Skyworks Solutions, Inc.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
Filed by the Registrant
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Filed by a Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Definitive Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
SKYWORKS SOLUTIONS, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee not required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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February 13, 2006
Dear Stockholder:
I am pleased to invite you to attend the 2006 annual meeting of
stockholders of Skyworks Solutions, Inc. to be held at
2:00 p.m., local time, on Thursday, March 30, 2006, at
the Boston Marriott Burlington, One Mall Road, Burlington,
Massachusetts (the Annual Meeting). We look forward
to your participation in person or by proxy. The attached Notice
of Annual Meeting of Stockholders and Proxy Statement describe
the matters that we expect to be acted upon at the Annual
Meeting.
If you plan to attend the Annual Meeting, please check the
designated box on the enclosed proxy card. Or, if you utilize
our telephone or Internet voting systems, please indicate your
plans to attend the Annual Meeting when prompted to do so. If
you are a stockholder of record, you should bring the top half
of your proxy card as your admission ticket and present it upon
entering the Annual Meeting. If you are planning to attend the
Annual Meeting and your shares are held in street
name by your broker (or other nominee), you should ask the
broker (or other nominee) for a proxy issued in your name and
present it at the meeting.
Whether or not you plan to attend the Annual Meeting, and
regardless of how many shares you own, it is important that your
shares be represented at the Annual Meeting. Accordingly, we
urge you to complete the enclosed proxy and return it to us
promptly in the postage-prepaid envelope provided, or to
complete your proxy by telephone or via the Internet in
accordance with the instructions on the proxy card. If you do
attend the Annual Meeting and wish to vote in person, you may
withdraw a previously submitted proxy at that time.
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Sincerely yours, |
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Dwight W. Decker |
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Chairman of the Board |
TABLE OF CONTENTS
SKYWORKS SOLUTIONS, INC.
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20 Sylvan Road |
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5221 California Avenue |
Woburn, MA 01801 |
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Irvine, CA 92617 |
(781) 376-3000 |
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(949) 231-3000 |
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON THURSDAY, MARCH 30, 2006
To the Stockholders of Skyworks Solutions, Inc.:
The 2006 annual meeting of stockholders of Skyworks Solutions,
Inc., a Delaware corporation (the Company), will be
held at 2:00 p.m., local time, on Thursday, March 30,
2006, at the Boston Marriott Burlington, One Mall Road,
Burlington, Massachusetts (the Annual Meeting) to
consider and act upon the following proposals:
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1. |
To elect two members of the Board of Directors of the Company to
serve as Class I directors with terms expiring at the 2009
annual meeting of stockholders. |
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2. |
To approve a plan to repurchase certain outstanding stock
options issued pursuant to the Washington Sub, Inc. 2002 Stock
Option Plan held by non-employees of the Company. |
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3. |
To approve an amendment to the Companys 2005 Long-Term
Incentive Plan to increase the aggregate number of shares
authorized for issuance under the plan by 10 million shares. |
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4. |
To approve an amendment to the Companys 2002 Employee
Stock Purchase Plan to increase the aggregate number of shares
authorized for issuance under the plan by 2 million shares. |
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5. |
To ratify the selection by our Audit Committee of KPMG LLP as
the independent registered public accounting firm for the
Company for fiscal year 2006. |
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6. |
To transact such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof. |
Only stockholders of record at the close of business on
February 1, 2006, are entitled to notice of and to vote at
the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual
Meeting. To ensure your representation at the Annual Meeting,
however, we urge you to vote promptly in one of the following
ways whether or not you plan to attend the Annual Meeting:
(1) by completing, signing and dating the accompanying
proxy card and returning it in the postage-prepaid envelope
enclosed for that purpose, (2) by completing your proxy
using the toll-free number listed on the proxy card, or
(3) by completing your proxy via the Internet by visiting
the website address listed on your proxy card. Should you
receive more than one proxy card because your shares are held in
multiple accounts or registered in different names or addresses,
please complete, sign, date and return each proxy card, or
complete each proxy by telephone or the Internet, to ensure that
all of your shares are voted. Your proxy may be revoked at any
time prior to the Annual Meeting. Any stockholder attending the
Annual Meeting may vote at the meeting even if he or she
previously submitted a proxy by mail, telephone or via the
Internet. If your shares are held in street name by
your broker (or other nominee), your vote in person at the
Annual Meeting will not be effective unless you have obtained
and present a proxy issued in your name from the broker.
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By Order of the Board of Directors, |
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MARK V.B. TREMALLO |
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Vice President, General Counsel and Secretary |
Woburn, Massachusetts
February 13, 2006
SKYWORKS SOLUTIONS, INC.
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20 Sylvan Road
Woburn, MA 01801
(781) 376-3000 |
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5221 California Avenue
Irvine, CA 92617
(949) 231-3000 |
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Skyworks
Solutions, Inc., a Delaware corporation (Skyworks or
the Company), for use at the Companys annual
meeting of stockholders to be held at 2:00 p.m., local
time, on Thursday, March 30, 2006, at the Boston Marriott
Burlington, One Mall Road, Burlington, Massachusetts or at any
adjournment or postponement thereof (the Annual
Meeting). The Companys Annual Report, which includes
financial statements and Managements Discussion and
Analysis of Financial Condition and Results of Operation for the
fiscal year ended September 30, 2005, is being mailed
together with this Proxy Statement to all stockholders entitled
to vote at the Annual Meeting. This Proxy Statement and form of
proxy are being first mailed to stockholders on or about
February 13, 2006.
Only stockholders of record at the close of business on
February 1, 2006 (the Record Date), are
entitled to notice of and to vote at the Annual Meeting. As of
the Record Date, there were 159,475,720 shares of
Skyworks common stock issued and outstanding. Pursuant to
Skyworks certificate of incorporation and by-laws, and
applicable Delaware law, each share of common stock entitles the
holder of record at the close of business on the Record Date to
one vote on each matter considered at the Annual Meeting. As a
stockholder, you may vote in one of the following three ways
whether or not you plan to attend the Annual Meeting:
(1) by completing, signing and dating the accompanying
proxy card and returning it in the postage-prepaid envelope
enclosed for that purpose, (2) by completing your proxy
using the toll-free telephone number listed on the proxy card,
or (3) by completing your proxy via the Internet at the
website address listed on the proxy card. If you attend the
Annual Meeting, you may vote in person at the meeting even if
you have previously completed your proxy by mail, telephone or
via the Internet. If your shares are held in street
name by your broker (or other nominee), the broker (or
other nominee) is required to vote those shares in accordance
with your instructions. If you do not give instructions to your
broker, the broker will be entitled to vote the shares with
respect to discretionary items as described below
but will not be permitted to vote the shares with respect to
non-discretionary items (in which case any shares
voted by the broker will be treated as broker
non-votes). If your shares are held in street
name by your broker (or other nominee), please check your
proxy card or contact your broker (or other nominee) to
determine whether you will be able to vote by telephone or via
the Internet.
Any proxy given pursuant to this solicitation may be revoked by
the person giving it at any time before it is voted at the
Annual Meeting. Proxies may be revoked by (i) delivering to
the Secretary of the Company, before the taking of the vote at
the Annual Meeting, a written notice of revocation bearing a
later date than the proxy, (ii) duly completing a
later-dated proxy relating to the same shares and presenting it
to the Secretary of the Company before the taking of the vote at
the Annual Meeting or (iii) attending the Annual Meeting
and voting in person (although attendance at the Annual Meeting
will not in and of itself constitute a revocation of a proxy).
Any written notice of revocation or subsequent proxy should be
delivered to the Companys principal executive offices at
Skyworks Solutions, Inc., 20 Sylvan Road, Woburn, MA 01801,
Attention: Secretary, or hand delivered to the Secretary of the
Company, before the taking of the vote at the Annual Meeting.
The representation in person or by proxy of at least a majority
of the issued and outstanding common shares entitled to vote at
the Annual Meeting is necessary to constitute a quorum for the
transaction of business. Shares that abstain from voting on any
proposal and broker non-votes will be counted as
shares that are present and entitled to vote for purposes of
determining whether a quorum exists at the Annual Meeting. For
purposes of determining the outcome of any matter as to which a
broker (or other nominee) has indicated that it does not have
discretionary voting authority, those shares will be treated as
not present and not entitled to vote with respect to that matter
(even though those shares are considered entitled to vote for
quorum purposes and may be entitled to vote on other matters).
Pursuant to the Companys by-laws, directors are elected by
a plurality vote and, therefore, the two nominees who receive
the most votes will be elected. Stockholders will not be allowed
to cumulate their votes in the election of directors.
Accordingly, abstentions, which will not be voted, will not
affect the outcome of the election of the nominees to the Board
of Directors. In addition, the election of directors is a
discretionary matter on which a broker (or other
nominee) is authorized to vote in the absence of instruction
from the beneficial owner.
On all other matters to be acted upon at the Annual Meeting, an
affirmative vote of a majority of the shares present in person
or represented by proxy at the Annual Meeting, and entitled to
vote on each such matter, is required for approval.
Proposals 2, 3 and 4 involve matters on which a broker (or
other nominee) does not have discretionary authority to vote.
Proposal 5 involves a matter on which a broker (or other
nominee) does have discretionary authority to vote. With respect
to Proposals 2, 3, 4 and 5 an abstention will have the same
effect as a no vote. An automated system
administered by the Companys transfer agent tabulates the
votes. The vote on each matter submitted to stockholders is
tabulated separately.
The persons named as
attorneys-in-fact in
the proxies, David J. Aldrich and Allan M. Kline, were selected
by the Board of Directors and are officers of the Company. Each
executed proxy returned in time to be counted at the Annual
Meeting will be voted. Where a choice has been specified in an
executed proxy with respect to the matters to be acted upon at
the Annual Meeting, the shares represented by the proxy will be
voted in accordance with the specifications. If no such
specifications are indicated, such proxies will be voted FOR the
nominees to the Board of Directors, FOR the approval of a plan
to repurchase certain stock options granted pursuant to the
Washington Sub, Inc. 2002 Stock Option Plan held by
non-employees of the Company, FOR the approval of the amendment
to the Companys 2005 Long-Term Incentive Plan, FOR the
approval of the amendment to the Companys 2002 Employee
Stock Purchase Plan and FOR the ratification of the selection of
KPMG LLP as the independent registered public accounting firm of
the Company for the 2006 fiscal year.
If you plan to attend the Annual Meeting, please be sure to
check the designated box on your proxy card indicating your
intent to attend, and save the admission ticket attached to your
proxy (the top half); or, indicate your intent to attend through
Skyworks telephone or Internet voting procedures, and save
the admission ticket attached to your proxy. If your shares are
held in street name by your broker (or other
nominee), please check your proxy card or contact your broker
(or other nominee) to determine whether you will be able to
indicate your intent to attend by telephone or via the Internet.
In order to be admitted to the Annual Meeting, you will need to
present your admission ticket, as well as provide a valid
picture identification, such as a drivers license or
passport. If your shares are held in street name by
your broker (or other nominee), you should contact your broker
(or other nominee) to obtain a proxy in your name and present it
at the Annual Meeting in order to vote.
Some brokers (or other nominees) may be participating in the
practice of householding proxy statements and annual
reports. This means that only one copy of this Proxy Statement
and our Annual Report may have been sent to multiple
stockholders in your household. If you are a stockholder and
your household or address has received only one Annual Report
and one Proxy Statement, the Company will promptly deliver a
separate copy of the Annual Report and the Proxy Statement to
you, upon your written request to Skyworks Solutions, Inc., 5221
California Avenue, Irvine, CA 92617, Attention: Investor
Relations, or oral request to Investor Relations at
(949) 231-4700. If you would like to receive separate
copies of our Annual Report and Proxy Statement in the future,
you should direct such request to your broker (or other
nominee). Even if your household or address has received only
one Annual Report and one Proxy Statement, a separate proxy card
should have been provided for each stockholder account. Each
individual proxy card should be signed, dated, and returned in
the enclosed postage-prepaid envelope (or voted by telephone or
via the Internet, as described therein). If your household has
received multiple copies of our Annual Report and Proxy
Statement, you can request the delivery of single copies in the
future by contacting your broker (or other nominee), or the
Company at the address or telephone number above.
If you are a participant in the Skyworks 401(k) Savings and
Investment Plan, you will receive a proxy card for the Skyworks
shares you own through the 401(k) Plan. That proxy card will
serve as a voting instruction card for the trustee of the 401(k)
Plan, and your 401(k) Plan shares will be voted as you instruct.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
To the Companys knowledge, the following table sets forth
the beneficial ownership of the Companys common stock as
of January 15, 2006, by the following individuals or
entities: (i) each person who beneficially owns 5% or more
of the outstanding shares of the Companys common stock as
of January 15, 2006; (ii) the Named Executives (as
defined herein under the heading Compensation of Executive
Officers); (iii) each director and nominee for
director; and (iv) all current executive officers and
directors of the Company, as a group.
Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission (SEC), is
not necessarily indicative of beneficial ownership for any other
purpose, and does not constitute an admission that the named
stockholder is a direct or indirect beneficial owner of those
shares. As of January 15, 2006, there were
159,376,859 shares of Skyworks common stock issued and
outstanding.
In computing the number of shares of Company common stock
beneficially owned by a person and the percentage ownership of
that person, shares of Company common stock that are subject to
stock options or other rights held by that person that are
currently exercisable or that will become exercisable within
60 days of January 15, 2006, are deemed outstanding.
These shares are not, however, deemed outstanding for the
purpose of computing the percentage ownership of any other
person.
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Number of Shares |
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Names and Addresses of Beneficial Owners(1) |
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Beneficially Owned(2) |
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Percent of Class |
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Delaware Management Holdings(3)
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10,659,803 |
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6.7 |
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David J. Aldrich
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1,717,923 |
(4) |
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1.1 |
% |
Kevin D. Barber
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381,762 |
(4) |
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Kevin L. Beebe
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26,250 |
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Moiz M. Beguwala
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394,794 |
(5) |
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(* |
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Dwight W. Decker
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1,467,502 |
(5) |
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(* |
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Timothy R. Furey
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153,750 |
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(* |
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Liam K. Griffin
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383,595 |
(4) |
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(* |
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Balakrishnan S. Iyer
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427,037 |
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(* |
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Allan M. Kline
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210,613 |
(4)(6) |
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(* |
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Thomas C. Leonard
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126,486 |
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(* |
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David P. McGlade
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11,250 |
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David J. McLachlan
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111,350 |
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Gregory L. Waters
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313,147 |
(4) |
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All directors and executive officers as a group (16 persons)
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6,207,920 |
(4)(5)(6) |
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3.8 |
% |
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Less than 1% |
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(1) |
Unless otherwise noted, each persons address is the
address of the Companys principal executive offices at
Skyworks Solutions, Inc., 20 Sylvan Road, Woburn, MA 01801 and
stockholders have sole voting and investment power with respect
to shares, except to the extent such power may be shared by a
spouse or otherwise subject to applicable community property
laws. |
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Includes the number of shares of Company common stock subject to
stock options held by that person that are currently exercisable
or will become exercisable within sixty (60) days of
January 15, 2006 (the Current Options), as
follows: Aldrich 1,432,564 shares under Current
Options; Barber 328,697 shares under Current
Options; Beebe 26,250 shares under Current
Options; Beguwala 382,760 shares under Current
Options; Decker 1,416,170 shares under Current
Options; Furey 153,750 shares under Current
Options; Griffin 313,633 shares under Current
Options; Iyer 420,955 shares under Current
Options; Kline 156,133 shares under Current
Options; Leonard 78,750 shares under Current
Options; McGlade 11,250 shares under Current
Options; McLachlan 108,750 shares under Current
Options; Waters 228,633 shares under Current
Options; directors and executive officers as a group (16
persons) 5,435,669 shares under Current Options. |
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(3) |
Consists of shares beneficially owned by Delaware Management
Holdings, Inc., a registered investment advisor wholly-owned by
Delaware Management Business Trust. Delaware Management Business
Trust is a wholly-owned subsidiary of Lincoln National Corp.
Delaware Management Holdings, Inc. may be |
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deemed to share beneficial ownership with the various Delaware
Investments Family of Funds. Of the shares beneficially owned,
Delaware Management Holdings, Inc. and Delaware Management
Business Trust (through its ownership Delaware Management
Holdings, Inc.) have sole voting power with respect to
10,610,883 shares, sole disposition power with respect to
10,653,903 shares, and shared disposition power with
respect to 5,900 shares. With respect to the information
relating to the affiliated Delaware Management Holdings
entities, the Company has relied on information supplied by such
entities on a Schedule 13G filed with the SEC on
February 9, 2005. The address of Delaware Management
Holdings, as set forth on Schedule 13G filed by Delaware
Management Holdings with the SEC on February 9, 2005, is
2005 Market Street, Philadelphia, Pennsylvania 19103. |
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(4) |
Includes shares held in the Companys 401(k) savings plan. |
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(5) |
Includes shares held in savings plan(s) of Conexant Systems,
Inc., and/or Rockwell Automation, Inc., resulting from the
distribution of Skyworks shares for shares of Conexant
Systems, Inc. held in those plans in connection with the merger
of the wireless communications business of Conexant Systems,
Inc. with Alpha Industries, Inc. on June 25, 2002. |
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(6) |
Includes 250 shares of Company common stock held in trust
for the benefit of other persons, as to all of which
Mr. Kline disclaims beneficial ownership. |
PROPOSALS TO BE VOTED
PROPOSAL 1
ELECTION OF DIRECTORS
The Companys certificate of incorporation and by-laws
provide that the Board of Directors shall be divided into three
classes, each class consisting, as nearly as possible, of
one-third of the total number of directors, with each class
having a three-year term. Following Mr. Donald Bealls
retirement on April 28, 2005, the Board of Directors
reduced its size from ten (10) to nine (9) members.
Accordingly, the Board of Directors currently is composed of
nine members: two Class I directors, three Class II
directors and four Class III directors. The terms of these
three classes are staggered in a manner so that only one class
is elected by stockholders annually.
To ensure compliance with the provisions of the Companys
certificate of incorporation and by-laws, and assuming no future
changes in the size or composition of the Board of Directors, in
connection with the 2008 annual meeting of the stockholders, the
Board of Directors anticipates that it will designate at least
one directorship that expires as of the 2008 annual meeting of
the stockholders as a Class I directorship to achieve
equality of number of directors among the three designated
classes.
A director elected by the Board of Directors to fill a vacancy
(including a vacancy created by an increase in the authorized
number of directors) shall serve for the remainder of the full
term of the class of directors in which the vacancy occurred and
until such directors successor is elected and has been
duly qualified or until his earlier death, resignation or
removal.
Messrs. Iyer and Leonard have been nominated for election as
Class I directors to hold office until the 2009 annual
meeting of stockholders and thereafter until their successors
have been duly elected and qualified. Directors are elected by a
plurality of the votes present in person or represented by proxy
and entitled to vote at the meeting. Shares represented by all
proxies received by the Board of Directors and not so marked as
to withhold authority to vote for the nominees will be voted
FOR the election of the two nominees.
Each person nominated for election has agreed to serve if
elected, and the Board of Directors knows of no reason why any
nominee should be unable or unwilling to serve, but if such
should be the case, proxies will be voted for the election of
some other person. No director, director nominee or executive
officer is related by blood, marriage or adoption to any other
director or executive officer. No arrangements or understandings
exist between any director or person nominated for election as a
director and any other person pursuant to which such person is
to be selected as a director or nominee for election as a
director.
Set forth below is summary information for each person nominated
and each person whose term of office as a director will continue
after the Annual Meeting, including the year such nominee or
director was first elected a director, the positions currently
held by the nominee and each director with the Company, the year
each nominees or directors term will expire and
class of director of each nominee and each director. This
information is followed by additional biographical information
about these individuals, as well as the Companys other
executive officers.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE FOR THE NOMINEES LISTED BELOW
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Year | |
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Nominees or Directors |
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Director | |
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Name (and Year He |
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Term Will | |
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Class of | |
First Became a Director) |
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Director | |
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Nominees:
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Balakrishnan S. Iyer (2002)
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Non-Employee Director |
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2009 |
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I |
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Thomas C. Leonard (1996)(3)
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Non-Employee Director |
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2009 |
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I |
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Continuing Directors:
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David J. Aldrich (2000)
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President, Chief Executive Officer and Director |
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2008 |
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III |
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Moiz M. Beguwala (2002)
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Non-Employee Director |
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2008 |
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III |
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Dwight W. Decker (2002)
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Non-Employee Director and Chairman of the Board |
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2008 |
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III |
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David P. McGlade (2005)(1)(2)(3)
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Non-Employee Director |
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2008 |
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III |
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Kevin L. Beebe (2004)(1)(2)(3)
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Non-Employee Director |
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2007 |
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II |
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Timothy R. Furey (1998)(2)(3)
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Non-Employee Director |
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2007 |
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II |
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David J. McLachlan (2000)(1)(3)
|
|
Non-Employee Director |
|
|
2007 |
|
|
|
II |
|
|
|
(1) |
Member of the Audit Committee |
|
(2) |
Member of the Compensation Committee |
|
(3) |
Member of the Nominating and Corporate Governance Committee |
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth for each director and executive
officer of the Company, his age and position with the Company as
of February 1, 2006:
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|
|
|
|
|
Name |
|
Age |
|
Title |
|
|
|
|
|
Dwight W. Decker
|
|
|
55 |
|
|
Chairman of the Board |
David J. Aldrich
|
|
|
49 |
|
|
President, Chief Executive Officer and Director |
Kevin L. Beebe
|
|
|
46 |
|
|
Director |
Moiz M. Beguwala
|
|
|
59 |
|
|
Director |
Timothy R. Furey
|
|
|
47 |
|
|
Director |
Balakrishnan S. Iyer
|
|
|
49 |
|
|
Director |
Thomas C. Leonard
|
|
|
71 |
|
|
Director |
David P. McGlade
|
|
|
45 |
|
|
Director |
David J. McLachlan
|
|
|
67 |
|
|
Director |
Allan M. Kline
|
|
|
60 |
|
|
Vice President and Chief Financial Officer |
Kevin D. Barber
|
|
|
45 |
|
|
Senior Vice President and General Manager, Mobile Platforms |
Liam K. Griffin
|
|
|
39 |
|
|
Senior Vice President, Sales and Marketing |
George M. LeVan
|
|
|
60 |
|
|
Vice President, Human Resources |
Stanley A. Swearingen, Jr.
|
|
|
46 |
|
|
Vice President and General Manager, Linear Products |
Mark V.B. Tremallo
|
|
|
49 |
|
|
Vice President, General Counsel and Secretary |
Gregory L. Waters
|
|
|
45 |
|
|
Executive Vice President |
Dwight W. Decker, age 55, has been Chairman of the
Board of Directors since June 2002. Dr. Decker has also
served as Chairman of the Board of Conexant Systems, Inc. (a
broadband communication semiconductor company) since December
1998 and has served as a director of Conexant since 1996. Since
November 2004, Dr. Decker has also served as
Conexants Chief Executive Officer, a position he
previously held from December 1998 until March 2004. He served
as Senior Vice President of Rockwell International Corporation
(now, Rockwell Automation, Inc.) (electronic controls and
communications) and President, Rockwell Semiconductor Systems
(now Conexant) from July 1998 to December 1998; Senior Vice
President of Rockwell; and President, Rockwell Semiconductor
Systems and Electronic Commerce prior thereto. Dr. Decker
is also a director of Mindspeed Technologies, Inc. (networking
infrastructure semiconductors), Pacific Mutual Holding Company
(life insurance) and Jazz Semiconductor, Inc. (semiconductor
wafer foundry). He is also a director or member of numerous
professional and civic organizations.
David J. Aldrich, age 49, has served as President,
Chief Executive Officer, and Director of the Company since April
2000. From September 1999 to April 2000, Mr. Aldrich served
as President and Chief Operating Officer. From May 1996 to May
1999, when he was appointed Executive Vice President,
Mr. Aldrich served as Vice President and General Manager of
the semiconductor products business unit. Mr. Aldrich
joined the Company in 1995 as Vice President, Chief Financial
Officer and Treasurer. From 1989 to 1995, Mr. Aldrich held
senior management positions at
M/A-COM, Inc.
(developer and manufacturer of radio frequency and microwave
semiconductors, components and IP networking solutions),
including Manager Integrated Circuits Active Products, Corporate
Vice President Strategic Planning, Director of Finance and
Administration and Director of Strategic Initiatives with the
Microelectronics Division.
Kevin L. Beebe, age 46, has been a director since
January 2004. He has been Group President of Operations at
ALLTEL Corporation, a telecommunications services company, since
1998. From 1996 to 1998, Mr. Beebe served as Executive Vice
President of Operations for 360° Corporation, a wireless
communication company. He has held a variety of executive and
senior management positions at several divisions of Sprint,
including Vice President of Operations and Vice President of
Marketing and Administration for Sprint Cellular, Director of
Marketing for Sprint North Central Division, Director of
Engineering and Operations Staff and Director of Product
Management and Business Development for Sprint Southeast
Division, as well as Staff Director of Product Services at
Sprint Corporation. Mr. Beebe began his career at AT&T/
Southwestern Bell as a Manager.
Moiz M. Beguwala, age 59, has been a director since
June 2002. He is an executive employee of Conexant Systems,
Inc., and served as Senior Vice President and General Manager of
the Wireless Communications
business unit of Conexant from January 1999 to June 2002. Prior
to Conexants spin-off from Rockwell International
Corporation, Mr. Beguwala served as Vice President and
General Manager, Wireless Communications Division, Rockwell
Semiconductor Systems, Inc. from October 1998 to December 1998;
Vice President and General Manager Personal Computing Division,
Rockwell Semiconductor Systems, Inc. from January 1998 to
October 1998; and Vice President, Worldwide Sales, Rockwell
Semiconductor Systems, Inc. from October 1995 to January 1998.
Mr. Beguwala serves on the Board of Directors of SIRF
Technology.
Timothy R. Furey, age 47, has been a director since
1998. He has been Chief Executive Officer of MarketBridge, a
privately owned sales and marketing strategy and technology
professional services firm, since 1991. His companys
clients include organizations such as IBM, British Telecom and
other global Fortune 500 companies selling complex
technology products and services into both OEM and end-user
markets. Prior to 1991, Mr. Furey held a variety of
consulting positions with Boston Consulting Group, Strategic
Planning Associates, Kaiser Associates and the Marketing Science
Institute.
Balakrishnan S. Iyer, age 49, has been a director
since June 2002. He served as Senior Vice President and Chief
Financial Officer of Conexant Systems, Inc. from December 1998
to June 2003, and has been a director of Conexant since February
2002. Prior to joining Conexant, Mr. Iyer served as Senior
Vice President and Chief Financial Officer of VLSI Technology
Inc. Prior to that, he was corporate controller for Cypress
Semiconductor Corp. and Director of Finance for Advanced Micro
Devices, Inc. Mr. Iyer serves on the Board of Directors of
Conexant, Invitrogen Corporation, Power Integrations, QLogic
Corporation, and IHS, Inc.
Thomas C. Leonard, age 71, has been a director since
August 1996. From April 2000 until June 2002 he served as
Chairman of the Board of the Company, and from September 1999 to
April 2000, he served the Company as Chief Executive Officer.
From July 1996 to September 1999, he served as President and
Chief Executive Officer. Mr. Leonard joined the Company in
1992 as a Division General Manager and was elected a Vice
President in 1994. Mr. Leonard has over 30 years
experience in the microwave industry, having held a variety of
executive and senior level management and marketing positions at
M/A-COM, Inc., Varian
Associates, Inc. and Sylvania.
David P. McGlade, age 45, has been a director since
February 2005. Since April 2005, he has served as the Chief
Executive Officer of Intelsat, a worldwide provider of satellite
communications services. Previously, Mr. McGlade served as
an Executive Director of mmO2 PLC and as the Chief Executive
Officer of O2 UK, a subsidiary of mmO2, a position he held from
October 2000 until March 2005. Before joining O2 UK,
Mr. McGlade was President of the Western Region for Sprint
PCS; Chief Executive Officer and co-founder of Pure Matrix, a
U.S. software company that enables the creation of services
on mobile phones; Chief Executive Officer of CatchTV, an
Internet/TV convergence company; and Vice President, Operations
at TCI.
David J. McLachlan, age 67, has been a director
since 2000. Mr. McLachlan served as a senior advisor to the
Chairman and Chief Executive Officer of Genzyme Corporation, a
biotechnology company, from 1999 to 2004. He also was the
Executive Vice President and Chief Financial Officer of Genzyme
Corporation from 1989 to 1999. Prior to joining Genzyme,
Mr. McLachlan served as Vice President, Chief Financial
Officer of Adams-Russell Company, an electronic component
supplier and cable television franchise owner.
Mr. McLachlan also serves on the Boards of Directors of
Dyax Corporation, a biotechnology company, and HearUSA, Ltd., a
hearing care services company.
Allan M. Kline, age 60, has been Vice President and
Chief Financial Officer since January 2004. From May 2003 until
January 2004, Mr. Kline served as Chief Financial Officer
of Fibermark, Inc., a producer of specialty fiber-based
materials that filed a voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code
(U.S.B.C.) on November 15, 2004. Prior to this,
from June 1996 to February 2002, Mr. Kline served as Chief
Financial Officer for Acterna Corporation, a global
communications test and management company that filed a
voluntary petition for reorganization under Chapter 11 of
the U.S.B.C. on May 6, 2003. He has also served as Chief
Financial Officer for CrossComm Corp., a provider of
internetworking systems from 1995 to 1996 and for Cabot Safety
Corporation, a subsidiary of Cabot Corporation, a basic
materials manufacturer from 1990 to 1994. Mr. Kline was
also a Vice President at OConnor, Wright Wyman, Inc., a
merger and acquisition advisory firm from August 2002 to May
2003, and served on the Board of Directors of Acterna and
CrossComm. Mr. Kline also serves as a director of the
Massachusetts Network Communications Council. He began his
career at Arthur Young & Co. in 1969, where he was a
partner for six years.
Kevin D. Barber, age 45, has served as Senior Vice
President and General Manager, Mobile Platforms since November
2005 and Senior Vice President and General Manager, RF Solutions
since September 2003. Previously, Mr. Barber served as
Senior Vice President, Operations from June 2002 to September
2003; Senior Vice President, Operations of Conexant Systems,
Inc. (broadband communication semiconductors) from February 2001
to June 2002; Vice President, Internal Manufacturing from August
2000 to February 2001; Vice President, Device Manufacturing from
March 1999 to August 2000; Vice President, Strategic Sourcing
from November 1998 to March 1999; and Director, Material
Sourcing of Rockwell Semiconductor Systems (now Conexant) from
May 1997 to November 1998. Prior to this, Mr. Barber held
various engineering and operational roles at Rockwell
Semiconductor Systems since April 1984.
Liam K. Griffin, age 39, joined the Company in
August 2001 and serves as Senior Vice President, Sales and
Marketing. Previously, Mr. Griffin was employed by Vectron
International, a division of Dover Corp., as Vice President of
Worldwide Sales from 1997 to 2001, and as Vice President of
North American Sales from 1995 to 1997. His prior experience
included positions as a Marketing Manager at AT&T
Microelectronics, Inc. and Product and Process Engineer at
AT&T Network Systems.
George M. LeVan, age 60, has served as Vice
President, Human Resources since June 2002. Previously,
Mr. LeVan served as Director, Human Resources, from 1991 to
2002 and has managed the human resource department since joining
the Company in 1982. Prior to 1982, he held human resources
positions at Data Terminal Systems, Inc., W.R. Grace &
Co., Compo Industries, Inc. and RCA.
Stanley A. Swearingen, Jr., age 46, joined the
Company in August 2004 and serves as Vice President and General
Manager, Linear Products. Prior to joining Skyworks, from
November 2000 to August 2004, Mr. Swearingen was Vice
President and General Manager of Agere Systems Computing
Connectivity division, where he was responsible for the design
and manufacturing of wired and wireless connectivity solutions.
Prior to this, from July 1999 to November 2000, he served as
President and Chief Operating Officer of Quantex Microsystems, a
direct provider of personal computers, servers and Internet
infrastructure products. He has also held senior management
positions at National Semiconductor, Cyrix and Digital Equipment
Corp.
Mark V.B. Tremallo, age 49, joined the Company in
April 2004 and serves as Vice President, General Counsel and
Secretary. Previously, from January 2003 to April 2004,
Mr. Tremallo was Senior Vice President and General Counsel
at TAC Worldwide Companies, a technical workforce solutions
provider. Prior to TAC, from May 1997 to May 2002, he was Vice
President, General Counsel and Secretary at Acterna Corp., a
global communications test equipment and solutions provider,
which filed a voluntary petition for reorganization under
Chapter 11 of the U.S.B.C. on May 6, 2003. Earlier,
Mr. Tremallo served as Vice President, General Counsel and
Secretary at Cabot Safety Corporation.
Gregory L. Waters, age 45, joined the Company in
April 2003, and has served as Executive Vice President since
November 2005, and Vice President and General Manager, Cellular
Systems since May 2004. Previously, from February 2001 until
April 2003, Mr. Waters served as Senior Vice President of
Strategy and Business Development at Agere Systems and,
beginning in 1998, held positions there as Vice President of the
Wireless Communications business and Vice President of the
Broadband Communications business. Prior to working at Agere,
Mr. Waters held a variety of senior management positions
within Texas Instruments, including Director of Network Access
Products and Director of North American Sales.
As part of the terms of the merger of the wireless
communications business of Conexant Systems, Inc. with and into
Alpha Industries, Inc. on June 25, 2002 (the
Merger), four designees of Conexant
Donald R. Beall (who retired as a director in April 2005),
Moiz M. Beguwala, Dwight W. Decker and Balakrishnan S.
Iyer were appointed to our Board of Directors. Each
of the remaining three Conexant designees to our Board of
Directors continues to have a business relationship with
Conexant. Mr. Decker currently serves as the chief
executive officer and chairman of the board of Conexant.
Mr. Iyer currently serves as a non-employee director of
Conexant. Mr. Beguwala is a current employee, as well as a
former executive officer, of Conexant.
CORPORATE GOVERNANCE
General
Board of Director and Stockholder Meetings: The Board of
Directors met six (6) times during the fiscal year ended
September 30, 2005 (fiscal year 2005). Each
director attended at least 75% of the Board of Directors
meetings and the meetings of the committees of the Board of
Directors on which he served in fiscal year 2005. The
Companys policy is that directors are encouraged to attend
the annual meeting of stockholders and expected to do so when
such meeting is held in conjunction with a regularly scheduled
meeting of the Board of Directors. Five (5) members of the
Board of Directors attended the 2005 annual meeting of
stockholders.
Board of Director Independence: Each year, the Board of
Directors reviews the relationships that each director has with
the Company and with other parties. Only those directors who do
not have any of the categorical relationships that preclude them
from being independent within the meaning of applicable NASDAQ
Stock Market, Inc. Marketplace Rules (the NASDAQ
Rules) and who the Board of Directors affirmatively
determines have no relationships that would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director, are considered to be independent
directors. The Board of Directors has reviewed a number of
factors to evaluate the independence of each of its members.
These factors include its members current and historic
relationships with the Company and its competitors, suppliers
and customers; their relationships with management and other
directors; the relationships their current and former employers
have with the Company; and the relationships between the Company
and other companies of which a member of the Companys
Board of Directors is a director or executive officer. After
evaluating these factors, the Board of Directors has determined
that a majority of the members of the Board of Directors, namely
Kevin L. Beebe, Moiz M. Beguwala, Timothy R.
Furey, Balakrishnan S. Iyer, Thomas Leonard, David J.
McLachlan, and David P. McGlade, do not have any
relationships that would interfere with the exercise of
independent judgment in carrying out their responsibilities as a
director and are independent directors of the Company within the
meaning of applicable NASDAQ Rules.
Corporate Governance Guidelines: The Board of Directors
has adopted corporate governance practices to help fulfill its
responsibilities to the stockholders in overseeing the work of
management and the Companys business results. These
guidelines are intended to ensure that the Board of Directors
has the necessary authority and practices in place to review and
evaluate the Companys business operations, as needed, and
to make decisions that are independent of the Companys
management. In addition, the guidelines are intended to align
the interests of directors and management with those of the
Companys stockholders. A copy of the Companys
Corporate Governance Guidelines is available on the Investor
Relations portion the Companys website at:
http://www.skyworksinc.com.
In accordance with these Corporate Governance Guidelines,
independent members of the Board of Directors of the Company met
in executive session without management present twice during
fiscal year 2005. The Board of Directors has designated
Mr. Furey as the presiding director for these meetings.
Stockholder Communications: Our stockholders may
communicate directly with the Board of Directors as a whole or
to individual directors by writing directly to those individuals
at the following address: 20 Sylvan Road, Woburn, MA 01801. The
Company will forward to each director to whom such communication
is addressed, and to the Chairman of the Board in his capacity
as representative of the entire Board of Directors, any mail
received at the Companys corporate office to the address
specified by such director and the Chairman of the Board.
Codes of Ethics: The Board of Directors has adopted a
Code of Business Conduct and Ethics that applies to all of our
employees, officers and directors, as well as a Code of Ethics
For Principal Financial Officers. Links to these codes of ethics
are on the Investor Relations portion of the Companys
website at: http://www.skyworksinc.com.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a standing Audit Committee,
Compensation Committee, and Nominating and Corporate Governance
Committee.
Audit Committee: Skyworks has established a separately
designated Audit Committee in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended (the Exchange Act). The
members of the Audit Committee are Mr. McLachlan, who
serves as the chairman, and Messrs. Beebe and McGlade. The Board
of Directors has determined that each of the members of the
committee is independent within the meaning of applicable NASDAQ
Rules and
Rule 10A-3 under
the Exchange Act. The Board of Directors has determined that the
Chairman of the Audit Committee, Mr. McLachlan, is an
audit committee financial expert as defined in
Item 401(h) of
Regulation S-K.
The Audit Committee met nine (9) times during fiscal year
2005.
The primary responsibility of the Audit Committee is the
oversight of the quality and integrity of the Companys
financial statements, the Companys internal financial and
accounting processes, and the independent audit process.
Additionally, the Audit Committee has the responsibilities and
authority necessary to comply with Rule 10A-3 under the
Exchange Act. The committee meets privately with the independent
registered public accounting firm, reviews their performance and
independence from management and has the sole authority to
retain and dismiss the independent registered public accounting
firm. These and other aspects of the Audit Committees
authority are more particularly described in the Companys
Audit Committee Charter, which the Board of Directors adopted
and is reviewed annually by the committee and is available on
the Investor Relations portion of our website at:
http://www.skyworksinc.com.
The Audit Committee has adopted a formal policy concerning
approval of audit and non-audit services to be provided to the
Company by its independent registered public accounting firm,
KPMG LLP. The policy requires that all services provided by KPMG
LLP, including audit services and permitted audit-related and
non-audit services, be pre-approved by the Audit Committee. The
Audit Committee pre-approved all audit and non-audit services
provided by KPMG LLP for fiscal year 2005.
Compensation Committee: The members of the Compensation
Committee are Mr. Furey, who serves as the chairman, and
Messrs. Beebe and McGlade, each of whom the Board of
Directors has determined is independent within the meaning of
applicable NASDAQ Rules. The Compensation Committee met eight
(8) times during fiscal year 2005. The functions of the
Compensation Committee include establishing the appropriate
level of compensation, including short and long-term incentive
compensation, of the Chief Executive Officer, all other
executive officers and any other officers or employees who
report directly to the Chief Executive Officer. The Compensation
Committee also administers Skyworks stock option plans.
The Board of Directors has adopted a written charter for the
Compensation Committee, which the Board of Directors adopted and
is available on the Investor Relations portion of the
Companys website at: http://www.skyworksinc.com.
Nominating and Corporate Governance Committee: The
members of the Nominating and Corporate Governance Committee,
each of whom the Board of Directors has determined is
independent within the meaning of applicable NASDAQ Rules, are
Mr. Beebe, who serves as the chairman, and
Messrs. Furey, Leonard, McGlade, and McLachlan. The
Nominating and Corporate Governance Committee met three
(3) times during fiscal year 2005. The Nominating and
Corporate Governance Committee is responsible for evaluating and
recommending individuals for election or re-election to the
Board of Directors and its committees, including any
recommendations that may be submitted by stockholders, the
evaluation of the performance of the Board of Directors and its
committees, and the evaluation and recommendation of the
corporate governance policies. These and other aspects of the
Nominating and Corporate Governance Committees authority
are more particularly described in the Nominating and Corporate
Governance Committee Charter, which the Board of Directors
adopted and is available on the Investor Relations portion of
the Companys website at: http://www.skyworksinc.com.
Director Nomination Procedures: The Nominating and
Corporate Governance Committee evaluates director candidates in
the context of the overall composition and needs of the Board of
Directors, with the objective of recommending a group that can
best manage the business and affairs of the Company and
represent the interests of the Companys stockholders using
its diversity of experience. The committee seeks directors who
possess certain minimum qualifications, including the following:
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A director must have substantial or significant business or
professional experience or an understanding of technology,
finance, marketing, financial reporting, international business
or other disciplines relevant to the business of the Company. |
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A director (other than an employee-director) must be free from
any relationship that, in the opinion of the Board of Directors,
would interfere with the exercise of his or her independent
judgment as a member of the Board of Directors or of a Board
committee. |
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The committee also considers the following qualities and skills,
among others, in its selection of directors and as candidates
for appointment to the committees of the Board of Directors: |
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|
Economic, technical, scientific, academic, financial,
accounting, legal, marketing, or other expertise applicable to
the business of the Company; |
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Leadership or substantial achievement in their particular fields; |
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Demonstrated ability to exercise sound business judgment; |
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Integrity and high moral and ethical character; |
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|
Potential to contribute to the diversity of viewpoints,
backgrounds, or experiences of the Board of Directors as a whole; |
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|
Capacity and desire to represent the balanced, best interests of
the Company as a whole and not primarily a special interest
group or constituency; |
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Ability to work well with others; |
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High degree of interest in the business of the Company; |
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Dedication to the success of the Company; |
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Commitment to the responsibilities of a director; and |
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International business or professional experience. |
In addition, the committee will consider that a majority of the
Board of Directors must meet the independence requirements
promulgated by the applicable NASDAQ Rules. The Company expects
that a directors existing and future commitments will not
materially interfere with such directors obligations to
the Company. For candidates who are incumbent directors, the
committee considers each directors past attendance at
meetings and participation in and contributions to the
activities of the Board of Directors. The committee identifies
candidates for director nominees in consultation with the Chief
Executive Officer of the Company and the Chairman of the Board
of Directors, through the use of search firms or other advisors
or through such other methods as the committee deems to be
helpful to identify candidates. Once candidates have been
identified, the committee confirms that the candidates meet all
of the minimum qualifications for director nominees set forth
above through interviews, background checks, or any other means
that the committee deems to be helpful in the evaluation
process. The committee then meets to discuss and evaluate the
qualities and skills of each candidate, both on an individual
basis and taking into account the overall composition and needs
of the Board of Directors. Based on the results of the
evaluation process, the committee recommends candidates for
director nominees for election to the Board of Directors.
The Nominating and Corporate Governance Committee will consider
director candidates recommended by stockholders provided the
stockholders follow the procedures set forth below. The
committee does not intend to alter the manner in which it
evaluates candidates, including the criteria set forth above,
based on whether the candidate was recommended by a stockholder
or otherwise. To date, the Nominating and Corporate Governance
Committee has not received a recommendation for a director
nominee from any stockholder of the Companys voting stock.
Stockholders who wish to recommend individuals for consideration
by the Nominating and Corporate Governance Committee to become
nominees for election to the Board of Directors may do so by
submitting a written recommendation to the committee not later
than October 16, 2006, in accordance with the procedures
set forth below in this Proxy Statement under the heading
Stockholder Proposals. For nominees for election to
the Board of Directors proposed by stockholders to be
considered, the recommendation for nomination must be in writing
and must include the following information:
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Name of the stockholder, whether an entity or an individual,
making the recommendation; |
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A written statement disclosing such stockholders
beneficial ownership of the Companys capital stock; |
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Name of the individual recommended for consideration as a
director nominee; |
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A written statement from the stockholder making the
recommendation stating why such recommended candidate would be
able to fulfill the duties of a director; |
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A written statement from the stockholder making the
recommendation stating how the recommended candidate meets the
independence requirements established by the SEC and The NASDAQ
Stock Market, Inc.; |
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A written statement disclosing the recommended candidates
beneficial ownership of the Companys capital
stock; and |
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A written statement disclosing relationships between the
recommended candidate and the Company which may constitute a
conflict of interest. |
Nominations may be sent to the attention of the committee via
U.S. mail or expedited delivery service to Skyworks
Solutions, Inc., 20 Sylvan Road, Woburn, Massachusetts
01801, Attn: Nominating and Corporate Governance Committee,
c/o Secretary of Skyworks Solutions, Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The Compensation Committee of the Board of Directors currently
comprises Messrs. Beebe, Furey and McGlade. No member of this
committee was at any time during the past fiscal year an officer
or employee of the Company, was formerly an officer of the
Company or any of its subsidiaries, or had any employment
relationship with the Company or any of its subsidiaries. No
such member of the Compensation Committee had any relationship
with the Company requiring disclosure under Item 404 of
Regulation S-K
under the Exchange Act. No executive officer of Skyworks has
served as a director or member of the compensation committee (or
other committee serving an equivalent function) of any other
entity, one of whose executive officers served as a director of
or member of the Compensation Committee of Skyworks.
PROPOSAL 2
APPROVAL OF A PLAN TO REPURCHASE CERTAIN STOCK OPTIONS ISSUED
UNDER THE
WASHINGTON SUB, INC. 2002 STOCK OPTION PLAN HELD BY
NON-EMPLOYEES
On January 31, 2006, our Board of Directors authorized,
subject to stockholder approval, a stock option repurchase plan
whereby eligible participants under the Washington Sub, Inc.
2002 Stock Option Plan (the Washington Plan) may
tender for cash outstanding stock options issued pursuant to the
Washington Plan with option exercise prices of $13.00 or more
(the Repurchase Plan). Only those participants under
the Washington Plan who are not employees of the Company, and
who have not had a fiduciary relationship with the Company after
June 25, 2002, may participate in the Repurchase Plan
(Eligible Participants). The Companys
non-employee directors will not be eligible to participate in
the Repurchase Plan.
If the Companys stockholders approve the Repurchase Plan
and the Board of Directors instructs the Company to proceed with
the plan, Eligible Participants will be allowed to tender
Washington Plan options outstanding as of the tender date for
the following cash payments:
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If the exercise price of the outstanding |
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Eligible Participants will receive the following |
Washington Plan option is: |
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Then |
cash payments: |
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$13.00 to $16.99 per share of common stock subject to the
option |
|
→ |
$0.75 per share of common stock subject to the option |
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$17.00 to $21.99 per share of common stock subject to the
option |
|
→ |
$0.50 per share of common stock subject to the option |
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$22.00 or higher per share of common stock subject to the option |
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$0.25 per share of common stock subject to the option |
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While stockholder approval is not required by law, regulation,
listing requirements or the Companys corporate governance
documents to authorize the Repurchase Plan, our Board of
Directors believes that the Repurchase Plan should be submitted
to the Companys stockholders; however, the Board of
Directors has not determined what action will be taken if the
Repurchase Plan is not approved.
Background of the Washington Plan
The Washington Plan became effective on June 25, 2002, in
connection with the spin-off and merger of the wireless business
of Conexant Systems, Inc. (Conexant) into Alpha
Industries, Inc. At the time of the spin-off of Conexants
wireless business, certain outstanding Conexant options granted
pursuant to certain Conexant stock-based compensation plans were
converted so that following the spin-off and merger each holder
of such options held (i) options to purchase shares of
Conexant common stock and (ii) options to purchase shares
of Skyworks common stock. The purpose of the Washington Plan is
to provide a means for the Company to perform its obligations
with respect to these converted stock options. The only
participants in the Washington Plan are those persons who, at
the time of the spin-off and merger, held outstanding options
granted pursuant to certain Conexant stock option plans.
Skyworks has not granted additional stock options under the
Washington Plan following the spin-off and merger. The
outstanding options under the Washington Plan generally have the
same terms and conditions as the original Conexant options from
which they were derived.
Skyworks agreed to keep each of these stock options issued to
the Conexant participants outstanding pursuant to each
options original terms for so long as the participant in
the Washington Plan continued to be employed by Conexant (or
certain associated entities). As a result, as of
December 30, 2005, Eligible Participants held options
issued under the Washington Plan for the purchase of
approximately 8.1 million shares of the Companys
common stock with an exercise price of $13.00 or more.
Approximately 85% of these options will not expire until
January 1, 2009 or later.
On February 1, 2006, the last reported sale price of the
Company common stock on the NASDAQ Stock Market was $5.32.
Comparatively, the options to be repurchased pursuant to the
Repurchase Plan have exercise prices ranging from
$13.00 per share to $153.73 per share, with a weighted
average exercise price of $20.79 and a weighted average
remaining life of 3.75 years. As a result of the difference
between the current market price of the Companys common
stock and the exercise price of these options, participants in
the Washington Plan hold stock options issued under the plan
with exercise prices significantly higher than the current
market price for the Companys common stock. Given that the
Eligible Participants have no employment relationship with the
Company, the Board of Directors does not believe the Company
derives any incentive or retentive benefit from the continuing
outstanding status of such options.
Additionally, the Board of Directors believes that the
Repurchase Plan will benefit the Company by reducing the
Companys option overhang. The Company defines
overhang as the total number of shares of common
stock underlying stock-based awards granted but not yet
exercised (excluding shares issuable under our employee stock
purchase plan), plus shares available for grant, divided by the
total number of shares of common stock outstanding at the end of
the reporting period. Assuming the full participation of all
Eligible Participants, the Repurchase Plan would reduce the
Companys current option overhang by
approximately 5 percentage points. Options tendered, and
accepted, for repurchase under the Washington Plan will be
cancelled and will not be available for future grant.
Description of the Repurchase Plan
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Implementation; Eligibility |
The Board of Directors authorized the Repurchase Plan on
January 31, 2006, subject to stockholder approval. If
approved, Eligible Participants are currently expected to be
offered the opportunity to participate in the Repurchase Plan
under a tender offer following the submission of the necessary
materials to the SEC.
Even if approved by our stockholders, the Board of Directors is
not obligated to commence the Repurchase Plan, and may determine
not to proceed with the Repurchase Plan, or may alter the terms
of the plan without further stockholder approval. The Board of
Directors will also retain the authority, in its discretion, to
terminate or postpone the Repurchase Plan at any time prior to
the expiration of the tender offer.
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Eligible Options and Cost of Plan |
As of December 30, 2005, options to purchase approximately
11 million shares were outstanding under the Washington
Plan. Of these outstanding options, options to purchase
approximately 8.1 million shares were held by Eligible
Participants, having an exercise price of at least $13.00, would
be eligible to be repurchased by
the Company pursuant to the Repurchase Plan. If all of these
options were tendered to the Company and accepted for
repurchase, the total cost of the Repurchase Plan would be
approximately $4.3 million.
Participation in the Repurchase Plan will be voluntary; however,
if an Eligible Participant elects to tender his or her
outstanding options to the Company, the Eligible Participant
will be required to tender all outstanding options issued
pursuant to the Washington Plan with an exercise price of $13.00
or more. The partial tender of outstanding options will not be
permitted. Participation in the Repurchase Plan may also be
conditioned upon the execution of certain releases and option
agreement amendments between each participant in the plan and
the Company. The specific processes by which one will be
permitted to participate in the Repurchase Plan will be set
forth in the documents prepared and the SEC filings made
pursuant to the tender offer in connection with the Repurchase
Plan.
Pursuant to SFAS No. 123(R), the cash payments made to
the Eligible Participants in exchange for the tendered stock
options would be recorded against stockholders equity so
long as the cash paid did not exceed the fair value of the stock
options accepted for repurchase as of the date of such
repurchase. To the extent the cash paid in exchange for a stock
option exceeds the options fair value at the time of
repurchase, the Company would recognize compensation expense for
such difference.
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U.S. Federal Income Tax Consequences |
An Eligible Participant who tenders his or her stock options for
payment will recognize ordinary income equal to the amount of
the cash payment made to the Eligible Participant by the Company.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR APPROVAL OF THE PLAN TO REPURCHASE
CERTAIN STOCK OPTIONS ISSUED UNDER THE WASHINGTON SUB, INC. 2002
STOCK OPTION PLAN HELD BY NON-EMPLOYEES
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE 2005 LONG-TERM INCENTIVE
PLAN
The Board of Directors believes that the continued growth and
profitability of Skyworks depends, in large part, on its ability
to maintain a competitive position by attracting, retaining and
motivating key employees with experience and ability. Skyworks
believes that its stock-based compensation programs are central
to this objective. Skyworks anticipates that the shares
currently available under our existing stock-based compensation
plans will be insufficient to meet our needs beyond next year,
thus impairing our ability to attract and retain key employees
through the grant of stock-based awards. We are currently
authorized to issue up to 5 million shares of our common
stock, subject to adjustment in the event of stock splits and
other similar events, pursuant to awards granted under the 2005
Long-Term Incentive Plan (2005 LTIP). As of
December 30, 2005, there were approximately
3.2 million shares remaining available for future awards
under the 2005 LTIP. Accordingly, on January 31, 2006, the
Board of Directors adopted, subject to stockholder approval, an
amendment to the 2005 LTIP that increased, from 5 million
to 15 million, the number of shares of our common stock
available for issuance under the 2005 LTIP, subject to
adjustment in the event of stock splits and other similar
events. We believe that our stock-based compensation programs
have been integral to our success in the past and will be
important to our ability to succeed in the future. Therefore, we
consider approval of the amendment to the 2005 LTIP vital to our
future success.
The 2005 LTIP, among other things:
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Prohibits the granting of stock options with an exercise price
below the fair market value of the common stock on the grant
date; |
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Provides a discounted share reduction formula in the
pool of available shares, whereby the issuance of any full
value award (i.e., an award other than a nonqualified
stock option with up to a seven (7) year term) will reduce
the pool of available shares by 1.5 shares. Thus, if no
nonqualified stock options were to be issued from the additional
10 million shares requested under the 2005 LTIP, the
maximum number of shares of common stock subject to other awards
from the shares requested would be 6,666,667 shares. |
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Prohibits repricing, or reducing the exercise price of a stock
option, without first obtaining stockholder approval; and, |
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Does not include any evergreen or
reload provisions. |
As of December 30, 2005, the Company had a total of
33,579,067 shares reserved for issuance pursuant to
outstanding stock options, with a weighted average exercise
price of $12.28 and a weighted average life of 6.44 years,
and a total of 653,625 issued but unvested restricted shares. As
of December 30, 2005, pursuant to all of its stock-based
compensation plans, the Company had 4,645,555 shares
available for future grant to employees, and 412,500 available
for future grant to non-employee members of its Board of
Directors. Depending on the mix of full value and
nonqualified stock options awarded under the 2005 LTIP,
additional dilution from this share request would range from
4.2% to a maximum of 6.3% (based on shares outstanding as of
December 30, 2005).
Description of the 2005 LTIP
This summary is qualified in its entirety by reference to the
2005 LTIP, a copy of which is attached to the electronic copy of
this Proxy Statement filed with the SEC and may be accessed from
the SECs home page (www.sec.gov). In addition, a copy of
the 2005 LTIP may be obtained from the Secretary of the Company.
The 2005 LTIP provides for the grant of nonqualified stock
options, restricted stock awards, stock appreciation rights and
other stock-based awards, including the grant of shares based
upon certain conditions such as performance-based conditions and
the grant of securities convertible into common stock
(collectively, Awards).
Nonqualified Stock Options. Optionees receive the right
to purchase a specified number of shares of common stock at a
specified option price and subject to such other terms and
conditions as are specified in connection with the option grant.
Options may be granted at an exercise price that is no less than
100% of the fair market value of the common stock on the date of
grant. Options may not be granted for a term in excess of seven
(7) years. The 2005 LTIP permits the following forms of
payment of the exercise price of options: (i) payment by
cash, check or in connection with a cashless
exercise through a broker, (ii) surrender to the
Company of shares of common stock, (iii) delivery to the
Company of a promissory note, (iv) any other lawful means,
or (v) any combination of these forms of payment.
Unless such action is approved by the Companys
stockholders: (1) no outstanding option may be amended to
provide an exercise price per share that is lower than the
then-current exercise price per share of the option (other than
adjustments to reflect stock splits, stock dividends,
recapitalizations, spin-offs and other similar changes in
capitalization) and (2) the Board of Directors may not
cancel any outstanding option and grant in substitution therefor
new Awards under the Plan covering the same or a different
number of shares of common stock and having an exercise price
per share lower than the then-current exercise price per share
of the cancelled option. No option shall contain any provision
entitling the optionee to the automatic grant of additional
options in connection with any exercise of the original option.
Restricted Stock Awards. Restricted stock Awards entitle
recipients to acquire shares of common stock, subject to the
right of the Company to repurchase all or part of such shares
from the recipient in the event that the conditions specified in
the applicable Award are not satisfied prior to the end of the
applicable restriction period established for such Award.
Instead of issuing common stock that is subject to repurchase,
the Board may grant Awards known as restricted stock units that
entitle recipients to receive unrestricted shares of common
stock in the event that the conditions specified in the
applicable Award are satisfied prior to the end of the
applicable restriction period established for such Award.
Stock Appreciation Rights. Stock appreciation rights
entitle recipients to receive the appreciation in the value of
the common stock over the value of the Common on the date of
grant of the stock appreciation right. Stock appreciation rights
will be settled by the delivery of shares of common stock. Stock
appreciation rights may be issued in tandem with options or as
stand-alone rights.
Other Stock-Based Awards. Under the 2005 LTIP, the Board
of Directors has the right to grant other Awards based upon the
common stock having such terms and conditions as the Board of
Directors may
determine, including the grant of shares based upon certain
conditions such as performance-based conditions and the grant of
securities convertible into common stock.
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Eligibility to Receive Awards |
Employees, officers, consultants and advisors of the Company and
its subsidiaries, and of other business ventures in which the
Company has a significant interest, are eligible to be granted
Awards under the 2005 LTIP. The maximum number of shares with
respect to which Awards may be granted to any participant under
the 2005 LTIP is 750,000 shares per calendar year.
As of February 1, 2006, approximately 4,000 persons are
eligible to receive Awards under the 2005 LTIP, including the
Companys eight (8) executive officers. The granting
of Awards under the 2005 LTIP is discretionary, and the Company
cannot now determine the number or type of Awards to be granted
in the future to any particular person or group. On
February 1, 2006, the last reported sale price of the
Company common stock on the NASDAQ Stock Market was $5.32.
The 2005 LTIP is administered by the Board of Directors. The
Board of Directors has the authority to adopt, amend and repeal
the administrative rules, guidelines and practices relating to
the 2005 LTIP and to interpret the provisions of the 2005 LTIP.
Pursuant to the terms of the 2005 LTIP, the Board of Directors
may delegate authority under the 2005 LTIP to one or more
committees or subcommittees of the Board of Directors. The Board
of Directors has authorized the Compensation Committee to
administer certain aspects of the 2005 LTIP, including the
granting of options to executive officers.
Subject to any applicable limitations contained in the 2005
LTIP, the Board of Directors, the Compensation Committee, or any
other committee to whom the Board of Directors delegates
authority, as the case may be, selects the recipients of Awards
and determines (i) the number of shares of common stock
covered by options and the dates upon which such options become
exercisable, (ii) the exercise price of options (which may
not be less than 100% of the fair market value of the common
stock), (iii) the duration of options (which may not exceed
seven (7) years) and (iv) the number of shares of
common stock subject to any restricted stock or other
stock-based Awards and the terms and conditions of such Awards,
including conditions for repurchase, issue price and repurchase
price.
The Board of Directors is required to make appropriate
adjustments in connection with the 2005 LTIP and any outstanding
Awards to reflect stock splits, stock dividends,
recapitalizations, spin-offs and other similar changes in
capitalization. The 2005 LTIP also contains provisions
addressing the consequences of any Reorganization Event, which
is defined as (i) any merger or consolidation of the
Company with or into another entity as a result of which all of
the common stock of the Company is converted into or exchanged
for the right to receive cash, securities or other property or
(ii) any exchange of all of the common stock of the Company
for cash, securities or other property pursuant to a share
exchange transaction. Upon the occurrence of a Reorganization
Event, all outstanding options are to be assumed, or substituted
for, by the acquiring or succeeding corporation. However, if the
acquiring or succeeding corporation does not agree to assume, or
substitute for, outstanding options, then the Board of Directors
must either accelerate the options to make them fully
exercisable prior to consummation of the Reorganization Event or
provide for a cash out of the value of any outstanding options.
Upon the occurrence of a Reorganization Event, the repurchase
and other rights of the Company under each outstanding
restricted stock Award will inure to the benefit of the
acquiring or succeeding corporation. The Board of Directors will
specify the effect of a Reorganization Event on any other Award
at the time the Award is granted.
If a Change in Control Event occurs, except to the extent
specifically provided to the contrary in any Award agreement or
any other agreement between a Participant and the Company, any
options outstanding as of the date the Change of Control occur
and not then exercisable shall automatically become fully
exercisable and all restrictions and conditions on all
Restricted Stock Awards shall automatically be deemed terminated
or satisfied. A Change in Control Event occurs if
the Continuing Directors (as defined below) cease for any reason
to constitute a majority of the Board. A Continuing
Director will include any member of the Board as of the
effective date of the Plan and any individual nominated for
election to the Board by a majority of the then Continuing
Directors.
If any Award expires or is terminated, surrendered, canceled or
forfeited, the unused shares of common stock covered by such
Award will again be available for grant under the 2005 LTIP.
The Board of Directors may at any time amend, suspend or
terminate the 2005 LTIP, except that no Award designated as
subject to Section 162(m) of the Code by the Board of
Directors after the date of such amendment shall become
exercisable, realizable or vested (to the extent such amendment
was required to grant such Award) unless and until such
amendment shall have been approved by the Companys
stockholders. No Award may be granted under the 2005 LTIP after
February 1, 2015, but Awards previously granted may extend
beyond that date.
If stockholders do not approve the amendment of the 2005 LTIP,
the proposed amendment to the 2005 LTIP will not go into effect.
In such event, the Board of Directors will consider whether to
adopt alternative arrangements based on its assessment of the
needs of the Company.
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Federal Income Tax Consequences |
The following summarizes the United States federal income tax
consequences that generally will arise with respect to awards
granted under the plan. This summary is based on the tax laws in
effect as of the date of this Proxy Statement. Changes to these
laws could alter the tax consequences described below.
Nonqualified Stock Options. A participant will not have
income upon the grant of a nonqualified stock option. A
participant will have compensation income upon the exercise of a
nonqualified stock option equal to the value of the stock on the
day the participant exercised the option less the exercise
price. Upon sale of the stock, the participant will have capital
gain or loss equal to the difference between the sales proceeds
and the value of the stock on the day the option was exercised.
This capital gain or loss will be long-term if the participant
has held the stock for more than one year and otherwise will be
short-term.
Restricted Stock; Restricted Stock Units. A participant
will not have income upon the grant of restricted stock unless
an election under Section 83(b) of the Internal Revenue
Code (the IRC) is made within 30 days of the
date of grant. If a timely 83(b) election is made, then a
participant will have compensation income equal to the value of
the stock less the purchase price. When the stock is sold, the
participant will have capital gain or loss equal to the
difference between the sales proceeds and the value of the stock
on the date of grant. If the participant does not make an 83(b)
election, then when the stock vests the participant will have
compensation income equal to the value of the stock on the
vesting date less the purchase price. When the stock is sold,
the participant will have capital gain or loss equal to the
sales proceeds less the value of the stock on the vesting date.
Any capital gain or loss will be long-term if the participant
held the stock for more than one year and otherwise will be
short-term. The tax treatment of a restricted stock unit and the
stock issued upon the vesting of a restricted stock unit is the
same as described above for restricted stock, except that no
Section 83(b) election may be made with respect to
restricted stock units.
Stock Appreciation Rights. A participant will not have
income upon the grant of a stock appreciation right. A
participant will have compensation income upon the exercise of a
stock appreciation right equal to the appreciation in the value
of the stock underlying the stock appreciation right. When the
stock distributed in settlement of the stock appreciation right
is sold, the participant will have capital gain or loss equal to
the sales proceeds less the value of the stock on the exercise
date. Any capital gain or loss will be long-term if the
participant held the stock for more than one year and otherwise
will be short-term.
Tax Consequences to the Company. There will be no tax
consequences to the Company except that we will be entitled to a
deduction when a participant has compensation income. Any such
deduction will be subject to the limitations of
Section 162(m) of the IRC.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR APPROVAL
OF THE AMENDMENT TO THE 2005 LONG-TERM INCENTIVE PLAN
PROPOSAL 4
APPROVAL OF AN AMENDMENT TO THE 2002 EMPLOYEE STOCK PURCHASE
PLAN
The Board of Directors believes it is in the best interest of
the Company to encourage stock ownership by employees of the
Company. The 2002 Employee Stock Purchase Plan
(ESPP) affords employees of the Company the
opportunity to purchase shares of the Companys common
stock at a discount through regular payroll deductions. The
Company believes the ESPP enhances its ability to seek and
retain the services of highly skilled and competent persons to
serve as employees of the Company, and at the same time,
encourages employee stock ownership. Under the Companys
ESPP, the Company has currently reserved 1,880,000 shares
of common stock to provide eligible employees, including
officers and directors who are employees, with opportunities to
purchase shares. As of December 30, 2005, there were only
62,433 shares available for future purchase under the ESPP.
Accordingly, on January 31, 2006, the Board of Directors
adopted, subject to stockholder approval, an amendment to the
ESPP increasing the number of shares of common stock authorized
for purchase under the ESPP by 2 million shares to a total
of 3,880,000. With the approval of the amendment to the Skyworks
ESPP by the stockholders, it is the intention of the Company to
have the ESPP continue to qualify as an employee stock
purchase plan under Section 423 of the IRC, which may
provide certain tax benefits to employees as described below. In
addition, if the amendment to the ESPP is approved, the Company
intends to continue providing
non-U.S. employees
with the opportunity to purchase shares of the Companys
common stock at a discount pursuant to Skyworks
Non-Qualified Employee Stock Purchase Plan (NQ
ESPP). If this amendment is not approved by the
stockholders, the Company will not be able to offer employees an
opportunity to participate in the ESPP (or the NQ ESPP) in the
future because of the limited number of shares that would
otherwise remain available for issuance under the ESPP.
Description of the ESPP
This summary is qualified in its entirety by reference to the
ESPP, a copy of which is attached to the electronic copy of this
Proxy Statement filed with the SEC and may be accessed from the
SECs home page (www.sec.gov). In addition, a copy of the
ESPP may be obtained from the Secretary of the Company.
All employees of the Company and its participating subsidiaries
who are employed by the Company at least ten (10) business
days prior to the first day of the applicable offering period
are eligible to participate in the ESPP, except for any employee
who owns stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of Company stock.
An employees rights under the ESPP will terminate when he
or she ceases to be an employee.
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Participation in the ESPP |
The number of shares that participants may purchase under the
ESPP is discretionary and the value of the Companys common
stock purchased by participants under the ESPP will vary based
on the fair market value of the Companys common stock on
an offering periods commencement date or termination date.
Accordingly, the number of shares that will be purchased by the
Named Executives (as identified in the Compensation of
Executive Officers section of this Proxy Statement),
executive officers as a group, and non-executive officers as a
group in the future are not currently determinable. The
Companys non-employee directors are not eligible to
participate in the ESPP.
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Stock Subject to the ESPP |
Without giving effect to the proposed amendment, an aggregate of
1,880,000 shares of common stock are currently authorized
for issuance under the ESPP. If there are any unexercised
options granted under the ESPP that expire or terminate or
options that cease to be exercisable, the unpurchased shares
subject to such option will again be available under the ESPP.
If the number of shares of common stock available for any
offering period is insufficient to satisfy the requirements for
that offering period, the available shares for that offering
period shall be apportioned among participating employees in
proportion to their options.
The Compensation Committee of the Board of Directors is
expressly permitted to establish the offering periods, provided
however that in no event shall any offering period extend for
more than twenty-four (24) months. Subject to the
foregoing, the offering periods will generally consist of six
month periods commencing on each August 1 and February 1
and terminating on each January 31 and July 31,
respectively.
On the commencement date of each offering period, the Company
will grant to each participant an option to purchase on the
termination date of each offering period at the Option Exercise
Price (as defined below), that number of full shares of common
stock equal to the amount of each participants accumulated
payroll deductions made during the offering period, up to a
maximum of 1,000 shares. This maximum may be increased or
decreased as set forth in the ESPP. If the participants
accumulated payroll deductions on the termination date would
result in a purchase of more than the maximum allowed under the
plan, the excess deductions will be refunded to the participant,
without interest.
The Option Exercise Price for each offering period is the lesser
of: (i) eighty-five percent (85%) of the fair market value
(as defined in the ESPP) of the common stock on the offering
commencement date, or (ii) eighty-five percent (85%) of the
fair market value of the common stock on the offering
termination date, in either case rounded up to the next whole
cent. If the participants accumulated payroll deductions
on the last day of the offering period would otherwise enable
the participant to purchase common stock in excess of the
limitation prescribed under Section 423(b)(8) of the IRC,
the excess will be refunded by the Company, without interest.
Each participant in the ESPP on the termination date of each
offering period will be deemed to have exercised his or her
option on such date and to have purchased from the Company such
number of full shares of common stock reserved for the ESPP as
his or her accumulated payroll deductions on such date will pay
for at the Option Exercise Price, subject to the maximums and
limitations set forth in the ESPP.
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Entering the ESPP and Participation |
An eligible employee may enter the ESPP by enrolling and
authorizing payroll deductions not later than ten
(10) business days before the next commencement date.
Unless the participant files a revised authorization, or
withdraws from the ESPP, his or her participation under the
enrollment on file will continue as long as the ESPP remains in
effect.
A participant may withdraw in full from the ESPP prior to the
termination date, in which event the Company will refund without
interest the entire balance of such employees deductions
not previously used to purchase common stock under the ESPP.
Upon termination of the participants employment because of
death, the person(s) entitled to receipt of the common stock
and/or cash shall have the right to elect, either (i) to
withdraw, without interest, all of the payroll deductions
credited to the employees account under the ESPP, or
(ii) to exercise the employees option for the
purchase of shares of common stock on the next offering
termination date following the date of the employees death.
The Company will accumulate and hold for the employees
account the amounts deducted from his or her pay. No interest
will be paid thereon.
An employee may authorize payroll deductions from 1% to 10% (in
whole number percentages only) of his or her eligible
compensation (as defined in the ESPP). An employee may not make
any additional payments into such account. Only full shares of
common stock may be purchased. Any balance remaining in an
employees account after a purchase will, to the extent not
refunded as set forth above, be reported to the employee and
will generally be carried forward to the next offering period.
Payroll deductions may not be increased, decreased or suspended
by a participant during an offering period.
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ESPP Termination and Amendment |
The ESPP may be terminated at any time by the Companys
Board of Directors. It will terminate in any case on the earlier
of December 31, 2012, or when all of the shares of common
stock reserved for the ESPP have been purchased. The
Compensation Committee or the Board of Directors may from time
to time adopt amendments to the ESPP, subject to certain
restrictions set forth in the ESPP.
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Sale of Stock Purchased Under the ESPP |
An employee may sell stock purchased under the ESPP at any time
the employee chooses, subject to compliance with Company trading
policies, any applicable federal or state securities laws, and
subject to certain restrictions imposed under the ESPP.
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ESPP Administration and Cost |
The Company will bear all costs of administering and carrying
out the ESPP, and the ESPP may be administered by the
Compensation Committee, or such other committee as may be
appointed by the Board of Directors of the Company. No member of
the Compensation Committee is eligible to participate in the
ESPP while serving as a member of the Compensation Committee.
The President, the Chief Financial Officer of the Company, and
any other ESPP administrators may determine the methods through
which eligible employees may elect to participate, amend their
participation, or withdraw from participation in the ESPP, and
establish methods of enrollment. The ESPP administrators are
further authorized to determine the means of issuance of common
stock and the procedures established to permit tracking of
disqualifying dispositions of shares or to restrict transfer of
such shares.
The Company will indemnify each member of the Board of Directors
and the Compensation Committee to the fullest extent permitted
by law with respect to any claim, loss, damage or expense
(including counsel fees) arising in connection with their
responsibilities under the ESPP.
As soon as administratively practicable after the end of each
offering period, the ESPP administrators shall prepare and
distribute or make otherwise readily available to each
participating employee in the ESPP information concerning the
amount of the participating employees accumulated payroll
deductions as of the offering termination date, the Option
Exercise Price for such offering period, the number of shares of
common stock purchased by the participating employee with the
participating employees accumulated payroll deductions,
and the amount of any unused payroll deductions either to be
carried forward to the next offering period, or returned to the
participating employee without interest.
The proceeds received by the Company from the sale of common
stock pursuant to options granted under the ESPP may be used for
any corporate purposes, and the Company shall not be obligated
to segregate participating employees payroll deductions.
If the Company should subdivide or reclassify the common stock,
or should declare thereon any dividend payable in shares of such
common stock, or should take any other action of a similar
nature affecting such common stock, then the number and class of
shares of common stock which may thereafter be optioned (in the
aggregate and to any individual participating employee) shall be
adjusted accordingly.
If the Company should merge into or consolidate with another
corporation, the Board of Directors may, at its election, either
(i) terminate the ESPP and refund without interest the
entire balance of each participants deductions, or
(ii) entitle each participant to receive on the offering
termination date upon the exercise of such option for each share
of common stock as to which such option shall be exercised the
securities or property to which a holder of one share of the
common stock was entitled upon and at the time of such merger or
consolidation. A sale of all or substantially all of the assets
of the Company shall be deemed a merger or consolidation for the
foregoing purposes.
|
|
|
Federal Income Tax Consequences |
The following summarizes certain United States federal income
tax considerations for employees participating in the ESPP and
certain tax effects to the Company. This summary, however, does
not address every situation that may result in taxation. For
example, it does not discuss foreign, state, or local taxes, or
any of the tax implications arising from a participants
death. This summary is not intended as a substitute for careful
tax planning, and each employee is urged to consult with and
rely on his or her own advisors with respect to the possible tax
consequences (federal, state, local and foreign) of exercising
his or her rights under the ESPP. The ESPP is not subject to the
provisions of the Employee Retirement Income Security Act of
1974, and the provisions of Section 401(a) of the Internal
Revenue Code are not applicable to the ESPP.
The amounts deducted from an employees pay under the ESPP
will be included in the employees compensation subject to
United States federal income tax, and the Company will withhold
taxes on these amounts. Generally, the employee will not
recognize any additional income at the time options are granted
pursuant to the ESPP or at the time the employee purchases
shares under the ESPP.
If the employee disposes of shares purchased pursuant to the
ESPP within two years after the first business day of the
offering period in which the employee acquired such shares, the
employee will recognize ordinary compensation income (i.e., not
capital gain income) at the time of such disposition in an
amount equal to the excess, if any, of the fair market value of
the shares on the day the shares were purchased over the amount
the employee paid for the shares. In addition, the employee
generally will recognize capital gain or loss in an amount equal
to the difference between the amount realized upon the sale of
the shares and the employees tax basis in the shares
(generally, the fair market value of the shares on the day of
purchase). Capital gain or loss recognized on a disposition of
shares will be long-term capital gain or loss if the
employees holding period for the shares exceeds one year.
The holding period for determining whether the gain or loss
realized is short or long term will not begin until the employee
is deemed to have purchased shares under the ESPP.
If the employee disposes of shares purchased pursuant to the
ESPP more than two years after the first business day of the
offering period in which the employee acquired the shares, the
employee will recognize ordinary compensation income at the time
of such disposition in an amount equal to the lesser of:
|
|
|
(a) the excess, if any, of the fair market value of the
shares at the time of disposition over the amount the employee
paid for the shares; or |
|
|
(b) 15% of the fair market value of the shares measured as
of the first business day of the offering period in which the
shares were purchased. |
In addition, the employee generally will recognize capital gain
or loss in an amount equal to the difference between the amount
realized upon the sale of shares and the fair market value of
the shares on the day of purchase. Capital gain or loss
recognized on a disposition of shares will be long-term capital
gain or loss if the employees holding period for the
shares exceeds one year and otherwise will be short-term capital
gain or loss.
If the employee disposes of shares purchased pursuant to the
ESPP within two years after the first business day of the
offering period in which such shares were purchased, the Company
generally will be entitled to a deduction for United States
federal income tax purposes in an amount equal to the ordinary
compensation income recognized by the employee as a result of
such disposition. If the employee disposes of shares purchased
pursuant to the ESPP more than two years after the first
business day of the offering period in which the employee
acquired the shares, the Company will not be entitled to any
deduction for United States federal income tax purposes with
respect to the options or the shares issued upon their exercise.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR APPROVAL
OF THE AMENDMENT TO THE 2002 EMPLOYEE STOCK PURCHASE PLAN
PROPOSAL 5
RATIFICATION OF THE SELECTION OF KPMG LLP AS
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE
COMPANY
The Audit Committee has selected KPMG LLP as the Companys
independent registered public accounting firm for the current
fiscal year ending September 29, 2006 (fiscal year
2006), and has further directed that management submit the
selection of the independent registered public accounting firm
for ratification by the stockholders at the Annual Meeting. KPMG
LLP was the independent registered public accounting firm for
the Company for the fiscal year ended September 30, 2005,
and has been the independent registered public accounting firm
for the Companys predecessor, Alpha Industries, Inc.,
since 1975. We are asking the stockholders to ratify the
appointment of KPMG LLP as the Companys independent
registered public accounting firm for the fiscal year 2006.
Representatives of KPMG LLP are expected to attend the Annual
Meeting. They will have an opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate stockholder questions.
Stockholder ratification of the selection of KPMG LLP as the
Companys independent registered public accounting firm is
not required by the Companys by-laws or other applicable
legal requirements. However, the Audit Committee is submitting
the selection of KPMG LLP to the stockholders for ratification
as a matter of good corporate practice. In the event
stockholders fail to ratify the appointment, the Audit Committee
may reconsider this appointment. Even if the appointment is
ratified, the Audit Committee, in its discretion, may direct the
appointment of a different independent registered public
accounting firm at any time during the year if the Audit
Committee determines that such a change would be in the
Companys and stockholders best interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE
FOR
THE RATIFICATION OF THE SELECTION OF KPMG LLP
AS THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM OF THE COMPANY
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of Skyworks Board of Directors is
responsible for providing independent, objective oversight of
Skyworks accounting functions and internal controls. The
Audit Committee is composed of three directors, each of whom is
independent within the meaning of applicable NASDAQ Rules. The
Audit Committee operates under a written charter approved by the
Board of Directors.
Management is responsible for the Companys internal
control and financial reporting process. The Companys
independent registered public accounting firm is responsible for
performing an independent audit of Skyworks consolidated
financial statements in accordance with generally accepted
auditing standards and for issuing a report concerning such
financial statements. The Audit Committees responsibility
is to monitor and oversee these processes.
In connection with these responsibilities, the Audit Committee
met with management and representatives of KPMG LLP, the
Companys independent registered public accounting firm,
and reviewed and discussed the audited financial statements for
the year ended September 30, 2005 results of the internal
and external audit examinations, evaluations of the
Companys internal controls and the overall quality of
Skyworks financial reporting. The Audit Committee also
discussed with the independent registered public accounting firm
the matters required by Statement of Auditing Standards
No. 61 (Communications with Audit Committees). The Audit
Committee also received written disclosures and a letter from
the independent registered public accounting firm required by
Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee
discussed with the independent registered public accounting firm
such firms independence vis-à-vis the Company.
Based upon the Audit Committees review and discussions
described above, the Audit Committee recommended that the Board
of Directors include the audited consolidated financial
statements in the Companys Annual Report on
Form 10-K for the
year ended September 30, 2005, as filed with the SEC.
|
|
|
The Audit Committee
|
|
|
Kevin L. Beebe |
|
David P. McGlade |
|
David J. McLachlan, Chairman |
AUDIT FEES
KPMG LLP provided audit services to the Company consisting of
the annual audit of the Companys 2005 consolidated
financial statements contained in the Companys Annual
Report on
Form 10-K and
reviews of the financial statements contained in the
Companys Quarterly Reports on
Form 10-Q for
fiscal year 2005. The following table summarizes the fees of
KPMG LLP billed to us for the last two fiscal years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year | |
|
|
|
Fiscal Year | |
|
|
Fee Category |
|
2005 | |
|
% of Total | |
|
2004 | |
|
% of Total | |
|
|
| |
|
| |
|
| |
|
| |
Audit Fees-Financial Statement Audit
|
|
$ |
615,900 |
|
|
|
47 |
% |
|
$ |
579,000 |
|
|
|
87 |
% |
Audit Fees-Section 404 of Sarbanes-Oxley
|
|
|
684,500 |
|
|
|
52 |
% |
|
|
|
|
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Audit Fees(1)
|
|
$ |
1,300,400 |
|
|
|
99 |
% |
|
$ |
579,000 |
|
|
|
87 |
% |
Audit-Related Fees(2)
|
|
|
15,250 |
|
|
|
1 |
% |
|
|
21,220 |
|
|
|
3 |
% |
Tax Fees(3)
|
|
|
|
|
|
|
0 |
% |
|
|
65,000 |
|
|
|
10 |
% |
All Other Fees(4)
|
|
|
3,000 |
|
|
|
0 |
% |
|
|
1,350 |
|
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$ |
1,318,650 |
|
|
|
100 |
% |
|
$ |
666,570 |
|
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
In 2003, the Audit Committee adopted a formal policy concerning
approval of audit and non-audit services to be provided to the
Company by its independent registered public accounting firm,
KPMG LLP. The policy requires that all services to be provided
by KPMG LLP, including audit services and permitted
audit-related and non-audit services, must be pre-approved by
the Audit Committee. The Audit Committee pre-approved all audit
and non-audit services provided by KPMG LLP during fiscal 2005
and fiscal 2004.
|
|
(1) |
Audit fees consist of fees for the audit of our financial
statements, the review of the interim financial statements
included in our quarterly reports on
Form 10-Q, and
other professional services provided in connection with
statutory and regulatory filings or engagements. In 2005 audit
fees also included fees for services incurred in connection with
rendering an opinion under Section 404 of the Sarbanes
Oxley Act. |
|
(2) |
Audit related fees consist of fees for assurance and related
services that are reasonably related to the performance of the
audit and the review of our financial statements and which are
not reported under Audit Fees. These services relate
to an employee benefit plan audit, registration statement
filings for financing activities and consultations concerning
financial accounting and reporting standards. |
|
(3) |
Tax fees consist of fees for tax compliance, tax advice and tax
planning services. Tax compliance services, which relate to
preparation or review of original and amended tax returns,
claims for refunds and tax payment-planning services, accounted
for $0 and $65,000 of the total tax fees for fiscal year 2005
and 2004, respectively. Tax advice and tax planning services
relate to assistance with tax audits. |
|
(4) |
All other fees for fiscal year 2005 and 2004 consist of licenses
for accounting research software. |
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, which is comprised solely of
independent directors within the meaning of applicable NASDAQ
Rules, outside directors within the meaning of Section 162
of the IRC and non-employee directors within the meaning of
Rule 16b-3 under
the Exchange Act, is responsible for determining all components
of the compensation to be paid to the Chief Executive Officer of
Skyworks, each of the Companys executive officers, and any
other officers or employees who report directly to the Chief
Executive Officer (collectively, the Senior
Executives). The committee approves and periodically
evaluates the Companys compensation policies applicable to
the Senior Executives, including the Chief Executive Officer,
and reviews the performance of such Senior Executives. The
committee believes that executive compensation should be
directly linked to corporate performance and increases in
stockholder value. Its objectives are to provide:
(1) levels of compensation that enable Skyworks to attract
and retain key talent needed to obtain its business objectives;
(2) variable compensation opportunities linked directly to
Company performance; and (3) stock-based compensation
opportunities that link executive compensation to stockholder
value. The elements of compensation for the Senior Executives
are base salary, short-term cash incentives, and long-term
stock-based awards.
Compensation for Skyworks Senior Executives, including
salary, short-term cash incentives and long-term stock-based
incentives, is established at levels intended to be competitive
with the compensation of comparable executives in similar
companies. In determining competitive compensation standards,
the Compensation Committee utilized studies from third-party
compensation consultants at Aon/ Radford Consulting on executive
compensation in comparable high technology and semiconductor
companies. At the request of the committee, Aon/ Radford
Consulting, assisted by management, selected, as a comparator, a
peer group of 17 publicly-traded,
U.S.-based corporations
with which the Company may compete in recruiting executive
talent. The comparator group selected has been approved by the
committee. Following a review of these studies, the Compensation
Committee established base salaries, short-term cash incentive
targets and long-term stock-based awards. Base salaries and
long-term stock-based awards were generally targeted at the
market median, and in certain instances were targeted closer to
the 75th percentile of the Companys peers based on
roles, responsibilities and performance. Total cash compensation
(i.e., base salary plus short-term cash incentive) was also
targeted at the market median with the opportunity for
executives to earn above the market median based on performance.
In establishing individual compensation, the Compensation
Committee considers the individual experience and performance of
the executive, as well as the performance of Skyworks. The Chief
Executive Officer is not present during voting or deliberations
of the Compensation Committee concerning his compensation.
However, the Compensation Committee does consider the
recommendations of the Chief Executive Officer regarding the
compensation of the other Senior Executives. These
recommendations include an assessment of the individuals
responsibilities, experience, individual performance and
contribution to the Companys performance, and also
generally take into account internal factors such as historical
compensation and level in the organization, in addition to
external factors such as the competitive environment for
attracting and retaining executives. In light of the
considerations discussed above in determining base salaries, and
the recommendations of the Compensation Committees
compensation consultant, the committee increased the base
salaries of the Senior Executives an average of 4% effective for
fiscal year 2006. Given the Companys performance, the
Companys Chief Executive Officer did not receive a salary
increase for fiscal year 2006.
Short-term cash incentive compensation for each Senior Executive
is established annually by the Compensation Committee by tying a
significant portion of each Senior Executives total cash
compensation to the Companys accomplishment of specific
financial objectives. The Compensation Committee established
aggressive forward-looking financial targets for Skyworks
Senior Executives for fiscal year 2005. During fiscal year 2005,
the Companys financial performance did not meet these
targets. Accordingly, no annual cash incentive payments were
made to the Chief Executive Officer or any of the other Senior
Executives for fiscal year 2005.
The Compensation Committee currently provides Senior Executives
with long-term stock-based compensation under Skyworks
2005 Long-Term Incentive Plan. In the past, the Compensation
Committee typically awarded nonqualified stock options under its
stock-based compensation plans. Given the mandate of the
expensing of stock-based compensation awards, the Company has
started to grant alternative equity vehicles, such as restricted
stock. The committee determines who should receive grants, when
grants should be
made, the type of grants to be made, the applicable vesting
schedules and the number of shares subject to each award. These
grants are intended to tie the value of Senior Executives
compensation to the long-term value of Skyworks common
stock. The stock-based awards granted by the committee typically
utilize vesting periods in order to encourage key employees to
remain employed by Skyworks. In general, the Compensation
Committee bases its decisions regarding the grant of stock-based
awards on recommendations of management and the committees
third-party compensation consultant, with the intention of
keeping the executives overall compensation, including the
stock-based component of that compensation, at a competitive
level with the Skyworks comparator group. The Compensation
Committee also considers the number of shares of common stock
outstanding, the number of shares of common stock authorized for
issuance under its stock-based compensation plans, the number of
options and shares held by the Senior Executive for whom an
award is being considered and the other elements of the Senior
Executives compensation, as well as the Companys
compensation objectives and policies described above. As with
the determination of base salaries and short-term cash
incentives, the Committee exercises subjective judgment and
discretion in view of the above criteria. During fiscal year
2005, the Compensation Committee granted a combination of
restricted stock and stock options to each of the Senior
Executives under stock-based compensation plans, targeted at the
market median of the Companys peers, with adjustments to
reflect roles within the Company and individual performance.
Skyworks also permits Senior Executives and other employees to
purchase Skyworks common stock at a discount through the
Companys Employee Stock Purchase Plan. Skyworks
employees, including the Senior Executives, may also participate
in the Companys 401(k) Plan, under which Skyworks
employer contribution has in recent years been made in the form
of Skyworks common stock. The committee believes that these
programs, along with stock-based awards, provide the Senior
Executives with the opportunity to acquire long-term stock
ownership positions, and help to align the executives
interests with stockholders interests. The committee
believes that this directly motivates Senior Executives to
maximize long-term stockholder value.
A final component of executive compensation provided executives
and other highly compensated employees with a means to defer
recognition of income. Certain Senior Executives designated by
the Compensation Committee participated in this Executive
Compensation Plan during fiscal year 2005, which is discussed in
the Executive Compensation section of this
Proxy Statement. As a result of deferred compensation
legislation under Section 409A of the IRC, effective
December 31, 2005, the Company no longer permits employees
to make contributions to this plan.
With regard to Mr. Aldrich, the Companys President
and Chief Executive Officer, the Compensation Committee made an
overall assessment of Mr. Aldrichs leadership in
establishing and executing long-term and short-term strategic,
operational and business goals for the Company. Additionally, as
part of the review process, the Compensation Committee assessed
Skyworks financial and business results compared to the
Companys semiconductor peers; Skyworks financial
performance relative to its financial performance in prior
periods; Skyworks market competitiveness as measured by
new business creation and product generation; and the health of
the Skyworks organization as measured by the ability to attract
and retain key employees. As a result of this review, the
Compensation Committee awarded a mix of base salary and
short-term cash incentive, along with a long-term, stock-based
award, designed to align Mr. Aldrichs compensation
with the performance of Skyworks. The resulting total cash
compensation was targeted at the market median of chief
executive officers of the comparator group utilized by the
Committees third-party compensation consultants. As a
result of the Companys performance, Mr. Aldrich did
not receive a salary increase for fiscal year 2006. During
fiscal year 2005, Mr. Aldrich received a base salary of
$552,000, which was equivalent to the 67th percentile of
this peer group. As discussed above, the Compensation Committee
also established aggressive forward-looking financial targets
for Mr. Aldrich for fiscal year 2005. During fiscal year
2005, the Companys financial performance did not meet
these targets, resulting in no annual cash incentive payment
being made to Mr. Aldrich for fiscal year 2005.
Mr. Aldrich also received a combination of restricted stock
and stock options in fiscal year 2005 with a Black-Scholes value
targeted at the 34th percentile of the Companys peers.
Section 162(m) of the IRC limits the tax deductibility by a
publicly held corporation of compensation in excess of
$1 million paid to certain of its executive officers.
However, this deduction limitation does not apply to certain
qualified performance-based compensation within the
meaning of the IRC and the regulations promulgated thereunder.
The Compensation Committee has considered the limitations on
deductions imposed
by Section 162(m), and it is the Compensation
Committees intention to structure executive compensation
to minimize the application of the deduction limitations of
Section 162(m) insofar as consistent with the Compensation
Committees overall compensation objectives.
Based on the recommendations of the Compensation Committee,
Skyworks entered into severance agreements with certain Senior
Executives in fiscal year 2005. Such agreements do not guarantee
salary, position or benefits, but provide salary continuation
and other benefits in the event of a termination after a change
in control or certain other terminations. Certain of these
agreements are described in the Severance
Agreements section of this Proxy Statement.
|
|
|
The Compensation Committee
|
|
|
Kevin L. Beebe |
|
Timothy R. Furey, Chairman |
|
David P. McGlade |
COMPENSATION OF EXECUTIVE OFFICERS
The following table presents information about total
compensation during the last three completed fiscal years for
the Chief Executive Officer and the four next most highly
compensated persons serving as executive officers during the
year (the Named Executives).
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term | |
|
|
|
|
|
|
Compensation Awards | |
|
|
|
|
Annual Compensation | |
|
| |
|
|
|
|
| |
|
Restricted | |
|
Securities | |
|
|
Name and Principal |
|
Fiscal | |
|
|
|
Stock | |
|
Underlying | |
|
All Other | |
Position |
|
Year | |
|
Salary | |
|
Bonus | |
|
Awards($)(1) | |
|
Options(#) | |
|
Compensation(2) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
David J. Aldrich
|
|
|
2005 |
|
|
$ |
549,800 |
|
|
$ |
|
|
|
$ |
391,940 |
|
|
|
274,254 |
|
|
$ |
10,804 |
|
President and
|
|
|
2004 |
|
|
$ |
527,539 |
|
|
$ |
1,060,000 |
|
|
|
|
|
|
|
500,000 |
|
|
$ |
12,608 |
|
Chief Executive Officer
|
|
|
2003 |
|
|
$ |
480,000 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
9,548 |
|
Kevin D. Barber
|
|
|
2005 |
|
|
$ |
342,700 |
|
|
$ |
|
|
|
$ |
92,222 |
|
|
|
64,530 |
|
|
$ |
9,464 |
|
Senior Vice President
|
|
|
2004 |
|
|
$ |
329,646 |
|
|
$ |
397,000 |
|
|
|
|
|
|
|
210,000 |
(3) |
|
$ |
13,397 |
|
and General Manager,
|
|
|
2003 |
|
|
$ |
307,615 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
6,890 |
|
Mobile Platforms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liam K. Griffin
|
|
|
2005 |
|
|
$ |
298,000 |
|
|
$ |
|
|
|
$ |
92,222 |
|
|
|
64,530 |
|
|
$ |
9,445 |
|
Senior Vice President,
|
|
|
2004 |
|
|
$ |
278,769 |
|
|
$ |
336,000 |
|
|
|
|
|
|
|
110,000 |
|
|
$ |
8,298 |
|
Sales and Marketing
|
|
|
2003 |
|
|
$ |
259,423 |
|
|
$ |
115,000 |
(4) |
|
|
|
|
|
|
|
|
|
$ |
7,315 |
|
Allan M. Kline(5)
|
|
|
2005 |
|
|
$ |
336,700 |
|
|
$ |
|
|
|
$ |
92,222 |
|
|
|
64,530 |
|
|
$ |
11,716 |
|
Vice President, Chief
|
|
|
2004 |
|
|
$ |
237,500 |
|
|
$ |
390,000 |
|
|
|
|
|
|
|
280,000 |
(6) |
|
$ |
6,413 |
|
Financial Officer
|
|
|
2003 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
Gregory L. Waters
|
|
|
2005 |
|
|
$ |
318,900 |
|
|
$ |
|
|
|
$ |
92,222 |
|
|
|
64,530 |
|
|
$ |
46,590 |
(7) |
Executive Vice President
|
|
|
2004 |
|
|
$ |
295,385 |
|
|
$ |
360,000 |
|
|
|
|
|
|
|
100,000 |
|
|
$ |
22,039 |
(7) |
|
|
|
2003 |
|
|
$ |
117,288 |
|
|
$ |
60,000 |
(7) |
|
|
|
|
|
|
225,000 |
(6) |
|
$ |
4,165 |
|
|
|
(1) |
Amounts shown represent the dollar value of the restricted stock
awards based on the value of the Companys common stock on
the date of grant. All grants of restricted stock vest
25% per year on each of the first four anniversaries of the
grant date and were made under the Companys 2005 Long-Term
Incentive Plan. On May 10, 2005, Mr. Aldrich received
a grant of 75,373 shares of restricted stock and
Messrs. Barber, Griffin, Kline, and Waters each received a
grant of 17,735 shares of restricted stock. The dollar
value shown above with respect to each of the Named Executives
is based upon the closing price of the Companys common
stock ($5.20) on May 10, 2005. As of September 30,
2005, the aggregate number of shares of restricted stock held by
each of the Named Executives, and the dollar value of such
shares, was as follows: Mr. Aldrich, 75,373 shares
($529,118); Mr. Barber, 17,735 shares ($124,500);
Mr. Griffin, 17,735 shares ($124,500); Mr. Kline,
17,735 shares ($124,500); and Mr. Waters,
17,735 shares ($124,500). The dollar values are based upon
the closing price of the Companys common stock ($7.02) on
September 30, 2005. |
|
(2) |
All Other Compensation includes the Companys
contributions to each Named Executives 401(k) plan
account, the cost of group term life insurance premiums, and de
minimis service awards. |
|
(3) |
Mr. Barber received an annual stock option grant to
purchase 110,000 shares in January 2004, and a
one-time stock option grant to purchase 100,000 shares
in connection with his promotion to Senior Vice President and
General Manager, RF Solutions in November 2003. |
|
(4) |
As an incentive for joining the Company in August 2001,
Mr. Griffin was guaranteed a one-time bonus of $115,000,
which was paid during fiscal 2003. |
|
(5) |
Mr. Kline joined the Company as an executive officer on
January 5, 2004. |
|
(6) |
As an incentive for joining the Company, Messrs. Kline and
Waters received one-time new hire stock option grants to
purchase 280,000 shares and 225,000 shares,
respectively. |
|
(7) |
Mr. Waters joined the Company on April 17, 2003, and
was appointed an executive officer on February 6, 2004. As
an incentive for joining the Company, Mr. Waters received a
sign on bonus of $60,000. Mr. Waters also received $37,413
and $9,591 in relocation reimbursements in fiscal years 2005 and
2004, respectively, which is included in All Other
Compensation. |
The following tables provide information about stock options
granted to and exercised by each of the Named Executives in
fiscal year 2005, if any, and the value of options held by each
at September 30, 2005.
OPTION GRANTS IN LAST FISCAL YEAR
|
|
Individual Grants | |
|
|
|
|
| |
|
Potential Realizable Value | |
|
|
Number of | |
|
Percent of | |
|
|
|
at Assumed Annual Rates of | |
|
|
Securities | |
|
Total Options | |
|
|
|
Stock Price Appreciation for | |
|
|
Underlying | |
|
Granted to | |
|
Exercise or | |
|
|
|
Option Term | |
|
|
Options | |
|
Employees in | |
|
Base Price | |
|
Expiration | |
|
| |
Name |
|
Granted(#) | |
|
Fiscal Year(%) | |
|
($/Share) | |
|
Date | |
|
5% | |
|
10% | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
David J. Aldrich
|
|
|
274,254 |
|
|
|
5.9 |
|
|
$ |
8.93 |
|
|
|
11/10/2014 |
|
|
$ |
1,540,218 |
|
|
$ |
3,903,216 |
|
Kevin D. Barber
|
|
|
64,530 |
|
|
|
1.4 |
|
|
$ |
8.93 |
|
|
|
11/10/2014 |
|
|
$ |
362,402 |
|
|
$ |
918,399 |
|
Liam K. Griffin
|
|
|
64,530 |
|
|
|
1.4 |
|
|
$ |
8.93 |
|
|
|
11/10/2014 |
|
|
$ |
362,402 |
|
|
$ |
918,399 |
|
Allan M. Kline
|
|
|
64,530 |
|
|
|
1.4 |
|
|
$ |
8.93 |
|
|
|
11/10/2014 |
|
|
$ |
362,402 |
|
|
$ |
918,399 |
|
Gregory L. Waters
|
|
|
64,530 |
|
|
|
1.4 |
|
|
$ |
8.93 |
|
|
|
11/10/2014 |
|
|
$ |
362,402 |
|
|
$ |
918,399 |
|
The options vest at a rate of 25% per year commencing one
year after the date of grant, provided the holder of the option
remains employed by the Company. Options may not be exercised
beyond three months after the holder ceases to be employed by
the Company, except in the event of termination by reason of
death or permanent disability, in which event the option may be
exercised for specific periods not exceeding one year following
termination. The assumed annual rates of stock price
appreciation stated in the table are dictated by regulations of
the SEC, and are compounded annually for the full term of the
options. These assumptions do not reflect our estimates of
future stock price growth and actual outcomes may differ.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
|
|
|
|
|
|
Number of | |
|
|
|
|
|
|
|
|
Securities Underlying | |
|
Value of Unexercised | |
|
|
|
|
|
|
Unexercised Options | |
|
In-The-Money Options | |
|
|
Shares | |
|
|
|
at September 30, 2005(#) | |
|
at September 30, 2005($) | |
|
|
Acquired On | |
|
Value | |
|
| |
|
| |
Name |
|
Exercise(#) | |
|
Realized($) | |
|
Exercisable | |
|
Unexercisable | |
|
Exercisable | |
|
Unexercisable | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
David J. Aldrich
|
|
|
50,000 |
|
|
$ |
385,410 |
|
|
|
1,364,000 |
|
|
|
349,254 |
|
|
$ |
569,170 |
|
|
$ |
152,250 |
|
Kevin D. Barber
|
|
|
|
|
|
$ |
|
|
|
|
287,564 |
|
|
|
158,280 |
|
|
$ |
114,188 |
|
|
$ |
38,063 |
|
Liam K. Griffin
|
|
|
|
|
|
$ |
|
|
|
|
297,500 |
|
|
|
77,030 |
|
|
$ |
76,125 |
|
|
$ |
25,375 |
|
Allan M. Kline
|
|
|
|
|
|
$ |
|
|
|
|
70,000 |
|
|
|
274,530 |
|
|
$ |
|
|
|
$ |
|
|
Gregory L. Waters
|
|
|
|
|
|
$ |
|
|
|
|
212,500 |
|
|
|
177,030 |
|
|
$ |
191,250 |
|
|
$ |
191,250 |
|
The values of unexercised options in the foregoing table are
based on the difference between the $7.02 closing price of
Skyworks common stock on September 30, 2005, the end
of the 2005 fiscal year, on the NASDAQ Stock Market, and the
respective option exercise price.
LONG-TERM INCENTIVE AWARDS
There were no long-term incentive awards granted to any Named
Executives for fiscal year 2005.
EXECUTIVE COMPENSATION
Our executives are eligible for awards of nonqualified stock
options, restricted stock, and other stock-based awards under
our applicable stock-based compensation plans. These stock-based
compensation plans are administered by the Compensation
Committee of the Board of Directors. Generally, the exercise
price at which an executive may purchase Skyworks common
stock pursuant to a stock option is the fair market value of
Skyworks common stock on the date of grant. Stock options
are granted subject to restrictions on vesting, with equal
portions of the total grant typically vesting over a period of
four years. Our stock options are subject to termination (after
certain grace periods) upon termination of employment,
disability or death. Restricted stock awards involve the
issuance of shares of common stock that may not be transferred
or otherwise encumbered, subject to certain exceptions, for
varying amounts of time, and which will be forfeited, in whole
or in part, if the executive terminates his or her employment
with Skyworks.
The Named Executives were also eligible to receive short-term
cash incentive compensation under which a percentage of each
executives total cash compensation is tied to the
Companys accomplishment of specific financial objectives
during fiscal year 2005. The Company did not achieve the
financial objectives set by the Board of Directors, and
therefore no short-term cash incentive payments were made to the
Named Executives with respect to fiscal year 2005. Certain Named
Executives also were provided an opportunity to participate in
the Companys Executive Compensation Plan (the
Executive Compensation Plan), an unfunded,
non-qualified deferred compensation plan, under which
participants were allowed to defer a portion of their
compensation. Deferred amounts are held in a trust. Participants
defer recognizing taxable income on the amount held for their
benefit until the amounts are paid. Participants normally
receive the deferred amounts upon retirement. Although the
Company had discretion to make additional contributions to the
accounts of participants, it has never done so. As a result of
deferred compensation legislation under Section 409A of the
IRC, effective December 31, 2005, the Company no longer
permits employees to make contributions to the plan.
COMPENSATION OF DIRECTORS
Directors who are not employees of Skyworks are paid, in
quarterly installments, an annual retainer of $30,000, plus an
additional $1,000 for each Board of Directors meeting attended
in person or $500 for each Board of Directors meeting attended
by telephone. Effective beginning fiscal year 2005, the Chairman
of the Board of Directors is paid an annual retainer of $45,000.
Additional annual retainers are paid to the Chairman of the
Audit Committee ($9,000); the Chairman of the Compensation
Committee ($6,000); and the Chairman of the Nominating and
Governance Committee ($2,500). In addition, Directors who serve
on Committees in roles other than as Chairman are annually paid
$3,000 (Audit Committee); $2,000 (Compensation Committee); and
$1,250 (Nominating and Corporate Governance Committee). Each new
non-employee director receives an option to
purchase 45,000 shares of common stock immediately
following the earlier of Skyworks annual meeting of
stockholders at which the director is first elected by the
stockholders or following his initial appointment by the Board
of Directors. Additionally, following each annual meeting of
stockholders each non-employee director who is continuing in
office or re-elected receives an option to
purchase 15,000 shares of common stock. The exercise
price of stock options granted to directors is equal to the fair
market value of the common stock on the date of grant. Stock
option grants to directors for fiscal years 2002, 2003 and 2004
were made under the 2001 Directors Stock Option Plan.
All options under the 2001 Directors Stock Option
Plan are non-qualified options, with a maximum ten
(10) year term, that become exercisable in four
(4) equal increments over a period of four (4) years
from the date of grant.
In connection with his appointment to the Board of Directors,
Mr. McGlade was granted an option to
purchase 45,000 shares of common stock on
February 1, 2005, at an exercise price equal to the fair
market value of the common stock on the date of grant under our
Directors 2001 Stock Option Plan. In connection with their
continued service on the Board of Directors, each of Messrs.
Beebe, Beguwala, Decker, Furey, Iyer, Leonard and McLachlan was
granted an option to purchase 15,000 shares of common
stock on April 28, 2005, at an exercise price equal to the
fair market value of the common stock on the date of grant.
On June 27, 2005, the Companys Board of Directors
modified the terms of certain options to purchase the
Companys common stock held by Mr. Donald R. Beall, a
former director of the Company who retired on April 28,
2005. Specifically, the vesting of 36,750 of
Mr. Bealls outstanding stock options was accelerated
such that they are now exercisable. In addition, the exercise
period for 73,500 of Mr. Bealls stock options
(including the 36,750 accelerated options discussed above) was
extended so that, instead of expiring on July 28, 2005,
such options would continue to be exercisable until
April 28, 2007. The options affected have exercise prices
ranging from $6.24 to $11.75. These modifications did not affect
258,514 of Mr. Bealls other outstanding options,
which were fully vested pursuant to their original terms at the
time of his retirement and expire at various times beginning
July 28, 2005, and ending April 28, 2010. In
accordance with Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and FASB
Interpretation No. 44, Accounting for Certain Transactions
Involving Stock Compensation, the modification of 13,500 of the
above-referenced stock options will not affect the
Companys financial statements because the exercise price
for such options was higher than the market price of the
Companys stock at the modification date. Therefore, the
intrinsic value of such stock options was zero at the date of
the modification, and no additional compensation cost will
result. The modification of the other 60,000 above-referenced
options will result in the Company incurring a non-cash charge
of $57,450 since the exercise price for such options was lower
than the
market price of the Companys stock at the modification
date. In addition, fixed stock option accounting continues to
apply to all of the modified stock options because neither the
number of stock options nor the exercise price of such stock
options was changed as a result of the modification. None of the
Companys stock-based compensation plans was affected by
the aforementioned modifications.
No director who is also an employee receives separate
compensation for services rendered as a director. David J.
Aldrich is currently the only director who is also an employee
of Skyworks. Mr. Aldrichs compensation as President
and Chief Executive Officer of Skyworks is disclosed above.
SEVERANCE AGREEMENTS
|
|
|
Change of Control/Severance Agreement with
Mr. Aldrich |
In fiscal 2005, the Company entered into a Change of Control/
Severance Agreement with Mr. David J. Aldrich (the
Aldrich Agreement), the Companys Chief
Executive Officer. The Aldrich Agreement sets out severance
benefits that become payable if, within twenty-four
(24) months of a change of control, Mr. Aldrich either
(i) is involuntarily terminated without cause or
(ii) voluntarily terminates his employment. The severance
benefits provided to Mr. Aldrich in such circumstances will
consist of the following: (i) a severance payment equal to
two and one-half
(21/2)
times his total annual compensation for the previous twelve
(12) months, including salary and bonus (with the bonus to
be the greater of (x) the average bonus received for the
three years prior to the year in which the change of control
occurs or (y) the target bonus for the year in which the
change of control occurs); (ii) vesting of all outstanding
stock options and any restricted stock, with such stock options
remaining exercisable for a period of thirty (30) months
after the termination date (but not beyond the expiration of
their respective maximum terms); and (iii) if applicable, a
gross-up payment for
any excise taxes incurred under Section 4999 of the IRC.
The Aldrich Agreement also sets out severance benefits that
become payable if, while employed by the Company, but not
following a change of control, Mr. Aldrich either
(i) is involuntarily terminated without cause or
(ii) terminates his employment for good reason. The
severance benefits provided to Mr. Aldrich under such
circumstances will consist of the following: (i) a
severance payment equal to two (2) times his total annual
compensation for the previous twelve (12) months, including
salary and bonus (with the bonus to be the greater of
(x) the average bonus received for the three years prior to
the year in which the change of control occurs or (y) the
target bonus for the year in which the change of control
occurs); and (ii) vesting of all outstanding stock options
and any restricted stock, with such stock options remaining
exercisable for a period of two (2) years after the
termination date (but not beyond the expiration of their
respective maximum terms). In the event of
Mr. Aldrichs death or disability, all outstanding
stock options will vest in full and remain exercisable for a
period of twelve (12) months following the termination of
employment (but not beyond the expiration of their respective
maximum terms). The Aldrich Agreement also contains non-compete
and non-solicitation provisions applicable to Mr. Aldrich
while he is employed by the Company, and for a period of
twenty-four (24) months following the termination of his
employment.
|
|
|
Change of Control/Severance Agreements with Messrs.
Griffin, Kline, and Waters |
In fiscal 2005, the Company entered into a Change of Control/
Severance Agreement with each of Mr. Liam K. Griffin,
Mr. Allan M. Kline, and Mr. Gregory L. Waters (the
COC Agreements). Each COC Agreement sets out
severance benefits that become payable if, within twelve
(12) months of a change of control, the executive either
(i) is involuntarily terminated without cause or
(ii) terminates his employment for good reason. The
severance benefits provided to the executive in such
circumstances will consist of the following: (i) a
severance payment equal to two (2) times his total annual
compensation for the previous twelve (12) months, including
salary and bonus (with the bonus to be the greater of
(x) the average bonus received for the three years prior to
the year in which the change of control occurs or (y) the
target bonus for the year in which the change of control
occurs); (ii) vesting of all outstanding stock options and
any restricted stock, with such stock options remaining
exercisable for a period of twenty-four (24) months after
the termination date (but not beyond the expiration of their
respective maximum terms); and (iii) if applicable, a
gross-up payment for
any excise taxes incurred under Section 4999 of the IRC.
Each COC Agreement also sets out severance benefits that become
payable if, while employed by the Company, but not following a
change of control, the executive is involuntarily terminated
without cause. The severance benefits provided to the executive
under such circumstance will consist of the following:
(i) a severance payment equal to the sum of (x) one
and one-half
(11/2)
times his annual base salary and (y) any bonus then due;
and (ii) all
outstanding stock options will remain exercisable for a period
of eighteen (18) months after the termination date (but not
beyond the expiration of their respective maximum terms). In the
event the executives death or disability, all outstanding
stock options will vest and remain exercisable for a period of
twelve (12) months following the termination of employment
(but not beyond the expiration of their respective maximum
terms). Each COC Agreement also contains non-compete and
non-solicitation provisions applicable to the executive while he
is employed by the Company, and for a period of twenty-four
(24) months following the termination of his employment.
|
|
|
Change of Control/ Severance Agreement with
Mr. Barber |
In fiscal 2005, the Company also entered into a Change of
Control/ Severance Agreement with Mr. Kevin D. Barber (the
Barber Agreement). The Barber Agreement sets out
severance benefits that become payable if, within twelve
(12) months of a change of control, the Mr. Barber
either (i) is involuntarily terminated without cause or
(ii) terminates his employment for good reason. The
severance benefits provided to Mr. Barber in such
circumstances will consist of the following: (i) severance
pay equal to two (2) times his total annual compensation
for the previous twelve (12) months, including salary and
bonus (with the bonus to be the greater of (x) the average
bonus received for the three years prior to the year in which
the change of control occurs or (y) the target bonus for
the year in which the change of control occurs), with such
severance to be paid, at the Companys election, in a lump
sum payment at the time of termination or pro-rata over a period
of twelve (12) months following termination;
(ii) vesting of all outstanding stock options and any
restricted stock, with such stock options remaining exercisable
for a period of twenty-four (24) months after the
termination date (but not beyond the expiration of their
respective maximum terms); and (iii) if applicable,
gross-up payments for
any excise (or other) taxes incurred under Sections 4999
and 409A of the IRC. The Barber Agreement also sets out
severance benefits that become payable if, while employed by the
Company, but not following a change of control, Mr. Barber
is involuntarily terminated without cause. The severance
benefits provided to Mr. Barber under such circumstance
will consist of the following: (i) severance pay equal to
the sum of (x) one and one-half
(11/2)
times his annual base salary and (y) any bonus then due,
with such severance to be paid pro-rata over a period of twelve
(12) months following his termination; and (ii) all
outstanding stock options will remain exercisable for a period
of eighteen (18) months after the termination date (but not
beyond the expiration of their respective maximum terms). In the
event of Mr. Barbers death or disability, all
outstanding stock options will vest and remain exercisable for a
period of twelve (12) months following the termination of
employment (but not beyond the expiration of their respective
maximum terms). The Barber Agreement also contains a
non-solicitation provision applicable to Mr. Barber while
he is employed by the Company, and for a period of twelve
(12) months following the termination of his employment.
STOCK PERFORMANCE GRAPH
The following graph shows the change in Skyworks
cumulative total stockholder return for the last five fiscal
years, based upon the market price of Skyworks common
stock, compared with: (i) the cumulative total return on
the Standard & Poors 500 Index and (ii) the
Standard & Poors 500 Semiconductor Index. The
graph assumes a total initial investment of $100 as of
September 30, 2000, and shows a Total Return
that assumes reinvestment of dividends, if any, and is based on
market capitalization at the beginning of each period.
ANNUAL RETURN PERCENTAGE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended September 30, | |
|
|
| |
Company/Index |
|
2001 | |
|
2002 | |
|
2003 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Skyworks Solutions, Inc.
|
|
|
(43.13 |
) |
|
|
(76.61 |
) |
|
|
106.29 |
|
|
|
1.52 |
|
|
|
(29.73 |
) |
S&P 500 Index
|
|
|
(26.62 |
) |
|
|
(20.49 |
) |
|
|
26.75 |
|
|
|
11.80 |
|
|
|
10.57 |
|
S&P 500 Semiconductors
|
|
|
(60.74 |
) |
|
|
(36.38 |
) |
|
|
90.74 |
|
|
|
(19.43 |
) |
|
|
24.20 |
|
INDEXED RETURNS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended September 30, | |
|
|
| |
|
|
Base Period | |
|
|
Company/Index |
|
2000 | |
|
2001 | |
|
2002 | |
|
2003 | |
|
2004 | |
|
2005 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Skyworks Solutions, Inc.
|
|
|
100 |
|
|
|
56.87 |
|
|
|
13.30 |
|
|
|
27.43 |
|
|
|
27.85 |
|
|
|
19.57 |
|
S&P 500 Index
|
|
|
100 |
|
|
|
73.38 |
|
|
|
58.35 |
|
|
|
73.95 |
|
|
|
82.68 |
|
|
|
91.42 |
|
S&P 500 Semiconductors
|
|
|
100 |
|
|
|
39.26 |
|
|
|
24.98 |
|
|
|
47.64 |
|
|
|
38.38 |
|
|
|
47.67 |
|
The stock price information shown on the above stock performance
graph, annual return percentage table and indexed returns table
are not necessarily indicative of future price performance.
Information used on the graph and in the tables was obtained
from Standard & Poors, a source believed to be
reliable, but the Company is not responsible for any errors or
omissions in such information.
Skyworks common stock is traded on the NASDAQ Stock Market
under the symbol SWKS. Prior to June 25, 2002,
Skyworks common stock was traded on the NASDAQ Stock
Market under the symbol AHAA.
Stock-Based Compensation Plan Information
The Company maintains 10 stock-based compensation plans under
which our securities are authorized for issuance to our
employees and/or directors:
|
|
|
|
|
the 1986 Long-Term Incentive Plan, |
|
|
|
the 1994 Non-Qualified Stock Option Plan |
|
|
|
the 1996 Long-Term Incentive Plan |
|
|
|
the Directors 1997 Non-Qualified Stock Option Plan |
|
|
|
the 1999 Employee Long-Term Incentive Plan |
|
|
|
the Directors 2001 Stock Option Plan |
|
|
|
the Non-Qualified Employee Stock Purchase Plan |
|
|
|
the 2002 Employee Stock Purchase Plan |
|
|
|
the Washington Sub, Inc. 2002 Stock Option Plan and |
|
|
|
the 2005 Long-Term Incentive Plan. |
Except for the 1999 Employee Long-Term Incentive Plan, the
Washington Sub, Inc. 2002 Stock Option Plan and the
Non-Qualified Employee Stock Purchase Plan, each of the
foregoing stock-based compensation plans was approved by our
stockholders.
A description of the material features of each such plan is
provided below under the headings 1999 Employee Long-Term
Incentive Plan, Washington Sub, Inc. 2002 Stock
Option Plan and Non-Qualified Employee Stock
Purchase Plan.
The following table presents information about these plans as of
September 30, 2005.
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Number of Securities | |
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Weighted-Average | |
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Remaining Available for | |
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Number of Securities | |
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Exercise Price of | |
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Future Issuance Under | |
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to be Issued Upon | |
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Outstanding | |
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Stock-Based Compensation | |
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Exercise of Outstanding | |
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Options, | |
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Plans (Excluding | |
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Options, Warrants, and | |
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Warrants and | |
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Securities Reflected in | |
Plan Category |
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Rights | |
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Rights | |
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Column (a)) | |
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(a) | |
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(b) | |
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(c) | |
Stock-based compensation plans approved by security holders
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9,119,911 |
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$15.16 |
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5,172,699(1) |
Stock-based compensation plans not approved by security holders
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22,457,595 |
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$12.11 |
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3,242,660(2) |
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Total
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31,577,506(3) |
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$12.99 |
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8,415,359 |
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(1) |
No further grants will be made under the 1986 Long-Term
Incentive Plan, the 1994 Non-Qualified Stock Option Plan and the
Directors 1997 Non-Qualified Stock Option Plan. |
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(2) |
No further grants may be made under the Washington Sub Inc. 2002
Stock Option Plan. |
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(3) |
Includes 8,602,253 options held by non-employees (excluding
directors). |
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1999 Employee Long-Term Incentive Plan |
The Companys 1999 Employee Long-term Incentive Plan (the
1999 Employee Plan) provides for the grant of
non-qualified stock options to purchase shares of the
Companys common stock to employees, other than officers
and non-employee directors. The term of these options may not
exceed 10 years. The 1999 Employee Plan contains
provisions, which permit restrictions on vesting or
transferability, as well as continued exercisability upon a
participants termination of employment with the Company,
of options granted thereunder. The 1999 Employee Plan provides
for full acceleration of the vesting of options granted
thereunder upon a change in control of the Company,
as defined in the 1999 Employee Plan. The Board of Directors
generally may amend, suspend or terminate the 1999 Employee Plan
in whole or in part at any time; provided that any amendment
which affects outstanding options be consented to by the holder
of the options.
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Washington Sub, Inc. 2002 Stock Option Plan |
The Washington Sub, Inc. 2002 Stock Option Plan (the
Washington Sub Plan) became effective on
June 25, 2002, in connection with the Merger. At the time
of the spin-off of Conexants wireless business,
outstanding Conexant options granted pursuant to certain
Conexant stock-based compensation plans were converted so that
following the spin-off and Merger each holder of those certain
Conexant options held (i) options to purchase shares of
Conexant common stock and (ii) options to purchase shares
of Skyworks common stock. The purpose of the Washington Sub Plan
is to provide a means for the Company to perform its obligations
with respect to these converted stock options. The only
participants in the Washington Sub Plan are those persons who,
at the time of the Merger, held outstanding options granted
pursuant to certain Conexant stock option plans. No further
options to purchase shares of Skyworks common stock will be
granted under the Washington Sub Plan. The Washington Sub Plan
contains a number of sub-plans, which contain terms and
conditions that are applicable to certain portions of the
options subject to the Washington Sub Plan, depending upon the
Conexant stock option plan from which the Skyworks options
granted under the Washington Sub Plan were derived. The
outstanding options under the Washington Sub Plan generally have
the same terms and conditions as the original Conexant options
from which they are derived. Most of the sub-plans of the
Washington Sub Plan contain provisions related to the effect of
a participants termination of employment with the Company,
if any, and/or with Conexant on options granted pursuant to such
sub-plan. Several of the sub-plans under the Washington Sub Plan
contain specific provisions related to a change in control of
the Company.
The Company also maintains a Non-Qualified Employee Stock
Purchase Plan to provide employees of the Company and
participating subsidiaries with an opportunity to acquire a
proprietary interest in the Company through the purchase, by
means of payroll deductions, of shares of the Companys
common stock at a discount from the market price of the common
stock at the time of purchase. The Non-Qualified Employee Stock
Purchase Plan is intended for use primarily by employees of the
Company located outside the United States. Under the plan,
eligible employees may purchase common stock through payroll
deductions of up to 10% of compensation. The price per share is
the lower of 85% of the market price at the beginning or end of
each six-month offering period.
OTHER PROPOSED ACTION
As of the date of this Proxy Statement, the directors know of no
business which is expected to come before the Annual Meeting
other than (i) the election of the nominees to the Board of
Directors, (ii) the approval of the amendment to the
Companys 2005 Long-Term Incentive Plan, (iii) the
approval of the amendment to the Companys 2002 Employee
Stock Option Plan, (iv) the approval of the repurchase of
certain stock options granted pursuant to the Washington Sub,
Inc. 2002 Stock Option Plan held by non-employees, and
(v) the ratification of the selection of KPMG LLP as the
independent registered public accounting firm for the Company
for fiscal year 2006. However, if any other business should be
properly presented to the Annual Meeting, the persons named as
proxies will vote in accordance with their judgment with respect
to such matters.
OTHER MATTERS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16 (a) of the Exchange Act requires our
directors, executive officers and beneficial owners of greater
than 10% of our equity securities to file reports of holdings
and transactions of securities of Skyworks with the SEC. Based
solely on a review of Forms 3, 4 and 5 and any amendments
thereto furnished to us, and other information provided to us,
with respect to our fiscal year ended September 30, 2005,
we believe that all Section 16(a) filing requirements
applicable to our directors and executive officers with respect
to our fiscal year ended September 30, 2005, were timely
made.
SOLICITATION EXPENSES
Skyworks will bear the expenses of the preparation of the proxy
materials and the solicitation by the Board of Directors of
proxies. Proxies may be solicited on behalf of the Company in
person or by telephone,
e-mail, facsimile or
other electronic means by directors, officers or employees of
the Company, who will receive no additional compensation for any
such services. We have retained Mellon Investor Services to
assist in the solicitation of proxies, at a cost to the Company
of approximately $12,000, plus
out-of-pocket expenses.
ANNUAL REPORT ON
FORM 10-K
Copies of the Companys Annual Report on
Form 10-K for the
fiscal year ended September 30, 2005, as filed with the SEC
are available to stockholders without charge via the
Companys website at http://www.skyworksinc.com, or
upon written request addressed to Investor Relations, Skyworks
Solutions, Inc., 5221 California Avenue, Irvine, CA 92617.
STOCKHOLDER PROPOSALS
Pursuant to
Rule 14a-8 under
the Exchange Act, some stockholder proposals or nominations may
be eligible for inclusion in the Companys Proxy Statement
for the Companys 2007 annual meeting of stockholders. To
be eligible for inclusion in the Companys 2007 proxy
statement, any such proposals or nominations must meet the
requirements of
Rule 14a-8 under
the Exchange Act and be delivered in writing to the Secretary of
the Company at its principal offices at 20 Sylvan Road, Woburn,
MA 01801, no later than October 16, 2006, and must meet the
requirements of
Rule 14a-8 under
the Exchange Act. The submission of a stockholder proposal does
not guarantee that it will be included in the Companys
proxy statement. Additionally, the Company must have notice of
any stockholder proposal or nomination to be submitted at the
2007 annual meeting (but not required to be included in the
proxy statement) not later than December 30, 2006 or, in
the event that the 2007 annual meeting is held more than thirty
(30) days before or after the first anniversary of the
Companys 2006 annual meeting, the later of
December 30, 2006 or the 10th day following the day on
which public announcement of the date of the 2007 annual meeting
is first made by the Company, or such proposal will be
considered untimely pursuant to
Rule 14a-5(e)
under the Exchange Act and persons named in the proxies
solicited by management may exercise discretionary voting
authority with respect to such proposal.
The stockholders submission must include, with respect to
the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the nomination or proposal is made, the
name and address and the number of shares of common stock of the
Company which are owned beneficially and of record and must also
set forth: (i) as to each person proposed for nomination
for election or re-election as a director, all information
relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an
election contest, or is otherwise required, in each case
pursuant to Regulation 14A under the Exchange Act
(including such persons written consent to being named in
the proxy statement as a nominee and to serving as a director if
elected); and (ii) as to any other business proposed to be
brought before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made. Proposals
or nominations not meeting these requirements will not be
entertained at the 2007 annual meeting.
o n
SKYWORKS SOLUTIONS, INC.
Proxy for Annual Meeting of Stockholders
March 30, 2006
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints David J. Aldrich and Allan M. Kline, and each of them singly,
proxies, with full power of substitution to vote all shares of stock of Skyworks Solutions, Inc.
(the Company) that the undersigned is entitled to vote at the Annual Meeting of Stockholders of
Skyworks Solutions, Inc. to be held at 2:00 p.m., Eastern Standard Time, on Thursday, March 30,
2006, at the Boston Marriott Burlington, located at One Mall Road in Burlington, Massachusetts, or
at any adjournment or postponement thereof, upon matters set forth in the Notice of Annual Meeting
of Stockholders and Proxy Statement dated February 13, 2006, a copy of which has been received by
the undersigned. The proxies are further authorized to vote, in their discretion, upon such other
business as may properly come before the meeting or any adjournment or postponement thereof.
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
Skyworks Solutions, Inc.
March 30, 2006
PROXY VOTING INSTRUCTIONS
MAIL - Date, sign and mail your proxy card in the
envelope provided as soon as possible.
- OR -
TELEPHONE - Call toll-free 1-800-PROXIES
(1-800-776-9437) from any touch-tone telephone and follow the
instructions. Have your proxy card available when you call.
- OR -
INTERNET - Access www.voteproxy.com and follow
the on-screen instructions. Have your proxy card available
when you access the web page.
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COMPANY NUMBER
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ACCOUNT NUMBER |
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You may enter your voting instructions at 1-800-PROXIES or www.voteproxy.com up
until 11:59 P.M. Eastern Standard Time the day before the meeting date.
â Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. â
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE DIRECTORS AND FOR PROPOSALS 2 THROUGH 5.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
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To elect two (2) members of the Board of Directors of
the Company as Class l Directors with terms expiring at
the fiscal year 2009 Annual Meeting of Stockholders: |
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NOMINEES: |
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FOR ALL NOMINEES
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¡
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Balakrishnan S. Iyer
Thomas C. Leonard |
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WITHHOLD AUTHORITY
FOR ALL NOMINEES |
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FOR ALL EXCEPT
(See instructions below) |
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INSTRUCTION: |
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To withhold authority to vote for
any individual nominee(s), mark FOR ALL EXCEPT and fill
in the circle next to each nominee you wish to withhold, as
shown here: l |
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To change the address on your account, please check
the box at right and indicate your new address in
the address space above. Please note that changes to
the registered name(s) on the account may not be
submitted via this method.
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FOR |
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AGAINST |
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ABSTAIN |
2.
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To approve a plan to repurchase certain outstanding stock options issued
pursuant to the Washington Sub, Inc. 2002 Stock Option Plan.
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3.
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To approve an amendment to the Companys 2005 Long-Term Incentive
Plan.
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4.
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To approve an amendment to the Companys 2002 Employee Stock
Purchase Plan.
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5.
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To ratify the selection of KPMG LLP as the Companys independent
registered public accounting firm for fiscal year 2006.
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To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS 2 THROUGH 5. |
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I/We consent to future access of the Annual Report and Proxy Materials
electronically via the Internet. I understand that the Company may no longer
distribute printed materials to me for any future stockholder meeting until such
consent is revoked. I understand that I may revoke my consent at any time. |
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TO VIEW THE ANNUAL REPORT AND PROXY MATERIALS ONLINE GO TO: www.skyworksinc.com. |
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I/We will attend the annual meeting.
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Signature of Stockholder
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Date:
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Signature of Stockholder
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Date:
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Note:
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or guardian,
please give full title as such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a partnership, please sign in
partnership name by authorized person.
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