UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act
of 1934
Filed by the Registrant
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other than the Registrant
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Preliminary proxy statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive proxy statement
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Definitive additional materials
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Soliciting material pursuant to §240.14a-12
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INTEGRATED DEVICE TECHNOLOGY, INC.
(Name of Registrant as Specified in
Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify
the previous filing by registration statement number, or the form or schedule and the date of its filing.
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INTEGRATED DEVICE
TECHNOLOGY, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 16, 2014
We will hold the 2014 Annual Meeting of Stockholders (the Annual Meeting) of Integrated Device Technology, Inc., a Delaware
corporation (the Company), on Tuesday, September 16, 2014, at 9:30 a.m., local time, at the Companys principal place of business located at 6024 Silver Creek Valley Road, San Jose, California, for the following purposes:
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1.
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To elect John Schofield, Umesh Padval, Gordon Parnell, Donald Schrock, Ron Smith, Ph.D., Norman Taffe, and Gregory Waters as members of our Board of Directors to serve
until the next Annual Meeting of Stockholders or until their successors are duly elected and qualified;
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2.
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To approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in the proxy statement accompanying this notice (the
Proxy Statement) pursuant to the compensation disclosure rules of the Securities and Exchange Commission (Say-on-Pay);
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To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for its fiscal year ending March 29,
2015; and
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To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
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The foregoing items of business are more fully described in
the Proxy Statement. Stockholders of record on July 23, 2014 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.
The majority of the Companys outstanding shares must be
represented at the Annual Meeting (in person or by proxy) to transact business. To assure proper representation at the Annual Meeting, please mark, sign and date the enclosed proxy and mail it promptly in the enclosed self-addressed envelope. You
may also vote online at
http://www.envisionreports.com/idti
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Your proxy will not be used if you revoke it either before or at the Annual Meeting.
San Jose, California
July 25, 2014
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By Order of the Board of Directors
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/s/ Matthew D. Brandalise
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Matthew D. Brandalise
Secretary
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YOUR VOTE IS IMPORTANT. IN ORDER TO
ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE, OR VOTE ONLINE AT
HTTP://WWW.ENVISIONREPORTS.COM/IDTI
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INTEGRATED DEVICE
TECHNOLOGY, INC.
6024 Silver Creek Valley Road
San Jose, California 95138
(408) 284-8200
2014 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
July 25, 2014
The accompanying proxy is solicited on behalf of the Board of Directors of Integrated Device Technology, Inc., a Delaware corporation (the
Company), for use at the 2014 Annual Meeting of Stockholders (the Annual Meeting) to be held on Tuesday, September 16, 2014, at 9:30 a.m., local time, or at any adjournment or postponement thereof. The Annual Meeting
will be held at the Companys principal place of business located at 6024 Silver Creek Valley Road, San Jose, California 95138. Only holders of record of the Companys common stock as of the close of business on July 23, 2014 (the
Record Date) are entitled to notice of, and to vote at, the Annual Meeting. On the Record Date, the Company had 149,268,690 shares of common stock outstanding and entitled to vote. A majority of such shares, present in person or
represented by proxy, will constitute a quorum for the transaction of business.
This Proxy Statement and the accompanying form of proxy will be first mailed to stockholders on or about August 4, 2014. An Annual Report on Form 10-K with an Annual Report Wrap for the fiscal year
ended March 30, 2014 are being mailed concurrently with the mailing of the Notice of Annual Meeting and Proxy Statement to all stockholders of record as of the Record Date. The Annual Report on Form 10-K and the Annual Report Wrap are not
incorporated by reference into this Proxy Statement and are not considered proxy solicitation material.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Holders of the Companys common stock are entitled to one vote for each share held as of the Record Date, except that in the election
of directors, each stockholder has cumulative voting rights and is entitled to a number of votes equal to the number of shares held by such stockholder multiplied by the number of directors to be elected. The stockholder may cast these votes all for
a single candidate or distribute the votes among any or all of the candidates. No stockholder will be entitled to cumulate votes for a candidate, however, unless that candidates name has been placed in nomination prior to the voting and the
stockholder, or any other stockholder, has given notice at the Annual Meeting, prior to the voting, of an intention to cumulate votes. In such an event, the proxy holder may allocate among the director nominees, if more than one, the votes
represented by proxies in the proxy holders sole discretion.
The directors in Proposal No. 1 will be elected by a plurality of the votes cast. Abstentions will have no effect with regard to Proposal No. 1, because approval of a percentage of shares
present or outstanding is not required for Proposal No. 1. Broker non-votes will have no effect on the outcome of Proposal No. 1. Proposal Nos. 2 and 3 each require for approval the affirmative vote of the majority of shares of common
stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions have the same effect as a vote against Proposal Nos. 2 and 3. Broker non-votes will have no effect on the outcome of Proposal
Nos. 2 and 3.
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Unless there are different instructions on the proxy, all shares represented by valid
proxies (and not revoked prior to the vote) will be voted at the Annual Meeting: (1) FOR the election of the director nominees listed in Proposal No. 1; (2) FOR the approval, on a non-binding, advisory basis, of the executive
compensation of our named executive officers (NEOs) in Proposal No. 2 (Say-on-Pay); and (3) FOR the ratification of the selection of PricewaterhouseCoopers LLP as the Companys independent registered public
accounting firm in Proposal No. 3.
Because the vote on Proposal No. 2 is advisory, it will not be binding on the Board of Directors, the compensation committee of the
Board of Directors or IDT. With respect to Proposal No. 2, the Board of Directors will review the voting results and take them into consideration when making future decisions about executive compensation.
All votes will be tabulated by the inspector of election
appointed for the Annual Meeting who will separately tabulate, for each proposal, affirmative and negative votes, abstentions and broker non-votes. Abstentions will be considered present and entitled to vote at the Annual Meeting and will be counted
towards determining whether or not a quorum is present. Broker non-votes will be counted towards a quorum, but are not counted for any purpose in determining whether a matter has been approved. There are no statutory or contractual rights of
appraisal or similar remedies available to those stockholders who dissent from any matter to be acted on at the Annual Meeting.
The expenses of soliciting proxies to be voted at the Annual Meeting will be paid by the Company. Following the original mailing of the
proxies and other soliciting materials, certain officers or employees of the Company and/or its agents may also solicit proxies by mail, telephone and facsimile or in person. No additional compensation will be paid to such officers, regular
employees or agents of the Company for such services. Following the original mailing of the proxies and other soliciting materials, the Company will request that brokers, custodians, nominees and other record holders of the Companys common
stock forward copies of the proxy and other soliciting materials to persons for whom they hold shares of common stock and request authority for the exercise of proxies. In such cases, the Company, upon request of the record holders, will reimburse
such holders for their reasonable expenses.
Voting results will be announced by the filing of a Current Report on Form 8-K within four business days after the Annual Meeting. If
final voting results are unavailable at that time, we will file an amended Current Report on Form 8-K within four business days of the day the final results are available.
REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this
Proxy Statement has the power to revoke it prior to the Annual Meeting or at the Annual Meeting prior to the vote. A proxy may be revoked prior to the vote and exercise of the proxy by: (i) a written notice delivered to the Company stating that
the proxy is revoked, (ii) a subsequent proxy that is signed by the person who signed the earlier proxy and that is presented at the Annual Meeting or (iii) attendance at the Annual Meeting and voting in person. Please note, however, that
if a stockholders shares are held of record by a broker, bank or other nominee and that stockholder wishes to vote at the Annual Meeting, the stockholder must bring to the Annual Meeting a letter from the broker, bank or other nominee
confirming such stockholders beneficial ownership of the shares.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Any stockholder who meets the requirements of the proxy rules under the Securities Exchange Act of 1934, as amended (the
Exchange Act) may submit to the Board of Directors proposals to be considered for inclusion in next years proxy statement for the Annual Meeting in 2015. Your proposal must comply with the requirements of Rule 14a-8 under the
Exchange Act and be submitted in writing by notice delivered or mailed by
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first-class United States mail, postage prepaid, to our Secretary at Integrated Device Technology, Inc., 6024 Silver Creek Valley Road, San Jose, California 95138, and must be received no
later than March 30, 2015;
provided, however
, that if the date of our 2015 Annual Meeting is not within 30 days before or after September 16, 2015, then your proposal must be received no later than a reasonable time before we begin
to print and send our proxy materials for the 2015 Annual Meeting.
Our Amended and Restated Bylaws (Bylaws) also provide for separate advance notice procedures to recommend a person for nomination as a director or to propose business to be considered by
stockholders at a meeting which is not intended to be included in next years proxy statement. To be considered timely under these provisions, the stockholders notice must be received by our Secretary at our principal executive offices at
the address set forth above no earlier than May 19, 2015 and no later than June 18, 2015;
provided, however
, that if the date of our 2015 Annual Meeting is not within 30 days before or 60 days after September 16, 2015, the
notice must be delivered no earlier than 120 days before the 2015 Annual Meeting and no later than 90 days before the 2015 Annual Meeting, or no later than the 10th day following the day on which the first public announcement of the date of the 2015
Annual Meeting was made. Our Bylaws also specify requirements as to the form and content of a stockholders notice. For more information on stockholder nominations for director, see Consideration of Stockholder Nominees for Director
below. You are also advised to review our Bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
The chairman of the meeting may refuse to acknowledge the introduction of your proposal if it is not made in compliance with the foregoing
procedures or the applicable provisions of our Bylaws. Our Bylaws were filed with the Securities and Exchange Commission (the SEC) and can be viewed by visiting the SECs website at http://www.sec.gov. You may also obtain a copy by
writing to our Secretary at our principal executive offices located at 6024 Silver Creek Valley Road, San Jose, California 95138.
CONSIDERATION OF STOCKHOLDER NOMINEES FOR DIRECTOR
The Nominating & Governance
Committee of our Board of Directors will consider properly submitted stockholder nominations for candidates to serve on our Board of Directors. Pursuant to our Bylaws, a stockholder who wishes to nominate persons for election to the Board of
Directors at the 2015 Annual Meeting must be a stockholder of record when such holder gives the Company notice, must be entitled to vote at the meeting and must comply with the notice provisions in our Bylaws. A stockholders notice must be
delivered to the Companys Secretary by the close of business not less than 90 days nor more than 120 days prior to the one year anniversary of the preceding years annual meeting;
provided, however
, that in the event that the date
of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be delivered not earlier than the 120
th
day prior to such annual meeting and not later than the 90
th
day prior to such annual meeting or, if later, the 10
th
day following the day on which public disclosure of the date of such annual meeting was first made. For our 2015
Annual Meeting, the notice must be delivered in accordance with the dates set forth in Stockholder Proposals to be Presented at Next Annual Meeting above.
The stockholders notice must include the following
information, for the person proposed to be nominated: (1) his or her name, age, nationality, and business and residence addresses; (2) his or her principal occupation and employment; (3) the class and number of shares of stock owned
beneficially or of record by him or her; and (4) any other information required to be disclosed in a proxy statement or otherwise required by the Exchange Act. The stockholders notice must also include the following information, for the
stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made: (1) their names and addresses; (2) the class and number of shares of stock owned beneficially and of record by them;
(3) a description of any arrangements or understandings between them and each proposed nominee and any other persons (including their names) pursuant to which the nominations are to be made; (4) a representation that they intend to appear
in person or by proxy at the 2015 Annual Meeting to nominate the person named in the notice;
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(5) a representation as to whether they are part of a group that intends to deliver a proxy statement or solicit proxies in support of the nomination; and (6) any other information that
would be required to be included in a proxy statement or otherwise required by the Exchange Act or by the Companys Bylaws.
The chairman of the meeting will determine if the procedures in the Bylaws have been followed, and if not, declare that the nomination be
disregarded. If the nomination was made in accordance with the procedures in our Bylaws, the Nominating & Governance Committee of the Board of Directors will apply the same criteria in evaluating the nominee as it would any other board
nominee candidate and will recommend to the Board of Directors whether or not the stockholder nominee should be nominated by the Board of Directors and included in our proxy statement. The nominee and nominating stockholder must be willing to
provide any information reasonably requested by the Nominating & Governance Committee in connection with its evaluation.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS OR NON-MANAGEMENT DIRECTORS
Stockholders who wish to communicate with our Board of Directors or with only the non-management directors
serving on our Board of Directors may send their communications in writing to: Integrated Device Technology, Inc., 6024 Silver Creek Valley Road, San Jose, California 95138, Attention: Secretary. The Secretary of the Company will forward these
communications to the Chairman of the Board of Directors if the Chairman is a non-employee director, or otherwise to the Lead Independent Director of the Board of Directors. Stockholders should direct their communications to either the Board of
Directors or the Chairman of the Board of Directors. Communications will not be forwarded to the Chairman of the Board of Directors unless the stockholder submitting the communication identifies itself by name and sets out the class and number of
shares of stock owned by it, beneficially or of record.
Important Notice Regarding Internet Availability of Proxy Materials for the 2014 Annual Meeting of Stockholders:
The Notice and Proxy Statement, and the Annual Report on Form
10-K for the fiscal year ended March 30, 2014 are available at
http://www.edocumentview.com/idti
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CODE OF BUSINESS ETHICS
The Company has adopted a Code of Business Ethics that applies to all of our directors, officers, employees, and representatives. The Code
of Business Ethics is available on our website at
http://ir.idt.com/governance.cfm
. If the Company makes any substantive amendments to the Code of Business Ethics or grants any waiver from a provision of the Code of Business Ethics to any of
our directors or officers, the Company will promptly disclose the nature of the amendment or waiver on the Companys website.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our Board of Directors currently consists of eight members.
Our Board of Directors has nominated each of John Schofield, Umesh Padval, Gordon Parnell, Donald Schrock, Ron Smith, Ph.D., Norman Taffe, and Gregory Waters for re-election to the Board of Directors. Jeffrey McCreary is not standing for
re-election. All seven of the nominees listed below are currently serving on the Board of Directors and each has indicated a willingness to continue serving if elected. Unless otherwise instructed, the proxy holders will vote the proxies received by
them for the seven nominees named below. Proxies cannot be voted for a greater number of persons than the number of nominees standing for election. In the event that any nominee becomes unable or declines to serve as a director, the proxies will be
voted for any nominee who shall be designated by the current Board of Directors to fill the vacancy, or the Board of Directors may reduce the authorized number of directors in accordance with the Companys Restated Certificate of Incorporation
and its Bylaws, each as amended. We are not aware of any nominee who will be unable or will decline to serve as a director. The term of office for each person elected as a director will continue until the next annual meeting or until a successor has
been duly elected and qualified.
Nominees
The names of the nominees and certain information about
them, as of July 23, 2014, are set forth below:
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Name of Nominee
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Age
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Position with Company
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Director Since
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John Schofield(2)(3)
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65
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Chairman of the Board of Directors
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2001
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Umesh Padval(1)(2)
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56
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Director
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2008
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Gordon Parnell(1)(3)
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64
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Director
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2008
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Donald Schrock(1)(3)
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68
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Director
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2009
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Ron Smith, Ph.D.(1)(2)
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64
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Director
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2004
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Norman Taffe(1)(2)
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47
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Director
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2012
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Gregory L. Waters
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Director, President and Chief Executive Officer
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2014
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(1)
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Member of the Audit Committee.
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Member of the Compensation Committee.
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Member of the Nominating & Governance Committee.
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Mr. Schofield has been a director of the Company since April 2001 and has served as the Chairman of the Board of Directors since
January 2008. Mr. Schofield brings to IDT extensive experience in the areas of executive management, global sales and marketing, risk analysis, corporate governance and administration. Mr. Schofields experience is especially relevant
to his roles as Chairman of the Board and the Nominating & Governance Committee. Mr. Schofield has been a private investor since his retirement from Tellabs, Inc. (Tellabs) in January 2005. Mr. Schofield served as the
Chief Executive Officer and President of Advanced Fibre Communications, Inc. (AFC) from 1999 until the acquisition of AFC by Tellabs on November 30, 2004, at which time AFC became the Access Division of Tellabs. Mr. Schofield
also served as a member of the board of directors of AFC, and in October 2001, he was elected to the position of chairman of the board of directors of AFC. From 1992 to 1999, Mr. Schofield served as Senior Vice President, and later,
President, of the Integrated Solutions Group of ADC Telecommunications, Inc., a world-wide supplier of network equipment, software solutions and integration services for broadband and multiservice networks. Mr. Schofield also serves as a
director of Sonus Networks, Inc., a supplier of telecommunications network equipment and services. Mr. Schofield is a 2011, 2012 and 2013 National Association of Corporate Directors (NACD) Board Leadership Fellow. He has demonstrated his
commitment to boardroom excellence by completing NACDs comprehensive program of study for experienced corporate directorsa rigorous suite of courses spanning
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leading practices for boards and committees. Mr. Schofield supplements his board leadership skills through ongoing engagement with the director community and access to leading practices.
Mr. Schofield holds a Diploma of Electronics and Communications Engineering (the equivalent of a Bachelor of Science degree in electrical engineering) from NSW Institute of Technology in Sydney, Australia.
Mr. Padval has been a director of the Company since
October 2008. Mr. Padval currently serves as a Partner at Bessemer Venture Partners. Mr. Padval brings to IDT more than 25 years of experience in marketing, sales, and general management in high tech industries, including computing, mobile
communications, and consumer digital entertainment. Mr. Padval also has extensive global experience, having established R&D centers in both China and India for C-Cube Microsystems Incorporated. From August 2004 to August 2007,
Mr. Padval served as Executive Vice President of the Consumer Products Group at LSI, and from June 2001 to August 2004, Senior Vice President of the Broadband Entertainment Division at LSI. Mr. Padval served as the Chief Executive Officer
and Director of C-Cube from May 2000 until June 2001, when C-Cube was sold to LSI, and prior to that, as President of the Semiconductor Division of C-Cube from October 1998 to May 2000. Prior to joining C-Cube, Mr. Padval held senior management
positions at VLSI Technology, Inc., Silicon Image, Incorporated and Advanced Micro Devices, Inc. He currently serves on the boards of Entropic Communications Incorporated and several private companies, Avnera Corporation, Avalanche Technologies,
UltraSolar Technologies and Pinnacle Engines. Mr. Padval is also active on the advisory boards for Stanford University. Mr. Padval holds a Bachelor of Technology from Indian Institute of Technology, Mumbai, and an M.S.in Engineering from
Stanford University. Mr. Padvals technology expertise and executive experience in the semiconductor industry qualifies him to serve on the Board of Directors of the Company.
Mr. Parnell has been a director of the Company since January 2008. Mr. Parnell brings to IDT
extensive general and financial management experience, which is especially relevant to his role as Chairman of the Audit Committee. Mr. Parnell served as Vice President, Business Development and Investor Relations of Microchip Technology
Incorporated (Microchip) from January 2009 to December 2012. Prior to this role, Mr. Parnell served as Vice President and Chief Financial Officer of Microchip from May 2000 to December 2008. Prior to his role as CFO,
Mr. Parnell served as Vice President, Controller, and Treasurer of Microchip. Mr. Parnell holds a finance/accounting qualification with the Association of Certified Accountants from Edinburgh College, Scotland.
Mr. Schrock has been a director of the Company since
September 2009. Mr. Schrock brings to IDT extensive management experience in semiconductors, wireless, and consumer markets, as well as marketing and operational expertise, all of which have particular relevance to the Companys
significant presence in the wireless and wireline communications markets. Mr. Schrock is retired from his positions as President of Qualcomm CDMA Technologies Group and Executive Vice-President of Qualcomm, Inc. (Qualcomm), which he
held from 2001 to 2003. Prior to joining Qualcomm, Mr. Schrock held key executive positions at GM Hughes Electronics, Applied Micro Circuit Corporation, Burr-Brown Corporation, and Motorola. He currently serves on the board of directors of
Maxlinear, a fabless semiconductor company that provides radio-frequency analog and mixed-signal SoC solutions for broadband communications applications. Mr. Schrock also served on the board of directors of Jazz Semiconductor Inc., a
privately held mixed signal and RF wafer foundry, until its merger with Acquicor Technology in 2007. Mr. Schrocks executive experience in the technology industry, including the semiconductor field, qualifies him to serve on the Board of
Directors of the Company.
Dr. Smith has been
a director of the Company since March 2004. Dr. Smith brings to IDT extensive experience in executive management, engineering and product development, risk analysis, marketing, industry association and corporate governance. Dr. Smith is
retired from Intel Corporation, where he last served as Senior Vice President and General Manager of the Wireless Communications and Computing Group from December 1999 to January 2004. Prior to this role, Dr. Smith held various senior executive
positions in group and division general business management, product and technology development, and marketing during his 26-year tenure at Intel. Since 2005, Dr. Smith has served as a director of RagingWire Enterprise Solutions, Inc., a
premier data center and managed Information Technology services provider, and served from 20042012 as a director for Arcsoft, Inc, an industry leading software developer of multimedia applications for both desktop and embedded
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platforms. Dr. Smith has also served as a Trustee of Gettysburg College since 2006, where he is a member of the executive, compensation, finance, campaign, and audit committees and he chairs
the Information Technology Committee. He is a member of the Association of Governing Boards of Universities and Colleges. Dr. Smith served as the Chairman of the Technology Strategy Committee and as Intels alternate Board of Directors
member for the Semiconductor Industry Association from 1999-2004. Dr. Smith is a 2011 NACD Board Governance Fellow. Dr. Smith holds a Ph.D. and a masters degree in physics from the University of Minnesota and a bachelors degree
in physics from Gettysburg College. Dr. Smiths executive experience in the technology industry qualifies him to serve on the Board of Directors of the Company.
Mr. Taffe has been a director of the Company since October
2012. Mr. Taffe also currently serves on the board of directors of Cypress Envirosystems, a Cypress Semiconductor-funded company that develops system-level products for reducing energy costs with wireless technology, and of DSP Group, a leading
global provider of wireless chipset solutions for converged communications. From 2005 to 2012, Mr. Taffe served as executive vice president of Cypress Semiconductor. Mr. Taffe also currently holds the position of Board Chairman to the
Second Harvest Food Bank. Mr. Taffe holds a B.S. in Electrical Engineering from the University of Michigan. Mr. Taffe is qualified to serve on the Board of Directors due to his technological expertise and executive experience in the
semiconductor industry.
Mr. Waters joined
the Company as President and Chief Executive Officer in January 2014 and was appointed to the Board of Directors at the same time. Prior to joining IDT, Mr. Waters served as Senior Vice President and General Manager, Front-End Solutions at
Skyworks Solutions, Inc. (Skyworks), a semiconductor company, from 2006 until December 2012. From 2003 to 2006, he served in various positions at Skyworks, including Executive Vice President beginning in 2005, Vice President and General
Manager, Cellular Systems beginning in 2004 and Vice President, Linear Products beginning in 2003. From 2001 until 2003, Mr. Waters served as Senior Vice President of Strategy and Business Development at Agere Systems Inc. (Agere)
and, beginning in 1998, held positions at Agere as Vice President of the Wireless Communications business and Vice President of the Broadband Communications business. Prior to working at Agere, Mr. Waters held a variety of senior management
positions at Texas Instruments Inc., including Director of Network Access Products and Director of North American Sales. Mr. Waters holds a B.S. of Engineering from the University of Vermont and an M.S. in Computer Science from Northeastern
University. Mr. Waters is qualified to serve on the Board of Directors due to his technological expertise and executive experience in the semiconductor industry.
Messrs. Padval, Parnell, Schofield, Taffe, and Schrock, and
Dr. Smith are members of the National Association of Corporate Directors (NACD) and Messrs. Padval, Parnell, Schofield, and Schrock, and Dr. Smith have completed the two-day NACD course on Director Professionalism.
Vote Required
The seven nominees receiving the highest number of
affirmative votes cast shall be elected as directors to serve until the next annual meeting of stockholders or until their successors have been duly elected and qualified. Abstentions and broker non-votes will have no effect for purposes of
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE ELECTION OF
THE NOMINATED DIRECTORS.
CORPORATE GOVERNANCE
Board of Directors Meetings and Committees
The Board of Directors of the Company holds regularly scheduled meetings each quarter and may meet more often as needed. The Board of
Directors held a total of twenty-two (22) meetings during the fiscal year ended March 30, 2014 (fiscal 2014). The Board of Directors also has an Audit Committee, a Compensation
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Committee and a Nominating & Governance Committee. The independent directors of the Board of Directors have established a practice of meeting in executive session, without the presence
of Mr. Waters, at the conclusion of each quarterly board meeting. During fiscal 2014, the independent directors met in executive session a total of four (4) times.
NASDAQ prescribes independence standards for companies listed
on NASDAQ, including IDT. These standards require a majority of the Board of Directors to be independent. They also require every member of the Audit Committee, Compensation Committee, and Nominating & Governance Committee to be
independent. No director qualifies as independent unless the Board determines that the director has no direct or indirect material relationship with us. On an annual basis, each director and executive officer is obligated to complete a director and
officer questionnaire which requires disclosure of any transactions with us in which the director or executive officer, or any member of his or her immediate family, has a direct or indirect material interest. We also review our relationship to any
entity employing a director or on which the director currently serves as a member of the Board. Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her immediate
family members, and IDT, its senior management and its independent registered public accounting firm, the Board of Directors has determined that each of the members of our Board of Directors, except for Mr. Waters, and each of the members of
the Audit Committee, Compensation Committee and Nominating & Governance Committee is an independent director as defined in the applicable rules and regulations of the SEC and NASDAQ rules.
During fiscal 2014, upon the resignation of Mr. Jeffrey
McCreary in connection with his appointment as interim CEO in August 2013, the Audit Committee was composed of five (5) non-employee directors, Messrs. Parnell, Padval, Schrock and Taffe and Dr. Smith, each of whom was
independent as defined in the applicable rules and regulations of the SEC and the NASDAQ rules. Mr. Parnell currently serves as the Chair of the Audit Committee, and the Board of Directors has determined that he satisfies the
audit committee financial expert designation in accordance with applicable SEC and NASDAQ rules. The Audit Committee operates under a written charter adopted by the Board of Directors that is available on the Companys website at
http://ir.idt.com/governance.cfm
. The Audit Committee engages the Companys independent registered public accounting firm and is primarily responsible for approving the services performed by the Companys independent registered
public accounting firm and for reviewing and evaluating the Companys accounting practices and systems of internal controls. The Audit Committee meets privately with the Companys independent registered public accounting firm, which has
direct access to the Audit Committee at any time. The Audit Committee held five (5) meetings during fiscal 2014.
The Compensation Committee of our Board of Directors develops the compensation philosophy and objectives for the Company as a whole,
reviews and approves all compensation decisions related to our NEOs and other executive officers and generally oversees our compensation programs. As members of our Board of Directors, the Compensation Committee receives regular updates on the
Companys business priorities, strategies, and results. As a result, the Compensation Committee has regular interaction with and open access to the NEOs. This gives them considerable opportunity to ask questions and assess the performance of
the NEOs, other executive officers, and the Company. During fiscal 2014, upon the resignation of Mr. Peter Feld in February 2014, the Compensation Committee was composed of four (4) non-employee directors, Messrs. Padval, Schofield and
Taffe, and Dr. Smith, each of whom was independent under the applicable rules and regulations of the SEC, the rules of the NASDAQ and the Internal Revenue Code of 1986, as amended from time to time (the Code). Dr. Smith currently
serves as the Chair of the Compensation Committee. The Compensation Committee operates under a written charter adopted by the Board of Directors that is available on the Companys website at
http://ir.idt.com/governance.cfm
. In
consultation with management and the Board of Directors, the Compensation Committee reviews, evaluates, and recommends to the Board of Directors for approval, the compensation plans, policies and practices of the Company. The Compensation Committee
aims to ensure that the Companys compensation programs encourage high performance, promote accountability, and assure that employee interests are aligned with the interests of the Companys stockholders. The Compensation Committee
determines the salaries and incentive compensation for executive officers, including the CEO, and oversees the
8
administration of the Companys equity plans, including approving the number of shares underlying stock options and/or restricted stock units to be granted to each employee and the terms of
such grants. The Compensation Committee met six (6) times and acted by written consent sixteen (16) times during fiscal 2014.
The Compensation Committees specific responsibilities include, but are not limited to:
|
|
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Reviewing, revising and approving an industry-specific Peer Group (as defined below) to facilitate appropriate comparisons for compensation purposes;
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|
|
Meeting in executive session to review and recommend for Board approval the corporate goals and objectives relating to the compensation of the CEO,
evaluate the performance of the chief executive officer in light of these goals and objectives, and establish the compensation of the CEO based on such evaluation and competitive market data pertaining to compensation at peer companies;
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|
Reviewing and approving compensation for other officers, considering each Officers performance in light of Company goals and objectives and
competitive market data pertaining to compensation at peer companies. The CEO of the Company may be present at meetings during which such compensation is under review and consideration, but may not vote;
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|
Reviewing and making recommendations to the Board of Directors regarding compensation and benefit plans and programs for executives and non-management
directors;
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|
Reviewing and approving the annual budget for employee merit salary increases, as recommended by management and determined by the Committee;
|
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|
As requested by Company management, reviewing, consulting, and making recommendations and/or determinations regarding employee compensation and benefit
plans generally, including employee bonus plans and programs;
|
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|
Overseeing the administration of the Companys equity incentive plans, including the review and grant of stock option and other equity incentive
grants to Officers, and review and approval of the annual equity budget for all equity award types;
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|
Overseeing administration of the Companys Employee Stock Purchase Plan;
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|
Managing and reviewing executive employment agreements and the grant of change-in-control and perquisite benefits;
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|
Reviewing and approving the Compensation Discussion and Analysis and the Report of the Compensation Committee to be included as part of the
Companys annual proxy statement;
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|
Reviewing, along with the CEO, matters relating to management succession, including compensation-related issues and exercising final approval over such
issues;
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Monitoring compliance with the applicable provisions of the Sarbanes Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection
Act relating to employee compensation and benefits;
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Reviewing the risks and mitigating factors associated with the Companys compensation programs, practices and policies; and
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|
Annually reviewing and reassessing the Compensation Committee Charter and recommending any changes to the Board of Directors for its consideration.
|
In carrying out the foregoing
responsibilities, the Compensation Committee has the authority, in its sole discretion, to engage outside independent advisors as it deems necessary or appropriate. In addition, the Compensation Committee is entitled to delegate any or all of its
responsibilities to a subcommittee of the Compensation Committee other than any responsibilities relating to matters that involve executive compensation or where it has determined such compensation is intended to comply with the requirements of
Section 162(m) of the Code.
9
During fiscal 2014, upon the resignations of Messrs. McCreary and Feld, the
Nominating & Governance Committee was composed of three (3) non-employee directors, Messrs. Schofield, Parnell, and Schrock, each of whom was independent as defined in the NASDAQ rules. Mr. Schofield currently serves
as the Chair of the Nominating & Governance Committee. The Nominating & Governance Committee operates under a written charter adopted by the Board of Directors that is available on the Companys website at
http://ir.idt.com/governance.cfm
. The Nominating & Governance Committee identifies and recommends individuals qualified to serve on the Board of Directors and evaluates and recommends the adoption or amendment of corporate governance
guidelines and principles applicable to the Company. In evaluating candidates to determine if they are qualified to become board members, the Nominating & Governance Committee looks for the following attributes, among others determined by
the Nominating & Governance Committee in its discretion to be consistent with the Companys guidelines: personal and professional character, integrity, ethics and values; experience in the Companys industry and with relevant
social policy concerns; general business experience and leadership profile, including experience in corporate management and corporate governance, such as serving as an officer or former officer of a publicly held company, or experience as a board
member of another publicly held company; diversity of personal background, perspective and experience; academic expertise in an area of the Companys operations; and communication and interpersonal skills and practical and mature business
judgment. The Nominating & Governance Committee evaluates each individual in the context of our Board of Directors as a whole, with the objective of assembling a Board of Directors that can best perpetuate and enhance the success of the
Company and represent stockholder interests through the exercise of sound judgment, using its diversity of experience in these various areas. Although the Nominating & Governance Committee uses these and other criteria to evaluate potential
nominees, there are no stated minimum criteria for nominees. The Nominating & Governance Committee uses the same standards to evaluate all director candidates, whether or not the candidates were nominated by stockholders. The
Nominating & Governance Committee held four (4) meetings during fiscal 2014.
Each director attended at least 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings held by all committees on which such director served during
fiscal 2014. The Company does not currently maintain a formal policy regarding director attendance at the Annual Meeting; however, the Company invites nominees for directors to attend the Annual Meeting. Seven directors who served on the Board of
Directors in fiscal 2014 attended the 2013 Annual Meeting, either in person or by conference call.
Risk Oversight
Our Board of Directors has an active role, as a whole and also at the committee level, in overseeing management of our risks. Our Board of Directors generally oversees corporate risk in its review and
deliberations relating to our activities, including financial and strategic risk relevant to our operations. In addition, our Board of Directors regularly reviews information regarding our credit, liquidity and operations, as well as the risks
associated with each. The Audit Committee oversees management of financial risks. The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation plans and arrangements and employee retention.
The Nominating & Governance Committee manages risks associated with the independence of the Board of Directors and potential conflicts of interest. While each committee is responsible for evaluating certain risks and overseeing the
management of such risks, the entire Board of Directors is regularly informed through committee reports about such risks. Our Board of Directors believes its administration of its risk oversight function has not affected the leadership structure of
the Board of Directors.
The Audit Committee
reviews the Companys policies with respect to risk assessment and risk management, discusses with management significant financial risks in conjunction with enterprise risk exposures, and the actions management has taken to limit, monitor or
control financial and enterprise risk exposure. During fiscal 2014, an independent consulting firm was primarily responsible for testing of internal controls in compliance with Section 404 of the Sarbanes-Oxley legislation, and reported
directly to our Chief Financial Officer and our Corporate Controller, and dotted-line to the Chair of the Audit Committee. The Audit Committee met with the independent consulting firm to receive updates on Sarbanes-Oxley testing and
discuss any issues that the Committee believed warranted attention.
10
The Compensation Committee oversees risk management as it relates to the Companys
compensation programs, policies and practices in connection with designing our executive compensation programs and reviewing incentive compensation programs for other employees. The Compensation Committee has reviewed with management whether our
compensation programs, policies, and practices may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on the Company.
We believe that the elements of our compensation programs, policies and practices do not encourage unnecessary
or excessive risk-taking. Base salaries are fixed in amount. While our sales commission plans and bonus plans focus on achievement of short-term or annual goals, and short-term or annual goals may encourage the taking of short-term risks at the
expense of long-term results, given our employees other compensation opportunities and our internal control procedures, we believe that the sales commission plans and bonus plans appropriately balance risk and the desire to focus employees on
specific short-term goals that we believe are important to our success.
We also believe that compensation in the form of long-term equity awards is important to help further align employee interests with those of our stockholders. We do not believe that these awards encourage
unnecessary or excessive risk taking because the ultimate value of the awards is tied to our stock price, and because award grants are staggered and subject to long-term vesting schedules that we believe help ensure that employees have significant
value tied to long-term stock price performance.
Based on the foregoing, we do not believe that our compensation policies and practices create inappropriate or unintended risk to the
Company as a whole. Further, we do not believe that our incentive compensation arrangements encourage risk-taking beyond the organizations ability to effectively identify and manage significant risks. We believe such arrangements are
compatible with effective internal controls and the risk management practices of the Company, and are supported by the oversight and administration of the Compensation Committee with regard to executive compensation programs.
This Proxy Statement, including the preceding paragraphs,
contains forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events. Forward-looking statements contained in this Proxy Statement should be considered in light
of the many uncertainties that affect our business and specifically those factors discussed from time to time in our public reports filed with the SEC, such as those discussed under the heading Risk Factors, in our most recent Annual
Report on Form 10-K, and as may be updated in subsequent SEC filings.
Leadership Structure of the Board
In accordance with our Bylaws, our Board of Directors appoints our officers, including our Chief Executive Officer. Our Board of Directors may empower the Chief Executive Officer to appoint officers other
than the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer. Our Board of Directors does not have a policy on whether the roles of the Chairman of the Board of Directors and the Chief
Executive Officer should be separate and, if they are to be separate, whether the Chairman should be selected from the non-employee directors or be an employee and, if they are to be combined, whether a lead independent director should be selected.
However, our Board of Directors is committed to corporate governance practices and values independent board oversight as an essential component of strong corporate performance. Currently, we separate the role of Chairman from the Chief Executive
Officer position in order to ensure independent leadership of the Board of Directors and in recognition of the difference between the two roles. The Chief Executive Officer is responsible for setting the strategic direction of the Company and for
the day-to-day leadership and performance of the Companys business, while the Chairman is responsible for leading the Board of Directors in overseeing management, and our Board of Directors believes that this current structure is appropriate
to fulfill the duties of Chairman and Chief Executive Officer effectively and efficiently.
11
Director Compensation
During fiscal 2014, the members of the Board of Directors
who were not also officers or employees of the Company were each paid an annual retainer in the amount of $50,000. The Chairman of the Board received an additional annual retainer of $30,000. The Chair of the Audit Committee received an additional
annual retainer of $20,000 and the other members of the Audit Committee received an additional annual retainer of $10,000. The Chair of the Compensation Committee received an additional annual retainer of $20,000 and the other members of the
Compensation Committee received an additional annual retainer of $7,500. The Chair of the Nominating & Governance Committee received an additional annual retainer of $7,500 and the remaining members of the Nominating & Governance
Committee received an additional annual retainer of $5,000. All annual retainer amounts are paid in equal quarterly installments.
Each non-employee director is initially granted a mix of stock options and restricted stock unit awards for the
number of shares of the Companys common stock equivalent to $140,000 which is granted on or about the
15
th
day of the month following the month of such
non-employee directors first election or appointment to the Board of Directors. Initial option grants to non-employee directors have a term of seven (7) years and become exercisable as to 25% of the shares subject to such options on the
first anniversary of their date of election or appointment, and then as to 1/36 of the remaining shares each month thereafter.
Annually, after receipt of the initial grant, each non-employee director is granted a restricted stock unit award for the number of shares
of the Companys common stock equivalent to $120,000 in value, based on the closing price of the Companys common stock on the trading day immediately preceding the date of grant. All annual grants for non-employee directors are made
during the Companys first open trading window subsequent to the Companys annual meeting of stockholders. Annual restricted stock unit awards vest and become exercisable on the earlier of (i) the first anniversary of the stockholder
meeting date or (ii) if a director is not standing for re-election or fails to be re-elected at the next annual meeting of stockholders, then on the date of such annual meeting.
The following table sets forth compensation information for the Companys non-employee directors for
fiscal 2014.
DIRECTOR COMPENSATION FOR FISCAL
2014
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Name
|
|
Fees Earned
or Paid in
Cash
($)
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|
|
Stock
Awards
($)(1)
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|
|
Option
Awards
($)(2)(3)
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|
|
Total
($)
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|
John Schofield
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|
95,000
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|
|
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120,007
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|
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0
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|
|
|
215,007
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|
Peter Feld
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|
|
62,500
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|
|
|
120,007
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|
|
|
0
|
|
|
|
182,507
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|
Gordon Parnell
|
|
|
75,000
|
|
|
|
120,007
|
|
|
|
0
|
|
|
|
195,007
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|
Ron Smith, Ph.D.
|
|
|
80,000
|
|
|
|
120,007
|
|
|
|
0
|
|
|
|
200,007
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|
Umesh Padval
|
|
|
67,500
|
|
|
|
120,007
|
|
|
|
0
|
|
|
|
187,507
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|
Donald Schrock
|
|
|
65,000
|
|
|
|
120,007
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|
|
|
0
|
|
|
|
185,007
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|
Norman Taffe
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|
|
67,500
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|
|
|
120,007
|
|
|
|
0
|
|
|
|
187,507
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|
Jeffrey S. McCreary
|
|
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40,833
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|
|
|
0
|
|
|
|
0
|
|
|
|
40,833
|
|
(1)
|
Stock awards consist of restricted stock unit awards for 11,941 shares of the Companys common stock granted on November 15, 2013 under the
2004 Equity Plan. The amounts reported do not reflect compensation actually received by the director; instead, the amounts reported represent the grant date fair value of the restricted stock unit awards granted during fiscal 2014, calculated in
accordance with Statement of Financial Accounting Standard Board Accounting Standards Codification Topic 718, Stock Compensation, or ASC Topic 718. For a detailed discussion of the assumptions used to calculate the value of the
restricted stock unit awards, please refer to Note 9 of the Consolidated Financial Statements included
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12
|
in our Annual Report on Form 10-K for the fiscal year ended March 30,2014, filed with the SEC on May 28,2014. As of March 28,2014, each of the current directors held outstanding
restricted stock unit awards for an aggregate of 11,941 shares of the Companys common stock except for Mr. McCreary who did not receive the annual directors grant because he was serving in the role of Interim CEO at the time of issuance.
Mr. McCreary received a prorated annual directors grant of 7,772 shares of restricted stock unit awards on July 15, 2014.
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(2)
|
As of March 30,2014, Mr. Schofield held outstanding stock options to purchase an aggregate of 54,000 shares of the Companys common stock, Mr. Feld
held outstanding stock options to purchase an aggregate of 28,666 shares of the Companys common stock, Mr. McCreary held outstanding stock options to purchase an aggregate of 83,250 shares of the Companys common stock
Mr. Parnell held outstanding stock options to purchase an aggregate of 94,000 shares of the Companys common stock, Dr. Smith held outstanding stock options to purchase an aggregate of 64,000 shares of the Companys common stock,
Mr. Padval held outstanding stock options to purchase an aggregate of 20,000 shares of the Companys common stock, Mr. Schrock held outstanding stock options to purchase an aggregate of 74,000 shares of the Companys common
stock, and Mr. Taffe held outstanding stock options to purchase an aggregate of 40,000 shares of the Companys common stock.
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(3)
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The amounts reported do not represent compensation actually received by the director; instead, the amounts represent the grant date fair value of the stock options
granted during fiscal 2014 calculated in accordance with ASC Topic 718. For a detailed discussion of the assumptions used to calculate the value of the options, please refer to Note 9 of the Consolidated Financial Statements included in our Annual
Report on Form 10-K for the fiscal year ended March 30, 2014, filed with the SEC on May 28, 2014.
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13
PROPOSAL NO. 2
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER
COMPENSATION
In accordance with
Section 14A of the Exchange Act, the Company is providing stockholders an opportunity to cast a non-binding, advisory vote on the compensation of our NEOs (sometimes referred to as a Say-on-Pay vote). Accordingly, you have the
opportunity to vote For or Against or to Abstain from voting on the following non-binding resolution at the Annual Meeting:
Resolved, that the stockholders approve, on an advisory basis, the compensation of the Companys named executive officers as
disclosed in the Companys proxy statement for the 2014 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the accompanying compensation tables and the
related narrative disclosure in the proxy statement.
Strong Stockholder Support
At our annual meeting of our stockholders last fiscal year, our stockholders approved the compensation of our fiscal 2013 NEOs, with over
a 98% approval rating. The Compensation Committee believes that the strong support from our stockholders demonstrates that our executive compensation programs are designed appropriately to reward company and stock performance with responsible and
balanced incentives. The Compensation Committee is continuously working to ensure that managements interests are aligned with our stockholders interest to support long-term value creation.
In deciding how to vote on this proposal, you are encouraged
to read the Compensation Discussion and Analysis, the accompanying compensation tables and the related narrative disclosure. As described in detail in the Compensation Discussion and Analysis, our compensation programs are
designed to reward, motivate, attract and retain top talent by rewarding performance based upon achievement of pre-approved annual goals and objectives. A portion of each NEOs compensation is contingent upon overall corporate performance as
well as specific performance metrics particular to each NEOs position and consistent with the NEOs role on the management team. We believe that our compensation programs align the interests of our NEOs with that of our stockholders and
provide motivation for high performance levels from our NEOs.
Vote Required
Approval, on a non-binding, advisory basis, of the compensation of our NEOs, as disclosed in this Proxy Statement pursuant to the
compensation disclosure rules of the SEC, requires the affirmative vote of the majority of shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes
will be counted towards a quorum. Abstentions will have the same effect as an Against vote for purposes of determining whether this matter has been approved. Broker non-votes will not be counted for any purpose in determining whether
this matter has been approved.
While your vote on
this proposal is advisory and will not be binding on the Board of Directors, the Compensation Committee, the Company, and the Board of Directors value the opinions of the stockholders on executive compensation matters and will take into
consideration the outcome of the vote when making future executive compensation decisions, to the extent they can determine the cause or causes of any significant negative voting results. Unless the Board of Directors modifies its determination on
the frequency of future Say-On-Pay advisory votes, the next Say-On-Pay advisory vote will be held at the fiscal 2015 annual meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
THE APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN
THIS PROXY STATEMENT.
14
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors has appointed PricewaterhouseCoopers
LLP as the Companys independent registered public accounting firm for the fiscal year ending March 29, 2015, and the stockholders are being asked to ratify such selection. Stockholder ratification of the Companys independent
registered public accounting firm is not required by the Companys Bylaws or otherwise. However, the Board of Directors is submitting the selection of PricewaterhouseCoopers LLP to the stockholders for ratification as good corporate practice.
In the event the stockholders fail to ratify the appointment, the Audit Committee and the Board of Directors will consider the vote of the stockholders in making a decision whether to select another independent registered public accounting firm for
the subsequent fiscal year. Even if the selection is ratified, the Audit Committee and the Board of Directors in their discretion may direct the appointment of a different independent registered public accounting firm at any time if they determine
that such a change would be in the best interests of the Company and its stockholders.
PricewaterhouseCoopers LLP has been engaged as the Companys independent registered public accounting firm since 1993. Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to do so, and are expected to be available to respond to appropriate questions.
Fees Billed to Company
The aggregate fees incurred by the Company with PricewaterhouseCoopers LLP for the annual audit and other services for the fiscal years
ended March 30, 2014, and March 31, 2013, were as follows:
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Fiscal Year
2014
|
|
|
Fiscal Year
2013
|
|
Audit fees(1)
|
|
$
|
1,170,397
|
|
|
$
|
1,267,840
|
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Auditrelated fees(2)
|
|
|
6,000
|
|
|
|
185,000
|
|
Tax fees(3)
|
|
|
13,046
|
|
|
|
42,574
|
|
All other fees(4)
|
|
|
4,941
|
|
|
|
5,161
|
|
|
|
|
|
|
|
|
|
|
Total fees
|
|
$
|
1,194,384
|
|
|
$
|
1,500,575
|
|
|
|
|
|
|
|
|
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|
(1)
|
Represents audit and accounting advisory services for the Companys annual financial statements included in the Companys Annual Reports on Form 10-K,
for reviews of the financial statements included in the Companys Quarterly Reports on Form 10-Q, for the audit of the Companys internal control over financial reporting, as well as for statutory audit services which amounted to
$94,000 and $98,000 in the fiscal years ended March 30, 2014 and March 31, 2013, respectively.
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(2)
|
Consists primarily of services rendered in connection with the proposed merger with PLX Technology Inc.
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(3)
|
Consists of tax filing and tax-related compliance and other advisory services
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(4)
|
Consists primarily of consulting services including access to PricewaterhouseCoopers LLP accounting information databases. The Company incurred no financial information
systems design and implementation fees in the fiscal year ended March 31, 2013.
|
In accordance with the Audit Committee charter, the Audit Committees policy is to pre-approve all audit and non-audit services provided by the independent registered public accounting firm,
including the estimated fees and other terms of any such engagement. These services may include audit services, audit-related services, tax services and other services. The Audit Committee may elect to delegate pre-approval authority to one or more
designated committee members in accordance with its charter. The Audit Committee considers whether such audit or non-audit services are consistent with the SECs rules on auditor independence.
15
The Audit Committee approved the engagement of PricewaterhouseCoopers LLP pursuant to
established pre-approval policies and procedures. The Audit Committee has determined the rendering of non-audit services by PricewaterhouseCoopers LLP is compatible with maintaining the auditors independence. The Audit Committee pre-approved
all of the fees set forth in the table above for the fiscal years ended March 30, 2014 and March 31, 2013, respectively.
Vote Required
Ratification of the selection of PricewaterhouseCoopers LLP as the Companys independent registered public accounting firm requires
the affirmative vote of the majority of shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions and broker non-votes will be counted towards a quorum. Abstentions will
have the same effect as an Against vote for purposes of determining whether this matter has been approved. As this proposal is considered a routine matter, there will be no broker non-votes with respect to this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR
RATIFICATION OF SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of
June 30, 2014 (or as otherwise noted below), with respect to the beneficial ownership of the Companys common stock by: (a) each stockholder known by the Company to be the beneficial owner of more than five percent of the
Companys common stock; (b) each director and nominee; (c) each Named Executive Officer (as set forth below); and (d) all executive officers and directors as a group. As of June 30, 2014, the Company had 149,195,705 shares
of common stock outstanding.
SECURITY OWNERSHIP
|
|
|
|
|
|
|
|
|
Name and Address of Beneficial Owner
|
|
Shares
Beneficially Owned(1)
|
|
|
Percentage of
Beneficial Ownership(1)
|
|
5% Stockholders:
|
|
|
|
|
|
|
|
|
BlackRock Inc.(2)
40 East 52
nd
Street
New York, NY 10022
|
|
|
11,324,818
|
|
|
|
7.6
|
%
|
|
|
|
The Vanguard Group(3)
100 Vanguard Boulevard
Malvern, PA 19355
|
|
|
8,285,024
|
|
|
|
5.6
|
%
|
|
|
|
Non-Employee Directors:
|
|
|
|
|
|
|
|
|
John Schofield(4)
|
|
|
52,418
|
|
|
|
*
|
|
Norman Taffe(5)
|
|
|
18,333
|
|
|
|
*
|
|
Gordon Parnell(6)
|
|
|
119,352
|
|
|
|
*
|
|
Donald Schrock(7)
|
|
|
96,252
|
|
|
|
*
|
|
Ron Smith, Ph.D.(8)
|
|
|
91,901
|
|
|
|
*
|
|
Umesh Padval(9)
|
|
|
47,252
|
|
|
|
*
|
|
|
|
|
Named Executive Officers:
|
|
|
|
|
|
|
|
|
Jeffrey S. McCreary(10)
|
|
|
202,783
|
|
|
|
*
|
|
Theodore L. Tewksbury III, Ph.D.
|
|
|
|
|
|
|
|
|
Richard D. Crowley, Jr.(11)
|
|
|
4,236
|
|
|
|
*
|
|
Arman Naghavi(12)
|
|
|
555,922
|
|
|
|
*
|
|
Brian C. White(13)
|
|
|
37,804
|
|
|
|
*
|
|
Christian Kermarrec(14)
|
|
|
12,500
|
|
|
|
*
|
|
Gregory L. Waters(15)
|
|
|
100,625
|
|
|
|
*
|
|
Sean Fan(16)
|
|
|
123,051
|
|
|
|
*
|
|
All Executive Officers and Directors as a
Group (18 persons)(17)
|
|
|
1,704,528
|
|
|
|
1.1
|
%
|
*
|
Represents less than 1% of the issued and outstanding shares.
|
(1)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of
common stock subject to options and warrants which are currently exercisable, or will become exercisable within 60 days of June 30, 2014, are deemed outstanding for computing the percentage of the person or entity holding such securities but
are not outstanding for computing the percentage of any other person or entity. Except as indicated by footnote, and subject to the community property laws where applicable, to the Companys knowledge the persons named in the table above have
sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Unless otherwise indicated, the address for each person is the Companys address at 6024 Silver Creek Valley Road, San Jose, CA
95138.
|
(2)
|
Based solely on a Schedule 13G/A filed with the SEC on January 29, 2014 by BlackRock, Inc.
|
(3)
|
Based solely on a Schedule 13G/A filed with the SEC on February 11, 2014 by The Vanguard Group.
|
17
(4)
|
Represents 18,418 shares beneficially owned by Mr. Schofield and 34,000 shares subject to options exercisable within 60 days of June 30, 2014.
|
(5)
|
Represents 18,333 shares subject to options exercisable within 60 days of June 30, 2014.
|
(6)
|
Represents 40,352 shares beneficially owned by Mr. Parnell and 79,000 shares subject to options exercisable within 60 days of June 30, 2014.
|
(7)
|
Represents 22,252 shares beneficially owned by Mr. Schrock and 74,000 shares subject to options exercisable within 60 days of June 30, 2014.
|
(8)
|
Represents 31,252 shares beneficially owned by Dr. Smith, 6,649 shares beneficially owned by the Smith Family Trust and 54,000 shares subject to options
exercisable within 60 days of June 30, 2014.
|
(9)
|
Represents 27,252 shares beneficially owned by Mr. Padval and 20,000 shares subject to options exercisable within 60 days of June 30, 2014.
|
(10)
|
Represents 137,867 shares beneficially owned by Mr. McCreary and 64,916 shares subject to options exercisable within 60 days of June 30, 2014.
|
(11)
|
Represents 4,236 shares beneficially owned by Mr. Crowley.
|
(12)
|
Represents 55,298 shares beneficially owned by Mr. Naghavi and 500,624 shares subject to options exercisable within 60 days
|
(13)
|
Represents 9,204 shares beneficially owned by Mr. White and 28,600 shares subject to options exercisable within 60 days of June 30, 2014.
|
(14)
|
Represents 12,500 shares subject to options exercisable within 60 days of June 30, 2014.
|
(15)
|
Represents 100,625 shares beneficially owned by Mr. Waters.
|
(16)
|
Represents 4,614 shares beneficially owned by Mr. Fan and 118,437 shares subject to options exercisable within 60 days of June 30, 2014.
|
(17)
|
Includes 339,923 shares beneficially owned and 1,364,605 shares subject to options exercisable within 60 days of June 30, 2014.
|
Stock Ownership Guidelines
The Company maintains a policy establishing the following
mandatory stock ownership guidelines for its Chief Executive Officer, Chief Financial Officer, and member of its Board of Directors, as follows:
|
|
|
Chief Executive Officer
|
|
Value equal to 3.0 times annual base salary
|
Chief Financial Officer
|
|
Value equal to 0.5 times annual base salary
|
Board of Directors
|
|
Value equal to 3.0 times annual cash retainer
|
The foregoing mandatory
ownership amounts are to be achieved no later than five years after commencement of service in the designated position, or in the case of board members serving as of October 19, 2007, then five years from that date. The purpose of the mandatory
stock ownership guidelines is to give our top executives and board members a vested interest in the long term success of the Company.
18
EXECUTIVE OFFICERS
Our executive officers and their respective ages as of June 30, 2014 are as follows
|
|
|
|
|
|
|
Name
|
|
Age
|
|
|
Position
|
Gregory L. Waters
|
|
|
53
|
|
|
President and Chief Executive Officer
|
Brian C. White
|
|
|
49
|
|
|
Vice President, Chief Financial Officer
|
Sailesh Chittipeddi
|
|
|
51
|
|
|
Global Vice President of Operations and Chief Technical Officer
|
Mario Montana
|
|
|
52
|
|
|
Vice President, Chief Sales Officer
|
Sean Fan
|
|
|
48
|
|
|
Vice President and General Manager, Interface Connectivity Division
|
Arman Naghavi
|
|
|
51
|
|
|
Vice President and General Manager, Analog and Power Division
|
Louise Gaulin
|
|
|
48
|
|
|
Vice President and General Manager, Network Communications Division
|
Dave Shepard
|
|
|
53
|
|
|
Vice President and General Manager, Timing and RF Division
|
Christian Kermarrec
|
|
|
64
|
|
|
Vice President and General Manager, Timing and Synchronization Division
|
Graham Robertson
|
|
|
46
|
|
|
Vice President, Corporate Marketing
|
Anja Hamilton
|
|
|
43
|
|
|
Vice President, Global Human Resources
|
Matthew D. Brandalise
|
|
|
49
|
|
|
Vice President, General Counsel and Corporate Secretary
|
Mr. Waters joined the
Company as President and Chief Executive Officer in January 2014 and was appointed to the Board of Directors at the same time. Prior to joining IDT, Mr. Waters served as Senior Vice President and General Manager, Front-End Solutions at Skyworks
Solutions, Inc. (Skyworks), a semiconductor company, from 2006 until December 2012. From 2003 to 2006, he served in various positions at Skyworks, including Executive Vice President beginning in 2005, Vice President and General Manager,
Cellular Systems beginning in 2004 and Vice President, Linear Products beginning in 2003. From 2001 until 2003, Mr. Waters served as Senior Vice President of Strategy and Business Development at Agere Systems Inc. (Agere) and,
beginning in 1998, held positions at Agere as Vice President of the Wireless Communications business and Vice President of the Broadband Communications business. Prior to working at Agere, Mr. Waters held a variety of senior management
positions at Texas Instruments Inc., including Director of Network Access Products and Director of North American Sales. Mr. Waters holds a B.S. of Engineering from the University of Vermont and an M.S. in Computer Science from Northeastern
University.
Mr. White was promoted to the
position of Vice President and Chief Financial Officer in September 2013. Mr. White joined the Company as Vice President, Finance in February 2007 and became Vice President, Finance and Treasurer of the Company in April 2009. From June 2008 to
October 2008, he served as the Companys interim CFO. Prior to joining the Company, Mr. White held management positions with Nvidia, Hitachi GST and IBM. He started his career in public accounting with Deloitte & Touche and Arthur
Andersen. Mr. White has over 25 years of professional experience in finance, accounting, business line management, strategy and business development. Mr. White is a CPA and holds an M.B.A. from the University of Notre Dame.
Dr. Chittipeddi joined IDT as Global Vice President of
Operations and Chief Technical Officer in March 2014. Prior to joining IDT, Dr. Chittipeddi served as President, Chief Executive Officer and a director of Conexant Systems, Inc. (Conexant), a semiconductor company, from April 2011
until July 2013 through its emergence from Chapter 11 reorganization. Prior to that, since 2006 he served in various positions at Conexant, including Chief Operating Officer and Chief Technology Officer. From 2001 until 2006, Dr. Chittipeddi
served as Head of Foundry Operations and additionally managed the joint venture Silicon Manufacturing Partners between Agere Systems (now Avago Technologies) and Chartered Semiconductor (now Global Foundries). Prior to that, he served in a variety
of positions at AT&T, SEMATECH and Lucent Technologies. Dr. Chittipeddi holds an M.B.A. from the University of Texas at Austin and an M.S. and a Ph.D. in Physics from The Ohio State University.
19
Mr. Montana joined IDT in 1997 and became Vice President, Chief Sales Officer in August
2013. Prior to his current role, Mr. Montana was various management positions with IDT including Vice President, General Manager, Enterprise Computing Division (formerly Serial Switching Division), Director, IDT Serial-Switching Division,
Director, IDT Strategic Marketing Group, and Product Line Director, IDT Telecommunications, FIFO, Logic and Timing groups, respectively.
Mr. Fan joined IDT in 1999 and became Vice President and General Manager, Interface Connectivity Division in August 2013. Prior to
his current position, Mr. Fan held various management roles at IDT, including Vice President IDT China, Vice President and General Manager of the Memory Interface Division, General Manager of Standard Product Operations, and Senior Director of
Silicon Timing Solutions. Prior to joining IDT, Mr. Fan served in various engineering and management roles with Lucent Microelectronics, Mitel Semiconductor, and the National Lab of Telecom Research in China. Mr. Fan holds a Master of
Science degree in Computer Engineering from University of Cincinnati, and a B.S. degree in Computer and Telecommunications from Beijing University of Posts and Telecommunications.
Mr. Naghavi joined IDT in 2009 and was appointed to his
current position in 2010. Prior to joining IDT Mr. Naghavi served as Vice President and General Manager of the Analog, Mixed-signal, and Power Division at Freescale Semiconductor. Prior to Freescale, Mr. Naghavi held various engineering
and management positions at Intersil Corporation and Analog Devices, Inc., both semiconductor companies.
Ms. Gaulin was promoted to the position of Vice President and General Manager of Network Communications in April 2014.
Ms. Gaulin joined IDT as Senior Director of Timing and Synchronization in November 2011. Prior to joining IDT, Ms. Gaulin was Vice President of Timing Marketing and Product Management at Zarlink Semiconductor. Prior to Zarlink,
Ms. Gaulin held various engineering and management roles at Mitel Semiconductor. Ms Gaulin has 20 years experience in the Communications Semiconductor market and she holds a Bachelor of Applied Science in Electrical Engineering from University
of Ottawa.
Mr. Shepard joined IDT as Vice
President and General Manager, Timing and RF Division, in May 2014. Prior to joining IDT, Mr. Shepard served as Vice President and General Manager, High Performance Solutions at Peregrine Semiconductor Corp. from 2010 to 2014. From 2003 to
2009, Mr. Shepard served as President and Chief Executive Officer of Sequoia Communications, Inc., a cellular RF transceiver startup. Prior to 2003, Mr. Shepard held a variety of senior management positions at Texas Instruments Inc.,
including General Manager of the Wireless Infrastructure Business. Mr. Shepard holds a B.A. in Physics from Lawrence University and a M.S. in Electrical Engineering from University of WisconsinMadison.
Mr. Kermarrec joined IDT in 2012 and became Vice
President and General Manager, TSD (Timing and Synchronization Division) in IDTs Communications Division. Prior to joining IDT, Mr. Kermarrec was corporate Vice President and President of MediaTeks wireless operations in the United
States and Europe, having joined MediaTek in 2008 through its acquisition of Analog Devices RF and Wireless Business Unit. Prior to joining Analog Devices, Mr. Kermarrec held various technical and management functions at M/A-COM and
Tachonics in the United States, Spar Aeroscape in Canada, and Philips and Alcatel in France. Mr. Kermarrec holds an M.S. in electrical engineering from the Conservatoire des Arts et Metiers (CNAM), France.
Mr. Robertson joined IDT in March 2010 as Vice
President, Corporate Marketing. Prior to joining IDT, Mr. Robertson served as Vice President of Global Marketing and Corporate Communications at International Rectifier. Prior to International Rectifier, Mr. Robertson held sales and
marketing communications positions at Future Electronics, and other senior marketing positions within various marketing and promotion solutions organizations in Europe. Mr. Robertson earned his Master of Business Administration degree from
Edinburghs Heriot Watt University and a Master of Science degree in Marketing from the University of Glamorgan South Wales, United Kingdom. He is currently completing his Doctorate degree in Business from Heriot Watt University.
20
Ms. Hamilton joined IDT in February 2011, and became VP, Global Human Resources in
October 2012. Prior to her current role, Ms. Hamilton was the Sr. Director, Global Compensation and HRIS. Prior to joining IDT Ms. Hamilton held various compensation management positions at Atmel, eBay and Electronic Arts.
Ms. Hamilton has over 21 years of business management experience, with over 15 of those in human resources. Ms. Hamilton received her business education in Germany, and holds several certifications in Human Resource Management.
Mr. Brandalise joined IDT in May 2000 and was promoted
to General Counsel in October 2012. Prior to his current role, Mr. Brandalise served as Senior Director and Director in IDTs Legal Department. Mr. Brandalise has also held corporate counsel and senior corporate counsel positions in
the IDT Legal Department. Mr. Brandalise joined IDT with 8 years of law firm experience in the areas of commercial litigation and commercial transactions.
21
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes our
compensation philosophy and programs, compensation decisions made under those programs and factors considered in making these decisions for our current named executive officers who, for fiscal year 2014, were:
|
|
|
Gregory L. Waters
|
|
President and Chief Executive Officer beginning January 6, 2014
|
Brian C. White
|
|
Vice President and Chief Financial Officer beginning September 11, 2013
|
Sean Fan
|
|
Vice President and General Manager, Interface and Connectivity Division
|
Arman Naghavi
|
|
Vice President and General Manager, Analog Power Division
|
Christian Kermarrec
|
|
Vice President and General Manager, Timing and Synchronization Division
|
Under applicable SEC rules,
our named executive officers for fiscal year 2014 also include the following former executive officers: Dr. Theodore L. Tewksbury III, Ph.D., former President and Chief Executive Officer, Jeffrey S. McCreary, Former Interim President and
Chief Executive Officer, and Richard Crowley, Jr., former Senior Vice President and Chief Financial Officer.
Details regarding compensation for our current and former named executive officers are included in the Summary Compensation Table below.
As noted above, we refer to each of the above
current and former named executive officers collectively in this Compensation Discussion and Analysis as the NEOs, and to the Compensation Committee of the Board of Directors as the Committee.
Company and Compensation Overview
Fiscal 2014 Business Highlights
Fiscal year 2014 brought significant developments to IDT,
including significant changes in our executive leadership. We set off the year with a strong focus on stabilizing our business, both financially and operationally. We increased our focus on cost controls and operating margin expansion. This fiscal
year marked a breakthrough for IDT on many levels. We successfully transformed IDT into a company that generates earnings power. Further, to prepare and support our future growth, we made significant progress in strengthening our balance sheet. The
following highlights many of the business achievements IDT announced:
|
|
|
Decision to divest High Speed Data Converter business to strengthen our focus on our analog-intensive mixed-signal, timing and synchronization, and
interface and connectivity solutions.
|
|
|
|
Sale of certain assets of PCI Express Enterprise Controller Business to PMC-Sierra for $96.1 million in an all-cash transaction.
|
POWER
|
|
|
A cross-platform power management solution system-validated by Intel, for Intel
®
Atom processors, Intel
Xeon
®
processors and Intel Core processors. IDTs innovative distributed power solution offers
tremendous flexibility for point-of-load regulation, circuit board routing, and thermal distribution.
|
|
|
|
A new family of ultra-compact wireless power receivers offering a board area footprint reduction up to 70% compared to switching regulator-based
solutions. The latest Wireless Power Consortiums (WPC) and Power Matters Alliance (PMA)-compliant devices expand IDTs industry-leading wireless power portfolio to address densely populated, cost-sensitive portable applications.
|
|
|
|
The industrys first dual-mode wireless power receiver compatible with both the WPC 1.1 standard, as well as the PMA 1.1 standard. The innovative
solution enables OEMs to use a single wireless power receiver IC to develop mobile devices fully compatible with the latest versions of both Qi and PMA charging bases.
|
22
|
|
|
The industrys first single-chip 5V Wireless Power Transmitter Solution. This highly-integrated solution enables development of Qi-compliant
USB-powered wireless charging bases with 75% fewer ICs than competing solutions.
|
TIMING
|
|
|
The VersaClock 5 family of programmable clock generators, offering the best-in-class, complete clock tree solution for cost-sensitive, low-power
consumer and low-jitter communication timing applications.
|
|
|
|
The industrys first Ethernet and IEEE 1588 timing devices optimized for smart grid and industrial automation applications. The new low-jitter
timing products improve the accuracy and reliability of IEEE 1588 time transport and offer important flexibility with an integrated Ethernet digital PLL (DPLL) and digitally-controlled oscillator (DCO) in a single chip.
|
|
|
|
Low-power LVDS clock fanout buffers offering 60% power savings versus competitive offerings. IDTs latest differential fanout buffer family
operates at 1.8V with comparable AC performance to 3.3V versions, for high- performance communication, computing, and networking applications.
|
|
|
|
The worlds first JESD204B clock buffer for 2G, 3G and 4G LTE wireless infrastructure systems. The low-noise, configurable, JESD204B fanout buffer
distributes high-quality clock signals to data converters in wireless base stations for optimal system performance and cost efficiency.
|
|
|
|
The new Timing Commander Software Platform for simple configuration of complex clocking solutions. This innovative support tool expedites
development cycles by empowering customers to program sophisticated timing devices with an intuitive and flexible graphical user interface.
|
|
|
|
The third-generation high-performance, programmable Universal Frequency Translator for 100 Gbps interfaces. These latest devices are the
industrys only single-chip programmable solutions capable of generating eight different output frequencies with less than 300 femtoseconds jitter.
|
|
|
|
A low-noise timing chipset for wireless base station radio cards, offering engineers the tools needed to solve phase noise-related challenges and build
cutting-edge wireless systems.
|
|
|
|
The Worlds lowest jitter synchronous Ethernet single-chip timing solution that reduces jitter by over 50 percent versus competing solutions and
meets the industrys most stringent 10G or 40G Ethernet performance requirements.
|
|
|
|
Breakthrough timing architectures enabling the industrys lowest phase noise VCO and fractional output divider. The new designs empower customers
to solve phase noise-related challenges in high-performance communication and networking applications.
|
MEMORY AND LOGIC
|
|
|
The mass production of its JEDEC 1.0-compliant DDR4 chipsetalready validated by Intel
®
to meet the requirements of the future Intel Xeon processor E5-2600 v3 product familyfor use in RDIMMs and LRDIMMs.
|
RF
|
|
|
A high-performance pre-distortion demodulator for wireless base stations, further expanding IDTs Industry-leading RF Signal Chain Portfolio.
IDTs new integrated DPD demodulator improves system performance while reducing solution cost, physical size, and power consumption in wireless base stations.
|
23
INTERFACE AND CONNECTIVITY
|
|
|
IDT RapidIO
®
20 Gbps interconnect provides breakthrough performance in data center products based on a new RapidIO Trade Association specification. IDT serial RapidIO switches provide 100ns latency, energy efficiency, and multi-processor scalability for data
center and supercomputing analytics applications.
|
|
|
|
A
RapidIO
®
-based supercomputing and data center reference platform with 20 Gbps-per-port switching and Intel
processing. IDTs RapidIO switches provide low latency, energy efficiency, and multi-processor scalability for Data Center and Supercomputing Solutions.
|
|
|
|
The industrys first 16-lane, 8 GT/s PCI Express 3.0 signal-conditioning retimer. This latest retimer improves PCIe Gen 3 performance and
reliability by restoring signal quality across long or noisy connections in computing, storage and communication applications.
|
Executive Management Changes in Fiscal Year 2014 and Related Compensation Decisions:
|
|
|
Dr. Theodore L. Tewksbury resigned his position as our President and Chief Executive Officer on August 26, 2013
|
|
|
|
On August 26, 2013, following the resignation of Dr. Tewksbury, Mr. Jeffrey S. McCreary, who serves as a director on our Board, was
appointed Interim President and Chief Executive Officer.
|
|
|
|
Richard Crowley, Jr. resigned his position as Chief Financial Officer on September 11, 2013
|
|
|
|
On September 11, 2013, following the resignation of Mr. Crowley, Mr. Brian C. White was promoted to Vice President and Chief
Financial Officer.
|
|
|
|
Jeffrey S. McCreary resigned his position as Interim CEO on January 6, 2014 when Gregory L. Waters was appointed our President and Chief Executive
Officer. In the role of Interim CEO, Mr. McCreary received an annualized base salary of $600,018 and was eligible to receive an annual bonus pursuant to the terms of the Annual Incentive Plan (AIP) . As a result, Mr. McCreary received an
AIP payment in the amount of $191,777. This was a prorated payment based on the period he served in this position and was based on a target bonus of 115% of his base earnings. For his service in this capacity, Mr. McCreary also received 300,000
stock options and 120,000 restricted stock units, which vested monthly while in the role as Interim CEO. Subsequently, Mr. McCreary served five months as Interim CEO and received 31,250 stock options and 12,500 restricted stock units.
|
|
|
|
On December 17, 2013, we entered into an employment agreement with Mr. Gregory L. Waters in connection with his appointment as our
President and Chief Executive Officer, which provided for the following:
|
Salary and Bonus
.
Mr. Waters base salary was set at $550,000 and, beginning in fiscal year 2015, he is eligible to receive an annual bonus pursuant
to the terms of the AIP with a target of 105% of his base earnings.
Long Term Incentive Equity Awards.
Mr. Waters received a new hire grant comprising of 350,000 stock options, which will vest with respect to 25% of the total
number of shares on the first anniversary of the commencement of Mr. Waters employment with the remaining shares vesting on a monthly basis over the subsequent three years, subject to Mr. Waters continued service. In addition,
Mr. Waters was granted 100,000 restricted stock units, which vest in four equal installments on each anniversary of the commencement of Mr. Waters employment, subject to his continued service. Mr. Waters also received 300,000
performance-based restricted stock units, which were granted on June 15, 2014, following the Committees approval of performance goals measured based on the achievement of a set Relative Total Shareholder Return (TSR) goal against the
Philadelphia Semiconductor Index. The performance period under this plan will be all of fiscal year 2015 and fiscal year 2016. Vesting of any shares under this grant are contingent on the achievement of these metrics and Mr. Waters
continued service with IDT.
24
The following graph illustrates the above referenced compensation offered to
Mr. Waters. As noted below, 75.8% of Mr. Waters compensation is at risk. This includes the performance grant that was issued in fiscal 2015.
Executive Compensation Structure
We design, develop, manufacture, and market
a broad range of low-power, high-performance mixed signal semiconductor solutions for the advanced communications, computing, and consumer industries. To compete in this dynamic industry, our executive compensation programs are designed to provide
competitive compensation opportunities that reward, motivate, attract, and retain top talent.
Our executive compensation programs are designed to reward performance based upon the actual achievement of annual goals and objectives established by the Committee at the beginning of each fiscal year,
and link the priorities and performance of the executives to the attainment and furtherance of long-term business strategies, and with the interest of stockholders.
A significant portion of the compensation payable to the
executives is tied directly to the Companys financial performance, and accordingly, the compensation package for executives is designed to fluctuate with the financial performance of the Company as a whole. We have found this approach, which
emphasizes the creation of sustainable long-term stockholder value, ensures that our executives are rewarded for their efforts only to the extent that they have produced profitable operating results.
Our executive compensation program is designed to further
these principles in the following ways:
|
|
|
Base salaries, which comprise only a modest portion of each executives compensation package, generally target the median of the competitive
market for similarly situated companies;
|
|
|
|
A significant portion of each executives compensation package is comprised of short-term cash incentive compensation in the form of a performance
bonus, which is based on our ability to attain profitability goals reflected in our annual operating plan and each executive officers contributions toward that achievement; and
|
|
|
|
A substantial portion of each executive officers compensation package is comprised of long-term incentive compensation; in fiscal 2014 this was
delivered in the form of
|
|
|
|
stock options, the value of which is directly linked to the performance of the Companys common stock
|
|
|
|
performance stock units, the value of which is linked to the performance of company operating margin and/or revenue growth relative to peers.
|
The incentive compensation of
our NEOs is designed to enhance total shareholder return (TSR). We strive to continuously improve TSR and, therefore, align short-term compensation with short-term performance and
25
long-term compensation with long-term performance and return. The link between the compensation of our CEO and TSR is disclosed in the following graph, which shows how both total compensation and
incentive compensation for our CEO has fluctuated over the past five years with the Companys five-year TSR:
(1)
|
The above chart illustrates CEO Total Pay and CEO Incentive Cash for Dr. Tewksbury, our former CEO, for fiscal 2010, 2011, 2012 and 2013. Fiscal year 2014 is
comprised of CEO Total Pay and CEO Incentive Cash for Dr. Tewksbury, who resigned on August 26, 2013, Mr. McCreary, who served as Interim CEO from August 26, 2013 through January 6, 2014, and Mr. Waters as the active
CEO from January 6, 2014 through the close of fiscal 2014.
|
(2)
|
CEO Total Pay includes salary earned , actual cash bonuses paid and the in-the-money value of the equity awards issued during each fiscal year; the grant
value excludes shares forfeited at the time of termination for Dr. Tewksbury and Mr. McCreary. The equity value for Dr. Tewksbury and Mr. McCreary is based on the total number of shares issued in each fiscal year, less the shares
forfeited at the time of termination, and based on the Companys common stock price on their date of termination. Dr. Tewksburys grant value is based on the share price of our common stock on August 26, 2013 of $8.71.
Mr. McCrearys grant value is based on the share price of our common stock on January 6, 2014 of $9.87. The equity value for Mr. Waters assumes equity awards are 100% vested upon grant, even though such awards vest over a 4-year
period, the value is based on the closing price of our common stock on March 28, 2014 of $11.94. CEO Total Pay also includes all other compensation paid as reported in the Summary Compensation Table below.
|
(3)
|
In fiscal years 2010 through 2014, the CEO Incentive Cash includes the actual cash bonuses paid in each fiscal year. In fiscal 2014 the amounts reflected include
actual cash bonus paid to each incumbent CEO (Dr. Tewksbury and Mr. McCreary). Because Mr. Waters was hired in the fourth quarter of the fiscal year, he was ineligible to receive a bonus payment.
|
26
(4)
|
Our fiscal year ends on a different day each year because our fiscal year ends at midnight on the Sunday nearest to March 31 of each calendar year. However, for
convenience, the TSR and equity calculations in the above chart are based on a March 31 fiscal year end.
|
We endeavor to maintain good corporate governance standards in designing and administering our executive compensation policies and
practices, as highlighted by the following:
|
|
|
Our change in control agreements with the NEOs contain double trigger provisions;
|
|
|
|
We award long-term incentive compensation to our executive officers in the form of stock options and performance-based restricted stock, which we
believe create a significant pay-for-performance connection for our executive officers since a significant portion of their net worth is dependent on long-term performance of the market price of the Companys common stock as well as
specifically defined financial goals that further our position in the market;
|
|
|
|
In fiscal 2015, we adopted a new performance plan which will be tied to relative total shareholder return;
|
|
|
|
We do not provide excise tax payments or gross-ups in the event of a change in control of the Company;
|
|
|
|
We only provide executive perquisites in very limited, individual circumstances;
|
|
|
|
We do not currently offer, nor do we have plans to provide, pension arrangements or retirement plans for our employees;
|
|
|
|
Our option plans specifically preclude the re-pricing of stock options and stock appreciation rights, absent stockholder approval;
|
|
|
|
We maintain mandatory stock ownership guidelines for our Chief Executive Officer, Chief Financial Officer, Chairman of the Board and other non-employee
directors;
|
|
|
|
For several years, we have separated the roles of Chairman of the Board of Directors and Chief Executive Officer; and
|
|
|
|
The Committee has engaged its own independent compensation consultant that does not provide any services to the Company and has no prior relationship
with any of the NEOs;
|
|
|
|
The Company has a recoupment policy, under which the Company may recoup performance based compensation paid to any of the NEOs in the event of a
restatement of financial earnings.
|
Compensation Philosophy and Objectives
Our executive compensation programs are designed to:
|
|
|
provide competitive compensation opportunities that reward, motivate, attract, and retain top talent;
|
|
|
|
reward performance based upon the actual achievement of annual goals and objectives established by the Committee at the beginning of each fiscal year;
and
|
|
|
|
link the priorities and performance of the executives to the attainment and furtherance of long-term business strategies, and with the interest of
stockholders.
|
The Committee
believes that a significant portion of compensation payable to NEOs should be tied directly to the Companys financial performance. Accordingly, the compensation package for our NEOs is designed to fluctuate with the financial performance of
the Company as a whole. During years when the Companys performance experiences a downturn, NEO compensation will be lower; likewise, during years where the Company experiences increased revenues and profitability, NEO compensation is designed
to increase. The Committee feels this compensation philosophy aligns the interests of our NEOs with that of our stockholders and provides motivation for high performance levels from our NEOs.
In fiscal 2014, important factors driving our Companys financial performance that were identified in the
setting and awarding of short-term compensation include:
27
|
|
|
improved operating margin;
|
|
|
|
new product development; and
|
|
|
|
operational excellence.
|
The Committee identified these priorities for our 2014 incentive program given their importance in driving increased value for our
stockholders and because these are areas over which management can exert the greatest amount of control, thus increasing the potential for immediate and long term profitability.
Setting Executive Target Compensation
During fiscal 2014, the Committee
retained Radford, an AON Hewitt Company, as its independent compensation consultant on all matters related to the compensation of NEOs and other senior executives. Radford reports to the Committee and the Committee reviews and evaluates
Radfords performance and compensation. Radford does not provide any other consulting services to the Company outside of its compensation consulting services to the Committee. Independent of its consulting services, the Company subscribes to
and participates in Radfords Global Sales and Technology Compensation Surveys. Radford provides strategic guidance to the Committee by leveraging its extensive database and significant industry expertise. As requested by the Committee, Radford
provided the Committee with comparative market data on industry best practices and data related to our NEOs and senior executives. For the compensation evaluation, in addition to publicly available data for our peers, Radford also relied on its 2013
Radford Global Technology Survey
(1)
.
The Committee used data compiled by Radford to compare our
NEOs compensation with the compensation of executive officers at comparable companies in the semiconductor industry. The Committee, after consultation with management and Radford, established a specific group of peer companies to assist in the
assessment of job levels and compensation programs and practices. In defining an appropriate peer group for purposes of comparing compensation data, consideration was given to the following factors:
|
|
|
companies with whom the Company competes for business and executive talent in the semiconductor industry;
|
|
|
|
companies with revenues generally between $300 million and $1.2 billion reflecting businesses of similar scope and complexity;
|
|
|
|
companies with market capitalization generally between $500 million and $3 billion reflecting businesses of similar maturity; and
|
|
|
|
companies with 1,000 to 4,000 employees reflecting a similar organizational complexity and scale.
|
Based on these factors, the Committee reviewed and revised
our list of peers from fiscal year 2013 (fiscal 2013). In fiscal 2014 the Committee added Hittite Microwave and removed Skyworks Solutions to help balance our peer group with respect to revenue and market capitalization. As a result the
following companies (collectively, the Peer Group) were included in the compensation analysis for fiscal 2014:
|
|
|
|
|
Cypress Semiconductor
|
|
Ixys
|
|
Power Integrations
|
Cirrus Logic
|
|
Micrel
|
|
RF Micro Devices
|
Fairchild Semiconductor
|
|
Microsemi
|
|
Semtech
|
Hittite Microwave
|
|
Monolithic Power System
|
|
Silicon Laboratories
|
International Rectifier
|
|
OmniVision Technologies
|
|
Triquint
|
Intersil
|
|
PMC-Sierra
|
|
|
(1)
|
The survey encompasses seventeen Peer Group members, public semiconductor/capital equipment companies and public high technology companies all with
revenues between $300 million and $1 billion.
|
28
At the beginning of fiscal 2014, as requested by the Committee, Radford presented the
Committee with Peer Group and broader market survey data related to the compensation of executives holding positions comparable to the positions of each of our NEOs employed by the Company at that time, including data regarding base salaries,
performance bonuses and equity awards. In order to assist the Committee with evaluation of our NEOs compensation packages, 2013 Radford Global Technology Survey data was combined with proxy data, where sufficient proxy data was available, to
create a final market average which was used to assess compensation levels. Compensation data for NEOs who report to the CEO are reviewed by the Committee with the CEO and Radford. Data and criteria related to the CEOs compensation, including
peer group market data, are reviewed and evaluated only within the Committee and with Radford, and not with the CEO.
Our philosophy is to generally set our NEOs target pay levels close to the 50
th
percentile of market, with variations based on experience,
operational complexity, strategic impact and scope of position. The following table illustrates the market levels we target for each compensation component.
|
|
|
|
|
|
|
Base Salary
|
|
Target Total Cash (Base plus
Short-Term
Incentives)
|
|
Long-Term Incentives
|
|
Total Direct Compensation
|
50
th
Percentile
|
|
50
th
Percentile
|
|
50
th
Percentile
|
|
50
th
Percentile
|
Base
salaries and target performance bonuses (collectively, Total Cash Compensation) are determined upon offer of employment, and then on an annual basis thereafter at the beginning of each fiscal year. The Committee reviews market data
provided by Radford for Total Cash Compensation based on the Peer Group and broader market survey data at the
25
th
, 50
th
, and 75
th
percentiles. Total Cash Compensation is considered an important part of the executive compensation package in order to
remain competitive in attracting and retaining executive talent. Total Cash Compensation is designed to fluctuate with Company performance. In fiscal years when the Company exhibits superior financial performance, Total Cash Compensation is designed
to be above average competitive levels. When financial performance is below the targeted goal for a particular fiscal year, Total Cash Compensation is designed to be below average competitive levels. Both elements of Total Cash Compensation are
determined and reviewed against market references, in conjunction with the NEOs experience, performance, internal comparisons, and the positions operational complexity, strategic impact, and scope.
Total Cash Compensation in combination
with equity awards (collectively, Total Direct Compensation) is also reviewed at the 25
th
, 50
th
, and
75
th
percentiles of market based on the Peer Group and
broader market survey data provided by Radford. Equity awards are granted to the NEOs shortly after being hired or promoted and generally within approximately six weeks of the beginning of each fiscal year, and are the Companys only form of
long-term incentive compensation. Equity awards are determined based on experience, performance, current equity holdings, retention risk, internal comparisons, and the positions operational complexity, strategic impact, and scope in addition
to the Peer Group and broader market survey data provided by Radford.
Role of CEO in Compensation Decisions
The Companys CEO reviews and evaluates, as applicable, the other NEOs performance, expected future contributions, internal comparisons, and also considers the market survey data provided by
Radford in making recommendations to the Committee on the NEOs compensation. Any recommendations made by the CEO regarding the base salaries, bonuses and equity awards of the NEOs are subject to final review and approval of the Committee.
Individual Elements of NEO Compensation
Each NEO is compensated through base salary, a performance
bonus, equity awards, and participation in employee benefit plans.
29
Base Salary
Base salaries are reviewed and determined annually at the beginning of each fiscal year, based upon the criteria outlined above and a
review of the data referred to under Setting Executive Target Compensation.
At the beginning of fiscal 2014, the CEO reviewed NEO base salaries with the Committee. Commencing the review, it was determined that based on the market data and companys fiscal performance
following the close of fiscal year 2013, none of our named executive officers received merit increases. Mr. White received a salary increase in connection with his promotion to Chief Financial Officer.
Radford and the Committee reviewed CEO compensation against
the Peer Group and found that the base salary was at the Companys stated pay philosophy of targeting the 50th percentile. As a result, no base pay increase was given to the CEO in fiscal 2014.
The following table lists the fiscal year 2014 base salary
changes for our NEOs, the pay position relative to the Peer Group, and the decision factors for each increase, or lack of increase, as the case may be.
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
2014
Base
Salary
($)
|
|
|
2013 to 2014
Increase
(%)
|
|
|
Approximate Position of
2014 Base Salary
to
Peer Group
|
|
Decision Factors
|
Mr. Waters(1)
|
|
|
550,014
|
|
|
|
N/A
|
|
|
50
th
percentile
|
|
No increase based on time of hire and competitive market data.
|
|
|
|
|
|
Mr. White(2)
|
|
|
282,192
|
|
|
|
5.9
|
|
|
25
th
50
th
percentile
|
|
Promotional increase in recognition of new role as CFO.
|
|
|
|
|
|
Mr. Fan
|
|
|
280,800
|
|
|
|
0.0
|
|
|
50
th
percentile
|
|
No increase based on competitive market data and fiscal 2013 company performance.
|
|
|
|
|
|
Mr. Naghavi
|
|
|
309,026
|
|
|
|
0.0
|
|
|
50
th
75
th
percentile
|
|
No increase based on competitive market data and fiscal 2013 company performance.
|
|
|
|
|
|
Mr. Kermarrec
|
|
|
309,026
|
|
|
|
0.0
|
|
|
50
th
75
th
percentile
|
|
No increase based on competitive market data and fiscal 2013 company performance.
|
(1)
|
Mr. Waters commenced employment with IDT on January 6, 2014. Mr. Waters base salary for fiscal year 2014 was determined by the Committee in connection
with his new hire offer.
|
(2)
|
Mr. White was promoted to CFO on September 11, 2013. In connection with his promotion, he received a 5.9% increase which was based on market data through the
Radford 2013 Global Technology Survey.
|
In addition to the NEOs noted above, during fiscal 2014, we did not increase the base salaries of our former NEOs, Dr. Tewksbury and Mr. Crowley.
Performance Bonus
During fiscal 2014, the NEOs, other than Mr. Waters,
participated with other eligible employees in the Companys Annual Incentive Plan (AIP). The AIP was established to link compensation to financial performance by tying group goals and objectives of participating employees to the
Companys profitability. Through the AIP, a portion of an eligible employees total cash compensation opportunity is directly linked to the annual results of the performance of the group in which the employee works, the Company
performance, and the individuals performance.
30
The primary objectives of the AIP are to:
|
|
|
Encourage outstanding performance from individual employees, as well as collaboration and execution of business units and the Company as a whole;
|
|
|
|
Link a portion of employees pay to the financial performance of the business; and
|
|
|
|
Reflect the financial performance of the Company and the value delivered to Stockholders in its funding methodology.
|
The AIP payout is determined based on the individual bonus
target amount, the achievement of specific objectives for the fiscal year, and the plan funding. The AIPs two components, Individual and Group, measure and reward individual and division performance respectively. The weighting of each of these
two components depends on the level of responsibility toward divisional versus individual goals, with the highest level of responsibility toward divisional goals having the heaviest weighting of the Group component. The Group component for our NEOs
is weighted 100%.
The Group component payout is
determined based on the achievement of specific goals that are set at the beginning of the fiscal year, and approved by the Compensation Committee for the CEO. For the other NEOs, the goals are approved by the CEO.
The CEO goals established at the beginning of the fiscal year
for Dr. Tewksbury were the same goals that were assumed by the interim CEO incumbent Mr. McCreary and the CEO incumbent Mr. Waters.
In fiscal year 2014, we moved to an annual payment cycle; this change was effective immediately for all executives. Incentive payments
earned under the AIP are at the close of the fiscal year.
Plan Funding
The AIP plan is funded based on Non-GAAP Operating Margin achievement levels that are set based on a scale from 9% (threshold) to 25% (maximum). If the Companys actual Non-GAAP Operating Margin
achievement is below the threshold of 9%, the Annual Incentive Plan is not funded and no bonus is paid to any participant including the NEOs, regardless of individual or group performance. For fiscal 2014 the Non-GAAP Operating Margin achievement
scale was reviewed and approved by the Committee.
For fiscal 2014, the Committee established the following Non-GAAP Operating Margin achievement scale: 9%threshold funding equal to
25% of target, and 18%target funding equal to 100% of target.
31
The table below provides a reconciliation of our GAAP to Non-GAAP operating income. In the
third quarter of fiscal 2014, we pursued the divestiture of our high speed data converter business and classified the business as discontinued operations. For the purposes of determining the AIP bonus payout, the financial impact of discontinued
operations was excluded from the Non-GAAP financial results in the third and fourth quarters of fiscal 2014. As approved by the Committee, in fiscal 2014 the AIP was funded at 82.50% based on a Non-GAAP Operating Margin of 15.6%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6-month period ended
September 29, 2013
(in thousands $)(1)
|
|
|
6-month period ended
March 30,
2014,
continuing operations
(in thousands $)(2)
|
|
|
Fiscal year ended
March 30, 2014
(in thousands $)
|
|
GAAP Operating Income (loss)
|
|
|
(1,931
|
)
|
|
|
25,451
|
|
|
|
23,520
|
|
Acquisition related:
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of acquisition related intangibles
|
|
|
8,559
|
|
|
|
15,321
|
|
|
|
23,880
|
|
Impairment of in-process research and development
|
|
|
|
|
|
|
2,433
|
|
|
|
2,433
|
|
Acquisition related legal and consulting fees
|
|
|
1,001
|
|
|
|
94
|
|
|
|
1,095
|
|
Restructuring related:
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance and retention costs
|
|
|
5,673
|
|
|
|
783
|
|
|
|
6,456
|
|
Facility closure costs
|
|
|
21
|
|
|
|
113
|
|
|
|
134
|
|
Assets impairment and other
|
|
|
4,044
|
|
|
|
183
|
|
|
|
4,227
|
|
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense
|
|
|
7,478
|
|
|
|
5,537
|
|
|
|
13,015
|
|
Assets impairment & other
|
|
|
|
|
|
|
(114
|
)
|
|
|
(114
|
)
|
Compensation expensedeferred compensation plan
|
|
|
523
|
|
|
|
742
|
|
|
|
1,265
|
|
Non-GAAP Operating Income
|
|
|
25,368
|
|
|
|
50,543
|
|
|
|
75,911
|
|
Revenue
|
|
|
242,631
|
|
|
|
243,268
|
|
|
|
485,899
|
|
Operating Margin
|
|
|
|
|
|
|
|
|
|
|
15.6
|
%
|
(1)
|
Derived from Non-GAAP financial results for the six month period ended September 29, 2013 as furnished on
Form 8-K
on
October 28, 2013.
|
(2)
|
Derived from Non-GAAP financial results for the three months ended December 29, 2013 and March 30, 2014 as furnished on
Form 8-K
on February 3, 2014 and May 5, 2014, respectively.
|
Individual Incentive Targets
Each eligible employee, including the NEOs, is assigned an Individual Incentive Target based on a percentage of annual base salary. This
target is established in consideration of the employees job level, job role, job function, and competitive data provided by Radford, as well as accomplishments within the employees job level for employees who were employed by the Company
at the beginning of the fiscal year.
The
Individual Incentive Targets for the NEOs are reviewed annually by the CEO and the Committee. Any adjustment made to the Individual Incentive Target for the NEOs other than the CEO is made at the recommendation of the CEO and is subject to the final
review and approval of the Committee. Any adjustment made to the Individual Incentive Target for the CEO is made at the recommendation of the Committee and is subject to the final review and approval of the Board.
With the exception of Mr. White,
there were no changes made to any of the NEO incentive targets. The Committee approved the increase of Mr. Whites incentive target from 40% to 50% of base salary. This change was made in connection with his promotion to Chief Financial
Officer. While Mr. Whites base was between the 25
th
and 50
th
percentile, his target total cash was at the 50
th
percentile.
32
Group Achievement
The Committee approved annual goals and objectives for the CEO, and the CEO established annual goals and
objectives for the other executive officers at the beginning of fiscal 2014. As noted above under Performance Bonus, the Committee decided that while there were leadership changes, the previously established goals for the CEO and the
NEOs would not change. The achievement of these goals was measured at the end of fiscal 2014, and used as a basis for the AIP payout calculation. Our CEOs goal achievement was reviewed and approved by the Committee, and our NEOs achievement was
reviewed and approved by the CEO and the Committee at the end of fiscal 2014.
Group goals are established on a scale from 50% (threshold) to 125% (maximum). If the Group achievement is below the threshold of 50%, 0% of that goal is counted toward the final weighted score. The
annual goals and objectives and their achievement for the CEO and NEOs are presented in the following tables.
While the annual goals for each of the NEOs are specific and measurable, at the end of the fiscal year, the CEO may exercise negative
discretion in changing the group component score due to issues related to unforeseen performance issues. Such discretion could have a direct impact on an NEOs bonus payout.
The following tables list the 2014 goals and objectives for
each of our NEOs. Certain targets under the Group Component, which is comprised of internal business-unit performance targets established by the Company, represent confidential information, the disclosure of which would cause competitive harm to the
Company. The Company transacts business in the highly competitive semiconductor industry, and disclosure of the forward-looking targets and product-specific business-unit targets would cause substantial economic harm to the Company and, as a result,
place the Company in a competitively disadvantageous position.
This information would provide competitors insight into the internal goals of the Companys various business units and allow them to more effectively glean specific business unit strategies and
adjust their own operational objectives or take other competitive measures, such as modifying the timing of competing product launches or commercialization strategies, or instituting particular sales or marketing programs, in each case which could
hinder, delay or frustrate the achievement of the Companys strategic objectives for its business units. Moreover, this competitive advantage would be significantly magnified in this instance, as similar information is not available to the
Company regarding its major competitors and such business unit performance is not otherwise made available to the public.
Dr. Theodore L. Tewksbury III (former President and Chief Executive Officer), Jeffrey S. McCreary (Interim Chief Executive Officer), (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Group Performance Metrics
|
|
Actual
|
|
Actual
Score
|
|
|
Weight
|
|
|
Weighted
Score
|
|
Revenue: Grow FY14 total revenue to $500M
|
|
$485.9M
|
|
|
82.4
|
%
|
|
|
20.0
|
%
|
|
|
16.4
|
%
|
|
|
|
|
|
Revenue: Grow New Product Revenue to $116M
|
|
$108.2M
|
|
|
83.4
|
%
|
|
|
10.0
|
%
|
|
|
8.4
|
%
|
|
|
|
|
|
Profitability: Achieve 14% Non GAAP Operating Margin for FY14(2)
|
|
15.6%
|
|
|
120.0
|
%
|
|
|
20.0
|
%
|
|
|
24.0
|
%
|
|
|
|
|
|
Profitability: Exit FY14 at 20% Non GAAP Operating Margin (Q4 FY14)(2)
|
|
19.5%
|
|
|
93.8
|
%
|
|
|
20.0
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
New Product Introductions: Introduce 30 new products
|
|
28
|
|
|
75.0
|
%
|
|
|
10.0
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
Win 3 out of 5 Strategic Design Wins
|
|
2
|
|
|
75.0
|
%
|
|
|
10.0
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
Strategic Initiatives: Complete planned acquisition and divestiture actions to achieve Op Margin targets
|
|
partially
achieved
|
|
|
96.0
|
%
|
|
|
10.0
|
%
|
|
|
9.6
|
%
|
Group Achievement Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
92.2
|
%
|
33
(1)
|
As decided by the Committee, the performance metrics established at the beginning of the fiscal year would remain a priority through the entire year regardless of the
incumbent CEO. Under the terms of their agreements, Dr. Tewksbury and Mr. McCreary were eligible to receive AIP payments. The actual payments are calculated as outlined under the Calculation of Performance Bonus section. The
calculated payout for Dr. Tewksbury was $524,864. The calculated payout for Mr. McCreary was $191,777. Because Mr. Waters began his employment with the Company in the fourth quarter of the fiscal year, he was ineligible to receive a
bonus payout for fiscal 2014.
|
(2)
|
A reconciliation of GAAP to non-GAAP Operating Income is listed under the section Plan Funding. Additionally, the operating margin achievement for the CEO
excludes the cost of our fiscal 2014 AIP.
|
Richard Crowley, Jr
(1)
and Brian White (Vice President and
Chief Financial Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Group Performance Metrics
|
|
Actual
|
|
Actual
Score
|
|
|
Weight
|
|
|
Weighted
Score
|
|
Revenue: Grow FY14 revenue to $500M
|
|
$485.9M
|
|
|
82.4
|
%
|
|
|
25.0
|
%
|
|
|
20.6
|
%
|
|
|
|
|
|
Profitability: Achieve 14% Non-GAAP Operating Margin for
FY14
(2)
|
|
15.6%
|
|
|
120.0
|
%
|
|
|
25.0
|
%
|
|
|
30.0
|
%
|
|
|
|
|
|
Strategic Initiatives:
- Complete planned acquisition and divestiture actions to achieve Op Margin targets
- Manage integration of acquired businesses or transition of divested businesses
|
|
achieved
|
|
|
105.0
|
%
|
|
|
20.0
|
%
|
|
|
21.1
|
%
|
|
|
|
|
|
Capital Structure & Shareholder Value Creation:
- Execute share repurchase
- Increase sell side coverage by at least two additional firms
- Rebalance investment portfolios to increase yield and add third investment portfolio manager
- Manage TECS structure
- Distribute earnings and profits from Japan to IDT US
|
|
exceeded
|
|
|
115.0
|
%
|
|
|
10.0
|
%
|
|
|
11.5
|
%
|
|
|
|
|
|
Profitability and Productivity:
- Manage operating expense to annual operating plan
- Execute cost reductions to achieve spending budget targets
- Finalize implementation of new costing system
- Revise and implement new processes and procedures and resource audit requirements
- Evaluate and implement opportunities to improve FY14 profitability
- Complete documentation to support IDT Malaysias participation in 100% offshore sales
- Integrate PO based invoices into new system, to enable a streamlined process
|
|
partially achieved
|
|
|
96.0
|
%
|
|
|
10.0
|
%
|
|
|
9.6
|
%
|
|
|
|
|
|
Information Technology:
- Complete several business application software upgrade projects
- Implement several specified new IT business systems applications and enhancements
|
|
achieved
|
|
|
100.0
|
%
|
|
|
10.0
|
%
|
|
|
10.0
|
%
|
|
|
|
|
|
Achievement Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
102.7
|
%
|
(1)
|
Mr. Crowley resigned his position as Sr. Vice President and Chief Financial Officer on September 11, 2013. In accordance with the terms of the Annual
Incentive Plan, an executive must be employed to receive any earned payments under the plan; therefore, Mr. Crowley was ineligible to receive a payment.
|
(2)
|
A reconciliation of GAAP to non-GAAP Operating Income is listed under the section Plan Funding. Additionally, the operating margin achievement for the CFO
excludes the cost of our fiscal 2014 AIP.
|
34
Sean Fan (Vice President and General Manager, Interface and Connectivity Division)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Group Performance Metrics
|
|
Actual
|
|
Actual
Score
|
|
|
Weight
|
|
|
Weighted
Score
|
|
Revenue: Achieve Revenue Target for Interface and Connectivity Division
|
|
achieved
|
|
|
100.0
|
%
|
|
|
15.0
|
%
|
|
|
15.0
|
%
|
|
|
|
|
|
Profitability: Achieve Operating Income Target for Interface and Connectivity Division
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
15.0
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
Win 4 Strategic Design Wins
|
|
5
|
|
|
125.0
|
%
|
|
|
20.0
|
%
|
|
|
25.0
|
%
|
|
|
|
|
|
New Products: Introduce 6 new products
|
|
6
|
|
|
100.0
|
%
|
|
|
15.0
|
%
|
|
|
15.0
|
%
|
|
|
|
|
|
New Products: Launch 1 new project into design
|
|
3
|
|
|
125.0
|
%
|
|
|
15.0
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
Strategic Initiatives: Achieve targeted key development milestones to enhance product portfolio and drive higher
revenues
|
|
achieved
|
|
|
100.0
|
%
|
|
|
10.0
|
%
|
|
|
10.0
|
%
|
|
|
|
|
|
Improve Product Quality, measured through Customer Quality Index (meet target quality issues reported by
customer)
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
10.0
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
Achievement Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
115.0
|
%
|
Arman Naghavi (Vice President and General
Manager, Analog and Power Division)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Group Performance Metrics
|
|
Actual
|
|
Actual
Score
|
|
|
Weight
|
|
|
Weighted
Score
|
|
Revenue: Achieve Revenue Target for Analog and Power Division
|
|
partially achieved
|
|
|
50.0
|
%
|
|
|
15.0
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
Profitability: Manage R&D expenses within approved AOP for Analog and Power Division
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
15.0
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
Win 4 Strategic Design Wins
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
20.0
|
%
|
|
|
25.0
|
%
|
|
|
|
|
|
New Products: Introduce 15 new products
|
|
15
|
|
|
100.0
|
%
|
|
|
15.0
|
%
|
|
|
15.0
|
%
|
|
|
|
|
|
New Products: Launch 10 new projects into design
|
|
14
|
|
|
125.0
|
%
|
|
|
15.0
|
%
|
|
|
18.8
|
%
|
|
|
|
|
|
Strategic Initiatives: Achieve targeted key development milestones to enhance product portfolio and drive higher
revenues
|
|
partially achieved
|
|
|
97.2
|
%
|
|
|
10.0
|
%
|
|
|
9.7
|
%
|
|
|
|
|
|
Improve Product Quality, measured through Customer Quality Index (meet target quality issues reported by
customer)
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
10.0
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
Achievement Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
107.2
|
%
|
35
Christian Kermarrec (Vice President and General Manager, Timing and Synchronization Division)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Group Performance Metrics
|
|
Actual
|
|
Actual
Score
|
|
|
Weight
|
|
|
Weighted
Score
|
|
Revenue: Achieve Revenue Target for Timing and Synchronization Division
|
|
partially achieved
|
|
|
75.0
|
%
|
|
|
15.0
|
%
|
|
|
11.3
|
%
|
|
|
|
|
|
Profitability: Achieve Operating Income Target for Timing and Synchronization Division
|
|
partially achieved
|
|
|
75.0
|
%
|
|
|
15.0
|
%
|
|
|
11.3
|
%
|
|
|
|
|
|
Win 4 Strategic Design Wins
|
|
5
|
|
|
125.0
|
%
|
|
|
20.0
|
%
|
|
|
25.0
|
%
|
|
|
|
|
|
New Products: Introduce 16 new products
|
|
7
|
|
|
0.0
|
%
|
|
|
15.0
|
%
|
|
|
0.0
|
%
|
|
|
|
|
|
New Products: Launch 18 new projects into design
|
|
12
|
|
|
50.0
|
%
|
|
|
15.0
|
%
|
|
|
7.5
|
%
|
|
|
|
|
|
Strategic Initiatives: Achieve targeted key development milestones to enhance product portfolio and drive higher
revenues
|
|
partially achieved
|
|
|
89.0
|
%
|
|
|
10.0
|
%
|
|
|
8.9
|
%
|
|
|
|
|
|
Improve Product Quality, measured through Customer Quality Index (meet target quality issues reported by
customer)
|
|
exceeded
|
|
|
125.0
|
%
|
|
|
10.0
|
%
|
|
|
12.5
|
%
|
|
|
|
|
|
Achievement Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
76.4
|
%
|
Calculation of Performance
Bonus
The AIP payout for each NEO is
calculated based on each NEOs fiscal 2014 base earnings, individual incentive target, Group achievement, and AIP funding, using the following calculation.
Total Payout =
(Actual Fiscal 2014 Base Earnings x Individual Incentive Target x Actual Fiscal 2014 Group Achievement x Fiscal 2014 Funding Factor)
Group goals require a 50% achievement each to
count toward the final weighted score. No awards are paid out if the plan is not at least funded at 25% of our Target Non-GAAP Operating Margin. Target awards are set at levels difficult to attain, as a means of continually managing our organization
to performance above previous years. Maximum award targets reflect very ambitious goals, which can only be attained when business results are exceptional, thus justifying higher award payments. To date, none of the NEOs have earned a bonus award
based on an achievement of maximum performance levels under our AIP.
Discretionary Bonus
Fiscal year 2014 was a transformative year for IDT; the company was able to make notable achievements despite the changes in the leadership team. In recognition of those achievements, the Committee
approved a one-time discretionary bonus pool in the amount of $1 million dollars. All active and eligible AIP participants, including the active NEOs, received the discretionary component which was applied to the total payout amount. This resulted
in a 10% discretionary component, for all active and eligible AIP participants, which was calculated as follows.
Discretionary Bonus Payout = Total Payout x 10%
The Compensation Committee approved the following achievements and AIP payouts for fiscal 2014.
36
Performance Bonus Payments Earned in Fiscal 2014
Performance Bonus Threshold, Target, Maximum, and Actual Payment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
FY2014 Target
Award (% of
Base Earnings)
|
|
|
FY2014
Payment
Threshold
Award
($)(1)(2)
|
|
|
FY2014
Payment Target
Award ($)(1)
|
|
|
FY2014
Payment
Maximum
Award
($)(1)(3)
|
|
|
FY2014 Actual
Award ($)
|
|
Mr. Waters
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. White
|
|
|
50
|
|
|
|
17,118
|
|
|
|
136,947
|
|
|
|
256,776
|
|
|
|
116,111
|
|
Mr. Fan
|
|
|
55
|
|
|
|
19,305
|
|
|
|
154,440
|
|
|
|
289,575
|
|
|
|
146,525
|
|
Mr. Naghavi
|
|
|
65
|
|
|
|
25,108
|
|
|
|
200,867
|
|
|
|
315,006
|
|
|
|
177,680
|
|
Mr. Kermarrec
|
|
|
55
|
|
|
|
21,000
|
|
|
|
168,003
|
|
|
|
315,006
|
|
|
|
105,892
|
|
Year-End 2014 Bonus Payment(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Actual
FY2014
Target
Award ($)
|
|
|
Actual
FY2014
Group
Achievement
(%)
|
|
|
Actual
FY2014
Funding
Factor
(%)
|
|
|
FY2014
Total
Payout
($)
|
|
|
Discretionary
Component
(%)
|
|
|
FY2014
Final
Payout ($)
|
|
|
Percent of
Target
(%)
|
|
Mr. Waters(4)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. White
|
|
|
136,947
|
|
|
|
102.77
|
|
|
|
82.50
|
|
|
|
116,111
|
|
|
|
10.00
|
|
|
|
127,722
|
|
|
|
93.26
|
|
Mr. Fan
|
|
|
154,440
|
|
|
|
115.00
|
|
|
|
82.50
|
|
|
|
146,525
|
|
|
|
10.00
|
|
|
|
161,177
|
|
|
|
104.36
|
|
Mr. Naghavi
|
|
|
200,867
|
|
|
|
107.22
|
|
|
|
82.50
|
|
|
|
177,680
|
|
|
|
10.00
|
|
|
|
195,448
|
|
|
|
97.30
|
|
Mr. Kermarrec
|
|
|
168,003
|
|
|
|
76.40
|
|
|
|
82.50
|
|
|
|
105,892
|
|
|
|
10.00
|
|
|
|
116,481
|
|
|
|
69.33
|
|
(1)
|
All payment calculations are calculated using the NEOs actual fiscal 2014 base earnings.
|
(2)
|
The amounts reported under the Payment Threshold column represent the minimum payment level at 50% group performance and 25% funding based on the minimum achievement of
non-GAAP Operating Margin.
|
(3)
|
The amounts reported in the Maximum column represent the maximum payment level at 125% group performance and 150% funding based on the maximum achievement of non-GAAP
Operating Margin.
|
(4)
|
In accordance with the terms of the Annual Incentive Plan, an executive must have been employee by IDT on or before December 29, 2013 in order to participate in
the Plan. As such, Mr. Waters did not receive a payment under the AIP plan.
|
(5)
|
Under the terms of their agreements, Dr. Tewksbury and Mr. McCreary were eligible to receive AIP payments; however, they were ineligible to receive the
Discretionary Component. The actual payments are calculated as outlined under the Calculation of Performance Bonus section. The calculated payout for Dr. Tewksbury was $524,864. The calculated payout for Mr. McCreary was
$191,777.
|
Equity Awards for the NEOs in Fiscal
2014
Equity awards are reviewed and
determined annually at the beginning of each fiscal year, based upon the criteria outlined above and a review of the data referred to under Setting Executive Target Compensation.
The equity compensation for the NEOs in fiscal 2014 was granted in stock options, performance stock units and
in limited cases, restricted stock units.
Stock Options and Performance Stock Units
The emphasis on stock options at the upper levels of the Company is intended to place more of the executives total compensation at
risk and dependent upon the Companys stock performance, because all stock options are granted with an exercise price equal to the fair market value on the date of grant and as such, only have value if our stock price increases,
thus ensuring a strong alignment with stockholders.
37
Stock options generally expire seven years after the date of the grant. Our option plans
specifically preclude the re-pricing of stock options and stock appreciation rights, absent stockholder approval. Stock options granted by the Company have an exercise price equal to the closing price of our stock on the last trading day before the
grant date and typically vest over a four-year period based upon continued employment, with 25% vesting on the first anniversary of the grant date and the remainder vesting monthly thereafter for the remaining 36 months.
The following table sets forth a comparison to benchmark data
of the option, RSU and PSU award, discussed more fully below, for each NEO, and the factors considered by the Committee in determining the respective award amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
FY2014
Option
Award
(#
of
Shares)
|
|
|
FY2014
RSU
Award
(#
of
Shares)
|
|
|
FY2014
PSU
Target
(#
of
Shares)
|
|
|
FY2014
Equity
Award
(in
thousand
$)(1)
|
|
|
Approximate Position
of Equity Award to
Peer Group(2)
|
|
Decision Factors
|
Mr. Waters(3)
|
|
|
350,000
|
|
|
|
100,000
|
|
|
|
N/A
|
|
|
|
2,223
|
|
|
50
th
percentile
|
|
Competitive market data
|
|
|
|
|
|
|
|
Mr. White(4)
|
|
|
17,000
|
|
|
|
15,000
|
|
|
|
10,000
|
|
|
|
206
|
|
|
50
th
percentile
|
|
Competitive market data, based
on Mr. Whites position at the
time of VP, Finance & Treasurer
|
|
|
|
|
|
|
|
Mr. Fan
|
|
|
90,000
|
|
|
|
N/A
|
|
|
|
30,000
|
|
|
|
448
|
|
|
50
th
percentile
|
|
Competitive market data, strategic
importance to the company
|
|
|
|
|
|
|
|
Mr. Naghavi
|
|
|
100,000
|
|
|
|
N/A
|
|
|
|
40,000
|
|
|
|
545
|
|
|
50
th
-75
th
percentile
|
|
Competitive market data, strategic
importance to the company
|
|
|
|
|
|
|
|
Mr. Kermarrec
|
|
|
100,000
|
|
|
|
N/A
|
|
|
|
40,000
|
|
|
|
545
|
|
|
50
th
- 75
th
percentile
|
|
Competitive market data, strategic
importance to the company
|
(1)
|
With the exception of Mr. Waters, the NEO Long-Term Incentive Value is calculated using the
Black-Scholes
methodology for
stock options and a 30-Day average stock price for restricted stock units. At the time of the equity decisions, Radford provided the company a Black-Scholes Value of $2.62 and a 30-Day average stock price of $7.08. The performance metrics for the
performance restricted stock units is measured based on specific Non-GAAP operating margin achievement, as described in detail under the Fiscal year 2014Executive Performance Plan below.
|
(2)
|
Peer Group Long-Term Incentive Value is measured using the Black-Scholes methodology for options and face value on the grant date for restricted stock units.
|
(3)
|
The Long-Term Incentive Value used to calculated Mr. Waters option award is calculated using the Black-Scholes methodology for stock options and a 30-Day
average stock price for restricted stock. At the time of the equity decisions, Radford provided the company a Black-Scholes Value of $3.64 and a 30-Day average stock price of $9.50. The targeted equity value excludes the new hire grant of 300,000
PSUs, which were granted to Mr. Waters on June 15, 2014.
|
(4)
|
The grants for Mr. White were issued based on his position as Vice President of Finance & Treasurer. The target value with both stock options and
restricted stock units was $151,200; this is based on the data Radford provided with a Black-Scholes Value of $2.62 and a 30-Day average stock price of $7.08. The market data referenced is in connection with his position at the time of the grant.
Mr. White received a 10,000 target performance stock unit grant in connection with his promotion to Chief Financial Officer; the value of the PSU grant was calculated based on a stock price of $8.62.
|
In addition to those noted above, stock options were issued
to our former NEOs. Dr. Tewksbury received 325,000 stock options and Mr. Crowley received 130,000 stock options. These awards were forfeited upon termination.
38
Performance Stock Units
Fiscal year 2014 Executive Performance Plan
In fiscal year 2014, each of our NEOs, with the exception of
the current CEO, received a performance stock unit grant as part of an Executive Performance Plan (the EPP). The Committee believed that it was important to drive the executives to focus on both improving operating margin, while
increasing shareholder value. The EPP ties a portion of the NEOs equity to performance requirements in line with our business strategy to meet specific operating margin goals in fiscal 2014 and 2015. The performance period under the Executive
Performance Plan is the Companys fiscal year 2014 and 2015, for which performance goals were set related to the Companys annual non-GAAP operating margin. The number of shares of Company common stock issuable upon vesting of the
performance stock units is dependent on the level of performance achievement. The performance achievements are measured based on an incremental increase in Non-GAAP operating margin on a rolling four quarter average. In situations where there is a
decrease or flat Non-GAAP operating margin, no shares are earned. The following table outlines the minimum, target and maximum threshold set under the plan.
Fiscal Years 20142015 Non-GAAP Operating Margin
|
|
|
|
|
|
|
|
|
Achievement Thresholds:
|
|
Achievement Level
|
|
|
Percentage Achievement
|
|
Maximum
|
|
|
>22
|
%
|
|
|
200
|
%
|
Target
|
|
|
18
|
%
|
|
|
100
|
%
|
Minimum
|
|
|
15
|
%
|
|
|
25
|
%
|
Below Minimum
|
|
|
<15
|
%
|
|
|
0
|
%
|
The Committee approved the
following grants of performance stock units to the NEOs listed in the table below for the fiscal year 2014 and 2015 performance period. The first performance assessment will be reviewed at the close of fiscal year 2014 and on a quarterly basis
thereafter. Any shares earned will vest in the quarter following the quarter that performance was assessed and approved by the Committee. Any shares of Company common stock earned by the continuing NEOs will vest in the quarter following the quarter
in which performance was achieved and will vest two equal installments, the first on the date the Committee determines the achievement of the performance goals and the second on the first anniversary of such determination.
At the close of fiscal year 2014, performance under the EPP
was assessed. In fiscal year 2014 the Company achieved Non-GAAP Operating Margin of 15.6%, resulting in a 25% vesting opportunity for the continuing NEOs. This performance was assessed and approved by the Committee. As a result of this achievement,
the NEOs earned the following number of PSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Target PSU Grant
|
|
|
Achievement
|
|
|
Earned PSU Award
|
|
Mr. Waters(1)
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. White(2)
|
|
|
10,000
|
|
|
|
25.0
|
%
|
|
|
2,500
|
|
Mr. Fan
|
|
|
30,000
|
|
|
|
25.0
|
%
|
|
|
7,500
|
|
Mr. Naghavi
|
|
|
40,000
|
|
|
|
25.0
|
%
|
|
|
10,000
|
|
Mr. Kermarrec
|
|
|
40,000
|
|
|
|
25.0
|
%
|
|
|
10,000
|
|
(1)
|
As noted under Executive Management Changes, Mr. Waters received 300,000 Performance Restricted Stock Units in fiscal year 2015, granted on
June 15, 2014. These Performance Restricted Stock Units were issued when the Committee approved the performance metrics. The performance metrics in fiscal 2015 will be measured based on a Relative Total Shareholder Return.
|
(2)
|
Mr. White became a participant in the Executive Performance Plan at the time of his promotion, at which point he received a target performance stock
unit grant of 10,000.
|
Earned PSUs
vest 50% on June 15, 2014 and 50% on June 15, 2015. Mr. Waters and Mr. McCreary were not participants in the plan as they were not with the Company at the time the plan was implemented.
39
Dr. Tewksbury was issued a target grant of 125,000 and Mr. Crowley was issued a target grant of 45,000. However, they ceased being participants in the Performance Plan upon the
resignation of their respective positions with the Company.
Fiscal year 2013Executive Retention Plan
In fiscal year 2013, the Committee believed a one-time Retention Plan was necessary due to historically low bonus payments, which were dependent on stretch goal operating margins. The CEO was not eligible
to participate in this Plan. Under the Retention Plan, we tied a portion of the eligible NEOs equity to performance requirements in line with our business strategy to meet specific operating margin goals and to outpace our peers revenue growth
in fiscal year 2014. The performance period under the Retention Plan was fiscal year 2014. Each eligible NEO received a target performance stock unit (PSU) grant; the actual number of PSUs earned is tied to our non-GAAP operating margin
and revenue growth relative to our proxy Peer Group, weighted 60% and 40% respectively. The following table outlines the minimum, target and maximum threshold set under the plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metric:
|
|
Operating Margin
|
|
|
% Revenue Growth Above Peer Group Median
|
|
|
Overall
Achievement
|
|
Weighting:
|
|
Weighting: 60%
|
|
|
Weighting: 40%
|
|
|
Threshold:
|
|
Achievement
Level
|
|
|
Vesting %
of
Target
|
|
|
Achievement
Level
|
|
|
Vesting %
of
Target
|
|
|
Vesting %
of
Target
|
|
Maximum
|
|
|
>=20
|
%
|
|
|
150
|
%
|
|
|
>=6
|
%
|
|
|
150
|
%
|
|
|
150
|
%
|
Target
|
|
|
18
|
%
|
|
|
100
|
%
|
|
|
4
|
%
|
|
|
100
|
%
|
|
|
100
|
%
|
Minimum
|
|
|
15
|
%
|
|
|
25
|
%
|
|
|
1
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
Below Minimum
|
|
|
<15
|
%
|
|
|
0
|
%
|
|
|
<1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Actual Achievement
|
|
|
15.6
|
%
|
|
|
40.6
|
%
|
|
|
1.96
|
%
|
|
|
48.9
|
%
|
|
|
43.9
|
%
|
Following the close of fiscal
year 2014, performance under the Retention Plan was assessed. As noted above, in fiscal year 2014 the Company achieved 15.6% Operating Margin and 1.96% Revenue Growth above the peer median. This brought the overall plan achievement to 43.9%. This
performance was assessed and approved by the Committee. The fiscal year 2013 Executive retention Plan ended at the close of fiscal year 2014 and any unearned shares were cancelled. As a result of this achievement, the eligible NEOs earned the
following number of PSUs
|
|
|
|
|
|
|
|
|
|
|
|
|
NEO
|
|
Target Award
|
|
|
Overall Achievement
|
|
|
Earned Award
|
|
Mr. Waters
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. White
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Mr. Fan
|
|
|
12,000
|
|
|
|
43.9
|
%
|
|
|
5,272
|
|
Mr. Naghavi
|
|
|
24,444
|
|
|
|
43.9
|
%
|
|
|
10,737
|
|
Mr. Kermarrec
|
|
|
15,000
|
|
|
|
43.9
|
%
|
|
|
6,589
|
|
The earned PSUs will vest 50%
on June 15, 2014 and 50% on June 15, 2015. Mr. White did not participate as he was not in his present positions at the time the Retention Plan was implemented. Dr. Tewksbury was not a participant at the time of implementation.
Mr. Crowley ceased to be a participant upon his resignation as Chief Financial Officer and his award forfeited.
Performance Stock Units will continue to be part of equity mix for the CEO and our senior executives going forward. Additional information
on the equity awards granted to the NEOs during fiscal 2014 is set forth in the Grants of Plan Based Awards for Fiscal Year 2014 table.
Retirement and Other Benefits
Section 401(k) Plan
. The Company offers the NEOs the opportunity to participate in its Section 401(k) plan. NEOs
participate under the same plan provisions as all other employees. Participating NEOs may contribute up to 75% of their eligible compensation as a pre-tax or Roth after-tax contribution to a maximum of $17,500 in
40
calendar year 2013. Currently, key provisions of the plan include a Company match of $0.50 per $1.00 of the employees contributions up to 6% of base salary, with maximum calendar year
contributions from the Company capped at $6,000 per employee. This matching practice is viewed by the Company as consistent with industry norms and required to provide a total compensation plan that is competitive with other high technology and
semiconductor companies. The Companys contributions vest over four years and if an employee terminates his or her employment prior to four years, the Companys contributions will be prorated according to the number of years worked.
Non-Qualified Deferred Compensation Plan
.
The Company maintains an unfunded non-Qualified Deferred Compensation Plan eligible to provide benefits to director level employees and above. Under this plan, participants can defer up to 100% of their regular salaries, bonuses or other
compensation such as commissions or special awards. Participants can select from among 23 different investment options from which their earnings are measured. A participant is credited with the return of the underlying investment option and there is
currently no matching of contributions by the Company. A participant may invest in any one or more of the following investment alternatives and may change his or her investment selections at any time: Vanguard Mid Cap Index Inv, Dreyfus Small Cap
Stock Index, 1st Eagle Overseas, Royce Micro-cap Inv, Vanguard Windsor II Inv, VIP Freedom 2010, VIP Freedom 2015, VIP Freedom 2020, VIP Freedom 2025, VIP Freedom 2030 , VIP Freedom 2035, VIP Freedom 2040, VIP Freedom 2045, VIP II Contrafund, VIP II
Index 500, VIP III Mid Cap, VIP International Capital Appreciation, VIP Real Estate, Pimco Real Return BD, Pimco Total Return, VIP Freedom Income, VIP High Income, or Fidelity Retirement Money MarketParticipant balances are always 100% vested.
Additionally, the Company has set aside assets in a separate trust designed to meet the obligations under the plan. The trust assets are invested in a manner that is intended to offset the investment performance of the funds selected by the
participants. The deferral accounts are distributed following a participants termination of employment with the Company, unless the participant has elected an in-service withdrawal (scheduled or hardship withdrawal). Generally, distributions
are made in a lump sum payment; however, in the event of a distribution due to retirement, a participant may elect a single lump sum distribution or annual installment distributions paid over two to 15 years. The Committee believes this plan is an
important vehicle that allows plan participants to reach their retirement objectives over the long term. Mr. Fan participated in the non-Qualified Deferred Compensation Plan in fiscal 2014. No other NEO participated in the non-Qualified
Deferred Compensation Plan in fiscal 2014.
Employee Stock Purchase Plan
. The Company maintains an Employee Stock Purchase Plan that was approved by stockholders at the
Companys 2009 Annual Meeting. NEOs participate under the same plan provisions as all other eligible employees. Under the plan, eligible employees can purchase Company stock on the last day of each designated three-month purchase period. The
per share purchase price is the lesser of 85% of the fair market value of the stock on the first day of the three-month purchase period or 85% of the fair market value of the stock on the last day of the three-month purchase period. The maximum
number of shares of stock which may be purchased is 2,500 shares per purchase period. During fiscal 2014, Messrs. Naghavi and White participated in the Employee Stock Purchase Plan. Messrs. Fan, Kermarrec and Waters did not participate in the
Employee Stock Purchase Plan at any time during fiscal 2014.
Other Benefits
. The NEOs are eligible to participate in all other benefits programs offered by the Company to its employees generally, on the same terms as all other employees. These programs
include, but are not limited to, group medical, group dental, basic life insurance, supplemental life insurance, long-term disability insurance, relocation expense reimbursement, and other such benefits programs.
Change of Control Agreements
The Board recognizes that from time to time it is possible
that another entity may consider acquiring the Company or a change in control might otherwise occur, with or without the approval of the Board. The Board has determined that it is in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication and objectivity of the CEO and each NEO, notwithstanding the possibility, threat,
41
or occurrence of a change of control. Therefore, the Company has entered into a Change of Control Agreement with the CEO and each of the other NEOs. See the discussion below under Executive
CompensationSeverance and Change of Control Benefits.
Deductibility of Executive Compensation
Section 162(m) of the Code (Section 162(m)) generally provides that publicly held corporations may not deduct in any
taxable year certain compensation in excess of $1 million paid to certain executive officers. The Company believes that its stock option related compensation generally satisfies the requirements for deductibility under Section 162(m). However,
the Committee considers one of its primary responsibilities to provide a compensation program that will attract, retain, and reward executive talent necessary to maximize stockholder returns. Accordingly, the Committee believes that the
Companys interests are best served in some circumstances by providing compensation (such as salary, incentive compensation, perquisites, restricted stock, restricted stock unit awards and performance restricted stock units) which might be
subject to the tax deductibility limitation of Section 162(m).
Compensation Committee Interlocks and Insider Participation in Compensation Decisions
During fiscal 2014, the members of the Committee were all non-employee directors of the Company and have not at
any time been officers or employees of the Company. No interlocking relationship exists between the Board of Directors or the Compensation Committee and the board of directors or compensation committee of any other company, nor did any such
interlocking relationship exist during fiscal 2014.
Recoupment
Policy
In accordance with the AIP, in the
event of a restatement of the Companys earnings due to material noncompliance with any financial reporting requirement under the U. S. securities laws, the Company is entitled to and shall recoup the difference between incentive-based
compensation paid to all current executive officers who received incentive-based compensation under the AIP during the three years preceding the restatement, which incentive payments were paid on the basis of erroneous data, and the amount of
incentive-based compensation that would have been paid based on the corrected data. This provision of the AIP may be amended by the Compensation Committee at any time to comply with any rules promulgated by the SEC.
42
EXECUTIVE COMPENSATION
The following table discloses the compensation information for the Companys Chief Executive Officer,
Chief Financial Officer, the Companys three other most highly compensated executive officers who were serving as executive officers as of the end of fiscal 2014, and the following former officers: Dr. Theodore L. Tewksbury III,
Ph.D., Jeffrey S. McCreary and Richard Crowley, Jr. (together, the Named Executive Officers or NEOs). This information includes the dollar value of base salaries, stock option, restricted stock unit and performance stock unit
awards, bonus payments, and certain other compensation, if any, whether paid or deferred. The Company did not grant stock appreciation rights and has no long-term compensation benefits other than stock options, restricted stock units and performance
stock units. No disclosure is provided for 2012 or 2013 for those persons who were not named executive officers in 2012 and 2013.
Summary Compensation Table for Fiscal 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Fiscal
Year
|
|
|
Salary
($)(1)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)(2)
|
|
|
Option
Awards
($)(3)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)(4)
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)(5)
|
|
|
Total ($)
|
|
Theodore L. Tewksbury III, Ph.D(6).
|
|
|
2014
|
|
|
|
336,581
|
|
|
|
|
|
|
|
1,046,250
|
|
|
|
865,557
|
|
|
|
524,864
|
|
|
|
|
|
|
|
615,428
|
|
|
|
3,388,680
|
|
Former President and Chief Executive Officer
|
|
|
2013
|
|
|
|
600,018
|
|
|
|
|
|
|
|
|
|
|
|
1,377,801
|
|
|
|
34,777
|
|
|
|
|
|
|
|
|
|
|
|
2,012,596
|
|
|
|
2012
|
|
|
|
596,171
|
|
|
|
|
|
|
|
|
|
|
|
1,756,289
|
|
|
|
83,005
|
|
|
|
|
|
|
|
|
|
|
|
2,435,465
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Waters.
|
|
|
2014
|
|
|
|
116,349
|
|
|
|
|
|
|
|
1,179,000
|
|
|
|
1,380,606
|
|
|
|
|
|
|
|
|
|
|
|
10,344
|
|
|
|
2,686,299
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey S. McCreary(7).
|
|
|
2014
|
|
|
|
280,704
|
|
|
|
|
|
|
|
147,375
|
|
|
|
982,795
|
|
|
|
191,777
|
|
|
|
|
|
|
|
89,070
|
|
|
|
1,691,721
|
|
Interim President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard D. Crowley, Jr(8).
|
|
|
2014
|
|
|
|
214,385
|
|
|
|
|
|
|
|
376,650
|
|
|
|
346,222
|
|
|
|
|
|
|
|
|
|
|
|
3,088
|
|
|
|
940,346
|
|
Former Sr. Vice President and Chief Financial Officer
|
|
|
2013
|
|
|
|
360,506
|
|
|
|
|
|
|
|
187,500
|
|
|
|
385,784
|
|
|
|
13,809
|
|
|
|
|
|
|
|
6,000
|
|
|
|
953,599
|
|
|
|
2012
|
|
|
|
358,890
|
|
|
|
|
|
|
|
|
|
|
|
534,523
|
|
|
|
55,922
|
|
|
|
|
|
|
|
5,556
|
|
|
|
954,891
|
|
|
|
|
|
|
|
|
|
|
|
Brian C. White(9).
|
|
|
2014
|
|
|
|
273,895
|
|
|
|
|
|
|
|
216,550
|
|
|
|
45,276
|
|
|
|
127,722
|
|
|
|
|
|
|
|
6,092
|
|
|
|
669,534
|
|
Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean Fan(10)
|
|
|
2014
|
|
|
|
280,800
|
|
|
|
101,314
|
|
|
|
251,100
|
|
|
|
239,693
|
|
|
|
161,178
|
|
|
|
|
|
|
|
155,192
|
|
|
|
1,189,277
|
|
Vice President and General Manager Interface Connectivity Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arman Naghavi
|
|
|
2014
|
|
|
|
309,025
|
|
|
|
|
|
|
|
334,800
|
|
|
|
266,325
|
|
|
|
195,448
|
|
|
|
|
|
|
|
18,302
|
|
|
|
1,123,900
|
|
Vice President and General Manager, Analog and Power Division
|
|
|
2013
|
|
|
|
314,968
|
|
|
|
|
|
|
|
183,330
|
|
|
|
385,784
|
|
|
|
13,450
|
|
|
|
|
|
|
|
6,416
|
|
|
|
903,948
|
|
|
|
2012
|
|
|
|
307,640
|
|
|
|
|
|
|
|
|
|
|
|
473,435
|
|
|
|
32,335
|
|
|
|
|
|
|
|
6,452
|
|
|
|
819,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian Kermarrec
|
|
|
2014
|
|
|
|
305,460
|
|
|
|
|
|
|
|
334,800
|
|
|
|
266,325
|
|
|
|
116,481
|
|
|
|
|
|
|
|
6,677
|
|
|
|
1,029,744
|
|
Vice President and General Manager, Timing and Synchronization Division
|
|
|
2013
|
|
|
|
291,810
|
|
|
|
|
|
|
|
112,500
|
|
|
|
272,883
|
|
|
|
9,519
|
|
|
|
|
|
|
|
6,915
|
|
|
|
693,627
|
|
(1)
|
The amounts reported represent total base salary paid for the covered fiscal year and are inclusive of any amounts deferred in the covered fiscal year under the
Non-Qualified Deferred Compensation Plan. Mr. Waters base salary reflects his earnings from his hire date of January 6, 2014 through March 30, 2014.
|
(2)
|
Stock awards consist of restricted stock unit awards and performance stock unit awards granted under the 2004 Equity Plan. The amounts reported
represent the grant date fair value of restricted stock unit awards and performance stock unit awards
|
43
|
granted during the covered fiscal year calculated in accordance with ASC Topic 718. For a detailed discussion of the assumptions used to calculate the value of the restricted stock unit awards
and performance stock unit awards, please refer to Note 9 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 30, 2014, filed with the SEC on May 28, 2014. The table below
sets forth the grant date fair value determined in accordance with FASB ASC Topic 718 principles (i) based upon the probable outcome of the performance stock unit awards granted in fiscal year 2014 and (ii) based upon achieving the maximum
level of performance as of the grant date. The actual value, if any, that an NEO may realize from an award is contingent upon the satisfaction of the conditions to vesting in that award and there is no assurance that the value, if any, eventually
realized by the NEO will correspond to the amount reported. The Company granted performance stock units to our NEOs except to Mr. Waters and Mr. McCreary in 2014. While the grants for Dr. Tewksbury and Mr. Crowley are noted,
under the terms of their separation, those grants were forfeited.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
Grant Date
|
|
|
Probable
Outcome of
Performance
Conditions
Grant Date
Fair Value
($)
|
|
|
Maximum
Outcome of
Performance
Conditions
Grant Date
Fair Value
($)
|
|
Dr. Theodore L. Tewksbury III, Ph.D.
|
|
|
6/17/2013
|
|
|
|
1,046,250
|
|
|
|
2,092,500
|
|
Gregory L. Waters
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Jeffrey S. McCreary
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Richard D. Crowley, Jr.
|
|
|
6/17/2013
|
|
|
|
376,650
|
|
|
|
753,300
|
|
Brian C. White
|
|
|
10/15/2013
|
|
|
|
101,500
|
|
|
|
203,000
|
|
Sean Fan
|
|
|
6/17/2013
|
|
|
|
251,100
|
|
|
|
502,200
|
|
Arman Naghavi
|
|
|
6/17/2013
|
|
|
|
334,800
|
|
|
|
669,600
|
|
Christian Kermarrec
|
|
|
6/17/2013
|
|
|
|
334,800
|
|
|
|
669,600
|
|
(3)
|
The amounts reported represent the grant date fair value of stock options granted during the covered fiscal year calculated in accordance with ASC Topic 718. For a
detailed discussion of the assumptions and estimates used to calculate the value of the option awards, please refer to Note 9 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended
March 30, 2014 filed with the SEC on May 28, 2014. The actual value, if any, that an NEO may realize from a stock option is contingent upon the satisfaction of the conditions to vesting in the option and upon the excess of the market price
of the Companys common stock over the exercise price, if any, on the date of exercise and there is no assurance that the value, if any, eventually realized by the NEO will correspond to the amount reported.
|
(4)
|
The amounts reported represent total bonus payments earned under our Annual Incentive Plan for the covered fiscal year. See Compensation Discussion and
AnalysisIndividual Elements of NEO CompensationPerformance Bonus in this Proxy Statement for a more complete description of the amounts earned.
|
(5)
|
The amounts reported include the following: the Companys matching contributions to the individual Section 401(k) accounts of the NEOs and a cash out of
unused vacation for Mr. Naghavi in the amount of $11,886.
|
(6)
|
Dr. Tewksbury served as our former President and Chief Executive Officer, the salary reflected is based on his earnings through his termination date of
August 26, 2013. In connection with his separation of the Company, he received a lump sum payment of $600,018 as well as benefit continuation in the amount of $15,410, as noted in the All Other Compensation Column. Further,
Dr. Tewksbury maintained eligibility under the Annual Incentive Plan and received a payment as noted in the Non-Equity Incentive Plan Compensation column. This payment was calculated in accordance with the terms of his separation
agreement, noted above under the Change of Control Agreements below. Performance was measured based on the pre-established goals approved by the Committee and outlined under Group Achievement of the Performance
Bonus section of the Compensation Discussion and Analysis.
|
(7)
|
Mr. McCreary served as our Interim CEO from August 26, 2013 through January 6, 2014. In connection with his service in this role, he was eligible to
participate in the AIP. His payment was prorated based on his earnings while in service and performance was measured based on the pre-established goals approved by the Committee and outlined under Group Achievement of the
Performance Bonus section of the Compensation Discussion and Analysis. Mr. McCreary also received compensation for his service as a member of the Board of Directors prior to his appointment as Interim CEO and subsequent
to his relinquishment of said positon. Mr. McCrearys received Directors Cash Compensation in the amount of $40,833. Mr. McCreary did not receive the annual directors grant because he was serving in the role of Interim CEO at the time
of issuance. Mr. McCreary received a prorated annual directors grant of 7,772 shares of restricted stock unit awards on July 15, 2014.
|
(8)
|
Mr. Crowley served as our former Chief Financial Officer and resigned from his position effective September 17, 2013. Mr. Crowley did not receive
severance or any additional payments in connection with his resignation.
|
(9)
|
Mr. White received a promotional base salary adjustment on September 11, 2013.
|
(10)
|
Mr. Fan began the fiscal year on an expatriate assignment in China. Mr. Fans assigned was to close our China operations while divesting our smart power
meter business. Mr. Fan was repatriated on August 2, 2013. Following the divestiture the smart power meter, Mr. Fan received a recognition bonus in the amount of $101,314, this amount is reflected in the Bonus column. The
$155,192 reflected in the All Other Compensation column is comprised of expat expenses including housing and relocation.
|
44
Grants of Plan-Based Awards for Fiscal 2014
The following table shows all plan-based awards granted to
the NEOs in fiscal 2014. The equity awards identified in the table below are also reported in the table Outstanding Equity Awards at Fiscal Year End for 2014, below. The amounts reported for the non-equity awards identified below are the
threshold, target, and maximum amounts payable under the AIP that could have been earned in fiscal 2014. For additional information regarding plan-based awards to our NEOs, see Compensation Discussion and Analysis, above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant Date
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
|
|
|
Estimated Future Payouts
Under Equity Incentive
Plan Awards(8)
|
|
|
All
Other
Stock
Awards:
Number
of
Shares
of Stock
or
Units
(#)
|
|
|
All Other
Option
Awards:
Number
of
Securities
Underlying
Options
(#)(5)
|
|
|
Exercise
or Base
Price of
Option
Awards
($/
Share)(6)
|
|
|
Closing
Market
Price
on
Date of
Grant
($/
Share)
|
|
|
Grant
Date Fair
Value
of
Stock
and
Option
Awards
($)(7)
|
|
|
|
Threshold
($)(2)
|
|
|
Target
($)(3)
|
|
|
Maximum
($)(4)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
|
|
|
Theodore L. Tewksbury III, Ph.D.
|
|
|
5/15/2013
|
|
|
|
75,002
|
|
|
|
690,021
|
|
|
|
1,125,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
325,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
865,557
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
125,000
|
|
|
|
250,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,046,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Waters
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
|
11.79
|
|
|
|
11.85
|
|
|
|
1,380,607
|
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,179,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey S. McCreary
|
|
|
9/16/2013
|
|
|
|
35,088
|
|
|
|
280,704
|
|
|
|
526,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
9.33
|
|
|
|
9.29
|
|
|
|
982,795
|
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard D. Crowley, Jr.
|
|
|
5/15/2013
|
|
|
|
18,759
|
|
|
|
150,069
|
|
|
|
281,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
130,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
346,223
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
45,000
|
|
|
|
90,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
376,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian C. White
|
|
|
5/15/2013
|
|
|
|
17,118
|
|
|
|
136,947
|
|
|
|
256,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
45,276
|
|
|
|
|
5/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
115,050
|
|
|
|
|
10/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
10,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean Fan
|
|
|
5/15/2013
|
|
|
|
19,305
|
|
|
|
154,440
|
|
|
|
289,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
239,693
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
30,000
|
|
|
|
60,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
251,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arman Naghavi
|
|
|
5/15/2013
|
|
|
|
25,108
|
|
|
|
200,867
|
|
|
|
315,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
266,325
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
334,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian Kermarrec
|
|
|
5/15/2013
|
|
|
|
21,000
|
|
|
|
168,003
|
|
|
|
315,006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
7.67
|
|
|
|
7.81
|
|
|
|
266,325
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
40,000
|
|
|
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
334,800
|
|
(1)
|
Amounts represent the Annual Incentive Plan (AIP) award that is dependent on actual funding based on the corporate performance measure of non-GAAP Operating Margin, and
the achievement of actual results against pre-established group goals. The actual payout amounts under the plan for fiscal year 2014 are included in the
Non-Equity Incentive Plan Compensation
column of the
Summary
Compensation Table
. Mr. Waters was not eligible to participate in the AIP during 2014 because he was not employed by the company at the beginning of the performance period.
|
(2)
|
The amounts reported in the Threshold column represent the minimum payment level at 50% group performance and 25% funding, based on the minimum achievement of non-GAAP
Operating Margin.
|
(3)
|
The amounts reported in the Target column represent the target payment level at 100% group performance and 100% funding based on the target achievement of non-GAAP
Operating Margin.
|
(4)
|
The amounts reported in the Maximum column represent the maximum payment level at 125% group performance and 150% funding based on the maximum achievement of non-GAAP
Operating Margin.
|
(5)
|
The amounts reported are for stock options granted under the Companys 2004 Equity Plan. Each stock option expires seven years from the date of grant. Each stock
option vests 25% on the first anniversary of the grant date, or in the case of new-hire grants, on the anniversary of the hire date, and monthly thereafter over the remaining three years until fully vested at the end of four years.
|
(6)
|
For purposes of determining the exercise price of the stock options granted under the Companys stock option plans, the fair market value on the date of grant is
defined as the closing market price of the Companys common stock reported by the NASDAQ on the trading day immediately preceding the date of grant.
|
(7)
|
These amounts reported represent the grant date fair value of the equity awards computed in accordance with ASC Topic 718. For a detailed discussion of our grant date
fair value calculation methodology, including related assumptions and estimates, please refer to Note 9 of the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 30, 2014, filed with the
SEC on May 28, 2014.
|
(8)
|
Amounts represent performance stock unit awards granted pursuant to the EPP. The target number of shares was granted; the threshold number of shares shown
is 0% of the target number of shares, representing the lowest possible amount of vesting under the plan. The maximum number of shares shown is 200% of target number of shares. Please see the section Compensation Discussion and
Analysis-Equity Awards for the NEOs in Fiscal 2014-Performance Stock Units for a detailed discussion of the performance stock unit awards.
|
45
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table:
See Compensation Discussion and
Analysis in this Proxy Statement for a more complete description of the amounts earned or awards granted, as well as an explanation of the amount of salary and bonus in proportion to the total compensation for each NEO.
Outstanding Equity Awards at Fiscal 2014 Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION AWARDS
|
|
|
STOCK AWARDS
|
|
Name
(a)
|
|
Grant Date
or Vesting
Commence-
ment Date
(b)(1)
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(c)
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(d)(1)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options (#)
(e)
|
|
|
Option
Exercise
Price
(f)
|
|
|
Option
Expiration
Date
(g)
|
|
|
Numbers
of Shares
or Units
of
Stock
That
Have Not
Vested
(#)
(h)(2)
|
|
|
Market
Value of
Shares
or Units
of
Stock
That
Have Not
Vested
($)
(i)(3)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have Not
Vested
(#)(j)(4)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(k)(3)
|
|
Theodore L.
Tewksbury III, Ph.D.
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory L. Waters
|
|
|
2/18/2014
|
|
|
|
0
|
|
|
|
350,000
|
|
|
|
|
|
|
$
|
11.79
|
|
|
|
2/18/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/18/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
1,194,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey S. McCreary
|
|
|
7/16/2012
|
|
|
|
|
|
|
|
17,500
|
|
|
|
222,500
|
|
|
$
|
4.94
|
|
|
|
7/16/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/15/2012
|
|
|
|
12,000
|
|
|
|
|
|
|
|
|
|
|
$
|
5.66
|
|
|
|
11/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9/16/2013
|
|
|
|
31,250
|
|
|
|
|
|
|
|
|
|
|
$
|
9.33
|
|
|
|
9/16/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Richard D. Crowley, Jr
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian C. White
|
|
|
5/17/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750
|
|
|
|
8,955
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2010
|
|
|
|
3,333
|
|
|
|
834
|
|
|
|
|
|
|
$
|
5.75
|
|
|
|
5/17/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2011
|
|
|
|
6,667
|
|
|
|
11,667
|
|
|
|
|
|
|
$
|
8.49
|
|
|
|
5/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
23,880
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2012
|
|
|
|
5,100
|
|
|
|
16,575
|
|
|
|
|
|
|
$
|
5.77
|
|
|
|
5/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,550
|
|
|
|
30,447
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
179,100
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2013
|
|
|
|
0
|
|
|
|
17,000
|
|
|
|
|
|
|
$
|
7.67
|
|
|
|
5/15/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
119,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Sean Fan
|
|
|
5/17/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,125
|
|
|
|
13,433
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2010
|
|
|
|
28,750
|
|
|
|
1,250
|
|
|
|
|
|
|
$
|
5.75
|
|
|
|
5/17/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2011
|
|
|
|
46,041
|
|
|
|
18,959
|
|
|
|
|
|
|
$
|
8.49
|
|
|
|
5/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2012
|
|
|
|
45,833
|
|
|
|
54,167
|
|
|
|
|
|
|
$
|
5.77
|
|
|
|
5/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2013
|
|
|
|
|
|
|
|
90,000
|
|
|
|
|
|
|
$
|
7.67
|
|
|
|
5/15/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
358,200
|
|
|
|
|
1/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
143,280
|
|
|
|
|
|
|
|
|
|
|
|
|
Arman Naghavi
|
|
|
11/16/2009
|
|
|
|
170,000
|
|
|
|
|
|
|
|
|
|
|
$
|
6.00
|
|
|
|
11/16/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,250
|
|
|
|
74,625
|
|
|
|
|
|
|
|
|
|
|
|
|
5/17/2010
|
|
|
|
71,875
|
|
|
|
3,125
|
|
|
|
|
|
|
$
|
5.75
|
|
|
|
5/17/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/16/2011
|
|
|
|
109,791
|
|
|
|
45,209
|
|
|
|
|
|
|
$
|
8.49
|
|
|
|
5/16/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2012
|
|
|
|
80,208
|
|
|
|
94,792
|
|
|
|
|
|
|
$
|
5.77
|
|
|
|
5/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2013
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
$
|
7.67
|
|
|
|
5/15/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
477,600
|
|
|
|
|
1/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,444
|
|
|
|
291,861
|
|
|
|
|
|
|
|
|
|
|
|
|
Christian Kermarrec
|
|
|
5/15/2012
|
|
|
|
4,687
|
|
|
|
39,063
|
|
|
|
|
|
|
$
|
5.77
|
|
|
|
5/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/15/2012
|
|
|
|
4,167
|
|
|
|
31,250
|
|
|
|
|
|
|
$
|
5.59
|
|
|
|
10/15/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2013
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
|
|
$
|
7.67
|
|
|
|
5/15/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/17/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
477,600
|
|
|
|
|
1/15/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
179,100
|
|
46
(1)
|
Each stock option vests and becomes exercisable with respect to 25% of the shares of the Companys common stock subject thereto on the first anniversary of the
date of grant, or the first anniversary of the date of hire or promotion, as applicable, and with respect to the remaining shares subject thereto, on each monthly anniversary thereafter over the following thirty-six months such that the option is
fully vested and exercisable on the fourth anniversary, subject to continued service to the Company through each vesting date.
|
(2)
|
Each restricted stock unit award vests with respect to 25% of the shares of the Companys common stock subject thereto on each anniversary of the date of grant,
such that the award is fully vested on the fourth anniversary of the date of grant, subject to continued service to the Company through each vesting date.
|
(3)
|
The dollar amounts shown in columns (i) and (k) are determined by multiplying (x) the number of shares or units reported in columns (h) and
(j) by (y) $11.94 (the closing price of the Companys common stock on March 28, 2014, the last trading day of fiscal 2014).
|
(4)
|
This column represents outstanding performance stock units and includes the Target number of performance stock unit granted. The performance period under
the Executive Retention Plan, with a grant date of January 15, 2013, ended March 30,2014. As noted under the Compensation Discussion and AnalysisPerformance Stock Units section, On June 10, 2014 the Committee
approved the overall achievement of 43.9% . The remaining unearned shares were cancelled. The first performance period under the Executive Performance Plan, with a grant date of June 17, 2013, ended on March 30, 2014. As noted under the
Compensation Discussion and AnalysisPerformance Stock Units section, the Committee approved the first achievement vesting of 25% based on the achievement of 15.6% Non-GAAP operating margin. The performance period under this plan
continues through the close of fiscal year 2015. As such, the ongoing NEOs can still achieve up to 200% of their stated targets. With respect to both awards, the earned PSUs vest 50% on June 15, 2014 and 50% on June 15, 2015.
|
Non-Qualified Deferred
Compensation for Fiscal 2014
The Company
maintains a Non-Qualified Deferred Compensation Plan that allows director-level employees and above to defer up to 100% of their regular salaries, bonuses or other compensation. Mr. Fan participated in the non-Qualified Deferred Compensation
Plan in fiscal 2014. No other NEOs participated in the non-Qualified Deferred Compensation Plan in fiscal 2014. The following table sets forth a summary of contributions to, and account balances under, our Non-Qualified Deferred Compensation Plan,
as more fully described below, for the year ended March 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in last FY
($)
|
|
|
Registrant
Contributions
in last FY ($)
|
|
|
Aggregate Earnings
in last FY
($)
|
|
|
Aggregate
Withdrawals /
Distributions
($)
|
|
|
Aggregate
Balance at
last
FYE
($)
|
|
Sean Fan
|
|
|
44,828
|
|
|
|
|
|
|
|
279
|
|
|
|
|
|
|
|
326,913
|
|
Under this plan, participants
can defer up to 100% of their regular salaries, bonuses or other compensation such as commissions or special awards. Participants can select from among 23 different investment options from which their earnings are measured. A participant is credited
with the return of the underlying investment option and there is currently no matching of contributions by the Company. A participant may invest in any one or more investment alternatives offered under the plan. Additionally, the Company has set
aside assets in a separate trust designed to meet the obligations under the plan. The trust assets are invested in a manner that is intended to offset the investment performance of the funds selected by the participants. The deferral accounts are
distributed following a participants termination of employment with the Company, unless the participant has elected an in-service withdrawal (scheduled or hardship withdrawal). Generally, distributions are made in a lump sum payment; however,
in the event of a distribution due to retirement, a participant may elect a single lump sum distribution or annual installment distributions paid over two to 15 years.
47
Option Exercises and Stock Vested for Fiscal 2014
The following table shows all stock options exercised and
stock awards that vested and the value realized upon exercise or vesting for each of the NEOs during fiscal 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on
Exercise (#)
|
|
|
Value Realized
on Exercise
($)
|
|
|
Number of Shares
Acquired on
Vesting (#)
|
|
|
Value Realized
on Vesting
($)
|
|
Theodore L. Tewksbury III, Ph.D.
|
|
|
1,562,499
|
|
|
$
|
4,971,328
|
|
|
|
25,000
|
|
|
|
191,750
|
|
Gregory L. Waters
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey S. McCreary
|
|
|
|
|
|
|
|
|
|
|
21,334
|
|
|
|
228,824
|
|
Richard D. Crowley, Jr.
|
|
|
479,749
|
|
|
$
|
1,632,857
|
|
|
|
7,250
|
|
|
|
55,608
|
|
Brian C. White
|
|
|
133,724
|
|
|
$
|
420,259
|
|
|
|
3,325
|
|
|
|
25,503
|
|
Sean Fan
|
|
|
77,797
|
|
|
$
|
188,880
|
|
|
|
2,377
|
|
|
|
18,232
|
|
Arman Naghavi
|
|
|
|
|
|
|
|
|
|
|
11,250
|
|
|
|
98,188
|
|
Christian Kermarrec
|
|
|
45,833
|
|
|
$
|
177,538
|
|
|
|
|
|
|
|
|
|
48
SEVERANCE AND CHANGE OF CONTROL BENEFITS
The Company has entered into Change of
Control Agreements with each current NEO. The agreements are coterminous with the NEOs employment with the Company. In the event of an involuntary termination of employment of any of the NEOs, which includes a termination by the Company
without cause or a voluntary termination by the employee under certain circumstances, within two years after a change of control of the Company, generally the agreements provide for a lump sum severance payment consisting of (a) twelve
(12) months of the monthly salary which the NEO was receiving immediately prior to the Change of Control (twenty-four months for the CEO), plus (b) the NEOs target bonus (two times the target bonus for the CEO), payable
on the thirtieth (30
th
) day following the NEOs
termination of employment, as well as a prorated bonus payment for the fiscal year in which the NEOs termination of employment occurs based on, and paid generally in accordance with, the terms of the Companys Annual Incentive Plan. The
target bonus is the percentage of the NEOs base salary that is prescribed by the Company under its Annual Incentive Plan (or successor plan) as the percentage of such base salary payable to the NEO as a bonus if the Company pays
bonuses at one-hundred percent (100%) of its Annual Incentive Plan (or successor plan) target, but in no event will the target bonus be less than the target bonus in effect for the NEO in the fiscal year in which the Change of
Control occurs.
The Change of Control Agreements
also provide for continued health benefits for the same twelve-month period (18 months for the CEO), and outplacement services with the total value not to exceed $15,000. The agreements further provide that, in the event of an involuntary
termination of employment of any of the NEOs within two years after a change of control of the Company, the vesting of all outstanding stock options and restricted stock and performance stock unit awards will become fully accelerated effective upon
the date a release of claims executed by the terminated NEO is no longer revocable. Performance stock unit awards are accelerated as if one hundred percent (100%) of the performance target were achieved. The agreements further generally provide
that benefits may be limited to a lesser amount so that no portion of the benefits is subject to the imposition of excise taxes under the golden parachute provisions of Section 280G of the Code, if such limitation results in the
receipt by the NEO, on an after-tax basis, of a greater amount of benefits than without such limitation.
For the purpose of these agreements, a change of control means the occurrence of (i) any person or entity becoming the
beneficial owner of fifty percent or more of the voting power of the Companys outstanding securities, (ii) a merger or consolidation of the Company other a merger or consolidation in which the voting securities of the Company outstanding
immediately prior to the transaction continue to represent at least fifty percent of the total voting power of the Company or such surviving entity immediately after the transaction, (iii) the entering into of an agreement for the sale or
disposition by the Company of all or substantially all of the Companys assets or the approval by the Companys shareholders of a plan of complete liquidation of the Company in connection with such an agreement or (iv) a change in the
composition of the Board of Directors of the Company, as a result of which fewer than a majority of the directors are incumbent directors (as defined in the Change of Control Agreements).
A termination by the Company without cause is any termination
by the Company other than for cause. Cause is defined as gross negligence or willful misconduct in the performance of the NEOs duties to the Company where such gross negligence or willful misconduct has resulted or is likely to result in
substantial or material damage to the Company and its subsidiaries, repeated unexplained and unjustified absence from the Company, a material and willful violation of federal or state law, commission of any act of fraud with respect to the Company,
or conviction of a felony or crime involving moral turpitude causing material harm to the standing and reputation of the Company. Voluntary termination of employment by an NEO under certain circumstances constitutes an involuntary termination if it
follows a material reduction or change in job duties, responsibilities and requirements inconsistent with the NEOs position with the Company and the NEOs duties, responsibilities and requirements as in effect immediately prior to the
change of control, any reduction of the NEOs base compensation or target bonus or the NEOs refusal to relocate to a facility or location more than 50 miles from the Companys current location.
49
The Company has entered into an Employment Offer Letter with Mr. Naghavi. As amended,
the Employment Offer Letter provides that in the event Mr. Naghavis employment is terminated by the Company without cause, and contingent upon his execution of the Companys standard release agreement, Mr. Naghavi will be
entitled to receive a lump-sum severance payment from the Company in an amount equivalent to twelve (12) months of Mr. Naghavis then-current base salary. For purposes of the Employment Offer Letter, as amended, cause is
as defined in the prior Change of Control Agreements described above.
Change of Control Benefits
The following table sets forth the estimated benefits related to accelerated vesting of stock options, restricted stock units, and performance stock units that would have accrued to each of our continuing
NEOs who were employed with the Company on March 30, 2014 had a change of control of the Company occurred on March 30, 2014 and the NEOs immediately terminated. Amounts below reflect the value of fully accelerated vesting of options,
restricted stock units, and performance stock units pursuant to the Change of Control Agreements entered into with each NEO in effect as of the end of fiscal 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Accelerated
Vesting of
Options ($)(1)
|
|
|
Accelerated
Vesting of RSUs
& PSUs
($)(2)
|
|
|
Total
($)
|
|
Gregory Waters
|
|
|
52,500
|
|
|
|
1,194,000
|
|
|
|
1,246,500
|
|
Brian C. White
|
|
|
220,271
|
|
|
|
361,782
|
|
|
|
582,053
|
|
Sean Fan
|
|
|
791,656
|
|
|
|
514,913
|
|
|
|
1,306,569
|
|
Arman Naghavi
|
|
|
1,187,181
|
|
|
|
844,086
|
|
|
|
2,031,267
|
|
Christian Kermarrec
|
|
|
866,456
|
|
|
|
656,700
|
|
|
|
1,523,156
|
|
(1)
|
The value of the accelerated vesting of stock options is calculated based on the aggregate positive difference, if any, between the exercise price of each option for
which vesting would be accelerated and $11.94, the closing market price of the common stock of the Company on March 30, 2014, the last trading day prior to the end of fiscal 2014.
|
(2)
|
The value of the accelerated vesting of RSU awards is calculated by multiplying the number of shares of the Companys common stock subject to outstanding RSUs for
which vesting is accelerated times $11.94, the closing market price of the common stock of the Company on March 30, 2014, the last trading day prior to the end of fiscal 2014. The value of the accelerated vesting of PSU awards is calculated by
multiplying the target number of shares of the Companys common stock subject to outstanding PSUs for which vesting is accelerated times $11.94, the closing market price of the common stock of the Company on March 30, 2014, the last
trading day prior to the end of fiscal 2014.
|
Severance BenefitsTermination Following a Change of Control
Under the individual Change of Control Agreements with the NEOs in effect as of the end of fiscal 2014 and referenced above, each
continuing NEO who was employed by the Company on March 30, 2014 would be entitled to the following estimated payments and benefits if the employment of the NEO had been terminated by the Company without cause on March 30, 2014 assuming
such date was within two years following a change of control of the Company. The reported amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to each NEO, which would only be known at the time that they
become eligible for payment and would only be payable if a change of control were to occur.
50
Estimated Current Value of Termination Benefits
If Named Executive Officer was Terminated Without Cause on March 30, 2014
and Within Two Years Following a Change of Control
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Severance
Amount
Cash
($)(1)
|
|
|
Early
Vesting
of Stock
Options
($)(2)
|
|
|
Early
Vesting of
Restricted &
Performance
Stock
Units
($)(3)
|
|
|
Heath
Insurance
Benefits
($)(4)
|
|
|
Outplacement
Services
($)
|
|
|
Other
($)(5)
|
|
|
Total
($)
|
|
Gregory L. Waters
|
|
|
2,255,058
|
|
|
|
52,500
|
|
|
|
1,194,000
|
|
|
|
37,905
|
|
|
|
15,000
|
|
|
|
6,711
|
|
|
|
3,561,174
|
|
Brian C. White
|
|
|
692,106
|
|
|
|
220,271
|
|
|
|
361,782
|
|
|
|
21,868
|
|
|
|
15,000
|
|
|
|
22,877
|
|
|
|
1,333,904
|
|
Sean Fan
|
|
|
750,857
|
|
|
|
791,656
|
|
|
|
514,913
|
|
|
|
3,510
|
|
|
|
15,000
|
|
|
|
32,400
|
|
|
|
2,930,336
|
|
Arman Naghavi
|
|
|
827,241
|
|
|
|
1,187,181
|
|
|
|
844,086
|
|
|
|
24,118
|
|
|
|
15,000
|
|
|
|
33,280
|
|
|
|
2,956,788
|
|
Christian Kermarrec
|
|
|
844,403
|
|
|
|
866,456
|
|
|
|
656,700
|
|
|
|
47,618
|
|
|
|
15,000
|
|
|
|
4,754
|
|
|
|
2,434,931
|
|
(1)
|
Represents a payment equivalent to twenty-four (24) months of base salary and three times the target bonus for the CEO (total bonus equivalent is calculated as two
times the CEO target bonus, plus the prorated bonus for the full fiscal 2014, assuming termination on March 30, 2014); for NEOs other than the CEO, represents a payment equivalent to twelve (12) months of base salary and two
times the target bonus (total bonus equivalent is calculated as the NEO target bonus, plus the prorated bonus for the full fiscal 2014, assuming termination on March 30, 2014).
|
(2)
|
The value of unvested and accelerated stock options is the difference between the exercise price of the option and $11.94 per share, the last reported sales price of
our common stock on March 30, 2014, the last trading day of fiscal 2014.
|
(3)
|
The value of unvested and accelerated restricted stock units and unvested and accelerated Target number of performance stock units is $11.94 per share, the
last reported sales price of our common stock on March 30, 2014, the last trading day of fiscal 2014.
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(4)
|
Represents the approximate value of one year (18 months for the CEO) of health insurance benefits and one year (24 months for the CEO) of continuation of life insurance
benefits.
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(5)
|
Represents the cash equivalent of any earned but unused vacation balances as of March 30, 2014.
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Severance BenefitsTermination Other Than in the
Event of a Change of Control
In the event of
termination of employment other than in the event of a change of control of the Company, our NEOs may be eligible to receive severance as determined on a case by case basis, which is generally not more than one year of the NEOs base salary and
in some cases may be less. Final determination of any severance paid is made by the Committee. In the case of Mr. Naghavis termination, he is eligible to receive a lump sum payment of $309,026, which is equivalent to 12 months of his base
salary, pursuant to his amended employment offer letter.
Dr. Tewksbury left IDT effective August 27, 2013. In connection with Dr. Tewksburys resignation, he received a lump sum payment in the amount of $600,018, which is equivalent to 12
months of Dr. Tewksburys base salary. Further, Dr. Tewksbury continued his eligibility of a full bonus under the Annual Incentive Plan for fiscal 2014. Payment of the bonus was contingent on the Companys performance.
Dr. Tewksbury received a bonus payment under the Annual Incentive Plan in the amount of $524,864. Dr. Tewksbury will have exercisability of all outstanding options to the extent vested on his termination date of August 27, 2013
through August 27, 2014 and COBRA premiums for continued healthcare coverage for up to 12 months, in the amount of $15,410. Dr. Tewksburys compensation is outlined further under the Summary Compensation Table below.
Mr. Crowley resigned his position as Chief Financial
Officer on September 11, 2013; no severance or benefits were paid in connection with his resignation.
Mr. McCreary resigned his position as Interim CEO on January 6, 2014 and resumed his position as a member of the Board. In
connection with his service as Interim CEO, Mr. McCreary continued his eligibility of a
51
prorated bonus under the Annual Incentive Plan. Payment of the bonus was contingent on the Companys performance. Mr. McCreary received a bonus payment under the Annual Incentive Plan
in the amount of $191,777. Further, as outlined under Executive Management Changes, Mr. McCreary received a grant of 300,000 stock options, of which 1/48
th
vested monthly for the five months Mr. McCreary served as Interim CEO. As long as Mr. McCreary serves as a
member of the Board, any stock options vested as of his date of termination as Interim CEO are exercisable for the remainder of the option life. No other severance or benefits were paid in connection with Mr. McCrearys resignation as
Interim CEO.
52
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information as of
March 30, 2014, for all of the Companys equity compensation plans, including the 2009 Employee Stock Purchase Plan, 1994 Stock Option Plan, 1997 Stock Option Plan and 2004 Equity Plan:
Equity Compensation Plan Information
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|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of Securities
to be Issued upon
Exercise of
Outstanding
Options, Warrants and Rights (#)
|
|
|
Weighted Average
Exercise Price
of
Outstanding Options,
Warrants and Rights ($)
|
|
|
Number of Securities Remaining
Available for Future Issuance
under Equity
Compensation
Plans Excluding Securities
Reflected in Column (a) (#)
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|
|
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(a)
|
|
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(b)
|
|
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(c)
|
|
Equity compensation plans approved by security holders(1)
|
|
|
9,478,795
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(2)
|
|
|
7.31
|
|
|
|
19,267,649
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(3)(6)
|
Equity compensation plans not approved by security holders(4)(5)
|
|
|
68,959
|
|
|
|
13.26
|
|
|
|
0
|
|
Total
|
|
|
9,547,754
|
(6)
|
|
|
7.35
|
(6)
|
|
|
19,267,649
|
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(1)
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Includes the Companys 2009 Employee Stock Purchase Plan, 1994 Stock Option Plan and 2004 Equity Plan.
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(2)
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Represents 5,533,359 shares that may be issued upon exercise of outstanding options, 2,923,510 shares that may be issued upon vesting of restricted stock units, and
1,021,926 Maximum shares that may be issued upon vesting of performance stock units.
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(3)
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Includes 5,019,278 shares remaining available for future issuance under the Companys 2009 Employee Stock Purchase Plan and 14,248,371 shares remaining available
under the 2004 Equity Plan. The 1994 Stock Option Plan expired July 26, 2010 and no shares remain available for issuance under this plan.
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(4)
|
Consists of shares issuable under our 1997 Stock Option Plan, which has not been approved by our stockholders. See the description below of the 1997 Stock Option Plan.
The 1997 Stock Option Plan was amended to expressly require stockholder approval to amend any outstanding option to reduce its exercise price or cancel and re-grant options with a lower exercise price. The 1997 Stock Option Plan expired in October
2007.
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(5)
|
In connection with the Companys acquisition of Tundra Semiconductor Corporation in June 2009, the Company assumed options held by former employees and consultants
of Tundra under the Tundra 1995 Stock Option Plan, and the Tundra 2005 Stock Option Plan, as amended, exercisable for a total of 671,298 shares (after giving effect to the exchange ratio provided in the acquisition agreement). Of these assumed
options, options to purchase 15,476 shares of Company common stock were outstanding as of March 30, 2014. These remaining outstanding options have a weighted average exercise price of $7.18 per share. No further awards will be made under these
plans. Statistics regarding the assumed options are not included in the above table.
|
(6)
|
As of June 30, 2014, 9,875,030 shares were available for grant under the 2004 Equity Plan and 4,782,911 shares were available for grant under the 2009 Employee
Stock Purchase Plan. Further, options outstanding as of this date were 5,270,259, the weighted average exercise price was $7.49, and the weighted average term to expiration was 4.21 years, RSUs outstanding as of this date were 3,592,746 with a
weighted average remaining contractual term of 1.94 years, and the Maximum PSUs outstanding as of this date were 2,118,803 with a weighted average remaining contractual term of 1.90 years.
|
Description of the 1997 Stock Option Plan
In October 1997, the Board of Directors of the Company
adopted the 1997 Stock Option Plan (the 1997 Plan). The 1997 Plan is administered, subject to its terms, by the Compensation Committee, whose members are
53
designated by the Board of Directors. The 1997 Plan provides for the grant of NQSOs to employees, consultants, independent contractors and advisors of the Company and its affiliates. Officers and
members of the Board of Directors who are subject to Section 16 of the Exchange Act are not eligible to participate in the 1997 Plan.
The purchase price of the common stock issuable pursuant to options granted under the 1997 Plan may not be less than 100% of the fair
market value of the common stock on the date the option is granted. The fair market value on the date of grant is defined as the closing price of the common stock as reported by the NASDAQ on the trading day immediately preceding the date of grant.
If any option is forfeited or terminates for any reason before being exercised, then the shares of common stock subject to such option shall again become available for future awards under the 1997 Plan. Options granted under the 1997 Plan generally
have seven-year terms and vest 25% within the first year and the remaining shares vest monthly over three years such that the options are fully vested four years from the date of grant. Options granted under the 1997 Plan are also subject to
accelerated vesting in the event of certain corporate transactions. The above summary is qualified in its entirety by reference to the full text of the 1997 Plan. The 1997 Plan expired in October 2007. The Company may no longer grant awards under
the 1997 Plan.
CERTAIN TRANSACTIONS
The Company has entered into indemnity
agreements with certain officers and directors which provide, among other things, that the Company will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, judgments, fines and
settlements such officer or director may be required to pay in actions or proceedings which they are or may be made a party by reason of their position as a director, officer or other agent of the Company, and otherwise to the full extent permitted
under Delaware law and the Bylaws of the Company.
Pursuant to our restated certificate of incorporation and Bylaws, we are obligated, to the maximum extent permitted by Delaware law, to
indemnify each of our directors and officers against all expenses, liability and loss (including attorneys fees, judgments, fines, ERISA excise taxes and penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered
in connection with any proceeding arising by reason of the fact that such person is or was a director or officer of the Company. A director or officer includes any person who is or was a director or officer of us, is or was
serving at our request as a director or officer of another enterprise or was a director or officer of a corporation which was a predecessor corporation of us or of another enterprise at the request of the predecessor corporation. Our restated
certificate of incorporation and Bylaws also require that we advance expenses, including attorneys fees, incurred by any such director or officer in advance of the final disposition of any such proceeding to which such person is entitled to
indemnification, to the extent permitted and subject to any requirements imposed by the Delaware General Corporation Law.
At present, there is no pending litigation or proceeding involving any of our directors, officers, or employees in which indemnification
is sought, nor are we aware of any threatened litigation or proceeding that may result in claims for indemnification.
The Audit Committee, under its charter, has the responsibility of reviewing and approving in advance any proposed related party
transactions as defined under Item 404 of Regulation S-K. The Chief Financial Officer or Controller brings potential related party transactions to the attention of the Companys Disclosure Committee. The Disclosure Committee discusses any
related party transactions, which are then brought to the attention of the Audit Committee at quarterly Audit Committee meetings, or more frequently, as required. The Audit Committee then determines whether the related party transaction is approved
or denied. Such discussion and disposition are evidenced in the minutes of the Disclosure Committee and the Audit Committee meetings. There were no related party transactions as defined under Item 404 of Regulation S-K during fiscal year ended
March 30, 2014.
54
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Exchange Act, requires the
Companys directors and officers, and persons who own more than 10% of the Companys common stock to file initial reports of ownership and reports of changes in ownership with the SEC and The NASDAQ Global Select Market. Such persons are
required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Specific due dates for these reports have been established, and the Company is required to disclose in this Proxy Statement any failure to
file these reports on a timely basis. Based solely on the Companys review of the copies of such forms furnished to it and written representations from the executive officers and directors, the Company believes that during fiscal 2014 all
Section 16(a) filing requirements were timely met.
55
The following Audit Committee Report and Compensation Committee Report shall not be deemed to be
incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended (the Securities Act) or under the Exchange Act, except to the extent that the
Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act or considered to be soliciting material.
AUDIT COMMITTEE REPORT
During fiscal 2014, upon the resignation of Mr. Jeffrey
McCreary in connection with his appointment as interim CEO in August 2013, the Audit Committee was comprised of five independent, non-employee directors, Messrs. Padval, Parnell, Schrock and Taffe, and Dr. Smith. The Audit Committee operates
under a written charter adopted by the Board of Directors, a copy of which is available on the Companys website at http://ir.idt.com/governance.cfm.
The Audit Committee oversees the Companys financial reporting processes on behalf of the Board of Directors. Management is
responsible for the Companys internal controls, financial reporting processes, and compliance with laws and regulations and ethical business standards. The Companys independent registered public accounting firm (or auditor)
is responsible for performing an independent audit of the Companys consolidated financial statements in accordance with generally accepted auditing standards and the audit of the Companys internal control over financial reporting, and
issuing a report thereon. The Audit Committee is responsible for monitoring and overseeing these processes.
In this context, the Audit Committee has reviewed and discussed with management the Companys audited financial statements as of and
for the fiscal year ended March 30, 2014 contained in the Companys Annual Report on Form 10-K for the fiscal year ended March 30, 2014. The Audit Committee has also discussed with the independent auditors the matters required to be
discussed by the statement on Auditing Standard No. 61, as amended (AICPA, Professional Standards, Vol. 1. AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T.
The Audit Committee has received the written disclosures and
the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants communications with the Audit Committee concerning independence, and has
discussed with the independent accountant the independent accountants independence.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Companys audited financial statements be included in the Companys
Annual Report on Form 10-K for the fiscal year ended March 30, 2014, for filing with the Securities and Exchange Commission.
Audit Committee
Gordon Parnell
Umesh Padval
Donald Schrock
Ron Smith, Ph.D.
Norman Taffe
56
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors has reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in
this Proxy Statement.
Compensation Committee
Ron Smith, Ph.D.
Umesh Padval
John Schofield
Norman Taffe
CERTAIN MATTERS RELATING TO HOUSEHOLDING OF PROXY MATERIALS
AND ANNUAL REPORTS
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
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 Company stockholders will be householding the Companys proxy materials. A single copy of the 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. The Company will promptly deliver copies of the proxy statement and annual report to any
stockholder who contacts the Companys Investor Relations Department at (408) 284-8200 or by mail addressed to Investor Relations, Integrated Device Technology, Inc., 6024 Silver Creek Valley Road, San Jose, California 95138, requesting
such copies. If you are holding a physical stock certificate, direct your written request to Computershare, P.O. Box 43078, Providence, Rhode Island 02940-3078, (877) 373-6374. Stockholders who currently receive multiple copies of the proxy
statement and annual report at their address and would like to request householding of their communications should contact their broker or Computershare.
57
ANNUAL REPORT ON FORM 10-K; AVAILABLE INFORMATION
The Company filed with the SEC an Annual Report on Form 10-K
for the fiscal year ended March 30, 2014 on May 28, 2014. Each stockholder receiving this Proxy Statement is also provided with a copy of the Annual Report on Form 10-K (without exhibits) in an Annual Report Wrap. Additional copies of the
Companys Annual Report on Form 10-K (without exhibits) with the Annual Report Wrap are available upon written request. Copies of exhibits to the Companys Annual Report on Form 10-K are available upon written request and reimbursement of
the reasonable costs to provide these documents. Please address requests for these documents to: Investor Relations, Integrated Device Technology, Inc., 6024 Silver Creek Valley Road, San Jose, California 95138. All documents filed electronically
with the SEC (including exhibits) may also be accessed without charge through the Companys investor relations website at:
http://www.idt.com
. Information on our web site is not a part of this Proxy Statement.
OTHER MATTERS
The Company knows of no other matters that will be brought
before the Annual Meeting. However, if any other matters properly come before the Annual Meeting or any adjournment or postponement thereof, it is the intention of the persons named in the enclosed form of proxy to vote the shares they represent as
the Board of Directors may recommend.
|
By Order of the Board of Directors
|
|
/s/ Matthew D. Brandalise
|
|
Matthew D. Brandalise
Secretary
|
Dated: July 25, 2014
San Jose, California
58
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Using a
black ink
pen, mark your votes with an
X
as shown in this example. Please do not write outside the designated areas.
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x
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Electronic Voting Instructions
Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be
received by 1:00 a.m., Central Time, on September 16, 2014.
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Vote by Internet
Go to
www.envisionreports.com/IDTI
Or scan the QR code with your smartphone
Follow the steps outlined on the secure website
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Vote by
telephone
Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch
tone telephone
Follow the instructions provided by the recorded message
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Annual Meeting Proxy Card
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q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
q
- - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
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A
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Proposals The Board of Directors recommends a vote
FOR
all the nominees listed, and
FOR
Proposals 2 and
3.
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+
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1.
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Election of Directors:
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For
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Withhold
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For
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Withhold
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For
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Withhold
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01 - John Schofield
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¨
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¨
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02 - Gregory
Waters
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¨
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¨
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03 - Umesh Padval
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¨
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¨
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04 - Gordon Parnell
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¨
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¨
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05 - Donald Schrock
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¨
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¨
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06 - Ron Smith, Ph.D.
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¨
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¨
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07 - Norman Taffe
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¨
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¨
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For
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Against
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Abstain
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For
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Against
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Abstain
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2.
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To approve, on a non-binding, advisory basis, the compensation of
our named executive officers as disclosed in the Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (Say-on-Pay).
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¨
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¨
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¨
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3. To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm
of the Company for its fiscal year ending March 29, 2015.
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¨
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4. To transact such other business as may properly come
before the Annual Meeting or any adjournment or postponement thereof.
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B
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Non-Voting Items
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Change of Address
Please print new address below.
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C
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Authorized Signatures This section must be completed for your vote to be counted. Date and Sign
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Below
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Please sign exactly as
your name(s) appear(s) on your stock certificate. If shares are held of record in the names of two or more persons or in the name of husband and wife, whether as joint tenants or otherwise, both or all of such persons should sign the proxy. If
shares of stock are held of record by a corporation, the proxy should be executed by the president or vice president and the secretary or assistant secretary. Executors, administrators or other fiduciaries who execute the above proxy for a deceased
stockholder should give their full title. Please date the proxy.
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Date (mm/dd/yyyy) Please print date below.
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Signature 1 Please keep signature within the box.
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Signature 2 Please keep signature within the box.
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/ /
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01VQFA
q
IF YOU HAVE NOT VOTED VIA THE INTERNET
OR
TELEPHONE, FOLD ALONG THE
PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE.
q
- - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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Proxy INTEGRATED DEVICE TECHNOLOGY, INC.
|
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 16, 2014
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
The undersigned hereby appoints Gregory Waters and Matthew Brandalise, or either of them, each with power of substitution, to
represent the undersigned at the Annual Meeting of Stockholders of Integrated Device Technology, Inc. (the Company) to be held at the Companys principal place of business located at 6024 Silver Creek Valley Road, San Jose,
California 95138 on September 16, 2014, at 9:30 a.m., local time, or at any adjournment or postponement thereof, and to vote the number of shares the undersigned would be entitled to vote if personally present at the meeting on the matters
listed on the reverse side.
The Board of Directors recommends a vote FOR the nominees for election named in Proposal 1, and FOR
Proposals 2 and 3. THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE COMPANYS NOMINEES FOR ELECTION, AND FOR PROPOSALS 2 AND 3.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED, POSTAGE PAID ENVELOPE
SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING. YOU MAY ALSO VOTE ONLINE AT WWW.ENVISIONREPORTS.COM/IDTI.
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