UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM
CURRENT REPORT
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Emerging growth company
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| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed, ON Semiconductor Corporation and its wholly-owned subsidiary, Semiconductor Components Industries, LLC (collectively, the “Company”), are involved in various legal and administrative disputes relating to patent infringement and/or patent validity with Power Integrations, Inc. (“Power Integrations”). On October 4, 2019, the Company entered into a binding term sheet (the “Term Sheet”) with Power Integrations pursuant to which the parties agreed to withdraw all outstanding legal and administrative disputes. Pursuant to the Term Sheet, the Company agreed to pay Power Integrations $175.0 million in cash. In addition, each party agreed to release the other party from any claims to damages or monetary relief for alleged acts of patent infringement across the various patent infringement litigations and not to file any additional action for legal or equitable relief for a number of years. Neither party granted any licenses to the other. The Company believes that the settlement will likely result in meaningful cost savings due to the elimination of litigation costs.
Pursuant to the Term Sheet, the parties agreed to memorialize the terms of the Term Sheet in a definitive agreement (the “Definitive Agreement”) by no later than October 22, 2019. The foregoing description of the Term Sheet is not complete and is qualified in its entirety by reference to the full text of the Definitive Agreement which is expected to filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending December 31, 2019.
Subject to execution of the Definitive Agreement, the Company expects to recognize a one-time charge relating to the settlement with Power Integrations in the quarter ended September 27, 2019, which will adversely impact the Company’s GAAP results of operations, but which is not expected to impact the Company’s non-GAAP results of operations.
Cautionary Statement regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements related to the entry into and terms of the Definitive Agreement, expected cost savings as a result of the settlement, and the impact of the settlement on the Company’s GAAP and non-GAAP results of operations. Information concerning additional factors that could cause results to differ materially from those projected in the forward-looking statements is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission on February 20, 2019, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other of the Company’s filings with the Securities and Exchange Commission. These forward-looking statements are as of the date hereof and should not be relied upon as representing the Company’s views as of any subsequent date, and the Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, except as may be required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ON SEMICONDUCTOR CORPORATION | ||||||
| (Registrant) | ||||||
| Date: October 9, 2019 |
By: |
/s/ Bernard Gutmann | ||||
| Bernard Gutmann | ||||||
| Executive Vice President, Chief Financial Officer, and Treasurer |