As filed with the Securities and Exchange Commission on May 18, 2000.
Registration No. 333-30348
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
International Rectifier Corporation
(Exact name of registrant as specified in its charter)
___________________
Delaware 95-1528961
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
233 Kansas Street, El Segundo, California 90245
(Address of principal executive offices)
___________________
International Rectifier Corporation 2000 Stock Incentive Plan
(Full title of the plan)
___________________
L. Michael Russell,
Vice President and General Counsel
233 Kansas Street, El Segundo, California 90245
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:(310) 726-8000
___________________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
- -------------------------------------------------------------------------
Common Stock 4,500,000<1><2> $44.781<3> $201,515,625<3> $53,201<3>
par value $1 per shares
share
=========================================================================
<FN>
<1> This Registration Statement covers, in addition to the number
of shares of Common Stock stated above and pursuant to Rule
416(c) under the Securities Act of 1933, an indeterminate
number of shares and interests in the International Rectifier
Corporation 2000 Stock Incentive Plan (the "Plan") which by
reason of certain events specified in the Plan may become
subject to the Plan.
<2> Each share of Common Stock is accompanied by a share purchase
right pursuant to the Registrant's Rights Agreement, dated
August 14, 1996, as amended, with Chase Mellon Shareholder
Services, as Rights Agent.
<3> Pursuant to Rule 457(h), the maximum offering price, per share
and in the aggregate, and the registration fee were calculated
based upon the average of the high and low prices of the
Common Stock on May 16, 2000, as reported on the New York
Stock Exchange and published in The Western Edition of The
Wall Street Journal.
The Exhibit Index for this Registration Statement is at page S-3.
</FN>
</TABLE>
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant information)
will be sent or given to employees as specified by
Rule 428(b)(1) of the Securities Act of 1933, as amended (the
"Securities Act"). Such documents need not be filed with the
Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Securities
Act. These documents, which include the statement of
availability required by Item 2 of Form S-8, and the documents
incorporated by reference in this Registration Statement
pursuant to Item 3 of Form S-8 (Part II hereof), taken together,
constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed with the Commission by
International Rectifier Corporation (the "Company") are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1999;
(b) The Company's Quarterly Reports on Forms 10-Q for
the quarterly periods ended September 30, 1999, December 31,
1999, and March 31, 2000; and
(c) The description of the Company's Common Stock
contained in its Registration Statement on Form 8-A filed with
the Commission on June 17, 1985 (which incorporates by reference
the description of the Company's Common Stock contained in its
Registration Statement on Form S-3 filed with the Commission on
June 14, 1985) and the description of the Company's share
purchase rights contained in its Registration Statement on Form
8-A filed with the Commission on August 21, 1996, and any
amendment or report filed for the purpose of updating such
descriptions.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to
the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed
to be incorporated by reference into the prospectus and to be a
part hereof from the date of filing of such documents. Any
statement contained herein or in a document, all or a portion of
which is incorporated or deemed to be incorporated by reference
herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or amended, to constitute a part of this
Registration Statement.
Item 4. Description of Securities
The Company's Common Stock, par value $1 per share,
(the "Common Stock") is registered pursuant to Section 12 of the
Exchange Act, and, therefore, the description of securities is
omitted.
Item 5. Interests of Named Experts and Counsel
The legal matters addressed in the Opinion of Company
Counsel (attached hereto as Exhibit 5) have been passed on for
the Company by L. Michael Russell, the Executive Vice President,
Secretary and General Counsel of the Company. Mr. Russell is
compensated as an employee of
<PAGE>
the Company, is the owner of shares of Common Stock, is the
holder of options to acquire shares of Common Stock and is
eligible to participate in the Plan.
Item 6. Indemnification of Directors and Officers
As permitted by Section 145 of the General Corporation
Law of Delaware, the Company's Bylaws provide for
indemnification of directors, employees and agents of the
company against expenses (including attorneys' fees) and other
amounts paid in settlement actually and reasonably incurred by
them in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the Company), in which any such person was or is a
party or is threatened to be made a party, if such person acted
in good faith and in a manner such person reasonably believed to
be in or not opposed to the best interest of the Company and,
with respect to any criminal action or proceeding, if such
person had no reasonable cause to believe his conduct was
unlawful. In the case of an action or suit by or in the right of
the Company, such a person may not be indemnified in respect of
any claim, issue or matter as to which he has been adjudged
liable for negligence or misconduct in the performance of his
duty to the Company, unless and only to the extent the court in
which such action or suit was brought or the Court of Chancery
determines that such person is fairly and reasonably entitled to
indemnity for such expenses as such court may deem proper. In
each case, indemnification shall be made only upon specific
authorization of a majority of disinterested directors, by
written opinion of independent legal counsel or by the
stockholders, unless the director, officer, employee or agent
has been successful on the merits or otherwise in defense of any
action or suit, in which case he shall be indemnified without
such authorization. The Company's Bylaws require the Company to
pay the expenses incurred by a director or officer in defending
or investigating a threatened or pending action, suit or
proceeding in advance of the final disposition of such action,
suit or proceeding upon receipt by the Company of an undertaking
by or on behalf of such director or officer to repay such amount
if it is ultimately determined that he is not entitled to
indemnification and permit the Company to advance such expenses
to other employees and agents of the Company upon such terms and
conditions as are specified by the Company's Board of Directors.
The advancement of expenses, as well as indemnification,
pursuant to the Company's Bylaws is not exclusive of any other
rights which those seeking indemnification or advancement of
expenses from the Company may have.
The Company's Certificate of Incorporation eliminates
personal liability of directors to the Company or its
stockholders for monetary damages for breach of fiduciary duty
as director, except for: (i) any breach of the duty of loyalty
to the Company or its stockholders; (ii) acts or omissions not
in good faith or which involve intentional misconduct or knowing
violations of law; (iii) liability under Section 174 of the
Delaware General Corporation Law relating to certain unlawful
dividends and stock repurchases; or (iv) any transaction from
which the director derived an improper personal benefit.
The Company's Bylaws permit the Company to purchase
and maintain insurance on behalf of any director, officer,
employee or agent of the Company against liability asserted
against him or her in any such capacity, whether or not the
Company would have the power to indemnify him against such
liability under the provisions of the Bylaws. However, the
Company maintains liability insurance providing coverage only
with respect to claims made against officers and directors as to
which they are entitled to be indemnified by the Company.
<PAGE>
The Company has a policy of directors and officers
liability insurance which insures directors and officers against
the cost of defense, settlement or payment of a judgment under
certain circumstances.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See the attached Exhibit Index at page S-3.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus
required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the
prospectus any facts or events arising after the effective date
of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any
material information with respect to the plan of distribution
not previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement;
(2) That, for the purpose of
determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by
means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
(and, where applicable, each
<PAGE>
filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Exchange Act) that is incorporated
by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(h) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of El Segundo, State of
California, on May 17, 2000.
By: /s/ Michael P. McGee
-----------------------------
Michael P. McGee
Its: Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints Alexander Lidow and Michael P. McGee, and both of
them, his true and lawful attorney-in-fact and agent, with full
powers of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Commission, granting unto said attorneys-in-fact and agents,
both acting alone, full power and authority to do and perform
each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, both
acting alone, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Eric Lidow
- --------------- Chairman of the Board May 17, 2000
Eric Lidow
/s/ Alexander Lidow
- -------------------- Chief Executive Officer and May 17, 2000
Alexander Lidow Director (Principal Executive
Officer)
/s/ Michael P. McGee
- -------------------- Executive Vice President, May 17, 2000
Michael P. McGee Chief Financial Officer (Principal
Financial and Accounting Officer)
/s/ Robert J. Mueller
- -------------------- Executive Vice President May 17, 2000
Robert J. Mueller and Director
/s/ Donald S. Burns
- -------------------- Director May 12, 2000
Donald S. Burns
/s/ George Krsek
- -------------------- Director May 12, 2000
George Krsek
/s/ Derek B. Lidow
- -------------------- Director May 12, 2000
Derek B. Lidow
/s/ Minoru Matsuda
- -------------------- Director May 13, 2000
Minoru Matsuda
/s/ James D. Plummer
- -------------------- Director May 16, 2000
James D. Plummer
/s/ Jack O. Vance
- -------------------- Director May 18, 2000
Jack O. Vance
/s/ Rochus E. Vogt
- -------------------- Director May 12, 2000
Rochus E. Vogt
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4. International Rectifier Corporation 2000 Stock Incentive
Plan
5. Opinion of Company Counsel (opinion re legality).
23.1 Consent of PricewaterhouseCoopers L.L.P. (consent
of independent accountants).
23.2 Consent of Company Counsel (included in Exhibit 5).
24. Power of Attorney (included in this Registration
Statement under "Signatures").
<PAGE>
INTERNATIONAL RECTIFIER CORPORATION
2000 STOCK INCENTIVE PLAN
1. THE PLAN.
1.1 Purpose.
The purpose of this Plan is to promote the success of
the Company by providing an additional means through the
grant of Awards to attract, motivate, retain and reward
employees (including officers) and directors of the Company
with awards and incentives for individual performance and
for financial performance of the Company. "Corporation"
means International Rectifier Corporation and "Company"
means the Corporation and/or its Subsidiaries, unless the
context otherwise requires. These terms and other
capitalized terms are defined in Article 6.
1.2 Administration and Authorization; Power and
Procedure.
1.2.1 Committee. This Plan shall be
administered by and all Awards to Eligible Persons shall be
authorized by the Committee. Action of the Committee with
respect to the administration of this Plan shall be taken
pursuant to a majority vote or by written consent of its
members. Awards to a non-employee director shall be subject
to approval or ratification by the Board.
1.2.2 Plan Awards; Interpretation; Powers of
Committee. Subject to the express provisions of this Plan,
the Committee shall have the authority:
(a) to determine eligibility and, from among those
persons determined to be eligible, the particular Eligible
Persons who will receive an Award;
(b) to grant Awards to Eligible Persons, determine
the price at which securities will be offered or awarded
and the amount of securities to be offered or awarded to any
of such persons, and determine the other specific terms and
conditions of such Awards consistent with the express limits
of this Plan, and establish the installments (if any) in
which such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is
required, and establish the events of termination or
reversion of such Awards, provided, however, that any Awards
to a non-employee director shall be subject to approval or
ratification by the Board;
(c) to approve the forms of Award Agreements
(which need not be identical either among types of awards or
among Participants) and any amendments thereto;
(d) to construe and interpret this Plan and
any agreements defining the rights and obligations of the
Company and Participants under this Plan, further define the
terms used in this Plan, and prescribe, amend and rescind
rules and regulations relating to the administration of this
Plan;
(e) to amend, cancel, modify, or waive the
Corporation's rights with respect to, or modify, discontinue,
suspend, or terminate any or all outstanding Awards held by
Participants, subject to any required consent under Section 5.6;
(f) to adjust the exercisability, term (subject to
the limits of Section 1.6) or vesting schedule of any or all
outstanding Awards, adjust the number of shares subject to
any Award, or otherwise change previously imposed terms and
conditions as deemed appropriate by the Committee, by
amendment, waiver or other legally valid means (which may
result, among other changes, in a different number of shares
subject to the Award, a different vesting or exercise
period, or, except as provided below, a different exercise
or purchase price), in each case subject to Sections 1.4 and
5.6; provided, however, that in no case shall the exercise
price of any Option be reduced (by amendment, substitution,
cancellation and regrant or other means);
(g) to provide for the settlement of an Award
in cash, shares or another Award, based upon the intrinsic
value of such Award at the time of settlement or such other
valuation methodology as the Committee may approve; and
(h) to make all other determinations and take such
other action as contemplated by this Plan or as may be
necessary or advisable for the administration of this Plan
and the effectuation of its purposes.
1.2.3 Binding Determinations/Liability
Limitation. Any action taken by, or inaction of, the
Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan and within its authority
hereunder or under applicable law shall be within the
absolute discretion of that entity or body and shall be
conclusive and binding upon all persons. Neither the Board
nor any Committee, nor any member thereof or person acting
at the direction thereof, shall be liable for any act,
omission, interpretation, construction or determination made
in good faith in connection with this Plan (or any Award
made under this Plan), and all such persons shall be
entitled to indemnification and reimbursement by the Company
in respect of any claim, loss, damage or expense
(including, without limitation, attorneys' fees) arising or
resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance
coverage that may be in effect from time to time.
1.2.4 Reliance on Experts. In making any
determination or in taking or not taking any action under
this Plan, the Committee or the Board, as the case may be,
may obtain and may rely upon the advice of experts,
including professional advisors to the Corporation. No
director, officer or agent of the Company shall be liable
for any such action or determination taken or made or
omitted in good faith.
1.2.5 Bifurcation of Plan Administration and
Delegation. Subject to the limits set forth in the
definition of "Committee" in Article 6, the Board may
delegate different levels of authority to different
committees with administration and grant authority under
this Plan, provided that each designated Committee granting
any Options hereunder will consist exclusively of a member
or members of the Board. A majority of the members of the
acting Committee will constitute a quorum. The vote of a
majority of a quorum or the unanimous written consent of a
Committee will constitute action by the Committee. A
Committee may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of
the Company.
1.3 Participation.
Awards may be granted by the Committee only to those
persons that the Committee determines to be Eligible
Persons. An Eligible Person who has been granted an Award
may, if otherwise eligible, be granted additional Awards,
subject to the terms of this Plan.
1.4 Shares Available for Awards; Share Limits.
1.4.1 Shares Available. Subject to the
provisions of Section 5.2, the capital stock that may be
delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any
shares of its Common Stock held as treasury shares. The
shares may be delivered for any lawful consideration.
1.4.2 Share Limits. The maximum number of
shares of Common Stock that may be delivered pursuant to
Awards granted to Eligible Persons under this Plan
shall not exceed 4,500,000 (the "SHARE LIMIT"). The maximum
number of shares of Common Stock that may be delivered
pursuant to options qualified as Incentive Stock Options
granted under this Plan is 2,250,000. The maximum number of
shares subject to options that during any three consecutive
calendar years are granted to any individual shall be limited
to 1,200,000. The maximum individual limit on the number of
shares in the aggregate subject to all Awards that during any
three consecutive calendar years are granted under this Plan
shall be 1,200,000. Each of these share limits shall be subject
to adjustment as contemplated by this Section 1.4 and
Section 5.2.
1.4.3 Restricted Stock Limit. The maximum number
of shares that may be delivered under Restricted Stock or Stock
Unit Awards that are issued only for services rendered (or for
services and nominal consideration), as distinguished from an
Award in payment or settlement of other rights, deferred
compensation or otherwise expressly in lieu of cash compensation,
shall not exceed 225,000 shares, subject to adjustments under or
contemplated by Section 1.4 or 5.2.
1.4.4 Share Reservation; Replenishment and
Reissue of Unvested Awards. No Award may be granted under
this Plan unless, on the date of grant, the sum of (1) the
maximum number of shares issuable at any time pursuant to
such Award, plus (2) the number of shares that have
previously been issued pursuant to Awards granted under this
Plan, other than reacquired shares available for reissue
consistent with any applicable legal limitations as
appropriately adjusted, plus (3) the maximum number of
shares that may be issued at any time after such date of
grant pursuant to Awards that are outstanding on such date,
does not exceed the Share Limit. Shares that are subject to
or underlie Awards which expire or for any reason are cancelled
or terminated, are forfeited, fail to vest, or for any other
reason are not paid or delivered under this Plan, as well as
reacquired shares under the Plan, shall again, except to the
extent prohibited by law, be available for subsequent Awards
under the Plan. Except as limited by law, if an Award is or
may be settled only in cash, such Award need not be counted
against any of the limits under this Section 1.4.
1.5 Grant of Awards.
Subject to the express provisions of this Plan, the
Committee shall determine the number of shares of Common
Stock subject to each Award, the price (if any) to be paid
for the shares or the Award and, in the case of performance
share awards, in addition to matters addressed in Subsection
1.2.2, the specific objectives, goals and performance
criteria (such as an increase in sales, market value,
earnings or book value over a base period, the years of
service before vesting, the relevant job classification or
level of responsibility or other factors) that further
define the terms of the performance share award. Each Award
shall be evidenced by an Award Agreement signed by the
Corporation and, if required by the Committee, by the
Participant. The Award Agreement shall set forth the
material terms and conditions of the Award established by
the Committee consistent with the specific provisions of this
Plan.
1.6 Award Period.
Each Award and all executory rights or obligations
under the related Award Agreement shall expire on such date
(if any) as shall be determined by the Committee, but not later
than ten (10) years after the Award Date in the case of Options
or other rights to acquire Common Stock; provided, however, that
any payment of cash or delivery of shares pursuant to an Award
may be delayed until a further date if specifically
authorized by the Committee pursuant to Article 3 or
otherwise, by resolution, written consent or other writing.
1.7 Limitations on Exercise and Vesting of Awards.
1.7.1 Provisions for Exercise. Unless the
Committee otherwise expressly provides, no Award shall be
exercisable or shall vest until at least six months after
the Award Date, and once exercisable an Award shall remain
exercisable until the expiration or earlier termination of
the Award.
1.7.2 Procedure. Any exercisable Award
shall be deemed to be exercised when the Secretary of the
Corporation receives written notice of such exercise from
the Participant, together with any required payment made in
accordance with Section 2.2.
1.7.3 Fractional Shares/Minimum Issue.
Fractional share interests shall be disregarded, but may be
accumulated for future exercises. The Committee, however,
may determine in the case of Eligible Persons that cash,
other securities, or other property will be paid or
transferred in lieu of any fractional share interests. No
fewer than 100 shares may be purchased on exercise of any
Award at one time unless the number purchased is the total
number at the time available for purchase under the Award.
1.8 Acceptance of Notes to Finance Exercise.
The Corporation may, with the Committee's approval,
accept one or more notes from any Eligible Person in
connection with the exercise or receipt of any outstanding
Award; provided that any such note shall be subject to the
following terms and conditions:
(a) The principal of the note shall not exceed the
amount required to be paid to the Corporation upon the
exercise or receipt of one or more Awards under the Plan and
the note shall be delivered directly to the Corporation in
consideration of such exercise or receipt.
(b) The initial term of the note shall be determined by
the Committee; provided that the term of the note, including
extensions, shall not exceed a period of five years.
(c) The note shall provide for full recourse to the
Participant and shall bear interest at a rate determined by
the Committee but not less than the interest rate necessary
to avoid the imputation of interest under the Code.
(d) If the Participant retires or the Participant's
employment or service otherwise terminates, the unpaid
principal balance of the note shall become due and payable
on the 30th business day after such event; provided,
however, that if a sale of such shares would cause such
Participant to incur liability under Section 16(b) of the
Exchange Act, the unpaid balance shall become due and
payable on the 10th business day after the first day on
which a sale of such shares could have been made without
incurring such liability assuming for these purposes
that there are no other transactions (or deemed transactions
in securities of this Corporation) by the Participant
subsequent to such event.
(e) If required by the Committee or by applicable law,
the note shall be secured by a pledge of any shares or
rights financed thereby in compliance with applicable law.
(f) The terms, repayment provisions, and collateral
release provisions of the note and the pledge securing the
note shall conform with applicable rules and regulations of
the Federal Reserve Board as then in effect.
1.9 No Transferability; Limited Exception to Transfer
Restrictions.
1.9.1 Limit on Exercise and Transfer. Unless
otherwise expressly provided in (or pursuant to) this
Section 1.9, by applicable law and by the Award Agreement,
as the same may be amended, (1) all Awards are non-
transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge,
encumbrance or charge; Awards shall be exercised only by the
Participant; and (2) amounts payable or shares issuable
pursuant to an Award shall be delivered only to (or for the
account of) the Participant.
1.9.2 Exceptions. The Committee may permit
Awards to be exercised by and paid to the Participant's
"family members" (as defined below), charitable
institutions, or other persons as may be approved by the
Committee, pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be
subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made by the
Participant for estate planning, tax planning, or
essentially donative purposes and that no consideration
(other than nominal consideration or an exchange for an
interest in the family related entity) is received by the
Participant or in settlement of marital property or similar
rights or interests. Notwithstanding the foregoing, Incentive
Stock Options and Restricted Stock Awards shall be subject to
any and all additional transfer restrictions under the Code.
For purposes hereof, a "family member" shall mean
any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-
in-law, or sister-in-law, including adoptive relationships, any person
sharing the Participant's household (other than a tenant or an
employee), a trust in which these persons (including the
Participant) have more than fifty percent (50%) of the
beneficial interest, a foundation in which these persons
(including the Participant) control the management of
assets, and any other entity in which these persons
(including the Participant) own more than fifty
percent (50%) of the voting interests.
1.9.3 Further Exceptions to Limits on Transfer.
The exercise and transfer restrictions in Subsection 1.9.1
shall not apply to:
(a) transfers to the Corporation,
(b) the designation of a beneficiary to receive
benefits in the event of the Participant's death or, if
the Participant has died, transfers to or exercise by the
Participant's beneficiary, or, in the absence of a validly
designated beneficiary, transfers by will or the laws of
descent and distribution,
(c) if the Participant has suffered a disability,
permitted transfers or exercises on behalf of the
Participant by his or her legal representative, or
(d) the authorization by the Committee of
"cashless exercise" procedures with third parties who
provide financing for the purpose of (or who otherwise
facilitate) the exercise of Awards consistent with
applicable laws and the express authorization of the
Committee.
2. OPTIONS.
2.1 Grants.
One or more Options may be granted under this Article
to any Eligible Person. Each Option granted shall be
designated in the applicable Award Agreement, by the
Committee, as either an Incentive Stock Option, subject to
Section 2.3, or a Nonqualified Stock Option.
2.1.1 Special International Grants. One or more
Options or other Awards may be granted to Eligible Employees
who provide services to the Corporation outside of the
United States. Options or other Awards granted to such
Eligible Employees may be granted pursuant to the terms and
conditions of any applicable sub-plans, if any, appended to
the Plan and approved by the Board.
2.2 Option Price.
2.2.1 Pricing Limits. The purchase price per
share of the Common Stock covered by each Option shall be
determined by the Committee at the time of the Award, but
shall not be less than 100% (110% in the case of an
Incentive Stock Option granted to a Participant described in
Section 2.4) of the Fair Market Value per share of the
Common Stock on the date of grant, except as provided in
Section 2.6 and subject to adjustments provided by Section
5.2.
2.2.2 Payment Provisions. The purchase price of
any shares purchased on exercise of an Option granted under
this Article shall be paid in full at the time of each
purchase in one or a combination of the following methods:
(a) in cash or by electronic funds transfer; (b) by check
payable to the order of the Corporation; (c) if authorized
by the Committee or specified in the applicable Award
Agreement, by a promissory note of the Participant
consistent with the requirements of Section 1.8; (d) by
notice and third party payment in such manner as may be
authorized by the Committee; or (e) by the delivery of
shares of Common Stock of the Corporation already owned by
the Participant, provided, however, that the Committee may
in its absolute discretion limit the Participant's ability
to exercise an Award by delivering such shares, and provided
further that any shares delivered which were initially
acquired upon exercise of a stock option must have been
owned by the Participant at least six months as of the date
of delivery. Shares of Common Stock used to satisfy the
exercise price of an Option shall be valued at their Fair
Market Value on the date of exercise.
2.3 Limitations on Grant and Terms of Incentive Stock
Options.
2.3.1 $100,000 limit. To the extent that the
aggregate "Fair Market Value" of stock with respect to which
incentive stock options first become exercisable by a
Participant in any calendar year exceeds $100,000, taking
into account both Common Stock subject to Incentive Stock
Options under this Plan and stock subject to Incentive Stock
Options under all other plans of the Company, such options
shall be treated as Nonqualified Stock Options. For this
purpose, the "Fair Market Value" of the stock subject to
options shall be determined as of the date the options were
awarded. In reducing the number of options treated as
Incentive Stock Options to meet the $100,000 limit, the most
recently granted options shall be reduced first. To the
extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Committee may, in
the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares
acquired pursuant to the exercise of an Incentive Stock
Option.
2.3.2 Option Period. Each Option and all rights
thereunder shall expire no later than 10 years after the
Award Date, but may be subject to early termination pursuant
to Section 5.2 and/or deferred pay-out elections, as the
Committee may provide.
2.3.3 Other Code Limits. Incentive Stock Options
may only be granted to Eligible Employees of the Corporation or
of a Subsidiary that satisfies the other eligibility requirements
of the Code. There shall be imposed in any Award Agreement
relating to Incentive Stock Options such other terms and
conditions as from time to time are required in order that the Option
be an "incentive stock option" as that term is defined in
Section 422 of the Code.
2.4 Limits on 10% Holders.
No Incentive Stock Option may be granted to any person
who, at the time the Option is granted, owns (or is deemed
to own under Section 424(d) of the Code) shares of
outstanding Common Stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such Option is at
least 110% of the Fair Market Value of the stock subject to
the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option
is granted.
2.5 Effects of Termination of Service (Including
Retirement).
Subject to earlier termination pursuant to or as
contemplated by Section 1.6
or 5.2:
2.5.1 Options. Any Option outstanding at the
time of a Retirement or other termination of employment
(or other service specified in the Award Agreement) for
any reason shall remain exercisable for such period of
time thereafter as shall be determined by the Committee
and set forth in the Award Agreement, but no such Option
shall be exercisable after the final expiration date of the
Option.
2.5.2 Other Awards. The Committee shall establish
in respect of each other Award granted hereunder the
Participant's rights and benefits (if any) in the event of a
Retirement or other termination of employment or service and in
so doing may make distinctions based upon the cause of termination and
the nature of the Award. Unless otherwise provided in the
applicable Award Agreement and subject to the other
provisions of this Plan, Restricted Stock Awards and
Performance Share Awards, to the extent such Awards have not
become vested as of the date of a Retirement or other
termination of employment or services with the Company,
shall be terminated upon such date.
2.6 Options and Rights in Substitution for Stock
Options Granted by Other Corporations.
Options may be granted to Eligible Persons under this
Plan in substitution for employee stock options granted by
other entities to persons who are or who will become
Eligible Persons in respect of the Company, in connection
with a distribution, merger or reorganization by or with the
granting entity or an affiliated entity, or the acquisition
by the Company, directly or indirectly, of all or a
substantial part of the stock or assets of the other entity,
on terms necessary to preserve the intrinsic value of prior
outstanding options.
3. RESTRICTED STOCK OR UNIT AWARDS.
3.1 Grants.
3.1.1 General. The Committee may, in its
discretion, grant one or more Restricted Stock or Restricted
Stock Unit Awards to any Eligible Person. Each Restricted
Stock Award Agreement shall specify the number of shares of
Common Stock to be issued to the Participant, the date of such
issuance, the consideration for such shares (but not less than
the minimum lawful consideration under applicable state law) by
the Participant, the extent (if any) to which and the time (if
ever) at which the Participant shall be entitled to
dividends, voting and other rights in respect of the shares
prior to vesting, and the restrictions (which may be based
on performance criteria, passage of time or other factors or
any combination thereof) imposed on such shares and the
conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than six months after the
Award Date, except to the extent the Committee may otherwise
provide. Any stock certificates evidencing shares of Restricted
Stock pending the lapse of the restrictions ("Restricted Shares")
shall bear a legend making appropriate reference to the
restrictions imposed hereunder and shall be held by the Corporation
or by a third party designated by the Committee until the restrictions
on such shares shall have lapsed and the shares shall have
vested in accordance with the provisions of the Award and
Section 1.7. Upon issuance of the Restricted Stock Award,
the Participant may be required to provide such further
assurance and documents as the Committee may
require to enforce the restrictions.
3.1.2 Special Provisions for Stock Units.
Subject to such rules and procedures as the Committee may
establish from time to time, the Committee may, in its
discretion, authorize a Stock Unit Award or the crediting of
Stock Units pursuant to the terms of this Plan and any
applicable deferred compensation plan maintained by the
Company, permit an Eligible Person to irrevocably elect to
defer or receive in Stock Units all or a portion of any
Award hereunder, or may grant Stock Units in lieu of, in
exchange for, in respect of, or in addition to any other
Award under this Plan or any other stock option plan or
deferred compensation plan of the Company. The specific
terms, conditions and provisions relating to each Stock Unit
grant or election, including the form of payment to be made
at or following the vesting thereof, shall be set forth in
or pursuant to the applicable agreement or Award and the relevant
Company deferred compensation plan, in form substantially as
approved by the Committee.
3.1.3 Stock Unit Payouts. The Committee
shall determine, among other terms of a Stock Unit Award,
the form of payment of Stock Units, whether in cash, Common
Stock, or other consideration (including any other Award) or
any combination thereof, and the applicable vesting and payout
provisions of the Stock Units. The Committee in the applicable
Award Agreement or the relevant Company deferred compensation
plan may permit the Participant to elect the form and time of
payout of vested Stock Units on such conditions or subject to
such procedures as the Committee may impose, and may permit Stock
Unit offsets or other provision for payment of any
applicable taxes that may be due on the crediting, vesting
or payment in respect of the Stock Units.
3.2 Restrictions.
3.2.1 Pre-Vesting Restraints. Except as
provided in Section 3.1 and 1.9, restricted shares comprising
any Restricted Stock Award may not be sold, assigned,
transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until the restrictions on such
shares have lapsed and the shares have become vested.
3.2.2 Dividend and Voting Rights. Unless
otherwise provided in the applicable Award Agreement, a
Participant receiving a Restricted Stock Award shall be entitled to
vote such shares but shall not be entitled to dividends on any of the
shares until the shares have vested. Such dividends shall be
retained in a restricted account until the shares have
vested and shall revert to the Corporation if they fail to vest.
3.2.3 Cash Payments. If the Participant shall
have paid or received cash (including any dividends) in
connection with the Restricted Stock Award, the Award
Agreement shall specify the provisions for return of the
cash (with or without an earnings factor) as to any
restricted shares which cease to vest or be eligible for
vesting.
3.3 Return to the Corporation.
Unless the Committee otherwise expressly provides,
Restricted Shares that remain subject to restrictions at the
time of a Retirement or other termination of employment or
other service or are subject to other conditions to vesting
that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be
returned to the Corporation in such manner and on such terms
as the Committee shall therein provide.
4. PERFORMANCE SHARE AWARDS, STOCK BONUSES AND DEFERRED
PAYMENT OPPORTUNITIES.
4.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant Performance
Share Awards to Eligible Persons based upon such factors as
the Committee shall deem relevant in light of the specific
type and terms of the award. An Award Agreement shall
specify the maximum number of shares of Common Stock (if
any) subject to the Performance Share Award, the
consideration (but not less than the minimum lawful
consideration) to be paid for any such shares as may be
issuable to the Participant, the duration of the Award and
the conditions upon which delivery of any shares or cash to
the Participant shall be based. The amount of cash or shares
or other property that may be deliverable pursuant to such
Award shall be based upon the degree of attainment over a
specified period of not more than 10 years (a "performance
cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part
thereof) or the Participant as may be established by the
Committee. The Committee may provide for full or partial
credit, prior to completion of such performance cycle or the
attainment of the performance achievement specified in the
Award, in the event of the Participant's death, Retirement,
or Total Disability, a Change in Control Event or in such
other circumstances as the Committee, consistent with
Subsection 5.10.3(b), if applicable, may determine.
4.2 Special Performance-Based Share Awards.
Without limiting the generality of the foregoing, and
in addition to options granted under other provisions of
this Article 4, other performance-based awards within the
meaning of Section 162(m) of the Code ("Performance-Based
Awards"), whether in the form of restricted stock,
performance stock, phantom stock or other rights, the
vesting of which depends on the performance of the Company
on a consolidated, segment, subsidiary, division, unit, or
station basis with reference to revenue growth, gross
profit, earnings (before or after taxes; or before or after
taxes, interest, depreciation, and/or amortization), cash
flow, stock price appreciation, return on equity or on
assets or on net investment, or cost containment or
reduction, or any combination thereof (the "business
criteria") relative to preestablished performance goals, may
be granted under this Plan. The applicable business criteria
and the specific performance goals must be approved by the
Committee in advance of applicable deadlines under the Code
and while the performance relating to such goals remains
substantially uncertain. The applicable performance
measurement period may be not less than one nor more than 10
years. Performance targets shall be adjusted to mitigate the
unbudgeted impact of material, unusual or nonrecurring gains
and losses, accounting changes or other extraordinary events
not foreseen at the time the targets were set. Other types
of performance and non-performance awards may also be
granted under the other provisions of this Plan.
4.2.1 Eligible Class. The eligible class of
persons for Awards under this Section shall be employees
(including officers) of the Corporation.
4.2.2 Maximum Award. In no event shall stock-
based grants to a Participant under this Section 4.2 exceed
the individual share limits of Subsection 1.4.2 or cash-
based grants be awarded which shall be payable in an amount
of more than $3,000,000 with respect to a Participant's
performance during any consecutive three-year period.
4.2.3 Committee Certification. Before any
Performance-Based Award under this Section 4.2 is paid and
to the extent required by Section 162(m) of the Code, the
Committee must certify that the material terms of the
Performance-Based Award were satisfied.
4.2.4 Terms and Conditions of Awards. The
Committee will have discretion to determine the restrictions
or other limitations of the individual Awards under this
Section 4.2 (including the authority to reduce Awards,
payouts or vesting or to pay no Awards, in its sole
discretion, if the Committee preserves such authority at the
time of grant by language to this effect in its authorizing
resolutions or otherwise).
4.2.5 Stock Payout Features. In lieu of cash
payment of an Award, the Committee may require or allow all
or a portion of the Award to be paid in the form of stock,
Restricted Shares or an Option.
4.3 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible
Person to reward exceptional or special services,
contributions or achievements in the manner and on such
terms and conditions (including any restrictions on such
shares) as determined from time to time by the Committee.
The number of shares so awarded shall be determined by the
Committee. The Award may be granted independently or in lieu
of a cash bonus.
4.4 Deferred Payments Opportunities.
The Committee may authorize for the benefit of any
Eligible Person the deferral of any payment of cash or
shares that may become due or of cash otherwise payable
under this Plan, and provide for accredited benefits thereon
based upon such deferment, at the election or at the request
of such Participant, subject to the other terms of this
Plan. Such deferral opportunities shall be subject to such
further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of
Participants, and may take the form of one or more types of
Awards authorized under this Plan.
5. OTHER PROVISIONS.
5.1 Rights of Eligible Persons, Participants and
Beneficiaries.
5.1.1 Employment Status. Status as an Eligible
Person shall not be construed as a commitment that any Award
will be made under this Plan to an Eligible Person or to
Eligible Persons generally.
5.1.2 No Employment Contract. Nothing contained
in this Plan (or in any other documents under this Plan or
in any Award) shall confer upon any Eligible Person or
Participant any right to continue in the employ or other
service of the Company, constitute any contract or agreement
of employment or other service or affect an employee's
status as an employee at will, nor shall interfere in any
way with the right of the Company to change a person's
compensation or other benefits, or to terminate his or her
employment or other service, with or without cause. Nothing
in this Section, however, is intended to adversely affect
any express independent right of such person under a
separate employment or service contract other than an Award
Agreement. Service between specified vesting dates shall
provide no basis for partial vesting or pro rata benefits
unless an Award Agreement expressly otherwise provides.
5.1.3 Plan Not Funded. Awards payable under this
Plan shall be payable in shares or from the general assets
of the Company, and (except as provided in Subsection 1.4.4)
no special or separate reserve, fund or deposit shall be
made to assure payment of such Awards. No Participant,
Beneficiary or other person shall have any right, title or
interest in any fund or in any specific asset (including
shares of Common Stock, except as expressly otherwise
provided) of the Company by reason of any Award hereunder.
Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor
any action taken pursuant to the provisions of this Plan
shall create, or be construed to create, a trust of any kind
or a fiduciary relationship between the Company and any
Participant, Beneficiary or other person. To the extent that
a Participant, Beneficiary or other person acquires a right
to receive payment pursuant to any Award hereunder, such
right shall be no greater than the right of any unsecured
general creditor of the Company.
5.2 Adjustments; Acceleration.
5.2.1 Adjustments. Upon or in contemplation of
any reclassification, recapitalization, stock split
(including a stock split in the form of a stock dividend) or
reverse stock split; any merger, combination, consolidation,
or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution ("spin-off") in respect
of the Common Stock (whether in the form of securities or
property); any exchange of Common Stock or other securities
of the Corporation, or any similar, unusual or extraordinary
corporate transaction in respect of the Common Stock; or a
sale of all or substantially all the assets of the Company
as an entirety ("asset sale"); then the Committee shall, in
such manner, to such extent (if any) and at such time as it
deems appropriate and equitable in the circumstances:
(a) in any of such events, proportionately adjust
any or all of (i) the number and type of shares of
Common Stock (or other securities) that thereafter may be
made the subject of Awards (including the specific maximum
and numbers of shares set forth elsewhere in this Plan),
(ii) the number, amount and type of shares of Common Stock
(or other securities or property) subject to any or all
outstanding Awards, (iii) the grant, purchase, or exercise
price of any or all outstanding Awards, (iv) the securities,
cash or other property deliverable upon exercise of any
outstanding Awards, or (v) (subject to limitations under
Subsection 5.10.3) the performance standards appropriate to
any outstanding Awards, or
(b) in the case of a reclassification,
recapitalization, merger, consolidation, combination, or
other reorganization, spin-off or asset sale, make provision
for a cash payment or for the assumption, substitution or
exchange of any or all outstanding share-based Awards or the
cash, securities or property deliverable to the holder of
any or all outstanding share-based Awards, based upon the
distribution or consideration payable to holders of the
Common Stock upon or in respect of such event.
The Committee may adopt such valuation methodologies
for outstanding Options as it deems reasonable in the event
of a cash or property settlement or, in the case of Options
or similar rights, may base such settlement solely upon the
excess (if any) of the price of the underlying shares
payable in the transaction over the exercise or strike price
of the Award.
In each case, with respect to Awards of Incentive Stock
Options, no adjustment shall be made in a manner that would
cause the Plan to violate Section 422 or 424(a) of the Code
or any successor provisions without the written consent of
holders materially adversely affected thereby.
In any of such events, the Committee may take such
action prior to such event to the extent that the Committee
deems the action necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is or will be
available to stockholders generally.
5.2.2 Acceleration of Awards Upon Change in
Control. Unless prior to a Change in Control Event the
Committee determines that, upon its occurrence, benefits
under any or all Awards shall not be accelerated or determines
that only certain or limited benefits under any or all Awards
shall be accelerated and the extent to which they shall be
accelerated, and/or establishes a different time in respect
of such Change in Control Event for such acceleration, then
upon the occurrence of a Change in Control Event:
(a) each Option shall become immediately
exercisable,
(b) Restricted Stock shall immediately vest free
of restrictions, and
(c) each Performance Share Award shall become
payable to the Participant.
Any discretion with respect to these events shall be
limited to the extent required by applicable accounting
requirements in the case of a transaction intended to be
accounted for as a pooling of interests transaction.
The Committee may override the limitations on
acceleration in this Subsection 5.2.2 by express provision
in the Award Agreement and may accord any Eligible Person a
right to refuse any acceleration, whether pursuant to the
Award Agreement or otherwise, in such circumstances as the
Committee may approve. Any acceleration of Awards shall
comply with applicable legal requirements and, if necessary
to accomplish the purposes of the acceleration or if the
circumstances require, may be deemed by the Committee to
occur (subject to Subsection 5.2.4) a limited period of time
not greater than 30 days before the event. Without limiting
the generality of the foregoing, the Committee may deem an
acceleration to occur immediately prior to the applicable
event and/or reinstate the original terms of an Award if an
event giving rise to an acceleration does not occur.
5.2.3 Possible Early Termination of Awards. Upon
the occurrence of either of the following:
(a) any Option or other right to acquire Common
Stock under this Plan has been fully accelerated as required
or permitted by Subsection 5.2.2 but is not exercised prior to
(1) a dissolution of the Company, or (2) an event described in
Subsection 5.2.1 that the Company does not survive, or
(b) the Board or the Committee has provided for
settlement at the price paid in a Change in Control Event in
respect of at least the vested portion of an outstanding Option
or other right upon or in anticipation of a Change in Control
Event approved by the Board, such Option or right shall
terminate, subject to any provision that has been expressly
made by the Board, the Committee through a plan of reorganization
approved by the Board or the Committee, or otherwise, for the survival,
substitution, assumption, exchange or other settlement of
such Option or right.
5.2.4 Possible Rescission of Acceleration. If
the vesting of an Award has been accelerated expressly in
anticipation of an event or subject to stockholder approval
of an event and the Committee or the Board later determines
that the event will not occur, the Committee may rescind the
effect of the acceleration as to any then outstanding and
unexercised or otherwise unvested Awards.
5.2.5 Acceleration Upon Termination of Service in
Anticipation of, or Following a Change In Control. The
Committee may, either at the time the Award is granted or at
any time while the Award remains outstanding, provide that
the Award shall accelerate in the event the Participant's
employment or other service is terminated by the Company, or
the surviving entity, for any reason other than Dismissal
for Cause within a designated period (not to exceed eighteen
(18) months) following the announcement of any Change in
Control with respect to which the Award does not otherwise
accelerate. Any Award so accelerated shall remain
exercisable until the expiration or earlier termination of
the Award.
5.3 Effect of Termination of Service on Awards.
5.3.1 General. The Committee shall establish the
effect of a Retirement or other termination of employment or
service on the rights and benefits under each Award under
this Plan and in so doing may make distinctions based upon
the cause of termination.
5.3.2 Termination of Consulting or Affiliate
Services. If the Participant is not an Eligible Employee or
director and provides services as an Other Eligible Person,
the Committee shall be the sole judge of whether the
Participant continues to render services to the Company,
unless a contract or the Award otherwise provides. If in
these circumstances the Committee notifies the Participant
in writing that a termination of services of the Participant
for purposes of this Plan has occurred, then (unless the
contract or Award otherwise expressly provides), the
Participant's termination of services for purposes of
Section 2.6, 3.3 or 4 shall be the date which is 10 days
after the Committee's mailing of the notice or, in the case
of a Termination For Cause, the date of the mailing of the
notice.
5.3.3 Events Not Deemed Terminations of Service.
Subject to the requirements of applicable law, the Committee
shall establish the effect of a leave of absence on the
employment or service relationship and the rights and
benefits under each Award under this Plan. In no event shall
an Award be exercised after the expiration of the term set
forth in the Award Agreement.
5.3.4 Effect of Change of Subsidiary Status. For
purposes of this Plan and any Award, if an entity ceases to be a
Subsidiary, a termination of employment or service shall be
deemed to have occurred immediately upon such cessation of Subsidiary
status with respect to each Eligible Person in respect of
the Subsidiary who does not continue as an Eligible Person
in respect of another entity within the Company.
5.4 Compliance with Laws.
This Plan, the granting and vesting of Awards under
this Plan, the offer, issuance and delivery of shares of
Common Stock, the acceptance of promissory notes and/or the
payment of money under this Plan or under Awards are subject
to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state
and federal securities law, federal margin requirements) and
to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Company,
be necessary or advisable in connection therewith. In
addition, any securities delivered under this Plan may be
subject to any special restrictions that the Committee may
require to preserve a pooling of interests under generally
accepted accounting principles. The person acquiring any
securities under this Plan will, if requested by the
Company, provide such assurances and representations to the
Company as the Committee may deem necessary or desirable to
assure compliance with all applicable legal and accounting
requirements.
5.5 Tax Matters.
5.5.1 Provision for Tax Withholding or Offset.
Upon any exercise, vesting, or payment of any Award or upon
the disposition of shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option prior to
satisfaction of the holding period requirements of Section
422 of the Code, the Corporation shall have the right at its
option to (i) require the Participant (or Personal
Representative or Beneficiary, as the case may be) to pay or
provide for payment of the minimum amount of any taxes which
the Corporation may be required to withhold with respect to
such Award event or payment or (ii) deduct from any amount
payable in cash the minimum amount of any taxes which the
Corporation may be required to withhold with respect to such
cash payment. In any case where a tax is required to be
withheld in connection with the delivery of shares of Common
Stock under this Plan, the Committee may in its sole
discretion (subject to Section 5.4) grant (either at the
time of the Award or thereafter) to the Participant the
right to elect, pursuant to such rules and subject to such
conditions as the Committee may establish, to have the
Corporation reduce the number of shares to be delivered by
(or otherwise reacquire) the appropriate number of shares
valued at their Fair Market Value, to satisfy such minimum
withholding obligation, determined in each case as of the
trading day next preceding the applicable date of exercise,
vesting or payment.
5.5.2 Tax Loans. If so provided in the Award
Agreement, the Corporation may, to the extent permitted by
law, authorize a short-term loan of not more than six (6)
months to an Eligible Person in the amount of any taxes that
the Corporation may be required to withhold with respect to
shares of Common Stock received (or disposed of, as the case
may be) pursuant to a transaction described in Subsection
5.5.1. Such a loan shall be for a term, at a rate of
interest and pursuant to such other terms and conditions as
the Committee, under applicable law, may establish and such
loan need not comply with the other provisions of Section
1.8.
5.6 Plan Amendment, Termination and Suspension.
5.6.1 Board or Committee Authorization. The
Board may, at any time, terminate or, from time to time,
amend, modify or suspend this Plan, in whole or in part;
provided, however, that neither Section 1.2 nor any other
provision of this Plan shall be amended to permit the
reduction (by amendment, substitution, cancellation and
regrant, or other means) of the exercise price of any Option
without prior stockholder approval. No Awards may be
granted during any suspension of this Plan or after
termination of this Plan, but the Committee shall retain
jurisdiction as to Awards then outstanding or payments
deferred in accordance with the terms of this Plan.
5.6.2 Stockholder Approval. To the extent then
required under Sections 162, 422 or 424 of the Code, Section
5.6.1 hereof, or any other applicable law, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be
subject to stockholder approval.
5.6.3 Amendments to Awards. Without limiting any
other express authority of the Committee under (but subject
to) the express limits of this Plan, the Committee by
agreement or resolution may waive conditions of or
limitations on Awards to Participants that the Committee in
the prior exercise of its discretion has imposed, without
the consent of a Participant, and (subject to any
requirements of Section 2.5) may make other changes to the
terms and conditions of Awards that do not affect in any
manner materially adverse to the Participant, the
Participant's rights and benefits under an Award.
5.6.4 Limitations on Amendments to Plan and
Awards. No amendment, suspension or termination of this
Plan or change of or affecting any outstanding Award shall,
without written consent of the Participant, affect in any
manner materially adverse to the Participant any rights or
benefits of the Participant or obligations of the Company
under any Award granted under this Plan prior to the
effective date of such change. Changes contemplated by
Section 5.2 shall not be deemed to constitute changes or
amendments for purposes of this Section 5.6.
5.7 Privileges of Stock Ownership.
Except as otherwise expressly authorized by the
Committee or this Plan, a Participant shall not be entitled
to any privilege of stock ownership as to any shares of
Common Stock not actually delivered to and held of record by
the Participant. No adjustment will be made for dividends or
other rights as a stockholder for which a record date is
prior to such date of delivery.
5.8 Effective Date of the Plan.
This Plan is effective as of January 1, 2000. The Plan
shall be submitted for and subject to stockholder approval.
5.9 Term of the Plan.
No Award will be granted under this Plan after December
31, 2009 (the "termination date"). Unless otherwise
expressly provided in this Plan or in an applicable Award
Agreement, any Award granted prior to the termination date
may extend beyond such date, and all authority of the
Committee with respect to Awards hereunder, including the
authority to amend an Award, shall continue during any
suspension of this Plan and in respect of Awards outstanding
on the termination date.
5.10 Governing Law/Construction/Severability.
5.10.1 Choice of Law. This Plan, the Awards, all
documents evidencing Awards and all other related documents shall
be governed by, and construed in accordance with the laws of the
state of incorporation of the Company or such other state as may
be expressly stated in an Award Agreement in a form approved by
the Committee.
5.10.2 Severability. If a court of competent
jurisdiction holds any provision invalid and unenforceable,
the remaining provisions of this Plan shall continue in
effect.
5.10.3 Plan Construction.
(a) Rule 16B-3. It is the intent of the
Corporation that the Awards and transactions permitted by
Awards generally satisfy and be interpreted in a manner
that, in the case of Participants who are or may be subject
to Section 16 of the Exchange Act, satisfies the applicable
requirements of Rule 16b-3 so that such persons (unless they
otherwise agree) will be entitled to the benefits of Rule
16b-3 or other exemptive rules under Section 16 of the
Exchange Act in respect of those transactions and will not
be subjected to avoidable liability.
(b) Section 162(m). It is the further intent of
the Company that (to the extent the Company or Awards under
this Plan may be or become subject to limitations on
deductibility under Section 162(m) of the Code), Options
granted with an exercise or base price not less than Fair
Market Value on the date of grant and performance-based
awards under Section 4.2 of this Plan that are granted to or
held by a person subject to Section 162(m) of the Code will
qualify as performance-based compensation or otherwise be
exempt from deductibility limitations under Section 162(m)
of the Code, to the extent that the Committee authorizing
the Award (or the payment thereof, as the case may be)
satisfies any applicable administrative requirements
thereof.
5.11 Captions.
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in
any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.
5.12 Effect of Change of Subsidiary Status.
For purposes of this Plan and any Award hereunder, if
an entity ceases to be a subsidiary, a termination of
employment and service shall be deemed to have occurred with
respect to each Eligible Person in respect of such
Subsidiary who does not continue as an Eligible Person in
respect of another entity within the Company.
5.13 Stock-Based Awards in Substitution for Stock
Options or Awards Granted by Other Corporation.
Awards may be granted to Eligible Persons under this
Plan in substitution for employee stock options, stock
appreciation rights, restricted stock or other stock-based
awards granted by other entities to persons who are or who
will become Eligible Persons in respect of the Company, in
connection with a distribution, merger or other
reorganization by or with the granting entity or an
affiliated entity, or the acquisition by the Company,
directly or indirectly, or all or a substantial part of the
stock or assets of the employing entity.
5.14 Non-Exclusivity of Plan.
Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Committee to grant awards
or authorize any other compensation, with or without
reference to the Common Stock, under any other plan or
authority.
5.15 No Corporate Action Restriction.
The existence of the Plan, the Award Agreements and the
Awards granted hereunder shall not limit, affect or restrict
in any way the right or power of the Board or the
stockholders of the Corporation to make or authorize: (a)
any adjustment, recapitalization, reorganization or other
change in the Corporation's or any Subsidiary's capital
structure or its business, (b) any merger, amalgamation,
consolidation or change in the ownership of the Corporation
or any subsidiary, (c) any issue of bonds, debentures,
capital, preferred or prior preference stock ahead of or
affecting the Corporation's or any Subsidiary's capital
stock or the rights thereof, (d) any dissolution or
liquidation of the Corporation or any Subsidiary, (e) any
sale or transfer of all or any part of the Corporation or
any Subsidiary's assets or business, or (f) any other
corporate act or proceeding by the Corporation or any
Subsidiary. No Participant, Beneficiary or any other person
shall have any claim under any Award or Award Agreement
against any member of the Board or the Committee, or the
Corporation or any employees, officers or agents of the
Corporation or any Subsidiary, as a result of any such
action.
5.16 Other Company Benefit and Compensation Program.
Payments and other benefits received by a Participant
under an Award made pursuant to this Plan shall not be
deemed a part of a Participant's compensation for purposes
of the determination of benefits under any other employee
welfare or benefit plans or arrangements, if any, provided
by the Corporation or any Subsidiary, except where the
Committee or the Board expressly otherwise provides or
authorizes in writing. Awards under this Plan may be made in
addition to, in combination with, as alternatives to or in
payment of grants, awards or commitments under any other
plans or arrangements of the Company or the Subsidiaries.
6. DEFINITIONS.
6.1 Definitions.
(a) "Award" means an award of any Option, Restricted
Stock, Stock Bonus, Stock Unit, Performance Share Award,
dividend equivalent or deferred payment right or other right
or security, or any combination thereof, whether alternative
or cumulative, authorized by and granted under this Plan.
(b) "Award Agreement" means any writing setting forth
the terms of an Award that has been authorized by the
Committee.
(c) "Award Date" means the date upon which the
Committee took the action granting an Award or such later
date as the Committee designates as the Award Date at the
time of the Award.
(d) "Award Period" means the period beginning on an
Award Date and ending on the expiration date of such Award.
(e) "Beneficiary" means the person, persons, trust
or trusts designated by a Participant or, in the absence of
a designation, entitled by will or the laws of descent and
distribution, to receive the benefits specified in the Award
Agreement and under this Plan in the event of a
Participant's death, and shall mean the Participant's
executor or administrator if no other Beneficiary is
designated and able to act under the circumstances.
(f) "Board" means the Board of Directors of the
Corporation.
(g) "Change in Control Event" means any of the
following:
(1) Approval by the stockholders of the
Corporation of the dissolution or liquidation of the
Corporation, except to the extent the dissolution is in
connection with a sale of assets which would not constitute
a Change in Control Event under subsection (2) below.
(2) Approval by the stockholders of the
Corporation of an agreement to merge, consolidate or
otherwise reorganize, with or into, sell or transfer
substantially all of the Corporation's business and/or
assets as an entirety to one or more entities that are not
Subsidiaries, as a result of which 50% or less of the
outstanding voting securities of the surviving or resulting
entities immediately after the reorganization are, or are to
be, owned by former stockholders of the Corporation
immediately before such reorganization (assuming for
purposes of such determination that there is no change in
the record ownership of the Corporation's securities from
the record date for such approval until such reorganization,
but including in such determination any securities of the
other parties to such reorganization held by such affiliates
of the Corporation).
(3) The occurrence of any of the following:
* Any "person," alone or with "affiliates" and
"associates" of such person, without the
prior approval of the Board, becomes the
"beneficial owner" of more than 50%
of the outstanding voting securities of the
Corporation (the terms "person," "affiliates,"
"associates" and "beneficial owner" are used
as such terms are used in the Securities and
Exchange Act of 1934 and the General Rules
and Regulations thereunder); provided, however,
that a "Change in Control Event" shall not be
deemed to have occurred if such "person" is (A)
the Corporation, (B) any Subsidiary, (C) any
employee benefit plan or employee stock plan
of the Corporation, or any trust or other
entity organized, established or holding shares
of such voting securities by, for,
or pursuant to the terms of any such plan,
or (D) any member of or entity or group
affiliated with the Lidow family; or
* individuals who at the beginning of any
period of two consecutive calendar years
constitute a majority of the Board cease for
any reason, during such period, to constitute
at least a majority thereof, unless the
election, or the nomination for election by
the Corporation's stockholders, of each new
Board member was approved by a vote of at least
two-thirds of the Board members then still in office
who were Board members at the beginning of such
period.
(h) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(i) "Commission" means the Securities and Exchange
Commission.
(j) "Committee" means the Board or any one or more
committees of directors appointed by the Board to administer
this Plan. At least one committee shall be comprised only of
two or more directors or such greater number of directors as
may be required under applicable law, each of whom, in
respect of his or her participation in any decision at a
time when the Participant affected by the decision may be
subject to Section 162(m) of the Code, shall be
Disinterested; provided, however, that the failure to
satisfy the requisite standard of being Disinterested shall
not affect the validity of the action of any committee
otherwise duly authorized and acting in the matter.
(k) "Common Stock" means the Common Stock of the
Corporation and such other securities or property as may
become the subject of Awards, or become subject to Awards,
pursuant to an adjustment made under Section 5.2 of this
Plan.
(l) "Company" means, collectively, the Corporation and
its Subsidiaries.
(m) "Corporation" means International Rectifier
Corporation, a Delaware corporation, and its successors.
(n) "Disinterested" means a disinterested director or
an "outside director" within the meaning of any applicable
mandatory legal or regulatory requirements, including
Section 162(m) of the Code as to Awards intended as
performance based awards under that section.
(o) "Dismissal for Cause" means the Corporation or a
Subsidiary has terminated an Eligible Person's employment or
service because of any of the following:
(1) Any act that has resulted in the Eligible
Person's personal gain at the expense of the Corporation or
a Subsidiary.
(2) An Eligible Person's refusal to perform
assigned duties.
(3) An Eligible Person's incompetence,
insubordination, gross negligence, willful misconduct,
breach of fiduciary duty, or conviction of a crime (other
than minor traffic violations or similar offenses).
(4) Any conduct that results in a substantial
detriment to the business or reputation of the Corporation
or its Subsidiaries.
(p) "Eligible Employee" means an officer (whether or
not a director) or employee of the Company.
(q) "Eligible Person" means an Eligible Employee, non-
employee director or any Other Eligible Person, as
determined by the Committee in its discretion.
(r) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(s) "Fair Market Value" on any date means (1) if the
stock is listed or admitted to trade on a national
securities exchange, the closing price of the stock on the
Composite Tape, as published in the Western Edition of The
Wall Street Journal, of the principal national securities
exchange on which the stock is so listed or admitted to
trade, on such date, or, if there is no trading of the stock
on such date, then the closing price of the stock as quoted
on such Composite Tape on the next preceding date on which
there was trading in such shares; or (2) if the stock is not
listed on a national securities exchange, the value as
established by the Committee or as reported by such other
referenced market as the Committee may designate, at such
time for purposes of this Plan.
(t) "Incentive Stock Option" means an Option which is
intended, as evidenced by its designation, as an incentive
stock option within the meaning of Section 422 of the Code,
the award of which contains such provisions (including but
not limited to the receipt of stockholder approval of this
Plan, if the Award is made prior to such approval) and is
made under such circumstances and to such persons as may be
necessary to comply with that section.
(u) "Nonqualified Stock Option" means an Option that is
designated as a Nonqualified Stock Option and shall
include any Option intended as an Incentive Stock Option
that fails to meet the applicable legal requirements
thereof. Any Option granted hereunder that is not designated
as an incentive stock option shall be deemed to be
designated a nonqualified stock option under this Plan and
not an incentive stock option under the Code.
(v) "Option" means an option to purchase Common Stock
granted under this Plan. The Committee shall designate any
Option granted to an Eligible Person as a Nonqualified Stock
Option or an Incentive Stock Option.
(w) "Other Eligible Person" means any individual
consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the
offering or sale of securities of the Company in a capital
raising transaction or as a market maker or promoter of the
Corporation's securities) to the Company, and who is
selected to participate in this Plan by the Committee. An
advisor or consultant may be selected as an Other Eligible
Person only if such person's participation in this Plan
would not adversely affect (1) the Corporation's eligibility
to use Form S-8 to register under the Securities Act of
1933, as amended, the offering of shares issuable under this
Plan by the Company or (2) the Corporation's compliance with
any other applicable laws.
(x) "Participant" means an Eligible Person who has been
granted an Award under this Plan.
(y) "Performance Share Award" means an Award of a right
to receive shares of Common Stock under Section 4.1, or to
receive shares of Common Stock or other compensation
(including cash) under Section 4.2, the issuance or payment
of which is contingent upon, among other conditions, the
attainment of performance objectives specified by the
Committee.
(z) "Personal Representative" means the person or
persons who, upon the disability or incompetence of a
Participant, shall have acquired on behalf of the
Participant, by legal proceeding or otherwise, the power to
exercise the rights or receive benefits under this Plan and
who shall have become the legal representative of the
Participant.
(aa) "Plan" means this 2000 Stock Incentive Plan, as it
may be amended from time to time.
(bb) "Restricted Shares" or "Restricted Stock" means
shares of Common Stock awarded to a Participant under this
Plan, subject to payment of such consideration, if any, and
such conditions on vesting (which may include, among others,
the passage of time, specified performance objectives or
other factors) and such transfer and other restrictions as
are established in or pursuant to this Plan and the related
Award Agreement, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.
(cc) "Retirement" means retirement with the consent of
the Company or, in the case of a non-employee director, a
retirement or resignation as a director after at least 5
consecutive years of service as a director.
(dd) "Rule 16B-3" means Rule 16b-3 as promulgated by
the Commission pursuant to the Exchange Act, as amended
from time to time.
(ee) "Section 16 Person" means a person subject to
Section 16(a) of the Exchange Act.
(ff) "Securities Act" means the Securities Act of 1933,
as amended from time to time.
(gg) "Stock Bonus" means an Award of shares of Common
Stock granted under this Plan for no consideration other
than past services and without restriction other than such
transfer or other restrictions as the Committee may deem
advisable to assure compliance with law.
(hh) "Stock Unit" means a bookkeeping entry which
serves as a unit of measurement relative to a share of
Common Stock for purposes of determining the payment, in
Common Stock or cash, of a grant or deferred benefit or
right under this Plan. Stock Units carry no dividend,
voting, or other rights of a holder of Common Stock. Stock
Units may, however, by express provision in the related
Award Agreement, carry related dividend equivalent rights.
(ii) "Stock Unit Account" means the bookkeeping account
maintained by the Company on behalf of each Participant who
is granted a Stock Unit award, which Stock Unit Account is
credited with Stock Units in accordance with the terms of
the applicable Award.
(jj) "Subsidiary" means any corporation or other entity
a majority of whose outstanding voting stock or voting power
is beneficially owned directly or indirectly by the
Corporation.
(kk) "Total Disability" means a "permanent and total
disability" within the meaning of Section 22(e)(3) of the
Code and such other disabilities, infirmities, afflictions
or conditions as the Committee by rule may include.
Exhibit 5
OPINION OF COUNSEL
May 18, 2000
International Rectifier Corporation
233 Kansas Street
El Segundo, California 90245
Re: Registration on Form S-8 of International
Rectifier Corporation (the "Company")
Ladies and Gentlemen:
At your request, I have examined the Registration Statement
on Form S-8 to be filed with the Securities and Exchange
Commission in connection with the registration under the
Securities Act of 1933, as amended, of 4,500,000 shares of Common
Stock, par value $1.00 per share, of the Company (the "Common
Stock"), and additional rights pursuant to the Company's Rights
Agreement dated August 14, 1996, as amended, with ChaseMellon
Shareholder Services as Rights Agent (together with the Common
Stock, the "Shares") to be issued pursuant to the International
Rectifier Corporation 2000 Stock Incentive Plan (the "Plan"). I
have examined the proceedings heretofore taken and to be taken in
connection with the authorization of the Plan and the Shares to
be issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact
and law as I have deemed relevant, I am of the opinion that the
Shares have been duly authorized by all necessary corporate
action on the part of the Company and, when issued in accordance
with such authorization, the provisions of the Plan and relevant
agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ L. Michael Russell
---------------------------
L. Michael Russell
Executive Vice President, Secretary
and General Counsel
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8, International Rectifier Corporation 2000 Stock
Incentive Plan, of our report dated July 27, 1999, except for Note 9,
as to which the date is September 14, 1999, relating to the financial
statements and financial statement schedule of International Rectifier
Corporation's Annual Report on Form 10-K for the year ended June 30, 1999.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Los Angeles, California
May 16, 2000
