8-K: Current report filing
Published on October 27, 2006
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported)
October
23, 2006
 MICROCHIP
TECHNOLOGY INCORPORATED
(Exact
Name Of Registrant As Specified In Its
Charter)
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Delaware
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0-21184
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86-0629024
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(State
Or Other Jurisdiction Of Incorporation)
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(Commission
File No.)
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(IRS
Employer Identification No.)
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2355
West Chandler Boulevard, Chandler, Arizona
85224-6199
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(Address
Of Principal Executive Offices)
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(480)
792-7200
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(Registrant’s
Telephone Number, Including Area
Code)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any
of the following provisions:
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¨
Written communications pursuant to Rule 425 under the Securities
Act (17
CFR 230.425)
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¨
Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR
240.14a-12)
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¨
Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act (17 CFR 240.14d-2(b))
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¨
Pre-commencement communications pursuant to Rule 13e-4(c) under
the
Exchange Act (17 CFR 240.13e-4(c))
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TABLE
OF CONTENTS
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Executive
Severance Agreements
On
October 23, 2006, the Board of Directors of Microchip Technology Incorporated
(the “Company”) authorized the Company to enter into Executive Severance
Agreements with the following executive officers of the Company:
Steve
Sanghi —President, Chief Executive Officer and Chairman of the
Board
Stephen
V. Drehobl —Vice President, Security, Microcontroller and Technology Development
Division
David
S.
Lambert —Vice President, Fab Operations
Mitchell
R. Little —Vice President, Worldwide Sales and Applications
Ganesh
Moorthy —Executive Vice President
Gordon
W.
Parnell —Chief Financial Officer and Vice President, Finance
Richard
J. Simoncic —Vice President, Analog and Interface Products Division
The
Executive Severance Agreements are not employment contracts and do not specify
an employment term, compensation levels or other terms or conditions of
employment. The Agreements provide for certain severance benefits to the
executive in the event his employment is terminated under specified
circumstances, as well as certain benefits upon a Change of Control (as defined
in the Agreement).
With
respect to the President and Chief Executive Officer, the Chief Financial
Officer and the Vice President of Worldwide Sales, if the executive’s employment
terminates for reasons other than Cause (as defined in the Agreement) within
the
Change of Control Period (as defined in the Agreement), the executive will
be
entitled to receive severance benefits consisting of the following primary
components:
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•
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a
one-time payment of his base salary in effect immediately prior
to the
Change of Control or termination date, whichever is greater, for
the
following periods: (1) in the case of the President and Chief
Executive Officer, two years; (2) in the case of the Chief Financial
Officer and the Vice President of Worldwide Sales, one year;
and
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•
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a
one-time payment of his bonuses for which he was or would have
been
eligible in the year in which the Change of Control occurred or
for the
year in which termination occurred, whichever is greater, for the
following periods: (1) in the case of the President and Chief
Executive Officer, two years; (2) in the case of the Chief Financial
Officer and the Vice President of Worldwide Sales, one year;
and
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•
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a
continuation of medical and dental benefits (subject to any required
employee contributions) for the following periods: (1) in the case
of the
President and Chief Executive Officer and the Chief Financial Officer,
two
years; (2) in the case of the Vice President of Worldwide Sales,
one year;
provided in each case that such benefits would cease sooner if
and when
the executive becomes covered by the plans of another employer;
and
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•
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a
payment to cover any excise tax that may be due under Section 4999
of the
Internal Revenue Code (the “Code”), if the payments provided for in the
Agreement constitute “parachute payments” under Section 280G of the Code
and the value of such payments is more than three times the executive’s
“base amount” as defined by Section 280G(b)(3) of the
Code.
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3
With
respect
to the executive officers named above other than the President and Chief
Executive Officer, the Chief Financial Officer and the Vice President of
Worldwide Sales, if the executive terminates his employment for Good Reason
(as
defined in the Agreement), or the executive’s employment is terminated for
reasons other than Cause (as defined in the Agreement) within the Change
of
Control Period (as defined in the Agreement), the executive will be entitled
to
receive severance benefits consisting of the following primary
components:
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•
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a
one-time payment of his base salary in effect immediately prior
to the
Change of Control or termination date, whichever is greater, for
one year;
and
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•
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a
one-time payment of his bonuses for which he was or would have
been
eligible in the year in which the Change of Control occurred or
for the
year in which termination occurred, whichever is greater, for one
year;
and
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•
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a
continuation of medical and dental benefits (subject to any required
employee contributions) for one year (provided in each case that
such
benefits would cease sooner if and when the executive becomes covered
by
the plans of another employer); and
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•
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a
payment to cover any excise tax that may be due under Section 4999
of the
Internal Revenue Code (the “Code”), if the payments provided for in the
Agreement constitute “parachute payments” under Section 280G of the Code
and the value of such payments is more that three times the executive’s
“base amount” as defined by Section 280G(b)(3) of the
Code.
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With
respect
to the executive officers named above other than the President and Chief
Executive Officer, the Chief Financial Officer and the Vice President of
Worldwide Sales, immediately upon termination during the Change of Control
Period other than for Cause (as defined in the Agreement) all equity
compensation held by the executive shall become fully vested.
The
Executive Severance Agreements were approved by both the Board of Directors
after considering the compensation levels and terms of the Company’s management
and the compensation practices of similarly situated companies. The Board
of
Directors views these Agreements as important steps in retaining and motivating
key management personnel in the event of a Change of Control.
Copies
of
the forms of Executive Severance Agreements, are attached as Exhibit 10.1
and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated by
reference herein. The foregoing summary of terms of the Executive Severance
Agreements is not complete and is qualified in its entirety by reference
to the
exhibits to this filing.
Promotion
of Executive Officer
On
October 23, 2006, the Company’s Board of Directors elected Mr. Moorthy as
Executive Vice President and increased his base salary to $225,000 effective
November 6, 2006.
Termination
of Prior Agreements
In
the
case of the President and Chief Executive Officer, the Chief Financial Officer
and the Vice President of Worldwide Sales, the Agreements described above
replace the existing agreements between the Company and such persons which
were
entered into on March 6, 1996, May 8, 2000, and January 17, 1996,
respectively, and provided for acceleration of the executive’s stock options in
the event of termination of employment in connection with a Change of Control
(defined in the agreements being terminated) unless such termination was
for
Cause (defined in the agreements being terminated.)
(d) Exhibits
4
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.
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Dated:
October 27, 2006
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Microchip
Technology Incorporated
(Registrant)
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By: /s/
Gordon W. Parnell
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Gordon
W. Parnell
Vice
President, Chief Financial Officer
(Principal
Accounting and Financial Officer)
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