Director Compensation Policy for Fiscal 20152016.

On December 4, 2015, the Board of Directors, on recommendation of the Compensation Committee, approved a new compensation policy for the Company’s non-employee directors, the terms of which became effective as of January 1, 2016 (the “New Director Compensation Policy”). Pursuant to the New Director Compensation Policy, each director is entitled to the following compensation for their service as a member of the Board:

Cash retainers are paid quarterly in arrears. Equity awards are granted to each director then in office on January 15th (or the first trading day thereafter) of the calendar year following the calendar year of service to which the award relates and will be fully vested when granted. The first equity awards payable under the New Director Compensation Policy were payable in January 2017, as described below, with respect to services performed in the 2016 calendar year.

If a non-employee director serves in the corresponding position for only a portion of the year, the cash retainers will be pro-rated (with the proration based on the number of calendar days in the quarter that the director served as a non-employee director or held the particular position, as the case may be). Similarly, in the event a person serves as a non-employee director or Chairman for less than a full plan year, the equity compensation is prorated based on the number of calendar months the director served as a non-employee director or Chairperson during the plan year.

Equity Compensation.In accordance with the New Director Compensation Policy, on January 17, 2017, each director, except Mr. Coringrato, received 6,000 shares of Company Common Stock for services rendered in the 2016 calendar year (calculated by dividing the $54,000 equity award to which each director is entitled under the New Director Compensation Policy by $9.00, which was the closing share price of the Company’s Common Stock on January 17, 2017). Mr. Coringrato, who joined the Board in June 2016, received a pro-rated award of 3,500 shares of Company Common Stock under the New Director Compensation Policy (calculated by dividing his prorated equity award of $31,500 by the $9.00 closing share price of the Company’s Common Stock on January 17, 2017). In addition, pursuant to the New Director Compensation Policy, Dr. Fine received an additional 4,722 shares of the Company’s Common Stock for his service as Chairman of the Board (calculated by dividing the $42,500 equity award to which the Chairman is entitled under the New Director Compensation Policy by the $9.00 closing share price of the Company’s Common Stock on January 17, 2017). These shares were all granted under the Company’s 2012 Equity Incentive Plan.

For services rendered in calendar year 2015, director equity grants, reflected in the Director Compensation Table above, were governed by the Amended 2007 Plan. Pursuant to the Amended 2007 Plan, each non-employee director serving as a director at the end of a plan year iswas entitled to receive an annual stock grant with a grant date value equal to $40,000; provided, that in the event a person servesserved as a non-employee director for less than a full plan year, such amount iswas prorated based on the number of whole calendar months the director served as a non-employee director during the plan year.  Additionally, for a non-employee director who iswas a lead independent director during such plan year, the grant date value of the annual stock award amount iswas increased by $5,000; provided, that in the event a non-employee director iswas a lead independent director for less than a full plan year, such amount shall bewas prorated based on the number of days the director served as a lead independent director for the plan year. The number of shares of Common Stock which each director iswas entitled to receive iswas calculated by dividing $40,000 by the closing price per share of Common Stock on the January 2^nd (or the first trading day thereafter) immediately following each plan year (which is defined as each 12-month period beginning on January 1 and ending on December 31).

On January 4, Upon approval by shareholders of the amended and restated 2012 Equity Incentive Plan at the 2016 in accordance with the termsAnnual Meeting of Shareholders, no additional shares are issuable under the Amended 2007 Plan, eachand, pursuant to the New Director Compensation Policy, all future director received 6,667 shares of Company Common Stock for services rendered in fiscal 2015. In addition, on December 4, 2015, the Board, on recommendation of the Compensation Committee, approved additional grants of Company Common Stock equal to $10,000 to each of Mr. Bogomolny and Dr. Fine for their service as Chairmen during fiscal 2015, with each such grant toequity awards will be made on January 4, 2015 based on the closing price of the Common Stock on such date. Accordingly, on January 4, 2016, Mr. Bogomolny and Mr. Fine each received an additional 1,666 shares of Company Common Stock, which were granted under the Company’s 2012 Equity Incentive Plan.

If shareholders approve the amendments to the 2012 Equity Incentive Plan, no new awards will be granted under the Amended 2007 Plan. If shareholders do not approve the amendments to the 2012 Equity Incentive Plan, we will continue to have the authority to grant awards under the Amended 2007 Plan.

Cash Compensation. Prior to January 1, 2016, the Company’s Outside Directors’ Cash Compensation Plan provided for the payment of cash compensation to non-employee directors for their participation at Board meetings, in amounts established, and periodically reviewed, by the Board. Each non-employee director received a meeting fee for each meeting of the Board that he attended (including telephonic meetings, but excluding execution of unanimous written consents). In addition, each non-employee director received a committee meeting fee for each meeting of a Board committee that he attended (including telephonic meetings, but excluding execution of unanimous written consents). The Board meeting fee was $4,000 and the committee meeting fee was $1,500; provided that the meeting fee for special telephonic Board meetings (i.e., Board meetings that are not regularly scheduled and in which non-employee directors typically participate telephonically) was $750 and the committee meeting fee for such special telephonic meetings was $600. Any non-employee director who is the chairman of a committee received an additional $750 for each regularly scheduled meeting of the committee that he chaired, and an additional $200 for each special telephonic meeting of such committee.

The Outside Directors’ Cash Compensation Plan was terminated effective January 1, 2016 in connection with the approval of the New Director Compensation Policy described below.

above, and all cash compensation paid to directors subsequent to January 1, 2016 was paid pursuant to the terms of the New Director Compensation Policy.

No director who is also an employee of the Company receives compensation for services rendered as a director.

Director Compensation Policy Effective January 1, 2016Stock Ownership and Holding Requirements.

In September 2015,During fiscal 2016, we adopted a stock ownership policy for directors and executive officers. We believe that this new policy will align the Compensation Committee engaged Compensiainterests of our directors with those of our shareholders by requiring directors to conducthave direct ownership in shares of our Common Stock. The policy requires each of our non-employee directors to own shares of our Common Stock having a market assessment ofvalue equal to at least three times the annual cash retainer they receive (excluding retainers for committee members and chairpersons). Each director payis required to be in compliance with the required minimum ownership levels compared to the Company’s Peer Group. For more information regarding the Company’s Peer Group, see “Compensation Discussion and Analysis — The Company’s Annual Compensation Decision-Making Process.” Based on Compensia’s findings, which were presented to the Compensation Committee in September and October 2015, on December 4, 2015, the Board of Directors, on recommendationwithin five years after adoption of the Compensation Committee, approved a new compensation policy, for the Company’s non-employee directors, the terms of which became effective as of January 1, 2016 (the “New Director Compensation Policy”). Pursuantand is required to the New Director Compensation Policy, each director will be entitled to the following compensation for their service as a memberretain 50% of the Board:net after-tax shares received in respect of equity awards until he is in compliance.

Cash retainers will be paid quarterly in arrears. Equity awards will be granted on January 15th (or the first trading day thereafter) of the calendar year following the calendar year of service to which the award relates and will be fully vested when granted. The first equity award under the New Director Compensation Policy will be made in January 2017 (for service in 2016). The equity award for 2015 service was granted in January 2016 pursuant to the Amended 2007 Plan described above.

If a non-employee director serves in the corresponding position for only a portion of the year, the cash retainers will be pro-rated (with the proration based on the number of calendar days in the quarter that the director served as a non-employee director or held the particular position, as the case may be). Similarly, in the event a person serves as a non-employee director or Chairman for less than a full plan year, the equity compensation is prorated based on the number of whole calendar months the director served as a non-employee director or Chairperson during the plan year.

The Board has the right to amend the New Director Compensation Policy from time to time.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes the material elements of the Company’s executive compensation program and analyzes the compensation decisions made for the executive officers included in the Summary Compensation Table (the “Named Executive Officers”) for fiscal 2016.

2016 Named Executive Officers

Our Named Executive Officers for fiscal 2016 were:

Because only three individuals served as our executive officers at any time during fiscal 2016, we have only three Named Executive Officers for fiscal 2016. Mr. Kim replaced Mr. Weinswig as our Chief Financial Officer effective June 20, 2016, and as a result this Compensation Discussion and Analysis focuses on the compensation paid or awarded to Messrs. Rittichier and Kim, our two Named Executive Officers who remain employed and are responsible for driving the Company’s performance.

We believe fiscal 2016 was a successful and transformative year for EMCORE. In July 2016, we paid a special cash dividend of $1.50 per share, returning approximately $85M of cash to our shareholders since June 2015. During fiscal year 2016, we also enhanced our Mixed-Signal Optics strategy to better position the Company to compete in growth markets. Throughout the year we saw steadily improving financial results from continuing operations, resulting primarily from improved manufacturing efficiency and strength in customer orders. Some of our efficiencies were driven by increased automation and the ramp up of our Six Sigma and Lean manufacturing initiatives. These improved financial results occurred notwithstanding weakness in the 2.5G GPON market during the year, as described below.

The table below sets forth some of our key financial metrics for fiscal 2016 compared to fiscal 2015 ($ in millions):

Executive Compensation Program Highlights

Highlights of our executive compensation program include:

Objectives and Components of the Company’s Executive Compensation Program

The Company’s executive compensation program is designed to:

TheRole of Shareholder Say-on-Pay Votes

Each year, we provide our shareholders the opportunity to cast an advisory vote on our executive compensation program. This annual vote is known as the “say-on-pay” proposal. At the Company’s 2016 Annual Meeting of Shareholders held on March 11, 2016, approximately 50.1% of the votes cast on the say-on-pay proposal at that meeting were voted in favor of the proposal.

After considering the views expressed by shareholders in the say-on-pay proposal, the Compensation Decision-Making ProcessCommittee determined to revisit our executive compensation practices. Determined to more fully understand and address shareholder concerns following our 2016 Annual Meeting of Shareholders, the Compensation Committee increased our outreach and engagement with shareholders. Our outreach efforts included discussions regarding the Company’s executive compensation philosophy and objectives as follows:

In addition, during these shareholder meetings, we discussed our corporate governance policies that we have implemented to help us achieve our executive compensation objectives. Some of the key policies include:

Since the 2016 Annual Meeting of Shareholders, we sought meetings with substantially all of our institutional shareholders who held more than 0.5% of our outstanding shares at the time, and held meetings (in-person where practical) with more than 60 of our institutional shareholders, representing at least 34% of our outstanding shares as of September 30, 2016. In general, our shareholders reacted positively to the corporate governance changes we have implemented. We noted any additional concerns expressed by our shareholders in these meetings and reviewed them with the Compensation Committee and the full Board.

The Compensation Committee, under the leadership of its new Chairman, Mr. Jackson, and with a new and different composition than at the time of the Board2016 Annual Meeting of DirectorsShareholders, made several changes to our executive compensation program to address the concerns expressed by our shareholders in the say on pay proposal and during our one-on-one meetings. We believe that these changes are consistent with emerging trends in executive compensation best practices and strengthen the pay for performance aspects of our compensation program.

Investor Feedback Based on a review by the Compensation Committee, which included consideration of recommendations of Compensia and feedback from our shareholders, the Compensation Committee has taken the following actions:
	What We Heard		Action Taken
	Compensation for our executive officers should be heavily weighted towards performance, and 100% of long term-equity awards should not vest solely based on continued employment		Our Compensation Committee worked with Compensia, its independent compensation consultant, to develop the framework for a new performance-based long-term equity award program. Beginning with the initial equity grant made to our new Chief Financial Officer in fiscal 2016 and early fiscal 2017, at least 50% of the number of shares subject to equity awards granted to our Named Executive Officers are intended to consist of performance-based restricted stock units that will vest based on our relative total shareholder return over a three-year performance period.
			Continued with our performance-based annual incentive program design, which resulted in our Chief Executive Officer receiving a fiscal 2016 bonus of $39,000, which was only 12% of his target bonus opportunity and approximately $156,000 less than the bonus he earned for fiscal 2015.
	No long-term equity award installments should be fully vested on the grant date		Prior to shareholders expressing concerns about the vesting schedule used for our equity awards, our Chief Executive Officer was granted a time-based equity award for fiscal 2016 that vested 25% on the grant date and 25% in three equal annual installments on the first three anniversaries of the grant date.  In response to shareholder concerns and at the request of the Company, our Chief Executive Officer has agreed to hold until his termination of employment with the Company, 100% of the net-after tax shares received from the 25% tranche that was fully vested on the grant date.  It is also the Compensation Committee’s current intention that no portion of the Company’s future equity awards will vest on an immediate basis.  To that end, one of the amendments we propose to make to the 2012 Equity Incentive Plan would require substantially all awards granted under the 2012 Equity Incentive Plan, as amended, to have a minimum vesting period of one year and would, subject to the Compensation Committee’s discretion to accelerate awards, prohibit any portion of an award to vest earlier than the first anniversary of the grant date of the award.
			The initial equity grants made to our Chief Financial Officer consisted of an equal number of time- and performance-based stock units. The time-based stock units vest in equal annual installments on the first five anniversaries of his hire date and the performance-based stock units have a three-year performance period.
			The equity grant made to our Chief Executive Officer for fiscal 2017 consisted of approximately 59% performance-based stock units that have a three-year performance period and 41% time-based stock units that vest in equal annual installments on the first four anniversaries of the grant date.
	Our compensation-related corporate governance practices need to be improved		Introduced a new clawback policy that applies to all of the Named Executive Officers.
			Introduced a new stock ownership policy with a 3x salary ownership requirement for our Chief Executive Officer and a 1x salary ownership requirement for our Chief Financial Officer.  Executive officers are required to retain 50% of the net after-tax shares received in respect of equity awards until they are in compliance.
			Expanded our anti-pledging policy to also prohibit hedging transactions.

Role of the Compensation Committee

Pursuant to its charter, the Compensation Committee has the authority to determine the amount of compensation given to each of the Named Executive Officers. The Compensation Committee approves the structure of our executive compensation program, and is responsible for setting and administering policies that governour equity compensation plans, including approving grants of awards under the Company’s executive compensation programs.  Following the end of each fiscal year,plans. In performing its duties, the Compensation Committee reviewsis authorized to consider the Company’s performancerecommendations of our Chief Executive Officer when determining the compensation of the other Named Executive Officers.

The elements of our executive compensation program and the performance ofcompensation amounts payable thereunder to each Named Executive Officer were approved by the Compensation Committee. All Compensation Committee members are independent under applicable Nasdaq rules, and, except for recommendations made by Mr. Rittichier with respect to the prior fiscal year, taking into account compensation of executives at the Company’s Peer Group, together withother Named Executive Officers (other than himself), no Named Executive Officers had any role in determining the resultscompensation of the shareholders’ advisory vote on executive compensation at the previous annual meetingNamed Executive Officers.

Role of shareholders. Until December 15, 2014, the Company’s Peer Group was: BigBand Networks, Exar, Extreme Networks, Infinera, Integrated Silicon Solution, Ixia, Mindspeed Technologies, NeoPhotonics, Oclaro, Oplink Communications, Opnext, and Vitesse Semiconductor. In December 2014,Compensation Consultant

Pursuant to its charter, the Compensation Committee engagedhas the authority to engage its own advisors to assist in carrying out its responsibilities. In fiscal 2016, the Compensation Committee retained Compensia, a national compensation consulting firm, to conduct a comprehensive reviewadvise it regarding the amount and types of compensation that we provide to our Named Executive Officers and how our compensation practices compared to the Company’s Peer Group, as well ascompensation practices of other companies. In particular, Compensia provided advice to the Compensation Committee and helped it develop the structure of our new performance-based long-term equity award program, provided recommendations on the compensation package for our new Chief Financial Officer, helped us develop our updated peer group of companies described below, and performed a comprehensive compensation survey utilizing the new Peer Group. The Compensation Committee wanted Compensia to review the Peer Group in light of the Company’s recent sale of its solar and telecommunication business divisions.  In performing its analysis, Compensia identified companies with similar revenues and market capitalizations to the Company post-sale in the communications equipment and semiconductor industry.  Compensia produced a report containing its analysis and recommendations, which was reviewed and approved by the Compensation Committee on December 15, 2014. The new Peer Group consists of the following companies:  Alliance Fiber Optic Product, Applied Micro Circuits, ANADIGICS, Applied Optoelectronics, AXT, Clearfield, Communications Systems, Exar, MaxLinear, Meru Networks, NeoPhotonics, Oclaro, Oplink Communications, Peregrine Semiconductor, Pericom Semiconductor, and Vitesse Semiconductor (Vitesse was acquired by Microsemi Corp. in April 2015).

At least every three years, the Compensation Committee also retains the services of a compensation consultant to assist in gathering a comprehensive set of comparative compensation data (all comparative market data is collectively referred to as the “Comparative Compensation Data”). In December 2014, the Compensation Committee engaged Compensia to conduct such a comprehensive survey, utilizing the Company’s new Peer Group. Compensia utilized data from public filings, compensation information reported in industry surveys and other available surveys in which the Company participated.  The analysis covered base salary, target bonus as a percent of salary, target total compensation, long term incentives and total direct compensation for each company in the Peer Group.  Compensia also analyzed current and projected future value of the Named Executive Officers’ equity holdings and their likelihood to encourage continued service to the Company, compared the Company’s three-year burn rate and overhang to that of the Peer Group, and summarized market compensation trends. Compensia’s analysis focused on Messrs. Rittichier and Weinswig, the two Named Executive Officers who remain employed by the Company. Based on Compensia’s analysis of the Comparative Compensation Data, the Company believes the total targeted direct compensation (which includes base salary, target annual incentive bonus and grant date value of long-term incentive awards)peer group for Messrs. Rittichier and Weinswig is at or below the median level of total targeted direct compensation paid by theKim. The members of the Peer GroupCompensation Committee considered input from Compensia as one factor in making decisions with respect to similarly situated executives.

executive compensation matters, along with information and analysis they received from management and their own judgment and experience.

The Compensation Committee regularly reviews the services provided by Compensia and performs an assessment at least annually on the independence of Compensia to determine whether the compensation consultant is independent. The Compensation Committee determined that Compensia is independent in providing the CompanyCompensation Committee with executive compensation consulting services and that Compensia’s work for the Committee did not raise any conflicts of interest, consistent with SEC rules and Nasdaq listing standards. In making this determination, the Compensation Committee reviewed information provided by Compensia on the following factors:

Having reviewed such factors, the Compensation Committee determined that it would be in the best interests of the Compensation Committee and of the Company to ratify and approve the engagement of Compensia as its independent compensation consultant. Compensia did not perform any services for the Company during the 20152016 fiscal year other than providing advice with respect to executive and director compensation.

At the Company’s 2015 Annual Meeting of Shareholders held on March 10, 2015,In addition to Compensia, the Company providedretained Radford, a part of Aon Hewitt, to conduct a competitive assessment and review of its shareholders withcompensation program and compensation levels. Radford’s work for the opportunity to cast an advisory vote on executive compensation (a “say-on-pay proposal”). Over 97% of the votes castCompany was focused on the say-on-pay proposal at that meeting were voted in favor of the proposal. The Compensation Committee believes this affirms shareholders’ supportcompensation of the Company’s approachnon-executive employees, and Radford was not engaged to provide any advice or recommendations on the amount or form of executive or director compensation. Accordingly,

Peer Companies

In December 2014, the Compensation Committee continuesengaged Compensia to use the same policies and principles when making decisions regarding executive compensation. The Compensation Committee will continue to consider the outcomeconduct a comprehensive review of the Company’s say-on-pay proposals whenpeer group of companies, as well as a comprehensive compensation survey utilizing the new peer group. At that time, the Compensation Committee wanted Compensia to review its peer group in light of the Company’s sale of its solar and telecommunication business divisions, which resulted in the Company becoming a smaller company. In performing its analysis, Compensia identified companies with similar revenues and market capitalizations to the Company post-sale in the communications equipment and semiconductor industry. Compensia produced a report containing its analysis and recommendations, which was reviewed and approved by the Compensation Committee on December 15, 2014. The December 2014 peer group consisted of the following companies: Alliance Fiber Optic Product, Applied Micro Circuits, ANADIGICS, Applied Optoelectronics, AXT, Clearfield, Communications Systems, Exar, MaxLinear, Meru Networks, NeoPhotonics, Oclaro, Oplink Communications, Peregrine Semiconductor, Pericom Semiconductor, and Vitesse Semiconductor.

In September 2016, the Compensation Committee again engaged Compensia to conduct a comprehensive review of the Company’s peer group of companies, as well as a comprehensive compensation survey utilizing the new peer group for Messrs. Rittichier and Kim. Our methodology for selecting our new peer group of companies was to (1) start with the December 2014 peer group, (2) screen out any companies that had been acquired since December 2014, (3) perform a revenue screen of the December 2014 peer group and other publicly traded communications equipment and semiconductor companies with revenues over the last four quarters that were approximately 0.5x to 2.5x the Company’s revenues over the same four quarters, (4) perform a market capitalization screen of the December 2014 peer group and other publicly traded communications equipment and semiconductor companies with 30-day average market capitalizations as of the beginning of September 2016 that were approximately 0.25x to 4x the Company’s 30-day average market capitalization over the same period (in order to take into account the impact of the special cash dividend we declared in July 2016), and (5) review the peer group of companies used in the prior year by certain proxy advisory firms for potential inclusion as peer group companies if they satisfied the revenue and market capitalization screens described above.

Our objective in selecting our new peer group of companies was to select a peer group where the Company’s revenue and market capitalization would approximate the 40^th to 50^th percentile of the peer group of companies. We also attempted to select peer companies that fit within the parameters of our revenue and market capitalization screen criteria described above, while still retaining the discretion to continue to include certain of the December 2014 peer group companies falling outside of these parameters that we believe have strong business similarities and against whom we compete for talent. Based on this methodology, we implemented the following changes to our peer group:

In September 2016, Compensia reviewed the compensation levels for each of Mr. Rittichier and Mr. Kim, utilizing the Company’s new September 2016 peer group. The analysis covered base salary, target bonus as a percent of salary, target total compensation, long term incentives and total direct compensation relative to each company in the September 2016 peer group. 

The purpose of the December 2014 and September 2016 compensation reviews was to provide the Compensation Committee with information on the compensation practices and program designs at peer companies. This information has been used by the Compensation Committee to inform its decision making futureprocess with respect to the compensation decisionsamounts for the Named Executive Officers.

However, given our practice of engaging in a comprehensive compensation survey and peer group review at least once every three years (rather than on an annual basis), the Compensation Committee does not rigidly adhere to a benchmarking strategy in setting compensation amounts for the Named Executive Officers. Instead, the peer group compensation information is used as one of the data points for the Compensation Committee to make subjective compensation decisions using its business judgment after considering a number of factors, including our objectives of attracting and motivating highly qualified executives, holding executives accountable and rewarding them for individual performance, and ensuring that compensation levels are externally competitive and internally equitable.

Based on itsthe September 2016 compensation review, the Compensation Committee believes that Mr. Rittichier’s base salary and total targeted direct compensation (which includes base salary, target annual incentive bonus and grant date value of long-term incentive awards) for fiscal 2016 were both significantly below the 25^th percentile level of base salary and total targeted direct compensation paid by the members of our peer group of companies to similarly situated executives. A prior compensation review performed by Compensia in 2014 yielded similar results. As described in more detail below, this significantly below 25^th percentile positioning was one of the factors that led the Compensation Committee to make equity grants to Mr. Rittichier in fiscal 2015 and 2016 that included immediately vested shares. In addition, in response to concerns raised by shareholders regarding the Company’s practice of granting immediately vested shares, and the findings of Compensia regarding Mr. Rittichier’s compensation relative to his peers, the Compensation Committee determined to increase Mr. Rittichier’s base salary effective in October 2016 and to increase the grant date value of his fiscal 2017 long-term equity award relative to the value of his equity award granted in fiscal 2016, while eliminating any immediate vesting related to the fiscal 2017 grant.

Based on the September 2016 compensation review, the Compensation Committee believes that Mr. Kim’s base salary and target annual incentive amounts established in his employment agreement were at approximately the 50th percentile level of the base salary and target annual incentive amounts paid by the members of our peer group of companies to similarly situated executives. As described in more detail below, the grant date value of Mr. Kim’s initial equity award, which was allocated 50% as a time-based equity award and 50% as a performance-based equity award, was set above the 75^th percentile of the grant date value of long-term incentive awards made by the members of our peer group of companies to similarly situated executives. This is largely because Mr. Kim’s initial equity award was structured as a “front loaded” long-term equity award intended to cover a period of two years. At this time, the Compensation Committee does not expect to make any additional equity awards to Mr. Kim in fiscal 2017 beyond the performance-based portion of his initial grant. Mr. Kim will be eligible to receive another regular annual equity grant based on our newly developed long term incentive compensation program starting in fiscal year 2018.We believe this “front loaded” two-year award structure was critical in attracting Mr. Kim to join the Company, and provided him with a meaningful equity incentive that links his interests to those of the Company’s performance and the performance of each Named Executive Officer for the prior fiscal year, the Comparative Compensation Data, when available, and the outcome of the Company’s say-on-pay vote, the Compensation Committee discusses and approves any potential base salary increases related to the current fiscal year and awards annual cash incentives and equity grants in respect of the prior fiscal year.shareholders.

Employment Agreements with Messrs. Rittichier and Weinswig

Kim

In an effort to further promote the retention of the Company’s Named Executive Officers, the Compensation Committee previously approved an executive employment agreementsagreement with each of the Company’s current NamedMr. Rittichier in connection with his appointment as our Chief Executive Officers, Messrs. RittichierOfficer effective January 3, 2015 and Weinswig.approved an executive employment agreement with Mr. Kim in connection with his appointment as our Chief Financial Officer effective June 20, 2016. Each employment agreement provides that the Named Executive Officer’s employment is “at-will” and may be terminated by the Named Executive Officer or the Company at any time with or without cause, subject only to the severance obligations that are discussed in greater detail under the “Executive Compensation - Potential Payments upon Termination or Change-in-Control” section of this Proxy Statement. Under the terms of each employment agreement, the initial base salary of each Named Executive Officer was established, as described in more detail below. The base salary of each Named Executive Officer will continue to be determined annually by the Compensation Committee, which may, in its sole and absolute discretion, increase the Named Executive Officer’s base salary, but may not decrease it below the initial base salary without the Named Executive Officer’s consent. In addition, each Named Executive Officer is entitled to participate in any of the Company’s annual bonus or pay-for-performance plans, (in the case ofwith Mr. Rittichier his employment agreement provides that he is entitled to a target annual cash bonus of 80% of his base salary)salary and Mr. Kim entitled to a target annual cash bonus of 50% of his base salary. Each Named Executive Officer will be eligible for equity awards under the Company’s equity award plans covering senior executives, in each case, as may be in effect from time to time and as approved by the Compensation Committee.Committee in its sole and absolute discretion. In the event a payment or benefit provided under the employment agreement would constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then such payment or benefit will be limited as provided in the employment agreement. None of the employment agreements provide for any tax “gross up” or similar payment for any excise taxes that may be triggered by the payment of any parachute payments.

Separation Agreementsand Release Agreement with the Former Named Executive Officers

Mr. Weinswig

On September 17, 2014,June 2, 2016, the Company announced that its then current Chief ExecutiveFinancial Officer, Dr. Hou, would terminateMark Weinswig, resigned from his employment withposition as Chief Financial Officer of the Company effective January 2, 2015. On the same date, the Company also entered into a Separation Agreement and General Release with Dr. Hou (the “Hou Separation Agreement”), pursuant to which,June 20, 2016. Mr. Weinswig resigned for “good reason” as of January 2, 2015, Dr. Hou ceased to serve as a director of the Company and as an officer or employeedefined under his existing employment agreement with the Company, and its affiliates. The Hou Separation Agreement provides Dr. Houbecame entitled to receive the severance benefits provided for under his existing employment agreement, which are discussed in greater detail under the “Executive Compensation - Potential Payments upon Termination or Change-in-Control” section of this Proxy Statement. However, the Company was able to successfully negotiate with paymentsMr. Weinswig and benefitshe agreed to (1) waive the accelerated vesting of his fiscal 2016 time-based restricted stock unit award that are consistent with the payments and benefits to which he was entitled pursuant to the terms of his employment agreement by reason of a termination without “cause” or for “good reason” (as these terms are defined in his employment agreement).

On December 11, 2014, the Company announced that Ms. Monica Van Berkel, its then current Chief Administration Officer, and Mr. Alfredo Gomez, its then current General Counsel, would terminate their employment with the Company. Ms. Van Berkel’s termination became effective on January 2, 2015, and Mr. Gomez’ termination became effective on February 27, 2015. On December 10, 2014, the Company also entered into a Separation Agreement and General Release with each of Ms. Van Berkel (the “Van Berkel Separation Agreement”) and Mr. Gomez (the “Gomez Separation Agreement”), which provide Ms. Van Berkel and Mr. Gomez with payments and benefits that are consistent with the payments and benefits to which they were entitled pursuant to the terms of their employment agreements by reason of a termination without “cause” or for “good reason” (as these terms are defined in the applicable agreement). 

Because Dr. Hou, Ms. Van Berkel and Mr. Gomez terminated their employment with the Company in early fiscal 2015, the remainder of this Compensation Discussion and Analysis generally focuses on the compensation decisions for our currently employed Named Executive Officers, Messrs. Rittichier and Weinswig.

For more information regarding the payments and benefits that Dr. Hou, Ms. Van Berkel and Mr. Gomez areotherwise entitled to receive pursuant to the terms of their respective separation agreements, see “Executive Compensation - Potential Payments upon Termination or Change-in-Control.”his existing employment agreement and (2) provide consulting services to the Company for a transition period without any additional consideration in order to assist with Mr. Kim’s transition to Chief Financial Officer.

Mr. Weinswig was required to execute a full release of claims in favor of the Company in order to receive his severance benefits, and the continued payment of Mr. Weinswig’s severance benefits is subject to his compliance with certain confidentiality, cooperation, nondisclosure, nonsolicitation and other restrictive covenants.

Base Salary

Base salaries for the Named Executive Officers are determined based upon job responsibilities, level of experience, individual performance, and the Comparative Compensation Data, when available.  The goal for thepeer group compensation information described above. No Named Executive Officers are entitled to any automatic base salary component is to compensate executives at a level that approximates the median salaries of individuals in comparable positionsincreases, and markets, which we believe helps us attract, motivate and retain talented executives.

In determining individual salaries and anyall base salary increases are determined by the Compensation Committee utilizes the Comparative Compensation Data, when available, and recommendations from the compensation consultant, if any, together with the recommendations from the Chief Executive Officer and other factors, including an executive officer’s individual experience, scope of responsibility and performance. The Compensation Committee exercisesin its judgment in determining how to weigh each of these factors.discretion. The Compensation Committee reviews any salary increase for the Chief Executive Officer and other Named Executive Officers in executive session.

Mr. Rittichier was appointed as our Chief Executive Officer in January 2015 and, in connection with his appointment, the Compensation Committee established his annual base salary level at $325,000. The Compensation Committee reviewed Mr. Rittichier’s base salary in February 2016, and determined not to make any increases to Mr. Rittichier’s base salary for fiscal 2016.

As part of its September 2016 compensation review, the Compensation Committee determined to increase Mr. Rittichier’s base salary from $325,000 to $425,000, effective in October 2016 for fiscal 2017. The Compensation Committee determined to make this increase based on an assessment of Mr. Rittichier’s significant efforts towards the Company’s improved operational and financial performance and the fact that Mr. Rittichier’s $325,000 fiscal 2016 base salary and fiscal 2016 total targeted direct compensation were significantly below the 25^th percentile level for similarly situated executives at our peer group of companies.

Mr. Kim was appointed as our Chief Financial Officer in June 2016 and, in connection with his appointment, the Compensation Committee established his annual base salary level at $305,000. The Compensation Committee believed, in its subjective judgment, that this level of base salary for Mr. RittichierKim was appropriate in order to attract and retain Mr. RittichierKim as the Company’s Chief ExecutiveFinancial Officer. Mr. Kim’s current base salary remains $305,000.

The Compensation Committee determined in its judgmentdid not to award a base salary increase to Mr. Weinswig in fiscal 2015. The Compensation Committee also determined not to award base salary increases to Dr. Hou, Ms. Van Berkel and Mr. Gomez2016 prior to their terminationshis termination of employment with the Company in early fiscal 2015.employment.

Annual Cash Incentives

In General. Typically, the Company establishes a cash incentive plan each fiscal year which provides the Company’s executive officers an opportunity to receive an annual cash payment in addition to their base salaries.  The purpose of the cash incentive plan is to drive overall effectiveness and productivity by motivating the executives to achieve specified Company financial and non-financialidentifiable individual performance goals that support the Company’s strategic business objectives and goals of achieving increased profitability. By linking a significant portion of an executive’s annual cash compensation opportunity to the achievement of the Company’s strategic objectives, as well as the individual’s performance, the individual’s compensation is closely tied to the success of the Company.  We believe that providing annual cash incentive opportunities is a key component of maintaining a competitive executive compensation program.

Photovoltaics Sale Awards.On September 17, 2014, the Company entered into retention award letter agreements (the “Retention Agreements”) with each of Dr. Hou, Mr. Weinswig, Ms. Van Berkel, and Mr. Gomez, pursuant to which these executives were entitled to the following cash incentive payments (the “Photovoltaics Sale Bonuses”) if the Company completed the sale of its photovoltaics business within twelve months following the date of the agreement (the “Photovoltaics Sale”): Dr. Hou, $921,500; Mr. Weinswig, $526,500; Ms. Van Berkel, $330,000; and Mr. Gomez, $330,000. Pursuant to the terms of the Retention Agreements, one-half of the applicable Photovoltaics Sale Bonus was payable upon the closing of the Photovoltaics Sale and the remainder was to be paid six months after closing of the sale, in each case generally subject to the executive’s continued employment or a qualifying termination of the executive’s employment. On December 10, 2014, the Company completed the Photovoltaics Sale and the Photovoltaics Sale Bonuses became payable and were paid to the executives during fiscal 2015 as a result of the executives’ continued employment with or qualifying termination of employment from the Company in accordance with the terms of the Retention Agreements. Mr. Rittichier did not enter into a Retention Agreement because he was not employed by the Company at the time it entered into the Retention Agreements.

Telecom Sale Awards. On December 15, 2014, the Compensation Committee of the Company approved additional bonus payments (the “Telecom Sale Bonuses”) for Dr. Hou, Mr.  Weinswig, Ms. Van Berkel, and Mr. Gomez, payable in the following amounts upon consummation of the Company’s disposition of its telecommunications business to NeoPhotonics Corporation (the “Telecom Sale”): Dr. Hou, $135,000; Mr. Weinswig, $77,000; Ms. Van Berkel, $48,000; and Mr. Gomez, $48,000. One-half of the applicable Telecom Sale Bonus was payable upon the closing of the Telecom Sale and the remainder was payable six months thereafter, in each case generally subject to the executive’s continued employment or a qualifying termination of the executive’s employment. On January 2, 2015, the Company completed the Telecom Sale and the Telecom Sale Bonuses became payable and were paid to the executives during fiscal 2015 as a result of the executives’ continued employment with or qualifying termination of employment from the Company. Mr. Rittichier was not eligible to receive a Telecom Sale Bonus because he was not employed by the Company at the time the Telecom Sale Bonuses were approved.

2015 Bonus Plan. On August 27, 2015, the Board, upon recommendation of the Compensation Committee of the Board, approved the EMCORE Corporation Fiscal 20152016 Bonus Plan (the “2015 Bonus Plan”)Structure. Under the 2015 Bonus Plan, the Company’s executive officers and certain other employees are eligible to receive cash bonus awards that are determined based on the achievement of specified financial performance goals as well as the participant’s individual performance during the fiscal year. Specifically, for the Company’s Named Executive Officers, the amount, if any, of the annual cash bonus under the 2015 Bonus Plan was based 80% on the Company’s achievement of non-GAAP net income targets established by the Board for the third and fourth quarters of fiscal 2015 and 20% on the Compensation Committee’s subjective evaluation of each Named Executive Officer’s individual performance during the fiscal year. Under the 2015 Bonus Plan, the aggregate bonus opportunity for Mr. Rittichier was 80% of his annual base salary at the end of the fiscal year, and the aggregate bonus opportunity for Mr. Weinswig was 50% of his annual base salary at the end of the fiscal year. Bonuses, if any, under the 2015 Bonus Plan are payable in cash no later than January 31, 2016. Dr. Hou, Ms. Van Berkel and Mr. Gomez were not employed by the Company at the time the 2015 Bonus Plan was approved and were not participants in the plan.

The Compensation Committee established non-GAAP net income goals because it believes these financial performance metrics are the best indicators of the Company’s performance. For purposes of the 2015 Bonus Plan, “non-GAAP net income” means the Company’s net income for the applicable fiscal quarter of fiscal 2015, as determined under generally accepted accounting principles in the United States, adjusted to eliminate the impact of (1) discontinued operations, (2) litigation expenses associated with the pending arbitration with Sumitomo Electric Industries Ltd., (3) expenses incurred by or on behalf of the Strategy Committee of the Board of Directors, and (4) stock-based compensation expense. The Company’s non-GAAP net income targets were positive net income for the third quarter of fiscal 2015 and $200,000 for the fourth quarter of fiscal 2015. Actual non-GAAP net income for the third and fourth quarter of fiscal 2015 was approximately $2.0 million and $2.7 million respectively. As noted above, up to 20% of each executive’s annual bonus opportunity under the 2015 Bonus Plan is based on individual performance, independent of achievement of the Company’s performance targets. At the end of fiscal 2015, the Compensation Committee reviewed the accomplishments of each Named Executive Officer for the fiscal year compared to their individual performance objectives. Because the Company met its performance targets for fiscal 2015, and based on the individual accomplishments of the Named Executive Officers, including, without limitation, Mr. Weinswig’s efforts towards completion of the Photovoltaics Sale and the Telecom Sale and Mr. Rittichier improving efficiencies in the Company’s processes, including the manufacturing process, the Compensation Committee determined to award the full bonus for which each Named Executive Officer was eligible as follows: Mr. Rittichier, $195,000 (prorated from Mr. Rittichier’s start date on January 3, 2015) and Mr. Weinswig, $130,000.

2016 Bonus Plan.On November 13, 2015, the Board, following the recommendation of the Company’s Compensation Committee, approved the EMCORE Corporation Fiscal 2016 Bonus Plan (the “2016 Bonus Plan”). Under the 2016 Bonus Plan, the Company’s Named Executive Officers who are currently employed by the Company are eligible to receive cash bonus awards that are determined based on the achievement of a non-GAAP net incomespecified financial performance goal for the Company for the 2016 fiscal year, as well as theindividual performance goals for each Named Executive Officer’s individual performance during the 2016 fiscal year. For the Company’s Named Executive Officers, the amount, if any,Officer.

80% of the annual cash bonus underopportunity for the 2016 Bonus Plan will beNamed Executive Officers is based 80% on the Company’s achievement of a non-GAAP net income target. The amount of cash bonus payable to each executive officer under the 2016 Bonus Plan based on non-GAAP net income performance may range from 0% to 120% of the executive’s target establishedbonus opportunity that is tied to non-GAAP net income, as illustrated by the Boardtable below.

The Compensation Committee established non-GAAP net income targets as the Company performance goal because it believes these financial performance metrics are the best indicators of the Company’s performance each fiscal year. For purposes of the 2016 Bonus Plan, “non-GAAP net income” means the Company’s net income for fiscal 2016, as determined under generally accepted accounting principles in the United States, adjusted to eliminate the impact of (1) discontinued operations, (2) litigation expenses associated with the arbitration with Sumitomo Electric Industries Ltd., (3) expenses incurred by or on behalf of the Strategy and Alternatives Committee of the Board of Directors, (4) severance and restructuring charges and (5) stock-based compensation expense.

The remaining 20% of the annual cash bonus opportunity for the Named Executive Officers is based on an evaluationeach executive’s achievement of individual performance goals. The amount of cash bonus payable to each executive officer’sofficer for the achievement of individual goals may similarly range from 0% to 120% of the executive’s target bonus opportunity that is tied to the individual performance during the fiscal year. goals.

Under the 2016 Bonus Plan, the aggregate target bonus opportunity for Mr. Rittichier iswas 80% of his annual base salary at the end of the fiscal year and the aggregate target bonus opportunity for Mr. Weinswig isKim was 50% of his annual base salary at the end of the fiscal year. The amount of cash bonus payable to each executive officer under the 2016 Bonus Plan will range from 0% to 120% of the executive’s target bonus opportunity based on achievement of the applicable Company and individual performance goals. Bonuses, if any, under the 2016 Bonus Plan will beare payable in cash after the end of the 2016 fiscal year and no later than March 15, 2017. Mr. Weinswig was not eligible to receive a bonus payment under the 2016 Bonus Plan as a result of his termination of employment during the fiscal year.

2016 Bonus for Mr. Rittichier. For Mr. Rittichier, at the time the 2016 Bonus Plan was established in November 2015, the Company established a non-GAAP net income target for the 2016 fiscal year based on budgeted results of $8 million. This target was established based on our assumption that the overall 2.5G GPON chip market would experience significant growth during the 2016 fiscal year, when in actuality the chip market experienced declines during the fiscal year. Actual non-GAAP net income for fiscal 2016 was approximately $5.08 million. Because we achieved less than 80% of the non-GAAP net income target amount, Mr. Rittichier did not receive any portion of his bonus opportunity that was tied to non-GAAP net income performance. Mr. Rittichier had five specific individual performance goals for fiscal 2016 that were based on (1) growing revenues associated with our chip business to diversify our revenue base, (2) establishing a manufacturing plant in Beijing and automating our manufacturing processes relating to our laser module line, (3) automating some of our manufacturing processes relating to our chips business and outsourcing another part of our chip production business to a contract manufacturer, (4) outsourcing our satellite communications business to a contract manufacturer, and (5) developing a world-wide distribution channel and overhauling our sales force. The Compensation Committee reviewed Mr. Rittichier’s performance against the performance goals and determined that he achieved 100% of three of the objectives, 0% of one of the objectives and 75% of another objective, resulting in a 75% payout factor for the portion of his bonus opportunity that was tied to his individual performance goals. Mr. Rittichier’s actual bonus payout under the 2016 Bonus Plan was $39,000 in total, which was only 12% of his target bonus opportunity and approximately $156,000 less than the bonus he earned for fiscal 2015.

2016 Bonus for Mr. Kim. During the second quarter of fiscal 2016, the Company recognized that the 2.5G GPON chip market was not growing at the speed we had budgeted, and, in March 2016, we adjusted the fiscal 2016 financial forecast downward to reflect more realistic financial results for fiscal 2016. This adjusted financial forecast was reviewed with the Board at its regular meeting in March 2016. Because Mr. Kim joined the Company in June 2016 after the Company revised its fiscal 2016 financial forecast, the Compensation Committee determined it was appropriate to evaluate Mr. Kim’s bonus opportunity using a revised non-GAAP net income target for the 2016 fiscal year of $5 million, which, consistent with the original $8 million target, reflected the then current fiscal 2016 budgeted amounts. Actual non-GAAP net income for fiscal 2016 was approximately $5.08 million, which resulted in a payout of approximately 100% of the portion of his bonus opportunity that was tied to non-GAAP net income performance.

Mr. Kim had six specific individual performance goals for fiscal 2016 that were based on (1) timely and accurately filing all of our required SEC reports, (2) overseeing the preparation of monthly financial metrics, (3) timely providing a semi-annual forecast and any updated budgets, (4) ensuring the Company’s annual tax filings are timely filed, (5) completing a transfer pricing study, and (6) finalizing certain outstanding tax and tax-related audit matters. The Compensation Committee, with input from Mr. Rittichier, reviewed Mr. Kim’s performance against the performance goals and determined that he achieved 100% of four of the objectives, 50% of one of the objectives and 75% of another objective, resulting in an 87.5% payout factor for the portion of his bonus opportunity that was tied to his individual performance goals. Mr. Kim’s actual bonus payout under the 2016 Bonus Plan was $49,563 in total, which was approximately 97.5% of his pro-rated target bonus opportunity for fiscal 2016.

In addition to his bonus under the 2016 Bonus Plan, Mr. Kim was also paid a one-time, special $50,000 signing bonus in connection with his commencement of employment. The Compensation Committee determined to pay Mr. Kim this signing bonus to replace compensation that Mr. Kim was foregoing from his prior employer, but included a requirement that Mr. Kim repay the signing bonus should he voluntarily terminate employment for any reason (other than for “good reason”) prior to the first anniversary of his start date.

Long-Term Stock-Based Incentives

In General. The Company believes that stock-based incentives are an effective means for aligning the interests of our executives with the interests of our shareholders and that the long-term compensation of the Company’s Named Executive Officers should be linked to the value provided to our shareholders. In addition, we use stock-based compensation as a retention tool. Because the stock awards generally vest over a multi-year period, they provide our executives with an ongoing incentive to continue their employment with the Company and to maximize shareholder value. Long-term stock-based incentives may consist of stock options, restricted stock, performance stock, restricted stock units, performance stock units, stock purchase rights, deferred stock units and stock appreciation rights, all of which provide an incentivegranted to our executives for the executives to join and remain with the Company, continue to promote its best interests and enhance its long-term performance.

Through September 30, 2015, the Company had only awarded long-term compensationlast several years have been structured in the form of stock options, restricted stock awards and restricted stock units. The Compensation Committee believes that stock options, restricted stock awards and restricted stock units provide executives with an incentive to maximize shareholder value by directly aligning the economic interests of the executives with those of the shareholders. Stock options give an executive the right to buy a share of Company Common Stock in the future at a predetermined exercise price.  The exercise price is the closing price of the Common Stock on the grant date.  The Compensation Committee believes that stock options appropriately incentivize executives to maximize shareholder value because stock options have value only when the value of the Common Stock increases following the date of grant of the option (because the exercise price of the option is generally equal to the closing price of a share of the Common Stock on the date of grant). New hire stock option awards typically vest over a five-year period while annual stock option awards generally vest over a four-year period.  Other supplemental stock option awards usually vest over a four-year period.  All options expire ten years after the grant date.  In addition, under the Company’s 2010 Equity Incentive Plan (the “2010 Plan”), no one recipient may be granted an award of options to purchase more than 125,000 shares of Common Stock in any twelve month period. Under the Company’s 2012 Equity Incentive Plan (the “2012 Plan”), no one recipient may be granted an award of options to purchase more than 150,000 shares of Common Stock in any fiscal year, except that options granted at the time of hire will not be counted against the foregoing limitation.  Executives who are terminated for cause immediately forfeit all options that have not vested, unless otherwise determined by the Compensation Committee.

unit awards. Restricted stock awards are grants of Common Stock that are subject to restrictions on sale and forfeiture until vested. Restricted stock units are contractual rights to receive a stated number of shares of Common Stock, or, if determined by the Compensation Committee on or after the grant date, cash equal to the fair market value of such shares of Common Stock or any combination of shares of Common Stock and cash having an aggregate fair market value equal to such stated number of shares of Common Stock, that are subject to forfeiture prior to vesting. Restricted stock and restricted unit awards are designed to link executives’ interests with those of the Company’s shareholders asbecause the value of the awards is based on the value of the Common Stock, andStock. In addition, they provide a long-term retention incentive throughout the vesting period because the restricted stock or restricted stock units generally have value regardless of stock price volatility, they provide a long-term retention incentive throughout the vesting period. Under the 2010 Plan, thesevolatility.

Fiscal 2016 Awards for Messrs. Rittichier and Weinswig. Messrs. Rittichier and Weinswig were each granted fiscal 2016 equity awards vest over a three year period, and no one recipient may receive an awardin February of restricted stock or restricted stock units covering more than 50,000 shares of Common Stock in any twelve month period. Under the 2012 Plan, no one recipient may receive an award of more than 150,000 restricted stock units in any fiscal year or an award of restricted stock covering more than 150,000 shares of Common Stock in any fiscal year, except an employee may be granted an aggregate of up to 300,000 restricted stock units and an award of restricted stock covering up to 300,000 shares of Common Stock at the time of hire, which will not be counted against the foregoing limitations. For executives who voluntarily resign or are terminated for cause, any unvested restricted stock or restricted stock units are immediately forfeited and canceled unless otherwise determined by the Compensation Committee.

2016. In granting stock-basedthese awards, the Compensation Committee usesused its judgment and discretion to determine the appropriate value of each award at the time it was granted, and does not issue a targeted number of stock options, restricted stock awards or restricted stock units, but rather reviews thereviewed each executive’s individual performance and the performance of the Company in the prior fiscal year, as well as the Comparative Compensation Data, when available, and any recommendations frompeer group compensation consultants,information described above.

Similar to determine the appropriate valueannual equity award grants made in prior years, each award consisted of the award at the time it is granted. Grants of stock options and awards of restricted stock andtime-based restricted stock units that vested 25% on the grant date and 25% in three equal annual installments on the first three anniversaries of the grant date. These awards were granted prior to executive officersour 2016 Annual Meeting of Shareholders and before our introduction of our new performance-based long-term equity award program described below. In response to shareholder concerns regarding granting equity awards with installments that are also based upon each executive officer’s relative position, responsibilities, historicalfully vested on the grant date and expected contributionsat the request of the Company, our Chief Executive Officer has agreed to hold 100% of the net after-tax shares he received from the tranche that was fully vested on the grant date until his termination of employment with the Company. We believe this requirement to hold all after-tax shares that were fully vested on the grant date until his retirement from the Company mitigates shareholder concerns that this award does not sufficiently align Mr. Rittichier’s interests with those of our shareholders. In addition, one of the amendments we propose to make to the Company,2012 Equity Incentive Plan would require substantially all awards granted under the 2012 Equity Incentive Plan, as amended, to have a minimum vesting period of one year and the officer’s vested option, restricted stock award and restricted stock unit balance from previous grants and awards, with primary weight givenwould, subject to the executive officer’s relative rankCompensation Committee’s discretion to accelerate awards, prohibit any portion of an award to vest earlier than the first anniversary of the grant date of the award. In connection with his termination of employment and responsibilities. Initial stock option grants, restricted stock awards and restricted stock units designed to recruit an executive officer to join the Company (such as the initial restricted stock unit award granted to Mr. Rittichier described below) may be based ona result of our negotiations with Mr. Weinswig, he agreed to waive the executive, with referenceaccelerated vesting of all shares that were unvested on the date of his resignation under his fiscal 2016 equity award that he was otherwise entitled to historical option grants and restricted stock and restricted stock unit awards to existing officers, and the Comparative Compensation Data.

Pursuantreceive pursuant to the terms of his existing employment agreement.

Initial Equity Award for Mr. Weinswig’sKim. Mr. Kim was granted an initial equity award agreements, all of Mr. Weinswig’s equity grants vested effective December 10, 2014 upon consummation of the Photovoltaics Sale. On December 15, 2014, the Compensation Committee approved a grant of 50,000 restricted stock units for Mr. Weinswig, which were awarded on January 5, 2015. The grant was relatedpursuant to Mr. Weinswig’s hard work and success related to the Company’s review of strategic alternatives. The Compensation Committee believes that since all of Mr. Weinswig’s equity had vested, the grant also served (and continues to serve) a retention purpose because the restricted stock units vest over time. 12,500 of these restricted stock units vested immediately at the time of grant. An additional 12,500 restricted stock units vested on January 5, 2016, and the remaining 25,000 restricted stock units will vest in two equal annual installments on January 5, 2017 and 2018.

On January 5, 2015, in accordance with the terms of his employment agreement andentered into in June 2016 in connection with his hiringappointment as our Chief Executive Officer,Financial Officer. In determining the appropriate value of this award, the Compensation Committee used its judgment and discretion, and considered the results of negotiations with Mr. Rittichier received anKim, the size of historical initial equity award grants made to other senior executives, the recommendations of Compensia, and the peer group compensation information described above. Mr. Kim’s initial equity award was structured as a “front loaded” two-year award. At this time, the Compensation Committee does not expect to make any additional equity awards to Mr. Kim in fiscal 2017 beyond the performance-based portion of his initial grant, as described below. Mr. Kim will be eligible to receive another regular annual equity grant based on our newly developed long term incentive compensation program starting in fiscal year 2018. We believe this “front loaded” award structure was critical in attracting Mr. Kim to join the Company, and provided him with an upfront meaningful equity incentive that links his interests to those of 300,000the Company’s shareholders.

Fifty-percent of the total number of shares subject to Mr. Kim’s equity award were time-based restricted stock units 75,000that were granted in June 2016. These time-based awards vest in five equal annual installments on the first five anniversaries of which vested upon grant. Anhis hire date. While this five-year vesting schedule is longer than we generally use for annual time-based equity grants, the Compensation Committee determined to use a longer vesting schedule as a result of the front loaded nature of the award in order to provide additional 75,000retention incentives.

The remaining 50% of the total number of shares subject to Mr. Kim’s equity award were performance-based restricted stock units vested on January 5,that were granted in October 2016. Even though these performance-based restricted stock units were included in Mr. Kim’s initial new hire offer, they were not granted until October 2016 because, until that time, we were working with Compensia to develop a framework for our new performance-based long-term equity award program that takes into account feedback we received from our shareholders. Since these awards were granted after the end of our 2016 fiscal year, the SEC’s rules require that they not be reported in our Summary Compensation Table for fiscal 2016, and the remaining 150,000that they instead be reported in our Summary Compensation Table for fiscal 2017.

Performance-Based Program Design. The performance-based restricted stock units will vest based on a combination of our relative total shareholder return over a three-year performance period and the executive’s continued employment. We chose relative total shareholder return as the applicable performance measure because (1) we believe it will incentivize the Named Executive Officers to focus on and grow our returns for shareholders, and (2) it is an objective and easily understandable performance metric that is different than the earnings-based performance measure used under our annual cash incentive program.

Relative total shareholder return is measured against the companies in twothe Russell Microcap Index, which is a capitalization-weighted index of 2,000 small cap and micro cap stocks, because we wanted to utilize a rigorous metric to closely align shareholder value to the named executive officers’ long term incentive goals. In addition, we chose to measure our performance against the Russell Microcap Index, instead of measuring our performance against the much smaller group of compensation peers described above (substantially all of which are included in the Russell Microcap Index), because we wanted to measure our performance against a broad index of relatively similarly sized companies in which investors may choose to invest and measure performance against.

The performance-based restricted stock units that were granted by the Company in October 2016 were granted in three substantially equal tranches, each consisting of approximately one-third of the total target number of performance shares subject to the award. The first tranche is eligible to vest based on our relative total shareholder return performance over the one-year period following the grant date, the second tranche is eligible to vest based on our relative total shareholder return performance over the two-year period following the grant date, and the third tranche is eligible to vest based on our relative total shareholder return performance over the three-year period following the grant date. Any shares that do not vest at the end of the applicable performance period will be forfeited. Since the Company has not previously issued performance-based awards to its executive officers, it structured the initial grant in three tranches to serve as a bridge and tie executive compensation to the Company’s performance in each of the three fiscal years in the three-year performance period. Going forward, the Company anticipates that any grant of performance-based restricted stock units would consist of one tranche based on the Company’s relative total shareholder return performance for the three-year period following the grant date and will cliff vest at the end of such three-year performance period. 100% of the target number of shares subject to each tranche of the grant made in October 2016 will vest if our total shareholder return performance equals that of the Russell Microcap Index for the applicable performance period. If our total shareholder return exceeds that of the Russell Microcap Index for the applicable performance period, the target number of shares subject to each tranche that will vest is increased by 2% for each 1% of overperformance, subject to a maximum payout equal to 200% of the target number of shares in the tranche. Similarly, if our total shareholder return is less than that of the Russell Microcap Index for the applicable performance period, the target number of shares subject to each tranche that will vest is decreased by 2% for each 1% of underperformance, so that the award has a parallel upside leverage opportunity and downside penalty for underperformance. The payout matrix for the performance-based restricted stock unit awards can be illustrated as follows:

Fiscal 2017 Award for Mr. Rittichier. After we finished developing the framework for our new performance-based long-term equity award program, Mr. Rittichier was granted a fiscal 2017 equity award in October 2016. Unlike Mr. Rittichier’s fiscal 2016 equity award that consisted 100% of time-based restricted stock units, 59% of Mr. Rittichier’s 2017 award consisted of performance-based restricted stock units having the same terms as described above for Mr. Kim’s initial equity award. The remaining 41% of Mr. Rittichier’s 2017 award consisted of time-based restricted stock units that vest in equal annual installments on January 5,the first four anniversaries of the grant date. No portion of Mr. Rittichier’s 2017 and 2018.

As a result of their terminations of employment withaward was immediately vested on the Company in early fiscal 2015, Dr. Hou, Ms. Van Berkel and Mr. Gomez were not granted equity awards during fiscal 2015.grant date.

Company Benefits

The Company’s benefits are an important tool in our ability to attract and retain outstanding employees throughout the Company. As a business matter, we weigh the benefits we need to offer to remain competitive and attract and retain talented employees against the cost of the benefits.  Benefit levels are reviewed periodically to ensure they are cost-effective and competitive and support the overall needs of Company employees.

This section describes the benefits that the Company provides to key executives and notes those instances when benefits for the Named Executive Officers differ from the general plan. In some instances, we also describe the programs we offer across the Company as context to specific discussions about executive benefits.

Medical, Dental, and Vision Benefits

The Company offers a standard benefits package to all of its eligible employees, which includes medical, dental, and vision coverage. The Named Executive Officers receive coverage at 100% whereas all other employees of the Company receive coverage ranging from 50% to 100% depending on the service performed.

Company-Sponsored Retirement PlansPlan

The EMCORE Corporation 401(k) Plan (the “401(k) Plan”) is a defined contribution plan that is designed to comply with the Employee Retirement Income Security Act of 1974, the Code, as well as federal and state legal requirements.  The 401(k) Plan is designed to provide retirement benefits to eligible employees of the Company and is administered by Prudential Financial.Company. Participants in the 401(k) Plan may elect to reduce compensation by a specific percentage, which is contributed to the participant’s 401(k) Plan account on a pre-tax basis as a salary deferral.

Employees, including the Company’s Named Executive Officers, may elect to contribute to the 401(k) Plan through salary reduction up to the yearly maximum tax-deductible deferral allowed pursuant to IRS regulations.  A participant may elect to defer between 1-30% of his or her compensation per pay period. The deferral amount will not be subject to income tax until distribution. Each participant is able to direct his or her investment into any of the available investment options.  Participants’ contributions are vested at 100%.

The Company may provide a discretionary match of 50% of the first 6% of a participant’s contribution to the 401(k) Plan, and this matching contribution vests over a five year period, based on the participant’s continuing service during such period. Until May 22, 2015, the matching contribution was made in the form of Common Stock, and participants were able to exchange the Common Stock for other investment options within the 401(k) Plan upon receipt of the Company match, subject to the Company’s insider trading policies.  Exchanges from other investment options to Common Stock were not permitted under the 401(k) Plan. Beginning on June 5, 2015, the Company began paying the match in cash, in accordance with a policy change that was approved by the Compensation Committee on March 10, 2015, upon recommendation from the 401(k) committee. In furtherance of this policy change, all Common Stock held in the Company’s 401(k) Plan was liquidated in December 2015 and invested in other funds.

An employee, including an eligible part-time or temporary employee, becomes eligible to participate in the 401(k) Plan on the 60th day following his or her date of hire and attaining the age of 20 years. A re-hire is eligible to participate in the 401(k) Plan immediately.

Employee Stock Purchase Plan

The Company offers all eligible employees, including the Company’s Named Executive Officers, the opportunity to acquire an ownership interest in the Company by purchasing shares of Common Stock through a tax-qualified employee stock purchase plan (“ESPP”). Under the ESPP, an eligible employee may withhold, through payroll deductions, up to 10% of his or her eligible earnings, up to certain maximums, to be used to purchase shares of Common Stock at certain plan-defined dates. The option price is set at 85% of the average of the high and low price for Common Stock on either the first or last day of the applicable offering period under the ESPP, whichever is lower.

Officer and Director Share Purchase Plan

In January 2011, the Compensation Committee of the Board of Directors approved an Officer and Director Share Purchase Plan (the “ODPP”), which allows executive officers and directors of the Company to purchase shares of Common Stock at fair market value in lieu of salary or, in the case of directors, director fees. Eligible individuals may voluntarily participate in the ODPP by authorizing payroll deductions or, in the case of directors, deductions from director fees for the purpose of purchasing shares of Common Stock. Elections to participate in the ODPP may only be made during open trading windows under the Company’s insider trading policy and when the participant does not otherwise possess material non-public information concerning the Company.

Perquisites

From time to time, the Company provides perquisites to key executive officers, including the Named Executive Officers, as a recruiting and retention tool. We believe that our perquisites are appropriate and we periodically review them against the Comparative Compensation Data, when available, and generally accepted corporate practices.

Severance Policy and Severance Agreements

Benefits

In an effort to further promote the retention of the Company’s Named Executive Officers, the Company previously entered into an executive employment agreement with Mr. Rittichier in connection with his appointment as our Chief Executive Officer effective January 3, 2015, and approved an executive employment agreement with Mr. Kim in connection with his appointment as our Chief Financial Officer effective June 20, 2016. These agreements withset forth each executive’s severance benefits for a qualifying termination by us without good “cause” or by the executive for “good reason” (as those terms are defined in each executive’s employment agreement). We do not believe that the Named Executive Officers should be entitled to receive their cash severance benefits merely because a change in control transaction occurs, and a change in control does not, in and of Messrs. Rittichier and Weinswigitself, entitle any Named Executive Officer to formalize itsreceive cash severance policy with respect to these individuals. In general, the Compensation Committee considersbenefits (i.e., these severance protections an important part of an executive’s compensation and consistent with competitive practices. benefits are “double-trigger” benefits).

In accordance with the terms of these agreements, the Named Executive OfficersMessrs. Rittichier and Kim are eligible to receive certain severance benefits under specified circumstances,for a qualifying termination of employment, including in the case of Mr. Rittichier,continued payment of base salary for a period of one year, payment of histhe executive’s target annual bonus for the year of termination over a period of one year, and payment of certain continuing health benefits. Inbenefits for one year. Each executive’s cash severance benefits are based on a “1x” multiple, and the casecash severance benefits will not increase if the qualifying termination occurs in connection with a change in control of Mr. Weinswig, he would be eligible to receive payment of base salary for a period of one year plus two weeks, plus an additional two weeks for each whole year that he was employed by the Company, payment of certain continuing health benefits, provision of certain outplacement services and acceleration and immediate vesting of all outstanding equity awards. Company.

Under the terms of his employment agreement, Mr. Rittichier would be entitled to acceleration and immediate vesting of 50% of his outstanding equity awards in the event of a “changechange in control”control of the Company (as defined in Mr. Rittichier’s employment agreement) and would be entitled to acceleration and immediate vesting of 50% of his outstanding equity awards (excepting those which were previously vested due to a change in control) which have not vested as of his termination date in the event hishe experiences a qualifying termination of employment is terminated under certain circumstances in connection withwithin twelve months following a change in control. The Named Executive Officers areWe eliminated this partial single-trigger equity vesting provision in Mr. Kim’s employment agreement, and instead provided that Mr. Kim would be entitled to acceleration and immediate vesting of 100% of his outstanding equity awards which have not eligible to receivevested as of his termination date (with any performance-based awards vesting at a minimum of the target performance level) in the event he experiences a qualifying termination of employment within twelve months following a change in control. As a result, all of Mr. Kim’s severance benefits if they are terminated for “cause,”“double trigger” benefits.

In the event a payment or if they voluntarily terminate theirbenefit provided under these employment other than for “good reason”agreements would constitute a “parachute payment” within the meaning of Section 280G of the Code, then such payment or benefit will be limited as such terms are definedprovided in the employment agreements. The employment agreements for Messrs. Rittichier and Kim do not provide for any tax “gross up” or similar payment for any excise taxes that may be triggered by the payment of any parachute payments.

In addition, in order to receive any severance benefits for which a participant is eligible under their employment agreement, the participantagreements, Messrs. Rittichier and Kim must execute within sixty (60) days of the date of termination, a general release agreement prepared by the Company that includes, among other things, a release by the participant ofreleasing the Company from any liability or obligation to the participant.

executive, and comply with the restrictive covenants included in the employment agreements.

For more information regarding potential payments that may be made to Messrs. Rittichier and WeinswigKim upon a qualifying termination of employment under their employment agreementsor a change in control, and the payments made to Dr. Hou, Ms. Van Berkel and Mr. Gomez pursuant to the termsWeinswig in connection with his termination of their respective separation agreements,employment, see “Executive Compensation — Potential Payments upon Termination or Change-in-Control.”

Clawback Policy

During fiscal 2016, we adopted a compensation recoupment policy whereby in the event of a restatement of our financial statements to correct a material error, the Compensation Committee is required to review our incentive compensation awards and may, if it determines appropriate after considering all relevant facts and circumstances, require the reimbursement of the incremental incentive compensation that an executive officer received as a result of the incorrect financial results. Annual bonus payments, long-term cash incentives, stock options, restricted stock, restricted stock units (including performance stock units) and other equity incentive awards that are granted, earned or vested based wholly or in part upon the attainment of a financial reporting measure are each subject to the terms of this clawback policy.

Stock Ownership and Holding Requirements

During fiscal 2016, we adopted a stock ownership policy. We believe that this new policy will align the interests of our executive officers with those of our shareholders by requiring executive officers to have direct ownership in shares of our Common Stock. The policy requires our Chief Executive Officer to own shares of our Common Stock having a value equal to at least three times his annual base salary and our Chief Financial Officer to own shares of our Common Stock having a value equal to at least one times his annual base salary. Shares subject to stock options and unvested stock unit awards are not considered owned by the executive for purposes of the policy. The executives covered by the policy are required to be in compliance with the ownership levels above within five years after adoption of the policy, and are required to retain 50% of the net after-tax shares received in respect of equity awards until they are in compliance.

Anti-Hedging, Pledging and Derivatives Policy

In fiscal 2015, Dr. HouThe Company considers it improper and Mr. Rittichier participatedinappropriate for the Company’s directors, executive officers and other employees to engage in short-term or speculative transactions in the same compensation programsCompany’s securities and received compensation based upon the same criteria asother transactions in the Company’s securities that create the potential for heightened legal risk or the appearance of improper or inappropriate conduct even if they occur at a time when the individual is not aware of material nonpublic information. Accordingly, the Company prohibits these individuals from engaging in short-term trading of the Company’s securities, short sales, transactions in puts, calls, or other executive officers.  However, Dr. Hou’s and Mr. Rittichier’s compensation reflected the higher level of responsibility that each of them had with respectderivative securities related to the strategic directionCompany’s stock on an exchange or in any other organized market, entering into hedging or monetization transactions that are designed to hedge or offset any decrease in the market value of the Company’s securities, margining Company the Company’s financial and operating results, and interactions with the investment community.

securities held in a margin account, or pledging Company securities as collateral for a loan.

Tax and Accounting Considerations

Under Section 162(m) of the Code, the Company may not deduct annual compensation in excess of $1 million paid to certain employees —– generally its Chief Executive Officer and its three other most highly compensated executive officers employed at the end of the year (other than the Chief Financial Officer), unless their compensation qualifies as performance-based compensation. While theThe Compensation Committee currently intends to structure performance-related awards in a way that will preserve the maximum deductibility of compensation from these awards, and has structured the performance-based restricted stock unit awards described above as awards that are intended to be qualified performance-based compensation. However, the Compensation Committee may from time to time approve awards that would vest upon the passage of time or other compensation, which would not result in qualification of those awards as performance-based compensation. The Company reserves the right to design programs that may not be deductible under Section 162(m) of the Code if the Company believes they are nevertheless appropriate to help achieve the Company’s executive compensation program objectives. The Company’s executive officers had no role in determining or recommending the amount or form of executive and director compensation.

EXECUTIVE COMPENSATION

Note: All share numbers for fiscal 2016 in this section are presented after giving effect to equitable adjustments made to take into account the impact of the special cash dividend that was declared by the Company in July 2016.

The table below sets forth certain information concerning the compensation paid to or earned by those persons who during fiscal 20152016 (i) served as the Company’s Chief Executive Officer and (ii) served as the Company’s Chief Financial Officer, and (iii) are former executive officers who are required to be included pursuant to applicable SEC disclosure rules. Other than as listed in the table below, noOfficer. The Company did not have any other person who serves, or served during fiscal 2015,2016, as an executive officer of the Company.  Compensation information is provided for the fiscal years ended September 30, 2013, 2014, 2015 and 2015,2016, except in cases where an individual was not a Named Executive Officer for the applicable year.

Summary Compensation Table for Fiscal 20132014 through 20152016

The following table sets forth as to each of the Named Executive OfficersOfficer information about the grants of plan-based awards during fiscal 2015.2016. Each of the equity-based awards was granted under the Company’s 2012 Equity Incentive Plan and cash-based bonuses were awarded under the 20152016 Bonus Plan. For a narrative description of the terms of these awards, please see the discussion inrefer to the “Compensation Discussion and Analysis” above.

Grants of Plan-Based Awards in Fiscal 20152016

The following table sets forth as to each Named Executive Officer information on outstanding equity awards held by the Named Executive Officer as of September 30, 2015.

2016.

Outstanding Equity Awards as of September 30, 20152016

The following table sets forth as to each Named Executive Officer information on the exercise of stock options and the vesting of other stock awards previously granted to the Named Executive Officer during fiscal 2015.

2016.

Options Exercised and Stock Vested in Fiscal 20152016

Potential Payments upon Termination or Change-in-Control

Messrs. Rittichier and WeinswigKim

The Company has entered into employment agreements with Messrs. Rittichier and Weinswig,Kim, setting forth, among other things, the Named Executive Officer’s severance benefits upon termination of their employment or change of control of the Company. In accordance with the terms of Mr. Rittichier’s agreement, if (a) his employment is terminated without “cause” or (b) he terminates his employment for “good reason,” he will receive the following benefits: (i) continued payment of his base salary for a period of one year;twelve months; (ii) payment of his target annual bonus for the year of termination; and (iii) payment of certain continued health coverage premiums.premiums for twelve months. Mr. Rittichier’s employment agreement also provides that he is entitled to acceleration and immediate vesting of 50% of his outstanding equity awards in the event of a change of control“change in control” of the Company. In addition, if Mr. Rittichier’s employment is terminated without cause or he terminates his employment for good reason within twelve months of a “changechange in control”control of the Company, under the terms of his employment agreement, Mr. Rittichier is also entitled to acceleration and immediate vesting of 50% of his outstanding equity awards that remain subject to vesting (excepting those which were previously vested due to a change ofin control, as described above). (For these purposes, theThe terms “cause,” “good reason” and “change in control” as referenced in relation to Mr. Rittichier’s employment agreement are each defined in Mr. Rittichier’s employment agreement.)

In accordance with the terms of Mr. Weinswig’sKim’s agreement, if (a) his employment is terminated without “cause,” (b) he terminates his employment for “good reason,” or (c) within thirty-six months of a “change in control” of the Company, his employment is terminated without “cause” or (b) he terminates his employment for “good reason,” he will receive the following benefits: (i) continued payment of his base salary for a period of onetwelve months; (ii) payment of his target annual bonus for the year plus two weeks, plus an additional two weeks for each whole year that he was employed by the Company; (ii)of termination; and (iii) payment of certain continued health coverage premiums; (iii) paymentpremiums for twelve months. In addition, if Mr. Kim’s employment is terminated without cause or he terminates his employment for good reason within twelve months of standard outplacement services upa “change in control” of the Company, under the terms of his employment agreement, Mr. Kim is also entitled to $15,000; and (iv) acceleration and immediate vesting of all of his outstanding equity awards that remain(with any awards subject to performance-based vesting (except performance-based awards)requirements vesting at a minimum of the target performance level). (For these purposes, theThe terms “cause,” “good reason” and “change in control” as referenced in relation to Mr. Kim’s employment agreement are each defined in Mr. Weinswig’sKim’s employment agreement.)

Receipt of the severance benefits described above for Messrs. Rittichier and WeinswigKim is subject to the executive entering into a general release agreement with the Company and compliance with certain confidentiality, nondisclosure and other restrictive covenants set forth in the applicable employment agreement.

The following are estimated payments and benefits that would be provided to each of Mr. Rittichier and Mr. WeinswigKim in the event the Named Executive Officer’s employment is terminated as described above.  In accordance with applicable SEC disclosure rules, the estimates assume a termination date of September 30, 2015,2016, the last business day of fiscal 2015.2016.  The actual amounts of the payments and costs of the benefits, however, can only be determined at the time of an executive’s separation from the Company.

In addition, as of September 30, 2015,2016, Messrs. Rittichier and WeinswigKim would realize the following gains from the acceleration of unvested equity awards under the circumstances described above, measured based on a stock price of $6.80,$5.70, which was the per share closing price of the Common Stock on the Nasdaq Global Market on September 30, 2015:2016:

If Mr. Rittichier’s or Mr. Weinswig’sKim’s employment is terminated for cause or he terminates his employment without good reason, the Company will pay the Named Executive Officer’s base salary through the effective date of his termination and will not have any additional obligations to the Named Executive Officer. If the Named Executive Officer’s employment terminates as a result of his death, the Company will pay the Named Executive Officer’s base salary through the effective date of his termination and provide his spouse and children health insurance coverage as in effect on the date of termination for a period of twelve months thereafter.

Former Named Executive OfficersMr. Weinswig

On September 17, 2014,June 2, 2016, the Company announcedreported that Dr. Hou would terminateits then-current Chief Financial Officer, Mark Weinswig, resigned from his employment withposition as Chief Financial Officer of the Company effective January 2, 2015. On the same date, the Company also entered into the Hou Separation Agreement pursuant to which,June 20, 2016. Mr. Weinswig resigned for “good reason” as of January 2, 2015, Dr. Hou ceased to serve as a director of the Company and as an officer or employeedefined under his existing employment agreement with the Company and its affiliates. The Hou Separation Agreement provides Dr. HouCompany. In accordance with payments and benefits that are consistent with the payments and benefits to which he was entitled pursuant to the terms of his employment agreement. These payments and benefits are as follows:agreement, effective on his termination date, Mr. Weinswig received the following severance benefits:

Mr. Weinswig executed a full release of claims in favor of the Company in order to receive his severance benefits. In addition, the Hou Separation Agreement includes releases by Dr. Houcontinued payment of all claims related to Dr. Hou’s employment and service relationship with, and termination of employment and service from, the Company and receipt of the payments andMr. Weinswig’s severance benefits pursuant to the Hou Separation Agreement remainsis subject to Dr. Hou’shis compliance with thecertain confidentiality, cooperation, nondisclosure, nonsolicitation and other restrictive covenants set forth in her employment agreement.covenants.

Separation Agreement with Ms. Van Berkel.On December 11, 2014, the Company announced that Ms. Van Berkel would terminate her employment with the Company effective January 2, 2015. On December 10, 2014 the Company entered into the Van Berkel Separation Agreement, which provides Ms. Van Berkel with payments and benefits that are consistent with the payments and benefits to which she was entitled pursuant to the terms of her employment agreement. These payments and benefits are as follows:

In addition, the Van Berkel Separation Agreement includes releases by Ms. Van Berkel of all claims related to Ms. Van Berkel’s employment and service relationship with, and termination of employment and service from, the Company, and receipt of the payments and benefits pursuant to the Van Berkel Separation Agreement remains subject to Ms. Van Berkel’s compliance with the confidentiality, nondisclosure, nonsolicitation and other restrictive covenants set forth in her employment agreement.

Separation Agreement with Mr. Gomez. On December 11, 2014, the Company announced that Mr. Gomez would terminate his employment with the Company, effective the later of February 13, 2015 or the date which is 10 business days following notice to Mr. Gomez that the Company has hired a new in-house counsel.  Mr. Gomez’ termination became effective on February 27, 2015. On December 10, 2014 the Company also entered into the Gomez Separation Agreement, which provides Mr. Gomez with payments and benefits that are consistent with the payments and benefits to which he was entitled pursuant to the terms of his employment agreement. These payments and benefits are as follows:

In addition, the Gomez Separation Agreement includes releases by Mr. Gomez of all claims related to Mr. Gomez’s employment and service relationship with, and termination of employment and service from, the Company, and receipt of the payments and benefits pursuant to the Gomez Separation Agreement remains subject to Mr. Gomez’s compliance with the confidentiality, nondisclosure, nonsolicitation and other restrictive covenants set forth in his employment agreement.

COMPENSATION COMMITTEE REPORT

The information contained under this “Compensation Committee Report” shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any filings under the Securities Act of 1933, as amended (“Securities Act”), or under the Exchange Act, or be subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates this information by reference into any such filing.

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis. Based on this review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement in accordance with Item 407(e)(5) of Regulation S-K.

This report is submitted by the Compensation Committee.

January 20, 201619, 2017

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal 2015,2016, the members of the Company’s Compensation Committee included Messrs. Scott, (chairman), Bogomolny, Coringrato, Domenik, Fine and McCorkle.Jackson. No member of the Compensation Committee served as one of the Company’s officers or employees during fiscal 20152016 or was formerly an officer or employee of the Company at any time. None of the Company’s executive officers served as a member of the compensation committee of any other company that has an executive officer serving as a member of the Company’s Board of Directors or Compensation Committee during fiscal 2015.2016. None of the Company’s executive officers served as a member of the board of directors of any other company that has an executive officer serving as a member of the Company’s Compensation Committee during fiscal 2015.

2016.

COMPENSATION RISK

The Compensation Committee has reviewed the Company’s compensation policies and practices for all employees, including executive and non-executive officers, and determined that the Company’s compensation programs do not give rise to risks reasonably likely to have a material adverse effect on the Company.  The Committee noted several design features of the Company’s cash and equity incentive programs for all executive officers in particular that reduce the likelihood of excessive risk-taking and instead encourage behaviors that support sustainable value creation by rewarding employees for achieving long-term financial and strategic objectives through prudent business judgment and appropriate risk taking. Some of these elements include:

OWNERSHIP OF SECURITIES

SECURITY OWNERSHIP OF

CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of January 14, 201619, 2017 certain information regarding the beneficial ownership of Common Stock of the Company by: (i) each Named Executive Officer of the Company, (ii) each director and nominee, (iii) all directors and current executive officers as a group (7 persons), and (iv) each person or “group” (as that term is defined in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more than 5% of the Common Stock of the Company. Except as otherwise indicated, the Company believes, based on information furnished by such persons, that each person listed below has the sole voting and investment power over the shares of Common Stock shown as beneficially owned, subject to community property laws, where applicable. Shares beneficially owned include shares of Common Stock, options to acquire shares of Common Stock and restricted stock units that are exercisable or will vest within sixty (60) days of January 14, 201619, 2017 and phantom share credits representing shares of Common Stock earned by directors for services on the Board that such directors have elected to defer and which will be settled in Common Stock upon a change of control or after such directors’ termination of service as a director of the Company. Unless otherwise indicated, the address of each of the beneficial owners is c/o EMCORE Corporation, 2015 W. Chestnut Street, Alhambra, CA, 91803.