APPENDIX B:
Unaudited Reconciliations of Non-GAAP Financial Measures
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Year Ended
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Sept. 27, 2019
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(In millions, except per share amounts)
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GAAP operating income
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$952.0
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Share-based compensation expense
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80.1
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Acquisition-related expenses(a)
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2.1
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Amortization of acquisition-related intangibles
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43.7
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Settlements, gains, losses and impairments(b)
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80.7
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Restructuring and other charges
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7.3
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Deferred executive compensation
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(0.1)
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Non-GAAP operating income
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$1,165.8
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GAAP operating margin %
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28.2%
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Non-GAAP operating margin %
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34.5%
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Year Ended
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Sept. 27,
2019
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Sept. 30,
2016
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Sept. 27,
2013
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GAAP net income per share, diluted
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$4.89
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$5.18
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$1.45
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Share-based compensation expense
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0.46
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0.41
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0.37
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Acquisition-related expenses(a)
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0.01
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0.04
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0.01
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Amortization of acquisition-related intangibles
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0.25
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0.17
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0.15
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Settlements, gains, losses and impairments(b)
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0.48
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0.01
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0.01
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Restructuring and other charges
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0.04
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0.02
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0.03
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Deferred executive compensation
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0.01
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PMC-Sierra merger termination fee
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(0.46)
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Interest expense on seller-financed debt(c)
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0.01
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Tax adjustments(d)
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0.04
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0.18
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0.18
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Non-GAAP net income per share, diluted
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$6.17
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$5.57
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$2.20
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Year Ended
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Sept. 27,
2019
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Sept. 28,
2018
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Sept. 30,
2016
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Sept. 27,
2013
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GAAP net cash provided by operating activities
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$1,367.4
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$1,260.6
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$1,095.7
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$499.7
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Capital expenditures
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398.4
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422.3
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189.3
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123.8
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Free cash flow (Non-GAAP)
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969.0
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838.3
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906.4
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375.9
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-
(a)
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Acquisition-related
expenses represent charges associated with acquisitions completed or contemplated. The figures presented for the fiscal year ended
September 27, 2019, include an offset of $3.1 million to record a benefit for fair value adjustments to reduce contingent consideration.
Appendix B | Page 89
Table of Contents
-
(b)
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During
the fiscal year ended September 27, 2019, the Company incurred $83.2 million in charges including $70.4 million consisting primarily of
inventory-related charges due to lower expected demand as a result of the U.S. Bureau of Industry and Security of the U.S. Department of Commerce placing Huawei
Technologies Co., Ltd. and certain of its affiliates on the Bureaus Entity List.
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(c)
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During
the fiscal year ended September 30, 2016, the Company recognized $1.1 million in interest expense associated with the accretion of the present
value of the $76.5 million liability related to the future purchase of the remaining 34% interest in the joint venture between the Company and Panasonic Corporation
(Panasonic). The Company acquired the remaining 34% interest from Panasonic on August 1, 2016.
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(d)
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Tax
adjustments represent adjustments for the use of net operating losses, research and development tax credit carryforwards, deferred tax expenses not affecting
taxes payable, charges and/or releases of uncertain tax positions, and tax-deductible share-based compensation expense in excess of GAAP share-based compensation expense. The figure presented for the
fiscal year ended September 27, 2013, includes amounts related to the passage of new tax laws.
Discussion Regarding the Use of Non-GAAP Financial Measures
Our annual report and this proxy statement contain some or all of the following financial measures that have not been calculated in accordance
with United States Generally Accepted Accounting Principles (GAAP): (i) non-GAAP operating income and operating margin, (ii) non-GAAP diluted earnings per share,
and (iii) non-GAAP free cash flow. As set forth in the Unaudited Reconciliations of Non-GAAP Financial Measures table found above, we derive such non-GAAP
financial measures by excluding certain expenses and other items from the respective GAAP financial measure that is most directly comparable to each non-GAAP financial measure. Management uses these
non-GAAP financial measures to evaluate our operating performance and compare it against past periods, make operating decisions, forecast for future periods, compare our operating performance against
peer companies and determine payments under certain compensation programs. These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results
and trends in our ongoing business by eliminating certain non-recurring expenses and other items that management believes might otherwise make comparisons of our ongoing business with prior periods
and competitors more difficult, obscure trends in ongoing operations or reduce managements ability to make forecasts.
We
provide investors with non-GAAP operating income and operating margin and non-GAAP diluted earnings per share because we believe it is important for investors to be able to closely monitor and
understand changes in our ability to generate income from ongoing business operations. We believe these non-GAAP financial measures give investors an additional method to evaluate historical operating
performance and identify trends, an additional means of evaluating period-over-period operating performance and a method to facilitate certain comparisons of our operating results to those of our peer
companies. We also believe that providing non-GAAP operating income and operating margin allows investors to assess the extent to which our ongoing operations impact our overall financial performance.
We further believe that providing non-GAAP diluted earnings per share allows investors to assess the overall financial performance of our ongoing operations by eliminating the impact of share-based
compensation expense, acquisition-related expenses, amortization of acquisition-related intangibles, settlements, gains, losses and impairments, restructuring-related charges, certain deferred
executive compensation, merger termination fees, interest expense on seller-financed debt, and certain tax items which may not occur in each period presented and which may represent non-cash items
unrelated to our ongoing operations. We believe that
disclosing these non-GAAP financial measures contributes to enhanced financial reporting transparency and provides investors with added clarity about complex financial performance measures.
Page 90 | Appendix B
Table of Contents
We
calculate non-GAAP operating income by excluding from GAAP operating income, share-based compensation expense, acquisition-related expenses, amortization of acquisition-related intangibles,
settlements, gains, losses and impairments, restructuring-related charges, and certain deferred executive compensation. We calculate non-GAAP diluted earnings per share by excluding from GAAP diluted
earnings per share, share-based compensation expense, acquisition-related expenses, amortization of acquisition-related intangibles, settlements, gains, losses and impairments, restructuring-related
charges, certain deferred executive compensation, merger termination fees, interest expense on seller-financed debt, and certain tax items.
Free
cash flow is a non-GAAP measure calculated by subtracting capital expenditures from the most directly comparable GAAP measure, cash flows from operating activities. We believe free cash flow
provides insight into our liquidity, our cash-generating capability, and the amount of cash potentially available to return to stockholders, as well as our general financial performance.
We
exclude the items identified above from the respective non-GAAP financial measure referenced above for the reasons set forth with respect to each such excluded item below:
Share-Based Compensationbecause (1) the total amount of expense is partially outside of our control because it is based on factors such as
stock price volatility and interest rates, which may be unrelated to our performance during the period in which the expense is incurred, (2) it is an expense based upon a valuation methodology
premised on assumptions that vary over time, and (3) the amount of the expense can vary significantly between companies due to factors that can be outside of the control of such companies.
Acquisition-Related Expensesincluding such items as, when applicable, amortization of acquired intangible assets, fair value adjustments to
contingent consideration, fair value charges incurred upon the sale of acquired inventory, acquisition-related professional fees, deemed compensation expenses and interest expense on seller-financed
debt, because they are not considered by management in making operating decisions and we believe that such expenses do not have a direct correlation to our future business operations and thereby
including such charges does not necessarily reflect the performance of our ongoing operations for the period in which such charges or reversals are incurred.
Settlements, Gains, Losses and Impairmentsbecause such settlements, gains, losses and impairments (1) are not considered by management in
making operating decisions, (2) are infrequent in nature, (3) are generally not directly controlled by management, (4) do not necessarily reflect the performance of our ongoing
operations for the period in which such charges are recognized and/or (5) can vary significantly in amount between companies and make comparisons less reliable.
Restructuring-Related Chargesthese charges have no direct correlation to our future business operations and including such charges or reversals
does not necessarily reflect the performance of our ongoing operations for the period in which such charges or reversals are incurred.
Deferred Executive Compensationincluding charges related to any contingent obligation pursuant to an executive severance agreement, because that
expense has no direct correlation with our recurring business
operations and including such expenses or reversals does not accurately reflect the compensation expense for the period in which incurred.
Merger Termination Feesbecause we believe such non-recurring fees have no direct correlation to our business operations or performance during the
period in which they are received or for any future period.
Appendix B | Page 91
Table of Contents
Certain Income Tax Itemsincluding certain deferred tax charges and benefits that do not result in a current tax payment or tax refund and other
adjustments, including but not limited to, items unrelated to the current fiscal year or that are not indicative of our ongoing business operations.
The
non-GAAP financial measures presented in the table above should not be considered in isolation and are not an alternative for the respective GAAP financial measure that is most directly comparable
to each such non-GAAP financial measure. Investors are cautioned against placing undue reliance on these non-GAAP financial measures
and are urged to review and consider carefully the adjustments made by management to the most directly comparable GAAP financial measures to arrive at these non-GAAP financial measures. Non-GAAP
financial measures may have limited value as analytical tools because they may exclude certain expenses that some investors consider important in evaluating our operating performance or ongoing
business performance. Further, non-GAAP financial measures are likely to have limited value for purposes of drawing comparisons between companies as a result of different companies potentially
calculating similarly titled non-GAAP financial measures in different ways because non-GAAP measures are not based on any comprehensive set of accounting rules or principles.
Page 92 | Appendix B
Table of Contents
EXHIBIT A:
The Companys 2002 Employee Stock Purchase Plan, as Amended, as Proposed to be Approved
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SKYWORKS SOLUTIONS, INC.
2002 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
1. Purpose
The Skyworks Solutions, Inc. 2002 Employee Stock Purchase Plan (hereinafter the Plan) is intended to provide a method
whereby employees of Skyworks Solutions, Inc. (the Company) and its participating subsidiaries (as defined in Article 18) will have an opportunity to
acquire a proprietary interest in the Company through the purchase of shares of the Companys Common Stock. It is the intention of the Company to have the Plan qualify as an
employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code). The
provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Internal Revenue Code.
2. Eligible Employees
All employees of the Company or any of 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 shall be eligible to receive options under this Plan to purchase the Companys Common Stock. Except as otherwise provided herein, persons who
become eligible employees after the first day of any Offering Period shall be eligible to receive options on the first day of the next succeeding Offering Period on which options are granted to
eligible employees under the Plan. For the purpose of this Plan, the term employee shall not include an employee whose customary employment is less than twenty (20) hours per week or is for not
more than five (5) months in any calendar year.
In
no event may an employee be granted an option if such employee, immediately after the option is granted, owns stock possessing five (5%) percent or more of the total combined voting power or value
of all classes of stock of the Company or of its parent corporation or subsidiary corporation as the terms parent corporation and subsidiary
corporation are defined in Section 424(e) and (f) of the Internal Revenue Code. For purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Internal Revenue Code shall
apply and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee.
3. Stock Subject to the Plan
The stock subject to the options granted hereunder shall be shares of the Companys authorized but unissued Common Stock or shares of Common
Stock reacquired by the Company, including shares purchased in the open market. Subject to approval of the stockholders, the aggregate number of shares which may be issued pursuant to the Plan is
9,880,000 for all Offering Periods, subject to increase or decrease by reason of stock split-ups, reclassifications, stock dividends, changes in par value and the like. If any option granted under the
Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject to such option
shall again be available under the Plan. If the number of shares of Common Stock available for any Offering Period is insufficient to satisfy all
Exhibit A | Page A-1
Table of Contents
purchase
requirements for that Offering Period, the available shares for that Offering Period shall be apportioned among participating employees in proportion to their options.
4. Offering Periods and Stock Options
There shall be Offering Periods during which payroll deductions will be accumulated under the Plan. Each Offering Period includes only regular pay days falling
within it. The Committee shall be expressly permitted to establish the Offering Periods, including the Offering Commencement Date and Offering Termination Date of any Offering Period, under this Plan;
provided, however, that, in no event shall any Offering Period extend for more than twenty-four (24) months. The Offering Commencement Date is the first day of each Offering Period. The
Offering Termination Date is the applicable date on which an Offering Period ends under this Plan.
Subject
to the foregoing, the Offering Periods shall generally commence and end as follows:
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Offering
Commencement Dates
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Offering
Termination Dates
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Each August 1
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Each January 31
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Each February 1
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Each July 31
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Provided,
however, that (i) the Offering Commencement Date and Offering Termination Date of the initial Offering Period under this Plan shall be October 21, 2002 and March 31,
2003, respectively, and (ii) the Offering Commencement Date and Offering Termination Date of the Offering Period immediately following the initial Offering Period under this Plan shall be
April 1, 2003 and July 31, 2003, respectively.
On
each Offering Commencement Date, the Company will grant to each eligible employee who is then a participant in the Plan an option to purchase on the Offering Termination Date at the Option Exercise
Price, as hereinafter provided, that number of full shares of Common Stock reserved for the purpose of the Plan, up to a maximum of 1,000 shares, subject to increase or decrease (i) at the
discretion of the Committee before each Offering Period or (ii) by reason of stock split-ups, reclassifications, stock dividends, changes in par value and the like (the Share
Cap); provided that such employee remains eligible to participate in the Plan throughout such Offering Period. If the eligible employees accumulated payroll deductions
on the Offering Termination Date would enable the eligible employee to purchase more than the Share Cap except for the Share Cap, the excess of the amount of the accumulated payroll deductions over
the aggregate purchase price of the Share Cap shall be refunded to the eligible employee as soon as administratively practicable by the Company, without interest. The Option Exercise Price for each
Offering Period shall be the lesser of (i) eighty-five percent (85%) of the fair market value 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. In the event of an increase or decrease in the number of outstanding
shares of Common Stock through stock split-ups, reclassifications, stock dividends, changes in par value and the like, an appropriate adjustment shall be made in the number of shares and Option
Exercise Price per share provided for under the Plan, either by a proportionate increase in the number of shares and proportionate decrease in the Option Exercise Price per share, or by a
proportionate decrease in the number of shares and a proportionate increase in the Option Exercise Price per share, as may be required to enable an eligible employee who is then a participant in the
Plan to acquire on the Offering Termination Date that number of full shares of Common Stock as his accumulated payroll deductions on such date will pay for at a price equal to the lesser of
(i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Commencement Date, or (ii) eighty-five
Page A-2 | Exhibit
A
Table of Contents
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, as so adjusted.
For
purposes of this Plan, the term fair market value means, if the Common Stock is listed on a national securities exchange or is on the National Association of
Securities Dealers Automated Quotation (Nasdaq) Global Select Market system, the closing sale price of the Common Stock on such exchange or as reported on Nasdaq or, if
the Common Stock is traded in the over-the-counter securities market, but not on the Nasdaq Global Select Market, the closing bid quotation for the Common Stock, each as published in The Wall Street
Journal. If no shares of Common Stock are traded on the Offering Commencement Date or Offering Termination Date, the fair market value
will be determined on the next regular business day on which shares of Common Stock are traded.
For
purposes of this Plan the term business day as used herein means a day on which there is trading on the Nasdaq Global Select Market or such national securities
exchange on which the Common Stock is listed.
No
employee shall be granted an option which permits his rights to purchase Common Stock under the Plan and any similar plans of the Company or any parent or subsidiary corporations to accrue at a
rate which exceeds $25,000 of fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. The purpose of the
limitation in the preceding sentence is to comply with and shall be construed in accordance with Section 423(b)(8) of the Internal Revenue Code. 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 Section 423(b)(8) limitation described in this
paragraph, the excess of the amount of the accumulated payroll deductions over the aggregate purchase price of the shares actually purchased shall be refunded as soon as administratively practicable
to the participant by the Company, without interest.
5. Exercise of Option
Each eligible employee who continues to be a participant in the Plan on the Offering Termination Date shall be deemed to have exercised his or her option on
such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such
date will pay for at the Option Exercise Price subject to the Share Cap and the Section 423(b)(8) limitation described in Article 4. If a participant is not an employee on the Offering
Termination Date and throughout an Offering Period, he or she shall not be entitled to exercise his or her option.
If
a participants accumulated payroll deductions in his or her account are based on a currency other than the U.S. dollar, then on the Offering Termination Date the accumulated payroll
deductions in his or her account will be converted into an equivalent value of U.S. dollars based upon the U.S. dollar-foreign currency exchange rate in effect on that date, as reported in The Wall Street
Journal, provided that such conversion does not result in an Option Exercise Price which is, in fact, less than the lesser of an amount
equal to 85 percent of the fair market value of the Common Stock at the time such option is granted or 85 percent of the fair market value of the Common Stock at the time such option is
exercised. The Plan administrators (as defined in Article 19) shall have the right to change such conversion date, as they deem appropriate to effectively purchase shares on any Offering
Termination Date, provided that such action does not cause the Plan, or any grants under the Plan, to fail to qualify under Section 423 of the Internal Revenue Code.
Exhibit A | Page A-3
Table of Contents
6. Authorization for Entering Plan
An eligible employee may enter the Plan by following a written, electronic or other enrollment process, including a payroll deduction authorization, as
prescribed by the Plan administrators under generally applicable rules. Except as may otherwise be established by the Plan administrators under generally applicable rules, all enrollment
authorizations shall be effective only if delivered to the designated Plan administrator(s) in accordance with the prescribed procedures not later than ten (10) business days before an
applicable Offering Commencement Date Participation may be conditioned on an eligible employees consent to transfer and process personal data and on acknowledgment and agreement to
Plan terms and other specified conditions.
The
Company will accumulate and hold for the employees account the amounts deducted from his or her pay. No interest will be paid thereon. Participating employees may not make any
separate cash payments into their account.
Unless
an employee files a new authorization, or withdraws from the Plan, his or her deductions and purchases under the authorization he or she has on file under the Plan will continue as long
as the Plan remains in effect. An employee may increase or decrease the amount of his or her payroll deductions as of the next Offering Commencement Date by filing a revised payroll deduction
authorization in accordance with the procedures then applicable to such actions. Except as may otherwise be established by the Plan administrators under generally applicable rules, all revised
authorizations shall be effective only if delivered to the designated Plan administrator(s) in accordance with the prescribed procedures not later than ten (10) business days before the next
Offering Commencement Date.
7. Maximum Amount of Payroll Deductions
An employee may authorize payroll deductions in an amount of not less than one percent (1%) and not more than ten percent (10%) (in whole number percentages
only) of his or her eligible compensation. Such deductions shall be determined based on the employees election in effect on the payday on which such eligible compensation is paid. An
employee may not make any additional payments into such account. Eligible compensation means the wages as defined in Section 3401(a) of the Internal Revenue Code, determined without regard to
any rules that limit compensation included in wages based on the nature or location or employment or
services performed, including without limitation base pay, shift premium, overtime, gain sharing (profit sharing), incentive compensation, bonuses and commissions and all other payments made to the
employee for services as an employee during the applicable payroll period, and excluding the value of any qualified or non-qualified stock option granted to the employee to the extent such value is
includible in the taxable wages, reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits, but determined prior to any exclusions for
any amounts deferred under Sections 125, 401(k), 402(e)(3), 402(h)(1)(B), 403(b) or 457(b) of the Internal Revenue Code or for certain contributions described in Section 457(h)(2) of the
Internal Revenue Code that are treated as Company contributions.
8. Unused Payroll Deductions
Only full shares of Common Stock may be purchased. Any balance remaining in an employees account after a purchase will be reported to the
employee and will be carried forward to the next Offering Period. However, in no event will the amount of the unused payroll deductions carried forward from a payroll period exceed the Option Exercise
Price per share for that Offering Period. If for any Offering Period the amount of unused payroll
Page A-4 | Exhibit
A
Table of Contents
deductions
should exceed the Option Exercise Price per share, the amount of the excess for any participant shall be refunded to such participant, without interest.
9. Change in Payroll Deductions
Unless otherwise permitted by the Committee prior to the commencement of an Offering Period, payroll deductions may not be increased, decreased or suspended by
a participant during an Offering Period. However, a participant may withdraw in full from the Plan.
10. Withdrawal from the Plan
An employee may withdraw from the Plan and withdraw all but not less than all of the payroll deductions credited to his or her account under the Plan prior to
the Offering Termination Date by completing and filing a withdrawal notification with the designated Plan administrator(s) in accordance with the prescribed procedures, in which event the Company will
refund as soon as administratively practicable without interest the entire balance of such employees deductions not previously used to purchase Common Stock under the Plan. Except as
may otherwise be prescribed by the Plan administrators under generally applicable rules, all withdrawals shall be effective only if delivered to the designated Plan administrator(s) in accordance with
the prescribed procedures not later than ten (10) business days before the Offering Termination Date.
An
employee who withdraws from the Plan is like an employee who has never entered the Plan; the employees rights under the Plan will be terminated and no further payroll deductions
will be made. To reenter, such an employee must re-enroll pursuant to the provisions of Article 6 before the next Offering Commencement Date which cannot, however, become effective before the
beginning of the next Offering Period following his withdrawal.
11. Issuance of Stock
As soon as administratively practicable after each Offering Period the Company shall deliver (by electronic or other means) to the participant the Common Stock
purchased under the Plan, except as specified below. The Plan administrators may permit or require that the Common Stock shares be deposited directly with a broker or agent designated by the Plan
administrators, and the Plan administrators may utilize electronic or automated methods
of share transfer. In addition, the Plan administrators may require that shares be retained with such broker or agent for a designated period of time (and may restrict dispositions during that period)
and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares or to restrict transfer of such shares as required to ensure that the Companys
applicable tax withholding obligations are satisfied.
12. No Transfer or Assignment of Employees Rights
An employees rights under the Plan are his or hers alone and may not be transferred or assigned to, or availed of by, any other person. Any
option granted to an employee may be exercised only by him or her, except as provided in Article 13 in the event of an employees death.
13. Termination of Employees Rights
Except as set forth in Article 14, an employees rights under the Plan will terminate when he or she ceases to be an employee because of
retirement, resignation, lay-off, discharge, death, change of status, failure to remain in the customary employ of the Company for twenty (20) hours or more per week, or for any other reason.
Notwithstanding anything to the contrary contained in Article 10, a withdrawal notice will be considered as
Exhibit A | Page A-5
Table of Contents
having
been received from the employee on the day his or her employment ceases, and all payroll deductions not used to purchase Common Stock will be refunded without interest.
Notwithstanding
anything to the contrary contained in Article 10, if an employees payroll deductions are interrupted by any legal process, a withdrawal notice will be considered
as having been received from him or her on the day the interruption occurs.
14. Death of an Employee
Upon termination of the participating employees employment because of death, the person(s) entitled to receipt of the Common Stock and/or cash
as provided in this Article 14 shall have the right to elect, by written notice given to the Plan administrators prior to the expiration of the thirty (30) day period commencing with the
date of the death of the employee, either (i) to withdraw, without interest, all of the payroll deductions credited to the employees account under the Plan, 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 for the
purchase of that number of full shares of Common Stock reserved for the purpose of the Plan which the accumulated payroll deductions in the employees account at the date of the
employees death will purchase at the applicable Option Exercise Price (subject to the limitations set forth in Article 4), and any excess in such account (in lieu of fractional
shares) will be paid to the employees estate as soon as administratively practicable, without interest. In the event that no such written notice of election shall be duly received by
the Plan administrators, the payroll deductions credited to the employees account at the date of the employees death will be paid to the employees
estate as soon as administratively practicable, without interest.
Except
as provided in the preceding paragraph, in the event of the death of a participating employee, the Company shall deliver such Common Stock and/or cash to the executor or administrator of the
estate of the employee.
15. Termination and Amendments to Plan
The Plan may be terminated at any time by the Companys Board of Directors or, if sooner, when all of the shares of Common Stock reserved for the
purposes of the Plan have been purchased. In the event that the Board of Directors terminates the Plan pursuant to this Article 15, the date of such termination shall be deemed as the Offering
Termination Date of the applicable Offering Period in which such termination date occurs. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase Common
Stock will be refunded without interest.
The
Committee or the Board of Directors may from time to time adopt amendments to the Plan provided that, without the approval of the stockholders of the Company, no amendment may (i) except as
provided in Articles 3, 4, 24 and 25, increase the number of shares that may be issued under the Plan; (ii) change the class of employees eligible to receive options under the Plan, if
such action would be treated as the adoption of a new plan for purposes of Section 423(b) of the Internal Revenue Code; or (iii) cause Rule 16b-3 under the Securities Exchange Act
of 1934 to become inapplicable to the Plan.
16. Limitations of Sale of Stock Purchased Under the Plan
The Plan is intended to provide shares of Common Stock for investment and not for resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his or her own affairs. An employee may, therefore, sell stock purchased under the Plan at any time the employee chooses, subject to compliance with any applicable federal
or state securities laws and subject to any restrictions imposed under Articles 11 and 26.
Page A-6 | Exhibit
A
Table of Contents
Each
employee agrees by entering the Plan to promptly give the Company notice of any such Common Stock disposed of within two years after the Offering Commencement Date on which the Common Stock was
purchased showing the number of such shares disposed of. The employee assumes the risk of any market fluctuations in the price of such Common Stock.
17. Companys Offering of Expenses Related to Plan
The Company will bear all costs of administering and carrying out the Plan.
18. Participating Subsidiaries
The term participating subsidiaries shall mean any present or future subsidiary of the Company which is designated by the
Committee to participate in the Plan. The Committee shall have the power to make such designation(s) before or after the Plan is approved by the stockholders.
19. Administration of the Plan
The Plan may be administered by the Compensation Committee, or such other committee as may be appointed by the Board of Directors of the Company (the
Committee). No member of the Committee shall be eligible to participate in the Plan while serving as a member of the Committee. In the event that the Board of Directors
fails to appoint or refrains from appointing a Committee, the Board of Directors shall have all power and authority to administer the Plan (in such event the word
Committee shall refer to the Board of Directors).
The
Committee shall have the authority to construe and interpret the Plan and options, and to establish, amend and revoke rules and regulations for the administration of the Plan. The Committee, in
the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. The
interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final. The Committee may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem best. Without limiting the foregoing, the Committee shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) to determine when and how options to purchase shares of Common Stock shall be granted and the provisions of each Offering Period (which need not be identical); (ii) to designate from
time to time which participating subsidiaries of the Company shall be eligible to participate in the Plan; (iii) to determine the Offering Commencement Date and Offering Termination Date of any
Offering Period; (iv) to increase or decrease the maximum number of shares which may be purchased by an eligible employee in any Offering Period; (v) to amend the Plan as provided in
Article 15, and (vi) generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and the participating
subsidiaries.
The
Committee may delegate to one or more individuals the day-to-day administration of the Plan. Without limitation, subject to the terms and conditions of this Plan, the President, the Chief
Financial Officer of the Company, and any other officer of the Company or committee of officers or employees designated by the Committee (collectively, the Plan
administrators), shall each be authorized to determine the methods through which eligible employees may elect to participate, amend their participation, or withdraw from participation
in the Plan, and establish methods of enrollment by means of a manual or electronic form of authorization or an integrated voice response system. The Plan administrators are further authorized to
determine the matters described in Article 11 concerning 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.
Exhibit A | Page A-7
Table of Contents
With
respect to persons subject to Section 16 of the Securities and Exchange Act of 1934, as amended, transactions under the Plan are intended to comply with all applicable conditions of
Rule 16b-3 or its successors under said Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by that Committee.
No
member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. The Company shall
indemnify each member of the Board of Directors and the 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 this Plan.
As
soon as administratively practicable after the end of each Offering Period, the Plan administrators shall prepare and distribute or make otherwise readily available by electronic means or otherwise
to each participating employee in the Plan 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.
20. Optionees Not Stockholders
Neither the granting of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the Company with respect
to the shares covered by such option until such shares have been purchased by and issued to him.
21. Application of Funds
The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan may be used for any corporate purposes, and the
Company shall not be obligated to segregate participating employees payroll deductions.
22. Governmental Regulation
The Companys obligation to sell and deliver shares of the Companys Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization, issuance or sale of such stock.
In
this regard, the Board of Directors may, in its discretion, require as a condition to the exercise of any option that a Registration Statement under the Securities Act of 1933, as amended, with
respect to the shares of Common Stock reserved for issuance upon exercise of the option shall be effective.
23. Transferability
Neither payroll deductions credited to an employees account nor any rights with regard to the exercise of an option or to receive stock under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the employee. Any such attempted assignment, transfer, pledge, or other disposition shall be without effect,
except that the Company may treat such act as an election to withdraw funds in accordance with Article 10.
Page A-8 | Exhibit
A
Table of Contents
24. Effect of Changes of Common Stock
If the Company should subdivide or reclassify the Common Stock which has been or may be optioned under the Plan, 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.
25. Merger or Consolidation
If the Company should at any time merge into or consolidate with another corporation, the Board of Directors may, at its election, either (i) terminate
the Plan and refund without interest the entire balance of each participating employees payroll deductions, or (ii) entitle each participating employee 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, and the Board of Directors shall take such steps in connection with such merger or consolidation as the Board of
Directors shall deem necessary to assure that the provisions of this Article 25 shall thereafter be applicable, as nearly as reasonably possible. A sale of all or substantially all of the
assets of the Company shall be deemed a merger or consolidation for the foregoing purposes.
26. Withholding of Additional Tax
By electing to participate in the Plan, each participant acknowledges that the Company and its participating subsidiaries are required to withhold taxes with
respect to the amounts deducted from the
participants compensation and accumulated for the benefit of the participant under the Plan, and each participant agrees that the Company and its participating subsidiaries may deduct
additional amounts from the participants compensation, when amounts are added to the participants account, used to purchase Common Stock or refunded, in order to
satisfy such withholding obligations. Each participant further acknowledges that when Common Stock is purchased under the Plan the Company and its participating subsidiaries may be required to
withhold taxes with respect to all or a portion of the difference between the fair market value of the Common Stock purchased and its purchase price, and each participant agrees that such taxes may be
withheld from compensation otherwise payable to such participant. It is intended that tax withholding will be accomplished in such a manner that the full amount of payroll deductions elected by the
participant under Article 7 will be used to purchase Common Stock. However, if amounts sufficient to satisfy applicable tax withholding obligations have not been withheld from compensation
otherwise payable to any participant then, notwithstanding any other provision of the Plan, the Company may withhold such taxes from the participants accumulated payroll deductions and
apply the net amount to the purchase of Common Stock, unless the participant pays to the Company, prior to the exercise date, an amount sufficient to satisfy such withholding obligations. Each
participant further acknowledges that the Company and its participating subsidiaries may be required to withhold taxes in connection with the disposition of stock acquired under the Plan and agrees
that the Company or any participating subsidiary may take whatever action it considers appropriate to satisfy such withholding requirements, including deducting from compensation otherwise payable to
such participant an amount sufficient to satisfy such withholding requirements or conditioning any disposition of Common Stock by the participant upon the payment to the Company or such subsidiary of
an amount sufficient to satisfy such withholding requirements.
Exhibit A | Page A-9
Table of Contents
27. Approval of Stockholders
This Plan was first adopted by the Board of Directors on September 25, 2002 and amended on January 14, 2003, and approved, as amended, by the
stockholders of the Company on March 10, 2003. The Plan was subsequently amended and approved by the stockholders on March 30, 2006, March 27, 2008, and May 11, 2011, and
thereafter amended by the Board of Directors on November 8, 2012.
Page A-10 | Exhibit
A
PRELIMINARY PROXY STATEMENT
SUBJECT TO COMPLETION
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VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 5, 2020 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2020 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 5, 2020 for shares held directly and by 11:59 p.m. Eastern Time on May 1, 2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E96766-Z76356-P31925
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KEEP THIS PORTION FOR YOUR RECORDS
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN THIS PORTION ONLY
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SKYWORKS SOLUTIONS, INC.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR NAMED IN PROPOSAL 1, FOR PROPOSALS 2, 3, 4, 5, 6, 7, AND 8, AND AGAINST PROPOSAL 9.
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1.
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To elect the following nine individuals nominated to serve as directors of the Company with terms expiring at the next Annual Meeting of Stockholders.
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For
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Against
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Abstain
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Nominees:
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For
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Against
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Abstain
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1a.
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David J. Aldrich
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3.
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To approve, on an advisory basis, the compensation of the Companys named executive officers, as described in the Companys Proxy Statement.
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1b.
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Alan S. Batey
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1c.
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Kevin L. Beebe
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4.
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To approve an amendment to the Companys 2002 Employee Stock Purchase Plan, as Amended.
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1d.
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Timothy R. Furey
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1e.
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Liam K. Griffin
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To approve an amendment to the Companys Restated Certificate of Incorporation to eliminate the supermajority vote provisions relating to stockholder approval of a merger or consolidation, disposition of all or substantially all of the Companys assets, or issuance of a substantial amount of the Companys securities.
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1f.
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Christine King
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1g.
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David P. McGlade
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To approve an amendment to the Companys Restated Certificate of Incorporation to eliminate the supermajority vote provisions relating to stockholder approval of a business combination with any related person.
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1h.
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Robert A. Schriesheim
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1i.
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Kimberly S. Stevenson
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2.
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To ratify the selection by the Companys Audit Committee of KPMG LLP as the independent registered public accounting firm for the Company for fiscal year 2020.
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To approve an amendment to the Companys Restated Certificate of Incorporation to eliminate the supermajority vote provision relating to stockholder amendment of charter provisions governing directors.
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To approve an amendment to the Companys Restated Certificate of Incorporation to eliminate the supermajority vote provision relating to stockholder amendment of the charter provision governing action by stockholders.
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9.
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To approve a stockholder proposal regarding a right by stockholders to act by written consent.
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Annual Report and Proxy Statement are available at www.skyworksinc.com/annualreport.
E96767-Z76356-P31925
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SKYWORKS SOLUTIONS, INC.
Annual Meeting of Stockholders
May 6, 2020, 2:00 p.m. EDT
This proxy is solicited by the Board of Directors
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The stockholder(s) hereby appoint(s) Liam K. Griffin and Robert J. Terry, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of SKYWORKS SOLUTIONS, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 2:00 p.m., EDT on May 6, 2020, at the Boston Marriott Burlington, 1 Burlington Mall Road, Burlington, Massachusetts 01803, and any adjournment or postponement thereof.
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This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors recommendations.
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Continued and to be signed on reverse side
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