UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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☐ | Soliciting Material Pursuant to § 240.14a-12 |
Synaptics Incorporated
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NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
October 31, 201729, 2019
The Annual Meeting of Stockholders of Synaptics Incorporated, a Delaware corporation, will be held at 9:00 a.m., Pacific time, on Tuesday, October 31, 2017,29, 2019, via live interactive webcast on the Internet at www.virtualshareholdermeeting.com/syna2017syna2019 for the following purposes:
1. To elect threetwo directors, each to serve for a three-year term expiring in 2020.2022.
2. To approve, on anon-binding advisory basis, the compensation of our named executive officers for fiscal 2017 2019(“say-on-pay”).
3. To provide a non-binding advisory vote on the frequency of future non-binding advisory votes on the compensation of our named executive officers (“say-on-frequency”).
4. To ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 30, 2018.27, 2020.
5.4. To approve an amendment toour 2019 Equity and Incentive Compensation Plan, which will replace our Amended and Restated 2010 Incentive Compensation Plan to increase the number of the Company’s common stock authorized for issuance thereunder by 2,000,000 shares.all new awards.
5. To approve our 2019 Employee Stock Purchase Plan, which will replace our Amended and Restated 2010 Employee Stock Purchase Plan for all new awards.
6. To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy statement accompanying this notice.
Only stockholders of record at the close of business on September 5, 2017,3, 2019, are entitled to notice of and to vote at the meeting or any adjournment or postponement thereof.
All stockholders are cordially invited to attend the meeting and vote their shares electronically during the meeting via the Internet. To assure your representation at the meeting, however, you are urged to vote by proxy as soon as possible over the Internet as instructed in the Notice of Internet Availability of Proxy Materials or, if you receive paper copies of the proxy materials by mail, you can also vote by telephone or by mail by following the instructions on the proxy card. You may vote your shares electronically during the virtual meeting even if you have previously returned a proxy.
Sincerely, | ||||
San Jose, California | ||||
September | 10, 2019 | President and Chief Executive Officer |
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3 | ||||
6 | ||||
39 | ||||
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS, DIRECTORS, AND OFFICERS | ||||
PROPOSAL TWO: ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION(“SAY-ON-PAY”) | ||||
PROPOSAL THREE: | ||||
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PROPOSAL FOUR: APPROVAL OF THE 2019 EQUITY AND INCENTIVE COMPENSATION PLAN | 50 | |||
A-1 | ||||
APPENDIX B: | B-1 | |||
C-1 |
SYNAPTICS INCORPORATED
1251 McKay Drive
San Jose, CA 95131-1709
General
The accompanying proxy is solicited on behalf of Synaptics Incorporated, a Delaware corporation, by our Board of Directors for use at our Annual Meeting of Stockholders to be held on Tuesday, October 31, 2017,29, 2019, at 9:00 a.m., Pacific time, or at any adjournment or postponement thereof, for the purposes set forth in this proxy statement and in the accompanying meeting notice. The meeting will be held via live interactive webcast on the Internet. You will be able to attend, vote and submit your questions during the meeting at www.virtualshareholdermeeting.com/syna2017.syna2019.
In accordance with rules adopted by the Securities and Exchange Commission, or the SEC, that allow companies to furnish their proxy materials over the Internet, we are mailing a Notice of Internet Availability of Proxy Materials instead of a paper copy of our proxy statement and our 20172019 Annual Report to most of our stockholders. The Notice of Internet Availability of Proxy Materials contains instructions on how to access those documents and vote over the Internet. The Notice of Internet Availability of Proxy Materials also contains instructions on how to request a paper copy of our proxy materials, including our proxy statement, our 20172019 Annual Report, and a form of proxy card. We believe this process will allowallows us to provide our stockholders with the information they need in a more timely manner, while reducing the environmental impact and lowering our costs of printing and delivering the proxy materials.
These proxy solicitation materials were first released on or about September 12, 2017,10, 2019, to all stockholders entitled to vote at the meeting.
Record Date and Outstanding Shares
Stockholders of record at the close of business on September 5, 2017,3, 2019, which we have set as the record date, are entitled to notice of and to vote at the meeting. On the record date, there were 33,734,95932,917,638 outstanding shares of our common stock, par value $0.001 per share. Each stockholder voting at the meeting, either via online attendance or by proxy, may cast one vote per share of common stock held on all matters to be voted on at the meeting.
Quorum
The presence, via online attendance or by proxy, of the holders of a majority of the total number of shares of common stock outstanding and entitled to vote constitutes a quorum for the transaction of business at the meeting. Each stockholder voting at the meeting, either via online attendance or by proxy, may cast one vote per share of common stock held on all matters to be voted on at the meeting.
Required Votes
Assuming that a quorum is present, the affirmative vote of a majority of the votes cast is required for the election of the threetwo director nominees for three-year terms expiring in 2020,2022, to ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 30, 2018,27, 2020, to approve the 2019 Equity and Incentive Compensation Plan, and to approve an amendment to the Amended and Restated 2010 Incentive Compensation Plan to increase the number of the Company’s common stock authorized for issuance thereunder by 2,000,000 shares.2019 Employee Stock Purchase Plan. The advisory vote on the compensation of our named executive officers for fiscal 2017 2019(“say-on-pay”) and the advisory vote on the frequency of future advisory votes on the compensation of our named executive officers (“say-on-frequency”) are isnon-binding, but our Board of Directors will consider the input of stockholders based on a majority of votes cast for thesay-on-pay proposal and the choice that receives the most votes in the say-on-frequency proposal.
Our Board of Directors recommends that you vote “for” the threetwo director nominees named herein, “1 year” on the say-on-frequency proposal, and in favor of“for” each of the other proposals.
Voting of Proxies
When a proxy is properly executed and returned, the shares it represents will be voted at the meeting as directed. If no specification is indicated, the shares will be voted (1) “for” the election of each of the nominees for director set forth in this proxy statement, (2) “for” the advisory approval of the compensation of our named executive officers for fiscal 2017,2019, (3) “1 year” on the proposal to determine the frequency of the advisory vote on the compensation of our named executive officers, (4) “for” the proposal to ratify the appointment of KPMG LLP, an independent registered public accounting firm, as the independent auditor of our company for the fiscal year ending June 30, 2018,27, 2020, (4) “for” the proposal to approve the 2019 Equity and Incentive Compensation Plan, (5) “for” the proposal to approve an amendment to the Amended and Restated 2010 Incentive Compensation2019 Employee Stock Purchase Plan, to increase the number of the Company’s common stock authorized for issuance thereunder by 2,000,000 shares, and (6) as the persons specified in the proxy deem advisable on such other matters as may come before the meeting.
BrokerNon-Votes and Abstentions
Brokers, banks, or other nominees that hold shares of common stock in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion if permitted by the stock exchange or other organization of which they are members. Brokers, banks, and other nominees are permitted to vote the beneficial owner’s proxy in their own discretion as to certain “routine” proposals, such as the ratification of the appointment of KPMG LLP as the independent auditor of our company for the fiscal year ending June 30, 2018,27, 2020, when they have not received instructions from the beneficial owner. If a broker, bank, or other nominee votes such “uninstructed” shares for or against a “routine” proposal, those shares will be counted towards determining whether or not a quorum is present and are considered entitled to vote on the “routine” proposals. However, when a proposal is “non-routine,“non-routine,” a broker, bank, or other nominee is not permitted to exercise its voting discretion on that proposal without specific instructions from the beneficial owner. Thesenon-voted shares are referred to as “brokernon-votes” when the nominee has voted on othernon-routine matters with authorization or voted on routine matters. These shares will be counted towards determining whether or not a quorum is present but will not be counted for purposes of determining the votes received on the “non-routine”“non-routine” proposals.
Please note that brokers, banks, or other nominees may not use discretionary authority to vote shares on the election of directors, thesay-on-pay, the say-on-frequency,approval of the 2019 Equity and Incentive Compensation Plan, or to approve the amendment toapproval of the Amended and Restated 2010 Incentive Compensation2019 Employee Stock Purchase Plan proposals if they have not received specific instructions from their clients. For your vote to be counted in the above, you will need to communicate your voting decisions to your broker, bank, or other nominee before the date of the meeting.
As provided in our bylaws, a majority of the votes cast means that the number of votes cast “for” a proposal exceeds the number of votes cast “against” that proposal. Because abstentions and brokernon-votes do not represent votes cast “for” or “against” a proposal, brokernon-votes and abstentions will have no effect on the proposal to elect directors, thesay-on-pay proposal, the say-on-frequency proposal, the proposal to ratify the appointment of KPMG LLP as the independent auditor of our company for the fiscal year ending June 30, 2018,27, 2020, the proposal to approve the 2019 Equity and Incentive Compensation Plan, or the proposal to approve the amendment to the Amended and Restated 2010 Incentive Compensation2019 Employee Stock Purchase Plan, as each such proposal is determined by reference to the votes actually cast by the shares present or represented by proxy and entitled to vote.
In accordance with our policy, anAn incumbent candidate for director who does not receive the required votes forre-election is expected to tender their resignation to our Board of Directors. Our Board of Directors, or another duly authorized committee of our Board of Directors, will make a determination as to whether to accept or reject the tendered resignation generally within 90 days after certification of the election results of the stockholder vote. If applicable, we will publicly disclose the decision regarding any tendered resignation and the rationale behind the decision in a filing of a Current Report on Form8-K with the SEC.
Revocability of Proxies
Any stockholder giving a proxy may revoke the proxy at any time before its use by furnishing to us either a written notice of revocation or a duly executed proxy bearing a later date, or by attending the meeting via the Internet at www.virtualshareholdermeeting.com/syna2017syna2019 and voting electronically during the live webcast of the meeting. Attendance at the meeting will not cause your previously granted proxy to be revoked unless you specifically so request.
Election Inspector
Votes cast by proxy or by voting electronically during the live webcast of the meeting will be tabulated by the election inspector appointed for the meeting, who will determine whether a quorum is present. The election inspector will treat brokernon-votes and abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum, and as described in the “BrokerNon-Votes and Abstentions” section of this proxy statement for purposes of determining the approval of any matter submitted to stockholders for a vote.
Solicitation
We will bear the cost of this solicitation. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by certain of our directors and officers, personally or by telephone ore-mail, without additional compensation.
Annual Report and Other Matters
Our 20172019 Annual Report, to Stockholders, which was made available to stockholders with or preceding this proxy statement, contains financial and other information about our company, but is not incorporated into this proxy statement and is not to be considered a part of these proxy materials or subject to Regulations 14A or 14C, or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The information contained in the “Compensation Committee Report” and the “Report of the Audit Committee” shall not be deemed “filed” with the SEC or subject to Regulations 14A or 14C, or to the liabilities of Section 18 of the Exchange Act.
Through our website,www.synaptics.com, we make available free of charge all of our SEC filings, including our proxy statements, our annual reports on Form10-K, our quarterly reports on Form10-Q, and our current reports on Form8-K, as well as Form 3, Form 4, and Form 5 reports of our directors, officers, and principal stockholders, together with amendments to these reports filed or furnished pursuant to Sections 13(a), 15(d), or 16 of the Exchange Act.We will also provide, upon written request, without charge to each stockholder of record as of the record date, a copy of our Annual Report on Form10-K for the fiscal year ended June 24, 2017, 29, 2019, as filed with the SEC. Any exhibits listed in the Form10-K report also will be furnished upon request at the actual expense we incur in furnishing such exhibits. Any such requests should be directed to our corporate secretary at our executive offices set forth in this proxy statement.
As permitted by the SEC, only one copy of the Notice of Internet Availability of Proxy Materials or the proxy materials is being delivered to stockholders residing at the same address unless such stockholders have notified us of their desire to receive multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials. We will promptly deliver, upon written or oral request, a separate copy of the Notice of Internet Availability of Proxy Materials or the proxy materials to any stockholder residing at an address to which only one copy was mailed. Requests for additional copies should be directed to Synaptics Incorporated, 1251 McKay Drive, San Jose, California 95131-1709, Attention: Corporate Secretary, Telephone: (408)904-1100. Stockholders residing at the same address and currently receiving only one copy of the Notice of Internet Availability of Proxy Materials or the proxy materials may contact our Corporate Secretary at the address above to request multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials in the future. Stockholders residing at the same address and currently receiving multiple copies of the Notice of Internet Availability of Proxy Materials or the proxy materials may contact the Corporate Secretary at the address above to request that only a single copy of the Notice of Internet Availability of Proxy Materials or the proxy materials be mailed to them in the future.
Our fiscal year is the52- or53-week period ending on the last Saturday in June. The fiscal periods presented in this proxy statement were the52-week periods for the fiscal years ended June 29, 2019, or fiscal 2019, and June 24, 2017, or fiscal 2017;2017, and the53-week period for the fiscal year ended June 25, 2016,30, 2018, or fiscal 2016; and June 27, 2015, or fiscal 2015.2018. Our principal executive offices are located at 1251 McKay Drive, San Jose, California 95131-1709.
PROPOSAL ONE: ELECTION OF DIRECTORS
Nominees
Our Certificate of Incorporation and bylaws provide that the number of directors shall be fixed from time to time by resolution of our Board of Directors. Our Board of Directors has currently fixed the number of directors at eight.nine. The directors are divided into three classes, with one class standing for election each year for a three-year term. Our Board of Directors has nominated Francis F. Lee, Nelson C. Chan,Kiva A. Allgood and Richard L. SanquiniMichael E. Hurlston for election as class 32 directors for three-year terms expiring in 20202022 or until their successors have been elected and qualified. Russell J. Knittel, a current class 2 director of Synaptics Incorporated, has decided to retire as our director and will not stand forre-election at our 2019 Annual Meeting of Stockholders. Mr. Knittel will serve out his remaining term as a director, which expires immediately prior to our 2019 Annual Meeting of Stockholders. Our Board has not nominated an additional director to fill Mr. Knittel’s seat at the 2019 Annual Meeting of Stockholders, and as such, there is expected to be one class 2 director vacancy on the Board following our 2019 Annual Meeting of Stockholders. Pursuant to our bylaws, the Board has the authority to fill that vacancy in the future.
Unless otherwise instructed, the proxy holders will vote the proxies received by them “for” the nominees named above. Messrs. Lee, ChanMs. Allgood and SanquiniMr. Hurlston are currently directors of our company. In the event that Messrs. Lee, ChanMs. Allgood or Sanquini areMr. Hurlston is unable or declinedeclines to serve as directorsa director at the time of the meeting, the proxies will be voted for any nomineesnominee designated by our current Board of Directors to fill the vacancies.such vacancy. At this time, it is not expected that Messrs. Lee, ChanMs. Allgood and SanquiniMr. Hurlston will be unable or will decline to serve as directors. In accordance with SEC rules, proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Our Board of Directors recommends a vote“for” the nominees named herein.
The following table sets forth certain information regarding our directors and the nominees for director:
Name | Age | Position | Term Expires | Age | Position | Class | Term Expires | |||||||||
Nelson C. Chan | 57 | Executive Chairman of the Board | 3 | 2020 | ||||||||||||
Kiva A. Allgood | 47 | Director | 2 | 2019 | ||||||||||||
Jeffrey D. Buchanan | 62 | Director | 1 | 2021 | ||||||||||||
Keith B. Geeslin | 65 | Director | 1 | 2021 | ||||||||||||
Michael E. Hurlston | 52 | Director | 2 | 2019 | ||||||||||||
Russell J. Knittel | 68 | Director | 2 | 2019 | ||||||||||||
Francis F. Lee | 65 | Chairman of the Board | 2017 | 66 | Director | 3 | 2020 | |||||||||
Richard A. Bergman | 53 | President, Chief Executive Officer, and Director | 2019 | |||||||||||||
Jeffrey D. Buchanan | 61 | Director | 2018 | |||||||||||||
Nelson C. Chan | 56 | Director | 2017 | |||||||||||||
Keith B. Geeslin | 64 | Director | 2018 | |||||||||||||
Russell J. Knittel | 67 | Director | 2019 | |||||||||||||
Richard L. Sanquini | 82 | Director | 2017 | 83 | Director | 3 | 2020 | |||||||||
James L. Whims | 62 | Director | 2018 | 63 | Director | 1 | 2021 |
Francis F. LeeNelson C. Chan has been the Executive Chairman of theour Board of Directors of our company since October 2008March 2019 and a director of our company since December 1998.February 2007. Mr. LeeChan served as the Chairman of our Board of Directors from October 2018 to March 2019. From December 2006 until August 2008, Mr. Chan served as the Chief Executive Officer of our company from December 1998 until July 2009Magellan Corporation, a leader in the consumer, survey, GIS, and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan served in various senior management positions with SanDisk Corporation, a global leader in flash memory cards, including as Executive Vice President of our company from December 1998 to July 2008. Mr. Lee was a consultant from August 1998 to November 1998. From May 1995 until July 1998, Mr. Lee served asand General Manager, of NSM, a Hong Kong-based joint venture between National Semiconductor Corporation and S. Megga.Consumer Business. From 1983 to 1992, Mr. LeeChan held a variety of executive positions for National Semiconductor from 1988 until August 1995. These positions included Vice President of Communication and Computing Group, Vice President of Quality and Reliability, Director of Standard Logic Business Unit, and various other operationsmarketing and engineering management positions.positions at Chips and Technologies, Signetics, and Delco Electronics. Mr. LeeChan is a memberChairman of the Board of Directors, Chair of the Compensation Committee, member of the Audit Committee and member of the Nominating and Corporate Governance Committee of Adesto Technologies, a NASDAQ Global Select Market-listed company, which develops innovative,low-power memory solutions.solutions, a member of the Board of Directors and a member of the Audit Committee of Deckers Outdoor Corporation, an NYSE-listed company, which is a footwear, apparel and accessories designer and distributor, and a member of the Board of Directors of Twist Bioscience, a NASDAQ Global Select Market-listed company, which manufactures synthetic DNA. Mr. LeeChan was a member of the Board of Directors, Chair of the Compensation Committee and member of the Nominating and Corporate Governance committee of Socket Mobile, a NASDAQ Global Select Market-listed company, a member of the Board of Directors of Silicon Laboratories, Inc., a NASDAQ Global Select Market-listed company, from 2007 to 2010, a member of the Board of Directors, Chairman of the Audit Committee and member of the Compensation Committee of Affymetrix, from 2010 to 2016, prior to its acquisition by Thermo Fisher, and a member of the Board of Directors from July 2011 to September 2016 and Chairman of the Board of Directors from June 2013 to September 2016 of Outerwall, a NASDAQ Global Select Market-listed company, prior to its acquisition by Apollo Global Management, a private equity firm. Mr. Chan also currently serves on the Boards of Directors of several private companies. Mr. Chan holds a Bachelor of Science degree with honors, in Electrical and Computer Engineering from the University of California at Davis.Santa Barbara and a Master’s degree in Business Administration from Santa Clara University. We
believe that Mr. Lee’s service for more than 10 yearsChan’s experience as ourthe Chief Executive Officer gives him invaluable insights into our business, our culture, our personnel, our opportunities,of Magellan, his senior management positions with other leading companies, and our challenges and provideshis service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
RichardKiva A. BergmanAllgood has been President, Chief Executive Officer, and a director of our company since September 2011. Prior to joining ourMay 2019. Ms. Allgood has been the Global Business Unit Head of IOT and Automotive for Telefonaktiebolaget LM Ericsson, a Nasdaq-listed company Mr. Bergman was Senior Vice President and General Managerthat is a global provider of Product Group at Advanced Micro Devices, Inc. or AMD, a New York Stock Exchange-listed global semiconductor company, from May 2009 to September 2011. From October 2006 to May 2009, Mr. Bergmancommunications technology, since April 2019. Ms. Allgood served as Senior Vice Presidentthe Chief Commercial Development Officer for GE Ventures, a Corporate Venture Company, from August 2017 to April 2019 and General Manageras Managing Director for Innovation Group of AMD’s Graphics Product Group. Mr. Bergman’s career at AMD began in October 2006 when AMD acquired ATI Technologies, or ATI, where heGE Corporate from November 2016 to August 2017. From June 2012 to November 2016, Ms. Allgood served as Senior Vice President, Qualcomm Intelligent Solutions, IoT and General ManagerSmart Cities, at Qualcomm Incorporated, a NASDAQ Global Select Market-listed company that is a global provider of PC Group. Prior to ATI, Mr. Bergmanfoundational technologies and products used in mobile devices and other wireless products. Earlier in her career, Ms. Allgood served as Chief Operating Officer at S3 Graphics, a division of SonicBlue Inc. Mr. Bergman has held senior level management positionsin senior-level operational roles including sales, marketing, and business development in the technology field since his early roles at Texas Instruments, Inc. and IBM. Mr. Bergman is a member of the Board of Directors, Chairman of the Compensation Committee, and a member of the Audit Committee of Maxwell Technologies, a developer and manufacturer of energy storage and power delivery solutions. Mr. Bergmanindustry. Ms. Allgood holds a Bachelor of Science degree in Electrical Engineering from the Universityand Master of Michigan and a Master’s degree in Business Administration degree, both from the University of Colorado.Northwestern University. We believe Mr. Bergman’s position as Chief Executive Officer of our company, his intimatethat Ms. Allgood’s senior management positions with other leading companies, her career at a leading venture capital firm with a focus on investments in high-technology companies, her engineering background, and her knowledge and experience with all aspectsin the Internet of the opportunities, operations,Things and challenges of our company, and his successful career at major companies before joining our companyautomotive technology sectors, provide the requisite qualifications, skills, perspectives, and experiences that make himher well qualified to serve on our Board of Directors.
Jeffrey D. Buchanan has been a director of our company since September 2005. Mr. Buchanan has been the Executive Vice President, Chief Financial Officer, and Treasurer of American Outdoor Brands Corporation, a NASDAQ Global Select Market-listed company that is a U.S.-based leader in firearm manufacturing and design, since January 2011. Mr. Buchanan became the Chief Administrative Officer of American Outdoor Brands Corporation in May 2015. Mr. Buchanan also served as Secretary of American Outdoor Brands Corporation from January 2011 until April 2012, and as a member of the Board of Directors and as the Chairman of the Audit Committee of American Outdoor Brands Corporation from November 2004 until December 2010. He was Of Counsel to the law firm of Ballard Spahr LLP from May 2010 until December 2010. Mr. Buchanan served as a Senior Managing Director of CKS Securities, LLC, a registered broker-dealer, from August 2009 until May 2010 and as a Senior Managing Director of Alare Capital Securities, L.L.C., a registered broker-dealer, from November 2006 until July 2009. From 2005 to 2006, Mr. Buchanan was principal of Echo Advisors, Inc., a corporate consulting and advisory firm focusing on mergers, acquisitions, and strategic planning. Mr. Buchanan served in various positions for Three-Five Systems, Inc., a publicly traded electronic manufacturing services company, including as Executive Vice President, Chief Financial Officer, and Treasurer, from May 1996 until February 2005. Mr. Buchanan was a business attorney for the law firm of O’Connor, Cavanagh, Anderson, Killingsworth & Beshears from 1986 until 1996 and for the law firm of Davis Wright Tremaine LLP from 1984 until 1986. He was a senior staff person at Deloitte & Touche LLP from 1982 to 1984. Mr. Buchanan holds a Bachelor of Science degree in Accounting from Arizona State University, a Juris Doctor degree from the University of Arizona, and a Master of Laws degree in Tax from the University of Florida. We believe Mr. Buchanan’s legal, accounting, and investment banking background, his roles as the chief financial officer and treasurer of public companies, and his public company board service provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Nelson C. Chan has been a director of our company since February 2007. From December 2006 until August 2008, Mr. Chan served as the Chief Executive Officer of Magellan Corporation, a leader in the consumer, survey, GIS, and OEM GPS navigation and positioning markets. From 1992 through 2006, Mr. Chan served in various senior management positions with SanDisk Corporation, a global leader in flash memory cards, including most recently as Executive Vice President and General Manager, Consumer Business. From 1983 to 1992, Mr. Chan held marketing and engineering positions at Chips and Technologies, Signetics, and Delco Electronics. Mr. Chan is Chairman of the Board of Directors of Adesto Technologies, a NASDAQ Global Select Market-listed company, which develops innovative, low-power memory solutions, a member of the Board of Directors and a member of the Audit Committee of Deckers Outdoor Corporation, a footwear, apparel and accessories designer and distributor, and a member of the Board of Directors and Chair of the Compensation Committee of Socket Mobile, a company that creates data capture and delivery solutions for enhanced productivity in retail point of sale, field service, healthcare and other mobile markets. Mr. Chan was a member of the Board of Directors of Silicon Laboratories, Inc., a NASDAQ Global Select Market-listed company, which is a fabless, analog-intensive mixed-signal semiconductor company from 2007 to 2010, and a member of the Board of Directors, Chairman of the Audit Committee and member of the Compensation Committee of Affymetrix, a company which developed, manufactured and sold products and services for genetic analysis to the life science research and clinical healthcare markets from 2010 to 2016, prior to its acquisition by Thermo Fisher. Mr. Chan was also a member of the Board of Directors from July 2011 to September 2016 and Chairman of the Board of Directors from June 2013 to September 2016 of Outerwall, a NASDAQ Global Select Market-listed company, which was a provider of automated retail solutions offering services that drove incremental traffic and revenue for retailers, prior to its acquisition by Apollo Global Management, a private equity firm. Mr. Chan also currently serves on the Boards of Directors of several private companies. Mr. Chan holds a Bachelor of Science degree in Electrical and Computer Engineering from the University of California at Santa Barbara and a Master’s degree in Business Administration from Santa Clara University. We believe that Mr. Chan’s experience as the Chief Executive Officer of Magellan, his senior management positions with other leading companies, and his service as a director of multiple companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Keith B. Geeslin has been a director of our company since 1986. Mr. Geeslin has been a General Partner of Francisco Partners, a firm specializing in structured investments in technology companies undergoing strategic, technological, and operational inflection points, since January 2004. From 2001 until October 2003, Mr. Geeslin served as Managing General Partner of the Sprout Group, a venture capital firm, with which he became associated in 1984. In addition, Mr. Geeslin served as a general or limited partner in a series of investment funds associated with the Sprout Group, a division of DLJ Capital Corporation, which is a subsidiary of Credit Suisse (USA), Inc. Mr. Geeslin is a member of the Board of Directors and Chairman of the Compensation Committee of CommVault Systems, Inc., a public company that provides data management software. Mr. Geeslin holds a Bachelor of Science degree in Electrical Engineering, a Master’s of Science degree in Engineering and Economic Systems from Stanford University, and a Master of Arts degree in Philosophy, Politics, and Economics from Oxford University. We believe Mr. Geeslin’s long career at leading private equity and venture capital firms with a focus on investments in high-technology companies, his service on multiple boards of directors, and his engineering background provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Michael Hurlston has been the President and Chief Executive Officer of our company since August 2019. Prior to joining our company, Mr. Hurlston served as the Chief Executive Officer and a member of the Board of Directors of Finisar Corporation from January 2018 to August 2019. Prior to joining Finisar, he served as Senior Vice President and General Manager of the Mobile Connectivity Products/Wireless Communications and Connectivity Division and held senior leadership positions in sales, marketing and general management at Broadcom Limited and its predecessor corporation from November 2001 through October 2017. Prior to joining Broadcom in 2001, Mr. Hurlston held senior marketing and engineering positions at Oren Semiconductor, Inc., Avasem, Integrated Circuit Systems, Micro Power Systems, Exar and IC Works from 1991 until 2001. Mr. Hurlston is a member of the Board of Directors of Vilynx Inc, and a member of the Board of Directors and Compensation Committee of Ubiquiti Networks, Inc. Mr. Hurlston holds a Bachelor of Science and a Master of Science degree in Electrical Engineering and a Master’s degree in Business Administration from the University of California, Davis. We believe Mr. Hurlston’s position as Chief Executive Officer of our company, and his successful career at major companies before joining our company provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Russell J. Knittel has been a director of our company since October 2010. Mr. Knittel served as Interim President and Chief Executive Officer of our company from October 2010 through September 2011, and as Executive Vice President of our company from July 2007 to October 2010. Mr. Knittel served as Chief Financial Officer, Chief Administrative Officer, Secretary, and Treasurer of our company from November 2001 through September 2009; as Senior Vice President of our company from November 2001 until July 2007; and as Vice President of Administration and Finance, Chief Financial Officer, and Secretary of our company from April 2000 through October 2001. Mr. Knittel is a member of the Board of Directors and a member of the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominations Committee of Quest Resource Holding Corporation, a NASDAQ Global Select Market-listed company that provides waste management and recycling services programs. Mr. Knittel served as a director of Source Photonics, a privately held company that designs, manufactures and sells optical communications and data connectivity products, from March 2012 to January 2017, a director of MarineMax, Inc., a New York Stock Exchange-listed company that is the nation’s largest recreational boat dealer, from June 2009 to February 2014, and as a director of OCZ Technology Group, Inc., a former public company, that designed, manufactured, and distributed solid-state drives and computer components, from June 2010 to August 2014. Mr. Knittel holds a Bachelor of Arts degree in Accounting from California State University at Fullerton and a Master’s degree in Business Administration from San Jose State University. We believe Mr. Knittel’s service as Interim Chief Executive Officer and Chief Financial Officer of our company and his board service at other companies provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Francis F. Lee has been a director of our company since December 1998 and was the Chairman of the Board of Directors of our company from October 2008 to October 2018. Mr. Lee served as Chief Executive Officer of our company from December 1998 until July 2009 and as President of our company from December 1998 to July 2008. Mr. Lee was a consultant from August 1998 to November 1998. From May 1995 until July 1998, Mr. Lee served as General Manager of NSM, a Hong Kong-based joint venture between National Semiconductor Corporation and S. Megga. Mr. Lee held a variety of executive positions for National Semiconductor from 1988 until August 1995. These positions included Vice President of Communication and Computing Group, Vice President of Quality and Reliability, Director of Standard Logic Business Unit, and various other operations and engineering management positions. Mr. Lee is a member of the Board of Directors of Adesto Technologies, a NASDAQ Global Select Market-listed company, which develops innovative,low-power memory solutions. Mr. Lee holds a Bachelor of Science degree, with honors, in Electrical Engineering from the University of California at Davis. We believe Mr. Lee’s service for more than 10 years as our Chief Executive Officer gives him invaluable insights into our business, our culture, our personnel, our opportunities, and our challenges and provides the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Richard L. Sanquini has been a director of our company since 1994. Mr. Sanquini is presently a Partner at LiteCAP, a private equity firm, and has been a consultant in the semiconductor industry for more than five years. Mr. Sanquini is the former Chairman of the Board of Directors of PortalPlayer, Inc., formerly a public company that developed the silicon and operating system firmware for the Apple iPod, and was acquired by NVIDIA Corporation in January 2007. Mr. Sanquini retired from National Semiconductor in 1999 after a20-year tenure, where he managed key business units, including microprocessors and microcontrollers, served as Chief Technology Officer, managed business development and intellectual property protection, and was Chairman of the Board of Directors for two China joint ventures. Prior to National Semiconductor, he served as President and Chief Executive Officer of Information Storage Devices and in various executive positions at RCA. Mr. Sanquini is the Chairman of the Board of Directors of Pixelworks Inc., a NASDAQ Global Select Market-listed company that designs, develops, and markets video and pixel processing semiconductors and software for digital video applications, and is ona member of the BoardsBoard of Directors of two private companies: R2 Semiconductor, a power management company for consumer devices and Keyssa.Kuprion, Inc., a nano-copper materials company. Mr. Sanquini previously served on the Board of Directors of Validity Sensors, Inc., which we acquired in fiscal 2014. Mr. Sanquini holds a Bachelor of Science degree in Electrical Engineering from the Milwaukee School of Engineering, Wisconsin. We believe that Mr. Sanquini’s long career and executive positions with numerous high-technology companies, his engineering background, his knowledge and experience in the semiconductor industry, and his service on numerous boards of directors provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
James L. Whims has been a director of our company since October 2007. Mr. Whims has been a partner at Alsop-Louie Partners, a venture capital firm focused on identifying promising entrepreneurs, since February 2010. From 1996 to 2007, Mr. Whims was a Managing Director of Techfund Capital l, LP and Techfund Capital II, LP and since 2001, a Managing Director and Venture Partner at Techfund Capital Europe, which are venture capital firms concentrating on high-technology enterprises. Mr. Whims also serves onis a member of the Board of Directors and a member of numerous private companies, includingthe Audit Committee and Compensation Committee of DigiLens, a diffractive waveguide optical company, and a member of the Board of Directors and Compensation Committee at each of Kuprion, Inc. a nano-copper materials company, Keyssa, a wireless connectivity company, and Phizzle, Twitch TV, and Keyssa.an engagement automation software company. Mr. Whims was formerly a member of the Board of Directors of THQ, Inc., Portal Player, and 3DFX, all of which were NASDAQ Global Select Market-listed companies.companies, and of Twitch TV, which was a private company. Mr. Whims was Executive Vice President of Sony Computer Entertainment of America from 1994 to 1996, where he was responsible for the North American launch of the Playstation and was the winner of the Brandweek/Ad Week marketing executive of the year. From 1990 to 1994, Mr. Whims was Executive Vice President of Software Toolworks. Mr. Whimsco-founded Worlds of Wonder, an American toy company that launched Teddy Ruxpin, Lazer Tag and the United States launch of Nintendo, where he was an executive from 1985
to 1988. Mr. Whims holds a Bachelor of Science degree from Northwestern University and a Master’s degree in Business Administration from the University of Arizona. We believe Mr. Whims’ senior executive positions with major companies, his experience as an investor in high-technology companies, his service as a director of multiple companies, and his expertise ine-communications and marketing provide the requisite qualifications, skills, perspectives, and experiences that make him well qualified to serve on our Board of Directors.
Election of Nominees
The election of Messrs. Lee, ChanMs. Allgood and SanquiniMr. Hurlston as class 32 directors for three-year terms expiring in 20202022 or until their successors have been elected and qualified will require the affirmative vote of a majority of the votes cast, assuming that a quorum is present at the meeting.
Director Independence
Our Board of Directors has determined, after considering all the relevant facts and circumstances, including information requested from and provided by each director concerning histheir background, employment and affiliation, including family relationships, that Ms. Allgood and Messrs. Buchanan, Chan, Geeslin, Lee, Knittel, Sanquini, and Whims are independent directors, as “independence” is defined by the listing standards of NASDAQ and the SEC, because they have no relationship with us that would interfere with their exercise of independent judgment. Mr. BergmanHurlston is not considered an independent director of our company because of his current position as CEO of our company. There are no family relationships among any of our directors and director nominees or executive officers.
Board Committees
Our bylaws authorize our Board of Directors to appoint, from among its members, one or more committees, each consisting of one or more directors. Our Board of Directors has established threefour standing committees: an Audit Committee, a Compensation Committee, an Executive Committee and a Nominations and Corporate Governance Committee. The members of our Audit Committee, Compensation Committee, Executive Committee and Nominations and Corporate Governance Committee consist entirely of independent directors.
The Audit Committee
The purposes of the Audit Committee include overseeing the financial and reporting processes of our company and the audits of the financial statements of our company, and providing assistance to our Board of Directors with respect to the oversight of the integrity of the financial statements of our company; our company’s compliance with legal and regulatory matters; the independent auditor’s qualifications and independence; and the performance of our company’s independent auditor. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our company’s accounting and financial reporting processes and audits of the financial statements of our company on behalf of our Board of Directors. The Audit Committee also selects the independent auditor to conduct the annual audit of the financial statements of our company; reviews the proposed scope of such audit; reviews accounting and financial controls of our company with the independent auditor and our financial accounting staff; and reviews and approves any transactions between us and our directors, executive officers, and their affiliates.
The Audit Committee currently consists of Messrs. Buchanan, Chan, GeeslinKnittel and Knittel,Lee, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley. Our Board of Directors has determined that each of Messrs. Buchanan, Knittel and KnittelLee (whose backgrounds are detailed above) qualify as an “audit committee financial expert” in accordance with applicable rules and regulations of the SEC. Mr. GeeslinBuchanan currently serves as the Chairman of the Audit Committee.
The Compensation Committee
The purposes of the Compensation Committee include determining, or recommending to our Board of Directors for determination, the compensation of our Chief Executive Officer and other executive officers of our company, and discharging the responsibilities of our Board of Directors relating to compensation programs of our company. The Compensation Committee currently consists of Ms. Allgood and Messrs. Chan,Geeslin, Lee, Sanquini, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. ChanGeeslin currently serves as the Chairman of the Compensation Committee.
The Executive Committee
The purpose of the Executive Committee is to exercise from time to time, and to the fullest extent permitted by law, all powers of the Board of Directors in the management of the business and affairs of the company. The Executive Committee currently consists of Messrs. Buchanan, Chan, Geeslin, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. Chan currently serves as Chairman of the Executive Committee.
The Nominations and Corporate Governance Committee
The purposes of the Nominations and Corporate Governance Committee include selecting, or recommending to our Board of Directors for selection, individuals to stand for election as directors at the annual meeting of stockholders or, if applicable, a special meeting of stockholders, overseeing the selection and composition of the committees of our Board of Directors, and, as applicable, overseeing the management succession planning process. The Nominations and Corporate Governance Committee currently consists of Ms. Allgood and Messrs. Buchanan, Sanquini, and Whims, each of whom is an independent director of our company under NASDAQ listing standards as well as under rules adopted by the SEC pursuant to Sarbanes-Oxley. Mr. Whims serves as the Chairman of the Nominations and Corporate Governance Committee.
The Nominations and Corporate Governance Committee will consider persons recommended by stockholders for inclusion as nominees for election to our Board of Directors if the information required by our bylaws is submitted in writing in a timely manner, and addressed and delivered to our corporate secretary at our executive offices set forth in this proxy statement. In addition to persons recommended by stockholders for inclusion as nominees for election to our Board of Directors, the Nominations and Corporate Governance Committee may also identify director candidates that come to its
attention through incumbent directors, management or third parties, and may, if it deems appropriate under the circumstances, engage a third-party search firm to assist in identifying qualified candidates. The Nominations and Corporate Governance Committee evaluates nominees for director in the same manner, regardless of whether the nominee is recommended by a stockholder or other person or entity.
In making its selection of director candidates, the Nominations and Corporate Governance Committee bears in mind that the foremost responsibility of a director is to represent the interests of our stockholders as a whole. Directors are expected to exemplify the highest standards of personal and professional integrity, and to constructively challenge management through their active participation and questioning. The Nominations and Corporate Governance Committee identifies and evaluates nominees for our Board of Directors based on these and other factors it considers appropriate, some of which may include strength of character, mature judgment, career specialization, relevant technical skills, expertise in areas relevant to the strategy and operations of our company, diversity, and the extent to which the nominee would fill a present need on our Board of Directors. The activities and associations of candidates are also reviewed for any legal impediment, conflict of interest, or other consideration that might prevent service on our Board of Directors.
Committee Charters, Corporate Governance, and Code of Ethics
Our Board of Directors has adopted charters for the Audit, Compensation, Executive and Nominations and Corporate Governance Committees describing the authority and responsibilities delegated to each committee by our Board of Directors. Our Board of Directors has also adopted Corporate Governance Guidelines, a Code of Conduct, and a Code of Ethics for the CEO and Senior Financial Officers. We post the charters of our Audit, Compensation, Executive, and Nominations and Corporate Governance Committees; our Corporate Governance Guidelines, Code of Conduct, and Code of Ethics for the CEO and Senior Financial Officers, and any amendments or waivers thereto; and any other corporate governance materials specified by SEC or NASDAQ regulations on our website at www.synaptics.com. These documents are also available in print for any stockholder requesting a copy in writing from our corporate secretary at our executive offices set forth in this proxy statement.
Board’s Role in Risk Oversight
As is the case in virtually all businesses, we face a number of risks, including operational, economic, financial, legal, regulatory, and competitive risks. Our management is responsible for theday-to-day management of the risks we face. Our Board of Directors, as a whole and through its committees, has responsibility for the oversight of risk management.
Our Board of Directors’ involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. Our Board of Directors receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face. Our Board of Directors also reviews the various risks we identify in our filings with the SEC, as well as risks relating to various specific developments, such as acquisitions, stock repurchases, debt and equity placements, and product introductions.
Our Board committees assist our Board of Directors in fulfilling its oversight role in certain areas of risk. Pursuant to its charter, the Audit Committee oversees the financial and reporting processes of our company and the audit of the financial statements of our company, and provides assistance to our Board of Directors with respect to the oversight and integrity of the financial statements of our company, our company’s compliance with legal and regulatory matters, the independent auditor’s qualification and independence, and the performance of our independent auditor. The Compensation Committee considers the risks that our compensation policies and practices may have in attracting, retaining, and motivating valued employees and endeavors to assure that it is not reasonably likely that our compensation policies and practices would have a material adverse effect on our company. Our Nominations and Corporate Governance Committee oversees governance-related risks, such as director independence, conflicts of interests, and management succession planning.
Board Diversity
We seek diversity in experience, viewpoint, education, skill, and other individual qualities and attributes to be represented on our Board of Directors. We believe directors should have various qualifications, including individual character and integrity; business experience and leadership ability; strategic planning skills, ability, and experience; requisite knowledge of our industry and finance, accounting, and legal matters; communications and interpersonal skills; and the ability and willingness to devote time to our company. We also believe the skill sets, backgrounds, and qualifications of our directors, taken as a whole, should provide a significant mix of diversity in personal and professional experience, background, viewpoints, perspectives, knowledge, and abilities. Nominees are not to be discriminated against on the basis of race, religion, national origin, sex, sexual orientation, disability, or any other basis proscribed by law. The assessment of directors is made in the context of the perceived needs of our Board of Directors from time to time.
All of our directors have held high-level positions in business or professional service firms and have experience in dealing with complex issues. We believe that all of our directors are individuals of high character and integrity, are able to work well with others, and have committed to devote sufficient time to the business and affairs of our company. In addition to these attributes, the description of each director’s background set forth above indicates the specific experience, qualifications, and skills necessary to conclude that each individual should continue to serve as a director of our company.
Board Leadership Structure
We believe that effective board leadership structure can dependdepends on the experience, skills, and personal interaction between persons in leadership roles as well as the needs of our company at any point in time. We currently maintain separate roles between the Chief Executive Officer and the Executive Chairman or Chairman of the Board in recognition of the differences between the two responsibilities. Our Chief Executive Officer is responsible for setting our strategic direction and forday-to-day leadership and performance of our company. Our Executive Chairman or Chairman of the Board provides input to the Chief Executive Officer, sets the agenda for Board of Directors meetings, and presides over meetings of the full Board of Directors as well as executive sessions of the Board of Directors.
We currently select, on a rotating basis, one of our independent directors to serve as Lead Director. Mr. Geeslin is currently serving as our Lead Director. In that role, Mr. Geeslin helps to facilitate communication and interaction between the Board of Directors and management.
Prohibition on Derivatives Trading and Hedging
Our Insider Trading Policy prohibits the members of our Board of Directors, and employees, including our executive officers, employees, and any family member residing in the same household of such persons from engaging in derivatives trading and hedging involving our securities without the prior approval of our Chief Financial Officer and our General Counsel.
Stock Ownership Guidelines
We maintain stock ownership guidelines that require our Chief Executive Officer to own shares of our common stock with a value equal to at least three times his annual base salary and thenon-employee members of our Board of Directors to own shares of our common stock with a value equal to at least five times their annual cash retainer. These individuals hadhave five years from fiscal 2012, when these guidelines were adopted,their date of appointment, promotion or hire into the applicable role to achieve their required ownership levels,levels. Each individual subject to these guidelines who has been with the company and each of these individuals has compliedin their position for more than five years is in compliance with such guidelines. We believe that these guidelines promote the alignment of the long-term interests of our Chief Executive Officer and the members of our Board of Directors with our stockholders. Further, we believe that these guidelines help mitigate the risks associated with our executive compensation program.
Compensation Committee Interlocks and Insider Participation
From June 26, 2016 to October 25, 2016, ourOur Compensation Committee consistedconsists of Ms. Allgood and Messrs. Geeslin, Sanquini, and Whims. From October 26, 2016 onwards, our Compensation Committee consisted of Messrs. Chan,Lee, Sanquini and Whims. None of these individuals was an officer or employee of the Companycompany or had any contractual or other relationships with us during the fiscal year except as directors, and none of these individuals, other than Mr. Lee, was formerly an officer of the Company.company. None of our executive officers currently serves, or in the past has served, as a member of the board of directors or as a member of the compensation committee for any entity, which has one or more of its executive officers serving on our Company’scompany’s Board of Directors or Compensation Committee.
Board and Committee Meetings
Our Board of Directors held a total of nine meetings during fiscal 2017.2019. During fiscal 2017,2019, the Audit Committee held five meetings; the Compensation Committee held six meetings; the CompensationExecutive Committee held seven meetings;one meeting; and the Nominations and Corporate Governance Committee held one meeting.three meetings. Each of our directors attended at least 75% of the total number of meetings ofheld in fiscal 2019 by our Board of Directors held during fiscal 2017 and the total numbereach of meetings held by allthe committees of our Board of Directors on which such person served during fiscal 2017.2019.
Executive Sessions
We regularly schedule executive sessions of our Board of Directors at whichnon-management directors meet without the presence or participation of management. The Chairman or Executive Chairman of our Board of Directors presides at such executive sessions. We also schedule meetings of the independent directors, which are presided over by our Lead Director.directors.
Annual Meeting Attendance
We encourage our directors to attend each Annual Meeting of Stockholders. To that end, and to the extent reasonably practicable, we generally schedule a meeting of our Board of Directors on the same day as our Annual Meeting of Stockholders. All of our directors attended our Annual Meeting of Stockholders last year.
Communications with Directors
Interested parties may communicate with our Board of Directors or specific members of our Board of Directors, including our independent directors and the members of the various committees of our Board of Directors, by submitting a letter addressed to the Board of Directors of Synaptics Incorporated, c/o any specified individual director or directors at our executive offices: 1251 McKay Drive, San Jose, California 95131-1709. Any such letters will be forwarded to the indicated directors.
COMPENSATION DISCUSSION AND ANALYSIS
Named Executive Officers
This Compensation Discussion and Analysis provides an overview of the material components of our executive compensation program for the following executive officers:
● | Alex Wong, our former Principal Executive Officer (“PEO”) and current Senior Vice President of Worldwide Operations; |
● | Kermit Nolan, our Chief Accounting Officer and Interim Chief Financial Officer; |
● | Richard Lu, our Senior Vice President and General Manager, Mobile and Automotive Division; |
● | Shawn Liu, our Senior Vice President and General Manager, PC Division; |
● | John McFarland, our Senior Vice President, General Counsel and Secretary; |
● | Richard A. Bergman, our former Chief Executive Officer & President (“former CEO”); |
● | Wajid Ali, our former Senior Vice President and Chief Financial Officer (“former CFO”); and |
● | Huibert Verhoeven, our former Senior Vice President & General Manager, Internet of Things (“IoT”) Division. |
Following the departure of Mr. Bergman, our former Chief Executive Officer &and President, (our “CEO”);
Analysis for fiscal 2019 as required by applicable SEC rules.
We refer to these executive officers collectively in this Compensation Discussion and Analysis and the related compensation tables as our “Named Executive Officers” or “NEOs.” Mr. Hurlston was not a NEO in our fiscal 2019 and is excluded from this Compensation Discussion and Analysis as a NEO, since his employment with the company began after the end of our fiscal 2019.
Specifically, thisThis Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and each component of compensation that we provide. In addition, we explain how and why the Compensation Committee of our Board of Directors, or the Compensation Committee, arrived at the specific compensation policies and decisions involving our executive officers, including our Named Executive Officers, during fiscal 2017.2019.
Executive Summary
Our executive compensation programs areprogram is designed to align executive realized compensation with company performance (both financial results and stock price performance). Both cash and equity compensation for fiscal 20172019 reflect the generally weak financial and stock price performance of the Companyour company in fiscal 2017.2019.
The following compensation practices and decisions highlight our commitment to pay for performance:
● | At the beginning of fiscal 2019, our Compensation Committee and our former CEO chose to retain base salaries for our former CEO and NEOs at or below the market median in order to emphasize performance-based pay through their annual cash bonus opportunity and equity compensation. |
● | Annual performance-based cash bonus payouts are aligned with company performance. In fiscal 2019, bonuses for our currently-employed Named Executive Officers who did not have a guaranteed bonus were paid at approximately 50% of target, on average. Below-target payouts reflect performance relative to our operating plan. |
● | Equity “refresh” compensation was granted to our Named Executive Officers in a mix of 33% performance stock units (“PSUs”), 33% market stock units (“MSUs”) and 33% deferred stock units (“DSUs”). Our Compensation Committee believes that performance-based equity, in the form of both PSUs and MSUs, provides stronger alignment with the creation of stockholder value, requiring financial performance targets to be met and our stock price to perform well on an absolute and relative basis for value to be realized. |
Fiscal 2017 was our fifth full fiscal year under the tenure of Mr. Bergman as our CEO. During fiscal 2017,2019, net revenue increaseddecreased from fiscal 2016, while2018, andnon-GAAP operating income,income/(loss), net income,income/(loss), and net incomeincome/(loss) per diluted share declined from fiscal 2016.2018. As a result, given our emphasis onnon-GAAP operating income, or operating profit, in our annual performance-based cash bonus plan, the actual cash compensation paid to our executive officers, including our Named Executive Officers, was significantly below their target total direct cash compensation opportunities for the year.
Fiscal 20172019 Financial Results
Our performance for fiscal 2017 came in roughly as anticipated2019 was below expectations with revenue slightly updown from the prior fiscal year2018 driven by strong growth from our fingerprint and touch and display driver integrated solutions, which offset the steepa decline in our mobile discrete display driver business.and IoT businesses. GAAP operating loss for fiscal 2019 declined to $(6.3) million from $(61.9) million in fiscal 2018 andnon-GAAP operating income for fiscal 2017 were down $10.5 million and $15.42019 declined to $159.7 million from $161.8 million in fiscal 2016, respectively,2018, driven primarily by lower gross margins,reduced revenue, partially offset by lowerreduced operating expenses. GAAP operating loss was favorably impacted by reduced acquisition-related costs of $58.7 million and a favorable product mix, whilenon-GAAP operating income benefited from improvednon-GAAP gross margin of 240 basis points year-over-year. GAAP net loss per diluted share improved $2.97 year-over-year, whilenon-GAAP net income per diluted share was down $0.54 year-over-year, while non-GAAP net income per diluted share was up $0.12 year-over-year, favorably impacted by our ongoing share repurchase program.$0.05 year-over-year.
For fiscal 2017,2019, we recorded the following significant financial results:
● | Net revenue was $1.47 billion, a 10% decrease from net revenue of $1.63 billion for fiscal 2018; |
● | GAAP operating loss was $(6.3) million, compared with GAAP operating loss of $(61.9) million for fiscal 2018; |
● | GAAP net loss was $(22.9) million, or $(0.66) per diluted share, compared with GAAP net loss of $(124.1) million, or $(3.63) per diluted share, for fiscal 2018; |
● | Non-GAAP operating income, or operating profit, was $159.7 million, or 10.8% of net revenue, compared withnon-GAAP operating income of $161.8 million, or 9.9% of net revenue, for fiscal 2018; and |
● | Non-GAAP net income was $141.2 million, or $4.00 per diluted share, compared withnon-GAAP net income of $141.4 million, or $4.05 per diluted share, for fiscal 2018. |
See Appendix A to this Proxy Statement for a reconciliation of our GAAP tonon-GAAP financial results.
Pay for Performance Analysis
Our compensation philosophy emphasizes performance-oriented compensation through:
● | Modest base salaries, which are generally positioned at or below the peer market median; |
● | Annual performance-based cash bonus opportunities aligned with our annual operating plan and key strategic objectives; and |
● | Stock-based compensation provided in three components to balance performance orientation and stockholder alignment (approximately 66% of the total fiscal 2019 equity refresh awards granted to our NEOs were in the form of PSUs and MSUs), and to meet our retention objectives (approximately 33% of the fiscal 2019 equity awards granted to our NEOs were in the form of DSUs). |
The Company’scompany’s weak performance in fiscal 20172019 and strong performance-based planprogram design resulted in significantly below-target compensation, as detaileddescribed below:
In the below chart we summarize CEO target and realizable compensation. Over the last three years, realizable compensation significantly trailed target compensation levels.
Annual performance-based cash bonus pool achievement was approximately 72% of target |
● | As of our record date (September 3, 2019), outstanding MSUs |
Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the |
o | Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 16% payout for the second performance period; and |
o | Fiscal 2019 MSUs granted to our NEOs (with payouts through fiscal 2022) are tracking to a 17% payout for the |
● | As of |
As outlined in the above CEO realizable pay analysis, the equity compensation we grant to our executive officers aligns their compensation with company performance and the creation of stockholder value. In our fiscal 2017, approximately 83% of our CEO’s target compensation was delivered through equity awards; as a result, realizable compensation varies meaningfully based on stock price performance.2019.
CEO pay is also aligned with performance on a relative basis. The following tables illustrate the alignment of our CEO’s compensation (on a “realizable pay” basis) with our financial performance (based on total stockholder return, or TSR) relative to the Company’s current compensation peer group. As demonstrated by these tables, the realizable compensation of our CEO for fiscal 2017 was well aligned with our one-year and three-year TSR, as of June 23, 2017, when compared with our current compensation peer group.
The vertical axis represents the percentile ranking of our TSR and our compensation peer group’s TSR over the indicated period. The horizontal axis represents the percentile ranking of our CEO’s realizable compensation and our compensation peer group’s chief executive officers’ realizable compensation over the indicated period.
We have consistently set aggressive target levels for the financial performance measures used in our annual performance-based cash bonus plan. As reflected in the followingbelow table,non-GAAP operating income declined year-over-year driving a reduction in the annual bonus pool achievement to 72% for fiscal 2017.2019. Actual bonus payment to the CEOour Named Executive Officers in fiscal 2017 significantly trailed the achievement level of our financial2019 was further reduced to 50% based on individual performance measures.
Executive Transition
In connection with Mr. Bergman’s departure as our President and Chief Executive Officer, Mr. Wong became our Principal Executive Officer effective as of March 2019. In connection with Mr. Ali’s departure as our Chief Financial Officer, Mr. Nolan was promoted to Chief Accounting Officer and became our Interim Chief Financial Officer as of February 2019. Mr. Wong did not receive any additional compensation in connection with his role as Principal Executive Officer. Mr. Nolan did not receive any additional compensation in connection with his role as Interim Chief Financial Officer, although Mr. Nolan did receive additional compensation in connection with his promotion to our Chief Accounting Officer. Messrs. Wong, Nolan, Lu, Liu and McFarland currently participate in our executive retention program, which was implemented to encourage each executive’s continued commitment to the support and management of the operations of the company during the transition to new executive leadership. Each executive officer who participates in our executive retention program will receivelump-sum cash award payments of 1.4 to 1.9 times such executive officer’s base salary (determined in each case by the Executive Committee) in November 2020 should they remain as full-time active employees of our company in good standing for 18 consecutive calendar months starting May 1, 2019 and fulfill certain other conditions as further described under the “Executive Retention Program” section of this Compensation Discussion and Analysis.
In August 2019, Mr. Hurlston joined the company as our President and Chief Executive Officer. Mr. Hurlston’s offer letter provides that he will receive a base salary of $700,000 and that he is eligible to receive a target cash bonus opportunity of 130% of his base salary, prorated for our fiscal 2020. Payment of his cash bonus will be based on company-wide performance, consistent with our pay for performance bonus plan, and is ultimately at the discretion of our Board of Directors. Mr. Hurlston also received an initial equity grant of 59,772 RSUs and a target amount of 154,985 MSUs granted
under our 2019 Inducement Equity Plan (the “2019 Inducement Plan”), which was recently adopted by the company under an exception to the Nasdaq Stock Market Listing Rules’ shareholder approval requirement for the issuance of securities with regards to grants to employees of the company or its subsidiaries as an inducement material to such individuals entering into employment with the company or its subsidiaries. Mr. Hurlston’s RSUs will vest annually over four years, with vesting contingent on Mr. Hurlston’s continued service with the company. Mr. Hurlston’s MSUs will vest annually over four years, with achievement of the MSU target amount contingent on the company’s total shareholder return performance, as further described in the “Compensation Elements: Long-Term Incentive Compensation: MSU Awards” section below. In addition, Mr. Hurlston may be eligible for certain contingent equity grants (as described and defined under Proposal Four to this Proxy Statement, in the “New Plan Benefits” section of such proposal).
Mr. Hurlston’s base salary, annual target cash bonus opportunity, and initial equity grants (collectively, his “Initial Annual Compensation”) are aligned with our pay for performance philosophy, with 64% of his Initial Annual Compensation in the form of performance-based compensation.
Results of Most RecentSay-on-Pay Vote
At our 20162018 Annual Meeting of Stockholders, we conducted our sixtheighth stockholder advisory vote on the compensation of our Named Executive Officers (commonly referred to as a “say-on-pay”“say-on-pay” vote). Our stockholders approved the fiscal 20162018 compensation of our Named Executive Officers, with approximately 74%67% of the votes cast in favor of oursay-on-pay proposal.
Following our 20162018 Annual Meeting of Stockholders, the Compensation Committee reviewed the results of thesay-on-pay vote and continued the process ofre-examining the executive compensation program to ensure it is performance-based and aligns compensation levels with stockholder outcomes. Our Compensation Committee also focused further on strengthening the leadership of the company, which resulted in several leadership transitions in fiscal 2019, including the departure of our CEO. In addition to hiring a new CEO, in fiscal 2020, the company intends to reach out to our shareholders representing at least 60% of our total shares outstanding as of our record date, to solicit feedback from such shareholders on topics related to pay practices, proxy disclosures and corporate governance, and to learn about any shareholder outcomes.concerns that may have affected the most recentsay-on-pay vote results. After we receive feedback from shareholders, we intend to review and adjust our compensation program as necessary in response. The following practices illustrate the Compensation Committee and management teams’ commitment to a pay for performance program:philosophy:
● | Challenging annual performance-based cash bonus plan design and resulting payouts that significantly trail target bonus opportunities; |
● | Equity pay mix for our NEOs with a 67% “refresh” performance-based equity weighting to ensure the majority of equity compensation is directly linked to performance conditions; and |
● | Continuing to review and adopt best practice compensation policies, as deemed appropriate by the Compensation Committee, including stock ownership guidelines, hedging restrictions and a compensation recovery (“clawback”) policy. |
Our Board of Directors determined that our stockholders should have the opportunity to cast an advisory vote on the compensation of our Named Executive Officers each year, consistent with the preference expressed by our stockholders at our Annual Meeting of Stockholders in October 2011. Our stockholders once again have the opportunity, as described in Proposal Three, to indicate, on an advisory basis, their preference on how frequently the “say-on-pay” vote should occur. See “Proposal Three: Advisory Vote on Determining the Frequency of Say-On-Pay”, for further details about this year’s “say-on-frequency” vote, including our Board of Directors’ recommendation to vote “1 year” for an annual “say-on-pay” vote.2017.
Compensation Philosophy and Objectives
We are a leading worldwide developer and supplier of custom-designed human interface semiconductor product solutions that enable people to interact more easily and intuitively with a wide variety of mobile computing, communications, entertainment, and other electronic devices. We operate in a highly competitive business environment, which is characterized by frequent technological advances, rapidly changing market requirements, and the emergence of new market entrants. To successfully compete in this dynamic environment, we must continually develop and refine our products and services to stay ahead of customer needs and challenges. To achieve these objectives, we need a highly talented and seasoned team of engineering, sales, marketing, operations, and other business professionals.
We are headquartered in the Silicon Valley region of Northern California and compete with many of the premier global technology companies in attracting and retaining a skilled management team and key engineering talent. Our competitors for management and engineering talent use stock-based compensation as an important element of their overall compensation programs. To meet the challenges presented by our operating environment, we have embraced a compensation philosophy that seeks to achieve the following specific objectives:
● | reward the successful achievement of our financial objectives; |
● | drive the development of a successful and profitable business; |
● | attract, motivate, reward, and retain highly qualified executive officers who are important to our success; |
● | align compensation to our interests as a whole and the interests of our stockholders, which requires an emphasis on stock-based compensation; and |
● | recognize strong performing executive officers by offering compensation that rewards individual achievement, corporate stewardship, and fiscal responsibility, as well as contributions to our overall success. |
Total compensation levels are set to reflect the role, responsibilities, and contributions of each executive officer, as well as the achievement of corporate and individual financial and operational goals. As a result of our compensation philosophy, compensation levels may vary significantly from fiscal year to fiscal year on an absolute basis and among our various executive officers.
Each year, the most important measure in assessing our corporate performance is operating profit. At the same time, the most important measure of individual performance is the achievement of each executive officer’s individual objectives that vary from year to year and position to position, but generally include financial and operating performance, product success, timely product delivery, forecasting accuracy, customer satisfaction, cost reduction, leadership, team building, and employee retention.
We expect the compensation level of our CEOChief Executive Officer (“CEO”) will be higher than that of our other executive officers, assuming relatively equal achievement of individual performance objectives, since our compensation policies establish the framework for our executive officers’ base salaries, target annual performance-based cash bonus opportunities, and stock-based compensation after reviewing those of comparable companies, which generally compensate their chief executive officers at higher levels because of their roles and their importance to overall company success.
Compensation-Setting Process
Our Board of Directors has appointed the members of the Compensation Committee, which consists solely of independent directors. The Compensation Committee is authorized to determine and approve or make recommendations to our Board of Directors for approval with respect to, the cash compensation of our executive officers, including our Named Executive Officers, and to grant, or recommend the grant of, stock-based compensation to our executive officers, including our Named Executive Officers. The Compensation Committee currently makes compensation-related decisions regarding our executive officers.
Role of the Compensation Committee
The Compensation Committee evaluates the performance of our CEO each fiscal year and determines his compensation in light of our goals and objectives for that year. The Compensation Committee, together with our CEO, assesses the performance of our other executive officers, including our other Named Executive Officers, each year. Based in part on the recommendations of our CEO, the Compensation Committee determines the compensation of our other executive officers.
Role of the Chief Executive Officer
At the request of the Compensation Committee, our CEO typically attends a portion of each Compensation Committee meeting, including meetings at which the Compensation Committee’s compensation consultant is present. This enables the Compensation Committee to review with our CEO the corporate and individual goals and objectives that he regards as important to our overall success. The Compensation Committee also requests that our CEO assess the performance of, and our goals and objectives for, our other executive officers, including our other Named Executive Officers. Although the participation of our CEO may influence the establishment of performance target levels and individual objectives, including his own, the Compensation Committee makes all determinations regarding corporate and individual performance measures, goals, and objectives, and related target levels. Our CEO does not attend any portion of the Compensation Committee meetings at which his compensation is discussed.
Role of the Compensation Consultant
The Compensation Committee also retains a compensation consultant to assist in the discharge of its responsibilities, including reviewing trends in executive compensation and identifying relevant comparable companies. The Compensation Committee makes all determinations regarding the engagement, fees, and services of the compensation consultant or other advisor, and its compensation consultant or other advisor reports directly to the Compensation Committee.
During fiscal 2017,2019, the Compensation Committee engaged Compensia, Inc. (“Compensia”), a national compensation consulting firm, to assist it in connection with its review of our fiscal 20172019 executive compensation program and its analysis of the competitive market for executive talent. Compensia provided the Compensation Committee with an analysis of the compensation practices of the companies in the compensation peer group; determined our compensation positioning relative to the compensation peer group; developed market-based guidelines for the structure of our fiscal 20172019 executive compensation program; reviewed the overall compensation packages;packages of our executive officers; and advised the Compensation Committee regarding the propriety of our fiscal 20172019 executive compensation program.
Compensia also provided advice to the Compensation Committee regarding the development of the 2019 Equity and Incentive Compensation Plan and 2019 Employee Stock Purchase Plan, which are being submitted to our stockholders for a vote as Proposals Four and Five, respectively, in this Proxy Statement. Compensia attends most Compensation Committee meetings and provides additional assistance as requested on topics including Board compensation, executive severance and change in control agreements, bonus plan design and other topics, as requested by the Compensation Committee.
The Compensation Committee has considered the independence of Compensia in light of the listing standards of NASDAQ on compensation committee independence and the rules of the SEC. The Compensation Committee requested and received confirmation from Compensia concerning certain factors for determining the independence of the firm and its senior advisors working with the Compensation Committee. The Compensation Committee discussed these considerations and concluded that the work performed by Compensia did not raise any material conflict of interest.
Use of Competitive Market Data
In determining the compensation of our executive officers, including our Named Executive Officers, the Compensation Committee considers data gathered from a self-constructed group of peer companies, and published survey data for technology companies.
During the latter stages of fiscal 2016,2018, after consultation with Compensia, the Compensation Committee developed and approved a compensation peer group for use in its executive compensation decisions for fiscal 20172019 based on the following selection criteria:
● | Industry: companies that compete in the semiconductor or peripherals industries or that supply technology components to original equipment manufacturers, or OEMs. |
● | Revenue: companies with revenue between approximately $577 million and $5.2 billion, based upon the last four quarters of reported revenue at the time of selection. |
● | Market capitalization: companies with a market capitalization of greater than $433 million at the time of selection. |
The companies included in the compensation peer group approved by the Compensation Committee for fiscal 2019 were as follows:
Ambarella Cirrus Logic Cree Cypess Semiconductor Inphi | ||||
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Integrated Device Technology Knowles M/A-COM Technology Solutions Marvell Technology Maxim Integrated Products | Mellanox Technologies Microsemi Technology ON Semiconductor Qorvo Silicon Laboratories |
The Compensation Committee strives to select peer companies such that our company falls near the median for revenue and market capitalization within the selected peer group. For fiscal 2018,2020, based upon recommendations from Compensia, the Compensation Committee approved changes to the compensation peer group criteria to include semiconductor companies with revenue of between approximately $530$543 million and $4.8$4.9 billion, based upon the last four quarters of reported revenue at the time of selection, and a market capitalization ofequal to or greater than $640$430 million. As a result of the new criteria, including acquisition and merger activity impacting the companies in the compensation peer group, the Compensation Committee removed Fairchild Semiconductor, Invensense, LinearMicrosemi Technology and NVIDIA,Integrated Device Technology, and added Ambarella, CaviumDiodes and Marvell TechnologySemtech to the compensation peer group for fiscal 2018.2020.
Compensation Elements
Our executive compensation program consists primarily of three elements: base salary, annual performance-based cash bonuses, and long-term incentive, or LTI, compensation in the form of stock-based awards. Our executive officers also participate in several company-wide benefit plans, including retirement and health and welfare benefit plans, which generally are available to all regular full-time employees.
Base Salary
We seek to pay base salaries at competitive levels that enable us to attract, motivate, and retain highly qualified executive officers. Base salaries for our executive officers, including our Named Executive Officers, reflect the Named Executive Officer’seach individual’s position, responsibilities, experience, skills, performance, and ongoing and expected future contributions. In determining base salary, the Compensation Committee also takes into account salary levels for similar positions at the companies in the compensation peer group and base salary levels relative to other positions within our company. Consistent with our compensation philosophy, we set the base salaries of our executive officers at levels that are less thanat or below the market median to reinforce our desire that our annual performance-based cash bonuses and LTI compensation, which are based on our financial performance and our executive officers’ achievement of individual performance objectives as set from time to time, represent athe most significant portion of theour executive officers’ target total direct compensation each year.
The Compensation Committee determines the annual base salary of our CEO in its sole discretion. The base salaries of our other executive officers, including our other Named Executive Officers, are determined by the Compensation Committee after considering the recommendations of our CEO as well as the factors described above.
As has been its practice, for fiscal 2017,2019, the Compensation Committee set the base salaries for our executive officers, including our Named Executive Officers, at the beginning of the fiscal year. No base salary adjustments were made for fiscal 2017 based on the Compensation Committee’s review of company performance and the market assessment. The annual base salaries for our Named Executive Officers during fiscal 20172019 were as follows:
Named Executive Officer | Annualized Fiscal 2016 Base Salary | Annualized Fiscal 2017 Base Salary(1) | Percentage Change | Annualized Fiscal 2018 Base Salary | Annualized Fiscal 2019 Base Salary | Percentage Change | ||||||||||||||||||
Alex Wong | $340,000 | $350,000 | 2.94% | |||||||||||||||||||||
Richard A. Bergman | $ | 700,000 | $ | 700,000 | — | $700,000 | $700,000 | 0.00% | ||||||||||||||||
Kermit Nolan | $265,200 | $298,424 | (1) | 12.53% | ||||||||||||||||||||
Wajid Ali | $ | 395,000 | $ | 395,000 | — | $395,000 | $400,000 | 1.27% | ||||||||||||||||
Kevin Barber | $ | 370,000 | $ | 370,000 | — | |||||||||||||||||||
Shawn Liu | $290,000 | $330,000 | 13.79% | |||||||||||||||||||||
Richard Lu | - | $350,000 | - | |||||||||||||||||||||
John McFarland | $340,000 | $350,000 | 2.94% | |||||||||||||||||||||
Huibert Verhoeven | $ | 340,000 | $ | 340,000 | — | $340,000 | $370,000 | 8.82% | ||||||||||||||||
Alex Wong | $ | 340,000 | $ | 340,000 | — |
(1) | The |
In June 2016, our Named Executive Officers requested a voluntary and temporary base salary reduction for fiscal 2017 of 20% for Mr. Bergman and 10% for our other Named Executive Officers. The salary reductions were reviewed and approved by the Compensation Committee.
Annual Performance-Based Cash Bonuses
We use annual performance-based cash bonuses to motivate our executive officers, including our Named Executive Officers, to achieve our annual financial and operational objectives as set forth in our annual operating plan, while making progress towards and supporting our longer-term strategic and growth goals. The payment of these bonuses is based upon the achievement of one or more corporate performance objectives, which typically include meeting a specified target level of operating profit and individual performance goals.
At the beginning of each fiscal year, our Board of Directors approves our annual operating plan, which forms the basis for the corporate performance measures and individual performance goals for our annual performance-based cash bonuses. Further, the Compensation Committee reviews and sets the framework for the annual performance-based cash bonuses for the fiscal year, including confirming the plan participants, establishing a target annual cash bonus opportunity for
each participating executive officer, and reviewing the corporate performance measures and individual performance goals for the fiscal year.
Target Bonus Opportunities
As in prior years, the Compensation Committee determined that the target annual cash bonus opportunities for each of our Named Executive Officers for fiscal 20172019 should be based on a percentage of such Named Executive Officer’s base salary. The target annual cashpercentage bonus opportunity established for each Named Executive Officer for fiscal 20172019, other than Messrs. Nolan and Lu, was as follows:
Named Executive Officer | Annualized Fiscal 2017 Base Salary | Target Annual Cash Bonus Opportunity (as a percentage of base salary) | Target Annual Cash Bonus Opportunity (as a dollar amount) | |||||||||
Richard A. Bergman | $ | 700,000 | 145 | % | $ | 1,015,000 | ||||||
Wajid Ali | $ | 395,000 | 75 | % | $ | 296,250 | ||||||
Kevin Barber | $ | 370,000 | 75 | % | $ | 277,500 | ||||||
Huibert Verhoeven | $ | 340,000 | 75 | % | $ | 255,000 | ||||||
Alex Wong | $ | 340,000 | 75 | % | $ | 255,000 |
maintained at its fiscal 2018 levels.
In setting these target annual cash bonus opportunities for our Named Executive Officers, the Compensation Committee exercised its judgment and considered several factors, including our overall financial and operational results for the prior fiscal year, the prior performance of each individual Named Executive Officer, the Named Executive Officer’s potential to contribute to our long-term strategic success, the Named Executive Officer’s role and responsibilities, the Named Executive Officer’s individual experience and skills, market practices for annual bonuses, and, for our other Named Executive Officers, the recommendations of our CEO. No changes were made to target incentive opportunities in fiscal 2017.Mr. Bergman.
Corporate Performance Measures
For fiscal 2017,2019, our Board of Directors selectednon-GAAP operating profit as the primary corporate performance measure, representing 75% of the target annual cash bonus opportunity, together with selected strategic performance goals, representing the remaining 25% of the target annual cash bonus opportunity, as the criterioncriteria that best supported our annual operating plan and enhanced long-term value creation for purposes of funding our bonus pool. As determined by the Compensation Committee, our executive officers, including our Named Executive Officers, were eligible to earn cash bonus payments based on our actual performance against thenon-GAAP operating profit target set forth in our fiscal 20172019 annual operating plan. Fiscal 2017 non-GAAP operating profit was determined by adjusting GAAP operating profit for impairment of intangible assets; acquisition and integration related costs, which includes amortization of purchased intangible assets and changes in contingent consideration; share-based compensation costs; and restructuring costs (for more information on how non-GAAP operating profit is calculated, see Appendix A of this Proxy Statement). For fiscal 2017, the target level for the non-GAAP operating profit performance measure was $259 million and we achieved $204 million. The operating profit achievement and assessment of strategic goal attainment resulted in a bonus pool funded at 72% for our fiscal 2017. Our Board of Directors set thesethis target levelslevel to be aggressive, yet achievable, with diligent effort during the fiscal year.
Individual Performance Objectives
Consistent with our compensation philosophy of rewarding individual performance, our CEOat the start of fiscal 2019, Mr. Bergman developed and recommended to the Compensation Committee a series of individual performance goals for our executive officers, including our other Named Executive Officers, which he deemed to be integral to the achievement of our annual operating plan. These objectives were approved by the Compensation Committee. The Compensation Committee determined the individual performance goals that should be used to assess the performance of our CEO.Mr. Bergman.
For purposes of the fiscal 20172019 annual performance-based cash bonuses, the individual performance goals for each of our Named Executive Officers were as follows:
● | Mr. Wong – Focus on achieving fiscal 2019 annual operating plan by having the necessary supply chain, inventory and service levels to fulfill customer demand, along with responsibility of product quality by developing, directing and implementing quality strategies in support of overall business goals. |
● | Mr. Bergman – Achieve our fiscal 2019 annual operating plan, support our business growth objectives, evaluate and drive long-term corporate growth strategies and market opportunities, and foster an environment of high integrity and ethics. |
● | Mr. Nolan – Support our business growth objectives with appropriate processes and controls, monitor and review our corporate and financial structure, set future financial and tax strategy, and foster an environment of high integrity, ethics, and regulatory compliance. |
● | Mr. Ali – Support our business growth objectives with appropriate processes and controls, monitor and review our corporate and financial structure, set future financial strategy, and foster an environment of high integrity, ethics, and regulatory compliance. |
● | Mr. Liu – Expand position within strategic customers, drive market share within strategic markets, establish long-term focus and strategy for identified personal computer, or PC, market strategies, and support the overall achievement of our fiscal 2019 annual operating plan. |
● | Mr. Lu – Expand position within strategic customers, drive market share within strategic markets, establish focus and strategy for identified Mobile and Automotive market strategies, and support the overall achievement of our fiscal 2019 annual operating plan. |
● | Mr. McFarland - Manage internal and external legal expenses within budget with no loss in responsiveness or increase in risk, manage ongoing litigation and claims to conclusion within acceptable cost/benefit limits, emphasize return on investment for our intellectual property, and foster an environment of high integrity, ethics, and regulatory compliance. |
● | Mr. Verhoeven – Expand and develop our IoT position within strategic customers, identify and drive market share within strategic markets with existing products, establish long-term focus for IoT market strategies based on the integration efforts of the two acquisitions that are focused on the expansion of our IoT market position, and support the achievement of our fiscal 2019 annual operating plan. |
After the end of the fiscal year, our CEOthe Compensation Committee evaluated each executive officer’s progress, including the progress of our PEO, towards the achievement of their individual performance objectives. In the case of our CEO, the Compensation Committee evaluated his progress towards the achievement of his individual performance goals.
Fiscal 20172019 Bonus Decisions
For fiscal 2017,2019, annual performance-based cash bonus payments were determined after the end of the fiscal year by the Compensation Committee. The Compensation Committee’s determination of the annual performance-based cash bonuses involved a multi-step process. First, the Compensation Committee established the annual target cash bonus pool for fiscal 20172019 based on the aggregate target annual cash bonus opportunities for all of our employees, including our executive officers. The portion of the bonus pool that was subject to the actual level of achievement of the pre-established non-GAAPpre-establishednon-GAAP operating profit target level for the fiscal year was adjusteddetermined based on our performance relative to thenon-GAAP operating profit target level as approved by our Board of Directors at the beginning of the year. Second, the portion of the bonus pool that was subject to the actual level of achievement of thepre-established strategic goals for the fiscal year, was adjusteddetermined based on our performance relative to thepre-established strategic goals as approved by our Board of Directors at the beginning of the year.
For fiscal 2019, the target level for thenon-GAAP operating profit performance measure was $208 million and we achieved $160 million. Fiscal 2019non-GAAP operating profit was determined by adjusting GAAP operating profit for acquisition and integration related costs; share-based compensation costs; restructuring costs; CEO severance costs; retention program costs; and costs associated with a loss on a supply agreement (for more information on hownon-GAAP operating profit was calculated, see Appendix A of this Proxy Statement). Based on the actual level of operating profit achievement and an assessment of strategic goal attainment, our bonus pool for all employees was funded at approximately 72% and at 50% for currently-employed NEOs who were not guaranteed a bonus for our fiscal 2019.
The Compensation Committee then determined the cash bonus payment, if any, to be received from the available bonus pool by an executive officer by evaluating the executive officer’s position and responsibility level within our company, as well as performing a subjective assessment of each executive officer’s actual performance as measured against eachsuch executive officer’s individual performance objectives (in the case of our other Named Executive Officers, after considering the recommendations of our CEO).objectives. Further, the Compensation Committee exercised its discretion in determining each executive officer’s bonus payment based upon the sizeachievement of the available pool.individual goals.
Based on this criteria, the following bonus payments were made to our Named Executive Officers for fiscal 2017:2019:
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Named Executive Officer | Opportunity | (as a dollar amount) | Opportunity) | fiscal 2017) | Annualized Fiscal 2019 Base Salary | Target Annual Cash Bonus Opportunity | Target Annual Cash Bonus Opportunity (as a percentage of base salary) | Actual Total Cash Bonus Payout (as a dollar amount) | Actual Cash Bonus Payment (as a percentage of base salary earned in fiscal 2019) | Actual Cash of fiscal 2019 | ||||||||||||||||||||||||||||||||||
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Alex Wong | $350,000 | $262,500 | 75.0% | $131,250 | 37.5% | 50.0% | ||||||||||||||||||||||||||||||||||||||
Richard A. Bergman | $ | 1,015,000 | $ | 439,698 | 43.3 | % | 78.5 | % | $700,000 | $1,015,000 | 145.0% | $167,475 | (2) | 23.9% | 16.5% | |||||||||||||||||||||||||||||
Kermit Nolan | $298,424 | $132,903 | 44.5% | (1) | $66,452 | 22.3% | 50.0% | |||||||||||||||||||||||||||||||||||||
Wajid Ali | $ | 296,250 | $ | 213,893 | 72.2 | % | 60.2 | % | $400,000 | $300,000 | 75.0% | $99,000 | (3) | 24.8% | 33.0% | |||||||||||||||||||||||||||||
Kevin Barber | $ | 277,500 | $ | 220,390 | 79.4 | % | 66.2 | % | ||||||||||||||||||||||||||||||||||||
Shawn Liu | $330,000 | $247,500 | 75.0% | $123,750 | 37.5% | 50.0% | ||||||||||||||||||||||||||||||||||||||
Richard Lu | $350,000 | $262,500 | 75.0% | $262,500 | (4) | 75.0% | 100.0% | |||||||||||||||||||||||||||||||||||||
John McFarland | $350,000 | $210,000 | 60.0% | $105,000 | 30.0% | 50.0% | ||||||||||||||||||||||||||||||||||||||
Huibert Verhoeven | $ | 255,000 | $ | 174,904 | 68.6 | % | 57.2 | % | $370,000 | $277,500 | 75.0% | $82,418 | (2) | 22.3% | 29.7% | |||||||||||||||||||||||||||||
Alex Wong | $ | 255,000 | $ | 165,699 | 65.0 | % | 54.2 | % |
(1) | Mr. Nolan’s bonus percentage is prorated for the corresponding periods before and after his promotion to Chief Accounting Officer of our company in February 2019. |
(2) | Messrs. Bergman and Verhoeven received a prorated portion of their target bonus opportunity in connection with their respective severance arrangements. |
(3) | Reflects the first half fiscal 2019 bonus earned and paid out to Mr. Ali prior to his departure from our company. |
(4) | Pursuant to the terms of his offer letter, Mr. Lu received a guaranteed target bonus for fiscal 2019 and a $250,000sign-on bonus, which is not included in this table. |
For fiscal 20172019 as a whole, our employees achieved an average payout level of approximately 72% of their target bonuses, while our currently-employed Named Executive Officers who were not guaranteed a bonus achieved a payout level of 66%approximately 50% of their target bonuses as a result of not fully achieving the target level for thenon-GAAP operating profit performance measure and exceeding the target level for the selected strategic goals measure. The portion of the bonus pool established by the Compensation Committee for our Named Executive Officers represented approximately 0.6% of our fiscal 2017 2019non-GAAP operating profit.
Long-Term Incentive Compensation
As a technology company that encounters significant competition for qualified personnel, long-term incentive, or LTI, compensation plays a critical role in our ability to attract, hire, motivate, and retain qualified and experienced executive officers. The use of equity compensation is necessary for us to compete for qualified executive officers without significantly increasing cash compensation and is the most important component of our executive compensation philosophy.program. We use LTI compensation in the form of equity awards to motivate our executive officers, including our Named Executive Officers, for long-term corporate performance based on the value of our common stock and thereby, further align their interests with those of our stockholders. Our LTI compensation consistsgranted in fiscal 2019 consisted of stock options, performance-based MSU and PSU awards and time-based DSU awards, the purposes for which are described below:
Type of Equity | Purpose | |
Market Stock Units (“MSUs”) | Enable our executive officers to earn shares of our common stock based on our performance relative to the S&P Semiconductor Select Industry Index, or SPSISC Index, or the Philadelphia Semiconductor Index, or SOX Index, over performance periods of up to three years. We believe that MSU awards serve as a source of motivation to our executive officers even in a down-market environment, while also providing upside potential if we outperform the SPSISC Index or SOX Index, as applicable, over the relevant performance periods. In addition, MSU awards provide a direct link between compensation and stockholder return, thereby motivating our executive officers to focus on and strive to achieve both our annual and long-term financial and strategic objectives. |
Performance Stock Units (“PSUs”) | Enable our executive officers to earn shares of our common stock based on ournon-GAAP Earnings Per Share (EPS) performance over aone-year performance period. We believe that PSU awards serve as a source of motivation to our executive officers to drive financial performance. In addition, PSU awards provide a direct link between compensation and stockholder return, thereby motivating our executive officers to focus on and strive to achieve both our annual and long-term financial and strategic objectives. | |
Deferred Stock Units (“DSUs”) | Enable our executive officers to earn shares of our common stock only when they have satisfied multi-year service-based vesting conditions, |
Fiscal 20172019 Long-Term Incentive Compensation Decisions
InFor new equity “refresh” awards approved in fiscal 2017,2019, we generally granted NEO equity compensation in a target value mix of 33% options,DSUs, 33% DSUsPSUs and 33% MSUs. The Compensation Committee determined that an LTI award consisting of a combination of stock options, DSU awards, PSU awards and MSU awards would provide our executive officers with a competitive and balanced equity compensation package, while at the same timefurther aligning their compensation with our long-term businessfinancial, operational and financial objectives.strategic objectives and promoting the creation of stockholder value.
ActualFor fiscal 2019, the fair value of the equity awards granted to our NEOs as part of our annual “refresh” program were approximately 33% in the form of a DSU award, mix33% in the form of a PSU award and 33% in the form of an MSU award. The actual grant date fair values of the awards granted to our NEOs varies from the target mix due to the accounting valuation methodology for MSUs and the grant timing of options. Options areMSUs.
The equity awards granted quarterly, resultingto our Named Executive Officers in a grant-date fair value that does not always align with the intended value mix. For fiscal 2017, the fair value of NEO refresh grants2019 were on average, approximately 29% in the form of a stock option, 31% in the form of a DSU award, and 40% in the form of an MSU award.
Below we summarize fiscal 2017 equity compensation awards.as follows:
Grant Date | Intrinsic | |||||||||||||||||||||||||||||
Named Executive Officer | Options(1) | DSUs | MSUs | Fair Value | Value(2) | DSUs | PSUs | MSUs | Grant Date Fair Value | Intrinsic Value(1) | ||||||||||||||||||||
Alex Wong | 9,566 | 9,566 | 9,566 | $1,123,498 | $602,107 | |||||||||||||||||||||||||
Richard A. Bergman | 68,025 | 28,500 | 28,500 | $ | 4,868,617 | $ | 2,613,398 | 46,561 | 46,561 | 46,561 | $5,468,450 | $2,930,661 | ||||||||||||||||||
Kermit Nolan | 22,023 | - | - | $851,673 | $641,750 | |||||||||||||||||||||||||
Wajid Ali | 20,625 | 10,900 | 10,900 | $ | 1,750,811 | $ | 956,048 | 14,784 | 14,784 | 14,784 | $1,736,336 | $930,540 | ||||||||||||||||||
Kevin Barber | 19,550 | 8,200 | 8,200 | $ | 1,400,321 | $ | 751,790 | |||||||||||||||||||||||
Shawn Liu | 10,001 | 10,001 | 10,001 | $1,174,587 | $629,487 | |||||||||||||||||||||||||
Richard Lu | 22,107 | - | 11,054 | $1,416,054 | $695,736 | |||||||||||||||||||||||||
John McFarland | 9,566 | 9,566 | 9,566 | $1,123,498 | $602,107 | |||||||||||||||||||||||||
Huibert Verhoeven | 17,200 | 7,300 | 7,300 | $ | 1,242,389 | $ | 667,692 | 10,871 | 10,871 | 10,871 | $1,276,766 | $684,247 | ||||||||||||||||||
Alex Wong | 19,550 | 8,200 | 8,200 | $ | 1,400,321 | $ | 751,790 |
Approximately one-quarter(1) Intrinsic value is based on the Company’s closing stock price on June 28, 2019 (the last trading day in fiscal 2019), which was $29.14. The MSU intrinsic value is further adjusted for performance, which was tracking to a 16% payout as of the total numberend of shares of our common stock underlying the stock option portion of each Named Executive Officer’s fiscal 2017 award was granted on each of the following dates: October 28, 2016, January 27, 2017, and April 28, 2017.2019.
The size of these LTI compensation awards were determined by the Compensation Committee based on its assessment of our financial results for fiscal 2016,2018, its evaluation of each executive officer’sNamed Executive Officer’s performance during fiscal 2016,2018, and the following additional factors: each executive officer’sNamed Executive Officer’s position within our company; an assessment of the equity award practices of the companies in our compensation peer group; and an assessment of the outstanding equity awards then-held by each executive officer.Named Executive Officer. In making its award decisions, the Compensation Committee exercised its judgment to set the size of each award at a level it considered appropriate to create a meaningful opportunity for reward predicated on the creation of long-term stockholder value.
Stock Options and DSU Awards
Once the size of the LTI compensation awards for our Named Executive Officers were determined, the Compensation Committee decided that the portion of the award to be delivered in the form of stock options would be granted quarterly in four equal installments beginning in October 2016, which is in the second quarter of fiscal 2017, through the first quarter of fiscal 2018, with an exercise price equal to the fair market value of our common stock on each grant date.
The vesting schedule for new stock option and DSU awards iswould vest as follows: for current employees, stock options and DSUs generally vest over three years, with 1/3rd of the total number of shares of our common stock subject to the stock option vesting on the first anniversary of the vesting start date, and 1/12th of the total number of shares subject to the stock option vesting each quarter until fully vested, while 1/3rd of the total number of shares of our common stock subject to the DSU award will vestvesting annually in the quarter the award was granted until fully vested; for newly hired employees, stock options and DSUs generally vest over four years, with 1/4thvested.
PSU Awards
As established by the Compensation Committee, each PSU award consists of the total number of shares subjectright to the stock option vesting on the first anniversary of the vesting start date, and 1/16th of the total number of shares subject to the stock option vesting each quarter until fully vested, while 1/4th of the totalreceive a specified number of shares of our common stock if the award’s performance conditions are satisfied.
The PSUs granted to our executive officers have a specificone-year performance period, where performance is measured based on the achievement of a specified level ofnon-GAAP earnings per share. The earned PSUs shall vest in three equal tranches over threeone-year service periods with the final service period ending approximately three years from the grant date. The potential payout ranges from 0% to 200% of the target number of shares subject to the DSU award and is determined on a linear basis with a payout triggering if ournon-GAAP earnings per share is equal to or greater than 65% of the target with a maximum payout achieved at 135% of target. PSUs earned in fiscal 2019 by our executive officers were based on our performance in fiscal 2019.
Delivery of shares earned, if any, will vest annuallytake place on the dates provided in the quarterapplicable PSU grant agreement, assuming the executive officer is still an employee of our company at the end of the applicable service period. On the delivery date, we withhold shares to cover statutory tax withholding requirements and deliver a net quantity of shares to the executive officer after such withholding. Until delivery of shares, the executive officer has no rights as a stockholder with respect to any shares underlying the PSU award.
In limited circumstances, including in the event of a change of control of our company and termination of employment of an executive officer, acceleration of vesting may occur; such acceleration, if any, will occur pursuant to the equity agreement underlying such award and anythen-in-effect Change of Control policy covering such executive officer.
PSUs earned in fiscal 2019 were based on achievement of anon-GAAP earnings per share target of $4.95 for the fiscal 2019one-year performance period. Our actualnon-GAAP earnings per share for fiscal 2019 was $4.00, which resulted in a negative performance adjustment of 55%. Accordingly, our NEOs will receive 45% of their target PSUs for fiscal 2019 if employed through the end of the required service periods.
The below chart represents the PSUs earned as a percentage of target in fiscal 2018 and 2019. No PSUs were granted until fully vested.in fiscal 2017.
MSU Awards
As established by the Compensation Committee, each MSU award granted to our executive officers consists of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such MSU awards will be earned, if at all, based on our total shareholderstockholder return, or TSR, compared to that of the S&P Semiconductor Select Industry Index, or SPSISC Index TSR, for awards granted to our executive officers beginning in fiscal 2018, and compared to that of the Philadelphia Semiconductor Index TSR, or the SOX Index TSR, for awards granted to our executive officers prior to fiscal 2018, over aone-year, atwo-year, and a three-year performance period. In other words, the actual number of shares of our common stock that may be earned under the MSU awards will vary based on over- or under-performance of our TSR compared to that of the SOXSPSISC Index TSR or SOX
Index TSR, as applicable, over the specified performance periods. Pursuant to the terms of the fiscal 20172019 MSU awards granted on October 28, 2016:November 13, 2018:
● | The target number of shares of our common stock subject to each MSU award will be earned if our TSR equals that of the SPSISC Index TSR as measured over theone-year, thetwo-year, and the three-year performance periods (as determined on September 30, 2019, September 30, 2020, and September 30, 2021). |
● | Payouts are scaled such that below-target performance will result in a reduction in the number of shares of our common stock earned using atwo-to-one ratio, while above-target performance will result in a payout of 100% of the target number of shares of our common stock for theone-year andtwo-year performance periods with any additional payout deferred until delivery of shares based on the performance of the three-year performance period, where an increase in the number of shares of our common stock earned using atwo-to-one ratio for the three-year performance period less any shares that were delivered for theone-year andtwo-year performance periods (subject to a cap of 200% of the target number of shares of our common stock subject to the MSU awards if our TSR is 50 percentage points or more above the SPSISC Index TSR, as applicable) will be delivered to the executive officer. Our MSU awards are long-term awards with partial payouts based on performance for each of the initial performance periods with a performancetrue-up based on the performance of the final performance period. |
● | One-third of the target award is tied to each performance period(one-year,two-year and three-year periods). For theone-year andtwo-year measurement periods, executive officers can only earn up to target for the portion of the award tied to each performance period. All above-target payouts for the award are tied to the full three-year performance period and require that the executive officer remains employed through the end of the three-year period. |
Any shares of our common stock earned under an MSU award will vest and be delivered to an executive officer within 30 days of the end of theone-year,two-year, and three-year performance periods. In limited circumstances, including in the event of a change of control of our company and termination of employment of an executive officer, an acceleration of vesting may occur; such acceleration, if any, will occur pursuant to the equity agreement underlying such equity and anythen-in-effect Change of Control policy covering such executive officer.
In fiscal 2019, our NEOs received the following payouts in connection with their MSUs:
o | Fiscal 2016 MSUs granted to our NEOs were paid out at 0% for the third performance period; |
o | Fiscal 2017 MSUs granted to our NEOs were paid out at 0% for the second performance period; and |
o | Fiscal 2018 MSUs granted to our NEOs were paid out at 100% for the first performance period. |
As of our record date, the outstanding MSU awards held by our NEOs are currently tracking to pay out against their target as follows:follows, and as represented in the below chart:
o | Fiscal 2017 MSUs granted to our NEOs (with payouts through fiscal 2020) are tracking to a 0% payout for the third performance period; |
o | Fiscal 2018 MSUs granted to our NEOs (with payouts through fiscal 2021) are tracking to a 16% payout for the second performance period; and |
o | Fiscal 2019 MSUs granted to our NEOs (with payouts through fiscal 2022) are tracking to a 17% payout for the first performance period. |
The below chart represents MSUs earned or expected to be earned by our NEOs for MSUs granted to our NEOs (with payouts throughin fiscal 2018) are tracking to a 0% payout for the third performance period;
Fiscal 2018 Equity Mix for Chief Executive Officer and Chief Financial Officer
On a go-forward basis, the Compensation Committee has adjusted the equity mix for the CEO and CFO to 67% performance-based equity and 33% time-based equity. The shift to a larger percentage of performance-based equity is intended to illustrate the Compensation Committee’s commitment to performance-based compensation and alignment with shareholder value creation.
Stock Ownership Guidelines and Hedging Prohibition
We maintain stock ownership guidelines that require our CEO to own shares of our common stock with a value equal to at least three times his annual base salary. Our CEO had five years from fiscal 2012 to achieve this required ownership level and has met this ownership guideline. We believe that these guidelines further promote the alignment of the long-term interests of our CEO with our stockholders. We also believe that these guidelines help mitigateOur CEO has five years from the risks associated with our executive compensation program.date of his appointment to achieve the required ownership levels. In addition, our Insider Trading Policy prohibits our executive officers, and any family member residing in the same household, from engaging in derivatives trading and hedging involving our securities without the prior approval of our Chief Financial Officer and our General Counsel.
Compensation Recovery Policy
Our 2010 Incentive Compensation Plan and our 2019 Equity and Incentive Compensation Plan, approved by our Board of Directors on July 30, 2019 and included as Proposal Four to this Proxy Statement, each contain a clawback provision that applies to all awards held by the company’s executive officers (as defined by the Securities Exchange Act of 1934). Pursuant to both the 2010 Incentive Compensation Plan and our 2019 Equity and Incentive Compensation Plan, all awards (cash and equity) held by an executive officer will be subject to clawback, recoupment or forfeiture, (i) to the extent that such executive officer is determined to have engaged in fraud or intentional illegal conduct that caused the company’s materialnon-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such award would have been lower had it been calculated on the basis of such restated results, or (ii) as required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable law, will occur through the cancellation of the excess awards and, in the case of equity awards, the recoupment of any gains realized with respect to the excess awards. Our executive officers may not claim the operation of the clawback as the basis for a “good reason” to resign and receive severance payments and benefits.
Equity Award Grant Policy
Our Board of Directors or the Compensation Committee, as applicable, approves equity awards at its regularly scheduled meetings each year. Generally, in the case of equity awards granted to newly hired executive officers, we set the price of such awards at the closing market price of our common stock as reported on the NASDAQ Global Select Market on
the date such grant is approved by our Board of Directors, the Compensation Committee or their delegate. Generally, in the case of a DSU award granted to our existing executive officers, we provide for effective dates on the first business day after the applicable quarterly financial earnings release. In the case of a stock option granted to our existing executive officers, the price of such awards is equal to the fair market value of our common stock as reported on the NASDAQ Global Select Market on each grant date, which is generally the first business day after the applicable quarterly financial earnings release. In the case of MSU and PSU awards granted to our existing executive officers, we provide for an effective date at the October Compensation Committee meeting. For more information on our MSU and PSU awards, refer to the “Long-Term Incentive Compensation” section in this Compensation Discussion and Analysis.
Employment Arrangements
While we do not have employment agreements with any of our executive officers, the initial terms and conditions of employment for each of our Named Executive Officers have been set forth in a written employment offer letter. Each of these arrangements was approved on our behalf by the Compensation Committee or, in certain instances, by our Board of Directors.
In filling our executive positions, our Board of Directors or the Compensation Committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our Board of Directors and the Compensation Committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations.
Each of these employment offer letters provides for “at will” employment and sets forth the initial compensation arrangements for the executive officer, including an initial base salary, an annual performance-based cash bonus opportunity, and a recommendation for a stock-based compensation award in the form of either an option to purchase shares of our common stock and DSU awards that wasfor executives hired prior to fiscal 2018, or in the form of DSU, PSU and/or MSU awards for executives hired in fiscal 2018 and subsequent years. Such stock-based compensation award is submitted to our Compensation Committee for approval.
Perquisites and Other Personal Benefits
We do not view perquisites or other personal benefits as a significant component of our executive compensation program. From time to time, we may provide perquisites or other personal benefits in limited circumstances, such as when we believe it is appropriate to assist an individual executive officer in the performance of the executive officer’s duties, to make our executive officers more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by the Compensation Committee.
Nonqualified Deferred Compensation
We do not provide any nonqualified deferred compensation arrangements for any of our employees.
Retirement and Other Benefits
We have established a Section 401(k) retirement savings plan for our executive officers, including our Named Executive Officers, on the same basis as for all of our other employees who satisfy certain eligibility requirements. Under this plan, participants may elect to makepre-tax contributions of up to 30% of their current compensation, not to exceed the applicable statutory income tax limitation. Currently, we match 25% of the contributions made by participants in the plan, up to a maximum of $4,500$4,750 per participant on abeginning with calendar year basis.2019. We intend for the plan to qualify under Section 401(a) of the Internal Revenue Code, or the Code, so that contributions by participants or by us to the plan, and income earned on plan contributions, are not taxable to participants until withdrawn from the plan.
Additional benefits received by our executive officers, including our Named Executive Officers, include medical, dental, vision, life, and disability insurance benefits and participation in our employee stock purchase plan. These benefits are provided to our executive officers on the same basis as to all of our regular full-time employees.
Severance Policy
In October 2011, our Board of Directors adopted the amended Severance Policy for Principal Executive Officers, or the Severance Policy, which was further amended and approved by the Compensation Committee on October 30, 2017 and on June 28, 2019. The Severance Policy applies to certain executive officers designated by our Board of Directors who have generally completed at least one full yearDirectors. All of employment with our company. Messrs. Bergman and Ali are currently the only Named Executive Officers are covered by the Severance Policy. Under the Severance Policy, we will pay a pro rata amount of (i) 100% of the base salary in the case of our CEO over a period of one year and 50% of the base salary in the case of our other designated executive officers over a period of six months; (ii) 100% of the target bonus in the case of our CEO, andthe greater of 50% of base salarythe target bonus or a pro rata amount of the target bonus in the case of our Chief Financial Officer, and a pro rata amount of the target bonus in the case of our other designated executive officers, in each case for the fiscal year
during which a termination occurs, and (iii) pay the COBRA premium for coverage under our medical plan for the designated executive officer and the executive officer’s dependents following a termination of employment by us without “good cause” or by the executive officer for “good reason,” each as defined in the Severance Policy, for one year in the case of our CEO and six months in the case of our other designated executive officers. All outstanding and unvested stock options and DSU awardsequity incentives held by our CEO or our other designated executive officers will cease to vest on such executive officer’s date of employment termination, and such executive officer’s outstanding and vested stock option awards will be exercisable for 90 days after such executive officer’s date of employment termination, but not beyond their original term. The foregoing payments and benefits are contingent upon the designated executive officer resigning from all directorships held by that executive at our company or any of our subsidiaries and affiliates and executing and not revoking a release of all claims that he or she may have against us. The Severance Policy will terminate upon a “change of control” of our company as defined in the Severance Policy.
Change of Control Severance Policy
In July 2014, we enacted a Change of Control Severance Policy for Principal Executive Officers, or the CoC Severance Policy, which was further amended and approved by the Compensation Committee on October 30, 2017 and June 28, 2019. The CoC Severance Policy applies to certain executive officers who have been designated by our Board of Directors who have generally completed at least one full year of employment with our company.Directors. All of our Named Executive Officers are covered by the CoC Severance Policy. The CoC Severance Policy replaced individual Change of Control Severance Agreements entered into with our CEO and several of our executive officers. The CoC Severance Policy wasis designed by the Compensation Committee to meet current market expectations and was modeled after the practices of the companies in our then-current compensation peer group. The CoC Severance Policy provides for specified payments and benefits only upon a qualifying termination of employment following a “change of control” of our company as defined in the policy (a “double trigger” arrangement), meaning that both a change of control of our company and a termination of employment must occur before the designated executive officer is eligible to receive any payments or benefits.
The CoC Severance Policy provides that, in the event of a termination of employment by our company without “good cause” or by the designated executive officer with “good reason,” each as defined in the policy, within three months prior to a change of control or 18 months following a change of control of our company, such designated executive officer will be eligible to receive the following:
● | An amount equal to 200% of base salary and target annual cash bonus in the case of our CEO, and 150% of base salary and target annual cash bonus for the other designated executive officers, in each case for the fiscal year in which such termination of employment occurs; |
● | Continuation of health insurance coverage for the designated executive officer and the executive officer’s dependents for a period of 18 months; and |
● | Continuation of life insurance coverage for the designated executive officer for a period of 18 months. |
The foregoing payments and benefits are contingent upon the designated executive officer resigning from all directorships held by that executive at our company or any of our subsidiaries and affiliates and executing and not revoking a release of all claims that he or she may have against us.
The CoC Severance Policy also provides that, in the event of a change of control of our company, all outstanding and unvested stock options and DSU awardsequity incentives (but not including any outstanding MSU awards) will immediately vest in full if the employment of the designated executive officer is terminated by our company without “good cause” or by the designated executive officer with “good reason.reason,” Suchwithin three months prior to a change of control or 18 months following a change of control of our company, each as defined in the policy. Any outstanding stock options will be exercisable for 90 days after such executive officer’s date of employment termination, but not beyond their original term.
All outstanding and unearned MSU awards will continue to be earned in accordance with the terms of the MSU grant agreement.
We implemented the CoC Severance Policy to mitigate a potential disincentive for these executive officers when they are evaluating a potential acquisition of our company, particularly when their services may not be required by the acquiring entity. The CoC Severance Policy has been drafteddesigned to provide each of our executive officers, including the Named Executive Officers, with consistent treatment and to avoid the inadvertent incurrence of an excise tax under Section 409A of the Code.
Executive Retention Program
On May 6, 2019, the Executive Committee instituted a retention program applicable to certain of Synaptics’ executive officers (the “Retention Program”). The Retention Program applies to certain executive officers who have been designated by our Board of Directors. All of our currently-employed Named Executive Officers are covered by the Retention Program.
The retention program provides that the participating executive officers will receivelump-sum cash award payments (determined in each case by the Executive Committee) in November 2020 (a “Retention Award”) should they remain as full-time active employees of Synaptics in good standing for 18 consecutive calendar months starting May 1, 2019 (the “Retention Period”). Certain voluntary and unpaid leaves will result in a termination of the applicable Retention Award. No Retention Award will be paid to any executive who resigns without “good reason” or who is terminated for “good cause” (each as defined in the Severance Policy) prior to the end of the Retention Period. If a participating executive’s employment is terminated without “good cause”, or if such executive resigns for “good reason” prior to the end of the Retention Period, such executive will receive(i) two-thirds of his or her eligible Retention Award if the termination occurs during the first twelve months of the Retention Period, and (ii) a portion of such executive’s eligible Retention Award prorated for the actual number of consecutive full calendar months completed as a full-time employee of Synaptics if the termination occurs between the twelfth and eighteenth month of the Retention Period, provided that such executive resigns from all Synaptics and Synaptics’ affiliate director and officer positions and executes a separation agreement and release in a form acceptable to Synaptics.
We implemented the Retention Program to encourage each participant’s continued commitment to the support and management of the operations of the company during the transition to new executive leadership.
Except as described herein or under “Potential Payments Upon Termination or Change of Control” below, we do not offer our executive officers, including our Named Executive Officers, any other severance payments or benefits upon their termination of employment with our company, whether or not in connection with a change of control of our company.
Tax and Accounting Considerations
Deductibility of Executive Compensation
We take into account the tax effects of executive compensation on us and our executive officers. Currently, Section 162(m) of the Code (“Section 162(m)”) limits the deductibility, for federal income tax purposes, of remuneration in excess of $1 million paid to eachcertain executives of any publicly held corporation’s chief executive officer and its three other most highly compensated executive officers (excluding the chief financial officer)corporation in any taxable year. Thus, we mayare able to deduct certain types of remuneration paid to any of these individuals only to the extent that such remuneration during any taxable year does not exceed $1 million. Generally,Historically, remuneration in excess of $1 million may onlycould be deducted if it isqualified as “performance-based compensation” within the meaning of Section 162(m) or satisfiessatisfied the condition of another exemption from the deductibility limit. In this regard,This performance-based exception has been repealed, effective for taxable years beginning after December 31, 2017. However, certain arrangements in place as of November 2, 2017 may be eligible for transition relief under the Code.
While the Compensation Committee is mindful of the benefit of being able to fully deduct the compensation income realized uponpaid to our Named Executive Officers, it believes that we should retain the exercise of stock options granted under a stockholder-approved stock option plan generally will be deductible as long as the stock options are granted by a committee whose members are non-employee directors and certain other conditions are satisfied.
The Compensation Committee may, butflexibility to provide compensation to our Named Executive Officers that is not requiredfully tax deductible when it believes that such payments are appropriate to structure our compensation programs to qualify as “performance-based compensation” withinattract and retain executive talent or meet other business objectives. Thus, the meaning of Section 162(m). The Compensation Committee may, in its judgment, authorize compensation payments that doare not comply with an exemption fromdeductible by reason of the deductibility limitapplication of 162(m) when it believes that such payments are appropriate to attract and retain executive talent and isare in our best interests and the best interests of our stockholders.
Taxation of “Parachute” Payments
Sections 280G and 4999 of the Code provide that executive officers and directors, who hold significant equity interests, and certain other service providers may be subject to significant additional taxes if they receive payments or benefits that exceed certain prescribed limits in connection with a change of control of a company, and that the company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any executive officer, including any Named Executive Officer, with a “gross-up”“gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G and 4999 of the Code during fiscal 2017,2019, and we have not agreed and are not otherwise obligated to provide any executive officer with such a “gross-up”“gross-up” or other reimbursement.
Accounting for Stock-Based Compensation
We account for stock-based compensation arrangements in accordance with the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718 “Compensation – Stock Compensation,” or ASC Topic 718. ASC Topic 718 requires companies to measure the compensation expense for all stock-based payment awards made to employees and directors, including stock options, PSU, DSU and MSU awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though
our Named Executive Officers may never realize any value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that an employee or director is required to render service in exchange for the stock option or other award. In determining stock-based compensation, the Compensation Committee considers the potential expense of these awards under ASC Topic 718 and other accounting implications such awards may have on us.
Compensation Recovery Policy
On October 12, 2016, our Board of Directors approved an amendment and restatement of the Company’s 2010 Incentive Compensation Plan, which now contains a clawback provision that applies to all awards held by the Company’s executive officers (as defined by the Securities Exchange Act of 1934). All awards (cash and equity) held by an executive officer will be subject to clawback, recoupment or forfeiture, (i) to the extent that such executive officer is determined to have engaged in fraud or intentional illegal conduct that caused the Company’s material non-compliance with any applicable financial reporting requirements and resulted in a financial restatement, the result of which is that the amount received from such award would have been lower had it been calculated on the basis of such restated results, or (ii) as required by applicable laws, rules, regulations or listing requirements. Such clawback, recoupment or forfeiture, in addition to any other remedies available under applicable law, will occur through the cancellation of the excess awards and the recoupment of any gains realized with respect to the excess awards. The executive officers may not claim the operation of the clawback as the basis for “good reason” to resign and receive severance benefits.
The Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” included in this Proxy Statement and, based on such review and discussion, the Compensation Committee recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement.
Respectfully submitted, | ||
Keith B. Geeslin, Chairman | ||
Kiva A. Allgood | ||
Francis F. Lee | ||
Richard L. Sanquini | ||
James L. Whims |
Fiscal 2019 Summary Compensation Table
The following table sets forth information regarding compensation for services in all capacities to us and our subsidiaries received by our Named Executive Officers for the fiscal years 2017, 2016,2019, 2018, and 2015.2017.
Name and Principal Position(1) | Fiscal Year | Bonus ($) | Salary ($ )(2) | Stock ($)(3) | Option ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | All Other Comp ($)(6) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Alex Wong | 2019 | - | $348,333 | $1,123,498 | - | $131,250 | $8,314 | $1,611,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal Executive Officer and Senior | 2018 | - | $340,000 | $1,426,903 | $92,911 | $117,734 | $24,240 | $2,001,788 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vice President of Worldwide | 2017 | - | $306,000 | $984,656 | $415,665 | $165,699 | $4,500 | $1,876,520 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rick Bergman | 2019 | - | $495,833 | $5,468,450 | - | $167,475 | $761,374 | (7) | $6,893,132 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer & President | 2018 | - | $700,000 | $5,597,768 | $323,383 | $345,303 | $45,568 | $7,012,022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | 2017 | - | $560,000 | $3,422,280 | $1,446,337 | $439,698 | $3,942 | $5,872,257 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Salary | Awards | Awards | Compensation | Comp | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Principal Position | Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rick Bergman | 2017 | $ | 560,000 | $ | 3,422,280 | $ | 1,446,337 | $ | 439,698 | $ | 3,942 | $ | 5,872,257 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Executive Officer & President | 2016 | $ | 700,000 | $ | 4,536,630 | $ | 1,746,138 | $ | 812,000 | $ | 4,500 | $ | 7,799,268 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Kermit Nolan | 2019 | - | $298,096 | $851,673 | - | $66,452 | $8,335 | $1,224,556 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Chief Accounting Officer & | 2018 | - | $279,333 | $417,869 | - | $51,554 | $7,212 | $755,968 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interim Chief Financial Officer | 2017 | - | $234,000 | $657,251 | $21,669 | $115,088 | $6,332 | $1,034,340 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | $ | 700,000 | $ | 1,834,848 | $ | 2,233,911 | $ | 805,000 | $ | 4,500 | $ | 5,578,259 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Wajid Ali | 2017 | $ | 355,500 | $ | 1,308,872 | $ | 441,939 | $ | 213,893 | $ | 0 | $ | 2,320,204 | 2019 | - | $241,591 | $1,736,336 | - | $99,000 | $506 | $2,077,433 | |||||||||||||||||||||||||||||||||||||||||||
Senior Vice President and Chief | 2016 | $ | 395,000 | $ | 1,001,246 | — | $ | 267,217 | $ | 137,379 | (6) | $ | 1,800,842 | 2018 | - | $395,000 | $2,140,355 | $124,031 | $143,978 | $21,028 | $2,824,392 | |||||||||||||||||||||||||||||||||||||||||||
Financial Officer | 2015 | $ | 56,856 | $ | 1,329,900 | $ | 1,218,544 | — | $ | 350,000 | (6) | $ | 2,955,300 | 2017 | - | $355,500 | $1,308,872 | $441,939 | $213,893 | - | $2,320,204 | |||||||||||||||||||||||||||||||||||||||||||
Kevin D. Barber | 2017 | $ | 333,000 | $ | 984,656 | $ | 415,665 | $ | 220,390 | $ | 4,163 | $ | 1,957,874 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shawn Liu | 2019 | - | $323,333 | $1,174,587 | - | $123,750 | $7,447 | $1,629,117 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President & General | 2018 | - | $286,226 | $766,677 | - | $47,850 | $17,480 | $1,118,233 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Manager, PC Division | 2017 | - | $266,939 | $455,039 | $14,549 | - | $4,531 | $741,058 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard Lu | 2019 | $512,500 | (8) | $204,167 | $1,416,054 | - | - | $2,498 | $1,622,719 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President & General | 2016 | $ | 368,333 | $ | 1,296,180 | $ | 479,225 | $ | 204,795 | $ | 4,069 | $ | 2,352,602 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Manager, Mobile Division | 2015 | $ | 360,000 | $ | 445,416 | $ | 572,096 | $ | 219,024 | $ | 3,600 | $ | 1,600,136 | |||||||||||||||||||||||||||||||||||||||||||||||||||
John McFarland | 2019 | - | $348,333 | $1,123,498 | - | $105,000 | $2,113 | $1,578,944 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President, General | 2018 | - | $338,333 | $1,152,471 | $64,496 | $67,320 | $21,205 | $1,643,825 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Counsel & Secretary | 2017 | - | $297,000 | $684,456 | $286,045 | $65,340 | $1,985 | $1,334,826 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Huibert Verhoeven | 2017 | $ | 306,000 | $ | 876,584 | $ | 365,805 | $ | 174,904 | $ | 5,745 | $ | 1,729,038 | 2019 | - | $296,591 | $1,276,766 | - | $82,418 | $148,063 | (7) | $1,803,838 | ||||||||||||||||||||||||||||||||||||||||||
Senior Vice President & General | 2016 | $ | 338,333 | $ | 1,101,753 | $ | 295,059 | $ | 198,645 | $ | 4,575 | $ | 1,938,365 | 2018 | - | $348,333 | $1,481,766 | $82,537 | $127,575 | $24,948 | $2,065,159 | |||||||||||||||||||||||||||||||||||||||||||
Manager, Internet of Things Division | 2015 | $ | 276,798 | $ | 592,047 | $ | 541,652 | $ | 170,519 | $ | 3,628 | $ | 1,584,644 | 2017 | - | $306,000 | $876,584 | $365,805 | $174,904 | $5,745 | $1,729,038 | |||||||||||||||||||||||||||||||||||||||||||
Alex Wong | 2017 | $ | 306,000 | $ | 984,656 | $ | 415,665 | $ | 165,699 | $ | 4,500 | $ | 1,876,520 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Vice President of Worldwide | 2016 | $ | 338,333 | $ | 1,296,180 | $ | 443,156 | $ | 261,375 | $ | 4,500 | $ | 2,343,544 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Operations | 2015 | $ | 330,000 | $ | 325,752 | $ | 424,995 | $ | 245,388 | $ | 4,500 | $ | 1,330,635 |
(1) | All positions reflected in this table represent the individual executive’s position with the company as of the end of our fiscal year 2019, or in the case of Messrs. Bergman, Ali and Verhoeven, their position with the company as of the day immediately preceding their departure from the company. |
(2) | The base salaries set forth in this column reflect salary increases or decreases, if applicable, for each of our Named Executive Officers effective as of the first day of |
The amounts set forth in this column represent the grant date fair value of PSU, MSU and DSU awards determined in accordance with ASC Topic 718, excluding the effects of forfeitures. We determine the grant date fair value of each DSU and PSU award using the closing price of our common stock on the date of grant. We determine the grant date fair value of each MSU award using the Monte Carlo simulation model. The assumptions used in determining the grant date fair value of MSU awards are set forth in Note 10 to our consolidated financial statements included in our Annual Report on Form10-K filed with the SEC for the fiscal year ended June |
Verhoeven were cancelled as of the date of their termination. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s PSU, MSU and DSU awards if the officer’s service to our company is terminated, |
The amounts set forth in this column reflect the grant date fair value of stock option awards made in fiscal years 2017 and 2018 and were determined in accordance with ASC Topic 718, excluding the effects of forfeitures. The assumptions used in determining the grant date fair value of stock option awards are set forth in Note |
The amounts set forth in this column constitute amounts earned under our fiscal |
Except as otherwise indicated, the amounts set forth in this column consist of matching contributions to our company’s Section 401(k) plan or the employee’s health savings |
In connection with their departure from the company, Messrs. Bergman and Verhoeven received $757,542 and $142,957, respectively, in severance payments in fiscal 2019. |
(8) | In connection with his acceptance of our |
Fiscal 20172019 Grants of Plan-Based Awards Table
The following table sets forth certain information with respect to grants of plan-based awards to our Named Executive Officers for the fiscal year ended June 24, 2017.29, 2019.
All Other | All Other | All Other Stock Awards: Number of Shares of Stock or Units (#)(5) | Grant Date Fair Value of Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | Awards: | Awards: | Exercise | Grant Date | Estimated Future Payouts | Estimated Future Payouts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Under Non-Equity | Under Equity | Number of | Number of | or Base | Fair Value | Under Non-Equity | Under Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive Plan Awards(2) | Incentive Plan Awards(3) | Shares of | Securities | Price of | of Stock | Incentive Plan Awards(2) | Incentive Plan Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Committee | Stock or | Underlying | Option | and Option |
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Approval | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards | Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Date(1) | ($) | ($) | ($) | ($) | ($) | ($) | (#)(4) | (#)(5) | ($/Sh) | ($)(6) | Grant Date | Approval Date(1) | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard A. Bergman | — | $ | 1,015,000 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Alex Wong | - | $262,500 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/29/2016 | 10/19/2015 | — | — | — | — | — | — | — | 14,250 | $ | 51.95 | $ | 294,080 | 11/13/2018 | 11/13/2018 | - | - | - | - | 9,566 | 19,132 | (3) | - | $446,608 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | — | 17,925 | $ | 52.57 | $ | 370,660 | 11/13/2018 | 11/13/2018 | - | - | - | - | 9,566 | 19,132 | (4) | - | $338,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 28,500 | 57,000 | — | — | — | $ | 1,924,035 | 11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 9,566 | $338,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard A. | - | $1,015,000 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bergman | 11/13/2018 | 11/13/2018 | - | - | - | - | 46,561 | 93,122 | (3) | - | $2,173,794 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11/13/2018 | 11/13/2018 | - | - | - | - | 46,561 | 93,122 | (4) | - | $1,647,328 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 46,561 | $1,647,328 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kermit Nolan | - | $132,903 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 28,500 | — | — | $ | 1,498,245 | 11/14/2018 | 11/13/2018 | - | - | - | - | - | - | 9,523 | $340,923 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/27/2017 | 10/25/2016 | — | — | — | — | — | — | — | 17,925 | $ | 54.36 | $ | 397,241 | 2/7/2019 | 2/5/2019 | - | - | - | - | - | - | 12,500 | $510,750 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/28/2017 | 10/25/2016 | — | — | — | — | — | — | — | 17,925 | $ | 54.77 | $ | 384,356 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Wajid Ali | — | $ | 296,250 | — | — | — | — | — | — | — | — | - | $300,000 | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | — | 6,875 | $ | 52.57 | $ | 142,164 | 11/13/2018 | 11/13/2018 | - | - | - | - | 14,784 | 29,568 | (3) | - | $690,220 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 10,900 | 21,800 | — | — | — | $ | 735,859 | 11/13/2018 | 11/13/2018 | - | - | - | - | 14,784 | 29,568 | (4) | - | $523,058 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 10,900 | — | — | $ | 573,013 | 11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 14,784 | $523,058 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/27/2017 | 10/25/2016 | — | — | — | — | — | — | — | 6,875 | $ | 54.36 | $ | 152,359 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/28/2017 | 10/25/2016 | — | — | — | — | — | — | — | 6,875 | $ | 54.77 | $ | 147,416 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kevin D. Barber | — | $ | 277,500 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shawn Liu | - | $247,500 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/29/2016 | 10/19/2015 | — | — | — | — | — | — | — | 4,100 | $ | 51.95 | $ | 84,612 | 11/13/2018 | 11/13/2018 | - | - | - | - | 10,001 | 20,002 | (3) | - | $466,917 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 52.57 | $ | 106,494 | 11/13/2018 | 11/13/2018 | - | - | - | - | 10,001 | 20,002 | (4) | - | $353,835 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | 8,200 | — | — | $ | 431,074 | 11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 10,001 | $353,835 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 8,200 | 16,400 | — | — | — | $ | 553,582 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard Lu | - | $262,500 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/27/2017 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 54.36 | $ | 114,131 | 12/3/2018 | 12/3/2018 | - | - | - | - | 11,054 | 22,108 | (3) | - | $516,078 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/28/2017 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 54.77 | $ | 110,428 | 12/3/2018 | 12/3/2018 | - | - | - | - | - | - | 22,107 | $899,976 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Huibert Verhoeven | — | $ | 255,000 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John McFarland | - | $210,000 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/29/2016 | 10/19/2015 | — | — | — | — | — | — | — | 3,475 | $ | 51.95 | $ | 71,714 | 11/13/2018 | 11/13/2018 | - | - | - | - | 9,566 | 19,132 | (3) | - | $446,608 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | — | 4,575 | $ | 52.57 | $ | 94,604 | 11/13/2018 | 11/13/2018 | - | - | - | - | 9,566 | 19,132 | (4) | - | $338,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | 7,300 | — | — | $ | 383,761 | 11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 9,566 | $338,445 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 7,300 | 14,600 | — | — | — | $ | 492,823 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Huibert | - | $277,500 | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Verhoeven | 11/13/2018 | 11/13/2018 | - | - | - | - | 10,871 | 21,742 | (3) | - | $507,534 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/27/2017 | 10/25/2016 | — | — | — | — | — | — | — | 4,575 | $ | 54.36 | $ | 101,388 | 11/13/2018 | 11/13/2018 | - | - | - | - | 10,871 | 21,742 | (4) | - | $384,616 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/28/2017 | 10/25/2016 | — | — | — | — | — | — | — | 4,575 | $ | 54.77 | $ | 98,099 | 11/13/2018 | 11/13/2018 | - | - | - | - | - | - | 10,871 | $384,616 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alex Wong | — | $ | 255,000 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7/29/2016 | 10/19/2015 | — | — | — | — | — | — | — | 4,100 | $ | 51.95 | $ | 84,612 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 52.57 | $ | 106,494 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | — | — | 8,200 | — | — | $ | 431,074 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10/28/2016 | 10/25/2016 | — | — | — | — | 8,200 | 16,400 | — | — | — | $ | 553,582 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1/27/2017 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 54.36 | $ | 114,131 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4/28/2017 | 10/25/2016 | — | — | — | — | — | — | — | 5,150 | $ | 54.77 | $ | 110,428 |
(1) | The “Committee Approval Date” refers to the date on which the Compensation Committee or the Board of Directors approved the award. See “Compensation Discussion and Analysis – Equity Award Grant Policy.” |
(2) | Our fiscal |
(3) | These MSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan. Each MSU award consists of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such MSU awards will be earned, if at all, based on our TSR compared to that of the |
(4) | These PSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan. Each PSU award is designed to vest in three tranches with the target quantity for each tranche equal toone-third of the total PSU grant. The PSU awards have a specificone-year performance period and vesting occurs over three annual service periods. Performance is measured based on the achievement of a specified level ofnon-GAAP earnings per share. The potential payout ranges from 0% to 200% of the grant target quantity and is adjusted on a linear basis with a payout triggering if ournon-GAAP earnings per share equals greater than 65% of the target with a maximum payout achieved at 135% of target. Delivery of shares earned, if any, will take place on the dates provided in the applicable PSU grant agreement, assuming the grantee is still an employee of our company at the end of the applicable service period. Notwithstanding the foregoing, the vesting of any PSU award will accelerate if the executive officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company. Notwithstanding the foregoing, if the executive officer is terminated by us without good cause or by the executive officer with good reason during the3-month period before or18-month period following a change of control of our company, (i) the performance condition of the PSU is deemed satisfied upon the change of control, and (ii) the service condition is deemed fulfilled, and the target number of PSUs will be delivered, upon the later of termination or the change of control. |
(5) | These DSU awards were granted under our Amended and Restated 2010 Incentive Compensation Plan and will vest as follows: 1/3rd of the total number of shares of common stock subject to the award vest in the calendar quarter one year from the vesting start date and each year thereafter until the award is fully vested. Each Named Executive Officer forfeits the unvested portion, if any, of the executive officer’s DSU award if the executive officer’s service to our company is terminated for any reason except as may otherwise be determined by the plan committee approved by our Board of Directors, as the administrator of our Amended and Restated 2010 Incentive Compensation Plan. Notwithstanding the foregoing, the vesting of any DSU award will accelerate if the executive officer is terminated by us without good cause or by him or her with good reason during the18-month period following a change of control of our company. |
(6) | The amounts set forth in this column represent the grant date fair value for |
Fiscal 2019 Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth information with respect to outstanding equity-based awards held by our Named Executive Officers as of June 24, 2017.29, 2019.
Option Awards(1) | Stock Awards(2) | |||||||||||||||||||||||||||||||||||||||
Equity | Equity Incentive | |||||||||||||||||||||||||||||||||||||||
Incentive | Equity Incentive | Plan Awards: | ||||||||||||||||||||||||||||||||||||||
Plan Awards: | Market | Plan Awards: | Market or | |||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value of | Number of | Payout Value of | ||||||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares or | Shares or | Undearned | Undearned | ||||||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Units of | Units of | Shares, Units or | Shares, Units or | ||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Stock That | Stock That | Other Rights | Other Rights | |||||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | Have Not | Have Not | That Have Not | That Have Not | ||||||||||||||||||||||||||||||||
Grant | (#) | (#) | Options | Price | Expiration | Vested | Vested | Vested | Vested | |||||||||||||||||||||||||||||||
Name | Date | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||||||
(a) |
| (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||||||
Richard A. Bergman | 09/28/11 | (3) | 57,500 | — | — | $ | 23.25 | 09/28/18 | — | — | — | — | ||||||||||||||||||||||||||||
10/31/12 | (4) | 18,750 | — | — | $ | 23.16 | 10/31/19 | — | — | — | — | |||||||||||||||||||||||||||||
01/28/13 | (4) | 18,750 | — | — | $ | 35.76 | 01/28/20 | — | — | — | — | |||||||||||||||||||||||||||||
04/29/13 | (4) | 18,750 | — | — | $ | 42.57 | 04/29/20 | — | — | — | — | |||||||||||||||||||||||||||||
08/05/13 | (4) | 18,750 | — | — | $ | 39.80 | 08/05/20 | — | — | — | — | |||||||||||||||||||||||||||||
10/28/13 | 23,750 | — | — | $ | 46.50 | 10/28/20 | — | — | — | — | ||||||||||||||||||||||||||||||
01/27/14 | 23,750 | — | — | $ | 60.22 | 01/27/21 | — | — | — | — | ||||||||||||||||||||||||||||||
04/28/14 | 23,750 | — | — | $ | 61.40 | 04/28/21 | — | — | — | — | ||||||||||||||||||||||||||||||
08/01/14 | 21,770 | 1,980 | — | $ | 78.11 | 08/01/21 | — | — | — | — | ||||||||||||||||||||||||||||||
10/24/14 | 16,104 | 3,221 | — | $ | 62.10 | 10/24/21 | — | — | — | — | ||||||||||||||||||||||||||||||
01/30/15 | 14,493 | 4,832 | — | $ | 76.81 | 01/30/22 | — | — | — | — | ||||||||||||||||||||||||||||||
04/24/15 | 12,883 | 6,442 | — | $ | 85.69 | 04/24/22 | — | — | — | — | ||||||||||||||||||||||||||||||
07/31/15 | 11,272 | 8,053 | — | $ | 79.38 | 07/31/22 | — | — | — | — | ||||||||||||||||||||||||||||||
10/23/15 | 7,125 | 7,125 | — | $ | 89.29 | 10/23/22 | — | — | — | — | ||||||||||||||||||||||||||||||
01/29/16 | 5,937 | 8,313 | — | $ | 73.31 | 01/29/23 | — | — | — | — | ||||||||||||||||||||||||||||||
04/29/16 | 4,750 | 9,500 | — | $ | 71.55 | 04/29/23 | — | — | — | — | ||||||||||||||||||||||||||||||
07/29/16 | 3,562 | 10,688 | — | $ | 51.95 | 07/29/23 | ||||||||||||||||||||||||||||||||||
10/28/16 | (5) | — | 17,925 | — | $ | 52.57 | 10/28/23 | — | — | — | — | |||||||||||||||||||||||||||||
01/27/17 | (5) | — | 17,925 | — | $ | 54.36 | 01/27/24 | — | — | — | — | |||||||||||||||||||||||||||||
04/28/17 | (5) | — | 17,925 | — | $ | 54.77 | 04/28/24 | — | — | — | — | |||||||||||||||||||||||||||||
10/23/15 | (6) | — | — | — | — | — | 13,998 | $ | 839,740 | — | — | |||||||||||||||||||||||||||||
10/28/16 | (6) | — | — | — | — | — | 28,500 | $ | 1,709,715 | — | — | |||||||||||||||||||||||||||||
10/24/14 | (7) | — | — | — | — | — | — | — | 9,200 | $ | 551,908 | |||||||||||||||||||||||||||||
10/23/15 | (7) | — | — | — | — | — | — | — | 14,000 | $ | 839,860 | |||||||||||||||||||||||||||||
10/28/16 | (7) | — | — | — | — | — | — | — | 28,500 | $ | 1,709,715 | |||||||||||||||||||||||||||||
Wajid Ali | ||||||||||||||||||||||||||||||||||||||||
05/11/15 | (5) | 26,666 | 13,334 | — | $ | 88.66 | 05/11/22 | — | — | — | — | |||||||||||||||||||||||||||||
10/28/16 | (5) | — | 6,875 | — | $ | 52.57 | 10/28/23 | — | — | — | — | |||||||||||||||||||||||||||||
01/27/17 | (5) | — | 6,875 | — | $ | 54.36 | 01/27/24 | — | — | — | — | |||||||||||||||||||||||||||||
04/28/17 | (5) | — | 6,875 | — | $ | 54.77 | 04/28/24 | — | — | — | — | |||||||||||||||||||||||||||||
05/11/15 | (8) | — | — | — | — | — | 5,000 | $ | 299,950 | — | — | |||||||||||||||||||||||||||||
10/28/16 | (6) | — | — | — | — | — | 10,900 | $ | 653,891 | — | — | |||||||||||||||||||||||||||||
10/23/15 | (7) | — | — | — | — | — | — | — | 5,266 | $ | 315,907 | |||||||||||||||||||||||||||||
10/28/16 | (7) | — | — | — | — | — | — | — | 10,900 | $ | 653,891 | |||||||||||||||||||||||||||||
Kevin D. Barber | 01/27/14 | 3,363 | — | — | $ | 60.22 | 01/27/21 | — | — | — | — | |||||||||||||||||||||||||||||
04/28/14 | 3,923 | — | — | $ | 61.40 | 04/28/21 | — | — | — | — | ||||||||||||||||||||||||||||||
08/01/14 | 6,165 | 561 | — | $ | 78.11 | 08/01/21 | — | — | — | — | ||||||||||||||||||||||||||||||
10/24/14 | 2,756 | 788 | — | $ | 62.10 | 10/24/21 | — | — | — | — | ||||||||||||||||||||||||||||||
01/30/15 | 3,543 | 1,182 | — | $ | 76.81 | 01/30/22 | — | — | — | — | ||||||||||||||||||||||||||||||
04/24/15 | 3,150 | 1,575 | — | $ | 85.69 | 04/24/22 | — | — | — | — | ||||||||||||||||||||||||||||||
07/31/15 | 2,756 | 1,969 | — | $ | 79.38 | 07/31/22 | — | — | — | — | ||||||||||||||||||||||||||||||
10/23/15 | 2,050 | 2,050 | — | $ | 89.29 | 10/23/22 | — | — | — | — | ||||||||||||||||||||||||||||||
01/29/16 | 1,708 | 2,392 | — | $ | 73.31 | 01/29/23 | — | — | — | — | ||||||||||||||||||||||||||||||
04/29/16 | 1,366 | 2,734 | — | $ | 71.55 | 04/29/23 | — | — | — | — | ||||||||||||||||||||||||||||||
07/29/16 | 1,025 | 3,075 | — | $ | 51.95 | 07/29/23 | ||||||||||||||||||||||||||||||||||
10/28/16 | (5) | — | 5,150 | — | $ | 52.57 | 10/28/23 | — | — | — | — | |||||||||||||||||||||||||||||
01/27/17 | (5) | — | 5,150 | — | $ | 54.36 | 01/27/24 | — | — | — | — | |||||||||||||||||||||||||||||
04/28/17 | (5) | — | 5,150 | — | $ | 54.77 | 04/28/24 | — | — | — | — | |||||||||||||||||||||||||||||
10/23/15 | (6) | — | — | — | — | — | 3,999 | $ | 239,900 | — | — | |||||||||||||||||||||||||||||
10/28/16 | (6) | — | — | — | — | — | 8,200 | $ | 491,918 | — | — | |||||||||||||||||||||||||||||
10/24/14 | (7) | — | — | — | — | — | — | — | 2,233 | $ | 133,958 | |||||||||||||||||||||||||||||
10/23/15 | (7) | — | — | — | — | — | — | — | 4,000 | $ | 239,960 | |||||||||||||||||||||||||||||
10/28/16 | (7) | — | — | — | — | — | — | — | 8,200 | $ | 491,918 |
Option Awards(2) | Stock Awards(3) | |||||||||||||||||||||||||||||||||||
Equity Incentive | Market | Equity Incentive | ||||||||||||||||||||||||||||||||||
Number of | Number of | Plan Awards: | Number of | Value of | Plan Awards: | Equity Incentive Plan | ||||||||||||||||||||||||||||||
Securities | Securities | Number of | Shares or | Shares or | Number of | Awards: Market or | ||||||||||||||||||||||||||||||
Underlying | Underlying | Securities | Units of | Units of | Unearned Shares, | Payout Value of | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Underlying | Option | Stock That | Stock That | Units or Other | Unearned Shares, Units | |||||||||||||||||||||||||||||
Options | Options | Unexercised | Exercise | Option | Have Not | Have Not | Rights That Have | or Other Rights That | ||||||||||||||||||||||||||||
Grant | (#) | (#) | Unearned Options | Price | Expiration | Vested | Vested | Not Vested | Have Not Vested | |||||||||||||||||||||||||||
Name (1) | Date | Exercisable | Unexercisable | (#) | ($) | Date | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||||
(a) |
| (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | ||||||||||||||||||||||||||
Alex Wong | 10/31/12(4) | 1,300 | - | - | $23.16 | 10/31/19 | - | - | - | - | ||||||||||||||||||||||||||
01/28/13(4) | 1,700 | - | - | $35.76 | 01/28/20 | - | - | - | - | |||||||||||||||||||||||||||
04/29/13(4) | 5,000 | - | - | $42.57 | 04/29/20 | - | - | - | - | |||||||||||||||||||||||||||
08/05/13(4) | 5,000 | - | - | $39.80 | 08/05/20 | - | - | - | - | |||||||||||||||||||||||||||
10/28/13 | 5,240 | - | - | $46.50 | 10/28/20 | - | - | - | - | |||||||||||||||||||||||||||
01/27/14 | 5,241 | - | - | $60.22 | 01/27/21 | - | - | - | - | |||||||||||||||||||||||||||
04/28/14 | 5,240 | - | - | $61.40 | 04/28/21 | - | - | - | - | |||||||||||||||||||||||||||
08/01/14 | 5,241 | - | - | $78.11 | 08/01/21 | - | - | - | - | |||||||||||||||||||||||||||
10/24/14 | 3,425 | - | - | $62.10 | 10/24/21 | - | - | - | - | |||||||||||||||||||||||||||
01/30/15 | 3,425 | - | - | $76.81 | 01/30/22 | - | - | - | - | |||||||||||||||||||||||||||
04/24/15 | 3,425 | - | - | $85.69 | 04/24/22 | - | - | - | - | |||||||||||||||||||||||||||
07/31/15 | 3,425 | - | - | $79.38 | 07/31/22 | - | - | - | - | |||||||||||||||||||||||||||
10/23/15 | 4,100 | - | - | $89.29 | 10/23/22 | - | - | - | - | |||||||||||||||||||||||||||
01/29/16 | 4,100 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 4,100 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 3,758 | 342 | - | $51.95 | 07/29/23 | |||||||||||||||||||||||||||||||
10/28/16(5) | 4,291 | 859 | - | $52.57 | 10/28/23 | - | - | - | - | |||||||||||||||||||||||||||
01/27/17(5) | 3,862 | 1,288 | - | $54.36 | 01/27/24 | - | - | - | - | |||||||||||||||||||||||||||
04/28/17(5) | 3,433 | 1,717 | - | $54.77 | 04/28/24 | - | - | - | - | |||||||||||||||||||||||||||
08/04/17(5) | 3,004 | 2,146 | - | $45.32 | 08/04/24 | - | - | - | - | |||||||||||||||||||||||||||
10/28/16(6) | - | - | - | - | - | 2,733 | $79,640 | - | - | |||||||||||||||||||||||||||
10/31/17(6) | - | - | - | - | - | 7,768 | $226,360 | - | - | |||||||||||||||||||||||||||
11/13/18(6) | - | - | - | - | - | 9,566 | $278,753 | - | - | |||||||||||||||||||||||||||
10/31/17(7) | - | - | - | - | - | - | - | 7,768 | $226,360 | |||||||||||||||||||||||||||
11/13/18(7) | - | - | - | - | - | - | - | 9,566 | $278,753 | |||||||||||||||||||||||||||
10/28/16(8) | - | - | - | - | - | - | - | 2,733 | $79,640 | |||||||||||||||||||||||||||
10/31/17(8) | - | - | - | - | - | - | - | 7,767 | $226,330 | |||||||||||||||||||||||||||
11/13/18(8) | - | - | - | - | - | - | - | 9,566 | $278,753 | |||||||||||||||||||||||||||
Richard A. | 10/31/12(4) | 18,750 | - | - | $23.16 | 10/31/19 | - | - | - | - | ||||||||||||||||||||||||||
Bergman | 01/28/13(4) | 18,750 | - | - | $35.76 | 01/28/20 | - | - | - | - | ||||||||||||||||||||||||||
04/29/13(4) | 18,750 | - | - | $42.57 | 04/29/20 | - | - | - | - | |||||||||||||||||||||||||||
08/05/13(4) | 18,750 | - | - | $39.80 | 08/05/20 | - | - | - | - | |||||||||||||||||||||||||||
10/28/13 | 23,750 | - | - | $46.50 | 10/28/20 | - | - | - | - | |||||||||||||||||||||||||||
01/27/14 | 23,750 | - | - | $60.22 | 01/27/21 | - | - | - | - | |||||||||||||||||||||||||||
04/28/14 | 23,750 | - | - | $61.40 | 04/28/21 | - | - | - | - | |||||||||||||||||||||||||||
08/01/14 | 23,750 | - | - | $78.11 | 08/01/21 | - | - | - | - | |||||||||||||||||||||||||||
10/24/14 | 19,325 | - | - | $62.10 | 10/24/21 | - | - | - | - | |||||||||||||||||||||||||||
01/30/15 | 19,325 | - | - | $76.81 | 01/30/22 | - | - | - | - | |||||||||||||||||||||||||||
04/24/15 | 19,325 | - | - | $85.69 | 04/24/22 | - | - | - | - | |||||||||||||||||||||||||||
07/31/15 | 19,325 | - | - | $79.38 | 07/31/22 | - | - | - | - | |||||||||||||||||||||||||||
10/23/15 | 14,250 | - | - | $89.29 | 10/23/22 | - | - | - | - | |||||||||||||||||||||||||||
01/29/16 | 14,250 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 14,250 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 13,062 | - | - | $51.95 | 07/29/23 | |||||||||||||||||||||||||||||||
10/28/16(5) | 14,937 | - | - | $52.57 | 10/28/23 | - | - | - | - | |||||||||||||||||||||||||||
01/27/17(5) | 13,443 | - | - | $54.36 | 01/27/24 | - | - | - | - | |||||||||||||||||||||||||||
04/28/17(5) | 11,950 | - | - | $54.77 | 04/28/24 | - | - | - | - | |||||||||||||||||||||||||||
08/04/17(5) | 10,456 | - | - | $45.32 | 08/04/24 | - | - | - | - | |||||||||||||||||||||||||||
Kermit Nolan | 08/02/10(9) | 9,792 | - | - | $31.73 | 08/02/20 | - | - | - | - | ||||||||||||||||||||||||||
01/28/13(4) | 1,000 | - | - | $35.76 | 01/28/20 | - | - | - | - | |||||||||||||||||||||||||||
04/29/13(4) | 1,000 | - | - | $42.57 | 04/29/20 | - | - | - | - | |||||||||||||||||||||||||||
08/05/13(4) | 1,000 | - | - | $39.80 | 08/05/20 | - | - | - | - | |||||||||||||||||||||||||||
10/28/13 | 744 | - | - | $46.50 | 10/28/20 | - | - | - | - | |||||||||||||||||||||||||||
01/27/14 | 744 | - | - | $60.22 | 01/27/21 | - | - | - | - |
Huibert Verhoeven Alex Wong 10/24/14 (5) 21,763 1,979 — $ 62.10 10/24/21 — — — — 10/23/15 1,737 1,738 — $ 89.29 10/23/22 — — — — 01/29/16 1,447 2,028 — $ 73.31 01/29/23 — — — — 04/29/16 1,158 2,317 — $ 71.55 04/29/23 — — — — 07/29/16 868 2,607 — $ 51.95 07/29/23 — — — — 10/28/16 (5) — 4,575 — $ 52.57 10/28/23 — — — — 01/27/17 (5) — 4,575 — $ 54.36 01/27/24 — — — — 04/28/17 (5) — 4,575 — $ 54.77 04/28/24 — — — — 10/24/14 (8) — — — — — 1,589 $ 95,324 — — 10/23/15 (6) — — — — — 3,399 $ 203,906 — — 10/28/16 (6) — — — — — 7,300 $ 437,927 — — 10/23/15 (7) — — — — — — — 3,400 $ 203,966 10/28/16 (7) — — — — — — — 7,300 $ 437,927 08/01/11 (9) 2,300 — — $ 25.03 08/01/18 — — — — 10/31/12 (4) 1,300 — — $ 23.16 10/31/19 — — — — 01/28/13 (4) 1,700 — — $ 35.76 01/28/20 — — — — 04/29/13 (4) 5,000 — — $ 42.57 04/29/20 — — — — 08/05/13 (4) 5,000 — — $ 39.80 08/05/20 — — — — 10/28/13 5,240 — — $ 46.50 10/28/20 — — — — 01/27/14 5,241 — — $ 60.22 01/27/21 — — — — 04/28/14 5,240 — — $ 61.40 04/28/21 — — — — 08/01/14 4,804 437 — $ 78.11 08/01/21 — — — — 10/24/14 2,854 571 — $ 62.10 10/24/21 — — — — 01/30/15 2,568 857 — $ 76.81 01/30/22 — — — — 04/24/15 2,283 1,142 — $ 85.69 04/24/22 — — — — 07/31/15 1,997 1,428 — $ 79.38 07/31/22 — — — — 10/23/15 2,050 2,050 — $ 89.29 10/23/22 — — — — 01/29/16 1,708 2,392 — $ 73.31 01/29/23 — — — — 04/29/16 1,366 2,734 — $ 71.55 04/29/23 — — — — 07/29/16 1,025 3,075 — $ 51.95 07/29/23 10/28/16 (5) — 5,150 — $ 52.57 10/28/23 — — — — 01/27/17 (5) — 5,150 — $ 54.36 01/27/24 — — — — 04/28/17 (5) — 5,150 — $ 54.77 04/28/24 — — — — 10/23/15 (6) — — — — — 3,999 $ 239,900 — — 10/28/16 (6) — — — — — 8,200 $ 491,918 — — 10/24/14 (7) — — — — — — — 1,633 $ 97,964 10/23/15 (7) — — — — — — — 4,000 $ 239,960 10/28/16 (7) — — — — — — — 8,200 $ 491,918
Kermit Nolan (cont’d) | 04/28/14 | 744 | - | - | $61.40 | 04/28/21 | - | - | - | - | ||||||||||||||||||||||||||
08/01/14 | 745 | - | - | $78.11 | 08/01/21 | - | - | - | - | |||||||||||||||||||||||||||
10/24/14 | 408 | - | - | $62.10 | 10/24/21 | - | - | - | - | |||||||||||||||||||||||||||
01/30/15 | 408 | - | - | $76.81 | 01/30/22 | - | - | - | - | |||||||||||||||||||||||||||
04/24/15 | 408 | - | - | $85.69 | 04/24/22 | - | - | - | - | |||||||||||||||||||||||||||
07/31/15 | 408 | - | - | $79.38 | 07/31/22 | - | - | - | - | |||||||||||||||||||||||||||
10/23/15 | 1,049 | - | - | $89.29 | 10/23/22 | - | - | - | - | |||||||||||||||||||||||||||
01/29/16 | 1,050 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 1,049 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 962 | 88 | - | $51.95 | 07/29/23 | - | - | - | - | |||||||||||||||||||||||||||
10/12/16(6) | - | - | - | - | - | 2,425 | $70,665 | - | - | |||||||||||||||||||||||||||
06/22/17(6) | - | - | - | - | - | 999 | $29,111 | - | - | |||||||||||||||||||||||||||
11/22/17(6) | - | - | - | - | - | 3,584 | $104,438 | - | - | |||||||||||||||||||||||||||
11/14/18(6) | - | - | - | - | - | 9,523 | $277,500 | - | - | |||||||||||||||||||||||||||
02/07/19(6) | - | - | - | - | - | 12,500 | $364,250 | - | - | |||||||||||||||||||||||||||
12/13/17(7) | - | - | - | - | - | - | - | 1,344 | $39,164 | |||||||||||||||||||||||||||
12/13/17(8) | - | - | - | - | - | - | - | 1,344 | $39,164 | |||||||||||||||||||||||||||
Shawn Liu | 01/28/13(10) | 5,780 | - | - | $35.76 | 01/28/20 | - | - | - | - | ||||||||||||||||||||||||||
10/28/13 | 287 | - | - | $46.50 | 10/28/20 | - | - | - | - | |||||||||||||||||||||||||||
01/27/14 | 335 | - | - | $60.22 | 01/27/21 | - | - | - | - | |||||||||||||||||||||||||||
04/28/14 | 382 | - | - | $61.40 | 04/28/21 | - | - | - | - | |||||||||||||||||||||||||||
08/01/14 | 431 | - | - | $78.11 | 08/01/21 | - | - | - | - | |||||||||||||||||||||||||||
10/24/14 | 269 | - | - | $62.10 | 10/24/21 | - | - | - | - | |||||||||||||||||||||||||||
01/30/15 | 296 | - | - | $76.81 | 01/30/22 | - | - | - | - | |||||||||||||||||||||||||||
04/24/15 | 322 | - | - | $85.69 | 04/24/22 | - | - | - | - | |||||||||||||||||||||||||||
07/31/15 | 322 | - | - | $79.38 | 07/31/22 | - | - | - | - | |||||||||||||||||||||||||||
10/23/15 | 704 | - | - | $89.29 | 10/23/22 | - | - | - | - | |||||||||||||||||||||||||||
01/29/16 | 705 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 705 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 646 | 59 | - | $51.95 | 07/29/23 | - | - | |||||||||||||||||||||||||||||
10/12/16(6) | - | - | - | - | - | 1,400 | $40,796 | - | - | |||||||||||||||||||||||||||
06/22/17(6) | - | - | - | - | - | 999 | $29,111 | - | - | |||||||||||||||||||||||||||
10/31/17(6) | - | - | - | - | - | 2,779 | $80,980 | - | - | |||||||||||||||||||||||||||
11/13/18(6) | - | - | - | - | - | 10,001 | $291,429 | - | - | |||||||||||||||||||||||||||
10/31/17(7) | - | - | - | - | - | - | - | 4,780 | $139,289 | |||||||||||||||||||||||||||
11/13/18(7) | - | - | - | - | - | - | - | 10,001 | $291,429 | |||||||||||||||||||||||||||
10/31/17(8) | - | - | - | - | - | - | - | 4,780 | $139,289 | |||||||||||||||||||||||||||
11/13/18(8) | - | - | - | - | - | - | - | 10,001 | $291,429 | |||||||||||||||||||||||||||
Richard Lu | 12/03/18(6) | - | - | - | - | - | 22,107 | $644,198 | - | - | ||||||||||||||||||||||||||
12/03/18(8) | - | - | - | - | - | - | - | 11,054 | $322,114 | |||||||||||||||||||||||||||
John | 11/04/13(10) | 279 | - | - | $46.08 | 11/04/20 | - | - | - | - | ||||||||||||||||||||||||||
McFarland | 05/14/14 | 5,000 | - | - | $59.34 | 05/14/21 | - | - | - | - | ||||||||||||||||||||||||||
10/24/14 | 3,000 | - | - | $62.10 | 10/24/21 | - | - | - | - | |||||||||||||||||||||||||||
01/30/15 | 3,000 | - | - | $76.81 | 01/30/22 | - | - | - | - | |||||||||||||||||||||||||||
04/24/15 | 3,000 | - | - | $85.69 | 04/24/22 | - | - | - | - | |||||||||||||||||||||||||||
07/31/15 | 3,000 | - | - | $79.38 | 07/31/22 | - | - | - | - | |||||||||||||||||||||||||||
10/23/15 | 2,725 | - | - | $89.29 | 10/23/22 | - | - | - | - | |||||||||||||||||||||||||||
01/29/16 | 2,725 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 2,725 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 2,497 | 228 | - | $51.95 | 07/29/23 | |||||||||||||||||||||||||||||||
10/28/16(5) | 2,979 | 596 | - | $52.57 | 10/28/23 | - | - | - | - | |||||||||||||||||||||||||||
01/27/17(5) | 2,681 | 894 | - | $54.36 | 01/27/24 | - | - | - | - | |||||||||||||||||||||||||||
04/28/17(5) | 2,383 | 1,192 | - | $54.77 | 04/28/24 | - | - | - | - | |||||||||||||||||||||||||||
08/04/17(5) | 2,085 | 1,490 | - | $45.32 | 08/04/24 | - | - | - | - | |||||||||||||||||||||||||||
10/28/16(6) | - | - | - | - | - | 1,899 | $55,337 | - | - | |||||||||||||||||||||||||||
10/31/17(6) | - | - | - | - | - | 6,273 | $182,795 | - | - | |||||||||||||||||||||||||||
10/31/17(6) | - | - | - | - | - | 9,566 | $278,753 | - | - | |||||||||||||||||||||||||||
10/31/17(7) | - | - | - | - | - | - | - | 6,274 | $182,824 | |||||||||||||||||||||||||||
11/13/18(7) | - | - | - | - | - | - | - | 9,566 | $278,753 | |||||||||||||||||||||||||||
10/28/16(8) | - | - | - | - | - | - | - | 1,900 | $55,366 | |||||||||||||||||||||||||||
10/31/17(8) | - | - | - | - | - | - | - | 6,274 | $182,824 | |||||||||||||||||||||||||||
11/13/18(8) | - | - | - | - | - | - | - | 9,566 | $278,753 | |||||||||||||||||||||||||||
Huibert | 10/24/14(5) | 23,742 | - | - | $62.10 | 10/24/21 | - | - | - | - | ||||||||||||||||||||||||||
Verhoeven | 10/23/15 | 3,475 | - | - | $89.29 | 10/23/22 | - | - | - | - | ||||||||||||||||||||||||||
01/29/16 | 3,475 | - | - | $73.31 | 01/29/23 | - | - | - | - | |||||||||||||||||||||||||||
04/29/16 | 3,185 | - | - | $71.55 | 04/29/23 | - | - | - | - | |||||||||||||||||||||||||||
07/29/16 | 2,895 | - | - | $51.95 | 07/29/23 | - | - | - | - | |||||||||||||||||||||||||||
10/28/16(5) | 3,431 | - | - | $52.57 | 10/28/23 | - | - | - | - | |||||||||||||||||||||||||||
01/27/17(5) | 3,050 | - | - | $54.36 | 01/27/24 | - | - | - | - | |||||||||||||||||||||||||||
04/28/17(5) | 2,668 | - | - | $54.77 | 04/28/24 | - | - | - | - | |||||||||||||||||||||||||||
08/04/17(5) | 2,287 | - | - | $45.32 | 08/04/24 | - | - | - | - |
(1) | Mr. Ali is not included in this table as he currently has no outstanding equity awards with the company. |
(2) | Unless otherwise noted, 1/12th of the total shares underlying each stock option award will vest each quarter following the |
Stock awards were valued using the closing price of our common stock as of June |
(4) | 1/36th of the total shares underlying this stock option award will vest each month following the |
(5) | 1/3rd of the total shares underlying this stock option award will vest one year from the |
(6) | 1/3rd of the total shares underlying this DSU award will vest in the calendar quarter one year from the |
(7) | These MSU awards, which are reported at their target levels as of the end of fiscal |
(8) | These PSU awards, which are reported at their target levels as of the end of fiscal 2019, consist of the right to receive a specified number of shares of our common stock if the award’s performance conditions are satisfied. The shares of our common stock subject to such PSU awards will be earned, if at all, based on the achievement of a specified level ofnon-GAAP earnings per share over aone-year performance period. The potential payout ranges from 0% to 200% of the grant target quantity and is adjusted on a linear basis with a payout triggering if ournon-GAAP earnings per share equals greater than 65% of the target with a maximum payout achieved at 135% of target.One-third of the total number of shares |
(9) | 1/48th of the total shares underlying this stock option award will vest each month |
(10) | 1/3rd of the total shares underlying this stock option award will vest one year from the grant date and 1/36th of the total shares underlying this stock option award will vest each month thereafter until fully vested, except the 1/28/13 grant to Mr. Liu which began vesting on 11/12/12. |
Fiscal 2019 Option Exercises and Vested Stock Table
The following table sets forth the number of shares of our common stock acquired by our Named Executive Officers upon the exercise of stock options and vesting of stock awards and the value realized thereby, during the fiscal year ended June 24, 2017.29, 2019.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
Number of Shares | Value Realized | Number of Shares | Value Realized | |||||||||||||||||||||||||||||
Option Awards | Stock Awards | Acquired on Exercise | on Exercise | Acquired on Vesting | on Vesting | |||||||||||||||||||||||||||
Named Executive Officer | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | (#) | ($) | (#) | ($) | ||||||||||||||||||||||||
Alex Wong | - | - | 16,431 | $625,702 | ||||||||||||||||||||||||||||
Richard A. Bergman | 80,000 | $ | 2,603,754 | 11,996 | $ | 625,231 | 20,000 | $502,090 | 62,395 | $2,377,155 | ||||||||||||||||||||||
Kermit Nolan | 9,317 | $62,015 | 7,607 | $287,236 | ||||||||||||||||||||||||||||
Wajid Ali | — | — | 5,000 | $ | 274,187 | - | - | 21,182 | $808,495 | |||||||||||||||||||||||
Kevin Barber | 10,140 | $ | 149,765 | 3,430 | $ | 178,771 | ||||||||||||||||||||||||||
Shawn Liu | - | - | 9,294 | $354,491 | ||||||||||||||||||||||||||||
Richard Lu | - | - | - | - | ||||||||||||||||||||||||||||
John McFarland | - | - | 12,682 | $483,256 | ||||||||||||||||||||||||||||
Huibert Verhoeven | — | — | 4,879 | $ | 262,930 | - | - | 16,283 | $620,489 | |||||||||||||||||||||||
Alex Wong | — | — | 3,115 | $ | 162,353 |
For stock options, the value realized is computed as the difference between the closing market price of our common stock on the date of exercise and the exercise price, multiplied by the number of shares of our common stock acquired upon exercise. For stock awards, the value realized is computed as the closing market price of our common stock on the later of the date the restrictions lapse or the delivery date, multiplied by the number of vested shares.
For the fiscal year ending June 29, 2019, due to the departure of Mr. Bergman, our former CEO, we combined the total compensation provided to each of Mr. Bergman and Mr. Wong, for the time each served as our principal executive officer in fiscal 2019 to calculate the pay ratio.
The ratio of the annual total compensation of Mr. Bergman, our former Chief Executive Officer and Mr. Wong, our PEO, (“PEO Compensation”), to the median of the annual total compensation of all of our employees other than Mr. Bergman and Mr. Wong (“Median Annual Compensation”) was 79:1. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K using the data and assumptions summarized below. In this summary, we refer to the employee who received such Median Annual Compensation as the “Median Employee.” For purposes of this disclosure, the date used to identify the Median Employee was June 29, 2019 (the “Determination Date”).
Our PEO Compensation represents the total compensation paid to Mr. Bergman in connection with his service as our former Chief Executive Officer ($6,893,132) and a prorated portion of the total compensation reported for Mr. Wong representing the time Mr. Wong served as our Principal Executive Officer ($490,777), which totaled $7,383,909 for fiscal 2019. For purposes of this disclosure, Median Annual Compensation was $93,079, and was calculated by totaling, for our Median Employee, annual total compensation using the same methodology we use to calculate the amount reported for our Named Executive Officers in the “Total” column of the Fiscal 2019 Summary Compensation Table, set forth in this proxy statement for fiscal 2019, which was also in accordance with Item 402(c)(2)(x) of RegulationS-K.
To identify the Median Employee, we first determined our employee population as of the Determination Date. We had 1,861 employees, representing all full-time, part-time, seasonal and temporary employees of us and our consolidated subsidiaries as of the Determination Date. This number does not include Mr. Bergman, Mr. Wong, or any independent contractors or “leased” workers, as permitted by the applicable SEC rules. We then measured compensation for the period beginning on July 1, 2018 and ending on June 29, 2019 for these employees. This compensation measurement was calculated by totaling, for each employee, salary or wages plus overtime paid, any earned cash incentive compensation, and the grant date fair value of equity award grants for fiscal 2019. For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using exchange rates in effect on the Determination Date. A portion of our employee workforce worked for less than the full fiscal year due to commencing employment after the beginning of the fiscal year. In determining the Median Employee, we annualized the compensation for such individuals.
Of the 1,861 employees, 46 employees (or approximately 2.5%) are employed in Hong Kong, 20 employees (or approximately 1.1%) are employed in Armenia, 5 employees (or approximately 0.3%) are employed in Canada, 7 employees (or approximately 0.4%) are employed in Switzerland, 2 employees (or approximately 0.1%) are employed in France, 2 employees
(or approximately 0.1%) are employed in Thailand, 1 employee (or less than 0.1%) is employed in Denmark, and 1 employee (or less than 0.1%) is employed in Singapore. We have chosen to exclude these 84 employees (or approximately 4.5% of our total employees) based outside of the U.S. in determining our Median Employee as permitted under the de minimis exemption to Item 402(u) of RegulationS-K, which allows us to exclude up to 5% of our total employees who arenon-U.S. employees. We used our number of total employees excluding Mr. Bergman and Mr. Wong (1,861) in making our de minimis calculation. Neither our Compensation Committee nor our management used the ratio of our CEO Compensation to our Median Annual Compensation in making compensation decisions.
Potential Payments Upon Termination or Change of Control
The following table sets forth certain information regarding potential payments and other benefits that would be payable to the Named Executive Officers upon termination of employment or a change of control of our company, assuming the termination or change of control event took place on June 24, 2017.29, 2019.
Change in Control | Termination Without Good Cause or | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Not in Connection | with Good Reason (Not in | Termination Without Good Cause or | ||||||||||||||||||||||||||||||||||||||||||||||||||||
with a Qualifying | Connection with a Qualifying Change | with Good Reason Following a | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Termination) | in Control) (2) | Qualifying Change in Control | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash- | Care and | Cash- | Care and | |||||||||||||||||||||||||||||||||||||||||||||||||||
Change in Control (Not in Connection with a Qualifying Termination) | Termination Without Good Cause or with Good Reason (Not in Connection with a Qualifying Change in Control) | Termination Without Good Cause or with Good Reason Following a Qualifying Change in Control | Based | Welfare | Equity | Based | Welfare | Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Name | Equity Treatment(1) | Cash-Based Severance | Care and Welfare Benefits | Equity Treatment | Cash-Based Severance | Care and Welfare Benefits | Equity Treatment(2) | Equity Treatment(1) | Severance | Benefits | Treatment | Severance | Benefits | Treatment (3) | ||||||||||||||||||||||||||||||||||||||||
Alex Wong | $45,197 | $755,108 | $12,732 | - | $1,322,983 | $56,893 | $1,017,817 | |||||||||||||||||||||||||||||||||||||||||||||||
Richard A. Bergman | $ | 214,985 | $ | 1,715,000 | $ | 13,833 | — | $ | 2,572,500 | $ | 26,952 | $ | 3,177,861 | - | $2,140,400 | $46,309 | - | - | - | - | ||||||||||||||||||||||||||||||||||
Wajid Ali | $ | 82,222 | �� | $ | 345,625 | $ | 22,809 | — | $ | 691,250 | $ | 37,706 | $ | 1,161,670 | ||||||||||||||||||||||||||||||||||||||||
Kevin D. Barber | $ | 61,855 | — | — | — | $ | 647,500 | $ | 33,406 | $ | 912,487 | |||||||||||||||||||||||||||||||||||||||||||
Kermit Nolan | $4,284 | $587,222 | $8,095 | - | $1,029,556 | $35,121 | $891,472 | |||||||||||||||||||||||||||||||||||||||||||||||
Shawn Liu | $36,606 | $737,726 | $13,487 | - | $1,273,151 | $47,479 | $781,942 | |||||||||||||||||||||||||||||||||||||||||||||||
Richard Lu | $23,622 | $880,784 | $13,469 | - | $1,362,034 | $42,238 | $695,736 | |||||||||||||||||||||||||||||||||||||||||||||||
John McFarland | $40,438 | $706,807 | $12,714 | - | $1,231,107 | $43,387 | $899,367 | |||||||||||||||||||||||||||||||||||||||||||||||
Huibert Verhoeven | $ | 55,066 | — | — | — | $ | 595,000 | $ | 34,677 | $ | 896,769 | - | $323,750 | $11,435 | - | - | - | - | ||||||||||||||||||||||||||||||||||||
Alex Wong | $ | 61,855 | — | — | — | $ | 595,000 | $ | 50,408 | $ | 912,487 |
(1) | The amounts set forth herein represent the prorated value of the MSUs which would have become automatically vested upon a change in control of the company, calculated using the closing market price of our common stock as of June |
(2) | The amounts herein include $404,233, $320,201, $406,901, $443,284, and $391,107 for Messrs. Wong, Nolan, Liu, Lu and McFarland, respectively, which is the amount such NEO would have received in connection with the Retention Program, should they have been terminated as of June 29, 2019 without “good cause” or with “good reason”, each as defined in our Severance Policy. The amounts herein for Messrs. Bergman and Verhoeven represent the actual amount of severance each was or will be paid in connection with his departure from the company. Mr. Ali did not receive any severance payments in connection with his departure from the company and therefore, has been excluded from this table. With respect to Messrs. Wong, Nolan, Liu, Lu and McFarland, such amounts are net of the portion of 2019 target bonus achievement payments already made prior to the end of the fiscal year. |
(3) | The amounts set forth herein represent the market value, as calculated using the closing market price of our common stock as of June |
Severance Policies
Each of our Named Executive Officers participates in our CoC Severance Policy. Messrs. BergmanPolicy and Ali are currently the only Named Executive Officers covered by the Severance Policy. Please see “Compensation Discussion and Analysis — Severance Policy” and “Compensation Discussion and Analysis — CoC Severance Policy” for further information about the payments and benefits that may be received by our Named Executive Officers under these policies.
Treatment of MSUs upon a Change in Control
Upon a change inof control of the Companycompany (as defined in the Amended and Restated 2010 Incentive Compensation Plan), the number of MSUs for any performance tranches that are ongoing as of a change inof control (the “CIC“CoC MSUs”) will be determined based on actual achievement of the applicable performance criteria as of the day immediately prior to such change in control. A prorated portion of such CICCoC MSUs (based on the amount of time elapsed in the applicable performance tranche through the change in control) will become vested as of the change inof control based on the level of
achievement of the applicable performance criteria as of the date immediately preceding the date of the change of control. The remaining portion of such CICCoC MSUs (the “Non-Vested CIC“Non-Vested CoC MSUs”) will remain outstanding after the change in control and will vest on the applicable vesting dates for such performance tranches, subject to the awardholder’s continued service.service to the company. However, anyNon-Vested CIC CoC MSU that is not assumed or substituted by a successor or acquiring entity will become fully vested, effective as of, and contingent upon, a change in control.of control of the company.
Indemnification Under Our Certificate of Incorporation, Bylaws and Indemnification Agreements
Our Certificate of Incorporation provides that no director will be personally liable to our company or our stockholders for monetary damages for breach of a fiduciary duty as a director, except to the extent such exemption or limitation of liability is not permitted under the Delaware General Corporation Law, or the DGCL. The effect of this provision in our Certificate of Incorporation is to eliminate the rights of our company and our stockholders, either directly or through stockholders’ derivative suits brought on behalf of our company, to recover monetary damages from a director for breach of the fiduciary duty of care as a director, except in those instances described under the DGCL. In addition, we have adopted provisions in our bylaws and entered into indemnification agreements that require us to indemnify our directors, officers, and certain other representatives of our company against expenses and certain other liabilities arising out of their conduct on behalf of our company to the maximum extent and under all circumstances permitted by law. Indemnification may not apply in certain circumstances related to actions arising under the federal securities laws.
Stock-Based Compensation Plan Information
The following table sets forth information, as of June 24, 2017,29, 2019, with respect to shares of our common stock that may be issued under both stockholder approved and unapproved stock-based compensation plans upon delivery of shares for MSU, awardsDSU and DSUPSU awards, exercise of outstanding stock options, the weighted average exercise price of outstanding stock options, and the number of securities available for future issuance under our various stock-based compensation plans.
Number of Securities Remaining | ||||||||||||||||||||||||
Number of Securities | Available for Future Issuance | |||||||||||||||||||||||
to Be Issued Upon | Under Stock-Based | |||||||||||||||||||||||
Delivery of Shares for | Number of Securities to Be | Compensation Plans (Excluding | ||||||||||||||||||||||
DSU, MSU, and | Issued Upon Exercise of | Weighted-Average Exercise | Securities Reflected in Columns | |||||||||||||||||||||
PSU awards | Outstanding Options | Price of Outstanding Options | (a) and (b)) | |||||||||||||||||||||
Plan Category | Number of Securities to Be Issued Upon Delivery of Shares for DSU and MSU awards (a) | Number of Securities to Be Issued Upon Exercise of Outstanding Options (b) | Weighted- Average Exercise Price of Outstanding Options (c) | Number of Securities Remaining Available for Future Issuance Under Stock-Based Compensation Plans (Excluding Securities Reflected in Columns (a) and (b)) (d) | (a) | (b) | (c) | (d) | ||||||||||||||||
Stock-Based Compensation Plans Approved by Stockholders | 1,479,394 | 2,490,168 | $ | 49.20 | 2,947,069 | 2,282,203 | 1,191,929 | $59.07 | 2,891,466 | |||||||||||||||
Stock-Based Compensation Plans Not Approved by Stockholders | — | — | — | — | - | - | - | - | ||||||||||||||||
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Total | 1,479,394 | 2,490,168 | $ | 49.20 | 2,947,069 | 2,282,203 | 1,191,929 | $59.07 | 2,891,466 | |||||||||||||||
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2001 Incentive Compensation Plan
Our 2001 Incentive Compensation Plan, as amended, or the 2001 Plan, was designed to attract, motivate, retain, and reward our executive officers, employees, directors, and independent contractors, by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The 2001 Plan was adopted by our Board of Directors in March 2001 and approved by our stockholders in November 2001. Our 2010 Incentive Compensation Plan, upon approval by our stockholders in October 2010, replaced our 2001 Plan. No new grants have been made under our 2001 Plan since our 2010 Plan was approved by stockholders. As of June 24, 2017,30, 2019, stock options to purchase 686,679100,003 shares of our common stock and zero DSUs were outstanding under the 2001 Plan. During fiscal year 2017, 203,3002019, 77,010 shares of our common stock were issued upon exercise of outstanding options, and zero net shares of our common stock were delivered upon vesting of DSUs.
Amended and Restated 2010 Incentive Compensation Plan
Our Amended and Restated 2010 Incentive Compensation Plan, or the 2010 Plan, is designed to attract, motivate, retain, and reward our executive officers, employees, directors, and consultants by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The 2010 Plan was originally adopted by our Board of Directors in August 2010 and approved by our stockholders in October 2010. At our 20162017 Annual Stockholders Meeting, our stockholders approved an amendment and restatement of the 2010 Plan to, among other changes, increase the number of shares of common stock available for future awards by 2,300,000 shares. In July 2017, the Compensation Committee approved an amendment to the 2010 Plan to increase the number of shares of common stock available for future awards by 2,000,000 shares. At our 2018 Annual Stockholders Meeting, our stockholders approved an amendment and restatement of the 2010 Plan to, among other things, increase the
number of shares subject to stockholderof common stock available for future awards by 1,400,000 shares. Upon approval atby our stockholders of the upcoming Annual Meeting of Stockholders. Please see “Proposal Five: Approval of an Amendment to the Amended2019 Equity and Restated 2010 Incentive Compensation Plan (“2019 Incentive Plan” for further information.), included as Proposal Four in this Proxy Statement, outstanding awards under the 2010 Plan will continue unaffected until issued or cancelled but no new grants will be permitted to be made under our 2010 Plan. If the 2019 Incentive Plan is not approved by our stockholders, no awards will be made under the 2019 Incentive Plan, and the 2010 Plan will remain in effect.
Under the 2010 Plan and as of the end of fiscal 2017,2019, an aggregate of 2,566,8992,891,466 shares of our common stock may be issued pursuant to the granting of stock options to acquire common stock, the direct granting of restricted common stock, DSUs, PSUs and MSUs, the granting of stock appreciation rights, or the granting of dividend equivalents. As of June 24, 2017,30, 2019, stock options to purchase 1,803,4891,191,929 shares of our common stock and 1,479,3942,282,203 DSUs, PSUs and MSUs were outstanding under the 2010 Plan. During fiscal year 2017, 201,4382019, 177,823 shares of our common stock were issued upon exercise of outstanding stock options, and 462,470914,236 net shares of our common stock were delivered upon vesting of DSUs, PSUs and MSUs.
2019 Equity and Incentive Compensation Plan
Our 2019 Equity and Incentive Compensation Plan, or the 2019 Incentive Plan, is designed to attract, motivate, retain, and reward our executive officers, employees, directors, and consultants by providing such persons with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. In July 2019, our Board approved the 2019 Incentive Plan, subject to stockholder approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Four: Approval of the 2019 Equity and Incentive Compensation Plan” for further information.
If the 2019 Incentive Plan is approved by our stockholders, an initial amount of 1,660,000 shares of our common stock will be reserved for issuance under the 2019 Incentive Plan. We will continue to grant equity and cash-based incentives in the ordinary course of business under the 2010 Plan until the 2019 Incentive Plan is approved by our stockholders.
Amended and Restated 2010 Employee Stock Purchase Plan
Our 2010 Employee Stock Purchase Plan, or the 2010 ESPP, is designed to provide our employees with an opportunity to acquire a proprietary interest in our company and thereby, align their interests with the interests of our stockholders and give them an additional incentive to use their best efforts to strive for the long-term success of our company. The 2010 ESPP was adopted by our Board of Directors in August 2010 and approved by our stockholders in October 2010. We initially reserved for issuance 650,000 shares of our common stock under the 2010 ESPP. BeginningAn automatic annual increase will be made on the first day of each of our fiscal years beginning in fiscal 2012 and ending in fiscal 2019, an annual increase will be made equal to the lesser of 500,000 shares, 1% of all shares of our common stock outstanding, or a lesser amount as determined by our Board of Directors. At our 2018 Annual Stockholders Meeting, our stockholders approved an amendment and restatement of the 2010 ESPP to increase the number of shares of common stock available for future awards by 100,000 shares.
The cumulative shares authorized under the 2010 ESPP (including as amended and restated) will be less than 10% of our shares outstanding from time to time, unless a greater number of shares of our common stock are authorized by our stockholders. As of the end of fiscal 2017,2019, there were 380,170147,903 shares of our common stock reserved for issuance under the 2010 ESPP. During fiscal 2017, 302,0852019, 544,886 shares of our common stock were issued under the 2010 ESPP.
2019 Employee Stock Purchase Plan
Our 2019 Employee Stock Purchase Plan, or the 2019 ESPP, is designed to provide our employees with an opportunity to acquire a proprietary interest in our company and thereby, align their interests with the interests of our stockholders and give them an additional incentive to use their best efforts to strive for the long-term success of our company. In July 2019, our Board approved the 2019 ESPP, subject to stockholder approval at the upcoming Annual Meeting of Stockholders. Please see “Proposal Five: Approval of the 2019 Employee Stock Purchase Plan” for further information.
If the 2019 ESPP is approved by our stockholders, an initial amount of 1,500,000 shares of our common stock will be reserved for issuance under the 2019 ESPP.
We pay eachnon-employee director an annual retainer of $60,000 in cash or shares of our common stock at the director’s election, and weelection. We pay the Executive Chairman of our Board of Directors an additional annual retainer of $50,000$300,000 in cash, and should we have a Chairman of our Board of Directors rather than an Executive Chairman, we pay the Chairman an additional annual retainer of $70,000 in cash. We also pay ournon-employee directors an annual retainer for committee service in cash or shares of our common stock at the director’s election as follows:
Committee Chairman | Committee Member | |||||||||||||||
Committee Chairman | Committee Member | |||||||||||||||
Audit Committee | $ | 25,000 | $ | 10,000 | $25,000 | $10,000 | ||||||||||
Compensation Committee | $ | 15,000 | $ | 7,500 | $20,000 | $7,500 | ||||||||||
Nominations and Corporate Governance Committee | $ | 10,000 | $ | 5,000 | $10,000 | $5,000 |
Annual retainers for service on our Board of Directors and committees are paid in quarterly installments.
In addition,Starting in fiscal 2018, ournon-employee directors are eligible to receive annual grants of stock options and DSUs under our 2010 Plan, with each non-employee director eligible to receive one-third of the total value of their equity compensation in the form of stock options, and two-thirds of the total value of their equity compensation in the form of DSUs, for a total estimated value of approximately $190,000.$200,000. Per the terms of our Amended and Restated 2010 Incentive Compensation Plan, ournon-employee directors are not eligible to receive compensatory equity awards exceeding an aggregate grant date fair value of $750,000 in any fiscal year. The total equity value was calculated using the average closing price of our common stock for the three monthsmonth ended September 30, 2016,October 31, 2018 and differs from the accounting value which is based on grant date fair value determined in accordance with ASC Topic 718. We also reimburse ournon-employee directors for expenses incurred to attend Board of Directors and committee meetings.
FISCAL 2019 DIRECTOR COMPENSATION TABLE
Stock option awards to continuing non-employee directors generally vest monthly over the period from the grant date through the subsequent Annual Meeting of Stockholders. DSU awards to continuingnon-employee directors generally vest quarterly over the period from the vesting start date through the subsequent Annual Meeting of Stockholders. We no longer grant stock option awards to our directors. The following table sets forth the compensation for ournon-employee directors for the fiscal year ended June 24, 2017.29, 2019. Employee directors do not receive any additional compensation for service on our Board of Directors.
Fees Earned or Paid | Stock | Total | ||||||||||||||||||||||||||
Director Name | Fees Earned or Paid in Cash(1)($) | Stock Awards(2) ($) | Option Awards(3) ($) | Total ($) | in Cash(1) ($) | Awards(2) ($) | ($) | |||||||||||||||||||||
Francis F. Lee | $ | 110,000 | $ | 121,121 | $ | 56,286 | $ | 287,407 | ||||||||||||||||||||
Nelson C. Chan | $128,253 | $184,613 | $312,866 | |||||||||||||||||||||||||
Kiva A. Allgood(4) | $6,042 | $57,264 | $63,306 | |||||||||||||||||||||||||
Jeffrey D. Buchanan | $ | 80,000 | $ | 121,121 | $ | 56,286 | $ | 257,407 | $82,500 | $184,613 | $267,113 | |||||||||||||||||
Nelson C. Chan | $ | 82,500 | $ | 121,121 | $ | 56,286 | $ | 259,907 | ||||||||||||||||||||
Keith B. Geeslin | $ | 78,750 | $ | 121,121 | $ | 56,286 | $ | 256,157 | $82,500 | $184,613 | $267,113 | |||||||||||||||||
Russell J. Knittel | $ | 65,000 | $ | 121,121 | $ | 56,286 | $ | 242,407 | $70,000 | $184,613 | $254,613 | |||||||||||||||||
Francis F. Lee | $103,750 | $184,613 | $288,363 | |||||||||||||||||||||||||
Richard L. Sanquini | $ | 76,101 | (4) | $ | 121,121 | $ | 56,286 | $ | 253,508 | $72,537 | (5) | $184,613 | $257,150 | |||||||||||||||
James L. Whims | $ | 77,500 | $ | 121,121 | $ | 56,286 | $ | 254,907 | $77,500 | $184,613 | $262,113 |