October 31, 2012
Ramtron International Corp. shareholders will vote Nov. 20 on the company’s acquisition by Cypress Semiconductor Corp., the last hurdle for completion of the $110 million deal. But the outcome isn’t in doubt.
Cypress already owns more than three fourths of Ramtron’s shares; the vote at the Palo Alto, Calif., office of lawyers representing Cypress in the deal clears the way for Cypress to pay remaining shareholders $3.10 a share in cash and make Colorado Springs-based Ramtron a subsidiary. A nonbinding vote also is scheduled on $3.59 million in “golden parachute” payments to the company’s top four executives under severance agreements that will be triggered when the transaction is completed. Shareholders as of Oct. 19 are eligible to vote.
Cypress already controls a majority of Ramtron’s board. After acquiring most of Ramtron’s stock on Oct. 10, Cypress named its CEO, T.J. Rodgers, and five other senior Cypress executives to Ramtron’s board following the resignations of Ramtron CEO Eric Balzer and two outside directors from the board.
Ramtron directors agreed to the Cypress deal Sept. 18 after a series of offers during the summer. Cypress boosted its bid for Ramtron to 25 percent above its initial offer and 71 percent above Ramtron’s closing price of $1.81 a share the day before Cypress publicly disclosed a June 12 offer for the company. Ramtron disclosed in a proxy statement filed Monday for the upcoming shareholder vote that its directors had contacted 24 companies and signed confidentiality agreements with seven firms as it sought other bids for the company. No other bids were submitted.
The proxy also discloses that Balzer will receive $1.66 million in severance pay, cash for stock options and awards that vest immediately upon a change in control of the company and 18 months of health care coverage if he leaves the company after the acquisition is completed.
Under similar severance agreements, Peter Zimmer, Ramtron’s vice president of worldwide sales and applications, would receive $966,391; Ying Shiau, the company’s executive vice president of operations, product test and quality, would receive $539,185, and Gery Richards, Ramtron’s chief financial officer, would receive $423,946, according to the proxy. Those payments do not include an additional $823,584 Balzer will receive and $50,158 Shiau will get for vested shares they already own, the proxy says.
The proxy also refers to a list of Ramtron employees who will be retained by Cypress after the acquisition, but the document is not included in what was filed with the Securities and Exchange Commission. The company employs 140, including about 90 in the Springs.
The proxy also revealed that the deal has spawned two class-action lawsuits filed in 4th Judicial District Courtby shareholders against the company and some of its officers and directors, alleging that the officers and directors breached their fiduciary duty by agreeing to the Cypress deal for a price the suit says is inadequate. One of the suits was dismissed by the plaintiff and refiled in a Delaware court, while the other is still pending. Ramtron said in the proxy it believes both suits “are without merit” and it plans to defend against both “vigorously.”
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