offering Termination Date, in either case rounded up to the next whole cent, as so adjusted.
For purposes of this Plan, the term fair market value means, if the Common Stock is listed on a
national securities exchange or is on the (U.S.) National Association of Securities Dealers
Automated Quotation (Nasdaq) Global Select Market system, the closing sale price of
the Common Stock on the relevant date on such exchange or as reported on Nasdaq or, if the
Common Stock is traded in the over-the-counter securities market, but not on the Nasdaq Global
Select Market, the closing bid quotation for the Common Stock, each as published in The Wall Street
Journal, if no shares of Common Stock are traded on the Offering Commencement Date or Offering
Termination Date, the fair market value will be determined on the next regular business day on
which shares of Common Stock are traded.
For purposes of this Plan the term business day as used herein means a day on which there is
trading on the Nasdaq Global Select Market or such national securities exchange on which the Common
Stock is listed.
No employee shall be granted a purchase right which permits the employee to purchase Common Stock
under the Plan and any similar plans of the Company or any parent or subsidiary corporations at a
rate which exceeds $25,000 of fair market value of such stock (determined at the time such purchase
right is granted) for each calendar year in which such purchase right is outstanding at any time.
If the participants accumulated payroll deductions or permitted cash contributions on the Offering
Termination Date would otherwise enable the participant to purchase Common Stock in excess of the
$25,000 limitation described in this paragraph, the excess of the amount of the accumulated payroll
deductions or permitted cash contributions over the aggregate Purchase Right Exercise Price of the
shares actually purchased shall be refunded to the participant by the Company or its participating
organization as soon as administratively practicable, without interest (except where required by
local law as determined by the Committee).
3
5. EXERCISE OF PURCHASE RIGHT.
Each eligible employee who continues to be a participant in the Plan on the Offering Termination
Date shall be deemed to have exercised his or her purchase right on such date and shall be deemed
to have purchased from the Company such number of full shares of Common Stock reserved for the
purpose of the Plan as his or her accumulated payroll deductions or permitted cash contributions on
such date will pay for at the Purchase Right Exercise Price subject to the 1000-share limit of the
purchase right and the $25,000 limitation described in Article 4. If a participant is not an
employee on the Offering Termination Date and throughout an Offering Period or Special Offering
Period, he or she shall not be entitled to exercise his or her purchase right under the Plan.
If a participants accumulated payroll deductions or permitted cash contributions in his or her
account are based on a currency other than the U.S. dollar, then on the Offering Termination Date,
the accumulated payroll deductions or permitted cash contributions in his or her account will be
converted into an equivalent value of U.S. dollars based upon the U.S. dollar-foreign currency
exchange rate in effect on that date, as reported in The Wall Street Journal, provided that such
conversion does not result in an Purchase Right Exercise Price which is, in fact, less than the
lesser of an amount equal to 85% of the fair market value of the Common Stock on the Offering
Commencement Date or 85% of the fair market value of the Common Stock on the Offering Termination
Date. The Committee shall have the right to change such conversion date, as they deem appropriate
to effectively purchase shares on any Offering Termination Date.
6. AUTHORIZATION FOR ENTERING PLAN.
An eligible employee may enter the Plan by following a written, electronic or other enrollment
process, including a payroll deduction authorization, as prescribed by the Committee. Except as may
otherwise be established by the Committee, all enrollment authorizations shall be effective only if
delivered to the designated Plan Administrator(s) (as defined in Article 1 8) in accordance with
the prescribed procedures not later than the Eligibility or such other time as determined by the
Committee. Participation may be conditioned on an eligible employees consent to transfer and
process personal data and on acknowledgment and agreement to Plan terms and other specified
conditions.
The Company or its participating organization will accumulate and hold for the employees account
the accumulated payroll deductions or cash contributions. No interest will be paid thereon (except
where required by local law as determined by the Committee). In jurisdictions in which
participating employees may contribute to the Plan through payroll deductions, they may not make
any separate cash payments into their account.
Unless an employee files a new enrollment authorization, or withdraws from the Plan, his or her
payroll deductions or cash contribution and purchases under the enrollment authorization he or she
has on file under the Plan shall continue as long as the Plan remains in effect. An employee may
increase or decrease the amount of his or her payroll deductions or permitted cash contributions as
of the next Offering Commencement Date by filing a revised payroll deduction authorization or cash
contribution election in accordance with the procedures then applicable to such actions. Except as
may otherwise be established by the Committee, all revised authorizations and elections shall be
effective only if delivered to the designated Plan Administrator(s) in accordance with the
prescribed procedures not later than ten (10) business days before the next Offering Commencement
Date.
4
7. MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS AND PERMITTED CASH CONTRIBUTIONS.
An employee may authorize payroll deductions or make cash contributions in an aggregate amount of
not less than one percent (1%) and not more than ten percent (10%) (in whole number percentages
only) of his or her eligible compensation. Such deductions or the amount of the cash contribution
shall be determined based on the employees election in effect on the payday on which such eligible
compensation is paid. An employee may not make any additional payments into such account. Except as
otherwise required by local laws, eligible compensation means the wages as defined in Section
3401(a) of the internal Revenue Code, determined without regard to any rules that limit
compensation included in wages based on the nature or location or employment or services performed,
including without limitation base pay, shift premium, overtime, gain sharing (profit sharing),
incentive compensation, bonuses and commissions and all other payments made to the employee for
services as an employee during the applicable payroll period, and excluding the value of any
qualified or non-qualified stock option or purchase right granted to the employee to the extent
such value is includible in the taxable wages, reimbursements or other expense allowances, fringe
benefits, moving expenses, deferred compensation, and welfare benefits, but determined prior to any
exclusions for any amounts deferred under Sections 125, 401(k), 402(e)(3), 402(h)(1)(B), 403(b) or
457(b) of the Internal Revenue Code or for certain contributions described in Section 457(h)(2) of
the Internal Revenue Code that are treated as Company contributions.
8. UNUSED PAYROLL DEDUCTIONS AND PERMITTED CASH CONTRIBUTIONS.
Only full shares of Common Stock may be purchased. Any balance remaining in an employees account
after a purchase will be reported to the employee and will be carried forward to the next Offering
Period. However, in no event will the amount of the unused payroll deductions or permitted cash
contributions carried forward from an Offering Period exceed the Purchase Right Exercise Price per
share for that Offering Period or Special Offering Period, as the case may be. If for any Offering
Period, including any Special Offering Period, the amount of unused payroll deductions or permitted
cash contributions should exceed the Purchase Right Exercise Price per share, the amount of the
excess for any participant shall be refunded to such participant as soon as administratively
practicable, without interest (except where required by local law as determined by the Committee).
9. CHANGE IN PAYROLL DEDUCTIONS OR PERMITTED CASH CONTRIBUTIONS.
Deductions or cash contributions may not be increased or decreased during an Offering Period or
Special Offering Period, as the case may be.
10. WITHDRAWAL FROM THE PLAN.
An employee may withdraw from the Plan and withdraw all but not less than all of the payroll
deductions or permitted cash contributions credited to his or her account under the Plan prior to
the Offering Termination Date by completing and filing a withdrawal notification with the
designated Plan Administrator(s) in accordance with the prescribed procedures, in which event the
Company will refund as soon as administratively practicable without interest (except where required
by local law as determined by the Committee) the entire balance of such employees deductions or
cash contributions __ not previously used to purchase Common Stock under the Plan. Except as may
otherwise be established by the Committee, all withdrawals shall be effective only if delivered to
the
5
designated Plan Administrator(s) in accordance with the prescribed procedures not later than ten
(10) business days before the Offering Termination Date.
An employee who withdraws from the Plan is like an employee who has never entered the Plan; the
employees rights under the Plan will be terminated and no further payroll deductions or cash
contributions will be made. To reenter, such an employee must re-enroll pursuant to the provisions
of Article 6 before the next Offering Commencement Date which cannot, however, become effective
before the beginning of the next Offering Period or Special Offering Period following his
withdrawal.
11. ISSUANCE OF STOCK.
As soon as administratively practicable after each Offering Period, including any Special Offering
Period, the Company shall deliver (by electronic or other means) to the participant the Common
Stock purchased under the Plan, except as specified below. The Committee may permit or require that
the Common Stock shares be deposited directly with a broker or agent designated by the Committee,
and the Committee may authorize electronic or automated methods of share transfer. In addition, the
Committee may establish other procedures to ensure that the Companys and its subsidiaries
applicable tax withholding obligations are satisfied.
12. NO TRANSFER OR ASSIGNMENT OF EMPLOYEES RIGHTS.
An employees rights under the Plan are his or hers alone and may not be transferred or assigned
to, or availed of by, any other person. Any purchase right granted to an employee may be exercised
only by him or her, except as provided in Article 13 in the event of an employees death.
13. TERMINATION OF EMPLOYEES RIGHTS.
Except as set forth in the last paragraph of this Article 13, an employees rights under the Plan
will terminate when he or she ceases to be an employee because of retirement, resignation, lay-off,
discharge, death, change of status, or fails to meet the applicable requirements for eligibility in
the Plan, or for any other reason. Notwithstanding anything to the contrary contained in Article
10, a withdrawal notice will be considered as having been received from the employee on the day his
or her employment ceases, and all payroll deductions or permitted cash contributions not used to
purchase Common Stock will be refunded as soon as administratively feasible without interest
(except where required by local law as determined by the Committee).
Notwithstanding anything to the contrary contained in Article 10, if an employees payroll
deductions or permitted cash contributions are interrupted by any legal process, a withdrawal
notice will be considered as having been received from him or her on the day the interruption
occurs.
Upon termination of the participating employees employment because of death, the authorized legal
representative of the employees estate shall have the right to elect, by written notice given to
the Plan Administrators prior to the earlier of the expiration of the thirty (30) day period
commencing with the date of the death of the employee or the first Offering Termination Date
following the date of the death of the employee, either (i) to withdraw, without interest (except
where required by local law as determined by the Committee), all of the payroll deductions or
permitted cash contributions credited to the employees account under the Plan, or (ii) to exercise
the employees purchase right for the purchase of shares of Common Stock on the next Offering
Termination Date following the date of the employees death for the purchase of that number of full
shares of Common Stock
6
reserved for the purpose of the Plan which the accumulated payroll deductions or permitted cash
contributions in the employees account at the date of the employees death will purchase at the
applicable Purchase Right Exercise Price (subject to the limitations set forth in Article 4), and
any excess in such account (in lieu of fractional shares) will be paid to the employees estate as
soon as administratively practicable, without interest (except where required by local law as
determined by the Committee). In the event that no such written notice of election shall be duly
received by the Plan Administrators, the payroll deductions or permitted cash contributions
credited to the employees account at the date of the employees death will be paid to the
employees estate as soon as administratively practicable, without interest (except where required
by local law as determined by the Committee).
14. TERMINATION AND AMENDMENTS TO PLAN.
The Plan may be terminated at any time by the Companys Board of Directors. It will terminate in
any case on December 31, 2012, or if sooner, when all of the shares of Common Stock reserved for
the purposes of the Plan have been purchased. Upon such termination or any other termination of the
Plan, all payroll deductions or permitted cash contributions not used to purchase Common Stock will
be refunded without interest (except where required by local law as determined by the Committee).
The Committee or the Board of Directors may, in its sole discretion, insofar as permitted by law,
adopt amendments to the Plan from time to time,
15. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN.
The Plan is intended to provide shares of Common Stock for investment and not for resale. The
Company does not, however, intend to restrict or influence any employee in the conduct of his or
her own affairs. An employee may, therefore, sell stock purchased under the Plan at any time the
employee chooses, subject to compliance with any applicable securities laws and subject to any
restrictions imposed under Articles 11 and 25. The employee assumes the risk of any market
fluctuations in the price of such Common Stock.
16. COMPANYS OFFERING OF EXPENSES RELATED TO PLAN.
The Company will bear all costs of administering and carrying out the Plan.
17. PARTICIPATING ORGAMZATIONS.
The term participating organizations shall mean any present or future subsidiary, organization or
business unit of the Company which is designated by the Committee to participate in the Plan.
18. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee of disinterested directors as that term is defined
in Rule 16b-3 under the U.S. Securities Exchange Act of 1934, as amended, appointed by the Board of
Directors of the Company (the Committee). The Committee shall consist of not less than two
members of the Companys Board of Directors. The Board of Directors may from time to time remove
members from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall
be filled by the Board of Directors. No member of the Committee shall be eligible to participate in
the Plan while serving as a member of the Committee.
7
The Committee shall select one of its members as Chairman, and shall hold meetings at such times
and places as it may determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee, shall be the valid acts of the Committee.
The Committee shall have the authority to construe and interpret the provisions of the Plan and of
any purchase rights granted under the Plan, and to establish, amend and revoke rules and
regulations for the administration of the Plan. The Committee, in the exercise of this power, may
correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective. The interpretation and construction
by the Committee of any provisions of the Plan or of any purchase rights granted under it shall be
final. The Committee may from time to time adopt such rules and regulations for carrying out the
Plan as it may deem best. Without limiting the foregoing, the Committee shall have the power,
subject to, and within the limitations of, the express provisions of the Plan:
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(i) |
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to determine when and how purchase rights to purchase shares of Common Stock shall be
granted and the provisions of each Offering Period or Special Offering Period (which need
not be identical); |
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(ii) |
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to designate from time to time which participating organization of the Company shall be
eligible to participate in the Plan; |
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(iii) |
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to determine the Offering Commencement Date and Offering Termination Date of any
Offering Period or Special Offering Period; |
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(iv) |
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to increase or decrease the maximum number of shares which may be purchased by an
eligible employee in any Offering Period or Special Offering Period; |
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(v) |
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to amend the Plan as provided in Article 14; and |
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(vi) |
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generally, to exercise such powers and to perform such acts as it deems necessary or
expedient to promote the best interest of the Company and the participating organizations. |
The Committee may, insofar as permitted by applicable laws and regulations, limit participation in
the Plan, for participating organizations, to employees whose customary employment is greater than
twenty (20) hours per week and is more than five (5) months in any calendar year.
With respect to persons subject to Section 16 of the Securities and Exchange Act of 1934, as
amended, transactions under the Plan are intended to comply with all applicable conditions of Rule
1 6b-3 or its successors under said Act. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
No member of the Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any purchase right granted under it.
The Company shall indemnify each member of the Board of Directors and the Committee to the fullest
extent permitted by law with respect to any claim, loss, damage or expense (including counsel fees)
arising in connection with their responsibilities under this Plan.
8
The Committee may delegate to one or more individuals the day-to-day administration of the Plan.
Without limitation, subject to the terms and conditions of this Plan, the President, the Chief
Financial Officer of the Company, and any other officer of the Company or committee of officers or
employees designated by the Committee (collectively, the Plan Administrators), shall each be
authorized to determine the methods through which eligible employees may elect to participate,
amend their participation, or withdraw from participation in the Plan, and establish methods of
enrollment by means of a manual or electronic form of authorization or an integrated voice response
system. The Plan Administrators are further authorized to determine the matters described in
Articles 11 and 25 concerning the means of issuance of Common Stock and the procedures established
to ensure that the Companys applicable tax withholding obligations are satisfied.
As soon as administratively practicable after the end of each Offering Period and the Special
Offering Period, the Plan Administrators shall prepare and distribute or make otherwise readily
available by electronic means or otherwise to each participating employee in the Plan information
concerning the amount of the participating employees accumulated payroll deductions or permitted
cash contributions as of the Offering Termination Date, the Purchase Right Exercise Price for such
Offering Period or Special Offering Period, the number of shares of Common Stock purchased by the
participating employee with the participating employees accumulated payroll deductions or
permitted cash contributions, and the amount of any unused payroll deductions or permitted cash
contributions either to be carried forward to the next Offering Period or returned to the
participating employee without interest or otherwise distributed or retained as required by local
law as determined by the Committee.
19. PARTICIPANTS NOT STOCKHOLDERS.
Neither the granting of a purchase right to an employee nor the deductions from his or her pay
shall make such employee a stockholder of the Company with respect to the shares covered by such
purchase right until such shares have been purchased by and issued to him or her.
20. APPLICATION OF FUNDS.
The proceeds received by the Company and the participating organization for the purchase Common
Stock pursuant to purchase rights granted under the Plan may be used for any corporate purposes,
and the Company shall not be obligated to segregate participating employees payroll deductions or
permitted cash contributions, unless required by applicable laws and regulations.
21. GOVERNMENTAL REGULATION.
The Companys obligation to sell and deliver shares of the Companys Common Stock under this Plan
is subject to the approval of any governmental authority required in connection with the
authorization, issuance or sale of such stock.
In this regard, the Board of Directors may, in its discretion, require as a condition to the
exercise of any purchase right that a Registration Statement under the U.S. Securities Act of 1933,
as amended, with respect to the shares of Common Stock reserved for issuance upon exercise of the
purchase right shall be effective, and that all other applicable provisions of U.S. state and
federal and applicable foreign law have been satisfied.
9
22. TRANSFERABILITY.
Neither payroll deductions or permitted cash contributions credited to an employees account nor
any rights with regard to the exercise of a purchase right or to receive stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the employee. Any such
attempted assignment, transfer, pledge, or other disposition shall be without effect, except that
the Company may treat such act as an election to withdraw funds in accordance with Article 10.
23. EFFECT OF CHANGES OF COMMON STOCK.
If the Company should subdivide or reclassify the Common Stock which has been or may be subject to
purchase rights under the Plan, or should declare thereon any dividend payable in shares of such
Common Stock, or should take any other action of a similar nature affecting such Common Stock, then
the number and class of shares of Common Stock which may thereafter be subject to purchase rights
(in the aggregate and to any individual participating employee) shall be adjusted accordingly.
24. MERGER OR CONSOLIDATION.
If the Company should at any time merge into or consolidate with another corporation, the Board of
Directors may, at its election, either (i) terminate the Plan and refund without interest (except
where required by local law as determined by the Committee) the entire balance of each
participating employees payroll deductions or permitted cash contributions, or (ii) entitle each
participating employee to receive on the Offering Termination Date upon the exercise of such
purchase right for each share of Common Stock as to which such purchase right shall be exercised
the securities or property to which a holder of one share of the Common Stock was entitled upon and
at the time of such merger or consolidation, and the Board of Directors shall take such steps in
connection with such merger or consolidation as the Board of Directors shall deem necessary to
assure that the provisions of this Article 24 shall thereafter be applicable, as nearly as
reasonably possible. A sale of all or substantially all of the assets of the Company shall be
deemed a merger or consolidation for the foregoing purposes.
25. WITHHOLDING OF ADDITIONAL TAX.
By electing to participate in the Plan, each participant acknowledges that the Company and the
participating organizations may be required to withhold taxes with respect to the amounts deducted
from the participants compensation and accumulated for the benefit of the participant under the
Plan, and each participant agrees that the Company and the participating organizations may deduct
additional amounts from the participants compensation, when amounts are added to the participants
account, used to purchase Common Stock or refunded, in order to satisfy such withholding
obligations. Each participant further acknowledges that when Common Stock is purchased under the
Plan the Company and the participating organizations may be required to withhold taxes with respect
to the Common Stock purchased, and each participant agrees that such taxes may be withheld from
compensation otherwise payable to such participant. It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions or permitted cash
contributions elected by the participant under Article 7 will be used to purchase Common Stock.
However, if amounts sufficient to satisfy applicable tax withholding obligations have not been
withheld from compensation otherwise payable to any participant then, notwithstanding any other
provision of the Plan, the Company and the participating organizations may withhold such taxes from
the participants accumulated payroll deductions or permitted cash contributions and apply the net
amount to the purchase of Common Stock, unless the participant pays to the Company or the
participating organizations, prior to the Offer Termination Date, an
10
amount sufficient to satisfy such withholding obligations. Each participant further acknowledges
that the Company and the participating organizations may be required to withhold taxes in
connection with the disposition of stock acquired under the Plan and agrees that the Company and
the participating organizations may take whatever actions they consider appropriate to satisfy such
withholding requirements, including deducting from compensation otherwise payable to such
participant an amount sufficient to satisfy such withholding requirements or conditioning any
disposition of Common Stock by the participant upon the payment to the Company or the participating
organizations of an amount sufficient to satisfy such withholding requirements.
26. COMMITTEE RULES FOR FOREIGN JURISDICTIONS.
The Committee may adopt rules or procedures relating to the operation and administration of the
Plan to accommodate the specific requirements of local laws and procedures. Without limiting the
generality of the foregoing, the Committee is specifically authorized to (and to delegate to the
Plan Administrators the authority to) adopt rules and procedures regarding handling of payroll
deductions, cash contributions, payment of interest, conversion of local currency, tax, withholding
procedures and handling of stock certificates which vary with local requirements.
The Committee may also adopt sub-plans and establish or discontinue eligibility to participate in
the Plan applicable to particular organizations or locations. The rules of such sub-plans may take
precedence over other provisions of this Plan, but unless otherwise superseded by the terms of such
sub-plan, the provisions of this Plan shall govern the operation of such sub-plan.
11
exv10ww
EXHIBIT 10.W
January 22, 2008
Mr. David Aldrich
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Re: |
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Amended and Restated Change of Control / Severance Agreement |
Dear Dave:
This letter sets out the severance arrangements concerning your employment with Skyworks
Solutions, Inc. (Skyworks).
1. |
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Termination of Employment Related to Change of Control |
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1.1 |
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If: (i) a Change of Control occurs while you are employed by Skyworks as Chief
Executive Officer, and (ii) your employment with Skyworks is terminated within two (2)
years after the Change of Control, by Skyworks without Cause (as defined below) or by
you for any reason, then you will receive the benefits provided in Section 1.3 below. |
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1.2 |
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Change of Control means an event or occurrence set forth in any one or more of
subsections (a) through (d) below (including an event or occurrence that constitutes a
Change of Control under one of such subsections but is specifically exempted from
another such subsection): |
(a) the acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange
Act)) (a Person) of beneficial ownership of any capital stock of Skyworks if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) 40% or more of either (x) the then-outstanding shares of common
stock of Skyworks (the Outstanding Company Common Stock) or (y) the combined voting power
of the then-outstanding securities of Skyworks entitled to vote generally in the election
of directors (the Outstanding Company Voting Securities); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an acquisition
pursuant to the exercise, conversion or exchange of any security exercisable for,
convertible into or exchangeable for common stock or
7781.376.3000 f781.376.3310 www.skyworksinc.com 20 Sylvan Road Woburn, MA 01801 USA
Mr. David Aldrich
January 22, 2008
Page 2
voting securities of Skyworks, unless the Person exercising, converting or exchanging such
security acquired such security directly from Skyworks or an underwriter or agent of
Skyworks), (ii) any acquisition by Skyworks, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or
(b) such time as the Continuing Directors (as defined below) do not constitute a
majority of the Board of Directors of Skyworks (the Board)(or, if applicable, the
Board
of Directors of a successor corporation to Skyworks), where the term Continuing
Director means at any date a member of the Board (i) who was a member of the Board
on the date of the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election; provided, however, that
there shall
be excluded from this clause (ii) any individual whose initial assumption of office
occurred 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; or
(c) the consummation of a merger, consolidation, reorganization, recapitalization
or statutory share exchange involving Skyworks or a sale or other disposition of all or
substantially all of the assets of Skyworks in one or a series of transactions (a
Business
Combination), unless, immediately following such Business Combination, each of the
following two conditions is satisfied: (i) all or substantially all of the individuals
and
entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then-
outstanding shares of common stock and the combined voting power of the then-
outstanding securities entitled to vote generally in the election of directors,
respectively,
of the resulting or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such transaction owns
Skyworks or substantially all of Skyworks assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the
Acquiring Corporation) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by
Skyworks or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40%
or more of the then outstanding shares of common stock of the Acquiring Corporation, or
of the combined voting power of the then-outstanding securities of such corporation
Mr. David Aldrich
January 22, 2008
Page 3
entitled to vote generally in the election of directors (except to the extent that such
ownership existed prior to the Business Combination); or
(d) approval by the stockholders of Skyworks of a complete liquidation or dissolution
of Skyworks.
1.3 |
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Subject to the provisions of Section 7, (i) on the date of any termination described in
Section 1.1 (or such later date as may be required by Section 7), Skyworks will pay you a
lump sum equal to two and one-half (21/2) times the sum of (a) your rate of annual base
salary in effect immediately prior to the Change of Control and (b) the greater of (1) the
average of your three most recent annual cash bonuses received prior to the year in which
the Change of Control occurs, whether or not includable in gross income for federal
income tax purposes, and (2) your target annual cash bonus opportunity for the year in
which the Change of Control occurs (without regard to the relative achievement of any
performance milestones which would otherwise impact payment of the target bonus); and
(ii) on the date of any termination described in Section 1.1, all of your then outstanding
Skyworks stock options shall remain exercisable for a period of thirty (30) months after
the termination date (or, if earlier, until the last day of the full option term), subject to
their other terms and conditions; and (iii) Skyworks will provide you medical benefits
substantially the same as those provided to you at the time of termination for a period of
eighteen (18) months after the date of termination. |
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1.4 |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of
1986 (the Code) is payable by you by reason of the occurrence of a change in the
ownership or effective control of Skyworks or a change in the ownership of a substantial
portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of
the Code, then Skyworks shall pay you, in addition to the amount payable under
Section 1.3, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and
the amount necessary to pay all additional taxes imposed on (or economically borne by)
you (including the Excise Tax, state and federal income taxes and all applicable
employment taxes) attributable to the receipt of the Gross-Up Payment. For purposes of
the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall
be computed assuming the application of the maximum tax rate provided by law.
Notwithstanding anything contained in this letter to the contrary, any Gross-Up Payment
shall be paid no later than the last day of the calendar year following the calendar year in
which you remit the Excise Tax. |
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2. |
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Termination Without Cause or for Good Reason |
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2.1 |
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If, while you are employed by Skyworks as Chief Executive Officer, (i) your employment with
Skyworks is terminated by Skyworks without Cause, or (ii) you terminate your employment with
Skyworks for Good Reason, then you will receive the benefits specified in Section 2.4 below.
If your employment is terminated by Skyworks for Cause or by you without Good Reason, you
will not be entitled to receive the benefits |
Mr. David Aldrich
January 22, 2008
Page 4
specified in Section 2.4 below. This Section 2.1 shall not apply if you are entitled to
receive the benefits set forth in Section 1.3 above.
2.2 |
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Cause means: (i) deliberate dishonesty significantly detrimental to the best interests of
Skyworks or any subsidiary or affiliate; (ii) conduct on your part constituting an act of
moral turpitude; (iii) willful disloyalty to Skyworks or refusal or failure to obey the
directions of the Board; (iv) incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause must be
made by the full Board at a meeting duly called, with you present and voting and, if you
wish, with your legal counsel present. |
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2.3 |
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Good Reason means (i) a material diminution in your authority, duties or responsibility
from those in effect on the date of this agreement; (ii) a material diminution in your base
salary as in effect on the date hereof or as the same may be increased from time to time;
(iii) a requirement that you report to a corporate officer or employee instead of reporting
directly to the Board; (iv) a material diminution in the budget over which the you retain
authority; (v) a material change in your office location as in effect on the date hereof; and
(vi) any material breach of this agreement by Skyworks; provided, however, that a
termination for Good Reason can occur only if (i) you have given Skyworks a notice of
the existence of a condition giving rise to Good Reason and Skyworks has not cured the
condition giving rise to Good Reason within thirty (30) days after receipt of such notice,
and (ii) such notice is given within ninety (90) days after the initial occurrence of the
condition giving rise to Good Reason and further provided that a termination for Good
Reason shall occur 30 days after such failure to cure. |
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2.4 |
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Subject to the provisions of Section 7, (i) on the date of any termination described in the
first sentence of Section 2.1 (or such later date as may be required by Section 7),
Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of
annual base salary in effect immediately prior to such termination and (b) the greater of
(1) the average of your three most recent annual cash bonuses received prior to the year
in which the termination of employment occurs, whether or not includable in gross
income for federal income tax purposes, and (2) your target annual cash bonus
opportunity for the year in which the termination of employment occurs (without regard
to the relative achievement of any performance milestones which would otherwise impact
payment of the target bonus); and (ii) on the date of any termination described in the first
sentence of Section 2.1, all of your Skyworks stock options will become immediately
exercisable and, except as otherwise stated in this agreement, remain exercisable for a
period of two (2) years after the termination date, subject to their other terms and
conditions, each outstanding restricted stock award shall become immediately vested, and
each outstanding performance share award shall be deemed earned as to the number of
shares that would have been earned pursuant to the terms of such award as of the day
prior to the date of such termination, and such shares shall be issued by the Company to
you upon such termination. |
Mr. David Aldrich
January 22, 2008
Page 5
3. |
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Voluntary Termination On or After January 1, 2010 |
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Notwithstanding anything in this letter to the contrary, if you remain in the employ of
Skyworks until January 1,2010, you may voluntarily terminate your employment for any reason
on or after January 1,2010 (a Voluntary Election) and in such event you shall be entitled
to receive the benefits set forth in Section 2.4; provided however, that any benefits
provided under Section 2.4 shall be reduced by a Voluntary Election Surcharge. The
Voluntary Election Surcharge shall cause to be forfeited by you all tranches of stock
options, stock appreciation rights, restricted stock, and any other award relating to the
stock of Skyworks, which were both (a) granted to you in the eighteen (18) month period
prior to the Voluntary Election, and (b) scheduled to vest more than two (2) years from the
Voluntary Election. To obtain the benefits described in this Section 3, you must (i) provide
the Board with no fewer than ninety (90) days advance written notice of your intended
Voluntary Election and a succession plan shall be in place, and (ii) you must remain
available, in each case in the sole discretion of the Board and upon terms decided by the
Board, to continue to serve as a member of the Board and as the Chairman of one Board
committee for up to two (2) years following the Voluntary Election. |
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4. |
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Effect of Change of Control on Equity Awards |
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If a Change of Control occurs during the term of this Agreement, immediately prior to such
transaction constituting such Change of Control, (i) all of your then unvested Skyworks
stock options shall become immediately vested and exercisable; (ii) any restrictions on
each outstanding restricted stock award shall lapse and such award shall become immediately
vested; and, (iii) each outstanding performance share award shall be deemed earned as to
the greater of (a) the Target level of shares for such award or (b) the number of shares
that would have been earned pursuant to the terms of such award as of the day prior to the
date of such Change of Control, and such shares shall be issued by the Company to you
immediately prior to such Change of Control transaction. |
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5. |
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Non-Competition; Non-Solicitation |
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During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is voluntarily or involuntarily
terminated, by yourself or by the Company, and with or without cause (the Noncompete
Period), you will not engage in any employment, consulting or other activity that competes
with the business of Skyworks or any subsidiary or affiliate of Skyworks (collectively,
Skyworks and Affiliates). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of Skyworks and Affiliates. During the
Noncompete Period, you will not (i) attempt to hire any director, officer, employee or
agent of Skyworks and Affiliates, (ii) assist in such hiring by any other person, (iii)
encourage any person to terminate his or her employment or business relationship with
Skyworks, (iv) encourage any customer or supplier of Skyworks to |
Mr. David Aldrich
January 22, 2008
Page 6
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terminate its relationship with Skyworks, or (v) obtain, or assist in obtaining, for your
own benefit (other than indirectly as an employee of Skyworks and Affiliates) any customer
of Skyworks and Affiliates. If any of the restrictions in this Section 5 are adjudicated to
be excessively broad as to scope, geographic area, time or otherwise, said restriction
shall be reduced to the extent necessary to make the restriction reasonable and shall be
binding on you as so reduced. Any provisions of this section not so reduced will remain in
full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks and Affiliates for consultation on behalf of Skyworks and Affiliates, upon
reasonable request and at a reasonable rate of compensation and at reasonable times and
places in light of any commitment you may have to a new employer. |
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You understand and acknowledge that the remedies of Skyworks and Affiliates at law for
breach of any of the restrictions in this Section are inadequate and that any such breach
will cause irreparable harm to Skyworks. You therefore agree that in addition and as a
supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may
apply to any court having jurisdiction to enforce the specific performance of the
restrictions in this Section, and may apply for injunctive relief against any act which
would violate those restrictions. |
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6. |
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Death or Disability |
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In the event of your death at any time during your employment by Skyworks, all of your then
outstanding Company stock options, whether or not by their terms then exercisable, will
become immediately exercisable and remain exercisable for a period of one year thereafter,
subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable so long as you remain an
employee or officer of Skyworks and for a period of one year thereafter, subject to their
other terms and conditions. |
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7. |
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Miscellaneous |
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All claims by you for benefits under the Agreement shall be directed to and determined by
the Board and shall be in writing. Any denial by the Board of a claim for benefits under
this Agreement shall be delivered to you in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied upon. The Board
shall afford a reasonable opportunity to you for a review of the decision denying a claim.
Any further dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the
rules of the American Arbitration Association then in effect. |
Mr. David Aldrich
January 22, 2008
Page 7
Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks
agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and
other fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of any
payment or benefits pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.
Notwithstanding anything in this letter to the contrary, (a) the reimbursement of a fee or
expense pursuant this Section 7 shall be provided not later than the calendar year following
the calendar year in which the fee or expense was incurred, (b) the amount of fees and
expenses eligible for reimbursement during any calendar year may not affect the amount of
fees and expenses eligible for reimbursement in any other calendar year, (c) the right to
reimbursement under this Section 7 is not subject to liquidation or exchange for another
benefit and (d) the obligation of Skyworks under this Section 7 shall survive the
termination for any reason of this agreement and shall remain in effect until the applicable
statute of limitation has expired with respect to any claim or contest (regardless of the
outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by you regarding the amount of any payment or benefits
pursuant to this Agreement).
Notwithstanding anything in this letter to the contrary, no provision of this letter will
operate to extend the term of any above water option beyond the earlier of (a) the term
originally stated in the applicable option grant or option agreement and (b) the 10th
anniversary of the option grant date. For this purpose, the term above water option
means a stock option that has a per-share exercise price that is less than the per-share
fair market value of a share underlying the option at the time of the extension.
If you are a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code as of
the date of your employment termination, the commencement of the delivery of any payments
under Section 1.3 or 2.4 (whether or not pursuant to Section 3) and any other payments
under this Agreement that constitute deferred compensation payable upon separation from
service will not be paid until the first business day after the date that is six (6) months
following the date of your employment termination or, if you die during such six (6) month
period, on the first business day after the date of your death. The first payment that can
be made shall include the cumulative amount of any amounts that could not be paid during
such six (6) month period.
Except as expressly provided in this Section 7, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this letter to the contrary, references in Sections
1.3, 2.4 and 3 to employment termination shall be interpreted to mean separation from
Mr. David Aldrich
January 22, 2008
Page 8
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service, as that term is used in Section 409A and related regulations. Accordingly,
payments under Sections 1.3, 2.4 or 3 of this agreement shall not be made unless a
separation from service (as that term is used in Section 409A and related regulations)
shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this agreement
all federal, state, city or other taxes as shall be required to be withheld pursuant to any
law or governmental regulation or ruling. |
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This agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by the Company. This agreement may be modified
only by a written instrument executed by both parties. This agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the letter agreement between you and Alpha Industries, Inc. dated April 1, 2001
and the letter agreement between you and Skyworks dated May 26, 2005. This agreement will be
governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
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8. |
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Release |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
Section 1.3, Section 2.4 or Section 3, as applicable, unless (i) you agree to sign and
deliver to the General Counsel of Skyworks a release of claims in substantially the form
attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable
by the sixtieth (60th) day following the date of termination of your employment. |
Mr. David
Aldrich
January 22, 2008
Page 9
9. |
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Term |
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This agreement, as amended and restated, shall become effective on January 22, 2008, and
shall remain in effect until the third anniversary thereof (the Ending Date); provided,
however, that (i) if your employment terminates prior to the Ending Date, this agreement
shall remain in effect until all of your and Skyworks obligations hereunder have been fully
satisfied and (ii) if a Change of Control occurs prior to the Ending Date, this agreement
shall remain in effect until the latest to occur of (a) the Ending Date; (b) the second
anniversary of the Change of Control; or, if your employment terminates prior to the
occurrence of the Ending Date or the second anniversary of the Change of Control, (c) the
date that all of your and Skyworks obligations hereunder have been fully satisfied. |
Please sign both copies of this letter and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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/s/ Timothy R. Furey
Timothy R. Furey
Chairman of the Compensation Committee
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/s/ David J. Aldrich
David J. Aldrich
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Date: January 22, 2008 |
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Mr. David Aldrich
January 22, 2008
Page 10
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.3, Section 2.4
or Section
3 of the Change in Control/Severance Agreement dated January 22, 2008 between you and Skyworks
Solutions, Inc. (the Company) (the Agreement), you, on behalf of yourself and your
representatives, agents, estate, heirs, successors and assigns, agree to and do hereby forever
waive, release and discharge the Company, and each of its affiliated or related entities, parents,
subsidiaries, predecessors, successors, assigns, divisions, owners, stockholders, partners,
directors, officers, attorneys, insurers, benefit plans, employees and agents, whether previously
or hereinafter affiliated in any manner, as well as all persons or entities acting by, through, or
in concert with any of them (collectively, the Released Parties), from any and all claims,
debts, contracts, obligations, promises, controversies, agreements, liabilities, demands, wage
claims, expenses, charges of discrimination, harassment or retaliation, disputes, agreements,
damages, attorneys fees, or complaints of any nature whatsoever, whether or not now known,
suspected, claimed, matured or unmatured, existing or contingent, from the beginning of time until
the moment you have signed this Agreement, against the Released Parties (whether directly or
indirectly), or any of them, by reason of any act, event or omission concerning any matter, cause
or thing, including, without limiting the generality of the foregoing, any claims related to or
arising out of (i) your employment or its termination, (ii) any contract or agreement (express or
implied) between you and any of the Released Parties, (iii) any tort or tort-type claim, (iv) any
federal, state or governmental constitution, statute, regulation or ordinance, including but not
limited to the U.S. Constitution; Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the
Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans With
Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment
Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; the Fair
Labor Standards Act; any applicable Executive Order Programs; any similar state or local statutes
or laws; and any other federal, state, or local civil or human rights law, (v) any public policy,
contract or tort law, or under common law, (vi) any policies, practices or procedures of the
Company, (vii) any claim for wrongful discharge, breach of contract, infliction of emotional
distress, defamation, (vii) any claim for costs, fees, or other expenses, including attorneys
fees incurred in these matters, (viii) any impairment of your ability to obtain subsequent
employment, and (ix) any permanent or temporary disability or loss of future earnings.
For the purpose of implementing a full and complete release and discharge of the Released Parties,
you expressly acknowledge that this Agreement is intended to include and does include in its
effect, without limitation, all claims which you do not know or suspect to exist in your favor
against the Released Parties, or any of them, at the moment of execution hereof, and that this
Agreement expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING
BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS
AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963,
THE
Mr. David Aldrich
January 22, 2008
Page 11
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED;
YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR
OWN VOLITION;
YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF
THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE
,
VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND
WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND
YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT
AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD
HAS EXPIRED.
Date:
Acknowledged: SKYWORKS SOLUTIONS, INC.
Date:
exv10wx
EXHIBIT 10.X
January 22, 2008
Mr. Liam Griffin
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Re: |
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Change of Control / Severance Agreement |
Dear Liam:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. Termination of Employment Related to Change of Control
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the
Additional Term (as defined in Section 7) and (ii) your employment with
Skyworks is terminated by Skyworks without Cause or you terminate your
employment with Skyworks for Good Reason, in either case within one
(1) year after the Change of Control, then you will receive the benefits
provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or
more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change of Control under one of such
subsections but is specifically exempted from another such subsection): |
(a) the acquisition by an individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange
Act)) (a Person) of beneficial ownership of any capital stock of Skyworks if, after
such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under the Exchange Act) 40% or more of either (x) the then-outstanding
shares of common stock of Skyworks (the Outstanding Company Common Stock) or (y)
the combined voting power of the then-outstanding securities of Skyworks entitled to
vote generally in the election of directors (the Outstanding Company Voting
Securities); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from Skyworks (excluding an acquisition pursuant to the exercise, conversion
or exchange of any security exercisable for, convertible into or
Mr. Liam Griffin
January 22, 2008
Page 2
exchangeable for common stock or voting securities of Skyworks, unless the Person
exercising, converting or exchanging such security acquired such security directly
from Skyworks or an underwriter or agent of Skyworks), (ii) any acquisition by
Skyworks, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Skyworks or any corporation controlled by Skyworks, or
(iv) any acquisition by any corporation pursuant to a transaction which complies
with clauses (i) and (ii) of subsection (c) of this Section 1.2; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board of Directors of Skyworks (the Board)
(or, if applicable, the Board of Directors of a successor corporation to
Skyworks), where the term Continuing Director means at any date a
member of the Board (i) who was a member of the Board on the date of
the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded
from this clause (ii) any individual whose initial assumption of office
occurred 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; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Skyworks or a sale
or other disposition of all or substantially all of the assets of Skyworks in
one or a series of transactions (a Business Combination), unless,
immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such
transaction owns Skyworks or substantially all of Skyworks assets either
directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock
2
Mr. Liam Griffin
January 22, 2008
Page 3
and Outstanding Company Voting Securities, respectively; and (ii) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by
Skyworks or by the Acquiring Corporation) beneficially owns, directly or
indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or
(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks.
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1.3. |
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Good Reason means the occurrence of any of the following events
without your prior written consent: (i) a material diminution of your base
compensation (unless in connection with a general reduction in the base
compensation of all of Skyworks officers and/or senior management
employees necessitated by the business or financial condition of
Skyworks, provided such reduction does not adversely affect you to a
greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the
geographic location at which you are directed that you must perform your
duties, which Skyworks has determined shall include a change in your
principal place of employment at Skyworks or an affiliates direction from
the location of the your principal place of employment immediately prior
to the date this Agreement becomes effective to a location more than fifty
(50) miles from such principal place of employment; or (iv) any action or
inaction constituting a material breach by Skyworks of the terms of this
Agreement. Your termination of employment shall not be deemed to be
for Good Reason unless, within sixty (60) days of the occurrence of the
event constituting Good Reason, you have provided Skyworks with (a) at
least thirty (30) days advance written notice of your decision to terminate
your employment for Good Reason, and (b) a period of not less than thirty
(30) days to cure the event or condition described in (i), (ii), (iii) or (iv),
and Skyworks has either failed to so cure the event or waived its right to
cure the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable
(but not more than sixty (60) days) after the date of any termination
described in Section 1.1 (or such later date as may be required by Section
8), Skyworks will pay you a lump sum equal to two (2) times the sum of
(a) your rate of annual base salary in effect immediately prior to the
Change of Control, and (b) the greater of (1) the average of the annual
short-term cash incentive payments you received for each of the three
years prior to the year in which the Change of Control occurs, whether or
not includable in gross income for federal income tax purposes, or (2) |
3
Mr. Liam Griffin
January 22, 2008
Page 4
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your target annual short-term cash incentive opportunity for the year in which the
Change of Control occurs; and (ii) on the date of any termination described in
Section 1.1, all of your then outstanding Skyworks stock options shall remain
exercisable for a period of eighteen (18) months after the termination date (or,
if earlier, until the last day of the full option term), subject to their other
terms and conditions; and (iii) Skyworks will provide you medical benefits
substantially the same as those provided to you at the time of termination for a
period of eighteen (18) months after the date of termination. |
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the
Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment
exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no
obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the
Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than
the last day of the calendar year following the calendar year in which you remit the
Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
2. Other Terminations of Employment
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section
7), your employment with Skyworks is terminated by Skyworks without
Cause, then yon will receive the benefits specified in Section 2.3 below. If
your employment is terminated by Skyworks for Cause or by you for any
reason, you will not be entitled to receive the benefits specified in Section
2.3 below. This Section 2 shall not apply if you are entitled to receive the
benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate;
(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions |
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Mr. Liam Griffin
January 22, 2008
Page 5
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of the Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called. |
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial Term
or the Additional Term (as defined in Section 7), your employment is terminated by
Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
3. Effect of Change of Control on Equity Awards
If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by the
Company to you immediately prior to such Change of Control transaction.
4. Non-Competition; Non-Solicitation
During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to hire any director, officer,
employee or agent of the Company, (ii) assist in such hiring by any other person, (iii)
encourage any person to terminate his or her employment or business relationship with the
Company, (iv) not disrupt or
5
Mr. Liam Griffin
January 22, 2008
Page 6
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interfere (or attempt to disrupt or interfere) with the Companys relationships with it
employees, (v) encourage any customer or supplier of the Company to terminate its
relationship with the Company, or (vi) obtain, or assist in obtaining, for your own
benefit (other than indirectly as an employee of the Company) any customer of the Company.
If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to
scope, geographic area, time or otherwise, said restriction shall be reduced to the extent
necessary to make the restriction reasonable and shall be binding on you as so reduced.
Any provisions of this section not so reduced will remain in full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer. |
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You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions. |
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5. |
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Death; Disability |
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In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions. |
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6. |
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Release of Claims |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in substantially the form attached
hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the
sixtieth (60th) day following the date of termination of your employment. |
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Mr. Liam Griffin
January 22, 2008
Page 7
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7. |
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Term |
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This Agreement shall be effective for an initial term of two (2) years from the date hereof
(the Initial Term); provided however, that (i) if your employment terminates within the
Initial Term, this Agreement shall remain in effect until all of your and Skyworks
obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement
shall renew automatically on the anniversary hereof for up to five (5) additional one (1)
year periods (each an Additional Term) unless, at least ninety (90) days prior to the end
of the then current term of the Agreement, either party provides written notice to the
other party that the Agreement should not be extended, and (ii) if your employment
terminates during any Additional Term, this Agreement shall remain in effect until all of
your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding
anything to the contrary herein, your obligations pursuant to Section 4 shall survive any
termination of this Agreement and extend throughout the Noncompete Period. |
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8. |
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Miscellaneous |
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All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees
and expenses which you may reasonably incur as a result of any claim or contest (regardless
of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by you regarding the amount of any payment or
benefits pursuant to this Agreement), plus in each case interest on any delayed payment at
the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code.
Notwithstanding anything in this letter to the contrary, (a) no provision of this letter
will operate to extend the life of any option beyond the term originally stated in the
applicable option grant or option agreement; (b) the reimbursement of a fee or expense
pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and
expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not |
7
Mr. Liam Griffin
January 22, 2008
Page 8
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subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks
under this Section 8 shall survive the termination for any reason of this agreement and
shall remain in effect until the applicable statute of limitation has expired with respect
to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others
regarding the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any contest by
you regarding the amount of any payment or benefits pursuant to this Agreement). |
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This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation §1.409A-1(b)(9)(iii),
reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or
limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent
applicable. If (a) it is determined that any payments or benefits provided pursuant to this
Agreement that are paid upon separation from service (as that term is used in Section
409A) constitute deferred compensation for purposes of Section 409A (after taking into
account the exceptions listed in the prior sentence and/or any other applicable exceptions)
and (b) you are a specified employee (as that term is used in Section 409A) when your
employment terminates, such payments or benefits (or portions thereof) that constitute
deferred compensation payable upon a separation from service that are to be paid or
provided during the six (6) month period following termination of your employment shall not
be paid or provided until the first business day after the date that is six (6) months
following termination of your employment or, if earlier, the first business day following
the date of your death. The payment that is made pursuant to the prior sentence shall
include the cumulative amount of any amounts that could not be paid during the six (6)
month period. |
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Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean
separation from service, as that term is used in Section 409A of the Code and related
regulations. Accordingly, payments to be made under Section 1.4 or Section 2.3, as
applicable, shall not be made unless a separation from service (within the meaning of
Section 409A of the Code and related regulations) shall have occurred. |
8
Mr. Liam Griffin
January 22, 2008
Page 9
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Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling. |
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The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company. |
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This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
Mr. Liam Griffin
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO:
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich
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/s/ Mr. Liam Griffin |
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
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10
Mr. Liam Griffin
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released Parties),
from any and all claims, debts, contracts, obligations, promises, controversies, agreements,
liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against the
Released Parties (whether directly or indirectly), or any of them, by reason of any act, event or
omission concerning any matter, cause or thing, including, without limiting the generality of the
foregoing, any claims related to or arising out of (i) your employment or its termination, (ii) any
contract or agreement (express or implied) between you and any of the Released Parties, (iii) any
tort or tort-type claim, (iv) any federal, state or governmental constitution, statute, regulation
or ordinance, including but not limited to the U.S. Constitution; Title VII of the Civil Rights Act
of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of
1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans With Disabilities Act of 1990; the Family and Medical Leave Act of 1993;
the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act
of 1974; the Fair Labor Standards Act; any applicable Executive Order Programs; any similar state
or local statutes or laws; and any other federal, state, or local civil or human rights law, (v)
any public policy, contract or tort law, or under common law, (vi) any policies, practices or
procedures of the Company, (vii) any claim for wrongful discharge, breach of contract, infliction
of emotional distress, defamation, (vii) any claim for costs, fees, or other expenses, including
attorneys fees incurred in these matters, (viii) any impairment of your ability to obtain
subsequent employment, and (ix) any permanent or temporary disability or loss of future earnings.
A-1
Mr. Liam Griffin
January 22, 2008
For the purpose of implementing a full and complete release and discharge of the Released Parties,
you expressly acknowledge that this Agreement is intended to include and does include in its
effect, without limitation, all claims which you do not know or suspect to exist in your favor
against the Released Parties, or any of them, at the moment of execution hereof, and that this
Agreement expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
1. |
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE
GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO,
RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS
AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED; |
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2. |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT
TO DO SO OF YOUR OWN VOLITION; |
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3. |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR
RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE , VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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4. |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE
EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS
RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED. |
A-2
Mr. Liam Griffin
January 22, 2008
Acknowledged: SKYWORKS SOLUTIONS, INC.
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By: |
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David J. Aldrich
President and Chief Executive Officer
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Date:
A-3
exv10waa
EXHIBIT 10.AA
January 22, 2008
Mr. George LeVan
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Re: |
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Change of Control / Severance Agreement |
Dear George:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. Termination of Employment Related to Change of Control
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the
Additional Term (as defined in Section 7) and (ii) your employment with
Skyworks is terminated by Skyworks without Cause or you terminate your
employment with Skyworks for Good Reason, in either case within one
(1) year after the Change of Control, then you will receive the benefits
provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or
more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change of Control under one of such
subsections but is specifically exempted from another such subsection): |
(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock of
Skyworks if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x)
the then-outstanding shares of common stock of Skyworks (the Outstanding Company
Common Stock) or (y) the combined voting power of the then-outstanding securities
of Skyworks entitled to vote generally in the election of directors (the
Outstanding Company Voting Securities); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of Skyworks, unless
Mr. George LeVan
January 22, 2008
Page 2
the Person exercising, converting or exchanging such security acquired such
security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any
acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board of Directors of Skyworks (the Board)
(or, if applicable, the Board of Directors of a successor corporation to
Skyworks), where the term Continuing Director means at any date a
member of the Board (i) who was a member of the Board on the date of
the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded
from this clause (ii) any individual whose initial assumption of office
occurred 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; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Skyworks or a sale
or other disposition of all or substantially all of the assets of Skyworks in
one or a series of transactions (a Business Combination), unless,
immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such
transaction owns Skyworks or substantially all of Skyworks assets either
directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock
2
Mr. George LeVan
January 22, 2008
Page 3
and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding any
employee benefit plan (or related trust) maintained or sponsored by Skyworks or by the
Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed prior to the
Business Combination); or
(d) approval by the stockholders of Skyworks of a complete liquidation or dissolution of
Skyworks.
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1.3. |
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Good Reason means the occurrence of any of the following events
without your prior written consent: (i) a material diminution of your base
compensation (unless in connection with a general reduction in the base
compensation of all of Skyworks officers and/or senior management
employees necessitated by the business or financial condition of
Skyworks, provided such reduction does not adversely affect you to a
greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the
geographic location at which you are directed that you must perform your
duties, which Skyworks has determined shall include a change in your
principal place of employment at Skyworks or an affiliates direction from
the location of the your principal place of employment immediately prior
to the date this Agreement becomes effective to a location more than fifty
(50) miles from such principal place of employment; or (iv) any action or
inaction constituting a material breach by Skyworks of the terms of this
Agreement. Your termination of employment shall not be deemed to be
for Good Reason unless, within sixty (60) days of the occurrence of the
event constituting Good Reason, you have provided Skyworks with (a) at
least thirty (30) days advance written notice of your decision to terminate
your employment for Good Reason, and (b) a period of not less than thirty
(30) days to cure the event or condition described in (i), (ii), (iii) or (iv),
and Skyworks has either failed to so cure the event or waived its right to
cure the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable
(but not more than sixty (60) days) after the date of any termination
described in Section 1.1 (or such later date as may be required by Section
8), Skyworks will pay you a lump sum equal to two (2) times the sum of
(a) your rate of annual base salary in effect immediately prior to the
Change of Control, and (b) the greater of (1) the average of the annual
short-term cash incentive payments you received for each of the three
years prior to the year in which the Change of Control occurs, whether or |
3
Mr. George LeVan
January 22, 2008
Page 4
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not includable in gross income for federal income tax purposes, or (2) your target
annual short-term cash incentive opportunity for the year in which the Change of
Control occurs; and (ii) on the date of any termination described in Section 1.1,
all of your then outstanding Skyworks stock options shall remain exercisable for a
period of eighteen (18) months after the termination date (or, if earlier, until
the last day of the full option term), subject to their other terms and
conditions; and (iii) Skyworks will provide you medical benefits substantially the
same as those provided to you at the time of termination for a period of eighteen
(18) months after the date of termination. |
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up
Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed
five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no
obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the
Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than
the last day of the calendar year following the calendar year in which you remit the
Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
2. Other Terminations of Employment
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section
7), your employment with Skyworks is terminated by Skyworks without
Cause, then you will receive the benefits specified in Section 2.3 below. If
your employment is terminated by Skyworks for Cause or by you for any
reason, you will not be entitled to receive the benefits specified in Section
2.3 below. This Section 2 shall not apply if you are entitled to receive the
benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
4
Mr. George LeVan
January 22, 2008
Page 5
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(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions of the
Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called. |
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial Term
or the Additional Term (as defined in Section 7), your employment is terminated by
Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
3. Effect of Change of Control on Equity Awards
If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by the
Company to you immediately prior to such Change of Control transaction.
4. Non-Competition; Non-Solicitation
During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to
5
Mr. George LeVan
January 22, 2008
Page 6
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hire any director, officer, employee or agent of the Company, (ii) assist in such hiring
by any other person, (iii) encourage any person to terminate his or her employment or
business relationship with the Company, (iv) not disrupt or interfere (or attempt to
disrupt or interfere) with the Companys relationships with it employees, (v) encourage
any customer or supplier of the Company to terminate its relationship with the Company, or
(vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an
employee of the Company) any customer of the Company. If any of the restrictions in this
Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or
otherwise, said restriction shall be reduced to the extent necessary to make the
restriction reasonable and shall be binding on you as so reduced, Any provisions of this
section not so reduced will remain in full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer. |
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You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions. |
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5. |
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Death; Disability |
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In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions. |
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6. |
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Release of Claims |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in |
6
Mr. George LeVan
January 22, 2008
Page 7
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substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release
has become non-revocable by the sixtieth (60th) day following the date of termination of
your employment. |
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7. |
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Term |
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This Agreement shall be effective for an initial term of two (2) years from the date
hereof (the Initial Term); provided however, that (i) if your employment terminates
within the Initial Term, this Agreement shall remain in effect until all of your and
Skyworks obligations hereunder have been fully satisfied. Following the Initial Term,
this Agreement shall renew automatically on the anniversary hereof for up to five (5)
additional one (1) year periods (each an Additional Term) unless, at least ninety (90)
days prior to the end of the then current term of the Agreement, either party provides
written notice to the other party that the Agreement should not be extended, and (ii) if
your employment terminates during any Additional Term, this Agreement shall remain in
effect until all of your and Skyworks obligations hereunder have been fully satisfied.
Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4
shall survive any termination of this Agreement and extend throughout the Noncompete
Period. |
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8. |
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Miscellaneous |
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All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any farther dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
7
Mr. George LeVan
January 22, 2008
Page 8
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pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and expenses
eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this
Section 8 is not subject to liquidation or exchange for another benefit and (e) the obligation of
Skyworks under this Section 8 shall survive the termination for any reason of this agreement and
shall remain in effect until the applicable statute of limitation has expired with respect to any
claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the
validity or enforceability of, or liability under, any provision of this Agreement or any guarantee
of performance thereof (including as a result of any contest by you regarding the amount of any
payment or benefits pursuant to this Agreement). |
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This Agreement is intended to comply with Section 409A of the Code and any related regulations or
other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent
applicable. It is the intent of the parties hereto that all severance payments and benefits
provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury
Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under
Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury
Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation
§1.409A-1(b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or
benefits provided pursuant to this Agreement that are paid upon separation from service (as that
term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after
taking into account the exceptions listed in the prior sentence and/or any other applicable
exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when
your employment terminates, such payments or benefits (or portions thereof) that constitute
deferred compensation payable upon a separation from service that are to be paid or provided
during the six (6) month period following termination of your employment shall not be paid or
provided until the first business day after the date that is six (6) months following termination
of your employment or, if earlier, the first business day following the date of your death. The
payment that is made pursuant to the prior sentence shall include the cumulative amount of any
amounts that could not be paid during the six (6) month period. |
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Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to
accelerate or to defer the delivery of the payments to be made under this Agreement.
Notwithstanding anything in this Agreement to the contrary, references to employment termination
in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as
that term is used in Section 409A of the Code and related regulations. Accordingly, payments
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8
Mr. George LeVan
January 22, 2008
Page 9
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to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a
separation from service (within the meaning of Section 409A of the Code and related
regulations) shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling. |
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The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company. |
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This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
Mr. George LeVan
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich,
David J. Aldrich, President and CEO
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/s/ Mr. George LeVan
Date: 1/22/08
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10
Mr. George LeVan
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released
Parties), from any and all claims, debts, contracts, obligations, promises, controversies,
agreements, liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against the
Released Parties (whether directly or indirectly), or any of them, by reason of any act, event or
omission concerning any matter, cause or thing, including, without limiting the generality of the
foregoing, any claims related to or arising out of (i) your employment or its termination, (ii) any
contract or agreement (express or implied) between you and any of the Released Parties, (iii) any
tort or tort-type claim, (iv) any federal, state or governmental constitution, statute, regulation
or ordinance, including but not limited to the U.S. Constitution; Title VII of the Civil Rights Act
of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of
1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans With Disabilities Act of 1990; the Family and Medical Leave Act of 1993;
the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act
of 1974; the Fair Labor Standards Act; any applicable Executive Order Programs; any similar state
or local statutes or laws; and any other federal, state, or local civil or human rights law, (v)
any public policy, contract or tort law, or under common law, (vi) any policies, practices or
procedures of the Company, (vii) any claim for wrongful discharge, breach of contract, infliction
of emotional distress, defamation, (vii) any claim for costs, fees, or other expenses, including
attorneys fees incurred in these matters, (viii) any impairment of your ability to obtain
subsequent employment, and (ix) any permanent or temporary disability or loss of future earnings.
For the purpose of implementing a full and complete release and discharge of the Released
Parties, you expressly acknowledge that this Agreement is intended to include and does include in
its effect, without limitation, all claims which you do not know or
A-1
Mr. George LeVan
January 22, 2008
suspect to exist in your favor against the Released Parties, or any of them, at the moment of
execution hereof, and that this Agreement expressly contemplates the extinguishment of all such
claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
1. |
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE
GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO,
RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS
AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED; |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT
TO DO SO OF YOUR OWN VOLITION; |
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3. |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR
RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE ,VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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4. |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE
EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS
RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED. |
A-2
Mr. George LeVan
January 22, 2008
Acknowledged: SKYWORKS SOLUTIONS, INC.
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By: |
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David J. Aldrich
President and Chief Executive Officer
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Date:
A-3
exv10wbb
EXHIBIT 10.BB
January 22, 2008
Mr. Gregory Waters
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Re: |
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Change of Control / Severance Agreement |
Dear Greg:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. |
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Termination of Employment Related to Change of Control |
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the Additional
Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by
Skyworks without Cause or you terminate your employment with Skyworks for Good Reason,
in either case within one (1) year after the Change of Control, then you will receive
the benefits provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or more
of subsections (a) through (d) below (including an event or occurrence that
constitutes a Change of Control under one of such subsections but is specifically
exempted from another such subsection): |
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(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock of
Skyworks if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either
(x) the then-outstanding shares of common stock of Skyworks (the Outstanding
Company Common Stock) or (y) the combined voting power of the then-outstanding
securities of Skyworks entitled to vote generally in the election of directors
(the Outstanding Company Voting Securities); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of Skyworks, unless the Person exercising, converting or exchanging
such security acquired |
Mr. Gregory Waters
January 22, 2008
Page 2
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such security directly from Skyworks or an underwriter or agent of Skyworks), (ii)
any acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or |
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(b) such tune as the Continuing Directors (as defined below) do not constitute a
majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the
Board of Directors of a successor corporation to Skyworks), where the term
Continuing Director means at any date a member of the Board (i) who was a member
of the Board on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority of the directors
who were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded from this clause
(ii) any individual whose initial assumption of office occurred 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; or |
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(c) the consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving Skyworks or a sale or other disposition of all or
substantially all of the assets of Skyworks in one or a series of transactions (a
Business Combination), unless, immediately following such Business Combination,
each of the following two conditions is satisfied: (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of the then-outstanding shares of common stock and the combined voting power of
the then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns Skyworks or substantially all of Skyworks assets
either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no |
Mr. Gregory Waters
January 22, 2008
Page 3
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Person (excluding any employee benefit plan (or related trust) maintained or
sponsored by Skyworks or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or |
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(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks. |
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1.3. |
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Good Reason means the occurrence of any of the following events without your
prior written consent: (i) a material diminution of your base compensation (unless in
connection with a general reduction in the base compensation of all of Skyworks
officers and/or senior management employees necessitated by the business or
financial condition of Skyworks, provided such reduction does not adversely affect you
to a greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the geographic
location at which you are directed that you must perform your duties, which Skyworks
has determined shall include a change in your principal place of employment at
Skyworks or an affiliates direction from the location of the your principal place of
employment immediately prior to the date this Agreement becomes effective to a location
more than fifty (50) miles from such principal place of employment; or (iv) any action
or inaction constituting a material breach by Skyworks of the terms of this Agreement.
Your termination of employment shall not be deemed to be for Good Reason unless, within
sixty (60) days of the occurrence of the event constituting Good Reason, you have
provided Skyworks with (a) at least thirty (30) days advance written notice of your
decision to terminate your employment for Good Reason, and (b) a period of not less
than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or
(iv), and Skyworks has either failed to so cure the event or waived its right to cure
the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but
not more than sixty (60) days) after the date of any termination described in Section
1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump
sum equal to two (2) times the sum of (a) your rate of annual base salary in effect
immediately prior to the Change of Control, and (b) the greater of (1) the average of
the annual short-term cash incentive payments you received for each of the three years
prior to the year in which the Change of Control occurs, whether or not includable in
gross income for federal income tax purposes, or (2) |
Mr. Gregory Waters
January 22, 2008
Page 4
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your target annual short-term cash incentive opportunity for the year in which the
Change of Control occurs; and (ii) on the date of any termination described in
Section 1.1, all of your then outstanding Skyworks stock options shall remain
exercisable for a period of eighteen (18) months after the termination date (or, if
earlier, until the last day of the full option term), subject to their other terms
and conditions; and (iii) Skyworks will provide you medical benefits substantially
the same as those provided to you at the time of termination for a period of
eighteen (18) months after the date of termination. |
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the
Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment
exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no
obligation to make the Gross-Up Payment to yon until you remit the Excise Tax to the
Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than
the last day of the calendar year following the calendar year in which you remit the
Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
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Other Terminations of Employment |
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section 7),
your employment with Skyworks is terminated by Skyworks without Cause, then you will
receive the benefits specified in Section 2.3 below. If your employment is terminated
by Skyworks for Cause or by you for any reason, you will not be entitled to receive
the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are
entitled to receive the benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate; (ii)
conduct on your part constituting an act of moral turpitude; (iii) your
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Mr. Gregory Waters
January 22, 2008
Page 5
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willful disloyalty to Skyworks or refusal or failure to obey the directions of the
Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called. |
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial Term
or the Additional Term (as defined in Section 7), your employment is terminated by
Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
3. |
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Effect of Change of Control on Equity Awards |
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If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by
the Company to you immediately prior to such Change of Control transaction. |
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4. |
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Non-Competition; Non-Solicitation |
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During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to hire any director, officer,
employee or agent of the Company, (ii) assist in such |
Mr. Gregory Waters
January 22, 2008
Page 6
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hiring by any other person, (iii) encourage any person to terminate his or her employment
or business relationship with the Company, (iv) not disrupt or interfere (or attempt to
disrupt or interfere) with the Companys relationships with it employees, (v) encourage any
customer or supplier of the Company to terminate its relationship with the Company, or (vi)
obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee
of the Company) any customer of the Company. If any of the restrictions in this Section 4
are adjudicated to be excessively broad as to scope, geographic area, time or otherwise,
said restriction shall be reduced to the extent necessary to make the restriction
reasonable and shall be binding on you as so reduced. Any provisions of this section not so
reduced will remain in full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer. |
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You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions. |
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5. |
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Death; Disability |
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In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions. |
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6. |
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Release of Claims |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in substantially the form attached
hereto as Exhibit A (the Release) and (ii) the |
Mr. Gregory Waters
January 22, 2008
Page 7
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Release has become non-revocable by the sixtieth (60th) day following the date of
termination of your employment. |
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7. |
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Term |
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This Agreement shall be effective for an initial term of two (2) years from the date
hereof (the Initial Term); provided however, that (i) if your employment terminates
within the Initial Term, this Agreement shall remain in effect until all of your and
Skyworks obligations hereunder have been fully satisfied. Following the Initial Term,
this Agreement shall renew automatically on the anniversary hereof for up to five (5)
additional one (1) year periods (each an Additional Term) unless, at least ninety (90)
days prior to the end of the then current term of the Agreement, either party provides
written notice to the other party that the Agreement should not be extended, and (ii) if
your employment terminates during any Additional Term, this Agreement shall remain in
effect until all of your and Skyworks obligations hereunder have been fully satisfied.
Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4
shall survive any termination of this Agreement and extend throughout the Noncompete
Period. |
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8. |
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Miscellaneous |
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All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense
pursuant to this Section 8 shall be provided not later than the calendar year |
Mr. Gregory Waters
January 22, 2008
Page 8
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following the calendar year in which the fee or expense was incurred, (c) the amount of fees
and expenses eligible for reimbursement during any calendar year may not affect the amount
of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not subject to liquidation or exchange for another
benefit and (e) the obligation of Skyworks under this Section 8 shall survive the
termination for any reason of this agreement and shall remain in effect until the applicable
statute of limitation has expired with respect to any claim or contest (regardless of the
outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by you regarding the amount of any payment or benefits
pursuant to this Agreement). |
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This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation §1.409A-1(b)(9)(iii),
reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or
limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent
applicable. If (a) it is determined that any payments or benefits provided pursuant to this
Agreement that are paid upon separation from service (as that term is used in Section
409A) constitute deferred compensation for purposes of Section 409A (after taking into
account the exceptions listed in the prior sentence and/or any other applicable exceptions)
and (b) you are a specified employee (as that term is used in Section 409A) when your
employment terminates, such payments or benefits (or portions thereof) that constitute
deferred compensation payable upon a separation from service that are to be paid or
provided during the six (6) month period following termination of your employment shall not
be paid or provided until the first business day after the date that is six (6) months
following termination of your employment or, if earlier, the first business day following
the date of your death. The payment that is made pursuant to the prior sentence shall
include the cumulative amount of any amounts that could not be paid during the six (6)
month period. |
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Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean
separation from service, as that term is used in Section 409 A of the Code and related
regulations. Accordingly, payments to be made under Section 1.4 or Section 2.3, as
applicable, shall not be made |
Mr. Gregory Waters
January 22, 2008
Page 9
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unless a separation from service (within the meaning of Section 409A of the Code and
related regulations) shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling. |
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The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company. |
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This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Mr. Gregory Waters
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich
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/s/ Gregory L. Waters |
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
Mr. Gregory Waters
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released
Parties), from any and all claims, debts, contracts, obligations, promises, controversies,
agreements, liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against
the Released. Parties (whether directly or indirectly), or any of them, by reason of any act,
event or omission concerning any matter, cause or thing, including, without limiting the
generality of the foregoing, any claims related to or arising out of (i) your employment or its
termination, (ii) any contract or agreement (express or implied) between you and any of the
Released Parties, (iii) any tort or tort-type claim, (iv) any federal, state or governmental
constitution, statute, regulation or ordinance, including but not limited to the U.S.
Constitution; Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991;
the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit
Protection Act); the Equal Pay Act of 1963, as amended; the Americans With Disabilities Act of
1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification
Act; the Employee Retirement Income Security Act of. 1974; the Fair Labor Standards Act; any
applicable Executive Order Programs; any similar state or local statutes or laws; and any other
federal, state, or local civil or human rights law, (v) any public policy, contract or tort law,
or under common law, (vi) any policies, practices or procedures of the Company, (vii) any claim
for wrongful discharge, breach of contract, infliction of emotional distress, defamation, (vii)
any claim for costs, fees, or other expenses, including attorneys fees incurred in these matters,
(viii) any impairment of your ability to obtain subsequent employment, and (ix) any permanent or
temporary disability or loss of future earnings.
For the purpose of implementing a full and complete release and discharge of the Released Parties,
you expressly acknowledge that this Agreement is intended to include
A-1
Mr. Gregory Waters
January 22, 2008
and does include in its effect, without limitation, all claims which you do not know or suspect to
exist in your favor against the Released Parties, or any of them, at the moment of execution
hereof, and that this Agreement expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
1. |
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING
BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED; |
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2. |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE
EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF
YOUR OWN VOLITION; |
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3. |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON
, ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE
, VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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4. |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED. |
A-2
Mr. Gregory Waters
January 22, 2008
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Agreed: |
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Date: |
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Acknowledged: SKYWORKS SOLUTIONS, INC. |
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By: |
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David J. Aldrich
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President and Chief Executive Officer |
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Date: |
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A-3
exv10wdd
EXHIBIT 10.DD
January 22, 2008
Mr. Mark Tremallo
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Re: |
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Change of Control / Severance Agreement |
Dear Mark:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. |
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Termination of Employment Related to Change of Control |
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the Additional
Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by
Skyworks without Cause or you terminate your employment with Skyworks for Good Reason,
in either case within one (1) year after the Change of Control, then you will receive
the benefits provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or more
of subsections (a) through (d) below (including an event or occurrence that
constitutes a Change of Control under one of such subsections but is specifically
exempted from another such subsection): |
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(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock of
Skyworks if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x)
the then-outstanding shares of common stock of Skyworks (the Outstanding Company
Common Stock) or (y) the combined voting power of the then-outstanding securities
of Skyworks entitled to vote generally in the election of directors (the
Outstanding Company Voting Securities); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of Skyworks, unless |
Mr. Mark Tremallo
January 22, 2008
Page 2
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the Person exercising, converting or exchanging such security acquired such
security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any
acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related, trust) sponsored or maintained by Skyworks or any corporation controlled
by Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or |
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(b) such time as the Continuing Directors (as defined below) do not constitute a
majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the
Board of Directors of a successor corporation to Skyworks), where the term
Continuing Director means at any date a member of the Board (i) who was a member
of the Board on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority of the directors
who were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded from this clause
(ii) any individual whose initial assumption of office occurred 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; or |
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(c) the consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving Skyworks or a sale or other disposition of all or
substantially all of the assets of Skyworks in one or a series of transactions (a
Business Combination), unless, immediately following such Business Combination,
each of the following two conditions is satisfied: (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50%
of the then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such
transaction owns Skyworks or substantially all of Skyworks assets either directly
or through one or more subsidiaries) (such resulting or acquiring corporation is
referred to herein as the Acquiring Corporation) in substantially the same
proportions as their ownership, immediately prior to such Business Combination, of
the Outstanding Company Common Stock |
Mr. Mark Tremallo
January 22, 2008
Page 3
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and Outstanding Company Voting Securities, respectively; and (ii) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by
Skyworks or by the Acquiring Corporation) beneficially owns, directly or
indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or |
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(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks. |
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1.3. |
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Good Reason means the occurrence of any of the following events without your
prior written consent: (i) a material diminution of your base compensation (unless in
connection with a general reduction in the base compensation of all of Skyworks
officers and/or senior management employees necessitated by the business or
financial condition of Skyworks, provided such reduction does not adversely affect you
to a greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the geographic
location at which you are directed that you must perform your duties, which Skyworks
has determined shall include a change in your principal place of employment at
Skyworks or an affiliates direction from the location of the your principal place of
employment immediately prior to the date this Agreement becomes effective to a location
more than fifty (50) miles from such principal place of employment; or (iv) any action
or inaction constituting a material breach by Skyworks of the terms of this Agreement.
Your termination of employment shall not be deemed to be for Good Reason unless, within
sixty (60) days of the occurrence of the event constituting Good Reason, you have
provided Skyworks with (a) at least thirty (30) days advance written notice of your
decision to terminate your employment for Good Reason, and (b) a period of not less
than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or
(iv), and Skyworks has either failed to so cure the event or waived its right to cure
the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but
not more than sixty (60) days) after the date of any termination described in Section
1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump
sum equal to two (2) times the sum of (a) your rate of annual base salary in effect
immediately prior to the Change of Control, and (b) the greater of (1) the average of
the annual short-term cash incentive payments you received for each of the three years
prior to the year in which the Change of Control occurs, whether or |
Mr. Mark Tremallo
January 22, 2008
Page 4
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not includable in gross income for federal income tax purposes, or (2) your target
annual short-term cash, incentive opportunity for the year in which the Change of
Control occurs; and (ii) on the date of any termination described in Section 1.1,
all of your then outstanding Skyworks stock options shall remain exercisable for a
period of eighteen (18) months after the termination date (or, if earlier, until
the last day of the full option term), subject to their other terms and conditions;
and (iii) Skyworks will provide you medical benefits substantially the same as
those provided to you at the time of termination for a period of eighteen (18)
months after the date of termination. |
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the
Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment
exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no
obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the
Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than
the last day of the calendar year following the calendar year in which you remit the
Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
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Other Terminations of Employment |
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section 7),
your employment with Skyworks is terminated by Skyworks without Cause, then you will
receive the benefits specified in Section 2.3 below. If your employment is terminated
by Skyworks for Cause or by you for any reason, you will not be entitled to receive
the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are
entitled to receive the benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
Mr. Mark Tremallo
January 22, 2008
Page 5
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(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions of the
Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called. |
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial Term
or the Additional Term (as defined in Section 7), your employment is terminated by
Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
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Effect of Change of Control on Equity Awards |
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If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by
the Company to you immediately prior to such Change of Control transaction. |
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4. |
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Non-Competition; Non-Solicitation |
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During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to |
Mr. Mark Tremallo
January 22, 2008
Page 6
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hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by
any other person, (iii) encourage any person to terminate his or her employment or business
relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or
interfere) with the Companys relationships with it employees, (v) encourage any customer
or supplier of the Company to terminate its relationship with the Company, or (vi) obtain,
or assist in obtaining, for your own benefit (other than indirectly as an employee of the
Company) any customer of the Company. If any of the restrictions in this Section 4 are
adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said
restriction shall be reduced to the extent necessary to make the restriction reasonable and
shall be binding on you as so reduced. Any provisions of this section not so reduced will
remain in full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer. |
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You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions. |
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Death; Disability |
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In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions. |
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Release of Claims |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in |
Mr. Mark Tremallo
January 22, 2008
Page 7
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substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release
has become non-revocable by the sixtieth (60th) day following the date of termination of
your employment. |
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Term |
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This Agreement shall be effective for an initial term of two (2) years from the date
hereof (the Initial Term); provided however, that (i) if your employment terminates
within the Initial Term, this Agreement shall remain in effect until all of your and
Skyworks obligations hereunder have been fully satisfied. Following the Initial Term,
this Agreement shall renew automatically on the anniversary hereof for up to five (5)
additional one (1) year periods (each an Additional Term) unless, at least ninety (90)
days prior to the end of the then current term of the Agreement, either party provides
written notice to the other party that the Agreement should not be extended, and (ii) if
your employment terminates during any Additional Term, this Agreement shall remain in
effect until all of your and Skyworks obligations hereunder have been fully satisfied.
Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4
shall survive any termination of this Agreement and extend throughout the Noncompete
Period. |
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Miscellaneous |
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All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
Mr. Mark Tremallo
January 22, 2008
Page 8
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pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and
expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not subject to liquidation or exchange for another
benefit and (e) the obligation of Skyworks under this Section 8 shall survive the
termination for any reason of this agreement and shall remain in effect until the applicable
statute of limitation has expired with respect to any claim or contest (regardless of the
outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by you regarding the amount of any payment or benefits
pursuant to this Agreement). |
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This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of
medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments,
as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a)
it is determined that any payments or benefits provided pursuant to this Agreement that are
paid upon separation from service (as that term is used in Section 409A) constitute
deferred compensation for purposes of Section 409A (after taking into account the
exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you
are a specified employee (as that term is used in Section 409A) when your employment
terminates, such payments or benefits (or portions thereof) that constitute deferred
compensation payable upon a separation from service that are to be paid or provided during
the six (6) month period following termination of your employment shall not be paid or
provided until the first business day after the date that is six (6) months following
termination of your employment or, if earlier, the first business day following the date of
your death. The payment that is made pursuant to the prior sentence shall include the
cumulative amount of any amounts that could not be paid during the six (6) month period. |
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Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean
separation from service, as that term is used in Section 409A of the Code and related
regulations. Accordingly, payments |
Mr. Mark Tremallo
January 22, 2008
Page 9
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to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a
separation from service (within the meaning of Section 409A of the Code and related
regulations) shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling. |
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The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company. |
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This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Mr. Mark Tremallo
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich
David J. Aldrich, President and CEO
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/s/ Mark Tremallo
Date: 1/22/08
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Mr. Mark Tremallo
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released
Parties), from any and all claims, debts, contracts, obligations, promises, controversies,
agreements, liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against
the Released Parties (whether directly or indirectly), or any of them, by reason of any act, event
or omission concerning any matter, cause or thing, including, without limiting the generality of
the foregoing, any claims related to or arising out of (i) your employment or its termination,
(ii) any contract or agreement (express or implied) between you and any of the Released Parties,
(iii) any tort or tort-type claim, (iv)any federal, state or governmental constitution, statute,
regulation or ordinance, including but not limited to the U.S. Constitution; Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in
Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal
Pay Act of 1963, as amended; the Americans With Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement
Income Security Act of 1974; the Fair Labor Standards Act; any applicable Executive Order
Programs; any similar state or local statutes or laws; and any other federal, state, or local
civil or human rights law, (v) any public policy, contract or tort law, or under common law, (vi)
any policies, practices or procedures of the Company, (vii) any claim for wrongful discharge,
breach of contract, infliction of emotional distress, defamation, (vii) any claim for costs, fees,
or other expenses, including attorneys fees incurred in these matters, (viii) any impairment of
your ability to obtain subsequent employment, and (ix) any permanent or temporary disability or
loss of future earnings.
For the purpose of implementing a full and complete release and discharge of the Released Parties,
you expressly acknowledge that this Agreement is intended to include
A-1
Mr. Mark Tremallo
January 22, 2008
and does include in its effect, without limitation, all claims which you do not know or suspect to
exist in your favor against the Released Parties, or any of them, at the moment of execution
hereof, and that this Agreement expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING
BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED; |
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2. |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN
VOLITION; |
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3. |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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4. |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED. |
A-2
Mr. Mark Tremallo
January 22, 2008
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Agreed: |
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Date: |
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Acknowledged: SKYWORKS SOLUTIONS, INC. |
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By:
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David J. Aldrich
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President and Chief Executive Officer |
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Date: |
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A-3
exv10wii
EXHIBIT 10. II
January 22, 2008
Mr. Donald Palette
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Re: |
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Change of Control / Severance Agreement |
Dear Don:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. |
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Termination of Employment Related to Change of Control |
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the Additional
Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by
Skyworks without Cause or you terminate your employment with Skyworks for Good Reason,
in either case within one (1) year after the Change of Control, then you will receive
the benefits provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or more
of subsections (a) through (d) below (including an event or occurrence that
constitutes a Change of Control under one of such subsections but is specifically
exempted from another such subsection): |
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(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock of
Skyworks if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x)
the then-outstanding shares of common stock of Skyworks (the Outstanding Company
Common Stock) or (y) the combined voting power of the then-outstanding securities
of Skyworks entitled to vote generally in the election of directors (the
Outstanding Company Voting Securities); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of Skyworks, unless |
Mr. Donald Palette
January 22, 2008
Page 2
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the Person exercising, converting or exchanging such security acquired such
security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any
acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with, clauses (i) and (ii) of subsection (c) of this Section 1.2; or |
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(b) such time as the Continuing Directors (as defined below) do not constitute a
majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the
Board of Directors of a successor corporation to Skyworks), where the term
Continuing Director means at any date a member of the Board (i) who was a member
of the Board on the date of the execution of this Agreement or (ii) who was
nominated or elected subsequent to such date by at least a majority of the directors
who were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election;
provided, however, that there shall be excluded from this clause
(ii) any individual whose initial assumption of office occurred 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; or |
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(c) the consummation of a merger, consolidation, reorganization, recapitalization or
statutory share exchange involving Skyworks or a sale or other disposition of all or
substantially all of the assets of Skyworks in one or a series of transactions (a
Business Combination), unless, immediately following such Business Combination,
each of the following two conditions is satisfied: (i) all or substantially all of
the individuals and entities who were the beneficial owners of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than
50% of the then-outstanding shares of common stock and the combined voting power of
the then-outstanding securities entitled to vote generally in the election of
directors, respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns Skyworks or substantially all of Skyworks assets
either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Company Common Stock |
Mr. Donald Palette
January 22, 2008
Page 3
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and Outstanding Company Voting Securities, respectively; and (ii) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by
Skyworks or by the Acquiring Corporation) beneficially owns, directly or
indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or |
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(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks. |
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1.3. |
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Good Reason means the occurrence of any of the following events without
your prior written consent: (i) a material diminution of your base compensation
(unless in connection with a general reduction in the base compensation of all of
Skyworks officers and/or senior management employees necessitated by the business
or financial condition of Skyworks, provided such reduction does not adversely
affect you to a greater extent than such other persons); (ii) a material diminution in
your authority, duties or responsibilities; (iii) a material change in the
geographic location at which you are directed that you must perform your duties, which
Skyworks has determined shall include a change in your principal place of employment
at Skyworks or an affiliates direction from the location of the your principal place
of employment immediately prior to the date this Agreement becomes effective to a
location more than fifty (50) miles from such principal place of employment; or (iv)
any action or inaction constituting a material breach by Skyworks of the terms of this
Agreement. Your termination of employment shall not be deemed to be for Good Reason
unless, within sixty (60) days of the occurrence of the event constituting Good
Reason, you have provided Skyworks with (a) at least thirty (30) days advance written
notice of your decision to terminate your employment for Good Reason, and (b) a period
of not less than thirty (30) days to cure the event or condition described in (i),
(ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its
right to cure the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable
(but not more than sixty (60) days) after the date of any termination described in
Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay
you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary
in effect immediately prior to the Change of Control, and (b) the greater of (1) the
average of the annual short-term cash incentive payments you received for each of the
three years prior to the year in which the Change of Control occurs, whether or |
Mr. Donald Palette
January 22, 2008
Page 4
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not includable in gross income for federal income tax purposes, or (2) your target
annual short-term cash incentive opportunity for the year in which the Change of
Control occurs; and (ii) on the date of any termination described in Section 1,1,
all of your then outstanding Skyworks stock options shall remain exercisable for a
period of eighteen (18) months after the termination date (or, if earlier, until
the last day of the full option term), subject to their other terms and conditions;
and (iii) Skyworks will provide you medical benefits substantially the same as those
provided to you at the time of termination for a period of eighteen (18) months
after the date of termination. |
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the
Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment
exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no
obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the
Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than
the last day of the calendar year following the calendar year in which you remit the
Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
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Other Terminations of Employment |
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section 7),
your employment with Skyworks is terminated by Skyworks without Cause, then you will
receive the benefits specified in Section 2.3 below. If your employment is terminated
by Skyworks for Cause or by you for any reason, you will not be entitled to receive
the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are
entitled to receive the benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
Mr. Donald Palette
January 22, 2008
Page 5
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(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions of the
Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called. |
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial Term
or the Additional Term (as defined in Section 7), your employment is terminated by
Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
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Effect of Change of Control on Equity Awards |
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If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by
the Company to you immediately prior to such Change of Control transaction. |
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4. |
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Non-Competition; Non-Solicitation |
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During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to |
Mr. Donald Palette
January 22, 2008
Page 6
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hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by
any other person, (iii) encourage any person to terminate his or her employment or business
relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or
interfere) with the Companys relationships with it employees, (v) encourage any customer
or supplier of the Company to terminate its relationship with the Company, or (vi) obtain,
or assist in obtaining, for your own benefit (other than indirectly as an employee of the
Company) any customer of the Company. If any of the restrictions in this Section 4 are
adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said
restriction shall be reduced to the extent necessary to make the restriction reasonable and
shall be binding on you as so reduced. Any provisions of this section not so reduced will
remain in full force and effect. |
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It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer. |
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You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions. |
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Death; Disability |
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In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions. |
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In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions. |
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Release of Claims |
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Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in |
Mr. Donald Palette
January 22, 2008
Page 7
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substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release
has become non-revocable by the sixtieth (60th) day following the date of termination of
your employment. |
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Term |
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This Agreement shall be effective for an initial term of two (2) years from the date hereof
(the Initial Term); provided however, that (i) if your employment terminates within the
Initial Term, this Agreement shall remain in effect until all of your and Skyworks
obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement
shall renew automatically on the anniversary hereof for up to five (5) additional one (1)
year periods (each an Additional Term) unless, at least ninety (90) days prior to the end
of the then current term of the Agreement, either party provides written notice to the
other party that the Agreement should not be extended, and (ii) if your employment
terminates during any Additional Term, this Agreement shall remain in effect until all of
your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding
anything to the contrary herein, your obligations pursuant to Section 4 shall survive any
termination of this Agreement and extend throughout the Noncompete Period. |
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Miscellaneous |
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All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
Mr. Donald Palette
January 22, 2008
Page 8
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pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and
expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not subject to liquidation or exchange for another
benefit and (e) the obligation of Skyworks under this Section 8 shall survive the
termination for any reason of this agreement and shall remain in effect until the
applicable statute of limitation has expired with respect to any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement). |
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This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation § 1.409A-1(b)(9)(iii), reimbursement of
medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments,
as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent
applicable. If (a) it is determined that any payments or benefits provided pursuant to this
Agreement that are paid upon separation from service (as that term is used in Section
409A) constitute deferred compensation for purposes of Section 409A (after taking into
account the exceptions listed in the prior sentence and/or any other applicable exceptions)
and (b) you are a specified employee (as that term is used in Section 409A) when your
employment terminates, such payments or benefits (or portions thereof) that constitute
deferred compensation payable upon a separation from service that are to be paid or
provided during the six (6) month period following termination of your employment shall not
be paid or provided until the first business day after the date that is six (6) months
following termination of your employment or, if earlier, the first business day following
the date of your death. The payment that is made pursuant to the prior sentence shall
include the cumulative amount of any amounts that could not be paid during the six (6)
month period. |
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Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean
separation from service, as that term is used in Section 409A of the Code and related
regulations. Accordingly, payments |
Mr. Donald Palette
January 22, 2008
Page 9
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to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a
separation from service (within the meaning of Section 409 A of the Code and related
regulations) shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling. |
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The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company. |
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This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks, This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated August 20, 2007. This Agreement
will be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Mr. Donald Palette
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich
David J. Aldrich, President and CEO
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/s/ Donald Palette
Date: 1/22/08
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Mr. Donald Palette
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released
Parties), from any and all claims, debts, contracts, obligations, promises, controversies,
agreements, liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against
the Released Parties (whether directly or indirectly), or any of them, by reason of any act, event
or omission concerning any matter, cause or thing, including, without limiting the generality of
the foregoing, any claims related to or arising out of (i) your employment or its termination,
(ii) any contract or agreement (express or implied) between you and any of the Released Parties,
(iii)any tort or tort-type claim, (iv) any federal, state or governmental constitution, statute,
regulation or ordinance, including but not limited to the U.S. Constitution; Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in
Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal
Pay Act of 1963, as amended; the Americans With Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement
Income Security Act of 1974; the Fair Labor Standards Act; any applicable Executive Order
Programs; any similar state or local statutes or laws; and any other federal, state, or local
civil or human rights law, (v) any public policy, contract or tort law, or under common law, (vi)
any policies, practices or procedures of the Company, (vii) any claim for wrongful discharge,
breach of contract, infliction of emotional distress, defamation, (vii) any claim for costs, fees,
or other expenses, including attorneys fees incurred in these matters, (viii) any impairment of
your ability to obtain subsequent employment, and (ix) any permanent or temporary disability or
loss of future earnings.
A-1
Mr. Donald Palette
January 22, 2008
For the purpose of implementing a full and complete release and discharge of the Released
Parties, you expressly acknowledge that this Agreement is intended to include and does include in
its effect, without limitation, all claims which you do not know or suspect to exist in your
favor against the Released Parties, or any of them, at the moment of execution hereof, and that
this Agreement expressly contemplates the extinguishment of all such, claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING
BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE
AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED; |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN
VOLITION; |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE , VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND
THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL . THE REVOCATION PERIOD HAS
EXPIRED. |
A-2
Mr. Donald Palette
January 22, 2008
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Agreed: |
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Date: |
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Acknowledged: SKYWORKS SOLUTIONS, INC. |
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By:
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David J. Aldrich
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President and Chief Executive Officer |
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Date: |
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A-3
exv10wkk
EXHIBIT 10.KK
January 22, 2008
Mr. Bruce Freyman
Re: Change of Control / Severance Agreement
Dear Bruce:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. Termination of Employment Related to Change of Control
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the Additional
Term (as defined in Section 7) and (ii) your employment with Skyworks is
terminated by Skyworks without Cause or you terminate your employment
with Skyworks for Good Reason, in either case within one (1) year after
the Change of Control, then you will receive the benefits provided in
Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or
more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change of Control under one of such
subsections but is specifically exempted from another such subsection): |
(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock of
Skyworks if, after such acquisition, such Person beneficially owns (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x)
the then-outstanding shares of common stock of Skyworks (the Outstanding Company
Common Stock) or (y) the combined voting power of the then-outstanding securities
of Skyworks entitled to vote generally in the election of directors (the
Outstanding Company Voting Securities); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from Skyworks (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of Skyworks, unless the Person exercising, converting or exchanging such
security acquired
Mr. Bruce Freyman
January 22, 2008
Page 2
such security directly from Skyworks or an underwriter or agent of Skyworks), (ii)
any acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board of Directors of Skyworks (the Board)
(or, if applicable, the Board of Directors of a successor corporation to
Skyworks), where the term Continuing Director means at any date a
member of the Board (i) who was a member of the Board on the date of
the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded
from this clause (ii) any individual whose initial assumption of office
occurred 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; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Skyworks or a sale
or other disposition of all or substantially all of the assets of Skyworks in
one or a series of transactions (a Business Combination), unless,
immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such
transaction owns Skyworks or substantially all of Skyworks assets either
directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, respectively; and (ii) no
Mr. Bruce Freyman
January 22, 2008
Page 3
Person (excluding any employee benefit plan (or related trust) maintained or
sponsored by Skyworks or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or
(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks.
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Good Reason means the occurrence of any of the following events
without your prior written consent: (i) a material diminution of your base
compensation (unless in connection with a general reduction in the base
compensation of all of Skyworks officers and/or senior management
employees necessitated by the business or financial condition of
Skyworks, provided such reduction does not adversely affect you to a
greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the
geographic location at which you are directed that you must perform your
duties, which Skyworks has determined shall include a change in your
principal place of employment at Skyworks or an affiliates direction from,
the location of the your principal place of employment immediately prior
to the date this Agreement becomes effective to a location more than fifty
(50) miles from such principal place of employment; or (iv) any action or
inaction constituting a material breach by Skyworks of the terms of this
Agreement. Your termination of employment shall not be deemed to be
for Good Reason unless, within sixty (60) days of the occurrence of the
event constituting Good Reason, you have provided Skyworks with (a) at
least thirty (30) days advance written notice of your decision to terminate
your employment for Good Reason, and (b) a period of not less than thirty
(30) days to cure the event or condition described in (i), (ii), (iii) or (iv),
and Skyworks has either failed to so cure the event or waived its right to
cure the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) in the event of any
termination of your employment described in Section 1.1, Skyworks shall
provide to you bi-weekly compensation continuation payments
commencing as soon as practicable (but not more than sixty (60) days)
after the date of such termination (or such later date as may be required by
Section 8) and continuing for a period of twelve (12) months following
termination of your employment, with each such compensation
continuation payment being equal to the quotient of (a) divided by (b),
where (a) equals two (2) times the sum of (1) your rate of annual base |
Mr. Bruce Freyman
January 22, 2008
Page 4
salary in effect immediately prior to the Change of Control, and (2) the greater
of (A) the average of the annual short-term cash incentive payments you received
for each of the three years prior to the year in which the Change of Control
occurs, whether or not includable in gross income for federal income tax purposes,
or (B) your target annual short-term cash incentive opportunity for the year in
which the Change of Control occurs, and (b) equals 26; and (ii) on the date of any
termination described in Section 1.1, all of your then outstanding Skyworks stock
options shall remain exercisable for a period of eighteen (18) months after the
termination date (or, if earlier, until the last day of the full option term),
subject to their other terms and conditions; and (iii) Skyworks will provide you
medical benefits substantially the same as those provided to you at the time of
termination for a period of eighteen (18) months after the date of termination.
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the
ownership of a substantial portion of the assets of Skyworks, determined in
accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in
addition to any other amounts payable under this Agreement, an amount (the Gross-Up
Payment) equal to the sum of the Excise Tax and the amount necessary to pay all
additional taxes imposed on (or economically borne by) you (including the Excise
Tax, state and federal income taxes and all applicable employment taxes)
attributable to the receipt of the Gross-Up Payment; provided however, that (i) in
no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars
($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment
to you until you remit the Excise Tax to the Internal Revenue Service and (iii) any
Gross-Up Payment shall be paid no later than the last day of the calendar year
following the calendar year in which you remit the Excise Tax. For purposes of the
preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment
shall be computed assuming the application of the maximum tax rate provided by law. |
2. Other Terminations of Employment
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section
7), your employment with Skyworks is terminated by Skyworks without Cause, then you
will receive the benefits specified in Section 2.3 below. If your employment is
terminated by Skyworks for Cause or by you for any reason, you will not be entitled
to receive the benefits specified in Section |
Mr. Bruce Freyman
January 22, 2008
Page 5
2.3 below. This Section 2 shall not apply if you are entitled to receive the
benefits set forth in Section 1.4 above.
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate;
(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions
of the Board; or (iv) your incompetent performance or substantial or
continuing inattention to or neglect of duties assigned to you. Any
determination of Cause must be made by the full Board at a meeting duly
called. |
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Subject to the provisions of Sections 6 and 8, (i) if your employment is
terminated by Skyworks without Cause, Skyworks shall provide to you bi-weekly
compensation continuation payments commencing as soon as
practicable (but not more than sixty (60) days) after the date of such
termination (or such later date as may be required by Section 8) and
continuing for a period of twelve (12) months following termination of
your employment, with each such compensation continuation payment
being equal to the quotient of (a) divided by (b), where (a) equals the sum
of (1) your then current rate of annual base salary, and (2) any short-term
cash incentive payment then due, whether or not includable in gross
income for federal income tax purposes, and (b) equals 26; and (ii) all of
your then vested outstanding Skyworks stock options will remain
exercisable for a period of twelve (12) months after the date of your
employment termination (or, if earlier, until the last day of the full option
term), subject to their terms and conditions. |
3. Effect of Change of Control on Equity Awards
If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by
the Company to you immediately prior to such Change of Control transaction.
4. Non-Solicitation
Mr. Bruce Freyman
January 22, 2008
Page 6
You agree that while employed by the Company and for one (1) year thereafter, you will not,
either directly or through others, raid, solicit, or attempt to solicit any employee of the
Company to terminate his or her relationship with the Company in order to become an
employee to or for any person or entity. You further agree that you will not disrupt or
interfere or attempt to disrupt or interfere with the Companys relationships with such
employees. You also agree that in addition to any damages that may be recovered, the
prevailing party in any legal action to enforce this non-solicitation agreement shall be
entitled to recover its costs and attorneys fees from the other party.
You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions.
5. Death; Disability
In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions.
In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions.
6. Release of Claims
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver
to the General Counsel of Skyworks a release of claims in substantially the form attached
hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the
sixtieth (60th) day following the date of termination of your employment.
7. Term
This Agreement shall be effective for an initial term of two (2) years from the date
hereof (the Initial Term); provided however, that (i) if your employment
Mr. Bruce Freyman
January 22, 2008
Page 7
terminates within the Initial Term, this Agreement shall remain in effect until all of your
and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term,
this Agreement shall renew automatically on the anniversary hereof for up to five (5)
additional one (1) year periods (each an Additional Term) unless, at least ninety (90)
days prior to the end of the then current term of the Agreement, either party provides
written notice to the other party that the Agreement should not be extended, and (ii) if
your employment terminates during any Additional Term, this Agreement shall remain in
effect until all of your and Skyworks obligations hereunder have been fully satisfied.
Notwithstanding anything to the contrary herein, your obligation pursuant to Section 4
shall survive any termination of this Agreement and extend throughout the non-solicitation
period.
8. Miscellaneous
All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Orange County, California, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense
pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and
expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not subject to liquidation or exchange for another
benefit and (e) the obligation of Skyworks under this Section 8 shall survive the
termination for any reason of this agreement and shall remain in effect until the
applicable statute
Mr. Bruce Freyman
January 22, 2008
Page 8
of limitation has expired with respect to any claim or contest (regardless of the outcome
thereof) by Skyworks, you or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by you regarding the amount of any payment or
benefits pursuant to this Agreement).
This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of
medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments,
as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a)
it is determined that any payments or benefits provided pursuant to this Agreement that are
paid upon separation from service (as that term is used in Section 409A) constitute
deferred compensation for purposes of Section 409A (after taking into account the
exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you
are a specified employee (as that term is used in Section 409A) when your employment
terminates, such payments or benefits (or portions thereof) that constitute deferred
compensation payable upon a separation from service that are to be paid or provided during
the six (6) month period following termination of your employment shall not be paid or
provided until the first business day after the date that is six (6) months following
termination of your employment or, if earlier, the first business day following the date of
your death. The payment that is made pursuant to the prior sentence shall include the
cumulative amount of any amounts that could not be paid during the six (6) month period.
Each installment payment under this Agreement shall be treated as a separate payment as
defined under Treasury Regulation § 1.409A-2(b)(2).
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean
separation from service, as that term is used in Section 409A of the Code and related
regulations. Accordingly, payments to be made under Section 1.4 or Section 2.3, as
applicable, shall not be made unless a separation from service (within the meaning of
Section 409A of the Code and related regulations) shall have occurred.
Mr. Bruce Freyman
January 22, 2008
Page 9
Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling.
The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree, and the
Company acknowledges and agrees, that, without limitation to any other provision of this
Agreement which is also material, this provision is a material term of this Agreement and
an important clause benefiting you, to assure you that the obligation of Skyworks to provide
you with the existing benefits made available under this Agreement, are adhered to by any
successor to the Company, and the provision also benefits the Company in that the assurance
to you afforded by this provision is an important retention incentive to have you remain in
the employment of the Company.
This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated November 7, 2006. This Agreement
will be governed by and construed in accordance with the laws of the State of California.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Mr. Bruce Freyman
January 22, 2008
Page 10
Please sign both copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J Aldrich
David J Aldrich, President and CEO
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/s/ Bruce Freyman
Date:
1/22/08 |
Mr. Bruce Freyman
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released
Parties), from any and all claims, debts, contracts, obligations, promises, controversies,
agreements, liabilities, demands, wage claims, expenses, charges of discrimination, harassment or
retaliation, disputes, agreements, damages, attorneys fees, or complaints of any nature
whatsoever, whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this Agreement, against
the Released Parties (whether directly or indirectly), or any of them, by reason of any act, event
or omission concerning any matter, cause or thing, including, without limiting the generality of
the foregoing, any claims related to or arising out of (i) your employment or its termination,
(ii) any contract or agreement (express or implied) between you and any of the Released Parties,
(iii) any tort or tort-type claim, (iv) any federal, state or governmental constitution, statute,
regulation or ordinance, including but not limited to the U.S. Constitution; Title VII of the
Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in
Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal
Pay Act of 1963, as amended; the Americans With Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement
Income Security Act of 1974; the Fair Labor Standards Act; any applicable Executive Order
Programs; any similar state or local statutes or laws; and any other federal, state, or local
civil or human rights law, (v) any public policy, contract or tort law, or under common law, (vi)
any policies, practices or procedures of the Company, (vii) any claim for wrongful discharge,
breach of contract, infliction of emotional distress, defamation, (vii) any claim for costs, fees,
or other expenses, including attorneys fees incurred in these matters, (viii) any impairment of
your ability to obtain subsequent employment, and (ix) any permanent or temporary disability or
loss of future earnings.
A-1
Mr. Bruce Freyman
January 22, 2008
This Agreement includes a waiver of any rights you may have under Section 1542 of the California
Civil Code, or any other similar state statutes or laws, regarding the waiver of unknown claims.
Section 1542 states:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE EMPLOYEE DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE EMPLOYER.
Notwithstanding the provisions of Section 1542, or any similar state statutes or laws, and for the
purpose of implementing a full and complete release and discharge of the Released Parties, you
expressly acknowledge that this Agreement is intended to include and does include in its effect,
without limitation, all claims which you do not know or suspect to exist in your favor against the
Released Parties, or any of them, at the moment of execution hereof, and that this Agreement
expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
1. |
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE
GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO,
RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS
AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED; |
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2. |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT
TO DO SO OF YOUR OWN VOLITION; |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR
RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE , VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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4. |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE
EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS |
A-2
Mr. Bruce Freyman
January 22, 2008
RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED.
Date:
Acknowledged: SKYWORKS SOLUTIONS, INC.
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By: |
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David J. Aldrich
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President and Chief Executive Officer |
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Date:
A-3
exv10wll
EXHIBIT 10.LL
January 22, 2008
Mr. Stan Swearingen
Re: Change of Control / Severance Agreement
Dear Stan:
This letter agreement (the Agreement) sets out the severance arrangements concerning your
employment with Skyworks Solutions, Inc. (Skyworks).
1. |
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Termination of Employment Related to Change of Control |
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1.1. |
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If: (i) a Change of Control occurs during the Initial Term or the
Additional Term (as defined in Section 7) and (ii) your employment with
Skyworks is terminated by Skyworks without Cause or you terminate your
employment with Skyworks for Good Reason, in either case within one
(1) year after the Change of Control, then you will receive the benefits
provided in Section 1.4 below. |
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1.2. |
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Change of Control means an event or occurrence set forth in any one or
more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change of Control under one of such
subsections but is specifically exempted from another such subsection): |
(a) the acquisition by an individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) (a Person) of beneficial ownership of any capital stock
of Skyworks if, after such acquisition, such Person beneficially owns (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of
either (x) the then-outstanding shares of common stock of Skyworks (the
Outstanding Company Common Stock) or (y) the combined voting power of the
then-outstanding securities of Skyworks entitled to vote generally in the
election of directors (the Outstanding Company Voting Securities);
provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from Skyworks (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of Skyworks, unless
Mr. Stan Swearingen
January 22, 2008
Page 2
the Person exercising, converting or exchanging such security acquired such
security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any
acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Skyworks or any corporation controlled by
Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board of Directors of Skyworks (the Board)
(or, if applicable, the Board of Directors of a successor corporation to
Skyworks), where the term Continuing Director means at any date a
member of the Board (i) who was a member of the Board on the date of
the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority
of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded
from this clause (ii) any individual whose initial assumption of office
occurred 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; or
(c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Skyworks or a sale
or other disposition of all or substantially all of the assets of Skyworks in
one or a series of transactions (a Business Combination), unless,
immediately following such Business Combination, each of the following
two conditions is satisfied: (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock
and the combined voting power of the then-outstanding securities entitled
to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall
include, without limitation, a corporation which as a result of such
transaction owns Skyworks or substantially all of Skyworks assets either
directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the Acquiring Corporation) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock
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Mr. Stan Swearingen
January 22, 2008
Page 3
and Outstanding Company Voting Securities, respectively; and (ii) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by
Skyworks or by the Acquiring Corporation) beneficially owns, directly or
indirectly, 40% or more of the then outstanding shares of common stock of the
Acquiring Corporation, or of the combined voting power of the then-outstanding
securities of such corporation entitled to vote generally in the election of
directors (except to the extent that such ownership existed prior to the Business
Combination); or
(d) approval by the stockholders of Skyworks of a complete liquidation or
dissolution of Skyworks.
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1.3. |
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Good Reason means the occurrence of any of the following events
without your prior written consent: (i) a material diminution of your base
compensation (unless in connection with a general reduction in the base
compensation of all of Skyworks officers and/or senior management
employees necessitated by the business or financial condition of
Skyworks, provided such reduction does not adversely affect you to a
greater extent than such other persons); (ii) a material diminution in your
authority, duties or responsibilities; (iii) a material change in the
geographic location at which you are directed that you must perform your
duties, which Skyworks has determined shall include a change in your
principal place of employment at Skyworks or an affiliates direction
from
the location of the your principal place of employment immediately prior
to the date this Agreement becomes effective to a location more than fifty
(50) miles from such principal place of employment; or (iv) any action or
inaction constituting a material breach by Skyworks of the terms of this
Agreement. Your termination of employment shall not be deemed to be
for Good Reason unless, within sixty (60) days of the occurrence of the
event constituting Good Reason, you have provided Skyworks with (a) at
least thirty (30) days advance written notice of your decision to terminate
your employment for Good Reason, and (b) a period of not less than thirty
(30) days to cure the event or condition described in (i), (ii), (iii) or (iv),
and Skyworks has either failed to so cure the event or waived its right to
cure the event, to the extent it is then subject to cure. |
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1.4. |
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Subject to the provisions of Sections 6 and 8, (i) as soon as practicable
(but not more than sixty (60) days) after the date of any termination
described in Section 1.1 (or such later date as may be required by Section
8), Skyworks will pay you a lump sum equal to two (2) times the sum of
(a) your rate of annual base salary in effect immediately prior to the
Change of Control, and (b) the greater of (1) the average of the annual
short-term cash incentive payments you received for each of the three
years prior to the year in which the Change of Control occurs, whether or |
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Mr. Stan Swearingen
January 22, 2008
Page 4
not includable in gross income for federal income tax purposes, or (2) your target
annual short-term cash incentive opportunity for the year in which the Change of
Control occurs; and (ii) on the date of any termination described in Section 1.1,
all of your then outstanding Skyworks stock options shall remain exercisable for a
period of eighteen (18) months after the termination date (or, if earlier, until
the last day of the full option term), subject to their other terms and
conditions; and (iii) Skyworks will provide you medical benefits substantially the
same as those provided to you at the time of termination for a period of eighteen
(18) months after the date of termination.
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1.5. |
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If any excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a
change in the ownership or effective control of Skyworks or a change in the ownership
of a substantial portion of the assets of Skyworks, determined in accordance with
Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other
amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the
sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on
(or economically borne by) you (including the Excise Tax, state and federal income
taxes and all applicable employment taxes) attributable to the receipt of the
Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment
exceed five hundred thousand U. S. dollars ($500, 000. 00), (ii) Skyworks shall have
no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to
the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later
than the last day of the calendar year following the calendar year in which you remit
the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the
receipt of the Gross-Up Payment shall be computed assuming the application of the
maximum tax rate provided by law. |
2. |
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Other Terminations of Employment |
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2.1. |
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If, during the Initial Term or the Additional Term (as defined in Section
7), your employment with Skyworks is terminated by Skyworks without
Cause, then you will receive the benefits specified in Section 2.3 below. If
your employment is terminated by Skyworks for Cause or by you for any
reason, you will not be entitled to receive the benefits specified in Section
2.3 below. This Section 2 shall not apply if you are entitled to receive the
benefits set forth in Section 1.4 above. |
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2.2. |
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Cause means (i) your deliberate dishonesty that is significantly
detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
4
Mr. Stan Swearingen
January 22, 2008
Page 5
(ii) conduct on your part constituting an act of moral turpitude; (iii) your
willful disloyalty to Skyworks or refusal or failure to obey the directions of the
Board; or (iv) your incompetent performance or substantial or continuing
inattention to or neglect of duties assigned to you. Any determination of Cause
must be made by the full Board at a meeting duly called.
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2.3. |
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Subject to the provisions of Sections 6 and 8, if, during the Initial
Term or the Additional Term (as defined in Section 7), your employment is terminated
by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60)
days) after the date of employment termination (or such later date as may be required
by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then
current annual base salary, and (y) any short-term cash incentive payment then due,
whether or not includable in gross income for federal income tax; and (ii) all of
your then vested outstanding Skyworks stock options will remain exercisable for a
period of twelve (12) months after the date of your employment termination (or, if
earlier, until the last day of the full option term), subject to their terms and
conditions. |
3. |
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Effect of Change of Control on Equity Awards |
If a Change of Control occurs during the Initial Term or the Additional Term, immediately
prior to such transaction constituting such Change of Control, (i) all of your then
unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any
restrictions on each outstanding restricted stock award shall lapse and such award will
become immediately vested; and, (iii) each outstanding performance share award shall be
deemed earned as to the greater of (a) the Target level of shares for such award or (b)
the number of shares that would have been earned pursuant to the terms of such award as of
the day prior to the date of such Change of Control, and such shares shall be issued by
the Company to you immediately prior to such Change of Control transaction.
4. |
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Non-Competition; Non-Solicitation |
During the term of your employment with Skyworks and for the first twenty-four (24) months
after the date on which your employment with Skyworks is terminated for any reason (the
Noncompete Period), you will not engage in any employment, consulting or other activity
that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks
(collectively, the Company). You acknowledge and agree that your direct or indirect
participation in the conduct of a competing business alone or with any other person will
materially impair the business and prospects of the Company. During the Noncompete Period,
you will not, either directly or indirectly, (i) attempt to
5
Mr. Stan Swearingen
January 22, 2008
Page 6
hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by
any other person, (iii) encourage any person to terminate his or her employment or business
relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or
interfere) with the Companys relationships with it employees, (v) encourage any customer
or supplier of the Company to terminate its relationship with the Company, or (vi) obtain,
or assist in obtaining, for your own benefit (other than indirectly as an employee of the
Company) any customer of the Company. If any of the restrictions in this Section 4 are
adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said
restriction shall be reduced to the extent necessary to make the restriction reasonable and
shall be binding on you as so reduced. Any provisions of this section not so reduced will
remain in full force and effect.
It is understood that during the Noncompete Period, you will make yourself available to
Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a
reasonable rate of compensation and at reasonable times and places in light of any
commitment you may have to a new employer.
You understand and acknowledge that Skyworks remedies at law for breach of any of the
restrictions in this Section 4 are inadequate and that any such breach will cause
irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to
such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any
court having jurisdiction to enforce the specific performance of the restrictions in this
Section 4, and may apply for injunctive relief against any act which would violate those
restrictions.
In the event of your death at any time during your employment by Skyworks, all of your
then outstanding Company stock options, whether or not by their terms then exercisable,
will become immediately exercisable and remain exercisable for a period of one year
thereafter, subject to their other terms and conditions.
In the event of your disability at any time during your employment by Skyworks, all of
your then outstanding Company stock options, whether or not by their terms then
exercisable, will become immediately exercisable and remain exercisable so long as you
remain an employee or officer of Skyworks and for a period of one year thereafter, subject
to their other terms and conditions.
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to
either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and
deliver to the General Counsel of Skyworks a release of claims in
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Mr. Stan Swearingen
January 22, 2008
Page 7
substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release
has become non-revocable by the sixtieth (60th) day following the date of termination of
your employment.
This Agreement shall be effective for an initial term of two (2) years from the date
hereof (the Initial Term); provided however, that (i) if your employment terminates
within the Initial Term, this Agreement shall remain in effect until all of your and
Skyworks obligations hereunder have been fully satisfied. Following the Initial Term,
this Agreement shall renew automatically on the anniversary hereof for up to five (5)
additional one (1) year periods (each an Additional Term) unless, at least ninety (90)
days prior to the end of the then current term of the Agreement, either party provides
written notice to the other party that the Agreement should not be extended, and (ii) if
your employment terminates during any Additional Term, this Agreement shall remain in
effect until all of your and Skyworks obligations hereunder have been fully satisfied.
Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4
shall survive any termination of this Agreement and extend throughout the Noncompete
Period.
All claims by you for benefits under this Agreement shall be directed to and determined by
the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to you in writing and shall set forth the
specific reasons for the denial and the specific provisions of this Agreement relied upon.
The Board shall afford a reasonable opportunity to you for a review of the decision denying
a claim. Any further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees
to pay as incurred, to the full extent permitted by law, all legal, accounting and other
fees and expenses which you may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by Skyworks, you or others regarding the validity or
enforceability of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by you regarding the amount of
any payment or benefits pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the
Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this
letter will operate to extend the life of any option beyond the term originally stated in
the applicable option grant or option agreement; (b) the reimbursement of a fee or expense
7
Mr. Stan Swearingen
January 22, 2008
Page 8
pursuant to this Section 8 shall be provided not later than the calendar year following the
calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses
eligible for reimbursement during any calendar year may not affect the amount of fees and
expenses eligible for reimbursement in any other calendar year, (d) the right to
reimbursement under this Section 8 is not subject to liquidation or exchange for another
benefit and (e) the obligation of Skyworks under this Section 8 shall survive the
termination for any reason of this agreement and shall remain in effect until the applicable
statute of limitation has expired with respect to any claim or contest (regardless of the
outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by you regarding the amount of any payment or benefits
pursuant to this Agreement).
This Agreement is intended to comply with Section 409A of the Code and any related
regulations or other applicable guidance promulgated thereunder (collectively, Section
409A), to the extent applicable. It is the intent of the parties hereto that all severance
payments and benefits provided pursuant to this Agreement qualify as short-term deferrals,
as defined in Treasury Regulation § 1.409A-1(a)(4), separation pay due to an involuntary
separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of
medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments,
as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a)
it is determined that any payments or benefits provided pursuant to this Agreement that are
paid upon separation from service (as that term is used in Section 409A) constitute
deferred compensation for purposes of Section 409A (after taking into account the
exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you
are a specified employee (as that term is used in Section 409A) when your employment
terminates, such payments or benefits (or portions thereof) that constitute deferred
compensation payable upon a separation from service that are to be paid or provided during
the six (6) month period following termination of your employment shall not be paid or
provided until the first business day after the date that is six (6) months following
termination of your employment or, if earlier, the first business day following the date of
your death. The payment that is made pursuant to the prior sentence shall include the
cumulative amount of any amounts that could not be paid during the six (6) month period.
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the
right to accelerate or to defer the delivery of the payments to be made under this
Agreement. Notwithstanding anything in this Agreement to the contrary, references to
employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to
mean separation from service, as that term is used in Section 409A of the Code and
related regulations. Accordingly, payments
8
Mr. Stan Swearingen
January 22, 2008
Page 9
to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a
separation from service (within the meaning of Section 409A of the Code and related
regulations) shall have occurred.
Skyworks may withhold (or cause to be withheld) from any payments made under this
Agreement, all federal, state, city or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling.
The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to
expressly assume and agree in writing, with a copy to you, to perform this Agreement in the
same manner and to the same extent as the Company would be required to perform this
Agreement as if no such succession had taken place. You acknowledge and agree,
and the Company acknowledges and agrees, that, without limitation to any other provision of
this Agreement which is also material, this provision is a material term of this Agreement
and an important clause benefiting you, to assure you that the obligation of Skyworks to
provide you with the existing benefits made available under this Agreement, are adhered to
by any successor to the Company, and the provision also benefits the Company in that the
assurance to you afforded by this provision is an important retention incentive to have you
remain in the employment of the Company.
This Agreement contains the entire understanding of the parties concerning its subject
matter, and if there is any conflict between the terms of this Agreement and the terms of
any other agreement (including but not limited to an equity award held by you or the
applicable plan under which such award was issued), the terms of this Agreement shall
govern. You shall not be eligible to receive severance or similar payments under any
severance plan, program or policy maintained by Skyworks. This Agreement may be modified
only by a written instrument executed by both parties. This Agreement replaces and
supersedes all prior agreements relating to your employment or severance, including without
limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will
be governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
9
Mr. Stan Swearingen
January 22, 2008
Page 10
Please sign both, copies of this Agreement and return one to Skyworks.
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Sincerely,
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AGREED TO: |
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SKYWORKS SOLUTIONS, INC. |
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/s/ David J. Aldrich
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/s/ Stan Swearingen |
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
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Mr. Stan Swearingen
January 22, 2008
EXHIBIT A
Form of Release of Claims
In consideration for receiving benefits pursuant to either, as applicable, Section 1.4 or
Section 2.3 of the Change in Control/Severance Agreement dated January 22, 2008
between you and Skyworks Solutions, Inc. (the Company) (the Agreement), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and assigns, agree to and do
hereby forever waive, release and discharge the Company, and each of its affiliated or related
entities, parents, subsidiaries, predecessors, successors, assigns, divisions, owners,
stockholders, partners, directors, officers, attorneys, insurers, benefit plans, employees and
agents, whether previously or hereinafter affiliated in any manner, as well as all persons or
entities acting by, through, or in concert with any of them (collectively, the Released Parties),
from any and all claims, debts, contracts, obligations, promises, controversies, agreements,
liabilities, demands, wage claims, expenses, charges of discrimination, harassment or retaliation,
disputes, agreements, damages, attorneys fees, or complaints of any nature whatsoever, whether or
not now known, suspected, claimed, matured or unmatured, existing or contingent, from the beginning
of time until the moment you have signed this Agreement, against the Released Parties (whether
directly or indirectly), or any of them, by reason of any act, event or omission concerning any
matter, cause or thing, including, without limiting the generality of the foregoing, any claims
related to or arising out of (i) your employment or its termination, (ii) any contract or agreement
(express or implied) between you and any of the Released Parties, (iii) any tort or tort-type
claim, (iv) any federal, state or governmental constitution, statute, regulation or ordinance,
including but not limited to the U. S. Constitution; Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the
Americans With Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker
Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974;
the Fair Labor Standards Act; any applicable Executive Order Programs; any similar state or local
statutes or laws; and any other federal, state, or local civil or human rights law, (v) any public
policy, contract or tort law, or under common law, (vi) any policies, practices or procedures of
the Company, (vii) any claim for wrongful discharge, breach of contract, infliction of emotional
distress, defamation, (vii) any claim for costs, fees, or other expenses, including attorneys fees
incurred in these matters, (viii) any impairment of your ability to obtain subsequent employment,
and (ix) any permanent or temporary disability or loss of future earnings.
For the purpose of implementing a full and complete release and discharge of the Released
Parties, you expressly acknowledge that this Agreement is intended to include
A-1
Mr. Stan Swearingen
January 22, 2008
and does include in its effect, without limitation, all claims which you do not know or suspect to
exist in your favor against the Released Parties, or any of them, at the moment of execution
hereof, and that this Agreement expressly contemplates the extinguishment of all such claims.
BY SIGNING THIS GENERAL RELEASE, YOU REPRESENT AND AGREE THAT:
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YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE
GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO,
RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF
1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS
AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED; |
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YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER
CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT
TO DO SO OF YOUR OWN VOLITION; |
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YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR
RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON
, ;
AND (B) TO CONSIDER IT AND THE
CHANGES MADE SINCE THE
, VERSION OF
THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
PERIOD; AND |
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YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE
EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS
RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL
THE REVOCATION PERIOD HAS EXPIRED. |
A-2
Mr. Stan Swearingen
January 22, 2008
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Agreed: |
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Date: |
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Acknowledged: SKYWORKS SOLUTIONS, INC. |
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By: |
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David J. Aldrich
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President and Chief Executive Officer |
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Date: |
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A-3
exv10wmm
EXHIBIT 10.MM
SKYWORKS SOLUTIONS, INC.
2008 DIRECTOR LONG-TERM INCENTIVE PLAN
1. Purpose
The purpose of this 2008 Director Long-Term Incentive Plan (the Plan) of Skyworks Solutions,
Inc., a Delaware corporation (the Company), is to advance the interests of the Companys
stockholders by enhancing the Companys ability to attract and retain the services of experienced
and knowledgeable directors and to provide additional incentives for such directors to continue to
work for the best interests of the Corporation and its stockholders through continuing ownership of
its common stock. Except where the context otherwise requires, the term Company shall include
any of the Companys present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the Code) and any other business venture (including, without limitation,
joint venture or limited liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the Board).
2. Eligibility
Each member of the Board who is not also an officer of the Company (a Director) is eligible
to receive options, restricted stock and other stock-based awards (each, an Award) under the
Plan. Each person who receives an Award under the Plan is deemed a Participant.
3. Administration and Delegation
(a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in
the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be
the sole and final judge of such expediency. All decisions by the Board shall be made in the
Boards sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a Committee). All references in the Plan to the Board shall mean the Board or a
Committee of the Board to the extent that the Boards powers or authority under the Plan have been
delegated to such Committee.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 8, Awards may be made under
the Plan covering up to the sum of (i) 600,000 shares of common stock, $.25 par value per share,
of the Company (the Common Stock), plus (ii) the shares of Common Stock that remain available for
grant under the Skyworks Solutions, Inc. 2001 Directors Stock Option Plan on the Effective Date.
(b) Counting of Shares. Subject to adjustment under Section 8, an option to purchase
Common Stock (each, an Option) shall be counted against the share limit specified in Section 4(a)
as
- 1 -
one share for each share of common stock subject to the Option, and an Award that is not an
Option (a Non-Option Award) shall be counted against the share limit specified in Section 4(a) as
one and one-half (1.5) shares for each share of Common Stock issued upon settlement of such
Non-Option Award.
(c) Lapses. If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part (including as the result of shares
of Common Stock subject to such Award being repurchased by the Company at the original issuance
price pursuant to a contractual repurchase right) or results in any Common Stock not being issued,
the unused Common Stock covered by such Award shall again be available for the grant of Awards
under the Plan. Shares issued under the Plan may consist in whole or in part of authorized but
unissued shares or treasury shares.
5. Stock Options
(a) General. The Board, in its discretion, may grant Options to Participants and,
subject to Section 5(c) below, determine the number of shares of Common Stock to be covered by each
Option, the exercise price of each Option and the conditions and limitations applicable to the
exercise of each Option, including conditions relating to applicable federal or state securities
laws, as it considers necessary or advisable. Any such grant may vary among individual
Participants. If the Board so determines, Options may be granted in lieu of cash compensation at
the Participants election, subject to such terms and conditions as the Board may establish.
(b) Exercise Price. Subject to Section 5(c) below, the Board shall establish the
exercise price of each Option and specify such exercise price in the applicable option agreement;
provided, however, that the exercise price shall not be less than 100% of the Fair Market Value (as
defined below in subsection (i)(3)) at the time the Option is granted.
(c) Automatic Grant of Options.
(1) Each Participant who is first elected to serve as a Director after the Effective Date of
the Plan shall automatically be granted an Option, on the fifth business day after his election, to
acquire 25,000 shares of Common Stock.
(2) The exercise price per share for the Common Stock covered by an Option granted under this
Section 5(c) shall be equal to the Fair Market Value of the Stock on the date the Option is
granted.
(3) Unless otherwise determined by the Board, an Option granted under Section 5(c) shall be
exercisable after the first anniversary of the date of grant for up to one-fourth (25%) of the
shares of Common Stock covered by the Option and, after each anniversary of the date of grant
thereafter, for up to an additional one-fourth (25%) of such shares of Common Stock until, on the
fourth anniversary of the date of grant, the Option may be exercised as to all (100%) of the shares
of Common Stock covered by the Option. An Option issued under this Section 5(c) shall not be
exercisable after the expiration of ten years from the date of grant.
(d) Options Not Deemed Incentive Stock Options. Any Option granted pursuant to the
Plan is not intended to be an incentive stock option described in Code Section 422 and shall be
designated a Nonqualified Stock Option.
(e) Limitation on Repricing. Unless such action is approved by the Companys
stockholders: (1) no outstanding Option granted under the Plan may be amended to provide an
exercise price per share that is lower than the then-current exercise price per share of such
outstanding Option (other than
- 2 -
adjustments pursuant to Section 8) and (2) the Board may not cancel any outstanding Option and
grant in substitution therefore new Awards under the Plan covering the same or a different number
of shares of Common Stock and having an exercise price per share lower than the then-current
exercise price per share of the cancelled Option.
(f) No Reload Rights. No Option granted under the Plan shall contain any provision
entitling the optionee to the automatic grant of additional Options in connection with any exercise
of the original Option.
(g) Duration of Options. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable option agreement; provided,
however, that no Option will be granted for a term in excess of ten (10) years.
(h) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(i)
for the number of shares for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with the Companys
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at
the time or times specified by the Board).
(i) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;
(3) by delivery of shares of Common Stock owned by the Participant valued at their fair market
value as determined by (or in a manner approved by) the Board (Fair Market Value), provided (i)
such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired
directly from the Company, was owned by the Participant for at least six (6) months and (iii) such
Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements; or
(4) by any combination of the above permitted forms of payment.
6. Restricted Stock; Restricted Stock Units.
(a) General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (Restricted Stock), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such
shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock,
the Board may grant Awards entitling the recipient to receive shares of Common Stock to be
delivered at the time such shares of Common Stock
- 3 -
vest or at a later date (Restricted Stock Units) subject to such terms and conditions on the
delivery of the shares of Common Stock as the Board shall determine (each Award for Restricted
Stock or Restricted Stock Units is referred to herein as a Restricted Stock Award).
(b) Terms and Conditions. Subject to Section 6(c) below, the Board shall determine
the terms and conditions of a Restricted Stock Award, including the conditions for repurchase (or
forfeiture) and the issue price, if any.
(c) Automatic Grant of Restricted Stock.
(1) Each Participant who is first elected to serve as a Director after the Effective Date of
the Plan shall automatically be granted, on the fifth business day after his election, 12,500
shares of Restricted Stock.
(2) Beginning on the date of the Companys 2008 annual meeting of stockholders, each
Participant who is serving as Director of the Company after each annual meeting of stockholders, or
special meeting in lieu of annual meeting of stockholders at which one or more directors are
elected, other than a newly elected Director who received a Restricted Stock Award pursuant to
Section 6(c)(1) above, shall automatically be granted on such day 12,500 shares of Restricted
Stock.
(3) Unless otherwise determined by the Board, the Companys repurchase or forfeiture rights on
an Award of Restricted Stock granted under Section 6(c) shall lapse as to one-third (33.33%) of the
shares of Restricted Stock on the first anniversary of the date of grant and, as to an additional
one-third (33.33%) of such shares of Restricted Stock, on each anniversary of the date of grant
thereafter until, on the third anniversary of the date of grant, the Companys repurchase or
forfeiture rights shall lapse as to all (100%) of the shares of Restricted Stock covered thereby.
(4) In lieu of Restricted Stock, the Board may grant Restricted Stock Units.
(d) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited by the Participant, together with a stock power endorsed in blank, with the
Company (or its designee). At the expiration of the applicable restriction periods, the Company
(or such designee) shall deliver the certificates no longer subject to such restrictions to the
Participant or if the Participant has died, to the beneficiary designated, in a manner determined
by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the
event of the Participants death (the Designated Beneficiary). In the absence of an effective
designation by a Participant, Designated Beneficiary shall mean the Participants estate.
7. Other Stock-Based Awards.
Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (Other Stock Unit Awards). Such Other Stock Unit Awards shall
also be available as a form of payment in the settlement of other Awards granted under the Plan or
as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock Unit
Awards may be paid in shares of Common Stock or cash, as the Board shall determine. Subject to the
provisions of the Plan, the Board shall determine the conditions of each Other Stock Unit Awards,
including any purchase price applicable thereto and any conditions applicable thereto, including
without limitation, performance-based conditions.
- 4 -
8. Adjustments for Changes in Common Stock and Certain Other Events.
(a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this
Plan, (ii) the sub-limits set forth in Section 4(b), (iii) the number and class of securities and
exercise price per share of each outstanding Option, (iv) the number of securities issuable
pursuant to automatic Awards made under Sections 5(c) and 6(c), (v) the repurchase price per share
subject to each outstanding Restricted Stock Award and (vi) the share- and per-share-related
provisions of each outstanding Other Stock Unit Award, shall be appropriately adjusted by the
Company (or substituted Awards may be made, if applicable) to the extent determined by the Board.
(b) Reorganization Events.
(1) Definition. A Reorganization Event shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property
or is cancelled, (b) any exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction or (c) any liquidation or dissolution of
the Company.
(2) Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board shall take any one or more of the
following actions as to all or any outstanding Awards on such terms as the Board determines:
(i) provide that Awards shall be assumed, or substantially equivalent Awards shall be substituted,
by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a
Participant, provide that the Participants unexercised Options or other unexercised Awards shall
become exercisable in full and will terminate immediately prior to the consummation of such
Reorganization Event unless exercised by the Participant within a specified period following the
date of such notice, (iii) provide that outstanding Awards shall become realizable or deliverable,
or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such
Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders
of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the Acquisition Price), make or provide for a cash payment to a
Participant equal to (A) the Acquisition Price times the number of shares of Common Stock subject
to the Participants Options or other Awards (to the extent the exercise price does not exceed the
Acquisition Price) minus (B) the aggregate exercise price of all such outstanding Options or other
Awards, in exchange for the termination of such Options or other Awards, (v) provide that, in
connection with a liquidation or dissolution of the Company, Awards shall convert into the right to
receive liquidation proceeds (if applicable, net of the exercise price thereof) and (vi) any
combination of the foregoing.
For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration
- 5 -
to be received upon the exercise of Options to consist solely of common stock of the acquiring
or succeeding corporation (or an affiliate thereof) equivalent in fair market value to the per
share consideration received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.
To the extent all or any portion of an Option becomes exercisable solely as a result of clause
(ii) above, the Board may provide that upon exercise of such Option the Participant shall receive
shares subject to a right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option would have become
exercisable under its terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.
(3) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Companys successor and shall apply to the cash, securities or other
property which the Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common Stock subject to such
Restricted Stock Award. Upon the occurrence of a Reorganization Event involving the liquidation or
dissolution of the Company, except to the extent specifically provided to the contrary in the
instrument evidencing any Restricted Stock Award or any other agreement between a Participant and
the Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied.
(c) Change in Control Events.
(1) Definition. A Change in Control Event will be deemed to have occurred if the
Continuing Directors (as defined below) cease for any reason to constitute a majority of the Board.
For this purpose, a Continuing Director will include any member of the Board as of the Effective
Date (as defined below) and any individual nominated for election to the Board by a majority of the
then Continuing Directors.
(2) Consequences of a Change in Control Event on Options. Notwithstanding any other
provision of this Plan to the contrary, if a Change in Control Event occurs, except to the extent
specifically provided to the contrary in the instrument evidencing any Option or any other
agreement between a Participant and the Company, any options outstanding as of the date such Change
of Control is determined to have occurred and not then exercisable shall become fully exercisable
to the full extent of the original grant.
(3) Consequences of a Change in Control Event on Restricted Stock Awards.
Notwithstanding any other provision of this Plan to the contrary, if a Change in Control Event
occurs, except to the extent specifically provided to the contrary in the instrument evidencing any
Restricted Stock Award or any other agreement between a Participant and the Company, all
restrictions and conditions on all Restricted Stock Awards then outstanding shall automatically be
deemed terminated or satisfied.
9. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of
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descent and distribution and, during the life of the Participant, shall be exercisable only by
the Participant. References to a Participant, to the extent relevant in the context, shall include
references to authorized transferees.
(b) Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise) as the Board shall determine. Such written instrument may be in the form of an
agreement signed by the Company and the Participant or a written confirming memorandum to the
Participant from the Company. Each Award may contain terms and conditions in addition to those set
forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, or other change in the non-employee director status of a Participant and the
extent to which, and the period during which, the Participant, or the Participants legal
representative, conservator, guardian or Designated Beneficiary, may exercise rights under the
Award.
(e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. Except as the Board may otherwise provide in an Award, for so
long as the Common Stock is registered under the Exchange Act, Participants may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including shares retained
from the Award creating the tax obligation, valued at their Fair Market Value; provided, however,
except as otherwise provided by the Board, that the total tax withholding where stock is being used
to satisfy such tax obligations cannot exceed the Companys minimum statutory withholding
obligations (based on minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable income). Shares
surrendered to satisfy tax withholding requirements cannot be subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.
(f) Amendment of Award. Except as provided in Section 5, the Board may amend, modify
or terminate any outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type and changing the date of exercise or realization, provided
that the Participants consent to such action shall be required unless the Board determines that
the action, taking into account any related action, would not materially and adversely affect the
Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Companys counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.
(h) Acceleration. Except as otherwise provided in Section 8(c), the Board may at any
time provide that any Award shall become immediately exercisable in full or in part, free of some
or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.
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10. Miscellaneous
(a) No Right To Status. No person shall have any claim or right to be granted an
Award, and the grant of an Award shall not be construed as giving a Participant the right to any
relationship with the Company. The Company expressly reserves the right at any time to dismiss or
otherwise terminate its relationship with a Participant free from any liability or claim under the
Plan, except as expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares. Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to such Option are adjusted as of the date of the distribution of the dividend (rather than
as of the record date for such dividend), then an optionee who exercises an Option between the
record date and the distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such
Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of
business on the record date for such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is approved by the Companys stockholders (the Effective Date), and no Award may be
granted until the Effective Date. No Awards shall be granted under the Plan after the completion
of 10 years from the Effective Date, but Awards previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time; provided that, without approval of the Companys stockholders, no
amendment may (1) increase the number of shares authorized under the Plan (other than pursuant to
Section 8), (2) materially increase the benefits provided under the Plan, (3) materially expand the
class of participants eligible to participate in the Plan, (4) expand the types of Awards provided
under the Plan or (5) make any other changes that require stockholder approval under the rules of
the Nasdaq Stock Market, Inc. No Award shall be made that is conditioned upon stockholder approval
of any amendment to the Plan.
(e) Provisions for Foreign Participants. The Board may modify Awards or Options
granted to Participants who are foreign nationals or employed outside the United States or
establish subplans or procedures under the Plan to recognize differences in laws, rules,
regulations or customs of such foreign jurisdictions with respect to tax, securities, currency,
employee benefit or other matters.
(f) Compliance With Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code.
(g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, without regard to
any applicable conflicts of law.
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exv10wnn
EXHIBIT 10.NN
Skyworks Solutions, Inc.
Restricted Stock Agreement
Granted Under 2008 Director Long-Term Incentive Plan
AGREEMENT made this day of , 2008 (the Grant Date), between Skyworks Solutions,
Inc. a Delaware corporation (the Company), and (the Director).
For good and valuable consideration, receipt of which is acknowledged, the parties hereto
agree as follows:
1. Issuance of Shares.
The Company shall issue to the Director, subject to the terms and conditions set forth in this
Agreement and in the Companys 2008 Director Long-Term Incentive Plan (the Plan),
shares (the Shares) of common stock, $0.25 par value, of the Company (Common Stock). The
Company shall issue to the Director one or more certificates in the name of the Director for that
number of Shares to be issued to the Director hereunder, or, alternatively, the Shares may be held
in book entry by the Companys transfer agent in the name of the Director for that number of Shares
issued to the Director. The Director agrees that the Shares shall be subject to forfeiture pursuant
to Section 2 of this Agreement and the restrictions on transfer set forth in Section 4 of this
Agreement.
2. Forfeiture Option.
(a) In the event that the Director ceases to serve as a member of the Board of Directors of
the Company for any reason or no reason, except as set forth in Section 2(b) below, prior to the
third anniversary of the Grant Date, the Company shall have the right and option (the Forfeiture
Option) to demand that the Director forfeit some or all of the Unvested Shares (as defined below).
Unvested Shares means the total number of Shares subject to this Agreement multiplied by the
Applicable Percentage at the time the Forfeiture Option becomes exercisable by the Company. The
Applicable Percentage shall be (i) 100% during the 12-month period ending on the day preceding
the first anniversary of the Grant Date, (ii) 66.67% during the 12-month period beginning on and
after the first anniversary of the Grant Date and ending on the day preceding the second
anniversary of the Grant Date, (iii) 33.33% during the 12-month period beginning on and after the
second anniversary of the Grant Date and ending on the day preceding the third anniversary of the
Grant Date, and (iv) zero on and after the third anniversary of the Grant Date.
(b) In the event that the Director ceases to serve as a member of the Board of Directors of
the Company by reason of death or disability, the number of the Shares for which the Forfeiture
Option becomes exercisable shall be zero percent (0%) of the number of Unvested Shares for which
the Forfeiture Option would otherwise become exercisable. For this purpose, disability shall
mean the permanent disability of the Director as defined in Section 22(e)(3) of the Internal
Revenue Code of 1986.
3. Exercise of Forfeiture Option and Closing.
(a) The Company may exercise the Forfeiture Option by delivering or mailing to the Director
(or his estate), within 90 days after the cessation of the service of the Director with the
Company, a written notice of exercise of the Forfeiture Option. Such notice shall specify the
number of Shares to be forfeited. If and to the extent the Forfeiture Option is not so exercised
by the giving of such a notice within such 90-day period, the Forfeiture Option shall automatically
expire and terminate effective upon the expiration of such 90-day period.
(b) Within 10 days after delivery to the Director of the Companys notice of the exercise of
the Forfeiture Option pursuant to subsection (a) above, the Director (or his estate) shall,
pursuant to the provisions of the Joint Escrow Instructions referred to in Section 5 below, tender
to the Company at its principal offices the certificate or certificates representing the Shares
which the Company has demanded forfeiture of in accordance with the terms of this Agreement, duly
endorsed in blank or with duly endorsed stock powers attached thereto, all in form suitable for the
transfer of such Shares to the Company.
(c) After the time at which any Shares are required to be delivered to the Company for
transfer to the Company pursuant to subsection (b) above, the Company shall not pay any dividend to
the Director on account of such Shares or permit the Director to exercise any of the privileges or
rights of a stockholder with respect to such Shares, but shall, in so far as permitted by law,
treat the Company as the owner of such Shares.
(d) The Company shall not demand forfeiture of any fraction of a Share upon exercise of the
Forfeiture Option, and any fraction of a Share resulting from a computation made pursuant to
Section 2 of this Agreement shall be rounded to the nearest whole Share (with any one-half Share
being rounded upward).
(e) The Company may assign its Forfeiture Option to one or more persons or entities.
4. Restrictions on Transfer.
The Director shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by
operation of law or otherwise (collectively transfer) any Shares, or any interest therein, that
are subject to the Forfeiture Option, except that the Director may transfer such Shares (i) to or
for the benefit of any spouse, children, parents, uncles, aunts, siblings, grandchildren and any
other relatives approved in writing by the Board of Directors (collectively, Approved Relatives)
or to a trust established solely for the benefit of the Director and/or Approved Relatives,
provided that such Shares shall remain subject to this Agreement (including without
limitation the restrictions on transfer set forth in this Section 4 and the Forfeiture Option set
forth in Section 2) and such permitted transferee shall, as a condition to such transfer, deliver
to the Company a written instrument confirming that such transferee shall be bound by all of the
terms and conditions of this Agreement or (ii) as part of the sale of all or substantially all of
the shares of capital stock of the Company (including pursuant to a merger or consolidation),
provided that, in accordance with the Plan, the securities or other property received by
the Director in connection with such transaction shall remain subject to this Agreement..
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5. Escrow.
The Director shall, upon the execution of this Agreement, execute Joint Escrow Instructions in
the form attached to this Agreement as Exhibit A. The Joint Escrow Instructions shall be
delivered to the General Counsel of the Company, as escrow agent thereunder. The Director shall
deliver to such escrow agent a stock assignment duly endorsed in blank, in the form attached to
this Agreement as Exhibit B, and hereby instructs the Company to deliver to such escrow
agent, on behalf of the Director, the certificate(s) evidencing the Shares issued hereunder. Such
materials shall be held by such escrow agent pursuant to the terms of such Joint Escrow
Instructions.
6. Restrictive Legends.
All certificates representing Shares shall have affixed thereto legends in substantially the
following form, in addition to any other legends that may be required under federal or state
securities laws:
The shares of stock represented by this certificate are subject to
restrictions on transfer and a forfeiture option set forth in a
certain Restricted Stock Agreement between the corporation and the
registered owner of these shares (or his predecessor in interest),
and such Agreement is available for inspection without charge at the
office of the Secretary of the corporation.
7. Provisions of the Plan.
(a) This Agreement is subject to the provisions of the Plan, a copy of which is furnished to
the Director with this Agreement.
(b) As provided in the Plan, upon the occurrence of a Reorganization Event (as defined in the
Plan), the rights of the Company hereunder (including the right to exercise the Forfeiture Option)
shall inure to the benefit of the Companys successor and shall apply to the cash, securities or
other property which the Shares were converted into or exchanged for pursuant to such
Reorganization Event in the same manner and to the same extent as they applied to the Shares under
this Agreement. If, in connection with a Reorganization Event, a portion of the cash, securities
and/or other property received upon the conversion or exchange of the Shares is to be placed into
escrow to secure indemnification or similar obligations, the mix between the vested and unvested
portion of such cash, securities and/or other property that is placed into escrow shall be the same
as the mix between the vested and unvested portion of such cash, securities and/or other property
that is not subject to escrow.
8. Section 83(b) Election.
(a) The Director has reviewed with the Directors own tax advisors the federal, state, local
and foreign tax consequences of this investment and the transactions contemplated by this
Agreement. The Director is relying solely on such advisors and not on any statements or
representations of the Company or any of its agents. The Director understands that the Director
(and not the Company) shall be responsible for the Directors own tax liability that
- 3 -
may arise as a result of this investment or the transactions contemplated by this Agreement.
The Director understands that it may be beneficial in many circumstances to elect to be taxed at
the time the Shares are issued rather than when and as the Companys Forfeiture Option expires by
filing an election under Section 83(b) of the Internal Revenue Code of 1986 with the Internal
Revenue Service within 30 days from the date of issuance.
THE DIRECTOR ACKNOWLEDGES THAT IT IS THE DIRECTORS SOLE RESPONSIBILITY AND NOT THE COMPANYS
TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE DIRECTOR REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON THE DIRECTORS BEHALF.
9. Miscellaneous.
(a) No Rights to Continue as a Director. The Participant acknowledges and agrees that
the vesting of the Shares pursuant to Section 2 hereof is earned only by continuing service as
member of the Board of Directors of the Company. The Participant further acknowledges and agrees
that the transactions contemplated hereunder and the vesting schedule set forth herein do not
constitute an express or implied promise of continued engagement as a member of the Board of
Directors of the Company.
(b) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to the extent
permitted by law.
(c) Waiver. Any provision for the benefit of the Company contained in this Agreement
may be waived, either generally or in any particular instance, by the Board of Directors of the
Company.
(d) Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Company and the Director and their respective heirs, executors, administrators, legal
representatives, successors and assigns, subject to the restrictions on transfer set forth in
Section 4 of this Agreement.
(e) Notice. All notices required or permitted hereunder shall be in writing and
deemed effectively given upon personal delivery or five days after deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party hereto
at the address shown beneath his or its respective signature to this Agreement, or at such other
address or addresses as either party shall designate to the other in accordance with this
Section 9.
(f) Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns
and pronouns shall include the plural, and vice versa.
(g) Entire Agreement. This Agreement and the Plan constitute the entire agreement
between the parties, and supersedes all prior agreements and understandings, relating to the
subject matter of this Agreement.
- 4 -
(h) Amendment. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Director.
(i) Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws of the State of Delaware without regard to any applicable
conflicts of laws.
(j) Directors Acknowledgments. The Director acknowledges that he or she: (i) has
read this Agreement; (ii) has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of the Directors own choice or has voluntarily declined to seek
such counsel; (iii) understands the terms and consequences of this Agreement; and (iv) is fully
aware of the legal and binding effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.
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Skyworks Solutions, Inc. |
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By:
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Title:
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President & CEO |
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[DIRECTOR] |
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Exhibit A
Skyworks Solutions, Inc.
Joint Escrow Instructions
DATE [ ]
VP and General Counsel
Skyworks Solutions, Inc.
20 Sylvan Road
Woburn, MA 01801
Dear Sir:
As Escrow Agent for Skyworks Solutions, Inc., a Delaware corporation, and its successors in
interest under the Restricted Stock Agreement (the Agreement) of even date herewith, to which a
copy of these Joint Escrow Instructions is attached (the Company), and the undersigned person
(Holder), you are hereby authorized and directed to hold the documents delivered to you pursuant
to the terms of the Agreement in accordance with the following instructions:
1. Appointment. Holder irrevocably authorizes the Company to deposit with you any
certificates evidencing Shares (as defined in the Agreement) to be held by you hereunder and any
additions and substitutions to said Shares. For purposes of these Joint Escrow Instructions,
Shares shall be deemed to include any additional or substitute property. Holder does hereby
irrevocably constitute and appoint you as his attorney-in-fact and agent for the term of this
escrow to execute with respect to such Shares all documents necessary or appropriate to make such
Shares negotiable and to complete any transaction herein contemplated. Subject to the provisions
of this Section 1 and the terms of the Agreement, Holder shall exercise all rights and privileges
of a stockholder of the Company while the Shares are held by you.
2. Closing of Forfeiture.
(a) Upon any exercise of the Forfeiture Option by the Company pursuant to the Agreement, the
Company shall give to Holder and you a written notice specifying the number of Shares to be
tendered, as determined pursuant to the Agreement, and the time for a closing hereunder (the
Closing) at the principal office of the Company. Holder and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in accordance with
the terms of said notice.
(b) At the Closing, you are directed (i) to date the stock assignment form or forms necessary
for the transfer of the Shares, (ii) to fill in on such form or forms the number of Shares being
transferred, and (iii) to deliver same, together with the certificate or certificates evidencing
the Shares to be transferred.
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3. Withdrawal. The Holder shall have the right to withdraw from this escrow any
Shares as to which the Forfeiture Option (as defined in the Agreement) has terminated or expired.
4. Duties of Escrow Agent.
(a) Your duties hereunder may be altered, amended, modified or revoked only by a writing
signed by all of the parties hereto.
(b) You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties. You shall not be personally liable for any act you may do or omit to do
hereunder as Escrow Agent or as attorney-in-fact of Holder while acting in good faith and in the
exercise of your own good judgment, and any act done or omitted by you pursuant to the advice of
your own attorneys shall be conclusive evidence of such good faith.
(c) You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or entity, excepting only orders or process of courts of law,
and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any
court. If you are uncertain of any actions to be taken or instructions to be followed, you may
refuse to act in the absence of an order, judgment or decrees of a court. In case you obey or
comply with any such order, judgment or decree of any court, you shall not be liable to any of the
parties hereto or to any other person or entity, by reason of such compliance, notwithstanding any
such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated
or found to have been entered without jurisdiction.
(d) You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.
(e) You shall be entitled to employ such legal counsel and other experts as you may deem
necessary properly to advise you in connection with your obligations hereunder and may rely upon
the advice of such counsel.
(f) Your rights and responsibilities as Escrow Agent hereunder shall terminate if (i) you
cease to be Secretary of the Company or (ii) you resign by written notice to each party. In the
event of a termination under clause (i), your successor as Secretary shall become Escrow Agent
hereunder; in the event of a termination under clause (ii), the Company shall appoint a successor
Escrow Agent hereunder.
(g) If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.
(h) It is understood and agreed that if you believe a dispute has arisen with respect to the
delivery and/or ownership or right of possession of the securities held by you hereunder, you are
authorized and directed to retain in your possession without liability to
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anyone all or any part of said securities until such dispute shall have been settled either by
mutual written agreement of the parties concerned or by a final order, decree or judgment of a
court of competent jurisdiction after the time for appeal has expired and no appeal has been
perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.
(i) These Joint Escrow Instructions set forth your sole duties with respect to any and all
matters pertinent hereto and no implied duties or obligations shall be read into these Joint Escrow
Instructions against you.
(j) The Company shall indemnify you and hold you harmless against any and all damages, losses,
liabilities, costs, and expenses, including attorneys fees and disbursements, (including without
limitation the fees of counsel retained pursuant to Section 4(e) above, for anything done or
omitted to be done by you as Escrow Agent in connection with this Agreement or the performance of
your duties hereunder, except such as shall result from your gross negligence or willful
misconduct.
5. Notice. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery or upon deposit in the United States Post
Office, by registered or certified mail with postage and fees prepaid, addressed to each of the
other parties thereunto entitled at the following addresses, or at such other addresses as a party
may designate by ten days advance written notice to each of the other parties hereto.
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COMPANY:
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Notices to the Company shall be sent to the address set
forth in the salutation hereto, Attn: General Counsel
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HOLDER:
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Notices to Holder shall be sent to the address set forth
below Holders signature below. |
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ESCROW AGENT:
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Notices to the Escrow Agent shall be sent to the address set
forth in the salutation hereto. |
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6. Miscellaneous.
(a) By signing these Joint Escrow Instructions, you become a party hereto only for the purpose
of said Joint Escrow Instructions, and you do not become a party to the Agreement.
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(b) This instrument shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
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Very truly yours, |
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Skyworks Solutions, Inc. |
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By:
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Title:
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President & CEO |
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HOLDER: |
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(Signature) |
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Name: |
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Date Signed: |
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Exhibit B
(STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE)
FOR VALUE RECEIVED, I hereby sell, assign and transfer unto ( ) shares of
Common Stock, $0.25 par value per share, of (the Corporation) standing in my name on
the books of the Corporation represented by Certificate(s) Number herewith, and do
hereby irrevocably constitute and appoint attorney to transfer the said
stock on the books of the Corporation with full power of substitution in the premises.
NOTICE: The signature(s) to this assignment must correspond with the name as written upon the
face of the certificate, in every particular, without alteration, enlargement, or any change
whatever and must be guaranteed by a commercial bank, trust company or member firm of the Boston,
New York or Midwest Stock Exchange.
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exv10woo
EXHIBIT 10.OO
SKYWORKS SOLUTIONS, INC.
Nonstatutory Stock Option Agreement
Granted Under 2008 Director Long-Term Incentive Plan
1. Grant of Option.
This agreement evidences the grant by Skyworks Solutions, Inc., a Delaware corporation (the
Company), on , 200[ ] (the Grant Date) to [ ], a
member of the Board of Directors of the Company (the Director), of an option to purchase, in
whole or in part, on the terms provided herein and in the Companys 2008 Director Long-Term
Incentive Plan (the Plan), a total of [ ] shares (the Shares) of
common stock, $.25 par value per share, of the Company (Common Stock) at $[ ]
per Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on
[ ][10 YEARS FROM DATE OF GRANT] (the Final Exercise Date).
It is intended that the option evidenced by this agreement shall not be an incentive stock
option as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the Code). Except as otherwise indicated by the context, the
term Director, as used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.
2. Vesting Schedule.
This option will become exercisable (vest) as to twenty-five percent (25%) of the original
number of Shares on the first anniversary of the Grant Date and as to an additional twenty-five
(25%) of the original number of Shares at the end of each successive twelve-month period following
the first anniversary of the Grant Date until the fourth anniversary of the Grant Date.
The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.
3. Exercise of Option.
(a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Director, or by any other form of notice (including electronic notice) that has been
approved by the Companys Board of Directors, and received by the Company at its principal office
or by a person designated by the Company, accompanied by this agreement, and payment in full in the
manner provided in the Plan. The Director may purchase less than the number of shares covered
hereby, provided that no partial exercise of this option may be for any fractional share.
(b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Director, at the time he or
she exercises this option, is, and has been at all times since the Grant Date, a member of the
Board of Directors of the Company or any other entity the directors of which are eligible to
receive option grants under the Plan (an Eligible Participant).
(c) Termination of Relationship with the Company. If the Director ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the
right to exercise this option shall terminate three (3) months after such cessation (but in no
event after the Final Exercise Date), provided that this option shall be
exercisable only to the extent that the Director was entitled to exercise this option on the date
of such cessation.
(d) Exercise Period Upon Death. If the Director ceases to be an Eligible Participant
due to his or her death prior to the Final Exercise Date while he or she is an Eligible
Participant, this option shall be exercisable as to all shares then vested and unvested, within the
period of twelve (12) months following the date of death of the Director, by an authorized
transferee, provided that this option shall not be exercisable after the Final
Exercise Date.
(e) Exercise Period Upon Disability. If the Director ceases to be an Eligible
Participant because the Director becomes permanently disabled (within the meaning of Section
22(e)(3) of the Code) prior to the Final Exercise Date while he or she is an Eligible Participant,
this option shall be exercisable, within the period of six (6) months following the date of
disability of the Director, by the Director, provided that this option shall be
exercisable only to the extent that this option was exercisable by the Director on the date of his
or her disability, and further provided that this option shall not be exercisable after the Final
Exercise Date.
4. Nontransferability of Option.
This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Director, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Director, this option shall be exercisable only by
the Director.
5. Provisions of the Plan.
This option is subject to the provisions of the Plan, a copy of which is furnished to the
Director with this option.
6. No Obligation to Continue as a Director.
Neither the Plan nor this Option confers upon the Director any rights with respect to
continuance as a member of the Board of Directors of the Company.
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IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.
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DIRECTORS ACCEPTANCE
The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Companys 2008 Director
Long-Term Incentive Plan.
exv10wpp
EXHIBIT 10.PP
SKYWORKS SOLUTIONS, INC.
2002 EMPLOYEE STOCK PURCHASE PLAN
1. Purpose.
The Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan (hereinafter the Plan) is intended
to provide a method whereby employees of Skyworks Solutions, Inc. (the Company) and its
participating subsidiaries (as defined in Article 18) will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of the Companys Common Stock.
It is the intention of the Company to have the Plan qualify as an employee stock purchase plan
under Section 423 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code).
The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation
in a manner consistent with the requirements of that Section of the Internal Revenue Code.
2. Eligible Employees.
All employees of the Company or any of its participating subsidiaries who are employed by the
Company at least ten (10) business days prior to the first day of the applicable Offering Period
shall be eligible to receive options under this Plan to purchase the Companys Common Stock. Except
as otherwise provided herein, persons who become eligible employees after the first day of any
Offering Period shall be eligible to receive options on the first day of the next succeeding
Offering Period on which options are granted to eligible employees under the Plan. For the purpose
of this Plan, the term employee shall not include an employee whose customary employment is less
than twenty (20) hours per week or is for not more than five (5) months in any calendar year.
In no event may an employee be granted an option if such employee, immediately after the option is
granted, owns stock possessing five (5%) percent or more of the total combined voting power or
value of all classes of stock of the Company or of its parent corporation or subsidiary corporation
as the terms parent corporation and subsidiary corporation are defined in Section 424(e) and
(f) of the Internal Revenue Code. For purposes of determining stock ownership under this paragraph,
the rules of Section 424(d) of the Internal Revenue Code shall apply and stock which the employee
may purchase under outstanding options shall be treated as stock owned by the employee.
3. Stock Subject to the Plan.
The stock subject to the options granted hereunder shall be shares of the Companys authorized but
unissued Common Stock or shares of Common Stock reacquired by the Company, including shares
purchased in the open market. Subject to approval of the stockholders, the aggregate number of
shares which may be issued pursuant to the Plan is 6,130,000 for all Offering Periods, subject to
increase or decrease by reason of stock split-ups, reclassifications, stock dividends, changes in
par value and the like. If any option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject to such option shall again be available under the
Plan. If the number of shares of Common Stock available for any Offering Period is insufficient to
satisfy all purchase requirements for that Offering Period, the available
shares for that Offering Period shall be apportioned among participating employees in proportion to
their options.
4. Offering Periods and Stock Options.
There shall be Offering Periods during which payroll deductions will be accumulated under the Plan.
Each Offering Period includes only regular pay days falling within it. The Committee shall be
expressly permitted to establish the Offering Periods, including the Offering Commencement Date and
Offering Termination Date of any Offering Period, under this Plan; provided, however, that, in no
event shall any Offering Period extend for more than twenty-four (24) months. The Offering
Commencement Date is the first day of each Offering Period. The Offering Termination Date is the
applicable date on which an Offering Period ends under this Plan.
Subject to the foregoing, the Offering Periods shall generally commence and end as follows:
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Provided, however, that (i) the Offering Commencement Date and Offering Termination Date of the
initial Offering Period under this Plan shall be October 21, 2002 and March 31, 2003, respectively,
and (ii) the Offering Commencement Date and Offering Termination Date of the Offering Period
immediately following the initial Offering Period under this Plan shall be April 1, 2003 and July
31, 2003, respectively.
On each Offering Commencement Date, the Company will grant to each eligible employee who is then a
participant in the Plan an option to purchase on the Offering Termination Date at the Option
Exercise Price, as hereinafter provided, that number of full shares of Common Stock reserved for
the purpose of the Plan, up to a maximum of 1,000 shares, subject to increase or decrease (i) at
the discretion of the Committee before each Offering Period or (ii) by reason of stock split-ups,
reclassifications, stock dividends, changes in par value and the like (the Share Cap); provided
that such employee remains eligible to participate in the Plan throughout such Offering Period. If
the eligible employees accumulated payroll deductions on the Offering Termination Date would
enable the eligible employee to purchase more than the Share Cap except for the Share Cap, the
excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the
Share Cap shall be refunded to the eligible employee as soon as administratively practicable by the
Company, without interest. The Option Exercise Price for each Offering Period shall be the lesser
of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering
Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock
on the Offering Termination Date, in either case rounded up to the next whole cent. In the event of
an increase or decrease in the number of outstanding shares of Common Stock through stock
split-ups, reclassifications, stock dividends, changes in par value and the like, an appropriate
adjustment shall be made in the number of shares and Option Exercise Price per share provided for
under the Plan, either by a proportionate increase in the number of shares and proportionate
decrease in the Option Exercise Price per share, or by a proportionate decrease in the number of
shares and a proportionate increase in the Option Exercise Price per share, as may be required to
enable an eligible employee who is then a
participant in the Plan to acquire on the Offering Termination Date that number of full shares of
Common Stock as his accumulated payroll deductions on such date will pay for at a price equal to
the lesser of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the
Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the
Common Stock on the Offering Termination Date, in either case rounded up to the next whole cent, as
so adjusted.
For purposes of this Plan, the term fair market value means, if the Common Stock is listed on a
national securities exchange or is on the National Association of Securities Dealers Automated
Quotation (Nasdaq) Global Select Market system, the closing sale price of the Common Stock on
such exchange or as reported on Nasdaq or, if the Common Stock is traded in the over-the-counter
securities market, but not on the Nasdaq Global Select Market, the closing bid quotation for the
Common Stock, each as published in The Wall Street Journal. If no shares of Common Stock are traded
on the Offering Commencement Date or Offering Termination Date, the fair market value will be
determined on the next regular business day on which shares of Common Stock are traded.
For purposes of this Plan the term business day as used herein means a day on which there is
trading on the Nasdaq Global Select Market or such national securities exchange on which the Common
Stock is listed.
No employee shall be granted an option which permits his rights to purchase Common Stock under the
Plan and any similar plans of the Company or any parent or subsidiary corporations to accrue at a
rate which exceeds $25,000 of fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding at any time. The purpose of
the limitation in the preceding sentence is to comply with and shall be construed in accordance
with Section 423(b)(8) of the Internal Revenue Code. If the participants accumulated payroll
deductions on the last day of the Offering Period would otherwise enable the participant to
purchase Common Stock in excess of the Section 423(b)(8) limitation described in this paragraph,
the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of
the shares actually purchased shall be refunded as soon as administratively practicable to the
participant by the Company, without interest.
5. Exercise of Option.
Each eligible employee who continues to be a participant in the Plan on the Offering Termination
Date shall be deemed to have exercised his or her option on such date and shall be deemed to have
purchased from the Company such number of full shares of Common Stock reserved for the purpose of
the Plan as his or her accumulated payroll deductions on such date will pay for at the Option
Exercise Price subject to the Share Cap and the Section 423(b)(8) limitation described in
Article 4. If a participant is not an employee on the Offering Termination Date and throughout an
Offering Period, he or she shall not be entitled to exercise his or her option.
If a participants accumulated payroll deductions in his or her account are based on a currency
other than the U.S. dollar, then on the Offering Termination Date the accumulated payroll
deductions in his or her account will be converted into an equivalent value of U.S. dollars based
upon the U.S. dollar-foreign currency exchange rate in effect on that date, as reported in The Wall
Street Journal, provided that such conversion does not result in an Option Exercise Price which is,
in fact, less than the lesser of an amount equal to 85 percent of the fair market value of the
Common Stock at the time such option is granted or 85 percent of the fair market value of the
Common Stock at the time such option is exercised. The Plan administrators (as defined in Article
19) shall have the right to change such conversion date, as they deem appropriate to effectively
purchase shares on any Offering Termination Date, provided that such action does not cause the
Plan, or any grants under the Plan, to fail to qualify under Section 423 of the Internal Revenue
Code.
6. Authorization for Entering Plan.
An eligible employee may enter the Plan by following a written, electronic or other enrollment
process, including a payroll deduction authorization, as prescribed by the Plan administrators
under generally applicable rules. Except as may otherwise be established by the Plan administrators
under generally applicable rules, all enrollment authorizations shall be effective only if
delivered to the designated Plan administrator(s) in accordance with the prescribed procedures not
later than ten (10) business days before an applicable Offering Commencement Date Participation may
be conditioned on an eligible employees consent to transfer and process personal data and on
acknowledgment and agreement to Plan terms and other specified conditions.
The Company will accumulate and hold for the employees account the amounts deducted from his or
her pay. No interest will be paid thereon. Participating employees may not make any separate cash
payments into their account.
Unless an employee files a new authorization, or withdraws from the Plan, his or her deductions and
purchases under the authorization he or she has on file under the Plan will continue as long as the
Plan remains in effect. An employee may increase or decrease the amount of his or her payroll
deductions as of the next Offering Commencement Date by filing a revised payroll deduction
authorization in accordance with the procedures then applicable to such actions. Except as may
otherwise be established by the Plan administrators under generally applicable rules, all revised
authorizations shall be effective only if delivered to the designated Plan administrator(s) in
accordance with the prescribed procedures not later than ten (10) business days before the next
Offering Commencement Date.
7. Maximum Amount of Payroll Deductions.
An employee may authorize payroll deductions in an amount of not less than one percent (1%) and not
more than ten percent (10%) (in whole number percentages only) of his or her eligible compensation.
Such deductions shall be determined based on the employees election in effect on the payday on
which such eligible compensation is paid. An employee may not make any additional payments into
such account. Eligible compensation means the wages as defined in Section 3401(a) of the Internal
Revenue Code, determined without regard to any rules that limit compensation included in wages
based on the nature or location or employment or services performed, including without limitation
base pay, shift premium, overtime, gain sharing (profit sharing), incentive compensation, bonuses
and commissions and all other payments made to the employee for services as an employee during the
applicable payroll period, and excluding the value of any qualified or non-qualified stock option
granted to the employee to the extent such value is includible in the taxable wages, reimbursements
or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare
benefits, but determined prior to any exclusions for any amounts deferred under Sections 125,
401(k), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b) of the Internal Revenue Code or for certain
contributions described in Section 457(h)(2) of the Internal Revenue Code that are treated as
Company contributions.
8. Unused Payroll Deductions.
Only full shares of Common Stock may be purchased. Any balance remaining in an employees account
after a purchase will be reported to the employee and will be carried forward to the next Offering
Period. However, in no event will the amount of the unused payroll deductions carried forward from
a payroll period exceed the Option Exercise Price per share for that Offering Period. If for any
Offering Period the amount of unused payroll deductions should exceed the Option Exercise Price per
share, the amount of the excess for any participant shall be refunded to such participant, without
interest.
9. Change in Payroll Deductions.
Unless otherwise permitted by the Committee prior to the commencement of an Offering Period,
payroll deductions may not be increased, decreased or suspended by a participant during an Offering
Period. However, a participant may withdraw in full from the Plan.
10. Withdrawal from the Plan.
An employee may withdraw from the Plan and withdraw all but not less than all of the payroll
deductions credited to his or her account under the Plan prior to the Offering Termination Date by
completing and filing a withdrawal notification with the designated Plan administrator(s) in
accordance with the prescribed procedures, in which event the Company will refund as soon as
administratively practicable without interest the entire balance of such employees deductions not
previously used to purchase Common Stock under the Plan. Except as may otherwise be prescribed by
the Plan administrators under generally applicable rules, all withdrawals shall be effective only
if delivered to the designated Plan administrator(s) in accordance with the prescribed procedures
not later than ten (10) business days before the Offering Termination Date.
An employee who withdraws from the Plan is like an employee who has never entered the Plan; the
employees rights under the Plan will be terminated and no further payroll deductions will be made.
To reenter, such an employee must re-enroll pursuant to the provisions of Article 6 before the next
Offering Commencement Date which cannot, however, become effective before the beginning of the next
Offering Period following his withdrawal.
11. Issuance of Stock.
As soon as administratively practicable after each Offering Period the Company shall deliver (by
electronic or other means) to the participant the Common Stock purchased under the Plan, except as
specified below. The Plan administrators may permit or require that the Common Stock shares be
deposited directly with a broker or agent designated by the Plan administrators, and the Plan
administrators may utilize electronic or automated methods of share transfer. In addition, the Plan
administrators may require that shares be retained with such broker or agent for a designated
period of time (and may restrict dispositions during that period) and/or may establish other
procedures to permit tracking of disqualifying dispositions of such shares or to restrict transfer
of such shares as required to ensure that the Companys applicable tax withholding obligations are
satisfied.
12. No Transfer or Assignment of Employees
Rights.
An employees rights under the Plan are his or hers alone and may not be transferred or assigned
to, or availed of by, any other person. Any option granted to an employee may be exercised only by
him or her, except as provided in Article 13 in the event of an employees death.
13. Termination of Employees Rights.
Except as set forth in Article 14, an employees rights under the Plan will terminate when he or
she ceases to be an employee because of retirement, resignation, lay-off, discharge, death, change
of status, failure to remain in the customary employ of the Company for twenty (20) hours or more
per week, or for any other reason. Notwithstanding anything to the contrary contained in Article
10, a withdrawal notice will be considered as having been received from the employee on the day his
or her employment ceases, and all payroll deductions not used to purchase Common Stock will be
refunded without interest.
Notwithstanding anything to the contrary contained in Article 10, if an employees payroll
deductions are interrupted by any legal process, a withdrawal notice will be considered as having
been received from him or her on the day the interruption occurs.
14. Death of an Employee.
Upon termination of the participating employees employment because of death, the person(s)
entitled to receipt of the Common Stock and/or cash as provided in this Article 14 shall have the
right to elect, by written notice given to the Plan administrators prior to the expiration of the
thirty (30) day period commencing with the date of the death of the employee, either (i) to
withdraw, without interest, all of the payroll deductions credited to the employees account under
the Plan, or (ii) to exercise the employees option for the purchase of shares of Common Stock on
the next Offering Termination Date following the date of the employees death for the purchase of
that number of full shares of Common Stock reserved for the purpose of the Plan which the
accumulated payroll deductions in the employees account at the date of the employees death will
purchase at the applicable Option Exercise Price (subject to the limitations set forth in Article
4), and any excess in such account (in lieu of fractional shares) will be paid to the employees
estate as soon as administratively practicable, without interest. In the event that no such written
notice of election shall be duly received by the Plan administrators, the payroll deductions
credited to the employees account at the date of the employees death will be paid to the
employees estate as soon as administratively practicable, without interest.
Except as provided in the preceding paragraph, in the event of the death of a participating
employee, the Company shall deliver such Common Stock and/or cash to the executor or administrator
of the estate of the employee.
15. Termination and Amendments to Plan.
The Plan may be terminated at any time by the Companys Board of Directors. It will terminate in
any case on December 31, 2012, or if sooner, when all of the shares of Common Stock reserved for
the purposes of the Plan have been purchased. In the event that the Board of Directors terminates
the Plan pursuant to this Article 15, the date of such termination shall be deemed as the Offering
Termination Date of the applicable Offering Period in which such termination date
occurs. Upon such termination or any other termination of the Plan, all payroll deductions not used
to purchase Common Stock will be refunded without interest.
The Committee or the Board of Directors may from time to time adopt amendments to the Plan provided
that, without the approval of the stockholders of the Company, no amendment may (i) except as
provided in Articles 3, 4, 24 and 25, increase the number of shares that may be issued under the
Plan; (ii) change the class of employees eligible to receive options under the Plan, if such action
would be treated as the adoption of a new plan for purposes of Section 423(b) of the Internal
Revenue Code; or (iii) cause Rule 16b-3 under the Securities Exchange Act of 1934 to become
inapplicable to the Plan.
16. Limitations of Sale of Stock Purchased
Under the Plan.
The Plan is intended to provide shares of Common Stock for investment and not for resale. The
Company does not, however, intend to restrict or influence any employee in the conduct of his or
her own affairs. An employee may, therefore, sell stock purchased under the Plan at any time the
employee chooses, subject to compliance with any applicable federal or state securities laws and
subject to any restrictions imposed under Articles 11 and 26. Each employee agrees by entering the
Plan to promptly give the Company notice of any such Common Stock disposed of within two years
after the Offering Commencement Date on which the Common Stock was purchased showing the number of
such shares disposed of. The employee assumes the risk of any market fluctuations in the price of
such Common Stock.
17. Companys Offering of Expenses Related to
Plan.
The Company will bear all costs of administering and carrying out the Plan.
18. Participating Subsidiaries.
The term participating subsidiaries shall mean any present or future subsidiary of the Company
which is designated by the Committee to participate in the Plan. The Committee shall have the power
to make such designation(s) before or after the Plan is approved by the stockholders.
19. Administration of the Plan.
The Plan may be administered by the Compensation Committee, or such other committee as may be
appointed by the Board of Directors of the Company (the Committee). No member of the Committee
shall be eligible to participate in the Plan while serving as a member of the Committee. In the
event that the Board of Directors fails to appoint or refrains from appointing a Committee, the
Board of Directors shall have all power and authority to administer the Plan (in such event the
word Committee shall refer to the Board of Directors).
The Committee shall have the authority to construe and interpret the Plan and options, and to
establish, amend and revoke rules and regulations for the administration of the Plan. The
Committee, in the exercise of this power, may correct any defect, omission or inconsistency in the
Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully
effective. The interpretation and construction by the Committee of any provisions of the Plan or of
any option granted under it shall be final. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. Without limiting the foregoing, the
Committee shall have the power, subject to, and within the limitations of, the
express provisions of the Plan: (i) to determine when and how options to purchase shares of Common
Stock shall be granted and the provisions of each Offering Period (which need not be identical);
(ii) to designate from time to time which participating subsidiaries of the Company shall be
eligible to participate in the Plan; (iii) to determine the Offering Commencement Date and Offering
Termination Date of any Offering Period; (iv) to increase or decrease the maximum number of shares
which may be purchased by an eligible employee in any Offering Period; (v) to amend the Plan as
provided in Article 15, and (vi) generally, to exercise such powers and to perform such acts as it
deems necessary or expedient to promote the best interests of the Company and the participating
subsidiaries.
The Committee may delegate to one or more individuals the day-to-day administration of the Plan.
Without limitation, subject to the terms and conditions of this Plan, the President, the Chief
Financial Officer of the Company, and any other officer of the Company or committee of officers or
employees designated by the Committee (collectively, the Plan administrators), shall each be
authorized to determine the methods through which eligible employees may elect to participate,
amend their participation, or withdraw from participation in the Plan, and establish methods of
enrollment by means of a manual or electronic form of authorization or an integrated voice response
system. The Plan administrators are further authorized to determine the matters described in
Article 11 concerning the means of issuance of Common Stock and the procedures established to
permit tracking of disqualifying dispositions of shares or to restrict transfer of such shares.
With respect to persons subject to Section 16 of the Securities and Exchange Act of 1934, as
amended, transactions under the Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under said Act. To the extent any provision of the Plan or action by the
Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by that Committee.
No member of the Board of Directors or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any option granted under it. The
Company shall indemnify each member of the Board of Directors and the Committee to the fullest
extent permitted by law with respect to any claim, loss, damage or expense (including counsel fees)
arising in connection with their responsibilities under this Plan.
As soon as administratively practicable after the end of each Offering Period, the Plan
administrators shall prepare and distribute or make otherwise readily available by electronic means
or otherwise to each participating employee in the Plan information concerning the amount of the
participating employees accumulated payroll deductions as of the Offering Termination Date, the
Option Exercise Price for such Offering Period, the number of shares of Common Stock purchased by
the participating employee with the participating employees accumulated payroll deductions, and
the amount of any unused payroll deductions either to be carried forward to the next Offering
Period, or returned to the participating employee without interest.
20. Optionees Not Stockholders.
Neither the granting of an option to an employee nor the deductions from his or her pay shall
constitute such employee a stockholder of the Company with respect to the shares covered by such
option until such shares have been purchased by and issued to him.
21. Application of Funds.
The proceeds received by the Company from the sale of Common Stock pursuant to options granted
under the Plan may be used for any corporate purposes, and the Company shall not be obligated to
segregate participating employees payroll deductions.
22. Governmental Regulation.
The Companys obligation to sell and deliver shares of the Companys Common Stock under this Plan
is subject to the approval of any governmental authority required in connection with the
authorization, issuance or sale of such stock.
In this regard, the Board of Directors may, in its discretion, require as a condition to the
exercise of any option that a Registration Statement under the Securities Act of 1933, as amended,
with respect to the shares of Common Stock reserved for issuance upon exercise of the option shall
be effective.
23. Transferability.
Neither payroll deductions credited to an employees account nor any rights with regard to the
exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged, or
otherwise disposed of in any way by the employee. Any such attempted assignment, transfer, pledge,
or other disposition shall be without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Article 10.
24. Effect of Changes of Common Stock.
If the Company should subdivide or reclassify the Common Stock which has been or may be optioned
under the Plan, or should declare thereon any dividend payable in shares of such Common Stock, or
should take any other action of a similar nature affecting such Common Stock, then the number and
class of shares of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.
25. Merger or Consolidation.
If the Company should at any time merge into or consolidate with another corporation, the Board of
Directors may, at its election, either (i) terminate the Plan and refund without interest the
entire balance of each participating employees payroll deductions, or (ii) entitle each
participating employee to receive on the Offering Termination Date upon the exercise of such option
for each share of Common Stock as to which such option shall be exercised the securities or
property to which a holder of one share of the Common Stock was entitled upon and at the time of
such merger or consolidation, and the Board of Directors shall take such steps in connection with
such merger or consolidation as the Board of Directors shall deem necessary to assure that the
provisions of this Article 25 shall thereafter be applicable, as nearly as reasonably possible. A
sale of all or substantially all of the assets of the Company shall be deemed a merger or
consolidation for the foregoing purposes.
26. Withholding of Additional Tax.
By electing to participate in the Plan, each participant acknowledges that the Company and its
participating subsidiaries are required to withhold taxes with respect to the amounts deducted from
the participants compensation and accumulated for the benefit of the participant under the Plan,
and each participant agrees that the Company and its participating subsidiaries may deduct
additional amounts from the participants compensation, when amounts are added to the participants
account, used to purchase Common Stock or refunded, in order to satisfy such withholding
obligations. Each participant further acknowledges that when Common Stock is purchased under the
Plan the Company and its participating subsidiaries may be required to withhold taxes with respect
to all or a portion of the difference between the fair market value of the Common Stock purchased
and its purchase price, and each participant agrees that such taxes may be withheld from
compensation otherwise payable to such participant. It is intended that tax withholding will be
accomplished in such a manner that the full amount of payroll deductions elected by the participant
under Article 7 will be used to purchase Common Stock. However, if amounts sufficient to satisfy
applicable tax withholding obligations have not been withheld from compensation otherwise payable
to any participant then, notwithstanding any other provision of the Plan, the Company may withhold
such taxes from the participants accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior to the exercise date,
an amount sufficient to satisfy such withholding obligations. Each participant further acknowledges
that the Company and its participating subsidiaries may be required to withhold taxes in connection
with the disposition of stock acquired under the Plan and agrees that the Company or any
participating subsidiary may take whatever action it considers appropriate to satisfy such
withholding requirements, including deducting from compensation otherwise payable to such
participant an amount sufficient to satisfy such withholding requirements or conditioning any
disposition of Common Stock by the participant upon the payment to the Company or such subsidiary
of an amount sufficient to satisfy such withholding requirements.
27. Approval of Stockholders.
This Plan was first adopted by the Board of Directors on September 25, 2002 and amended on January
14, 2003, and approved, as amended, by the stockholders of the Company on March 10, 2003. The Plan
was subsequently amended and approved by the stockholders on March 30, 2006 and March 27, 2008.
exv31w1
EXHIBIT 31.1
CERTIFICATION OF THE CEO PURSUANT TO SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RULES
13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David J. Aldrich, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; |
|
|
2. |
|
Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statement made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report; |
|
|
4. |
|
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
|
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared; |
|
|
b) |
|
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and, |
|
|
d) |
|
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrants internal control over
financial reporting. |
|
5. |
|
The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
|
|
b) |
|
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: May 7, 2008
/s/ David J. Aldrich
David J. Aldrich
Chief Executive Officer
President
exv31w2
EXHIBIT 31.2
CERTIFICATION OF THE CFO PURSUANT TO SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RULES
13a-14(a) AND 15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Donald W. Palette, certify that:
|
1. |
|
I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; |
|
|
2. |
|
Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statement made, in light of the
circumstances under which such statements were made, not misleading with respect to the
period covered by this report; |
|
|
3. |
|
Based on my knowledge, the financial statements, and other financial information included
in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the periods presented in this
report and |
|
|
4. |
|
The registrants other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
|
designed such disclosure controls and procedures, or caused such disclosure controls
and procedures to be designed under our supervision, to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is
being prepared; |
|
|
b) |
|
designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
evaluated the effectiveness of the registrants disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such
evaluation; and, |
|
|
d) |
|
disclosed in this report any change in the registrants internal control over
financial reporting that occurred during the registrants most recent fiscal quarter (the
registrants fourth quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrants internal control over
financial reporting. |
|
5. |
|
The registrants other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the registrants
auditors and the audit committee of the registrants board of directors (or persons
performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect
the registrants ability to record, process, summarize and report financial information;
and |
|
|
b) |
|
any fraud, whether or not material, that involves management or other employees who
have a significant role in the registrants internal control over financial reporting. |
Date: May 7, 2008
/s/ Donald W. Palette
Donald W. Palette
Chief Financial Officer
Vice President
exv32w1
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Skyworks Solutions, Inc. (the Company) on Form 10-Q
for the period ending March 28, 2008 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, David J. Aldrich, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
/s/ David J. Aldrich
David J. Aldrich
Chief Executive Officer
President
Date: May 7, 2008
exv32w2
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of Skyworks Solutions, Inc. (the Company) on Form 10-Q
for the period ending March 28, 2008 as filed with the Securities and Exchange Commission on the
date hereof (the Report), I, Donald W. Palette, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
|
(1) |
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and |
|
|
(2) |
|
The information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
A signed original of this written statement required by Section 906 has been provided to the
Company and will be retained by the Company and furnished to the Securities and Exchange Commission
or its staff upon request.
/s/ Donald W. Palette
Donald W. Palette
Chief Financial Officer
Vice President
Date: May 7, 2008