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
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to |
RAMBUS INC.Rambus Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
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☐ | Fee paid previously with preliminary | |||
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD VIRTUALLY ON APRIL 26, 201828, 2022
To our stockholders:
You are cordially invited to virtually attend the 20182022 Annual Meeting of Stockholders (and any adjournments, postponements or other delays thereof, the “Annual Meeting”) of Rambus Inc. (“Rambus”). The Annual Meeting will be held on:virtually via live webcast at http://www.virtualshareholderineeting.com/RMBS2022 on April 28, 2022 at 9:00 a.m. Pacific Time. You will be able to attend the Annual Meeting online and submit questions during the Annual Meeting by visiting the website listed above. You will also be able to vote your shares electronically during the Annual Meeting. The Annual Meeting will be held online only.
The following matters will be voted on atduring the Annual Meeting:
1. | Election of the three nominees named in the Proxy Statement as Class I directors; |
2. | Ratification of PricewaterhouseCoopers LLP as Rambus’ independent registered public accounting firm for the fiscal year ending December 31, 2022; |
3. | Advisory vote to approve named executive officer compensation; |
and
4. |
Such other business as may properly come before the Annual |
We are not aware of any other business to come before the meeting.Annual Meeting.
These items of business are more fully described in the accompanying Proxy Statement, which is available atwww.proxyvote.com.This notice, the Notice of Internet Availability, the 2017 http://www.proxyvote.com. Our 2022 Annual Report and ouron Form 10-K for the year ended December 31, 2021, the Proxy Statement for our 2018 annual stockholder meeting and the form of proxy card are first being made availablemailed to stockholders on or about March 9, 2018.11, 2022.
Only stockholders of record as of February 28, 2018,March 2, 2022 may virtually attend, vote atshares, and submit questions online during the Annual Meeting.WhetherMeeting. Whether or not you plan to virtually attend the meeting,Annual Meeting, please vote atwww.proxyvote.comhttp://wwwproxyvote.com, , call1-800-690-6903 or complete, sign, date and returnfollow the voting instructions in the Proxy Statement or on your proxy card.Returning the proxy card does NOT deprive you of your right to attend the meeting and to vote your shares at the meeting.Thecard. The Proxy Statement explains proxy voting and the matters to be voted on in more detail.Pleasedetail. Please read ourthe Proxy Statement carefully.Wecarefully. We look forward to your virtual attendance at the Annual Meeting.
By Order of the Board of Directors, |
/s/ |
Senior Vice President, General Counsel and Secretary |
Sunnyvale,San Jose, California
March 9, 201811, 2022
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO VIRTUALLY ATTEND THE MEETING, PLEASE VOTE ATHTTP://WWW.PROXYVOTE.COM,OR AS INSTRUCTED ON THE PROXY CARD, OR THE NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS, CALL1-800-690-6903 OR COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS PROMPTLY AS POSSIBLEPOSSIBLE.
RAMBUS INC.
PROXY STATEMENT
FOR
20182022 ANNUAL MEETING OF STOCKHOLDERS
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RAMBUS INC.
PROXY STATEMENT
FOR
20182022 ANNUAL MEETING OF STOCKHOLDERS
The Board of Directors (the “Board” or “Board of Directors”) of Rambus Inc. (“Rambus,” “we,” “us” or the “Company”) is providing these proxy materials to you for use at our 20182022 Annual Meeting of Stockholders (the(and any adjournment, postponement or other delay thereof, the “Annual Meeting”) to be held virtually via live webcast at http://www.virtualshareholderineeting.com/RMBS2022 on Thursday, April 26, 201828, 2022 at 9:00 a.m. Pacific Time, and at any postponement or adjournment of the meeting.Time. The purpose of the Annual Meeting is described in this Proxy Statement.
Rambus has been conducting its annual stockholder meetings through a virtual live webcast since our annual stockholder meeting held on April 24, 2014. We are continuously exploring technologies and services that will best permit our stockholders to engage with us and exercise their vote and we have continued to conduct annual stockholder meetings on a virtual basis because we believe they are more beneficial than holding a live meeting. For annual stockholder meetings prior to 2014, our annual meetings required us to rent a large facility, provide catered breakfast and snacks, and hire professional security in the Noticeevent of unforeseen incidents that could pose a safety risk. Attendance at our in-person annual stockholder meetings was typically fewer than 10 individuals. Questions were seldom asked and, in most cases, the meeting was concluded as soon as the Board proposals were approved. Compared to this costly and inefficient format, the webcast technology and the mechanics of a virtual meeting offer an attractive alternative. With virtual meetings, we have experienced significant cost savings and are able to conduct annual stockholder meetings at our headquarters in San Jose, California. We believe that a virtual annual meeting of stockholders provides all of the rights and opportunities for stockholders to participate as they would at an in-person meeting, but offers a greater level of flexibility for many of our stockholders who may not be able to attend an annual meeting of stockholders in person. Our virtual meeting provider, Broadridge, permits stockholders to ask questions before and during the meeting. Broadridge administers these questions by providing shareholders information regarding (i) time guidelines for their questions, rules around what types of questions are allowed, and rules for how questions and comments will be recognized and disclosed to meeting participants; (ii) procedures, if any, for posting appropriate questions received during the meeting and the Company’s answers, on their website as soon as is practical after the meeting; (iii) support in addressing technical and logistical issues related to accessing the virtual meeting platform; and (iv) procedures for accessing live technical support to assist in the event of any difficulties accessing the virtual meeting. We believe our stockholders’ increased opportunity to participate in the Annual Meeting virtually should assuage any concerns about disenfranchisement of Stockholders.
our stockholder base as a result of our transition away from The Annual Meeting will be held virtually via the Internet atwww.virtualshareholdermeeting.com/RMBS2018.in-person meetings. You will be able to vote duringattend the meeting.Annual Meeting online, submit questions, and obtain the information noted above by visiting http://www.virtualshareholderineeting.com/RMBS2022.
Our principal executive offices areoffice is located at 1050 Enterprise Way,4453 North First Street, Suite 700, Sunnyvale,100, San Jose, California 94089;95134; our telephone number is (408)462-8000. The Notice of Internet Availability (the “Internet Notice”) was first mailed on or about March 9, 2018 to stockholders of record as of February 28, 2018 and these proxy solicitation materials combined with theour Annual Report for the fiscal year ended December 31, 2017, including our Annual Report on Form10-K for the year ended December 31, 20172021 (the “Form10-K”) were first made availablemailed to you on the Internet,stockholders of record as of March 2, 2022, on or about March 9, 2018.11, 2022. We maintain a website atwww.rambus.comhttp://www.rambus.com/. The information on our website is not a part of this Proxy Statement.
GENERAL INFORMATION ABOUT THE MEETING
Who May Attend | You may virtually attend the Annual Meeting if you owned your shares, either as a stockholder of record or as a beneficial owner
Beneficial | |
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Who May Vote | You may vote at the Annual Meeting if you owned your shares, either as a stockholder of record or as a beneficial owner, as of the close of business on the Record Date. As of that date, we had a total of
As of the Record Date, we had no shares of preferred stock outstanding. | |
Voting Your Proxy | Stockholders of
• voting via the internet at
• voting by telephone at1-800-690-6903; or
• voting by mail
Even if you vote your shares by proxy, you may also choose to virtually attend the Annual Meeting and vote your shares |
Beneficial | ||
Discretionary Voting Power; Matters to be Presented | We are not aware of any matters to be presented |
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Changing Your Vote | Subject to any rules your broker, bank or other nominee may have, you can change your vote or revoke your proxy before the Annual Meeting. If you are a registered stockholder, you may change your vote by: • entering a new vote via the Internet or by telephone by 11:59 p.m. Eastern Time on April 27, 2022; or • virtually attending the Annual Meeting and voting. If you are a registered stockholder, you may also revoke your proxy by providing our Corporate Secretary with a written notice of revocation prior to your shares being voted at the Annual Meeting. Such written notice of revocation should be hand delivered to our Corporate Secretary or mailed to and received by Rambus prior to the Annual Meeting at 4453 North First Street, Suite 100, San Jose, California 95134, Attention: Corporate Secretary. If you are a street name stockholder, you may change your vote by: • submitting new voting instructions to your broker, bank or other nominee pursuant to instructions provided by such broker, bank or other nominee; or • virtually attending the Annual Meeting and voting (to do so, you must have obtained a “legal proxy” from your broker, bank or other nominee giving you the right to vote your shares). If you are a street name stockholder, you must contact your broker, bank or other nominee that holds your shares to find out how to revoke your proxy. | |
Cost of this Proxy Solicitation | We will bear the cost of this proxy solicitation. In addition to soliciting proxies by mail, our directors, officers and employees may solicit proxies in person or by telephone. None of these individuals will receive any additional or special compensation for doing this, but they may be reimbursed for reasonableout-of-pocket expenses. We have also hired Alliance Advisors LLC (“Alliance Advisors”) to help us solicit proxies from brokers, |
expect to pay Alliance Advisors a fee of up to approximately | ||
Meeting Quorum | The Annual Meeting will be held if a majority of our | |
Our Voting Recommendations | When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted
• “FOR” the election of
• “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
• “FOR” the advisory vote to approve named executive officer compensation.
Abstentions and Broker Non-Votes | We treat shares that are voted “ABSTAIN”
• present for purposes of determining whether or not a quorum is present
• entitled to vote on a particular subject matter
In the election of directors, any vote you make that is “ABSTAIN” for any nominee will not impact the election of that nominee. In tabulating the voting results for the election of directors, only “FOR” and “AGAINST” votes are counted.
For the other proposals, an “ABSTAIN” vote is the same as voting against the proposal.
If you hold your common stock through a broker, bank or nominee, the broker, bank or nominee may be prevented from voting these shares |
non-vote are counted for purposes of determining whether a quorum exists, but do not count for or against any particular proposal.
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Procedure for Submitting Stockholder Proposals | Stockholders may present proper proposals for
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Procedure for Submitting Stockholder Nominations |
Our bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our bylaws provide that the only business that may be conducted at an annual meeting is business that is brought (A) pursuant to our proxy materials with respect to such meeting, (B) by or To be timely for our annual meeting of stockholders in 2023, a stockholder proposal not made pursuant to Rule 14a-8 must be received by the Company’s Secretary at the principal executive offices of the Company: • not earlier than December 26, 2022; and • not later than January 25, 2023. In the event we hold our 2023 annual meeting of stockholders more than 30 days prior to or • the 90th day prior to such annual • the |
All notices of proposals by stockholders, whether or not they are intended to be included in our proxy materials, should be sent to Rambus Inc., 4453 North First Street, Suite 100, San Jose, California 95134, Attention: Corporate Secretary/General Counsel. | ||
Availability of Bylaws | A copy of the full text of the bylaw | |
Communication | Our Board of Directors may be contacted by writing to them via
Our process for handling communications to our Board of Directors is as follows:
Any stockholder communications that our Board of Directors receives will first go to our Corporate Secretary/General Counsel, who will log the date of receipt of the communication as well as (fornon-confidential communications) the identity of the correspondent in our stockholder communications log. Unless the communication is marked “confidential,” our Corporate Secretary/General Counsel will review, summarize and, if appropriate, draft a response to the communication. The summary and response will become part of the stockholder communications log that our Corporate Secretary/General Counsel maintains with respect to all stockholder communications. Our Corporate Secretary/General Counsel will then forward the stockholder communication to the member(s) of our Board of Directors (or committee chair, if the communication is addressed to a committee) for review.
Any stockholder communication marked “confidential” will be logged by our Corporate Secretary/General Counsel as “received” but will not be reviewed, opened or otherwise held by our Corporate Secretary/General Counsel. Such confidential correspondence will be forwarded to the addressee(s). |
Annual Meeting Attendance | Members of our Board of Directors are |
“Householding” of Proxy Materials | The | |
Delivery of Proxy Materials | To receive current and future proxy materials, such as annual reports, proxy statements and proxy cards, in either paper or electronic form, please contact Investor Relations at ir@rambus.com or |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE VIRTUALLY HELD ON APRIL 26, 201828, 2022
The Notice and Proxy Statement Annual Report to Stockholders and Form10-K Combo document areis available atwww.proxyvote.com. http://www.proxyvote.com. You are encouraged to access and review all of the important information contained in the proxy materials before voting.
ELECTION OF DIRECTORS
As of the date of this proxy statement, our Board of Directors is composed of eightnine members who are divided into two classes with overlappingtwo-year terms. As of the date of this proxy statement, we have four Class I directors and four Class II directors. At each annual meeting of stockholders, a class of directors is elected for a term of two years to succeed those directors whose terms expire on the annual meeting date. A director serves in office until his or her respective successor is duly elected and qualified or until his or her earlier death or resignation. Any additional directorships resulting from an increase in the number of directors will be distributed among the two classes so that, as nearly as possible, each class will consist of an equal number of directors. Any vacancy occurringmid-term will be filled by a majority of the other current members of the Board of Directors. There is no family relationship between any of our directors. As of the date of this proxy statement, we have four Class I directors and five Class II directors.
Immediately following our 20182022 annual meeting, the number of authorized directors will be reduced from eightnine to seveneight directors, as Mr. Bentley,Mitarotonda, a Class I director, is not standing forre-election and and will no longer serve on our Board of Directors. We thank Mr. BentleyMitarotonda for his service to the Company and our Board of Directors.
Incumbent Nominees for Class I Directors
Name | Age | Principal Occupation and Business Experience | ||||
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Charles Kissner | Mr. Kissner has served as a director since July 2012. Mr. Kissner also currently serves as Chair of our Board of Directors and as a member of our Audit Committee, Corporate Governance/Nominating Committee and Cyber Risk Committee. Mr. Kissner currently serves as chief executive officer of Digital Pillars, a private information systems company. From April 2013 to September 2017, Mr. Kissner served as Chairman of the Board of ShoreTel Inc., a business communications systems company acquired by Mitel Networks Corporation. He joined ShoreTel as a director in April | |||||
Mr. Kissner’s experience as a director and executive of wireless technology and networking companies and, his years of business and leadership experience led the Board of Directors to conclude that he should serve as a director. | ||||||
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Name | Age | Principal Occupation and Business Experience | ||||
2015. Dr. Sayiner was initially appointed to Dr. Sayiner’s experience as chief executive officer | ||||||
The Board unanimously recommends that you vote “FOR” the election to the Board of Directors of each of the nominees proposed above.
Class I Director Not Standing forRe-election
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Incumbent Class II Directors Whose Terms Expire in 2019
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Luc Seraphin | 58 | Mr. Seraphin is President & Chief Executive Officer. With over 30 years of experience managing global businesses, Mr. Seraphin brings the overall vision and leadership necessary to drive future growth for the company. Prior to this role, from October 2015 to June 2018, Mr. Seraphin was the senior vice president and general manager of the Memory and Interface Division, leading the development of the company’s innovative memory architectures and high-speed serial link solutions. From October 2013 to June 2014, Mr. Seraphin also served as Mr. Seraphin’s experience as a semiconductor and technology |
Class I Director Not Standing for Re-election
| Age | Principal Occupation and Business Experience | ||||
James Mitarotonda |
Mr. Mitarotonda is not standing for re-election to |
Name | Age | Principal Occupation and Business Experience | ||||
Emiko Higashi | Ms. Higashi has served as a director since May 2017. |
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Ms. Higashi’s experience in investment banking and finance, as a director of several publicly traded companies, and as a founder and partner of a venture capital firm, led the Board of Directors to conclude that she should serve as a director. | ||||||
Meera Rao | 61 | Ms. Rao has served as a director since August 2019. Ms. Rao currently serves as the chair of our Audit Committee. Ms. Rao also serves on the board of Impinj, Inc., a manufacturer of radio-frequency identification devices and software. She has held several senior executive positions, most recently from January 2011 to March 2016 as Chief Financial Officer at Monolithic Power Systems, a leading company in high-performance analog solutions, and as VP Finance from January 2009 to December 2010. Prior to Monolithic Power Systems, Ms. Rao has held various executive roles at leading technology companies, including Integration Associates Inc from 2004 to 2006, Atrica from 2002 to 2003, Raza Foundries from 2000 to 2002, NVIDIA February 1998 to May 1999 and AMD from 1988 to 1998. Ms. Rao holds a master’s degree in business administration from the University of Rochester in New York. Ms. Rao’s experience as a semiconductor and technology industry executive and her years of finance and operations experience led the Board of Directors to conclude that she should serve as a director. |
Name | Age | Principal Occupation and Business Experience | ||||
Karen Rogge | 66 | Ms. Rogge has served as a director since April 2021. Ms. Rogge currently serves as a member of both our Audit Committee and Cyber Risk Committee. Ms. Rogge is currently the President of the RYN Group LLC, a management consulting business, which she founded in 2010. In addition, since 2021, she has served as a director at Onto Innovation, a semiconductor equipment company, where she also serves on the Audit Committee. Ms. Rogge also serves as a strategic advisor at GigCapital Global, and a director on the board of GigCapital6 Inc., a special purpose acquisition company, focused in the technology sector, where she also serves as chair of the Nominating and Governance Committee. Ms. Rogge previously served on the board of directors at Kemet Corporation, an electronic components company, acquired by Yageo, from 2018 to 2020, where she also served as a member of the Audit Committee and the Compensation Committee. Previously, she served on the board of directors at AeroCentury Corporation, an aircraft leasing company, from 2017 to 2018, where she also served on the Audit Committee and the Compensation Committee. She served as the Interim Vice President and Chief Financial Officer of Applied Micro Circuits Corporation, a semi-conductor company, from 2015 to 2016. Previously, Ms. Rogge served as the Senior Vice President and Chief Financial Officer of Extreme Networks, Inc., a computer network company, from 2007 to 2009. Earlier in her career, she held executive financial and operations management positions at Hewlett Packard Company and Seagate Technology. Ms. Rogge holds a B.S. degree in Business Administration from California State University, Fresno and an M.B.A degree from Santa Clara University. Ms. Rogge’s substantial financial and operational expertise gained from holding executive positions at various publicly traded companies, service on the board of directors for public companies, and deep technology industry experience, led the Board of Directors to conclude that she should serve as a director. | ||||
Sanjay Saraf | 53 | Mr. Saraf has served as a director since July 2018. Mr. Saraf currently serves as the chair of our Cyber Risk Committee and member of our Compensation and Human Resources Committee and Corporate Development Committee. He currently serves as Managing Director, Global Head Payments – Value Added Services at JPMorgan Chase & Co., a leading global financial services firm with assets of $3.2 trillion and operations worldwide. JPMorgan Chase & Co. is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. Prior to JPMorgan Chase & Co., from March 2017 to April 2020, Mr. Saraf was the executive vice president and chief technology officer at YapStone, Inc., a global payments FinTech company where he is responsible for product engineering cyber security, cloud infrastructure and AI/ML platforms. Prior to YapStone, from August 2012 to March 2017, Mr. Saraf was chief technology officer at Western Union (WU) Digital, where he led product engineering and launched web and mobile transaction processing applications leveraging massive data sets and advanced fraud detection based on AI/ML technologies. Prior to WU, Mr. Saraf held |
Name | Age | Principal Occupation and Business Experience | ||||
various senior leadership positions for a period of over ten years at Symantec Corporation, a global leader in enterprise and consumer security products. Prior to his technology career, Mr. Saraf spent several years in technology management consulting firms. Mr. Saraf has won several awards, including a Premier 100 Technology Leader Award by IDG Computerworld in 2017. He holds a B.S. in Engineering from the University of Bombay and a M.S. in Engineering from the University of Wyoming. Mr. Saraf’s experience as chief technology officer of high technology companies, his expertise in the security, cloud engineering and AI/ML platform and his years of business and leadership experience led the Board of Directors to conclude that he should serve as a director. | ||||||
Eric Stang | Mr. Stang has served as a director since July 2008 and
Mr. Stang’s experience as chief executive officer of high technology companies, his prior experience in the memory products market and licensing semiconductor patents, and his years of business and leadership experience led the Board of Directors to conclude that he should serve as a director. |
has no material relationship with us (either directly as a partner, stockholder or officer of an organization that has a relationship with us) and is “independent” under the applicable | ||||
Currently, each of the committees of our Board of Directors is composed of independent directors as follows: | ||||
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Audit Committee: |
Karen Rogge | |||
| Eric Stang (Chair)
Necip Sayiner Sanjay Saraf | |||
Corporate Governance/Nominating Committee: |
Emiko Higashi
Charles Kissner Eric Stang |
Corporate Development Committee: | Necip Sayiner (Chair) Sanjay Saraf Emiko Higashi | |||
Cyber Risk Committee: | Sanjay Saraf (Chair) Charles Kissner Karen Rogge |
Director Qualifications | Except as may be required by rules promulgated by Our directors have deep executive and board leadership experience from tenures at diverse technology companies of various sizes: |
* | Mr. Mitarotonda will serve on the Audit Committee until the completion of the Annual Meeting. |
Our directors and nominees possess a broad range of experience, as follows:
Board Member or Nominee | Select Experience | |
Charles Kissner (Board member since 2012) | • Currently serves as chief executive officer of Digital Pillars • Previously Chairman of the Board at ShoreTel, Inc. and Chairman and CEO of Aviat Networks, Stratex Networks, and President and CEO of Aristacom International | |
Emiko Higashi (Board member since 2017) | • Currently founder and managing director of Tohmon Capital Partners • Previously co-founder and CEO of Gilo Ventures | |
James Mitarotonda (Board member since 2021)* | • Currently the Chairman, President and CEO at Barington Capital Group, L.P. • Previously a director at Avon Products, Inc. * Mr. Mitarotonda is not standing for re-election to the Company’s Board of Directors. | |
Meera Rao (Board member since 2019) | • Currently serves as a director at Impinj, Inc. • Previously CFO of Monolithic Power Systems; VP, Finance of Monolithic Power Systems | |
Karen Rogge (Board member since 2021) | • Currently serves as President of the RYN Group, and Strategic Advisor at GigCapital Global • Currently serves as a director at Onto Innovation and GigCapital6 Inc. • Previously a director at Kemet Corporation and AeroCentury Corporation • Previously served as Interim VP and CFO at Applied Micro Circuits Corporation, SVP and CFO at Extreme Networks, VP of Corporate Finance, Treasurer and PAO at Seagate Technology, and held executive finance and operations positions at Hewlett-Packard | |
Sanjay Saraf (Board member since 2018) | • Currently Managing Director, Global Head Payments, JP Morgan Chase & Co. • Previously EVP and CTO of YapStone, Inc. | |
Necip Sayiner (Board member since 2019) | • Currently serves as a director at Power Integrations, Inc. • Previously served as Executive Vice President and General Manager of Renesas Electronics Corporation • Previously served as President and Chief Executive Officer of Intersil Corporation and Silicon Laboratories |
Board Member or Nominee | Select Experience | |
Luc Seraphin (Board member since 2018) CEO | • Previously Interim CEO; SVP and GM, Memory and Interface Division; and SVP Worldwide Sales and Operations | |
Eric Stang (Board member since 2008) | • Currently Chairman, President & CEO of Ooma, Inc. • Previously Director, CEO, and President of Reliant Technologies; Director, Chairman, CEO and President of Lexar Media |
Board Diversity | The Corporate Governance/Nominating Committee is committed to continuing to identify and recruit highly qualified director candidates with diverse experiences, perspectives, and backgrounds to join our Board of Directors. The table below provides certain information regarding the composition of our Board of Directors. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f). |
Board Diversity Matrix (as of December 31, 2021) | ||||||||||||||||
Total Number of Directors | 9 | |||||||||||||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||||
Part I: Gender Identity | ||||||||||||||||
Directors | 3 | 6 | — | — | ||||||||||||
Part II: Demographic Background | ||||||||||||||||
African American or Black | — | — | — | — | ||||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||||
Asian | 2 | 1 | — | — | ||||||||||||
Hispanic or Latinx | — | — | — | — | ||||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||||
White | 1 | 5 | — | — | ||||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||||
LGBTQ+ | — | |||||||||||||||
Did Not Disclose Demographic Background | — |
Corporate Governance Principles | We are committed to maintaining the highest standards of business conduct and corporate governance, which we believe are essential to running our business efficiently, serving our stockholders’ interests and maintaining our integrity in the marketplace. We have adopted a code of business conduct and ethics |
* Mr. Bentley will serve on the Audit Committee until the completion of the 2018 Annual Meeting.
• Overseeing special investigations into financial and other matters, as necessary.
Our Board of Directors has determined that |
• Retaining and terminating any compensation consultant to assist in the evaluation of CEO or executive officer or director compensation, and approving the consultant’s fees and other terms of service, as well as obtaining advice and assistance from internal or external legal, accounting or other advisors; • Overseeing the Company’s processes for identifying and managing risks arising from its compensation policies and |
directors and executive officers should not have a pecuniary interest in transactions involving us or a customer, licensee, or supplier of the Company, unless such interest is solely a result of routine investments made by the individual in publicly traded companies.
Inthe event that a director or executive officer is going to enter into a related party transaction with a relative or significant other, or with a |
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to Rambus to audit our consolidated financial statements for the fiscal year ending December 31, 2022.
Although ratification by stockholders is not required by law, the Audit Committee has conditioned its appointment of the independent registered public accounting firm upon the receipt of the affirmative vote of a majority of the votes duly cast (virtually or by proxy) during the Annual Meeting.
Notwithstanding its selection, the Audit Committee, in its discretion, may hire a new independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interest of Rambus and its stockholders.
Our History with PricewaterhouseCoopers | PricewaterhouseCoopers LLP (or its predecessor, Coopers & Lybrand L.L.P.) has audited our financial statements since 1991. Representatives of PricewaterhouseCoopers LLP are expected to virtually attend the Annual Meeting to respond to appropriate questions and to make a statement if they so desire. | |
Principal Accountant Fees and Services | The aggregate fees billed for professional accounting services by PricewaterhouseCoopers LLP for the fiscal years ended December 31, 2021 and December 31, 2020 are as follows: |
Fiscal Year Ended December 31, 2020 | Fiscal Year Ended December 31, 2021 | |||||||
Audit Fees (1) | $ | 1,832,732 | $ | 1,896,381 | ||||
Audit-Related Fees (2) | — | $ | 860,450 | |||||
Tax Fees (3) | $ | 83,635 | $ | 89,438 | ||||
All Other Fees (4) | $ | 2,700 | $ | 4,150 | ||||
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Total Fees | $ | 1,919,067 | $ | 2,850,420 | ||||
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(1) | Audit Fees consist of fees for PricewaterhouseCoopers LLP’s professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports. Fees relating to professional services rendered for the audits of the effectiveness of internal control over financial reporting and statutory audits in fiscal 2021 and 2020 are included under “Audit Fees.” |
(2) | Audit-Related Fees consist of fees related to work performed around the 2020 10K/A audit, revision of immaterial prior period error, and acquisitions of AnalogX Inc. and PLDA Group in 2021. |
(3) | Tax Fees primarily relate to tax compliance, tax study, and technical tax advice in both years presented. |
(4) | All Other Fees consist of fees for products and services other than the services described above. During fiscal 2021 and fiscal 2020, these fees related to license PricewaterhouseCoopers LLP’s online accounting and auditing research tool and disclosure checklist. |
Policy on Audit Committee Pre-Approval of Audit and the Permissible Non-Audit Services of Independent Registered Public Accounting Firm | The Audit Committee’s policy is to pre-approve 100% of all audit and permissible non-audit services provided by the independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. | |
Independence of PricewaterhouseCoopers LLP | The Audit Committee has determined that the accounting advice and tax services provided by PricewaterhouseCoopers LLP are compatible with maintaining PricewaterhouseCoopers LLP’s independence. | |
Vote Required | The affirmative vote of a majority of the shares present and entitled to vote during the Annual Meeting will be required to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm. Abstentions are considered votes cast, and thus, will have the same effect as votes “against” the proposal. We do not anticipate any broker non-votes on this proposal, but any such broker non-vote will have no effect on the outcome of this proposal. | |
Recommendation of the Board of Directors | The Board unanimously recommends that you vote “FOR” the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. |
NON-BINDINGADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
WeAsrequired by Section 14A of the Securities Exchange Act, we are asking our stockholders to provide ana non-binding advisory vote to approve the compensation of our named executive officers, including the Compensation Discussion and Analysis, the compensation tables and narrative disclosures as described in this Proxy Statement. The Company currently holds such an advisory vote annually, and this proposal, commonly known as a“say-on-pay” proposal, gives our stockholders the opportunity to express their views on the compensation of our named executive officers.
Please see the Compensation Discussion and Analysis section of this Proxy Statement, the compensation tables and the narrative disclosures that accompany the compensation tables for greater detail about our executive compensation programs, including information about the fiscal year 20172021 compensation of our named executive officers.
We believe that our overall compensation program and philosophy support and help drive the Company’s long-term value creation, business strategy and operating performance objectives. We are again asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement by voting “FOR” the following resolution atduring the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.”
While thissay-on-pay vote is advisory and does not bind the Company to any particular action, the Board of Directors and the Compensation and Human Resources Committee value your opinion. Accordingly, the Board of Directors and the Compensation and Human Resources Committee will consider the outcome of this vote when making future compensation decisions for the Company’s named executive officers.
Approval of this resolution requires the affirmative vote of the holders of a majority of the votes cast in person or by proxy atshares present and entitled to vote during the Annual Meeting. Abstentions are considered votes cast, and thus, will have the same effect as votes “against” the proposal. Broker non-votes will have no effect on the outcome of this proposal.
The Board unanimously recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement.
APPROVAL OF AN AMENDMENT TO THE RAMBUS 2015 EQUITY INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER BY 5,500,000
The 2015 Equity Incentive Plan (the “2015 Plan”) was originally adopted by the Board and approved by our stockholders in 2015. We are asking our stockholders to approve an amendment to the 2015 Plan to increase the number of shares of our Common Stock reserved for issuance thereunder by 5,500,000 shares, so that we can continue to use it to achieve our goals.
Our named executive officers and directors have an interest in this proposal as they are eligible to receive equity awards under the 2015 Plan.
We have historically provided stock options, restricted stock units and other types of equity awards as an incentive to our employees, directors and consultants to promote increased stockholder value. The Board of Directors and management believe that stock options, restricted stock units and other types of equity awards are one of the primary ways to attract and retain key personnel responsible for the continued development and growth of our business, and to motivate all employees to increase stockholder value. In addition, stock options, restricted stock units and other types of equity awards are considered a competitive necessity in the high technology sector in which we compete. Given the highly competitive labor market for employee talent, our Board of Directors and management believe that the ability to continue to grant equity awards will be critical to the future success of Rambus.
Our Board of Directors believes that approval of the amended 2015 Plan will enable us to continue to use the 2015 Plan to achieve employee performance, recruiting, retention and incentive goals. In particular, our Board of Directors believes that our employees are our most valuable assets and that awards granted under the 2015 Plan are vital to our ability to attract and retain outstanding and highly skilled individuals in the extremely competitive labor markets in which we compete. Such awards also are crucial to our ability to motivate employees to achieve our goals.
Key Features of the Amended 2015 Equity Incentive Plan and Our Compensation Practices:
Reserves an additional 5,500,000 shares of our Common Stock for issuance under the amended 2015 Plan.
The 2015 Plan has a 1.5:1 conversion ratio for full-value awards.
A committee of independent directors administers the 2015 Plan.
The 2015 Plan prohibits us from implementing a program to increase or reduce the exercise price of outstanding awards or surrender or cancel outstanding awards for new awards and/or cash.
The 2015 Plan does not provide for automatic vesting of equity awards based solely on the occurrence of a change in control unless awards are not assumed or substituted for in connection with the change in control.
Although the 2015 Plan permits a number of types of equity and cash long-term incentives, we intend to continue to have a long-term incentive program with a strong focus on our performance, including the grant of performance units to our executives which only vest if certain Company performance targets are met.
Non-employee members of the Board of Directors may not be granted, in any fiscal year, awards in excess of limits contained in the 2015 Plan.
We have stock ownership guidelines for our executive officers and Board of Directors.
All employees are prohibited from hedging transactions involving Rambus stock.
Our executive officers are not entitled to any perquisites that are not generally available to employees.
The amended 2015 Plan provides that Awards granted under the 2015 Plan will vest no earlier than theone-year anniversary of the Award’s date of grant, subject to the terms of the 2015 Plan.
The amended 2015 Plan provides that dividends and other distributions payable with respect to shares subject to Awards (including dividend equivalents) will not be paid before the underlying shares vest.
The amended 2015 Plan provides that in the event of a merger or change in control where the successor corporation refuses to assume or substitute for an Award, with respect to Awards with performance-based vesting, all performance goals will be deemed achieved at target levels as to a prorated portion of such Award based on the portion of the applicable performance period that has lapsed through the date of the merger or change in control.
Annual Share Usage | Fiscal Year 2017 | Fiscal Year 2016 | Fiscal Year 2015 | Three-Year Average | ||||||||||||
Stock Options Granted | 558,426 | 500,000 | 362,335 | 473,587 | ||||||||||||
Restricted Stock Units Granted | 2,548,925 | 2,944,444 | 2,547,238 | 2,680,202 | ||||||||||||
Performance Units Granted | 526,471 | 400,004 | 318,640 | 415,038 | ||||||||||||
Total Options, RSUs and Performance Units Granted | 3,633,822 | 3,844,448 | 3,228,213 | 3,568,828 | ||||||||||||
Basic Weighted Average Common Shares Outstanding | 110,198,000 | 110,162,000 | 114,814,000 | 111,724,667 | ||||||||||||
Annual Share Usage | 3.3 | % | 3.5 | % | 2.8 | % | 3.2 | % |
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Name of Individual or Group | Number of Options Granted | Average Per Share Exercise Price | Number of Restricted Stock Units / Performance Units | Value of Restricted Stock Units and Performance Units (1) | ||||||||||||
Named Executive Officers: | ||||||||||||||||
Ronald Black, Chief Executive Officer and President | 197,753 | $ | 12.80 | 617,062 | $ | 7,992,844 | ||||||||||
Rahul Mathur, Senior Vice President, Finance and Chief Financial Officer | 29,213 | $ | 12.80 | 37,296 | $ | 477,389 | ||||||||||
Laura Stark, Senior Vice President, GM, Emerging Solutions Division | 38,202 | $ | 12.80 | 51,602 | $ | 659,121 | ||||||||||
Jae Kim, Senior Vice President, General Counsel and Secretary | 29,213 | $ | 12.80 | 39,194 | $ | 500,753 | ||||||||||
All executive officers, as a group | 294,381 | $ | 12.80 | 745,154 | $ | 9,630,107 | ||||||||||
All directors who are not executive officers, as a group | 40,000 | $ | 12.04 | 82,544 | $ | 1,120,122 | ||||||||||
All employees who are not executive officers, as a group | 224,045 | $ | 13.30 | 2,294,096 | $ | 29,850,148 |
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APPROVAL OF AN AMENDMENT TO THE RAMBUS 2015 EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE THEREUNDER BY 2,000,000
Stockholders are being asked to approve an amendment to the 2015 Employee Stock Purchase Plan (the “Purchase Plan”) to increase the number of shares of our Common Stock reserved for issuance thereunder by 2,000,000. The Board expects that the additional number of shares reserved for issuance under the Purchase Plan will be sufficient to operate the Purchase Plan between three to four years without having to request additional shares. The Board will periodically review actual share consumption under the Purchase Plan and may make an additional request for shares under the Purchase Plan earlier or later than this period as needed.
Our named executive officers have an interest in this proposal as they are eligible to receive options to purchase shares under the Purchase Plan.
Our Board of Directors believes that approval of the amendment to the Purchase Plan to increase the number of shares reserved for issuance thereunder is essential to our continued success, as the Purchase Plan will continue to enable us to achieve employee performance, recruiting, retention and incentive goals. In particular, our Board of Directors believes that our employees are our most valuable assets and that the awards permitted under the Purchase Plan are vital to our ability to attract and retain outstanding and highly skilled individuals in the extremely competitive labor markets in which we compete. Such awards also are crucial to our ability to motivate employees to achieve our goals.
Name of Individual Group | Number of Purchased Shares | Weighted Average Purchase Price ($) | ||||||
Named Executive Officers: | ||||||||
Ronald Black, Chief Executive Officer and President | 2,057 | 10.33 | ||||||
Rahul Mathur, Senior Vice President, Finance and Chief Financial Officer | 4,060 | 10.47 | ||||||
Laura Stark, Senior Vice President, GM, Emerging Solutions Division | — | — | ||||||
Jae Kim, Senior Vice President, General Counsel and Secretary | — | — | ||||||
All executive officers, as a group | 6,117 | 10.42 | ||||||
All employees who are not executive officers, as a group | 609,253 | 10.47 |
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed PricewaterhouseCoopers LLP as the independent registered public accounting firm to Rambus to audit our consolidated financial statements for the fiscal year ending December 31, 2018.
Although ratification by stockholders is not required by law, the Audit Committee has conditioned its appointment of the independent registered public accounting firm upon the receipt of the affirmative vote of a majority of the votes duly cast at the Annual Meeting.
Notwithstanding its selection, the Audit Committee, in its discretion, may hire a new independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interest of Rambus and its stockholders.
Fiscal Year Ended December 31, 2017 | Fiscal Year Ended December 31, 2016 | |||||||
Audit Fees (1) | $ | 1,913,430 | $ | 1,930,325 | ||||
Audit-Related Fees (2) | $ | 436,300 | $ | — | ||||
Tax Fees (3) | $ | 52,339 | $ | 91,190 | ||||
All Other Fees (4) | $ | 3,300 | $ | 3,300 | ||||
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Total Fees | $ | 2,405,369 | $ | 2,024,815 | ||||
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EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2017 with respect to the shares of our common stock that may be issued under our existing equity compensation plans.
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Awards, Options, Warrants and Rights | (b) Weighted- Average Exercise Price of Outstanding Awards, Options, Warrants and Rights | (c) Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column a) | |||||||||
Equity Compensation Plans Approved by Security Holders (1) (2) | 10,171,710 | $ | 9.78 | 5,887,450 | ||||||||
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Total | 10,171,710 | $ | 9.78 | 5,887,450 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the beneficial ownership of our common stock as of February 28, 2018March 2, 2022 for:
each person or group of affiliated persons known by us to be the beneficial owner of more than 5% of our common stock;
each of our named executive officers;
each of our directors;directors and nominees for director; and
all of our executive officers and directors as a group.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares of our common stock that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership is based on 110,533,605110,177,394 shares of our common stock outstanding as of February 28, 2018.March 2, 2022. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our common stock subject to options held by the person that are currently exercisable or exercisable within 60 days of February 28, 2018.March 2, 2022. However, we did not deem such shares of our common stock outstanding for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Rambus Inc., 1050 Enterprise Way,4453 North First Street, Suite 700, Sunnyvale,100, San Jose, California 94089.95134. The information provided in the table is based on our records, information filed with the SEC and information provided to us, except where otherwise noted.
Name or Group of Beneficial Owners | Number of Shares Beneficially Owned | Options Exercisable in 60 days | Percentage of Shares Beneficially Owned % | |||||||||
BlackRock, Inc (1) | 13,678,773 | — | 12.4 | |||||||||
Waddell & Reed Financial (2) | 10,924,506 | — | 9.9 | |||||||||
The Vanguard Group (3) | 10,247,860 | — | 9.3 | |||||||||
Ronald Black | 976,371 | 1,279,245 | 2.0 | |||||||||
Rahul Mathur | 137,800 | 28,071 | * | |||||||||
Laura Stark | 235,590 | 193,447 | * | |||||||||
Jae Kim | 126,387 | 19,158 | * | |||||||||
J. Thomas Bentley (4) | 171,928 | — | * | |||||||||
E. Thomas Fisher | 26,740 | 31,666 | * | |||||||||
Penelope Herscher (5) | 50,811 | — | * | |||||||||
Emiko Higashi | 11,792 | 8,333 | * | |||||||||
Charles Kissner (6) | 59,411 | 40,000 | * | |||||||||
David Shrigley (7) | 52,345 | — | * | |||||||||
Eric Stang (8) | 74,227 | 40,000 | * | |||||||||
All current directors and executive officers as a group (11 persons) | 1,923,402 | 1,639,920 | 3.2 |
Name of Group of Beneficial Owners | Number of Shares Beneficially Owned | Equity Awards Exercisable/ Issuable in 60 days | Percentage of Shares Beneficially Owned | |||||||||
Greater than 5% Stockholders: | ||||||||||||
BlackRock, Inc. (1) | 17,152,046 | — | 15.6 | |||||||||
The Vanguard Group (2) | 11,861,940 | — | 10.8 | |||||||||
Directors, Nominees and Executive Officers | ||||||||||||
Emiko Higashi | 56,625 | 40,000 | * | |||||||||
Charles Kissner (3) | 90,886 | 40,000 | * | |||||||||
James Mitarotonda (4) | 538,638 | — | * | |||||||||
Meera Rao | 22,465 | 25,833 | * | |||||||||
Karen Rogge | 8,303 | — | * | |||||||||
Sanjay Saraf | 44,833 | 37,500 | * | |||||||||
Necip Sayiner | 22,465 | 25,000 | * | |||||||||
Eric Stang (5) | 63,145 | — | * | |||||||||
Sean Fan | 242,787 | — | * | |||||||||
Keith Jones | 54,719 | — | * | |||||||||
Jae Kim | — | — | * | |||||||||
Rahul Mathur | 165,043 | — | * | |||||||||
Luc Seraphin | 326,182 | 14,912 | * | |||||||||
John Shinn | 28,779 | — | * | |||||||||
All current directors, director nominees and executive officers as a group (12 persons) | 1,499,827 | 183,245 | 1.5 |
* | (Less than 1%) |
(1) | Based on information reported by BlackRock, Inc. (“BlackRock”) on Schedule 13G/A filed with the SEC on January 27, 2022. Of the shares of Common Stock beneficially owned, BlackRock reported that, in its capacity as a parent holding company, it has sole voting power over 16,905,736 shares, shared voting power over no shares, sole dispositive power over 17,152,046 shares and shared dispositive power over no shares. BlackRock listed its address as 55 East 52nd Street, New York, NY 10055. |
(2) | Based on information reported by The Vanguard Group (“Vanguard”) on Schedule 13G/A filed with the SEC on February |
(3) |
Includes |
Consists of 530,100 shares |
Includes |
EXECUTIVE OFFICERS OF THE COMPANY
Information regarding our executive officers and their ages and positions as of February 28, 2018, is contained in the table below. Our executive officers are appointed by, and serve at the discretion of, our Board of Directors. There is no family relationship between any of our executive officers.
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COMPENSATION DISCUSSION AND ANALYSIS
Our Compensation Discussion and Analysis (“CD&A”) is designed to provide our stockholders with an understanding of our compensation program in effect for our named executive officers (“NEOs”) who consistconsisted of the following continuing executive officers:officers in 2021:
Ronald Black,Luc Seraphin, Chief Executive Officer and President;
Keith Jones, Vice President, Finance, and Interim Chief Financial Officer;
Sean Fan, Senior Vice President, Chief Operating Officer; and
John Shinn, Senior Vice President, General Counsel, Secretary and Chief Compliance Officer.
Our CD&A will also include discussion and items related to two former executive officers, who are included as NEOs:
Rahul Mathur, Former Senior Vice President, Finance, and Chief Financial Officer;
Laura Stark, Senior Vice President, GM, Emerging Solutions Division; and
Jae Kim, Former Senior Vice President, General Counsel and Secretary.
Mr. Kim tendered his resignation effective February 19, 2021. In accordance with the Company’s established succession plan, the Company appointed John Shinn to the position of Senior Vice President, General Counsel, Secretary and Chief Compliance Officer, effective as of February 19, 2021.
Mr. Mathur tendered his resignation effective November 15, 2021. In accordance with the Company’s established succession plan, the Company appointed Keith Jones to the position of Vice President, Finance, and Interim Chief Financial Officer, effective as of November 15, 2021.
Our CD&A is organized as follows: (i) Executive Summary, (ii) 20172021 Advisory Vote on Executive Compensation and Other Stockholder Engagement, (iii) Our Compensation Philosophy — Pay for Performance, (iv) NEOExecutive Compensation Process, (v) Components of NEOExecutive Compensation, and (vi) Other Policies and Elements of NEOExecutive Compensation.
EXECUTIVE SUMMARYExecutive Summary
Business Performance
Over the past several years, Rambus has transitioned from a pure IP licensing model to one that delivers increasing value to the market through chips, customizable IP cores, and software and services. In line with our growth strategy, we acquired four businesses in 2016 in the fields of mobile payments, smart ticketing, memory buffer chips and SerDes IP cores, and continued to integrate those businesses in fiscal year 2017. We also continued to execute on our traditional patent licensing business by signing key license agreements with AMD, Xilinx, and others, demonstrating our ability to extend our partnerships beyond the DRAM industry.
The table below summarizes our financial progress from 2012 (when Dr. Black became our CEO) to 2017. Our revenue has grown at a compound annual growth rate of 11% over those five years, while EBITDA and pro forma operating income have grown at 19% and 23%, respectively.1
$ in millions | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | CAGR | |||||||||||||||||||||
Revenue | 234 | 272 | 297 | 296 | 337 | 393 | 11 | % | ||||||||||||||||||||
Pro forma EBITDA | 57 | 107 | 133 | 128 | 122 | 137 | 19 | % | ||||||||||||||||||||
Pro forma Oper. Inc. | 44 | 92 | 119 | 115 | 109 | 124 | 23 | % | ||||||||||||||||||||
Cash 12/31 | 203 | 388 | 300 | 288 | 172 | 329 | ||||||||||||||||||||||
Share Repurchase | (100 | ) | (50 | ) | ||||||||||||||||||||||||
Acquisitions | (48 | ) | (226 | ) | ||||||||||||||||||||||||
Debt 12/31 | 173 | 311 | 138 | 138 | 138 | 254 |
Key 2017 financial results included:
$393 million in annual revenue;
$124 million inpro-forma operating income;
$117 million in net cash provided by operating activities;
31.5% operating margin; and
3% share price increase in 2017 and a 28% share price increase over the last three years.
Executive Compensation Highlights
Our compensation mix favors performance-based compensation. Approximately 90% of our CEO’s and on average approximately 75% of our NEOs’ total target compensation was subject to our financial and/or share price performance in 2017.
Our annual incentive compensation program is funded based on the achievement of an objective performance target ofpro-forma operating income. For 2017, annual incentive compensation under our Corporate Incentive Plan (“CIP”) was funded at 106% of target as the Company’s 2017 performance exceeded target.
To further align executive compensation with stockholder interests, approximately 60% of our CEO’s (not including the Strategic Growth Award granted to Dr. Black in 2017 and discussed below) and 40% of our NEO’s 2017 long-term equity incentive awards consisted of performance units, which become eligible for time-based vesting based on the achievement of an objective performance goal ofone-year operating margin. Based on our 2017 operating margin performance, which exceeded target, 112.5% of the target number of performance units granted in 2017 became eligible for time-based vesting.
We awarded Dr. Black a Strategic Growth Award on August 1, 2017 (the “Strategic Growth Award”). The Strategic Growth Award, which is 50% performance-based, has rigorous performance hurdles, focused on revenue growth and share price appreciation. The Strategic Growth Award further incentivizes the retention of a leader whom the Board believes is vital to the future of Rambus.
We made significant changes to our 2018 compensation programs to better align with best practices and respond to stockholder feedback, explained below.
We maintained high governance standards in our executive compensation practices, including best practices with respect to minimum equity ownership guidelines, perquisites, compensation recovery, independent compensation committee advisors and insider trading. See “Other Policies and Elements of NEO Compensation” below.
Compensation and Corporate Governance Practices
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2017 ADVISORY VOTE ON EXECUTIVE COMPENSATION AND OTHER STOCKHOLDER ENGAGEMENT
The advisory vote on executive compensation at our 2017 annual meeting was approved by approximately 77% of the votes cast. This result was well below our desired level and sent a strong message to the Company. During the past 12 months, we have engaged in significant stockholder outreach and made meaningful changes to our executive compensation programs to better align our compensation practices with leading market practices. Since October 2017, we have held ongoing discussions with stockholders representing approximately 66% of our total shares outstanding. Following our discussions with stockholders, we were able to implement several compensation design changes. The majority of these changes took effect for fiscal year 2018. The table below shows the most important feedback that we heard from our stockholders and how we have responded. We will holdsay-on-pay votes annually, as approved by our stockholders in anon-binding advisory vote at our 2017 annual meeting. We will hold the nextsay-on-pay vote at the 2018 annual meeting.
We continue to take stockholder feedback seriously, and acknowledge our long-term commitment to continually improving our pay programs to align pay and performance, and support the Company’s strategic efforts.
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In addition to the changes presented above, the Company continues to ensure that our executive compensation policies and practices align with leading corporate governance policies.
OUR COMPENSATION PHILOSOPHY — PAY FOR PERFORMANCE
Pay Mix
Our compensation programs are designed to align compensation with business objectives and Company financial performance. The objectives of our executive compensation program are to attract, retain, motivate, focus, and reward executives in order to enhance the long-term growth and profitability of the Company, foster stockholder value creation, and align executives’ interests with those of our stockholders. The Compensation Committee reviews executive compensation levels annually and seeks to reward executives for performance of achievement against corporate, business unit, department and individual goals. In its annual executive compensation review, the Compensation Committee also relies on compensation survey and peer company data and considers a balance between pay for performance and retention of executives in a competitive labor market, including a recent hyper-competitive compensation environment for semiconductor and other technology companies, especially in the San Francisco Bay Area. The items below highlight the key components of our executive compensation program and philosophy.
Performance-based equity compensation awards that vest based upon our total stockholder return (“TSR”) relative to the TSR of certain semiconductor index companies over a three-year period to closely align NEO’s interests with those of our stockholders.
Emphasis on performance-based compensation in our pay mix. Approximately 88% of our CEO’s total target compensation, and on average, approximately 78% of our other NEOs’ total target compensation was subject to our financial and/or share price performance in 2021.
Alignment between executive compensation and stockholder interests, achieved by emphasizing long-term compensation in our pay mix. In 2021, approximately 60% of our CEO’s target long-term equity incentive awards and 50% of other NEOs’ target long-term equity incentive awards consisted of performance units as described below.
Close alignment of our annual incentive compensation program (“Corporate Incentive Plan” or “CIP”) with Company performance. Our 2021 CIP program was funded based on the achievement of an objective performance target of pro-forma operating income. Pro-forma operating income performance for 2021 exceeded our target of $190.9 million by achieving pro-forma operating income of $210.5 million, which resulted in the 2021 CIP pool funding at 110.3% of target.
We maintained high governance standards in our executive compensation practices, including best practices with respect to equity ownership guidelines, perquisites, compensation recovery (e.g., clawbacks) and independent compensation committee advisors reviewing the entirety of our executive compensation programs. See “Other Policies and Elements of Executive Compensation” below.
Summary of Corporate Governance and Compensation Practices
The chart below summarizes our corporate governance and compensation practices:
Corporate Governance | Compensation | |
✓ Currently, eight of our nine directors are independent, bringing diverse perspectives from various high performing technology companies. Six directors have been added over the past five years, bringing additional industry and financial expertise to our Board | ✓ There is a strong link between pay and performance | |
✓ Our Board is led by an independent Non-Executive Chairperson | ✓ A significant portion of our NEO’s target compensation is subject to Company financial and/or share price performance | |
✓ We have a thoughtful approach to balanced Board composition, diversity, and Board refreshment | ✓ Generally, no perquisites are provided to our executives that are not available to our broader employee population | |
✓ We regularly review succession plans for our CEO and other senior executives | ✓ We maintain robust stock ownership guidelines with required ownership levels of 4x base salary for the CEO, 2x base salary for other executive officers, and 3x annual cash compensation for directors | |
✓ We conduct a thorough annual review of our compensation programs and whether our programs encourage undue risk taking | ✓ As stated in our Code of Business Conduct and Ethics, all employees and directors are prohibited from engaging in hedging transactions in Rambus shares, including short sales and purchases of put options | |
✓ We retain an independent compensation consultant | ✓ We retain the right to reduce or withhold future compensation based on required restatement or adjustment, and to determine the extent to which recovery of prior compensation (clawback) may be pursued in event of fraud |
Corporate Governance | Compensation | |
✓ We adhere to robust risk management policies, including investment, legal, operational, financial, and strategic risks | ✓ We do not provide tax gross-ups and vesting of outstanding equity awards may only accelerate upon a “double-trigger” following a change in control when applicable | |
✓ We regularly engage with stockholders | ✓ Our executive compensation program is annually submitted to our stockholders for an advisory vote ✓ Our 2015 Plan prohibits the repricing of underwater stock options |
Summary of Our Business Performance
Our strategic objectives are focusing our product portfolio and research around our core strength in semiconductors, optimizing our operational efficiency, and leveraging our strong cash generation to re-invest for growth. We continue to maximize synergies across our businesses and customer base, leveraging the significant overlap in our ecosystem of customers, partners and influencers. The Rambus product and technology roadmap, as well as our go-to-market strategy, is driven by the application-specific requirements of our focus markets.
In 2021, due to the ongoing COVID-19 pandemic and the emergence of various variants, including the Delta and Omicron variants, the global marketplace remained unsettled. Despite such turbulence, Rambus demonstrated great execution and significant product revenue growth. We drove this success by remaining focused on and committed to our customers, careful supply management and the tremendous dedication and agility of the Rambus team worldwide.
Annual product revenue increased 26% year-over-year between 2020 and 2021. Driven by continued gains in market share from our memory interface chips, we recognized record product revenue of $143.9 million in 2021. In addition, our cash provided by operating activities for 2021 was $209.2 million, which was a record for the Company and up 13% as compared to 2020. Silicon IP achieved sustained revenue growth with design-win momentum at tier-1 system on chip (“SoC”) customers and we continued to experience strong execution from the businesses we have acquired over the last several years. We successfully closed key patent licensing agreements with DRAM and SoC manufacturers, solidifying our foundation of sustained cash generation.
2021 Advisory Vote on Executive Compensation and Other Stockholder Engagement
At our 2021 annual meeting of stockholders, held on April 29, 2021, our stockholders approved the advisory vote on named executive officer compensation (“Say on Pay”) by approximately 98% of the votes cast. The Compensation Committee believes that the result of this vote (along with the 2020 advisory vote on executive compensation that was also approved by approximately 98% of the votes cast) affirms our stockholders’ support for our approach to executive compensation. We continued our efforts in stockholder outreach and engagement during 2021 and received no materially significant feedback or recommendations regarding our executive compensation programs. Moreover, given the level of Say on Pay support in April 2021, we have maintained the general overall structure and principal elements of our executive compensation programs in 2021. We will continue to take stockholder feedback seriously and will continue to engage with our stockholders. We hold Say on Pay votes annually and intend to do so again at our 2023 annual meeting.
Our Compensation Philosophy — Pay for Performance
Our compensation programs are designed to align compensation with business objectives, and Company financial performance, and to attract, retain, motivate, focus, and reward executives in order to enhance the long-term growth and profitability of the Company, foster stockholder value creation, and align executives’ interests with those of our stockholders. The principal components of our annual executive compensation program in 20172021 were base salary, annual cash incentive awards, and long-term equity incentive awards.
A substantial portion of our executives’ total compensation is variable and dependent on Company and individual performance. In 2017,fiscal 2021, approximately 90%88% of our CEO’s, and on average approximately 75%78% of our NEOs’, total target compensation was subject to the Company’s financial and/or stock price performance.
FY2017 Target Pay Mix
(% ofThe charts below illustrate the pay mix at target total compensation)for our CEO and other continuing NEOs in 2021*:
* | The chart above titled, “Other NEOs” was calculated based on an annualization of Rahul Mathur’s compensation and does not include compensation for Keith Jones or Jae Kim. |
Executive Compensation Process
The Role of the Compensation Committee
The Compensation Committee is responsible for determining and approving CEO compensation,compensation; approving compensation recommendations for NEOs,the CEO’s direct reports, including all NEOs; recommending to the Board changes to thenon-employee director compensation program,program; approving the salaries, target bonus opportunities, and overall levels of equity to be granted each year,year; and determining the amount of funding that will be available for the CIP, among other duties expressed in its charter. The compensation decisions are based on numerous inputs and independent advice, as laid outset forth below.
In performing these duties, the Compensation Committee evaluates the performance of the CEO, and reviews and evaluates the existing NEO compensation programs. The Compensation Committee has the authority to obtain advice and assistance from internal or external compensation consultants, attorneys, accountants and other advisers. The Board of Directors annually evaluates the independence of its members and has determined thateach non-executive member of the Board of Directors satisfies the relevant criteria for independence.
The Compensation Committee considers multiple factors to ensure that compensation packages are consistent with our pay for performance philosophy and that we remain competitive in the market for talent. Importanttalent, especially in light of a recent hyper-competitive compensation environment. The Compensation Committee considers the following important factors considered in theseas part of its decision-making processes includedprocess: Company performance, individual leadership and performance assessments, market compensation levels, job scope, individual skills and experience, the
relative importance of the individual’s role, internal pay equity, historical pay levels and equity holdings. The Compensation Committee reviewed and approved Mr. Seraphin’s compensation, and Mr. Seraphin was not present for any voting or deliberations regarding his compensation.
The Board of Directors completed an annual comprehensive performance assessment of the then-current NEOs and conducted a review of the CEO’s performance. This assessment included an evaluationof pre-established strategic objectives and review of direct feedback from managers, peers and subordinates.NEO performance against these targets. The Compensation Committee also held an annual joint meeting with the full Board of Directors to review and discuss Company leadership development, performance objectives, and emergency and long-term succession planning.
The Role of the Independent Compensation Consultant
In 2017,Farient Advisors LLC (“Farient”) served as the Compensation Committee continued to retain Semler Brossy Consulting Group, LLC (“SBCG”) to assistCommittee’s independent advisor for purposes of providing compensation consulting services in evaluating executive2021 and director compensation. In addition, SBCG prepared materials and analyses for the Compensation Committee on CEO compensation, including the terms of Dr. Black’s new employment agreement and Dr. Black’s Strategic Growth Award (discussed below). The Compensation Committee reviewed and approved CEO compensation, and the CEO was not present for any voting or deliberations regarding CEO compensation. SBCGhas so served since May 5, 2019. Farient reports directly to the Compensation Committee and works collaboratively with management and the Compensation Committee. Pursuant to applicable SEC rules, the Compensation Committee has assessed the independence of SBCG,Farient and concluded that no conflict of interest existed or exists that would prevent SBCGFarient from independently representingadvising the Compensation Committee. SBCGFarient does not perform othernon-compensation related services for the Company and will not do so without the prior consent of the Compensation Committee. SBCGFarient regularly meets with the Compensation Committee outside the presence of Company management.
The Role of Management
Each year, the CEO and the head of Human Resources present to the Compensation Committee compensation recommendations, based in part on annual performance reviews, and compensation recommendations for the then-current NEOs, excluding the CEO. Evaluation of CEO performance and compensation is determined by the Compensation Committee without the presence or consultation of the CEO. Specifically, the Compensation Committee reviewed and approved Mr. Seraphin’s compensation and Mr. Seraphin was not present for any voting or deliberations regarding his compensation. Management personnel workworks with SBCGFarient to prepare compensation information and assessments for the Compensation Committee’s consideration.
In addition, once the Compensation Committee determines the amount of funding available for our CIP thepool. Our CEO then allocates this funding to each operating or business unit of the Company based on a measurement of each unit’sNEO’s achievement levels against the unit’s specific performance milestones in relation to the Company’s overall performance targets and recommends a specific CIP award for each NEO other than himself. The Compensation Committee reviews and assesses the CEO’s proposed CIP award for each NEO.NEO and also determines the CEO CIP payout.
Peer Group Comparisons
Each year, SBCG,our compensation consultant, together with senior members of executive staff and our Human Resources department, defines and assesses the appropriateness of a group of similarly situated companies, referred to as the Compensation Peer Group. This Compensation Peer Group is used for a variety of purposes, ofincluding benchmarking pay levels, pay programs, relative performance, and pay for performance, and assisting the Compensation Committee to determinein determining whether the total compensation opportunity available to our NEOs is appropriatecompetitive and competitive.
As Rambus has refocusedappropriately geared to deliver value in high growth markets through innovative product portfolios and supporting IP development, it has become increasingly difficult to select suitable peer comparators. Rambus’ addition of data center and mobile edge business, and expansion into new areas, such as Internet of Things (IoT), device security and smart transport make it an increasingly unique company.performance.
The Compensation Committee reviews the Company’s peer group annually to ensure that the group remains appropriate by size, sector, and business fit. The Compensation Peer Group for fiscal year 2017 compensation was approved byfit, among other key competitive factors. During July 2020, the Compensation Committee made changes to the Company’s peer group aimed at finding more comparable companies in July 2016terms of industry, relative size by revenue, business models and consisted of 15product offerings, with such changes to be effective for fiscal 2021 compensation benchmarking. As a result, DSP Group, Inc. and NetScout Systems, Inc. were added for the fiscal year 2021 compensation review cycle and no companies selected based on a number of key attributes, including revenue, technological complexity, industry and business characteristics, market capitalization and number of employees. Appearingwere removed from the Company’s fiscal year 2020 peer group. Set forth below is the Company’s fiscal year 20172021 peer group
as determined by the Compensation Committee.
2017 Peers
For fiscal year 2018, the Compensation Committee made further changes to the peer group in an effort to cover more of the markets where Rambus’ evolving businesses compete, aiming to diversify away from more pure-play semiconductor peers. Dolby Laboratories, Bottomline Technologies, and Universal Display Corp. were added to the peer group. Applied Micro Circuits, Cavium, DSP Group, and FormFactor were removed for the fiscal year 2018 peer group.
The fiscal year 20182021 peer group spans system software, semiconductor products, technology licensing and patent licensing sectors, as shown below:
2021 Peers
Ambarella, Inc. DSP Group, Inc. Inphi Corporation InterDigital, Inc. Lattice Semiconductor Corporation | MACOM Technology Solutions Holdings, Inc. | Power Integrations, Inc. Semtech Corporation Silicon Laboratories Inc. Universal Display Corporation Xperi Corporation | ||
MaxLinear, Inc. | ||||
Monolithic Power Systems, Inc. | ||||
NeoPhotonics Corporation | ||||
NetScout Systems, Inc. |
In addition, the Compensation Committee reviews Radford survey data, including a broad range of industry competitors to supplement the peer group information. The survey was selected to represent pay levels for positions of comparable responsibility within companies of comparable size to Rambus.
COMPONENTS OF NEO COMPENSATIONComponents of Executive Compensation
The Company’s fiscal year 20172021 executive compensation program consisted of the following components:
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Annual Base Salary
For 2017,2020, Mr. Seraphin received a base salary increase, primarily based on market compensation data and his individual performance. For 2021, and after reviewing market compensation data, the Compensation Committee approved increases indid not increase Mr. Seraphin’s base salary forDr. Blackfrom 2020 levels. During 2020, Messrs. Mathur, Kim and Fan
received increases to reflecttheir base salaries, reflecting individual performance and a review of market compensation levels. Ms. StarkFor 2021, and Mr. Kim also received increases to theirafter reviewing market compensation data, the Compensation Committee did not increase the base salaries for each of Messrs. Mathur, Kim and Fan from 2020 levels. The following shows the NEOs’ base salary amounts for 2021 and 2020, including the percentage change from the prior fiscal year. Mr. Jones was appointed as Vice President, Finance, and Interim Chief Financial Officer effective as of November 15, 2021 and continued to receive his then-current annual base salary in his new role. Additionally, during his service as Vice President, Finance, and Interim Chief Financial Officer (and for at least a three month period), Mr. Jones will receive a monthly stipend of $6,250 as additional compensation to reflect individual performance,his increased responsibilitiesduties to the Company. Mr. Shinn was appointed as Senior Vice President, General Counsel and Secretary effective as of February 19, 2021, and received an increase to his base salary in connection with his appointment based on a review of market compensation levels. Mr. Mathur did not receive an increasedata. The amount shown in the table below reflects his increased 2021 base salary level for 2017, given his hire in October 2016. The following shows the NEOs base salary amounts for 2017:salary.
Executive | 2017 Base Salary | 2016 Base Salary | % of Base Salary Increase from 2016 | |||||||||
Ronald Black | $ | 555,000 | $ | 515,000 | 7.8 | % | ||||||
Rahul Mathur | $ | 330,000 | $ | 330,000 | 0 | % | ||||||
Laura Stark | $ | 325,000 | $ | 300,000 | 8.3 | % | ||||||
Jae Kim | $ | 330,000 | $ | 300,000 | 10 | % |
2021 Base Salary | 2020 Base Salary | Percentage Change | ||||||||||
Executive Officers: | ||||||||||||
Luc Seraphin | $ | 575,000 | $ | 575,000 | 0 | % | ||||||
Keith Jones | $ | 324,571 | * | $ | 293,000 | 10.8 | % | |||||
Sean Fan | $ | 480,000 | $ | 480,000 | 0 | % | ||||||
John Shinn | $ | 325,000 | $ | 297,973 | 9.1 | % | ||||||
Former Executive Officers: | ||||||||||||
Rahul Mathur | $ | 365,000 | $ | 365,000 | 0 | % | ||||||
Jae Kim | $ | 365,000 | $ | 365,000 | 0 | % |
* | As noted above, during his service as Vice President, Finance, and Interim Chief Financial Officer (and for at least a three month period), Mr. Jones will receive a monthly stipend of $6,250. |
Annual Cash Incentive Compensation — Corporate Incentive Plan (CIP)
2017 CIP
For 2017, the Compensation Committee approved an increase in CIP targets for Dr. Black, Ms. Stark and Mr. Kim based on the Compensation Committee’s assessment of individual performance, responsibilities and market compensation levels. Mr. Mathur did not receive an increase in his CIP target for 2017, given his hire in October 2016. The following shows the 2017 CIP targets relative to 2016 CIP targets:
2017 CIP Target | 2016 CIP Target | |||||||||||||||
Executive | 2017 CIP Target | % of Base Salary | 2016 CIP Target | % of Base Salary | ||||||||||||
Ronald Black | $ | 721,500 | 130 | % | $ | 618,000 | 120 | % | ||||||||
Rahul Mathur | $ | 270,000 | 82 | % | $ | 270,000 | 82 | % | ||||||||
Laura Stark | $ | 310,000 | 95 | % | $ | 300,000 | 100 | % | ||||||||
Jae Kim | $ | 270,000 | 82 | % | $ | 230,000 | 77 | % |
Consistent with previous years, annual cash incentive bonuses with respect to 2017 performance werethe Company’s fiscal year 2021 CIP program was based on the achievement of an objective performance goal ofpro-forma operating income. ThisThe Company believes this measure provides a meaningful measure of core financial performance and supports our short-term business objectives, which complements the measure of operating margin that we use for our performance unit awards (discussed later under “Long Term Equity Incentive Compensation”) that promotes growth and cost discipline.
Pro-forma operating income is anon-GAAP measure that consists of GAAP operating income, excludingadjusted for stock-based compensation expense, amortization expense, certain acquisition related expenses, retention bonuses, restructuring expenses, impairment charges,non-cash interest expense and certain otherone-time or extraordinary expenses or credits.credits and, as described in the next paragraph, was also adjusted for Customer Licensing Income (“CLI”). Otherone-time or extraordinary expense or income items may be excluded frompro-forma operating income as determined by the Compensation Committee.
In addition, consistent with prior years, the fiscal year 2021 CIP achievement metric of pro-forma operating income was also adjusted for CLI. CLI represents the Company’s reported financial results adjusted for licensing billings. Licensing billings is an operational metric that reflects amounts invoiced to the Company’s patent and technology licensing customers during the period and was chosen because it provides a measure comparable to prior periods that more closely matches the Company’s cash from operations, and provides meaningful profitability metrics.
For 2021, each of Messrs. Seraphin’s and Fan’s CIP targets remained the same from the 2020 CIP targets at 100% and 80% of his base salary, respectively. Mr. Shinn’s 2021 CIP target increased from $145,750 in 2020 to $162,500 in 2021, and Mr. Jones’ 2021 CIP target decreased from $146,500 in 2020 to $129,828 in 2021. The following table shows the 2021 CIP targets for our NEOs with the 2021 CIP target for Mr. Shinn based on his 2021 CIP target after his appointment to his new position. Following his appointment to Vice President, Finance, and Interim Chief Financial Officer, Mr. Jones continued to be eligible to receive his then-current annual target
bonus. No additional annual incentive opportunity was provided to Mr. Jones for serving as Vice President, Finance, and Interim Chief Financial Officer.
2021 CIP Target | ||||||||
2021 CIP Target | % of Base Salary | |||||||
Executive Officers: | ||||||||
Luc Seraphin | $ | 575,000 | 100 | % | ||||
Keith Jones | $ | 129,828 | 40 | % | ||||
Sean Fan | $ | 384,000 | 80 | % | ||||
John Shinn | $ | 162,500 | 50 | % | ||||
Former Executive Officers: | ||||||||
Rahul Mathur | $ | 273,750 | 75 | % | ||||
Jae Kim | $ | 273,750 | 75 | % |
To align payouts with Company performance, CIP funding can range from 0% to 200% of target.target with a threshold of $0 (paying at 0% of target) and a maximum pro-forma operating income target of $381.8 million (paying at 200% of target), with awards interpolated for performance between discrete points. In accordance with the plan, our 20172021 CIP funding was measured atmid-year based on estimated expectations of the full year’s achievement against the performance target. The measurement may resultresulted in a progress payment toward the full year target payment. Final payments for fiscal 20172021 reflected actual Company performance in 2017,2021, net of anythe mid-year progress performance payment. The 20172021 performance targets and results ofpro-forma operating income were as follows:
Target | Actual Performance | CIP Funding | ||||||
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Despite a moreThe 2021 target was challenging, CIP performance target of $117M, relativeespecially due to supply chain constraints that needed to be managed continually as well as the 2016 goal of $103M andstructural decline in our 100% margin patent licensing revenue. Our product revenue, driven by continued market momentum for our memory interface chips, increased as compared to 2020 allowing us to achieve our actual performance of $109M, the Company achieved pro forma operating income of $124M, resulting in a 106% CIP pool funding.performance.
Individual CIP payouts for then-current NEOs may vary basedvaried as identified below on an assessment of individual performance relative to corporate goals and metrics. Individual executive performance may be factored into the performance of his or her division, business unit or other area of responsibility. In 2017, our NEOs participated in the 2017 CIP for their annual cash incentive compensation on the same terms as other participants, and payouts to our NEOs were based on the same percentage of CIP pool funding (106%).
2017 CIP Target | 2017 CIP Payouts | |||||||||||||||
Executive | 2017 CIP Target | % of Base Salary | Total 2017 CIP Payout | % of Total Target CIP | ||||||||||||
Ronald Black | $ | 721,500 | 130 | % | $ | 764,790 | 106 | % | ||||||||
Rahul Mathur | $ | 270,000 | 82 | % | $ | 286,200 | 106 | % | ||||||||
Laura Stark | $ | 310,000 | 95 | % | $ | 328,600 | 106 | % | ||||||||
Jae Kim | $ | 270,000 | 82 | % | $ | 286,200 | 106 | % |
Additionally, the Compensation Committee gave Dr. Black discretion to increase CIP payouts to each of Messrs. Mathur and Kim and Ms. Stark by up to 2%; and in February 2018,payout amounts based on achievement of specific individual goals. Individual goals may be quantitative, milestone-based or project-based. Mr. Seraphin’s performance is discussed and determined by the Compensation Committee with active consultation with the Board. Individual performance of the other then-current NEOs is determined by the CEO, with active consultation and discussion with the Compensation Committee and its consultant, Farient. The Company retains the flexibility to exercise discretion in determining bonus amounts based on individual performance metrics, eachand exercised this discretion in 2021. Mr. Kim did not receive any CIP payouts
for 2021, as he was not employed by the Company on the dates of those NEOs were awardedpayment and therefore was not eligible. Mr. Mathur received a CIP payout of $109,500 for the first half of 2021.
2021 CIP Payout | ||||||||||||||||||||
2021 CIP Payout | 2021 CIP Target | 2021 OP Funding | 2021 Individual Performance | % of Base Salary | ||||||||||||||||
Executive Officers: | ||||||||||||||||||||
Luc Seraphin | $ | 663,000 | $ | 575,000 | $ | 634,225 | 105 | % | 115 | % | ||||||||||
Keith Jones | $ | 132,931 | $ | 129,828 | $ | 143,200 | 93 | % | 41 | % | ||||||||||
Sean Fan | $ | 423,600 | $ | 384,000 | $ | 423,552 | 100 | % | 88 | % | ||||||||||
John Shinn | $ | 187,000 | $ | 162,500 | $ | 179,238 | 104 | % | 58 | % | ||||||||||
Former Executive Officers: | ||||||||||||||||||||
Rahul Mathur | $ | 109,500 | $ | 273,750 | $ | 301,946 | 36 | % | 30 | % | ||||||||||
Jae Kim | $ | — | $ | 273,750 | $ | 301,946 | 0 | % | 0 | % |
Additional Bonus Payments
As an incentive for Mr. Jones to accept the position of Vice President, Finance, and Interim Chief Financial Officer, he will receive a $150,000 retention bonus on the date that is twelve months from November 15, 2021, which is the effective date of his employment agreement, subject to Mr. Jones’ continued service with the Company between such increase.effective date and such bonus payment date.
Long Term Equity Incentive Compensation
Our equity incentives encourage the achievement of superior results over time and align the interests of our executive officers and stockholders because the value of the equity incentives is based on the priceperformance of the Company’s stock. Our equity awards are subject to vesting provisions to encourage executive officers to remain employed with us. To determine annual equity awards with respect to a completed fiscal year, the Compensation Committee reviews each then-current NEO’s performance and contribution during such year, as well as current market information, external competitive circumstances, overall equity ownership and vesting schedules of existing equity held by theeach NEO.
20172021 Equity Awards
NEO annualBased on its review of current market practices and the intended balance between a focus on performance and executive retention in a competitive employment market, the Compensation Committee determined that a mix of RSUs and PSUs without options would provide more appropriate incentives for Company NEOs, including the Company’s CEO. Annual equity awards granted in February 20172021 to our then-current NEOs represented a mix of stock options, RSUs and performance units and RSUs as an incentive for share price growth and financial performance as shown below.
Performance Units | Restricted Stock Units | Stock Options | ||||||||||
CEO | 60 | % | 20 | % | 20 | % | ||||||
NEOs | 40 | % | 40 | % | 20 | % |
The program was designed such that 80% of the value of the equity awards (options and performance units) granted to our Chief Executive Officer in 2017 (other than Dr. Black’s Strategic Growth Award) was subject to both the risk of the Company’s financial and stock performance and 60% of the value of the equity awards (options and performance units) granted to our other NEOs in 2017 was subject to both the risk of the Company’s financial and stock performance.
With respect to performance unit awards, a target number of shares of our common stock subject to such units was awarded to each of our NEOs and such units became eligible for time-based vesting based on the Company’s operating margin for the fiscal year period in which the performance unit was awarded. Operating margin is a key measure of both growth and cost discipline, which complements our annual CIP bonus plan’s measure ofpro-forma operating income.
The ultimate number of shares that become eligible for time-based vesting can range from 0% to 150% of target depending on performance relative to target over the applicable period. Time-based vesting takes place after the performance level is achieved and determined to provide additional retention value. All earned shares that become subject to time-based vesting, vest on the third anniversary of the date of grant, subject to continued service. The performance units are designed to reward performance by linking grants to an objective Company performance measure while promoting employee retention through subsequent time-based vesting.
In 2017, the Company granted the following performance units:
Executive | Threshold (50% of Target) | Target | Maximum (150% Target) | |||||||||
Ronald Black (1) | 94,692 | 189,384 | 284,076 | |||||||||
Rahul Mathur | 9,324 | 18,648 | 27,972 | |||||||||
Laura Stark | 12,194 | 24,388 | 36,582 | |||||||||
Jae Kim | 9,324 | 18,648 | 27,972 |
Performance Units | Restricted Stock Units | |||||||
CEO | 60 | % | 40 | % | ||||
NEOs | 50 | % | 50 | % |
The following table is a summary of equity awards (in number of shares) granted during February 2021 to our then-current NEOs. For the dollar values associated with such grants, please see the Summary Compensation Table.
PSU Grant at Target | RSU Grant | |||||||
Executive Officers: | ||||||||
Luc Seraphin | 110,655 | 73,770 | ||||||
Sean Fan | 38,422 | 38,422 | ||||||
Former Executive Officers: | ||||||||
Rahul Mathur | 30,737 | 30,737 | ||||||
Jae Kim | 25,614 | 25,614 |
In 2016, we achievedFebruary 2021, prior to his appointment to his new role, Mr. Shinn received an operating marginequity award grant from the Company based on his then-current role with the Company. In connection with his appointment to Senior Vice President, General Counsel, Secretary and Chief Compliance Officer, Mr. Shinn entered into an equity award cancellation agreement whereby he agreed to cancel his February 2021 award. Based on its review of 32%, versus 30% target, resultingcurrent market practices and the intended balance between a focus on performance and executive retention in a 116.7% payout. The operating margin target for 2017 was again set at 30%, given the Company’s continuing transition from patent licensing to products and services. The 2017 performance unit targets and results of operating margin were as follows:
Target | Actual Performance | Achievement | ||
30% | 31.5% | 112.5% |
As a result of these performance unit achievements, individual NEOs became eligible for time-based vesting in the following share amounts:
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CEO Special Equity Award
Dr. Black received aone-time special equity award of RSUs with an initial estimated value of $4,400,000competitive employment market, on August 1, 2017, in connection with the renewal of his employment agreement (the “Strategic Growth Award”). The Strategic Growth Award has both a performance-based component (the “Performance RSUs”) and a time-based component (the “Time-Based RSUs”) with 50% of the Performance RSUs (assuming target level of performance) eligible to vest only upon achievement of performance goals, and 50% of the Time-Based RSUs scheduled to vest subject to Dr. Black’s continuing service to the Company.
Under Dr. Black’s leadership, the Company continues to transition from a pure IP licensing model to one that delivers increasing value to the market through chips, customizable IP cores, software and services. The Company is now positioned to move toward a true growth strategy, actively pursuing profitable growth, organically and inorganically. In order to further support this transition and align with our current performance imperatives of long-term revenue growth and increased shareholder value,February 17, 2021, the Compensation Committee awarded Dr. BlackMr. Shinn the Strategic Growth Award.following equity awards (in number of shares). The RSUs will vest in four equal annual installments with a vesting commencement date on February 19, 2021, subject to continued service through the applicable vesting period. For the dollar values associated with such grants, please see the Summary Compensation Table.
The Strategic Growth Award, which is 50% performance-based, has rigorous performance hurdles, focused
PSU Grant at Target | RSU Grant | |||||||
Executive Officers: | ||||||||
John Shinn | 11,332 | 11,332 |
In February 2021, prior to his appointment to his new role, Mr. Jones received an equity award grant from the Company based on revenue growth and share price appreciation. The award further incentivizes the retention of a leader whom the Board believes is vital to the future of Rambus. Finally, the Board believes it is appropriate to provide Dr. Blackhis then-current role with the opportunity to participate inCompany. For the shareholder value created if Rambus is able to meet these aggressive revenue growth goals.dollar values associated with such award, please see the Summary Compensation Table. Mr. Jones did not receive any additional equity awards for his service as Vice President, Finance, and Interim Chief Financial Officer.
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When considering the Strategic Growth Award, the Board and the Compensation Committee, with advice and input from SBCG, considered Dr. Black’s critical role in leading the Company through a large-scale transformation during his tenure as CEO. Since Dr. Black joined the Company in 2012, the Company has recognized significant increases in revenue, market value and total shareholder return. As Dr. Black is vital to the continued success of the Company, the Board and the Compensation Committee felt it appropriate to grant the Strategic Growth Award as an incentive to Dr. Black to remain with the Company and to provide Dr. Black an opportunity to participate in stockholder value creation if the Company is able to meet aggressive performance goals. The Strategic Growth Award was designed to motivate and incentivize Dr. Black to drive the long-term growth of the Company and to align his financial interests with those of our stockholders.
When determining the size of the Strategic Growth Award, the Board and the Compensation Committee considered a number of factors. In December 2015,fiscal 2021, the Company granted retention oriented equity awards to its executives, but did not award a retention award to Dr. Black. Dr. Black did not receive a retention award in December 2015 because the December 2015 awards vested solely based on continued service and the Board and the Compensation Committee wanted any potential award to Dr. Black to also include meaningful performance requirements. Additionally, at the time of the 2015 grants, Dr. Black had existing performance-based option awards and the Board and the Compensation Committee did not want overlap with the performance-based option awards. In July 2017, despite outstanding Company performance, Dr. Black forfeited 595,000 shares of performance-based option awards because the Company did not achieve the extremely aggressive stock price hurdles associated with such awards ranging from $15.00 to $20.00 per share. The Board and the Compensation Committee considered the fact that Dr. Black did not receive a retention grant in December 2015 and the expiration of the performance-based option awards when calculating the number of shares subject to the Strategic Growth Award.
The Performance RSUs that become eligible to vest following the satisfaction of the performance criteria (the “Eligible RSUs”) will vest on December 31, 2019 (or earlier upon a change of control of the Company or upon a
qualifying termination of Dr. Black’s employment). If the performance goals are not achieved, Dr. Black will not vest in any of the Performance RSUs. Dr. Black must remain employed through the end of the performance period in order to vest in the Eligible RSUs. If the Company undergoes a change of control or Dr. Black’s employment is terminated without cause, apro-rata portion of the Eligible RSUs will vest upon the closing of the change of control or qualifying termination, as applicable, based upon the number of completed months between January 1, 2017 and the closing of the change of control or termination date, as applicable. In the event of a change of control, any remaining Eligible RSUs will be scheduled to vest on each December 31 remaining in the performance period, subject to any accelerated vesting provisions set forth in the Agreement. In the event of a qualifying termination of employment outside of the context of a change of control, pursuant to the terms of the Agreement, Dr. Black will receive 12 months additional vesting of any Eligible RSUs.
2018 CEO Compensation
Based on stockholder feedback, the Company has committed to reducing the CEO’s ongoing annual target compensation levels to the 75th percentile of the compensation peer group, and maintaining this relative positioning in the future. For fiscal year 2018, the CEO’s target annual CIP opportunity was reduced from 130% of base salary to 120%. Further, the target annual equity award was reduced by approximately $224,000. We exclude the Strategic Growth Award, granted during fiscal year 2017 from the target compensation calculations below, as the award is not a component of the CEO’s ongoing target annual compensation.
The fiscal year 2018 CEO target annual equity award mix is 60% performance shares, 20% restricted stock units and 20% stock options, consistent with the fiscal year 2017 award.
Fiscal Year 2017 | Fiscal Year 2018 | |||
Base Salary | $555,000 | $555,000 | ||
Annual CIP Target | $721,000 (130% of salary) | $666,000 (120% of salary) | ||
Target Annual Equity Award | $4,400,000 | $4,176,000 | ||
Target Total Compensation | $5,676,000 | $5,397,000 |
2018 CIP and Long-Term Incentives
Due to stockholder feedback, the continued planned evolution of our compensation programs and changes in accounting rules, we have made material design changes to our fiscal year 2018 CIP and fiscal year 2018 performance unit program.
2018 CIP
Effective January 1, 2018, the Company adopted Accounting Standards UpdateNo. 2014-09, Revenue from Contracts with Customers in Accounting Standards Codification Topic 606 (“ASC 606”),which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition (“ASC 605”). While the Company expects the adoption of ASC 606 to materially impact the timing of revenue recognition for itsfixed-fee intellectual property licensing arrangements, the Company does not expect to have a material impact on its cashflow from operations or the underlying financial position of the Company. The Company is still assessing the impact that the adoption of ASC 606 will have on its other revenue streams. Under the new accounting rules, while it is likely that the Company’s reported revenue will become more volatile, the Company does not expect changes to the timing of billings or cash collection from its licensing arrangements.
To compensate for these changes in accounting rules, the fiscal year 2018 CIP achievement metric will be changed to Customer Licensing Income (“CLI”). CLI represents the Company’s reported financial results adjusted for licensing billings. Licensing billings is an operational metric that reflects amounts invoiced to the Company’s patent and technology licensing customers during the period. For example, for fiscal year 2017, licensing billings was consistent with the royalties revenue amount reported under ASC 605, though there were timing differences on a quarterly basis. As the adoption of ASC 606 will materially impact the timing of revenue
recognition for the Company’sfixed-fee intellectual property and minimum guarantee licensing arrangements, implementing the use of the licensing billings metric as a substitute for royalty revenue in the Company’s fiscal year 2018 CIP and performance unit programs,will provide a measure comparable to prior periods that more closely matches the Company’s cash from operations, and provides meaningful profitability metrics.
We are confident that CLI provides a measurement consistent with prior years that will allow Company executives to remain focused on company performance, without being impacted by accounting changes.
2018 Performance Units
In fiscal year 2018, the Company will grant to itsthen-current NEOs performance units with a three-year performance period that are eligible to vest upon the completion of the performance period or as otherwise provided in the award agreement. The fiscal 2021 performance units vest solely based upon the Company’s relative TSR to the TSR of the SOX semiconductor index companies, excluding certain companies from that index focused on equipment and systems used in the production of semiconductors (the “Equipment Companies”). The SOX semiconductor index companies minus the Equipment Companies was chosen as the benchmark because it best reflects the volatility and trading patterns of our common stock. The Compensation Committee decided to retain the plan design and structure of the 2020 performance units granted in February 2020. Accordingly, the plan design and structure of the 2021 performance units is the same as the 2020 performance units, including a three-year performance period.
The performance units will vest based upon the achievement of relative TSR (with a 100% weighting) as set forth below, with a relatively wide point spread to ensure relevance throughout the performance period:
Performance Level |
TSR Percentage Point Spread Above / |
Payout (Percentage of Target Shares) (2) | |||||
Max | ≥ +25% | 200% | |||||
Target | 0% | 100% | |||||
Threshold | -15% | 25% | |||||
< Threshold | < -15% | 0% |
(1) | A 60-day trailing average stock price will be used to calculate TSR |
(2) | Will be interpolated for performance between discrete points |
2019 Performance Units
In fiscal 2019, we granted our then-current NEOs performance units with a three-year performance period that would vest in full upon the completion of the performance period. The performance units will vest based upon the achievement of compound annual growth of Customer Licensing Income (“CLI”) annual growth over the performance period. The initial payout willwould then be modified+/-25% based on the Company’s TSR ranking relative to ourits compensation peer group.
3-Year Performance Period CLI CAGR (%) | x | +/- 25% 3-year Relative TSR Modifier | = | Total Payout (0%- 200% of Target) |
AnnualThe performance period for the performance units granted in fiscal 2019 ended as of December 31, 2021. The Compensation Committee certified performance and vesting for the NEOs based on the following pre-determined payout scale: compound annual CLI growth of 5% results in 50% of target payout. Each additional 1% compound annual growth results in 10% of the target number of performance units vesting, up to a maximum of 160% of target performance units at 16% compound annual growth. If compound annual CLI growth is below 5%, the performance units are forfeited.
At the end of the performance period, if Rambus’the Company’s TSR is in the top third of the peer group, the payout number of shares will be multiplied by 125%; middle third performance will have no additional impact on payout, and bottom third performance will have a negative 25% impact. Please see
In December 2019, the chart belowCompensation Committee in consultation with Farient and the Company’s outside legal counsel held meetings to determine how to treat the sale of the Payment and Ticketing business to Visa in connection with the performance metrics in the 2019 PSUs. After reviewing the historical context as a basis for an illustrative example.their determination, the Compensation Committee determined and clarified that the revenues as originally forecasted for such Payments and Ticketing businesses as part of the three-year performance measurement period will continue to be included for purposes of calculating achievement toward the compound annual CLI growth targets associated with the 2019 PSUs.
CLI Annual Growth Rate | CLI Payout Result | Range of Potential Payouts | ||
<5% | 0% | 0% | ||
5% | 50% | 38%-63% | ||
10% | 100% | 75%-125% | ||
16% | 160% | 120%-200% | ||
>16% | 160% | 120%-200% |
The performance outcome for the fiscal 2019 performance units will be weighted at 60%was CLI growth of our long-term incentives10.30% which resulted in 103% of target payout. The Company’s TSR during the performance period was in the middle tier of its compensation peer group resulting in the payout number of shares being multiplied by 100%. The Compensation Committee certified performance and vesting of the 2019 performance units for Dr. Black, (increased from 50% for fiscal year 2016),the NEOs who held 2019 performance units as follows:
NEO | Target Number of 2019 Performance Units (Shares) | CLI Multiplier | TSR Modifier | Payout (Shares) | ||||||||||||
Luc Seraphin | 172,500 | 103 | % | 100 | % | 177,675 | ||||||||||
Sean Fan | 112,782 | 103 | % | 100 | % | 116,165 | ||||||||||
Former Executive Officers: | ||||||||||||||||
Rahul Mathur | 62,500 | 103 | % | 100 | % | — | ||||||||||
Jae Kim | 53,125 | 103 | % | 100 | % | — |
Pursuant to Mr. Fan’s offer letter, dated as of August 9, 2019, he received an award of 112,782 performance units under the Company’s 2019 Inducement Plan.
Other Policies and 40%Elements of our long-term incentives for our NEOs.Executive Compensation
OTHER POLICIES AND ELEMENTS OF NEO COMPENSATION
Benefits and Perquisites
We do not provide any perquisites to NEOsour executives that are not generally available to the broadbroader employee population, with the exception of termination benefits for Mr. Seraphin and travel reimbursements to Dr. Black pursuant to his employment agreement and termination benefits to theour other NEOs based on change of control severance agreements. Our NEOs are eligible to participate in our 401(k) plan, our health and welfare benefits, our Employee Stock Purchase Plan and our User-Owned Personal Computing Devices reimbursement program on the same terms as other eligible employees.employees.
Stock Ownership Guidelines
OurThe Compensation Committee believes that executives are requiredand members of the Board should own a significant amount of our Company stock in order to holdalign the interests of such individuals with those of our stockholders. In 2020, the Compensation Committee undertook an extensive review of our guidelines relative to our objectives of ownership and competitive practice and further reviewed the guidelines in 2021. Given the review, the Compensation Committee established the following guidelines (that remain in effect) requiring executives and directors to own a multiple of their salaries and cash retainers, respectively, as follows:
Group | Stock Ownership Guidelines | |
Chief Executive Officer | Four times (4x) base salary | |
Other Executive Officers | Two times (2x) base salary | |
Directors | Three times (3x) annual cash compensation |
For purposes of the ownership guidelines, ownership includes shares owned outright (including stock purchase plan holdings) and 50% ofafter-tax shares realized upon vesting or exercise outstanding RSUs. Vested and unvested stock options and unvested performance units are not qualified holdings for purposes of satisfying the stock ownership guidelines. Further, 50% of qualifying equity awards on anafter-tax basis until they reachholdings must be in the required levelsform of 5x base salary for the CEOissued and 3x base salary for the other executive officers.outstanding common stock. Our current executives and directors are required to achieve the required levels on or before July 30, 2025. New executives and directors must achieve the guidelines within five years offrom the date
such an officer or director assumes theirhis or her position. For purposes of these guidelines, ownership includes shares owned outright, unvested restricted stock and restricted stock units, and the value of vested and unexercised stock options. As of December 31, 2017, all2021, a majority of our NEOs wereand directors are in compliance with this policy.the updated policy; the others are within the five year phase in period.
Hedging and Pledging
As stated in our Code of Business Conduct and Ethics, all of our employees and directors are prohibited from engaging in hedging transactions in Rambus shares, including short sales and purchases of put options. In
addition, under our insider trading policy, our directors and executive officers are prohibited from pledging Rambus securities as collateral for loans.
Equity Grant Policy
Annual equity awards to then-current NEOs are granted on February 1st of each year or the first trading day thereafter. Currently,Under our current compensation program, awards granted consist of stock options, RSUs and performance units. Stock options are priced at the fair market value on the date that the grant becomes effective while RSUs and performance units are full value awards. The number of shares and key terms of the awards are approved by the Compensation Committee prior to the scheduled award date, February 1st or the first trading day thereafter.date. On occasion, the Compensation Committee approves other special or promotional equity awards during the year in addition to the annual equity awards, including, for example, Dr. Black’s Strategic Growth Award.but no such awards were made in 2021 other than to Mr. Shinn related to his appointment as Senior Vice President, General Counsel, Secretary and Chief Compliance Officer, as discussed above.
Compensation Recovery (Clawback)
The Compensation Committee reserves the right to reduce or withhold future compensation based on any required restatement or adjustment to the Company’s reported financial statements, and to determine the extent to which recovery of prior compensation may be pursued in the event of future adjustments caused by fraud on the part of an executive of Rambus. The Compensation Committee will adopt a policy that complies with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act when such rules are promulgated.
CEO Employment Agreement
On July 17, 2017, in connection with the expiration of the five-year term of Dr. Black’s employment agreement, the Company entered into a new employment agreement with Dr. Black. The new employment agreement will remain in effect through June 26, 2022. We believe having an employment agreement with the CEO promotes transparency, stability and retention. Dr. Black’s original employment agreement expired in 2017, and Rambus has traditionally maintained employment agreements with our CEOs in the past. The employment agreement executed in July 2017 set the Company on the path for continued success by ensuring Dr. Black’s strategic focus and leadership of the Company’s growth. The Board of Directors is confident in Dr. Black’s leadership and recognizes the critical role he plays in the Company’s transition from heavily focusing on maintaining and growing licensing revenue in 2012 to its product growth imperative in 2017.
As part of Dr. Black’s employment agreement, the Compensation Committee agreed to reimburse Dr. Black for up to $200,000 in relocation related expenses as a result of Dr. Black relocating his European residence from Paris to Rotterdam. Having Dr. Black relocate to, and spend periods of time in Rotterdam will not only improve the Company’s operations in Rotterdam, but also strengthen the Company’s chances of receiving a favorable ‘Dutch Innovation Box’ tax ruling related to Dr. Black’s service as a Bell ID director. Bell ID was acquired by Rambus in 2016. The Dutch Innovation Box is a special corporation tax rate which allows for eligible income to be taxed atan effective rate of 5% rather than the top rate of 25%. This in turn enables profit exemption for up to 80% to be obtained. The Dutch Innovation Box has previously yielded substantial income tax benefits for the Company. The proposed Dutch tax structure aligns the use and future development of recently acquired IP within Rambus’ global operating model and business objectives.
Change of Control PaymentsSeverance Agreements
Outstanding equity awards for our NEOs, including our CEO, may vest upon a “double-trigger” termination in the event of a change of control pursuant toWe maintain change of control severance agreements with our executive officers
andNEOs (other than Mr. Jones), including our CEO’s employment agreementCEO, that governsgovern certain applicable change of control severance obligations applicable to him.obligations. These agreements are designed to promote stability and retention of senior management prior to and following a change of control and to align executive and stockholder interests by enabling executives to consider corporate transactions that are in the best interests of the stockholders and other constituents of the Companycompany without undue concern over whether the transactions may jeopardize the executives’ own employment. Each agreement has an initial term of three years and will renew automatically for additional one-year terms unless either party to the agreement provides the other with written notice of non-renewal at least 90 days prior to the date of automatic renewal.
As discussed above, the Company entered into a new employment agreement with Dr. Black which sets forthFor each of our NEOs, under the terms of their change of control severance agreement, if we terminate such executive’s employment without “Cause” or such executive terminates his employment for “Good Reason”, and provisions governing Dr. Black’s employment. Dr. Black’s employment agreement with the Company includes, among other terms, certain payments for Dr. Black in the event of hiseach case, such termination occurs during a period beginning three months before a change of control and ending 12 months (or 24 months in the case of Mr. Seraphin) following a change of control, then subject to the executive signing and not revoking a separation agreement and release of claims and the executive’s continued compliance with the terms of the Company, or both. The Compensation Committee believed that retaining these provisions in Dr. Black’s employment agreement was appropriate givenAt Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement entered into between the context of Dr. Black’s lengthy tenure withexecutive and the Company, the executive will receive: (i) a lump sum payment (less applicable withholding taxes) equal to 100% (or 200% in the case of Mr. Seraphin) of the executive’s annual base salary as in effect immediately prior to the executive’s termination date or, if greater, at the level in effect immediately prior to the change of control; (ii) a lump sum payment (less applicable withholding taxes) equal to 100% (or 200% in the case of Mr. Seraphin) of the executive’s target bonus and commission for the year of termination as in effect immediately prior to the executive’s termination date, or, if greater, at the level in effect immediately prior to the change of control; (iii) 100% of the executive’s then-outstanding and unvested equity awards will become vested in full (and if the amount of the award to vest is determined based on the achievement of performance criteria, then the equity awards will vest based on achievement at target levels for the relevant performance period(s)); and (iv) if the executive elects continuation coverage pursuant to COBRA for executive and his continued leadership ator her eligible dependents, the Company.
SeeCompany will reimburse the executive for the COBRA premiums for a maximum period of 12 months (or 18 months in the case of Mr. Seraphin). Refer to “Executive Compensation Tables — Potential Payments Upon Termination or Change of Control” below for a discussion of potential payments to our current NEOs, including our CEO.
Tax ConsiderationsEmployment Agreement with Keith Jones
PriorIn connection with his appointment to January 1, 2018,the role of Vice President, Finance, and Interim Chief Financial Officer, the Company entered into an employment agreement with Mr. Jones that governs his services in such role. Under the terms of the employment agreement, if we terminate Mr. Jones’ employment without “Cause” or if he terminates his employment for “Good Reason”, and in each case, such termination occurs during the period Mr. Jones is employed under Section 162(m),the terms of the employment agreement and ending 12 months following the completion of such term, then subject to Mr. Jones signing and not revoking a corporation cannot deduct compensation it paysseparation agreement and release of claims and Mr. Jones’ continued compliance with the terms of the At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement entered into between Mr. Jones and the Company, Mr. Jones will receive: (i) a lump sum payment (less applicable withholding taxes) equal to its Chief Executive Officer100% of his annual base salary as in effect immediately prior to his termination date; (ii) a lump sum payment (less applicable withholding taxes) equal to 100% of his target bonus for the year of termination as in effect immediately prior to his termination date and certain other executive officers in excessthe monthly salary stipend of $1 million unless such compensation is considered “qualified performance-based compensation”$6,250 multiplied by 12; (iii) accelerated vesting as defined in Section 162(m). Compensationto any then-outstanding and unvested equity awards that qualifiesvest solely based on continued service as “performance-based” generally must meet the requirementto that it is payable only upon attainmentnumber ofpre-established, objective performance goals under a plan shares that has been approvedwould have otherwise vested had Mr. Jones remained employed by the corporation’s stockholders. In 2017,Company for 12 months following his termination date (other than equity awards where the performance metric has not been achieved by the termination date); and (iv) if Mr. Jones elects continuation coverage pursuant to COBRA for himself and his eligible dependents, the Company will reimburse Mr. Jones for the COBRA premiums for a maximum period of 12 months. Refer to “Executive Compensation Committee considered theTables — Potential Payments Upon Termination or Change of Control” below for a discussion of potential future effects of Section 162(m) when determining NEO compensation. As a result of the Tax Cuts and Jobs Act that became law in late 2017, the number of individuals covered by Section 162(m) has been expandedpayments to include the Company’s principle financial officer and the exception for performance-based compensation has been eliminated. For 2018 and beyond, the Compensation Committee is expected to consider the potential future effects of Section 162(m) when determining NEO compensation.our current NEOs.
Compensation Program Risk Evaluation
The Compensation Committee annually reviews the elements of NEO compensation to determine whether any portion of the overall program encourages excessive risk taking. The Compensation Committee’s current assessment is that although the majority of compensation provided to our NEOs is performance-based, our compensation programs do not encourage excessive or unnecessary risk taking. The Compensation Committee believes that the design of these compensation programs encourages our NEOs to remain focused on both short-termshort- term and long-term strategic goals.
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
Our Compensation and Human Resources Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on such review and discussions, the Compensation and Human Resources Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this report.
THE COMPENSATION AND HUMAN
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The following table shows NEO compensation information for 2015, 2016the fiscal years ended December 31, 2021, 2020 and 2017.2019.
Non-Equity | ||||||||||||||||||||||||||||
Stock | Option | Incentive Plan | All Other | |||||||||||||||||||||||||
Salary | Awards(1) | Awards(1) | Compensation | Compensation(4) | Total | |||||||||||||||||||||||
Name and Title | Year | ($) | ($) | ($) | (2)(3)($) | ($) | ($) | |||||||||||||||||||||
Ronald Black | 2017 | 551,667 | 7,992,844 | 819,488 | 764,790 | 215,367 | (5) | 10,344,156 | ||||||||||||||||||||
President and Chief Executive | 2016 | 515,000 | 3,808,145 | 1,026,080 | 653,844 | 12,634 | 6,015,703 | |||||||||||||||||||||
Officer | 2015 | 515,000 | 2,456,752 | 550,656 | 610,000 | 63,325 | 4,195,733 | |||||||||||||||||||||
Rahul Mathur(6) | 2017 | 330,000 | 477,389 | 121,059 | 291,600 | 10,740 | 1,230,788 | |||||||||||||||||||||
Senior Vice President, Finance | 2016 | 81,442 | 972,000 | 242,142 | 71,415 | 50,480 | 1,417,479 | |||||||||||||||||||||
and Chief Financial Officer | ||||||||||||||||||||||||||||
Laura Stark | 2017 | 322,917 | 659,121 | 158,309 | 334,800 | 10,740 | 1,485,887 | |||||||||||||||||||||
Senior Vice President, GM, Emerging Solutions Division | 2016 | 300,000 | 611,102 | 124,995 | 396,360 | 9,870 | 1,442,327 | |||||||||||||||||||||
2015 | 299,167 | 1,021,254 | 80,304 | 322,838 | 47,350 | 1,770,913 | ||||||||||||||||||||||
Jae Kim | 2017 | 327,500 | 500,753 | 121,059 | 291,600 | 10,740 | 1,251,652 | |||||||||||||||||||||
Senior Vice President, | 2016 | 300,000 | 412,025 | 83,952 | 379,546 | 9,870 | 1,185,393 | |||||||||||||||||||||
General Counsel and Secretary | 2015 | 299,167 | 828,262 | 64,243 | 217,140 | 35,589 | 1,444,401 |
Name and Title | Year | Salary ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Incentive Plan Compensation(2) ($) | All Other Compensation(3) ($) | Total ($) | |||||||||||||||||||||
Luc Seraphin | 2021 | 575,000 | 4,511,773 | — | 663,000 | 11,724 | 5,761,497 | |||||||||||||||||||||
Chief Executive | 2020 | 572,917 | 4,050,500 | — | 742,900 | 11,346 | 5,377,663 | |||||||||||||||||||||
Officer | 2019 | 550,000 | 2,888,225 | — | 592,900 | 11,436 | 4,042,561 | |||||||||||||||||||||
Keith Jones(4) | 2021 | 331,599 | (5) | 229,692 | — | 132,931 | 11,941 | 706,163 | ||||||||||||||||||||
Vice President, | ||||||||||||||||||||||||||||
Finance, and Interim | ||||||||||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||||||
Sean Fan | 2021 | 480,000 | 1,816,592 | — | 423,600 | 13,724 | 2,733,916 | |||||||||||||||||||||
Senior Vice President, | 2020 | 479,583 | 1,493,972 | — | 513,600 | 313,346 | (6) | 2,800,501 | ||||||||||||||||||||
Chief Operating Officer | 2019 | 167,468 | 3,071,054 | — | 143,655 | 301,669 | (7) | 3,683,846 | ||||||||||||||||||||
John Shinn(8) | 2021 | 322,697 | 564,560 | — | 187,000 | 9,804 | 1,084,061 | |||||||||||||||||||||
Senior Vice President, | ||||||||||||||||||||||||||||
Secretary and General | ||||||||||||||||||||||||||||
Counsel | ||||||||||||||||||||||||||||
Former Executive Officers: | ||||||||||||||||||||||||||||
Rahul Mathur(9) | 2021 | 319,375 | 1,453,245 | — | 109,500 | 13,142 | 1,895,262 | |||||||||||||||||||||
Senior Vice President, | 2020 | 364,099 | 1,493,972 | — | 353,685 | 13,346 | 2,225,102 | |||||||||||||||||||||
Finance and Chief | 2019 | 353,162 | 1,241,875 | — | 333,495 | 13,436 | 1,941,968 | |||||||||||||||||||||
Financial Officer | ||||||||||||||||||||||||||||
Jae Kim(10) | 2021 | 51,240 | 1,211,030 | — | — | 9,204 | 1,271,474 | |||||||||||||||||||||
Senior Vice President, | 2020 | 364,099 | 1,120,488 | — | 353,685 | 11,346 | 1,849,618 | |||||||||||||||||||||
General Counsel and | 2019 | 353,162 | 1,055,594 | — | 323,400 | 11,436 | 1,743,592 | |||||||||||||||||||||
Secretary |
(1) | Amounts shown do not reflect compensation actually received by the NEO. Instead, the amounts shown are the aggregate grant date fair value computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the value of stock and stock option awards are set forth under Note |
(2) | Amounts for fiscal year |
(3) |
“All Other Compensation” for NEOs for |
(4) | Mr. Jones was appointed to the position of |
(5) | As of November 15, 2021, Mr. Jones’ start date as the Vice President, Finance, and Interim Chief Financial Officer (“Interim CFO Start Date”), Mr. Jones received an additional monthly salary stipend of $6,250 (the “Salary Stipend”) for his services as Interim CFO. The Salary Stipend will be paid for a minimum of three (3) months after the Interim CFO Start Date even if Mr. Jones’ term of employment ends sooner, but subject to Mr. Jones remaining on employee of the Company during such period. Mr. Jones was paid a total of $9,659.09 for his Interim CFO services in |
(6) | Mr. Fan was provided a sign-on bonus of $300,000 upon his one-year anniversary. |
(7) | Mr. Fan was provided a sign-on bonus of $300,000 upon his appointment. |
(8) | Mr. Shinn was appointed to the position of Senior Vice President, General Counsel and Secretary, to be effective as of February 19, 2021. |
(9) | Mr. Mathur |
(10) | Mr. Kim resigned from his position as Senior Vice President, |
Executive Employment Arrangements
The material terms of our employment agreements, offer letters or arrangements with each of our Named Executive Officers are described below.
Each of our Named Executive Officers is eligible to receive certain severance payments and/or benefits in connection with his or her termination of employment under various circumstances, including following a change in control, pursuant to written severance and change in control arrangements. For a summary of the material terms and conditions of these arrangements, as well as an estimate of the potential payments and/or benefits payable to our Named Executive Officers under these arrangements, see the description below and the section titled “—Potential Payments Upon Termination or Change in Control” below.
Luc Seraphin. In 2018, we entered into an employment agreement with Mr. Seraphin, which has an initial three-year term that expired on October 25, 2021 and provides for automatic one-year extensions thereafter, unless we or Mr. Seraphin provide the other party written notice at least 90 calendar days before the extension date that the employment term under the agreement will not be extended (and no such notice was given in 2021). Mr. Seraphin’s employment agreement provides that he is an at-will employee. Mr. Seraphin is currently entitled to an annual salary of $575,000. Additionally, Mr. Seraphin is eligible for an annual target cash incentive payment equal to $575,000. Per his Employment Agreement, Mr. Seraphin may be eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
Keith Jones. In 2021, we entered into an employment agreement with Mr. Jones, which provided the terms of his at-will employment at the Company. Mr. Jones is currently entitled to an annual salary of $324,571. In addition, as of his appointment as the interim CFO on November 15, 2021, the Company will pay Mr. Jones a monthly salary stipend of $6,250 as additional compensation for at least three months, and until the end of Mr. Jones’ services to the Company as its interim CFO. Additionally, Mr. Jones is eligible for an annual target bonus payment equal to $129,828. The Company will pay Mr. Jones a retention bonus in the amount of $150,000 on November 15, 2022, subject to Mr. Jones’ continued service with the Company between November 15, 2021 and November 15, 2022. Per his employment agreement, Mr. Jones may be eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
Sean Fan. In 2019, we entered into an offer letter with Mr. Fan. Mr. Fan is currently entitled to an annual salary of $480,000 and an annual target cash incentive payment equal to $384,000. In connection with his hiring, Mr. Fan received an inducement RSU award of 112,782 RSUs and an inducement award of 112,782 performance
units. Fifty percent of the RSU award will vest 12 months from the date of grant, and the remaining fifty percent of the RSU award will vest 24 months from the date of grant, subject to continued service. The RSUs and performance units are subject to the terms and conditions of the Company’s 2019 Inducement Equity Incentive Plan and an award agreement. Per his offer letter, Mr. Fan may be eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
John Shinn. In 2021, in accordance with the Company’s established succession plan, we appointed Mr. Shinn as the Company’s Senior Vice President, General Counsel and Secretary. Mr. Shinn is currently entitled to receive an annual salary of $325,000. Additionally, Mr. Shinn is eligible to receive an annual target bonus payment equal to $162,500. In connection with his promotion, Mr. Shinn also received a grant of RSUs covering 11,332 shares of our common stock. The RSUs will vest in four equal annual installments with a vesting commencement date on February 1, 2021, and the first installment vesting on February 1, 2022, subject to continued service through the applicable vesting period. Mr. Shinn also received a grant of PSUs covering 11,332 shares of common stock, awarded in accordance with the Company’s standard form of 2015 Equity Incentive Plan Performance-Based Restricted Stock Unit Agreement. Mr. Shinn may be eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
Former Executive Officers
Rahul Mathur. In 2016, we entered into an offer letter with Mr. Mathur. Prior to Mr. Mathur’s resignation from the Company, effective November 15, 2021, he was entitled to an annual salary of $365,000 and an annual target bonus equal to $273,750. During the term of his employment, Mr. Mathur was eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
Jae Kim. In 2013, we appointed Mr. Kim as the Company’s Senior Vice President and General Counsel. Prior to his resignation from the Company, effective as of February 19, 2021, Mr. Kim was entitled to an annual salary of $365,000 and an annual target bonus equal to $273,750. During the term of his employment, Mr. Kim was eligible to receive additional equity awards as determined by the Board or the Compensation Committee in its discretion.
Grants of Plan Based Awards
The following table shows all plan-based awards granted to the NEOs during 2017.2021. The option awards and the unvested portion of the stock awards identified in the table below are also reported in the Outstanding Equity Awards at 20172021 Year End table that follows.
All Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All Other | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | Awards: | Grant Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Number of | Exercise | Fair Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Securities | or Base | of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares of | Underlying | Price of | Stock and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock or | Options | Option | Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payments Under | Units(2) | (2) | Awards | Awards(3) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) | Equity Incentive Plan Awards | (#) | (#) | ($/Sh) | ($) |
Estimated Future Payouts Under | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | Grant Date Fair Value of Stock Awards(3) ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) |
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| Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ronald Black | 2/1/2017 | 1/18/2017 | N/A | 721,500 | 1,443,000 | — | — | — | — | 197,753 | 12.80 | 819,488 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Luc Seraphin | 2/1/2021 | 1/21/2021 | n/a | 575,000 | 1,150,000 | 73,770 | 1,439,990 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 63,128 | — | 808,038 | 2/1/2021 | 1/21/2021 | 25 | % | 100 | % | 200 | % | 110,655 | 3,071,783 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Keith Jones | 2/1/2021 | 1/21/2021 | n/a | 129,828 | 259,656 | 11,767 | 229,692 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 50 | % | 100 | % | 150 | % | 189,384 | — | 2,424,115 | 2/1/2021 | 1/21/2021 | 25 | % | 100 | % | 200 | % | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sean Fan | 2/1/2021 | 1/21/2021 | n/a | 384,000 | 768,000 | 38,422 | 749,997 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/1/2017 | 6/22/2017 | 170,675 | — | 2,200,001 | 2/1/2021 | 1/21/2021 | 25 | % | 100 | % | 200 | % | 38,422 | 1,066,595 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Shinn(4) | 2/19/2021 | 2/17/2021 | n/a | 162,500 | 325,000 | 11,332 | 249,984 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8/1/2017 | 6/22/2017 | 50 | % | 100 | % | 150 | % | 170,675 | — | 2,275,098 | 2/19/2021 | 2/17/2021 | 25 | % | 100 | % | 200 | % | 11,332 | 314,576 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Former Executive Officers(5): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rahul Mathur | 2/1/2017 | 1/18/2017 | N/A | 270,000 | 540,000 | — | — | — | — | 29,213 | 12.80 | 121,059 | 2/1/2021 | 1/21/2021 | n/a | 273,750 | 547,500 | 30,737 | 599,986 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 18,648 | — | 238,694 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 50 | % | 100 | % | 150 | % | 18,648 | — | 238,694 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Laura Stark | 2/1/2017 | 1/18/2017 | N/A | 310,000 | 620,000 | — | — | — | — | 38,202 | 12.80 | 158,309 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 24,388 | — | 312,166 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 50 | % | 100 | % | 150 | % | 24,388 | — | 312,166 | 2/1/2021 | 1/21/2021 | 25 | % | 100 | % | 200 | % | 30,737 | 853,259 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jae Kim | 2/1/2017 | 1/18/2017 | N/A | 270,000 | 540,000 | — | — | — | — | 29,213 | 12.80 | 121,059 | 2/1/2021 | 1/21/2021 | n/a | 273,750 | 547,500 | 25,614 | 499,985 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 18,648 | — | 238,694 | 2/1/2021 | 1/21/2021 | 25 | % | 100 | % | 200 | % | 25,614 | 711,045 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2/1/2017 | 1/18/2017 | 50 | % | 100 | % | 150 | % | 18,648 | — | 238,694 |
(1) | Amounts shown are estimated payouts for fiscal year |
(2) | The |
(3) | The value of a |
(4) | Mr. Shinn was appointed to the position of Senior Vice President, General Counsel and Secretary, to be effective as of February 19, 2021. Upon his appointment, Mr. Shinn’s salary was increased to $325,000 per annum; and his bonus eligibility was increased to $162,500 per annum. In addition, on February 17, 2021, Mr. Shinn was awarded 11,332 RSUs and 11,332 PSUs to be granted on February 19, 2021. |
(5) | Mr. Kim did not receive a CIP payout for fiscal 2021, because he was not employed by the Company on the dates of payment and therefore was not eligible. Mr. Mathur received a CIP payout of $109,500 for the first half of 2021. Equity grants to Messrs. Mathur and Kim expired upon their termination from the Company, except that vested options expire one year after termination. |
Outstanding Equity Awards at FiscalYear-End
The following table shows all outstanding equity awards held by the NEOs as of December 31, 2017.2021. Unvested stock awards reported in the Grants of Plan Based Awards table above are also included in the table below.
Option Awards | Stock Awards | Equity Incentive Plan Awards | ||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($)(1) | Number of Unearned Shares, Units or Other Rights That Have Not Vested(#) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||||||||||||||||
Name | Exercisable (#) | Unexercisable (#) | ||||||||||||||||||||||||||||||
Ronald Black | 36,725 | 161,028 | (2) | 12.80 | 2/1/2027 | — | — | — | — | |||||||||||||||||||||||
— | — | — | — | 170,675 | (3) | 2,426,999 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 170,675 | (4) | 2,426,999 | ||||||||||||||||||||||||
— | — | — | — | 63,128 | (5) | 897,680 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 189,384 | (6) | 2,693,040 | ||||||||||||||||||||||||
97,428 | 122,572 | (7) | 12.31 | 2/1/2026 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 75,000 | (8) | 1,066,500 | — | — | ||||||||||||||||||||||||
— | — | — | — | 233,400 | (9) | 3,318,948 | — | — | ||||||||||||||||||||||||
84,000 | 36,000 | (10) | 11.26 | 2/2/2025 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 27,272 | (11) | 387,808 | — | — | ||||||||||||||||||||||||
— | — | — | �� | 173,866 | (12) | 2,472,375 | — | — | ||||||||||||||||||||||||
220,142 | 9,858 | (13) | 8.76 | 2/3/2024 | — | — | — | — | ||||||||||||||||||||||||
190,000 | — | (14) | 5.46 | 2/1/2023 | — | — | — | — | ||||||||||||||||||||||||
595,000 | — | (14) | 5.76 | 7/2/2022 | — | — | — | — | ||||||||||||||||||||||||
Rahul Mathur | 5,425 | 23,788 | (2) | 12.80 | 2/1/2027 | — | — | — | — | |||||||||||||||||||||||
— | — | — | — | 18,648 | (5) | 265,175 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 18,648 | (6) | 265,175 | ||||||||||||||||||||||||
15,000 | 45,000 | (15) | 12.15 | 11/1/2026 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 60,000 | (16) | 853,200 | — | — | ||||||||||||||||||||||||
Laura Stark | 7,094 | 31,108 | (2) | 12.80 | 2/1/2027 | — | — | — | — | |||||||||||||||||||||||
— | — | — | — | 24,388 | (5) | 346,797 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 24,388 | (6) | 346,797 | ||||||||||||||||||||||||
11,868 | 14,932 | (7) | 12.31 | 2/1/2026 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 18,273 | (8) | 259,842 | — | — | ||||||||||||||||||||||||
— | — | — | — | 28,432 | (9) | 404,303 | — | — | ||||||||||||||||||||||||
— | — | — | — | 27,516 | (17) | 391,278 | — | — | ||||||||||||||||||||||||
12,250 | 5,250 | (10) | 11.26 | 2/2/2025 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 8,000 | (11) | 113,760 | — | — | ||||||||||||||||||||||||
— | — | — | — | 17,000 | (12) | 241,740 | — | — | ||||||||||||||||||||||||
34,820 | 2,143 | (13) | 8.76 | 2/3/2024 | — | — | — | — | ||||||||||||||||||||||||
29,142 | — | (14) | 5.46 | 2/1/2023 | — | — | — | — | ||||||||||||||||||||||||
21,000 | — | (14) | 7.31 | 2/1/2022 | — | — | — | — | ||||||||||||||||||||||||
30,000 | — | (14) | 20.93 | 2/1/2021 | — | — | — | — | ||||||||||||||||||||||||
30,000 | — | (14) | 22.72 | 2/1/2020 | — | — | — | — | ||||||||||||||||||||||||
13,935 | — | (14) | 8.55 | 2/2/2019 | — | — | — | — | ||||||||||||||||||||||||
Jae Kim | 5,425 | 23,788 | (2) | 12.80 | 2/1/2027 | — | — | — | — | |||||||||||||||||||||||
— | — | — | — | 18,648 | (5) | 265,175 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 18,648 | (6) | 265,175 | ||||||||||||||||||||||||
1,543 | 10,029 | (7) | 12.31 | 2/1/2026 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 12,273 | (8) | 174,522 | — | — | ||||||||||||||||||||||||
— | — | — | — | 19,096 | (9) | 271,545 | — | — | ||||||||||||||||||||||||
— | — | — | — | 22,294 | (17) | 317,021 | — | — | ||||||||||||||||||||||||
1,200 | 4,200 | (10) | 11.26 | 2/2/2025 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 6,500 | (11) | 92,430 | — | — | ||||||||||||||||||||||||
— | — | — | — | 13,812 | (12) | 196,407 | — | — | ||||||||||||||||||||||||
3,814 | 1,929 | (13) | 8.76 | 2/3/2024 | — | — | — | — |
Name | # of Securities Underlying Unexercised Options (#) Exercisable | # of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | # of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (1)($) | Equity Incentive Plan Awards: #of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||
Luc Seraphin | 11,783 | 2,123 | (2) | 12.8400 | 2/1/2028 | — | — | — | — | |||||||||||||||||||||||
1,006 | — | (3) | 12.8000 | 2/1/2027 | — | — | — | — | ||||||||||||||||||||||||
— | — | — | — | 73,770 | (4) | 2,162,199 | — | — | ||||||||||||||||||||||||
— | — | — | — | 75,000 | (5) | 2,198,250 | — | — | ||||||||||||||||||||||||
— | — | — | — | 57,500 | (6) | 1,685,325 | — | — | ||||||||||||||||||||||||
— | — | — | — | 6,576 | (7) | 192,743 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 177,675 | (10) | 5,207,654 | ||||||||||||||||||||||||
— | — | — | — | — | — | 110,655 | (8) | 3,243,298 | ||||||||||||||||||||||||
— | — | — | — | — | — | 150,000 | (9) | 4,396,500 | ||||||||||||||||||||||||
Keith Jones | — | — | — | — | 11,767 | (4) | 344,891 | — | — | |||||||||||||||||||||||
— | — | — | — | 11,250 | (5) | 329,738 | — | — | ||||||||||||||||||||||||
— | — | — | — | 11,500 | (6) | 337,065 | — | — | ||||||||||||||||||||||||
— | — | — | — | 7,000 | (11) | 205,170 | — | — | ||||||||||||||||||||||||
Sean Fan | — | — | — | — | 34,614 | (5) | 1,014,536 | — | — | |||||||||||||||||||||||
— | — | — | — | 38,422 | (4) | 1,126,149 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 116,165 | (10) | 3,404,796 | ||||||||||||||||||||||||
— | — | — | — | — | — | 38,422 | (8) | 1,126,149 | ||||||||||||||||||||||||
— | — | — | — | — | — | 46,153 | (9) | 1,352,744 | ||||||||||||||||||||||||
John Shinn | — | — | — | — | 11,332 | (4) | 332,141 | — | — | |||||||||||||||||||||||
— | — | — | — | 7,500 | (5) | 219,825 | — | — | ||||||||||||||||||||||||
— | — | — | — | 11,000 | (6) | 322,410 | — | — | ||||||||||||||||||||||||
— | — | — | — | 5,000 | (7) | 146,550 | — | — | ||||||||||||||||||||||||
— | — | — | — | — | — | 11,332 | (8) | 332,141 |
(1) | The market value is calculated using the closing price of our |
(2) | The option was granted on February 1, |
The option was granted on February 1, 2017. Options representing 1/10th of the total shares granted vested six months from the grant date and the remaining shares vest in equal monthly installments until they are fully vested on February 1, 2021. |
(4) | The restricted stock units |
The restricted stock units |
(6) | The restricted stock units were granted on February 1, 2019 and vest in four equal annual installments beginning on February 1, 2020. |
(7) | The restricted stock units were granted on February 1, 2018 and vest in four equal annual installments beginning on February 1, 2019. |
(8) | The performance stock units were granted on February 1, 2021. The number of shares earned will range between 25% to 200% of target shares granted. The performance units will vest based upon the achievement of +/-25% based on the Company’s relative TSR to the TSR of the SOX semiconductor index companies and the executive’s continued service to the Company through the applicable vesting date on the third anniversary of the date of grant. |
(9) | The performance stock units were granted on February 3, 2020. The number of shares earned will range between 25% to 200% of target shares granted. The performance units will vest based upon the achievement of +/-25% based on the Company’s relative TSR to the TSR of the SOX semiconductor index companies and the executive’s continued service to the Company through the applicable vesting date on the third anniversary of the date of grant. |
(10) | The performance stock units were granted on February 1, 2019. These shares represent the shares earned as of December 31, 2021, and amount to approximately 103% of the targeted shares granted. Refer to “2019 Performance Units” above for more information. |
(11) | The restricted stock units were granted on March 1, |
EachExcept as otherwise noted, each of the options and other equity awards reflected on the table above were issued under the 2006 Plan or the 2015 Plan, which are plans that were or are available to all of our employees.
Option Exercises and Stock Vested
The following table shows all stock options exercised and value realized upon exercise, and all stock awards vested and value realized upon vesting, by the NEOs during 2017.2021.
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (1)($) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (1)($) | ||||||||||||||||||||||||
Ronald Black | — | — | 38,636 | 492,768 | ||||||||||||||||||||||||||||
Luc Seraphin | 1,779 | 8,394 | 82,528 | 1,603,322 | ||||||||||||||||||||||||||||
Keith Jones | — | — | 16,500 | 335,286 | ||||||||||||||||||||||||||||
Sean Fan | — | — | 67,930 | 1,598,790 | ||||||||||||||||||||||||||||
John Shinn | — | — | 13,000 | 252,998 | ||||||||||||||||||||||||||||
Former Executive Officers: | ||||||||||||||||||||||||||||||||
Rahul Mathur | — | — | 20,000 | 293,200 | 130,686 | 1,546,515 | 51,477 | 1,001,312 | (2) | |||||||||||||||||||||||
Laura Stark | 33,408 | 194,814 | 23,849 | 332,951 | ||||||||||||||||||||||||||||
Jae Kim | 35,704 | 133,976 | 19,738 | 275,075 | 39,728 | 323,323 | 45,091 | 877,537 | (3) |
(1) | The value realized equals the market value of our common stock on the vesting date multiplied by the number of shares that vested. |
(2) | Mr. Mathur left the Company on November 15, 2021 and ceased to be an executive officer. Information in the above table reflects transactions through November 15, 2021. |
(3) | Mr. Kim left the Company on February 19, 2021 and ceased to be an executive officer. Information in the above table reflects transactions through February 19, 2021. |
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Dr. Ronald Black,Luc Seraphin, our CEO:
For fiscal year 2017,2021, our last completed fiscal year:
the median of the annual total compensation of all employees of our company (other than our CEO), was $135,117;$154,965; and
the annual total compensation of our CEO, as reported in the Summary Compensation Table presented elsewhere in this proxy statement, was $10,344,156.$5,761,497.
Based on this information, for fiscal year 2017,2021, the ratio of the annual total compensation of Dr. Black,Mr. Seraphin, our CEO, to the median of the annual total compensation of employees was approximately 7737 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.
To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments, and estimates that we used were as follows:
We selected December 31, 2017,2021, which is the last day of our fiscal year, as the date upon which we would identify the median employee.
As of December 31, 2017,During fiscal 2021, our employee population had consisted of approximately 819693 individuals, including employees in the United States, Australia, Canada, China, Finland, France, India, Japan, the Netherlands, Singapore,Bulgaria, South Korea, Taiwan and the United Kingdom. Of these employees, 402273 were located in the United States and 417420 were located outside of the United States.
When determining our median employee, we excluded all employees from ChinaAustralia (2), Japan (3) and Taiwan. The numberUnited Kingdom (4), which is less than 5% of employees excluded from China was 2 andour total employee population (based on an employee count of 693) under the number of employees excluded from Taiwan was 2.de minimis exception provided for in Item 402(u).
To identify the “median employee” from our employee population we used payroll and equity plan records for January 1, 20172021 through December 31, 20172021 (the “compensation measure”).
The compensation measure included the following: base salary, employer cost of benefits, employer retirement plan contributions, including 401(k) matching, bonus payments, grant date fair value of stock options and restricted stock units,equity awards, employee stock purchase plan discounts and sales commissions.
For countries other than the United States, Canada, India, China and Canada,South Korea, the employer cost of benefits was calculated based on the average employer cost per country.
Forcountry and for countries in the European Union, Australia and Singapore, the employer cost of benefits includes the cost of holidays.
We annualized the base salary and employer cost of benefits of all permanent employees who were hired in fiscal year 2017 but did not work for us or our subsidiaries for the entire fiscal year.
Amounts paid in foreign currency were converted into United States dollars using exchange rates in effect as of December 31, 2017.2021.
With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for fiscal year 20172021 in accordance with the requirements of Item 402(c)(2)(x) ofRegulation S-K, resulting in annual total compensation of $135,117.$154,965.
With respect to the annual total compensation for the CEO, we used the amount reported in the “Total” column of our 20172021 Summary Compensation Table.Table for Mr. Seraphin.
Potential Payments Upon Termination or Change of Control
Equity Acceleration
In the event of a “change in control” or “merger” of the Company, as defined in the plans, each outstanding option or equity award will be assumed or an equivalent option or right substituted by the successor company. In the event that the successor company refuses to assume or substitute for the option or equity award, the participant will fully vest in and have the right to exercise all of his or her options or stock appreciation rights, including shares as to which such awards would not otherwise be vested or exercisable, all restrictions on restricted stock will lapse, and, with respect to restricted stock units, performance shares and performance units, all performance goals or other vesting criteria will be deemed achieved at target levels and all other terms and conditions met. In addition, if an option or stock appreciation right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a change of control, the administrator of the plan will notify the participant that the option or stock appreciation right will be fully vested and exercisable for a period of time determined by the administrator, and the option or stock appreciation right will terminate upon the expiration of such period.
The form of option agreement for the 2015 Plan and the 2006 Plan, provideprovides that if a successor company assumes outstanding options or awards or substitutes for options or awards with an equivalent award, then if following such assumption or substitution the participant’s status as an employee or employee of the successor company, as applicable, is terminated by the successor company as a result of an “Involuntary Termination” other than for “Cause” within 12 months following the change in control, the option or award will immediately vest and become exercisable as to 100% of the shares subject to the option or award.
Change of Control Severance Agreements
We have entered into change of control severance agreements with our executive officers except(other than Mr. Jones), including our CEO, who has an employment agreement that governsgovern certain applicable change of control severance obligations applicable to him.obligations. These agreements are designed to promote stability and retention of senior management prior to and following a change of control and to align executive and stockholder interests by enabling executives to consider corporate transactions that are in the best interests of the stockholders and other constituents of the company without undue concern over whether the transactions may jeopardize the executives’ own employment.
Each agreement has an initial term of three years and will renew automatically for additionalone-year terms unless either party to the agreement provides the other with written notice ofnon-renewal at least 90 days prior to the date of automatic renewal. If
For each of our NEOs other than our CEO and Interim CFO, if we terminate thesuch executive’s employment without “Cause” or thesuch executive terminates his employment for “Good Reason”, and in each case, such termination occurs during a period beginning three months before a change of control and ending 12 months following a change of control, then subject to the executive signing and not revoking a separation agreement and release of claims and the executive’s continued compliance with the terms of the At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement entered into between the executive and the Company, the executive will receive: (i) a lump sum payment (less applicable withholding taxes) equal to 100% of the executive’s annual base salary as in effect immediately prior to the executive’s termination date or, if greater, at the level in effect immediately prior to the change of control; (ii) a lump sum payment (less applicable withholding taxes) equal to 100% of the executive’s full bonus and commission for the year of termination at target level as in effect immediately prior to the executive’s termination date, or, if greater, at the level in effect immediately prior to the change of control; (iii) 100% of the executive’s then-outstanding and unvested equity awards will become vested in full (and if the amount of the award to vest is determined based on the achievement of performance criteria, then the equity awards will vest based on achievement at target levels for the relevant performance period(s)); and (iv) if the executive elects continuation coverage pursuant to COBRA for executive and his or her eligible dependents, the Company will reimburse the executive for the COBRA premiums for a maximum period of 12 months.
CEO Employment Agreement
Dr. Black’sMr. Seraphin’s employment agreement with the Company provides that in the event the Company terminates Dr. Black’shis employment with the Company without “Cause” and such termination does not occur within the three months prior to or 1224 months following a change of control of the Company, Dr. BlackMr. Seraphin will receive: (i) continueda lump sum payment (over 12 months) of one year100% of his base salary and 100% of his target bonus, (ii) a monthly $3,000Company payment of his COBRA premiums (in lieu of continued employee benefits) for a period of 12 months, and (iii) 12 months additional vesting of all equity awards with a service based component including all equity(excluding awards with a mixture of performance-based vesting provisions as to which the performance metric has been achieved by the termination date, but not as to any such awards as to whichcomponent if the performance metric has not been achieved.achieved by the termination date). In the event the Company terminates Dr. Black’sMr. Seraphin’s employment with the Company without “Cause” or Dr. BlackMr. Seraphin voluntarily terminates his employment for “Good Reason”, and in either event, such termination occurs within three months prior to or 1224 months following a change of control of the Company, Dr. BlackMr. Seraphin will receive: (i) continueda lump sum payment (over 12 months) of 18 months200% of his base salary and 150% of his target bonus, (ii) a monthly $3,000Company payment of his COBRA premiums (in lieu of continued employee benefits) for a period of 18 months, and (iii) 100% vesting of all equity awards with a service based component including all equity(excluding awards with a mixture of performance-based vesting provisions as to which the performance metric has been achieved by the termination date, but not as to any such awards as to whichcomponent if the performance metric has not been achieved. Ifachieved by the termination date).
The severance payments and other benefits will be subject to Mr. Seraphin entering into (and not revoking) a release of claims agreement against the Company and Mr. Seraphin’s continued compliance with certain non-compete, non-solicit, and non-disparagement provisions contained in the Agreements. In the event that the severance payments and other benefits payable to Mr. Seraphin constitute “parachute payments” under Section 280G of the U.S. tax code and would be subject to the applicable excise tax, then Mr. Seraphin’s severance and other benefits will be either: (i) delivered in full, or (ii) delivered to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by Mr. Seraphin on an after-tax basis of the greatest amount of benefits.
Employment Agreement with Keith Jones
In connection with his appointment to the role of Vice President, Finance, and Interim Chief Financial Officer, the Company entered into an employment agreement with Mr. Jones that governs his services in such role. Under the terms of the employment agreement, if we terminate Mr. Jones’ employment without “Cause” or if he terminates his employment for “Good Reason”, and in each case, such termination occurs during the period Mr. Jones is employed under the terms of the employment agreement and ending 12 months following the completion of such term, then subject to Mr. Jones signing and not revoking a separation agreement and release of claims and Mr. Jones’ continued compliance with the terms of the At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement entered into between Mr. Jones and the Company, Mr. Jones will receive: (i) a lump sum payment (less applicable withholding taxes) equal to 100% of his annual base salary as in effect immediately prior to his termination date and the monthly salary stipend of $6,250 multiplied by 12; (ii) a lump sum payment (less applicable withholding taxes) equal to 100% of his target bonus for the year of termination as in effect immediately prior to his termination date; (iii) accelerated vesting as to any then-outstanding and unvested equity awards are not assumedthat vest solely based on continued service as to that number of shares that would have otherwise vested had Mr. Jones remained employed by the successor company inCompany for 12 months following his termination date (other than equity awards where the performance metric has not been achieved by the termination date); and (iv) if Mr. Jones elects continuation coverage pursuant to COBRA for himself and his eligible dependents, the Company will reimburse Mr. Jones for the COBRA premiums for a changemaximum period of control transaction, the awards12 months.
The severance payments and other benefits will be treatedsubject to Mr. Jones entering into (and not revoking) a release of claims agreement against the Company and Mr. Jones’ continued compliance with the Company’s At Will Employment, Confidential Information, Invention Assignment, and Arbitration Agreement, as describedsuch agreement may be amended from time to time. In the event that the severance payments and other benefits payable to Mr. Jones constitute “parachute payments” under “Equity Acceleration” above.Section 280G of the U.S. tax code and would be subject to the
applicable excise tax, then Mr. Jones’ severance and other benefits will be either: (i) delivered in full, or (ii) delivered to such lesser extent which would result in no portion of such benefits being subject to the excise tax, whichever results in the receipt by Mr. Jones on an after-tax basis of the greatest amount of benefits.
Potential Payments Upon Termination or Change ofin Control Payments
The value of the benefits that would be payable to Dr. BlackMr. Seraphin assuming a qualifying termination of employment on December 31, 20172021, is included in the chart below.
Salary | Bonus | Equity | Benefits | Total | ||||||||||||||||
No Change of Control | $ | 555,000 | $ | 721,500 | $ | 7,699,573 | $ | 36,000 | $ | 9,012,073 | ||||||||||
Change of Control | $ | 832,500 | $ | 1,082,250 | $ | 16,168,091 | $ | 54,000 | $ | 18,136,841 |
Salary | Bonus | Equity | Benefits | Total | ||||||||||||||||
Luc Seraphin (No Change In Control) | $ | 575,000 | $ | 575,000 | $ | 14,137,297 | $ | 33,014 | $ | 15,320,311 | ||||||||||
(Change In Control) | $ | 1,150,000 | $ | 1,150,000 | $ | 15,493,236 | $ | 49,521 | $ | 17,842,756 |
The value of the benefits that would be payable to Messrs. Jones, Fan and Shinn our other current NEOs, except for our CEO, assuming a qualifying termination of employment on December 31, 20172021, is included in the chart below.
Salary | Bonus | Equity | Benefits | Total | ||||||||||||||||
Rahul Mathur | $ | 330,000 | $ | 270,000 | $ | 1,510,478 | $ | 25,122 | $ | 2,135,600 | ||||||||||
Laura Stark | $ | 325,000 | $ | 310,000 | $ | 2,132,385 | $ | 21,224 | $ | 2,788,609 | ||||||||||
Jae Kim | $ | 330,000 | $ | 270,000 | $ | 1,607,777 | $ | 33,254 | $ | 2,241,031 |
Salary | Bonus | Equity | Benefits | Total | ||||||||||||||||
Keith Jones | $ | 399,571 | $ | 129,828 | $ | 1,216,863 | $ | 33,014 | $ | 1,779,276 | ||||||||||
Sean Fan | $ | 480,000 | $ | 384,000 | $ | 6,822,694 | $ | 24,516 | $ | 7,711,210 | ||||||||||
John Shinn | $ | 325,000 | $ | 162,500 | $ | 1,131,640 | $ | 33,014 | $ | 1,652,154 |
(1) | Neither Mr. Mathur, nor Mr. Kim were eligible to receive potential change of control payments assuming a qualifying termination of employment on December 31, 2021 because neither were employed on such date. |
Compensation of Directors
The following table shows compensation information for ournon-employee directors for 2017.2021.
Name | Fees Earned or Paid in Cash ($) | Stock Awards (1)($) | Total ($) | Fees Earned or Paid in Cash($) | Stock Awards (1) ($) | Option Awards (1) ($) | Total($) | Equity Footnotes | ||||||||||||||||||||||||
J. Thomas Bentley | 65,000 | 160,017 | (2) | 225,017 | ||||||||||||||||||||||||||||
E. Thomas Fisher | 40,000 | 160,017 | (3) | 200,017 | ||||||||||||||||||||||||||||
Penelope Herscher | 55,625 | 160,017 | (4) | 215,642 | ||||||||||||||||||||||||||||
Charles Kissner | 91,042 | 173,492 | — | 264,534 | (2 | ) | ||||||||||||||||||||||||||
Meera Rao | 68,542 | 173,492 | — | 242,034 | (2 | ) | ||||||||||||||||||||||||||
Emiko Higashi | 23,516 | 313,705 | (5) | 337,221 | 67,458 | 173,492 | — | 240,951 | (2 | ) | ||||||||||||||||||||||
Charles Kissner | 59,375 | 160,017 | (6) | 219,392 | ||||||||||||||||||||||||||||
David Shrigley | 40,000 | 160,017 | (7) | 200,017 | ||||||||||||||||||||||||||||
Sanjay Saraf | 61,250 | 173,492 | — | 234,742 | (2 | ) | ||||||||||||||||||||||||||
Necip Sayiner | 65,125 | 173,492 | — | 238,617 | (2 | ) | ||||||||||||||||||||||||||
Eric Stang | 75,000 | 160,017 | (8) | 235,017 | 72,417 | 173,492 | — | 245,909 | (2 | ) | ||||||||||||||||||||||
Karen Rogge(3) | 40,333 | 155,847 | — | 196,181 | (4 | ) | ||||||||||||||||||||||||||
James Mitarotonda(5) | 48,226 | 173,492 | — | 221,718 | (2 | ) | ||||||||||||||||||||||||||
Former Directors: | ||||||||||||||||||||||||||||||||
Gregory Lang(6) | 11,833 | — | — | 11,833 |
(1) | Amounts shown do not reflect compensation actually received by thenon-employee directors. Instead, the amounts shown are the aggregate grant date fair value computed in accordance with the provisions of FASB ASC Topic 718. The assumptions used to calculate the value of stock and stock option awards are set forth under Note |
(2) | 8,538 RSUs granted on |
(3) | Ms. Rogge joined the |
(4) | 8,303 RSUs granted on 5/3/2021 with a fair value |
(5) | Mr. Mitarotonda joined the |
(6) | Mr. Lang served on the |
Summary of Director Compensation Plan
Annual RetainerRetainer. . Each independent director receives an annual retainer of $40,000$60,000 in cash. The ChairpersonsChairperson of the Board and Audit Committee each receivereceives an additional annual retainer of $25,000. The Chairperson of the Audit Committee receives an additional annual retainer of $12,500. The Chairperson of the Compensation Committee receives an additional annual retainer of $20,000.$10,000. The Chairperson of the Corporate Development Committee, which oversees the Company’s acquisition and divestiture activity, receives an additional annual retainer of $15,000.$7,500. The Chairperson of the Corporate Governance and Governance/Nominating Committee receives an additional annual retainer of $10,000.$7,500. The Chairperson of the Cyber Risk Committee receives an additional annual retainer of $7,500. Each annual retainer is paid in quarterly installments. The annual retainers were not increased for 2017.
Annual Equity GrantGrant. . Each independent director receives an annual equity grant of such number of RSUs with an approximate fair market value equal to $160,000$170,000 at the time of grant.grant (“Annual Equity Grant”). Annual Equity Grants for non-employee directors are granted on April 1st of each year or the first trading day thereafter. The RSU grants vestAnnual Equity Grant vests in full at the end of aone-year period, subject to the independent director continuing to serve through each applicable vesting date. If the director discontinues service prior to the vesting of any RSU grant,Annual Equity Grant, the Compensation Committee may, in its discretion, permit such grant to vestpartial unvested pro rata forAnnual Equity Grant will become vested and exercisable when the portion ofnon-employee director leaves the year during which such director served.Board.
InitialNew Outside Director Annual Equity Grant. AnyIn addition to the Annual Equity Grant noted above, each non-employee director will receive a pro rata Annual Equity Grant based on when such new non-employee director begins her or his service at the Company (the “New Service Grant”). The New Service Grant will equal the value-based amount of the Annual Equity Grant multiplied by a fraction with (i) the numerator equal to the number of months from the first trading day of the month following their service date through April 1 and (ii) the denominator equal to 12. If the director discontinues service prior to the vesting of any New Service Grant, the partial unvested pro rata New Service Grants will become vested and exercisable when the new non-employee director leaves the Board.
Initial Equity Grant. Prior to July 30, 2020, any newly elected independent director joining our Board of Directors will receivereceived an initial option to purchase 40,000 shares of common stock when he or she iswas first elected as a member of the Board. The term of such options willdid not exceed ten years. TheSubject to the terms and conditions of the applicable equity incentive plan, the option grants vest over a four-year period, withone-eighth of shares subject to the option vesting six months after the date of grant and the remaining shares vesting ratably each month thereafter, subject to the independent director continuing to serve through each applicable vesting date. Outside directors appointed or elected after July 30, 2020 will no longer receive an initial option grant upon joining the Board of Directors.
Each of the options granted to our independent directors was issued under the 2006 Plan or the 2015 Plan, which are plans that are available to all of our employees. As described under “Outstanding Equity Awards at Fiscal Year End — Potential Payments Upon Termination or Change in Control,” the 2006 Plan and the 2015 Plan provide for certain acceleration upon a “change in control” of the Company, as defined under such plans. In addition, with respect to options and any other equity awards granted tonon-employee directors that are assumed or substituted for upon a change of control under the 2006 Plan or the 2015 Plan, if thenon-employee director is terminated other than upon a voluntary resignation, the options and other equity awards granted to suchnon-employee director will fully vest and be exercisable with respect to 100% of the shares subject to such options and other equity awards.
Pursuant to the Board’s stock ownership guidelines, adopted by the Board in October 2006 and most recently updated in January 2015, each independent director is expected to accumulate and hold an equivalent value of our common stock of three times their annual total cash compensation and to achieve this by five years from the date that the director joined the Board. Directors are expected to maintain this minimum amount of stock ownership throughout their tenure on the Board. As of December 31, 2017,2021, all of our directors met their ownership requirements.were in compliance with this policy.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2021, with respect to shares of our common stock that may be issued under our existing equity compensation plans.
(a) | (b) | (c) | ||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1)($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | |||||||||
Equity compensation plans: | ||||||||||||
Approved by stockholders (2) | 5,136,684 | 10.71 | 13,281,967 | |||||||||
Not approved by stockholders (3) | 131,282 | — | 24,654 |
(1) | The weighted average exercise price is calculated based solely on outstanding stock options. |
(2) | Includes the following plans: the 2006 Equity Incentive Plan (the “2006 Plan”), the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2015 Employee Stock Purchase Plan (the “2015 ESPP”). |
(3) | Includes the 2019 Inducement Plan. In the third quarter of 2019, the Company adopted the 2019 Inducement Plan and, subject to the adjustment provisions of the 2019 Inducement Plan, reserved 400,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the 2019 Inducement Plan. |
This section shall not be deemed to be “soliciting material,” or to be “filed” with the SEC, is not subject to the liabilities of Section 18 of the Securities Exchange Act and is not to be incorporated by reference into any filing of Rambus under the Securities Act of 1933, as amended, or the Securities Exchange Act, regardless of date or any other general incorporation language in such filing.
The following is the report of the Audit Committee of our Board of Directors with respect to our audited financial statements for the fiscal year ended December 31, 2017,2021, which include our consolidated balance sheets as of December 31, 20172021 and 20162020, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the fiscal years ended December 31, 2017, 20162021, 2020 and 2015,2019, and the notes thereto.
* | Mr. |
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ISSUES AND CORPORATE SOCIAL RESPONSIBILITY
Rambus recognizes that environmental, social and governance (“ESG”) issues are of increasing importance to many investors. At Rambus, we are committed to ethical, responsible and sustainable business practices. ESG and corporate social responsibility (“CSR”) is an enterprise-wide commitment and our Board of Directors monitors and supports our CSR efforts.
Rambus has published a CSR Report since 2020, and in 2022 published its first ESG Impact Report in accordance with Global Reporting Initiative (“GRI”) and Sustainability Accounting Standards Board (“SASB”) standards (available at www.rambus.com/corporate-social-responsibility/). This report outlines Rambus’ work related to ESG issues and outlines the company’s goals and processes related to ESG. In addition, we have put in place numerous processes and policies related to CSR and ESG including:
Rambus Vendor Code of Conduct and RBA Code of Conduct:
In 2021, Rambus became a member of the Responsible Business Alliance (“RBA”) and, as such, follows the RBA Code of Conduct in our worldwide operations. Rambus also has adopted a Vendor Code of Conduct (“Rambus Vendor Code”) based upon the RBA Code of Conduct that applies to all key suppliers. Rambus’s top suppliers have all certified to Rambus that they comply with the Rambus Vendor Code or the RBA Code of Conduct and Rambus audits/confirms such compliance annually. Rambus’s top manufacturing supplier TSMC, which makes up a majority of Rambus’s chip production spend is ISO 14001, ISO 45001 and ISO 50001 certified and in 2020 was the first semiconductor company to join the RE100 renewable energy initiative.
Human Rights, Diversity and Employee Well-Being
Rambus believes in the values and fundamental rights of humans and has adopted a Human Rights Statement that sets forth our Human Rights Principles, Approach and Implementation as they relate to the Rambus stakeholder community.
We also invest in the long-term development of and engagement with our employees by aspiring to have an increasingly diverse workforce and inclusive environment. We believe diverse teams expand creativity, lead to better decision-making, and enhance team member engagement and retention. Our Board of Directors periodically reviews our diversity and inclusion programs and processes to ensure continual improvement. We are committed to providing and supporting a work environment that promotes equality of opportunity among our employees and in 2021 we rolled out a company-wide employee diversity and inclusion training that will be conducted regularly moving forward. We strive for our workforce to be truly representative of all sections of society and for each employee to feel respected and able to perform at his or her best. In the U.S., 55.3% of our employee population is considered diverse and 20.9% is female.
Finally, Rambus prides itself on having an injury-free workplace and safety-based culture. We promote a healthy lifestyle and encourage employee health and wellness and work-life balance.
Sustainability
Our commitment to innovation and invention in our business extends directly to the way we view environmental excellence at Rambus. We are actively seeking out technology innovation opportunities to ensure our manufacturing processes, materials sourcing and technological advances are environmentally friendly. The Rambus Environmental, Health and Safety Policy is aligned with ISO 50001 standards for energy management and ensures local champions for EHS actively work towards environmental excellence globally at Rambus.
Our annual ESG Impact Report details specific data and metrics regarding Rambus’ commitments to environmental excellence including Greenhouse Gas Inventories and related emissions and energy usage, available at www.rambus.com/corporate-social-responsibility.
Community Building
We believe in making a positive impact in the communities where we live and work. From organizations dedicated to health, housing and development, animal welfare and children and families in need — we strive to empower the local community through philanthropic efforts. We also encourage our employees to donate to charitable organizations of their choice and the Company matches gifts to charities up to $1,000 per year per employee. Further, we encourage our employees to volunteer time each year to charitable causes. During fiscal 2021, we donated over $171,000 to charitable organizations in the U.S. and around the world.
Education
We seekto broaden the educational opportunities of students in our communities who demonstrate a passion for science and technology that extends beyond the classroom. Through STEM education and our “Innovator of the Future” scholarship, we are working to empower the next generation of inventors and are active in our communities when it comes to educational engagement.
The Board does not know of any other matters to be presented atduring the Annual Meeting. If any additional matters are properly presented or otherwise allowed to be considered atduring the Annual Meeting, the persons named in the enclosed proxy will have discretion to vote shares they represent in accordance with their own judgment on such matters.
It is important that your shares be represented at the meeting (virtually or by proxy), regardless of the number of shares which you hold. You are, therefore, urged to execute and return, at your earliest convenience, the accompanying proxy card in the envelope which has been enclosed.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Jae KimJohn Shinn
Jae KimJohn Shinn
Senior Vice President, General Counsel and Secretary
Sunnyvale,San Jose, California
March 9, 201811, 2022
Appendix A
RAMBUS INC.
2015 EQUITY INCENTIVE PLAN
(as amended March 8, 2018)
1.Purposes of the Plan. The purposes of this Plan are:
to attract and retain the best available personnel for positions of substantial responsibility,
to provide incentives to individuals who perform services to the Company, and
to promote the success of the Company’s business.
The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.
2.Definitions. As used herein, the following definitions will apply:
(a) “Administrator” means the Board or any of its Committees that will be administering the Plan in accordance with Section 4 of the Plan.
(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan.
(c) “Award” means, individually or collectively, a grant under the Plan of Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and other stock or cash awards as the Administrator may determine.
(d) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.
(e) “Board” means the Board of Directors of the Company.
(f) “Change in Control” means the occurrence of any of the following events:
(i) A change in the ownership of the Companywhich occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than 50% of the total voting power of the stock of the Company will not be considered a Change in Control; provided, however, that for purposes of this clause (i), (1) the acquisition of beneficial ownership of additional stock by any one Person who is considered to beneficially own more than 50% of the total voting power of the stock of the Company will not be considered a Change in Control; and (2) if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of
50% or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change in Control under this clause (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or
(ii) A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii) A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(g) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
(h) “Committee” means a committee of independent, Outside Directors appointed by the Board in accordance with Section 4 hereof.
(i) “Common Stock” means the common stock of the Company.
(j) “Company” means Rambus Inc., a Delaware corporation, or any successor thereto.
(k) “Consultant” means any natural person, including an advisor, engaged by the Company or a Parent or Subsidiary to render bona fide services to such entity, provided the services: (i) are not in connection with the offer or sale of securities in a capital-raising transaction, and (ii) do not directly promote or maintain a market for the Company’s securities, in each case, within the meaning of FormS-8 promulgated under the Securities Act, and provided, further, that a Consultant will include only those persons to whom the issuance of Shares may be registered under FormS-8 promulgated under the Securities Act.
(l) “Director” means a member of the Board.
(m) “Disability” means total and permanent disability as defined in Section 22(e) (3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform andnon-discriminatory standards adopted by the Administrator from time to time.
(n) “Dividend Equivalent” means a credit, payable in cash or Shares, made at the discretion of the Administrator or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one Share for each Share represented by an Award held by such Participant. Subject to the provisions of Section 6, Dividend Equivalents may be subject to the same vesting restrictions as the related Shares subject to an Award, at the discretion of the Administrator.
(o) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company.
(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q) “Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for awards of the same type (which may have higher or lower exercise prices and different terms), awards of a different type, and/or cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is increased or reduced. The Administrator may not implement an Exchange Program.
(r) “Fair Market Value” means, as of any date, the value of Common Stock as the Administrator may determine in good faith by reference to the price of such stock on any established stock exchange or a national market system on the day of determination if the Common Stock is so listed on any established stock exchange or a national market system. If the Common Stock is not listed on any established stock exchange or a national market system, the value of the Common Stock as the Administrator may determine in good faith.
(s) “Fiscal Year” means the fiscal year of the Company.
(t) “Incentive Stock Option” means an Option that by its terms qualifies and is otherwise intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(u) “Inside Director” means a Director who is an Employee.
(v) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
(w) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(x) “Option” means a stock option granted pursuant to the Plan.
(y) “Outside Director” means a Director who is not an Employee.
(z) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(aa) “Participant” means the holder of an outstanding Award.
(bb) “Performance Period” means any Fiscal Year of the Company or such other period as determined by the Administrator in its sole discretion.
(cc) “Performance Share” means an Award denominated in Shares which may be earned in whole or in part upon attainment of performance objectives or other vesting criteria as the Administrator may determine pursuant to Section 11.
(dd) “Performance Unit” means an Award which may be earned in whole or in part upon attainment of performance objectives or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section 11.
(ee) “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.
(ff) “Plan” means this 2015 Equity Incentive Plan.
(gg) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 8 of the Plan, or issued pursuant to the early exercise of an Option.
(hh) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company.
(ii) “Rule16b-3” means Rule16b-3 of the Exchange Act or any successor to Rule16b-3, as in effect when discretion is being exercised with respect to the Plan.
(jj) “Section 16(b)” means Section 16(b) of the Exchange Act.
(kk) “Service Provider” means an Employee, Director or Consultant.
(ll) “Share” means a share of the Common Stock, as adjusted in accordance with Section 16 of the Plan.
(mm) “Stock Appreciation Right” means an Award, granted alone or in connection with an Option, that pursuant to Section 10 is designated as a Stock Appreciation Right.
(nn) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(oo) “Successor Corporation” has the meaning given to such term in Section 16(c) of the Plan.
3.Stock Subject to the Plan.
(a)Stock Subject to the Plan. Subject to the provisions of Section 16 of the Plan, the maximum aggregate number of Shares that may be awarded and sold under the Plan is 9,500,000 Shares, plus (i) 8,158,396, which represents the number of Shares that remained available for grant under the Company’s 2006 Equity Incentive Plan (the “Existing Plan”) on the date this Plan became effective, plus (ii) the number of Shares that are subject to awards under the Existing Plan that, on or after the date this Plan became effective, are forfeited, cancelled, exchanged or surrendered or terminate under the Existing Plan. The Shares may be authorized, but unissued, or reacquired Common Stock. In addition, no more than 10,000,000 Shares may be granted pursuant to Options intended to qualify as Incentive Stock Options.
(b)Full Value Awards. Any Shares subject to Awards granted with an exercise price less than the Fair Market Value on the date of grant of such Awards will be counted against the numerical limits of this Section 3 as 1.5 Shares for every one Share subject thereto. Further, if Shares acquired pursuant to any such Award are forfeited or repurchased by the Company and would otherwise return to the Plan pursuant to Section 3(c), 1.5 times the number of Shares so forfeited or repurchased will return to the Plan and will again become available for issuance.
(c)Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, all of the Shares covered by the Award (that is, Shares actually issued pursuant to a Stock Appreciation Right, as well as the Shares that represent payment of the exercise price) shall cease to be available under the Plan. However, Shares that have actually been issued under the Plan under any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the tax and exercise price of an Award will not become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan. Notwithstanding the foregoing and, subject to adjustment provided in Section 16, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall equal the aggregate Share number stated in Section 3(a), plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan under this Section 3(c).
(d)Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan.
4.Administration of the Plan.
(a)Procedure.
(i)General Administration; Multiple Administrative Bodies. The Plan will be administered by a Committee or Committees as determined by the Board, which will be constituted to satisfy Applicable Laws. Different Committees with respect to different groups of Service Providers may administer the Plan.
(ii)Rule16b-3. To the extent desirable to qualify transactions hereunder as exempt underRule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule16b-3.
(iii)Delegation of Authority forDay-to-Day Administration. Except to the extent prohibited by Applicable Law, the Administrator may delegate to one or more individuals theday-to-day administration of the Plan and any of the functions assigned to it in this Plan. Such delegation may be revoked at any time.
(b)Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom Awards may be granted hereunder;
(iii) to determine the number of Shares to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine;
(vi) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;
(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating tosub-plans established for the purpose of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws;
(viii) to modify or amend each Award (subject to Section 6 and Section 21(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(a)(ii) of the Plan regarding Incentive Stock Options);
(ix) to allow Participants to satisfy tax withholding obligations in such manner as prescribed in Section 17 of the Plan;
(x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator;
(xi) to determine whether Awards (other than Options or SARs) will be adjusted for Dividend Equivalents;
(xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award pursuant to such procedures as the Administrator may determine;
(xiii) to impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award, including without limitation, (A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified brokerage firm for such resales or other transfers;
(xiv) to require that the Participant’s rights, payments and benefits with respect to an Award (including amounts received upon the settlement or exercise of an Award) will be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award, as may be specified in an Award Agreement at the time of the Award, or later if (A) Applicable Laws require the Company to adopt a policy requiring such reduction, cancellation, forfeiture or recoupment, or (B) pursuant to an amendment of an outstanding Award; and
(xv) to make all other determinations deemed necessary or advisable for administering the Plan.
(c)Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards.
5.Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units, Performance Shares and such other cash or stock awards as the Administrator determines may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.
6.Limitations.
(a)Incentive Stock Options.
(i)$100,000 Limitation. Notwithstanding any designation of an Option as an Incentive Stock Option, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a)(i), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted.
(ii)Maximum Option Term. In the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement.
(iii)Option Exercise Price. In the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant.
(b)Share Limitations. Subject to Section 16, the following limitations shall apply to Awards under the Plan:
(i)Options. During any Fiscal Year, no Participant will be granted Options covering more than 1,000,000 Shares; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted Options covering up to an additional 1,000,000 Shares;
(ii)Restricted Stock. During any Fiscal Year, no Participant will receive more than an aggregate of 300,000 Shares of Restricted Stock; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional 300,000 Shares of Restricted Stock;
(iii)Restricted Stock Units. During any Fiscal Year, no Participant will receive more than an aggregate of 300,000 Restricted Stock Units; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional 300,000 Restricted Stock Units;
(iv)Stock Appreciation Rights. During any Fiscal Year, no Participant will be granted Stock Appreciation Rights covering more than 1,000,000 Shares; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional 1,000,000 Shares; and
(v)Performance Units / PerformanceShares. During any Fiscal Year, no Participant will receive (1) Performance Units having an initial value greater than $3,000,000, and (2) more than 300,000 Performance Shares; provided, however, that in connection with a Participant’s initial service as an Employee, an Employee may be granted up to an additional 300,000 Performance Shares.
(c)Exchange Program. The Administrator may not institute an Exchange Program.
(d)Outside Director Limitations. No Outside Director may be granted, in any Fiscal Year, Awards with a grant date fair value (determined in accordance with U.S. generally accepted accounting principles) of greater than $300,000, increased to $500,000 in the Fiscal Year of his or her initial service as an Outside Director. Any Awards granted to an individual while he or she was an Employee, or while he or she was a Consultant but not an Outside Director, will not count for purposes of the limitations under this Section 6.
(e)Vesting Limits. Awards granted under the Plan shall vest no earlier than the one (1) year anniversary of the Award’s date of grant, provided that the Administrator, in its sole discretion, may provide an Award may accelerate vesting by reason of the Participant’s death, Disability or retirement, or upon a major capital change of the Company (including without limitation upon the occurrence of a Change in Control, merger of the Company with or into another corporation or entity, or similar transaction), and provided further, that, notwithstanding the foregoing in this sentence, Awards that result in the issuance ofan aggregate of up to 5% of the Shares reserved for issuance under Section 3(a) may be granted to Service Providers, or outstanding Awards modified, without regard to such minimum vesting, exercisability and distribution provisions.
(f)Dividend Payments. Dividends and other distributions payable with respect to Shares subject to Awards (including Dividend Equivalents) will not be paid before the underlying Shares vest.
7.Stock Options.
(a)Grant of Options. Subject to the terms and conditions of the Plan, Options may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
(b)Number of Shares. Subject to the limitations contained in Section 6, the Administrator will have complete discretion to determine the number of Shares subject to Options granted to any Participant.
(c)Term of Option. The Administrator will determine the term of each Option in its sole discretion; provided, however, that the term will be no more than ten (10) years from the date of grant thereof, subject to the provisions of Section 6.
(d)Option Exercise Price and Consideration.
(i)Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the Administrator, but will be no less than 100% of the Fair Market Value per Share on the date of grant, subject to the provisions of Section 6.
(ii)Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised.
(iii)Form of Consideration. The Administrator will determine the acceptable form(s) of consideration for exercising an Option, including the method of payment, to the extent permitted by Applicable Laws.
(e)Exercise of Option.
(i)Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share.
An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with an applicable withholding taxes). No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 16 of the Plan.
(ii)Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iii)Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
(iv)Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan.
8.Restricted Stock.
(a)Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.
(b)Restricted Stock Agreement. Subject to the limitations contained in Section 6, each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction (if any), the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed.
(c)Transferability. Except as provided in this Section 8, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction.
(d)Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.
(e)Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. Subject to the vesting limitations contained in Section 6, the Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.
(f)Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise.
(g)Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid.
(h)Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan.
9.Restricted Stock Units.
(a)Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. Subject to the limitations contained in Section 6, each Restricted Stock Unit grant will be evidenced by an Award Agreement that will specify such other terms and conditions as the Administrator, in its sole discretion, will determine, including all terms, conditions, and restrictions related to the grant, the number of Restricted Stock Units and the form of payout, which, subject to Section 9(d), may be left to the discretion of the Administrator.
(b)Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. Each Award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the vesting criteria, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(c)Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as specified in the Award Agreement. The Administrator may set vesting criteria based upon the achievement of Company-wide, divisional, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws or any other basis determined by the Administrator in its discretion. Subject to the vesting limitations contained in Section 6, after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout.
(d)Form and Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator, in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again will be available for grant under the Plan.
(e)Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company.
10.Stock Appreciation Rights.
(a)Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion.
(b)Number of Shares. Subject to the limitations contained in Section 6, the Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Participant.
(c)Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan, provided, however, that the exercise price will be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant.
(d)Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.
(e)Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement; provided, however, that the term will be no more than ten (10) years from the date of grant thereof. Notwithstanding the foregoing, the rules of Section 7(e) also will apply to Stock Appreciation Rights.
(f)Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying:
(i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times
(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.
At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some combination thereof.
11.Performance Units and Performance Shares.
(a)Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. Subject to the limitations contained in Section 6, the Administrator will have complete discretion in determining the number of Performance Units/Shares granted to each Participant.
(b)Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.
(c)Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Participant. Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion.
(d)Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. Subject to the vesting limitations contained in Section 6, after the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share.
(e)Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof.
(f)Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan.
12.Dividend Equivalents. The Administrator, in its discretion, may provide in the Award Agreement evidencing any Award that the Participant will be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Shares having a record date prior to the date on which the Awards are settled or forfeited. Subject to the limitations contained in Section 6, the Dividend Equivalents, if any, will be credited to an Award in such manner and subject to such terms and conditions as determined by the Administrator in its sole discretion. In the event of a dividend or distribution paid in Shares or any other adjustment made upon a change in the capital structure of the Company as described in Section 16, appropriate adjustments will be made to the Participant’s Award of Performance Units so that it represents the right to receive upon settlement any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant would be entitled by reason of the consideration issuable upon settlement of the Award, and all such new, substituted or additional securities or other property will be immediately subject to the same vesting and settlement conditions as are applicable to the Award. Dividend Equivalents will be subject to the Fiscal Year limits applicable to the underlying Restricted Stock Unit, Performance Share or Performance Unit Award as set forth in Section 6, as applicable, hereof.
13. [RESERVED]
14.Leaves of Absence. Unless the Administrator provides otherwise, or except as otherwise required by Applicable Laws, vesting of Awards granted hereunder will be suspended starting on the 30th consecutive day of any unpaid leave of absence approved by the Company, with such suspension of vesting terminating upon the
Participant’s resumption of service with the Company. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option.
15.Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate.
16.Adjustments; Dissolution or Liquidation; Merger or Change in Control.
(a)Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,split-up,spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits set forth in Sections 3 and 6.
(b)Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action.
(c)Change in Control.
(i) In the event of a Change in Control, subject to Section 16(c)(ii) and any vesting acceleration provisions in an Award or other agreement, outstanding Awards shall be treated in the manner provided in the agreement relating to the Change in Control (including as the same may be amended), including, without limitation:
(1) the continuation of the outstanding Award by the Company, if the Company is a surviving corporation;
(2) the assumption of the outstanding Awards, or substitution of equivalent Awards, by the acquiring or succeeding corporation (or an affiliate thereof) (the “Successor Corporation”) with appropriate adjustments as to the number and kind of shares and prices;
(3) that outstanding Awards will vest and become exercisable (and for the avoidance of doubt, notwithstanding the vesting limitations in Section 6), realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such Change in Control, and, to the extent the Administrator determines, terminate upon or immediately prior to the effectiveness of such merger or Change in Control;
(4) (A) the termination of an Award in exchange for an amount of cash and/or property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction the Administrator determines in good faith that no amount would have
been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or
(5) any combination of the foregoing.
Such agreement shall not be required to treat all Awards or individual types of Awards similarly in the Change in Control.
(ii) In the event that the Successor Corporation refuses to assume, continue or substitute for the Award (and for the avoidance of doubt, notwithstanding the vesting limitations in Section 6), the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals will be deemed achieved at target levels as to a prorated portion of such Award based on the portion of the applicable performance period that has lapsed through the date of the merger or Change in Control, and all other vesting criteria will be deemed achieved as to such prorated portion of such Award. In addition, if an Option or Stock Appreciation Right is not assumed or substituted for in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option or Stock Appreciation Right will terminate upon the expiration of such period.
With respect to Awards granted to Outside Directors that are assumed or substituted for, if on the date of or following such assumption or substitution the Participant’s status as a Director or a director of the Successor Corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares subject thereto, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance goals will be deemed achieved at target levels as to a prorated portion of such Award based on the portion of the applicable performance period that has lapsed through the date of the merger or Change in Control, and all other vesting criteria will be deemed achieved as to such prorated portion of such Award.
For the purposes of this subsection (c), an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Performance Share or Performance Unit which the Administrator can determine to pay in cash, the fair market value of the consideration received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, Performance Share or Performance Unit, for each Share subject to such Award (or in the case of Performance Units denominated in dollars, the number of implied shares determined by dividing the value of the Performance Units by the per share consideration received by holders of Common Stock in the Change in Control), to be solely common stock of the Successor Corporation equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.
Notwithstanding anything in this Section 16(c) to the contrary, an Award that vests, is earned orpaid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals only to reflect the Successor Corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.
Notwithstanding anything in this Section 16(c) to the contrary, if a payment under an Award Agreement is subject to Code Section 409A and if the change in control definition contained in the Award Agreement does not comply with the definition of “change of control” for purposes of a distribution under Code Section 409A, then any payment of an amount that is otherwise accelerated under this Section will be delayed until the earliest time that such payment would be permissible under Code Section 409A without triggering any penalties applicable under Code Section 409A.
17.Tax Withholding
(a)Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld with respect to such Award (or exercise thereof).
(b)Withholding Arrangements. The Administrator, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (a) paying cash (or cash equivalent), (b) electing to have the Company withhold otherwise deliverable cash or Shares having a fair market value equal to the minimum statutory amount required to be withheld or such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole discretion, (c) delivering to the Company already-owned Shares having a fair market value equal to the minimum statutory amount required to be withheld, or such greater amount as the Administrator may determine if such amount would not have adverse accounting consequences, as the Administrator determines in its sole discretion, or (d) selling a sufficient number of Shares otherwise deliverable to the Participant through such means as the Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to the amount required to be withheld. The fair market value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld.
(c)Compliance With Code Section 409A. Awards will be designed and operated in such a manner that they are either exempt from the application of, or comply with, the requirements of Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A, the Award will be granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code Section 409A.
18.No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the extent permitted by Applicable Laws.
19.Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.
20.Term of Plan. Subject to Section 25of the Plan, the Plan will become effective upon its adoption by the Board. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 21of the Plan.
21.Amendment and Termination of the Plan.
(a)Amendment and Termination. The Board or the Administrator may at any time amend, alter, suspend or terminate the Plan.
(b)Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws.
(c)Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.
22.Conditions Upon Issuance of Shares.
(a)Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance.
(b)Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required.
23.Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction or to complete or comply with the requirements of any registration or other qualification of the Shares under any state, federal or foreign law or under the rules and regulations of the Securities and Exchange Commission, the stock exchange on which Shares of the same class are then listed, or any other governmental or regulatory body, which authority, registration, qualification or rule compliance is deemed by the Company’s counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority, registration, qualification or rule compliance will not have been obtained.
24.Forfeiture Events. The Administrator may specify in an Award Agreement that the Participant’s rights, payments, and benefits with respect to an Award will be subject to reduction, cancellation, forfeiture, or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but will not be limited to, fraud, breach of a fiduciary duty, restatement of financial statements as a result of fraud or willful errors or omissions, termination of employment for cause, violation of material Company and/or Subsidiary policies, breach ofnon-competition, confidentiality, or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Subsidiaries. The Administrator may also require the application of this Section with respect to any Award previously granted to a Participant even without any specified terms being included in any applicable Award Agreement to the extent required under Applicable Laws.
25.Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
Appendix B
RAMBUS INC.
2015 EMPLOYEE STOCK PURCHASE PLAN
(as amended March 8, 2018)
The following constitutes the provisions of the 2015 Employee Stock Purchase Plan of Rambus Inc.
1.Purpose. The purpose of the Plan is to provide Employees with an opportunity to purchase Common Stock through accumulated Contributions (as defined in Section 2(i) below). It is the intention of the Company to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the Plan, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.
2. Definitions.
(a) “Administrator” means the Board or any committee designated by the Board to administer the Plan pursuant to Section 14.
(b) “Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.
(c) “Board” means the Board of Directors of the Company.
(d) “Change of Control” means the occurrence of any of the following events:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or
(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or
(iii) The consummation of a merger or consolidation of the Company, with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company, or such surviving entity or its parent outstanding immediately after such merger or consolidation; or
(iv) A change in the composition of the Board occurring within a two (2)-year period, as a result of which fewer than a majority of the Directors are Incumbent Directors. “Incumbent Directors” means Directors who either (A) are Directors as of the effective date of the Plan (pursuant to Section 23 hereof), or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those Incumbent Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of Directors of the Company).
For the avoidance of doubt, a transaction will not constitute a Change of Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(e) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code.
(f) “Common Stock” means the common stock of the Company.
(g) “Company” means Rambus Inc., a Delawarecorporation.
(h) “Compensation” means an Employee’s base straight time gross earnings, but exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses and other compensation. The Administrator, in its discretion, may on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.
(i) “Contributions” means the payroll deductions and other additional payments to the Company that the Company may permit to be made by a participant to fund the exercise of options granted pursuant to the Plan.
(j) “Designated Subsidiary” means any Subsidiary that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.
(k) “Director” means a member of the Board.
(l) “Employee” means any individual who is a common law employee of an Employer and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under Applicable Law) for purposes of any separate Offering. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the start of such leave. The Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date, determine (on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury RegulationSection 1.423-2) that the definition of Employee will or will not include an individual if he or she: (1) has not completed at least two years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (2) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (3) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), or (4) is a highly compensated employee under Section 414(q) of the Code with compensation above a certain level or who is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to each Offering in an identical manner to all highly compensated individuals of the Employer whose Employees are participating in that Offering. Each exclusion shall be applied with respect to an Offering in a manner complying with U.S. Treasury RegulationSection 1.423-2(e)(2). Except as required by Applicable Law, any time-based eligibility requirements will be determined as of the Enrollment Date of the applicable Offering Period.
(m) “Employer” means any one or all of the Company and its Designated Subsidiaries.
(n) “Enrollment Date” means the first Trading Day of each Offering Period.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(p) “Exercise Date” means the first Trading Day on or after May 1 and November 1 of each year. The first Exercise Date under the Plan will be November 2, 2015.
(q) “Fair Market Value” means, as of any date and unless the Administrator determines otherwise, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for the Common Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported inThe Wall Street Journal or such other source as the Administrator deems reliable, or;
(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value will be the mean of the closing bid and asked prices for the Common Stock on the date of determination, as reported inThe Wall Street Journal or such other source as the Administrator deems reliable, or;
(iii) In the absence of an established market for the Common Stock, its Fair Market Value will be determined in good faith by the Administrator.
(r) “New Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.
(s) “Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4. For purposes of this Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the extent permitted by U.S. Treasury RegulationSection 1.423-2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury RegulationSection 1.423-2(a)(2) and (a)(3).
(t) “Offering Periods” means the periods of approximately six (6) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 1 and November 1 of each year and terminating on the first Trading Day on or after the May 1 andNovember 1Offering Period commencement date approximately six (6) months later. The first Offering Period under the Plan will commence on November 2, 2015, subject to the approval of the Plan by the stockholders of the Company at the 2015 Annual Meeting of Stockholders, and the first Exercise Date under the Plan will be May 2, 2016. The second Offering Period under the Plan will commence on May 2, 2016. The duration and timing of Offering Periods may be changed pursuant to Sections 4 and 20 of this Plan.
(u) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(v) “Plan” means this 2015 Employee Stock Purchase Plan.
(w) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided however, that the Purchase Price may be determined for subsequent Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other Applicable Law or regulation) or pursuant to Section 20.
(x) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(y) “Trading Day” means a day on which the U.S. national stock exchanges and the Nasdaq System are open for trading.
(z) “U.S. Treasury Regulations” means the Treasury Regulations of the Code. Reference to a specific Treasury Regulation or Section of the Code will include such Treasury Regulation or Section, any valid regulation promulgated under such Section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such Section or regulation.
3.Eligibility.
(a)Offering Periods. Any individual who is an Employee as of the Enrollment Date of any Offering Period will be eligible to participate in such Offering Period, subject to the requirements of Section 5.
(b)Non-U.S. Employees. Employees who are citizens or residents of anon-U.S. jurisdiction (without regard to whether they are also citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.
(c)Limitations. Any provisions of the Plan to the contrary notwithstanding, no Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.
4.Offering Periods. The Plan will be implemented by consecutive Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 1 and November 1 of each year. The first Offering Period under the Plan will commence on November 2, 2015, subject to the approval of the Plan by the stockholders of the Company at the 2015 Annual Meeting of Stockholders, and the first Exercise Date under the Plan will be May 2, 2016. The Second Offering Period under the Plan will commence on May 2, 2016, or on such other date as the Administrator will determine, and continuing thereafter until terminated in accordance with Section 20. The Administrator will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future Offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter.
5.Participation. An Employee who is eligible to participate in the Plan pursuant to Section 3(a) may become a participant by (i) submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Enrollment Date, a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose, or (ii) following an electronic or other enrollment procedure prescribed by the Administrator.
6.Contributions.
(a) At the time a participant enrolls in the Plan pursuant to Section 5, he or she will elect to have payroll deductions made on each payday or other Contributions (to the extent permitted by the Administrator) made during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation which he or she receives on each such payday. The Administrator, in its sole discretion, may permit all participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Offering Period, provided that payment through means other than payroll deductions shall be permitted only if the participant has not already had the maximum permitted amount withheld through payroll deductions during the Offering Period. A participant’s subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
(b) Payroll deductions authorized by a participant will commence on the first payday following the Enrollment Date and will end on the last payday in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10.
(c) All Contributions made for a participant will be credited to his or her account under the Plan and will be made in whole percentages only. A participant may not make any additional payments into such account.
(d) A participant may discontinue his or her participation in the Plan as provided in Section 10, or may increase or decrease the rate of his or her Contributions during the Offering Period by (i) properly completing and submitting to the Company’s payroll office (or its designee), on or before a date prescribed by the Administrator prior to an applicable Exercise Date, a new subscription agreement authorizing the change in Contribution rate in the form provided by the Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by the Administrator; provided, however, that unless the Administrator provides otherwise, a participant may reduce, but not increase, his or her Contribution rate during an Offering Period for that Offering Period (it being understood that a participant may increase the Contribution rate for future Offering Periods prior to the commencement of any such Offering Period). If a participant has not followed such procedures to change the rate of Contributions, the rate of his or her Contributions will continue at the originally elected rate throughout the Offering Period and future Offering Periods (unless terminated as provided in Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of Contribution rate changes that may be made by participants during any Offering Period and may establish such other conditions or limitations as it deems appropriate for Plan administration. Any change in payroll deduction rate made pursuant to this Section 6(d) will be effective as of the first full payroll period following five (5) business days after the date on which the change is made by the participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly).
(e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a participant’s Contributions may be decreased to zero percent (0%) at any time during an Offering Period. Subject to Section 423(b)(8) of the Code and Section 3(c) hereof, Contributions will recommence at the rate originally elected by the participant effective as of the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10.
(f) Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow Employees to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, and (ii) the Administrator determines that cash contributions are permissible under Section 423 of the Code.
(g) At the time the option is exercised, in whole or in part, or at the time some or all of the Company’s Common Stock issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the participant must make adequate provision for the Company’s or the Employer’s federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of
the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs). At any time, the Company or the Employer may, but will not be obligated to, withhold from the participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the Employee. In addition, the Company or the Employer, may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury RegulationSection 1.423-2(f).
7.Grant of Option. On the Enrollment Date of each Offering Period, each Employee participating in such Offering Period will be granted an option to purchase on the Exercise Date(s) of such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such participant’s Contributions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event will a participant be permitted to purchase during each Offering Period more than five thousand (5,000) shares of Common Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase will be subject to the limitations set forth in Sections 3(c) and 13. The Employee may accept the grant of such option with respect to any Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that a participant may purchase during each Offering Period. Exercise of the option will occur as provided in Section 8, unless the participant has withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period.
8.Exercise of Option.
(a) Unless a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date, and the maximum number of full shares subject to the option will be purchased for such participant at the applicable Purchase Price with the accumulated Contributions in his or her account. No fractional shares of Common Stock will be purchased; any Contributions accumulated in a participant’s account which are not sufficient to purchase a full share will be returned to the participant. Any other funds left over in a participant’s account after the Exercise Date will be returned to the participant. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.
(b) Notwithstanding any contrary Plan provision, if the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and either (x) continue any Offering Period then in effect, or (y) terminate any Offering Period then in effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common Stock available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares of Common Stock for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.
9.Delivery. As soon as administratively practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each participant, as appropriate, the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be
deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. No participant will have any voting, dividend, or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the participant as provided in this Section 9.
10.Withdrawal.
(a) Under procedures established by the Administrator, a participant may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s payroll office (or its designee) a written notice of withdrawal in the form prescribed by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the Administrator. All of the participant’s Contributions credited to his or her account will be paid to such participant as promptly as practicable after the effective date of his or her withdrawal and such participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will be made for such Offering Period. If a participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period unless the participantre-enrolls in the Plan in accordance with the provisions of Section 5.
(b) A participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws.
11.Termination of Employment. Upon a participant’s ceasing to be an Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such participant’s option will be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment will be treated as continuing to be an Employee for the participant’s customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice.
12.Interest. No interest will accrue on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, shall apply to all participants in the relevant Offering except to the extent otherwise permitted by U.S. Treasury RegulationSection 1.423-2(f).
13.Stock.
(a) Subject to adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of shares of Common Stock which will be made available for sale under the Plan will be 4,000,000 shares of Common Stock.
(b) Shares of Common Stock to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse.
14.Administration. The Board or a committee of members of the Board who will be appointed from time to time by, and will serve at the pleasure of, the Board, will administer the Plan. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to designate separate Offerings under the Plan, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to
establish such procedures that it deems necessary for administration of the Plan (including, without limitation, to adopt such procedures andsub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the United States, the terms of whichsub-plans may take precedence over other provisions of this Plan, with the exception of Section 13(a) hereof, but unless otherwise superseded by the terms of suchsub-plan, the provisions of this Plan will govern the operation of suchsub-plan). Unless otherwise determined by the Administrator, the Employees eligible to participate in each suchsub-plan will participate in a separate Offering. The Administrator, in its sole discretion and on such terms and conditions as it may provide, may delegate to one or more individuals all or any part of its authority and powers under the Plan. Without limiting the generality of this Section 14, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury RegulationSection 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of anon-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every finding, decision and determination made by the Administrator (or its designee) will, to the full extent permitted by law, be final and binding upon all parties.
15.Designation of Beneficiary.
(a) A participant may designate a beneficiary who is to receive any shares of Common Stock and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may designate a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(b) The participant may change such designation of beneficiary at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(c) All beneficiary designations under this Section 15 will be made in such form and manner as the Administrator may prescribe from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by participants innon-U.S. jurisdictions to the extent permitted by U.S. Treasury RegulationSection 1.423-2(f).
16.Transferability. Neither Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw from an Offering Period in accordance with Section 10.
17.Use of Funds. The Company may use all Contributions received or held by the Company under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions, except under Offerings in which applicable local law requires that Contributions to the Plan by participants be segregated from
the Company’s general corporate funds and/or deposited with an independent third party for participants innon-U.S. jurisdictions. Until shares of Common Stock are issued under the Plan (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a participant will only have the rights of an unsecured creditor with respect to such shares.
18.Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of Common Stock purchased and the remaining cash balance, if any.
19.Adjustments, Dissolution, Liquidation, Merger or Change of Control.
(a)Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation,split-up,spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Administrator will adjust the number and class of Common Stock which may be delivered under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, and the numerical limits of Sections 7 and 13.
(b)Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date, and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. The Administrator will notify each participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
(c)Merger or Change of Control. In the event of a merger or Change of Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, any Offering Period then in progress will be shortened by setting a New Exercise Date and any Offering Period then in progress will end on the New Exercise Date. The New Exercise Date will be before the date of the Company’s proposed merger or Change of Control. The Administrator will notify each participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the participant’s option has been changed to the New Exercise Date and that the participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10.
20.Amendment or Termination.
(a) The Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination can affect options previously granted under the Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date if the Administrator determines that the termination or suspension of the Plan is in the best interests of the Company and its stockholders. Except as provided in Section 19 and this Section 20, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law, regulation or stock exchange rule), the Company will obtain stockholder approval in such a manner and to such a degree as required.
(b) Without stockholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Administrator will be entitled to change the Offering Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable which are consistent with the Plan.
(c) In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
(i) amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;
(ii) altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price;
(iii) shortening any Offering Period by setting a New Exercise Date, including an Offering Period underway at the time of the Administrator action;
(iv) reducing the maximum percentage of Compensation a participant may elect to set aside as Contributions; and
(v) reducing the maximum number of Shares a participant may purchase during any Offering Period.
Such modifications or amendments will not require stockholder approval or the consent of any Plan participants.
21.Notices. All notices or other communications by a participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22.Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued with respect to an option under the Plan unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder, the Exchange Act, and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
23.Term of Plan. The Plan will become effective upon the earlier to occur of its adoption by the Board or its approval by the stockholders of the Company. It will continue in effect until terminated under Section 20.
24.Code Section 409A. The Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A. Notwithstanding the foregoing, the Company will have no liability to a participant or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase Common Stock under the Plan is compliant with Code Section 409A.
25.Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
26.Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of California (except itschoice-of-law provisions).
27.Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any participant, such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan, and the Plan will be construed and enforced as to such jurisdiction or participant as if the invalid, illegal or unenforceable provision had not been included.
SAMPLE SUBSCRIPTION AGREEMENT
RAMBUS INC.
2015 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
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I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
SAMPLE WITHDRAWAL NOTICE
RAMBUS INC.
2015 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Rambus Inc. 2015 Employee Stock Purchase Plan which began on , (the “Enrollment Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.
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Rambus®ATTN: SECRETARY1050 ENTERPRISE WAY, 4453 NORTH FIRST STREET, SUITE 700 SUNNYVALE,100 SAN JOSE, CALIFORNIA 94089
95134 SCAN TO VIEW MATERIALS & VOTE VOTE BY INTERNET
Before The Meeting - Go to www.proxyvote.com
or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before thecut-off date or meeting date.on April 27, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting—Meeting - Go to www.virtualshareholdermeeting.com/RMBS2018
RMBS2022 You may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
VOTE BYPHONE— PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before thecut-off date or meeting date.on April 27, 2022. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E39791-P02308D72008-P67770 KEEP THIS PORTION FOR YOUR RECORDS
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY
RAMBUS INC.
The Board of Directors unanimously recommends you
vote “For” the following Class I nominees:
1. Election of Directors
Nominees: 1a. Charles Kissner 1b. Necip Sayiner 1c. Luc Seraphin For Against Abstain The Board of Directors recommends you vote “For” theNominees: For Against Abstain following proposals: For Against Abstain1a. E. Thomas Fisher ! ! ! 2. Ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022. 3. Advisory vote to approve named executive officer ! ! !
compensation.1b. Charles Kissner ! ! ! 3. Approval of an amendment to the Rambus 2015 Equity ! ! !Incentive Plan to increase the number of shares reservedfor issuance thereunder by 5,500,000 shares.1c. David Shrigley ! ! !4. Approval of an amendment to the Rambus 2015 EmployeeStock Purchase Plan to increase the number of shares ! ! !reserved for issuance thereunder by 2,000,000 shares.5. Ratification of PricewaterhouseCoopers LLP as our ! ! !independent registered public accounting firm for thefiscal year ending December 31, 2018.
NOTE: Such other business as may properly come before the
meeting or any adjournment ofor postponement thereof.
Please sign exactly as your name appears above.
When shares are registered in the names of two or more persons, whether as joint
tenants, as community property or otherwise, both or all of such persons should sign.
When signing as attorney, executor, administrator, trustee, guardian or in another
fiduciary capacity, please give full title as such. If a corporation, please sign in full
corporate name by President or other authorized person. If a partnership, please sign
in partnership’s name by authorized person.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Rambus® ANNUAL MEETING OF STOCKHOLDERS APRIL 26, 201828, 2022 9:00 a.m. Pacific Time www.virtualshareholdermeeting.com/RMBS2018
RMBS2022 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report areCombined Document is available at www.proxyvote.com.E39792-P02308Rambus Inc.PROXYwww.proxyvote.com D72009-P67770 RAMBUS INC.PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 26, 2018.28, 2022. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF RAMBUS INC.
The undersigned stockholder of Rambus Inc., a Delaware corporation (the “Company”), hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and accompanying Proxy Statement, each dated March 9, 2018,11, 2022, and hereby appoints Ronald BlackLuc Seraphin and Jae Kim,John Shinn, and each of them as proxies andattorneys-in-fact, each with full power of substitution to represent the undersigned at the Annual Meeting of Stockholders of Rambus Inc. to be held on April 26, 201828, 2022 at 9:00 a.m. Pacific Time, at www.virtualshareholdermeeting.com/RMBS2018RMBS2022 and at any adjournment or postponement thereof, and to vote all shares of common stock of the Company held of record by the undersigned as hereinafter specified upon the proposals listed on the reverse side.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS.
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF STOCKHOLDERS, PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE.SEE REVERSE SEE REVERSE SIDE CONTINUED AND TO BE SIGNED ONContinued and to be signed on reverse side SEE REVERSE SIDE SIDE