|
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Massachusetts
|
|
04-2348234
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
One Technology Way, Norwood, MA
|
|
02062-9106
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock $0.16 2/3 par value per share
|
ADI
|
Nasdaq Global Select Market
|
Large accelerated filer
|
|
þ
|
|
Accelerated filer
|
|
¨
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
o
|
|
Smaller reporting company
|
|
¨
|
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company
|
|
¨
|
|
ITEM 1.
|
Financial Statements
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
|
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (2)
|
|
May 4, 2019
|
|
May 5, 2018 (2)
|
||||||||
Revenue
|
$
|
1,526,602
|
|
|
$
|
1,563,502
|
|
|
$
|
3,067,703
|
|
|
$
|
3,130,372
|
|
Cost of sales (1)
|
492,510
|
|
|
491,112
|
|
|
993,955
|
|
|
986,299
|
|
||||
Gross margin
|
1,034,092
|
|
|
1,072,390
|
|
|
2,073,748
|
|
|
2,144,073
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development (1)
|
285,846
|
|
|
289,472
|
|
|
573,228
|
|
|
578,069
|
|
||||
Selling, marketing, general and administrative (1)
|
163,128
|
|
|
172,146
|
|
|
330,470
|
|
|
349,054
|
|
||||
Amortization of intangibles
|
107,261
|
|
|
107,129
|
|
|
214,585
|
|
|
214,148
|
|
||||
Special charges
|
8,162
|
|
|
1,089
|
|
|
29,944
|
|
|
58,407
|
|
||||
|
564,397
|
|
|
569,836
|
|
|
1,148,227
|
|
|
1,199,678
|
|
||||
Operating income
|
469,695
|
|
|
502,554
|
|
|
925,521
|
|
|
944,395
|
|
||||
Nonoperating expense (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
59,701
|
|
|
64,792
|
|
|
118,429
|
|
|
132,822
|
|
||||
Interest income
|
(2,928
|
)
|
|
(1,912
|
)
|
|
(5,616
|
)
|
|
(4,004
|
)
|
||||
Other, net
|
4,525
|
|
|
(451
|
)
|
|
4,365
|
|
|
105
|
|
||||
|
61,298
|
|
|
62,429
|
|
|
117,178
|
|
|
128,923
|
|
||||
Income before income taxes
|
408,397
|
|
|
440,125
|
|
|
808,343
|
|
|
815,472
|
|
||||
Provision for income taxes
|
40,460
|
|
|
39,797
|
|
|
85,400
|
|
|
121,904
|
|
||||
Net income
|
$
|
367,937
|
|
|
$
|
400,328
|
|
|
$
|
722,943
|
|
|
$
|
693,568
|
|
Shares used to compute earnings per common share – basic
|
369,246
|
|
|
370,384
|
|
|
368,974
|
|
|
369,685
|
|
||||
Shares used to compute earnings per common share – diluted
|
373,342
|
|
|
374,778
|
|
|
372,912
|
|
|
374,430
|
|
||||
Basic earnings per common share
|
$
|
0.99
|
|
|
$
|
1.08
|
|
|
$
|
1.95
|
|
|
$
|
1.87
|
|
Diluted earnings per common share
|
$
|
0.98
|
|
|
$
|
1.06
|
|
|
$
|
1.93
|
|
|
$
|
1.84
|
|
(1) Includes stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
$
|
5,389
|
|
|
$
|
3,820
|
|
|
$
|
10,473
|
|
|
$
|
8,041
|
|
Research and development
|
$
|
19,567
|
|
|
$
|
22,018
|
|
|
$
|
38,492
|
|
|
$
|
41,746
|
|
Selling, marketing, general and administrative
|
$
|
15,273
|
|
|
$
|
13,076
|
|
|
$
|
27,657
|
|
|
$
|
27,029
|
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(in thousands)
|
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
May 4, 2019
|
|
May 5, 2018 (1)
|
||||||||
Net income
|
$
|
367,937
|
|
|
$
|
400,328
|
|
|
$
|
722,943
|
|
|
$
|
693,568
|
|
Foreign currency translation adjustments
|
(3,428
|
)
|
|
(3,419
|
)
|
|
(112
|
)
|
|
6,752
|
|
||||
Change in fair value of available-for-sale securities
|
5
|
|
|
5
|
|
|
15
|
|
|
3
|
|
||||
Change in fair value of derivative instruments designated as cash flow hedges (net of taxes of $3,802, $771, $10,183 and $1,323, respectively)
|
(14,912
|
)
|
|
(6,613
|
)
|
|
(37,850
|
)
|
|
1,737
|
|
||||
Changes in pension plans including transition obligation, net actuarial loss and foreign currency translation adjustments (net of taxes of $63, $99, $126 and $202, respectively)
|
335
|
|
|
1,373
|
|
|
366
|
|
|
(144
|
)
|
||||
Other comprehensive (loss) income
|
(18,000
|
)
|
|
(8,654
|
)
|
|
(37,581
|
)
|
|
8,348
|
|
||||
Comprehensive income
|
$
|
349,937
|
|
|
$
|
391,674
|
|
|
$
|
685,362
|
|
|
$
|
701,916
|
|
ANALOG DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
|
|||||||
|
May 4, 2019
|
|
November 3, 2018 (1)
|
||||
ASSETS
|
|
|
|
|
|
||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
713,601
|
|
|
$
|
816,591
|
|
Accounts receivable
|
685,978
|
|
|
639,717
|
|
||
Inventories (2)
|
608,085
|
|
|
586,760
|
|
||
Prepaid income tax
|
2,935
|
|
|
3,196
|
|
||
Prepaid expenses and other current assets
|
69,890
|
|
|
65,862
|
|
||
Total current assets
|
2,080,489
|
|
|
2,112,126
|
|
||
Property, Plant and Equipment, at Cost
|
|
|
|
||||
Land and buildings
|
903,378
|
|
|
873,186
|
|
||
Machinery and equipment
|
2,560,573
|
|
|
2,478,032
|
|
||
Office equipment
|
82,706
|
|
|
76,233
|
|
||
Leasehold improvements
|
147,253
|
|
|
100,374
|
|
||
|
3,693,910
|
|
|
3,527,825
|
|
||
Less accumulated depreciation and amortization
|
2,482,443
|
|
|
2,373,497
|
|
||
Net property, plant and equipment
|
1,211,467
|
|
|
1,154,328
|
|
||
Other Assets
|
|
|
|
||||
Deferred compensation plan investments
|
42,661
|
|
|
39,853
|
|
||
Other investments
|
31,616
|
|
|
28,730
|
|
||
Goodwill
|
12,250,370
|
|
|
12,252,604
|
|
||
Intangible assets, net
|
4,489,182
|
|
|
4,778,192
|
|
||
Deferred tax assets
|
1,610,109
|
|
|
9,665
|
|
||
Other assets
|
60,431
|
|
|
62,868
|
|
||
Total other assets
|
18,484,369
|
|
|
17,171,912
|
|
||
|
$
|
21,776,325
|
|
|
$
|
20,438,366
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
208,243
|
|
|
$
|
260,919
|
|
Income taxes payable
|
124,356
|
|
|
93,722
|
|
||
Debt, current
|
374,165
|
|
|
67,000
|
|
||
Accrued liabilities
|
658,271
|
|
|
630,107
|
|
||
Total current liabilities
|
1,365,035
|
|
|
1,051,748
|
|
||
Non-current liabilities
|
|
|
|
||||
Long-term debt
|
5,612,365
|
|
|
6,265,674
|
|
||
Deferred income taxes
|
2,228,822
|
|
|
990,409
|
|
||
Deferred compensation plan liability
|
42,661
|
|
|
39,846
|
|
||
Income taxes payable
|
647,714
|
|
|
710,179
|
|
||
Other non-current liabilities
|
137,470
|
|
|
112,337
|
|
||
Total non-current liabilities
|
8,669,032
|
|
|
8,118,445
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Preferred stock, $1.00 par value, 471,934 shares authorized, none outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.16 2/3 par value, 1,200,000,000 shares authorized, 369,761,227 shares outstanding (370,159,553 on November 3, 2018)
|
61,628
|
|
|
61,694
|
|
||
Capital in excess of par value
|
5,117,202
|
|
|
5,282,222
|
|
||
Retained earnings
|
6,659,449
|
|
|
5,982,697
|
|
||
Accumulated other comprehensive loss
|
(96,021
|
)
|
|
(58,440
|
)
|
||
Total shareholders’ equity
|
11,742,258
|
|
|
11,268,173
|
|
||
|
$
|
21,776,325
|
|
|
$
|
20,438,366
|
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements.
|
(2)
|
Includes $6,982 and $7,128 related to stock-based compensation at May 4, 2019 and November 3, 2018, respectively.
|
|
Three Months Ended May 4, 2019
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, FEBRUARY 2, 2019
|
368,314
|
|
|
$
|
61,387
|
|
|
$
|
5,111,058
|
|
|
$
|
6,491,013
|
|
|
$
|
(78,021
|
)
|
Net income
|
|
|
|
|
|
|
367,937
|
|
|
|
||||||||
Dividends declared and paid - $0.54 per share
|
|
|
|
|
|
|
(199,501
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
2,369
|
|
|
395
|
|
|
67,283
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
40,229
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(18,000
|
)
|
||||||||
Common stock repurchased
|
(922
|
)
|
|
(154
|
)
|
|
(101,368
|
)
|
|
|
|
|
||||||
BALANCE, MAY 4, 2019
|
369,761
|
|
|
$
|
61,628
|
|
|
$
|
5,117,202
|
|
|
$
|
6,659,449
|
|
|
$
|
(96,021
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six Months Ended May 4, 2019
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, NOVEMBER 3, 2018 (1)
|
370,160
|
|
|
$
|
61,694
|
|
|
$
|
5,282,222
|
|
|
$
|
5,982,697
|
|
|
$
|
(58,440
|
)
|
Effect of Accounting Standards Update 2016-16 (see Note 1)
|
|
|
|
|
|
|
331,026
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
|
722,943
|
|
|
|
||||||||
Dividends declared and paid - $1.02 per share
|
|
|
|
|
|
|
(377,217
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
3,140
|
|
|
524
|
|
|
86,383
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
76,622
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(37,581
|
)
|
||||||||
Common stock repurchased
|
(3,539
|
)
|
|
(590
|
)
|
|
(328,025
|
)
|
|
|
|
|
||||||
BALANCE, MAY 4, 2019
|
369,761
|
|
|
$
|
61,628
|
|
|
$
|
5,117,202
|
|
|
$
|
6,659,449
|
|
|
$
|
(96,021
|
)
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements.
|
|
Three Months Ended May 5, 2018
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, FEBRUARY 3, 2018 (1)
|
369,804
|
|
|
$
|
61,635
|
|
|
$
|
5,318,109
|
|
|
$
|
5,305,545
|
|
|
$
|
(44,357
|
)
|
Net income
|
|
|
|
|
|
|
400,328
|
|
|
|
||||||||
Dividends declared and paid - $0.48 per share
|
|
|
|
|
|
|
(178,282
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
1,324
|
|
|
221
|
|
|
27,524
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
38,914
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
(8,654
|
)
|
||||||||
Common stock repurchased
|
(231
|
)
|
|
(39
|
)
|
|
(21,939
|
)
|
|
|
|
|
||||||
BALANCE, MAY 5, 2018
|
370,897
|
|
|
$
|
61,817
|
|
|
$
|
5,362,608
|
|
|
$
|
5,527,591
|
|
|
$
|
(53,011
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Six Months Ended May 5, 2018
|
|||||||||||||||||
|
|
|
|
|
Capital in
|
|
|
|
Accumulated
Other
|
|||||||||
|
Common Stock
|
|
Excess of
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Shares
|
|
Amount
|
|
Par Value
|
|
Earnings
|
|
(Loss) Income
|
|||||||||
BALANCE, OCTOBER 28, 2017 (1)
|
368,636
|
|
|
$
|
61,441
|
|
|
$
|
5,250,519
|
|
|
$
|
5,179,024
|
|
|
$
|
(61,359
|
)
|
Net income
|
|
|
|
|
|
|
693,568
|
|
|
|
||||||||
Dividends declared and paid - $0.93 per share
|
|
|
|
|
|
|
(345,001
|
)
|
|
|
||||||||
Issuance of stock under stock plans and other
|
2,575
|
|
|
429
|
|
|
65,128
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
|
|
|
|
76,816
|
|
|
|
|
|
||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
8,348
|
|
||||||||
Common stock repurchased
|
(314
|
)
|
|
(53
|
)
|
|
(29,855
|
)
|
|
|
|
|
||||||
BALANCE, MAY 5, 2018
|
370,897
|
|
|
$
|
61,817
|
|
|
$
|
5,362,608
|
|
|
$
|
5,527,591
|
|
|
$
|
(53,011
|
)
|
(1)
|
Balances have been restated to reflect the full retrospective adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (ASU 2014-09). See Note 1, Basis of Presentation, in the Notes to Condensed Consolidated Financial Statements.
|
|
Six Months Ended
|
||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
722,943
|
|
|
$
|
693,568
|
|
Adjustments to reconcile net income to net cash provided by operations:
|
|
|
|
||||
Depreciation
|
117,435
|
|
|
113,004
|
|
||
Amortization of intangibles
|
284,525
|
|
|
285,004
|
|
||
Stock-based compensation expense
|
76,622
|
|
|
76,816
|
|
||
Non-cash portion of special charge
|
4,367
|
|
|
—
|
|
||
Deferred income taxes
|
(21,843
|
)
|
|
(705,640
|
)
|
||
Other non-cash activity
|
18,429
|
|
|
10,104
|
|
||
Changes in operating assets and liabilities
|
(159,829
|
)
|
|
634,326
|
|
||
Total adjustments
|
319,706
|
|
|
413,614
|
|
||
Net cash provided by operating activities
|
1,042,649
|
|
|
1,107,182
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(166,202
|
)
|
|
(117,122
|
)
|
||
Payments for acquisitions, net of cash acquired
|
—
|
|
|
(52,339
|
)
|
||
Changes in other assets
|
(4,585
|
)
|
|
(1,029
|
)
|
||
Net cash used for investing activities
|
(170,787
|
)
|
|
(170,490
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from debt
|
—
|
|
|
743,778
|
|
||
Proceeds from revolver
|
75,000
|
|
|
—
|
|
||
Payments on revolver
|
(75,000
|
)
|
|
—
|
|
||
Debt repayments
|
(350,000
|
)
|
|
(1,620,000
|
)
|
||
Dividend payments to shareholders
|
(377,217
|
)
|
|
(345,001
|
)
|
||
Repurchase of common stock
|
(328,615
|
)
|
|
(29,908
|
)
|
||
Proceeds from employee stock plans
|
86,907
|
|
|
65,557
|
|
||
Contingent consideration payment
|
(4,000
|
)
|
|
(542
|
)
|
||
Changes in other financing activities
|
(2,144
|
)
|
|
7,945
|
|
||
Net cash used for financing activities
|
(975,069
|
)
|
|
(1,178,171
|
)
|
||
Effect of exchange rate changes on cash
|
217
|
|
|
158
|
|
||
Net decrease in cash and cash equivalents
|
(102,990
|
)
|
|
(241,321
|
)
|
||
Cash and cash equivalents at beginning of period
|
816,591
|
|
|
1,047,838
|
|
||
Cash and cash equivalents at end of period
|
$
|
713,601
|
|
|
$
|
806,517
|
|
Condensed Consolidated Statement of Income
|
Three Months Ended May 5, 2018
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Revenue
|
$
|
1,513,053
|
|
|
$
|
50,449
|
|
|
$
|
1,563,502
|
|
Cost of sales
|
479,241
|
|
|
11,871
|
|
|
491,112
|
|
|||
Gross margin
|
1,033,812
|
|
|
38,578
|
|
|
1,072,390
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
289,472
|
|
|
—
|
|
|
289,472
|
|
|||
Selling, marketing, general and administrative
|
172,146
|
|
|
—
|
|
|
172,146
|
|
|||
Amortization of intangibles
|
107,129
|
|
|
—
|
|
|
107,129
|
|
|||
Special charges
|
1,089
|
|
|
—
|
|
|
1,089
|
|
|||
|
569,836
|
|
|
—
|
|
|
569,836
|
|
|||
Operating income
|
463,976
|
|
|
38,578
|
|
|
502,554
|
|
|||
Nonoperating expense (income):
|
|
|
|
|
|
||||||
Interest expense
|
64,792
|
|
|
—
|
|
|
64,792
|
|
|||
Interest income
|
(1,912
|
)
|
|
—
|
|
|
(1,912
|
)
|
|||
Other, net
|
(451
|
)
|
|
—
|
|
|
(451
|
)
|
|||
|
62,429
|
|
|
—
|
|
|
62,429
|
|
|||
Income before income taxes
|
401,547
|
|
|
38,578
|
|
|
440,125
|
|
|||
Provision for income taxes
|
21,716
|
|
|
18,081
|
|
|
39,797
|
|
|||
Net income
|
$
|
379,831
|
|
|
$
|
20,497
|
|
|
$
|
400,328
|
|
Shares used to compute earnings per common share – basic
|
370,384
|
|
|
—
|
|
|
370,384
|
|
|||
Shares used to compute earnings per common share – diluted
|
374,778
|
|
|
—
|
|
|
374,778
|
|
|||
Basic earnings per common share
|
$
|
1.02
|
|
|
$
|
0.06
|
|
|
$
|
1.08
|
|
Diluted earnings per common share
|
$
|
1.01
|
|
|
$
|
0.05
|
|
|
$
|
1.06
|
|
Condensed Consolidated Statement of Income
|
Six Months Ended May 5, 2018
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Revenue
|
$
|
3,031,677
|
|
|
$
|
98,695
|
|
|
$
|
3,130,372
|
|
Cost of sales
|
962,675
|
|
|
23,624
|
|
|
986,299
|
|
|||
Gross margin
|
2,069,002
|
|
|
75,071
|
|
|
2,144,073
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
578,069
|
|
|
—
|
|
|
578,069
|
|
|||
Selling, marketing, general and administrative
|
349,054
|
|
|
—
|
|
|
349,054
|
|
|||
Amortization of intangibles
|
214,148
|
|
|
—
|
|
|
214,148
|
|
|||
Special charges
|
58,407
|
|
|
—
|
|
|
58,407
|
|
|||
|
1,199,678
|
|
|
—
|
|
|
1,199,678
|
|
|||
Operating income
|
869,324
|
|
|
75,071
|
|
|
944,395
|
|
|||
Nonoperating expense (income):
|
|
|
|
|
|
||||||
Interest expense
|
132,822
|
|
|
—
|
|
|
132,822
|
|
|||
Interest income
|
(4,004
|
)
|
|
—
|
|
|
(4,004
|
)
|
|||
Other, net
|
105
|
|
|
—
|
|
|
105
|
|
|||
|
128,923
|
|
|
—
|
|
|
128,923
|
|
|||
Income before income taxes
|
740,401
|
|
|
75,071
|
|
|
815,472
|
|
|||
Provision for income taxes
|
92,398
|
|
|
29,506
|
|
|
121,904
|
|
|||
Net income
|
$
|
648,003
|
|
|
$
|
45,565
|
|
|
$
|
693,568
|
|
Shares used to compute earnings per common share – basic
|
369,685
|
|
|
—
|
|
|
369,685
|
|
|||
Shares used to compute earnings per common share – diluted
|
374,430
|
|
|
—
|
|
|
374,430
|
|
|||
Basic earnings per common share
|
$
|
1.75
|
|
|
$
|
0.12
|
|
|
$
|
1.87
|
|
Diluted earnings per common share
|
$
|
1.72
|
|
|
$
|
0.12
|
|
|
$
|
1.84
|
|
|
November 3, 2018
|
||||||||||
|
As Reported
|
|
Impact of Adoption
|
|
As Adjusted
|
||||||
Deferred tax assets
|
$
|
21,078
|
|
|
$
|
(11,413
|
)
|
|
$
|
9,665
|
|
Deferred income on shipments to distributors, net
|
$
|
487,417
|
|
|
$
|
(487,417
|
)
|
|
$
|
—
|
|
Accrued liabilities
|
$
|
497,080
|
|
|
$
|
133,027
|
|
|
$
|
630,107
|
|
Deferred income taxes
|
$
|
927,065
|
|
|
$
|
63,344
|
|
|
$
|
990,409
|
|
Retained earnings
|
$
|
5,703,064
|
|
|
$
|
279,633
|
|
|
$
|
5,982,697
|
|
|
November 4, 2018
|
||||||||||
|
Beginning Balance November 3, 2018 as Adjusted
|
|
Impact of Adoption of ASU 2016-16
|
|
Balance November 4, 2018
|
||||||
Deferred tax assets
|
$
|
9,665
|
|
|
$
|
1,655,129
|
|
|
$
|
1,664,794
|
|
Deferred income taxes
|
$
|
990,409
|
|
|
$
|
1,324,103
|
|
|
$
|
2,314,512
|
|
Retained earnings
|
$
|
5,982,697
|
|
|
$
|
331,026
|
|
|
$
|
6,313,723
|
|
Activity during the Three Months Ended May 4, 2019
|
Options
Outstanding
(in thousands)
|
|
Weighted-
Average Exercise
Price Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term in Years
|
|
Aggregate
Intrinsic Value |
|||||
Options outstanding at February 2, 2019
|
6,741
|
|
|
|
$60.03
|
|
|
|
|
|
||
Options granted
|
413
|
|
|
|
$108.08
|
|
|
|
|
|
||
Options exercised
|
(1,294
|
)
|
|
|
$52.60
|
|
|
|
|
|
||
Options forfeited
|
(38
|
)
|
|
|
$75.43
|
|
|
|
|
|
||
Options outstanding at May 4, 2019
|
5,822
|
|
|
|
$64.99
|
|
|
6.3
|
|
|
$302,503
|
|
Options exercisable at May 4, 2019
|
3,443
|
|
|
|
$54.70
|
|
|
5.2
|
|
|
$214,319
|
|
Options vested or expected to vest at May 4, 2019 (1)
|
5,626
|
|
|
|
$64.30
|
|
|
6.2
|
|
|
$296,225
|
|
(1)
|
In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. The number of options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options.
|
Activity during the Six Months Ended May 4, 2019
|
Options
Outstanding
(in thousands)
|
|
Weighted-
Average Exercise
Price Per Share
|
|||
Options outstanding at November 3, 2018
|
7,297
|
|
|
|
$58.42
|
|
Options granted
|
439
|
|
|
|
$107.08
|
|
Options exercised
|
(1,806
|
)
|
|
|
$48.44
|
|
Options forfeited
|
(103
|
)
|
|
|
$72.06
|
|
Options expired
|
(5
|
)
|
|
|
$21.97
|
|
Options outstanding at May 4, 2019
|
5,822
|
|
|
|
$64.99
|
|
Activity during the Three Months Ended May 4, 2019
|
Restricted
Stock Units/Awards
Outstanding
(in thousands)
|
|
Weighted-
Average Grant-
Date Fair Value
Per Share
|
|||
Restricted stock units/awards outstanding at February 2, 2019
|
4,985
|
|
|
|
$77.76
|
|
Units/Awards granted
|
1,144
|
|
|
|
$98.90
|
|
Restrictions lapsed
|
(1,074
|
)
|
|
|
$64.18
|
|
Forfeited
|
(77
|
)
|
|
|
$78.81
|
|
Restricted stock units/awards outstanding at May 4, 2019
|
4,978
|
|
|
|
$85.49
|
|
|
|
|
|
|||
Activity during the Six Months Ended May 4, 2019
|
Restricted
Stock Units/Awards
Outstanding
(in thousands)
|
|
Weighted-
Average Grant-
Date Fair Value
Per Share
|
|||
Restricted stock units/awards outstanding at November 3, 2018
|
5,289
|
|
|
|
$77.54
|
|
Units/Awards granted
|
1,200
|
|
|
|
$98.06
|
|
Restrictions lapsed
|
(1,331
|
)
|
|
|
$66.00
|
|
Forfeited
|
(180
|
)
|
|
|
$78.58
|
|
Restricted stock units/awards outstanding at May 4, 2019
|
4,978
|
|
|
|
$85.49
|
|
|
Foreign currency translation adjustment
|
|
Unrealized holding gains (losses) on available for sale securities
|
|
Unrealized holding gains (losses) on derivatives
|
|
Pension plans
|
|
Total
|
||||||||||
November 3, 2018
|
$
|
(28,711
|
)
|
|
$
|
(10
|
)
|
|
$
|
(14,355
|
)
|
|
$
|
(15,364
|
)
|
|
$
|
(58,440
|
)
|
Other comprehensive income (loss) before reclassifications
|
(112
|
)
|
|
15
|
|
|
(53,229
|
)
|
|
(19
|
)
|
|
(53,345
|
)
|
|||||
Amounts reclassified out of other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
5,196
|
|
|
511
|
|
|
5,707
|
|
|||||
Tax effects
|
—
|
|
|
—
|
|
|
10,183
|
|
|
(126
|
)
|
|
10,057
|
|
|||||
Other comprehensive income (loss)
|
(112
|
)
|
|
15
|
|
|
(37,850
|
)
|
|
366
|
|
|
(37,581
|
)
|
|||||
May 4, 2019
|
$
|
(28,823
|
)
|
|
$
|
5
|
|
|
$
|
(52,205
|
)
|
|
$
|
(14,998
|
)
|
|
$
|
(96,021
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
May 4, 2019
|
|
May 5, 2018 (1)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net Income
|
$
|
367,937
|
|
|
$
|
400,328
|
|
|
$
|
722,943
|
|
|
$
|
693,568
|
|
Less: income allocated to participating securities
|
908
|
|
|
1,532
|
|
|
1,932
|
|
|
2,827
|
|
||||
Net income allocated to common stockholders
|
$
|
367,029
|
|
|
$
|
398,796
|
|
|
$
|
721,011
|
|
|
$
|
690,741
|
|
|
|
|
|
|
|
|
|
||||||||
Basic shares:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
369,246
|
|
|
370,384
|
|
|
368,974
|
|
|
369,685
|
|
||||
Earnings per common share basic:
|
$
|
0.99
|
|
|
$
|
1.08
|
|
|
$
|
1.95
|
|
|
$
|
1.87
|
|
Diluted shares:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding
|
369,246
|
|
|
370,384
|
|
|
368,974
|
|
|
369,685
|
|
||||
Assumed exercise of common stock equivalents
|
4,096
|
|
|
4,394
|
|
|
3,938
|
|
|
4,745
|
|
||||
Weighted-average common and common equivalent shares
|
373,342
|
|
|
374,778
|
|
|
372,912
|
|
|
374,430
|
|
||||
Earnings per common share diluted:
|
$
|
0.98
|
|
|
$
|
1.06
|
|
|
$
|
1.93
|
|
|
$
|
1.84
|
|
Anti-dilutive shares related to:
|
|
|
|
|
|
|
|
||||||||
Outstanding share-based awards
|
432
|
|
|
1,990
|
|
|
1,222
|
|
|
1,731
|
|
Accrued Restructuring
|
Closure of Manufacturing Facilities
|
|
Reduction of Operating Costs Action
|
|
Early Retirement Action
|
|
Repositioning Action
|
||||||||
Balance at November 3, 2018
|
$
|
42,974
|
|
|
$
|
5,255
|
|
|
$
|
9,897
|
|
|
$
|
—
|
|
First quarter fiscal 2019 special charges
|
1,127
|
|
|
—
|
|
|
—
|
|
|
20,655
|
|
||||
Severance and other payments
|
—
|
|
|
(2,489
|
)
|
|
(2,766
|
)
|
|
(1,051
|
)
|
||||
Non-cash impairment charge
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,367
|
)
|
||||
Effect of foreign currency on accrual
|
(14
|
)
|
|
4
|
|
|
—
|
|
|
(2
|
)
|
||||
Balance at February 2, 2019
|
$
|
44,087
|
|
|
$
|
2,770
|
|
|
$
|
7,131
|
|
|
$
|
15,235
|
|
Second quarter fiscal 2019 special charges
|
4,593
|
|
|
—
|
|
|
—
|
|
|
3,569
|
|
||||
Severance and other payments
|
—
|
|
|
(909
|
)
|
|
(1,641
|
)
|
|
(3,782
|
)
|
||||
Effect of foreign currency on accrual
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||
Balance at May 4, 2019
|
$
|
48,662
|
|
|
$
|
1,861
|
|
|
$
|
5,490
|
|
|
$
|
15,013
|
|
Current - accrued liabilities
|
$
|
—
|
|
|
$
|
1,861
|
|
|
$
|
5,490
|
|
|
$
|
15,013
|
|
Other non-current liabilities
|
$
|
48,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
||||||||||
Channel
|
Revenue
|
|
% of Revenue*
|
|
Revenue (1)
|
|
% of Revenue*
|
||||||
Distributors
|
$
|
871,510
|
|
|
57
|
%
|
|
$
|
869,277
|
|
|
56
|
%
|
Direct customers
|
638,277
|
|
|
42
|
%
|
|
675,188
|
|
|
43
|
%
|
||
Other
|
16,815
|
|
|
1
|
%
|
|
19,037
|
|
|
1
|
%
|
||
Total revenue
|
$
|
1,526,602
|
|
|
100
|
%
|
|
$
|
1,563,502
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||||
|
Six Months Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
||||||||||
Channel
|
Revenue
|
|
% of Revenue*
|
|
Revenue (1)
|
|
% of Revenue*
|
||||||
Distributors
|
$
|
1,700,753
|
|
|
55
|
%
|
|
$
|
1,734,289
|
|
|
55
|
%
|
Direct customers
|
1,333,766
|
|
|
43
|
%
|
|
1,348,591
|
|
|
43
|
%
|
||
Other
|
33,184
|
|
|
1
|
%
|
|
47,492
|
|
|
2
|
%
|
||
Total revenue
|
$
|
3,067,703
|
|
|
100
|
%
|
|
$
|
3,130,372
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
||||||
* The sum of the individual percentages may not equal the total due to rounding.
|
|||||||||||||
(1) Balances have been restated to reflect the full retrospective adoption of ASU 2014-09. See Note 1, Basis of Presentation, in these Notes to Condensed Consolidated Financial Statements.
|
|
May 4, 2019
|
||||||||||
|
Fair Value measurement at
Reporting Date using:
|
|
|
||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and institutional money market funds
|
$
|
370,220
|
|
|
$
|
—
|
|
|
$
|
370,220
|
|
Corporate obligations (1)
|
—
|
|
|
109,819
|
|
|
109,819
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Deferred compensation investments
|
43,720
|
|
|
—
|
|
|
43,720
|
|
|||
Total assets measured at fair value
|
$
|
413,940
|
|
|
$
|
109,819
|
|
|
$
|
523,759
|
|
Liabilities
|
|
|
|
|
|
||||||
Forward foreign currency exchange contracts (2)
|
—
|
|
|
3,542
|
|
|
3,542
|
|
|||
Interest rate derivatives
|
—
|
|
|
51,644
|
|
|
51,644
|
|
|||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
55,186
|
|
|
$
|
55,186
|
|
(1)
|
The amortized cost of the Company’s investments classified as available-for-sale as of May 4, 2019 was $109.8 million.
|
(2)
|
The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.
|
|
November 3, 2018
|
||||||||||
|
Fair Value measurement at
Reporting Date using:
|
|
|
||||||||
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Total
|
||||||
Assets
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Available-for-sale:
|
|
|
|
|
|
||||||
Government and institutional money market funds
|
$
|
394,076
|
|
|
$
|
—
|
|
|
$
|
394,076
|
|
Corporate obligations (1)
|
—
|
|
|
204,886
|
|
|
204,886
|
|
|||
Other assets:
|
|
|
|
|
|
||||||
Deferred compensation investments
|
41,001
|
|
|
—
|
|
|
41,001
|
|
|||
Interest rate derivatives
|
—
|
|
|
1,436
|
|
|
1,436
|
|
|||
Total assets measured at fair value
|
$
|
435,077
|
|
|
$
|
206,322
|
|
|
$
|
641,399
|
|
Liabilities
|
|
|
|
|
|
||||||
Forward foreign currency exchange contracts (2)
|
—
|
|
|
7,150
|
|
|
7,150
|
|
|||
Total liabilities measured at fair value
|
$
|
—
|
|
|
$
|
7,150
|
|
|
$
|
7,150
|
|
(1)
|
The amortized cost of the Company’s investments classified as available-for-sale as of November 3, 2018 was $205.0 million.
|
(2)
|
The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.
|
|
May 4, 2019
|
|
November 3, 2018
|
||||||||||||
|
Principal Amount Outstanding
|
|
Fair Value
|
|
Principal Amount Outstanding
|
|
Fair Value
|
||||||||
3-Year term loan, due March 2020
|
$
|
75,000
|
|
|
$
|
75,000
|
|
|
$
|
425,000
|
|
|
$
|
425,000
|
|
5-Year term loan, due March 2022
|
1,350,000
|
|
|
1,350,000
|
|
|
1,350,000
|
|
|
1,350,000
|
|
||||
2.85% Senior unsecured notes, due March 2020
|
300,000
|
|
|
300,113
|
|
|
300,000
|
|
|
298,147
|
|
||||
2.90% Senior unsecured notes, due January 2021
|
450,000
|
|
|
450,564
|
|
|
450,000
|
|
|
444,568
|
|
||||
2.50% Senior unsecured notes, due December 2021
|
400,000
|
|
|
396,406
|
|
|
400,000
|
|
|
386,375
|
|
||||
2.875% Senior unsecured notes, due June 2023
|
500,000
|
|
|
495,695
|
|
|
500,000
|
|
|
479,189
|
|
||||
3.125% Senior unsecured notes, due December 2023
|
550,000
|
|
|
554,447
|
|
|
550,000
|
|
|
529,120
|
|
||||
3.90% Senior unsecured notes, due December 2025
|
850,000
|
|
|
874,714
|
|
|
850,000
|
|
|
829,611
|
|
||||
3.50% Senior unsecured notes, due December 2026
|
900,000
|
|
|
903,740
|
|
|
900,000
|
|
|
848,027
|
|
||||
4.50% Senior unsecured notes, due December 2036
|
250,000
|
|
|
251,900
|
|
|
250,000
|
|
|
232,627
|
|
||||
5.30% Senior unsecured notes, due December 2045
|
400,000
|
|
|
452,299
|
|
|
400,000
|
|
|
407,984
|
|
||||
Total debt
|
$
|
6,025,000
|
|
|
$
|
6,104,878
|
|
|
$
|
6,375,000
|
|
|
$
|
6,230,648
|
|
|
|
|
Fair Value At
|
||||||
|
Balance Sheet Location
|
|
May 4, 2019
|
|
November 3, 2018
|
||||
Forward foreign currency exchange contracts
|
Accrued liabilities
|
|
$
|
3,297
|
|
|
$
|
6,934
|
|
|
May 4, 2019
|
|
November 3, 2018
|
||||
Gross amount of recognized liabilities
|
$
|
(5,109
|
)
|
|
$
|
(8,054
|
)
|
Gross amounts of recognized assets offset in the condensed consolidated balance sheet
|
1,567
|
|
|
904
|
|
||
Net liabilities presented in the condensed consolidated balance sheet
|
$
|
(3,542
|
)
|
|
$
|
(7,150
|
)
|
|
May 4, 2019
|
|
November 3, 2018
|
||||
Raw materials
|
$
|
35,853
|
|
|
$
|
30,511
|
|
Work in process
|
400,724
|
|
|
375,908
|
|
||
Finished goods
|
171,508
|
|
|
180,341
|
|
||
Total inventories
|
$
|
608,085
|
|
|
$
|
586,760
|
|
•
|
ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business.
|
•
|
ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.
|
•
|
ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.
|
•
|
ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.
|
•
|
ASU 2017-07, Improving the Presentation of Net Period Pension Cost and Net Period Postretirement Benefit Cost.
|
ITEM 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
|
|||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
$
|
1,526,602
|
|
|
$
|
1,563,502
|
|
|
$
|
(36,900
|
)
|
|
(2
|
)%
|
Gross margin %
|
67.7
|
%
|
|
68.6
|
%
|
|
|
|
|
|||||
Net income
|
$
|
367,937
|
|
|
$
|
400,328
|
|
|
$
|
(32,391
|
)
|
|
(8
|
)%
|
Net income as a % of revenue
|
24.1
|
%
|
|
25.6
|
%
|
|
|
|
|
|||||
Diluted EPS
|
$
|
0.98
|
|
|
$
|
1.06
|
|
|
$
|
(0.08
|
)
|
|
(8
|
)%
|
|
|
|
|
|
|
|
|
|||||||
|
Six Months Ended
|
|||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
|||||||
Revenue
|
$
|
3,067,703
|
|
|
$
|
3,130,372
|
|
|
$
|
(62,669
|
)
|
|
(2
|
)%
|
Gross margin %
|
67.6
|
%
|
|
68.5
|
%
|
|
|
|
|
|||||
Net income
|
$
|
722,943
|
|
|
$
|
693,568
|
|
|
$
|
29,375
|
|
|
4
|
%
|
Net income as a % of revenue
|
23.6
|
%
|
|
22.2
|
%
|
|
|
|
|
|||||
Diluted EPS
|
$
|
1.93
|
|
|
$
|
1.84
|
|
|
$
|
0.09
|
|
|
5
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
||||||||||||||
Gross margin
|
$
|
1,034,092
|
|
|
$
|
1,072,390
|
|
|
$
|
(38,298
|
)
|
|
(4
|
)%
|
|
$
|
2,073,748
|
|
|
$
|
2,144,073
|
|
|
$
|
(70,325
|
)
|
|
(3
|
)%
|
Gross margin %
|
67.7
|
%
|
|
68.6
|
%
|
|
|
|
|
|
67.6
|
%
|
|
68.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
|
% Change
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
|
% Change
|
||||||||||||||
R&D expenses
|
$
|
285,846
|
|
|
$
|
289,472
|
|
|
$
|
(3,626
|
)
|
|
(1
|
)%
|
|
$
|
573,228
|
|
|
$
|
578,069
|
|
|
$
|
(4,841
|
)
|
|
(1
|
)%
|
R&D expenses as a % of revenue
|
18.7
|
%
|
|
18.5
|
%
|
|
|
|
|
|
18.7
|
%
|
|
18.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
|
% Change
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating income
|
$
|
469,695
|
|
|
$
|
502,554
|
|
|
$
|
(32,859
|
)
|
|
(7
|
)%
|
|
$
|
925,521
|
|
|
$
|
944,395
|
|
|
$
|
(18,874
|
)
|
|
(2
|
)%
|
Operating income as a % of revenue
|
30.8
|
%
|
|
32.1
|
%
|
|
|
|
|
|
30.2
|
%
|
|
30.2
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$ Change
|
||||||||||||
Interest expense
|
$
|
59,701
|
|
|
$
|
64,792
|
|
|
$
|
(5,091
|
)
|
|
$
|
118,429
|
|
|
$
|
132,822
|
|
|
$
|
(14,393
|
)
|
Interest income
|
(2,928
|
)
|
|
(1,912
|
)
|
|
(1,016
|
)
|
|
(5,616
|
)
|
|
(4,004
|
)
|
|
(1,612
|
)
|
||||||
Other, net
|
4,525
|
|
|
(451
|
)
|
|
4,976
|
|
|
4,365
|
|
|
105
|
|
|
4,260
|
|
||||||
Total nonoperating expense (income)
|
$
|
61,298
|
|
|
$
|
62,429
|
|
|
$
|
(1,131
|
)
|
|
$
|
117,178
|
|
|
$
|
128,923
|
|
|
$
|
(11,745
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
||||||||||||
Provision for income taxes
|
$
|
40,460
|
|
|
$
|
39,797
|
|
|
$
|
663
|
|
|
$
|
85,400
|
|
|
$
|
121,904
|
|
|
$
|
(36,504
|
)
|
Effective income tax rate
|
9.9
|
%
|
|
9.0
|
%
|
|
|
|
10.6
|
%
|
|
14.9
|
%
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
|
May 4, 2019
|
|
May 5, 2018 (1)
|
|
$ Change
|
|
% Change
|
||||||||||||||
Net Income
|
$
|
367,937
|
|
|
$
|
400,328
|
|
|
$
|
(32,391
|
)
|
|
(8
|
)%
|
|
$
|
722,943
|
|
|
$
|
693,568
|
|
|
$
|
29,375
|
|
|
4
|
%
|
Net Income as a % of revenue
|
24.1
|
%
|
|
25.6
|
%
|
|
|
|
|
|
23.6
|
%
|
|
22.2
|
%
|
|
|
|
|
||||||||||
Diluted EPS
|
$
|
0.98
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
$1.93
|
|
|
|
$1.84
|
|
|
|
|
|
|
Six Months Ended
|
||||||
|
May 4, 2019
|
|
May 5, 2018 (1)
|
||||
Net cash provided by operating activities
|
$
|
1,042,649
|
|
|
$
|
1,107,182
|
|
Net cash provided by operations as a % of revenue
|
34.0
|
%
|
|
35.4
|
%
|
||
Net cash used for investing activities
|
$
|
(170,787
|
)
|
|
$
|
(170,490
|
)
|
Net cash used for financing activities
|
$
|
(975,069
|
)
|
|
$
|
(1,178,171
|
)
|
|
May 4, 2019
|
|
November 3, 2018
|
|
$ Change
|
|
% Change
|
|||||||
Accounts receivable, net
|
$
|
685,978
|
|
|
$
|
639,717
|
|
|
$
|
46,261
|
|
|
7
|
%
|
Days sales outstanding*
|
42
|
|
|
40
|
|
|
|
|
|
|||||
Inventory
|
$
|
608,085
|
|
|
$
|
586,760
|
|
|
$
|
21,325
|
|
|
4
|
%
|
Days cost of sales in inventory*
|
111
|
|
|
107
|
|
|
|
|
|
|
Principal Amount Outstanding
|
|
|
3-Year term loan, due March 2020
|
$
|
75,000
|
|
5-Year term loan, due March 2022
|
1,350,000
|
|
|
2.85% Senior unsecured notes, due March 2020
|
300,000
|
|
|
2.90% Senior unsecured notes, due January 2021
|
450,000
|
|
|
2.50% Senior unsecured notes, due December 2021
|
400,000
|
|
|
2.875% Senior unsecured notes, due June 2023
|
500,000
|
|
|
3.125% Senior unsecured notes, due December 2023
|
550,000
|
|
|
3.90% Senior unsecured notes, due December 2025
|
850,000
|
|
|
3.50% Senior unsecured notes, due December 2026
|
900,000
|
|
|
4.50% Senior unsecured notes, due December 2036
|
250,000
|
|
|
5.30% Senior unsecured notes, due December 2045
|
400,000
|
|
|
Total debt
|
$
|
6,025,000
|
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1A.
|
Risk Factors
|
•
|
the effects of adverse economic conditions in the markets in which we sell our products;
|
•
|
changes in customer demand for our products and/or for end products that incorporate our products;
|
•
|
the timing, delay, reduction or cancellation of significant customer orders and our ability to manage inventory;
|
•
|
fluctuations in customer order patterns and seasonality;
|
•
|
our ability to accurately forecast distributor demand for our products;
|
•
|
our ability to accurately estimate future distributor pricing credits and/or stock rotation rights;
|
•
|
our ability to effectively manage our cost structure in both the short term and over a longer duration;
|
•
|
changes in geographic, product or customer mix;
|
•
|
changes in our effective tax rates or new or revised tax legislation in the United States, Ireland or worldwide;
|
•
|
the effects of issued, threatened or retaliatory government sanctions, trade barriers or economic restrictions, changes in law, regulations or other restrictions, including executive orders, changes in import and export regulations, export classifications or changes in duties and tariffs, particularly with respect to China;
|
•
|
the timing of new product announcements or introductions by us, our customers or our competitors and the market acceptance of such products;
|
•
|
pricing decisions and competitive pricing pressures;
|
•
|
fluctuations in manufacturing yields, adequate availability of wafers and other raw materials, and manufacturing, assembly and test capacity;
|
•
|
the ability of our third-party suppliers, subcontractors and manufacturers to supply us with sufficient quantities of raw materials, products and/or components;
|
•
|
a decline in infrastructure spending by foreign governments, including China;
|
•
|
a decline in the U.S. government defense budget, changes in spending or budgetary priorities, a prolonged U.S. government shutdown or delays in contract awards;
|
•
|
any significant decline in our backlog;
|
•
|
our ability to recruit, hire, retain and motivate adequate numbers of engineers and other qualified employees to meet the demands of our customers;
|
•
|
our ability to generate new design opportunities and win competitive bid selection processes;
|
•
|
the increasing costs of providing employee benefits worldwide, including health insurance, retirement plan and pension plan contributions and retirement benefits;
|
•
|
our ability to utilize our manufacturing facilities at efficient levels;
|
•
|
potential significant litigation-related costs or product warranty and/or indemnity claims, including those not covered by our suppliers or insurers;
|
•
|
the difficulties inherent in forecasting future operating expense levels, including with respect to costs associated with labor, utilities, transportation and raw materials;
|
•
|
the costs related to compliance with increasing worldwide government, environmental and social responsibility regulations;
|
•
|
new accounting pronouncements or changes in existing accounting standards and practices; and
|
•
|
the effects of public health emergencies, natural disasters, widespread travel disruptions, security risks, terrorist activities, international conflicts and other events beyond our control.
|
•
|
the inability to successfully integrate Linear's business into our own in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the Acquisition, which could result in the anticipated benefits of the Acquisition not being realized partly or wholly in the time frame currently anticipated or at all;
|
•
|
integrating personnel, IT systems and corporate, finance and administrative infrastructures of the two companies while maintaining focus on providing consistent, high quality products and services;
|
•
|
coordinating and integrating our internal operations, compensation and benefits programs, policies and procedures, and corporate structures; and
|
•
|
servicing the substantial debt that we have incurred in connection with the Acquisition.
|
•
|
seek additional financing in the debt or equity markets;
|
•
|
refinance or restructure all or a portion of our indebtedness;
|
•
|
borrow under our revolving credit facility;
|
•
|
divert funds that would otherwise be invested in our operations;
|
•
|
repatriate earnings as dividends from foreign locations, attracting foreign withholding and state and local income taxes;
|
•
|
sell selected assets; or
|
•
|
reduce or delay planned capital expenditures or operating expenditures.
|
•
|
difficulty or delay integrating acquired technologies, operations and personnel with our existing businesses;
|
•
|
diversion of management's attention in connection with both negotiating the transaction and integrating the assets;
|
•
|
strain on managerial and operational resources as management tries to oversee larger or more complex operations;
|
•
|
the future funding requirements for acquired companies, which may be significant;
|
•
|
potential loss of key employees;
|
•
|
exposure to unforeseen liabilities or regulatory compliance issues of acquired companies;
|
•
|
higher than expected or unexpected costs relating to or associated with an acquisition and integration of assets;
|
•
|
difficulty realizing synergies and growth prospects of an acquisition in a timely manner or at all; and
|
•
|
increased risk of costly and time-consuming legal proceedings.
|
•
|
political, legal and economic changes, crises or instability and civil unrest in foreign markets;
|
•
|
currency conversion risks and exchange rate and interest rate fluctuations;
|
•
|
trade policy, trade, travel, export or taxation disputes or restrictions, government sanctions, import or export tariffs, changes to export classifications or other restrictions imposed by the U.S. government or by the governments of the countries in which we do business, particularly in China;
|
•
|
complex, varying and changing government regulations and legal standards and requirements, particularly with respect to price protection, competition practices, export control regulations and restrictions, customs and tax requirements, immigration, anti-boycott regulations, data privacy, intellectual property, anti-corruption and environmental compliance, including U.S. customs and export regulations and restrictions, International Traffic in Arms Regulations and the Foreign Corrupt Practices Act;
|
•
|
economic disruption from terrorism and threats of terrorism and the response to them by the U.S. and its allies;
|
•
|
increased managerial complexities, including different employment practices and labor issues;
|
•
|
changes in immigration laws, regulations and procedures and enforcement practices of various government agencies;
|
•
|
greater difficulty enforcing intellectual property rights and weaker laws protecting such rights;
|
•
|
natural disasters or pandemics;
|
•
|
transportation disruptions and delays and increases in labor and transportation costs;
|
•
|
changes to foreign taxes, tariffs and freight rates;
|
•
|
fluctuations in raw material costs and energy costs;
|
•
|
greater difficulty in accounts receivable collections and longer collection periods; and
|
•
|
costs associated with our foreign defined benefit pension plans.
|
•
|
liability for damages and remediation;
|
•
|
the imposition of regulatory penalties and civil and criminal fines;
|
•
|
the suspension or termination of the development, manufacture, sale or use of certain of our products;
|
•
|
changes to our manufacturing processes or a need to substitute materials that may cost more or be less available;
|
•
|
damage to our reputation; and/or
|
•
|
global economic conditions generally;
|
•
|
crises in global credit, debt and financial markets;
|
•
|
actual or anticipated fluctuations in our revenue and operating results;
|
•
|
changes in financial estimates or other statements made by securities analysts or others in analyst reports or other publications or our failure to perform in line with those estimates or statements or our published guidance;
|
•
|
financial results and prospects of our customers;
|
•
|
U.S. and foreign government actions, including with respect to trade, travel, export and taxation;
|
•
|
changes in market valuations of other semiconductor companies;
|
•
|
rumors and speculation in the press, investment community or on social media about us, our customers or other companies in our industry;
|
•
|
announcements by us, our customers or our competitors of significant new products, technical innovations, material transactions, acquisitions or dispositions, litigation, capital commitments or revised earnings estimates;
|
•
|
departures of key personnel;
|
•
|
alleged noncompliance with laws, regulations or ethics standards by us or any of our employees, officers or directors; and
|
•
|
negative media publicity targeting us or our suppliers, customers or competitors.
|
ITEM 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
Total Number of
Shares Purchased
(a)
|
|
Average Price
Paid Per Share (b)
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs (c)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Plans or
Programs
|
||||||
February 3, 2019 through March 2, 2019
|
46,582
|
|
|
$
|
106.54
|
|
|
37,402
|
|
|
$
|
2,393,976,912
|
|
March 3, 2019 through March 30, 2019
|
496,726
|
|
|
$
|
107.03
|
|
|
186,056
|
|
|
$
|
2,373,997,691
|
|
March 31, 2019 through May 4, 2019
|
381,298
|
|
|
$
|
113.80
|
|
|
342,620
|
|
|
$
|
2,335,008,817
|
|
Total
|
924,606
|
|
|
$
|
109.80
|
|
|
566,078
|
|
|
$
|
2,335,008,817
|
|
(a)
|
Includes 358,528 shares withheld by us from employees to satisfy minimum employee tax obligations upon vesting of restricted stock units/awards granted to our employees under our equity compensation plans.
|
(b)
|
The average price paid for shares in connection with vesting of restricted stock units/awards are averages of the closing stock price at the vesting date which is used to calculate the number of shares to be withheld.
|
(c)
|
Shares repurchased pursuant to the stock repurchase program publicly announced on August 12, 2004. Under the repurchase program, we may repurchase outstanding shares of our common stock from time to time in the open market and through privately negotiated transactions in an aggregate amount of up to $8.2 billion. Unless terminated earlier by resolution of our Board of Directors, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.
|
ITEM 6.
|
Exhibits
|
|
||
Exhibit No.
|
|
Description
|
10.1†
|
|
|
10.2†
|
|
|
31.1†
|
|
|
31.2†
|
|
|
32.1†
|
|
|
32.2†
|
|
|
101.INS
|
|
The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.**
|
101.SCH
|
|
XBRL Schema Document.**
|
101.CAL
|
|
XBRL Calculation Linkbase Document.**
|
101.LAB
|
|
XBRL Labels Linkbase Document.**
|
101.PRE
|
|
XBRL Presentation Linkbase Document.**
|
101.DEF
|
|
XBRL Definition Linkbase Document.**
|
†
|
|
Filed or furnished herewith.
|
**
|
|
Submitted electronically herewith.
|
|
ANALOG DEVICES, INC.
|
||
|
|
|
|
Date: May 22, 2019
|
By:
|
|
/s/ Vincent Roche
|
|
|
|
Vincent Roche
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: May 22, 2019
|
By:
|
|
/s/ Prashanth Mahendra-Rajah
|
|
|
|
Prashanth Mahendra-Rajah
|
|
|
|
Senior Vice President, Finance and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
1.
|
Performance Restricted Stock Unit.
|
2.
|
Vesting and Conversion.
|
(a)
|
Subject to the terms of the Plan and this Agreement, the Performance RSUs shall vest in accordance with the vesting conditions set forth in this Section 2 and the performance-based vesting conditions set forth in Appendix A. For purposes of this Agreement, Performance RSUs that have not vested as of the Vesting Date in accordance with this Section 2 and Appendix A are referred to as “Unvested Performance RSUs.” The shares of Common Stock that are issuable upon the vesting and conversion of the Performance RSUs are referred to in this Agreement as “Shares.” As soon as administratively practicable after the issuance of any Shares upon the vesting and conversion of Performance RSUs (and in any event within sixty (60) days of the vesting date or event, as applicable), and subject to the terms and conditions set forth in the Agreement, the Company shall deliver or cause to be delivered evidence (which may include a book entry by the Company’s transfer agent) of the Shares so issued in the name of the Participant to the brokerage firm designated by the Company to maintain the brokerage account established for the Participant or the Participant’s heirs, in the case of Section 2(c). Notwithstanding the foregoing, the Company shall not be obligated to issue Shares to or in the name of the Participant upon the vesting and conversion of any Performance RSUs unless the issuance of such Shares shall comply with all relevant provisions of law and other legal requirements including, without limitation, any applicable securities laws and the requirements of any stock exchange upon which shares of Common Stock may then be listed.
|
(b)
|
In the event the Participant’s employment with the Company or the Employer (as defined in Section 2(e)) is terminated either by the Participant, the Company, or the Employer for any reason or no reason (other than due to death or Disability), then in each such case, all of the Unvested Performance RSUs as of the date of termination shall terminate and be cancelled immediately and automatically and the Participant shall have no further rights with respect to such Unvested Performance RSUs.
|
(c)
|
In the event of the Participant’s death prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately upon death with respect to the Initial Grant Number of Shares underlying the Performance RSUs, notwithstanding that the Participant was not employed as of the Vesting Date. In the event of the Participant’s death after the end of the Performance Period, the Unvested Performance RSUs shall vest with respect to the number of Shares underlying the Performance RSUs that would have vested in accordance with Appendix A had the Participant continued employment through the Vesting Date had he or she not died.
|
(d)
|
In the event the Participant becomes Disabled prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately as of the date the Participant is determined to be Disabled with respect to the Initial Grant Number of Shares underlying the Performance RSUs, regardless of whether the Participant terminates employment prior to the Vesting Date. In the event the Participant becomes Disabled after the end of the Performance Period, the Unvested Performance RSUs shall vest with respect to the number of Shares underlying the Performance RSUs that would have vested in accordance with Appendix A regardless of whether the Participant continues employment through the Vesting Date. “Disabled” with respect to the Participant means, when and if, as a result of disease, injury or mental disorder, the Participant is incapable of engaging in regular service or occupation with the Company or the Employer (as defined in paragraph e) which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by the Company.
|
(e)
|
For purposes of this Agreement, employment shall include being an employee with the Company. Employment shall also include being an employee with any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company (the “Employer”). Should a Participant transfer employment to become a director, consultant or advisor to the Company or the Employer following the Date of Grant, he or she will still be considered employed for vesting purposes until he or she ceases to provide services to the Company or any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company.
|
3.
|
Restrictions on Transfer.
|
(a)
|
The Participant shall not sell, assign, transfer, pledge or otherwise encumber any Performance RSUs, either voluntarily or by operation of law.
|
(b)
|
The Company shall not be required (i) to transfer on its books any of the Performance RSUs which have been transferred in violation of any of the provisions set forth herein or (ii) to treat as the owner of such Performance RSUs any transferee to whom such Performance RSUs have been transferred in violation of any of the provisions contained herein.
|
4.
|
Not a Shareholder. The Performance RSUs represent an unfunded, unsecured promise by the Company to deliver Shares upon vesting and conversion of the Performance RSUs, and until vesting of the Performance RSUs and issuance of the Shares, the Participant shall not have any of the rights of a shareholder with respect to the Shares underlying the Performance RSUs. For the avoidance of doubt, the Participant shall have no right to receive any dividends and shall have no voting rights with respect to the Shares underlying the Performance RSUs for which the record date is on or before the date on which the Shares underlying the Performance RSUs are issued to the Participant.
|
5.
|
Provisions of the Plan. The Performance RSUs and Shares, including the grant and issuance thereof, are subject to the provisions of the Plan. A copy of the Plan prospectus is available on the Company’s Intranet at https://thecircuit.web.analog.com/Pages/CircuitHome.aspx. (From The Circuit home page, click Knowledge Centers, HR, Employee Stock Programs. The related documents can be found in the right-hand column). If the Participant is unable to access this information via the Intranet, the Company’s Stock Plan Administrator can provide the Participant with copies (Stock_Plan_Admin@Analog.com).
|
6.
|
Withholding Taxes.
|
(a)
|
Regardless of any action the Company and/or the Employer, if different, takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related withholding (“Tax-Related Items”), the Participant acknowledges that the ultimate liability for all Tax-Related Items legally applicable to the Participant is and remains the Participant’s responsibility and may exceed the amount, if any, actually withheld by the Company or the Employer. The Participant further acknowledges that the Company and the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance RSUs, including the grant of the Performance RSUs, the vesting of the Performance RSUs, the subsequent sale of any Shares acquired pursuant to the Performance RSUs and the receipt of any dividends; and (ii) do not commit to structure the terms of the grant or any aspect of the Performance RSUs to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Participant becomes subject to Tax-Related Items in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, the Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
(b)
|
Prior to any relevant taxable or tax withholding event, as applicable, the Participant will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the methods set forth below:
|
(i)
|
the Company may withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the Performance RSUs that have an aggregate Fair Market Value (as defined under the Plan) sufficient to pay the minimum Tax-Related
|
(ii)
|
the Company may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from the Participant’s salary or other amounts payable to the Participant; or
|
(iii)
|
the Company may withhold from proceeds of the sale of Shares either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization).
|
7.
|
Option of Company to Deliver Cash. Notwithstanding any of the other provisions of this Agreement, and except as set forth in Appendix B, where share settlement is otherwise prohibited under local law or may present adverse tax consequences to the Participant, at the time the Performance RSUs vest, the Company may elect, in the sole discretion of the Compensation Committee of the Board, to deliver by wire transfer to the Participant in lieu of Shares an equivalent amount of cash (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date). If the Company elects to deliver cash to the Participant, the Company is authorized to retain such amount as is sufficient in the opinion of the Company to satisfy the Tax-Related Items withholding obligations of the Company pursuant to Section 6 herein.
|
8.
|
Repatriation and Other Legal Requirements. The Participant agrees as a condition of the grant of the Performance RSUs, as applicable, to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the Shares acquired pursuant to the Performance RSUs) in accordance with all foreign exchange rules and regulations applicable to the Participant. In addition, the Participant also agrees to take any and all actions, and consent to any and all actions taken by the Company and its subsidiaries, as may be required to allow the Company and its subsidiaries to comply with all laws, rules and regulations applicable to the Participant. Finally, the Participant agrees to take any and all actions as may be required to comply with the Participant’s personal legal and tax obligations under all laws, rules and regulations applicable to the Participant.
|
9.
|
Miscellaneous.
|
(a)
|
No Rights to Employment. The grant of the Performance RSUs shall not confer upon the Participant any right to continue in the employ of the Company or the Employer, nor limit in any way the right of the Company or the Employer to terminate the Participant’s employment at any time. Except in the event of disability or termination of employment due to death, the vesting of the Performance RSUs pursuant to Section 2 and Appendix A, is earned only by satisfaction of the performance-based vesting conditions and continuing service as an employee at the will of the Company or the Employer through the Vesting Date (not through the act of being hired or engaged or being granted the Performance RSUs hereunder).
|
(b)
|
Discretionary Nature. The Participant acknowledges and agrees that the Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company at any time, to the extend permitted under the Plan. The Participant’s participation in the Plan is voluntary. The grant of the Performance RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Performance RSUs or any other award under the Plan or other benefits in lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company or the Employer. The Performance RSUs and income from such Performance RSUs shall not be included in any calculation of severance, resignation, redundancy, end of service payments, bonuses, long-
|
(c)
|
Exclusion from Termination Indemnities and Other Benefits. This Section 9(c) applies if the Participant resides outside the U.S.: The value of the Performance RSUs and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Participant’s employment with the Company or the Employer (and the Participant’s employment contract, if any). Any grant under the Plan, including the grant of the Performance RSUs and the income and value of same, is not part of normal or expected compensation or salary. Further, the Performance RSUs and the Shares, and the income and value of same, are not intended to replace any pension rights or compensation.
|
(d)
|
No Entitlement. This Section 9(d) applies if the Participant resides outside the U.S. and/or the Company is not the Participant's employer: In consideration of the grant of Performance RSUs, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance RSUs resulting from termination of the Participant’s employment with the Company or the Employer (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment contract, if any) and the Participant irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim.
|
(e)
|
Exchange Rates. This Section 9(e) applies if the Participant resides outside the U.S.: The Participant acknowledges and agrees that neither the Company nor the Employer shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the Performance RSUs or of any amounts due to the Participant pursuant to the vesting and settlement of the Performance RSUs or the subsequent sale of any Shares.
|
(f)
|
Future Value of Shares. The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty.
|
(g)
|
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.
|
(h)
|
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Participant and his or her respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 3 of this Agreement.
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(i)
|
Notice. Each notice relating to this Award shall be in writing (which shall include electronic form) and delivered in person, electronically or by first class mail, postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its offices at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062, Attention: Chief Financial Officer. Each notice to the Participant shall be addressed to the Participant at the Participant’s last known mailing or email address, as applicable, on the records of the Company.
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(j)
|
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.
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(k)
|
Entire Agreement. This Agreement and the Plan constitute the entire understanding between the parties, and supersede all prior agreements and understandings, relating to the subject matter of these documents.
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(l)
|
Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of laws.
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(m)
|
Compliance with Laws. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. The Participant also understands and agrees that the Awards granted under the Plan, including the Performance RSUs and the underlying Shares, are subject to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any SEC regulations, as now or hereafter in effect. Further, the Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.
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(n)
|
Interpretation. The interpretation and construction of any terms or conditions of this Agreement or the Plan, or other matters related to the Plan, by the Compensation Committee of the Board shall be final and conclusive.
|
(o)
|
Participant’s Acceptance. The Participant is urged to read this Agreement carefully and to consult with his or her own legal counsel regarding the terms and consequences of this Agreement and the legal and binding effect of this Agreement. By
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(p)
|
Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Performance RSUs or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
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(q)
|
English Language. The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance RSUs, be drawn up in English. If the Participant has received this Agreement, the Plan or any other documents related to the Performance RSUs translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control.
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(r)
|
Appendix B. Notwithstanding any provisions herein to the contrary, if the Participant transfers the Participant’s residence and/or employment to a country other than the United States, the Performance RSUs shall be subject to any special terms and conditions for such country as may be set forth in Appendix B to this Agreement. Moreover, if the Participant relocates to one of the countries included in Appendix B, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix B constitutes part of this Agreement.
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(s)
|
Additional Requirements. The Company reserves the right to impose other requirements on the Performance RSUs, any Shares acquired pursuant to the Performance RSUs, and the Participant’s participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
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(t)
|
Private Placement. The Company has submitted filings in the United States in connection with the stock incentive plan under which this Award was made. The Company has not submitted any registration statement, prospectus or other filings with other local securities authorities (unless otherwise required under such local law), and the grant of the Award is not intended to be a public offering of securities in any other jurisdiction or subject to the supervision of other local securities authorities.
|
(u)
|
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 non-cash distribution to holders of Common Stock, the number of Performance RSUs, and Shares issuable upon vesting and conversion thereof, shall be appropriately adjusted in such manner as shall be determined by the Compensation Committee.
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(v)
|
No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of Shares. The Participant is encouraged to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
|
(w)
|
Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on the Participant’s or the Participant’s broker’s country of residence or where the Common Stock is listed, the Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions which may affect the Participant’s ability to accept, acquire, sell, or otherwise dispose of Common Stock, rights to Common Stock (e.g., Performance RSUs), or rights linked to the value of Common Stock (e.g., phantom awards, futures) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the Participant’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Keep in mind third parties includes fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Participant should speak to his or her personal advisor on this matter.
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(x)
|
Foreign Asset/Account, Exchange Control, and Tax Reporting. Depending on the Participant’s country, the Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the vesting of the Performance RSUs, the acquisition, holding, and/or transfer of Shares or cash resulting from participation in the Plan and/or the opening and maintenance of a brokerage or bank account in connection with the Plan. The Participant may be required to report such assets, accounts, account balances and values and/or related transactions to the applicable authorities in his or her country. The Participant also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to the Participant’s country through a designated broker or bank and/or within a certain time after receipt. The Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements. The Participant further understands that he or she should consult the Participant’s personal legal advisor on these matters.
|
(y)
|
Waiver. The Participant acknowledges that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant.
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|
/s/ Ray Stata
|
|
/s/ Vincent Roche
|
|
|
Ray Stata
|
|
Vincent Roche
|
|
|
Chairman of the Board
|
|
President & Chief Executive Officer
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|
1.
|
Performance Period. The three-year period beginning on Grant Date and ending on Grant Custom 1 (the “Performance Period”).
|
2.
|
Vesting Date. Cliff Vesting Date.
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3.
|
Determination Date: The date the Compensation Committee of the Board determines the level of attainment of the Performance Parameters. The Determination Date shall be a date as soon as possible following the end of the Performance Period but prior to the Vesting Date.
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4.
|
Performance-Based Vesting Terms. Subject to Section 2(a) through 2(d) of the Performance Restricted Stock Unit Agreement, the Participant shall vest on the Vesting Date in the number of Performance RSUs, if any, that the Compensation Committee of the Board shall determine to be vested based on the determination of the level of attainment of the Performance Parameters, provided the Participant continues to provide services to the Company or Employer or respective successor through the Vesting Date.
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5.
|
Performance Parameters. The Performance Parameters are based on the comparison of the TSR (as defined below) of the Company relative to the median TSR of the Peer Group (as defined below) during the Performance Period and are equal to 100% plus or minus one and a half times the difference between the Company’s TSR and the median Peer Group TSR. The number of Performance RSUs that shall vest shall be equal to a number of Performance RSUs that is between 0% and 200% of the Initial Grant Number, up to a maximum of 100% of the Initial Grant Number if the Company’s TSR is negative. Attainment among Performance Parameters is subject to interpolation on a linear basis.
|
Payout Percent
|
Number of Potential Shares Attained
|
Performance Parameters
|
0%
|
0
|
Company TSR minus Peer Group Median TSR is less than or equal to -66.67
|
100%
|
Number of Awards Granted
|
Company TSR minus Peer Group Median TSR equals 0
|
200%
|
Grant Custom 2
|
Company TSR minus Peer Group Median TSR is greater than or equal to +66.67
|
(a)
|
Data Collection and Usage. The Company collects, processes and uses personal data of Participants, including, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of stock or directorships held in the Company, and details of all Performance RSUs, canceled, vested, or outstanding in the Participant’s favor, which the Company receives from the Participant or the Employer. If the Company offers the Participant a grant of Performance RSUs under the Plan, then the Company will collect the Participant’s personal data for purposes of allocating stock and implementing, administering and managing the Plan. The Company’s legal basis for the processing of the Participant’s personal data would be his or her consent.
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(b)
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Stock Plan Administration Service Providers. The Company transfers participant data to Fidelity, an independent service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Participant’s data with another company that serves in a similar manner. The Company’s service provider will open an account for the Participant to receive and trade shares of Common Stock. The Participant will be asked to agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in the Plan.
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(c)
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International Data Transfers. The Company and its service providers are based in the United States. If the Participant is outside the United States, the Participant should note that his or her country has enacted data privacy laws that are different from the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program. The Company’s legal basis for the transfer of the Employee’s personal data is his or her consent.
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(d)
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Data Retention. The Company will use the Participant’s personal data only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including under tax and security laws. When the Company no longer needs the Participant’s personal data, which will generally be seven years after the Participant is granted Performance RSUs under the Plan, the Company will remove it from it from its systems. If the Company keeps data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations.
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(e)
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Voluntariness and Consequences of Consent Denial or Withdrawal. The Participant’s participation in the Plan and the Participant’s grant of consent is purely voluntary. The Participant may deny or withdraw his or her consent at any time. If the Participant does not consent, or if the Participant withdraws his or her consent, the Participant cannot participate in the Plan. This would not affect the Participant’s salary as an employee or his or her career; the Participant would merely forfeit the opportunities associated with the Plan.
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(f)
|
Data Subject Rights. The Participant has a number of rights under data privacy laws in his or her country. Depending on where the Participant is based, the Participant’s rights may include the right to (a) request access or copies of personal data the Company processes, (b) rectification of incorrect data, (c) deletion of data, (d) restrictions on processing, (e) portability of data, (f) to lodge complaints with competent authorities in the Participant’s country, and/or (g) a list with the names and addresses of any potential recipients of the Participant’s personal data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights please contact the Company at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062 U.S.A., Attention: Stock Plan Administrator.
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1.
|
Performance Restricted Stock Unit.
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2.
|
Vesting and Conversion.
|
(a)
|
Subject to the terms of the Plan and this Agreement, the Performance RSUs shall vest in accordance with the vesting conditions set forth in this Section 2 and the performance-based vesting conditions set forth in Appendix A. For purposes of this Agreement, Performance RSUs that have not vested as of the Vesting Date in accordance with this Section 2 and Appendix A are referred to as “Unvested Performance RSUs.” The shares of Common Stock that are issuable upon the vesting and conversion of the Performance RSUs are referred to in this Agreement as “Shares.” As soon as administratively practicable after the vesting and conversion of Performance RSUs (and in any event within sixty (60) days of the vesting date or event, as applicable), and subject to the terms and conditions set forth in the Agreement, the Company shall deliver or cause to be delivered evidence (which may include a book entry by the Company’s transfer agent) of the Shares so issued in the name of the Participant to the brokerage firm designated by the Company to maintain the brokerage account established for the Participant or the Participant’s heirs, in the case of Section 2(c). Notwithstanding the foregoing, the Company shall not be obligated to issue Shares to or in the name of the Participant upon the vesting and conversion of any Performance RSUs unless the issuance of such Shares shall comply with all relevant provisions of law and other legal requirements including, without limitation, any applicable securities laws and the requirements of any stock exchange upon which shares of Common Stock may then be listed.
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(b)
|
In the event the Participant’s employment with the Company or the Employer (as defined in Section 2(e)) is terminated either by the Participant, the Company, or the Employer for any reason or no reason (other than due to death or Disability), then in each such
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(c)
|
In the event of the Participant’s death prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately upon death based on the following attainment levels for each of the Performance Measurement Periods: (i) if the death occurs following the last day of a Performance Measurement Period, an attainment level based on the actual attainment level determined by the Compensation Committee of the Board for each of the Performance Measurement Periods ending prior to the Participant’s death; and (ii) if the termination occurs prior to the last day of a Performance Measurement Period, an attainment level equal to 100% for each of the Performance Measurement Periods that end subsequent to the Participant’s death. In the event of the Participant’s death after the end of the Performance Period but prior to the Vesting Date, the Unvested Performance RSUs shall vest, on the date that the attainment level is determined, with respect to the number of Shares underlying the Performance RSUs that become eligible to vest based on the attainment level determined by the Compensation Committee of the Board.
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(d)
|
In the event the Participant becomes Disabled prior to the end of the Performance Period, the Unvested Performance RSUs shall vest immediately as of the date the Participant is determined to be Disabled (regardless of whether the Participant terminates employment prior to the Vesting Date) based on the following attainment levels for each of the Performance Periods: (i) if the Participant is determined to be Disabled following the last day of a Performance Measurement Period, an attainment level based on the actual attainment level determined by the Compensation Committee of the Board for each of the Performance Measurement Periods ending prior to the date that the Participant is determined to be Disabled; and (ii) if the Participant is determined to be Disabled prior to the last day of a Performance Measurement Period, an attainment level equal to 100% for each of the Performance Measurement Periods that end subsequent to the date that the Participants is determined to be Disabled. In the event the Participant is determined to be Disabled after the end of the Performance Period but prior to the Vesting Date, the Unvested Performance RSUs shall vest, on the date that the attainment level is determined, with respect to the number of Shares underlying the Performance RSUs that become eligible to vest based on the attainment level determined by the Compensation Committee of the Board. “Disabled” with respect to the Participant means, when and if, as a result of disease, injury or mental disorder, the Participant is incapable of engaging in regular service or occupation with the Company or the Employer (as defined in paragraph e) which has lasted or can be expected to last for a continuous period of not less than 12 months, as determined by the Company.
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(e)
|
For purposes of this Agreement, employment shall include being an employee with the Company. Employment shall also include being an employee with any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company (the “Employer”). Should a Participant transfer employment to become a director, consultant or advisor to the Company or the Employer following the Date of Grant, he or she will still be considered employed for vesting purposes until he or she ceases to provide services to the Company or any direct or indirect parent or subsidiary of the Company, or any successor to the Company or any such parent or subsidiary of the Company.
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3.
|
Restrictions on Transfer.
|
(a)
|
The Participant shall not sell, assign, transfer, pledge or otherwise encumber any Performance RSUs, either voluntarily or by operation of law.
|
(b)
|
The Company shall not be required (i) to transfer on its books any of the Performance RSUs which have been transferred in violation of any of the provisions set forth herein or (ii) to treat as the owner of such Performance RSUs any transferee to whom such Performance RSUs have been transferred in violation of any of the provisions contained herein.
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4.
|
Not a Shareholder. The Performance RSUs represent an unfunded, unsecured promise by the Company to deliver Shares upon vesting and conversion of the Performance RSUs, and until vesting of the Performance RSUs and issuance of the Shares, the Participant shall not have any of the rights of a shareholder with respect to the Shares underlying the Performance RSUs. For the avoidance of doubt, the Participant shall have no right to receive any dividends and shall have no voting rights with respect to the Shares underlying the Performance RSUs for which the record date is on or before the date on which the Shares underlying the Performance RSUs are issued to the Participant.
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5.
|
Provisions of the Plan. The Performance RSUs and Shares, including the grant and issuance thereof, are subject to the provisions of the Plan. A copy of the Plan prospectus is available on the Company’s Intranet at https://thecircuit.web.analog.com/Pages/CircuitHome.aspx. (From The Circuit home page, click Knowledge Centers, HR, Employee Stock Programs. The related documents can be found in the right-hand column). If the Participant is unable to access this information via the Intranet, the Company’s Stock Plan Administrator can provide the Participant with copies (Stock_Plan_Admin@Analog.com).
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6.
|
Withholding Taxes.
|
(a)
|
Regardless of any action the Company and/or the Employer, if different, takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other
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(b)
|
Prior to any relevant taxable or tax withholding event, as applicable, the Participant will pay or make adequate arrangements satisfactory to the Company to satisfy all Tax-Related Items. In this regard, the Participant authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the methods set forth below:
|
(i)
|
the Company may withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the Performance RSUs that have an aggregate Fair Market Value (as defined under the Plan) sufficient to pay the minimum Tax-Related Items required to be withheld with respect to the Shares. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date); or
|
(ii)
|
the Company may, in its discretion, withhold any amount necessary to pay the Tax-Related Items from the Participant’s salary or other amounts payable to the Participant; or
|
(iii)
|
the Company may withhold from proceeds of the sale of Shares either through a voluntary sale or through a mandatory sale arranged by the Company (on the Participant’s behalf pursuant to this authorization).
|
7.
|
Option of Company to Deliver Cash. Notwithstanding any of the other provisions of this Agreement, and except as set forth in Appendix B, where share settlement is otherwise prohibited under local law or may present adverse tax consequences to the Participant, at the time the Performance RSUs vest, the Company may elect, in the sole discretion of the Compensation Committee of the Board, to deliver by wire transfer to the Participant in lieu of Shares an equivalent amount of cash (determined by reference to the closing price of the Common Stock on the Nasdaq Global Select Market on the applicable vesting date). If the Company elects to deliver cash to the Participant, the Company is authorized to retain such amount as is sufficient in the opinion of the Company to satisfy the Tax-Related Items withholding obligations of the Company pursuant to Section 6 herein.
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8.
|
Repatriation and Other Legal Requirements. The Participant agrees as a condition of the grant of the Performance RSUs, as applicable, to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends and any proceeds derived from the sale of the Shares acquired pursuant to the Performance RSUs) in accordance with all foreign exchange rules and regulations applicable to the Participant. In addition, the Participant also agrees to take any and all actions, and consent to any and
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9.
|
Miscellaneous.
|
(a)
|
No Rights to Employment. The grant of the Performance RSUs shall not confer upon the Participant any right to continue in the employ of the Company or the Employer, nor limit in any way the right of the Company or the Employer to terminate the Participant’s employment at any time. Except in the event of disability or termination of employment due to death, the vesting of the Performance RSUs pursuant to Section 2 and Appendix A, is earned only by satisfaction of the performance-based vesting conditions and continuing service as an employee at the will of the Company or the Employer through the Vesting Date (not through the act of being hired or engaged or being granted the Performance RSUs hereunder).
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(b)
|
Discretionary Nature. The Participant acknowledges and agrees that the Plan is discretionary in nature and may be amended, cancelled, or terminated by the Company at any time, to the extent permitted under the Plan. The Participant’s participation in the Plan is voluntary. The grant of the Performance RSUs under the Plan is a one-time benefit and does not create any contractual or other right to receive a grant of Performance RSUs or any other award under the Plan or other benefits in lieu thereof in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the form and timing of any grant, the number of Shares subject to the grant, and the vesting provisions. Any amendment, modification or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company or the Employer. The Performance RSUs and income from such Performance RSUs shall not be included in any calculation of severance, resignation, redundancy, end of service payments, bonuses, long-service awards, holiday pay, pension, or retirement benefits or similar payments. The Performance RSUs should in no event be considered as compensation for, or relating in any way to, past services for the Company or the Employer.
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(c)
|
Exclusion from Termination Indemnities and Other Benefits. This Section 9(c) applies if the Participant resides outside the U.S.: The value of the Performance RSUs and any other awards granted under the Plan is an extraordinary item of compensation outside the scope of the Participant’s employment with the Company or the Employer (and the Participant’s employment contract, if any). Any grant under the Plan, including the grant of the Performance RSUs and the income and value of same, is not part of normal or expected compensation or salary. Further, the Performance RSUs and the Shares, and the income and value of same, are not intended to replace any pension rights or compensation.
|
(d)
|
No Entitlement. This Section 9(d) applies if the Participant resides outside the U.S. and/or the Company is not the Participant's employer: In consideration of the grant of Performance RSUs, no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance RSUs resulting from termination of the Participant’s employment with the Company or the Employer (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Participant is employed or the terms of the Participant’s employment contract, if any) and the Participant irrevocably releases the Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, the Participant shall be deemed irrevocably to have waived the Participant’s entitlement to pursue such claim.
|
(e)
|
Exchange Rates. This Section 9(e) applies if the Participant resides outside the U.S.: The Participant acknowledges and agrees that neither the Company nor the Employer shall be liable for any foreign exchange rate fluctuation between the Participant’s local currency and the United States Dollar that may affect the value of the Performance RSUs or of any amounts due to the Participant pursuant to the vesting and settlement of the Performance RSUs or the subsequent sale of any Shares.
|
(f)
|
Future Value of Shares. The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty.
|
(g)
|
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.
|
(h)
|
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Company and the Participant and his or her respective heirs, executors, administrators, legal representatives, successors and assigns, subject to the restrictions on transfer set forth in Section 3 of this Agreement.
|
(i)
|
Notice. Each notice relating to this Award shall be in writing (which shall include electronic form) and delivered in person, electronically or by first class mail, postage prepaid, to the address as hereinafter provided. Each notice shall be deemed to have been given on the date it is received. Each notice to the Company shall be addressed to it at its offices at Analog Devices, Inc., One
|
(j)
|
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.
|
(k)
|
Entire Agreement. This Agreement and the Plan constitute the entire understanding between the parties, and supersede all prior agreements and understandings, relating to the subject matter of these documents.
|
(l)
|
Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the Commonwealth of Massachusetts without regard to any applicable conflicts of laws.
|
(m)
|
Compliance with Laws. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Shares, the Company shall not be required to deliver any Shares prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Participant understands that the Company is under no obligation to register or qualify the Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares. The Participant also understands and agrees that the Awards granted under the Plan, including the Performance RSUs and the underlying Shares, are subject to the listing standards of any national securities exchange or association on which the Company's securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, and any SEC regulations, as now or hereafter in effect. Further, the Participant agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.
|
(n)
|
Interpretation. The interpretation and construction of any terms or conditions of this Agreement or the Plan, or other matters related to the Plan, by the Compensation Committee of the Board shall be final and conclusive.
|
(o)
|
Participant’s Acceptance. The Participant is urged to read this Agreement carefully and to consult with his or her own legal counsel regarding the terms and consequences of this Agreement and the legal and binding effect of this Agreement. By virtue of his or her acceptance of this Award, the Participant is deemed to have accepted and agreed to all of the terms and conditions of this Agreement and the provisions of the Plan.
|
(p)
|
Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to the Performance RSUs or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
(q)
|
English Language. The Participant acknowledges and agrees that it is the Participant’s express intent that this Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance RSUs, be drawn up in English. If the Participant has received this Agreement, the Plan or any other documents related to the Performance RSUs translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version shall control.
|
(r)
|
Appendix B. Notwithstanding any provisions herein to the contrary, if the Participant transfers the Participant’s residence and/or employment to a country other than the United States, the Performance RSUs shall be subject to any special terms and conditions for such country as may be set forth in Appendix B to this Agreement. Moreover, if the Participant relocates to one of the countries included in Appendix B, the special terms and conditions for such country will apply to the Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. Appendix B constitutes part of this Agreement.
|
(s)
|
Additional Requirements. The Company reserves the right to impose other requirements on the Performance RSUs, any Shares acquired pursuant to the Performance RSUs, and the Participant’s participation in the Plan, to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable for legal or administrative reasons. Such requirements may include (but are not limited to) requiring the Participant to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
(t)
|
Private Placement. The Company has submitted filings in the United States in connection with the stock incentive plan under which this Award was made. The Company has not submitted any registration statement, prospectus or other filings with other local securities authorities (unless otherwise required under such local law), and the grant of the Award is not intended to be a public offering of securities in any other jurisdiction or subject to the supervision of other local securities authorities.
|
(u)
|
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 non-cash distribution to holders of Common Stock, the number of Performance RSUs, and Shares issuable upon vesting and conversion thereof, shall be appropriately adjusted in such manner as shall be determined by the Compensation Committee.
|
(v)
|
No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan, or the Participant’s acquisition or sale of Shares. The Participant is encouraged to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
|
(w)
|
Insider Trading Restrictions/Market Abuse Laws. The Participant acknowledges that, depending on the Participant’s or the Participant’s broker’s country of residence or where the Common Stock is listed, the Participant may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions which may affect the Participant’s ability to accept, acquire, sell, or otherwise dispose of Common Stock, rights to Common Stock (e.g., Performance RSUs), or rights linked to the value of Common Stock (e.g., phantom awards, futures) under the Plan during such times as the Participant is considered to have “inside information” regarding the Company (as defined by the laws or regulations in the Participant’s country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Participant placed before possessing inside information. Furthermore, the Participant could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. Keep in mind third parties includes fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Participant acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Participant should speak to his or her personal advisor on this matter.
|
(x)
|
Foreign Asset/Account, Exchange Control, and Tax Reporting. Depending on the Participant’s country, the Participant may be subject to foreign asset/account, exchange control and/or tax reporting requirements as a result of the vesting of the Performance RSUs, the acquisition, holding, and/or transfer of Shares or cash resulting from participation in the Plan and/or the opening and maintenance of a brokerage or bank account in connection with the Plan. The Participant may be required to report such assets, accounts, account balances and values and/or related transactions to the applicable authorities in his or her country. The Participant also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to the Participant’s country through a designated broker or bank and/or within a certain time after receipt. The Participant acknowledges that he or she is responsible for ensuring compliance with any applicable foreign asset/account, exchange control and tax reporting requirements. The Participant further understands that he or she should consult the Participant’s personal legal advisor on these matters.
|
(y)
|
Waiver. The Participant acknowledges that a waiver by the Company or breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Participant or any other participant.
|
|
/s/ Ray Stata
|
|
/s/ Vincent Roche
|
|
|
Ray Stata
|
|
Vincent Roche
|
|
|
Chairman of the Board
|
|
President & Chief Executive Officer
|
|
1.
|
Performance Period. The three-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2021(the “Performance Period”). The Performance Period shall consist of the following three performance measurement periods: (i) the one-year period commencing on the first day of the first quarter and ending on the last day of the fourth quarter of the Company’s fiscal year 2019 (“FY 2019 Period”); (ii) the two-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2020 (“Cumulative FY19/20 Period”) and (iii) and the three-year period beginning on the first day of the first quarter of the Company’s fiscal year 2019 and ending on the last day of the fourth quarter of the Company’s fiscal year 2021 (“Cumulative FY19/21 Period,” and collectively, the “Performance Measurement Periods”);
|
2.
|
Vesting Date. Cliff Vesting Date.
|
3.
|
Determination Date: The date the Compensation Committee of the Board determines the level of attainment of the Operating Profit Goals for each of the three corresponding Performance Measurement Periods, which date shall be as soon as practicable following the last day of the applicable Performance Measurement Period.
|
4.
|
Performance Parameters. The Performance Parameters are based on the attainment of Company’s Operating Profit Goals established for each of the Performance Measurement Periods. The attainment level, ranging from 0% to 200%, of the Operating Profit Goal applicable to each Performance Measurement Period shall be measured separately on each corresponding Determination Date and weighted equally. The number of Performance RSUs that shall vest shall be equal to a number of Performance RSUs that is between 0% and 200% of the Initial Grant Number. Attainment among the Operation Profit Goal attainment levels is subject to interpolation on a linear basis.
|
(a)
|
“Operating Profit Goal” shall mean the goal related to Non-GAAP Operating Profit Before Taxes for each of the Performance Measurement Periods approved by the Compensation Committee of the Board in connection with the granting of the Award.
|
(b)
|
“Non-GAAP Operating Profit Before Taxes” means Non-GAAP Operating Profit Before Taxes, as reported by the Company in its earnings press release furnished to the U.S. Securities and Exchange Commission, which shall be determined in accordance with GAAP and disclosed non-GAAP adjustments and further adjusted for the results of any acquisitions or divestitures of significant materiality to be reported in the Company’s 10-Q/10-K filings.
|
(c)
|
The definition of or method of determining Non-GAAP Operating Profit Before Taxes for purposes of ascertaining the attainment level of the Operating Profit Goal may, in the discretion of the Compensation Committee of the Board, be adjusted to eliminate the impact of any one or more of the following unanticipated events:
|
(i)
|
items related to a change in Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time;
|
(ii)
|
items relating to unusual or extraordinary corporate transactions, events or developments, or
|
(iii)
|
items relating to gains or losses for material litigation, arbitration and contractual settlements.
|
Payout Percent
|
Number of Potential Shares Attained
|
Performance Parameters
|
0%
|
0
|
Company Operating Profit Goal does not meet minimum threshold approved by the Compensation Committee of the Board
|
100%
|
Number of Awards Granted
|
Company Operating Profit Goal meets target approved by Compensation Committee of the Board
|
200%
|
Grant Custom 2
|
Company Operating Profit Goal meets or exceeds the maximum target approved by the Compensation Committee of the Board
|
(a)
|
Data Collection and Usage. The Company collects, processes and uses personal data of Participants, including, name, home address and telephone number, date of birth, social insurance number or other identification number, salary, citizenship, job title, any shares of stock or directorships held in the Company, and details of all Performance RSUs, canceled, vested, or outstanding in the Participant’s favor, which the Company receives from the Participant or the Employer. If the Company offers the Participant a grant of Performance RSUs under the Plan, then the Company will collect the Participant’s personal data for purposes of allocating stock and implementing, administering and managing the Plan. The Company’s legal basis for the processing of the Participant’s personal data would be his or her consent.
|
(b)
|
Stock Plan Administration Service Providers. The Company transfers participant data to Fidelity Stock Plan Services LLC, an independent service provider based in the United States, which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Participant’s data with another company that serves in a similar manner. The Company’s service provider will open an account for the Participant to receive and trade shares of Common Stock. The Participant will be asked to agree on separate terms and data processing practices with the service provider, which is a condition to the Participant’s ability to participate in the Plan.
|
(c)
|
International Data Transfers. The Company and its service providers are based in the United States. If the Participant is outside the United States, the Participant should note that his or her country has enacted data privacy laws that are different from the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program. The Company’s legal basis for the transfer of the Employee’s personal data is his or her consent.
|
(d)
|
Data Retention. The Company will use the Participant’s personal data only as long as is necessary to implement, administer and manage the Participant’s participation in the Plan or as required to comply with legal or regulatory obligations, including under tax and security laws. If the Company keeps data longer, it would be to satisfy legal or regulatory obligations and the Company’s legal basis would be relevant laws or regulations.
|
(e)
|
Voluntariness and Consequences of Consent Denial or Withdrawal. The Participant’s participation in the Plan and the Participant’s grant of consent is purely voluntary. The Participant may deny or withdraw his or her consent at any time. If the Participant does not consent, or if the Participant withdraws his or her consent, the Participant cannot participate in the Plan. This would not affect the Participant’s salary from or employment with the Employer; the Participant would merely forfeit the opportunities associated with the Plan.
|
(f)
|
Data Subject Rights. The Participant has a number of rights under data privacy laws in his or her country. Depending on where the Participant is based, the Participant’s rights may include the right to (a) request access or copies of personal data the Company processes, (b) rectification of incorrect data, (c) deletion of data, (d) restrictions on processing, (e) portability of data, (f) lodge complaints with competent authorities in the Participant’s country, and/or (g) a list with the names and addresses of any potential recipients of the Participant’s personal data. To receive clarification regarding the Participant’s rights or to exercise the Participant’s rights please contact the Company at Analog Devices, Inc., One Technology Way, Norwood, Massachusetts, 02062 U.S.A., Attention: Stock Plan Administrator.
|
1.
|
OFFER
|
2.
|
TERMS OF GRANT
|
3.
|
ADDITIONAL DOCUMENTS
|
(a)
|
the Plan;
|
(b)
|
the Plan Prospectus; and
|
(c)
|
the Agreement.
|
4.
|
RELIANCE ON STATEMENTS
|
5.
|
WHO IS ELIGIBLE TO PARTICIPATE?
|
6.
|
ACCEPTING AN AWARD
|
7.
|
WHAT ARE THE MATERIAL TERMS OF THE RESTRICTED STOCK UNITS?
|
(a)
|
What are Restricted Stock Units?
|
(b)
|
Do I have to pay any money to receive the Restricted Stock Units?
|
(c)
|
How many Shares will I receive upon vesting of my Restricted Stock Units?
|
(f)
|
What happens if my employment with the Company or Australian Subsidiary terminates?
|
8.
|
WHAT IS A SHARE IN THE COMPANY
|
9.
|
HOW CAN I OBTAIN UPDATED INDICATIVE EXAMPLES OF THE CURRENT MARKET PRICE IN AUSTRALIAN DOLLARS?
|
10.
|
WHAT ADDITIONAL RISK FACTORS APPLY TO AUSTRALIAN RESIDENTS’ PARTICIPATION IN THE PLAN?
|
11.
|
PLAN MODIFICATION, TERMINATION ETC.
|
12.
|
WHAT ARE THE AUSTRALIAN TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
|
(a)
|
What is the effect of the grant of the Restricted Stock Units?
|
(b)
|
When will you be taxed if your Restricted Stock Units are subject to a real risk of forfeiture?
|
(c)
|
What is the amount to be included in your assessable income if an ESS deferred taxing point occurs?
|
(d)
|
What is the market value of the Underlying Shares?
|
(e)
|
What happens if I cease employment before my Restricted Stock Units vest?
|
(f)
|
What tax consequences will arise when I sell my Shares?
|
(g)
|
What are the taxation consequences if a dividend is paid on the Shares?
|
(h)
|
What are the tax withholding and reporting obligations associated with the Restricted Stock Units?
|
13.
|
WHAT ARE THE U.S. TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
|
•
|
you agree that any employer’s NICs liability that may arise in connection with your Awards will be transferred to you;
|
•
|
you authorise your employer to recover an amount sufficient to cover this liability by such methods including, but not limited to, deductions from your salary or other payments due or the sale of sufficient shares acquired pursuant to your Awards; and
|
•
|
you acknowledge that even if you have clicked on the “ACCEPT” box where indicated, the Company or your employer may still require you to sign a paper copy of this Election (or a substantially similar form) if the Company determines such is necessary to give effect to the Election.
|
A.
|
The individual who has obtained authorised access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive restricted stock units (“Awards”) pursuant to the Analog Devices, Inc. Amended and Restated 2006 Stock Incentive Plan (the “Plan”), and
|
B.
|
Analog Devices, Inc. of One Technology Way, Norwood, Massachusetts 02062, U.S.A. (the “Company”), which may grant Awards under the Plans and is entering into this Election on behalf of the Employer.
|
1.
|
Introduction
|
1.1
|
This Election relates to all Awards granted to the Employee or assumed and converted under the Plan up to the termination dates of the Plans.
|
1.2
|
In this Election the following words and phrases have the following meanings:
|
(a)
|
“Chargeable Event” means, in relation to the Awards:
|
(i)
|
the acquisition of securities pursuant to restricted stock units and/or stock purchase rights (within section 477(3)(a) of ITEPA);
|
(ii)
|
the assignment (if applicable) or release of the restricted stock units in return for consideration (within section 477(3)(b) of ITEPA);
|
(iii)
|
the receipt of a benefit in connection with the restricted stock units, other than a benefit within (i) or (ii) above (within section 477(3)(c) of ITEPA);
|
(iv)
|
post-acquisition charges relating to the shares acquired pursuant to the restricted stock units (within section 427 of ITEPA); and/or
|
(v)
|
post-acquisition charges relating to the shares acquired pursuant to the restricted stock units (within section 439 of ITEPA).
|
(b)
|
“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.
|
(c)
|
“SSCBA” means the Social Security Contributions and Benefits Act 1992.
|
1.3
|
This Election relates to the employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise on the occurrence of a Chargeable Event in respect of the Awards pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA.
|
1.4
|
This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
|
1.5
|
This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value).
|
2.
|
The Election
|
3.
|
Payment of the Employer’s Liability
|
3.1
|
The Employee hereby authorises the Company and/or the Employer to collect the Employer’s Liability from the Employee at any time after the Chargeable Event:
|
(i)
|
by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Chargeable Event; and/or
|
(ii)
|
directly from the Employee by payment in cash or cleared funds; and/or
|
(iii)
|
by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the Awards; and/or
|
(iv)
|
by any other means specified in the applicable award agreement.
|
3.2
|
The Company hereby reserves for itself and the Company the right to withhold the transfer of any securities related to the Awards to the Employee until full payment of the Employer’s Liability is received.
|
3.3
|
The Company agrees to remit the Employer’s Liability to HM Revenue & Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Chargeable Event occurs (or within 17 days after the end of the UK tax month during which the Chargeable Event occurs if payments are made electronically).
|
4.
|
Duration of Election
|
4.1
|
The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due.
|
4.2
|
This Election will continue in effect until the earliest of the following:
|
(i)
|
the Employee and the Company agree in writing that it should cease to have effect;
|
(ii)
|
on the date the Company serves written notice on the Employee terminating its effect;
|
(iii)
|
on the date HM Revenue & Customs withdraws approval of this Election; or
|
(iv)
|
after due payment of the Employer’s Liability in respect of the entirety of the Awards to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms.
|
4.3
|
This Election will continue in force regardless of whether the Employee ceases to be an employee of the Employer.
|
/s/ Kevin P. Lanouette
|
|
|
|
Kevin P. Lanouette
|
|
|
|
Assistant General Counsel
|
|
|
|
Registered Office:
|
Unit 3 Horizon Business Village, 1 Brooklands Road, Weybridge, Surrey, KT13 OTJ
|
Company Registration Number:
|
895439
|
Corporation Tax Reference:
|
6873689030216A
|
PAYE Reference:
|
120/A4055
|
Registered Office:
|
3 The Listons, Liston Road, Marlow, Buckinghamshire, SL7 1FD
|
Company Registration Number:
|
2149602
|
Corporation Tax Reference:
|
120PA00148447
|
PAYE Reference:
|
120/L30589
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
Date: May 22, 2019
|
|
/s/ VINCENT ROCHE
|
|
|
Vincent Roche
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Analog Devices, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
Date: May 22, 2019
|
|
/s/ Prashanth Mahendra-Rajah
|
|
|
Prashanth Mahendra-Rajah
|
|
|
Senior Vice President, Finance
|
|
|
and Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
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.
|
Date: May 22, 2019
|
|
/s/ VINCENT ROCHE
|
|
|
Vincent Roche
|
|
|
Chief Executive Officer
|
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.
|
Date: May 22, 2019
|
|
/s/ Prashanth Mahendra-Rajah
|
|
|
Prashanth Mahendra-Rajah
|
|
|
Chief Financial Officer
|