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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
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1. | Election of Directors.To elect seven persons to the Board of Directors of the Company, each to serve until the next annual meeting of stockholders and until their respective successors have been elected and qualified. The Board of Directors’ nominees are: C.H. Chen, Michael R. Giordano, L.P. Hsu, Keh-Shew Lu, Shing Mao, Raymond Soong and John M. Stich. | ||
2. | Amendment of 2001 Omnibus Equity Incentive Plan.To approve various proposed amendments of the 2001 Omnibus Equity Incentive Plan, including the extension of the term of the plan until May 28, 2019 and the increase by 5,000,000 in the number of shares of Common Stock which may be subject to awards granted thereunder. | ||
3. | Ratification of Appointment of Independent Registered Public Accounting Firm.To ratify the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2009. | ||
4. | Other Business.To transact such other business as properly may come before the Meeting or any adjournment or postponement thereof. |
By Order of the Board of Directors, | ||
DIODES INCORPORATED | ||
/s/ Carl C. Wertz | ||
Carl C. Wertz, Secretary |
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• | View our proxy materials for the Meeting on the Internet; | ||
• | Request a printed copy of the proxy materials; and | ||
• | Instruct us to send future proxy materials to you by mail or electronically by email on an ongoing basis. |
• | Notice of Annual Meeting of Stockholders; | ||
• | This Proxy Statement; and | ||
• | The 2008 Annual Report to Stockholders, which includes our audited consolidated financial statements. |
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1. | Election of Directors.To elect seven persons to the Board, each to serve until the next annual meeting of stockholders and until their respective successors have been elected and qualified. The Board’s nominees are: C.H. Chen, Michael R. Giordano, L.P. Hsu, Keh-Shew Lu, Shing Mao, Raymond Soong and John M. Stich. | ||
2. | Amendment of 2001 Omnibus Equity Incentive Plan.To approve various proposed amendments of the 2001 Omnibus Equity Incentive Plan, including the extension of the term of the plan until May 28, 2019 and the increase by 5,000,000 in the number of shares of Common Stock which may be subject to awards granted thereunder; | ||
3. | Ratification of Appointment of Independent Registered Public Accounting Firm.To ratify the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm for the year ended December 31, 2009. | ||
4. | Other Business.To transact such other business as properly may come before the Meeting or any continuation, adjournment or postponement thereof. |
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Amount and Nature | Percent of | ||||||||
Name and Address of Beneficial Owner | of Beneficial Owner | (1) | Class(2) | ||||||
Lite-On Semiconductor Corporation (“LSC”) | 8,365,781 | (3) | 20.2 | % | |||||
9F. No. 233-2, Pao-Chiao Road, Hsin-Tien, Taipei-hsien | |||||||||
23115, Taiwan, R.O.C. | |||||||||
FMR LLC | 4,414,609 | (4) | 10.7 | % | |||||
82 Devonshire Street, Boston, Massachusetts 02109 | |||||||||
T. Rowe Price Associates, Inc. | 2,081,962 | (5) | 5.0 | % | |||||
100 E. Pratt Street, 10th Floor, Baltimore, Maryland 21202 | |||||||||
(1) | The named stockholder has sole voting power and investment power with respect to the shares listed, except as indicated below. | ||
(2) | The Percentage of Class is based on 41,395,815 shares outstanding as of the Record Date. | ||
(3) | LSC is a public company listed on the Taiwan Stock Exchange Corporation and a member of the Lite-On Group of companies. See “Proposal One – Election of Directors – Certain Relationships and Related Transactions” for a discussion of the relationship among LSC, the Company and certain directors and executive officers of the Company. | ||
(4) | Based solely on information provided by FMR LLC in a Schedule 13G filed with the SEC on February 17, 2009 reporting beneficial ownership of our Common Stock. According to the Schedule 13G, FMR LLC has sole voting power with respect to 42,389 shares, has sole dispositive power with respect to 4,414,609 shares and has neither shared voting power nor shared dispositive power with respect to any shares. | ||
(5) | Based solely on information provided by T. Rowe Price Associates, Inc. in a Schedule 13G filed with the SEC on February 10, 2009 reporting beneficial ownership of our Common Stock. According to the Schedule 13G, T. Rowe Price Associates, Inc. has sole voting power with respect to 268,350 shares, has sole dispositive power with respect to 2,081,962 shares and has neither shared voting power nor shared dispositive power with respect to any shares. |
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Amount and Nature of | Percent of | |||||||
Name of Beneficial Owner | Beneficial Owner(1) | Class(2) (3) | ||||||
Directors | ||||||||
Raymond Soong | 799,063 | (4) | 1.9 | % | ||||
C.H. Chen | 560,604 | (4) (5) | 1.3 | % | ||||
Michael R. Giordano | 202,304 | (4) (8) | * | |||||
L.P. Hsu | 2,387 | (4) | * | |||||
Keh-Shew Lu(6) | 1,234,501 | (4) (5) (7) | 3.0 | % | ||||
Shing Mao | 263,575 | (4) | * | |||||
John M. Stich | 128,387 | (4) (9) | * | |||||
Executive Officers | ||||||||
Mark A. King | 220,751 | (4) | * | |||||
Joseph Liu | 418,669 | (4) | 1.0 | % | ||||
Carl C. Wertz | 98,163 | (4) | * | |||||
Richard D. White | 22,800 | (4) | * | |||||
All other executive officers (6 persons) | 79,108 | (4) | * | |||||
All directors and executive officers as a group (17 persons) | 4,030,312 | (10) | 8.9 | % | ||||
* | Less than 1%. | |
(1) | The named stockholder has sole voting power and investment power with respect to the shares listed, except as indicated and subject to community property laws where applicable. | |
(2) | Under Rule 13d-3 of the Securities Exchange Act of 1934 (the “Exchange Act”), certain shares may be deemed to be beneficially owned by more than one person (if, for example, a person shares the power to vote or the power to dispose of the shares). In addition, under Rule 13d-3(d)(1) of the Exchange Act, shares which the person (or group) has the right to acquire within sixty (60) days after the Record Date are deemed to be outstanding in calculating the beneficial ownership and the percentage ownership of the person (or group) but are not deemed to be outstanding as to any other person or group. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership of voting power with respect to the number of shares of Common Stock actually outstanding at the Record Date. | |
(3) | The Percentage of Class is based on 41,395,815 shares outstanding as of the Record Date. |
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(4) | Includes the following shares of Common Stock that the named individual has the right to acquire within sixty (60) days after the Record Date by exercising stock options or the vesting of restricted stock units/awards: |
Named Individual | Shares | |||||||
Raymond Soong | 775,063 | |||||||
C.H. Chen | 375,675 | |||||||
Michael R. Giordano | 138,231 | |||||||
L.P. Hsu | 1,075 | |||||||
Keh-Shew Lu(6) | 508,593 | |||||||
Shing Mao | 227,388 | |||||||
John M. Stich | 117,700 | |||||||
Mark A. King | 220,751 | |||||||
Joseph Liu | 342,626 | |||||||
Carl C. Wertz | 97,543 | |||||||
Richard D. White | 15,950 | |||||||
All other executive officers (6 persons) | 52,125 | |||||||
TOTAL | 2,872,720 | |||||||
(5) | Includes 202,250 and 45,000 shares of restricted stock granted on April 14, 2005 to Dr. Lu and Mr. Chen, respectively, fifty percent (50%) of which first became saleable and transferable on April 14, 2008, the third anniversary of the date of grant, and fifty percent (50%) of which became saleable and transferable on April 15, 2009, the day following the fourth anniversary of the date of grant. | |
(6) | Dr. Lu is a member of the Board and the President and Chief Executive Officer of the Company. | |
(7) | Includes 440,000 shares in Texastac Investments L.P. and the Lu Family Revocable Trust, and 10,500 shares in an UTMA (Custodial) Trust. Dr. Lu is the co-general partner of Texastac Investments L.P. and a co-trustee of the Lu Family Revocable Trust and UTMA (Custodial) Trust. He has voting and investment authority over these shares held by the limited partnership and these trusts. | |
(8) | Includes 5,062 shares of Common Stock held in the name of UBS Trust for the Individual Retirement Account of Mr. Giordano. Mr. Giordano has voting and investment authority over these shares. | |
(9) | Includes 10,687 shares of Common Stock held in the name of Stich Family Holdings, LLC. Mr. Stich is a co-member of the Stich Family Holdings, LLC and has voting and investment authority over these shares. | |
(10) | Includes 2,872,720 shares that the directors and executive officers have the right to acquire within sixty (60) days after the Record Date, by exercising stock options or the vesting of restricted stock units, but excludes an additional 574,531 shares that the directors and executive officers will have the right to acquire upon the exercise of stock options or restricted stock units, which will become exercisable in installments more than sixty (60) days after the Record Date. |
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Director | ||||||||||||||||||
Director Nominees | Age | Position with the Company | Since | |||||||||||||||
Raymond Soong(1) | 67 | Director and Chairman of the Board | 1993 | |||||||||||||||
C.H. Chen(2) | 66 | Director and Vice Chairman of the Board | 2000 | |||||||||||||||
Michael R. Giordano(3) | 62 | Director | 1990 | |||||||||||||||
L.P. Hsu(4) | 69 | Director | 2007 | |||||||||||||||
Keh-Shew Lu(5) | 62 | President, Chief Executive Officer, and Director | 2001 | |||||||||||||||
Shing Mao(6) | 74 | Director | 1990 | |||||||||||||||
John M. Stich(7) | 67 | Director | 2000 | |||||||||||||||
(1) | Raymond Soong Director and Chairman of the Board | |
Chair, Compensation Committee Chair, Governance and Stockholder Relations Committee | ||
Mr. Soong was appointed the Chairman of the Board of the Company in 1993. Mr. Soong is also the Chairman of the Board of LSC, Lite-On Technology Corporation, Liteon-IT Corp. and a board member of Actron Technology Corporation and Co-Tech Copper Foil Corporation, each of which is a member or an affiliate of the Lite-On Group. After serving as a senior engineer for RCA Corporation and as a chief engineer for Texas Instruments, Taiwan Limited (“TI Taiwan”), Mr. Soong, together with several of his co-workers, founded Taiwan Lite-On Electronic Co. Ltd. (“Taiwan Lite-On”), a manufacturer of electronic components and subsystems, in 1975. Mr. Soong is a graduate of, and received an Honorary Doctorate from, the National Taipei University of Technology’s Electronic Engineering Department and also received an Honorary Doctorate from National Chiao Tung University. |
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(2) | C.H. Chen Director and Vice Chairman of the Board | |
Mr. Chen was appointed the Vice Chairman of the Board of the Company in June 2005. Mr. Chen is also the Chairman of the Board of Co-Tech Copper Foil Corporation, Vice Chairman of the Board of LSC and a board member of Lite-On Technology Corporation, Actron Technology Corporation and Dynacard Corp., each of which is a member or an affiliate of the Lite-On Group. Mr. Chen served as the Company’s President and Chief Executive Officer from 2000 until 2005. From 1969 to 1990, Mr. Chen held various positions at Texas Instruments Incorporated (“TI”), most recently as the Vice President of TI Taiwan. In 1990, he left TI to found Dyna Image Corporation, which merged with LSC in December 2000. Mr. Chen received his Bachelor of Science degree in Mechanical Engineering from National Taiwan University. | ||
(3) | Michael R. Giordano Director | |
Chair, Audit Committee (Financial Expert) | ||
Mr. Giordano, CIMA, joined the private-banking firm of UBS Financial Services, Inc. as Senior Vice President-Investment Consulting when UBS AG acquired PaineWebber, Inc. in 2000. PaineWebber, Inc. had acquired his previous employer, Kidder Peabody and Co., Inc., with whom he was employed since 1979. Mr. Giordano advises corporations, foundations, trusts, and municipal governments in investments and finance. Mr. Giordano served as Chairman of the Board and the Chief Executive Officer of the Leo D. Fields Co. from 1980 to 1990, when GWC Holdings acquired it, and served as a board member of Professional Business Bank, a publicly traded corporation, from 2001 to 2003. Formerly a captain and pilot in the United States Air Force, he received his Bachelor’s degree in Aerospace Engineering from California State Polytechnic University and his Master’s degree in Business Administration (Management and Finance) from the University of Utah. Mr. Giordano also completed post-graduate work in International Investments at Babson College and is certified by the Investment Management Consultants Association. He is also certified by the John E. Anderson Graduate School of Management, University of California at Los Angeles as a Corporate Director, having demonstrated understanding of directorship and corporate governance. | ||
(4) | Lu-Pao Hsu Director | |
Member, Audit Committee Member, Compensation Committee | ||
Mr. Hsu has been Chairman of Philips Taiwan Quality Foundation since 2002, a board member of Winbond Electronics Corporation since 1999, a board member of Vanguard International Semiconductor Corporation since 2003 and a board member of ZyXEL Communications Corporation since 2006. He also currently serves as a consultant to Lite-On Technology Corporation. Previously, he served as a board member of Lite-On Technology Corporation from 2004 to 2006 and the Supervisor of the Board at Delta Electronics from 2000 to 2003 and the Vice Chairman from 1998 to 2000. He also served as the Chief Executive Officer of HannStar Display in 2001, a board member of Taiwan Semiconductor Manufacturing Company Ltd. from 1991 to 2000 and the Executive Vice President of Philips Taiwan Limited from 1989 to 1998. Since 1998, Mr. Hsu has been an Esteemed Chair Lecturer at the College of Management at National Chiao Tung University in Taiwan, where he served as Associate Professor from 1971 to 1972. Mr. Hsu completed the International Executive Program at IMD and the Advanced Management Program at Harvard Business School and holds a Bachelor’s degree in Physics from National Cheng Kung University in Taiwan. |
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(5) | Keh-Shew Lu Director, President and Chief Executive Officer | |
Dr. Lu was appointed the President and Chief Executive Officer of the Company in June 2005 after serving on the Board since 2001. Dr. Lu is also a board member of Lite-On Technology Corporation, a publicly held company in Taiwan, as well as LedEngin, Inc., Lorentz Solution, Inc. and Nuvoton Technology Corporation, three privately held companies. Dr. Lu is the founding Chairman of the Asia American Citizen’s Council, the Vice Chairman of the governing board of the Plano Chinese Alliance Church, a board member of the Texas Tech foundation and a board member of the Advisory Board to the Southern Methodist University’s Asian Studies Program. From 2001 to 2005, Dr. Lu was a partner of the WK Technology Venture Fund. From 1998 to 2001, Dr. Lu served as Senior Vice President of TI and General Manager of Worldwide Mixed-Signal and Logic Products. His responsibilities included all aspects of the analog, mixed-signal and logic products for TI worldwide business, including design, process and product development, manufacturing and marketing. From 1996 to 1998, Dr. Lu was the manager of TI’s worldwide memory business. In addition, he served as the President of TI Asia from 1994 to 1997 where he supervised all of TI activities in Asia, excluding Japan. Dr. Lu holds a Bachelor’s degree in engineering from the National Cheng Kung University in Taiwan, and a Master’s degree and a Doctorate in Electrical Engineering from Texas Tech University. | ||
(6) | Shing Mao Director | |
Member, Compensation Committee Member, Governance and Stockholder Relations Committee | ||
Dr. Mao has been a director of Dyna Investment Co., Ltd. of Taiwan, a venture capital company, since 1989. Previously, Dr. Mao retired in 2000 as Chairman of the Board of Lite-On USA, Inc., where he had served since 1988. Dr. Mao was a board member of LSC from 1989 to 2000. Before joining Taiwan Lite-On, he served in a variety of management positions with Raytheon Company for four years, with TI for 11 years and with UTL Corporation (acquired by Boeing Aircraft Company) for seven years. Dr. Mao received his Doctorate in Electrical Engineering from Stanford University. | ||
(7) | John M. Stich Director | |
Member, Audit Committee Member, Governance and Stockholder Relations Committee | ||
Mr. Stich serves as a board member of Spansion Inc, a flash memory company, and of Stonestreet One, Inc. a provider of short distance wireless technologies. He also serves with numerous non-profit organizations, including as a board member of the Japan America Society of Dallas/Fort Worth and Member of the Dallas-Taipei and Dallas-Sendai Sister City Committees. Mr. Stich was appointed as the Honorary Consul General of Japan at Dallas in 2004. From 2000 to 2006, he was the President and Chief Executive Officer of The Asian Network, a consulting business that helped high-technology companies to establish and expand their business in Asia. Prior to this position, Mr. Stich was the Chief Marketing Officer for TI in Japan from 1994 to 1999, and Vice President of Semiconductors for TI Asia from 1991 to 1994. Mr. Stich joined TI in 1964 and has served in various management positions, including a total of 24 years leading TI’s Asian business growth while living in Taipei, Hong Kong and Tokyo. Mr. Stich received his Bachelor’s degree in Electrical Engineering from Marquette University. |
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Governance and | ||||||||||||||||||
Audit | Compensation | Stockholder Relations | ||||||||||||||||
Directors | Committee | Committee | Committee | |||||||||||||||
Raymond Soong(2) | Chair | Chair | ||||||||||||||||
C. H. Chen | (1 | ) | Ex officiomember(4) | |||||||||||||||
Michael R. Giordano(2) | Chair(3) | |||||||||||||||||
L.P. Hsu(2) | Member | Member | ||||||||||||||||
Keh-Shew Lu | ||||||||||||||||||
Shing Mao(2) | Member | Member | ||||||||||||||||
John M. Stich(2) | Member | Member | ||||||||||||||||
(1) | Until February 2008, Mr. Chen served as Chairman of the Compensation Committee, and anex officiocommittee member. As anex officiomember, Mr. Chen was not entitled to vote and attended meetings only at the invitation of the Compensation Committee. | |
(2) | Independent director (as determined by the Board under the rules of Nasdaq and in the case of members of the Audit Committee, the rules of the SEC). | |
(3) | Qualifies as “audit committee financial expert” as the term is defined in Item 407(d)(5) of Regulation S-K promulgated under the Exchange Act. | |
(4) | Mr. Chen is not entitled to vote and may attend meetings only at the invitation of the committee. |
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Action by | ||||||||
Meetings | Written | |||||||
Title | Held | Consent | ||||||
Board | 5 | 5 | ||||||
Audit Committee | 6 | 4 | ||||||
Compensation Committee | 2 | 3 | ||||||
Governance Committee | 2 | 1 | ||||||
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Name | Age | Position with the Company | ||
Keh-Shew Lu*(1) | 62 | President, Chief Executive Officer, and Director | ||
Mark A. King*(2) | 50 | Senior Vice President, Sales and Marketing | ||
Joseph Liu*(3) | 67 | Senior Vice President, Operations | ||
Hans Rohrer(4) | 60 | Senior Vice President, Business Development | ||
Carl C. Wertz*(5) | 54 | Chief Financial Officer, Secretary and Treasurer | ||
Richard D. White*(6) | 61 | Senior Vice President, Finance | ||
Colin Greene(7) | 52 | Europe President and Vice President, Europe Sales and Marketing | ||
Julie Holland(8) | 47 | Vice President, Worldwide Analog Products | ||
T.J. Lee(9) | 60 | Vice President, Packaging Operations | ||
Edmund Tang(10) | 61 | Vice President, Corporate Administration | ||
Francis Tang(11) | 54 | Vice President, Product Development | ||
* These five executive officers are Named Executive Officers (“NEOs”) of the Company. See “Compensation Discussion and Analysis.” | ||
(1) | See “Election of Directors” for biographical information regarding Keh-Shew Lu. | |
(2) | Mark A. King Senior Vice President, Sales and Marketing | |
Mr. King was appointed to his current position in 2005. He previously served as the Company’s Vice President, Sales and Marketing from 1998 to 2005 and Vice President, Sales from 1991 to 1998. Prior to joining the Company, Mr. King served for nine years in various sales management positions at Taiwan Lite-On. Mr. King holds a Bachelor’s degree in Business Administration from the University of Arizona. | ||
(3) | Joseph Liu Senior Vice President, Operations | |
Mr. Liu was appointed to his current position in 2000. He previously served as the Company’s Vice President, Far East Operations from 1998 to 2000, Vice President, Operations from 1994 to 1998, Chief Financial Officer, Secretary and Treasurer from 1990 to 1998 and Vice President, Administration from 1990 to 1994. Prior to joining the Company, Mr. Liu held various management positions with TI in Dallas since 1971, including Planning Manager, Financial Planning Manager, Treasury Manager, Cost Accounting Manager and General Accounting Manager with TI Taiwan in Taipei. He was the Controller of TI Asia in Singapore and Hong Kong from 1981 to 1986, Financial Planning Manager of TI Latin America Division (for TI Argentina, TI Brazil and TI Mexico) in Dallas from 1986 to 1989 and Chief Coordinator of Strategic Business Systems for TI Asia Pacific Division in Dallas from 1989 to 1990. Mr. Liu holds an Executive MBA from Pepperdine University. |
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(Footnotes continued from previous page) | ||
(4) | Hans Rohrer Senior Vice President, Business Development | |
Mr. Rohrer was appointed to his current position in June 2008. He previously served as the Chief Executive Officer of Zetex plc from 2006 until it was acquired by the Company in June 2008. He began his career in research and development at Diehl Data Systems before working at TI from 1976 to 1980, where he held a variety of engineering and marketing positions. From 1980 to 1998, he held several managerial positions at National Semiconductor Corporation (“NSM”), including vice president and general manager of Europe and vice president for VLSI and mixed signal products. After NSM, he served as President of Taiwan Semiconductor Manufacturing Company Limited (“TSMC”) – Europe until joining Zetex plc in 2006. Mr. Rohrer holds a Master’s degree in electronics from Aalen University and received further business and management education from Stanford University and INSEAD, Paris. | ||
(5) | Carl C. Wertz Chief Financial Officer, Secretary and Treasurer | |
Mr. Wertz was appointed to his current position in 1998. He previously served as the Company’s Controller from 1993 to 1998. Prior to joining the Company, he served in various financial management and accounting positions. Mr. Wertz, a licensed certified public accountant, has over 24 years of manufacturing and distribution experience and began his accounting career with Deloitte & Touche LLP. | ||
(6) | Richard D. White Senior Vice President, Finance | |
Mr. White was appointed to his current position with the Company in 2006. Mr. White has thirty years of senior level finance experience, including 25 years at TI, where he served as Vice President of Finance and Production Planning for MOS memory, Controller for TI’s Asia Pacific Division in Singapore, and various other financial positions in the United States, France and Germany. From 1999 to 2005, he served as the Chief Financial Officer for Optisoft, Inc., and from 2005 to 2006, he served as a Partner for Tatum, LLC. Mr. White, a licensed certified public accountant, holds a Bachelor’s degree in electrical engineering from Oklahoma State University and an MBA from the University of Michigan. | ||
(7) | Colin Greene Europe President and Vice President, Europe Sales and Marketing | |
Mr. Greene was appointed to his current position in June 2008 upon the acquisition of Zetex plc. From 1997 to 2008, Mr. Greene held several positions with Zetex. He served on the Zetex’ Board as an executive director from March 2004 until joining the Company and served as Director of Marketing from March 2004 to December 2004 and thereafter as Chief Operating Officer. Prior to Zetex, he spent 10 years with NSM, most recently as European Marketing Manager for all analog products. Mr. Greene holds a Bachelor’s degree with honors in Electrical Engineering from Aston University. | ||
(8) | Julie Holland Vice President, Worldwide Analog Products | |
Ms. Holland joined the Company in January 2008. Prior to joining the Company, she served as Director and General Manager of the Connectivity Solutions business unit at TI where her responsibilities included leading business and technical teams in the US, Asia, and Japan in the development, production, and marketing of multiple interface product lines. During her tenure with TI, Ms. Holland held several key management roles within the Mixed Signal Products organization from 1997 to 2001, including Director of the Worldwide Bus Solutions business unit and Director of the Computer Peripheral and Control Products organization. She earned Bachelor‘s degrees in Physics and Mathematics at Northwestern University and a Master’s degree in Engineering Management at Southern Methodist University. She is an alumna of Leadership America and Leadership Texas, and was named a Fellow of the International Women’s Forum Leadership Foundation. |
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(Footnotes continued from previous page) | ||
(9) | T.J. Lee Vice President, Packaging Operations | |
T.J. Lee was appointed to his current position in 2008. Prior to joining the Company, Mr. Lee was the President of TI Taiwan Limited since 1998. He served as site manager of TI’s assembly and testing facility in Chung Ho, Taiwan from 1997 to 1998 where he was responsible for the site’s manufacturing operation, sales and marketing. Mr. Lee held various engineering and quality management positions in the manufacturing facility throughout his 32 years career with TI, beginning as a Quality and Reliability Assurance supervisor in 1973. He graduated from Taipei Institute of Technology and earned an Executive MBA degree from Tulane University. | ||
(10) | Edmund Tang Vice President, Corporate Administration | |
Mr. Tang was appointed to his current position in 2006. From 1997 to 2001, he served as Vice President and global memory quality manager of the world-wide MOS memory operation and prior to that position, he served as Vice President and General Manager of Asia memory operations. From 2002 to 2006, Mr. Tang served as the Asia President of FSI International Inc., a global supplier of wafer cleaning and processing technology, responsible for FSI’s business in Taiwan, Singapore, South Korea, and China. Mr. Tang holds a Bachelor’s degree in electrical engineering from the National Cheng Kung University in Taiwan and a Master’s degree in Electrical Engineering from Southern Methodist University. | ||
(11) | Francis Tang Vice President, Product Development | |
Mr. Tang was appointed to his current position in May 2006. He previously served as the Company’s Global Product Manager since 2005. From 2002 until joining the Company, Mr. Tang served as general manager of T2 Microelectronics in Shanghai, China where he managed complex mixed-signal SOC product development. From 1996 to 2001, Mr. Tang was the senior strategic marketing director for Acer Labs, Inc. USA, and prior to that, he was employed by NSM for 17 years, where he held various management positions in analog and mixed-signal circuit design, applications and strategic marketing. Mr. Tang holds a Master’s degree in Electrical Engineering from University of Missouri – Rolla. |
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• | The total compensation package for NEOs should be competitive (i.e., in at least the 50th percentile) compared with the total compensation paid by other companies of similar size to their executive officers with comparable duties in the semiconductor industry; | ||
• | Base salaries should only be a portion of the total compensation package and may generally be lower than the median (i.e., lower than the 50th percentile) base salaries paid by other companies; and | ||
• | Cash bonuses and equity awards should be used to motivate NEOs to achieve specific strategic and performance objectives established by the Board and to align the NEOs’ interests with those of the Company’s stockholders. |
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Applied Micro Circuits Corporation | Conexant Systems, Inc. | Cree, Inc. | ||
DSP Group, Inc. | Integrated Device Technology, Inc. | Integrated Silicon Solution, Inc. | ||
International Rectifier Corporation | Intersil Corporation | IXYS Corporation | ||
Lattice Semiconductor Corporation | Linear Technology Corporation | Micrel, Incorporated | ||
Microchip Technology Incorporated | Microsemi Corporation | OmniVision Technologies, Inc. | ||
PMC-Sierra, Inc. | RF Micro Devices, Inc. | Semtech Corporation | ||
Silicon Image, Inc. | Silicon Laboratories Inc. | Silicon Storage Technology, Inc. | ||
Skyworks Solutions, Inc. | Standard Microsystems Corporation | TriQuint Semiconductor, Inc. | ||
Zoran Corporation |
• | Base salary for each of the Company’s nine executive officers is less than the 25th percentile among the Peer Group; | ||
• | Target bonus for each of the Company’s nine executive officers is above the 75th percentile among the Peer Group; | ||
• | Target total cash for each of the Company’s nine executive officers is above the 50th percentile among the Peer Group; | ||
• | Long-term incentive value for each of the Company’s nine executive officers is equal to the 50th percentile among the Peer Group; and | ||
• | Total direct compensation for each of the Company’s nine executive officers is equal to the 50th percentile among the Peer Group. |
• | In the top quarter for the amount of trailing twelve-month net income; and | ||
• | In the top half for market capitalization. |
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Base | Equity | Additional | ||||||||||||||||||||||||||||
Salaries | Bonuses | Awards(1) | Benefits | Total | ||||||||||||||||||||||||||
Name | Title | (%) | (%) | (%) | (%) | (%) | ||||||||||||||||||||||||
Keh-Shew Lu | President and Chief Executive Officer | 9.9 | 22.1 | 67.1 | 0.9 | 100 | ||||||||||||||||||||||||
Carl C. Wertz | Chief Financial Officer, Secretary and Treasurer | 27.1 | 27.1 | 41.3 | 4.5 | 100 | ||||||||||||||||||||||||
Joseph Liu | Senior Vice President, Operations | 24.4 | 30.5 | 42.7 | 2.4 | 100 | ||||||||||||||||||||||||
Mark A. King | Senior Vice President, Sales and Marketing | 23.4 | 30.6 | 42.7 | 3.4 | 100 | ||||||||||||||||||||||||
Richard D. White | Senior Vice President, Finance | 24.7 | 38.5 | 32.7 | 4.1 | 100 | ||||||||||||||||||||||||
(1) | These percentages reflect portions of NEOs’ total compensation determined by the Company for accounting purposes for these equity awards and do not reflect whether each NEO has actually realized a financial benefit from these equity awards. The value of the equity awards is calculated in accordance with the amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2008 in accordance with the Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”). Pursuant to SEC rules, the percentages shown above as equity award portions of NEO’s total compensation exclude the impact of estimated forfeitures related to service-based vesting conditions. Amounts reported for RSUs and restricted stock awards (“RSAs”) are calculated by multiplying the number of shares subject to the award by the closing price of the Company’s Common Stock on the grant date and then dividing by the vesting period. Amounts reported for stock options are determined using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of traded options, which have different characteristics than employee stock options, and changes to the subjective assumptions used in the model can result in materially different fair value estimates. See Note 17 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009, for a further discussion of the relevant valuation assumptions used in calculating grant date fair value pursuant to SFAS 123(R). |
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• | The Company’s 2008 financial performance, including, but not limited to, the following items: serviceable area market (SAM) industry growth; fiscal 2008 revenue and net income versus fiscal 2007 revenue and net income; and profit fall-through; and | ||
• | Executive retention. |
Name | Fiscal 2007 Salary | Fiscal 2008 Salary | Percent Change | |||||||||||||||
Keh-Shew Lu | $ | 326,000 | $ | 343,000 | 5.2 | % | ||||||||||||
Carl C. Wertz | $ | 165,000 | $ | 170,000 | 3.0 | % | ||||||||||||
Joseph Liu | $ | 237,000 | $ | 248,000 | 4.6 | % | ||||||||||||
Mark A. King | $ | 204,000 | $ | 215,000 | 5.3 | % | ||||||||||||
Richard D. White | $ | 160,000 | $ | 170,000 | 6.2 | % | ||||||||||||
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Name | Fiscal 2007 Bonus | Fiscal 2008 Bonus | Percent Change | |||||||||||||||
Keh-Shew Lu | $953,892 | $763,114 | -20 | % | ||||||||||||||
Carl C. Wertz | $251,024 | $170,000 | -32 | % | ||||||||||||||
Joseph Liu | $431,762 | $310,000 | -28 | % | ||||||||||||||
Mark A. King | $351,434 | $281,147 | -20 | % | ||||||||||||||
Richard D. White | $331,352 | $265,082 | -20 | % | ||||||||||||||
$2,319,464 | $1,789,343 | -23 | % | |||||||||||||||
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Name | 2007 | 2008 | Percent Change | |||||||||||||||
Keh-Shew Lu | 111,000 | 111,000 | - | |||||||||||||||
Carl C. Wertz | 15,000 | 12,000 | -20.0% | |||||||||||||||
Joseph Liu | 28,500 | 26,000 | -8.8% | |||||||||||||||
Mark A. King | 25,500 | 25,000 | -2.0% | |||||||||||||||
Richard D. White | 15,000 | 15,000 | - | |||||||||||||||
Name | 2007 | 2008 | Percent Change | |||||||||||||||
Keh-Shew Lu | - | - | - | |||||||||||||||
Carl C. Wertz | 3,750 | 3,000 | -20.0% | |||||||||||||||
Joseph Liu | 5,250 | 5,000 | -4.8% | |||||||||||||||
Mark A. King | 4,500 | 4,500 | - | |||||||||||||||
Richard D. White | 3,750 | 3,800 | 1.3% | |||||||||||||||
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Executive Benefits | Description | Who Qualifies | ||||||||
Automobile Usage Expense | • | Automobile allowance of $1,300 per month for the President and Chief Executive Officer. | All NEOs | |||||||
• | Automobile allowance of $1,000 per month for all other NEOs. | |||||||||
Health Insurance | • | Corporate group insurance. | All NEOs | |||||||
• | From January to April 2008, Mr. Joseph Liu also participated in the Company’s Taiwan health insurance plan. | |||||||||
Dental Insurance | • | Corporate group insurance. | All NEOs | |||||||
Vision Insurance | • | Corporate group insurance. | All NEOs | |||||||
Employee Assistance Program | • | Corporate employee assistance program. | All NEOs | |||||||
Retirement Plans | • | The 401(k) Plan matching contributions of $1 for every $2 contributed by the participant up to 6% (3% maximum matching) of the participant’s eligible payroll (subject to IRS regulations). | All NEOs | |||||||
• | Discretionary 401(k) contribution, the amount of which is to be determined each year. For 2008, no discretionary 401(k) contributions were made. | |||||||||
• | From January to April 2008, Mr. Joseph Liu also participated in the Company’s Taiwan pension plan. | |||||||||
Deferred Compensation Plan | • | Defer receipt of a portion of salary, cash bonus, equity or other specified compensation. | All NEOs | |||||||
• | Discretionary contribution made by the Company. For 2008, no discretionary contributions were made. | |||||||||
Life Insurance | • | Corporate group life insurance in the amount of $700,000. | All NEOs | |||||||
Accidental Death and Dismemberment | • | Insured in the amount of $700,000. | All NEOs | |||||||
Business Travel Accident Insurance | • | Tiered benefit with executive officers receiving $1,000,000 accidental death and dismemberment. | All NEOs | |||||||
• | $500,000 permanent total disability and $500 per week for accident total disability for covered injury resulting from a covered accident worldwide while on a business trip. | |||||||||
Short-Term Disability Insurance | • | Corporate group short-term disability: after elimination period of 30 days, 60% of weekly earnings are paid to a maximum of $1,250 per week. | All NEOs | |||||||
Long Term Disability Insurance | • | After elimination period of 180 days, 66 2/3% of basic monthly earnings to a maximum of $15,000 per month. | All NEOs | |||||||
Foreign Labor Insurance and Foreign Voluntary Workers Compensation | • | Combination of local “in-country” and excess or difference in conditions policies providing lost wages and medical expense due to injury while sustained on company business. | Mr. Joseph Liu | |||||||
• | Benefits based on statutory requirement of country of origin. | |||||||||
Health Club Membership | • | Corporate discount rate applied. | All NEOs | |||||||
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Dated: April 1, 2009 | THE COMPENSATION COMMITTEE | |
Raymond Soong, Chairman | ||
L.P. Hsu | ||
Shing Mao |
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Non- Equity | Change in | ||||||||||||||||||||||||||||||||||||||||||||
Incentive | Pension Value | ||||||||||||||||||||||||||||||||||||||||||||
Plan | and Non-quali- | ||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | Compen- | fied Deferred | All Other | |||||||||||||||||||||||||||||||||||||||||
Name and Principal | Bonus ($) | Awards ($) | Awards ($) | sation | Compensation | Compensation | Total | ||||||||||||||||||||||||||||||||||||||
Position | Year | Salary ($) | (3) | (1) | (1) | ($) (3) | Earnings ($) | ($) (4) | ($) | ||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||||||||
Keh-Shew Lu | 2008 | 343,000 | 763,114 | 1,167,750 | 1,154,787 | - | - | 30,285 | 3,458,936 | ||||||||||||||||||||||||||||||||||||
President and Chief | 2007 | 326,000 | 953,892 | 1,167,750 | 887,042 | - | - | 43,230 | 3,377,913 | ||||||||||||||||||||||||||||||||||||
Financial Officer | 2006 | 315,000 | - | 1,167,750 | 495,678 | 827,000 | - | 44,832 | 2,850,260 | ||||||||||||||||||||||||||||||||||||
Carl C. Wertz | 2008 | 170,000 | 170,000 | 60,389 | 198,976 | - | - | 28,011 | 627,376 | ||||||||||||||||||||||||||||||||||||
Chief Financial | 2007 | 165,000 | 251,024 | 38,528 | 217,866 | - | - | 40,975 | 713,394 | ||||||||||||||||||||||||||||||||||||
Officer, Secretary and Treasurer | 2006 | 164,000 | - | 15,652 | 204,692 | 283,000 | - | 39,799 | 707,143 | ||||||||||||||||||||||||||||||||||||
Joseph Liu | 2008 | 248,000 | 310,000 | 86,136 | 347,953 | - | - | 24,712 | 1,016,801 | ||||||||||||||||||||||||||||||||||||
Senior Vice | 2007 | 237,000 | 431,762 | 52,270 | 349,644 | - | - | 39,142 | 1,109,819 | ||||||||||||||||||||||||||||||||||||
President, Operations (2) | 2006 | 229,000 | - | 20,869 | 320,008 | 416,000 | - | 42,371 | 1,028,247 | ||||||||||||||||||||||||||||||||||||
Mark A. King | 2008 | 215,000 | 281,147 | 75,301 | 317,350 | - | - | 31,385 | 920,183 | ||||||||||||||||||||||||||||||||||||
Senior Vice | 2007 | 204,000 | 351,434 | 45,399 | 311,509 | - | - | 43,837 | 956,180 | ||||||||||||||||||||||||||||||||||||
President, Sales and Marketing | 2006 | 197,000 | - | 18,260 | 278,122 | 387,000 | - | 46,162 | 926,544 | ||||||||||||||||||||||||||||||||||||
Richard D. White | 2008 | 170,000 | 265,082 | 69,838 | 155,774 | - | - | 28,405 | 689,099 | ||||||||||||||||||||||||||||||||||||
Senior Vice | 2007 | 160,000 | 331,352 | 44,716 | 95,725 | - | - | 41,241 | 673,035 | ||||||||||||||||||||||||||||||||||||
President, Finance | 2006 | 75,000 | - | 15,615 | 31,406 | 140,000 | - | 29,579 | 291,600 | ||||||||||||||||||||||||||||||||||||
(1) | These amounts reflect the value determined by the Company for accounting purposes for these awards and do not reflect whether each NEO has actually realized a financial benefit from the awards. The value of the equity awards in columns (e) and (f) is calculated in accordance with the amount recognized for financial statement reporting purposes for the fiscal years ended December 31, 2008, 2007 and 2006 in accordance with SFAS 123(R). Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Amounts reported for RSUs and RSAs are calculated by multiplying the number of shares subject to the award by the closing price of the Company’s Common Stock on the grant date and then dividing by the vesting period. Amounts reported for stock options are determined using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of traded options, which have different characteristics than employee stock options, and changes to the subjective assumptions used in the model can result in materially different fair value estimates. See Note 17 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009, for a further discussion of the relevant valuation assumptions used in calculating grant date fair value pursuant to SFAS 123(R). |
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Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Stock | 2008 Stock | 2007 Stock | 2006 Stock | 2005 Stock | Option | |||||||||||||||||||||||||||||||||||||||||||||||
2008 RSUs | 2007 RSUs | 2006 RSUs | 2005 RSAs | Awards | Options | Options | Options | Options | Awards | |||||||||||||||||||||||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($)(e) | ($) | ($) | ($) | ($) | ($)(f) | ||||||||||||||||||||||||||||||||||||||||||
Keh-Shew Lu | - | - | - | 1,167,750 | 1,167,750 | 270,389 | 417,531 | 394,144 | 72,724 | 1,154,787 | ||||||||||||||||||||||||||||||||||||||||||
Carl C. Wertz | 12,228 | 23,119 | 25,043 | - | 60,389 | 29,231 | 56,423 | 60,060 | 53,261 | 198,976 | ||||||||||||||||||||||||||||||||||||||||||
Joseph Liu | 20,380 | 32,366 | 33,390 | - | 86,136 | 63,334 | 107,204 | 100,100 | 77,315 | 347,953 | ||||||||||||||||||||||||||||||||||||||||||
Mark A. King | 18,342 | 27,743 | 29,216 | - | 75,301 | 60,898 | 95,919 | 90,090 | 70,442 | 317,350 | ||||||||||||||||||||||||||||||||||||||||||
Richard D. White | 15,489 | 23,119 | 31,230 | - | 69,838 | 36,539 | 56,423 | 62,812 | - | 155,774 | ||||||||||||||||||||||||||||||||||||||||||
All equity awards granted since May, 2006 vest in four equal annual installments. Prior awards vest in three equal annual installments. | ||
(2) | Mr. Joseph Liu’s salary includes a payment of $5,080 payable in New Taiwan Dollars (“NT$”) (approximately NT$166,726), which, for the purpose of this table, was converted into US Dollars (“US$”) based on the currency exchange rate of NT$ 32.82 to US$ 1 on January 1, 2009. | |
(3) | Amounts earned based on the Company’s executive bonus plan. In 2007 and 2008, the Compensation Committee allocated the Executive Bonus Pool based on the Compensation Committee’s subjective assessment of the contribution made by each officer of the Company to the achievement of the Company’s performance. In 2006, the Executive Bonus Pool was based on such assessment as well as in accordance with the executive bonus plan. | |
(4) | Certain of the Company’s executive officers receive personal benefits in addition to salary, cash bonuses and share-based compensation, consisting of automobile allowance, life insurance payable at the direction of the employee, short-term and long-term disability insurance, business travel accident insurance, foreign labor insurance, foreign voluntary workers compensation, contributions under the Company’s retirement plans, group health insurance, dental insurance, vision insurance, employee assistance program, deferred compensation plan, and health club membership discount. The amount shown in column (i) for “All Other Compensation” includes benefits summarized in the following table for each NEO: |
Auto | Health | Retirement | Life & Disability | |||||||||||||||||||||||||||
Name | Year | Allowance ($) | Insurance ($) | Plans ($) | Insurance ($) | Total ($) | ||||||||||||||||||||||||
Keh-Shew Lu | 2008 | 15,600 | 4,666 | 6,900 | 3,118 | 30,285 | ||||||||||||||||||||||||
2007 | 15,600 | 4,261 | 20,250 | 3,118 | 43,230 | |||||||||||||||||||||||||
2006 | 15,600 | 4,212 | 22,000 | 3,020 | 44,832 | |||||||||||||||||||||||||
Carl C. Wertz | 2008 | 12,000 | 6,368 | 6,900 | 2,744 | 28,011 | ||||||||||||||||||||||||
2007 | 12,000 | 6,034 | 20,250 | 2,691 | 40,975 | |||||||||||||||||||||||||
2006 | 11,600 | 3,611 | 22,000 | 2,588 | 39,799 | |||||||||||||||||||||||||
Joseph Liu | 2008 | 10,130 | 5,278 | 6,900 | 2,404 | 24,712 | ||||||||||||||||||||||||
2007 | 10,130 | 5,105 | 21,171 | 2,737 | 39,142 | |||||||||||||||||||||||||
2006 | 10,130 | 6,485 | 22,928 | 2,828 | 42,371 | |||||||||||||||||||||||||
Mark A. King | 2008 | 12,000 | 9,490 | 6,900 | 2,995 | 31,385 | ||||||||||||||||||||||||
2007 | 12,000 | 8,817 | 20,250 | 2,770 | 43,837 | |||||||||||||||||||||||||
2006 | 11,600 | 9,890 | 22,000 | 2,672 | 46,162 | |||||||||||||||||||||||||
Richard D. White | 2008 | 12,000 | 6,762 | 6,900 | 2,744 | 28,405 | ||||||||||||||||||||||||
2007 | 12,000 | 6,285 | 20,250 | 2,706 | 41,241 | |||||||||||||||||||||||||
2006 | 5,750 | 3,156 | 18,219 | 2,454 | 29,579 | |||||||||||||||||||||||||
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All Other | All Other | ||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | ||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts | Awards: | Awards: | Grant Date | |||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive | Under Equity Incentive Plan | Number of | Number of | Exercise or | Fair Value of | ||||||||||||||||||||||||||||||||||||||||
Plan Awards | Awards | Shares of | Securities | Base Price of | Stock and | ||||||||||||||||||||||||||||||||||||||||
Maxi- | Maxi- | Stock or | Underlying | Options | Options | ||||||||||||||||||||||||||||||||||||||||
Threshold | Target | mum | Threshold | Target | mum | Units | Options | Awards | Awards | ||||||||||||||||||||||||||||||||||||
Name | Grant Date | ($) | ($) (1) | ($) | (#) | (#) | (#) | (#) (3) | (#) (3) | ($/Sh) | ($) (2) | ||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | �� | (j) | (k) | (l) | |||||||||||||||||||||||||||||||||
Keh-Shew Lu | - | - | 610,491 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | - | 111,000 | 27.95 | 1,854,093 | |||||||||||||||||||||||||||||||||||
Carl C. Wertz | - | - | 136,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | - | 12,000 | 27.95 | 200,443 | |||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | 3,000 | - | - | 83,850 | |||||||||||||||||||||||||||||||||||
Joseph Liu | - | - | 248,000 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | - | 26,000 | 27.95 | 434,292 | |||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | 5,000 | - | - | 139,750 | |||||||||||||||||||||||||||||||||||
Mark A. King | - | - | 224,918 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | - | 25,000 | 27.95 | 417,589 | |||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | 4,500 | - | - | 125,775 | |||||||||||||||||||||||||||||||||||
Richard D. White | - | - | 212,066 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | - | 15,000 | 27.95 | 250,553 | |||||||||||||||||||||||||||||||||||
5/29/2008 | - | - | - | - | - | - | 3,800 | - | - | 106,210 | |||||||||||||||||||||||||||||||||||
(1) | Amounts shown in column (d) were made under the executive bonus plan. Amounts shown are 80% of the 2008 bonus amount. Under the executive bonus plan, no bonus is paid if the Company does not achieve 80% of the bonus formula. | |
(2) | These amounts reflect the value determined by the Company for accounting purposes for these awards and do not reflect whether each NEO has actually realized a financial benefit from the awards. Grant date fair value of RSAs, RSUs and stock options is calculated in accordance with the amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2008 in accordance with SFAS 123(R). Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Grant date fair value reported for RSUs and RSAs is calculated by multiplying the number of shares subject to the award by the closing price of the Company’s Common Stock on the grant date and then dividing by the vesting period. Amounts reported for stock options are determined using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of traded options, which have different characteristics than employee stock options, and changes to the subjective assumptions used in the model can result in materially different fair value estimates. See Note 17 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009, for a further discussion of the relevant valuation assumptions used in calculating grant date fair value pursuant to SFAS 123(R). | |
(3) | Awards shown in columns (i) and (j) were made under the 2001 Incentive Plan. |
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Option Awards | �� | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||
Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Equity | Incentive | ||||||||||||||||||||||||||||||||||||||||||||||
Incentive | Plan | ||||||||||||||||||||||||||||||||||||||||||||||
Plan | Awards: | ||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Market or | ||||||||||||||||||||||||||||||||||||||||||||||
Equity | Number | Payout | |||||||||||||||||||||||||||||||||||||||||||||
Incentive | of | Value of | |||||||||||||||||||||||||||||||||||||||||||||
Plan | Market | Unearned | Unearned | ||||||||||||||||||||||||||||||||||||||||||||
Awards: | Value of | Shares, | Shares, | ||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Shares or | Units or | Units of | ||||||||||||||||||||||||||||||||||||||||||
Securities | Securities | Securities | Units of | Other | Other | ||||||||||||||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Number of | Stock | Rights | Rights | |||||||||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Shares or Units | That Have | That Have | That Have | ||||||||||||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | of Stock That | Not | Not | Not | |||||||||||||||||||||||||||||||||||||||
(#) | (#) (1) | Options | Price | Expiration | Have Not Vested | Vested | Vested | Vested | |||||||||||||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | (#) | ($) | Date | (#) (1) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||||||||||
Keh-Shew Lu | 43,875 | - | - | 8.1422 | 07/14/2014 | 202,500 | (5) | 1,227,150 | - | - | |||||||||||||||||||||||||||||||||||||
118,125 | - | - | 11.5333 | 04/14/2015 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
59,062 | 59,063 | (2) | - | 22.2600 | 05/22/2016 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
27,750 | 83,250 | (3) | - | 24.6600 | 05/31/2017 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
- | 111,000 | (4) | - | 27.9500 | 05/29/2018 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Carl C. Wertz | 12,042 | - | - | 7.0864 | 06/12/2010 | 2,250 | (2) | 48,862 | - | - | |||||||||||||||||||||||||||||||||||||
30,376 | - | - | 8.1422 | 07/14/2014 | 2,813 | (3) | - | - | - | ||||||||||||||||||||||||||||||||||||||
34,875 | - | - | 15.5422 | 07/12/2015 | 3,000 | (4) | - | - | - | ||||||||||||||||||||||||||||||||||||||
9,000 | 9,000 | (2) | - | 22.2600 | 05/22/2016 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
3,750 | 11,250 | (3) | - | 24.6600 | 05/31/2017 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
- | 12,000 | (4) | - | 27.9500 | 05/29/2018 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Joseph Liu | 60,750 | - | - | 7.0864 | 06/12/2010 | 3,000 | (2) | 72,344 | - | - | |||||||||||||||||||||||||||||||||||||
40,500 | - | - | 2.4652 | 07/30/2011 | 3,938 | (3) | - | - | - | ||||||||||||||||||||||||||||||||||||||
50,625 | - | - | 2.5274 | 06/28/2012 | 5,000 | (4) | - | - | - | ||||||||||||||||||||||||||||||||||||||
50,625 | - | - | 5.7955 | 08/01/2013 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
50,625 | - | - | 8.1422 | 07/14/2014 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
50,626 | - | - | 15.5422 | 07/12/2015 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
15,000 | 15,000 | (2) | - | 22.2600 | 05/22/2016 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
7,125 | 21,375 | (3) | - | 24.6600 | 05/31/2017 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
- | 26,000 | (4) | - | 27.9500 | 05/29/2018 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Mark A. King | 60,750 | - | - | 7.0864 | 06/12/2010 | 2,625 | (2) | 63,630 | - | - | |||||||||||||||||||||||||||||||||||||
40,500 | - | - | 5.7955 | 08/01/2013 | 3,375 | (3) | - | - | - | ||||||||||||||||||||||||||||||||||||||
40,500 | - | - | 8.1422 | 07/14/2014 | 4,500 | (4) | - | - | - | ||||||||||||||||||||||||||||||||||||||
46,125 | - | - | 15.5422 | 07/12/2015 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
13,500 | 13,500 | (2) | - | 22.2600 | 05/22/2016 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
6,375 | 19,125 | (3) | - | 24.6600 | 05/31/2017 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
- | 25,000 | (4) | - | 27.9500 | 05/29/2018 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
Richard D. White | 7,500 | 7,500 | (2) | - | 27.7600 | 07/03/2016 | 2,250 | (2) | 30,682 | - | - | ||||||||||||||||||||||||||||||||||||
3,750 | 11,250 | (3) | - | 24.6600 | 05/31/2017 | 2,813 | (3) | - | - | - | |||||||||||||||||||||||||||||||||||||
- | 15,000 | (4) | - | 27.9500 | 05/29/2018 | 3,800 | (4) | - | - | - | |||||||||||||||||||||||||||||||||||||
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(Footnotes continued from previous page) | ||
(1) | Equity awards granted prior to May 22, 2006 vest in three equal annual installments on the first three anniversary dates of the date of grant. Equity awards granted on or after May 22, 2006 vest in four equal annual installments on the first four anniversary dates of the date of grant. | |
(2) | Awards vest in four equal annual installments beginning May 22, 2007. | |
(3) | Awards vest in four equal annual installments beginning May 31, 2008. | |
(4) | Awards vest in four equal annual installments beginning May 29, 2009. | |
(5) | Awards vest in two equal installments on April 14, 2008 and April 15, 2009. |
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Option Awards | Stock Awards | |||||||||||||||||
Number of Shares | ||||||||||||||||||
Acquired on | Number of Shares | |||||||||||||||||
Exercise | Value Realized on | Acquired on Vesting | Value Realized on | |||||||||||||||
Name | (#) | Exercise ($) | (#) | Vesting ($) | ||||||||||||||
(a) | (b) | (c) | (d) | (e) | ||||||||||||||
Carl C. Wertz | - | - | 2,062 | 57,187 | ||||||||||||||
Joseph Liu | - | - | 2,812 | 78,018 | ||||||||||||||
Mark A. King | - | - | 2,438 | 67,630 | ||||||||||||||
Richard D. White | - | - | 2,062 | 54,802 | ||||||||||||||
Number of Securities | ||||||
Remaining Available for | ||||||
Number of Securities to | Weighted-Average | Future Issuance Under Equity | ||||
be Issued Upon Exercise | Exercise Price of | Compensation Plans | ||||
of Outstanding Options, | Outstanding Options, | (Excluding Securities | ||||
Warrants and Rights | Warrants and Rights | Reflected in Column (a)) | ||||
Plan Category | (a) | (b) | (c) | |||
Equity Compensation Plans Approved by Security Holders | 4,677,848(1) | $11.60(2) | 1,929,303(3) | |||
Equity Compensation Plans Not Approved by Security Holders | 0 | N/A | 0 | |||
Total | 4,677,848 | $11.60 | 1,929,303 |
(1) | Shares issuable pursuant to outstanding options and awards under the 1993 NQO Plan, the 1993 ISO Plan, and the 2001 Incentive Plan as of December 31, 2008. | |
(2) | Weighted average exercise price based on 3,852,574 stock options outstanding. | |
(3) | Represents 1,796,553 and 132,750 shares of Common Stock that may be issued pursuant to future awards under the 2001 Incentive Plan and the 1969 Incentive Bonus Plan, respectively. |
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Executive | Registrant | Aggregate | |||||||||||||||||
Contributions in | Contributions in | Aggregate Earnings | Withdrawls/ | Aggregate Balance | |||||||||||||||
Last FY | Last FY | in Last FY | Distributions | at Last FYE | |||||||||||||||
Name | ($) (1) | ($) | ($) (7) | ($) | ($) | ||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | ||||||||||||||
Keh-Shew Lu | - | - | (39,253 | ) | - | 178,281(4) | |||||||||||||
Carl C. Wertz | 295,772(2) | - | (102,029 | ) | - | 297,720(5) | |||||||||||||
Mark A. King | 562,839(3) | - | (101,781 | ) | - | 762,022(6) | |||||||||||||
Richard D. White | - | - | - | - | - | ||||||||||||||
(1) | Contributions are reported as compensation in the last completed fiscal year in the Summary Compensation Table. | |
(2) | Includes $240,794 of deferred cash compensation and $54,978 of deferred equity compensation from stock awards that are reported in the Summary Compensation Table for 2008. | |
(3) | Includes $497,805 of deferred cash compensation and $65,034 of deferred equity compensation from stock awards that are reported in the Summary Compensation Table for 2008. | |
(4) | Includes 2007 deferred cash compensation of $203,946 reported in the Summary Compensation Table for 2007. | |
(5) | Includes 2007 deferred cash compensation of $71,792 and $27,105 of deferred equity compensation from stock awards that are reported in the Summary Compensation Table for 2007. | |
(6) | Includes 2007 deferred cash compensation of $259,112 and $31,623 of deferred equity compensation from stock awards that are reported in the Summary Compensation Table for 2007. | |
(7) | Amounts shown are as a result of decrease in the values of the NEO’s deferred compensation due to loss based on the NEO’s investment allocations, which may include stocks, bonds and mutual fund shares. |
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• | the willful and continued refusal of the executive to substantially perform his duties in accordance with his employment agreement, after the Board has provided the executive with written demand for substantial performance and the executive has had reasonable opportunity to remedy it; | ||
• | the conviction of, or a plea of nolo contendere by, the executive to a felony; or | ||
• | a charge or indictment of a felony, the defense of which renders the executive substantially unable to perform his duties under his employment agreement. |
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• | any person, including a group as defined in Section 13(d)(3) of the Exchange Act, as amended, becoming the beneficial owner of stock of the Company which entitles such holder to cast 25% or more of the total number of votes for the election of the Board; | ||
• | a cash tender offer, exchange offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, in which the directors of the Company immediately prior to such event cease to be a majority of the Board; | ||
• | the stockholders of the Company approving an agreement providing for either the Company to cease being a public company or for the sale of substantially all the assets of the Company; or | ||
• | a tender offer or exchange offer (other than one made by the Company) in which the shares of the Company’s stock are acquired. |
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VoluntaryTermination | |||||||||||||||||
or Termination With | Termination | ||||||||||||||||
Cause, or Death, or | Without Cause ($) | Change in Control | |||||||||||||||
Name | Disability ($) (1) | (1) (2) | ($) (1) (3) | ||||||||||||||
Keh-Shew Lu | - | 1,934,127 | 1,227,150 | ||||||||||||||
Carl C. Wertz | - | 408,435 | 48,862 | ||||||||||||||
Joseph Liu | - | 595,103 | 72,344 | ||||||||||||||
Mark A. King | - | 522,654 | 63,630 | ||||||||||||||
Richard D. White | - | - | 53,710 | ||||||||||||||
(1) | Does not include the following amounts that could be realized upon exercising vested stock options: |
Amount | |||||
Name | ($) | ||||
Keh-Shew Lu | - | ||||
Carl C. Wertz | - | ||||
Joseph Liu | 337,816 | ||||
Mark A. King | 10,711 | ||||
Richard D. White | - | ||||
Amount | |||||
Name | ($) | ||||
Keh-Shew Lu | 122,500 | ||||
Carl C. Wertz | 89,161 | ||||
Joseph Liu | 115,158 | ||||
Mark A. King | 104,159 | ||||
Richard D. White | 89,161 | ||||
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(2) | The following table reflects the estimate of the payments and benefits that each NEO would receive assuming the NEO’s employment was terminated without “cause” on December 31, 2008, and the NEO chose to commence the LOA beginning on January 1, 2009. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the NEOs, which would only be known at the time they become eligible for such payments. |
Medical | Life Insurance, | ||||||||||||||||||||||||||||||||||||
Benefits | Disability and | Continued Vesting | |||||||||||||||||||||||||||||||||||
Base Salary ($) | Bonus ($) | Paid Vacation | ($) | Death Benefits ($) | of Share-based | ||||||||||||||||||||||||||||||||
Name | (a) | (b) | ($) | (c) | (d) | Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||
Keh-Shew Lu | 686,000 | - | 13,192 | 4,666 | 3,118 | 1,227,150 | 1,934,127 | ||||||||||||||||||||||||||||||
Carl C. Wertz | 340,000 | - | 10,462 | 6,368 | 2,744 | 48,862 | 408,435 | ||||||||||||||||||||||||||||||
Joseph Liu | 496,000 | - | 19,077 | 5,278 | 2,404 | 72,344 | 595,103 | ||||||||||||||||||||||||||||||
Mark A. King | 430,000 | - | 16,538 | 9,490 | 2,995 | 63,630 | 522,654 | ||||||||||||||||||||||||||||||
Richard D. White | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
(a) | For purposes of determining this amount, the executive would receive his current base salary during the LOA and the one-year following the LOA. For the LOA, the base salary will be paid over the year, in accordance with the Company’s payroll practices. Payment of the base salary for the one year following the LOA will be paid in a lump sum. | |
(b) | Any bonus amount would be prorated based on days employed in 2009 and calculated using actual 2009 results per the performance criteria in accordance with the Company’s executive bonus plan. | |
(c) | Reflects the estimated lump sum value of premiums to be paid on behalf of the executive under the medical benefit plans during the LOA. | |
(d) | Reflects the estimated lump sum value of cost of coverage for life insurance, disability, and death benefits to be paid on behalf of the executive during the LOA. Does not include a $700,000 benefit for each NEO employed in the U.S. paid by the Company’s life insurance policy upon death. | |
Does not include the following short- and long-term disability payments for two years paid by disability insurance policies: |
Amount | |||||
Name | ($) | ||||
Keh-Shew Lu | 167,500 | ||||
Carl C. Wertz | 117,492 | ||||
Joseph Liu | 156,488 | ||||
Mark A. King | 139,989 | ||||
Richard D. White | - | ||||
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(3) | Represents the value of the accelerated vesting of the following shares underlying options, RSAs and RSUs assuming a change in control occurs on December 31, 2008: |
Name | Options | RSA/RSU | Total Shares | ||||||||||||||
Keh-Shew Lu | 253,313 | 202,500 | 455,813 | ||||||||||||||
Carl C. Wertz | 32,250 | 8,063 | 40,313 | ||||||||||||||
Joseph Liu | 62,375 | 11,938 | 74,313 | ||||||||||||||
Mark A. King | 57,625 | 10,500 | 68,125 | ||||||||||||||
Richard D.White | 33,750 | 8,863 | 42,613 | ||||||||||||||
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Changes in Pension | |||||||||||||||||||||||||||||||
Value and | |||||||||||||||||||||||||||||||
Fees | Nonqualified | ||||||||||||||||||||||||||||||
Earned or | Non-Equity | Deferred | |||||||||||||||||||||||||||||
Paid in | Stock | Option | Incentive Plan | Compensation | All Other | ||||||||||||||||||||||||||
Cash | Awards | Awards | Compensation | Earnings | Compensation | Total | |||||||||||||||||||||||||
Name | ($) | ($) (1)(2) | ($) (1)(2) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | ||||||||||||||||||||||||
Raymond Soong | 80,000 | 446,082 | 314,017 | - | - | - | 840,099 | ||||||||||||||||||||||||
C.H Chen | 80,000 | 572,295 | 51,945 | - | - | - | 704,241 | ||||||||||||||||||||||||
Michael R. Giordano | 100,000 | 122,934 | 120,532 | - | - | - | 343,465 | ||||||||||||||||||||||||
John M. Stich | 90,000 | 116,673 | 101,500 | - | - | - | 308,174 | ||||||||||||||||||||||||
Shing Mao | 80,000 | 104,152 | 82,469 | - | - | - | 266,621 | ||||||||||||||||||||||||
L.P. Hsu | 90,000 | 49,893 | - | - | - | - | 139,893 | ||||||||||||||||||||||||
(1) | These amounts reflect the value determined by the Company for accounting purposes for these awards and do not reflect whether each director has actually realized benefit from the awards. The value of the equity awards in column (c) and (d) is calculated in accordance with the amount recognized for financial statement reporting purposes for the fiscal year ended December 31, 2008 in accordance with SFAS 123(R). Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Amounts reported for stock awards include RSUs and are calculated by multiplying the number of shares subject to the award by the closing price of the Company’s Common Stock on the grant date and then dividing by the vesting period. Amounts reported for stock options are determined using the Black-Scholes option-pricing model. This model was developed to estimate the fair value of traded options, which have different characteristics than employee stock options, and changes to the subjective assumptions used in the model can result in materially different fair value estimates. See Note 17 to the Company’s audited financial statements for the fiscal year ended December 31, 2008, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2009, for a further discussion of the relevant valuation assumptions used in calculating grant date fair value pursuant to SFAS 123(R). |
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(2) | Under the Company’s 2008 director compensation plan, each non-employee director listed in the table above was granted an award of 4,300 RSUs on May 29, 2008, except Mr. Raymond Soong, Chairman of the Board, and Mr. C.H. Chen, Vice Chairman of the Board, who were granted an award of 21,500 and 14,700, respectively, on May 29, 2008. Each of these awards to the Company’s non-employee directors, except Mr. Soong and Mr. Chen, had a grant date fair value of $120,185. Awards to Mr. Soong and Mr. Chen had grant date fair values of $600,925 and $410,865, respectively. The following table details the amounts in column (c) and (d) of the previous table and represents the SFAS 123(R) expense in 2008 for each of the equity awards: |
2008 | 2007 | 2006 | 2005 | Total | ||||||||||||||||||||||||||||||||||||||||||
Total Stock | Stock | Stock | Stock | Stock | Option | |||||||||||||||||||||||||||||||||||||||||
2008 RSUs | 2007 RSUs | 2006 RSUs | 2005 RSAs | Awards ($) | Options | Options | Options | Options | Awards ($) | |||||||||||||||||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | (c) | ($) | ($) | ($) | ($) | (d) | ||||||||||||||||||||||||||||||||||||
Raymond Soong | 87,635 | 166,455 | 191,993 | - | 446,082 | - | - | - | 314,017 | 314,017 | ||||||||||||||||||||||||||||||||||||
C.H Chen | 59,918 | 110,970 | 141,908 | 259,500 | 572,295 | - | - | - | 51,945 | 51,945 | ||||||||||||||||||||||||||||||||||||
Michael R. Giordano | 17,527 | 32,366 | 73,041 | - | 122,934 | - | - | - | 120,532 | 120,532 | ||||||||||||||||||||||||||||||||||||
John M. Stich | 17,527 | 32,366 | 66,780 | - | 116,673 | - | - | - | 101,500 | 101,500 | ||||||||||||||||||||||||||||||||||||
Shing Mao | 17,527 | 32,366 | 54,259 | - | 104,152 | - | - | - | 82,469 | 82,469 | ||||||||||||||||||||||||||||||||||||
L.P. Hsu | 17,527 | 32,366 | - | - | 49,893 | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Restricted Stock | |||||||
Units/Awards | |||||||
Name | (in shares) | ||||||
Raymond Soong | 59,000 | ||||||
C.H Chen | 85,950 | ||||||
Michael R. Giordano | 14,801 | ||||||
John M. Stich | 14,238 | ||||||
Shing Mao | 13,113 | ||||||
L.P. Hsu | 8,238 | ||||||
Name | Options (in shares) | ||||||
Raymond Soong | 761,063 | ||||||
C.H Chen | 320,625 | ||||||
Michael R. Giordano | 133,875 | ||||||
John M. Stich | 113,625 | ||||||
Shing Mao | 223,875 | ||||||
L.P. Hsu | - | ||||||
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• | Chairman of the Board: 21,500 shares | ||
• | Vice Chairman: 14,700 shares | ||
• | All other directors: 4,300 shares. |
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• | Reviewed and discussed with management the audited financial statements contained in the Company’s Annual Report on Form 10-K for fiscal 2008; and | |
• | Obtained from management their representation that the Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States. |
• | Discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (“Communication with Audit Committees”); and | |
• | Received and discussed with the independent registered public accounting firm the written disclosures and the letter from the independent registered public accounting firm required by the Public Company Accounting Oversight Board as currently in effect (“Independence Discussions with Audit Committees”), and reviewed and discussed with the independent registered public accounting firm whether the rendering of the non-audit services provided by them to the Company during fiscal 2008 was compatible with their independence. |
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Dated: April 1, 2009 | THE AUDIT COMMITTEE | |
Michael R. Giordano, Chairman | ||
L.P. Hsu | ||
John M. Stich |
• | the Audit Committee shall review any proposed agreement or arrangement relating to a related person transaction or series of related person transactions, and any proposed amendment to any such agreement or arrangement; | |
• | the Audit Committee shall establish standards for determining whether the transactions covered by such proposed agreement or arrangement are on terms no less favorable to the Company than could be obtained from an unrelated third party (“fair to the Company”); | |
• | before the Company enters into any such proposed agreement or arrangement, and at least annually thereafter, the Company’s internal audit department shall report to the Audit Committee whether the transactions covered by such agreement or arrangement are fair to the Company under the standards established by the Audit Committee; | |
• | the Audit Committee shall make all reasonable efforts (taking into account the cost thereof to the Company) to cancel or to renegotiate any such agreement or arrangement which is not so determined to be fair to the Company; and | |
• | the Company will disclose any related person transactions required to be disclosed by the rules promulgated by the SEC, in the manner so required. |
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• | Increase the number of shares of Common Stock that may be issued pursuant to awards granted thereunder by 5,000,000 shares. | ||
• | Extend the term of the 2001 Incentive Plan until May 28, 2019. | ||
• | Provide that the “gross” number of shares of Common Stock subject to awards shall be used for purposes of (i) computing the total number of shares of Common Stock available for awards under the 2001 Incentive Plan, (ii) computing the total number of shares of Common Stock to be made available for awards under the 2001 Incentive Plan after any such awards are forfeited, terminated, expire unexercised, settled or paid in cash in lieu of stock or exchanged for other awards, (iii) computing the number of shares used to settle a stock appreciation right upon exercise, and (iv) computing the number of shares issued in a cashless exercise of a stock option. | ||
• | Provide that a Change in Control shall have occurred in the event the Company ceases to be an independent publicly owned corporation or a sale or other disposition is completed for all or substantially all the assets of the Company. Currently, a Change in Control shall have occurred if the stockholders of the Company approved an agreement providing such a transaction. | ||
• | Provide that a stock appreciation right shall accrue in value from the date of grant over a maximum of a ten year time period. | ||
• | Provide that the maximum amount payable for any calendar year pursuant to a performance unit grant under the 2001 Incentive Plan shall be $5,000,000. Currently, such limit is $4,000,000. |
EQUITY INCENTIVE PLAN
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Description | 2007 | 2008 | ||||||||||
Audit Fees, including fees for professional services necessary to perform an audit or review in accordance with the standards of the Public Company Accounting Oversight Board, including services rendered for the audit of the Company’s financial statements (including services incurred with rendering an opinion under Section 404 of the Sarbanes-Oxley Act of 2002) included in the Annual Report on Form 10-K and review of financial statements included in the Quarterly Reports on Form 10-Q, and including the Zetex acquisition. | $702,000 | $913,000 | ||||||||||
Tax-related Fees,professional services for income tax return preparation, tax advice (including Zetex acquisition accounting, and tax planning). | $96,000 | $118,000 | ||||||||||
All Other Fees,not included in above. | $31,000 | $6,000 | ||||||||||
Total | $829,000 | $1,037,000 | ||||||||||
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By Order of the Board of Directors, DIODES INCORPORATED | ||||
/s/ Carl C. Wertz | ||||
Carl C. Wertz, | ||||
Secretary | ||||
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(As Amended February 6, 2009)
1. | Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. | ||
2. | Review the annual audited financial statements with management, including major issues regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect the Company’s financial statements. | ||
3. | Review an analysis prepared by management and the independent auditor of significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements. | ||
4. | Review with management and the independent auditor the Company’s annual and quarterly financial statements prior to the filing of its Form 10-K and 10-Q. | ||
5. | Meet periodically with management to review the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures. | ||
6. | Review major changes to the Company’s auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management. | ||
7. | Recommend to the Board the appointment of the independent auditor, which firm is ultimately accountable to the Audit Committee and the Board. | ||
8. | Has the authority and responsibility for appointment, compensation, retention, and oversight of the work of independent auditors, including resolution of disagreements between management and the auditors regarding financial reporting. | ||
9. | Pre-approve all audit and permitted non-audit services to be performed by the independent auditors. | ||
10. | Receive periodic reports from the independent auditor regarding the auditor’s independence consistent with Independence Standards Board Standard 1, discuss such reports with the auditor, and if so determined by the Audit Committee, take or recommend that the Board take appropriate action to oversee the independence of the auditor. | ||
11. | Evaluate together with the Board the performance of the independent auditor and, if so determined by the Audit Committee, recommend that the Board replace the independent auditor. |
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12. | Appoint and replace | ||
13. | Review any significant reports to management prepared by the internal auditing department and management’s responses. | ||
14. | Meet with the independent auditor prior to the audit to review the planning and staffing of the audit. | ||
15. | Obtain from the independent auditor assurance that Section 10A of the Securities Exchange Act of 1934 has not been implicated. | ||
16. | Obtain reports from management, the Company’s senior internal auditing executive and the independent auditor that the Company’s subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company’s code of conduct. | ||
17. | Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 and the requirement of Section 204 of Sarbanes-Oxley Act of 2002 relating to the conduct of the audit before the reports issuance of auditors. | ||
18. | Review with the independent auditor any problems or difficulties the auditor may have encountered and any management letter provided by the auditor and the Company’s response to that letter. Such review should include: |
a. | Any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information. | ||
b. | Any changes required in the planned scope of the audit. | ||
c. | The responsibilities, budget and staffing of the internal audit department, if any. |
19. | Supervise preparation of the report required by the rules of the Securities and Exchange Commission to be included in the Company’s annual proxy statement. | ||
20. | Advise the Board from time to time with respect to the Company’s policies and procedures regarding compliance with applicable laws and regulations and with the Company’s code of conduct. | ||
21. | Meet with the Company’s legal counsel to review legal matters that may have a material impact on the financial statements, the Company’s compliance policies and any material reports or inquiries received from regulators or governmental agencies. | ||
22. | Meet at least annually with the Chief Financial Officer, the senior internal auditing executive and the independent auditor in separate executive sessions. | ||
23. | Conduct an appropriate review of all related party transactions for potential conflict of interest situations on an ongoing basis, all in accordance with such procedures as the Audit Committee may adopt from time to time. | ||
24. | Establish procedures, under confidential and anonymous submission, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting control or auditing matters. | ||
25. | While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. |
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2001 OMNIBUS EQUITY INCENTIVE PLAN
(As Amended May 28, 2009
Diodes Incorporated, a Delaware corporation (the “Company”), by action of its Board of Directors, hereby adopt the Diodes Incorporated 2001 Omnibus Equity Incentive Plan (the “Plan”) with the following provisions: | |||
1. | Purpose | ||
The purpose of the Plan is to promote and advance the interests of the Company and its stockholders by enabling the Company and its Subsidiaries to attract, retain and motivate officers, directors, employees and independent contractors by providing for performance-based benefits, and to strengthen the mutuality of interests between such persons and the Company’s stockholders. The Plan is designed to meet this intent by offering performance-based stock and cash incentives and other equity-based incentive awards, thereby providing a proprietary interest in pursuing the long-term growth, profitability and financial success of the Company. | |||
2. | Definitions | ||
For purposes of this Plan, the following terms shall have the meanings set forth below: | |||
“Affiliate” shall mean any parent or subsidiary (as defined in Sections 424(e) and (f) of the Code) of the Company. | |||
“Award” means an award or grant made to a Participant under Sections 6 through 10, inclusive, of the Plan. | |||
“Board” means the Board of Directors of the Company. | |||
“Change in Control” means the occurrence of any one (or more) of the following events: |
(i) | Any person, including a group as defined in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner of stock of the Company with respect to which twenty-five percent (25%) or more of the total number of votes for the election of the Board may be cast; | ||
(ii) | As a result of, or in connection with, any cash tender offer, exchange offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, persons who were directors of the Company just prior to such event shall cease to constitute a majority of the Board; | ||
(iii) | |||
(iv) | A tender offer or exchange offer is made for the shares of the Common Stock (other than one made by the Company) and the shares of the Common Stock are acquired thereunder. |
Notwithstanding the foregoing, the formation of a holding company for the Company in which the stockholdings of the holding company after its formation are substantially the same as for the Company prior to the holding company formation does not constitute a Change in Control for purposes of this Plan. | |||
“Code” means the Internal Revenue Code of 1986, as amended and in effect from time to time, or any successor thereto, together with rules, regulations and authoritative interpretations promulgated thereunder. | |||
“Committee” means the committee of the Board that is provided for in Section 3 of the Plan. | |||
“Common Stock” means the common stock of the Company or any security of the Company issued in |
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substitution, exchange or lieu thereof. | |||
“Company” means Diodes Incorporated, a Delaware corporation. | |||
“Consultant” means any natural person who performs bona fide services for the Company or an Affiliate as a consultant or advisor, excluding Employees and Non-Employee Directors. | |||
“Date of Grant” means the date the Committee (or the Board, as the case may be) takes formal action designating that a Participant shall receive an Award, notwithstanding the date the Participant accepts the Award, the date the Company and the Participant enter into a written agreement with respect to the Award, or any other date. | |||
“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. | |||
“Employee” means any individual who is a common-law employee of the Company or an Affiliate. | |||
“Exchange Act” means the Securities Exchange Act of 1934, as amended and in effect from time to time, or any successor thereto. | |||
“Fair Market Value” means on any given date, the closing price for the Common Stock on such date, or, if the Common Stock was not traded on such date, on the next preceding day on which the Common Stock was traded, determined in accordance with the following rules: |
(i) | If the Common Stock is admitted to trading or listing on a national securities exchange registered under the Exchange Act, the closing price for any day shall be the last reported sale price, or in the case no such reported sale takes place on such date, the average of the last reported bid and ask prices, in either case on the principal national securities exchange on which the Common Stock is admitted to trading or listed; | ||
(ii) | If not listed or admitted to trading on any national securities exchange, the last sale price of the Common Stock on the National Association of Securities Dealers Automated Quotation National Market System (“NMS”) or, in the case no such reported sale takes place, the average of the closing bid and ask prices on such date; | ||
(iii) | If not quoted on the NMS, the average of the closing bid and ask prices of the Common Stock on the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) or any comparable system; or | ||
(iv) | If the Common Stock is not listed on NASDAQ or any comparable system, the closing bid and ask prices as furnished by any member of the National Association of Securities Dealers, Inc., selected from time to time by the Committee for that purpose. |
“Incentive Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is intended to be and is specifically designated as an “incentive stock option” within the meaning of Section 422 of the Code. | |||
“Non-Employee Director” means a non-Employee member of the Board. | |||
“Non-Qualified Stock Option” means any Stock Option granted pursuant to the provisions of Section 6 of the Plan that is not an Incentive Stock Option. | |||
“Optioned Stock” means the shares of Common Stock that are subject to a Stock Option. | |||
“Participant” means an Employee, Non-Employee Director, or Consultant of the Company or a Subsidiary who is granted an Award under the Plan. | |||
“Performance Award” means an Award granted pursuant to the provisions of Section 9 of the Plan, the vesting of which is contingent on the attainment of specified performance criteria. |
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“Performance Share Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 9 of the Plan. | |||
“Performance Unit Grant” means an Award of monetary units granted pursuant to the provisions of Section 9 of the Plan. | |||
“Plan” means this Diodes Incorporated 2001 Omnibus Equity Incentive Plan, as set forth herein and as it may be hereafter amended and from time to time in effect. | |||
“Qualified Note” means a recourse note, with a fixed market rate of interest, that may, at the discretion of the Committee, be secured by the Optioned Stock or otherwise. | |||
“Restricted Award” means an Award granted pursuant to the provisions of Section 8 of the Plan. | |||
“Restricted Stock Grant” means an Award of shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan. | |||
“Restricted Unit Grant” means an Award of units representing shares of Common Stock granted pursuant to the provisions of Section 8 of the Plan. | |||
“Service” means the performance of services for the Company (or any Affiliate) by an Employee, Non-Employee Director, or Consultant, as determined by the Committee in its sole discretion. Service shall not be considered interrupted in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company and any Affiliate, or any successor. A leave of absence approved by the Company shall include sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract, including Company policies. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 91st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option. | |||
“Stock Appreciation Right” means an Award to benefit from the appreciation of Common Stock granted pursuant to the provisions of Section 7 of the Plan. | |||
“Stock Option” means an Award to purchase shares of Common Stock granted pursuant to the provisions of Section 6 of the Plan. | |||
“Subsidiary” means any corporation or entity which is a subsidiary of the Company within the meaning of Section 424(f) of the Code. | |||
“Ten Percent Stockholder” means a person who owns stock (after taking into account the constructive ownership rules of Section 424(d) of the Code) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company (or any Affiliate). | |||
“Termination Date” means the date on which a Participant’s Service terminates, as determined by the Committee in its sole discretion. | |||
3. | Administration. | ||
(a) | The Plan shall be administered by a committee appointed by the Board. The Committee shall be comprised solely of not less than two persons who are “outside directors” within the meaning of Section 162(m)(4)(C) of the Code and “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act. Members of the Committee shall serve at the pleasure of the Board and the Board may from time to time remove members from, or add members to, the Committee. No person who is not an “outside director” within the meaning of Section 162(m)(4)(C) of the Code and a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act may serve on the Committee. Appointment to the Committee of any person who is not an “outside director” and a “non-employee director” shall automatically be null and void, and any person on the Committee who ceases to be an “outside director” |
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and a “non-employee director” shall automatically and without further action cease to be a member of the Committee. | |||
(b) | A majority of the members of the Committee shall constitute a quorum for the transaction of business. Action approved in writing by a majority of the members of the Committee then serving shall be as effective as if the action had been taken by unanimous vote at a meeting duly called and held. | ||
(c) | The Committee is authorized to construe and interpret the Plan, to promulgate, amend, and rescind rules and procedures relating to the implementation of the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. Any determination, decision, or action of the Committee in connection with the construction, interpretation, administration, or application of the Plan shall be binding upon all Participants and any person claiming under or through any Participant. Although the Committee is anticipated to make certain Awards that constitute “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, the Committee is also expressly authorized to make Awards that do not constitute “performance-based compensation” within the meaning of that provision. By way of example, and not by way of limitation, the Committee, in its sole and absolute discretion, may issue an Award that is not based on a performance goal, as set forth in (i) below, but is based solely on continued service to the Company. | ||
(d) | The Committee may employ or retain persons other than members of the Committee to assist the Committee to carry out its responsibilities under such conditions and limitations as it may prescribe, except that the Committee may not delegate its authority with regard to selection for participation of and the granting of Awards to persons subject to Section 16 of the Exchange Act or with regard to any of its duties under Section 162(m) of the Code necessary for awards under this Plan to qualify as “performance-based compensation” for purposes of Section 162(m)(4)(C) of the Code. | ||
(e) | The Committee is expressly authorized to make such modifications to the Plan as are necessary to effectuate the intent of the Plan as a result of any changes in the income tax, accounting, or securities law treatment of Participants and the Plan. | ||
(f) | The Company shall effect the granting of Awards under the Plan in accordance with the determinations made by the Committee, by execution of instruments in writing in such form as approved by the Committee. | ||
(g) | The Committee may not increase an Award once granted, although it may grant additional Awards to the same Participant. | ||
(h) | The Committee shall keep the Board informed as to its actions and make available to the Board its books and records. Although the Committee has the authority to establish and administer the Plan, the Board reserves the right at any time to abolish the Committee and administer the Plan itself. | ||
(i) | In the case of an Award that is intended to qualify as “performance-based compensation” for purposes of Code Section 162(m)(4)(C), the Committee shall establish in writing at the time of making the Award the business criterion or criteria that must be satisfied for payment pursuant to the Award and the amount payable upon satisfaction of those standards. Those standards are also referred to herein as performance goals. Such criterion or criteria shall be established prior to the Participant rendering the services to which they relate and while the outcome is substantially uncertain or at such other time permitted under Treasury Regulations Section 1.162-27(e)(2). In carrying out these duties, the Committee shall use objective written standards for establishing both the performance goal and the amount of compensation such that a third party with knowledge of the relevant facts would be able to determine whether and to what extent the goal has been satisfied and the amount of compensation payable. The Committee shall provide a copy of the document setting forth such standards to the affected Participant and shall retain such written material in its permanent books and records. | ||
(j) | In the case of remuneration that is intended to qualify as “performance-based compensation” for purposes of Code Section 162(m)(4)(C), other than Performance Awards granted pursuant to Section 9 of the Plan, the Committee and the Board shall disclose to the stockholders of the Company the material terms under which such remuneration is to be paid under the Plan, and shall seek approval of the stockholders by a majority vote in a separate stockholder vote before payment of such remuneration. For these purposes, the material terms include the individuals (or class of individuals) eligible to receive such |
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compensation, a description of the business criterion or criteria on which the performance goal is based, either the maximum amount of the compensation to be paid thereunder or the formula used to calculate the amount of compensation if the performance goal is attained, and such other terms as required under Code Section 162(m)(4)(C) and the Treasury Regulations thereunder determined from time to time. The foregoing actions shall be undertaken in conformity with the rules of Code Section 162(m)(4)(C)(ii) and Treasury Regulations promulgated thereunder. Such remuneration shall not be payable under this Plan in the absence of such an approving stockholder vote. In the case of remuneration that is not intended to qualify as performance-based compensation under Code Section 162(m)(4)(C), the Committee and the Board shall make such disclosures to and seek such approval from the stockholders of the Company as they reasonably determine are required by law. | |||
(k) | To the extent required under Code Section 162(m)(4)(C), before any payment of remuneration under this Plan, the Committee must certify in writing that the performance goals and any other material terms of the Award were in fact satisfied. Such certification shall be kept with the permanent books and records of the Committee, and the Committee shall provide the affected Participant with a copy of such certification. | ||
(l) | The Committee shall use its good faith best efforts to comply with the requirements of Section 162(m)(4)(C) of the Code for Awards that are intended to qualify under that section as “performance-based compensation,” but shall have no liability to the Company or any recipient in the event one or more Awards do not so qualify. | ||
4. | Duration of and Common Stock Subject to the Plan. | ||
(a) | Term.The Plan shall become effective as of June 11, 2001, the date of its adoption by the Board, subject to ratification by the stockholders of the Company within twelve (12) months after the effective date. In the event that the stockholders of the Company do not ratify the Plan within twelve (12) months after the effective date, any Awards granted pursuant to the Plan shall be rescinded automatically. Unless sooner terminated by the Board, the Plan shall continue until May 28, 2019 | ||
(b) | Shares of Common Stock Subject to the Plan.The maximum total number of shares of Common Stock with respect to which aggregate stock Awards may be granted under the Plan shall be ten |
(i) | All of the amounts stated in this Paragraph (b) are subject to adjustment as provided in Section 15 below. | ||
(ii) | For the purpose of computing the total number of shares of Common Stock available for Awards under the Plan, there shall be counted against the foregoing limitations the gross number of shares of Common Stock subject to issuance upon exercise or used for payment or settlement of Awards, subject to clauses (iv), (v) and (vi) of this Paragraph (b). | ||
(iii) | If any Awards are forfeited, terminated, expire unexercised, settled or paid in cash in lieu of stock or exchanged for other Awards, the gross number of shares of Common Stock which were theretofore subject to such Awards shall again be available for Awards under the Plan to the extent of such forfeiture or expiration of such Awards. | ||
(iv) | Each share of Common Stock subject to issuance under any award, other than options or Stock Appreciation Rights, shall be counted against the foregoing limitations as 1.52 shares. | ||
(v) | To the extent a Stock Appreciation Right is settled for shares of Common Stock, the gross number of shares used for determining the benefit under such Stock Appreciation Right, to the extent exercised, shall be counted against the foregoing limitations, regardless of the number of |
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shares used to settle the Stock Appreciation Right upon such exercise. | |||
(vi) | To the extent a Stock Option is exercised on a cashless basis, the gross number of shares of Common Stock issued upon such exercise, plus the number of shares of Common Stock retained by the Company, shall be counted against the foregoing limitations. |
(c) | Source of Common Stock.Common Stock which may be issued under the Plan may be either authorized and unissued stock or issued stock which have been reacquired by the Company. No fractional shares of Common Stock shall be issued under the Plan. | ||
5. | EligibilityIncentive Stock Options may only be granted to Employees of the Company or a Subsidiary. Employees, Non-Employee Directors, and Consultants of the Company or a Subsidiary are eligible to receive Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Awards, Performance Awards and other Awards under the Plan. | ||
6. | Stock OptionsStock options granted under the Plan may be in the form of Incentive Stock Options or Non-Qualified Stock Options (collectively referred to as “Stock Options”). Stock Options shall be subject to the terms and conditions set forth below. Each written Stock Option agreement shall contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Committee shall deem desirable. | ||
(a) | Grant. Stock Options shall be granted under the Plan on such terms and conditions not inconsistent with the provisions of the Plan and pursuant to written agreements with the Participant in such form as the Committee may from time to time approve in its sole and absolute discretion. The terms of individual Stock Option agreements need not be identical. Each Stock Option agreement shall state specifically whether it is intended to be an Incentive Stock Option agreement or a Non-Qualified Stock Option agreement. Stock Options may be granted alone or in addition to other Awards under the Plan. No person may be granted (in any calendar year) options to purchase more than one-hundred thousand (100,000) shares of Common Stock (subject to adjustment pursuant to Section 15 below). The foregoing sentence is an annual limitation on grants and not a cumulative limitation. | ||
(b) | Exercise Price. Except as otherwise provided for in Paragraph (f) below, the exercise price per share of Common Stock purchasable under a Stock Option shall be determined by the Committee at the time of grant; provided, however, that the exercise price per share may not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock on the Date of Grant of such Stock Option. | ||
(c) | Option Term. The term of each Stock Option shall be fixed by the Committee. However, the term of any Stock Option shall not exceed ten (10) years after the Date of Grant of such Stock Option. | ||
(d) | Exercisability. A Stock Option shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the Date of Grant and set forth in the written Stock Option agreement. A written Stock Option agreement may, if permitted pursuant to its terms, become exercisable in full upon the occurrence of events selected by the Committee that are beyond the control of the Participant (including, but not limited to, a Change in Control). | ||
(e) | Method of Exercise. A Stock Option may be exercised, in whole or in part, by giving written notice of exercise to the Committee specifying the number of shares of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the exercise price (i) in cash or (ii) if acceptable to the Committee, in shares of Common Stock or a Qualified Note. The Committee may also permit Participants, either on a selective or aggregate basis, to simultaneously exercise Stock Options and sell the shares of Common Stock thereby acquired, pursuant to a brokerage or similar arrangement, approved in advance by the Committee, and use the proceeds from such sale as payment of part or all of the exercise price of such shares; provided, however, that such payment of the exercise price would not cause the Company to recognize compensation expense for financial reporting purposes. The Committee may also permit a cashless exercise, subject to any conditions or limitations that the Committee may establish. | ||
(f) | Special Rules for Incentive Stock Options. The terms specified below shall be applicable to all Incentive Stock Options. Stock Options which are specifically designated as Non-Qualified Stock |
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Options when issued under the Plan shall not be subject to the terms of this Paragraph. |
(i) | Ten Percent Stockholder. If any Employee to whom an Incentive Stock Option is granted is a Ten Percent Stockholder, then the exercise price of the Incentive Stock Option shall not be less than one hundred and ten percent (110%) of the Fair Market Value of the Common Stock on the Date of Grant of such Incentive Stock Option, and the term of the Incentive Stock Option shall not exceed five (5) years measured from the Date of Grant of such option. | ||
(ii) | Dollar Limitation. In the case of an Incentive Stock Option, the aggregate Fair Market Value of the Optioned Stock (determined as of the Date of Grant of each Stock Option) with respect to Stock Options granted to any Employee under the Plan (or any other option plan of the Company or any Affiliate) that may for the first time become exercisable as Incentive Stock Options during any one calendar year shall not exceed the sum of one hundred thousand dollars ($100,000). To the extent the Employee holds two or more such Stock Options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such Stock Options as Incentive Stock Options shall be applied on the basis of the order in which such Stock Options are granted. Any Stock Options in excess of such limitation shall automatically be treated as Non-Qualified Stock Options. |
(g) | Without the approval of the stockholders of the Company, Stock Options and Stock Appreciation Rights granted under the Plan will not be repriced, replaced or regranted through cancellation, or by lowering the exercise price of a previously granted Award. | ||
7. | Stock Appreciation Rights The grant of Stock Appreciation Rights under the Plan shall be subject to the following terms and conditions. Furthermore, the Stock Appreciation Rights shall contain such additional terms and conditions, not inconsistent with the express terms of the Plan, as the Committee shall deem desirable. The terms of each Stock Appreciation Right granted shall be set forth in a written agreement between the Company and the Participant receiving such grant. The terms of such agreements need not be identical. | ||
(a) | Stock Appreciation Rights.A Stock Appreciation Right is an Award determined by the Committee entitling a Participant to receive an amount equal to the excess of the Fair Market Value of a share of Common Stock on a fixed date, which shall be the date concluding a measuring period set by the Committee upon granting the Stock Appreciation Right, over the Fair Market Value of a share of Common Stock on the Date of Grant of the Stock Appreciation Right, multiplied by the number of shares of Common Stock subject to the Stock Appreciation Right. No Stock Appreciation Rights granted in any calendar year to any person may be measured by an amount of shares of Common Stock in excess of one hundred thousand (100,000) shares, subject to adjustment under Section 15 below. The foregoing sentence is an annual limitation on grants and not a cumulative limitation. | ||
(b) | Grant.A Stock Appreciation Right may be granted in addition to or completely independent of any other Award under the Plan. Upon grant of a Stock Appreciation Right, the Committee shall select and inform the Participant regarding the number of shares of Common Stock subject to the Stock Appreciation Right and the date that constitutes the close of the measuring period. | ||
(c) | Measuring Period.A Stock Appreciation Right shall accrue in value from the Date of Grant over a maximum of a 10 (ten) year time period established by the Committee. In the written Stock Appreciation Right agreement, the Committee may also provide (but is not required to provide) that a Stock Appreciation Right shall be automatically payable on one or more specified dates prior to the normal end of the measuring period upon the occurrence of events selected by the Committee (including, but not limited to, a Change in Control) that are beyond the control of the Participant. The Committee may provide (but is not required to provide) in the Stock Appreciation Right agreement that in the case of a cash payment such acceleration in payment shall also be subject to discounting of the payment to reasonably reflect the time value of money using any reasonable discount rate selected by the Committee in accordance with Treasury Regulations under Code Section 162(m). | ||
(d) | Form of Payment.Payment pursuant to a Stock Appreciation Right may be made (i) in cash, (ii) in shares of Common Stock, or (iii) in any combination of the above, as the Committee shall determine in its sole and absolute discretion. The Committee may elect to make this determination either at the time the |
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Stock Appreciation Right is granted, at the time of payment or at any time in between such dates. However, any Stock Appreciation Right paid upon or subsequent to the occurrence of a Change in Control shall be paid in cash. | |||
8. | Restricted AwardsRestricted Awards granted under the Plan may be in the form of either Restricted Stock Grants or Restricted Unit Grants. Restricted Awards shall be subject to the following terms and conditions. Furthermore, the Restricted Awards shall be pursuant to a written agreement executed both by the Company and the Participant, which agreement shall contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Committee shall deem desirable in its sole and absolute discretion. The terms of such written agreements need not be identical. | ||
(a) | Restricted Stock Grants.A Restricted Stock Grant is an Award of shares of Common Stock transferred to a Participant subject to such terms and conditions as the Committee deems appropriate, as set forth in Paragraph (d) below. | ||
(b) | Restricted Unit Grants.A Restricted Unit Grant is an Award of units (with each unit having a value equivalent to one share of Common Stock) granted to a Participant subject to such terms and conditions as the Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit all or a portion of such units upon termination of Service for specified reasons within a specified period of time, and restrictions on the sale, assignment, transfer or other disposition of such units. | ||
(c) | Grants of Awards.Restricted Awards may be granted under the Plan in such form and on such terms and conditions as the Committee may from time to time approve. Restricted Awards may be granted alone or in addition to other Awards under the Plan. Subject to the terms of the Plan, the Committee shall determine the number of Restricted Awards to be granted to a Participant and the Committee may impose different terms and conditions (including performance goals) on any particular Restricted Award made to any Participant. Each Participant receiving a Restricted Stock Grant shall be issued a stock certificate in respect of such shares of Common Stock. Such certificate shall be registered in the name of such Participant, shall be accompanied by a stock power duly executed by such Participant, and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Award. The certificate evidencing the shares shall be held in custody by the Company until the restrictions imposed thereon shall have lapsed or been removed. No person may be granted (in any calendar year) Restricted Awards that are intended to constitute “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, totaling or measured by more than one-hundred thousand (100,000) shares of Common Stock (subject to adjustment pursuant to Section 15 below). The foregoing sentence is an annual limitation on grants and not a cumulative limitation. | ||
(d) | Restriction Period.Restricted Awards shall provide that in order for a Participant to vest in such Awards, the Participant must continuously provide Services, subject to relief for specified reasons, for such period as the Committee may designate at the time of the Award (“Restriction Period”). If the Committee so provides in the written agreement with the Participant, a Restricted Award may also be subject to satisfaction of such performance goals as are set forth in such agreement. During the Restriction Period, a Participant may not sell, assign, transfer, pledge, encumber, or otherwise dispose of shares of Common Stock received under a Restricted Stock Grant. The Committee, in its sole discretion, may provide for the lapse of restrictions during the Restriction Period upon the occurrence of events selected by the Committee that are beyond the control of the Participant (including, but not limited to, a Change in Control). The Committee may provide (but is not required to provide) in the written agreement with the recipient that in the case of a cash payment such acceleration in payment shall also be subject to discounting of the payment to reasonably reflect the time value of money using any reasonable discount rate selected by the Committee in accordance with Treasury Regulations under Code Section 162(m). Upon expiration of the applicable Restriction Period (or lapse of restrictions during the Restriction Period where the restrictions lapse in installments or by action of the Committee), the Participant shall be entitled to receive his or her Restricted Award or portion thereof, as the case may be. | ||
(e) | Payment of Awards.A Participant who receives a Restricted Stock Grant shall be paid solely by release of the restricted stock at the termination of the Restriction Period (whether in one payment, in installments or otherwise). A Participant shall be entitled to receive payment for a Restricted Unit Grant (or portion thereof) in an amount equal to the aggregate Fair Market Value of the shares of Common Stock covered by such Award upon the expiration of the applicable Restriction Period. Payment in settlement of a |
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Restricted Unit Grant shall be made as soon as practicable but in no event later than sixty (60) days following the conclusion of the specified Restriction Period (i) in cash, (ii) in shares of Common Stock, or (iii) in any combination of the above, as the Committee shall determine in its sole and absolute discretion. The Committee may elect to make this determination either at the time the Award is granted, at the time of payment or at any time in between such dates. | |||
(f) | Rights as a Stockholder.A Participant shall have, with respect to the shares of Common Stock received under a Restricted Stock Grant, all of the rights of a stockholder of the Company, including the right to vote the stock, and the right to receive any cash dividends. Such cash dividends shall be withheld, however, until their release upon lapse of the restrictions under the Restricted Award. Stock dividends issued with respect to the shares covered by a Restricted Stock Grant shall be treated as additional shares under the Restricted Stock Grant and shall be subject to the same restrictions and other terms and conditions that apply to shares under the Restricted Stock Grant with respect to which the dividends are issued. | ||
9. | Performance AwardsPerformance Awards granted under the Plan may be in the form of either Performance Share Grants or Performance Unit Grants. Performance Awards shall be subject to the terms and conditions set forth below. Furthermore, the Performance Awards shall be subject to written agreements, which shall contain such additional terms and conditions, not inconsistent with the express provisions of the Plan, as the Committee shall deem desirable in its sole and absolute discretion. Such agreements need not be identical. | ||
(a) | Performance Share Grants.A Performance Share Grant is an Award of units (with each unit equivalent in value to one share of Common Stock) granted to a Participant subject to such terms and conditions as the Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units (or a portion of such units) in the event certain performance criteria are not met within a designated period of time. | ||
(b) | Performance Unit Grants.A Performance Unit Grant is an Award of units (with each unit representing such monetary amount as designated by the Committee) granted to a Participant subject to such terms and conditions as the Committee deems appropriate, including, without limitation, the requirement that the Participant forfeit such units (or a portion of such units) in the event certain performance criteria are not met within a designated period of time. | ||
(c) | Grants of Awards.Performance Awards shall be granted under the Plan pursuant to written agreements with the Participant in such form as the Committee may from time to time approve. Performance Awards may be granted alone or in addition to other Awards under the Plan. Subject to the terms of the Plan, the Committee shall determine the number of Performance Awards to be granted to a Participant and the Committee may impose different terms and conditions on any particular Performance Award made to any Participant. No Performance Share Grants granted in any calendar year to any one person may be measured by more than one-hundred thousand (100,000) shares of Common Stock (subject to adjustment pursuant to Section 15 below). The maximum amount payable for any calendar year pursuant to a Performance Unit Grant shall not exceed $5,000,000 | ||
(d) | Performance Goals and Performance Periods.Performance Awards shall provide that, in order for a Participant to vest in such Awards, the Company must achieve certain performance goals (“Performance Goals”) over a designated performance period selected by the Committee (“Performance Period”). The Performance Goals and Performance Period shall be established by the Committee, in its sole and absolute discretion. The Committee shall establish Performance Goals for each Performance Period before the commencement of the Performance Period and while the outcome is substantially uncertain or at such other time permitted under Treasury Regulations Section 1.162-27(e)(2). The Committee shall also establish a schedule or schedules for such Performance Period setting forth the portion of the Performance Award which will be earned or forfeited based on the degree of achievement of the Performance Goals actually achieved or exceeded. In setting Performance Goals, the Committee may use any one or more of the following performance criteria, applied to either the Company as a whole or to a business unit, Affiliate, or business segment, either individually, alternatively, or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the |
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Committee in the Award: (i) cash flow, (ii) earnings (including gross margin, earnings before interest and taxes, earnings before taxes, and net earnings), (iii) earnings per share, (iv) growth in earnings or earnings per share, (v) stock price, (vi) return on equity or average shareholders’ equity, (vii) total shareholder return, (viii) return on capital, (ix) return on assets or net assets, (x) return on investment, (xi) revenue, (xii) income or net income, (xiii) operating income or net operating income, (xiv) operating profit or net operating profit, (xv) operating margin, (xvi) return on operating revenue, (xvii) market share, (xviii) contract awards or backlog, (xix) overhead or other expense reduction, (xx) growth in shareholder value relative to the moving average of the S&P 500 Index or a peer group index, (xxi) credit rating, (xxii) strategic plan development and implementation, (xxiii) improvement in workforce diversity, (xxiv) EBITDA, and (xxv) any other similar criteria. | |||
(e) | Payment of Awards.In the case of a Performance Share Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the aggregate Fair Market Value of the shares of Common Stock covered by such Award as of the end of the Performance Period. In the case of a Performance Unit Grant, the Participant shall be entitled to receive payment for each unit earned in an amount equal to the dollar value of each unit times the number of units earned. The Committee, pursuant to the written agreement with the Participant, may make such Performance Awards payable in whole or in part upon the occurrence of events selected by the Committee that are beyond the control of the Participant (including, but not limited to, a Change in Control). The Committee may provide (but is not required to provide) in the written agreement with the recipient that, in the case of a cash payment, acceleration in payment of a Performance Award shall also be subject to discounting to reasonably reflect the time value of money using any reasonable discount rate selected by the Committee in accordance with Treasury Regulations under Code Section 162(m). Payment in settlement of a Performance Award shall be made as soon as practicable but in no event later than sixty (60) days following the conclusion of the Performance Period (i) in cash, (ii) in shares of Common Stock, or (iii) in any combination of the above, as the Committee may determine in its sole and absolute discretion. The Committee may elect to make this determination either at the time the Award is granted, at the time of payment, or at any time in between such dates. | ||
10. | Other Stock-Based and Combination Awards. | ||
(a) | The Committee may grant other Awards under the Plan pursuant to which Common Stock is or may in the future be acquired, or Awards denominated in stock units, including ones valued using measures other than market value. Such other stock-based grants may be granted either alone or in addition to any other type of Award granted under the Plan. To the extent that an Award is intended to constitute “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, such Award shall be subject to Paragraph (d) of Section 9 of the Plan. No stock-based Award granted in any calendar year to any one person, to the extent such Award is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the Code, may be denominated by more than one-hundred thousand (100,000) shares of Common Stock. | ||
(b) | The Committee may also grant Awards under the Plan in combination with other Awards or in exchange of Awards, or in combination with or as alternatives to grants or rights under any other employee plan of the Company, including the plan of any acquired entity. | ||
(c) | Subject to the provisions of the Plan, the Committee shall have authority to determine the individuals to whom and the time or times at which the Awards shall be made, the number of shares of Common Stock to be granted or covered pursuant to such Awards, and any and all other conditions and/or terms of the Awards. | ||
11. | Deferral Elections.The Committee may permit a Participant to elect to defer his or her receipt of the payment of cash or the delivery of shares of Common Stock that would otherwise be due to such Participant by virtue of the exercise, earn out or vesting of an Award made under the Plan. If any such election is permitted, the Committee shall establish rules and procedures for such payment deferrals, including the possible (a) payment or crediting of reasonable interest on such deferred amounts credited in cash, and (b) the payment or crediting of dividend equivalents in respect of deferrals credited in units of Common Stock. The Company and the Committee shall not be responsible to any person in the event that the payment deferral does not result in deferral of income for tax purposes. Notwithstanding any part of the foregoing to the contrary, it is the Company’s intent that all Awards granted under this Plan, and any payment deferral permitted under this Plan, shall not cause an imposition of the additional taxes provided |
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for in Section 409A(a)(1)(B) of the Code. | |||
12. | Dividend EquivalentsAwards of Stock Options, Stock Appreciation Rights, Restricted Unit Grants, Performance Share Grants, and other stock-based Awards may, in the sole and absolute discretion of the Committee, earn dividend equivalents. In respect of any such Award which is outstanding on a dividend record date for Common Stock, the Participant may be credited with an amount equal to the amount of cash or stock dividends that would have been paid on the shares of Common Stock covered by such Award had such shares been issued and outstanding on such dividend record date. The Committee shall establish such rules and procedures governing the crediting of dividend equivalents, including the timing, form of payment, and payment contingencies of such dividend equivalents, as it deems appropriate or necessary. | ||
13. | Termination of ServiceThe terms and conditions under which an Award may be exercised after a Participant’s termination of Service shall be determined by the Committee and reflected in the written agreement with the Participant concerning the Award. | ||
14. | Non-Transferability of AwardsNo Award under the Plan, and no rights or interest therein, shall be assignable or transferable by a Participant except by will or the laws of descent and distribution. Subject to the foregoing, during the lifetime of a Participant, Awards are exercisable only by, and payments in settlement of Awards will be payable only to, the Participant or his or her legal representative if the Participant is Disabled. | ||
15. | Adjustments Upon Changes in Capitalization, Etc. | ||
(a) | The existence of the Plan and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stocks ahead of or affecting the Common Stock or the rights thereof, the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding. | ||
(b) | (i) The maximum aggregate total number of shares of Common Stock for which Awards in respect thereof may be granted, the number and kind of Shares covered by each outstanding Award, the maximum number of shares of Common Stock that may be sold or awarded to any Participant, and the price per share (but not the total price) subject to each outstanding Award shall be proportionally adjusted to prevent dilution or enlargement of rights under the Plan for any change in the outstanding Common Stock subject to the Plan, or subject to any Award, resulting from any stock splits, combination or exchange of shares of Common Stock, consolidation, spin-off or recapitalization of shares of Common Stock or any capital adjustment or transaction similar to the foregoing or any distribution to holders of Common Stock other than regular cash dividends. (ii) The Committee shall make such adjustment in such manner as it may deem equitable and appropriate, subject to compliance with applicable laws. Any determination, substitution or adjustment made by the Committee under this Section shall be conclusive and binding on all persons. Except as expressly provided herein, neither the Company’s issuance of shares of stock of any class or securities convertible into shares of stock of any class, nor the conversion of any convertible securities of the Company, shall be treated as a transaction requiring any substitution or adjustment under this Section. | ||
(c) | The Committee may also make such adjustments in the number of shares covered by, and the price or other value of any outstanding Awards in the event of a spin-off or other distribution (other than normal cash dividends) of Company assets to stockholders. | ||
16. | Change in Control. | ||
(a) | Except as otherwise provided for in Paragraph (b) below, in the event of a Change in Control, and except as otherwise provided in Award agreements: |
(i) | All Stock Options and Stock Appreciation Rights then outstanding shall become fully exercisable as of the date of the Change in Control (and shall terminate at such time as specified in the |
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Award agreement); | |||
(ii) | All restrictions and conditions of all Restricted Stock Grants and Restricted Unit Grants then outstanding shall be deemed satisfied as of the date of the Change in Control; and | ||
(iii) | All Performance Share Grants and Performance Unit Grants shall be deemed to have been fully earned as of the date of the Change in Control. |
Any payment in settlement of Stock Appreciation Rights in (i) or Awards discussed in (ii) and (iii) above, shall be made on the date of the Change in Control; provided, however, that if making such payments would result in the imposition of taxes under Code Section 409A, then the payments shall instead be made on the originally schedules date(s) set forth in the Award Agreements. | |||
(b) | In the event that any payment under this Plan (alone or in conjunction with other payments) would otherwise constitute an “excess parachute payment” under Section 280G of the Code (in the sole judgment of the Committee), such payment shall be reduced or eliminated to the extent the Committee determines necessary to avoid deduction disallowance under Section 280G of the Code or the imposition of excise tax under Section 4999 of the Code. The Committee may consult with a Participant regarding the application of Section 280G and/or Section 4999 to payments otherwise due to such Participant under the Plan, but the judgment of the Committee as to applicability of those provisions, the degree to which a payment must be reduced to avoid those provisions, and which Awards shall be reduced, is final. | ||
17. | Amendment and Termination. | ||
Without further approval of the stockholders, the Board may at any time terminate the Plan, or may amend it from time to time in such respects as the Board may deem advisable. However, the Board may not, without approval of the stockholders, make any amendment which would (a) increase the aggregate number of shares of Common Stock which may be issued under the Plan (except for adjustments pursuant to Section 15 above), (b) materially modify the requirements as to eligibility for participation in the Plan, or (c) materially increase the benefits accruing to Participants under the Plan. Notwithstanding the above, the Board may amend the Plan to take into account changes in applicable securities laws, federal income tax laws and other applicable laws. Further, should the provisions of Rule 16b-3, or any successor rule, under the Exchange Act be amended, the Board may amend the Plan in accordance with any modifications to that rule without the need for stockholder approval. Notwithstanding the foregoing, the Plan may not be amended more than once every six months other than to comply with the changes in the Code. | |||
18. | Miscellaneous Matters. | ||
(a) | Tax Withholding. |
(i) | The Company’s obligation to deliver Common Stock and/or pay any amount under the Plan shall be subject to the satisfaction of all applicable federal, state, local, and foreign tax withholding requirements. | ||
(ii) | The Committee may, in its discretion, provide the Participants or their successors with the right to use previously vested Common Stock in satisfaction of all or part of the taxes incurred by such Participants in connection with the Plan; provided, however, that this form of payment shall be limited to the withholding amount calculated using the minimum statutory rates. Such right may be provided to any such holder in either or both of the following formats. |
1. | Stock Withholding: The election to have the Company withhold, from the Common Stock otherwise issuable under the Plan, a portion of the Common Stock with an aggregate Fair Market Value equal to the taxes calculated using the minimum statutory rates. | ||
2. | Stock Delivery: The election to deliver to the Company, at the time the taxes are required to be withheld, one or more shares of Common Stock previously acquired by the Participant or his or her successor with an aggregate Fair Market Value equal to the taxes calculated using the minimum statutory rates. |
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(b) | Not an Employment or Service Contract.Neither the adoption of the Plan nor the granting of any Award shall confer upon any Participant any right to continue in the Service of the Company or an Affiliate, as the case may be, nor shall it interfere in any way with the right of the Company or an Affiliate to terminate the Services of any of its Employees, Non-Employee Directors, or Consultants at any time, with or without cause. | ||
(c) | Unfunded Plan.The Plan shall be unfunded and the Company shall not be required to segregate any assets that may at any time be represented by Awards under the Plan. Any liability of the Company to any person with respect to any Award under the Plan shall be based solely upon any written contractual obligations that may be effected pursuant to the Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. | ||
(d) | Annulment of Awards.The grant of any Award under the Plan payable in cash is provisional until cash is paid in settlement thereof. The grant of any Award payable in Common Stock is provisional until the Participant becomes entitled to the certificate in settlement thereof. Payment under any Awards granted pursuant to the Plan is wholly contingent upon stockholder approval of the Plan. Where approval for an Award sought pursuant to Section 162(m)(4)(C)(ii) is not granted by the Company’s stockholders, the Award shall be annulled automatically. In the event the Service of a Participant is terminated for cause (as defined below), any Award which is provisional shall be annulled as of the date of such termination for cause. For purposes of the Plan, the term “terminated for cause” means any discharge because of personal dishonesty, willful misconduct, breach of fiduciary duty involving personal profit, continuing intentional or habitual failure to perform stated duties, violation of any law (other than minor traffic violations or similar misdemeanor offenses not involving moral turpitude), or material breach of any provision of an employment or independent contractor agreement with the Company. | ||
(e) | Other Company Benefit and Compensation Programs.Payments and other benefits received by a Participant under an Award made pursuant to the Plan shall not be deemed a part of a Participant’s regular, recurring compensation for purposes of the termination indemnity or severance pay law of any state. Furthermore, such benefits shall not be included in, nor have any effect on, the determination of benefits under any other employee benefit plan or similar arrangement provided by the Company or a Subsidiary unless expressly so provided by such other plan or arrangement, or except where the Committee expressly determines that inclusion of an Award or portion of an Award should be included. Awards under the Plan may be made in combination with or in addition to, or as alternatives to, grants, awards or payments under any other Company or Subsidiary plans. The Company or any Subsidiary may adopt such other compensation programs and additional compensation arrangements (in addition to this Plan) as it deems necessary to attract, retain, and motivate officers, directors, employees or independent contractors for their service with the Company and its Subsidiaries. | ||
(f) | Securities Law Restrictions.No shares of Common Stock shall be issued under the Plan unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal and state securities laws. Certificates for shares of Common Stock delivered under the Plan may be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state securities law. The Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. | ||
(g) | Award Agreement.Each Participant receiving an Award under the Plan shall enter into a written agreement with the Company in a form specified by the Committee agreeing to the terms and conditions of the Award and such related matters as the Committee shall, in its sole and absolute discretion, determine. | ||
(h) | Costs of Plan.The costs and expenses of administering the Plan shall be borne by the Company. | ||
(i) | Governing Law.The Plan and all actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware. | ||
(j) | Code Section 409A.Notwithstanding anything in the Plan to the contrary, the Plan and Awards granted hereunder are intended to comply with the requirements of Code Section 409A and shall be interpreted in a manner consistent with such intention. If, upon a Participant’s separation from service within the |
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meaning of Code Section 409A, the Participant is then a “specified employee” (as defined in Code Section 409A), the Company shall defer payment of “nonqualified deferred compensation” subject to Code Section 409A payable as a result of and within six (6) months following such separation from service under this Plan and/or applicable Award Agreement until the earlier of (i) ten (10) days after the Company receives notification of the Participant’s death, or (ii) the first business day of the seventh month following the Participant’s separation from service. Any such delayed payments shall be made without interest. |
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14901 Dallas Parkway
Dallas, Texas 75254
972-661-2800
Driving Directions: Use North Exit and follow I-635 East 14 miles to Dallas Tollway North.
Exit at Belt Line Road and make U-turn. Hotel is on the right.
Driving Directions: Take Mockingbird Lane East to Dallas Tollway North.
Exit Belt Line Road. Make a U-turn. Hotel is on the right.
Driving Directions: Take Addison Road south to Belt Line Road.
Take Belt Line Road East to Dallas Parkway.
Take Dallas Parkway South for 1 block. Hotel is on the right.
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DIODES INCORPORATED 15660 NORTH DALLAS PARKWAY SUITE 850 DALLAS, TEXAS 75248 | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M13283-P72191 | KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY |
DIODES INCORPORATED | For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||
The Board of Directors recommends that you vote “FOR” the following. | o | o | o | |||||||||
1. | Election of Directors Nominees: 01) C.H. Chen 02) Michael R. Giordano 03) L.P. Hsu 04) Keh-Shew Lu | 05) Shing Mao 06) Raymond Soong 07) John M. Stich |
For | Against | Abstain | ||||||||||
The Board of Directors recommends that you vote “FOR” the following proposals. | ||||||||||||
2. | To approve various proposed amendments of the 2001 Omnibus Equity Incentive Plan, including the extension of the term of the plan until May 28, 2019 and the increase by 5,000,000 in the number of shares of Common Stock which may be subject to awards granted thereunder. | o | o | o | ||||||||
3. | To ratify the appointment of Moss Adams LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2009. | o | o | o | ||||||||
Such other business as may properly come before the meeting or any adjournment thereof. | ||||||||||||
For address changes and/or comments, please check this box and write them on the back where indicated. | o | ||||||||||
Yes | No | ||||||||||
Please indicate if you plan to attend this meeting. | o | o |
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership, by authorized officer. | |||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
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• | Hotel direction: 14 miles E. | |
• | Driving Directions: Use North Exit and follow I-635 East 14 miles to Dallas Tollway North. | |
• | Exit at Belt Line Road and make a U-turn. Hotel is on the right. |
• | Hotel direction: 10 miles NE. | |
• | Driving Directions: Take Mockingbird Lane East to Dallas Tollway North. | |
• | Exit Belt Line Road. Make a U-turn. Hotel is on the right. |
• | Hotel direction: 2 miles S. | |
• | Driving Directions: Take Addison Road south to Belt Line Road. | |
• | Take Belt Line Road East to Dallas Parkway. | |
• | Take Dallas Parkway South for 1 block. Hotel is on the right. |
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
This Proxy Is Solicited by the Board of Directors
Address Changes/Comments: | |||||