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
Date of report (Date of earliest
event reported): August 28, 2008
___________________
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SunPower
Corporation
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(Exact
Name of Registrant as Specified in
Charter)
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___________________
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Delaware
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000-51593
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94-3008969
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(State
or Other Jurisdiction
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(Commission
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(IRS
Employer
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of
Incorporation)
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File
No.)
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Identification
No.)
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3939
North First Street, San Jose, California 95134
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(Address
of Principal Executive Offices) (Zip
Code)
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Registrant’s
telephone number, including area code: (408) 240-5500
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N/A
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(Former
Name or Former Address, if Changed Since Last
Report)
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___________________
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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 (see General Instruction
A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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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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o
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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
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain
Officers.
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Employment
Agreements
On August
28, 2008, with the approval of the Compensation Committee of the Board of
Directors of SunPower Corporation, a Delaware corporation (“SunPower”), SunPower
entered into employment agreements with Thomas Werner, Emmanuel Hernandez,
Thomas Dinwoodie, Howard Wenger, and Bruce Ledesma, who serve as SunPower’s
Chief Executive Officer, Chief Financial Officer, Founder and Chief Technology
Officer - Systems, President of Global Business Units, and General Counsel,
respectively. These employment agreements supersede prior agreements
of a similar nature; provided, however, that the agreements with Messrs.
Dinwoodie, Wenger and Ledesma become effective on November 1, 2008 at which time
their pre-existing employment agreements will expire.
Each
employment agreement provides that the executive’s employment is “at-will” and
may be terminated at any time by either party. The primary purpose of
the agreements is to provide certain severance benefits for employment
terminations in connection with a change of control (as defined in the
agreement). The definition of “change of control” excludes, among
other things, a pro rata distribution (or retirement and pro rata issuance) of
shares of SunPower’s stock held by Cypress Semiconductor Corporation (“Cypress”)
to the then existing public shareholders of Cypress (in proportion to their
shareholdings of Cypress).
Each
employment agreement provides for a three-year term that will automatically
renew unless SunPower provides notice of its intent not to renew at least 120
days prior to the renewal date. The agreements provide that each
executive’s base salary, annual bonus and equity compensation will be determined
in accordance with SunPower’s normal practices.
In the
event an executive’s employment is terminated by SunPower without cause (as
defined in the agreement), or if the executive resigns for good reason (as
defined in the agreement), and if such termination or resignation is in
connection with a change of control, then the agreements also provide that the
executive is entitled to:
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(i)
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a
lump-sum payment equivalent to 24 months (or 36 months in Mr. Werner’s
case) of such executive’s base
salary;
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(ii)
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a
lump-sum payment equal to any earned but unpaid annual bonus for a
completed fiscal year;
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(iii)
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a
lump-sum payment equal to the product of (a) such executive’s target bonus
for the then current fiscal year, multiplied by (b) two (or three in Mr.
Werner’s case);
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(iv)
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continuation
of such executive’s and such executive’s eligible dependents’ coverage
under SunPower’s benefit plans for up to 24 months (or 36 months in Mr.
Werner’s case), at SunPower’s
expense;
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(v)
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a
lump-sum payment equal to such executive’s accrued and unpaid base salary
and paid time off; and
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(vi)
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reimbursement
of up to $15,000 for services of an outplacement firm mutually acceptable
to SunPower and the executive.
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In
addition, in the event an executive’s employment is terminated by SunPower
without cause or if the executive resigns for good reason, and if such
termination or resignation is in connection with a change of control, then the
agreements also provide that:
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(i)
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all
of such executive’s unvested options, shares of restricted stock and
restricted stock units will become fully vested and (as applicable)
exercisable as of the termination date and remain exercisable for the time
period otherwise applicable to such equity awards following such
termination date pursuant to the applicable equity incentive plan and
equity award agreement; and
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(ii)
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all
provisions regarding forfeiture, restrictions on transfer, and SunPower’s
rights of repurchase, in each case otherwise applicable to shares of
restricted stock or restricted stock units shall lapse as of the
termination date.
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Mr.
Werner’s agreement provides for such accelerated vesting and lapsing of
provisions regarding forfeiture, restrictions on transfer and SunPower’s rights
of repurchase upon termination of employment without cause or resignation for
good reason, regardless of whether such termination is in connection with a
change of control; provided, however, that absent a change of control, no such
accelerated vesting or lapsing shall apply to Mr. Werner’s performance-based
equity awards.
If any of
the severance payments, accelerated vesting and lapsing of restrictions would
constitute a “parachute payment” within the meaning of Section 280G of the
Internal Revenue Code and be subject to excise tax or any interest or penalties
payable with respect to such excise tax, then the executive’s benefits will be
either delivered in full or delivered as to such lesser extent which would
result in no portion of such benefits being subject to such taxes, interest or
penalties, whichever results in the executive receiving, on an after-tax basis,
the greatest amount of benefits.
Prior to
receiving the benefits described in the employment agreements, the executive
will be required to sign a separation agreement and release of
claims. In addition, the benefits will be conditioned upon the
executive not soliciting employees or customers for one year following the
termination date. Mr. Werner’s agreement also provides that, if his
termination without cause or resignation for good reason is not in connection
with a change of control, his severance benefits will be conditioned upon a
non-competition arrangement lasting one year following employment
termination.
Management Career Transition
Plan
On August
28, 2008, with the approval of the Compensation Committee of the Board of
Directors, SunPower adopted a corporate policy entitled the
Management Career Transition Plan (the “Plan”), which addresses severance for
employment terminations not in connection with a change of
control. Participants in the Plan include the Chief Executive
Officer and those employees who have been employed by SunPower for at least 6
months and report directly to him (including Messrs. Hernandez, Dinwoodie,
Wenger and Ledesma), as well as other key employees of SunPower who are
recommended for participation by the Chief Executive Officer. Under
the terms of the Plan, Mr. Werner and the employees reporting to him will be
eligible for the benefits following a termination of employment by reason of
death or disability (as defined in the Plan), termination without cause (as
defined in the Plan), or resignation for good reason (as defined in the Plan),
so long as such termination or resignation is not in connection with a change of
control (as defined in the Plan). The definition of “change of
control” excludes, among other things, a pro rata distribution (or retirement
and pro rata issuance) of shares of SunPower’s stock held by Cypress
Semiconductor Corporation (“Cypress”) to the then existing public shareholders
of Cypress (in proportion to their shareholdings of Cypress). Such
benefits include:
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(i)
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a
lump-sum payment equivalent to 12 months (or 24 months in Mr. Werner’s
case) of such executive’s base
salary;
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(ii)
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a
lump-sum payment equal to any earned but unpaid annual bonus for a
complete fiscal year;
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(iii)
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a
lump-sum payment equal to the pro rata portion of such executive’s target
bonus for the then current fiscal year, based on the amount of time
between the start of the fiscal year and the termination
date;
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(iv)
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continuation
of such executive’s and such executive’s eligible dependents’ coverage
under SunPower’s benefit plans for up to 12 months (or 24 months in Mr.
Werner’s case), at SunPower’s expense;
and
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(v)
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a
lump-sum payment equal to such executive’s accrued and unpaid base salary
and paid time off.
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If any of
the Plan’s severance payments would constitute a “parachute payment” within the
meaning of Section 280G of the Internal Revenue Code and be subject to excise
tax or any interest or penalties payable with respect to such excise tax, then
the executive’s benefits will be either delivered in full or delivered as to
such lesser extent which would result in no portion of such benefits being
subject to such taxes, interest or penalties, whichever results in the executive
receiving, on an after-tax basis, the greatest amount of benefits.
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.
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SUNPOWER
CORPORATION
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Date:
August 28, 2008
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By:
/s/ Emmanuel Hernandez
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Name:
Emmanuel Hernandez
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Title: Chief
Financial Officer
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