8-K: Current report filing
Published on December 18, 2008
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)
December
16, 2008
 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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Executive
Severance Agreements
On
December 16, 2008, the Board of Directors of Microchip Technology Incorporated
(the “Company”) approved revised forms of Executive Severance Agreements (the
“Agreements”) for use with the executive officers of the Company. The
revisions (i) make technical changes to the Agreements intended to comply with
regulations and guidance under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and (ii) modify the Agreements in a manner
intended to ensure that the Company can deduct incentive bonus payments to the
executive officers under Section 162(m) of the Code. Prior to
amendment, the Agreements provided that following termination of employment
under certain conditions (as described below) within the three-month period
preceding or at any time following a Change of Control of the Company (the
“Change in Control Period”), the executive would be eligible to receive a
percentage of the executive’s target bonus for which he was or would have been
eligible the year of termination or, if greater, the year of the Change in
Control, in a lump-sum. As amended, in order to ensure compliance
with Section 162(m) of the Code, the Change in Control Period will end
twenty-four months following the Change in Control.
The
revised forms of Agreements will be entered into 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
J. Eric
Bjornholt —Chief Financial Officer and Vice President, Finance (effective
January 1, 2009)
Richard
J. Simoncic —Vice President, Analog and Interface Products Division
Copies of
the revised forms of 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 summary of the Agreements contained in this Form 8-K is
not complete and is qualified in its entirety by reference to the exhibits to
this filing.
The
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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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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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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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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a
payment to cover any excise tax that may be due under Section 4999 of the
Internal Revenue Code (the “Code”), plus any federal and state taxes
arising from the payment, 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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2
With
respect to the President and Chief Executive Officer, the Chief Financial
Officer and the Vice President of Worldwide Sales, immediately prior to a Change
of Control (regardless of whether the executive’s employment terminates), all
equity compensation held by the executive shall become fully
vested.
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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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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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”), plus any federal and state taxes
arising from the payment, 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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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 Agreements) all equity
compensation held by the executive shall become fully vested.
Termination/Amendment
of Prior Agreements
In the
case of Messrs. Sanghi, Little, Drehobl, Lambert, Moorthy and Simoncic, the
Agreements described above replace the existing executive severance agreements
between the Company and such persons which were entered into on or about October
23, 2006, as previously amended. In the case of Mr. Parnell, the
Company’s Chief Financial Officer and Vice President, Finance (until December
31, 2008), the Agreement described above was amended to terminate on December
31, 2009. In the case of Mr. Bjornholt (who, as previously announced,
will be the Company’s Chief Financial Officer and Vice President, Finance
effective January 1, 2009), the Agreement described above does not amend or
replace any prior agreement.
(d) Exhibits
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10.1
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Form of Executive Severance
Agreement
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10.2
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Form of Executive Severance
Agreement
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3
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:
December 18, 2008
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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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4
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10.1
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Form of Executive Severance
Agreement
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10.2
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Form of Executive Severance
Agreement
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5