UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Washington, DC 20549
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FORM 8-K
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CURRENT REPORT Pursuant to
Section 13 or 15(d) of the Securities
Exchange Act of 1934
Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 2015
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Silicon Graphics International Corp.
(Exact name of registrant as specified in its charter)
Silicon Graphics International Corp.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation)
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000-51333
(Commission file Number)
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32-0047154
(IRS Employer Identification Number)
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900 N. McCarthy Blvd., Milpitas, CA 95035
(Address of principle executive offices, including zip code)
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Kirk O. Williams
Corporate Secretary
669.900.8139
(Phone number, including area code, of the person to contact in connection with this report.)
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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:
££ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
££ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
££ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
££ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 5.02 Departure of Directors or Certain Officers; Election of Directors, Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensation Arrangements of Certain Officers
On August 12, 2015, the Compensation Committee of the Board of Directors of Silicon Graphics International Corp. (the “Company”) completed an annual performance and compensation review with respect to the Company’s named executive officers listed below and set fiscal 2016 base salaries, short term and long term incentive plan compensation arrangements.
Fiscal 2016 Base Salaries
The Compensation Committee determined that certain market adjustments were necessary and approved fiscal 2016 annual base salaries, effective as of the first business day of the fiscal third quarter, as noted below. Mr. Nikl did not receive any salary adjustment.
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Executive Officer
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Title
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FY16 Base Salary ($)
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Jorge Titinger
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President and CEO
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$605,000
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Cassio Conceicao
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EVP, COO
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$405,000
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Bob Nikl
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EVP, CFO
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$385,000
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Mekonnen Asrat
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Vice President and Corporate Controller
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$255,000
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Fiscal 2016 Short Term Incentive Plan
The Compensation Committee also established the fiscal 2016 short term incentive plan (“FY16 STIP”) as a performance-based incentive plan and determined target bonuses as a percentage of base salary, with target bonus amounts for each named executive officer noted below. The Compensation Committee did not adjust any target percentage amount for any named executive officer.
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Executive Officer
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FY15 STIP Target Percentage
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FY15 STIP Target ($)
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Jorge Titinger
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100%
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$605,000
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Cassio Conceicao
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75%
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$303,750
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Bob Nikl
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75%
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$288,750
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Mekonnen Asrat
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40%
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$102,000
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The FY16 STIP provides that bonuses are payable semi-annually based on semi-annual achievement of two key target indicators of Company performance: revenue and non-GAAP operating income. Under the FY16 STIP, for a bonus to be earned and payable for a given semi-annual period, the Company’s semi-annual revenue and non-GAAP operating income must each be within a range of respective percentages that includes threshold requirements of 80% of revenue and 75% of non- GAAP operating income, corresponding to a payout of 50%; and maximum targets of 120% of revenue and 125% of non-GAAP operating income, corresponding to a maximum payout of 200%. Achievement of the performance criteria results in a payout percentage determined in accordance with a payout matrix. Failure to meet the threshold requirements would result in no semi-annual bonus amounts being paid; provided, however, that at the end of fiscal 2016, the Compensation Committee will compare the aggregate percentage of the semi-annual bonus amounts paid during fiscal 2016 with actual revenue and non-GAAP operating income attained for fiscal 2016, and determine whether a “true-up” payment is required under the plan. A “true-up” payment would be made only if the semi-annual payments previously made are less than the payment that would have been made had the payment been made annually.
Fiscal 2016 Long Term Incentive Plan
As part of the Company’s compensation philosophy and strategy, the Compensation Committee also granted each named executive officer long term incentive compensation targeted at a percentage of overall compensation. The long-term incentive compensation target amounts for each named executive were calculated based on the sixty-day closing average of the Company’s stock price through August 7, 2015, capped at $8.11 per share. Such long-term incentive grants were comprised of 75% time-based restricted stock units (“RSUs”) and 25% performance-based restricted stock units (“PSUs”). Mr. Asrat did not receive a PSU grant for fiscal 2016.
Accordingly, the Compensation Committee granted each named executive officer RSUs and PSUs as follows:
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Executive Officer
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RSU Grant
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PSU Grant
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Jorge Titinger
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214,000
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71,500
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Cassio Conceicao
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75,500
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25,000
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Bob Nikl
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63,000
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21,000
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Mekonnen Asrat
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10,500
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The RSUs and PSUs have a grant date of August 12, 2015. The RSUs begin immediate, quarterly vesting over a period of four years, while the PSUs initially vest as to one-fourth of their amount on the day following Compensation Committee review of Company goal attainment for the fiscal year ending June 24, 2016. The PSU grants may be increased or decreased depending on the level of attainment by the Company of the performance metrics established by the Compensation Committee. In order for the PSUs to vest in full, the Company must meet metrics related to (i) total stockholder return (50% weighting) and (ii) two strategic objectives related to top line revenue and gross margin (25% weighting each). Achievement of the aforementioned performance criteria results in a vesting percentage determined in accordance with a payout matrix. At attainment of 50% or below, PSU vesting would be 0%. At 75% attainment, vesting would be 50%. At 100% attainment, vesting would be 100%. Attainment at 125% and above would result in 150% vesting. If the conditions for initial vesting of the PSUs are met, the remaining portion of the PSU grant would vest in twelve equal, successive quarterly installments over an additional three years, subject to continued service through each vesting date.
SIGNATURE
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, thereunto duly authorized.
| Dated: August 18, 2015 | Silicon Graphics International Corp. |
| By: /s/ Kirk O. Williams | |
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Kirk O. Williams
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Corporate Secretary
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