8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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): December 29, 2006

ATMEL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-19032	77-0051991
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2325 Orchard Parkway
San Jose, CA 95131
(Address of principal executive offices, including zip code)

(408) 441-0311
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report.)

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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EXHIBIT 10.1

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

Compensatory Arrangements of Certain Officers

As previously announced on July 25, 2006, the Audit Committee of the Board of Directors of Atmel Corporation (the “Company”) initiated an independent investigation regarding the timing of past stock option grants and other potentially related issues. On October 30, 2006, the Company announced that the Audit Committee, with the assistance of independent legal and forensic accounting experts, had reached a preliminary determination that, in connection with the requirements of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, the actual measurement dates for certain stock options differed from the recorded measurement dates for such stock options. The Audit Committee has not completed its work nor reached final conclusions, including with regard to the accounting and tax implications of the stock option investigation.

Effective December 29, 2006, the Company permitted certain named executive officers and certain other executive officers specified below to elect to amend certain terms of their stock option grant agreements. The amendments were undertaken in order to avoid adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended, to this group of officers and the Company associated with stock options for which the actual measurement dates differed from the recorded measurement dates for such stock options and such options were granted at a discount to the value of the Company’s common stock on the date of grant (“discount options”). The timing of the amendments was dictated by potential tax consequences under proposed regulations recently promulgated by the Internal Revenue Service under Section 409A. Such proposed regulations require that Section 16 officers and directors (under the Securities Exchange Act of 1934, as amended) resolve certain option issues by December 31, 2006. Therefore, the Company permitted such amendments based on the findings of the investigation related to the discount options to meet this deadline although the investigation has not been completed. As such, the amendments listed below are contingent elections and will only take effect if the findings of the stock option investigation ultimately show that the options in question were in fact discount options.

Certain stock option grants for the individuals listed below were amended to provide for a fixed exercise in calendar year 2007 or a subsequent year, or earlier upon separation of service or change in control, as detailed in the form Stock Option Fixed Exercise Date Election Form filed herewith as Exhibit 10.1 and incorporated by reference herein.

Name	Current Position	Aggregate Number
		of Shares of Atmel
		Common Stock
		Underlying Unvested Stock
		Options Amended
Tsung-Ching Wu	Executive Vice President, Office of the President	104,167
Robert McConnell	Vice President and General Manager, RF and Automotive Segment	60,000
Steve Schumann	Vice President and General Manager, Non-Volatile Memory Segment	45,000

The Company expects that other officers and employees may enter into agreements with the Company to mitigate potential Section 409A liability in 2007, in accordance with the Internal Revenue Service regulations affecting non-Section 16 employees with affected outstanding stock options, assuming there are no further legislative or regulatory developments.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
10.1	Stock Option Fixed Exercise Date Election Form.

2

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.

	ATMEL CORPORATION
Date: January 8, 2006	By:	/s/ ROBERT AVERY
		Robert Avery
		Vice President Finance & Chief Financial Officer

3

EXHIBIT INDEX

Exhibit No.	Description
10.1	Stock Option Fixed Exercise Date Election Form.

EX-10.1

Exhibit 10.1

ATMEL CORPORATION
STOCK OPTION FIXED DATE EXERCISE
ELECTION FORM

Name: Date of Election:

E-mail: Social Security Number:

Work Phone: Employee Number:

Option Grant Number:

PLEASE NOTE THAT BY YOUR SIGNATURE BELOW, YOU ARE ACKNOWLEDGING THAT YOU HAVE READ THIS ELECTION FORM AND ALL ACCOMPANYING DOCUMENTS.

Instructions:

This election may be necessary to protect you from penalty taxes that may be imposed on you under new Section 409A of the Internal Revenue Code. Under the new law, if you hold stock options that vest after December 31, 2004 that were not granted with an exercise price equal to at least the fair market value of the Company’s stock on the date of grant (“discount options”) the portion of the stock options that vests after December 31, 2004 does not comply with Section 409A and, unless the options are corrected, your gain with respect to the affected portion of your option will be includible in your taxable income prior to exercise, and will be subject to regular state and federal taxes plus a 20% federal penalty tax and interest charges. However, under special transition rules designed by the IRS to protect taxpayers from such adverse tax consequences, you are permitted to make an irrevocable election to specify the year (after 2006) in which you would exercise your options (although this exercise date could be accelerated by any change in control of the Company or by your termination of service).

Please select one of the Election alternatives below and complete the required information, and submit the form. If you do not make an Election below, you will be liable for any taxes resulting from your discount options.

ALTERNATIVE 1

o Single-Year Election: I hereby elect to exercise all of my options vesting after December 31, 2004 during the eligible exercise window in calendar year ___.

o  Multiple-Year Election. I hereby elect to exercise my options vesting after December 31, 2004 indicated by grant number above in accordance with the following schedule:

	Specific Number			Specific Number
Exercise Year	of Outstanding	Exercise Year		of Outstanding
(or Period)	Options to	(or Period)		Options to
	Exercise			Exercise
2007			2010
2008			2011
2009			2012

ALTERNATIVE 2

o Short-term Deferral Election: With respect to my options first vesting after December 31, 2006, I hereby elect that the portion of each option first vesting in a calendar year will expire if it is not exercised by March 15^th of the calendar year after the calendar year during which it vests. With respect to my options first vesting between December 31, 2004 and December 31, 2006, I agree to exercise them in accordance with the Single-Year Election or Multiple-Year Election set forth above.

GENERAL INFORMATION APPLIED TO BOTH ALTERNATIVES

In making this election, I understand that the exercise schedule elected above will be accelerated only upon my death, disability, termination of service, or a change in control of the Company (all as defined under Section 409A). (The exercise procedures applicable to my elected exercise year, and to any accelerated exercise are described below.)

o Contingent Election. I hereby elect that my elections set forth above will be effective only if the result of the Company’s stock option review results in a determination that I hold discount options, but that if the Company stock option review results in a determination that I do not hold discount options, my elections set forth above shall be null and void. I understand that if I do not make this contingent election I will not be permitted to exercise the affected options except as set forth above, even if the investigation results in a determination that I do not hold discount options.

	Atmel Corporation
Signed:
Date:	Date:

Name (printed):  By: [                                             ]

IMPORTANT DEADLINE: You must ensure that this election form is received by Atmel Corporation at the contact information below no later than 12:00 pm (Noon) on December 29, 2006. If this election form is not received by then or is improperly completed, it will be invalid. If, within 24 hours of you sending your election form, you have not received an email confirmation that your election form was received and properly completed, please call Patrick Reutens at 408.436.4229 or David Thomas at 650.849.3261. If by 1:00 p.m. on December 29, 2006, you have not received an email confirmation that your election form was received and properly completed, please call Patrick Reutens at 408.436.4229 or David Thomas at 650.849.3261.

Please return your completed form by facsimile to:

Patrick Reutens
Fax: 408.436.4111

With a copy to:

David S. Thomas
Employee Benefits & Compensation Group
Wilson Sonsini Goodrich & Rosati
Fax: 650.493.6811
650 Page Mill Road
Palo Alto, CA 94304

Representations Regarding the Terms and Conditions of this Election and Amendment of Eligible Options

Voluntary Participation. The election made by me on this form is entirely voluntary. I understand that the Company is not making, nor has it made, any recommendations on whether I should make an election, and that the Company in applying the program under which these options were granted, has provided the flexibility to permit me to make the election voluntarily as I deem appropriate. I acknowledge that I understand that the deadlines described in this form are, or are directly related to, IRS-imposed deadlines that impact the tax treatment of my discount options. I further acknowledge that I understand that the Company’s stock plans provide that, after I properly complete and deliver this election, all of my discount options covered by a valid election will be amended automatically as described in this election form.

Irrevocable Election. I acknowledge that once I make an election under this procedure, it is deemed to be irrevocable as of December 31, 2006, and thus I may not later change my decision with respect to any portion of this election. However, the Company does reserve the right to cancel or replace, or allow employees to cancel or replace, this election to the extent permitted or required by subsequent changes in the tax law.

Amendment to Stock Option. I acknowledge that my election selected above will serve as an amendment to my discount options to the extent required to implement such election. By my execution of this election, I agree to be bound by all the terms and conditions of this election as described in this election form and its instructions. I further authorize the Company to apply all provisions of my option agreement to prevent taxation under Section 409A. Other than as amended by the terms and conditions of this election, my discount options remain subject to all of the terms and conditions of the applicable stock plan and stock option agreement(s) memorializing my discount options.

Special Rules Applicable to Exercise Date Accelerations Triggered by Termination Of Service. My option exercise date will be accelerated if I experience a termination of service due to my death, disability, or separation from service. In case of such event, I acknowledge that, subject to the Company being current in its periodic reports required under the Securities Exchange Act of 1934, the period for exercising my options covered by this election will commence immediately after my termination of service, and will end on the 30th day after my termination of service. In the event that I am a “specified employee” (as defined in Code Section 409A(a)(2)(B)(i) and the underlying regulations), I acknowledge that, even if I exercise my options covered by this election during the 30 days after my termination of service, the option spread will not be paid to me (or treated as compensation) until the date that is six months after my termination of service (in compliance with Section 409A(a)(2)(B)(i)).

No Guarantee of Vesting or Continued Status as a Service Provider. I acknowledge and agree that my election hereunder does not alter the vesting schedule of my discount options. I also acknowledge and agree that my election hereunder does not constitute an express or implied promise of continued status as a Service Provider for the applicable discount option vesting period, and that any election I may make shall not interfere with my right or the Company’s right to terminate my status as a Service Provider at any time, with or without cause.

Tax and Financial Consultation. I acknowledge and represent that I have consulted with such tax and legal advisors and consultants, if any, as I deemed advisable in connection with this election. I acknowledge that the information provided to me about the IRS regulations by the Company is based on the Company’s current reasoned interpretation of complicated proposed regulations and other IRS guidance based on the advice of various tax and legal experts, that I am not relying on the Company in, and I am solely responsible for, making any election hereunder and that I am not relying upon the Company for any such tax or legal advice.

Execution and Agreement to Terms and Conditions. Before signing this election form, I have received, read and understood this election form and its instructions. By submitting this election to the Company, I agree that my discount options have been amended, to the extent necessary, to reflect this election, and that my discount options are governed by the terms and conditions of this election, the applicable stock plan and my stock option agreement(s).

Administration. The Company will determine, in its sole and absolute discretion, all questions as to the form of election and the validity, eligibility and time of receipt of any election. Our determination of these matters will be final and binding on all parties.

THE COMPANY IS NOT MAKING ANY RECOMMENDATION TO ANY PERSON REGARDING WHETHER OR WHEN TO TAKE ANY ACTION IN RESPONSE TO SECTION 409A. EVERY AFFECTED OPTION HOLDER MUST DECIDE WHETHER AND HOW TO IMPLEMENT THESE POTENTIAL ACTIONS BASED ON HIS OR HER OWN PERSONAL TAX AND FINANCIAL POSITION AND OTHER FACTORS.