SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
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| ☐ | | Preliminary Proxy Statement |
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| ☐ | | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) |
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| ☒ | | Definitive Proxy Statement |
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| ☐ | | Definitive Additional Materials |
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| ☐ | | Soliciting Material Pursuant to§240.14a-12 §240.14a-12 |
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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| ☐ | | Fee computed on table below per Exchange Act Rules14a-6(i)(1) and0-11. |
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| ☐ | | Fee paid previously with preliminary materials. |
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| ☐ | | Check box if any part of the fee is offset as provided by Exchange Act Rule0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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You are cordially invited to attend the MACOM Technology Solutions Holdings, Inc.
20192022 Annual Meeting of Stockholders on Thursday,
February 28, 2019March 3, 2022 at 3:00 p.m. (Eastern Time). The meeting will be held at the
Radisson Hotel, located at 10Holiday Inn Express, 8 Independence Drive, Chelmsford, Massachusetts 01824.
Due to the ongoing public health impact of the COVID-19 pandemic, it could become necessary to change the date, time, location or means of holding the meeting. If any such change is made, we will announce the change in advance, and details regarding how to participate will be filed as additional proxy materials. Our board of directors has fixed the close of business on January
7, 20196, 2022 as the record date for determining those stockholders entitled to notice of, and to vote at, the annual meeting of our stockholders and any adjournments thereof.
The Notice of Annual Meeting of Stockholders and Proxy Statement, both of which accompany this letter, provide details regarding the business to be conducted at the annual meeting, including proposals for the election of
three directors (Proposal 1), an advisory vote to approve our executive compensation (Proposal 2)
, an advisory vote on the frequency of future advisory votes on executive compensation (Proposal 3) and
the ratification ofto ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September
27, 201930, 2022 (Proposal
4)3).
Our board of directors recommends that you vote FOR
each of the director nominees set forth in Proposal 1
and FOR Proposals 2 and
4 and vote to conduct an advisory vote on our executive compensation every three years with respect to Proposal 3. Each proposal is described in more detail in our Proxy Statement.
Your vote is very important. Please vote your shares promptly, whether or not you expect to attend the meeting in person. You may vote over the Internet, as well as by telephone, or, if you requested to receive printed proxy materials, by mailing a proxy or voting instruction card. If you attend the annual meeting, you may vote in person if you are eligible to do so, even if you have previously submitted your vote.
Sincerely,
John Croteau
Ambra R. Roth
Senior Vice President, General Counsel,
Human Resources and Chief Executive OfficerSecretary
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
FEBRUARY 28, 2019MARCH 3, 2022
The
20192022 Annual Meeting of Stockholders of MACOM Technology Solutions Holdings, Inc. (the “Annual Meeting”) will be held at the
Radisson Hotel, located at 10Holiday Inn Express, 8 Independence Drive, Chelmsford,
MassachusettsMA 01824, on Thursday,
February 28, 2019March 3, 2022 at 3:00 p.m. (Eastern Time)
for. Due to the
following purposes:ongoing public health impact of the COVID-19 pandemic, it could become necessary to change the date, time, location or means of holding the meeting. If any such change is made, we will announce the change in advance, and details on how to participate will be filed as additional proxy materials. The purposes of the Annual Meeting are to:
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| 1. | To electElect the three Class I directors nominated by our board of directors and named in the accompanying proxy materials to serve until the 2022 Annual Meeting2025 annual meeting of Stockholders;
stockholders; |
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| 2. | To conductConduct an advisory vote approving the compensation of our named executive officers for fiscal year 2018;
2021; |
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| 3. | To conduct an advisory vote on the frequency of future advisory votes on the compensation of our named executive officers;
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| 4. | To ratifyRatify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 27, 2019;30, 2022; and
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| 5. | To transact
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| 4. | Transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
Only
stockholdersholders of
recordour common stock at the close of business on January
7, 20196, 2022 (the “Record Date”) will be entitled to notice of and to vote at the Annual Meeting and any adjournments thereof.
In accordance with Securities and Exchange Commission rules, on or about January
16, 2019,14, 2022, we sent a Notice of Internet Availability of Proxy Materials and provided access to our proxy materials over the Internet to the holders of record and beneficial owners of our common stock as of the close of business on the Record Date.
Our stockholders and persons holding proxies from stockholders may attend the Annual Meeting. If your shares are registered in your name, you must bring a form of identification to the Annual Meeting. If your shares are held in the name of a broker, trust, bank or other nominee, you must bring a proxy or letter from that broker, trust, bank or other nominee that confirms you are the beneficial owner of those shares.
Due to the COVID-19 pandemic, we request that you RSVP by emailing our investor relations department at ir@macom.com if you plan to attend the Annual Meeting in person so that we may ensure we have adequate space to allow for proper social distancing in an effort to promote the well-being of all that attend the Annual Meeting. |
By order of the board of directors, |
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Ambra R. Roth |
Vice President, General Counsel and Secretary |
By order of the board of directors,
Ambra R. Roth
Senior Vice President, General Counsel,
Human Resources and Secretary
Important Notice Regarding the Availability of Proxy Materials
For the Annual Meeting of Stockholders to be Held on
February 28, 2019March 3, 2022
This Proxy Statement and our Annual Report are available at:www.proxyvote.com
MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
FOR THE
20192022 ANNUAL MEETING OF STOCKHOLDERS
GENERAL INFORMATION CONCERNING PROXIES AND VOTING AT THE ANNUAL MEETING
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| GENERAL INFORMATION CONCERNING PROXIES AND VOTING AT THE ANNUAL MEETING |
Why did I receive these proxy materials?
We are providing these proxy materials in connection with the solicitation by the board of directors of MACOM Technology Solutions Holdings, Inc., a Delaware corporation (the “Company,”
“MACOM,” “we,” “us” or “our”), of proxies to be voted at our
20192022 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement of the Annual Meeting. In accordance with rules of the Securities and Exchange Commission (the “SEC”), on or about January
16, 2019,14, 2022, we sent a Notice of Internet Availability of Proxy Materials and provided access to our proxy materials over the Internet to the holders of record and beneficial owners of our common stock as of the close of business on January
7, 20196, 2022 (the “Record Date”).
The Annual Meeting will be held at the
Radisson Hotel, located at 10Holiday Inn Express, 8 Independence Drive, Chelmsford, Massachusetts 01824, on Thursday,
February 28, 2019March 3, 2022 at 3:00 p.m. (Eastern Time).
Due to the ongoing public health impact of the COVID-19 pandemic, it could become necessary to change the date, time, location or means of holding the Annual Meeting. If any such change is made, we will announce the change in advance, and details regarding how to participate will be filed as additional proxy materials.
What information is included in this Proxy Statement?
The information in this Proxy Statement relates to the proposals to be voted on at the Annual Meeting, the voting process, our board of directors and board committees, the compensation of current directors and our current named executive officers for fiscal year
20182021 and other information.
Holders of our common stock at the close of business on the Record Date are entitled to receive the Notice of Annual Meeting of Stockholders and vote at the Annual Meeting. As of the close of business on the Record Date, there were
65,372,18569,685,722 shares of our common stock outstanding and entitled to vote.
How many votes do I have?
On any matter that is submitted to a vote of our stockholders, the holders of our common stock are entitled to one vote per share of common stock held by them. Holders of our common stock are not entitled to cumulative voting in the election of directors.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Most stockholders hold their shares through a broker, trust, bank or other nominee rather than directly in their own names.
If, on the Record Date, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote over the Internet, by telephone or by filling out and returning a proxy card to ensure your vote is counted.
If, on the Record Date, your shares were held in an account at a brokerage firm, trust, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials
are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid legal proxy or letter from your broker, trust, bank or other nominee.
We are asking you to vote on the following matters in connection with the Annual Meeting:
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| 1. | The election of the three Class I directors nominated by our board of directors and named in the accompanying proxy materials to serve until the 2022 Annual Meeting2025 annual meeting of Stockholders; stockholders; |
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| 2. | An advisory vote approving the compensation of our named executive officers for fiscal year 2018; 2021; |
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| 3. | An advisory vote on the frequency of future advisory votes on the compensation of our named executive officers;
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| 4. | Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 27, 2019;30, 2022; and |
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| 4. | Such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof. |
What are the Board’sBoard’s recommendation? | | | | | | | | | | | |
Proposal | | Board
Recommendation | |
1. | Election of Directorsdirectors; | | | For allthe Nominees | |
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2. The approval, on an advisory basis, of the compensation paid to our named executive officers;
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3. The approval, on an advisory basis, of the frequency of future advisory votes on the compensation of our named executive officers; and
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| Once every three
years |
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4. Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September 27, 2019.
30, 2022. | | | For | |
Vote by Internet. Stockholders of record may submit proxies over the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial stockholders may vote by accessing the website specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for Internet voting availability.
Vote by Telephone. Stockholders of record may submit proxies using any touch-tone telephone from within the United States by following the instructions on the Notice of Internet Availability of Proxy Materials or, if printed copies of the proxy materials were requested, the instructions on the printed proxy card. Most beneficial owners may vote using any touch-tone telephone from within the United States by calling the number specified on the voting instruction forms provided by their brokers, trustees, banks or other nominees. Please check your voting instruction form for telephone voting availability.
Vote by Mail. Stockholders of record may submit proxies by mail by requesting printed proxy cards and completing, signing and dating the printed proxy cards and mailing them in thepre-addressed envelopes that will accompany the printed proxy materials. Beneficial owners may vote by completing, signing and dating the voting instruction forms provided by their brokers, trustees, banks or other nominees and mailing them in thepre-addressed envelopes accompanying the voting instruction forms.
If you are a stockholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the board of directors. If you are a beneficial owner and you return your signed voting instruction form but do not indicate your voting preferences, please see “What are the voting requirements to elect directors and approve each of the other proposals described in this Proxy Statement?” and “What are ‘brokernon-votes’ and how do they affect the proposals?” regarding whether your broker, trust, bank or other nominee may vote your uninstructed shares on a particular proposal.
Vote in Person at the Annual Meeting. All stockholders of record as of the close of business on the Record Date can vote in person at the Annual Meeting. You can also be represented by another person at the Annual Meeting by executing a proper proxy designating that person. If you are a beneficial owner, you must obtain a legal proxy or letter from your broker, trust, bank or other nominee and present it to the inspector of election with your ballot to be able to vote at the Annual Meeting. Even if you plan to attend the Annual Meeting, we recommend that you also vote either by telephone, by Internet or by mail so that your vote will be counted if you decide not to attend. Due to the COVID-19 pandemic, we request that you RSVP by emailing our investor relations department at ir@macom.com if you plan to attend the Annual Meeting in person so that we may ensure we have adequate space to allow for proper social distancing in an effort to promote the well-being of all that attend the Annual Meeting.
What does it mean if I receive more than one set of materials?
If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all of the shares you own, you must either sign and return all of the proxy cards or follow the instructions for any alternative voting procedures on each of the proxy cards or Notice of Internet Availability of Proxy Materials you receive.
What can I do if I change my mind after I vote?
If you are a stockholder of record, you may revoke your proxy at any time before it is exercised at the Annual Meeting by (a) delivering written notice, bearing a date later than the proxy, stating that the proxy is revoked to MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851, Attn:
General Counsel,Investor Relations Department, (b) submitting a later-dated proxy relating to the same shares by mail, telephone or the Internet prior to the vote at the Annual Meeting or (c) attending the Annual Meeting and voting in person. Stockholders of record may send a request for a new proxy card via
e-mail to
sendmaterial@proxyvote.com,, or follow the instructions provided on the Notice of Internet Availability of Proxy Materials and proxy card to submit a new proxy by telephone or via the Internet. Stockholders of record may also request a new proxy card by calling
1-800-579-1639.If you are a beneficial stockholder, you may revoke your proxy or change your vote only by following the separate instructions provided by your broker, trust, bank or other nominee.
What constitutes a quorum at the Annual Meeting?
Transaction of business at the Annual Meeting may occur only if a quorum is present. If a quorum is not present, it is expected that the Annual Meeting will be adjourned or postponed in order to permit additional time for soliciting and obtaining additional proxies or votes, and, at any subsequent reconvening of the Annual Meeting, all proxies will be voted in the same manner as such proxies would have been voted at the original convening of the Annual Meeting, except for any proxies that have been effectively revoked or withdrawn.
The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the total votes entitled to be cast constitutes a quorum. Abstentions and “broker
non-votes” are counted as present and entitled to vote for purposes of determining a quorum.
What are the voting requirements to elect directors and approve each of the other proposals described in this Proxy Statement?
With respect to Proposal 1, the election of our directors, each of the three Class I director nominees receiving the largest number of votes will be elected. With respect to Proposals 2 and 4,3, the affirmative vote of a majority of the votes cast on the matter is required for the proposal to be approved. WithAccordingly, with respect to Proposal 3, the frequency
of future advisory votes on named executive officer compensation, we will consider the alternative receiving the greatest number of votes – one, two or three years – to be the frequency that stockholders approve. AbstentionsProposals 1 and 2, abstentions and brokernon-votes are not counted as votes in favor of or against any proposal or director nominee, and with respect to Proposal 3, abstentions are not counted as votes in favor of or against the proposal, and we do not expect broker non-votes on the proposal.
What are “broker
non-votes” and how do they affect the proposals?
A broker
non-vote occurs when a nominee holding shares for a beneficial owner does not vote the shares on a proposal because the nominee does not have discretionary voting power for a particular item and has not received instructions from the beneficial owner regarding voting. Brokers who hold shares for the accounts of their clients have discretionary authority to vote shares if specific instructions are not given with respect to routine matters.
TheAlthough the determination of whether a nominee will have discretionary voting power for a particular item is typically determined only after proxy materials are filed with the SEC, we expect that the proposal on ratification of the appointment of our independent registered public accounting firm
is(Proposal 3) will be a routine matter and
that the other proposals
are(Proposals 1 and 2) will be non-routine matters.
IfAccordingly, if your shares are held by a broker on your behalf and you do not instruct the broker as to how to vote your shares, your broker will be entitled to exercise discretion to vote your shares
only on the proposal to ratify the appointment of our independent registered public accounting firm, but your broker may not exercise discretion to vote on the other proposals.
Brokernon-votes are not counted as votes in favor of or against any proposal.What are the requirements for admission to the Annual Meeting?
Only stockholders of record and persons holding proxies from stockholders of record may attend the Annual Meeting. If your shares are registered in your name, you must bring a valid form of photo identification, such as a valid driver’s license or passport, to the Annual Meeting. If your shares are held in the name of a broker, trust, bank or other nominee, you must bring a legal proxy or letter from that broker, trust, bank or other nominee that confirms you are the beneficial owner of those shares
and a valid form of photo identification. Attendance at the Annual Meeting without voting or revoking a previously submitted proxy in accordance with the voting procedures will not in and of itself revoke a proxy.
Due to the COVID-19 pandemic, we request that you RSVP by emailing our Investor Relations Department at ir@macom.com if you plan to attend the Annual Meeting in person so that we may ensure we have adequate space to allow for proper social distancing in an effort to promote the well-being of all that attend the Annual Meeting.
Who will pay for the cost of this proxy solicitation?
We will bear the cost of the solicitation of proxies from our stockholders. In addition to solicitation by mail, our directors, officers and employees, without additional compensation, may solicit proxies from stockholders by telephone, letter, facsimile, email, in person or otherwise. Following the original circulation of the proxies and other soliciting materials, we will request brokers, trusts, banks or other nominees to forward copies of the proxy and other soliciting materials to persons for whom they hold shares of our common stock and to request authority for the exercise of proxies. In such cases, we, upon the request of the brokers, trusts, banks and other nominees, will reimburse such holders for their reasonable expenses.
Why did I receive a
one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?
We have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials to stockholders of record as of the Record Date. Stockholders will have the ability to access the proxy materials on the website referred to in the Notice of Internet Availability of Proxy Materials, or to request to receive an electronic copy or printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request an electronic copy or printed copy may be found in the Notice of Internet Availability of Proxy Materials. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of the Annual Meeting.
When will we announce the results of the voting?
Voting results will be announced by the filing of a Current Report on Form8-K within four business days after the Annual Meeting. If final voting results are unavailable at that time, we will file an amended Current Report on Form8-K within four business days of the day the final results become available.
PROPOSAL 1: ELECTION OF DIRECTORS
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| SOCIAL RESPONSIBILITY, ENVIRONMENTAL SUSTAINABILITY AND RELATED POLICIES |
We endeavor to integrate environmental, social and corporate governance (“ESG”) practices that we believe will create long-term economic value for our stockholders, employees, communities and other constituents. Our corporate governance program is discussed elsewhere in this Proxy Statement.
ESG Program
In fiscal year 2020, we commenced an in depth, multi-year, company-wide review of ESG-related matters and initiatives, with the goal of enhancing and/or creating additional policies, procedures, programs and practices aimed at continuous improvement in these areas. This review resulted in the establishment of our ESG steering committee as well as the publication of our first ESG report in July 2021. Our ESG steering committee has responsibility for ESG matters globally, oversees alignment between our ESG efforts and our overarching business objectives and reports to the executive leadership and the nominating governance committee of our board of directors. Our ESG steering committee includes executive and senior leaders in global operations, including Quality, Compliance, Human Resources, Legal, Workplace Services, Finance, Ethics and Governance, IT and Data Privacy and Investor Relations. We encourage our stockholders to review our ESG report in full. A summary of the matters contained in our ESG report are discussed below.
ESG Program 2021 Highlights
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| Diversity, Equity, Inclusion and Belonging: | •As of December 31, 2021, approximately 69% and 31% of our workforce is male and female, respectively |
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| Environmental Stewardship; Climate: | •“Microgrid-as-a-Service” system installed and expected to come online during fiscal year 2022 |
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| Community Service and Philanthropy: | •Creation of our global charitable giving program to donate up to 5,000 annual company-funded, employee volunteer hours |
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| ESG Program: | •Established ESG Steering Committee |
| •Published initial ESG report in July 2021 |
COVID-19 Response
In fiscal years 2020 and 2021, we were focused on and continue to prioritize ensuring the health and safety of our global workforce during the COVID-19 global pandemic, including by, among other things, facilitating, and for certain locations, requiring that certain employees work remotely. We also implemented extensive health screening and sanitation policies at our facilities to ensure the safety of all essential employees. In addition, we supported our workforce with advice and guidance on protecting their own health and the health of their families and, in certain locations, provided onsite COVID-19 testing and COVID-19 vaccination clinics. We will continue to prioritize the health and safety of our employees during the remainder of the COVID-19 pandemic and thereafter.
Corporate Culture and Employee Engagement
We are committed to fostering a corporate culture that encourages and seeks the betterment of the Company and the communities in which we conduct business. We strive to foster a sense of community and well-being that encourages our employees to focus on both their and the Company’s long-term success. We realize that continuous engagement with our employees in a transparent, collaborative manner that builds trust is vital to driving successful outcomes. Executive management regularly conducts town hall-style meetings with employees to address business operations, strategy, market conditions and other topics. This format encourages open dialogue and provides employees with an opportunity to ask questions and voice opinions and ideas.
We offer, among other things, competitive and balanced compensation programs commensurate with those of our peers and competitors, including, but not limited to, well-rounded healthcare, prescription drug and disability insurance benefits for our employees and their families, a 401(k) plan for our U.S.-based employees and similar retirement savings programs for certain of our non-U.S.-based employees with a matching contribution by the Company and an employee stock purchase plan. We provide competitive paid time-off benefits, a parental leave program following the birth, adoption or fostering of a child and an
employee assistance plan that provides professional support, access to special programs and certain resources to our employees experiencing personal-, work-, financial- or family-related issues.
We are passionate about developing and growing our talent. We devote substantial efforts to retaining, motivating and supporting our employees by providing tuition and professional development reimbursement and opportunities for internal growth and career advancement. Performance reviews are conducted at least annually for all employees, during which employees and managers address goals and discuss development opportunities, strengths and weaknesses. We have also historically maintained an internship program that supports the professional development of interns and our employees.Our compensation policies recognize and reward individual and collective contributions to our growth and success.
We recognize and respect the freedom of employees to exercise their lawful rights, free association and collective bargaining. Certain of our employees working outside of the United States are represented by works councils. We value the relationships that we have with not only those employees but their representation as well.
Employee Health and Safety
We employ more than 1,100 people worldwide and strive to provide each employee with a safe and healthy work environment. We have health and safety team members to support compliance requirements and also promote and encourage employees to maintain healthy and safe lifestyles. Our goal is to reduce the potential for injury or illness by maintaining safe working conditions, such as providing proper tools and training to all employees. Additionally, we offer resources to our employees to encourage healthy habits, such as health coaches, wellness incentives and a diabetes prevention program.
Diversity, Equity, Inclusion and Belonging
We continue to create a culture of diversity, equity, inclusion and belonging (“DEI&B”) in the workplace in order to promote and effect change at the corporate and community levels. We support fostering a work environment where everyone has equal opportunities to learn and grow. Our DEI&B efforts are guided by the following principles: (i) diversity is the representation of different people in an organization; (ii) equity is ensuring that everyone has fair, just and equal opportunities at work; (iii) inclusion is ensuring that everyone has an equal opportunity to contribute to and influence every part and level of a workplace; and (iv) belonging is ensuring that everyone feels safe and welcome at work.
In addition, we seek to continuously reinforce our commitment to DEI&B through our policies, learning and development programs and opportunities, ongoing training and internal reporting mechanisms. For example, all of our employees are required to acknowledge receipt of the Company's Code of Business Conduct and Ethics (the “Code of Conduct”) upon commencing employment and on an annual basis thereafter. The Code of Conduct sets out basic principles, guidelines and prohibitions to guide all employees, including with respect to equal employment opportunity, non-discrimination, anti-harassment, reporting suspected violations of the Code of Conduct and/or law and prohibitions on retaliation for complying with the Code of Conduct.
Environmental Stewardship; Climate
Our commitment to conducting our business in an environmentally responsible and sustainable manner is aimed at protecting the environment, with a particular emphasis on energy and water usage and environmental quality, while providing an atmosphere for continuous business growth and development. We believe that protecting the environment enhances our ability to provide competitive and profitable products and services. We also plan to seek to develop ways to reduce our climate footprint and work with our supply chain to help and encourage others to further reduce their climate footprints.
For instance, at our Lowell, Massachusetts corporate headquarters, we promote environmental and energy efficiency awareness and encourage practices such as powering down office equipment at the end of the day, water and material conservation and recycling paper waste. We also have minimized our corporate travel requirements through the use of virtual meeting technology, reduced our number of printers and copiers by switching to electronic media and reduced waste streams from our corporate cafeteria. In addition, our Lowell, Massachusetts headquarters building, which was constructed in 2018, includes, among other things, motion sensor lighting, motion sensor and low flow water faucets and refillable water stations, electric vehicle charging stations and energy efficient equipment upgrades. In fiscal year 2020, we entered into an agreement with a third party energy service provider to establish one of its “Microgrid-as-a-Service” systems (a self-contained combined heating and cooling power plant) at our Lowell, Massachusetts fabrication facility, which we expect to go online during fiscal year 2022. This will help us to meet sustainability targets, improve energy efficiencies and achieve energy resilience at that facility and is expected to reduce our carbon emissions by up to 1,869 metric tons per year.
Community Service and Philanthropy
We take an active role in supporting the communities in which we operate by partnering with organizations to administer charitable contributions, provide community service and organize the donation of goods to assist local families and individuals
in need. For instance, our charitable giving program further promotes community-level involvement through our donation of up to 5,000 annual company-funded, employee volunteer hours on approved charitable activities. We believe that our dedication to being a responsible corporate citizen has a direct and positive impact in the communities in which we operate and contributes to the strength of our reputation and our financial performance.
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| PROPOSAL 1: ELECTION OF DIRECTOR |
As of January
16, 2019,14, 2022, the board of directors was composed of eight members, divided into three classes as follows:
•Class I directors: Peter Chung, Geoffrey Ribar and Gil Van Lunsen,VanLunsen, whose current terms will expire at this Annual Meeting;
•Class II directors: Charles Bland, Stephen Daly and Susan Ocampo, whose current terms will expire at our annual meeting of stockholders to be held in 2020;2023; and
•Class III directors:director: John Ocampo and John Croteau,Ritchie, whose current terms will expire at our annual meeting of stockholders to be held in 2021.
2024.If elected at the Annual Meeting, Messrs. Chung, Ribar and
Van LunsenVanLunsen will serve until the
20222025 Annual Meeting of Stockholders, until their respective successor is duly elected and qualified or until their earlier death, resignation or removal. Proxies will be voted in favor of Messrs. Chung, Ribar and
Van LunsenVanLunsen unless the stockholder indicates otherwise on the proxy. Messrs. Chung, Ribar and
Van LunsenVanLunsen have
each consented to being named as
nomineesa nominee in this Proxy Statement and have agreed to serve if elected. The board of directors expects that
each of the nomineesMessrs. Chung, Ribar and VanLunsen will be able to serve, but if
any nominee becomesthey become unable to serve at the time the election occurs, proxies will be voted for another nominee designated by the board of directors unless the board chooses to reduce the number of directors serving on the board.
The Board of Directors Recommends a Vote “FOR”
Each of
the Class I Director Nominees.
Below sets forth information concerning members of our board of directors as of January
16, 2019.14, 2022.
Class I Director Nominees for Election to a Three-Year Term Expiring at the
20222025 Annual Meeting of Stockholders
Peter Chung, age 51, is a Class I director who has served as a director since December 2010. Mr. Chung is a Managing Director and the Chief Executive Officer of Summit Partners, L.P., which he joined in August 1994. Mr. Chung currently serves as a director and the chairman of the compensation committee of A10 Networks, Inc., a provider of application networking technologies, and as a director and chairman of the nominating and corporate governance committee of Acacia Communications, Inc., a provider of high-speed coherent optical interconnect products. Mr. Chung has also served as a director of numerous other public companies, including, most recently, Ubiquiti Networks, Inc. (“Ubiquiti”), from March 2010 to October 2013, NightHawk Radiology Holdings, Inc. (“NightHawk”), from March 2004 to December 2010, SeaBright Holdings, Inc., a provider of multi-jurisdictional workers’ compensation insurance and general liability insurance, from October 2003 to May 2010, and Sirenza Microdevices, Inc. (“Sirenza”) from October 1999 to April 2006. Mr. Chung also serves as a director of several privately-held companies. Mr. Chung received an A.B. from Harvard University and an M.B.A. from Stanford University. Mr. Chung is an experienced investor in market-leading growth companies. He contributes broad-based knowledge and experience in business strategy, capital markets and the communications technology and semiconductor industries. Mr. Chung provides valuable insight to our board of directors on all matters facing us, from operational to strategic.
Geoffrey G. Ribar, age 60, is a Class I director who has served as a director since March 2017. Mr. Ribar served as Senior Vice President and Chief Financial Officer of Cadence Design Systems, Inc. (“Cadence”), a provider of system design tools, software, intellectual property and services, from November 2010 to September 2017, and
acted as a senior advisor to Cadence until his retirement in March 2018. Previously, he served as Chief Financial Officer for a number of semiconductor companies, including Telegent Systems, Inc., SiRF Technology, Inc., Asyst Technology, Inc., Matrix Semiconductor, Inc. and nVidia Corporation. Mr. Ribar also serves as a director of Aquantia Corp., a provider of high-speed communications integrated circuits for Ethernet connectivity, and as a director of Everspin Technologies Inc., a developer and manufacturer of discrete and embedded Magnetoresistive RAM (MRAM) and Spin-Torque
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| Name | Age | Class | Biography |
| Peter Chung | 54 | I | Mr. Chung has served as a director since December 2010. Mr. Chung is a Managing Director and the Chief Executive Officer of Summit Partners, L.P., which he joined in August 1994. Mr. Chung currently serves as a director and the chairman of the compensation committee of A10 Networks, Inc., a provider of application networking technologies. Mr. Chung has also served as a director of numerous other public companies, including, most recently, Acacia Communications, Inc. (“Acacia”), a provider of high-speed coherent optical interconnect products from April 2013 to March 2021 when it was acquired by Cisco Systems, Inc. (“Cisco”), Ubiquiti Inc. ("Ubiquiti"), a developer of networking technology for service providers and enterprises, from March 2010 to October 2013, NightHawk Radiology Holdings, Inc. (“NightHawk”), a provider of teleradiology services, from March 2004 to December 2010, SeaBright Holdings, Inc., a provider of multijurisdictional workers' compensation insurance and general liability insurance, from October 2003 to May 2010, and Sirenza Microdevices, Inc. (“Sirenza”), a supplier of radio frequency semiconductors and related components for the commercial communications, consumer and aerospace, defense and homeland security equipment markets, from October 1999 to April 2006. Mr. Chung also serves as a director of several privately-held companies. Mr. Chung received an A.B. from Harvard University and an M.B.A. from the Stanford University Graduate School of Business. Mr. Chung is an experienced investor in market-leading growth companies. He contributes broad-based knowledge and experience in business strategy, capital markets and the communications technology and semiconductor industries. Mr. Chung provides valuable insight to our board of directors on all matters facing us, from operational to strategic. |
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| Geoffrey Ribar | 63 | I | Mr. Ribar has served as a director since March 2017. Mr. Ribar currently serves as a director of Everspin Technologies, Inc., a developer and manufacturer of discrete and embedded Magnetoresistive RAM (MRAM) and Spin-transfer Torque MRAM (STT-MRAM) technologies, and served as a director of Aquantia Corp., a provider of high-speed communications integrated circuits for Ethernet connectivity, from September 2017 until its acquisition by Marvell Technology in September 2019. Mr. Ribar served as Senior Vice President and Chief Financial Officer of Cadence Design Systems, Inc. (“Cadence”), a provider of system design tools, software, intellectual property and services, from November 2010 to September 2017, and acted as a senior advisor to Cadence until his retirement in March 2018. Previously, he served as Chief Financial Officer for a number of semiconductor companies, including Telegent Systems, Inc., SiRF Technology, Inc., Asyst Technology, Inc., Matrix Semiconductor, Inc. and Nvidia Corporation. He received his B.S. degree in chemistry, and an M.B.A. from the University of Michigan. Mr. Ribar provides our board of directors with financial and accounting expertise based on his experience as a chief financial officer, as well as semiconductor industry expertise in areas ranging from global finance and mergers and acquisitions to investor relations. |
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(ST-MRAM)
technologies. He received his B.S. degree in chemistry, and an M.B.A. from the University of Michigan. Mr. Ribar provides our board of directors with financial and accounting expertise based on his experience as a chief financial officer, as well as semiconductor industry expertise in areas ranging from global finance and mergers and acquisitions to investor relations.Gil Van Lunsen, age 76, is a Class I director who has served as a director since August 2010. Prior to his retirement in June 2000, Mr. Van Lunsen was a Managing Partner of KPMG LLP and led the firm’s Tulsa, Oklahoma office. During his
33-year
career, Mr. Van Lunsen held various positions of increasing responsibility with KPMG LLP and was elected partner in 1977. Mr. Van Lunsen is currently a member of the board of directors at Array Biopharma Inc., a biopharmaceutical company. He serves on the audit committee and was its chairman from 2002 until 2018. He served as a director and the chairman of the audit committee of ONEOK Partners, L.P., a natural gas gathering, processing, storage and transportation provider and its predecessor entities from 2005 until his retirement in 2015. Previously, Mr. Van Lunsen served as a director of Sirenza and was chairman of its audit committee from October 2003 through its sale to RF Micro Devices, Inc. (“RFMD”) in November 2007. Mr. Van Lunsen received a B.S./B.A. in accounting from the University of Denver. Mr. Van Lunsen has extensive experience with complex financial and accounting issues and, as a former partner of KPMG LLP and the audit committee chairman at other public companies in our industry and others, provides valuable leadership and insights to our board of directors on accounting, financial and governance matters. Having served as a director of Sirenza, Mr. Van Lunsen has also developed strong domain knowledge of the operational and financial issues facing our Company and our industry.
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| Gil VanLunsen | 79 | I | Mr. VanLunsen has served as a director since August 2010. Prior to his retirement in June 2000, Mr. VanLunsen was a Managing Partner of KPMG LLP and led the firm’s Tulsa, Oklahoma office. During his 33-year career, Mr. VanLunsen held various positions of increasing responsibility with KPMG LLP and was elected partner in 1977. Mr. VanLunsen served as a member of the board of directors of Array Biopharma Inc., a biopharmaceutical company from 2002 until its sale to Pfizer Inc. in July 2019 and was the audit committee chairman from 2002 until 2018. He also served as a director and the chairman of the audit committee of ONEOK Partners, L.P., a natural gas gathering, processing, storage and transportation provider and its predecessor entities from 2005 until his retirement in 2015. Previously, Mr. VanLunsen served as a director of Sirenza and was chairman of its audit committee from October 2003 through its sale to RFMD in November 2007. Mr. VanLunsen received a B.S./B.A. in accounting from the University of Denver. Mr. VanLunsen has extensive experience with complex financial and accounting issues and, as a former partner of KPMG LLP and the audit committee chairman at other public companies in our industry and others, provides valuable leadership and insights to our board of directors on accounting, financial and governance matters. Having served as a director of Sirenza, Mr. VanLunsen has also developed strong domain knowledge of the operational and financial issues facing our Company and our industry. |
Directors Not Standing for Election at the Annual Meeting
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| Name | Age | Class | Biography |
| Charles Bland | 73 | II | Mr. Bland has served as a director since June 2016, and previously served as a director from December 2010 to February 2016. Mr. Bland served as our Chief Executive Officer from February 2011 to December 2012, and was employed by us in a transitional capacity following his retirement from service as our Chief Executive Officer through May 2013. Mr. Bland previously served as our Chief Operating Officer from June 2010 to February 2011. From April 2007 through December 2010, Mr. Bland served as a director and as the chairman of the audit committee of NightHawk, a provider of teleradiology services. During 2009, Mr. Bland served as the Chief Financial Officer of American Gaming Systems, a privately-held designer, manufacturer and operator of gaming machines. Mr. Bland served as the Chief Financial Officer of Sirenza, from July 2005 through its sale to RFMD in November 2007, and also as its Chief Operating Officer from May 2003 until July 2005. Mr. Bland received his B.S. in Accounting and Finance from The Ohio State University and his M.B.A. from the Sloan School, Massachusetts Institute of Technology. Mr. Bland’s qualifications to serve as a director include his detailed knowledge of our business, operations, senior leadership, and strategic opportunities and challenges based on his prior service as our Chief Executive Officer and Chief Operating Officer. In addition, Mr. Bland’s extensive experience in a variety of executive roles at public companies in our industry, his executive experience in other industries, and his prior experience as a public company director and audit committee chair allow him to bring a broad and diverse perspective to our board of directors. His prior Chief Financial Officer and audit committee experience have provided him expertise with accounting principles and financial reporting rules and regulations, in evaluating financial results and in generally overseeing the financial reporting process. |
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| Stephen Daly | 56 | II | Mr. Daly has served as our President and Chief Executive Officer since May 2019 and has served as a director since March 2015. From January 2004 through March 2013, Mr. Daly served as the President of Hittite Microwave Corporation (“Hittite”), a provider of analog and mixed signal integrated circuits, modules and subsystems for commercial and military RF, microwave and millimeterwave applications. Mr. Daly also served as Hittite’s Chief Executive Officer from December 2004 through March 2013. He served as a member of Hittite’s board of directors from January 2004 through May 2013, and as its chairman from December 2005 through March 2013. From 1996 to 2004 he was employed in other application engineering, marketing and sales roles at Hittite. Mr. Daly received a B.S. in Electrical Engineering from Northeastern University. Mr. Daly’s leadership and management of our day-to-day operations and strategic direction, combined with his past leadership experience in our industry, make him a vital member of our board of directors. |
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| John Ocampo | 62 | III | Mr. Ocampo, age 59, is a Class III director who has served as a director and as the Chairman of the board of directors since our inception in March 2009. Mr. Ocampo has also served as President of GaAs Labs, LLC (“GaAs Labs”), a private investment fund targeting the communications semiconductor market, since co-founding it in February 2008. Previously, Mr. Ocampo co-founded Sirenza, served as a director of Sirenza from its inception in 1984 through its sale to RFMD in November 2007, and served in a number of senior executive roles throughout that period, most recently as its Chairman from December 1998 through November 2007. Mr. Ocampo also served as a director of RFMD from November 2007 to November 2008. From October 2010 to October 2013, Mr. Ocampo served as a director of Ubiquiti. Mr. Ocampo also serves as a director of various privately-held companies. Mr. Ocampo holds a B.S.E.E. from Santa Clara University. Mr. Ocampo’s strategic vision, developed over more than 30 years successfully leading public and private companies in the RF semiconductor and component industry, is a unique asset to our board of directors. His engineering background and extensive knowledge of our operations, markets and technology provides our board of directors with important insights. We also believe that having our largest stockholder (together with Mrs. Ocampo and their affiliates) on the board of directors assists the board in making decisions aimed at increasing stockholder value over the long term. |
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co-founding
it in February 2008. Previously, Mr. Ocampoco-founded Sirenza, a supplier of radio frequency semiconductors and related components for the commercial communications, consumer and aerospace, defense and homeland security equipment markets in 1984, served as a director of Sirenza from its inception in 1984 through its sale to RFMD in November 2007, and served in a number of senior executive roles throughout that period, most recently as its Chairman from December 1998 through November 2007. Mr. Ocampo also served as a director of RFMD from November 2007 to November 2008. From October 2010 to October 2013, Mr. Ocampo served as a director of Ubiquiti, a developer of networking technology for service providers and enterprises. Mr. Ocampo also serves as a director of various privately-held companies. Mr. Ocampo holds a B.S.E.E. from Santa Clara University. Mr. Ocampo’s strategic vision, developed over more than 30 years successfully leading public and private companies in the RF semiconductor and component industry, is a unique asset to our board of directors. His engineering background and extensive knowledge of our operations, markets and technology provides our board of directors with important insights. We also believe that having our largest stockholder (together with Mrs. Ocampo and their affiliates) on the board of directors assists the board in making decisions aimed at increasing stockholder value over the long term.Charles Bland, age 70, is a Class II director who has served as a director since June 2016, and previously served as a director from December 2010 to February 2016. Mr. Bland served as our Chief Executive Officer from February 2011 to December 2012, and was employed by us in a transitional capacity following his retirement from service as our Chief Executive Officer through May 2013. Mr. Bland previously served as our Chief Operating Officer from June 2010 to February 2011. From April 2007 through December 2010, Mr. Bland served as a director and as the chairman of the audit committee of NightHawk, a provider of teleradiology services.
During 2009, Mr. Bland served as the Chief Financial Officer of American Gaming Systems, a privately-held designer, manufacturer and operator of gaming machines. Mr. Bland served as the Chief Financial Officer of Sirenza, from July 2005 through its sale to RFMD in November 2007, and also as its Chief Operating Officer from May 2003 until July 2005. Mr. Bland received his B.S. in Accounting and Finance from The Ohio State University and his M.B.A. from the Sloan School, Massachusetts Institute of Technology. Mr. Bland’s qualifications to serve as a director include his detailed knowledge of our business, operations, senior leadership, and strategic opportunities and challenges based on his prior service as our Chief Executive Officer and Chief Operating Officer. In addition, Mr. Bland’s extensive experience in a variety of executive roles at public companies in our industry, his executive experience in other industries, and his prior experience as a public company director and audit committee chair allow him to bring a broad and diverse perspective to our board of directors. His prior Chief Financial Officer and audit committee experience have provided him expertise with accounting principles and financial reporting rules and regulations, in evaluating financial results and in generally overseeing the financial reporting process.
John Croteau, age 57, is a Class III director who has served as our Chief Executive Officer and as a director since December 2012, and as our President since October 2012. Mr. Croteau joined us from NXP Semiconductors N.V. (“NXP”), a provider of mixed signal solutions and standard products, where he served as the Senior Vice President and General Manager of its High-Performance RF business from May 2008 to October 2012. For three of those years, Mr. Croteau also managed NXP’s Power & Lighting Solutions business. Prior to joining NXP, Mr. Croteau held numerous product management positions at Analog Devices, Inc. (“ADI”), a high-performance semiconductor company, including General Manager for ADI’s Convergent Platforms and Services Group as well as product line director for the Integrated Audio Group. Mr. Croteau holds a B.S. in Engineering Science and Mechanics from Penn State University. Mr. Croteau’s qualifications to serve as a director include his unique perspective and insights into our operations as our current President and Chief Executive Officer, including his knowledge of our products, technologies, business relationships, competitive and financial positioning, senior leadership and strategic opportunities and challenges. Our board of directors also benefits from Mr. Croteau’s industry perspective, stemming from his broad experience in a variety of executive roles at public semiconductor companies.
Stephen G. Daly, age 53, is a Class II director who has served as a director since March 2015. From January 2004 through March 2013, Mr. Daly served as the President of Hittite Microwave Corporation (“Hittite”), a provider of analog and mixed signal integrated circuits, modules and subsystems for commercial and military RF, microwave and millimeterwave applications. Mr. Daly also served as Hittite’s Chief Executive Officer from December 2004 through March 2013. He served as a member of Hittite’s board of directors from January 2004 through May 2013, and as its chairman from December 2005 through March 2013. From 1996 to 2004 he was employed in other application engineering, marketing and sales roles at Hittite. Mr. Daly also serves as a director of a privately-held company. Mr. Daly received a B.S. in Electrical Engineering from Northeastern University. Mr. Daly’s depth and breadth of expertise in the analog and mixed signal semiconductor industry and prior experience serving on the board of directors of a public company in our industry contributes valuable perspective and insight to our board of directors.
Susan Ocampo, age 60, is a Class II director who has served as a director since June 2016, and previously served as a director from December 2010 to February 2016. She has also served as Vice President, Secretary and Treasurer of GaAs Labs, sinceco-founding it in February 2008. Previously, Mrs. Ocampoco-founded Sirenza in 1984. Mrs. Ocampo served as Sirenza’s Treasurer from November 1999 through its sale to RFMD in November 2007. Mrs. Ocampo holds a B.A. from Maryknoll College. Mrs. Ocampo’s extensive experience investing and serving in financial leadership roles with semiconductor companies strengthens our board of director’s oversight of our enterprise risk management, treasury functions and internal financial controls. We also believe that having our largest stockholder (together with Mr. Ocampo and their affiliates) on the board of directors assists the board in making decisions aimed at increasing stockholder value over the long term.
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| Name | Age | Class | Biography |
| Susan Ocampo | 63 | II | Mrs. Ocampo has served as a director since June 2016, and previously served as a director from December 2010 to February 2016. She has also served as Vice President, Secretary and Treasurer of GaAs Labs, since co-founding it in February 2008. Previously, Mrs. Ocampo co-founded Sirenza in 1984. Mrs. Ocampo served as Sirenza’s Treasurer from November 1999 through its sale to RFMD in November 2007. Mrs. Ocampo holds a B.A. from Maryknoll College. Mrs. Ocampo’s extensive experience investing and serving in financial leadership roles with semiconductor companies strengthens our board of director’s oversight of our enterprise risk management, treasury functions and internal financial controls. We also believe that having our largest stockholder (together with Mr. Ocampo and their affiliates) on the board of directors assists the board in making decisions aimed at increasing stockholder value over the long term. |
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| John Ritchie | 56 | III | Mr. Ritchie has served as a director since March 2021. Mr. Ritchie is currently the Chief Financial Officer of Side Inc., a privately-held real estate technology company. From October 2020 through August 2021, he served as Chief Financial Officer of A Cloud Guru (“ACG”), a privately-held cloud-based technology skills development company. ACG was acquired by Pluralsight Inc. in July 2021. Prior to this, he served as the Senior Vice President, Chief Financial Officer of Aerohive Networks, Inc. (“Aerohive Networks”), a computer networking equipment company, from August 2015 through August 2019, and as Chief Operating Officer from February 2017 through August 2019. Aerohive Networks was acquired by Extreme Networks, Inc. in August 2019. From April 2013 to April 2015, Mr. Ritchie served as Chief Financial Officer of Telerik AD, a software development tools company. Prior to that, from May 2010 to March 2013, Mr. Ritchie was Chief Financial Officer of Ubiquiti. Previously, Mr. Ritchie held several executive positions, in each case most recently as Chief Financial Officer, at Electronics For Imaging, Inc., a provider of products, technology and services enabling analog to digital imaging transformation, and Splash Technology Holdings, Inc., which develops, produces, and markets color servers. Mr. Ritchie also served as a member of the board of directors, and as Chair of the audit committee of Acacia, from April 2015 until March 1, 2021 when it was acquired by Cisco. Mr. Ritchie also serves as a director of a privately-held company. Mr. Ritchie holds a B.S. in business administration from San Jose State University. Mr. Ritchie’s extensive executive experience and experience on public and private company boards of directors allow him to bring a broad and diverse perspective to our board of directors. In addition, Mr. Ritchie’s prior Chief Financial Officer and audit committee chair experience have provided him expertise with accounting principles and financial reporting rules and regulations, in evaluating financial results and in generally overseeing the financial reporting process. |
There are no family relationships among any of our directors or executive officers, other than Mr. Ocampo, the Chairman of the board of directors, and Mrs. Ocampo, a director, who are married to each other.
CORPORATE GOVERNANCE
As a group, our board of directors possess a broad range of experience and skills including:
Our board of directors and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written or electronic consent from time to time. During fiscal year
2018,2021, including telephonic meetings, our board of directors held seven meetings, the audit committee held
eightnine meetings, the compensation committee held
fivesix meetings and the nominating and governance committee held
one meeting.six meetings. From time to time during fiscal year
2018,2021, our directors who are “independent” according to the rules and regulations of the SEC and the listing requirements and rules of the Nasdaq Stock Market (“Nasdaq”) also met separately in executive sessions at which only independent directors were present.
During fiscal year
2018,2021, each member of the board of directors attended 75% or more of the aggregate number of meetings of the board and committees on which
he or shethey served. We encourage, but do not require, our directors and nominees for director to attend our annual meeting of stockholders in person or telephonically. Four of our directors attended our
2018 Annual Meeting2021 annual meeting of
Stockholdersstockholders held in March
2018.2021.
Our board of directors has reviewed its composition, the composition of its committees and the independence of each member of our board of directors during fiscal year
2018.2021. Based on information requested from and provided by each director concerning
his or hertheir background, employment and affiliates, our board of directors has determined that Messrs. Bland, Chung,
Daly, Ribar,
Ritchie and
Van LunsenVanLunsen qualify as “independent” according to the rules and regulations of the SEC and the Nasdaq listing requirements and rules. As of January
16, 2019, Messrs. Ocampo and Croteau are not independent14, 2022, according to the rules and regulations of the SEC and the listing requirements and rules of Nasdaq,
Mr. Daly is not independent because
they arehe is one of our
employees,executive officers, Mr. Ocampo is not independent because he was one of our executive officers within the past three years, and Mrs. Ocampo is not independent because she is the spouse of
one of oura former executive
officers.officer within the past three years.
The listing requirements and rules of Nasdaq require that, subject to certain exemptions, the board of directors of a listed company be comprised of a majority of independent directors, that the compensation, nominating and governance and audit committees of such listed company be comprised solely of independent directors, that the compensation committee be comprised of at least two independent directors, and that the audit committee be comprised of at least three independent directors. As of January
16, 2019,14, 2022, the composition of our board of directors and its committees satisfied all such requirements.
Board Leadership Structure
Our
While our board of directors does not currently have a policy as to whether the offices of Chairman of the board of directors and Chief Executive Officer should be
separate.separate, Mr. Ocampo currently serves as Chairman of the board of directors and Mr. Daly serves as our Chief Executive Officer. Our board of directors believes that
it should havemaintaining the flexibility to make this determination
as circumstances require and inallows it to ensure that the Company maintains a
mannerleadership structure that
it believes is,
best to provideat any given time, the most appropriate
leadership for our
Company.Company and, as a result, our stockholders. The board of directors believes that its current leadership structure, with Mr. Ocampo serving as Chairman of the board of directors and Mr.
CroteauDaly serving as Chief Executive Officer, is appropriate because it enables the board of directors as a whole to engage in oversight of management, promote communication between management and the board of directors and oversee governance matters and risk management activities, while allowing our Chief Executive Officer to focus on his primary responsibility for the operational leadership and strategic direction of the Company. In addition, the board of directors benefits from the perspective and insights of Messrs. Ocampo and
CroteauDaly as a result of their extensive experience in the semiconductor industry.
The board of directors oversees our risk management activities. The board of directors implements its risk oversight function both as a whole and through delegation to its committees. These committees meet regularly
and report back to the full board of directors. The audit committee has primary oversight responsibility with respect to financial risks as well as oversight responsibility for our overall risk assessment and risk management policies and systems. The audit committee oversees our procedures for the receipt, retention and treatment of complaints relating to accounting and auditing matters and oversees our management of legal and regulatory compliance systems.systems, including risks associated with information security and technology (including cybersecurity). The compensation committee oversees risks relating to our compensation plans and programs, including the evaluation of whether our compensation programs contain incentives for executive officers and employees to take risks in performing their duties that are reasonably likely to have a material adverse effect on us. The compensation committee believes that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on us. The nominating and governance committee oversees risks associated with corporate governance and the
composition of our board of directors, including the independence of board
members.members, and ESG-related matters. Each committee reports on its activities to the full board of directors from time to time. This enables the board of directors and its committees to coordinate their respective risk oversight roles.
Policy Against Hedging of Stock
Our insider trading policy prohibits our directors, officers, employees and consultants from entering into certain forms of hedging or monetization transactions, such as zero-cost collars, prepaid variable forward sale contracts, equity swaps and exchange funds because such transactions allow an individual to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the individual may no longer have the same objectives as our other stockholders.
Director Overboarding Guidelines
Effective January 6, 2022, the board of directors instituted guidelines to limit the number of public company boards that our directors participated on (including our board) to no more than three for audit committee members and those in chief executive officer or equivalent positions or four for those directors who do not fall into one or more of the foregoing categories, without prior approval from the board of directors.
Director Retirement Guidelines
Effective January 6, 2022, the board of directors adopted a retirement policy for our directors whereby any director who reaches the age of 78 must tender their resignation to be effective at the end of the end of their then current term. Any director age 78 or older at the time of passage of this policy is not subject to the retirement policy.
The board of directors currently has the following standing committees: audit, compensation and nominating and governance. The board of directors has adopted a written charter for each standing committee, each of which may be accessed on the Investor Relations section of our website athttp://ir.macom.com/governance-documents. A summary of the duties and responsibilities of each committee is set forth below.
Our audit committee consists of Messrs.
Bland, Daly, Ribar,
Ritchie and
Van Lunsen,VanLunsen, with Mr. Ribar serving as Chair. Our audit committee oversees our corporate accounting and financial reporting process, internal accounting and financial controls and audits of our financial statements. Our audit committee also evaluates the independent auditor’s qualifications, independence and performance; engages and provides for the compensation of the independent auditor; establishes the policies and procedures for the retention of the independent auditor to perform any proposed permissible
non-audit services; reviews our annual audited financial statements; reviews our critical accounting policies, our disclosure controls and procedures and internal controls over financial reporting; discusses with management and the independent auditor the results of the annual audit and the reviews of our quarterly unaudited financial statements; oversees our financial risk assessment and management programs; reviews our information security and technology risks (including cybersecurity), including our information security and risk management programs; and reviews related person transactions that are required to be disclosed under Item 404 of Regulation
S-K. Our board of directors has determined that each of our audit committee members meets the requirements for independence and financial literacy under the applicable rules and regulations of the SEC and Nasdaq. Our board of directors has determined that each of Messrs. Ribar,
Ritchie and
Van LunsenVanLunsen is an audit committee financial expert as defined under the applicable rules and regulations of the SEC.
Our compensation committee consists of Messrs. Chung, DalyRibar, Ritchie and Van Lunsen,VanLunsen, with Mr. Chung serving as Chair. Our compensation committee oversees our compensation plans, policies and programs for our executive officers and our board of directors. The compensation committee is also responsible for overseeing our equity compensation and other employee benefit plans, and for reviewing our Compensation Discussion and Analysis. TheIn addition, the compensation committee also oversees our submissions to stockholders on executive compensation matters, including stockholder advisory votes on executive compensation and the frequency of such votes, incentive and other executive compensation plans and amendments to such plans and engagement with proxy advisory firms and other stockholder groups on executive compensation matters. Our board of directors has determined that each member of our compensation committee meets the requirements for independence under the applicable rules and regulations of the SEC Nasdaq and Section 162(m) of Internal Revenue Code of 1986, as amended (the “Code”), to the extent applicable.Nasdaq. Pursuant to its charter, the compensation committee may form and delegate
authority to subcommittees and delegate authority to one or more designated members of the committee. The
compensation committee may also delegate to one or more senior executive officers the authority to make grants of equity-based compensation to eligible
non-officer employees, subject to compliance with applicable laws. For additional discussion of the processes and procedures the compensation committee has used to determine executive officer compensation please refer to the section entitled, “Named Executive Officer Compensation, Compensation Discussion and Analysis – How We Set Executive Compensation.”
During
In connection with setting our fiscal year
2018,2021 executive compensation, our compensation committee
engaged Radford Consulting (“Radford”),did not engage a compensation consultant,
and reviewedbut did review certain survey data and analyses
and other benchmarking materials regarding executive and
non-employee director
compensation. Our compensation
compiled by Radford incommittee engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) as our compensation consultant at the end of fiscal year 2021 to advise on our fiscal year 2022 executive compensation, and continues to engage with Pearl Meyer as our compensation consultant during fiscal year 2022. In connection with
setting executive compensation. Please see “Director Compensation” and “Named Executive Officer Compensation, Compensation Discussion and Analysis” for further description of the services and data provided by Radford. Prior to continuing Radford’sits engagement,
Pearl Meyer supported the compensation committee
consideredby, among other things, reviewing and recalibrating our peer group of comparable companies, performing benchmarking analysis covering the
independencecompensation of
Radford in accordance with the terms of its charter. The committee determined that Radford was independentour executive officers and
did not identify any conflicts of interest with respect to Radford.advising on compensation plan design structure given stockholder feedback.
Nominating and Governance Committee
Our nominating and governance committee consists of Messrs. Bland, Chung and
Van Lunsen,VanLunsen, with Mr. Bland serving as Chair. The nominating and governance committee is responsible for identifying individuals qualified to become members of our board of directors, receiving and reviewing nominations for such qualified individuals, making recommendations regarding candidates to serve on our board of directors,
and overseeing evaluations of the board of directors and its
committees.committees and exercising oversight concerning the Company’s ESG matters. In making recommendations regarding board candidates, the nominating and governance committee will consider desired board member qualifications, expertise, diversity and characteristics. In addition, the nominating and governance committee is responsible for making recommendations concerning governance matters. The nominating and governance committee is also responsible for reviewing and making recommendations concerning the structure and function of the committees of our board of directors, after consultation with the applicable committee chairs, and for reviewing any stockholder proposals relating to governance matters and our response to such proposals. Our board of directors has determined that each member of our nominating and governance committee meets the requirements for independence under the applicable Nasdaq listing rules.
Pursuant to its charter, the nominating and governance committee will also consider qualified director candidates recommended by our stockholders. The nominating and governance committee evaluates the qualifications of candidates properly submitted by stockholders in the same manner as it evaluates the qualifications of director candidates identified by the committee or the board of directors. Stockholders can recommend director candidates by following the instructions outlined below in the section entitled “Additional Information – Consideration of Stockholder-Recommended Director Nominees.” No nominations for director were submitted to the nominating and governance committee for consideration by any of our stockholders in connection with the Annual Meeting.
The nominating and governance committee may rely on recommendations from a number of sources when identifying potential director candidates, including recommendations from current directors and officers. The committee may hire outside consultants, search firms or other advisors to assist in identifying director candidates.
When evaluating a candidate for director, the nominating and governance committee considers, among other things, the candidate’s judgment, knowledge, integrity, diversity, expertise and strategic, business and industry experience, which are likely to enhance the board of directors’ ability to govern our affairs and business. We do not have a separate policy regarding consideration of diversity in identifying director nominees, but the nominating and governance committee strives to nominate directors with a variety of complementary skills and backgrounds so that, as a group, the board of directors will possess a broad perspective and the appropriate talent, skills and expertise to oversee our business. The nominating and governance committee also takes into account independence requirements imposed by law or regulations (including the Nasdaq listing standards). In the case of
director candidates recommended by stockholders, the nominating and governance committee may also consider the number of shares held by the recommending stockholder, the length of time that such shares have been held and the relationship, if any, between the recommending stockholder and the recommended director nominee.
DIRECTOR COMPENSATION
2018Board Diversity Matrix
We believe that, as a global company serving a wide variety of markets across multiple geographies, embracing and cultivating diversity is an essential part of serving our customers and increasing stockholder value. Our goal is to reflect our commitment to diversity in the leadership of MACOM, including on the board of directors.
The following diversity statistics are reported in the standardized Nasdaq disclosure matrix for our board of directors.
| | | | | | | | | | | | | | |
| Board Diversity Matrix (as of December 31, 2021) |
| Total Number of Directors | 8 |
| Female | Male | Non-Binary | Did Not
Disclose Gender |
| Part I: Gender Identity |
| Directors | 1 | 7 | — | — |
| Part II: Demographic Background |
| African American or Black | — | — | — | — |
| Alaskan Native or Native American | — | — | — | — |
| Asian | 1 | 2 | — | — |
| Hispanic or Latinx | — | — | — | — |
| Native Hawaiian or Pacific Islander | — | — | — | — |
| White | — | 5 | — | — |
| Two or More Races or Ethnicities | — | — | — | — |
| LGBTQ+ | — |
| Demographic Background Undisclosed | — |
2021 Director Compensation
The following table provides information regarding the compensation earned by ournon-employee directors during fiscal year 2018. Our2021. As an employee directors, Messrs. Ocampo and Croteau,director, Mr. Daly did not receive any additional compensation for his services as a director during fiscal year 2021. The compensation Mr. Daly earned for his service as our President and Chief Executive Officer during fiscal year 2021 is set forth in the "2021 Summary Compensation Table" below.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash
($) | | Stock Awards
($)(1) | | All Other Compensation | | Total
($) |
| Charles Bland | | 61,861 | | 129,954 | (2) | — | | 191,815 |
| Peter Chung | | 70,000 | | 129,954 | (2) | — | | 199,954 |
| John Ocampo | | 100,000 | (3) | — | | — | | 100,000 |
| Susan Ocampo | | 50,000 | | — | | — | | 50,000 |
| Geoffrey Ribar | | 77,500 | | 129,954 | (2) | — | | 207,454 |
John Ritchie (4) | | 54,792 | | 276,000 | (5) | — | | 330,792 |
| Gil VanLunsen | | 72,500 | | 129,954 | (2) | — | | 202,454 |
(1)The amounts included under the “Stock Awards” column reflect the aggregate grant date fair value of the restricted stock unit awards granted in fiscal year 2021 to Messrs. Bland, Chung, Ribar and Ritchie and the restricted stock awards granted in fiscal year 2021 to Mr. VanLunsen, computed in accordance with FASB ASC Topic 718. For more information on the underlying valuation assumptions used to calculate grant date fair values, see Notes 2 and 20 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended October 1, 2021. As of October 1, 2021, Messrs. Bland, Chung and Ribar each held unvested restricted stock units representing 2,093 shares of our common stock, Mr. Ritchie held unvested restricted stock unit awards representing 4,490 shares of our common stock and Mr. VanLunsen held unvested restricted stock awards representing 2,093 shares of our common stock.
(2)On March 5, 2021, we granted each of Messrs. Bland, Chung and Ribar an annual restricted stock unit award representing 2,093 shares of our common stock for their services as directors during fiscal year 2018.2021. In lieu of a restricted stock unit award, Mr. Croteau’s compensation is included with thatVanLunsen elected to receive a restricted stock award representing 2,093 shares of our other named executive officerscommon stock for his service as a director during fiscal year 2021. Mr. and Mrs. Ocampo have not been granted any equity-based compensation from the Company in “2018 Summary Compensation Table” below. | | | | | | | | | | | | | | | | |
Name | | Fees Earned or
Paid in Cash ($) | | | Stock Awards ($)(1) | | | All Other
Compensation | | | Total ($) | |
| | | | |
Charles Bland | | | 65,000 | | | | 129,997(2) | | | | — | | | | 194,997 | |
| | | | |
Peter Chung | | | 65,000 | | | | 129,997(2) | | | | — | | | | 194,997 | |
| | | | |
Stephen Daly | | | 62,500 | | | | 129,997(2) | | | | — | | | | 192,497 | |
| | | | |
Susan Ocampo | | | 45,000 | | | | — | | | | — | | | | 45,000 | |
| | | | |
Geoffrey Ribar | | | 55,000 | | | | 129,997(2) | | | | — | | | | 184,997 | |
| | | | |
Gil Van Lunsen | | | 77,500 | | | | 129,997(2) | | | | — | | | | 207,497 | |
| (1) | The amounts included under the “Stock Awards” column reflect the aggregate grant date fair value of the restricted stock unit awards granted in fiscal year 2018 to ourrespect of their services as directors.
(3)Represents a pro-rata portion of the director fees due to Mr. Ocampo from April 25, 2021, when Mr. Ocampo became a non-employee director, through October 1, 2021. (4)Mr. Ritchie commenced service as a member of the board of directors on March 8, 2021. (5)On March 9, 2021, we granted Mr. Ritchie an initial restricted stock unit award representing 2,765 shares of our common stock that vests in three substantially equal annual installments beginning May 15, 2022 and an annual restricted stock unit award representing 1,725 shares of our common stock for his service as a director during fiscal year 2021.
Our non-employee directors, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For more information on the underlying valuation assumptions used to calculate grant date fair values, see Notes 2 and 18 to Notes to Consolidated Financial Statements in our Annual Report on Form10-K for the fiscal year ended September 28, 2018. As of September 28, 2018, Messrs. Bland, Chung, Daly, and Van Lunsen each held unvested restricted stock units representing 6,086 shares of our common stock, Mr. Bland held outstanding stock options with respect to 10,500 shares of our common stock, and Mr. Ribar held unvested restricted stock units with respect to 8,621 shares of our common stock. |
| (2) | On March 2, 2018, we granted each of Messrs. Bland, Chung, Daly, Ribar and Van Lunsen an annual restricted stock unit award representing 6,086 shares of our common stock for their services as directors during fiscal year 2018. Mrs. Ocampo has not been granted any equity-based compensation from the Company in respect of her service as a director.
|
Ournon-employee directors are compensated under ournon-employee director compensation programpolicy, adopted by the board of directors in April 2021, which may be amended or updated from time to time, as described below. Our compensation program for ournon-employee directors has two elements: cash compensation and equity-based compensation. Given her substantial holdingsWith the goal of furthering the independence of the board of directors and following review of stockholder feedback, Mr. Ocampo became a
non-employee director on April 25, 2021. Following this change, and in accordance with our common stock, to date we have not granted equity-basednon-employee director compensation toprogram adopted in April 2021, both Mr. and Mrs. Ocampo received cash compensation for hertheir service as a director.on the board of directors beginning on April 25, 2021 and will be eligible to receive equity compensation beginning in fiscal year 2022.
Cash Compensation. The cash component of ournon-employee director compensation program is as follows: •a $45,000$50,000 annual cash retainer for each non-employee director;
non-employee• director;
an additional annual cash retainer of $10,000 for each member of the audit committee, $7,500 for each member of the compensation committee and $5,000 for each member of the nominating and governance committee, in each case, other than the chair of such committee; and
•an additional annual cash retainer of $20,000 for the chair of the audit committee, $15,000 for the chair of the compensation committee and $10,000 for the chair of the nominating and governance committee.
committee; and
•an additional annual cash retainer of $100,000 for the non-employee director chairperson of the board of directors.
These cash payments are calculated and paid in quarterly installments and are prorated for partial quarters of board or committee service.Non-employee directors are also reimbursed for expenses in connection with attendance at board of directors and committee meetings.Non-employee directors are also eligible for coverage under our health care plans at their electionelection.
Equity Compensation. For fiscal year 2021, other than Mr. and at their sole expense.
Equity Compensation.Non-employeeMrs. Ocampo, non-employee directors arewere eligible to receive equity-based awards under the MACOM Technology Solutions Holdings, Inc. 20122021 Omnibus Incentive Plan (as amended, our “2012(our “2021 Omnibus Incentive Plan”). The equity component of ournon-employee director compensation program is as follows:
•Each of ournon-employee directors is granted an annual restricted stock unit award (or, upon the director’s request, a restricted stock award) on the first business day following the date of our annual meeting of stockholders representing a number of shares of common stock having a grant date fair market value of approximately $130,000.$160,000 (increased in April 2021 for awards beginning in fiscal year 2022 from $130,000). This award vests in full on February 15 of the calendar year immediately following the calendar year of its grant, subject to thenon-employee director’s continued service through such date and the terms of our 20122021 Omnibus Incentive Plan. If a non-employee director first joins the board of directors after the annual grant for the calendar year of his or hertheir appointment or election has been made, then he or she isthey will be granted an annual restricted stock unit award (or, upon the director’s request, a restricted stock award) on the first business day following his or hertheir appointment or election representing a number of shares of our common stock having an aggregate grant date fair market value equal to $130,000pro-rated$160,000 (increased in April 2021 for awards beginning in fiscal year 2022 from $130,000) prorated based on the number of calendar days remaining in the calendar year following such appointment or election. This award vests in full on the first February 15 following its grant date, subject to thenon-employee director’s continued service through such date and the terms of our 20122021 Omnibus Incentive Plan.
•In addition to and not in lieu of the annual grant described above, when anon-employee director first joins the board of directors, he or she isthey will be granted aone-time initial restricted stock unit award (or, upon the director’s request, a restricted stock award) on the first business day following his or hertheir appointment or election representing a number of shares of our common stock having an aggregate grant date fair market value of approximately $170,000. This award vests in three equal annual installments withbeginning on the first such vesting date beingthat is one year following whichever ofthe February 15, May 15, August 15 or November 15 that is soonest to follow thenon-employee director’s date of appointment or election, in all cases subject to thenon-employee director’s continued service through such date and the terms of our 20122021 Omnibus Incentive Plan. Such initialInitial equity grants are not prorated.
prorated for a non-employee director’s first partial year of service.In accordance with ournon-employee director compensation program as in effect at the time, on March 2, 20185, 2021 we granted each of Messrs. Bland, Chung Daly,and Ribar and Van Lunsen an annual restricted stock unit awardunits representing 6,0862,093 shares of our common stock for theirhis service as directorsa director during fiscal year 2018,2021, which will vest in full on February 15, 2019,2022, subject to suchnon-employee director’s continued service through such date and the terms of our 20122021 Omnibus Incentive Plan. Our 2012Mr. VanLunsen elected to receive a restricted stock award representing 2,093 shares of our common stock, subject to the same vesting terms as the restricted stock unit awards granted to the directors as outlined above. On March 9, 2021 we granted Mr. Ritchie an initial restricted stock unit award representing 2,765 shares of our common stock, which vests in three substantially equal annual installments beginning May 15, 2022 and an annual restricted stock unit award representing 1,725 shares of our common stock, which will vest in full on February 15, 2022, subject to Mr. Ritchie’s continued service through such date and the terms of our 2021 Omnibus Incentive Plan provides thatPlan. Pursuant to our director compensation policy, the initial and annualnon-employee director equity awards described above are granted automatically without the need for further action by our board of directors or the compensation committee, except thatcommittee.
non-employee
directors who beneficially own more than 25% of our common stock are not eligible to receive such automatic grants.
The following table provides information regarding our executive officers as of January
16, 2019:14, 2022: | | | | | | | | | | | | | | |
Name | | Age | | Position |
| Stephen Daly | | 56 | | President and Chief Executive Officer |
John OcampoKober | | 5952 | | Chairman |
John Croteau | | 57 | | President, Chief Executive Officer and Director |
Robert McMullan | | 64 | | Senior Vice President and Chief Financial Officer |
Dr. Alex BehfarDouglas Carlson | | 5560 | | Senior Vice President, and Chief Scientist, Photonics |
Dr. Douglas Carlson | | 57 | | Senior Vice President and General Manager, RF & MicrowaveTechnology |
| Robert Dennehy | | 4548 | | Senior Vice President, Operations |
| Donghyun Thomas Hwang | | 5558 | | Senior Vice President, Global Sales |
Vivek RajgarhiaAmbra Roth | | 5140 | | Senior Vice President, General Counsel, Human Resources and General Manager, Lightwave |
Preetinder Virk | | 55 | | Senior Vice President and General Manager, NetworksSecretary |
For biographical information for
Messrs. Ocampo and Croteau,Mr. Daly, please refer to the section entitled “Proposal 1: Election of Directors.”
Robert McMullan
John Kober has served as our Senior Vice President and Chief Financial Officer since January 2014.May 2019. Prior to that, Mr. Kober served as our Vice President, Finance, Corporate Controller since August 2015. Prior to joining us,MACOM, Mr. McMullanKober served as founderVice President, Corporate Controller and Chief Executive OfficerTreasurer at CIRCOR International Inc., a manufacturer of Sands Point Associates, LLC, a mergershighly engineered products and acquisitions advisory, fund raisingsub-systems for applications in energy, industrial, aerospace, defense and operations consultancy, since January 2011. From December 2010other global markets from September 2005 to August 2011, he served as Chief Executive Officer2015. Mr. Kober earned his B.S.B.A. in Accounting at the University of FA Holding, Inc., holding company of First Allied Securities, Inc., a full-service independent broker/dealer. From May 2010 to November 2010, Mr. McMullan served as Chief Financial OfficerRhode Island and Chief Operating Officer of Partsearch Technologies, Inc., an ecommerce electronics replacement parts company. From June 2005 to September 2009, Mr. McMullan was Chief Executive Officer of Control Point Solutions, Inc. (which was acquired by HCL Technologies, Ltd.his MBA in September 2008), a provider of voice, data and wireless telecommunications expense management services. Prior to joining Control Point Solutions, Inc., Mr. McMullan served as Chief Financial Officer of various public companies, including Conexant Systems, Inc., GlobespanVirata, Inc. and The BISYS Group, Inc. Mr. McMullan holds a B.A. in Business AdministrationFinance from St. Michael’s College.Seton Hall University.
Dr. Alex Behfar Douglas Carlson has served as our Senior Vice President, and Chief Scientist, Photonics,Technology, since January 2016. Previously,September 2019. From October 2017 through September 2019, he served as our Senior Vice President and General Manager, Photonic Solutions, from December 2014 to January 2016. Prior to joining us, in 2000 he founded BinOptics Corporation (“BinOptics”), a provider of indium phosphide lasers for data centers, mobile backhaul, silicon photonics and access networks, and served as the Chairman and Chief Executive Officer of BinOptics from its inception through our December 2014 acquisition of BinOptics. He holds an M.S. and a Ph.D. in Electrical Engineering from Cornell University and a B.Sc. in Electrical and Electronic Engineering from King’s College, University of London.Dr. Douglas Carlson has served as our Senior Vice President and General Manager, RF & Microwave, since October 2017. Fromfrom August 2017 through September 2017, he served as our Senior Vice President, Technology, and from October 2016 through July 2017 he served as our Vice President, Technology Development. Dr. Carlson previously served as ourPrior to that, he held the position of Director of Aerospace and Defense Strategy fromsince April 2013. From August 2012 to April 2013, through September 2016, as ourhe was Director, Aerospace and Defense Business Development, from August 2012 to April 2013, and as our Chief Engineer from October 2010 to August 2012.2012, he held the position of Chief Engineer. Before joining MACOM in 1990, he served on the research staffs of MIT and Bell Laboratories. Dr. Carlson holds a Sc.B.ScB in Electronic Materials from Brown University and a Sc.D.ScD in Electronic Materials from the Massachusetts Institute of Technology.
Robert Dennehyhas served as our Senior Vice President, Operations, since October 2013, and prior to that had served as our Vice President, Operations, since March 2011. He previously served as Managing Director of our Cork, Ireland subsidiary from 2006 to March 2011. Prior to that Mr. Dennehy served in product management and other roles of increasing responsibility with us. Mr. Dennehy holds an Associate’s degree in Electronic Engineering and a Diploma in Business Administration from Henley Business School, London.
Donghyun Thomas Hwang has served as our Senior Vice President, Global Sales, since January 2015. From January 2002 through August 2014, Mr. Hwang held various sales positions at Hittite, including Vice President of Worldwide Sales from January 2010 to October 2013, Vice President of Asia-Pacific Sales from November 2013 to July 2014 and, following the acquisition of Hittite by ADI, Director of Asia-Pacific Sales from July 2014 to August 2014. Mr. Hwang received a B.S. in Electrical Engineering and an M.S. in Electrical Engineering from Lehigh University.Vivek Rajgarhia
Ambra Roth has served as our Senior Vice President, General Counsel, Human Resources and General Manager, Lightwave,Secretary since August 2017.October 2019. Prior to that, heMs. Roth served as our Vice President, General Counsel and Secretary since May 2018, and in roles of increasing responsibility since joining MACOM in December 2013, including most recently as Associate General Manager, Lightwave Networking Components, from October 2016 to August 2017. He previously served as our Vice President of Strategy, High Speed Networking, from May 2013 to September 2016, and as the General Manager of our optoelectronics businessCounsel from April 2011 to2017 until May 2013.2018. Prior to joining MACOM, Mr. Rajgarhia was CEO andCo-Founder of OptomaiMs. Roth served as Associate General Counsel for Mindspeed Technologies, Inc., a provider of 100G optoelectronic devices,semiconductor networking solutions, which was acquired by MACOMshe joined in April 2011. Earlier in hisNovember 2007. Ms. Roth has over 15 years of in-house legal experience representing technology companies, having started her legal career Mr. Rajgarhia held senior roles at OpNextVivendi Universal Games, Inc., Gigoptix, Inc., Lucent Technologiesa video games publisher and JDS Uniphase Corporation. Mr. Rajgarhiaholdings company for Sierra Entertainment and Blizzard Entertainment. Ms. Roth holds a Bachelor of Electrical Engineering degreeArts in Political Science and French from Stevens Institute of Technology.Preetinder Virk has served as our Senior Vice President and General Manager, Networks, since January 2017. He previously served as our Senior Vice President and General Manager, Carrier Networks, from October 2014 to January 2017, and prior to that had served as our Senior Vice President, Strategy, since December 2013. From May 2012 to December 2013, Mr. Virk served as Senior Vice President and General Manager, Communications Processing, for Mindspeed Technologies, Inc. (“Mindspeed”). From April 2009 to February 2012, Mr. Virk served as Director, Global Network Segment Marketing, for Freescale Semiconductor, Inc., a provider of embedded processing solutions for the automotive, consumer, industrial and networking markets. From October 2007 to April 2009, Mr. Virk served as Mindspeed’s Senior Vice President and General Manager, Enterprise and Consumer Premise. Mr. Virk earned a Master’s Degree in Business AdministrationLoyola Marymount University and a Master’s Degree in Electrical EngineeringJuris Doctor from Worcester Polytechnic Institute. He also is a graduate of Thapar Institute of Engineering in India.
Loyola Law School. NAMED EXECUTIVE OFFICER COMPENSATION,
COMPENSATION DISCUSSION AND ANALYSIS
| | |
| NAMED EXECUTIVE OFFICER COMPENSATION, |
| COMPENSATION DISCUSSION AND ANALYSIS |
This compensation discussion and analysis provides information about our executive compensation programs for fiscal year
20182021 as they relate to the following “named executive officers,” whose compensation is presented in the tables and accompanying narratives following this discussion:
•Stephen Daly, President and Chief Executive Officer
•John Kober, Senior Vice President and Chief Financial Officer
•Robert Dennehy, Senior Vice President, Operations
•Donghyun Thomas Hwang, Senior Vice President, and General Manager, LightwaveGlobal Sales
•Ambra Roth, Senior Vice President, General Counsel, Human Resources and General Manager, NetworksSecretary
Semiconductor Industry Considerations
The semiconductor industry, in which we operate, is highly competitive, cyclical and characterized by constant and rapid technological change, with evolving standards, short product lifecycles and significant fluctuations in supply and demand, all of which may have a material impact on our business and employee compensation, among other things. Downturns in the semiconductor industry may be prolonged and difficult or impossible to predict, and downturns in many sectors of the electronic systems industry have, in the past, contributed to extended periods of weak demand for semiconductor products. We have experienced decreases in our revenue, profitability, cash flows and stock price during such downturns in the past, and may be similarly harmed by future downturns, particularly if we are unable to effectively respond to reduced demand in a particular market. In addition, the competition for attracting and retaining qualified talent within our industry is fierce.
Our compensation programs take our industry dynamics into consideration with regard to how we establish such programs across the organization, including the programs for our executive officers and our broader employee base. For example, our executive compensation programs generally place a larger proportion of each executive’s compensation in performance-based equity elements and our short-term cash incentive program is structured to address the cyclical and highly competitive nature of the industry and environment in which we operate.
Objectives of Our Executive Compensation Programs
The compensation committee of our board of directors oversees the compensation programs covering our executive officers, including our named executive officers, under its authority as delegated by our board of directors. These compensation programs are designed to:
•attract and retain the best executive talent;
•motivate our executives to achieve our financial and business goals; and
•align our executives’ interests with those of our stockholders to drive increased stockholder value.
To achieve these goals, we structure our executive compensation programs to provide a competitive level of total compensation and create a strong
link withconnection between our financial and business results by
tyinglinking a significant portion of each executive’s compensation to the achievement of specific performance goals that we expect will increase stockholder value.
The key elements of the performance-based compensation provided to our named executive officers in fiscal year 2021 were our equity program, which included performance-based restricted stock units and our cash incentive programs, each as described below.
How We Set Executive Compensation
The compensation program in effect for our named executive officers for fiscal year 20182021 reflects a combination of individually negotiated compensation arrangements that we have entered into with certain of our named executive officers, as described below, and a total compensation program for our executive officers developed in prior periods by our compensation committee
and further refined by it in fiscal year
20182021 as described in more detail below. Our compensation committee annually reviews and periodically adjusts the total compensation payable to our named executive officers based on the information and factors discussed below and recommendations made by our Chief Executive Officer
from time to time (other than with respect to his own compensation)
. from time to time.
During fiscal year 2018,2021, our compensation committee used industry total compensation data previously compiled in fiscal year 2018 by Radford Consulting (“Radford”), our former compensation consultant, and industry proxy statement data as a reference in evaluating and refining our executive compensation programs. More specifically, during fiscal year 20182021, our compensation committee reviewed the compensation data previously compiled by Radford from companies with $200 million to $2.0 billion in annual revenue which we believe are comparable to us in size, and proxy statement data gathered from the followinga “peer group” of companies that we considered similar to us in terms of business lines or in terms of potential competition for executive talent: Analogic Corporation, Cabot Microelectronics Corporation, Cavium,CMC Materials, Inc., Cirrus Logic Inc., Cypress Semiconductor Corporation, Diodes Incorporated, Entegris, Inc., Inphi Corporation, Integrated Device Technology, Inc., IPG Photonics Corporation, MaxLinear, Inc., Microsemi Corporation, MKS Instruments, Inc., Monolithic Power Systems, Inc., Power Integrations Inc., Rambus Inc., Semtech Corporation, Silicon Laboratories Inc., Teradyne Inc. and Xperi Holding Corporation.
As noted elsewhere in this Proxy Statement, while our compensation committee did not engage a compensation consultant to advise on fiscal year 2021 compensation, it did engage Pearl Meyer as our compensation consultant at the end of fiscal year 2021 to advise on fiscal year 2022 compensation and continues to engage with Pearl Meyer as our compensation consultant during fiscal year 2022.
In connection with its ongoing discussions with Pearl Meyer, our compensation committee amended the above peer group at the beginning of fiscal year 2022 to include companies in the semiconductor, electric components, communications equipment and electronic manufacturing industries. The compensation committee’s assessment of potential peers included whether the companies are direct market share competitors, broader competitors for employee talent and industry comparators, as well as the frequency the comparators were used as a peer compensation benchmarks among other companies in the peer group. Potential peers were also assessed based on their relative size, including trailing quarterly and annual revenue as well as market capitalization as of December 31, 2020 and October 6, 2021, relative gross margins and research and development (“R&D”) expense and their market capitalization to revenue ratio, recognizing that there are a limited number of direct market share comparators of similar size to us. The revenue range of the selected companies varied between $100 million and $4.5 billion, and market capitalization (as of December 31, 2020) varied between $1.5 billion and $20 billion. Our relative positioning was at the 21st percentile of revenue and the 29th percentile of market capitalization. Selected peers consisted of the following companies: II-IV, Inc., Allegro MicroSystems, Inc., Belden Inc., Diodes, Inc., IPG Photonics Corp., Lattice Semiconductor Corp., Lumentum Holdings, Inc., MaxLinear, Inc., Monolithic Power Systems, Inc., Power Integrations, Inc., Qorvo, Inc., Semtech Corp., Silicon Laboratories, Inc. and Wolfspeed, Inc.
Using such industry total compensation and proxy statement data, andas well as subjective factors, such as the relative importance we place on each role within the Company, considerationsreview of the factors utilized by peer group members in setting equity compensation practices, internal pay equity and other factors, theour compensation committee in fiscal year 2015 developed2021 determined to apply the previously established total compensation “targets” for each of our executive officer positions. TheOur compensation committee then developed a total compensation program, primarily consisting of base salary, short-term cash incentives and long-term equity incentives, as discussed in further detail below, designed to provide each executive officer with the opportunity to realize targeted total compensation while furthering the objectives of our executive compensation programs described above. Based in part on the results of our most recent“say-on-pay” vote in 2016, in which our stockholders overwhelmingly approved our executive compensation programs, ourOur executive compensation programs have generally been carried forward through fiscal year 20182021 but refined from time to time based on theour compensation committee’s review of the industry total compensation, proxy statement data and subjective factors described above, with adjustments as noted in “Elements of Compensation” below. We did not specifically benchmark the total compensation or individual components of compensation for our named executive officers in fiscal year 2018, other than for our Chief Financial Officer as described below.2021. Based on our review of the 2015 data described above, and the Chief Financial Officer data described below, we believe that the total compensation provided to our named executive officers in fiscal year 20182021 was generally below market median to market median overall assuming a “target” levelachievement of achievement against theour target performance targetsgoals applicable to the short-term cash incentives and long-term equity incentives granted to such named executive officers in fiscal year 20182021 (discussed in more detail below), and market median to above market median overall assuming achievement of our maximum performance goals.
Fiscal Year 2021 Stockholder Outreach Initiative
The board of directors values the opinions of our stockholders in matters related to corporate governance, executive compensation and other matters.We have conducted extensive investor outreach throughout the year involving members of senior management and investor relations. This outreach focused on better understanding the concerns and perspectives of our stockholders.
The compensation committee considers, in addition to other factors, the outcome of our say-on-pay vote in determining the structure of our executive compensation program and making future compensation decisions. At our 2021 annual meeting of
stockholders, our stockholders approved, on an advisory basis, the compensation of our named executive officers by 62.51% of the shares voted. While this was an improvement over the previous year, it was still below the level the board of directors desired. In response, members of our compensation committee and our management team led an extensive stockholder outreach initiative from September 2021 to November 2021 focused on understanding the perspectives and concerns of our stockholders, including those who did not support our most recent say-on-pay vote. The compensation committee then made design changes to our fiscal year 2022 program in response to the stockholder feedback we received.
| | |
| Fiscal Year 2021 Stockholder Outreach At-A-Glance (September 2021 – November 2021) |
|
•Entire process overseen by our management team, and compensation committee members were available upon request
•Reached out to top 35 non-insider stockholders representing over 80% of non-insider ownership, including many who voted against say-on-pay, to listen to stockholders and receive their feedback on our executive compensation program, and held discussions with stockholders representing over 37% of non-insider ownership
•A compensation committee member joined two calls in calendar year 2021 and management participants did not include our Chief Executive Officer
•Stockholders provided feedback on executive compensation program in addition to other areas such as ESG factors
•Management reported detailed feedback from each discussion to the compensation committee and nominating and governance committee, as applicable, for their review and consideration
In addition to the September to November 2021 outreach program noted above, we also engaged with stockholders in early calendar year 2021 prior to our 2021 annual meeting. Including these additional stockholders in disclosure of our outreach efforts brings total stockholder engagement to over 55% of non-insider ownership.
What We Heard and How We Responded
We heard a “maximum” levelrange of achievementdifferent perspectives on our executive compensation program from stockholders during our fiscal year 2021 outreach, all of which were considered by the compensation committee. We received positive feedback about the overall program and support for our management team and their performance since our executive management transition in May 2019. Additionally, many of our larger stockholders agreed with the compensation committee on the importance of having a stable senior leadership team with the knowledge and expertise to achieve our financial and business goals.
However, we also heard some common feedback about specific aspects of our executive compensation program’s design, discussed below, as well as comments cautioning us against suchovercomplicating our program or introducing too many changes. Based on this feedback, as well as reviewing policies and reports of certain proxy advisors, including Institutional Shareholder
Services Inc. and Glass, Lewis & Co., the compensation committee examined ways to improve our program without compromising its strengths, including its focus on our core business goals, promoting stability and driving performance,
targets.as well as its overall emphasis on long-term performance incentives. As a result, we made some important modifications to our programs, summarized below, and updated our disclosures in several key areas.
| | | | | | | | |
| What We Heard | | How We Responded |
| Performance periods and performance metrics in award programs | | For fiscal year 2022, we changed the emphasis of our performance-based long-term incentive awards by adding a new relative total stockholder return (“rTSR”) metric to supplement the current focus on financial results. The rTSR restricted stock unit awards are measured using a three-year measurement cycle (beginning October 2, 2021 and ending September 27, 2024). The addition of the rTSR will increase the emphasis on long-term stock performance, diversify the metrics used in our executive compensation program, and add a relative performance metric. Our board of directors believes that continuing our practices with respect to performance periods utilized in our non-GAAP Adjusted EPS (“Adjusted EPS”) performance-based awards are consistent with our peers using financial objectives and industry norms for cycle industries and motivate management to generate superior long-term returns for stockholders. In addition, the board of directors feels the program appropriately incentivizes, rewards, and aligns pay with performance. The board of directors will continue to evaluate the compensation program to ensure it achieves the objectives discussed above. |
| Some stockholders indicated they had a preference for additional metrics in the award programs and 3-year performance periods. |
| Stock ownership guidelines | | We established stock ownership guidelines for executive officers effective December 21, 2021. |
| Stockholders indicated that they would like to see stock ownership guidelines implemented to further align the interests of our executive officers with those of our stockholders. |
| Excise tax gross-ups and single-trigger change in control benefits | | Under our Change in Control Plan, effective January 1, 2022, change in control agreements entered into between the Company and newly eligible employees will no longer provide for excess parachute payment tax gross-up provisions. Under our Change in Control Plan, cash severance and acceleration of time-based equity awards continue to be double-trigger. While the Change in Control Plan provides for deemed achievement of performance metrics applicable performance-based equity awards upon a change in control, those awards continue to be subject to any applicable time-based vesting requirements, with potential double-trigger acceleration. In addition, in fiscal year 2021, our board of directors adopted, and our stockholders approved, our 2021 Omnibus Incentive Plan. Following stockholder approval of our 2021 Omnibus Incentive Plan, no new grants have been made or will be made under the MACOM Technology Solutions Holdings, Inc. 2012 Omnibus Incentive Plan, as amended (our “2012 Omnibus Incentive Plan”). In designing the 2021 Omnibus Incentive Plan, our board directors determined that, unlike the 2012 Omnibus Incentive Plan, the 2021 Omnibus Incentive Plan would not provide for automatic single-trigger vesting of any awards upon a change in control or other corporate transaction. |
| Stockholders indicated that they would like MACOM to eliminate existing excise tax gross- ups relating to Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) in our Change in Control Plan, as well as single-trigger equity change in control benefits. |
| | | | | | | | |
| What We Heard | | How We Responded |
| Compensation Discussion and Analysis enhancement | | In the spirit of continuous improvement, the management team and the compensation committee have reviewed with our board of directors the key takeaways from investor outreach meetings with our stockholders with the goal of continuing to evolve the components of our executive compensation program to best align executive compensation with our, and our stockholders’, needs. Our dialogue has led to enhancements to our practices and disclosure, which our board of directors believes are in our, and our stockholders’, best interests. |
| Stockholders expressed that they would like to see the enhancement of disclosure regarding components of our executive compensation program. |
| One-time awards | | As a matter of general practice, we do not issue one-time awards to our executive officers. In fiscal year 2020, we did issue one-time awards in connection with our executive management transition in May 2019. However, we did not issue any one-time executive officer awards in fiscal year 2021. Further, in the event the compensation committee felt it was in our stockholders’ best interest to award special one-time awards, the compensation committee would consider the feedback from stockholders as part of that process. |
| Stockholders discouraged use of one-time awards. |
| Director Independence | | In March 2021 John Ritchie joined the board of directors as an additional independent director. In April 2021, Mr. Ocampo ceased to be an employee director. In addition, our board of directors will continue to consider the addition of another independent director in the future. |
| Some stockholders expressed that they would like to see the addition of further independent directors to our board of directors. |
| Director Overboarding Guidelines | | Effective January 6, 2022, the board of directors instituted guidelines to limit the number of public company boards that our directors participate on (including our board) to no more than three for audit committee members and those in chief executive officer or equivalent positions or four for those directors who do not fall into one or more of the foregoing categories, without prior approval from the board of directors. |
| Some stockholders expressed that they would like to see limits placed on the number of public company boards that our directors participate on. |
| Director Retirement Guidelines | | Effective January 6, 2022, the board of directors adopted a retirement policy for our directors whereby any director who reaches the age of 78 must tender their resignation to be effective at the end of the end of their then current term. Any director age 78 or older at the time of passage of this policy is not subject to the retirement policy. |
| Some stockholders expressed that they would like to see retirement limits set for our board of directors. |
| Stockholder engagement and responsiveness | | During calendar year 2021, we participated in discussions with stockholders representing over 55% of our non-insider ownership. As a result of those discussions and the feedback we received from our stockholders, we made the changes to our executive compensation programs, and the additional policies and procedures described above. In addition, the management team, the compensation committee and the board of directors, are committed to continuing to engage with our stockholders on an ongoing basis. |
| Some stockholders encouraged us to provide robust disclosure around our engagement efforts including the feedback we received and how we responded. Stockholders also indicated they appreciated our outreach in 2021 and would appreciate continued engagement in the future. |
In making these changes, the compensation committee focused on designing our fiscal year 2022 updated executive compensation program in a way that reflects stockholder concerns and strengthens our ability to drive the execution of our financial and business goals over the long term.
Elements of Executive Compensation
Our compensation programs for our named executive officers primarily consist of the following elements:
•base salary and benefits;
•short-term cash incentives; and
•long-term equity incentives.
Base Salary
and BenefitsBase Salary.
The base salary for each of our named executive officers for fiscal year 20182021 was determined by our compensation committee and is intended to reflect each executive’s relative level of experience and responsibility.
In fiscal year 2018,2021, the compensation committee authorizedapproved a 3% increase to the7.6% annual base salary of our Chief Executive Officer,increase for Mr. Kober, a 15% increase to the2.6% annual base salary of our Chief Financial Officer,increase for Mr. Dennehy, and a 3% increase to the9.9% annual base salary ofincrease for each of our other named executive officers,Mr. Hwang and Ms. Roth, in each case effective in April 2018.based on standard merit increases and taking into account the continued desire to align our executive officers’ compensation with our industry peers. In determining these base salary increases, our compensation committee considered the industry total compensation and proxy statement data discussed above, and, for our Chief Financial Officer, considered theas well as other market data report prepared by Radford comparing his compensation to chief financial officers within our peer group.data. Based on such considerations, our compensation committee determined that such base salary increases were appropriate to maintain competitive levels of base salary for each of these individuals.
The following table shows the annual base salaries for
our named executive officers in place at the end of fiscal year 2018. | | |
Name
| | Fiscal Year
2018 Annual Base
Salary |
John Croteau
| | $669,500 |
President and Chief Executive Officer
| | |
Robert McMullan
| | $402,500 |
Senior Vice President and Chief Financial Officer
| | |
Robert Dennehy
| | $360,600 |
Senior Vice President, Operations
| | |
Vivek Rajgarhia
| | $350,200 |
Senior Vice President and General Manager, Lightwave
| | |
Preetinder Virk
| | $365,167 |
Senior Vice President and General Manager, Networks
| | |
Benefits. We generally provide our named executive officers health and welfare benefits, including health benefits and life insurance coverage, as well as the opportunity to participate in and receive matching contributions under our 401(k) plan, in each case, on the same terms as our other salaried employees.
We believe that, in order for us to attract top executive talent, we must not be limited to those individuals residing in the Boston metropolitan area and, in some cases, must be willing to offer to pay for or reimburse an agreed upon amount of relocation, commuting, housing and other related costs. In fiscal year 2018, we made such payments and reimbursements to our Chief Financial Officer in connection with his commuting to work from a home outside the Boston metropolitan area, in the amounts set forth in the “Summary Compensation Table” below.
Short-Term Cash Incentives
During fiscal year 2018, each of our named executive officers participated in our cash incentive programs. Our cash incentive programs were comprisedas of twosix-month performance periods within ourthe end of fiscal year with performance goals for each based on2021.
| | | | | | | | | | | | | | | | | | | | |
| | Annual Base Salary | | |
| Name | | Fiscal Year 2020 | | Fiscal Year 2021 | | Percentage Change |
| Stephen Daly | | $675,000 | | $675,000 | | —% |
| President and Chief Executive Officer | | | | | | |
| John Kober | | $395,000 | | $425,000 | | 7.6% |
| Senior Vice President and Chief Financial Officer | | | | | | |
| | | | | | |
| | | | | | |
| Robert Dennehy | | $380,000 | | $390,000 | | 2.6% |
| Senior Vice President, Operations | | | | | | |
| Donghyun Thomas Hwang | | $355,000 | | $390,000 | | 9.9% |
| Senior Vice President, Global Sales | | | | | | |
| Ambra Roth | | $355,000 | | $390,000 | | 9.9% |
| Senior Vice President, General Counsel, Human Resources and Secretary | | | | | | |
non-GAAP
adjusted operating income during the period but with different threshold, target and maximum performance goals for each period, as described below. We selected adjusted operating income as the performance metric for these programs because we believe it is a driver of stockholder value. The calculation of adjusted operating income excludes the impact of accrued costs for the payment of incentives under the cash incentive program itself, as well as the effect, where applicable, of intangible amortization expense, share-based compensation costs, impairment and restructuring charges, financing and litigation costs, acquisition- and integration-related costs, equity investment gains and losses, divested business losses, production and product line exit costs and other costs and includes certain deferred revenue amounts.Short-Term Cash Incentives
Our compensation committee determined the
adjusted operating income goals for each performance period based on our historic adjusted operating income, our annual
business plan and sequential revenue projections. These goals were intended to be challenging, yet obtainable, and align the interests of our executives with those of our stockholders by providing for a payout only in the event of exceptional performance that it believed would result in a meaningful increase in stockholder value.Our compensation committee determined the target and maximum cash incentive opportunities for each of our named executive officers for fiscal year 20182021 based on its business judgment regarding the appropriate level of incentive opportunities to motivate and retain these executives, and to establish an appropriate “pay for performance” linkage between their total compensation and our overall financial results. In making this business judgment, the compensation committee considered each named executive officer’s historical level of incentive opportunities, each named executive officer’s respective base salary and level of incentive opportunities relative to those of our other named executive officers and the industry total compensation and proxy statement data
discussed above and, for our Chief Financial Officer, the market data report prepared by Radford described above. Based on these considerations, our compensation committee maintainedapproved the annual target cash incentive opportunities (as a percentage of base salary) for all of our named executive officers other than our Chief Financial Officerfor fiscal year 2021 at theirpreviously-setthe same levels and increased the target short-term cashpreviously set for fiscal 2020. The incentive opportunity for our Chief Financial Officer from 50% to 75% of his base salary, effective beginning in April 2018, which our compensation committee determined was appropriate to maintain a competitive level of short-term incentive compensation opportunity for him. This incentive opportunitynamed executive officers was also subject to potential discretionary increase or reduction based on individual performance during the period. The following table shows the target annual cash incentive opportunity of each of our named executive officers eligible to receive a bonus for fiscal year 2018 assuming “target” level2021 depending on achievement against applicable performance metrics, expressed as a percentage of each executive’s annual base salary.
| | | | |
Name
| | Fiscal Year 2018
Cash Incentive Opportunity
(% of Base Salary) | |
John Croteau
| | | 100% | |
President and Chief Executive Officer
| | | | |
Robert McMullan*
| | | 75% | |
Senior Vice President and Chief Financial Officer
| | | | |
Robert Dennehy
| | | 50% | |
Senior Vice President, Operations
| | | | |
Vivek Rajgarhia
| | | 50% | |
Senior Vice President and General Manager, Lightwave
| | | | |
Preetinder Virk
| | | 50% | |
Senior Vice President and General Manager, Networks
| | | | |
* | Prior to April 2018, Mr. McMullan’s short-term cash incentive opportunity was 50% of his annual base salary.
|
First Half 2018 Program. Payments under the cash incentive program for the first half of fiscal year 2018 were based on our performance in that period as compared against the following adjusted operating income goals for the six months ended March 30, 2018:
| | | | | | | | |
First Half Name
| Fiscal Year 2018
Performance Goal2021 Target Cash Incentive Opportunity (% of Base Salary) | |
| Stephen Daly | 100% | |
| President and Chief Executive Officer | | Threshold
|
| John Kober | 75% | |
| Senior Vice President and Chief Financial Officer | | Target
|
| | |
| | |
| Robert Dennehy | 50% | |
| Senior Vice President, Operations | | Maximum
|
| Donghyun Thomas Hwang | 50% | |
| Senior Vice President, Global Sales | | Actual
Performance
|
Adjusted Operating Income
Ambra Roth | 50% | $90.8 million |
| Senior Vice President, General Counsel, Human Resources and Secretary | | $99.9 million | | $113.4 million | | $28.1 million |
As discussed above, the semiconductor industry is intensely competitive and can be highly cyclical, which is why we have historically comprised our short-term cash incentives for our entire organization, including our executive officers, into two six-month performance periods within our fiscal year, with performance goals for each period based on non-GAAP adjusted operating income during the applicable period. The structure of the short-term cash incentive program remains unchanged, and, consistent with certain prior fiscal years, our failure to meet the pre-determined targets means that no cash incentive payments would be made. Each of our named executive officers has an opportunity to earn one half of their applicable annual target cash incentive opportunity amount during each six-month period. The two six-month periods within our short-term cash incentive program allow us to adjust our targets for the then-forthcoming six-month based on changing business conditions, which we feel provides us with an opportunity to meet our compensation objectives outlined above. In each of the past two fiscal years, given that our first six-month short-term cash incentive period performance exceeded our annual business plan expectations, and to provide for improving performance targets while ensuring that such targets were meaningful for our named executive officers and stockholders, the compensation committee increasedthe performance targets in the second six-month period to be in excess of amounts that would have otherwise been established if we had utilized the targets in our annual business plan.
In addition, over the past two fiscal years, in an effort to balance amounts paid to employees along with stockholder return, we instituted short-term cash incentive program caps to limit the upside and/or maximum payouts to our named executive officers. In fiscal years 2019 and prior, our executive officers were entitled to receive up to 200% of their six-month target cash incentive opportunity, whereas during the first six-month periods in fiscal years 2020 and 2021, the maximum program payout was limited to 100% of the target, and, for the second six-month periods, the maximum payout was limited to 150% and 175%, respectively of the relevant target, as compared to an opportunity of 200% in prior periods.
For fiscal year 2021, we selected adjusted operating income as the performance metric for these short-term cash incentive programs because we believe it is a driver of stockholder value. The calculation of adjusted operating income excludes the impact of accrued costs for the payment of incentives under the short-term cash incentive program itself, as well as the effect, where applicable, of amortization expense, share-based compensation expense, impairment and restructuring charges and acquisition- and integration-related costs.
Our compensation committee determined the adjusted operating income goals for each performance period generally based on our historic adjusted operating income, our annual business plan and sequential revenue and operating profit projections. These goals were intended to be challenging, yet attainable, and align the interests of our named executive officers with those of our stockholders by providing for a payout only in the event of exceptional performance that the compensation believed could result in a meaningful increase in stockholder value. We typically establish three separate adjusted operating income objectives in connection with each six-month period including a threshold amount, which if not achieved, results in no bonus being earned, a target amount, which would align with the target established for each named executive officer, and a maximum amount, which could provide potential upside above the established targets.
The table below summarizes the adjusted operating income amounts established for threshold, target, maximum and actual performance, as well as the associated percentages of the target earned, for each of the six-month periods over the past three fiscal years. Adjusted operating income in the table below excludes bonus expense.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Threshold | | Target | | Maximum | | Actual Performance |
| (in millions) | | Performance Goal Adjusted Operating Income | % Payout | | Performance Goal Adjusted Operating Income | % Payout | | Performance Goal Adjusted Operating Income | % Payout | | Performance Goal Adjusted Operating Income | % Payout |
| FY2021 - Second Half* | | $79.6 | —% | | $92.2 | 100% | | $100.7 | 175% | | $100.8 | 175% |
| FY2021 - First Half* | | $76.2 | —% | | $79.0 | 100% | | $79.0 | 100% | | $85.1 | 100% |
| FY2020 - Second Half* | | $51.5 | —% | | $57.3 | 100% | | $67.3 | 150% | | $71.4 | 150% |
| FY2020 - First Half* | | $30.9 | —% | | $30.9 | 50% | | $37.0 | 100% | | $37.8 | 100% |
| FY2019 - Second Half | | $44.0 | —% | | $52.4 | 100% | | $62.9 | 200% | | $(6.8) | —% |
| FY2019 - First Half | | $44.0 | —% | | $52.7 | 100% | | $63.6 | 200% | | $17.7 | —% |
* The maximum performance opportunity was reduced to below the 200% permissible under the plan for each of the performance periods for fiscal years 2020 and 2021.
First Half Fiscal Year 2021 Program (one-half of the named executive officer’s Annual Target Cash Incentive opportunity). The performance goals above were established such that the achievement of the threshold performance goal would not result in a payout for the named executive officer, the achievement of the target performance goal and the achievement of the maximum performance goal would result in a payout of one half of 100% of the named executive officer’s target cash incentive opportunity.
Under the first half
fiscal year 2021 program,
if performance exceeded the threshold level, a total pool for all participating employees within the Company would be funded at
$6.7approximately $5.5 million for target
performance and
at $13.4 million for maximum performance.
For performance falling between the thresholdEach of Messrs. Daly, Kober, Dennehy and
target levels, the total pool would be funded at a rate of $0.736 per $1.00 of adjusted operating income achieved in excess of the threshold level,Hwang and
for performance falling between the target and maximum levels, a total pool would be funded at a rate of $0.496 per $1.00 of adjusted operating income achieved in excess of the target level, up to the maximum level. Each named executive officerMs. Roth would be eligible for a payment based on an allocated portion of this pool based on the executive’s target incentive amount, with discretionary adjustments based on individual performance. There was no set weighting assigned by the compensation committee with respect to the individual performance component of the cash incentive program.
In light of our performance for the first half of fiscal year
20182021 (see the “Actual Performance” column in the table above),
noeach named executive officer received a cash incentive payment for the first half of fiscal year
2018.2021 equal to 100% of their target level, which was the approved payout at the maximum performance level.
Second Half 2018 Program. Payments underFiscal Year 2021 Program (one-half of the named executive officer’s Annual Target Cash Incentive opportunity). The performance goals above were established such that the achievement of the threshold performance goal would not result in a payout to the named executive officer, the achievement of the target performance goal would result in a payout of one half of 100% of the named executive officer’s annual target cash incentive program foropportunity and the secondachievement of the maximum would result in a payout of one half of fiscal year 2018 were based on our performance in that period as compared against175% of the following adjusted operating income goals for the six months ended September 28, 2018: | | | | | | | | |
Second Half Fiscal Year 2018
Performance Goal
| | Threshold
| | Target
| | Maximum
| | Actual
Performance
|
Adjusted Operating Income
| | $67.8 million | | $71.2 million | | $81.9 million | | $35.1 million |
named executive officer’s annual target cash incentive opportunity. Under the second half
fiscal year 2021 program,
if performance exceeded the threshold level, a total pool for all participating employees within the Company would be funded at
$6.9$5.8 million for
meeting target performance and
$13.8$10.1 million for
meeting or exceeding maximum performance.
For performance falling between the thresholdEach of Messrs. Daly, Kober, Dennehy and
target levels, the total pool would be funded at a rate of $2.029 per $1.00 of adjusted operating income achieved in excess of the threshold level,Hwang and
for performance falling between the target and maximum levels, the total pool would be funded at a rate of $0.645 per $1.00 of adjusted operating income achieved in excess of the target level, up to the maximum level. Each named executive officerMs. Roth would be eligible for a payment based on an allocated portion of this pool based on the executive’s target incentive amount, with discretionary adjustments based on individual performance. There was no set weighting assigned by the compensation committee with respect to the individual performance component of the cash incentive program.
In light of our performance for the second half of fiscal year
20182021 (see the “Actual Performance” column in the table above),
noeach named executive officer received a cash incentive payment for the second half of fiscal year
2018.2021 equal to 175% of their target level, which was the approved payout at the maximum performance level.
Aggregate Fiscal Year 2021 Program (total named executive officer’s Annual Target Cash Incentive opportunity). The total cash incentive opportunity earned for each of our executive officers during fiscal year 2021 was 137.5% of each executive’s respective target annual cash incentive opportunity.
Long-Term Equity Incentives
Our fiscal year 2021 long-term equity incentive program is comprised of two components: time-based equity incentives, which are provided in the form of restricted stock units, and stock options, and performance-based equity incentives, which are provided in the form of performance-based restricted stock units and performance-based stock options.units. In fiscal year 2018,2021, our compensation committee granted our Chief Executive Officer performance-based restricted stock unitsto each of Messrs. Daly, Kober, Dennehy and time-Hwang and performance-based stock options and granted our other named executive officersMs. Roth both time- and performance-based restricted stock units. Forty percent of the total
value of the award was allocated to time-based restricted stock units and sixty percent was allocated to performance-based restricted stock options. units.
The size of each award was determined by the compensation committee based on its consideration of named executive officer individual performance, the industry total compensation and proxy statement data described above. Prior to
Performance-Based Equity Incentives.
In fiscal year
2018, our Chief Executive Officer received a mixture of time-based2021, we granted Mr. Daly 28,352 restricted stock units,
performance-basedMr. Kober 11,871 restricted stock units, Mr. Dennehy 7,863 restricted stock units, Mr. Hwang 7,863 restricted stock units and
performance-based options. Our compensation committee determined that, consistent with our “pay for performance” philosophy, it was advisable to subject all stock option awards granted to our named executive officers other than our Chief Executive Officer, and a portion of the restricted stock unit awards granted to our named executive officers, in fiscal year 2018 to vesting based on the achievement of performance metrics the committee believed would increase stockholder value. For fiscal year 2018, our compensation committee chose to grant our Chief Executive Officer only performance-based restricted stock units, in addition to time- and performance-based stock options because it believed that providing 100% of his long-term equity incentives for fiscal year 2018 in the form of performance- and appreciation-based awards, which will have value only if our stock price appreciates, in the case of the stock options, or we achieve key performance goals, in the case of the performance-based restricted stock units, would further align his interests with the interests of our stockholders.Time-Based Equity Incentives.
In fiscal year 2018, we provided each of our named executive officers, other than our Chief Executive Officer, with long-term equity incentives through the grant of restricted stock units subject to time-based vesting under our 2012 Omnibus Incentive Plan. Our compensation committee granted restricted stock units because they believe they provide a valuable retention incentive to our executives. In addition, our compensation committee believes that because restricted stock units require fewer shares to deliver the same amount of retention incentive to a given executive than a stock option award, restricted stock units also reduce the overall potential dilution to our stockholders from our equity compensation programs.
In fiscal year 2018, as part of our annual equity compensation program, we granted our Chief Financial Officer 5,919 restricted stock units, our Senior Vice President, Operations, 3,894 restricted stock units, our Senior Vice President and General Manager, Lightwave, 4,097 restricted stock units and our Senior Vice President and General Manager, Networks 3,944 restricted stock units, in each case, subject to time-based vesting based on their continued employment with us over four years. Our compensation committee approved these restricted stock unit awards based on its business judgment that they reflected an appropriate level of long-term incentive necessary to retain these executives.
In addition, during fiscal year 2018 we granted our Chief Executive Officer an additional 80,000 time-based stock options that vest based on his continued employment over four years and our Senior Vice President and General Manager, Lightwave, an additional 40,435 retention restricted stock units and our Senior Vice President and General Manager, Networks, an additional 35,000 restricted stock units that vest based on each of their continued employment over five years as a further long-term retention incentive to each of them. Our compensation committee approved these additional awards based on its business judgment that a further retention incentive for each executive was necessary to retain such executive because of the importance of each such executive to our business and approved the additional restricted stock unit awards to our Senior Vice President and General Manager, Lightwave, and our Senior Vice President and General Manager, Networks, because of the recent shift in our business mix toward the optical and photonic markets and our growth aspirations in those markets, and their significant knowledge, responsibilities and capabilities in these areas.
Performance-Based Equity Incentives.
Performance Restricted Stock Units. In addition to the time-based restricted stock unit awards described above, in fiscal year 2018, as part of our annual equity compensation program, we granted our Chief Executive Officer 35,000 restricted stock units, our Chief Financial Officer 8,878 restricted stock units, our Senior Vice President, Operations, 5,840 restricted stock units, our Senior Vice President and General Manager, Lightwave, 4,096 restricted stock units and our Senior Vice President and General Manager, Networks, 5,914Ms. Roth 7,863 restricted stock units, in each case, subject to performance-based vesting conditions. conditions described below.
As was the case in prior years,
the performance-based restricted stock units are eligible to be earned and vest based on our
non-GAAP adjusted earnings per share Adjusted EPS (“Adjusted
EPS”EPS PSUs”) growth during the applicable performance period. Adjusted EPS is a
non-GAAP financial
metric and themetric. Our calculation of Adjusted EPS
is calculated by dividing Adjusted net income, which excludes
discontinued operations, intangible amortization expense, share-based compensation costs,
impairmentrestructuring charges and
restructuring charges,benefits, changes in common stock warrant liability,
financing and litigation costs,non-cash interest, acquisition and integration related costs, equity investment gains and losses,
divested business losses, production and product line exit costs and other costs, and includes certain deferred revenue amountsloss on debt extinguishment, as well as certain tax
items.items, by Adjusted diluted shares. Adjusted EPS growth was selected as the applicable performance metric for performance-based restricted stock units granted in fiscal year
20182021 and prior fiscal years because our compensation committee believes that growth in Adjusted EPS is a key driver of increases in stockholder value.
An explanation of how we calculate Adjusted EPS is contained in Exhibit 99.1 to our Current Report on Form 8-K filed with the SEC on November 4, 2021.
The
performance-based restricted stock unitsAdjusted EPS PSUs granted
to our named executive officers in fiscal year
20182021 are divided into three equal tranches, with one tranche eligible to be earned and to vest based on our Adjusted EPS growth during fiscal year
2018,2021, one tranche eligible to be earned and to vest based on Adjusted EPS growth during fiscal years
2018-20192021-2022 and one tranche eligible to be earned and to vest based on Adjusted EPS growth during fiscal years
2018-2020,2021-2023, with Adjusted EPS growth goals for performance periods spanning multiple fiscal years based on compound annual growth. For each tranche, recipients can earn between 0% to 300% of the target number of
performance-based restricted stock units,Adjusted EPS PSUs, depending on actual performance, with 50% of the target number of
performance-based restricted stock unitsAdjusted EPS PSUs earned if threshold performance is achieved (Adjusted EPS growth of 5%), 100% of the target number of
performance-based restricted stock unitsAdjusted EPS PSUs earned if
thresholdtarget performance is achieved (Adjusted EPS growth of 10%),
200% of the target number of Adjusted EPS PSUs earned if upside performance is achieved (Adjusted EPS growth of 20%) and 300% of the target number of
performance-based restricted stock unitsAdjusted EPS PSUs earned if maximum performance is achieved (Adjusted EPS growth of 30%)
, and,
in each case, with straight-line interpolation between performance levels. To the extent earned,
the performance-based restricted stock unitsAdjusted EPS PSUs for each tranche will
vest and be settled
infollowing the
following May,announcement to the financial markets of our financial performance associated with the applicable performance period, generally subject to continued employment with us through the settlement date.
If Adjusted EPS PSUs for a tranche are not earned, they will be forfeited and are not eligible to be achieved in subsequent performance periods (i.e., there is no catch-up or retesting feature).
Each of our named executive officers also held
performance-based restricted stock unitsAdjusted EPS PSUs that were granted in prior fiscal years and that were eligible to vest based on Adjusted EPS growth during a performance period that included fiscal year
2018.2021.
The table below sets forth (1) Adjusted EPS growth goals for performance-based restricted stock unitsAdjusted EPS PSUs granted in fiscal year 2018 and2021, (2) Adjusted EPS growth goals for Adjusted EPS PSUs granted in previous years with a performance period that included fiscal year 2018,2021, (3) our actual Adjusted EPS
growth for the applicable performance period and (4) the percentage of performance-based restricted stock unitsAdjusted EPS PSUs that were earned based on such performance:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fiscal Year of Grant | | Performance Period (Fiscal Year(s)) | | Threshold
(50% of Target Tranche of Adjusted EPS PSUs Earned) | | Target (100% of Target Tranche of Adjusted EPS PSUs Earned) | | Upside (200% of
Target Tranche of Adjusted EPS PSUs Earned) | | Maximum
(300% of Target Tranche of Adjusted EPS PSUs Earned) | | Actual Performance | | % of Target Tranche of Adjusted EPS PSUs Earned |
| 2021 | | 2021 | | 5% | | 10% | | 20% | | 30% | | 119% | | 300% |
| 2020 | | 2020-2021 | | 5% | | 10% | | 20% | | 30% | | 119% | | 300% |
| 2019 | | 2019-2021 | | 5% | | 10% | | 20% | | 30% | | 61% | | 300% |
Our Adjusted EPS performance are set forthhas shown significant improvement during fiscal years 2020 and 2021 as compared to earlier periods which has resulted in the table below: | | | | | | | | | | | | |
| Fiscal Year of Grant | | Performance
Period (Fiscal
Year(s)) | | Threshold (50% of
Target Tranche of
Performance-
Based RSUs
Earned) | | Target
(100% of Target
Tranche of
Performance-
Based RSUs
Earned) | | Maximum
(300% of
Target Tranche
of Performance-
Based RSUs
Earned) | | Actual
Performance | | % of Target
Tranche of
Performance-
Based RSUs
Earned |
2018 | | 2018 | | 5% | | 10% | | 30% | | (77.6)% | | —% |
2017 | | 2017-2018 | | 5% | | 10% | | 30% | | (47.8)% | | —% |
2016 | | 2016-2018 | | 5% | | 10% | | 30% | | (29.5)% | | —% |
Performance Stock Optionsmaximum payouts being achieved.
Time-Based Equity Incentives.
In addition to the time- and performance-based restricted stock units described above, in fiscal year 2018,2021, as part of our annual equity compensation program, we also provided each of our named executive officers with long-term equity incentives through the grant of restricted stock units subject to time-based vesting (“RSUs”). Our compensation committee granted RSUs because they believe they provide a valuable retention incentive to our Chief Executive Officer 110,000executives. In addition, our compensation committee believes that because RSUs require fewer shares to deliver the same amount of retention incentive to a given executive than a stock options,option award, RSUs also reduce the overall potential dilution to our Chief Financial Officer 40,000 stock options,stockholders from our Senior Vice President, Operations, 30,000 stock options, Senior Vice Presidentequity compensation programs.
In fiscal year 2021, we granted Mr. Daly 18,902 RSUs, Mr. Kober 7,914 RSUs, Mr. Dennehy 5,242 RSUs, Mr. Hwang 5,242 RSUs and General Manager, Lightwave, 30,000 stock options, and our Senior Vice President and General Manager, Networks, 30,000 stock options,Ms. Roth 5,242 RSUs, in each case, subject to performance-basedtime-based vesting conditions. These stock options vest as to 100% of the underlying shares if the closing price for our common stock equals or exceeds $66.96 per share for a period of thirty consecutive trading days (which represented an approximate premium of 50%based on their continued employment with us over the52-week high price per share of our common stock as of the date the stock options were granted), generally subject to the executive remaining employed by us through the date such performance metric is met.four years. Our compensation committee approved these performance-based stock optionsRSU awards based on its review of peer group and other market data business judgment that they reflected an appropriate level of long-term incentive necessary to retain these executives and further align their compensation withexecutives.
Fiscal Year 2022 Relative Total Shareholder Return Measure.
In fiscal year 2022, the
attainment of increases in stockholder value. The size of each award was determined by our compensation committee
based on consideration ofmade the
factors described above.In November 2018, our compensation committee evaluated the outstanding performance-based stock options held by each of our named executive officers in connection with its approval of fiscal year 2019 annual equity awards and determined that certain performance-based stock options did not provide adequate retention incentivesdetermination to our named executive officers because the exercise prices of such options were far in excess of the value of our common stock at that time. Asadd a result, in November 2018, as permitted under our 2012 Omnibus Incentive Plan, our compensation committee approved the cancellation of certain vested and unvested performance-based stock options held by our named executive officersrelative total shareholder return (“rTSR”) metric with a per share exercise price of $29.80 or above in exchange for an award of performance-based restrictedlong-term stock units. Theperformance cycle to performance-based restricted stock units will be eligiblegranted to vest based on the achievement of performance-based vesting conditions relatedour executive officers. The rTSR metric was added to Adjusted EPS growth during the 2019, 2020our overall executive compensation program in response to stockholder feedback and 2021 fiscal years, generally subject to the named executive officer’s continued employment with us through the date such vesting conditions are achieved. Our compensation committee believes that these performance-based restricted stock units will betterfurther align the interests of our named executive officers with those of our stockholders, will incentivize them to achievestockholders.
For fiscal year 2022, the long-term equity incentive awards are comprised of three components: Adjusted EPS PSUs, rTSR performance based restricted stock units (“rTSR PSUs”) and RSUs. The performance goals
that we believeand vesting of the Adjusted EPS PSUs and RSUs are
importantsimilar in approach to our
businessprior awards in fiscal year 2021. The fiscal year 2022 rTSR PSUs are performance-based restricted stock units which can be earned at varying amounts based on our performance relative to component companies of the PHLX Semiconductor Index over a three-year period beginning October 2, 2021, and
ending September 27, 2024. The rTSR PSUs will
result in a more
effectively encourage retention.significant portion of each executive’s fiscal year 2022 compensation being tied to our long-term stock performance. The compensation committee believes that balancing the objective financial measures of the Adjusted EPS PSUs with a rTSR component will further incentivize named executive officers to focus on outperforming our peers over a longer period in a highly competitive marketplace and further align their interests with those of our stockholders.
The amount of rTSR PSUs earned at the end of the performance period will be determined as follows: rTSR rank equal to or less than the 25th percentile results in no payout; rTSR rank greater than the 25th percentile and less than or equal to the 50th percentile results in payout of between 50% and 100% of the target shares, rTSR rank greater than the 50th percentile and less than the 75th percentile results in payout of between 100% and 200% of the target shares and rTSR rank performance greater than the 75th percentile results in payout of 200% of the target number of shares.
Benefits
We generally provide our named executive officers health and welfare benefits, including health benefits and life insurance coverage, as well as the opportunity to participate in and receive matching contributions under our 401(k) plan, in each case, on the same terms as our other salaried employees. We also reimburse up to $2,500 per year in personal tax and financial planning expenses for our executive officers.
We believe it is in our best interests and the best interests of our stockholders to encourage and reinforce the continued dedication and attention of our senior executives,President and Chief Executive Officer, and to minimize the potential for themhim to be distracted from performing theirhis duties by the potential prospect of a termination of employment. Therefore, we have agreed to provide our President and Chief Executive Officer and our Senior Vice President and General Manager, Networks, with severance benefits as describedset forth in each executive’shis employment agreement, as described below. below under “Potential Payments upon Termination or Change in Control”.
In October 2014, following a period of heavy consolidation in our industry and with a similar motivation of keeping our executives focused on managing our business without distraction by a potential change in control, we also adopted the MACOM Technology Solutions Holdings, Inc. Change in Control Plan (as amended, the “CIC Plan”), which was subsequently amended in 2017 and in which each2022. Each of our named executive officers
participates and whichin the CIC Plan. The CIC Plan provides severance protection to plan participants in the event their employment is terminated under certain circumstances in connection with a change in control. In adopting and subsequently amending the CIC Plan, our compensation committee was motivated by a belief that the benefits of the plan were reasonable in scope and amount, would better align the interests of our executives with those of our stockholders in the context of a potential change in control and may enhance stockholder value whether or not a future change in control occurs by helping to retain those executives who are participants in this plan. See “Potential Payments upon Termination or Change in Control” below for a more detailed discussion of these potential payments.
payments to our named executive officers.
Non-Competition
AgreementsWith
In fiscal year 2022, in response to stockholder feedback, the goalcompensation committee approved an amendment to the CIC Plan to eliminate excise tax gross-ups relating to Section 280G of securing the servicesCode for plan participants who commence participation in the plan on or after January 1, 2022.
Restrictive Covenants
From time to time we enter into restrictive covenant agreements with certain of
our key executives
in order to secure the employment of those persons who may be key to our success for a period of time,
and preventingto prevent competitors from hiring such personnel away from us,
from timeand to
time we may enter into agreements where an executive agreesprotect our confidential information, intellectual property and relationships with employees, independent contractors, vendors and customers. Mr. Daly’s employment agreement contains non-solicitation provisions pursuant to which he has agreed not to
go to work for a competing enterprisesolicit our employees, consultants, customers, partners or vendors during his employment and for a period of
time in exchange for a payment or payments from us. Mr. Croteau’s employment agreement provides for him to have certainnon-solicitation andnon-competition obligations to us in exchange for salary continuance payments for twelve12 months following termination of his employment.
All of our named executive officers are party to a Confidentiality and Invention Assignment Agreement, under which they have agreed not to solicit our employees, consultants, customers, partners or vendors during their employment and for 12 months following termination of employment and have agreed to a perpetual confidentiality covenant and an assignment of intellectual property covenant.
Compensation Risk Assessment
Our compensation committee regularly reviews our compensation and benefits programs, policies and practices, including its executive compensation program and its incentive-based compensation programs for its executive officers, to determine whether such programs, policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. Our compensation and governance-related policies are enhanced by our clawback policy, described below, as well as a policy prohibiting hedging and pledging of our securities by our directors and officers, including our executive officers. Based on its assessment, our compensation committee does not believe that our compensation programs, policies and practices, in conjunction with our existing processes and controls, create risks that are reasonably likely to have a material adverse effect on our business and operations.
In November 2018, we adopted a clawback policy that covers our current and former employees at the level of Vice President and above, including all of our named executive officers. Under the policy, if there is a restatement of our financial results due to material
non-compliance with financial reporting requirements, certain cash- and equity-based incentive compensation paid or awarded to covered employees will be subject to cancellation and/or repayment, in our compensation committee’s discretion, if it was based on the erroneous financial results, was in excess of the amount that would have otherwise been paid or awarded and the employee’s conduct was a material factor in the obligation to restate the results.
Tax and Accounting Considerations
Section 162(m) of the Code, (“Section 162(m)”) generally disallows a tax deduction to a public corporation for annual compensation in excess of $1 million paid to certain of its current and former executive officers. For taxable years beginning before January 1, 2018, compensation that qualified as “performance-based” was excluded for purposes of calculating the amount of compensation subject to the $1 million limit. The 2017 U.S. tax reform legislation repealed the performance-based compensation exception to Section 162(m) and made certain other changes to Section 162(m), generally effective for taxable years beginning after December 31, 2017. As a result, beginning in fiscal year 2019,Therefore, compensation paid to certain of our current and former executive officers in excess of $1 million
in a taxable year
generally will not be
deductible unless such compensation qualifies for transition relief applicable to legally-binding contracts that were in effect on November 2, 2017.deductible. The compensation committee believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executives
who are necessary for our success. Accordingly, and in furtherance of that responsibility, the compensation committee has authorized and will, in its judgment, continue to authorize compensation that may otherwise be limited as to tax deductibility.
The compensation committee also considers the accounting implications of significant compensation decisions, including decisions that relate to our equity incentive plans and programs. If accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.
Stock Ownership Guidelines
Effective December 21, 2021, the compensation committee of the board of directors established executive officer stock ownership guidelines to further align the interests of our executive officers with the interests of our stockholders and to promote sound corporate governance. The guidelines for executive officers are determined as a multiple of the officer’s annual base salary. Our Chief Executive Officer is required to hold shares of our common stock with a value equal to at least four times their annual base salary. Our Chief Financial Officer is required to hold shares of our common stock with a value equal to at least two times their annual base salary. Each other executive officers is required to hold shares of our common stock with a value equal to at least one times their annual base salary. Executive officers are required to achieve the applicable level of ownership within 48 months of the later of December 21, 2021 or the date the person was initially designated an executive officer. Unvested equity awards (other than unvested time-based restricted stock units), vested stock options, vested stock appreciation rights and unearned performance-based equity awards do not count towards satisfaction of the stock ownership guidelines.
Say-on-Pay
At our 20132021 annual meeting of stockholders, our stockholders approved on an advisory basis to hold future advisory votes on the compensation of our named executive officers every three years.annually. At our 20162021 annual meeting of stockholders, our stockholders approved, on an advisory basis, the compensation of our named executive officers by 97.72%62.51% of the shares voted. In lightAs a result, our management team and board of these results, our current policy isdirectors decided to provide stockholdersinitiate extensive engagement with an opportunity to vote on the compensation of our named executive officers every three years. Assuming that, in connection with ourstockholders. See “say-on-frequencyFiscal Year 2021 Stockholder Outreach Initiative vote in Proposal 3, our stockholders vote” above for a once every three years frequencysummary of future votes on executive compensation, our next such vote would not occur until our 2022 annual meeting of stockholders.those engagements and the resulting decisions.
COMPENSATION COMMITTEE REPORT
| | |
| COMPENSATION COMMITTEE REPORT |
The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K with management, and, based on such review and discussions, the compensation committee recommended to our board of directors that the Compensation Discussion and Analysis be included in this Proxy Statement.
Members of the compensation committee:
Peter Chung (Chairman)
Stephen Daly
Geoffrey Ribar
John Ritchie
Gil Van LunsenVanLunsen
2021 Summary Compensation Table
The following table provides information regarding the compensation earned by or paid to our named executive officers for fiscal years
2018, 20172021, 2020 and
2016. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary
($) | | | Bonus ($) | | | Stock
Awards
($)(1) | | | Option
Awards
($)(1) | | | Non-Equity
Incentive Plan
Compensation
($)(2) | | | All Other
Compensation
($)(3) | | | Total ($) | |
John Croteau | | | 2018 | | | | 672,583 | | | | — | | | | 1,281,350 | | | | 3,115,880 | | | | — | | | | 9,543 | | | | 5,079,356 | |
President and Chief | | | 2017 | | | | 636,539 | | | | — | | | | 2,047,276 | | | | 1,308,000 | | | | 218,751 | | | | 9,437 | | | | 4,220,002 | |
Executive Officer | | | 2016 | | | | 611,539 | | | | — | | | | 2,604,337 | | | | 1,165,000 | | | | 1,024,000 | | | | 9,341 | | | | 5,414,217 | |
| | | | | | | | |
Robert McMullan | | | 2018 | | | | 402,987 | | | | — | | | | 540,978 | | | | 620,000 | | | | — | | | | 65,781 | | | | 1,629,746 | |
Senior Vice President and | | | 2017 | | | | 343,940 | | | | — | | | | 707,434 | | | | 392,400 | | | | 59,281 | | | | 92,988 | | | | 1,596,042 | |
Chief Financial Officer | | | 2016 | | | | 333,433 | | | | — | | | | 910,067 | | | | 233,000 | | | | 278,725 | | | | 64,192 | | | | 1,819,417 | |
| | | | | | | | |
Robert Dennehy | | | 2018 | | | | 362,261 | | | | — | | | | 355,875 | | | | 465,000 | | | | — | | | | 4,848 | | | | 1,187,984 | |
Senior Vice President, | | | 2017 | | | | 344,606 | | | | — | | | | 626,290 | | | | 327,000 | | | | 59,483 | | | | 6,980 | | | | 1,364,360 | |
Operations | | | 2016 | | | | 334,569 | | | | — | | | | 805,678 | | | | 291,250 | | | | 279,675 | | | | 5,340 | | | | 1,716,512 | |
| | | | | | | | |
Vivek Rajgarhia | | | 2018 | | | | 351,813 | | | | — | | | | 1,701,695 | | | | 465,000 | | | | — | | | | 8,857 | | | | 2,527,365 | |
Senior Vice President and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General Manager, Lightwave | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Preetinder Virk | | | 2018 | | | | 366,849 | | | | — | | | | 1,640,008 | | | | 465,000 | | | | — | | | | 8,888 | | | | 2,480,745 | |
Senior Vice President and | | | 2017 | | | | 348,971 | | | | — | | | | 634,219 | | | | 261,600 | | | | 60,236 | | | | 8,772 | | | | 1,313,799 | |
General Manager, Networks | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | The amounts included under the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value of the restricted stock unit and stock option awards granted in each respective fiscal year, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For more information on the underlying valuation assumptions used to calculate grant date fair values, see Notes 2 and 18 to Notes to Consolidated Financial Statements in our Annual Report on Form10-K for the fiscal year ended September 28, 2018. With respect to the performance-based restricted stock unit and stock option awards granted to our named executive officers during fiscal year 2018, the aggregate grant date fair value of such awards was determined based on the probable outcome of the performance conditions associated with such awards, which was determined to be 100% of target levels. The aggregate grant date fair value of such awards would be $5,555,650, $1,593,739, $1,105,531, $914,249 and $1,113,648 for Messrs. Croteau, McMullan, Dennehy, Rajgarhia and Virk, respectively, if maximum performance levels were achieved.
|
| (2) | Represents the cash incentives earned by each named executive officer under our cash incentive programs for each fiscal year. See “Compensation Discussion and Analysis – Short-Term Cash Incentives” for a more detailed description of these programs for fiscal year 2018.
|
| (3) | Consists of the following amounts for each named executive officer for fiscal year 2018:
|
| | | | | | | | | | | | | | | | | | | | |
Name | | Basic Life
Insurance
Premiums
($) | | | Company
Contributions
to 401(k)
Plans
($) | | | Commuting
Payments
($) | | | Tax
Gross-Up
Payments
($) | | | Total ($) | |
John Croteau | | | 1,443 | | | | 8,100 | | | | — | | | | — | | | | 9,543 | |
| | | | | |
Robert McMullan | | | 779 | | | | 8,100 | | | | 30,629(A) | | | | 26,272(B) | | | | 65,781 | |
| | | | | |
Robert Dennehy | | | 779 | | | | 4,068 | | | | — | | | | — | | | | 4,848 | |
| | | | | |
Vivek Rajgarhia | | | 757 | | | | 8,100 | | | | — | | | | — | | | | 8,857 | |
| | | | | |
Preetinder Virk | | | 788 | | | | 8,100 | | | | — | | | | — | | | | 8,888 | |
| (A) | Represents amounts paid to Mr. McMullan in reimbursement of his commuting expenses and the actual cost incurred by us to provide lodging to Mr. McMullan near our corporate headquarters.
|
| (B) | Represents amounts paid to Mr. McMullan in connection with tax reimbursement for the amounts noted in the Commuting Payments column.
|
2019.2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | | Year | | Salary
($) | | | | Stock
Awards ($)(1) | | Option
Awards
($)(1) | | Non-Equity
Incentive Plan
Compensation
($)(2) | | All Other
Compensation ($)(3) | | Total
($) | |
| Stephen Daly (4) | | 2021 | | 675,000 | | | | 1,559,382 | | — | | 928,125 | | 12,551 | | 3,175,058 | |
| President and Chief | | 2020 | | 675,000 | | | | 1,884,914 | | — | | 843,750 | | 9,901 | | 3,413,565 | |
| Executive Officer | | 2019 | | 275,512 | (4) | | | 6,295,274 | (4) | 1,539,000 | | — | | 463 | | 8,110,249 | |
| John Kober | | 2021 | | 425,020 | | | | 652,905 | | — | | 438,289 | | 11,996 | | 1,528,210 | |
| Senior Vice President and | | 2020 | | 395,000 | | | | 1,027,425 | | — | | 370,313 | | 9,279 | | 1,802,017 | |
| Chief Financial Officer | | 2019 | | 326,719 | | | | 1,260,516 | | — | | — | | 8,934 | | 1,596,169 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Robert Dennehy | | 2021 | | 390,003 | | | | 432,465 | | — | | 268,126 | | 11,918 | | 1,102,512 | |
| Senior Vice President, | | 2020 | | 380,000 | | | | 865,395 | | — | | 237,500 | | 7,640 | | 1,490,535 | |
| Operations | | 2019 | | 367,762 | | | | 1,652,110 | | 215,100 | | — | | 4,379 | | 2,239,351 | |
| Donghyun Thomas Hwang | | 2021 | | 390,003 | | | | 432,465 | | — | | 268,126 | | 11,918 | | 1,102,512 | |
| Senior Vice President, | | 2020 | | 355,000 | | | | 836,908 | | — | | 221,875 | | 9,190 | | 1,422,973 | |
| Global Sales | | 2019 | | 344,359 | | | | 1,064,408 | | 107,550 | | — | | 9,000 | | 1,525,317 | |
| Ambra Roth | | 2021 | | 390,003 | | | | 432,465 | | — | | 268,126 | | 11,918 | | 1,102,512 | |
| Senior Vice President, | | | | | | | | | | | | | | | | | |
| General Counsel, Human Resources and Secretary | | | | | | | | | | | | | | | | | |
(1)The amounts included under the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value of the restricted stock unit and stock option awards granted in each respective fiscal year, computed in accordance with FASB ASC Topic 718. For more information on the underlying valuation assumptions used to calculate grant date fair values, see Notes 2 and 20 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended October 1, 2021. With respect to the performance-based restricted stock unit awards granted to our named executive officers during fiscal year 2021, the aggregate grant date fair value of such awards was determined based on the probable outcome of the performance conditions associated with such awards, which was determined to be 100% of target levels. The aggregate grant date fair value of such awards would be $2,806,848, $1,175,229, $778,437 and $778,437 for each of Messrs. Daly, Kober, Dennehy and Hwang, respectively, and $778,437 for Ms. Roth if maximum performance levels were achieved for all three tranches.
(2)Represents the cash incentives earned by each named executive officer under our cash incentive programs for each fiscal year. See “Compensation Discussion and Analysis – Short-Term Cash Incentives” for a more detailed description of these programs for fiscal year 2021.
(3)Consists of the following amounts for each named executive officer for fiscal year 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Basic Life
Insurance Premiums
($) | | Company
Contributions to
Retirement Plans
($) | | Personal Tax and Financial Planning Reimbursements
($) | | Total ($) |
| Stephen Daly | | 1,501 | | | 8,550 | | | 2,500 | | | 12,551 | |
| John Kober | | 946 | | | 8,550 | | | 2,500 | | | 11,996 | |
| | | | | | | | |
| Robert Dennehy | | 868 | | | 8,550 | | | 2,500 | | | 11,918 | |
| Donghyun Thomas Hwang | | 868 | | | 8,550 | | | 2,500 | | | 11,918 | |
| Ambra Roth | | 868 | | | 8,550 | | | 2,500 | | | 11,918 | |
(4)Mr. Daly was appointed as our President and Chief Executive Officer on May 16, 2019. Amounts in the Summary Compensation Table for fiscal year 2019 with respect to Mr. Daly relate to compensation for his service as our President and Chief Executive Officer and as a member of our board of directors, including director fees paid to Mr. Daly for his service as a member of our board of directors, audit committee and compensation committee through his appointment as our President and Chief Executive Officer ($38,976) and a time-based restricted stock unit award granted to Mr. Daly in his capacity as a member of our board of directors ($129,992), as well as Mr. Daly’s base salary as our President and Chief Executive Officer ($236,536) and the aggregate grant date fair value of the time- and performance-based restricted stock unit award granted to Mr. Daly in connection with the commencement of his employment as our President and Chief Executive Officer ($6,165,282). Mr. Daly retained only a pro-rata portion of restricted stock unit award granted to him in respect of his service on our board of directors (based on the number of days he served as a director from the grant date of such award through his date of hire), and the remainder of such restricted stock units were forfeited as of his hire date. Following his appointment as our President and Chief Executive Officer, Mr. Daly did not receive additional compensation for services as a member of our board of directors.
2021 Grants of Plan-Based Awards Table
The following table provides information regarding plan-based awards granted to our named executive officers for the fiscal year ended
September 28, 2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards(2) | | | | | | | | | | | | | |
Name | | Grant Date | | | Threshold
($) | | | Target
($) | | | Maximum
($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(3) | | | All other
option
awards:
number of
securities
underlying
options
(4) | | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | | Grant Date
Fair Value
of Stock and
Option
Awards
($)(5) | |
John Croteau | | | | | | | — | | | | 669,500 | | | | 1,339,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 11/14/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 10,924 | | | | 36.61 | | | | 191,754 | |
| | | 11/14/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 69,076 | | | | 36.61 | | | | 1,212,526 | |
| | | 11/14/2017 | | | | — | | | | — | | | | — | | | | — | | | | 110,000 | | | | 110,000 | | | | — | | | | — | | | | 36.61 | | | | 1,711,600 | |
| | | 11/14/2017 | | | | — | | | | — | | | | — | | | | 17,500 | | | | 35,000 | | | | 105,000 | | | | — | | | | — | | | | — | | | | 1,281,350 | |
| | | | | | | | | | | |
Robert McMullan | | | | | | | — | | | | 301,875 | | | | 603,750 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | 40,000 | | | | 40,000 | | | | — | | | | — | | | | 36.56 | | | | 620,000 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | 4,439 | | | | 8,878 | | | | 26,634 | | | | — | | | | — | | | | — | | | | 324,580 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,919 | | | | — | | | | — | | | | 216,398 | |
| | | | | | | | | | | |
Robert Dennehy | | | | | | | — | | | | 180,300 | | | | 360,600 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | 30,000 | | | | 30,000 | | | | — | | | | — | | | | 36.56 | | | | 465,000 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | 2,920 | | | | 5,840 | | | | 17,520 | | | | — | | | | — | | | | — | | | | 213,510 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,894 | | | | — | | | | — | | | | 142,365 | |
| | | | | | | | | | | |
Vivek Rajgarhia | | | | | | | — | | | | 175,100 | | | | 350,200 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | 30,000 | | | | 30,000 | | | | — | | | | — | | | | 36.56 | | | | 465,000 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | 2,048 | | | | 4,096 | | | | 12,288 | | | | — | | | | — | | | | — | | | | 149,750 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500 | | | | — | | | | — | | | | 639,800 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500 | | | | — | | | | — | | | | 639,800 | |
| | | 5/31/2018 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,435 | | | | — | | | | — | | | | 122,559 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,097 | | | | — | | | | — | | | | 149,786 | |
| | | | | | | | | | | |
Preetinder Virk | | | | | | | — | | | | 182,584 | | | | 365,167 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | 30,000 | | | | 30,000 | | | | — | | | | — | | | | 36.56 | | | | 465,000 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | 2,957 | | | | 5,914 | | | | 17,742 | | | | — | | | | — | | | | — | | | | 216,216 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,944 | | | | — | | | | — | | | | 144,192 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500 | | | | — | | | | — | | | | 639,800 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500 | | | | — | | | | — | | | | 639,800 | |
| (1) | Amounts in the “Estimated Future Payouts UnderNon-Equity Incentive Plan Awards” columns of the 2018 Grants of Plan-Based Awards Table represent the cash incentive award opportunities for each named executive officer under our cash incentive programs for fiscal year 2018. See “Compensation Discussion and Analysis – Short-Term Cash Incentives” for a more detailed description of these programs.
|
| (2) | Amounts in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns of the 2018 Grants of Plan-Based Awards Table represent performance-based restricted stock and stock option awards granted to each named executive officer under our 2012 Omnibus Incentive Plan in fiscal year 2018. In November 2018 certain of these performance-based stock option awards were canceled in exchange for performance-based restricted stock units. See “Compensation Discussion and Analysis – Long-Term Equity Incentives” for a more detailed description of these awards.
|
| (3) | Amounts represent time-based restricted stock units granted to the named executive officer under our 2012 Omnibus Incentive Plan in fiscal year 2018. See “Compensation Discussion and Analysis – Long-Term Equity Incentives” for a more detailed description of these awards.
|
| (4) | Amounts represent time-based option awards granted to the named executive officer under our 2012 Omnibus Incentive Plan in fiscal year 2018. See “Compensation Discussion and Analysis – Long-Term Equity Incentives” for a more detailed description of these awards.
|
| (5) | Reflects the aggregate grant date fair value of the stock option and restricted stock unit awards granted in fiscal year 2018, computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For more information on the underlying
|
October 1, 2021. | valuation assumptions used to calculate grant date fair values, see Notes 2 and 18 to Notes to Consolidated Financial Statements in our Annual Report on Form10-K for fiscal year ended September 28, 2018. With respect to the performance-based restricted stock unit and stock option awards granted to our named executive officers during fiscal year 2018, the aggregate grant date fair value of such awards was determined based on the probable outcome of the performance conditions associated with such awards, which was determined to be 100%. The aggregate grant date fair value of such awards would be $5,555,650, $1,593,739, $1,105,531, $914,249 and $1,113,648 for Messrs. Croteau, McMullan, Dennehy, Rajgarhia and Virk respectively, if maximum performance levels were achieved. |
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| | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) | | Estimated Future Payouts
Under Equity Incentive
Plan Awards(2) | | | | | | | | |
| Name | | Grant Date | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(3) | | | | | | Grant Date
Fair Value
of Stock
Awards
($)(4) |
| Stephen | | | | — | | | 675,000 | | | 928,125 | | | — | | | — | | | — | | | — | | | | | | | — | |
| Daly | | 10/28/2020 | | — | | | — | | | — | | | 14,176 | | | 28,352 | | | 85,056 | | | — | | | | | | | 935,616 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 18,902 | | | | | | | 623,766 | |
| | | | | | | | | | | | | | | | | | | | | | |
| John | | | | — | | | 318,750 | | | 438,289 | | | — | | | — | | | — | | | — | | | | | | | — | |
| Kober | | 10/28/2020 | | — | | | — | | | — | | | 5,936 | | | 11,871 | | | 35,613 | | | — | | | | | | | 391,743 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 7,914 | | | | | | | 261,162 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Robert | | | | — | | | 195,000 | | | 268,126 | | | — | | | — | | | — | | | — | | | | | | | — | |
| Dennehy | | 10/28/2020 | | — | | | — | | | — | | | 3,932 | | | 7,863 | | | 23,589 | | | — | | | | | | | 259,479 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 5,242 | | | | | | | 172,986 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Donghyun | | | | — | | | 195,000 | | | 268,126 | | | — | | | — | | | — | | | — | | | | | | | — | |
| Thomas | | 10/28/2020 | | — | | | — | | | — | | | 3,932 | | | 7,863 | | | 23,589 | | | — | | | | | | | 259,479 | |
| Hwang | | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 5,242 | | | | | | | 172,986 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Ambra | | | | — | | | 195,000 | | | 268,126 | | | — | | | — | | | — | | | — | | | | | | | — | |
| Roth | | 10/28/2020 | | — | | | — | | | — | | | 3,932 | | | 7,863 | | | 23,589 | | | — | | | | | | | 259,479 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | — | | | 5,242 | | | | | | | 172,986 | |
| | | | | | | | | | | | | | | | | | | | | | |
(1)Amounts in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns of the 2021 Grants of Plan-Based Awards Table represent the cash incentive award opportunities for each named executive officer under our cash incentive programs for fiscal year 2021. See “Compensation Discussion and Analysis – Short-Term Cash Incentives” for a more detailed description of these programs. Amounts in the "Non-Equity Incentive Plan Compensation" column of the 2021 Summary Compensation Table represent the cash incentive awards actually earned by each named executive officer under our cash incentive programs for fiscal year 2021.
(2)Amounts in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns of the 2021 Grants of Plan-Based Awards Table represent performance-based restricted stock unit awards granted to each named executive officer under our 2012 Omnibus Incentive Plan in fiscal year 2021.
(3)Amounts represent time-based restricted stock units granted to the named executive officer under our 2012 Omnibus Incentive Plan in fiscal year 2021. See “Compensation Discussion and Analysis – Long-Term Equity Incentives” for a more detailed description of these awards.
(4)Reflects the aggregate grant date fair value of the restricted stock unit awards granted in fiscal year 2021, computed in accordance with FASB ASC Topic 718. For more information on the underlying valuation assumptions used to calculate grant date fair values, see Notes 2 and 20 in the Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for fiscal year ended October 1, 2021. With respect to the performance-based restricted stock unit awards granted to our named executive officers, during fiscal year 2021, the aggregate grant date fair value of such awards was determined based on the probable outcome of the performance conditions associated with such awards, which was determined to be 100%. The aggregate grant date fair value of such awards would be $2,806,848, $1,175,229, $778,437, $778,437, for Messrs. Daly, Kober, Dennehy and Hwang respectively, and $778,437 for Ms. Roth if maximum performance levels were achieved.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Messrs.
Croteau, McMullan,Daly, Dennehy
Rajgarhia and
VirkHwang each have an employment agreement with the Company.
Under Mr. Croteau’sKober and Ms. Roth have promotion letters with the Company.
Stephen Daly. Mr. Daly has served as our President and Chief Executive Officer since May 2019. Pursuant to his employment agreement, effective October 1, 2012,May 16, 2019, he is entitled to receive an annual base salary, which as of the end of fiscal year 20182021 was $669,500,$675,000, and is eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities in fiscal year 2018 of up to 100% of his annual base salary and maximum short-term cash incentive opportunities in fiscal year 2018 of up to 200% of his annual base salary, in each case, subject to the achievement of applicable performance targets.Under In addition, during the term of his employment, Mr. McMullan’s employment agreement,Daly is eligible to participate in the Company’s benefit plans as in effect from time to time.
John Kober. Mr. Kober has served as our Senior Vice President and Chief Financial Officer since May 2019. Pursuant to his offer of promotion, effective January 2, 2014,May 23, 2019, he is entitled to receive an annual base salary, which as of the end of fiscal year 20182021 was $402,500,$425,000, and is eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities in fiscal year 2018 of up to 75% of his annual base salary and maximum short-term cash incentive opportunities in fiscal year 2018 of up
to 150% of his annual
base salary, in each case, subject to
the achievement of applicable performance targets.
The Company also reimbursesIn addition, during the term of his employment, Mr.
McMullan for his expenses (including taxes) incurredKober is eligible to participate in
connection with commutingthe Company’s benefit plans as in effect from time to
its headquarters from a home outside the Boston metropolitan area.time.
Robert Dennehy. Mr. Dennehy has served as our Senior Vice President, Operations since October 2013, and prior to that had served as our Vice President, Operations, since March 2011. Under Mr. Dennehy’s employment agreement, effective October 1, 2013, he is entitled to receive an annual base salary, which as of the end of fiscal year 20182021 was $360,600,$390,000, and is eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities in fiscal year 2018 of up to 50% of his annual base salary and maximum short-term cash incentive opportunities in fiscal year 2018 of up to 100% of his annual base salary, in each case, subject to the achievement applicable performance targets. In addition, during the term of his employment, Mr. Dennehy is eligible to participate in the Company’s benefit plans as in effect from time to time.
Donghyun Thomas Hwang. Mr. Hwang has served as our Senior Vice President, Global Sales, since January 2015. Under Mr. Rajgarhia’s offer letter, dated April 7, 2011,Hwang’s employment agreement, effective August 15, 2014, he is entitled to receive an annual base salary, which as of the end of fiscal year 20182021 was $350,200. Mr. Rajgarhia is also eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities in fiscal year 2018 of 50% of his annual salary and maximum short-term cash incentive opportunities in fiscal year 2018 of 100% of his annual salary, in each case, subject to the achievement of applicable performance targets.Under Mr. Virk’s employment agreement, dated December 11, 2013, he is entitled to receive an annual base salary, which as of the end of fiscal year 2018 was $365,167,$390,000, and is eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities in fiscal year 2018 of up to 50% of his annual base salary and maximum short-term cash incentive opportunities in fiscal year 2018 of up to 100% of his annual base salary, in each case, subject to the achievement of applicable performance targets.
In addition, during the term of his employment, Mr. Hwang is eligible to participate in the Company’s benefit plans as in effect from time to time. Ambra Roth. Ms. Roth has served as our Senior Vice President, General Counsel, Human Resources and Secretary since October 2019. Prior to that, Ms. Roth served as Vice President, General Counsel and Secretary since May 2018. Pursuant to her offer of promotion, effective June 1, 2018, she is entitled to receive an annual base salary, which as of the end of fiscal year 2021 was $390,000, and is eligible to participate in the Company’s short-term cash incentive programs, with target short-term cash incentive opportunities of up to 50% of her annual base salary and maximum short-term cash incentive opportunities of up to 100% of her annual base salary, in each case, subject to the achievement of applicable performance targets. In addition, during the term of her employment, Ms. Roth is eligible to participate in the Company’s benefit plans as in effect from time to time.
For a description of the severance payments and benefits to which each of our named executive officers is entitled upon certain qualifying terminations of employment, please see the “Potential Payments Upon Termination or Change of Control” section of this Proxy Statement below.
2021 Outstanding Equity Awards at Fiscal
Year-End Table
The following table sets forth the outstanding equity awards held by each of our named executive officers at SeptemberOctober 1, 2021.
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| | | | | Option Awards | | Stock Awards |
| Name | | Grant
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | |
Option
Exercise
Price ($) | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | Market
Value
of Shares or
Units of
Stock That
Have Not
Vested ($)(1) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(1) |
| Stephen | | 5/31/2019 | | 190,000(2) | | — | | | — | | | 14.15 | | | 5/31/2029 | | — | | | — | | | — | | | — | |
| Daly | | 5/31/2019 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 300,000(3) | | 19,602,000 | |
| | 5/31/2019 | | — | | | — | | | — | | | — | | | — | | | 49,998(4) | | 3,266,869 | | | 50,004(5) | | 3,267,261 | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 37,911(4) | | 2,477,105 | | | 37,914(5) | | 2,477,301 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 28,350(6) | | 1,852,389 | | | 56,706(7) | | 3,705,170 | |
| | 5/31/2019 | | — | | | — | | | — | | | — | | | — | | | 81,746(8) | | 5,341,284 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 16,850(9) | | 1,100,979 | | | — | | | — | |
| | 11/17/2019 | | — | | | — | | | — | | | — | | | — | | | 13,334(10) | | 871,244 | | | — | | | — | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 18,902(11) | | 1,235,057 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| John | | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 16,500(4) | | 1,078,110 | | | 16,500(5) | | 1,078,110 | |
| Kober | | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 11,871(6) | | 775,651 | | | 23,742(7) | | 1,551,302 | |
| | 3/15/2018 | | — | | | — | | | — | | | — | | | — | | | 1,460(12) | | 95,396 | | | — | | | — | |
| | 5/31/2018 | | — | | | — | | | — | | | — | | | — | | | 1,250(12) | | 81,675 | | | — | | | — | |
| | 3/15/2019 | | — | | | — | | | — | | | — | | | — | | | 8,394(13) | | 548,464 | | | — | | | — | |
| | 5/30/2019 | | — | | | — | | | — | | | — | | | — | | | 28,025(13) | | 1,831,154 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 7,334(9) | | 479,204 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 13,334(9) | | 871,244 | | | — | | | — | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 7,914(11) | | 517,101 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Robert | | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 20,493(14) | | 1,339,013 | | | — | | | — | |
| Dennehy | | 11/19/2018 | | — | | | — | | | — | | | — | | | — | | | 70,002(14) | | 4,573,931 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 12,003(4) | | 784,276 | | | 12,009(5) | | 784,668 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 7,863(6) | | 513,768 | | | 15,726(7) | | 1,027,537 | |
| | 11/9/2017 | | — | | | — | | | — | | | — | | | — | | | 975(15) | | 63,707 | | | — | | | — | |
| | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 4,773(16) | | 311,868 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 5,336(9) | | 348,654 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 13,334(9) | | 871,244 | | | — | | | — | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 5,242(11) | | 342,512 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Donghyun | | 11/6/2018 | | 15,000(17) | | — | | | — | | | 16.06 | | | 11/6/2025 | | — | | | — | | | — | | | — | |
| Thomas | | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 19,194(14) | | 1,254,136 | | | — | | | — | |
| Hwang | | 11/19/2018 | | — | | | — | | | — | | | — | | | — | | | 36,666(14) | | 2,395,756 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 11,214(4) | | 732,723 | | | 11,217(5) | | 732,919 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 7,863(6) | | 513,768 | | | 15,726(7) | | 1,027,537 | |
| | 11/9/2017 | | — | | | — | | | — | | | — | | | — | | | 913(15) | | 59,655 | | | — | | | — | |
| | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 4,469(16) | | 292,004 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 4,985(9) | | 325,720 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 13,334(9) | | 871,244 | | | — | | | — | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 5,242(11) | | 342,512 | | | — | | | — | |
| Ambra | | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 5,055(14) | | 330,294 | | | — | | | — | |
| Roth | | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 11,214(4) | | 732,723 | | | 11,217(5) | | 732,919 | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 7,863(6) | | 513,768 | | | 15,726(7) | | 1,027,537 | |
| | 3/15/2018 | | — | | | — | | | — | | | — | | | — | | | 613(12) | | 40,053 | | | — | | | — | |
| | 11/6/2018 | | — | | | — | | | — | | | — | | | — | | | 2,529(16) | | 165,245 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 4,985(9) | | 325,720 | | | — | | | — | |
| | 10/29/2019 | | — | | | — | | | — | | | — | | | — | | | 13,334(9) | | 871,244 | | | — | | | — | |
| | 10/28/2020 | | — | | | — | | | — | | | — | | | — | | | 5,242(11) | | 342,512 | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
(1)Amounts based on the fair market value of our common stock of $65.34 per share, which was the closing price of our common stock on October 1, 2021 as reported on Nasdaq.
(2)Represents a stock option that vested on December 15, 2020, the date on which our common stock equaled or exceeded a closing price of $38.37 per share as reported on Nasdaq for a period of 30 consecutive trading days.
(3)Represents a market-based restricted stock unit award that is eligible to be earned based on the Company’s achievement of total stockholder return in comparison to a peer group of companies in the Nasdaq composite index during fiscal years 2020 through 2022. To the extent earned based on total stockholder return, the portion of the award that is eligible to be earned based on total stockholder return during fiscal years 2020 through 2022 will vest in November 2022 generally subject to the named executive officer’s remaining in continuous service with us through the applicable vesting date. The number of shares reported in the table has been calculated assuming that maximum performance is achieved with respect to future fiscal years.
(4)Represents a performance-based restricted stock unit award that was earned on November 4, 2021 based on fiscal year 2020 and 2021 Adjusted EPS growth. The award was earned at maximum performance and vested on November 4, 2021 at 300%.
(5)Represents a performance-based restricted stock unit award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2020 through 2022. To the extent earned based on Adjusted EPS growth, the award will vest in November of 2022, generally subject to the named executive officer's remaining in continuous service with us through the applicable vesting date. Based on the level of achievement in fiscal year 2021, the number of shares reported in the table has been calculated assuming that maximum performance is achieved with respect to future years and that 300% of each remaining tranche of the target award will be earned.
(6)Represents a performance-based restricted stock unit award that was earned on November 4, 2021 based on fiscal year 2021 Adjusted EPS growth. The award was earned at maximum performance and vested on November 4, 2021 at 300%.
(7)Represents a performance-based restricted stock unit award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2021 and 2022, and fiscal years 2021 through 2023. To the extent earned based on Adjusted EPS growth, the portion of the award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2021 and 2022 will vest in November 2022 and the portion of the award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2021 through 2023 will vest in November 2023, generally subject to the named executive officer's remaining in continuous service with us through each applicable vesting date. Based on the level of achievement in fiscal year 2021, the number of shares reported in the table has been calculated assuming that maximum performance is achieved with respect to future years and that 300% of each remaining tranche of the target award will be earned.
(8)Represents a restricted stock unit award that vests in equal semi-annual installments starting on November 16, 2021 through May 16, 2024, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
(9)Represents a restricted stock unit award that vests in equal annual installments on October 29, 2021 and October 29, 2022, generally subject to the named executive officer's remaining in continuous service with us through each applicable vesting date.
(10)Represents a restricted stock unit award that vests in equal annual installments on November 17, 2021 and November 17, 2022, generally subject to the named executive officer's remaining in continuous service with us through each applicable vesting date.
(11)Represents a restricted stock unit award that vests in equal annual installments on October 28, 2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Option Awards(1) | | | Stock Awards | |
Name | | Grant
Date | | | Number of
Securities
Underlying
Unexercised
Options
Exercisable (#) | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable (#) | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) | | | Unearned
Option
Exercise
Price ($) | | | Option
Expiration
Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested (#) | | | Market
Value
of
Shares
or
Units of
Stock
That
Have
Not
Vested
($)(2) | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
(#) | | | Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(2) | |
John Croteau | | | 11/14/2017 | | | | — | | | | 10,924(3) | | | | — | | | | 36.61 | | | | 11/14/2027 | | | | — | | | | — | | | | — | | | | — | |
| | | 4/29/2014 | | | | 80,330(4) | | | | — | | | | — | | | | 17.50 | | | | 4/29/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 5/5/2015 | | | | 40,000(5) | | | | — | | | | 60,000(6) | | | | 33.66 | | | | 5/5/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | 100,000(7) | | | | 32.10 | | | | 11/13/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | 100,000(8) | | | | 40.25 | | | | 11/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/14/2017 | | | | — | | | | — | | | | 110,000(9) | | | | 36.61 | | | | 11/14/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/14/2017 | | | | — | | | | 69,076(3) | | | | — | | | | 36.61 | | | | 11/14/2027 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,179(10) | | | | 65,487 | |
| | | 11/14/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,667(11) | | | | 240,340 | |
| | | 5/5/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,750(12) | | | | 77,250 | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,377(13) | | | | 151,966 | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9,537(14) | | | | 196,462 | | | | — | | | | — | |
| | | | | | | | | | |
Robert McMullan | | | 9/3/2015 | | | | 20,000(16) | | | | — | | | | — | | | | 29.80 | | | | 9/3/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | 20,000(7) | | | | 32.10 | | | | 11/13/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | 30,000(8) | | | | 40.25 | | | | 11/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | 40,000(9) | | | | 36.56 | | | | 11/9/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,099(10) | | | | 22,629 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2960(11) | | | | 60,966 | |
| | | 4/22/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,311(12) | | | | 27,007 | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,579(13) | | | | 53,127 | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,296(13) | | | | 67,898 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,919(15) | | | | 121,931 | | | | — | | | | — | |
| | | | | | | | | | |
Robert Dennehy | | | 4/29/2014 | | | | 30,000(4) | | | | — | | | | — | | | | 17.50 | | | | 4/29/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 4/22/2015 | | | | 10,000(5) | | | | — | | | | 15,000(6) | | | | 34.46 | | | | 4/22/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | 25,000(7) | | | | 32.10 | | | | 11/13/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | 25,000(8) | | | | 40.25 | | | | 11/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | 30,000(9) | | | | 36.56 | | | | 11/9/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 973(10) | | | | 20,034 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,947(11) | | | | 40,108 | |
| | | 4/22/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,161(12) | | | | 23,917 | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,282(13) | | | | 47,009 | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,918(14) | | | | 60,111 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,894(15) | | | | 80,216 | | | | — | | | | — | |
| | | | | | | | | | |
Vivek Rajgarhia | | | 4/22/2015 | | | | 10,000(5) | | | | — | | | | — | | | | 34.46 | | | | 4/22/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | 10,000(7) | | | | 32.10 | | | | 11/13/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | 20,000(8) | | | | 40.25 | | | | 11/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | 30,000(9) | | | | 36.56 | | | | 11/9/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,366(11) | | | | 28,129 | |
| | | 3/23/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 740(17) | | | | 15,244 | | | | — | | | | — | |
| | | 3/17/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,270(18) | | | | 46,762 | | | | — | | | | — | |
| | | 7/20/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 8,334(12) | | | | 171,680 | | | | — | | | | — | |
| | | 3/14/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,750(19) | | | | 77,250 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,667(13) | | | | 240,340 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500(20) | | | | 360,500 | | | | — | | | | — | |
| | | 5/31/2018 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 5,435(21) | | | | 111,961 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,097(15) | | | | 84,398 | | | | — | | | | — | |
| | | | | | | | | | |
Preetinder Virk | | | 4/22/2015 | | | | — | | | | — | | | | 10,000(6) | | | | 34.46 | | | | 4/22/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | 20,000(7) | | | | 32.10 | | | | 11/13/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | 4/20/2016 | | | | — | | | | — | | | | 5,000(6) | | | | 39.50 | | | | 4/20/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | 20,000(8) | | | | 40.25 | | | | 11/9/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | 30,000(9) | | | | 36.56 | | | | 11/9/2024 | | | | — | | | | ��� | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 985(10) | | | | 20,281 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,972(11) | | | | 40,613 | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,667(13) | | | | 240,340 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,500(20) | | | | 360,500 | | | | — | | | | — | |
| | | 4/22/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,275(12) | | | | 26,265 | | | | — | | | | — | |
| | | 11/13/2015 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,003(13) | | | | 41,262 | | | | — | | | | — | |
| | | 11/9/2016 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,955(14) | | | | 60,873 | | | | — | | | | — | |
| | | 11/9/2017 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,944(15) | | | | 81,246 | | | | — | | | | — | |
| (1) | In November 2018 certain of the performance-based stock option awards included in this table were canceled in exchange for performance-based restricted stock units. See “Compensation Discussion and Analysis-Long-Term Equity Incentives” for more information.
|
| (2) | Amounts(12)Represents a restricted stock unit award that vests on February 15, 2022, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
(13)Represents a restricted stock unit award that vests in equal annual installments on February 15, 2022 and February 15, 2023, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date. (14)Represents a performance-based restricted stock unit award that was earned on November 4, 2021 based on fiscal year 2019 through 2021 Adjusted EPS growth. The award was earned at maximum performance and vested on November 4, 2021 at 300%. (15)Represents a restricted stock unit award that vests on the fair market value of our common stock of $20.60 per share, which was the closing price of our common stock on September 28, 2018 as reported on Nasdaq. |
| (3) | Represents a stock option that vests in equal annual installments on May 15, 2019, May 15, 2020, May 15, 2022, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
(16)Represents a restricted stock unit award that vests in equal annual installments on May 15, 2022 and May 15, 2023, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date. (17)Represents a stock option that vested on February 16, 2021, the date on which our common stock equaled or exceeded $61.32 per share for a period of 30 consecutive trading days.
2021 and May 15, 2022, generally subject to Mr. Croteau’s continuous service with us through each vesting date. |
| (4) | Represents a stock option that vested on January 23, 2015, the date on which our common stock first achieved a closing price of $32.55 per share as reported on Nasdaq.
|
| (5) | Represents performance-based stock options granted to Messrs. Croteau, Dennehy and Rajgarhia. Mr. Croteau’s option partially vested on December 30, 2016, Mr. Dennehy’s option partially vested on December 30, 2016 and Mr. Rajgarhia’s option fully vested on November 9, 2017, in each case, upon the achievement of certain revenue andnon-GAAP gross margin performance targets.
|
| (6) | Represents a stock option that is eligible to vest, in whole or in part, based upon achievement of certain revenue andnon-GAAP gross margin performance targets in any four consecutive fiscal quarters completed during the term of the stock option, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
|
| (7) | Represents a stock option that will vest if the closing price of our common stock equals or exceeds $64.22 per share for a period of thirty consecutive trading days, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
|
| (8) | Represents a stock option that will vest if the closing price of our common stock equals or exceeds $66.96 per share for a period of thirty consecutive trading days, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
|
| (9) | Represents a stock option that will vest if the closing price of our common stock equals or exceeds $98.99 per share for a period of thirty consecutive trading days, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
|
| (10) | Represents a performance-based restricted stock unit award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2017 through 2019, and, to the extent earned based on performance, will vest on May 15, 2020, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date. Based on the level of achievement in fiscal year 2017 and 2018, the number of shares reported in the table has been calculated assuming that threshold performance is achieved with respect to future fiscal years. The portion of the award that was eligible to be earned based on fiscal year 2017-2018 performance was not earned based on fiscal 2017-2018 Adjusted EPS growth and, as a result, is not included in the table above.
|
| (11) | Represents a performance-based restricted stock unit award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2018 and 2019 and fiscal years 2018 through 2020. To the extent earned based on Adjusted EPS growth, the portion of the award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2018 and 2019 will vest on May 15, 2020 and the portion of the award that is eligible to be earned based on Adjusted EPS growth during fiscal years 2018 through 2020 will vest on May 15, 2021, generally subject to the named executive officer’s remaining in continuous service with us through the applicable vesting date. Based on the level of achievement in fiscal year 2018, the number of shares reported in the table has been calculated assuming that threshold performance is achieved with respect to future fiscal years. The portion of the award that was eligible to be earned based on fiscal year 2018 performance was not earned based on fiscal year 2018 Adjusted EPS growth and, as a result, is not included in the table above.
|
| (12) | Represents a restricted stock unit award that vests on May 15, 2019, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
|
| (13) | Represents a restricted stock unit award that vests in equal annual installments on May 15, 2019 and May 15, 2020, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
|
| (14) | Represents a restricted stock unit award that vests in equal annual installments on May 15, 2019, May 15, 2020 and May 15, 2021, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
|
| (15) | Represents a restricted stock unit award that vests in equal annual installments May 15, 2019, May 15, 2020, May 15, 2021 and May 15, 2022, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
|
| (16) | Represents a restricted stock unit award that vests on February 15, 2019, generally subject to Mr. Rajgarhia’s remaining in continuous service with us through the vesting date.
|
| (17) | Represents a restricted stock unit award that vests in equal annual installments on February 15, 2019 and February 15, 2020, generally subject to Mr. Rajgarhia’s remaining in continuous service with us through each applicable vesting date.
|
| (18) | Represents a stock option that vested on July 26, 2017, the date that the closing price of our common stock exceeded $63.60 per share for a period of three consecutive trading days.
|
| (19) | Represents a restricted stock unit award that vests in equal annual installments on February 15, 2019, February 15, 2020 and February 15, 2021, generally subject to Mr. Rajgarhia’s remaining in continuous service with us through each applicable vesting date.
|
| (20) | Represents a restricted stock unit award that vests in equal annual installments on May 15, 2021 and May 15, 2022, generally subject to the named executive officer’s remaining in continuous service with us through each applicable vesting date.
|
| (21) | Represents a restricted stock unit award that vests on May 15, 2021, generally subject to the named executive officer’s remaining in continuous service with us through the vesting date.
|
2018 Option Exercises and Stock Vested Table
The following table sets forth information for each of our named executive officers regarding stock options exercised and stock awards vested during the fiscal year ended
September 28, 2018. | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
Name | | Number of
Shares Acquired
on Exercise (#) | | | Value Realized on
Exercise ($)(1) | | | Number of Shares
Acquired on
Vesting (#) | | | Value Realized on
Vesting ($)(2) | |
John Croteau | | | — | | | | — | | | | 79,275 | | | | 1,826,496 | |
Robert McMullan | | | — | | | | — | | | | 29,220 | | | | 673,229 | |
Robert Dennehy | | | — | | | | — | | | | 25,556 | | | | 588,810 | |
Vivek Rajgarhia | | | — | | | | — | | | | 25,719 | | | | 581,724 | |
Preetinder Virk | | | — | | | | — | | | | 32,629 | | | | 751,772 | |
| (1) | For option awards, the value realized is based on the closing price of our common stock on the date of exercise minus the applicable exercise price.
|
| (2) | For stock awards, the value realized is based on the closing price of our common stock on the vesting date.
|
October 1, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | Stock Awards |
| Name | | Number of
Shares Acquired
on Exercise
(#) | | Value Realized on
Exercise
($)(1) | | Number of Shares
Acquired on
Vesting
(#) | | Value Realized on
Vesting
($)(2) |
| Stephen Daly | | — | | | — | | | 130,245 | | | 5,498,080 | |
| John Kober | | — | | | — | | | 54,133 | | | 2,601,304 | |
| | | | | | | | |
| Robert Dennehy | | 60,000 | | | 2,770,255 | | | 116,162 | | | 4,811,189 | |
| Donghyun Thomas Hwang | | — | | | — | | | 80,283 | | | 3,322,873 | |
| Ambra Roth | | — | | | — | | | 27,780 | | | 1,149,313 | |
(1)For option awards, the value realized is based on the market price of our common stock on the date of exercise minus the applicable exercise price.
(2)For stock awards, the value realized is based on the closing price of our common stock on the vesting date.
We currently do not (and did not in fiscal year
2018)2021) sponsor any defined benefit pension or other actuarial plan in which our named executive officers participate.
Nonqualified Deferred Compensation
We currently do not (and did not in fiscal year
2018)2021) maintain any nonqualified defined contribution or other deferred compensation plan or arrangement for our named executive officers.
Potential Payments upon Termination or Change in Control
The table below reflects, as applicable, cash severance, equity acceleration and continuation of health benefits payable to our current named executive officers in connection with a termination by the Company without cause or a resignation by the executive for good reason within three months prior to or two years following a “change in control,” in each case assuming that such triggering event took place on October 1, 2021, and based on the closing price of our common stock on this date, $65.34, to the extent applicable, and for Mr. CroteauDaly, in connection with the termination of his employment relationship by the Company without cause (as defined in his employment agreement) or resignation by him for good reason (as defined in his employment agreement).
Severance Entitlements and Payments
Mr. Daly is party to an employment agreement with the Company that provides for payments upon an involuntary termination of employment by the Company other than for “cause” (as defined in his employment agreement) and upon a termination of employment by him for “good reason” (as defined in his employment agreement). Pursuant to Mr. Croteau’sDaly’s employment agreement, if his employment is terminated by the Company other than for cause or if he resigns for good reason, he would be entitled to receive continued monthly base salary and reimbursements of the Company’s portion of medical and dental benefit premiums (subject to certain conditions) for twelve months following his termination of employment, a prorated annual bonus for the year of termination, based on actual performance, accelerated vesting of his new hire grant of 136,239 restricted stock units (which vested as to 20% of the restricted stock units on May 16, 2020 and 10% of the restricted stock units on November 16, 2020 and May 16, 2021, respectively, and vests as to 10% of the restricted stock units on each six-month anniversary thereafter, generally subject to Mr. Daly’s continued employment through each applicable vesting date), and twelve months’ accelerated vesting credit for any other outstanding equity awards.awards that vest solely based on continued employment or service with us. In addition, Mr. Croteau’sDaly’s equity awards would remain exercisable for one year following termination of employment. Mr. CroteauDaly will be subject tonon-competition andnon-solicitation restrictions for the period during which he is entitled to receive salary continuation.
Mr. Virk is party to an employment agreement with the Company that provides for payments upon an involuntary termination of employment by the Company other than for “cause” (as defined in his employment agreement). Pursuant to Mr. Virk’s employment agreement, if his employment is terminated other than for cause, he would be entitled to 90 days’ prior written notice of the termination from the Company, and would receive continued monthly base salary for six months following termination (capped at $157,500 in the aggregate) and, at the Company’s option, either continued medical and dental coverage for the same period or reimbursements of his out of pocket cost for obtaining such coverage for the same period.
In addition, theCIC Plan
The CIC Plan, in which each of our
current named executive officers is
currently a participant, provides that:
•immediately prior to a “change in control” (as defined in the CIC Plan), subject to the terms and conditions contained in the CIC Plan, any performance-based equity awards held by a participant will be deemed earned at maximum levels of performance as of immediately prior to the change in control and become exercisable, vested and/or payable on the later
of the end of the originally applicable performance period and any further service-based vesting period relating to such award, subject to the participant’s continued employment except as set forth below;
•if a change in control occurs and a participant’s employment is terminated by us without “cause” (as defined in the CIC Plan) or a participant resigns from employment with us for “good reason” (as defined in the CIC Plan), in each case, within 3three months prior to and in connection with the change of control or within thetwo-year period following the change in control, the participant will be entitled to the following payments and benefits:
| o | the sum of the participant’s annual base salary and target annual bonus for the year in which the termination occurs (multiplied by 2 for Mr. Croteau and by 1.5 for Mr. McMullan), payable in a lump sum;
|
| o | a prorated annual bonus based on the participant’s target annual bonus or, if greater and the termination of employment occurs in the second half of the applicable bonus period, the estimated actual amount of such annual bonus;
|
| o | a lump sum amount equal to the Company’s estimate of the total cost of medical, dental and vision continuation coverage under the Company’s group health plan for the participant and his participating dependents for 24 months, in the case of Mr. Croteau, 18 months, in the case of Mr. McMullan, or 12 months, for each of the other named executive officers, in each case, increased by the amount of federal and state taxes imposed on such payments; and
|
| o | full vesting of all outstanding equity awards held by the participant.
|
We
◦the sum of the participant’s annual base salary and target annual bonus for the year in which the termination occurs (multiplied by 2.0 for Mr. Daly and 1.5 for Mr. Kober), payable in a lump sum;
◦a prorated annual bonus based on the participant’s target annual bonus or, if greater and the termination of employment occurs in the second half of the applicable bonus period, the estimated actual amount of such annual bonus;
◦a lump sum amount equal to the Company’s estimate of the total cost of medical, dental and vision continuation coverage under the Company’s group health plan for the participant and his participating dependents for 24 months, in the case of Mr. Daly, 18 months, in the case of Mr. Kober, or 12 months for each of the other named executive officers, in each case, increased by the amount of federal and state taxes imposed on such payments; and
◦full vesting of all outstanding equity awards held by the participant.
Since all of our current named executive officers were participants in the CIC Plan prior to January 1, 2022, we will make an additional
lump-sum lump sum cash payment to a
CIC Plan participantnamed executive officer if
the participant becomesthey become subject to an excise tax under Section 4999 of the Code as a result of any payment or benefit made or provided under the CIC Plan, either alone or when aggregated with any other payments or benefits. The net result of the additional payment is to place the participant in the same
after-tax position as if the excise tax had not been imposed.
In the event that a participant has an existing agreement with us relating to the participant’s potential rights to severance pay, equity acceleration or benefits in connection with a change in control, such rights will be superseded by the rights of the participant under the CIC Plan with respect to any change in control occurring during the term of the CIC Plan, but such agreement otherwise will remain enforceable and in full force and effect.
In addition to the benefits provided by the CIC Plan, our performance-vesting stock options become fully vested and exercisable immediately prior to a change
Potential Payments upon Termination or Change in control.Control Table
A summary of the potential payments that each of our current named executive officers would have received upon the occurrence of these events, assuming that each triggering event occurred on September 28, 2018,October 1, 2021, is set forth below.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary Termination (1) | | Involuntary Termination within
Three Months Before or Twenty-Four Months Following a
Change in Control (2) |
| Name | | Severance
($) | | Health
Insurance
Benefits
($) | | Restricted
Stock/
Option
Awards
($)(3) | | Total ($) | | Severance
($) | | Health
Insurance
Benefits
($) | | Restricted
Stock Unit/
Option
Awards
($)(4) | | Excise
Tax ($)(5) | | Total ($) |
| Stephen Daly (6) | | 1,603,125 | | | 26,400 | | | 6,636,126 | | | 8,265,651 | | | 3,375,000 | | | 52,800 | | | 45,196,658 | | | 26,373,668 | | | 74,998,126 | |
| John Kober | | — | | | — | | | — | | | — | | | 1,434,375 | | | 39,600 | | | 8,907,410 | | | 5,323,019 | | | 15,704,404 | |
| | | | | | | | | | | | | | | | | | |
| Robert Dennehy | | — | | | — | | | — | | | — | | | 780,000 | | | 26,400 | | | 10,961,177 | | | 5,453,731 | | | 17,221,308 | |
| Donghyun Thomas Hwang | | — | | | — | | | — | | | — | | | 780,000 | | | 26,400 | | | 8,547,975 | | | 4,326,210 | | | 13,680,585 | |
| Ambra Roth | | — | | | — | | | — | | | — | | | 780,000 | | | 26,400 | | | 5,082,015 | | | 3,768,758 | | | 9,657,173 | |
(1)“Involuntary Termination” as used in this column includes involuntary termination without cause or a voluntary termination with good reason, as provided in Mr. Daly’s employment agreement. The amount included in the “Severance” column in respect of an annual bonus in fiscal year 2021 reflects the actual bonus earned by Mr. Daly in respect of fiscal year 2021. Amounts listed in the “Health/Life Insurance Benefits” column have been calculated assuming that the cost of medical, dental and vision continuation coverage under the Company’s group health plan is $2,200 per month.
(2)All amounts listed beneath this heading represent benefits potentially payable under the CIC Plan. “Involuntary Termination” as used in this column includes involuntary termination without cause or a voluntary termination with good reason, as and to the extent provided for in the CIC Plan. Amounts listed in the “Severance” column are based on the annual base salaries and target annual bonuses in effect as of October 1, 2021 and have been calculated assuming that each named executive officer receives a prorated annual bonus for the year of termination of employment equal to his target
annual bonus. Amounts listed in the “Health/Life Insurance Benefits” column have been calculated assuming that the cost of medical, dental and vision continuation coverage under the Company’s group health plan is $2,200 per month.
(3)Amounts are based on the fair market value of our common stock of $65.34 per share, which was the closing price of our common stock on October 1, 2021 as reported on Nasdaq, and have been calculated assuming that all outstanding equity awards held by the applicable named executive officer that are scheduled to vest based on the named executive officer’s continued service within twelve months following October 1, 2021 vest in full and that the 81,746 unvested RSUs granted to Mr. Daly vest in full pursuant to the terms of his employment agreement.
(4)Amounts are based on the fair market value of our common stock of $65.34 per share, which was the closing price of our common stock on October 1, 2021 as reported on Nasdaq, and have been calculated assuming that all outstanding equity awards vest in full, with outstanding performance-based restricted stock units earned at maximum with respect to future fiscal years.
(5)Amounts listed represent an estimate of the additional lump-sum payment that would be payable if a named executive officer became subject to the excise tax under Section 4999 of the Code, as described above based on the assumptions described above, and further assuming that (a) all performance-based restricted stock units and stock options will be deemed earned at the maximum level of performance and will vest in full upon a qualifying termination of employment, based on a price per share equal to $65.34; (b) the full value of all equity awards so vesting will be parachute payments; (c) each of the named executive officers receives a prorated annual bonus for the year of termination of employment equal to his target annual bonus; (d) the lump sum payment equal to the estimated cost of the Company’s medical, dental and vision continuation coverage is $2,200 per month; (e) each named executive officer is set forth below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Involuntary Termination (1) | | | Involuntary Termination within
Three Months Before or Twenty-Four Months Following a
Change in Control (2) | |
Name | | Severance
($) | | | Health
Insurance
Benefits
($) | | | Restricted
Stock/
Option
Awards
($)(3) | | | Total
($) | | | Severance
($) | | | Health
Insurance
Benefits
($) | | | Restricted
Stock Unit/
Option
Awards
($)(4) | | | Excise
Tax ($)(5) | | | Total ($) | |
John Croteau(6) | | | 669,500 | | | | 24,000 | | | | 218,690 | | | | 912,190 | | | | 3,347,500 | | | | 48,000 | | | | 3,830,426 | | | | — | | | | 7,225,926 | |
| | | | | | | | | |
Robert McMullan | | | — | | | | — | | | | — | | | | — | | | | 1,358,438 | | | | 36,000 | | | | 1,249,493 | | | | — | | | | 2,643,931 | |
| | | | | | | | | |
Robert Dennehy | | | — | | | | — | | | | — | | | | — | | | | 721,200 | | | | 24,000 | | | | 953,656 | | | | — | | | | 1,698,856 | |
| | | | | | | | | |
Vivek Rajgarhia | | | — | | | | — | | | | — | | | | — | | | | 700,400 | | | | 24,000 | | | | 1,361,269 | | | | 932,722 | | | | 3,018,391 | |
| | | | | | | | | |
Preetinder Virk(7) | | | 157,500 | | | | 12,000 | | | | — | | | | 169,500 | | | | 730,334 | | | | 24,000 | | | | 1,543,249 | | | | — | | | | 2,297,583 | |
| (1) | “Involuntary Termination” as used in this column includes involuntary termination without cause or a voluntary termination with good reason, as and to the extent provided for in each named executive officer’s employment arrangement. For Mr. Croteau, no amount has been included in the “Severance” column in respect of a prorated bonus in fiscal 2018, because no bonus was payable for fiscal 2018 based on actual performance. Amounts listed in the “Health/Life Insurance Benefits” column have been calculated assuming that the cost of medical, dental and vision continuation coverage under the Company’s group health plan is $2,000 per month.
|
| (2) | All amounts listed beneath this heading represent benefits potentially payable under the CIC Plan. “Involuntary Termination” as used in this column includes involuntary termination without cause or a voluntary termination with good reason, as and to the extent provided for in the CIC Plan. Amounts listed in the “Severance” column are based on the annual base salaries and target annual bonuses in effect as of September 30, 2018 and have been calculated assuming that each named executive officer receives a prorated annual bonus for the year of termination of employment equal to his target annual bonus. Amounts listed in the “Health/Life Insurance Benefits” column have been calculated assuming that the cost of medical, dental and vision continuation coverage under the Company’s group health plan is $2,000 per month.
|
| (3) | Amounts are based on the fair market value of our common stock of $20.60 per share, which was the closing price of our common stock on September 28, 2018 as reported on Nasdaq, and have been calculated assuming that all outstanding equity awards held by Mr. Croteau that are scheduled to vest based on Mr. Croteau’s continued service within twelve months following September 28, 2018 vest in full. No amounts are included in respect of any stock options, which were allout-of-the-moneysubject to the maximum applicable federal and state tax rates in effect for 2021; and (f) none of the parachute payments are exempt under a special rule for reasonable compensation. Any actual entitlement to such additional lump-sum payment will be based on the facts and circumstances that exist at the time of a change in control or a termination of employment in connection with a change in control. based on the closing price of our common stock on September 28, 2018.
|
| (4) | Amounts are based on the fair market value of our common stock of $20.60 per share, which was the closing price of our common stock on September 28, 2018 as reported on Nasdaq, and have been calculated assuming that all outstanding equity awards vest in full, with outstanding performance-based restricted stock units earned at 300% with respect to future fiscal years. No amounts are included in respect of any stock options, which were allout-of-the-money based on the closing price of our common stock on September 28, 2018.
|
| (5) | Amounts listed represent an estimate of the additionallump-sum payment that would be payable if a named executive officer became subject to the excise tax under Section 4999 of the Code, as described above based on the assumptions described above, and further assuming that (a) all performance-based restricted stock units will be deemed earned at the maximum level of performance and will vest in full upon a qualifying termination of employment, based on a price per share equal to $20.60; (b) the full value of all equity awards so vesting will be parachute payments; (c) each of the named executive officers receives a prorated annual bonus for the year of termination of employment equal to his target annual bonus; (d) the lump sum payment equal to the estimated cost of the Company’s medical, dental and vision continuation coverage is $2,000 per month; (e) each named executive officer is subject to the maximum applicable federal and state tax rates in effect for 2018; and (f) none of the parachute payments are exempt under a special rule for reasonable compensation. Any actual entitlement to such additionallump-sum payment will be based on the facts and circumstances that exist at the time of a change in control or a termination of employment in connection with a change in control. For Mr. Virk, the additionallump-sum payment that would be payable is based on Mr. Virk’s compensation received from the Company from 2014-2017 only (and does not take in account the compensation he received from Mindspeed in 2013, which could have a material impact on the estimated amount included above).
|
| (6) | All amounts listed for Mr. Croteau beneath the “Involuntary Termination for Other than Cause” heading represent benefits potentially payable pursuant to his employment agreement, as described above.
|
| (7) | All amounts listed for Mr. Virk beneath the “Involuntary Termination for Other than Cause” heading represent benefits potentially payable pursuant to his employment agreement, as described above.
|
(6)Excise tax gross-up amount for Mr. Daly is calculated with reference to his compensation as a member of our board of directors from 2016-2018, as required by Section 280G of the Code.
Pursuant to Item 402(u) of Regulation
S-K, we are required to disclose in this
proxy statementProxy Statement the ratio of the annual total compensation of our principal executive officer to the median of the annual total compensation of all of our employees (other than our principal executive officer).
We have determined that Mr.
Croteau’sDaly’s annual total compensation for fiscal year
20182021 was
$5,079,356,$3,175,058, as disclosed
underin the
20182021 Summary Compensation Table above. Based on SEC rules and guidance and applying the methodology described below, we have determined that the median of the annual compensation, as described below, for all of our employees (other than our principal executive officer) for
2018fiscal year 2021 was
$93,616.$132,346. Accordingly, for fiscal year
2018,2021, we estimate the ratio of our principal executive officer’s annual total compensation to the median of the total annual compensation for all of our employees (other than our principal executive officer) was approximately
5424 to 1.
For purposes of determining our median employee
in fiscal year 2021, we selected the last day of our fiscal year,
September 28, 2018,October 1, 2021, to establish our employee population. As of
September 28, 2018,October 1, 2021, our employee population consisted of
1,4451,104 employees, with
940778 of these employees employed in the United States, and
505326 of these employees employed in
1816 other countries throughout the world, primarily in Europe
Asia, and
India.Asia. As permitted by SEC rules, we excluded
5044 employees in following countries under the de minimis exemption for purposes of identifying our median employee: Finland (1),
France (22)Germany (5),
Germany (4), Greece (1), Hong Kong (5)India (30), Italy (1),
Netherlands (7), Philippines (2)Singapore (1), South Korea (3)
and the, United Kingdom
(4)(1) and Vietnam (2). As a result, for purposes of the pay ratio calculation
conducted in fiscal year 2021, our employee population consisted of
1,3951,060 employees, with
940778 of these employees employed in the United States and
455282 of these employees employed outside of the United States.
For purposes of identifying our median employee we used a consistently applied compensation measure consisting of base salary or wages, excluding overtime pay, for the fiscal year ending on
September 28, 2018.October 1, 2021. We annualized the actual base salary or wages paid to those employees who were not employed by us for the entire fiscal year. For employees outside of the United States, we used the foreign exchange rates that were effective as of the last day of our fiscal year to convert the base salaries and wages into U.S. dollars.
Once the
The median
employee was identified, as described above, that employee’s total annual compensation for fiscal year
20182021 was determined using the same rules that apply to reporting the compensation of our named executive officers (including our principal executive officer) in the “Total” column of the
20182021 Summary Compensation Table.
This pay ratio is a reasonable estimate calculated in a manner consistent with the SEC’s rules and is based on our records and the methodology described above. Because the SEC’s rules for identifying the median of the annual total compensation of our employees and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.
PROPOSAL 2: ADVISORY VOTE TO APPROVE THE COMPENSATION
OF OUR NAMED EXECUTIVE OFFICERS
| | |
| PROPOSAL 2: ADVISORY VOTE TO APPROVE THE COMPENSATION |
| OF OUR NAMED EXECUTIVE OFFICERS |
Pursuant to Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are asking our stockholders to vote to approve, on a nonbinding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement, commonly referred to as the “say-on-pay” vote.
In accordance with Exchange Act requirements, we are providing our stockholders with an opportunity to express their views on our named executive officers’ compensation for fiscal year 2018,2021, as disclosed in this Proxy Statement. The Company’sCompany’s current policy and the board of directors’ recommendation contained in Proposal 3, is to submit the named executive officers’ compensation to an advisory vote at its annual meeting of stockholders every three years.year. Assuming no change to the Company’s current policy regarding the frequency of such advisory vote, it is expected that the next“say-on-pay” “say-on-pay” vote will occur at our 20222023 annual meeting of stockholders. Although this advisory vote is nonbinding, our board of directors and compensation committee will review and consider the voting results when making future decisions regarding our named executive officer compensation and related executive compensation programs.
As described in more detail in the Compensation Discussion and Analysis, our executive compensation program is designed to:
attract and retain the best executive talent;
motivate our executives to achieve our financial and business goals; and
align our executives’ interests with those of our stockholders to drive increased stockholder value.
We encourage stockholders to read the Compensation Discussion and Analysis beginning on page
1618 of this Proxy Statement, which describes the processes our compensation committee used to determine the structure and amounts of the compensation of our named executive officers in fiscal year
20182021 and how our executive compensation philosophy, policies and procedures operate and are designed to achieve our compensation objectives.
As discussed above, we reached out to stockholders representing over 80% of non-insider ownership and engaged in discussions with stockholders representing over 55% of non-insider ownership and made changes to the fiscal year 2022 executive compensation plans after careful consideration of those discussions. See the section entitled “Fiscal Year 2021 Stockholder Outreach Initiative” above for more information. The compensation committee and our board of directors believe
that their role is to ensure that our executive compensation strikes the appropriate balance between utilizing measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to value creation for our stockholders.
The board of directors recommends that stockholders indicate their support for the compensation of our named executive officers. The vote on this resolution is not intended to address any specific element of compensation but rather the overall named executive officer compensation program as described in this Proxy Statement.
Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our named executive officers for fiscal year
2018,2021, as disclosed pursuant to Item 402 of Regulation
S-K, including the Compensation Discussion and Analysis, the compensation tables and any other related disclosure in this Proxy Statement.”
The Board of Directors Recommends a Vote “FOR” the Approval of the Compensation of Our Named Executive Officers.
PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
Pursuant to Section 14A of the Exchange Act, we are asking our stockholders to vote, on a nonbinding, advisory basis, on the frequency of future advisory votes on the compensation of our named executive officers as reflected in Proposal 2 above. Stockholders may indicate whether they prefer that we conduct future advisory votes on the compensation of our named executive officers every one, two or three years. Stockholders also may abstain from casting a vote on this proposal.
After careful consideration, the board of directors has determined that holding an advisory vote on the compensation of our named executive officers every three years is the most appropriate policy at this time, and recommends that future advisory votes on the compensation of our named executive officers occur every third year. Our executive compensation program is designed to create long-term value for our stockholders, and a triennial vote will allow stockholders to better judge our executive compensation program in relation to our long-term performance. We also believe that a vote every three years is an appropriate frequency to provide sufficient time to thoughtfully consider stockholders’ input and to implement any appropriate changes to our executive compensation program, in light of the timing that would be required to implement any decisions related to such changes. In addition, many large stockholders rely on proxy advisory firms for vote recommendations. We believe holding a triennial vote will help proxy advisory firms provide more detailed and thorough analyses and recommendations.
Finally, the board of directors believes that a triennial vote would not foreclose stockholder engagement on our compensation program during interim periods. Stockholders are able to vote on the
re-election
of compensation committee members to the board of directors, and are also encouraged to provide input on our compensation policies directly to the board of directors. Thus, we view the advisory vote on executive compensation as an additional, but not exclusive, opportunity for our stockholders to communicate their views on our compensation program.Stockholders will be able to specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. The voting frequency option that receives the highest number of votes cast by stockholders will be deemed the frequency for the advisory vote on executive compensation that has been selected by stockholders. Although this advisory vote on the frequency of future advisory votes on the compensation of our named executive officers is nonbinding, the board of directors and the compensation committee will carefully review and consider the voting results when determining the frequency of future advisory votes on the compensation of our named executive officers. Pursuant to the SEC’s rules, our next advisory vote on the frequency of advisory votes on the compensation of our named executive officers will occur at our 2025 annual meeting of stockholders.
The Board of Directors Recommends a Vote in favor of “3 YEARS” on the Proposal Concerning the Frequency of Future Advisory Votes on the Compensation of our Named Executive Officers.
PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
| | |
| PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR |
| INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The audit committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending September
27, 2019.30, 2022. Deloitte & Touche LLP has served as our independent public accounting firm since fiscal year 2010. We expect that representatives of Deloitte & Touche LLP will be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
Our board of directors is submitting the appointment of Deloitte & Touche LLP to our stockholders for ratification as a matter of corporate practice. If our stockholders fail to ratify the appointment, the audit committee may reconsider whether to retain Deloitte & Touche LLP. Even if the selection is ratified, the audit committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of us and our stockholders.
The following table provides information regarding the fees billed by Deloitte & Touche LLP for the fiscal years ended
September 28, 2018October 1, 2021 and
September 29, 2017.October 2, 2020. All services provided by, and fees paid to, Deloitte & Touche LLP as described below were
pre-approved by the audit committee in accordance with the audit committee
pre-approval policy set forth below.
| | | | | | | | |
| | | Fiscal Year
2018 | | | Fiscal Year
2017 | |
Audit Fees | | | $2,075,103 | | | | $1,848,500 | |
Audit-Related Fees | | | — | | | | 240,000 | |
Tax Fees | | | 492,283 | | | | 390,597 | |
All Other Fees | | | 2,000 | | | | 2,000 | |
| | | | | | | | |
Total | | | $2,569,386 | | | | $2,481,097 | |
| | | | | | | | | | | | | | |
| | Fiscal Year 2021 | | Fiscal Year 2020 |
| Audit Fees | | $ | 1,478,863 | | | $ | 1,526,632 | |
| Audit-Related Fees | | — | | | — | |
| Tax Fees | | 236,400 | | | 273,665 | |
| All Other Fees | | 3,790 | | | 3,790 | |
| Total | | $ | 1,719,053 | | | $ | 1,804,087 | |
This category includes the aggregate fees pertaining to fiscal years
20182021 and
20172020 for audit services provided by the independent registered public accounting firm or its affiliates, including for the audits of our annual consolidated financial statements, reviews of each of the quarterly financial statements included in our Quarterly Reports on Form
10-Q, foreign statutory audits and for services rendered in connection with our other filings with the SEC.
Audit-Related Fees
Audit-related fees pertaining to fiscal year 2017 include fees for services provided in connection with certain of our mergers and acquisitions activities, including the performance of due diligence and review of a Registration Statement on FormS-4 filed with the SEC in connection with our acquisition of Applied Micro Circuits Corporation.
This category includes the aggregate fees pertaining to fiscal years
20182021 and
20172020 for professional tax services provided by the independent registered public accounting firm or its affiliates, including for tax compliance and tax advice.
Other fees include fees to the independent registered public accounting firm or its affiliates for annual subscriptions to online accounting and tax research software applications and data.
Audit Committee Review and
Pre-Approval of Independent Registered Public Accounting Firm’s Services
Our audit committee’s policy is topre-approve all audit andnon-audit services (including the fees and terms thereof) to be performed by our independent registered public accounting firm. This policy is set forth in the charter of the audit committee, which is available athttp://ir.macom.com/governance-documents. The audit committee also considered whether thenon-audit services rendered by Deloitte & Touche LLP were compatible with maintaining Deloitte & Touche LLP’s independence as the independent registered public accounting firm of our financial statements and concluded that they were. The Board of Directors Recommends a Vote “FOR” the Ratification of the Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending September 27, 2019.30, 2022.
The audit committee has reviewed and discussed the audited financial statements for the fiscal year ended September 28, 2018October 1, 2021 with our management and Deloitte & Touche LLP, our independent registered public accounting firm. The audit committee discussed with employees of the Company responsible for administering internal audit functions and with the independent registered public accounting firm the overall scope of and plans for their respective audits. The audit committee meets with the employees of the Company responsible for administering internal audit functions and representatives of the independent registered public accounting firm, in regular and executive sessions, to discuss the results of their examinations, the evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting and compliance programs. We also discussed significant accounting policies applied in the Company’sCompany’s financial statements, as well as, when applicable, alternative accounting treatments. Management and the Company’s internal and independent auditors also made presentations to the audit committee throughout the year on specific topics of interest, that include but are not limited to: (i) information technology systems, controls and security; (ii) critical accounting policies; (iii) the impact of new accounting guidance; (iv) compliance with internal controls required under Section 404 of the Sarbanes-Oxley Act; (v) compliance with the Company’s Code of Business Conduct and Ethics; (vi) risk management initiatives and controls; (vii) significant legal matters; and (viii) insider and related party transactions. Management is responsible for the preparation, presentation and integrity of the financial statements, accounting and financial reporting principles and internal control over financial reporting and has represented to the audit committee that the consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP is responsible for (1) performing an independent audit of the financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and for expressing opinions on the conformity of the financial statements with accounting principles generally accepted in the United States, and (2) performing an independent audit of our internal control over financial reporting statements in accordance with the standards of the PCAOB based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and for expressing an opinion thereon.
The audit committee has discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the PCAOB Auditing Standard No. 1301,Communications with Audit Committees,and the SEC, and has received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the audit committee concerning independence. The audit committee has discussed with Deloitte & Touche LLP their independence and considered whether Deloitte & Touche LLP’sLLP’s provision ofnon-audit services to the Company is compatible with the auditor’sauditor’s independence. The audit committee concluded that Deloitte & Touche LLP is independent from the Company and its management. Based on its reviews and discussions referred to above, the audit committee recommended to the board of directors that the audited financial statements be included in our Annual Report on Form
10-K for the fiscal year ended
September 28, 2018October 1, 2021 for filing with the SEC.
Members of the audit committee:
Geoffrey Ribar (Chairman)
Charles Bland
Stephen Daly
John Ritchie
The Audit Committee Report does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that the Company specifically incorporates the Audit Committee Report by reference therein.
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
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| SECURITY OWNERSHIP OF |
| CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT |
The following table presents information as to the beneficial ownership of our common stock as of December
28, 201831, 2021 for:
•each person who we know beneficially owns more than 5% of any class of our voting securities;
•each of our current directors or nominees;
•each of our named executive officers as set forthnamed in the 2018 Summary Compensation Table above; and
•all of our directors and executive officers as of the end of fiscal year 2021 as a group.
Unless otherwise noted, the address of each beneficial owner listed in the table is c/o MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851.
We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and 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
65,372,18569,685,722 shares of our common stock outstanding as of December
28, 2018.31, 2021. In computing the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of our common stock subject to stock options, restricted stock units or warrants held by that person that are currently exercisable or exercisable (or, in the case of restricted stock units, scheduled to vest and settle) within 60 days of December
28, 2018.31, 2021. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.
| | | | | | | | |
| | | Shares Beneficially Owned | |
Name of Beneficial Owner | | Shares | | | Percentage | |
| | |
Greater than 5% Stockholders: | | | | | | | | |
| | |
John Ocampo and affiliates (1) | | | 19,715,771 | | | | 30.2% | |
FMR LLC (2) | | | 9,660,787 | | | | 14.8% | |
Capital Research Global Investors (3) | | | 3,986,862 | | | | 6.1 | |
Ameriprise Financial, Inc. (4) | | | 3,797,308 | | | | 5.8% | |
The Vanguard Group (5) | | | 3,711,604 | | | | 5.7% | |
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Directors and Named Executive Officers: | | | | | | | | |
| | |
John Ocampo (1) | | | 19,715,771 | | | | 30.2% | |
Susan Ocampo (1) | | | 19,715,771 | | | | 30.2% | |
Charles Bland (6) | | | 38,826 | | | | * | |
Peter Chung (7) | | | 1,297,016 | | | | 1.9% | |
Stephen Daly (8) | | | 18,463 | | | | * | |
Geoffrey Ribar (9) | | | 14,614 | | | | * | |
Gil Van Lunsen (10) | | | 20,875 | | | | * | |
John Croteau (11) | | | 268,938 | | | | * | |
Robert McMullan (12) | | | 45,369 | | | | * | |
Robert Dennehy (13) | | | 104,634 | | | | * | |
Vivek Rajgarhia (14) | | | 45,612 | | | | * | |
Preetinder Virk (15) | | | 42,180 | | | | * | |
All directors and executive officers as a group (15 persons) (16) | | | 21,689,863 | | | | 32.4% | |
| | | | | | | | | | | | | | |
| | | Shares Beneficially Owned |
| Name of Beneficial Owner | | Shares | | Percentage |
| Greater than 5% Stockholders: | | | |
| John Ocampo and affiliates (1) | | 18,328,938 | | | 26.3 | % |
| The Vanguard Group (2) | | 4,617,635 | | | 6.6 | % |
| BlackRock, Inc. (3) | | 3,738,866 | | | 5.4 | % |
| Directors and Named Executive Officers: | | | | |
| John Ocampo (1) | | 18,328,938 | | | 26.3 | % |
| Susan Ocampo (1) | | 18,328,938 | | | 26.3 | % |
| Charles Bland (4) | | 35,489 | | | * |
| Peter Chung (5) | | 890,811 | | | 1.3 | % |
| Geoffrey Ribar (6) | | 20,898 | | | * |
| John Ritchie (7) | | 1,725 | | | * |
| Gil VanLunsen (8) | | 35,038 | | | * |
| Stephen Daly | | 188,014 | | | * |
| John Kober (9) | | 48,385 | | | * |
| Ambra Roth (10) | | 12,607 | | | * |
| Donghyun Thomas Hwang (11) | | 90,604 | | | * |
| Robert Dennehy | | 71,244 | | | * |
| All directors and executive officers as a group (13 persons) (12) | | 19,725,221 | | | 28.3% |
* Represents beneficial ownership of less than 1%.
(1)Represents 18,328,938 shares beneficially owned by various family trusts affiliated with John and Susan Ocampo. Mr. and Mrs. Ocampo are the co-trustees of each of the family trusts and hold voting and dispositive power over the shares held in the family trusts.
(2)Based solely on the Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group, Inc. (“Vanguard”), which indicates that Vanguard has shared voting power over 108,476 shares, sole dispositive power over 4,470,065 shares and shared dispositive power over 147,570 shares. Vanguard’s address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(3)Based solely on the Schedule 13G filed with the SEC on February 2, 2021 by BlackRock, Inc. (“BlackRock”), which indicates that BlackRock has sole voting power over 3,677,885 shares and sole dispositive power over 3,738,866 shares. BlackRock’s address is 55 East 52nd Street, New York, New York, 10055.
(4)Includes 2,093 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(5)Includes 530,293 shares beneficially owned by Summit Partners Private Equity Fund VII-A, L.P., 318,502 shares beneficially owned by Summit Partners Private Equity Fund VII-B, L.P., 1,416 shares beneficially owned by Summit Investors I, LLC and 100 shares beneficially owned by Summit Investors I (UK), L.P. Summit Partners, L.P. is the managing member of Summit Partners PE VII, LLC, which is the general partner of Summit Partners PE VII, L.P., which is the general partner of each of Summit Partners Private Equity Fund VII-A, L.P. and Summit Partners Private Equity Fund VII-B, L.P. Summit Master Company, LLC is the managing member of Summit Investors Management, LLC, which is the manager of Summit Investors I, LLC, and the general partner of Summit Investors I (UK), L.P. Summit Master Company, LLC, as the managing member of Summit Investors Management, LLC, has delegated investment decisions, including voting and dispositive power, to Summit Partners, L.P. and its Investment Committee responsible for voting and investment decisions with respect to MACOM Technology Solutions Holdings, Inc. Summit Partners, L.P., through a two-person Investment Committee responsible for voting and investment decisions with respect to MACOM Technology Solutions Holdings, Inc. currently composed of Scott C. Collins and Peter Y. Chung, has voting and dispositive authority over the shares held by each of these entities and therefore may be deemed to beneficially own such shares. Also includes 40,500 shares held by Mr. Chung, including 2,093 shares issuable within 60 days of December 31, 2021 upon the vesting and settlement of restricted stock units previously granted to Mr. Chung, each of which he holds for the benefit of Summit Partners, L.P., which he has empowered to determine when the underlying shares will be sold and which is entitled to the proceeds of any such sales. Mr. Chung is a member of Summit Master Company, LLC, which is the general partner of Summit Partners, L.P. Accordingly, Summit Partners, L.P. and Summit Master Company, LLC may be deemed indirect beneficial owners of the shares, restricted stock units and underlying shares held in the name of Mr. Chung. Summit Partners, L.P., Summit Master Company, LLC, each of the Summit entities mentioned above and Messrs. Collins and Chung, each disclaim beneficial ownership of the shares, restricted stock units and underlying shares held in the name of Mr. Chung except to the extent of their pecuniary interest therein. The address of each of these entities is 222 Berkeley Street, 18th Floor, Boston, MA 02116.
(6)Includes 2,093 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(7)Includes 1,725 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(8)Includes 2,093 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(9)Includes 6,907 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(10)Includes 613 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
(11)Includes 15,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 31, 2021.
(12)Includes 15,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 31, 2021 and 17,617 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 31, 2021.
| * | Represents beneficial ownership of less than 1%.
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| CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS |
| (1) | Represents 19,715,771 shares beneficially owned by various family trusts affiliated with John and Susan Ocampo. Mr. and Mrs. Ocampo are theco-trustees of each of the family trusts and hold voting and dispositive power over the shares held in the family trusts.
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| (2) | Based solely on the Schedule 13G/A filed with the SEC on March 12, 2018 by FMR LLC (“FMR”), which indicates that FMR has sole voting power over 187,700 shares and sole dispositive power over 9,660,787 shares, Abigail P. Johnson has sole dispositive power over 9,660,787 shares and Select Semiconductors Portfolio has sole voting power over 3,448,500 shares. FMR’s address is 245 Summer Street, Boston, Massachusetts 02210.
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| (3) | Based solely on the Schedule 13G filed with the SEC on February 14, 2018 by Capital Research Global Investors (“Capital”), which indicates that Capital has sole voting power and sole dispositive power over 3,986,862 shares. Capital’s address is 333 South Hope Street, Los Angeles, California 90071.
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| (4) | Based solely on the Schedule 13G/A jointly filed with the SEC on December 10, 2018 by Ameriprise Financial, Inc. (“AFI”), Columbia Management Investment Advisers, LLC (“CMIA”), Ameriprise International Holdings GmbH (“AIHG”), Threadneedle Asset Management Holdings Sarl (“TAMH”), Threadneedle Holdings Limited (“THL”), TAM UK Holdings Limited (“TUHL”), Threadneedle Asset Management Holdings Limited (“TAMHL”), TC Financing Ltd. (“TCFL”) and Threadneedle Asset Management Limited (“TAML”) (collectively, the “AFI Reporting Persons”), which indicates that AFI has shared voting power over 3,748,219 shares and shared dispositive power over 3,797,308 shares, CMIA has shared voting power over 2,313,682 shares and shared dispositive power over 2,324,182 shares and each of AIHG, TAMH, THL, TUHL, TAMHL, TFCL and TAML have shared voting power over 1,434,537 shares and shared dispositive power over 1,473,114 shares. The address of AFI is 145 Ameriprise Financial Center, Minneapolis, Minnesota 55474. The address of CMIA is 225 Franklin St., Boston, Massachusetts 02110. The address of AIHG is Lambrigger Treuhand AG, Industriestrasse 49, 6300 Zug, Switzerland. The address of TAMH is 19 rue de Bitbourg, Luxembourg, 1273. The address of each of THL, TUHL, TAMHL, TCFL and TAML is Cannon Place, 78 Cannon Street, London, EC4N 6AG.
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| (5) | Based solely on the Schedule 13G filed with the SEC on February 9, 2018 by The Vanguard Group, Inc. (“Vanguard”), which indicates that Vanguard has sole voting power over 78,900 shares, shared voting power over 2,631 shares, sole dispositive power over 3,632,823 shares and shared dispositive power over 78,781 shares. Vanguard’s address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
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| (6) | Includes 10,500 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018 and 6,086 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018.
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| (7) | Shares beneficially owned include the following shares issuable upon the exercise of warrants that are currently exercisable: 792,454 shares beneficially owned by Summit Partners Private Equity FundVII-A, L.P., 475,960 shares beneficially owned by Summit Partners Private Equity FundVII-B, L.P., 2,116 shares beneficially owned by Summit Investors I, LLC and 149 shares beneficially owned by Summit Investors I (UK), L.P. Summit Partners, L.P. is the managing member of Summit Partners PE VII, LLC, which is the general partner of Summit Partners PE VII, L.P., which is the general partner of each of Summit Partners Private Equity FundVII-A, L.P. and Summit Partners Private Equity FundVII-B, L.P. Summit Master Company, LLC is the managing member of Summit Investors Management, LLC, which is the manager of Summit Investors I, LLC, and the general partner of Summit Investors I (UK), L.P. Summit Master Company, LLC, as the managing member of Summit Investors Management, LLC, has delegated investment decisions, including voting and dispositive power, to Summit Partners, L.P. and its Investment Committee responsible for voting and investment decisions with respect to MACOM Technology Solutions Holdings, Inc. Summit Partners, L.P., through atwo-person Investment Committee responsible for voting and investment decisions with respect to MACOM Technology Solutions Holdings, Inc. currently composed of Martin Mannion and Peter Y. Chung, has voting and dispositive authority over the shares held by each of these entities and therefore may be deemed to beneficially own such shares. Also includes 26,337 shares held by Mr. Chung, including 6,086 shares issuable within 60 days of December 28, 2018 upon the vesting and settlement of restricted stock units previously granted to Mr. Chung, each of which he holds for the benefit of Summit Partners, L.P., which he has empowered to determine when the underlying shares will be sold and which is entitled to the proceeds of any such sales. Mr. Chung is a member of Summit Master Company, LLC, which is the general partner of Summit Partners, L.P. Accordingly, Summit Partners, L.P. and Summit Master Company, LLC may be deemed indirect beneficial owners of the shares, restricted stock units and underlying shares held in the name of Mr. Chung. Summit Partners, L.P., Summit Master Company, LLC, each of the Summit entities mentioned above and Messrs. Mannion and Chung, each disclaim beneficial ownership of the shares, restricted stock units and underlying shares held in the name of Mr. Chung except to the extent of their pecuniary interest therein. The address of each of these entities is 222 Berkeley Street, 18th Floor, Boston, MA 02116.
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| (8) | Includes 6,086 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018.
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| (9) | Includes 6,086 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018.
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| (10) | Includes 6,086 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018.
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| (11) | Includes 180,330 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018.
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| (12) | Includes 20,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018.
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| (13) | Includes 55,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018.
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| (14) | Includes 10,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018 and 3,124 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018.
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| (15) | Includes 20,000 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018.
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| (16) | Includes 331,430 shares issuable upon the exercise of stock options that may be exercised within 60 days of December 28, 2018, 36,251 shares issuable upon vesting and settlement of restricted stock units scheduled to occur within 60 days of December 28, 2018 and 1,270,679 shares issuable upon the exercise of currently exercisable warrants.
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
We describe below transactions and series of similar transactions to which we were a party since the beginning of our last fiscal year or will be a party in the future, and in which:
•the amounts involved exceeded or will exceed $120,000; and
•any of our directors, executive officers or beneficial owners of more than 5% of any class of our voting securities, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.
Indemnification of Officers and Directors
Our fifth amended and restated certificate of incorporation and third amended and restated bylaws (“Bylaws”) limit the liability of each of our directors and provide that we will indemnify each of our directors and officers to the fullest extent permitted by Delaware law. Our Bylaws also permit us to secure insurance on behalf of any officer or director for any liability arising out of
his or hertheir actions in connection with their services to us, regardless of whether our Bylaws permit such indemnification. In addition, we have entered into separate indemnification agreements with each of our directors and certain of our officers. These agreements, among other things, provide that we will indemnify our directors and officers for certain expenses (including attorneys’ fees), judgments, fines and settlement amounts reasonably incurred by such person in any action or proceeding, including any action by or in our right, on account of any services undertaken by such person on our behalf or that person’s status as our director or officer.
Acquisition of Nitronex, LLC
In February 2014, we acquired Nitronex, LLC, f/k/a Nitronex Corporation (“Nitronex”) (the “Nitronex Acquisition”). Prior to the Nitronex Acquisition, 100% of the outstanding membership interests in Nitronex were owned by GaAs Labs (a stockholder of the Company and an affiliate of our directors, Mr. and Mrs. Ocampo). We made a cash payment to GaAs Labs of $26.1 million at the closing of the Nitronex Acquisition for all of the outstanding ownership interests of Nitronex. The purchase price included $3.9 million held on account by a third-party escrow agent pending any claims by us in connection with representation and warranties made by GaAs Labs in the Nitronex Acquisition. The indemnification period expired in August 2015, at which point all but $500,000 of the escrow fund was released to GaAs Labs and the remainder was retained by the escrow agent pending final resolution of an outstanding indemnity claim. The indemnity claim was resolved during fiscal year 2018 and the remaining escrow funds were released to GaAs Labs.
Cadence Design Systems, Inc.
Cadence provides us with certain engineering licenses on an ongoing basis. Mr. Ribar, who joined our board of directors on March 22, 2017, served as an officer of Cadence through September 30, 2017 and served as a Senior Advisor to Cadence until March 31, 2018. During fiscal year 2018, we made payments of $4.1 million to Cadence prior to March 31, 2018.
Second Amended and Restated Investor Rights Agreement
We are party to an investors’ rights agreement, as amended and restated on February 28, 2012 and further amended on May 20, 2013, February 2, 2015 and June 6, 2018 (the “IRA”), with a group of our stockholders that includes entities affiliated with Mr. and Mrs. Ocampo, who are both members of our board of directors and beneficial owners of more than 5% of a class of our voting securities, and including certain investment funds affiliated with Summit Partners, L.P., which is affiliated with another of our directors, Mr. Chung. Subject to the terms and conditions of the IRA, these stockholders have registration rights with respect to the shares of our capital stock or warrants they, or certain of their affiliates, hold, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing.
Policies and Procedures for Related Person Transactions
We do not currently have a formal, written policy or procedure for the review and approval of related person transactions. However, our audit committee charter provides that our audit committee is required to review and approve or ratify any related person transactions, as defined under RegulationS-K Item 404. Our codeCode of conductBusiness Conduct and ethicsEthics also prohibits our directors and officers from engaging in a conflict of interest transaction without disclosure to and approval from the board of directors or one of its committees. Each of the related person transactions described above was reviewed and either approved or ratified by our audit committee, and we intend to follow this practice for any future related person transactions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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| DELINQUENT SECTION 16(A) REPORTS |
Section 16(a) of the Exchange Act requires our directors, officers and beneficial holders of more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. As a practical matter, we assist our directors and executive officers by monitoring transactions and completing and filing Section 16 reports on their behalf. To our knowledge, based solely on a review of the copies of such reports and written representations from our executive officers and directors that no other reports were required, and except as otherwise disclosed in our 2018 annual proxy statement, we believe all required reports under Section 16(a) of the Exchange Act of our directors, executive officers and beneficial holders of more than 10% of a registered class of our equity securities were timely filed since the beginning of fiscal year 2018,2021 and prior years, except as previously disclosed, and other than one late Form 4 filed on March 8, 2018 on behalffilings for each of Messrs. Daly, Bland, Chung, Ribar, VanLunsen and Hwang and Dr. Carlson regarding one transaction each and Form 4 filings for Mr. Hwang to report open market purchasesDennehy regarding seven separate transactions, all of which due to a clerical error on Mr. Hwang’s broker’s part, were not timely communicated to the Company. The Company addressed this matter with the broker and believes that the error has been resolved.subsequently filed.
List of Stockholders of Record
In accordance with Delaware law, a list of the names of our stockholders of record entitled to vote at the Annual Meeting will be available for ten days prior to the Annual Meeting for any purpose germane to the meeting, between the hours of 9:00 a.m. and 4:30 p.m. local time at our principal executive offices at 100 Chelmsford Street, Lowell, Massachusetts 01851. This list will also be available at the Annual Meeting.
If you would like to view the list of stockholders, please contact our investor relations department by email at ir@macom.com or by phone at (978) 656-2500, to schedule an appointment.
Stockholder Proposals for Inclusion in
20202023 Proxy Statement
To be considered for inclusion in next year’s proxy statement and form of proxy, stockholder proposals for the
20202023 Annual Meeting of Stockholders must be received at our principal executive offices no later than the close of business on September
18, 2019,16, 2022, unless the date of the
20202023 Annual Meeting of Stockholders is more than 30 days before or after
February 28, 2020,March 3, 2023, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials. All proposals should be addressed to the following address: General Counsel, MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851.
Stockholder Proposals for Presentation at
20202023 Annual Meeting of Stockholders
For any proposal that is not submitted for inclusion in next year’s proxy statement, but is instead sought to be presented directly at the 20202023 Annual Meeting of Stockholders, stockholders are advised to review our Bylaws as they contain requirements with respect to advance notice of stockholder proposals not intended for inclusion in our proxy statement and director nominations. To be timely, a stockholder’s notice must be received by our General Counsel at our principal executive offices not less than 45 days or more than 75 days prior to the first anniversary of the date we first mailed our proxy materials or Notice of Internet Availability of Proxy Materials (whichever is earlier) for the prior year’s Annual Meeting of Stockholders. Accordingly, any such stockholder proposal must be received between October 31, 2022 and November 2, 2019 and December 2, 2019.30, 2022. However, in the event that the 20202023 Annual Meeting of Stockholders is convened more than 30 days prior to or delayed by more than 30 days after February 28, 2020,March 3, 2023, notice by the stockholder to be timely must be received not later than the close of business on the later of the 90th90th day prior to such annual meeting or the 10th10th day following the date on which public announcement of the date of the 20202023 Annual Meeting of Stockholders is made. Copies of the pertinent Bylaw provisions are available on request to the following address: General Counsel, MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851. As required by our Bylaws, any stockholder submitting a director nomination must include the name, biographical information and other relevant information relating to the recommended director nominee, including, among other things, information that would be required to be included in the proxy statement filed in accordance with applicable rules under the Exchange Act and the written consent of the director nominee to be named as a nominee and to serve as a director if elected, among other requirements set forth in our Bylaws.
Consideration of Stockholder-Recommended Director Nominees
Our nominating and governance committee will consider director nominee recommendations submitted by our stockholders. In the event of any stockholder recommendations, the nominating and governance committee will evaluate the persons recommended in the same manner as other candidates. Stockholders who wish to recommend a director nominee must submit their suggestions to the following address: Chairperson of Nominating and Governance Committee, Attn: General Counsel, MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851.
Stockholder Communications with the Board of Directors
Stockholders may contact our board of directors as a group or any individual director by sending written correspondence to the following address: Board of Directors – MACOM Technology Solutions Holdings, Inc.,
Attn: General Counsel, 100 Chelmsford Street, Lowell, Massachusetts 01851. Stockholders should clearly specify in each communication the name(s) of the group of directors or the individual director to whom the communication is addressed. The General Counsel will review all correspondence and will forward to the board of directors or an individual director a summary of the correspondence received and copies of correspondence that the General Counsel determines requires the attention of the board of directors or such individual director. The board of directors and any individual director may at any time request copies and review all correspondence received by the General Counsel that is intended for the board of directors or such individual director.
Delivery of Materials to Stockholders with Shared Addresses
We have adopted a procedure, approved by the SEC, called “householding.” Under this procedure, any stockholder, including both stockholders of record and beneficial holders who own their shares through a broker, bank or other nominee, who share an address with another such holder of our common stock are only being sent one Notice of Internet Availability of Proxy Materials or set of proxy materials, unless such holders have provided contrary instructions. Householding helps us reduce printing and postage cost associated with the distribution of proxy materials and helps to preserve natural resources. We will promptly deliver a separate copy of the Notice of Internet Availability of Proxy Materials or set of proxy materials to you upon written or oral request. If you wish to receive a separate copy of these materials or if you are receiving multiple copies and would like to receive a single copy, please contact our investor relations department by phone at (978)656-2500, or by writing to Investor Relations, MACOM Technology Solutions Holdings, Inc., 100 Chelmsford Street, Lowell, Massachusetts 01851.
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MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
100 CHELMSFORD STREET
LOWELL, MA 01851
| | VOTE BY INTERNET -www.proxyvote.com
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 the meeting date. 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.
VOTE BY TELEPHONE - 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 the meeting date. 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.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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| | E54757-P15825 | | KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. | | For
All | | Withhold All | | For All
Except | | | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below for which you withhold the authority to vote. | | | | | | | | | | | | |
| | The Board of Directors recommends you vote FOR each of the director nominees in the following proposal:
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| | 1. The election of the three Class I directors nominated by the Company’s board of directors and named in the accompanying proxy materials to serve until the 2022 Annual Meeting of Stockholders.
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| | Nominees:
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| | 01) Peter Chung
02) Geoffrey Ribar
03) Gil Van Lunsen
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| | The Board of Directors recommends you vote FOR the following proposal: | | | | | | | | | | For | | Against | | Abstain | | | | | | |
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| | 2.Advisory vote to approve the compensation paid to our Named Executive Officers.
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| | The Board of Directors recommends you vote 3 YEARS on the following proposal: | | 1 Year | | 2 Years | | 3 Years | | Abstain | | | | | | |
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| | 3. Advisory vote on the frequency of future advisory votes to approve the compensation of our Named Executive Officers.
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| | The Board of Directors recommends you vote FOR the following proposal: | | For | | Against | | Abstain | | | | | | |
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| | 4. Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 27, 2019.
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| | NOTE: The proxies, in their discretion, are authorized to vote on such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.
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| | For address changes and/or comments, please check this box and write them on the back where indicated. | | | | | | ☐ | | | | | | | | | | | | | | | | | | | | |
| | Please indicate if you plan to attend this meeting.
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| | No
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| | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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| | Signature [PLEASE SIGN WITHIN BOX] | | Date
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The 2019 Notice and Proxy Statement and 2018 Annual Report are available at www.proxyvote.com.
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E54758-P15825
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| | MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC.
Annual Meeting of Stockholders
February 28, 2019 3:00 P.M. Eastern Time
This proxy is solicited by the Board of Directors
The stockholder(s) hereby appoint(s) John Croteau and Robert McMullan, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of MACOM TECHNOLOGY SOLUTIONS HOLDINGS, INC. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 3:00 P.M. Eastern Time on February 28, 2019, at the Radisson Hotel located at 10 Independence Drive, Chelmsford, Massachusetts 01824, and any adjournment or postponement thereof.
The shares represented by this proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations.
If voting by mail, please sign, date and mail your proxy card back in the envelope provided as soon as possible.
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| | | | | | | | Address Changes/Comments: | | | | | | | | |
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| | | | | | | | (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) | | | | | | |
| | | | | | | | Continued and to be signed on reverse side
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