- Current report filing (8-K)
March 15 2012 - 6:06AM
Edgar (US Regulatory)
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
March 9, 2012
Date of Report (Date of earliest event reported)
CYPRESS
SEMICONDUCTOR CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware
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110079
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94-2885898
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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198 Champion Court
San Jose, California 95134-1599
(Address of principal executive offices)
(408) 943-2600
(Registrants telephone number, including area code)
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 (see General Instruction A.2. below):
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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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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
2012 Performance-based Restricted Stock (PARS) Program.
On March 9, 2012, the Compensation Committee of the Board of Directors of Cypress Semiconductor Corporation (the
Company) approved the issuance of certain performance-based restricted stock units to the Companys named executive officers (the 2012 PARS Program). This is the first equity grant to our named executive officers since
2007. Under the 2012 PARS Program, restricted stock units will be granted on an annual basis, rather than a multi-year basis, so that the participants and number of shares underlying the program can be adjusted annually, if needed, to reflect
individual performance and market conditions.
There are three (3) levels of grants under the 2012 PARS Program; the Core
Grant, the Tier 1 Grant and the Tier 2 Grant. The number of shares granted to each executive under the Core Grant has generally been reduced by 50% from the previous 2011 targeted PARS level. The number of shares targeted under the Tier 1 Grant is
equal to 50% of the Core Grant and the number of shares targeted for the Tier 2 Grant is 25% of the Core Grant. Assuming that all of the performance milestones are achieved at 100% for all three (3) grant levels, then the maximum number of
shares that can be earned is approximately 87.5% of the 2011 targeted PARS levels.
Equity grants made under the 2012 PARS
Program are subject to achieving various performance based milestones that are generally financial, market share, operational or strategic in nature and are approved in advance by the Compensation Committee. None of the milestones are service-based
or allow for any discretionary component.
The milestones for each grant level, as approved by the Compensation Committee, are
as follows:
Core Grant a company-wide scorecard of various individual milestones focused on financial results, cost
savings, gaining additional market share, introducing new products on specific schedules and implementing various operational and customer facing systems (Core Grant Scorecard). Each individual milestone is assigned a specific number of
points and each milestone has specific accomplishments that are documented in advance in order to achieve 100% of the milestone and scales down to a specific 0% point. The maximum number of points that can be achieved is 100 and there is no
discretionary component to the Core Grant Scorecard. In order for an executive to earn 100% of the shares underlying the Core Grant, the Company must obtain 90.0 points or greater under the Core Grant Scorecard and achievement then scales down
linearly to 0% of shares earned if the Core Grant Scorecard is less than 50.0 points.
Tier 1 Grant requires the
Company to achieve an approved design win during calendar year 2012 at a certain large multi-national consumer electronics company utilizing certain of the Companys new products (Tier 1 Targeted Design Win). In order for an
executive to earn 100% of the shares underlying the Tier 1 Grant, the Tier 1 Targeted Design Win dollar value must be greater than a specified multimillion dollar amount and achievement then scales down linearly to 0% of the shares earned if the
Tier 1 Targeted Grant Design Win is less than a specified dollar amount.
Tier 2 Grant requires the Company to grow its
2012 annual revenue at a year-over-year percentage rate (Annual Revenue Growth Rate) greater than a group of peer companies that it directly competes with. There are ten (10) companies, including Cypress, that comprise the peer
group and all companies have been agreed upon in advance by the Compensation Committee. To earn 100% of the shares underlying the Tier 2 Grant the Company would need to be ranked #1 out of 10 in the Annual Revenue Growth Rate. To earn 75%, 50% or
25% of the shares underlying the Tier 2 Grant, the Company would need to be ranked #2, #3, and #4, respectively, in the Annual Revenue Growth Rate. No shares can be earned if the Company is ranked #5 or below among the peer group.
Upon certification and confirmation by the Compensation Committee, which is expected to be during the first quarter of 2013, the Core
Grant and Tier 1 Grants will be delivered to each eligible participant subject to meeting the above described performance milestones. Upon certification and confirmation by the Compensation Committee that a grant has been earned under the Tier 2
Grant, such grant will then be subject to a further one year service-based cliff vesting prior to delivery to the participant.
The maximum number of shares that may be earned by each named executive officer under the
2012 PARS Program is as follows:
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Name
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Title
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2012 Core
Grant
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2012 Tier 1
Grant
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2012 Tier 2
Grant
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2012 Total
Target Grant
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T.J. Rodgers
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President and Chief Executive Officer
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329,618
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164,809
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82,404
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576,831
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Brad W. Buss
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Chief Financial Officer, Executive Vice President, Finance & Administration
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206,011
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103,005
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51,503
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360,519
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Paul D. Keswick
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Executive Vice President, New Product Development
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164,809
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82,405
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41,202
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288,416
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Christopher A. Seams
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Executive Vice President, Sales and Marketing
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164,809
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82,405
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41,202
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288,416
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Norman P. Taffe
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Executive Vice President, Consumer and Computation Division
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141,633
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70,816
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35,408
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247,857
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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CYPRESS SEMICONDUCTOR CORPORATION
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Date: March 14, 2012
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By:
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/s/
Brad W. Buss
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Brad W. Buss
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Chief Financial Officer, Executive Vice President, Finance and Administration
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