Exhibit 1.1
EXECUTION VERSION
ON SEMICONDUCTOR
CORPORATION
45,000,000 SHARES OF COMMON STOCK
($0.01 PAR VALUE)
UNDERWRITING
AGREEMENT
February 5, 2007
Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019
Dear Sirs and Mesdames:
TPG Semiconductor Holdings LLC, a
Delaware limited liability company, and TPG ON Holdings LLC, a
Delaware limited liability company (collectively, the “
Selling Shareholders ”), propose to sell to Lehman
Brothers Inc. (the “ Manager ”), on behalf of
the several Underwriters named in Schedule I hereto (together with
the Manager, the “ Underwriters ”), an aggregate
of 45,000,000 shares (the “ Shares ”) of the
common stock, $0.01 par value per share (the “ Common
Stock ”), of ON Semiconductor Corporation, a Delaware
corporation (the “ Company ”).
The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement on Form S-3
(No. 333-114045), including a prospectus, relating to the
registration of certain shares of Common Stock (the “
Shelf Securities ”), to be sold from time to time by
the Selling Shareholders. The registration statement as amended to
the date of this Agreement, including the information (if any)
deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A or Rule 430B under the
Securities Act of 1933, as amended (the “ Securities
Act ”), is hereinafter referred to as the “
Registration Statement ”, and the related prospectus
covering the Shelf Securities dated April 21, 2004 in the form
first used to confirm sales of the Securities (or in the form first
made available to the Underwriters by the Company to meet requests
of purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “ Basic Prospectus
”. The Basic Prospectus, as supplemented by the prospectus
supplement specifically relating to the Shares in the form first
used to confirm sales of the Shares (or in the form first made
available to the Underwriters by the Company to meet requests of
purchasers pursuant to Rule 173 under the Securities Act) is
hereinafter referred to as the “ Prospectus ”,
and the term “ preliminary prospectus ” means
any preliminary form of the Prospectus. For purposes of this
Agreement, “ free writing prospectus ” has the
meaning set forth in Rule 405 under the Securities Act, “
Time of Sale Prospectus ” means the preliminary
prospectus, if any, together with the free writing prospectuses, if
any, each identified in Schedule II hereto and the other
information, if any, identified in Schedule II hereto, and
“ broadly available road show ” means a
“bona fide electronic road show” as defined in Rule
433(h)(5) under the Securities Act that has been made available
without restriction to any person. As used herein, the terms
“Registration Statement”, “Basic
Prospectus”, “preliminary prospectus”,
“Time of Sale Prospectus” and
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“Prospectus” shall include the
documents, if any, incorporated by reference therein. If the
Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the “ Rule 462 Registration Statement
”), then any reference herein to the term “
Registration Statement ” shall be deemed to include
such Rule 462 Registration Statement. The terms “
supplement ,” “ amendment ,” and
“ amend ” as used herein with respect to the
Registration Statement, the Basic Prospectus, the Time of Sale
Prospectus, any preliminary prospectus or free writing prospectus
shall include all documents subsequently filed by the Company with
the Commission pursuant to the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), that are deemed
to be incorporated by reference therein.
1. Representations and Warranties
of the Company. The Company represents and warrants to and
agrees with each of the Underwriters that:
(a) The Company meets the
requirements for use of Form S-3 under the Securities Act. The
Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if
any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Time of Sale Prospectus or the
Prospectus complied or will comply when so filed in all material
respects with the Exchange Act and the applicable rules and
regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did
not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading,
(iii) the Registration Statement as of the date hereof does
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iv) the
Registration Statement complies, and the Prospectus, as of its
date, will comply, and the Registration Statement and the
Prospectus, as amended or supplemented, if applicable, as of the
Closing Date (as defined in Section 5), will comply, in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder, (v) the Time of
Sale Prospectus, at the time of the electronic communication of the
public offering price referred to in Schedule II hereto, will not,
and at the time of each sale of the Shares after the time of such
electronic communication in connection with the offering when the
Prospectus is not yet available to prospective purchasers, the Time
of Sale Prospectus, as then amended or supplemented by the Company,
if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, (vi) each broadly available
road show, if any, when considered together as a whole with the
Time of Sale Prospectus, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading and (vii) the Prospectus,
as of its date, will not contain and, as amended or supplemented,
if applicable, as of the Closing Date, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not
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misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements
or omissions in the Registration Statement, the Time of Sale
Prospectus or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter
through the Managers expressly for use therein.
(c) The Company is not an
“ineligible issuer” in connection with the offering
pursuant to Rule 164 under the Securities Act. Any free writing
prospectus that the Company is required to file pursuant to Rule
433(d) under the Securities Act has been, or will be, filed with
the Commission in accordance with the requirements of the
Securities Act and the applicable rules and regulations of the
Commission thereunder. Each free writing prospectus that the
Company has filed, or is required to file, pursuant to Rule 433(d)
under the Securities Act or that was prepared by or on behalf of or
used or referred to by the Company complies or will comply in all
material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder.
Except for the free writing prospectuses, if any, identified in
Schedule II hereto, and electronic road shows each furnished to you
before first use, the Company has not prepared, used or referred
to, and will not, without your prior consent, prepare, use or refer
to, any free writing prospectus.
(d) The Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the State of Delaware, has the corporate power
and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a
whole.
(e) Each subsidiary of the Company
has been duly incorporated or formed, is validly existing as a
corporation, limited liability company or similar entity in good
standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be, has all power and authority
necessary to own its property and to conduct its business as
described in the Time of Sale Prospectus and the Prospectus and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership
or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; all of the issued and outstanding
shares of capital stock, membership interests or other equity
interests of each subsidiary of the Company have been duly
authorized and validly issued; are, in the case of capital stock or
membership interests of subsidiaries organized under the United
States, fully paid and nonassessable or, in the case of membership
interests of any subsidiary of the Company that is a Delaware
limited liability company, are not subject to assessment by such
subsidiary of the Company for additional capital contributions; and
the shares of capital stock, membership interests or other equity
interests of each subsidiary owned by the Company, directly or
through subsidiaries (other than (i) those shares of capital
stock of Leshan-Phoenix Semiconductor Co., Ltd. that are owned by
minority shareholders, (ii) 60% of the shares of capital stock
of Amicus Realty Corporation and (iii) in the case of foreign
subsidiaries, directors’ qualifying shares or
shares
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required by applicable law to be held by a
person other than Semiconductor Components Industries, LLC, the
Company or a subsidiary thereof), are owned free from any security
interest, mortgage, pledge, lien or encumbrance, or defect
(collectively, “ Liens ”), except for
(A) Liens described in the Time of Sale Prospectus and the
Prospectus and (B) Liens pursuant to or contemplated by the
Amended and Restated Credit Agreement dated as of August 4,
1999, as amended and restated through the Closing Date
(collectively, the “ Permitted Liens
”).
(f) No consent, approval,
authorization, or order of, or filing with, any governmental agency
or body or any court is required for the consummation of the
transactions contemplated by this Agreement by the Company, except
(i) such as may be required by the securities or Blue Sky laws
of the various states in connection with the offer and sale of the
Shares or (ii) where the failure to obtain such consent,
approval, authorization, order or filing would not, singly or in
the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(g) Except as disclosed in the Time
of Sale Prospectus and the Prospectus, the Company and its
subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all other properties
and assets owned by them that is material to the business of the
Company and its subsidiaries, in each case free from Liens, except
Permitted Liens, that would materially and adversely affect the
value thereof or materially interfere with the use made or to be
made thereof by them.
(h) The Company and its subsidiaries
own, possess or can acquire on reasonable terms, the trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual
property (collectively, “ intellectual property rights
”) necessary to conduct the business now operated by them,
and have not received any notice of infringement of or conflict
with asserted rights of others with respect to any intellectual
property rights that, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a material
adverse effect on the Company and its subsidiaries, taken as a
whole, except in each case as described in the Time of Sale
Prospectus and the Prospectus.
(i) No labor dispute with the
employees of the Company or any of its subsidiaries exists, or, to
the knowledge of the Company, is imminent that would have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(j) The Company and its subsidiaries
possess all certificates, authorizations and permits issued by the
appropriate Federal, state or foreign regulatory authorities
necessary to conduct their respective businesses, and neither the
Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit that, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(k) The Company and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance, in all material
respects, that
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(1) transactions are executed in accordance
with management’s general or specific authorizations;
(2) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (3) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences; and
(4) transactions are recorded as necessary to prevent or
timely detect unauthorized acquisition, use or disposition of the
Company’s assets that could have a material effect on the
Company’s financial statements. Except as described in the
Time of Sale Prospectus and the Prospectus, since the most recent
audit of the effectiveness of the Company’s internal control
over financial reporting, there has been (i) no material
weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (ii) no change in
the Company’s internal control over financial reporting that
has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial
reporting.
(l) PricewaterhouseCoopers LLP are
independent certified public accountants with respect to the
Company as required by the Securities Act and the rules and
regulations of the Commission thereunder.
(m) This Agreement has been duly
authorized, executed and delivered by the Company.
(n) The authorized capital stock of
the Company conforms to the description thereof contained in the
Time of Sale Prospectus and the Prospectus.
(o) The shares of Common Stock
currently outstanding, including the Shares, have been duly
authorized and are validly issued, fully paid and
non-assessable.
(p) The execution and delivery by
the Company of, and the performance by the Company of its
obligations under, this Agreement and the offering and sale of the
Shares by the Selling Shareholders will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the
Company or any of their properties, or any agreement or instrument
to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to execute and deliver this
Agreement and perform its obligations hereunder, except for such
breaches, violations or defaults that would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole and except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and
sale of the Shares.
(q) No “nationally recognized
statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act (i) has
imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the
Company’s retaining any rating assigned to the Company or any
securities of the Company
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or (ii) has given notice to the Company
that it is considering (A) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not
indicate the direction of the possible change in, any rating so
assigned or (B) any change in the outlook for any rating of
Company or any securities of the Company.
(r) The financial statements
included in the Time of Sale Prospectus, the Prospectus or
Registration Statement present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown
and, except as disclosed therein, such financial statements have
been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent
basis.
(s) Except as disclosed in the Time
of Sale Prospectus and the Prospectus, since the date of the latest
audited financial statements included in the Time of Sale
Prospectus and the Prospectus, there has been no material adverse
change, or any development involving a prospective material adverse
change, in the condition (financial or otherwise) or in the
earnings, business or operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Time of Sale Prospectus and the Prospectus,
there has been no dividend or distribution of any kind declared,
paid or made by the Company on any class of its capital
stock.
(t) Except as disclosed in the Time
of Sale Prospectus and the Prospectus, there is no pending action,
suit or proceeding against or affecting the Company, any of its
subsidiaries or any of their respective properties that,
individually or in the aggregate, is reasonably likely to result in
a material adverse effect on the Company and its subsidiaries,
taken as a whole, or would materially and adversely affect the
ability of the Company to perform its obligations under this
Agreement, or which is otherwise material in the context of the
sale of the Shares; and, to the Company’s knowledge, there is
no such action, suit or proceeding threatened.
(u) Each preliminary prospectus, if
any, filed as part of the registration statement as originally
filed or as part of any amendment thereto, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules
and regulations of the Commission thereunder, except that no
representation is made as to the omission of the numbers of Shares
and other information derived from the foregoing, to the extent any
of the foregoing was omitted from the initial filing of the
Registration Statement.
(v) Neither the Company nor any of
its subsidiaries is an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to
be registered under Section 8 of the United States Investment
Company Act of 1940 (the “ Investment Company Act
”); and neither the Company nor any of its subsidiaries is
and, after giving effect to the sale of the Shares and the
application of the proceeds thereof as described in the Time of
Sale Prospectus and the Prospectus, will be an “investment
company” as defined in the Investment Company Act.
(w) Except as disclosed in the Time
of Sale Prospectus and the Prospectus or except as would, singly
and in the aggregate, not have a material adverse effect on the
Company and
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its subsidiaries, taken as a whole, the Company
and its subsidiaries (1) are in compliance with any and all
applicable foreign, Federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (“ Environmental Laws ”),
(2) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (3) are in compliance with all
terms and conditions of any such permit, license or
approval.
(x) Except as disclosed in the Time
of Sale Prospectus and the Prospectus, there are no costs or
liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for
cleanup, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties) that would, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole.
(y) There are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company or to require the Company to include such
securities with the Shares registered pursuant to the Registration
Statement, except as described in the Time of Sale Prospectus and
the Prospectus.
(z) Neither the Company nor any of
its subsidiaries is in violation of its respective charter or
by-laws or in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument, except
for such defaults that, singularly or in the aggregate, would not
reasonably be expected to have a material adverse effect on the
Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective property is
bound.
2. Representations and Warranties
of the Selling Shareholders. Each Selling Shareholder
represents and warrants to and agrees with each of the Underwriters
that:
(a) This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling
Shareholder.
(b) The execution and delivery by
such Selling Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement will not
contravene any provision of applicable law, or the certificate of
incorporation or By-laws of such Selling Shareholder (if such
Selling Shareholder is a corporation), or any agreement or other
instrument binding upon such Selling Shareholder or any judgment,
order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
Shares.
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(c) Such Selling Shareholder is the
record and beneficial owner of the Shares to be sold by such
Selling Shareholder hereunder and such Shares are free and clear of
all liens, encumbrances, equities and claims whatsoever and,
assuming that the Underwriters purchase such Shares without any
notice of any adverse claim (within the meaning of § 8-105 of
the Uniform Commercial Code as in effect in the State of New York),
upon the sale and delivery of, and payment for, such Shares as
provided herein, the Underwriters will own such Shares, free and
clear of all liens, encumbrances, equities and claims
whatsoever.
(d) Such Selling Shareholder has not
taken and will not take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of
the price of any security of the Company to facilitate the sale or
resale of the Shares.
(e) (i) Each part of the
Registration Statement, when such part became effective, did not
contain and, each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
(ii) the Time of Sale Prospectus does not, and at the time of
each sale of the Shares in connection with the offering when the
Prospectus is not yet available to prospective purchasers, the Time
of Sale Prospectus, as then amended or supplemented by the Company,
if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (iii) the Prospectus, as of
its date, will not contain and, as amended or supplemented, if
applicable, as of the Closing Date, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided that the representations and warranties set forth
in this paragraph 2(e) apply only to statements or omissions made
in reliance upon and in conformity with information furnished in
writing by such Selling Shareholder (or on such Selling
Shareholder’s behalf) to the Company or the Managers
expressly for use in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, the Prospectus or any
amendments or supplements thereto.
3. Agreements to Sell and
Purchase. Each Selling Shareholder hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly,
to purchase from such Selling Shareholder at $9.22 a share (the
“ Purchase Price ”) the number of Shares set
forth in Schedule I hereto opposite the name of such
Underwriter.
Each Selling Shareholder hereby
agrees that, without the prior written consent of the Managers on
behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 60 days after the date of
the Prospectus, (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock or (2) enter into
any swap or other arrangement that transfers to another, in whole
or in part, any of the economic consequences
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of ownership of the Common Stock, whether any
such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or such other securities,
in cash or otherwise. The foregoing sentence shall not apply to
(A) the Shares to be sold hereunder, (B) transfers of
shares of Common Stock or any security convertible into Common
Stock as a bona fide gift or gifts, (C) distributions of
shares of Common Stock or any security convertible into Common
Stock to the partners, shareholders or members of such Selling
Shareholder or its affiliates, (D) transfers and dispositions
between or among such Selling Shareholder, any of its affiliates
and any partners, shareholders or members of any of the foregoing,
(E) the sale of Common Stock by such Selling Shareholder under
existing plans or agreements entered into that establish plans
meeting the requirements of Rule 10b5-1 under the Exchange Act, for
the pre-arranged sale of shares of Common Stock or (F) the
sale of up to 15,000,000 shares of Common Stock to the
Company,
