SEC Company Response from SKYWORKS SOLUTIONS, INC. (SWKS) (CIK 0000004127) (SWKS) — Mar 22, 2012
SKYWORKS SOLUTIONS, INC. (SWKS) (CIK 0000004127)
Date: March 22, 2012 · CIK: 0000004127 · Accession: 0000004127-12-000014
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-5560
Referenced dates: February 23, 2012
Letter
seccommentletter32212
March 22, 2012
BY EDGAR SUBMISSION
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, NE
Washington, DC 20549
Attn: Mr. Kevin L. Vaughn, Accounting Branch Chief
Skyworks Solutions, Inc.
Form 10-K for the year ended September 30, 2011
Filed November 28, 2011
Amendment No. 1 to Form 10-K for the year ended September 30, 2011
Filed January 30, 2012
Form 10-Q for the quarterly period ended December 30, 2011
Filed February 7, 2012
File No. 001-5560
Ladies and Gentlemen:
Skyworks Solutions, Inc. (“Skyworks” or the “Company”), submits this letter in response to the comments regarding the above referenced filings contained in a letter dated February 23, 2012 from Kevin L. Vaughn of the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”), to David J. Aldrich, Chief Executive Officer of Skyworks. Our responses are set forth below and are keyed to the numbering of the comments and headings used in the Staff’s letter. For your reference, your comments are reproduced in italics and our responses are set forth below such comment in standard type.
The Company’s response is as follows:
United States Securities And Exchange Commission
March 22, 2012
Page 2
Form 10-K for the Fiscal Year Ended September 30, 2011
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation, page 24.
1.
We note your disclosures on page 26 related to the increase in your revenues. We further note that there is no indication of how unit volumes and/or changes in selling prices attributed to the increase. Please revise your future filings to separately quantify the effects of volume and pricing changes on your results of operations. Please also revise statements like the “growth in our core business” mentioned in your most recent Form 10-Q to explain clearly the causes underlying the changes you note. Further, when you attribute changes in your margin to shifting product mix, please revise to clarify how that mix has shifted. Refer to Item 303(a)(3)(iii) of Regulation S-K.
Response:
In future filings, the Company will expand its narrative discussion of material changes in revenues and margin to enhance its explanation of the causes underlying changes in the Company’s revenues and margin. In view of (1) the fact that the Company is continuously introducing new products, many of which have short life cycles, sometimes less than a year, and (2) the fact that the Company’s product portfolio is broad with high variability in selling prices, the quantification of aggregate changes in product price/mix and unit volumes on the Company’s results would not meaningfully enhance users' understanding of the results of operations. However, the Company will in future filings, provide a qualitative assessment on the relative effects of material changes in unit volume and product price/mix on its results of operations. The Company will also clarify how product mix has shifted when it attributes significant changes in its margin to such shifts.
Item 8. Financial Statements and Supplementary Data, page 36
Note 2. Summary of Significant Accounting Policies, page 42
-Share-Based Compensation, page 44
2.
We note your disclosures on page 45 that you utilize the Monte Carlo simulation method to fair value complex awards with market-based performance conditions. Please revise your future filings to disclose the significant assumptions utilized in this model and how the underlying assumptions were developed:
Response:
The Company supplementally advises the Staff that the complex share-based compensation awards with market-based performance conditions for which a Monte
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March 22, 2012
Page 3
Carlo simulation method was utilized have been fully expensed in prior periods and the Company no longer uses this method for current awards. In future filings, to the extent that the Company uses a Monte Carlo simulation to fair value complex share-based compensation awards with market-based performance conditions, the Company will disclose the significant assumptions underlying the Monte Carlo simulation method used, as well as how such assumptions were developed by the Company.
Note 5. Fair Value, page 49
3.
We note that you have recorded $59.4 million of contingent consideration liability related to your 2011 business combinations and classified this contingent consideration as Level 3 in the fair value hierarchy. We further note that you have utilized a discounted cash flow model and similar techniques to value this contingent consideration. Please revise your future filings to disclose the significant assumptions utilized in this model and how the underlying assumptions were developed.
Response:
In future filings, the Company will provide expanded disclosure of the underlying assumptions utilized in any discounted cash flow model (or any relevant similar techniques) utilized to value the contingent consideration liability related to the Company’s business combinations, as well as how such assumptions were developed by the Company.
Note 14. Contingencies, page 61
4.
We note your disclosures related to your outstanding litigations, claims, and assertions. Please revise your future filings to disclose the amount accrued, if any, related to these proceedings to the extent that it may be necessary for the financial statements not to be misleading. Please refer to 450-20-50-1 of the FASB Accounting Standards Codification.
Response:
In future filings, the Company will disclose the amount accrued, if any, related to its outstanding litigations, claims, and assertions, to the extent that such disclosure may be necessary for the Company’s financial statements not to be misleading, in accordance with 450-20-50 of the FASB Accounting Standards Codification.
The Company supplementally advises the Staff that the contingencies disclosed in Note 14 on Form 10-K for the year ended September 30, 2011 (the “Form 10-K”) were assessed by the Company prior to the filing. An estimated range of losses was quantified and deemed to be reasonably possible. None of the matters were considered to be probable, and accordingly, no amounts were accrued for the year-ended September 30,
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March 22, 2012
Page 4
2011. Further, the estimated range of losses, in aggregate, for outstanding contingencies disclosed in Note 14 was immaterial to the overall financial statements and as such, the amounts were not required to be disclosed.
5.
Further to the above, if there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, in your next periodic filing, please either disclose an estimate (or, if true, state that the estimate is immaterial in lieu of providing quantified amounts) of the additional loss or range of loss, or state that such an estimate cannot be made. Please refer to 450-20-50 of the FASB Accounting Standards Codification.
If you conclude that you cannot estimate the reasonably possible additional loss or range of loss, please supplementally: (1) explain to us the procedures you undertake on a quarterly basis to attempt to develop a range of reasonably possible loss for disclosure and (2) for each material matter, what specific factors are causing the inability to estimate and when you expect those factors to be alleviated. We recognize that there are a number of uncertainties and potential outcomes associated with loss contingencies. Nonetheless, an effort should be made to develop estimates for purposes of disclosure, including determining which of the potential outcomes are reasonably possible and what the reasonably possible range of losses would be for those reasonably possible outcomes.
You may provide your disclosures on an aggregated basis. Please include your proposed disclosures in your response.
Response:
The Company acknowledges the Staff’s comments and supplementally advises the Staff that the Company assesses outstanding contingencies for recognition and/or disclosure for each interim reporting period and in accordance with ASC 450-20. As discussed in the previous response, the estimated range of reasonably possible losses, in aggregate, for the outstanding contingencies described in Note 14 for Form 10-K, were immaterial to the overall financial statements and as such, the amounts were not required to be disclosed. In future filings, the Company will disclose the estimated loss or range of loss, where material, pertaining to reasonably possible contingencies or state the estimate is immaterial in lieu of providing quantified amounts.
Amendment No. 1 to Form 10-K filed January 30, 2012
Item 11. Executive Compensation, page 6
6.
Please tell us, and revise future filings to describe in more specific detail, how you determined the amounts actually paid pursuant to the cash incentive plan, including which goals were achieved and which were not. It is currently unclear from your
United States Securities And Exchange Commission
March 22, 2012
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disclosure how you determined the amounts and percentages you mention. Please also tell us, and revise future filings to clarify, what is meant by the reference to payments of “unrestricted common stock” in lieu of cash.
Response:
As described on pages 8 through 10 of the Company’s amendment No. 1 to Form 10-K for the year ended September 30, 2011 filed with the Commission on January 30, 2011 (the “Form 10-K/A”) and the paragraphs below, under the Company’s 2011 Executive Incentive Plan (the “Incentive Plan”) each named executive officer was eligible to earn short-term incentive compensation awards (“Short-term Comp”) on a semi-annual basis if certain performance goals established by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) were achieved.
In connection with each short term incentive compensation plan adopted by the Company (including the Incentive Plan), the Compensation Committee sets a range of Short-term Comp that can be earned by each executive officer pursuant to such plan, expressed as a percentage of the named executive officer’s base salary that corresponds to the level of achievement of the performance goals. The low end of that range, referred to as the “threshold” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive was at the minimum set by the Compensation Committee to be eligible to receive a payment for that goal under the Incentive Plan (referred to as the “threshold” level). Achievement of all performance goals at the “threshold” level would result in a Short-term Comp payout at the “threshold” percentage, which is designed to be less than the median Short-term Comp paid by the Company’s peer group. The middle of the range, referred to as the “target” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive met the expectations set by the Compensation Committee (referred to as the “target” level). Achievement of all performance goals at the “target” level would result in a Short-term Comp payout equal to “target” percentage, which is designed to be the median Short-term Comp paid by the Company’s peer group. The high end of the range, referred to as the “maximum” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive reached the high-end target set by the Compensation Committee for such goal. Achievement of all performance goals at the “maximum” level would result in a Short-term Comp payout at the “maximum” level, which is designed to be above to the median Short-term Comp paid by the Company’s peer group. Absent an exercise of discretion by the Compensation Committee, the total Short-term Comp paid to each executive would not exceed the “maximum” percentage and, in the event that the level of achievement of all performance goals was below the “threshold” level, no Short-term Comp payment would be made to the executive. For example (as noted on p. 9 of the Form 10-K/A), for the full-year fiscal 2011 the Short-term Comp range for each executive (expressed as a
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March 22, 2012
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percentage of each executive’s base salary) under the Incentive Plan was as follows:
Threshold
Target
Maximum
CEO
50.00%
100.00%
220.00%
Other NEOs
35.00%
70.00%
140.00%
The actual total amount of Short-term Comp payable to an executive depends on the level of achievement of each performance goal assigned to him. The performance goals are a mixture of Company-specific and business unit-specific goals, the per-executive composition of which is determined by the Compensation Committee. With respect to each executive, each performance goal assigned to that executive is given a weighting by the Compensation Committee that represents the percentage of the total Short-term Comp payable under the Incentive Plan to the executive if that performance goal is achieved. For example, (as noted on p. 9 of the Form 10-K/A) the weighting of the performance goals for each named executive officer for the first six months of fiscal 2011 under the Incentive Plan was as follows:
Non-
Non-GAAP
GAAP
Customer
Units
Operating
Gross
Satisfaction
Cash
Shipped
Revenue
Margin %
Margin %
Metric
Metric
Metrics
President and Chief Executive Officer; Vice President and Chief Financial Officer
30.00%
30.00%
20.00
%
10.00
%
10.00
%
N/A
Executive Vice President and General Manager, Front-End Solutions
30% (based on business unit)
40% (20% based on corporate and 20% based on business unit)
N/A
10.00
%
N/A
20.00
%
Executive Vice President and General Manager, High Performance Analog
40% (20% based on corporate and 20% based on business unit)
20% (based on business unit)
20.00
%
N/A
N/A
20.00
%
Senior Vice President, Worldwide Operations
30.00%
30.00%
20.00
%
10.00
%
10.00
%
N/A
The Compensation Committee then determines with respect to each performance goal the “threshold,” “target” and “maximum” levels of achievement, which correspond to the matching descriptions set forth above. For Company performance goals, the levels of achievement will be consistent across the executives to which such goals apply. The
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March 22, 2012
Page 7
Compensation Committee sets the performance goals, weightings and “threshold,” “target” and “maximum” levels of achievement on a semi-annual basis.
At the end of each six month period, the Compensation Committee determines the total amount of Short-term Comp payable to each executive for such period by comparing the actual level of achievement of each performance goal assigned to such executive against the “threshold,” “target” and “maximum” levels of achievement that it set for that performance goal. The Compensation Committee determines the amount of Short-term Comp the executive is eligible to receive with respect to each performance goal as follows:
•
If the level of achievement for that performance goal falls below the “threshold” level, then the executive will not earn any Short-term Comp with respect to that performance goal (absent an exercise of discretion by the Compensation Committee).
•
If the level of achievement for that performance goal is equal to the “threshold,” “target” or “maximum” level, then the executive earns the product obtained by multiplying (i) the “threshold,” “target” or “maximum” percentage, as applicable, times (ii) the execu
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CORRESP 1 filename1.htm seccommentletter32212 March 22, 2012 BY EDGAR SUBMISSION United States Securities and Exchange Commission Division of Corporation Finance 100 F Street, NE Washington, DC 20549 Attn: Mr. Kevin L. Vaughn, Accounting Branch Chief Skyworks Solutions, Inc. Form 10-K for the year ended September 30, 2011 Filed November 28, 2011 Amendment No. 1 to Form 10-K for the year ended September 30, 2011 Filed January 30, 2012 Form 10-Q for the quarterly period ended December 30, 2011 Filed February 7, 2012 File No. 001-5560 Ladies and Gentlemen: Skyworks Solutions, Inc. (“Skyworks” or the “Company”), submits this letter in response to the comments regarding the above referenced filings contained in a letter dated February 23, 2012 from Kevin L. Vaughn of the staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”), to David J. Aldrich, Chief Executive Officer of Skyworks. Our responses are set forth below and are keyed to the numbering of the comments and headings used in the Staff’s letter. For your reference, your comments are reproduced in italics and our responses are set forth below such comment in standard type. The Company’s response is as follows: United States Securities And Exchange Commission March 22, 2012 Page 2 Form 10-K for the Fiscal Year Ended September 30, 2011 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation, page 24. 1. We note your disclosures on page 26 related to the increase in your revenues. We further note that there is no indication of how unit volumes and/or changes in selling prices attributed to the increase. Please revise your future filings to separately quantify the effects of volume and pricing changes on your results of operations. Please also revise statements like the “growth in our core business” mentioned in your most recent Form 10-Q to explain clearly the causes underlying the changes you note. Further, when you attribute changes in your margin to shifting product mix, please revise to clarify how that mix has shifted. Refer to Item 303(a)(3)(iii) of Regulation S-K. Response: In future filings, the Company will expand its narrative discussion of material changes in revenues and margin to enhance its explanation of the causes underlying changes in the Company’s revenues and margin. In view of (1) the fact that the Company is continuously introducing new products, many of which have short life cycles, sometimes less than a year, and (2) the fact that the Company’s product portfolio is broad with high variability in selling prices, the quantification of aggregate changes in product price/mix and unit volumes on the Company’s results would not meaningfully enhance users' understanding of the results of operations. However, the Company will in future filings, provide a qualitative assessment on the relative effects of material changes in unit volume and product price/mix on its results of operations. The Company will also clarify how product mix has shifted when it attributes significant changes in its margin to such shifts. Item 8. Financial Statements and Supplementary Data, page 36 Note 2. Summary of Significant Accounting Policies, page 42 -Share-Based Compensation, page 44 2. We note your disclosures on page 45 that you utilize the Monte Carlo simulation method to fair value complex awards with market-based performance conditions. Please revise your future filings to disclose the significant assumptions utilized in this model and how the underlying assumptions were developed: Response: The Company supplementally advises the Staff that the complex share-based compensation awards with market-based performance conditions for which a Monte United States Securities And Exchange Commission March 22, 2012 Page 3 Carlo simulation method was utilized have been fully expensed in prior periods and the Company no longer uses this method for current awards. In future filings, to the extent that the Company uses a Monte Carlo simulation to fair value complex share-based compensation awards with market-based performance conditions, the Company will disclose the significant assumptions underlying the Monte Carlo simulation method used, as well as how such assumptions were developed by the Company. Note 5. Fair Value, page 49 3. We note that you have recorded $59.4 million of contingent consideration liability related to your 2011 business combinations and classified this contingent consideration as Level 3 in the fair value hierarchy. We further note that you have utilized a discounted cash flow model and similar techniques to value this contingent consideration. Please revise your future filings to disclose the significant assumptions utilized in this model and how the underlying assumptions were developed. Response: In future filings, the Company will provide expanded disclosure of the underlying assumptions utilized in any discounted cash flow model (or any relevant similar techniques) utilized to value the contingent consideration liability related to the Company’s business combinations, as well as how such assumptions were developed by the Company. Note 14. Contingencies, page 61 4. We note your disclosures related to your outstanding litigations, claims, and assertions. Please revise your future filings to disclose the amount accrued, if any, related to these proceedings to the extent that it may be necessary for the financial statements not to be misleading. Please refer to 450-20-50-1 of the FASB Accounting Standards Codification. Response: In future filings, the Company will disclose the amount accrued, if any, related to its outstanding litigations, claims, and assertions, to the extent that such disclosure may be necessary for the Company’s financial statements not to be misleading, in accordance with 450-20-50 of the FASB Accounting Standards Codification. The Company supplementally advises the Staff that the contingencies disclosed in Note 14 on Form 10-K for the year ended September 30, 2011 (the “Form 10-K”) were assessed by the Company prior to the filing. An estimated range of losses was quantified and deemed to be reasonably possible. None of the matters were considered to be probable, and accordingly, no amounts were accrued for the year-ended September 30, United States Securities And Exchange Commission March 22, 2012 Page 4 2011. Further, the estimated range of losses, in aggregate, for outstanding contingencies disclosed in Note 14 was immaterial to the overall financial statements and as such, the amounts were not required to be disclosed. 5. Further to the above, if there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, in your next periodic filing, please either disclose an estimate (or, if true, state that the estimate is immaterial in lieu of providing quantified amounts) of the additional loss or range of loss, or state that such an estimate cannot be made. Please refer to 450-20-50 of the FASB Accounting Standards Codification. If you conclude that you cannot estimate the reasonably possible additional loss or range of loss, please supplementally: (1) explain to us the procedures you undertake on a quarterly basis to attempt to develop a range of reasonably possible loss for disclosure and (2) for each material matter, what specific factors are causing the inability to estimate and when you expect those factors to be alleviated. We recognize that there are a number of uncertainties and potential outcomes associated with loss contingencies. Nonetheless, an effort should be made to develop estimates for purposes of disclosure, including determining which of the potential outcomes are reasonably possible and what the reasonably possible range of losses would be for those reasonably possible outcomes. You may provide your disclosures on an aggregated basis. Please include your proposed disclosures in your response. Response: The Company acknowledges the Staff’s comments and supplementally advises the Staff that the Company assesses outstanding contingencies for recognition and/or disclosure for each interim reporting period and in accordance with ASC 450-20. As discussed in the previous response, the estimated range of reasonably possible losses, in aggregate, for the outstanding contingencies described in Note 14 for Form 10-K, were immaterial to the overall financial statements and as such, the amounts were not required to be disclosed. In future filings, the Company will disclose the estimated loss or range of loss, where material, pertaining to reasonably possible contingencies or state the estimate is immaterial in lieu of providing quantified amounts. Amendment No. 1 to Form 10-K filed January 30, 2012 Item 11. Executive Compensation, page 6 6. Please tell us, and revise future filings to describe in more specific detail, how you determined the amounts actually paid pursuant to the cash incentive plan, including which goals were achieved and which were not. It is currently unclear from your United States Securities And Exchange Commission March 22, 2012 Page 5 disclosure how you determined the amounts and percentages you mention. Please also tell us, and revise future filings to clarify, what is meant by the reference to payments of “unrestricted common stock” in lieu of cash. Response: As described on pages 8 through 10 of the Company’s amendment No. 1 to Form 10-K for the year ended September 30, 2011 filed with the Commission on January 30, 2011 (the “Form 10-K/A”) and the paragraphs below, under the Company’s 2011 Executive Incentive Plan (the “Incentive Plan”) each named executive officer was eligible to earn short-term incentive compensation awards (“Short-term Comp”) on a semi-annual basis if certain performance goals established by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) were achieved. In connection with each short term incentive compensation plan adopted by the Company (including the Incentive Plan), the Compensation Committee sets a range of Short-term Comp that can be earned by each executive officer pursuant to such plan, expressed as a percentage of the named executive officer’s base salary that corresponds to the level of achievement of the performance goals. The low end of that range, referred to as the “threshold” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive was at the minimum set by the Compensation Committee to be eligible to receive a payment for that goal under the Incentive Plan (referred to as the “threshold” level). Achievement of all performance goals at the “threshold” level would result in a Short-term Comp payout at the “threshold” percentage, which is designed to be less than the median Short-term Comp paid by the Company’s peer group. The middle of the range, referred to as the “target” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive met the expectations set by the Compensation Committee (referred to as the “target” level). Achievement of all performance goals at the “target” level would result in a Short-term Comp payout equal to “target” percentage, which is designed to be the median Short-term Comp paid by the Company’s peer group. The high end of the range, referred to as the “maximum” percentage, is equal to the amount of compensation payable to the executive if the level of achievement of each performance goal applicable to the executive reached the high-end target set by the Compensation Committee for such goal. Achievement of all performance goals at the “maximum” level would result in a Short-term Comp payout at the “maximum” level, which is designed to be above to the median Short-term Comp paid by the Company’s peer group. Absent an exercise of discretion by the Compensation Committee, the total Short-term Comp paid to each executive would not exceed the “maximum” percentage and, in the event that the level of achievement of all performance goals was below the “threshold” level, no Short-term Comp payment would be made to the executive. For example (as noted on p. 9 of the Form 10-K/A), for the full-year fiscal 2011 the Short-term Comp range for each executive (expressed as a United States Securities And Exchange Commission March 22, 2012 Page 6 percentage of each executive’s base salary) under the Incentive Plan was as follows: Threshold Target Maximum CEO 50.00% 100.00% 220.00% Other NEOs 35.00% 70.00% 140.00% The actual total amount of Short-term Comp payable to an executive depends on the level of achievement of each performance goal assigned to him. The performance goals are a mixture of Company-specific and business unit-specific goals, the per-executive composition of which is determined by the Compensation Committee. With respect to each executive, each performance goal assigned to that executive is given a weighting by the Compensation Committee that represents the percentage of the total Short-term Comp payable under the Incentive Plan to the executive if that performance goal is achieved. For example, (as noted on p. 9 of the Form 10-K/A) the weighting of the performance goals for each named executive officer for the first six months of fiscal 2011 under the Incentive Plan was as follows: Non- Non-GAAP GAAP Customer Units Operating Gross Satisfaction Cash Shipped Revenue Margin % Margin % Metric Metric Metrics President and Chief Executive Officer; Vice President and Chief Financial Officer 30.00% 30.00% 20.00 % 10.00 % 10.00 % N/A Executive Vice President and General Manager, Front-End Solutions 30% (based on business unit) 40% (20% based on corporate and 20% based on business unit) N/A 10.00 % N/A 20.00 % Executive Vice President and General Manager, High Performance Analog 40% (20% based on corporate and 20% based on business unit) 20% (based on business unit) 20.00 % N/A N/A 20.00 % Senior Vice President, Worldwide Operations 30.00% 30.00% 20.00 % 10.00 % 10.00 % N/A The Compensation Committee then determines with respect to each performance goal the “threshold,” “target” and “maximum” levels of achievement, which correspond to the matching descriptions set forth above. For Company performance goals, the levels of achievement will be consistent across the executives to which such goals apply. The United States Securities And Exchange Commission March 22, 2012 Page 7 Compensation Committee sets the performance goals, weightings and “threshold,” “target” and “maximum” levels of achievement on a semi-annual basis. At the end of each six month period, the Compensation Committee determines the total amount of Short-term Comp payable to each executive for such period by comparing the actual level of achievement of each performance goal assigned to such executive against the “threshold,” “target” and “maximum” levels of achievement that it set for that performance goal. The Compensation Committee determines the amount of Short-term Comp the executive is eligible to receive with respect to each performance goal as follows: • If the level of achievement for that performance goal falls below the “threshold” level, then the executive will not earn any Short-term Comp with respect to that performance goal (absent an exercise of discretion by the Compensation Committee). • If the level of achievement for that performance goal is equal to the “threshold,” “target” or “maximum” level, then the executive earns the product obtained by multiplying (i) the “threshold,” “target” or “maximum” percentage, as applicable, times (ii) the execu