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Subsequent Events
9 Months Ended
Sep. 26, 2015
Subsequent Events [Abstract]  
Subsequent Events

NOTE 12.  Subsequent Events

On October 5, 2015, the Company entered into an Agreement and Plan of Merger  with Skyworks Solutions, Inc., a Delaware corporation (“Parent” or “Skyworks”), and Amherst Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of Parent (“Merger Sub”), which agreement was later amended and restated by the parties’ entry into the Amended and Restated Agreement and Plan of Merger on October 29, 2015 (as so amended and restated, the “Merger Agreement’) in response to an unsolicited bid from Microsemi Corporation. Under the Merger Agreement, Skyworks has agreed to acquire the Company for $11.60 in cash per share of the Company’s common stock.

Upon the terms and subject to the conditions of the Merger Agreement, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. In the Merger, each outstanding share of the Company’s common stock (the “ Company Common Stock ”), other than shares of Company Common Stock held in the treasury of the Company, shares of Company Common Stock owned by Parent or any subsidiary of Parent (including Merger Sub) or shares of Common Stock owned by stockholders who have validly exercised their appraisal rights under Delaware law, will be converted into the right to receive $11.60 per share in cash (the “Merger Consideration”) without interest and subject to any required withholding for taxes. Skyworks intends to fund the Merger Consideration with a combination of cash on hand and committed debt financing.

As a result of the Merger, (i) each vested in-the-money stock option and vested restricted stock unit will be cancelled in exchange for the right to receive the Merger Consideration (less any amounts required to be withheld and, in the case of options, the exercise price of such options), and (ii) each unvested stock option, out-of-the money stock option (whether vested or unvested) and unvested restricted stock unit (including unvested performance stock units, with target-level performance deemed achieved) will be assumed by Parent and converted, as applicable, into stock options and restricted stock units of Parent, on the basis of the Merger Consideration, adjusted pursuant to an exchange ratio based on Company and Parent’s relative stock prices prior to the Merger, which converted stock options and restricted stock units shall retain the same vesting terms (except that performance stock units will be subject only to time-based vesting conditions following the Merger).

Closing Conditions

The obligation of each party to consummate the Merger is subject to the satisfaction or waiver of customary closing conditions set forth in the Merger Agreement, including (i) the approval of the Merger Agreement and the Merger by stockholders of the Company owning at least a majority of the issued and outstanding shares of Company Common Stock, (ii) the expiration or termination of any applicable regulatory waiting periods and/or receipt of regulatory clearance, (iii) the absence of any order or ruling prohibiting the consummation of the Merger and (iv) subject to certain exceptions, the accuracy of the other party’s representations and warranties and compliance with covenants. In addition, the obligation of Parent and Merger Sub to consummate the Merger is also subject to the satisfaction or waiver of the condition that no material adverse effect on the Company shall have occurred since the date of the Merger Agreement. Skyworks’ and the Company’s obligations are not subject to any financing condition.

Representations and Warranties; Covenants

Each of the Company, Parent and Merger Sub has made customary representations and warranties and covenants in the Merger Agreement, including covenants to use their respective reasonable best efforts to secure required regulatory approvals, other than antitrust filings, which are governed by more detailed requirements. In addition, the Company has agreed to other customary covenants, including, among others, covenants to conduct its business in the ordinary course during the interim period between the execution of the Merger Agreement and the closing of the Merger, and not to solicit alternative transactions or, subject to certain exceptions, not to enter into discussions concerning, or provide confidential information in connection with, an alternative transaction, and Parent has agreed to other customary covenants, including, among others, covenants to use its reasonable best efforts to consummate the committed debt financing.

Termination and Termination Fees

The Merger Agreement contains certain termination rights for each of the Company and Parent, including, among others, if the Merger is not consummated at or prior to 11:59 p.m. (New York City time) on July 6, 2016, which may be extended by either the Company or Parent until October 5, 2016 if the mutual closing conditions set forth in the Merger Agreement relating to regulatory clearances have not yet been satisfied or waived. Upon termination of the Merger Agreement under specified circumstances, including a termination by the Company to enter into an agreement for an alternative transaction pursuant to a “superior proposal,” the Company has agreed to pay Parent a termination fee of $88.5 million.

 

The Company recorded acquisition-related costs of approximately $1.6 million, primarily for outside legal and financial advisory fees associated with the pending Skyworks acquisition of the Company in the three and nine months ended September 26, 2015.  Those costs were recorded in selling, general and administrative expenses in our unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 26, 2015.

 

The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amended and Restated Merger Agreement, which is attached as Exhibit 2.1 to the Form 8-K filed by the Company on October 30, 2015 and listed in the Exhibit Table of this filing.  The Company plans to file with the SEC and mail to our stockholders a proxy statement in connection with the Merger.  Additionally, the Company intends to file other relevant materials with the SEC in connection with the Merger. The proxy statement and other relevant materials will contain important information about the Company, Skyworks, the Merger and related matters.  Investors and stockholders are urged to read the proxy statement and the other relevant materials carefully when they become available before making any voting or investment decision with respect to the Merger.