CYPRESS SEMICONDUCTOR CORPORATION (NASDAQ:CY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

CYPRESS SEMICONDUCTOR CORPORATION (NASDAQ:CY) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Item 5.02 Compensatory Arrangements of Certain Officers.

Story continues below

On December 3, 2018, Cypress Semiconductor Corporation (the "Company"), entered into an amended and restated change of control severance agreement with the following named executive officers of the Company: Thad Trent, EVP, Finance and Administration and Chief Financial Officer; Sam Geha, EVP, Memory Products; Sudhir Gopalswamy, EVP, Microcontroller & Connectivity; and Pamela Tondreau, EVP, Chief Legal and Human Resources Officer (each, an "Amended and Restated Change of Control Severance Agreement"). The form of Amended and Restated Change of Control Severance Agreement is attached hereto as Exhibit 10.1.

The Amended and Restated Change of Control Severance Agreement makes the following material changes to the terms of each officer's existing change of control severance agreement (the form of which appeared as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed August 9, 2016):

The period within which the executive may be eligible to receive severance upon an involuntary termination, other than for cause, death, or disability, or upon a voluntary resignation for good reason (each, a "Qualifying Termination") was revised to be the period commencing three months before a change of control and ending twenty-four months following such change of control (the "Change of Control Period"). Previously the Change of Control Period ended twelve months following a change of control.

Upon a Qualifying Termination within the Change of Control Period, (a) the executive shall be entitled to receive the following severance benefits and payments: (i) a lump-sum severance payment (less applicable withholdings) equal to eighteen (18) months of the executive's annual base salary plus eighteen (18) months of the executive's annual target bonus, and (ii) an additional lump-sum payment (less applicable withholdings) equal to the product of (x) eighteen (18) multiplied by (y) the monthly premium that would be required for the first month of the executive's COBRA premium, calculated on the assumption that the premium includes coverage for the executive and the executive's spouse and/or dependents; (b)performance-vesting equity compensation awards will vest assuming attainment of the underlying performance targets at 50% (or at the greater of actual performance levels or 50% of target levels if such Qualifying Termination occurs following the completion of the relevant performance period but before the relevant vesting date), unless the terms of such performance-vesting awards provide for different severance acceleration terms; and (c) the term of the non-disparagement and non-solicitation restrictive covenants for each executive will be eighteen (18) months immediately following the date of termination of employment. Previously the references to eighteen (18) in this paragraph were references to fourteen (14) and acceleration of performance-vesting awards was at the target level.

For Mr. Trent and Ms. Tondreau only, the definition of "Good Reason" was amended to address potential reductions in their duties and responsibilities following a change of control.

Outside of the Change of Control Period, upon an involuntary termination, other than for cause, death, or disability, (a) the executive shall be entitled to receive the following severance benefits and payments: (i) a lump-sum severance payment (less applicable withholdings) equal to nine (9) months of the executive's annual base salary, and (ii) an additional lump-sum payment (less applicable withholdings) equal to the product of (x) nine (9) multiplied by (y) the monthly premium that would be required for the first month of the executive's COBRA premium, calculated on the same assumptions as above; and (b) the term of the non-disparagement and non-solicitation restrictive covenants for each executive will be nine (9) months immediately following the date of termination of employment. Previously the agreement did not address terminations outside the Change of Control Period.

Also on December 3, 2018, the Company entered into an Amended and Restated Employment Agreement with the Company's President and Chief Executive Officer, Hassane El-Khoury (the "Amended and Restated Employment Agreement"), attached hereto as Exhibit 10.2. The Amended and Restated Employment Agreement amends Mr. El-Khoury's prior employment agreement (which appeared as Exhibit 10.41 to the Company's Annual Report on Form 10-K, filed March 1, 2017) and offer letter (which appeared as Exhibit 10.1 to the Company's Current Report on Form 8-K, filed August 12, 2016) to make the following material changes:

If Mr. El-Khoury's employment is terminated involuntarily by the Company, other than for "Cause," death, or disability, or by Mr. El-Khoury to a "Voluntary Termination for Good Reason" (as such terms are defined in the Amended and Restated Employment Agreement), performance-vesting equity compensation awards granted after the effective date of the Amended and Restated Employment Agreement will vest assuming attainment of the underlying performance targets at the 50% target level (or at the greater of actual performance levels or 50% of target levels if such termination occurs following the completion of the relevant performance period but before the relevant vesting date), unless the terms of such performance-vesting awards provide for different severance acceleration terms.

A "best pay" provision addressing "golden parachute" excise tax provisions under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), was added to the agreement to which any severance payment or other benefit payable to Mr. El-Khoury that constitutes a "parachute payment" within the meaning of Section 280G of the Code, shall be either: (i) delivered in full, or (ii) delivered as to such lesser extent that would result in no portion of such payment being subject to excise tax under Section 4999 of the Code. Mr. El-Khoury's employment agreement does not provide for any tax gross-up or other reimbursement payment in respect of "golden parachute" excise tax payments.

The descriptions above are qualified in their entirety by reference to the full texts of the form of Amended and Restated Change of Control Severance Agreement and the Amended and Restated Employment Agreement, which are filed as exhibits to this Current Report and are incorporated herein by reference.

Item 9.01 Exhibits.


CYPRESS SEMICONDUCTOR CORP /DE/ Exhibit
EX-10.1 2 changeofseveranceagreement.htm AMENDED AND RESTATED CHANGE OF CONTROL SEVERANCE AGREEMENT Exhibit Exhibit 10.1CYPRESS SEMICONDUCTOR CORPORATIONAMENDED AND RESTATEDCHANGE OF CONTROL SEVERANCE AGREEMENT This Amended and Restated Change of Control Severance Agreement (the “Agreement”) is made and entered into by and between _______ (the “Employee”) and Cypress Semiconductor Corporation,…
To view the full exhibit click here

About CYPRESS SEMICONDUCTOR CORPORATION (NASDAQ:CY)

Cypress Semiconductor Corporation delivers solutions from automotive, industrial and networking platforms to interactive consumer and mobile devices. The Company’s segments include Programmable Systems Division, Memory Products Division, Data Communications Division and Emerging Technologies Division. The Programmable Solutions Division designs and develops solutions for end-product manufacturers. The Memory Products Division designs and manufactures portfolio of high-performance memories for embedded systems. The Data Communications Division focuses on solutions for industrial, handset and consumer applications. The Emerging Technologies Division consists of its subsidiaries, AgigA Tech, Inc. and Deca Technologies, Inc. Its product portfolio includes NOR flash memories, Traveo microcontrollers, programmable system-on-chip solutions, CapSense capacitive touch-sensing controllers, and Wireless Bluetooth Low-Energy and universal serial bus (USB) connectivity solutions.

An ad to help with our costs