þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 04-2302115 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
20 Sylvan Road, Woburn, Massachusetts | 01801 | |
(Address of principal executive offices) | (Zip Code) | |
Registrants telephone number, including area code: | (781) 376-3000 |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Class | Outstanding at May 1, 2008 | |
Common Stock, par value $.25 per share | 162,996,011 |
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EXHIBIT 32.2 |
i
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
2008
2007
2008
2007
$
201,708
$
180,210
$
412,241
$
376,240
121,341
111,508
249,536
232,222
80,367
68,702
162,705
144,018
36,581
31,383
70,675
61,795
23,346
23,750
48,633
47,778
1,871
536
3,803
1,072
5,473
61,798
55,669
123,111
116,118
18,569
13,033
39,594
27,900
(1,769
)
(4,114
)
(3,977
)
(7,363
)
1,883
2,903
3,933
5,058
18,683
11,822
39,550
25,595
2,010
(375
)
3,799
1,361
$
16,673
$
12,197
$
35,751
$
24,234
$
0.10
$
0.08
$
0.22
$
0.15
161,165
160,687
160,742
160,935
162,982
161,972
162,740
162,125
Three-months
Six-months Ended
Ended
March 28,
March 30,
March 28,
March 30,
(In thousands)
2008
2007
2008
2007
677
276
1,511
401
2,620
1,622
3,765
2,108
2,346
2,147
5,374
3,562
Table of Contents
As of
March 28,
September 28,
2008
2007
(Unaudited)
$
222,157
$
241,577
5,700
6,302
6,502
164,604
167,319
94,272
82,109
8,926
10,511
496,261
513,718
168,881
153,516
491,929
480,890
22,568
13,442
14,528
14,459
14,124
13,883
$
1,208,291
$
1,189,908
$
50,000
$
99,335
76,691
56,417
28,967
28,392
8,306
13,079
163,964
197,223
200,000
200,000
6,879
6,338
370,843
403,561
40,720
40,275
1,400,257
1,382,230
(33,473
)
(31,855
)
(568,338
)
(604,089
)
(1,718
)
(214
)
837,448
786,347
$
1,208,291
$
1,189,908
Table of Contents
Six-months Ended
March 28,
March 30,
2008
2007
$
35,751
$
24,234
10,650
6,071
21,993
18,830
2,720
673
4,112
1,072
892
1,290
5,016
3,633
419
(300
)
(510
)
58
209
241
(198
)
2,474
(2,197
)
(6,730
)
5,646
2,376
114
20,274
(12,373
)
(3,654
)
(5,271
)
95,873
41,642
(37,416
)
(17,577
)
(32,627
)
32,400
353,533
(29,900
)
(389,433
)
(67,543
)
(53,477
)
200,000
(9,929
)
(130,000
)
(6,189
)
(49,335
)
200
(1,619
)
(30,667
)
3,004
4,318
(47,750
)
27,533
(19,420
)
15,698
241,577
136,749
$
222,157
$
152,447
$
482
$
483
$
3,747
$
8,238
Table of Contents
Table of Contents
March 28,
September 28,
2008
2007
$
8,150
$
6,624
52,312
48,128
33,810
27,357
$
94,272
$
82,109
March 28,
September 28,
2008
2007
$
9,423
$
9,423
4,453
4,394
39,974
39,730
25,372
24,485
367,304
343,551
23,792
12,671
470,318
434,254
(301,437
)
(280,738
)
$
168,881
$
153,516
Table of Contents
Weighted
March 28, 2008
September 28, 2007
Average
Gross
Net
Gross
Net
Amortization
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Period
Amount
Amortization
Amount
Amount
Amortization
Amount
(Years)
$
491,929
$
$
491,929
$
480,890
$
$
480,890
5-10
$
11,850
$
(6,965
)
$
4,885
$
10,550
$
(6,399
)
$
4,151
5-10
21,210
(8,164
)
13,046
12,700
(6,678
)
6,022
3
900
(150
)
750
.5-3
2,649
(2,031
)
618
122
(122
)
36,609
(17,310
)
19,299
23,372
(13,199
)
10,173
3,269
3,269
3,269
3,269
$
39,878
$
(17,310
)
$
22,568
$
26,641
$
(13,199
)
$
13,442
Three-months Ended
Six-months Ended
March 28,
2008
March 30,
2007
March 28,
2008
March 30,
2007
$
2,180
$
536
$
4,112
$
1,072
Goodwill and Intangible Assets
Developed
Customer
Patents
Goodwill
Technology
Relationships
Trademarks
and Other
Total
$
480,890
$
10,550
$
12,700
$
3,269
$
122
$
507,531
13,759
1,300
8,510
3,427
26,996
(2,720
)
(2,720
)
$
491,929
$
11,850
$
21,210
$
3,269
$
3,549
$
531,807
Table of Contents
2008
2009
2010
2011
2012
$
6,933
$
4,406
$
4,406
$
4,106
$
3,560
March 28,
September 28,
2008
2007
$
$
49,335
200,000
200,000
$
200,000
$
249,335
49,335
$
200,000
$
200,000
Table of Contents
March 28,
September 28,
2008
2007
$
$
49,335
50,000
50,000
$
50,000
$
99,335
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
2008
2007
2008
2007
$
$
$
$
5,473
$
$
$
$
5,473
Table of Contents
License and
Facility
Software
Workforce
Asset
Closings
Write-offs
Reductions
Impairments
Total
$
105
$
9,583
$
13,070
$
4,197
$
26,955
(6,426
)
(4,197
)
(10,623
)
$
105
$
3,157
$
13,070
$
$
16,332
4,483
(83
)
530
4,930
(128
)
(508
)
636
(419
)
(419
)
(1,690
)
(1,847
)
(13,242
)
(16,779
)
$
2,770
$
300
$
994
$
$
4,064
(75
)
75
(812
)
(225
)
(608
)
(1,645
)
$
1,958
$
$
461
$
$
2,419
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(In thousands)
2008
2007
2008
2007
$
2,743
$
2,308
$
5,047
$
3,085
766
1,018
2,367
1,586
244
232
529
523
1,413
160
1,814
199
379
327
795
678
98
98
$
5,643
$
4,045
$
10,650
$
6,071
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(In thousands)
2008
2007
2008
2007
`
677
276
1,511
401
2,620
1,622
3,765
2,108
2,346
2,147
5,374
3,562
$
5,643
$
4,045
$
10,650
$
6,071
Three and Six-months Ended
March 28,
March 30,
2008
2007
51.56
%
57.32
%
2.93
%
4.68
%
3.49
%
4.68
%
0.00
0.00
4.42
4.57
5.80
5.86
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(In thousands, except per share amounts)
2008
2007
2008
2007
$
16,673
$
12,197
$
35,751
$
24,234
161,165
160,687
160,742
160,935
1,817
1,285
1,998
1,190
162,982
161,972
162,740
162,125
$
0.10
$
0.08
$
0.22
$
0.15
$
0.10
$
0.08
$
0.22
$
0.15
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(In thousands)
2008
2007
2008
2007
$
16,673
$
12,197
$
35,751
$
24,234
(768
)
(1,504
)
$
15,905
$
12,197
$
34,247
$
24,234
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
2008
2007
2008
2007
100.0
%
100.0
%
100.0
%
100.0
%
60.2
61.9
60.5
61.7
39.8
38.1
39.5
38.3
18.1
17.4
17.2
16.4
11.6
13.2
11.8
12.7
0.9
0.3
0.9
0.3
1.5
30.6
30.9
29.9
30.9
9.2
7.2
9.6
7.4
(0.8
)
(2.3
)
(1.0
)
(2.0
)
0.9
1.6
1.0
1.3
9.3
6.5
9.6
6.7
1.0
(0.2
)
0.9
0.4
8.3
%
6.7
%
8.7
%
6.3
%
Table of Contents
We increased revenues by $36.0 million, a 9.6% increase for the six-month
period ended March 28, 2008 as compared to the same period in the prior year, principally
due to diversifying our product portfolio and entering new, adjacent markets, as well
as adding new mobile platforms customers and increasing our front-end module content at
existing customers.
We generated $95.9 million in cash from operations in the six-month period ended March
28, 2008, an increase of $54.3 million from the comparable six-month period ended March 30,
2007.
We expanded our catalog business and worldwide distribution network allowing
us to sell into a broader set of end markets including broadband, industrial, medical,
computing, wireless networking and cellular infrastructure. We increased gross profit by
$11.7 million in the second quarter of fiscal 2008 (a gross profit margin of 39.8%) as
compared to the same period in 2007, and by $18.7 million during the six-month period ended
March 28, 2008 as compared to the same period in the prior year (a gross profit margin of
39.5%). This gross profit margin improvement is principally the result of a richer revenue
mix, higher equipment efficiency cycle times and factory utilization, progress on yield
improvement initiatives and, year-over-year material cost reductions and increased overall
revenues.
We increased operating income to $39.6 million for the first six-month period of fiscal
2008 as compared to operating income of $27.9 million in the corresponding period of fiscal
2007. This 41.9% increase in operating income was primarily the result of margin
improvements driven by improvement in yields, equipment efficiency cycle times, increased
return on invested capital and increased revenue.
In October 2007, we paid $32.6 million in cash to acquire certain assets from two
separate companies. We acquired raw materials, die bank, finished goods, proprietary GaAs
PA/FEM designs and related intellectual property in a business combination from Freescale
Semiconductor. We also acquired sixteen fundamental HBT and RF MEMs patents from another
company in an asset acquisition, and in November 2007 we retired the entire $49.3 million
balance of our Junior Notes and in the process reduced the future potential dilution of our
share base.
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
201,708
11.9
%
$
180,210
$
412,241
9.6
%
$
376,240
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
80,367
17.0
%
$
68,702
$
162,705
13.0
%
$
144,018
39.8
%
38.1
%
39.5
%
38.3
%
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
36,581
16.6
%
$
31,383
$
70,675
14.4
%
$
61,795
18.1
%
17.4
%
17.2
%
16.4
%
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
23,346
(1.7
)%
$
23,750
$
48,633
1.8
%
$
47,778
11.6
%
13.2
%
11.8
%
12.7
%
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
1,871
249.1
%
$
536
$
3,803
254.8
%
$
1,072
0.9
%
0.3
%
0.9
%
0.3
%
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
0.0
%
$
$
100.0
%
$
5,473
0.0
%
0.0
%
0.0
%
1.5
%
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
1,769
(57.0
)%
$
4,114
$
3,977
(46.0
)%
$
7,363
0.8
%
2.3
%
1.0
%
2.0
%
Table of Contents
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
1,883
(35.1
)%
$
2,903
$
3,933
(22.2
)%
$
5,058
0.9
%
1.6
%
1.0
%
1.3
%
Three-months Ended
Six-months Ended
March 28,
March 30,
March 28,
March 30,
(dollars in thousands)
2008
Change
2007
2008
Change
2007
$
2,010
(636.0
)%
$
(375
)
$
3,799
179.2
%
$
1,361
1.0
%
(0.2
)%
0.9
%
0.4
%
Table of Contents
Six- months Ended
(dollars in thousands)
March 28, 2008
March 30, 2007
$
241,577
$
136,749
95,873
41,642
(67,543
)
(53,477
)
(47,750
)
27,533
$
222,157
$
152,447
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Maximum Number (or
Approximately
Total Number of
Dollar Value) of
Shares Purchased as
Shares that May Yet
Part of Publicly
Be Purchased Under
Total Number of
Average Price Paid
Announced Plans or
the Plans or
Period
Shares Purchased
per Share
Programs
Programs
7,075
(1)
$
8.74
N/A
(2)
N/A
(2)
634
(1)
$
8.26
N/A
(2)
N/A
(2)
1,604
(1)
$
8.06
N/A
(2)
N/A
(2)
22,435
(1)
$
7.78
N/A
(2)
N/A
(2)
5,319
(1)
$
6.71
N/A
(2)
N/A
(2)
(1)
All shares of common stock reported in the table above were repurchased by Skyworks at the
fair market value of the common stock on February 24, 2008, February 29, 2008, March 6, 2008,
March 7, 2008, and March 20, 2008, respectively, in connection with the satisfaction of tax
withholding obligations under restricted stock agreements between Skyworks and certain of its
key employees.
(2)
We have no publicly announced plans or programs.
Shares Voted
Shares Voted
Votes Withheld/
For
Against
Abstentions
127,719,727
16,685,381
127,634,933
16,770,176
126,954,704
17,450,405
99,696,165
22,863,377
409,234
121,523,340
1,107,872
337,563
142,815,747
1,253,053
366,310
Table of Contents
Number
Description
Skyworks Solutions, Inc. Non-Qualified Employee Stock Purchase Plan, as amended
Severance and Change in Control Agreement between the Company and David J.
Aldrich dated January 22, 2008
Severance and Change in Control Agreement between the Company and Liam K.
Griffin dated January 22, 2008
Severance and Change in Control Agreement between the Company and George M.
LeVan dated January 22, 2008
Severance and Change in Control Agreement between the Company and Gregory L.
Waters dated January 22, 2008
Severance and Change in Control Agreement between the Company and Mark V.B.
Tremallo dated January 22, 2008
Severance and Change in Control Agreement between the Company and Donald W.
Palette dated January 22, 2008
Severance and Change in Control Agreement between the Company and Bruce J.
Freyman dated January 22, 2008
Severance and Change in Control Agreement between the Company and Stanley A.
Swearingen dated January 22, 2008
Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Form of Restricted Stock Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Form of Stock Option Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan, as amended
Certification of the Companys Chief Executive Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a- 14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Companys Chief Financial Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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
*
- Filed herewith.
Table of Contents
SKYWORKS SOLUTIONS, INC.
By:
/s/ David J. Aldrich
David J. Aldrich, President and Chief
Executive Officer (Principal Executive Officer)
By:
/s/ Donald W. Palette
Donald W. Palette, Chief Financial Officer
Vice President (Principal Accounting and Financial Officer)
Table of Contents
Number
Description
Skyworks Solutions, Inc. Non-Qualified Employee Stock Purchase Plan, as amended
Severance and Change in Control Agreement between the Company and David J.
Aldrich dated January 22, 2008
Severance and Change in Control Agreement between the Company and Liam K.
Griffin dated January 22, 2008
Severance and Change in Control Agreement between the Company and George M.
LeVan dated January 22, 2008
Severance and Change in Control Agreement between the Company and Gregory L.
Waters dated January 22, 2008
Severance and Change in Control Agreement between the Company and Mark V.B.
Tremallo dated January 22, 2008
Severance and Change in Control Agreement between the Company and Donald W.
Palette dated January 22, 2008
Severance and Change in Control Agreement between the Company and Bruce J.
Freyman, dated January 22, 2008
Severance and Change in Control Agreement between the Company and Stanley A.
Swearingen dated January 22, 2008
Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Form of Restricted Stock Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Form of Stock Option Agreement under Skyworks Solutions, Inc. 2008 Director Long-Term Incentive Plan
Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan, as amended
Certification of the Companys Chief Executive Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification of the Companys Chief Financial Officer pursuant to Securities
Exchange Act of 1934, as amended, Rules 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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
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
Offering Period | Offering Period | |
Commencement Dates | Termination Dates | |
Each February 1
Each August 1 |
Each July 31
Each January 31 |
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(i) | to determine when and how purchase rights to purchase shares of Common Stock shall be granted and the provisions of each Offering Period or Special Offering Period (which need not be identical); | ||
(ii) | to designate from time to time which participating organization of the Company shall be eligible to participate in the Plan; | ||
(iii) | to determine the Offering Commencement Date and Offering Termination Date of any Offering Period or Special Offering Period; | ||
(iv) | to increase or decrease the maximum number of shares which may be purchased by an eligible employee in any Offering Period or Special Offering Period; | ||
(v) | to amend the Plan as provided in Article 14; and | ||
(vi) | generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interest of the Company and the participating organizations. |
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Re: | Amended and Restated Change of Control / Severance Agreement |
1. | Termination of Employment Related to Change of Control | |
1.1 | If: (i) a Change of Control occurs while you are employed by Skyworks as Chief Executive Officer, and (ii) your employment with Skyworks is terminated within two (2) years after the Change of Control, by Skyworks without Cause (as defined below) or by you for any reason, then you will receive the benefits provided in Section 1.3 below. | |
1.2 | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): |
1.3 | Subject to the provisions of Section 7, (i) on the date of any termination described in Section 1.1 (or such later date as may be required by Section 7), Skyworks will pay you a lump sum equal to two and one-half (2 1 / 2 ) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control and (b) the greater of (1) the average of your three most recent annual cash bonuses received prior to the year in which the Change of Control occurs, whether or not includable in gross income for federal income tax purposes, and (2) your target annual cash bonus opportunity for the year in which the Change of Control occurs (without regard to the relative achievement of any performance milestones which would otherwise impact payment of the target bonus); and (ii) on the date of any termination described in Section 1.1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of thirty (30) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |
1.4 | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to the amount payable under Section 1.3, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. Notwithstanding anything contained in this letter to the contrary, any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. | |
2. | Termination Without Cause or for Good Reason | |
2.1 | If, while you are employed by Skyworks as Chief Executive Officer, (i) your employment with Skyworks is terminated by Skyworks without Cause, or (ii) you terminate your employment with Skyworks for Good Reason, then you will receive the benefits specified in Section 2.4 below. If your employment is terminated by Skyworks for Cause or by you without Good Reason, you will not be entitled to receive the benefits |
2.2 | Cause means: (i) deliberate dishonesty significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; (ii) conduct on your part constituting an act of moral turpitude; (iii) willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; (iv) incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called, with you present and voting and, if you wish, with your legal counsel present. | |
2.3 | Good Reason means (i) a material diminution in your authority, duties or responsibility from those in effect on the date of this agreement; (ii) a material diminution in your base salary as in effect on the date hereof or as the same may be increased from time to time; (iii) a requirement that you report to a corporate officer or employee instead of reporting directly to the Board; (iv) a material diminution in the budget over which the you retain authority; (v) a material change in your office location as in effect on the date hereof; and (vi) any material breach of this agreement by Skyworks; provided, however, that a termination for Good Reason can occur only if (i) you have given Skyworks a notice of the existence of a condition giving rise to Good Reason and Skyworks has not cured the condition giving rise to Good Reason within thirty (30) days after receipt of such notice, and (ii) such notice is given within ninety (90) days after the initial occurrence of the condition giving rise to Good Reason and further provided that a termination for Good Reason shall occur 30 days after such failure to cure. | |
2.4 | Subject to the provisions of Section 7, (i) on the date of any termination described in the first sentence of Section 2.1 (or such later date as may be required by Section 7), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to such termination and (b) the greater of (1) the average of your three most recent annual cash bonuses received prior to the year in which the termination of employment occurs, whether or not includable in gross income for federal income tax purposes, and (2) your target annual cash bonus opportunity for the year in which the termination of employment occurs (without regard to the relative achievement of any performance milestones which would otherwise impact payment of the target bonus); and (ii) on the date of any termination described in the first sentence of Section 2.1, all of your Skyworks stock options will become immediately exercisable and, except as otherwise stated in this agreement, remain exercisable for a period of two (2) years after the termination date, subject to their other terms and conditions, each outstanding restricted stock award shall become immediately vested, and each outstanding performance share award shall be deemed earned as to the number of shares that would have been earned pursuant to the terms of such award as of the day prior to the date of such termination, and such shares shall be issued by the Company to you upon such termination. |
3. | Voluntary Termination On or After January 1, 2010 | |
Notwithstanding anything in this letter to the contrary, if you remain in the employ of Skyworks until January 1 , 2010, you may voluntarily terminate your employment for any reason on or after January 1 , 2010 (a Voluntary Election) and in such event you shall be entitled to receive the benefits set forth in Section 2.4; provided however, that any benefits provided under Section 2.4 shall be reduced by a Voluntary Election Surcharge. The Voluntary Election Surcharge shall cause to be forfeited by you all tranches of stock options, stock appreciation rights, restricted stock, and any other award relating to the stock of Skyworks, which were both (a) granted to you in the eighteen (18) month period prior to the Voluntary Election, and (b) scheduled to vest more than two (2) years from the Voluntary Election. To obtain the benefits described in this Section 3, you must (i) provide the Board with no fewer than ninety (90) days advance written notice of your intended Voluntary Election and a succession plan shall be in place, and (ii) you must remain available, in each case in the sole discretion of the Board and upon terms decided by the Board, to continue to serve as a member of the Board and as the Chairman of one Board committee for up to two (2) years following the Voluntary Election. | ||
4. | Effect of Change of Control on Equity Awards | |
If a Change of Control occurs during the term of this Agreement, immediately prior to such transaction constituting such Change of Control, (i) all of your then unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any restrictions on each outstanding restricted stock award shall lapse and such award shall become immediately vested; and, (iii) each outstanding performance share award shall be deemed earned as to the greater of (a) the Target level of shares for such award or (b) the number of shares that would have been earned pursuant to the terms of such award as of the day prior to the date of such Change of Control, and such shares shall be issued by the Company to you immediately prior to such Change of Control transaction. | ||
5. | Non-Competition; Non-Solicitation | |
During the term of your employment with Skyworks and for the first twenty-four (24) months after the date on which your employment with Skyworks is voluntarily or involuntarily terminated, by yourself or by the Company, and with or without cause (the Noncompete Period), you will not engage in any employment, consulting or other activity that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks (collectively, Skyworks and Affiliates). You acknowledge and agree that your direct or indirect participation in the conduct of a competing business alone or with any other person will materially impair the business and prospects of Skyworks and Affiliates. During the Noncompete Period, you will not (i) attempt to hire any director, officer, employee or agent of Skyworks and Affiliates, (ii) assist in such hiring by any other person, (iii) encourage any person to terminate his or her employment or business relationship with Skyworks, (iv) encourage any customer or supplier of Skyworks to |
terminate its relationship with Skyworks, or (v) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of Skyworks and Affiliates) any customer of Skyworks and Affiliates. If any of the restrictions in this Section 5 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced. Any provisions of this section not so reduced will remain in full force and effect. | ||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks and Affiliates for consultation on behalf of Skyworks and Affiliates, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | ||
You understand and acknowledge that the remedies of Skyworks and Affiliates at law for breach of any of the restrictions in this Section are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section, and may apply for injunctive relief against any act which would violate those restrictions. | ||
6. | Death or Disability | |
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | ||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | ||
7. | Miscellaneous | |
All claims by you for benefits under the Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. |
service, as that term is used in Section 409A and related regulations. Accordingly, payments under Sections 1.3, 2.4 or 3 of this agreement shall not be made unless a separation from service (as that term is used in Section 409A and related regulations) shall have occurred. | ||
Skyworks may withhold (or cause to be withheld) from any payments made under this agreement all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | ||
This agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by the Company. This agreement may be modified only by a written instrument executed by both parties. This agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the letter agreement between you and Alpha Industries, Inc. dated April 1, 2001 and the letter agreement between you and Skyworks dated May 26, 2005. This agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. | ||
8. | Release | |
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to Section 1.3, Section 2.4 or Section 3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. |
9. | Term | |
This agreement, as amended and restated, shall become effective on January 22, 2008, and shall remain in effect until the third anniversary thereof (the Ending Date); provided, however, that (i) if your employment terminates prior to the Ending Date, this agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied and (ii) if a Change of Control occurs prior to the Ending Date, this agreement shall remain in effect until the latest to occur of (a) the Ending Date; (b) the second anniversary of the Change of Control; or, if your employment terminates prior to the occurrence of the Ending Date or the second anniversary of the Change of Control, (c) the date that all of your and Skyworks obligations hereunder have been fully satisfied. |
Sincerely,
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AGREED TO: | |||||
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/s/ Timothy R. Furey
Chairman of the Compensation Committee |
/s/ David J. Aldrich
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Date: January 22, 2008 |
Agreed:
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By:
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GENERAL COUNSEL |
Re: | Change of Control / Severance Agreement |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): |
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1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or not includable in gross income for federal income tax purposes, or (2) |
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your target annual short-term cash incentive opportunity for the year in which the Change of Control occurs; and (ii) on the date of any termination described in Section 1.1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of eighteen (18) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |||
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then yon will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; (ii) conduct on your part constituting an act of moral turpitude; (iii) your willful disloyalty to Skyworks or refusal or failure to obey the directions |
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of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | |||
2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
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interfere (or attempt to disrupt or interfere) with the Companys relationships with it employees, (v) encourage any customer or supplier of the Company to terminate its relationship with the Company, or (vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of the Company) any customer of the Company. If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced. Any provisions of this section not so reduced will remain in full force and effect. | |||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | |||
You understand and acknowledge that Skyworks remedies at law for breach of any of the restrictions in this Section 4 are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section 4, and may apply for injunctive relief against any act which would violate those restrictions. | |||
5. | Death; Disability | ||
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | |||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | |||
6. | Release of Claims | ||
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. |
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7. | Term | ||
This Agreement shall be effective for an initial term of two (2) years from the date hereof (the Initial Term); provided however, that (i) if your employment terminates within the Initial Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement shall renew automatically on the anniversary hereof for up to five (5) additional one (1) year periods (each an Additional Term) unless, at least ninety (90) days prior to the end of the then current term of the Agreement, either party provides written notice to the other party that the Agreement should not be extended, and (ii) if your employment terminates during any Additional Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4 shall survive any termination of this Agreement and extend throughout the Noncompete Period. | |||
8. | Miscellaneous | ||
All claims by you for benefits under this Agreement shall be directed to and determined by the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which you may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this letter will operate to extend the life of any option beyond the term originally stated in the applicable option grant or option agreement; (b) the reimbursement of a fee or expense pursuant to this Section 8 shall be provided not later than the calendar year following the calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses eligible for reimbursement during any calendar year may not affect the amount of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this Section 8 is not |
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subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks under this Section 8 shall survive the termination for any reason of this agreement and shall remain in effect until the applicable statute of limitation has expired with respect to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement). | |||
This Agreement is intended to comply with Section 409A of the Code and any related regulations or other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent applicable. It is the intent of the parties hereto that all severance payments and benefits provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or benefits provided pursuant to this Agreement that are paid upon separation from service (as that term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after taking into account the exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when your employment terminates, such payments or benefits (or portions thereof) that constitute deferred compensation payable upon a separation from service that are to be paid or provided during the six (6) month period following termination of your employment shall not be paid or provided until the first business day after the date that is six (6) months following termination of your employment or, if earlier, the first business day following the date of your death. The payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the six (6) month period. | |||
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to accelerate or to defer the delivery of the payments to be made under this Agreement. Notwithstanding anything in this Agreement to the contrary, references to employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as that term is used in Section 409A of the Code and related regulations. Accordingly, payments to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a separation from service (within the meaning of Section 409A of the Code and related regulations) shall have occurred. |
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Skyworks may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | |||
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to expressly assume and agree in writing, with a copy to you, to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement as if no such succession had taken place. You acknowledge and agree, and the Company acknowledges and agrees, that, without limitation to any other provision of this Agreement which is also material, this provision is a material term of this Agreement and an important clause benefiting you, to assure you that the obligation of Skyworks to provide you with the existing benefits made available under this Agreement, are adhered to by any successor to the Company, and the provision also benefits the Company in that the assurance to you afforded by this provision is an important retention incentive to have you remain in the employment of the Company. | |||
This Agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by Skyworks. This Agreement may be modified only by a written instrument executed by both parties. This Agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
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Sincerely,
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AGREED TO: | |||
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich
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/s/ Mr. Liam Griffin | |||
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
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A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. |
Agreed:
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Date: |
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A-2
By:
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President and Chief Executive Officer |
A-3
Re: | Change of Control / Severance Agreement |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): |
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1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or |
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not includable in gross income for federal income tax purposes, or (2) your target annual short-term cash incentive opportunity for the year in which the Change of Control occurs; and (ii) on the date of any termination described in Section 1.1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of eighteen (18) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |||
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
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(ii) conduct on your part constituting an act of moral turpitude; (iii) your willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | |||
2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
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hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by any other person, (iii) encourage any person to terminate his or her employment or business relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or interfere) with the Companys relationships with it employees, (v) encourage any customer or supplier of the Company to terminate its relationship with the Company, or (vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of the Company) any customer of the Company. If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced, Any provisions of this section not so reduced will remain in full force and effect. | |||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | |||
You understand and acknowledge that Skyworks remedies at law for breach of any of the restrictions in this Section 4 are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section 4, and may apply for injunctive relief against any act which would violate those restrictions. | |||
5. | Death; Disability | ||
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | |||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | |||
6. | Release of Claims | ||
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in |
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substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. | |||
7. | Term | ||
This Agreement shall be effective for an initial term of two (2) years from the date hereof (the Initial Term); provided however, that (i) if your employment terminates within the Initial Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement shall renew automatically on the anniversary hereof for up to five (5) additional one (1) year periods (each an Additional Term) unless, at least ninety (90) days prior to the end of the then current term of the Agreement, either party provides written notice to the other party that the Agreement should not be extended, and (ii) if your employment terminates during any Additional Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4 shall survive any termination of this Agreement and extend throughout the Noncompete Period. | |||
8. | Miscellaneous | ||
All claims by you for benefits under this Agreement shall be directed to and determined by the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any farther dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which you may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this letter will operate to extend the life of any option beyond the term originally stated in the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
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pursuant to this Section 8 shall be provided not later than the calendar year following the calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses eligible for reimbursement during any calendar year may not affect the amount of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this Section 8 is not subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks under this Section 8 shall survive the termination for any reason of this agreement and shall remain in effect until the applicable statute of limitation has expired with respect to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement). | |||
This Agreement is intended to comply with Section 409A of the Code and any related regulations or other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent applicable. It is the intent of the parties hereto that all severance payments and benefits provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or benefits provided pursuant to this Agreement that are paid upon separation from service (as that term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after taking into account the exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when your employment terminates, such payments or benefits (or portions thereof) that constitute deferred compensation payable upon a separation from service that are to be paid or provided during the six (6) month period following termination of your employment shall not be paid or provided until the first business day after the date that is six (6) months following termination of your employment or, if earlier, the first business day following the date of your death. The payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the six (6) month period. | |||
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to
accelerate or to defer the delivery of the payments to be made under this Agreement.
Notwithstanding anything in this Agreement to the contrary, references to employment termination
in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as
that term is used in Section 409A of the Code and related regulations. Accordingly, payments
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to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a separation from service (within the meaning of Section 409A of the Code and related regulations) shall have occurred. | |||
Skyworks may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | |||
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to expressly assume and agree in writing, with a copy to you, to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement as if no such succession had taken place. You acknowledge and agree, and the Company acknowledges and agrees, that, without limitation to any other provision of this Agreement which is also material, this provision is a material term of this Agreement and an important clause benefiting you, to assure you that the obligation of Skyworks to provide you with the existing benefits made available under this Agreement, are adhered to by any successor to the Company, and the provision also benefits the Company in that the assurance to you afforded by this provision is an important retention incentive to have you remain in the employment of the Company. | |||
This Agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by Skyworks. This Agreement may be modified only by a written instrument executed by both parties. This Agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
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Sincerely,
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AGREED TO: | |||
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich,
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/s/ Mr. George LeVan
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A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE ,VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. |
A-2
Agreed:
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Date:
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By:
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President and Chief Executive Officer |
A-3
Re: | Change of Control / Severance Agreement |
1. | Termination of Employment Related to Change of Control |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): | ||
(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership of any capital stock of Skyworks if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x) the then-outstanding shares of common stock of Skyworks (the Outstanding Company Common Stock) or (y) the combined voting power of the then-outstanding securities of Skyworks entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided , however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Skyworks (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of Skyworks, unless the Person exercising, converting or exchanging such security acquired |
such security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Skyworks or any corporation controlled by Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or | |||
(b) such tune as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the Board of Directors of a successor corporation to Skyworks), where the term Continuing Director means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided , however , that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or | |||
(c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Skyworks or a sale or other disposition of all or substantially all of the assets of Skyworks in one or a series of transactions (a Business Combination), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Skyworks or substantially all of Skyworks assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the Acquiring Corporation) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no |
Person (excluding any employee benefit plan (or related trust) maintained or sponsored by Skyworks or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or | |||
(d) approval by the stockholders of Skyworks of a complete liquidation or dissolution of Skyworks. | |||
1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or not includable in gross income for federal income tax purposes, or (2) |
your target annual short-term cash incentive opportunity for the year in which the Change of Control occurs; and (ii) on the date of any termination described in Section 1.1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of eighteen (18) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |||
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to yon until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2. | Other Terminations of Employment |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; (ii) conduct on your part constituting an act of moral turpitude; (iii) your |
willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | |||
2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
3. | Effect of Change of Control on Equity Awards | |
If a Change of Control occurs during the Initial Term or the Additional Term, immediately prior to such transaction constituting such Change of Control, (i) all of your then unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any restrictions on each outstanding restricted stock award shall lapse and such award will become immediately vested; and, (iii) each outstanding performance share award shall be deemed earned as to the greater of (a) the Target level of shares for such award or (b) the number of shares that would have been earned pursuant to the terms of such award as of the day prior to the date of such Change of Control, and such shares shall be issued by the Company to you immediately prior to such Change of Control transaction. | ||
4. | Non-Competition; Non-Solicitation | |
During the term of your employment with Skyworks and for the first twenty-four (24) months after the date on which your employment with Skyworks is terminated for any reason (the Noncompete Period), you will not engage in any employment, consulting or other activity that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks (collectively, the Company). You acknowledge and agree that your direct or indirect participation in the conduct of a competing business alone or with any other person will materially impair the business and prospects of the Company. During the Noncompete Period, you will not, either directly or indirectly, (i) attempt to hire any director, officer, employee or agent of the Company, (ii) assist in such |
hiring by any other person, (iii) encourage any person to terminate his or her employment or business relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or interfere) with the Companys relationships with it employees, (v) encourage any customer or supplier of the Company to terminate its relationship with the Company, or (vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of the Company) any customer of the Company. If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced. Any provisions of this section not so reduced will remain in full force and effect. | ||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | ||
You understand and acknowledge that Skyworks remedies at law for breach of any of the restrictions in this Section 4 are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section 4, and may apply for injunctive relief against any act which would violate those restrictions. | ||
5. | Death; Disability | |
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | ||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | ||
6. | Release of Claims | |
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in substantially the form attached hereto as Exhibit A (the Release) and (ii) the |
Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. | ||
7. | Term | |
This Agreement shall be effective for an initial term of two (2) years from the date hereof (the Initial Term); provided however, that (i) if your employment terminates within the Initial Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement shall renew automatically on the anniversary hereof for up to five (5) additional one (1) year periods (each an Additional Term) unless, at least ninety (90) days prior to the end of the then current term of the Agreement, either party provides written notice to the other party that the Agreement should not be extended, and (ii) if your employment terminates during any Additional Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4 shall survive any termination of this Agreement and extend throughout the Noncompete Period. | ||
8. | Miscellaneous | |
All claims by you for benefits under this Agreement shall be directed to and determined by the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which you may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this letter will operate to extend the life of any option beyond the term originally stated in the applicable option grant or option agreement; (b) the reimbursement of a fee or expense pursuant to this Section 8 shall be provided not later than the calendar year |
following the calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses eligible for reimbursement during any calendar year may not affect the amount of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this Section 8 is not subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks under this Section 8 shall survive the termination for any reason of this agreement and shall remain in effect until the applicable statute of limitation has expired with respect to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement). | ||
This Agreement is intended to comply with Section 409A of the Code and any related regulations or other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent applicable. It is the intent of the parties hereto that all severance payments and benefits provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation §1.409A-1 (b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or benefits provided pursuant to this Agreement that are paid upon separation from service (as that term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after taking into account the exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when your employment terminates, such payments or benefits (or portions thereof) that constitute deferred compensation payable upon a separation from service that are to be paid or provided during the six (6) month period following termination of your employment shall not be paid or provided until the first business day after the date that is six (6) months following termination of your employment or, if earlier, the first business day following the date of your death. The payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the six (6) month period. | ||
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to accelerate or to defer the delivery of the payments to be made under this Agreement. Notwithstanding anything in this Agreement to the contrary, references to employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as that term is used in Section 409 A of the Code and related regulations. Accordingly, payments to be made under Section 1.4 or Section 2.3, as applicable, shall not be made |
unless a separation from service (within the meaning of Section 409A of the Code and related regulations) shall have occurred. | ||
Skyworks may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | ||
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to expressly assume and agree in writing, with a copy to you, to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement as if no such succession had taken place. You acknowledge and agree, and the Company acknowledges and agrees, that, without limitation to any other provision of this Agreement which is also material, this provision is a material term of this Agreement and an important clause benefiting you, to assure you that the obligation of Skyworks to provide you with the existing benefits made available under this Agreement, are adhered to by any successor to the Company, and the provision also benefits the Company in that the assurance to you afforded by this provision is an important retention incentive to have you remain in the employment of the Company. | ||
This Agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by Skyworks. This Agreement may be modified only by a written instrument executed by both parties. This Agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
Sincerely,
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AGREED TO: | |
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich
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/s/ Gregory L. Waters | |
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. |
A-2
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Agreed:
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Date:
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Acknowledged: SKYWORKS SOLUTIONS, INC. | ||||
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By:
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President and Chief Executive Officer | |||
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Date:
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A-3
Re: | Change of Control / Severance Agreement |
1. | Termination of Employment Related to Change of Control |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): | ||
(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership of any capital stock of Skyworks if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x) the then-outstanding shares of common stock of Skyworks (the Outstanding Company Common Stock) or (y) the combined voting power of the then-outstanding securities of Skyworks entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided , however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Skyworks (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of Skyworks, unless |
the Person exercising, converting or exchanging such security acquired such security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or related, trust) sponsored or maintained by Skyworks or any corporation controlled by Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection (c) of this Section 1.2; or | |||
(b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the Board of Directors of a successor corporation to Skyworks), where the term Continuing Director means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided , however , that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or | |||
(c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Skyworks or a sale or other disposition of all or substantially all of the assets of Skyworks in one or a series of transactions (a Business Combination), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Skyworks or substantially all of Skyworks assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the Acquiring Corporation) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock |
and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by Skyworks or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or | |||
(d) approval by the stockholders of Skyworks of a complete liquidation or dissolution of Skyworks. | |||
1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or |
not includable in gross income for federal income tax purposes, or (2) your target annual short-term cash, incentive opportunity for the year in which the Change of Control occurs; and (ii) on the date of any termination described in Section 1.1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of eighteen (18) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |||
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2. | Other Terminations of Employment |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
(ii) conduct on your part constituting an act of moral turpitude; (iii) your willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | |||
2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
3. | Effect of Change of Control on Equity Awards | |
If a Change of Control occurs during the Initial Term or the Additional Term, immediately prior to such transaction constituting such Change of Control, (i) all of your then unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any restrictions on each outstanding restricted stock award shall lapse and such award will become immediately vested; and, (iii) each outstanding performance share award shall be deemed earned as to the greater of (a) the Target level of shares for such award or (b) the number of shares that would have been earned pursuant to the terms of such award as of the day prior to the date of such Change of Control, and such shares shall be issued by the Company to you immediately prior to such Change of Control transaction. | ||
4. | Non-Competition; Non-Solicitation | |
During the term of your employment with Skyworks and for the first twenty-four (24) months after the date on which your employment with Skyworks is terminated for any reason (the Noncompete Period), you will not engage in any employment, consulting or other activity that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks (collectively, the Company). You acknowledge and agree that your direct or indirect participation in the conduct of a competing business alone or with any other person will materially impair the business and prospects of the Company. During the Noncompete Period, you will not, either directly or indirectly, (i) attempt to |
hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by any other person, (iii) encourage any person to terminate his or her employment or business relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or interfere) with the Companys relationships with it employees, (v) encourage any customer or supplier of the Company to terminate its relationship with the Company, or (vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of the Company) any customer of the Company. If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced. Any provisions of this section not so reduced will remain in full force and effect. | ||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | ||
You understand and acknowledge that Skyworks remedies at law for breach of any of the restrictions in this Section 4 are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section 4, and may apply for injunctive relief against any act which would violate those restrictions. | ||
5. | Death; Disability | |
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | ||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | ||
6. | Release of Claims | |
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in |
substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. | ||
7. | Term | |
This Agreement shall be effective for an initial term of two (2) years from the date hereof (the Initial Term); provided however, that (i) if your employment terminates within the Initial Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement shall renew automatically on the anniversary hereof for up to five (5) additional one (1) year periods (each an Additional Term) unless, at least ninety (90) days prior to the end of the then current term of the Agreement, either party provides written notice to the other party that the Agreement should not be extended, and (ii) if your employment terminates during any Additional Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4 shall survive any termination of this Agreement and extend throughout the Noncompete Period. | ||
8. | Miscellaneous | |
All claims by you for benefits under this Agreement shall be directed to and determined by the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which you may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this letter will operate to extend the life of any option beyond the term originally stated in the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
pursuant to this Section 8 shall be provided not later than the calendar year following the calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses eligible for reimbursement during any calendar year may not affect the amount of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this Section 8 is not subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks under this Section 8 shall survive the termination for any reason of this agreement and shall remain in effect until the applicable statute of limitation has expired with respect to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement). | ||
This Agreement is intended to comply with Section 409A of the Code and any related regulations or other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent applicable. It is the intent of the parties hereto that all severance payments and benefits provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or benefits provided pursuant to this Agreement that are paid upon separation from service (as that term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after taking into account the exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when your employment terminates, such payments or benefits (or portions thereof) that constitute deferred compensation payable upon a separation from service that are to be paid or provided during the six (6) month period following termination of your employment shall not be paid or provided until the first business day after the date that is six (6) months following termination of your employment or, if earlier, the first business day following the date of your death. The payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the six (6) month period. | ||
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to accelerate or to defer the delivery of the payments to be made under this Agreement. Notwithstanding anything in this Agreement to the contrary, references to employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as that term is used in Section 409A of the Code and related regulations. Accordingly, payments |
to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a separation from service (within the meaning of Section 409A of the Code and related regulations) shall have occurred. | ||
Skyworks may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | ||
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to expressly assume and agree in writing, with a copy to you, to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement as if no such succession had taken place. You acknowledge and agree, and the Company acknowledges and agrees, that, without limitation to any other provision of this Agreement which is also material, this provision is a material term of this Agreement and an important clause benefiting you, to assure you that the obligation of Skyworks to provide you with the existing benefits made available under this Agreement, are adhered to by any successor to the Company, and the provision also benefits the Company in that the assurance to you afforded by this provision is an important retention incentive to have you remain in the employment of the Company. | ||
This Agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by Skyworks. This Agreement may be modified only by a written instrument executed by both parties. This Agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the Agreement between you and Skyworks dated May 26, 2005. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
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Sincerely,
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AGREED TO: | |||
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich
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/s/ Mark Tremallo
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A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. |
A-2
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Agreed:
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Date:
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Acknowledged: SKYWORKS SOLUTIONS, INC. | ||||
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By:
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President and Chief Executive Officer | |||
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Date:
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A-3
Re: | Change of Control / Severance Agreement |
1. | Termination of Employment Related to Change of Control |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): | ||
(a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) (a Person) of beneficial ownership of any capital stock of Skyworks if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x) the then-outstanding shares of common stock of Skyworks (the Outstanding Company Common Stock) or (y) the combined voting power of the then-outstanding securities of Skyworks entitled to vote generally in the election of directors (the Outstanding Company Voting Securities); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from Skyworks (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of Skyworks, unless |
the Person exercising, converting or exchanging such security acquired such security directly from Skyworks or an underwriter or agent of Skyworks), (ii) any acquisition by Skyworks, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Skyworks or any corporation controlled by Skyworks, or (iv) any acquisition by any corporation pursuant to a transaction which complies with, clauses (i) and (ii) of subsection (c) of this Section 1.2; or | |||
(b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Skyworks (the Board) (or, if applicable, the Board of Directors of a successor corporation to Skyworks), where the term Continuing Director means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however , that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or | |||
(c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving Skyworks or a sale or other disposition of all or substantially all of the assets of Skyworks in one or a series of transactions (a Business Combination), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Skyworks or substantially all of Skyworks assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the Acquiring Corporation) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock |
and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by Skyworks or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or | |||
(d) approval by the stockholders of Skyworks of a complete liquidation or dissolution of Skyworks. | |||
1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or |
not includable in gross income for federal income tax purposes, or (2) your target annual short-term cash incentive opportunity for the year in which the Change of Control occurs; and (ii) on the date of any termination described in Section 1,1, all of your then outstanding Skyworks stock options shall remain exercisable for a period of eighteen (18) months after the termination date (or, if earlier, until the last day of the full option term), subject to their other terms and conditions; and (iii) Skyworks will provide you medical benefits substantially the same as those provided to you at the time of termination for a period of eighteen (18) months after the date of termination. | |||
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2. | Other Terminations of Employment |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
(ii) conduct on your part constituting an act of moral turpitude; (iii) your willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | |||
2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
3. | Effect of Change of Control on Equity Awards | |
If a Change of Control occurs during the Initial Term or the Additional Term, immediately prior to such transaction constituting such Change of Control, (i) all of your then unvested Skyworks stock options shall become immediately vested and exercisable; (ii) any restrictions on each outstanding restricted stock award shall lapse and such award will become immediately vested; and, (iii) each outstanding performance share award shall be deemed earned as to the greater of (a) the Target level of shares for such award or (b) the number of shares that would have been earned pursuant to the terms of such award as of the day prior to the date of such Change of Control, and such shares shall be issued by the Company to you immediately prior to such Change of Control transaction. | ||
4. | Non-Competition; Non-Solicitation | |
During the term of your employment with Skyworks and for the first twenty-four (24) months after the date on which your employment with Skyworks is terminated for any reason (the Noncompete Period), you will not engage in any employment, consulting or other activity that competes with the business of Skyworks or any subsidiary or affiliate of Skyworks (collectively, the Company). You acknowledge and agree that your direct or indirect participation in the conduct of a competing business alone or with any other person will materially impair the business and prospects of the Company. During the Noncompete Period, you will not, either directly or indirectly, (i) attempt to |
hire any director, officer, employee or agent of the Company, (ii) assist in such hiring by any other person, (iii) encourage any person to terminate his or her employment or business relationship with the Company, (iv) not disrupt or interfere (or attempt to disrupt or interfere) with the Companys relationships with it employees, (v) encourage any customer or supplier of the Company to terminate its relationship with the Company, or (vi) obtain, or assist in obtaining, for your own benefit (other than indirectly as an employee of the Company) any customer of the Company. If any of the restrictions in this Section 4 are adjudicated to be excessively broad as to scope, geographic area, time or otherwise, said restriction shall be reduced to the extent necessary to make the restriction reasonable and shall be binding on you as so reduced. Any provisions of this section not so reduced will remain in full force and effect. | ||
It is understood that during the Noncompete Period, you will make yourself available to Skyworks for consultation on behalf of Skyworks, upon reasonable request and at a reasonable rate of compensation and at reasonable times and places in light of any commitment you may have to a new employer. | ||
You understand and acknowledge that Skyworks remedies at law for breach of any of the restrictions in this Section 4 are inadequate and that any such breach will cause irreparable harm to Skyworks. You therefore agree that in addition and as a supplement to such other rights and remedies as may exist in Skyworks favor, Skyworks may apply to any court having jurisdiction to enforce the specific performance of the restrictions in this Section 4, and may apply for injunctive relief against any act which would violate those restrictions. | ||
5. | Death; Disability | |
In the event of your death at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable for a period of one year thereafter, subject to their other terms and conditions. | ||
In the event of your disability at any time during your employment by Skyworks, all of your then outstanding Company stock options, whether or not by their terms then exercisable, will become immediately exercisable and remain exercisable so long as you remain an employee or officer of Skyworks and for a period of one year thereafter, subject to their other terms and conditions. | ||
6. | Release of Claims | |
Skyworks shall have no obligation to make any payments or provide any benefits pursuant to either Section 1.4 or Section 2.3, as applicable, unless (i) you agree to sign and deliver to the General Counsel of Skyworks a release of claims in |
substantially the form attached hereto as Exhibit A (the Release) and (ii) the Release has become non-revocable by the sixtieth (60th) day following the date of termination of your employment. | ||
7. | Term | |
This Agreement shall be effective for an initial term of two (2) years from the date hereof (the Initial Term); provided however, that (i) if your employment terminates within the Initial Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Following the Initial Term, this Agreement shall renew automatically on the anniversary hereof for up to five (5) additional one (1) year periods (each an Additional Term) unless, at least ninety (90) days prior to the end of the then current term of the Agreement, either party provides written notice to the other party that the Agreement should not be extended, and (ii) if your employment terminates during any Additional Term, this Agreement shall remain in effect until all of your and Skyworks obligations hereunder have been fully satisfied. Notwithstanding anything to the contrary herein, your obligations pursuant to Section 4 shall survive any termination of this Agreement and extend throughout the Noncompete Period. | ||
8. | Miscellaneous | |
All claims by you for benefits under this Agreement shall be directed to and determined by the Board of Skyworks and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to you in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to you for a review of the decision denying a claim. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrators award in any court having jurisdiction. Skyworks agrees to pay as incurred, to the full extent permitted by law, all legal, accounting and other fees and expenses which you may reasonably incur as a result of any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code. Notwithstanding anything in this letter to the contrary, (a) no provision of this letter will operate to extend the life of any option beyond the term originally stated in the applicable option grant or option agreement; (b) the reimbursement of a fee or expense |
pursuant to this Section 8 shall be provided not later than the calendar year following the calendar year in which the fee or expense was incurred, (c) the amount of fees and expenses eligible for reimbursement during any calendar year may not affect the amount of fees and expenses eligible for reimbursement in any other calendar year, (d) the right to reimbursement under this Section 8 is not subject to liquidation or exchange for another benefit and (e) the obligation of Skyworks under this Section 8 shall survive the termination for any reason of this agreement and shall remain in effect until the applicable statute of limitation has expired with respect to any claim or contest (regardless of the outcome thereof) by Skyworks, you or others regarding the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by you regarding the amount of any payment or benefits pursuant to this Agreement). | ||
This Agreement is intended to comply with Section 409A of the Code and any related regulations or other applicable guidance promulgated thereunder (collectively, Section 409A), to the extent applicable. It is the intent of the parties hereto that all severance payments and benefits provided pursuant to this Agreement qualify as short-term deferrals, as defined in Treasury Regulation §1.409A-1(a)(4), separation pay due to an involuntary separation from service under Treasury Regulation § 1.409A-1(b)(9)(iii), reimbursement of medical benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D), to the extent applicable. If (a) it is determined that any payments or benefits provided pursuant to this Agreement that are paid upon separation from service (as that term is used in Section 409A) constitute deferred compensation for purposes of Section 409A (after taking into account the exceptions listed in the prior sentence and/or any other applicable exceptions) and (b) you are a specified employee (as that term is used in Section 409A) when your employment terminates, such payments or benefits (or portions thereof) that constitute deferred compensation payable upon a separation from service that are to be paid or provided during the six (6) month period following termination of your employment shall not be paid or provided until the first business day after the date that is six (6) months following termination of your employment or, if earlier, the first business day following the date of your death. The payment that is made pursuant to the prior sentence shall include the cumulative amount of any amounts that could not be paid during the six (6) month period. | ||
Except as expressly provided in this Section 8, neither you nor Skyworks shall have the right to accelerate or to defer the delivery of the payments to be made under this Agreement. Notwithstanding anything in this Agreement to the contrary, references to employment termination in Sections 1.4 or 2.3, as applicable, shall be interpreted to mean separation from service, as that term is used in Section 409A of the Code and related regulations. Accordingly, payments |
to be made under Section 1.4 or Section 2.3, as applicable, shall not be made unless a separation from service (within the meaning of Section 409 A of the Code and related regulations) shall have occurred. | ||
Skyworks may withhold (or cause to be withheld) from any payments made under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling. | ||
The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company (the Acquisition), as a condition precedent to the Acquisition, to expressly assume and agree in writing, with a copy to you, to perform this Agreement in the same manner and to the same extent as the Company would be required to perform this Agreement as if no such succession had taken place. You acknowledge and agree, and the Company acknowledges and agrees, that, without limitation to any other provision of this Agreement which is also material, this provision is a material term of this Agreement and an important clause benefiting you, to assure you that the obligation of Skyworks to provide you with the existing benefits made available under this Agreement, are adhered to by any successor to the Company, and the provision also benefits the Company in that the assurance to you afforded by this provision is an important retention incentive to have you remain in the employment of the Company. | ||
This Agreement contains the entire understanding of the parties concerning its subject matter, and if there is any conflict between the terms of this Agreement and the terms of any other agreement (including but not limited to an equity award held by you or the applicable plan under which such award was issued), the terms of this Agreement shall govern. You shall not be eligible to receive severance or similar payments under any severance plan, program or policy maintained by Skyworks, This Agreement may be modified only by a written instrument executed by both parties. This Agreement replaces and supersedes all prior agreements relating to your employment or severance, including without limitation the Agreement between you and Skyworks dated August 20, 2007. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts. |
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Sincerely,
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AGREED TO: | |||
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich
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/s/ Donald Palette
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A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL . THE REVOCATION PERIOD HAS EXPIRED. |
A-2
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Agreed:
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Date:
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Acknowledged: SKYWORKS SOLUTIONS, INC. | ||||
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By:
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President and Chief Executive Officer | |||
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Date:
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A-3
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): |
1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from, the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) in the event of any termination of your employment described in Section 1.1, Skyworks shall provide to you bi-weekly compensation continuation payments commencing as soon as practicable (but not more than sixty (60) days) after the date of such termination (or such later date as may be required by Section 8) and continuing for a period of twelve (12) months following termination of your employment, with each such compensation continuation payment being equal to the quotient of (a) divided by (b), where (a) equals two (2) times the sum of (1) your rate of annual base |
1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U.S. dollars ($500,000.00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section |
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; (ii) conduct on your part constituting an act of moral turpitude; (iii) your willful disloyalty to Skyworks or refusal or failure to obey the directions of the Board; or (iv) your incompetent performance or substantial or continuing inattention to or neglect of duties assigned to you. Any determination of Cause must be made by the full Board at a meeting duly called. | ||
2.3. | Subject to the provisions of Sections 6 and 8, (i) if your employment is terminated by Skyworks without Cause, Skyworks shall provide to you bi-weekly compensation continuation payments commencing as soon as practicable (but not more than sixty (60) days) after the date of such termination (or such later date as may be required by Section 8) and continuing for a period of twelve (12) months following termination of your employment, with each such compensation continuation payment being equal to the quotient of (a) divided by (b), where (a) equals the sum of (1) your then current rate of annual base salary, and (2) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax purposes, and (b) equals 26; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
Sincerely,
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AGREED TO: | |
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SKYWORKS SOLUTIONS, INC.
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/s/ David J Aldrich
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/s/ Bruce Freyman
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A-1
1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS |
A-2
Agreed:
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By:
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President and Chief Executive Officer | |||
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A-3
1. | Termination of Employment Related to Change of Control |
1.1. | If: (i) a Change of Control occurs during the Initial Term or the Additional Term (as defined in Section 7) and (ii) your employment with Skyworks is terminated by Skyworks without Cause or you terminate your employment with Skyworks for Good Reason, in either case within one (1) year after the Change of Control, then you will receive the benefits provided in Section 1.4 below. | ||
1.2. | Change of Control means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change of Control under one of such subsections but is specifically exempted from another such subsection): |
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1.3. | Good Reason means the occurrence of any of the following events without your prior written consent: (i) a material diminution of your base compensation (unless in connection with a general reduction in the base compensation of all of Skyworks officers and/or senior management employees necessitated by the business or financial condition of Skyworks, provided such reduction does not adversely affect you to a greater extent than such other persons); (ii) a material diminution in your authority, duties or responsibilities; (iii) a material change in the geographic location at which you are directed that you must perform your duties, which Skyworks has determined shall include a change in your principal place of employment at Skyworks or an affiliates direction from the location of the your principal place of employment immediately prior to the date this Agreement becomes effective to a location more than fifty (50) miles from such principal place of employment; or (iv) any action or inaction constituting a material breach by Skyworks of the terms of this Agreement. Your termination of employment shall not be deemed to be for Good Reason unless, within sixty (60) days of the occurrence of the event constituting Good Reason, you have provided Skyworks with (a) at least thirty (30) days advance written notice of your decision to terminate your employment for Good Reason, and (b) a period of not less than thirty (30) days to cure the event or condition described in (i), (ii), (iii) or (iv), and Skyworks has either failed to so cure the event or waived its right to cure the event, to the extent it is then subject to cure. | ||
1.4. | Subject to the provisions of Sections 6 and 8, (i) as soon as practicable (but not more than sixty (60) days) after the date of any termination described in Section 1.1 (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to two (2) times the sum of (a) your rate of annual base salary in effect immediately prior to the Change of Control, and (b) the greater of (1) the average of the annual short-term cash incentive payments you received for each of the three years prior to the year in which the Change of Control occurs, whether or |
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1.5. | If any excise tax (the Excise Tax) under Section 4999 of the Internal Revenue Code of 1986 (the Code) is payable by you by reason of the occurrence of a change in the ownership or effective control of Skyworks or a change in the ownership of a substantial portion of the assets of Skyworks, determined in accordance with Section 280G(b)(2) of the Code, then Skyworks shall pay you, in addition to any other amounts payable under this Agreement, an amount (the Gross-Up Payment) equal to the sum of the Excise Tax and the amount necessary to pay all additional taxes imposed on (or economically borne by) you (including the Excise Tax, state and federal income taxes and all applicable employment taxes) attributable to the receipt of the Gross-Up Payment; provided however, that (i) in no event shall the Gross-Up Payment exceed five hundred thousand U. S. dollars ($500, 000. 00), (ii) Skyworks shall have no obligation to make the Gross-Up Payment to you until you remit the Excise Tax to the Internal Revenue Service; and (iii) any Gross-Up Payment shall be paid no later than the last day of the calendar year following the calendar year in which you remit the Excise Tax. For purposes of the preceding sentence, all taxes attributed to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax rate provided by law. |
2. | Other Terminations of Employment |
2.1. | If, during the Initial Term or the Additional Term (as defined in Section 7), your employment with Skyworks is terminated by Skyworks without Cause, then you will receive the benefits specified in Section 2.3 below. If your employment is terminated by Skyworks for Cause or by you for any reason, you will not be entitled to receive the benefits specified in Section 2.3 below. This Section 2 shall not apply if you are entitled to receive the benefits set forth in Section 1.4 above. | ||
2.2. | Cause means (i) your deliberate dishonesty that is significantly detrimental to the best interests of Skyworks or any subsidiary or affiliate; |
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2.3. | Subject to the provisions of Sections 6 and 8, if, during the Initial Term or the Additional Term (as defined in Section 7), your employment is terminated by Skyworks without Cause, (i) as soon as practicable (but not more than sixty (60) days) after the date of employment termination (or such later date as may be required by Section 8), Skyworks will pay you a lump sum equal to the sum of (x) your then current annual base salary, and (y) any short-term cash incentive payment then due, whether or not includable in gross income for federal income tax; and (ii) all of your then vested outstanding Skyworks stock options will remain exercisable for a period of twelve (12) months after the date of your employment termination (or, if earlier, until the last day of the full option term), subject to their terms and conditions. |
3. | Effect of Change of Control on Equity Awards |
4. | Non-Competition; Non-Solicitation |
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5. | Death; Disability |
6. | Release of Claims |
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7. | Term |
8. | Miscellaneous |
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Sincerely,
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AGREED TO: | |
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SKYWORKS SOLUTIONS, INC.
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/s/ David J. Aldrich
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/s/ Stan Swearingen | |
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David J. Aldrich, President and CEO
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Date: 1/22/08 |
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1. | YOU UNDERSTAND ALL OF ITS TERMS AND KNOW THAT YOU ARE GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED; | |
2. | YOU HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND YOU HAVE EITHER DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, YOU HAVE CHOSEN NOT TO DO SO OF YOUR OWN VOLITION; | |
3. | YOU HAVE HAD AT LEAST 21 DAYS: (A) FROM THE DATE OF YOUR RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON , ; AND (B) TO CONSIDER IT AND THE CHANGES MADE SINCE THE , VERSION OF THIS RELEASE AND SUCH CHANGES ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD; AND | |
4. | YOU UNDERSTAND THAT YOU HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED. |
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Acknowledged: SKYWORKS SOLUTIONS, INC. | ||||
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President and Chief Executive Officer | |||
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COMPANY: | Notices to the Company shall be sent to the address set forth in the salutation hereto, Attn: General Counsel | ||||
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HOLDER: | Notices to Holder shall be sent to the address set forth below Holders signature below. | ||||
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ESCROW AGENT: | Notices to the Escrow Agent shall be sent to the address set forth in the salutation hereto. |
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Skyworks Solutions, Inc. | ||||||
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Title: | President & CEO | ||||
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Offering | Offering | |
Commencement Dates | Termination Dates | |
Each August 1
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Each January 31 | |
Each February 1
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Each July 31 |
1. | I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and, | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this quarterly report on Form 10-Q of Skyworks Solutions, Inc.; | ||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report and | ||
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and, | ||
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
(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. |