Business Context and Reporting Period
Company: Skyworks Solutions, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: May 10, 2023
Subject: Execution of new Change in Control/Severance Agreements with the Chief Executive Officer and other Named Executive Officers.
Financial Metrics
This filing does not contain financial performance data. There are no reported figures for revenue, profit, cash flow, margins, debt, or liquidity in this document.
Material Changes
The filing details the replacement of prior severance agreements with new agreements effective May 10, 2023, for the following executives:
- Liam K. Griffin (CEO): Entered into a Second Amended and Restated Change in Control/Severance Agreement.
- Other Named Executive Officers: Kris Sennesael (CFO), Reza Kasnavi (SVP, Technology and Manufacturing), Carlos S. Bori (SVP, Sales and Marketing), and Robert J. Terry (SVP, General Counsel and Secretary) entered into Amended and Restated Change in Control/Severance Agreements.
Key Contractual Changes:
- Term: All new agreements have an initial two-year term with automatic annual renewal for up to five additional years.
- Change in Control Window: For the executive officers (excluding the CEO), the period during which a qualifying termination may occur following a change in control was extended from 12 months to 24 months.
- Severance Structure: The agreements define specific lump-sum payments, equity acceleration, and COBRA continuation periods for terminations without cause, for good reason, or in connection with a change in control.
Guidance, Outlook, and Risks
Management Commentary: The filing contains no forward-looking guidance, outlook, or management commentary regarding business operations or financial projections.
Risks and Contingencies:
- Excise Tax Reduction: Payments under the agreements are subject to reduction if they would trigger excise tax under Section 4999 of the Internal Revenue Code, provided the reduction results in a larger after-tax amount for the executive.
- Conditions Precedent: Receipt of severance benefits requires the executive to sign a release of claims in favor of the Company.
- Non-Solicitation: Executives are bound by non-solicitation provisions during employment and for 12 months following termination.
Key Facts for Investor Verification
- Verify the specific definitions of "Cause," "Good Reason," and "Change in Control" within the full text of the agreements to understand the triggers for severance.
- Confirm the current annual base salary and target bonus amounts for the executives to calculate potential severance liabilities (e.g., 2x or 2.5x salary + bonus for the CEO).
- Review the Company's total outstanding equity awards to assess the potential impact of full acceleration clauses in the event of a change in control.
- Note that the filing does not disclose the specific dollar value of the new agreements, only the formulaic structure of the benefits.