Cypress Announces Decision to Pursue Tax-Free Distribution of its SunPower Class B Common Shares
SAN JOSE, Calif.- Cypress Semiconductor Corporation (NYSE: CY) today announced that its Board of Directors has authorized management to proceed with a spin-off to Cypress’s shareholders of the Class B common shares of SunPower Corporation held by Cypress, with the objective of having the transaction completed by the end of 2008, or sooner if possible.
Cypress previously announced that on April 16, 2008, it had received a favorable ruling from the Internal Revenue Service with respect to certain tax issues arising under Section 355 of the Internal Revenue Code in connection with a potential spin-off transaction.
In connection with the proposed spin-off, the Cypress Board contemplates adjusting outstanding employee equity awards in a manner intended to preserve their intrinsic value as well as a possible tender offer for all or a portion of the company’s outstanding 1.00% convertible senior notes due September 2009. In addition, Cypress may dispose of a portion of its Class B common shares of SunPower prior to consummation of the proposed spin-off.
The proposed spin-off transaction is subject to completion of a number of steps and conditions, including final approval by the Cypress Board of Directors, and no assurance can be given that the proposed spin-off will be completed. In addition, no assurance can be given as to the number of shares which may be distributed, the costs or effects on Cypress and/or SunPower of effecting a spin-off, or the impact of a spin-off on trading prices for Cypress and/or SunPower common stock or Cypress’s employee equity plans and convertible debt.
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