Business Context and Reporting Period
This Form 8-K, filed on September 14, 2024, by Lattice Semiconductor Corporation (LSCC), reports the appointment of Ford Tamer as President and Chief Executive Officer (CEO), effective September 16, 2024. Mr. Tamer replaces Esam Elashmawi, who served as Interim CEO and will continue as Chief Strategy and Marketing Officer. Mr. Tamer has also been appointed to the Board of Directors.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation and appointment details.
Material Changes
The primary material change is the leadership transition at the executive level. Ford Tamer assumes the role of CEO and Board member, bringing prior experience as CEO of Inphi Corporation and Telegent Systems, and as a Senior Operating Partner at Francisco Partners.
Compensation, Outlook, and Risks
Compensation Package
- Base Salary: $800,000 annually.
- Annual Bonus: Target of 125% of base salary; maximum payout of 200% for fiscal year 2024 (prorated).
- Long-Term Incentives (Equity Awards):
- Fiscal Year 2024 Awards: $1.7 million in Restricted Stock (RS) and $1.7 million in Performance Stock Units (PSUs).
- Fiscal Year 2025 Awards: $5.0 million in RS and $5.0 million in PSUs.
- Sign-On Awards: $30.0 million aggregate target value in RS and PSUs to replace forfeited equity from Francisco Partners.
Performance Metrics for PSUs
- Total Shareholder Return (TSR): $11.7 million of PSU value is tied to TSR relative to the Russell 3000 Index over 3-year and 6-year periods, with a potential multiplier up to 250%.
- Revenue Growth: $10.0 million of PSU value is tied to year-over-year organic revenue growth, requiring outperformance of the Gartner Non-Memory Semiconductor Revenue Growth benchmark. Vesting ranges from 0% to 250% of target.
- Stock Price Appreciation: $10.0 million of PSU value is tied to a 6-year stock price appreciation goal, ranging from 25% to 250% of target shares based on price increases of 25% to 200%.
Severance and Change in Control
- Qualifying Termination (Outside Change in Control Period): 100% of base salary + 100% of target bonus; 12 months COBRA; accelerated vesting of time-based equity (12 months or 24 months if within 2 years of start).
- Qualifying Termination (During Change in Control Period): 200% of base salary + 200% of target bonus; 18 months COBRA; 100% accelerated vesting of time-based equity.
Risks and Contingencies
Equity awards are subject to forfeiture if Mr. Tamer does not remain employed as CEO through the applicable vesting dates. Payments may be subject to "golden parachute" excise taxes under Section 280G, with a "best net" provision to maximize after-tax benefits.
Investor Verification Checklist
- Verify the exact number of shares granted by reviewing the 30-day trailing average stock price calculation referenced in the Offer Letter (Exhibit 10.1).
- Confirm the specific vesting schedules and performance thresholds for the $30 million sign-on awards in the full award agreements.
- Review the definition of "Good Reason" and "Cause" in the Offer Letter to understand severance triggers.
- Monitor future filings for the impact of this leadership change on strategic direction and revenue growth targets.