Annual Report — Form 10-K — Sect. 13 / 15(d) – SEA’34 Filing Table of Contents
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2: EX-10.12 Material Contract HTML 77K
3: EX-10.40 Material Contract HTML 85K
4: EX-21.1 Subsidiaries List HTML 50K
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6: EX-23.2 Consent of Experts or Counsel HTML 44K
7: EX-31.1 Certification -- §302 - SOA'02 HTML 46K
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10: EX-32.2 Certification -- §906 - SOA'02 HTML 43K
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19: R3 Consolidated Statements of Comprehensive Income HTML 73K
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28: R12 Fair Value Measurements HTML 131K
29: R13 Inventories HTML 50K
30: R14 Property, Plant and Equipment HTML 78K
31: R15 Goodwill and Intangible Assets HTML 144K
32: R16 Accrued Liabilities HTML 55K
33: R17 Credit Facilities HTML 65K
34: R18 Share-Based Compensation HTML 241K
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36: R20 Income Taxes HTML 193K
37: R21 Commitments and Contingencies HTML 156K
38: R22 Concentration of Risk HTML 61K
39: R23 Segment Information HTML 174K
40: R24 Restructuring HTML 81K
41: R25 Stock Repurchase Program HTML 58K
42: R26 Derivatives and Hedging Activities HTML 108K
43: R27 Selected Quarterly Financial Data (Unaudited) HTML 106K
44: R28 Schedule II - Valuation And Qualifying Accounts HTML 56K
45: R29 Significant Accounting Policies (Policies) HTML 207K
46: R30 Significant Accounting Policies (Tables) HTML 198K
47: R31 Acquisitions (Tables) HTML 50K
48: R32 Investments (Tables) HTML 74K
49: R33 Fair Value Measurements (Tables) HTML 121K
50: R34 Inventories (Tables) HTML 50K
51: R35 Property, Plant and Equipment (Tables) HTML 75K
52: R36 Goodwill and Intangible Assets (Tables) HTML 146K
53: R37 Accrued Liabilities (Tables) HTML 54K
54: R38 Credit Facilities (Tables) HTML 47K
55: R39 Share-Based Compensation (Tables) HTML 233K
56: R40 Interest Income and Other (Expense) Income, Net HTML 56K
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57: R41 Income Taxes (Tables) HTML 185K
58: R42 Commitments and Contingencies (Tables) HTML 128K
59: R43 Concentration of Risk (Tables) HTML 55K
60: R44 Segment Information (Tables) HTML 175K
61: R45 Restructuring (Tables) HTML 80K
62: R46 Stock Repurchase Program (Tables) HTML 57K
63: R47 Derivatives and Hedging Activities (Tables) HTML 101K
64: R48 Selected Quarterly Financial Data (Unaudited) HTML 105K
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65: R49 Organization and Basis of Presentation (Fiscal HTML 46K
Year) (Details)
66: R50 Organization and Basis of Presentation (Segment HTML 52K
Information) (Details)
67: R51 Significant Accounting Policies - Narrative HTML 67K
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68: R52 Significant Accounting Policies - Allowances HTML 52K
Against Accounts Receivable (Details)
69: R53 Significant Accounting Policies - Estimated Useful HTML 57K
Lives of Property, Plant, and Equipment (Details)
70: R54 Significant Accounting Policies - Deferred Revenue HTML 54K
(Details)
71: R55 Significant Accounting Policies - Changes in Other HTML 100K
Comprehensive (Loss) Income by Component (Details)
72: R56 Significant Accounting Policies - Changes in HTML 79K
Accumulated Other Comprehensive Income (Loss) by
Component (Details)
73: R57 Significant Accounting Policies - Computation of HTML 67K
Earnings Per Share (Details)
74: R58 Acquisitions - Narrative (Details) HTML 89K
75: R59 Acquisitions - Triune Purchase Price Allocation HTML 60K
(Details)
76: R60 Investments - Narrative (Details) HTML 52K
77: R61 Investments - Summary of Available-For-Sale HTML 50K
Securities (Details)
78: R62 Investments - Schedule of Available-For-Sale HTML 52K
Securities, Classified by Maturity Period
(Details)
79: R63 Fair Value Measurements - Narrative (Details) HTML 47K
80: R64 Fair Value Measurements - Financial Assets and HTML 92K
Liabilities Measured and Recorded at Fair Value on
a Recurring Basis (Details)
81: R65 Fair Value Measurements - Reconciliation of Change HTML 51K
in the Earn-out Liability (Details)
82: R66 Inventories - Summary of Inventories (Details) HTML 50K
83: R67 Property, Plant and Equipment - Narrative HTML 42K
(Details)
84: R68 Property, Plant and Equipment - Summary of HTML 64K
Property and Equipment (Details)
85: R69 Property, Plant and Equipment - Summary of HTML 65K
Impairment Charges (Details)
86: R70 Goodwill and Intangible Assets - Narrative HTML 44K
(Details)
87: R71 Goodwill and Intangible Assets - Goodwill by HTML 52K
Reporting Unit (Details)
88: R72 Goodwill and Intangible Assets - Summary of Income HTML 55K
Approach Valuation Assumptions (Details)
89: R73 Goodwill and Intangible Assets - Schedule of HTML 66K
Finite-lived Intangible Assets (Details)
90: R74 Goodwill and Intangible Assets - Schedule of HTML 47K
Finite-lived Intangible Asset Impairment (Details)
91: R75 Goodwill and Intangible Assets - Schedule of HTML 49K
Changes to Finite-Lived Intangible Assets
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92: R76 Goodwill and Intangible Assets - Future HTML 68K
Amortization Expense for Intangible Assets
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93: R77 Goodwill and Intangible Assets - Schedule of HTML 46K
Indefinite-lived Intangible Assets (Details)
94: R78 Accrued Liabilities - Summary (Details) HTML 62K
95: R79 Credit Facilities - Narrative (Details) HTML 107K
96: R80 Credit Facilities - Scheduled Maturities of Term HTML 55K
Loans (Details)
97: R81 Share-Based Compensation - Narrative (Details) HTML 161K
98: R82 Share-Based Compensation - Allocation of HTML 55K
Stock-based Compensation (Details)
99: R83 Share-Based Compensation - Summary of Fair Value HTML 62K
Assumptions (Details)
100: R84 Share-Based Compensation - Summary of the Activity HTML 102K
for Stock Option Awards (Details)
101: R85 Share-Based Compensation - Summary of the Activity HTML 82K
for Nonvested Stock Option Awards (Details)
102: R86 Share-Based Compensation - Summary of the Activity HTML 100K
for Performance-Based Restricted Stock Units
(Details)
103: R87 Share-Based Compensation - Summary of Fair Value HTML 65K
Assumptions, Market Performance Units (Details)
104: R88 Share-Based Compensation - Summary of Activity for HTML 75K
Market Performance Units (Details)
105: R89 Share-Based Compensation - Summary of Employee HTML 54K
Stock Unit Award Grants (Details)
106: R90 Share-Based Compensation - Summary of the Activity HTML 82K
for Employee Stock Unit Awards (Details)
107: R91 Share-Based Compensation - Summary of Activity for HTML 57K
Warrants (Details)
108: R92 Interest Income and Other (Expense) Income, Net HTML 51K
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109: R93 Income Taxes - Narrative (Details) HTML 102K
110: R94 Income Taxes - Regional Income Before Income Taxes HTML 47K
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111: R95 Income Taxes - Components of Provision for Taxes HTML 70K
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112: R96 Income Taxes - Reconciliation of the Provision for HTML 83K
Taxes (Details)
113: R97 Income Taxes - Components of Deferred Tax Assets HTML 97K
and Liabilities (Details)
114: R98 Income Taxes - Summary of Changes in the Valuation HTML 46K
Allowance (Details)
115: R99 Income Taxes - Reconciliation of Gross HTML 47K
Unrecognized Tax Benefits (Details)
116: R100 Income Taxes - Liability for Uncertain Tax HTML 52K
Positions (Details)
117: R101 Commitments and Contingencies - Narrative HTML 125K
(Details)
118: R102 Commitments and Contingencies - Schedule of HTML 58K
Aggregate Minimum Annual Lease Payments (Details)
119: R103 Commitments and Contingencies - Schedule of HTML 53K
Purchase Commitments (Details)
120: R104 Commitments and Contingencies - Summary of Accrual HTML 54K
for Environmental Loss Contingencies (Details)
121: R105 Commitments and Contingencies - Schedule of HTML 53K
Liability for Deferred Compensation (Details)
122: R106 Commitments and Contingencies - Summary of HTML 66K
Earn-out Liability (Details)
123: R107 Concentration of Risk - Narrative (Details) HTML 60K
124: R108 Concentration of Risk - Schedule of Significant HTML 56K
Customers Accounting for at Least 10% of Net Sales
(Details)
125: R109 Segment Information - Narrative (Details) HTML 55K
126: R110 Segment Information - Net Sales Activity by HTML 51K
Segment (Details)
127: R111 Segment Information - Income (Loss) by Segment and HTML 85K
Reconciliation to Income Before Taxes (Details)
128: R112 Segment Information - Revenue by Product Line HTML 85K
(Details)
129: R113 Segment Information - Revenue by Geographic Region HTML 74K
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130: R114 Segment Information - Revenue by Country (Details) HTML 53K
131: R115 Segment Information - Long-lived Assets by Region HTML 50K
(Details)
132: R116 Restructuring - Narrative (Details) HTML 43K
133: R117 Restructuring - Restructuring Reserve Rollforward HTML 58K
(Details)
134: R118 Restructuring - Additional Contract Commitment HTML 47K
Cancellation Charges (Details)
135: R119 Stock Repurchase Program - Narrative (Details) HTML 45K
136: R120 Stock Repurchase Program - Summary of Stock HTML 49K
Repurchase Activities (Details)
137: R121 Derivatives and Hedging Activities (Details) HTML 51K
138: R122 Derivatives and Hedging Activities - Summary of HTML 51K
Outstanding Foreign Exchange Contracts (Details)
139: R123 Derivatives and Hedging Activities - Summary of HTML 55K
the Carrying Values of Derivative Instruments
(Details)
140: R124 Derivatives and Hedging Activities - Summary of HTML 64K
the Gain (Loss) Recognized from Derivative
Instruments (Details)
141: R125 Selected Quarterly Financial Data (Unaudited) - HTML 72K
(Details)
142: R126 Schedule II - Valuation And Qualifying Accounts HTML 49K
(Details)
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2013 LONG-TERM EQUITY INCENTIVE PLAN PERFORMANCE UNIT AWARD CERTIFICATE
THIS AWARD is made this [Grant Date] (the “Award Date”) by Semtech Corporation, a Delaware corporation (the “Corporation”), to [Legal Name] (the “Participant”).
R E C I T A L S
A. The Corporation has established the Corporation’s 2013 Long-Term Equity Incentive Plan, as amended from time
to time (the “Plan”) in order to provide employees and directors of the Corporation with an opportunity to acquire shares of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”).
B. The Administrator has determined that it would be in the best interests of the Corporation and its stockholders to grant the performance unit award (the “Award”) described in this Award Certificate to the Participant as compensation, as an inducement to remain in the service of the Corporation, and as an incentive for increasing efforts during such service.
NOW, THEREFORE, this Award is made on the following terms and conditions:
1.Definitions and Incorporation. Capitalized
terms used in this Award Certificate and not otherwise defined herein shall have the meanings given to such terms in the Plan. The Plan is hereby incorporated in and made a part of this Award Certificate as if fully set forth herein.
2. Award of Performance Units. Pursuant to the Plan, the Corporation hereby awards to the Participant as of the date hereof an Award with respect to [Amount] performance units (subject to adjustment in accordance with Section 7.1 of the Plan) (the “Performance Units”), which Performance Units are restricted and subject to forfeiture on the terms and conditions hereinafter set forth. As used herein, the term “performance unit” shall mean a non-voting unit of measurement which is deemed solely for purposes of calculating the amount
of payment under the Plan and this Award Certificate to be equivalent to one outstanding share of the Corporation’s Common Stock (subject to adjustment in accordance with Section 7.1 of the Plan). The Performance Units shall be used solely as a device for the determination of the payment to eventually be paid to the Participant if such Performance Units vest pursuant to Sections 4, 6 or 7 hereof. The Performance Units shall not be treated as property or as a trust fund of any kind. The Participant acknowledges that the Administrator may use a broker or other third party to facilitate its restricted stock unit award recordkeeping and agrees to comply with any administrative rules and procedures regarding restricted stock unit awards as may be in place from time to time. The Participant acknowledges and agrees that the Corporation may require that any Common Stock received under the Award be deposited in a brokerage account (in the name of the Participant) with a broker
designated by the Corporation, and the Participant agrees to take such reasonable steps as the Corporation may require to open and maintain such an account.
3. Rights as a Stockholder; Dividends and Voting.
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(a) Limitations on Rights Associated with Units. The Participant shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 3(b) below with respect to dividend equivalent rights) and no voting rights, with respect to the Performance Units and any shares of Common Stock underlying such Performance Units.
(b) Dividend
Equivalent Rights Distributions. In the event that the Corporation pays an ordinary cash dividend on its Common Stock and the related dividend payment record date occurs at any time after the Award Date and before all of the Performance Units subject to the Award have either been paid pursuant to Section 5 or terminated pursuant to Sections 4, 6 or 7, the Corporation shall credit the Participant as of such record date with an additional number of Performance Units equal to (i) the per-share cash dividend paid by the Corporation on its Common Stock with respect to such record date, multiplied by (ii) the total number of outstanding and unpaid Performance Units (including any dividend equivalents previously credited hereunder) (with such total number adjusted pursuant to Section 7.1 of the Plan and/or Section 12 hereof) subject to the Award as of such record date, divided by (iii) the fair market value of a share of Common Stock (as determined under
the Plan) on such record date. Any Performance Units credited pursuant to the foregoing provisions of this Section 3(b) shall be subject to the same vesting, payment and other terms, conditions and restrictions as the original Performance Units to which they relate. No crediting of Performance Units shall be made pursuant to this Section 3(b) with respect to any Performance Units which, as of such record date, have either been paid pursuant to Section 5 or terminated pursuant to Sections 4, 6 or 7.
4. Vesting.
(a) Subject to Sections 6 and 7 below, the Award shall vest and become nonforfeitable based on the Corporation’s achievement of the performance goals set forth on Exhibit A attached hereto for each Performance
Period (as defined in Exhibit A). The number of Performance Units that vest and become payable under the Award shall be determined based on the level of results or achievement of the targets set forth on Exhibit A.
(b) Subject to Sections 6 and 7, any Performance Units subject to the Award corresponding to a particular Performance Period that do not vest in accordance with Exhibit A hereto with respect to that Performance Period shall terminate as of the last day of that Performance Period (for clarity, after giving effect to the Administrator’s determination of performance for that Performance Period pursuant to Exhibit A).
(c) Except
as otherwise expressly provided herein, the Participant has no right to pro-rated vesting with respect to the Award if his or her Separation Date (as defined in Section 6) occurs before any applicable vesting date with respect to the Award (regardless of the portion of the vesting period the Participant was actually in the service of the Corporation and/or any of its subsidiaries).
(d) If any unvested Performance Units terminate pursuant to this Agreement, such Performance Units shall automatically terminate and be cancelled as of the applicable termination date without payment of any consideration by the Corporation and without any other action by the Participant, or the Participant’s beneficiary or personal representative, as the case may be.
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(e) The provisions of Sections 6 and 7 below supersede any provisions to the contrary in the Corporation’s Executive Change in Control Retention Plan as well as in any written offer letter, employment agreement or other agreement between the Participant and the Corporation. In the event of any inconsistency between this Agreement, on the one hand, and any such offer letter or employment agreement, or the Corporation’s Executive Change in Control Retention Plan, on the other hand, this Agreement shall control.
5. Timing and Manner of Payment of Performance Units. Subject to Section 8 below, upon or as soon as practicable after any Performance Units subject to the Award vest pursuant to Section 4, Section 6, Section
7, and/or Exhibit A, as applicable, and in all events by the 15th day of the third calendar month following the calendar month in which the applicable vesting date occurs, the Corporation shall deliver to the Participant a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Administrator in its discretion) equal to the number of Performance Units subject to the Award (including any Performance Units issued in respect of dividend equivalent rights) that vested on that vesting date. The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Performance Units is subject to the condition precedent that the Participant or other person entitled under the Plan to receive any shares or any such payment
with respect to the vested Performance Units deliver to the Corporation any representations or other documents or assurances required pursuant to Section 8.1 of the Plan. The Corporation may, in its sole discretion, either ignore fractional share interests or settle them in cash. For clarity, a particular Performance Unit may vest only once.
6. Effect of Termination of Employment or Services. If the Participant ceases to be employed by or ceases to provide services to the Corporation or any of its subsidiaries prior to the last day of a Performance Period, the following rules shall apply as to the Performance Units subject to the Award that correspond to such Performance Period (the last day that the Participant is employed by or provides services to the Corporation
or any of its subsidiaries is referred to as the Participant’s “Separation Date”).
(a) Other than as expressly provided below in this Section 6, the Participant’s Performance Units shall terminate on the Separation Date. For the avoidance of doubt, if the Separation Date occurs on or following the last day of a Performance Period but before the payment of any Performance Units for such Performance Period, the Participant shall remain eligible to receive payment of any Performance Units that vest for such Performance Period.
(b) If the Participant’s employment by the Corporation or any of its subsidiaries
is terminated in such a manner as would entitle the Participant to severance under the Corporation’s Executive Change in Control Retention Plan or a written offer letter or employment agreement between the Participant and the Corporation, and the Participant satisfies any release and other conditions to such severance benefits (such termination, a “Qualifying Termination”), the Participant shall remain eligible to vest in the Performance Units subject to the Award in accordance with Exhibit A as though the Separation Date had not occurred. If, after such a Separation Date but prior to the end of the applicable Performance Period, an Acceleration Event (as defined below) should occur, the fixed number of Performance Units determined under Section 7(a) below shall immediately vest and become payable upon the closing of the Acceleration Event without regard to Section 7(b) below.
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(c) If the Participant has a Qualifying Termination on or following an Acceleration Event, the remaining then outstanding fixed number of Performance Units determined under Section 7(a) below shall immediately vest and become payable upon the Severance Date.
7. Effect of Certain Corporate Transactions.
(a) In the event of the occurrence, at any time after the Award Date and prior to the end of the Performance Period, of an event described in Section 7.2 of the Plan (which generally covers certain mergers or similar reorganizations) that the Corporation does not survive (or does not survive as a public company in respect of
its Common Stock) (an “Acceleration Event”), then the number of Performance Units corresponding to each Performance Period under the Award that had not ended prior to the closing date of such Acceleration Event shall become “fixed” and no longer subject to performance measures after such Acceleration Event. For purposes of so fixing the number of Performance Units subject to each such Performance Period, the Performance Period shall be considered to end with the Acceleration Event and such number of Performance Units shall be determined in accordance with Exhibit A based on the Corporation’s performance for the shortened Performance Period(s). No adjustment shall be made pursuant to this Section 7(a) as to any Performance Period that ended prior to the date of the closing of the Acceleration Event. Furthermore, this Section 7 does not apply to any Performance Units that
terminate pursuant to Section 6 prior to the date of the closing of the Acceleration Event.
(b) If, in connection with such Acceleration Event, the Administrator has made a provision for the assumption of the Award or the Award would otherwise continue in accordance with its terms in the circumstances, a pro-rata portion of the fixed number of Performance Units determined pursuant to Section 7(a) above with respect to each Performance Period shortened pursuant to Section 7(a) above shall immediately vest and become payable upon the closing of the Acceleration Event, with such pro-rata portion calculated by multiplying such fixed number of Performance Units by a fraction, the numerator of which shall be the number of days that have elapsed from the beginning of the applicable Performance Period through and including the closing date of the Acceleration Event, and the denominator
shall be the total number of days in the applicable Performance Period. The Participant shall remain eligible to vest in the remaining (after giving effect to the preceding sentence) portion of the fixed number of Performance Units on the vesting date scheduled to occur at the end of the applicable Performance Period (as the Performance Period was originally scheduled to occur, without giving effect to any shortening of the Performance Period to occur pursuant to Section 7(a)), subject to Section 6.
(c) If the Award is to terminate in connection with such Acceleration Event and the Administrator has not made a provision for the assumption of the Award, the fixed number of Performance Units determined under Section 7(a) above shall immediately vest upon the closing of the Acceleration Event.
(d) For
purposes of this Section 7, an award shall be deemed to have been “assumed” if (without limiting other circumstances in which an award is assumed) the award continues after an Acceleration Event, and/or is assumed and continued by the surviving entity following such event (including, without limitation, an entity that, as a result of such event, owns the Corporation or all or substantially all of the Corporation’s assets directly or through one or more subsidiaries (a “Parent”)), and confers the right to purchase or receive, as applicable and subject to
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vesting and the other terms and conditions of the award, for each share of Common Stock subject to the award immediately prior to the event, the consideration
(whether cash, shares, or other securities or property) received in the event by the stockholders of the Corporation for each share of Common Stock sold or exchanged in such event; provided, however, that if the consideration offered for a share of Common Stock in the event is not solely the ordinary common stock of a successor corporation or a Parent, the Administrator may provide for the consideration to be received upon exercise or payment of the award, for each share subject to the award, to be solely ordinary common stock of the successor corporation or a Parent equal in fair market value to the per share consideration received by the stockholders participating in the event. Any acceleration of vesting upon an Acceleration Event may be deemed to occur immediately prior to such event in order to give effect to such acceleration.
(e) [Notwithstanding Section 7(b), if the Adjustment
Event occurs prior to September 1, 2018, the fixed number of Performance Units determined pursuant to Section 7(a) above shall immediately vest upon the closing of the Acceleration Event.] [Bracketed section to be included for Gary Beauchamp only.]
8. Section 409A. Notwithstanding anything to the contrary herein or in the Plan, if the Participant is a “specified employee” within the meaning of Section 409A, and, as a result of that status, any portion of the payments hereunder would otherwise be subject to taxation pursuant to Section 409A of the Code, the Participant shall not be entitled to any payments upon a separation from service until the earlier of (i) the date which is six (6) months after his or her separation from service for any reason other than death, or (ii)
the date of the Participant’s death; provided that the first such payment thereafter shall include all amounts that would have been paid earlier but for such six (6) month delay.
9. Non-transferability of Award. This Award is personal and, prior to the time they have become vested pursuant to Sections 4, 6 or 7 hereof, neither the Performance Units nor any rights hereunder may be transferred, assigned, pledged or hypothecated by the Participant in any way (whether by operation of law or otherwise), other than by will or the laws of descent and distribution, nor shall any such rights be subject to execution, attachment or similar process; provided, however, that such restrictions shall not apply to transfers to the Corporation. Except as otherwise provided herein, any attempted alienation, assignment, pledge, hypothecation, attachment, execution or similar
process, whether voluntary or involuntary, with respect to all or any part of the Participant’s unvested rights under this Award, shall be null and void.
10. No Right to Continued Employment or Service. Except as provided in Sections 6 and 7, the vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under the Award. Except as provided in Sections 6 and 7, employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of services as provided in Section 6 above. Nothing contained in the Plan or the Award constitutes a continued employment
or service commitment by the Corporation, confers upon the Participant any right to remain in the employ of or service to the Corporation, interferes with the right of the Corporation at any time to terminate such employment or services, or affects the right of the Corporation to increase or decrease the Participant’s other compensation. By
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accepting this Award, the Participant acknowledges and agrees that (a) any person who is terminated before full vesting of an award, such as the one granted to the Participant by this Award Certificate, could attempt to argue that he or she was terminated to preclude vesting; (b) the Participant promises never to make such a claim; and (c) except as otherwise expressly provided herein, in any event, the Participant has no right to pro-rated vesting with respect to the Award
if his or her service terminates before any applicable vesting date with respect to the Award (regardless of the portion of the vesting period the Participant was actually in the service of the Corporation and/or any of its subsidiaries).
11. Tax Consequences.
(a) Tax Consultation. The Participant understands that he or she may suffer adverse tax consequences as a result of his or her acceptance of the Award. The Participant represents that he or she has consulted with any tax consultants he or she deems advisable in connection with the acceptance of the Award and that he or she is not relying on the Corporation for any tax advice. By accepting this Award, the Participant
acknowledges that he or she shall be solely responsible for the satisfaction of any taxes that may arise (including taxes arising under Section 409A of the Code), and that the Corporation shall not have any obligation whatsoever to pay such taxes.
(b) Withholding. Upon any distribution of shares of Common Stock in respect of the Performance Units, the Corporation shall automatically reduce the number of shares of Common Stock to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy any withholding obligations of the Corporation or any of its subsidiaries with respect to
such distribution of shares at the applicable withholding rates. In the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Performance Units, the Corporation (or a subsidiary) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.
12. Adjustments Upon Specified Events. Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the Administrator shall make adjustments in accordance with such section in the number of Performance Units then outstanding and the
number and kind of securities that may be issued in respect of the Award. No such adjustment shall be made with respect to an ordinary cash dividend for which dividend equivalents are credited pursuant to Section 3(b).
13. Severability. In the event that any provision or portion of this Award Certificate shall be determined to be invalid or unenforceable for any reason, in whole or in part, in any jurisdiction, the remaining provisions of this Award Certificate shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law in such jurisdiction, and such invalidity or unenforceability shall have no effect in any other jurisdiction.
14. Binding Effect. This Award Certificate shall extend to, be
binding upon and inure to the benefit of the Participant and the Participant’s legal representatives, heirs, successors and
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assigns (subject, however, to the limitations set forth in Section 9 with respect to the transfer of this Award Certificate or any rights hereunder or of the Performance Units), and upon the Corporation and its successors and assigns, regardless of any change in the business structure of the Corporation, be it through spinoff, merger, sale of stock, sale of assets or any other transaction.
15. Notices. Any notice to the Corporation contemplated by this Award Certificate shall be addressed to it in care of its President; and any notice to the Participant shall be addressed
to him or her at the address on file with the Corporation on the date hereof or at such other address as he or she may hereafter designate in writing.
16. Entire Agreement. This Award Certificate, together with the Plan, constitutes the entire understanding between the Corporation and the Participant with regard to the subject matter of this Award Certificate. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter of this Award Certificate.
17. Waiver. The waiver of any breach of any duty, term or condition of this Award Certificate shall not be deemed to constitute a waiver of any preceding or succeeding breach of the same or of any
other duty, term or condition of this Award Certificate.
18. Interpretation. The interpretation, construction, performance and enforcement of the terms and conditions of this Award Certificate and the Plan shall lie within the sole discretion of the Administrator, and the Administrator’s determinations shall be conclusive and binding on all interested persons.
19. Choice of Law; Arbitration. This Award Certificate shall be governed by, and construed in accordance with, the laws of the State of Delaware (disregarding any choice-of-law provisions). Any dispute or disagreement regarding the Participant’s rights under this Award Certificate shall be settled solely by binding arbitration in accordance with applicable rules of the American Arbitration
Association.
20. Construction. It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code. This Award Certificate shall be construed and interpreted consistent with that intent.
Subject to Sections 6 and 7, the Award shall vest and become nonforfeitable as set forth below:
•
One-third of the total number of
Performance Units subject to the Award (the “Fiscal 2018 Target Performance Units”) shall be eligible to vest and become payable based on the Corporation’s Relative TSR Percentage for the Corporation’s fiscal year 2018 (the “Fiscal 2018 Performance Period”), with such number determined by multiplying the Fiscal 2018 Target Performance Units by the applicable percentage determined in accordance with the following table.
•
One-third of the total number of Performance Units subject to the Award (the “Fiscal 2018-2019 Target Performance Units”) shall be eligible to vest
and become payable based on the Corporation’s Relative TSR Percentage for the two-year performance period consisting of the Corporation’s 2018 and 2019 fiscal years (the “Fiscal 2018-2019 Performance Period”), with such number determined by multiplying the Fiscal 2018-2019 Target Performance Units by the applicable percentage determined in accordance with the following table.
•
One-third of the total number of Performance Units subject to the Award (the “Fiscal 2018-2020 Target Performance Units”) shall be eligible to vest and become payable based on the Corporation’s Relative TSR Percentage for the three-year
performance period consisting of the Corporation’s 2018, 2019 and 2020 fiscal years (the “Fiscal 2018-2020 Performance Period”), with such number determined by multiplying the Fiscal 2018-2020 Target Performance Units by the applicable percentage determined in accordance with the following table.
Relative TSR Percentage for the Applicable Performance Period
Applicable Percentage for that Performance Period
Less than -30%
0%
-30%
25%
-20%
50%
0%
100%
25%
150%
50%
or greater
200%
For a Relative TSR Percentage between the levels indicated for a particular performance period, the applicable percentage for that Performance Period will be determined pro-rata on a straight-line basis between the two closest points listed in the table above.
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Notwithstanding the foregoing, if the Corporation’s TSR for a particular Performance Period is a negative number, the applicable percentage for that Performance Period shall in no case be greater than 100%.
Defined
Terms. For purposes of this Exhibit A, the following definitions shall apply:
“Relative TSR Percentage” means the Corporation’s TSR for the applicable Performance Period as compared to the TSR achieved by the Index during the applicable Performance Period, expressed as a percentage.
“Index” means the SPDR S&P Semiconductor ETF (NYSE: XSD).
“Performance Period” means either the Fiscal 2018 Performance Period, the Fiscal 2018-2019 Performance Period, or the Fiscal 2018-2020 Performance Period, as applicable.
“TSR”
means total stockholder return and shall be determined with respect to the Corporation and the Index for a particular Performance Period by dividing: (a) the applicable Ending Price for such Performance Period by (b) the applicable Beginning Price for such Performance Period. For purposes of determining TSR, the value of dividends and other distributions shall be determined by treating them as reinvested in additional shares at the closing market price on the date of distribution. Any non-cash distributions shall be valued at fair market value.
“Beginning Price” means, with respect to the Corporation and the Index for a particular Performance Period, the average of the closing market prices of the Corporation’s Common Stock or shares of the Index, as applicable, on the principal exchange on which such shares are traded for the period of thirty (30) consecutive trading days ending
with the last trading day immediately prior to the beginning of such Performance Period. As to a share which goes ex-dividend during such thirty (30) day period, the closing market prices as to such share for the portion of such period preceding the ex-dividend date shall be equitably and proportionately adjusted to exclude the amount of the related dividend.
“Ending Price” means, with respect to the Corporation and the Index for a particular Performance Period, the average of the closing market prices of the Corporation’s Common Stock or shares of the Index, as applicable, on the principal exchange on which such shares are traded for the period of thirty (30) consecutive trading days ending with the last trading day of such Performance Period. As to a share which goes ex-dividend during such thirty (30) day period, the closing market prices as to such share for the portion of
such period preceding the ex-dividend date shall be equitably and proportionately adjusted to exclude the amount of the related dividend.
Effect of an Acceleration Event. Upon an Acceleration Event, the Ending Price for the purpose of determining the Corporation’s TSR shall equal the transaction price per share of the Common Stock paid in connection with such Acceleration Event. The Ending Price for the purpose of determining the Index’s TSR shall be determined as otherwise provided above but measured based on the average of the closing market prices of the Index’s shares on the principal exchange on which such shares are traded for the period of thirty (30) consecutive trading days ending with the last trading day immediately prior to the date of the closing of such Acceleration Event.
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Adjustment. With respect to the computation of TSR, Beginning Price, and Ending Price, there shall also be an equitable and proportionate adjustment to the extent (if any) necessary to preserve the intended incentives of the awards and mitigate the impact of any stock split, stock dividend or reverse stock split occurring during the applicable year.
Determination. In the event of any ambiguity or discrepancy, the determination of the Administrator shall be final and binding. Subject to Sections 6 and 7 of the Agreement, any Performance Units corresponding to a particular Performance Period that vest with respect to that Performance Period pursuant to this Exhibit A
shall be considered to have vested as of the last day of that Performance Period.
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Dates Referenced Herein and Documents Incorporated by Reference