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SCHEDULE 14A INFORMATION
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IXYS Corporation
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IXYS
CORPORATION
1590 BUCKEYE DRIVE
MILPITAS, CA
95035-7418
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE
HELD ON SEPTEMBER 16, 2011
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of IXYS Corporation, a Delaware corporation.
The meeting will be held on Friday, September 16, 2011 at
9:00 a.m. local time at our headquarters, which is located
at 1590 Buckeye Drive, Milpitas, California 95035 for the
following purposes:
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1.
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To elect seven directors to serve for the ensuing year and until
their successors are elected;
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2.
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To approve the 2011 Equity Incentive Plan, under which
600,000 shares of our common stock will be reserved for
issuance;
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3.
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To hold an advisory vote on the compensation of our named
executive officers;
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4.
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To hold an advisory vote on the frequency of the advisory vote
on the compensation of our named executive officers;
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5.
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To ratify the selection of BDO USA, LLP as our independent
registered public accounting firm for our fiscal year ending
March 31, 2012; and
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6.
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To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
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These items of business are more fully described in the proxy
statement accompanying this notice.
Our Board of Directors has fixed the close of business on
July 19, 2011, as the record date for the determination of
stockholders entitled to notice of and to vote at this Annual
Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
Secretary
Milpitas, California
July 29, 2011
You are cordially
invited to attend the meeting in person. Whether or not you
expect to attend the meeting, please complete, date, sign and
return the enclosed proxy as promptly as possible in order to
ensure your representation at the meeting. A return envelope
(which is postage prepaid if mailed in the United States) is
enclosed for that purpose. Even if you have given your proxy,
you may still vote in person if you attend the meeting. Please
note, however, that if your shares are held of record by a
broker, bank or other nominee and you wish to vote at the
meeting, you must obtain from the record holder a proxy issued
in your name.
IXYS
CORPORATION
1590 BUCKEYE DRIVE
MILPITAS, CA
95035-7418
PROXY
STATEMENT
FOR THE 2011 ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 16, 2011
QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I
receiving these materials?
We have sent you this proxy statement and the enclosed proxy
card because the Board of Directors
of IXYS
Corporation, or the Board, is soliciting your proxy to vote at
the 2011 Annual
Meeting of Stockholders, or Annual Meeting. You are invited to
attend the Annual Meeting to vote on the proposals described in
this proxy statement. However, you do not need to attend the
meeting to vote your shares. Instead, you may simply complete,
sign and return the enclosed proxy card.
We are distributing this proxy statement and accompanying proxy
card on or about July 29, 2011
to all
stockholders of record entitled to vote at the Annual Meeting.
Who can
vote at the annual meeting?
Only stockholders of record at the close of business on
July 19, 2011 will be entitled to vote at the Annual
Meeting. On this record date, there were 31,532,592 shares
of common stock outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If on July 19, 2011 your shares were registered directly in
your name with
IXYSs
transfer agent, BNY Mellon Shareowner Services, then you are a
stockholder of record. As a stockholder of record, you may vote
in person at the meeting or vote by proxy. Whether or not you
plan to attend the meeting, we urge you to fill out and return
the enclosed proxy card to ensure your vote is counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or
Bank
If on July 19, 2011 your shares were held, not in your
name, but rather in an account at a brokerage firm, bank,
dealer, or other similar organization, then you are the
beneficial owner of shares held in street name and
these proxy materials are being forwarded to you by that
organization. The organization holding your account is
considered to be the stockholder of record for purposes of
voting at the annual meeting. As a beneficial owner, you have
the right to direct your broker or other agent regarding how to
vote the shares in your account. You are also invited to attend
the Annual Meeting. However, since you are not the stockholder
of record, you may not vote your shares in person at the meeting
unless you request and obtain a valid proxy from your broker or
other agent.
What am I
voting on?
There are five matters scheduled for a vote:
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Election of seven directors;
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The approval of the 2011 Equity Incentive Plan, under which
600,000 shares of our common stock will be reserved for
issuance;
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An advisory vote on the compensation of our named executive
officers;
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An advisory vote on the frequency of the advisory vote on the
compensation of our named executive officers; and
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Ratification of BDO USA,
LLP, or BDO, as our independent registered public
accounting firm for our fiscal year ending
March 31, 2012, or
fiscal 2012.
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The Board of Directors recommends a vote in favor of each
nominee named in this proxy statement, a vote in favor of the
2011 Equity Incentive Plan, a vote for the approval, on an
advisory basis, of the compensation of our named executive
officers, a vote for the approval, on an advisory basis, of a
frequency of once every three years for an advisory vote on the
compensation of our named executive officers, and a vote in
favor of the ratification of the selection of BDO as our
independent registered public accounting firm for fiscal 2012.
How do I
vote?
You may either vote For all the nominees to the
Board or you may Withhold your vote for any nominee
you specify. For the vote on the 2011 Equity Incentive Plan, the
advisory vote on the compensation of our named executive
officers and the ratification of the appointment of BDO as our
independent public registered accounting firm, you may vote
For, Against, or Abstain
with respect to each of these proposals. For the advisory vote
regarding the frequency of the advisory vote on the compensation
of our named executive officers, you may vote Every
Year, Every Two Years, Every Three
Years or Abstain. The procedures for voting
are fairly simple:
Stockholder
of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at
the Annual Meeting or vote by proxy using the enclosed proxy
card. Whether or not you plan to attend the meeting, we urge you
to vote by proxy to ensure your vote is counted. You may still
attend the meeting and vote in person even if you have already
voted by proxy.
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To vote in person, come to the Annual Meeting and we will give
you a ballot when you arrive.
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To vote using the proxy card, simply complete, sign and date the
enclosed proxy card and return it promptly in the envelope
provided. If you return your signed proxy card to us before the
Annual Meeting, we will vote your shares as you direct.
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Beneficial
Owner: Shares Registered in the Name of Broker or
Bank
If you are a beneficial owner of shares registered in the name
of your broker, bank, or other agent, you should have received a
proxy card and voting instructions with these proxy materials
from that organization rather than from us. Simply complete and
mail the proxy card to ensure that your vote is counted. To vote
in person at the Annual Meeting, you must obtain a valid proxy
from your broker, bank, or other agent. Follow the instructions
from your broker or bank included with these proxy materials, or
contact your broker or bank to request a proxy form.
How many
votes do I have?
On each matter to be voted upon, you have one vote for each
share of common stock you own as of July 19, 2011.
What if I
return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any
voting selections, your shares will be voted For the
election of all seven nominees for director, For the
approval of 2011 Equity Incentive Plan, For the
approval, on an advisory basis, of the compensation of our named
executive officers, For the approval, on an advisory
basis, of a frequency of once every three years for an advisory
vote on the compensation of our named executive officers, and
For the ratification of BDO as our independent
registered public accounting firm for our fiscal year ending
March 31, 2012. If
any other matter is properly presented at the meeting, your
proxyholder, who is one of the individuals named on your proxy
card, will vote your shares using his or her best judgment.
Who is
paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In
addition to these mailed proxy materials, our directors and
employees and Phoenix Advisory Partners may also solicit proxies
in person, by telephone, or by other means of communication.
Directors and employees will not be paid any additional
compensation for soliciting proxies, but Phoenix Advisory
Partners will be paid $7,500 plus
out-of-pocket
expenses if it solicits proxies. We may also reimburse brokerage
firms, banks and other agents for the cost of forwarding proxy
materials to beneficial owners.
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What does
it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are
registered in more than one name or are registered in different
accounts. Please complete, sign and return each proxy card to
ensure that all of your shares are voted.
Can I
change my vote after submitting my proxy?
Yes. You can
revoke your proxy at any time before the final vote at the
meeting. If you
are the record holder of your shares, you may revoke your proxy
in any one of three ways:
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You may submit another properly completed proxy card with a
later date.
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You may send a timely written notice that you are revoking your
proxy to IXYS Corporations Secretary, Uzi Sasson, at
1590 Buckeye Drive, Milpitas, California 95035.
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You may attend the Annual Meeting and vote in
person. Simply
attending the meeting will not, by itself, revoke your proxy.
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If your shares are held by your broker or bank as a nominee or
agent, you should follow the instructions provided by your
broker or bank.
When are
stockholder proposals due for next years annual
meeting?
To be considered for possible inclusion in next years
proxy materials, your proposal must be submitted in writing by
March 31, 2012 to
IXYS
Corporations Secretary, Uzi Sasson, at 1590 Buckeye
Drive, Milpitas, California
95035. If you wish
to submit a proposal that is not intended to be included in next
years proxy materials or you wish to nominate a director,
you must do so no earlier than May 20, 2012 and no later
than June 18, 2012.
You are also advised to review our Bylaws, which contain
additional requirements about advance notice of stockholder
proposals and director nominations.
How are
votes counted?
Votes will be counted by the inspector of election appointed for
the meeting, who will separately count For and
Withhold and, with respect to proposals other than
the election of directors, Against votes,
abstentions and broker
non-votes.
Abstentions will be counted towards the vote total for
each proposal, and will have the same effect as
Against
votes. Broker
non-votes have no effect on voting on proposals and will not be
counted towards the vote total for any proposal.
How many
votes are needed to approve each proposal?
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For the election of directors, Proposal No. 1, the
seven nominees receiving the most For votes (from
the holders of shares present in person or represented by proxy
and entitled to vote on the election of directors) will be
elected. Votes Withheld will not affect the outcome
of voting for directors.
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To be approved, Proposal No. 2, the approval of the
2011 Equity Incentive Plan, under which 600,000 shares of
our common stock will be reserved for issuance, must receive
For votes from the holders of a majority of shares
voting on the proposal either in person or by proxy and entitled
to vote. If you Abstain from voting, it will have
the same effect as an Against vote. Broker non-votes
will have no effect.
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To be approved, Proposal No. 3, the approval, on an
advisory basis, of the compensation of our named executive
officers, must receive For votes from a majority of
the shares voting on the proposal in person or by proxy and
entitled to vote. If you Abstain from voting, it
will have the same effect as an Against vote. Broker
non-votes will have no effect.
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For Proposal No. 4, an advisory vote on the frequency
of the advisory vote on the compensation of our named executive
officers, the frequency that receives the highest number of
votes cast will be deemed to be the frequency selected by our
stockholders. If you Abstain from voting, the
abstention will not have any effect on the advisory vote. Broker
non-votes will also have no effect.
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To be approved, Proposal No. 5, ratification of BDO as
our independent registered public accounting firm for the year
ending March 31, 2012, must receive For votes
from the holders of a majority of the shares voting on the
proposal either in person or by proxy and entitled to
vote. If you
Abstain from voting, it will have the same effect as
an Against
vote. Broker
non-votes will have no effect.
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What is
the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A
quorum will be present if stockholders holding at least a
majority of the outstanding shares as of the record date are
present at the meeting in person or represented by proxy. On the
record date, there were 31,532,592 shares outstanding and
entitled to vote.
Your shares will be counted towards the quorum if you submit a
valid proxy or if you vote in person at the meeting. Abstentions
and broker non-votes will be counted towards the quorum
requirement. If there is no quorum, the holders of a majority of
shares present at the meeting in person or represented by proxy
may adjourn the meeting to another date.
How can I
obtain directions to be able to attend the Annual Meeting and
vote in person?
You will find directions to 1590 Buckeye Drive, Milpitas,
California 95035 at the following website:
http://www.ixys.com/locations/IXYS_us_corporate.html
or you may send an email requesting directions to
investorrelations@ixys.net or you may call
408-457-9000,
extension 9000 or extension 9092 and ask for directions.
PROPOSAL 1
ELECTION
OF DIRECTORS
Our Board consists of seven directors. There are seven nominees
for director to be voted on at the Annual Meeting. Each director
to be elected will hold office until the next annual meeting of
stockholders and until his successor is elected, or until such
directors earlier death, resignation or removal. Each of
the nominees listed below, other than Kenneth D. Wong, is
currently a director of our company who was previously elected
by the stockholders. Mr. Wong served on the Board in the
past and four of the current members were familiar with him from
that service. Our Chairman of the Board and Chief Executive
Officer, Dr. Zommer, and the Chairman of the Nominating and
Corporate Governance Committee, Mr. Feucht, concluded that
Mr. Wong would be an appropriate candidate for the Board
and Mr. Feucht contacted Mr. Wong to determine his
interest in again serving on the Board. The two Chairmen may be
deemed to be the individuals who recommended Mr. Wong for
election to our Board. It is our policy to encourage nominees
for director to attend the Annual Meeting. All six nominees for
election as a director at the 2010 annual meeting of
stockholders attended the meeting.
Directors are elected by a plurality of the votes present in
person or represented by proxy and entitled to vote. The seven
nominees receiving the highest number of affirmative votes will
be elected. Shares represented by executed proxies will be
voted, if authority to do so is not withheld, for the election
of the seven nominees named below. In the event that any nominee
should be unavailable for election as a result of an unexpected
occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person
nominated for election has agreed to serve if elected and our
management has no reason to believe that any nominee will be
unable to serve.
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THE BOARD
OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE
Nominees
The names of the nominees and certain information about them as
of July 19, 2011 are set forth below:
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Principal Occupation/
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Name
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Age
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Position Held With the Company
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Nathan Zommer
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63
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Chairman of the Board and Chief Executive Officer of IXYS
Corporation
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Donald L. Feucht
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77
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Investor
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Samuel Kory
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68
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Retired Executive and Consultant
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S. Joon Lee
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72
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Retired Executive
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Timothy A. Richardson
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54
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Chief Operating Officer of Liquid Robotics
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James M. Thorburn
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55
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Consultant
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Kenneth D. Wong
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Chief Operating Officer/Chief Financial Officer of Menlo
Equities
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Nathan Zommer. Dr. Zommer, founder of our
company, has served as a Director since our inception in 1983,
and has served as Chairman of the Board and Chief Executive
Officer since March 1993. From 1993 to 2009, Dr. Zommer
served as President and, from 1984 to 1993, Dr. Zommer
served as Executive Vice President. Prior to founding our
company, Dr. Zommer served in a variety of positions with
Intersil, Hewlett Packard and General Electric, including as a
scientist in the Hewlett Packard Laboratories and Director of
the Power MOS Division for Intersil/General Electric. As our
founder, Dr. Zommer has the benefit of our companys
complete history. This, taken together with his technical
skills, background as an executive and over three decades of
experience in the semiconductor industry, make him uniquely
qualified to be on our Board. Dr. Zommer received B.S. and
M.S. degrees in Physical Chemistry from Tel Aviv University and
a Ph.D. in Electrical Engineering from Carnegie Mellon
University.
Donald L. Feucht. Dr. Feucht has served
as a Director since July 2000. From 1992 until his retirement in
1998, Dr. Feucht served as Vice President for Operations
for Associated Western Universities. He was employed as a
Program Management Specialist for EG&G Rocky Flats, Inc.
from 1990 until 1992. Prior to 1990, Dr. Feucht served in
several positions with the National Renewable Energy Laboratory,
including Deputy Director. Prior to joining the National
Renewable Energy Laboratory, he served as Professor of
Electrical Engineering and Associate Dean at Carnegie Mellon
University. Dr. Feucht adds an extensive technical
background in semiconductor design and solar energy, analytical
skills and experience in managing research and scientific
organizations to the Boards set of skills and experience.
Dr. Feucht received his B.S. degree in Electrical
Engineering from Valparaiso University and his M.S. and Ph.D.
degrees in Electrical Engineering from Carnegie Mellon
University.
Samuel Kory. Mr. Kory has served as a
Director since November 1999. In 1988, he founded Samuel Kory
Associates, a management consulting firm. Since founding the
firm, Mr. Kory has served as the firms sole
proprietor and principal, as well as a consultant for the firm.
He has substantially retired from this business, limiting his
work to occasional assignments. Mr. Kory previously served
as President and Chief Executive Officer of Sensor Technologies
USA, Vice President for Business Development and Sales of our
company, Division General Manager and Corporate Director of
Marketing for Seiko Instruments USA, and International Manager
for Spectra Physics Inc. During his career, Mr. Kory worked
in and consulted with a variety of companies in high technology
businesses. His experience in business development and sales in
the semiconductor industry, combined with his international
background in managing operations, sales and marketing, permits
him to bring a perspective on marketing and business development
issues to the Board. Mr. Kory received his B.S.M.E. from
Pennsylvania State University.
S. Joon Lee. Dr. Lee has served as a
Director since July 2000. From 1990 to March 2008, Dr. Lee
served as President of Omni Microelectronics, a consulting and
engineering company. Dr. Lee also served as President of
Adaptive Logic, a semiconductor company, from 1991 until 1996.
Previously, Dr. Lee served as President of Samsung
Semiconductor. Dr. Lees technical expertise, combined
with his operational experience running an
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international semiconductor manufacturer, adds depth to the
Boards understanding of the semiconductor business.
Dr. Lee received his B.S., M.S. and Ph.D. degrees in
Electrical Engineering from the University of Minnesota.
Timothy A. Richardson. Mr. Richardson has
served as a Director since June 2007. Mr. Richardson is an
electronics industry veteran who has been employed since May
2007 as the Chief Operating Officer of Liquid Robotics, the
developer of a surface vessel that derives its energy from the
surrounding environment. He has also served as the Chief
Financial Officer of the Jupiter Foundation since May 2007. At
Sirenza Microdevices, Inc., a supplier of radio frequency
components for electronics, he was the Chief Strategy Advisor
from October 2006 to April 2007. From May 2002 to October 2006,
he was the President and Chief Executive Officer of Micro Linear
Corporation, an integrated circuit company specializing in
wireless applications. Prior to that, he served as the Executive
Vice President of Business Development of Bandwidth 9, a
manufacturer of optical components for the telecommunications
market, and as the President and co-founder of VeriFiber
Technologies, an optical component and systems manufacturer.
Mr. Richardsons service as the chief executive
officer and member of the board of directors of a public
semiconductor company, as well as his service as a strategic
officer of another semiconductor company and extensive
experience in the semiconductor industry, enables him to provide
operational, financial and business development expertise to
apply on behalf of our company.
James M. Thorburn. Mr. Thorburn has
served as a Director since March 2007. Since April 2010,
Mr. Thorburn has been consulting, principally to private
equity and startup firms. He was an operator affiliate with
Francisco Partners, a private equity firm, from August 2006 to
February 2009 and served as the Chief Financial Officer of
Fisker Automotive, Inc., a premium plug-in hybrid electric
vehicle manufacturer, from February 2009 to April 2010. He
served as Chief Executive Officer and Chairman of Zilog, Inc.
from January 2002 until August 2006. Mr. Thorburn was hired
at Zilog to oversee a pre-packaged bankruptcy under federal law
and the reemergence of the company following bankruptcy. The
petition for bankruptcy was filed in February 2002. Prior to
being Chief Executive Officer at Zilog, Mr. Thorburn held
various executive positions including Senior Vice President and
Chief Operating Officer of ON Semiconductor, operating
consultant with Texas Pacific Group, Chief Financial Officer at
Zilog and management positions at National Semiconductor.
Mr. Thorburn, through his background in private equity and
work as chief executive officer of a public semiconductor
company and chief operating officer and chief financial officer
of semiconductor companies, brings senior leadership skills,
mergers and acquisition and capital financing expertise and
industry and financial reporting experience to the mix of skills
on the Board. Mr. Thorburn holds a BSc.(Hons.) degree from
University of Glasgow and is qualified accountant with Chartered
Institute of Managements Accountants in the United Kingdom.
Kenneth D. Wong. Mr. Wong has served as a
Director since June 2011. Previously, he served as a Director
from 2004 to 2007. Since 1997, Mr. Wong has been with Menlo
Equities, a developer and owner-operator of commercial real
estate in California. Mr. Wong has served as its Chief
Financial Officer since 1997 and as its Chief Operating Officer
since 2001. From 1993 to 1997, Mr. Wong served in several
positions at Coopers & Lybrand LLP, his last role as a
Manager. Mr. Wongs work in finance and accounting
adds to the Boards expertise in these fields. He received
a B.S. degree in Business Administration from the University of
California at Berkeley.
There are no family relationships among any of our directors or
executive officers.
INFORMATION
REGARDING THE BOARD AND CORPORATE GOVERNANCE
Independence
of the Board
Under The Nasdaq Stock Market, or Nasdaq, listing standards, a
majority of the members of a listed companys board of
directors must qualify as independent, as
affirmatively determined by the board of directors. Under its
charter, the Nominating and Corporate Governance Committee of
the Board, or the Nominating and Corporate Governance Committee,
determines the independence of our directors. The Nominating and
Corporate Governance Committee consults with our counsel to
ensure that its determinations are consistent with all relevant
securities and other laws and regulations regarding the
definition of independent, including those set forth
in pertinent listing standards of the
Nasdaq, as in
effect from time to time.
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Consistent with these considerations, after review of all
relevant transactions or relationships between each director, or
any of his or her family members, and our company, our senior
management and our independent registered public accounting
firm, the Nominating and Corporate Governance Committee has
affirmatively determined that Messrs. Feucht, Kory, Lee,
Richardson, Thorburn and Wong are independent directors within
the meaning of the applicable Nasdaq listing standards.
Dr. Zommer, our Chief Executive Officer, is not an
independent director.
Meetings
of the Board of Directors
The Board met seven times during the last fiscal year. Each
Board member attended 75% or more of the aggregate of the
meetings of the Board and of the committees on which he served,
held during the period for which he was a director or committee
member. The Board reviews its own performance at meetings every
third year. Independent directors meet regularly without other
directors being present.
Information
Regarding Committees of the Board of Directors
The Board has three committees: an Audit Committee, a
Compensation Committee, and a Nominating and Corporate
Governance Committee. Below is a description of each committee
of the Board. Each of the committees has authority to engage
legal counsel or other experts or consultants, as it deems
appropriate to carry out its responsibilities. The Board has
determined that each member of each committee meets the
applicable Nasdaq rules and regulations regarding
independence.
Audit
Committee
The Audit Committee of the Board, or Audit Committee, was
established by the Board in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934
to oversee our corporate accounting and financial reporting
processes and audits of our financial statements. For this
purpose, the Audit Committee performs several functions. The
Audit Committee evaluates the performance of and assesses the
qualifications of the independent registered public accounting
firm; determines and approves the engagement of the independent
registered public accounting firm; determines whether to retain
or terminate the existing independent registered public
accounting firm or to appoint and engage a new independent
registered public accounting firm; reviews and approves the
retention of the independent registered public accounting firm
to perform any proposed permissible non-audit services; monitors
the rotation of partners of the independent registered public
accounting firm on our audit engagement team as required by law;
reviews and approves or rejects transactions between our company
and any related persons; confers with management and the
independent registered public accounting firm regarding the
effectiveness of internal controls over financial reporting;
establishes procedures, as required under applicable law, for
the receipt, retention and treatment of complaints received by
us regarding accounting, internal accounting controls or
auditing matters and the confidential and anonymous submission
by employees of concerns regarding questionable accounting or
auditing matters; and meets to review our annual audited
financial statements and quarterly financial statements The
Audit Committee is composed of four directors:
Messrs. Feucht, Kory, Richardson and Thorburn. The Audit
Committee met eight times during the fiscal year. The Audit
Committee has adopted a written charter that is available to
stockholders on our website at www.ixys.com by clicking on
Investor Relations and then clicking on Audit
Committee Charter.
The Nominating and Corporate Governance Committee reviews the
Nasdaq listing standards definition of independence for Audit
Committee members on an annual basis and has determined that all
members of our Audit Committee are independent. The Nominating
and Corporate Governance Committee has also determined that each
of Messrs. Richardson and Thorburn qualifies as an
audit committee financial expert, as defined in the
applicable rules of the Securities and Exchange Commission, or
SEC.
7
Report of
the Audit Committee of the
Board1
The Audit Committee has reviewed and discussed the audited
financial statements for the fiscal year ended March 31,
2011 with our management. The Audit Committee has discussed with
the independent registered public accounting firm that serves as
our auditors, BDO USA, LLP, the matters required to be discussed
by Statement on Auditing Standards No. 61, as amended
(AICPA, Professional Standards, Vol. 1. AU
section 380), as adopted by the Public Company Accounting
Oversight Board, or PCAOB, in Rule 3200T. The Audit
Committee has also received the written disclosures and the
letter from BDO required by the applicable requirements of the
PCAOB regarding BDOs communications with the Audit
Committee concerning independence and has discussed with BDO its
independence. Based on the foregoing, the Audit Committee has
recommended to the Board of Directors that the audited financial
statements be included in our Annual Report in
Form 10-K
for the fiscal year ended March 31, 2011.
Donald L. Feucht
Samuel Kory
Timothy A. Richardson
James M. Thorburn
Compensation
Committee
The Compensation Committee of the Board, or the Compensation
Committee, is composed of three directors: Messrs. Feucht,
Kory and Richardson. All members of our Compensation Committee
are independent under the Nasdaq listing standards. The
Compensation Committee met eleven times during the fiscal year.
The Compensation Committee has adopted a written charter that is
available to stockholders on our website at www.ixys.com by
clicking on Investor Relations and then clicking on
Compensation Committee Charter.
The Compensation Committee acts on behalf of the Board to
review, adopt, recommend for adoption and oversee various
elements of compensation for our company, including:
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establishment of corporate and individual performance objectives
relevant to the compensation of our executive officers and
evaluation of performance in light of these stated objectives;
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review and approval of the compensation and other terms of
employment or service of the executive officers, including
severance and
change-in-control
arrangements;
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review and recommend to the Board the elements of compensation
for the directors; and
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administration of our equity compensation plans and other
compensation plans and programs that may be adopted from time to
time.
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The Compensation Committee also reviews with management our
Compensation Discussion and Analysis and considers whether to
recommend that it be included in proxy statements and other
filings. The Compensation Committee may delegate its authority
to one or more of its members, subject to such reporting to or
ratification by the committee as it directs. The Compensation
Committees philosophy and approach to executive
compensation, as well as its specific determinations with
respect to executive compensation for the fiscal year ended
March 31, 2011, or fiscal 2011, are described in greater
detail in the Compensation Discussion and Analysis section of
this proxy statement.
Compensation
Committee Interlocks and Insider Participation
None of the members of the Compensation Committee who served as
such during fiscal 2011 is, or was at the time of such service,
an employee or officer of our company. During the 1980s,
Mr. Kory was a vice president of a predecessor of our
company. None of our executive officers serves as a member of
the board of directors or compensation committee of any other
entity that has one or more executive officers serving on the
Board or Compensation Committee of our company.
1 The
material in this Audit Committee Report is not soliciting
material, is not deemed filed with the SEC,
and is not to be incorporated by reference into any filing of
the Company under the 1933 or 1934 Act, whether made before
or after the date hereof and irrespective of any general
incorporation by reference language in any such filing.
8
Compensation
Committee
Report2
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis contained
herein. Based on this review and discussion, the Compensation
Committee has recommended to the Board that the Compensation
Discussion and Analysis be included in our proxy statement
following the fiscal year ended March 31, 2011 and
incorporated into our Annual Report on
Form 10-K
for the fiscal year ended
March 31, 2011.
Donald L. Feucht
Samuel Kory
Timothy A. Richardson
Nominating
and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible
for identifying, reviewing and evaluating candidates to serve as
our directors, reviewing and evaluating incumbent directors,
recommending to the Board for selection candidates for election
to the Board, making recommendations to the Board regarding the
membership of the committees of the Board and addressing
corporate governance matters for us. The Nominating and
Corporate Governance Committee is composed of four directors:
Messrs. Feucht, Kory, Richardson and Thorburn. All members
of the Nominating and Corporate Governance Committee are
independent under the Nasdaq listing standards. The Nominating
and Corporate Governance Committee met four times during the
fiscal year. The Nominating and Corporate Governance Committee
has adopted a written charter that is available to stockholders
on our website at www.ixys.com by clicking on Investor
Relations and then clicking on Nominating Committee
Charter.
Under its charter, the Nominating and Corporate Governance
Committee will consider individuals who are suggested by our
stockholders as potential company nominees to serve on the Board
in the same manner that the committee considers potential
nominees identified through other channels. Stockholder
recommendations for directors must be in writing and sent by
U.S. mail to: General Counsel, IXYS Corporation, 1590
Buckeye Drive, Milpitas, California 95035. The General Counsel
will forward any recommendation to the members of the Nominating
and Corporate Governance Committee.
Board
Composition
As an international semiconductor manufacturer, our business
involves an operational structure that operates on a global
scale and includes research, manufacturing and marketing
functions in a context characterized by evolving technologies,
exposure to business cycles and significant competition. The
Nominating and Corporate Governance Committee is responsible for
reviewing and assessing with the Board the appropriate skills,
experience, and background sought of Board members in light of
our business and the existing membership on the Board. This
assessment of Board skills, experience, and background includes
numerous factors, such as age; understanding of and experience
in manufacturing, technology, finance and marketing;
international experience; and culture. The priorities and
emphasis of the committee and of the Board with regard to these
factors change from time to time to take into account changes in
the companys business and other trends, as well as the
portfolio of skills and experience of current and prospective
Board members.
We do not expect or intend that each director will have the same
background, skills, and experience; we expect that Board members
will have a diverse portfolio of backgrounds, skills, and
experiences. One goal of this diversity is to assist the Board
in its oversight and advice concerning our business and
operations. Listed below are key skills and experience that we
consider important for our directors to have in light of our
current business and structure. The directors biographies
note each directors relevant experience, qualifications,
and skills relative to this list.
2 The
material in this Compensation Committee Report is not
soliciting material, is not deemed filed
with the SEC, and is not to be incorporated by reference into
any filing of the Company under the 1933 or 1934 Act,
whether made before or after the date hereof and irrespective of
any general incorporation by reference language in any such
filing.
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Semiconductor industry experience
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Senior leadership experience
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Technical expertise
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Public company board experience
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Financial expertise
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Business development and mergers and acquisitions experience
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International business experience
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Board members should possess the highest personal and
professional ethics, integrity and values, informed judgment,
and sound business experience, and be committed to representing
the long-term interests of our stockholders. They must also have
an inquisitive and objective perspective, the ability to make
independent analytical inquiries, practical wisdom and mature
judgment. These factors, and others considered useful by the
Board, are reviewed in the context of an assessment of the
perceived needs of the Board at a particular point in time.
Board members must be willing and able to devote sufficient time
to the affairs of our company and are expected to rigorously
prepare for, attend, and participate in all Board and applicable
committee meetings. Each Board member is expected to ensure that
other existing and planned future commitments do not materially
interfere with the members service as a director. These
other commitments will be considered by the Nominating and
Corporate Governance Committee and the Board when reviewing
Board candidates.
The
Boards Leadership Structure
The Board currently combines the role of Chairman of the Board
and Chief Executive Officer. The Board believes that the Chief
Executive Officer is best situated to serve as Chairman of the
Board because he is the director most familiar with the
Companys business and industry and is therefore best able
to identify the strategic priorities to be discussed by the
Board. The Board believes that combining the role of Chairman of
the Board and Chief Executive Officer facilitates information
flow between management and the Board and fosters strategic
development and execution. The Board has not appointed a lead
independent director; however, the Board maintains effective
independent oversight through a number of governance practices,
including open and direct communication with management, input
on meeting agendas and regular executive sessions. Further, the
small size of the Board, set at seven members, and the extensive
overlap of the independent directors on the three standing
committees obviates the need for a single individual to assume,
and be compensated for, the communication and coordination
function of a lead director.
Risk
Oversight and the Board
One of the Boards functions is oversight of risk
management. Risk is inherent in business, and the
Board seeks to understand and advise on risk in conjunction with
the activities of the Board and the Boards committees.
The Board and management consider risk for these
purposes to be the possibility that an undesired event could
occur that adversely affects the achievement of our objectives.
Risks vary in many ways, including the ability of the company to
anticipate and understand the risk, the types of adverse impacts
that could occur if the undesired event occurs, the likelihood
that an undesired event and a particular adverse impact would
occur, and the ability of the company to control the risk and
the potential adverse impacts. Examples of the types of risks
faced by a company include:
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macro-economic risks, such as inflation, reductions in economic
growth or recession;
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political risks, such as restrictions on access to markets,
confiscatory taxation or expropriation of assets;
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event risks, such as natural disasters; and
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business-specific risks related to strategic position,
operational execution, financial structure, legal and regulatory
compliance and corporate governance.
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Not all risks can be dealt with in the same way. Some risks may
be easily perceived and controllable, and other risks are
unknown; some risks can be avoided or mitigated by particular
behavior and some risks are unavoidable as a practical matter.
For some risks, the potential adverse impact would be minor,
and, as a matter of business judgment, it may not be appropriate
to allocate significant resources to avoid the adverse impact;
in other cases, the adverse impact could be significant, and it
is prudent to expend resources to seek to avoid or mitigate the
potential adverse impact. In some cases, a higher degree of risk
may be acceptable because of a greater perceived potential for
reward. Our company engages in numerous activities seeking to
align its voluntary risk-taking with company strategy, and
understands that its projects and processes may enhance our
business interests by encouraging innovation and appropriate
levels of risk-taking.
Management is responsible for identifying risk and risk controls
related to significant business activities; mapping the risks to
company strategy; and developing programs and recommendations to
determine the sufficiency of risk identification, the balance of
potential risk to potential reward and the appropriate manner in
which to control risk. The Board implements its risk oversight
responsibilities by having management provide at least annual
briefings on the significant voluntary and involuntary risks
that the company faces and how the company is seeking to control
risk if and when appropriate. Generally, risk oversight is
addressed as part of the full Boards engagement with the
CEO and management. In some cases, a Board committee is
responsible for oversight of specific risk topics. For example,
the Audit Committee oversees issues related to internal control
over financial reporting and the Compensation Committee oversees
risks related to compensation programs, as discussed in greater
detail in Executive Compensation.
Stockholder
Communications with the Board
The Board believes that management speaks for our company.
Individual Board members may, from time to time, meet or
otherwise communicate with various constituencies that are
involved with our company, but it is expected that Board members
would do this with knowledge of management and, in most
instances, only at the request of management.
In cases where stockholders wish to communicate directly with
one or more of the independent directors, email messages can be
sent to directorcom@ixys.net. The messages will be received by
our General Counsel and forwarded to the Chairman of our
Nominating and Corporate Governance Committee, who will
determine their distribution to the appropriate committee of the
Board or independent director and facilitate an appropriate
response.
PROPOSAL 2
ADOPTION
OF 2011 EQUITY INCENTIVE PLAN
On June 2, 2011, the Board adopted the 2011 Equity
Incentive Plan, or the 2011 Plan, and now seeks stockholder
approval of the 2011 Plan at the Annual Meeting.
The Board believes the 2011 Plan is necessary to give our
company the continued ability to attract and retain qualified
employees, consultants and non-employee directors with
appropriate equity-based awards, motivate high levels of
performance, recognize employee contributions to our success and
align the interests of plan participants with those of our
stockholders. The Board believes that the ability to grant
equity-based awards is needed for our company to remain
competitive for qualified employee, consultants and non-employee
directors in the semiconductor industry, particularly against
similar companies vying for a limited talent pool. The 2011 Plan
contains a number of provisions that the Board believes are
consistent with the interests of stockholders and sound
corporate governance, which include:
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No Stock Option Repricings. The 2011 Plan
prohibits the repricing of stock options and stock appreciation
rights without the approval of the stockholders. The provision
applies to both direct repricings lowering the
exercise price of a stock option and indirect
repricings canceling an outstanding stock option and
granting a replacement stock option with a lower exercise
price.
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Individual Grant Limits. No participant may be
granted awards in any one year to purchase more than an
aggregate of 200,000 shares.
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No Annual Evergreen Provision. The
2011 Plan provides a fixed allocation of shares, thereby
requiring stockholder approval of any additional allocation of
shares.
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No Discount Stock Options. The 2011 Plan prohibits
the grant of a stock option with an exercise price of less than
the fair market value of the closing price of our common stock
on the date the stock option is granted.
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Independent Committee. The 2011 Plan will be
administered by the Compensation Committee of the Board, which
consists of independent directors within the meaning
of
Section 16b-3
of the Securities Exchange Act of 1934 and under the applicable
rules of Nasdaq.
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The 2011 Plan reserves 600,000 shares of our common stock
for issuance pursuant to awards granted under the 2011 Plan. The
600,000 shares reserved for issuance under the 2011 Plan
will serve as the underlying value for all equity awards under
the 2011 Plan. However, no more than 1,000 of these shares may
be issued under the 2011 Plan as full-value awards,
which under the 2011 Plan includes both restricted stock and
restricted stock units. The provisions of the 2011 Plan are
summarized below. There has been no determination with respect
to future awards under the 2011 Plan as of the date of this
Proxy Statement. At the regular closing of the Nasdaq Global
Market on July 19, 2011, the price per share of our common
stock was $15.09.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL 2.
Summary
of the 2011 Equity Incentive Plan
General
The 2011 Plan provides for grants of stock options, stock
appreciation rights, or SARs, restricted stock and restricted
stock units, all of which are sometimes referred to individually
or collectively as Awards, to employees, consultants,
non-employee directors of our company and its subsidiaries.
Stock options may be either incentive stock options,
or ISOs, as defined in Section 422 of the Internal Revenue
Code, or non-qualified stock options, or NQSOs.
Plan
Administration; Amendment and Termination
The Board
and/or one
or more of its committees shall administer the 2011 Plan in
accordance with applicable law, referred to as the
Administrator. The Administrator may, amend, suspend or
terminate any portion of the 2011 Plan for any reason, but must
obtain stockholder consent for any material amendments to the
2011 Plan, or the consent of affected plan participants if any
such action alters or impairs any obligations regarding Awards
that have been granted. The 2011 Plan terminates in 2021.
However, such termination will not affect Awards granted under
the 2011 Plan prior to termination.
Reversion
of Shares to the Plan
When Awards made under the 2011 Plan expire or are forfeited,
the underlying shares will become available for future Awards
under the 2011 Plan. Shares awarded and delivered under the 2011
Plan may be authorized but unissued, or reacquired shares.
Eligibility
for Awards
Employees, consultants and non-employee directors of our company
or its subsidiaries may be granted Awards under the 2011 Plan.
We currently have about 1,250 employees, fewer than ten
consultants and six non-employee directors. The Administrator
determines which individuals will receive Awards, as well as the
number and composition of each Award. Awards under the 2011 Plan
may consist of a single type or any combination of the types of
Awards permissible under the 2011 Plan as determined by the
Administrator, or by the full Board in the case of Awards to
non-employee directors. These decisions may be based on various
factors, including a participants
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duties and responsibilities, the value of the participants
past services,
his/her
potential contributions to our success, and other factors.
Exercise
Price Limitations
The Administrator will determine the exercise price for the
shares underlying each Award on the date the Award is granted.
The exercise price for shares under an ISO may not be less than
100% of fair market value on the date the Award is granted under
Section 422 of the Internal Revenue Code, or the Code.
Similarly, under the terms of the 2011 Plan, the exercise price
for SARs and NQSOs may not be less than 100% of fair market
value on the date of grant. There is no minimum exercise price
prescribed for restricted stock and restricted stock units
awarded under the 2011 Plan. However, no more than
1,000 shares may be granted under the 2011 Plan pursuant to
full-value Awards, which includes both restricted
stock and restricted stock units.
No
Material Amendments or Re-Pricing Without Stockholder
Approval
Except for adjustments upon changes in capitalization,
dissolution, merger or asset sale, the 2011 Plan prohibits our
company from making any material amendments to the 2011 Plan or
decreasing the exercise price or purchase price of any
outstanding Award, including by means of cancellation or
re-grant, without stockholder approval.
Individual
Grant Limits
No participant may be granted Awards in any one year to purchase
more than an aggregate of 200,000 shares. Such limitation
is subject to proportional adjustment in connection with any
change in our capitalization as described in the 2011 Plan.
Award
Exercise; Payment of Exercise Price
The Administrator will determine when Awards become exercisable.
However, no Award may have a term longer than ten years from the
date of grant unless otherwise approved by our stockholders, and
no Award may be exercised after expiration of its term. Payment
for any shares issued upon exercise of an Award shall be
specified in each participants Award agreement, and may be
made by cash, check or other means specified in the 2011 Plan.
Tax
Withholding
We shall have the right to deduct or withhold or require a
participant to remit to us an amount sufficient to satisfy
federal, state, local and any applicable foreign taxes
(including FICA obligations, if applicable) required to be
withheld with respect to the grant, exercise or vesting of any
Award.
Effect
of Termination, Death, or Disability
If a participants employment, consulting arrangement, or
service as a non-employee director terminates for any reason,
vesting of ISOs, NQSOs and SARs generally will stop as of the
effective termination date. Participants generally have three
months from their termination date to exercise vested
unexercised options and SARs before they expire. Longer
post-termination exercise periods apply in the event the
termination of employment or cessation of service results from
death or disability. If a participant is dismissed for cause,
the right to exercise shall terminate five business days
following the participants receipt of written notice from
us of the participants termination.
Non-Transferability
of Awards
Unless otherwise determined by the Administrator, Awards granted
under the 2011 Plan are not transferable other than by will or
the laws of descent and distribution, and may be exercised by
the participant only during the participants lifetime.
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Stock
Appreciation Rights
Under the 2011 Plan, SARs may be settled in shares or cash and
must be granted with an exercise price not less than 100% of
fair market value on the date of grant. Upon exercise of a SAR,
a participant is entitled to receive cash or a number of shares
equivalent in value to the difference between the fair market
value on the exercise date and the exercise price of the SAR.
For example, assume a participant is granted 100 SARs with an
exercise price of $10 and assume the SARs are later exercised
when the fair market value of the underlying shares is $20 per
share. At exercise, the participant is entitled to receive
50 shares [(($20 $10) x 100) / $20],
or $1,000 in cash (50 x $20).
Restricted
Stock
The 2011 Plan also permits us to grant restricted stock. The
Administrator has discretion to establish periods of restriction
during which shares awarded remain subject to forfeiture or our
right to repurchase if the participants employment
terminates for any reason, including death or disability.
Restrictions may be based on the passage of time, the
achievement of specific performance objectives, or other
measures as determined by the Administrator in its discretion.
During periods of restriction, a participant has the right to
vote his/her
restricted stock and to receive distributions and dividends, if
any, but may not sell or transfer any such shares.
Restricted
Stock Units
The Plan also permits the Company to grant restricted stock
units that are payable in Company shares or in cash. Each
restricted stock unit is equivalent in value to one share of the
Companys common stock. Depending on the number of
restricted stock units that become vested at the end of the
performance period, the equivalent number of shares are payable
to the participant, or the equivalent value in cash. The
restricted stock units may be vested upon the attainment of
performance goals of based on continued service.
Changes
in Capitalization; Change of Control
The 2011 Plan provides for exercise price and quantity
adjustments if we declare a stock dividend or stock split. Also,
vesting or restriction periods may be accelerated if we merge
with another entity that does not either assume the outstanding
Awards or substitute equivalent Awards. In such case, vesting
will be accelerated ten days prior to the consummation of the
Change in Control and the Award will terminate and no longer be
exercisable upon consummation. We have employment arrangements
with certain executive officers that provide for accelerated
vesting of stock options.
Participation
in the Plan
Except as otherwise provided in the 2011 Plan, the grant of
Awards is subject to the discretion of the Administrator. No
determinations have been made with respect to future awards
under the 2011 Plan.
U.S.
Federal Income Tax Consequences
Option
Grants
Options granted under the 2011 Plan may be either ISOs, which
are intended to satisfy the requirements of Section 422 of
the Code, or NQSOs, which are not intended to meet those
requirements. The Federal income tax treatment for NQSOs and
ISOs is summarized below.
Non-Qualified
Stock Options
No taxable income is recognized by an optionee upon the grant of
an NQSO. Generally, the optionee will recognize ordinary income
in the year in which the option is exercised. The amount of
ordinary income will equal to the excess of the fair market
value of the purchased shares on the exercise date over the
exercise price paid for the shares. Our company and the optionee
are required to satisfy the tax withholding requirements
applicable to that income, unless the optionee is a non-employee
director or consultant, where in such case tax withholding is
not required. We will be entitled to an income tax deduction
equal to the amount of ordinary income recognized by the
optionee with respect to exercised NQSOs.
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Incentive
Stock Options
No taxable income is recognized by an optionee upon the grant of
an ISO. Generally, the optionee will not recognize ordinary
income in the year in which the option is exercised, although
the optionees gain from exercise may be subject to
alternative minimum tax. If the optionee sells the underlying
shares acquired from the option within two years after the
option grant date or within one year of the option exercise
date, then the sale is treated as a disqualifying disposition
and the optionee will be taxed in the year of disposition on the
gain from exercise, but not exceeding the gain from disposition
as ordinary income and the balance of the gain from disposition,
if any, as short-term or long-term capital gain. We will be
entitled to an income tax deduction that equals the amount of
the optionees compensatory ordinary income. If the
optionee does not make a disqualifying disposition, then we will
not be entitled to a tax deduction.
Stock
Appreciation Rights
No taxable income is recognized by an optionee upon the grant of
a SAR. The participant will recognize ordinary income in the
year in which the SAR is exercised. The amount of ordinary
income will be fair market value of the shares received or the
cash payment. Our company and the participant are required to
satisfy the applicable tax withholding requirements, unless the
participant is a non-employee director, where in such case tax
withholding is not required. We will be entitled to an income
tax deduction equal to the amount of ordinary income recognized
by the participant with respect to exercised SARs.
Restricted
Shares Plan
The tax principles applicable to the issuance of restricted
shares under the 2011 Plan will be substantially the same as
those summarized above for the exercise of non-statutory option
grants in that they are both governed by Section 83 of the
Code. Generally, when the restriction lapses, the grantee will
have ordinary income equal to the difference between the fair
market value of the shares on the vesting date and any amount
paid for the shares. Alternatively, at the time of the grant,
the grantee may elect under Section 83(b) of the Code to
include as ordinary income in the year of the grant, an amount
equal to the difference between the fair market value of the
granted shares on the grant date and any amount paid for the
shares. If the Section 83(b) election is made, the grantee
will not recognize any additional compensation income when the
restriction lapses, but may have capital gain income or loss
upon sale of the shares. We will be entitled to an income tax
deduction equal to the ordinary income recognized by the grantee
in the year in which the grantee recognizes such income.
Restricted
Stock Units
Generally, a plan participant who is granted restricted stock
units will recognize ordinary income in the year payment occurs.
The income recognized will generally be equal to the fair market
value of the shares received or to the cash payment. We will
generally be entitled to an income tax deduction equal to the
income recognized by the participant on the payment date for the
taxable year in which the ordinary income is recognized by the
participant.
Deductibility
of Executive Compensation
Compensation deemed paid by us in connection with the exercise
of both ISOs and NQSOs granted with exercise prices equal to the
fair market value of the shares on the grant date may or may not
be subject to the Code Section 162(m) $1 million
limitation per covered individual on the deductibility of the
compensation paid to our executive officers, depending on the
facts and circumstances relating to the individual and the grant.
Stockholder
Approval
We are seeking stockholder approval of the 2011 Plan, including
the shares reserved under the 2011 Plan. The Board believes that
it is in our best interest to have an equity incentive program.
The 2011 Plan provides a meaningful opportunity for employees,
consultants and non-employee directors to acquire a proprietary
interest in our company, thereby encouraging those individuals
to remain in our service and more closely align their interests
with those of the stockholders. A copy of the 2011 Plan is
attached hereto as Exhibit A.
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Required
Vote
The affirmative vote of a majority of the shares of our common
stock present in person or represented by proxy at the meeting
and entitled to vote is required to approve this proposal. If
you are present in person or represented by proxy at the meeting
and abstain from voting on this proposal, it has the same effect
as if you voted against the proposal. Broker non-votes are not
counted for any purpose in determining whether this proposal has
been approved.
Equity
Compensation Plan Information
The following table is provided as additional information on our
equity compensation plans. The information is as of
March 31, 2011.
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(c)
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Number of Securities
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Remaining Available for
|
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|
|
(a)
|
|
|
(b)
|
|
|
Future Issuance under
|
|
|
|
Number of Securities
|
|
|
Weighted-Average
|
|
|
Equity Compensation
|
|
|
|
to be Issued upon
|
|
|
Exercise Price of
|
|
|
Plans (excluding
|
|
|
|
Exercise of Outstanding
|
|
|
Outstanding Options,
|
|
|
Securities
|
|
Plan Category
|
|
Options, Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in Column (a))
|
|
|
Equity compensation plans approved by securityholders(1)
|
|
|
4,909,768
|
|
|
$
|
9.04
|
|
|
|
643,993
|
|
Equity compensation plans not approved by securityholders(2)
|
|
|
170,000
|
|
|
$
|
9.02
|
|
|
|
849,552
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,079,768
|
|
|
$
|
9.04
|
|
|
|
1,493,545
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This row includes our 1999 Equity Incentive Plan, the 1999
Non-Employee Directors Equity Incentive Plan, the 2009
Equity Incentive Plan and the 1999 Employee Stock Purchase Plan.
Of these shares, 405,759 shares remain available as of
March 31, 2011 for the grant of future rights under our
1999 Employee Stock Purchase Plan. Under our 1999 Employee Stock
Purchase Plan, participants are permitted to purchase our common
stock at a discount on certain dates through payroll deductions
within a pre-determined purchase period. Accordingly, these
numbers are not determinable. Number of securities to be issued
upon exercise of outstanding options, warrants and rights
includes stock options exercisable for 2,726 shares of our
common stock at a weighted average exercise price of $4.53 per
share, which were assumed in business combinations. |
|
(2) |
|
This row represents the Zilog 2002 Omnibus Stock Incentive Plan
and the Zilog 2004 Omnibus Stock Incentive Plan, which were
assumed upon the acquisition of Zilog. |
Zilog
2002 Omnibus Stock Incentive Plan
In connection with the acquisition of Zilog, the Board approved
the assumption of the Zilog 2002 Omnibus Stock Incentive Plan,
or the Zilog 2002 Plan, with respect to the shares available for
grant as stock options. Employees of Zilog and persons first
employed by our company after the closing of the acquisition of
Zilog may receive grants under the Zilog 2002 Plan. At the time
of the assumption of the Zilog 2002 Plan by our company, up to
366,589 shares of our common stock were available for grant
under the plan.
Stock options granted under the Zilog 2002 Plan were permitted
to be: (i) incentive stock options or nonqualified stock
options or (ii) EBITDA-linked options
and/or
non-EBITDA linked options. We will not grant any EBITDA-linked
options and none are outstanding. In general, non-EBITDA-linked
options granted pursuant to the Zilog 2002 Plan will be
exercisable at such time or times and subject to such terms and
conditions (including the vesting schedule, period of
exercisability and expiration date) as is determined by the plan
administrator, generally expected to be the Compensation
Committee, in the applicable award agreements or thereafter. The
exercise price per share payable upon the exercise of an option
will be established by such administrator, in its sole
discretion, at the time of grant. The term of a
non-EBITDA-linked option is determined at the time of grant, but
will not exceed ten years. The Board cannot grant restricted
stock awards under the Zilog 2002 Plan.
16
Zilog
2004 Omnibus Stock Incentive Plan
In connection with the acquisition of Zilog, the Board approved
assumption of the Zilog 2004 Omnibus Stock Incentive Plan, or
the Zilog 2004 Plan. Employees of Zilog and persons first
employed by our company after the closing of the acquisition of
Zilog may receive grants under the Zilog 2004 Plan. Under the
Zilog 2004 Plan, incentive stock options, non-statutory stock
options or restricted shares may be granted. At the time of the
assumption of the Zilog 2004 Plan by our company, up to
652,963 shares of our common stock were available for grant
under the plan.
In general, the options and shares granted pursuant to the Zilog
2004 Plan are exercisable at such time or times, and subject to
such terms and conditions (including the vesting schedule,
period of exercisability and expiration date) as the plan
administrator, generally expected to be the Compensation
Committee of our Board of Directors, determines in the
applicable option agreement. The exercise price per share,
payable upon the exercise of an option, is established by such
administrator at the time of the grant and is not less than the
par value per share of common stock on the date of the grant and
in the case of an incentive stock option generally is not less
than 100% of the fair market value per share on the date of
grant.
In general, restricted stock awards granted pursuant to the
Zilog 2004 Plan are subject to a restricted stock award
agreement that reflects the terms, conditions and restrictions
related to the restricted stock award. The agreement includes,
among other things, the period during which the restricted stock
is subject to forfeiture, the imposition of any
performance-based conditions or other restrictions on the award,
if any.
PROPOSAL 3
ADVISORY
VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS
The recently enacted Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, or the Dodd-Frank Act, enables our
stockholders to vote to approve, on an advisory basis, the
compensation of our named executive officers as disclosed in
this proxy statement in accordance with the SECs rules.
The compensation of our named executive officers subject to the
vote is disclosed in the Compensation Discussion and Analysis,
the compensation tables and the related narrative disclosure
contained in this proxy statement. As discussed in those
disclosures, we believe that our compensation policies and
decisions are aligned with our stockholders interests.
Compensation of our named executive officers is designed to
enable us to attract and retain talented and experienced
executives to lead our company successfully in a competitive
environment.
We are asking our stockholders to indicate their support for the
compensation of our named executive officers as described in
this proxy statement. This proposal, commonly known as a
say-on-pay
proposal, gives our stockholders the opportunity to express
their views on the compensation of our named executive officers.
This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our named
executive officers and the philosophy, policies, and practices
described in this proxy statement. Accordingly, we will ask our
stockholders to vote For the following resolution at
the Annual Meeting:
RESOLVED, that the companys stockholders approve, on
an advisory basis, the compensation of the named executive
officers, as disclosed in the companys Proxy Statement for
the 2011 Annual Meeting of Stockholders pursuant to the
compensation disclosure rules of the Securities and Exchange
Commission, including the Compensation Discussion and Analysis,
the Summary Compensation Table and the other related tables and
disclosure.
The
say-on-pay
vote is advisory, and therefore not binding on the company, our
Board or our Compensation Committee. Our Board and our
Compensation Committee value the opinions of our stockholders
and will take into account the outcome of this vote in
considering future compensation arrangements.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL 3.
17
PROPOSAL 4
ADVISORY
VOTE ON THE FREQUENCY OF THE
ADVISORY
VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS
In addition to providing stockholders with the opportunity to
cast an advisory vote on the compensation of our named executive
officers, the Dodd-Frank Act enables our stockholders to
indicate how frequently we should seek an advisory vote on the
compensation of our named executive officers. Stockholders may
indicate whether they would prefer an advisory vote on executive
compensation every year, every two years or every three years,
or may abstain from voting on the proposal.
The Board recommends that this advisory vote be held once every
three years, but stockholders are not voting to approve or
disapprove of that recommendation. We believe that a triennial
voting frequency will provide our stockholders with sufficient
time to evaluate the effectiveness of our overall compensation
philosophy, policies, and practices in the context of our
long-term business results for the corresponding period, while
avoiding over-emphasis on short-term variations in compensation
and business results. We also believe that a three-year
timeframe provides a better opportunity to observe and evaluate
the impact of any changes to our executive compensation policies
and practices that have occurred since the last advisory vote.
You may cast your vote on your preferred voting frequency by
choosing any of the following four options with respect to this
proposal: Every Year, Every Two Years,
Every Three Years or Abstain. The vote
on the frequency of an advisory vote on the compensation of our
named executive officers is advisory, and therefore not binding
on the company, our Board or our Compensation Committee. Our
Board and our Compensation Committee value the opinions of our
stockholders and will take into account the outcome of this vote
in considering the frequency of the advisory vote on the
compensation of our named executive officers.
THE BOARD
OF DIRECTORS RECOMMENDS
A VOTE FOR A FREQUENCY OF
EVERY THREE YEARS
FOR FUTURE ADVISORY VOTES ON THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
PROPOSAL 5
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC
ACCOUNTING FIRM
The Audit Committee has selected BDO USA, LLP as the independent
registered public accounting firm to conduct the audit for our
fiscal year ending March 31, 2012 and has further directed
that management submit the selection for ratification by the
stockholders at the Annual Meeting. Representatives of BDO are
expected to be present at the Annual Meeting, will have an
opportunity to make a statement and will be available to respond
to appropriate questions.
Neither our Bylaws nor other governing documents or law require
stockholder ratification of the selection of BDO as our
independent registered public accounting firm. However, the
Audit Committee is submitting the selection of BDO to the
stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the
Audit Committee will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee in
its discretion may direct the appointment of different
independent auditors at any time during the year if they
determine that such a change would be in the best interests of
us and our stockholders.
18
Fees Paid
to Independent Registered Public Accounting Firm
The following table shows the fees for audit and other services
provided by BDO, our independent registered public accounting
firm, for fiscal years 2011 and 2010. All figures are net of
value added tax and other similar taxes assessed by
non-U.S. jurisdictions
on the amount billed by BDO, but include
out-of-pocket
expenses. All of the services described in the following fee
table were approved in conformity with the Audit
Committees pre-approval process.
|
|
|
|
|
|
|
|
|
|
|
2011 Fees
|
|
|
2010 Fees
|
|
|
Audit Fees
|
|
$
|
1,117,966
|
|
|
$
|
1,128,073
|
|
Audit-Related Fees
|
|
|
|
|
|
|
133,461
|
|
Tax Fees
|
|
|
1,901
|
|
|
|
63,582
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,119,867
|
|
|
$
|
1,325,116
|
|
|
|
|
|
|
|
|
|
|
Audit Fees: For fiscal 2010 and fiscal 2011,
this category includes the integrated audit of our consolidated
financial statements and internal control over financial
reporting, the review of financial statements included in our
Form 10-Q
and statutory audits required by non-US jurisdictions.
Audit-Related Fees: For fiscal 2010, this
category consists of the audit-related work for the Zilog
acquisition.
Tax Fees: For fiscal 2010 and fiscal 2011,
this category consists of services for international tax
compliance.
Policy on
Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services of Independent Registered Public Accounting
Firm
The Audit Committee has adopted a policy and procedures for the
pre-approval of audit and non-audit services rendered by our
independent registered public accounting firm. These services
may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to
18 months, and any pre-approval is detailed as to the
particular service or category of services. The independent
registered public accounting firm and management are required to
periodically report to the Audit Committee regarding the extent
of services provided by the independent registered public
accounting firm in accordance with this pre-approval, and the
fees for the services performed to date. The Audit Committee may
also pre-approve particular services on a
case-by-case
basis.
The Audit Committee has determined that the rendering of
non-audit services by BDO is compatible with maintaining its
independence.
THE BOARD
OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL 5.
19
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of our common stock as of July 19, 2011 by:
(i) each director and nominee for director; (ii) each
of the executive officers named in the Summary Compensation
Table; (iii) all current executive officers and directors
as a group; and (iv) all those known by us to be beneficial
owners of more than five percent of our common stock.
Unless otherwise indicated, the address for each listed
stockholder is:
c/o IXYS Corporation,
1590 Buckeye Drive, Milpitas, California 95035.
|
|
|
|
|
|
|
|
|
|
|
Beneficial
|
|
|
Ownership(1)
|
|
|
Number of
|
|
Percent
|
Name and Address of Beneficial Owner
|
|
Shares
|
|
of Total
|
|
Directors and Executive Officers
|
|
|
|
|
|
|
|
|
Nathan Zommer(2)
|
|
|
7,710,428
|
|
|
|
23.7
|
%
|
Uzi Sasson(3)
|
|
|
586,474
|
|
|
|
1.8
|
%
|
James R. Jones(4)
|
|
|
105,648
|
|
|
|
|
*
|
Donald L. Feucht(5)
|
|
|
151,250
|
|
|
|
|
*
|
Samuel Kory(6)
|
|
|
142,500
|
|
|
|
|
*
|
S. Joon Lee(7)
|
|
|
136,250
|
|
|
|
|
*
|
Timothy A. Richardson(8)
|
|
|
110,000
|
|
|
|
|
*
|
James M. Thorburn(9)
|
|
|
95,172
|
|
|
|
|
*
|
Kenneth D. Wong
|
|
|
|
|
|
|
|
*
|
All current directors and executive officers as a group
(8 persons)(10)
|
|
|
8,932,074
|
|
|
|
26.5
|
%
|
55% Stockholders
|
|
|
|
|
|
|
|
|
Security Investors, LLC(11)
|
|
|
5,466,668
|
|
|
|
17.3
|
%
|
One Security Benefit Place
Topeka, Kansas 66636
|
|
|
|
|
|
|
|
|
Tocqueville Asset Management, L.P.(12)
|
|
|
2,071,740
|
|
|
|
6.6
|
%
|
40 West 57th Street, 19th Floor
New York, NY 10019
|
|
|
|
|
|
|
|
|
Columbia Wanger Asset Management, L.P.(13)
|
|
|
1,900,000
|
|
|
|
6.0
|
%
|
227 West Monroe Street, Suite 3000
Chicago, Il 60606
|
|
|
|
|
|
|
|
|
Sharkz L.P.(14)
|
|
|
2,000,000
|
|
|
|
6.3
|
%
|
|
|
|
* |
|
Represents less than 1%. |
|
(1) |
|
This table is based upon information supplied by executive
officers, directors and principal stockholders and Schedules 13D
and 13G filed with the SEC. Unless otherwise indicated in the
footnotes to this table and subject to community property laws
where applicable, we believe that each of the stockholders named
in this table has sole voting and investment power with respect
to the shares indicated as beneficially owned. Applicable
percentages are based on 31,532,592 shares outstanding on
July 19, 2011, adjusted as required by rules promulgated by
the SEC. |
|
(2) |
|
Includes an aggregate of 2,000,000 shares held by Sharkz
L.P., a partnership controlled by Dr. Zommer, and
12,360 shares held by or on behalf of
Dr. Zommers child. Also includes
1,007,500 shares that Dr. Zommer has the right to
acquire within 60 days of July 19, 2011.
2,050,000 shares are pledged as security for a loan. |
|
(3) |
|
Includes 550,000 shares that Mr. Sasson has the right
to acquire within 60 days of July 19, 2011. |
|
(4) |
|
Includes 68,400 shares that Mr. Jones has the right to
acquire within 60 days of July 19, 2011. |
|
(5) |
|
Includes an aggregate of 2,000 shares held by or on behalf
of Mr. Feuchts wife, as to which Mr. Feucht
disclaims beneficial ownership. Also includes
131,250 shares that Mr. Feucht has the right to
acquire within 60 days of July 19, 2011. |
20
|
|
|
(6) |
|
Includes 131,250 shares that Mr. Kory has the right to
acquire within 60 days of July 19, 2011. |
|
(7) |
|
Includes 131,250 shares that Mr. Lee has the right to
acquire within 60 days of July 19, 2011. |
|
(8) |
|
Includes 110,000 shares that Mr. Richardson has the
right to acquire within 60 days of July 19, 2011. |
|
(9) |
|
Includes 90,000 shares that Mr. Thorburn has the right
to acquire within 60 days of July 19, 2011. |
|
(10) |
|
Includes 2,151,250 shares that current directors and
executive officers have the right to acquire within 60 days
of July 19, 2011. |
|
(11) |
|
Based on a Schedule 13G filed with the Securities and
Exchange Commission on February 11, 2011. |
|
(12) |
|
Based on a Schedule 13G filed with the Securities and
Exchange Commission on January 28, 2011. |
|
(13) |
|
Based on a Schedule 13G filed with the Securities and
Exchange Commission on February 8, 2011. |
|
(14) |
|
These shares are also included in the number of shares reported
for Dr. Zommer. Dr. Zommer is the general partner of
Sharkz L.P. and has sole voting and investment power over the
shares of common stock it holds. |
SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, or
the 1934 Act, requires our directors and executive officers
and persons who own more than ten percent of a registered class
of our equity securities to file with the SEC initial reports of
ownership and reports of changes in ownership of common stock
and other of our equity securities. Officers, directors and
greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a)
forms they file. Based on such forms, during fiscal 2011, all
Section 16(a) reports were timely filed, except for two
late reports for Mr. Sasson and one late report for
Dr. Zommer, each of which related to a single transaction
constituting the withholding of shares of common stock to
satisfy tax withholding obligations that arose on the vesting of
restricted stock.
21
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
This discussion and analysis should be read along with the
tables and text under Executive Compensation that
follow hereafter. Throughout this discussion and analysis, the
Committee refers to the Compensation Committee and
executives refers to our executive officers.
Generally, the Committee limits its deliberations to individuals
determined by the Board to be executive officers under the rules
of the SEC, except for equity compensation and except for
compliance with rules of the SEC. The compensation of other
employees is determined under the direction of the Chief
Executive Officer.
Our
Compensation Philosophy
Our success begins with our culture of innovation, cooperation
and efficiency. Our compensation programs are designed to
support this culture by allowing us to:
|
|
|
|
|
Motivate and reward performance. We believe
that compensation should vary with performance, and that a
significant portion of an executives pay should be linked
to individual and corporate performance.
|
|
|
|
Align employee pay with stockholder
objectives. We believe that our pay program
should connect executives interests with
stockholders interests. In particular, we believe that pay
should reward executives for growing the market value of our
companys stock.
|
|
|
|
Manage resources efficiently. Compensation is
a significant expense, which should be managed appropriately to
achieve our executive reward and retention goals while also
protecting stockholder interests.
|
|
|
|
Attract and retain personnel. The
semiconductor industry is a competitive landscape, where
experienced and talented employees are in demand. Executive
compensation must be competitive to attract and retain the
individuals we need to lead our business.
|
Our
Executive Compensation Program
Our executive compensation program consists of six components:
|
|
|
|
|
Salary
|
|
|
|
Cash performance compensation
|
|
|
|
Other cash bonuses
|
|
|
|
Equity compensation
|
|
|
|
Employee benefits
|
|
|
|
Severance and
change-in-control
compensation
|
Our philosophy is to offer competitive salaries to our
executives and to provide significant rewards through incentive
pay. Incentive cash opportunities are calibrated to be
competitive when performance objectives are achieved and are
primarily intended to reward for performance during the
corresponding fiscal year. Exceptional rewards may be provided
through equity compensation, but only to the degree that our
stock price appreciation is strong. Equity compensation is
intended to reward for long-term performance, in the expectation
that is likely to constitute a significant sum in the event of
long-term growth in the profitability of our company. In
determining executive compensation, the Committee reflects on
compensation in immediately preceding years, but considers every
year to be a new page where goals and potential compensation
could be substantially changed. In general, we place more
emphasis on cash performance compensation and stock options than
on salary. While we offer competitive salaries, we believe we
can create a stronger link between pay and performance by
directing executive pay towards incentive cash performance
compensation and equity rewards. The Committee does not use an
approach based on rigorous adherence to specific metrics;
instead, it exercises a significant degree of judgment.
22
Salaries
We provide salaries sufficient to attract and retain key
executives. To determine the appropriate salary for an
executive, the Committee considers a number of factors,
including the executives responsibilities, experience,
past performance, and expected future contribution to our
company. The Committee also considers the salaries of executives
in similar positions at comparable companies. Generally, in
setting salaries the Committee seeks to pay competitive salaries
and to provide the funds necessary for a current standard of
living for the executive.
Cash
Performance Compensation
Our cash performance compensation program is intended to provide
economic incentives for executives to work for the achievement
of objectives that the Committee believes will foster our growth
and profitability. It rewards executives in light of their
achievement of their performance objectives and for helping us
achieve our annual financial goals. Each year, the Committee
develops a cash performance compensation program for the two
most senior executives. To establish these programs, the
Committee considers the executives responsibilities and
expected contributions to our company.
The cash performance compensation program is composed of a
series of objectives, a set of weights for the objectives and,
when the Committee believes that it can reasonably assess
possible outcomes in advance, three potential measurement
levels, consisting of a threshold level, a target level and a
maximum level. Objectives are set in light of the
Committees views on the goals and challenges for our
company and the individual for the corresponding fiscal year.
The Committee considers the measurement levels and objectives,
along with the weights accorded the objectives, to be guidelines
for the Committee to use in evaluating the cash performance
compensation to be paid to executives and for executives to use
in understanding the goals of the Committee for their
performance. The amount of the cash performance compensation
will be determined by the Committee in light of its evaluation
of each executives performance in total and not based on
the mechanical application of any formula. The Committee may
decide to award additional amounts for performance in excess of
an objective or award lesser amounts for partial performance of
an objective. The Committee may also consider other factors in
ultimately determining the amount of a cash performance
compensation. Thus, the amount of cash performance compensation
to be paid to an executive is in the discretion of the
Committee, to be determined after completion of the fiscal year.
Other
Cash Bonuses
From time to time, the Committee has awarded cash bonuses
outside of the cash performance compensation structure. These
bonuses relate to circumstances unique to the individual and
often to recognition for years of service to our company or for
a specific level of achievement.
Equity
We believe equity-based compensation is critical to our overall
pay program for executives. Equity-based compensation provides
several significant advantages:
|
|
|
|
|
It allows us to provide exceptional potential rewards. Those
exceptional rewards are realized, however, only if our growth is
strong as evidenced by stock price appreciation and value is
created for stockholders.
|
|
|
|
It creates a strong incentive for executives to improve
financial results and take the right actions to increase our
value over the long term. Because the ultimate value of the
award varies with our stock price, which is in turn affected by
our results, equity-based compensation creates a strong link
between pay and performance.
|
|
|
|
It links executives interests directly with
stockholders, since rewards depend on stock performance.
|
Currently, the Committee views stock options in various forms as
the best method to motivate our executives. Stock options
encourage executives to focus on value creation, since stock
options provide rewards only when our stock price increases. The
vesting schedules we use delay rewards until the future, thereby
maintaining incentives for our executives and helping us retain
key talent. The Committee awarded restricted stock units for
about a year, but management found that employees did not
readily understand restricted stock units or react to the award
as an
23
incentive to same degree as with stock options. Stock options,
having been in common use in the semiconductor industry for
decades, were judged to be better understood and a more
effective incentive. The Committee, therefore, reverted to the
use of stock options.
Determining
the Size of Individual Equity Incentive Awards
To determine the appropriate size of an executives equity
incentive award, the Committee considers several factors,
including the executives past performance and expected
future contribution, the retention value of the executives
prior unvested option grants and our growth and performance
outlook.
Timing of
Grants
Historically, executives generally received an equity incentive
award following employment and, thereafter, a single equity
incentive award each year. We do not grant re-load options, make
loans to executives to exercise their stock options or grant
stock options at a discount. The Committee generally grants
equity incentives to our executives at regular quarterly
meetings. The Committee does not have an express policy
regarding the timing of grants to executives. The Board or the
Committee may grant options when in possession of material
non-public information.
Exercise
Price
The exercise price of all stock option grants is at a minimum
the closing price of a share of our common stock on Nasdaq on
the date of grant.
Vesting
Equity incentive awards cannot be exercised until they vest. The
principal purpose of vesting is to serve as an employee
retention tool. Employees who leave before their awards vest
lose any value in their unvested equity incentive awards. The
vesting requirements for our executives are typically the same
as those for our employees. Generally, our equity incentive
awards vest in equal annual installments over a four year period
or, in other words, at the rate of 25% per year.
Dr. Nathan
Zommer
Dr. Zommer has informed the Committee that henceforth he
only wishes to receive equity compensation for his service as a
director and, therefore, to be considered only for an equity
incentive equivalent to the annual grant generally made for
continuing directors. Currently, that is the grant of a stock
option exercisable for 20,000 shares of our common stock,
which vests over the course of a year. The Committee approves of
this practice and expects to follow it in the future.
Other
Benefits
We provide Dr. Zommer and Mr. Sasson with a limited
number of benefits not generally made available to all
employees. These benefits primarily consist of car allowances,
term life insurance and reimbursement for tax planning and the
preparation of tax returns. These benefits for senior executives
are a longstanding practice by our company and the Committee has
viewed them as immaterial in amount. These benefits are required
by the terms of their employment agreements. See Executive
Compensation Employment Agreement. In
addition, as a director, Dr. Zommer receives a benefit
accorded directors, the reimbursement of estate planning
expenses.
Like all of our full-time domestic employees, our executives are
eligible to participate in our 1999 Employee Stock Purchase
Plan, our 401(k) plan, and other health and welfare insurance
programs. We believe we offer a competitive package of health
and welfare programs. To ensure our total compensation package
remains competitive with other companies, we compare our health
and welfare benefits with the packages offered by other
companies.
24
Severance
and Change in Control Provisions
We have severance and change in control agreements with
Dr. Zommer and Mr. Sasson. See Executive
Compensation Potential Payments upon Termination or
Change in Control. The Committee believes that executive
severance and change in control provisions are appropriate for
our senior executives. These provisions are sometimes necessary
to attract or retain key personnel and to assist executives in
focusing on the best course for our company. The Committee has
selected a double trigger in the event of a change in control
for the payment of compensation, in the belief that incremental
compensation is appropriate only if there is a loss of, or
material change in, a position after a change in control.
Determining
Executive Pay
After the end of each fiscal year, the Committee reviews our
executive compensation program. The review involves the analysis
of market pay practices, the assessment of our existing pay
practices and the consideration of our goals for the future. As
a result of this review, the executive compensation program for
the next fiscal year is formulated.
At the same time as establishing the compensation program for
the current year, the process of evaluating individual
performance and making incentive cash compensation decisions for
the prior fiscal year is also occurring. The CEO reviews the pay
and performance of each executive other than himself and makes
pay recommendations to the Committee for each of those
executives. The Committee reviews those recommendations, taking
into account:
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|
|
|
|
The CEOs assessment of the performance of each executive
other than himself;
|
|
|
|
Each executives pay history and unvested equity incentives;
|
|
|
|
The difficulty of the executives role; and
|
|
|
|
Periodically, but not annually, executive pay at comparable
companies.
|
As necessary, the Committee discusses changes to the CEOs
recommendations with the CEO and then approves compensation
actions for each executive.
The Committee makes compensation decisions for the CEO
separately without the CEOs participation. The Committee
evaluates the CEOs performance in light of its judgment of
results achieved. Input on our CEOs performance is also
solicited from the other members of the Board.
At the end of this process, the Committees decisions
included the following compensation actions for our two most
senior executives:
|
|
|
|
|
Objectives, weights and measurement levels for the cash
performance compensation programs for the current fiscal year;
|
|
|
|
Any changes to salary; and
|
|
|
|
The amount of any equity incentive awards for the fiscal year.
|
The decisions of the Committee were then communicated to the
executives by the Chairman of the Committee.
Executive
Compensation Consulting
From time to time, the Committee engages an executive
compensation consulting firm. While the Committee has worked
with the same individual in recent years, during fiscal 2011, he
transitioned to Hay Group, Inc. from Presidio Pay Advisors, Inc.
It is the Committees practice to request of its
compensation consulting firm that it provide advice on
compensation issues identified by the Committee and, when
requested by the Committee, gather and analyze third-party data
about the compensation practices of our peer companies against
which we measure our compensation. During fiscal 2011, the work
was limited to advising on the Committees initial proposal
for the fiscal 2011 cash performance compensation program and to
preparatory work for a report to be issued for use by the
25
Committee in fiscal 2012. Both firms reported directly to the
Committee and worked solely for the Committee. Our company has
not employed other compensation consultants.
Compensation
Benchmarking
In setting executive pay, we are mindful of the competitive
market. To gauge our pay against our competitors and against the
broader marketplace, the Committee has, from time to time,
requested our compensation consultant to provide us with survey
information of the pay practices generally occurring in the
semiconductor industry. However, in part because of its view
that economic conditions made the expense of such unwarranted,
the Committee did not reviewed such data, nor set compensation
in reliance thereon for a number of years, including for fiscal
2011.
Executive
Pay Decisions for Fiscal 2011
Under their employment agreements, Dr. Zommers annual
salary is at least $566,000 and Mr. Sassons annual
salary is at least $330,000. As a part of its regular practice
in setting the salaries of the two executives, the Committee
considers the responsibilities of the executives beyond those
typically associated with their roles; in particular, that
Dr. Zommer serves as the senior technical executive of our
company and that Mr. Sasson has significant operational
responsibilities and serves as the senior sales executive of our
company. For fiscal 2011, the salaries of Dr. Zommer and
Mr. Sasson were initially paid at the rate required in
their employment agreements and then, effective June 1,
2010, increased to $580,000 and $355,000, respectively. The
Compensation Committee viewed Dr. Zommers increase,
the first to his regular salary rate in about three years, as an
inflation adjustment. Mr. Sassons raise was
considered to be a 5% raise in recognition of his promotion to
President in December 2009 and an inflation adjustment. During
fiscal 2011, in accordance with our general policy for
employees, Mr. Sasson cashed out vacation days for a
payment of $13,654. Mr. Joness cash pay consists of a
modest salary and additional payments based on hours worked. In
June 2011, Mr. Jones ceased being an executive officer of
our company, but continued as an employee.
Cash
Performance Compensation
In establishing the cash performance compensation program for
fiscal 2011, the Committee set a target award for
Dr. Zommer of $435,000 and a target award for
Mr. Sasson of $265,000. The Committee established a maximum
potential award for each executive of 1.75 times the amount of
his target award. For both executives, the set of objectives
consisted of four quantitative objectives and one qualitative
objective. Each quantitative objective consisted of three
numbers, with a number corresponding to each of the concepts of
threshold, target and maximum.
The fiscal 2011 objectives, weights and measurement levels were
as follows:
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|
|
|
|
Objective
|
|
Weight
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
|
|
|
(Dollars in millions)
|
|
Net revenues
|
|
|
25
|
%
|
|
$
|
270
|
|
|
$
|
320
|
|
|
$
|
440
|
|
Gross margin
|
|
|
25
|
%
|
|
|
26.0
|
%
|
|
|
30.0
|
%
|
|
|
35.0
|
%
|
Cash flow from operations (as a percentage of gross profit)
|
|
|
25
|
%
|
|
|
27.0
|
%
|
|
|
31.0
|
%
|
|
|
34.0
|
%
|
Return on assets
|
|
|
10
|
%
|
|
|
2.0
|
%
|
|
|
3.5
|
%
|
|
|
6.0
|
%
|
Discretionary
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin was defined as gross profits divided by net
revenues. Cash flow from operations was calculated by dividing
cash flow from operations by gross profits. Return on assets was
defined as net income divided by average total assets during the
fiscal year.
After the end of fiscal 2011, the Committee exercised discretion
in determining the amount of the cash performance compensation
awarded to Dr. Zommer and Mr. Sasson for the year. In
reviewing performance in comparison to the quantitative
objectives, the Committee concluded that the net revenues and
gross margin targets had been exceeded, but that the maximum
measurement levels had not been achieved. The Committee
concluded that the objective for cash flow from operations had
been achieved at the threshold level, although it expressed
26
concern regarding the validity of the chosen metric in a year
when revenues increased by 49%. In contrast, the return on
assets objective was exceeded at the maximum measurement level.
For the discretionary objective, the Committee considered items
such as the development of bench strength, overall management of
the organization, integration of acquisitions, research and
development and new products, inventory control and five-year
stock price performance. For each executive, the Committee then
went through the process of multiplying the weight for each
objective against the target and maximum potential awards
payable to the executive, interpolating the quantitative
performance achieved for an objective between the nearest
measurement levels and calculating an amount for the objective
based on the interpolation. In this context, the Committee
regarded the discretionary performance as two-thirds of the
distance towards the maximum level from target. The Committee
used the calculated amount as a reference point for determining
an amount to credit the executive with respect to the objective.
In each case, the credited amount equaled or exceeded the
calculated amount. Credited amounts were added to determine the
award. Ultimately, through its quantitative and qualitative
assessments, the Committee concluded that the executives
performance well exceeded target expectations and awarded
Dr. Zommer $610,000, which represented 140% of his target
award, and Mr. Sasson $380,000, which constituted 143% of
his target award.
Other
Cash Bonuses
The Compensation Committee did not award any other cash bonuses
to executive officers in fiscal 2012.
Equity
In fiscal 2011, consistent with practice, the Board granted an
option for 20,000 shares to Dr. Zommer on the same
terms as the options granted to nonemployee directors. The
Committee granted Mr. Sasson an option for
80,000 shares and Mr. Jones an option for
20,000 shares. The size of the grants to Mr. Sasson
and Mr. Jones reflected past individual and company
performance and expected future contribution.
Tax
and Accounting Implications
Section 162(m) of the Code places a limit of $1,000,000 on
the amount of compensation that we may deduct from our taxes in
a year with respect to our executive officers.
Section 162(m) limits the types of compensation that are
deductible resulting in some compensation that does not qualify
as tax deductible. While the Committee is mindful of the benefit
to our company performance of full deductibility of
compensation, we believe the Committee must not be constrained
by the requirements of Section 162(m) where those
requirements would impair flexibility in compensating our
executive officers in a manner that can best promote our
corporate objectives. Therefore, the Committee has not adopted a
policy that requires that all compensation be deductible. The
Committee intends to continue to compensate our executive
officers in a manner consistent with the best interests of our
company and the stockholders.
We adopted SFAS No. 123(R), effective April 1,
2007. SFAS No. 123(R) establishes
accounting for stock-based awards exchanged for employee
services. Accordingly, stock-based compensation cost is measured
at grant date, based on the fair value of the awards, and is
recognized as an expense over the requisite employee service
period. We use the Black-Scholes pricing model to estimate the
fair value of each award.
Compensation
and Risk
Our Compensation Committee has discussed the concept of risk as
it relates to our compensation of employees, reviewed the
employee compensation used in our company and the Compensation
Committee does not believe our employee compensation encourages
excessive or inappropriate risk taking for the following reasons:
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|
|
|
Our use of different types of compensation methods provides a
balance of long and short-term incentives with fixed and
variable components.
|
|
|
|
We grant equity-based awards with time based vesting, which
encourages participants to look to long-term appreciation in
equity values.
|
|
|
|
The objectives used to determine the amount of an executive
officers cash performance award address overall
performance, which we believe promotes long-term value. In
addition, an executives cash
|
27
|
|
|
|
|
performance award cannot exceed 1.75 times the target amount, no
matter how much financial performance exceeds the objectives
established at the beginning of the year.
|
|
|
|
|
|
For our executive officers, our Compensation Committee retains
discretion to modify or to eliminate performance compensation
that would otherwise be payable based on actual financial
performance.
|
|
|
|
Our system of internal control over financial reporting, Code of
Ethics, and whistle-blower program, among other things, reduce
the likelihood of manipulation of our financial performance to
enhance incentive payments.
|
Summary
Compensation Table
The following table shows for the fiscal year ended
March 31, 2011, compensation awarded to or paid to, or
earned by, our Chief Executive Officer, our Chief Financial
Officer and a former executive officer, together referred to as
our Named Executive Officers, at March 31, 2011.
Summary
Compensation Table
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
Incentive Plan
|
|
All Other
|
|
|
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Compensation
|
|
Compensation
|
|
|
Name and Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)(1)
|
|
($)
|
|
($)
|
|
Total ($)
|
|
Nathan Zommer
|
|
|
2011
|
|
|
|
574,155
|
|
|
|
208,119
|
(2)
|
|
|
91,469
|
(3)
|
|
|
401,881
|
|
|
|
42,707
|
(4)
|
|
|
1,318,331
|
|
Chairman of the Board and
|
|
|
2010
|
|
|
|
509,400
|
|
|
|
330,000
|
|
|
|
|
|
|
|
|
|
|
|
48,723
|
|
|
|
888,123
|
|
Chief Executive Officer
|
|
|
2009
|
|
|
|
544,231
|
|
|
|
89,000
|
|
|
|
779,044
|
|
|
|
11,000
|
|
|
|
16,138
|
|
|
|
1,439,413
|
|
Uzi Sasson
|
|
|
2011
|
|
|
|
361,619
|
(5)
|
|
|
135,176
|
(2)
|
|
|
373,765
|
|
|
|
244,824
|
|
|
|
17,931
|
(6)
|
|
|
1,133,315
|
|
President, Chief Operating
|
|
|
2010
|
|
|
|
308,423
|
|
|
|
165,000
|
|
|
|
|
|
|
|
|
|
|
|
17,797
|
|
|
|
491,220
|
|
Officer and Chief Financial Officer
|
|
|
2009
|
|
|
|
330,000
|
|
|
|
45,000
|
|
|
|
1,031,861
|
|
|
|
5,000
|
|
|
|
12,483
|
|
|
|
1,424,344
|
|
James R. Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President and General Counsel(7)
|
|
|
2011
|
|
|
|
398,729
|
(8)
|
|
|
|
|
|
|
93,441
|
|
|
|
|
|
|
|
5,930
|
(9)
|
|
|
498,100
|
|
|
|
|
(1) |
|
Note 10 of the Notes to Consolidated Financial Statements
set forth in our Annual Report on
Form 10-K
for the year ended March 31, 2011 discloses the assumptions
made in valuing the rights. |
|
(2) |
|
Consists of the sums awarded under the cash performance
compensation program for the discretionary objective and for
discretionary increases associated with other objectives. |
|
(3) |
|
Constitutes compensation for being a director. |
|
(4) |
|
Includes car expense of $18,445, estate planning charges of
$13,033, $7,350 in contributions by our company matching certain
of Dr. Zommers 401(k) plan contributions and other
compensation payments aggregating to $3,879. Other compensation
payments include payments in the nature of medical health
checkup and bill paying and bookkeeping services. For fiscal
2011, bill paying and bookkeeping services were valued based on
an estimate of the hours involved and the hourly rate of the
person providing the services. |
|
(5) |
|
Includes vacation cash-out of $13,654. |
|
(6) |
|
Represents car expense. |
|
(7) |
|
Mr. Jones ceased being an executive officer in June 2011,
but remains an employee of our company. |
|
(8) |
|
Consists of a salary of $37,278 and payments for hours worked. |
|
(9) |
|
Represents our companys contributions matching certain of
Mr. Joness 401(k) plan contributions. |
We provide or reimburse for car expense for Dr. Zommer and
Mr. Sasson, including associated expenses such as
insurance, registration, maintenance and gasoline. Our
directors, including Dr. Zommer, are reimbursed for their
estate planning and tax planning and return preparation
expenses. Because Dr. Zommer spends significant time
traveling to our worldwide locations and customers, we provide
bill paying and bookkeeping services to Dr. Zommer.
28
Employment
Agreements
Dr. Zommer and Mr. Sasson are the only executive
officers who have employment agreements. Each agreement was
executed in July 2009, effective as of August 1, 2009, and
terminates July 31, 2012.
Dr. Zommers agreement provides that he will be paid
an annual base salary of at least $566,000 and that he will be
considered for an annual performance bonus, as determined by the
Board in its discretion. He is currently receiving an annual
base salary of $580,000. He is to receive the benefits made
available to senior executives generally, as well as the
following specifically described in his agreement: an annual
medical exam; term insurance in the amount of $1,000,000 on his
life, payable to his designee; the services of a personal tax or
investment advisor, in an amount not to exceed $2,000 per year;
the use of a car, of make and model determined by
Dr. Zommer and the Board, including maintenance, gas and
insurance; 10 hours per month of bill paying and
bookkeeping services; and annual vacation in an amount equal to
15 days plus one-half day for each full year of service
after June 1, 2003. Additionally, Dr. Zommer is
entitled to the payments and benefits described in
Potential Payments upon Termination or Change in
Control, upon the events described there. During fiscal
2007, Dr. Zommer caused the term life insurance provided
pursuant to his agreement to be cancelled.
Mr. Sassons agreement provides that he will be paid
an annual base salary of at least $330,000 and that he will be
considered for an annual performance bonus, as determined by the
Board in its discretion. He is currently receiving an annual
base salary of $355,000. He is to receive the benefits made
available to senior executives generally, as well as the
following specifically described in his agreement: an annual
medical exam; term insurance in the amount of $1,000,000 on his
life, payable to his designee; the services of a personal tax or
investment advisor, in an amount not to exceed $2,000 per year;
the use of a car, of make and model determined by
Mr. Sasson and the Board, including maintenance, gas and
insurance; and annual vacation in an amount equal to
15 days. Additionally, Mr. Sasson is entitled to the
payments and benefits described in Potential Payments upon
Termination or Change in Control, upon the events
described there.
Grants of
Plan-Based Awards
The following table provides information regarding all incentive
plan awards that were made to or earned by our Named Executive
Officers during fiscal 2011.
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
All Other Option
|
|
|
|
Grant Date
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
Awards: Number of
|
|
Exercise or
|
|
Fair Value of
|
|
|
|
|
(1)
|
|
Securities
|
|
Base Price of
|
|
Stock and
|
|
|
|
|
Threshold
|
|
Target
|
|
|
|
Underlying
|
|
Option Awards
|
|
Option
|
Name
|
|
Grant Date
|
|
($)
|
|
($)
|
|
Maximum ($)
|
|
Options (#)
|
|
($/Share)
|
|
Awards ($)
|
|
Nathan Zommer
|
|
8/27/10
|
|
|
|
|
|
|
435,000
|
|
|
|
761,250
|
|
|
|
20,000
|
|
|
|
9.37
|
|
|
|
91,469
|
|
Uzi Sasson
|
|
5/21/10
|
|
|
|
|
|
|
265,000
|
|
|
|
463,750
|
|
|
|
80,000
|
|
|
|
8.64
|
|
|
|
373,765
|
|
James R. Jones
|
|
5/21/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
8.64
|
|
|
|
93,441
|
|
|
|
|
(1) |
|
These amounts constitute the target and maximum amounts under
the cash performance compensation program for fiscal 2011, which
were determined during the fiscal year. |
29
Outstanding
Equity Awards at Fiscal 2011 Year End
The following table shows for the fiscal year ended
March 31, 2011, certain information regarding outstanding
equity awards at fiscal year end for the Named Executive
Officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Number of
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
Securities
|
|
|
|
|
|
|
Underlying
|
|
Underlying
|
|
|
|
|
|
|
Unexercised
|
|
Unexercised
|
|
Option
|
|
|
|
|
Options
|
|
Options
|
|
Exercise
|
|
Option
|
|
|
(#)
|
|
(#)
|
|
Price
|
|
Expiration
|
Name
|
|
Exercisable
|
|
Unexercisable
|
|
($)
|
|
Date
|
|
Nathan Zommer
|
|
|
160,000
|
|
|
|
|
|
|
|
7.26
|
|
|
|
11/16/11
|
|
|
|
|
280,000
|
|
|
|
|
|
|
|
7.79
|
|
|
|
11/15/12
|
|
|
|
|
150,000
|
|
|
|
|
|
|
|
10.63
|
|
|
|
02/20/14
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
15.81
|
|
|
|
06/02/15
|
|
|
|
|
150,000
|
|
|
|
50,000
|
(1)
|
|
|
10.30
|
|
|
|
06/07/17
|
|
|
|
|
85,000
|
|
|
|
85,000
|
(2)
|
|
|
12.65
|
|
|
|
09/05/18
|
|
|
|
|
11,666
|
|
|
|
8,334
|
(3)
|
|
|
9.37
|
|
|
|
08/27/20
|
|
Uzi Sasson
|
|
|
30,000
|
|
|
|
|
|
|
|
6.65
|
|
|
|
08/20/14
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
9.15
|
|
|
|
11/23/14
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
14.37
|
|
|
|
06/02/15
|
|
|
|
|
15,000
|
|
|
|
5,000
|
(4)
|
|
|
9.35
|
|
|
|
05/31/17
|
|
|
|
|
90,000
|
|
|
|
30,000
|
(5)
|
|
|
9.36
|
|
|
|
06/07/17
|
|
|
|
|
60,000
|
|
|
|
60,000
|
(6)
|
|
|
11.50
|
|
|
|
09/05/18
|
|
|
|
|
75,000
|
|
|
|
75,000
|
(7)
|
|
|
6.53
|
|
|
|
11/13/18
|
|
|
|
|
|
|
|
|
80,000
|
(8)
|
|
|
8.64
|
|
|
|
05/21/20
|
|
James R. Jones
|
|
|
10,000
|
|
|
|
|
|
|
|
5.83
|
|
|
|
01/31/13
|
|
|
|
|
10,400
|
|
|
|
|
|
|
|
14.37
|
|
|
|
06/02/15
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
8.98
|
|
|
|
08/24/16
|
|
|
|
|
6,000
|
|
|
|
2,000
|
(9)
|
|
|
9.35
|
|
|
|
05/31/17
|
|
|
|
|
20,000
|
|
|
|
20,000
|
(10)
|
|
|
6.53
|
|
|
|
11/13/18
|
|
|
|
|
|
|
|
|
20,000
|
(11)
|
|
|
8.64
|
|
|
|
05/21/20
|
|
|
|
|
(1) |
|
50,000 shares vest on each anniversary of June 7. |
|
(2) |
|
42,500 shares vest on each anniversary of September 5. |
|
(3) |
|
1,667 shares vest each month from August 27, 2010. |
|
(4) |
|
5,000 shares vest on each anniversary of May 31. |
|
(5) |
|
30,000 shares vest on each anniversary of June 7. |
|
(6) |
|
30,000 shares vest on each anniversary of September 5. |
|
(7) |
|
37,500 shares vest on each anniversary of
November 13.
|
|
(8) |
|
20,000 shares vest on each anniversary of May 21. |
|
(9) |
|
2,000 shares vest on each anniversary of May 31. |
|
(10) |
|
10,000 shares vest on each anniversary of November 13. |
|
(11) |
|
5,000 shares vest on each anniversary of May 21. |
30
Option
Exercises and Stock Vested in Fiscal Year 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of Shares
|
|
|
|
Number of Shares
|
|
|
|
|
Acquired on
|
|
|
|
Acquired on
|
|
Value Realized
|
|
|
Exercise
|
|
Value Realized
|
|
Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
on Exercise ($)
|
|
(#)
|
|
($)
|
|
Nathan Zommer
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
115,000
|
|
Uzi Sasson
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
111,350
|
|
James R. Jones
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential
Payments upon Termination or Change in Control
Dr. Zommer
Dr. Zommers employment agreement provides for certain
payments and benefits in connection with termination of his
employment or a change in control. In the event he is terminated
without cause he is entitled to a single payment equal to one
years salary. If he becomes disabled for three months in a
six month period, his salary will continue to be paid, along
with benefits, by us for a period of one year, after which his
employment shall terminate. If his employment terminates, either
without cause or for good reason, within one year of a change in
control, he is entitled to a single payment from us equal to
three times his average annual cash compensation over the last
three years. Additionally, upon such event, he is entitled to a
continuation of his benefits from us, both as provided to
employees generally and as specifically described in his
employment agreement, for a period of 18 months, as well as
the immediate vesting of all unvested stock options.
Under his employment agreement, cause means conviction of any
felony or any crime involving moral turpitude or dishonesty;
participation in a fraud or act of dishonesty against our
company; willful breach of our policies; intentional damage to
our property; or breach of the employment agreement or any other
agreement with us. Change in control means any reorganization,
consolidation or merger in which we are not the surviving
corporation or where our voting stock would be converted into
cash, securities or other property, other than a merger where
our stockholders have the same proportionate ownership of voting
stock after the merger; the sale, exchange or other transfer to
an unaffiliated third party of at least a majority of our voting
stock; or the sale, lease, exchange or other transfer of all, or
substantially all, of our assets. Good reason means reduction of
his rate of salary compensation as in effect immediately prior
to the change in control by more than five percent; failure to
provide a package of welfare benefit plans that, taken as a
whole, provide substantially similar benefits to those in which
he is entitled to participate immediately prior to the change of
control, except that employee contributions may be raised to the
extent of any cost increases imposed by third parties, or any
action by us that would adversely affect his participation or
reduce his benefits under any of such plans; change in his
responsibilities, authority, titles or offices resulting in
diminution of position, excluding insubstantial, inadvertent
actions and noting that the fact the company is no longer public
or the ultimate parent is not such a diminution; request that
Dr. Zommer relocate to a worksite that is more than
35 miles from his prior worksite; material reduction in
duties; failure or refusal of the successor company to assume
our obligations under his employment agreement; or material
breach by us or any successor company of any of the material
provisions of his employment agreement.
31
The following table sets forth estimates of the value of the
payments and the benefits that would have been receivable by
Dr. Zommer under his employment agreement in connection
with termination or a change in control as of March 31,
2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
without Cause
|
|
|
|
|
|
|
|
|
or For Good
|
|
|
Involuntary
|
|
|
|
|
|
Reason within
|
|
|
Termination
|
|
Involuntary
|
|
|
|
One Year
|
Executive Benefits and
|
|
Without
|
|
Termination
|
|
|
|
after Change
|
Payments upon Termination
|
|
Cause
|
|
For Cause
|
|
Disability
|
|
in Control
|
or Change in Control
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Cash payment
|
|
|
580,000
|
(1)
|
|
|
|
|
|
|
580,000
|
(1)
|
|
|
2,667,786
|
(2)
|
Vesting of option awards(3)
|
|
|
|
|
|
|
|
|
|
|
223,486
|
|
|
|
256,636
|
|
401(k) match(4)
|
|
|
|
|
|
|
|
|
|
|
7,350
|
|
|
|
11,025
|
|
Car expense(4)
|
|
|
|
|
|
|
|
|
|
|
18,445
|
|
|
|
27,668
|
|
Health insurance(4)
|
|
|
|
|
|
|
|
|
|
|
18,187
|
|
|
|
27,281
|
|
Other benefits(4)(5)
|
|
|
|
|
|
|
|
|
|
|
7,348
|
|
|
|
11,022
|
|
Total
|
|
|
580,000
|
|
|
|
|
|
|
|
854,816
|
|
|
|
3,001,418
|
|
|
|
|
(1) |
|
Based on the salary rate in effect at March 31, 2011. |
|
(2) |
|
Based on the cash compensation paid during the three fiscal
years ended March 31, 2011. |
|
(3) |
|
Represents the fair market value of stock awards that would
become vested due to termination, based on closing price of a
share of our common stock on March 31, 2011, which was
$13.43. For disability, assumes one year of vesting. |
|
(4) |
|
Assumes one year of benefits for disability and eighteen months
of benefits for termination after change in control. Benefits
are estimated using fiscal 2011 data. |
|
(5) |
|
Consists of dental insurance, group life insurance, tax or
investment advisor reimbursement (estimated at $2,000 per year),
annual medical exam reimbursement (estimated at $1,000 per
year), and bill paying and bookkeeping services. |
Mr. Sasson
Mr. Sassons employment agreement provides for certain
payments and benefits in connection with termination of his
employment or a change in control. In the event he is terminated
without cause, he is entitled to a single payment equal to one
months salary for each year of service, but not less than
six months nor more than twelve months of salary. If he becomes
disabled for three months in a six month period, his salary will
continue to be paid, along with benefits, by us for a period of
one year, after which his employment shall terminate. If his
employment terminates, either without cause or for good reason,
within one year of a change in control, he is entitled to a
single payment from us equal to two times his average annual
cash compensation over the last three years. Additionally, upon
such event, he is entitled to a continuation of his benefits
from us, both as provided to employees generally and as
specifically described in his employment agreement, for a period
of 18 months, as well as the immediate vesting of all
unvested stock options. Cause, change in control and good reason
have definitions identical to those in Dr. Zommers
agreement.
32
The following table sets forth estimates of the value of the
payments and the benefits that would have been receivable by
Mr. Sasson under his employment agreement in connection
with termination or a change in control as of March 31,
2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
|
|
|
|
|
|
without Cause
|
|
|
Involuntary
|
|
|
|
|
|
or For Good
|
|
|
Termination
|
|
Involuntary
|
|
|
|
Reason within
|
Executive Benefits and
|
|
Without
|
|
Termination
|
|
|
|
One Year after Change
|
Payments upon Termination
|
|
Cause
|
|
For Cause
|
|
Disability
|
|
in Control
|
or Change in Control
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Cash payment
|
|
|
177,500
|
(1)
|
|
|
|
|
|
|
355,000
|
(1)
|
|
|
1,063,361
|
(2)
|
Vesting of option awards(3)
|
|
|
|
|
|
|
|
|
|
|
554,950
|
|
|
|
1,159,000
|
|
401(k) match(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Car expense(4)
|
|
|
|
|
|
|
|
|
|
|
8,447
|
|
|
|
12,671
|
|
Health insurance(4)
|
|
|
|
|
|
|
|
|
|
|
18,373
|
|
|
|
27,560
|
|
Other benefits (4)(5)
|
|
|
|
|
|
|
|
|
|
|
6,223
|
|
|
|
9,335
|
|
Total
|
|
|
177,500
|
|
|
|
|
|
|
|
942,993
|
|
|
|
2,271,927
|
|
|
|
|
(1) |
|
Based on the salary rate in effect at March 31, 2011. |
|
(2) |
|
Based on the cash compensation paid during the three fiscal
years ended March 31, 2011. |
|
(3) |
|
Represents the fair market value of stock awards that would
become vested due to termination or the value of the spread on
options that would become exercisable due to termination, based
on closing price of a share of our common stock on
March 31, 2011, which was $13.43. For disability, assumes
one year of vesting. |
|
(4) |
|
Assumes one year of benefits for disability and eighteen months
of benefits for termination after change in control. Benefits
are estimated using fiscal 2011 data. |
|
(5) |
|
Consists of dental insurance, group life insurance, tax or
investment advisor reimbursement (estimated at $2,000 per year)
and annual medical exam reimbursement (estimated at $1,000 per
year). |
Director Compensation
The following table shows for the fiscal year ended
March 31, 2011 certain information with respect to the
compensation of all of our non-employee directors:
Director
Compensation for Fiscal 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
Fees Earned or
|
|
Option Awards
|
|
Compensation
|
|
Total
|
Name(1)
|
|
Paid in Cash ($)
|
|
($)(2)(3)
|
|
($)(4)
|
|
($)
|
|
Donald Feucht
|
|
|
66,000
|
|
|
|
91,469
|
|
|
|
2,354
|
|
|
|
159,823
|
|
Samuel Kory
|
|
|
59,000
|
|
|
|
91,469
|
|
|
|
895
|
|
|
|
151,364
|
|
S. Joon Lee
|
|
|
40,000
|
|
|
|
91,469
|
|
|
|
2,660
|
|
|
|
134,129
|
|
Timothy Richardson
|
|
|
54,000
|
|
|
|
91,469
|
|
|
|
|
|
|
|
145,469
|
|
James Thorburn
|
|
|
49,000
|
|
|
|
91,469
|
|
|
|
2,400
|
|
|
|
142,869
|
|
|
|
|
(1) |
|
Kenneth Wong became a director in June 2011, after the end of
fiscal 2011. |
|
(2) |
|
These amounts reflect the value determined by us 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 is based on the grant date fair value
calculated in accordance with the amount recognized for
financial statement reporting purposes. Pursuant to SEC rules,
the amounts shown exclude the impact of estimated forfeitures
related to service-based vesting conditions. Amounts reported
for stock options are determined using the Black-Scholes option
pricing model. See Note 10, to our audited financial
statements for the fiscal year ended March 31, 2011,
included in our Annual Report on
Form 10-K,
for a further discussion of the relevant valuation assumptions
used in calculating grant date fair value. |
33
|
|
|
(3) |
|
Each non-employee director listed in the table above was granted
a stock option for 20,000 shares of our common stock on
August 27, 2010. Each of these awards had a grant date fair
value of $91,469. The following table sets forth the number of
outstanding option awards at March 31, 2011: |
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
Underlying Unexercised
|
|
Name
|
|
Options
|
|
|
Donald Feucht
|
|
|
141,250
|
|
Samuel Kory
|
|
|
141,250
|
|
S. Joon Lee
|
|
|
141,250
|
|
Timothy Richardson
|
|
|
110,000
|
|
James Thorburn
|
|
|
100,000
|
|
|
|
|
(4) |
|
All other compensation represents reimbursements for expenses
incurred in preparing the directors personal income tax
returns. |
Each of the non-employee directors currently receives an annual
retainer of $40,000. Additionally, each non-employee director is
also paid a retainer for each additional committee of the Board
on which he serves. The Chairs of the standing committees of the
Board are paid retainers as follows: Chair of the Audit
Committee, $15,000; Chair of the Compensation Committee,
$10,000; and Chair of the Nominating and Corporate Governance
Committee, $6,000. Other members of the standing committees are
paid retainers as follows: Audit Committee member, $7,000;
Compensation Committee member, $5,000; and Nominating and
Corporate Governance Committee member, $2,000. Additionally,
each director is reimbursed for expenses incurred in preparing
their personal income tax returns and estate planning matters.
Meeting attendance fees are not paid.
The plan provides for the grant of options to non-employee
directors pursuant to a discretionary grant mechanism
administered by the Board. Under current practice, each director
receives an option to acquire 30,000 shares upon becoming a
member of the Board, which vests in equal annual installments
over four years, and an option to acquire 20,000 shares
annually, which vests in monthly installments over one year. All
non-employee director options will vest in full in connection
with a change in control of our company. Each option has an
exercise price equal to the fair market value of such common
stock on the date of grant, based on the closing sales price
reported on the Nasdaq Global Select Market for the date of
grant.
TRANSACTIONS
WITH RELATED PERSONS
Related
Person Transactions Policy and
Procedures
Section 4 of our Code of Ethics sets forth our policy
regarding disclosure by an employee or director of a conflict of
interest. A related party transaction would be a conflict of
interest. Under Section 4 of our Code of Ethics, executive
officers and directors are to disclose conflicts of interest to
the Audit Committee. When transactions that fall within the
coverage of Item 404(a) of
Regulation S-K
promulgated under the Securities Exchange Act of 1934 are
identified, they are submitted to the Audit Committee for
review, approval or ratification, excepting indemnity
agreements, the form of which was previously approved by the
stockholders. Evidence of the policy is set forth in
Section 4 of our Code of Ethics and the charter of the
Audit Committee. The Audit Committee considers transactions on a
case-by-case
basis in light of the applicable facts and circumstances, and
has not developed specific standards for such review, approval
or consideration. Review, approval or ratification is evidenced
in the minutes of the Audit Committee. The policies and
procedures are not otherwise set forth in writing.
Related
Person Transactions
We have entered into indemnity agreements with our executive
officers and directors containing provisions that may require
us, among other things, to indemnify them against certain
liabilities that may arise by reason of their status or services
as officers or directors.
34
HOUSEHOLDING
OF PROXY MATERIALS
The SEC has adopted rules that permit companies and
intermediaries (e.g., brokers) to satisfy the delivery
requirements for proxy statements and annual reports with
respect to two or more stockholders sharing the same address by
delivering a single proxy statement and annual report addressed
to those stockholders. This process, which is commonly referred
to as householding, potentially means extra
convenience for stockholders and cost savings for companies.
This year, a number of brokers with account holders who are our
stockholders will be householding our proxy
materials. A single proxy statement and annual report will be
delivered to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker
that they will be householding communications to
your address, householding will continue until you
are notified otherwise or until you revoke your consent. If, at
any time, you no longer wish to participate in
householding and would prefer to receive a separate
proxy statement and annual report, please notify your broker.
Stockholders who currently receive multiple copies of the proxy
statement at their addresses and would like to request
householding of their communications should contact
their brokers.
OTHER
MATTERS
The Board knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the
persons named in the accompanying proxy to vote on such matters
in accordance with their best judgment.
By Order of the Board of Directors
Uzi Sasson
Secretary
July 29, 2011
Important Notice Regarding the Availability of Proxy
Materials for the Annual Meeting of Stockholders to Be Held on
September 16, 2011.
Copies of the proxy statement and of our annual report for
the fiscal year ended March 31, 2011 are available at
http://www.ixys.com/corporate/AnnualMeetingMaterials.asp.
You may also obtain such copies free of charge by writing to
Uzi Sasson, Secretary, IXYS Corporation, 1590 Buckeye
Drive, Milpitas, CA 95035.
35
EXHIBIT A
IXYS
CORPORATION
2011
EQUITY INCENTIVE PLAN
(Effective
June 2, 2011)
IXYS CORPORATION hereby adopts in its entirety the
IXYS Corporation 2011 Equity Incentive (Plan),
as of June 2, 2011 (Plan Adoption Date).
Unless otherwise defined, terms with initial capital letters are
defined in Section 2 below.
SECTION 1
BACKGROUND
AND PURPOSE
1.1 Background The Plan
permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights (SARs), Restricted Stock, and
Restricted Stock Units.
1.2 Purpose of the Plan The
Plan is intended to attract, motivate and retain the following
individuals: (a) employees of the Company or its
Affiliates; (b) consultants who provide significant
services to the Company or its Affiliates and (c) directors
of the Company or any of its Affiliates who are employees of
neither the Company nor any Affiliate. The Plan is also designed
to encourage stock ownership by such individuals, thereby
aligning their interests with those of the Companys
shareholder.
SECTION 2
DEFINITIONS
The following words and phrases shall have the following
meanings unless a different meaning is plainly required by the
context:
2.1 1934 Act means the
Securities Exchange Act of 1934, as amended. Reference to a
specific section of the Act shall include such section, any
valid rules or regulations promulgated under such section, and
any comparable provisions of any future legislation, rules or
regulations amending, supplementing or superseding any such
section, rule or regulation.
2.2 Administrator means,
collectively the Board,
and/or one
or more Committees,
and/or one
or more executive officers of the Company designated by the
Board to administer the Plan or specific portions thereof;
provided, however, that Awards to Section 16 Persons
may only be administered by a committee of Independent Directors
(as defined in Section 2.23) or the Board as a whole. The
Plan permits coextensive administrative authority; provided,
however, that the scope of any such authority is specifically
approved by the Board in accordance with the Plan.
2.3 Affiliate means any
corporation or any other entity (including, but not limited to,
Subsidiaries, partnerships and joint ventures) controlling,
controlled by, or under common control with the Company.
2.4 Applicable Law means
the legal requirements relating to the administration of
Options, SARs, Restricted Stock, Restricted Stock Units and
similar incentive plans under any applicable laws, including but
not limited to the laws of the United States and any applicable
foreign country, including employment, labor, privacy,
securities, and tax laws, the Code, and applicable rules and
regulations promulgated by the Nasdaq, New York Stock Exchange,
American Stock Exchange or the requirements of any other stock
exchange or quotation system upon which the Shares may then be
listed or quoted.
2.5 Award means,
individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs,
Restricted Stock, and Restricted Stock Units.
2.6 Award Agreement means
the written agreement setting forth the terms and provisions
applicable to each Award granted under the Plan, including the
Grant Date.
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2.7 Board or
Board of Directors means the Board of
Directors of the Company.
2.8 Change in Control means
the occurrence of any of the following:
2.8.1 Any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the
beneficial owner (as defined in
Rule 13d-3
of the Exchange Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the
total voting power represented by the Companys then
outstanding voting capital stock, other than a group of two or
more persons not (A) acting in concert for the purpose of
acquiring, holding or disposing of such stock or
(B) otherwise required to file any form or report with any
governmental agency or regulatory authority having jurisdiction
over the Company which requires the reporting of any change in
control;
2.8.2 The consummation of the sale or disposition by the
Company of all or substantially all of the Companys assets
(whether by stock sale, merger, consolidation or otherwise);
2.8.3 The consummation of a liquidation or dissolution of
the Company; or
2.8.4 The consummation of a merger or consolidation of the
Company with any other corporation, other than (i) a merger
or consolidation for the sole purpose of changing the
Companys jurisdiction of incorporation or (ii) a
consolidation or merger of the Company in which the holders of
the voting capital stock of the Company immediately prior to the
consolidation or merger (other than Persons who are parties to
such consolidation or merger and their respective Affiliates)
hold at least fifty percent (50%) of the voting power
represented by the Companys then outstanding voting
capital stock of the Company or the surviving entity (or its
parent entity) immediately after the consolidation or merger.
2.9 Code means the Internal
Revenue Code of 1986, as amended. Reference to a specific
section of the Code or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding
such section or regulation.
2.10 Committee means any
committee appointed by the Board of Directors to administer the
Plan.
2.11 Company means
IXYS Corporation, or any successor thereto.
2.12 Consultant means any
consultant, independent contractor or other person who provides
significant services to the Company or its Affiliates or any
employee or Affiliate of any of the foregoing, but who is
neither an Employee nor a Director.
2.13 Continuous Status as
an Employee, Consultant or Director means that a
Participants employment or service relationship with the
Company or any Affiliate is not interrupted or terminated.
Continuous Status shall not be considered
interrupted in the following cases: (i) any leave of
absence approved by the Company or (ii) transfers between
locations of the Company or between the Company and any
Subsidiary or 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 leave of
absence may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or
contract. If such reemployment is approved by the Company but
not guaranteed by statute or contract, then such employment will
be considered terminated on the ninety-first (91st) day of such
leave and on such date any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock
Option and shall be treated for tax purposes as a Nonqualified
Stock Option. In the event a Participants status changes
among the positions of Employee, Director and Consultant, the
Participants Continuous Status as an Employee, Director or
Consultant shall be deemed to be continuous and uninterrupted.
2.14 Director means any
individual who is a member of the Board of Directors of the
Company or an Affiliate of the Company.
2.15 Disability means a
permanent and total disability within the meaning of
Section 22(e)(3) of the Code, provided that in the case of
Awards other than Incentive Stock Options, the Administrator in
its discretion may determine whether a permanent and total
disability exists in accordance with uniform and
non-discriminatory standards adopted by the Administrator from
time to time.
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2.16 Employee means any
individual who is a common-law employee of the Company or of an
Affiliate.
2.17 Exercise Price means
the price at which a Share may be purchased by a Participant
pursuant to the exercise of an Option, and the price used to
determine the amount of cash or number of Shares payable to a
Participant upon the exercise of a SAR.
2.18 Fair Market Value
means, as of any date, provided the Common Stock is listed on an
established stock exchange or a national market system,
including without limitation the NASDAQ, the Fair Market Value
of a share of Common Stock shall be the closing sales price for
such stock on the Grant Date of the Award. If no sales were
reported on such Grant Date of the Award, the Fair Market Value
of a share of Common Stock shall be the closing price for such
stock as quoted on the NASDAQ (or the exchange with the greatest
volume of trading in the Common Stock) on the last market
trading day with reported sales prior to the date of
determination. In the case where the Company is not listed on an
established stock exchange or national market system, Fair
Market Value shall be determined by the Board in good faith in
accordance with Code Section 409A and the applicable
Treasury regulations.
2.19 Fiscal Year means a
fiscal year of the Company.
2.20 Full-Value Award
Limitation means an aggregate limit of one
thousand (1,000) Shares, which is the total number of Shares
that may be granted to all Participants combined as full
value awards, which includes both Restricted Stock and
Restricted Stock Units.
2.21 Grant Date means the
date the Administrator approves the Award.
2.22 Incentive Stock Option
means an Option to purchase Shares, which is designated as an
Incentive Stock Option and is intended to meet the requirements
of Section 422 of the Code.
2.23 Independent Director
means a Nonemployee Director who is (i) a nonemployee
director within the meaning of
Section 16b-3
of the 1934 Act and (ii) independent as
determined under the applicable rules of the NASDAQ, as either
of these definitions may be modified or supplemented from time
to time.
2.24 Misconduct shall
include commission of any act in competition with any activity
of the Company (or any Affiliate) or any act contrary or harmful
to the interests of the Company (or any Affiliate) as determined
in good faith by the Administrator and shall include, without
limitation: (a) conviction of a felony or crime involving
moral turpitude or dishonesty, (b) violation of Company (or
any Affiliate) policies, with or acting against the interests of
the Company (or any Affiliate), including employing or
recruiting any present, former or future employee of the Company
(or any Affiliate), (c) misuse of any confidential, secret,
privileged or non-public information relating to the
Companys (or any Affiliates) business, or
(d) participating in a hostile takeover attempt of the
Company or an Affiliate. The foregoing definition shall not be
deemed to be inclusive of all acts or omissions that the Company
(or any Affiliate) may consider as Misconduct for purposes of
the Plan.
2.25 NASDAQ means The
NASDAQ Stock Market, LLC.
2.26 Nonemployee Director
means a Director who is not employed by the Company or an
Affiliate.
2.27 Nonqualified Stock
Option means an option to purchase Shares that is
not intended to be an Incentive Stock Option.
2.28 Option means an
Incentive Stock Option or a Nonqualified Stock Option.
2.29 Participant means an
Employee, Consultant or Nonemployee Director who has an
outstanding Award.
2.30 Performance Goals
means the goal(s) (or combined goal(s)) determined by the
Administrator (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the
Administrator, the Performance Goals applicable to an Award may
provide for a targeted level or levels of achievement, including
without limitation goals tied to individual objectives
and/or the
Companys (or a business units) return on assets,
return on shareholders equity, efficiency ratio, earnings
per share, net
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income, or other financial measures determined in accordance
with U.S. generally accepted accounting principles
(GAAP), with or without adjustments determined by
the Administrator. The foregoing definition shall not be deemed
to be inclusive of all Performance Goals for purposes of this
Plan. The Performance Goals may differ from Participant to
Participant and from Award to Award.
2.31 Restricted Stock Units
means an Award granted to a Participant pursuant to
Section 8 of the Plan that entitles the Participant to
receive a prescribed number of Shares, or the equivalent value
in cash, upon achievement of Performance Goals associated with
such Award. The Participants Award Agreement shall specify
whether the Restricted Stock Units will be settled in Shares or
cash.
2.32 Period of Restriction
means the period during which Shares of Restricted Stock are
subject to restrictions that subject the Shares to a substantial
risk of forfeiture. As provided in Section 7, such
restrictions may be based on the passage of time in which case
the restrictions may lapse over the Period of Restriction, the
achievement of Performance Goals, or the occurrence of other
events as determined by the Administrator, in its discretion.
2.33 Plan means this
IXYS Corporation 2011 Equity Incentive Plan, as set forth
in this instrument and as hereafter amended from time to time.
2.34 Restricted Stock means
an Award granted to a Participant pursuant to Section 7. An
Award of Restricted Stock constitutes a transfer of ownership of
Shares to a Participant from the Company subject to restrictions
against transferability, assignment, and hypothecation. Under
the terms of the Award, the restrictions against transferability
are removed when the Participant has met the specified vesting
requirement. Vesting can be based on continued employment or
service over a stated service period, or on the attainment of
specified Performance Goals. If employment or service is
terminated prior to vesting, the unvested restricted stock
reverts back to the Company.
2.35 Rule 16b-3
means the rule so designated promulgated under Section 16
of the 1934 Act, and any future rule or regulation
amending, supplementing or superseding such rule.
2.36 SEC means the
U.S. Securities Exchange Commission.
2.37 Section 16 Person
means a person who, with respect to the Shares, is subject to
Section 16 of the 1934 Act.
2.38 Shares means shares of
common stock of the Company.
2.39 Stock Appreciation
Right or SAR means an
Award granted to a Participant pursuant to Section 6. Upon
exercise, a SAR gives a Participant a right to receive a payment
in cash, or the equivalent value in Shares, equal to the
difference between the Fair Market Value of the Shares on the
exercise date and the Exercise Price. Both the number of SARs
and the Exercise Price are determined on the Grant Date. For
example, assume a Participant is granted 100 SARs at an Exercise
Price of $10 and the award agreement specifies that the SARs
will be settled in Shares. Also assume that the SARs are
exercised when the underlying Shares have a Fair Market Value of
$20 per Share. Upon exercise of the SAR, the Participant is
entitled to receive 50 Shares [(($20-$10)*100)/$20].
2.40 Subsidiary means any
corporation, LLC or partnership (collectively referred to as
Entities) in an unbroken chain of Entities beginning
with the Company if each of the Entities other than the last
Entity in the unbroken chain then owns fifty percent (50%) or
more of the total combined voting power in one of the other
Entities in such chain.
SECTION 3
ADMINISTRATION
3.1 The Administrator. The
Administrator, if not the Board of Directors, shall be appointed
by the Board of Directors from time to time. Grants of authority
in a committee charter shall be deemed appointment.
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3.2 Authority of the
Administrator. It shall be the duty of the
Administrator to administer the Plan in accordance with the
Plans provisions and in accordance with Applicable Law.
The Administrator, if the Board of Directors or a Committee,
shall have all powers and discretion necessary or appropriate to
administer the Plan and to control its operation, including, but
not limited to, the following: (a) which Employees,
Consultants and Directors shall be granted Awards; (b) the
terms and conditions of the Awards at initial grant and any
subsequent revisions or changes to the terms and conditions of
Awards, including, but not limited to, changes to, or removal of
restrictions on, outstanding Awards relating to vesting, Period
of Restriction or exercisability periods,
(c) interpretation of the Plan, (d) adoption of rules
for the administration, interpretation and application of the
Plan as are consistent therewith and (e) interpretation,
amendment or revocation of any such rules.
3.3 Decisions Binding. All
determinations and decisions made by the Administrator shall be
final, conclusive and binding on all persons, and shall be given
the maximum deference permitted by Applicable Law.
SECTION 4
SHARES SUBJECT
TO THE PLAN
4.1 Number of
Shares. Subject to adjustment, as provided in
Section 4.3, the total number of Shares initially available
for grant under the Plan shall be six hundred thousand
(600,000). Shares granted under the Plan may be authorized but
unissued Shares or reacquired Shares bought on the market or
otherwise. Awards settled in cash shall not count against the
limitation set forth in this Section 4.1.
4.2 Reversion of Shares to the
Plan. If any Award made under the Plan
expires, or is forfeited or cancelled, the Shares underlying
such Awards shall become available for future Awards under the
Plan.
4.3 Adjustments in Awards and Authorized
Shares. The number of Shares covered by the
Plan, each outstanding Award, and the per Share exercise price
of each such Award, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of common
stock resulting from a stock split, reverse stock split,
recapitalization, spin-off, combination, reclassification, the
payment of a stock dividend on the common stock or any other
increase or decrease in the number of such Shares of common
stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities
of the Company shall not be deemed to have been effected
without receipt of consideration. Such adjustment shall be
made by the Administrator whose determination in that respect
shall be final, binding and conclusive. Except as expressly
provided herein, no issue by the Company of Shares of stock of
any class, or securities convertible into Shares of stock of any
class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of common
stock subject to an Option.
4.4 Legal Compliance. Shares
shall not be issued pursuant to the making or exercise of an
Award unless the exercise of Options and rights and the issuance
and delivery of Shares shall comply with the Securities Act of
1933, as amended, the 1934 Act and other Applicable Law,
and shall be further subject to the approval of counsel for the
Company with respect to such compliance. Any Award made in
violation hereof shall be null and void.
4.5 Investment
Representations. As a condition to the
exercise of an Option or other right, the Company may require
the person exercising such Option or right to represent and
warrant at the time of exercise that the Shares are being
acquired only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel
for the Company, such a representation is required.
SECTION 5
STOCK OPTIONS
The provisions of this Section 5 are applicable to Options
granted to Employees, Consultants and Nonemployee Directors.
Such Participants shall also be eligible to receive other types
of Awards as set forth in the Plan.
5.1 Grant of
Options. Subject to the terms and provisions
of the Plan, Options may be granted at any time and from time to
time as determined by the Administrator in its discretion. The
Administrator may grant Incentive
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Stock Options, Nonqualified Stock Options, or a combination
thereof, and the Administrator, in its discretion and subject to
Sections 4.1, shall determine the number of Shares subject
to each Option.
5.2 Award Agreement. Each
Option shall be evidenced by an Award Agreement that shall
specify the Exercise Price, the expiration date of the Option,
the number of Shares to which the Option pertains, any
conditions to exercise the Option, and such other terms and
conditions as the Administrator, in its discretion, shall
determine. The Award Agreement shall also specify whether the
Option is intended to be an Incentive Stock Option or a
Nonqualified Stock Option.
5.3 Exercise Price. The
Administrator shall determine the Exercise Price for each Option
subject to the provisions of this Section 5.3.
5.3.1 Nonqualified Stock
Options. In the case of a Nonqualified Stock
Option, the per Share exercise price shall not be less than one
hundred percent (100%) of the Fair Market Value of a Share on
the Grant Date, as determined by the Administrator.
5.3.2 Incentive Stock
Options. The grant of Incentive Stock Options
shall be subject to the following limitations:
(a) The Exercise Price of an Incentive Stock Option shall
be not less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date; provided, however, that if
on the Grant Date, the Employee (together with persons whose
stock ownership is attributed to the Employee pursuant to
Section 424(d) of the Code) owns stock possessing more than
10% of the total combined voting power of all classes of stock
of the Company or any of its Subsidiaries, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the
Fair Market Value of a Share on the Grant Date;
(b) Incentive Stock Options may be granted only to persons
who are, as of the Grant Date, Employees of the Company or a
Subsidiary, and may not be granted to Consultants or Nonemployee
Directors.
(c) To the extent that the aggregate Fair Market Value of
the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any
calendar year (under all plans of the Company and any parent or
Subsidiary) exceeds $100,000, the Options to acquire Shares in
excess of such amount shall be treated as Nonqualified Stock
Options. For purposes of this Section 5.3.2(c), Incentive
Stock Options shall be taken into account in the order in which
they were granted. For purposes of this limitation, the Fair
Market Value of the Shares shall be determined as of the time
the Option with respect to such Shares is granted; and
(d) In the event of a Participants change of status
from Employee to Consultant or Nonemployee Director, an
Incentive Stock Option held by the Participant shall cease to be
treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonqualified Stock Option three
(3) months and one (1) day following such change of
status.
5.3.3 Substitute
Options. Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or
an Affiliate consummates a transaction described in
Section 424(a) of the Code (e.g., the acquisition of
property or stock from an unrelated corporation), persons who
become Employees, Directors or Consultants on account of such
transaction may be granted Options in substitution for options
granted by their former employer, and such Options may be
granted with an Exercise Price less than the Fair Market Value
of a Share on the Grant Date; provided, however, the grant of
such substitute Option shall not constitute a
modification as defined in Code
Section 424(h)(3) and the applicable Treasury regulations.
5.4 Exercise of
Options. Options granted under the Plan shall
be exercisable at such times and be subject to such restrictions
as set forth in the Award Agreement and conditions as the
Administrator shall determine in its discretion. Except as set
forth in Section 9.1, in all cases involving termination of
Continuous Status as an Employee, Director or Consultant
(including, but not limited to, the reasons described in
subsections (c), (d), (e) and (f) of
Section 5.5.1), such Option shall be exercisable only to
the extent the Participant was entitled to exercise it at the
date of such termination.
5.5 Expiration of Options
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5.5.1 Expiration
Dates. Unless otherwise specified in the
Award Agreement, but in any event no later than ten
(10) years from the Grant Date, each Option shall terminate
no later than the first to occur of the following events:
(a) Date in Award Agreement. The
date for termination of the Option set forth in the written
Award Agreement;
(b) Termination of Continuous Status as Employee,
Director or Consultant. The last day of the
three (3)-month period following the date the Participant ceases
his/her/its Continuous Status as an Employee, Director or
Consultant (other than termination for a reason described in
subsections (c), (d), (e), or (f) below).
(c) Misconduct. In the event a
Participants Continuous Status as an Employee, Director or
Consultant terminates because the Participant has performed an
act of Misconduct as determined by the Administrator, all
unexercised Options held by such Participant shall expire five
(5) business days following Participants receipt of
written notice from the Company of Participants
termination due to Misconduct; provided, however, that the
Administrator may, in its sole discretion, prior to the
expiration of the five (5) day period, reinstate the
Options by giving written notice of such reinstatement to
Participant. In the event of such reinstatement, the Participant
may exercise the Option only to such extent, for such time, and
upon such terms and conditions as if the Participant had ceased
to be employed by or affiliated with the Company or a Subsidiary
upon the date of such termination for a reason other than
Misconduct, disability or death;
(d) Disability. In the event that
a Participants Continuous Status as an Employee, Director
or Consultant terminates as a result of the Participants
Disability, the Participant may exercise his or her Option at
any time within twelve (12) months from the date of such
termination (but in no event later than the expiration of the
term of such Option as set forth in the Award Agreement). If, at
the date of termination, the Participant is not entitled to
exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan.
If, after termination, the Participant does not exercise his or
her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to
the Plan;
(e) Death. In the event of the
death of a Participant, the Participants Option may be
exercised at any time within twelve (12) months following
the date of death (but in no event later than the expiration of
the term of such Option as set forth in the Award Agreement), by
the Participants estate or by a person who acquired the
right to exercise the Option by bequest or inheritance. If, at
the time of death, the Participant was not entitled to exercise
his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall immediately revert to
the Plan. If, after death, the Participants estate or a
person who acquired the right to exercise the Option by bequest
or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan; or
(f) 10 Years from Grant. An
Option shall expire no more than ten (10) years from the
Grant Date; provided, however, that if an Incentive Stock Option
is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to
Section 424(d) of the Code, owns stock possessing more than
10% of the total combined voting power of all classes of the
stock of the Company or any of its Subsidiaries, such Incentive
Stock Option may not be exercised after the expiration of five
(5) years from the Grant Date.
5.5.2 Administrator
Discretion. Notwithstanding the foregoing the
Administrator may, after an Option is granted, extend the
exercise period that an Option is exercisable following a
Participants termination of Continuous Service
(recognizing in some such circumstances the Options would cease
to be Incentive Stock Options); provided, however, in no event
may any such extension extend beyond the stated expiration date
of the Option.
5.6 No Re-Pricing Without
Shareholder Approval. Except as provided in
Section 4.3, in no event may the Administrator directly or
indirectly reduce the exercise price of an Option after it has
been granted without the approval of a majority of the
shareholders eligible to vote.
5.7 Exercise and
Payment. Options shall be exercised by the
Participants delivery of a written notice of exercise to
the Secretary of the Company (or its designee), setting forth
the number of Shares with respect to which
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the Option is to be exercised, accompanied by full payment for
the Shares and payment of any additional amount that the
Administrator specifies is necessary for the Company to pay any
required withholding taxes in accordance with Section 11.
5.7.1 Form of
Consideration. Upon the exercise of any
Option, the Exercise Price shall be payable to the Company in
full in cash or its equivalent. The Administrator, in its
discretion, also may permit the exercise of Options and
same-day
sale of related Shares, or exercise by tendering previously
acquired Shares having an aggregate Fair Market Value at the
time of exercise equal to the total Exercise Price, or by any
other means which the Administrator, in its discretion,
determines to provide legal consideration for the Shares, and to
be consistent with the purposes of the Plan. The Administrator,
in its discretion, may also permit a net issuance of
any Option, where the term net issuance means the
issuance of a number of Shares (rounded down to the nearest
whole number of Shares) that is equivalent in value to the
difference between the fair market value of the underlying stock
on the exercise date, less the exercise price and minimum tax
withholding. Such discretion may be exercised by the
Administrator either in the Award Agreement or at any other time.
5.7.2 Delivery of Shares. As
soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased and taxes
required to be withheld, the Company shall deliver to the
Participant (or the Participants designated broker), Share
certificates (which may be in book entry form) representing such
Shares.
SECTION 6
STOCK
APPRECIATION RIGHTS
6.1 Grant of SARs. Subject
to the terms of the Plan, a SAR may be granted to Employees,
Consultants and Nonemployee Directors at any time and from time
to time as shall be determined by the Administrator.
6.1.1 Number of Shares. The
Administrator shall have complete discretion to determine the
number of SARs granted to any Participant.
6.1.2 Exercise Price and Other
Terms. The Administrator, subject to the
provisions of the Plan, shall have discretion to determine the
terms and conditions of SARs granted under the Plan, including
whether upon exercise the SARs will be settled in Shares or
cash, which must be determined at the time of grant and set
forth in the Award Agreement. However, the Exercise Price of a
SAR shall be not less than one hundred percent (100%) of the
Fair Market Value of a Share on the Grant Date.
6.2 Exercise of SARs. SARs
granted under the Plan shall be exercisable at such times and be
subject to such restrictions as set forth in the Award Agreement
and conditions as the Administrator shall determine in its
discretion.
6.3 SAR Agreement. Each SAR
grant shall be evidenced by an Award Agreement that shall
specify the Exercise Price, the term of the SAR, the conditions
of exercise and such other terms and conditions as the
Administrator shall determine.
6.4 Expiration of SARs. A
SAR granted under the Plan shall expire upon the date determined
by the Administrator in its discretion as set forth in the Award
Agreement, or otherwise pursuant to the provisions relating to
the expiration of Options as set forth in Section 5.5.
6.5 No Re-Pricing Without
Shareholder Approval. Except as provided in
Section 4.3, in no event may the Administrator directly or
indirectly reduce the exercise price of a SAR after it has been
granted without the approval of a majority of the shareholders
eligible to vote.
6.6 Payment of SAR
Amount. Upon exercise of a SAR, a Participant
shall be entitled to receive (whichever is specified in the
Award Agreement) from the Company either (a) a cash payment
in an amount equal to (x) the difference between the Fair
Market Value of a Share on the date of exercise and the SAR
Exercise Price, multiplied by (y) the number of Shares with
respect to which the SAR is exercised, or (b) a number of
Shares by dividing such cash amount by the Fair Market Value of
a Share on the exercise date. If the Administrator designates in
the Award Agreement that the SAR will be settled in cash, upon
Participants exercise of the SAR the Company shall make a
cash payment to Participant as soon as reasonably practicable.
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SECTION 7
RESTRICTED
STOCK
7.1 Grant of Restricted
Stock. Subject to the terms and provisions of
the Plan, the Administrator, at any time and from time to time,
may grant Shares of Restricted Stock to Employees, Directors and
Consultants in such amounts as the Administrator, in its
discretion, shall determine. However, the award of Restricted
Stock under this Section 7 is subject to the Full-Value
Award Limitation, as described in Section 2.20. The
Administrator shall determine the number of Shares to be granted
to each Participant and the purchase price, if any, to be paid
by the Participant for such Shares. At the discretion of the
Administrator, such purchase price may be paid by Participant
with cash or through services rendered.
7.2 Restricted Stock
Agreement. Each Award of Restricted Stock
shall be evidenced by an Award Agreement that shall specify the
Period of Restriction, the number of Shares granted, and such
other terms and conditions as the Administrator, in its
discretion, shall determine. Unless the Administrator determines
otherwise, Shares of Restricted Stock shall be held by the
Company as escrow agent until the restrictions on such Shares
have lapsed.
7.3 Transferability. Except
as provided in this Section 7, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until expiration of the applicable
Period of Restriction.
7.4 Other Restrictions. The
Administrator, in its discretion, may impose such other
restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate, in accordance with this
Section 7.4, including, without limitation, provisions
relating to expiration of restrictions.
7.4.1 General
Restrictions. The Administrator may set
restrictions based upon the achievement of specific Performance
Goals (Company-wide, business unit, or individual), or any other
basis determined by the Administrator in its discretion.
7.4.2 Section 162(m) Performance
Restrictions. For purposes of qualifying
grants of Restricted Stock as performance-based
compensation under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based
upon the achievement of Performance Goals. The Performance Goals
shall be set by the Administrator on or before the latest date
permissible to enable the Restricted Stock to qualify as
performance-based compensation under
Section 162(m) of the Code. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the
Code, the Administrator shall follow any procedures determined
by it from time to time to be necessary or appropriate to ensure
qualification of the Restricted Stock under Section 162(m)
of the Code (e.g., in determining the Performance Goals).
7.4.3 Legend on
Certificates. The Administrator, in its
discretion, may place a legend or legends on the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
7.5 Removal of
Restrictions. Except as otherwise provided in
this Section 7, Shares of Restricted Stock covered by each
Restricted Stock grant made under the Plan shall be released
from escrow as soon as practicable after expiration of the
Period of Restriction. After the restrictions have lapsed, the
Participant shall be entitled to have any legend or legends
under Section 7.4.3 removed from his or her Share
certificate, and the Shares shall be freely transferable by the
Participant, subject to Applicable Law.
7.6 Voting Rights. During
the Period of Restriction, Participants holding Shares of
Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless otherwise provided
in the Award Agreement.
7.7 Dividends and Other
Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock
shall be entitled to receive all dividends and other
distributions paid with respect to such Shares unless otherwise
provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to
the same restrictions on transferability and forfeitability as
the Shares of Restricted Stock with respect to which they were
paid.
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7.8 Return of Restricted Stock to
Company. On the date that any forfeiture
event set forth in the Award Agreement occurs, the Restricted
Stock for which restrictions have not lapsed shall revert to the
Company and again shall become available for grant under the
Plan. Such reverted Restricted Stock shall credit the Full-Value
Award Limitation.
SECTION 8
RESTRICTED
STOCK UNITS
8.1 Grant of Restricted Stock
Units. Subject to the terms and conditions of
the Plan, Restricted Stock Units may be granted to Employees,
Consultants and Nonemployee Directors at any time and from time
to time, as shall be determined by the Administrator in its
discretion. However, the award of Restricted Stock Units under
this Section 8 is subject to the Full-Value Award
Limitation, as described in Section 2.20.
8.1.1 Number of Units. The
Administrator will have complete discretion in determining the
number of Restricted Stock Units granted to any Participant,
subject to the limitations in Sections 4.1.
8.1.2 Value of Restricted Stock
Units. Each Performance Unit shall have a
value equal to the Fair Market Value of one Share.
8.2 Performance Goals and Other
Terms. The Administrator will set Performance
Goals or other vesting provisions, including, without
limitation, time-based vesting provisions, in its discretion
which, depending on the extent to which they are met, will
determine the number Restricted Stock Units that are converted
into Shares or into the equivalent value of cash that shall be
paid to Participants. The time period during which the
Performance Goals or other vesting provisions must be met will
be called the Performance Period. Each Award of
Restricted Stock Units will be evidenced by an Award Agreement
that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its discretion, will
determine. The Administrator may set Performance Goals based
upon the achievement of Company-wide or Individual Objectives or
any other basis determined by the Administrator in its
discretion.
8.3 Earning of Restricted Stock
Units. After the applicable Performance
Period has ended, the holder of Restricted Stock Units will be
entitled to receive a payment based on the number of Restricted
Stock Units earned by the Participant over the Performance
Period, to be determined as a function of the extent to which
the corresponding Performance Goals or other vesting provisions
have been achieved.
8.4 Form and Timing of Payment of Restricted
Stock Units. Each Award Agreement of
Restricted Stock Units shall specify the form of payment, which
may be in the form of Shares or in cash. Payment with respect to
earned Restricted Stock Units shall be made as soon as
reasonably practical (an in no event more than two and one-half
months) after the expiration of the Performance Period.
8.5 Cancellation of Restricted Stock
Units. On the date that any forfeiture event
set forth in the Award Agreement occurs, all unearned or
unvested Restricted Stock Units will revert to the Company, and
again will be available for grant under the Plan. Such reverted
Restricted Stock Units shall credit the Full-Value Award
Limitation.
SECTION 9
MISCELLANEOUS
9.1 Change In
Control. Unless otherwise provided in the
Award Agreement, in the event of a Change in Control, unless an
Award is assumed or substituted by the successor corporation,
then (i) such Awards shall become fully exercisable during
the ten (10) day period immediately prior to the Change in
Control, whether or not otherwise then exercisable and
(ii) all restrictions and conditions on any Award then
outstanding shall lapse as of the date of the Change in Control.
Unless an Award is assumed or substituted by the successor
corporation, such Award shall terminate and shall no longer be
exercisable immediately upon the Change in Control, Participant
shall be provided written notification of whether Options
granted under the Plan will be assumed, substituted or shall
become fully exercisable no later than ten (10) days prior
to the Change in Control date.
A-10
9.2 Dissolution or
Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator
shall notify each Participant as soon as practicable prior to
the effective date of such proposed transaction. Notwithstanding
anything to the contrary contained in this Plan or in any Award
Agreement, the Participant shall have the right to exercise his
or her Award for a period of not less than ten (10) days
immediately prior to such dissolution or transaction as to all
of the Shares covered thereby, including Shares as to which the
Award would not otherwise be exercisable.
9.3 No Effect on Employment or
Service. Nothing in the Plan shall interfere
with or limit in any way the right of the Company or an
Affiliate to terminate any Participants employment or
service at any time, with or without cause. Unless otherwise
provided by written contract, employment or service with the
Company or any of its Affiliates is on an at-will basis only.
Additionally, the Plan shall not confer upon any Director any
right with respect to continuation of service as a Director or
nomination to serve as a Director, nor shall it interfere in any
way with any rights which such Director or the Company may have
to terminate his or her directorship at any time.
9.4 Participation. No
Employee, Consultant or Nonemployee Director shall have the
right to be selected to receive an Award under this Plan, or,
having been so selected, to be selected to receive a future
Award.
9.5 Limitations on
Awards. No Participant shall be granted an
Award or Awards in any Fiscal Year in which the combined number
of Shares underlying such Award(s) exceeds two hundred thousand
(200,000) Shares; provided, however, that such limitation shall
be adjusted proportionately in connection with any change in the
Companys capitalization as described in Section 4.3.
9.6 Successors. All
obligations of the Company under the Plan, with respect to
Awards granted hereunder, shall be binding on any successor to
the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation
or, otherwise, sale or disposition of all or substantially all
of the business or assets of the Company.
9.7 Beneficiary
Designations. If permitted by the
Administrator, a Participant under the Plan may name a
beneficiary or beneficiaries to whom any vested but unpaid Award
shall be paid in the event of the Participants death. Each
such designation shall revoke all prior designations by the
Participant and shall be effective only if given in a form and
manner acceptable to the Administrator. In the absence of any
such designation, any vested benefits remaining unpaid at the
Participants death shall be paid to the Participants
estate and, subject to the terms of the Plan and of the
applicable Award Agreement, any unexercised vested Award may be
exercised by the administrator or executor of the
Participants estate.
9.8 Limited Transferability of
Awards. No Award granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution. All rights with respect to an Award granted to
a Participant shall be available during his or her lifetime only
to the Participant. Notwithstanding the foregoing, the
Participant may, in a manner specified by the Administrator,
(a) transfer a Nonqualified Stock Option to a
Participants spouse, former spouse or dependent pursuant
to a court-approved domestic relations order which relates to
the provision of child support, alimony payments or marital
property rights and (b) transfer a Nonqualified Stock
Option or Restricted Stock by bona fide gift and not for any
consideration to (i) a member or members of the
Participants immediate family, (ii) a trust
established for the exclusive benefit of the Participant
and/or
member(s) of the Participants immediate family,
(iii) a partnership, limited liability company of other
entity whose only partners or members are the Participant
and/or
member(s) of the Participants immediate family or
(iv) a foundation in which the Participant an/or member(s)
of the Participants immediate family control the
management of the foundations assets.
9.9 Restrictions on Share
Transferability. The Administrator may impose
such restrictions on any Shares acquired pursuant to the
exercise of an Award as it may deem advisable, including, but
not limited to, restrictions related to applicable federal
securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded
or any blue sky or state securities laws.
9.10 Transfers Upon a Change in
Control. In the sole and absolute discretion
of the Administrator, an Award Agreement may provide that in the
event of certain Change in Control events, which may include any
or all of the Change in Control events described in
Section 2.8, Shares obtained pursuant to this Plan shall be
subject to certain rights and obligations, which include but are
not limited to the following: (i) the obligation to vote
all such
A-11
Shares in favor of such Change in Control transaction, whether
by vote at a meeting of the Companys shareholders or by
written consent of such shareholders; (ii) the obligation
to sell or exchange all such Shares and all rights to acquire
Shares, under this Plan pursuant to the terms and conditions of
such Change in Control transaction; (iii) the right to
transfer less than all but not all of such Shares pursuant to
the terms and conditions of such Change in Control transaction,
and (iv) the obligation to execute all documents and take
any other action reasonably requested by the Company to
facilitate the consummation of such Change in Control
transaction.
9.11 Performance-Based
Awards. Each agreement for the grant of
Restricted Stock Units or other performance-based awards shall
specify the number of Shares or Units underlying the Award, the
Performance Period and the Performance Goals (each as defined
below), and each agreement for the grant of any other award that
the Administrator determines to make subject to a Performance
Goal similarly shall specify the applicable number of shares of
Common Stock, the period for measuring performance and the
Performance Goal. As used herein, Performance Goals
means performance goals specified in the agreement for a
Performance Unit Award, or for any other Award which the
Administrator determines to make subject to Performance Goals,
upon which the vesting or settlement of such award is
conditioned and Performance Period means the period
of time specified in an agreement over which Restricted Stock
Units, or another Award which the Administrator determines to
make subject to a Performance Goal, are to be earned. Each
agreement for a performance-based Award shall specify in respect
of a Performance Goal the minimum level of performance below
which no payment will be made, shall describe the method of
determining the amount of any payment to be made if performance
is at or above the minimum acceptable level, but falls short of
full achievement of the Performance Goal, and shall specify the
maximum percentage payout under the agreement.
9.11.1 Performance Goals for Covered
Employees. The Performance Goals for
Restricted Stock Units and any other performance-based award
granted to a Covered Employee, if deemed appropriate by the
Administrator, shall be objective and shall otherwise meet the
requirements of Section 162(m)(4)(C) of the Code, and shall
be based upon one or more of the following performance-based
business criteria, either on a business unit or Company-specific
basis or in comparison with peer group performance: revenue,
operating income, operating cash flows, return on net assets,
return on assets, return on equity, return on capital, asset
turnover, total stockholder return, net income, pre-tax income,
gross margin, profit margin, net income margin, cash flow, book
value, earnings per share, earnings growth, EBIT, EBITDA.
Achievement of any such Performance Goal shall be measured over
a period of years not to exceed ten (10) as specified by
the Administrator in the agreement for the performance-based
Award. No business criterion other than those named above in
this Section 9.11.1 may be used in establishing the
Performance Goal for an award to a Covered Employee under this
Section 9.11. For each such award relating to a Covered
Employee, the Administrator shall establish the targeted level
or levels of performance for each such business criterion. The
Administrator may, in its discretion, reduce the amount of a
payout otherwise to be made in connection with an award under
this Section 9.11, but may not exercise discretion to
increase such amount, and the Administrator may consider other
performance criteria in exercising such discretion. All
determinations by the Administrator as to the achievement of
Performance Goals under this Section 9.11 shall be made in
writing. The Administrator may not delegate any responsibility
under this Section 9.11. As used herein, Covered
Employee shall mean, with respect to any grant of an
award, an executive of the Company or any Subsidiary who is a
member of the executive compensation group under the
Companys compensation practices (not necessarily an
executive officer) whom the Administrator deems may be or become
a covered employee as defined in Section 162(m)(3) of the
Code for any year that such award may result in remuneration
over $1 million which would not be deductible under
Section 162(m) of the Code but for the provisions of the
Program and any other qualified performance-based
compensation plan (as defined under Section 162(m) of
the Code) of the Company; provided, however, that the
Administrator may determine that a Plan Participant has ceased
to be a Covered Employee prior to the settlement of any award.
9.11.2 Mandatory Deferral of
Income. The Administrator, in its sole
discretion, may require that one or more award agreements
contain provisions which provide that, in the event
Section 162(m) of the Code, or any successor provision
relating to excessive employee remuneration, would operate to
disallow a deduction by the Company with respect to all or part
of any award under the Program, a Plan Participants
receipt of the benefit relating to such award that would not be
deductible by the Company shall be deferred until the next
succeeding year
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or years in which the Plan Participants remuneration does
not exceed the limit set forth in such provisions of the Code;
provided, however, that such deferral does not violate Code
Section 409A.
SECTION 10
AMENDMENT,
SUSPENSION, AND TERMINATION
10.1 Amendment, Suspension, or
Termination. Except as provided in
Section 10.2, the Board, in its sole discretion, may amend,
suspend or terminate the Plan, or any part thereof, at any time
and for any reason. The amendment, suspension or termination of
the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award
theretofore granted to such Participant. No Award may be granted
during any period of suspension or after termination of the Plan.
10.2 No Amendment without Shareholder
Approval. The Company shall obtain
shareholder approval of any material Plan amendment (including
but not limited to any provision to reduce the exercise or
purchase price of any outstanding Options or other Awards after
the Grant Date (other than for adjustments made pursuant
Section 4.3), or to cancel and re-grant Options or other
rights at a lower exercise price), to the extent required to
comply with the rules of the NASDAQ, the Exchange Act,
Section 422 of the Code, or other Applicable Law.
10.3 Plan Effective Date and Duration of Awards
. The Plan shall be effective as of the Plan
Adoption Date subject to the shareholders of the Company
approving the Plan by the required vote), subject to
Sections 10.1 and 10.2 (regarding the Boards right to
amend or terminate the Plan), and shall remain in effect
thereafter. If the shareholders of the Company do not approve
the Plan by the required vote within twelve months of the Plan
Adoption Date, all Awards granted under this Plan, and this Plan
in its entirety, shall immediately terminate. However, without
further shareholder approval, no Award may be granted under the
Plan more than ten (10) years after the Plan Adoption Date.
SECTION 11
TAX
WITHHOLDING
11.1 Withholding
Requirements. Prior to the delivery of any
Shares or cash pursuant to an Award (or exercise thereof) or the
release of Shares from escrow arrangements or removal of
legends, the Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, and
local taxes (including the Participants FICA obligation)
required to be withheld with respect to such Award (or exercise
thereof).
11.2 Withholding
Arrangements. The Administrator, in its
discretion and pursuant to such procedures as it may specify
from time to time, may permit a Participant to satisfy such tax
withholding obligation, in whole or in part by (a) electing
to have the Company withhold otherwise deliverable Shares or
(b) delivering to the Company already-owned Shares having a
Fair Market Value equal to the minimum amount required to be
withheld. The amount of the withholding requirement shall be
deemed to include any amount which the Administrator agrees may
be withheld at the time the election is made; provided, however,
in the case Shares are withheld by the Company to satisfy the
tax withholding that would otherwise by issued to the
Participant, the amount of such tax withholding shall be
determined by applying the statutory minimum federal, state or
local income tax rates applicable to the Participant with
respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the
Shares to be withheld or delivered shall be determined as of the
date taxes are required to be withheld.
SECTION 12
LEGAL
CONSTRUCTION
12.1 Liability of
Company. The inability of the Company to
obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Companys counsel to be
necessary to the lawful grant or any Award or the issuance and
sale of any Shares hereunder, shall relieve the Company, its
officers, Directors and
A-13
Employees of any liability in respect of the failure to grant
such Award or to issue or sell such Shares as to which such
requisite authority shall not have been obtained.
12.2 Grants Exceeding Allotted
Shares. If the Shares covered by an Award
exceed, as of the date of grant, the number of Shares, which may
be issued under the Plan without additional shareholder
approval, such Award shall be void with respect to such excess
Shares, unless shareholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely
obtained.
12.3 Gender and
Number. Except where otherwise indicated by
the context, any masculine term used herein also shall include
the feminine; the plural shall include the singular and the
singular shall include the plural.
12.4 Severability. In the
event any provision of the Plan shall be held illegal or invalid
for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been
included.
12.5 Requirements of
Law. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable
laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be
required.
12.6 Governing Law. The Plan
and all Award Agreements shall be construed in accordance with
and governed by the laws of the State of California.
12.7 Captions. Captions are
provided herein for convenience only, and shall not serve as a
basis for interpretation or construction of the Plan.
A-14
IXYS
CORPORATION
03054
6 FOLD AND DETACH HERE 6
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THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE
ELECTION OF DIRECTORS, FOR PROPOSALS 2, 3 AND 5 AND FOR EVERY 3 YEARS ON PROPOSAL 4. |
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Please mark your votes as indicated in this example |
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Management Recommends a Vote for the Nominees for Director Listed below. |
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Management Recommends a Vote for Proposals 2 and 3. |
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To elect directors to hold office
until the next Annual Meeting of Stockholders.
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To approve the 2011 Equity Incentive Plan. |
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01 Donald L. Feucht
02 Samuel Kory
03 S. Joon Lee
04 Timothy A. Richardson
05 James M. Thorburn
06 Nathan Zommer
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07 Kenneth D. Wong |
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Proposal to approve the compensation of the Named Executive
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Management recommends a vote for Stockholder approval every 3 years.
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(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the
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Frequency of the Named Executive Officer Compensation Vote. |
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Management recommends a vote for Proposal 5. |
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To ratify the selection of BDO USA, LLP as the independent
registered public accounting firm of the Company for its fiscal
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Will Attend Meeting
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Mark Here for
Address Change or
Comments
SEE REVERSE
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NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
Important Notice Regarding the Availability of Proxy Materials for the Annual
Meeting of Stockholders to Be Held on September 16, 2011. Copies of the proxy statement and of our annual report for the fiscal year ended March 31, 2011
are available at: http://www.ixys.com/corporate/AnnualMeetingMaterials.asp.
6 FOLD AND DETACH HERE 6
PROXY
IXYS CORPORATION
1590 BUCKEYE DRIVE
MILPITAS, CALIFORNIA 95035
SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 16, 2011
The undersigned hereby appoints Nathan Zommer
and Uzi Sasson or either of them, and each with the power of substitution, and hereby authorizes them to represent and to vote all shares of
common stock of IXYS Corporation (the Company) held of record by the undersigned on July 19, 2011 at the Annual Meeting of Stockholders to
be held at 9:00 a.m. (local time) on September 16, 2011 at 1590 Buckeye Drive, Milpitas, California 95035 and at any and all postponements,
continuations and adjournments thereof, with all powers that the undersigned would possess if personally present, upon and in respect of
the following matters and in accordance with the following instructions, with discretionary authority as to any and all other matters that
may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS
PROXY WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSALS 2, 3 AND 5 AND FOR EVERY THREE YEARS ON ITEM 4, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
PLEASE MARK, DATE, SIGN, AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
Address Change/Comments
(Mark the corresponding box on the reverse side)
BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
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(Continued and to be marked, dated and signed, on the other side)
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03054 |