Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)
On August 14, 2019, Russell Knittel, a director of Synaptics Incorporated (the “Company”), informed the Company that he has decided to retire as a director of the Company and will not stand forre-election to the Company’s Board of Directors (“Board”) at the Company’s 2019 annual meeting of stockholders (the “Annual Meeting”). Mr. Knittel will serve out his remaining term as a director, which expires immediately prior to the Annual Meeting. Mr. Knittel’s decision is not related to any disagreement relating to the Company’s operations, policies or practices.
Effective August 19, 2019, Alex Wong has voluntarily resigned his position as Principal Executive Officer of the Company and will resume his position as the Company’s Senior Vice President of Worldwide Operations.
(c)
Effective August 19, 2019, the Board formally appointed Michael Hurlston as President and Chief Executive Officer of the Company. In connection with his appointment, the Company and Mr. Hurlston have executed an offer letter (the “Offer Letter”) and the Board has approved the terms of his compensation under the Offer Letter. The following is a summary of the terms and conditions of employment within the Offer Letter.
Mr. Hurlston will receive a base annual salary of $700,000. He is eligible to receive an annual incentive target of 130% of his base salary for each Company fiscal year, prorated for the Company’s fiscal year 2020. Payment of the incentive will be based on company-wide performance and is ultimately at the discretion of the Board.
Mr. Hurlston will additionally receive the following equity compensation:
Initial equity grant: Effective August 19, 2019, Mr. Hurlston will receive a grant of 59,772 restricted stock units (“RSUs”) and a target amount of 154,985 market stock units (“MSUs”). The RSUs and MSUs will vest annually over four years.
Contingent equity grant: Effective as of the later of (i) August 19, 2019, or (ii) that certain date upon which the acquisition of Finisar Corporation byII-VI Incorporated (the “Acquisition”) has closed, and provided that the Acquisition has closed on or prior to November 9, 2019, Mr. Hurlston will receive an amount of RSUs corresponding to a $5,000,000 equity value and a target amount of MSUs corresponding to a $1,000,000 equity value. The RSUs and MSUs will vest annually over four years, and both grants will fully vest in the event that Mr. Hurlston is terminated without Good Cause or resigns with Good Reason, as those terms are defined in the Synaptics Severance Policy for Principal Executive Officers.
Refresh equity grant: Effective October 31, 2019, Mr. Hurlston will receive an amount of RSUs corresponding to a $1,500,000 equity value, a target amount of MSUs corresponding to a $1,500,000 equity value, and a target amount of performance stock units (“PSUs”) corresponding to a $1,500,000 equity value. The RSUs, PSUs, and MSUs will vest annually over three years.
For all equity awards, MSU achievement will be based on Company total shareholder return performance and PSU achievement will be based on the Company’s attainment of certain levels ofnon-GAAP earnings per share, each as determined by the Board. The terms, including vesting schedules and performance periods, of the RSU, MSU and PSU awards are as determined by the Board. The vesting of the RSUs, MSUs, and PSUs is contingent on Mr. Hurlston’s continued employment with Synaptics.
The Board additionally designated Mr. Hurlston as an “Executive” under the Synaptics Incorporated Change of Control Severance Policy for Principal Executive Officers and a “Covered Executive” under the Synaptics Incorporated Severance Policy for Principal Executive Officers, the current versions of which have been previously filed by Company. The Company has entered into an indemnification agreement with Mr. Hurlston.
Mr. Hurlston, 52, served as Chief Executive Officer and a member of the Board of Directors of Finisar Corporation from January 2018 to August 2019. Prior to joining Finisar, he served as Senior Vice President and General Manager of the Mobile Connectivity Products/Wireless Communications and Connectivity Division and held senior leadership positions in sales, marketing and general management at Broadcom Limited from November 2001 through October 2017. Prior to joining Broadcom in 2001, Mr. Hurlston held senior marketing and engineering positions at Oren Semiconductor, Inc., Avasem, Integrated Circuit Systems, Micro Power Systems, Exar and IC Works from 1991 until 2001. Mr. Hurlston is also a member of the board of directors of Ubiquiti Networks, Inc. and Vilynx Inc. Mr. Hurlston received a B.S.E.E., an M.S.E.E. and an M.B.A. from the University of California, Davis.
(d)
Effective August 19, 2019, the Board appointed Michael Hurlston as a Class 2 director of the Company with a term expiring immediately prior to the Annual Meeting. In connection with Mr. Hurlston’s appointment, the Board also expanded the number of Class 2 directors of the Company from two to three and the total number of directors of the Company from eight to nine.
Other than the Offer Letter, there are no arrangements or understandings between Mr. Hurlston and other persons pursuant to which Mr. Hurlston was appointed director of the Company’s Board. Mr. Hurlston does not have any relationship or related transaction with the Company that would require disclosure pursuant to Item 404(a) of Securities and Exchange Commission RegulationS-K.
