Delaware | 04-2302115 | |
(State or other jurisdiction of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
20 Sylvan Road, Woburn, Massachusetts
(Address of principal executive offices) |
01801
(Zip Code) |
Registrants telephone number, including area code: | (781) 376-3000 |
2
| CDMA (Code Division Multiple Access): a method for transmitting simultaneous signals over a shared portion of the spectrum. | ||
| DigRF: the digital interface standard that defines an efficient physical interconnection between baseband and RF integrated circuits for digital cellular terminals. | ||
| EDGE (Enhanced Data rates for Global Evolution): an enhancement to the GSM and TDMA wireless communications systems that increases data throughput to 384Kpbs. | ||
| GPRS (General Packet Radio Service): an enhancement to the GSM mobile communications system that supports data packets. | ||
| GSM (Global System for Mobile Communications): a digital cellular phone technology based on TDMA that is the predominant system in Europe, but is also used around the world. | ||
| PHS (Personal Handyphone System): a TDMA-based cellular phone system introduced in Japan in mid 1995. | ||
| TD-SCDMA (Time Division Synchronous Code Division Multiple Access): a 3G mobile communications standard, being pursued in the Peoples Republic of China by the CATT. | ||
| WCDMA (Wideband CDMA): a 3G technology that increases data transmission rates in GSM systems by using the CDMA air interface instead of TDMA. | ||
| WLAN (Wireless Local Area Network): a type of local-area network that uses high-frequency radio waves rather than wires to communicate between nodes. |
| our plans to develop and market new products, enhancements or technologies and the timing of these development programs; | ||
| our estimates regarding our capital requirements and our needs for additional financing; | ||
| our estimates of expenses and future revenues and profitability; | ||
| our estimates of the size of the markets for our products and services; | ||
| the rate and degree of market acceptance of our products; and | ||
| the success of other competing technologies that may become available. |
3
4
5
6
|
CDMA RF Subsystems | Amplifiers | ||
|
DCR Transceivers | Attenuators | ||
|
GPRS RF Subsystems | Chip Capacitors | ||
|
GSM/GPRS/EDGE Power Amplifiers | Diodes | ||
|
Helios DigRF Subsystem | Directional Couplers/Detectors | ||
|
Helios EDGE RF Subsystems | Hybrids | ||
|
Intera Front-End Modules | Infrastructure RF Subsystems | ||
|
Lynx EDGE System Platforms | Phase Shifters | ||
|
Pegasus GPRS System Platforms | Power Dividers/Combiners | ||
|
PHS System Solutions | Receivers | ||
|
SPR Solutions | Switches | ||
|
TD-SCDMA Power Amplifiers | Synthesizers/PLLs | ||
|
WCDMA/CDMA Power Amplifiers | Technical Ceramics | ||
|
WCDMA FEMs | Transmitters | ||
|
WCDMA Transceivers | WLAN Front-End Modules |
| DCR Transceiver (Tx/Rx): encompasses the complete RF transmit and receive functions. | ||
| Front-End Modules (FEM) : power amplifiers that are integrated with switches, diplexers, filters and other components to create a single package front-end solution. | ||
| Power Amplifiers (PA) : the module that strengthens the signal so that it has sufficient energy to reach a base station. | ||
| RF Subsystems/Single Package Radio (SPR) Solution: combines the transceiver, the PA and associated controller, surface acoustic wave (SAW) filters, and a switchplexer into a single, multi chip module (MCM) package. | ||
| System Platforms: incorporates all RF devices referenced above, as well as baseband processors that handle mixed-signal functions (converting analog signals to digital) and ARM/DSP digital devices that act as the central processor. |
7
| Attenuators: A circuit that allows a known source of power to be reduced by a predetermined factor (usually expressed as decibels). | ||
| Capacitors: a passive electronic component that stores energy in the form of an electrostatic field. | ||
| Ceramic: material used in semiconductors which contain transition metal oxides that are II-VI semiconductors, such as zinc-oxide. | ||
| Diodes: semiconductor devices that pass current in one direction only. | ||
| Directional Coupler: a transmission coupling device for separately sampling the forward or backward wave in a transmission line. | ||
| Directional Detector: intended for use in power management applications. | ||
| Hybrid: monolithic circuitry that is 100% passive and offers low loss, high isolation and phase/amplitude balance. | ||
| Phase Shifter: achieves its distinct sound by creating one or more notches in the frequency domain that eliminate sounds at the notch frequencies. | ||
| PLL (Phase-Locked Loop): is a closed-loop feedback control system that maintains a generated signal in a fixed phase relationship to a reference signal. | ||
| Power Combiner: used for connecting more than one antenna to a single radio. | ||
| Power Divider: passive devices designed to combine multiple antennas in a stacked antenna system, while providing a constant 50 ohm impedance over the bandwidth chosen. | ||
| Switch : the component that performs the change between the transmit and receive function, as well as the band function for cellular handsets. | ||
| Synthesizer: designed for tuning systems and is optimized for low phase noise with comparison frequencies. |
| Broad multimode radio and precision analog product portfolio | |
| Market leadership in key product segments | |
| Solutions for all air interface standards, including GSM/GPRS/EDGE, WCDMA, CDMA2000 and WLAN | |
| Analog, Radio Frequency (RF), mixed signal and digital design capabilities | |
| Access to all key process technologies: GaAs HBT, PHEMT, BiCMOS, SiGE, CMOS and RF CMOS | |
| World-class manufacturing capabilities and scale | |
| Superior level of customer service and technical support | |
| Commitment to technology innovation |
8
9
10
Location | Owned/Leased | Primary Function | ||
Woburn, Massachusetts
|
Owned | Corporate headquarters and manufacturing | ||
Irvine, California
|
Leased | Office space and design center | ||
Newbury Park, California
|
Owned | Manufacturing and office space | ||
Newbury Park, California
|
Leased | Design center | ||
Adamstown, Maryland
|
Owned | Manufacturing and office space | ||
Mexicali, Mexico
|
Owned | Assembly and test facility | ||
Haverhill, Massachusetts
|
Owned | Vacant building and land (under contract) |
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
High
Low
$
10.91
$
8.74
8.99
6.07
7.94
5.07
8.38
6.67
$
11.25
$
7.40
12.45
9.13
12.68
7.98
10.04
6.98
Table of Contents
Fiscal Year
2005
2004
2003
2002 (1)
2001 (1)
$
792,371
$
784,023
$
617,789
$
457,769
$
260,451
484,599
470,807
370,940
329,701
311,503
307,772
313,216
246,849
128,068
(51,052
)
152,215
152,633
156,077
133,614
111,053
103,070
97,522
85,432
51,074
51,267
2,354
3,043
4,386
12,929
15,267
65,500
17,366
34,493
116,321
88,876
257,639
270,564
280,388
379,438
266,463
50,133
42,652
(33,539
)
(251,370
)
(317,515
)
(14,597
)
(17,947
)
(21,403
)
(4,227
)
5,453
1,691
1,317
(56
)
210
40,989
26,396
(53,625
)
(255,653
)
(317,305
)
15,378
3,984
652
(19,589
)
1,619
25,611
22,412
(54,277
)
(236,064
)
(318,924
)
(397,139
)
$
25,611
$
22,412
$
(451,416
)
$
(236,064
)
$
(318,924
)
$
0.16
$
0.15
$
(0.39
)
$
(1.72
)
(2.85
)
$
0.16
$
0.15
$
(3.24
)
$
(1.72
)
$
337,747
$
282,613
$
249,279
$
79,769
$
60,540
1,187,843
1,168,806
1,090,668
1,346,912
314,287
237,044
235,932
280,677
184,309
3,806
792,564
751,623
673,175
1,014,976
287,661
Table of Contents
(1)
The Merger was completed on June 25, 2002. Financial statements for periods prior to
June 26, 2002, represent Washington/Mexicalis combined results and financial condition.
Financial statements for periods after June 25, 2002, represent the consolidated results
and financial condition of Skyworks, the combined company.
(2)
In fiscal 2001, we recorded $58.7 million of inventory write-downs.
(3)
Amounts in fiscal 2005, 2004, and 2003 primarily reflect amortization of current
technology and customer relationships acquired in the Merger. Amounts in fiscal 2002 and
2001 primarily reflect amortization of goodwill and other intangible assets related to the
acquisition of Philsar Semiconductor, Inc. in fiscal 2000.
(4)
In fiscal 2002, we recorded purchased in-process research and development charges of
$65.5 million related to the Merger.
(5)
In fiscal 2004, we recorded special charges of $17.4 million, principally related to
the impairment of legacy technology licenses related to our cellular systems business and
certain restructuring charges. In fiscal 2003, we recorded special charges of $34.5
million, principally related to the impairment of assets related to our infrastructure
products and certain restructuring charges. In fiscal 2002, we recorded special charges of
$116.3 million, principally related to the impairment of the assembly and test machinery
and equipment and the related facility in Mexicali, Mexico, and the write-off of goodwill
and other intangible assets related to Philsar Semiconductor, Inc. In fiscal 2001, we
recorded special charges of $88.9 million, principally related to the impairment of
certain wafer fabrication assets and restructuring activities.
(6)
We adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets, on October 1, 2002. As a result of this adoption, we performed a
transitional evaluation of our goodwill and intangible assets with indefinite lives. Based
on this transitional evaluation, we determined that our goodwill was impaired and recorded
a $397.1 million charge for the cumulative effect of a change in accounting principle in
fiscal 2003.
(7)
Prior to the Merger with Alpha Industries, Inc., Washington/Mexicali had no separate
capitalization. Therefore, a calculation cannot be performed for weighted average shares
outstanding to then calculate earnings per share.
Table of Contents
§
experienced an increase in revenues from our Radio Frequency (RF) products of 16.2% in
aggregate dollars and 21.0% in units shipped from fiscal 2004 to fiscal 2005, tempered
somewhat by a decrease in revenues for our cellular systems products of 13.9% in aggregate
dollars and 7.8% in units shipped;
§
experienced a 1.1% increase in aggregate revenue in fiscal 2005 as compared to fiscal
2004, despite an approximate 20% decline in average selling prices of our more mature
single functionality products and an approximate 5% average selling price decline in our
more highly integrated, complex next generation products. We achieved an 8.3% increase in
overall units sold;
§
experienced a 62.6% decrease in revenues from our assembly and test services area in
fiscal 2005 as compared to fiscal 2004, as we fulfilled our agreement with Conexant and
have exited this product area;
§
experienced a 1.7% decrease in gross profits in fiscal 2005 as compared to fiscal 2004
principally due to product mix shifts, a one-time payment to a customer and continued
additional costs associated with our highly integrated products;
§
reduced overall operating expenses by 4.8% (primarily due to
lower incentive compensation expenses) from fiscal year 2004 and increased operating
income by 17.5% from fiscal year 2004 to 2005;
§
increased revenues from our family of iPAC power amplifiers and Intera transmit
front-end modules in fiscal 2005 as compared to 2004. We also introduced Helios, our
patented and highly innovative EDGE radio solution in fiscal 2005; and
§
Increased cash and short-term investments by $21.3 million while still investing an
additional $38.1 million in capital equipment.
Table of Contents
2005
2004
2003
100.0
%
100.0
%
100.0
%
61.2
60.1
60.0
38.8
39.9
40.0
19.2
19.5
25.3
13.0
12.4
13.8
0.3
0.4
0.7
2.2
5.6
32.5
34.5
45.4
6.3
5.4
(5.4
)
(1.8
)
(2.3
)
(3.5
)
0.7
0.2
0.2
5.2
3.3
(8.7
)
2.0
0.5
0.1
3.2
2.8
(8.8
)
(64.2
)
3.2
%
2.8
%
(73.0
)%
Years Ended September 30,
2005
Change
2004
Change
2003
(in thousands)
$
792,371
1.1
%
$
784,023
26.9
%
$
617,789
Table of Contents
Years Ended September 30,
2005
Change
2004
Change
2003
$
307,772
(1.7
)%
$
313,216
26.9
%
$
246,849
38.8
%
39.9
%
40.0
%
Years Ended September 30,
2005
Change
2004
Change
2003
$
152,215
(0.3
)%
$
152,633
(2.2
)%
$
156,077
19.2
%
19.5
%
25.3
%
Years Ended September 30,
2005
Change
2004
Change
2003
$
103,070
5.7
%
97,522
14.2
%
$
85,432
13.0
%
12.4
%
13.8
%
Table of Contents
Years Ended September 30,
2005
Change
2004
Change
2003
$
2,354
(22.6
)%
$
3,043
(30.6
)%
$
4,386
0.3
%
0.4
%
0.7
%
Years Ended September 30,
2005
Change
2004
Change
2003
$
(100.0
)%
$
17,366
(49.7
)%
$
34,493
0.0
%
2.2
%
5.6
%
Table of Contents
Table of Contents
Years Ended September 30,
2005
Change
2004
Change
2003
$
14,597
(18.7
)%
$
17,947
(16.1
)%
$
21,403
1.8
%
2.3
%
3.5
%
Years Ended September 30,
2005
Change
2004
Change
2003
$
5,453
222.5
%
$
1,691
28.4
%
$
1,317
0.7
%
0.2
%
0.2
%
Years Ended September 30,
2005
Change
2004
Change
2003
$
15,378
286.0
%
$
3,984
511.0
%
$
652
2.0
%
0.5
%
0.1
%
Table of Contents
Years Ended September 30,
2005
Change
2004
Change
2003
$
$
100.0
%
$
(397,139
)
Years Ended September 30
(in thousands)
2005
2004
2003
$
123,505
$
161,506
$
53,358
54,197
91,913
(72,052
)
(66,424
)
(141,044
)
(44,282
)
5,244
11,130
224,482
$
116,522
$
123,505
$
161,506
Table of Contents
Table of Contents
Payments Due By Period
Less Than 1
Obligation
Total
Year
1-3 years
3-5 Years
Thereafter
$
280,000
$
50,000
$
230,000
$
$
30,838
6,980
11,385
10,167
2,306
9,372
4,298
5,074
$
320,210
$
61,278
$
246,459
$
10,167
$
2,306
Table of Contents
Table of Contents
Table of Contents
time-to-market,
timely new product innovation,
product quality, reliability and performance,
product price,
features available in products,
compliance with industry standards,
strategic relationships with customers, and
access to and protection of intellectual property.
long presence in key markets,
name recognition,
high levels of customer satisfaction,
ownership or control of key technology or intellectual property, and
strong financial, sales and marketing, manufacturing, distribution, technical or other
resources.
Table of Contents
Table of Contents
the lack of ensured wafer supply, potential wafer shortages and higher wafer prices,
limited control over delivery schedules, manufacturing yields, production costs and
quality
assurance, and
the inaccessibility of, or delays in obtaining access to, key process technologies.
the ability to anticipate customer and market requirements and changes in technology and
industry standards,
the ability to obtain capacity sufficient to meet customer demand,
the ability to define new products that meet customer and market requirements,
the ability to complete development of new products and bring products to market on a
timely basis,
the ability to differentiate our products from offerings of our competitors,
overall market acceptance of our products, and
the ability to obtain adequate intellectual property protection for our new products.
Table of Contents
rapid technological developments and product evolution,
rapid changes in customer requirements,
frequent new product introductions and enhancements,
demand for higher levels of integration, decreased size and decreased power
consumption,
short product life cycles with declining prices over the life cycle of the product, and
evolving industry standards.
Table of Contents
increasing our vulnerability to general adverse economic and industry conditions,
limiting our ability to obtain additional financing,
requiring the dedication of a substantial portion of any cash flow from operations to
service
our indebtedness, thereby reducing the amount of cash flow available for other purposes,
including capital expenditures,
limiting our flexibility in planning for, or reacting to, changes in our business and the
industry in which we compete, and
placing us at a possible competitive disadvantage to less leveraged competitors and
competitors that have better access to capital resources.
Table of Contents
currency exchange rate fluctuations,
local economic and political conditions, including social, economic and political
instability,
disruptions of capital and trading markets,
restrictive governmental actions (such as restrictions on transfer of funds and trade
protection measures, including export duties, quotas, customs duties, import or export
controls and tariffs),
changes in legal or regulatory requirements,
natural disasters, acts of terrorism, widespread illness and war,
limitations on the repatriation of funds,
difficulty in obtaining distribution and support,
cultural differences in the conduct of business,
the laws and policies of the United States and other countries affecting trade, foreign
investment and loans, and import or export licensing requirements,
tax laws,
the possibility of being exposed to legal proceedings in a foreign jurisdiction, and
limitations on our ability under local laws to protect or enforce our intellectual
property rights in a particular foreign jurisdiction.
Table of Contents
changes in end-user demand for the products (principally digital cellular handsets)
manufactured and sold by our customers,
the effects of competitive pricing pressures, including decreases in average selling
prices of
our products,
production capacity levels and fluctuations in manufacturing yields,
availability and cost of products from our suppliers,
the gain or loss of significant customers,
our ability to develop, introduce and market new products and technologies on a timely
basis,
new product and technology introductions by competitors,
changes in the mix of products produced and sold,
market acceptance of our products and our customers, and
intellectual property disputes.
Table of Contents
pay substantial damages,
cease the manufacture, import, use, sale or offer for sale of infringing products or
processes,
discontinue the use of infringing technology,
expend significant resources to develop non-infringing technology, and
license technology from the third party claiming infringement, which license may not be
available on commercially reasonable terms.
the steps we take to prevent misappropriation, infringement, dilution or other violation of
our intellectual property or the intellectual property of our customers, suppliers or other
third parties will be successful,
any existing or future patents, copyrights, trademarks, trade secrets or other intellectual
property rights or ours will not be challenged, invalidated or circumvented, or
any of the measures described above would provide meaningful protection.
Table of Contents
issuances of equity securities dilutive to our stockholders,
large one-time write-offs,
the incurrence of substantial debt and assumption of unknown liabilities,
the potential loss of key employees from the acquired company,
amortization expenses related to intangible assets, and
the diversion of managements attention from other business concerns.
the division of our Board of Directors into three classes to be elected on a staggered basis,
one class each year,
the ability of our Board of Directors to issue shares of preferred stock in one or more
series
without further authorization of stockholders,
a prohibition on stockholder action by written consent,
elimination of the right of stockholders to call a special meeting of stockholders,
a requirement that stockholders provide advance notice of any stockholder nominations of
directors or any proposal of new business to be considered at any meeting of stockholders,
a requirement that the affirmative vote of at least 66 2/3 percent of our shares be obtained
to
amend or repeal any provision of our by-laws or the provision of our certificate of
incorporation relating to amendments to our by-laws,
a requirement that the affirmative vote of at least 80% of our shares be obtained to
amend or repeal the provisions of our certificate of incorporation relating to the election and
removal of directors, the classified board or the right to act by written consent,
a requirement that the affirmative vote of at least 80% of our shares be obtained for
business combinations unless approved by a majority of the members of the Board of
Table of Contents
a fair price provision, and
a requirement that the affirmative vote of at least 90% of our shares be obtained to
amend or repeal the fair price provision.
our performance and prospects,
the performance and prospects of our major customers,
the depth and liquidity of the market for our common stock,
investor perception of us and the industry in which we operate,
changes in earnings estimates or buy/sell recommendations by analysts,
general financial and other market conditions, and
domestic and international economic conditions.
Table of Contents
Table of Contents
Table of Contents
Skyworks Solutions, Inc.:
Boston, Massachusetts
December 14, 2005
Table of Contents
September 30,
2005
2004
$
116,522
$
123,505
113,325
85,034
6,013
6,013
171,454
157,772
77,400
79,572
11,268
11,968
495,982
463,864
144,208
143,534
6,630
6,475
493,389
504,493
17,730
19,895
16,052
19,372
13,852
11,173
$
1,187,843
$
1,168,806
$
50,000
$
50,000
72,276
73,405
19,679
36,630
16,280
21,216
158,235
181,251
230,000
230,000
7,044
5,932
395,279
417,183
39,656
39,003
1,327,631
1,312,603
(573,586
)
(599,197
)
(1,137
)
(786
)
792,564
751,623
$
1,187,843
$
1,168,806
Table of Contents
Years Ended September 30,
2005
2004
2003
$
792,371
$
784,023
$
617,789
484,599
470,807
370,940
307,772
313,216
246,849
152,215
152,633
156,077
103,070
97,522
85,432
2,354
3,043
4,386
17,366
34,493
257,639
270,564
280,388
50,133
42,652
(33,539
)
(14,597
)
(17,947
)
(21,403
)
5,453
1,691
1,317
40,989
26,396
(53,625
)
15,378
3,984
652
25,611
22,412
(54,277
)
(397,139
)
$
25,611
$
22,412
$
(451,416
)
$
0.16
$
0.15
$
(0.39
)
(2.85
)
$
0.16
$
0.15
$
(3.24
)
157,453
152,090
139,376
158,857
154,242
139,376
Table of Contents
Par value
Accumulated
Shares of
of
Additional
Other
Total
Common
Common
Paid-in
Accumulated
Comprehensive
Unearned
Stockholders
Stock
Stock
Capital
Deficit
Loss
Compensation
Equity
137,589
$
34,397
$
1,150,856
$
(170,193
)
$
$
(84
)
$
1,014,976
(451,416
)
(451,416
)
(632
)
(632
)
(632
)
(632
)
(452,048
)
9,200
2,300
99,888
102,188
1,769
442
8,607
9,049
84
84
(1,543
)
(1,543
)
46
12
457
469
148,604
37,151
1,258,265
(621,609
)
(632
)
673,175
22,412
22,412
(154
)
(154
)
(154
)
(154
)
22,258
1,690
423
11,251
11,674
5,718
1,429
42,908
44,337
179
179
156,012
39,003
1,312,603
(599,197
)
(786
)
751,623
25,611
25,611
(351
)
(351
)
(351
)
(351
)
25,260
2,452
613
14,932
15,545
161
40
96
136
158,625
$
39,656
$
1,327,631
$
(573,586
)
$
(1,137
)
$
$
792,564
(1)
Represents an adjustment to recapitalization as a result of purchase accounting under a
reverse acquisition, as reported in fiscal 2002, based on final valuations derived in
fiscal 2003.
Table of Contents
Years Ended September 30,
2005
2004
2003
$
25,611
$
22,412
$
(451,416
)
37,277
35,829
36,941
11,104
1,022
2,354
3,043
4,386
1,596
2,176
2,123
10,437
8,162
7,482
28
34
1,802
3,253
3,055
351
10,853
425,407
5,127
377
1,156
(18,809
)
(13,882
)
(50,998
)
2,172
(21,404
)
(2,525
)
(3,706
)
3,794
6,369
(1,129
)
23,036
5,019
(21,118
)
13,406
(58,149
)
54,197
91,913
(72,052
)
(38,135
)
(59,998
)
(40,294
)
1,223,181
1,049,082
(1,251,470
)
(1,130,128
)
(3,988
)
(66,424
)
(141,044
)
(44,282
)
230,000
102,188
(10,474
)
(701
)
(5,312
)
8,290
41,652
29
(135,139
)
5,244
3,512
1,567
5,244
11,130
224,482
(6,983
)
(38,001
)
108,148
123,505
161,506
53,358
$
116,522
$
123,505
$
161,506
$
1,221
$
2,206
$
517
$
13,030
$
15,845
$
21,061
$
$
45,000
$
$
$
$
45,000
$
$
$
469
Table of Contents
Table of Contents
Accounts receivable consist of amounts due from normal business activities. The Company maintains
allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to make required
payments. If the financial condition
of the Companys customers were to deteriorate, resulting in an impairment of their ability to
make future payments,
additional allowances may be required.
INVENTORIES
Inventories are stated at the lower of cost, determined on a first-in, first-out basis, or market.
The Company provides for estimated obsolescence or unmarketable inventory based upon assumptions
about future demand and market conditions. The recoverability of inventories is assessed through an
on-going review of inventory levels in relation to sales backlog and forecasts,
product marketing plans and product life cycles. When the inventory on hand exceeds the foreseeable
demand (generally in excess of six months), the value of such inventory that is not expected to be
sold at the time of the review is written down. The amount of the write-down is the excess of
historical cost over estimated realizable value (generally zero).
Table of Contents
Once established, these
write-downs are considered permanent adjustments to the cost basis of the excess inventory. If
actual demand and market conditions are less favorable than those projected by management,
additional inventory write-downs may be required. Some or all of the inventories that have been
written-down may be retained and made available for sale. In the event that actual demand is higher
than originally projected, a portion of these inventories may be able to be sold in the future.
Inventories that have been written-down and are identified as obsolete are generally scrapped.
Table of Contents
Table of Contents
Years Ended September 30,
(In thousands, except per share amounts)
2005
2004
2003
$
25,611
$
22,412
$
(451,416
)
(47,183
)
(17,992
)
(4,923
)
79
(70
)
$
(21,563
)
$
4,420
$
(456,339
)
$
0.16
$
0.15
$
(3.24
)
(0.30
)
(0.12
)
(0.03
)
$
(0.14
)
$
0.03
$
(3.27
)
(1)
Reflected in the 2005 pro forma stock-based compensation expense is the effect of
the acceleration of the vesting of certain employee stock options in
September 2005 in the amount of $21.0 million.
Table of Contents
2005
2004
2003
71
%
91
%
95
%
3.9
%
1.9
%
2.5
%
3.5
5.0
4.5
$
4.86
$
3.80
$
2.57
Table of Contents
Accumulated
Other
Pension
Comprehensive
Adjustments
Loss
$
(632
)
$
(632
)
(154
)
(154
)
(786
)
(786
)
(351
)
(351
)
$
(1,137
)
$
(1,137
)
Table of Contents
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Short term available for sale securities:
Cost
Gains
Losses
Value
$
113.3
$
$
$
113.3
$
113.3
$
$
$
113.3
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Short term available for sale securities:
Cost
Gains
Losses
Value
$
85.0
$
$
$
85.0
$
85.0
$
$
$
85.0
Table of Contents
Gross
Gross
Amortized
Unrealized
Unrealized
Market
Long term available for sale securities:
Cost
Gains
Losses
Value
$
230.0
$
$
$
230.0
$
230.0
$
$
$
230.0
September 30,
2005
2004
$
8,080
$
12,176
49,329
50,717
19,991
16,679
$
77,400
$
79,572
September 30,
2005
2004
$
9,423
$
9,423
4,284
4,103
59,586
50,305
317,334
335,572
14,312
5,391
404,939
404,794
(260,731
)
(261,260
)
$
144,208
$
143,534
Table of Contents
Weighted
September 30, 2005
September 30, 2004
Average
Gross
Net
Gross
Net
Amortization
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Period (Years)
Amount
Amortization
Amount
Amount
Amortization
Amount
$
493,389
$
$
493,389
$
504,493
$
$
504,493
10
$
10,550
$
(4,651
)
$
5,899
$
10,550
$
(3,777
)
$
6,773
10
12,700
(4,138
)
8,562
12,700
(2,868
)
9,832
3
122
(122
)
122
(101
)
21
23,372
(8,911
)
14,461
23,372
(6,746
)
16,626
3,269
3,269
3,269
3,269
$
26,641
$
(8,911
)
$
17,730
$
26,641
$
(6,746
)
$
19,895
Years Ended September 30,
2005
2004
2003
$
2,165
$
2,286
$
3,545
Goodwill and Intangible Assets
Developed
Customer
Goodwill
Technology
Relationships
Trademarks
Other
Total
$
505,514
$
10,550
$
12,700
$
3,269
$
122
$
532,155
(1,021
)
(1,021
)
$
504,493
$
10,550
$
12,700
$
3,269
$
122
$
531,134
(11,104
)
(11,104
)
$
493,389
$
10,550
$
12,700
$
3,269
$
122
$
520,030
2006
2007
2008
2009
2010
$
2,144
$
2,144
$
2,144
$
2,144
$
2,144
Table of Contents
September 30,
2005
2004
$
230,000
$
230,000
$
230,000
$
230,000
Fiscal Year
230,000
$
230,000
Years Ended September 30,
2005
2004
2003
$
23,885
$
15,029
$
(59,379
)
17,104
11,367
5,754
$
40,989
$
26,396
$
(53,625
)
Years Ended September 30,
2005
2004
2003
$
367
$
$
(1,032
)
(1,040
)
1,178
837
1,414
513
(203
)
1,414
Table of Contents
Years Ended September 30,
2005
2004
2003
3,761
3,165
(762
)
3,761
3,165
(762
)
11,104
1,022
$
15,378
$
3,984
$
652
Years Ended September 30,
2005
2004
2003
$
14,346
$
9,239
$
(18,769
)
(1,048
)
23
(1,362
)
8,956
1,162
2,113
(5,000
)
(4,600
)
(5,369
)
(1,032
)
(1,040
)
(13,436
)
(2,466
)
25,168
11,104
1,022
1,488
644
(1,129
)
$
15,378
$
3,984
$
652
September 30,
2005
2004
$
4,920
$
5,680
2,004
704
2,919
2,464
1,247
4,027
393
624
(818
)
1,085
1,016
11,750
14,515
(10,665
)
(13,499
)
1,085
1,016
18,474
29,919
7,406
8,240
1,183
1,098
65,936
72,656
21,399
15,076
4,419
5,711
1,506
1,683
Table of Contents
September 30
,
2005
2004
1,136
1,000
121,459
135,383
(105,408
)
(116,010
)
16,051
19,373
$
17,136
$
20,389
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Table of Contents
Weighted average
exercise price of
Shares
shares under plan
31,332
$
19.73
6,372
5.06
(496
)
6.37
(5,328
)
23.38
(6,117
)
20.21
25,763
$
15.44
7,351
9.16
3,377
9.60
(685
)
5.05
(4,043
)
15.61
31,763
$
13.63
4,668
8.47
(935
)
5.57
(3,918
)
13.66
31,578
$
12.99
Weighted average
Shares
exercise price
24,053
$
14.68
17,671
$
17.59
15,141
$
19.03
Weighted
average
Weighted
remaining
average
Weighted
Range of exercise
Number
contractual
outstanding
Options
average exercise
prices
outstanding
life (years)
option price
exercisable
price
4,620
6.9
$
4.64
2,248
$
4.50
5,227
8.7
$
8.31
767
$
7.17
4,680
8.3
$
9.17
4,358
$
9.18
5,094
7.3
$
10.60
4,817
$
10.60
5,687
3.1
$
16.36
5,667
$
16.37
4,619
5.2
$
21.17
4,574
$
21.18
1,651
4.2
$
34.87
1,622
$
35.05
31,578
6.4
$
12.99
24,053
$
14.68
Table of Contents
% of total
common
Number
stock
outstanding
outstanding
22,975
14.5
%
8,603
5.4
%
31,578
19.9
%
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Table of Contents
Pension Benefits
Retiree Medical Benefits
2005
2004
2003
2005
2004
2003
$
1,137
$
969
$
1,075
$
1,238
$
1,210
$
1,046
(1,301
)
(786
)
(632
)
$
(164
)
$
183
$
443
$
1,238
$
1,210
$
1,046
Fiscal Year
$
6,980
6,031
5,354
5,305
4,862
2,306
$
30,838
Table of Contents
Years Ended September 30,
2005
2004
2003
$
$
13,183
$
28,269
4,183
6,224
$
$
17,366
$
34,493
Table of Contents
Workforce
Facility
Reductions
Closings
Total
$
3,685
$
498
$
4,183
(3,530
)
(287
)
(3,817
)
$
155
$
211
$
366
(155
)
(198
)
(353
)
$
$
13
$
13
2003
Workforce
Facility Closings
Reductions
and Other
Total
4,819
$
1,405
$
6,224
(3,510
)
(1,236
)
(4,746
)
$
1,309
$
169
$
1,478
475
475
(1,777
)
(116
)
(1,893
)
$
7
$
53
$
60
(7
)
(53
)
(60
)
$
$
$
Table of Contents
Years Ended September 30,
2005
2004
2003
$
66,429
$
74,105
$
87,691
39,541
51,537
69,559
105,970
125,642
157,250
215,082
206,364
119,385
107,225
188,090
157,772
92,171
69,126
60,449
144,940
64,570
38,983
559,418
528,150
376,589
126,983
130,231
83,950
$
792,371
$
784,023
$
617,789
September 30,
2005
2004
$
85,072
$
81,356
60,594
61,702
5,172
6,951
$
150,838
$
150,009
Table of Contents
Years Ended September 30,
2005
2004
2003
21
%
14
%
11
%
10
%
8
%
7
%
7
%
12
%
15
%
First
Second
Third
Fourth
Quarter (3)
Quarter
Quarter
Quarter (2)
Year
$
220,160
$
190,505
$
191,532
$
190,174
$
792,371
88,019
72,599
77,874
69,280
307,772
13,917
1,244
7,389
3,061
25,611
0.09
0.01
0.05
0.02
0.16
0.09
0.01
0.05
0.02
0.16
$
175,108
$
183,471
$
207,377
$
218,067
$
784,023
69,568
72,204
83,784
87,660
313,216
4,172
(9,421
)
13,030
14,631
22,412
0.03
(0.06
)
0.09
0.09
0.15
0.03
(0.06
)
0.08
0.09
0.15
(1)
Earnings per share calculations for each of the quarters are based on the weighted
average number of shares outstanding and included common stock equivalents in each period.
Therefore, the sums of the quarters do not necessarily equal the full year earnings per
share.
(2)
During the fourth quarter of fiscal 2004, the Company reduced the carrying value of its
deferred tax assets by $3.5 million. This charge primarily originated from foreign
exchange translation errors after establishing the $23.1 million tax benefit recorded in
fiscal 2002 for the impairment of the Companys assembly and test machinery and equipment
in Mexicali, Mexico immediately following completion of the Merger. The cumulative effect
of these errors was reported
Table of Contents
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
Year
$
(280
)
$
(62
)
$
(742
)
$
(72
)
$
(1,156
)
(0.01
)
$
62
$
(1,153
)
$
453
$
(1,414
)
$
(2,052
)
(0.01
)
(0.01
)
(0.01
)
$
$
$
$
(256
)
$
(256
)
(1)
During the first quarter of fiscal 2005, the Company reduced the carrying value of its
deferred tax assets by $2.2 million. This charge resulted from a reduction of the
statutory income tax rate in Mexico. This reduction is being reported in the provision for
income taxes line of the statement of operations in the first quarter of fiscal 2005.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.
ITEM 9A.
CONTROLS AND PROCEDURES.
Table of Contents
Skyworks Solutions, Inc.:
Boston, Massachusetts
December 14, 2005
Table of Contents
ITEM 9B.
OTHER INFORMATION.
ITEM 10.
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Name
Age
Title
55
Chairman of the Board
48
President, Chief Executive
Officer and Director
60
Vice President and Chief
Financial Officer
45
Senior Vice President and
General Manager, Mobile
Platforms
39
Senior Vice President, Sales
and Marketing
60
Vice President, Human
Resources
45
Vice President and General
Manager, Linear Products
49
Vice President, General
Counsel and Secretary
45
Executive Vice President
46
Director
59
Director
47
Director
49
Director
71
Director
44
Director
67
Director
Table of Contents
Table of Contents
Table of Contents
Long-Term
Compensation Awards
Annual Compensation
Restricted
Securities
Name and Principal
Fiscal
Stock
Underlying
All Other
Position
Year
Salary
Bonus
Awards($)(1)
Options(#)
Compensation(2)
2005
$
549,800
$
$
391,940
274,254
$
10,804
2004
$
527,539
$
1,060,000
500,000
$
12,608
2003
$
480,000
$
$
9,548
2005
$
342,700
$
$
92,222
64,530
$
9,464
2004
$
329,646
$
397,000
210,000
(3)
$
13,397
2003
$
307,615
$
$
6,890
2005
$
298,000
$
$
92,222
64,530
$
9,445
2004
$
278,769
$
336,000
110,000
$
8,298
2003
$
259,423
$
115,000
(4)
$
7,315
Table of Contents
Long-Term
Compensation Awards
Annual Compensation
Restricted
Securities
Name and Principal
Fiscal
Stock
Underlying
All Other
Position
Year
Salary
Bonus
Awards($)(1)
Options(#)
Compensation(2)
2005
$
336,700
$
$
92,222
64,530
$
11,716
2004
$
237,500
$
390,000
280,000
(6)
$
6,413
2003
$
$
$
2005
$
318,900
$
$
92,222
64,530
$
46,590
(7)
2004
$
295,385
$
360,000
100,000
$
22,039
(7)
2003
$
117,288
$
60,000
(7)
225,000
(6)
$
4,165
(1)
Amounts shown represent the dollar value of the restricted stock awards based on the value of
the Companys common stock on the date of grant. All grants of restricted stock vest 25% per
year on each of the first four anniversaries of the grant date and were made under the
Companys 2005 Long-Term Incentive Plan. On May 10, 2005, Mr. Aldrich received a grant of
75,373 shares of restricted stock and Messrs. Barber, Griffin, Kline, and Waters each received
a grant of 17,735 shares of restricted stock. The dollar value shown above with respect to
each of the Named Executives is based upon the closing price of the Companys common stock
($5.20) on May 10, 2005. As of September 30, 2005, the aggregate number of shares of
restricted stock held by each of the Named Executives, and the dollar value of such shares,
was as follows: Mr. Aldrich, 75,373 shares ($529,118); Mr. Barber, 17,735 shares ($124,500);
Mr. Griffin, 17,735 shares ($124,500); Mr. Kline, 17,735 shares ($124,500); and Mr. Waters,
17,735 shares ($124,500). The dollar values are based upon the closing price of the Companys
common stock ($7.02) on September 30, 2005.
(2)
All Other Compensation includes the Companys contributions to each Named Executives
401(k) plan account, the cost of group term life insurance premiums, and de minimis service
awards.
(3)
Mr. Barber received an annual stock option grant to purchase 110,000 shares in January 2004,
and a one-time stock option grant to purchase 100,000 shares in connection with his promotion
to Senior Vice President and General Manager, RF Solutions in November 2003.
(4)
As an incentive for joining the Company in August 2001, Mr. Griffin was guaranteed a one-time
bonus of $115,000, which was paid during fiscal 2003.
(5)
Mr. Kline joined the Company as an executive officer on January 5, 2004.
(6)
As an incentive for joining the Company, Messrs. Kline and Waters received one-time new hire
stock option grants to purchase 280,000 shares and 225,000 shares, respectively.
(7)
Mr. Waters joined the Company on April 17, 2003, and was appointed an executive officer on
February 6, 2004. As an incentive for joining the Company, Mr. Waters received a sign on bonus
of $60,000. Mr. Waters also received $37,413 and $9,591 in relocation reimbursements in fiscal
years 2005 and 2004, respectively, which is included in All Other Compensation.
Individual Grants
Percent of
Total
Number
Options
of Securities
Granted to
Underlying
Employees
Potential Realizable Value at
Options
in Fiscal
Exercise or Base
Assumed Annual Rates of Stock
Granted
Year
Price
Price Appreciation for Option Term
Name
(#)
(%)
($ / Share)
Expiration Date
5%
10%
274,254
5.9
$
8.93
11/10/2014
$
1,540,218
$
3,903,216
64,530
1.4
$
8.93
11/10/2014
$
362,402
$
918,399
64,530
1.4
$
8.93
11/10/2014
$
362,402
$
918,399
64,530
1.4
$
8.93
11/10/2014
$
362,402
$
918,399
64,530
1.4
$
8.93
11/10/2014
$
362,402
$
918,399
Table of Contents
AND
FISCAL YEAR END OPTION VALUES
Number of Securities
Value of Unexercised
Shares
Underlying
In-The-Money
Acquired On
Value
Unexercised Options at
Options at
Exercise
Realized
September 30, 2005 (#)
September 30, 2005 ($)
Name
(#)
($)
Exercisable
Unexercisable
Exercisable
Unexercisable
50,000
$
385,410
1,364,000
349,254
$
569,170
$
152,250
$
287,564
158,280
$
114,188
$
38,063
$
297,500
77,030
$
76,125
$
25,375
$
70,000
274,530
$
$
$
212,500
177,030
$
191,250
$
191,250
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Number of Shares
Names and Addresses of Beneficial Owners(1)
Beneficially Owned(2)
Percent of Class
10,659,803
6.70
%
1,717,935
(4)
1.10
%
381,766
(4)
(*
)
15,000
(*
)
391,043
(5)
(*
)
1,504,290
(5)
1.00
%
150,000
(*
)
383,545
(4)
(*
)
423,287
(*
)
210,615
(4)(6)
(*
)
122,736
(*
)
0
(*
)
107,600
(*
)
313,151
(4)
(*
)
6,203,295
(4)(5)(6)
3.90
%
*
Less than 1%
(1)
Unless otherwise noted, each persons address is the address of the Companys principal
executive offices at Skyworks Solutions, Inc., 20 Sylvan Road, Woburn, MA 01801 and
stockholders have sole voting and investment power with respect to shares, except to the
extent such power may be shared by a spouse or otherwise subject to applicable community
property laws. The address of Delaware Management Holdings, as set forth on Schedule 13G filed
by Delaware Management Holdings with the SEC on February 9, 2005, is 2005 Market Street,
Philadelphia, Pennsylvania 19103.
(2)
Includes the number of shares of Company common stock subject to stock options held by that
person that are currently exercisable or will become exercisable within sixty (60) days of
November 15, 2005 (the Current Options), as follows: Aldrich 1,432,564 shares under
Current Options; Barber 328,697 shares under Current Options; Beebe 15,000 shares under
Current Options; Beguwala 379,010 shares under Current Options; Decker 1,452,960 shares
under Current Options; Furey 150,000 shares under Current Options; Griffin 313,633 shares
under Current Options; Iyer 417,205 shares under Current Options; Kline 156,133 shares
under Current Options; Leonard 75,000 shares under Current Options; McLachlan 105,000
shares under Current Options; Waters 228,633 shares under Current Options; directors and
executive officers as a group (16 persons) 5,431,209 shares under Current Options.
(3)
Consists of shares beneficially owned by Delaware Management Holdings, Inc., a registered
investment advisor wholly-owned by Delaware Management Business Trust. Delaware Management
Business Trust is a wholly-owned subsidiary of Lincoln National Corp. Delaware Management
Holdings, Inc. may be deemed to share beneficial ownership with the various Delaware
Investments Family of Funds. Of the shares beneficially owned, Delaware Management Holdings,
Inc. and Delaware Management Business Trust (through its ownership Delaware Management Holdings,
Inc.) have sole voting power with respect to 10,610,883 shares, sole disposition power with
respect to 10,653,903 shares, and shared disposition
Table of Contents
(4)
Includes shares held in the Companys 401(k) savings plan.
(5)
Includes shares held in savings plan(s) of Conexant Systems, Inc., and/or Rockwell
Automation, Inc., resulting from the distribution of Skyworks shares for shares of Conexant
Systems, Inc. held in those plans in connection with the merger of the wireless communications
business of Conexant Systems, Inc. with Alpha Industries, Inc. on June 25, 2002.
(6)
Includes 250 shares of Company common stock held in trust for the benefit of other persons,
as to all of which Mr. Kline disclaims beneficial ownership.
-
the 1986 Long-Term Incentive Plan,
-
the 1994 Non-Qualified Stock Option Plan
-
the 1996 Long-Term Incentive Plan
-
the Directors 1997 Non-Qualified Stock Option Plan
-
the 1999 Employee Long-Term Incentive Plan
-
the Directors 2001 Stock Option Plan
-
the Non-Qualified Employee Stock Purchase Plan
-
the 2002 Employee Stock Purchase Plan
-
the Washington Sub, Inc. 2002 Stock Option Plan and
-
the 2005 Long-Term Incentive Plan.
A description of the material features of each such plan is provided below under the headings 1999
Employee Long-Term Incentive Plan, Washington Sub, Inc. 2002 Stock Option Plan and
Non-Qualified Employee Stock Purchase Plan.
Number of Securities
Remaining Available for
Number of Securities
Weighted-Average
Future Issuance Under
to be Issued Upon
Exercise Price of
Equity Compensation
Exercise of Outstanding
Outstanding
Plans (Excluding
Options, Warrants,
Options, Warrants
Securities Reflected
Plan Category
and Rights
and Rights
in Column (a))
(a)
(b)
(c)
9,119,911
$
15.16
5,172,699
(1)
22,457,595
$
12.11
3,242,660
(2)
31,577,506
(3)
$
12.99
8,415,359
(1)
No further grants will be made under the 1986 Long-Term Incentive Plan, the 1994
Non-Qualified Stock Option Plan and the Directors 1997 Non-Qualified Stock Option Plan.
(2)
No further grants may be made under the Washington Sub Inc. 2002 Stock Option Plan.
(3)
Includes 8,602,253 options held by non-employees (excluding directors).
Table of Contents
Table of Contents
Fiscal Year
Fiscal Year
Fee Category
2005
% of Total
2004
% of Total
$
615,900
47
%
$
579,000
87
%
684,500
52
%
0
%
$
1,300,400
99
%
$
579,000
87
%
15,250
1
%
21,220
3
%
0
%
65,000
10
%
3,000
0
%
1,350
0
%
$
1,318,650
100
%
$
666,570
100
%
(1)
Audit fees consist of fees for the audit of our financial statements, the review of the
interim financial statements included in our quarterly reports on Form 10-Q, and other
professional services provided in connection with statutory and regulatory filings or
engagements. In 2005 audit fees also included fees for services incurred in connection with
rendering an opinion under Section 404 of the Sarbanes Oxley Act.
(2)
Audit related fees consist of fees for assurance and related services that are reasonably
related to the performance of the audit and the review of our financial statements and which
are not reported under Audit Fees. These services relate to the employee benefit audit,
registration statement filings for financing activities and consultations concerning financial
accounting and reporting standards.
(3)
Tax fees consist of fees for tax compliance, tax advice and tax planning services. Tax
compliance services, which relate to preparation or review of original and amended tax
returns, claims for refunds and tax payment-planning services, accounted for $0 and $65,000 of
the total tax fees for fiscal year 2005 and 2004, respectively. Tax advice and tax planning
services relate to assistance with tax audits.
(4)
All other fees for fiscal year 2005 and 2004 consist of licenses for accounting research
software.
Table of Contents
Index to Financial Statements
Page number in this report
Report of Independent Registered Public Accounting Firm
Page 38
Consolidated Balance Sheets at September 30, 2005 and 2004
Page 39
Page 40
Page 41
Consolidated Statements of Cash Flows for the Years Ended
September 30, 2005, 2004 and 2003
Page 42
Notes to Consolidated Financial Statements
Pages 43 through 65
The schedule listed below is filed as part of this Annual Report on Form 10-K:
Page number in this report
Schedule II-Valuation and Qualifying Accounts
Page 83
3.
The Exhibits listed in the Exhibit Index immediately preceding the Exhibits are filed
as a part of this Annual Report on Form 10-K.
(b)
Exhibits
The exhibits required by Item 601 of Regulation S-K are filed herewith and incorporated by
reference herein. The response to this portion of Item 15 is submitted under Item 15 (a)
(3).
Table of Contents
Registrant
By:
/s/ DAVID J. ALDRICH
David J. Aldrich
Chief Executive Officer
President
Director
Table of Contents
Signature and Title
President and Director (principal
executive officer)
Vice President (principal accounting and
financial officer)
Signature and Title
Table of Contents
(In thousands)
Changed to
Cost and
Ending
Description
Beginning Balance
Expenses
Deductions
Misc.
Balance
$
1,324
$
1,156
$
(501
)
$
$
1,979
$
8,516
$
3,624
$
(7,131
)
$
$
5,009
$
20,618
$
9,577
$
(4,890
)
$
$
25,305
$
1,979
$
377
$
(369
)
$
$
1,987
$
5,009
$
9,200
$
(9,300
)
$
$
4,909
$
25,305
$
535
$
(12,105
)
$
$
13,735
$
1,987
$
5,127
$
(1,299
)
$
$
5,815
$
4,909
$
4,986
$
(6,884
)
$
48
$
3,059
$
13,735
$
11,482
$
(13,238
)
$
$
11,979
Table of Contents
Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Herewith
Agreement and Plan of Reorganization, dated as of
December 16, 2001, as amended as of April 12, 2002, by
and among the Company, Washington Sub, Inc. and
Conexant Systems, Inc.
S-4
333-83768
2.1
5/10/2002
Contribution and Distribution Agreement, dated as of
December 16, 2001, as amended as of June 25, 2002, by
and between Washington Sub, Inc. the Company and
Conexant Systems, Inc.
8-K
001-5560
2.2
6/28/2002
Mexican Stock Purchase Agreement, dated as of June 25,
2002, by and between the Company and Conexant Systems,
Inc.
8-K
001-5560
2.3
6/28/2002
Amended and Restated Mexican Asset Purchase Agreement,
dated as of June 25, 2002, by and between the Company
and Conexant Systems, Inc.
8-K
001-5560
2.4
6/28/2002
U.S. Asset Purchase Agreement, dated as of December 16,
2001 by and between the Company and Conexant Systems,
Inc.
8-K
001-5560
2.5
6/28/2002
Amended and Restated Certificate of Incorporation
10-K
001-5560
3.A
12/23/2002
Second Amended and Restated By-laws
10-K
001-5560
10.2
12/23/2002
Specimen Certificate of Common Stock
S-3
333-92394
4
7/15/2002
Form of 4.75% Convertible Subordinated Note of the
Company
10-K
001-5560
4.D
12/23/2002
Indenture, dated as of November 20, 2002, by and
between the Company and Wachovia Bank, N.A. (as
Trustee)
10-K
001-5560
4.E
12/23/2002
First Supplemental Indenture dated as of January 15,
2003 between Skyworks Solutions, Inc. and Wachovia
Bank, N.A. (as Trustee)
S-3
001-5560
4.03
1/16/2003
Skyworks Solutions, Inc., 1986 Long-Term Incentive Plan
as amended
X
Skyworks Solutions, Inc., Long-Term Compensation Plan
dated September 24, 1990; amended March 28, 1991; and
as further amended October 27, 1994
X
Skyworks Solutions, Inc. 1994 Non-Qualified Stock
Option Plan for Non-Employee Directors
X
Skyworks Solutions, Inc. Executive Compensation Plan
dated January 1, 1995 and Trust for the Skyworks
Solutions, Inc. Executive Compensation Plan dated
January 3, 1995
X
Table of Contents
Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Herewith
Skyworks Solutions, Inc. 1997 Non-Qualified Stock
Option Plan for Non-Employee Directors
X
Skyworks Solutions, Inc. 1996 Long-Term Incentive Plan
10-K
001-5560
10.M
6/29/2001
Skyworks Solutions, Inc. Directors 2001 Stock Option
Plan
10-Q
001-5560
10.N
11/14/2001
Skyworks Solutions, Inc. 1999 Employee Long-Term
Incentive Plan
10-K
001-5560
10.L
12/23/2002
Washington Sub Inc., 2002 Stock Option Plan
S-3
333-92394
99.A
7/15/2002
Skyworks Solutions, Inc. Non-Qualified Employee Stock
Purchase Plan
10-K
001-5560
10.N
12/23/2002
Form of Shareholders Agreement, dated as of December
16, 2001, entered into between each of the directors
and certain executive officers of the Company as of the
date thereof and Conexant Systems, Inc.
S-4
333-83768
10
5/3/2002
Registration Rights Agreement, dated as of November 12,
2002, by and among the Company and Credit Suisse First
Boston (as representative for the several purchasers)
10-K
001-5560
10.AA
12/23/2002
2002 Skyworks Solutions, Inc. Employee Stock Purchase
Plan
10-K
001-5560
10.CC
12/23/2002
Credit and Security Agreement, dated as of July 15,
2003, by and between Skyworks USA, Inc. and Wachovia
Bank, N.A.
10-Q
001-5560
10.A
8/11/2003
Servicing Agreement, dated as of July 15, 2003, by and
between the Company and Skyworks USA, Inc.
10-Q
001-5560
10.B
8/11/2003
Receivables Purchase Agreement, dated as of July 15,
2003, by and between Skyworks USA, Inc. and the
Company.
10-Q
001-5560
10.C
8/11/2003
Terms Agreement, dated as of September 9, 2003, by and
among the Company and Credit Suisse First Boston.
8-K
001-5560
1.1
9/10/2003
Form of Notice of Grant of Stock Option for the
Companys 1996 Long-Term Incentive Plan
8-K
001-5560
10.1
11/17/2004
Fiscal 2006 Executive Incentive Compensation Plan
X
Skyworks Solutions, Inc. 2005 Long-Term Incentive Plan
8-K
001-556
10.1
5/04/2005
Skyworks Solutions, Inc. Directors 2001 Stock Option
Plan
8-K
001-556
10.2
5/04/2005
Form of Notice of Grant of Stock Option for the
Companys 2001 Directors Plan
8-K
001-556
10.3
5/04/2005
Form of Notice of Stock Option Agreement under the
Companys 2005 Long-Term Incentive Plan
10-Q
001-5560
10.A
5/11/2005
Table of Contents
Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Herewith
Form of Notice of Restricted Stock Agreement under the
Companys 2005 Long-Term Incentive Plan
10-Q
001-5560
10.B
5/11/2005
Severance and Change in Control Agreement, dated May
31, 2005, between the Company and David J. Aldrich
8-K
001-5560
10.1
5/31/2005
Severance and Change in Control Agreement between the
Company and Liam K. Griffin
8-K
001-5560
10.2
5/31/2005
Severance and Change in Control Agreement between the
Company and Allan M. Kline
8-K
001-5560
10.3
5/31/2005
Severance and Change in Control Agreement between the
Company and George M. LeVan
8-K
001-5560
10.4
5/31/2005
Severance and Change in Control Agreement between the
Company and Gregory L. Waters
8-K
001-5560
10.5
5/31/2005
Severance and Change in Control Agreement between the
Company and Kevin D. Barber
8-K
001-5560
10.6
5/31/2005
Severance and Change in Control Agreement between the
Company and Mark V. B. Tremallo
8-K
001-5560
10.7
5/31/2005
Skyworks Solutions, Inc. Restricted Stock Agreement
Granted Under 2005 Long-Term Incentive Plan
8-K
001-5560
10.1
11/15/2005
Statement regarding calculation of per share earnings
[see Note 2 to the Consolidated Financial Statements]
X
Computation of Ratios
X
Subsidiaries of the Company
X
Consent of KPMG LLP
X
Certification of the Companys Chief Executive Officer
pursuant to Securities and Exchange Act Rules 13a-
14(a) and 15d-14(a), as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.
X
Certification of the Companys Chief Financial Officer
pursuant to Securities and Exchange Act Rules 13a-14(a)
and 15d-14(a), as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
X
Certification of the Companys Chief Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
X
Table of Contents
Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
File No.
Exhibit
Filing Date
Herewith
Certification of the Companys Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
X
*
Indicates a management contract or compensatory plan or arrangement.
EXHIBIT 10.A
ALPHA INDUSTRIES, INC.
1986 LONG-TERM INCENTIVE PLAN
SECTION I. PURPOSE OF THE PLAN
The purpose of this Alpha Industries, Inc. 1986 Long-Term Incentive Plan (the "Plan") are (i) to provide long-term incentives and rewards to those key employees (the "Participants") of Alpha Industries, Inc. (the "Company") and its subsidiaries, who are in a position to contribute to the long-term success and growth of the Company and its subsidiaries, (ii) to assist the Company in retaining and attracting key employees with requisite experience and ability, and (iii) to associate more closely the interests of such persons with those of the Company's stockholders.
SECTION II. ADMINISTRATION
(a) The Committee. The Plan shall be administered by the Compensation Committee of the Company's Board of Directors (the "Committee"). No member of the Committee while a member thereof shall be eligible to participate in the Plan, nor may any person be appointed to the Committee unless he was not eligible to participate in the Plan or any other plan of the Company at any time within the one-year period immediately prior to such appointment as provided in Rule 16b-3 promulgated under the securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) Authority and Discretion of Committee. Subject to the express provisions of the Plan and provided that all actions taken shall be consistent with the purposes of the Plan, the Committee shall have full and complete authority and the sole discretion to: (i) determine those key employees of the Company and its subsidiaries who shall constitute the Participants; (ii) select the Participants to whom awards shall be granted under the Plan; (iii) determine the size and the form of the award or awards, if any, to be granted to any Participant; (iv) determine the time or times such awards shall be granted; (v) establish the terms and conditions upon which such awards may be exercised and/or transferred; (vi) alter any restrictions and conditions upon such awards; and (vii) adopt such rules and regulations, establish, define and/or interpret any other terms and conditions and make all other determinations (which may be on a case-by-case basis) deemed necessary or desirable for the administration of the Plan.
SECTION III. AWARDS
Awards under the Plan may include any or all of the following, as described herein: (a) Stock Options, with or without (b) Stock Appreciation Rights; (c) Book Value Awards; or (d) Restricted Share Awards.
(a) Stock Options. "Stock Options" are rights to purchase shares of $.25 par value common stock of the Company ("Common Stock") at a fixed price for a predetermined period of time.
(i) The Committee may grant Stock Options either alone or in conjunction with Stock Appreciation Rights as described in paragraph (b) below. It shall determine the number of shares of Common Stock to be covered by each such Stock Option.
(ii) In the event of the death, retirement or permanent disability of the recipient of a Stock Option, the recipient or the recipient's estate shall have the right, until the earlier of (a) one year subsequent to such death, retirement or permanent disability, or (b) the expiration date of the Stock Option, to exercise the Stock Option to the extent such Stock Option was exercisable on the date of death, retirement or permanent disability.
(iii) If the employment of the recipient of a Stock Option is terminated for any reason other than death, retirement or permanent disability, the recipient shall have the right, until the earlier of (a) 90 days after such termination or (b) the expiration date of the Stock Option, to exercise the Stock Option, to the extent such option was exercisable on the date of termination.
(iv) The purchase price of shares purchased pursuant to any Stock Option shall be determined by the Committee, and shall be paid in full upon exercise, either (a) in cash, (b) by delivery of shares of Common Stock (valued at their Fair Market Value on the date of purchase, as defined in Section V) or (c) a combination of cash and Common Stock.
(v) The Committee, in its discretion, may provide that any Stock Option shall become immediately and fully exercisable in the event of a change in control of the Company, notwithstanding any installment schedule for the exercise of such Stock Option.
(b) Stock Appreciation Rights. "Stock Appreciation Rights" are rights to receive cash and/or Common Stock in lieu of the purchase of shares under a related Stock Option. The Committee may grant Stock Appreciation Rights to any recipient of a Stock Option either at the time of the grant of the Stock Option or subsequently, by amendment to such grant. All Stock Appreciation Rights shall be granted under and subject to the following terms and conditions, and any other terms and conditions as the Committee may establish:
(i) Each Stock Appreciation Right shall be exercisable at the same times and with regard to the same number of shares as the related Stock Option is exercisable, except that in addition, in no event shall any Stock Appreciation Right be exercisable prior to six months and one day from the date of its grant.
(ii) Each Stock Appreciation Right shall entitle the holder thereof to surrender to the Company a portion of or all of the unexercised, but exercisable, related Stock Option, and to receive with respect to each share of Common Stock represented by such surrendered portion, cash or shares of Common Stock of a value equal to the amount by which the Fair Market Value of each such share on the date of exercise exceeds the option price provided in the related Stock Option. The recipient shall not be required to pay the Stock Option exercise price upon surrender of the Stock Option and exercise of the related Stock Appreciation Right.
(iii) Each surrender of a portion of or all of a Stock Option upon the exercise of a Stock Appreciation Right shall cause a share for share reduction in the number of shares of Common Stock covered by the related Stock Option.
A--2
(iv) Notwithstanding any other provision of the Plan, the Committee may from time to time determine, subject to Board approval, the maximum amount of cash or Common Stock which may be paid or issued upon exercise of Stock Appreciation Rights (A) in any year and/ or (B) to any particular recipient. Any limitation on payments may be changed by the Committee from time to time, provided that no such change shall require the holder to return to the Company any amount theretofore received upon the exercise of Stock Appreciation Rights.
(c) Book Value Awards. "Book Value Awards" are grants of Book Value Shares (as defined below) or options to purchase Book Value Shares, with the option price per share equal to the Book Value of Common Stock.
(i) "Book Value" shall mean the common stockholders' equity per share as reported in the Company's financial statements contained in either (A) the immediately preceding annual report to stockholders, or (B) the immediately preceeding quarterly report to the stockholders, as the Committee may determine in its discretion.
(ii) "Book Value Shares" are shares of Common Stock subject to the following restrictions:
(A) Book Value Shares may not be sold, transferred or
otherwise disposed of, pledged or otherwise encumbered, except as
provided in (I) paragraph (c)(ii)(B) below, (II) paragraph
(c)(iii), below, or (III) paragraph (g) of Section V.
(B) Book Value Shares which have not been reacquired by the Company pursuant to paragraph (c)(iii) below shall be repurchased by the Company at either (I) the time of the recipient's death, retirement or permanent disability, at the then Book Value of such shares, or (II) at the time of the recipient's termination of employment for any other reason, at the recipient's original acquisition price.
(C) In the event the recipient of an option to purchase Book
Value Shares is terminated for any reason, any outstanding option to
purchase Book Value Shares shall be exercisable by the recipient or
his estate only under the conditions of paragraph (a)(iii) of this
Section III.
(iii) The Committee may, in its discretion, provide terms pursuant to which a recipient of Book Value Shares may sell all or a portion of such shares to the Company prior to the time of such recipient's death, retirement, permanent disability or other termination of employment.
(iv) Payment for Book Value Shares repurchased hereunder shall be made in cash, and/ or at the discretion of the Committee, in shares of Common Stock valued at their Fair Market Value at the date of repurchase. Such payment may be made either in a lump sum or in installments at the discretion of the Committee.
(v) At the discretion of the Committee, Book Value Awards may permit the recipient to elect to receive, instead of Book Value Shares, a number of shares of Common Stock equal to the number of Book Value Shares awarded times the ratio of Book Value to Fair Market Value of the Common Stock on the date of the Book Value Award.
A--3
(d) Restricted Share Awards. "Restricted Share Awards" are grants of Restricted Shares or options to purchase Restricted Shares. Restricted Shares may be issued for any lawful consideration and on such terms as may be determined by the Committee.
(i) "Restricted Shares" are shares of Common Stock acquired by a Participant subject to the restrictions described in the following subsections.
(ii) Restricted Shares may not be sold, transferred or otherwise disposed of, pledged or otherwise encumbered, except (I) if they become Free Shares (as defined below), (II) if the Company declines to repurchase such shares, as provided in this paragraph, or (III) as provided in paragraph (g) of Section V. In the event of the recipient's termination of employment for any reason except death, retirement or permanent disability, Restricted Shares which have not become Free Shares shall be delivered to the Company within 30 days following such termination. Within 60 days following a timely delivery of said shares, the Company may repurchase all or a portion of said shares by paying to the recipient the original acquisition price, if any, for the number of shares that the Company elects to purchase, and the Company will return to the recipient any shares not so purchased. The restrictions against disposition and the obligation of resale to the Company shall lapse as to any shares which the Company declines to purchase. Any of such shares which are not delivered to the Company within 30 days following the termination of employment shall be deemed void for all corporate purposes, and shall remain subject to the restrictions imposed thereon which restrictions shall not lapse as otherwise provided. Nothing in this Section shall require the Company to repurchase shares issued to Participants under the Plan.
(iii) Upon the occurrence of the earlier of the death, retirement or permanent disability of the recipient of a Restricted Share Award, the restrictions against disposition and the obligation of resale to the Company of shares as to which such restrictions and obligations have not otherwise lapsed shall immediately lapse.
(iv) In addition to the terms provided in paragraph (d)(iii) above, the Committee may, in its discretion, provide alternate terms pursuant to which Restricted Shares issued to a Participant shall become Free Shares. Such terms shall be incorporated into the terms of the Restricted Share Award at the time of the granting of the award, and shall also be made a part of an agreement between the Company and the recipient at the time of the transfer of the Restricted Shares.
(v) "Free Shares" shall mean Restricted Shares as to which the restrictions against disposition and the obligation of resale to the Company have lapsed in accordance with the provisions set forth in paragraphs (d)(ii), (iii) or (iv) of this Section.
SECTION IV. FURTHER REQUIREMENTS AS TO BOOK VALUE SHARES AND RESTRICTED SHARES
(a) Certificates. Certificates issued in respect of Book Value Shares or Restricted Shares sold or awarded under the Plan shall be registered in the name of the recipient but shall bear the following legend:
A--4
"The transferability of this certificate and the shares of stock represented hereby is restricted and the ares are subject to the further terms and conditions contained in the 1986 Long-Term Incentive Plan of Alpha Industries, Inc. and in a repurchase agreement executed pursuant thereto. Copies of said plan and agreement are on file in the office of the Treasurer of the Company at the Company's offices in Woburn, Massachusetts."
(b) Escrow Agreements. In order to enforce the restrictions, terms and conditions on Book Value Shares or Restricted Shares, each recipient thereof shall, immediately upon receipt of a certificate or certificates representing such shares, deposit such certificates together with stock powers and other instructions of transfer as the Committee may require, appropriately endorsed in blank, with the Company as Escrow Agent under an escrow agreement in such form as shall be determined by the Committee.
SECTION V. MISCELLANEOUS PROVISIONS
(a) Rights of Recipients of Awards. The holder of Stock Appreciation Rights or any option granted under the Plan shall have no rights as a stockholder of the Company with respect thereto unless and until certificates for shares are issued. Except as otherwise provided herein, the holder of Restricted Shares or Book Value Shares will be entitled to receive any dividends on such shares in the same amount and at the same time as declared on shares of Common Stock of the Company and shall be entitled to vote such shares as a stockholder of record.
(b) Assignment of Options and Stock Appreciation Rights. No option or Stock Appreciation Right [ILLEGIBLE] rights or interest of the recipient therein shall be assignable or transferable by such recipient except by will or the laws of descent and distribution. During the lifetime of the recipient, such option or Stock Appreciation Right shall be exercisable only by, or payable only to, the recipient thereof.
(c) Terms and Price of Options. Options to purchase Common Stock, Book Value Shares or Restricted Shares hereunder shall be for a period established by the Committee, but in no event may such options be exercisable (including provisions, if any, for exercise in installments) more than ten years after the date of its grant. Furthermore, options hereunder shall be of three types: (i) those exercisable only within sixty (60) days of grant, (ii) those exercisable not earlier than one year after grant subject to the right of the Committee as set forth in paragraph (a)(v) of Section III to provide terms pursuant to which Stock Options shall become immediately exercisable in full upon a change in control of the Company and (iii) those exercisable at any time after grant or at a specified time after grant if granted in exchange for an option or options of the same type for the same number of shares and such new option or options are exercisable at dates no earlier than the exercise date of the options for which they are exchanged. No option to purchase shares shall be granted at a price per share that is less than Book Value, as defined in paragraph (c)(i) of Section III.
(d) Further Agreements. All Stock Options, Stock Appreciation Rights, Restricted Stock Awards and Book Value Awards granted under this Plan shall be evidenced by agreements in such form and containing such terms and conditions (not inconsistent with this Plan) as the Committee may require.
(e) Legal and Other Requirements. No shares of Common Stock shall be issued or transferred upon exercise of any award under the Plan unless and until all legal requirements applicable to the issuance or transfer of such shares and such other requirements as are consistent with the Plan have
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been complied with to the satisfaction of the Committee. The Committee may require that prior to the [ILLEGIBLE] or transfer of Common Stock hereunder, the recipient thereof shall enter into a written agreement to comply with any restrictions on subsequent disposition that the Committee or the Company deem necessary or advisable under any applicable law, regulation or official interpretation thereof. Certificates of stock issued hereunder may be legended to reflect such restrictions.
(f) Withholding of Taxes. Pursuant to applicable Federal, state, local or foreign laws, the Company may be required to collect income or other taxes upon the grant of certain awards or the exercise of an option or Stock Appreciation Right by a Participant. The Company may deduct from payments made under the Plan, or require, as a condition to such award, or to the exercise of an option or Stock Appreciation Right, that the recipient pay the Company, at such time as the Committee or the Company determine, the amount of any taxes which the Committee or the Company, in its discretion, determine is required to be withheld.
(g) Pledge of Shares. Notwithstanding restrictions against disposition of any award made pursuant to the Plan, the Committee, in its discretion, may permit any shares acquired under the plan to be pledged or otherwise encumbered to secure borrowing by the recipient thereof solely for the purpose of obtaining the acquisition price to be paid for such shares, provided, that the amount of such borrowing may not exceed the acquisition price of such shares, and the recipient must provide the Company with a copy of the documents executed in connection with such borrowing. Any borrowing made by the recipient of an award pursuant to this paragraph (g) must permit the Company to repay the outstanding indebtedness and reacquire the pledged shares in the event of a default by the recipient under the borrowing documents. Nothing in this paragraph (g) shall require the Company to repay any indebtedness of a Participant or reacquire shares pledged hereunder.
(h) Right to Awards. No employee of the Company or other person shall have any claim or right to be a Participant in this Plan or to be granted an award hereunder. Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ of the Company. Nothing contained hereunder shall be construed as giving any Participant or any other person any equity or interest of any kind in any assets of the Company or creating a trust of any kind or a fiduciary relationship of any kind between the Company and any such person. As to any claim for any unpaid amounts under the Plan, any Participant or any other person having a claim for payments shall be an unsecured creditor.
(i) Installments. Any option granted hereunder may provide for its exercise in installments. The right to exercise any option having installment provisions shall be cumulative, so that to the extent that any portion of an installment is not exercised when exercisable, that portion of the installment shall continue to be exercisable at any time thereafter until the expiration of the term of such option.
j) Fair Market Value. The "Fair Market Value" of Common Stock shall be the closing price of the Company's Common Stock on the American Stock Exchange on the date for which Fair Market Value is to be determined, or if this method results in an unreasonable calculation of the fair market value of the Common Stock, then as the Committee may determine.
(k) Permanent Disability. "Permanent Disability" shall have the meaning specified in Section 22(e)(3) of the Internal Revenue Code of 1986 (the "Code").
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(1) Retirement. "Retirement" shall mean an employee's ceasing to be employed by the Company after such employee has reached 65 years of age, or in the discretion of the Committee, and on a case-by-case basis, such other age, as the Committee determines in its discretion, such age being not less than 55 years of age.
(m) Change in Control. A "Change in Control" shall mean:
(i) there shall have been consummated (a) any consolidation or merger of the Company in which the Company is not the continuing or surviving entity or pursuant to which the Company's Common Stock is converted into cash, securities or other property, other than a merger of the Company in which the ownership by the Company's stockholders of the securities in the surviving entity is in the same proportion as the ownership by the Company's stockholders of the stock in the Company immediately prior to the merger or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; or
(ii) the stockholders of the Company have approved any plan or proposal for the liquidation or dissolution of the Company; or
(iii) any person (as that term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) has become the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of the Company's outstanding Common Stock; or
(iv) that during any period of two consecutive years, individuals who, at the beginning of such period, constitute the entire Board of Directors shall cease, for any reason, to constitute a majority thereof, unless the election, or the nomination for election by the Company's stockholders, of each new director was approved by a vote of at least three-quarters of the directors then still in office who were directors at the beginning of the period.
(n) Indemnity. Neither the Board of Directors nor the Committee, nor any members of either, nor any employees of the Company or any subsidiary, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to the Plan, and the Company hereby agrees to indemnify the members of the Board of Directors, the members of the Committee, and the employees of the Company and its subsidiaries with respect to any claim, loss, damage, or expense (including counsel fees) arising from any such act, omission, interpretation, construction or determination to the full extent permitted by law.
(o) Incentive Stock Options. The aggregate fair market value (determined as of the time any incentive stock option, as that term is defined in Section 422A of the Code, is granted) of the Common Stock with respect to which incentive stock options are exercisable for the first time by any employee during any calendar year under all plans of the Company and its parent and subsidiary corporation (as such terms are defined in Section 425 of the Code) shall not exceed $100,000.
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SECTION VI. AMENDMENT AND TERMINATION; ADJUSTMENTS UPON CHANGES IN STOCK
The Board of Directors of the Company may at any time, and from time to time, amend, suspend or terminate the Plan in whole or in part; provided, however, that the Board of Directors may not materially increase the benefits accruing to Participants under the Plan, increase the number of shares of Common Stock reserved for purposes of the Plan, or materially modify the requirements as to eligibility for participation in the Plan without further approval by the affirmative vote of at least a majority of the holders of the outstanding shares of Common Stock. Except as provided herein, no amendment, suspension or termination of the Plan may affect the rights of a Participant to whom an award has been granted without such Participant's consent. If there shall be any change in the stock subject to the Plan or to any option, Stock Appreciation Right, Book Value Award or Restricted Share Award granted under the Plan, through merger, consolidation, reorganization, recapitalization, stock dividend, stock split or other change in the corporate structure, appropriate adjustments may be made by the Board of Directors of the Company (or if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) in the aggregate number and kind of shares subject to the Plan, and the number and kind of shares and the price per share subject to outstanding options, Stock Appreciation Rights, Book Value Awards or Restricted Share Awards.
SECTION VII. SHARES OF STOCK SUBJECT TO THE PLAN
The number of shares of Common Stock, Book Value Shares or Restricted Shares that may be the subject of awards under the Plan shall not exceed an aggregate of 900,000 shares. Shares to be delivered under the Plan may be either authorized but unissued shares of Common Stock or treasury shares. Any shares subject to an option hereunder which for any reason expires unexercised, shares reacquired by the Company because restrictions do not lapse, shares returned because payment is made hereunder in stock of equivalent value rather than cash, or Book Value Shares returned to the Company for repurchase shall, at such time, no longer count towards the aggregate number of shares which may be subject to awards hereunder, but shares subject to a Stock Option which are not delivered as a result of the exercise of related Stock Appreciation Rights shall continue to count towards the aggregate number of shares which may be so subject.
SECTION VIII. EFFECTIVE DATE AND TERM OF THE PLAN
The effective date of the Plan is December 18, 1986 and awards under the Plan may be made for a period of ten years commencing on such date. The period during which an option or other award may be exercised may extend beyond that time as provided herein.
SECTION IX. APPROVAL OF STOCKHOLDERS
The Plan is subject to the approval of the holders of a majority of the
shares of Common Stock of the Company present and voting (in person or by proxy)
at a meeting of stockholders within one year from the effective date of the
Plan. Awards may be made hereunder prior to the date of, but subject to,
[ILLEGIBLE] approval.
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1. | The definition of Annuity Equivalent of Stock Options in Section 1.3 is amended by deleting the same in its entirety and substituting the following: Annuity Equivalent of Stock Options means the annual benefit payable under a single life annuity, with payment commencing at the Participants Normal Retirement Date, which could be purchased using the Option Exercise Proceeds for all Options previously exercised by the Participant and/or available for exercise by the Participant upon his retirement plus, in a case of Participants who have separated from employment, all options available for exercise by the Participant on the date of termination and, in the case of a Change of Control, all Options available for exercise by the Participant on the effective date of the Change of Control. | |
2. | The definition of Option Exercise Proceeds in Section 1.3 is amended by adding a new subsection as follows: | |
"(iv) the expiration date of any Options not exercised. | ||
3. | The definition of Years of Service in Section 1.3 is amended by adding thereto the following sentences: A Participant who is on an approved leave of absence or is working less than full time on an approved basis shall be given credit for a partial year of service on a pro rata basis based on the number of hours worked during the relevant twelve month period. Any benefits measured by Years of Service shall be adjusted to reflect the Participants partial Year(s) of Service, if any. |
EXHIBIT 10. C
ALPHA INDUSTRIES, INC.
1994 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The appropriate purpose of this 1994 Non-Qualified Stock Option Plan for Non-Employee Directors is to attract and retain the services of experienced and knowledgeable independent directors of the Corporation for the benefit of the Corporation and its stockholders and to provide additional incentives for such independent directors to continue to work for the best interests of the Corporation and its stockholders through continuing ownership of its common stock.
2. Definitions. As used herein, each of the following terms has the indicated meaning:
"Annual Meeting" means the Corporation's annual meeting of stockholders or special meeting in lieu of annual meeting of stockholders at which one or more directors are elected.
"Board" means the Board of Directors of the Corporation.
"Commencement Date" means the date of the first Annual Meeting following the approval of the Plan by the Board.
"Corporation" means Alpha Industries, Inc.
"Fair Market Value" means the closing sale price quoted on the American Stock Exchange or such other national securities exchange or automated quotation system on which the Shares may be traded or quoted on the date of the granting of the Option.
"Non-Employee Director" means a person who, as of any applicable date, is a member of the Board and is not an officer or employee of the Corporation or any subsidiary of the Corporation.
"Option" means the contractual right to purchase Shares upon the specific terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1) year after the date of grant of an Option pursuant to this Plan and ending ten years from the date of grant.
"Plan" means this Alpha Industries, Inc. 1994 Non-Qualified Stock Option Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.25 par value, of the Corporation.
"Subsidiary" means any corporation in an unbroken chain of corporations beginning with the Corporation if, at the time of grant of the Option, each of the corporations other than the last in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
3. Stock Subject to the Plan. The aggregate number of Shares that may
be issued and sold under the Plan shall be 50,000. The Shares to be issued upon
exercise of Options granted under this Plan shall be made available, at the
discretion of the Board, from (i) treasury Shares and Shares reacquired by the
Corporation for such purposes, including Shares purchased in the open market,
(ii) authorized but unissued Shares, and (iii) Shares previously reserved for
issuance upon exercise of Options which have expired or been terminated. If any
Option granted under this Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered thereby shall
become available for grant under additional Options under the Plan so long as it
shall remain in effect.
4. Administration of the Plan. The Plan shall be administered by the Board. The Board shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Option issued under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan.
5. Eligibility; Grant of Option. On the Commencement Date, each Non- Employee Director shall be granted an Option to purchase 5,000 Shares. In addition, upon initial election or appointment as a Non-Employee Director, immediately following the Annual Meeting at which such Non-Employee Director is first elected by the stockholders, each Non-Employee Director shall be granted an Option to purchase 5,000 Shares. Options to purchase Shares may be awarded to Non-Employee Directors by the action of the Board or by the action of the compensation committee described in Section III(a) of the Company's 1996 Long-Term Incentive Plan (the 'Committee'). Such awards shall be in lieu of awards of options under the 1997 Non-Qualified Stock Option Plan for Non-Employee Directors
6. Terms of Options and Limitations Thereon.
(a) Option Agreement. Each Option granted under this Plan shall be evidenced by an Option agreement between the Corporation and the Option holder and shall be upon such terms and conditions, not inconsistent with this Plan, as the Board may determine.
(b) Price. The price at which any Shares may be purchased pursuant to the exercise of an Option shall be the greater of the Fair Market Value of the Shares on the date of grant or four dollars ($4.00).
(c) Exercise of Option. Each Option granted under this Plan may be exercised as follows:
(i) beginning on the first anniversary of the date of grant, for up to 20% of the Shares covered by the Option; and
(ii) beginning on each anniversary of the date of grant thereafter, for up to an additional 20% of such Shares for each additional year, until, on the fifth anniversary of the date of grant, the Option may be exercised as to 100% of the Shares covered by the Option, until the expiration of the Option Exercise Period.
Options may be exercised in whole, or in part, from time to time, only during the Option Exercise Period, by the giving of written notice, signed by the holder of the Option, to the Corporation stating the number of Shares with respect to which the Option is being exercised, accompanied by full payment for such Shares pursuant to section 7(a) hereof; provided however, (i) if a person to whom an Option has been granted ceases to be a Non-Employee Director during the Option Exercise Period by reason of retirement, death or any reason, other than termination for cause, such Option shall be exercisable by him or her or by the executors, administrators, legatees or distributees of his or her estate until the earlier of (A) the end of the Option Exercise Period or (B) 36 months following his or her retirement or death or the date on which he or she ceased to be a Non-Employee Director; and (ii) if a person to whom an Option has been granted ceases to be a Non-Employee Director of the Corporation by reason of termination for cause, such Option shall terminate as of the date such person ceased to be a Non-Employee Director. Termination for cause shall be defined as termination on account of any act of (i) fraud or intentional misrepresentation, or (ii) embezzlement, misappropriation or conversion of assets or opportunities of the Corporation or any Subsidiary.
(d) Non-Assignability. No Option, or right or interest in an Option, shall be assignable or transferable by the holder, except by will, the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder), and during the lifetime of the holder shall be exercisable only by him or her.
7. Payment.
(a) The purchase price of Shares upon exercise of an Option shall
be paid by the Option holder in full upon exercise, and may be paid (i) in cash,
(ii) by delivery of Shares, or (iii) any combination of cash and Shares, as the
Board may determine.
(b) No Shares shall be issued or transferred upon exercise of any Option under this Plan unless and until all legal requirements applicable to the issuance or transfer of such Shares, and such other requirements as are consistent with the Plan, have been complied with to the satisfaction of the Board, including without limitation those described in Paragraph 10 hereof.
8. Stock Adjustments.
(a) If the Corporation is a party to any merger or consolidation, any purchase or acquisition of property or stock, or any separation, reorganization or liquidation, the Board (or,
if the Corporation is not the surviving corporation, the board of directors of the surviving corporation) shall have the power to make arrangements, which shall be binding upon the holders of unexpired Options, for the substitution of new options for, or the assumption by another corporation of, any unexpired Options then outstanding hereunder.
(b) If by reason of recapitalization, reclassification, stock split, combination of shares, separation (including a spin-off) or dividend on the stock payable in Shares, the outstanding Shares of the Corporation are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Corporation, the Board shall conclusively determine the appropriate adjustment in the exercise prices of outstanding Options and in the number and kind of shares as to which outstanding Options shall be exercisable.
(c) In the event of a transaction of the type described in paragraphs (a) and (b) above, the total number of Shares on which Options may be granted under this Plan shall be appropriately adjusted by the Board.
9. Change of Control Provisions.
(a) Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of Control, any Options outstanding as of the date such Change of Control is determined to have occurred and not then exercisable shall become fully exercisable to the full extent of the original grant.
(b) A "Change in Control" shall mean:
(i) there shall have been consummated (a) any consolidation or
merger of the Corporation in which the Corporation is not the continuing or
surviving entity pursuant to which the Shares are converted into cash,
securities or other property, other than a merger of the Corporation in which
the ownership by the Corporation's stockholders of the securities in the
surviving entity is in the same proportion as the ownership by the Corporation's
stockholders of the stock in the Corporation immediately prior to the merger or
(b) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Corporation; or
(ii) the stockholders of the Corporation have approved any plan or proposal for the liquidation or dissolution of the Corporation; or
(iii) any person (as that term is used in Sections 13(d) and
14 (d)(2) of the Securities Exchange Act of 1934, as amended (the "1934 Act"))
has become the beneficial owner (within the meaning of Rule 13d-3 promulgated
under the 1934 Act) of 30% or more of the Corporation's outstanding Shares; or
(iv) that during any period of two consecutive years, individuals who, at the beginning of such period, constitute the entire Board shall cease, for any reason, to constitute a majority thereof, unless the election, or the nomination for election by the Corporation's
stockholders, of each new director was approved by a vote of at least three-quarters of the directors then still in office who were directors at the beginning of the period.
10. No Rights Other Than Those Expressly Created. No person affiliated with the Corporation or any Subsidiary or other person shall have any claim or right to be granted an Option hereunder. Neither this Plan nor any action taken hereunder shall be construed as (i) giving any Option holder any right to continue to be affiliated with the Corporation, (ii) giving any Option holder any equity or interest of any kind in any assets of the Corporation, or (iii) creating a trust of any kind or a fiduciary relationship of any kind between the Corporation and any such person. No Option holder shall have any of the rights of a stockholder with respect to Shares covered by an Option, until such time as the Option has been exercised and Shares have been issued to such person.
11. Miscellaneous.
(a) Withholding of Taxes. Pursuant to applicable Federal, state, local or foreign laws, the Corporation may be required to collect income or other taxes upon the grant of an Option to, or exercise of an Option by, a holder. The Corporation may require, as a condition to the exercise of an Option, that the recipient pay the Corporation, at such time as the Board determines, the amount of any taxes which the Board may determine is required to be withheld.
(b) Securities Law Compliance. Upon exercise of an Option, the holder shall be required to make such representations and furnish such information as may, in the opinion of counsel for the Corporation, be appropriate to permit the Corporation to issue or transfer the Shares in compliance with the provisions of applicable federal or state securities laws. The Corporation, in its discretion, may postpone the issuance and delivery of Shares, upon any exercise of an Option, until completion of such registration or other qualification of such Shares under any federal or state laws, or stock exchange listing, as the Corporation may consider appropriate. The Corporation intends to register or qualify the Shares under federal and state securities laws, but is not obligated to register or qualify the Shares under such laws and may refuse to issue such Shares if neither registration nor exemption therefrom is practical. The Board may require that prior to the issuance or transfer of any Shares upon exercise of an Option, the recipient enter into a written agreement to comply with any restrictions on subsequent disposition that the Board or the Corporation deems necessary or advisable under any applicable federal and state securities laws. Certificates representing the Shares issued hereunder may be legended to reflect such restrictions.
(c) Compliance with Rule l6b-3. With respect to a person subject to Section 16 of the 1934 Act, transactions under this Plan are intended to comply with all applicable conditions of Rule l6b-3 or its successors ("Rule 16b-3") under the 1934 Act, including maintaining the status of the Non-Employee Directors as "disinterested persons" under Rule 16b-3. To the extent any provision of the Plan or action by the administrators of the Plan fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the administrators of the Plan.
(d) Indemnity. The Board shall not be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to the Plan, and the Corporation hereby agrees to indemnify the members of the Board, in respect of any claim, loss, damage, or expense (including counsel fees) arising from any such act, omission, interpretation, construction or determination, to the full extent permitted by law.
(e) Options Not Deemed Incentive Stock Options. Options granted under the Plan shall not be deemed incentive stock options as that term is defined in Section 422 of the Internal Revenue Code of 1986, as amended.
12. Effective Date; Amendment; Termination.
(a) The effective date of this Plan shall be the date of the approval of stockholders of the Corporation holding at least a majority of the voting stock of the Corporation present or represented and entitled to vote at a meeting of the stockholders.
(b) The date of grant of any Option granted hereunder shall be the date upon which such option shall be voted by the Board, unless the vote expressly otherwise provides.
(c) The Board may at any time, and from time to time, amend, suspend or terminate this Plan in whole or in part. Provided, however, that so long as there is a requirement under Rule 16b-3 for stockholder approval of the Plan and certain amendments thereto, any such amendment which (i) materially increases the number of Shares which may be subject to Options granted under the Plan, (ii) materially increases the benefits accruing to participants in the Plan, or (iii) materially modifies the requirement for eligibility to participate in the Plan, shall be subject to stockholder approval; and provided, further, that the provisions of this Plan relating to the amount and price of securities to be awarded and the timing of such awards may not be amended more than once every six months, other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, or the rules thereunder. However, except as provided herein, no amendment, suspension or termination of this Plan may affect the rights of any person to whom an Option has been granted without such person's consent.
(d) This Plan shall terminate ten years from its effective date, and no Option shall be granted under this Plan thereafter, but such termination shall not affect the validity of Options granted prior to the date of termination.
Date of Board of Directors Adoption: July 14, 1994
Date of Stockholders Approval: September 12, 1994
Amended: April 27, 1999
EXHIBIT 10.D
ALPHA INDUSTRIES EXECUTIVE COMPENSATION PLAN
ARTICLE 1. - INTRODUCTION
1.1. PURPOSE OF PLAN
The Employer has adopted the Plan set forth herein to provide a means by which certain employees may elect to defer receipt of designated percentages or amounts of their Compensation and to provide a means for certain other deferrals of compensation.
1.2. STATUS OF PLAN
The Plan is intended to be "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of Sections 201(2) and 301(a)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"). To the extent possible, it shall be interpreted and administered in a manner consistent with that intent.
ARTICLE 2. - DEFINITIONS
Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context:
2.1. ACCOUNT means, for each Participant, the account established for his or her benefit under Section 5.1.
2.2. ADDITIONAL EMPLOYER CONTRIBUTION means a discretionary contribution made by The Employer, as described in Section 4.2.
2.3. CHANGE OF CONTROL means (a) the purchase or other acquisition in one or more transactions other than from the Employer, by any individual, entity or group of persons, within the meaning of section 13(d)(3) or 14(d) of the Securities Exchange Act of 1934 or any comparable successor provisions, of beneficial ownership (within the meaning of Rule 13d-3 of Securities Exchange Act of 1934) of 30 percent or more of either the outstanding shares of common stock or the combined voting power of the Employer's then outstanding voting securities entitled to vote generally, or (b) the approval by the stockholders of the employer of a reorganization, merger, or consolidation, in each case, with respect to which persons who were stockholders of the Employer immediately prior to such reorganization, merger or consolidation do not immediately thereafter own more than 50 percent of the combined voting power of the reorganized, merged or consolidated Employer's then outstanding securities that are entitled to vote generally in the election of directors or (c) the sale of substantially all of the Employer's assets.
2.4. CODE means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section or subsection of the Code includes reference to any comparable or succeeding provisions of any legislation which amends, supplements or replaces such section or subsection.
2.5. COMPENSATION with regard to Participant means his or her wages, salaries, fees for professional services and other amounts received (without regard to whether or not an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer or an Affiliate to the extent that the amounts are includable in gross income, including,
but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements, and expense allowances, but only to the extent that such amounts are included in income, and not including those items excludable from the definition of compensation under Treas. Reg., Section 1.415-2(d)(3), or any successor or replacement provision.
2.6. COMPENSATION COMMITTEE means the Board of Directors or such person or persons as may be designated by the Board of Directors to serve as the Compensation Committee hereunder.
2.7. EFFECTIVE DATE means January 1, 1995.
2.8. ELECTION FORM means the participation election form as approved and prescribed by the Plan Administrator.
2.9. ELECTIVE DEFERRAL means the portion of Compensation which is deferred by a Participant under Section 4.1.
2.10. ELIGIBLE EMPLOYEE means, on the Effective Date or on any Entry Date thereafter, each key employee of the Employer selected by the Compensation Committee.
2.11. EMPLOYER means Alpha Industries, Inc., located at 20 Sylvan Rd., Woburn, MA 01801, any successor to all or a major portion of the Employer's assets or business which assumes the obligations of the Employer, and each other entity that is affiliated with the Employer which adopts the Plan with the consent of the Employer.
2.12. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to any section or subsection of ERISA includes reference to any comparable or succeeding provisions of any legislation which amends, supplements or replaces such section or subsection.
2.13. INSOLVENT means either (i) the Employer is unable to pay its debts as they become due, or (ii) the Employer is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.
2.14. PARTICIPANT means any individual who participates in the Plan in accordance with Article 3.
2.15. PLAN means this Plan as it may be amended from time to time.
2.16. PLAN ADMINISTRATOR means the Employer, or such person as the Employer designates, from time to time, in a writing attached to this Plan.
2.17. PLAN YEAR means the calendar year.
2.18. RETIREMENT AGE means 55 years of age.
2.19. TOTAL AND PERMANENT DISABILITY means the inability of a Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, and the permanence and degree of which shall be supported by medical evidence satisfactory to the Plan Administrator.
2.20. TRUST means the trust established by the Employer that identifies the Plan as a plan with respect to which assets are to be held by the Trustee.
2.21. TRUST AGREEMENT means the agreement between the Employer and the Trustee establishing the Trust.
2.22. TRUSTEE means the trustee or trustees under the Trust.
2.23. YEAR OF SERVICE means a computation period and service requirement that may be established by the Employer with notice to the Participants.
ARTICLE 3. - PARTICIPATION
3.1. COMMENCEMENT OF PARTICIPATION
Any individual who elects to defer part of his or her compensation in accordance with Section 4.1 shall become a Participant in the Plan as of the date such deferrals commence in accordance with Section 4.1.
Any individual who is not already a Participant and whose Account is credited with an Additional Employer Contribution shall become a Participant as of the date such amount is credited.
3.2. CONTINUED PARTICIPATION
A Participant in the Plan shall continue to be a Participant so long as any amount remains credited to his or her Account.
ARTICLE 4. - ELECTIVE AND ADDITIONAL EMPLOYER CONTRIBUTIONS
4.1. ELECTIVE DEFERRALS
An individual who is an Eligible Employee on the Effective Date may, by completing an Election Form and filing it with the Plan Administrator within 30 days following the Effective Date, elect to defer a percentage or dollar amount of one or more payments of Compensation, on such terms as the Plan Administrator pay permit, which are payable to the Participant after the date on which the individual files the Election Form. Any individual who becomes an Eligible Employee after the Effective Date may, be completing an Election Form and filing it with the Plan Administrator within 30 days following the date on which the Plan Administrator gives such individual written notice that the individual is an Eligible Employee, elect to defer a percentage or dollar amount of one or more payments of Compensation, on such terms as the Plan Administrator may permit, which are payable to the Participant after the date on which the individual files the Election Form. Any eligible Employee who has not otherwise initially elected to defer compensation in accordance with this paragraph 4.1 may elect to defer a percentage or dollar amount of one or more payments of Compensation, on such terms as the Plan Administrator may permit, commencing with compensation paid in the next succeeding Plan Year, by completing an Election Form prior to the first day of such succeeding Plan Year. In addition, a Participant may defer all or part of the amount of any elective deferral or matching contribution made on his or her behalf to the Employer's 401(i) plan for the prior Plan Year but treated as an excess deferral, an excess contribution or otherwise limited by the application of the limitations of sections 401(k), 401(m), 415 or 402(q) of the code, so long as the Participant so indicates on an Election Form. A Participant's Compensation shall be reduced in accordance with the Participant's election hereunder and amounts deferred hereunder shall be paid by the
employer to the trust as soon as administratively feasible and credited to the Participant's Account as of the date the amounts are received by the Trustee.
An election to defer a percentage or dollar amount of Compensation for any Plan Year shall apply for subsequent Plan Years unless changed or revoked. A Participant may change or revoke his or her deferral election as of the first day of any Plan Year by giving written notice to the Plan Administrator before such first day (or any such earlier date as the Plan Administrator may prescribe).
4.2. ADDITIONAL EMPLOYER CONTRIBUTIONS
The Employer may, in its sole discretion, make Additional Employer Contributions to the account of Eligible Employees on such terms as the Employer shall specify at the time it makes the contribution. To the extent that they conflict with the provisions of this Plan, the terms specified by the Employer shall supersede any other provision of this Plan with regard to such Additional Employer Contributions, and earnings or losses with respect thereto. If the Employer does not specify a method of distribution, the Additional Employer Contribution shall be distributed in a manner consistent with the election last made by the particular Participant prior to the year in which the Additional Employer Contribution is made. The Employer, in its discretion, may permit the Participant to designate a distribution schedule for a particular Additional Employer Contribution provided that such designation is made prior to the time that the Employer finally determines that the Participant will receive the Additional Employer Contribution.
ARTICLE 5. - ACCOUNTS
5.1. ACCOUNTS
The Plan Administrator shall establish an Account for each participant reflecting Elective Deferrals, and Additional Employer Contributions, if any, made for the Participant's benefit together with any adjustments for income, gain or loss and any payments from the Account. In its discretion, the Plan Administrator may solicit recommended investments from each Participant and may maintain records of the income, gain or loss attributable to the Participant's account in accordance with the performance of such recommended investments or such other investments as the Plan Administrator may select. In its discretion, the Plan Administrator may cause the Trustee to maintain and invest separate asset accounts corresponding to each Participant's Account. The Plan Administrator shall establish sub-accounts for each Participant that has more than one election in effect under Section 7 and such other subaccounts as are necessary for the proper administration of the Plan. As of the last business day of each calendar quarter, the Plan Administrator shall provide the Participant with a statement of his or her Account reflecting the income, gains and losses (realized and unrealized), amounts of deferrals, and distributions of such Account since the prior statement.
5.2. INVESTMENTS
So long as the Employer is not insolvent, and subject to the provisions of the Trust Agreement, the assets of the Trust shall be invested in such investments as the Company shall determine. In the Company's discretion, it may designate one or more agents in writing to the Trustee, which agents may be designated with respect to all or a portion of the assets held by the Trustee for the purpose of making such investments.
ARTICLE 6. - VESTING
Subject to the provisions of Section 10.1, a Participant shall have a vested right to all Elective Deferrals and all income and gain attributable thereto, reduced by losses, if any, as are credited to his or her Account. If the Employer chooses to make Additional Employer Contributions, then each Participant's right to the portion of his or her Account attributable to Additional Employer Contributions and income and gain attributable thereto, reduced by losses, if any, shall be in accordance with terms determined by the Employer and provided to the Participant.
ARTICLE 7. - PAYMENTS
7.1. ELECTION AS TO TIME AND FORM OF PAYMENT
A Participant shall elect (on the election Form used to elect to defer Compensation under Section 4.1) the date at which the Elective Deferrals and vested Additional Employer Contributions, if any, including any earnings attributable thereto, reduced by losses, if any, will be paid to the Participant. The Participant shall also elect thereon for payment to be paid in either:
a. a single lump-sum payment; or
b. annual installments over a period elected by the Participant up to 10 years, the amount of each annual installment to equal the then balance of all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, as determined immediately prior to the payment of the installment, and divided by the number of installments then remaining to be paid.
Each such election will be effective for the Plan Year for which it is made and succeeding Plan Years, unless changed by the Participant. Except as explicitly provided herein, any change will be effective only for Elective Deferrals and Additional Employer Contributions made for the first Plan Year beginning after the date on which the Election Form containing the change is filed with the Plan Administrator. Notwithstanding the preceding sentence, the payments due in any calendar year pursuant to this Section 7.1 shall be paid in the first full calendar month immediately following the actual date that the Participant ceases being an employee of the Employer, or the twelve month period commencing in that month, rather than the month or year originally selected, if the Participant makes an election in such form as the Plan Administrator may require, and the election is filed with the Plan Administrator prior to the calendar year in which the payment otherwise would have been made. Except as provided in Sections 7.2, 7.3, 7.4 or 7.5, or any schedule provided by the Employer to the Participant for Additional Employer Contributions and income or gain attributable thereto, reduced by losses, if any, payment of a Participant's Account shall be made in accordance with the Participant's elections as provided in this Section 7.1.
7.2. CHANGE OF CONTROL
Unless (i) the Board of Directors of the Employer shall vote to continue this Plan on substantially the same terms not later than 60 days after a Change in Control and send notice of such vote to each Participant, then (ii) as soon as possible following a Change of Control of Employer, each Participant shall be
paid all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and all of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, (whether or not considered vested for any other purpose hereunder) in a single lump sum.
7.3. TERMINATION OF EMPLOYMENT; TOTAL AND PERMANENT
DISABILITY
Except as provided in Section 7.2, upon termination of a Participant's employment prior to the Retirement Age, for any reason other than death or Permanent and Total Disability, all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, shall be paid to the Participant in a single lump sum as soon as practicable following the date of such termination. If a Participant suffers permanent and total disability, whether or not employed by the Employer at that time, the Plan Administrator, in its sole discretion, may pay out all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, in a lump sum, or in annual installments, regardless of any election made by the Participant and regardless of whether payments have already commenced under Section 7.1.
7.4. DEATH
If a Participant dies prior to the complete distribution of his or her Account, all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, shall be paid as soon as practicable to the Participant's designated beneficiary or beneficiaries, in the form elected by the Participant under either of the following options:
a. a single lump-sum payment; or
b. annual installments over a period elected by the Participant up to 10 years, the amount of each annual installment to equal the then balance of all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, as determined immediately prior to the payment of the installment, and divided by the number of installments then remaining to be paid.
Any designation of beneficiary and form of payment to such beneficiary shall be made by the Participant on an Election form filed with the Plan Administrator and may be changed by the participant at any time by filing another Election Form containing the revised instructions. If no beneficiary is designated or no designated beneficiary survives the Participant, payment shall be made to the Participant's surviving spouse, or, if none, to his or her issue per stripes, in a single payment. If no spouse or issue survives the Participant, payment shall be made in a single lump sum to the Participant's estate.
7.5. UNFORESEEN EMERGENCY
If a Participant suffers an unforeseen emergency, as defined herein, the Plan Administrator, in its sole discretion, may pay to the Participant up to and including the total of that portion, if any, of all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any. The determination of the amount to be paid shall equal that amount which the Plan Administrator determines, in its sole discretion, is necessary to satisfy the emergency need, including any amounts necessary to pay any federal, state or local income taxes reasonably anticipated to result from the distribution. A Participant requesting an emergency payment shall apply for the payment in writing in a form approved by the Plan Administrator and shall provide such additional information as the Plan
Administrator may require. For purposes of this paragraph, "unforeseen emergency" means an immediate and heavy financial need resulting from any of the following:
a. expenses which are not covered by insurance and which the Participant or his or her spouse or dependent has incurred as a result of, or is required to incur in order to receive, medical care;
b. the need to prevent eviction of a Participant from his or her principal residence or foreclosure on the mortgage of the Participant's principal residence; or
c. any other circumstance that is determined by the Plan Administrator in its sole discretion to constitute an unforeseen emergency which is not covered by insurance and which cannot reasonably be relieved by the liquidation of the Participant's assets.
7.6. FORFEITURE OF NON-VESTED AMOUNTS
Any amounts credited to a Participant's Account which are attributable to the non-vested portion of any Additional Employer Contributions, and earnings attributable thereto, reduced by losses, if any, not vested at the time payments are commenced pursuant to Sections 7.1, 7.3 or 7.4, shall be forfeited by the Participant at the time payment begins under such Sections, and may be applied by the Company as it sees fit, which may include satisfying the Employer's obligation to make contributions to the Trust.
7.7. TAXES
The Plan Administrator shall withhold or otherwise appropriately provide for all federal, state or local taxes that the Plan Administrator determines are required to be withheld or otherwise provided for from any payments made pursuant to this Article 7.
ARTICLE 8. - PLAN ADMINISTRATOR
8.1. PLAN ADMINISTRATION AND INTERPRETATION
The Plan Administrator shall oversee the administration of the Plan. The Plan Administrator shall have complete control and authority to determine the rights and benefits of any and all Participants. Any determinations may be made on a case-by-case basis or a plan wide basis, as determined by the Plan Administrator in its sole discretion, including all claims, demands and actions arising out of
the provisions of the Plan of any Participant, beneficiary, deceased Participant, or other person having or claiming to have any interest under the Plan. The Plan Administrator shall have complete discretion to interpret the Plan and to decide all matters under the Plan. Such interpretation and decision shall be final, conclusive and binding on all Participants and any person claiming under or through any Participant. Any individual who is a Participant and who is serving as Plan Administrator or part of a committee comprising the Plan Administrator will not vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Plan Administrator shall be entitled to rely on information furnished by a Participant, a beneficiary, the employer or the Trustee, or such other persons, as it sees fit. The Plan Administrator shall have the responsibility for complying with any reporting and disclosure requirements of ERISA.
8.2. POWERS, DUTIES, PROCEDURES, ETC.
The Plan Administrator shall have such powers and duties, may adopt such rules and tables, may act in accordance with such procedures, may appoint such officers or agents, may delegate such powers and duties, may receive such reimbursements and compensation, and shall follow such claims and appeal procedures with respect to the Plan as it may establish.
8.3. INDEMNIFICATION OF PLAN ADMINISTRATOR
The Employer agrees to indemnify and to defend to the fullest extent permitted by law any officer(s) or employee(s) who serve as Plan Administrator (including any such individual who formerly served as Plan Administrator) against all liabilities, damages, costs and expenses (including attorneys' fees and amounts paid in settlement of any claims approved by the Employer) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.
ARTICLE 9. - AMENDMENT AND TERMINATION
9.1. AMENDMENTS
The Employer shall have the right to amend the Plan from time to time, subject to Section 9.3, by an instrument in writing which has been executed on the employer's behalf by its duly authorized officer.
9.2. TERMINATION OF PLAN
This Plan is strictly a voluntary undertaking on the part of the employer and shall not be deemed to constitute a contract between the Employer and any eligible Employee (or any other employee) or a consideration for, or an inducement or condition of employment for, the performance of the services by any eligible employee (or other employee). The employer reserves the right to terminate the Plan at any time, subject to Section 9.3, by an instrument in writing which has been executed on the Employer's behalf by its duly authorized officer. Upon termination, the employer may (a) elect to continue to maintain the Trust to pay benefits hereunder as they become due as if the Plan had not terminated or (b) direct the Trustee to pay promptly to Participants (or their beneficiaries) all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any,. After Participants and their
beneficiaries are paid all Plan benefits to which they are entitled, all remaining assets of the Trust shall be returned to the Employer.
9.3. EXISTING RIGHTS
No amendment or termination of the Plan shall adversely affect the rights of any Participant with respect to all of the Participant's Account attributable to Elective Deferrals and any earnings attributable thereto, reduced by losses, if any, and the vested portion of any Additional Employer Contributions and earnings attributable thereto, reduced by losses, if any, on the date of such amendment or termination.
ARTICLE 10. - MISCELLANEOUS
10.1. PARTICIPANTS ARE UNSECURED CREDITORS
The Plan constitutes a mere promise by the Employer to make payments in accordance with the terms of the Plan and Participants and beneficiaries shall have the status of general unsecured creditors of the Employer. Nothing in the Plan will be construed to give any employee or any other person rights to any specific assets of the Employer or of any other person. In all events, it is the intent of the Employer that the Plan be treated as unfunded for tax purposes and for purposes of ERISA.
10.2. NON-ASSIGNABILITY
The benefits, payments, proceeds or claims of any Participant or beneficiary are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumberance, attachment, or garnishment by creditors of any Participant or any beneficiary of any Participant, nor shall any Participant or beneficiary have any right to anticipate, sell, transfer, assign, pledge, or encumber any of the benefits or payments or proceeds which he or she may expect to receive, contingently or otherwise, under the Plan.
10.3. LIMITATION OF PARTICIPANTS' RIGHTS
Nothing contained in the Plan shall confer upon any person a right to be employed or to continue in the employ of the Employer, or interfere in any way with the right of the Employer to terminate the employment of a Participant in the Plan at any time, with or without cause.
10.4. PARTICIPANTS BOUND
Any action with respect to the Plan taken by the Plan Administrator or the Employer or the Trustee or any action authorized by or taken at the direction of the Plan Administrator, the employer or the Trustee shall be conclusive upon all Participants and beneficiaries entitled to benefits under the Plan.
10.5. RECEIPT AND RELEASE
Any payment to any Participant or beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the employer, the Plan Administrator and the Trustee under the Plan, and the Plan Administrator may require such Participant or beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. If any Participant or beneficiary is determined by the Plan Administrator to be incompetent by reason of physical or mental disability (including minority) to give a valid receipt and release, the Plan Administrator may cause the payment or payments becoming due to such person to be made to another person for his or her benefit without responsibility on the part of the Plan Administrator the employer or the Trustee to follow the application of such funds.
10.6. GOVERNING LAW
The Plan shall be construed, administered, and governed in all respects under and by the laws of the Commonwealth of Massachusetts. If any provision shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.
10.7. HEADINGS AND SUBHEADINGS
Headings and subheadings in this Plan are inserted for convenience only and are not to be considered in the construction of the provisions hereof.
TRUST FOR THE ALPHA INDUSTRIES EXECUTIVE COMPENSATION PLAN
This Agreement made this day of January 3, 1995 by and between Alpha Industries, Inc. ("Company") and Merrill Lynch, an Illinois corporation (Trustee);
WHEREAS, Company has adopted a nonqualified deferred compensation Plan with the name "The Alpha Industries Executive Compensation Plan".
WHEREAS, Company has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan.
WHEREAS, Company wishes to establish a trust (the "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of Company's Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such time as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purpose of Title I of the Employee Retirement Income Security Act of 1974.
WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust
(a.) Company hereby deposits with Trustee in trust such cash and/or marketable securities, if any, listed in Appendix A, which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement.
(b.) The Trust hereby established is revocable; it shall become irrevocable upon a Change in Control, as defined herein.
(c.) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.
(d.) The principal of the Trust, and any earnings thereon, shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.
(e.) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary shall have any right to compel such additional deposits.
(f.) Trustee shall not be obligated to receive property unless prior thereto Trustee has agreed that such property is acceptable to Trustee and Trustee has received such reconciliation, allocation, investment or other information concerning, or representation with respect to, the property as Trustee may require. Trustee shall have no duty or authority to (a) require any deposits to be made under the Plan or to Trustee, (b) compute any amount to be deposited under the Plan to Trustee, or (c) determine whether amounts received by Trustee comply with the Plan. Assets of the Trust may, in Trustee's discretion, be held in an account with an affiliate of Trustee.
Section 2. Accounting for and Payments to Plan Participants and Their Beneficiaries.
(a.) At the request of the Company, the Trustee shall maintain and invest separate asset accounts corresponding to each participant, and such sub-accounts thereunder as may be requested by the Company. As of the last business day of each calendar quarter, the Trustee shall provide the Company with a statement of each participant's account reflecting the income, gains and losses (realized and unrealized), amounts of deferrals, and distributions of such account since the prior statement.
(b.) With respect to each Plan participant Company shall deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of the participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. The Payment Schedule shall be delivered to Trustee not more than 30 business days not fewer than 15 business days prior to the first date on which a payment is to be made to the Plan participant. Any change to a Payment Schedule shall be delivered to Trustee not more than 30 days nor fewer than 15 days prior to the date on which the first payment is to be made in accordance with the changed Payment Schedule. Except as otherwise provided herein, Trustee shall make payments to Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provisions for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid by Company, it being understood among the parties hereto that (1) Company shall on a timely basis provide Trustee specific information as to the amount of taxes to be withheld and (2) Company shall be obligated to receive such withheld taxes from Trustee and properly pay and report such amounts to the appropriate taxing authorities.
(c.) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan.
(d.) Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan, Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, Company shall make the balance of each payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient.
(e.) Trustee shall have no responsibility to determine whether the Trust is sufficient to meet the liabilities under the Plan, and shall not be liable for payments or Plan liabilities in excess of the value of the Trust's assets.
Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company Is Insolvent.
(a.) Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.
(b.) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1.) The Board of Directors and the Chief Executive Officer of Company (or, if there is no Chief Executive Officer, the highest ranking officer) shall have the duty to inform Trustee in writing of Company's Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has become Insolvent, Trustee shall promptly notify Company of such allegation, shall determine whether Company is Insolvent, and, pending such determination, Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries.
(2.) Unless Trustee has actual knowledge of Company's Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether company is Insolvent. Trustee may in all events rely on such evidence concerning Company's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company's solvency.
(3.) If at any time Trustee has determined that Company is Insolvent, Trustee
shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of The Trust for the benefit of Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of Company with respect to benefits due under the Plan or otherwise.
(4.) Trustee shall resume the payment of benefits to Plan participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that Company is not Insolvent (or is no longer Insolvent).
(c.) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants provided for hereunder during any such period of discontinuance; provided that Company has given Trustee the information with respect to such payments made during the period of discontinuance prior to resumption of payments by Trustee.
Section 4. Payments to Company.
Except as provided in Section 3 hereof, after the Trust becomes irrevocable, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payment of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan.
Section 5. Investment Authority.
(a.) Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by Company. All rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercised by or rest with Plan participants, except that voting rights with respect to Trust assets will be exercised by Company unless an investment adviser has been appointed pursuant to Section 5(c) and voting authority has been delegated to such investment adviser.
(b.) Company shall have the right at anytime, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercised by Company in a non fiduciary capacity without the approval or consent of any person in a fiduciary capacity.
(c.) Trustee may appoint one or more investment advisers who are registered as investment advisers under the Investment Advisers Act of 1940, who may be affiliates of Trustee, to provide investment advice on a discretionary or non-discretionary basis with respect to all or a specified portion of the assets of the Trust.
(d.) Only for the purpose of carrying out the directions of the Company, or the directions of one or more agents designated in writing by the Company to the Trustee, which agents may be designated with respect to a portion of the assets held by the Trustee, the Trustee, or Trustee's designee, is authorized and empowered:
(1.) To invest and reinvest Trust assets, together with the income therefrom, in common stock, preferred stock, convertible preferred stock, bonds, debentures, convertible debentures and bonds, mortgages, notes, commercial paper and other evidences of indebtedness (including those issued by Trustee), shares of mutual funds (which funds may be sponsored, managed or offered by an affiliate of Trustee), guaranteed investment contracts, bank investment contracts, other securities, policies of life insurance, annuity contracts, options, options to buy or sell securities or other assets, and all other property of any type (personal, real or mixed and tangible or intangible);
(2.) To deposit or invest all or any part of the assets of the Trust in savings accounts or certificates of deposit or other deposits in a bank or saving and loan association or other depository institution, including Trustee or any of its affiliates, provided with respect to such deposits with Trustee or an affiliate the deposits bear a reasonable interest rate;
(3.) To hold, manage, improve, repair and control all property, real or personal, forming part of the Trust; to sell, convey, transfer, exchange, partition, lease for any term, even extending beyond the duration of this Trust, and otherwise dispose of the same from time to time;
(4.) To hold in cash, without liability for interest, such portion of the Trust as is pending investments, or payment of expenses, or the distribution of benefits;
(5.) To take such actions as may be necessary or desirable to protect the Trust from loss due to the default on mortgages held in the Trust including the appointment of agents or trustees in such other jurisdictions as may seem desirable, to transfer property to such agents or trustees, to grant to such agents such powers as are necessary or desirable to protect the Trust, to direct such agent or trustee, or to delegate such power to direct, and to remove such agent or trustee;
(6.) To settle, compromise or abandon all claims and demands in favor of or against the Trust;
(7.) To exercise all of the further rights, powers. options and privileges granted, provided for, or vested in trustees generally under the laws of the state in which Trustee is incorporated as set forth above, so that the powers conferred upon Trustee herein shall not be in limitation of any authority conferred by law, but shall be in addition thereto:
(8.) To maintain accounts at, and execute transactions through, any brokerage or other firm, including any firm which is an affiliate of Trustee.
(9.) to register securities, or any other property, in its name or in the name of any nominee, including the name of any affiliate or the nominee name designated by any affiliate, with or without indication of the capacity in which property shall be held, or to hold securities in bearer form and to deposit any securities or other property in an depository or clearing corporation;
(10.) to make, execute and deliver, as Trustee, any and all deeds, leases, mortgages, conveyances, waivers, releases or other instruments in writing necessary or appropriate for the accomplishment of any of the powers listed in this Trust Agreement; and
(11.) generally to do all other acts necessary or appropriate for the protection of the property held by the Trust.
Section 6. Additional Powers of Trustee. To the extent necessary or which
it deems appropriate to implement its powers under Section 5 or otherwise to
fulfill any of its duties and responsibilities as trustee of the Trust, Trustee
shall have the following additional powers and authority This is former
subsection (b). to designate and engage the services of, and to delegate powers
and responsibilities to, such agents, representatives, advisers, counsel and
accountants ("Agents") as Trustee considers necessary or appropriate, any of
whom may be an affiliate of Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation, provided that the Trustee shall not
retain any Agent without the prior consent of the Company, unless either (i)
there are exigent circumstances that require the action before it would be
reasonably practical for the Trustee to first obtain the Company's approval, or
(ii) if the Company is insolvent, as provided in Section 3(a).
Section 7. Disposition of Income.
During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.
Section 8. Accounting by Trustee.
(a.) Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee. Within 90 days following the close of each calendar year and within 90 days after removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. Trustee may satisfy its obligation under this Section 8 by rendering to Company monthly statements setting forth the information required by this Section separately for the month covered by the statement.
Section 9. Responsibility and Indemnity of Trustee.
(a.) Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or
approval given by Company which is contemplated by, and in conformity with, the terms of the Plan and this Trust and is given in writing by Company. Trustee shall also incur no liability to any person for any failure to act in the absence of direction, request or approval from Company which is contemplated by, and in conformity with, the terms of this Trust. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute.
(b.) Company hereby indemnifies Trustee and each of its affiliates (collectively, the "Indemnified Parties") against, and shall hold them harmless from, any and all loss, claims, liability, and expense, including reasonable attorneys' fees, imposed upon or incurred by any Indemnified Party as a result of any acts taken, or any failure to act, in accordance with the directions from Company or any designee of Company, or by reason of the Indemnified Party's good faith execution of its duties with respect to the Trust, including, but not limited to, its holding of assets of the Trust, Company's obligations in the foregoing regard to be satisfied promptly by Company, provided such act or failure to act does not arise from the negligence, gross negligence, or willful misconduct of the Trustee. If Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust.
(c.) Trustee may consult with legal counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder.
(d.) Trustee may hire agents, accounts, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder.
(e.) Trustee shall have, without exclusion, all powers conferred on Trustee by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.
(f.) However, notwithstanding the provisions of Section 9(e) above, Trustee may loan to Company the proceeds of any borrowing against an insurance policy held as an asset of the Trust.
(g.) Notwithstanding any powers to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.
Section 10. Compensation and Expenses of Trustee.
Company shall pay all administrative expenses, but if not so paid, after written notice by Trustee to Company, the expenses shall be paid from the Trust.
Section 11. Resignation and Removal of Trustee.
(a.) Trustee may resign at any time by written notice to Company, which shall be effective 30 days after receipt of such notice unless Company and Trustee agree otherwise.
(b.) Trustee may be removed by Company on 30 days notice or upon shorter notice accepted by Trustee.
(c.) Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 60 days after receipt of notice of resignation, removal or transfer, unless Company extends the time limit, and provided that Trustee is provided assurance by Company reasonably satisfactory to Trustee that all fees and expenses reasonably anticipated will be paid.
(d.) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 12 hereof, by the effective date or resignation or removal under paragraph(s) (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust.
(e.) Upon settlement of the account and transfer of the Trust assets to the successor Trustee, all rights and privileges under this Trust Agreement shall vest in the successor Trustee and all responsibility and liability of Trustee with respect to the Trust and assets thereof shall terminate subject only to the requirement that Trustee execute all necessary documents to transfer the Trust assets to the successor Trustee.
Section 12. Appointment of Successor.
(a.) If Trustee resigns or is removed in accordance with Section 11(a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trustee powers under state law, as
a successor to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee, who shall have
all of the fights and powers of the former Trustee, including ownership rights
in the Trust assets. The former Trustee shall execute any instrument necessary
or reasonably requested by Company or the successor Trustee to evidence the
transfer.
(b.) The successor Trustee need not examine the records and act of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor Trustee shall not be responsible for and Company shall indemnify and defend the successor Trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee.
Section 13. Amendment or Termination.
(a.) This Trust Agreement may be amended by a written instrument executed by Trustee and Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable since the Trust is irrevocable in accordance with Section 1(b) hereof.
(b.) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to Company.
(c.) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, Company may terminate this Trust prior to the time all benefit
payments under the Plan have been made. All assets in the Trust at termination shall be returned to Company.
Section 14. Miscellaneous.
(a.) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.
(b.) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.
(c.) This Trust Agreement shall be governed by and construed in accordance with the laws of the state in which Trustee is incorporated as set forth above.
(d.) The provisions of Sections 2(d), 3(b)(3), 9(b) and 15 of this Agreement shall survive termination of this Agreement.
(e.) The rights, duties, responsibilities, obligations and liabilities of Trustee are as set forth in this Trust Agreement, and no provision of the Plan or any other documents shall affect such rights, responsibilities, obligations an liabilities. If there is a conflict between provisions of the Plan and this Trust Agreement with respect to any subject involving Trustee including but not limited to the responsibility, authority, or powers of Trustee, the provisions of this Trust Agreement shall be controlling.
(f.) For purposes of this Trust, Change of Control shall mean: The purchase or other acquisition by any person, entity or group of persons, within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Act"), or any comparable successor provisions, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or more of either the outstanding shares of common stock or the combined voting power of Company's then outstanding voting securities entitled to vote generally, or the approval by the stockholders of Company of a reorganization, merger, or consolidation, in each case, with respect to which persons who were stockholders of Company immediately prior to such reorganization, merger or consolidation do not immediately thereafter, own more than 50 percent of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Company's then outstanding securities, or a liquidation or dissolution of Company or of the sale of all or substantially all of Company's assets.
Section 15. Arbitration.
- Arbitration is final and binding on the parties.
- The parties waiving their right to seek remedies in court, including the right to jury trial.
- Pre-arbitration discovery is generally more limited than and different from court proceedings.
- The arbitrators' award is not required to include factual findings or level reasoning and any party's right to appeal or seek modification of rulings by the arbitrators is strictly limited.
- The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry.
Company agrees that all controversies which may arise between Company and either or both the Trustee and its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") in connection with the Trust, including, but not limited to, those involving any transactions, or the construction, performance, or breach of this or any other agreement between Company and either or both the Trustee and MLPF&S, whether entered into prior, on, or subsequent to the date hereof, shall be determined by arbitration. Any arbitration under this agreement shall be conducted only before the New York Stock Exchange, Inc., the American Stock Exchange, Inc., or arbitration facility provided by any other exchange of which MLPF&S is a member, the National Association of Securities Dealers, Inc., or the Municipal Securities Rulemaking Board, and in accordance with its arbitration rules then in force. Company may elect in the first instance whether arbitration shall be conducted before the New York Stock Exchange, Inc., the American Stock Exchange, Inc., other exchange of which MLPF&S is a member, the National Association of Securities Dealers. Inc. or the Municipal Securities Rulemaking Board, but if Company fails to make such election, by registered letter or telegram addressed to Merrill Lynch Trust Company, Employee Benefit Trust Operations, P.O. Box 30532, New Brunswick, New Jersey 08989-0532, before the expiration of five days after receipt of a written request from MLPF&S and/or the Trustee to make such election then MLPF&S and/or the Trustee may make such election. Judgment upon the award of arbitrators may be entered in any court, state or federal, having jurisdiction. No person shall bring a putative or certified class action to arbitration, nor seek to enforce any pre-dispute arbitration agreement against any person who has initiated in court a putative class action; who is a member of putative class who has not opted out of the class with respect to any claims encompassed by the putative class action until:
(i) the class certification is denied;
(ii) the class is decertified; or
(iii) the customer is excluded from the class by the court. Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any rights under this agreement except to the extent stated herein.
Section 16. Effective Date.
The effective date of this Trust Agreement shall be January 3, 1995.
IN WITNESS WHEREOF, Company and the Trustee have executed this Trust Agreement each by action of a duly authorized person,
By signing this Agreement, the undersigned Company acknowledges (1) that, in accordance with Section 15 of this Agreement, Company is agreeing in advance to arbitrate any controversies which may arise with either or both the Trustee or LPF&S (2) receipt of a copy of this Agreement.
EXHIBIT 10.E
ALPHA INDUSTRIES, INC.
1997 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Purpose. The appropriate purpose of this 1997 Non-Qualified Stock Option Plan for Non-Employee Directors is to attract and retain the services of experienced and knowledgeable independent directors of the Corporation for the benefit of the Corporation and its stockholders and to provide additional incentives for such independent directors to continue to work for the best interests of the Corporation and its stockholders through continuing ownership of its common stock.
2. Definitions. As used herein, each of the following terms has the indicated meaning:
"Annual Meeting" means the Corporation's annual meeting of stockholders or special meeting in lieu of annual meeting of stockholders at which one or more directors are elected.
"Board" means the Board of Directors of the Corporation.
"Corporation" means Alpha Industries, Inc.
"Fair Market Value" means the closing sale price quoted on the American Stock Exchange or such other national securities exchange or automated quotation system on which the Shares may be traded or quoted on the date of the granting of the Option.
"Non-Employee Director" means a person who, as of any applicable date, is a member of the Board and (i) is not an officer of the Corporation or a Subsidiary, or otherwise employed by the Corporation or a Subsidiary, (ii) does not receive compensation, either directly or indirectly, from the Corporation or a Subsidiary, for services rendered as a consultant or in any capacity other than as a member of the Board, except for an amount that does not exceed the dollar amount for which disclosure would be required pursuant to Rule 404(a) of Regulation S-K ("Regulation S-K") promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "1934 Act"), (iii) does not possess an interest in any other transaction for which disclosure would be required pursuant to Rule 404(a) of Regulation S-K, and (iv) is not engaged in a business relationship for which disclosure would be required pursuant to Rule 404(b) of Regulation S-K.
"Option" means the contractual right to purchase Shares upon the specific terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1) year after the date of grant of an Option pursuant to this Plan and ending ten years from the date of grant.
"Plan" means this Alpha Industries, Inc. 1997 Non-Qualified Stock Option Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.25 par value per share, of the Corporation.
"Subsidiary" means any corporation in an unbroken chain of corporations beginning with the Corporation if, at the time of grant of the Option, each of the corporations other than the last in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
3. Stock Subject to the Plan. The aggregate number of Shares that may be
issued and sold under the Plan shall be 100,000. The Shares to be issued upon
exercise of Options granted under this Plan shall be made available, at the
discretion of the Board, from (i) treasury Shares and Shares reacquired by the
Corporation for such purposes, including Shares purchased in the open market,
(ii) authorized but unissued Shares, and (iii) Shares previously reserved for
issuance upon exercise of Options which have expired or been terminated. If any
Option granted under this Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares covered thereby shall
become available for grant under additional Options under the Plan so long as it
shall remain in effect.
4. Administration of the Plan. The Plan shall be administered by the Board. The Board shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Option issued under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan.
5. Eligibility. Options shall be granted only to Non-Employee Directors.
6. Grant of Options.
(a) On the effective date of this Plan, each Non-Employee Director shall be granted an Option to purchase 15,000 Shares.
(b) Each year, immediately following the Corporation's Annual Meeting, each then Non-Employee Director shall be granted an Option to purchase 5,000 Shares.
(c) Upon initial election by the stockholders or appointment by the Board as a Non-Employee Director, immediately following the Annual Meeting at which such Non-Employee Director is first elected by the stockholders or immediately following the meeting of the Board at which such Non-Employee Director is appointed by the Board, each Non-Employee Director shall be granted an Option to purchase 15,000 Shares.
7. Terms of Options and Limitations Thereon.
(a) Option Agreement. Each Option granted under this Plan shall be evidenced by an Option agreement between the Corporation and the Option holder and shall be upon such terms and conditions, not inconsistent with this Plan, as the Board may determine.
(b) Price. The price at which any Shares may be purchased pursuant to the exercise of an Option shall be the greater of the Fair Market Value of the Shares on the date of grant or par value.
(c) Exercise of Option. Each Option granted under this Plan may be exercised as follows:
(i) beginning on the first anniversary of the date of grant, for up to 20% of the Shares covered by the Option; and
(ii) beginning on each anniversary of the date of grant thereafter, for up to an additional 20% of such Shares for each additional year, until, on the fifth anniversary of the date of grant, the Option may be exercised as to 100% of the Shares covered by the Option, until the expiration of the Option Exercise Period.
Options may be exercised in whole or in part, from time to time, only during the Option Exercise Period, by the giving of written notice, signed by the holder of the Option, to the Corporation stating the number of Shares with respect to which the Option is being exercised, accompanied by full payment for such Shares pursuant to section 8(a) hereof; provided however, (i) if a person to whom an Option has been granted ceases to be a Non-Employee Director during the Option Exercise Period by reason of retirement, death or any reason, other than termination for cause, such Option shall be exercisable by him or her or by the executors, administrators, legatees or distributees of his or her estate until the earlier of (A) the end of the Option Exercise Period or (B) 12 months following his or her retirement or death or the date on which he or she ceased to be a Non-Employee Director; and (ii) if a person to whom an Option has been granted ceases to be a Non-Employee Director of the Corporation by reason of termination for cause, such Option shall terminate as of the date such person ceased to be a Non-Employee Director. Termination for cause shall be defined as termination on account of any act of (i) fraud or intentional misrepresentation, or (ii) embezzlement, misappropriation or conversion of assets or opportunities of the Corporation or any Subsidiary.
(d) Non-Assignability. No Option, or right or interest in an Option, shall be assignable or transferable by the holder, except by will, the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined in the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder), and during the lifetime of the holder shall be exercisable only by him or her.
8. Payment.
(a) The purchase price of Shares upon exercise of an Option shall be paid
by the Option holder in full upon exercise, and may be paid (i) in cash, (ii) by
delivery of Shares valued at Fair Market Value on the date of exercise,
including, to the extent permitted under the Rule 16b-3 as defined in Paragraph
12(c), below, exempting certain transactions from the short swing trading
provisions of Section 16 of the 1934 Act, by way of so-called "cashless
exercise" and the netting of the number of Shares issuable upon exercise against
that number of Shares subject to the Option having an aggregate Fair Market
Value equal to the aggregate exercise price, or (iii) any combination of cash
and Shares, as the Board may determine.
(b) No Shares shall be granted under this Plan or issued or transferred upon exercise of any Option under this Plan unless and until all legal requirements applicable to the issuance or transfer of such Shares, and such other requirements as are consistent with the Plan, have been complied with to the satisfaction of the Board, including without limitation those described in Paragraph 12 hereof.
9. Stock Adjustments.
(a) If the Corporation is a party to any merger or consolidation, any purchase or acquisition of property or stock, or any separation, reorganization or liquidation, the Board (or, if the Corporation is not the surviving corporation, the board of directors of the surviving corporation) shall have the power to make arrangements, which shall be binding upon the holders of unexpired Options, for the substitution of new options for, or the assumption by another corporation of, any unexpired Options then outstanding hereunder.
(b) If by reason of recapitalization, reclassification, stock split, combination of shares, separation (including a spin-off) or dividend on the stock payable in Shares, the outstanding Shares of the Corporation are increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Corporation, the Board shall conclusively determine the appropriate adjustment in the exercise prices of outstanding Options and in the number and kind of shares as to which outstanding Options shall be exercisable, in such manner as to result in the Options being exercisable.
(c) In the event of a transaction of the type described in paragraphs (a) and (b) above, the total number of Shares on which Options may be granted under this Plan shall be appropriately adjusted by the Board.
10. Change of Control Provisions.
(a) Notwithstanding any other provision of the Plan to the contrary, in the event of a Change of Control, any Options outstanding as of the date such Change of Control is determined to have occurred and not then exercisable shall become fully exercisable to the full extent of the original grant.
(b) A "Change of Control" shall mean:
(i) there shall have been consummated (a) any consolidation or merger of the Corporation in which the Corporation is not the continuing or surviving entity pursuant to which the Shares are converted into cash,
securities or other property, other than a merger of the Corporation in which
the ownership by the Corporation's stockholders of the securities in the
surviving entity is in the same proportion as the ownership by the Corporation's
stockholders of the stock in the Corporation immediately prior to the merger or
(b) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the assets of the
Corporation; or
(ii) the stockholders of the Corporation have approved any plan or proposal for the liquidation or dissolution of the Corporation; or
(iii) any person (as that term is used in Sections 13(d) and 14(d)(2) of the 1934 Act) has become the beneficial owner (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 30% or more of the Corporation's outstanding Shares; or
(iv) that during any period of two consecutive years, individuals who, at the beginning of such period, constitute the entire Board shall cease, for any reason, to constitute a majority thereof, unless the election, or the nomination for election by the Corporation's stockholders, of each new director was approved by a vote of at least three-quarters of the directors then still in office who were directors at the beginning of the period.
11. No Rights Other Than Those Expressly Created. No person affiliated with the Corporation or any Subsidiary or other person shall have any claim or right to be granted an Option hereunder. Neither this Plan nor any action taken hereunder shall be construed as (i) giving any Option holder any right to continue to be affiliated with the Corporation, (ii) giving any Option holder any equity or interest of any kind in any assets of the Corporation, or (iii) creating a trust of any kind or a fiduciary relationship of any kind between the Corporation and any such person. No Option holder shall have any of the rights of a stockholder with respect to Shares covered by an Option, until such time as the Option has been exercised and Shares have been issued to such person.
12. Miscellaneous.
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or foreign laws, the Corporation may be required to collect income or other taxes upon the grant of an Option to, or exercise of an Option by, a holder. The Corporation may require, as a condition to the exercise of an Option, that the recipient pay the Corporation, at such time as the Board determines, the amount of any taxes which the Board may determine is required to be withheld.
(b) Securities Law Compliance. Upon exercise of an Option, the holder shall be required to make such representations and furnish such information as may, in the opinion of counsel for the Corporation, be appropriate to permit the Corporation to issue or transfer the Shares in compliance with the provisions of applicable federal or state securities laws. The Corporation, in its discretion, may postpone the issuance and delivery of Shares, upon any exercise
of an Option, until completion of such registration or other qualification of such Shares under any federal or state laws, or stock exchange listing, as the Corporation may consider appropriate. The Corporation intends to register or qualify the Shares under federal and state securities laws, but is not obligated to register or qualify the Shares under such laws and may refuse to issue such Shares if neither registration nor exemption therefrom is practical. The Board may require that prior to the issuance or transfer of any Shares upon exercise of an Option, the recipient enter into a written agreement to comply with any restrictions on subsequent disposition that the Board or the Corporation deems necessary or advisable under any applicable federal and state securities laws. Certificates representing the Shares issued hereunder may contain a legend reflecting such restrictions.
(c) Compliance with Rule 16b-3. With respect to a person subject to
Section 16 of the 1934 Act, transactions under this Plan are intended to comply
with all applicable conditions of Rule 16b-3 or its successors ("Rule 16b-3")
under the 1934 Act. To the extent any provision of the Plan or action by the
administrators of the Plan fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the administrators of the
Plan.
(d) Indemnity. The Board shall not be liable for any act, omission, interpretation, construction or determination made in good faith in connection with their responsibilities with respect to the Plan, and the Corporation hereby agrees to indemnify the members of the Board, in respect of any claim, loss, damage, or expense (including counsel fees) arising from any such act, omission, interpretation, construction or determination, to the full extent permitted by law.
(e) Options Not Deemed Incentive Stock Options. Options granted under the Plan shall not be deemed incentive stock options as that term is defined in Section 422 of the Internal Revenue Code of 1986, as amended.
13. Effective Date; Amendment; Termination.
(a) The effective date of this Plan shall be the date of the approval of the Board.
(b) The Board may at any time, and from time to time, amend, suspend or terminate this Plan in whole or in part, provided, however, that the provisions of this Plan relating to the amount and price of securities to be awarded and the timing of such awards may not be amended more than once every six months, other than to comport with changes in the Internal Revenue Code, the Employee Retirement Income Security Act, or the rules thereunder. However, except as provided herein, no amendment, suspension or termination of this Plan may affect the rights of any person to whom an Option has been granted without such person's consent.
(c) This Plan shall terminate five years from its effective date, and no Option shall be granted under this Plan thereafter, but such termination shall not affect the validity of Options granted prior to the date of termination.
Date of Board of Directors Adoption: September 15, 1997
1. | Purpose: The FY06 Executive Incentive Plan (theFY06 Plan) is designed to reward key management employees for achieving certain financial and business objectives. | |
2. | Plan Period: The FY06 Plan covers the period from October 1, 2005 through September 29, 2006. | |
3. | Eligibility: This program applies to the Chief Executive Officer and his direct reporting senior executives. Other key employees may be added based upon the recommendation of the Chief Executive Officer and subsequent approval of the Compensation Committee. Those employees not covered by this plan may be eligible for other programs established by Skyworks. | |
4. | Incentive Targets: Participants are eligible to earn a percentage of their base salary for attaining certain performance objectives. Nominal, target and stretch incentive awards have been established as follows (shown as a percentage of the participants base salary): |
Incentive At | Incentive At | Incentive At | ||||||||||
Name | Nominal | Target | Stretch | |||||||||
CEO
|
30 | % | 100 | % | 200 | % | ||||||
CFO, VP Sales,
Business Unit
General Managers
|
20 | % | 60 | % | 120 | % | ||||||
Other VPs
|
20 | % | 50 | % | 100 | % | ||||||
Special Participants
|
10 | % | 40 | % | 80 | % |
5. | FY06 Metrics: The performance metrics for FY06 are as follows: |
Measurement Criteria | Nominal | Target | Stretch | |||
Corporate Revenue
|
REDACTED | REDACTED | REDACTED | |||
Corporate Operating Income
1
|
REDACTED | REDACTED | REDACTED | |||
Corporate Gross Margin Note: GM Q4 Exit Rate
|
REDACTED | REDACTED | REDACTED | |||
Quality (RMA$ reduction)
2
|
REDACTED | REDACTED | REDACTED |
1 | After incentive. | |
2 | Percent reduction in return material authorization (RMA) dollars relative to FY05 actual of $REDACTED. |
1
Corporate | ||||||||||||||||
Corporate | Gross | |||||||||||||||
Operating | Margin | Corporate | ||||||||||||||
Group | Income 3 | % 4 | Revenue 5 | Quality 6 | ||||||||||||
CEO, Finance, Legal,
Investor Relations,
Human Resources
|
40 | % | 20 | % | 20 | % | 20 | % | ||||||||
Quality
|
30 | % | 30 | % | N/A | 40 | % | |||||||||
Operations
|
40 | % | 40 | % | N/A | 20 | % | |||||||||
Sales, Business Units
|
20 | % | 20 | % | 40 | % | 20 | % |
6. | How the Plan Works: Upon completion of the Fiscal Year, the Chief Executive Officer (CEO) will provide the Compensation Committee (Committee) with recommendations for incentive award payments for participants of the plan and will request approval of actual amounts to be paid to each participant. The Committee will determine the appropriate distribution of the authorized incentive pool based on input from the CEO. | |
7. | Administration: Actual performance between the Nominal and Target metrics will be paid on a linear sliding scale beginning at the Nominal percentage and moving up to the Target percentage. The same linear scale will apply for performance between Target and Stretch metrics. In order to fund the incentive plans and insure the overall Companys financial performance, the following terms apply. |
| No incentive award will be paid unless the Company meets its Nominal operating income goal after accounting for any incentive award payments. | ||
| Skyworks CEO, subject to approval by the Compensation Committee, retains discretion to award above Stretch. |
8. | Taxes: All awards are subject to federal, state, local and social security taxes. Payments under this Plan will not affect the base salary, which is used as the basis for Skyworks benefits program. |
3 | Total operating income, excluding interest and all other non-operating income and expenses such as foreign currency gain or loss. | |
4 | Net revenue less cost of goods sold (manufacturing costs, license fees and obsolescence). | |
5 | Net annual revenue. | |
6 | Percent reduction in return material authorization (RMA) dollars. |
2
2005 | 2004 | 2003 | 2002 | 2001 | ||||||||||||||||
Income (loss) before
provision (benefit)
for taxes on income
|
$ | 40,989 | $ | 26,396 | $ | (53,625 | ) | $ | (255,653 | ) | $ | (317,305 | ) | |||||||
|
||||||||||||||||||||
Add Fixed charges
net of capitalized
Interest
|
17,874 | 21,221 | 24,868 | 6,587 | 1,617 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Income before taxes
and fixed charges
(net of capitalized
interest)
|
58,863 | 47,617 | (28,757 | ) | (249,066 | ) | (315,688 | ) | ||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Fixed charges:
|
||||||||||||||||||||
|
||||||||||||||||||||
Interest
|
13,001 | 15,771 | 19,467 | 4,227 | | |||||||||||||||
Amortization of debt issuance costs
|
1,596 | 2,176 | 1,936 | | | |||||||||||||||
|
||||||||||||||||||||
Estimated interest
component of
rental expense
|
3,277 | 3,274 | 3,465 | 2,360 | 1,617 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total
|
17,874 | 21,221 | 24,868 | 6,587 | 1,617 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings
before taxes and
fixed charges, to
fixed charges
|
3.3 | 2.2 | (1 | ) | (2 | ) | (3 | ) | ||||||||||||
|
(1) | As a result of losses incurred in fiscal 2003, the Company was unable to fully cover fixed charges. The amount of such deficiency during this period was approximately $54 million | |
(2) | As a result of the loss incurred in fiscal 2002, the Company was unable to fully cover fixed charges. The amount of such deficiency during fiscal 2002 was approximately $256 million | |
(3) | As a result of the loss incurred in fiscal 2001, the Company was unable to fully cover fixed charges. The amount of such deficiency during fiscal 2001 was Approximately $317 million |
Name
Jurisdiction Of Incorporation
China
France
Canada
Japan
India
Korea
United Kingdom
Denmark
Mauritius
Finland
Mexico
Delaware
China
Hong Kong
Singapore
Taiwan
Germany
Delaware
Maryland
1. | I have reviewed this annual report on Form 10-K of Skyworks Solutions, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this annual report on Form 10-K of Skyworks Solutions, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report and | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; | ||
c) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
(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. |
(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. |