Business Context and Reporting Period
Company: COHU INC
Filing Type: Form 8-K (Current Report)
Date of Report: December 23, 2008
Subject: Amendments to compensatory arrangements and plans to ensure compliance with Section 409A of the Internal Revenue Code of 1986.
Financial Metrics
This filing does not contain financial performance data. The document focuses exclusively on corporate governance and executive compensation plan amendments. No revenue, profit, cash flow, margin, debt, or liquidity figures are reported.
Material Changes
- Deferred Compensation Plans: The Compensation Committee approved amendments to the Cohu, Inc. Deferred Compensation Plan and the Retiree Health Benefits Agreement to comply with Section 409A documentation requirements. No new or additional benefits were provided.
- Change in Control Agreements (CIC): New CIC Agreements were approved for officers James A. Donahue, John H. Allen, and Jeffrey D. Jones. These agreements supersede prior Termination Agreements to meet Section 409A requirements and update terms.
Guidance, Outlook, and Management Commentary
Executive Severance Terms: Under the new CIC Agreements, eligible officers receiving a qualified separation of service related to a change in control are entitled to:
- Severance equal to two times annual base salary plus target annual incentive bonus.
- The current year's target annual incentive bonus, pro-rated to the date of termination.
- Reimbursement of health coverage and benefits for 24 months following termination.
- Immediate vesting of all outstanding and unvested equity awards.
- Extension of the post-termination exercise period for stock options to the earlier of 12 months or the original expiration date.
Conditions: Receipt of benefits is contingent upon the executive signing a release of claims agreement, including non-solicitation and non-disparagement provisions.
Key Facts for Investor Verification
- Verify the specific terms of the amended Deferred Compensation Plan and Retiree Health Benefits Agreement in Exhibit 10.1 and 10.2.
- Review the Change in Control Agreement in Exhibit 10.3 to confirm the definition of "change in control" and "qualified separation of service."
- Confirm that no additional financial liability was incurred beyond the existing contractual obligations for the officers named.