Attached files
file | filename |
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EX-10.1 - EX-10.1 - TEKELEC | v59634exv10w1.htm |
EX-10.2 - EX-10.2 - TEKELEC | v59634exv10w2.htm |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 31, 2011
TEKELEC
California | 000-15135 | 95-2746131 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
5200 Paramount Parkway, Morrisville, North Carolina | 27560 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (919) 460-5500
(Former name or former address, if changed since last report.)
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):
o | Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | 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. |
1 | |||
Item 9.01 Financial Statements and Exhibits |
4 |
Exhibit 10.1
Exhibit 10.2
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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.
Effective May 31, 2011, the Board of Directors (the Board) of Tekelec (the Company)
appointed Ronald J. de Lange as the Companys President and Chief Executive Officer and as a member of the Board. On the same
date, Krish Prabhu resigned as the Companys interim President and Chief Executive Officer and as a
director of the Company. On March 31, 2011, Mr. Prabhu had notified the Company that he intended
to resign from his officer and director positions once the Board appointed a new President and
Chief Executive Officer. Please see the Companys Current Report on Form 8-K (File No. 000-15135)
dated March 31, 2011, as filed with the Securities and Exchange Commission (the SEC) on April 6,
2011,
Mr. de Lange joined the Company as President and General Manager, Network Signaling Group in
July 2005. He served in that capacity until October 2007 when he became Executive Vice President,
Global Product Solutions. From 1980 until March 2005, Mr. de Lange held various technical and
management positions with Lucent Technologies, where he most recently served as Vice President,
Convergence Solutions from January 2004 until March 2005 and as Vice President and General Manager,
OPENet Solutions from June 2001 until December 2003. Mr. de Lange is 52 years old.
In connection with Mr. de Langes appointment as the Companys President and Chief Executive
Officer, the Board, upon recommendation of the Compensation Committee of the Board (the
Compensation Committee), (i) established an annual base salary for Mr. de Lange of $450,000 and
(ii) determined that for purposes of the Companys 2011 Officer Bonus Plan, Mr. de Lange will be
eligible to receive up to 100% of his annual base salary pro-rated for the portion of 2011 during
which Mr. de Lange serves as President and Chief Executive Officer (i.e., he will be entitled to
receive up to $262,500 for the period during which he serves as President and Chief Executive
Officer) and up to 60% of his annual base salary pro-rated for the portion of 2011 during which he
served as Executive Vice President, Global Product Solutions (i.e., he will be entitled to receive
up to approximately $77,500 for the period during which he served as Executive Vice President,
Global Product Solutions). Mr. de Lange is also designated as an Eligible Officer under the
Companys 2011 Officer Severance Plan (the 2011 Plan), which is included as Exhibit 10.2 to this
Current Report on Form 8-K (this Form 8-K) and is incorporated by reference herein. Under the
2011 Plan, Mr. de Lange will be entitled to receive severance compensation equal to 200% of his
annual base salary in the event of the termination of employment under circumstances specified in
the 2011 Plan, which amount would be increased to 200% of the total amount of his annual base
salary and target bonus in the event of a termination in connection with a change of control of the
Company. In the event of a qualifying termination in connection with a change of control, the 2011
Plan also provides for the accelerated vesting of certain equity awards.
In connection with Mr. de Langes appointment, the Compensation Committee also approved the
grant to Mr. de Lange under the Companys Amended and Restated 2003 Equity Incentive Plan (the
2003 Plan ) of restricted stock units (RSUs) covering 75,000 shares of the
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Companys Common Stock. The RSUs will vest on May 31, 2015 (i.e., the fourth anniversary of
the date of grant), subject to Mr. de Langes continued employment with the Company through the
vesting date. The Company also agreed to grant to Mr. de Lange, effective on the second trading
day following the date on which the Company publicly announces his appointment (i.e., effective on
June 2, 2011), 100,000 stock-settled share appreciation rights (SARs). The SARs will have a
grant price equal to the closing sales price of the Companys Common Stock on the date of grant and
will vest in four equal annual installments commencing on the one-year anniversary of the grant
date, subject to Mr. de Langes continued employment with the Company through the applicable
vesting date. The RSUs and SARs are subject to customary terms and conditions which are set forth
in the 2003 Plan and in the forms of Restricted Stock Unit Award Agreement and SAR Award Agreement
attached to the 2003 Plan. The 2003 Plan is included as Exhibit 10.1 to the Companys Current
Report on Form 8-K (File No. 000-15135) dated May 16, 2008, as filed with the SEC on May 22, 2008.
There are no arrangements or understandings between Mr. de Lange and any other persons
pursuant to which he was appointed as a director of the Company. There
are no related party transactions between the Company and Mr. de Lange that are required to be
disclosed under Item 404(a) of Regulation S-K.
2011 Officer Severance Plan
On May 31, 2011, the Board designated Ron de Lange, the Companys President and Chief
Executive Officer, as an eligible officer for purposes of the Companys 2011 Officer Severance
Plan (the 2011 Severance Plan). The 2011 Severance Plan serves as a successor to the Companys
2007 Officer Severance Plan, as amended (the 2007 Severance Plan), other than for those
individuals who, prior to May 13, 2011, had been designated as eligible officers by the Board under
the 2007 Severance Plan. As of the date hereof, Mr. de Lange is the only individual who has been
designated as an eligible officer for purposes of the 2011 Severance Plan.
General Severance Compensation. Under the 2011 Severance Plan, each executive officer of the
Company designated by the Board of Directors as an eligible officer for purposes of the 2011
Severance Plan is entitled upon termination of employment (other than in connection with a change
in control of the Company) to receive general severance compensation and benefits if the
termination is non-temporary and occurs under the circumstances specified in the 2011 Severance
Plan, including (in addition to other circumstances set forth in the 2011 Severance Plan) the
Companys termination of the officers employment as a result of a reduction in force or the
Companys divestiture of the operating unit in which an officer works. General severance benefits
will not be payable if termination occurs under certain other circumstances specified in the 2011
Severance Plan, including (in addition to other circumstances set forth in the 2011 Severance Plan)
as a result of the officers retirement or the Companys termination of the officer for cause (as
defined in the 2011 Severance Plan).
The general severance cash benefit payable to an eligible officer is equal to his or her base
salary multiplied by a percentage specified in the 2011 Severance Plan (ranging from 100% to 200%,
depending on the officers title). Base salary is defined in the 2011 Severance Plan as an
officers
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highest regular rate of annual base salary during the calendar year in which termination
occurs. General severance benefits are payable in equal monthly installments over the applicable
severance period specified in the 2011 Severance Plan (ranging from 12 months to 24 months,
depending on the officers title, and subject to adjustments in timing to avoid certain adverse tax
consequences to the officer).
The general severance cash compensation that would be payable under the 2011 Severance Plan to
Mr. de Lange if his employment were terminated as of May 31, 2011 under circumstances entitling him
to severance benefits is approximately $900,000.
Change in Control Severance Compensation. In the event of any change in control of the
Company and in lieu of the general severance benefits described above, the 2011 Severance Plan
provides that if within the period commencing two months prior to and ending 18 months after a
change in control an eligible officer elects for good reason (as defined in the 2011 Severance
Plan) to terminate his or her employment with the Company (or an acquiror) or the officer is
terminated without cause (as defined in the 2011 Severance Plan), the officer will be entitled to
receive change in control severance compensation and benefits under the 2011 Severance Plan. The
2011 Severance Plan defines good reason to include (in addition to other circumstances set forth
in the 2011 Severance Plan) the reduction of an officers salary, the assignment to the officer of
duties inconsistent with his or her position prior to the change in control or the failure of an
acquiror to offer employment to the officer on terms and conditions generally no less favorable
than the terms and conditions of the officers employment prior to the change in control.
The change in control severance compensation payable to an eligible officer will be equal to
his or her annual compensation multiplied by a percentage specified in the 2011 Severance Plan
(ranging from 100% to 200%, depending on the officers title). Change in control cash severance
compensation is payable in one lump sum following termination of employment, subject to adjustments
in timing to avoid certain adverse tax consequences to the officer.
The change in control severance cash compensation that would be payable under the 2011
Severance Plan to Mr. de Lange if his employment were terminated as of May 31, 2011 under
circumstances entitling him to such benefits is approximately $1,580,000, which reflects his pro-rated bonus amounts for 2011.
If within the period commencing two months prior to and ending 18 months after a change in
control, (1) an eligible officer is not offered employment with the acquiror on terms and
conditions generally no less favorable than the terms and conditions of his or her employment prior
to the change in control, or (2) an eligible officers employment is terminated by the Company or
an acquiror without cause or by the eligible officer for good reason, then the officers unvested
options, stock appreciation rights, restricted stock units and other rights to acquire securities
or property of the Company (or the acquiror), other than rights granted after the change in control
and rights subject to performance-based vesting, will automatically vest and, in the case of
exercisable rights, become exercisable in full for a period of one year following the change in
control (in the case of an officer who is not offered comparable employment) or termination of
employment (in the case of an officer who is terminated without cause or who terminates for good
reason within the specified time period), subject in all cases to earlier expiration of the rights
in accordance with their terms.
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Health Care Insurance Continuation. General severance benefits and change in control
severance benefits include Tekelecs reimbursement of an eligible officers premium payments for
the continuation of insurance coverage pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1985 for the officer and his or her qualifying beneficiaries for a period of from 12 to 24
months following termination, depending on the officers position.
As a condition of receiving general or change in control severance benefits, an officer must
sign a severance agreement that includes, among other provisions, a release of claims he or she may
have against us and post-termination non-solicitation, non-disparagement and non-compete
provisions.
The foregoing description of the 2011 Severance Plan is qualified in its entirety by reference
to the copy of the 2011 Severance Plan which is filed as Exhibit 10.2 to this Current Report on
Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
The following Exhibits are filed as a part of this Current Report on Form 8-K:
Exhibit No. | Description | |||
10.1 | Offer Letter Agreement effective May 31, 2011 between the
Company and Ronald J. de Lange |
|||
10.2 | 2011 Officer Severance Plan |
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SIGNATURES
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.
Tekelec |
||||
Dated: May 31, 2011 | By: | /s/ Stuart H. Kupinsky | ||
Stuart H. Kupinsky | ||||
Senior Vice President, Corporate Affairs and General Counsel |
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